BYLAWS

OF

LAMAR COUNTY ELECTRIC COOPERATIVE ASSOCIATION

 

ARTICLE I

MEMBERSHIP

 

SECTION 1.  Requirements for Membership. Any natural person, firm, association, corporation, or body politic or subdivision thereof may become a member of Lamar County Electric Cooperative Association (hereinafter called the “Cooperative”) by:

(a)  Making a written application for membership therein; and

(b)  Agreeing to purchase from the Cooperative electric energy as hereinafter specified; and

(c)  Agreeing to comply with and be bound by the articles of incorporation and bylaws of the Cooperative and any rules and regulations adopted by the board; and

(d)  Paying the membership fee hereinafter specified; and

(e)  Consuming, purchasing or using electric energy from the Cooperative.

No member may hold more than one membership in the Cooperative, and no membership in the Cooperative shall be transferable, except as provided in these bylaws.

SECTION 2. Membership. Membership in the Cooperative shall be evidenced by appropriate records maintained by the Cooperative.  No membership shall be issued for less than the membership fee fixed in these bylaws, nor until such membership fee has been fully paid.  No member can have more than one membership regardless of the number of service connections in his or her name.

SECTION 3. Joint Membership. The application for membership by either a husband or wife shall, unless specified otherwise by the applicant, be considered an application for joint membership and subject to their compliance with the requirements set forth in Section 1; they may be accepted for such membership.  Marriage of a member shall automatically convert such member’s membership into a joint membership of the husband and wife.  The term “member” as used in these Bylaws, shall include a husband and wife holding a joint membership and any provisions relating to the rights and liabilities of membership shall apply equally, severally and jointly to them.  Without limiting the generality of the foregoing:

(a)  The presence at a meeting of either or both shall constitute the presence of one member and a joint waiver of notice of the meeting;

(b)  The vote of either separately or both jointly shall constitute one joint vote;

(c)  A waiver of notice signed by either or both shall constitute a joint waiver;

(d)  Notice to either shall constitute notice to both;

(e)  Expulsion of either shall terminate the joint membership;

(f)  Withdrawal of either shall terminate the joint membership;

(g)  Either, but not both concurrently, shall be eligible to serve as a director of the Cooperative, but only if both meet the qualifications required therefore;

(h)  Neither will be permitted to have any additional service connections except through their one joint membership;

(i)   Upon death, divorce or failure to principally reside in the same location between joint members, such membership shall continue to be held solely by the one who continues directly to occupy or use the premises covered by such membership in the same manner and to the same effect as though such membership had never been joint; provided, that the estate of the deceased joint member or the other spouse shall not be released from any debts due the Cooperative.

SECTION 4. Membership and Service Connection Fees.  The membership fee shall be as fixed from time to time by the Board of Directors.  The membership fee (together with any required deposit, connection fee, contribution in aid of construction or any other fee required by the Cooperative) shall make the member eligible for one service connection.

SECTION 5. Purchase of Electric Energy. The Cooperative shall use its best efforts to furnish its members with adequate and dependable electric energy, although it cannot and therefore does not guarantee a continuous and uninterrupted supply thereof; and each member shall purchase from the Cooperative electric energy used on the premises specified in his application for membership or at other requested locations, and shall pay therefore  monthly at rates which shall from time to time be fixed by the board of directors; provided, however, that the board of directors may limit the amount of electric energy which the Cooperative shall be required to furnish to any one member.  It is expressly understood that amounts paid for electric energy in excess of the cost of service are furnished by members as capital and each member shall be credited with the capital so furnished as provided in these bylaws.  Each member shall pay to the Cooperative not less than such minimum amount per month regardless of the amount of electric energy consumed, as shall be fixed by the board of directors from time to time.  Each member shall also pay all amounts owed by him to the Cooperative as and when the same becomes due and payable.  Electric energy produced by the member may be interconnected with Cooperative facilities subject to appropriate regulations as shall be fixed from time to time by the Cooperative.

SECTION 6. Termination of Membership.

