ARTICLE I

Membership

ARTICLE II

Rights and Liabilities of Members

ARTICLE III

Meeting of Members

ARTICLE IV

Board Members

ARTICLE V

Meeting of Board

ARTICLE VI

Officers

ARTICLE VII

Non-Profit Operation

ARTICLE VIII

Disposition of Property

ARTICLE IX

Seal

ARTICLE X

Financial Transactions

ARTICLE XI

Miscellaneous

ARTICLE XII

Amendments

Any person, firm, association, corporation or body politic or subdivision thereof will become a member of Bartholomew County Rural Electric Membership Corporation (hereinafter called the "Cooperative") upon receipt of electric service from the Cooperative, provided that the member has first:

a. Made a written application for membership therein;

b. Agreed to purchase from the Cooperative electric energy as hereinafter specified;

c. Agreed to comply with and be bound by the Articles of Incorporation and bylaws of the Cooperative and any rules and regulations adopted by the board; and

d. Paid the membership fee hereinafter specified. No membership in the Cooperative shall be transferable, except as provided in these bylaws.

e. Member to grant easements. Each member shall, upon request of the Cooperative, execute and deliver to the Cooperative grants of easements or right-of-way over, under and on such lands owned by the member, in accordance with such reasonable terms and conditions as the Cooperative shall require for the furnishing of electric service to the member for the construction, operation, maintenance or relocation of the Cooperative’s electric facilities.

Any two or more persons or entities may apply for a joint membership and, subject to their compliance with the requirements set forth in Section 1 of this article, may be accepted for such membership. The term "joint member" as used in these bylaws shall be deemed to include any two or more persons or entities 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 membership. The holders of a joint membership shall be treated as follows:

a. The presence at a meeting of any representative of the joint member shall be regarded as the presence of the joint member and shall constitute a waiver of notice of the meeting;

b. The vote of any representative of the joint member shall constitute one vote;

c. A waiver of notice signed by any representative of the joint member shall constitute a joint waiver;

d. Notice to any representative of the joint member shall constitute notice to the joint member;

e. Expulsion of any participant of the joint member shall terminate the joint membership;

f. Withdrawal of any participant of the joint member shall terminate the joint membership;

g. Only one representative of the joint member may be elected or appointed as an officer, member of the nominating committee or board member, provided that the qualifications are met for such office as stated in Article IV,

Sections 3 or 4.

a. Membership may be converted to a joint membership upon the written request of the holder thereof and the agreement by such holder and any other person or entity participating in the joint membership to comply with the Articles of Incorporation, bylaws and regulations adopted by the board.

b. The word "board" is used herein to refer to the board of directors.

c. Upon the death of any person or dissolution of any entity which is a party to the joint membership, such membership shall be held solely by the survivor(s). The estate of the deceased member or dissolved participant shall not be released from any debts due the cooperative.

The membership fee unless otherwise stated or specified in current board policies shall be fifty dollars ($50.00), upon the payment of which a member shall be eligible for one or more service connections.

Each member shall, as soon as electric energy shall be available, purchase from the Cooperative all electric energy purchased for use on the premises specified in his application for membership, and shall pay on a monthly basis rates which shall from time to time be fixed by the board. It is expressly understood that amounts paid for electric energy in excess of the cost of service are furnished by members as capital and each member shall be credited with the capital so furnished as provided in these bylaws. Each member shall pay to the Cooperative such a minimum amount regardless of the amount of electric energy consumed, as shall be fixed by the board from time to time. Each member shall also pay all amounts owed to the Cooperative as and when the same shall become due and payable.

Payment for electricity shall include for each member a subscription to the "Electric Consumer" or its successor published by Indiana Statewide Association of Rural Electric Cooperatives, Inc.

a. Any member may withdraw from membership upon compliance with such uniform terms and conditions as the board may prescribe. The board may, by the affirmative vote of not less than two-thirds (2/3) of all the members of the board, expel any member who fails to comply with any of the provisions of the Articles of Incorporation, bylaws or rules and regulations adopted by the board, but only upon reasonable notice and hearing or if such member shall have been given written notice by the Cooperative that such failure shall have continued for at least ten (10) days after such notice was given. Any expelled member may be reinstated by vote of the board or by vote of the members at any annual or special meeting. The membership of a member who for a period of six (6) months after service is available to the member, has not purchased electric energy from the Cooperative, or of a member who has ceased to purchase energy from the Cooperative, may be canceled by resolution of the board.

