Bylaws

Article XIV – Amendments of Bylaws

Section 14.01 Amendments of Bylaws

  1. Member Vote. Except as otherwise provided in these Bylaws, these Bylaws may be adopted, amended, repealed and/or revised (“Amended”) only at a member meeting by the affirmative vote of a majority of those members voting on the matter.
  2. Initiation of Bylaw Amendment. A proposed adoption, amendment, repeal and/or revision of these bylaws (“Amendment”) may be initiated for a vote by the members only by:
    1. The Board of Directors; or
    2. Written petition of members submitted to the Secretary of the Cooperative at the headquarters of the Cooperative, which petition:
      1. Shall contain:
        1. the full text of the proposed Amendment(s);
        2. any explanations and/or purposes for such Amendment(s) as the petitioners may wish to present to the Board of Directors and the members;
        3. the printed name, member account number, current billing address, original signature, and date of signature of at least 300 members in each of Charles County, St. Mary’s County, a combination of Calvert and Anne Arundel counties, and Prince George’s County, all of whom signed within 60 days before the petition is submitted to the Secretary, and all of whom are members in good standing at the time the petition is submitted to the Secretary; and
        4. the name and contact information of the person who is submitting the petition and with whom the Cooperative can correspond regarding the sufficiency of the petition, the date of the member meeting at which it may be submitted to a vote of the members, or any other issue.
      2. Shall not be altered or modified after being submitted to the Secretary;
      3. Shall be reviewed by the Board of Directors and its attorney for sufficiency of the petition, for sufficiency and legality of the proposed Amendment(s), and for effect of the proposed Amendment(s) on the Cooperative and the members, after which review the Board of Directors may comment on and sponsor or oppose the petition; and
      4. Provided further, that the Board of Directors shall not cause any such petition for a proposed Amendment to be noticed or acted upon, nor permit any such Amendment to be acted upon, if the Board of Directors determines that such, if adopted, would be illegal or a legal nullity.
  3. Notice of Proposed Amendment. No proposed Amendment shall be submitted to a vote of the members unless timely notice thereof, and any comments, sponsorship and/or opposition relating thereto by the Board of Directors as it may wish to provide, has been given to the members as required by Section 3.03.
  4. Changes to Proposed Amendments. No proposed Amendment may be substantively altered or amended after notice thereof has been given or from the floor of the member meeting at which it is being considered.
  5. Notice of Adoption. The Cooperative shall give the members notice of the approval of an Amendment within 90 days after the vote of the members approving such Amendment by any combination of (i) mail, (ii) electronic transmission, or (iii) by posting the Amendment on the Cooperative’s website. The failure of any member to receive such notice shall not invalidate the Amendment or its applicability to the member who failed to receive such notice.
  6. Effective Date. Except as otherwise provided in the motion to adopt an Amendment, such Amendment shall be effective on the day immediately following the close of the meeting at which the Amendment was adopted by the members.
Article XIII – Consolidation or Merger

Section 13.01

The Cooperative may consolidate or merge only with an entity operating on a cooperative basis that provides electric energy.

  1. Board Approval. To consolidate or merge, the Board of Directors must approve by a vote of at least two-thirds an agreement or plan to consolidate or merge (“Consolidation or Merger Agreement”) stating the:
    1. terms and conditions of the consolidation or merger;
    2. name of each entity consolidating or merging with the Cooperative;
    3. name of the new or surviving consolidated or merged entity (“New Entity”);
    4. manner and basis, if any, of converting memberships or ownership rights of each consolidating or merging entity into memberships or ownership rights of, or payments from, the New Entity;
    5. number of directors of the New Entity, which must equal or exceed 5;
    6. date of the New Entity’s annual meeting;
    7. names of New Entity directors who will serve until the New Entity’s first annual meeting; and
    8. other information required by law.
      The Board of Directors must also approve by a vote of at least two-thirds proposed articles of consolidation or merger, and any amendments to the proposed articles of consolidation or merger.
      Upon the Board of Directors’ approval of the plan to consolidate or merge, the Consolidation or Merger Agreement, the proposed articles of consolidation or merger, and any amendments to the proposed articles of consolidation or merger shall be presented to the total membership of the Cooperative for adoption and approval.
  2. Member Approval. To consolidate or merge, after the Board approves a Consolidation or Merger Agreement, two-thirds of the total membership must approve the Consolidation or Merger Agreement, proposed articles of consolidation or merger, and any amendments to the proposed articles of consolidation or merger.
  3. Notice. The Cooperative shall notify members of a member meeting, at which members may consider a Consolidation or Merger Agreement. This notice must contain, or be accompanied by, a summary or copy of the Consolidation or Merger Agreement, the New Entity’s articles of incorporation and bylaws, and any provision that would require director or member approval if contained in a proposed articles or bylaws amendment. Notification to members of the Southern Maryland delegation to the Maryland General Assembly shall be made by certified mail at least 45 days before the member meeting.
  4. Other Requirements. The New Entity directors 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.
Article XII – Indemnification

