It shall be the aim of
Cavalier Rural Electric Cooperative, Inc.
to make electric energy available to its
members at the lowest cost consistent with
sound economy and good management.
BY LAWS
of
CAVALIER RURAL ELECTRIC COOPERATIVE, INC.
Langdon, ND 58249
ARTICLE I
MEMBERSHIP
SECTION 1. Requirements for Membership. Any person, firm, association, corporation, or body politic or subdivision thereof, upon submission to the cooperative of the membership application hereinafter specified, may become a member in Cavalier Rural Electric Cooperative, Inc. (hereinafter called the "Cooperative") by: (a) filing a written application for membership therein; (b) agreeing to purchase from the Cooperative all electric energy as herein specified; (c) agreeing to comply with and be bound by the articles of incorporation and bylaws of the Cooperative and any rules and regulations adopted by the board of trustee; provided, however, that no person, firm, association, corporation or body politic or subdivision thereof shall become a member unless and until he or it has been accepted for membership by the board of directors or the members. 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 bylaws.
At each meeting of the members held subsequent to the expiration of a period of six months from the date of incorporation of the Cooperative, all applications received more than ninety days prior to such meeting which have not been accepted or which have been rejected by the board of directors shall be submitted by the Secretary to such meeting and, subject to compliance by the applicant with the requirements hereinabove set forth, any such application may be accepted by vote of the members. The Secretary shall give each such applicant at least ten days written notice of the date of the members' meeting to which their application will be submitted and such applicant shall be entitled to be present and heard at the meeting.
SECTION 2. Membership Certificates. Membership in the Cooperative shall be evidenced by a membership certificate which shall be in such form and shall contain such provisions as shall be determined by the board of directors. Such certificate shall be signed by the President and by the Secretary of the Cooperative and the corporate seal shall be affixed thereto. In case a certificate is lost, destroyed or mutilated a new certificate may be issued therefore upon such uniform terms and indemnity to the Cooperative as the board of directors may prescribe.
SECTION 3. Joint Membership. A husband and wife may apply for a joint membership and, subject to their compliance with the requirements set forth in Section 1 of this Article, may be accepted for such membership. The term "member" as used in these bylaws shall be deemed to include a husband and wife holding a joint membership and provisions relating to the rights and liabilities of membership shall apply equally with respect to the holder of a joint membership. Without limiting the generality of the foregoing the effect of the specified actions herein set forth, either by or in respect to the holders of a joint membership shall be as follows:
SECTION 4. Conversion of Membership. (a) A membership may be converted to a joint membership upon the written request of the holder thereof and the agreement by such holder and his or her spouse to comply with the articles of incorporation, bylaws and rules and regulations adopted by the board of directors. The outstanding membership certificate shall be surrendered and shall be reissued by the Cooperative in such manner as shall indicate the changed membership status. (b) Upon the death of either spouse who is a party to the joint membership such membership shall be held solely by the survivor. The outstanding membership certificate shall be surrendered and shall be reissued in such manner as shall indicate the changed membership status; provided, however, that the estate of the deceased shall not be released from any debts due the Cooperative.
SECTION 5. Membership and Service Connection Fees. There shall be no membership fee required. No additional charge shall be made for any additional service connections.
SECTION 6. Purchase of electric energy. Each member shall, as soon as electric energy shall be available, purchase from the cooperative all electric energy purchased for use on the premises specified in his application for membership and shall therefore pay at rates which shall from time to time be fixed by the board of directors; provided, however, that the board of directors may limit the amount of electric energy which the Cooperative shall be required to furnish to any one member. Production or use of electric energy on such premises, regardless of the source thereof, by means of facilities which shall be interconnected with cooperative facilities, shall be subject to appropriate regulations as shall be fixed from time to time by the cooperative. It is expressly understood that amounts paid for electric energy in excess of the cost of service are furnished by the members as capital and each member shall be credited with the capital so furnished as provided in these bylaws. Each member shall pay to the Cooperative such minimum amount per month regardless of the amount of electric energy consumed, as shall be fixed by the board of directors from time to time. Each member shall also pay all amounts owed by him to the Cooperative as and when the same shall become due and payable.
SECTION 7. Termination of Membership. (a) Any member may withdraw from membership upon compliance with such uniform terms and conditions as the board of directors may prescribe. The board of directors of the Cooperative may, bythe affirmative vote of not less than two-thirds of all of the directors, expel any member who fails to comply with any of the provisions of the articles of incorporation, bylaws or rules or regulations adopted by the board of directors but only if such member shall have been given written notice by the Secretary of the Cooperative that such failure makes him liable to expulsion and such failure shall have continued for at least ten days after such notice was given. Any expelled member may be reinstated by vote of the board of directors at any annual meeting or special meeting. The membership of a member who for a period of six (6) months after service is available to him, has not purchased electric energy from the Cooperative, or of a member who has ceased to purchase energy from the Cooperative, shall be cancelled by resolution of the board of directors. (b) Upon the withdrawal, death, cessation of existence or expulsion of a member, the membership of such member shall thereupon terminate, and the membership certificate of such member shall be surrendered forthwith to the Cooperative. Termination of membership in any manner shall not release a member or his estate from any debts due the Cooperative.
ARTICLE II
SECTION 1. Property Interest of Members. Upon dissolution, after (a) all debts and liabilities of the Cooperative shall have been paid, and (b) all capital furnished through patronage shall have been retired as provided in these bylaws, the remaining property and assets of the Cooperative shall be distributed among the members and former members in the proportion which the aggregate patronage of each bears to the total patronage of all members during the seven years next preceding the date of the filing of the certificate of dissolution, or, if the Cooperative shall not have been in existence for such period, during the period of its existence.
SECTION 2. Non-liabilities for debts of the Cooperative. The private property of the members shall be exempt from the 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.
ARTICLE III
MEETING OF MEMBERS
SECTION 1. Annual Meeting. The annual meeting of the members shall be held on a day in October or November of each year, the actual date to be selected by the board of directors and management, to best coincide with the work season activities of the members, at such place in the city of Langdon, in the county of Cavalier, state of North Dakota, as shall be designated in the notice of meeting, for the purpose of electing directors, passing upon report for the fiscal year and transacting such other business as may come before the meeting. It shall be the responsibility of the board of directors 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. In the event of a national emergency or occurrence of a catastrophic event, the annual meeting of the members may be postponed or cancelled the President of the Board. Notice of the cancelled or postponed meeting shall be given by the President in the local media.
