ARTICLE ONE
NAME AND OFFICES
SECTION ONE. NAME. The name of the Association is Heatherwilde Homeowners' Association, which is hereinafter referred to as the “Association”.
SECTION TWO. PRINCIPAL OFFICE. The principal office of the Association in the State of Texas shall be established at the location or locations as the Board of Directors shall from time to time determine. The Association may have such other offices, either within or without the State of Texas, as the Board of Directors may determine or as the affairs of the Association may require from time to time.
SECTION THREE. REGISTERED OFFICE AND REGISTERED AGENT. The Association shall have and continuously maintain in the State of Texas a Registered Office, and a Registered Agent whose office is identical with such Registered Office, as required by the Texas Non-Profit Association Act. The Registered Office may be, but need not be, identical with the principal office of the Association in the State of Texas, and the address of the Registered Office may be changed from time to time by the Board of Directors.
ARTICLE TWO
DEFINITIONS
The terms defined in those certain Declarations of Covenants, Conditions and Restrictions (collectively, the "Declarations') recorded or to be recorded in the Office of the County Clerk of Travis County, Texas with respect to portions of all of that certain tract of real property which contains approximately 270.4786 acres of land and is located in Travis County, Texas and is known locally as Heatherwilde (the "Property”), as more fully described in the Articles of Incorporation of the Association, as the Declarations may be amended, changed or modified from time to time, shall have the same meaning in these Bylaws.
ARTICLE THREE
MEMBERSHIP AND VOTING RIGHTS
SECTION ONE. MEMBERSHIP. Every owner of a lot which is part of the Property shall be a Member of the Association and its successors and assigns. Membership shall be appurtenant to and shall not be separated from ownership of any log which is part of the Property.
SECTION TWO. CLASSES OF MEMBERS. The Association shall have two (2) classes of voting membership to be designated, respectively, Class A and Class B:
(A) Class A: The Class A Members shall be all lot owners, with the exception of the Declarant (until conversion of the Class B Membership into the Class A Membership as hereinafter provided), and shall be entitled to one (1) vote for each lot owned. When more than one person owns an interest in any lot, all such persona shall be Members of the Association, but the vote for such lot shall be exercised as the owners of the particular lot shall among themselves determine. In no event shall more than one (1) vote be cast with respect to any lot.
(B) Class B: The Class B Member shall be the Declarant and shall be entitled to three (3) votes for each lot owned by it. The Class B Membership shall cease and be converted to Class A Membership on the happening of either of the following events, whichever first occurs:
(1) Thirty (30) days after the total votes outstanding in the Class A Membership with respect to the entire Property equal or exceed the total votes outstanding in the Class B Membership; or
(2) Ten (10) years following the earliest date upon which ownership of any lot becomes vested in a person other than the Declarant.
If at any time additional subdivisions of the Property are made the subject of one or more of the Declarations and the owners of the lots therein have the right to become Members of the Association, the voting rights of the Class B Member, if same have previously automatically converted to one (1) per lot owned, shall automatically be reverted to three (3) votes for each lot owned until such time as either of the events described in Subsection (B)(1) or Subdivision (B)(2) of this Section Two shall thereafter occur.
ARTICLE FOUR
ASSOCIATION RESPONSIBILITIES AND MEETINGS OF MEMBERS
SECTION ONE. ASSOCIATION RESPONSIBILITIES. The Members will constitute the Association which will have the responsibility of administering and enforcing the covenants, conditions and restrictions contained in the Declarations, including the collection and disbursement of charges and assessments created therein, through a Board of Directors. In the event of any dispute or disagreement between any Members relating to the Property, or any questions of interpretation or application of the provisions of the Declarations, Articles of Incorporation or these Bylaws, such dispute or disagreement shall be submitted to the Board. The determination of such dispute or disagreement by the Board shall be binding on each and all such Members, subject to the right of Members to seek other remedies provided by law after such determination by the Board.
SECTION TWO. ANNUAL MEETINGS. An annual meeting of the Members shall be held on the first Monday of April in each year, beginning with the year 1987, at the hour of 8:00 o'clock P.M., for the purpose of electing Directors and for the transaction of other business as may come before the meeting. If the day fixed for the annual meeting shall be on a legal holiday in the State of Texas, such meeting shall be held on the next succeeding business day. If the election of Directors shall not be held on the day designated herein for any annual meeting, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the Members as soon thereafter as possible.
