BETHEL LUTHERAN TRUST OF

BETHEL LUTHERAN CHURCH OF CUPERTINO, CALIFORNIA

WHEREAS, Bethel Lutheran Church of Cupertino, California, a religious non profit corporation organized and existing under the laws of the State of California, desires to establish an endowment trust fund to be known as the Outreach and Education Fund for the purposes more particularly hereinafter set forth, with a view to encourage gifts or bequests to be managed and administered as a perpetual fund;

WHEREAS, said church is willing to authorize, establish, and perpetuate such Outreach and Education fund in accordance with the provisions set forth below;

WHEREAS, said church also wishes to establish a non-perpetual trust fund which shall be known and referred to as the “Memorial Fund”.

NOW, THEREFORE, in consideration of gifts and bequests to be made by members and friends of Bethel Lutheran Church of Cupertino, California, and pursuant to approval and authorization duly given by appropriate corporate action of its membership, said church agrees and binds itself to the following terms and conditions:

ARTICLE 1

Definitions

1.1. “Church” shall mean Bethel Lutheran Church of Cupertino, California, or any successor thereof.

1.2 “Members” or “Membership” or “Congregation” shall mean the members of Bethel Lutheran Church of Cupertino, California.

1.3 “Fund” or “Trust Fund” shall mean any Trust Fund described herein. “Outreach and Education Fund” shall mean the perpetual fund established by Article 2 herein. “Memorial Fund” shall mean the non-perpetual fund established by Article 4 herein.

1.4 “Property” shall include but is not limited to money, securities, stocks, land, leases, royalties, partnership interest and other financial interests, assets and insurance policies or the proceeds thereof.

1.5 “Gifts” shall mean intervivos gifts and donations during the donor’s lifetime.

1.6 “Bequests” shall mean donations received through the donor’s will or other testamentary instrument.

1.7 “Church Purposes” means purposes in aid of programs and mission of the church, the purposes set forth in the church’s Articles of Incorporation, Constitution, and those hereinafter enumerated.

1.8 “Endowment Trustees” shall mean the endowment trustees as board consisting of five members of the church, elected by the church membership, who are declared to be co-trustees and shall act as the “Endowment Trustee” on behalf of the funds established or authorized by this instrument, including any subsequent amendments or modifications thereto.

ARTICLE 2

Perpetual Fund

2.1 There is hereby established as the Outreach and Education Fund, a perpetual fund, to be built from gifts and bequests, the principal of which shall be held in a trust in perpetuity, or as hereinafter expressly provided otherwise.

2.2 The Outreach and Education Fund is created and shall be operated exclusively for church purposes. No part of the income or property of this perpetual fund shall accrue for the benefit of, or be distributed to, any Trustee, any member, director or officer of the church or to any other private person, except as the Trustees are authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth herein. No part of the activities of the Trust Fund shall be the carrying on of propaganda or otherwise attempting to influence legislation, and it shall not participate in or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office. Notwithstanding any other provision herein, the Trust Fund shall not (a) carry on any activities not permitted to be carried on by an entity exempt from federal income tax under §501(c)(3) of the Internal Revenue Code (or any corresponding provision of any future Internal Revenue Code) or (b) do any act which would render contributions for purposes of the Trust Fund nondeductible under §170(c)(2) of the Internal Revenue Code (or any corresponding provision of any future Internal Revenue Code).

2.3 The church may receive gifts and bequests to be placed in the fund established herein from any other source in cash or in other property acceptable to the Endowment Trustees. All funds or property of whatever nature so received together with all income thereon shall be held, managed, administered, and distributed pursuant to the determination of the Endowment Trustees according to the terms and provisions herein. All funds and property of the Trust Fund shall be held and maintained separate and independent from the funds and property otherwise belonging to the church.

2.4 The church may accept gifts and bequests which are restricted as to their uses and purposes, and shall distribute the income and/or principal in accordance with the directions of the donor, provided such restrictions and directions are within the purposes and objectives referred to in this instrument. The Endowment Trustees or the church, in the absolute discretion of either, may reject or disclaim any gift or bequest. The Endowment Trustees may commingle the funds and property held in the Outreach and Education Fund, the Memorial Fund, and any other funds or property held in the Trust Fund, and administer such funds as a perpetual Trust Fund, so long as the Endowment Trustees keep accurate records reflecting the income and disbursements properly allocable to each fund. The Endowment Trustees, shall in no event be required to physically segregate the assets of the trust estate in order to conform to the directions of any individual donor, but may establish separate accounts in its accounting records.

2.5 Pursuant to a separate supplemental agreement conforming with the requirements of Internal Revenue Code §170(f), regarding contributions to charitable remainder trusts, as from time to time amended, the church may accept gifts or bequests subject to the directions of the donor to pay the income to or for the benefit of individuals, including the donor, for life or a term of years, and thereafter such gifts shall be held for the objectives and purposes set forth herein.

