Vestnik 2015 09 09 by SPJST

Volume 103 Number 36

ˇ ´ VESTNIK S P J S T Benevolence

H E R A L D

★ Humanity

Special Structure Committee presents proposed by-law recommendations

Editor’s Note: This week’s Vestnik features the proposed by-law recommendations from the SPJST Structure Committee. The recommendations are found on pages 6 to 28 and are presented in two documents: “Proposed Recommendations for By-Laws of SPJST” and “SPJST Operations Manual.” Below are questions and answers about the SPJST Structure Committee. This information was presented to delegates at the 31st SPJST Convention in 2012 and has been updated for this week’s Vestnik.

How did the Special Structure Committee get its start? The Special Structure Committee came into being as a result of actions taken by delegates to the 2004 SPJST Convention. Quoting from the proceedings of the 2004 SPJST Convention, “Monta Foster (185) stated that the way we were

Continued on Page 3.

SPJST Special Structure Committee and By-Law Committee members meet to deliberate proposed by-laws for the 2016 Convention. Pictured are, left to right, Kay Lynn Kovar of Lodge 25, Ennis (By-Law Committee); Susan Skrabanek of Lodge 17, New Tabor (Special Structure Committee/Insurance Committee Chairman); Beverly Teplicek of Lodge 49, Rowena (By-Law Committee Secretary); Ronnie Rieger of Lodge 29, Taylor (Special Structure Committee/By-Law Committee Chairman); District Two Director Jesse Pospisil; and Joe Siptak of Lodge 4, Hallettsville (ByLaw Committee).

September 9, 2015

Good Governance Practices Ensure Growth and Change

ISSN —07458800

organized now was acceptable but might not be in the future. We needed to see what structure was necessary to determine needs, so we could discuss it in the 2008 Convention and decide in the 2012 Convention. We must not make changes for the sake of making changes. We should have information to make a knowledgeable decision. Justine Yeager (84) moved that we accept Monta Foster’s (185) recommendation. Leo Jares (8) seconded this motion and stated that we need further study before jumping into something we may regret later . . . Convention Chairman Donnie Victorick (9) stated the motion was to put the redistricting aside, defer to the Supreme Lodge for study, with professional consultants, and for them to report at the next Convention. Justine Yeager (84) confirmed this statement and the motion carried.”

★ Brotherhood

to the younger consumers that repreDear Members of SPJST, Congratulations to your leadership sent the future of your society rather team on its efforts to modernize your than welcome mats. Your proposed changes to elect society’s decision-making process to reflect the realities faced by fraternal fewer officers will result in a much life insurers today. We realize that more effective and accountable reporting process. Unfortumany years of work nately, many have gone into the fraternals still have recommended by-law what we call “dotted changes that your lines” of authority and leadership team is responsibility from proposing for your senior managers 2016 convention. As around the CEO to the CEO of the Amerthose people that vote ican Fraternal Alwhich creates no liance, I have been sense of accountabilinvited to address and ity. Who is your boss? attend many member Who does your boss society conventions report to? These and board meetings. should not be vague One of my greatest questions, and without concerns is the antiAmerican Fraternal Alliance quated and ineffective President and CEO Joseph J. clarity, elected senior policies, rules, and Annotti speaks at the SPJST managers can be procedures many fra- Awards Banquet in 2011 at the placed in an almost ternals use to make Frank W. Mayborn Convention untenable position. While the best pracdecisions about the di- Center in Temple. tice is to have an rection of the organization. These concerns become even elected Board of Directors be responmore acute at conventions where per- sible for hiring one single leader (a paid sonalities and popularity outweigh pro- top staff person called the President or CEO who hires his or her executive fessionalism and pragmatism. Processes that worked for fraternals team), having fewer elected officers is decades ago are in many cases no a good first step toward moving SPJST longer viable and require significant closer to an ideal governance structure. updating. Fraternals that refuse to mod- Having fewer elected officers means ernize governance structures and deci- SPJST will have a better system in sion making procedures find place for hiring a qualified managethemselves on a steady path to obscu- ment team. This same scrutiny should rity and irrelevance because they are no be used when electing board members. longer able to effectively manage con- As delegates, it is your duty to learn stantly changing regulatory compliance about the qualifications needed on your requirements and consumer needs. For board, and it is up to you to elect qualinstance, while younger consumers are ified people. looking for ways to give back to their While SPJST has been moving in communities, fraternal chapters are the right direction for a few years now, often structured and operated in a way your society – along with many other that has little appeal to them or makes fraternals dealing with outdated govit difficult for them to participate. By- ernance structures – came perilously laws that are overly complex, restricContinued on Page 3. tive, or prescriptive serve as roadblocks

Wednesday, September 9, 2015

Editor’s Note

ˇ ´ VESTNIK

Please save this Vestnik!

SPJST HERALD

SPJST HOME OFFICE PO Box 100 • Temple, Texas 76503 800-727-7578 • 254-773-1575 Fax: 254-774-7447 www.spjst.org VESTNIK EDITOR/ DIRECTOR OF COMMUNICATION MELANIE ZAVODNY, FIC Office: 254-773-1575 • Mobile: 254-534-0807 VESTNIK Fax: 254-773-8087

email: m e l a n i e z @ v v m . c o m

SUPREME LODGE PRESIDENT BRIAN VANICEK, FIC Office: 254-773-1575 Mobile: 254-534-2902 • Home: 254-985-0007 email: vanicek@spjst.com VICE PRESIDENT CLIFTON COUFAL Office: 254-773-1575 Mobile: 254-931-5231 email: cliftonc@spjst.com

SECRETARY-TREASURER LEONARD D. MIKESKA, FIC Office: 254-773-1575 Mobile: 254-721-4739 • Home: 254-778-3720 email: leonardm@spjst.com

DISTRICT ONE DIRECTOR/CHAIRMAN DONNIE VICTORICK, FIC, CFFM P.O. Box 85, Snook, Texas 77878-0085 Home: 979-272-3265 • Mobile: 979-224-3125 email: dv.aggie@verizon.net DISTRICT TWO DIRECTOR JESSE POSPISIL 4710 FM 1331, Taylor, Texas 76574-2164 Home: 512-365-1110 • Mobile: 512-826-7371 email: jlpospisil@yahoo.com

DISTRICT THREE DIRECTOR JOHN ENGELKE 6475 Gholson Road • Waco, Texas 76705-5330 254-799-4247 email: john.engelke@hotmail.com DISTRICT FOUR DIRECTOR BILLY ROLLWITZ, FIC, CFFM P.O. Box 195, Rowena, Texas 76875-0195 Home: 325-442-3141 • Mobile: 325-277-5362 Office: 325-442-3038 • email: brollwitz@verizon.net

DISTRICT FIVE DIRECTOR LARRY W. PFLUGHAUPT, FIC 1243 Clovis Rd, Houston, Texas 77008-6232 Home: (713) 864-2163 • email: lpflugh@aol.com DISTRICT SIX DIRECTOR KAREN KASPAR, FIC, CFFM 8550 N. State Highway 71 El Campo, Texas 77437-9819 Home: 979-543-2532 • Mobile: 979-332-1616 email: k-kaspar@hotmail.com

DISTRICT SEVEN DIRECTOR BOB J. BAYER, FIC 1100 Hospital Blvd, Floresville, Texas 78114-2912 Home: 830-393-9073 email: blackbayer39@hotmail.com FRATERNAL FIELD MANAGERS DISTRICTS ONE/TWO/THREE Philip (Phil) McBee, FICF, CFFM Mobile: 325-647-1949 • Fax: 325-784-7448 email: philipmcbee@aol.com DISTRICTS FOUR/SEVEN Bobby Davis, FICF, CFFM Mobile: 325-450-3748 • Fax: 325-657-2003 email: bgdsr2428@aol.com DISTRICTS FIVE/SIX Delisle Doherty Mobile: 254-239-9616 • Mobile: 832-232-2049 email: delisled@spjst.com

FINANCIAL SECRETARY ROY VAJDAK 254-773-1575 email: royv@spjst.com

STATE FRATERNAL ACTIVITIES COORDINATOR FRANK HORAK Office: 254-773-1575 • Mobile: 254-534-0681 email: frankh@spjst.com STATE YOUTH DIRECTOR LYNETTE TALASEK Office: 254-773-1575 • Mobile: 254-931-0639 email: lynettet@spjst.com

DISTRICT YOUTH COUNSELORS District One - Sharon Russell, 1292 CR 441, Dime Box, Texas 77853 • 979-884-0807 - sharonrussell28@yahoo.com District Two - Patsy Koslovsky, 764 S. St. Joseph Road, Burlington, Texas 76519-3108 - 254-985-2396 patsyk2011@yahoo.com District Three - Kay Weeks, 4203 Treehaven Ct, Arlington, Texas 76016 • 817-896-5277 - kgweeks@att.net District Four - Pam Lehmann, PO Box 637, Tahoka, Texas 79373-0637 - 806-561-5105 - plehmann@poka.com District Five - Barbara Linney-Gonzales - 6043 Pineway Blvd., Houston, Texas 77023-6510 - 713-649-6138 - district5dyc@aol.com District Six - Lisa Bubela, 1405 Divide Street, El Campo, Texas 77437 - 979-543-7120 lisa_bubela@yahoo.com District Seven - Theresa Haag, 1334 Rivercrest Drive New Braunfels, Texas 78130 - 830-625-8262 theresa.haag686@gmail.com BY-LAW COMMITTEE District One - Richard Ford, 2392 CR 424, Dime Box, Texas 77853 - 979-884-1451 - dimebox5@aol.com District Two - Ronnie Rieger, 350 Rieger Road, Coupland, Texas 78615 - 512-365-2000 - 512-848-2416/cell RonnieR1056@yahoo.com District Three - Kay Lynn Kovar, 3303 West Lake Bardwell Drive, Ennis, Texas 75119 - 972-875-6827 District Four - Beverly J. Teplicek, 817 FM 381, Rowena, Texas 76875 - 325-442-4841 - bjtep@verizon.net District Five - Mildred Holeman, 4001 North Shepherd, Suite 112, Houston, Texas 77018 - 713-683-0018 - mmholeman@yahoo.com District Six - Joe Siptak, 2312 Norvell, Bay City, Texas 77414 - 979-244-4415; 979-479-0056 cell District Seven - Oscar Korus, 2565 Bruce Road, Poteet, Texas 78065 - 830-391-4169 - oscarkorus@gmail.com

FINANCE COMMITTEE District One - Thomas Cannon, P.O. Box 372, Caldwell, Texas 77836 - 979-567-4264 - jtcannon60@hotmail.com District Two - Edwin Pechal, 10660 State Highway 53, Temple, Texas 76501 - 254-985-2282 Edwin_Pechal@yahoo.com District Three - Michael Galler, 526 Karen, Waco, Texas 76706 - 254-662-4934 - mgaller@brazoselectric.com District Four - Herman D. Weise, 6006 FM Highway 765, San Angelo, Texas 76905 - 325-651-8550 - hdweise@zipnet.us District Five - Marceil Malak, 7444 Meiners Road, Ledbetter, Texas 78946-5118 - 979-249-5940 malaktax@gmail.com District Six - Glenn Kaminsky, 902 River Oaks Court, East Bernard, Texas 77435 - 979-335-4461 gkamink@live.com District Seven - Roy Haag, 1334 Rivercrest Drive, New Braunfels, Texas 78130-3438 - 830-625-8262 39roha@gmail.com

INSURANCE COMMITTEE District One - Susan Skrabanek, 2657 FM 166, Caldwell, Texas 77836 - 979-272-3440 District Two - Dolores Skrabanek, 13107 State Highway 53, Temple, Texas 76501 - 254-985-2344 District Three - Daniel Roznovsky, 2513 Custer Court, Irving, Texas 75062 - 972-252-6763 District Four - Leonard Jansa, 6617 Plainview Drive, San Angelo, Texas 76905 - 325-234-8117 District Five - Helen Hegwood, 6702 Lindy Ann Lane, Houston, Texas 77008 - 713-864-0489 District Six - Charles Bucek, P.O. Box 147, East Bernard, Texas 77435 - 979-335-4118 District Seven - Wendy Pruski, 3895 CR 430, Pleasanton, Texas 78064 - 210-535-4916

PUBLICATION COMMITTEE District One - Floyd Kostelka, 1914 CR 403, Dime Box, Texas 77853 - 979-540-8531 District Two - Tammy Cannon, 141 Meadow Park Drive, Georgetown, Texas 78626 - 512-948-5339 - tcannon4715@yahoo.com District Three - Bessie Petr, 5406 Morningside, Dallas, Texas 75206 - 214-826-3557 District Four - Sharon Hohmann, 222 Crestwood Drive, San Angelo, Texas 76903 - 325-651-5884 District Five - Lorenda Baldwin, 219 CR 47, Angleton, Texas 77515 - 979-922-1279 District Six - Helen Kelner, 911 Avenue K, Rosenberg, Texas 77471 - 281-342-2624 District Seven - Jarolyn Popp, 447 Shady Hollow, New Braunfels, Texas 78132 - 830-964-5135 HUMAN RESOURCES DEBBIE KLINKOVSKY 254-773-1575 • email: debbiek@spjst.com

VĚSTNÍK

lease save this Vestnik and refer back to it. It is a very important issue that includes the work of the SPJST Special Structure Committee. The idea for a Special Structure Committee was introduced and approved by delegates at the 2004 Convention. The Committee formed in 2008 and has met in person and corresponded through teleconference and email many times since then. Committee members have studied and reviewed SPJST ByLaws and the organization’s structure. Consultants have advised us. Members have provided feedback. Delegates at the 2012 Convention approved formatting the current bylaws into two documents: SPJST By-Laws and Operations Manual. Recently, the Special Structure Committee was presented with information from the American Fraternal Alliance regarding the Corporate Governance Annual Disclosure Model Act (CGAD) that was adopted by the National Association of Insurance Commissioners (NAIC) in November 2014. With this, the NAIC made an affirmative decision not to exempt small companies - including fraternals like SPJST - from any corporate governance requirements. The National Association of Insurance Commissions (NAIC) is expecting that all states - including Texas - will start requiring disclosures by 2019. Much of this is due to last decade’s financial and economic crisis as the essential cause was appallingly bad risk management by the leaders of some of the largest financial institutions in the United States and Europe. A new “dictionary” of insurance buzzwords and acronyms like risk-focused, ORSA, enterprise risk, ERM, and suitability was also created.

An article entitled “ERM, ORSA and Corporate Governance: The Small Company Challenges” by Carol S. Stern appears on pages 29 and 30. This article explains the model act and the requirements. This is a lot of information to digest. So what does all of this mean for SPJST? If the Texas legislature does adopt the NAIC’s Corporate Governance Annual Disclosure Model Act, SPJST will submit an annual report to regulators that documents established key governance principles. (Examples are listed in the article on page 29.) The Special Structure Committee took all of this into consideration when presenting its final document that appears on pages 6 to 28. I ask you to please read this Vestnik. We want your feedback on the proposed by-laws and the operations manual. Please feel free to share your thoughts with the Vestnik and/or make recommendations to the ByLaw Committee members listed in the yellow box to the left. Recommendations to the current by-laws (available by contacting the Home Office) and to the Special Structure Committee proposal must be received by April 13, 2016. The procedure is outlined on page 31. A blue box appears on page 28. This is a list of important dates to remember for the 2016 Convention. It lists deadlines for candidacy announcements and recommendations. The 32nd SPJST Convention will convene on Monday, June 13, 2016, at Killeen Civic and Conference Center in Killeen, Texas. Stay tuned to the weekly Vestnik for updates and information between now and the Convention. Thank you for your membership, support, and interest in SPJST. —SPJST—

VĚSTNÍK, (USPS 658480) is published weekly except the third week of October and the fourth week of December by VĚSTNÍK, P.O. Box 100, Temple, TX 76503-0100. Subscription rates are $25 per year for non-members. Members’fees are paid as part of the insurance fee collected by SPJST, 520 North Main, Temple, TX 76501. Second-class postage paid at Temple, TX and additional mailing offices. The exchange of opinions, ideas and information is a vital aspect of our fraternal Society and enables us to make more informed decisions. The views expressed by writers in the Vestnik do not necessarily represent the views of the Editor or SPJST management. Please sign all correspondence intended for publication. POSTMASTER: Send address changes to VĚSTNÍK c/o Financial Secretary Roy Vajdak, P.O. Box 100, Temple, TX 76503-0100.

VĚSTNÍK

You’re Invited! District Meetings and Fall Fun Days

All members are invited to and encouraged to attend their district meetings/fall fun days. Each district will host a meeting in September, October, or November. Please check the Vestnik for more information and a schedule of each meeting/fun day.

Sunday, September 13 District Two Fall Meeting/Fun Day Lodge 47, Seaton

Sunday, September 13 District Five Fall Meeting/Fun Day Lodge 88, Houston (hosted by Lodge 142, Houston)

Sunday, September 13 District Six Fall Meeting/Fun Day St. John’s Catholic Parish Hall • Taiton

Saturday, October 3 District Four Fall Meeting/Fun Day Lytle Land and Cattle Company • Abilene

Sunday, October 18 District One Fall Fun Day/Meeting Lodge 186, Caldwell

Sunday, October 25 District Three Fall Meeting/Fun Day Location to be announced

Sunday, November 8 District Seven Fall Meeting/Fun Day Lodge 107, Floresville

Good Governance

Continued from Page 1.

close to ruin a few years ago. Fortunately, your team managed to right the ship and is now in a much stronger financial position. Even more fortunately, the leadership recognizes the need to improve its decision-making process so that the mistakes of the past are not repeated. Incorporating good governance practices is the first step to ensuring that history does not repeat itself and that SPJST will be positioned to grow and change and be able to deliver on the promises made to your policyholders 10, 20, 50 years from now. In my experience, regulators from all over the US are taking a close look at fraternals, and your society should take bold steps to make changes now -

your way - before a regulator does it for you. Respectfully, Joseph J. Annotti President and CEO American Fraternal Alliance

About the American Fraternal Alliance The American Fraternal Alliance unites nearly 70 not-for-profit fraternal benefit societies operating in 50 states, the District of Columbia and Canada. Alliance member societies represent nearly 10.5 million individuals, making it one of America’s largest member-volunteer networks. Through advocacy, public policy and providing opportunities for a broader understanding of fraternal benefit societies as financial providers and community service activists, the Alliance serves as a vital and valued resource. —SPJST—

Wednesday, September 9, 2015

Structure Committee

Continued from Page 1.

When was the Structure Committee designated? As stated in the By-Laws of the SPJST, “The seven duly elected directors have constant control and supervision over all the management, business transactions, and general progress of our Society. The directors of the Supreme Lodge have the responsibility to see that all by-laws, decisions of conventions, and the Supreme Lodge are strictly complied with.” The first to follow-up activity by the Supreme Lodge on the restructuring matter appears in the minutes of a January 18, 2008, Special Called Meeting of the Supreme Lodge. The sole reference to this project reads as follows: “It was agreed to seek a professional consulting firm to work with a committee for possible restructuring ideas.” During this same meeting, Supreme Lodge President Brian Vanicek was directed to consult with the National Fraternal Congress of America (now called American Fraternal Alliance), the nationwide fraternal trade association, to get their recommendation on a consultant to confer with on this matter. President Vanicek was also requested to organize a representative committee to work on this project. President Vanicek was requested to provide an update on the activities of the Special Structure Committee at the April 15-17 2008, meeting of the Supreme Lodge.

How were members of the Special Structure Committee designated? It was determined in the Special Called Meeting of the Supreme Lodge on January 18, 2008, that the committee would consist of the chairman of each of the four standing committees, along with the Supreme Lodge Chairman, Supreme Lodge President, and Supreme Lodge Vice President. Those individuals were: By-Law Committee Chairman Ronnie Rieger (District Two) Finance Committee Chairman Dewyan Weise (District Four) Insurance Committee Chairman Susan Skrabanek (District One) Publication Committee Chairman Jarolyn Popp (District Seven) Supreme Lodge Chairman Donnie Victorick Supreme Lodge President Brian Vanicek

Supreme Lodge Vice President Gene McBride (now Clifton Coufal)

Prior to the first meeting of the Special Structure Committee, Supreme Lodge Chairman Victorick requested that four additional members be added to the committee to ensure broader geographic representation and expertise in considering the matter of restructuring. These individuals were:

Larry Laznovsky (District Three) (passed away in 2011; delegates at the 2012 SPJST Convention appointed Mary Steinman to replace Brother Laznovsky) Lonnie Lostak (District Five) Lisa Bubela (District Six)

Jerry Sijansky (District Seven)

The first meeting of the SPJST Special Structure Committee was held on Friday, March 14, 2008, at the SPJST Home Office and via telephone conference. Donnie Victorick was elected to serve as Chairman of the Special Structure Committee at the first meeting. Vestnik Editor/Director of Communication Melanie Zavodny was elected to the committee at the first meeting. She was also designated to serve as secretary.

