Corporate Bylaws of the
HENRY COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION
New Castle, Indiana
The aim of Henry County Rural Electric Membership Corporation (hereinafter called “Cooperative”) is to make the services offered by it to its members at the lowest cost consistent with sound economy and good management. The Cooperative recognizes the importance of its members. Their voice is represented through their respective directors.
The Cooperative bylaws reference from time to time its articles of incorporation, membership agreements along with its rules, regulations and policies. Many times, these items must be read in concert with another as no one item may fully address a particular issue. For example, the Cooperative’s policies may often contain a more detailed statement regarding an issue. Additionally, to fully address a particular issue, reference may need to be made to local, state and federal laws, rules and regulations.
Section 1. General Powers
The business and affairs of the Cooperative shall be managed by a board of directors, which shall exercise all the powers of the Cooperative, except such as are by law or by the Articles of Incorporation of the Cooperative or by these bylaws conferred upon or reserved to the members.
Section 2. Qualifications
No person shall be eligible to become or remain a director of the Cooperative who:
- is not a member, or an officer, director, member or partner of a member, or an owner of a member if the member is a sole proprietorship;
- has ever been convicted of a felony or has been convicted of any other crime(s), which, if a Cooperative employee had been convicted of such crime(s) would cause that employee to either be suspended or terminated from his or her employment;
- is in any way employed by, holds a fiduciary position of trust, or has a substantial financial interest in a competing enterprise, or a business engaged in selling communications or electric services or supplies, or constructing or maintaining communications or electric facilities;
- has not been a member of the Cooperative for twelve consecutive months prior to the Annual Meeting;
- is a current or former employee of the Cooperative;
- is a relative, as that term is defined in the Cooperative’s policy on nepotism, of an incumbent director, or of the manager, or of an employee of the Cooperative;
- fails to maintain minimum attendance at regular board meetings as established from time to time by the Board of Directors;
- is elected to or appointed to a board that has direct or indirect jurisdiction over any aspect of the Cooperative’s business;
- is not at least 18 years of age;
- does not meet the residency requirements as otherwise provided herein; or
- is found to be in violation of other terms of the bylaws or other rules, regulations, or policies established from time to time by the Board of Directors.
- Each director’s decisions must be based on the best interest of this Cooperative and any subsidiary owned or operated by the Cooperative. Directors are required to avoid all acts, situations, and appearances that might cause or appear to cause the director’s interests to conflict with those of the Cooperative or any of its subsidiaries or to compromise to any degree the integrity, good will, and reputation of the Cooperative, its members, employees, officers, and directors along with its subsidiaries.
- The prohibitions outlined above regarding a director’s qualifications and tenure are, in part, closely related to a director’s fiduciary obligations. A fiduciary obligation is a duty to act for the benefit of others. One’s personal interest must be subordinated to that of others. If not the highest, it is one of the highest standards imposed by law.
- The fiduciary obligations include, in part, the Board of Directors establishment of legally compliant employee work place standards, which are found in its policies, rules and contractual obligations. The Board of Directors has mandated that a director or prospective director, as a condition of service, must also be subject to fair and equitable, fact sensitive qualification and tenure standards.
- The Cooperative’s Board of Directors acknowledge it would be a breach of those standards to fail to discipline or discipline a prospective or current director in a manner different from a prospective or current employee where the same or similar convictions were present.
Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions, or any other rule or policy of the Cooperative, the Board shall remove such director from office at its next regular or special meeting.
Nothing contained in this section shall affect, in any manner whatsoever, the validity of any action taken at any meeting of the Board at which a quorum was present. These bylaws, policies, and rules of the Cooperative shall not be interpreted, in any manner, as to create any legal or contractual right for any member to become or remain a director of this Cooperative.
A person, who is otherwise qualified and is designated by a member that is not a natural person, may be nominated and elected as a director for a director’s district, within which the member uses Services supplied by the Cooperative, regardless of where the person or designee resides.
Section 3. Removal of Directors by Members and Resignation
Any member may bring charges against a director by delivering to the Secretary the grounds thereof in writing, together, with a petition signed by at least five percent (5%) of the members. Any member may request the removal of a director for neglect, dereliction, or violation of the responsibilities imposed by these bylaws. Such director shall be informed in writing of the request at least twenty (20) days prior to the meeting of the members, at which the request is 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 to the request; and the person or persons making the request shall have the same opportunity. The question of the removal of such director shall be considered and voted upon at the meeting of the members.
