Section 4.01. Number and General Powers. The business and affairs of the Cooperative shall be managed by a Board of 7 Directors. The Board shall exercise all of the powers of the Cooperative except such as are by law or by the Cooperative's Articles of Incorporation or Bylaws conferred upon or reserved to the members.
Section 4.02. Qualifications. No person shall be eligible to become or remain a director of the Cooperative who is a close relative (as hereinafter defined in Section 4.14) of an employee of the Cooperative. Furthermore, no person shall serve as a director who is a close relative of an incumbent director if such service would cause both to be members of the Board at the same time. No person shall be eligible to become a director of the Cooperative if said person is or was an employee of the Cooperative within 3 years prior to the date of the directorate election. No person shall serve as a director who has been convicted of a serious felony crime of moral turpitude as defined in Section 4.08 below; and no person shall serve as a director who is not a member in good standing of the Cooperative and receiving service there from at his primary residential abode.
No member shall be eligible to become or remain a director or to hold any position of trust in the Cooperative, who has not been a bona fide member for one year prior thereto, and must have been a bona fide resident of the district in which he runs for 6 months prior to his election, and must remain a resident of that district during his term.
No person shall be eligible to become or remain a director of, or to hold any other position of trust in, the Cooperative who is not at least 18 years of age or is in any way employed by or financially interested in an enterprise which is in competition with the Cooperative or with its subsidiary, or selling supplies or services in significant amounts to the Cooperative or its subsidiary unless such supplies or services cannot reasonably be secured elsewhere. In such circumstances, full disclosure shall be made to the board and membership prior to election or re-election to the board.
No person shall be eligible to become or remain a director if that person has a conflict of interest with the Cooperative. A lawsuit which seeks monetary damages against the cooperative is a conflict of interest.
When a membership is held jointly by a husband and wife either one, but not both, may be elected a director, provided, however, that neither one shall be eligible to become or remain a director or to hold a position of trust in the Cooperative unless both shall meet the qualifications hereinabove in this section set forth.
Upon establishment of the fact that a nominee for director lacks eligibility under this Section or as may be provided elsewhere in these Bylaws, it shall be the duty of the chairman presiding at the meeting at which such nominee would otherwise be voted upon to disqualify such nominee.
Upon the establishment of the fact that any person being considered for, or already holding, a directorship or other position of trust in the Cooperative lacks eligibility under this Section, it shall be the duty of the Board of Directors to withhold such position from such person, or to cause him to be removed therefrom, as the case may be. Nothing contained in this Section shall, or shall be construed to, affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors, unless such action is taken with respect to a matter which is affected by the provisions of this Section and in which one or more of the directors have an interest adverse to that of the Cooperative.
Section 4.03. Election. At each annual meeting of the members, directors shall be elected by secret ballot by the members. Directors shall be elected by a plurality of the votes cast in accordance with Section 3.05.
Section 4.04. Tenure. Directors shall be so nominated and elected that one director from or with respect to each of Directorate Districts Nos. 1 and 2 shall be elected for 3-year terms at an annual member meeting; one director from or with respect to each of Directorate Districts Nos. 4 and 5 shall be elected for 3-year terms at the next succeeding annual member meeting; and one director from or with respect to each of Directorate Districts, Nos. 3, 6, and 7 shall be elected for 3-year terms at the next succeeding annual member meeting, and so forth.
Upon their election, directors shall, subject to the provisions of these Bylaws with respect to the removal of directors, serve until the annual meeting of the members of the year in which their terms expire or until their successors shall have been elected and shall have qualified.
If for any reason an election of directors shall not be held at an annual meeting of the members duly fixed and called pursuant to these Bylaws, such election may be held at an adjournment of such meeting or at a subsequently held special or the next annual meeting of the members.
Failure of an election for a given year shall allow the incumbents whose directorships would have been voted on to hold over only until the next member meeting at which a quorum is present.
Section 4.05. Seven Directorate Districts. The territory served by the Cooperative shall be divided into 7 Directorate Districts. Each District shall be represented by 1 director, and the Districts are described as follows:
| Directorate District No. | Description | Number of Directors |
|---|---|---|
| 1 | Vienna, Lexington, and Johnson Townships in Scott County; Saluda Township in Jefferson County; and Washington, Bethlehem and Owen Townships in Clark County | 1 |
| 2 | Oregon and Charlestown Townships in Clark County | 1 |
| 3 | Monroe and Wood Townships in Clark County and Polk Township in Washington County | 1 |
| 4 | Carr and Union Townships in Clark County | 1 |
| 5 | Lafayette and New Albany Townships in Floyd County | 1 |
| 6 | Silver Creek Township in Clark County | 1 |
| 7 | Utica and Jeffersonville Townships in Clark County | 1 |
All eligible voting members, regardless of residence or location within the territory, may vote for his/her candidate of choice for director in all Districts as such Director elections occur; however, a candidate for director must meet the residency requirements and live in the Directorate District for which he/she seeks office.