How was the Special Structure Subcommittee selected? It was apparent early on that it would be difficult and expensive for the entire committee to meet on a regular basis. The subcommittee was formed at the April 1, 2008, meeting of the Special Structure Committee to provide routine in-depth assessments and suggestions to the structure of the existing By-Laws. The subcommittee consisted of Special Structure Committee Chairman Donnie Victorick, Committee Secretary Melanie Zavodny, Brian Vanicek, and Lisa Bubela. Subcommittee members were appointed by Special Structure Committee Chairman Victorick on the basis of their read availability and willingness to serve.

How was the consultant selected? Attorney Todd Martin came highly recommended to SPJST by the NFCA (now American Fraternal Alliance) to serve as a consultant on the project in 2008. He currently serves as outside general counsel to the Alliance. For

Wednesday, September 9, 2015

many years, his primary practice has been devoted to the fraternal system during which time he has provided legal services to more than 35 fraternal benefit societies across the country including several fraternal restructuring projects. In 2014, attorney Kathy Brost was hired as a consultant to review the Structure Committee proposed by-laws that were presented at the 2012 Convention. Ms. Brost has more than 20 years of experience in the financial services industry, 11 as inhouse counsel to the nation’s largest fraternal benefit society, Thrivent Financial for Lutherans (formerly known as Aid Association for Lutherans). Ms. Brost presented several recommendations which were reviewed, considered, and added into the document by the Structure Committee in 2015. When were the Special Structure Committee and Subcommittee meetings held? Special Structure Committee meetings were held at the SPJST Home Office in Temple on: Friday, March 4, 2008 Tuesday, April 1, 2008 Monday, May 5, 2008 Sunday, June 8, 2008 Wednesday, July 29, 2009 Monday, October 12, 2009 Saturday, January 15, 2011 Saturday, June 13, 2015 Saturday, August 15, 2015

Subcommittee meetings were held at the SPJST Home Office on: Monday, April 21, 2008 Monday, April 28, 2008 Tuesday, June 16, 2009 Monday, November 30, 2009 Monday, November 8, 2010 Monday, March 5, 2012 Wednesday, May 13, 2015 Monday, July 13, 2015

A report was presented to the delegates at the 30th SPJST Convention in 2008. The 2012 Convention proceedings from the session with the Special Structure Committee’s presentation appears at right. —SPJST—

PROCEEDINGS of the 31st Conventtion of the SPJST

JUNE 11 - 13, 2012 KILLEEN, TEXAS Pages 16 - 19

Tuesday Morning – Session 6 10:00 a.m. – 11:55 a.m., June 12, 2012

CC Donnie Victorick (9) reconvened the Convention at 10:00 a.m. CVC Leonard Jansa (160) checked with the districts to see if all delegates were seated and ready. CC Donnie Victorick (9) asked the delegation to locate the black notebook that was included in the delegate’s packet, and called the Special Structure Committee (SSC) Members forward: SSC Secretary Melanie Zavodny (246), Brian Vanicek (24), and Lisa Bubela (30). He then relinquished the Chair to CVC Leonard Jansa (160), due to being the Chairman of the SSC. BLCC Ronnie Rieger (29) asked for a report of the SSC. Jarolyn Popp (133) asked why the entire SSC was not asked to come to the stage. SSC Chairman (SSCC) Donnie Victorick (9) stated that it was a matter of seating space, and requested the rest of the committee join them on the stage. These members included Larry Laznovsky (135) who recently passed away, Susan Skrabanek (17), Ronnie Rieger (29), Herman D. Weise (160), Jarolyn Popp (133), Lonnie Lostak (139), Jerry Sijansky (79), and Gene McBride (200). Pat Fowler (25) asked that a replacement for Larry Laznovsky (135) be found. SSCC Donnie Victorick (9) stated that replacing Larry had slipped his mind. He suggested Johnnie Krizan (6) since he had given some input in the past. Johnnie Krizan (6) said he would, but would like the consent of the District III delegates. He had only participated in one meeting and felt that there are a lot of qualified people in District III. He suggested Mary Steinman (154) as Larry’s replacement. Mary Steinman (154) accepted. SSCC Donnie Victorick (9) stated that after Larry’s death, no further business took place. Mary Steinman (154) clarified her understanding that we would only be voting on the

format, and not the contents. The wording will be voted on at the 2016 Convention. The document does not have to be read word-forword. SSCC Donnie Victorick (9) stated that it had been difficult to get the entire committee together, so they formed a sub-committee who then brought the information to the rest of the committee. He stated that everything in the notebook is a proposal, and is not to be taken as “gospel”. He assured the delegation that nothing of value was left out. SSC Secretary Melanie Zavodny (246) explained that the first part of the book describes the committee and how it came about. Brian Vanicek (24) as SSC member said that he received a list of questions from District VII and he used that format for the explanation of the committee. He then read the questions and answers for the delegation. SSC Secretary Melanie Zavodny (246) directed the delegation to the pink page in the notebook and explained that the document is organized according to articles, and the name of the articles defines what is included in that section. The committee feels the by-laws are a rather disorganized product of the last 115 years; for example, two articles in the bylaws address the exact same topic. SSC Secretary Melanie Zavodny (246) stated that the committee took the current by-laws, re-organized them, and added an operations manual; but many wanted only one document. As a result, they put together the three-column document to help clarify the proposed recommendations. She referred the delegation to the yellow page in the black notebook with an explanation of the three columns. Brian Vanicek (24) as SSC member stated that the most meaningful changes are the designation of the Chief Financial Officer position and adding duties for each officer. Lisa Bubela (30) as SSC member asked that the delegates read what is presented to them with an open mind and to think about what they are reading. Justine Yeager (84) remembers the discussion from the 2004 Convention and is surprised to see all this work. She questioned why the SSC did not get with the By-Law Committee. SSCC Donnie Victorick (9) answered that the SSC met with the By-Law Committee for the first time in September and noted that this committee has not been reimbursed for its expenses. Mary Steinmen (154) stated that she understands Justine’s comments but questions why this committee is presenting the changes instead of the ByLaw Committee. SSCC Donnie Victorick (9) stated that they will present it, but the SSC wanted to explain, clarify, and provide background information to the delegates. BLCC Ronnie Rieger (29) stated that he asked the SSC to help explain and answer questions. Susan Skrabanek (17) suggested that several times she has gone to the microphone and made the statement, “this needs to be in an operation manual and not the by-laws”. She questioned whether the by-law and procedures would become Article 24, and if they will be up for debate every four years. Johnnie Krizan (6) echoed Justine Yeager’s (84) comments about the size and scope of this.

VĚSTNÍK

He feels that at the 2004 Convention Monta Foster, (185), who has since passed away, was concerned that the electing of officers would become outdated. Yvonne Marcaurele (30) applauded the committees for all their thought, effort, education, and experience. She feels we have to stay current, and that we need changes to keep up in the new century. Daniel Roznovsky (183) stated that we need to start today for the next convention. CVC Leonard Jansa (160) restated that if this is approved it would be voted on during the 2016 Convention. BLCC Ronnie Rieger (29) stated that not just the delegates, but all members would have the right to discuss and make recommendations to the by-laws over the next four years. Al Kercho (92) reminded the delegation that the committee was acting on the recommendations of outside consultant, Todd Martin, General Counsel to the American Fraternal Alliance, who is an expert. SSCC Donnie Victorick (9) explained that after the consultant made his first recommendation, the committee did a “backflip”. It had been recommended that there were no elected officers and 90% of the bylaws did not belong. The committee tried to meet in the middle and put together something the delegation would accept. The committee worked to “clean up” and simplify the by-laws. Rita Spinn (80) commended the committee, but asked if the operation manual would be included or would it be a separate manual. SSCC Donnie Victorick (9) clarified that the operation manual would be included as a separate section of the by-laws. BLCC Ronnie Rieger (29) explained that the delegates will still get the right to vote on it. Lynette Talasek (47) questioned whether the documents will be together or separate. SSCC Donnie Victorick (9) explained that it would be a separate living document that can be changed by members. Any changes would be published in the Vestnik three to four times giving members time to respond. BLCC Ronnie Rieger (29) stated that they felt too much authority was being taken away from the delegates, so it was put into one document. Susan Skrabanek (17) as SSC member recommended the operation manual should be separate from the by-laws. An operation manual can be changed anytime when needed, as opposed to by-laws that can only be changed every four years. Lynette Talasek (47) moved to separate the by-laws from the operations manual. Justine Yeager (84) seconded the motion. Mary Steinman (154) said that she is new on the committee, but we will have four years to look it over and make recommendations. Johnnie Krizan (6) stated that as a Director he will do what the delegates want. He feels that most large fraternals are run like Corporate America, and we would like to have the best of both worlds; he feels the delegates should retain authority and elect officers and prescribe duties. He worries that the Supreme Lodge Officers would be able to change their own duties. SLS-T Leonard Mikeska (200) stated a concern that there is a contractual reason to keep Article 122, 123, & 125 in the (proposed new) by-laws. CVC

VĚSTNÍK

Leonard Jansa (160) called for a vote by show of hands. It was too close to call from the podium. Tellers were asked to take a tally of the districts. Results are: District I II III IV V VI VII Total

Motion passed.

For 22 32 14 14 42 27 13

164

Against 4 25 34 4 1 8 6 82

BLCC Ronnie Rieger (29) stated that now we will be voting on the proposed by-law recommended format and the organization of it. Mary Steinman (154) asked for clarification: voting only on format, not the wording. BLCC Ronnie Rieger (29) stated that is correct. SSCC Donnie Victorick (9) stated that what is approved at this convention will be incorporated at the next convention. Johnnie Krizan (6) referred to the last sentence of the second paragraph on the first page of the black notebook. These changes will be dealt

with at the next convention. Mary Steinman (154) stated that the committee will go back and send out the revised by-laws as soon as possible. BLCC Ronnie Rieger (29) stated that the only changes that would be made are the by-laws that were changed at this convention. Justine Yeager (84) asked if the by-law changes will be re-incorporated. SSCC Donnie Victorick (9) answered that it would be. CVC Leonard Jansa (160) called for vote by show of hands; motion passed. SSCC Donnie Victorick (9) thanked SSC Secretary Melanie Zavodny (246) for going above and beyond the call of duty and for working in her spare time to get it done. CVC Leonard Jansa (160) dismissed the By-Law Committee Members and the SSC Members from the podium. Leo Jares (8) commended everyone who took part in this very important issue, and asked that everyone involved be given a big hand. ABBREVIATION KEY: CC - Convention Chairman CVC - Convention Vice Chairman SSC - Special Structure Committee BLCC - By-Law Committee Chairman SLS-T - Supreme Lodge Secretary-Treasurer —SPJST—

Special Structure Committee members are pictured after a meeting in 2008. Seated, front, left to right, Brian Vanicek, Susan Skrabanek, Donnie Victorick, and Lisa Bubela. BACK: Ronnie Rieger, Jarolyn Popp, Jerry Sijansky, Dewyan Weise, Melanie Zavodny, and Gene McBride. Not pictured are Lonnie Lostak, Larry Laznovsky (passed away in 2011; replaced by Mary Steinman, not pictured, at 2012 Convention); and Clifton Coufal (replaced Gene McBride who retired by 2014). BELOW: Special Structure Subcommittee members meet to deliberate the by-laws and operations manual.

Wednesday, September 9, 2015

American Fraternal Alliance Executive Vice President Allison Koppel, far right, of Oak Brook, Illinois, discusses SPJST’s by-laws with members of the Supreme Lodge, Special Structure Committee, and By-Law Committee at a meeting on August 15, 2015, at the SPJST Home Office in Temple. Also pictured are Dewyan Weise (Finance Committee Chairman/Special Structure Committee), left, and Oscar Korus of Lodge 107, Floresville (By-Law Committee).

SPJST Officers review the Special Structure Committee’s proposed bylaws. Pictured, left to right, are Financial Secretary Roy Vajdak, Supreme Lodge Secretary-Treasurer Leonard Mikeska, and Supreme Lodge Vice President Clifton Coufal. Finance Committee Chairman/Special Structure Committee member Dewyan Weise is pictured far right.

Special Structure Subcommittee members welcome Allison Koppel to the SPJST Home Office. Ms. Koppel serves as executive vice president for the American Fraternal Alliance in Oak Brook, Illinois. She participated in the Special Structure Committee meeting held August 15, 2015. Pictured, left to right, are Secretary Melanie Zavodny, Chairman Donnie Victorick, Ms. Koppel, Brian Vanicek, and Lisa Bubela.

Wednesday, September 9, 2015

SPECIAL STRUCTURE COMMITTEE’S PROPOSED RECOMMENDATIONS FOR BY-LAWS OF SPJST Founded at La Grange, Texas July 1, 1897

ARTICLE I NAME The name of this Fraternal Benefit Society is SPJST, originally chartered as Slovanska Podporujici Jednota Statu Texas (Slavonic Benevolent Order of the State of Texas {SPJST}). ARTICLE II PRINCIPAL OFFICE The principal office (Home Office) of SPJST shall be located in Temple, Texas. ARTICLE III MISSION AND VISION STATEMENTS Section 1. Mission. Insuring and enriching lives.

Section 2. Vision. Our vision is to provide a wholesome family environment; to encourage cherished Czech traditions; and to provide high quality, competitive life insurance for our members.

ARTICLE IV FRATERNAL BENEFICIARY SOCIETY SPJST is a 501(c)(8) non-profit corporation formed, organized, and incorporated under the fraternal benefit society laws of the State of Texas; and carried on solely for the mutual benefit of its members and their communities and beneficiaries; and having a lodge system, with a representative form of government. SPJST shall have all the powers granted to it by law. SPJST will strive to be a financially strong fraternal benefit society and to provide high quality, competitive life insurance and value-added benefits to its members. SPJST will conduct its affairs in a manner that is perceived as a good corporate citizen.

ARTICLE V MEMBERSHIP Section 3. Application for Membership. Individuals may become members if they meet the requirements for membership established by SPJST, apply for membership upon a form in use by SPJST, and are accepted into membership in accordance with the rules, procedures, and rituals of SPJST. All members must be citizens or legal residents of the United States.

Section 4. Local Lodge Membership. The local lodge has the right to determine whether it will accept an applicant for membership into the lodge. Upon receipt of notification of a new candidate for membership, the local lodge must vote to accept or to reject the candidate no later than the second regularly scheduled meeting after application is accepted. The candidate for membership must receive a majority vote of those present and voting to be accepted as a member. The local lodge secretary notifies the candidate whether he/she is accepted or rejected. If rejected, the member may begin application to another lodge. No one may hold membership in more than one SPJST lodge.

VĚSTNÍK

Section 5. Membership Classes. There shall be the following classes of members: (a) Adult Member.

(1) A person of 16 or more years whose application has been accepted and approved and to whom there has been issued a certificate of membership and insurance or annuity which is in force or who is receiving a settlement agreement benefit by reason of such insurance or annuity. It is expressly determined that in this latter event, the owner of the insurance or annuity, if different from the insured, shall have no privileges of membership and the insured will retain these rights.

(2) A person may become a member by purchasing an annuity in a minimum amount as set by the Supreme Lodge and pays his or her local lodge dues and assessments, if any, annually in advance.

(3) Further, it is determined that in the event that a third party owner surrenders the insurance or annuity, the insured who is the member shall have his/her membership privileges imparted by the surrendered insurance or annuity. (4) Members upon reaching age 16 automatically become adult members with all rights of adult members by complying with all requirements of adult membership.

(5) Adult members whose life insurance certificates have matured based on the applicable mortality table shall remain members of SPJST, with all the privileges and benefits of active members and shall not be required to pay any dues or assessments.

(6) An adult member suspended for non-payment of premiums, dues, and assessments, if any, loses his/her right to vote and is not eligible for election.

(7) Adult members are eligible for election as officers of local lodges, in the district, delegates, as committee members, and as members of the Supreme Lodge.

(b) Youth Member. SPJST may insure the lives of children. Such insurance shall be issued upon the application of an authorized adult (who shall not by reason thereof, nor by reason of any benefit providing for waiver of premium, become a member) who has an insurable interest. At insurance age 16, the insured youth shall become an adult member.

(c) Associate Member. An associate member is a person who holds an SPJST certificate purchased through an outside agency under contract with SPJST selling group insurance. This member will not have SPJST or local lodge privileges, benefits, or voting rights. (d) Social Member.

(1) A social member is a member whom a lodge votes in as a social member, who completes a social membership form, and who pays his/her membership dues and assessments, if any, to the local lodge.

(2) A social member is not eligible to vote or hold office; however, a social member may, at the discretion of the local lodge, serve on an appointed committee with the inherent right to deliberate and vote on that committee.

(3) A social member must pay for the Vestnik if he/she desires to receive it.

VĚSTNÍK

(4) An uninsurable child whose parent or guardian is a member can participate in the youth program.

Section 6. Membership Guidelines. All members shall guide themselves according to the charter, constitution, and by-laws of SPJST; otherwise, they are subject to penalty as defined by these by-laws and as prescribed by the Supreme Lodge for violation and non-observance of them. No subordinate body, nor any of its subordinate officers or members, shall have the power or authority to waive any of the provisions of the by-laws of SPJST. Such provisions shall be binding on SPJST and every member and beneficiary of a member. Section 7. Induction of New Members. Induction of new members may be conducted at a time and date convenient to the local lodge and the new members.

ARTICLE VI CONVENTION Section 8. Purpose. The Supreme Governing Body of SPJST shall be known as the Convention and shall be composed of delegates elected according to the rules of these by-laws. The Convention is the sole judge of eligibility and qualifications of all delegates and substitutes. The Convention has the power to: (a) Adopt, amend, and supplement the by-laws of SPJST.

(b) Receive and act on all reports filed by Supreme Lodge officers and directors and all committees, which must be published in the Vestnik 30 days before the Convention. Directors may make one combined report if they so agree. (c) Elect Supreme Lodge President, Editor/Director of Communication, district directors, and all required committees. (d) Determine salaries of Supreme Lodge President, Editor/Director of Communication, district directors, and all required committees.

(e) Determine compensation for all delegates, Convention officers, and committee members, and Convention expense borne by SPJST. Delegates, Convention officers, and committee members will be paid the week following the Convention. (f) Authorize the Supreme Lodge to employ a Vice President, Chief Financial Officer (Secretary-Treasurer), and Director of Accounting/Information Technology Services (Financial Secretary).

(g) Decide what donations will be made to various charities and educational institutions, etc.

Section 9. Regular Conventions. Regular Conventions are held once every four years. The date of the next regular Convention shall be set by the Supreme Lodge and published in the Vestnik no later than January of the Convention year.

Section 10. Special Conventions. Special Conventions may be held upon a twothirds vote of all members of the Supreme Lodge for an urgent matter concerning the welfare of SPJST. Such special Conventions shall be held at such time and place as may be determined by the Supreme Lodge. No business may be taken up at such special Convention except for the purpose for which called, which purpose shall be clearly and distinctly set forth in the call for the special Convention. A call for a special Convention shall be deposited in the United States mail at least 30 days prior to the convening of such special Convention, addressed to each delegate at his/her last known address as shown by the records of SPJST. At the special Convention, delegates from each lodge shall have the same number of votes as at the preceding regular Convention.

Wednesday, September 9, 2015

Section 11. Quorum. Two-thirds of delegates seated at any regular or special Convention shall constitute a quorum for the transaction of all business.

