ABOUT SMECO
The aim of the Southern Maryland Electric Cooperative, Inc., is to make electric energy available to its members at the lowest cost consistent with sound economy and good management.
SMECO
A cooperative owned by its members,
Dedicated to providing reliable, competitively priced
energy and related services,
Committed to its community
and to enhancing the quality of life in Southern Maryland.
Mission statement,
adopted September 21, 2004.
Section 1.01 Requirements for Membership. Any individual or entity with the capacity to enter legally binding contracts may become a member in the Southern Maryland Electric Cooperative, Inc., (hereinafter called the "Cooperative") by:
(a) agreeing to purchase from the Cooperative electric power or energy and/or electric distribution services;
(b) agreeing to comply with and be bound by the Articles of Conversion and bylaws of the Cooperative; the Articles of Conversion and bylaws shall constitute a contract between the Cooperative and each member, and both the Cooperatives and the members are bound by such contract, as fully as though each member had individually signed a separate instrument containing such terms and provisions; and
(c) having a service connection.
No member may hold more than one membership in the Cooperative and no membership in the Cooperative shall be transferable.
Section 1.02 Evidence of Membership. Membership in the Cooperative shall be evidenced by compliance with Section 1.01.
Section 1.03 Joint Membership. Any two persons residing in the same household may apply for a joint membership and, subject to their compliance with the requirements set forth in Section 1.01 of this Article, will be accepted for such membership. The term "member" as used in these bylaws shall be deemed to include two persons residing in the same household holding a joint membership and any provisions relating to the rights and liabilities of membership shall apply equally with respect to the holders of a joint membership. Without limiting the generality of the foregoing, the effect of the hereinafter specified actions by or in respect to the holders of a joint membership shall be as follows:
(a) The presence at a meeting of either or both shall be regarded as the presence of one member and shall have the effect of constituting a joint waiver or notice of the meeting.
(b) The vote of either separately or both jointly shall constitute one vote.
(c) Notice to either shall constitute notice to both.
(d) Expulsion of either shall terminate the joint membership.
(e) Withdrawal of either shall terminate the joint membership.
(f) Either but not both may be elected or appointed as an officer or director, provided that both meet the qualifications for such office.
Section 1.04 Conversion of Membership.
(a) A membership may be converted to a joint membership upon the written request of the holder thereof and the agreement by such holder and one other household resident to comply with the Articles of Conversion, bylaws, and rules and regulations adopted by the Board of Directors. A joint membership may be converted into an individual membership with the written consent of both parties.
(b) Upon the death of either holder of the joint membership, such membership shall be held solely by the survivor. Upon notification of the death of a joint member, the Cooperative will note the change on its official records of membership, provided, however, that the estate of the deceased shall not be released from any debts due the Cooperative.
Section 1.05 Purchase of Electric Distribution Service. Each member shall purchase from the Cooperative all electric distribution service purchased for use on the premises specified, and shall pay therefore at rates which shall from time to time be fixed by the Board of Directors. It is expressly understood that amounts paid for electric distribution service in excess of the cost of service are furnished by members as capital and each member shall be credited with the capital so furnished as provided in these bylaws. Each member shall pay to the Cooperative such minimum amount per month regardless of the amount of electric energy consumed, as shall be fixed by the Board of Directors from time to time. Each member shall also pay all amounts owed by him to the Cooperative as and when the same shall become due and payable. Production or use of electric energy on such premises, regardless of the source thereof, by means of facilities which shall be inter-connected with Cooperative facilities, shall be subject to appropriate regulations as shall be fixed from time to time by the Cooperative.
Section 1.06 Termination of Membership. Any member may withdraw from membership upon compliance with such uniform terms and conditions as the Board of Directors may prescribe. The Board of Directors of the Cooperative may, by the affirmative vote of not less than two-thirds of all the directors, expel any member who shall have refused or failed to comply with any of the provisions of the Articles of Conversion, bylaws, or rules and regulations adopted by the Board of Directors, but only if such member shall have been given written notice by the Secretary of the Cooperative that such refusal or failure makes him liable to expulsion and such refusal or failure shall have continued for at least ten days after such notice was given. Any expelled member may be reinstated by vote of the Board of Directors or by vote of the members at any annual or special meeting.