b. Upon the withdrawal, death, cessation of existence or expulsion of a member, the membership of such member thereupon terminates. Termination of membership in any manner shall not release a member or his or her estate from any debts due the Cooperative.

c. In case of withdrawal or termination of membership in any manner, the Cooperative shall repay to the member the amount of the membership fee paid by member, provided, however, that the Cooperative shall deduct from the amount of the membership fee the amount of any debts or obligations owed by the member to the Cooperative.

Upon dissolution, after:

a. All debts and liabilities of the Cooperative shall have been paid; and

b. All capital furnished through patronage shall have been retired as provided in these bylaws, the remaining property and assets of the Cooperative shall be distributed among the members and former members in the proportion which the aggregate patronage of each bears to the total patronage of all members during the years next preceding the date of the filing of the certificate of dissolution, for such period, during the period of its existence.

The private property of the members shall be exempt from execution or other liability for the debts of the Cooperative and no member shall be liable or responsible for any debts or liabilities of the Cooperative.

The annual meeting of the members shall be held at such date affixed by the board from February 1 to September 1 each year at such place within a county served by the Cooperative, as selected by the board and which shall be designated in the notice of the meeting, for the purpose of electing board members, passing upon reports for the previous fiscal year and transacting such other business as may come before the meeting. It shall be the responsibility of the board to make adequate plans and preparations for the annual meeting. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Cooperative.

Special meetings of the members may be called by resolution of the board, or upon written request signed by any three (3) board members, by the president, or by a petition signed by not less than twenty percent (20%) of all the members, and it shall thereupon be the duty of the secretary to cause notice of such meeting to be given as hereinafter provided. Special meetings of the members may be held at any place within one of the counties served by the Cooperative as designated by the board and shall be specified in the notice of the special meeting.

Written or printed notice stating the place, day and hour of the meeting of members and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than ten (10) nor more than thirty (30) days before the date of the meeting, either personally or by mail, by or at the direction of the president or the secretary, or the officers or persons calling the meeting, to each member of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in a sealed envelope addressed to the member at the member’s address as it appears on the records of the Cooperative, with postage thereon prepaid. Notice of meetings of members may be waived in writing. The failure of any member to receive notice of an annual or special meeting of the members shall not invalidate any action which may be taken by the members of any such meeting.

Other than provided in Article VIII, (g), requiring a different quorum requirement of membership meeting to consider a buy out by a non REMC entity, one-fiftieth (1/50) of all the members of the Cooperative present in person at any meeting of members, of which meeting notice shall be given as provided in Section 3 of this article, shall constitute a quorum for the transaction of business at such meeting. The presence of a quorum shall be determined by the number of votes possible, and by the number present. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice.

Each member shall be entitled to only one vote (notwithstanding the number of membership fees paid) upon each matter submitted to a vote at a meeting of the members.

Persons or entities holding a joint membership shall jointly be entitled to one (1) vote upon each matter submitted. In the event of a dispute arising between the owners of a joint certificate, the Cooperative shall consider the person whose name appears first on said certificate as having preferred rights for voting purposes and in all other respects.

At all meetings of the members at which a quorum is present, all questions shall be decided by a vote of a majority of the members who are present in person or represented as set forth hereinabove, except as otherwise provided by the Articles of Incorporation or these bylaws and, specifically, Article VIII, (g).

This bylaw provision may not be amended except upon two-thirds (2/3) affirmative vote of the board of directors.

The order of business at the annual meeting of the members and, so far as possible, at all other meetings of the members, shall be essentially as follows, except as otherwise determined by the members at such meeting.

1. Report on the number of members present in person in order to determine the existence of a quorum.

2. Reading of the notice of the meeting and proof of the due publication or mailing thereof, or the waiver or waivers of notice of the meeting, as the case may be.

3. Approval of minutes of previous meetings of the members.

4. Presentation and consideration of reports of officers, trustees and committees.

5. Election of board members.

6. Unfinished business.

7. New business.

8. Adjournment.

The business and affairs of the Cooperative shall be managed by a board of seven (7) members which shall exercise all of the powers of the Cooperative except such as are by law, the Articles of Incorporation or these bylaws conferred upon or reserved to the members.

