BYLAWS OF THE PRESERVE AT STONE OAK OWNERS ASSOCIATION, INC.
ARTICLE I NAME AND LOCATION The name of the corporation is The Preserve at Stone Oak Owners Association, Inc., hereinafter referred to as the “Association”. The principal office of the Association shall be located at 12554 Riata Vista Circie, Second Floor, Austin, Texas 78727, but meetings of members and directors may be held at such places within the State of Texas, County of Williamson or Travis, as may be designated by the Board of Directors.
ARTICLE H DEFINITIONS Unless the context otherwise specifies or requires, the following words and phrases when used in these Byiaws shall have the meanings hereinafter specified: Section 2.1. Articles. "Articles" shail mean the Articles of Incorporation of The Preserve at Stone Oak Owners Association, Inc., which will be filed in the office of the Secretary of State of the State of Texas, as the same may from time to dme be amended.
Section 2.2. Assessment. "Assessment" or “Assessments” shall mean assessment(s) levied by the Association under the terms and provisions of the Declaration.
Section 2.3. Association. “Association” shall mean and refer to The Preserve at Stone Oak Owners Association, Inc.
Section 2.4, Association Property. “Association Property” shali mean all real or personal property now or hereafter owned by the Association, including without limitation, all easement estates, licenses, leasehold estates and other interests of any kind in and to real or personal property which is now or hereafter owned or held by the Association.
Section 2.5. Association Restrictions. “Association Restrictions" shall meen the Declaration as the same may be amended from time to time, together with the Articles, Bylaws, Committee Rules,
ciation.
Section 2.5. Association Restrictions. “Association Restrictions" shall meen the Declaration as the same may be amended from time to time, together with the Articles, Bylaws, Committee Rules, and Association Rules from time to time in effect.
Section 2.6. Association Rules. “Association Rules" shall mean the rules and regulations adopted by the Board pursuant to the Declaration, as the same may be amended from time to time.
Section 2.7, Board. “Board” shall mean the Board of Directors of the Association, Section 2.8. Bylaws, "Bylaws" shail mean the Bylaws of the Association, which may be adopted by the Board and as from time to time amended.
Section 2.9. Declarant. “Declarant” shall mean Bell-Nash/Rathgeber Joint Venture, and its duly authorized representatives or its successors or assigns; provided that any assignment of the rights of Declarant must be expressly set forth in writing and the mere conveyance of a portion of the Property without written assignment of the rights of Declarant shall not be sufficient to constitute an assignment of the rights of Declarant hereunder.
Section 2.10. Declaration. "Declaration" shall mean the “Declaration of Covenants, Conditions, and Restrictions - The Preserve at Stone Oak” dated and recorded in the Official Public Records of Travis County, Texas, as the same may be amended from time to time.
Section 2.11. Lot. "Lot™ or “Lots” shall mean any parcel or parcels of land within the Property, together with all improvements located thereon.
Section 2.12, Manager. "Manager" shall mean the person, firm, or corporation, if any, employed by the Association pursuant to the Declaration and delegated the duties, powers, or functions of the Association.
2.12, Manager. "Manager" shall mean the person, firm, or corporation, if any, employed by the Association pursuant to the Declaration and delegated the duties, powers, or functions of the Association.
Section 2.13. Member. "Member" or "Members" shall mean any person(s), entity or entities holding membership privileges in the Association as provided in the Declaration.
Section 2.14. Mortgage. "Mortgage" or “Mortgages” shall mean any mortgage(s) or deed(s) of trust covering any portion of the Property given to secure the payment of a debt.
Section 2.15. Mortgagee. “Mortgagee" or "Mortgagees” shall mean the holder or holders of any lien or liens upon any portion of the Property.
Section 2.16. Owner. "Owner" or “Owners” shall mean the person(s), entity or entities, including Declarant, holding a fee simple interest in any Lot, but shall not inchide the Mortgagee of a Mortgage.
Section 2.17. Property. “Property” shall mean and refer to that tract or parcel of land situated in Williamson County, Texas, which is more fully described in the Declaration.