SECTION THREE. SPECIAL MEETINGS. Special meetings of the Members may be called by the President, the Board of Directors or upon written request of the Members who are entitled to vote one-fourth (1/4) of all of the votes of the Membership.
SECTION FOUR. PLACE OF MEETINGS. The Board of Directors may designate any place, either within or without the State of Texas, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made or if a special meeting be otherwise called, the place of meeting shall be the principal office of the Association in the State of Texas; but if all of the Members shall meet at any time and place, either within or without the State of Texas, and consent to the holding of a meeting, such meeting shall be valid without call or notice, and at such meeting, any corporate action may be taken.
SECTION FIVE. NOTICE OF MEETINGS. Except as otherwise provided in the Declarations, written or printed notice stating the place, day, and hour of any meeting of Members shall be delivered, either personally or by mail, to each Member entitled to vote at such meeting, not less than ten (10) nor more than fifty (50) days before the date of such meeting, by or at the direction, of the President, the Secretary or the Officers or persons calling the meeting. In case of a special meeting or when required by statute, the Declarations or these Bylaws, the purpose or purposes for which the meeting is called shall be stated in the notice. If personally delivered, the notice of a meeting shall be deemed to be delivered when actually received by the recipient thereof. If mailed, the notice of a meeting shall be deemed to be delivered when deposited in the United States mail, postage prepaid, certified or registered mail, return receipt requested and addressed to the Member at his address as it appears on the books of the Association.
SECTION SIX. QUORUM AND MANNER OF ACTION. The presence at the meeting of Members entitled to cast, or of proxies entitled to cast, one-tenth (1/10) of the votes of each class of Membership shall constitute a quorum for any action except as otherwise provided in the Articles of Incorporation, the Declarations, these Bylaws or by applicable law. If a quorum is not present or represented at any meeting of Members, Members holding a majority of the votes present or represented at the meeting may adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum shall be present. At a reconvened meeting at which a quorum is present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. When a quorum is present or represented at any meeting, the vote of the majority of the votes entitled to be cast by the Members present or represented at the meeting shall be required to decide any question brought before the meeting, unless the question is one upon which, by express provision of the statutes, the Articles of Incorporation, the Declarations or of these Bylaws, a different vote is required, in which case the express provision shall govern and control the vote required for decision upon the question.
SECTION SEVEN. PROXIES. At any meeting of Members, a Member entitled to vote may vote by proxy executed in writing by the Member or by his duly authorized attorney-in-fact. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. Any proxy shall automatically cease upon conveyance by the Member of his Lot.
SECTION EIGHT. CONDUCT OF MEETING. At every meeting of the Members, the President, or in his absence, the Vice President designated by the Board of Directors, shall act as Chairman. The Secretary of the Association, or in his absence, any person appointed by the Chairman, shall act as Secretary at all meetings of the Members.
SECTION NINE. CUMULATIVE VOTING. Cumulative voting by the Members at any election for Directors is expressly prohibited.
ARTICLE FIVE
BOARD OF DIRECTORS
SECTION ONE. GENERAL. The affairs of the Association shall be managed by its Board of Directors. Directors need not be residents of the State of Texas or Members of the Association.
SECTION TWO. NUMBER AND TENURE. The Boa rd of Directors shall consist of five (5) Directors who shall serve for the terms specified herein and until their successors shall have been elected and qualified. The number of Directors may be increased or decreased from time to time by amendment to these Bylaws; provided, however, that no decrease in the number of Directors shall have the effect of shortening the term of any incumbent Director.
SECTION THREE. REMOVAL. Any Director may be removed from the Board of Directors, with or without cause, by the vote of the majority of the votes entitled to be cast by the Members of the Association.
SECTION FOUR. VACANCIES. Any vacancy occurring in the Board of Directors shall be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors. A Director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of Directors shall be filled by election at an annual meeting of the Members or at a special meeting of the Members called for that purpose.
SECTION FIVE. NOMINATION AND ELECTION. Nomination for election to the Board of Directors shall be made by a Nominating Committee. Nominations may also be made from the floor at the-annual meeting of Members or at a special meeting of the Members called for the purpose of electing one (1) or more Directors. The Nominating Committee shall consist of a Chairman, who shall be a member of the Board of Directors, and two (2) or more members of the Association. The Nominating Committee shall be appointed by the Board of Directors 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 of Directors 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 non-Members.
