CONSTITUTION AND BY-LAWS OF ARDEN BEACHES, INC.

(Amended October 26, 2024)

ARTICLE I – NAME

Section 1. This organization shall be known as Arden Beaches, Inc.

ARTICLE II – OBJECTIVES

Section 1. The objectives of this corporation as the successor to Sunrise Beach, Inc. and Beach Shores, Inc. as referred to in the property deeds of Sunrise Beach and those Non Sunrise Beach (NSB) Arden on the Severn sub-division deeds amended shall be to maintain and regulate the common beaches of the Arden Community and to promote cooperation among the property owners and other persons interested in and who may use the facilities.

ARTICLE III – MEMBERSHIP

Section 1. Any resident paying fees for maintenance and access to Arden Beaches, Inc. is considered a member of the organization subject to ABI Bylaws, Rules and Regulations.

Section 2. Any owner of a residential lot shown upon the sub-division plat of Sunrise Beach and those amended NSB Arden on the Severn sub-division deeds may purchase shares in the corporation. Those members with shares purchased or earned through service will be considered shareholder members. The cost of a membership share will be reviewed annually by the Board of Governors, with any proposed change presented at the annual shareholder membership meeting for review, revision and shareholder approval. A Service share will be provided to those qualified owners who serve as board members for a minimum of one (1) term of two (2) years. Only persons owning a residential lot shown upon the sub-division plat of Sunrise Beach and those amended NSB Arden on the Severn sub-division deeds will be allowed shareholder membership or office in the corporation.

Section 3. Shares may be transferred by the owner to any property owner of a residential lot shown upon the sub-division plat of Sunrise Beach and those NSB Arden on the Severn sub-division deeds for or without consideration but limited by Article III, Section 4. Transfer of said share(s) shall be in writing and submitted to the corporation for proper recording on the corporate records. Each eligible property will be assigned one (1) share during the 2024 billing cycle through the inflation access user fee implemented during the 2023 annual shareholder meeting and subsequent shareholder vote. This share will remain with the affiliated tax account and is non-transferrable.

Section 4. In no case shall any shareholder member(s) singly or jointly be permitted to collectively own more than five (5) percent of the total outstanding shares.

ARTICLE IV – VOTING – REGULATIONS AND PROXY

Section 1. All owners of one or more shares (active shareholder members) in good standing (current in payment of deed-mandated lot assessment(s); not in arrears) are eligible to cast votes. Shareholder members in arrears for the deed-mandated annual lot assessment will be considered inactive and may not cast votes.

(a) In case of tenants by entirety, joint tenancy, or tenants in common ownership, one party per lot will be recognized as being eligible to cast such vote or votes. In the event of a disagreement between the parties holding title as to who has the right to vote, no vote will be accepted by the Corporation.

(b) Authorized votes held by a shareholder member and/or joint tenant may not be split; they must be cast in a block, aye or nay.

Section 2. Proxy voting shall be allowed by non-board shareholder members. Active board members may not cast proxy votes. Proxy votes must be cast in a block, either aye or nay, by any shareholder member duly representing any other shareholder member. Due authorization to cast proxy votes shall be recognized by the Board of Governors upon presentation of the following statement from the absent shareholder member: “(Name of Shareholder Member carrying proxy votes) is hereby authorized to cast my Arden Beaches, Inc. votes in my name. Signed (a shareholder member in the corporation).”

Section 3. Mail-In voting shall be allowed by electronic mail only and must be cast within the specified period of time between the annual meeting and the in-person voting event following. Email ballot must be submitted from the shareholder member email address on file with the organization to be valid. Eligibility to cast mail-in ballot votes are in accordance with Section 1 (a) and (b) above.

ARTICLE V – MEETINGS – QUORUM

Section 1. The corporation shall have at least one regular shareholder membership meeting yearly called the annual meeting. The annual meeting of the corporation may only be attended by active shareholder members. This meeting shall be held in October. The fiscal year shall be from 1 January through 31 December.

Section 2. The Board of Governors shall meet regularly at intervals no longer than 60 days to conduct corporation business. There must be a majority of board members present to establish a quorum to conduct business. Any resident of the Arden community may attend any of the regularly scheduled monthly meetings of the Board of Governors and may speak to such Board when recognized to do so once regular business is concluded.

Section 3. Special meetings of the corporation may be called by the Chairperson of the Board of Governors upon the recommendation of the Board itself. Such meetings may also be requested by a petition of shareholder members holding shares equaling ten percent (10%) of the total shares outstanding.

Section 4. Special meetings of the Board of Governors may be called at any time the Chairperson deems it necessary.

Section 5. Shareholder members of the corporation shall be informed at least ten (10) days prior to any regular, the annual or any special meeting of the shareholder membership. This notification shall include a statement of the business to come before the meeting, as well as the date and place of the meeting.

