ARTICLE I - MEMBERSHIP
SECTION 1. Requirements for Membership. Any person, firm, association, corporation, or body politic, or subdivision thereof will become a member of Carroll Electric Cooperative Corporation (hereinafter called the "Cooperative") upon receipt of electric service from the Cooperative, provided that he, she, or it has first:
(a) made a written application for membership therein;
(b) agreed to purchase from the Cooperative electric energy as hereinafter specified;
(c) agreed to comply with and be bound by the articles of incorporation, bylaws, and tariffs of the Cooperative and any policies, rules, regulations, and standards adopted by the board of directors; and,
(d) paid the membership fee as set by the board of directors of the Cooperative.
Upon completion of the above requirements, the certificate of membership shall be evidenced by issuing a unique membership number to the member. No member may hold more than one membership in the Cooperative. If a member presently has, or over the course of time has had, multiple account locations, the terms and conditions for all account locations shall be controlled by the most recently executed written application for service. In the event neither the member or Cooperative can produce a written application for service, the terms and conditions from the Cooperative’s current application for service shall control. In accordance with Ark. Code Ann. §23-18-319(b), memberships shall be nontransferable and surrendered to the Cooperative upon the resignation, expulsion, or death of the member. The Cooperative may, in good faith, grant the surrendered rights and responsibilities received from the original membership to a valid successor of the original member with such uniform terms and conditions as the Cooperative may prescribe.
SECTION 2. Membership Agreement. The articles of incorporation and these bylaws are contracts between the Cooperative and a member. By becoming a member, the member acknowledges and agrees:
(a) every member is a vital and integral part of the Cooperative;
(b) the Cooperative’s successful operation depends upon each member complying with the articles of incorporation and these bylaws;
(c) members are united in an interdependent relationship;
(d) to the terms, conditions, rates, rules, and tariffs approved by the Arkansas Public Service Commission, regardless if the member’s citizenship or premises served by the Cooperative is in Arkansas or elsewhere;
(e) to abide by all applicable safety codes and regulations, including the National Electric Safety Code (NESC), National Electric Code (NEC), and other industry and Cooperative safety standards;
(f) to provide the Cooperative safe, reliable, and ongoing access to maintain the Cooperative’s property located on the member’s premises and grant or convey to the Cooperative a utility easement for the purpose of supplying electricity to the member and/or other members; and,
(g) the member shall indemnify the Cooperative for, and hold the Cooperative harmless from, liabilities, damages, costs, or expenses, including reasonable attorney fees and legal expenses, incurred by the Cooperative, or by a Cooperative director, officer, employee, agent, or representative, and caused by the negligence, gross negligence, or willful misconduct of the member, or by the unsafe or defective condition of the member’s premises and property.
SECTION 3. Inactive Membership. Members who cease to receive electric service from the Cooperative shall be refunded their membership fee but will be classified as inactive members as long as patronage equity is held by the Cooperative. It is the inactive member’s responsibility to alert the Cooperative of any future mailing address change(s). Consistent with Ark. Code Ann. § 23-18-320(e) inactive members hold no voting rights but shall otherwise remain subject to the provisions of these bylaws as specifically determined.
SECTION 4. Resolution of Disputes. It is the responsibility of the Cooperative to engage in a good faith effort to resolve any claim or dispute which may arise between the Cooperative and a member or inactive member on a fair and impartial basis. In this effort, the Cooperative will give consideration to:
(a) rules and regulations imposed by state and federal agencies;
(b) the Cooperative’s articles of incorporation, these bylaws, policies, practices, plans, and procedures, which are designed to benefit the membership as a whole;
(c) industry standards; and,
(d) the individual facts and circumstances regarding the claim or dispute.
If a member or inactive member is dissatisfied with the Cooperative’s resolution of their claim or dispute, all matters under the jurisdiction of the Arkansas Public Service Commission shall be resolved by the Arkansas Public Service Commission or, if and when appropriate, the applicable regulatory body with jurisdiction over the Cooperative.
All other claims and disputes, with the exception of bill collections and eminent domain matters, shall, at the request of either party, first be submitted to mediation conducted by an impartial mediator agreed to by the parties. In the event the claim or dispute is not satisfactorily resolved at mediation, then such shall, at the request of either party, be submitted to binding arbitration to be conducted in accordance with the Federal Arbitration Act (FAA), 9 U.S.C. § 1, et seq. when applicable, and when not, subject to the Arkansas Uniform Arbitration Act (AUAA), Ark. Code Ann. §16-108-201, et seq. by the American Arbitration Association.