Upon the withdrawal, death, cessation of existence, or expulsion of a member, the membership of such member shall thereupon terminate. A membership will be terminated if electric distribution service has been discontinued. Termination of membership in any manner shall not release a member from any debt due the Cooperative.
Section 2.01 Property Interest to Members. Upon dissolution, after (a) all debts and liabilities of the Cooperative shall have been paid, and (b) all capital furnished through patronage shall have been retired as provided in these bylaws, 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 seven years next preceding the date of the filing of the certificate of dissolution.
Section 2.02 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 individually liable or responsible for any debts or liabilities of the Cooperative.
Section 3.01 Annual Meeting. The annual meeting of the members shall be held at a day and hour and at such places in the counties of Charles, St. Mary’s, Prince George’s, or Calvert, State of Maryland, as shall be determined by the Board and designated in the notice of the meeting, for the purpose of electing directors, passing upon reports for the previous fiscal year and transacting such other business as may come before the meeting. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Cooperative.
Section 3.02 Special Meetings. Special meetings of the members may be called by a resolution of the Board of Directors, or upon a written request signed by a majority of directors, by the Chairperson, or by ten per centum or more of all the members and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. Special meetings of the members may be held at any place within the service area of the Cooperative, specified in the notice of the meeting.
Section 3.03 Notice of Members’ Meetings. Written or printed notice stating the place, day and hour of the meeting, and in case of a special meeting or an annual meeting at which business other than that listed in Section 3.07 of this article is to be transacted, the purpose or purposes for which the meeting is called, shall be delivered before the date of the meeting, either personally or by mail, by or at the direction of the Secretary, or upon a default in duty by the Secretary, by the persons calling the meeting, to each member. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the member at his address as it appears on the records of the Cooperative with postage thereon prepaid. In case of a joint membership, notice given to either party shall be deemed notice to both. The failure of any member to receive notice of an annual or special meeting of the members shall not invalidate any action which may be taken by the members at any such meeting.
Section 3.04 Quorum. Five hundred (500) registered members shall constitute a quorum. If less than five hundred (500) members are registered for any meeting, a majority of those present may adjourn the meeting from time to time without further notice. The business that would have been transacted at such meeting will be held over until the next annual meeting.
Section 3.05 Credentials and Election Committee. The Board of Directors shall, at least ten (10) days before any meeting of the members, appoint a Credentials and Election Committee consisting of an odd number of members not less than five (5) nor more than twenty-nine (29), who are not close relatives or members of the same household of existing directors or known candidates for directors to be elected at such meeting. In appointing the committee, the Board shall have regard for equitable representation of the several areas served by the Cooperative. It shall be the responsibility of the committee to pass on all questions that may arise with respect to the registration of members, to monitor the tallying of all ballots cast in any election or in any other ballot vote taken, and to rule upon the effect of any ballots irregularly marked. The committee’s decision on all such matters shall be final.
Section 3.06 Voting. Each member shall be entitled to only one vote. All questions shall be decided by a vote of a majority of the members voting thereon except as otherwise provided by law, the Articles of Conversion or these bylaws, provided, however, that one of the holders of a joint membership may vote. Voting by organizations which are unincorporated shall be by any one of the partners, trustees or members. Corporations, including municipal corporations and churches, shall be by the properly appointed agent who may not cast more than three such votes.
For the convenience of the members, voting may be conducted by such methods as determined by the Board of Directors. Registration and voting may occur earlier than or on the same day of the annual meeting at such times and places and by such methods as determined by the Board of Directors.
Section 3.07 Order of Business. The order of business at the annual meeting of members and, so far as possible, at all other meetings of the members, shall be essentially as follows:
1. Report as to the number of members registered in order to determine the existence of a quorum.
2. Reading of the notice of the meeting and proof of the due publication of mailing thereof, or the waiver or waivers of notice of the meeting, as the case may be.
