SECTION 1. Requirements for Membership
Any natural person, firm, association, corporation, or body politic or subdivision thereof shall become a member of Clay-Union Electric Corporation (hereinafter called the "Cooperative") by:
(a) Making a written application for membership therein;
(b) Receiving and using electric power and energy from the Cooperative as hereinafter specified;
(c) As a specific condition of membership, all members shall agree to comply with and be bound by the articles of incorporation and by-laws of the Cooperative and any rules and regulations adopted by the Board of Directors;
(d) Paying the membership fee hereinafter specified;
(e) No member may hold more than one membership in the Cooperative; and
(f) No membership in the cooperative shall be transferable except as provided in these by-laws.
SECTION 2. Evidence of Membership
Membership in the Cooperative shall be evidenced by the record in the Cooperative’s books of accounts that the membership fee has been paid and further evidenced by action for approval by the Board of Directors.
SECTION 3. Joint Membership
(a) A married couple or business partnership 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 by-laws shall be deemed to include a married couple or business partnership holding a joint membership and any provisions relating to the rights and liabilities of membership shall apply equally with respect to the holders of a joint membership.
(b) Without limiting the generality of the foregoing, the effect of the hereinafter specified actions by or in respect of the holders of a joint membership shall be as follows:
(1) The presence at a meeting of either spouse or any partner 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 spouse separately or any partner shall constitute one joint vote;
(3) A waiver of notice signed by either spouse or any partner shall constitute a joint waiver;
(4) Notice to either spouse or any partner shall constitute notice to the membership;
(5) Expulsion of either spouse shall terminate the joint membership;
(6) Withdrawal of either spouse shall terminate the joint membership;
(7) Termination of the partnership shall terminate the joint membership.
(8) Only one party to a joint membership may be appointed or elected as an officer or director, provided they meet the qualification 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 their spouse or partners to comply with the articles of incorporation, bylaws and rules and regulations adopted by the Board of Directors.
(b) Upon the death of one of the parties who is a part of the joint membership, or upon a change in the legal relationship that causes a business partnership to cease, such membership will be converted by the Cooperative to a membership in the name of the party continuing to receive and use electric service. A joint membership shall be terminated in the case where all parties to the joint membership cease to receive and use electric service. However, the parties to the joint membership shall not be released from any debts due to the Cooperative. The new membership shall be evidenced by the record and books of account of the Cooperative.
(c) Upon the legal separation or divorce of the holders of a joint membership, such membership will be converted by the Cooperative to a membership in the name of the party continuing to receive and use electric service, provided, that the other spouse shall not be released from any debts due to the Cooperative. The new membership shall be evidenced by the records and books of account of the Cooperative.
SECTION 5. Membership Fees
The membership fee shall be five ($5.00) Dollars.
SECTION 6. Purchase of Electric Energy
(a) The Cooperative shall use reasonable diligence to furnish its members with adequate and dependable electric service, however it cannot, and therefore does not, guarantee a continuous and uninterrupted supply thereof. Except as required or allowed by law, and unless otherwise specified in writing by the Board of Directors, each member shall, as soon as electric service shall be available, purchase from the Cooperative all central station electric power and energy purchased for use on all premises to which electric service is furnished pursuant to a membership and shall pay therefore at rates fixed by the Board of Directors.
(b) Each member may produce electric power and energy for the members use, however the production or use of electric power and energy on such premises, regardless of the source thereof, by means of facilities which may be interconnected with cooperative facilities, shall be subject to appropriate regulations as shall be fixed from time to time by the Cooperative, except as otherwise waived in writing by the Board of Directors.
(c) If a member substantially reduces or ceases to use, receive or purchase electric power and energy from the Cooperative, the Cooperative may charge the member and the member shall pay the Cooperative, the reasonable costs and expenses incurred by the Cooperative in the providing of and reliance upon the providing of central station electricity to the member.
(d) Each member shall pay the Cooperative such minimum amount, regardless of the amount of electric power and energy consumed, as shall be fixed by the Board of Directors from time to time. Each member shall also pay all amounts owed by the member 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 by the affirmative vote of not less than two-thirds of all the directors, expel any member who fails to comply with any of the provisions of the articles of incorporation, by-laws, or rules or regulations adopted by the Board of Directors, but only if such member has been given written notice by the Secretary of the Cooperative that such failure makes the member 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 or by vote of the members at any annual or special meeting.