SECTION 2. Special Meeting. Special meetings of the members may be called by resolution of the board of directors, or upon the written request signed by any three directors, by the president, or by twenty percent or more of all the members, and 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 within the county of Cavalier, state of North Dakota, specified in the notice of the special meeting.
SECTION 3. Notice of Members Meetings. Written or printed 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 days nor more than thirty 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 member at his address as it appears on the records of the Cooperative with postage thereon prepaid. 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.
SECTION 4. Quorum. As long as the total number of members does not exceed five hundred, ten percent of the total members shall constitute a quorum. In case the total number of members shall exceed five hundred, fifty members or five percent of the total membership, which ever is the larger, shall constitute a quorum. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice, provided that the Secretary shall notify any absent members of the time and place of such adjourned meeting.
SECTION 5. Voting. Each member shall be entitled to only one vote. 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 article of incorporation or these bylaws.
SECTION 6. Proxies. Voting by proxy shall not be permitted. (North Dakota statue 10-15-16 Subsection 4.)
SECTION 7. Order of Business. The order of business at the annual meeting of the members and, so far as possible, at all other meetings of the members, shall be essentially as follows:
ARTICLE IV
DIRECTORS
SECTION 1. General Powers. The business and affairs of the Cooperative shall be managed by a board of seven (7) directors which shall exercise all the powers of the Cooperative, except those powers which are by law, by the Cooperative’s Articles of Incorporation, or by these bylaws conferred upon or reserved to the members.
SECTION 2. Election and Tenure of Office. The service area of the Cooperative shall be divided into seven (7) areas to secure fair geographical representation on the Board of Directors. One director shall be elected from each area. This director shall maintain an active account in the represented area.
The Service areas shall be as follows:
Northwest District – Cypress, Byron, Linden, Glenila, Grey, Bruce and Huron townships.
Northcentral District - Dresden, Mt. Carmel, Minto, South Dresden, Langdon, Moscow and Waterloo townships.
Central District – Loma, Perry, Billings, Nekoma, Osnabrock, Osford and Highland Center townships.
Midwest District – Trier, Henderson, Gordon, Sievert, Banner, Storlie and Klingstrup townships.
South District – Royal, Northfield, Prospect, Hammer, Sullivan, Overland, Fancher and Newland townships.
Northeast District – West Hope, Hope, Harvey, Loam, Elgin, Manilla and Easby townships.
East District – Fremont, North Olga, Hay, South Olga, Alma, East Alma and Montrose townships.
Each Director shall be elected to a three (3) year term. At the annual meeting to be held in 2004, Directors from areas 4 and 5 shall be elected, followed by Directors from areas 6 and 7 at the 2005 annual meeting, and Directors from areas 1, 2 and 3 at the 2006 annual meeting and to continue thereafter in the same rotation.
Directors may be elected by either a majority or plurality of the members present and voting at the meeting of the members.
If no special meeting of the members for the election of directors can be held within a reasonable time after the cancellation or postponement of the annual meeting, the affected director position shall be elected at the same time as and in addition to, the regular elections of the next annual meeting. The incumbent director(s) shall continue to serve until their successors are elected. The term of office for the affected director position shall be two (2) years.
SECTION 3. Qualifications. No person shall be eligible to become or remain a director or to hold any position of trust in the Cooperative who;
Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the board of directors.
SECTION 4. Nomination of Directors. Nomination of candidates for the office of director of Cavalier Rural Electric Cooperative, Inc. shall be made by petition. All nominating petitions must be signed by at least 15 members of the Cooperative and filed at the principle office of the Cooperative at least thirty (30) days before the meeting at which the election shall take place. At least twenty (20) days before the meeting a list of all qualified candidates shall be posted in the principle office of the Cooperative. The Secretary shall mail with the notice of meeting, or separately but at least ten (10) days before the date of the meeting a statement of the number of directors to be elected and names and addresses of the candidates. No member shall sign more than one nominating petition. Nominations may also be made from the floor of the meeting.
SECTION 5. Removal of Directors by Members. Any member may bring charges against a director and, by filing with the Secretary such charges in writing together with a petition signed by at least twenty percent 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 ten days prior to the meeting of the members at which the charges are to be considered and shall have the opportunity at the meeting to be heard in person or by counsel and 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 by the vote of the members at such meeting without compliance with the foregoing provisions with respect to nominations.
SECTION 6. Vacancies. Subject to the provisions of these bylaws with respect to the filling of vacancies caused by the removal of directors by the members, a vacancy occurring in the board of directors shall be filled by the affirmative vote of a majority of the remaining directors for the unexpired portions of the term.
SECTION 7. Compensation. Directors shall not receive any salary for their services as directors, except that by resolution of the board of directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each meeting of the board of directors. No directors shall receive compensation for serving the Cooperative in any other capacity, nor shall any close relative of a director receive compensation for serving the Cooperative, unless the payment and amount of compensation shall be specifically authorized by a vote of the members or the service by such director or close relative shall have been certified by the board of directors as an emergency measure.
SECTION 8. Director's Liability. To the fullest extent permitted by laws governing cooperative associations, as the same exists or may be hereafter amended, a director of this federation shall not be personally liable to the federation or its members for monetary damages for breach of fiduciary duty as a member.
ARTICLE V
MEETING OF DIRECTORS
SECTION 1. Regular Meetings. A regular meeting of the board of directors shall be held without notice, immediately after, and at the same place, as, the annual meeting of the members. A regular meeting of the board of directors shall also be held monthly at such time and place in the city of Langdon, Cavalier County, North Dakota, as the board of directors may provide by resolution. Such regular monthly meetings may be held without notice other than such resolution fixing the time and place thereof.
SECTION 2. Special Meetings. Special meetings of the board of directors may be called by the President or by any three directors, and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. The President or the directors calling the meeting shall fix the time and place (which shall be in Cavalier County, North Dakota), for the holding of the meeting.
SECTION 3. Notice of Directors' Meetings. Written notice of the time, place and purpose of any special meeting of the board of directors shall be delivered to each director not less than five days previous thereto, either personally or by 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 his address as it appears on the records of the Cooperative, with postage thereon prepaid.