SECTION SIX. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held without notice, at such intervals, at such- places, within or without the State of Texas, and at such times as shall be fixed from time to time by resolution of the Board. Should the date of any meeting fall upon a legal holiday, then that meeting shall be held at the same time on the next business day which is not a legal holiday.
SECTION SEVEN. ANNUAL MEETINGS. Annual meetings of the Board of Directors shall be held, without other notice than these Bylaws, immediately after, and at the same place as, the annual meeting of the Members.
SECTION EIGHT. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the President or any two (2) Directors. The person or persons authorized to call special meetings of the Board may fix any place, either within or without the State of Texas, as the place for holding any special meetings of the Board called by them.
SECTION NINE. NOTICE. Notice of any special meeting of the Board of Directors shall be given at least three (3) days previously thereto by written notice delivered personally or sent by mail to each Director at his address as shown in the records of the Association. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed with postage thereon prepaid. The attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting, unless specifically required by law, the Declarations or these Bylaws.
SECTION TEN. QUORUM AND MANNER OF ACTION. A majority of the Board of Directors, present in person or represented by proxy, shall constitute a quorum loc the transaction of business at any meeting of the Board; but if less than a majority of the Directors ace present or represented at said meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice. The act of a majority of the Directors present or represented at a meeting at which a quorum is present or represented shall be the act of the Board of Directors, unless the act of a greater number is required by law, the Declarations or these Bylaws.
SECTION ELEVEN. COMPENSATION. No Director shall receive compensation for his services as Director. However, any Director may be reimbursed for his actual expenses incurred in the performance of his duties.
SECTION TWELVE. ACTION WITHOUT MEETING. Any action required to be taken at a meeting of Directors, or any action which may be taken at a meeting of Directors, may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the Directors.
SECTION THIRTEEN. PROXIES. A Director may vote in person or by proxy executed in writing by the Director. No proxy shall be valid after three (3) months from the date of its execution. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless otherwise made irrevocable by law.
ARTICLE SIX
POWERS AND DUTIES OF THE BOARD OF DIRECTORS
SECTION ONE. GENERALLY. The Board of Directors shall have the powers and duties necessary for the administration of the affairs of the Association and for the operation and maintenance of the Property in keeping with the character and quality of the area in which it is located. The Board of Directors may do all such acts and things except as by law or by these Bylaws by the Declarations may not be delegated to the Board of Directors.
SECTION TWO. POWERS. In addition to any powers granted to the Board of Directors by the Declarations, the Articles of incorporation or the other provisions of these Bylaws, the powers of the Board of Directors shall include, but shall not be limited to, the power:
(A) To establish and publish uniform rules and regulations as may be deemed by the Board to be reasonable in connection with the use, occupancy and maintenance of the Property and the Common Areas including, without limitation, rules governing the delegation of the rights of an owner in and to the Common Areas and facilities to others, and to alter, amend or modify those rules and regulations from time to time;
(B) To suspend voting rights, the right to the use of the Common Areas, impose fines and otherwise enforce the provisions of the Declarations, and seek damages and/or equitable relief or other remedial action for violations of the terms of the Declarations, the Articles of Incorporation, the Bylaws or the rules and regulations of the Association in accordance with the procedures set forth in the Declarations;
(C) To levy annual assessments and special assessments upon the owners of the lots, to charge interest on past-due assessments, and to establish and maintain Maintenance Funds, in accordance with the terms of the Declarations, and to enforce liens for payment of assessments in accordance with the procedures set forth in the Declarations;
(D) To declare the office of a member of the Board of Directors to be vacant in the event that member shall be absent from two (2) consecutive regular meetings of the Board of Directors;
(E) To employ the services of a Manager, and to delegate any of the powers, duties or functions of the Board to the Manager, and to employ those other persons as the Board shall from time to time determine to be necessary or proper to the daily management, operation and maintenance of the Property and the Common Areas, subject to the limitations on the duration of any contracts imposed by the Declarations;
(F) To enter into contracts with utility companies with respect to utility installation, consumption and services matters;
(G) To borrow funds to pay any costs of operation, secured by assignment or pledge of rights against owners for current, delinquent or future assessments, as the Board may determine in its sole discretion to be necessary and appropriate;
(H) To enter into contracts for goods and services or other Association purposes, provide services it deems proper, maintain one or more bank accounts, and generally to have all the powers necessary or incidental as may be required for prudent operation and management of the Association;
(I) To sue or to defend in any court of law on behalf of the Association;
(J) To exercise those powers which the Board deems appropriate and proper in fulfilling its obligations and responsibilities under the terms of the Declarations or these Bylaws or which, in its reasonable opinion shall be necessary or proper for the operation or protection of the Association or for the enforcement of the Declarations; and
(K) To exercise for and on behalf of the Association all powers, duties and authority vested in or delegated to the Association not otherwise reserved to the Membership by the provisions of these Bylaws, the Articles of Incorporation or the Declarations.
