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Bylaws

It shall be the aim of PEOPLES TELEPHONE COOPERATIVE, INC. to enrich the lives of Cooperative members by providing quality communication and technology solutions throughout the communities we serve.

BYLAWS of
PEOPLES TELEPHONE COOPERATIVE, INC.

(As Last Amended at the March 2025 Annual Membership Meeting)

ARTICLE I

MEMBERSHIP

SECTION 1. Requirements for Membership. Any person or organization (such as a firm or other partnership, association, corporation, limited liability company, limited partnership, or governmental organization or subdivi­sion thereof) may become a member of PEOPLES TELE­PHONE COOPERATIVE, INC. (hereinafter called the “Coop” or the “Cooperative”) by:

  • Making a written or electronic application for membership therein;
  • agreeing to purchase from the Coop telecommunications service as hereinafter specified;
  • agreeing to comply with and be bound by the articles of incorporation and bylaws of the Coop and any rules and regulations adopted by the board of directors (hereinafter called the “Board”); and
  • agreeing to pay any membership fee that may be specified on uniform terms and conditions established by the Board;

provided, however, that agreement to pay or payment of the membership fee, if any, in accordance with the provisions of these bylaws by a landlord on behalf of an applicant for membership who is a tenant occupying premises owned by such landlord and served by the Coop shall constitute compliance by such applicant with subdivision (d) of this Section; and provided further, however, that no per­son or organization shall become a member unless and until such person or organization has been accepted for membership by the Board or the members. No mem­ber may hold more than one membership in the Coop, and no membership shall be transferable, except as provided in these bylaws.

SECTION 2. Membership Certificates. Membership in the Coop shall be evidenced by a membership certificate which shall be in such form and shall contain such provisions as shall be determined by the Board.

SECTION 3. Joint Membership. Legal spouses may apply for a joint membership and, subject to their compliance with the requirements of Section 1 of this Article, may be accepted for such membership. The term “member” as used in these bylaws shall be deemed to include legal spouses 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 of the holders of a joint membership shall be as follows:

  • The presence at a meeting of either or both shall be regarded as the presence of one member and shall constitute a joint waiver of notice of the meeting;
  • The vote of either separately or both jointly shall constitute one joint vote;
  • A waiver of notice signed by either or both shall constitute a joint waiver;
  • Notice to either shall constitute notice to both;
  • Expulsion of either shall terminate the joint membership;
  • Withdrawal of either shall terminate the joint membership;
  • Either but not both may be elected or appointed as an officer or director, provided that both meet the qualifications for such office.

SECTION 4. Conversion of Membership.

  • A membership may be converted to a joint membership upon the written request of the holder thereof and the agreement by such holder and his or her spouse to com­ply with the articles of incorporation, bylaws, and any rules and regulations adopted by the Board. The Board shall take all necessary action to indicate the changed membership status.
  • Upon the death of either spouse who is a party to the joint membership, such membership shall be held solely by the survivor. The Board shall take all necessary action to indicate the changed membership status, pro­vided, however, that the estate of the deceased shall not be released from any debts due the Coop.

SECTION 5. Membership and Service Connection Fees. The membership fee, if any, shall be as determined from time to time by the Board, upon the payment of which a member shall be eligible for one service connection. Additional fees shall be paid for each additional connection, extension and other available service, in accordance with the rules and regula­tions prescribed by the Board.

SECTION 6. Purchase of Telecommunications Service. Each member shall, as soon as telecommunications service is available, take telecommunications service from the Coop to be used on the premises specified in their application for membership, and shall pay therefore monthly at rates which shall from time to time be fixed by the Board; provided, however, that the Board may limit the amount of telecommunications service which the Coop shall be required to furnish to any one member. It is expressly under­stood that amounts paid for telecommunications 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 Coop such minimum amount per month for telecommunications service as shall be fixed by the Board from time to time. Each member shall also pay all amounts owed by them to the Coop as and when the same shall become due and payable.

SECTION 7. Termination of Membership.