Every year the Board of Directors, not less than 90 days prior to the earliest date on which the annual member meeting may be held, shall review the Districts and, if determining that they should be altered so as to correct any substantially inequitable factors regarding the residence of members, the proportionate membership population sizes of the Districts, or the geographic location of Districts, and/or the number of directors to be elected from or with respect to such Districts, shall change and re-describe one or more Districts and/or the number of directors to be elected from or with respect to such Districts accordingly, in which event all Districts as so changed shall be noticed in writing to the members prior to the start of the director candidate petitioning process.
After such notice, these Bylaws shall have been effectively amended accordingly: PROVIDED that no such change shall be so effectuated by the Board as to compel the vacancy of any director's office prior to the time such director's term would normally expire unless such director consents thereto in writing.
Section 4.06. Nominations. A member may be nominated to be a candidate to run for election for a director position that is scheduled for election at the annual membership meeting by a written petition signed by a minimum of 15 members. All such petitions must be delivered in person inside the Cooperative headquarters and date and time stamped during regular business hours at least 90 calendar days before the annual meeting. In the event that the ninetieth day falls on a weekend, an REMC-observed holiday or other day when the headquarters is closed for any reason, the deadline for submitting petitions shall end when the office closes on the next regular business day. The signed petition must include all of the following:
- A listing on each page of the petition of the name of the member who is being nominated;
- A listing on each page of the petition of the district number of the district from which the nominee will run;
- The legible printed names, addresses, and telephone numbers of each member signing the petition;
- The original signatures in ink of each member signing the petition, each such signature to be made in the same location of the petition where the printed name, address, and telephone number of that person is located.Only members may sign a petition to nominate.The signature of either or both persons who hold a joint membership shall count as one signature on a petition to nominate.
Only one authorized signature per member firm, association, corporation, business trust, partnership, federal agency, state or political subdivision or agency thereof, or body politic (collectively "Organization Member") may be counted on a petition to nominate. The petition to nominate must be accompanied by written proof that the person who signs on behalf of the Organization Member is authorized to sign on behalf of the Organization Member.
After verifying that a petition to nominate complies with this Bylaw, the Cooperative shall post and display at the principal office of the Cooperative at least 30 days prior to the meeting a list of nominations for directors to be elected, listing separately the nominee(s) for each Directorate District.
In the event that no nominations are made for a Director District for a director position that is scheduled for election at the upcoming annual membership meeting, the open seat shall be treated as a vacancy under Section 4.09 of these Bylaws.
Section 4.07. Voting for Directors; Validity of Board Action. In the election of directors, each member shall be entitled to cast the number of votes (but not cumulatively) which corresponds to the total number of directors to be elected, but no member may vote for more nominees than the number of directors that are to be elected from or with respect to any particular Directorate District.
Ballots marked in violation of the foregoing restriction with respect to one or more Directorate Districts shall be invalid and shall not be counted with respect to such District or Districts.
Notwithstanding the provisions contained in this Section, failure to comply with any of such provisions shall not affect in any manner whatsoever the validity of any action taken by the Board of Directors after the election of directors.
Section 4.08. Removal of Directors.
A. Removal By Members. Any member may bring one or more charges for cause against any one or more directors and may request the removal of such director(s) by reason thereof by filing with the Secretary such charge(s) in writing together with a petition signed by not less than 5% of the total membership of the Cooperative, which petition calls for a special member meeting, the stated purpose of which shall be to hear and act on such charges and, if one or more directors are recalled, to elect their successor(s) and specifies the place, time and date thereof not less than 40 days after filing of such petition, or which requests that the matter be acted upon at the subsequent annual member meeting if such meeting will be held no sooner than 40 days after the filing of such petition.
Each page of the petition shall, in the forepart thereof, state the name(s) and address(es) of the member(s) filing such charge(s), a verbatim statement of such charge(s) and the name(s) of the director(s) against whom such charge(s) is(are) being made.
The petition shall be signed by each member in the same name as he is billed by the Cooperative and shall state the signatory's address as the same appears on such billings.
Notice of such charge(s) verbatim, of the director(s) against whom the charge(s) have been made, of the member(s) filing the charge(s) and the purpose of the meeting shall be contained in the notice of the meeting, or separately noticed to the members not less than 10 days prior to the member meeting at which the matter will be acted upon: PROVIDED, that the notice shall set forth only 20 of the names (in alphabetical order) of the members filing one or more charges if 20 or more members file the same charge(s) against the same director(s).
Such director(s) shall be informed in writing of the charges after they have been validly filed and at least 20 days prior to the meeting of the members at which the charge(s) are to be considered, and shall have an opportunity at the meeting to be heard in person, by witnesses, by counsel or any combination of such, and to present evidence in respect of the charge(s); and the person(s) bringing the charge(s) shall have the same opportunity, but must be heard first.
The question of the removal of director(s) shall, separately for each if more than one has been charged, be considered and voted upon at such meeting, and any vacancy created by such removal shall be filled by vote of the members at such meeting without compliance with the foregoing provisions with respect to nominations, except that nominations shall be made from the floor: PROVIDED, that the question of the removal of a director shall not be voted upon at all unless some evidence in support of the charge(s) against him shall have been presented during the meeting through oral statements, documents or otherwise. Provided further that the exercise of judgment shall not be grounds for removal.
