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Co-op Bylaws

BY-LAWS OF 

SOUTHEASTERN ELECTRIC COOPERATIVE, INC.

As Revised June 4, 2015

INDEX

ARTICLE I - MEMBERSHIP........................................................................................................ 2

ARTICLE II - RIGHTS, OBLIGATIONS, AND LIABILITIES OF MEMBERS................................. 6

ARTICLE III - MEETINGS OF MEMBERS................................................................................... 7

ARTICLE IV - DIRECTORS......................................................................................................... 11

ARTICLE V - MEETINGS OF DIRECTORS................................................................................ 14

ARTICLE VI - OFFICERS............................................................................................................ 17

ARTICLE VII - NON-PROFIT OPERATION................................................................................ 19

ARTICLE VIII - DISPOSITION OF COOPERATIVE PROPERTY.................................................. 21

ARTICLE IX - SEAL..................................................................................................................... 23

ARTICLE X - FINANCIAL TRANSACTIONS................................................................................ 23

ARTICLE XI - INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES,

                                         AND AGENTS; INSURANCE.............................................................. 24

ARTICLE XII - MISCELLANEOUS............................................................................................... 25

ARTICLE XIII - AMENDMENTS.................................................................................................. 28

ARTICLE I - MEMBERSHIP

SECTION 1.01  Membership

Any person, partnership, estate, trust, association, corporation, limited liability company, Federal or State Agency or political subdivision thereof may become a member of the Southeastern Electric Cooperative, Inc. (hereinafter called the "Cooperative") upon application and receipt of electric service from the Cooperative.  Such members shall:

1.   make an application for electric service;

2.   purchase electric energy on terms and conditions as may be established by the Board of Directors (hereinafter referred to as the “Board”.)

3.   comply with and be bound by the Articles of Incorporation, By-laws, policies, rules, regulations and rate schedules as adopted or amended by the Board;

4.   submit a security deposit, a supplemental electric service contract, contribution in aid of construction, facilities extension fees, easements or electric service contract in such form as may be required by the Cooperative;

5.   cause all premises covered by the membership to be wired according to applicable City, State and Federal specifications and the specifications of the Cooperative.  Each member shall be responsible for, and shall indemnify the Cooperative, or any other person against injury, loss or damage resulting from defective or improper use or maintenance of the members premises, wiring and any apparatus connected thereto.

No physical membership certificate shall be issued.  All memberships shall be automatically effective upon receipt of electric service from the Cooperative as evidenced from the books and records of the Cooperative.  No member may hold more than one membership in the Cooperative, and no membership in the Cooperative shall be transferable, except as provided in these By-laws.

The responsibility of the Cooperative shall not extend beyond the point of delivery where its service wires are attached to the meter or meter loop provided for measuring electricity used on members premises, except that the Cooperative shall own and retain control of any load management equipment installed beyond the metering point.

All prior memberships shall be retained by the Cooperative until electric service is terminated or as otherwise provided herein.

SECTION 1.02  Joint Membership (two persons)

A member may apply at any time for conversion to a joint membership (limited to two persons only) subject to compliance with the requirements set forth in Section 1 of this Article.  The term joint membership shall be deemed to be joint tenancy with full rights of survivorship as authorized by laws of this state, except as restricted herein as limited to two persons only.  Any provisions relating to the rights and liabilities of membership shall apply equally with respect to the holders of a joint membership.  For joint membership the following rules shall apply:

1.   the presence at a meeting of either joint member shall be regarded as the presence of one member, and of constituting a joint waiver of notice of the meeting;

2.   the vote of either joint member shall constitute one vote; no split vote shall be permitted;

3.   a waiver of notice signed by either joint member shall constitute a joint waiver;

4.   notice to either joint member shall constitute notice to both joint members;

5.   expulsion or withdrawal of either joint member shall terminate the joint membership;

6.   either joint member may be elected or appointed as an officer or director, subject to the qualifications for such office stated in these By-laws; and

7.   the joint member continuing to receive electric service shall be considered as an individual member upon notification of death, divorce or legal separation, or legal conclusion of the relationship of those named in a joint membership.

SECTION 1.03  Acceptance into Membership

A report of electric service applications shall be regularly submitted to the Board.  Upon determination that all requirements set forth in Section One (1) of any applicant are complied with any applicant shall automatically become a member of the Cooperative on the date of their connection for electric service; PROVIDED, that the Board may by resolution deny an application and refuse to extend service upon its determination that the applicant is not willing or is not able to satisfy and abide by the Cooperative's terms and conditions of membership or that such application should be denied for other good cause; PROVIDED FURTHER, that any person whose application, for sixty (60) days or longer, has been submitted to but not approved by the Board may, by filing written request therefore with the Cooperative at least thirty (30) days prior to the next meeting of the members, have his application submitted to and approved or disapproved by the vote of the members at such meeting, at which the applicant shall be entitled to be present and be heard.

SECTION 1.04  Purchase of Electric Energy and Capacity

The Cooperative shall make all reasonable effort to furnish its members with adequate and dependable electric service but does not or cannot guarantee a continuous and uninterrupted supply.

Except as otherwise provided by law, each member shall purchase from the Cooperative electric energy purchased for use on the premises, and shall pay therefore at rates which shall from time to time be determined by the Board.  Amounts paid for electric energy in excess of the cost of service are furnished by members as capital, and each member shall be credited with the capital so furnished as provided in these By-laws.  Each member shall pay to the Cooperative facility fees regardless of the amount of electric energy used, as determined by the Board.  Each member shall pay all amounts owed to the Cooperative as and when the same shall become due and payable. Interest may be charged on past due accounts under such uniform terms and conditions as the Board may prescribe.

1.   Co-generation: Production of electric energy on such premises, regardless of the source thereof, by means of the facilities which shall be interconnected with Cooperative facilities shall be subject to appropriate regulations and shall be established by applicable law, regulations and Cooperative policies. 

2.   Reduction in Cooperative Services: As required or allowed by Law, and as determined by the Board, if a member substantially reduces or ceases the member’s use, receipt, or purchase of Cooperative services, either singly or in combination; then the Cooperative may charge the member, and the member shall pay the Cooperative, the reasonable costs and expenses incurred by the Cooperative in relying upon the member’s pre-reduction or pre-ceasing use, receipt, or purchase of Cooperative services.

SECTION 1.05  Suspension, Reinstatement, Withdrawal and Termination of Membership

1.   Suspension and Reinstatement: Any member may have their electric service terminated and shall be deemed a suspended member for any of the following events:

a)   failure to pay any amounts due the Cooperative;

b)   failure to comply with electric service contracts or other documents governing such electric service;

c)   upon discovery of any tampering or other interference with the Cooperative’s electric service;

d)   upon discovery of any imminent hazard or danger to Cooperative equipment or others; or

e)   failure to comply with membership obligations.