SECTION THREE. DUTIES. The duties of the Board of Directors shall include, but shall not be limited to, the duty
(A) To 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;
(B) To maintain or cause to be maintained detailed books of account for the business and affairs of the Association and to appoint qualified Auditors to audit the books of the Association on an annual basis;
(C) To elect, appoint and/or hire and supervise all Officers, agents and employees of the Association, and to see that their duties are properly performed;
(D) To levy and enforce the assessments and lien for assessments and other remedial measures provided in the Declarations;
(E) To issue, or to cause an appropriate Officer to issue, upon demand by any person, a certificate setting forth whether or not any assessment has been paid. A reasonable charge may be made by the Board for the issuance of these certificates. If a certificate states an assessment has been paid, such certificate shall be conclusive evidence of such payment;
(F) To pay or cause to be paid all taxes and assessments of whatever type duly assessed against all or any portion of the Common Areas or the Association which are not separately assessed to the owners;
(G) To procure and maintain adequate liability and hazard insurance on property owned by the Association;
(H) To cause Officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate;
(I) To maintain or provide for the maintenance of the Common Areas and other areas of the Property required to be maintained by the Association; and
(J) To perform all other duties required of the Association not otherwise required to be performed by the Membership by other provisions of these Bylaws, the Articles of Incorporation or the Declarations.
ARTICLE SEVEN
OFFICERS
SECTION ONE. ENUMERATION OF OFFICERS. The Officers of the Association shall be. a President and one or more Vice Presidents (the number thereof to be determined by the Board of Directors), who shall at all times be members of the Board of Directors, a Secretary, a Treasurer, and such other Officers as may be elected in accordance with the provisions of this Article. The Board of Directors may elect or appoint such other Officers, including one or more Assistant Secretaries and one or more Assistant Treasurers, as it shall deem desirable, such Officers to have the authority and perform the duties prescribed, from time to time, by the Board of Directors. Any two (2) or more offices may be held by the same person, except the offices of President and Secretary.
SECTION TWO. ELECTION AND TERM OF OFFICE. The Officers of the Association shall be elected annually by the Board of Directors at the annual meeting of the Board of Directors. If the election of Officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. New offices may be created and filled at any meeting of the Board of Directors. Each Officer shall hold office until his successor shall have been duly elected and shall have qualified.
SECTION THREE. REMOVAL. Any Officer elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Association would be served thereby.
SECTION FOUR. VACANCIES. A vacancy in any office because of death, resignation, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term.
SECTION FIVE. PRESIDENT. The President shall be the Chief Executive Officer of the Association and shall in general supervise and control all of the business and affairs of the Association. He shall preside at all meetings of the Members and of the Board of Directors. He may sign, with the Secretary or any other proper Officer of the Association authorized by the Board of Directors, or without any other Officer of the Association if so authorized by the Board, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors have authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors, these Bylaws, the Declarations or statute to some other Officer or agent of the Association. In general, the President shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.
SECTION SIX. VICE PRESIDENT. In the absence of the President or in the event of his inability or refusal to act, the Vice President designated by the Board of Directors shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President shall perform such other duties as from time to time may be assigned to him by the President or Board of Directors.
SECTION SEVEN. TREASURER. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall have charge and custody of and be responsible for all funds and securities of the Association; receive and give receipts for moneys due and payable to the Association from any source whatsoever, and deposit all such moneys in the name of the Association in such banks, trust companies, or ocher depositaries as shall be selected in accordance with these Bylaws; and in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the President or by the Board of Directors.
SECTION EIGHT. SECRETARY. The Secretary shall keep the minutes of the meetings of the Members and of the Board of Directors in one or more books provided for that purpose; give all notices in accordance with the provisions of these Bylaws, the Declarations, or as required by law; be custodian of the records and of the seal of the Association, and affix the seal of the Association to documents, when directed by the Board of Directors; keep a register of the post-office address of each Member which shall be furnished to the Secretary by each Member; and, in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors.