Section 12. Ballot In Lieu of Special Convention. In lieu of calling a special Convention, the Supreme Lodge may send a ballot to all delegates by mail or by email. The ballot may include one or more resolutions that could be considered and adopted at a special Convention. The proposed resolution or resolutions must be mailed to the delegates at least 30 days before the ballots must be returned. Delegates from each lodge shall have the same number of votes as at the preceding regular Convention. A resolution shall be deemed adopted upon receipt of signed ballots with votes equal to the number of votes that would have been needed to adopt the resolution at a special Convention at which all delegates were present. Section 13. Order. All proceedings of the Convention will be conducted in the following order, unless decided otherwise by the Convention Order Committee and approved by the delegates: (a) Supreme Lodge President convenes the Convention and appoints a temporary committee of seven tellers, one from each district, to tabulate votes during the election of the Convention Chairman and Convention Vice Chairman.

(b) Credentials Committee report. A list of names of elected delegates and number of votes each lodge and delegate is entitled to will be made available to delegates at the beginning of the Convention. At least 30 days prior to the Convention, the Supreme Lodge President will appoint three members to the Credentials Committee. (c) Elect Convention officers (Chair and Vice Chair) and name Convention committees (Resolution, Grievance, Order, Teller, other necessary committees) from among the delegates. (d) Act on all reports filed by Supreme Lodge members and all standing committees (By-Law, Finance, Insurance, and Publication). (e) Deliberate by-laws.

(f) Convention committees’ reports. (g) Miscellaneous business.

(h) Elect Supreme Lodge President and Editor/Director of Communication.

(i) District caucuses. The purpose of these seven, separate district caucuses is to nominate and elect a district director and substitute; By-Law Committee member and substitute; Finance Committee member and substitute; Insurance Committee member and substitute: and Publication Committee member and substitute. Each delegate will vote in accordance with Section 24 (Votes) of the by-laws. The district director will act as temporary chair of the district caucus until delegates elect a permanent chair. (j) Select location for the succeeding Convention.

(k) Install elected officials and standing committee members. (l) Adjourn Convention.

Section 14. Convention Officers. The Supreme Lodge President shall convene the Convention and shall preside until a Convention Chair is elected. The Supreme Lodge President shall appoint the secretaries of the Convention. The Convention Chair and Convention Vice Chair are the Convention officers.

Wednesday, September 9, 2015

Section 15. Convention Committees. The following committees appointed by the Convention Chair and Convention Vice Chair will function during the Convention: (a) Resolution Committee – three members.

(b) Grievance Committee – seven members, one from each district. (c) Convention Order Committee – three members.

(d) Election Teller Committee – seven members, one from each district. This committee has the authority to employ machine operators, if needed. (e) All other necessary committees.

Section 16. Proceedings. All proceedings in the Convention, unless such rules are not covered by the by-laws, are conducted in accordance with the current edition of “Robert’s Rules of Order Newly Revised.”

Section 17. Discussions. All Supreme Lodge members, Editor/Director of Communication, and standing committee members may participate in the discussions at the Convention, but they do not have the right to make motions, vote, or nominate unless they are delegates. (a) No concern can be discussed in the Convention unless it was first presented to the Grievance Committee and acted upon by that committee.

(b) No motion to change by-laws or amendment thereto can be presented to the Convention unless the motion or amendment thereto has been submitted to the By-Law Committee 60 days prior to the Convention so that the committee could study such motion or amendment and deliver its opinion.

(c) Requests for donations, support, salaries, or increase of salaries must be presented to the Finance Committee 60 days prior to the Convention for consideration, approval, or rejection, or the request cannot be discussed in the Convention.

Section 18. Voting. The enactment, deletion, or amendment to a by-law requires a two-thirds vote by authorized votes of delegates present. Unless otherwise required by law or the laws of SPJST, all other matters are decided by a majority of authorized votes of the delegates present. Delegates shall vote by voice, show of hands, standing, roll call, or secret ballot as designated by the Convention Chair. No delegate shall vote by proxy. All new by-laws become effective on the latter of July 1 following the Convention at which they were adopted or approval by the Texas Department of Insurance.

Section 19. Election of Supreme Lodge President, Editor/Director of Communication, and District Directors. Establish a screening process for the purpose of reviewing all qualifications of submitted candidates for Supreme Lodge President, Editor/Director of Communication, and seven District Directors. The screening committee has the right to gather additional background information, submit the slate of qualified candidates to the delegates 90 days prior to Convention, and shall have the discretion to consult with personnel with legal and human resource expertise to assure compliance with current labor laws. The By-Law Committee will serve as the screening committee. Anyone seeking the positions of Supreme Lodge President, Editor/Director of Communication, or District Director must announce candidacy at least 120 days prior to Convention. Section 20. Minutes. The minutes shall be kept and approved in the English language. A copy of the Convention minutes shall be sent to each local lodge secretary; all Convention delegates; members of all standing committees (By-Law, Finance, Insurance, and Publication); and all members, upon request.

Section 21. Publicity. Supreme Lodge President and Editor/Director of Communication are responsible for appropriate publicity pertaining to Conventions.

ARTICLE VII LODGE DELEGATE ELECTIONS

VĚSTNÍK

Section 22. Election of Delegates. Delegates and substitute delegates shall be elected at the annual local lodge meeting that precedes the Convention for the term from one Convention to the next Convention.

Section 23. Number of Delegates per Lodge. Every lodge has the right to elect delegates in accordance with its membership.

(a) The number of delegates a lodge may send to the Convention shall be based on the following scale: (1) One delegate for lodges with 20 to 100 adult members;

(2) One additional delegate for each additional 150 adult members.

(b) Changes in Lodge Membership. If a lodge obtains enough new active members to qualify for an additional delegate to the Convention in the time period between the annual meeting and 60 days before the Convention, then that lodge shall send the substitute delegate or delegates with the most votes. A lodge losing the required number of members between such time shall not lose the delegate or delegates.

(c) New Lodges. A lodge chartered during the Convention year may elect its delegates and its substitutes any time before the convening of the Convention. A lodge chartered, merged, or reorganized less than three years preceding the election of its delegates may elect its delegates and substitutes from among those members having attended a majority of the regular meetings from the date of its charter, merger, or reorganization.

Section 24. Votes. A lodge represented by its delegate or delegates is entitled to one vote for every active member. Delegates from each lodge shall divide their lodge’s votes equally among themselves. In the event the votes do not divide evenly among delegates, the extra votes shall be assigned to the delegate receiving the highest number of votes at the annual lodge meeting.

Section 25. Substitute Delegates. Substitute delegates shall be elected according to the procedures for election of delegates. No more than 10 substitute delegates shall be elected per lodge. A substitute delegate shall attend the Convention if one of the elected delegates cannot attend. The substitute delegate or delegates shall be chosen to fill vacancies according to which substitute delegate received the most votes at the annual lodge meeting. Section 26. Delegate Requirements.

(a) Qualifies as an adult member.

(b) Is present during the election or is absent due to unavoidable circumstances.

(c) Attended a majority of the regular meetings of the lodge during the three years preceding the Convention. (When there is a conflict with the date of their local lodge meeting, Supreme Lodge members, Editor/Director of Communication, state field representatives, and state and district fraternal activities coordinators, on official business, may count as attending a regular meeting for this purpose. The state youth director, district youth counselors and their assistants, on official business, may count as attending youth club meetings. Notification must be given to the local lodge secretary prior to the event with written confirmation made by the party within two weeks following the event.) Newly transferred members’ attendance record of the previous lodge shall be accepted. (d) Is a citizen of the United States of America at the time of election.

VĚSTNÍK

(e) Is not an officer or director of another fraternal life insurance society.

(f) Any member who desires to serve as a delegate who is an underwriter of any Old Line insurance company or an agent (underwriter) of any other fraternal life insurance society may be elected but must first disclose this information to the local lodge members prior to the election.

Section 27. Term. Delegates and substitute delegates shall hold office until their successors are duly elected and qualified. The duly elected and qualified delegates and substitutes to the most recent regular Convention shall be the delegates and substitutes to any special Convention or for any ballot in lieu of a special Convention. If a delegate is not in the Convention by the second day, he/she will not be seated unless he/she has a good excuse, such as serious illness/emergency or death in immediate family. In the event of the merger of two or more lodges following the Convention, those delegates of each lodge shall be entitled to the same number of votes they had at the preceding Convention. Section 28. Delegate Selection Procedure.

(a) When a lodge is entitled to two or more delegates, the nomination and election of delegates is made by whatever procedure is deemed most convenient and expedient by the local lodge. If a nominating committee is used, nominations from the floor must be permitted. In the election process, a secret ballot may be used. Ballots containing more nominees than permitted are void and not counted. The nominees receiving the highest number of votes are elected.

(b) The result of the election of delegates and substitutes shall be forwarded to the Chief Financial Officer (Secretary-Treasurer) within 30 days after the election. Failure to do so will nullify the lodge’s delegates.

(c) The Chief Financial Officer (Secretary-Treasurer) forwards to the local lodge secretary the required forms in duplicate that must be filled out by the secretary and signed by the president and secretary of the local lodge, to certify the election of the delegate and substitute. After completion, one form must immediately be forwarded to the Chief Financial Officer (SecretaryTreasurer). The elected delegate must present the second form to the Credentials Committee during Convention registration. The credential form must contain:

(1) A statement of the number of regular meetings held by the lodge the delegate is representing. (2) The number of regular meetings attended by the delegate in each of the three calendar years preceding the Convention.

(3) The mileage from the delegate’s home to the Convention site and return.

(d) Lodges failing to comply with all required lodge duties and obligations within 60 days prior to the Convention will lose their right to representation at the Convention.

(e) In the event of a delegate’s death, incapacity, or transfer to another lodge, he/she shall automatically be replaced by the first substitute of such lodge. ARTICLE VIII SUPREME LODGE

Section 29. Composition. The Supreme Lodge shall be composed of the President, Vice President, Chief Financial Officer (Secretary-Treasurer), Director of Accounting/Information Technology Services (Financial Secretary), and seven elected directors (one from each of the seven districts). The Supreme Lodge shall have the authority to provide rules and regulations for the extension and devel-

Wednesday, September 9, 2015

opment of SPJST and shall have all other necessary and incidental powers to carry out the objectives of SPJST and such other duties as prescribed by these bylaws. Section 30. Qualifications.

(a) No agent of any other life insurance company, or any officer or director of any similar fraternal order is eligible to membership in the Supreme Lodge.

(b) No Supreme Lodge member shall receive commission for the sale of property belonging to SPJST. No Supreme Lodge member can buy property from SPJST. No Supreme Lodge member shall be personally liable to SPJST or its members for monetary damages for any act or omission in the officer’s or director’s capacity as an officer or director except in the following instances:

(1) For any breach of the officer’s or director’s duty of loyalty to SPJST or its members; (2) For any act or omission not in good faith or which involves intentional misconduct or knowing violation of the law;

(3) For any transaction from which the officer or director received an improper benefit, whether or not the benefit resulted from action taken within the scope of the officer’s or director’s position; (4) For any act or omission for which the liability of an officer or director is expressly provided for by statute or payment of a dividend.

(c) No person can be an employee or member of the Supreme Lodge if he/she is related to any member of the Supreme Lodge within the third degree, as construed under Section 573 of the Government Code of the Texas Revised Civil Statutes.

Section 31. Duties. The affairs of SPJST shall be managed under the direction of the Supreme Lodge between regular meetings of the Convention. The Supreme Lodge has the duty and authority to: (a) Provide leadership for all SPJST members and others. (b) Promote fraternalism between lodges.

(c) Learn and promote Czech heritage and language and the history of SPJST. (d) Employ legal counsel on an as-needed basis.

(e) Provide sufficient insurance coverage for the protection of SPJST.

(f) Conduct a strategic planning process and develop an annual business plan with clearly defined qualitative and quantitative goals.

(g) Approve a contract on an annual basis, if deemed beneficial, for the printing of the Vestnik, after consulting with a member of the Publication Committee designated by that committee, and the Editor/Director of Communication.

(h) Adopt formulas to determine the amount of refund to lodges based on premium income from members and other incentive factors after a review of the annual statement and consultation with the actuary.

(i) Adopt such additional plans and tables of insurance including annuities and universal life products, which appear to be beneficial, according to fraternal insurance laws of the State of Texas.

Wednesday, September 9, 2015

(j) Ratify compensation schedule and incentive programs for sales agents.

(k) Fill vacancies in the Supreme Lodge and Editor/Director of Communication with the exception of the President, as specified in Section 41 (Vacancy).

(l) Employ a certified public accountant, upon recommendation of the Chief Financial Officer (Secretary-Treasurer), to prepare a detailed report concerning the condition of SPJST.

(m) Prepare a report of its progress/accomplishments since the preceding Convention. Each Supreme Lodge officer must submit a report to be printed in the Vestnik at least 30 days prior to the Convention. Directors may submit one combined report, if they so agree.

(n) Investigate all irregularities, disorders, and incompetence in office of any Supreme Lodge member and Editor/Director of Communication (after consultation with the Publication Committee). Following a thorough investigation, including a hearing of such charges and 20 days advance notice to the accused, the Supreme Lodge may discharge the accused from his/her office by a two-thirds vote.

(o) Suspend local lodges for not performing their local lodge duties and for irregularities detrimental to SPJST. In the event of suspension, and until the suspension is lifted by the Supreme Lodge, one or more of the following shall be in effect: (1) The loss of representation at regular and special Conventions of SPJST.

(2) All official lodge records and papers shall be relinquished to the Supreme Lodge for examination.

(3) The name and number of the local lodge will be dropped from the roster of the lodges. (4) The loss of representation at district meetings and other functions of SPJST.

(5) The loss of representation at all youth functions on the district and state levels. (6) No new applications for membership will be accepted. (7) No transfers into the lodge will be accepted.

(8) All meetings and activities normally carried on by such lodge will cease. (9) No local lodge dues will be collected.

(p) Suspend or discharge local lodge officers and committees for irregularities in office detrimental to SPJST on charges filed by members of the local lodge or the Supreme Lodge, and after 20 days notice to the accused and due hearing thereon, by a vote of two-thirds of the Supreme Lodge.

(q) Employ a Vice President, Chief Financial Officer (Secretary-Treasurer) and Director of Accounting/Information Technology Services (Financial Secretary).

(r) Determine the amount of application fee and rate of interest on mortgage loans according to prevailing conditions, and the demand for loans in the best interest of SPJST. (s) Determine areas that can be outsourced or partnered for increased efficiency.

VÄ&#x161;STNĂ?K

(t) Ratify the sale and purchase of bonds and stocks by a majority vote.

(u) Ratify the salary of Home Office employees, as proposed by Supreme Lodge officers and Editor/Director of Communication. (v) Assign further duties to any member of the Supreme Lodge.

Section 32. Supreme Lodge Chair. The Supreme Lodge shall elect a chair and vice chair for a term of one year from among its seven elected district directors. The chair shall preside at all meetings of the Supreme Lodge and perform such other duties as may be designated by the Supreme Lodge. The vice chair will preside in the absence of the chair. Section 33. Regular Meetings. The Supreme Lodge shall meet quarterly during the third week or weekend in January, April, July, and October. In case of necessity, the President has the right to change the date of the meeting. Meetings are open to SPJST members except during executive sessions concerning personnel, disciplinary matters, litigation, or threatened litigation. Supreme Lodge meetings are open to the members except during personnel disciplinary matters and executive sessions concerning litigation and threatened litigation.

Section 34. Special Meetings. Special meetings of the Supreme Lodge may be called by the President, in case of necessity. In the event that two-thirds of the Supreme Lodge members determine a necessity for a special meeting, and the President refuses to call such a meeting, the two-thirds members may, by written notice, call all Supreme Lodge members to such a special meeting and hold the meeting. Two-thirds of the Supreme Lodge members will constitute a quorum at special meetings.

Section 35. Location. Meetings of the Supreme Lodge shall be held at the Home Office, unless the President or the Supreme Lodge designates an alternative location.

Section 36. Quorum and Voting. Two-thirds of the Supreme Lodge members shall constitute a quorum. The act of a majority of the members present at a meeting at which quorum is present shall be the act of the Supreme Lodge, unless the act of a greater number is required by the Charter of Incorporation, by-laws, or applicable law. Section 37. Electronic Communication. The Supreme Lodge and any committee or sub-committee of the Supreme Lodge, or any other meeting of SPJST at which written minutes are kept, except the Convention, may meet by telephone conference or other means of communication that allows all participants to simultaneously communicate with each other.

Section 38. Action Without Meeting. Any action required or permitted to be taken by the Supreme Lodge or any committee or sub-committee of the Supreme Lodge may be taken without a meeting by written consent of all of its members then in service. A written consent under this provision shall have the same force and effect as a vote taken at a meeting.

Section 39. Minutes. The Supreme Lodge will designate a Home Office staff member to record minutes of all transactions at all open Supreme Lodge meetings and special meetings. The Chief Financial Officer (Secretary-Treasurer) will maintain minutes and exhibits of the Supreme Lodge meetings and Investment Committee meetings. Written consent may be given electronically. (a) The minutes will be printed in the Vestnik within 30 days after each regular or special Supreme Lodge meeting.

(b) The minutes will include each item voted on at the meeting with a record of how each Supreme Lodge member voted on each issue. Matters concerning personnel, disciplinary matters, litigation, threatened litigation, and marketing plans will not be included.

VĚSTNÍK

Section 40. Committee Establishment. The Supreme Lodge may appoint an audit committee and other committees of the Supreme Lodge to have such authority as the Supreme Lodge may delegate. Each committee shall consist of three or more Supreme Lodge members. Additional committee members may be appointed by the Supreme Lodge. A majority of the members of each committee shall constitute a quorum for the transaction of all committee business. Section 41. Vacancy. In the event of a vacancy by the President, Vice President, Chief Financial Officer (Secretary-Treasurer), Director of Accounting/Information Technology Services (Financial Secretary), or Editor/Director of Communication, such vacancy will be filled by appointment by the Supreme Lodge.

(a) The office of President shall be temporarily filled by the Vice President until a new President is appointed by the Supreme Lodge. (b) In the event of a vacancy by a district director, the position shall be filled by his/her substitute.

(c) In the event of a vacancy by a substitute director who succeeded the director, the district president shall call a meeting of the delegates of the previous regular Convention to a place centrally located for the purpose of electing a new director and his/her substitute for the term to the next Convention. This election shall be carried out within 30 days. The results of the election shall be announced to the Supreme Lodge without delay.

Section 42. Removal of Supreme Lodge Members. A Supreme Lodge member may be removed from the Supreme Lodge “for cause” by a two-thirds affirmative vote of a majority of all members of the Supreme Lodge excluding the Supreme Lodge member whose status is at issue at a meeting called for that purpose. “For cause,” for purposes of this section, shall include:

(a) inability or failure to perform the duties and responsibilities of a Supreme Lodge member; (b) engaging in conduct unbecoming of a Supreme Lodge member;

(d) breaching a fiduciary duty owed to SPJST, its members, or beneficiaries;

(e) materially violating these by-laws, the Charter of Incorporation, or any code of ethics or conflict of interest policy adopted by SPJST; or (f) ceasing to be a member of SPJST.

A determination of cause shall be made within the reasonable discretion of the Supreme Lodge. All Supreme Lodge members, upon termination of their tenures, must deliver to their successors all property belonging to SPJST. ARTICLE IX SUPREME LODGE OFFICERS

Section 43. Officer Requirements. To be a Supreme Lodge officer, an individual must meet the following requirements: (a) Be a member of SPJST for at least three consecutive years preceding the election or appointment.

(b) Be a citizen of the United States of America.

Wednesday, September 9, 2015

(d) Minimum of a bachelor’s degree or equivalent work experience.

(e) Appreciate and promote the Czech language and culture and fluently speak the English language.

(f) Any other requirements that the Supreme Lodge may prescribe that take into consideration and magnitude of the business and affairs of SPJST.

Section 44. Terms. The term of office for Supreme Lodge President is from July 1 of the Convention year to June 30 of the following Convention year. (a) No officer can hold more than one office at a time, and no officer can receive more than one compensation at one time.

(b) No Supreme Lodge officer or his/her spouse can be an SPJST sales agent and receive commissions for services as a sales agent. (c) No Supreme Lodge officer may hold any position in the districts or lodges.

Section 45. General Duties.

(a) Coordinate and conduct workshops for the training of local lodge officers in the first quarter of each year.

(b) Submit a quarterly report of all services performed to the Supreme Lodge members prior to each Supreme Lodge meeting. (c) Submit reports regularly to the Vestnik.

