Homeowner Friendly Summary of Proposed Bylaw Changes

2.01 Membership

There will be one class of Members. All record owners (an “Owner” or “Owners”) of any separately-owned Lot (a “Lot”, as defined below) within Garden Oaks Sections 1, 2, 3, and 5 (collectively, the “Subdivision” and individually, the “Section”) in Harris County, Texas, shall become members (“Members”) of GOMO.

2.02 Voting Rights and Procedures

Each Lot in Garden Oaks Sections 1, 2, 3, and 5 will have one (1) vote in GOMO on matters requiring a vote of the Members, regardless of the number of Owners of the Lot.

Each Lot is entitled to one (1) vote, regardless of the number of Owners of a Lot. Multiple Owners of any single Lot must vote in agreement (under any method they devise among themselves) but, in no case will such multiple Owners cast portions of votes. The vote attributable to any single Lot must be voted in the same manner but, in no event can there be more than one vote cast per Lot.

A Lot is entitled to two (2) votes only if all of the following conditions are satisfied: (i) applicable City of Houston subdivision ordinances would permit subdivision of the Lot by replatting, (ii) each resulting Lot would satisfy the frontage requirements imposed herein, (iii) no Structure located on one resulting Lot would encroach onto the adjacent Lot or violate setback lines after subdivision, and (iv) each resulting Lot may be conveyed to a separate Owner as a fee simple tract of land.

No Owner will have a right to vote unless (i) the Owner is shown on the membership rolls of GOMO, or (ii) the recorded deed evidencing ownership of the Lot has been delivered to GOMO.

Votes may be cast by written proxy if the original proxy is delivered to the Board at or before the time of voting. Proxies may not be effective for a period exceeding eleven months. Owners may be represented at a meeting for voting purposes by an attorney-in-fact pursuant to a power of attorney satisfying the requirements of Texas law if certain documents are delivered to the Board at or before the time of voting.

3.01 Annual Meeting of Members

Annual meeting of the Members will be held each year at a time, place, and date designated by the Board, for the purpose of electing Directors and for the transaction of other business as may come before the meeting.

3.04 Notice of Meetings of Members

Written or printed notice stating the place, day, and hour of each annual and special meeting of Members will be delivered, either personally by delivery to the Lot or by mail, to each Member entitled to vote at the meeting, not less than ten (10), nor more than sixty (60), days before the date of the meeting, by or at the direction of the President, the Secretary, the Directors, or the Members calling the meeting. Written notice under this section may be sent by electronic mail to any Member who has registered his/her email address with GOMO and opted to receive notice in this manner. Additional notice of any meeting and notice of informational meetings may be given by any means determined by the President, the Secretary, or the Directors to be reasonable and appropriate, such as by publication in the Garden Oaks Gazette or by signs posted in the neighborhood. In case of a special meeting or when required by statute or these Bylaws, the notice must state the purpose or purposes for which the meeting is called.

3.05 Quorum

Except as otherwise provided in these Bylaws or in the Restrictions, the presence, in person or by proxy, absentee ballot, or electronic ballot, of Members representing fifty (50) of the total votes allocated to Owners in the Subdivision will constitute a quorum for the conduct of business at a meeting. If a quorum is not present at any meeting of Members, Members representing a majority of the Lots present at the meeting may adjourn and reconvene the meeting at a later time or date.

3.06 Manner of Acting

The act of Members representing a majority of the Lots attending in person or by proxy, absentee ballot, or electronic ballot, and entitled to vote at a meeting at which a quorum is present will be the act of the Members, unless the act of a greater number is required by law or another provision of these Bylaws. For the purpose of electing Directors for each section, the act of Members representing a majority of the Lots for each section, attending in person or by proxy, absentee ballot, or electronic ballot, and entitled to vote at a meeting at which a quorum is present will be the act of the Members for each section, unless the act of a greater number is required by law or another provision of these Bylaws.

4.02 Election of Directors

At each annual meeting GOMO shall solicit Director candidates for vacant Director positions as provided in Section 4.03. The Board may solicit candidates via floor nomination. A nomination taken from the floor in a board member election is not considered an amendment to the proposal for the election. Directors shall be elected to serve a term of three (3) years. Each director will continue to hold office until the meeting at which his/her successor is elected. The act of Members representing a majority of the Lots in each section, attending in person or by proxy, absentee ballot, or electronic ballot, and entitled to vote at a meeting at which a total quorum is present as provided in Section 3.05 will be the act of the Members, unless the act of a greater number is required by law or another provision of these Bylaws.