The Cooperative shall determine the location of the arbitration proceeding. Each party agrees to pay their own attorneys’ fees and costs and each party agrees to share equally in the cost of the arbitrator. Each party agrees, to the fullest extent allowed by law, that the arbitrator shall be the person to decide all threshold issues and to decide all issues of arbitrability, scope, validity, enforceability, unconscionability, retroactivity, and/or applicability. A judgment on the award rendered by the arbitrator shall be entered in any court having jurisdiction thereof.
No member or inactive member of the Cooperative shall participate in any class action or putative class action against the Cooperative, either as a class representative or a member of the class.
SECTION 5. Joint Membership. Any two or more persons, 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 persons holding a joint membership and any provisions relating to the rights and liabilities of membership shall apply jointly and severally with respect to the holders of a joint membership. 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:
(a) the presence at a meeting of any or all persons holding a joint membership shall be regarded as the presence of one member and shall constitute a joint waiver of notice of the meeting;
(b) any mail ballot returned shall constitute the final vote of a joint member, any proxy voting shall be determined by provisions herein, and voting in person shall require the parties of a joint membership to agree to one (1) voting delegate, provided that in all cases joint memberships exercise only one (1) vote;
(c) a waiver of notice signed by any one, or all, shall constitute a joint waiver;
(d) notice to any one shall constitute notice to all; and,
(e) only one person may be elected or appointed as an officer or director.
SECTION 6. Purchase of Electric Energy.
(a) Each member shall, as soon as electric energy shall be available, purchase from the Cooperative electric energy and shall pay for said energy consumed when billed at such rates as from time to time may be established by the board of directors. It is expressly understood that amounts paid for electric energy in excess of the cost of service and the cost of discharging those powers enumerated in Ark. Code Ann. §23-18-307, are furnished by members as capital and each member shall be credited with the capital so furnished as provided in these bylaws. Each member shall also pay all amounts owed by said member to the Cooperative as and when the same shall become due and payable.
(b) The Cooperative shall provide electric energy in a reasonable manner but does not insure, guarantee, or warrant it will provide adequate, continuous, or non-fluctuating electric energy. The Cooperative shall not be liable for damages or costs of expenses, including attorney fees or legal expenses caused from providing inadequate, non-continuous, or fluctuating electric energy unless the damages, costs, or expenses are a result of the Cooperative’s gross negligence or willful misconduct.
SECTION 7. Termination of Membership.
(a) Memberships shall terminate based on uniform terms and conditions as the Cooperative may prescribe, including the disconnection of electric service, death, resignation, or expulsion.
(b) Termination of membership in any manner shall not release a member or said member's estate from any debts due the Cooperative.
(c) Upon termination, the Cooperative shall repay to the member the amount of the membership fee paid by such member; provided, however, the Cooperative shall deduct from the amount of the membership fee the amount of any debts or obligations owed by the member to the Cooperative.
ARTICLE II - OFFICIAL BUSINESS OF THE MEMBERSHIP
SECTION 1. Written Notice. Each Cooperative member actively receiving electric service, as of the day of record, shall have notice of official business matters as well as an opportunity to vote on such matters. The day of record shall be no more than 45 days prior to the date notice is mailed. Notice of the official business of the membership shall conform to Ark. Code Ann. §23-18-320(d)(1) and (2) and shall be deemed to be delivered when deposited for mailing to the address as it appears on the records of the Cooperative.
SECTION 2. Quorum. Unless otherwise specified herein, four percent of the Cooperative’s membership on the day of record, casting a ballot or exercising a proxy, shall constitute a quorum for the transaction of official business.
SECTION 3. Official Business. The official business of the membership shall include:
(a) Amendments, if any, to the Cooperative’s articles of incorporation.
(b) The election of director(s) to the Cooperative’s board of directors.
(c) Other proposals by the Cooperative’s board of directors which comply with Ark. Code Ann. §23-18-320, other relevant rules, regulations, and laws which govern the Cooperative and the provisions herein.
(d) Member initiated proposals which comply with Ark. Code Ann. §23-18-320, other relevant rules, regulations, and laws which govern the Cooperative, and the provisions herein. Properly presented member-initiated proposals shall: precisely describe the action to be considered; be supported by the number of members described in Ark. Code Ann. §23-18-320(c); be submitted on exact forms provided by the Cooperative at its principal office in Berryville, Ark.; contain the original, dated signatures alongside the printed name, address, member number, and telephone number appearing on the Cooperative’s member records. Any signature obtained prior to the Cooperative’s most recent annual meeting shall be excluded. The Cooperative’s attorney shall evaluate the proposal’s compliance with relevant rules, regulations, and laws which govern the Cooperative and shall validate the authenticity and number of signatures submitted with the proposal. Unless the proposal calls for a special meeting of the members as provided by Ark. Code Ann. §23-18-320(c), a validated proposal shall only be considered with the Cooperative’s annual member meeting, provided the proposal is submitted between 120 and 180 days in advance of the annual member meeting.