ARTICLE fi PURPOSE AND POWERS OF THE ASSOCIATION The Association is organized in accordance with, and shall operate for nonprofit purposes pursuant to, the Texas Nonprofit Corporation Act, and does not contemplate pecuniary gain or profit to its mernbers. The Association is formed for the sole purpose of exercising all of the powers and privileges, and performing all of the duties and obligations, of the Association as set forth in that certain "Declaration of Covenants, Conditions and Restrictions - The Preserve at Stone Oak,” dated be amended from time to time (the “Declaration"). Without limiting the generality of the foregoing,
Oak,” dated be amended from time to time (the “Declaration"). Without limiting the generality of the foregoing, the Association is organized for the following general purposes: (a) to assure the upkeep, maintenance, improvement and administration of the common area and facilities of the Association, if any, and all lands, improvements, security devices, and other real or personal property owned by or leased to the Association, including all sidewalks and pathways located within the “Property” (as such term is defined in the Declaration); (b) to assure the upkeep, maintenance, improvement and administration of any additional property which may in the future be acquired by or placed under the control of the Association pursuant to the Declaration, as amended from time to time; (c) to enter into and perform any contract and to exercise all powers which may be necessary or convenient to the operation, management, maintenance and administration of the affairs of the Property in accordance with the Bylaws of the Association and the Declaration, as amended from time to me; (d) to prornote the health, safety and welfare of the residents of the Property in accordance with the Declaration, as amended from time to time: (e) to exercise all of the powers and privileges and to perform all of the duties and obligations of the Association arising under the Declaration, as amended from time to time; ® to enforce applicable provisions of the Declaration (as amended from time to time), the Bylaws and any rules and regulations of the Association, and any other instruments for the management and contro! of the Property including, without limitation, the power:
nded from time to time), the Bylaws and any rules and regulations of the Association, and any other instruments for the management and contro! of the Property including, without limitation, the power: (i to fix, levy, collect and enforce payment, by any lawful means, of all charges or assessments imposed pursuant to the terms of the Declaration, as amended from time to time: ii) to contract for and to pay for water, sewer, garbage removal, landscaping, gardening, and all other utilities or services to and all maintenance of the Association Property; (ii!) to employ personnel reasonably necessary for the administration and operation of the Association, and to discharge the powers and duties of the Association arising under the Declaration, as amended from time to time, including the employment of accountants and/or attorneys, if appropriate; and (iv) to pay all office and other expenses incident to the conduct of the business of the Association, including ali insurance expenses, licenses, taxes and special tax or utility assessments which are or would become a lien on any portion of the Property over which the Association has authority to exercise control; (g) ic have and to exercise any and all powers, rights and privileges, including delegation of powers as permitted by law, which the Association may now or hereafter have or exercise in accordance with the Texas Non-Profit Corporation Act including, without limitation, the power; (i) to acquire additional real or personal property and to add to the Property pursuant to the Declaration, as amended from time to time; (ii) to acquire (by purchase, grant or otherwise), ammex and merge, own, hold, improve, build upon, operate, maintain, convey, sell, lease, transfer, dedicate for public
as amended from time to time; (ii) to acquire (by purchase, grant or otherwise), ammex and merge, own, hold, improve, build upon, operate, maintain, convey, sell, lease, transfer, dedicate for public use or otherwise dispose of real or personal property in connection with the affairs of the Association, with the assent of two-thirds (2/3) of each class of Members present at a meeting duly called for such purpose; (iii) to indemnify officers and directors to the fullest extent permitted by applicable law as more particularly described in the Bylaws of the Association: (iv) to borrow money, and, with the assent of two-thirds (2/3) of each class of Members present at a meeting duly called for such purpose, mortgage, pledge, or assign any or all of its real or personal property as security for money borrowed or debts incurred in accordance with the terms and conditions of the Declaration, as amended from time to time; and (v) to act in the capacity of principal, agent, joint venturer, partner, or otherwise.
The foregoing statement of purposes shail be construed as a statement of both purposes and powers, and the purposes and powers stated in each of the foregoing clauses shall not be limited or restricted by reference to or inference from the terms and provisions of any other such clause, but shall be broadly construed as independent purposes and powers. The Association is organized in accordance with and shall operate for nonprofit purposes pursuant to the Texas Non-Profit Corporation Act and no pecuniary gain or profit to its members is contempleted hereby.
ARTICLE fV MEMBERSHIP There shall be two classes of membership for purposes of voting on any Association matter.
Corporation Act and no pecuniary gain or profit to its members is contempleted hereby.