ARTICLE 3

Distributions for the Outreach and Education Fund

3.1 Income: The Endowment Trustees shall distribute income from the Outreach and Education Fund at such time and in such manner as they may determine, or as may be required by restrictions on such donations, only for the purposes of the church as set forth herein. Such uses and purposes shall be consistent with the Articles of Incorporation and the Constitution of the church and shall be “visionary” rather than maintaining or supplementing the general budget of the church. Distributions should be made with particular emphasis on extending the life and mission of the church, including but not limited to:

a. Missions outreach, educational and charitable work of Bethel Lutheran Church of Cupertino, California, and its environs;

b. Contributions to the programs of Evangelical Lutheran Church of America, with headquarters in Chicago, Illinois, or the Sierra Pacific Synod of the Evangelical Lutheran Church in America, or any successor in interest.

3.2 Undistributed Income. Any income not distributed within 12 months after the end of the calendar year in which it was earned shall be added to and become part of the principal of the Outreach and Education Fund.

3.3 Loans of Principal: The Endowment Trustees, by not less than four (4) affirmative votes, may authorize loans of principal to the local congregation on occasions of extreme financial need by the church. Such loans may be secured or unsecured, and may be at any rate of interest, including interest free, as determined by the Endowment Trustees. Extreme financial need shall be deemed to exist only when the continued existence of the church as a body will be threatened because of the lack of operating funds unless such principal is loaned. The existence of such extreme financial need shall be determined by the Endowment Trustees and shall require not less than four (4) affirmative votes. The Endowment Trustees may also, by not less than four (4) affirmative votes, recommend to the Congregation invasion of the fund principal. The Congregation’s authorizing action requires approval by two thirds (2/3) of a quorum.

ARTICLE 4

Memorial Fund

4.1 There is hereby established for administration by the Endowment Trustees a non-perpetual fund known as the “Memorial Fund”. The church may receive gifts or donations which are not to be included in the general fund of the church or the Outreach and Education Fund. The Memorial Fund shall be administered and distributed in the same manner and for similar purposes as the Outreach and Education Fund described herein, except that the Endowment Trustees, in their discretion, may distribute both principal and income from the Memorial Fund for the church purposes as described herein.

ARTICLE 5

Board of Endowment Trustees

5.1 Appointment of Endowment Trustees. There shall be five Endowment Trustees, all of whom shall be voting members of Bethel Lutheran Church of Cupertino, California, elected by the church membership for terms of three years. The church council shall submit annual nominations for position of Endowment Trustees for election by the church membership at the annual meeting. The terms of the initial Endowment Trustees elected shall be so fixed that one of them expires in the first year thereafter, two in the second year thereafter, and two in the third year thereafter. Subsequently, each year at the annual meeting of the church membership, the congregation shall elect Endowment Trustees to fill positions for which terms have expired. Vacancies in the office of Endowment Trustees, for whatever cause, shall be filled by appointment by the remaining Endowment Trustees until the next annual meeting of church membership, at which time the congregation shall elect a trustee to serve the remainder of any vacancy so long as there shall continue to be at least three Endowment Trustees in office. The Endowment Trustees shall not serve more than two consecutive full terms. A partial term of less than one year shall not be counted for this purpose. The pastors of the Church, and the President of the Church Council, shall be advisory non-voting members of the Board of Trustee.

5.2. Officers. The officers of the Endowment Trustees shall be President, Vice President, Secretary, and Treasurer. The Endowment Trustees shall elect their officers, and shall hold meetings from time to time as decided by them, but at least quarterly. Special meetings may be called on twenty-four (24) hours written or oral notice to the Endowment Trustees. Regular meetings shall require no notice other than recording of the resolution of the Endowment Trustees fixing the time of the regular meetings. Each trustee is charged with knowledge of the contents of the minutes book.

5.3 Voting and Resolutions: All actions of the Endowment Trustees shall be taken by resolution at a meeting. A quorum shall consist of three Endowment Trustees. When only three Endowment Trustees are present at a meeting, a unanimous vote shall be required to carry any motion or resolution. An instrument required to be executed by the Trust Fund shall be valid if executed in the name of the Trust Fund by a majority of the Endowment Trustees.

5.4 Minutes. The secretary shall maintain complete and accurate minutes of all meetings of the Endowment Trustees and shall supply a copy thereof to each member within ten (10) days after the meeting. The minutes of the trustee meetings can be reviewed by a member of the Congregation upon request of the President of the Church Council.

5.5. Trustee's Liability. No trustee shall be liable to any interested party for acts or omissions of that trustee, except those resulting from that trustee's willful misconduct or gross negligence. This standard shall also apply regarding a trustee's liability for the acts or omissions of any co-trustee, predecessor trustee, or agent employed by the Endowment Trustees.

5.6 Conflicts of Interest. No trustee shall have any pecuniary interest, nor receive or derive compensation or pecuniary gain or profit, either directly or indirectly from Trust Fund activities or property of funds on investments.

5.7. Procedure for Resignation. Any trustee may resign at any time, without giving a reason for the resignation, by giving written notice, at least 30 days before the time the resignation is to take effect, to the president or to any other two Endowment Trustees then acting.