Any member deemed a suspended member is not eligible to vote at membership meetings, or be entitled to electric service.  Such member’s status shall be restored to a good standing upon full and complete compliance with reason for suspension, including any additional charges required for such reinstatement, and upon providing adequate security, or providing such other assurance of regular future compliance thereof, or otherwise complied with membership obligations causing such suspension of membership.

2.   Membership suspensions may be immediate without providing notice for: (a) tampering, (b) imminent hazard, or (c) other suspensions pursuant to Cooperative policies of general application and as provided for by Law.  A suspended member will be provided opportunity to comment or correct the reason of suspension.

3.   Notice and Comment: If the Cooperative determines a suspension reason requires notice, the member shall receive such notice as established by Cooperative by-laws or policies and that member has five (5) days after the date of notice to comment upon the suspension reason.  Then, unless otherwise determined by the Board in good faith, the member is suspended.

4.   Effect of Suspension: Upon a member’s suspension, except for the Cooperative’s obligation to retire and refund capital credits and obligations regarding dissolution, the Cooperative’s duties, obligations and liabilities imposed by these By-laws cease and the Cooperative may cease providing any Cooperative service to the suspended member; such suspended member forfeits and relinquishes any voting rights or the member rights provided in these By-laws.

5.   Withdrawal of Membership: Any member may withdraw from membership upon compliance with such uniform terms and conditions as the Board may prescribe.

6.   Termination of Membership: The Board may, by the affirmative vote of not less than two-thirds (2/3rd) of all the directors, expel any member who fails to comply with any of the provisions of the Articles, By-laws, or rules and regulations adopted by the Board but only if such member has been given written notice by the Cooperative that such failure makes the member liable to expulsion and such failure shall have continued for at least ten (10) days after such notice was given.  Any expelled member may be reinstated by vote of the Board or by vote of the members at any annual or special meeting.  The membership of a member who for a period of six (6) months after service is available has not purchased electric energy from the Cooperative, or of a member who has ceased to regularly or seasonally purchase energy from the Cooperative, shall be canceled.

7.   Death or Cessation of Existence: Upon the withdrawal, death, cessation of existence, or expulsion of a member the membership of such member shall thereupon terminate.  Termination of membership in any manner shall not release a member or their estate from any debts, liabilities or obligations due the Cooperative.

SECTION 1.06  Contract of Membership

The patrons of the Cooperative, by purchase of electric energy and other Cooperative services, acknowledge that the terms and provisions of the Articles and By-laws constitute and a contract between the Cooperative and each patron and both the Cooperative and the patrons are bound by such contract, and other governing documents, as fully as though each patron had individually signed a separate instrument containing such terms and provisions by the purchase of electric energy and other Cooperative services.

ARTICLE II - RIGHTS, OBLIGATIONS, AND LIABILITIES OF MEMBERS

SECTION 2.01  Property Interest of Members

Upon dissolution, after, all debts and liabilities of the Cooperative shall have been paid; and all capital furnished through patronage shall have been retired as provided in these By-laws, the remaining property and assets of the Cooperative shall be distributed among the members pursuant to a Plan of Dissolution.

SECTION 2.02  Non-liability for Debts of the Cooperative

The private property of the members shall be exempt from execution or other liability for the debts of the Cooperative and no member shall be liable or responsible for any debts or liabilities of the Cooperative.

SECTION 2.03  Official Publication

The Board is hereby authorized to subscribe from the revenues from each member, the amount necessary to pay for the official publication or other publications as selected by the Board.  The Cooperative newsletter, or inserts shall be designated the official publication for legal notice and communication to members.

SECTION 2.04  Member Grant of Property Rights

1.   Right of Way: Each member shall upon request of the Cooperative execute and deliver to the Cooperative grants of easement or right of way over, on or under such property owned or leased by the member in accordance with such reasonable terms and condition as the Cooperative shall require for the furnishing of electricity to the member or other members or for the construction, operation, maintenance or relocation of the Cooperative electric facilities.

2.   Other Rights and Covenant of Cooperation: Each member shall upon request of the Cooperative grant such rights and cooperate as reasonably necessary to facilitate the Cooperative to safely, reliably and efficiently operate the Cooperative’s electric system or provide any Cooperative service.

SECTION 2.05  Indemnification

Each member shall indemnify the Cooperative for, and hold the Cooperative harmless from, any expenses, costs, liabilities, or damages, including reasonable attorney fees and legal expenses, incurred by the Cooperative, or by any cooperative director, officer, employee, agent, representative, or contractor, because of any property damage, personal injury, or death resulting from the member’s negligence or failure to comply with the governing documents.

SECTION 2.06  Load Management Programs

Each member may participate in any program and shall comply with related rates, policies, service rules and regulations as may be reasonably established by the Cooperative to enhance load management to more efficiently utilize or conserve energy or to conduct load research.

SECTION 2.07  Member Liability

No member shall tamper or interfere with, damage or impair any Cooperative equipment.  Each member shall use their diligent efforts to guard and protect Cooperative properties situated on their premises and to promptly report all incidents of malfunction, tampering, vandalism or damage to Cooperative property.  Members shall install, implement and maintain any protective device or procedure on the Member’s premises as is reasonably required by the Cooperative.

ARTICLE III - MEETINGS OF MEMBERS

SECTION 3.01  Annual Meeting

The annual meeting of the members shall be held at such date, time and place as the Board determines to be reasonably accessible by the members.  It shall be the responsibility of the Board to make adequate plans and preparations for the annual meeting.  Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Cooperative.

SECTION 3.02  Special Meetings

Special meetings of the members may be called by resolution of the Board; upon a written request signed by any three (3) directors; by the President; or by petition of ten (10) percent or more of all the members. It shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided.  Special meetings of the members may be held at any place the Board determines reasonably accessible to the members, specified in the notice of the special meeting.

If the Cooperative fails to properly notify the members of a special member meeting within thirty (30) days of receiving any member petition, then a member signing the member petition may reasonably set the time, place, and location of the special member meeting; and notify the members of the special member meeting.

SECTION 3.03  Notice of Members' Meetings

Notice stating the place, day, and hour of the meeting and, in case of a special meeting or an annual meeting at which business requiring special notice is to be transacted, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) days nor more than twenty-five (25) days before the date of the meeting, either personally or by mail, by or at the direction of the Secretary, or upon a default in duty by the Secretary, by the persons calling the meeting, to each member.  If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the members at the address as it appears on the records of the Cooperative, with postage thereon.  If electronically delivered, such notice shall be deemed to be delivered when sent to the last known electronic address of the member for which no nondelivery notice is returned.  Any such notice may be included with the member’s service billing or as an integral part of or with the Cooperative monthly newsletter or insert.

