HomeMy WebLinkAbout024446 RES - 05/08/2001RESOLUTION
APPROVING THE ARTICLES OF INCORPORATION AND BY-LAWS OF
THE SOUTH TEXAS AGGREGATION PROJECT, INC., AND
MEMBERSHIP 1N THE CORPORATION BY THE CITY OF CORPUS
CHRISTI
WHEREAS, the City of Corpus Christi desires to explore the benefits of electric aggregation
under Senate Bill 7, 1999 Legislature; and
WHEREAS, the City Council of the City of Corpus Christi in Resolution 024422 (April 10,
2001) approved the Articles of Incorporation of the South Texas Electric Project, Inc., now called
the South Texas Aggregation Project, Inc., and wishes to approve the articles for the renamed
corporation; and
WHEREAS, By-laws have been developed for the South Texas Aggregation Project, Inc.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI, TEXAS, THAT:
The Articles of Incorporation and the By-laws of the South Texas Aggregation Project, Inc.,
a substantial copy of which are attached hereto and incorporated herein as Exhibit A, and Corpus
Christi's membership in the South Texas Electric Project, Inc., in accordance xvith the Articles and
By-laws, are hereby approved.
ATTEST:
Arman~
City Secretary
APPROVED THIS THE ~ DAY OF
James R. Bray, Jr., City Attorney
Mayor, The City of Corpus Christi
,2001:
1JRB0504.003
Corpus Christi, Texas
~day of ~ 2001
The above resolution was ~y the following vote:
Samuel L. Neal, Jr.
Brent Chesney
Javier D. Colmenero
Henry Garrett
Bill Kelly
Rex A. Kirmison
John Longoria
Jesse Noyola
Mark Scott
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IJRB0504.003
ARTICLES OF INCORPORATION
OF
SOUTH TEXAS AGGREGATION PROJECT, INC.
ARTICLE ONE
The corporation will conduct business under the names South Texas Aggregation Project, Inc.
and STAP.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The corporation is a non-profit political subdivision corporation under Chapter 303, Texas Local
Government Code, entitled "Energy Aggregation Measures for Local Governments," as
amended.
ARTICLE FOUR
The corporation has been organized for the purposes of purchasing electricity, aiding or acting
on behalf of its members with respect to their own electricity use for their respective public
facilities and that of their citizens, negotiating on behalf of its members for the purchase of
electricity, making contracts for the purchase of electricity, and taking any other actions
necessary to purchase electricity for use in the public facilities of the political subdivision or
subdivisions represented by the corporation, and for all other purposes as may be permitted by
law for political subdivision corporations.
ARTICLE FIVE
The street address for the corporation's initial registered office is Lloyd, Gosselink, Blevins,
Rochelle, Baldwin & Townsend, P.C., 111 Congress Avenue, Suite 1800, Austin, Texas 78701,
and the registered agent for the corporation at this address is Geoffrey M. Gay.
ARTICLE SIX
The corporation shall have members. Membership shall be determined under the terms and
conditions provided in the corporation's by-laws.
ARTICLE SEVEN
The direction and management of the affairs of the corporation and the control and disposition of
its properties and funds shall be vested in a Board of Directors composed of such number of
persons, but not less than three, as may be fixed by the by-laws. Until changed by the by-laws,
the original number of directors shall be nine (9). The names and addresses of the persons who
are to serve as Directors of the corporation until their successors are duly elected and qualified