The members shall be elected by secret ballot by and from the members at the annual meeting to serve for terms of three (3) years or until their successors are elected, all subject to the provisions of these bylaws with respect to removal of directors. If an election of board members shall not be held on the day designated herein for the annual meeting, or at any adjournment thereof, a special meeting of the members shall be held for the purpose of electing board members within a reasonable time thereafter. Board members shall be elected by a plurality vote of the members.

No person shall be eligible to become or remain a board member of the Cooperative who:

a. Is not a member; or

b. Does not have their principal place of residence in the director’s district they represent; or

c. Is in any way employed by or financially interested to an extent greater than $1,000 in an enterprise or a business primarily engaged in selling electrical or plumbing appliances, fixtures or supplies to the Cooperative.

d. No person shall be eligible for nomination, election or appointment to the board of directors if he should be a member of the immediate family of a board member, a member of the immediate family of a nominating committee member, a full-time employee of the Cooperative, a member of the household of a board member, a member of the household of an employee or a holder of a joint membership with a director, nominating committee member or an employee. The term "immediate family" shall mean children, spouse, siblings, parents, foster parents, stepparents, grandparents, parents-in-law, sister- or brother-in-law, or son- or daughter-in-law.

When a membership is held jointly, one person representing a joint membership may be elected a director, provided, however, that the individual shall be eligible to become or remain a director to hold a position of trust in the Cooperative if the individual meets the qualifications hereinabove in this section set forth.

Upon establishment of the fact that a board member is holding the office in violation of any of the foregoing provisions, the board shall remove such board member from office.

Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the board.

Section 4. Nominations

There shall be a Nominating Committee consisting of seven (7) members with one (1) member from each District as described in Section 7 of Article IV of these bylaws. The Nominating Committee shall meet not less than thirty (30) days nor more than one hundred eighty (180) days before the date of a meeting of the members of the Cooperative at which directors are to be elected. Until the following transition process from appointed to elected members of the Nominating Committee is completed, the board shall appoint members to serve on the Nominating Committee for seats not yet elected by the members of the Cooperative. Beginning with the annual meeting of the members in 2004, the members shall elect members to serve on the Nominating Committee for a term of three (3) years. In order to stagger the terms on the Nominating Committee, at the annual meeting of the members in 2004, Nominating Committee members from Districts 2, 5 and 7 shall be elected; at the annual meeting of the members in 2005, Nominating Committee members from Districts 3 and 6 shall be elected; and at the annual meeting of the members in 2006, Nominating Committee members from Districts 1 and 4 shall be elected. At least thirty (30) days before such annual meetings, the Nominating Committee shall nominate two (2) candidates to serve on the Nominating Committee for each District for which an election is to be held. The members of the Cooperative shall then elect one (1) person from each District to serve on the Nominating Committee. Such Nominating Committee members shall serve for a three (3) year term or until their successors are elected.

Any member may bring charges against a board member and, by filing with the Secretary or, if the Secretary is the subject of such charges, then the President, such charges in writing together with a petition signed by at least twenty percent (20%) of the members may request the removal of such board member for acting in bad faith, or the commission of an act that is unlawful which substantially interferes with the performance of his or her official duties as a board member. The exercising of judgment shall not be grounds for removal. Such board member shall be informed in writing of the charges at least thirty (30) days prior to the meeting of the board at which the charges are to be considered and shall have an opportunity at the meeting to be heard in person or by counsel and to present evidence in respect to the charges; and the person or persons bringing the charges against him or her shall have the same opportunity. The question of the removal of such board member shall be considered and voted upon at the meeting of the board.

Within sixty (60) days following such action by the board, the charging parties of the challenged board member or a board member who has been removed may initiate an appeal of the decision of the board of directors to the membership at the next annual membership meeting or a special meeting if called as provided under Article III, Section 2. If an appeal is filed by the board member, the removed board member’s seat shall remain vacant until action by the membership at the next annual or special meeting of the members. Any vacancy created by such removal following the appeal or after the time for appeal has expired or any other vacancy occurring in the board including a vacancy by reason of death, resignation or disability shall be filled by the affirmative vote of a majority of the remaining board members for the unexpired portion of the term.

