CODE OF REGULATIONS
FRONTIER AFFILIATED SERVICES COMPANY
The aim of Frontier Affiliated Services Company (hereinafter called the "Cooperative") is to make propane and propane products, and other resources and services (hereinafter called "Products, Resources and Services") available to its members.
Section 1. Requirements for Membership. The subscribers to the Articles of Incorporation shall be members of the Cooperative. In addition to such subscribers, any person, firm, association, corporation, body politic or subdivision thereof will become a member of the cooperative upon receipt of any of those Products, Resources and Services provided by the Cooperative, provided that said member has first:
(a) Made a written application for membership therein;
(b) Agreed to purchase from the Cooperative Products, Resources and Services as hereinafter specified, or as specified in a written policy or policies of the Cooperative;
(c) Agreed to comply with and be bound by the Articles of Incorporation and Code of Regulations of the Cooperative and any rules and regulations adopted by the Board of Trustees of the Cooperative; and
(d) Paid the membership fee hereinafter specified.
No member may hold more than one membership, regardless of whether said member is furnished with more than one source of Products, Resources and Services, in the Cooperative (or be entitled to more than one vote), and no memberships in the Cooperative shall be transferable, except as provided in this Code of Regulations.
Section 2. Evidence of Membership. Membership in this Cooperative shall be evidenced by a properly executed application, and the issuance of a certificate of membership which shall be in such form and shall contain such provisions as shall be determined by the Board of Trustees, in compliance with Article I, Section 1. Only one person or entity shall sign a membership application.
No membership certificates shall be issued for less than the membership fee established by the Board, nor until such membership fee has been paid in full. Such certificates shall be signed by the Chairman and by the Secretary of the Cooperative, by either manual signing or by facsimile signature and the corporate seal shall be affixed thereto.
Section 3. Lost Certificates. In case of a lost, destroyed, or mutilated certificate, a new certificate may be issued therefor upon such terms and such indemnity to the Cooperative as the Board of Trustees may prescribe.
Section 4. Membership. Applications for joint membership shall not be accepted.
Section 5. Membership Fee. The membership fee shall be established by the Board, payment of which shall make the member eligible for membership.
Section 6. Purchase of Products, Resources and Services. Each member shall purchase from the Cooperative one or more of those Products, Resources and Services used on the premises specified in the application for membership to the extent specified in such application or in any applicable contract between such member and the Cooperative or any affiliate of the Cooperative. It is expressly understood that amounts paid for Products, Resources and Services in excess of the cost of services are furnished by members as capital and each member shall be credited with the capital so furnished as provided in the Code of Regulations. Each member shall pay to the Cooperative such minimum amounts per month regardless of the amount of Products, Resources and Services consumed, as shall be fixed by the Board of Trustees from time to time. Each member shall also pay all amounts owed by member to the Cooperative as and when the same shall become due and payable.
Section 7. Expulsion of Members. The Board of Trustees of the Cooperative may, by the affirmative vote of not less than two-thirds (2/3) of the Trustees present, expel any member who shall have violated or refused to comply with any of the provisions of the Articles of Incorporation of the Cooperative or this Code of Regulations or any rules or regulations or policies adopted from time to time by the Board of Trustees. Any member so expelled may be reinstated as a member by a majority vote of the members at any annual or special meeting of the members. The action of the members with respect to any such reinstatement shall be final.