(b) The membership of a member who for a period of six (6) months after service is available to the member, has not purchased electric energy from the Cooperative, or of a member who has ceased to purchase energy from the Cooperative, may be cancelled by resolution of the Board of Directors.
(c) 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 his estate from any debts due the Cooperative.
(d) In case of withdrawal or termination of membership in any manner, the Cooperative shall repay to the member the amount of the membership fee paid by the member, provided however, that the Cooperative shall deduct from the membership fee the amount of any debts or obligations owing from the member to the Cooperative.
SECTION 8. Member-Cooperative Contract
The members of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the articles of incorporation and by-laws shall constitute and be a contract between the Cooperative and each member, and both the Cooperative and the member 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 by-laws shall be called to the attention of each member of the Cooperative by posting in a conspicuous place in the Cooperative's office.
RIGHTS AND LIABILITIES OF MEMBERS
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 by-laws, the remaining property and assets of the Cooperative shall be distributed among the members and former members pursuant to state law.
SECTION 2. 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 3. Member Grant of Property Rights
Each member, upon request of the Cooperative, shall 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 conditions 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’s electric facilities.
MEETINGS OF MEMBERS
SECTION 1. Annual Meeting
(a) The annual meeting of the members shall be held on such date and hour of the day, after March 1st of each year and before May 1 st of each year at any place in the Counties of Clay, Union or Yankton, State of South Dakota, as shall be designated by the Board of Directors in the notice of the meeting, for the purpose of electing directors, passing upon reports for the previous fiscal year and transacting such other business as may come before the meeting. It shall be the responsibility of the Board of Directors to determine the date of said meeting and to make adequate plans and preparations for the annual meeting. If a national, state or local emergency has been declared, the Board of Directors has the ability to postpone an Annual Meeting or reschedule on a date that may be later than May 1st.
(b) If the day fixed for the annual meeting shall fall on a legal holiday, such meeting shall be held on the next succeeding business day. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Cooperative.
SECTION 2. Special Meetings
Special meetings of the members may be called by resolution of the Board of Directors, or upon a written request signed by any three directors, by the President, or by ten (10%) percent or more of all 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 counties of Clay, Union or Yankton, State of South Dakota, specified in the notice of the special meeting, or any other place designated in the notice of the special meeting.
SECTION 3. Notice of Member Meetings
Printed notice published in the "Clay-Union Sparks" as provided for in Article 11, Section 5, of these by-laws, 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 forty 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 their 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 one thousand, five (5%)percent of the total number of members present in person shall constitute a quorum. In case the total number of members shall exceed one thousand, fifty members present in person 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. The minutes of each meeting shall contain a list of the members present in person.
SECTION 5. Voting
(a) Each member 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 of incorporation or these by-laws. Voting by proxy shall not be permitted.
(b) 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 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.
(c) The ballot shall be returned as established by the Board of Directors. The method of mail balloting shall be as required by law and as established by the Board of Directors.
(d) The Record Date for determining the total membership and the members entitled to notice of, or to vote at a regular or special member meeting, is the close of business on the day, thirty (30) days prior to the date on which the annual or special member meeting is to be held.
SECTION 6. Director Districts
(a) The territory served or to be served by the Cooperative shall be divided into five districts, each of which shall contain as nearly as possible the same number of members. Each district shall be represented by one director.
(b) As necessary, the Board shall review the districts to ensure that such districts contain as near as possible the same number of members. Following any revisions to director districts, any members affected by the revisions shall be notified in writing within sixty (60) days.
(c) A detailed description of director districts shall be maintained by the Cooperative.
SECTION 7. Nomination and Election of Directors
(a) Any 15 or more members of the district from which the nominee resides, may by petition nominate any qualified member residing within the district wherein the term of the present director is expiring. Upon receipt of such petition, and having found the same to be in order, the Secretary shall post such nomination in the principal office of the Cooperative. Said petitions for nomination shall be filed with the Cooperative not less than 60 days prior to the annual meeting. Nominations made by petition, if any, received at least 60 days before the meeting shall be included on the official ballot and in the notice of the meeting.
(b) The Secretary shall mail with the notice of the meeting, or separately, but at least 10 days before the date of the meeting, a statement of the number of directors to be elected and the names and addresses of the candidates. The names of the candidates shall be arranged by districts.
(c) 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 nomination has been filed, the vacancy shall be filled by the Board of Directors.
(d) The members may, at any meeting at which a director shall be removed, as provided in these by-laws, elect a successor thereto without compliance with the foregoing requirements with respect to nominations, provided however, that any such successor must meet all of the qualifications of office.
