Article IV

ARTICLE IV
DIRECTORS

SECTION 4.01. Number and General Powers. The business and affairs of the Cooperative shall be managed by a Board of nine (9) Directors. The Board shall exercise all of the powers of the Cooperative except such as are by law or by the Cooperative’s Articles of Incorporation or By-laws conferred upon or reserved to the members.

SECTION 4.02. Qualifications. No person shall be eligible to become or remain a director of the Cooperative who:

1. is an employee of the Cooperative;
2. is not a member of good standing of the Cooperative;
3. is not receiving service from the Cooperative at his primary residence.

Further, no person shall be eligible to become or remain a director of, or to hold any other position of trust in, the Cooperative who is in any way employed by or financially interested in a competing enterprise, or a business selling electric energy or supplies to the Cooperative, or a business primarily engaged in selling electrical or plumbing appliances, fixtures or supplies to, among others, the members of the Cooperative. Upon establishment of the fact that a nominee for director lacks eligibility under this Section or as may be provided elsewhere in these By-laws, it shall be the duty of the chairman presiding at the meeting at which such nominee would otherwise be voted upon to disqualify such nominee. Upon the establishment of the fact that any person being considered for, or already holding, a directorship or other position of trust in the Cooperative lacks eligibility under this Section, it shall be the duty of the Board of Directors to withhold such position from such person, or to cause him to be removed therefrom, as the case may be. Nothing contained in this Section shall, or shall be construed to, affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors, unless a Director has failed to disclose his interest in the action, failed to abstain from the vote on it, and the action is unfair to the Cooperative.

SECTION 4.03. Election. At each annual meeting of the members, Directors shall be elected by secret written ballot by the members and, from among those members who are natural persons: PROVIDED, that, when the number of nominees does not exceed the number of Directors to be elected, and if there is no objection, secret written balloting may be dispensed with and voting may be conducted in any other proper manner. Directors shall be elected by a plurality of the votes cast unless the members, prior to the balloting, resolve that a majority of the votes cast shall be required to elect, and this By-law provision shall be brought to their attention and explained prior to any balloting. Drawing by lot shall resolve, where necessary, any tie votes.

SECTION 4.04. Election and Tenure of Office. Directors shall be elected for a term of three (3) years to succeed those Directors whose terms have expired. Upon their election, directors, shall, subject to the provisions of these By-laws with respect to the removal of directors, serve until the annual meeting of the members of the year in which their terms expire or until their successor shall have been elected and shall have qualified. If for any reason an election of directors shall not be held at an annual meeting of the members duly fixed and called pursuant to these By-laws, such election may be held at an adjournment of such meeting or at a subsequently held special or the next annual meeting of the members. Failure of an election for a given year shall allow the incumbents whose directorships would have been voted on to hold over only until the next member meeting at which a quorum is present.

SECTION 4.05. Nominations. It shall be the duty of the board to appoint not less than sixty (60) days before the date of the meeting of the members at which directors are to be elected, a committee on nominations consisting of not less than five (5) nor more than eleven (11) members who shall be selected so as to give equitable representation on the committee to the geographical areas served by the Cooperative. No officer or member of the board of directors shall be appointed a member of such committee. The committee shall prepare and post at the principal office of the Cooperative at least thirty (30) days before the meeting a list of nominations for directors, but any fifteen (15) or more members may make other nominations in writing over their signatures not less than sixty (60) days prior to the meeting and the Secretary shall post the same at the same place where the list of nominations made by the committee is posted. The Secretary shall mail with the notice of the meeting a statement of the number of directors to be elected and showing separately the nominations made by the committee on nominations and the nominations made by petition, if any. Nothing contained herein shall, however, prevent additional nominations to be made from the floor at the meeting of the members. No member may nominate more than one candidate.

SECTION 4.06. Voting for Directors; Validity of Board Action. In the election of Directors, each member shall be entitled to cast the number of votes (but not cumulatively) which corresponds to the total number of Directors that are to be elected, but no member may vote for more nominees than the number of Directors that are to be elected. Ballots marked in violation of the foregoing restriction shall be invalid and shall not be counted. Notwithstanding the provisions contained in this Section, failure to comply with any of such provisions shall not affect in any manner whatsoever the validity of any action taken by the Board of Directors after the election of Directors.

