INLAND POWER & LIGHT
COOPERATIVE BYLAWS 1
INLAND POWER & LIGHT
TABLE OF CONTENTS ARTICLE I – MEMBERS Section 1: Qualifications & Obligations Section 2: Membership Procedure Section 3: Transfer & Termination of Membership Section 4: Conditions and Provisions of Cooperative Services Section 5: Purchase of Cooperative Services Section 6: Member Grant of Property Rights
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ARTICLE II – MEETINGS OF MEMBERS Section 1: Annual Meeting Section 2: Special Meetings Section 3: Member Action Without a Member Meeting Section 4: Member Action During a Member Meeting Section 5: Notice of Members’ Voting and Meetings Section 6: Quorum Section 7: Election & Credentials Committee Section 8: Presiding Officer Section 9: Voting Section 10: Rules Governing Member Meetings
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ARTICLE III – TRUSTEES Section 1: General Powers Section 2: Districts Section 3: Election Section 4: Qualifications Section 5: Nominations Section 6: Vacancies Section 7: Resignation Section 8: Removal Section 9: Compensation Section 10: Indemnification
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ARTICLE IV – MEETINGS OF TRUSTEES Section 1: Regular Meetings Section 2: Special Board Meetings Section 3: Conduct of Board Meetings Section 4: Waiver of Notice Section 5: Trustee Quorum & Voting Section 6: Committees
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ARTICLE V – OFFICERS Section 1: Required Officers Section 2: Duties Section 3: Resignation or Removal Section 4: Officer Contract Rights Section 5: Authority to Execute Documents Section 6: Officer Compensation
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ARTICLE VI – COOPERATIVE OPERATION Section 1: Non-profit & Cooperative Operation Section 2: Allocating & Crediting Capital Section 3: Retiring & Refunding Capital Credits Section 4: Reasonable Reserves
Page 29 Page 29 Page 30 Page 31
ARTICLE VII – DISPOSITION OF COOPERATIVE ASSETS Section 1: Disposal of Cooperative Assets Page 33 Section 2: Merger or Consolidation Page 34 Section 3: Distribution of Cooperative Assets Upon Dissolution Page 35 ARTICLE VIII – MISCELLANEOUS Section 1: Bylaw Amendments Section 2: Governing Law Section 3: Titles & Headings Section 4: Partial Invalidity Section 5: Cumulative Remedies Section 6: Successors & Assigns Section 7: Waiver Section 8: Lack of Notice
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MEMBERS SECTION 1. QUALIFICATIONS AND OBLIGATIONS A. Any person, marital community, registered domestic partnership, firm, association, partnership, business trust, corporation, legal or political entity may become a member in the cooperative by: 1. Subject to Article I Section 2.D. below completing a written membership application as prescribed by the cooperative, and, 2. Using, receiving or purchasing a cooperative service from the cooperative. B. No person, marital community, registered domestic partnership, firm, association, partnership, business trust, corporation or legal or political entity may hold more than one membership in the cooperative. A husband and wife may jointly become a member of the cooperative. C. Membership will become effective upon completing the membership procedure to the cooperativeâ€™s satisfaction or the commencement of using, receiving or purchasing a cooperative service. SECTION 2. MEMBERSHIP PROCEDURE A. Subject to Article I Section 2.D. below, any person seeking to become a member must, within a reasonable time of using, receiving or purchasing a cooperative service, complete a written membership application provided by the cooperative in which the applicant agrees to comply with, as currently in existence or as later amended, all applicable laws and legally binding agreements regarding 6
the cooperative and its operations, assets, members and patrons as well as the provision, use, receipt and purchase of cooperative services. These laws and legally binding agreements include but are not limited to: legislative, executive and judicial statutes, case law, regulations, ordinances, local, state and federal statutes, rulings or orders, contractual provisions legally enforceable by or against the cooperative and legally binding agreements between the cooperative and the member. The application will also require agreement to comply with, as currently in existence or as later amended, the cooperative’s articles of incorporation and bylaws, the cooperative’s service rules and regulations, the cooperative’s rate or price schedules and any policy, resolution, action or amendment adopted by the cooperative’s board. B. The applicant must also complete any additional or supplemental document or contract required by the board for the cooperative service which the applicant is seeking to use, receive or purchase. C. The applicant must pay any reasonable fees, dues, assessments, deposits, contributions or other amounts required by the board as well as any outstanding amounts owed to the cooperative by the applicant. D. If a person, marital community, registered domestic partnership, firm, association, partnership, business trust, corporation, legal or political entity does not complete a written membership application, the payment of fees to the cooperative or receipt of a cooperative service shall constitute consent and agreement to membership and such person or entity shall become a member of the