A director may resign at any time by providing written notice of his or her resignation to the Chairman and Secretary of the Board of Directors. A resignation is effective when the notice is delivered, unless the notice specifies a future date. The Board of Directors may, but is not required, to fill the vacancy. The vacancy may be filled before the effective date, but the successor shall not take office until the effective date.
Section 4. Failure of Director to Meet Qualifications
- Failure of a Director to Meet Qualification of the Cooperative’s bylaws.
- If a director fails to meet the qualifications, then, the director shall immediately make written notification of that fact to the Chairman and Secretary of the Board, along with a copy to the CEO. In addition to the director, any member of the Cooperative may also make a written notification of such alleged fact regarding a director in the same manner as prescribed for a director.
- If the director states that the failure to meet the qualifications of the bylaws shall be permanent, then, such notice shall be deemed as the resignation of the director from the directors. The vacancy may then be filled as provided by the bylaws.
- If the director states that the failure to meet the qualifications of the bylaws is only temporary in nature, then, the directors shall then address this issue at the next regular or special meeting of the directors, to hear all relevant facts and law concerning such. The director shall have the right to employ counsel of the director’s own choosing and expense. The remaining directors shall have the authority, with the assistance of the Cooperative’s counsel, to hear and conclusively resolve such issue. Such issue shall be determined by a majority vote of the directors.
- The directors may, as a part of the resolution of this issue, establish certain objective time frames and benchmarks for the Director to meet, thereby, curing any qualification issue. If the director fails to meet these objective time frames and benchmarks, then, the Chairman of the Board shall, at the next regular or special meeting of the directors, report that fact in writing to the directors. The director’s seat shall then be declared vacant by the directors.
- Any vacancy created by this process may, but is not required to be, filled by the Board of Directors. If the vacancy is filled by the Board of Directors, then, the minutes of the Cooperative shall reflect the vote of the directors.
- Attendance. Failure of Director to attend meetings
- Directors shall attend regular board meetings, special board meetings, and other functions of the Cooperative to adequately represent, both, the members from his or her district, as well as all other members of the Cooperative, in compliance with the Cooperative’s meeting attendance policy.
Section 5. Number of Districts and Directors
- In 1936, the Cooperative’s articles of incorporation, Article IV, provided that the number of directors was not to be less than three (3) nor more than thirteen (13). Article IV stated that unless otherwise fixed by the bylaws, the number of original directors of the Cooperative was set at thirteen (13).
- The Board of Directors has established that the number of directors will be nine (9) directors. Each director is to represent one district.
- The Board of Directors shall have the power to change the boundaries of the districts for any permissible purpose, including creating the same number of districts as there are directors. To the extent practical, the Board of Directors will endeavor to maintain an equitable number of members in each district.
Section 6. Tenure
- Directors shall be elected on a three (3) year rotation of the districts as provided herein.
- A director’s term shall be for (3) years or until their successors shall have been elected and shall have qualified.
- Directors, who have served five (5) consecutive 3-year terms, shall not be eligible for re- election or appointment as a director until the expiration of 3 years from the end of his or her previous term.
Section 7. District Election Rotation
- Members in each district shall elect directors in the following rotation:
- Districts 1, 4, 9
- Districts 2, 7, 8
- Districts 3, 5, 6
Section 8. Election of Directors
- Directors shall be elected by the members voting in the district from which the director is seeking election
- Directors shall be elected via election procedures established by a board policy on director elections.
- Director elections will be conducted in a fair and equitable manner, ensuring transparency and accuracy while using means, methods and/or technologies appropriate to offer one vote per member in the district up for election.
Section 9. Director Vacancies
- Subject to any applicable provision of the Articles of Incorporation, the bylaws and all other rules, regulations and policies, then any director vacancy shall be filled by placing the unexpired term of that director’s seat on ballot at the next regularly scheduled election as provided in Section 8 above.
- Unless provided otherwise, the director thus elected to fill the vacancy shall serve for the unexpired term of his predecessor or until their successors shall have been elected and shall have qualified.
Section 10. Compensation
Directors shall receive compensation for attendance at Board meetings, committee meetings and such other services as may be performed by them in such amount as may be determined by the directors by resolution.