Section 46. President. In addition to the Supreme Lodge officer requirements, the President must also have experience and knowledge in the fraternal life insurance field; demonstrated leadership capacity in the fraternal activities field; management skills; and the ability to communicate clearly and persuasively with others. The President is the official head of SPJST and oversees all departments. The President is an ex officio member of all appointed committees within the Supreme Lodge.

Section 47. Vice President. In addition to the Supreme Lodge officer requirements, the Vice President must also have experience and knowledge in the fraternal life insurance field; demonstrated leadership capacity in the life insurance field; marketing and management skills; and the ability to communicate clearly and persuasively with others. The Supreme Lodge Vice President shall assist the President in activities promoting SPJST.

Section 48. Chief Financial Officer (Secretary-Treasurer). In addition to the Supreme Lodge officer requirements, the Chief Financial Officer (Secretary-Treasurer) must have experience in corporate management and administration/accounting and knowledge in the mortgage lending and loan origination field, investment management, and claims and annuity administration. Section 49. Director of Accounting/Information Technology Services (Financial Secretary). In addition to the Supreme Lodge officer requirements, the Director of Accounting/Information Technology Services (Financial Secretary) must have experience and knowledge in the accounting and information technology fields. Section 50. Staff. After consulting with the President, the Vice President, Chief Financial Officer (Secretary-Treasurer), and Director of Accounting/Information Technology Services (Financial Secretary) have the authority to hire employees working directly under the respective officer. ARTICLE X SUPREME LODGE DIRECTORS

Section 51. Director Requirements. These qualifications shall reflect the complexity and magnitude of the business and affairs of SPJST and shall therefore include expertise in corporate governance, financial accounting, and insurance, among others. To be a Supreme Lodge director, an individual must meet the following requirements:

Wednesday, September 9, 2015

(a) Be a citizen of the United States of America at the time of election.

(b) Be an active member for at least three consecutive years prior to the time of election. (c) Have SPJST life insurance in force or, if uninsurable, have an SPJST annuity. (d) Meet the lodge attendance requirements for delegates.

(e) Appreciate and promote the Czech language and culture and fluently speak the English language.

(f) Attend the Convention or have an excuse for not being present that is acceptable by two-thirds of the delegates. (g) Be capable of assuming the responsibilities as outlined herein and as established by SPJST from time to time. (h) Reside within the bounds of director’s respective district.

Section 52. Terms. The term for directors is from July 1 of the Convention year to June 30 of the following Convention year. No director can hold any position in the SPJST Home Office or district. Section 53. General Duties. The Supreme Lodge directors will: (a) Oversee the management and progress of SPJST.

(b) Oversee the compliance of all by-laws and decisions of the Conventions and Supreme Lodge. ARTICLE XI EDITOR/DIRECTOR OF COMMUNICATION AND VESTNIK – OFFICIAL PUBLICATION

Section 54. Qualifications. In addition to the Supreme Lodge officer requirements, the Editor/Director of Communication must have experience editing and composing a newspaper; possess journalistic qualifications; have knowledge of the fraternal benefit system and English and Czech languages; and be well versed in media law, especially as it relates to privacy concerns and libel. (a) General Duties. The Editor/Director of Communication will: (1) Manage all aspects of Vestnik.

(2) Manage all aspects of the SPJST internet website.

(3) Coordinate public relations in the community and across the state to improve SPJST’s public image as directed by the Supreme Lodge President.

(4) Submit a quarterly report of all services performed to the Supreme Lodge members prior to each Supreme Lodge meeting.

(b) Terms. The Editor/Director of Communication’s position will be elected by the delegates at the Convention. The term of office is from July 1 of the Convention year to June 30, following the Convention. The Editor/Director of Communication may not hold any position in the district or local lodge or serve as an agent for any other life insurance company or any similar fraternal order. (c) Staff. After consulting with the President, the Editor/Director of Communication has the right to hire employees working directly under the Editor/Director of Communication.

VĚSTNÍK

Section 55. Official Publication. SPJST shall have an official publication. The name of the official publication shall be Vestnik. The Vestnik will be published as a weekly newspaper and in color. ARTICLE XII STANDING COMMITTEES: BY-LAW, FINANCE, INSURANCE, AND PUBLICATION

Section 56. Composition. Each standing committee shall be comprised of seven members, one elected by each district. The committee members elected at the 2016 Convention will function at the 2020 Convention. Section 57. Committee Officers. Each standing committee shall convene immediately following the Convention and elect a committee chair, vice chair, and secretary from its membership.

Section 58. Eligibility. Supreme Lodge members, their spouses, or SPJST Home Office employees are not eligible for membership on any standing committee, but they are free to attend the committee meetings, make suggestions and recommendations, and assist the committees in every way possible. The committee has the right to deliberate and hold executive sessions during which the persons mentioned in this section will not be present. (a) Committee members must attend their respective district spring meetings. If two meetings are missed, the substitute will be appointed to complete the remainder of the term.

(b) In the event that neither the elected member nor his/her substitute can serve on the committee for which such member has been elected, the district delegates from the preceding Convention shall elect another member from the district membership to serve. The election procedure will be determined by the district officers. The district president shall notify the secretary of such standing committee and the Supreme Lodge of the results of the election without delay.

Section 59. Quorum and Voting. A majority of each standing committee shall constitute a quorum for the transaction of standing committee. The committee shall act by a majority of committee members present.

Section 60. Electronic Communication. Any meeting of SPJST at which written minutes are kept, except the Convention, may meet by telephone conference or other means of communication that allows all participants to simultaneously communicate with each other. Section 61. Compensation. Committee members will receive compensation for attending meetings as adopted by the preceding Convention. Section 62. By-Law Committee.

(a) Purpose. The By-Law Committee’s purpose is to:

(1) Consider, arrange, and recommend motions for amending by-laws of the succeeding Convention. (2) Eliminate conflicts in the by-laws. (3) Codify and rearrange the by-laws.

(4) Deliberate and decide on all recommendations for amending the bylaws and, if necessary, prepare and present its own recommendations for changes, additions, or deletions of any articles.

(5) Submit recommendations to the Vestnik for publishing 30 days prior to the Convention.

VĚSTNÍK

(6) Arrange and compile the newly-adopted by-laws with all changes and amendments immediately following the Convention. The By-Law Committee will eliminate duplications, remove conflicting articles, and recodify all by-laws, in compliance with the Texas Department of Insurance.

(7) Submit a neat, readable, finished product with a complete index to the publisher within 90 days after the Convention.

(8) Print the by-laws. The printer must forward one copy of the proof to each member of the committee for approval and one copy to each Supreme Lodge member for comments. Such comments shall be forwarded to the By-Law Committee within 10 days after receipt thereof and prior to final approval by the committee. The Supreme Lodge determines the number of copies to be printed and furnishes copies to lodges and members, upon request.

(9) Forward a sealed package containing all of the committee’s records from the Convention to the Supreme Lodge President. The sealed package may be opened in case of necessity only in the presence of the Supreme Lodge.

(10) The Home Office will provide assistance as needed to accomplish this purpose.

(b) Meetings. The By-Law Committee convenes not later than January of the Convention year. In the event additional recommendations are made in the Convention, and if the committee deems it advisable for the purpose of considering and deciding on such recommendations, the committee will convene during the Convention and present its recommendations. (c) By-Law Recommendations.

(1) Recommendations for changes to the by-laws must be signed and submitted to any member of the By-Law Committee not later than 60 days prior to the Convention. Recommendations must be submitted in the English language. (2) The By-Law Committee secretary shall forward all signed by-law recommendations to the Vestnik for publication.

(3) Rejected recommendations can be presented by a delegate in the Convention during deliberation of the respective article.

Section 63. Finance Committee.

(a) Purpose. The Finance Committee’s purpose is to: (1) Review the prior year financial statement.

(2) Review all compensation and financial benefits of Supreme Lodge members and Editor/Director of Communication. Any increase in compensation must be approved by the delegates of the current Convention.

(3) Recommend whether a bonus will be paid to Supreme Lodge members and Editor/Director of Communication. The Finance Committee will recommend a formula as how the bonus is to be paid. No bonus shall be paid without the consent of the Finance Committee.

(4) Recommend to the Convention per diem of delegates and committees; salaries of elected officials; donations; allocations; and expenditures. Requests must be signed and submitted to any member of the Finance Committee not later than 60 days prior to the Convention. Requests not submitted 60 days prior to the Convention cannot be brought up for discussion on the Convention floor. The Finance Committee rec-

Wednesday, September 9, 2015

ommendations shall be published in the Vestnik 30 days prior to the Convention.

(b) Meetings. The Finance Committee shall meet annually. The committee will meet as necessary during the year of the Convention, after January 1.

Section 64. Insurance Committee.

(a) Purpose. The purpose of the Insurance Committee is to:

(1) Outline and report to the Convention the growth and progress of the Insurance Department. (2) Provide input to the Supreme Lodge Vice President on products and innovative ideas. (3) Represent SPJST by promoting insurance programs and products.

(4) Participate in lodge and district events to inform the membership on matters pertaining to the Insurance Department.

(b) Meetings. The Insurance Committee will meet as requested by the Supreme Lodge Vice President. One meeting must be held at least six months prior to the Convention to consider by-law recommendations.

Section 65. Publication Committee.

(a) Purpose. The purpose of the Publication Committee is to:

(1) Outline and report to the Convention the format, editorial policies, and general usefulness of the Vestnik. This report will be published in the Vestnik 30 days prior to the Convention.

(2) Determine what material proposed to be included in the Vestnik may be harmful to and against the best interests of SPJST.

(b) Meetings. The Publication Committee will meet annually. Special meetings will be held in exceptional cases when problems cannot be settled by correspondence. ARTICLE XIII DISTRICTS

Section 66. Composition. Districts are subordinate bodies under the jurisdiction of the Supreme Lodge. SPJST is divided into seven districts across the state of Texas in which lodges are located. The districts are composed of the following counties: (a) DISTRICT ONE: Austin, Bastrop (except Lodge 18), Brazos, Burleson, Caldwell, Cherokee, Fayette, Grimes, Houston, Lee, Leon, Madison, Panola, Robertson, Rusk, Trinity, Walker, and Washington.

(b) DISTRICT TWO: Bell, Blanco, Burnet, Coryell, Falls, Gillespie, Kendall, Kerr, Lampasas, Llano, McCulloch, Mason, Menard, Milam, San Saba, Travis, Williamson, Lodge 18, Elgin (located in Bastrop County), and Lodge 200, Bruceville-Eddy (located in McLennan County).

(c) DISTRICT THREE: Anderson, Bosque, Bowie, Camp, Cass, Clay, Collin, Cooke, Dallas, Delta, Denton, Ellis, Erath, Fannin, Franklin, Freestone, Grayson, Gregg, Hamilton, Harrison, Henderson, Hill, Hood, Hopkins, Hunt, Jack, Johnson, Kaufman, Lamar, Limestone, McLennan (except Lodge 200, Bruceville-Eddy), Marion, Montague, Morris, Navarro, Palo Pinto, Parker, Rains, Red River, Rockwall, Smith, Somervell, Tarrant, Titus, Upshur, Van Zandt, Wise, and Wood.

Wednesday, September 9, 2015

(d) DISTRICT FOUR: Andrews, Archer, Armstrong, Bailey, Baylor, Borden, Brewster, Briscoe, Brown, Callahan, Carson, Castro, Childress, Cochran, Coke, Coleman, Collingsworth, Comanche, Concho, Cottle, Crane, Crockett, Crosby, Culberson, Dallam, Dawson, Deaf Smith, Dickens, Donley, Eastland, Ector, El Paso, Fisher, Floyd, Foard, Gains, Garza, Glasscock, Gray, Hale, Hall, Hansford, Hardeman, Hartley, Haskell, Hemphill, Hockley, Howard, Hudspeth, Hutchinson, Irion, Jeff Davis, Jones, Kent, Kimble, King, Knox, Lamb, Lipscomb, Loving, Lubbock, Lynn, Martin, Midland, Mills, Mitchell, Moore, Motley, Nolan, Ochiltree, Oldham, Parmer, Potter, Pecos, Presidio, Randall, Reagan, Reeves, Roberts, Runnels, Schleicher, Scurry, Shackelford, Sherman, Sterling, Stephens, Stonewall, Sutton, Swisher, Taylor, Terrell, Terry, Throckmorton, Tom Green, Upton, Val Verde, Ward, Wheeler, Wichita, Wilbarger, Winkler, Yoakum, and Young.

(e) DISTRICT FIVE: Angelina, Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Tyler, and Waller. (f) DISTRICT SIX: Aransas, Calhoun, Colorado, DeWitt, Goliad, Gonzales, Jackson, Lavaca, Matagorda, Refugio, Victoria, and Wharton.

(g) DISTRICT SEVEN: Atascosa, Bandera, Bee, Bexar, Brooks, Cameron, Comal, Dimmit, Duval, Edwards, Frio, Guadalupe, Hays, Hidalgo, Jim Hogg, Jim Wells, Karnes, Kenedy, Kinney, Kleberg, La Salle, Live Oak, Maverick, McMullen, Medina, Nueces, Real, San Patricio, Starr, Uvalde, Webb, Willacy, Wilson, Zapata, and Zavala.

Section 67. District Meetings. Districts have the right to assemble for consultation, information, and administration within the limits of the by-laws of SPJST.

(a) Members of every district must hold at least one business meeting each year, which may be combined with social and youth activities.

(b) Every district formulates its own rules and regulations that must not conflict with the by-laws of SPJST. Any time a district desires to adopt a new activity program, which is not provided for in SPJST’s by-laws, it will present its proposal to the district director, who in turn, will present it to the Supreme Lodge for approval.

Section 68. District Officers. The following district officers shall be elected during the first meeting of the year: president; first vice president (to serve as fraternal activities coordinator for the district unless the district elects a fraternal activities coordinator as a separate position); second vice president (optional); secretary; treasurer; fraternal activities coordinator (optional); reporter (optional); district youth counselor; assistant youth counselor; and flag bearer. ARTICLE XIV LOCAL LODGES

Section 69. Charter. Lodges and youth clubs are subordinate bodies under the jurisdiction of the Supreme Lodge. Individual local lodges must receive their charters from the Supreme Lodge. Lodges are largely self-governing organizations but shall comply with these by-laws, the current edition of “Robert’s Rules of Order Newly Revised,” Local Lodge Officers’ Handbook, and all other requirements adopted by the Supreme Lodge. Local lodges may, upon adoption of a proper resolution by its membership, incorporate for fraternal, benevolent and charitable purposes and make contracts, purchases, mortgages, lease and hold real and personal property necessary to carry out its purposes under the Nonprofit Corporation Act of the State of Texas.

VĚSTNÍK

Section 70. Rules and Regulations. Lodges shall have the right to make and adopt rules and regulations in conformity with the Charter of Incorporation and by-laws of SPJST and not in conflict with any regulations or requirements of the Supreme Lodge. Such laws, alterations, or amendments are to take effect only upon the written consent of the Supreme Lodge. Every lodge is authorized, at its will, to grant sick benefits as often as it sees fit to do in accordance with its own rules and regulations. Section 71. Charter Withdrawal. The Supreme Lodge may withdraw the charter of any lodge in the event the Supreme Lodge determines that withdrawal is in the best interest of SPJST. The Supreme Lodge shall provide for the disposition of property of lodges that have been suspended or dissolved in a manner consistent with the purposes of lodges.

Section 72. New Lodges. A newly established lodge is free to adopt any name with Supreme Lodge approval. Prior to granting permission to designate a proposed lodge in an area, the Supreme Lodge shall review and consider the potential need for the area, and the proximity of existing lodges.

(a) The application for permission to organize a new lodge must be forwarded to the Supreme Lodge on an appropriate form listing the names of not less than 20 respectable persons who were not members of SPJST at the time of application but who have applied for insurance and have been accepted as members in anticipation of forming a new lodge.

(b) The Supreme Lodge will then send a representative to the new lodge for the purpose of organizing the lodge, electing officers, and giving basic lodge organizational instruction and general information about SPJST. (c) After a new lodge has sufficient members, other than transfers and juveniles, it must, after one year of its organization, be formally chartered in accordance with the wishes of the members and the Supreme Lodge ritual.

(d) If 20 members cannot be secured immediately, a proposed lodge can be designated and members can be accumulated over a period of up to 365 days into the proposed lodge in process of being formed. The Supreme Lodge has the authority to extend this period. If a lodge is not organized within the period authorized, the Supreme Lodge will assign any members in the proposed lodge to another lodge of the member’s choice or to the nearest SPJST lodge.

Section 73. Mergers. Two or more lodges wishing to merge or consolidate may do so if notice is given to the membership of both lodges in the Vestnik at least twice before the meeting at which consolidation is to be considered. Each member who has attained the age of 16 years will be mailed a written notice that a merger will be voted upon at such meeting. The merger can become effective only in a majority of the members present of each merging lodge vote in favor of the merger.

Section 74. Lodge Meetings. Local lodges must conduct monthly meetings unless they have permission from the Supreme Lodge to meet every three months so as to remain in good standing and have authority to elect delegates to the Convention. Meetings are conducted on the day and hour specified by the regulations of the local lodge.

(a) Presence of five members of a local lodge in good standing constitutes a quorum for valid transaction of all business of the local lodge, according to the by-laws and rules. (b) Discussions of political and religious matters of any kind are not allowed in lodge meetings. The president of the lodge is required to stop such discussions.

VĚSTNÍK

(c) Each member has the right to attend meetings of other lodges; however, he/she does not have the right of deliberation, unless called upon by the president.

(d) Officers and committees are installed in the regular meeting following the annual meeting or at a time deemed most expedient to the lodge.

(e) All deliberations and minutes may be conducted in the English language.

Section 75. Annual Meeting. The annual meeting is to be held in November or December, or the first meeting thereafter. The election of nominated candidates is held during the annual meeting at which time every member has the right to vote for any other candidate on his/her ballot. Whenever a lodge deems it necessary, with the consent of two-thirds of the members present, it may nominate candidates for officers, delegates, and committees in the meeting preceding the annual meeting.

Section 76. Lodge Dues. Every local lodge determines its own local dues, if any, at annual meetings. Every lodge has the right to levy special dues and assessments, if any, on its members when the regular assessments and funds of the lodge are not sufficient to cover the sick benefits and other purely lodge purposes and requirements. These assessments also apply to social members. Members who have their certificates paid up in due course, according to the terms thereof and who wish to remain active members, must pay the local lodge dues and assessments, if any, as prescribed by the lodge to which they belong, payable annually. Dues are to be paid to the treasurer before or at the end of the regular business meeting.

Section 77. Suspension of Membership. Members may be suspended from local lodge membership for good cause but will not lose their insurance benefit except for nonpayment of premiums. (See Article XIX – Resolution of Disputes) According to Texas Insurance Code section 885.312, members whose membership is suspended can only lose their insurance benefits for non-payment of premiums or if it occurs within the contestable period of the benefit contract and is for material misrepresentation in the application for membership or insurance.

Wednesday, September 9, 2015

ular basis should be elected. A lodge may require in its rules and regulations that a member must have attended a majority of the meetings for the year of the election in order to be elected as an officer. An exception to the attendance requirement exists where an office has not been filled prior to the election. A member on suspension, for whatever reason, will not be elected to a position of responsibility in the lodge. Any member of the local lodge who desires to serve as a lodge officer who is an underwriter of any Old Line insurance company or an agent (underwriter) of any other fraternal life insurance society may be elected but must first disclose this information prior to the election.

Section 81. Dissolution. In the event of dissolution of a lodge, after the payment of all legally binding debts, the remaining assets and funds of the lodge, if any, shall never inure to the benefit of any member of the lodge and no funds or property of the lodge shall be distributed among or revert to any member. Nothing herein will prevent transferring such funds or property to another duly chartered SPJST local lodge, or from one duly chartered SPJST lodge merging with another duly chartered SPJST lodge. (a) No lodge can be dissolved as long as 20 members are still in favor of its further existence.

(b) In case a lodge is dissolved, it is the duty of the last officers to deliver all books and papers belonging to the lodge to the Home Office.