ARTICLE fV MEMBERSHIP There shall be two classes of membership for purposes of voting on any Association matter.
The Class A Members shall include each owner (exchiding Declarant under the Declaration) of a lot within the Property and each such owner shall have one (1) vote for each lot owned. The Class B Member shall be Declarant and Declarant shall have three (3) votes for each lot owned by Declarant.
The Class B Membership shall convert to a Class A Membership upon the earlier to occur of (i) Declarant owns less than twenty-five percent (25%) of the Property, or (ii) ten (10) years from the date of the Declaration. Membership may not be severed from or in any way tansferred, pledged, mortgaged, or alienated except together with the tite to the qualifying property interest, and then only to the transferee of title to said property interest. Any attempt to make a prohibited severance, transfer, pledge, mortgage, or aenation shall be void.
ARTICLE V MEETING OF MEMBERS Section 5.1. Annual Meetings. The first annue!l meeting of the Members shall be held within Members shall be held at such time as the Hoard may determine.
by the President or the Board of Directors, or upon written request of either class of Members who are entitled to vote twenty-five percent (25%) or more of the votes of said class.
given by, or at the direction of, the Secretary or person authorized to call the testing, by mailing ¢ copy of such notice, postage prepaid, at least ten (10) and no more than fifty (50) days before such
en by, or at the direction of, the Secretary or person authorized to call the testing, by mailing ¢ copy of such notice, postage prepaid, at least ten (10) and no more than fifty (50) days before such meeting to each Member entitled to vote at the meeting, addressed to the Member's address last appearing on the books of the Association, or supplied by such Member to the Association for the purpose of notice. Such notice shall specify the place, day, and hour of the meeting, and, in the case of a special meeting, the purpose of the meeting, Section 5.4. Quorum. The presence at the meeting of Members entitled to cast, or of proxies entitled to cast, one-tenth (1/10th) of the total votes of each class of membership shall constitute a quorum for any action, except as otherwise provided in the Articles, the Declaration, or these Bylaws.
If, however, such quorum is not present or represented at any meeting, the Members entitled to vote at the meeting shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.
Section 5.5. Proxies. At all meetings of Members, each Member may vote in person or by proxy. All proxies shall be in writing and filed with the Secretary. Every proxy shall be revocable and shall automatically cease upon conveyance by the Member of his Lot.
Section 5.6. Voting Rights. The right to cast votes, and the number of votes which may be cast, for election of Members to the Board of Directors of the Association and on ail other matters to be voted upon by the Members, shall be in accordance with Article VI, Section 6.03 of the Declaration.
Section 5.7, Majority Vote; Withdrawal of Quorum. When a quorum is present at any
ther matters to be voted upon by the Members, shall be in accordance with Article VI, Section 6.03 of the Declaration.
Section 5.7, Majority Vote; Withdrawal of Quorum. When a quorum is present at any meeting of the Members, the vote of the holders of @ majority of the votes, present in person or represented by proxy, shall decide any question brought before such meeting unless the question is one upon which by express provision of a statute of the State of Texas, the Articles or these Bylaws, a different vote is required, in which case such express provision shall govern and control the deciding of such question. The Members present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Members leaving less than a quorum.
ARTICLE Vi ACTION WITHOUT MEETING Any action required by law to be taken at any annual or special meeting of the members of the Association, or any action that may be taken at any annual or special meeting of the members of the Association, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the number of Members of the Association having the total number of votes necessary to enact the action taken, as determined under the Declaration or these Bylaws.
ARTICLE Vil BOARD OF DIRECTORS; SELECTION; TERM OF OFFICE Section 7.1. Number. The affairs of the Association shall be managed by a Board of three (3) Directors until the first annual or subsequent meeting, at which time the number of members of the Board of Directors may be changed by resolution of the Directors: provided, however, the minimum number of Directors shall be three (3).
subsequent meeting, at which time the number of members of the Board of Directors may be changed by resolution of the Directors: provided, however, the minimum number of Directors shall be three (3).
Director for a term of one (1) year; and at each annual meeting thereafter the Members shall elect the Directors for a term of three (3) years to fill each expiring term.
Section 7.3. Removal. Any Director may be removed from the Board, with or without cause, by a majority vote of the Members of the Association entitled to cast votes pursuant to Section 5.6 of these Bylaws. In the event of death, resignation, or removal of a Director, his successor shall be selected by the remaining members of the Board and shall serve until the next annual meeting of the Members.