The failure of any member to receive notice of an annual or special meeting of the members shall not invalidate any action which may be taken by the members at any such meeting.

The attendance in person of a member at any meeting of the members shall constitute a waiver of notice of such meeting unless such attendance shall be for the express purpose of objecting that the meeting has not been lawfully called or convened.  Any member attending any meeting for the purpose of such objection shall notify the Secretary prior to or at the beginning of the meeting of their objection.

SECTION 3.04  Quorum

Fifty (50) members present in person shall constitute a quorum.  If less than a quorum is present at any meeting, those present in person may reschedule the meeting upon notice as herein provided.  The minutes of each meeting shall contain a list of members present in person.

SECTION 3.05  Voting of Members

1.   Voting: Each member, who is not in a status of suspension, shall be entitled to only one vote upon each matter submitted to a vote at a meeting of the members.  All questions shall be decided by a vote of a majority of the members voting thereon in person, except as otherwise provided by Law, the Articles, or these By-laws.

2.   Mail Voting: Voting by mail shall be permitted on matters of merger or consolidation with other cooperatives and other matters that the Board determines a membership mail vote is necessary.  In the case of a mail vote, a printed ballot containing the proposition to be voted upon as approved by the Board shall be mailed to the membership at least 15 days before the date of the meeting.  The ballot shall be returned as established by the Board.  The method of mail balloting shall be as required by law and as established by the Board.

3.   Non-Natural Persons: Members must present evidence satisfactory to the Cooperative that the individual is duly authorized to vote for the non-natural person member.

4.   Record Date: The Board may fix a record date for determining the membership and the members entitled to vote at membership meeting.

SECTION 3.06  Permitted Member Action

At any annual meeting or special meeting the members may consider, vote or act only upon a matter which the members were properly notified and the members are authorized to consider, vote or act upon unless otherwise provided by Law or these By-laws.

SECTION 3.07  Voting Districts

The territory served or to be served by the Cooperative shall be divided into ten (10) districts. Each district shall be represented by one director.  The districts shall be as follows:

District No. 1 shall consist of Starr, Cross Plains, Foster, Clayton, Susquehanna, Liberty, Milltown, Clayton South, Wittenburg North, Kulm, German, Sharon, Wittenberg South, Oak Hollow, Fair, Kaylor and Capital Townships in Hutchinson County, South Dakota.

District No. 2 shall consist of Pleasant, Silver Lake, Wolf Creek, Grandview, Kassel, Valley, Sweet and Molan Townships in Hutchinson County; and Dolton, Rosefield, Childstown and Salem Townships in Turner County, all in South Dakota. 

District No. 3 shall consist of Monroe, Brothersfield, Home, Marion, Parker, Germantown, Norway, Hurley and Middleton Townships in Turner County, South Dakota including the Town of Davis and the City of Hurley, South Dakota.

District No. 4 shall consist of Delapre West and Delapre East Townships in Lincoln County, South Dakota.

District No. 5 shall consist of Wall Lake, Wayne, Sioux Falls and Splitrock Townships in Minnehaha County; and Springdale West, Springdale East, Dayton West and Dayton East Township in Lincoln County, all in South Dakota.

District No. 6 shall consist of Perry, LaValley, Grant, Lynn, Canton West, Canton East, Highland and Fairview Townships in Lincoln County, South Dakota.

District No. 7 shall consist of Spring Valley, Swan Lake, Turner, Daneville and Centerville Townships in Turner County; and Turkey Valley Township in Yankton County; and the City of Irene and the City of Viborg, all in South Dakota.

District No. 8 shall consist of Delaware, Lincoln, Brooklyn, Pleasant, Norway and Eden Townships in Lincoln County; Prairie, Alcester, North Virginia, Emmet, Big Springs, South Virginia, Spink, Sioux Valley West and Sioux Valley East Townships in Union County; and Riverside and Glenwood Townships in Clay County, all in South Dakota.

District 9 shall consist of Pearl, Sun Prairie, Benton, Salem, Jefferson, Emery, Bridgewater and Union Townships and the city of Spencer, all in McCook County; and Spring Lake, Edgerton, Pleasant and Taylor and the community of Farmer, all in Hanson County and Canova and Vermillion Townships, all in Miner County, all in South Dakota.

District 10 shall consist of Brookfield, Ramsey, Richland, Montrose, Canistota, Greenland, Grant and Spring Valley Townships and the city of Montrose, all in McCook County; and Clarno and Orland Townships in Lake County; and Buffalo, Clear Lake, Humboldt and Wellington in Minnehaha County, all in South Dakota.

The Board may reconstitute the districts to ensure that the districts equitably represent the members based upon equitable factors such as number of members, types of services, density, area served and such other equitable factors as the Board determines.

SECTION 3.08  Order of Business

The order of business at the annual meeting of the members shall be established by the Board.

SECTION 3.09  Reports

At each annual meeting of the members, the Cooperative shall submit reports covering the business of the Cooperative for the previous fiscal year.  Such reports shall set forth in summary the condition of the Cooperative at the close of such fiscal year.

SECTION 3.10  Election and Credentials Committee

The Board shall, at least three (3) days before any meeting of the members, appoint an Election and Credentials Committee consisting of not less than five (5) nor more than fifteen (15) members, who are not close relatives or members of the same household of existing directors or known candidates for directors to be elected at such meeting.  In appointing the Committee, the Board shall have regard for equitable representation of the several districts served by the Cooperative.

The Committee shall elect its own Chair and Secretary prior to or at the member meeting. The Committee may appoint any qualified member present at the membership meeting in the event of the failure of an appointed member to attend the organizational meeting of the Committee.  It shall be the responsibility of the Committee to establish or approve the manner of conducting member registration and any ballot voting, or other voting, to pass upon all questions that may arise with respect to the registration of members in person, to count all ballots cast in any election or in any other ballot vote taken, to rule upon the effect of any ballots irregularly or indecisively marked, and to pass upon any protest or objection filed with respect to any election or to conduct affecting the results of any election, or any member meeting issue.  Only a member in good standing may file protest or objection.