Section 82. Insurance. All lodges are encouraged to secure and maintain liability insurance in the minimum amount of $300,000 and workers’ compensation insurance (if the lodge has any employees) and have the carrier/insurer furnish proof of such coverage to the Home Office. This also includes those lodges that do not own their lodge facility. ARTICLE XV BENEFIT CERTIFICATES

Section 78. Lodge Officers. The following officers will be elected: president, vice president (to serve as fraternal activities coordinator for the lodge unless the lodge elects a fraternal activities coordinator as a separate position), second vice president (optional), secretary, treasurer, fraternal activities coordinator (optional), reporter (optional), and youth leader (optional). Lodges will also elect or appoint a flag bearer (optional), assistant youth leader(s) (optional), and parliamentarian (optional).

Section 83. Contract. The certificate of membership and insurance or annuity, together with any riders or endorsements attached to it, the application, the declaration of insurability (if any) signed by the applicant, the Charter of Incorporation and by-laws of SPJST and all amendments to them, constitute the entire contract when it is issued. Any subsequent changes, additions or amendments to the Charter of Incorporation or by-laws shall be binding upon the applicant member, certificate owner, beneficiaries and other persons affected, and shall govern and control in all respects, except that no changes shall destroy or diminish benefits promised in the certificate when it was issued.

(b) Election of officers is by ballot whenever more than one candidate is nominated for the same office. A majority of votes decides. Officers are elected for one year or until their successors are elected. All officers elected take office on January 1, except lodges holding annual meetings in January, in which case such officers take office immediately following election.

Section 85. Beneficiaries. Benefit certificates may be made payable to such person or persons, entity or interest as may be permitted under the rules and regulations of SPJST and applicable laws.

(a) The offices of the local lodge president and secretary cannot be combined, but each other office may be combined with other offices.

(c) All outgoing local lodge officers must turn over all records, reference material, booklets, etc., and money to their successor in good order at the end of their term.

Section 79. Board of Trustees. In case of necessity and if the size and volume of business warrants it, a lodge may elect a board of trustees. The board of trustees may consist of as many members as the lodge deems expedient. The board of trustees is responsible for all lodge property and gives a current account of that property to the members.

Section 80. Candidate Eligibility. In nominating a candidate for local lodge office, only those members who attend the lodge functions and meetings on a reg-

Section 84. Terms. Any person upon whose life a certificate is issued prior to attaining the age of 16 years shall be bound by the terms of the application and certificate and by all the laws and rules of SPJST to the same extent as though the age of 16 years had been attained at the time of application.

(a) In the event a named beneficiary predeceases the insured or is otherwise not legally entitled to receive the certificate proceeds, the certificate proceeds shall be paid per stirpes to the family members of the insured in the following succession, as applicable, (a) the surviving spouse; (b) children; (c) grandchildren; (d) parents; (e) brothers and sisters; (f) grandparents; (g) other relatives in accordance to the laws of descent and distribution of Texas. In the event it is determined that the deceased insured has no living relatives, after a reasonable search, the certificate proceeds shall be paid to the estate of the insured.

(b) A beneficiary shall not have or acquire any claim against SPJST whatsoever until the insured dies unless otherwise provided by law.

Wednesday, September 9, 2015

(c) If a member moves from his/her last known address and his/her absence cannot be accounted for, for a period of seven years, his/her beneficiary will be paid the proceeds accruing under the certificate (Section 133.001, Civic Practice and Remedies Code or its successor).

Section 86. Reserves. If the reserves as to all or any class of certificates become impaired, the Supreme Lodge may require that there shall be paid by the owner to SPJST the amount of the owner’s equitable proportion of such deficiency as ascertained by the Supreme Lodge. If such payment is not made, either:

(a) it shall stand as indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans; or

(b) in lieu of or in combination with, the owner may accept a proportionate reduction in benefits under the certificate.

Section 87. Certificate Loans. The policies and procedures for certificate loans shall be governed by the terms of the insurance certificate contract and laws of the State of Texas. Certificate loans are administered in accordance with policies and procedures determined by the Supreme Lodge and fully in compliance with the certificate contract.

Section 88. Assignments. No assignment of the certificate shall be binding upon SPJST until the original or copy is filed with SPJST at the Home Office and the Home Office shall have made written acknowledgment thereof. SPJST assumes no responsibility for the validity of any assignment and any claim hereunder by an assignee shall always be inferior to those of SPJST to secure any indebtedness against this certificate, whether such indebtedness shall be created before or after any assignment. Section 89. Change of Beneficiary. Any member desiring to change his/her beneficiary may do so.

(a) The request for change of beneficiary must be completed by the member on a form in use by SPJST. Change of beneficiary forms must be filed with SPJST at its Home Office. A person whose designation as a beneficiary is revocable may not have or obtain a vested interest in the proceeds before the certificate pays out.

(b) No beneficiary change shall take effect unless received by the Home Office during the lifetime of the insured. When it is received, any change shall take effect as of the date the request for beneficiary change was signed, as long as the request for change was mailed or actually delivered to the Home Office while the insured was alive. Such beneficiary change shall be null and void where SPJST has made a good faith payment of the proceeds or has taken other action before receiving the change. ARTICLE XVI ANNUITY CERTIFICATES

Section 90. Eligibility Requirements. SPJST members (life insurance certificate holders) are eligible and may purchase an annuity with a $100 minimum contribution. Section 91. Exceptions.

(a) Any individual under 70 years of age must apply for an SPJST life insurance certificate, but if rated above standard, the individual may become a member with the purchase of an annuity in an amount of $1,000 minimum.

(b) Any individual under 70 years of age regardless of insurability may become a member with the purchase of an annuity in an amount of $5,000 minimum.

VĚSTNÍK

(c) Any individual over 70 years of age regardless of insurability may become a member with the purchase of an annuity in an amount of $1,000 minimum. ARTICLE XVII MORTGAGE LOANS

The Supreme Lodge is fully authorized to set policy and procedure in connection with members’ applications for loans on real estate. No one individual or corporation may have total loans exceeding $500,000. This limitation does not apply to SPJST lodge buildings and 501(c)(3) organizations. No director shall be permitted to evaluate a mortgage loan if he/she is related to the applicant either by blood, marriage, or business connections, or if he/she has any direct or indirect interest in the loan to be made. ARTICLE XVIII INDEMNIFICATION

Section 92. Indemnification. To the extent permitted by law, SPJST does hereby agree to indemnify and hold harmless each Supreme Lodge member and Editor/Director of Communication serving the SPJST against liability for any claims or causes of action which may be made against any of the above stated individuals, of any kind or nature, for such acts or omissions which would arise in the performance of their duties. SPJST shall agree to pay any damages on behalf of any of the above stated individuals for which they may be held liable. SPJST shall agree to pay any and all expenses that may be incurred by any of the above stated individuals, including, but not limited to payment of reasonable attorney fees for defense of any claims or cause of action made whatsoever.

Section 93. Insurance. SPJST shall maintain insurance on each Supreme Lodge member and Editor/Director of Communication against liability for acts or omissions in the performance of their duties as determined by the Supreme Lodge. ARTICLE XIX RESOLUTION OF DISPUTES

The purpose of this Article is to provide a method for fair resolution of disputes consistent with the fraternal nature of SPJST without the delay and expense of formal legal proceedings. Should a formal complaint be brought against any member(s), committee member(s), or officer(s), provisions contained in the current edition of “Robert’s Rules of Order Newly Revised” concerning formal procedures for fair disciplinary process will be followed except where otherwise provided by these by-laws.

(a) On the district level, the district grievance committee will hear all of the evidence, at which time a decision will be rendered by the grievance committee. All grievance proceedings shall be private and the name of the member under review shall not be disclosed in any communication or to any person other than persons whose testimony is necessary in connection with the proceeding and to members of the district grievance committee.

(b) The aggrieved member, if not satisfied with the district grievance committee’s findings, may appeal to the district for a hearing before the district membership. Such an appeal must be filed within 15 days after receipt of the notice of action of the grievance committee. (c) On the local lodge level, the local lodge grievance committee will hear all of the evidence, at which time a decision will be rendered by the local lodge grievance committee. All grievance proceedings shall be private and the name of the member under review shall not be disclosed in any communication or to any person other than persons whose testimony is necessary in connection with the proceeding and to members of the local lodge grievance committee.

VĚSTNÍK

(d) The aggrieved member, if not satisfied with the local lodge grievance committee’s findings, may appeal to the local lodge for a hearing before the local lodge membership. Such an appeal must be filed within 15 days after receipt of the notice of action of the grievance committee.

(e) If this still does not result in a mutually satisfactory resolution, either party has the right to appeal the dispute to the SPJST Supreme Lodge. The Supreme Lodge will follow the current edition of “Robert’s Rules of Order Newly Revised” concerning formal procedures for fair disciplinary process. ARTICLE XX INTERPRETATION OF BY-LAWS

If any section of these by-laws should not be explicit, or in case of uncertainty or dispute as to its intent or meaning, the Supreme Lodge shall have the power to decide upon such situation; and its decision shall remain in force until such decision or section is duly amended. ARTICLE XXI RULES OF PROCEDURE

If the Charter of Incorporation or by-laws of SPJST are silent as to any procedural aspect of any action or meeting hereunder, the procedures of the current edition of “Robert’s Rules of Order Newly Revised” shall control such procedure. ARTICLE XXII AMENDMENTS

Section 94. Repeal/Amend. These by-laws may be repealed or amended in whole or in part by a two-thirds majority vote at any regular or special Convention.

Section 95. Effective Date. Amendments to these by-laws shall take effect on July 1 following the Convention at which they were adopted. All amendments to the Charter of Incorporation or by-laws of SPJST or a synopsis thereof shall be published in the Vestnik or mailed directly to members within the time required by the laws of the State of Texas. The Chief Financial Officer (Secretary-Treasurer) shall file with Texas Department of Insurance a certified copy of each amendment not later than the 90th day after the date of enactment of the amendment. A printed copy of the by-laws, as amended, that is certified by the Chief Financial Officer (Secretary-Treasurer) is prima facie evidence that the by-laws were legally adopted. —SPJST— Current by-laws and proceedings from the 2012 SPJST Convention are available to all SPJST members from the Home Office. Contact the SecretaryTreasurer’s office to obtain your copy.

31st! Convention 2012

PROCEEDINGS of the 31st Conventtion of the SPJST

JUNE 11 - 13, 2012 KILLEEN, TEXAS

Wednesday, September 9, 2015

SPJST OPERATIONS MANUAL

CHAPTER 1 BUSINESS OPERATIONS

Section 1. Introduction. The operations outlined herein provide a framework for the day-to-day business operations of SPJST. The Supreme Lodge will periodically review these items. Additions or changes to this manual will be published in the Vestnik.

Section 2. Ethics and Code of Business Conduct. The affairs of SPJST must at all times be conducted in accordance with the highest standards of business ethics and in compliance with all applicable laws so that SPJST can establish and maintain a reputation for integrity and fairness. A high standard of ethical business conduct is the personal responsibility of each member of the Supreme Lodge and every employee of SPJST.

(a) Each member of the SPJST Supreme Lodge will undergo on an annual basis a review of personal performance against established criteria, for purposes of assessing its effectiveness. The performance of each is appraised at least annually, through a formal performance appraisal process conducted by the Supreme Lodge.

(b) All Supreme Lodge members and SPJST employees must be fair and honest in their dealings with members, prospective members, vendors, coworkers, and the general public. All persons are to be treated with dignity and respect. Unlawful harassment of or discrimination against SPJST employees, members, and prospective members will not be tolerated. (c) Employees should perform their duties faithfully, fairly, courteously, to the best of their abilities, and with undivided business loyalty. Conflicts of interest and the appearance of impropriety shall be avoided. (d) Members of the Supreme Lodge and employees must never use their position with SPJST or the assets of the company, for personal profit or advantage or in a fashion contrary to the interests of SPJST.

(e) Members of the Supreme Lodge and employees should respect and protect all SPJST property, including its intellectual property and confidential business information.

(f) As it relates to the SPJST work environment, SPJST department heads (Officers and Editor/Director of Communication) must be aware of, and accountable for, the ethical behavior of their subordinates. Department heads and the Human Resources Administrator are accountable for ensuring that employees are aware of, understand, and operate within the guidelines covered for in the SPJST Employee Handbook.

Section 3. Hiring and Personnel. SPJST is an equal opportunity employer and makes employment decisions on the basis of merit. SPJST policy prohibits unlawful discrimination based on race, color, creed, sex (including pregnancy), religion, marital status, age, national origin or ancestry, physical or mental disability, medical condition, sexual orientation, or any other consideration made unlawful by federal, state, or local laws. All such discrimination is unlawful and prohibited by SPJST. Department heads who want to establish a job position must first consult with the Supreme Lodge President. Department heads who need to fill a new job opening or fill an approved position should submit an employment requisition to the Human Resources Administrator.

(a) SPJST will try to fill job openings above entry level by promoting from within, if qualified internal applicants are available.

Wednesday, September 9, 2015

(b) If candidates from within SPJST are to be considered for job openings, the Human Resources Administrator will post the openings in the Home Office.

(c) If candidates from outside SPJST are to be considered for job openings, the Human Resources Administrator working in concert with the department head will be responsible for recruiting the candidates and will use the recruitment methods and resources deemed appropriate to fill the openings.

(d) During the recruitment, hiring, and orientation process, no statement will be made promising permanent or guaranteed employment; and no document will be called a contract unless, in fact, a written employment agreement is to be used. All employees of SPJST should be aware that employment with SPJST is at will and should not make any representations otherwise. (e) When candidates from outside SPJST are to be considered for job openings, the following procedures should be implemented:

(1) Any candidate for employment must complete an employment application form in order to be considered for hiring. Upon completion of the application, the candidate becomes an applicant for purposes of SPJST recordkeeping.

(2) The Human Resources Administrator will consider requests for accommodation of disabilities and religious beliefs and will determine what, if any, accommodation will be made.

(3) To comply with applicable laws ensuring equal employment opportunities to qualified individuals with a disability, and to the extent required by the Americans With Disabilities Act, SPJST will make a reasonable accommodation for the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or an employee unless undue hardship for SPJST would result. (4) Applicants determined to be qualified for consideration for available job openings will be interviewed by the Human Resources Administrator and/or a hiring panel and given any tests required for the job.

(5) If the Human Resources Administrator or hiring panel determines that the applicant is qualified for employment, a second interview should be arranged between the applicant and the head of the department with the job opening.

VĚSTNÍK

(9) The Human Resources Administrator working in concert with the department head is responsible for orientation of new employees and processing their employment forms. The supervisor is responsible for any necessary job training.

(10) A member of an employee’s immediate family will be considered for employment by SPJST if the applicant possesses all the qualifications for employment. An immediate family member may not be hired, however, if the employment would: (i) Create either a direct or indirect supervisor/subordinate relationship with a family member; or

(ii) Create either an actual conflict of interest or the appearance of a conflict of interest. These criteria will also be considered when assigning, transferring, or promoting an employee. For purposes of this policy, “immediate family” includes the employee’s spouse, brother, sister, parents, children, stepchildren, nieces, nephews, grandchildren, father-in-law, mother-in-law, sister-in-law, brotherin-law, daughter-in-law, son-in-law, and any other member of the employee’s household.

(iii) No person can be an employee of the Supreme Lodge if he/she is related to any member of the Supreme Lodge within the third degree, as construed under Section 573 of the Government Code of the Texas Revised Civic Statutes. (iv) Employees who marry or become members of the same household may continue employment as long as there is not:

(11) Employees who marry or become members of the same household may continue employment as long as there is not:

(i) A direct or indirect supervisor/subordinate relationship between the employees; or

(ii) An actual conflict of interest or the appearance of a conflict of interest. Should one of the above situations occur, SPJST will attempt to find a suitable position within SPJST to which one of the affected employees may transfer. If accommodations of this nature are not feasible, the employees will be permitted to determine which of them will resign. (iii) No employee of SPJST can serve as a director.

(6) The department head has the responsibility to determine whether an applicant has the technical qualifications for the open position and meets the other job-related criteria necessary to perform the job. The decision whether to hire the applicant is to be made by the department head but also must have the acknowledgement of the Human Resources Administrator.

(12) The SPJST Employee Handbook shall be maintained and regularly updated by the Human Resources Administrator as communicated by the Supreme Lodge President and as directed by SPJST officers and ratified by the SPJST Supreme Lodge. Every employee will receive a printed copy of the handbook and be required to acknowledge receipt of the handbook.

(8) If the background, medical, or any other subsequent investigation discloses any misrepresentation on the application form or information indicating that the individual is not suited for employment with SPJST, the applicant will be refused employment or, if already employed, may be terminated.

(14) All employees, former employees, and representatives of employees may view certain contents of their personnel file with advance notice to the Human Resources Administrator. Documents that relate to the employee’s qualifications for hire such as the application, promotion, disciplinary action, and transfer may be viewed. Additionally, the employee may review policy signoff forms and training records.

(7) Following a decision to hire the applicant, the Human Resources Administrator will make an offer of employment that should include any necessary contingencies or disclaimers. The Human Resources Administrator will then determine whether the applicant has the legal right to work in the United States and, where appropriate, will conduct credit, personal reference, driving record, and criminal conviction checks. A prior conviction, taken by itself, will not necessarily disqualify an applicant. If the applicant accepts the offer and a medical examination is required, the Human Resources Administrator will arrange it.

(13) Former employees who left SPJST in good standing may be considered for reemployment. Former employees who resigned without written notice or who were dismissed for disciplinary reasons may not be considered for reemployment. A former employee who is reemployed will be considered a new employee from the date of reemployment unless the break in service is less than one year, in which case the employee will retain accumulated seniority. Length of service for the purposes of benefits is governed by the terms of each benefit plan. Employees who retire may be eligible, in certain circumstances, to be considered for rehire.

VĚSTNÍK

(15) Documents that the employee may not review include references or reference checks, records of any investigation undertaken by management, medical records, documents related to a judicial proceeding, any document that would violate the confidentiality of another employee, and documents used for employee planning.

(16) Personnel files must be reviewed in the presence of the Human Resources Administrator. No part of the personnel file may be removed from the office by the employee. Photocopies of the file, or portions of the file, may be requested by the employee. Within reason, the Human Resources Administrator will provide photocopies.

(17) If the employee is unhappy with a document in his/her personnel file, the employee, in the presence of the Human Resources Administrator, may write an explanation or clarification and attach it to the disputed document. The employee may also ask to have a document removed from the personnel file. If the Human Resources Administrator agrees, the document may be removed. If the Human Resources Administrator disagrees, the matter may be appealed to the Supreme Lodge.

Section 4. Information Security Management. The SPJST Supreme Lodge and all employees are committed to an effective Information Security Management System in accordance with strategic business objectives. The SPJST Supreme Lodge is committed to the Information Security Management System and shall ensure that this policy is communicated, understood, implemented and maintained at all levels of the organization and regularly reviewed for continual suitability. To that end, SPJST shall:

(a) Develop and implement measurable policies and processes while considering the protection of the organization’s information assets from all threats both internal and external. (b) Foster member confidence by acting in accordance with security standards and check systems.

(c) Continually improve the Information Security Management System through the establishment and regular review of measurable security objectives at relevant functions and levels of the organization. (d) Provide systems for protection against unauthorized access. (e) Ensure confidentiality of data.

(f) Develop, implement, and test a Business Continuity Plan.

(g) Create mechanisms to identify and review the risk and impact of breaches in protected information.

(h) Communicate all pertinent security policies to members and employees.

Section 5. Electronic Mail Procedure.

(a) To the extent permitted by law, SPJST reserves the right to access and disclose the contents of all SPJST server-based email addresses without the consent of the user. SPJST will do so when it believes it has a legitimate business need.

(b) SPJST Supreme Lodge and staff users are advised that SPJST’s electronic mail systems should be treated like a shared filing system with the expectation that communications sent or received on SPJST business or with the use of SPJST resources may be made available for review by any authorized SPJST official for purposes related to SPJST business.

(c) SPJST will not monitor electronic mail as a routine matter, but it may do so to the extent permitted by law as SPJST deems necessary for purposes of maintaining the integrity and effective operation of the SPJST’s electronic mail systems.

Wednesday, September 9, 2015

Section 6. Team Meetings. The officers, Editor/Director of Communication, and Human Resources Administrator will meet together on a weekly basis to review current projects and address workplace challenges and opportunities. Such other Home Office employees as necessary will also participate in these weekly team meetings. CHAPTER 2 SUPREME LODGE OFFICERS

Section 7. Duties of Supreme Lodge Officers.