Section 7.4. Compensation. No Director shall receive cornpensation for any service he may render to the Association. However, any Director may be reimbursed for his actual expenses incurred in the performance of his duties.
Section 7.5. Action Taken Without a Meeting. The Directors shall have the right to take any action in the absence of a meeting, which they could take at a meeting by obtaining the written approval of all the Directors. Any action so approved shall have the same effect as though taken at a meeting of the Directors.
ARTICLE VII NOMINATION AND ELECTION OF DIRECTORS Settion 8.1. Nomination. Nomination for election to the Board shall be made by & Nominating Committee. Nominations may also be made from the floor at the annual meeting. The Nominating Committee shall consist of a Chairrnan, who shall be a member of the Board and two (2)
made by & Nominating Committee. Nominations may also be made from the floor at the annual meeting. The Nominating Committee shall consist of a Chairrnan, who shall be a member of the Board and two (2) or more Members of the Association. The Nominating Committee shail be appointed by the Board prior to each annual meeting of the Members, to serve from the close of such annual meeting until the Close of the next annual meeting and such appointment shall be announced at each annual meeting. The Nominating Committee shall make as many nominations for election to the Board as it shall in its discretion determine, but not less than the number of vacancies that are to be filled. Such nominations may be made from among Members or nonmembers.
Section 8.2. Election. Election to the Board shall be by secret written ballot. At such election the Members or their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise under the provisions of the Declaration. The persons receiving the largest number of votes shall be elected. Cumulative voting is not permitted.
ARTICLE [X MEETINGS OF DIRECTORS Section 9.1, Regular Meetings. Regular meetings of the Board shall be held annually or such other frequency as determined by the Board, without notice, at such place and hour as may be fixed from time to time by resolution of the Board. Should the meeting fall upon @ legal holiday, then that meeting shall be held at the same time on the next day which is not a legal holiday.
Section 9.2. Special Meetings. Special meetings of the Board shall be held when called by the President of the Association, or by any two Directors, after not less than three (3) days’ notice to each Director.
.2. Special Meetings. Special meetings of the Board shall be held when called by the President of the Association, or by any two Directors, after not less than three (3) days’ notice to each Director.
Section 9.3. Quorum. A majority of the number of Directors shall constitute a guorum for the transaction of business. Every ect or decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Board of Directors.
ARTICLE X LIMITATION OF DIRECTOR LIABILITY A Director of the Association shall not be personally liable to the Association for monetary damages for any act or omission in his capacity as a director, except to the extent otherwise expressly provided by a statute of the State of Texas. Any repeal or modification of this Article shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director of the Association existing at the time of the repeal or modification.
ARTICLE XI POWERS AND DUTIES OF THE BOARD Section 11.1. Powers. The Board shall have power to undertake any of the following actions to the extent and only to the extent that such actions are undertaken in furtherance of the sole purposes of the Association as set forth in the Articles and the Declaration: (a) adopt and publish the Association Rules, including regulations governing the use of the Association Property and facilities, and the personal conduct of the Members and their guests thereon, and to establish penalties for the infraction thereof: (b) suspend the voting rights and right to use of the Association Property during any period in which such Member shall be in default in the payment of any Assessment levied by the
infraction thereof: (b) suspend the voting rights and right to use of the Association Property during any period in which such Member shall be in default in the payment of any Assessment levied by the Association, or after notice and hearing, for any period during which an infraction of the Association Rules exists; {c) exercise for the Association all powers, duties and authority vested in or related to this Association and not reserved to the membership by other provisions of the Association Restrictions; (d) declare the office of a member of the Board to be vacant in the event such member shall be absent from three (3) consecutive regular m Bo (e} employ such employees as they deem necessary, and to prescribe their duties; (D as more fully provided in the Declaration, to: (i) fix the amount of the Assessments against each Lot in advance of each annual assessment period and any other assessments provided by the Declaration; and (ii) foreclose the lien against any property for which Assessments are not paid within thirty (30) days after due date or to bring an action at law against the Owner personally obligated to pay the same; (g) issue, Of to cause an appropriate officer to issue, upon demand by any person, a certificate setting forth whether or not any Assessment has been paid and to levy a reasonable charge for the issuance of these certificates (it being understood that if a certificate states that an Assessment has been paid, such certificate shall be conclusive evidence of such payment); (h) procure and maintain adequate liability and hazard insurance on property owned by the Association: : 0) cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate;
hazard insurance on property owned by the Association: : 0) cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate; q) appoint the members of the Architectural Committee as provided in the Declaration: (k) establish reasonable membership or transfer fees; and a) exercise such other and further powers as provided in the Declaration.
