Article IV

Board Members

Section 1. General Powers.

The business and affairs of the Cooperative shall be managed by a board of five (5) 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.

Section 2. Election and Tenure of Office.

The directors shall be elected by secret ballot, one from each of the five (5) Districts, by and from the members at the annual meeting of the members, to hold office for a term of three (3) years each, and until their respective successors are elected and qualified. Beginning with the year 1999, the Districts from which the Directors shall be elected shall be Districts 2 & 3 in 1999; District 5 in 2000; and Districts 1 & 4 in the year 2001; with all Directors elected in the previous Districts prior to the 1999 elections to then be a representative of one of the five (5) Districts until said Director resigns from office or if said position comes for re-election. Each vacancy occurring on the Board of Directors other than by the expiration of a term, shall be filled by a majority vote of the remaining Directors.

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 purposes of electing directors within a reasonable time thereafter. Directors may be selected by plurality vote of the members.

The five (5) Districts shall be designated as follows:

District 1 shall consist of the following Townships located in McPherson County: Spring Creek, Detmold, Petersburg, Bergdorf, Glucksthal, Rosenthal, Odessa, Bauer, Stickel, Kassel, Jackson, Hillsview, and Cleveland, and the following Townships located in Edmunds County: Modena, Hosmer, and Sangamon;
District 2 shall consist of the following Townships located in McPherson County: Harrison, Wacker, Weber, Wachter, Long Lake, Highland, Hoffman, Koto, Carl, Moscow, Arena, Spring, Leola, Willow, Baine, Dewey, Howard, Washington, and Lincoln;
District 3 shall consist of the following Townships located in Edmunds County: North Bryant, Bowdle, Cottonwood, Glen, Bryant, Odessa, Cloyd Valley, Glover, Montpelier, Hudson, Madison, Hillside and Vermont; and the following Townships located in Faulk County: Sherman, Clark, and Enterprise;
District 4 shall consist of the following Townships located in Edmunds County: Adrian, Rosette, Belle, Pembrook, Huntley, Ipswich, Fountain, Cortlandt, Cleveland, Harmony, Union, Richland, Liberty, Powell, Kent, and Clear Lake; and
District 5 shall consist of the following Townships located in Faulk County: Freedom, Emerson, Fairview, Union, Elroy, O’Neil, Saratoga, Pulaski, Myron, Devoe, Wesley, Seneca, Latham, Bryant, Tamworth, Lafoon, Centerville, Ellisville, Thirteen, Irving, Orient, Arcade, and Hillsdale.

Section 3. Qualifications.

No person shall be eligible to become or remain a director or to hold any position of trust in the Cooperative who:

in the case of a director, is not a member and bona fide permanent resident of the district in which he/she resided at the time he/she was elected as a director; or
is in any way employed by or financially interested in a competing enterprise or a business selling electric energy or supplies to the Cooperative or a business primarily engaged in selling electrical appliances, fixtures or supplies to the members of the Cooperative; or
is a close relative of an incumbent director or of an employee of the Cooperative; or
does not have the legal capacity to enter into a binding contract.
Within the past five (5) years, has been an employee of the cooperative or an immediate family member of said former employee

If a corporation is a member then a duly appointed representative of said corporation can be a director if said representative is a bona fide permanent resident of the district for which he/she is elected.

Upon establishment of the fact that a director is holding the office in violation of any of the foregoing provisions, the Board of Directors shall remove such director from the 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. Nomination and Election of Directors.

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 three (3) nor more than seven (7) members who shall be selected from different regions served by the Cooperative, so as to insure equitable representation. No member of the Board of Directors may serve on such committee. The committee, shall prepare and post at the principal office of the Cooperative at least thirty (30) days before the annual meeting a list of nominations for directors, which may include a greater number of candidates than are to be elected.
Additional nominations for Director may be made by petition signed by no less than fifteen (15) members of the Cooperative and delivered to the Board of Directors at least twenty-five (25) days prior to the annual meeting. The members signing said petition must reside in the District for which they are nominating a member to serve as Director and said member nominated by said petition must reside in said District. The Secretary of the Cooperative shall post such nominations at the same place where the list of nominations made by the committee on nominations is posted.
The Secretary of the Cooperative shall be responsible for mailing of the notice of meeting at least ten (10) 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, nominated by the committee on nominations and by petition, specifying separately the nominations made by the committee on nominations. At the annual meeting, the Secretary of the Cooperative shall place in nomination the names of the official candidates of each district, which said candidates have been nominated by the nominating committee or by petition. Election of directors shall be made by printed or mimeographed ballot. The ballots shall list the candidates selected by the nominating committee and by petition, the names to be arranged by districts. Each member of the Cooperative present at the meeting shall be entitled to vote for one (1) candidate from each district, from which a director is to be elected. The candidate for each such district receiving the highest number of votes at this meeting shall be declared elected as director. In the event of a tie vote after the second ballot, the winner shall be determined by the toss of a coin.

Section 5. Removal of Directors by Members.

Any member may bring charges against a director by filing with the Secretary such charges in writing together with a petition signed by at least ten per centum (10 percent) of the members, requesting the removal of such director by reason thereof. Such director shall be informed in writing of the charges at least ten (10) 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 to the charges; and the person or persons bringing the charges against the Director 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 a vote of the members at such meeting without compliance with the foregoing provisions with respect to nominations, provided, however, that the director so chosen must reside in the same district as the director in respect to whom the vacancy occurs.

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 of Directors shall be filled by the affirmative vote of a majority of the remaining directors for the unexpired portion of the term. The member elected as director to fill the vacancy must reside in the same district as the director to whose office the Director succeeds.

Section 7. Compensation.

Directors shall, as determined by resolution of the Board of Directors, receive, on a per diem basis, a fixed fee, which may include insurance benefits, for attending meetings of the Board of Directors. Directors shall also receive advancement or reimbursement of any travel and out-of-pocket expenses actually, necessarily and reasonably incurred in attending such meetings and performing such business. No director shall receive compensation for serving the Cooperative in any other capacity, nor shall any close relative of a director receive compensation for serving the Cooperative, unless the payment for an 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 of Directors as an emergency measure.

Section 8. Director Liability.

To the fullest extent permitted by South Dakota law governing this Cooperative as the same exists or may hereinafter be amended, a director of this Cooperative shall not be personally liable to the Cooperative or its members for monetary damages for breach of fiduciary duty as a director, except for liability as follows:

For any breach of the director’s duty of loyalty to the Cooperative or its members;
For acts or omissions not in good faith or which involve intentional misconduct or a known violation of the law;
For any violation of SDCL 47-17-7, which makes directors liable to the Cooperative for improper distribution of Cooperative assets; or
For any transaction from which the director derived any improper personal benefit.