Exhibit 3.2
OPERATING AGREEMENT
OF
RED TRAIL ENERGY, LLC
MEMBERS
1.1. Place of Meetings. Each meeting of the members shall be held at the
principal executive office of the Company or at such other place as may be
designated by the Board of Governors or the President; provided, however, that
any meeting called by or at the demand of a member or members shall be held in
the county where the principal executive office of the Company is located.
1.2 Regular Meetings. Regular meetings of the members may be held on an
annual or other more frequent basis as determined by the Board of Governors;
provided, however, that if a regular meeting has not been held during the
immediately preceding fifteen (15) months, a member or members owning five
percent (5%) or more of the voting power of all membership interests entitled to
vote, may demand a regular meeting of members by written demand given to the
President or Treasurer of the Company. At each regular meeting the members
entitled to vote shall elect qualified successors for governors who serve for an
indefinite term or whose terms have expired or are due to expire within six
months after the date of the meeting and may transact any other business,
provided, however, that no business with respect to which special notice is
required by law shall be transacted unless such notice shall have been given.
1.3 Special Meetings. A special meeting of the members may be called for
any purpose or purposes at any time by the President, by the Board of Governors
or any two or more governors, or by one or more members owning not less than ten
percent (10%) of the voting power of all membership interests of the Company
entitled to vote, who shall demand such special meeting by written notice given
to the President of the Company specifying the purposes of such meeting.
1.4 Meeting Held Upon Member Demand. Within thirty (30) days after receipt
of a demand by the President from any member or members entitled to call a
meeting of the members, it shall be the duty of the Board of Governors of the
Company to cause a special or regular meeting of members, as the case may be, to
be duly called and held on notice no later than ninety (90) days after receipt
of such demand. If the Board fails to cause such a meeting to be
Page 1 of 10
called and held as required by the Section, the member or members making the
demand may call the meeting by giving notice as provided in Section 1.6 hereof
at the expense of the Company.
1.5 Adjournments. Any meeting of the members may be adjourned from time to
time to another date, time and place. If any meeting of the members is so
adjourned, no notice as to such adjourned meeting need be given if the date,
time and place at which the meeting will be reconvened are announced at the time
of adjournment.
1.6 Notice of Meetings. Unless otherwise required by law, written notice of
each meeting of the members, stating the date, time and place and, in the case
of a special meeting, the purpose or purposes, shall be given at least ten (10)
days and not more than fifty (50) days prior to the meeting to every owner of
membership interests entitled to vote at such meeting except as specified in
Section 1.5 or as otherwise permitted by law. The business transacted at a
special meeting of members is limited to the purposes stated in the notice of
the meeting.
1.7 Waiver of Notice. A member may waive notice of the date, time, place
and purpose or purposes of a meeting of members. A waiver of notice by a member
entitled to notice is effective whether given before, or after the meeting, and
whether given in writing, orally, or by attendance. Attendance by a member at a
meeting is a waiver of notice of that meeting, unless the member objects at the
beginning of the meeting to the transaction of business because the meeting is
not lawfully called or convened, or objects before a vote on an item of business
because the item may not lawfully be considered at that meeting and does not
participate in the consideration of the item at that meeting.
1.8 Voting Rights. A member shall have voting power in proportion to the
member's voting interest, as provided in a member control agreement. Except as
otherwise required by law, an owner of a membership interest entitled to vote
may vote any portion of the membership interest in any way the member chooses.
If a member votes without designating the proportion of the membership interest
voted in a particular way, the member is deemed to have voted all of the
membership interest in that way.
1.9 Proxies. A member may cast or authorize the casting of a vote by filing
a written appointment of a proxy with a manager of the Company at or before the
meeting at which the appointment is to be effective. The member may sign or
authorize the written appointment by telegram, cablegram or other means of
electronic transmission setting forth or submitted with information sufficient
to determine that the member authorized such transmission. Any
Page 2 of 10
copy, facsimile, telecommunication or other reproduction of the original of
either the writing or transmission may be used in lieu of the original provided
that it is a complete and legible reproduction of the entire original.
