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Bylaws of Southwestern Electric Cooperative, Inc.
Greenville, Illinois
Amended September 11, 2004

SECTION 1: PREAMBLE, CONSTRUCTION AND DEFINITIONS:

A. Preamble: The corporate purpose and goal of Southwestern Electric

Cooperative, Inc., is, in accordance with and through the exercise of

authority granted by the laws of the State of Illinois, the Cooperative’s

Articles of Incorporation and these Bylaws, to provide energy and other

services to its Members at the lowest cost consistent with sound economy

and prudent management, and to operate on a cooperative, non-profit

basis for the benefit of its members. The Cooperative shall not be

operated for pecuniary profit either to itself or to its Members.

B. Rules of Construction:

1. Capitalized terms used in this Agreement shall have the meanings

specified in Section 1(C).

2. The singular shall include the plural and the masculine shall include

the feminine and neuter.

3. The term “day” shall mean calendar day, the term “month” shall mean

a calendar month, and the term “year” shall mean a calendar year,

unless specifically stated otherwise.

4. Any reference to a Member shall be deemed to exclude Associate

Members.

5. All accounting terms not specifically defined herein shall be construed

in accordance with generally accepted accounting principles in the

United States of America, consistently applied.

C. Definitions:

1. “Person” shall mean any natural person, firm, association,

corporation, trust, partnership, limited liability company, federal or

state agency, municipal corporation, political subdivision, body politic

or other similar entity.

2. “Natural Person” shall mean a human being.

3. “Board of Directors” shall mean a body of nine Natural Persons duly

qualified and elected by the Members to manage the business and

affairs of the Cooperative as provided for in Section 5 .

4. “Director” shall mean a Natural Person duly qualified and elected by

the Members to the Board of Directors.

5. “Member” shall mean any Person who has complied with the

provisions of Section 2A.

6. “Membership” shall mean the legal state of being a Member in the

Cooperative.

7. “Joint Membership” shall mean a Membership in the Cooperative held

by two or more Natural Persons, jointly and severally, in joint tenancy

together with the right of survivorship as recognized by the laws of the

State of Illinois.

8. “Individual Membership” shall mean any Membership in the

Cooperative held by a Person other than a Joint Membership.

9. “Cooperative” shall mean Southwestern Electric Cooperative, Inc.

10. “Bylaws” shall mean the Bylaws of the Cooperative as duly adopted

and amended, from time to time, by the Members.

11. “Articles of Incorporation” shall mean the Articles of Incorporation of

the Cooperative duly adopted and amended from time to time, by the

Members, and duly placed on file with the Illinois Secretary of State’s

Office.

12. “Close Relative” shall mean a Natural Person who, by blood

including step and adoptive kin, is either a spouse, child,

parent, grandparent, brother or sister of a

Director, Officer, or employee of the Cooperative.

13. “Act” shall mean the Act, as amended from time to time.

SECTION 2: MEMBERSHIP

A. Qualifications: The Cooperative shall offer Membership in the

Cooperative pursuant to the laws of the State of Illinois, the Articles of

Incorporation, and the Bylaws.

1. Membership: A Person shall be a Member of the Cooperative and

shall be entitled to the rights and benefits of Membership in the

Cooperative if such Person:

a. shall have made written application for Membership in the

Cooperative in such form as the Board of Directors shall, from

time to time, prescribe;

b. shall have agreed to purchase energy or other services from the

Cooperative as sold or offered for sale by the Cooperative on a

cooperative basis;

c. shall have agreed to comply with and be bound by the Bylaws

and the Articles of Incorporation and any and all rules,

regulations, rates, and policies duly adopted by the Board of

Directors;

d. shall have paid any and all fees, deposits and contributions

required by the Cooperative pursuant to the Bylaws; and,

e. such Person’s application for Membership in the Cooperative

shall have been accepted by the Board of Directors.

2. Classes of Members: Members shall be divided into two classes:

a. “Members”: A “Member” is a Person who has been accepted

by the Board of Directors for Membership in the Cooperative.

