Bylaw Change - 2019
NOTICE OF PROPOSED AMENDMENTS TO THE BYLAWS OF FREEBORN-MOWER COOPERATIVE SERVICES
Members of Freeborn-Mower Cooperative Services are hereby notified of proposed changes to update the cooperatives's Bylaws. These proposed changes were approved by the board of directors on July 25, 2019.
- The proposed changes must now proceed to a vote of the cooperative membership
- Mail ballots and Bylaw change information will be mailed to all members in late August. Mail ballots must be returned by noon on September 23, 2019 to the cooperative office.
- A Special Meeting open to the membership will be held on Tuesday, September 24, 2019 following the Board of Director's meeting at the cooperative office 2501 E. Main St., Albert Lea MN. Ballots will be counted on that day. The results will be printed in the October 2019 County Lines Newsletter
Only sections of the Bylaws in which there is a proposed change are printed here. The areas of change are by blue bolding strike throughs (indicating text is eliminated) and red bolding with underlining (new text or numbering added). The complete Bylaws are available on our website under the About Us tab or through a request to our office.
MEETINGS AND ELECTION OF DIRECTORS
SECTION 7. Voting
Each member shall be entitled to one (1) vote and no more, regardless of the number of services to which the member subscribes, upon each matter submitted to a vote at a meeting of the members. 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 thereon at such meeting in person, except as otherwise provided by law, the Articles of Incorporation of the Cooperative, or these Bylaws. If spouses hold a joint membership they shall jointly be entitled to cast one (1) vote on behalf of the membership and no more upon each matter submitted to a vote at a meeting of the members. Unless the member has indicated otherwise in writing, the spouse of a member shall be entitled to vote on behalf of the member on any vote of the members. Mail voting and electronic voting is authorized for any vote concerning an election of Directors, or a change in the District Boundaries.
SECTION 9. Nomination and Election of Directors
For each district in which a Board of Director position will be expiring, the Board of Directors shall determine a date for filing of applications by persons interested in serving as a Director. The Cooperative will give notice of such open position, the qualifications for membership on the Board of Directors, the district boundaries, the election process and the final date for filing, all in the Cooperative newsletters published for three consecutive months preceding the last date for filing applications to serve as a director for a term that is expiring. Any member of such district, interested and qualified to serve as a Director may apply to be a Director-nominee by filing an application on forms available from the Cooperative. Such application must be filed in the office of the Cooperative by the date so indicated. After the period for filing applications has expired, persons may still be nominated for election as a Director by the filing of a petition. Following the expiration of the date for filing of applications, the Cooperative will post a notice in the succeeding Cooperative newsletter and will mail a notice to members within such district advising them of current applications and a final date to submit a signed petition for nomination as a Director. In order to become a nominee for director by petition, the petition must be signed by fifteen members of the district supporting the candidacy of a particular nominee and must be submitted to the Cooperative office by said final date. If only one person has filed an application or been nominated in the petition process, such applicant or nominee shall be deemed elected. If more than one person has filed an application or been nominated in the petition process, ballots will be mailed or sent electronically by the Cooperative or its third party designee, to every member of the district, with biographical information for each candidate and a ballot, accompanied by a ballot envelope and a return envelope where applicable. A final date for submitting mailed or electronic ballots will be determined by the Board of Directors. Ballots must be either sent by mail postmarked by the final date determined by the Board of Directors or
received submitted electronically at the Cooperative office or delivered in person to the Cooperative office by said date. On a date determined by the Board of Directors, the Board shall appoint three (3) independent tellers, who must be members of the district for which an election is being conducted, and who are selected by the Board of Directors (but excluding from participation any nominee and director who is an applicant or a nominee for election), said tellers to meet and conduct a tally of the votes. The Board shall also have the authority to appoint an independent third-party designee to conduct the tally of the votes. The candidate who receives the most votes will be deemed elected and then seated as a director of said district at the next annual meeting of the Cooperative. If the ballots result in a tie, the ballots will have one re-count. In the event the ballots still result in a tie, the winner will be determined as follows:
1) If the tie is between two candidates, the winner will be selected by the flip of a coin. Both candidates will be invited to be present for the coin flip.
2) If the tie is between two or more candidates, the winner will be determined by drawing lots (names) to determine the winner. All affected candidates will be invited to be present for such drawing.
SECTION 2. Qualifications, Exceptions and Disqualifications
No person shall be eligible to become or remain a director of the Cooperative who:
(1) is not a natural person and a member of the Cooperative, receiving service at the member’s primary residence in the district from which the director is elected;
(2) within five (5) years preceding a director candidate’s nomination was or during service on the Board of Directors is finally adjudged to be guilty of a felony;
(3) Within three (3) years preceding a director candidate’s nomination was an employee of the Cooperative;
(3)(4) is an employee of the Cooperative or a grandparent, parent, spouse, co-habitant, child, or grandchild of an employee of the Cooperative;
(4)(5) is a person that is a grandparent, parent, spouse, co-habitant, child, or grandchild of an incumbent director whose district seat is not up for re-election at that time;
(5)(6) is in any way employed by or substantially financially interested in an enterprise competing with the Cooperative or any Cooperative-affiliated business;
(6)(7) is or becomes the full-time employee or agent of, or who is or becomes the full-time employer or principal of, another director;
(7)(8) is engaged in conduct that is a violation of law or violation of a Cooperative policy or policies, or whenever a director has materially failed to satisfy his/her duties as a director, including the duty to regularly attend meetings of the Board of Directors; or
(8)(9) is employed by, materially affiliated with, or has a financial interest in, any individual or entity possessing a material or substantial conflict of interest with the Cooperative or a Cooperative subsidiary.
For purposes of this Section 2, financially interested shall not include beneficial ownership of less than 5% of the bonds or the combined voting power of all issued and outstanding voting securities of a publicly held corporation whose stock is traded on a major stock exchange or quoted on NASDAQ. Provided, a member that is operating as a corporation, may select an individual stockholder, officer, or other employee of the corporation actively employed by the corporation, to be eligible for election to the Board.
(b) Exceptions. In regard to the restrictive provisions of this Section that are based upon close relative relationships, no incumbent director shall lose eligibility to remain a director or to be re-elected a director if, during a director’s incumbency, a director becomes a first kindred relative of another incumbent director or of a Cooperative employee because of a marriage or an adoption to which the director was not a party.
(c) Disqualification. After the Board of Directors determines that a director, a nominee or a candidate for director lacks eligibility under the provisions of these Bylaws, it shall be the duty of the Board to promptly make a disqualification. After the Board of Directors determines that any person being considered for, or already holding, a directorship lacks eligibility, it shall be the duty of the Board to withhold such position from such person or to cause a director to be removed therefrom, as the case may be. The Board of Directors shall determine whether or not a person is qualified to become or remain a director of the Cooperative.
Nothing in this section contained shall, or shall be construed to, affect in any manner the validity of any action taken at any meeting of the Board of Directors.
SECTION 1. Patronage Capital in Connection with Furnishing Electric Energy and Other Selected Services
In the furnishing of electric energy and other selected cooperative services, 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, within a particular operating division or allocation unit, whether the units are functional, divisional, departmental, geographic, or otherwise, for all amounts received and receivable from the furnishing of electric energy or other cooperative services to patrons within such allocation units. Subject to the provisions hereof relating to adjustments between and among allocation units, all such amounts in excess of operating costs and expenses and reserves at the moment of receipt by the Cooperative are received with the under-standing that they are furnished by the patrons within such allocation units as capital. Subject to the provisions hereof relating to adjustments between and among allocation units, the Cooperative is obligated to pay by credits to the capital account for each patron all such amounts in excess of operating costs and expenses and reserves. 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 the Cooperative shall within a reasonable time after the close of the calendar year notify each patron, member and non-member alike, of the amount of capital so credited to the member’s allocation unit and to the member’s account. All such amount 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.
If an operating division or allocation unit incurs losses in one or more years, such losses shall be assigned on the books of the Cooperative to participating members based on their patronage of that sub-unit in the loss years. No patronage margin allocations shall be made to members with accumulated loss balances until such members’ prior year loss assignments have been offset with either their allocable margins from other pools in which they participate, or, if none are available, subsequent year margin allocations. The Cooperative has the right to offset accumulated losses of withdrawing members with any previously allocated capital credits. If the withdrawing member does not have a positive capital credit balance, then any remaining loss shall be offset against the Cooperative’s reserves.
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, and at the discretion of the Board of Directors, either credited to the reserves of the Cooperative or 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.
In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, out-standing capital credits shall be retired without priority on a pro rata basis before any payments are made on account of property rights of members. All remaining amounts shall be paid to current and former members for the past 20 years based on the percentage obtained by dividing each member’s cumulative patronage by all member’s cumulative patronage. 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 the patron’s accounts may be retired in full or in any part.
The Board of Directors shall determine the allocation, method, basis, priority and order of retirement, if any, for all amounts heretofore and hereafter furnished as capital on the basis of allocation units; provided, however, that the Board of Directors shall have the power to adopt rules providing for the separate retirement of that portion (power supply portion) of capital credited to the accounts of patrons which corresponds to capital credited to the account of the Cooperative by an organization furnishing electric service to the Cooperative. Such rules shall (a) establish a method for determining the power supply portion of capital credited to each patron for each applicable fiscal year, (b) provide for separate identification on the Cooperative’s books of the power supply portion of capital credited to the Cooperative’s patrons, (c) provide for appropriate notification to patrons with respect to the power supply portion of capital credited to their accounts and (d) preclude a general retirement of the power supply portion of capital credited to patrons for any fiscal year prior to the general retirement of other capital credited to patrons for the same year or of any capital credited to patrons for any prior fiscal year.
Capital credited to the account of each patron shall be assignable only on the books of the Cooperative pursuant to written instructions from the assigner
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, if the legal representatives of the estate of any such deceased patron, 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 s the Board of Directors, acting under the policies of general application, and such legal representatives shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.
The Board of Directors, at its discretion, shall have the power at any time upon the dissolution of any corporation or limited liability company, if the legal representative of the corporation or company shall request in writing that the capital credited to such company be retired prior to the time such capital would otherwise be retired under provisions of these Bylaws, to retire capital credited to any such corporation or company immediately upon such terms and conditions as the Board of Directors, acting under the policies of general application, and such legal representatives shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby. For purposes of this paragraph, “dissolution” shall be defined as the filing of a Notice of Intent to Dissolve, Statement of Dissolution or such similar notice as require by the Secretary of State.
The patrons of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Incorporation 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. The provisions of this Article of the Bylaws shall be called to the attention of each patron of the Cooperative by posting the same in a conspicuous place in the Cooperatives office.