SECTION 4. Meetings of Members. The Secretary shall include with the notice of any annual member meeting, the official business matters submitted for a membership vote, a ballot and/or proxy with return postage to the Cooperative’s principal business office, the manner of voting, and written financial and statistical reports from the previous year. Official business conducted at a special meeting of members shall be held at the location, date, and time determined by the board of directors and shall comply with Ark. Code Ann. §23-18-320 and other provisions herein. The Secretary shall include with the notice, the official business matters submitted for a membership vote, a ballot and/or proxy with return postage to the Cooperative’s principal business office, and the manner of voting. If mail ballots are the only manner of voting, the meeting’s location, date, and time will be considered the Cooperative’s mailing address and the deadline for the final receipt of ballots.
SECTION 5. Voting. Voting shall be conducted in accordance with Ark. Code Ann. §23-18-313 and §23-18-320(e) and (f) and the provisions herein. Except as otherwise provided by law, the articles of incorporation, or these bylaws, a majority of votes cast, provided a quorum is satisfied, shall decide the official business of the membership. The manner(s) of voting shall be determined by the board of directors, provided that in all cases members shall have an opportunity to cast a ballot by mail and any deadline for returning ballots shall conform to the notice provisions of Ark. Code Ann. §23-18-320(d). If ballots will be cast in person, a location(s) which can reasonably accommodate the membership and voting process shall be secured by the Cooperative and each member not in physical attendance shall be permitted to exercise a vote by proxy, as provided below. The use of a proxy shall not be permitted for the election of directors. The attorney for the Cooperative or other election official designated by the Cooperative shall be responsible for securing the ballots and proxies exercised (if any), counting the votes, and certifying the results. If any matter presented to the membership results in a tie vote, the matter shall be decided by the board of directors. The first member to sign a qualified member-initiated proposal, or his or her designee, and any candidate on the ballot for election of director, or his or her designee, are entitled to observe. Certified results of mail voting shall be posted on the Cooperative’s website.
SECTION 6. Exercising a Proxy. All members shall receive notice of official business matters in which voting by proxy is permitted. Each proxy shall be a pre-numbered written instrument provided to all members of record by the Cooperative. All proxies shall be on the exact form prepared by the Cooperative and shall allow each member to substitute a voting proxy by; designating another member of the Cooperative by the member’s full name, mailing address, and member number corresponding to the records of the Cooperative; appointing an individual director representative from the board of directors; or enabling the majority judgment of the whole board of directors. No proxy may be exercised unless the same shall have been received in a sealed envelope, with return postage paid by the Cooperative and addressed to the secretary, on or before the deadline stated on the proxy. The deadline for returning proxies shall not conflict with the notice provisions of Ark. Code Ann. §23-18-320(d) and shall afford the Cooperative a reasonable opportunity to validate membership credentials of the proxies received. In the event a member exercises two or more proxies for the same meeting, the most recently dated proxy shall revoke all others; if such proxies carry the same date and are held by different persons, none of them shall be valid or recognized. The presence of a member in person at a meeting shall revoke any proxy theretofore executed by said member for such meeting, and he or she shall be entitled to vote in the same manner and with the same effect as if he or she had not executed a proxy.
ARTICLE III - BOARD MEMBERS
SECTION 1. General Powers. The business and affairs of the Cooperative shall be managed by a board of not less than seven nor more than nine directors which shall exercise all of the powers of the Cooperative except such as are by law, the articles of incorporation, or these bylaws conferred upon or reserved to the members.
SECTION 2. Qualifications. To become or remain a director an individual must at the time of application and thereafter:
(a) have the full legal capacity to enter legally binding and nonvoidable contracts, without limitation;
(b) be lawfully present in the United States of America;
(c) maintain all membership accounts in good standing and bona fide primary residency in the representative district for at least 36 consecutive months;
(d) not receive substantial incentives through investments, employment, contracting, or services from a competing enterprise or an unaffiliated enterprise substantially engaged in selling electric energy or products which generate or store electricity, to the Cooperative or to its members;
(e) not be the incumbent of or candidate for an elective public office in connection with which a salary is paid;
(f) not be employed or a close relative to someone employed by the Cooperative, another electric utility, or their affiliates within the past five years;
(g) not be a former employee or a close relative to a former employee terminated for cause;
(h) not be convicted of a felony within the past 15 years and consent to a background check;
(i) not be a party to past or current legal proceeding materially contrary to the Cooperative’s best interests;
(j) in accordance with the legal doctrine known as the business judgment rule and in conformance with Ark. Code Ann. §23-18-321(a), “discharge the duties as a director in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner he or she reasonably believes to be in the best interests of the corporation;”
(k) comply with the Cooperative’s drug-free workplace policy and statement and submit to random drug screens;
(l) be committed to learning about the Cooperative and issues affecting the electric industry, and willing to devote significant time necessary to become a meaningful contributor on behalf of all members served by the Cooperative; and,
(m) place a high value on personal and corporate integrity and ethical behavior, including, during the past five years, not knowingly communicating to the membership any false, misleading, defamatory, or improper information regarding the Cooperative’s officials, activities, and affairs.
