Exhibit 3(A)
ARTICLES OF INCORPORATION AND BYLAWS OF FARMLAND INDUSTRIES, INC.
Kansas City, Missouri
(Effective 12-1-93)
ARTICLES OF INCORPORATION
ARTICLE I - NAME
Section 1. Name. The name of this corporation shall be FARMLAND
INDUSTRIES, INC.
ARTICLE II - PURPOSES
Section 1. Purposes. The purposes for which the Association is organized
are to engage in any activity in connection with the marketing or selling of the
agricultural products of its members and other patrons; or with the harvesting,
threshing, milling, preserving, drying, processing, canning, packing, storing,
handling, shipping, or utilization thereof, including (without limitation) doing
a public warehouse business and storing agricultural products in interstate
commerce; or the manufacturing or marketing of the by-products thereof; or in
connection with the manufacturing, selling, or supplying to its members and
other patrons of machinery, equipment or supplies, or in connection with
agricultural education, research, legislation and economic and social
conditions; or in connection with the improvement of livestock breeds by means
of artificial breeding or otherwise; or in the financing of the above-enumerated
activities; or in any one or more of the activities specified herein.
ARTICLE III - PLACE OF BUSINESS
Section 1. Place. The place where its business is to be transacted is at
3315 North Oak Trafficway, Kansas City, Missouri, and at such other places
either within or outside the State of Kansas as may be provided by the bylaws or
as determined by the Board of Directors.
ARTICLE IV - TERM
Section 1. Term. The term for which this corporation is to exist is fifty
years. (By a Certificate of Renewal filed with the Secretary of State of Kansas
on September 7, 1973, the term was extended for a period of fifty years from and
after September 1, 1973.)
ARTICLE V - NUMBER OF DIRECTORS
Section 1. Number of Directors. The number of directors of this
corporation shall be twenty-two (22), and the term of office of each thereof
shall be three (3) years and until his successor is elected and has qualified.
ARTICLE VI - CAPITAL STOCK
Section 1. Authorized Capital Stock. The capital stock of this
Association shall be $1,500,000,000, consisting of 50,000,000 shares of common
stock of the par value of $25 per share, 2,000,000 shares of associate member
common stock of the par value of $25 per share and 8,000,000 shares of preferred
stock of the par value of $25 per share.
Section 2. Common Stock. The common stock of this Association may be
purchased, owned or held only by producers of agricultural products and
associations of such producers, who patronize the Association in accordance with
uniform terms and conditions and only such producers and associations of such
producers shall be regarded as eligible voting members of the Association. In
the event the Board of Directors of the Association shall determine that any
holder of the common stock of this Association does not meet the qualifications
as may be established by the Board of Directors for holders thereof, such person
shall have no rights or privileges on account of such common stock to vote for
director(s) or to vote on the management or affairs of the Association, and the
Association shall have the right, at its option, (a) to purchase such common
stock at its book or par value, whichever is less, as determined by the Board of
Directors of the Association, or (b) in exchange for such common stock, to issue
an equivalent par value amount of associate member common stock or to issue or
record on the books of the Association, capital credits in an equivalent amount.
On the failure of any holder, following any demand by the Association therefor,
to deliver the certificate or certificates evidencing any common stock, the
Association may cancel the same on its books and issue associate member common
stock or issue or record on the books of the Association an equivalent amount of
capital credits, in lieu thereof. The common stock of this Association may be
transferred, and associate member common stock and capital credits may be
converted to common stock and transferred, only with the consent of the Board of
Directors of the Association and on the books of the Association and then only
to persons eligible to hold the same; and no purported assignment or transfer of
common stock shall pass to any person not eligible to hold the same, any rights
or privileges on account of such stock to vote on the management or affairs of
the Association. Each holder of common stock shall be entitled to a minimum of
one vote. Common shareholders will receive one additional vote for each
complete increment of $1,000 in common stock above membership requirements and
one additional vote for each complete increment of dollar volume of business in
an amount equal to the product of $1,000 multiplied by a fraction the numerator
of which is the total dollar volume of patronage business of the Association
during the preceding fiscal year with common shareholders and the denominator of
which is the total dollar amount of the Association's common stock issued and
outstanding at the close of the preceding fiscal year. No common shareholder
shall be entitled to vote more than five percent (5%) of the total votes of the
Association available to be cast. This Association shall have a lien on (and
right of setoff against) all of its issued common stock for all indebtedness of
the holder(s), whether due or to become due, thereof to the Association. No
interest or dividend shall be paid on outstanding common stock. The Board of
Directors, in its sole discretion, may at any time or times and on any basis
deemed appropriate authorize the retirement of any common stock, in whole or in
part. Each certificate of common stock issued subsequent to the date of an
amendment shall have the then applicable provisions printed thereon.