1.10 Quorum. The owners of a majority of the voting power of the membership
interests entitled to vote at a meeting of the members are a quorum for the
transaction of business, unless a larger or smaller proportion is provided in
the Articles of Organization of the Company or a member control agreement. If a
quorum is present when a duly called or held meeting is convened, the members
present may continue to transact business until adjournment, even though the
withdrawal of members originally present leaves less than the proportion
otherwise required for a quorum.
1.11 Acts of Members. Except as otherwise required by law or specified in
the Articles of Organization of the Company or a member control agreement, the
members shall take action by the affirmative vote of the owners of the greater
of (a) a majority of the voting power of the membership interests present and
entitled to vote on that item of business or (b) a majority of the voting power
that would constitute a quorum for the transaction of business at a duly held
meeting of members.
1.12 Action Without a Meeting. Any action required or permitted to be taken
at a meeting of the members of the Company may be taken without a meeting by
written action signed by all of the members entitled to vote on that action. Any
action, if the Articles of Organization or a member control agreement so
provide, may be taken by written action signed by the members who own voting
power equal to the voting power that would be required to take the same action
at a meeting of the members at which all members were required members, unless a
different effective time is provided in the written action. When written action
is permitted to be taken by less than all members, all members shall be notified
immediately of its text and effective date.
GOVERNORS
2.1 Number; Qualifications. Except as authorized by the members pursuant to
a member control agreement or unanimous affirmative vote, the business and
affairs of the Company shall be managed by or under the direction of a Board of
one or more governors. Governors shall be natural persons. The members at each
regular meeting shall determine the number of governors to constitute the Board,
provided that thereafter the authorized
Page 3 of 10
number of governors may be increased by the members or the Board and decreased
by the members. Governors need not be members.
2.2 Term. Each governor shall serve for an indefinite term that expires at
the next regular meeting of the members. A governor shall hold office until a
successor is elected and has qualified or until the earlier death, resignation,
removal or disqualification of the governor.
2.3 Vacancies. Vacancies on the Board of Governors resulting from the
death, resignation, removal or disqualification of a governor may be filled by
the affirmative vote of a majority of the remaining governors, even though less
than a quorum. Vacancies on the Board resulting from newly-created governorships
may be filled by the affirmative vote of a majority of the governors serving at
the time such governorships are created. Each person elected to fill a vacancy
shall hold office until a qualified successor is elected by the members at the
next regular meeting or at any special meeting duly called for that purpose.
2.4 Place of Meetings. Each meeting of the Board of Governors shall be held
at the principal executive office of the Company or at such other place as may
be designated from time to time by a majority of the governors or by the
President. A meeting may be held by conference among the governors using any
means of communication through which the governors may simultaneously hear each
other during the conference.
2.5 Regular Meetings. Regular meetings of the Board of Governors for the
election of managers and the transaction of any other business shall be held
without notice at the place of and immediately after each regular meeting of the
members.
2.6 Special Meetings. A special meeting of the Board of Governors may be
called for any purpose or purposes at any time by any governor by giving not
less than ten (10) days notice to all governors of the date, time and place of
the meeting. The notice need not state the purpose of the meeting.
2.7 Waiver of Notice; Previously Scheduled Meetings.
Subdivision 1. A governor of the Company may waive notice of the date,
time, and place of a meeting of the Board. A waiver of notice by a governor
entitled to notice is effective whether given before, at, or after the meeting,
and whether given in writing, orally or by attendance. Attendance by a governor
at a meeting is a waiver of notice of that meeting, unless the governor objects
at the beginning of the meeting to the transaction
Page 4 of 10
of business because the meeting is not lawfully called or convened and
thereafter does not participate in the meeting.
Subdivision 2. If the day or date, time, and place of a Board meeting
have been provided herein or announced at a previous meeting of the Board, no
notice is required. Notice of an adjourned meeting need not be given other than
by announcement at the meeting at which adjournment is taken of the date, time
and place at which the meeting will be reconvened.
2.8 Quorum. A majority of the governors currently holding office shall be
necessary to constitute a quorum for the transaction of business. In the absence
of a quorum, a majority of the governors present may adjourn a meeting from time
to time without further notice until a quorum is present. If a quorum is present
when a duly called or held meeting is convened, the governors present may
continue to transact business until adjournment, even though the withdrawal of a
number of the governors originally present leaves less than the proportion or
number otherwise required for a quorum.
2.9 Acts of Board. Except as otherwise required by law or specified in the
Articles of Organization of the Company or a member control agreement, the Board
shall take action by the affirmative vote of a majority of the governors present
at a duly held meeting.
2.10 Participation by Electronic Communications. A governor may participate
in a Board meeting by any means of communication through which the governor,
other governors so participating and all governors physically present at the
meeting may simultaneously hear each other during the meeting. A governor so
participating shall be deemed present in person at the meeting.
2.11 Absent Governors. A governor of the Company may give advance written
consent or opposition to a proposal to be acted on at a Board meeting. If the
governor is not present at the meeting, consent or opposition to a proposal does
not constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor of or against the
proposal and shall be entered in the minutes or other record of action at the
meeting, if the proposal acted on at the meeting is substantially the same or
has substantially the same effect as the proposal to which the governor has
consented or objected.
2.12 Action Without a Meeting. An action required or permitted to be taken
at a Board meeting may be taken without a meeting by written action signed by
all of the governors. Any
Page 5 of 10
action, other than an action requiring member approval, if the Articles of
Organization or a member control agreement so provide, may be taken by written
action signed by the number of governors that would be required to take the same
action at a meeting of the Board at which all governors were present. The
written action is effective when signed by the required number of governors,
unless a different effective time is provided in the written action. When
written action is permitted to be taken by less than all governors, all
governors shall be notified immediately of its text and effective date.
2.13 Compensation. The Board may fix the compensation, if any, of
governors.
MANAGERS
3.1 Number and Designation. The Company shall have one or more natural
persons exercising the functions of the position of President and
Secretary/Treasurer. The Board of Governors may elect or appoint such other
managers or agents as it deems necessary for the operation and management of the
Company, with such powers, rights, duties and responsibilities as may be
determined by the Board, each of whom shall have the powers, rights, duties and
responsibilities set forth in this Operating Agreement unless otherwise
determined by the Board. Any of the positions or functions of those positions
may be held by the same person.
3.2 President. Unless provided otherwise by a resolution adopted by the
Board of Governors or in a member control agreement, the President (a) shall
have general active management of the business of the Company; (b) shall, when
present, preside at all meetings of the members of the Board; (c) shall see that
all orders and resolutions of the Board are carried into effect; (d) may
maintain records of and certify proceedings of the Board and members; and (e)
shall perform such other duties as may from time to time be prescribed by the
Board.
3.3 Treasurer. Unless provided otherwise by a resolution adopted by the
Board of Governors or in a member control agreement, the Treasurer (a) shall
keep accurate financial records for the Company; (b) shall deposit all monies,
drafts and checks in the name of and to the credit of the Company in such banks
and depositories as the Board shall designate from time to time; (c) shall
endorse for deposit all notes, checks and drafts received by the Company as
ordered by the Board, making proper vouchers therefor (d) shall disburse Company
funds and issue checks and drafts in the name of the Company, as ordered by the
Board; (e)
Page 6 of 10
shall render to the President and the Board, whenever requested, an account of
all of such manager's transactions as Treasurer and of the financial condition
of the Company; and (f) shall perform such other duties as may be prescribed by
the Board or the President from time to time.
3.4 Vice Presidents. Any one or more Vice Presidents, if any, may be
designated by the Board of Governors as Vice President. During the absence or
disability of the President, it shall be the duty of the Vice President to
perform the duties of the President.
3.5 Secretary. The Secretary, unless otherwise determined by the Board of
Governors, shall attend all meetings of the members and all meetings of the
Board, shall record or cause to be recorded, all proceedings thereof in a book
to be kept for that purpose, and may certify such proceedings. Except as
otherwise required or permitted by law or this Operating Agreement, the
Secretary shall give or cause to be given notice of all meetings of the members
and all meetings of the Board.
3.6 Authority and Duties. In addition to the foregoing authority and
duties, all managers of the Company shall respectively have such authority and
perform such duties in the management of the business of the Company as may be
designated from time to time by the Board of Governors. Unless prohibited by a
resolution approved by the affirmative vote of a majority of the governors
present, a manager elected or appointed by the Board may, without the approval
of the Board, delegate some or all of the duties and powers of a position to
other persons.
3.7 Term.
Subdivision 1. All managers of the Company shall hold office until
their respective successors are chosen and have qualified or until their earlier
death, resignation or removal.
Subdivision 2. A manager may resign at any time by giving written
notice to the Company. The resignation is effective without acceptance when the
notice is given to the Company, unless a later effective date is specified in
the notice.
Subdivision 3. A manager may be removed at any time, with or without
cause, by a resolution approved by the affirmative vote of a majority of the
governors present at a duly held Board meeting, subject to the provisions of any
member control agreement.
Subdivision 4. A vacancy in a position because of death, resignation,
removal, disqualification or other cause may, or in
Page 7 of 10
the case of a vacancy in the position of President or Treasurer shall be billed
for the unexpired portion of the term by the Board.
3.8 Salaries. The salaries of all managers of the Company shall be fixed by
the Board of Governors or by the President if authorized by the Board.
INDEMNIFICATION
4.1 Indemnification. The Company shall indemnify its managers and governors
for such expenses and liabilities, in such manner, unless such circumstances,
and to such extent, as require or permitted by North Dakota Statute, Section
10-32-99, as amended from time to time, or as required or permitted by other
provisions of law.
4.2 Insurance. The Company may purchase and maintain insurance on behalf of
any person in such person's official capacity against any liability asserted
against and incurred by such person in or arising from that capacity, whether or
not the Company would otherwise be required to indemnify the person against the
liability.
MEMBERSHIP INTERESTS
5.1 Statement of Membership Interest. At the request of any member, the
Company shall state in writing, the particular membership interest owned by that
member as of the moment the Company makes the statement. The statement must
describe the member's rights to vote, to share in profits and losses, and to
share in distributions, as well as any assignment or the member's rights then in
effect.
5.2 Declaration of Distributions. The Board of Governors shall have the
authority to declare distributions upon the membership interests of the Company
to the extent permitted by law.
5.3 Transfer of Membership Interests. Membership interests in the Company
may be transferred only to the extent permitted by law and subject to any member
control agreement.
MISCELLANEOUS
6.1 Execution of Instruments.
Subdivision 1. All deeds, mortgages, bonds, checks, contracts and
other instruments pertaining to the business and affairs of the Company shall be
signed on behalf of the Company by
Page 8 of 10
the President or the Secretary/Treasurer as may be designated from time to time
by the Board of Governors.
Subdivision 2. If a document must be executed by persons holding
different positions or functions and one person holds such positions or
exercises such functions, that person may execute the document in more than one
capacity if the document indicates each such capacity.
6.2 Advances. The Company may, without a vote of the governors, advance
money to its governors, managers or employees to cover expenses that can
reasonably be anticipated to be incurred by them in the performance of their
duties and for which they would be entitled to reimbursement in the absence of
an advance.
6.3 Company Seal. The Company will be a no seal company.
6.4 Fiscal Year. The fiscal year of the Company shall be determined by the
Board of Governors.
6.5 Construction. This Operating Agreement is subject to the terms of any
member control agreement from time to time in effect and to the extent
inconsistent, the member control agreement shall be controlling.
6.6 Amendments. The Board of Governors shall have the power to adopt, amend
or repeal the Operating Agreement of the Company, subject to the power of the
members to change or repeal the same, provided, however, that the Board shall
not adopt, amend or repeal any Section fixing a quorum for meetings of members,
prescribing procedures for removing governors or filling vacancies in the Board,
or fixing the number of governors or their classifications, qualifications, or
terms of office, but may adopt or amend a Section that increases the number of
governors.
IN WITNESS WHEREOF, the undersigned has executed this Agreement on the 10th
day of September, 2003.
/s/ William N. DuToit
----------------------------------------
/s/ Duane Zent
----------------------------------------
/s/ Mark Erickson
----------------------------------------
Page 9 of 10
/s/ Fred Braun
----------------------------------------
/s/ Fred J. Berger
----------------------------------------
/s/ Mike Appert
----------------------------------------
/s/ Troy Jangula
----------------------------------------
/s/ Ambrose R. Hoff
----------------------------------------
/s/ William A. Price
----------------------------------------
/s/ Jody Hoff
----------------------------------------
Page 10 of 10