Section 11.2, Duties. It shall be the duty of the Board to: (a) cause to be kept a complete record of all its acts and corporate affairs and to present a Statement thereof to the Members at the annual meeting of the Members, or at any special meeting when such statement is requested in writing by either class of Members who are entitled to cast twenty-five percent (25%) of the votes for such class; and (b) supervise all officers, agents and employees of the Association, and to see that their duties are properly performed.
ARTICLE XU OFFICERS AND THEIR DUTIES Section 12.1. Enumeration of Offices. The officers of this Association shall be a President and one Vice-President, who shall at all times be members of the Board, a Secretary and a Treasurer, and such other officers as the Board may from time to time create by resolution.
Section 12.2. Election of Officers. The election of officers shall take place at the first meeting of the Board following each annual meeting of the Members, Section 12.3. Term. The officers of this Association shall be elected annually by the Board and each shall hold office for two (2) years unless he resigns sooner, or shail be removed, or otherwise disqualified to serve.
Section 12.4, Special Appointments. The Board may elect such other officers as the affairs
d office for two (2) years unless he resigns sooner, or shail be removed, or otherwise disqualified to serve.
Section 12.4, Special Appointments. The Board may elect such other officers as the affairs of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as the Board may, from time to time, determine.
Section 12.6. Resignation and Removal. Any officer may be removed from office with or without cause by the Board. Any officer may resign at any time giving written notice to the Board, the President, or the Secretary. Such resignation shall take effect on the date of receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 12.6. Vacancies. A vacancy in any office may be filled through appointment by the Board. The officer appointed to such vacancy shall serve for the remainder of the term of the officer he replaces, Section 12.7. Multiple Offices. The offices of Secretary and Treasurer may be held by the ‘ same person. No person shall simultaneously hold more than one of any of the other offices except in the case of special offices created pursuant to Section 12.4.
Section 12.8. Duties. The duties of the officers are as follows: (a) President. The President shall preside at all meetings of the Board; shall see that orders and resolutions of the Board are carried out; shall sign all leases, mortgages, deeds and other written instruments and shal) co-sign all checks and promissory notes.
(b) Vice President. The Vice President shall generally assist the President and shall have
all leases, mortgages, deeds and other written instruments and shal) co-sign all checks and promissory notes.
(b) Vice President. The Vice President shall generally assist the President and shall have such powers and perform such duties and services as shali from time w dime be prescribed or delegated to him by the President or the Board, (c} Secretary. The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board and of the Members; serve notice of meetings of the Board and of the Members; keep appropriate current records showing the Members of the Association together with their addresses, and shall perform such other duties as required by the Board.
(d) Treasurer. The Treasurer shall receive and deposit in appropriate bank accounts all monies of the Association and shali disburse such funds as directed by resolution of the Board; shall co-sign all checks and promissory notes of the Association; keep proper books of account in appropriate form such that they could be audited by a public accountant whenever ordered by the Board or the membership; and shail prepare an annual budget and a statement of income and expenditures to be presented to the membership at its regular meeting, and deliver a copy of each to the Members. In the event no Treasurer is then serving, the President shall be empowered with the Treasurer's duties, ARTICLE XU OTHER COMMITTEES OF THE BOARD GF DIRECTORS The Board may, by resolution adopted by affirmative vote of a majority of the number of Directors fixed by these Bylaws, designate two or more Directors (with such alternates, if any, as may be deemed desirable) to constitute another committee or committees for any purpose; provided, that
irectors fixed by these Bylaws, designate two or more Directors (with such alternates, if any, as may be deemed desirable) to constitute another committee or committees for any purpose; provided, that any such other committee or committees shall have and may exercise only the power of recornmending action to the Board of Directors and of carrying out and implementing any instructions or any policies, plans, programs and rules theretofore approved, authorized and adopted by the Board.