4.03 Number, Tenure, and Qualifications

GOMO will have twelve (12) Directors, comprised of three (3) Directors for each section. All Directors must be Members and at least eleven (11) Directors must reside in the Subdivision. Directors will each be elected for three-year terms.

At least ten (10) days before GOMO disseminates absentee ballots or other ballots to the Members for purposes of voting in a Board member election, GOMO must provide notice to the Members soliciting candidates interested in running for a position on the Board. The notice must contain instructions for an eligible candidate to notify the Board of the candidate's request to be placed on the ballot and the deadline to submit the candidate's request. The deadline may not be earlier than the 10th day after the date the Board provides the notice. The absentee ballot or other ballot must include the name of each eligible candidate from whom the Board received a request to be placed on the ballot.

The notice required by this provision must be mailed to each Member, or provided by (a) posting the notice in a conspicuous manner reasonably designed to provide notice to the Members — on public or privately-owned property within the Subdivision, with the Owner's consent, or on any Internet website maintained by GOMO or other Internet media — and (b) sending by e-mail to each Member who has registered an e-mail address with GOMO.

4.07 Board Meetings

A Board meeting means a deliberation between a quorum of the voting Directors or between a quorum of the voting Directors and another person, during which Association business is considered and the Board takes formal action. A Board meeting does not include the gathering of a quorum of the Board at a social function unrelated to the business of GOMO, if formal action is not taken and any discussion of Association business is incidental to the social function.

Regular and special Board meetings must be open to the Members, subject to the right of the Board to adjourn a Board meeting and reconvene in closed executive session.

Regarding all Board meetings that are open to the Members, Members other than Directors may not participate in any discussion or deliberation unless permission to speak is requested on his or her behalf by a Director. In such case, the President may limit the time any Member may speak.

An open meeting may be held by electronic or telephonic means provided that (i) each Director may hear and be heard by every other Director, (ii) all Members in attendance at the meeting may hear all Directors (except if adjourned to executive session), and (iii) all Members are allowed to listen using any electronic or telephonic communication method used or expected to be used by a Director to participate.

Action Outside of a Meeting, Generally. The Board may take action outside of a meeting, including voting by electronic and telephonic means, without prior notice to Members if each Director is given a reasonable opportunity to express the Director's opinion to all other Directors and to vote. Any action taken without notice to the Members must be summarized orally, including estimation of expenditures approved at the meeting, and documented in the minutes of the next regular/special Board meeting.

Action Outside of a Meeting Prohibited. Notwithstanding the above, the Board may not consider or vote on any of the following issues except in an open meeting for which prior notice was given to Members:

• Initiation of enforcement actions, excluding temporary restraining orders or violations involving a threat to health or safety;
• Increases in Assessments;
• Appeals from a denial of architectural approval;
• A suspension of a right of a particular Member before the Member has an opportunity to attend a Board meeting to present the Member's position, including any defense, on the issue;
• Lending or borrowing money;
• The adoption or amendment of a Dedicatory Instrument;
• The approval of an annual budget or the approval of an amendment of an annual budget that increases the budget by more than ten percent (10%);
• The sale or purchase of real property;
• The filling of a vacancy on the Board;
• The construction of capital improvements other than the repair, replacement, or enhancement of existing capital improvements; or
• The election of an officer.

4.09 Notice of Board Meetings

Notice to the Members and Directors of the date, hour, place and general subject of regular or special open Board meetings, including instructions for Members to access any communication method utilized for the Board meeting, as well as a general description of any matter to be brought up for deliberation in executive session, will be (1) mailed to each Member and Director not later than the 10th day or earlier than the 60th day before the date of the meeting; or (2) provided at least 144 hours before the start of a regular board meeting and at least 72 hours before the start of a special board meeting by (a) posting in a conspicuous manner reasonably designed to provide notice to the Members and Directors — in a place located on any public or Member's property with their consent, or other property within the subdivision, or on any internet website maintained by GOMO or other internet media — and (b) sending notice by e-mail to each Member and Director who has registered an email address with GOMO.

It is the Member's and Director's duty to keep an updated e-mail address registered with GOMO.

If the Board recesses to continue the meeting the following regular business day, the Board is not required to post notice of the continued meeting if the recess is taken in good faith and not to circumvent this provision. If the meeting is continued to the next business day, and the Board again continues the meeting to another day, the Board will give notice of continuation in at least one of the manners described above, within two (2) hours after adjourning the meeting being continued.