Section 12.01

Each officer, director, staff member, employee or person serving on a committee of the Cooperative shall be indemnified by the Cooperative against all costs and expenses actually and necessarily incurred by him in connection with the defense of any action, suit or proceedings in which he is made a party by reason of his being or having been a director, officer, staff member, employee or committee representative of this Cooperative, whether or not he continues to be such at the time of incurring such cost or expense, except in relation to matters as to which he shall be adjudged in such action, suit or proceedings to be liable for negligence or misconduct in the performance of his duties as such officer, director, staff member, employee or committee representative. The right of indemnification hereunder shall not be exclusive of other rights to which any officer, director, staff member, employee or committee representative is entitled as a matter of law.

Article XI – Miscellaneous

Section 11.01 Organizations—Affiliations & Memberships

The Board of Directors shall have full power and authority to authorize the Cooperative to purchase stock in or become a member of any local, state, or national organization, corporation, or cooperative organized on a for-profit or non-profit basis for the purpose of engaging in rural electrification, promoting the interests of the Cooperative’s members, or furthering the objectives and principles of the Cooperative. The Board of Directors shall also have full power and authority to authorize the Cooperative to form, or have formed, such business entities as are beneficial to the financial wellbeing, operation, and viability of the Cooperative.

Section 11.02 Publication

The Cooperative shall cause these bylaws, as amended from time to time, to be posted on the Cooperative’s website, available at the Cooperative’s headquarters, and available from the Cooperative upon request.

Section 11.03 Policies, Rules & Regulations

The Board of Directors shall have power to make and adopt such policies, rules and regulations, not inconsistent with law, the Articles of Conversion or these bylaws, as it may deem advisable for the management, administration and regulation of the business and affairs of the Cooperative.

Section 11.04 Accounting System & Reports

The Board of Directors shall, after the close of each fiscal year, cause to be made by a Certified Public Accountant, a full and complete 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 annual meeting next following the close of such fiscal year.

Section 11.05 Area Coverage

The Board shall make diligent effort to see that electric service is extended to all unserved persons within the Cooperative service area who (a) desire such service and (b) meet all requirements established by the Cooperative as a condition of such service.

Article X – Financial Transactions

Section 10.01 Contracts

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

Section 10.02 Check, Drafts, etc

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 evidences of indebtedness issued in the name of the Cooperative shall be signed and countersigned by such officer or officers, agent or agents, employee or employees of the Cooperative and in such manner as shall from time to time be determined by resolution of the Board of Directors.

Section 10.03 Deposits

All funds of the Cooperative, except petty cash, shall be deposited from time to time to the credit of the Cooperative in such bank or banks as the Board of Directors may select.

Section 10.04 Fiscal Year

The fiscal year of the Cooperative shall begin the first day of January of each year and end on the 31st day of December of the same year.

Article IX – Seal

Section 9.01

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, Maryland.”

Article VIII – Disposition of Property

Section 8.01 Execution of Mortgages, Deeds of Trust or Pledges

The Board of Directors of the Cooperative shall have full power and authority, without authorization by the members thereof, to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust of, 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 therefrom, all upon such conditions as the Board of Directors shall determine to secure any indebtedness of the Cooperative to the United States of America, to any agency or instrumentality thereof, to a national financing institution, organized on a cooperative plan for the purpose of financing its members’ programs, projects and undertakings in which the Cooperative holds membership, or to any other financing institution.

