Articles of Conversion: Articles that bind a corporation that has been formed due to its conversion from another corporation.
Flathead Power, a Montana Corporation, was converted to Flathead Electric Cooperative, Inc. in 1937 under Articles of Conversion.
Assignor: One who assigns to another, as in the assigning of capital credits.
Capital Account: An account established for each member of the cooperative to which undistributed capital credits are allocated.
Capital Credits: Margins in excess of operating expenses that have been allocated to the capital accounts of members.
Computation of Time: Unless otherwise stated, a day will be defined as a calendar day.
In Conjunction with: Conjunction–an act of being conjoined
Conjoined–brought together so as to meet
“In conjunction with” as used in these bylaws balloting is brought together with or a part of the annual meeting process.
Easement: An interest in land owned by another that entitles its holder to a specific limited use.
Ex Officio: By virtue or because of an office–The president of the Board is an ex officio member of all committees because of their position as president.
Immediate Family: Parent, child, spouse, brother or sister.
Incapacity: A physical or mental condition which renders the person unable to perform their duties.
Indemnify: To secure against loss or damage.
Natural Person: Natural person does not include corporations or other non-human legal entities which are members. To be eligible to be a trustee, the member must be a person.
Operating margins: All funds and amounts received from members for the provision of a Cooperative service, that exceed the Cooperative’s costs and expenses of providing that service.
Patronage Capital: Capital credits that have been allocated to members on the books of the cooperative and have been retained as capital until such time the financial position of the cooperative warrants retirement of these credits.
Plurality: A greater number of votes cast for one candidate than for another candidate or candidates–does not require a majority.
Principal residence: The home located within the Flathead Electric service area in which a member lives the greater part of the year.
Profile: A concise biographical sketch.
Quorum: The number of members which, when assembled, is legally required to conduct business.
Special Meeting: A meeting of the members, called for a specific purpose, and on a date other than that of the regularly scheduled annual meeting. Special meetings require notification to be sent to each member.
Successors in interest: One who follows and has an interest in.
Successors in occupancy: One who follows in occupancy of the premises.
As determined or required by the Cooperative, each member shall provide the Cooperative safe and reliable access reasonably necessary to operate the Cooperative safely, reliably and efficiently or to provide Cooperative services to any real or personal property in which the member possesses a legal right as well as to extend the Cooperative’s distribution line(s) serving the member’s property so that electric service can be extended to serve any member owning adjoining property.
In the cooperative spirit, members and the Cooperative agree to work together. Members shall grant the Cooperative the right to inspect, monitor, operate, repair, maintain, or remove any Cooperative facilities or equipment. Members shall grant an Easement to the Cooperative for extending new facilities or relocating existing facilities. Where practical, the Easement shall follow property boundaries, existing roadways, driveways or established trails.
Unless otherwise determined by the Board, the Cooperative owns all Cooperative facilities and equipment. Each member shall protect all Cooperative equipment and shall install, implement and maintain any protective device or procedure required by the Cooperative.
Section 2: Non-Liability for Debts of the Cooperative
A member is not liable to third parties for the Cooperative’s acts, debts, liabilities or obligations.
Section 3: Provision of Service
The Cooperative shall provide Cooperative services to members in a reasonable manner. The Cooperative neither guarantees nor warrants continuous or flawless provision of Cooperative services.
After providing a member with reasonable notice and an opportunity to comment orally or in writing, the Cooperative may suspend or terminate any Cooperative service to that member.
The Cooperative may suspend or terminate service without notice if a member has tampered or interfered with, damaged or impaired any facilities or equipment furnished or used by the Cooperative to provide, monitor, measure or maintain any Cooperative service, or upon discovery of any unsafe condition or imminent hazard.
Section 4: Membership List
The Cooperative shall maintain a current membership list, but in order to protect the privacy of individual members, the list shall not be made available.
The annual meeting of the members, for the purpose of giving reports for the previous fiscal year and transacting any other properly noticed business as may come before the meeting, shall be held at least once each calendar year at such place in Flathead County, Montana, and by such means or methods as allowed by law as shall be designated by the Board of Trustees.
Section 2: Special Meetings
The Cooperative shall hold a special meeting of members at a date, time, and location determined by the trustees upon the Cooperative’s receiving:
A written or oral request from the President; or
A written request signed by at least 3 trustees; or
1 or more written petitions signed and dated, within 60 days following the first signature, by at least 2,500 members.