A newly elected director shall be from or with respect to the same Directorate District as was the director whose office he succeeds shall meet all other qualifications for a director and shall serve the unexpired portion of the removed director's term.
B. Removal By Board of Directors. Cause for Removal of Director by the Board. A Director may only be removed by the Board for Cause which shall be determined pursuant to the Procedure for Removal by Board. Cause for Removal means any of the following:
- Commission by a Director of a felony crime of moral turpitude. "Crime of moral turpitude" as used in this section shall be defined as sex crimes, crimes of dishonesty and other crimes which are contrary to justice, honesty, modesty, and/or good morals. The Board of Directors, after having followed the procedure for removal set forth below, by a vote of three-fourths of the Directors may terminate or remove a director when there is compelling evidence that the said director has committed an act that would constitute a felony crime of moral turpitude regardless of whether the director has been convicted of same.
- Three absences from regularly scheduled Board Meetings in twelve consecutive months when such absences are not related to Cooperative business.
- A Director's improper use of Cooperative funds.
- Failure to serve in accordance with, or overt violation of, any material term, condition, or provision of the Cooperative's Articles of Incorporation, Bylaws, Code of Conduct, Regulations, Governance policies or other policies.
Procedure for Removal by Board. Any Director may request the removal of another Director for Cause by delivering to each member of the Board of Directors a notice, signed by at least two members of the Board, setting forth the grounds for cause for removal against such Director. The Director against whom the charges are brought shall be informed in writing of the charges at least ten days prior to the meeting of the Board. This meeting shall be presided over by the Board President unless he/she is the charged party in which case the presiding officer shall be the Vice President and on down the order of officers and chain of command as the case may be. At such Board meeting and in the presence of the Director charged, the person or persons bringing the charges shall present evidence in support of removal. The Director charged shall be heard in person and/or by counsel and shall have an opportunity to present evidence in support of his/her defense to the charges and against removal. The Board member may be removed only if by a 3/4 majority of the entire Board, less the member charged, the Board finds by clear and convincing evidence: (1) that Cause was established; and, (2) that the Cause established had, has or could have a material adverse effect on the business and affairs of the Cooperative.
Section 4.09. 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 Board of Directors.
A director thus elected shall serve out the unexpired term of the director whose office was originally vacated and until a successor is elected and qualified: PROVIDED, that such a director shall be from or with respect to the same Directorate District as was the director whose office was vacated.
SECTION 4.10. Compensation; Expenses. Directors shall, as determined by a resolution of the Board of Directors, receive on a per diem basis a fixed fee, which may include insurance benefits, (a) for attending meeting of the Board of Directors and (b) for the performance of other director duties when such has had prior approval of the Board of Directors. The fee fixed for (a) foregoing need not be the fee or fees fixed for (b) foregoing.
Directors shall also receive advancement or reimbursement of and travel out-ofpocket expenses actually, necessarily and reasonably incurred in attending such meetings and performing such duties.
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 such compensation shall be specifically authorized by a vote of the members or such payment and amount shall be specifically authorized by the Board of Directors upon their certification of such as an emergency measure.
Section 4.11. Rules, Regulations, Rate Schedules and Contracts. The Board of Directors shall have power to make, adopt, amend, abolish and promulgate such rules, regulations, rate schedules, contracts, security deposits and any other types of deposits, payments or charges, including contributions in aid of construction, not inconsistent with law or the Cooperative's Articles of Incorporation or Bylaws, as it may deem advisable for the management, administration and regulation of the business and affairs of the Cooperative.
Section 4.12. Accounting System and Reports. The Board of Directors shall cause to be established and maintained a complete accounting system of the Cooperative's financial operations and condition, and shall, after the close of each calendar year, cause to be made a full, complete and independent audit of the Cooperative's accounts, books and records reflecting financial operations during, and financial condition as of the end of, such year. The Board may authorize special audits, complete or partial, at any time and for any specified period of time.
Section 4.13. Subscription to Cooperative's Newsletter; Subscription to Statewide Publication. For the purpose of disseminating information devoted to the economical, effective and conservative use of electric energy, the Board of Directors may, on behalf of and for circulation to the members periodically, to subscribe to the Cooperative's newsletter, "Connections," or its successor. The Board of Directors may, on behalf of and for circulation to the members periodically, to subscribe to the statewide publication, "Electric Consumer," or its successor.
Section 4.14. "Close Relative" Defined. As used in these bylaws, "close relative" means an 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, aunt, uncle, niece, nephew, first cousin, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, aunt by marriage, uncle by marriage, niece by marriage, nephew by marriage or first cousin-in-law; or resides in the same residence (collectively, "close relative").
An individual qualified and elected, designated, or appointed to a position does not become a close relative while serving in the position because of a marriage or legal action to which the individual was not a party.