BY-LAWS OF WEB WATER DEVELOPMENT

Transcription

1 ARTICLE I GENERAL PURPOSES This Corporation shall be known as the WEB WATER DEVELOPMENT ASSOCIATION, INC., and is incorporated under the laws of the State of South Dakota. The purposes for which the Corporation is formed and the powers which it may exercise are set forth in the Articles of Incorporation of the Corporation, and these By-Laws. Article I - Member Approved: Page 1

2 ARTICLE II NAME AND LOCATION Section 1. The name of the Corporation is the WEB Water Development Association, Inc. Section 2. The principal office and place of business of the Corporation shall be located at U.S Highway 12, PO Box 51, Aberdeen, South Dakota , but the Corporation may maintain offices and places of business at other places within or without the state as the Board of Directors may determine from time to time. Article II Section 1 - Member Approved: Article II Section 2 - Member Approved: Page 2

3 ARTICLE III SEAL OF CORPORATION Section 1. The Seal of the Corporation shall have inscribed thereon the name of the Corporation. Section 2. The Secretary shall have custody of the seal. Section 3. The impression of the seal shall be made on all papers and documents requiring the signature of an officer of the Corporation. Article III Section 1 - Member Approved: Article III Section 2 - Member Approved: Article III Section 3 - Member Approved: Page 3

4 ARTICLE IV FISCAL YEAR The fiscal year of the Corporation shall begin the 1 st day of October in each year and end on the 30 th day of September in each year. Article IV - Member Approved: Page 4

5 ARTICLE V GOVERNING BODY The business and affairs of the Corporation shall be managed by a nine (9) person Board of Directors to be elected by the members of the Corporation at a regular Annual Meeting and at each subsequent Annual Meeting. Such Board shall meet immediately after adjournment of the membership meeting and organize by electing a Chairman, Vice-Chairman, Secretary and Treasurer from their own number. Article V - Board Approved: Page 5

6 ARTICLE VI MEMBERSHIP AND CERTIFICATION Section 1. Eligibility Membership in the Corporation shall be limited to persons, rural water system associations or corporations, and bodies political situated within the area to be served by the Corporation, and reasonably accessible thereto, who have made application for membership in the Corporation, and who have agreed to pay the membership fee, and who have signed and entered into such agreements with the Corporation for the purchase of water for domestic, municipal and other approved beneficial use as are required by the Corporation from time to time and have been accepted for membership by the Corporation s Board of Directors. Individuals or entities who (1) tamper with or damage WEB property, (2) cause a cross-connection or otherwise put the water quality of the system at risk, (3) obstruct WEB staff from performing their assigned duties, (4) make use of water services without reporting it, (5) have established a record of failing to pay their water bill in a timely manner, (6) otherwise engage in or display acts or behaviors not in the best interest of the Corporation and which are disruptive to its operation or business plan shall not be eligible for membership. The Corporation s Board of Directors shall have the right to deny membership request or to terminate the membership of any individual or entity engaging in such acts or behaviors as defined in Article VII and these By-Laws. Section 2. Application A person, body politic, and rural water system associations or corporations, shall become a member of the WEB WATER DEVELOPMENT ASSOCIATION, INC. by: a. Making a written application for membership therein; b. Agreement to comply with and be bound by the Articles of Incorporation and By-Laws of the Corporation and any Rules and Regulations adopted by the Board of Directors; c. Paying the membership fees. No person, rural water system or body politic shall become a member unless, and until, it has been accepted for membership by the Board of Directors. No membership in the Corporation shall be transferable except as provided in these By-Laws; and d. Agreeing to pay such supplemental fees as the Board may require. Section 3. Joint Membership A husband and wife, or others, may apply for a joint membership and, subject to their compliance with the requirements set forth in Sections 1 and 2 of this Article; may be accepted for such membership. The term member as used in these By-Laws shall be deemed to include a husband and wife 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 Page 6