3. Election of Directors.
4. Reading of unapproved minutes of previous meeting of the members and the taking of necessary action thereon.
5. Presentation and consideration of reports of officers, directors and committees.
6. Unfinished business.
7. New business.
8. Adjournment.
Section 4.01 General Powers. The business and affairs of the Cooperative shall be managed by a Board of fifteen (15) directors which shall exercise all of the powers of the Cooperative except such as are by law, the Articles of Conversion or these bylaws, conferred upon or reserved to the members. The directors shall be apportioned by county as follows: Charles County, five (5); St. Mary’s County, five (5); Calvert County, three (3); and Prince George’s County, two (2).
Section 4.02 Qualifications and Tenure. Directors shall be elected for staggered terms so that one-third of the Board of Directors will be elected each year to serve for a term of three (3) years. There shall be five directorships placed in each of the three term classifications. No person shall be eligible to become or remain a director who:
(a) is not a member and bonafide resident in the area served by the Cooperative; or
(b) is in any way employed by or financially interested in an enterprise that regularly, directly, and substantially competes with or does business with the Cooperative; or
(c) s the incumbent of or candidate for an elective public office in connection with which salary or compensation in excess of one hundred dollars ($100) per annum is paid; or
(d) has been convicted of a felony.
Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions, it shall immediately become incumbent upon the Board of Directors to remove such director from office.
Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors.
Section 4.03 Nominations. It shall be the duty of the Board of Directors to appoint, not less than sixty (60) days nor more than one hundred eighty (180) days before the date of a 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 from different sections of the service area so as to ensure equitable representation. No member of the Board of Directors may serve on such committee. The committee, keeping in mind the principle of geographical representation, shall prepare and post at the principal office of the Cooperative at least sixty (60) days before the meeting a list of nominations for directors, but any fifteen (15) or more members acting together may make other nominations by petition not less than sixty (60) days prior to the meeting and the Secretary shall post such nominations 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 the names and addresses of the candidates, specifying separately the nominations made by the committee on nominations and also the nominations made by petition, if any. Notwithstanding anything contained in the section, failure to comply with any of the provisions of this section shall not affect in any manner whatsoever the validity of any election.
Section 4.04 Removal of Directors by Members. Any member may bring charges against a director by filing such charges in writing with the Secretary, together with a petition signed by at least ten per centum of the members, and request the removal of such director by reason thereof. The director against whom such charges have been brought shall be informed in writing of the charges at least five (5) days prior to the meeting at which the charges are to be considered and shall have an opportunity at the meeting to be heard in person or by counsel and to present evidence in respect to the charges; and the person or persons bringing the charges against him shall have the same opportunity. The question of the removal of such director shall be voted upon at the next regular or special meeting of the members and any vacancy created by such removal may be filled by vote of the members at such meeting without compliance with the foregoing provisions with respect to the nominations.
Section 4.05 Vacancies. Subject to the provisions of these bylaws with respect to the filling of vacancies caused by the removal of directors by the members, a vacancy occurring in the Board of Directors shall be filled by the affirmative vote of a majority of the remaining directors for the unexpired portion of the term of the director in respect of whom the vacancy occurs.
Section 4.06 Compensation. Directors as such shall not receive any salary for their services, but, by resolution of the Board of Directors, the Board may from time to time set an appropriate sum, if any, for time and expenses associated with their actions and performance and, for Directors Emeritus, their continuing relationship on behalf of the Cooperative; provided, however, that directors shall be entitled to receive such benefits as may from time to time be offered directors of rural electric cooperatives under programs sponsored by the National Rural Electric Cooperative Association, or others.
The Cooperative shall indemnify its directors, officers, agents and employees and may purchase insurance to cover such indemnification against all liability arising out of their acts in their official capacities, if they shall have acted in good faith and deemed such acts to be in the best interest of the Cooperative, or not against its best interests.
Section 4.07 Oath of Office . Prior to any person assuming the office of director, such person must subscribe to the following oath or affirmation: "I do solemnly swear (or affirm) that I will support the Constitution and the laws of the United States of America, the Constitution and the laws of the State of Maryland, and the Bylaws of the Southern Maryland Electric Cooperative, Inc., that I will faithfully discharge according to the best of my ability the duties of my office during such time as I am a Director of Southern Maryland Electric Cooperative, Inc., and that I will never knowingly do or cause to be done any act or deed which would not be in the best interest of the Cooperative and its membership."