Such Members shall receive energy and other services from the

Cooperative, shall be entitled to vote at any meeting of the

Members of the Cooperative, shall have capital credits allocated

to his Membership, and, if such Member is a Natural Person, shall

be entitled to be elected a Director of the Cooperative, subject to

compliance with the qualifications stated in Section 5.

b. “Associate Members”: An “Associate Member” is a Person

who has applied for an Associate Membership in the Cooperative

and has been accepted by the Board of Directors as such

Associate Member of the Cooperative. Associate Members

shall not be entitled to purchase and/or receive energy or other services from the Cooperative, shall not be entitled to vote at any

meeting of the Members of the Cooperative, shall not be entitled

to be elected as a Director of the Cooperative and shall not be

entitled to have capital credits allocated to his Membership.

3. Fees, Deposits and Contributions: Membership fees, security

deposits, service charges, connection fees, or contributions in aid to

construction for Members shall be determined from time to time by

the Board of Directors, and the same shall be paid by the Member as

a condition precedent to Membership in the Cooperative.

4. Acceptance by Board of Directors: Upon complying with the

requirements of the Bylaws, all applications for Membership in the

Cooperative shall be accepted by the Board of Directors, and such

Person filing such application shall be granted Membership in the

Cooperative consistent with the Bylaws, and the rules, regulations,

rates, and policies of the Cooperative; provided, however, that if the

Board of Directors determine that such Person is not willing or able to

satisfy and abide by the Cooperative’s terms and conditions of

Membership as stated in the Bylaws or in the rules, regulations, rates,

and policies of the Cooperative, or that such Person should otherwise

be rejected for other good cause, then the Board of Directors may

elect to reject such Person’s application and deny Membership in the

Cooperative to such Person. If any Person whose application has

been submitted to the Board of Directors but not approved within a

period of sixty (60) days after filing such application with the

Board of Directors, then such Person may file a written request with

the Board of Directors not later than thirty (30) days before the next

meeting of the Members of the Cooperative requesting that his

application be submitted to and approved or disapproved by the

majority vote of the Members at such meeting. The requesting Person

shall be entitled to be present and heard at such meeting of the

Members.

B. Joint Membership: All applications for Membership filed by two or more

Natural Persons shall be deemed applications for Joint Membership, or if

one of them is already a Member, then such Member may request the

conversion of such Membership into a Joint Membership. All provisions

relating to the rights, powers, terms, conditions, obligations,

responsibilities and liabilities of Membership shall apply equally, severally

and jointly to such Natural Persons holding a Joint Membership, without

limiting the generality of the foregoing:

1. the presence at a meeting of the Members of either or both such

Natural Persons shall constitute the presence of one Member or a

joint waiver of notice of such meeting, as the case may be; and,

2. notice to or waiver of notice signed by either or both such Natural

Persons shall constitute suspension or termination of the Joint

Membership; and

3. suspension or termination in any manner of either or both such

Natural Persons shall constitute suspension or termination of the

Joint Membership, and

4. either, but not both concurrently, shall be eligible to serve as a

Director of the Cooperative, but only if both meet the qualifications

required therefore; and,

5. neither will be permitted to have additional service connections

except through their one Joint Membership; and,

6. upon the death of either Natural Person who is a party to a Joint

Membership, all right, title, interest and power in and to such Joint

Membership shall vest in and to the surviving Natural Person

(surviving Joint Member); provided, however, that the estate of the

decedent shall not be released from any debts due the Cooperative

by the decedent.

C. Member Obligations: In consideration of Membership in the Cooperative,

any and all Members shall:

1. Purchase of Energy or Services: Purchase from the Cooperative

energy or other services sold or offered for sale by the Cooperative

on a non-profit, cooperative basis for use by the Member on the

Member’s premises identified on the Member’s application for

Membership, unless and except to the extent that the Board of

Directors may in writing waive such requirement, and such Member

shall pay therefore at the times, and in accordance with the rules,

regulations, and rate schedules (including any monthly minimum

amount that may be charged without regard to the amount of electric

power and energy actually used) established, from time to time, by the Board of Directors and, if in effect, in accordance with the

provisions of any supplemental contract that may have been entered

into as provided for in the Bylaws. Production or use of energy or

services on such premises, regardless of the source thereof, by

means of facilities which shall be interconnected with Cooperative

facilities, shall be subject to appropriate regulations as shall be

established, from time to time, by the Cooperative. Each Member

shall pay all other amounts owed by him to the Cooperative as and

when they become due and payable. When a Member has more than

one service connection from the Cooperative, any payment by him for

service from the Cooperative shall be deemed to be allocated and

credited on a pro rata basis to his outstanding account for all such

service connections, notwithstanding that the Cooperative’s

actual accounting procedures may not reflect such allocation and

proration.