Section 3. Associate Member Common Stock. The associate member common
stock of the Association may be purchased, owned or held by any person having
the qualifications as may be established by the Board of Directors. Associate
member common stock shall have all of the rights and privileges attendant to
that of common stock, except that such associate member common stock shall not
entitle the holder thereof to vote, irrespective of the number of shares held,
for director(s) or to vote on the management or affairs of the Association. In
the event the Board of Directors of the Association shall determine that any
holder of the associate member common stock of the Association does not meet the
qualifications as may be established by the Board of Directors for holders
thereof, the Association shall have the right, at its option, (a) to purchase
such associate member common stock at its book or par value, whichever is less,
as determined by the Board of Directors of the Association, or (b) to convert
the associate member common stock held by any such person to capital credits by
notifying such holder, after which such associate member common stock shall be
cancelled on the books of the Association. The associate member common stock of
this Association may be transferred, and common stock and capital credits may be
converted to associate member common stock and transferred, only with the
consent of the Board of Directors of the Association and then only to persons
eligible to hold the same; and no purported assignment or transfer of associate
member common stock shall pass to any person not eligible to hold the same, any
rights or privileges on account of such stock. This Association shall have a
lien on (and right of setoff against) all of its issued associate member common
stock for all indebtedness of the holder(s), whether due or to become due,
thereof to the Association. No interest or dividend shall be paid on
outstanding associate member common stock. The Board of Directors, in its sole
discretion, may at any time or times and on any basis deemed appropriate au-
thorize the retirement of any associate member common stock, in whole or in
part. Each certificate of associate member common stock issued subsequent to
the date of an amendment shall have the then applicable provisions printed
thereon.
Section 4. Preferred Stock. The preferred stock shall be nonvoting and
may be (1) made subject to redemption at such time or times, and at such price
or prices, and (2) issued in such series, with such designations, preferences,
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions as shall be stated and expressed in
the Articles of Incorporation of this Association, or in the resolution or
resolutions adopted by the Board of Directors thereof for the issue of such
stock; and the said Board of Directors is hereby granted authority (1) to
provide from time to time for the issue of preferred stock, in one or more
series, and with such designations, preferences, and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions, and (2) to make such stock, or any part thereof, subject to
redemption at such time or times, and at such price or prices, as the said Board
of Directors, in its sole discretion, may from time to time determine.
Section 5. Capital Credits. The Association may issue at any time, and
record or transfer on its books and records, one or more classes of capital
credits in the Association. Holders of capital credits shall not be entitled to
vote. The capital credits of this Association may be transferred, and common
stock and associate member common stock may be converted to capital credits and
transferred, only with the consent of the Board of Directors of the Association
and on the books of the Association. The Board of Directors, in its sole
discretion, may at any time or times and on any basis deemed appropriate
authorize the transfer or retirement of any capital credits, in whole or in
part. No interest or dividend shall be paid on outstanding capital credits.
This Association shall have a lien on (and right of setoff against) all of its
issued capital credits for all indebtedness of the holder(s), whether due or to
become due, thereof to the Association. Each certificate of capital credits
issued subsequent to the date of an amendment shall have the then applicable
provisions printed thereon.