ARTICLE EIGHT
COMMITTEES
SECTION ONE. ARCHITECTURAL CONTROL COMMITTEE. In the event that the Members approve the continuation of the functions of any Architectural Control Committee after its scheduled termination, as provided in the Declarations, the Board of Directors shall appoint an Architectural Control Committee composed of at least three (3) persons who shall carry on the said functions in accordance with and subject to the terms and conditions of the Declarations. The Architectural Control Committee shall have the authority and perform the duties as are set forth in the Declarations.
SECTION TWO. OTHER COMMITTEES. In addition to the Nominating Committee and the Architectural Control Committee previously authorized, other committees not having and exercising the authority of the Board of Directors in the management of the Association may be designated by a resolution adopted by a majority of the Directors present or represented at a meeting at which a quorum is present or represented. Except as otherwise provided in such resolution, members of each such committee shall be Members of the Association, and the President of the Association shall appoint the members thereof. Any members thereof may be removed by the person or persons authorized to appoint such members, whenever in their judgment the best interests of the Association shall be served by such removal. Each member of a committee shall continue as such until the next annual meeting of the Members of the Association and until his successor is appointed, unless the committee shall be sooner terminated, or unless such member be removed from such committee, or unless such member shall cease to qualify as a member thereof. One member of each committee shall be appointed Chairman by the person or persons authorized to appoint the members thereof. Vacancies in the membership of any committee may be filled by appointments made in the same manner as provided in the case of the original appointments. Unless otherwise provided in the resolution of the Board of Directors designating a committee, a majority of the whole committee shall constitute a quorum and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the committee. Each committee may adopt rules for its own government not inconsistent with these Bylaws or with rules adopted by the Board of Directors.
ARTICLE NINE
CONTRACTS, CHECKS, DEPOSITS AND FUNDS
SECTION ONE. CONTRACTS AND DOCUMENTS. The Board of Directors may authorize any Officer or Officers, agent or agents of the Association, in addition to the Officers so authorized by these Bylaws, to enter into any contract or execute and deliver any instrument or other document in the name of and on behalf of the Association. Such authority may be general or confined to specific instances.
SECTION TWO. CHECKS AND DRAFTS. All checks, drafts, or orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Association shall be signed by such Officer or Officers, agent or agents of the Association and in such manner as shall from time to time be determined by resolution of the Board of Directors.
SECTION THREE. DEPOSITS. All funds of the Association shall be deposited from time to time to the credit of the Association in such banks, trust companies, or other depositaries as the Board of Directors may select.
SECTION FOUR. GIFTS. The Board of Directors may accept on behalf of the Association any contribution, gift, bequest, or devise for the general purposes or for any special purpose of the Association.
ARTICLE TEN
MISCELLANEOUS
SECTION ONE. BOOKS AND RECORDS. The Association shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its Members and Board of Directors, and shall keep at the registered or principal office a record giving the names and addresses of the Members entitled to vote. All books and records of the Association may be inspected by any Member or his agent or attorney for any proper purpose at any reasonable time during business hours.
SECTION TWO. FISCAL YEAR. The fiscal year of the Association shall be determined by the Board of Directors.
SECTION THREE. CORPORATE SEAL. The Board of Directors may adopt, use and thereafter alter a corporate seal.
SECTION FOUR. WAIVER OF NOTICE. Whenever any notice is required to be given under the provisions of the Texas Non-Profit Association Act or under the provisions of the Articles of Incorporation, the Declarations or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated in the notice, shall be deemed equivalent to the giving of such notice.
ARTICLE ELEVEN
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
The Association shall indemnify any person who is or was a Director, Officer, agent or employee of the Association and any nominee or designee of the Association who is not or was not an Officer, agent or employee of the Association but who is or was serving 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, sole proprietorship, trust, other enterprise or employee benefit plan as provided in this Article Eleven.
SECTION ONE. DEFINITIONS. For purposes of this Article Eleven
(A) “Director” shall mean any person who is or was a Director of the Association and any person who, while a Director of the Association, is or was serving at the request of the Association as a Director, Officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise.
(B) “Expenses” shall include court costs and attorney's fees.
