https://capitalelec.com/bylaws

 

 

7401 Yukon Drive • PO Box 730 Bismarck, North Dakota 58502-0730 (701) 223-1513 

capitalelec.com 

BY-LAWS 

As Amended June 20, 2023 

Effective January 1, 2024

Statement of Non-Discrimination 

Capital Electric Cooperative, Inc. is a recipient of federal financial assistance  from the U.S. Department of Agriculture (USDA). 

In accordance with Federal civil rights law and USDA civil rights regulations/ policies, USDA, its Agencies, offices, and employees, and institutions  participating in or administering USDA programs are prohibited from  discriminating based on race, color, national origin, religion, sex, gender  identity/expression, sexual orientation, disability, age, marital status, family/ parental status, income derived from a public assistance program, political  beliefs, or reprisal/retaliation for prior civil rights activity, in any program or  activity conducted or funded by USDA; not all bases apply to all programs;  remedies and complaint filing deadlines vary by program or incident. 

Persons with disabilities who require alternative means of communication  for program information (e.g., Braille, large print, audiotape, American Sign  Language) should contact the responsible Agency or USDA TARGET Center  at (202)720-2600 (voice and TTY) or contact USDA through the Federal Relay  Service at (800)877-8339. Program information may be made available in  languages other than English. 

To file a program discrimination complaint, complete the USDA Program  Discrimination Complaint Form (AD-3027) found online at http://www.ascr. usda.gov/complaint_ filing_cust.html(link is external) and at any USDA  office or write a letter addressed to USDA and provide all of the information  requested in the form. To request a copy of the complaint form, call  (866) 632-9992. Submit your completed form or letter to USDA by: 

(1) Mail:U.S. Department of Agriculture 

Office of the Assistant Secretary for Civil Rights 

1400 Independence Avenue, SW 

Washington, D.C. 20250-9410 

(2) Fax: (202) 690-7442 

(3) Email: program.intake@usda.gov 

Capital Electric Cooperative is an equal opportunity provider,  employer, and lender.

Capital Electric Cooperative 

Bylaws Effective January 1, 2024 

PREAMBLE 

The goal of Capital Electric Cooperative, Inc. (hereinafter “Cooperative”) is to  provide affordable and reliable electric service in the safest manner possible  to all of its members. 

BYLAWS 

ARTICLE I 

MEMBERSHIP 

For the purposes of these bylaws, a “Person” is defined as an individual  human being, a joint membership, or any legally recognized entity  (an “Entity”), including, without limitation, whether foreign or domestic:  corporations; profit and non-profit; unincorporated associations; business  trusts; estates; partnerships; limited partnerships; limited liability companies;  trusts; and all other legally recognized entities, associations, or organizations  under North Dakota law. A Person also includes all municipalities, states, and  agencies thereof; the United States of America; and foreign governments or  any agencies or divisions thereof. 

Section 1. Requirements for Membership  

(a) Membership in the Cooperative can be attained by a Person. Membership  in the Cooperative of a Person will become effective upon receipt of  electric service from the Cooperative, provided that applicant has first: 

1. Made a recordable application for membership. If the Person is an  individual or joint member, the Person(s) must be of legal age and,  at the time the Person(s) becomes a member, have the capacity to  enter into contracts. If the Person is an Entity, the Entity must be duly  

organized and existing, pursuant to North Dakota law, with authority to  enter binding contracts at the time the Entity becomes a member; and  

2. Agreed to purchase from the Cooperative electric service as hereinafter  specified; and 

3. Agreed to comply with and be bound by the Articles of Incorporation,  bylaws, and policies adopted by the Board of Directors as they may be  amended from time to time. 

(b) No Person may hold more than one membership in this Cooperative, even  if the Person is a member with respect to two or more service locations,  and no membership shall be transferable, except as provided in these  bylaws. 

(c) Only one Person is eligible for membership per service location. 

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(d) If a Person uses electric service at a service location prior to completing  a membership application, or after an application is submitted on their  behalf, the Person agrees to become a member of the Cooperative and  agrees to the terms and conditions. 

Section 2. Evidence of Membership 

(a) Membership in this Cooperative shall be evidenced by purchase of and  payment for electric service from the Cooperative, and by becoming listed  on the records of the Cooperative as a member. 

Section 3. Individual Membership 

(a) Where an individual membership exists, either the member, or the  member’s spouse, may vote, serve on committees, sign a petition, and/or  serve on the Board of Directors, but not in the same instance. The serving  by either spouse shall constitute the one instance of the member for each  activity. 

Section 4. Joint Membership  

(a) The Cooperative will not admit new joint members. Married Persons  occupying the same location who are joint members as of December  31, 2023, and remain joint members, are deemed to have a “joint  membership” and may continue to be joint members, subject to the  following terms and conditions: 

1. Married Persons occupying the same service location may hold  an existing joint membership subject to their compliance with the  requirements set forth in Section 1 of this Article. The term “member”  as used in these bylaws shall be deemed to include married Persons  holding a joint membership, and any provisions relating to the rights  and liabilities of membership shall apply equally to the holders of a joint  membership. Without limiting the generality of the foregoing, the effect of  the hereinafter specified actions by or in respect to the holders of a joint  membership is as follows: 

 i. The presence at the meeting of either or both shall be regarded as  the presence of one member and shall have the effect of constituting  a joint waiver of notice of the meeting;  

 ii. The vote of either separately or both jointly shall constitute one vote; 

iii. A waiver of notice signed by either or both shall constitute a joint  waiver;  

iv. Notice to either shall constitute notice to both; 

v. Explusion of either shall terminate the joint membership; 

vi. Withdrawal of either shall terminate the joint membership 

vii. A joint member otherwise qualified is eligible to serve as a member of  the Board of Directors, regardless of whether the other joint member  is eligible to serve as a Director. If both joint members are otherwise  qualified to serve as a Director, then either joint member, but not both  joint members simultaneously, is eligible to serve as a Director.  