SECTION 4. Quorum. A majority of the board of directors shall constitute a quorum, provided, that if less than such majority of the directors is present at said meeting, a majority of the directors present may adjourn the meeting from time to time; and provided further, that the Secretary shall notify any absent director of the time and place or such adjourned meeting. The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the board of directors.
ARTICLE VI
OFFICERS
SECTION 1. 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 of directors from time to time. The offices of the Secretary and of the Treasurer may be held by the same person.
SECTION 2. Election and Term of Office. The officers shall be elected by ballot, annually by and from the board of directors at the meeting of the board of directors held immediately after the annual meeting of the members. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until the first meeting of the members or until his successors shall have been elected and shall have qualified. A vacancy in any office shall be filled by the board of directors for the unexpired portion of the term.
SECTION 3. Removal of Officers and Agents by Directors. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors whenever in its judgement the best interests of the Cooperative will be served thereby. In addition, any member of the Cooperative may bring charges against an officer, and by filing with the Secretary such charges in writing together with a petition signed by twenty percent of the members, may request the removal of such officer. The officer against whom such charges have been brought shall be informed in writing of the charges at least ten days prior to the board meeting at which the charges are to be considered and shall have the 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. In the event the board does not remove such officer, the question of his removal shall be considered and voted upon at the next meeting of the members.
SECTION 4. President. The President shall:
SECTION 5. Vice-President. In the absence of the President, or in the event of his 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 to him by the board of directors.
SECTION 6. Secretary. The Secretary shall:
SECTION 7. Treasurer. The Treasurer shall:
SECTION 8. Manager. The board of directors 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 of trustees may from time-to-time vest in him.
SECTION 9. Bonds of Office. The Treasurer and any other officer or agent of the Cooperative charged with responsibility for the custody of any of its funds or property shall give bond in such sum and with such surety as the board of directors shall determine. The board of directors 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.
SECTION 10. Compensation. The powers, duties and compensation of officers, agents and employees shall be fixed by the board of directors, subject to the provisions of these bylaws with respect to compensation for trustees and close relatives of directors.
SECTION 11. Reports. The officers of the Cooperative shall submit at each annual meeting of the members reports covering the business of the Cooperative for the previous fiscal year. Such reports shall set forth the condition of the Cooperative at the close of such fiscal year.
ARTICLE VII
NON-PROFIT OPERATION
SECTION 1. Cooperative Operation. The Cooperative shall at all times be operated on a cooperative non-profit basis for the mutual benefit of its members. The Cooperative shall be operated without profit to its members but the rates, fees, rents, and other charges for electrical energy and for any other facilities, supplies, equipment, or services by the Cooperative shall be sufficient at all times: (1) To pay all of the operating and maintenance expenses necessary or desirable for the prudent conduct of its business, and the principal and interest on the obligations issued or assumed by the Cooperative in the performance of the purpose for which it was organized and for the creation of reserves.
SECTION 2. Patronage Capital. The revenues of the Cooperative shall be devoted first to the payment of operating and maintenance expenses and the principal and interest on outstanding obligations, and thereafter, to such reserves for improvements, new construction, depreciation, and contingencies as the board of directors, from time to time, may prescribe. Revenues not required for the purposes set forth in this section shall be returned, from time to time, to the members of the Cooperative, in cash, in abatement of current charges for electrical energy, or otherwise as the board of directors may determine on a pro-rata basis according to the amount of business done with each member.
All such amounts in excess of operating and maintenance expenses, principal and interest on outstanding obligations and reserves and contingencies prescribed by the board of directors shall be received by the Cooperative with the understanding that these amounts are furnished by the members as capital. The Cooperative is obligated to pay by credits to a capital account for each member all such amounts in excess of, the expenses set forth herein, except that interest income and amounts received by the Cooperative’s subsidiaries and not from the Cooperative’s operations shall be credited to a general unallocated fund and shall be charged against the fund which is available for distribution by credits to the capital accounts of the members. 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 member is clearly reflected and credited in appropriate record to the capital account of each member and the Cooperative shall, within a reasonable time after the close of the fiscal year, notify each member of the amount of capital so credited to his or her account. All such amounts credited to the capital account of any member shall have the same status as though they had been paid to the member in cash in pursuance of a legal obligation to do so and the member had then furnished the Cooperative corresponding amounts of capital.
In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, outstanding capital credits shall be retired without priority on a pro-rata basis before any payments are made on account of property rights of members. If, at any time prior to dissolution or liquidation, the board of directors shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital then credited to members’ accounts may be retired in full or in part. Any such retirements of capital shall be made in order of priority according to the year in which the capital was furnished and credited, the capital first received by the Cooperative being first retired.
Provided further, however, that the board of directors shall have the power to adopt rules providing for the separate retirement of the portion of capital credited to the accounts of members which corresponds to capital credited to the account of the Cooperative by an organization furnishing electric service to the Cooperative. Such rules shall (a) establish a method for determining the power supply portion of capital credited to each member for each applicable fiscal year, (b) provide for separate identification on the Cooperative’s books of the power supply portion of capital credited to the Cooperative’s members, (c) provide for appropriate notification to members with respect to the power supply portion of capital credited to their accounts and (d) preclude a general retirement of the power supply portion of capital credited to members for any fiscal year prior to the general retirement of other capital credited to members for the same year or of any capital credited to members for any prior fiscal year.
Capital credited to the account of each member shall be assignable only on the books of the Cooperative pursuant to written instructions from the assignor and only to successors in interest or successors in occupancy in all or part of such member’s premises served by the Cooperative unless the board of directors, acting under policies of general application, shall determine otherwise.
Notwithstanding any other provision of these bylaws, the board of directors, at its discretion, shall have the power at any time upon the death of any member who is a natural person, if the legal representatives of his or her estate shall request in writing that the capital credited to any such person be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such member immediately upon such terms and conditions as the board of directors, acting under policies of general application, and the legal representatives of such member’s estate shall agree, provided, however, that the financial condition of the Cooperative will not be impaired thereby. Except upon the death of a natural person, there shall be no other retirements out of order of priority provided for in these bylaws. Insolvency or bankruptcy, whether individual or corporate, shall not be grounds for early or accelerated retirement.