Section 5.01 Regular Meetings. A meeting of the Board of Directors may be held, without notice other than this bylaw, immediately after and at the same place as the annual meeting of the members. A meeting of the Board of Directors other than a special meeting shall be held monthly at such time and place within the service area of the Cooperative as the Board of Directors may provide by resolution. Such monthly meetings may be held without notice other than such resolution fixing the time and place thereof. The Board of Directors may, by resolution, establish more than one monthly meeting.
Section 5.02 Special Meetings. Special meetings of the Board of Directors may be called by the Chairperson or by a majority of directors and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. The Chairperson or the directors calling the meeting shall fix the time and place for the holding of the meeting.
Section 5.03 Notice of Directors’ Meetings. Written notice of the time, place and purpose of any special meeting of the Board of Directors shall be delivered to each director, either personally or by mail, by or at the direction of the Secretary, or upon a default in duty by the Secretary, by the Chairperson or the directors calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the director at his address as it appears on the records of the Cooperative, with postage thereon prepaid.
Section 5.04 Quorum. A majority of the Board of Directors shall constitute a quorum, provided that, if less than such majority of the directors is present at said meeting, a majority of the directors present may adjourn the meeting from time to time and, provided further that, the Secretary shall notify any absent directors of the time and place of such adjourned meeting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, except as otherwise provided by these bylaws.
Section 6.01 Number and Title. The officers of the Cooperative shall be a Chairperson, Vice Chairperson, Secretary, Treasurer, Assistant Secretary-Treasurer and the President and Chief Executive Officer, who shall not be a member of the Board of Directors, and such other officers as may from time to time be determined by the Board of Directors. The offices of Secretary and Treasurer may be held by the same person.
Section 6.02 Election and Term of Office. The officers shall be elected annually by and from the Board of Directors at the meeting of the Board of Directors held directly after the annual meeting of the members. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until the first meeting of the Board of Directors following the next succeeding annual meeting of the members or until his successor shall have been elected and shall have qualified. A vacancy in any office shall be filled by the Board of Directors for the unexpired portion of the term.
Section 6.03 Removal of Officers and Agents. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interest of the Cooperative will be served thereby.
Section 6.04 Chairperson. The Chairperson shall:
(a) be the principal executive officer of the Cooperative, and unless otherwise determined by the members or the Board of Directors, shall preside at all meetings and meetings of the Board of Directors;
(b) sign, with the Secretary, any deeds, mortgages, deeds of trust, notes, bonds, contracts or other instruments authorized by the Board of Directors to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the Board of Directors or by these bylaws to some other officer or agent of the Cooperative, or shall be required by law to be otherwise signed or executed; and
(c) in general, perform all duties incident to the office of Chairperson and such other duties as may be prescribed by the Board of Directors from time to time.
Section 6.05 Vice Chairperson. In the absence of the Chairperson or in the event of his inability or refusal to act, the Vice Chairperson shall perform the duties of the Chairperson, and when so acting, shall have all powers and be subject to all restrictions upon the Chairperson. The Vice Chairperson shall also perform such other duties as from time to time may be assigned to him by the Board of Directors.
Section 6.06 Secretary. The Secretary shall be responsible for:
(a) keeping the minutes of the meetings of the members and of the Board of Directors in one or more books provided for that purpose;
(b) seeing that all notices are duly given in accordance with these bylaws or as required by law;
(c) the safe keeping of the corporate records and of the seal of the Cooperative and affixing the seal of the Cooperative to all documents, the execution of which on behalf of the Cooperative under its seal is duly authorized in accordance with the provisions of these bylaws;
(d) keeping a register of the names and post office addresses of all members;
(e) keeping on file at all times a complete copy of the Articles of Conversion and bylaws of the Cooperative containing all amendments thereto, which copy shall always be open to the inspection of any member, and at the expense of the Cooperative, forwarding a copy of the bylaws and of all amendments thereto to each member; and
(f) the general performance of all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors.