cooperative and thereby bound by the articles of incorporation, bylaws, and other organizational documents of the cooperative, as well as applicable laws and binding agreements as referenced in Article I Section 2.A. above. E. The cooperative or the cooperative’s agent will maintain a record of current members in a form permitting the cooperative to alphabetically list the names and addresses of all members. SECTION 3. TRANSFER AND TERMINATION OF MEMBERSHIP A. Upon death, legal cessation of existence or no longer receiving cooperative services, the membership of a member will be terminated. B. In the event of the death of a member leaving a surviving spouse or registered domestic partner, the surviving spouse or registered domestic partner is entitled to have the membership transferred to him or her without paying a membership fee. If the membership was a joint membership, the membership will be transferred to the surviving spouse or registered domestic partner. C. In the event of the death of a member leaving no surviving spouse or registered domestic partner, membership may be transferred as of the date of death to the 2
estate of the deceased member without paying a membership fee. An estate membership will automatically terminate two years after the date of transfer or upon the date of the closing of the estate unless the cooperative has good reason to extend the membership period. D. The cooperative may terminate or suspend a membership upon request of a member or upon the member’s failure to follow, abide by or be legally bound to the governing documents of the cooperative. E. Except as otherwise provided in these bylaws, a membership may not be sold, purchased, assigned, encumbered, pledged or otherwise transferred. SECTION 4. CONDITIONS AND PROVISIONS OF COOPERATIVE SERVICES A. The cooperative will provide cooperative services to members in a reasonable manner. The cooperative neither guarantees nor warrants continuous or flawless provision of cooperative services. B. After providing a member with reasonable notice and an opportunity to comment orally or in writing, the cooperative may suspend or terminate provision of any cooperative service to that member. This notice requirement is waived and service may be suspended or terminated without notice if: 1. It is determined that a member has tampered or interfered with, damaged, destroyed or impaired any product, equipment, structure, or facility furnished, maintained or used by the cooperative to provide, monitor, measure or maintain any cooperative service whether through intentional conduct, neglect, failure to act, or otherwise. Whether or not the member is negligent, the member shall be charged reasonable fees and expenses for all costs and labor necessary to install, repair, and replace the equipment and reestablish any interruption in service. 2. Upon the discovery of any unsafe condition or imminent hazard posed by cooperative equipment or products. SECTION 5. PURCHASE OF COOPERATIVE SERVICES A. At prices, rates or amounts determined by the board and in a manner specified by the cooperative, each member shall pay the cooperative for all cooperative services used, received or purchased by the member or at, or for, any dwelling or structure owned, controlled or directly occupied by the member and any other fees, deposits, contributions or other amounts required by law, these bylaws or by the board. B. As determined by the board, members shall pay interest, compounded periodically, and/or late payment fees for all amounts owed but not timely paid to the 3
cooperative. The cooperative may apply all amounts paid by any member to all of the memberâ€™s accounts on a pro rata basis or as otherwise determined by the board. C. As required or allowed by law and as determined by the board, if a member substantially reduces or ceases use, receipt or purchase of cooperative services, either singly or in combination, then the cooperative may charge the member and the member will pay the cooperativeâ€™s costs and expenses incurred by the cooperative in relying on the memberâ€™s pre-reduction or pre-ceasing use, receipt or purchase of cooperative services. SECTION 6. MEMBER GRANT OF PROPERTY RIGHTS A. As determined or required by the cooperative, each member will provide the cooperative safe and reliable access to any real or personal property in which the member possesses any legal right and which is reasonably necessary to safely, reliably and efficiently operate the cooperative or provide cooperative services. Rights to inspect, monitor, operate, repair, maintain, remove or relocate any cooperative equipment will be granted. In addition, the cooperative will be given access to provide, monitor, measure or maintain any cooperative service or to satisfy or facilitate any obligation incurred or right granted by the cooperative regarding the use of cooperative equipment. B. No member shall tamper or interfere with, damage or impair any cooperative equipment. Unless otherwise determined by the board, the cooperative owns all cooperative equipment. Each member shall protect all cooperative equipment and shall install, implement and maintain any protective device or procedure required by the cooperative. Each member shall comply with any board policy or cooperative procedure necessary to implement any board policy regarding the provision of any cooperative service to any member or person.