SECTION 3. Election and Tenure of Office. Each director shall be elected to serve a term of seven years, or until a successor shall have been elected and shall have qualified, subject to the other provisions of these bylaws.
The area assigned to or served by the Cooperative shall consist of nine districts, described as follows:
District No. 1 - That portion bounded on the north by the state line between Arkansas and Missouri; on the east by the range line between Ranges 31 and 32, thence south to the township line between Townships 20 and 21, thence east to the range line between Ranges 30 and 31, thence south to the southern boundary of the Cooperative's service area; on the south by the southern boundary of the Cooperative’s service area; and, on the west by the state line between Arkansas and Oklahoma.
District No. 2 - That portion bounded on the north by the state line between Arkansas and Missouri; on the east by the range line between Ranges 29 and 30; on the south by the township line between Townships 19 and 20; and, on the west by the range line between Ranges 30 and 31, thence north to the township line between Townships 20 and 21, thence west to the range line between Ranges 31 and 32, thence north to the state line between Arkansas and Missouri.
District No. 3 - That portion bounded on the north by the township line between Townships 19 and 20; on the east by the range line between Ranges 27 and 28; on the south by the township line between Townships 18 and 19; and, on the west by the range line between Ranges 30 and 31.
District No. 4 - That portion bounded on the north by the state line between Arkansas and Missouri; on the east by the range line between Ranges 24 and 25; on the south by the township line between Townships 19 and 20; and, on the west by the range line between Ranges 29 and 30.
District No. 5 - That portion bounded on the north by the state line between Arkansas and Missouri; on the east by the eastern boundary of the Cooperative’s service area; on the south by the township line between Townships 18 and 19; and, on the west by the range line between Ranges 27 and 28, thence north to the township line between Townships 19 and 20, thence east to the range line between Ranges 24 and 25, thence north to the state line between Arkansas and Missouri.
District No. 6 - That portion bounded on the north by the township line between Townships 18 and 19; on the east by the range line between Ranges 21 and 22, thence south to the township line between Townships 15 and 16, thence west to the range line between Ranges 22 and 23, thence south to the township line between Townships 13 and 14; on the south by the southern boundary of the Cooperative’s service area; and, on the west by the range line between Ranges 26 and 27, thence north to the township line between Townships 15 and 16, thence east to the range line between Ranges 25 and 26, thence north to the township line between Townships 18 and 19.
District No. 7 - That portion bounded on the north by the township lines between Townships 18 and 19; on the east by the range line between Ranges 25 and 26; on the south by the township line between Townships 15 and 16, thence west along the southern boundary of the Cooperative’s service area to the range line between Ranges 30 and 31; and, on the west by the range line between Ranges 30 and 31.
District No. 8 - That portion bounded on the north by the township lines between Townships 18 and 19 and Townships 17 and 18; on the east and south by the boundaries of the area served by the Cooperative; and on the west by the range lines between Ranges 22 and 23, thence north to the township line between Townships 15 and 16, thence east to the range line between Ranges 21 and 22, thence north to the service boundary of the Cooperative.
District No. 9 - That portion of the Cooperative's service area north of the Arkansas and Missouri state line.
SECTION 4. Nominations. A third-party official shall be appointed by the Cooperative to determine which individuals seeking nomination to the ballot for the election of directors meet the minimum qualifications of directors as described in these bylaws. No employee, officer, director, or close relative of a director shall serve as a third-party official. The third-party official shall review all completed, up-to-date applications submitted to the Cooperative not less than 120 days nor more than 165 days before the date of the meeting of members at which directors are to be elected. Only applications which satisfy the minimum qualifications of directors as described in these bylaws shall receive further consideration.
(a) A nominating committee consisting of members of the Cooperative shall be appointed by the Cooperative. Each committee member shall:
i. at the time of appointment and thereafter, maintain all membership accounts in good standing including maintaining his or her bona fide residence with the Cooperative for at least 36 consecutive months;
ii. not receive substantial incentives through investments, employment, contracting, or services from a competing enterprise or an unaffiliated enterprise substantially engaged in selling electric energy or products which generate or store electricity, to the Cooperative or to its members;
iii. not be the incumbent of or candidate for an elective public office in connection with which a salary is paid;
iv. not be an employee of the Cooperative;
v. not be a director, former director, or close relative to a director or former director of the Cooperative;
vi. place a high value on personal integrity and ethical behavior; and,
vii. serve a three-year term and shall be prohibited from serving consecutive terms.