In the exercise of its responsibility, the Committee shall have available to it the advise of counsel provided by the Cooperative.  In the event a protest or objection is filed concerning any election, such protest or objection must be filed within three (3) business days following the adjournment of the meeting in which the election is conducted.  The Committee shall thereupon be reconvened, upon notice from its Chair, not less than seven (7) days after such protest or objection is filed.  The Committee shall hear such evidence as is presented by the protestor(s) who may be heard in person, by counsel, or both; and the Committee, by a vote of a majority of those present and voting, shall, within a reasonable time but not later than thirty (30) days after such hearing, render its decision, which may be either to affirm or change the results of the election or to set aside such election.  The Committee's decision (as reflected by a majority of those actually present and voting) on all such matters shall be final.

The failure of the Cooperative or Committee to act as required by this By-law shall not, by itself, affect any vote, director election, or other action taken at a member meeting.

ARTICLE IV - DIRECTORS

SECTION 4.01  General Powers

The business and affairs of the Cooperative shall be managed by a Board of Directors which shall exercise all of the powers of the Cooperative except such as are by Law, the Articles or these By-laws conferred upon or reserved to the members except as provided by Section 4.05 for the transitional Board.

SECTION 4.02  Qualifications

No person shall be eligible to become or remain a director of the Cooperative who:

1.   is not a member; and

2.   does not receive service from the Cooperative at their primary residential abode within the district which they are to represent;

3.   does not have the capacity to enter into legally binding contracts;

4.   while a director or during five (5) years immediately prior to becoming a director been convicted, pled guilty or nolo contendere to a felony;

5.   while a director attended less than two/thirds (2/3rd) of monthly Board Meetings during the past calendar year unless excused for good cause by the Board;

6.   possesses a substantial conflict of interest with the Cooperative;

7.   is employed by the Cooperative, or has a close relative employed by the Cooperative, or has been employed by the Cooperative within the last five (5) years.

Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions, the Board is authorized to remove such director from office.

Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the Board.

SECTION 4.03  Nominations of Directors

1.   Member Petition for Nomination.  In a form provided by the Cooperative, any fifteen (15) or more members may, by written Petition for Nomination of Director, make director nominations from their district of their residence over their signature.  Such Petition for Nomination shall be filed with the Cooperative not more than one hundred-twenty (120) nor less than forty-five (45) days before the membership meeting.  After verifying that a member’s Petition for Nomination complies with this By-law, the Cooperative shall provide the membership notice of the Member Petition Nominations.

2.   Notice of Director Nominations.  At least ten (10) days prior to any membership meeting at which members are scheduled to elect directors, the Cooperative shall notify members of the director positions for which members are scheduled to vote; and names and corresponding director positions of all Member Nomination Petitions filed with the Cooperative along with other annual meeting information.

3.   No nominations from the floor, nor late filed petitions shall be permitted at any membership meeting wherein a Petition for Nomination has been filed; in the event no Petition for Nominations have been filed, the vacancy shall be filled by the Board.

SECTION 4.04  Director Elections

1.All directors shall be elected for a three (3) year term at the annual meeting or until their successors shall have been elected and qualified. If an election of directors shall not be held on the day designated herein for the annual meeting, or at any adjournment thereof, a special meeting of the members shall be held for the purpose of electing directors within a reasonable time thereafter. Directors shall be elected by a plurality (most votes received) vote of the members. In the event of a tie ballot, the election candidates will draw lots and the winner shall be declared elected.

2.Membership Voting: All voting for directors shall be by secret written ballot and if there is no objection, secret written balloting may be dispensed with concerning a particular election and voting may be conducted by the membership in any other proper manner. No proxy, mail or cumulative voting shall be permitted for election of directors.   Each member shall be entitled to one vote for each director position being filled at any annual or special membership meeting.

SECTION 4.05  Director Resignation

A director may resign at any time by delivering written notice of resignation to the Board.  Unless the written notice of resignation specifies a later effective date, a director’s resignation is effective upon the Board receiving the written notice of resignation.  If a director’s resignation is effective at a later date and if the successor director does not take office until the effective date of the director’s resignation, then the pending director vacancy may be filled before the effective date of the director’s resignation.

SECTION 4.06  Removal of Directors by Members

Any member may bring charges for cause against a director and, by filing with the Secretary such charges in writing together with a petition signed by at least ten percent (10%) of the members, may request the removal of such director by reason thereof.  Such director shall be informed in writing of the charges at least thirty (30) days prior to the meeting of the members at which the charges are to be considered and shall have an opportunity at the meeting to be heard in person or by counsel and to present evidence in respect of the charges; and the person or persons bringing the charges against him shall have the same opportunity.  The question of the removal of such director shall be considered and voted upon at the meeting of the members and any vacancy created by such removal may be filled as provided by these By-laws.

SECTION 4.07  Vacancies

Any vacancy occurring on the Board may be filled by the affirmative vote of a majority of the remaining directors for the unexpired portion of the term. The member elected as director to fill the vacancy must meet the qualifications of a director.

SECTION 4.08  Compensation

Directors shall not receive any salary for their services as director, except by resolution of the Board.  The Cooperative may pay a fixed sum and provide other director benefits to directors for attendance of meetings of the Board and other meetings on behalf of the Cooperative and at any function reasonably enhancing the director’s ability to serve as director which is authorized by the Board. Directors may receive advancement or reimbursement for any travel or out of pocket expenses actually, necessarily and reasonably incurred in attending such meetings and performance of such duties.

SECTION 4.09  Director Conduct

1.   Duties: A director shall discharge the director’s duties in good faith; with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and in a manner the director reasonably believes to be in the Cooperative’s best interests.

2.   Director Reliance on Others: Unless a director possesses knowledge concerning a matter making reliance unwarranted, then in discharging a director’s duties, a director may rely upon information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by:

a)   one (1) or more Cooperative officers or employees whom the director reasonably believes to be reliable and competent in the matters prepared or presented;

b)   legal counsel, public accountants, or other individuals regarding matters the director reasonably believes are within the individual’s professional or expert competence; and

c)   if the director reasonably believes a Board Committee of which the director is not a member merits confidence, then the Board Committee regarding matters within the Board Committee’s jurisdiction.

3.   Director Liability: If a director complies with this By-law, then the director is not liable to the Cooperative, any member, or any other individual or entity for action taken, or not taken, as a director.  No director is deemed a trustee regarding the Cooperative or any property held or administered by the Cooperative, including without limit, property potentially subject to restrictions imposed by the property’s donor or transferor.

ARTICLE V - MEETINGS OF DIRECTORS

SECTION 5.01  Regular Meetings

A regular meeting of the Board shall be held without notice, as soon as possible thereafter, and at the same place as, the annual meeting of the members.  Regular meeting of the Board may be held at such time and place as the Board may provide by resolution.  Such regular meeting may be held without notice other than such resolution fixing the time and place thereof.

SECTION 5.02  Special Meetings

Special meetings of the Board may be called by the President or by any three (3) directors, and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as thereinafter provided.  The President or the directors calling the meeting shall fix the time and place for the holding of the meeting.