ARTICLE VII - INDEMNIFICATION
Section 1. Indemnification. The Association may agree to the terms and
conditions upon which any director, officer, employee or agent accepts his
office or position and in its bylaws, by contract or in any other manner may
agree to indemnify and protect any director, officer, employee or agent of the
Association, or any person who serves at the request of the Association as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to the fullest extent permitted by the laws
of the State of Kansas.
Section 2. Limitation of Liability. Without limiting the generality of
the foregoing provisions of this ARTICLE VII, to the fullest extent permitted or
authorized by the laws of the State of Kansas, including without limitation the
provisions of subsection (b)(8) of Kan. Stat. Ann. Section 17-6002 (1981) as
now in effect and as it may from time to time hereafter be amended, no person
who is currently or shall hereinafter become a director of the Association shall
have personal liability to the Association for monetary damages for breach of
fiduciary duty as a director for any act or omission occurring subsequent to the
date this provision becomes effective. If the Kansas General Corporation Code
is amended after approval of this provision by the shareholders of the
Association, to authorize corporate action further limiting or eliminating the
personal liability of directors, then the liability of a director of the
Association shall be limited or eliminated to the fullest extent permitted by
the Kansas General Corporation Code, as so amended.
BYLAWS
ARTICLE I - CAPITAL STOCK
Section 1. Stock Certificates. Certificates of stock shall be issued to
each holder of fully-paid shares. Each certificate shall state the par value of
the shares, the number of shares represented, the name of the person to whom
issued, and shall bear the signature of the president or a vice president and
the secretary or an assistant secretary and the seal of the Association, which
signatures and seal may be facsimiles. Certificates of stock shall be numbered
and issued in numerical order and a record of each certificate issued shall be
kept.
Section 2. Certificates of Indebtedness. The Association shall have the
authority to issue certificates of indebtedness in such form and containing such
terms as may be approved by the Board of Directors, which certificates shall
bear such rate or rates of interest as the Board of Directors may from time to
time determine.
ARTICLE II - DISTRIBUTION OF EARNINGS
Section 1. Current Year's Net Earnings and Patronage Refund Obligation.
(a) The Association shall determine annually its earnings or loss including the
appropriate portions thereof constituting net earnings for patronage refunds.
It shall then allocate and distribute its net overall earnings from its
allocation units as patronage refunds to its Members and Patrons with the
amounts distributed being determined on the basis of their patronage with such
units during the year.
(b) The Association's overall earnings or loss shall first be determined
using generally accepted accounting principles. For the fiscal year ending
August 31, 1994, the overall net earnings or loss shall then be increased or
decreased in accordance with the applicable rules and regulations for computing
income taxes. Beginning with the fiscal year ending August 31, 1995, the
overall net earnings or loss shall no longer be adjusted based on such
applicable rules and regulations for computing income taxes. Then any earnings
or losses of the allocation units shall be offset in accordance with Section 4
of this Article to establish the overall net earnings of the Association's
remaining allocation units which will be available for patronage refunds.
(c) The Association's overall net earnings or loss shall be divided into
(i) a patronage-sourced portion, determined on the basis of the quantity or
value of business done by the Association with or for its Members or Patrons who
are eligible to receive patronage refunds and who acquire supplies or services
from, or market products through the Association, and (ii) a non-patronage-
sourced portion which shall include amounts determined on the basis of the quan-
tity or value of business done with or for persons who are not eligible to
receive patronage refunds from the Association, plus such net amounts of income
(or expense) which are unrelated to the marketing, purchasing or service
operations carried on by the Association for its Members and Patrons on a
cooperative basis.
(d) Any patronage-sourced net earnings shall be further reduced (but not
below zero) by the ratably determined portion of dividends on stock applicable
to such net earnings that are paid or payable for the fiscal year. Then there
shall be deducted the accumulated amount of patronage-sourced losses from prior
years which have not otherwise been disposed of by the Board of Directors but
not in excess of the amount of net operating loss carryforwards available for
use in such year.
