As it relates to the operation of the POA, it is understood and agreed by the non-Developer Members and the Developer Member of the POA that the realization of Big Canoe as a premier planned community requires their cooperation as members of the POA in the nature of a joint venture in the furtherance of the business and purpose of the POA. It is recognized that the Developer has a substantial investment and must be free to undertake to develop and market profitably its property without undue hindrance or interference from the POA. It is further recognized that the Developer, its predecessors and successors, has invested and will continue to invest substantial sums at Big Canoe and that the present and future non-Developer Members have invested and will continue to invest substantial sums in connection with the construction and ownership of personal residences at Big Canoe.   Accordingly, the Developer Member and the non-Developer Members of the POA recognize that the POA must be operated in a fashion so as to recognize and protect such investments for the betterment of the Big Canoe community as it may be developed.

The property, affairs and business of the POA shall be managed by a Board of Directors consisting of the number of persons set forth in Section 3.4.

the property owners of Big Canoe. The responsibility for governance and the authority to manage the affairs of the community rests solely with the Board of Directors. The Board's role is to decide the policies of the POA, which are designed to ensure the enforcement of the Declaration, preserve and protect the assets of the POA, assure that the financial condition of the POA is adequate to meet its mission, goals and objectives, and provide and monitor a process for overall planning both long and short range.

In addition to the power and authority conferred upon the Board of Directors by these By­ Laws, by the Articles and by the Declaration, the Board may exercise all such powers of the POA and do all such lawful acts and things as are not by statute, by any legal agreement among the Members, by the Articles, by the Declaration or by these By-Laws, directed or required to be exercised or done by the Members or the Developer. Without limiting the generality of the foregoing, the Board shall fix the amount of assessments against each parcel of property in Big Canoe as specified by the Declaration and shall establish such rules and regulations as the Board shall be required to establish under the Declaration, the Articles, these By-Laws or any statute.

At the annual meeting to be held in December 2006, the Board will increase to seven (7) directors, six (6) of which will have been elected by the property owners at large, and one appointed  by the Developer. As long as there is a Type 11 D11   member in accordance with  Article III, Section 2 of the Declaration, there will be one (1) Developer-appointed Director.

[A Special Election was held in early 2005 to increase the number of Elected Directors from three (3) to four (4) as the first step in transitioning to the seven (7) member Board.  Thereafter

two (2) Elected  Directors  will be elected  annually (until there  is no longer a Type "D" member) in order to achieve, by 2007, the desired seven (7) member composition and to maintain that level ongoing. After there is no longer a Developer Director, the seven- (7-) member composition will be maintained by the Association members electing a third Elected Director every three (3) years.]

The method of election, term of office and filling of vacancies for Elected Directors shall be as follows:

A. Election Committee. The Election Committee shall be responsible for conducting the annual election of Elected Directors. The Board of Directors shall appoint the Election Committee which shall be composed  of nine (9) individuals as follows: four (4) Members who are full-time residents of Big Canoe; three (3) Members who are part-time residents of Big Canoe; and two (2) non-resident lot owners. Members shall be appointed for a term of three (3) years. A member of the Committee shall be appointed by the Board of Directors to serve as Chairperson. In addition, a member of the Board of Directors will serve as liaison to the Committee.   Appointments, when called for, shall be made no later than February 1. Members of the Election Committee may serve for two (2) consecutive terms. Members shall serve at the pleasure of the Board. Any vacancy that shall occur in the Election Committee shall be filled as the Board determines.

B. Elected Director Qualifications. Candidates must meet the following qualifications in order to be considered for the position of Elected Director: (i) own property in Big Canoe for a period of at least twenty-four (24) consecutive months prior to the date of the Primary Election; (ii) be at least twenty-one (21) years of age by the Primary Election date; (iii) be in good standing with the POA at the time of qualifying; (iv) secure a signature from at least twenty-five (25) different Members representing at least twenty-five (25) of the Lots in Big Canoe; (v) be willing to authorize a criminal and credit background check by the POA, if requested.