are~
1. James Darling 4.
City of McAllen
P.O. Box 220
McAllen, Texas 78505-0220
Larry Dovalina
City of Laredo
P.O. Box 579
Laredo, Texas 78042-0579
2. Mark McDaniel 5.
City of Corpus Christi
P.O. Box 9277
Corpus Christi, Texas 78469
Hector M. Hinojosa
City of Kingsville
P.O. Box 1458
Kingsville, Texas 78364
3. Denny Arnold 6.
City of Victoria
P.O. Box 1758
Victoria, Texas 77904
William O. Lamb
City of Pleasanton
P.O. Box 209
Pleasanton, Texas 78064
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Sulmy Philip
City of La Feria
115 E. Commemial Avenue
La Feria, Texas 78559
James D. Roberts
City of Charlotte
P.O. Box 216
Charlotte, Texas 78011-0216
Richard Browning
City ofEdna
126WestMain
Edna, Texas 77957
ARTICLE EIGHT
The by-laws of the corporation shall be adopted by the Board of Directors and shall be approved
by the governing body of each political subdivision for which the corporation is created. The
governing bodies of at least three political subdivisions have approved membership in South
Texas Aggregation Project, Inc. by resolution, ordinance or order.
ARTICLE NINE
The names and addresses of the incorporators are:
1. James Darling 3.
City of McAllen
P.O. Box 220
McAllen, Texas 78505-0220
Jimmy Bray
City of Corpus Christi
P.O. Box 9277
Corpus Christi, Texas 78469
Denny Arnold
City of Victoria
P.O. Box 1758
Victoria, Texas 77904
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The undersigned incorporator, who is over the age of eighteen (18) and is a citizen of the State of
Texas, signs these Articles of Incorporation subject to the penalty imposed by Article 9.03A,
Texas Non-Profit Corporation Act.
James Darling
THE STATE OF TEXAS §
COUNTY OF §
BEFORE ME, a notary public, on this day personally appeared known to me to
be the person whose name is subscribed to the foregoing document and, being by me first duly
sworn, declared that the statements therein contained are true and correct.
Given under my hand and seal of office this __ day of
2001.
Notary Public, State of Texas
My Commission Expires:
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The undersigned incorporator, who is over the age of eighteen (18) and is a citizen of the State of
Texas, signs these Articles of Incorporation subject to the penalty imposed by Article 9.03A,
Texas Non-Profit Corporation Act.
Jimmy Bray
THE STATE OF TEXAS §
COUNTY OF §
BEFORE ME, a notary public, on this day personally appeared known to
me to be the person whose name is subscribed to the foregoing document and, being by me first
duly sworn, declared that the statements therein contained are tree and correct.
Given under my hand and seal of office this __ day of
2001.
Notary Public, State of Texas
My Commission Expires:
5
The undersigned incorporator, who is over the age of eighteen (18) and is a citizen of the State of
Texas, signs these Articles of Incorporation subject to the penalty imposed by Article 9.03A,
Texas Non-Profit Corporation Act.
Denny Arnold
THE STATE OF TEXAS §
COUNTY OF §
BEFORE ME, a notary public, on this day personally appeared known to
me to be the person whose name is subscribed to the foregoing document and, being by me first duly
sworn, declared that the statements therein contained are tree and correct.
Given under my hand and seal of office this __ day of
2001.
Notary Public, State of Texas
My Commission Expires:
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BY-LAWS
OF
SOUTH TEXAS AGGREGATION PROJECT, INC.
ARTICLE I. Name and Purpose
1.1
Name. This corporation shall be known as South Texas Aggregation Project, Inc. It may
also be known as STAP.
1.2
Purpose. The corporation has been organized for any and all lawful business for which
corporations may be organized under the Texas Non Profit Corporations Act, for the
purposes of purchasing electricity, aiding or acting on behalf of its Members with respect
to their own electricity use for their respective public facilities and that of their citizens,
negotiating on behalf of its Members for the purchase of electricity, making contracts for
the purchase of electricity, and taking any other actions necessary to purchase electricity
for use in the public facilities of the political subdivision or subdivisions represented by
the corporation, for the purposes of acting as a local cooperative organization to purchase
goods and services for its members, and for all other purposes as may be permitted by
law for political subdivision corporations.
ARTICLE II. Board of Directors
2.1
Composition. There shall be a Chair and a Vice Chair on the board and such other
directors as required for the performance of duties.
2.2
Powers. The affairs of the Corporation shall be managed by the Board of Directors,
which may exercise all such powers of the corporation and do all such lawful acts and
things as are not prohibited by statute, by the Articles of Incorporation of the
Corporation, or by these by-laws. By illustration and without limitation, included among
the powers of the Board of Directors is the power to negotiate the purchase of electricity,
aid or act on behalf of the political subdivisions for which the corporation is created,
make contracts for the purchase of electricity, purchase electricity, and take any other
action necessary to purchase electricity for use in the public facilities or by the citizens of
the political subdivision or subdivisions represented by the Corporation; provided,
however, no Member shall be obligated under any such contract unless the Member
approves such contract.
2.3
Number. Tenure and Oualification. (a) Directors shall be elected to the Board at annual
meetings of the Members as hereinafter described from a slate presented by the Board
and from nominations by Members. Nominations for membership on the Board made by
Members shall not be considered at any meeting of the Members unless such nomination
has been presented in writing, signed by the Member or Members proposing the same,
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and filed with the Secretary of the Corporation at least twenty (20) days prior to the date
of the meeting at which said nominations are to be considered. From the nominations so
made and no others, and from the slate presented by the Board, Directors shall be elected,
and the person or persons receiving the highest number of votes shall be declared elected.
If the election of Directors shall not be held on the day designated herein for any annual
meeting of the Members, or at any adjournment thereof, the Board shall cause the
election to be held at a special meeting of the Members, which shall be convened as soon
thereafter as is possible.
(b) The initial Board of Directors shall consist of nine (9) directors. An alternate shall be
selected for each director. At the first annual meeting of the Corporation, to be held
during June, 2001, the Members shall elect nine (9) Directors (Places 1, 2, 3, 4, 5, 6, 7, 8,
and 9) from the participating Corporation Membership, which Directors will serve from
their election until their successors are duly elected and shall qualify. The number of
Directors may be increased or decreased by resolution of the Board, but no decrease shall
have the effect of shortening the term of an incumbent Director. The first elected
directors shall be selected based on the following:
· each participating city with a population above 50,000 may select one board
member and one alternate, who will serve at the will of the appointing
authority;
· all participating cities with a population greater than 25,000 but not greater
than 50,000 will elect two board members and two alternates;
· all participating cities with a population less than 25,000 will elect two board
members and two alternates;
any seat that remains open because of the failure of a city or group of cities to
designate it authorized board member(s) will be filled by a vote of the
members at large.
(c) The first elected directors shall serve until December 31, 2003. The subsequent
Board Member Selection Process will be determined by the first elected Board based
upon aggregation project load of participants and must be established before December
31, 2003. The directors elected as a result of using the subsequent Board Member
Selection Process shall serve two (2) year staggered terms with directors serving in place
numbers that are odd elected in odd numbered years and those serving in place numbers
that are even elected in even numbered years, except that the initial even place numbered
directors will stand for re-election after one year.
(d) Except for the initial Board, each Director of the Board must be an official or full-
time salaried employee of a Member. Any Director who is an official or full-time
salaried employee of an entity that ceases to be a Member participant of the Corporation,
and any Director who ceases to be an official or full-time salaried employee of a
Member, shall be automatically disqualified to serve as a Director, and the position shall
become vacant, such vacancy to be filled in the manner provided in Section 2.5 of this
Article II.
2.4
Removal. Directors may be removed from office, with or without cause, by an
affirmative vote of the majority of the Members then entitled to vote at an election of the
Directors at an annual meeting of the Members or a meeting called expressly for that
purpose; provided, no action to remove any Director shall be sufficient unless written
notice that such action is to be considered shall have been given to all Members by the
Chair or Secretary at least sixty (60) days before the meeting.
2.5
Vacancies. Any Director may resign at any time by giving written notice to the Secretary
of the Corporation. Such resignation shall take effect at the time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. Any vacancy occurring in the Board may be filled by the
affirmative vote of a majority of the remaining Directors though less than a quorum. A
Director elected to fill a vacancy shall be elected for the unexpired term of his or her
predecessor in office. Any place on the Board to be filled by reason of an increase in the
number of Directors shall be filled by the affirmative vote of a majority of the Directors
then in office. A Director chosen to fill a position resulting from an increase in the
number of Directors shall hold office until the next annual meeting of Members, at which
time a successor shall be elected to serve until the expiration date set for his or her
designated place.
2.6
Regular Meetings. A regular meeting of the Board shall be held annually in conjunction
with the annual meeting of Members, for the purpose of organization, election of officers,
and consideration of any other business that properly may come before the Board. The
Board may provide, by resolution, the time and place for the holding of additional regular
meetings.
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2.7
Special Meetings. Special meetings of the Board may be called by the Chair of the Board
or at the written request of any two Directors. The person or persons authorized to call
special meetings of the Board may fix the place for holding any special meeting of the
Board so called. If no place is fixed, the place of meeting shall be the principal office of
the Corporation in Texas.
2.8
Voting; Quorums. A majority of the number of Directors described in by Section 2.3
shall constitute a quorum for the transaction of business. The act of the majority of the
Directors present at a meeting at which a quorum is present shall be the act of the Board,
provided, however, the Board may, by resolution, delegate any of its powers in whole or
in part, temporarily or permanently, to any Director or committee of Directors then
acting; any such delegation shall be by written instrument filed in the records of the
Corporation.
2.9
Notice of Meetings. Notice for board meetings shall be provided to all Directors and
Members either by mail not less than seventy-two (72) hours before the date of the
meeting, by telephone, telegram, or telecopy on twenty-four (24) hours notice or on such
shorter notice as the person or persons calling such meeting may deem necessary or
appropriate in the circumstances.
2.10
Compensation. Duly elected or appointed Directors shall serve without compensation,
but shall be reimbursed for reasonable costs of travel, meals, lodging and incidental
expenses while on official business for the Corporation.
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2.11
Reliance on Professionals and Experts. Directors are authorized to rely on information,
opinions, reports and statements, including financial statements and other financial data,
prepared or presented by others to the fullest extent permitted by applicable law.
2.12
Executive Committee. The Chair of the Board may appoint an Executive Committee of
the Board to handle the affairs of the Board when regular or special Board meetings are
not in session, with such functions as may be designated to the Executive Committee by
the Board through a resolution properly adopted. The Executive Committee may consist
of the Chair, Vice-Chair, and one or two other Directors as designated by the Chair.
2.13 Other Committees. The Chair is authorized to form any committees as needed in order to
assist the Board with its information gathering and deliberations.
2.14 Specific Powers and Duties. The Board, in addition to other powers and duties herein
conferred, imposed, and authorized by law, shall have the following powers and duties:
(a) It shall carry out all of the duties necessary for the proper operation and
administration of the Corporation on behalf of the Members and to that end shall have all
of the powers necessary and desirable for the effective administration of the affairs of the
Corporation.
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(b) It shall be authorized to contract with any qualified individual, firm or
organization to perform any of the functions necessary for the effective administration or
operation of the Corporation, or to provide for the fiscal protection of the Corporation or
in keeping with its fiduciary responsibilities as Directors.
(c) It may hire attorneys, accountants, consultants, or such other professional persons
that it may deem necessary aid to or for the Corporation. Those persons shall be paid as
provided in the contract for hire as executed by the Chair of the Board.
(d) It shall have the general power to make and enter into all contracts, leases and
agreements necessary or convenient to carry out any of the powers granted under these
by-laws or by any other law.
(e) It shall provide for an annual audit of the books of the Corporation to be supplied
to the Membership within 120 days following the close of each Corporation Year, or as
soon thereafter as practicable.
(f) It shall have the authority to terminate membership of any Member that fails to
abide by the requirements of the Board concerning payment of annual dues or
aggregation fees as provided in Article V, cooperate with any of the agents hired to
provide administrative services on behalf of the Board, or takes any other action that may
be detrimental to the Corporation. If dues or fees remain delinquent for ninety (90) days
after the Board sends an invoice or notice of assessment, membership shall be terminated.
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(g)
It may collect interest on all past due accounts not to exceed the amounts allowed
under applicable law.
ARTICLE IlL Officers
3.1
Generally. The Board shall elect from among their number a Chair of the Board and a
Vice-Chair of the Board. The Board shall designate a Secretary, who may or may not be
a Director, to keep the minutes and the records of the Board. The Board may appoint
such other officers, assistant officers, committees and agents, including a treasurer,
assistant secretaries and assistant treasurers, as they may consider necessary, who shall be
chosen in such mariner and hold their offices for such terms and have such authority and
duties as may from time to time be determined by the Board. No person may
simultaneously hold two offices. In all cases where the duties of any officer, agent or
employee are not prescribed by the by-laws or by the Board, such officer, agent or
employee shall follow the orders and instructions of the Chair of the Board.
3.2
Election; Tenure. The Chair of the Board, the Vice-Chair, and the Secretary shall be
elected at the organizational meeting of the Board. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as a meeting may be
conveniently convened. Other officers may be chosen by the Directors at such meeting
or at any other time. Each officer shall hold office until the first of the following occur:
until his or her successor shall have been duly elected and shall have qualified; or until
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his or her death; or until he or she shall resign; or until he or she shall be disqualified
pursuant to these by-laws; or until he or she shall have been removed in the manner
hereinafter provided.
3.3
Removal. Any officer or agent may be removed by majority vote of the entire Board for
cause or without cause whenever in its judgment the best interests of the Corporation will
be served thereby. Neither notice nor a heating need be given to any officer or agent
proposed to be so removed. Election or appointment of an officer or agent shall not in
itself create contract rights.
3.4
Vacancies. A vacancy in any office, however occurring, may be filled by the Board for
the unexpired portion of the term.
3.5
Powers and Duties of the Chair of the Board. Subject to the control of the Board and the
Executive Committee, the Chair of the Board shall call meetings and preside over all
meetings of the Members and of the Board, appear before governmental bodies as the
designated spokesperson of the Corporation, execute contracts and financial instruments
as may be specifically approved by the Board and shall have such other powers as may be
reasonably incident to such responsibilities; and shall have such other powers and duties
as may be designated in accordance with these by-laws and as from time to time may be
assigned to him or her by the Board.
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3.6
Vice-Chair. The Vice-Chair shall assist the Chair and shall perform such duties as may
be assigned to him or her by the Chair or by the Board. In the absence of the Chair, the
Vice-Chair shall have the powers and perform the duties of the Chair. In addition, the
Vice-Chair shall have such other powers and duties as from time to time may be assigned
to him or her by the Chair or by the Board.
3.7
Secretary. The Secretary shall: (a) keep the minutes of the proceedings of the Members,
the Executive Committee and the Board; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be custodian
of the records and of the seal of the Corporation and affix the seal to all documents when
authorized by the Board; (d) keep at the Corporation's principal place of business within
the State of Texas a record containing the names and addresses of all Members; and
(e) in general, perform all duties incident to the office of Secretary and such other duties
as from time to tie may be assigned to him or her by the Chair or by the Board.
3.8
Executive Director; Other Officers. The Board may select and appoint an Executive
Director and any other employees to serve at the pleasure of the Board. At the discretion
of the Board, the Executive Director may be an independent contractor or an employee of
the corporation. The Executive Director and any other such employees duly selected and
appointed employees shall receive such compensation and other benefits as the Board
may determine, and, additionally shall be entitled to reimbursement of expenses for
attendance at official meetings of and official functions for the Corporation.
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ARTICLE IV. Membership
4.1
Eligibility. Any political subdivision that approves the Articles of Incorporation and
these by-laws by ordinance, resolution, or order adopted by the governing body of the
political subdivision and that purchases electricity through the Corporation, for one or
more of their respective public facilities is eligible for membership in South Texas
Aggregation Project, Inc., subject to the right of the Board to determine eligibility and
conditions of membership, and subject further to the authority of the Board to terminate
membership of any Member as provided herein, or in any agreement made between the
Member and the Corporation.
4.2
Representation. Each Member shall appoint, by formal action by its governing body, a
representative to act for it at the meetings of Members and shall give to the chair of the
Board of Directors in writing the name of the person thus appointed. Only appointed
representatives may act on behalf of Members in the conduct of business of the
corporation. If at any time a Member withdraws from participation or otherwise has its
membership status terminated, that Member shall no longer have a representative in the
Membership, on the Board, or on any committee of the Corporation. Each
Representative will serve until a successor is appointed.
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4.3
Withdrawal. Any Member may withdraw from participation in the activities of the
Corporation at any time upon thirty (30) days notice, whereupon it shall cease to be a
Member, shall cease to be entitled or obligated to participate in the activities of all
committees and subcommittees of the Board of Directors and shall have no further
obligations as a Member; provided, however, that if such notice is given more than thirty
(30) days after such Member's receipt of its statement of annual dues, fees and expenses
for a fiscal year, the Member shall be obligated to pay for the full fiscal year subject to
appropriation, within which such termination is effective. Withdrawal of membership
does not alter contractual power arrangements to which the Member may have previously
obligated itself.
4.4
Voting Rights. Voting rights are limited to Members. Votes will be based upon the
proportionate aggregation electric load of the Members initially included in bid proposals
or thereafter determined by load data from the most recent calendar year for which such
data is available.
4.5
Annual Meetings. The annual meeting of the Members shall be held at a time and on a
date selected by the Chair of the Board, with written notice to each Member, for the
purpose of electing Directors, receiving the annual report from the Board, and for the
transaction of such other business as may come before the meeting. If the day fixed for
the annual meeting shall be a legal holiday in the State of Texas, such meeting shall be
held on the next succeeding business day.
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4.6
Special Meetings. Special meetings of the Members, for any purpose, unless otherwise
prescribed by statute, may be called by the Board, and shall be called by the Chair of the
Board or by the Secretary at the request of not less than one-tenth (1/10) of all of the
outstanding Members of the Corporation.
4.7
Place of Meeting. The Board may designate the place for any annual meeting or for any
special meeting called by the Board. If no designation is made, or if a special meeting
shall be called otherwise than by the Board, the place of meeting shall be the principal
office of the Corporation in Texas.
4.8
Notice of Meeting: Voting by Ballots Forwarded by Mail. (a) Written or printed notice
stating the place, day and hour of the meeting, and, in case of a special meeting, the
purposes for which the meeting is called, shall be delivered, not less than ten (10) nor
more than fifty (50) days before the date of the meeting (either personally or by mail), by
or at the direction of the Chair of the Board or the Secretary to each Member entitled to
vote at such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid. In order
that Members may vote by mail, each notice of meeting shall include a ballot containing
each issue to be voted at that meeting and instructions as to the date by which such ballot
must be postmarked in order for the vote to be counted.
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(b) Whenever notice is required in this Section 4.8 of Article IV, a waiver thereof in
writing signed by the Member, whether before, at, or after the time stated therein, shall be
equivalent to such notice. By attending a meeting, a Member waives objections to lack
of notice or defective notice of such meeting unless the Member, at the beginning of the
meeting, objects to the holding of the meeting or the transacting of business at the
meeting. Further, a Member waives objection to consideration at such meeting of a
particular matter not within the purpose or purposes described in the meeting notice
unless the Member objects to considering the matter when it is presented.
4.9
Quorum. A quorum for the election of Directors, and conducting normal business at all
meetings of the Members shall be twenty-five percent of the total aggregated load and ten
percent of the Members present in person or voting by mail.
4.10
Informal Action by Members. Any action required to be taken at a meeting of the
Members, or any other action which may be taken at a meeting of the Members, may be
taken without a meeting if a consent or consents in writing, setting forth the action so
taken, shall be signed by all of the Members with respect to the subject matter thereofi
Such consent or consents shall have the same force and effect as a unanimous vote of the
Members.
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ARTICLE V. Funding
5.1
Generally. Funding of the corporation shall be by member political subdivisions through
the assessment of dues or through an aggregation fee charged per kilowatt-hour, or a
combination of both as determined appropriate by the Board of Directors.
5.2
Initial Membership Fee. The initial membership fee shall be 10 cents per capita based on
2000 federal census. Such fee shall not exceed $15,000, however. The initial fee will be
credited against future administrative fees imposed after December 31, 2003. It is
permissible for political subdivisions to pay the fee prior to formally joining the
corporation and be credited with payment of the fee after a resolution approving the
articles of incorporation and by-laws is passed by the political subdivision.
5.3
Board Authority. The Board shall have the authority to establish membership dues, an
aggregation fee, or both, to be applicable to all Members of the Corporation. The Board
may amend such dues and fees at its discretion. The Board shall have the authority to
establish appropriate penalties that may be assessed against a Member for failure to pay
the dues, aggregation fee, or both, established by the Board.
5.4
Statements. Membership fees will be billed annually; statements for other fees and
expenses will be provided monthly as needed. Due dates for fees and expenses will be
determined by the Board.
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5.5
Books and Records. All Members of the corporation will have access to the books and
records of the corporation, including financial statements and budgets; however, the
Board of Directors may adopt policies that provide reasonable protection against the
unnecessary disclosure of information to individual employees.
ARTICLE VI. Indemnification
6.1
Liability. A Director, officer, employee or agent of the Corporation who performs his or
her duties in good faith, in a manner he or she reasonably believes to be in the best
interests of the Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances, shall not have any liability by reason of
being or having been a Director, officer, employee or agent of the Corporation and shall
not have any liability for any action taken by any employee, agent or independent
contractor selected with reasonable care, or for any loss incurred through the investment
of or failure to invest monies of the Corporation or any Trust Account. No Director,
officer, employee or agent shall be liable for any action taken or omitted by another
Director, officer, employee or agent.
6.2
INDEMNIFICATION. EACH PERSON WHO AT ANY TIME SHALL SERVE,
OR SHALL HAVE SERVED, AS A DIRECTOR, OFFICER, EMPLOYEE OR
AGENT OF THE CORPORATION~ OR ANY PERSON WHO~ WHILE A
DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF THE CORPORATION, IS
OR WAS SERVING AT ITS REQUEST AS A DIRECTOR, OFFICER,
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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, SHALL BE ENTITLED TO INDEMNIFICATION AS, AND TO
THE FULLEST EXTENT, PERMITTED BY ARTICLE 1396 SECTION 2.22A OF
THE TEXAS NON PROFIT CORPORATION ACT OR ANY SUCCESSOR
STATUTORY PROVISION, AS FROM TIME TO TIME AMENDED, SUCH
ARTICLE OR SUCCESSOR PROVISION, AS SO AMENDED, BEING
INCORPORATED IN FULL IN THESE BY-LAWS BY REFERENCE. THE
FOREGOING RIGHT OF INDEMNIFICATION SHALL NOT BE DEEMED
EXCLUSIVE OF ANY OTHER RIGHTS TO WHICH THOSE TO BE
INDEMNIFIED MAY BE ENTITLED AS A MATTER OF LAW OR UNDER ANY
AGREEMENT, VOTE OF DISINTERESTED DIRECTORS, OR OTHER
ARRANGEMENT. IT IS EXPRESSLY ACKNOWLEDGED THAT THE
INDEMNIFICATION PROVIDED IN THIS ARTICLE COULD INVOLVE
INDEMNIFICATION FOR NEGLIGENCE OR UNDER THEORIES OF STRICT
LIABILITY.
6.3
Advance Payment. The right to indemnification conferred in this Article VI shall include
the right to be paid in advance or reimbursed by the Corporation the reasonable expenses
incurred by a person of the type entitled to be indemnified under Section 2 who was, is or
is threatened to be made a named defendant or respondent in a proceeding in advance of
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the final disposition of the proceeding and without any determination as the person's
ultimate entitlement to indemnification; provided, however, that the payment of such
expenses incurred by any such person in advance of the final disposition of a proceeding,
shall be made only upon delivery to the Corporation of a written affirmation by such
Director or officer of his or her good faith belief that he or she has met the standard of
conduct necessary for indemnification under this Article VI and a written undertaking, by
or on behalf of such person, to repay all amounts so advanced if it shall ultimately be
determined that such indemnified person is not entitled to be indemnified under this
Article VI or otherwise.
6.4
Appearance as a Witness. Notwithstanding any other provision of this Article VI, the
Corporation may pay or reimburse expenses incurred by a Director or officer in
connection with his or her appearance as a witness or other participation in a proceeding
involving the Corporation or its business at a time when he or she is not a named
defendant or respondent in the proceeding.
6.5
Non-exclusivity of Rights. The right to indemnification and the advancement and
payment of expenses conferred in this Article Vi shall not be exclusive of any other right
which a Director or officer or other person indemnified pursuant to this Article VI may
have or hereafter acquire under any law (common or statutory), provision of the Articles
of Incorporation of the Corporation or these by-laws, agreement, vote of members or
disinterested Directors or otherwise.
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6.6
Savings Clause. If this Article VI or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify and hold harmless each Director, officer or any other person indemnified
pursuant to this Article VI as to costs, charges and expenses (including attorneys' fees),
judgments, fines and in amounts paid in settlement with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to the full extent
permitted by any applicable portion of this Article VI that shall not have been invalidated
and to the fullest extent permitted by applicable law.
7.1
ARTICLE VII. Code Of Conduct
Policy and Purposes. (a) It is the policy of the Corporation that Directors and
officers conduct themselves in a manner consistent with sound business and ethical
practices; that the public interest always be considered in conducting corporate business;
that the appearance of impropriety be avoided to ensure and maintain public confidence
in the Corporation; and that the Board establish policies to control and manage the affairs
of the Corporation fairly, impartially, and without discrimination.
(b) This Code of Ethics has been adopted as part of the Corporation's by-laws for the
following purposes: (a) to encourage high ethical standards in official conduct by
Directors and corporate officers; and (b) to establish guidelines for such ethical standards
of conduct.
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7.2
Conflicts of Interest. (a) Directors and officers shall be govemed by Local
Government Code Chapter 171, Regulation of Conflicts of Interest of Officers of
Municipalities, Counties and Certain Other Local Governments.
(b) An employee of a public entity may serve on the Board. It is specifically
recognized that as an official or employee of a public entity, that person's primary loyalty
is to the political subdivision that employs them. It shall not be a conflict of interest for
said Board member to express opinions or vote in a manner that reflects the self-interest
of the public entity that the Board member represents.
7.3
Nepotism. No Director or officer shall appoint, or vote for, or confirm the appointment
to any office, position, clerkship, employment or duty, of an person related within the
second degree by affinity or within the third degree of consanguinity to the Director or
officer so appointing, voting or confirming, or to any other Director or officer.
ARTICLE VIII. Miscellaneous Provisions
8.1
Fiscal Year. The fiscal year for the Corporation shall begin October 1 and end September
30. This fiscal year shall also be referred to as the Corporation Year.
8.2
Seal. The seal of the Corporation shall be such as from time to time may be approved by
the Board.
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