2. Grant of Easements: Each member shall, upon being requested to

do so by the Cooperative, execute and deliver to the Cooperative

such easements or rights-of-way over, on and under such lands

owned or leased by the Member in accordance with such reasonable

terms and conditions as the Cooperative shall require for the

furnishing of distribution service to such Member or to other Members.

Each member shall participate in any required program that may be

established by the Cooperative to enhance the services being

furnished.

3. Compliance with Electrical Standards: Cause all premises receiving

energy or services pursuant to his Membership to become and to

remain wired in accordance with the specifications of the rules of the

Illinois State Fire Marshall’s office, the National Electric Code, any

applicable state code or local government ordinances and of the

Cooperative. Each Member shall be responsible for, and shall

indemnify and hold harmless the Cooperative and its Directors,

officers, employees, agents and independent contractors against

death, injury, loss or damage resulting from any defect in or improper

use or maintenance of such premises and all wiring and apparatuses

connected thereto or used thereon. Each Member shall make

available to the Cooperative a suitable site, as determined by the

Cooperative, to place the Cooperative’s physical facilities for the

furnishing and metering of energy or other service and shall permit

the Cooperative’s authorized employees, agents and independent

contractors to have access thereto safely and without interference

from hostile dogs or any other hostile source, for meter reading and

bill collecting and for inspection, maintenance, replacement,

relocation, repair or disconnection of such facilities at all reasonable

times. As part of the consideration for such service, each Member

shall not interfere with, impair the operation of, or cause any damage

to such facilities, and shall use his best efforts to prevent others from

so doing. Each Member shall also provide such protective devices to

his premises, apparatuses or meter base as the Cooperative shall

from time to time require in order to protect the Cooperative’s physical

facilities and their operation and to prevent any interference with or

damage to such facilities. In the event such facilities are interfered

with, impaired in their operation or damaged by the Member, or by

any other person when the Member’s reasonable care and

surveillance should have prevented such, the Member shall indemnify

and hold harmless the Cooperative and its Directors, officers,

employees, agent and independent contractors against death, injury,

loss or damage resulting there from, including but not limited to the

Cooperative’s costs of repairing, replacing or relocating any such

facilities and its loss, if any, of revenues resulting from the failure or

defective functioning of its meter equipment. The Cooperative shall,

however, in accordance with its applicable service rules and

regulations indemnify the Member for any overcharges for service

that may result from a malfunctioning of its metering equipment or

any error occurring in the Cooperative’s billing procedures. In no

event shall the responsibility of the Cooperative for furnishing energy

or other service extend beyond the point of delivery.

4. Compliance with Cooperative Rules: Each Member, by applying for

Membership with the Cooperative, agrees to comply with the Bylaws

and the rules, regulations, rates, and policies of the Board of

Directors.

SECTION 3: MEMBERSHIP TERMINATION AND SUSPENSION:

A. Suspension of Membership: Upon a Member’s failure, after the

expiration of the initial time limit prescribed either in a specific notice to

him or in the Cooperative’s generally publicized applicable rules and

regulations, to pay any amounts due the Cooperative or to cease any

other non-compliance with his Membership obligations, a Person’s

Membership, shall automatically be suspended, and such Member shall

not during such suspension be entitled to receive energy of other service

from the Cooperative or any other of his Membership rights. Payment of

all amounts due the Cooperative, including any additional charges

required for such reinstatement and/or cessation of any other

noncompliance with his Membership obligations within the final time limit

provided in such notice or rules and regulations shall automatically

reinstate the Membership, in which event the Member shall thereafter be

entitled to receive service from the Cooperative and to all other of his

Membership rights.