Section 5. Conversion of Joint Membership 

(a) Upon the death of either spouse who is a party to the joint membership,  such membership shall be held solely by the survivor, provided, however,  that the estate of the deceased joint member shall not be released from  any debts due to the Cooperative. 

(b) Upon the divorce or a court order of the parties of a joint membership, and  notice of such divorce or court order to the Cooperative, such membership  shall be held solely by the one who continues to purchase electric service  from the Cooperative at the same place of service, provided, however, that  the former joint member spouse shall not be released from any debts due  to the Cooperative prior to the actual notification to the Cooperative of the  divorce or court order.  

(c) Capital credits allocated prior to the divorce or court order, that have not  been retired as of the date of notice to the Cooperative, shall be divided  as set forth in the divorce judgment or court order. If the divorce judgment  or court order is silent, the allocated capital credits, that have not been  retired as of the date of notice to the Cooperative, shall be divided equally  between the joint members. 

1. If both joint members continue legal use of the electric service at the  service location at which the joint members had used electric service,  then the joint membership converts to a membership in the name of the  joint member as determined by the Cooperative in the discretion of the  Board of Directors. 

(d) The death of the first joint member will not result in the early retirement of  capital credits, and the surviving joint member will continue to own the  capital credits previously jointly owned, in the surviving joint member’s  name, until they are retired as provided herein. Capital credits held by joint  members retained by the surviving joint member will be subject to all rights  and obligations that apply to capital credits held by individual members. 

Section 6. Service Deposits and Deductions  

(a) The Board of Directors may require a charge and/or a service deposit for  each service connection, extension or other available service, pursuant to  reasonable policies adopted by the Board. Before any funds are paid by  the Cooperative to a member or former member, the amount of any debts  owing from the member or former member to the Cooperative shall be  deducted there from.

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Section 7. Purchase of Electric Service  

(a) Each member shall, as soon as electric service shall be available,  purchase from the Cooperative electric service used on the premises  and shall pay therefore at monthly rates which shall from time to time  be fixed by the Board of Directors, provided, however, that the Board of  Directors may limit the amount of electric service which the Cooperative  shall be required to furnish to any one member. Each member shall pay  to the Cooperative such minimum amount per month, regardless of the  amount of electric service consumed, as shall be fixed by the Board of  Directors from time to time. Each member shall also pay all amounts owed  by the member to the Cooperative when the same shall become due and  payable. 

(b) The Cooperative neither insures, guarantees, nor warrants that it will  provide sufficient, continuous, or non-fluctuating electric service. The  Cooperative will not be liable for any damages, costs, or expenses,  including attorney’s fees or legal expenses, caused by less than sufficient,  non-continous, or fluctuating electric service. 

Section 8. Termination of Membership 

(a) Membership in this Cooperative shall automatically terminate if the  member: 

1. Dies, legally dissolves, or legally ceases to exist, unless the member is a  joint member; or 

2. Is a joint member and both members die; or 

3. Ceases to purchase and maintain electric service from the Cooperative;  or 

4. Successfully withdraws from membership in compliance with policies  adopted by the Board of Directors.  

(b) The Board may, by the affirmative vote of not less than two-thirds of all the  members of the Board of Directors, take appropriate action against any  member who fails to comply with any of the provisions of the Articles of  Incorporation, bylaws, or policies adopted by the Board of Directors.  

(c) Upon notice of dissolution of an Entity, such membership and allocated  capital credits shall be held by the remaining partner or partners,  members, or shareholders, as identified to the Cooperative by appropriate  Entity action. 

(d) For partnership members, unless otherwise determined by the Board of  Directors, a partnership member continuing to use electric service is not  automatically suspended upon the death of any partner or following any  other alteration in the partnership. A partner leaving a partnership member  

remains liable to the Cooperative for any amounts owed to the Cooperative  by the partnership member at the time of the partner’s departure.  

(e) Upon the termination in any manner of a membership, the member shall  be entitled to a refund of any refundable deposits or credit balance still  held by the Cooperative as of the date of termination, less any amounts  due to the Cooperative; but neither the member nor the member’s estate  shall be released from any debts then remaining due the Cooperative. 

(f) In the event a member’s final net refund amount is less than the  Cooperative’s administrative costs required to provide payment to the  member, the member’s balance may be applied to permanent Cooperative  equity. The Board of Directors shall have discretionary power to establish  the administrative cost threshold. 

ARTICLE II 

RIGHTS AND LIABILITIES OF MEMBERS 

Section 1. Property Interest of Members  

(a) Upon dissolution, after (a) all debts and liabilities of the Cooperative  have been paid, and (b) all capital furnished through patronage is retired  as provided in these bylaws, the remaining property and assets of this  Cooperative shall be distributed among members and former members  within the twenty years preceding such dissolution in the proportion  which the aggregate patronage of each bears to the total patronage of  all members within the twenty years preceding such dissolution, unless  otherwise provided by law. 

Section 2. Nonliability for Debts of the Cooperative  

(a) The personal and real property of the members shall be exempt from the  execution or other liability for the debts of the Cooperative and no member  shall be individually liable for or responsible for any debts or liabilities of  the Cooperative. 