Board members shall not receive any salary for their services as such, except that members of the Cooperative may by resolution authorize a fixed sum for each day or portion thereof spent on Cooperative business, such as attendance at meetings, conferences and training programs or performing committee assignments when authorized by the board. If authorized by the board, board members may also be reimbursed for expenses actually and necessarily incurred in carrying out such Cooperative business or granted a reasonable per diem allowance by the board in lieu of detailed accounting for some of these expenses. No board member shall receive a compensation for serving the Cooperative in any other capacity, nor shall any close relative of a board member receive compensation for serving the Cooperative, unless the payment and amount of compensation shall be specifically authorized by a vote of the board members or the service by the board member or his or her close relative shall have been certified by the board as an emergency measure.

The territory served by the Cooperative shall be divided into seven (7) districts. Each district shall be represented by one (1) director. The seven (7) districts in which the principal residence of a director shall be, are as follows:

All of German Township.

That portion of Clifty Township north of State Road 46 E. All of Hawcreek Township. All of Flatrock Township and that area served within Clay Township of Decatur County, which is north of State Road 46 E.

That portion of Columbus Township as bounded by State Road 46 E and Road 100 S on the south, and extending north to 400 N and west to 500 W, and south to 200 N, east to 400 W and south to the north side of State Road 46 W. Also, including that portion of Harrison Township north of 100 S.

All of Rockcreek Township. That part of Clifty Township south of State Road 46 E. All the area served within Geneva Township of Jennings County. Area served within Jackson Township of Decatur County and that area of Clay Township, Decatur County, which is south of State Road 46 E.

All of Clay Township. All of Sandcreek Township. The southeast portion of Columbus Township bounded by White River on the west and State Road 46 E and 100 S on the north.

All of Wayne Township. The southwest portion of Columbus Township bounded by White River on the east and State Road 46 W on the north. All areas served within Hamilton Township of Jackson County east of the Jackson County Highway which is a continuation of Bartholomew County Road 400 W.

That portion of Harrison Township as bounded to the east by 400 W, and to the north by 100 S, and to the west by the Brown and Bartholomew county line. All of Ohio Township. All of Jackson Township and all areas served within Hamilton Township of Jackson County west of the Jackson County Highway which is a continuation of Bartholomew County road 400 W.

(All in Bartholomew County unless otherwise stated.)

The board of directors shall review the composition of the several districts and if it shall be found that inequities in representation have developed which can be corrected by a redelineation of districts, the board of directors shall reconstitute the districts so that each shall contain, as nearly as possible, the same number of members.

Election of directors shall be by printed or mimeographed ballot. The ballot shall list the candidates nominated by the committee or nominations by petition, if any, arranged by district. Each member of the Cooperative present in person or an organization by an authorized representative at the meeting shall be entitled to one (1) vote for one candidate from each district. The candidate from each district receiving the highest number of votes at such meeting shall be considered elected as director.

A regular meeting of the board shall be held without notice, immediately after the annual meeting of the members. A regular meeting of the board shall also be held monthly at such time and place within one of the counties served by the Cooperative as designated by the board. Such regular monthly meeting may be held without notice other than such resolution fixing the time and place thereof.

Special meetings of the board may be called by the president or by any three board members, and it shall thereupon be the duty of the secretary to cause notice of such meeting to be given as hereinafter provided. The president or board members calling the meeting shall fix the time and place for the holding of the meeting.

Written notice of the time, place and purpose of any special meeting of the board shall be delivered to each board member personally, by electronic message (email) with return receipt or by first class U. S. mail, by or at the direction of the secretary, or upon a default in duty by the secretary, by the president or the board member calling the meeting. If mailed by first class U. S. mail, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the board member at his or her address as it appears on the records of the Cooperative, with postage thereon prepaid. If delivered by electronic message (email), such notice shall be deemed to be delivered when transmitted to the internet at the directors email address on file with the Cooperative. Such notice shall be provided not less than 2 days before the special meeting.