(a)  Any member may withdraw from membership upon compliance with such uniform terms and conditions as the board may prescribe.  The board of the Cooperative may, by the affirmative vote of not less than two-thirds of all the board members, expel any member who fails to comply with any of the provisions of the articles of incorporation, bylaws, rules or regulations adopted by the board, but only if such member shall have been given written notice by the Cooperative that such failure makes him liable to expulsion and such failure shall be continued for at least ten days after such notice was given.  Any expelled member may be reinstated by vote of the board or by vote of the members at any annual or special meeting.

(b)  A member requesting all electric service be disconnected will be considered a withdrawal of membership at the time the last disconnect is made.

(c)  Upon the withdrawal, 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 him, provided, however, that 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.

SECTION 7. 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.

ARTICLE II

MEETING OF MEMBERS

SECTION 1.  Annual Meeting. The annual meeting of the members shall be held between April 1 and August 31 of each year, at such place in the County of Lamar, or headquarters city, as shall be designated in the notice of the meeting, for the purpose of electing board members, passing upon reports for the previous fiscal year and transacting such other business as may properly come before the meeting.  It shall be the responsibility of the board to make adequate plans and preparations for the annual meeting.  Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Cooperative.

SECTION 2.  Special Meetings. Special meetings of members may be called by resolution of the Board, by the President, or by the members by a petition signed by at least ten percent (10%) of the members, and it shall thereupon be the duty of the Secretary to cause notice of such a meeting to be given as hereinafter provided, however such special meeting may not be held sooner than forty (40) days after the call for such meeting is made or a petition therefore is filed, and beginning at such hour as shall be designated by those calling or petitioning for the same.   Special meetings of the members may be held at any place within one of the counties served by the Cooperative as designated by the Board and shall be specified in the notice of the special meeting.

A special meeting of the members shall be required to consider or act upon any proposal to sell, mortgage, lease, or otherwise dispose of or encumber all or any substantial portion of the property of the Cooperative.

SECTION 3.   Notice of Members’ Meetings. Written or printed notice stating the place, day, and hour of the meeting and, in case of a special meeting or an annual meeting at which business requiring special notice is to be transacted, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) days nor more than thirty (30) 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 notices shall be deemed to be delivered when deposited in the United States mail, addressed to the member at his address as it appears on the records of the Cooperative, with postage thereon prepaid.  The failure of any member to receive notice of an annual or special meeting of the members shall not invalidate any action which may be taken by the members at any such meeting.

SECTION 4.  Quorum. For purposes of conducting any business other than the electing of directors five percent (5%) of the total membership must be present at a meeting in order to constitute a quorum.  If less than a quorum is present at any meeting, a majority of those present may adjourn the meeting without further notice provided, however, that prior to adjournment the voting for election of directors shall be conducted if a sufficient district quorum for the election of directors is present as described in Article II, Section 5.

Notwithstanding the foregoing paragraph, two-thirds of the total number of members of the Cooperative shall constitute a quorum at any meeting of the members at which any proposal to sell, mortgage, lease, or otherwise dispose of or encumber all or any substantial portion of the property of the Cooperative is to be considered, acted, or voted upon.

SECTION 5. District Quorum for Director Elections. For the purposes of electing of directors a quorum in any district is five percent (5%) of the total number of members in that respective district that are either present at a meeting of the members or members who otherwise cast a vote as prescribed in Article II, Section 6.

SECTION 6.  Voting. Each member shall be entitled to only one vote upon each matter for which the member is entitled to vote at a meeting of the members.  All questions shall be decided by vote of a majority of the members voting thereon in person, except as otherwise provided by law, the Articles of Incorporation or these Bylaws.   Voting by members other than members who are natural persons shall be allowed upon the presentation to the Cooperative, prior to, or upon registration at, each member meeting, or satisfactory evidence entitling the person presenting the same to vote.