The members of the Cooperative, by dealing with the Cooperative, acknowledge that the terms of the articles of incorporation and bylaws shall constitute and be a contract between the Cooperative and each member, and both the Cooperative and the members are bound by such contract, as fully as though each member had individually signed a separate instrument containing such terms and provisions. The provisions of this article of the bylaws shall be called to the attention of each member of the Cooperative by posting it in a conspicuous place in the Cooperative’s office.
The Cooperative shall not allocate credits under the provisions of this section to patrons of the Cooperative who are not otherwise members.
The Cooperative shall allocate and retire capital credits in a manner that: (1) is consistent with state and federal law; (2) is consistent with operating on a cooperative basis under federal tax law; (3) is fair and reasonable to the Cooperative’s members and non-member patrons; (4) provides the Cooperative with sufficient equity and capital to operate effectively and efficiently; and (5) protects the Cooperative’s financial condition. Subject to law, the Cooperative’s articles of incorporation, and the Cooperative’s bylaws, the allocation and retirement of capital credits are at the sole discretion of the Cooperative’s board of directors.
ARTICLE VIII
DISPOSITION OF PROPERTY
The cooperative may not sell, lease or otherwise dispose of all or any substantial portion of its property unless such sale, lease or other disposition is authorized at a meeting of the members thereof by the affirmative vote of not less than two-thirds of all of the members of the Cooperative and unless the notice of such proposed sale, lease or other disposition shall have been contained in the notice of the meeting; provided, however that notwithstanding anything herein contained, the board of directors 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 of Directors shall determine, to secure any indebtedness of the Cooperative (incurred through loan funds secured for the purpose of improving existing electric facilities, constructing new lines and installation of related equipment or to provide emergency funds for rehabilitation of plant in event of storm damage); nothing in this Article shall prohibit the sale, transfer, conveyance, or exchange of the Cooperative’s assets to another cooperative, agency of the state of North Dakota or of the government of the United States, nor in exchange for physical plant of equal monetary value to any person or organization, public or private.
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ARTICLE IX
SEAL
The Corporate seal of the Cooperative shall be in the form of a circle and shall have inscribed thereon the name of the Cooperative and the words, "Corporate Seal, North Dakota."
ARTICLE X
FINANCIAL TRANSACTIONS
SECTION 1. Contracts. Except as otherwise provided in these bylaws, the Board of Directors 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 2. Checks, Drafts, etc. All checks, drafts, or other orders for the payment of money, and all notes, bonds or other evidence of indebtedness issued in the name of the Cooperative shall be signed by such officer of officers, agent or agents, employee or employees of the Cooperative and in such manner as shall from time to time be determined by resolution of the board of directors.
SECTION 3. Deposits. All funds of the cooperative shall be deposited from time to time to the credit of the Cooperative in such bank or banks as the board of directors may select.
SECTION 4. Change in Rates. Written notice shall be given to the Administrator of the Rural Electrification Administration of the United States of America not less than ninety days prior to the date upon which any proposed change in the rates charged by the Cooperative for electric energy becomes effective.
SECTION 5. 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 of that same year.
ARTICLE XI
MISCELLANEOUS
SECTION 1. Membership in Other Organization. The Cooperative shall not become a member of or purchase stock in any other organization without an affirmative vote of the members at a duly held meeting, the notice of which shall specify that action is to be taken upon such proposed membership or stock purchase, provided, however, that the Cooperative may upon the authorization of the board of directors, purchase stock in or become a member of any corporation organized on a non-profit basis for the purpose of engaging in or furthering the cause of rural electrification, or with the approval of
the Administrator of REA, of any other corporation for the purpose of acquiring electric facilities.
SECTION 2. Waiver of Notice. Any member or director may waive in writing any notice of a meeting required to be given by these bylaws. The attendance of a member or director at any meeting shall constitute a waiver or notice of such meeting by such member or director, except in case a member or director shall attend a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.
SECTION 3. Rules and Regulations. The Board of Directors shall have power to make and adopt such rules and regulations, not inconsistent with law, the articles of incorporation of these bylaws, as it may deem advisable for the management of the business and affairs of the Cooperative.
SECTION 4. Accounting System and Reports. The board of directors 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 Electrification Administration of the United States of America. The books of the Cooperative shall be examined be a committee of the board of directors which shall render reports to the board of directors at least four times a year at regular meetings of the board of directors. The board of directors shall also after the close of each fiscal year, cause to be made a full and complete audit of the accounts, books and financial condition of the Cooperative as of the end of such fiscal year. Such audit reports shall be submitted to the members at the next following annual meeting.
ARTICLE XII
AMENDMENTS
These bylaws may be altered, amended or repealed by the members at any regular or special meeting, provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal.
This institution is an equal opportunity provider and employer.
It shall be the aim of
Cavalier Rural Electric Cooperative, Inc.
to make electric energy available to its
members at the lowest cost consistent with
sound economy and good management.
BY LAWS
of
CAVALIER RURAL ELECTRIC COOPERATIVE, INC.
Langdon, ND 58249
ARTICLE I
MEMBERSHIP
SECTION 1. Requirements for Membership. Any person, firm, association, corporation, or body politic or subdivision thereof, upon submission to the cooperative of the membership application hereinafter specified, may become a member in Cavalier Rural Electric Cooperative, Inc. (hereinafter called the "Cooperative") by: (a) filing a written application for membership therein; (b) agreeing to purchase from the Cooperative all electric energy as herein specified; (c) agreeing to comply with and be bound by the articles of incorporation and bylaws of the Cooperative and any rules and regulations adopted by the board of trustee; provided, however, that no person, firm, association, corporation or body politic or subdivision thereof shall become a member unless and until he or it has been accepted for membership by the board of directors or the members. 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 bylaws.
At each meeting of the members held subsequent to the expiration of a period of six months from the date of incorporation of the Cooperative, all applications received more than ninety days prior to such meeting which have not been accepted or which have been rejected by the board of directors shall be submitted by the Secretary to such meeting and, subject to compliance by the applicant with the requirements hereinabove set forth, any such application may be accepted by vote of the members. The Secretary shall give each such applicant at least ten days written notice of the date of the members' meeting to which their application will be submitted and such applicant shall be entitled to be present and heard at the meeting.