(b) The committee shall meet not less than 75 days nor more than 90 days before the date of the meeting of the members. It shall be the duty of the committee to:
i. elect a chairperson amongst members of the committee;
ii. protect any personal information disclosed to the committee;
iii. review only the applications which meet the minimum qualifications of a director;
iv. discuss and consider the degree to which the credentials each application exceeds both the minimum qualifications and other applications;
v. contemplate the value of the committee’s endorsement to the membership as a whole;
vi. apply the legal doctrine of the business judgment rule by discharging all duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner believed to be in the best interests of the Cooperative;
vii. vote upon the nomination(s) for each open director district; and,
viii. report the committee’s nominations to the Cooperative for placement on the ballot.
(c) The Cooperative shall provide any applicant not nominated by the nominating committee and who meets the minimum qualifications of directors as determined by the third-party official the opportunity to submit a nomination by petition. Any such petition must include the signatures of at least one-half percent of the total membership of the Cooperative as shown in the books and records of the Cooperative as of the end of the preceding calendar year. Of such total signatures, at least 250 must be from members in the district for which the nomination is being made. The petition shall be on exact forms provided by the Cooperative at its principal office in Berryville, Ark., not more than 75 days prior to the meeting of the members and must:
i. list on each page of the petition, the name of the nominee;
ii. indicate on each page of the petition, the director position for which the nominee will run; and,
iii. contain the original, dated signatures alongside the printed name, address, member number, and telephone number appearing on the Cooperative’s member records.
Said petition must be received by the Cooperative at its business office in Berryville, Ark., not less than 45 days before the date of the meeting of the members and shall be stamped by the Cooperative on each page the date and time received. After verifying by the Cooperative the petition complies with these bylaws, the Cooperative shall notify the member seeking nomination of the results.
(d) The secretary shall mail with the notice of the meeting or separately, at least 10 days but not more than 30 days before the date of the meeting, a ballot indicating the number of directors to be elected and the number of the district from which each is to be selected including a listing of nominees presently holding office, followed in order of nomination by any other nominees. The secretary shall also mail biographical information about each nominee for consideration by the membership.
SECTION 5. Voting for Directors. The election of directors shall be by mail ballot and only the names of those nominees selected by the nominating committee or by valid petition shall be on the ballot. The candidate receiving the greatest number of votes cast in the balloting for each director position to be filled in the election shall be deemed the winner of such director position.
SECTION 6. Resignation and Removal of Directors. Directors may resign their positions in writing for any reason including his or her inability to meet all director qualifications. It shall be the responsibility of the board of directors to identify any failure or permanent physical or mental inability in meeting director qualifications and any misconduct sufficient to constitute cause for his or her removal. Acts of misconduct include, but are not limited to, violation of these bylaws or other policies, rules, and regulations of the Cooperative; fraud or dishonesty of such director resulting in his or her enrichment at the expense of the Cooperative; or misappropriation of the assets of the Cooperative to his or her personal benefit. Directors shall be removed upon a two-thirds vote of the board of directors.
SECTION 7. Vacancies. Subject to the provisions of Ark. Code Ann. §23-18-321 and these bylaws, a vacancy occurring on the board of directors may be filled by a qualified candidate, as determined by the third-party official, upon the affirmative vote of a majority of the remaining directors until the term of the vacant office expires.
SECTION 8. Compensation. Directors shall not receive any salary for their services as such, but by resolution of the board of directors, a fixed sum may be allowed for each day or portion thereof spent on Cooperative business, such as attendance at meetings, conferences, and training programs or performing committee assignments when authorized by the board of directors. In addition and if authorized by the board of directors, directors may also be reimbursed for expenses actually and necessarily incurred in carrying out such Cooperative business. The board of directors may also authorize the payment of the premiums on individual or family insurance coverage for members of the board of directors in insurance programs maintained by the Cooperative. No director 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 board of directors or the service by the director or a close relative shall have been certified by the board of directors as an emergency measure.
SECTION 9. Indemnification: Advancement of Expenses. The Cooperative shall indemnify, to the fullest extent expressly authorized by Ark. Code Ann. §23-18-307(22), as amended from time to time, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (including an action or suit by or in the right of the Cooperative) by reason of the fact that he or she is or was a director, officer, employee, or agent of the Cooperative, or is or was serving at the request of the Cooperative as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement incurred by him or her in connection with such action, suit, or proceeding.