MEETINGS OF MEMBERS SECTION 1. ANNUAL MEETING The cooperative will annually hold a meeting of the members at a date and time to be established by the board. The meeting will be held in any county or service territory where the cooperative furnishes electric service. The meeting is to be held to elect trustees and to conduct such other business as is stated in the notice of meeting. No business shall be conducted at such meeting except as is expressly set forth in the notice of meeting. If the election of trustees is not held on the day designated for the annual meeting, the board will cause the election to be held at a special meeting of the members as soon as possible thereafter. Failure to hold an annual meeting will not affect any action taken by the cooperative or the membership. SECTION 2. SPECIAL MEETINGS Special meetings of the members may be called by the board of trustees or, subject to Article II Section 4.B. below, by written petition of at least 10 percent of all the members. Notice of such special meetings will be given pursuant to Article II Section 5 below. No business shall be conducted at such special meeting except as expressly set forth in the notice of meeting. Special meetings of the members may be held at any place within the county of Spokane, state of Washington as established by the board. SECTION 3. MEMBER ACTION WITHOUT A MEMBER MEETING Except as otherwise provided in these bylaws or required by federal or state law, and in a manner and with respect to such matters as shall be determined by the board, members may act without a member meeting if the cooperative: 1. Receives that number of written or electronic responses to a proposed action as would constitute a quorum at an annual meeting of members, and, 6
2. If the number of responses consenting to such proposed action exceeds the number opposed to such proposed action. Any material soliciting approval of an action by member consent must contain or be accompanied by a copy or summary of the proposed action sufficient in scope and detail to reasonably apprise the members of the proposed action and its projected effect. A member’s written or electronic consent (or opposition) to the proposed action has the effect of a vote taken at a member meeting and may be so described in any document. If the members consent to a proposed action without a member meeting, the cooperative shall notify all members regarding such action in accordance with Article II Section 4.D. below. SECTION 4. MEMBER ACTION DURING A MEMBER MEETING A. Annually, the members shall elect trustees of the cooperative to fill each trustee position in which the trustee’s then current term is expiring and to vote on such other proposals as shall be put forth on the ballot. A proposal may be placed on the annual ballot by the board of trustees or by a petition signed by at least 10 percent of all the members. Prior to circulating the same for member signature, any such petition shall be reviewed by counsel for the cooperative with the proponents to assure clarity of language and that it complies with applicable law and the cooperative’s articles of incorporation and bylaws. A petition matter shall not be placed on the ballot for vote by the members that does not possess clarity of language and comply with applicable laws and the cooperative’s articles of incorporation and bylaws. B. A matter may be placed before the members for vote by the board of trustees or by petition executed by at least 10 percent of all the members, provided that such petition complies with the requirements of Article II Section 4.A. immediately above; and provided further that any matter placed before the members for vote shall be considered at the annual meeting or a special meeting of the members. C. Prior to a member vote upon any action by the cooperative which, for a corporation, would give rise to dissenters’ rights under Chapter 23B.13 of the Revised Code of Washington, the board must review, approve and recommend such action to the members. Merger or consolidation of the cooperative, whether or not the cooperative is the surviving entity, or dissolution or sale of the cooperative are examples of actions which give rise to dissenters’ rights. D. In addition to announcing the results of the member voting at the annual meeting or a special meeting, as applicable, the board of trustees shall cause such results to be posted on the cooperative’s website and communicated to the membership in the cooperative’s next monthly billing. E. Member action shall only occur through the balloting process described in Article II. 8
F. A trustee’s election shall be effective on the date of the meeting at which his or her election is announced. Unless otherwise stated on the ballot, and except as otherwise provided in Article II Section 3, above, the effective date of other actions upon which the members vote shall be the date of the annual or special members’ meeting at which the results of such vote are announced. SECTION 5. NOTICE OF MEMBERS’ VOTING AND MEETINGS Except as provided in Article II Section 3, above, the cooperative will send a written notice stating the place, date and hour of the annual or special meeting and list all matters which will be considered at the meeting to each member at the address as it appears on the records of the cooperative on the date of mailing not less than 20 days or more than 40 days before the meeting. The notice will also contain an official ballot listing nominated candidates and setting forth any other issues to be voted on by the membership, along with a self-addressed, postage pre-paid envelope and/or, at the discretion of the board, options and directions to vote electronically with respect to the ballot. Subject to such policies as shall be adopted by the board, such notice shall similarly include candidates’ statements and statements of proponents and opponents of other matters placed on such ballot. The inadvertent and unintended failure of any member to receive a ballot or notice of an annual or special meeting of the members shall not affect any action which may be taken at any such meeting. SECTION 6. QUORUM Except as expressly provided otherwise in these bylaws, in order for a vote by the members to be effective, the same shall require participation through the casting of valid votes by a ballot by at least 150 members, which shall constitute a quorum for the transaction of all business by the members. SECTION 7. ELECTION AND CREDENTIALS COMMITTEE To ensure the integrity of any election or other voting by members as described in this Article II, prior to the issuance of ballots and notice of meeting, the president or his or her designee may appoint three members to serve as the election and credentials committee. A committee member may not be a member of the nominating committee, an existing trustee or close relative of an existing trustee, a known nominee or close relative of a known nominee, employee, representative or agent of the cooperative. The committee will elect a chairperson, and subject to such policies as shall be adopted by the board, will oversee the election process, including, but not limited to making all determinations concerning the validity of votes and ballots, the eligibility of members to vote and the counting of ballots. Decisions made by the committee on these matters are final. As an alternative to the election and credentials committee, the cooperative may outsource the oversight and counting of election votes by retaining a certified public accountant (CPA), independent auditor or third-party election administration organization. In this case, the election results determined by the CPA, independent auditor or a third-party company are final. 9
SECTION 8. PRESIDING OFFICER A. The board may, by majority vote, appoint any qualified individual to serve as presiding chairman at any meeting of the members. In the event that such an appointment is not made, the president, or, in his absence, the vice president will act as presiding officer. B. The president or presiding officer may have a person removed from the member meeting for unruly, disruptive, or similar behavior and may exercise power reasonably necessary for efficiently and effectively conducting the member meeting. SECTION 9. VOTING A. Each active membership will be entitled to one vote on each matter submitted for consideration. An active membership is one currently using, receiving or purchasing cooperative services as of the date on which the notice of the meeting and ballots are mailed. B. Any officer of a corporation who has an active membership is entitled to one vote for the corporation. C. Except as provided by these bylaws or by law, and subject to such policies as shall be adopted by the board, members may vote in person, at a meeting of members, or by written or electronic ballot. Members voting by written ballot or electronically shall be counted for purposes of a quorum, and their vote shall be treated as a vote cast at such meeting for all purposes. D. Except as described in Article II Section 3, above, ballots will be due electronically, by hand delivery or by mail by the close of business at the cooperative headquarters the day prior to the scheduled date of the meeting of members. If a member has not cast such member’s ballot in writing or electronically prior to the meeting, then the member may cast such member’s vote in person at such meeting. E. A member may not delegate or assign the member’s voting right by proxy to any other party. SECTION 10. RULES GOVERNING MEMBER MEETINGS Except as otherwise provided by these bylaws, the most recent edition of Robert’s Rules of Order, Newly Revised, will govern all procedural questions at meetings of members.
TRUSTEES SECTION 1. GENERAL POWERS The business and affairs of the cooperative will be managed under the direction of a board of trustees which will exercise all the powers of the cooperative except those which are by law, by the articles of incorporation of the cooperative or these bylaws conferred upon or reserved to the members. SECTION 2. DISTRICTS The cooperative shall have not fewer than seven and not more than 11 trustee districts, as shall be determined from time to time by the members. As of the date of the adoption of these bylaws there shall be nine trustees within seven districts. The board of trustees shall have the right to establish the boundaries of such districts, seeking in such decision to assure broad geographic representation throughout the cooperativeâ€™s service territory and taking into account such other considerations as the board believes germane to prudent governance of the cooperative. If the board changes the boundaries of any trustee districts, the board shall advise the members of such change. SECTION 3. ELECTION A. At each annual meeting of members, one trustee will be elected in accordance with Article II, above, to fill each position in which the trusteeâ€™s term is expiring to serve for a term of three years, subject to other terms of these bylaws. Candidates for at-large positions can be from any district but both at-large trustees cannot be from the same district. B. The candidate for each position, for which a trustee is to be elected, receiving the highest number of votes will be declared elected as trustee. 12
C. In an effort to level the playing field for all candidates, and subject to such policies as shall be adopted by the board, no candidate may spend, directly or indirectly, in cash or in kind more on their campaign to become a trustee than such amount as is established from time to time by the board. Candidates must disclose campaign costs, if any, to the cooperative’s corporate counsel by sworn affidavit in a form prepared by counsel prior to the start of the annual meeting at which the results of such balloting shall be announced. Overspending on the election or failure to timely file such affidavit will disqualify a candidate from election. D. Tie votes will be decided by a coin flip conducted by the retained CPA, independent auditor or the chairperson of the election and credentials committee as described in Article II Section 7. SECTION 4. QUALIFICATIONS A. While a trustee representing a trustee district and during the one year immediately prior to becoming a trustee, a trustee or trustee candidate must be a member in good standing, have a primary/permanent residence in the district from which the trustee is elected or chosen and use, receive or purchase a cooperative service. While a trustee in an at-large position and for the one year immediately prior to becoming a trustee, a trustee or trustee candidate must be a member in good standing, have a primary/permanent residence within the cooperative service territory and use, receive or purchase a cooperative service. B. A corporation, partnership or other business or governmental agency which is a member in good standing of the cooperative and permanently located in and continuously and materially using, receiving or purchasing a cooperative service may designate one officer or employee permanently residing within 150 miles of the cooperative’s principal office who will be eligible to be a candidate for a trustee position. No more than two trustees may be representatives of business or governmental entities. C. Subject to Article III Section 9.B. below, no person who has served as a trustee will be eligible to become an employee of the cooperative. No person will be eligible to become, or remain, a trustee who is currently an employee or agent of the cooperative, or who has previously been an employee of the cooperative, or who is employed by or who, directly or indirectly, holds a material financial interest in a competing enterprise or a business selling supplies or services to the cooperative or to a substantial number of members of the cooperative, who is a close relative of another trustee, employee, agent or representative of the cooperative or employed by, materially affiliated with or shares a material financial interest with any other trustee. Material is defined to mean that the interest is both known to the trustee and large enough to affect or create the appearance that it might affect a decision of a trustee. As used in this bylaw, close relative means an individual who is, either 14
by blood, law or marriage, including step, half, foster and adoptive relations, a spouse, child, grandchild, parent, grandparent, aunt, uncle, niece, nephew or sibling or principally resides at the same residence. No person shall take or hold office as a trustee who holds an elective public office in connection with which a salary is paid. D. Nothing contained in this section will, or will be construed to, affect in any matter whatsoever the validity of any action taken at any meeting of the board. SECTION 5. NOMINATIONS A. Nominations for candidacy for a trustee position may be accomplished in one of two ways: 1. It shall be the duty of the board to appoint not less than 75 days or more than 120 days before the date of the scheduled annual meeting of members, a nominations committee consisting of not less than three or more than 11 members who will be selected to give equitable representation on the committee to the trustee positions for which the trustees are to be elected incident to that year’s annual meeting. No member of the board may be appointed a member of the committee. The committee will nominate at least one individual to run for election for each trustee position for which members are scheduled to vote incident to that year’s annual meeting. The committee or its designee will prepare and post at the principal office of the cooperative and on the cooperative’s website at least 60 days before the meeting a list of nominations for the positions open. 2. Members may make a nomination in writing by listing the name of the qualified nominee and the trustee district for which the nominee will run along with the printed names, addresses, telephone numbers and original signatures of at least 25 members and submitting the petition to the cooperative’s principal office at least 50 days prior to the date of the member meeting in order to comply with printing and mailing requirements followed by the return and counting of ballots. After verifying that a member petition complies with this bylaw, the cooperative will post the nomination at the same place where the list of nominations made by the committee is posted. B. The cooperative shall prepare the form of ballot to be mailed to each member with the notice of meeting. Subject to Article II Section 7, such form or ballot must be approved by the board of trustees and credentials committee, and shall list all candidates for trustee positions duly nominated pursuant to this Article III Section 5 and all other matters properly to be placed on the ballot pursuant to Article II.
SECTION 6. VACANCIES Subject to the provisions of these bylaws with respect to removal of trustees, vacancies occurring on the board between meetings of members may be filled by a majority vote of the remaining trustees but the persons selected must comply with the trustee qualifications. Trustees thus selected will serve for the remainder of the terms of the trustees they replaced or until their successors have been elected subject to other terms of these bylaws.
B. Except in emergencies, no trustee may receive compensation for serving the cooperative in any other capacity, nor may any close relative of a trustee receive compensation for serving the cooperative unless the compensation is specifically authorized by a vote of the members. SECTION 10. INDEMNIFICATION Indemnification of trustees, officers and certain other agents and employees of the cooperative will be governed by the following provisions:
SECTION 7. RESIGNATION A trustee may resign at any time by delivering written notice of resignation to the president or secretary. Unless the written notice of resignation specifies a later effective date, a trustee’s resignation is effective upon the receipt by the president or secretary of the written resignation. If the resignation is effective at a later date, and if the successor trustee does not take office until the effective date of the resignation, then the pending vacancy may be filled before the effective date of the resignation. SECTION 8. REMOVAL As provided by this bylaw, members or trustees, by majority vote, may request the removal of one or more trustees. For each trustee for whom removal is requested, the members shall deliver to the president or secretary of the cooperative a written petition identifying the trustee, explaining the basis for requesting the trustee’s removal and containing the printed names, printed addresses and original and dated signatures obtained within 60 days of the date of the petition of at least 10 percent of the members existing as of the date of the petition. Within 30 days following the president or secretary receiving a removal petition, the cooperative will forward a copy of the petition to the implicated trustee and the board will meet and review the petition. If the board determines that the petition complies with this bylaw, then the cooperative shall cause the same to be submitted to vote by the members at a special meeting pursuant to the provision of Article II Section 2. The cooperative shall include with the ballot and notice of meeting mailed to the members a statement from the petition proponents supporting the basis for removing the trustee, and the trustee may provide materials for inclusion in the mailing refuting the alleged basis for removal. If a majority of votes are cast in favor of removal, the trustee’s removal shall be effective as of the date of the meeting at which the vote is announced. The resulting vacancy shall be filled as described in Article III Section 6 above. SECTION 9. COMPENSATION A. Trustees shall not receive any salary for their services. By resolution of the board a fixed sum and expenses of attendance, if any, may be allowed for attendance at meetings and conferences they are required or authorized to attend. In addition, trustees or former trustees and their qualifying dependents may receive insurance benefits as determined by the board.
A. Each person who was or is made a party or is threatened to be made a party to or is involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a trustee or officer of the cooperative or, being or having been a trustee or officer, he or she is or was serving at the request of the cooperative as a trustee, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis for such proceeding is alleged action in an official capacity while serving as a trustee, officer, employee, or agent or in any other capacity, will be indemnified and held harmless by the cooperative to the full extent permitted by applicable law as then in effect, against all expense, liability and loss (including without limitation, attorney’s fees, judgements, fines, ERISA excise taxes or penalties and amounts to be paid in settlements) actually or reasonably incurred or suffered by such person in connection therewith. Such indemnification will continue as to a person who has ceased to be a trustee or officer and will inure to the benefit of his or her heirs, executors and administrators. No indemnification will be provided under this article to any such person if the cooperative is prohibited by the nonexclusive provisions of the Washington Cooperative Associations Act (RCW 23.86) or other applicable law as then in effect from paying such indemnification. The right to indemnification conferred in this section is a contract right and includes the conditional right to be paid by the cooperative the expenses incurred in defending any such proceeding in advance of its final disposition if approved by the board; provided, however, that the payment of expenses in advance of the final disposition of a proceeding will be made to or on behalf of a trustee or officer only upon delivery to the cooperative of the undertaking, by or on behalf of such trustee or officer, to repay all amounts so advanced if it is ultimately determined that the trustee or officer is not entitled to be indemnified under this article or otherwise, which undertaking may be unsecured and may be accepted without reference to financial ability to make repayment. B. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this article will not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the articles of incorporation, bylaws, agreement, vote of the members or disinterested trustees or otherwise. 17
C. The cooperative may maintain insurance, at its expense, to protect itself and any trustee, officer, employee or other agent of the cooperative or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the cooperative would have the power to indemnify such person against any expense, liability, or loss under the Washington Cooperative Associations Act (RCW 23.86). The cooperative may enter into contracts with any trustee or officer of the cooperative in furtherance of the provisions of this article and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided by this article. D. The cooperative may, by action of the board from time to time, whether before or after the event giving rise to the question of indemnification, provide indemnification and pay expenses in advance of final disposition of a proceeding to employees and agents of the cooperative with the same scope and effect as the provisions of the article with respect to the indemnification and advancement of expenses of trustees and officers of the cooperative or pursuant to the rights granted to, or provided by, the Washington Cooperative Associations Act (RCW 23.86) or otherwise.
MEETINGS OF TRUSTEES SECTION 1. REGULAR MEETINGS The board will regularly meet at the time, date and location within the cooperative service territory determined by the board. Such regular meetings may be held without notice. Any trustee not present at a board meeting at which a regular board meeting date, time or location is changed is entitled to receive notice of the change at least two days before the regular meeting. For good cause, the president may change the date, time or location of a regular board meeting but all trustees are entitled to receive two daysâ€™ notice of such change. A regular meeting of the board may be held without notice other than this bylaw, immediately after and at the same place as the annual meeting of the members. SECTION 2. SPECIAL BOARD MEETINGS The board, the president or at least three trustees may call a special meeting of the board by providing each trustee at least two daysâ€™ notice indicating the date, time, location and purpose of the special board meeting. SECTION 3. CONDUCT OF BOARD MEETINGS A. Meetings may be held with any or all of the board members participating through any means of communications as long as all participants can hear all other participants in the meeting. B. If a quorum is present at any meeting then, in descending priority, the following officers may preside at the board meeting: president, vice president, secretary and treasurer. If no officer is present, the trustees attending the meeting may elect a trustee to preside over the meeting. 20
C. The most recent edition of Robert’s Rules of Order, Newly Revised, will govern all procedural questions at board meetings. SECTION 4. WAIVER OF NOTICE At any time, a trustee may waive notice of any board meeting by delivering to the cooperative a written waiver of notice signed by the trustee and later filed with the board meeting minutes of the cooperative’s records. Unless a trustee upon arriving at a board meeting or prior to the vote on a particular matter objects to the lack of or defective notice of a matter being considered at the board meeting and does not vote for or assent to an objected matter, then the trustee’s attendance at or participation in a board meeting waives notice of the board meeting and any matter considered at the board meeting. SECTION 5. TRUSTEE QUORUM AND VOTING A quorum of trustees is a majority of the trustees in office immediately before a board meeting begins. If a quorum is present at the time a matter is voted or acted upon, and unless the vote of a greater number of trustees is required, then the affirmative vote of a majority of the trustees present is the act of the board. SECTION 6. COMMITTEES A. A board executive committee is comprised of the president, vice president, secretary and treasurer. B. The board may create other committees of the board and appoint trustees to serve on board committees. Each board committee must consist of two or more trustees and serves at the board’s discretion. Except as provided by these bylaws, the president shall be either a voting member or an ex-officio non-voting member of each committee as determined by the board. The board may create committees of the members and appoint members including trustees to serve on the member committees. C. Except as otherwise provided in these bylaws, at least a majority of trustees currently in office must approve the creation of any board or member committee and the appointment of the committee members. Bylaws pertaining to conduct and notice of board meetings will also apply to committee meetings. D. Except as prohibited or limited by law, the articles of incorporation or these bylaws, the board may authorize a committee to exercise board authority for all matters except retirement or refund of capital credits, approval of merger, sale, pledge or transfer of all or substantially all of the cooperative’s assets, election, appointment or removal of trustees or filling any board or board committee vacancy. E. Member committees may act as specified by the board but may not exercise board authority. 22
OFFICERS SECTION 1. REQUIRED OFFICERS A. The cooperative must have the following officers: president, vice president, secretary and treasurer. The board will elect the required officers at the first board meeting after each annual member meeting or as soon after as is reasonably possible and convenient. Election requires an affirmative vote of the majority of trustees in office and will be by secret written ballot without prior nomination. Only trustees may be elected and serve as a required officer. One trustee simultaneously hold the offices of secretary and treasurer but may not execute, acknowledge or verify any document in more than one capacity. B. Subject to removal by the board, each required officer will hold office until his or her successor is elected. The board will fill any vacant required officer’s position for the remaining unexpired portion of the required officer’s term. SECTION 2. DUTIES A. Unless otherwise determined by the board and unless otherwise required by law, the articles of incorporation or these bylaws, the president: 1. Will preside or designate another individual to preside at all board and member meetings. 2. On the cooperative’s behalf, may sign any document properly authorized by the board or members. 3. Will be either a member of or an ex-officio non-voting member of every committee. 24
4. Shall perform all other duties, shall have all other responsibilities and may exercise all other authority prescribed and properly authorized by the board or members. B. Unless otherwise determined by the board and unless otherwise required by law, by the articles of incorporation or these bylaws, the vice president:
SECTION 6. OFFICER COMPENSATION Unless otherwise provided in a bylaw addressing trustee compensation, reimbursement or provision of benefits, and as determined by the board, the cooperative may reasonably compensate, reimburse or provide benefits to any officer.
1. Upon the president’s death, absence, disability or inability to act, will perform the duties and have the powers of the president. 2. Shall perform all other duties, shall have other responsibilities and may exercise all other authority prescribed by the board or members. C. Unless otherwise determined by the board and unless otherwise required by law, the articles of incorporation or these bylaws, the secretary: 1. Shall be responsible for the minutes of board and member meetings. 2. Shall be responsible for authenticating the cooperative’s records. 3. Shall perform all other duties, shall have all other responsibilities and may exercise all other authority prescribed by the board or members. D. Unless otherwise determined by the board and unless otherwise required by law, the articles of incorporation or these bylaws, the treasurer shall perform all duties, shall have all responsibilities and may exercise all authority prescribed by the board or members. SECTION 3. RESIGNATION OR REMOVAL At any time, any required officer may resign by delivering to the board president or secretary an oral or written resignation. Unless the resignation specifies a later effective date, it is effective when received by the president or secretary. If the resignation is effective at a later date, the board may fill the vacant officer position before the later effective date but the successor officer may not take office until the later effective date. At any time the board may remove any officer for any reason. SECTION 4. OFFICER CONTRACT RIGHTS The election or appointment of any officer, by itself, does not create a contract between the cooperative and the officer. An officer’s resignation does not affect the cooperative’s contract rights, if any, with the officer. SECTION 5. AUTHORITY TO EXECUTE DOCUMENTS The board may authorize cooperative trustees, officers, employees, agents or representatives to sign, execute and acknowledge any document on the cooperative’s behalf. 26
COOPERATIVE OPERATION SECTION 1. NON-PROFIT AND COOPERATIVE OPERATION The cooperative must operate on a non-profit basis, must operate on a cooperative basis for the mutual benefit of all members and may not pay interest or dividends on capital furnished by patrons. SECTION 2. ALLOCATING AND CREDITING CAPITAL A. Any member or non-member patron who receives or purchases any cooperative service shall furnish and the cooperative shall receive as capital, all operating margins. Operating margins is defined to be all funds and amounts received from patrons for the cooperative’s provision of a cooperative service that exceed the cooperative’s costs and expenses of providing the cooperative service. For each cooperative service, the cooperative shall annually allocate to each patron, and pay by credit to a capital account for each patron, operating margins from the cooperative service in proportion to the value of the cooperative service used, received or purchased by each patron during the applicable fiscal year. The value of the cooperative service used, received, or purchased shall be based on its relative contribution to the operating margins of the cooperative. Any patron who fails to remain a member for twelve consecutive months will forfeit all rights to patronage capital received or receivable. The board will determine the method to be used to allocate operating margins. B. Funds and amounts, other than operating margins received by the cooperative that exceeded the cooperative’s related costs and expenses, may be allocated as capital 28
credits to patrons in the same manner as the cooperative allocates operating margins to patrons or used by the cooperative as non-allocated capital. C. The cooperative will annually notify each patron of the dollar amount of capital credits allocated or credited to the patron. D. Capital credits may be assigned only upon a patron delivering to the cooperative a written request for such assignment and complying with any other requirements reasonably determined by the board. E. If the cooperative receives written notice and adequate proof of a joint membership termination, conversion or alteration because of the death of one joint member, the cooperative will re-allocate and re-credit to the surviving joint member all capital credits previously allocated and credited to the joint membership. If written notice and adequate proof is received by the cooperative that a joint membership has been otherwise terminated or converted, and unless otherwise instructed by a court or administrative body of competent jurisdiction, the cooperative will re-allocate and re-credit to each joint member one-half of the capital credits previously allocated and credited to the joint membership.
the cooperative prevents a refund to the patron. As determined by the board, such donated capital may either become unallocated equity of the cooperative or be reallocated to other patrons. SECTION 4. REASONABLE RESERVES Based upon the cooperativeâ€™s reasonable needs, the cooperative may accumulate and retain operating margins. As provided in these bylaws, however, the cooperative shall allocate and credit these reasonable reserves as capital credits.
SECTION 3. RETIRING AND REFUNDING CAPITAL CREDITS A. At any time prior to the dissolution or liquidation of the cooperative, the board may authorize the cooperative to and the cooperative shall wholly or partially retire and refund capital credits to patrons and former patrons. The board shall determine the manner and method of retiring and refunding capital credits. B. Upon the death of any natural person patron or former patron and pursuant to a written request from the deceased patronâ€™s legal representative, the cooperative may retire the deceased patronâ€™s capital credits using a manner and method determined by the board. C. If the board determines it is in the best interests of the cooperative, capital credits of dissolved business entities may be retired using a manner and method determined by the board. D. Before retiring and refunding capital credits, the cooperative may deduct from the capital credits any amounts owed to the cooperative by the patron or former patron including any reasonable compounded interest and late payment fee determined by the board. E. The capital credits due a former patron shall be forfeited and donated as a free and voluntary gift in the event the total capital credits due the inactive member are less than a reasonable amount to be fixed by the board from time to time, when the cooperative is unable to locate the patron or any other cause beyond the control of 30
DISPOSITION OF COOPERATIVE ASSETS SECTION 1. DISPOSAL OF COOPERATIVE ASSETS A. Except to secure indebtedness, pursuant to an existing legal obligation or associated with a consolidation or merger, the cooperative shall not sell, lease, exchange, or otherwise dispose of, in any one year, property or assets in excess of ten percent of the value of all property or assets of the cooperative unless all of the following occur: 1. The board appoints three independent appraisers each of whom, within a reasonable period of time, evaluates the cooperative’s assets and renders an appraisal valuing the cooperative’s specified assets. 2. Within a reasonable period of time of receiving the appraisals, the cooperative invites all other electric cooperatives, located primarily in Washington, Idaho or Oregon, to submit proposals to acquire the cooperative’s specified assets or to merge or consolidate with the cooperative. 3. The board approves the transaction. 4. At least two-thirds of the total membership approves the transaction. 5. In proportion to the value of cooperative services used, received or purchased by patrons during the period in which the cooperative owned the specified 32
assets, the cooperative allocates and credits to patrons as capital credits any consideration received for the specified assets in excess of the cooperative’s debts, obligations and liabilities on those specified assets. B. Unless otherwise determined by the members, after the members approve a transaction the board may abandon that transaction. To secure indebtedness, the board may mortgage, pledge, dedicate to repayment or encumber any cooperative asset. SECTION 2. MERGER OR CONSOLIDATION A. In a manner determined by the board that is consistent with this bylaw, the cooperative may consolidate or merge with any other consumer-owned cooperative that provides the same or similar cooperative services. The board must approve an agreement or plan to consolidate or merge stating the following: 1. Terms and conditions of the consolidation or merger. 2. Name of each entity consolidating or merging.
SECTION 3. DISTRIBUTION OF COOPERATIVE ASSETS UPON DISSOLUTION A. Upon the cooperative’s dissolution, the cooperative shall pay, satisfy or discharge all cooperative debts, obligations and liabilities and shall retire and refund, without priority, all capital credits to all patrons and former patrons in proportion to the value or quantity of cooperative services used, received or purchased by each patron or former patron. Unallocated capital shall be reallocated to patrons or former patrons in proportion to their existing allocated capital credits. B. After paying, satisfying or discharging all cooperative debts, obligations and liabilities, to the extent practical, the cooperative shall then distribute gains from selling any appreciated cooperative asset to patrons who used, received or purchased cooperative services during the period in which the cooperative owned the cooperative asset in proportion to the value or quantity of cooperative services used during the period the cooperative owned the cooperative asset. C. Any unclaimed distributions may either be donated to a nonprofit charity or reallocated to other members as determined by the board.
3. Name of the new or surviving entity. 4. Manner and basis, if any, of converting memberships or ownership rights of each consolidating or merging entity into memberships, ownership rights of or payments from the new entity. 5. Number of trustees of the new entity. 6. Date of the new entity’s annual meeting. 7. Names of the new entity’s trustees who will serve until the new entity’s first annual meeting of members. 8. Any other information required by law. B. After the board approves a consolidation or merger agreement, the members shall vote upon such consolidation or merger as described in Article II. Approval of such consolidation or merger shall require the affirmative vote of at least two-thirds majority of at least 25% of the entire membership. C. The new entity trustees named in the consolidation or merger agreement must sign and file articles of consolidation or merger in a manner and stating the information required by law. The cooperative shall comply with all other requirements for consolidation or merger specified by law.
MISCELLANEOUS SECTION 1. BYLAW AMENDMENTS Unless otherwise provided in these bylaws, these bylaws may be adopted, amended or repealed by the affirmative vote of two-thirds of the members constituting a quorum at an annual meeting or special meeting. Any mailing of ballots and notice of member meeting at which bylaw amendments will be considered must contain a copy or summary of the proposed bylaw amendment and a statement that one of the purposes of the balloting will be to vote on such bylaw changes. SECTION 2. GOVERNING LAW These bylaws are governed by and interpreted under the laws of the State of Washington. SECTION 3. TITLES AND HEADINGS All titles and headings of bylaw articles, sections and subsections are for convenience and reference only and do not affect the interpretation of any bylaw article, section or subsection. SECTION 4. PARTIAL INVALIDITY When reasonably possible, every bylaw article, section, subsection, paragraph, sentence, clause or provision must be interpreted in a manner by which that item is valid. The invalidation of any bylaw item by any entity possessing proper jurisdiction and authority which does not alter the fundamental rights, duties and relationship between the cooperative and members, does not invalidate the remaining bylaw items. 36
SECTION 5. CUMULATIVE REMEDIES The rights and remedies provided in these bylaws are cumulative. The cooperative or any member asserting any right or remedy provided in these bylaws does not preclude the cooperative or member from asserting any other rights or remedies provided in these bylaws or by law. SECTION 6. SUCCESSORS AND ASSIGNS To the extent allowed by law the duties, obligations and liabilities imposed on the cooperative or any member by these bylaws are binding upon the successors and assigns of the cooperative or member and the rights granted to the cooperative by these bylaws inure to the benefit of the cooperativeâ€™s successors and assigns. The binding nature of the duties, obligations and liabilities imposed by these bylaws on the successors and assigns of the cooperative and any member does not relieve the cooperative or member of the duties, obligations and liabilities imposed by these bylaws upon the cooperative or member. SECTION 7. WAIVER The failure of the cooperative to assert any right or remedy provided in these bylaws does not waive the right or remedy provided in these bylaws. SECTION 8. LACK OF NOTICE To the extent allowed by law and the articles of incorporation, the failure of any member or trustee to receive notice of any meeting action of vote does not affect or invalidate any action or vote taken by the members of the board.
10110 W HALLETT RD.
SPOKANE, WA 99224