During the "Candidate Qualification Period," which shall begin on March 1st and end on June 30th of each year, any individual who meets the qualification standards set forth above will be eligible to run for a vacancy on the Board. The Election Committee is responsible for determining each candidate has met all qualifying standards set forth above. If the number of qualified candidates averages more than two (2) per vacancy, a Primary Election will be held. The purpose of the Primary Election is to identify two (2) candidates for each vacancy to compete in the General Election.

On an ongoing basis before and during the Candidate Qualification Period, the Election Committee shall actively encourage community recruitment of candidates.

C. Primary Election. If the number of qualified candidates requires a Primary Election, as described above, ballots will be mailed to all Members with the August POA statement or with a separate mailing if legal requirements dictate. The Election Committee will be responsible for coordinating with the POA to have the Primary Election ballots counted and the results announced by September 20th of each year.

D. General Election. If there were more than two (2) candidates for each vacancy, the candidates who received the most votes during the Primary Election will be included on the General Election ballot. If two (2) vacancies exist on the Board, the four (4) individuals who received the largest number of votes in the Primary Election shall be listed on the General Election ballot. If three (3) vacancies exist on the Board, the six (6) individuals who received the largest number of votes in the Primary Election shall be listed on the General Election ballot.

The Election Committee will recommend to the Board the means and methods for disseminating information about an election and the candidates.   The Election Committee shall be responsible for coordinating with the POA to have the General Election ballots counted and the results announced at the annual meeting.

E. Voting. Only  Types "A", "B", "C", and "E".   Members  shall  vote  for  Elected Directors. If the Company is a Type A, B, C, or E Member, it shall be qualified to cast these ballots. A ballot or proxy listing the names of the candidates for Elected Directors and the name of the Developer Director designated to serve by the Developer for the upcoming year shall be mailed to all Members and transmitted with the notice of the annual meeting as provided in these By-Laws.  In order to be counted, all ballots must be received by the POA by the date specified in the ballot material, and no voting in any form shall be permitted beyond that date. The candidate(s) receiving the highest number of votes shall be selected to fill the vacancy(ies). The election of the Elected Directors and the designation of the Developer Director shall be announced at the meeting.

F. Term of Office. The regular term of office of Elected Directors shall be three (3) years, commencing at the conclusion of each annual meeting.   No Elected Director shall serve for more than two (2) consecutive full terms of three (3) years, but such Elected Director shall be eligible for re-election following one (I) full year of non-service. If an Elected Director was elected in a special election to fill a vacancy, that Director shall be permitted to run for, and if elected, serve two (2) full terms without regard to his or her prior service to fill a vacancy. Any director appointed to fill any vacancy on the Board, as provided in Section 3.5.G, may be elected to serve a successive term following the end of the term of his or her appointment.

The term limitations set forth above shall not apply to the Developer Director.

G. Vacancies. If a vacancy of an Elected Director occurs on the Board for whatever reason, the following procedure shall be used to appoint a replacement. Any single vacancy (regardless of the remaining term) will go unfilled until the next General Election at which time someone will be elected to fill the balance (if any) of such Director's term. While there is an unfilled vacancy, if one (I) or more additional vacancies occur, the Board shall appoint one (1) property owner to fill a vacant position until the next General Election, at which time an Elected Director shall be elected to fill the balance (if any) of all vacated terms. Alternately, at its discretion in the event of multiple Elected Director vacancies, the Board may choose to conduct a Special Election to fill all vacancies for the balance of their respective terms.

In the event that multiple vacancies occur so as to prevent the Board from convening a quorum in order to conduct business, a majority of the remaining directors shall appoint a sufficient number of additional property owners to the Board for a temporary period to permit a quorum to be convened. The Board shall then call a Special Election to fill all of the initial vacancies (i.e., those existing before the appointment of members for a temporary period) for the balance  of  the  terms.   The  Board  shall  conduct  the  Association 1s  business  with  its  temporary members until the newly elected directors are seated.

H. Special Elections. Special Elections will generally follow the above-defined procedures except that ti1e Board reserves the right to expedite the process to meet the needs requiring the Special Election. The Board shall set the qualifying period. The Board  may conduct an election at a time of its choosing following the announcement of the qualified candidates, and even if there are more than two (2) candidates per vacancy, the Board may choose to conduct a General Election first.  In this case, if any candidate receives a majority of the votes cast, that candidate would be declared the winner of any single vacancy, or in the event of multiple vacancies, be declared the winner of one (1) of the vacancies. If no candidate receives a majority in the General Election, or if there are multiple vacancies to be filled, a run off election for the two (2) candidates per vacancy who received the most votes will be held on the business day closest to thirty (30) days after the results of the General Election are known.