The Cooperative, to the fullest extent expressly authorized by Ark. Code Ann. §23-18-307(22), as amended from time to time, shall also pay, in advance of the final disposition of a civil or criminal action, suit, or proceeding, the expenses incurred by a director or officer in defending such action, suit, or proceeding. The indemnification and advancement of expenses provided by this Section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled both as to action in his or her official capacity and as to action in another capacity while holding such office. The provisions of this paragraph shall not apply to any proceeding which the board of directors determines is likely to result in the finding of dishonesty, fraud, or intentional misconduct by any such party.
ARTICLE IV - MEETINGS OF DIRECTORS
SECTION 1. Regular Meetings. Regular meetings of the board of directors shall be held at such time and at such place as the board of directors may provide by resolution. Such regular 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 chairman of the board, the president/chief executive officer, or by any three directors. Notice of the time, place, and purpose of any special meeting shall be delivered to each director either personally, by United States mail, or by electronic means, including but not limited to email or text message. If notice is delivered personally through electronic means, it shall be deemed to be delivered after 24 hours or once delivery is confirmed by the recipient. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the directors at their addresses as they appear on the records of the Cooperative at least 48 hours before the date set for the meeting.
SECTION 3. Quorum. A majority of the board of directors shall constitute a quorum for the transaction of business at any meeting of the board of directors; provided, however, that if less than a majority of the directors is present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Except as otherwise provided in these bylaws, any regular board meeting or special board meeting may be conducted with absent directors participating, and deemed present in person, through any means of communication by which all directors participating in the board meeting may reasonably and verifiably identify themselves, and simultaneously and approximately instantaneously communicate with each other during the board meeting.
SECTION 4. Manner of Acting. 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. In accordance with Ark. Code Ann. §23-18-321(f)(4) the board of directors may act in the absence of a regular or special meeting, provided that all directors consent as evidenced by the signature of each director within the minutes describing the action taken.
ARTICLE V - OFFICERS
SECTION 1. Number. The officers of the Cooperative shall be a chairman of the board, vice chairman of the board, secretary, treasurer, and such other officers as may be determined by the board of directors from time to time. The offices of secretary and treasurer may be held by the same person.
SECTION 2. Election and Term of Office. The chairman of the board, vice chairman of the board, secretary, and treasurer shall be held by directors of the board and shall be elected , annually, by and from the board of directors at the first meeting of the board of directors held after each annual meeting of the members. If the election of board officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each board officer shall hold office until the first meeting of the board of directors following the next succeeding annual meeting of the members or until a successor shall have been duly elected and shall have qualified, subject to the provisions of these bylaws with respect to the removal of officers.
SECTION 3. Removal. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors whenever, in its judgment, the best interests of the Cooperative will be served thereby.
SECTION 4. Vacancies. Except as otherwise provided in these bylaws, a vacancy in any office may be filled by the board of directors.
SECTION 5. Chairman of the Board. The chairman of the board shall:
(a) be the principal executive officer of the Cooperative and, unless otherwise determined by the directors, shall preside at all meetings of the members and the board of directors;
(b) 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,
(c) in general, perform all duties incident to the office of chairman of the board and such other duties as may be prescribed by the board of directors from time to time.
SECTION 6. Vice Chairman of the Board. The vice chairman of the board shall:
(a) in the absence of the chairman of the board, or in the event of his or her inability or refusal to act, perform the duties of the chairman of the board, and when so acting shall have all the powers of and be subject to all the restrictions upon the chairman of the board; and,
(b) perform such other duties as may be assigned by the board of directors from time to time.
SECTION 7. Secretary. The secretary shall be responsible for:
(a) keeping the minutes of the meetings of the members and of the board of directors in books provided for that purpose;
(b) seeing that all notices are duly given in accordance with these bylaws or as required by law;
(c) the safekeeping of the corporate books and records and the Seal of the Cooperative and affixing 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) keeping a register of the names and post office addresses of all members and inactive members;
(e) keeping 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, furnishing a copy of the bylaws and of all amendments thereto to any member upon request; and,
(f) in general, performing all duties incident to the office of secretary and such other duties as may be assigned by the board of directors from time to time.
SECTION 8. Treasurer. The treasurer shall be responsible for:
(a) custody of all funds and securities of the Cooperative;
(b) 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 bylaws; and,
(c) the general performance of all the duties incident to the office of treasurer and such other duties as may be assigned by the board of directors from time to time.