Other than Article VIII, (a) and (d), dealing with the sale of all or substantially all of the assets of the Cooperative which requires a quorum of the board of two-thirds (2/3), a majority of the board shall constitute a quorum, provided that if less than such majority of the board is present at said meeting, a majority of those present at said meeting may adjourn the meeting from time to time; and provided further that the secretary shall notify any absent board members of the time and place of such adjourned meeting. The act of a majority of the board members present at a meeting at which a quorum is present shall be the act of the board, except as otherwise provided in these bylaws, and specifically, as provided in Article VIII, (a) and (d), dealing with the sale of all or substantially all of the assets of the Cooperative.

The board of directors may permit a director to participate in a regular or special meeting of the board by, or conduct the meeting through, the use of any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating by this means shall be considered to be present in person at the meeting.

The officers of the Cooperative shall be a president, vice president, secretary, treasurer and such other officers as may be determined by the board from time to time. The offices of secretary and treasurer may be held by the same person.

The officers shall be elected by ballot, annually by and from the board 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 possible. Each officer shall hold office until the first meeting of the board following the next succeeding annual meeting of the members or until his or her 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.

Any officer or agent elected or appointed by the board of directors may be removed by the board whenever in its judgment the best interests of the Cooperative will be served thereby.

The president shall:

a. Be the principal executive officer of the Cooperative and, unless otherwise determined by the members or the board, shall preside at all meetings of the members and the board;

b. May sign, with the secretary 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 or by these bylaws to some other officer or agent of the Cooperative, or shall be required by law to be otherwise signed or executed; and

c. In general perform all duties incident to the office of the president, and such other duties as may be prescribed by the board from time to time.

In the absence of the president, or in the event of the officer's inability or refusal to act, the vice president shall perform the duties of the president, and when so acting, shall have all the power of and be subject to all the restrictions upon the president. The vice president shall also perform such other duties as from time to time may be assigned to him by the board.

The secretary shall be responsible for:

a. Keeping the minutes of the meetings of the members and of the board in books provided for that purpose;

b. Seeing that all notices are duly given in accordance with these bylaws or as required by law;

c. The safekeeping of the corporate books and records and the seal of the corporation and affixing the seal of the corporation to all certificates of membership prior to the issue thereof, and to all documents the execution of which on behalf of the Cooperative under its seal is duly authorized in accordance with the provisions of these bylaws;

d. Keeping a register of the names and post office addresses of all members;

e. Keeping on file at all times a complete copy of the Articles of Incorporation and bylaws of the Cooperative containing all amendments thereto (which copy shall always be open to the inspection of any member) and at the expense of the Cooperative, furnishing a copy of the bylaws and of all amendments thereto to any member upon request; and

f. In general performing all duties incident to the office of secretary and such other duties as from time to time may be assigned to him or her by the board.

The treasurer shall be responsible for:

a. Custody of all funds and securities of the Cooperative;

b. The receipt of and the issuance of receipts for all monies due and payable to the Cooperative and for the deposit of all such monies in the name of the Cooperative in such bank or banks as shall be selected in accordance with the provisions of these bylaws; and

c. The general performance of all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to the officer by the board.

The board may appoint a manager who may be, but who shall not be required to be, a member of the Cooperative. The manager shall perform such duties and shall exercise such authority as the board may from time to time vest in him or her.

The treasurer and any other officer or agent of the Cooperative charged with responsibility for the custody of any of its funds or property shall be bonded or covered by fiduciary insurance in such sum and with such surety as the board shall determine. The board in its discretion may also require any other officer, agent or employee of the Cooperative to be bonded or covered by fiduciary insurance in such amount and with such surety as it shall determine. For the purposes of this section, the word "bonded" or the term "fiduciary insurance" shall include Crime Coverage as described in the Cooperative’s All-Risk Blanket Policy.

The powers, duties and compensation of officers, agents and manager shall be fixed by the board subject to the provisions of these bylaws with respect to compensation for a board member and close relatives of a board member.

The officers of the Cooperative shall submit at each annual meeting of the members reports covering the business of the Cooperative for the previous fiscal year. Such reports shall set forth the condition of the Cooperative at the close of such fiscal year.

The Cooperative shall at all times be operated on a cooperative, non-profit basis for the mutual benefit of its patrons. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its patrons.