Section 11. Rules and Regulations
The Board of Directors shall have power to make and adopt such rules and regulations, not inconsistent with law, the Articles of Incorporation of the Cooperative or these bylaws, as it may deem advisable for the management, administration and regulation of the business and affairs of the Cooperative.
Section 12. Executive Committee Powers and Duties
The Chairman, Vice Chairman, Secretary, Treasurer, and immediate past Chairman shall constitute an Executive Committee of which the Chairman shall be Chairman. During the intervals between the meetings of the directors, the Executive Committee shall consider such business of the Cooperative as it deems advisable or as directed by the directors. The Executive Committee shall have power only to make recommendations to the directors. All recommendations determined by the Executive Committee shall be reported to the directors at its next meeting succeeding such determination. Regular minutes of the proceedings of the Executive Committee shall be kept in the regular minute book of the Cooperative. A majority of the Executive Committee shall be necessary to constitute a quorum, and in every case, the affirmative vote of a majority of the members shall be necessary for the passage of any recommendation. The Executive Committee shall fix its own rules of procedure and shall meet as provided by such rules or by resolution of the committee, and it shall also meet at the call of the chairman or any member of the committee.
Section 13. Accounting System and Reports
The directors shall cause to be established and maintained a complete accounting system subject to applicable laws and rules and regulations of any regulatory body. The directors shall also within one hundred twenty (120) days after the close of each fiscal year cause to be made a full and complete audit of the accounts, books and financial condition of the Cooperative as of the end of such fiscal year. Such audit reports shall be submitted to the members at the following meeting.
Meetings of Directors
Section 1. Regular Meetings
A regular meeting of the directors shall also be held monthly at such time and place in Henry County, Indiana, as the directors may provide by resolution. Such regular monthly meetings may be held without notice other than such resolution fixing the time and place thereof.
Section 2. Special Meetings
Special meetings of the directors may be called by the Chairman or any three (3) directors. The person or persons authorized to call special meetings of the directors may fix the time and place (which shall be in Henry County, Indiana) for the holding of any special meeting of the directors called by them.
Section 3. Notice
Notice of the time, place and purpose of any special meeting of the directors shall be given at least five (5) days previous thereto, by written notice, delivered personally or mailed, to each director at his last known address. If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail service so addressed, with postage thereon prepaid. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except in case a director shall attend a meeting for the express purpose of objecting to the transaction of any business because the meeting shall not have been lawfully called or convened.
Section 4. Quorum
A majority of the directors shall constitute a quorum for the transaction of business at any meeting of the directors, provided that if less than a majority of the directors are present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice.
Section 5. Manner of Action
The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the directors on procedures which conform to these bylaws and unless otherwise provided herein, the rules of Roberts Rules or Order shall be applicable.
Section 1. Number
The officers of the Cooperative shall be a Chairman, Vice Chairman, Secretary, Treasurer, and such other officers as may be determined by the directors from time to time. The offices of Secretary and of Treasurer may be held by the same person.
Section 2. Election and Term of Office
The officers shall be elected, by ballot, annually by and from the directors at the first meeting of the directors held after each annual meeting of the members. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until the first meeting of the directors following the next succeeding annual meeting of the members or until his successor shall have been duly elected and shall have qualified, subject to the provisions of these bylaws with respect to the removal of officers.
Section 3. Removal
Any officer or agent elected or appointed by the directors may be removed by the directors whenever it is in their judgment that the best interests of the Cooperative will be served thereby.
Section 4. Vacancies
Except as otherwise provided in these bylaws, a vacancy in any office may be filled by the directors for the unexpired portion of the term.
Section 5. Chairman
- Shall be the principal executive office of the Cooperative and shall preside at all meetings of the members and of the directors;
- Shall sign, with the Secretary, certificates of membership, the issue of which shall have been authorized by resolution of the directors, and may sign any deeds, mortgages, deeds of trust, notes, bonds, contracts, or other instruments authorized by the directors to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the directors or by these bylaws to some other officer or agent of the Cooperative, or shall be required by law to be otherwise signed or executed; and
- In general, shall perform all duties incident to the office of Chairman and such other Duties as may be prescribed by the directors from time to time.
Section 6. Vice Chairman
In the absence of the Chairman or in the event of his inability or refusal to act, the Vice Chairman shall perform the duties of the Chairman, and when so acting shall have all the powers of and be subject to all the restrictions upon the Chairman and shall perform other duties as from time to time may be assigned to such person by the directors.
Section 7. Secretary
The Secretary shall:
- Keep the minutes of meetings of the members and the directors in one or more books provided for that purpose;
- See that all notices are duly given in accordance with these bylaws or as required by law;
- Be custodian for the corporate records and of the seal of the Cooperative and see that the seal of the Cooperative is affixed to all certificates of membership prior to the issuance thereof and 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;
- Sign with the Chairman certificates of membership, the issue of which shall have been authorized by resolution of the directors;
- Keep on file at all times a complete copy of the bylaws of the Cooperative containing all amendments thereto, which copy shall always be open to the inspection of any member and at the expense of the Cooperative forward a copy of the bylaws and of all amendments thereto to each member upon request; and
- 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 directors.
Section 8. Treasurer
The Treasurer shall in general perform all the duties incident to the office of the Treasurer and such other duties as from time to time may be assigned to him by the directors.
Section 9. Chief Executive Officer
The directors may appoint a Chief Executive Officer who may be, but who shall not be required to be, a member of the Cooperative. The Chief Executive Officer shall perform such duties as the directors may from time to time require of him and shall have such authority as the directors may from time to time vest in such person.
Section 10. Bonds of Officers
The directors in their sole discretion may also require any officer, agent or employee of the Cooperative to give bond in such amount and with such surety as it shall determine.
Section 11. Compensation
The powers, duties and compensation of any officer, agent, or employee of the Cooperative shall be fixed by the directors.
Section 12. Reports
The officers of the Cooperative shall submit at each annual meeting of the members reports covering the business of the Cooperative for the previous fiscal year and showing the condition of the Cooperative at the close of such fiscal year.
Contracts, Checks and Deposits
Section 1. Contracts
Except as otherwise provided in these bylaws, the directors may authorize any officer or officers, agent or agents to enter into any contract or execute and deliver any instrument in the name and on behalf of the Cooperative, and such authority may be general or confined to specific instances.
Section 2. Checks, Drafts, Notes and Other Evidence of Indebtedness
All checks, drafts or other orders for the payment of money, and all notes, bonds or other evidence of indebtedness issued in the name of the Cooperative shall be signed by such officers or employees of the Cooperative and in such manner as shall from time to time be determined by resolution of the directors.
Non-Profit Operation and Member’s Capital
Section 1. Interest or Dividends on Capital Prohibited
The Cooperative shall always be operated on a cooperative, non-profit basis for the mutual
benefit of its members. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its members.
Section 2. Member’s Capital in Connection with Furnishing Services
In the furnishing of services, the Cooperative’s operations shall be so conducted that all members will, through their member, furnish capital for the Cooperative. In order to induce members and to assure that the Cooperative will operate on a non-profit basis, the Cooperative is obligated to account on a member basis to all its members for all amounts received and receivable from the furnishing of services in excess of operating costs and expenses properly chargeable against the furnishing of services, including the establishment and maintenance of a general reserve fund for working capital to provide among other things for insurance, taxes, maintenance, improvements, new construction and contingencies in an amount which the Board of Directors shall deem reasonable. 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 members as capital. The Cooperative is obligated to pay by cash refund or by crediting to a capital account for each member 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 member shall be refunded in cash and/or credited to an appropriate record to the capital account of each member. All such amounts credited to the capital account of any member shall have the same status as though they had been paid to the member in cash in pursuance of a legal obligation to do so and the member 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, insofar as permitted by laws, be
- used to offset any losses incurred during the current or any prior fiscal year, and
- to the extent not needed for that purpose, allocated to its members on a member’s basis, and
- any amount so allocated shall be included as part of the capital credited to the accounts of members, as herein provided.
Section 3. Distribution of Assets on Liquidation
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 credited to member’s accounts may be retired in full or in part.
Section 4. Assignment of Capital Credit
Capital credited to the account of each member 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 member’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 member, if the legal representatives of his estate shall request in writing that the capital credited to any such member 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 member immediately upon such terms and conditions as the Board, acting under policies of general application, and the legal representatives of such member’s estate shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.