7 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: a. The presence at a meeting of either or both shall be regarded as the presence of one member and shall constitute one joint vote; b. The vote of either separately or both jointly shall constitute one joint vote; c. Notice to either shall constitute notice to both; d. Expulsion of either shall terminate the joint membership; e. Either but not both may be elected or appointed as an officer or director, provided that both meet the qualifications for such office. Article VI Section 1 - Member Approved: Article VI Section 2 - Board Approved: Article VI Section 3 - Member Approved: Page 7

8 ARTICLE VII MEMBERSHIP CERTIFICATES Section 1. Fees - Membership in the Corporation shall be evidenced by a certificate of payment of the membership fees which shall be in such form and shall contain such provisions as shall be determined by the Board of Directors. Such certificate shall be signed by an authorized agent of the Corporation. No membership shall be issued for less than the membership fee fixed by the Board of Directors. In case a certificate may be lost, destroyed or mutilated, a new certificate may be issued. Section 2. Transfers Transfers of membership shall be made only upon the books of the Corporation, only to persons eligible to become members, and only with the approval of the Board of Directors, and only then, when the member transferring is free from indebtness to the Corporation. Section 3. Basis for Fee Membership fees shall be set by action of the Board, and shall be apportioned between members. Section 4. Termination of Membership The WEB Board of Directors may refuse membership to or may terminate the membership of any individual or entity or member who ceases to be eligible to hold membership as provided herein, or willfully fails to comply with the Articles of Incorporation, these By-Laws and other Corporation contracts or requirements or willfully obstructs the purposes and proper activities of the Corporation or engages in acts or behaviors not in the best interest of the Corporation or disruptive to its operation or business plan as defined in Article VI, Section 1 and as determined by the Board. The Board shall send the notice of intent to terminate membership to the member. The notice shall include the reason or reasons for termination of membership and shall include the date and time that the member can meet with the WEB Board of Directors to appeal. Following that meeting the WEB Board of Directors shall determine a course of action as to membership and service termination. If membership and service are terminated the Board shall set a date and time for termination and shall provide a reasonable time for the member to secure an alternate source of water. Termination shall be effective upon a twothirds (2/3rds) vote of the WEB Board of Directors present at any regular or special Board meeting. Any member whose membership is terminated shall not receive WEB water service. A member s rights and interests in the assets of the Corporation will be forfeited upon withdrawal or termination of membership. Section 5. Compliance with Federal and State Law In accepting members and in managing the Corporation, no benefits, employment or membership shall Page 8

9 be denied because of a person s race, color, creed or national origin. All federal and state laws and regulations relating to equal opportunity and anti-discrimination shall be complied with by the management of the Corporation. Section 6. Membership Records - Such books of account, records and other data necessary to determine at all times the rights and interests of each member and former member of this Corporation will be maintained by the Corporation. Article VII Section 1 - Member Approved: Article VII Section 2 - Member Approved: Article VII Section 3 - Board Approved: Article VII Section 4 - Member Approved: Article VII Section 5 - Member Approved: Article VII Section 6 - Member Approved: Page 9

10 ARTICLE VIII MEETINGS OF MEMBERS Section 1. Annual Meeting The Annual Meeting of the Corporation shall be held during the months of November or December, on a date selected by the Board. The date, time and place shall be designated in the Notice of the Meeting. The Board shall make all plans and preparation for the Annual Meeting. The Board shall present for the information of the membership an annual financial statement, a budget for the next fiscal year and an audit for the previous fiscal year. The Corporation shall keep and maintain minutes of all membership meetings. Section 2. Special Meetings Special meetings of the members may be called by resolution of the Board of Directors, or upon a written request signed by any six (6) directors, OR 10% of the rural members and by fifty-one percent (51%) of the town or bulk user members of the Corporation. It shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. Special meetings of members must be held twenty (20) days, or less, from the date of receipt of a special request therefore, and shall be held at such time and at such place as shall be determined by the Board of Directors. Section 3. Notice Notice of meetings of members of the Corporation shall be given by notice mailed to each member of record, directed to the address shown upon the books of the Corporation, at least ten (10) days prior to the meeting. Such notice shall state the nature, time, place and purpose of the meeting but no failure or irregularity of notice of any Annual Meeting, regularly held, shall affect any proceedings taken thereat. Section 4. Quorum Fifty (50) members present shall constitute a quorum to conduct business and hold any meeting. If less than a quorum is present at any meeting, a majority vote of those present may adjourn the meeting from time to time without further notice. Section 5. Vote Each member shall be entitled to one vote. Voting by mail shall be supplemental to the right of voting in person but a member shall only be permitted to vote by mail upon the election of a director and amending the By- Page 10