Only members of a respective district may vote for the election of a director for that district.  Voting in district elections in which the member is entitled to vote, may be done in person or by mail ballot.  All district elections shall be decided by vote of a plurality of the members voting thereon in person and those voting by mail ballot.  In case of a tie vote, the tie shall be broken by the toss of a coin.

SECTION 7. Order of Business. The order of business at the annual meeting of the members shall be essentially as follows:

1.  Report on the existence of a quorum.

2.  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.

3.  Reading of unapproved minutes of previous meetings of the members and the taking of necessary action thereon.

4.  Presentation and consideration of reports of officers, board members and committees.

5.  Election of board members.

6.  Unfinished business.

7.  New business.

8)  Adjournment.

ARTICLE III

BOARD OF DIRECTORS

SECTION 1.   General Powers. The business and affairs of the Cooperative shall be managed by a board of nine (9) 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. Election and Tenure of Office. Beginning with the year 1951, and continuing each year thereafter, three (3) board members shall be elected for a three (3) year term. Each such board member shall be elected at an annual membership meeting as prescribed by the Board of Directors.  Beginning at the annual meeting in 2008 and continuing thereafter, each such board member shall be elected by plurality of the votes cast only in his or her respective district.  Members may not vote on the election of directors in districts in which they do not reside.   Upon election such board member shall serve until the annual meeting in his or her third year in office, subject to the provisions in these by-laws with respect to the removal of board members.  If a duly constituted quorum as described in Article II, Section 5, is not present, board terms expiring on that date will automatically be extended for an additional three (3) year term, subject to the provisions of these by-laws with respect to the removal of board members.  In the event an annual membership meeting is not held, for any reason, other than the failure to have a quorum at a meeting, the board members or board seats that were up for election at that meeting shall stand for election at the next annual meeting and the board members who are up for election at that meeting shall have their terms extended until the next annual meeting and shall remain on the board.  The terms of the other members of the board shall be extended accordingly.

SECTION 3.  Qualifications. No person shall be eligible to become a board member of the cooperative who:

a)  Has not been a member of the Cooperative for at least one year prior to nomination;

b)  Has not been a bona fide resident of the board district for which seeking election for at least one year prior to nomination;

c)  Is any way employed by or financially interested in a competing enterprise or a business selling electric energy or supplies to the cooperative;

d)  Is an employee of this cooperative or has been terminated from the cooperative less than five years;

e)  Is a close relative of an employee or an employee’s spouse (“close” being defined as wife, husband, grandparent, grandchild, parent, child, brother, sister, step-parent, step-child, step-brother, step-sister, father-in-law, mother-in-law, son-in-law, daughter -in-law, brother-in-law, and/or sister-in-law);

f)  Has been convicted, pleaded guilty or plead “no contest” to a felony; or

g)  Is an incumbent of, or candidate for, an elective public office for which a salary is paid.

No person shall be eligible to remain a board member who:

a)  Is not a member of the Cooperative;

b) Is not a bona fide resident of the district for which elected;

c)  Is any way employed by or financially interested in a competing enterprise or a business selling electric energy or supplies to the cooperative;

d)  Is an employee of this cooperative or has been terminated from the cooperative less than five years;

e)  Is a close relative of an employee or an employee’s spouse (“close” being defined as wife, husband, grandparent, grandchild, parent, child, brother, sister, step-parent, step-child, step-brother, step-sister, father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, and/or sister-in-law);

f)  Has been convicted, pleaded guilty or plead “no contest” to a felony; or

g)  Is an incumbent of, or candidate for, an elective public office for which a salary is paid.

Upon establishment of the fact that a board member is holding office in violation of any of the foregoing provisions, the board shall remove such board member.

Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the board or at any special or annual meeting of the members.