Section 8.02 Transfer of Cooperative Assets

Except for a sale, lease, exchange, disposition, conversion, or other transfer (“Transfer”) of Cooperative assets: (1) to secure indebtedness; (2) pursuant to condemnation or threat of condemnation; (3) pursuant to an existing legal obligation; (4) associated with a consolidation or merger; (5) consisting of the Cooperative’s ownership in an entity; or (6) to a Cooperative subsidiary, the Cooperative may transfer during a 12-month period, all or a substantial portion of the Cooperative’s assets only if:

  1. At the expense of the person seeking to purchase, lease, or acquire the Cooperative’s assets, the Board of Directors appoints three independent appraisers, each of whom, within a reasonable time of appointment, evaluates and renders an appraisal valuing the Cooperative’s assets specified in the proposed Transfer;
  2. The person seeking to purchase, lease, or acquire the Cooperative’s assets provides to the Cooperative any information requested by the Cooperative;
  3. Within a reasonable time of receiving the appraisals, the Cooperative invites any other entity operating on a cooperative basis, providing electric energy, and primarily located within the State of Maryland, or within a state adjacent to the State of Maryland, to submit proposals to purchase, lease, or acquire the Cooperative’s assets specified in the proposed Transfer, or to merge or consolidate with the Cooperative;
  4. At least a majority of the total membership approves the proposed Transfer;
  5. Notice of a member meeting at which members will consider the proposed Transfer states that one of the purposes of the member meeting is to consider the Transfer, and includes a copy or summary of the proposed Transfer;
  6. No director will benefit from the Transfer, financially or otherwise, in a manner unrelated to the director’s membership interest;
  7. Except for a Transfer to an entity operating on a cooperative basis and providing electric energy, all allocated capital credits are retired and paid at full and non-discounted value; and
  8. In proportion to the value or quantity of Cooperative services used by members during the period in which the Cooperative owned an asset, the Cooperative allocates to members as capital credits any consideration received for the Cooperative’s assets that exceeds the amount paid for the Cooperative assets.
Article VII – Non-Profit Operation

Section 7.01 Interest or Dividends on Capital Prohibited

The Cooperative shall at all times be operated on a cooperative non-profit basis for the mutual benefit of its patrons. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its patrons.

Section 7.02 Patronage Capital in Connection with Furnishing Electric Distribution Service

In the furnishing of electric distribution service, the Cooperative’s operations shall be so conducted that all patrons, members and non-members alike, will through their patronage furnish capital for the Cooperative. 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 all its patrons, members and non-members alike, for all amounts received and receivable from the furnishing of electric distribution service in excess of operating costs and expenses properly chargeable against the furnishing of electric distribution service. All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the patrons, members and non-members alike, as capital. The Cooperative is obligated to pay by credits to a capital account for each patron all such amounts in excess of operating costs and expenses. The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each patron, and the Cooperative shall within a reasonable time after the close of the fiscal year, give a general notice sufficient to enable each patron to compute his own amount of capital so credited to his account. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital. All other amounts received by the Cooperative from its operation 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, allocated to its patrons on a patronage basis and any amount so allocated shall be included as a part of the capital credited to the accounts of patrons, as herein provided. Notwithstanding any of the foregoing, however, the Cooperative shall retain any nonoperating margins as permanent equity, without allocation.

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 prorata basis before any payments are made on account of property rights of members. 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 patrons’ accounts may be retired in full or in part. The Board of Directors shall determine the method, basis, priority and order of retirement. Effective with refunds made after 1992, if on retirement of capital, any refund is a de minimis amount as determined by the Board of Directors, it will be donated by the patrons to the permanent capital of the Cooperative.

Capital credited to the account of each patron shall be assignable only on the books of the Cooperative pursuant to written instruction from the assignor and only to successors in interest or successors in occupancy in all or part of such patron’s premises served by the Cooperative unless the Board of Directors, acting under policies of general application, shall determine otherwise.

Notwithstanding any other provision of these bylaws, the Board of Directors, at its discretion, shall have the power at any time upon the death of any patron, who was a natural person or upon the termination or legal dissolution of a patron that was a business, if the legal representative of the patron or the patron’s estate shall request in writing that the capital credited to any such patron be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such patron immediately upon such terms and conditions as the Board of Directors, acting under the policies of general application and the legal representatives of such patron’s estate shall agree upon, provided, however, that the financial condition of the Cooperative will not be impaired thereby.

The patrons of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Conversion and bylaws shall constitute and be a contract between the Cooperative and each patron, and both the Cooperative and the patrons are bound by such contract, as fully as though each patron had individually signed a separate instrument containing such terms and provisions. Patrons whose membership has terminated with the Cooperative and who have retained an interest in Capital Credits shall continue to be subject to the provisions regarding retirement as enumerated in this section.

Section 7.03 Capital Credit Recoupment & Offset

Notwithstanding any provisions of these bylaws to the contrary, and unless specifically prohibited by a statute of limitation or other governing law, after allocating Capital Credits to a patron or former patron, the Cooperative may recoup, offset, or setoff an amount the patron or former patron owes to the Cooperative, including any compounded interest and late payment fee, by reducing the allocated or net present value amount of Capital Credits assigned to the patron or former patron by the amount owed to the Cooperative.

Section 7.04 Assignment & Gift by Failure to Claim

  1. Notwithstanding any other provisions of the bylaws, if any patron or former patron fails to claim any cash retirement of Capital Credits from the Cooperative within 3 years after payment of the same has been made available to said patron or former patron, such failure shall be and constitutes an assignment and gift by such member of such Capital Credits to the Cooperative. Cash retirement of Capital Credits is made available by mailing the Capital Credit check to the last address provided to the Cooperative. If said check is returned as undeliverable then all future refunds are deemed to be made available to said patron or former patron at the time the refund amount is recorded to their Capital Credit account. No additional checks will be mailed until the patron or former patron provides the Cooperative with an updated address.
  2. Failure to claim any such payment within the meaning of this section shall include the failure of such patron or former patron to cash said Capital Credits check mailed by the Cooperative to the last address provided by said patron or former patron to the Cooperative.
  3. The assignment and gift provided for under this section shall become effective only upon the expiration of 3 years from the date when such payment of Capital Credits was made available to such patron or former patron without claim therefore and only after further expiration of 60 days following the giving of a Notice by mail or publication that unless such payment is claimed within 60 days, such gift to the Cooperative for the benefit of its members shall become effective and irrevocable.
  4. The notice by mail herein provided shall be one mailed by the Cooperative to such patron or former patron at the last known address. If notice by publication is given, such publication shall be one insertion in a newspaper circulated in the service area of the Cooperative.
  5. The 60 day period following the giving of such notice, either by mail or publications, shall be deemed to terminate 60 days after the mailing or publication of such notice.
  6. Any such funds that revert to the Cooperative shall be credited to the Cooperative’s General Fund and be used to reduce the cost of electricity to the members.
Article VI – Officers

Section 6.01 Number & Title

The officers of the Cooperative shall be a Chairperson, Vice Chairperson, Secretary, Treasurer, Assistant Secretary-Treasurer and the President and Chief Executive Officer, who shall not be a member of the Board of Directors, and such other officers as may from time to time be determined by the Board of Directors. The offices of Secretary and Treasurer may be held by the same person.

Section 6.02 Election & Term of Office

The officers shall be elected annually by and from the Board of Directors at the meeting of the Board of Directors held directly after the annual meeting of the members. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until the first meeting of the Board of Directors following the next 11 succeeding annual meeting of the members or until his successor shall have been elected and shall have qualified. A vacancy in any office shall be filled by the Board of Directors for the unexpired portion of the term.

Section 6.03 Removal of Officers & Agents

Any 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 thereby.

Section 6.04 Chairperson

The Chairperson shall:

  1. be the principal executive officer of the Cooperative, and unless otherwise determined by the members or the Board of Directors, shall preside at all meetings and meetings of the Board of Directors;
  2. sign, with the Secretary, any deeds, mortgages, deeds of trust, notes, bonds, contracts or other instruments authorized by the Board of Directors to be executed, except in cases in which the signing and execution thereof shall be expressly 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
  3. in general, perform all duties incident to the office of Chairperson and such other duties as may be prescribed by the Board of Directors from time to time.