B. Termination of Membership:

1. By Expulsion: Upon failure of a suspended Member to be

automatically reinstated to Membership, as provided in Section 2(A),

such Member may, without further notice, but only after due hearing if

such is requested by such Member, be expelled by resolution of the

Board of Directors at any subsequently held regular or special

meeting of the Board of Directors. Any person so expelled may, by

delivering written notice to that effect to the Cooperative at least ten

(10) days prior to the next meeting of the Members, appeal to and be

present and heard at such Member meeting, at which the Members

may vote to approve or disapprove such expulsion, in which latter

event such Member’s Membership shall be reinstated retroactively to

the date of his expulsion. After any finally effective expulsion of a

Member, such Member shall not again become a Member of the

Cooperative except upon new application therefore duly approved as

provided in Section 2 of the Bylaws. The Board of Directors, acting

upon principles of general application in such cases, may establish

such additional terms and conditions for renewed Membership as it

determines to be reasonably necessary to assure the applicant’s

compliance with all Membership obligations.

2. By Withdrawal of Resignation: A Member may withdraw from

Membership upon such generally applicable conditions as the Board

of Directors shall prescribe or upon either (a) ceasing to (or, with the

approval of the Board of Directors, resigning his Membership in favor

of a new applicant who also shall) own or directly occupy or use all

premises being furnished service pursuant to his Membership, or (b)

except when the Board of Directors specifically waives such

condition, abandoning totally and permanently the service on such

premises.

3. By Death or Cessation of Existence: Except in the case of a Joint

Membership, the death of a Member who is a Natural Person shall

automatically terminate his Membership. The cessation of the legal

existence of any other Member shall automatically terminate such

Membership; provided, however, that upon the dissolution for any

reason of a partnership, or upon the death, withdrawal or addition of

any individual partner, such Membership shall continue to be held by

such remaining and/or new partner or partners as continue to own or

directly to occupy or use the premises being furnished service

pursuant to such membership in the same manner and to the same

effect as though such Membership had never been held by different

partners; provided further, that neither a withdrawing partner nor his

estate shall be released from any debts of the partner, the partnership

or the estate that are due the Cooperative.

C. Effect of Divorce: Upon the dissolution of marriage recognized under the

laws of the State of Illinois, the husband and wife’s Joint Membership shall

not terminate, but shall be deemed to be converted to an Individual

Membership transferred to that spouse as directed in the order of

dissolution of marriage entered by such court of competent jurisdiction;

provided, however, that if such order of dissolution of marriage does not

address the issue of the Membership, then absent a written agreement

between the husband and wife and the Cooperative, the Membership

shall be deemed to be converted to an Individual Membership and

transferred without further action to that spouse who is awarded or

otherwise maintains possession of the premises which is served by the

Cooperative and all right, title, interest and power in and to the capital

credits allocated to such Membership shall be deemed to be transferred to

such spouse, and all future capital credits shall be allocated to such

spouse; provided further, however, that if neither spouse receives or

otherwise maintains possession of the premises which is served by the

Cooperative for any other reason and the Cooperative’s service to said

premises is discontinued, then the Cooperative shall divide all right, title,

interest and power in and to the capital credits to such Membership

equally between the husband and wife.

D. Effect of Termination: Upon the termination in any manner of a

Member’s Membership, he or his estate, as the case may be, shall be

entitled to refund of his service security deposit, if any, theretofore paid to

the Cooperative, less any amounts due the Cooperative; but neither he

nor his estate, as the case may be, shall be released from any debts or

other obligations then remaining due the Cooperative. Notwithstanding the

suspension or expulsion of a Member, as provided for herein, such

suspension or expulsion shall not, unless the Board of Directors shall

expressly so elect, constitute such release of such person from his

Membership obligations as to entitle him to purchase from any other

person any service he had been receiving for use at the premises to

which such service has theretofore been furnished by the Cooperative

pursuant to such Membership.

E. Board Acknowledgement: Upon the termination of a Member’s

Membership for any reason, the Board of Directors, as soon as practical

after such termination is made known to it, shall by appropriate resolution

formally acknowledge such termination, effective as of the date on which

the Cooperative ceased furnishing service to such person. Upon

discovery that the Cooperative has been furnishing service to any person

other than a Member, it shall cease furnishing such service unless such

person applies for, and the Board of Directors approves, Membership

retroactively to the date on which such person first began receiving such

service, in which event the Cooperative, to the extent practical, shall

correct its Membership and all related records accordingly.