SECTION 4.  Voting Districts. The territory served or to be served by the Cooperative shall be divided into nine districts, each of which shall be represented by one director:

District 1:       Starting at the center of the intersection of FM 1499 and CR 36550 in Lamar County, due north to the Red River, thence easterly along the northern boundary of Lamar County to the western boundary of Red River County, thence easterly along the northern boundary of the Red River County to a line drawn due south to the center of the most eastern intersection of FM 410 and CR 2386, thence westerly then southerly along the center of FM 410 to the center line of US Highway 82, thence westerly along the center of US Highway 82 to FM 1502, thence northerly along the center of FM 1502 to FM 195, thence northerly along the center of FM 195 to FM 2648 thence westerly along the center of FM 2648 to US Highway 271, thence southerly along the center of US Highway 271 to FM 1499, thence westerly along the center of FM 1499 to the point of beginning.

District 2: Starting  at FM 79 and the west boundary of Lamar County,  thence  northeasterly along the northern boundary of Lamar County to a straight line drawn due south to the intersection of FM 1499 and CR 36550, thence southeasterly along the center of FM 1499 to US Highway 271, thence northerly along the center of US Highway 271 to FM 2648, thence easterly along the center of FM 2648 to FM 195, thence southwesterly along the center of FM 195 to FM 196, thence southerly along the center of FM 196 to CR 42600, thence westerly along the center of CR 42600 to Loop 286, thence westerly along Loop 286 to FM 79, thence northwesterly along the center of FM 79 to the Lamar County Line, to the point of beginning.

District 3:       Starting at the intersection of US Highway 82 and FM 410 in Detroit, Texas thence northerly along the center of FM 410 to the most eastern juncture of FM 410 and CR 2386, thence along a straight line due north to the Red River County line, thence easterly along the northern boundary of Red River County to the eastern boundary of Red River County, thence south along the eastern boundary of Red River County to FM 114, thence westerly along the center of FM 114 to US Highway 82, thence westerly along the center of US Highway 82 to the point of beginning.

District 4: Starting at the intersection of FM 909 and US Highway 82 in the City of Clarksville, thence easterly along the center of US Highway 82 to FM 114, thence easterly along the center of FM 114 to the eastern boundary of Red River County, thence south along the eastern boundary of Red River to the southern boundary of Red River County, thence westerly along the southern boundary of Red River County to FM 37, thence northerly along the center of FM 37 to FM 196, thence west and north along the center of FM 196 to FM 410, thence northerly along the center of FM 410 to US Highway 271, thence southeasterly  along the center of US Highway 271 to FM 909, thence east and north along the center of FM 909 to the point of beginning in the center of US Highway 82.

District 5: Starting at the western boundary of Lamar County and FM 79, thence southeasterly along the center of FM 79 to Loop 286, thence southerly along Loop 286 to US Highway 82, thence westerly along the center line of US Highway 82 to the western boundary of Lamar County, thence north along the western boundary of Lamar County Line to point of beginning, and all that portion of Fannin County served by Lamar Electric.

District 6: Starting at the intersection of Loop 286 and CR 42600 in Paris, thence easterly along the center of CR 42600 to FM 196, thence northerly along the center of FM 196 to FM 1502, thence east, south and west along the center of FM 1502 to US Highway 82, thence westerly along the center of US Highway 82 to Loop 286, thence northerly on Loop 286 to the point of beginning.

District 7: Starting at the intersection of Loop 286 and US Highway 82 in Paris, thence easterly along the center of US Highway 82  to FM 909 in the City of Clarksville, thence southwesterly along the center of FM 909 to US Highway 271, thence northwesterly along the center of US Highway 271 to FM 410, thence southerly along the center of FM 410 to FM 196, thence west and north along the center of FM 196 to US Highway 271, thence northwesterly along the center of US Highway 271 to Loop 286, thence northerly along Loop 286 to the point of beginning.

District 8: Starting at the western boundary of Lamar County and US Highway 82, thence easterly along the center of US Highway 82 to Loop 286, thence southerly along Loop 286 to US Highway 19/24, thence southerly along the center of US Highway 19/24 to FM 198, thence easterly along the center of FM 198 to FM 895, thence easterly along the center of FM 895 to the Delta and Lamar County line, thence easterly along the Delta County line to the common corner of Delta, Lamar and Red River counties, thence westerly along the southern border of  Delta County to FM 154, thence westerly along the center of FM 154 to FM 64 in the City of Cooper, thence west along FM 64 to FM 1532, thence west along FM 1532 to the western boundary of Delta County, thence north along the Delta County line to the western boundary of Lamar County, thence north along the Lamar County west boundary to the point of beginning.