Each page of the petition shall include the purpose for which the meeting is being called, the printed name and address of the signer and their telephone number and original dated signature.
If the Cooperative fails to properly notify the members of a special members’ meeting within 30 days of receiving any member petition, then any member signing the petition may:
Set a reasonable time, place and location for the special members’ meeting; and
Properly notify the members of the special meeting.
The agenda for a special meeting shall be limited to the purpose for which the meeting is called.
Section 3: Notice of Members’ Meetings
As directed by the president, secretary, or any other officer or member(s) properly calling a members’ meeting, the Cooperative shall deliver written notice of the meeting, personally, electronically, or by mail, to all members entitled to vote at that meeting at least 10 days, but no more than 25 days, before the meeting.
For any annual meeting the notice shall indicate the date, the time and location, and shall include a description of any matter or matters that must be approved by the members.
For any special meeting, the notice shall indicate the date, the time and location, and the purpose of such meeting.
Unless otherwise provided in these Bylaws, a notice of a members’ meeting is delivered when deposited in the United States mail with prepaid postage affixed, or sent via electronic means, and addressed to a member at the member’s address on record.
The inadvertent and unintended failure of any member to receive notice of any members’ meeting shall not affect any action taken at that meeting.
The Board shall determine the agenda for any members’ meeting. Members may request an item be placed on the agenda:
If agreed upon by 3 trustees at least 45 days before the meeting; or
If petitions including the printed names, addresses, telephone numbers and original and dated signatures of at least 2,500 members are provided to the Board at least forty-five (45) days before the meeting.
Section 4: Conduct and Attendance at Members’ Meetings
At any meeting of members, unless otherwise determined by the Board, the president:
Shall preside at all members’ meetings;
May exercise any power reasonably necessary for conducting any members’ meeting efficiently and effectively.
Section 5: Quorum
The quorum of any annual or special members’ meeting shall be two hundred (200) members present who are eligible to vote. The quorum established at the beginning of the meeting shall constitute the quorum for the entire meeting.
In the event that a quorum is not present at any annual or special members’ meeting, a majority of the members present may adjourn the meeting to a date no more than thirty (30) days following the original members’ meeting.
Section 6: Voting
Each membership shall be entitled to one vote.
Section 7: Ballot
Every member shall be provided the opportunity to vote on all Bylaw amendments and trustee elections. The Board shall establish the method(s) of balloting from those allowed by law.
All properly completed ballots received on or before the time and date specified shall constitute a vote. If duplicate ballots are received from a member, all of that member’s ballots shall be disqualified.
A member’s failure to receive a ballot does not affect any action taken by the ballot.
The ballot shall:
Describe each proposed Bylaw amendment and identify all candidates upon which the members are asked to vote;
Provide a reason for the proposed bylaw amendment, if any; and
Instruct members how to complete and when to return the ballot.
Section 8: Announcement of Voting Results
The results of all voting shall be announced after certification by the Board and will become effective at that time.
The Board shall manage the business and affairs of the Cooperative and shall exercise all the powers of the Cooperative except those that are reserved to the members by law, the Articles of Conversion, or these Bylaws.
Section 2: Composition
The Board of Trustees (referred to as the Board) shall be composed of 1 elected trustee from each of its 9 districts.
Section 3: Trustee Qualifications
Any person shall be eligible to become or remain a trustee who:
Is a member of the Cooperative and is not otherwise disqualified;
Maintains primary residence within the district they represent; and
Is a natural person.
Section 4: Trustee Disqualifications
A member shall not qualify for the office of trustee or an existing trustee shall become disqualified to serve as a trustee if:
The member has been an employee of the Cooperative for any length of time within the immediately preceding 7 years;
The member or trustee, including a member of their immediate family is, or becomes, an employee of the Cooperative;
The trustee fails to attend 2 monthly meetings of the Board in a calendar year without approval of the Board;
The member or trustee has a conflict of interest which includes but is not limited to situations in which the member or trustee:
Is employed by, is an agent of, or is an immediate family member of an employee or agent of the Cooperative;
Is employed by or materially affiliated with any other Trustee;
Regularly and directly competes with the Cooperative or any entity that the Cooperative controls or in which the Cooperative owns a majority interest;
Owns an interest greater than 10% or holds a management position in a business wherein more than 10% of the goods or services sold are sold to the Cooperative or one of its subsidiaries, or combination thereof.
The member or trustee has been declared incapacitated or of unsound mind by a final order of the court;
The member or trustee has been convicted of a felony;
The member has an immediate family member who is currently serving as a trustee.