SECTION 4.07. Removal of Directors by Members. Any member may bring one or more charges for cause against anyone or more directors and may request the removal of such director(s) by reason thereof by filing with the Secretary such charge(s) in writing together with a petition signed by not less than ten percent (10%) of the total membership of the Cooperative, which petition calls for a special member meeting, the stated purpose of which shall be to hear and act upon such charge(s) and, if one or more directors are recalled to elect their successor(s), and which specifies the place, time and date thereof not less than sixty (60) days after filing of such petition. Each page of the petition shall, in the forepart thereof, state the name(s) and address(es) of the member(s) filing such charge(s), a verbatim statement of such charge(s) and the name(s) of the director(s) against whom such charge(s) is (are) being made. The petition shall be signed by each member in the same name as he/she is billed by the Cooperative and shall state the signatory’s address as the same appears on such billings. Notice of such charge(s) verbatim, of the director(s) against whom the charge(s) have been made, of the member(s) filing the charge(s) and the purpose of the meeting shall be contained in the notice of the meeting, or separately noticed to the members not less than seven (7) days prior to the member meeting at which the matter will be acted upon:

PROVIDED, that the notice shall set forth only twenty (20) of the names (in alphabetical order) of the members filing one or more charges if twenty (20) or more members file the same charge(s) against the same director(s). Such director(s) shall be informed in writing of the charge(s) after they have been validly filed and at least twenty (20) days prior to the meeting of the members at which the charge(s) are to be considered, and shall have an opportunity at the meeting to be heard in person, by witnesses, by a counsel or any combination of such, and to present evidence in respect of the charge(s); and the person(s) bringing the charge(s) shall have the same opportunity, but must be heard first. The question of removal of such director(s) shall, separately for each if more than one has been charged, be considered and voted upon at such meeting, and any vacancy created by such removal shall be filled by vote of the members at such meeting without compliance with the foregoing provisions with respect to nominations, except that nominations shall be made from the floor;

PROVIDED, that the question of the removal of a director shall not be voted upon at all unless some evidence in support of the charge(s) against him have been presented during the meeting, through oral statements, documents or otherwise. A newly elected director shall serve the unexpired portion of the removed director’s term.

SECTION 4.08. Vacancies. Subject to the provision of these By-laws with respect to the filling of the vacancies caused by the removal of board members by the members, a vacancy occurring in the board shall be filled by the affirmative vote of a majority of the remaining board members for the unexpired portion of the term.

SECTION 4.09. Compensation Expenses. Directors shall, as determined by a resolution of the Board of Directors, receive on a per diem basis, a fixed fee, for (a) attending meetings of the Board of Directors and for (b) the performance of other Cooperative business when such has had prior approval of the Board of Directors for the performance of other Cooperative business. Directors shall also receive advancement or reimbursement of any travel and out-of-pocket expenses actually, necessarily and reasonably incurred and further may receive such health insurance benefits as are furnished to Cooperative employees from time to time. No director shall receive compensation for serving the Cooperative in any other capacity, nor shall any close relative of a director receive compensation for serving the Cooperative, unless the payment and amount of such compensation shall be specifically authorized by a vote of the members of such payment and amount shall be specifically authorized by the Board of Directors upon their certification of such as an emergency measure;
PROVIDED, that a director who is also an officer of the Board and who as such officer performs regular and periodic duties of a substantial nature for the Cooperative in its affairs, may be compensated in such amount as shall be fixed and authorized in advance of such service by the Board of Directors.

SECTION 4.10. Rules, Regulations, Rate Schedules, and Contracts. The Board of Directors shall have the power to make, adopt, amend, abolish and promulgate such rules, regulations, rate schedules, contracts, security deposits and any other types of deposits, payments or charges, including contributions in aid of construction, not inconsistent with laws or the Cooperative’s Articles of Incorporation of By-laws, as it may deem advisable of the Cooperative.

SECTION 4.11. Accounting System and Reports. The Board of Directors shall cause to be established and maintained a complete accounting system of the Cooperative’s financial operations and condition, and shall, after the close of each fiscal year, cause to be made a full, complete and independent audit of the Cooperative’s accounts, books and records reflecting financial operations during, and financial condition as of the end of such year. A full and accurate summary of such audit reports shall be submitted to the members at or prior to the succeeding annual meeting of the members. The Board may authorize special audits, complete to partial, at any time and for any specified period of time.

SECTION 4.12. Subscription to Cooperative’s Newsletter; Subscription to Statewide Publication. Payment for electric energy shall include, for each member, a subscription to any publication of the Cooperative and the Association of Illinois Electric Cooperatives.

SECTION 4.13. “Close Relative” Defined. As used in these By-laws, “close relative” means a person who, by blood or in law, including step and adoptive kin is either a spouse, child, grandchild, parent, grandparent, brother, sister, aunt, uncle, nephew, or niece of the principal; however, no person shall be disqualified by reason of this definition in Section 13 and its application in Section 9 above in the event that said person is deemed to be a close relative of a director solely as a result of the marriage of some other person which occurs after the person became either a director or employee.