SECTION 4: MEETINGS OF MEMBERS, VOTING AND ELECTIONS:

A. Annual Meeting: For the purposes of electing Directors, hearing and

voting on issues duly submitted to the Members for a vote, hearing and

passing upon reports covering the previous fiscal year, and transacting

such other business as may properly come before the Members in

attendance, the Annual Meeting of the Members of the Cooperative shall

be held each year on such date at such place in one of the counties in

Illinois within which the Cooperative serves, and beginning at such hour,

as the Board of Directors shall from time to time determine; provided,

however, that for cause sufficient to it, the Board of Directors may fix a

different date for such annual meeting not more than thirty (30) days prior

to the day otherwise established for such annual meeting. It shall be the

responsibility of the Board of Directors to make adequate plans and

preparations for, and to encourage Member attendance at the annual

meeting. Failure to hold the annual meeting at the designated time and

place shall not work a forfeiture or dissolution of the Cooperative.

1. Notice and Waiver of Notice: Written notice of the place, day and

hour of the annual meeting and, in the case of a special meeting or of

an annual meeting at which business requiring special notice is to be

transacted, the purpose or purposes of the meeting shall be delivered

to each member not less than fifteen (15) days nor more than sixty

(60) days prior to the date of such meeting, either personally or by

mail, by or at the direction of the President or the Secretary and, in

the case of a special meeting, at the direction of him or those calling

the meeting. Any such notice delivered by mail may be included with

member service billings or as an integral part of the Cooperative’s

monthly newsletter. No matter the carrying of which, as provided by

law requires the affirmative votes of at least a majority of all the

Cooperative’s members shall be acted upon at any meeting of the

Members unless notice of such matter shall have been contained in

the notice of the meeting. If mailed, such notice shall be deemed to

be delivered when deposited in the United States mail, addressed to

the Member at his address as it appears on the records of the

Cooperative, with postage thereon prepaid and postmarked at least

fifteen (15) days prior to the meeting date. In making such

computation, the date of the meeting shall not be counted. The

incidental and non-intended failure of any Member to receive a notice

deposited in the mail addressed to the Member at his address as

shown on the Cooperative’s books shall not invalidate any action

which may be taken by the Members at any such meeting, and the

attendance in person of a Member at any meeting of the Members

shall constitute a waiver of notice of such meeting unless such

attendance shall be for the express purpose of objecting to the

transaction of any business, or one or more items of business, on the

grounds that the meeting shall not have been lawfully called or

convened. Any Member attending any meeting for the purpose of

making such objection shall notify the Secretary prior to or at the

beginning of the meeting of his objection.

2. Written Waiver of Notice: Any Member or Director may waive, in

writing, any notice of any Member meeting required to be given under

the Bylaws, or any notice otherwise required by law, either before or

after such notice is required to be given.

3. Quorum: Business shall not be transacted at any meeting of the

Members unless there are present in person at least one hundred fifty

(150) of the Cooperative’s Members, except that, if less than a

quorum is present at any meeting, a majority of those present in

person may, without further notice, adjourn the meeting to another

time and date not less than fifteen (15) days and not more than sixty

(60) days later and to any place in one of the counties of within which

the Cooperative serves; provided, however, that the Secretary shall

notify any absent Members of the time, date and place of such

adjourned meeting by delivering notice thereof as provided in the

Bylaws. At all meetings of the Members, whether a quorum be

present or not, the Secretary shall annex to the meeting minutes, or

incorporate therein by reference, a list of those Members who were

registered as present in person.

4. Order of Business: The order of business at the Annual Meeting of

the Members and, insofar as practicable or desirable, at all other

meetings of the Members shall be essentially as follows:

a. Report on the number of Members present in person in order to

determine the existence of a quorum;

b. Reading of the notice of the meeting and proof of the due giving

thereof, or of the waiver or waivers of notice of the meeting, as

the case may be;

c. Reading of unapproved minutes of previous meetings of the

members and the taking of necessary action thereon, unless

waived;

d. Presentation and consideration of reports of officers, directors

and committees;

e. Election of Directors;

f. Unfinished business;

g. New business; and

h. Adjournment.