4.11 Vacancies

In the event of a vacancy for a Director whose term has expired, GOMO shall hold an election and send notice to the Members as required by Section 4.02 of any Board vacancy so that Members may stand for election to the position. A Director may be appointed by the Board to fill a vacancy on the board that occurs prior to the expiration of that Director's term. A Director appointed to fill a vacant position shall serve for the remainder of the unexpired term of the position.

4.12 Removal

Any Director elected by the Members may be removed, with or without cause, by the vote of Members holding a majority of the total votes of a quorum of Members. Any Director whose removal is sought will be given notice prior to any meeting called for that purpose. Upon removal of a Director, a successor will then and there be elected by the Members entitled to elect the Director so removed to fill the vacancy for the remainder of the term of such Director.

Additionally, a Director may be appointed by the Board to fill a vacancy on the board that occurs prior to the expiration of that Director's term, and shall serve for the remainder of the unexpired term of the position.

A Director is considered to have been immediately removed from the Board if the Director misses three (3) consecutive, or four (4) total regular Board meetings counted from annual meeting to the next annual meeting, unless, at least eighty percent (80%) of the remaining Directors vote to excuse one or more of the absences, thereby allowing the Director to remain on the Board. A vacancy that occurs due to excessive absences may be filled by appointment by the Board, and an appointed Director shall serve for the remainder of the unexpired term of the position.

4.13 Resignation

A Director will be deemed to have resigned immediately if the Director no longer owns property in the Subdivision.

4.14 Conflict of Interest

GOMO may enter into an enforceable contract with a current Director, a person related to a current Director within the third degree by consanguinity or affinity, a company in which a current Director has a financial interest in at least 51 percent of profits, or a company in which such a related person has a financial interest in at least 51 percent of profits, only if the following conditions are satisfied:

1. the Director, relative, or company bids on the proposed contract and GOMO has received at least two other bids for the contract from persons not associated with the board member, relative, or company, if reasonably available in the community;
2. the Director (A) is not given access to the other bids; (B) does not participate in any board discussion regarding the contract; and (C) does not vote on the award of the contract;
3. the material facts regarding the relationship or interest with respect to the proposed contract are disclosed to or known by the Board and the Board, in good faith and with ordinary care, authorizes the contract by an affirmative vote of the majority of the Board members who do not have an interest governed by this subsection;
4. the Board certifies that the other requirements of this subsection have been satisfied by a resolution approved by an affirmative vote of the majority of the Directors who do not have an interest governed by this subsection; and
5. notwithstanding the foregoing, any contract to which GOMO is a party with an expected value exceeding $50,000 — whether or not a Director, relative, or company described in this Section 4.14 is involved — must be awarded through a formal bid process established by GOMO.

4.16 Executive Session

The Board may close a portion of its meetings for the purpose of discussing actions involving personnel, pending or threatened litigation, contract negotiations, enforcement actions, confidential communications with GOMO's attorney, matters involving the invasion of privacy of individual Members, or matters that are to remain confidential by request of the affected parties and agreement of the Board. Following an executive session, any decision made in the executive session must be summarized orally and placed in the minutes, in general terms, without breaching the privacy of individual Members, violating any privilege, or disclosing information that was to remain confidential at the request of the affected parties. The oral summary must include a general explanation of expenditures approved in executive session.

4.17 Powers

The Board will be responsible for the affairs of GOMO and will have all of the powers necessary for the administration of GOMO's affairs. The Board may delegate to one or more of its Directors the authority to act on behalf of the Board on all matters relating to the duties of the managing agent or manager, if any, that might arise between meetings of the Board.

In addition to the authority created in these Bylaws, Texas law, or by any resolution of the Board that may hereafter be adopted, the Board will have the power to establish policies relating to, and for performing or causing to be performed, the following, by way of explanation but not limitation:

• preparing and adopting of annual budgets;
• designating, hiring, and dismissing the personnel necessary for the operation of GOMO;
• opening of bank accounts on behalf of GOMO and designating the signatories required;
• enforcing by legal means the provisions of the Restrictions and other Dedicatory Instruments, and initiating, defending, or intervening in litigation or administrative proceedings affecting the enforcement of the Restrictions or the protection, preservation, or operation of property in the Subdivision, and bringing any other proceedings that may be instituted on behalf of or against the Owners concerning GOMO;
• obtaining and carrying insurance against casualties and liabilities;
• paying the cost of all services rendered to GOMO or its Members and not chargeable directly to specific Owners;
• keeping books with detailed accounts of the receipts and expenditures affecting GOMO;
• maintaining a membership register reflecting the names, property addresses, and mailing addresses of all Members;
• making available upon request to any prospective purchaser, Owner, or first Mortgagee, copies of the Restrictions, the Certificate of Formation, the Bylaws, and other GOMO records for a reasonable charge;
• compromising, participating in mediation, submitting to arbitration, and otherwise adjusting any claims in favor of or against GOMO; and
• commencing or defending any litigation in GOMO's name with respect to GOMO.

