Page 28 - Member Handbook

of each Member Member shall be be be be determined by the the Member’s tariff rate class in in fin accordance the the Capital Credit Policy (defined below) No Member shall have a a a a a direct interest in in or claim upon the the property of the the Cooperative Section 7 2 NON-VOTING PREFERRED STOCK To the the the extent authorized by the the the Articles the the the Cooperative may issue non-voting preferred stock in in one or or or or more series as may may be established by by the the the the the Board (“Preferred Stock”) to to to any Person whether or or or or not such Person Person is is is is qualified to to to to to to be be be a a a a a a a a a a a a a a Member Prior to to to to to to the the the the issuance of of any any series series of of Preferred Preferred Stock Stock (each a a a a a a a a a a a a a a “Series”) the the the the Board Board shall establish establish either in in the the the the the resolution authorizing such Series or or or by amendment to these Bylaws the the the the the number of of authorized shares and the the the the the terms of of such Series including without limitation (a) entitlement to to dividends dividends if if any any (b) preferences if if any any with with respect to to dividends dividends or other distributions (c) redemption terms terms and and conditions conditions (d) restrictions restrictions on on on on on on on on on transfer and and (e) any other terms terms conditions conditions or restrictions restrictions permitted by by Law the the Articles and these Bylaws Under no circumstances will any Series of Preferred Stock by by entitled to to voting rights Section 7 3 DIVIDENDS ON ON NON-VOTING PREFERRED STOCK Dividends payable on on on shares of of non-voting preferred stock of of the Cooperative may be declared by the the the Board Board at at at any Regular or Special Meeting of the the the Board Board not to exceed an an amount that would cause the the the Cooperative to to fail to to be consistent with operating on on on a a a a a a a a a a cooperative basis under federal tax law including Section 501(c)12 of the Internal Revenue Code ARTICLE 8 – NONPROFIT OPERATION Section 8 1 NONPROFIT AND COOPERATIVE OPERATION The Cooperative shall operate on on on a a a a a a a nonprofit and cooperative basis for the mutual benefit of all Members Section 8 2 PATRONAGE CAPITAL IN IN CONNECTION WITH FURNISHING ELECTRIC SERVICE A A A A A “Patron” is defined as a a a member or non-member receiving electric electric service service from the the the Cooperative Cooperative In the the the furnishing of electric electric service service the the the Cooperative’s operation shall be be so conducted that all Patrons will through their patronage furnish capital for the the Cooperative (a) Capital Credit Allocation All All amounts in in excess of operating costs and expenses are received from the Patrons as patronage capital capital The Cooperative is obligated to to allocate by credits to to a a a a a a a a a a a a a a capital capital account for each Patron all all amounts received in excess of of operating costs and and expenses (a “Capital Credit”) The books and and records of of the Cooperative shall be kept in in such a a a a a a a a a a manner
that at at at the the end of of each each fiscal year the the amount of of capital if any so furnished by each each Patron fis is is clearly reflected and credited in an an an appropriate record to the the the the capital account of of each Patron and the the the the Cooperative shall within a a a a a a a a a a a a a a reasonable time after the the the the close of of the the the the fiscal year notify each Patron of of of the the the amount of of of its its Capital Capital Credit Credit Consistent with this Bylaw the the the allocation of of of Capital Capital Credits fis is is is in the the the discretion of of the the the Board Board and and the the the Board Board will determine the the the manner
method and and timing of of allocating Capital Credits in in in in a a a a a a a a a a written policy of of Board (the “Capital Credit Policy”) All amounts received by the the Cooperative from its operations in excess of of costs and expenses insofar as permitted by law shall be: (i) used to to offset any any losses incurred during the the current or or any any prior fiscal year and (ii) to to the the extent not needed for that purpose allocated allocated to its Patrons on on on a a a a a a a a a a a a a a patronage basis and any amount so allocated allocated shall be included
as as part of of of the the the the capital credited to the the the the account of of of Patrons Each Patron’s Capital Credits shall be assignable only on on on on the the the the books of of of the the the the Cooperative pursuant to written instructions from the the Patron unless the the Board acting under policies of general application shall determine otherwise The Board Board has the the the authority to pay Capital Credits at at a a a a a a a a a a discounted rate under terms set by the the the Board Board (b) Retirement of of Capital Credits If at at at at any time prior to dissolution or or liquidation of of the the the Cooperative the the the Board determines that the the the financial condition of the the Cooperative will not be impaired the the Board may retire and pay full or fin in in part any Capital Credits fin in in accordance with with the the the Capital Capital Credit Credit Policy Consistent with with this Bylaw the the the retirement and payment of Capital