Bylaws

Article I. Membership

• Section 1.01. Eligibility.
• Section 1.02. Application and Acceptance for Membership; Renewal of Prior Application.
• Section 1.03. Application Fee; Service Security and Facilities Extension Deposits; Contribution in Aid of Construction.
• Section 1.04. Joint Membership.
• Section 1.05. Purchase of Electric Power and Energy, Power Production by Member; Application of Payments to All Accounts.
• Section 1.06. Excess Payments to be Credited as Member-Furnished Capital.
• Section 1.07. Wiring of Premises; Responsibility Therefor; Responsibility for Meter Tampering or Bypassing and for Damage to Cooperative Properties; Extent of Cooperative Responsibility; Indemnification.
• Section 1.08. Member to Grant Easements to Cooperative and to Participate in Required Cooperative Load Management Programs.
• Section 1.09. Nondiscrimination

Article II. Membership Suspension and Termination

• Section 2.01. Suspension; Reinstatement.
• Section 2.02. Termination by Expulsion; Renewed Membership.
• Section 2.03. Termination by Withdrawal or Resignation.
• Section 2.04. Termination by Death or Cessation of Existence; Continuation of Membership in Remaining or New Partners.
• Section 2.05. Effect of Termination.
• Section 2.06. Effect of Death or Divorce upon a Joint Membership.
• Section 2.07. Acceptance of Members Retroactively.

Article III. Meetings of Members

• Section 3.01. Annual Meeting.
• Section 3.02. Special Meetings.
• Section 3.03. Notice of Member Meetings.
• Section 3.04. Quorum.
• Section 3.05. Voting.
• Section 3.06. Credentials and Election Committee.
• Section 3.07. Order of Business.

Article IV. Directors

• Section 4.0l. Number and General Powers.
• Section 4.02. Qualifications.
• Section 4.03. Election.
• Section 4.04. Tenure.
• Section 4.05. Seven Directorate Districts.
• Section 4.06. Nominations.
• Section 4.07. Voting for Directors; Validity of Board Action.
• Section 4.08. Removal of Directors.
  • A. Removal By Members.
  • B. Removal By Board of Directors
• Section 4.09. Vacancies.
• Section 4.10. Compensation; Expenses.

Article V. Meetings of Directors

• Section 5.01. Regular Meetings.
• Section 5.02. Special Meetings except other than Article XI.
• Section 5.03. Notice of Directors Meetings.
• Section 5.04. Quorum.

Article VI. Officers; Miscellaneous

• Section 6.01. Number and Title.
• Section 6.02. Election and Term of Office.
• Section 6.03. Removal.
• Section 6.04. Vacancies.
• Section 6.05. President.
• Section 6.06. Vice President.
• Section 6.07. Secretary.
• Section 6.08. Treasurer.
• Section 6.09. Delegation of Secretary's and Treasurer's Responsibilities.
• Section 6.10. Chief Executive Officer
• Section 6.11. Bonds.
• Section 6.12. Compensation; Indemnification.
• Section 6.13. Reports.

Article VII. Contracts, Checks, and Deposits

• Section 7.01. Contracts.
• Section 7.02. Checks, Drafts, etc.
• Section 7.03. Deposits; Investments.

Article VIII. Cooperative Operation

• Section 8.01. Nonprofit and cooperative operation.
• Section 8.02. Allocation of Capital Credits.
• Section 8.03. Notification and Assignment of Capital Credits.
• Section 8.04. Retirement of Capital Credits
• Section 8.05. Retirement of Discounted Capital Credits to Decedent’s estates.
• Section 8.06. No Special Retirement of Capital Credits for Entities.

Article IX. Unclaimed Funds of Members

Article X. Waiver of Notice

Article XI. Disposition and Pledging of Property; Distribution of Surplus Assets on Dissolution

• Section 11.01. Disposition and Pledging of Property.
• Section 11.02. Distribution of Surplus Assets on Dissolution.

Article XII. Authority to Issue Obligations

Article XIII. Calendar Year

Article XIV. Rules of Order

Article XV. Seal

Article XVI. Amendments

These Bylaws may be altered, amended or repealed by resolution of the Board of Directors at any regular or special Board meeting, but only if the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal, or an accurate summary explanation thereof.