Section 5. Contract Between Cooperative and Members
The members 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 member, and both the Cooperative and the members are bound by such contract, as fully as though each member 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 member of the Cooperative by posting in a conspicuous place in the Cooperative’s office.
Section 6. Unclaimed Capital Credit and Property
The Cooperative has adopted policies, procedures and publications regarding the allocation of its capital credits. For specific questions, reference should be made to the policies, procedures and publications.
Indiana has adopted a version of the Uniform Unclaimed Property Act (the “Act”). The Act can be found at Ind. Code 32-34-1-1. The Act defines what type of property shall be administered under its provisions. The Act also defines what type of property shall not be subject to the Act. Ind. Code 32-34-1-1 (b) states the Act doesn’t apply to stocks; dividends; capital credits; patronage refunds; utility deposits; membership fees; account balances; or book equities; for which the owner cannot be found and that are the result of distributable savings of a rural electric membership corporation formed under Ind. Code 8-1-13. This Cooperative was formed under Ind. Code 8-1-13’s predecessor. Therefore, a member’s unclaimed property is not subject to the Act. The Cooperative must then administer the member’s unclaimed property in a different manner as provided by law.
Finally, Indiana law provides the Cooperative with a means of handling a member’s unclaimed property. It states the Cooperative shall recover from the member, after a period of two (2) years, the value of any unclaimed stocks, dividends, capital credits, members’ refunds, utility deposits, membership fee, account balances, or book equity for which the owner (member or former member) cannot be found and are the result of distributable savings of the Cooperative upon giving a notice published one time in a newspaper of the English language which is published in the county in which the Cooperative general headquarters is located. The notice shall state in substance that the Cooperative’s website has information relating to the members unclaimed property including the name of the member, along with the approximate amount of owner’s interest and the procedure for claiming the unclaimed property. It shall further state that if the unclaimed property is not claimed by a provable claim within 60 days of the date the notice was published, then the unclaimed property will be turned over to the Cooperative. If no provable claim shall have been filed by such member within 60 days after the one-time publication of the notice, the Cooperative may credit against the member’s account any amounts due and owing the Cooperative by the member and thereafter allocate the balance to the Cooperative’s permanent equity.
Any member or former member who fails to claim any cash retirement or capital credit or other payment within two (2) years and sixty (60) days after payment has been made available to such person, such failure will constitute an irrevocable assignment and gift to the cooperative of such capital credits or other payments.
Waiver of Notice
Any member or director may waive, in writing, any notice of meetings required to be given by these bylaws. In case of a joint membership, a waiver of notice signed by either husband or wife shall be deemed a waiver of notice of such meeting by both joint members.
Disposition of Property
The Cooperative may not sell, mortgage, lease or otherwise dispose of or encumber any of its property other than:
- Property which in the judgment of the directors neither is nor will be necessary or useful in operating and maintaining the Cooperative’s system and facilities; provided, however, that all sales of such property shall not in any one year exceed in value ten per cent (10%) of the value of all the property of Cooperative;
- Services of all kinds, including electric energy; and
- Personal property acquired for resale, unless such sale, mortgage, lease of other disposition or encumbrance is authorized at a meeting of the members by the affirmative vote of at least two thirds of the members who are present at such meeting, and the notice of such proposed sale, mortgage, lease or other disposition or encumbrance shall have been contained in the notice of the meeting; provided, however, that the Cooperative may not sell, mortgage, lease or otherwise dispose of or encumber all, or substantially all, the property of the Cooperative unless the same shall be authorized by a resolution adopted by the affirmative vote of at least a majority of all the members of the Cooperative at a meeting called for the purpose and the notice of such meeting shall have stated that such proposed sale, mortgage, lease or other disposition or encumbrance was to be acted upon at such meeting.
The fiscal year of the Cooperative shall begin on the first day of January of each year and end on the thirty-first day of December of the same year.
Membership in Other Organizations
(Left Blank on Purpose)
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.”
These bylaws may be altered, amended or repealed by the affirmative vote of not less than two- thirds (2/3) of the members of the directors at any regular or special meeting. The notice of the meeting shall contain a copy of the proposed alteration, amendment or repeal to be considered at the meeting.
Amended November 2005
Amended April 2006
Amended July 2007
Amended August 2007
Amended December 2012
Amended July 2014
Amended July 2016
Amended August 2016
Amended June 2018
Amended January 2020
Amended April 14, 2021