Upon determining that a trustee is holding office in violation of any of the foregoing provisions, the Board shall immediately remove such trustee from office upon written notification to the trustee of the basis for disqualification.
Upon determining that a member is disqualified from serving as a trustee, the Nominating Committee shall immediately notify said member in writing and provide the basis for disqualification.
Nothing contained in this section shall affect or shall be construed to affect in any manner whatsoever the validity of any action taken at any meeting of the Board.
Section 5: Trustee Nominations
In any year in which a vacancy in the office of trustee shall occur in any district, there shall be nominated from the vacant district at least one candidate for the office of trustee.
A candidate for each vacancy shall notice their interest in the vacant or expiring position by submitting a nominating petition to the Nominating committee of the Board at least 30 business days before the annual meeting. Each petition shall consist of the printed name, address, telephone number, and original and dated signature of not less than 25 members from the candidate’s district, and shall be signed by the candidate asserting their qualification for the position.
The Nominating committee shall review the petitions to determine that all signers are members and reside in said district, and that the nominee is qualified to serve.
A written profile of each nominee shall be required.
Section 6: Trustee Elections
The election of trustees shall take place in conjunction with the annual meeting of the members at which time members shall elect the number of trustees necessary to fill the position or positions of those whose terms have expired or been vacated.
Elections of trustees shall be determined by a plurality vote. If, after a recount, there is a tie for a trustee position, the winner shall be determined by a coin toss.
If, because of redistricting, 2 trustees whose terms have not expired represent the same district, an election shall be held between these two current trustees.
Section 7: Trustee Seating
At the next Board meeting following an election, all newly-elected trustees shall sign a statement verifying that they are qualified and have no conflict of interest that violates these Bylaws. The newly-elected trustees shall then be seated.
Section 8: Trustee Compensation
Trustees may not receive any salary for their services. By resolution, the Board may authorize payments to or for the benefit of trustees as a result of their performance in the position of trustee.
Section 9: Trustee Terms
Each elected trustee shall hold office for 3 years, or until a successor shall have been elected. The trustee terms shall be staggered so that no more than 3 trustee terms expire in any year.
Section 10: Trustee Resignation
A trustee may resign at any time by delivering written notice of resignation to the Board, the president, or secretary. Unless the written notice of resignation specifies a later date, a trustee’s resignation is effective upon receipt.
Section 11: Trustee Vacancies
Any trustee vacancy that occurs as the result of death, mental or physical incapacity, resignation, removal by the members or trustees, or disqualification shall be filled within sixty (60) business days by the Board. The appointee shall meet all the qualifications required of a trustee and shall serve until the next regular trustee election. A trustee vacancy which occurs within 60 business days of the next regular trustee election shall remain vacant until such time when the members can elect a trustee.
Section 12: Removal of Trustees by Members
Any member may initiate the removal of a trustee based upon disqualifications as set out in these Bylaws or based upon breach of the discharge of duties as a trustee by filing a statement of the basis for removal, in writing, with the secretary of the Board. This statement shall be in the form of a petition that includes the printed names, addresses, telephone numbers and original and dated signatures of at least 2,500 members.
The trustee whose removal is being sought shall be:
Informed in writing of the basis for removal at least five (5) days before the meeting at which the removal is being considered.
Given, along with those seeking removal, the opportunity at the meeting to be heard in person or by counsel, and to present evidence in respect to the allegations made supporting the removal.
If the Board determines that the trustee removal petition complies with these Bylaws, the Cooperative shall notice and hold a special member meeting within sixty (60) days following the Board’s determination. The question of the removal of such trustee shall be considered in conjunction with that meeting.
The Board shall meet regularly at the time, date and location within the Cooperative service territory determined by the Board. For good cause, the president or three or more trustees may change the date, time or location of a regular Board meeting but all trustees are entitled to written notice 10 days before such meeting.
Section 2: Special Board Meetings
The Board, the president, or at least 3 trustees may call a special meeting of the Board.
Section 3: Conduct of Board Meetings
Trustees shall attend regular Board meetings in person. Under exceptional circumstances a trustee may attend a regular Board meeting by telephone or electronic means of communication.
Special Board meetings or other meetings of the Board may be held in person or, under special circumstances, with any or all of the trustees participating by telephone or electronic means of communication.
If a quorum is present at any meeting, the president, vice-president, secretary and treasurer, in descending order, may preside at the Board meeting. If no officer is present, the trustees attending the meeting may elect a trustee to preside over the meeting.
