Article IV – Directors

Section 4.01 General Powers

The business and affairs of the Cooperative shall be managed by a Board of 15 directors which shall exercise all of the powers of the Cooperative except such as are by law, the Articles of Conversion or these bylaws, conferred upon or reserved to the members. The directors shall be apportioned by the county of their principal residence as follows: Charles County, 5; St. Mary’s County, 5; Calvert County and Anne Arundel County, 3; and Prince George’s County, 2.

Section 4.02 Election, Qualifications & Tenure

Directors shall be elected for staggered terms so that one-third of the Board of Directors will be elected each year to serve for a term of 3 years. There shall be 5 directorships placed in each of the 3 term classifications.

In the event of a tie between or among candidates running for a particular seat, the candidate having the higher number of votes cast in the county in which the candidate has his principal residence will be declared elected.

To become or remain a director, a person must comply with the following qualifications:

  1. while a director and during 1 year immediately before becoming a director, be a member of the Cooperative; and
  2. while a director and during 1 year immediately before becoming a director, maintain his principal residence in the area served by the Cooperative and the county in which he resided at the beginning of his term; and
  3. not be or become an incumbent of or candidate for an elective public office in connection with which salary or compensation in excess of $100 per annum is paid; and
  4. not be or become a Close Relative of or reside in the same residence as an employee or serving director of the Cooperative. For the purposes of this section, the term “Close Relative” means a person who through blood, law, or marriage, is a spouse, child, stepchild, father, stepfather, mother, stepmother, brother, stepbrother, half-brother, sister, stepsister, half-sister, grandparent, grandchild, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, or daughter-in-law; and
  5. while a director and during 1 year immediately before becoming a director, not be or have been an employee of the Cooperative; and
  6. while a director and during the 1 year immediately before becoming a director, not be employed by, control, own more than 10% of, serve as a director or officer of, or receive more than 10% of the person’s annual gross income from an entity that (1) advances the entity’s pecuniary interest by regularly, directly, and substantially competing with the Cooperative or an entity in which the Cooperative owns a majority interest or (2) receives more than 10% of its annual gross income directly or indirectly from the Cooperative or an entity in which the Cooperative owns a majority interest; and
  7. not have been convicted of a felony.

Upon establishment that a person is holding such a position in violation of any provision in this Section, it shall immediately become incumbent upon the Board of Directors to remove such director from office.

Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors.

Section 4.03 Nominations

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 a meeting of the members at which directors are to be elected, a committee on nominations consisting of not less than 5 nor more than 11 Cooperative members who shall be selected from different sections of the service area so as to ensure equitable representation. No member of the Board of Directors may serve on such committee. The committee, keeping in mind the principle of geographical representation, shall prepare and post at the principal office of the Cooperative at least 60 days before the meeting a list of nominations for directors, but any 15 or more members acting together may make other nominations by petition not less than 90 days prior to the meeting and the Secretary shall post such nominations at the same place where the list of nominations made by the committee is posted.

The Secretary shall cause to have delivered with the notice of the meeting a statement of the number of directors to be elected and the names and addresses of the candidates. Notwithstanding anything contained in the section, failure to comply with any of the provisions of this section shall not affect in any manner whatsoever the validity of any election.

Section 4.04 Removal of Directors by Members

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 10 per centum of the members, and request the removal of such director by reason thereof. The director against whom such charges have been brought shall be informed in writing of the charges at least 5 days prior to the meeting at which the charges are to be considered and shall have an opportunity at the meeting to be heard in person or by counsel and to present evidence in respect to the charges; and the person or persons bringing the charges against him shall have the same opportunity. 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 the nominations.

Section 4.05 Vacancies

Subject to the provisions of these bylaws with respect to the filling of vacancies, a vacancy occurring in 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 director in respect of whom the vacancy occurs.

Section 4.06 Compensation

Directors as such shall not receive any salary for their services, but, by resolution of the Board of Directors, the Board may from time to time set an appropriate sum, if any, for time and expenses associated with their actions and performance on behalf of the Cooperative.

The Cooperative shall indemnify its directors, officers, agents and employees and may purchase insurance to cover such indemnification against all liability arising out of their acts in their official capacities, if they shall have acted in good faith and deemed such acts to be in the best interest of the Cooperative, or not against its best interests.

Section 4.07 Oath of Office

Prior to any person assuming the office of director, such person must subscribe to the following oath or affirmation: “I do solemnly swear (or affirm) that I will support the Constitution and the laws of the United States of America, the Constitution and the laws of the State of Maryland, and the Bylaws of the Southern Maryland Electric Cooperative, Inc., that I will faithfully discharge according to the best of my ability the duties of my office during such time as I am a Director of Southern Maryland Electric Cooperative, Inc., and that I will never knowingly do or cause to be done any act or deed which would not be in the best interest of the Cooperative and its membership.”