ARTICLE XIV BOOKS AND RECORDS The books, records and papers of the Association shall at all times, during reasonable business hours, be subject to inspection by any Member. The Association Restrictions shall be available for inspection by any Member at the principal office of the Association, where copies may be purchased at reasonable cost.
ARTICLE XV ASSESSMENTS As more fully provided in the Declaration, each Member is obligated to pay to the Association Assessments, which are secured by a continuing lien upon the property against which the Assessments are made. Assessments shall be due and payable in accordance with the Declaration. If any Assessment is not paid before becoming delinquent, the Owner responsible for the payment thereof Shall be required by the Board to pay interest at a rate of six percent (6%) per annum on such Assessment from the due date thereof and the Association may bring an action at law against the Owner personally obligated to pay the same or foreclose the lien against the Lot or Lots owned by such Owner, and all costs and reasonable attorney's fees of any such action shall be added to the amount of such Assessment. No Owner may waive or otherwise escape liability for the Assessments provided for
wner, and all costs and reasonable attorney's fees of any such action shall be added to the amount of such Assessment. No Owner may waive or otherwise escape liability for the Assessments provided for herein by nonuse of the Association Property or abandonment of his Lot or Lots. Notwithstanding any provision herein to the contrary, the Association may only levy Assessments (regular or special) to defray costs which are incurred in furtherance of the duties of the Association as set forth in the prescribed law, or set forth in the articles of these Bylaws or the Declaration, ARTICLE XVI CORPORATE SEAL The Association may, but shall have no obligation to, have a seal in a form adopted by the Board, ARTICLE XVii AMENDMENTS Section 17.1. These Bylaws may be amended, at a regular or special meeting of the Members, by a majority vote of a quorum of all the Members of the Association.
Section 17.2. In the case of any conflict between the Articles and these Bylaws, the Articles shall control; and in the case of any conflict berween the Declaration and these Bylaws, the Declaration s wt i Mn ARO hens shadi control.
Section 17.3. While there remains any Class B Membership in the Association. the United States Department of Housing and Urban Development and the United States Department of Veterans’ Affairs shall have the right to veto any proposed amendment to the Bylaws of the Association.
ARTICLE XVHi DISSOLUTION The Association may be dissolved upon the written consent of not jess than two-thirds (2/3) of each class of members. Upon dissolution of the Association, other than incident to a merger or consolidation, the assets of the Association shall be dedicated to an appropriate public agency to be
of each class of members. Upon dissolution of the Association, other than incident to a merger or consolidation, the assets of the Association shall be dedicated to an appropriate public agency to be used for purposes substantially similar to those for which this Association was created. In the event that such dedication is refused acceptance, such assets shall be granted, conveyed, and assigned to any nonprofit corporation, association, trust, or other organization to be devoted to such substantially similar purposes.
ARTICLE XIX INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 19.1. Definitions. In this Article XIX: (a) “Indemnitee” means (i) any present or former director, advisory director or officer of the Association; (ii) any person who, while serving in any of the capacities referred to in clause (i) hereof, served at the Association's request as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise; and (iii) any person nominated or designated by (or pursuant to authority granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses () or GD hereof.
(b) “Official Capacity” means (i) when used with respect to a director, the office of director of the Association, and (ii) when used with respect to a person other than a director, the elective or appointive office of the Association held by such person or the employment or agency relationship undertaken by such person on behalf of the Association, but in each case does not
tor, the elective or appointive office of the Association held by such person or the employment or agency relationship undertaken by such person on behalf of the Association, but in each case does not include service for any other foreign or domestic corporation or any partnership, joint venture, sole proprietorship, trast, employee benefit plan or other enterprise.
(c} “Proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, any appeal in such an action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit or proceeding.
