Shares & Voting

Two of the most commonly misunderstood practices of Arden Beaches, Inc. are the selling of 'shares' and the voting practices to which those shares entitle their shareholders. Although the following test is not a definitive explanation of both of these practices, we wanted to try to cast some light on both subjects so that both the residents lcurrently iving within Arden, as well as anyone considering the purchase of property within Arden knew how both practices worked.

Buying Shares:

If you had the opportunity to read the history of Arden Beaches, Inc. you will have seen that our beaches weren't always locally owned. In 1976, the Arden Civic Association was able to purchase these amenities through the creation of Arden Beaches, Inc. and it has operated independently ever since. Prior to that purchase and, unfortunately, somewhat afterward, outside entities tried to gain 'control' of the governing body that controlled these property locations for the betterment of their endeavors. For instance, in one situation, a land developer who did not live in this community, sought to hold a board member position to help steer Arden Beaches, Inc. decisions in a manner that would personally benefit his company. To that end, Arden Beaches, Inc. set up specific clauses in its By-Laws that mandated ownership of property as well as membership in Arden Beaches, Inc. (through ownership of shares) to be able to act in regard to voting and steering activities that affected the Board of Directors.

Ultimately, it was decided that any owner of a residential lot shown upon the sub-division plat of Sunrise Beach may contribute money to the Corporation and thereupon receive a membership certificate in the Corporation. In the current situation, it is commonly known that a contribution of $50.00 will purchase a single share. Also, one share will be provided to those qualified owners who serve as board members for a minimum of one term of two years and do not already have membership certificates. The purchased shares are lifelong and are not bound to the owner/purchaser, they may be transferred by the owner to any property owner of a residential lot shown upon the sub-division plat of Sunrise Beach by writing a request to the Corporation for proper recording on the Corporate records. What this means is, if you want to transfer your shares to your neighbor, or if you are selling you house and you want to transfer them to the new owner, you may do so by writing to the Corporation and submitting the request to be formally recognized.

Shareholder Voting:

Purchasing shares is as simple as owning property within Arden and submitting your money, and request, to Arden Beaches, Inc.  Unfortunately, what most people don't realize is the simplicity of what those shares entitle their owner to do. First off, most people assume that a wealthy resident could monopolize the voting through their ability to purchase shares. However, what is little knows is that the Arden Beaches, Inc. By-Laws enforce fairnes by maintaining that no member(s) singly or jointly, owning one lot as described in Article III, Section 1 of the By-Laws, will ever be permitted to collectively own more than five (5) percent of the total outstanding votes. This means that noone may ever hold a monopoly on voting.

Each year, usually in January, Arden Beaches, Inc. holds their annual Shareholders Meeting. At this meeting, many subjects are discussed and addressed, but most importantly votes are taken on a number of issues. Only shareholders are allowed to vote as they have financially contributed to the maintenance of Arden Beaches, Inc. and the ownership of thier shares entitles them to state their voice in the decisions that need to be made. If you hold one share, you are allowed one vote. If you hold multiple shares, you are allowed multiple votes. Again, you are not allowed any more votes than shares that you hold, as to ensure the fairness of the process. Usually, votes are in relation to replacing Board Member seats that are up for their rotating election cycle, but issues of environmental impact, financial well being, property maintenance, financial investment, changes to the governing By-Laws, etc. can be voted upon at this meeting. The intent is to remain transparent and allow the voice of the shareholders to be heard.

Proxy Voting Ballot

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Arden Beaches, Inc.

P.O.Box 365

Crownsville, MD 21032

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P.O.Box 241

Crownsville, MD 21032

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