(a) Supreme Lodge President. The Supreme Lodge President will:

(1) See that the affairs of SPJST are properly conducted according to the by-laws.

(2) Prepare the agenda in cooperation of other officers and Editor/Director of Communication for Supreme Lodge meetings and call special meetings when necessary. (3) Render activity reports to the Supreme Lodge as well as other reports.

(4) Inform the Editor/Director of Communication of all newsworthy events. (5) Make periodic reports to the membership in the Vestnik.

(6) Sign all official instruments and all documents pertaining to the conveyance of property belonging to SPJST.

(7) Request reports or opinions from any officer of SPJST in matters under the supervision of and within the duties of such officer.

(8) Visit local lodges to maintain cordial and fraternal relations among members; see that official affairs of the lodge are properly carried out; and advise lodges on matters relevant to building strong lodges. (9) Arrange for appropriate representation of SPJST.

(10) Appoint three members to the Credentials Committee at least 30 days prior to the convention. (11) Convene and conduct the convention until the election of the convention chair.

(12) Promote a vigorous public relations program on behalf of SPJST. This includes matters relating to establishing and developing SPJST relations with legislators and public officials.

(13) Select the person(s) to record the proceedings of each convention in a manner most suitable under the circumstances.

(14) Prepare and outline programs for group initiation of local lodge members. (15) Develop a ritual regarding chartering and dedicating new lodges and new lodge buildings. (16) Promote reactivation and/or merging of inactive lodges and the organization of new lodges. (17) Promote fraternal activities in local lodges by:

(i) Maintaining inventory of fraternal acts for lodges’ information and reporting to the membership through the Vestnik on a regular basis.

Wednesday, September 9, 2015

(ii) Tracking fraternal activities across the state and seeking good local news coverage. (iii) Coordinating the 50- and 75-year member and Age 96 presentations. (iv) Overseeing Czech language grants and scholarship programs, including donations.

(v) Instituting fraternal and youth programs, where feasible, immediately when an application to form a new lodge has been received. (vi) Hiring a State Youth Director and State Fraternal Activities Coordinator, subject to the approval of the Supreme Lodge, and defining their duties.

(18) Oversee the youth program.

(i) State Youth Director. The State Youth Director position is primarily a field position and the person is to spend at least one-third of working time in the field working with lodges, youth leaders, and district youth counselors. The State Youth Director will be under the supervision of the Supreme Lodge President and will report to the President between meetings and provide written and oral reports at Supreme Lodge meetings.

(ii) District Youth Counselors. District youth counselors are compensated by the Supreme Lodge. The assistant district youth counselor(s) will act in place of the district youth counselor when and if the district youth counselor is unable to fulfill his/her duties, the compensation being the same as for the district youth counselor. The assistants will be paid by the Supreme Lodge upon request by the district youth counselor. If the district wishes to elect other assistants to the district youth counselor, it may do so in accordance with the following stipulations. The number of youth will be based on the quarterly reports: [a] From 50 to 100 active youth—one additional assistant

[b] For each additional 50 active youth—one additional assistant

(iii) Youth Activities. The State Youth Director and the district youth counselors plan and direct activities and programs and formulate rules and regulations for youth activities at all levels. These activities and programs are described fully in the SPJST Youth Club Handbook. Only matters involving financial decisions will be subject to the approval of the Supreme Lodge.

(iv) Youth Fund. The Supreme Lodge contributes annually to the Youth Fund an amount per year set by the delegates on recommendation of the Finance Committee. This will be based on every insured member who has attained the age of 16 years. The sum will be distributed to the districts with 80 percent going to the District Youth Fund, but not less than $500 to each district and 20 percent going to the local lodge youth clubs. This distribution will be based on each district’s and youth club’s annual average of quarterly report totals submitted to the State Youth Director. These funds must be used for the benefit of the youth.

(v) District Youth Achievement Day Allocation. The lodge in each district hosting a district youth achievement day will receive an a location of $750 from the Supreme Lodge. This will be placed in the district’s youth fund.

(vi) Youth Club Handbook. The SPJST Youth Program is governed by the youth club handbook that is reviewed by District Youth Counselors on an annual basis.

(19) Oversee the fraternal program.

VĚSTNÍK

(i) State Fraternal Activities Coordinator. The State Fraternal Activities Coordinator is primarily a field position and the person is to spend at least one-third of working time in the field working with lodges. The State Fraternal Activities Coordinator will be under the supervision of the Supreme Lodge President and will report to the President between meetings and provide written and oral reports at the Supreme Lodge meeting. (ii) Activities. The State Fraternal Activities Coordinator works with the district and the local fraternal activities coordinators to plan and direct activity programs, subject to approval of the Supreme Lodge, and submits interesting and informative news items to the Vestnik on a regular basis.

(20) Oversee human resources.

(i) Human Resources Administrator. The Human Resource Administrator will perform all transactions involving salaries paid to employees; file COBRA reports and Forms 940, 941, and Texas Workforce Commission reports on a timely basis; complete and forward W2 and W3 forms to the Internal Revenue Service at the end of the year; oversee employee hospitalization programs; determine the amount of insurance retained by SPJST, with the approval of the Supreme Lodge, which will cede any amount in excess of that amount; and conduct an annual evaluation of all in-force insurance coverage, including hospitalization, long-term disability, life insurance, and event coverage.

(b) Supreme Lodge Vice President. The Supreme Lodge Vice President will: (1) Manage the Insurance Department, fraternal field managers, and all sales agents representing SPJST.

(2) Serve as Chief Compliance Officer and oversee SPJST’s Compliance Program, ensuring that SPJST’s insurance program is in compliance with the rules and regulations of all state and federal regulatory agencies.

(3) In areas where more sales agents are needed, the Vice President has the right to appoint new sales agents whenever he/she feels it is in the best interest of SPJST. The Vice President must notify the local lodge officers of the appointment of new sales agents at that lodge. (4) Administer sales agents’ contracts and ensure that duties and responsibilities in contract are fulfilled. (5) Develop new insurance products.

(6) Work with the actuary to see that all functions of the insurance department are compliant. (7) Coordinate and implement all marketing and advertising. (8) Oversee the review of all insurance applications.

(9) Prepare necessary material and sales aids for insurance work.

(10) Direct and oversee educational sales programs in every district.

(11) Submit a monthly report of the progress of the Insurance Department to the Vestnik.

(12) Organize new lodges; increase net gain in membership; and maintain a substantial growth of SPJST.

(13) Prepare appropriate publicity for SPJST, working with the Supreme Lodge President.

VĚSTNÍK

(14) Appoint, with the approval of the Supreme Lodge, fraternal field managers whose primary duties shall be to assist local lodge sales agents. The fraternal field managers shall receive such salaries and expense allowances as will be ratified by the Supreme Lodge. A person, in order to be considered for appointment as fraternal field manager, must be a member of SPJST.

(1) Direct and monitor the investments of SPJST. The Chief Financial Officer will maintain an inventory of all bonds, stocks, real estate, and real estate notes. There shall be established and maintained by dues and assessments collected from members and from all other income of SPJST, a fund or funds for payment of death and other benefits and for the accumulation of reserves on certificates as provided by law and/or the benefits certificates, and for the expense of management and extension of SPJST. The Supreme Lodge shall have supervision over the operations of the funds of SPJST, as recommended by the Chief Financial Officer, which shall be invested in accordance with the investment policy statement adopted by the Supreme Lodge and all applicable laws. The Chief Financial Officer will recommend to Supreme Lodge officers the sale or purchase of bonds and stocks in accordance with the Investment Policy Statement. (2) Maintain investment records and file reports for the Texas Department of Insurance and independent auditors. Copies of the Texas Department of Insurance report will be sent to Supreme Lodge members and made available to local lodges in electronic format. (3) Serve as corporate secretary; attest to all official documents; reply to correspondence; and maintain the official seal of SPJST. (4) Authorize banking and financial relationships.

(i) General Income Fund. All money received by the Supreme Lodge in accordance with the laws of SPJST governing payment of premiums, as well as all other income, shall be deposited in SPJST’s name, in an approved depository bank or banks, where same shall be held, retained, handled, disbursed and allocated in accordance with the laws of SPJST, as herein set out and prescribed. Such depository bank or banks must be approved in advance by the Supreme Lodge.

(ii) Any two or more officers with the advance consent of the Supreme Lodge have the authority to make transfers of funds and pay all general expenses of SPJST. (iii) All checks issued by the Supreme Lodge in an amount exceeding $500 shall bear the signatures of any two officers.

(iv) Any check totaling $500 or less shall bear the signature of one officer.

(5) Maintain complete records and accounting of certificate loans, Universal Life partial surrenders, surrenders, and annuity withdrawals and report information to the IRS.

(6) Maintain accurate records of application for real estate loans and deliver to legal counsel particular information pertaining to them. The Chief Financial Officer (Secretary-Treasurer) will review, screen, and refer applications to a committee, report on delinquencies at each Supreme Lodge meeting and to the IRS; service mortgage loans; receive payments; and collect on delinquencies. The Chief Financial Officer will report on the status of all delinquent loans in every Supreme Lodge meeting.

Wednesday, September 9, 2015

(7) Oversee and maintain real estate belonging to SPJST and its security. The Chief Financial Officer (Secretary-Treasurer) will pay all property taxes for the Home Office building.

(8) Obtain the bond for Supreme Lodge members. The amount of the bond shall be at least the minimum prescribed by regulatory guidelines.

(9) Prior to each Supreme Lodge meeting, submit a quarterly report to the Supreme Lodge of all services performed. (10) Maintain an inventory of all property belonging to SPJST.

(11) Supervise the payment of death claims. A monthly report will be submitted to the Vestnik of all members who die, stating their names and ages at the time of death and duration of membership in SPJST.

(12) Oversee the accounting and information technology functions of SPJST.

(d) Director of Accounting/Information Technology Services (Financial Secretary). The Director of Accounting/Information Technology Services (Financial Secretary) will: (1) Maintain accounts of various funds of SPJST.

(2) Maintain the mailing list of Vestnik subscribers.

(3) File all monthly reports, statements, and supplements.

(4) Keep accurate accounts of all the receipts and disbursements and present these books to the Supreme Lodge directors for audit.

(5) Prepare copies of the state examiner’s report, after acceptance by the Supreme Lodge, and mail to lodges and members upon request. (6) Submit a quarterly audited account of Vestnik income and expenses. (7) Publish annually, no later than June 1 of each year, an annual valuation report of SPJST, based on the report of the Texas Department of Insurance.

(8) Maintain an exact list of all members of every lodge, and on request of the local lodge secretary, mail such officer a list of members of his/her lodge.

(9) Check the books of any local lodge any time it is deemed such a procedure is necessary for the benefit of the Supreme Lodge, local lodge, and the entire SPJST. He/she also has the power and authority to impound the official books and records of the local lodge offices, on b e half of the Supreme Lodge, if such action is deemed necessary.

(10) Notify each lodge in October of the year preceding the convention as to the number of qualified votes in order that each lodge may elect the proper number of delegates to the convention. (11) Receive premiums and money coming to the treasury of SPJST and deposit without delay in the various banks selected for that purpose by the Supreme Lodge, in SPJST’s name.

(12) File all required Internal Revenue Service forms on a timely basis.

Wednesday, September 9, 2015

(13) Manage the electronic data processing (EDP) hardware and software and security on the computer system for SPJST. (14) Monitor all applicable mortality tables.

(15) Reconcile all bank transactions and maintain an exact list of outstanding checks.

(16) Furnish the Chief Financial Officer (Secretary-Treasurer) with monthly statements showing the net gain from operations. (17) Supply all information to the Texas Department of Insurance and independent auditors when audits are conducted.

(18) Forward quarterly and annual reports to the Texas Department of Insurance, National Association of Insurance Commissioners (NAIC), American Fraternal Alliance, and A.M. Best. (19) Monitor IRA (individual retirement account) and non-IRA contributions.

(20) Account for and escheat unpaid claims and unpaid funds to the state as prescribed by state law within the legally established time period. CHAPTER 3 DISTRICT DIRECTORS

Section 8. Duties of Directors. The Supreme Lodge Directors will:

(a) Review a list of all bonds, stocks, and real estate loans upon which any installment of principal or interest is delinquent at quarterly Supreme Lodge meetings. (b) Examine all books and point out errors to the Supreme Lodge officers.

VĚSTNÍK

month period will revert to SPJST, unless approval has been extended by the Supreme Lodge to extend the date of the discretionary account.

(2) Purpose. The purposes of the Discretionary Fund account are twofold: (i) To assist worthy local charitable ventures.

(ii) To raise the profile of SPJST within the district.

(3) Areas of Giving. Discretionary funds are intended as charitable funds by the director and not as supplemental compensation for local lodges, districts, and/or funding for charitable projects previously designated to receive convention mandated funding, incentive award funds, and/or statewide organizational support from SPJST. While such a use of the discretionary funding is not expressly prohibited, it is strongly recommended that such items be provided and accounted for through SPJST’s annual budgeting process. Suggested areas of giving include but are not limited to the following:

(i) Fundraising activities such as local benefits, charitable dinners, annual fund drives, or youth fairs, including advertising in programs related to these events. (ii) Sponsorship of organized sports teams or sporting activities. (iii) Veterans’ organizations and their programs.

(iv) Arts related activities, such including performances, concerts, art shows and theatrical productions. (v) Programs that specifically benefit local communities, schools, churches, and/or civic groups.

(vi) Construction and maintenance of recreational facilities, such as ballparks, bleachers, playground equipment, and trails.

(c) Authorize that the certified public accountant (CPA) retained by SPJST conduct a semiannual inspection and inventory of all general securities held by SPJST in physical form in the bank safety deposit box. Such CPA shall provide a verified inventory of all general securities owned by SPJST in physical form and under bank custody account agreements and report the results of the inspection to the Supreme Lodge.

(4) Giving to Individuals/Families. Giving to individuals and or families with immediate and/or extraordinary needs is permissible; however, director is urged to use discretion in such cases.

(e) Submit to the Vestnik a report every six months to the members of the directors’ investigation and supervision.

(6) Fund Maintenance. The Fraternal Department maintains a running tally of Discretionary Fund giving on a district by district basis.

(d) Inspect land and recommend the price for which the land be sold, together with the Supreme Lodge President and Chief Financial Officer (Secretary-Treasurer), before any real estate belonging to SPJST is sold in whose district the land is situated.

(f) Cooperate with all lodges and members in the director’s respective district.

(g) Represent the district that elected him/her in all Supreme Lodge meetings and present to the Supreme Lodge all the affairs and recommendations of his/her district.

(h) Report to the district on all matters pertaining to the welfare of SPJST.

(i) Assist all Supreme Lodge officers, if and when requested, within his/her district.

(j) Administer the Directors’ Discretionary Fund Account.

(1) The Supreme Lodge will provide a Discretionary Fund account to each director. The Discretionary Fund account will be established at the beginning of each year. Any unexpended balance at the end of the 12-

(5) Publicity. In order to maximize publicity, directors are encouraged to obtain a photo of the check presentation, preferably in a public and/or lodge forum and to submit the photo along with relevant information to the Vestnik. Every effort will also be made to obtain local publicity when images and information are submitted in a timely fashion.

CHAPTER 4 VESTNIK/COMMUNICATION DEPARTMENT

Section 9. Editor/Director of Communication.

(a) Supreme Lodge Discussions. The Editor/Director of Communication will be included in any Supreme Lodge discussions involving the Vestnik/Communication Department.

(b) Dismissal. The Publication Committee has the obligation to see that the Editor/Director of Communication does not print articles inimical to the best interests of SPJST and that he/she otherwise fulfills his/her obligation. The Editor/Director of Communication may be dismissed after first being recommended for dismissal by a majority of the Publication Committee. Following a thorough investigation, including a hearing of such charges and 20 days advance notice to the accused, the Supreme Lodge may discharge the

VĚSTNÍK

Editor/Director of Communication from office by a two-thirds vote. The authority of dismissal rests with the Supreme Lodge whose decision is by twothirds vote. The Editor/Director of Communication may be dismissed for any of the following offenses: (1) Incompetence, which means he/she does not manage the Vestnik satisfactorily in a dignified and professional manner. (2) Willfully refusing cooperation with the Publication Committee. (3) Using the Vestnik for personal promotion. (4) Promoting ideas harmful to SPJST.

Section 10. SPJST’s Official Publication — Vestnik.

(a) Subscriptions. A Vestnik shall be sent to SPJST members as shown on the records of SPJST, except that if SPJST records show that two or more members have the same mailing address, an official publication mailed to one of them is deemed mailed to all of them at the same address unless a separate copy is requested. Names and addresses of members requesting the Vestnik must be furnished to the Home Office. Schools, colleges, and universities offering and instructing the Czech language for credit will receive the Vestnik free of charge upon request. (b) Vestnik Content. The Vestnik shall contain material grouped in sections, including original editorial articles, various reports, a youth section, and a Czech heritage/cultural section. A portion of the printed material shall be in the English language. In the event it becomes necessary, a larger portion thereof may be in the English or Czech language. (1) Letters should be of purely fraternal spirit, without political, religious, or anti-religious inclinations.

(2) Each Vestnik shall include the contact information for Supreme Lodge members, Editor/Director of Communication, and all standing committee members. (3) The Vestnik shall have lessons in the Czech language.

(4) Any notice, report, or statement required by law, including notice of election, may be published in the Vestnik.

(5) During the month of May, names and addresses of district and local lodge secretaries will be published in the Vestnik. (6) At least 30 days prior to the convention, the Vestnik will include preconvention reports of the Supreme Lodge officers and directors and standing committees and a list of delegates’ names and lodge numbers.

(7) Any suggestions for the improvement of the contents of the Vestnik should be referred to the Editor/Director of Communication or to the chairman of the Publication Committee, and the committee will then direct the Editor/Director of Communication to make the changes accordingly.

(c) Objectionable Material. The Publication Committee will make decisions concerning objectionable contributions in the following manner: (1) If the Editor/Director of Communication considers any matter questionable or harmful to SPJST, he/she shall mail a copy of the material in question to each member of the Publication Committee, who shall respond by return mail.

(2) If the material is considered acceptable by four members of the committee, the Editor/Director of Communication will present the article to the Supreme Lodge officers for final approval before publishing the article in its entirety, without comment or remarks.

Wednesday, September 9, 2015

(3) No letter may be published in its censored form without consent of the writer. Objectionable material will be returned to the writer by the Editor/Director of Communication. If the Editor/Director of Communication fails to submit material turned down by him/her, the writer may submit the letter to the Publication Committee Chairman and the decision of the Publication Committee will override the opinion of the Editor/Director of Communication.

Section 11. Lodge Mail-Outs. The SPJST Home Office provides one annual, complimentary mail-out to each lodge and to each youth club, upon request by the local lodge or youth club.

Section 12. Parade Floats. The SPJST Home Office will provide a decorated float for parades in cities and communities of local lodges, upon request by the local lodge or youth club. CHAPTER 5 DISTRICTS

Section 13. Duties of District Officers. (a) President.

(1) Preside at all district meetings utilizing basic parliamentary procedure and conduct business according to an agenda.

(2) See that all by-laws, rules, and regulations are observed by the members assembled. (3) Appoint the majority of all appointed committees. (4) Sign all letters and other documents.

(5) Represent the district in public relations and official SPJST functions. (6) Work with other district officers to coordinate district activities.

(7) Perform all duties and obligations as set out by the rules and regulations of the district.

(b) Vice President.

(1) Assist the president in meetings.

(2) Appoint the minority of members on all appointed committees.

(3) Serve as the fraternal activities coordinator for the district if a separate position is not elected.

(4) Perform all duties and obligations as set out by the rules and regulations of the district.

(5) Assume the president’s duties in the event of incapacity, absence, resignation, or death.

(1) Maintain a record of attendance at all meetings. (2) Prepare and direct district correspondence.

(3) Maintain correspondence with the Home Office on district changes and other important information. (4) Maintain accurate minutes of all deliberations in the meetings as provided in the constitution and by-laws.

Wednesday, September 9, 2015

(5) Forward a list of district officers to the Chief Financial Officer (Secretary-Treasurer) within 30 days after the district election.

(6) Receive all mail and reply thereto at the request of the president of the district.

(d) Treasurer.

(1) Receive all money.

(2) Pay all bills of the district.

(3) Receive written report from all committees within 48 hours showing receipt and handling of all funds.