(a) Any member may withdraw from membership upon compliance with such uniform terms and conditions as the Board may prescribe. The Board may, by the affirmative vote of not less than two-thirds of all the directors, expel any member who fails to comply with any of the provisions of the articles of incorporation, bylaws, or any rules or regulations adopted by the Board, but only if such member shall have been given written notice by the Secretary that such failure makes them liable to expulsion and such 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 or by vote of the members at any annual or special meeting. The membership of a member who has not permitted the installation of service within thirty (30) days after such member has been notified service is available to them, or of a member who has ceased to purchase telecommunications service from the Coop, shall be can­celled by resolution of the Board.

(b) Upon the withdrawal, death, cessation of existence or expulsion of a member, the membership of such member shall thereupon terminate, and the membership certificate of such member shall be surrendered forthwith to the Coop. Termination of membership in any manner shall not release a member or their estate from any debts due the Coop.

(c) If a membership fee has been paid by a landlord on behalf of the landlord’s tenant, upon the removal of such tenant from the premises of the land­lord, the membership of such tenant shall terminate.

(d) Upon termination of membership for any reason, the Coop shall not repay to the member or to the member’s landlord, in case the membership fee shall have been paid on behalf of the member by the member’s landlord, the amount of the membership fee paid unless a successor in occupancy or ownership of the premises serviced by the Coop shall have been accepted as a member and a membership fee shall have been paid by or on behalf of such successor in accordance with the provisions of these bylaws. Any refund of membership fees pursuant to this subsec­tion shall be made in the order in which memberships shall have been terminated. Prior to the repayment of a membership fee paid by the member, the Coop shall deduct from the amount of such membership fee the amount of any debts owing from the member to the Coop.

SECTION 8. Consent to Service to Members.  Each member, upon receipt of requested service by the Cooperative, thereby grants consent to the Cooperative for such service easements or rights-of-way, on and under such lands owned or leased by or mortgaged to the member, and in accordance with such reasonable terms and conditions, as the Cooperative shall require for the furnishing of telecommunications service to the member or other members for the construction, operation, maintenance or relocation of the Cooperative’s telecommunications system.

ARTICLE II

RIGHTS AND LIABILITIES OF MEMBERS

SECTION 1. Property Interest of Members. Upon dissolution, after (a) all debts and liabilities of the Coop shall have been paid, (b) all capital furnished through patronage shall have been retired as provided in these bylaws, and (c) all membership fees shall have been repaid, the remaining property and assets of the Coop shall be distributed among the members and former members in the proportion which the aggregate patronage of each member bears to the total patronage of all such members, unless otherwise provided by law.

SECTION 2. Non-liability for Debts of the Coop. The private property of the members shall be exempt from execution or other liability for the debts of the Coop and no member shall be liable or responsible for any debts or liabilities of the Coop.

ARTICLE III

MEETING OF MEMBERS

SECTION 1. Annual Meeting. The annual meeting of the members shall be held at such time and date as may be determined by the Board at a place within the State of Texas and shall be 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. It shall be the responsibility of the board to make adequate plans and preparations for the annual meet­ing. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Coop nor affect the validity of any Cooperative action.

SECTION 2. Special Meetings. Special meetings of the mem­bers may be called by resolution of the Board, or upon a written request signed by any three directors, by the President, or by not less than 200 members or ten per centum of all the members, whichever shall be the lesser, 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 shall be held at such time and date as may be determined by the Board at a place within the State of Texas, as specified in the notice of the special meetings.

SECTION 3. Notice of Members’ Meetings. Written notice stating the place, day and hour of the meeting and, in case of a spe­cial meeting or an annual meeting at which business requiring spe­cial notice is to be transacted, the purpose or purposes for which the meeting is called, shall be delivered not less than ten days nor more than twenty-five days 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 their address as it appears on the records of the Coop, with postage thereon prepaid. 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 4. Quorum. As long as the total number of members does not exceed five hundred, ten per centum of the total number of members present in person shall constitute a quorum. In case the total number of members shall exceed five hundred, fifty members or two per centum of the total number of members, whichever shall be the larger, present in person shall constitute a quorum. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice. The minutes of each meeting shall contain a list of the members present in person.

SECTION 5. Voting. Each member shall be entitled to only one vote upon each matter submitted to a vote at a meeting of the members. All questions shall be decided by a vote of a majority of the members voting thereon in person except as otherwise provided by law, the articles of incorporation or these bylaws.

SECTION 6. Manner of Voting. The Board shall determine the manner of voting for each issue to come before the Cooperative, whether such voting is to be in person, by mail, or electronically. The board shall establish policies and rules to govern the integrity and security of the voting process, and provide sufficient notice to members of the manner of voting and the applicable process.

SECTION 7. Order of Business. The order of business at the annual meeting of the members and, so far as possible, at all other meetings of the members, shall be essentially as follows, except as otherwise determined by the members at such meeting:

  1. Report on the number of members present in person in order to determine the existence of a quorum.
  2. Reading of the notice of the meeting and proof of the due publication or mailing thereof, or the waiver or waivers of notice of the meeting, as the case may be.
  3. Reading of unapproved minutes of previous meetings of the members and the taking of necessary action thereon.
  4. Presentation and consideration of reports of officers, directors and committees.
  5. Election of directors.
  6. Unfinished business.
  7. New business.
  8. Adjournment

SECTION 8. Postponement of a Meeting of the Members. In the event of inclement weather or the occurrence of a catastrophic event, the meeting of the members may be postponed by the Board or its designated officer. Notice of the adjourned meeting shall be given by the Board or its designated officer in any media of general circulation or broadcast serving the area.

ARTICLE IV

DIRECTORS

SECTION 1. General Powers. The business and affairs of the Coop shall be managed by a board of directors consisting of nine directors. The service area of the Cooperative shall be divided into nine service districts with one director being elected from each dis­trict. The composition, area or nomenclature of these districts may be modified or adjusted by the board of directors from time to time at its discretion. This board shall exercise all of the powers of the Coop except those that are by law, the articles of incorporation or these bylaws conferred solely upon or reserved to the members.

SECTION 2. Election and Term of Office. The Cooperative shall stagger the terms of the directors in a manner, if possible, so that an equal number of directors will be elected each year. All directors shall be elected by acclamation or if not by acclamation, by secret ballot at the annual meeting of the members and shall serve for a term of three (3) years or until their successor shall have been elected and shall have qualified. If an election of directors shall not be held on the day designated herein for the annual meeting, or at any adjournment thereof, a spe­cial meeting of the members shall be held for the purpose of electing directors as herein provided within a reasonable time thereafter. Directors may be elected by a plurality vote of the members.

SECTION 3. Qualifications. No person shall be eligible to become or remain a director of the Coop who:

  • is not a member and is not presently residing in the area served or to be served by the Coop;
  • is in any way employed by or financially interested in a competing enterprise or a business engaged in selling telecommunications service or supplies, or constructing or main­taining telecommunications facilities, other than a business operating on a cooperative nonprofit basis for the purpose of furthering rural telecommunications, provided that the Board may grant an exception in the event such employment or financial interest is immaterial and would not reasonably be expected to interfere with such person’s ability to serve as a director;
  • while a director, and during the five (5) years immediately before becoming director, was convicted of, or pleaded guilty to, a felony or two (2) misdemeanors; or found guilty of an offense involving moral turpitude; or
  • is a current or former employee of the cooperative or a current or former employee of an entity controlled by the cooperative or in which the cooperative owns a majority interest.

Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions, the Board shall 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.

SECTION 4. Nominations. It shall be the duty of the Board to appoint, not less than forty (40) nor more than one hundred fifty (150) 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 three nor more than eleven members who shall be selected from different sections so as to insure equable representation. No member of the Board may serve on such committee. The commit­tee, keeping in mind the principal of geographical representation, shall prepare and post at the principal office of the Cooperative at least thirty-five (35) days before the meeting a list of nominations for directors which shall include only one candidate for each director to be elected. Any two hundred or more members acting together may make other nominations by petition not more than fifteen (15) days subsequent to the posting of the nominees by the committee.  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 or separately, but at least ten days before the date 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 and the nominations made by petition, if any. The ballot to be used at the election shall list the names of the candidates nominated by the committee and the nominations made by petition, if any. There shall be no additional nominations from the floor at the Annual Meeting except as permitted pursuant to the provisions of Sections 5 and 6 of this Article. In any year in which any of the nominees, as determined by this Section, do not have formal challengers for the position after the posting deadline for nominating petitions and prior to the date for distribution of ballots, the Secretary may certify to the Board that the election for that position for that year is uncontested, and the Board may, for that election year, declare the election uncontested. Such certification shall be announced at the annual meeting.

SECTION 5. Removal of Directors by Members. Any mem­ber may bring charges against a director and, by filing with the Secretary such charges in writing together with a petition signed by at least ten per centum of the members, or two hundred members, whichever is the lesser, may request the removal of such director by reason thereof. Such director shall be informed in writing of the charges at least ten days prior to the meeting of the members 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 of the charges; and the person or persons bring­ing the charges against them shall have the same opportunity. The question of the removal of such director shall be considered and voted upon at the 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 nominations.

SECTION 6. 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 shall be filled by the affirmative vote of a majority of the remaining directors for the unexpired portion of the term, provided, however, that in the event the vacancy is not filled by the Board within sixty (60) days after the vacancy occurs, the members shall have the right to fill such vacancy at a meeting of the members without compli­ance with the foregoing provisions in respect of nominations.

SECTION 7. Compensation. Directors shall not receive any salary for their services as directors, except that by resolution of the Board insurance coverage may be provided and a fee may be set, the amount of which is to be determined by the directors, and actu­al expenses of attendance, if any, may be allowed for attendance at each meeting of the Board, or at any other industry related meet­ings when determined by the Board of Directors that attendance at such meetings would benefit the overall membership of the Coop. No director shall receive compensation for serving the Coop in any other capacity, nor shall any close relative of a director receive compensation for serving the Coop, unless the payment and amount of compensation shall be specifically authorized by a vote of the members or the service by such director or close relative shall have been certified by the Board as an emergency measure.

 

ARTICLE V

MEETINGS OF DIRECTORS

SECTION 1. Regular Meetings. A regular meeting of the Board shall be held without notice, immediately after, and at the same place as, the annual meeting of the members. A regular meet­ing of the Board shall also be held monthly at such time and place as the Board may provide by resolution. Such regular monthly meeting may be held without notice other than such resolution fixing the time and place thereof. Unless specifically prohibited by law, meetings, regular or special, may be conducted through the use of conference telephone or other communications equipment by means of which all persons participating in the meetings can communicate with each other. Such participation shall constitute attendance and presence in person at the meeting of the persons so participating.

SECTION 2. Special Meetings. Special meetings of the Board may be called by the President or by any three directors, and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. The President or the directors calling the meeting shall fix the time and place for the holding of the meeting.

SECTION 3. Notice of Directors’ Meetings. Written notice of the time, place and purpose of any special meeting of the Board shall be delivered to each director not less than five days previous thereto either personally, by electronic transmission, or by mail, by or at the direction of the Secretary, or upon a default in duty by the Secretary, by the President or the directors calling the meeting. If transmitted electronically, such notice shall be deemed to be delivered at the time of the transmission. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the director at their address as it appears on the records of the Coop, with postage thereon prepaid.

SECTION 4. Quorum. A majority of the Board 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 a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board.

SECTION 5. Unanimous Consent in Writing. Unless otherwise prohibited by law, Board actions may be taken without a meeting and without a vote if unanimous consent of the Board is obtained in writing setting forth the action taken in detail and the document is signed by all directors entitled to vote.

 

ARTICLE VI


OFFICERS

SECTION 1. Number. The officers of the Coop shall be a President, Vice President, Secretary, Treasurer, and such other offi­cers as may be determined by the Board from time to time. The offices of Secretary and of Treasurer may be held by the same person.

SECTION 2. Election and Term of Office. The officers shall be elected by ballot, 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 their successor shall have been elected and shall have qualified. Except as otherwise provided in these bylaws, the vacan­cy in any office shall be filled by the Board for the unexpired por­tion of the term.

SECTION 3. Removal of Officers and Agents by Directors. Any officer or agent elected or appointed by the Board may be removed by the Board whenever in its judgment the best interests of the Coop will be served thereby. In addition, any member of the Coop may bring charges against an officer, and by filing with the Secretary such charges in writing together with a petition signed by ten per centum of the members, or two hundred members, whichev­er is the lesser, may request the removal of such officer. The offi­cer against whom such charges have been brought shall be informed in writing of the charges at least ten days prior to the board 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 of the charges; and the person or persons bringing the charges against them shall have the same opportunity. In the event the board does not remove such officer, the question of the officer’s removal shall be considered and voted upon at the next meeting of the members.

SECTION 4. President. The President shall:

  • be the principal executive officer of the Coop and, unless otherwise determined by the members or the Board, shall preside at all meetings of the members and the Board;
  • sign any deeds, mortgages, deeds of trust, notes, bonds, contracts or other instru­ments authorized by the Board to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these bylaws to some other officer or agent of the Coop, or shall be required by law to be otherwise signed or executed; and
  • 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 5. Vice President. In the absence of the President, or in the event of the President’s 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 them by the Board.

SECTION 6. Secretary. The secretary shall:

  • Keep the minutes of the meetings of the members and of the Board in one or more books provided for that purpose;
  • see that all notices are duly given in accordance with these bylaws or as required by laws;
  • be custodian of the corporate records and of the seal of the Coop and affix the seal of the Coop to all docu­ments, the execution of which on behalf of the Coop under its seal is duly authorized in accordance with the provisions of these bylaws;
  • keep a register of the names and post office addresses of all members;
  • have general charge of the books of the Coop;
  • keep on file at all times a complete copy of the articles of incorporation and bylaws of the Coop containing all amendments thereto (which copy shall always be open to the inspection of any member) and at the expense of the Coop, forward a copy of the bylaws and of all amend­ments thereto to each member; and
  • in general perform all duties incident to the Office of Secretary and such other duties as from time to time may be assigned to them by the Board.

The ministerial duties of this office may be delegated to a Cooperative staff person so long as final review and responsibility continues to reside with the officer.

SECTION 7. Treasurer. The treasurer shall:

  • have charge and custody of and be responsible for all funds and securities of the Coop;
  • be responsible for the receipt of and the issuance of receipts for all moneys due and payable to the Coop and for the deposit of all such moneys in the name of the Coop in such bank or banks as shall be selected in accor­dance with the provisions of these bylaws; and
  • in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to them by the Board.

The ministerial duties of this office may be delegated to a Cooperative staff person so long as final review and responsibility continues to reside with the officer.

SECTION 8. Manager. The Board may appoint a manager who may be, but who shall not be required to be, a member of the Coop. The manager shall perform such duties and shall exercise such authority as the Board may from time to time vest in them.

SECTION 9. Bonds of Officers. The Treasurer and any other officer or agent of the Coop charged with responsibility for the custody of any of its funds or property shall give bond in such sum and with such surety as the Board shall determine. The Board in its discretion may also require any other officer, agent or employee of the Coop to give bond in such amount and with such surety as it shall determine.

SECTION 10. Compensation. The powers, duties and compensation of officers, agents and employees shall be fixed by the Board, subject to the provisions of these bylaws with respect to compensation for directors and close relatives of directors.

SECTION 11. Reports. The officers of the Coop shall submit at each annual meeting of the members reports covering the business of the Coop for the previous fiscal year.  Such reports shall set forth the condition of the Coop at the close of such fiscal year.

ARTICLE VII

DISPOSITION OF PROPERTY

The Coop may not sell, mortgage, lease or otherwise dispose of or encumber all or any substantial portion of its property unless such sale, mortgage, lease or other disposition or encumbrance is author­ized at a meeting of the members thereof by the affirmative vote of not less than two-thirds of all of the members of the Coop, and unless the notice of such proposed sale, mortgage, lease or other disposition or encumbrance shall have been contained in the notice of the meeting; provided, however, that notwithstanding anything herein contained, the Board, without authorization by the members thereof, shall have full power and authority to authorize the execu­tion and delivery of a mortgage or mortgages or a deed or deeds of trust upon, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the Coop, 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 Coop to the United States of America or any lending institution licensed by the United States or a state; provided further that the Board may upon the authorization of at least two-thirds of those members of the Coop present at a meeting of the members thereof, sell, lease, or otherwise dispose of all or a major portion of its property to another telephone cooperative or to a for­eign corporation doing business in this State pursuant to the act under which this Coop is incorporated, or to the holder of a note, bond, or other evidence of indebtedness issued to the United States or to a lending institution licensed by the United States or a state, provided that the notice of a meeting at which a disposition or lease is to be considered by the members must state the proposed action.

 

ARTICLE VIII

SEAL

The corporate seal of the Coop shall be in the form of a circle and shall have inscribed thereon the name of the Coop and the words “Corporate Seal (Name of the State).”

ARTICLE IX

FINANCIAL TRANSACTIONS

SECTION 1. Contracts. Except as otherwise provided in these bylaws, 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 Coop, and such authority may be general or confined to specific instances.

SECTION 2. Checks, Drafts, etc. 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 Coop shall be signed by such officer or officers, agent or agents, employee or employees of the Coop and in such a manner as shall from time to time be determined by resolution of the Board.

SECTION 3. Deposits. All funds of the Coop shall be deposit­ed from time to time to the credit of the Coop in such bank or banks as the Board may select.

SECTION 4. Change in Rates. The Coop shall give all notice required by law and regulation in connection with any proposed change in the monthly rates charged by the Coop for telecommunications service.

SECTION 5. Fiscal Year. The fiscal year of the Coop shall begin on the first day of October of each year and shall end on the thirtieth day of September the following year.

ARTICLE X

NON-PROFIT OPERATION

SECTION 1. Capital Credits. The Cooperative shall allocate and pay Capital Credits as provided in this Article.

SECTION 2. 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 3. Patronage Capital in Connection With Furnishing Telecommunications and Information Services.

  • Accounting for Capital. In the furnishing of telecommunications and information services, the Cooperative’s operations shall be so conducted that all patrons will, through their patronage, furnish capital for the Cooperative. In order to induce patronage and to insure that the Cooperative will be operated on a non-profit basis, the Cooperative is obligated to account on a patronage basis to all its patrons for all amounts received and receivable from the furnishing of telecommunications and information services in excess of operating costs and expenses properly chargeable against the furnishing of such services. All such amounts in excess of operating costs and expenses for telecommunications and information services at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the patrons as capital.
  • Allocation of Capital Credits. 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 derived from telecommunications and information services. The books and records of the Cooperative shall be set up and kept in such manner that at the end of each fiscal year the amount of capital, if any, so furnished by the patron for telecommunications and information services 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 notify each patron of the amount of capital so credited to the patron’s account. All such amounts credited to the capital account of any patron shall have the same status as though it 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. Any operating losses of the Cooperative shall be offset by subsequent year’s margins prior to allocation.
  • Allocating Non-Operating Margins. All non-operating margins, except those derived from furnishing goods and services other than telecommunications and information services, shall, insofar as permitted by law, be used to offset any losses during the current or any prior fiscal year and, to the extent not needed for that purpose, either:
  1. allocated to its patrons on a patronage basis and any amount so allocated shall be included as part of the capital to be allocated to the accounts of the various classes of patrons in an equitable manner as approved by the Board, or
  2. used to establish and maintain a non-operating margin reserve not assignable to patrons prior to dissolution of the Cooperative.

 

  • Payments by Board Discretion. 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 then credited to patrons’ accounts may be retired in full or in part. All allocations and retirements of capital shall be at the discretion and direction of the Board as to kind, timing, method, and type of assignment and distribution; and whether such retirement is subject to general discounts.
  • Payments Upon Dissolution. 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.
  • Capital Assignment. 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 in a part of such patrons’ premises served by the Cooperative, unless the Board, acting under policies of general application, shall authorize other types of assignments. Patrons at any time may assign their capital credits back to the Cooperative and the Cooperative is authorized to negotiate capital credit settlement arrangements with bankrupt patrons. Any attempt to assign or transfer the capital credited to the account of a patron pursuant to state or federal law is subject to a right of first refusal vested in the Cooperative for a period of sixty (60) days following notice to the Cooperative of a proposed transfer of such capital to the extent the Cooperative meets any compensation terms of the proposed transfer.
  • Payment Upon Death. Notwithstanding any other provision of these Bylaws, the Board, at its discretion, shall have the power at any time upon the death of any natural patron, if the legal representative of such patron’s estate shall request in writing, that the capital credited to any such patron be retired prior to the time such capital would be retired in a general retirement under provisions of these Bylaws, to retire capital credited to any such patron immediately upon such terms and conditions as the Board, acting under policies of general application, and the legal representative of such patron’s estate shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.
  • Minimum Accounts. When the capital credits of any patron no longer receiving service from the Cooperative comes to a total amount of less than a fixed sum determined by the Board of Directors, the same shall be retired in full with such retirements made only when and at the same time that a general retirement to other patrons is made. During a general capital credit retirement, no checks shall be issued for less than a fixed amount determined by the Board, and the amount of such unretired capital credits will be retired in the first following year, when the total amount of capital credits qualifying for retirement exceeds that amount set by the Board, including the amount carried over.
  • Tax Refunds. All tax refunds made by the United States Government or any of the states in connection with the final or true cost of service as determined by the capital credits allocation process may be held and used by the Cooperative as furnished patronage capital and shall be treated in the same manner as furnished capital set out in this Section of these Bylaws.
  • Debts Offset. Regardless of the statute of limitations or other time limitation, the Cooperative may recoup, offset, or setoff any amount owed to the Cooperative by a patron or member prior to payment of capital credits to the patron or member.

SECTION 4. Patronage Capital in Connection With Furnishing Other Services. In the event that the Cooperative should engage in the business of furnishing goods or services other than traditional telecommunications and information services, all amounts received and receivable therefrom which are in excess of costs and expenses properly chargeable against the furnishing of such goods or services shall, insofar as permitted by law, be prorated annually on a patronage basis and returned to those patrons from whom such amounts were obtained at such time and in such order of priority as the Board shall determine. Any margins received by the Cooperative from subsidiaries or affiliates may be allocated or determined within the discretion of the Board of Directors as patronage credit or as permanent equity of the Cooperative.

ARTICLE XI

MISCELLANEOUS

SECTION 1. Membership in Other Organizations. The Coop may become a member or purchase ownership interests in other profit or non-profit organizations, associations, entities, partnerships, or joint ventures when the Board finds that the general or long-term interests of its membership will be served by such investments or participation.

SECTION 2. Waiver of Notice. Any member or director may waive in writing any notice of a meeting required to be given by these bylaws. 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 on the ground that the meeting has not been lawfully called or convened.

SECTION 3. Rules and Regulations. The Board shall have power to make and adopt such rules and regulations, not inconsistent with law, the articles of incorporation or these bylaws, as it may deem advisable for the management of the business and affairs of the Coop.

SECTION 4. Accounting System and Reports. The Board shall cause to be established and maintained a complete accounting sys­tem which, among other things, and subject to applicable laws and rules and regulations of any regulatory body shall conform to such accounting system as may from time to time be designated by the Administrator of RUS of the United States of America. The Board shall also after the close of each fiscal year cause to be made a full and complete audit of the accounts, books and financial condition at the Coop as of the end of such fiscal year. Such audit reports, or a summary thereof, shall be submitted to the members at the next following annual meeting.