SECTION 2. Membership Certificates. Membership in the Cooperative shall be evidenced by a membership certificate which shall be in such form and shall contain such provisions as shall be determined by the board of directors. Such certificate shall be signed by the President and by the Secretary of the Cooperative and the corporate seal shall be affixed thereto. In case a certificate is lost, destroyed or mutilated a new certificate may be issued therefore upon such uniform terms and indemnity to the Cooperative as the board of directors may prescribe.
SECTION 3. Joint Membership. A husband and wife may apply for a joint membership and, subject to their compliance with the requirements set forth in Section 1 of this Article, may be accepted for such membership. The term "member" as used in these bylaws shall be deemed to include a husband and wife holding a joint membership and provisions relating to the rights and liabilities of membership shall apply equally with respect to the holder of a joint membership. Without limiting the generality of the foregoing the effect of the specified actions herein set forth, either by or in respect to the holders of a joint membership shall be as follows:
- The presence at a meeting of either or both shall be regarded as the presence of one member and shall have the effect of constituting a joint waiver of notice of the meeting;
- The vote of either separately or both jointly shall constitute one joint vote;
- A waiver of notice signed by either or both shall constitute a joint waiver;
- Notice to either shall constitute notice to both;
- Expulsion of either shall terminate the joint membership;
- Withdrawal of either shall terminate the joint membership;
- Either but not both may be elected or appointed as an officer or director, provided that both meet the qualifications for such office.
SECTION 4. Conversion of Membership. (a) A membership may be converted to a joint membership upon the written request of the holder thereof and the agreement by such holder and his or her spouse to comply with the articles of incorporation, bylaws and rules and regulations adopted by the board of directors. The outstanding membership certificate shall be surrendered and shall be reissued by the Cooperative in such manner as shall indicate the changed membership status. (b) Upon the death of either spouse who is a party to the joint membership such membership shall be held solely by the survivor. The outstanding membership certificate shall be surrendered and shall be reissued in such manner as shall indicate the changed membership status; provided, however, that the estate of the deceased shall not be released from any debts due the Cooperative.
SECTION 5. Membership and Service Connection Fees. There shall be no membership fee required. No additional charge shall be made for any additional service connections.
SECTION 6. Purchase of electric energy. Each member shall, as soon as electric energy shall be available, purchase from the cooperative all electric energy purchased for use on the premises specified in his application for membership and shall therefore pay at rates which shall from time to time be fixed by the board of directors; provided, however, that the board of directors may limit the amount of electric energy which the Cooperative shall be required to furnish to any one member. Production or use of electric energy on such premises, regardless of the source thereof, by means of facilities which shall be interconnected with cooperative facilities, shall be subject to appropriate regulations as shall be fixed from time to time by the cooperative. It is expressly understood that amounts paid for electric energy in excess of the cost of service are furnished by the members as capital and each member shall be credited with the capital so furnished as provided in these bylaws. Each member shall pay to the Cooperative such minimum amount per month regardless of the amount of electric energy consumed, as shall be fixed by the board of directors from time to time. Each member shall also pay all amounts owed by him to the Cooperative as and when the same shall become due and payable.
SECTION 7. Termination of Membership. (a) Any member may withdraw from membership upon compliance with such uniform terms and conditions as the board of directors may prescribe. The board of directors of the Cooperative may, bythe affirmative vote of not less than two-thirds of all of the directors, expel any member who fails to comply with any of the provisions of the articles of incorporation, bylaws or rules or regulations adopted by the board of directors but only if such member shall have been given written notice by the Secretary of the Cooperative that such failure makes him liable to expulsion and such failure shall have continued for at least ten days after such notice was given. Any expelled member may be reinstated by vote of the board of directors at any annual meeting or special meeting. The membership of a member who for a period of six (6) months after service is available to him, has not purchased electric energy from the Cooperative, or of a member who has ceased to purchase energy from the Cooperative, shall be cancelled by resolution of the board of directors. (b) Upon the withdrawal, death, cessation of existence or expulsion of a member, the membership of such member shall thereupon terminate, and the membership certificate of such member shall be surrendered forthwith to the Cooperative. Termination of membership in any manner shall not release a member or his estate from any debts due the Cooperative.
ARTICLE II
SECTION 1. Property Interest of Members. Upon dissolution, after (a) all debts and liabilities of the Cooperative shall have been paid, and (b) all capital furnished through patronage shall have been retired as provided in these bylaws, the remaining property and assets of the Cooperative shall be distributed among the members and former members in the proportion which the aggregate patronage of each bears to the total patronage of all members during the seven years next preceding the date of the filing of the certificate of dissolution, or, if the Cooperative shall not have been in existence for such period, during the period of its existence.
SECTION 2. Non-liabilities for debts of the Cooperative. The private property of the members shall be exempt from the 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.
ARTICLE III
MEETING OF MEMBERS
SECTION 1. Annual Meeting. The annual meeting of the members shall be held on a day in October or November of each year, the actual date to be selected by the board of directors and management, to best coincide with the work season activities of the members, at such place in the city of Langdon, in the county of Cavalier, state of North Dakota, as shall be designated in the notice of meeting, for the purpose of electing directors, passing upon report for the fiscal year and transacting such other business as may come before the meeting. It shall be the responsibility of the board of directors 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. In the event of a national emergency or occurrence of a catastrophic event, the annual meeting of the members may be postponed or cancelled the President of the Board. Notice of the cancelled or postponed meeting shall be given by the President in the local media.
SECTION 2. Special Meeting. Special meetings of the members may be called by resolution of the board of directors, or upon the written request signed by any three directors, by the president, or by twenty percent or more of all the members, and 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 within the county of Cavalier, state of North Dakota, specified in the notice of the special meeting.
SECTION 3. Notice of Members Meetings. Written or printed 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 days nor more than thirty 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 member at his address as it appears on the records of the Cooperative with postage thereon prepaid. 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.
SECTION 4. Quorum. As long as the total number of members does not exceed five hundred, ten percent of the total members shall constitute a quorum. In case the total number of members shall exceed five hundred, fifty members or five percent of the total membership, which ever is the larger, shall constitute a quorum. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice, provided that the Secretary shall notify any absent members of the time and place of such adjourned meeting.
