DISPOSITION OF REVENUES AND RECEIPTS
SECTION 1. Interest or Dividends on Capital Prohibited
The Corporation shall at all times be operated on a non-profit basis for the mutual benefit of its members. No interest or dividends shall be paid or payable by the Corporation on any capital furnished by its members.
SECTION 2. Patronage Capital in Connection with Furnishing Electric Energy
The Corporation’s operations shall be conducted so all members through their patronage furnish capital for the Corporation. In order to induce patronage and to ensure that the Corporation will operate on a non-profit basis, the Corporation is obligated to account on a patronage basis to all its members for all amounts received and receivable from the furnishing of electric energy in excess of operating costs and expenses properly chargeable against the furnishing of electric energy, provided however all Class C patronage shall be assigned based upon power supply patronage. All amounts in excess of operating costs and expenses at the moment of receipt by the Corporation are received with the understanding that they are furnished by the members as capital. Purchasers of the Corporation’s services, other than purchasing electric energy, shall not be eligible for membership or patronage credits and are neither members nor patrons by virtue of their purchase of these services. The Corporation is obligated to pay by credits to a capital account for each member all amounts in excess of operating costs and expenses. The books and records of the Corporation shall be set up and kept in a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each member is clearly reflected and credited in an appropriate record to the capital account of each member, and the Corporation shall, within a reasonable time after the close of the fiscal year, notify each member of the amount of capital so credited to his/her account. All 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 Corporation corresponding amounts for capital.
All other amounts received by the Corporation from its operation in excess of costs and expenses shall, in so far as permitted by law be (a) used to offset any losses incurred during the current or any prior fiscal year and, (b) to the extent not needed for the purpose, allocated to its members on a patronage basis and any amount so allocated shall be included as part of the capital credited to the account of its members, as herein provided.
In the event of dissolution or liquidation of the Corporation, after all outstanding indebtedness of the Corporation shall have been paid, outstanding capital credits shall be retired without priority rights of the members. If, at any time prior to dissolution or liquidation, the board of directors shall determine that the financial condition of the Corporation will not be impaired thereby, the capital credited to members’ accounts may be retired in full or in part. The board of directors shall determine the method, basis, priority and order of retirement, if any, for all amounts heretofore and hereafter furnished as capital. However, at the discretion of the board of directors, any member’s capital account, which is less than $20.00, may be retired in full without reference to capital first received or first retired.
Notwithstanding any other provision of the bylaws, if any member or former member fails to claim any cash retirement of capital credits or other payment from the Corporation within one (1) year after payment of the same has been made available by notice or check mailed at the last address furnished to the Corporation, such failure shall be and constitutes an ir- revocable assignment and gift by the member of the capital credit or other payment to the Corporation. Failure to claim any payment within the meaning of the section shall include the failure by the member or former member to cash any check mailed by the Corporation to the last address furnished to the Corporation. The assignment and gift provided for under this section shall become effective only upon the expiration of two (2) years from the date when the payment has been made available to the member or former member without claim therefore and only after the further expiration of sixty (60) days following the giving of a notice by mail and publication that unless the payment is claimed within the sixty (60) day period, the gift to the Corporation shall become effective. The notice by mail herein provided for shall be one mailed by the Corporation to the member or former member to the last known address and notice by publication shall be two (2) consecutive insertions in a newspaper circulated in the service area of the Corporation. The sixty (60) day period fol- lowing the notice shall be deemed to terminate sixty (60) days after the mailing of the notice or sixty (60) days following the last date of publication thereof, whichever is later.
Capital credited to the account of each member shall be assignable only on the books of the Corporation pursuant to written instructions from the assignor and only to successors in interest or successors in occupancy in all or part of the member’s premises served by the Corporation unless the board, acting under policies of general application, shall determine otherwise.
Notwithstanding any other provision of these bylaws, the board of directors at its discretion, shall have the power at any time upon the death of any member who was a natural person, or a member who was a natural person who has transferred capital credits to a trust or trustee for estate planning purposes, if the legal representatives of his estate or trust shall request in writing that the capital credited to any member be retired prior to the time the capital would otherwise be retired under the provision of these bylaws, to retire capital credited to any such member immediately upon such terms and conditions as the board of directors, acting under policies of general application, and the legal representative of the members’ estate shall agree upon; provided, however, that the financial condition of the Corporation will not be thereby impaired. The Corporation, shall have a lien against capital furnished by a member and, before retiring any capital credited to any member’s account, shall deduct from any amount owing by the member to the Corporation, together with interest thereon at a reasonable rate as from time to time established by the board of directors and in effect when the amount became overdue.
The members of the Corporation, by dealing with the Corporation, acknowledge that the terms and provisions of the articles of incorporation and bylaws shall constitute and be a contract between the Corporation and each member, and both the Corporation and the members are bound by this contract as fully as though each member had individually signed a separate instrument containing these terms and provisions.