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Bylaws - Article 3 - Board of Directors

===ARTICLE 3 BOARD OF DIRECTORS===

'''3.1 Number/Composition/Qualifications.''' The affairs of this Association shall be managed by a board comprised of three (3) directors. After Class B Membership expires or terminates the number of director positions on the Board may be changed at any time by an amendment to these Bylaws unilaterally adopted by the Board of Directors as provided in Section 1.7 above, with such amendment to be effective at the next meeting of the Association membership at which an election of directors is to he held. Directors shall be Lot Owners, or authorized representatives of Lot Owners (including Declarant), if a Lot Owner is other than a natural person. No member of the Association whose right to vote has been suspended pursuant to Section 2.1 1 above may stand for election to the Board by the Membership and such person shall automatically be deemed disqualified. No director serving on the Board shall he related by blood, adoption, or marriage to, or share ownership of or any interest in a Unit with, any other director serving on the Board at that same time and in that event, the most recently elected director in such a relationship shall be deemed disqualified from serving on the Board.

'''3.2 Term of Office.''' While Class B Membership exists, all directors shall be elected for a term of one (1) year or until their successors are elected and qualified. After Class B Membership expires or is terminated, the directors elected at a meeting of the Members shall serve staggered terms as follows:
If a three person Board: The first director shall serve a three-year term, the next director elected shall serve a two-year term, and the remaining director shall serve a one-year term. 

__If a five person Board:__ The first two directors shall serve a three-year term, the next two directors shall serve a two-year term, and the remaining director shall serve a one-year term. Thereafter, all directors shall be elected to three (3) year terms. All elections of directors shall be for such terms as will preserve the staggering of terms as provided in this Section 3.2. To determine which director shall serve terms of three years, two years or one year, respectively, the director(s) obtaining the most votes at the election at which they were elected shall serve the longest terms until all such terms are filled.

'''3.3 Removal After Class B Membership expires or terminates.''' Any one or more of the members of the Board of Directors may be removed from the Board of Directors, with or without cause, by a majority vote of the Members entitled to vote and voting on the matter in person or by absentee ballot at a special meeting called pursuant to the procedures specified in A.R.S. $33-1813(A), and a successor shall then and there be elected to fill the vacancy thereby created. Any petition to call a special meeting of the Members for purposes of removing a designated member of the Board of Directors may not be submitted more than once during the term of office for that particular Board member.

'''3.4 Compensation/Conflicts of Interest.''' No director shall receive compensation for any service he may render to the Association which is within his duties as a director. However, any director may be reimbursed for his actual expenses incurred in the performance of his duties. A director may receive compensation for services rendered to the Association which are outside his duties as a director if the payment of such compensation is approved by all of the other directors. Any director with a "conflict of interest" as determined by the most strict interpretation of the director "conflict of interest" provisions of the Arizona Nonprofit Corporation Act (A.R.S. $10-3860 et seq.) and Arizona's Planned Communities statutes (A.R.S. $33-181 l), as amended from time to time, may not vote on any proposal to provide director compensation to himself or any other director and shall recuse himself from participating in any discussions regarding a "conflicting interest" transaction.

'''3.5 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 consent of all the directors. Any such written consent shall be filed with the minutes of the proceedings of the Board of Directors.

'''3.6 Vacancies.''' Except with respect to vacancies caused by the removal of a member of the Board of Directors by a vote of the Lot Owners as set forth in Section 3.3 of these Bylaws and except if the Board consists of one member who is a representative of Declarant, all vacancies in the Board of Directors shall be filled by a vote of a majority of the remaining directors though less than a quorum or by a sole remaining director. Any person so elected shall serve the unexpired portion of the prior director's term. Any newly created directorship shall be deemed a vacancy. Any person elected to fill such a vacancy shall serve until the next annual meeting of the members. In the case of the resignation of a Board member at the time the Board consists of a single member who is a representative of Declarant, the Declarant shall have the right to appoint another Board member to fill the vacancy until the next annual meeting of the Members or until the Declarant elects to call a special meeting of the Members.

'''3.7 Regular Meetings.''' Regular meetings of the Board of Directors may be held at such time and place within the State of Arizona as shall be determined from time to time by the Board of Directors. Such meetings shall be held at least once during each fiscal year.

'''3.8 Special Meetings.''' Special meetings of the Board of Directors may be called by the President on three (3) business days' notice to each director, given in writing, by hand delivery, mail or telegraph, which notice shall state the time, place and purpose of the meeting. Special meetings of the Board of Directors shall be called by the President or Secretary in like manner and on like notice on the written request of at least two (2) directors. Special meetings of the Board shall be held within the State of Arizona.

'''3.9 Quorum/Proxy Voting.''' A majority of the directors shall constitute a quorum for the transaction of business. Every act 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. A director may vote in person or by proxy in the manner provided in the Arizona Nonprofit Corporation Act.

'''3.10 Waiver of Notice/Attendance/Notice to Members.''' Before any meeting of the Board, any director may, in writing, waive notice of such meeting, and such waiver shall be deemed equivalent to the giving of such notice to that director. Attendance by a director at any meeting of the Board shall be a waiver of notice by him of the time and place of the meeting unless such attendance is for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened Directors may attend and shall be deemed "present" at a regular or special meeting of the Board of Directors by means of a conference telephone, video conference, fiber optics, cable, computer or similar communications equipment by means of which all persons participating in the meeting can hear each other. After Class B Membership expires or terminates, notice of the time and place of Board meetings may be given to Members by newsletter, conspicuous posting on the Common Elements, or by any other reasonable means as determined by the Board. While Class B Membership exists, no notice of Board meetings need be given to Lot Owners; provided, however, that information regarding the time and place of the next scheduled Board meeting shall be provided to any Member who requests such information in good faith.