SECTION 5.03  Telecommunication Meetings

Any meetings may, with the oral consent (said consent to be shown in the written minutes of such meeting) of the majority of the directors, be convened and conducted by telecommunication, or other electronic media, without regard to the actual physical location of any of the individual directors.

SECTION 5.04  Conduct of Board Meetings

Any regular or special Board Meeting may be held in or out of the state in which the Cooperative provides service; and conducted with absent directors participating, and deemed present in person, through any means of communication by which all directors participating in the Board Meeting may communicate with each other during the Board Meeting.

If a director quorum is present at any Board Meeting, then in descending priority, the following officers may preside at the Board Meeting: President, Vice-President, Secretary, Treasurer; and if no officer is present, or desires, to preside over any Board Meeting, then the directors attending the Board Meeting shall elect a director to preside over the Board Meeting.

SECTION 5.05  Notice of Directors' Meetings

Notice of the time, place, (or telephone or other electronic media conference) and purpose of any meeting of the Board shall be delivered to each director either personally or by regular or electronic mail, by or at the direction of the Secretary, or upon a default in duty by the Secretary, by the President or the directors calling the meeting.  If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the director at their address as it appears on the records of the Cooperative, with postage thereupon prepaid, at least five (5) days before the date set for the meeting.

If notice is transmitted by telephonic or other electronic media, it shall be deemed to be delivered upon completion of the telephonic or the electronic media transmission address to the director at his telecommunications or other electronic media address as it appears on the records of the Cooperative at least forty-eight (48) hours before the time and date set for the meeting.

SECTION 5.06  Director Quorum and Voting

A quorum of directors is a majority of the directors in office immediately before a Board Meeting begins.  If a director quorum is present at the time a matter is voted or acted upon, and unless the vote of a greater number of directors is required, then the affirmative vote of a majority of directors present and voting is the act of the Board. In a conflict of interest transaction, an interested director is not counted in determining a director quorum.

SECTION 5.07  Waiver of Board Meeting Notice

At any time, a director may waive notice of any Board Meeting by delivering to the Cooperative a written waiver of notice signed by the director and later filed with the Board Meeting minutes or the Cooperative’s records.  Unless a director upon arriving at a Board Meeting or prior to the vote on a particular matter, objects to lack of, or defective, notice of the Board Meeting or a matter being considered at the Board Meeting; and does not vote for, or assent to, an objected matter; then the director’s attendance at, or participation in, a Board Meeting waives notice of the Board Meeting and any matter considered at the Board Meeting.

SECTION 5.08  Board Action by Written Consent

Without a Board Meeting, the Board may take any action required, or permitted, to be taken at a Board Meeting if the action is taken by all directors; and evidenced by one (1), or more, written consents; describing the action taken; signed by each director; and included with the

Cooperative’s Board Meeting minutes.

Unless the Director Written Consent specifies a different effective date, action taken by Director Written Consent is effective when the last director signs the Director Written Consent.  A Director Written Consent has the effect of, and may be described as, a Board Meeting vote.

SECTION 5.09  Committees

The Board may create committees of the Board or members and appoint such persons to serve on the committees in the Board’s discretion.

1.   Conduct of Committee Meetings: The same rules shall apply to a committee as govern the Board unless otherwise provided by resolution creating the committee.

2.   Committee Authority:  Except as prohibited or limited by Law, the Articles, or this By-law, the Board may authorize a Board committee to exercise Board authority and Member Committees may act as specified by the Board, but may not exercise Board authority.  A committee may not act, to retire and refund Capital Credits and Affiliated Capital Credits; approve the Cooperative’s dissolution or merger, or the sale, pledge, or transfer of all, or substantially all, Cooperative Assets; elect, appoint, or remove directors, or fill any Board or committee vacancy, or adopt, amend, or repeal these By-laws.

SECTION 5.10  Executive Committee

The Executive Committee is comprised of the President, Vice-President, Secretary, and Treasurer.  The Executive Committee may exercise all Board authority regarding a matter, when it is impracticable or inconvenient for the Board to timely meet to consider a matter, and the Executive Committee may exercise all Board authority granted by the Board and permitted by Law, the Articles, and these By-laws.  At the next Board Meeting following any exercise of Board authority, the Executive Committee shall report to the Board regarding the Executive Committee’s exercise of Board authority.

SECTION 5.11  Conflict of Interest Transaction

A conflict of interest transaction is a transaction with the Cooperative in which a director has a direct or indirect interest.

1.   A director has a direct conflict if the best interests of the Cooperative are opposite of the interests of the director.  A director has an indirect interest in a Conflict of Interest Transaction if at least one (1) party to the transaction is another entity in which the director has a material interest or is a general partner; or of which the director is a director, officer, or trustee.

2.   Approval of Conflict of Interest Transaction:  Regardless of the presence or vote of a director interested in a Conflict of Interest Transaction, a Conflict of Interest Transaction may be approved, and any Board quorum or member quorum satisfied, if the Conflict of Interest Transaction’s material facts, and the director’s interest, are disclosed or known to the Board or Board Committee, and a majority of more than one (1) director or Board Committee member with no interest in the Conflict of Interest Transaction votes to approve the Conflict of Interest Transaction; or disclosed or known to the members, and a majority of votes cast by members not voting under the control of a director or entity interested in the Conflict of Interest Transaction approves the Conflict of Interest Transaction.

3.   Fair Conflict of Interest Transaction:  A Conflict of Interest Transaction that is fair when entered is neither voidable; nor the basis for imposing liability on a director interested in the Conflict of Interest Transaction.

ARTICLE VI - OFFICERS

SECTION 6.01  Number

The officers of the Cooperative shall be a President, Vice President, Secretary, Treasurer, and such other officers as may be determined by the Board from time to time.  The offices of Secretary and of Treasurer may be held by the same person.

SECTION 6.02  Election and Term of Office

The officers shall be elected by secret written ballot by affirmative vote of majority of directors, annually by and from the Board at the meeting of the Board held immediately after the annual meeting of the members or as soon thereafter as conveniently may be done.  Each officer may hold office until the first regular meeting of the Board following the annual meeting of the members or until his successor shall have been elected and shall have qualified.  A vacancy in any office may be filled by the Board for the unexpired portion of the term.

SECTION 6.03  President

The President shall:

1.   be the principal executive officer of the Cooperative and, unless otherwise determined by the Board, shall preside at all meetings of the members and the Board;

2.   sign on behalf of the Cooperative, any deeds, mortgages, notes, contracts or other instruments authorized by the Board to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Cooperative, or shall be required by Law to be otherwise signed or executed; and

3.   perform all general duties, and other responsibilities, incident to the office of President as may be prescribed by the Board.