(C) “Official Capacity' shall mean:
(i) When used with respect to a Director, the office of Director in the Association;
(ii) When used with respect to a person other than a Director, the elective or appointive office in the Association held by the Officer or the employment or agency relationship undertaken by the employee or agent on behalf of the Association; and
(iii) However, in both subsections (i) and (ii) above, Official Capacity does not include service for any other foreign or domestic corporation or any partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise;
(D) "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative of 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 TWO. PERSONS. The Association shall indemnify, to the extend provided in Section Four:
(A) Any person who is or was a Director, Officer, agent or employee of the Association; and
(B) Any person who is not or was not an Officer, agent or employee of the Association but who is or was serving at the request of the Association as Director, Officer, partner, venturer, proprietor, trustee, employee, agent or similar functionality of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise.
SECTION THREE. STANDARDS. The following standards shall govern the indemnification provided by this Article Eleven:
(A) The Association shall indemnify a person named in Section Two who was, is or is threatened to be made a named defendant or respondent in a Proceeding because the person holds or has held a position named in Section Two only if it is determined in accordance with Section Five that the person:
(i) Conducted himself in good faith;
(ii) Reasonably believed:
(a) In the case of conduct in his Official Capacity, that his conduct was in the Association's best interests; and
(b) 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 reasonable cause to believe s conduct was unlawful.
(B) Notwithstanding Subsection (A) of this Section Three, a person named in Section Two shall not be indemnified for obligations resulting from a Proceeding:
(i) In which the person is 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 person's Official Capacity; or
(ii) In which the person is found liable to the Association.
(C) The termination of a Proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent shall not of itself be determinative that the person has not met the requirements set forth in this Section Three.
SECTION FOUR. EXTENT. A person shall be indemnified under Section Three against judgments, penalties (including excise and similar taxes), fines, settlements and reasonable Expenses actually incurred by the person in connection with the Proceeding, but, if the Proceeding was brought by or on behalf of the Association, the indemnification shall be limited to reasonable Expenses actually incurred by the person in connection with the Proceeding.
SECTION FIVE. DETERMINATION THAT STANDARDS HAVE BEEN MET. A determination that the standards of Section Three have been satisfied shall be made:
(A) By a majority vote of a quorum of the Board of Directors of the Association consisting of Directors who at the time of the vote are not named defendants or respondents in the Proceeding;
(B) If such a quorum cannot be obtained, by a majority vote of a committee of the Board of Directors, designated to act in the matter by a majority vote of all Directors, consisting solely of two (2) or more Directors who at the time of the vote are not named defendants or respondents in the Proceeding;
(C) By special legal counsel selected by the Board of Directors or a committee of the Board-by vote as set forth in Subsection (A) or Subsection (B) of this Section Five, or, if such a quorum cannot be obtained and such a committee cannot be established, by a majority vote of all Directors; or
(D) By the Members in a vote that excludes the vote of Directors who are named defendants or respondents in the Proceeding.
SECTION SIX. AUTHORIZATION OF INDEMNIFICATION; DETERMINATION AS TO REASONABLENESS OF EXPENSES. The authorization of indemnification and the determination as to the reasonableness of Expenses shall 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 legal counsel, the authorization of indemnification and the determination as to the reasonableness of Expenses shall be made in the manner specified by Subsection (C) of Section Five for the selection of special legal counsel.
SECTION SEVEN. MANDATORY INDEMNIFICATION. Notwithstanding any other provision of this Article Eleven, a person named in Section Two, by reason of his holdinq a position named in Section Two, shall be indemnified by the Association to the extent and under the circumstances as follows:
(A) To the extent of reasonable Expenses incurred by him in connection with a Proceeding in which he is a named defendant or respondent, because of his position, if he has been wholly successful, on the merits or otherwise, in the defense of the Proceeding;
(B) To the extent of the indemnification ordered by the court and the Expenses incurred in securing indemnification, as awarded by the court, if, in a suit for the indemnification required by Subsection (A) of this Section Seven, a court of competent jurisdiction determines that the person is entitled to indemnification under Subsection (A) of this Section Seven and orders indemnification; and
(C) To the extent of the indemnification which may be ordered by a court of competent jurisdiction (which it determines is proper and equitable), if, upon the application of a person named in Section Two, the court determines, after giving any notice the court considers necessary, that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the person has met the requirements set forth in Subsection (A) of Section Three or has been adjudged liable, in the circumstances described in Subsection (E) of Section Three; provided, however, that the indemnification ordered by the court shall be limited to reasonable Expenses if the Proceeding is brought by or on behalf of the Association or if the person is 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 person's Official Capacity.