In the furnishing of electric energy, the Cooperative’s operations shall be so conducted that all patrons will, through their patronage, furnish capital for the Cooperative. In order to induce patronage and to assure that the Cooperative will operate on a non-profit basis, the Cooperative is obligated to account on a patronage basis to all its patrons for all amounts received and receivable for the furnishing of electric energy in excess of operating costs and expenses properly chargeable against the furnishing of electric energy. All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by the patron as capital.

The Cooperative is obligated to pay by credits to a capital account for each patron all such amounts in excess of operating costs and expenses. The books and records of the Cooperative shall be set up and kept in such manner that at the end of each calendar year the amount of capital, if any, so furnished by each patron is clearly reflected on an equitable basis that reflects the contribution by each patron to net operating revenues or net operating margins, and credited in an appropriate record to the capital account of each patron and the Cooperative shall, within a reasonable time after the close of the calendar year, notify each patron of the amount of capital so credited to his or her account. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts of capital.

All other amounts received by the Cooperative from its operation in excess of costs and expenses shall be, (a) used to offset any losses incurred during the current or any prior calendar year, and (b) to the extent not needed for that purpose, allocated to its patrons on an equitable basis that reflects the contribution by each patron in a negligible manner to net operating margins, and any amount so allocated shall be included as part of the capital credited to the accounts of patrons as herein provided.

In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, outstanding capital credits shall be retired without priority on a pro rata basis before any payments are made on account of property rights of members. If at any time prior to dissolution or liquidation the board shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital credited to patron’s accounts may be retired in full or in part. Any such retirements of capital shall be made in order or priority according to the year in which the capital was furnished and credited, the capital first received by the Cooperative being first retired.

Capital credited to the account of each patron shall be assignable only on the books of the Cooperative pursuant to written instruction from the assignor and only to successors in interest or successors in occupancy in all or a part of such patron’s premises served by the Cooperative unless the board, acting under policies of general application, shall determine otherwise.

Notwithstanding any other provision of these bylaws, the board at its discretion shall have the power at all times upon the death of any natural person, if the legal representatives of his estate shall request in writing, that the capital credited to any such natural person be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such natural person immediately upon such terms and conditions as the board, acting under policies of general application, and the legal representatives of such natural person’s estate shall agree upon; provided however that the financial condition of the Cooperative will not be impaired thereby.

The patron of the Cooperative, by dealing with the Cooperative, acknowledges that the terms and provisions of the Articles of Incorporation and bylaws shall constitute and be a contract between the Cooperative and each patron, and both the Cooperative and the patrons are bounded by such contract, as fully as though each patron had individually signed a separate instrument containing such terms and provisions. The provisions of this article of the bylaws shall be called to the attention of each patron of the Cooperative by the best means determined by the board from time to time.

Capital credits received from Hoosier Energy REC, Inc., the power supplier for the Bartholomew County REMC, shall be maintained as a separate capital credit account of the patron of the Bartholomew County REMC and shall be associated to the accounts of the patrons of the Bartholomew County REMC in the year in which Bartholomew County REMC receives official written notice that Hoosier Energy REC, Inc., has allocated capital credits to the Bartholomew County REMC. The separate capital credits received from Hoosier Energy REC, Inc., that are credited to the special accounts of the patrons of the Bartholomew County REMC shall not be retired or distributed to the patrons until such time capital credit has been actually distributed by Hoosier Energy REC, Inc., to Bartholomew County REMC and until such time as the board of directors of the Bartholomew County REMC, by appropriate resolution duly adopted and passed, authorize the distribution of these special capital credits to the accounts of the patrons. No notice of the allocation of these special capital credits shall be required to be given to the patron, but it may be given and, even if given the patron’s special capital credits account shall be available for the patron’s inspection.

Notwithstanding any provisions herein contained to the contrary and pursuant to the statutes of the State of Indiana (I.C.8-1-13-11) the Cooperative shall recover after a period of two (2) years any unclaimed stocks, dividends, capital credits, patronage refunds, utility deposits, membership fees, account balances or book equity for which the owner (member or former member) cannot be found and are the result of distributable savings of the Cooperative, giving sixty (60) days’ notice in a newspaper or newsletter printed in the English language and circulated in the county in which the Cooperative locates its general headquarters. Such notice shall state the owner’s name and approximate amount of owner’s interest, and that if not duly claimed within sixty (60) days of said notice, the same shall be turned over to the Cooperative, which shall reallocate the same to other members.