Section 4: Notice of Trustees’ Meeting
Regular Board Meetings:
Any trustee not present at a regular Board meeting at which the time, date or location of a subsequent regular Board meeting is changed shall be entitled to notice of the change at least 10 days before the meeting.
Date, time and location of a regular Board meeting will be posted on the Cooperative’s website at least 3 business days prior to the regular Board meeting.
Special Board Meetings:
Notice of the time, place and purpose of any special Board meeting shall be delivered not less than 48 hours before the meeting, to each trustee.
Date, time and location of a special Board meeting will be posted on the Cooperative website at 24 hours prior to the special Board meeting.
For the purpose of this section, said notice may be given personally or by electronic means. Said notice shall be given either by or at the direction of the president or the secretary. Such notice shall be deemed to be delivered when sent or transmitted.
Section 5: Quorum and Voting
A quorum for Board meetings is a majority of the trustees in office immediately before a Board meeting begins. If a quorum is present at the time a matter is voted or acted upon, and unless the vote of a greater number of trustees is required, then the affirmative vote of a majority of trustees present is the act of the Board.
Section 1: Redistricting – Appointment of Redistricting Committee
Every 3 years staff shall generate a report of the current number of members in each district. If the deviation from the average number of members is greater than ± 10%, the Board shall appoint a redistricting committee comprising 1 officer of the Board, 1 then-serving member of the Board, and 3 at large members of the Cooperative. This committee shall present a written recommendation to the Board by August of the year preceding the possible redistricting. The committee’s recommendation shall propose revisions using natural geographic division lines when practical and providing that the membership in each district shall be as nearly equal as possible. The Board shall then review the committee’s recommendation at the next regular monthly meeting for adoption or rejection.
If the plan is rejected, it shall be returned to the committee for modification. If the Board rejects the committee’s proposal a second time, the Board shall be responsible for adopting a redistricting plan within 60 days of such rejection.
If the plan is adopted, the newly-proposed district boundaries shall be drawn at least sixty (60) days before the annual meeting, and the resulting districts shall be in effect for elections at the next annual meeting.
The officers of the Cooperative shall be the president, vice-president, secretary and treasurer, and these shall constitute the Executive Committee. The offices of secretary and treasurer may be held by the same person.
Section 2: Election & Term of Office
The officers shall be elected annually, by ballot, at the first meeting of the Board held after the annual meeting of the members. If, for any reason, the election cannot be held at such meeting, it shall take place at the next meeting of the Board. Election of any officer requires an affirmative vote of a majority of the Board.
Officers shall hold office until the first meeting of the Board following the next annual meeting of the members or until their successor(s) have been elected.
There shall be no term limits with the exception of that of the president, who shall serve a maximum of 3 consecutive one-year terms.
A vacancy in any office shall be filled by the Board for the unexpired portion of the term.
Section 3: Removal of Officers by Trustees
The Board may remove any officer it has elected or appointed whenever, in its judgment, such removal is in the best interest of the Cooperative.
Removal of any officer requires an affirmative vote of a majority of the Board.
Section 4: Delegation of Duties
Officers may delegate appropriate duties and responsibilities of their office to a non-Board member, Cooperative officer, employee, agent or representative, with Board approval.
Section 5: President
The president may exercise all authority prescribed by the Board or the members, and shall:
Be the principal executive officer of the Cooperative and, unless otherwise determined by the members of the Board, shall preside at all meetings of the members, and of the Board of Trustees;
On the Cooperative’s behalf, sign any document properly authorized or approved by the Board or members;
Perform all other duties, shall have all other responsibilities which the Board or the members prescribe;
Appoint any and all committees; and
Be an ex officio member of all standing and special committees with the exception of the Nominating Committee.
Section 6: Vice President
The vice president shall:
Upon the president’s death, absence, mental or physical disability, or refusal or inability to act, perform the duties and have the powers of the president;
Perform all other duties, have all other responsibilities, and exercise all other authority prescribed by the Board or the members; and
In the event of a vacancy arising in the office of president, assume the office until an election is held at the next meeting of the Board.
Section 7: Secretary
The secretary shall:
Be responsible for assuring that the minutes of all Board meetings, and meetings of the members, reflect the official action(s) taken at that meeting;
Affix the Cooperative’s seal to any document authorized or approved by the Board or members; and
Perform all other duties, have all other responsibilities, and exercise all other authority prescribed by the Board or members.