11 Laws or Articles of Incorporation, unless the Board of Directors, by resolution of the Board of Directors at a regular or special meeting thereof, authorizes the voting by mail on additional questions. Article VIII Section 1 - Board Approved: Article VIII Section 2 - Member Approved: Article VIII Section 3 - Member Approved: Article VIII Section 4 - Member Approved: Article VIII Section 5 - Member Approved: Page 11

12 ARTICLE IX DIRECTORS Section 1. Number The business and affairs of the Corporation shall be managed by a Board of nine (9) Directors, which shall exercise all of the powers of the Corporation except those that are under law, the Articles of Incorporation or these By-Laws, conferred upon or reserved to the members. Six (6) directors shall represent, and be elected by, members which are rural water system associations or corporations or rural members (hereinafter called Rural Directors). Three (3) directors shall represent, and be elected by, members which are bodies politic and bulk-users (hereinafter called Municipal Directors). Section 2. Election and Tenure of Office The six (6) Rural Directors shall be elected by secret ballot, one from each district, with only members residing within each district being entitled to vote for a director from that district; each director shall hold office for a term of three years, and until their respective successors are elected and qualified. Directors shall be selected by plurality vote. (a) District 1 Those rural portions of Walworth and Potter County, South Dakota served by WEB. (b) District 2 - Those rural portions of Edmunds, Faulk and Hyde County, South Dakota served by WEB. (c) District 3 Those rural portions of Brown County, South Dakota served by WEB. (d) District 4 Those rural portions of Campbell and McPherson County, South Dakota and Emmons, Dickey and McIntosh County, North Dakota served by WEB. (e) District 5 Those rural portions of Spink, Beadle and Hand County, South Dakota served by WEB. (f) District 6 Those rural portions of Day, Clark and Marshall County, South Dakota served by WEB. (g) District 7 Those towns and bulk users located within McPherson, Edmunds, Faulk, Campbell, Walworth, Potter and Hyde County, South Dakota and Emmons and McIntosh County, North Dakota served by WEB. (h) District 8 Those towns and bulk users located within Brown County, South Dakota and Dickey County, North Dakota served by WEB. (i) District 9 Those towns and bulk users located within Marshall, Day, Clark, Beadle, Spink and Hand County, South Dakota served by WEB. Page 12

13 The three (3) Municipal Directors shall be elected by secret ballot, by and from members that are bodies politic (municipalities) or bulk users receiving water service by town bulk contract rate, within the district area, with each such member being entitled to cast one (1) vote for a Municipal Director for their district area every three (3) years, each Municipal Director shall hold office for a term of three (3) years and until their respective successors are elected and qualified. Directors shall be selected by plurality vote. In the event of a tie vote, the winner shall be determined by the toss of a coin if two (2) people tie and shall be determined by drawing lots if more than two (2) people tie votes. Director terms shall be staggered with three (3) Directors to be elected each year, with the following district areas elected in the following years and every three (3) years thereafter as shown below; Director District 5 Rural Spink, Beadle and Hand County. Director District 2 Rural Edmunds, Faulk and Hyde County. Director District 9 Municipal at Large; Marshall, Day, Clark, Beadle, Spink and Hand County Director District 1 Rural Walworth and Potter County. Director District 6 Rural Day, Clark and Marshall County. Director District 8 Municipal at Large; Brown County, S.D. and Dickey County, N.D Director District 3 Rural Brown County. Director District 4 Rural Campbell, McPherson, S.D. and Emmons, Dickey and McIntosh County, N.D. Director District 7 Municipal at Large; McPherson, Edmunds, Faulk, Campbell, Walworth, Potter and Hyde County, S.D. and Emmons and McIntosh County, N.D. Candidates for Municipal Director shall be any resident of a municipality or bulk user and shall be nominated by petition signed by at least seven (7) elected officials of three (3) or more municipalities or bulk users served by the WEB Project with not more than three (3) signatures from any one town or bulk user. Candidates for Rural Directors shall be a rural WEB member in good standing (meaning bills are paid and current) nominated to represent the district area, in which he/she resides, by petition signed by not less than ten (10) WEB rural members in good standing from the rural district area. Nominating petitions shall be filed with the WEB office not later than the close of business day on the 20 th day prior to the Annual Meeting, at which time in case of a contest, ballots shall be prepared and mailed to all members in the district area to be returned by mail or delivered to the Annual Meeting for tally by a committee appointed by the Chairman or his designate. Petitions must include the signer s name, address, Page 13