ARTICLE III 

MEETINGS OF MEMBERS 

Section 1. Types of Meetings 

(a) Meetings of members shall be either an Annual Meeting or a Special  Member Meeting. 

Section 2. Annual Meeting  

(a) The Annual Meeting of the members shall be held each calendar year at  such date, time, and location in the County of Burleigh or the southern  ten townships of Sheridan County, State of North Dakota, as shall be 

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designated in the notice of meeting for the purpose of electing directors,  passing upon reports for the previous year and transacting such other  business as may come before the meeting. Failure to hold the annual  meeting shall not work a forfeiture or dissolution of the Cooperative. 

Section 3. Special Member Meeting  

(a) Calling of a Special Member Meeting. The Cooperative must hold a  special meeting of its members (a “Special Member Meeting”) at any  place within the County of Burleigh or the southern ten townships of  Sheridan County, State of North Dakota, at a date, time, and location to be  determined by the Board of Directors, but within 120 days as follows: 

1. Board Initiated: A valid request initiated by the Board of Directors  (“Board Initiated”) occurs upon satisfying one of the following criteria: 

 i. A vote of the majority of the Board of Directors; or 

 ii. Upon a written request signed by three Directors; or 

iii. By the President; or 

iv. Upon Receipt of a valid Member initiated request as defined below. 

2. Member Initiated: A valid request initiated by members (“Member  Initiated”) must satisfy each of the following requirements: 

 i. Be in writing; and 

 ii. Must be signed with original signatures and dated by at least 10%  of the membership as of the record date within 60 days following the  date of the first signature card; and 

iii. On each page of signatures, the request must describe the matter  or matters to be considered, voted, or acted upon at the Special  Members Meeting. 

iv. Member initiated requests must be provided to the Board of Directors  within 30 days of receipt of satisfying the requirements of a valid  member initiated request. 

Section 4. Notice of Member’s Meetings 

(a) Delivery of Notice: By or at the direction of the Secretary, or upon a  default in duty by the Secretary, by the persons calling the meeting, the  Cooperative shall deliver written notice of any Annual Meeting or Special  Member Meeting to all members at least 10 days, but no more than 45  days prior to the meeting. Notice of member’s meeting must state the  the date, time, and location of the meeting, and if business other than  that listed in Section 8 of this article is to be transacted, the purpose or  purposes for which the meeting is called.  

(b) Evaluation of Member Initiated request: The Board in its sole discretion  must evaluate whether the member initiated request complies with the  foregoing provisions so as to require a Special Member Meeting. 

Section 5. Means of Notice 

(a) Notice may be delivered: 

1. Personally, or 

2. By mail; or 

3. By electronic means of communication 

(b) Time of Delivery; Effect of Non-Receipt: Unless these bylaws provide  otherwise, notice of a meeting is delivered: 

1. If personally delivered, when delivered to the member personally;  

2. If mailed, when deposited in the United States mail in a sealed envelope  with pre-paid postage affixed and addressed to a member at the  member’s address shown on Cooperative records; or 

3. If delivered electronically, when sent by electronic means addressed  to a member at the member’s e-mail address shown on Cooperative  records. 

(c) Delivery of notice to one of two joint members constitutes deliver of notice  to the joint member. 

(d) The failure to receive a notice of meeting sent as allowed by this section  shall not affect the validity of any action taken at the meeting. 

Section 6. Quorum  

(a) Seventy-five members shall constitute a quorum.  

(b) In the case of a joint membership, the presence at the meeting of either of  the joint members will be regarded as the presence of one member. 

(c) A member represented by submitted paper or electronic absentee ballots  may be counted in computing a quorum for a member meeting but only on  those motions or resolutions as to which an absentee vote is authorized by  the Board of Directors and submitted. 

(d) If less than a quorum is present at any meeting, a majority of those present  in person may adjourn the meeting.  

Section 7. Voting 

(a) Each member shall be entitled to one vote and no more upon each matter  submitted to a vote.

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(b) Where an individual membership exists, either the member or the  member’s spouse may vote, unless the member objects prior to the  issuance of ballots, in which case only the member will be entitled to  vote. At the annual meeting a ballot will be issued to the first of the two to  register at the registration table, assuming the vote has not already been  cast via mail or electronically. The vote of either shall constitute the one  vote of the member. Individual members represented by a spouse will be  considered and counted in determining whether a quorum exists. 

(c) Where married persons hold a joint membership, the vote of either  separately, or both jointly, shall constitute one joint vote.  

(d) An entity with a unique employer identification number (EIN) may be  represented by any one of its principle officers, or the principal officers can  provide the Cooperative written notice of its authorized delegate to cast  its one member vote upon each matter submitted to any vote. Any human  Person may represent no more than one such member, but may also vote  as an individual if the authorized delegate is a member individually. Under  no circumstances may a Person cast more than two votes. 

(e) Absentee Voting: In connection with any matter to be voted on by  the members at a member meeting, absent members may mail or  electronically submit votes (collectively “absentee votes”) when  specifically authorized in advance by resolution of the Board of Directors.  Absentee votes shall be submitted to the Cooperative in the manner  prescribed by the Board of Directors in the notice of applicable member  meeting, including, but not limited to, any method and timing for delivery  of such absentee votes to the Cooperative in advance of the applicable  member meeting as may be permitted by applicable law. A member  who submits an absentee vote on a motion, election, or resolution in  accordance with this provision in advance of the applicable member  meeting shall not be entitled to cast an additional vote, or change their  absentee vote, on the same motion, election, or resolution should such  member appear in person at the applicable meeting and, in the event of  such appearance in person, such member shall notify the Cooperative at  such meeting that such member previously submitted an absentee vote so  that such member will not be double-counted in calculating the number of  votes cast on, or the presence of a quorum with respect to, the applicable  motion, election or resolution. 