SECTION 5. Voting. Each member shall be entitled to only one vote. 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 article of incorporation or these bylaws.
SECTION 6. Proxies. Voting by proxy shall not be permitted. (North Dakota statue 10-15-16 Subsection 4.)
SECTION 7. Order of Business. The order of business at the annual meeting of the members and, so far as possible, at all other meetings of the members, shall be essentially as follows:
- Report as to number of members present in person in order to determine the existence of a quorum.
- Reading of the notice of the meeting and proof of the due publication or mailing thereof, or the waiver or waivers of notice of the meeting as the case may be.
- Reading of unapproved minutes of previous meetings of the members and the taking of necessary action thereof.
- Presentation and consideration of reports of officers, directors, and committees.
- Election of directors.
- Unfinished business.
- New business.
- Adjournment.
ARTICLE IV
DIRECTORS
SECTION 1. General Powers. The business and affairs of the Cooperative shall be managed by a board of seven (7) directors which shall exercise all the powers of the Cooperative, except those powers which are by law, by the Cooperative’s Articles of Incorporation, or by these bylaws conferred upon or reserved to the members.
SECTION 2. Election and Tenure of Office. The service area of the Cooperative shall be divided into seven (7) areas to secure fair geographical representation on the Board of Directors. One director shall be elected from each area. This director shall maintain an active account in the represented area.
The Service areas shall be as follows:
Northwest District – Cypress, Byron, Linden, Glenila, Grey, Bruce and Huron townships.
Northcentral District - Dresden, Mt. Carmel, Minto, South Dresden, Langdon, Moscow and Waterloo townships.
Central District – Loma, Perry, Billings, Nekoma, Osnabrock, Osford and Highland Center townships.
Midwest District – Trier, Henderson, Gordon, Sievert, Banner, Storlie and Klingstrup townships.
South District – Royal, Northfield, Prospect, Hammer, Sullivan, Overland, Fancher and Newland townships.
Northeast District – West Hope, Hope, Harvey, Loam, Elgin, Manilla and Easby townships.
East District – Fremont, North Olga, Hay, South Olga, Alma, East Alma and Montrose townships.
Each Director shall be elected to a three (3) year term. At the annual meeting to be held in 2004, Directors from areas 4 and 5 shall be elected, followed by Directors from areas 6 and 7 at the 2005 annual meeting, and Directors from areas 1, 2 and 3 at the 2006 annual meeting and to continue thereafter in the same rotation.
Directors may be elected by either a majority or plurality of the members present and voting at the meeting of the members.
If no special meeting of the members for the election of directors can be held within a reasonable time after the cancellation or postponement of the annual meeting, the affected director position shall be elected at the same time as and in addition to, the regular elections of the next annual meeting. The incumbent director(s) shall continue to serve until their successors are elected. The term of office for the affected director position shall be two (2) years.
SECTION 3. Qualifications. No person shall be eligible to become or remain a director or to hold any position of trust in the Cooperative who;
- is not a member in the area served or to be served by the Cooperative; or
- is in any way employed by or financially interested in a competing enterprise or a business selling electric energy or supplies to the Cooperative, or a business primarily engaged in selling electrical or plumbing appliances, fixtures, or supplies to the members of the Cooperative.
Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the board of directors.
SECTION 4. Nomination of Directors. Nomination of candidates for the office of director of Cavalier Rural Electric Cooperative, Inc. shall be made by petition. All nominating petitions must be signed by at least 15 members of the Cooperative and filed at the principle office of the Cooperative at least thirty (30) days before the meeting at which the election shall take place. At least twenty (20) days before the meeting a list of all qualified candidates shall be posted in the principle office of the Cooperative. The Secretary shall mail with the notice of meeting, or separately but at least ten (10) days before the date of the meeting a statement of the number of directors to be elected and names and addresses of the candidates. No member shall sign more than one nominating petition. Nominations may also be made from the floor of the meeting.
SECTION 5. Removal of Directors by Members. Any member may bring charges against a director and, by filing with the Secretary such charges in writing together with a petition signed by at least twenty percent 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 ten days prior to the meeting of the members at which the charges are to be considered and shall have the opportunity at the meeting to be heard in person or by counsel and 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 by the vote of the members at such meeting without compliance with the foregoing provisions with respect to nominations.
SECTION 6. Vacancies. Subject to the provisions of these bylaws with respect to the filling of vacancies caused by the removal of directors by the members, a vacancy occurring in the board of directors shall be filled by the affirmative vote of a majority of the remaining directors for the unexpired portions of the term.
SECTION 7. Compensation. Directors shall not receive any salary for their services as directors, except that by resolution of the board of directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each meeting of the board of directors. No directors shall receive compensation for serving the Cooperative in any other capacity, nor shall any close relative of a director receive compensation for serving the Cooperative, unless the payment and amount of compensation shall be specifically authorized by a vote of the members or the service by such director or close relative shall have been certified by the board of directors as an emergency measure.
SECTION 8. Director's Liability. To the fullest extent permitted by laws governing cooperative associations, as the same exists or may be hereafter amended, a director of this federation shall not be personally liable to the federation or its members for monetary damages for breach of fiduciary duty as a member.
ARTICLE V
MEETING OF DIRECTORS
SECTION 1. Regular Meetings. A regular meeting of the board of directors shall be held without notice, immediately after, and at the same place, as, the annual meeting of the members. A regular meeting of the board of directors shall also be held monthly at such time and place in the city of Langdon, Cavalier County, North Dakota, as the board of directors may provide by resolution. Such regular monthly meetings may be held without notice other than such resolution fixing the time and place thereof.
SECTION 2. Special Meetings. Special meetings of the board of directors may be called by the President or by any three directors, and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. The President or the directors calling the meeting shall fix the time and place (which shall be in Cavalier County, North Dakota), for the holding of the meeting.
SECTION 3. Notice of Directors' Meetings. Written notice of the time, place and purpose of any special meeting of the board of directors shall be delivered to each director not less than five days previous thereto, either personally or by 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 his address as it appears on the records of the Cooperative, with postage thereon prepaid.
SECTION 4. Quorum. A majority of the board of directors shall constitute a quorum, provided, that if less than such majority of the directors is present at said meeting, a majority of the directors present may adjourn the meeting from time to time; and provided further, that the Secretary shall notify any absent director of the time and place or such adjourned meeting. The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the board of directors.