SECTION EIGHT. ADVANCE PAYMENT. Reasonable Expenses incurred by a person named in Section Two who was, is, or is threatened to be made a named defendant or respondent in a Proceeding may be paid or reimbursed by the Association in advance of the final disposition of the Proceeding after:
(A) The Association receives a written affirmation by the person of his good faith belief that he has met the standards of conduct necessary for indemnification under this Article Eleven and a written undertaking by or on behalf of the person to repay the amount paid or reimbursed if it is ultimately determined that the he has not met those requirements; and
(B) A determination that the facts then known to those making the determination would not preclude indemnification under this Article Eleven.
The written undertaking required by Subsection (A) of this Section Eight must be an unlimited general obligation of the person but need not be secured. It may be accepted without reference to financial ability to make repayment. Determinations and authorizations of payments under this Section Eight shall be made in the manner specified by Section Five for determining that indemnification is permissible.
SECTION NINE. REIMBURSEMENT OF OTHER EXPENSES. Notwithstanding any other provision of this Article Eleven, the Association shall pay or reimburse Expenses incurred by a person named in Section Two, by reason of his holding a position named in Section Two, in connection with his appearance as a witness or other participation in a Proceeding at a time when he is not a named defendant or respondent in the Proceeding.
SECTION TEN. INSURANCE. The Association may purchase and maintain insurance on behalf of any person who holds or has held any position named in Section Two against any liability asserted against him and incurred by him in such capacity or arising out of his status as such a person, whether or not the Association would have the power to indemnify him against that liability under this Article Eleven.
SECTION ELEVEN. REPORTS. Any indemnification of or advance of Expenses to a person in accordance with this Article Eleven shall be reported in writing to the Members with or before the notice or Waiver of notice of the next Members' meeting and, in any case, within the twelve (12)-month period immediately following the' date of the indemnification or advance.
SECTION TWELVE. NONEXCLUSIVE. The indemnification provided in this Article Eleven shall not be exclusive of any other rights to which a person may be entitled by law, bylaw, agreement, the Declarations, vote of Members or disinterested Directors, or otherwise, to the extent permitted by law.
ARTICLE TWELVE
SURETY BONDS
When the Board of Directors so directs, Officers and agents of the Association shall be bonded for the faithful performance of their duties and for the restoration to the Association of, in case of their death, resignation, retirement, disqualification or removal from office, all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Association, in the amounts and by the surety companies as the Board of Directors may determine. The premiums on the bonds shall be paid by the Association and the bonds so furnished shall be in the custody of the Secretary.
ARTICLE THIRTEEN
AMENDMENTS; INTERPRETATION
SECTION ONE. AMENDMENTS. Subject to the delegation of such power to the Board of Directors by the Members, the power to alter, amend or repeal these Bylaws, or to adopt new Bylaws, shall be vested in the Members, who may exercise such power at any annual meeting of the Members, or at any special meeting of the Members called for that purpose, at which a quorum is present or represented upon the approval of a majority of the votes present or represented at the meeting.
SECTION TWO. CONFLICTS. In the case of any conflict between the Articles of Incorporation and these Bylaws, the Articles of Incorporation shall control. In the case of any conflict between the Declarations and these Bylaws, the Declarations shall control.
SECTION THREE. SEVERABILITY. If any provision herein contained shall be invalid, which invalidity shall not be presumed until the same is determined by the judgment or order of a court of competent jurisdiction, such invalidity shall in no way effect any of the other provisions of these Bylaws, each of which shall remain in full force and effect.
ARTICLE FOURTEEN
NON-PROFIT CORPORATION
The Association is a Non-Profit Corporation, which has been organized and shall be operated solely for the purposes specified in its Articles of Incorporation, and no part of its property or earnings shall ever inure to the benefit of any Member, Director, Officer or employee of the Association, or of any individual having a personal or private interest in the activities of the Association, nor shall any such Member, Director, Officer, employee or individual receive or be lawfully entitled to receive any profit from the operations of the Association except a reasonable allowance for salaries or other compensation for personal services actually rendered as an agent or employee of the Association in carrying out one or more of its stated purposes.
The foregoing set of Bylaws was unanimously adopted as the Bylaws of Heatherwilde Homeowners' Association by the Board of Directors as of April 14, 1986.
(Amended at the annual meeting of the Association on April 1, 2002).