14 and the date of the signature and be signed by the circulator and notarized. Ballots must be received at the Annual Meeting by 11:00 A.M. in order to be considered and counted. Section 3. Directors Persons named as Directors shall hold office until their successors shall have been elected and shall have been qualified at the next Annual Meeting. Section 4. Vacancy If the office of director shall become vacant for any cause, the remaining directors may choose a successor, who shall serve until the next regular or special meeting of the members when the vacancy is filled, by elective action of the members from the proper areas. Such director shall serve the remainder of the unexpired term. Section 5. Qualifications Each Rural Director shall reside within the rural member district for which he seeks election and each Municipal Director shall reside within one of the municipal member areas. Section 6. Residency of Directors Rural Director candidates shall reside within the district area they represent and can only be eligible to represent one (1) district area. Municipal Director candidates shall reside within a town or bulk user served directly by the WEB Project and can only be eligible to represent one district area. Section 7. Removal Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions, the Board of Directors shall remove such director from office. Section 8. Validity of Board Action Nothing contained in this Article IX shall affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors, nor shall this Article apply to directors appointed by the Articles of Incorporation for the first year. Section 9. Charges Against Directors Any member in good standing whose WEB account (s) are paid and current may bring charges against a director elected for said member s district by filing with the Secretary such charges in writing together with a petition signed by at least fifty-one percent (51%) of the members from said district, requesting the removal of the 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. The person or persons bringing the charges against him shall have the same opportunity. No director shall be removed from office except by a seventy-five percent (75%) favorable vote of the members of said district. The member voting must be in attendance to hear the director s defense and to vote, voting by mail or proxy is Page 14

15 not allowed. Any vacancy created by such removal may be filled by a vote of the members of said district in the same manner as specified in Section 4 above. Remaining directors select a successor who shall serve until the next Annual Meeting when the vacancy will be filled by ballot of the members of the district. A Municipal Director shall be removed in like manner with only municipality or bulk user members of that district voting upon the question of said removal and replacement. Section 10. Per Diem Directors shall receive by resolution of the Board, a fixed sum for expenses for attendance at each meeting of the Board of Directors and for attendance at any other meeting on behalf of the Corporation, which is authorized by the Board of Directors. Section 11. Compensation Members of the Board of Directors shall receive a sum of $200 per meeting as compensation for attendance at all regularly scheduled meetings of the Board of Directors of the Corporation, and shall also receive a sum not to exceed $200 per day as compensation for attendance at other meetings they attend on behalf of the Corporation; provided that attendance at such other meetings is authorized and approved by the WEB Board and that compensation shall be made in the amount of $100 for a half day meeting and $150 for a three-quarter day meeting (example: afternoon and evening). No director shall receive compensation for serving the Corporation in any other capacity. The compensation of Board members shall be determined by resolution of the Board, which shall be presented to the Corporation for approval at any regular or special meeting of the members, and which so determined shall continue until altered or amended in like manner. The Board resolution on compensation shall accompany the meeting notice. Section 12. Term Limitations of Directors Each person shall be limited to serving three (3) consecutive three (3) year terms as a Director. The past terms of persons serving as Directors at the time of the adoption of this section shall be calculated in determining the eligibility of those persons to serve additional terms. Article IX Section 1 - Board Approved: Article IX Section 2 - Member Approved: Article IX Section 3 - Board Approved: Article IX Section 4 - Member Approved: Article IX Section 5 - Member Approved: Article IX Section 6 - Member Approved: Article IX Section 7 - Member Approved: Article IX Section 9 - Member Approved: Article IX Section 10-Board Approved: Article IX Section 11-Member Approved: Article IX Section 12-Member Approved: Page 15