(e) If at the conclusion of any fiscal year, the amount of retained
earnings (which shall include the current year's non-patronage-sourced net
earnings) is less than thirty percent (30%) of Member and Associate Member
common stock issued and outstanding, and patronage refunds for reinvestment
balances as of the end of the previous year then, in order to provide for the
Association's reasonable member reserves, there shall be transferred to re-
tained earnings, from patronage-sourced net earnings, as members' contribution
to reserves, an amount equal to the lesser of (i) fifteen percent (15%) of the
current year's remaining patronage-sourced net earnings, or (ii) such amount
necessary to increase retained earnings (which shall include the current year's
non-patronage-sourced net earnings) to thirty percent (30%) of Member and
Associate Member common stock outstanding at the conclusion of the previous
fiscal year.
(f) Any amount then remaining shall constitute the net earnings of the
Association from which Members' and Patrons' patronage refunds shall be paid,
and such amount shall be apportioned among the Members and Patrons of the
appropriate allocation units on any equitable patronage basis approved by the
Board of Directors, and the amounts so determined, shall be paid as patronage
refunds in the form of cash, qualified or non-qualified written notices of
allocation, provided, however, that a payment by qualified written notice of
allocation shall be accompanied by no less than twenty percent (20%) of the
stated dollar amount thereof in cash with the balance at par value in Member
common stock, Associate Member common stock or capital credits at par value or
stated value as determined by the Board of Directors. The Board of Directors
shall determine the cash and non-cash amounts, if any, of a Member's or Patron's
patronage refund to be retained for purposes of collecting amounts due the
Association for such Member's or Patron's subscriptions to any official
publication of the Association or for any or all of such Member's or Patron's
outstanding indebtedness to the Association, provided that no retention of cash
hereunder shall reduce the cash portion of any Member's or Patron's patronage
refund otherwise paid by qualified written notice of allocation, to an amount
which is less than twenty percent (20%) of the total stated dollar amount
thereof.
Section 2. Bylaw Consent. Each applicant for membership who continues as
a voting member after having been accepted to membership in the Association and
after receiving a copy of this bylaw consent provision, shall, by such act
alone, consent that the amount of any distributions paid by qualified written
notices of allocation, respecting such person's patronage with the Association
occurring after it has received a copy of the bylaw consent and while such
person remains a voting member thereafter, shall be taken into account by such
person at its stated dollar amount for the taxable year in which such
distribution(s) are received, in the manner provided by 26 U.S.C. 1385(a).
Section 3. Losses. The Board of Directors of this Association shall have
complete discretion to determine the handling and ultimate disposition of the
Association's losses (including allocation unit losses) and the form, priority
and manner in which such losses or portions thereof shall be taken into account,
retained, and ultimately disposed of or recovered. The Board may retain losses
of the Association and subsequently (i) dispose of them by offset against the
net earnings of the Association of subsequent years, (ii) apply such losses to
prior years' patronage allocations at any time in order to dispose of them by
means of offset and cancellation against members' and patrons' equity account
balances, (iii) select and use any other method of disposition as the Board of
Directors, in its sole discretion, shall from time to time then determine.
Section 4. Netting of Allocation Unit Earnings and Loss. If one or more
of the Association's allocation units experience both earnings and losses during
any fiscal year, the earnings and losses of such allocation unit or units shall
be ratably allocated to and netted with the earnings and losses of the remaining
allocation units of the Association in order to determine the Association's
overall net earnings. The Association's Patrons and Members shall be notified
in any fiscal year for which such netting has occurred.
Section 5. Definitions. (a) As used in this Article, the term "Member"
shall mean a holder of common stock or Associate Member common stock of the
Association; the term "Patron" shall include any person, firm or association
which is not also a Member or Associate Member of the Association, with whom the
Association has in effect an agreement pursuant to which it has agreed to pay
patronage refunds to such person on the basis of the quantity or value of the
Association's business done with or for such person during the fiscal year.