If not provable claim shall have been filed by such member within sixty (60) days after the one-time publication of said notice, the Cooperative may credit against said account any amounts due and owing the Cooperative by said member and thereafter allocate to the other members of the Cooperative on a pro rata basis. Such amounts of said members (the allocation herein contemplated) shall be allocated to those who are members as of the year and on a pro rata basis for the year in which the sixtieth (60th) day falls after the published notice.

Any member or former member who fails to claim any cash retirement or capital credit or other payment within two (2) years after payment has been made available to such person, such failure will constitute an irrevocable assignment and gift to the Cooperative of such capital credits or other payments.

Nothing contained in this section shall be construed to prohibit the Cooperative from crediting any of the above described funds against a member or former member’s debt to the Cooperative prior to any payment to such member or any allocation in favor of other members.

ARTICLE VIII

Except in the case of a merger or consolidation with an entity organized and operating under the Indiana REMC Act, and except by way of a mortgage or pledge approved by a majority of the directors, the Cooperative may not sell, lease, exchange or otherwise dispose of, all or substantially all of the property of the Cooperative unless each of the following conditions is met:

a. Two-thirds (2/3) of all directors affirmatively authorized the submission of the proposed transfer to the membership;

b. Any hostile or unsolicited tender offer for the transfer of more than twenty percent (20%) of the assets may NOT be considered if it does not include all or substantially all of the system;

c. Notwithstanding any article, bylaw, resolution or practice that has ever been utilized by this Cooperative to the contrary, proxy votes, write-in votes, and absentee ballots may not be utilized to establish a quorum for either the board of directors or the membership, for consideration or for counting in any voting of the board of directors or the membership in any consideration of a transfer of all or substantially all of its property;

d. No hostile or unsolicited tender offer for the transfer of all or substantially all of the assets of the Cooperative may be presented for approval to the membership unless a 180 day period following the affirmative two-thirds (2/3) approval of the board of directors has expired;

e. The term "board of directors" in this Article means those directors who are incumbent board of directors at the time the offer is tendered;

f. An offer for the purchase of all or substantially all the assets of the Cooperative must include an assumption of all contractual obligations of the Cooperative, specifically including the total power requirements contract the cooperative has with Hoosier Energy REC, Inc.;

g. The transfer of all or substantially all of the assets of the Cooperative shall be authorized by a resolution duly adopted at a meeting of its members duly called and held where a quorum was established of fifty percent (50%) of the members in person and where the resolution approving the transfer shall have received the affirmative vote of at least fifty percent (50%) of all the members; and

h. The same shall be approved by the Indiana Utility Regulatory Commission.

i. The board of directors of the Cooperative shall have full power and authority, without authorization by the members, to authorize the execution and delivery of a mortgage, or mortgages, or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the Cooperative, whether acquired or to be acquired and wherever situated, as well as the revenues therefrom, for the purpose of financing the construction or maintenance of the Cooperative’s distribution system and for general plant as defined in the uniform system of accounts prescribed by a regulatory body having jurisdiction, or if none, by its primary secured lender, all upon such terms and conditions as the board of directors shall determine, to secure any indebtedness of the Cooperative to the United States of America or any agency or instrumentality thereof or to any financial institution.

j. This Article may not be amended except upon two thirds (2/3) affirmative vote of the board of directors.

The corporate seal of the Cooperative shall have inscribed thereon the name of the corporation and the words "Corporate Seal, State of Indiana."

Except as otherwise provided in these bylaws, the board may authorize any officer or officers, agent or agents to enter into any contract or execute and deliver any instrument in the name and on behalf of the Cooperative, and such authority may be general or confined to specific instances.

Also checks, drafts and other orders for the payment of money, and all notes, bonds or other evidences of indebtedness issued in the name of the Cooperative shall be signed and/or countersigned by such officer or officers, agent or agents, employee or employees of the Cooperative and in such manner as shall from time to time be determined by resolution of the board.

All funds except petty cash of the Cooperative shall be deposited from time to time to the credit of the Cooperative in such bank or banks as the board may select.

The fiscal year of the Cooperative shall begin on the first day of January of each year and shall end on the thirty-first day of December of the same year.