Section 19.2. Indemnification. The Association shall indemnify every Indernnitee against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement, and reasonable expenses actually incurred by the Indemnitee in connection with any Proceeding in which he was, is or is threatened to be named a defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of bis serving or having served, or having been nominated or designated to serve, in any of the capacities referred to in Section 19. l(a), if it is determined in accordance with Section 19.4 that the Indemnitee () conducted himself in good faith, (il) reasonably believed, in the case of conduct in his Official Capacity, that his conduct was in the Association's best interests and, in all other cases, that his conduct was at least not opposed to the Association's best interests, and (iii) in the case of any criminal Proceeding, had no reasonabie cause to
on's best interests and, in all other cases, that his conduct was at least not opposed to the Association's best interests, and (iii) in the case of any criminal Proceeding, had no reasonabie cause to believe that his conduct was unlawful; provided, however, that in the event that an Indemnitee is found liable to the Association or is found liable on the basis that personal benefit was improperly received by the Indemnitee, the indemmification (i) is limited to reasonable expenses actually incurred by the Indernmitee in connection with the Proceeding and (il) shall not be made in respect of any Proceeding in which the Indermmitee shall have been found lieble for willful or intentional misconduct in the performance of his duty to the Association. Except as provided in the immediately preceding proviso to the first sentence of this Section 19.2, no indemnification shall be made under this Section 19.2 in respect of any Proceeding in which such Indemmmitee shall have been (1) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the Indermnitee's Official Capacity, or (ii) found liable to the Association. The termination of any Proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, is aot of itself determinative that the Indemnitee did not meet the requirements set forth in ciauses (1), (ii) or (ili) in the first sentence of this Section 19,2. An Indemnites shall be deerned to have been found Hable in respect of any claim, issue or matter only after the Indemmitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. Reasonable
, issue or matter only after the Indemmitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. Reasonable expenses shall include, without limitation, all court costs and all fees and disbursements of attorneys for the Indemnitee.
Section 19.3. Successful Defense. Without limitation of Section 19.2 and in addition to the indemnification provided for in Section 19.2, the Association shall indemnify every Indemnitee against reasonable expenses incurred by such person in connection with any Proceeding in which he is a witness or a named defendant or respondent because he served in any of the capacities referred to in Section 19, 1(a), if such person has been wholly successful, on the merits or otherwise, in defense of the Proceeding.
Section 19.4. Determinations. Any indemnification under Section 19.2 (unless ordered bya court of competent jurisdiction) shall be made by the Association only upon a determination that indemnification of the Indemnitee is proper in the circumstances because he has met the applicable standard of conduct. Such determination shail be made (i) by the Board by a majority vote of a querum consisting of directors who, at the time of such vote, are not named defendants or respondents in the Proceeding; (ii) if such a quorum cannot be obtained, then by a majority vote of all directors (in which designation directors who are named defendants or respondents in the Proceeding may participate), such committee to consist solely of two (2) or more directors who, at the time of the committee vote, are not named defendants or respondents in the Proceeding; (iii) by special legal counsel selected by the
mmittee to consist solely of two (2) or more directors who, at the time of the committee vote, are not named defendants or respondents in the Proceeding; (iii) by special legal counsel selected by the Board or a committee thereof by vote as set forth in clauses () or (ii) of this Section 19.4 or, if the requisite quorum of all of the directors cannot be obtained therefore and such committee cannot be established, by a majority vote of all of the directors (in which directors who are named defendants or respondents in the Proceeding may participate); or (iv) by the Members in a vote that excludes the directors who are named defendants or respondents in the Proceeding. Determination as to reasonableness of expenses shal] be made in the same manner as the determination that indemnification is permissible, except that if the determination that indemnification is permissible is made by special legai counsei, determination as to reasonableness of expenses must be made in the manner specified in Clause (ill) of the preceding sentence for the selection of special legal counsel. In the event a determination is made under this Section 19.4 that the Indemnitee has met the applicable standard of conduct as to some matters but not as to others, amounts to be indemnified may be reasonably prorated.
Section 19.5. Advancement of Expenses, Reasonable expenses (including court costs and attorneys’ fees) incurred by an Indemnitee who was or is a witness or who is or is threatened to be made a named defendant or respondent in a Proceeding shall be paid by the Association at reasonable intervals in advance of the final disposition of such Proceeding, and without making any of the determinations specified in Section 19.4, after receipt by the Association of (i) a written affirmation by
tervals in advance of the final disposition of such Proceeding, and without making any of the determinations specified in Section 19.4, after receipt by the Association of (i) a written affirmation by such Indemnitee of his good faith belief that be has met the standard of conduct necessary for indemnification by the Association under ihis Article XIX and Gi} a written undertaking by or on behalf of such Indemnitee to repay the emount paid or reimbursed by the Association if it shall ultimately be determined that he is not entitled to be indemnified by the Association as authorized in this Article XTX. Such writen undertaking shall be an unlimited obligation of the Indemnitee but need not be secured and it may be accepted without reference to financial abiliry to make repeyment.