(b) As used in this Article, the term "allocation unit" shall mean any
business or other unit of the Association with respect to which patronage
refunds are to be paid (or patronage-sourced losses are to be taken into
account) on the basis of the quantity or value of business done during the year
with the Association by its Members and Patrons.
ARTICLE III - CAPITALIZATION
Section 1. Base Capital Plan. For the purposes of acquiring and
maintaining adequate capital to finance the business of the Association, the
Board of Directors may establish a Base Capital Plan. The Plan may provide a
mechanism for determining the Association's total capital requirements and each
member's or patron's share thereof (the base capital requirement). As part of
the Plan, the Board of Directors may, in its discretion, provide for redemption
of capital held by members or patrons in excess of their base capital
requirements and may provide a mechanism under which the cash portion of the
patronage refund payable to members or patrons will depend upon the degree to
which such members or patrons meet their base capital requirements. Such Plan
may be amended or modified from time to time or suspended by the Board of
Directors as it deems fit.
ARTICLE IV - MEMBERS' AND PATRONS' INVESTMENTS
Section 1. Common Stock, Associate Member Common Stock, Capital Credits.
As a condition of the right to receive patronage refunds as hereinbefore
provided, and as a condition of each purchase from, or other transaction with,
the Association, and in consideration of similar subscriptions by others, each
Member and Patron entitled to receive patronage refunds under the bylaws shall
and does hereby, as of the first day of each fiscal year of the Association,
irrevocably subscribe for and agree to purchase common stock, associate member
common stock or other capital credit(s) of the Association, at par, in an amount
of not more than eighty percent (80%) of the amount to be paid to such patron by
the Association as patronage refunds resulting from business transacted during
such year, as conclusively determined by the Board of Directors of the
Association at the time of payment of such refunds. Such subscriptions shall be
payable in cash on or before the last day of such fiscal year, without the
execution and delivery of any further agreement, and without any acceptance,
call or notice by the Association, but only out of such patronage refunds.
ARTICLE V - MEETINGS
Section 1. Annual Meeting. The annual meeting of the shareholders shall
be held each year at such time and at such place as may be fixed from time to
time by the Board of Directors.
Section 2. Special Meetings. The chairman of the board shall call a
special meeting of the shareholders upon a written request of at least ten
percent (10%) of the shareholders, or upon a majority vote of the directors.
The notice of the time, place, and purpose of such special meeting shall be
issued within fifteen (15) days from and after the presentation of such
petition, and such special meeting shall be held within thirty (30) days from
and after the date of presenting such petition.
Section 3. Notice of Meetings. Notice shall be given by the secretary of
all annual and special meetings of the shareholders by mailing a notice thereof
to each shareholder not less than fifteen (15) days preceding the date of the
proposed meeting.
Section 4. Presiding Officer. The chairman of the board of the
Association shall preside at all meetings of shareholders, and shall cast the
deciding vote in all cases of a tie.
Section 5. Absent Members Voting. Voting by proxy shall not be permitted,
but absent shareholders entitled to vote may vote on specific questions, other
than the removal of directors, by ballots transmitted to the secretary, and such
ballots shall be counted only in the meeting at the time at which such vote is
taken.
Section 6. Quorum. A quorum for the transaction of business shall consist
of at least two hundred (200) shareholders entitled to vote and at least one-
third of the total votes eligible to be cast. All shareholders voting by mail
and all votes cast by mail shall be counted as present in determining a quorum
for the consideration of a specified question on which votes may be cast by
mail.
ARTICLE VI - DIRECTORS AND OFFICERS
Section 1. Directors. The business and affairs of the Association shall
be managed under the direction and control of the Board of Directors, consisting
of twenty-two (22) members, elected at annual meetings by the shareholders
entitled to vote from their own numbers for three-year terms. Twenty-one
members of the Board of Directors shall be elected according to districts as
hereinafter provided and shall be known as district directors. The remaining
member of the Board of Directors shall be nominated and elected from the floor
and shall be known as a director-at-large.