Capital Credits are in the the the sole discretion of of the the the Board and and and are not affected by previous retirements and and and payments Notwithstanding any other provision of of these Bylaws the the the Board shall have the the the power upon upon the the the death of any natural Patron Patron to retire such such Patron’s Capital Credits upon upon such such terms and and conditions as the the Board acting under policies of general application and and in in accordance with the the Capital Credit Policy provided that the the financial condition of the the Cooperative will not be impaired (c) Capital Capital Credit Credit Recoupment and Offset Regardless of of a a a a a a a a a a a statute of of limitation limitation or other time limitation limitation after retiring Capital Capital Credits allocated to to to a a a a a a a a a a Patron Patron or or or former Patron Patron the the the Cooperative Cooperative may recoup offset or or or setoff an amount owed to to to the the the Cooperative Cooperative by the the the Patron Patron or or or former Patron Patron including any any interest at at at at at the the Colorado legal rate and any any late payment fees by reducing the the amount of retired Capital Credits allocated to to the the the Patron Patron or or former Patron Patron by the the the amount owed to to the the the Cooperative (d) Security Interest in in Capital Credits By becoming Members Members of the Cooperative all Members Members are deemed to have granteda first lien on on all Capital Credits capital investments patronage funds funds and other property or funds funds of the the the Member held by the the the Cooperative to secure the the the payment of of all indebtedness of of the the the Member to to the the the Cooperative This first lien is is deemed to to be be perfected by possession of of of the the the the the the collateral by the the the the the the Cooperative Cooperative under the the the the the the Uniform Commercial Code or or at at at at the the the the the the election of of of the the the the the the Cooperative Cooperative notice of of of the the the the the the lien may be made through the the the the filing of o of of a a a a a a a a a financing statement with the the the the office of o of of the the the the Secretary of o of of State The Articles these Bylaws and the the Governing Documents shall constitute a a a a a a a security agreement under the the Uniform Commercial Code The amount of any lien may at at at the the sole option of o the the Cooperative be be be setoff at at at any any time against any any funds to to to be be be paid to to to a a a a a a a a a Member Section 8 3 UNCLAIMED FEES AND CREDITS Within a a a a a a a a a reasonable time after the Board declares a a a a a a a a a retirement of Capital Credits or or the the the the the Cooperative Cooperative otherwise determines that a a a a a a a a Patron Patron is is entitled to Capital Credits held for the the the the the Patron Patron by the the the the the Cooperative Cooperative the the the the the Cooperative Cooperative shall mail to each such Patron Patron at at at at at the the the the the last address shown on on on the the the the the books of of the the the the the Cooperative Cooperative the the the the the Patron’s share of of the the the the the Capital Capital Capital Credits Credits If a a a a a a a a a a a a a a Capital Capital Capital Credit Credit Credit remains unclaimed more than three (3) years following such mailing (referred to in in in in this Section as “Unclaimed Capital Capital Capital Capital Credits”) then thirty-five days following following Notice to to the the the the Patron of the the the the Unclaimed Unclaimed Capital Capital Capital Capital Credits Credits Credits the the the the Cooperative may recover and use the Unclaimed Capital Credits for for educational charitable alternative or or or or renewable energy purposes or or or or for for any other activities approved by the the the the the Board in the the the the the Cooperative’s donations & contributions policy (collectively the the the the the “Charitable Fund”) For purposes of of this Section 8 3 the the term “Notice” means publishing a a a a a a a list of of the the Patrons with Unclaimed Capital Credits one time in in a a a a a a a newspaper of of general circulation in in Montrose and and Delta Counties and and by posting the the names of of such Patrons on on on on the the Cooperative’s web page for a a a a a a a a period of time to be established by the the Board If the the Patron does not claim such such Capital Credits within such such thirty-five day notice period all all rights of the the Patron Patron to the the Unclaimed Capital Credits shall be extinguished and forever barred A Patron Patron may donate donate to the Charitable Fund his or her Capital Credits and and in such such event no Notice need be provided and and such such donated accounts will be transferred immediately upon retirement of the Capital Credit Section 8 4 PATRON AGREEMENT Each Patron Patron and former Patron Patron agrees that:
(a) Subject to section 8 5 of of these these Bylaws Bylaws the the the the terms and and and provisions of of the the the the Articles and and and these these Bylaws Bylaws shall constitute and and and be a a a a a a a a contract contract between the the the Cooperative Cooperative and and and each Patron Patron and and and both the the the Cooperative Cooperative and and and the the the Patron Patron are bound by such contract contract