Section 8: Treasurer
The treasurer shall:
Perform all duties, have all responsibility, and exercise all authority prescribed by the Board or the members, unless otherwise determined by the Board or the members, and unless otherwise required by law, the Articles of Conversion, or these Bylaws.
Section 9: 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.
Section 10: Manager
The Board of Trustees shall hire a manager who shall serve according to the terms and conditions as the Board may require.
Section 11: Bonds
At the Cooperative’s expense, the Cooperative may purchase a bond covering any Cooperative trustee, officer, employee, agent or representative handling or having responsibility for custody of the Cooperative’s funds or property.
Each standing committee shall be composed of a chair, appointed by the president from the Board of Trustees, and as many additional members as needed. The additional members may be trustees, administrative staff, or members at large.
Committee Functions
The Board shall set forth policy outlining the function of each committee.
Term of Office
The term of office shall be 1 year.
Reporting
The chair of each standing committee shall report, if appropriate, at each annual meeting.
Vacancies
The president shall fill all vacancies.
Section 2: Special Committees
Establishment/Composition
Special committees may, at the discretion of the Board, be established as needed. Each committee shall be composed of a chair appointed by the president from the Board and as many additional members as needed. The additional members may be trustees, administrative staff, or members at large.
Term of Office
Special committees shall serve until their final report is submitted to the Board.
The Cooperative shall operate on a not-for-profit basis, shall operate on a cooperative basis for the mutual benefit of all members, and may not pay interest or dividends on capital furnished by members.
Section 2: Allocating Capital Credits
Members shall furnish and contribute to the Cooperative, and the Cooperative shall receive as capital all operating margins. Operating margins are defined to be all funds and amounts, received from its’ members for the provision of a Cooperative service, that exceed the Cooperative’s costs and expenses of providing that service.
For each Cooperative service, the Cooperative shall annually allocate to each member a credit to a capital account in accordance with state law.
Funds and amounts, other than operating margins that exceed the Cooperative’s costs and expenses may be:
allocated as capital credits to members in the same manner that the Cooperative allocates operating margins;
retained or used by the Cooperative as permanent non-allocated capital;
used to pay or offset any Cooperative cost or expense; or
used as otherwise determined and approved by the Board.
The amounts accumulating in each member’s capital account is known as Patronage Capital. The Cooperative shall annually notify each member of the dollar amount of capital credits allocated or credited to the member’s Patronage Capital account.
Section 3: Assignment of Capital Credits
Capital credited to the account of each member is assignable on the books of the Cooperative only pursuant to written instruction from the assignor and only to the Cooperative or to successors in interest or successors in occupancy in all or part of such member’s premises served by the Cooperative.
Section 4: Retiring and Refunding Capital Credits
At any time before the Cooperative’s dissolution or liquidation, and if the Board determines that the Cooperative’s financial condition shall not be adversely impacted and it complies with any lender’s requirements, the Board may authorize the Cooperative to, and the Cooperative shall, wholly or partially retire capital credits.
The Board shall determine the manner, method and timing of retiring capital credits as well as the type of distribution.
A terminated member’s capital credits shall be applied to any amounts owed to the Cooperative subject to the other provisions of the Bylaws.
In the closing of an account, the member may be offered a retirement of their capital credits at a discounted rate at the discretion of the Board.
The Board shall also have the power to provide for the special retirement of all allocated capital credits of a deceased member or of a member who is a natural person and is 75 years of age or older, provided that such retirement shall be on a discounted basis using a rate that shall be established from time to time by the Board to determine the then-current value of each capital credit account. The special retirement of capital credits shall be made only when the finances of the Cooperative and the cash available make such a retirement possible without impairing the financial condition of the Cooperative.
Upon the death of one member of a joint membership or upon the request of one member who has attained the age of 75 years or more, the joint membership shall terminate. The surviving or requesting member shall have the option of receiving Patronage Capital on a general retirement basis or ½ of the previously allocated Patronage Capital on a discounted basis.
The Board shall only provide a discounted special retirement authorized by subparagraphs E and F above after the death of a member who was a natural person. No such discounted special retirement shall be made if the member was a corporation, partnership, Limited Liability Company or any other business entity authorized to conduct business in the State of Montana.
Special retirements of capital credits are subject to discounting, the amount of which is retained by the Cooperative as permanent equity.
In the event of dissolution or liquidation of the Cooperative, after all outstanding debts of the Cooperative have been paid, outstanding capital credits shall be retired without priority on a pro rata basis.