Section 6.05 Vice Chairperson

In the absence of the Chairperson or in the event of his inability or refusal to act, the Vice Chairperson shall perform the duties of the Chairperson, and when so acting, shall have all powers and be subject to all restrictions upon the Chairperson. The Vice Chairperson shall also perform such other duties as from time to time may be assigned to him by the Board of Directors.

Section 6.06 Secretary

The Secretary shall be responsible for:

  1. keeping the minutes of the meetings of the members and of the Board of Directors in one or more books provided for that purpose;
  2. seeing that all notices are duly given in accordance with these bylaws or as required by law;
  3. the safe keeping of the corporate records and of the seal of the Cooperative and affixing 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;
  4. keeping a register of the names and post office addresses of all members;
  5. keeping on file at all times a complete copy of the Articles of Conversion and bylaws of the Cooperative containing all amendments thereto, which copy shall always be open to the inspection of any member, and at the expense of the Cooperative, forwarding a copy of the bylaws and of all amendments thereto to each member; and
  6. the general performance of all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors.

Section 6.07 Treasurer

The Treasurer shall be responsible for:

  1. custody of all funds and securities of the Cooperative;
  2. the receipt of and the issuance of receipts for moneys due and payable to the Cooperative from any source whatsoever, and for the deposit of all such moneys in the name of the Cooperative in such banks as shall be selected in accordance with the provision of these bylaws; and
  3. the general performance of all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors.

Section 6.08 Assistant Secretary-Treasurer

In the absence of the Secretary or Treasurer, or in the event of his inability or refusal to act, the Assistant Secretary-Treasurer shall perform the duties of the Secretary or Treasurer, and when so acting, shall have all powers and be subject to all restrictions upon the Secretary or Treasurer. The Assistant SecretaryTreasurer shall also perform such other duties as from time to time may be assigned to him by the Board of Directors.

Section 6.09 President & Chief Executive Officer

The Board of Directors may appoint a President and Chief Executive Officer who shall serve as the Chief Executive Officer, and who shall not be a director but shall be required to be a member of the Cooperative. The President and Chief Executive Officer shall perform such duties and exercise such authority as from time to time are vested by the Board of Directors.

Section 6.10 Bonds of Officers

The Treasurer and any other officer or agent of the Cooperative charged with responsibility for the custody of any of its funds or property shall be bonded in such sum and with such surety as the Board of Directors shall determine. The Board of Directors, in its discretion, may also require any other officer, agent or employee of the Cooperative to be bonded in such amount and with such surety as it shall determine.

Section 6.11 Compensation

The powers, duties and compensation of any officers, board-appointed committees, and employees shall be fixed by the Board of Directors, subject to the provisions of these bylaws with respect to compensation.

Section 6.12 Reports

The officers of the Cooperative shall submit at each annual meeting of the members reports covering the business of the Cooperative for the previous fiscal year. Such reports shall set forth the condition of the Cooperative at the close of such fiscal year.

Article V – Meeting of Directors

Section 5.01 Regular Meetings

A meeting of the Board of Directors may be held, without notice other than this bylaw, immediately after and at the same place as the annual meeting of the members. A meeting of the Board of Directors other than a special meeting shall be held monthly at such time and place within the service area of the Cooperative in person, by remote communication, or both as the Board of Directors may provide by resolution. Such monthly meetings may be held without notice other than such resolution fixing the time, place, and method thereof. The Board of Directors may by resolution, establish more than one monthly meeting.

Section 5.02 Special Meetings

Special meetings of the Board of Directors may be called by the Chairperson or by a majority of directors and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. The Chairperson or the directors calling the meeting shall fix the time, place, and method for holding the meeting. Section

5.03 Notice of Directors’ Meetings

Notice of the time, place, method, and purpose of any special meeting of the Board of Directors shall be delivered to each director by or at the direction of the Secretary, or upon a default in duty by the Secretary, by the Chairperson or the directors calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the director at his address as it appears on the records of the Cooperative, with postage thereon prepaid.

Section 5.04 Quorum

A majority of the Board of Directors 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 from time to time and, provided further that, the Secretary shall notify any absent directors of the time, place, and method of such adjourned and rescheduled meeting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, except as otherwise provided by these bylaws.