Notwithstanding the foregoing, the Board of Directors or the Members

themselves may from time to time establish a different order of

business for the purpose of assuring the earlier consideration of and

action upon any item of business the transaction of which is

necessary or desirable in advance of any other item of business;

provided, however, that no business other than adjournment of the

meeting to another time and place may be transacted until and unless

the existence of a quorum is first established.

B. Special Meetings: A special meeting of the Members may be called by

the Board of Directors, by the President, by any six (6) directors, or by

petition signed by not less than ten percent (10%) of the Members, and it

shall there upon be the duty of the Secretary to cause notice of such

meeting to be given as provided in the Bylaws. Such a meeting shall be

held at such a place in a county within which the Cooperative serves, on

such date, not sooner than fifteen (15) days nor later than sixty (60) days

after the call for such meeting is made or a petition therefore is filed, and

beginning at such hour as shall be designated by him or those calling or

petitioning for the same.

C. Voting on Issues Duly Presented to the Members: The Board of

Directors may submit to the Members at any meeting of the Members one

or more questions or issues for consideration and voting by the Members;

provided, however, that notice shall be given of the submission of such

questions or issues to the Members in the notice of meeting referred to in

Section 4(A)(1) of the Bylaws. Except as prohibited by applicable law, the

Articles of Incorporation, or the Bylaws, at any meeting of the Members,

the Members may, by majority vote of the Members present at such

meeting, call any question or issue before the Members for consideration

and a vote. At all meetings of the Members, all duly submitted issues or

questions shall be decided by secret written ballot cast by the Members

present at such meeting of the Members of the Cooperative, and such

issue or question shall be determined by the affirmative vote of a majority

of the Members present, unless otherwise required by applicable law, the

Articles of Incorporation, or the Bylaws. In the voting on questions or

issues duly submitted to the Members for a vote at a meeting of the

Members of the Cooperative, each Member who is not in a status of

suspension as provided for in Section 3 of the Bylaws shall be entitled to

one vote upon each issue submitted to a vote at any meeting of the

Members.

D. Election of Directors: At each Annual Meeting of the Members of the

Cooperative, Directors shall be elected by secret written ballot cast

(except as otherwise provided in this section) by the Members present at

such annual meeting and qualified to vote under the terms and conditions

of the Bylaws. Such election shall be conducted as follows:

1. Appointment of Nominations Committee: The Board of Directors

shall appoint, not less than one hundred fifteen (115) nor more than

one hundred forty-five (145) days prior to the date of the Annual

meeting of the Members of the Cooperative, a Nominations

Committee which shall consist of nine (9) Natural Persons, three from

each Directorate District. Members of the Nominations Committee

shall not be employees, agents, officers, or Directors of the

Cooperative, shall not be known candidates for Director, and shall not

be Close Relatives of employees, agents, officers, Directors of the

Cooperative, or known candidates for Director.

2. Candidates Nominated by Nominations Committee: On or before

eighty-five (85) days prior to the Annual Meeting of the Members of

the Cooperative, the Nominations Committee shall:

a. Nominate as many Natural Persons who meet the qualifications

stated in Section 5B of these Bylaws as the Nominating

Committee deems desirable to be candidates for election to the

Board of Directors; and,

b. Post a list of the names of such Natural Persons so nominated by

the Nominations Committee at the principal place of business of

the Cooperative.

3. Candidates Nominated by Petition: In addition to those candidates

named by the Nominations Committee, any fifteen (15) or more

Members of the Cooperative may nominate such other Natural

Persons as candidates for election to the Board of Directors by filing

with the Secretary of the Cooperative not less than seventy-five (75)

days prior to the Annual Meeting of the Members of the Cooperative a

written petition bearing the signatures, names and addresses of at

least fifteen (15) Members of the Cooperative nominating such other

Natural Persons as candidates for election to the Board of Directors

and listing such candidates’ names, addresses, ages, and telephone

numbers. The Secretary of the Cooperative shall post such petition at

the principal places of business of the Cooperative where the list of

nominations made by the Nominations Committee was posted.