(f) Proxy Voting: At all meetings of members, voting by proxy shall not be  allowed, except as provided in paragraph (b) or (d) of this section. 

(g) All questions will be decided by vote of a majority of the members voting  thereon, except as otherwise provided by law, the Articles of Incorporation,  or these bylaws. 

Section 8. Order of Business  

The presiding officer may adopt any order of business which provides an  opportunity for full consideration of all matters to come before the meeting,  subject to any proper action by the members assembled to change the order  of business. Unless such a different order of business is adopted by the  President, or the members assembled, the order of business at the annual  meeting of the members, and so far as possible at all other meetings of the  members, shall be as follows: 

(a) Determine the existence of a quorum; 

(b) Read the notice of the meeting and proof of service of notice thereof, or  the waiver or waivers of notice of the meeting, as the case may be; 

(c) Read unapproved minutes of the previous meetings of the members and  the taking of necessary action thereon; 

(d) Presentation and consideration of, and acting upon, reports of officers,  directors, and committees; 

(e) Election of directors; 

(f) Unfinished business; 

(g) New Business; and 

(h) Adjournments. 

Section 9. Voting Districts  

The territory served or to be served by the Cooperative shall be divided into  three (3) districts: one to be called “District 1,” one to be called “District 2,”  and one to be called “District 3,” to be defined as follows: 

DISTRICT 1 

Township 139-75 Driscoll Burleigh County Township 139-76 Sterling Burleigh County Township 139-77 McKenzie Burleigh County Township 138-75 Thelma Burleigh County Township 138-76 Taft Burleigh County Township 138-77 Logan Burleigh County Township 138-78 Boyd Burleigh County Township 138-79 Apple Creek Burleigh County Township 138-80 Lincoln Burleigh County Township 137-75 Wild Rose Burleigh County Township 137-76 Long Lake Burleigh County Township 137-77 Morton Burleigh County Township 137-78 Telfer Burleigh County Township 137-79 Missouri Burleigh County Township 137-80 Fort Rice Burleigh County Township 136-76 Dana Emmons County Township 136-77 Buchanan Valley Emmons County

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Township 136-78 Emmons County Township 136-79 Emmons County 

DISTRICT 2 

Township 146-74 Goodrich Sheridan County Township 146-75 Denhoff Sheridan County Township 145-74 Mauch Sheridan County Township 145-75 Sperry Sheridan County Township 144-75 Hazel Grove Burleigh County 

Township 144-76 Florence Lake Burleigh County Township 143-75 Phoenix Burleigh County Township 143-76 Richmond Burleigh County Township 142-75 Harriet Burleigh County Township 142-76 Wing Burleigh County Township 142-77 Rock Hill Burleigh County Township 141-75 Lein Burleigh County Township 141-76 Lyman Burleigh County Township 141-77 Trygg Burleigh County Township 140-75 Clear Lake Burleigh County Township 140-76 Christiana Burleigh County Township 140-77 Sibley Butte Burleigh County Township 140-78 Frances Burleigh County Township 140-79 Naughton Burleigh County Township 139-78 Menoken Burleigh County Township 139-79 Gibbs Burleigh County Township 139-80 (East ½) Hay Creek Burleigh County 

DISTRICT 3 

Township 146-76 Lamont Sheridan County Township 146-77 McClusky Sheridan County Township 146-78 Pickard Sheridan County Township 145-76 Whittake Sheridan County Township 145-77 John’s Lake Sheridan County Township 145-78 Edgemont Sheridan County Township 144-77 Schrunk Burleigh County Township 144-78 Steiber Burleigh County 

Township 144-79 Wilson Burleigh County Township 143-77 Canfield Burleigh County Township 143-78 Estherville Burleigh County Township 143-79 Grass Lake Burleigh County Township 142-78 Ghylin Burleigh County Township 142-79 Ecklund Burleigh County Township 142-80 Painted Woods Burleigh County Township 142-81 Painted Woods Burleigh County Township 141-78 Cromwell Burleigh County Township 141-79 Crofte Burleigh County Township 141-80 Glenview Burleigh County Township 141-81 Riverview Burleigh County Township 140-80 Burnt Creek Burleigh County 

Township 140-81 Riverview Burleigh County Township 139-80 (West ½) Hay Creek Burleigh County Township 139-81 Hay Creek Burleigh County 

ARTICLE IV 

DIRECTORS 

(a) Section 1. General Powers The business and affairs of the Cooperative  shall be managed by a board of nine directors which shall exercise all  the powers of the Cooperative except such as are by law, by the Articles  of Incorporation or by these bylaws conferred upon or reserved to the  members.  

(b) The board of Directors shall appoint a Manager of the Cooperative. Section 2. Qualifications and Tenure  

(a) Only Persons meeting the following eligibility requirements may be  nominated, elected, or serve as a Director:  

1. Required criteria: To be nominated, elected, or serve as a Director of the  Cooperative, a Person must: 

 i. Be an individual member of the Cooperative or the spouse of an  individual member, or an individual that is part of a joint membership;  and 

 ii. Be receiving power from the Cooperative at the member’s primary  residence, located in the Director district in which the Director  represents or is seeking to represent; and 

iii. Remain in good standing under the Articles, bylaws, and policies of  the Cooperative, as they may be amended; and 

iv. Have been a member for at least 270 days. 