SECTION 6.04  Vice President

In the absence of the President; or in the event of the President's inability or refusal to act, the Vice President shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.  The Vice President shall also perform such other duties as from time to time may be assigned by the Board.

SECTION 6.05  Secretary

The Secretary shall perform all duties, shall have all responsibility and may exercise all authority as may be prescribed by the Board.

SECTION 6.06  Treasurer

The Treasurer shall perform all duties, shall have all responsibilities and may exercise all authority as may be prescribed by the Board.

SECTION 6.07  Delegation of Secretary's and Treasurer's Responsibilities

Notwithstanding the duties, responsibilities and authorities of the Secretary and of the Treasurer hereinbefore provided the Board by policy may, except as otherwise limited by Law, delegate, wholly or in part, the responsibility and authority for, and the regular or routine administration of, one or more of each such officer's such duties to one or more agents, other officers or employees of the Cooperative who are not directors.  To the extent that the Board does so delegate with respect to any such officer as such shall be released from such duties, responsibilities and authorities.

SECTION 6.08  Manager

The Board may appoint a manager who may be, but who shall not be required to be, a member of the Cooperative.  The manager shall perform such duties and shall exercise such authority as the Board may direct.

SECTION 6.09  Bonds of Officers

The Treasurer and any other officer, employee, or agent of the Cooperative charged with responsibility for the custody of any of its funds or property shall be bonded in such sum and with such surety as the Board shall determine.  The Board in its discretion may also require any other officer, agent or employee of the Cooperative to give bond in such amount and with such surety as it shall determine.  The cost of all such bonds shall be paid by the Cooperative.

SECTION 6.10  Compensation

The powers, duties, and compensation of officers, agents and employees shall be fixed by the Board, subject to the provisions of these By-laws.

SECTION 6.11  Officer Resignation and Removal

At any time any officer may resign by delivering to the Board written resignation.  Unless the resignation specifies a later effective date, an officer resignation is effective when received by the Board.  If an officer resignation is effective at a later date, then the Board may fill the vacant officer position before the later effective date, but the successor officer may not take office until the later effective date.  At any time, the Board may remove any officer for any reason.

SECTION 6.12  Authority to Execute Documents

On the Cooperative’s behalf, officers may sign, execute, and acknowledge any document properly authorized or approved by the Board or members.  The Board may authorize additional Cooperative directors, officers, employees, agents or representatives to sign, execute, and acknowledge any document on the Cooperative’s behalf.

ARTICLE VII - NON-PROFIT OPERATION

SECTION 7.01  Interest or Dividends on Capital Prohibited

The Cooperative shall at all times be operated on a Cooperative non-profit basis for the mutual benefit of its members. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its patrons.

SECTION 7.02  Patron

A Cooperative patron is a member or non-member who uses, receives or purchases electric energy or any Cooperative service and is entitled to allocation and payment of capital credits.

SECTION 7.03  Patronage Capital in Connection with Furnishing Electric Energy and the Cooperative Services

1.In the furnishing of electric energy and other Cooperative services, the Cooperative's operations shall be so conducted that all patrons, through their patronage, furnish capital for the Cooperative.  The Board of the Cooperative before allocating and crediting margins to its patrons may, by resolution, provide for the adoption of Margin Stabilization Plans, revenue or expense deferral plans or other plans that provide for the retention of revenues and receipts in excess of those needed to meet current losses and expenses.  Any amounts received by the Cooperative in excess of the funds necessary to provide for the reserves and plans as herein provided and in excess of operating costs and expenses shall be accounted for by the Cooperative on a patronage basis to all its patrons.  All such amounts are received with the understanding that they are furnished by the patrons as capital.

2.In order to induce patronage and to assure that the Cooperative will operate on a non-profit basis, the Cooperative is obligated to account on a patronage basis to all members, for all amounts received and receivable from the furnishing of electric energy.  The Cooperative is obligated to pay by credits to a capital account for each patron all such amounts in excess of those funds needed by the Cooperative for purposes stated herein.  The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each patron, and the Cooperative shall within a reasonable time after the close of the fiscal year notify each patron of the amount of capital so credited to his account PROVIDED that individual notices of such amounts of capital so furnished by each patron shall not be required if the Cooperative notifies all patrons by its official publication of the aggregate amount of such excesses and provides a clear explanation of how each patron may compute and determine the specific amount of capital so credited to such patron.  All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital.

3.The Cooperative may retire and pay Capital Credits only if the Board determines that the retirement and payment will not adversely impact the Cooperative’s financial condition.  Consistent with this By-law, the retirement and payment of Capital Credits are in the sole discretion of the Board and are not affected by previous retirements and payments.  The manner, method, and timing of retiring and paying Capital Credits may be determined only by the Board.

SECTION 7.04  Affiliated Capital Credits

The Board of the Cooperative may separately allocate and credit to patrons capital allocated and credited to the Cooperative by any organization that furnishes services, supplies or products to the Cooperative known as “affiliated capital credits” if the Cooperative determines and separately identifies such affiliated capital credits.

SECTION 7.05  Non-Operating Margins

All other amounts received by the Cooperative from its operations in excess of costs and expenses shall, insofar as permitted by Law, be:

1.used to offset any losses incurred during the current or any prior fiscal year and

2.   to the extent not needed for that purpose, allocated to its patrons on a patronage basis and any amount so allocated shall be included as part of the capital credited to the patrons' accounts and may be retired in full or in part. The Board shall determine the method, basis, priority, and order of retirement, if any, for all amounts heretofore and hereafter furnished as capital.

3.   used by the Cooperative as permanent, non-allocated capital.

SECTION 7.06  Assignment of Capital Credits

Capital credited to the account of each patron shall be assignable only on the books of the Cooperative pursuant to written instruction from the assignor and only to successors in interest or successor in occupancy in all or a part of such patron's premises served by the Cooperative unless the Board, acting under policies of general application, shall determine otherwise.

SECTION 7.07  Death or Cessation of Legal Existence

Notwithstanding any other provision of these By-laws, the Board may at its discretion have the power at any time upon the death of any natural person being a member, or upon the cessation of legal existence of any corporate entity being a member, if the legal representative shall request in writing that the capital credited to any patron be retired prior to the time such capital would otherwise be retired under the provisions of these By-laws, to retire capital credited under such terms and conditions as the Board, acting under policies of general application, and the legal representatives of such patron shall agree upon; provided that the financial condition of the Cooperative will not be impaired thereby.