District 9: Starting at the intersection of Texas Highway 19/24 and Loop 286 in Paris, Texas, thence easterly along Loop 286 to US Highway 271, thence southerly along the center of US Highway 271 to FM 196, thence south and east along the center of FM 196 to FM 37, thence southerly along the center of FM 37 to the Red River County line, thence westerly along the southern boundary of Red River County to the common boundary of Lamar, Red River and Delta counties, thence west along the northern boundary of Delta county to FM 895, thence westerly along the center of FM 895 to FM 198, thence westerly along the center of FM 198 to Texas Highway 19/24, thence northerly along the center of Texas Highway 19/24 to the point of beginning.

SECTION 5.   Nomination. A member that wishes to be elected to the Cooperative Board of Directors must appear in person at the main office of the Cooperative and fill out a nomination form. The nomination form must be officially received and filed at the main office of the Cooperative not less than sixty (60) nor more than ninety (90) days before the date of the annual meeting of the members at which board members are to be elected. Notification of the filing date shall be by mail, by publication in Co-op Power, or by some other method as prescribed by the Board of Directors.  The Secretary shall be responsible for mailing with the notice of the meeting, a statement of the number of board members to be elected, the district represented, and the names and addresses of the candidates that have officially filed and qualified.

SECTION 6. Removal of Board Member by Members. Any member of the Cooperative may bring charges against a Board Member by filing with the Secretary such charges in writing together with a petition signed by at least ten percent (10%) of the members in the district from which the Board Member was elected, requesting the removal of such board member by reason thereof.  The term “charges” as used herein means grossly negligent conduct, fraudulent conduct against the Cooperative, other Board Members or employees, criminal conduct under the Texas Penal Code, or, an act or omission significantly and adversely affecting the Cooperative.

Such Board Member shall be informed in writing of the charges at least ten (10) 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 removing such Board Member shall be considered and voted upon by the members of the respective district, at the next regular annual or special meeting of the members and any vacancy created by such removal may be filled by vote of the members at such meeting for the remainder of the term of such Board Member, without compliance with the foregoing provisions with respect to nominations.  For purposes of removing a Board Member, five percent (5%) of the total membership in the respective district must be present at the meeting in order to constitute a quorum.  No more than three (3) members of the Board of Directors may be removed in any twelve (12) month period.

SECTION 7. Vacancies. Subject to the provisions of these bylaws with respect to the filling of vacancies caused by the removal of board members, a vacancy occurring in the board shall be filled by the affirmative vote of a majority of the remaining board members for the unexpired portion of the term.

SECTION 8. Compensation.  Board members shall not receive any salary for their services as such, except a fixed sum 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.  If authorized by the board, board members may also be reimbursed for expenses actually and necessarily incurred in carrying out such Cooperative business or granted a reasonable per diem allowance by the board in lieu of detailed accounting for some of these expenses.

ARTICLE IV

MEETING OF BOARD MEMBERS

SECTION 1.  Regular Meetings. A regular meeting of the board shall be held monthly at such time and place within one of the counties served by the Cooperative as designated by the board. Such regular monthly meetings may be held without notice other than such resolution fixing the time and place thereof.

SECTION 2. Special Meeting. Special meetings of the board may be called by the President or by any three (3) board members, 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 board members calling the meeting shall fix the time and place for the holding of the meeting.

SECTION 3. Notice of Special Board Members’ Meeting. Notice of the time, place and purpose of any special meeting of the board shall be delivered to each board member either personally, by telephone, 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 board members calling the meeting.  If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the board member at his address as it appears on the records of the Cooperative, with postage thereon prepaid, at least five (5) days before the date set for the meeting.