The Directors shall receive such reasonable remuneration or compensation for their services and reimbursement for their out-of-pocket expenses when they incur travel expenses in attending annual or special meetings, as the Members may from time to time determine. Beginning with persons elected at the annual meeting in December 2007, no director shall be an employee or contractor of the Association.

Meetings of the Board of Directors shall be held at such a place as may from time to time be fixed by resolution of the Board, or as may be specified in the notice of meeting. Regular meetings of the Board shallbe held at such times as may from time to time be fixed by resolution of the Board, and special meetings may be held at any time upon the call of the President or the Secretary or any two (2) Directors by facsimile, electronic mail, or other electronic communication device, with confirmation of transmission, or by written notice of the time and place of such meeting, duly served on or sent or mailed to each Director not less than four (4) days before the meeting.

The annual meeting of the Board shall be held without notice immediately after the annual meeting of the Members. Notice need not be given of regular meetings of the Board held at times fixed by resolution of the Board.   No notice of any meeting need be given any Director who attends such meeting, unless any such Director attending at the beginning of such meeting states any objection or objections to the place or time of the meeting, to the manner in which it has been called or convened or to the transaction of business. Further, notice shall not be required to be given to any Director who at any time before or after the meeting waives notice of the meeting in writing.

Any Director may participate in a Board meeting by conference telephone or by similar communication equipment by which all persons participating in the meeting can hear each other. Participation in a meeti

Four (4) Directors, at a meeting duly called and assembled, shall constitute a quorum for the transaction of business, unless otherwise specifically required by statute, the Articles, the Declaration or these By-Laws, and the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If at any meeting of the Board there shall be less than a quorum present, a majority of those present may adjourn the meeting, without further notice, from time to time until a quorum shall have been obtained.

Any action required or permitted by these By-Laws or otherwise to be taken at any meeting of the Board may be taken without a meeting if written consent setting forth the action so taken shall be signed by a majority of the Members of the Board and such written consent is filed with the minutes of the proceedings of the Board. Notification to Members of the Board shall be as described in paragraph one (1) of Article 3.7 of these By-Laws.

A. Automatic
An Elected Director shall automatically be removed from the Board of Directors without a vote of the Members of the Property Owners Association for the following reasons: (A) falsification of any information required to qualify as a candidate submitted to the Election Committee; (B) unexcused absences from four (4) consecutive monthly Board meetings or a total of five (5) within any twelve- (12-) month period; or (C) ninety (90) days or more delinquency in paying assessments, charges or fines to the POA; and (D) evidence of a felony conviction discovered during a background investigation or by any other means.

B. Removal by Members
Any one or more Elected Director may be removed by a majority vote of the membership. A Board member's removal may be proposed by a majority of the members of the Board or by Members in good standing with the Property Owners Association representing at least five hundred (500) votes. A petition bearing the names of Members demanding the removal shall be presented to the Secretary. The Secretary shall have five (5) days to verify the names on the petition. If the petition is verified, or if the request is from a majority of other Board members, the Secretary shall cause a ballot to be mailed to every Member to vote for or against the removal of the Board member(s).   All ballots must be returned within twenty (20) days of the date of mailing.

The Secretary shall be obligated to call a special meeting of the Members to be held at least ten ( I0) days prior to the due date of the ballots. At such special meeting, the Board member(s) whose removal has been proposed shall be given the opportunity to be heard.

If a Board member(s) is/are removed, either automatically or by a vote of the Members, the vacancy(ies) shall be filled in accordance with Paragraph 3.50.

At the annual meeting next following such time as the Developer ceases to be a Type "D" Member (and thereupon voting solely as a Type "A,U "BU, "C", or "E" Member, as the case may be), all of the Directors shall be Elected Directors serving staggered terms. During the next regular election following such time, an additional Member (taking the place of the remaining Developer Director) shall be elected for a term of three (3) years.

QUESTIONS?