(4) Render to the membership periodic reports of all district assets and resources, monetary, and other.

(5) Submit his/her books, including all checks and statements, to the auditing committee at the district meeting. The books must be audited at least once per year.

(e) Fraternal Activities Coordinator.

(1) Suggest, plan, and coordinate all fraternal activities for the district. (2) Work with committee members to accomplish fraternal activities. (3) Keep and maintain accurate records of district fraternal services. (4) Work with the district officers to set goals.

(5) Comply with requests from the Home Office for fraternal services and other reports on district fraternal activities.

(f) Reporter.

(1) Write interesting articles and district news for the Vestnik and local newspapers. (2) Photograph and record district events for posterity and news articles. (3) Submit event photographs to the Vestnik and local newspapers. (4) Coordinate publicity for the district.

(g) District Youth Counselor. (Complete duties are defined in the current SPJST Youth Club Handbook) (1) Organize and conduct district camp.

(2) Initiate and conduct all youth programs at district meetings.

(3) Plan and coordinate at least one district-wide social for all youth members in the district per year, provided funds are available. (4) Conduct annual district youth leader training.

(5) Organize and conduct District Youth Achievement Day.

(6) Visit each youth club in his/her district at least once during the year.

VĚSTNÍK

(7) Communicate with youth leaders in the district on a regular basis (at least once per quarter). The DYC will conduct an orientation with a new youth leader.

(8) Publicize district youth events, including YAD and camp, in the Vestnik and local media outlets (newspaper, radio, television, community bulletins, internet), when possible.

(9) Submit an annual report to the State Youth Director and Supreme Lodge President no later than 30 days following the district’s annual spring meeting.

(10) Submit quarterly reports, including youth club contacts and district youth fund activity, to the State Youth Director.

Section 14. District Planning Meetings. The district director may attend meetings of the district officers in an advisory or planning capacity but does not have a vote. Section 15. District Officer Resignation. In the event of the resignation of the president between district meetings, the first vice president will automatically assume that office. Any other positions vacated between district meetings shall be filled by a person designated by a majority of the other district officers who will then seek ratification of their appointment at the next district meeting.

Section 16. District Annual Allocation. Each district will receive an allocation of $3,500 per year from the Supreme Lodge to be placed in the district’s General Expense Fund. This sum is to be used by the district to pay the lodge hosting the district meeting $750 per meeting with the balance being used to defray the expenses of the district and to promote growth for SPJST.

Section 17. District Audit Committee. The district must elect or appoint an audit committee, consisting of three or more members. If appointed, the president appoints the majority of the committee, and the vice president appoints the minority. This is to be done in the annual meeting. The duties of the audit committee are to audit at least once a year the income and expense of the operation of the district and the district youth. This information will be reported to the district. Section 18. District Meeting Order of Business. (a) Convening of the meeting (b) Pledge of Allegiance

(f) Recognition of guests (g) Reading of minutes

(h) Tribute to departed members

(i) Reading of 50- and 75-year and Age 96 members (j) Treasurer’s report

(k) District Youth Counselor’s report

(l) Reports of standing committee representatives (By-law, Finance, Insurance, and Publication) (m) Supreme Lodge report

Wednesday, September 9, 2015

VĚSTNÍK

(n) Director’s report (o) Old business

(p) New business

(q) Audit committee report

(r) Election of district officers

(s) Selection of site, time, and date of fall fun day/spring meeting (t) Adjournment

Section 19. Local Lodges.

CHAPTER 6 LOCAL LODGES

(a) In the event that (1) a lodge posts an annual lapse rate of 20 percent or greater on the number of new life insurance certificates issued and/or (2) demonstrates a sustained inability to meet essential fraternal directives, the lodge will be considered by the Supreme Lodge to be operating at “marginal” status. Members belonging to marginal lodges or inactive lodges as determined by an earnest effort of review and consideration, will be subject to reassignment to an active lodge, pending necessary protocol and notification.

(b) Each lodge member shall receive notification from the Home Office of the decision to reassign his/her membership to any active SPJST lodge in the State of Texas, along with a complete listing of lodges. Should the member fail to respond to the request for reassignment within one month, he/she will be assigned by the Home Office to an active SPJST lodge nearest his/her current address on file with the Home Office. In the event that there is no address on file or if the member lives out-of-state, the membership shall be reassigned to the active lodge nearest the regular meeting place of the old lodge.

(c) Lodges agreeing to accept this special class of reassigned members will not be held accountable for any lapses in membership that may be attributed to the reassigned members for a period of 36 months, calculated from the date of reassignment. This relates, especially, to any incentives that the lodge may be eligible for under the guidelines of any prevailing lodge incentive program. As such, any lapses credited to the reassigned members will not be held against the lodge that votes to accept reassigned members.

(d) Lodges that have experienced a reassignment of membership will remain in “inactive” status for a period of five years from the time of reassignment. At some point during this 60-month period, the Supreme Lodge and/or local membership may find it practical to “reorganize” the lodge. As such, it will not be necessary to recharter the lodge but merely to “reorganize.” Should a period of five years lapse from the time of reassignment, the lodge will be officially “disbanded” and require the reassignment of a new number for the purpose of organizing and chartering. This measure will be retroactive to include any lodges which over the last 24 months have had members reassigned to active lodges. (e) Once the period of five years lapse from the time of reassignment and provided that there are no foreseeable plans to reorganize the lodge, the lodge will be officially “disbanded” and assets residing in the Lodge Management Account and previously assigned to a lodge where members have been reassigned will be redirected to the receiving lodges in an amount proportionate to the number of members who had been reassigned.

(f) Upon occasion there arises the desire to pay appropriate and due respect to the lodge for the fraternal commitment which may have predated the reassignment of members. In the event that members are assigned from a previously active and longstanding SPJST lodge, the Supreme Lodge, shall at its

discretion, designate an official and honorable “retiring” of the lodge and its identifying number much the same way in team sports that a player’s number is sometimes “retired” as a tribute to that individual for his or her valued commitment. In that regard, retiring a lodge number — especially one that reflects the lives and dedication of generations of SPJST members — should receive deserved honor and recognition.

Section 20. Local Lodge Officers.

(a) Officers receive such compensation for their services as members agree on at regular meetings.

(b) In the absence of the local lodge president, the local lodge vice president, and in the absence of both the president and vice president, the secretary, or in his/her absence, any member, shall call the meeting to order and a temporary president be elected to hold office during the absence of the president or vice president, unless such office is terminated by the entrance of the president or vice president. (c) Vacancies in an office, except that of president, which will be filled by the first vice president, shall be filled by election to be held at the next regular lodge meeting.

(d) Officers who are proved to be derelict in their duties may be removed from office, provided complaints are made by members of the local lodge. Complaints may be made by members at a hearing before the Supreme Lodge, whose determination will be final. Section 21. Duties of Local Lodge Officers.

(a) President.

(1) Preside at all lodge meetings utilizing basic parliamentary procedure and conduct business according to an agenda.

(2) Assure that all by-laws, rules, and regulations are observed by the members assembled. (3) Visit sick members from time to time.

(4) Appoint the majority of all appointed committees. (5) Sign all letters and other documents.

(6) Represent the lodge in public relations and official lodge functions. (7) Work with other lodge officers to coordinate lodge activities.

(8) Perform all duties and obligations as set out by the rules and regulations of the lodge.

(b) Vice President.

(1) Assist the president in meetings.

(2) Appoint the minority of members on all appointed committees.

(3) Serve as the fraternal activities coordinator for the lodge if a separate position is not elected. (4) Perform all duties and obligations as set out by the rules and regulations of the lodge.

Wednesday, September 9, 2015

(5) Assume the president’s duties in the event of incapacity, absence, resignation, or death.

(1) Maintain a record of attendance at all meetings. (2) Prepare and direct lodge correspondence.

(3) Maintain correspondence with the Home Office on lodge changes and other important information. (4) Maintain accurate minutes of all deliberations in the meetings as provided in the constitution and by-laws.

(5) Forward a list of lodge officers to the Chief Financial Officer (Secretary-Treasurer) within 30 days after the local lodge election.

(6) Receive all mail and reply thereto at the request of the president of the lodge.

(d) Treasurer.

(1) Collect local dues from members.

(2) Maintain an accurate record thereof.

(3) Submit his/her books, including all checks and statements, to the audit committee at the request of the local lodge. The books must be audited at least once per year. (4) Receive all money.

(5) Render to the membership periodic reports of all lodge assets and resources, monetary, and other. (6) Pay all bills of the lodge.

(7) Receive written report from all committees within 48 hours showing receipt and handling of all funds.

(e) Fraternal Activities Coordinator.

(1) Suggest, plan and coordinate all fraternal activities for the lodge. (2) Welcome and introduce all new members.

(3) Work with committee members to accomplish fraternal activities. (4) Keep and maintain accurate records of lodge fraternal services. (5) Work with the lodge officers to set goals.

(6) Comply with requests from the Home Office for fraternal services and other reports on lodge fraternal activities.

(f) Reporter.

(1) Write interesting articles and lodge news for Vestnik and local newspapers.

(2) Photograph and record lodge events for posterity and news articles. (3) Submit event photographs to Vestnik and local newspapers. (4) Coordinate publicity for the lodge.

(g) Youth Leader.

VĚSTNÍK

(1) Consult with the local lodge president on important youth club decisions.

(2) Present a monthly youth club report to the youth club and to the adult lodge. (3) Coordinate and plan with the youth club president the meeting agenda and the order of business.

(4) Supervise youth club business handled by youth club officers and committee chairmen.

(5) Guide youth club members in planning socials and trips. There must be at least two socials annually; however, there is no limit to the number of socials the membership and leadership wish to have. One each month is suggested. (6) Coordinate and supervise all fundraising activities.

(7) Attend district youth leader training class and state youth leader’s workshop for training and updates on the youth program. (8) Oversee monthly youth club meetings.

(9) Participate at district functions and district activities, including district meetings. (10) Attend all youth club committee meetings as an advisor.

(11) Communicate with youth club members’ parents on a regular basis concerning youth club activities via newsletters, calendar of events, telephone, email, etc. (12) Submit quarterly reports with merit point information on time to the State Youth Director.

(13) Guide youth in preparing for District and State YAD (craft, talent, royalty, scrapbook, poster, and beseda). (14) Assist the DYC in coordinating and preparing District YAD.

(15) Assist at State YAD, if requested by DYC or State Youth Director.

Section 22. Local Lodge Committees.

(a) The lodge may elect or appoint committees as deemed necessary.

(b) The lodge must elect or appoint an audit committee, consisting of three or more members. If appointed, the president appoints the majority of the committee and the vice president appoints the minority. This is to be done in the annual meeting. The duties of the audit committee are to audit at least once a year the income and expense of the operation of the lodge. (c) When a member resigns from an appointed committee or otherwise vacates such an appointed position, the officer who initially appointed such member appoints the new member.

Section 23. Local Lodge Order of Business. (a) Convening of the meeting (b) Pledge of Allegiance

Wednesday, September 9, 2015

VĚSTNÍK

(d) Roll call of officers

(e) Recognition of guests (f) Reading of minutes

(g) Announcements of income and disbursements (1) Treasurer’s report

(2) Hall manager’s report

(h) Reading of communications received (i) Reports of officers and committees

(j) Reading of names of applicants and vote of acceptance (k) Initiation of new members (optional) (l) Unfinished business (m) New business

(n) Election of lodge officers (at annual meeting)

(o) Motion for amending local lodge rules and regulations (at annual meeting) (p) Adjournment

CHAPTER 7 DEATH CLAIMS

Section 24. Death Claims. Funeral expenses where the member so designates in his/her application for membership or change of beneficiary, and the face amount of the certificate not to exceed the extent of $10,000 where the member does not mention any sum for his/her funeral expense in his/her application for membership, or in any change of beneficiary, may be paid for his/her funeral expenses. (a) Obligations owed SPJST and local lodge may be deducted from the proceeds of the certificate.

(b) Should the local lodge be unable to locate and contact the beneficiary when a certificate matures because of death of the insured, or in the event the designated beneficiary predeceases the insured or is not legally entitled to receive the proceeds of the certificate, then the local lodge or the Supreme Lodge may guarantee payment of expenses of burial of such a deceased insured up to the face amount of the certificate not to exceed $10,000. This amount shall become a charge against this certificate of the deceased insured, and such amount shall be deducted from the proceeds of said certificate and be retained by SPJST and paid to the local lodge or to the person, firm or corporation to whom such guarantee was made. Upon request, the beneficiary or beneficiaries shall be shown a statement of the funeral expenses of the deceased-insured. (c) Other creditors of the deceased have no claims against such funds.

(d) Should the beneficiary, under any matured fraternal benefit certificate be of unsound mind, SPJST shall hold in trust the proceeds of said certificate, less any amount owing to SPJST and to the local lodge, for the benefit of said beneficiary until such time as a legal guardian has been appointed of the estate of said beneficiary, and until the Supreme Lodge is furnished with a letter of guardianship and the appointment of the guardian, received from the court having jurisdiction of the estate of said beneficiary, or until certified copy of adjudication of sanity is delivered to the Supreme Lodge, as the case may be, said proceeds shall be paid to said legal guardian or to said beneficiary.

(e) Should the beneficiary under any matured fraternal benefit certificate be a minor, as defined by the laws of the State of Texas, then SPJST shall hold the proceeds of said certificate, less any amount due SPJST or the local lodge, for the benefit of said minor until such time as a legal guardian has been appointed over the estate of such minor, and until the Supreme Lodge is furnished with a certified copy of the guardianship proceedings and appointment of the guardian, in a court having jurisdiction of the estate of said minor, or until said minor has become of age, whereupon, as the case may be, such proceeds shall be paid to said legal guardian or to said beneficiary. While such funds are held, interest may be paid thereon at a rate determined by the Supreme Lodge. CHAPTER 8 MORTGAGE LOANS

Section 25. Mortgage Loans. Application for real estate must be filed on forms approved by the Supreme Lodge.

(a) The Chief Financial Officer (Secretary-Treasurer) is required to have such offered security evaluated by the director in whose district the security is situated and such director is to forward the written evaluation report.

(b) Each director is responsible for seeing that there is ample and sufficient security to justify any loan that is applied for in his/her respective district. (c) The director, Chief Financial Officer (Secretary-Treasurer), or investment committee may request and obtain a local appraisal by a state-certified real estate appraiser or a state-licensed real estate appraiser or an appraiser with another designation or accreditation or realtor or broker with such designation approved by the Supreme Lodge whenever deemed necessary or advisable.

(d) In the event the application does not exceed $75,000, such evaluation shall be made by the director within whose district the offered security is situated. If the application exceeds $75,000, then such evaluation shall be made by the director within whose district the offered security is situated, together with one other director. Such evaluation report must be delivered to the Supreme Lodge immediately. The Chief Financial Officer (Secretary-Treasurer) will obtain a credit report on any application. In refinancing of existing SPJST loans, only one director shall be required to make the evaluation.

(e) Any member in good standing who applies for a loan and receives a loan with SPJST must keep his/her life insurance certificate(s) in force during the life of the loan. Failure to do so will result in an automatic 2 percent increase in the interest rate on the loan.

(f) Applications for loans on real estate are evaluated by the director of the district on forms approved by the Supreme Lodge. Each director is responsible for seeing that there is ample and sufficient security to justify any loan that is applied for in his/her respective district. The application, properly endorsed, is sent to the Home Office without delay. The final approval of the application is made by the SPJST Investment Committee, composed of the Supreme Lodge President, Supreme Lodge Vice President, and Chief Financial Officer (Secretary-Treasurer). Any member whose application for a loan has been rejected may appeal to the Supreme Lodge at its next meeting. (g) Whenever new construction is involved, directors make the final evaluation. CHAPTER 9 CERTIFICATE LOANS

Section 26. Certificate Loans. After the payment of premiums for at least the number of years for which the value is first shown in the table of values, a member may obtain a loan against his/her reserve but not in excess of the loan value specified in the tables of his/her certificate.

Wednesday, September 9, 2015

(a) The procedure and forms required for processing a certificate loan shall be determined by the Chief Financial Officer (Secretary-Treasurer). The procedure approved by the Supreme Lodge must be in compliance with the state insurance laws and must be in accordance with the provisions specified in the member’s life insurance certificate. The table of values in the member’s life insurance certificate will be used to determine the maximum amount of the loan.

(b) The Supreme Lodge, with the consent of the Commissioner of the State Department of Insurance, may discontinue making certificate loans. Interest on certificate loans shall be payable in advance from the date of the loan to the end of the current certificate year and annually in advance thereafter.

(c) The amount borrowed, together with accrued interest thereon, payable annually in advance at a rate of interest set by the Supreme Lodge and at a rate specified in the certificate, shall be an indebtedness to SPJST against the member’s death benefit and may be repaid by the member at any time or shall be deducted from amount of death benefit payable upon the death of the member.

(d) Whenever the loan, together with accumulated interest, exceeds the cash value of the certificate, the Chief Financial Officer (Secretary-Treasurer) shall at once give notice of such facts to the certificate holder, and if the member does not reduce his/her indebtedness on said certificate his/her insurance automatically becomes null and void, and he/she ceases to be a member of SPJST, unless he/she has other insurance in force with SPJST.

(e) After payment of premiums for at least the number of years for which a value is first shown in the table of values, the insured, within 60 days from the date of any premiums due, may elect by notice to SPJST in writing, accompanied by the certificate for endorsement, in lieu of all other non-forfeiture benefits provided therein to secure non-participating paid-up insurance. The amount of paid-up insurance shall be such as the cash or loan value of the certificate, less any indebtedness at such premium due date will purchase as a net single premium at the then attained age of the insured, provided that such paid-up insurance shall not include any double indemnity or disability benefits.

(f) After payment of premiums for at least the number of years for which a value is first shown in the table of values, upon the member’s application therefore and upon surrender of the certificate, at any time within 60 days after the due date of any premium, SPJST will pay the net surrender value of the certificate in cash. The net surrender value should be the cash value to the date of surrender shown in the table of values therein, decreased by the accumulated amount of any and all indebtedness hereunder.

(g) After payment of premiums for at least the number of years for which a value is first shown in the table of values, the insured within 60 days from the date of any premiums due may elect by notice to SPJST in writing, accompanied by the certificate for endorsement, in lieu of all other non forfeiture benefits provided therein, to secure non-participating extended term insurance. The term of such extended term insurance shall be such as the cash or loan value of the certificate, less any indebtedness at such premium due date will purchase as a net single premium at the attained age of the insured. CHAPTER 10 ASSIGNMENTS

Section 27. Assignments. No assignment of the certificate shall be binding upon SPJST until the original or copy is filed with SPJST at the Home Office, and the Home Office shall have made written acknowledgment thereof. SPJST assumes no responsibility for the validity of any assignment and any claim hereunder by an assignee shall always be inferior to those of SPJST to secure any indebtedness against this certificate, whether such indebtedness shall be created before or after any assignment.

CHAPTER 11 DUPLICATE CERTIFICATE

VĚSTNÍK

Section 28. Duplicate Certificate. If a member loses his/her certificate, he/she may secure a duplicate upon application to the Supreme Lodge, but must sign a statement, acknowledged before a notary public, that he/she lost the certificate. In every case where a new certificate is issued, it must contain the date of issuance of the original certificate and age of the member at the time of joining SPJST. CHAPTER 12 TRANSFER OF MEMBERSHIP

Section 29. Transfer of Membership. Every member may secure a transfer of membership if he/she has paid all premiums, dues, or assessments, if any, plus any other obligations, to the local lodge. Any member who desires to transfer to another lodge must complete a transfer request certificate from the Home Office. Local lodge officers must act on the request at the first meeting after the receipt of transfer. The Home Office will change the lodge number upon receipt of the transfer request and notify the old lodge of the change. The Home Office will forward the transfer request to the new lodge for approval. A member holding a transfer request must file such request with the lodge to which he/she wishes to transfer within one month after issuance of such transfer request. If he/she is not accepted by the new lodge at the succeeding meeting, he/she may request admission at the succeeding meeting. If he/she is not then accepted, he/she must return his/her transfer request to his/her previous lodge and the new lodge will return the transfer request to the Home Office marked “not accepted,” and the Home Office will notify the old lodge that the member is returning, and he/she must pay all premiums and dues covering the intervening period of time. If he/she is accepted by the lodge to which he/she requests transfer then the premiums and dues will be paid to that lodge. If the member has his/her local lodge dues prepaid, the amount is sent to the lodge to which he/she is transferring. —SPJST—

2016 Important Dates to Remember

According to the By-Laws of SPJST from the 2012 Convention, under “Convention” on page 6, “anyone seeking a Supreme Lodge office must announce candidacy at least 120 days prior to convention.” Under “Supreme Lodge” on page 4, a screening process will be established “for the purpose of reviewing all qualifications of submitted candidates for Supreme Lodge Officers, Editor/Director of Communication, and seven directors. The screening committee has the right to gather additional background information, submit the slate of qualified candidates to the delegates 90 days prior to convention, and shall have the discretion to consult with personnel with legal and human resource expertise to assure compliance with current labor laws. The By-Law Committee will be the screening committee.” Saturday, February 13 - 120 Days Prior to Convention Candidacy for Supreme Lodge President, Vice President, Secretary-Treasurer, Vestnik Editor/Director of Communication, and seven district director positions must be announced. Sunday, March 13 - 90 Days Prior to Convention By-Law Committee submits slate of qualified candidates to delegates through the Vestnik.