16 ARTICLE X MEETING OF THE DIRECTORS Section 1. Regular Meeting A regular meeting of the Board of Directors shall be held without notice immediately after and at the same place as the Annual Meeting of the members. A meeting of the Board may also be held monthly at such time and place as the Board may provide by resolution. If set by resolution, no further notice need to be given. Section 2. Special Meeting A special meeting of the Board may be called by the Chairman or by any five (5) directors, and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. The Chairman or the directors calling the meeting shall fix the time and place for the holding of the meeting. Section 3. Notice Written notice of the time, place and purpose of any special meeting of the Board of Directors shall be delivered to each director not less than six (6) day previous thereto, either personally or by mail, by or at the direction of the Secretary or, upon a default in duty by the Secretary, by the Chairman 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 Corporation, with postage thereon fully prepaid. Section 4. Quorum Six (6) Directors of the Board shall constitute a quorum for conducting business. At any Board Meeting, a majority of the directors present may adjourn the meeting from time to time, and 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, unless otherwise provided by law, the Articles of Incorporation or the By-Laws. Article X Section 1 - Member Approved: Article X Section 2 - Board Approved: Article X Section 3 - Member Approved: Article X Section 4 - Member Approved: Page 16

17 ARTICLE XI OFFICERS Section 1. Officers The officers of the Corporation shall be a Chairman, Vice- Chairman, Secretary, Treasurer, and such other officers as may be determined by the Board of Directors from time to time. Section 2. Election of Officers The officers shall be elected by ballot annually by and from the Board of Directors, 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 his successor shall have been elected and shall have qualified. A vacancy in any office shall be filled by the Board for the unexpired portion of the term. Section 3. Removal Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors, whenever in its judgment the best interests of the Corporation will be served thereby. Article XI Section 1 - Member Approved: Article XI Section 1 - Member Approved: Article XI Section 1 - Member Approved: Page 17

18 ARTICLE XII DUTIES OF OFFICERS Section 1. Chairman The Chairman shall: a. Be the principal executive of the Corporation and, unless otherwise determined by the Board, shall preside at all meetings of the members and the Board of Directors. b. Sign, with the Secretary, Certificates of Membership, the issue of which shall have been authorized by the Board of Directors, and may 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 of Directors or by these By-Laws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. c. In general, perform all duties incident to the office of Chairman and such other duties as may be prescribed by the Board from time to time. Section 2. Vice-Chairman In the absence of the Chairman or in the event of his inability or refusal to act, the Vice-Chairman shall perform the duties of the Chairman and when so acting shall have all the powers of and be subject to all of the restrictions upon the Chairman. The Vice-Chairman shall also perform such other duties as from time to time may be assigned to him by the Board of Directors. Section 3. Secretary The Secretary shall be responsible for: Page 18 a. Keeping of the minutes of the meetings of the members and of the Board of Directors in one or more books provided for that purpose. b. Arranging for all notices to be given in accordance with the By-Laws or as is required by law. c. The safekeeping of the corporate records and of the Seal of the Corporation and affixing the Seal of the Corporation to all Certificates of Membership prior to the issuance thereof, and to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these By-Laws. d. Arranging for a complete copy of the Articles of Incorporation and By- Laws of the Corporation containing all amendments thereto to be maintained at the Corporation s principal office. e. Signing with the Chairman, legal documents authorized by the Board of Directors, unless the signing of such documents has been delegated to other officers, agents or employed personnel.