The death of any joint member who is a party to a joint membership shall constitute a termination of said membership and shall be treated in all manners as the death of any other patron for early retirement of patronage capital as provided for in these By-laws.

SECTION 7.08  Right of Offset of Capital Credits

The capital credit account allocation of any patron shall be available for offset prior to the time such capital would otherwise be retired under the provisions of these By-laws, by the Cooperative under such terms and conditions as the Board, acting under policies of general application determines at any time for the unpaid debts, liabilities or other obligations of a member, together with interest thereon at the rate as may be established by the Board.

ARTICLE VIII - DISPOSITION OF COOPERATIVE PROPERTY

SECTION 8.01  Substantial Disposition of Property

The Cooperative may not sell, lease, or otherwise dispose of all or a substantial portion of its property unless:

1.   the Board appoints three (3) independent appraisers, each of whom, within a reasonable time, evaluates the Cooperative’s Assets and renders an appraisal valuing the Cooperative’s Assets;

2.   the Board approves the disposition; and

3.   majority of the total membership approves the disposition pursuant to applicable Law.

Notice of any member meeting at which members will consider the disposition states that one of the purposes of the member meeting is to consider the disposition, shall include a summary of:

1.   the proposition for disposition,

2.   the results of the appraisal, and

3.   after payment of Cooperative’s debts, obligations and liabilities, a reasonable estimate of the remaining portion of the disposition will be utilized.

SECTION 8.02  Encumbering Cooperative Property

Notwithstanding anything herein contained, the Board of the Cooperative, without authorization by the members thereof, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust upon, or the pledging or encumbering of any or all of the property, assets, rights, privileges, licenses, franchises, and permits of the Cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the Board shall determine, to secure any indebtedness of the Cooperative to the United States of America or any instrumentality or agency thereof or any other lender.

SECTION 8.03  Disposition To Other Cooperatives, Public Power District or Publicly Owned Entity

The Board may upon the authorization of a majority of those members of the Cooperative voting at a meeting of the members thereof, sell, lease, or otherwise dispose of all or a substantial portion of its property to another Cooperative, public power district or other publicly owned entity or subdivision thereof.

SECTION 8.04  Merger or Consolidating with other Rural Electric Cooperatives

The provisions of Section 8.01 shall not apply to a sale, lease, lease-sale, exchange, transfer, or other disposition to one or more other rural electric Cooperatives if the substantive or actual legal effect thereof is to merge or consolidate with such other one or more rural electric Cooperatives, which may be authorized by a majority of those members voting at a meeting of members.

SECTION 8.05  Distribution of Surplus Assets on Dissolution

Upon the Cooperative's dissolution, any assets remaining after all liabilities or obligations of the Cooperative have been satisfied and discharged, including retirement of outstanding capital credits and refund of outstanding membership fees, shall be distributed as prescribed by Law and the Proposition for Dissolution.

SECTION 8.06  Compact

Prior to any disposition the Cooperative shall comply with any Compact Agreement to which it is then bound.

ARTICLE IX - SEAL

The corporate seal of the Cooperative shall be in the form prescribed by the Board.

ARTICLE X - FINANCIAL TRANSACTIONS

SECTION 10.01  Contracts

Except as otherwise provided in these By-laws, the Board may authorize any officer or officers, agent or agents to enter into any contract or execute and deliver any instrument in the name and on behalf of the Cooperative, and such authority may be general or confined to specific instances.

SECTION 10.02  Checks, Drafts, and similar instruments

All checks, drafts, and other orders for the payment of money and all notes, bonds, or other evidences of indebtedness issued in the name of the Cooperative shall be signed and/or countersigned by such officer or officers, agent or agents, employee or employees of the Cooperative and in such manner as shall from time to time be determined by the Board.

SECTION 10.03  Deposits

All funds except petty cash of the Cooperative shall be deposited to the credit of the Cooperative in such financial institutions as the Board may select.

SECTION 10.04  Fiscal Year

The fiscal year of the Cooperative shall begin on the first day of January of each year and shall end on the thirty-first day of December in the same year.

ARTICLE XI - INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS; INSURANCE

SECTION 11.01  Indemnity of Directors, Officers, Employees, and Agents of Cooperative

The Cooperative shall indemnify any person who was or is a party or is threatened to be made a party to any threatened pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Cooperative) by reason of the fact that they are or were a director, officer, employee or agent of the Cooperative, or is or was serving at the request of the Cooperative as a director, officer, employee, or agent or another corporation partner-joint venture, trust or other enterprise, against

expense ( including attorney’s fees), judgement, fines, and amounts paid in settlement actually and reasonably incurred in connection with such action, suit, or proceeding if they acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Cooperative and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful.  The termination of any action, suit, or proceeding by judgement, order, settlement, conviction, or upon a plea on nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which they reasonably believed to be in or not opposed to the best interest of the Cooperative, and, with respect to any criminal action or proceeding, had reasonable cause to believe that this conduct was unlawful.

SECTION 11.02  Exception to Indemnity

Except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of their duty to the Cooperative unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

SECTION 11.03  Successful on Merits

To the extent that a director, officer, employee, or agent of a Cooperative has been successful on the merits or otherwise in defense of an action, suit, or proceeding referred to in Sections 11.01 and 11.02, or in defense of any claim issue or matter therein, they shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection therewith.

SECTION 11.04  Indemnification

Any indemnification under the foregoing provision of this section (unless ordered by a court) shall be made by the Cooperative only as authorized in the specific case upon a determination of the director, officer, employee, or agent is proper in the circumstances because they have met the applicable standard of conduct as set forth in Sections 11.01 and 11.02.  Such determinations shall be made (1) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or (2) if such quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the members of the Cooperative.

SECTION 11.05  Expense Account

Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Cooperative in advance of the final disposition of such action, suit, or proceeding as authorized by the Board in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee, or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Cooperative as authorized in the section.

SECTION 11.06  Non-Exclusive

The indemnification provided by this section shall not be deemed exclusive of any other right to which those seeking indemnity may be entitled under any By-law, agreement, vote of members, or disinterested directors or otherwise, both as to action in their official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall ensure to the benefit of the heirs, executors and administrators of such a person. 

SECTION 11.07  Insurance

The Cooperative may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Cooperative, or is or was serving at the request of the Cooperative as a director, officer, employee, or agent of another corporation, Cooperative, partnership, joint venture, trust, or other enterprise against any liability asserted against them and incurred by them in such capacity, or arising out of their status as such whether or not the Cooperative would have the power to indemnify them against such liability under the provision of the article.