SECTION 4.  Quorum. A majority of the board shall constitute a quorum, that if less than such majority of the board members is present at said meeting, a majority of the board members present may adjourn the meeting from time to time; and provided further, that the Secretary shall notify any absent board member of the time and place of such adjourned meeting.  The act of a majority of the board members present at a meeting at which a quorum is present shall be the act of the board.

ARTICLE V

OFFICERS

SECTION 1.  Number. The officers of the Cooperative shall be a President, Vice President, Secretary, Treasurer, and such other officers as may be determined by the board 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 President, Vice President, Secretary and Treasurer shall be elected annually by and from the board at the first meeting of the board held after the annual meeting of the members.  If the election of these officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient.  Each of these officers shall hold office until the first meeting of the board following the next succeeding annual meeting of the members or until his successor shall have been elected and qualified.  A vacancy in the office of President, Vice President, Secretary or Treasurer shall be filled by the board for the unexpired portion of the term.

SECTION 3. Removal of Officers and Agents by Board. Any officer or agent elected or appointed by the board may be removed by the board from the position to which elected or appointed,  whenever in its judgment the best interests of the Cooperative will be served thereby.

SECTION 4. President. The President shall:

(a)  be the principal executive officer of the Cooperative and, unless otherwise determined by the members or the board, shall preside at all meetings of the members and the board;

(b)  sign, with the Secretary, any deeds, mortgages, deeds of trust, notes, bonds, contracts or other instruments authorized by the board to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the board or by these 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 the President and such other duties as may be prescribed by the board from time to time.

SECTION 5.  Vice President. In the absence of the President, or in the event of his inability or refusal to act, the Vice President shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.  The Vice President shall also perform such other duties as from time to time may be assigned to him by the board.

SECTION 6.   Secretary. The Secretary shall:

(a)  cause to be kept the minutes of the meetings of the members and of the board in books provided for that purpose;

(b)  see that all notices are duly given in accordance with these bylaws or as required by law;

(c)  cause the safekeeping 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)  cause to be kept a register of the names and post office addresses of all members;

(e)  have general charge of the books of the Cooperative;

(f)  cause to be kept on file at all times a complete copy of the articles of incorporation and bylaws of the Cooperative (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 to any member upon request; 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 to him by the board.

SECTION 7.   Treasurer. The treasurer shall:

(a)  have charge and custody of all funds and securities of the Cooperative;

(b)  cause to be kept receipts for  moneys due and payable to the Cooperative and deposit all such moneys 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)  in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the board.

SECTION 8.   General Manager; Chief Executive Officer. The board may appoint a general manager who may be, but who shall not be required to be, a member of the Cooperative.  The general manager shall perform such duties and shall exercise such authority as the board may from time to time vest in him.  The board may also appoint the General Manager as Chief Executive Officer of the Cooperative.

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 be bonded in such sum and with such surety as the board shall determine.  The board in its discretion may also require any other officer, agent or employee of the Cooperative to be bonded in such amount and with such surety as it shall determine.

SECTION 10.   Reports. The officers of the Cooperative shall submit, or cause to be submitted, 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. The Cooperative’s operations, including any subsidiary 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 that 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 in excess of operating costs and expenses properly chargeable against the operations of the Cooperative including any subsidiaries.  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 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.  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 in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital.

All other amounts received by the Cooperative from its operations in excess of costs and expenses shall, in so far as permitted by law, be (a) used to offset any losses incurred during the current or any prior fiscal year and (b) to the extent not needed for that purpose, allocated to its patrons on a patronage basis and any amount so allocated shall be included as part of the capital credited to the 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.  If at any time prior to dissolution or liquidation, the board shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital then credited to patrons’ accounts may be retired in full or in part.

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

Notwithstanding any other provision of these bylaws, the board, at its discretion, shall have the power at any time upon the death of any patron, who was a natural person, if the legal representatives of his estate shall request in writing that the capital credited to any such patron be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such patron immediately upon such terms and conditions as the board, acting under policies of general application, and the legal representatives of such patron’s estate shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.