19 f. Keeping a register of the names and post office addresses of all members to be kept up to date. g. Performing such other duties as are assigned by the Board of Directors. Section 4. Treasurer The Treasurer shall be responsible for: a. Custody of all funds and securities of the Corporation. b. The receipt of and issuance of receipts of all monies due and payable to the Corporation, and the deposit of all such monies in the name of the Corporation in such bank, or banks as are selected by the Board of Directors, and making such investments of corporate funds in bonds or common stocks of other entities as are directed by the Board of Directors. c. Review the annual financial audit of the Corporation s financial and accounting records and make any necessary recommendations to the Board of Directors. d. The general performance of the entire duties incident to the office of Treasurer and such other duties as are assigned to him by the Board of Directors. Section 5. Bond The Treasurer and any other officer or agent of the Corporation charged with the responsibility for the custody of any of its funds or property shall give bonds in such sum, with a surety, as the Board of Directors shall determine. The Board of Directors in its discretion may require any other officer, agent or employee of the Corporation to give bond in such amount, and with a surety, as it shall determine. The expense of such bond shall be a legal obligation of the Corporation. Section 6. Executive Committee The Executive Committee shall conduct the affairs of the Corporation between meetings of the Board. It shall carry out all duties delegated to it by the Board. Article XII Section 1 - Member Approved: Article XII Section 2 - Member Approved: Article XII Section 3 - Member Approved: Article XII Section 4 - Member Approved: Article XII Section 5 - Member Approved: Article XII Section 6 - Board Approved: Page 19

20 ARTICLE XIII BOARD OF DIRECTORS DUTIES The Board of Directors subject to the restrictions of the law, the Articles of Incorporation, and By-Laws, shall exercise all of the powers of the Corporation. Without prejudice to, or limitation upon, their general powers, it is hereby expressly provided that the Board shall have, and are given, full power and authority to perform the duties and functions hereinafter set forth, to wit: Page 20 a. To pass upon the qualification of members and to cause to be issued appropriate Certificates of Membership. b. To select and appoint all officers or agents of the Corporation or remove all such officers or agents of the Corporation, at the pleasure of the Board, and to prescribe such duties and designate such powers as may be consistent with these By-Laws, and fix their compensation and pay for faithful services. c. To borrow from any source, money, goods or services and to make and issue notes and other negotiable and transferable instruments, mortgages, deeds of trust and trust agreements and to do every act and thing necessary to effectuate the same. d. To prescribe, adopt and amend, from time to time, such equitable and uniform Rules and Regulations as they, in their discretion, may deem essential or convenient for the conduct of the business and affairs of the Corporation and the guidance and control of its officers and employees, and to prescribe adequate penalties for the breach thereof. e. To order, at least each year, an audit of the books and accounts of the Corporation by an accountant. The report prepared by such accountant shall be submitted to the members of the Corporation prior to their Annual Meeting. f. To annually prepare and submit to the members a proposed budget for the succeeding fiscal year, and to adopt such a budget prior to the commencement of the succeeding fiscal year. g. To fix the charges to be paid by each member for services rendered by the Corporation to him, the time of payment and the manner of collection. h. To require all officers, agents and employees charged with responsibility for the custody of any of the funds of the Corporation to give adequate bonds, the cost thereof to be paid by the Corporation, and it shall be mandatory upon the directors to so require. i. To select one or more banks to act as depositories of the funds of the Corporation, to invest the funds of the Corporation directly in bonds and common stocks of any corporation or other entity whatsoever, and to determine the manner of receiving, depositing and disbursing the

21 funds of the Corporation and the form of checks and the person or persons by whom the same shall be signed, with the power to change such banks and aforesaid investments and the person or persons signing such checks and the form thereof at will. j. To create and appoint all committees and to delegate such duties as allowed by law, the Articles of Incorporation and the By-Laws. k. To use every available means to protect the Corporation and its business plan from those who (i) seeking to obstruct its purposes and proper activities and/or (ii) damage property of the Corporation or fail to pay the water bill or put the water quality of the system at risk and/or (iii) engage in acts or behaviors not in the best interest of the Corporation or are disruptive to its operation and business plan, including membership termination. Article XIII a - Member Approved: Article XIII b - Member Approved: Article XIII c - Member Approved: Article XIII d - Member Approved: Article XIII e - Member Approved: Article XIII f - Member Approved: Article XIII g - Member Approved: Article XIII h - Member Approved: Article XIII i - Member Approved: Article XIII j - Member Approved: Article XIII k - Member Approved: Page 21