Section 6. Order of business and parliamentary procedures for any corporation meeting shall follow the guidelines set forth in Robert’s Rules of Order, Revised, unless superseded by the corporation Constitution and Bylaws. At the annual meeting any item of business may be suspended or returned (except Board election), if no objection is made, or if desired by a majority of those shareholder members present.

Section 7. Majority agreement represented by votes cast shall prevail in all elections and ordinary business requiring such vote.

Section 8. A legally transacted meeting of the corporation is contingent upon an assembled quorum. Monthly Board meetings must include a quorum of Board members as referenced in Article V, Section 2. The established quorum for the corporation’s annual and/or special voting event is the number of votes cast which must equal at least 10% of the total shares issued in the corporation. Should a quorum not be realized for the voting event, the voting event is invalid and must be rescheduled with notification to shareholder members of the new date/time.

Section 9. Upon request by any shareholder member the number of aye and nay votes shall be announced. It shall be the duty of the presiding officer or designee, during discussion, to confine members to the subject under discussion. No shareholder member shall be allowed to speak on any matter until properly recognized by the Chair.

ARTICLE VI – DIRECTORS AND ELECTIONS

Section 1. The Directors of the corporation shall consist of eleven (11) in number: ten (10) members elected by a majority of all votes cast by shareholder members in good standing of said corporation present at the annual meeting of said corporation and one (1) person appointed by the Arden Community Association. These Directors shall be called the Board of Governors and from among them will be chosen a Chairperson, Vice Chairperson, Secretary, Treasurer, and such other officers as deemed appropriate by the Board of Governors.

Section 2. Prior to the annual meeting of the corporation, the Chairperson of the Board of Governors will appoint a nominating committee and this committee shall have their nominees selected and ready to be presented at the annual meeting.

Section 3. Election of the Board of Governors shall take place at the annual meeting. At this meeting the slate of the nominating committee shall be presented and other nominations may be made and seconded by the shareholder membership from the floor prior to the election.

Section 4. The terms of the office for the ten (10) elected shareholder members of the Board of Governors shall be staggered and each seat shall be held for a term of two (2) years. The initial election shall be to place five (5) shareholder members in office for one (1) year and five (5) for two (2) years thus allowing one-half of the elected board to open for candidates each year. The term of office of the member appointed by the Arden Community Association shall be determined by that body. No member shall be eligible for more than three (3) consecutive terms of office, whereupon there must follow a period of one (1) year before eligibility is reinstated.

Section 5. The elected Board of Governors shall be selected as follows: five (5) shall be elected at large from the shareholder membership and the other five (5) shall be elected also from the shareholder membership, but one (1) from each of the five sections of Arden on the Severn, if possible. Vacancies in the Board of Governors, occurring between annual meetings, shall be filled by a majority vote of the Board of Governors.

Nominees for such vacancies may be obtained by any Board member and presented at any meeting of the Board of Governors for election. Such an appointment by the Board of Governors shall be made to fill a vacancy for the duration of the term of the office vacated.

Section 6. Members of the Board of Governors may be removed prior to completion of their term of office upon decision by a Board of Governors meeting, such removal requiring two-thirds majority of the votes presented.

ARTICLE VII – THE BOARD OF GOVERNORS

Section 1. The Board of Governors shall choose annually amongst themselves a Chairperson, a Vice-Chairperson, a Secretary, a Treasurer and other office deemed appropriate by a majority of the Board of Governors. Each Board member shall have a single vote in the deliberations and actions taken by the Board of Governors.

Section 2. The Board of Governors shall be responsible for:

(a) The organization, operations, and management of the corporation;

(b) The expenditure of funds for the corporation operations and property maintenance;

(c) The development, implementation and maintenance of Standard Operating Procedures (SOPs) to guide the organizations business operations and provide consistency through administrative transitions.

(d) The enforcement of these Bylaws as well as rules, regulations and orders as established by the corporation as well as those specified in property covenants;

(e) The calling of special and regular meetings of the corporation and Board of Governors.

ARTICLE VIII – DUTIES OF OFFICERS

Section 1. The Chairperson of the Board of Governors shall preside at all meetings of the Corporation and shall perform such other duties as pertain to the office. The Chairperson shall appoint all special committees authorized by the corporation and/or the Board of Governors, and no person or agent of any person shall represent the corporation in any matter unless so authorized.

Section 2. In the absence of the Chairperson, the Vice-Chairperson shall perform the duties of the Chairperson, and in the absence of the Chairperson and Vice-Chairperson, the Treasurer shall preside. In the absence of the Chairperson and Vice-Chairperson, the Secretary shall perform above listed duties of the Vice-Chairperson.

Section 3. The Secretary shall record the proceedings of the corporation and produce meeting minutes for Board review/approval for publication; be custodian of the Constitution and By-laws and incorporate therein all duly adopted amendments; transmit promptly all resolutions in accordance with instructions; and keep a roll of the officers and shareholder members. The Secretary shall perform such other duties pertaining to the office as may be assigned by the Board of Governors and at the expiration of the term of office, turn over to its successor all books, documents, records, and property of the corporation it may have in its possession.