'''3.11 Open Meetings.''' All meetings of the Board shall be held in compliance with the provisions of A.R.S. $33-1804 that allow for any Member or his designated representative to attend and speak at such Board meeting before any deliberative action is taken on a matter; provided, further, that only one person representing a Lot may speak on any issue; and the Board may establish a reasonable time limit for persons speaking at the meeting and may establish a reasonable limit on the number of persons speaking on each side of an issue. Notwithstanding the above, as provided in A.R.S. $33-1805, the person presiding over the Board meeting may adjourn any such Board meeting and reconvene in executive session, excluding Members, to discuss: (i) employment or personnel matters for employees of the Association; (ii) legal advice from an attorney retained by the Board or the Association; (iii) pending, threatened or contemplated litigation; (iv) pending or contemplated matters relating to enforcement of the Project Documents.

'''3.12 Powers and Duties.'''

(A) The Board of Directors shall have all of the powers and duties necessary for the administration of the affairs of the Association and may do all such acts and things as are not by required by the Project Documents to be exercised or done by the Members. In addition to the duties imposed by these Bylaws or by any resolution of the Members that may hereafter be adopted, the Board of Directors shall have the following powers and duties: 

(i) Open bank accounts on behalf of the Association and designate the signatories thereon; 

(ii) Make, or contract for the making, of repairs, additions to, improvements to or alterations of the Common Area and other areas of Association responsibility, after damage or destruction by fire or other casualty, or as a result of condemnation or eminent domain proceedings or otherwise in accordance with the Declaration; 

(iii) In the exercise of its discretion, enforce by legal means the provisions of the Project Documents; 

(iv) Designate, hire and dismiss the personnel necessary for the maintenance, operation, repair, and replacement of the Property, and where appropriate, provide for the compensation of such personnel and for the purchase of equipment, supplies and material to be used by such personnel in the performance of their duties; 

(v) Borrow money on behalf of the Association when required in connection with any one instance relating to the operation, upkeep and maintenance of the Common Areas or other areas of Association responsibility; provided, however, the consent of Members having at least two-thirds (213) of the total votes in the Association shall be obtained if the Association is to borrow in excess of $100,000 or to mortgage or encumber the Common Areas; 

(vi) Prepare and adopt an annual budget for the Association prior to the commencement of each fiscal year and obtain an annual financial audit, review or compilation of the Association's financial records as determined in the best judgment of the Board to be appropriate for an Association of this size and financial condition; with such audit, review or compilation to be performed by a qualified Person such as a licensed and insured independent accountant pursuant to A.R.S. 533-1810; 

(vii) Adopt and publish Association Rules governing matters concerning the Property, including the establishment of monetary penalties for any violation of the Project Documents; 

(viii) In accordance with these Bylaws, suspend a Lot Owner's voting rights and right to use any Common Area facilities (other than for ingress and egress to the Owner's Lot); 

(ix) Exercise for the Association all powers, duties and authority vested in or delegated to the Association and not reserved to the membership by other provisions of the Project Documents; 

(x) 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 meetings of the Board of Directors; 

(xi) Declare the office of a member of the Board to be vacant in the event such Member's right to vote as a Member of the Association has been suspended pursuant to Section 2.1 1 above for a period not less than sixty (60) consecutive days, or, regardless of whether such Member's right to vote has been suspended, in the event such Member is delinquent in the payment of any Annual Assessment or Special Assessment for a period of not less than sixty (60) consecutive days; 

(xii) 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 any Member entitled to vote; 

(xiii) Supervise all officers, agents and employees of the Association and see that their duties are properly performed; 

(xiv) Levy Assessments in accordance with the Declaration and take all necessary action to collect such Assessments; 

(xv) As required by the Declaration, issue, or cause an appropriate officer to issue upon demand to any person, a certificate setting forth whether or not any Assessment has been paid and any information or statement required to be issued pursuant to A.R.S. $33-1806; 

(xvi) Procure and maintain adequate property, liability and other insurance as required by the Declaration; (xvii) Cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate; 

(xviii) Prepare and file annual tax returns with the federal government and the State of Arizona and to make such elections as may be necessary to reduce or eliminate the tax liability of the Association, including an election to be taxed under Section 528 of the Internal Revenue Code or any successor statute conferring income tax benefits on homeowners associations; and 

(xix) Cause a current and updated Association Contact Notice to be Recorded for the Association pursuant to A.R.S. $33-1807(J) unless that duty has been delegated to a Managing Agent pursuant to Section 3.1 1(B) below; 

(xx) Subject to the limitations of Articles 9 and 10 of the Declaration, institute, defend, and intervene in, any litigation or administrative proceedings in its own name or on behalf of the Lot Owners.

(B) Subject to the provisions of Section 5.13 of the Declaration, the Board of Directors may employ for the Property a "Managing Agent" at a compensation established by the Board of Directors. The Managing Agent shall perform such duties and services as the Board of Directors shall authorize, including, but not limited to, all of the duties listed in the Project Documents, except for such duties and services that under the Project Documents may not be delegated to the Managing Agent. The Managing Agent shall cause the Association to be in compliance with the Recorded Association Contact Notice requirements of A.R.S. $33-1807(J). The Board of Directors may delegate to the Managing Agent all of the powers granted to the Board of Directors or the officers of the Association by the Project Documents other than the following powers: 

(i)	To adopt the annual budget, any amendment thereto, or to assess any Common Expenses: 

(ii) To adopt, repeal or amend Association Rules; 

(iii) To designate signatories on Association bank accounts; 

(iv) To borrow money on behalf of the Association; 

(v) To acquire and mortgage Lots or other real property.
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Bylaws - Article 3 - Board of Directors