Section 6.07 Treasurer. The Treasurer shall be responsible for:
(a) custody of all funds and securities of the Cooperative;
(b) the receipt of and the issuance of receipts for moneys due and payable to the Cooperative from any source whatsoever, and for the deposit of all such moneys in the name of the Cooperative in such banks as shall be selected in accordance with the provision of these bylaws; and
(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 of Directors.
Section 6.08 Assistant Secretary-Treasurer. In the absence of the Secretary or Treasurer, or in the event of his inability or refusal to act, the Assistant Secretary-Treasurer shall perform the duties of the Secretary or Treasurer, and when so acting, shall have all powers and be subject to all restrictions upon the Secretary or Treasurer. The Assistant Secretary-Treasurer shall also perform such other duties as from time to time may be assigned to him by the Board of Directors.
Section 6.09 President and Chief Executive Officer. The Board of Directors may appoint a President and Chief Executive Officer who shall serve as the Chief Executive Officer, and who shall not be a director but shall be required to be a member of the Cooperative. The President and Chief Executive Officer shall perform such duties and exercise such authority as the Board of Directors may from time to time vest in him/her.
Section 6.10 Bonds of Officers. The Treasurer and any other officer or agent of the Cooperative charged with responsibility for the custody of any of its funds or property shall be bonded in such sum and with such surety as the Board of Directors shall determine. The Board of Directors, in its discretion, may also require any other officer, agent or employee of the Cooperative to be bonded in such amount and with such surety as it shall determine.
Section 6.11 Compensation. The powers, duties and compensation of any officers, agents, and employees shall be fixed by the Board of Directors, subject to the provisions of these bylaws with respect to compensation for directors and close relatives of directors.
Section 6.12 Reports. The officers of the Cooperative shall submit at each annual meeting of the members reports covering the business of the Cooperative for the previous fiscal year. Such reports shall set forth the condition of the Cooperative at the close of such fiscal year.
Section 7.01 Interest or Dividends on Capital Prohibited. The Cooperative shall at all times be operated on a cooperative non-profit basis for the mutual benefit of its patrons. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its patrons.
Section 7.02 Patronage Capital in Connection with Furnishing Electric Distribution Service. In the furnishing of electric distribution service, the Cooperative’s operations shall be so conducted that all patrons, members and non-members alike, will through their patronage furnish capital for the Cooperative. In order to induce patronage and to assure that the Cooperative will operate on a non-profit basis, the Cooperative is obligated to account on a patronage basis to all its patrons, members and non-members alike, for all amounts received and receivable from the furnishing of electric distribution service in excess of operating costs and expenses properly chargeable against the furnishing of electric distribution service. All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the patrons, members and non-members alike, as capital. The Cooperative is obligated to pay by credits to a capital account for each patron all such amounts in excess of operating costs and expenses. The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each patron, and the Cooperative shall within a reasonable time after the close of the fiscal year, give a general notice sufficient to enable each patron to compute his own amount of capital so credited to his account. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital. All other amounts received by the Cooperative from its operation in excess of costs and expenses shall, insofar as permitted by law, be (a) used to offset any losses incurred during the current or any prior fiscal year and (b) to the extent not needed for that purpose, allocated to its patrons on a patronage basis and any amount so allocated shall be included as a part of the capital credited to the accounts of patrons, as herein provided.
In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, outstanding Capital Credits shall be retired without priority on a prorata basis before any payments are made on account of property rights of members. If, at any time prior to dissolution or liquidation, the Board of Directors shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital then credited to patrons’ accounts may be retired in full or in part. The Board of Directors shall determine the method, basis, priority and order of retirement. Effective with refunds made after 1992, if on retirement of capital, any refund is a diminimis amount as determined by the Board of Directors, it will be donated by the patrons to the permanent capital of the Cooperative.
Capital credited to the account of each patron shall be assignable only on the books of the Cooperative pursuant to written instruction from the assignor and only to successors in interest or successors in occupancy in all or part of such patron’s premises served by the Cooperative unless the Board of Directors, acting under policies of general application, shall determine otherwise.