Notwithstanding any other provision of this Article XIX, the Association may pay or reimburse expenses incurred by an indemnitee in connection with his appearance as a witness or other participation in a Proceeding at a time when he is not named a defendant or respondent in the Proceeding.
Section 19.6. Employee Benefit Plans, For purposes of this Article XIX, the Association shall be deemed to have requested an Indemnitee to serve an employee benefit plan whenever the performance by him of his duties to the Association also imposes duties on or otherwise involves services by him to the plan or participants or beneficiaries of the plan. Excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed fines.
Action taken or omitted by an Indemnitee with respect to an employee benefit plan in the performance
demnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed fines.
Action taken or omitted by an Indemnitee with respect to an employee benefit plan in the performance of his duties for a purpose reasonably believed by him to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose, which is not opposed to the best interests of the Association.
Section 19.7, Other Indemnification and Insurance. The indemnification provided by this Article XIX shall (i) not be deemed exclusive of, or to preclude, any other rights to which those seeking indemnification may at any time be entitled under the Articles, any law, agreement or vote of Members or disinterested directors, or otherwise, or under any policy or policies of insurance purchased and maintained by the Association on behalf of any Indemnitee, both as to action in his Official Capacity and as to action in any other capacity, (ii) continue as to a person who has ceased to be in the capacity by reason of which he was an Indemnitee with respect to matters arising during the period he was in such capacity, and (iii) inure to the benefit of the heirs, executors, and administrators of such a person.
Section 19.8. Notice. Any indemnification of or advance of expenses to an Indemnitee in accordance with this Article shall be reported in writing to the Members with or before the notice or waiver Of notice of the next meeting of the Members or with or before the next submission to the Members of a consent to action without a meeting and, in any case, within the twelve-month period immediately following the date of the indemnification or advance.
Section 19.9. Construction. The indemnification provided by this Article XIX shall be
and, in any case, within the twelve-month period immediately following the date of the indemnification or advance.
Section 19.9. Construction. The indemnification provided by this Article XIX shall be subject to all valid and applicable laws, including, without limitation, Article 2.02-1 of the Texas Business Association Act, and, in the event this Article XIX or any of the provisions hereof or the indemnification contemplated hereby are found to be inconsistent with or contrary to any such valid laws, the latter shall be deemed to control and this Article XIX shall be regarded as modified accordingly, and, as so modified, to continue in full force and effect.
Section 19.10, Continuing Offer, Reliance, etc. The provisions of this Article XIX (i) are for the benefit of, and may be enforced by, each Indemnitee of the Association the same as if set forth in their entirety in a written instrument duly executed and delivered by the Association and such Indemnitee, and (ii) constitute a continuing offer to all present and future Indemnitees. The Association, by its adoption of these Bylaws, (i) acknowledges and agrees that each Indemnitee of the Association has relied upon and will continue to rely upon the provisions of this Article XIX in becoming, and serving in any of the capacities referred to in Section 19.1(a) hereof, (ii) waives reliance upon, and all notices of acceptance of, such provisions by such Indemnitees, and (iti) acknowledges and agrees that no present or future Indemnitee shall be prejudiced in his right to enforce the provisions of this Article XIX in accordance with their terms by any act or failure to act on the part of the Association.
Section 19.11. Effect of Amendment. No amendment, modification or repeal of this Article
of this Article XIX in accordance with their terms by any act or failure to act on the part of the Association.
Section 19.11. Effect of Amendment. No amendment, modification or repeal of this Article XIX or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitees to be indemnified by the Association, nor the obligation of the Association to indemnify any such Indemnitees, under and in accordance with the provisions of this Article XIX as in effect immediately prior to such arnendment, modification or repeal with respect to claims arising frorn or relating to matters occurring, in whole or in part, prior to such amendment, modification cr repeal, regardless of when such claims may arise or be asserted, ARTICLE XX MISCELLANEOUS The fiscal year of the Association shall begin on the first day of January and end on the 31st day of December of every year, except that the first fiscal year shall begin on the date of incorporation.
Dated this day of May, 2002.
Katrina L. Forbes, Director (}/ i Shane Goodmah, Director 4 Aflac bolt Marie Coleman, Director