SECTION 9. President/Chief Executive Officer. The board of directors shall appoint a president/chief executive officer who may be, but who shall not be required to be, a member of the Cooperative. Consistent with Ark. Code Ann. §23-18-323(b), the president/chief executive officer shall serve as an ex officio member of the board of directors and executive committee as defined by Ark. Code Ann. §23-18-322 and perform such duties and shall exercise such authority as the board of directors may vest in him or her from time to time.
SECTION 10. Bonds of Officers. The board of directors shall require the treasurer and any other officer of the Cooperative charged with responsibility for the custody of any of its funds or property to be bonded 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 be bonded in such amount and with such surety as it shall determine.
SECTION 11. Compensation. The powers, duties, and compensation of officers shall be fixed by the board of directors.
SECTION 12. 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 VI - NON-PROFIT OPERATION
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 patrons. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its patrons.
SECTION 2. Patronage Capital in Connection with Furnishing Electric Energy. In the furnishing of electric energy, the Cooperative's operations shall be so conducted that all patrons will through their patronage furnish capital for the Cooperative. In order to induce patronage and to assure the Cooperative will operate on a non-profit basis, the Cooperative is obligated to account on a patronage basis to all its patrons for all amounts received and receivable from the furnishing of electric energy in excess of operating costs and expenses and the cost of discharging those powers enumerated in Ark. Code Ann. §23-18-307, properly chargeable against the furnishing of electric energy. All such amounts in excess of operating costs and expenses and the cost of discharging those powers enumerated in Ark. Code Ann. §23-18-307, at the moment of receipt by the Cooperative are received with the understanding they are furnished by the patrons as capital. The Cooperative is obligated to pay by credits to a capital account for each patron, all such amounts in excess of operating costs and expenses and the cost of discharging those powers enumerated in Ark. Code Ann. §23-18-307. The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each patron. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash pursuant to a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital.
Provided, however, if costs and expenses exceed the amounts received and receivable from the furnishing of electric energy, hereinafter referred to as “loss,” then the board of directors shall have the authority under accepted accounting practices, loan covenants, and federal cooperative tax law, to prescribe the accounting procedures under which such loss may be addressed.
All other amounts received by the Cooperative from its operations in excess of costs and expenses and the cost of discharging those powers enumerated in Ark. Code Ann. §23-18-307, shall, insofar as permitted by law, (a) may be used to offset any losses incurred during the current or any prior fiscal year, and (b) to the extent not needed for that purpose, shall be allocated to its patrons on a patronage basis and any amount so allocated shall be included as part of the capital credited to the accounts of patrons, as herein provided.
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. Any time prior to dissolution or liquidation, the Cooperative may retire and pay capital credits if the board of directors determines the retirement and payment will not adversely impact the Cooperative’s financial condition and in compliance with Ark. Code Ann. §23-18-327. Consistent with this bylaw, the retirement and payment of capital credits are in the sole discretion of the board of directors and are not affected by previous retirements and payments. The manner, method, and timing of retiring and paying capital credits shall be determined by the board of directors.
The board of directors, acting under policies of general application to situations of like kind, may approve an early retirement prior to when such capital credits would generally be retired provided the financial condition of the Cooperative will not be impaired. The payment portion of such early retirement shall be on a discounted and net present value basis to reflect the time value of money due the Cooperative. Such policies shall establish the criteria used in determining the discounted and net present value of early retirements. The difference between the total amount of capital credits retired and the cash payment of such early retirement shall be considered a contribution of capital to and part of the net savings of the Cooperative.
Capital credited to the account of each patron shall be assignable only on the books of the Cooperative as per the name on such patron's membership certificate or to a member's or inactive member’s successors in interest or by written instructions from the patron to successors in occupancy in all or a part of such patron's premises served by the Cooperative unless the board of directors, acting under policies of general application, shall determine otherwise.
SECTION 3. Right of Set-off. The Cooperative shall at all times have a first lien on, and right of set-off against, such patronage capital for all indebtedness to the Cooperative, whether due or to become due, of the patron credited with such patronage capital as shown by the books and records of the Cooperative, which lien or right shall not be lost or prejudiced by reason of the fact that the certificate representing such patronage capital, if any, is not in the possession of the Cooperative.
SECTION 4. Right of Recoupment. Regardless of a statute of limitation or other time limitation, the Cooperative may recoup, offset, or set-off any amount owed to the Cooperative by the patron, including any compounded interest and late payment fee(s), by reducing the amount of patronage capital to be repaid to the patron by the amount owed to the Cooperative.
ARTICLE VII - DISPOSITION OF PROPERTY
Section 1. General. The disposition of property in the normal course of business shall be controlled by the delegated authority conferred to the board of directors in Ark. Code Ann. § 23-18-301 et seq.
Section 2. Specific Utility Plant. The board of directors may authorize the disposal of specified property needed to supply electricity to specific members if so required by Ark. Code Ann. § 14-207-101 et seq.