4.18 Accounts and Reports

The following management standards of performance will be followed unless the Board by resolution specifically determines otherwise:

• Accrual or cash accounting, as defined by generally accepted accounting principles, will be employed.
• Accounting and controls should conform to generally accepted accounting principles.
• Cash accounts of GOMO will not be commingled with any other accounts.
• No remuneration without full disclosure and prior agreement of the Board, or as contained in a written management contract, will be accepted by the managing agent from vendors, independent contractors, or others providing goods or services to GOMO, whether in the form of commissions, finder's fees, service fees, prizes, gifts, or otherwise.
• Any financial or other interest that any Director, or the managing agent, may have in any firm providing goods or services to GOMO will be disclosed promptly to the Board.
• An annual report consisting of at least a balance sheet, an operating (income) statement, and a statement of changes in financial position for the fiscal year will be prepared as soon as practicable after the close of the fiscal year and made available to all Members at the next annual meeting of Members. The annual report may be prepared on an audited or reviewed basis, as determined by the Board, by an independent, certified public accountant.

5.03 Removal

Any officer elected or appointed by the Board may be removed by a 70% affirmative vote of the remaining Directors if the Board determines that the officer has not acted in the best interests of GOMO.

5.08 Secretary

The Secretary will keep the minutes of the meetings of the Members and the Board in one or more books provided for that purpose and ensure they are posted online after Board approval; give all notices in accordance with provisions of these Bylaws or as required by law; be custodian of the corporate records and the seal of GOMO (if one is adopted) and affix the seal of GOMO to all documents that must be delivered under seal; keep a register of the mailing address of each Member as furnished to the Secretary by each Member; and, in general, perform all duties incident to the office of Secretary and other duties as from time to time may be assigned to the office of Secretary by the President or by the Board.

6.02 Architectural Review Committee

The Board has the authority to act as the Architectural Review Committee, in accordance with the Restrictions; however, such power shall be limited to providing a courtesy review and written response for proposed original construction or modification of a building, Dwelling, Structure, or improvement within the Subdivision regarding compliance or noncompliance with the Restrictions. The Board may, by resolution adopted by a majority of the Directors in office, designate and appoint a subcommittee that will have the authority of the Board with regard to architectural review as defined herein, composed of not less than three Directors and other Committee Members who need not be Directors.

7.02 Checks and Drafts

All checks, drafts, or orders for the payment of money, notes, or other evidences of indebtedness issued in the name of GOMO must be signed by the officer(s) or agent(s) of GOMO established by Board resolution from time to time. In the absence of a delegation of authority by the Board, these instruments will be signed by any two officers of the Board.

7.04 Gifts to GOMO

The Board is authorized to accept, on behalf of GOMO, a contribution, gift, bequest, or devise for the general purposes or for any special purpose of GOMO. The Board is not obligated, however, to accept, and is authorized to reject, any gift tendered or offered to GOMO.

8.01 Books and Records

GOMO shall make its books and records including financial records, open to and reasonably available for examination by an Owner, or a person designated in a writing signed by the Owner as the Owner's agent, attorney, or certified public accountant, and such books and records may be inspected for any proper purpose, at any reasonable time, and upon reasonable notice. GOMO may levy a reasonable charge for copies that it provides of the books and records.

9.01 Powers of GOMO

GOMO will have all the powers of a non-profit corporation chartered in the state of Texas pursuant to the Texas Business Organizations Code and Chapter 202 of the Texas Property Code (as amended or any successor statutes).

12.01 Amendments to Bylaws

These Bylaws may be altered, amended, or repealed and new bylaws may be adopted by a majority vote of the Members at any meeting held in accordance with the provisions of Article 3 of these Bylaws, if at least thirty (30) days written notice is given to the Members in advance of the meeting. The notice must state verbatim the content of the proposed alterations, amendments, repealing language, or new bylaw provisions to be presented for consideration at the meeting.