The Corporate seal of the Cooperative shall be in the form of a circle and shall have inscribed thereon the name of the Cooperative and the words "Corporate Seal, Indiana."

Parliamentary procedure at all meetings of the members, of the Board of Directors, of any committee provided for in these Bylaws and of any other committee of the members or Board of Directors which may from time to time be duly established shall be governed by the most recent edition of Robert's Rules of Order, except to the extent such procedure is otherwise determined by law or by the Cooperative's Articles of Incorporation or Bylaws.

The Cooperative's calendar year shall begin on the first day of January each year and end on the last day of December.

Subject to the approval of the Indiana Utility Regulatory Commission, the Corporation formed hereunder, shall have power and is hereby authorized, from time to time, to issue its obligations in anticipation of its revenues for any corporate purpose. Said obligations may be authorized by resolution or resolutions of the board and may bear such date or dates, mature at such time or times, not exceeding 40 years from their respective dates, bear interest payable semi-annually at such rate or rates, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, not exceeding par and accrued interest, as such resolution or resolutions may provide.

Such obligations may be sold in such manner and upon such terms as the Board of Directors may determine, at not less than par and accrued interest. Any provision of law to the contrary notwithstanding, any obligations in the interest coupon appertaining thereto, if any, issued pursuant to this chapter, shall possess all of the qualities of negotiable instruments. However, approval of the Indiana Utility Regulatory Commission is not required when the Corporation has a mortgage with any federal agency.

Section 11.01. Disposition and Pledging of Property. The Cooperative may not sell, lease, exchange, mortgage, pledge, or otherwise dispose of all or substantially all of the property of the Cooperative unless the following conditions and/or requirements have been met:

1. A tendered offer must be made first to the Board of Directors.
2. 2/3 of all directors must affirmatively authorize the submission of a tendered offer to the membership.
3. The tendered offer must be for the entire system. Any tendered offer for the transfer of assets may NOT be considered for a portion of the system.
4. No transfer of all or substantially all the assets may be considered, which is nothing more than an assignment of large segments of the assigned service area, unless the sale or the assignment of all the territory and the sale of all the assets proposed.
5. Notwithstanding any article, bylaw, policy resolution or practice that has ever been utilized by this corporation to the contrary, neither proxy votes, telephone conferencing, write-in votes, nor absentee ballots may be utilized to establish a quorum for either the Board of Directors or the membership, nor for consideration or for counting in any voting of the Board of Directors, or the membership in any consideration of the transfer of all or substantially all of its property.
6. No offer for the purchase of all or substantially all the assets the corporation may be considered if it does not include an assumption of all contractual obligations of the corporation, specifically including, but not limited to, the then existing total power requirements contract the corporation has with Hoosier Energy Rural Electric Cooperative, Inc. and all terms and conditions contained therein.
7. No offer for the purchase of all or substantially all the assets of the corporation may be considered unless there have been 3 separate written appraisals from 3 independent, non-affiliated appraisers, expert in such matters, rendering opinions as to the value of the Cooperative with respect to such a sale, lease, lease-sale, exchange, transfer or other disposition and as to any other terms and conditions which should be considered. The 3 appraisers shall be designated by the Judge of the Circuit Court for the Judicial District in Indiana in which the Cooperative's headquarters are located. If such judge refuses or otherwise declines to make such designations, they shall be made by the Board of Directors.
8. The Board of Directors shall first give every other rural electric cooperative corporately sited and operating in Indiana (which has not made such an offer for the sale, lease, lease-sale, exchange, transfer or other disposition) an opportunity to submit competing proposals before any tendered offer can be considered by the membership. Such opportunity to submit competing proposals shall be in the form of a written notice to such rural electric cooperatives, which notice shall be attached to a copy of the proposal which the Cooperative has already received and copies of the respective reports of the 3 appraisers. Such rural electric cooperatives shall be given not less than 45 days during which to submit competing proposals, and the actual minimum period within which proposals are to be submitted shall be stated in the written notice given to each.
9. Upon a 2/3 vote of all directors under Section 1 l.0l(b) above, the Board of Directors may determine that the initial or any subsequent proposal may be submitted to the membership for consideration. Notwithstanding any article, bylaw, policy, resolution or practice that has ever been utilized by this corporation to the contrary, a special meeting of the membership to consider an offer for the sale, lease, lease-sale, exchange, transfer or other disposition cannot be held with less than 60 days notice to the members expressing in detail each of any such proposal: PROVIDED, that consideration and action by the members may be given at the next annual member meeting if the Board so determines and if such annual meeting is held not less than 60 days after the giving of notice of such meeting.
10. No offer for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation may be presented for approval to the membership prior to 180 days after the affirmative 2/3 approval of the Board of Directors.
11. Membership approval of any offer for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation must be authorized by a resolution duly adopted at a meeting of the members duly called and held and wherein a quorum was established of 50% of the members in person and which resolution shall have received the affirmative vote of at least 50% of all its members for each and every district from which the Board members are nominated and elected.
12. Notwithstanding any article, bylaw, policy, resolution or practice that has ever been utilized by this corporation to the contrary, no member meeting called for the purpose of considering any offer for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation may be adjourned if there is a lack of a quorum. If such meeting lacks a quorum to consider any such proposal, the process of calling a member meeting for such purpose must start over.
13. Any corporate approved proposal for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation shall be approved by the Indiana Utility Regulatory Commission; provided, however, that the Board of Directors of the corporation shall have full power and authority, without authorization by the members thereof, to do the following:
    1. to borrow moneys from any source and in such amounts as the Board may from time to time determine,
    2. to issue the Cooperative's obligations evidencing such borrowing,
    3. to mortgage or otherwise pledge or encumber any or all of the Cooperative's property or assets as security therefor, and/or
    4. to authorize the execution and delivery of a mortgage, or mortgages, or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the corporation, whether acquired or to be acquired and wherever situated, as well as the revenues therefrom, for the purpose of financing the construction or maintenance of the corporation's distribution system and for general plant as defined in the uniform system of accounts prescribed by the Indiana Utility Regulatory Commission, all upon such terms and conditions as the Board of Directors shall determine, to secure any indebtedness of the corporation to the United States of America or any agency or instrumentality thereof or to any financial institution, which action of the Board of Directors will be subject to the approval of the Indiana Utility Regulatory Commission, to the extent required by law. The Board of Directors shall also have full power and authority; without requirement of any member authorization or Commission approval, to sell, lease, lease-sell, exchange, transfer or otherwise dispose of merchandise, or of property no longer necessary or useful for the operation of the Cooperative, or of less than substantially all of the Cooperative's property and assets.

The provisions of this article shall not apply to a sale, lease, lease-sale, exchange, transfer or other disposition to one or more other rural electric cooperatives if the substantive or actual legal effect thereof is to merge or consolidate with such other one or more rural electric cooperatives. This Article may not be amended except upon 2/3 affirmative vote of the Board of Directors.

Section 11.02. Distribution of Surplus Assets on Dissolution. Upon the Cooperative's dissolution, any assets remaining after all liabilities or obligations of the Cooperative have been satisfied and discharged shall be allocated and retired to the then members on the basis of the then most current information.

Any member or director may waive, in writing, any notice of meetings required to be given by these Bylaws or any notice that may otherwise be legally required, either before or after such notice is required to be given.

Any provisions contained herein to the contrary notwithstanding and pursuant to the applicable statutes of the State of Indiana, the Cooperative shall recover any capital credits, patronage refunds, utility deposits, membership fees, account balances, or book equity which remain unclaimed for a period of 2 years following attempted payment by the Cooperative to the member or former member entitled thereto.

Prior to the recovery of such unclaimed funds, the Cooperative shall give public notice, in a newspaper published in the county in which the present or former member's premises are or were being served by the Cooperative, of the name of each member or former member entitled to claim such funds, the approximate amount thereof, and the fact that, if not duly claimed at the office of the Cooperative within 60 days of the notice, such funds shall be forfeited to the Cooperative and reallocated for distribution among the other members of the Cooperative. Thereafter, any such unclaimed funds shall be allocated on a pro rata basis among the members of the Cooperative as of the year in which the 60th day falls following publication of the above described notice.