Section 3. Consolidation. The disposition or transfer of property through merger or consolidation with another electric cooperative shall require an undertaking of due diligence directed by the board of directors and conform to Ark. Code Ann. § 23-18-324. If, after a satisfactory evaluation, the matter is referred to the membership by the board of directors, the transaction shall be authorized upon a majority vote of the members present at an annual or special meeting and finalized when approved by the Arkansas Public Service Commission or other binding authorities. If the transaction is not recommended to the membership by the board of directors, the membership vote on the matter shall require a quorum of thirty-three (33) percent of the members at the time of the notice of the meeting.
Section 4. Acquisition. The disposition of property through sale, lease, lease-sale, exchange, or other transfer of all or a substantial portion of the Cooperative's assets to any other entity shall require an undertaking of due diligence, funded entirely by the acquiring party, as directed by the board of directors and shall conform to the terms of the January 2, 1996, First Refusal Agreement between the Cooperative and other participating electric cooperative entities and Ark. Code Ann. § 23-18-325. If, after a satisfactory evaluation, the matter is referred to the membership by the board of directors, the transaction shall be authorized upon a majority vote of the members present at an annual or special meeting and finalized when approved by the Arkansas Public Service Commission or other binding authorities. If the transaction is not recommended to the membership by the board of directors, the membership vote on the matter shall require a quorum of thirty-three (33) percent and shall remain subject to the terms of the January 2, 1996, First Refusal Agreement between the Cooperative and other participating electric cooperative entities and Ark. Code Ann. § 23-18-325.
ARTICLE VIII - SEAL
The Corporate Seal of the Cooperative shall have inscribed thereon the name of the Cooperative and the words, "Corporate Seal, Berryville, Arkansas."
ARTICLE IX - 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 evidences of indebtedness issued in the name of the Cooperative shall be signed and/or countersigned by such officer or officers, agent or agents, employee or employees and in such manner as shall from time to time be determined by resolution of the board of directors.
SECTION 3. Deposits. All funds except petty cash 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 31st day of December of the same year.
ARTICLE X - MISCELLANEOUS
SECTION 1. Governing Law. These bylaws shall be governed by, and interpreted under, the laws of the state of Arkansas.
SECTION 2. Partial Invalidity. When reasonably possible, every bylaw article, section, subsection, paragraph, sentence, clause, or provision (collectively, “bylaw provision”) must be interpreted in a manner by which the bylaw provision is valid. The invalidation of a bylaw provision by an entity possessing proper jurisdiction and authority, which invalidation does not alter the fundamental rights, duties, and relationship between the Cooperative and members, does not invalidate the remaining bylaw provisions.
SECTION 3. 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 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 any business on the grounds that the meeting has not been lawfully called or convened.
SECTION 4. Policies, Rules, and Regulations. The board of directors shall have power to make and adopt such policies, rules, and regulations, not inconsistent with law, the articles of incorporation, or these bylaws, as it may deem advisable for the management of the business and affairs of the Cooperative.
SECTION 5. 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 of the United States of America. The board of directors shall also cause to be made by a certified public accountant, a full and complete audit of the accounts, books, and financial condition of the Cooperative. Such audit shall be conducted on an annual basis and shall cover a continuous 12-month period which may not necessarily be the Cooperative’s fiscal year but shall in all aspects render an independent opinion of the Cooperative’s financial condition. A report of such audit shall be made available to members upon request.
SECTION 6. Member Communication. The Cooperative will make available to members general member-consumer information, certain plans, programs and initiatives of the Cooperative, as well as updates, if any, to these bylaws. Except as otherwise provided herein, information and updates may be delivered by:
(a) U.S. mail;
(b) through publications provided by the Cooperative;
(c) electronically through email, text, or the Cooperative’s website; or
(d) in person.
A member’s election to refuse delivery of any/all of these communication mediums does not invalidate the Cooperative’s effort to provide the entire membership complete information or entitle individual members to a reduction in their electric bill.
SECTION 7. Close Relative. The term “close relative” is defined as any individual who through blood, law, or marriage is a spouse, child, stepchild, father, stepfather, mother, stepmother, brother, stepbrother, half brother, sister, stepsister, half-sister, grandparent, grandchild, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, uncle, aunt, nephew, niece, or first cousin; or who resides in the same residence. Any individual qualified and elected, designated, or appointed to a position does not become a close relative while serving in the position because of marriage or other legal action to which the individual was not a party.
ARTICLE XI - AMENDMENTS
These bylaws may be altered, amended, or repealed by the affirmative vote of not less than two-thirds of all of the members of the board of directors at any regular or special meeting of the board of directors.