The Cooperative shall not become a member of or purchase stock in any other organization without an affirmative vote of the board members at a duly held meeting, the notice of which shall specify that action is to be taken upon such proposed membership or stock purchase.

Any member or board member may waive in writing any notice of meeting required to be given by the bylaws. The attendance of a member or board member at any meeting shall constitute a waiver of notice of such meeting by such member or board member, except in case a member or board member shall attend a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting has not been lawfully called or convened.

The board shall have power to make and adopt such policies, rules and regulations, not inconsistent with law, the Articles of Incorporation or these bylaws, as it may deem advisable for the management of the business and affairs of the Cooperative.

The board shall cause to be established and maintained a complete accounting system which, among other things and subject to applicable laws and rules and regulations of the regulatory body, shall conform to such accounting system as may from time to time be designated by the administrator of the Rural Utilities Services of the United States of America. The board shall also, annually, cause to be made by a certified public accountant a full and complete audit of the accounts, books and financial condition of the Cooperative. A report of such audit shall be submitted to the members at the next following annual meeting.

The board shall make diligent effort to see that electric service is extended to all unserved persons within the Cooperative’s service area who (a) desire such service and (b) meet all reasonable requirements established by the Cooperative as a condition of such service.

The Cooperative shall indemnify and hold harmless any person made, or threatened to be made, a party to any action, suit or proceeding by reason of the fact that he/she is or was a director, officer, or employee of the Cooperative, or of any other corporation, partnership, or enterprise for which he/she served as such at the request of the Cooperative, against all expenses actually and reasonably incurred by him/her in connection with the defense of such action, suit or proceeding, or in connection with any appeal thereof, except in relation to matters as to which it shall finally be adjudged that such person is liable for negligence or misconduct in the performance of his/her duties to the Cooperative.

The terms "liability" and "expense" as used herein shall include, but shall not be limited to, attorney fees, costs, disbursements, amounts of judgments, penalties, and amounts paid in settlement by or on behalf of a director, officer, employee or agent.

If there is a final adjudication in the action, suit or proceeding as to any misconduct of the director, officer or employee, then such adjudication shall be binding for purposes of this section. Any such person who has been successful on the merits or otherwise, with respect to any claim, suit, or proceeding as described herein, shall be entitled to indemnification as a matter of right. If, however, the matter should be settled prior to any final adjudication of such issue, then the question of whether there was negligence or misconduct shall be determined by a majority vote of at least a quorum of the directors who are unaffected by self-interest in connection with the matter in issue. If a quorum of directors unaffected by self-interest does not exist, indemnification may be made upon receipt of a written opinion from legal counsel that the person is entitled to indemnification as set forth herein.

In determining whether negligence or misconduct has occurred, the issue shall be whether such person exercised the same degree of judgment as a reasonable person would have exercised under the circumstances in the conduct of that person’s own affairs and whether that person acted in good faith in what they reasonably believed to be in the best interests of the Cooperative. Consideration may be given to whether the person took or omitted to take action in reliance of advice of legal counsel for the Cooperative or upon statements made for information furnished by employees or agents of the Cooperative which that person had reasonable grounds to believe.

If several claims, issues, or matters of action are involved, any such person may be entitled to indemnification, as to some matters even though that person is not entitled as to other matters.

The Cooperative may advance expenses to or, where appropriate, may at its expense undertake the defense of any such person upon receipt of an undertaking for repayment by or on behalf of the person if it should ultimately be determined that that person is not entitled to indemnification hereunder.

The provisions of this section shall be applicable to claims, actions, suits, or proceedings made or commenced after the adoption hereof, whether arising from acts of omissions to acts during, before, or after the date of adoption.

The rights of indemnification provided hereunder shall be in addition to any rights to which any person concerned may otherwise be entitled by contract or as a matter of law and shall insure to the benefit of the heirs or personal representative of such person.

The Cooperative may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Cooperative, or is or was serving at the request of the Cooperative as a director, officer, employee, or agent of another corporation, partnership or enterprise, against any liability asserted against a person and incurred by a person in any such capacity or arising out of a person’s status as such, whether or not the cooperative would have the power to indemnify a person against liability under the provisions of this section or otherwise.

Unless otherwise provided within these bylaws, these bylaws may be altered, amended or repealed by a majority vote of the board of directors at any regular or special meeting, provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal.