Section 1. Interest or Dividends on Capital Prohibited
The Cooperative shall always be operated on a cooperative, non-profit basis for the mutual benefit of its members. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its members.
Section 2. Member’s Capital in Connection with Furnishing Services
In the furnishing of services, the Cooperative’s operations shall be so conducted that all members will, through their member, furnish capital for the Cooperative. In order to induce members and to assure that the Cooperative will operate on a non-profit basis, the Cooperative is obligated to account on a member basis to all its members for all amounts received and receivable from the furnishing of services in excess of operating costs and expenses properly chargeable against the furnishing of services, including the establishment and maintenance of a general reserve fund for working capital to provide among other things for insurance, taxes, maintenance, improvements, new construction and contingencies in an amount which the Board of Directors shall deem reasonable. All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the members as capital. The Cooperative is obligated to pay by cash refund or by crediting to a capital account for each member 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 member shall be refunded in cash and/or credited to an appropriate record to the capital account of each member. All such amounts credited to the capital account of any member shall have the same status as though they had been paid to the member in cash in pursuance of a legal obligation to do so and the member had then furnished the Cooperative corresponding amounts for capital. All other amounts received by the Cooperative from its operations in excess of costs and expenses shall, insofar as permitted by laws, be
- used to offset any losses incurred during the current or any prior fiscal year, and
- to the extent not needed for that purpose, allocated to its members on a member’s basis, and
- any amount so allocated shall be included as part of the capital credited to the accounts of members, as herein provided.
Section 3. Distribution of Assets on Liquidation
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. If, at any time prior to dissolution or liquidation, the Board shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital credited to member’s accounts may be retired in full or in part.
Section 4. Assignment of Capital Credit
Capital credited to the account of each member 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 a part of such member’s premises served by the Cooperative unless the Board, acting under policies of general application, shall determine otherwise.
Notwithstanding any other provision of these bylaws, the Board at its discretion shall have the power at any time upon the death of any member, if the legal representatives of his estate shall request in writing that the capital credited to any such member 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 member immediately upon such terms and conditions as the Board, acting under policies of general application, and the legal representatives of such member’s estate shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.
Section 5. Contract Between Cooperative & Members
The members of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Incorporation and bylaws shall constitute and be a contract between the Cooperative and each member, and both the Cooperative 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. The provisions of this Article of the bylaws shall be called to the attention of each member of the Cooperative by posting in a conspicuous place in the Cooperative’s office.
Section 6. Unclaimed Capital Credit & Property
The Cooperative has adopted policies, procedures and publications regarding the allocation of its capital credits. For specific questions, reference should be made to the policies, procedures and publications.
Indiana has adopted a version of the Uniform Unclaimed Property Act (the “Act”). The Act can be found at Ind. Code 32-34-1-1. The Act defines what type of property shall be administered under its provisions. The Act also defines what type of property shall not be subject to the Act. Ind. Code 32-34-1-1 (b) states the Act doesn’t apply to stocks; dividends; capital credits; patronage refunds; utility deposits; membership fees; account balances; or book equities; for which the owner cannot be found and that are the result of distributable savings of a rural electric membership corporation formed under Ind. Code 8-1-13. This Cooperative was formed under Ind. Code 8-1-13’s predecessor. Therefore, a member’s unclaimed property is not subject to the Act. The Cooperative must then administer the member’s unclaimed property in a different manner as provided by law.
Finally, Indiana law provides the Cooperative with a means of handling a member’s unclaimed property. It states the Cooperative shall recover from the member, after a period of two (2) years, the value of any unclaimed stocks, dividends, capital credits, members’ refunds, utility deposits, membership fee, account balances, or book equity for which the owner (member or former member) cannot be found and are the result of distributable savings of the Cooperative upon giving a notice published one time in a newspaper of the English language which is published in the county in which the Cooperative general headquarters is located. The notice shall state in substance that the Cooperative’s website has information relating to the members unclaimed property including the name of the member, along with the approximate amount of owner’s interest and the procedure for claiming the unclaimed property. It shall further state that if the unclaimed property is not claimed by a provable claim within 60 days of the date the notice was published, then the unclaimed property will be turned over to the Cooperative. If no provable claim shall have been filed by such member within 60 days after the one-time publication of the notice, the Cooperative may credit against the member’s account any amounts due and owing the Cooperative by the member and thereafter allocate the balance to the Cooperative’s permanent equity.
Any member or former member who fails to claim any cash retirement or capital credit or other payment within 2 years and 60 days after payment has been made available to such person, such failure will constitute an irrevocable assignment and gift to the cooperative of such capital credits or other payments.