(e) Notwithstanding anything herein contained, failure to comply with any of the provisions of this subsection shall not affect in any manner whatsoever the validity of any election of directors.
(f) Election of directors shall be by ballot, provided that, when there is no contest for representation of a particular district, and if there is no objection, balloting may be dispensed with in respect to that district and voting may be conducted in any other proper manner. The ballots shall list the candidates nominated by petition alphabetically by district. Each member of the Cooperative present at the meeting shall be entitled to vote for one candidate from each district. The candidate from each district receiving the highest number of votes at this meeting shall be declared elected as director. In case the number of votes cast results in a tie, the district director shall be determined by the toss of a coin and the winner shall be declared elected.
SECTION 8. 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:
(a) Report on the number of members present in person in order to determine the existence of a quorum.
(b) Reading of the notice of the meeting and proof of the due publication of mailing thereof, or the waiver or waivers of notice of the meeting, as the case may be.
(c) Reading of the unapproved minutes of the previous annual meeting of the members and the taking of necessary action thereon, or the waiver of such reading based on a majority vote of those members in attendance, as the case may be.
(d) Presentation and consideration of reports of officers, directors and committees.
(e) Election of directors.
(f) Unfinished business.
(g) New business.
SECTION 1. General Powers
The business and affairs of the Cooperative shall be managed by a board of five (5) directors which shall exercise all of the powers of the Cooperative except such as are by law, the articles of conversion or these by-laws conferred upon or reserved to the members.
SECTION 2. Election and Tenure of Office
Directors shall be elected for a three (3) year term. All directors shall be elected as herein before provided as their terms expire at each annual meeting of the members by and from the members to serve the respective term for which they are elected or until their successors shall have been elected and shall have qualified. If an election of director or directors shall not be held on the date designated herein for the annual meeting or any adjournment thereof, a special meeting of the members shall be held for the purpose of electing a director or directors as herein before set out within a reasonable time thereafter. The director or directors may be elected by a plurality vote of the members.
SECTION 3. Qualifications
(a) No person shall be eligible to become or remain a director or hold any position of trust in the Cooperative who:
(1) Is not a member in good standing and bona fide resident in the area served or to be served by the Cooperative and of the district they are to represent; or
(2) 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.
(3) Has been convicted of, plead guilty or nolo contendere to, or received a suspended imposition of sentence for any felony offense;
(4) Attends less than two/thirds (2/3) of the monthly board meetings during the past calendar year;
(5) Was employed or whose spouse was employed by the Cooperative during any time within the past five (5) years;
(6) Is currently employed by the Cooperative or has an immediate member of the family employed by the Cooperative;
(7) Lacks the capacity to enter into legal contracts or otherwise meet the requirements of the office.
(b) Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions, the Board of Directors shall remove such director from office.
(c) Nothing contained in this section will affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors.
SECTION 4. Removal of Directors
(a) 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 (10%) 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 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 by vote of the members at such meeting without compliance with the foregoing provisions with respect to nominations, provided however that the successor must meet all the qualifications of office.
(b) By Board of Directors:
The Board of Directors may bring charges, for cause, at a regular or special meeting, against a Director, and the Secretary shall state in writing the cause for which the removal action is being brought. Such director shall be informed in writing of the charges at least ten days prior to the meeting of the Board of Directors, at which meeting 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 relevant to the charges; and the Board of Directors shall have the same opportunity. The question of the removal of such director shall be considered and voted upon at the board meeting and any vacancy created by such removal may be filled by the Board of Directors under the conditions set forth within these by-laws for the filling of board vacancies.
SECTION 5. Vacancies
(a) Subject to the provisions of these by-laws with respect to the filling of vacancies caused by the removal of a director, 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 portion of the term. The member elected as director to fill the vacancy must meet all the qualifications of office.
(b) Within six months of a director position becoming vacant, the Board of Directors, by a majority vote of the remaining directors, shall select a new director to fill the unexpired term of any vacant director position, provided however, that the successor must meet all the qualifications of office.
SECTION 6. 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, and for attendance at any other meeting on behalf of the Cooperative which is authorized by the Board of Directors. No director shall receive compensation for serving the Cooperative in any other capacity, nor shall any immediate member of the director’s family 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 an immediate member of the director’s family shall have been certified by the Board of Directors as an emergency measure.