Notwithstanding any other provision of these bylaws, the Board of Directors, at its discretion, shall have the power at any time upon the death of any patron, who was a natural person, if the legal representatives of his estate shall request in writing that the capital credited to any such patron be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such patron immediately upon such terms and conditions as the Board of Directors, acting under the policies of general application and the legal representatives of such patron’s estate shall agree upon, provided, however, that the financial condition of the Cooperative will not be impaired thereby.
The patrons of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Conversion and bylaws shall constitute and be a contract between the Cooperative and each patron, and both the Cooperative and the patrons are bound by such contract, as fully as though each patron had individually signed a separate instrument containing such terms and provisions. Patrons whose membership has terminated with the Cooperative and who have retained an interest in Capital Credits shall continue to be subject to the provisions regarding retirement as enumerated in this section. The provisions of this article of the bylaws shall be called to the attention of each patron of the Cooperative by posting in a conspicuous place in the Cooperative’s office.
Section 7.03 Assignment and Gift by Failure to Claim.
(a) Notwithstanding any other provisions of the bylaws, if any patron or former patron fails to claim any cash retirement of Capital Credits from the Cooperative within three (3) years after payment of the same has been made available to said patron or former patron, such failure shall be and constitutes an assignment and gift by such member of such Capital Credits to the Cooperative. Cash retirement of Capital Credits is made available by mailing the Capital Credit check to the last address provided to the Cooperative. If said check is returned as undeliverable then all future refunds are deemed to be made available to said patron or former patron at the time the refund amount is recorded to their Capital Credit account. No additional checks will be mailed until the patron or former patron provides the Cooperative with an updated address.
(b) Failure to claim any such payment within the meaning of this section shall include the failure of such patron or former patron to cash said Capital Credit check mailed by the Cooperative to the last address provided by said patron or former patron to the Cooperative.
(c) The assignment and gift provided for under this section shall become effective only upon the expiration of three (3) years from the date when such payment of Capital Credits was made available to such patron or former patron without claim therefore and only after further expiration of sixty (60) days following the giving of a Notice by mail or publication that unless such payment is claimed within sixty (60) days, such gift to the Cooperative for the benefit of its members shall become effective and irrevocable.
(d) The notice by mail herein provided shall be one mailed by the Cooperative to such patron or former patron at the last known address. If notice by publication is given, such publication shall be one insertion in a newspaper circulated in the service area of the Cooperative.
(e) The sixty (60) day period following the giving of such notice, either by mail or publications, shall be deemed to terminate sixty (60) days after the mailing or publication of such notice.
(f) Any such funds that revert to the Cooperative shall be credited to the Cooperative’s General Fund and be used to reduce the cost of electricity to the members.
Section 8.01 Execution of Mortgages, Deeds of Trust or Pledges. The Board of Directors of the Cooperative shall have full power and authority, without authorization by the members thereof, to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises, and permits of the Cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such conditions as the Board of Directors shall determine to secure any indebtedness of the Cooperative to the United States of America, to any agency or instrumentality thereof, to a national financing institution, organized on a cooperative plan for the purpose of financing its members’ programs, projects and undertakings in which the Cooperative holds membership, or to any other financing institution.
Section 8.02 Authority of Members. The Cooperative may not sell, lease or otherwise dispose of all or a substantial portion of its property unless such sale, lease or other disposition is authorized at a meeting of the members thereof by the affirmative vote of not less than a majority of all of the members of the Cooperative; and unless the notice of such proposed sale, lease or other disposition shall have been contained in the notice of the meeting; provided, however, that notwithstanding any other provisions of the Maryland Electric Cooperative Act, or any other provision of law, the Board of Directors may, upon the authorization of a majority of those members of the Cooperative registered at a meeting of the members thereof, sell, lease or otherwise dispose of all or a substantial portion of its property to another cooperative or a foreign Corporation doing business in this State pursuant to the above Act or to the holders of any notes, bonds or other evidences of indebtedness of the Cooperative issued to the United States of America or any agency or instrumentality thereof.
Section 9.01. The corporate seal of the Cooperative shall be in the form of a circle and shall have inscribed thereon the name of the Cooperative and the words "Corporate Seal, Maryland."
Section 10.01 Contracts. Except as otherwise provided in these bylaws, the Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name and on behalf of the Cooperative, and such authority may be general or confined to specific instances.
Section 10.02 Check, Drafts, etc. Except as otherwise provided by law or in these bylaws, all checks, drafts, or other orders for the payment of money, and all notes, bonds, or other evidences of indebtedness issued in the name of the Cooperative shall be signed and countersigned by such officer or officers, agent or agents, employee or employees of the Cooperative and in such manner as shall from time to time be determined by resolution of the Board of Directors.
Section 10.03 Deposits. All funds of the Cooperative, except petty cash, shall be deposited from time to time to the credit of the Cooperative in such bank or banks as the Board of Directors may select.
Section 10.04 Change of Rates. Written notice shall be given to the Administrator of the Rural Utilities Service of the United States of America not less than ninety (90) days prior to the date upon which any proposed change in the rates charged by the Cooperative for electric distribution service becomes effective.
Section 10.05 Fiscal Year. The fiscal year of the Cooperative shall begin the first (1st) day of January of each year and end on the thirty-first (31st) day of December of the same year.
Section 11.01 Organizations‑Affiliations and Memberships. The Board of Directors shall have full power and authority to authorize the Cooperative to purchase stock in or become a member of any local, state, or national organization, corporation, or cooperative organized on a for-profit or non-profit basis for the purpose of engaging in rural electrification, promoting the interests of the Cooperative’s members, or furthering the objectives and principles of the Cooperative. The Board of Directors shall also have full power and authority to authorize the Cooperative to form, or have formed, such business entities as are beneficial to the financial well-being, operation, and viability of the Cooperative.
Section 11.02 Waiver of Notice. Any member or director may waive, in writing, any notice of a meeting required to be given by these bylaws, either before or after such meeting. The attendance of a member or director at any meeting shall constitute a waiver of notice of such meeting by such member or director, except in case a member or director shall attend a meeting for the express purpose of objecting to the transaction of any business because the meeting shall not have been lawfully called or convened.
Section 11.03 Policies, Rules and Regulations. The Board of Directors shall have power to make and adopt such policies, rules and regulations, not inconsistent with law, the Articles of Conversion or these bylaws, as it may deem advisable for the management, administration and regulation of the business and affairs of the Cooperative.
Section 11.04 Accounting System and Reports. The Board of Directors shall cause to be established and maintained a complete accounting system which shall conform, so long as the Cooperative is indebted to the Government or any agency or instrumentality thereof, to such accounting system as may from time to time be designated by the Administrator of the Rural Utilities Service of the United States of America. The Board of Directors shall, after the close of each fiscal year, cause to be made by a Certified Public Accountant, a full and complete audit of the accounts, books and financial condition of the Cooperative as of the end of such fiscal year. A report of such audit shall be submitted to the members at the annual meeting next following the close of such fiscal year.
Section 11.05 Area Coverage. The Board shall make diligent effort to see that electric service is extended to all unserved persons within the Cooperative service area who (a) desire such service and (b) meet all requirements established by the Cooperative as a condition of such service.
Section 12.01. Each officer, director, staff member, employee or person serving on a committee of the Cooperative shall be indemnified by the Cooperative against all costs and expenses actually and necessarily incurred by him in connection with the defense of any action, suit or proceedings in which he is made a party by reason of his being or having been a director, officer, staff member, employee or committee representative of this Cooperative, whether or not he continues to be such at the time of incurring such cost or expense, except in relation to matters as to which he shall be adjudged in such action, suit or proceedings to be liable for negligence or misconduct in the performance of his duties as such officer, director, staff member, employee or committee representative. The right of indemnification hereunder shall not be exclusive of other rights to which any officer, director, staff member, employee or committee representative is entitled as a matter of law.
Section 13.01. These bylaws may be altered, amended or repealed by the members at any regular or special meeting, provided notice of such meeting has been given in accordance with Article 3.03. Any proposed amendment or repeal of these bylaws may be initiated by the Board of Directors by appropriate resolution or by a written petition signed by at least fifteen (15) members in each county within the service area, presented to the Secretary at least sixty (60) days prior to the meeting at which the proposed amendment is to be voted upon.