5.8. Removal of Trustee. The church membership or the church council, by two-thirds vote of those present at a duly constituted meeting, may remove any trustee with or without cause by giving such trustee at least sixty (60) days written notice. Any vacancy in the office of trustee shall be filled according to the terms set forth in paragraph 5.1.

ARTICLE 6

Management Powers of Endowment Trustees

6.1. General Powers of Trustee. To carry out the purposes of the trusts created under this instrument, the trustee shall have all of the powers enumerated in this trust instrument and all powers now or hereafter conferred on Endowment Trustees under California law, subject to any limitations stated elsewhere in this trust instrument.

6.2. Trustee's Power to Invest Trust Property. The trustee shall have the power to invest in and acquire every kind of property, real, personal, or mixed, including but not limited to improved and unimproved real property, corporate and government obligations of every kind, stocks (both preferred and common), shares of mutual funds of any character, shares of investment companies, interest-bearing accounts, and foreign assets. The Board of Endowment Trustees shall invest and manage the trust fund as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust fund. In satisfying this standard, the Endowment Trustees’ investment and management decisions respecting individual assets and courses of action must be evaluated not in isolation, but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.

6.3. Life Insurance Powers. To carry out the purposes of the trusts created under this instrument, and subject to any limitations stated elsewhere in this instrument, the trustee shall, in addition to the other powers conferred on the trustee by law and by this instrument, have the power to do all of the following:

(a) Purchase life insurance on the life of any person.

(b) Exercise all incidents of ownership, options, benefits, rights, and privileges with respect to any life insurance policy that is part of the trust estate.

(c) Pay premiums, assessments, or other charges on any life insurance policy that is part of the trust estate or that may designate the trust fund as beneficiary.

(d) Borrow funds from the insurer in accordance with the terms of any life insurance policy that is part of the trust estate or that may designate the trust as beneficiary, for the purpose of paying any premiums, assessments, or other charges.

(e) Otherwise do anything necessary or proper to keep any such policy a binding contract of insurance.

(f) Collect any and all sums payable under any life insurance policy or employee benefit plan, and exercise any of the allowable options for the payment of any such sums. The trustee shall collect any disability payments under any life insurance policy that is part of the trust estate.

6.4. Custody of Life Insurance Policy. The trustee shall not be required to keep custody of any life insurance policy that is part of the trust estate or that designates the trust as beneficiary.

6.5 Power to Employ Agents. The Board of Endowment Trustees shall have the power to employ and discharge agents and employees, including but not limited to attorneys, accountants, investment and other advisors, custodians of assets, property managers, real estate agents and brokers, and appraisers, to advise and assist the Endowment Trustees in the management of the trust fund, and compensate them from the trust fund.

6.6 Delegation of Acts to Trustee. Notwithstanding any other provision of this instrument, the Board of Endowment Trustees may delegate to one or more Endowment Trustees routine acts of administration of the trust fund, and may establish accounts for the trust fund that will honor the signature of one, or fewer than all of the Endowment Trustees then serving.

6.5 Bond. At the discretion of the Board of Endowment Trustees, bond may be required in an amount determined by the Endowment Trustees for any trustee who has been delegated check signing authority. Premiums for such bond shall be an administrative expense of the trust fund.

6.6 Accounts. The Board of Endowment Trustees shall maintain complete and accurate books of accounts, and shall render an account of the trust fund at each annual meeting of the church membership for the preceding year. In addition, all Endowment Trustees shall endeavor to maintain a high degree of communication with the Church Council, other organizations within the church, and members of the congregations in order that needs be properly assessed and the total life and mission of the church be nurtured.

ARTICLE 7

Concluding Provisions

7.1 Amendment and Modification. The Trust Fund provided herein shall be irrevocable. The foregoing provisions may be amended or modified from time to time by the membership of the church by a two-thirds affirmative vote of those present at a duly constituted meeting, whenever necessary or advisable for the more convenient or efficient administration of the Trust Fund or to enable the Endowment Trustees to carry out the purpose of the Trust Fund more efficiently; but no such amendment or modification shall ever alter the intention that the Trust Fund be operated exclusively for religious or charitable or benevolent purposes, and in the manner which shall make the Trust Fund tax exempt and the donations tax deductible, to the extent allowed by the Internal Revenue Code and other applicable laws and regulations.

7.2 Termination. The property of the trust fund is irrevocably dedicated to purposes consistent with the Articles of Incorporation and the Constitution of the church, and no part of the net income or assets of this trust fund shall ever accrue to the benefit of any trustee, officer or member thereof or to the benefit of any private person. Upon the termination of the Trust Fund, its assets remaining after payment, or provision for payment, of all debts and liabilities of the trust fund or the church shall be distributed to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable purposes and which has established its tax exempt status under IRC §501(c)(3).

IN WITNESS WHEREOF, the membership of the church has duly agreed to the foregoing through proper corporate approval by the congregation and has caused this instrument to be executed by its duly authorized officers.

Executed in Santa Clara County California, on _______________________, 1999.

BETHEL LUTHERAN CHURCH OF CUPERTINO, CALIFORNIA

______________________________ ______________________________

By:___________________________ By:___________________________

President Secretary