22 ARTICLE XIV NON-PROFIT OPERATION Section 1. Mutual Benefit The Corporation shall at all times be operated on a non-profit basis for the mutual benefit of its members. No interest or dividend shall be paid or payable by the Corporation on any capital furnished by its members. Section 2. Purpose The Corporation will investigate, plan, and if feasible, issue securities to facilitate the installation, maintenance and operation of a main water distribution system. In return for receiving the membership fees, the Corporation will attempt to develop such a system for the mutual benefit of all members. Section 3. Rules and Rates The Board of Directors shall from time to time make such rules, policies and directives as shall be necessary for the efficient operation of the system and shall generally be responsible for the efficient operation of said system, provided that any rates or rules established must be approved by a sixty-six percent (66%) favorable vote of the Board. Article XIV Section 1 - Member Approved: Article XIV Section 2 - Member Approved: Article XIV Section 3 - Member Approved: Page 22

23 ARTICLE XV MISCELLANEOUS Section 1. Membership in Other Corporations The Corporation shall not become a member or purchase stock in any other organization without an affirmative vote of the members at a duly held meeting, the notice of which shall specify that action is to be taken upon such proposed membership or stock purchases; provided, however, that the Corporation may, upon the authorization of the Board of Directors, purchase stock in or become a member of any corporation or organization organized on a non-profit basis for the purpose of engaging in or furthering the cause of water supply systems, or of any other organization, when in the opinion of the Board of Directors such membership will promote the interests of the Corporation; and further provided that the Corporation may as a matter of investing reserve funds of the Corporation, purchase common stock of any other entities for the sole purpose of effectively managing the reserve funds of the Corporation. Section 2. Waiver of Meeting Notice Any member or director may waive, in writing, any notice of a meeting required to be given by these By-Laws, 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 on the grounds that the meeting was not lawfully called or convened. Section 3. Rules of Order Unless otherwise provided in the Articles of Incorporation or these By-Laws, the rules of parliamentary procedure as provided in the latest edition of Roberts Rules of Order shall govern the conduct of all meetings of the Board of Directors and meetings of members of the Corporation. Section 4. Appeal Procedure Any action of the Board of Directors may be recalled and reversed by action of the Corporation s members as follows: Page 23 a. Fifty-one percent (51%) of the members of the Town and Bulk User Members or ten percent (10%) of the Rural Members shall sign a petition stating the action they are challenging and seeking to recall and reverse. True copies of such petition shall be mailed as provided in Article VIII, Section 3 to each director and member at least ten (10) days prior to the special meeting referred to below. Any recall petition must be filed at the principal office of the Corporation within ninety (90) days of the Board action which the petition challenges. b. The members seeking the recall shall call for a special meeting and comply with Article VIII, Sections 2 and 3.

24 c. At such special meeting the challenge to each action shall be heard and considered by the members in attendance. Upon a favorable vote of seventy-five percent (75%) of the present and voting membership of the Corporation, the challenged action shall be of no force or effect. d. The Articles shall not apply to existing contracts or obligations regularly and legally incurred by the Corporation. Article XV Section 1 - Member Approved: Article XV Section 2 - Member Approved: Article XV Section 3 - Member Approved: Article XV Section 4 a - Member Approved: Article XV Section 4 b - Member Approved: Article XV Section 4 c - Board Approved: Article XV Section 4 d - Member Approved: Page 24

25 ARTICLE XVI AMENDMENTS These By-Laws may be altered, amended or repealed by a sixty percent (60%) favorable vote of the members at any regular or special meeting, provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal. If five percent (5%) of the membership or more desire to offer an amendment of any said articles or sections, they shall deposit a copy of said proposed amendment with the Secretary of the Board of Directors at least thirty (30) days before the meeting in which such amendment is to be considered and the Secretary shall cause a copy of said proposed amendment to be included in the notice of the meeting. At noticed meeting, a sixty percent (60%) favorable vote of those members voting is required to ratify and adopt proposed amendment. Changes in the By-Laws may be proposed by the Board of Directors, subject to review and approval of the membership at any Annual or Special Meeting. Proposed changes by the Board of Directors must be included in the notice of the meeting. Article XVI - Member Approved: Page 25