ARTICLE VI
OFFICERS
SECTION 1. 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 of directors from time to time. The offices of the Secretary and of the Treasurer may be held by the same person.
SECTION 2. Election and Term of Office. The officers shall be elected by ballot, annually by and from the board of directors at the meeting of the board of directors held immediately after the annual meeting of the members. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until the first meeting of the members or until his successors shall have been elected and shall have qualified. A vacancy in any office shall be filled by the board of directors for the unexpired portion of the term.
SECTION 3. Removal of Officers and Agents by Directors. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors whenever in its judgement the best interests of the Cooperative will be served thereby. In addition, any member of the Cooperative may bring charges against an officer, and by filing with the Secretary such charges in writing together with a petition signed by twenty percent of the members, may request the removal of such officer. The officer against whom such charges have been brought shall be informed in writing of the charges at least ten days prior to the board meeting at which the charges are to be considered and shall have the 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. In the event the board does not remove such officer, the question of his removal shall be considered and voted upon at the next meeting of the members.
SECTION 4. President. The President shall:
- be the principal executive officer of the Cooperative and, unless otherwise determined by the members or the board of directors, shall preside at all meetings of the members and the board of directors.
- sign, with the Secretary, certificates of membership, the issue of which shall have been authorized by the board of directors or the members and may sign any deeds, mortgages, deeds of trust, notes, bonds, contracts or other instruments authorized by the board of directors to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the board of directors or by these bylaws to some other officer or agent of the Cooperative, or shall be required by law to be otherwise signed or executed; and
- in general, perform all duties incumbent to the office of President and such other duties as may be prescribed by the board of directors from time to time.
SECTION 5. Vice-President. In the absence of the President, or in the event of his 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 to him by the board of directors.
SECTION 6. Secretary. The Secretary shall:
- keep the minutes of the meetings of the members and of the board of directors in one or more books provided for that purpose;
- see that all notices are duly given in accordance with these bylaws or as required by law;
- be custodian of the corporate records and of the seal of the Cooperative and affix the seal of the Cooperative to all certificates of membership prior to the issue thereof and to all documents, the execution of which on behalf of the Cooperative under its seal is duly authorized in accordance with the provisions of these bylaws;
- keep a register of the names and post office addresses of all members;
- sign, with the President, certificates of membership, the issue of which shall have been authorized by the board of trustees of the members;
- have general charge of the books of the Cooperative;
- keep on file at all times a complete copy of the articles of incorporation and bylaws of the Cooperative containing all amendments thereto (which copy shall always be open to the inspection of any member) and at the expense of the Cooperative, forward a copy of the bylaws and of all amendments thereto to each member; and
- in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the board of directors.
SECTION 7. Treasurer. The Treasurer shall:
- have charge and custody of and be responsible for all funds and securities of the Cooperative; be responsible for the receipt of and the issuance of receipts for all moneys due and payable to the Cooperative and for the deposit of all such money in the name of the Cooperative in such bank or banks as shall be selected in accordance with the provisions of these bylaws; and
- in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the board of directors.
SECTION 8. Manager. The board of directors 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 of trustees may from time-to-time vest in him.
SECTION 9. Bonds of Office. The Treasurer and any other officer or agent of the Cooperative charged with responsibility for the custody of any of its funds or property shall give bond in such sum and with such surety as the board of directors shall determine. The board of directors 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.
SECTION 10. Compensation. The powers, duties and compensation of officers, agents and employees shall be fixed by the board of directors, subject to the provisions of these bylaws with respect to compensation for trustees and close relatives of directors.
SECTION 11. Reports. The officers of the Cooperative shall submit at each annual meeting of the members reports covering the business of the Cooperative for the previous fiscal year. Such reports shall set forth the condition of the Cooperative at the close of such fiscal year.
ARTICLE VII
NON-PROFIT OPERATION
SECTION 1. Cooperative Operation. The Cooperative shall at all times be operated on a cooperative non-profit basis for the mutual benefit of its members. The Cooperative shall be operated without profit to its members but the rates, fees, rents, and other charges for electrical energy and for any other facilities, supplies, equipment, or services by the Cooperative shall be sufficient at all times: (1) To pay all of the operating and maintenance expenses necessary or desirable for the prudent conduct of its business, and the principal and interest on the obligations issued or assumed by the Cooperative in the performance of the purpose for which it was organized and for the creation of reserves.
SECTION 2. Patronage Capital. The revenues of the Cooperative shall be devoted first to the payment of operating and maintenance expenses and the principal and interest on outstanding obligations, and thereafter, to such reserves for improvements, new construction, depreciation, and contingencies as the board of directors, from time to time, may prescribe. Revenues not required for the purposes set forth in this section shall be returned, from time to time, to the members of the Cooperative, in cash, in abatement of current charges for electrical energy, or otherwise as the board of directors may determine on a pro-rata basis according to the amount of business done with each member.
All such amounts in excess of operating and maintenance expenses, principal and interest on outstanding obligations and reserves and contingencies prescribed by the board of directors shall be received by the Cooperative with the understanding that these amounts are furnished by the members as capital. The Cooperative is obligated to pay by credits to a capital account for each member all such amounts in excess of, the expenses set forth herein, except that interest income and amounts received by the Cooperative’s subsidiaries and not from the Cooperative’s operations shall be credited to a general unallocated fund and shall be charged against the fund which is available for distribution by credits to the capital accounts of the members. 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 member is clearly reflected and credited in appropriate record to the capital account of each member and the Cooperative shall, within a reasonable time after the close of the fiscal year, notify each member of the amount of capital so credited to his or her account. All such amounts credited to the capital account of any member shall have the same status as though they had been paid to the member in cash in pursuance of a legal obligation to do so and the member had then furnished the Cooperative corresponding amounts of capital.
In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, outstanding capital credits shall be retired without priority on a pro-rata basis before any payments are made on account of property rights of members. If, at any time prior to dissolution or liquidation, the board of directors shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital then credited to members’ accounts may be retired in full or in part. Any such retirements of capital shall be made in order of priority according to the year in which the capital was furnished and credited, the capital first received by the Cooperative being first retired.
Provided further, however, that the board of directors shall have the power to adopt rules providing for the separate retirement of the portion of capital credited to the accounts of members which corresponds to capital credited to the account of the Cooperative by an organization furnishing electric service to the Cooperative. Such rules shall (a) establish a method for determining the power supply portion of capital credited to each member for each applicable fiscal year, (b) provide for separate identification on the Cooperative’s books of the power supply portion of capital credited to the Cooperative’s members, (c) provide for appropriate notification to members with respect to the power supply portion of capital credited to their accounts and (d) preclude a general retirement of the power supply portion of capital credited to members for any fiscal year prior to the general retirement of other capital credited to members for the same year or of any capital credited to members for any prior fiscal year.
Capital credited to the account of each member shall be assignable only on the books of the Cooperative pursuant to written instructions from the assignor and only to successors in interest or successors in occupancy in all or part of such member’s premises served by the Cooperative unless the board of directors, acting under policies of general application, shall determine otherwise.
Notwithstanding any other provision of these bylaws, the board of directors, at its discretion, shall have the power at any time upon the death of any member who is a natural person, if the legal representatives of his or her estate shall request in writing that the capital credited to any such person be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such member immediately upon such terms and conditions as the board of directors, acting under policies of general application, and the legal representatives of such member’s estate shall agree, provided, however, that the financial condition of the Cooperative will not be impaired thereby. Except upon the death of a natural person, there shall be no other retirements out of order of priority provided for in these bylaws. Insolvency or bankruptcy, whether individual or corporate, shall not be grounds for early or accelerated retirement.
The members of the Cooperative, by dealing with the Cooperative, acknowledge that the terms of the articles of incorporation and bylaws shall constitute and be a contract between the Cooperative and each member, and both the Cooperative and the members are bound by such contract, as fully as though each member had individually signed a separate instrument containing such terms and provisions. The provisions of this article of the bylaws shall be called to the attention of each member of the Cooperative by posting it in a conspicuous place in the Cooperative’s office.
The Cooperative shall not allocate credits under the provisions of this section to patrons of the Cooperative who are not otherwise members.
The Cooperative shall allocate and retire capital credits in a manner that: (1) is consistent with state and federal law; (2) is consistent with operating on a cooperative basis under federal tax law; (3) is fair and reasonable to the Cooperative’s members and non-member patrons; (4) provides the Cooperative with sufficient equity and capital to operate effectively and efficiently; and (5) protects the Cooperative’s financial condition. Subject to law, the Cooperative’s articles of incorporation, and the Cooperative’s bylaws, the allocation and retirement of capital credits are at the sole discretion of the Cooperative’s board of directors.
ARTICLE VIII
DISPOSITION OF PROPERTY
The cooperative may not sell, lease or otherwise dispose of all or any substantial portion of its property unless such sale, lease or other disposition is authorized at a meeting of the members thereof by the affirmative vote of not less than two-thirds of all of the members of the Cooperative and unless the notice of such proposed sale, lease or other disposition shall have been contained in the notice of the meeting; provided, however that notwithstanding anything herein contained, the board of directors 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 of Directors shall determine, to secure any indebtedness of the Cooperative (incurred through loan funds secured for the purpose of improving existing electric facilities, constructing new lines and installation of related equipment or to provide emergency funds for rehabilitation of plant in event of storm damage); nothing in this Article shall prohibit the sale, transfer, conveyance, or exchange of the Cooperative’s assets to another cooperative, agency of the state of North Dakota or of the government of the United States, nor in exchange for physical plant of equal monetary value to any person or organization, public or private.
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ARTICLE IX
SEAL
The Corporate seal of the Cooperative shall be in the form of a circle and shall have inscribed thereon the name of the Cooperative and the words, "Corporate Seal, North Dakota."
ARTICLE X
FINANCIAL TRANSACTIONS
SECTION 1. Contracts. Except as otherwise provided in these bylaws, the Board of Directors 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 2. Checks, Drafts, etc. All checks, drafts, or other orders for the payment of money, and all notes, bonds or other evidence of indebtedness issued in the name of the Cooperative shall be signed by such officer of officers, agent or agents, employee or employees of the Cooperative and in such manner as shall from time to time be determined by resolution of the board of directors.
SECTION 3. Deposits. All funds of the cooperative shall be deposited from time to time to the credit of the Cooperative in such bank or banks as the board of directors may select.
SECTION 4. Change in Rates. Written notice shall be given to the Administrator of the Rural Electrification Administration of the United States of America not less than ninety days prior to the date upon which any proposed change in the rates charged by the Cooperative for electric energy becomes effective.
SECTION 5. 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 of that same year.
ARTICLE XI
MISCELLANEOUS
SECTION 1. Membership in Other Organization. The Cooperative shall not become a member of or purchase stock in any other organization without an affirmative vote of the members at a duly held meeting, the notice of which shall specify that action is to be taken upon such proposed membership or stock purchase, provided, however, that the Cooperative may upon the authorization of the board of directors, purchase stock in or become a member of any corporation organized on a non-profit basis for the purpose of engaging in or furthering the cause of rural electrification, or with the approval of
the Administrator of REA, of any other corporation for the purpose of acquiring electric facilities.
SECTION 2. Waiver of Notice. Any member or director may waive in writing any notice of a meeting required to be given by these bylaws. The attendance of a member or director at any meeting shall constitute a waiver or notice of such meeting by such member or director, except in case a member or director shall attend a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.
SECTION 3. Rules and Regulations. The Board of Directors shall have power to make and adopt such rules and regulations, not inconsistent with law, the articles of incorporation of these bylaws, as it may deem advisable for the management of the business and affairs of the Cooperative.
SECTION 4. Accounting System and Reports. The board of directors 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 Electrification Administration of the United States of America. The books of the Cooperative shall be examined be a committee of the board of directors which shall render reports to the board of directors at least four times a year at regular meetings of the board of directors. The board of directors shall also after the close of each fiscal year, cause to be made a full and complete audit of the accounts, books and financial condition of the Cooperative as of the end of such fiscal year. Such audit reports shall be submitted to the members at the next following annual meeting.
ARTICLE XII
AMENDMENTS
These bylaws may be altered, amended or repealed by the members at any regular or special meeting, provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal.
This institution is an equal opportunity provider and employer.