Section 8. Care of Premises; Responsibility Therefor. Responsibility for meter tampering or bypassing and for damage to Cooperative properties: Each member shall cause all premises receiving Products, Resources and Services pursuant to the said membership to become and to remain connected to said Products, Resources and Services in accordance with any applicable Federal, State or local government ordinances and regulations, rules, and policies of the Cooperative. Each member shall be responsible for and shall indemnify the Cooperative and any other person against death, injury, loss or damage resulting from any defect in or improper use or maintenance of such premises and lines and apparatus connected thereto or used thereon. Each member shall make available to the Cooperative a suitable site, as determined by the Cooperative, whereon to place the Cooperative's physical facilities for the furnishing and metering of Products, Resources and Services and shall permit the Cooperative's authorized employees, agents and independent contractors to have access thereto for inspection, maintenance, replacement, relocation or repair thereof at all reasonable times. As part of the consideration for such Products, Resources and Services, each member shall be the Cooperative's bailee of such facilities and shall accordingly desist from interfering with, impairing the operation of or causing damage to such facilities, and shall use said member's best efforts to prevent others from so doing. In the event such facilities are interfered with, impaired in their operation or damaged by the member, or by any other person when the member's reasonable care and surveillance could have prevented such, the member shall indemnify the Cooperative and any other person against death, injury, loss or damage resulting therefrom, including but not limited to the Cooperative's cost of repairing, replacing, or relocating any such facilities and its loss, if any, of revenues resulting from the failure or defective functioning of its metering equipment. In no event shall the responsibility to the Cooperative extend beyond the point at which its service lines are attached to the member's facilities provided for measuring Products, Resources and Services used on such premises, except that the Cooperative shall, in accordance with its applicable Products, Resources and Services rules and regulations, indemnify the member for any overcharges for Products, Resources and Services that may result from a malfunctioning of its metering equipment.
Section 9. Transfer and Termination of Membership. Membership in the Cooperative and a certificate of membership representing the same shall not be transferable, except as hereinafter otherwise provided, and upon the death, cessation of existence, expulsion or withdrawal of a member, the certificate of membership of such member shall be surrendered forthwith to the Cooperative. Termination of membership in any manner shall not release the member from the debts or liabilities of such member to the Cooperative.
Section 10. Non-liability for Debts of the Cooperative. The private property of the members of the Cooperative shall be exempt from execution for the debts of the Cooperative and no member shall be individually liable for any duties or liabilities of the Cooperative.
Section 11. Withdrawal of Membership. Any member may withdraw from membership upon payment-in full of all debts and liabilities of such member of the Cooperative and upon compliance with such terms and conditions as the Board of Trustees may prescribe.
Section 12. Removal of Trustees and Officers. Any member may bring charges against any officer or trustee for misfeasance or malfeasance in office by filing such charge in writing with the Secretary, together with a petition signed by ten per centum (10%) of the members, requesting the removal of the officer or trustee in question. The removal shall be voted upon at the next annual or special meeting of the members and any vacancy created by such removal may be filled by the members at such meeting, provided that in the case of the removal of the trustee or officer the person elected to fill the vacancy shall be the same voting district as the trustee who has been removed. The trustee or officer against whom such charges have been brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present evidence, and the persons bringing the charges against said trustee or officer shall have the same opportunity.
Section 13. Furnishing Services to Non-Members. Nothing contained in this Article, or elsewhere in this Code of Regulations shall be deemed or construed to prevent or prohibit the Cooperative from generating, manufacturing, purchasing, acquiring, or accumulating Products, Resources and Services for non-members, or from transmitting, distributing, furnishing, selling or disposing of such Products, Resources and Services to, or rendering Products, Resources and Services to non-members, nor to prohibit the Cooperative from executing and performing franchise or other contracts with political subdivisions or bodies politic providing for the furnishing of Products, Resources and Services or rendering of Products, Resources and Services to such subdivisions or bodies, or the citizens thereof, in the manner prescribed by law.
Section 14. Area Coverage. The Cooperative may extend Products, Resources and Services to all persons within the Cooperative's service area who:
(a) desire such Products, Resources and Services and
(b) meet all reasonable requirements established by the Cooperative as a condition of such Products, Resources and Services.
The Cooperative's service area shall be whatever area is designated from time to time by the Board of Trustees.