4. Notice to Members of Nomination of Candidates: The Secretary of the

Cooperative shall mail or cause to be mailed to the Members notice

of the Annual Meeting of the Members of the Cooperative at least

fifteen (15) days but not more than sixty (60) days before the date of

said annual meeting a statement of the names, addresses, ages, and

telephone numbers of all candidates nominated for election to the

Board of Directors. Such statement shall identify the Directorate

District to which such candidate may be elected, and such statement

shall identify which candidates were nominated by the Nominations

Committee and which candidates were nominated by petition filed by

Members of the Cooperative.

5. Credentials and Election Committee: The Board of Directors shall,

not less than thirty (30) days nor more than sixty (60) days before the

Annual Meeting of the Members of the Cooperative, appoint a

Credentials and Election Committee consisting of an uneven number

of Members numbering not less than three (3) nor more than nine (9).

Members of the Credentials and Election Committee:

a. Shall not be a Director, Member of the Nomination Committee, a

signatory to any petition filed by the Members nominating any

candidate for election to the Board of Directors, or an existing

Cooperative employee, agent, officer, or known candidate for

Director;

b. Shall not be a Close Relative of any Director, member of the

Nomination Committee, signatory to any petition filed by the

Members nominating any candidate for election to the Board of

Directors, or any existing Cooperative employee, agent, officer,

known candidates for Director.

In appointing the Credentials and Election Committee, the Board of

Directors shall have regard for the equitable representation of the

several areas served by the Cooperative. The Committee shall, prior

to the Annual Meeting of the Members of the Cooperative hold a

meeting. At such meeting, the Credentials and Elections Committee

shall:

a. Elect a chairman and secretary;

b. Establish or cause to be established and thereafter adopt

procedures for conducting Member registration;

c. Establish or cause to be established and thereafter adopt all

necessary ballots, or other voting measures deemed necessary to

conduct the election of candidates to the Board of Directors at the

Annual Meeting of the Members of the Cooperative; and

thereafter to pass and rule upon all questions that may arise with

respect to the registration of Members, to count all ballots or other

votes cast in any such election, to rule upon the effect of any

ballots or other ballots irregularly or indecisively marked or cast,

to rule upon all other questions that may arise relating to Member

voting and the election of candidates to the Board of Directors,

including but not limited to the validity of petitions of nomination,

qualifications of candidates, the regularity of the nomination and

election of candidates to the Board of Directors, and to pass upon

any protest or objection filed with respect to any such election or

conduct arising out of or in any way affecting such election. In the

exercise of its responsibility, the Committee shall have available

to it the advice of counsel provided by the Cooperative. In the

event a protest or objection is filed concerning any election or

matter arising out of or related thereto, such protest or objection

shall be filed with the Secretary of the Credentials and Election

Committee in writing not later than three (3) days following the

adjournment of the Annual Meeting of the Members of the

Cooperative in which such election was conducted. Such protest

or objection shall be filed in the form of a petition and shall

specifically state the nature of the protest or objection and shall

state with particularity all facts supporting or otherwise evidencing

such protest or objection. The Credentials and Election

Committee shall thereafter be reconvened at the direction of its

chairman within seven (7) days after such petition is duly filed,

and shall hold an evidentiary hearing on the petition and the

matters raised therein. The Credentials and Elections Committee

may hear such evidence as it deems relevant as presented by the

protestors or objectors, who may be heard in person, by counsel,

or both, and any opposing evidence presented by any party

opposing such petition. The Committee, by the affirmative vote of

a majority of those members present and voting, shall, within a

reasonable time but not later than thirty (30) days after such

hearing, render its decision, the result of which may be to affirm

the election, to amend, modify or change the result or outcome of

such election, or to set such election aside. The Credentials and

Election Committee’s decision shall be in writing, and shall be

deemed final subject to judicial review by a court of competent

jurisdiction pursuant to applicable laws of the State of Illinois. The

Committee shall not affirmatively act on any matter unless a

majority of the Committee is present.