Section 4. The Treasurer shall appoint a Board member by majority Board member vote to receive, record and deposit into ABI bank accounts all checks or monies given to Arden Beaches Inc. in accordance with the established SOP for financial processes. The Treasurer shall reconcile all financial transactions received by the corporation, and shall disburse funds as authorized. Records for all financial transactions shall be maintained for the annual financial review. The Treasurer shall present a financial report at the annual meeting of the corporation; and at the expiration of the term of office, shall turn over to the successor all financial records and any other property that may belong to the corporation. At the time of the annual meeting, a statement consisting of the annual financial report of the status of the corporation shall be provided. All disbursements made by checks drawn upon the corporation’s funds shall be signed by two of the following officers: Chairperson, Vice-Chairperson, Treasurer or Secretary. If a check is issued to any of the officers listed above, the signatories shall not include the individual receiving the check. All automatic payments for recurring expenses, such as utilities, must be approved by the majority of the Board members by vote.

Section 5. For shareholder membership approval, or revision and approval, for the annual meeting, the Board of Governors shall have formulated an operating and maintenance budget for the 12-month fiscal year. The proposed budget shall be delivered to each shareholder member in accordance with Article V, Section 5.

Section 6. The Chairperson of the Board, and any two (2) officers, may authorize expenditures not more than five hundred ($500.00) dollars between regular meetings. The Board of Governors must have a majority vote of the Board members to authorize non-budgeted expenditures between five hundred one and one thousand ($501.00-1,000.00) dollars. A majority of Board member votes must be cast for non-budgeted expenditures exceeding one thousand ($1,000.00) dollars, but not to exceed three thousand ($3,000.00) dollars.

Section 7. The Board of Governors shall take all possible measures to ensure that properties owned by the corporation are maintained safely for authorized residents of Arden on the Severn. Authorized residents of said properties shall be governed in accordance with the Bylaws, rules, and regulation as set forth by the corporation.

Section 8. The Board of Governors shall be responsible for the financial management of the corporation. Services provided by the corporation shall be funded essentially from the twenty-two ($22.00) dollars annual per lot fee collected from lot owners for each lot owned and established user fees as set forth by the Board of Governors and approved by the shareholder members. Inflation shall be acknowledged through regulatory annual access user fees; and, if possible, a reserve fund for the future shall be established and considered by the Board of Governors when determining user fees. The right to collect the annual lot assessment fee is described in the covenant attached to each property deed.

Section 9. The Board of Governors shall have the power to employ paid help as they see fit to further the aims of the corporation.

Section 10. Any Board member who misses two (2) consecutive Board meetings without due cause would be interpreted to have submitted his/her resignation.

Section 11. The members of the Board shall not be liable for mistakes of judgment or otherwise if made in good faith, nor incur any personal liability with respect to any contract or other commitment made by them on behalf of the Board of Governors.

ARTICLE IX – FINANCIAL REVIEW OF BOOKS

Section 1. The complete books of the Treasurer shall be reviewed annually by an independent financial organization appointed by the Chairperson and approved by the Board of Governors. The results of the financial review shall be reported by the Chairperson to the corporation at the first regular membership meeting following such review. An internal review may be performed by other members of the corporation.

ARTICLE X – AMENDMENTS

Section 1. Proposals to amend the corporation Constitution and Bylaws must be submitted to the Board of Governors in writing, by a shareholder member, prior to 1 July. Those amendments proposed by Board members must be made through committee with majority Board member vote to be included in the shareholder member notification of the annual meeting.

Section 2. Any proposed amendments to the Constitution and Bylaws shall be included in the shareholder member notification of the annual meeting.

Section 3. Amendments to the Constitution and Bylaws will be considered by the shareholder membership at the annual meeting and will be voted upon requiring two-thirds (2/3) of the votes cast in favor for the passage for adoption.

ARTICLE XI – CHARTER AND BY-LAWS

Section 1. The Constitution and Bylaws shall be published and distributed to the membership of the corporation following ratification at the first annual meeting and at such other times as are deemed necessary by the Board of Governors.

ARTICLE XII – USER FEES

Section 1. It is recognized that maintenance of and improvements to

Corporation property must be funded by revenue exceeding the annual

twenty-two ($22.00) dollar per lot basic maintenance fee provided for in the

Deeds. Therefore, a regulatory annual access user fee (recognized inflation) and optional amenity fee schedule will be presented to the shareholder membership for consideration, revision, and approval.

Section 2. Proposed fee revisions will take effect beginning the year after adoption, and will remain in effect for two (2) years unless otherwise stipulated by shareholder member vote. The fee structure will be reviewed every two (2) years by the Board of Governors, and any Board member majority vote for proposed changes will be presented at the annual Shareholder membership meeting for review, revision, and approval.