2. For purposes of these bylaws, a member can only have one primary  residence and “primary residence” shall mean: 

 i. The address of the member Director, or member seeking to represent  a Director district, listed on the member’s North Dakota driver’s  license or state issued identification card; and 

 ii. The address of the member Director, or member seeking to  represent a Director district, listed on the voting rolls for the voting  precinct where the member was authorized by law to vote in the  most recent local, state, or federal election or, in the event the  member has changed residence (e.g. moved) prior to the next local, 

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state, or federal election, the member provides valid supplemental  identification authorized by the nominating committee that supports  the location of where the member will be authorized to vote at the  next local, state, or federal election; and 

iii. To the extent of any conflict between items 2i. and 2ii. within this  definition, item 2ii. shall prevail. 

3. Disqualifying Criteria: To be nominated, elected or serve as a Director of  the Cooperative, a Person must not:  

 i. Currently be, or within the immediate previous three year period,  have been a director, officer, or employee of any Entity, other than  an electric cooperative or affiliate of an electric cooperative, that  engages in a competing enterprise or a business selling electric  energy, services, or supplies; or financially interested in, a business  primarily engaged in selling electrical fixtures, services, or supplies  to the Cooperative or members of the Cooperative; or  

 ii. Have a close family member who currently is, or within the previous  three years has been, a director or corporate officer of any Entity  described in item 3i. above, unless otherwise approved by vote of a  majority of all of the disinterested directors; or  

iii. Be currently employed or have been employed by the Cooperative in  the preceded 3 years; or  

iv. Have ever been convicted of any criminal act constituting a felony  under the law of jurisdiction in which the conviction occurred.  

4. No current Director will be considered for employment at the  Cooperative. 

5. Definitions: For the purpose of this article: 

 i. “Close Family Member” means a member’s spouse, parents,  children, and grandchildren (including legally adopted children and  grandchildren). 

6. Upon establishment of the fact that a Director is holding office in  violation of any of the foregoing provisions, it shall immediately become  incumbent upon the Director to resign or the Board of Directors to  remove such Director from office. 

7. Nothing contained in this section shall affect in any matter whatsoever  the validity of any action taken at any meeting of the Board of Directors,  unless such action is taken with respect to a matter in which one or  more of the Directors have an undisclosed interest adverse to that of the  Cooperative. 

Section 3. Nominations and Elections 

(a) Nominations Committee  

1. It shall be the duty of the Board of Directors to appoint, not less than  120 days nor more than 180 days before the date of the meeting of the  members at which Directors are to be elected, a nominations committee  consisting of not more than eleven members who shall be selected from  each of the districts so as to ensure equitable representation.  

2. No current member of the Board of Directors may serve on such a  nominations committee.  

3. The nominations committee shall request information from potential  candidates and certify the nominations have met the qualifications set  forth in the Cooperative’s bylaws and board policies. The committee  shall make a recommendation of each candidate they deem acceptable  to be nominated.  

4. It is recommended that at least two candidates be nominated from each  district. 

5. A majority of the members on the nominating committee shall constitute  a quorum, provided, that, if less than such majority of the Directors is  present at said meeting, a majority of the Directors present may adjourn  the meeting;  

6. The nominations committee shall prepare and post at the principal office  of the Cooperative not less than 65 days before the meeting a list of  nominations for Directors.  

(b) Nominations by Petition 

1. Any fifteen or more members, or spouses of individual members, acting  together may make other nominations by petition not less than 55 days  prior to the meeting and the Secretary shall post such nominations at  the same place where the list of nominations made by the nominations  committee is posted.  

2. The Secretary shall serve with the notice of the meeting a statement of  the number of Directors to be elected and the names and districts of the  candidates. The names shall be arranged by districts and shall specify  separately the nominations made by the committee on nominations and  also the nominations made by petition, if any.  

i. The members may, at any meeting at which a Director or  Directors are removed, elect a successor or successors thereto  without compliance with the foregoing provisions with respect to  nominations, except that the new Director must meet all qualifications  required of a Director as listed in section 2 of this article, as verified  prior to the meeting, and reside in the same district as the Director  where the vacancy occurs. Notwithstanding anything contained in 

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this section, failure to comply with any of the provisions of this section  shall not affect in any manner whatsoever the validity of any election  of Directors. 

(c) Election of Directors  

1. Election of Directors shall be by ballot.  

2. The ballots shall list the candidates nominated by the nominations  committee and by petitions, if any, arranged by districts.  

3. Each member of the Cooperative shall be entitled to vote for one  candidate from “District 1,” one candidate from “District 2,” and one  candidate from “District 3.”  

4. The candidate receiving the highest number of votes cast for the  candidates in “District 1,” “District 2,” and “District 3” shall be deemed  to be elected from that district.  

5. A Director shall be elected for a three-year term, or remaining unexpired  term, and shall serve until the successor has been elected and  qualified. 

(d) Election Committee 

1. The presiding officer at each Annual Meeting of the members shall  appoint an election committee to consist of three members, or spouses  of individual members from “District 1,” three members or spouses of  individual members, from “District 2,” and three members, or spouses  of individual members, from “District 3” present at such meeting. In  the event of a tie vote in an election of Directors, the election shall be  determined by the flip of a coin. 

Section 4. Removal of Directors by Members  

(a) Any member may bring charges against a Director by filing such charges  in writing with the Secretary, together with a petition signed by at least  ten percent of the members, and request the removal of such Director by  reason thereof. 

(b) The Director against whom such charges have been brought shall be  informed in writing of the charges at least twenty days prior to the meeting  at which the charges are to be considered and have an opportunity at the  meeting to be heard in person or by counsel and to present evidence in  respect to the charges; and the person or persons bringing the charges  against the Director shall have the same opportunity.  