Wednesday, April 13 - 60 Days Prior to Convention Deadline for recommendations for changes to the By-Laws. Recommendations must be signed and submitted to any member of the By-Law Committee. Wednesday, May 11 Pre-Convention Vestnik published containing By-Law and Finance Committee recommendations, pre-convention reports, and other convention information. Monday, June 13 32nd SPJST Convention Convenes • Killeen Civic and Conference Center

VĚSTNÍK

ERM, ORSA and Corporate Governance: The Small Company Challenges By Carol S. Stern, B.A., FLMI, AIRC, ACS Senior Consultant, First Consulting & Administration, Inc.

Editor’s Note: Special thanks to First Consulting and Senior Consultant Carol S. Stern for permission to reprint this article. This article and many others can be found at http://firstconsulting.com/news-room/articles.

Executive Summary Challenges for small companies in 2015 and beyond will require new focus on improving corporate governance structures, refining risk management governance, and ensuring that knowledgeable and qualified Board members make these decisions. The NAIC push to enact new model laws and regulations that do not exempt small companies or fraternal insurers will require some dramatic structural and procedural changes that take time and resources to implement.

Solvency Modernization Initiative (SMI) The National Association of Insurance Commissioners (NAIC) continues its push for new regulation and laws to complete SMI. SMI is a post-financial crisis critical self-examination to update the United States companies’ insurance solvency regulation framework. The SMI scope includes the entire U.S. financial regulatory system and all aspects to the financial condition of an insurer, and is not limited to the evaluation of solvency-related areas. The SMI focuses on key issues such as capital requirements, governance and risk management, group supervision, statutory accounting, financial reporting, and reinsurance.

New NAIC Corporate Governance Models With the adoption of the Corporate Governance Annual Disclosure Model Act (CGAD) and supporting Model Regulation in November 2014 the NAIC has made an affirmative decision not to exempt small companies from any corporate governance requirements. In fact, the Working Group highlighted the need for small companies to focus on improving their corporate governance structure, in part by getting their risk management governance framework solidly in place with ongoing monitoring and reporting, and by establishing requirements for the Board as a whole to include the knowledge, industry experience, and skilled qualifications to make decisions based on the risk tolerance and risk profile of the company.

Meeting the New Corporate Governance Challenge as a Small company The new model act and regulation will require all companies to tighten and document their governance structures, by-laws, charters, policies, and procedures in order to assure that the Board of Directors and any of the Board committees have been assigned the ultimate responsibility for governing the insurer. An annual filing is required to document how the corporate

governance of the Company is providing proper leadership, including documentation of the roles and responsibilities of a risk management senior team, the Board, the CEO, and Chairman of the Board. The NAIC models require a governance structure that facilitates the Board and key executive roles to act in good faith and in a manner the Director or Board of Directors reasonably believe to be in the best interests of the Company.

New Qualification Requirements for Board Directors The most significant challenge for many small companies including small fraternal and mutual insurers (who are not exempt from these models) may be the qualification requirements for Board members. Regulators will be reviewing the make-up of the Board for appropriate background, experience, and integrity to fulfill their prospective roles. The Board as a whole should possess the core competencies needed to oversee the insurance company. Core competencies cited by the models are accounting or finance; business judgment; industry knowledge; management; leadership; as well as vision and strategy. The Board will also need to create suitability standards (position descriptions) for officers and key persons in control functions like the CEO, the Board Chair and the committee chairs, to assure they have the appropriate expertise, experience, and professional integrity to adequately fulfill their responsibilities. The Company charter or other Board documents must clearly articulate the responsibilities of the Directors, including such basic requirements as attendance at Board meetings and reviewing meeting materials in advance in order to ask questions and evaluate the issues knowledgeably. Regulators will be looking for Corporate Governance Guidelines that clearly document established key governance principles that address at least the following: • • • • •

• •

•

• •

•

Board leadership Qualifications for Directors Director independence Director responsibilities Structure and functioning of Board committees Charters for those committees Board access to management and advisory resources Director and management compensation Director initial and continuing education Board and management performance evaluation Management succession

In larger companies, the Board often creates a Corporate Governance Committee to handle these responsibilities, but smaller companies might not have the breadth of Directors able to serve on this type of

Wednesday, September 9, 2015

committee. In that case, a small company Board will need to handle these functions, and with the right charters, Corporate Governance Guidelines and leadership, small companies can also manage these requirements as suitable for their organization.

What changes does the adoption of the Own Risk & Solvency Assessment Model Act (ORSA) bring to financial examinations? The other area of governance that the NAIC has included in both ORSA and CGAD materials is the way reporting responsibilities should be organized for each critical risk area of the Company. With the adoption of the ORSA Model Act, regulators intensify their regulation of Enterprise Risk Management (ERM), requiring strong governance structures functioning at all corporate levels and founded on an ERM program. This requirement will be another challenge for small insurers, since ORSA requires a holistic approach to risk governance with clearly defined and articulated roles, responsibilities, and accountabilities. Under ORSA, the Board of Directors is ultimately responsible to establish and maintain risk management policy by assessing and approving risk decisions made by the Risk Committee and approving the annual ORSA risk report, as well as establishing the Company’s risk appetite statement and related risk tolerances. This does not mean that the day-to-day risk decisions are to be made by the Board, but that the Company will have a risk governance team with responsibility for daily oversight. Risk management as well as development of key risk indicators, risk incident reporting, and applicable policies and procedures for the Company are critical to help avoid or mitigate those risks. Under ORSA, the Chief Risk Officer (CRO) or ERM Director will run this risk governance team and report to the Board in a regular, transparent manner. The Board will set the overall risk policy and make key risk policy decisions. The requirements for clearly defined roles can also be challenging for a small company that may not have the resources to hire a CRO. For small companies, making this role a part-time position can be successful as long as the responsibility and authority to run the risk governance team and implement a corporate risk policy is assigned and the ERM framework is fully established. ORSA also requires that the insurer’s strategic business planning process be integrated fully with the Company’s Enterprise Risk Management decisionmaking. Some regulators have indicated that Board members may be interviewed as a part of a risk-focused examination based on the ORSA report filing. Boards, unlike in the past, must have sufficient training to make sure they understand their new ORSA role with risk governance responsibilities. The risk governance team could be a new function of an existing senior management team, or a new team comprised of senior officers with ultimate responsibility for decision-making in their roles as head of key company departments. For a small company, the President or CEO will want to create a team with at least one other officer and not take sole responsibility for the risk governance development and ongoing improvement.

Wednesday, September 9, 2015

With the new ORSA governance requirements, Department of Insurance financial examiners will now review the overall risk-management function of an insurer and the ORSA report-development process and work papers. The exam will cover the insurer’s processes for identification of risks throughout the company that could threaten solvency, risk-mitigation strategies, internal controls, and control implementation. Regulators want to understand the frequency at which information on each critical risk area is reported to and reviewed by senior management and the Board. Reports will include: • Risk management processes • The review and approval of the ORSA summary report if applicable • The actuarial function on the adequacy of reserve provisions • The prospective solvency position of the insurer • Investment decision-making processes • Reinsurance decision-making processes • Business strategy/finance decision-making processes • The compliance function • Financial reporting/internal audit processes • Major marketing initiatives • Results of negotiations and information on reasonably foreseeable prospective risks • Market conduct decision-making process

Again, in larger companies, the Board will create an Audit, Risk, and Compliance Committee or potentially three different committees with charters that will assist the Board in fulfilling its oversight responsibilities for the financial reporting process, enterprise risk management program, system of internal controls, audit process, and Company compliance with laws and regulations.

History: Governance and Risk Management Historically, U.S. insurance regulators have reviewed the corporate governance of prospective insurers as part of the vetting process before granting a certificate of authority to write insurance business. Subsequent reviews of an insurer’s corporate governance practices are also performed during on-site financial examinations. The rigor of this review during a financial examination has increased significantly as the U.S. has moved to a risk-focused examination process. The review now includes the use of the Examination Planning Questionnaire, interviews of individuals with responsibility for corporate governance, and review of corporate governance activities (e.g., Board minutes and packets). Findings from financial examinations of insurers have identified concerns related to lack of or ineffective Board oversight, failure to establish succession planning protocols, lack of formal risk management structures, and a failure to establish independent internal audit functions. The draft of the new NAIC Corporate Governance models targets that gap where no set of

uniform corporate governance standards exists in the U.S.

International Pressure to Update U.S. Corporate Governance Requirements After the most recent financial crisis, many international banking and insurance supervisors took prescriptive measures to implement enterprise risk management standards and imposed strict rules relating to corporate governance in regulated entities. U.S. regulators felt the pressure to follow this international lead since they had also identified weaknesses in these areas in U.S. insurers. The NAIC had observed governance problems identified in other industries and wanted to act before a crisis in this area directly impacted U.S. insurers. In addition, the U.S. participation in the Financial Sector Assessment Program (FSAP) pointed to specific deficiencies in the U.S. regulatory process. The following recommendations were incorporated into the new NAIC models on Corporate Governance, ORSA or the Model Audit Rule: (1) specific suitability criteria (e.g. expertise, experience, etc.) for key persons; (2) requirements for ongoing notifications regarding effectiveness of key senior executives; (3) additional requirements or guidance for insurers related to good corporate governance practices; (4) requirements for insurers for maintaining an independent internal audit function; and (5) explicit requirements for insurers for maintaining risk management systems capable of identifying, measuring, assessing, reporting and controlling risks.

How does the NAIC regulate insurers’ corporate governance today? The regulatory corporate governance framework today in the U.S. is an exception-based model. This non-prescriptive way to help ensure effective governance for U.S. insurance companies is different than the European model prescribed in Solvency II. The NAIC model laws and regulations are based on a conservative framework for accounting, regulatory approval of significant transactions, restrictions on investments, and ongoing monitoring of financial indicators of concern. The regulators monitor for expected outcomes and if these expectations are not met, they choose from a wide range of tools to encourage and/or require corrective actions. They do not prescribe how these insurers implement laws or regulations, as implementation methods differ based on the size and structure of the insurer. This framework has worked successfully, and the ORSA model and the draft Corporate Governance Models are all written with the same non-prescriptive perspective. The non-prescriptive framework is an excellent fit for small companies since the regulators expect that they will use techniques that are appropriate to the nature, scale, and complexity of their risks, in a manner that adequately supports risk and capital decisions. These instructions in the ORSA Guidance Manual set up an expectation that small companies’ governance and ERM programs may look different than large companies’ but as long as each structure meets the needs of the Company and facilitates compliance with the requirements, both will be judged adequate by the regulators.

VĚSTNÍK

Summary: Small Companies can meet these Challenges Small companies will be able to implement new Corporate Governance Guidelines, criteria for selection of Board members, position descriptions for key Board members and senior executives, and charters for committees like the Corporate Governance Committee or the Audit, Risk, and Compliance Committee. Implementing these changes in a small company may take guidance and assistance from outside consultants, but will give them the added benefit of imbedding an ERM framework into their governance structure. Because the new NAIC models tie ERM, ORSA, and Corporate Governance together into one holistic approach for managing an insurance company, the results of implementing the framework will differ for a small company, and the impact may be felt even more strongly. The importance of moving toward these new requirements should not be underestimated, since the changes in any company will take time and resources. The NAIC’s adoption of CGAD gives a proposed effective date of June, 2016. This window might seem generous, but changes to governance structures, policies and procedures, and Board of Director membership require thoughtful planning and time to complete. The benefit for all companies will be a new governance framework that ties together risk management, strategic planning, and effective governance in a new way that will align the U.S. financial services industry with the existing European models to provide stronger solvency requirements in related economies world-wide. Reprinted with permission of First Consulting & Administration, Inc. •••

Meet the Author—Carol Stern Carol Stern is the newest addition to the First Consulting Operational Compliance and enterprise risk management (ERM) and Corporate Governance consulting practice. With 30 years of experience in the industry, she brings a Chief Compliance Officer perspective to the practice for insurance, annuity, retirement, and wholesale broker dealers. For the past 10 years, she coordinated the compliance risk manCarol Stern agement function in implementation of policies, procedures and reporting to establish and ERM program including development of key risk indicators and a formal risk assessment process. —SPJST—

VĚSTNÍK

Corporate Governance Annual Disclosure Model (CGAD) Law and Regulation

The National Association of Insurance Commissioners (NAIC) adopted the Corporate Governance Annual Disclosure (CGAD) Model Law and Regulation at their November 2014 Fall Meeting in Washington, D.C. The first CGAD reports will be due June 1, 2016, and thereafter on an annual basis. The NAIC is expecting that states will start requiring disclosures at the beginning of 2016, with all states and territories on board by 2019. Texas has not yet passed this legislation nor implemented these regulations. The next regular legislative session in Texas will begin in January 2017. Under the models, insurers will need to provide detailed information in four strategic areas:

Corporate Governance Framework and Structure The insurer’s governance structure and framework, including specific information regarding board size, as well as the role of the President/CEO and board chair will need to be articulated. Does the board, as a whole, possess all of what the NAIC calls “core competencies?”

Board of Directors’ Policies and Procedures The insurer must provide specific information regarding how the qualifications, expertise and experiences of board members meets the needs of the insurer; how independence is maintained; how often the board meets and whether board members attend all scheduled meetings. The board will need to create “suitability standards” (position descriptions) for officers and key persons in control functions. Senior Management Policies and Procedures The company charter or other board documents must clearly articulate the responsibilities of the directors. Corporate governance guidelines must document established key governance principles and be available for regulator review.

Oversight of Critical Risk Areas Reports from each critical risk area must be reviewed by senior management and the board with a documented frequency, which regulators must find sufficient.

There is no premium threshold in the CGAD models that exempts smaller insurers - including fraternals. The NAIC has made an affirmative decision not to exempt small companies or fraternal societies from any of these new corporate governance requirements. The full act can be viewed at http://www.naic.org/committees_ e_isftf_corp_governance.htm Source: American Fraternal Alliance —SPJST—

Wednesday, September 9, 2015

From By-Laws of the SPJST 31st Convention 2012 Under “Convention” - Article 4 on Delegates and Article 19 on By-Laws

ARTICLE 4. (a) The convention of the SPJST is composed of delegates elected from among active members of the local lodges. Every lodge has the right to elect a delegate on a numerical basis from its membership, according to the following scale: 1. From 20-100 members over 16 years of age, one delegate. 2. For each additional 100 members, one additional delegate if the lodge achieves its insurance goal or its members’ goal; if goal not reached, for each additional 150 members, one additional delegate. Note: A lodge meets its insurance goal when it achieves a three year total of 15 percent increase of net premium income (excluding annuity premiums) or a 15 percent net increase of members on base year 2011 for the year of the convention and the two years following the convention. 3. A lodge attaining enough new members for an additional delegate between the annual meeting and 60 days before the convention will fill that position under the provisions of Art. 4(g)3. Transfer of membership will not be counted as additional new members and terminations will be subtracted. 4. A lodge represented by its delegate or delegates is entitled to one vote for every active member and every member over 16 years of age belonging to the Society and local lodge at least 60 days before the convention and who has his premiums and dues paid in full. (b) A lodge chartered during the convention year may elect its delegates and substitutes any time before convening of the convention. (c) A lodge chartered or merged or reorganized less than three (3) years preceding the election of its delegates may elect its delegates and their substitutes from among those members having attended a majority of the regular meetings from the date of its charter, merger or reorganization. (d) A lodge losing the required number of members between the time of the election of delegates and convention will not lose delegate or delegates due to such change. (e) Qualifications: Only that member may be elected delegate or substitute delegate who: 1. Qualifies as an active member as defined under Art. 1 of these by-laws. 2. Is present during the election or is absent due to unavoidable circumstances. 3. Attended a majority of the regular meetings during the three years preceding the convention. When there is a conflict with the date of their local lodge meeting, the state youth director, district youth counselors and their assistants attending youth club meetings, state and district field representatives, and state and district fraternal activities coordinator, on official business, may count as attending a regular meeting for this purpose. When there is a conflict with the date of their local lodge meeting, Supreme Lodge members attending official functions of the Society qualify as attending a regular meeting for this purpose. Notification must be given to the local lodge secretary prior to the event with written confirmation made by the party within two weeks following the event. New transferred members’ attendance record of the previous lodge shall be accepted. 4. Is a citizen of the United States of America at the time of election. 5. Is not an insurance agent (underwriter) selling life insurance in competition with the Society. 6. Is not an officer or director of any grand lodge of another fraternal life insurance Society. (f) If a delegate is not in the convention by the second

day he will not be seated unless he has a good excuse, such as serious illness, death, or emergencies which prevented him from attending. (g) Delegates and substitutes: 1. Delegates and their substitutes to the convention are elected in the annual meeting preceding the convention for the term from one convention to the next convention. 2. When a lodge elects delegates, the nomination and election of delegates is made by whatever procedure is deemed most convenient and expedient by the local lodge. If a nominating committee is used, nominations from the floor must be permitted. In the election process, a secret ballot may be used. Ballots containing more nominees are void and not counted. The nominees receiving the highest number of votes are elected. 3. Not more than ten substitute delegates are elected. Such substitute shall be elected in the same manner as the delegates. If a lodge is entitled to an additional delegate, as provided in Art. 4(a)3, or if any one of the elected delegates cannot go to the convention, for whatever reason, the substitute with the highest number of votes fills the first vacancy. The same procedure is continued until all substitutes are depleted, in which case additional delegates are elected, if needed. 4. Delegates approved by the Credentials Committee and the convention, who are present and voting at the convention, shall divide all the local lodge’s votes equally among themselves. Odd vote or votes are taken by the delegate receiving the largest number of votes when elected. (h) No delegate shall vote by proxy. Each delegate will vote his allotted number of votes by separate vote or separate ballot.

ARTICLE 19. (b) The By-Law Committee convenes not later than January of the convention year, deliberates and decides on all recommendations for amending the by-laws and may also prepare and present its own recommendations for changes, additions or deletion of any articles, and shall publish all recommendations of the committee in the Vestnik 30 days prior to the convention. The committee on by-laws, elected by the preceding convention, will also function during the convention. (c) In the event additional recommendations are made, and if the committee deems it advisable for the purpose of considering and deciding on such recommendations, the committee will convene during the convention and present its recommendations. (d) Recommendations for changes to the by-laws must be signed and submitted to any member of this committee not later than 60 days prior to the convention. (e) The secretary shall forward all signed recommended changes to the by-laws to the Vestnik for publication. (f) Recommendations may be submitted in writing either in the English or Czech language and will be published in the language in which they were received. (g) Rejected recommendations can be presented by a delegate in the convention during deliberation of the respective article.

Editor’s Note: Current by-laws and proceedings from the 2012 SPJST Convention are available to all SPJST members. Call the Home Office to obtain your copy. —SPJST—

SPJST . . . Through the Years

3rd SPJST Convention in 1902 Fayetteville, Texas

17th SPJST Convention in 1956 Temple, Texas

27th SPJST Convention in 1996 Arlington, Texas

24th SPJST Convention in 1984 Corpus Christi, Texas

31st SPJST Convention in 2012 Killeen, Texas

Life Insurance and More Home Office: 520 North Main • Temple, Texas 76501 800-727-7578 • info@spjst.org • www.spjst.org