Section 2. Election of Directors.
(a) The territory in which the Association operates shall, for the purpose
of electing district directors, be divided into districts, each of which shall
be entitled to the number of directors herein specified.
DISTRICT 1 (Missouri and Kentucky) -- 1 director; DISTRICT 2
(Kansas) -- 4 directors; DISTRICT 3 (Colorado, Wyoming, Utah, Oregon
and Idaho) -- 1 director; DISTRICT 4 (Nebraska) -- 4 directors;
DISTRICT 5 (South Dakota, North Dakota and Montana) -- 1 director;
DISTRICT 6 (Iowa, Illinois and Indiana) -- 4 directors; DISTRICT 7
(Oklahoma and Arkansas) -- 3 directors; DISTRICT 8 (Michigan,
Minnesota and Wisconsin) -- 2 directors; and DISTRICT 9 (Texas and New
Mexico) -- 1 director.
(b) The Board of Directors may from time to time assign to any of the
aforesaid districts any member or members residing in any state or states or
foreign country or foreign countries, other than the states named in the
foregoing paragraph. In any such case a member so assigned to any district
shall for all purposes be deemed to belong to such district and shall be
entitled to attend and participate in the hereinafter mentioned caucus of that
district.
(c) The various districts shall, by caucus, nominate their candidate or
candidates for director as herein provided. The following persons shall be
eligible for election as a director at the annual meeting of members: individual
shareholders; members, directors, officers, or employees of an association
shareholder; and, employees of the Association. In the event the number of
directors who are employees of shareholders entitled to vote totals ten or more
at any given time, no employee of a shareholder may be elected or appointed to
the Board of Directors, provided however, this limitation shall not disqualify
any director in office from being eligible for election or re-election as a
director. No person shall be eligible for nomination as a director if such
person has attained 65 years of age. Five months prior to the annual meeting the
chairman of the board shall appoint a nominating committee for each district in
which the term of a director expires at the next annual meeting. The district
nominating committee shall consist of three persons (one person to be appointed
as chairman) meeting the qualifications required to be a director as set forth
above. As promptly as possible after the appointment of district nominating
committees, the secretary of the Association shall notify the president of each
member association in each such district, by mail, of the members of the
district nominating committee. Each member association may notify the chairman
of the district nominating committee of the member association's candidate or
candidates for director at least three months prior to the date of the annual
meeting. Such action shall be evidenced by board resolution duly recorded in its
minutes. The district nominating committee shall mail its report to the
president of each member association in each such district at least one month
prior to the annual meeting and shall render its report at the caucus of such
district to be held at and in conjunction with the annual meeting, and in doing
so, shall provide at least one candidate, but not more than three candidates,
for each director term which is expiring. In addition to the names of candidate
or candidates provided by member associations for consideration by the district
nominating committee, such committee may also consider as candidates persons the
committee feels qualified. Any official delegate may make nominations at the
district caucus. Such district shall thereupon nominate its nominee or nominees
for directors and the names of said nominee or nominees shall be placed before
the members at the annual meeting for election. Should said nominee or nominees
fail to receive a majority of the votes cast by shareholders entitled to vote
and present and voting, nominations may be made from the floor, of nominee or
nominees from the district involved, and such shareholders shall thereupon vote
on said nominee or nominees. In each district caucus wherein directors are
nominated and in the election of directors at the annual meeting, shareholders
entitled to vote shall have the number of votes as determined under the Articles
of Incorporation, of the Association, for each director to be elected.
(d) A redistricting of the territory served by the Association, or a
reapportionment of the number of directors for each district, may be made by the
members at any annual meeting.
Section 3. Officers. The officers, each of whom shall serve at the will
of the Board of Directors and shall be elected by the Board of Directors, shall
consist of a chairman of the board, vice chairman, president, vice president,
secretary, one or more assistant secretaries, treasurer, one or more assistant
treasurers, and such other officers as the Board of Directors may from time to
time deem advisable. Only the chairman of the board, vice chairman, president,
and the vice president need be members of the Board of Directors. No person may
hold the offices of chairman of the board and president at the same time.