ARTICLE XII - MISCELLANEOUS

SECTION 12.01  Membership in other organizations

The Cooperative may upon the authorization of the Board, purchase stock in or become a member of any corporation or organization organized on a non-profit basis for the purpose of engaging in or furthering the cause of rural electrification, or of any other corporation or organization, when in the opinion of the Board such membership will promote the interest of the Cooperative.

SECTION 12.02  Policies, Rules, and Regulations

The Board shall have the power to make and adopt such policies, rules, and regulations, not inconsistent with Law, the Articles or these By-laws, as it may deem advisable for the management of the business and affairs of the Cooperative.

SECTION 12.03  Accounting Systems and Reports

The Board shall cause to be established and maintained a complete accounting system which, among other things, and subject to applicable laws and rules and regulations of any regulatory body, shall conform to such accounting system as may from time to time be designated by the Administrator of the Rural Utilities Service of the United States of America. The Board shall also after the close of each fiscal year cause to be made a full and complete audit by certified public accountant, of the accounts, books, and financial condition of the Cooperative as of the end of such fiscal year. 

SECTION 12.04  Close Relative

As used in these By-laws, the term “close relative” means an individual who is, either by blood, Law, or marriage, including half, step, foster, and adoptive relations, a spouse, child, grandchild, parent, grandparent, or sibling; or principally resides in the same residence.  Any individual properly qualified and elected or appointed to any position does not become a Close Relative while serving in the position because of any marriage or legal action to which the individual was not a party.

SECTION 12.05  Assignment and Gift by Failure to Claim

If any member or former member fails to claim or cash any cash retirement of capital credits or their payment from the Cooperative within six (6) years after payment of the same has been made available to them by check mailed to them at their last address furnished by them to the Cooperative, such failure shall be and constitutes an irrevocable assignment and gift by such member of such capital credit or other payments to the Cooperative, as authorized by Law.

SECTION 12.06  Rules of Order

Unless the Board determines otherwise, and to the extent consistent with Law, the Articles, and these By-laws, all member meetings, Board meetings and committee meetings are governed by the fundamental fairness rule with Robert’s Rules of Order as a guide only, not the ultimate authority, of such rule.

SECTION 12.07  General Provisions

Within these By-laws of the Cooperative as currently existing or as later amended unless otherwise provided, words and phrases used in these By-laws have their customary and ordinary meaning; the singular use of any word includes the plural use, and the plural use of any word includes the singular use; the masculine use of any word includes the feminine and neutral uses, the feminine use of any word includes the masculine and neutral uses, and the neutral use of any word includes the masculine and feminine uses; the present tense of any word includes the past and future tenses, and the future tense of any word includes the present tense; and the words “shall” or “must” indicate a mandatory action or requirement, and the word “may” indicates a permissive action or requirement.

SECTION 12.08  Governing Law 

These By-laws must be governed by, and interpreted under, the Laws of the state of South Dakota.

SECTION 12.09  Titles and Headings

All titles and headings of By-law articles, sections, and sub-sections are for convenience and reference only, and do not affect the interpretation of any By-law article, section, or sub-section.

SECTION 12.10  Partial Invalidity

When reasonably possible, every By-law article, section, sub-section, paragraph, sentence, clause, or provision (collectively, “By-law Provision”) must be interpreted in a manner by which the By-law Provision is valid.  The invalidation of any By-law Provision by any entity possessing proper jurisdiction and authority, which does not alter the fundamental rights, duties, and relationship between the Cooperative and members, does not invalidate the remaining By-law Provisions.

SECTION 12.11  Cumulative Remedies

The rights and remedies provided in these By-laws are cumulative.  The Cooperative or any member asserting any right or remedy provided in these By-laws does not preclude the Cooperative or member from asserting other rights or remedies provided in these By-laws.

SECTION 12.12  Successors and Assigns

To the extent allowed by Law the duties, obligations, and liabilities imposed upon the Cooperative or any member by these By-laws are binding upon the successors and assigns of the Cooperative or member; and the rights granted to the Cooperative by these By-laws inure to the benefit of the Cooperative’s successors and assigns.  The binding nature of the duties, obligations, and liabilities imposed by these By-laws upon the successors and assigns of the Cooperative and any member does not relieve the Cooperative or member of the duties, obligations, and liabilities imposed by these By-laws upon the Cooperative or member.

SECTION 12.13  Waiver

The failure of the Cooperative or any member to assert any right or remedy provided in these By-laws does not waive the right or remedy provided in these By-laws.

SECTION 12.14  Lack of Notice

To the extent allowed by Law and the Articles, the failure of any member or director to receive notice of any Meeting, action, or vote does not affect, or invalidate, any action or vote taken by the members or Board.

SECTION 12.15  Electronic Notice, Documents, and Actions

With the consent of a member, notice, dissemination of documents and actions may be completed by electronic means as determined by the Board and as allowed by Law.  An electronic document electronically sent or transmitted to a Member or former Member at the Member or former Member’s last known electronic address is considered sent, received, transmitted, and effective on the date sent by the Cooperative.  An electronic document electronically received or transmitted from a Member or former Member is considered sent, received, transmitted, and effective on the date received by the Cooperative.  If electronically delivered, such notice shall be deemed to be delivered when sent to the last known electronic address of the member for which no nondelivery notice is returned.
If addressed to an address shown in the Membership List, then a written or electronic notice, communication, or report delivered or transmitted as part of a newsletter, magazine, or other publication regularly sent to Members constitutes a notice, communication, or report to all Members:  (1) residing at the address; or (2) having the same address shown in the Cooperative records.
If a Member has reasonable access to appropriate hardware and software, then under such terms and conditions as the Board, acting under policies of general application determines, and as allowed by law, the Member consents and agrees to (A) use, accept, send, receive, and transmit an electronic signature, contract, record, notice, vote, communication, comment, and other document regarding an action, transaction, business , meeting, or activity with, for, or involving the Cooperative; (B) electronically conduct an action, transaction, business, meeting, or activity with, for, or involving the Cooperative; and (C) electronically give or confirm this consent and agreement.

ARTICLE XIII - AMENDMENTS

These By-laws may be altered, amended, or repealed by the members at any regular or special meeting by the affirmative vote of a majority of those members voting thereon; provided the notice of such meeting shall specify the nature of the proposed alterations, amendment, or repeal or an accurate summary and explanation thereof.  Any amendment which is germane to the proposed alterations or amendment specified in the notice and submitted at such meeting may be acted upon at said meeting with the same force and effect as though it had been contained in the notice of the meeting.
The Board may sponsor or propose By-law amendments.
Members may sponsor or propose By-law amendments provided the proposed member By-law amendment is accompanied by a detailed petition filed with the Cooperative containing the printed names and signatures, address and date signed of at least ten percent (10%) of members at least sixty (60) days prior to the membership meeting.