SECTION 7. Immediate Member of Director Family Defined
As used in these by-laws, immediate member of a director’s family shall mean a person who is related to the principal person, by consanguinity or affinity, to the second degree or less, i.e., that is a person who is either a spouse, child, parent, brother, sister, grandchild, or grandparent, either by blood or marriage.
MEETING OF DIRECTORS
SECTION 1. Regular Meetings
(a) A regular meeting of the Board of Directors shall be held as soon as reasonably practicable without notice, immediately after the annual meeting of the members.
(b) A regular meeting of the Board of Directors shall also be held monthly at such time and place as the Board of Directors may provide by resolution. Such regular monthly meeting 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 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 unless such notice is waived. 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 directors of the time and place of 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.
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 Secretary and of Treasurer may be held by the same person.
SECTION 2. Election and Term of Office
The officers shall be elected annually, by and from the Board of Directors, at the next regularly scheduled meeting of the Board of Directors held 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 Board of Directors following the next succeeding annual meeting of the members or until his successor 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/Directors and Agents by Directors
Any officer/director or agent may be removed for cause by the Board of Directors whenever in its judgment the best interests of the Cooperative will be served thereby. In addition, any member of the Cooperative may bring charges against an officer, for cause, and by filing with the Secretary such charges in writing together with a petition signed by ten (10%) 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 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 an Officer/Director or Agent shall have the same opportunity. In the event the board does not remove such officer, the question of removal shall be considered and voted upon at the next meeting of the members.
SECTION 4. President
The President shall:
(a) Be the principal executive officer of the Cooperative and, unless otherwise determined by the Board of Directors, shall preside at all meetings of the members and the Board of Directors;
(b) Sign, with the Secretary, any mortgages, deeds of trust, notes, bonds, contracts or other instruments authorized by the Board of Directors to be executed, except in cases which the signing and the execution thereof shall be expressly delegated by the Board of Directors 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
(c) In general perform all duties incident 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 their 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 of Directors.
SECTION 6. Secretary
The Secretary shall:
(a) Keep the minutes of the meetings of the members and of the Board of Directors in one or more books provided for the purpose;
(b) See that all notices are duly given in accordance with these by-laws or as required by law;
(c) Be custodian of the corporate records and of the seal of the Cooperative and affix the seal of the Cooperative 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;
(d) Keep a register of the names and post office addresses of all members;
(e) Have general charge of the books of the Cooperative;
(f) Keep on file at all times a complete copy of the articles of incorporation and by-laws 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 by-laws and of all the amendments thereto to each member; and
(g) In general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned by the Board of Directors.
SECTION 7. Treasurer
The Treasurer shall:
(a) Have charge and custody of and be responsible for all funds and securities of the Cooperative;
(b) Be responsible for the receipt of and the issuance of receipts for all monies due and payable to the Cooperative and for the deposit of all such monies in the name of the Cooperative in such bank or banks as shall be selected in accordance with the provisions of these by-laws; and
(c) In general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned 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 Directors may from time to time delegate.
SECTION 9. Bonds of Officers
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. The cost of all such bonds shall be paid by the Cooperative.
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 by-laws with respect to compensation for directors and immediate family members of directors.
SECTION 11. Reports
The officers of the Cooperative shall submit at each annual meeting of the member’s 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.
SECTION 1. 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 members.
SECTION 2. Patronage Capital in Connection With Furnishing Electric Energy
(a) In the furnishing of electric energy the Cooperative's operations shall be so conducted that all members will through their patronage furnish capital for the Cooperative. 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 in excess of operating costs and expenses properly chargeable against the furnishing of electric energy. All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the members as capital.
(b) The Cooperative is obligated to pay by credits to a capital account for each member all such amounts in excess of operating costs and expenses. 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 an 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 their 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 for capital.
(c) All other amounts received by the Cooperative from its operations in excess of costs and expenses may insofar as permitted by law be:
(1) Used to offset any losses incurred during the current or fiscal year;
(2) To the extent not needed for that purpose, allocated to its members on a patronage basis and any amount so allocated shall be included as a part of the capital credited to the accounts of member, as herein provided;
(3) Used by the Cooperative as permanent, non-allocated capital.
(d) In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid; all remaining assets shall be distributed according to state law.
(e) 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 the first retired.
(f) 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 a part of such members premises served by the Cooperative, unless the Board of Directors, acting under policies of general application, shall determine otherwise.
