Article IV
BOARD MEMBERS
SECTION 1. GENERAL POWERS. The Business and affairs of the Cooperative shall be managed by a Board of nine members which shall exercise the power 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. The affairs of the consolidated Cooperative shall be managed by a Board of Directors, elected from the service area of the Cooperative.
The service areas of the consolidated Cooperative shall be divided into two (2) geographic districts. One district will consist of what was formerly Beadle Electric Cooperative, Inc. and the second district will consist of what was formerly Ree Electric Cooperative, Inc. A map and description of the geographic districts shall be maintained by the Cooperative and shall be provided to the members upon request.
The affairs of the Cooperative shall be managed by a Board consisting of nine (9) Directors, four (4) from each of the two geographic districts, and a ninth Director to be elected, at large, from either of said districts.
At the annual meeting of the members to be held in 2000, and at annual meetings thereafter an election shall be held at the annual membership meeting of the Cooperative, to elect Board members, for three (3) year terms, for the vacancies created, during each ensuing year. Board Members elected at a membership meeting shall take office immediately following such election or re-election.
Vacancies on the Board of Directors which occur after the annual meeting of members in 1999 shall be filled by a majority vote of the remaining Directors. The Director so elected shall serve the remainder of the term of the Director creating the vacancy. Said vacancy shall be filled by selecting a patron from the same district in which the vacancy occurred.
SECTION 3. QUALIFICATIONS. Any Director or Director candidate must comply with this Bylaw.
A. General Director Qualifications: A Director or Director candidate must:
1. Be a natural person; and
2. Have the capacity to enter legally binding contracts;
B. Membership Director Qualifications-Individual. While a Director, and during the one (1) year immediately prior to becoming a Director, a Director or Director candidate must:
1. Not be an employee of the cooperative;
2. Be a Member in good standing permanently residing in the Director District from which the Director is elected or chosen; and
3. Use, receive, or purchase electric service from the Cooperative at the Director’s primary residence;
C. Eligibility of Former Employee for Board Membership and Former Board Member for Employment. No employee or former employee shall be eligible for election to the Board of Directors until five years has passed since the termination of his or her employment. No Director or former Director shall be eligible for employment by the Cooperative until five years has passed since the expiration of his or her service as a Director.
D. Member Director Qualifications-Corporate Designee. A corporate or other non-natural member may designate no more than one representative to be a candidate for election, provided:
1. The entity is a Member in good standing;
2. The entity maintains its principal place of business within the Cooperative service area;
3. The entity continuously and materially uses, receives, or purchases electric services from the Cooperative; and
4. The designee is a permanent, year-round resident in the district to be served.
5. No more than two (2) Directors may be designees of non-natural Members.
E. Conflict of Interest Director Qualifications. While a Director, and during the one (1) year immediately prior to becoming a Director, a Director or Director candidate must not be, nor have been:
1. A Close Relative of any existing Director, other than an existing Director who will cease being a Director within one (1) year;
2. An existing, or a Close Relative of an existing, employee of the Cooperative;
3. Employed by, materially affiliated with, or share a material financial interest with any other Director; or
4. Engaged in, nor employed by, materially affiliated with, or have a material financial interest in, any individual or entity:
a. Directly and substantially competing with the Cooperative; or
b. Selling goods or services in substantial quantity to the Cooperative, or to a substantial number of Members or
c. Possessing a substantial conflict of interest with the Cooperative.
(collectively, “Conflict of Interest Director Qualifications”)
F. Continuing Director Qualifications. Only natural persons complying with the General Director Qualifications, Membership Director Qualifications, and Conflict of Interest Director Qualifications (collectively, “Director qualifications”) may serve, or continue to serve, as a Director. After being elected or appointed a Director, if any Director fails to comply with any Director Qualification, as reasonably determined by the Board, then the Board is authorized to, and shall, remove the Director. If at least a majority of Directors authorized by these Bylaws comply with the Director Qualifications and approve a Board action, then the failure of any Director to comply with all Director Qualifications does not affect the Board Action.
SECTION 4. NOMINATIONS.
All nominations for the office of Director of the Board of Directors shall be made by petition signed by 15 or more members of the Cooperative acting together to nominate a Cooperative member as Director. Such petition must be received at Cooperative headquarters at least five (5) days before the members meeting. The petition shall set forth the name of the nominated candidate. In the event only one candidate is nominated for an available position, the chairman protem shall solicit a motion from the floor that a unanimous vote be cast by the membership for such candidate. Upon being duly seconded and an approving voice vote, such sole candidate shall be declared duly elected.
A petition filed on behalf of a non-incumbent candidate shall designate the incumbent candidate against whom the petitioner is a candidate for office.
SECTION 5. DIRECTOR RESIGNATION. A director may resign at any time by delivering written notice of resignation to the Board, President, or Secretary. Unless the written notice of resignation specifies a later effective date, a Director’s resignation is effective upon the Board, President, or Secretary receiving the written notice of resignation. If a Director’s resignation is effective at a later date, and if the successor Director does not take office until the effective date of the Director’s resignation, then the pending Director vacancy may be filled before the effective date of the Director’s resignation.
SECTION 6. DIRECTOR REMOVAL. Regarding any Director:
A. Director Removal Petition. As provided in this Bylaw, Members may request the removal of one or more Directors for committing any grossly negligent, fraudulent, or criminal act or omission significantly and adversely affecting the Cooperative. For each director for whom removal is requested, Members shall deliver to the President or Secretary a dated written petition (“Director Removal Petition”):
1. Identifying the Director;
2. Explaining the basis for requesting the Director’s removal and identifying the grossly negligent, fraudulent, or criminal act or omission underlying the removal request; and
3. As Members existed on the Director Removal Petition date, containing the printed names, printed addresses, and original and dated signatures obtained within sixty (60) days of the Director Removal Petition date, of at least ten percent (10%) of the members entitled to elect the Director.
With thirty (30) days following the President or Secretary receiving a Director Removal Petition:
1. The Cooperative shall forward a copy of the Director Removal Petition to the implicated Director; and
2. The Board shall meet to review the Director Removal Petition.
B. Member Meeting. If the board determines that the Director Removal Petition complies with this Bylaw, then the Cooperative shall post a notice of and hold a Member Meeting within sixty (60) days following the Board’s determination. Notice of the Member Meeting must state that:
1. The purpose of the Member Meeting is to consider removing a Director;
2. Evidence may be presented, and a Member vote taken, regarding removing the Director; and
3. Members may elect a successor Director.
If a Member Quorum is present at the Member Meeting, then for the Director named in each Director Removal Petition:
1. If a majority of Members present and voting and entitled to vote for the Director vote to remove the Director, then the Director is removed effective to the time and date of the Member vote. At the Member Meeting, the Members entitled to vote for the Director may elect a new Director to succeed the removed Director without complying with the Director Nomination or notice provisions of these Bylaws. Any successor Director elected by the Members must comply with the Director Qualifications.
Neither a Director Removal Petition or Director removal affects any Board action. Members may not vote to remove a Director by Member Mail Ballot. No Director may be removed for lawfully opposing or resisting any Transfer of Cooperative Assets, or any Cooperative dissolution.
SECTION 7. VACANCIES. Subject to the provisions of these Bylaws with respect to the filling of vacancies caused by the removal of Directors by the Members, a vacancy occurring in the Board of Directors shall be filled by the affirmative vote of a majority of the remaining Directors for the unexpired portion of the term. The Member elected as a Director to fill the vacancy must reside in the same district as the Director to whose office he succeeds and comply with all qualifications required of Directors.
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. The compensation of Board Members shall be determined by resolution of the Board, and when so determined shall be continuing until altered or amended in like manner. The Board resolution on compensation change shall accompany meeting notice. No Board Member shall receive compensation for serving the Cooperative in any other capacity, nor shall any close relative of a Board Member receive compensation for serving the Cooperative, unless the payment and amount of compensation shall be specifically authorized by the Board of Directors.
SECTION 9. DIRECTOR CONDUCT.
A. Director Standard of Conduct. A Director shall discharge the Director’s duties, including duties as a Board Committee member:
1. In good faith;
2. With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and
3. In a manner the Director reasonably believes to be in the Cooperative’s best interest.
B. Director Reliance on Others. Unless a Director possesses knowledge concerning a matter making reliance unwarranted, then in discharging a Director’s duties, including duties as a Board Committee Member, a Director may rely upon information, opinion, reports, or statements, including financial statements and other financial data, prepared or presented by:
1. One (1) or more Cooperative Officers or employees whom the Director reasonably believes to be reliable and competent in the matters prepared or presented; or
2. Legal counsel, public accountants, or other individuals regarding matters the Director reasonably believes are within the individual’s professional or expert competence.
C. Director Liability. If a Director complies with this Bylaw, the Director is not liable to the Cooperative, any Member, or any other individual or entity for action taken, or not taken, as a Director. No Director is deemed a trustee regarding the Cooperative or any property held or administered by the Cooperative, including without limit, property potentially subject to restrictions imposed by the property’s donor or transferor.
SECTION 10. CLOSE RELATIVE. As used in these Bylaws, the term “Close Relative” means an individual who:
1. Is, either by blood, law, or marriage, including half, step, foster, and adoptive relations, a spouse, child, grandchild, parent, grandparent, or sibling; or
2. Principally resides in the same residence.
(“Close Relative”). Any individual properly qualified and elected or appointed to any position does not become a Close Relative while serving in the position because of any marriage or legal action to which the individual was not a party.