All persons to whom capital credits have been allocated shall keep the Cooperative informed of their current mailing addresses in order that the Cooperative may more readily retire or refund capital credits, membership fees, deposits and any other amounts to such persons in accordance with the bylaws.

The patrons of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the articles of incorporation and bylaws shall constitute and be a contract between the Cooperative and each patron, and both the Cooperative and the patrons are bound by such contract, as fully as though each patron had individually signed a separate instrument containing such terms and provisions.  The provisions of this article of the bylaws shall be called to the attention of each patron of the Cooperative by posting in a conspicuous place in the Cooperative’s office.

ARTICLE VII

DISPOSITION OF PROPERTY

The board may upon the vote of a majority of the members of the Cooperative, at a meeting for such purpose at which there is a quorum, agree to sell, lease, merge, combine or otherwise dispose of all or a substantial portion of the property of the Cooperative to another Cooperative or foreign Corporation doing business in the State pursuant to the Act under which the Cooperative is incorporated or to any other entity, if the sale, lease, merger, combination or other disposition of all or a substantial portion of the Cooperative’s property has been recommended by a majority vote of the board; provided however, that notwithstanding anything herein contained, the board of the Cooperative, without authorization by the members thereof, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust upon, or the pledging or encumbering, of any or all property of the Cooperative, whether now owned or hereafter acquired, and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the board shall determine, to secure any indebtedness of the Cooperative to the United States of America or any agency or instrumentality thereof or any other lending agency, public, private, or individual.

ARTICLE VIII

SEAL

The corporate seal of the Cooperative shall have inscribed thereon the name of the Cooperative and the words “Corporate Seal of Texas.”

ARTICLE IX

FINANCIAL TRANSACTIONS

SECTION 1.  Contracts. Except as otherwise provided in these bylaws, the board may authorize any officer or officers, agent or agents to enter into any contract or execute and deliver any instrument in the name and on behalf of the Cooperative, and such authority may be general or confined to specific instances.

SECTION 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 of the Cooperative and in such manner as shall from time to time be determined by resolution of the board.

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 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 of the same year.

ARTICLE X

MISCELLANEOUS

SECTION 1.  Membership in Other Organizations. The Cooperative shall not become a member of nor purchase stock in any other organization without an affirmative vote  of the members at a duly held meeting, the notice of which shall specify that action is to be taken upon such proposed membership or stock purchase, provided, however, that the Cooperative may upon the authorization of the board, 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 a building and loan association for the purpose of investing reserve funds or operating funds on a reserve basis, or of any other corporation for the purpose of acquiring electric facilities.

SECTION 2.  Waiver of Notice. Any member or board member may waive in writing any notice of a meeting required to be given by these bylaws.  The attendance of a member or a board member at any meeting shall constitute a waiver of notice of such meeting by such member or board member, except in case a member or board member shall attend a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

SECTION 3.  Policies, Rules, and Regulations. The board 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 4.  Accounting System and Reports. The board shall cause to be established and maintained a complete accounting system which, among other things, and subject to applicable laws and rules and regulations of any regulatory body, shall conform to standard accounting practices.  The board shall also after the close of each fiscal year cause to be made by a certified public accountant a full and complete audit of the accounts, books, and financial condition of the Cooperative as of the end of such fiscal year.  A report of such audit may be submitted to the members at the next following annual meeting.

SECTION 5.  Area Coverage. The board shall make diligent effort to see that electric service is extended to all persons not served 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

ARTICLE XI

AMENDMENTS

These bylaws may be altered, amended or repealed by a two-thirds majority of the board at any regular or special meeting, provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment, or repeal and provided that the alteration is not inconsistent with the provisions of the Articles of Incorporation or Law.

ARTICLE XII

RULES OF ORDER

The procedures for all meetings of the members, of the Board of Directors, and of any committee shall be determined by the Board of Directors.

 

Amended:   June 23, 2022

Attested to: Michael R. Williams, Secretary