(g) Notwithstanding any other provision of these by-laws, the Board of Directors, at its discretion, shall have the power at any time upon the death of any member, who was a natural person, if the legal representatives of this estate shall request in writing that the capital credited to any such member be retired prior to the time such capital would otherwise be retired under the provisions of these by-laws, to retire capital credited by 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 members estate shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.
SECTION 3: Assignment and gift by failure to claim
(a) Notwithstanding any other provisions of the by-laws, if any member or former member fails to claim any cash retirement of capital credits or other payment of the same has been made available by check mailed to the last known address furnished to the Cooperative, such failure shall be and constitutes an irrevocable assignment and gift by such member of such capital credit or other payment to the Cooperative.
(b) Failure to claim any such payment within the meaning of this section shall include the failure of such member or former member to cash any check mailed by the Cooperative at the last address furnished to the Cooperative.
(c) The assignment and gift provided under this section shall become effective upon the Cooperative’s compliance with applicable South Dakota law.
DISPOSITION OF PROPERTY
The Cooperative may not sell, mortgage, lease or otherwise dispose of or encumber all or any substantial portion of its property unless such sale, mortgage, lease or other disposition or encumbrance is authorized at a meeting of the members thereof by the affirmative vote of not less than a majority of all members of the Cooperative, and unless the notice of such proposed sale, mortgage, lease or other disposition or encumbrance 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 to United States of America or any instrumentality or agency thereof, or to secure any indebtedness of the Cooperative to the National Rural Utilities Cooperative Finance Corporation, or any other lending agency. Provided further, that the Board of Directors may, upon the authorization of a majority of those members of the Cooperative present at a meeting of the members thereof, sell, lease, or otherwise dispose of all or a substantial portion of its property to another Cooperative or foreign Corporation doing business in this State pursuant to the act under which this Cooperative is incorporated, or to a municipality or other body politic or sub-division thereof.
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, State of South Dakota."
SECTION 1. Contracts
Except as otherwise provided in these by-laws, 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 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 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 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. 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.
SECTION 1. Membership in Other Cooperatives
The Cooperative may, upon the authorization of the Board of Directors, 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 organization, when in the opinion of the Board of Directors such membership will promote the interest of the Cooperative.
SECTION 2. Waiver of Notice
Any member or director may waive in writing any notice of a meeting required to be given by these by-laws, either before or after such meeting. The attendance of a member or director at any meeting shall constitute a waiver of 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 business on the ground that the meeting has not been lawfully called or convened.
SECTION 3: Policies, Rules & Regulations
The Board of Directors shall have power to make and adopt such policies, rules and regulations, consistent with law, the articles of conversion or these by-laws, 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 Utilities Service (RUS) of the United States of America. 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.
SECTION 5: Official Publication
For the purpose of advising the members concerning the general activities of business of the Cooperative, and disseminating such other information as the management may deem advisable, there shall be established an official publication of the Cooperative to be known as the "Clay Union Sparks" or such name as may be determined by the Board of Directors from time to time. The official publication shall be distributed to each member once each month, or at such other intervals as may be determined by the Board of Directors from time to time.
SECTION 6. Area Coverage
The Board of Directors shall make a diligent effort to see that electric service is extended to all unserved persons within the Cooperative service area who;
(a) Desire such service and;
(b) Meet all reasonable requirements established by the Cooperative as a condition of such service.
SECTION 7. Rules of Procedure
Unless otherwise provided in these by-laws, standard rules of parliamentary procedure will be used when conducting all meetings of the Board of Directors and meetings of members of the Cooperative. "Robert's Rules of Order” may be used as a general guide but will not be the final authority.
SECTION 8. Director Liability
The Cooperative shall indemnify a director who is a party to a proceeding by reason of being a director to the extent permitted under South Dakota law.
(a) These by-laws may be amended or repealed by an affirmative vote of a majority of the members at any regular or special meeting provided the notice of such meeting shall have contained a copy of the proposed amendment or repeal.
(b) The Board may propose that the bylaws be amended or repealed at any regular or special member meeting, provided notice of such meeting shall have contained a copy of the proposed amendment or repeal.
(c) Members may by petition, propose that the bylaws be amended or repealed at any regular or special member meeting.
d) Such member petition shall:
(1) Be submitted to the Cooperative not later than ninety (90) days prior to such regular or special member meeting;
(2) Be signed by at least five (5%) of the total membership entitled to vote;
(3) Contain the names and addresses of the signatories.
Revised: April 13, 2021