Section 4. Vacancies. Any vacancy on the Board of Directors shall be
filled by appointment by the remainder of the board until the next annual
meeting when a replacement for the unexpired term shall be elected.
Section 5. Meetings. The board shall meet upon the call of the chairman
of the board who shall determine the time and place of meetings, or upon call by
a majority of the directors; and meetings shall be held at least quarterly.
Section 6. Quorum. A majority of the qualified members shall constitute a
quorum both for the Board of Directors and the executive committee.
Section 7. Compensation. The compensation of the directors for attendance
at meetings shall be Three Hundred Dollars ($300.00) per day, plus necessary
expenses.
Section 8. Removal. Any director of the Association may be removed for
cause, by vote of not less than two-thirds of the members present, at any annual
meeting or at any special meeting called for the purpose. A director shall be
informed in writing of the charges preferred against him at least fifteen (15)
days before the meeting and at such meeting shall have an opportunity to be
heard in person or by counsel and by witnesses thereto. Officers or agents of
the Board of Directors may be removed from office or employment at any time by
action of the Board of Directors.
Section 9. Indemnification of Directors, Officers and Employees. Each
person who is or was a director, officer or employee of the Association or is or
was serving at the request of the Association as a director, officer or employee
of another corporation (including the heirs, executors, administrators or estate
of such person) shall be indemnified by the Association as of right to the full
extent permitted or authorized by the laws of the State of Kansas, as now in
effect and as hereafter amended, against any liability, judgment, fine, amount
paid in settlement, cost and expense (including attorneys' fees) asserted or
threatened against and incurred by such person in his capacity as or arising out
of his status as a director, officer or employee of the Association, or, if
serving at the request of the Association, as a director, officer or employee of
another corporation. The indemnification provided by this bylaw provision shall
not be exclusive of any other rights to which those indemnified may be entitled
under any other bylaw or under any agreement, vote of shareholders or
disinterested directors or otherwise, and shall not limit in any way any right
which the Association may have to make different or further indemnifications
with respect to the same or different persons or classes of persons.
ARTICLE VII - DUTIES OF DIRECTORS
Section 1. Management of Business. The Board of Directors shall direct
the management of the affairs of the Association and shall make all necessary
rules and regulations, not inconsistent with the law or the articles of
incorporation or bylaws of the Association, for the management and control of
the affairs of the Association and the guidance of the officers, agents, and
employees thereof. The day-to-day business affairs of the Association shall be
in the management and control of the president, selected by the board.
Section 2. Executive Committee. An executive committee of six, which
shall include the chairman, vice chairman, and president of the Association and
three other members to be elected by the board from among its own members at its
first meeting after the annual meeting shall have all the powers and exercise
all the functions of the Board of Directors, subject to the Board of Directors'
general control and direction.
Section 3. Bonds. The Board of Directors shall require all officers and
employees charged by the Association with responsibility for the custody of any
of its funds or property to give adequate bonds, and the costs thereof shall be
paid by the Association.
Section 4. Audits. As often as the Board of Directors may consider
necessary, but at least once a year, the Board of Directors shall obtain the
services of a competent and disinterested auditor, who shall make a careful
audit of the books and accounts of the Association and render a report in
writing thereon. The annual audit report shall be submitted to the members of
the Association at the annual meeting.
ARTICLE VIII - DUTIES OF OFFICERS
Section 1. Duties of Chairman of the Board. The chairman of the board
shall preside over all meetings of the shareholders and of the Board of
Directors and call special meetings of the shareholders and of the Board of
Directors whenever he deems such action advisable.
Section 2. Duties of Vice Chairman. In the absence or disability of the
chairman, the vice chairman shall perform the duties and exercise the powers of
the chairman. The vice chairman shall perform such other duties as may be
imposed upon him from time to time by the board.
Section 3. Duties of President. The president shall be the chief
executive officer; shall sign or delegate to such other officers or employees of
the Association as the president may, in his sole discretion, determine, the
authority to sign stock certificates, deeds, leases, bills of sale and other
instruments conveying any interest in real estate or personal property of the
Association and such other instruments or documents as the Board of Directors
may authorize or direct from time to time; shall have and exercise the power to
hire and fire all employees other than officers, administrative officers, agents
or employees selected by the Board of Directors; see that the management and
business operations of the Association are exercised and conducted in accordance
with general policies established by the Board of Directors; and perform such
other duties and exercise such other power or powers as the Board of Directors
may from time to time authorize or direct.
Section 4. Duties of Vice Presidents. One vice president shall be chosen
from the membership of the board. The president may appoint such additional
vice presidents as he deems appropriate to conduct the affairs of the
Association. The duties of vice presidents shall be assigned to them by the
president. The president may delegate to one or more elected officer(s) the
authority to perform his duties during his absence in such manner as he deems
appropriate. In the event of the total disability or death of the president,
the vice president who is a board member shall perform the duties of the
president until such time as the board shall otherwise direct or until a
successor to the president is elected.
Section 5. Duties of Secretary. The secretary shall (1) keep a complete
record of the meetings of the shareholders and of the directors; (2) sign all
stock and membership certificates with the president or a vice president, and
such other papers pertaining to the Association as he may be authorized or
directed to sign by the directors; (3) serve all notices and make all reports
required by law and these bylaws, and perform such other secretarial duties as
may be required by the Board of Directors. The assistant secretaries shall
perform the duties and exercise the powers of the secretary during the absence
or disability of the secretary.
Section 6. Duties of Treasurer. The treasurer shall keep such records and
perform such other duties pertaining to his office as the Board of Directors may
require. The assistant treasurers shall perform the duties and exercise the
powers of the treasurer during the absence or disability of the treasurer.
ARTICLE IX - GENERAL PROVISIONS
Section 1. Fiscal Year. The fiscal year of this Association shall
commence September 1 and end on August 31.
Section 2. Amendments. These bylaws may be amended or altered, in whole
or in part, as provided by law, at any regular meeting of the members or at any
special meeting, when such action has been duly announced in the call, provided
that a majority of the votes cast by the shareholders entitled to vote and
present and voting, including those votes cast by mail, shall approve such
amendment or alteration.
Section 3. Official Publication. The Association may publish an official
publication. It may be mailed to subscriber lists provided by member
associations and the subscription price may be deducted from patronage refunds
earned by members.
Section 4. Membership Vote for Sale of Principal Business. The
Association shall not, without approval by a vote of the majority of the votes
cast by members entitled to vote and present and voting at a duly called meeting
of the Association, sell or convey or cause or permit the sale or conveyance of
more than forty-nine percent (49%) of the voting shares in any subsidiary which
accounted for fifty percent (50%) or more of the Association's gross sales on a
consolidated basis during any one of the Association's three (3) most recently
completed fiscal years or during such shorter period as such subsidiary has been
in existence.
ARTICLE X - DISSOLUTION
Section 1. Upon dissolution or liquidation of the Association in any
manner, except as may be otherwise provided by law, the assets of the
Association shall be distributed in the following order and manner, to wit:
1. To pay all costs and expenses of dissolution, liquidation and
distribution;
2. To pay and discharge all indebtedness of the Association, exclusive of
any liability for the distribution of net earnings;
3. To retire, at par value plus unpaid accrued dividends thereon, if any,
the five and one-half percent (5 1/2%) and the six percent (6%) preferred stock;
4. To retire, at par value plus unpaid accrued dividends thereon, if any,
all other preferred stock of the Association, in the order and in accordance
with such priority as may be provided for by the terms and provisions of the
outstanding certificates therefor;
5. To pay all patronage refunds payable from current net earnings; and
6. All remaining assets, if any, shall be distributed among the holders of
common stock and associate member common stock or other capital credit(s) in
proportion to the amounts thereof held by each.