All unclaimed funds recovered by the Cooperative and reallocated as set forth hereinabove shall be considered an irrevocable assignment and gift to the Cooperative of such funds by the member formerly entitled thereto.

Nothing contained in this section shall be construed to prohibit the Cooperative from crediting any of the above described funds against any amounts owed by the member or former member to the Cooperative prior to any payment to such member or any allocation in favor of other members.

Section 8.01. Nonprofit and Cooperative Operation. The Cooperative: (1) shall operate on a nonprofit and cooperative basis for the mutual benefit of all Members; and (2) may not pay interest or dividends on capital furnished by Patrons.

Section 8.02. Allocation of Capital Credits. The Cooperative shall allocate Capital Credits as provided in this Bylaw. The Cooperative must allocate Capital Credits in a patron's name as shown in the Cooperative's records, regardless of the patron's marital status.

1. Patron. The term "patron" means, during a fiscal year, either: (1) a member of the Cooperative, or (2) any other individual or entity purchasing a good or service from the cooperative to whom the Cooperative has a pre-existing legal obligation to allocate capital credits.
2. Allocating Earnings. For each good or service provided by the Cooperative on a cooperative basis during a fiscal year, the Cooperative shall equitably allocate to each patron, in proportion to the quantity or value of the good or service purchased by the patron during the fiscal year and timely paid for by the patron, the Cooperative's patronage earnings from providing the good or service during the fiscal year, which is the amount by which the Cooperative's patronage sourced revenues from providing the good or service exceed the Cooperative' s patronage sourced expenses of providing the good or service, all as determined under federal cooperative tax law. If the Cooperative's patronage sourced expenses of providing the good or service during the fiscal year exceed the Cooperative's patronage sourced revenues from providing the good or service during the fiscal year, all as determined under federal cooperative tax law, then the Cooperative shall: (1) allocate this patronage loss to each patron in proportion to the quantity or value of the good or service purchased by the patron during the fiscal year, (2) offset this patronage loss with the Cooperative's patronage earnings from providing the good or service during the most recent past fiscal year(s) or the next succeeding future fiscal year(s); or (3) offset this patronage loss first with the Cooperative's nonpatronage earnings during the current fiscal year, second with the Cooperative's unallocated nonpatronage earnings during any past fiscal year(s), and third with the Cooperative's nonpatronage earnings during any future fiscal year(s).

As determined by the Board, the Cooperative may use, retain, or equitably allocate the Cooperative's nonpatronage earnings, if any, which is the amount by which the Cooperative's nonpatronage sourced revenues during a fiscal year exceed the Cooperative's nonpatronage sourced expenses during the fiscal year, less any amount needed to offset a patronage loss.

For each amount allocated to a patron, the patron shall contribute a corresponding amount to the Cooperative as capital. The Cooperative shall credit all capital contributions from a patron to a capital account for the patron. The Cooperative shall maintain books and records reflecting the capital contributed by each patron. At the time of receipt by the Cooperative, each capital contribution will be treated as though the Cooperative paid the allocated amount to the patron in cash pursuant to a pre-existing legal obligation and the patron contributed the corresponding amount to the Cooperative as capital. The term "capital credit" means the amounts allocated to a patron and contributed by the patron to the Cooperative as capital.

Consistent with this bylaw, the allocation of capital credits is in the discretion of the Board and the Board shall determine the manner, method, and timing of allocating capital credits. As reasonable and fair, the Cooperative may allocate capital credits to classes of similarly situated patrons under different manners, methods, and timing, provided the Cooperative allocates capital credits to similarly situated patrons under the same manner, method, and timing. The Cooperative may use or invest unretired capital credits as determined by the Board.

If the Cooperative is a member, patron, or owner of an entity from which the Cooperative purchases a good or service used by the Cooperative in providing a good or service and from which the Cooperative is allocated a capital credit or similar amount, then, as determined by the Board and consistent with this bylaw, the Cooperative may separately identify and allocate to the Cooperative's patrons this capital credits or similar amount allocated by the entity.

Upon the Cooperative receiving written notice and sufficient proof of the death of a spouse in a joint membership, the Cooperative shall assign and transfer to the surviving spouse the capital credits allocated, or to be allocated, to the joint membership. Upon the Cooperative receiving written notice and sufficient proof of the dissolution of marriage between spouses in a joint membership, and unless otherwise instructed by a court or administrative body of competent jurisdiction, the Cooperative may assign and transfer to each spouse 1/2 of the capital credits allocated to the joint membership.

Section 8.03. Notification and Assignment of Capital Credits. Within a reasonable time following the end of each fiscal year, the Cooperative may, but is not required to, notify each patron in writing of the stated dollar amount of capital credits allocated to the patron for the preceding fiscal year, PROVIDED, HOWEVER, that individual notices of such amounts furnished by each natural person shall not be required if the Cooperative notifies all patrons of the aggregate amount of such excess and provides a clear explanation of how each patron may compute and determine for himself the specific amount of capital so credited. Unless the Board determines otherwise, and unless these bylaws provide otherwise, the Cooperative may assign or transfer a patron's capital credits only if: (1) the Cooperative receives a written request signed by the patron to assign or transfer the capital credits, (2) the patron and the assignee or transferee comply with all reasonable requirements specified by the Cooperative, and (3) the Board approves the assignment or transfer.

Section 8.04. Retirement of Capital Credits. At any time before the Cooperative's dissolution, liquidation, or other cessation of existence, the Cooperative may generally retire and pay some or all capital credits allocated to patrons and former patrons. Any retirements of capital furnished prior to November 30, 1987, shall be made in order of priority according to the year in which the capital was furnished and credited, the capital first received by the Cooperative being first retired.

If the Cooperative separately identified and allocated capital credits representing capital credits or similar amounts allocated to the Cooperative by an entity in which the Cooperative is or was a member, patron, or owner, then the Cooperative shall retire and pay these capital credits before or after the entity retires and pays the capital credits or similar amounts to the Cooperative.

After retiring capital credits allocated to a patron or former patron, the Cooperative may recoup, offset, or set-off any amount owed to the Cooperative by the patron or former patron, including any compounded interest and late payment fee, by reducing the amount of retired capital credits paid to the patron or former patron by the amount owed.

The Cooperative may retire and pay capital credits only if the Board determines that the retirement and payment will not adversely impact the Cooperative's financial condition. Consistent with this bylaw, the retirement and payment of capital credits are in the discretion of the Board and the Board shall determine the manner, method, and timing of retiring and paying capital credits. As reasonable and fair, the Cooperative may retire and pay capital credits to classes of similarly situated patrons under different manners, methods, and timing, provided the Cooperative retires and pays capital credits to similarly situated patrons under the same manner, method, and timing.

The Cooperative may regularly impose a reasonable dormancy or service charge for each year a patron or former patron fails to claim capital credits retired and paid to the patron or former patron. Through a voluntary written assignment signed by a patron or former patron, which assignment is revocable and is not a condition of the Cooperative providing a good or service to the patron, the patron or former patron may assign or transfer to the Cooperative any past, present, or future capital credits retired and paid to the patron or former patron, but not claimed by the patron or former patron within 2 years of retirement and payment, provided the Cooperative undertook or undertakes reasonable measures to notify the patron or former patron of the retired and paid capital credits.

Section 8.05. Retirement of Discounted Capital Credits to Decedent's Estates. Upon the death of an individual patron or former patron, upon receiving a written request from the deceased individual's legal representative, and under terms and conditions agreed upon by the Cooperative and the deceased individual's legal representative, the Cooperative may specially retire some or all capital credits allocated to the individual, however, same shall be discounted for time value of money. So long as allowed by Indiana law, all such legal representatives who are not officially appointed as the personal representative of the decedent's estate shall be required to execute an affidavit releasing the Cooperative of liability consistent with Indiana Code 29-1-8, as amended. The remaining balance of the discounted capital credit shall be recorded as permanent equity on the books and records of the Cooperative and shall not be retired except in the case of dissolution.

Section 8.06. No Special Retirement of Capital Credits for Entities. Upon the dissolution, liquidation, or other cessation of existence of an entity patron or former patron, the Cooperative may not specially retire and pay capital credits allocated to the former entity. Upon the reorganization, merger, or consolidation of an entity patron or former patron, the Cooperative may not specially retire and pay capital credits allocated to the entity.