(c) The question of the removal of such Director shall be voted upon at  the next regular or special meeting of the members and any vacancy  created by such removal may be filled by vote of the members at such  meeting without compliance with the foregoing provisions with respect to  nominations; provided that the Director meets all qualifications required  

of a Director as listed in section 2 of this article, as verified prior to the  meeting, and must reside in the same district as the Director where the  vacancy occurs. 

Section 5. Vacancies 

(a) Subject to the provisions of these bylaws with respect to the filling of  vacancies caused by the removal of Directors by the members, a vacancy  occurring on the Board of Directors shall be filled by the affirmative vote of  a majority of the remaining Directors for the unexpired portion of the term  of the vacating Director.  

(b) The member elected as Director to fill the vacancy must reside in the  same district as the Director to whose office is vacant and must meet all  qualifications required of a Director. 

Section 6. Compensation  

(a) Directors shall not receive any salary for their services as Directors, but  by resolution of the Board of Directors, a reasonable fixed stipend and  expenses of attendance, if any, may be allowed for attendance at each  area, regional, national, educational, and other meetings on behalf of the  Cooperative where attendance is specifically authorized by action of the  Board of Directors.  

(b) No close relatives of a Director shall receive compensation for serving the  Cooperative, unless the payment and amount of compensation shall be  authorized by a vote of the members, or the service by such close relative  shall have been certified by action of the other members of the Board of  Directors as an emergency measure.  

(c) An additional stipend may be paid to the officers of the Cooperative by  resolution of the Board of Directors for additional time spent on duties  outside regular Board responsibilities. 

ARTICLE V 

MEETING OF DIRECTORS 

Section 1. Meetings 

(a) Following the Annual Meeting, a reorganizational meeting of the Board  of Directors shall be held without notice other than this bylaw, at a place  agreed upon by the Board of Directors, prior to the next regular meeting  of the Board of Directors, for the purpose of re-organizing the Board of  Directors.  

(b) A regular meeting of the Board of Directors shall also be held monthly at  such time and place in the State of North Dakota as the Board of Directors  may provide. 

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Section 2. Special Meetings  

(a) Special meetings of the Board of Directors may be called by: 

1. The President, or 

2. By any three Directors, or  

3. By any person authorized to do so by prior action of the Board  of Directors 

(b) The person or persons calling the meeting shall fix the date, time and  location of the meeting and shall cause notice of such meeting to be  given. 

Section 3. Notice of Directors Meetings  

(a) Reasonable notice of the time and place of any special meeting of the  Board of Directors shall be given to each Director.  

Section 4. Quorum  

(a) A majority of the Directors in office shall constitute a quorum, provided,  that, if less than such majority of the Directors is present at said meeting,  a majority of the Directors present may adjourn the meeting; and provided  further, that the Secretary shall cause notice to any absent Director of the  time and place of any adjourned meeting.  

(b) The act of a majority of the Directors present at a meeting at which a  quorum is present shall be the act of the Board of Directors. 

Section 5. Manner of Acting  

(a) Any action taken at a meeting of the Directors may be taken without a  meeting if a writing setting forth and approving the action taken is signed  by all of the Directors entitled to vote upon such action. In such cases,  such consent shall have the same force and effect as if a meeting had  been held. 

Section 6. Policies  

(a) The Board of Directors shall have power to make and adopt policies, 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.  

(b) The Board of Directors shall have the power to establish reasonable  classifications of business done with members, according to the type or  nature thereof, for the purpose of regulating rates and charges for electric  service and allocating capital credits to members. 

ARTICLE VI 

OFFICERS 

Section 1. Number  

(a) The principal officers of the Cooperative shall be President, Vice-President,  Secretary-Treasurer, and Assistant Secretary-Treasurer, and such other  officers as may be determined by the Board of Directors.  

(b) Each principal officer must be a current Director of the Cooperative. Section 2. Election and Term of Office  

(a) The principal officers shall be elected annually by and from the Board of  Directors at the reorganizational meeting of the Board of Directors.  

(b) Each principal officer shall hold office until a successor shall have been  elected and shall have qualified, or until the officer is removed from office  as approved by these bylaws.  

Section 3. Removal of Principal Officers and Agents  

(a) Any principal officer or agent elected or appointed by the Board of  Directors may be removed by the Board of Directors whenever in its  judgment the best interest of the Cooperative will be served.  

(b) The officer against whom such charges have been brought shall be  informed, in writing, of the charges of least twenty days prior to the  meeting at which the charges are to be considered and shall have an  opportunity at the meeting to:  

1. Be heard in person or by counsel; and  

2. To present evidence in respect of the charges; 

(c) The person or persons bringing the charges against the officer shall have  the same opportunity.  

(d) The question of the removal of such officer shall be voted upon at the next  regular or special meeting of the Board of Directors. 

Section 4. Vacancies  

(a) A vacancy in any office may be filled by the Board of Directors for the  unexpired portion of the term.

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Section 5. President 

The President shall: 

(a) Be the principal executive officer of the Cooperative and, unless otherwise  determined by the members of the Board of Directors, shall preside at all  meetings of the members and the Board of Directors. 

(b) Sign any deeds, mortgages, deeds of trusts, notes, bonds, contracts,  or other instruments executed on behalf of the Cooperative, except in  cases in which the signing and execution thereof shall be delegated by  the Board of 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 

(c) Perform all duties incident to the office of President and such other duties  as may be prescribed by the Board of Directors. 

