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Bylaws

ARTICLE 1 – NAME, PURPOSES, POWERS, AND OFFICES

1.1 Name

The name of this corporation is Policyholder Advocates (the “Corporation”).


1.2 Purposes

The Corporation is organized and shall be operated exclusively for scientific, charitable, and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986 or the corresponding provisions of any subsequent federal revenue law (the “Code”), including, but not limited to, the making of gifts and grants in a manner consistent with the requirements for organizations described in Section 501(c)(3) of the Code, and to conduct, accomplish, and carry on its objectives, functions, and purposes or any part thereof set forth in the governing documents of the Corporation as amended from time to time, within or outside the State of Texas.

This Corporation is additionally organized to promote, encourage, and foster any other similar religious, charitable, scientific, or educational activities; to accept, hold, invest, and reinvest and administer any gifts, legacies, bequests, devises, funds, and property of any sort or nature, and to use, expend, or donate its assets, and all income therefrom, for and to devote the same to, the foregoing purposes of the Corporation; and to do any and all lawful acts and things which may be necessary, useful, suitable, or proper for the furtherance of accomplishment of the purposes of this Corporation. Provided however, no act may be performed which would violate section 501(c)(3) of the Code as it now exists or as it may hereafter be amended.


1.3 Powers

The Corporation is a Texas nonprofit corporation and has all the powers, duties, authorizations and responsibilities as provided by the Texas Business Organizations Code (“TBOC”); provided that the Corporation shall neither have nor exercise any power, nor engage directly or indirectly in any activity, that would invalidate its status as a Corporation that is exempt from federal income tax as an organization described in Section 501(c)(3) of the TBOC.


1.4 Offices

The corporation may have such other offices as the Board of Directors may determine or as the affairs of the corporation may require.


1.5 Registered Office and Registered Agent

The Corporation shall comply with the requirements of the TBOC and maintain a registered office and registered agent in Texas. The registered office may, but need not, be identical with the Corporation’s principal office in Texas. The Board of Directors may change the registered office and the registered agent as provided in the TBOC.


ARTICLE 2 – NO MEMBERS

2.1 Membership

Pursuant to the Texas Business Organizations Code, the Corporation shall have no members. The Corporation is not a member-managed organization. The Corporation is a Board of Director-managed organization, as described in Article 3.


ARTICLE 3 – BOARD OF DIRECTORS

3.1 General Powers; Delegation

The activities, property, and affairs of the Corporation shall be managed by its Board of Directors. The Board of Directors (also referred to as “Board” or “Directors”) may exercise all such powers of the Corporation and do all such lawful acts and things as are permitted by law, by the Certificate of Formation, or by these Bylaws, unless otherwise expressly provided herein.

3.2 Number and Qualifications

The Board of Directors shall consist of at least three (3) directors. The initial directors shall be those persons named as directors in the Certificate of Formation. Decreasing the number of directors will not shorten the term of any incumbent director.

3.3 Term of Office

Directors shall serve until such director’s successor is elected and qualified, or until such director’s earlier death, resignation, retirement, disqualification or removal from office.

3.4 Nomination of Directors

The Board of Directors will nominate candidates for successor directors. At any meeting at which the election of a Director occurs any member may nominate a person with the second of any other member. In addition to nominations made at meetings, a nominating committee may consider nominees.

3.5 Election of Directors

A person who meets any qualification requirements to be a director and who has been nominated may be elected as a director. Directors shall be elected by a majority vote of those directors at a meeting at which a quorum is present.

3.6 Duties of Directors

Directors will perform their duties in good faith, with ordinary care, and in a manner they reasonably believe to be in the best interest of the Corporation. Ordinary care is care that prudent persons in similar positions would exercise under similar circumstances. In the performance of any duty imposed or power conferred on directors, they may in good faith rely on information, opinions, reports, or statements, including financial statements and other financial data, concerning the Corporation or another person that were prepared or presented by a variety of persons, including officers and employees of the Corporation, professional advisors, or experts such as accountants or attorneys. A director is not relying in good faith if the director has knowledge concerning a matter in question that renders reliance unwarranted.

3.7 Filling of Vacancies

Any vacancy occurring in the Board of Directors resulting from the death, resignation, retirement, disqualification or removal from office of any director shall will be filled by the affirmative vote of a majority of the directors present at any meeting of the directors at which a quorum is present. Any director elected or appointed to fill a vacancy shall will hold office for the remainder of the vacated term and until such director’s successor is elected and qualified, or until such director’s earlier death, resignation, retirement, disqualification or removal from office.

3.8 Removal

Any director may can be removed, either for or without cause, by the affirmative vote of a majority of the directors present at any meeting of the directors at which a quorum is present, if notice of the intention to act upon such matter shall have been given in the notice of such meeting and if such notice is provided to the director proposed to be removed.

3.9 Resignation

Any director may resign at any time by delivering written notice to the Secretary or President of the Board of Directors. Such resignation shall take effect upon receipt or, if later, at the time specified in the notice.

3.10 Directors’ Compensation

Directors will not receive any salaries or other compensation for their services, but, by resolution of the Board of Directors, may be reimbursed for any actual expenses incurred in the performance of their duties for the Corporation, as long as a majority of disinterested directors approve the reimbursement. The Corporation will not loan money or property to, or guarantee the obligation of, any director.

ARTICLE 4 – NOTICES

4.1 Notice

At least five (5) days' written notice must be given to all Directors of any meeting of the Board of Directors. Notice of meetings may be given by electronic transmission (i.e., e-mail) if all directors individually and collectively consent in writing. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except when a Director attends a meeting for the express purpose of objecting to a meeting not properly called.


ARTICLE 5 – MEETINGS

5.1 Regular & Special Meetings

The Board of Directors will hold at least one meeting a year.

Regular meetings of the Board of Directors will be held at such times and places as may be selected by resolution adopted by the Board and communicated by written notice to all directors. Except as otherwise provided by law, by the Certificate of Formation, or by these Bylaws, any and all business may be transacted at any regular meeting.  Special meetings of the Board of Directors may be called by or at the request of the President or any two directors. A person or persons authorized to call special meetings of the Board of Directors may fix select any place as the place for holding a special meeting. The person calling a special meeting will notify the Secretary of the information required to be included in the notice of the meeting. The Secretary will give notice to the directors as required in the Bylaws.


5.2 Quorum and Manner of Acting

A majority of the number of directors then in office will constitute a quorum for the transaction of business at any meeting of the Board of Directors.

The directors present at a duly called or held meeting at which a quorum is present may continue to transact business even if enough directors leave the meeting so that less than a quorum remains. However, no action may be approved without the vote of at least a majority of the number of directors required to constitute a quorum. If a quorum is present at no time during a meeting, a majority of the directors present may adjourn and reconvene the meeting one time without further notice.


5.3 Proxy Voting Prohibited

Proxy voting is not permitted.


5.4 Written Consent of Directors

Any action required or permitted to be taken at any meeting of the Board of Directors or any committee may be taken without a meeting if a consent in writing setting forth the action to be taken is signed by the number of directors or officers whose vote would be necessary to take action at a meeting at which all such persons entitled to vote were present and voted, as the case may be. Such consent must be filed with the minutes of proceedings of the Board of Directors or of the committee. Such consent shall have the same force and effect as a vote at a meeting where such directors or officers were present and voted, and may be stated as such in any document.


5.5 Electronic Meetings

Subject to the provisions of applicable law and these Bylaws regarding notice of meetings, members of the Board of Directors or members of any committee designated by such the Board may, unless otherwise restricted by statute, by the Certificate of Formation or by these Bylaws, participate in and hold any meeting of such the Board of Directors or committee by using conference telephone or similar communications equipment, or another suitable electronic communications system, including videoconferencing technology or the Internet, or any combination, if the telephone or other equipment system permits each person participating in the meeting to communicate with all other persons participating in the meeting. If voting is to take place at the meeting, reasonable measures must be implemented to verify that every person voting at the meeting by means of remote communications is sufficiently identified and a record must be kept of any vote or other action taken. Participation in a meeting pursuant to this Section 5.6 shall constitute presence in person at such meeting, except when a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.


ARTICLE 6 – COMMITTEES

6.1 Committees of Directors

The Board of Directors may establish one or more committees, may delegate specified authority to a committee, and may appoint or remove members of a committee. A committee shall include one or more Directors and may include persons who are not directors. If the Board of Directors delegates any of its authority to a committee, the majority of the committee shall consist of directors.


6.2 Advisory Boards or Committees

Advisory boards or committees not having and exercising the authority, responsibility or duties of the Board of Directors in the management of the Corporation may be designated by a resolution adopted by the directors. Except as otherwise provided in such resolution, members of each such advisory board or committee need not be directors of the Corporation. The President shall appoint the members of such advisory boards or committees.


ARTICLE 7 – OFFICERS

7.1 Elected Officers

The elected officers of the Corporation shall include a President and a Secretary, and may include one or more Vice Presidents and/or a Treasurer, as may be determined from time to time by the Board. The President of the Corporation may be called by another title, such as Executive Director or Chief Executive Officer, or any other suitable title approved by the Board of Directors. Any two (2) or more offices may be held by the same person, except that the President and Secretary shall not be the same person.


7.2 Election

All Officers will be elected by the Board of Directors, so far as is practicable, at each annual meeting of the Board of Directors.


7.3 Appointed Officers

The Board of Directors may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and assistant officers and agents as it shall from time to time deem necessary, who shall will exercise such powers and perform such duties as shall be set forth in these Bylaws or determined from time to time by the Board.


7.4 Term of Office; Removal; Filling of Vacancies

Officers shall hold a three-year term.

An officer may be re-elected to serve consecutive terms of office. Each elected officer of the Corporation shall hold office until such officer’s successor is chosen and qualified in such officer’s stead or until such officer’s earlier death, resignation, retirement, disqualification or removal from office. Each appointive officer shall hold office at the pleasure of the Board of Directors without the necessity of periodic reappointment. Any officer or agent may be removed at any time by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby. If the office of any officer becomes vacant for any reason, the vacancy shall be filled by the Board of Directors.


7.5 President

The President shall:

• Supervise and control the affairs of the Corporation and shall exercise such supervisory powers as may be given by the Board.

• Perform all duties incident to such office and such other duties as may be provided in these Bylaws or as may be prescribed from time to time by the Board.

• Preside at all board meetings.

• Serve as an ex-officio member of all standing committees, unless otherwise provided by the Board or these Bylaws.

• Set the agenda for each meeting of the Board.

• Have the general authority to execute bonds, deeds, and contracts in the name of the Corporation; to cause the employment or appointment of such employees and agents of the Corporation as the proper conduct of operations may require and to fix their compensation; to remove or suspend any employee or agent; and in general to exercise all the powers usually appertaining to the office of president of a corporation, except as otherwise provided by law, the Certificate of Formation or these Bylaws

• In the absence or disability of the President, the duties of such office shall be performed and the powers may be exercised by the Vice Presidents, if any, in the order of their seniority, unless otherwise determined by the President or the Board of Directors.


7.6 Vice Presidents

Each Vice President, if any, shall generally assist the President and shall have such powers and perform such duties and services as shall from time to time be prescribed or delegated to such office by the President or the Board of Directors.


7.7 Secretary

The Secretary shall:

• Give all notices in accordance with these Bylaws or as required by law.

• Take or ensure that someone takes minutes of all meetings of the committees and Board, and shall keep true copies of all minutes as part of the corporate records.

• Maintain custody of the corporate records.

• Keep a record of the names and addresses of each Director, officer, and employee of the Organization.

• Perform all duties incident to the office of Secretary.

• In the absence or disability of the Secretary, the duties of such office shall be performed and the powers may be exercised by the Assistant Secretaries in the order of their seniority, unless otherwise determined by the Secretary, the President, or the Board of Directors.


7.8 Treasurer

The Treasurer, if any, shall be the chief accounting and financial officer of the Corporation and shall have active control of and shall be responsible for all matters pertaining to the accounts and finances of the Corporation. The Treasurer shall:

• Have charge and custody of all funds of the Corporation, will oversee and supervise the financial business of the Corporation, will render reports and accountings to the Directors as required by the Board of Directors, and will perform in general all duties incident to the office of Treasurer.

• With the approval of the Board of Directors, shall set up all checking, savings, and investment accounts of the Corporation and deposit all such funds in the name of the Corporation in such accounts.

• Prepare reports for the Board of Directors, providing an accounting of all transactions and of the financial conditions of the Corporation.

• Keep all financing records, books, and annual reports of the financial activities of the Corporation at the principal office of the Corporation.


7.9 Additional Powers and Duties

In addition to the foregoing specially enumerated duties, services and powers, the several elected and appointed officers of the Corporation shall perform such other duties and services and exercise such further powers as may be provided by law, the Certificate of Formation or these Bylaws, or as the Board of Directors may from time to time determine or as may be assigned by any competent superior officer.


ARTICLE 8 – STAFF

8.1 Staff

The Board of Directors may, upon resolution, appoint a staff, including an Executive Director, and/or a management company to serve at the board's discretion and to carry out whatever tasks the board from time to time resolves.

A member of the Board of Directors may serve in an employment position within the Corporation, subject to the Conflict of Interest policy.


8.2 Executive Director and/or Management Company

The Executive Director and/or management company (“management”) shall be paid a fee set by the Board of Directors. Subject to such supervisory powers as are vested in the Board of Directors, the management shall supervise, direct, and control the business of the Corporation and actively manage its business, and shall have such other powers and duties as may be prescribed by the Board of Directors or by these bylaws. The management may engage in negotiations involving commitments of the resources of the Corporation or the acceptance of money or resources by the Corporation in furtherance of the purposes of the Corporation as set out in the Certificate of Formation and these bylaws. The management shall generally be expected to attend all meetings of the Board of Directors and meetings of the general membership, yet does not have a vote on the Board of Directors.


ARTICLE 9 – OPERATIONS

9.1 Contracts

The Board of Directors may authorize any officer or officers, or agent or agents, of the Corporation, in addition to the officers so authorized by these Bylaws, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.


9.2 Disbursement of Funds

Management may dispense with the funds of the Corporation in accordance with the annual budget approved by the Board of Directors and the purposes of the Corporation as set out in the Certificate of Formation and these bylaws.

Financial transactions with the value of $25,000 or more that are not in the annual budget shall require majority approval of the Board of Directors, or Executive Committee if a majority of the Board of Directors is not immediately available to vote on the transaction. Notwithstanding the above, all checks of more than $25,000 disbursing funds from any of the Corporation’s accounts shall require the signatures of at least two of the following: President, Vice President, Secretary, Treasurer, or key management personnel.


9.3 Records

The Corporation will keep correct and complete records of account and will also keep minutes of the proceedings of the Board meetings and Committees. The Corporation will keep at its principal place of business the original or a copy of its bylaws, including amendments to date certified by the Secretary of the Corporation.


9.4 Conflicts of Interest

The Corporation shall adopt a conflict of interest policy in the form attached hereto as Schedule A.


9.5 Dividends Prohibited

No part of the net income of the Corporation shall inure to the benefit of any private individual and no dividend shall be paid and no part of the income of the Corporation shall be distributed to its directors or officers.

The Corporation may pay compensation in a reasonable amount to its officers for services rendered and may compensate and reimburse its directors as provided in Section 3.11.


9.6 Loans to Officers and Directors Prohibited

The Corporation will not make loans to its officers and directors, and any directors voting for or assenting to the making of any such loan, and any officer participating in the making thereof, shall be jointly and severally liable to the Corporation for the amount of such loan until repayment thereof.


9.7 Fiscal Year

The fiscal year of the Corporation will be January 1 to December 31.


9.8 Invalid Provisions

If any part of these Bylaws shall be held invalid or inoperative for any reason, the remaining parts, so far as is possible and reasonable, shall remain valid and operative.


9.9 Powers to Amend

These Bylaws may be amended or repealed, or new bylaws may be adopted at any annual or special meeting of the Board of Directors at which a quorum is present by the affirmative vote of a majority of the directors present at the meeting, provided notice of the proposed amendment, repeal or adoption be contained in the notice of such meeting; and provided further, that the foregoing notice requirement shall not prohibit the directors from adopting the proposed amendment, effecting the proposed repeal or adopting the proposed new bylaws, as the case may be, in a modified form which is not identical to that described or set forth in the notice of such meeting.


ARTICLE 10 –SPONSORING MEMBERS

10.1 Sponsoring Members

The Corporation may create a class of Sponsoring Members who may constitute individuals, corporations or other business associations who share a commitment to the mission of the Corporation. Sponsoring Members shall not constitute managing members as contemplated by the Texas Business Organizations Code and will not have a managing or governing role in the Corporation. Sponsoring Members may be appointed to Advisory Committees by the Board of Directors.


10.2 Dues and Special Fees

Sponsoring Members shall pay annual dues to the Corporation as determined by the Board of Directors. Sponsoring Members may also pay additional Special Fees periodically to the Corporation for the financial support of the mission of the Corporation.


ARTICLE 11 – INDEMNIFICATION

11.1 Insurance

The Corporation will provide indemnification insurance for its Directors, and the Board of Directors shall select the amount and limits of such insurance policy.

11.2 Indemnification

To the extent permitted by law, any person (and the heirs, executors, and administrators of such person) made or threatened to be made a party to any action, suit, or proceeding by reason of the fact that he is or was a Director or Officer of the Corporation shall be indemnified by the Corporation against any and all liability and the reasonable expenses, including attorney's fees and disbursements, incurred by him (or by his heirs, executors or administrators) in connection with the defense or settlement of such action, suit, or proceeding, or in connection with any appearance therein.

11.3 Limits on Indemnification

Notwithstanding the above, the Corporation will indemnify a person only if he or she acted in good faith and reasonably believed that his conduct was in the Corporation’s best interests. In the case of a criminal proceeding, the person may be indemnified only if he had no reasonable cause to believe his conduct was unlawful.

CERTIFICATION

The undersigned, being the duly elected and qualified President of the Corporation, hereby certifies that the foregoing Bylaws of the Corporation were duly adopted by the Board of Directors of the Corporation.

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