Meetings of Members
Section 1. Annual Meetings. The annual meeting of the members shall be held in the service area on or before the twentieth day of August in each year beginning with the year of 2000, upon such date and at such hour as the Board of Trustees shall determine for the purpose of electing trustees, passing upon reports covering the previous fiscal year and transacting such other business as may come before the meeting. However, the first annual meeting at which trustees shall be elected by the members shall be in the year 2001. Until then, the trustees named in the Articles of Incorporation shall serve as trustees. If the election of trustees shall not be held on the day designated herein for any annual meeting, or at any adjournment thereof, the Board of Trustees shall cause the election to be held at a meeting of the members as soon thereafter as conveniently may be. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Cooperative.
Section 2. Special Meetings. Special meetings of the members may be called by the President, by the Board of Trustees, or a majority thereof, or by a petition signed by not less than a majority of all the members of the Cooperative. Special meetings of the members may be held at any place within the service area, specified in the notice of the special meeting.
Section 3. Notice of Members' Meetings. Written or printed notice stating the place, day and hour of the meeting; and, in case of a special meeting, the purposes for which the meeting is called, shall be delivered, either personally or by mail, by or at the direction of the President or the Secretary or the persons calling the meeting, to each member of the Cooperative. Said notice shall be given at least fifteen days before the date fixed for the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the Untied States mails, addressed to the member at his address as it appears on the records of the Cooperative with the postage thereon prepaid.
Section 4. Failure to Receive Notice. The failure of any member to receive any such notice of an annual meeting or special meeting of the members shall not invalidate any action which may be taken by the members at any such annual or special meeting. The attendance of a member at any meeting shall constitute a waiver of notice of such meeting, unless he shall attend for the express purpose of objecting to the transaction of any business because the meeting shall not have been lawfully called or convened.
Section 5. Quorum. The members entitled to vote present in person, voting by mail, electronic means or any combination thereof shall constitute a quorum.
Section 6. Voting. Each member shall be entitled to one vote and no more upon each matter submitted to a vote at a meeting of the members and at all meetings of the members at which a quorum is present, all questions shall be decided by a vote of a majority of the members voting except as otherwise provided by law, the Articles of Incorporation or this Code of Regulations. The election of trustees shall be by ballot and each member shall have the right to cast one vote for each trustee to be elected at such election and the number of candidates equal to the number of trustees to be elected receiving the highest number of votes shall be elected for the term specified in Section 2 of Article III of this Code of Regulations. The means of voting may include a vote in person, a vote by mail, or a vote by electronic means, according to the instructions accompanying the ballot determined by the Board of Trustees, which shall govern the validity of the votes. Voting by proxy will not be allowed. If the member is a firm, association, corporation, partnership, body politic, or subdivision, a duly authorized representative shall cast the vote.
Section 7. Order of Business. The order of business at the annual meeting of the members, and as far as possible at all other meetings of the members, shall be as follows:
1. Call to order.
2. Reading of the notice of the meeting together with proof of the due mailing thereof or of the waiver or waivers of notice of the meeting.
3. Presentation of unapproved minutes of previous meetings of the members and the taking of necessary action thereon.
4. Presentation and consideration of, and acting upon reports of officers, trustees and committees.
5. Election of trustees.
6. Unfinished business.
7. New business.
Section 1. General Powers. The business and affairs of the Cooperative shall be managed by a board of five (5) trustees after the annual meeting of the members in the year 2001, which shall exercise all of the powers of the Cooperative except such as are by law or by the Articles of Incorporation or by this Code of Regulations conferred upon or reserved to the members. Until the annual meeting of members in the year 2001, the business and affairs of the Cooperative shall be managed by a board of seven (7) trustees named in the Articles of Incorporation.
For the purpose of electing trustees, the territory in which the members of the Cooperative live shall be divided into the following districts:
District A shall comprise the following territory: Coshocton County, Muskingum County and Licking County. This district shall be represented by two (2) trustees.
District B shall comprise the following territory: Holmes County, Tuscarawas County, Guernsey County and Knox County. This district shall be represented by two (2) trustees.
The entire service area of the cooperative shall be represented by one (1) Trustee-At-Large.
Section 2. Qualification and Tenure. No person shall be eligible to become or remain a trustee of the Cooperative who:
a) Is not a bona fide Cooperative member;
b) Has not been a member of the Cooperative for at least (3) most recent prior years;
c) Is in any way employed by or has been an employee within the previous five
(5) years of the Cooperative or any subsidiary of the Cooperative; or
d) Is a close relative of any existing Trustee or employee. Close relative means a person who, by blood or in law, including half, foster, step and adoptive kin, is either a spouse, child, parent, brother, or sister of the principal
Trustees shall hold office for three years and until his successor is elected and qualified. The Board shall divide the service area of the Cooperative into two (2) Districts so that equitable representation may be given to the geographic areas served by the Cooperative. The Board shall have the power to change the boundaries of such Districts whenever in their opinion the purpose of the section requires a change. District A shall be represented by two (2) trustees, District B shall be represented by two (2) trustees and the entire service area shall be represented by one (1) trustee-at-large. In order for the terms of the trustees to be staggered, one trustee in District A and one trustee in District B elected at the annual meeting of members in the year 2001 shall serve an initial term of two years and the trustee-at-large elected at the annual meeting of members in the year 2001 shall serve an initial term of four (4) years. Thereafter, all trustees shall hold office for three (3) years and until his successor is elected and qualified.
Section 3. Vacancies. Subject to the provisions of Article VI, Section 5 hereof, vacancies occurring in the Board of Trustees between annual meetings of the members of the Cooperative shall be filled by a majority vote of the remaining trustees. Trustees thus elected shall serve until the next annual meeting of the members and until their successors shall have been elected and shall have qualified.
Section 4. Compensation. Trustees as such shall not receive any salary for their services but by resolution of the Board of Trustees a fixed sum and expenses of attendance, if any, may be allowed for attendance at each meeting of the Board of Trustees; provided, that nothing herein contained shall be construed to preclude any trustee from serving the Cooperative in any other capacity and receiving compensation therefore.
Section 5. Rules and Regulations. The Board of Trustees shall have power to make and adopt such rules and regulations, not inconsistent with the Articles of Incorporation or this Code of Regulations or the laws of the State of Ohio, as it may deem advisable for the management, administration and regulation of the business and affairs of the Cooperative.
Section 6. Accounting System and Reports. The Board of Trustees shall cause to be established and maintained a complete accounting system, in accordance with accepted standards and accounting principles. All accounts of the Cooperative shall be examined by the Board of Trustees at least four times a year at regular meetings of the Board. The Board of Trustees shall also within sixty (60) days after the close of each fiscal year cause to be made 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 following annual meeting.
Section 7. Nominations. It shall be the duty of the Board to appoint, not less than thirty (30) days nor more than ninety (90) days before the date of the meeting of the members at which members of the Board are to be elected, a committee on nominations consisting of not less than three (3) nor more than five (5) members who shall be selected so as to insure equitable representation on the committee to the geographic area constituting the service area of the Cooperative. The nominating committee shall nominate at least two (2) candidates from each district for each position for a board member representing such district which is to be filled at the next annual meeting of members or at any meeting held in lieu thereof. The nominating committee shall nominate at least two (2) candidates from within the entire service area for the position of trustee-at-large when said position is to be filled at the next annual meeting of members or at any meeting held in lieu thereof. The nominating committee shall be furnished a list of all members in the district from which a member is to be elected to the Board and each member will be considered as a potential member to the Board. The nominating committee before making its final selection shall call to the attention of each nominee the qualifications, duties and responsibilities of a Board member and the nominee will advise the nominating committee whether or not he will serve if elected. Any nominee may be withdrawn by stating that he is not willing to serve on the Board. No person shall be voted upon for membership on the Board who has not signified his willingness to serve if elected.
Section 8. Membership in Other Organizations. The Trustees shall have full power and authority to authorize the Cooperative to purchase stock or to become a member of or merge with any Corporation, Cooperative, or other organization whose purposes are related to the functions and purposes of this Cooperative.
Rights and Liabilities of Members
Section 1. Property Interest of Members. Upon dissolution, after (a) All debts and liabilities of the Cooperative have been paid, and (b) All capital furnished through patronage has been retired as provided in this Code of Regulations, the remaining property and assets of the Cooperative shall be distributed among the members and former members in the proportion which the aggregate patronage of each bears to the total patronage of all members during the ten years next preceding the date of the filing of the certificate of dissolution.
Section 2. Non-liability for Debts of the Cooperative. The private property of the members shall be exempt from execution or other liability for the debts of the Cooperative and no member shall be liable or responsible for any debts or liabilities of the Cooperative.
Meetings of Trustees
Section 1. Regular Meetings. A regular meeting of the Board of Trustees shall be held without notice other than this Code of Regulations immediately after, and at the same place as, the annual meeting of the members. The purpose of this meeting shall be to elect officers of the Cooperative for the next ensuing year. A regular meeting of the Board of Trustees shall also be held at defined regular intervals and at such time and place within the State of Ohio, as the Board may provide by resolution. Such regular meetings may be held without notice other than such resolution fixing the time and place thereof.
Section 2. Special Meetings. Special meetings of the Board of Trustees may be called by the President or any three (3) trustees. The person or persons authorized to call special meetings of the Board of Trustees may fix the time and place for the holding of any special meeting of the Board of Trustees called by them.
Section 3. Notice. Notice of the time, place and purpose of any special meeting shall be given at least two (2) days previous thereto, by written notice, delivered personally or mailed to each trustee at his last known address. Notice may also be given by any reasonable method calculated to notify a trustee, including but not limited to telephone, facsimile transmission or E-mail. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. The attendance of a trustee at any meeting shall constitute a waiver of notice of such meeting, unless he shall attend for the express purpose of objecting to the transaction of any business because the meeting shall not have been lawfully called or convened.
Section 4. Quorum. A majority of the Board shall constitute a quorum, provided that if less than such majority of the Board is present at said meeting, a majority of the Board present may adjourn the meeting from time to time; and provided further, that the Secretary shall notify any absent Board members of the time and place of such adjourned meeting. The act of a majority of the Board members present at a meeting at which a quorum is present shall be the act of the Board, except as otherwise provided in this Code of Regulations.
Section 5. Action of Trustees without a Meeting. Any action which may be authorized or taken at a meeting of the Board may be authorized or taken without a meeting in a writing or writings signed by all of the members of the Board.
Section 1. Number. The officers of the Cooperative shall be a President, Vice-President, Secretary, Treasurer, General Manager and such other officers as may be determined by the Board from time to time. The offices of Secretary and Treasurer may be held by the same person.
Section 2. Election and Term of Office. Each officer, except the General Manager and any officer appointed pursuant to Section 3 of this Article VI, shall be elected annually by and from the Board at the meeting of the Board held immediately 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 following the next succeeding annual meeting of the members or until his successor shall have been elected and shall have qualified, subject to the provisions of this Code of Regulations with respect to the removal of officers. The General Manager shall be chosen and employed by the Board of Trustees. A vacancy in any office shall be filled by the Board for the unexpired portion of the term.
Section 3. Additional Officers. In addition to the officers specified in Section 1 of this Article VI, the Board, in its discretion, may appoint one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as may be deemed necessary or desirable who shall have such duties and authority as generally pertains to their respective officers and such as may be prescribed by the Board, and who shall hold office for such period as may be prescribed by the Board.
Section 4. Resignations. Any officer may resign at any time by giving written notice to the Board, or to the President or to the Secretary of the Cooperative. Any such resignation shall take effect at the time specified therein and unless otherwise specified therein the acceptance of such resignation shall not be necessary to make it effective.
Section 5. Vacancies. A vacancy in any office, except that of General Manager, may be filled by the Board for the unexpired portion of the term. In the event of a vacancy in the office of General Manager, the Board shall choose and employ a General Manager upon terms and conditions which the Board considers to be in the best interests of the Cooperative.
Section 6. President. The President shall:
(a) be the principal executive officer of the Cooperative and, unless otherwise determined by the members or the Board, shall preside at all meetings of the members and the Board;
(b) on behalf of the Cooperative, subject to the direction and instruction of the Board, sign, with the Secretary, certificates of membership and may sign any deeds, mortgages, deeds of trust, notes, bonds, financing statements, security agreements, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by this Code of Regulations to some other officer or agent of the Cooperative, or shall be required by law to be otherwise signed or executed;
(c) in general perform all duties incident to the office of President and such other duties as may be prescribed by the Board from time to time.
Section 7. Vice President. In the absence of the President, or in the event of his 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. The Vice President shall also perform such other duties as from time to time may be assigned to him by the Board or by the President.
Section 8. Secretary. The Secretary shall be responsible for:
(a) keeping the minutes of the meetings of the members and of the Board in books provided for that purpose;
(b) seeing that all notices are duly given in accordance with this Code of Regulations or as required by law;
(c) the safekeeping of the corporate books and records and the seal of the Cooperative and affixing the seal of the Cooperative or a facsimile thereof to all certificates of membership prior to the issue thereof, and to all documents, the execution of which on behalf of the Cooperative under its seal is duly authorized in accordance with the provisions of this Code of Regulations;
(d) keeping a register of the names and post office addresses of all members;
(e) signing, with the President, certificates of membership;
(f) keeping on file at all times a complete copy of the Articles of Incorporation and Code of Regulations 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, furnishing a copy of the Code of Regulations and of all amendments thereto to any member upon request; and
(g) in general performing 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.
Section 9. Assistant Secretary. The Assistant Secretary, if one is appointed by the Board pursuant to Section 3 of this Article VI, need not be a member of the Board and he shall hold office until relieved by the Board. He shall assist the Secretary in the performance of the Secretary's duties as requested by the Secretary or by the Board.
Section 10. Treasurer. The Treasurer shall be responsible for:
(a) custody of all funds and securities of the Cooperative;
(b) the receipt of and the issuance of receipts for all moneys due and payable to the Cooperative and for the deposit of all such moneys in the name of the Cooperative in such bank or banks as shall be selected in accordance with the provisions of this Code of Regulations; and
(c) 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.
Section 11. Assistant Treasurer. If an Assistant Treasurer is appointed by the Board pursuant to Section 3 of this Article VI, he need not be a member of the Board and he shall hold office until relieved by the Board. He shall assist the Treasurer in the performance of the Treasurer's duties as requested by the Treasurer or by the Board.
Section 12. General Manager. The General Manager shall:
(a) be the chief administrative officer responsible for the general direction, coordination and control of all operations in accordance with the policies adopted by the Board, subject to the direction and instruction of the Board;
(b) have supervision over and be responsible for the operations of the Cooperative
and, in performing this duty, carry out and administer the policies adopted by the Board;
(c) prepare for the Board of Trustees such reports and budgets as are necessary to inform the Board concerning the operation of the Cooperative; and
(d) in general perform all duties incident to the office of General Manager as chief administrative officer and perform such other duties as may from time to time be assigned to him by the Board.
Section 13. 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 with such surety as the Board shall determine. The Board 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 14. Compensation. The powers, duties and compensation of officers, agents and employees shall be fixed by the Board.
Section 15. 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 1. Contracts. Except as otherwise provided in this Code of Regulations, the Board 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 2. Checks, Drafts, Etc. All checks, drafts and other orders for payment of money, and all notes, bonds or other evidences of indebtedness issued in the name of the Cooperative shall be signed 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.
Section 3. Deposits. All funds except working funds of the Cooperative shall be deposited from time to time to the credit of the Cooperative in such bank or banks as the Board may select.
Section 4. Fiscal Year. The fiscal year of the Cooperative shall begin on the first day of January of each year and shall end on the thirty-first day of December of the same year.
Section 1. 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 members and patrons. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its members and patrons.
Section 2. Patronage Capital in Connection with Furnishing Products, Resources and Services. In the furnishing of Products, Resources and Services, the Cooperative's operations shall be so conducted that all members and patrons, 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 members and patrons for all amounts received and receivable from the furnishing of Products, Resources and Services in excess of operating costs and expenses properly chargeable against the furnishing of Products, Resources and Services. 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 members and patrons as capital. The Cooperative is obligated to pay by credits to a capital account for each member all such amounts in excess of operating costs and expenses unless otherwise agreed upon in writing or by contract. 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 member is clearly reflected and credited in an appropriate record to the capital account of each member, and 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 his account. All such 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.
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, allocated to its members and patrons on a patronage basis and any amount so allocated shall be included as part of the capital credited to the accounts of members and patrons, as herein provided.
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 account of property rights of members and patrons. If, at any time prior to dissolution or liquidation, the Board shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital credited to members' and patrons' accounts may be retired in full or in part. The Board of Trustees shall determine the method, the basis, the priority, the assignment of patronage, if any, and the order of retirement, if any, for all amounts furnished as capital.
Notwithstanding any other provision of the Code of Regulations, the Board at its discretion, shall have the power at any time upon the death of any member and patron, who was a natural person, if the legal representatives of his estate shall request in writing that the capital credited to any such member and patron be retired prior to the time such capital would otherwise be retired under the provisions of this Code of Regulations, to retire capital credited to such member and patron immediately upon such terms and conditions as the Board, acting under policies of general application, and the legal representatives of such member's estate shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.
It is the responsibility of every past or present member or his legal representative or heirs to keep the Cooperative advised of his current address.
The members and patrons of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Incorporation and Code of Regulations shall constitute and be a contract between the Cooperative and each member and patron, and both the Cooperative and the members and patrons are bound by such contract, as fully as though each member and patron had individually signed a separate instrument containing such terms and provisions. The provisions of this article of the Code of Regulations shall be called to the attention of each member and patron of the Cooperative by posting in a conspicuous place in the Cooperative's office.
Notwithstanding any other provision of this Code of Regulations or other provision of the membership certificate, if any member and patron or former member and patron fails to claim any cash retirement of capital credits or other payment from the Cooperative within four years after payment of the same has been made available to him by notice or check mailed to him, at his last address, furnished by him to the Cooperative, such failure shall be and constitutes an irrevocable assignment and gift by such member and patron of such capital credit or other payment to the Cooperative. Failure to claim any such payment within the meaning of this section shall include the failure by such member and patron or former member and patron to cash any check mailed to him by the Cooperative at the last address furnished by him to the Cooperative. The assignment and gift provided for under this section shall become effective only upon the expiration of four (4) years from the date when such payment was made available to such member and patron or former member and patron without claim therefor and only after the further expiration of sixty (60) days following the giving of a notice by mail and publication that unless such payment is claimed within said (60) day period such gift to the Cooperative shall become effective. The notice by mail herein provided for shall be one mailed by the Cooperative to such member and patron or former member and patron at the last known address and the notice by publication shall be two (2) consecutive insertions in a newspaper circulated in the serve area by the Cooperative, which may be the Cooperative newsletter. The sixty (60) day period following the giving of such notice shall be deemed to terminate sixty (60) days after the mailing of such notice or sixty (60) days following the last date of publication thereof, whichever is later.
Disposition of Property
The Cooperative shall not sell, mortgage, lease or otherwise dispose of or encumber all or any substantial portion of its property or merge or consolidate with any other corporation unless such sale, mortgage, lease, other disposition, encumbrance, merger or consolidation is authorized at a meeting of the members thereof by the affirmative vote of not less than a majority of all the members of the Cooperative, and unless the notice of such proposed sale, mortgage, lease, other disposition, encumbrance, merger or consolidation shall have been contained in the notice of the meeting; provided, however, that notwithstanding any other provision of this Article, the Board of the Cooperative, without authorization by the members thereof, shall have full power and authority to authorize the execution and delivery of mortgages, deeds of trust, security agreements and financing statements or otherwise pledging, encumbering, subjecting to a lien or security interest, 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 terms and conditions as the Board shall determine, to secure any indebtedness of the Cooperative to the United States of America or any instrumentality or agency thereof or to any other bona fide lender, lending institution or investor; provided, further, however, that notwithstanding any other provision of this Article, the Board 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, or merge or consolidate with, another nonprofit corporation.
The corporate seal of the Cooperative shall have inscribed thereon the name of the Cooperative and the words "Corporate Seal, Ohio," but failure to affix such seal shall not affect the validity of any instrument duly executed on behalf of the Cooperative by its authorized officers.
Section 1. Waiver of Notice. Any member or Board member may waive in writing any notice of a meeting required to be given by this Code of Regulations. The attendance of a member or Board member at any meeting shall constitute a waiver of notice of such meeting by such member or Board member, except in case a member or Board member shall attend a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.
Section 2. Policies, Rules and Regulations. The Board shall have power to make and adopt such policies, rules and regulations, not inconsistent with law, the Articles of Incorporation or this Code of Regulations, as it may deem advisable for the management, administration and regulation of the business and affairs of the Cooperative.
Indemnification of Board Members and Officers
Section 1. Each board member and officer now or hereafter serving the Cooperative, and each person who at the request of or on behalf of the Cooperative is now serving or hereafter serves as a trustee, director or officer of any other corporation, and the respective heirs, executors, and administrators of each of them, shall be indemnified by the Cooperative against all costs, expenses, judgments, decrees, fines, penalties and liabilities, including attorneys' fees, actually and necessarily incurred by or imposed upon him in connection with or resulting from any action, suit or proceeding, civil or criminal, in which he is or may be made a part by reason of his being or having been such Board member, trustee, director or officer, or by reason of any action alleged to have been taken or omitted by him as such Board member, trustee, director or officer whether or not he is a Board member, trustee, director or officer at the time of incurring such costs, expenses, judgments, decrees, fines, penalties and liabilities; provided, however, that the indemnification provided for in this Section 1 shall be made only if such Board member, trustee, director or officer:
(a) is adjudicated or determined not to have been negligent or guilty of misconduct in the performance of his duties to the Cooperative or the corporation of which he is or was a trustee, director or officer;
(b) is determined to have acted in good faith in what he reasonably believed to be the best interest of such corporation, and
(c) in any matter the subject of a criminal action, suit or proceeding, is determined to have had no reasonable cause to believe that his conduct was unlawful.
The determination as to (b) and (c), and in the absence of an adjudication as to (a) by a court of competent jurisdiction, the determination as to (a), shall be made by the Board acting at a meeting at which a quorum is present consisting of the Board members who are not parties to or threatened with any such action, suit, or proceeding as that giving rise to the matter. Any Board member who is a party to or threatened with any such action, suite, or proceeding shall not be qualified to vote and, if for this reason a quorum of the Board cannot be obtained to vote on such indemnification, no indemnification shall be made unless a determination is made as to (a), (b) and (c) above by submission to an arbitrator appointed pursuant to the rules of the American Arbitration Association for determination, and said arbitration shall be conducted in accordance with the rules of said Association. Such indemnification shall be made with respect to adjudication other than on the merits and shall extend to settlements and compromises.
Section 2. The right of indemnification provided for by Section 1 of this Article XII shall not be exclusive of any other rights to which a Board member, trustee, director or officer may be entitled under any law, agreement, vote of shareholders, vote of members, any insurance purchased by the Cooperative, or otherwise.
This Code of Regulations may be altered, amended or repealed at any regular or special meeting of the members at which a quorum is present by the affirmative vote of a majority of the members voting provided notice of the proposed alteration, amendment or repeal shall have been given, and also provided that no article, section, or sub-section of this Code of Regulations shall be altered, amended, or repealed by an affirmative vote which is less in number or different in character than the affirmative vote required for action under said article, section, or sub-section.
ADOPTED AND SUBSCRIBED this 27th day of May , 1999.