Section 6. Vice-President 

(a) In the absence of the President, or in the event of the President’s inability  or refusal to act, the Vice-President shall perform the duties of the  President, and when so acting, shall have all the powers of and be subject  to all the restrictions upon the President. 

(b) The Vice-President shall also perform such other duties as assigned by  the Board of Directors. 

Section 7. Secretary-Treasurer. (Assistant Secretary-Treasurer) The Secretary-Treasurer shall: 

(a) Cause the minutes of the meetings of the members, the Board of Directors,  and any special executive committee to be kept in one or more books  provided by the Cooperative for that purpose; 

(b) Cause all notices to be duly given in accordance with these bylaws or as  required by law; 

(c) Affix the seal of the Cooperative 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; 

(d) Supervise the custody of the records and funds of the Cooperative; 

(e) Cause to be kept a register of the names and mailing addresses of all  members of the Cooperative; 

(f) Perform all duties incident to the office of Secretary-Treasurer and such  other duties as may be assigned by the Board of Directors. 

Section 8. Assistant Secretary-Treasurer 

(a) In the absence of the Secretary-Treasurer, or in the event of the Secretary  -Treasurer’s inability or refusal to act, the Assistant Secretary-Treasurer  shall perform the duties of the Secretary-Treasurer, and when so acting,  shall have all the powers and be subject to all the restrictions upon the  Secretary-Treasurer. 

(b) The Assistant Secretary-Treasurer shall also perform such other duties as  assigned by the Board of Directors. 

Section 9. Manager  

(a) The Manager shall perform such duties and shall exercise such authority  as the Board of Directors may vest in the Manager. 

Section 10. Bonds of Officers 

(a) Any officer or agent of the Cooperative charged with the responsibility  for the custody of any of its funds or property shall be covered by liability  insurance and surety bonding in such sum as the Board of Directors shall  determine.  

(b) The Board of Directors may also require any other officer, agent or  employee of the Cooperative to be covered by liability insurance or surety  bonding in such amount as it shall determine. 

Section 11. Reports  

(a) One or more of 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. Such reports shall set forth the condition of the  Cooperative at the close of such fiscal year. 

ARTICLE VII 

COOPERATIVE NON-PROFIT OPERATION 

Section 1. Cooperative Operation  

(a) The Cooperative shall at all times 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 or nonmembers . 

Section 2. Patronage Capital in Connection with Furnishing Electric  Service 

(a) In the furnishing of electric service, the Cooperative operations shall be so  conducted that all members will, through their patronage, furnish capital  for the cooperative.

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(b) In order to induce patronage and to assure that the Cooperative will  operate on a non-profit basis, the Cooperative is obligated to account on  a patronage basis to its members for all amounts received and receivable  from the furnishing of electric service in excess of operating costs and  expenses properly chargeable against the furnishing of electric service,  which operating costs and expenses may, at the discretion of the Board of  Directors, include any or all of the operating deficits of prior years. 

(c) All 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.  

(d) The Cooperative is obligated to pay all amounts in excess of operating costs  and expenses by credits to a capital account for each member. 

(e) 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, furnished by each member is clearly reflected and credited in an  appropriate record to the capital account of each member.  

(f) The Cooperative shall within a reasonable time after the close of the  fiscal year notify each member of the amount of capital so credited to the  member’s account.  

(g) All 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.  

(h) The Board of Directors shall have the power, at its discretion, to determine  the fiscal year to which should be allocated amounts received and  receivable from the furnishing of electrical service and to which should be  allocated operating costs and expenses.  

(i) All other amounts received by the Cooperative from its operations in excess  of costs and expenses shall, insofar as permitted by law, be (a) used to  offset any losses incurred during the current or any prior fiscal year; and (b)  to the extent not needed for that purpose, may be allocated to its members  on a patronage basis and any amount so allocated shall be included as a  part of the capital credited to the accounts of members, as herein provided,  or may be credited to a general unallocated reserve which may be utilized  for any other purpose determined in accordance with generally accepted  accounting principles. 

Section 3. Dissolution or Liquidation 

(a) 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 accounts of property rights of members.  

Section 4. Capital Credit Retirements 

(a) If, at any time prior to dissolution or liquidation, the Board of Directors  shall determine that the financial condition of the Cooperative will not be  impaired thereby, the capital then credited to members’ accounts may be  retired in full or in part. The Board of Directors shall determine the method,  basis, priority and order of retirement, if any, for all amounts here before  and hereafter furnished as capital.  

(b) Capital credited to the account of each member shall be assignable on the  books of the Cooperative pursuant to written instruction from the assignor  and upon such conditions as the Board of Directors, acting under the  policies of general application, shall determine. 

(c) Notwithstanding any other provision of these bylaws, the Board of  Directors, at its discretion: 

1. Shall have the power at any time upon the death of any member patron,  who is a human Person, if the legal representatives of the member’s  estate shall request in writing, to retire capital credited to such member  prior to the time such capital would otherwise be retired under the  provisions of these bylaws, immediately upon such terms and conditions  as the Board of Directors, acting under policies of general application,  and the legal representative of such member’s estate shall agree upon.  

2. As reasonable and fair, the Cooperative may retire and pay capital  credits to classes of similarly situated members under different manners,  methods, and timing, in the discretion of the Board of Directors provided  the financial condition of the Cooperative shall not be impaired upon  retirement of such capital credits. 

3. In the event a member becomes inactive and the member’s final unpaid  retirement amount is less than the Cooperative’s administrative costs  required to provide payment to the member, the member’s balance may  be applied to permanent Cooperative equity. The Board of Directors  shall have discretionary power to establish the administrative cost  threshold.  

(d) In the event of a declared retirement in full or part, if a member cannot  be located, such capital of the member shall be vested in the member,  however, the Cooperative shall continue the usage of such patronage  as capital, provided that at such time as the location of the member is  determined, then distribution of such declared retirement shall be made to  such member. 

ARTICLE VIII 

DISPOSITION OF PROPERTY 

(a) The Cooperative may not sell, lease, or otherwise dispose of all or any  substantial portion of its property unless the following conditions are met: 

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1. Such sale, lease or other disposition is authorized at a meeting of the  members thereof by the affirmative vote of not less than two-thirds of all  members of the Cooperative, and 

2. The notice of such proposed sale, lease or other disposition shall have  been contained in the notice of the meeting;  

(b) The Board of Directors may, upon the authorization of a majority of those  members of the Cooperative present at a meeting of the members  thereof, sell, lease, or otherwise dispose of all or a substantial portion  of its property to another Cooperative or foreign corporation doing  business in this State pursuant to the Act under which this Cooperative is  incorporated. 

(c) Definitions for the purpose of this article: 

1. “Substantial portion of property” is as defined by the Rural Utilities  Service (RUS), National Rural Utility Cooperative Finance Corporation  (CFC), Bank For Cooperatives (CoBank) or other Cooperative lenders. 

2. Notwithstanding anything herein contained, the Board of Directors of  the Cooperative, without authorization by the members thereof, shall  have full power and authority to authorize the execution and delivery  of a mortgage or mortgages or a deed or deeds of trust upon, or the  pledging or encumbering of, any or all of the property, assets, rights,  privileges, licenses, franchises, and permits of the Cooperative, whether  

acquired or to be acquired, and wherever situated, as well as the  revenues and income there from, all upon such terms and conditions  as the Board shall determine, to secure any indebtedness of the  Cooperative. 

ARTICLE IX 

MISCELLANEOUS 

Section 1. Contracts 

(a) Except as otherwise provided in these bylaws, the Board of Directors may  authorize any office or officer, agent or agents to enter into any contract  or execute and deliver any instrument in the name of and on behalf of the  Cooperative, and such authority may be general or confined to specific  instances. 

Section 2. Checks, Drafts, Etc  

(a) Except as otherwise provided by law or in these bylaws, 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 officer, officers, agent or agents of the Cooperative  

and in such manner as shall be determined by resolution of the Board of  Directors. 

Section 3. Deposits 

(a) All funds of the Cooperative shall be deposited in such bank or banks, or  savings and loan association or associations, as the Board of Directors  may direct. 

Section 4. Seal  

(a) 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, State of North Dakota.” 

Section 5. Fiscal Year 

(a) The fiscal year of the Cooperative shall begin on the first day of January,  and shall end on the thirty-first day of December, of the same year. 

Section 6. Waiver of Notice 

(a) Any member or Director may waive in writing, any notice of meeting  required to be given by these bylaws.  

(b) The attendance of a member or Director at any meeting shall constitute a  waiver of notice of such meeting by such member or Director, except in  case a member or 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. A signed waiver is equivalent  to personal notice to the person so signing. 

Section 7. Accounting System and Reports 

(a) The Board shall cause to be established and maintained a complete  accounting system which, among other things, and subject to applicable  laws and rules and regulations of any regulatory body, shall conform to  such accounting system as may from be designated by the Administrator  of the Rural Utilities Service of the United States of America.  

(b) The Board shall also, after the close of each fiscal year, cause to be made  by a certified public accounting firm a financial audit of the accounts,  books, and financial condition of the Cooperative as of the end of such  fiscal year. A report of such audit shall be submitted to the members at the  next following annual meeting. 

Section 8. Indemnification 

(a) This Cooperative shall indemnify each Director, officer, manager,  employee, or agent of this Cooperative, and any person serving at the 

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request of this Cooperative as a Director, officer, manager, employee, or  agent of another corporation, partnership, joint venture, trust, or other  enterprise, against expenses, including attorneys’ fees, judgments, fines,  and amounts paid in settlement actually and reasonably incurred by them  to the fullest extent to which such officers, Directors and employees of a  Cooperative association may be indemnified under the law of this State, or  any amendments thereto or substitutions therefore. 

Section 9. Dispute Resolution 

(a) Any and all disputes, claims, or controversies between the Cooperative  and its members arising from or related in any way to the Cooperative’s  provision of electric or other services, or its furnishing of any goods or  its conduct of its operations, other than disputes or claims related to  the payment for electric service provided by the Cooperative, that are  not resolved by agreement of the parties, shall, at the request of any  such party, be submitted to mediation and/or arbitration according to  regulations prescribed by the Board of Directors.  

(b) The Cooperative and every member thereof, by becoming such, agrees  to mediate/arbitrate all such disputed claims according to this bylaw, and  further agrees to abide by and perform any awards made thereunder.  Any dispute not resolved through mediation shall be venued in a court of  competent jurisdiction in Burleigh County, North Dakota. 

ARTICLE X 

AMENDMENTS 

These bylaws may be altered, amended or repealed by the members at any  regular or special meeting, provided the notice of such meeting shall have  contained a copy of the proposed alteration, amendment or repeal, and notice  of such alteration, amendment or repeal shall have been given as provided in  Article III, or alternatively, a copy of the proposed alternation, amendment or  repeal is available on the Cooperative’s website or by mail if requested by the  member.

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7401 Yukon Drive • PO Box 730 Bismarck, North Dakota 58502-0730 (701) 223-1513 

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