6. Voting on Election of Directors: In voting on the election of Directors,

each Member shall be entitled to cast the number of votes (but not

cumulatively), which corresponds to the total number of Directors to

be elected, but no Member may vote for more candidates than the

number of Directors that are to be elected from or with respect to any

particular Directorate District. Ballots marked in violation of the

foregoing restriction with respect to one or more Directorate Districts

shall be deemed invalid by the Credentials and Elections Committee,

and shall not be counted. The Board of Directors may establish one

or more voting places in each District of the Cooperative at a

Cooperative facility located in each District. A Member may vote for

the election of Directors or on any other matter legally submitted to a

vote at the place of any meeting of the Members, or at a voting place

in each Directorate District, but not in both places. Directors shall be

elected by:

a. Plurality: A plurality of the votes cast shall be required to elect a

candidate to the Board of Directors. Drawing by lot shall resolve,

where necessary, any tie votes; or,

b. Election by Acclamation: If number of candidates nominated for

election to the Board of Directors, does not exceed the number of

Directors to be elected from a particular Directorate District, and if

there is no objection from the Members present at the Annual

Meeting after a call for such objection is made, then secret written

balloting may be dispensed within respect of that particular

election of that particular Director and voting may be conducted

by acclamation rather than by ballot.

E. Proxy Voting, Absentee Voting and Voting by Entities: Proxy voting is

prohibited. However, anything contained in the Bylaws to the contrary

notwithstanding, a Member may vote by absentee ballot as follows: A

Member desiring to cast his vote absentee, shall appear in person not

later than fifteen (15) days before the date of the Annual Meeting of

Members, and not earlier than one (1) day before the date of the Annual

Meeting of Members, at the Cooperative’s headquarters at Greenville,

Illinois, during regularly scheduled business hours of the Cooperative, and

shall request an absentee ballot. An absentee ballot approved by the

Credentials and Election Committee shall be provided and the Member

shall cast such ballot secretly and seal such ballot in an envelope, which

shall be provided in such sealed envelope to the Credentials and Election

Committee. On the date of the Annual Meeting of the Members, the

Credentials and Election Committee shall open and count such absentee

ballots so provided. Any absentee ballot, which is delivered to the

Credentials and Election Committee in an unsealed condition, shall be

deemed invalid and shall not be counted. Notice of this Bylaw provision

shall be provided to the Members of the Cooperative in the notice of

Annual Meeting. Voting by Members other than Members who are

Natural Persons shall be allowed only upon the presentation to the

Cooperative by a duly appointed officer or agent of such Member (prior to

or upon registration of such Member at each Member meeting, or when

requesting an absentee ballot) of satisfactory evidence entitling such

officer or agent presenting the same to cast a vote on behalf of such

Member.

F. Savings Clause: Notwithstanding any provisions contained in these

Bylaws, failure to comply with any of such provisions of these Bylaws shall

not affect in any manner whatsoever the validity of any action taken by

the Board of Directors after the election of Directors.

SECTION 5: DIRECTORS:

A. Number of Directors and General Powers: The business and affairs of

the Cooperative shall be managed by the Board of Directors, which shall

consist of nine (9) Directors. The Board shall exercise all of the powers,

express and implied, necessary for the operation and management of the

affairs of the Cooperative, except those expressly reserved to the

Members by applicable law, the Articles of Incorporation or the Bylaws.

In addition, the Board of Directors shall have the following powers:

1. Committees, Rules, Regulations, Rate Schedules, Contracts and

Policies: The Board of Directors shall have power to make, adopt,

amend, abolish and promulgate such rules, regulations, rate

schedules, policies, contracts, security deposits and any other types

of deposits, payments or charges, including contributions in aid to

construction, not inconsistent with applicable law or the Articles of

Incorporation or Bylaws, as the Board of Directors may deem

necessary for the management, administration and regulation of the

business and affairs of the Cooperative. In a manner consistent with

the Act, the Board of Directors by majority vote may create one or

more committees to act and otherwise serve in such capacity as the

Board of Directors may, from time to time, determine.

2. Accounting System and Reports: The Board of Directors shall cause

to be established and maintained a complete accounting system of

the Cooperative’s financial operations and condition, and shall, after

the close of each fiscal year, cause to be made a full, complete and

in dependent audit of the Cooperative’s accounts, books and records

reflecting financial operations during, and financial conditions as of

the end of, such year. A full and accurate summary of such audit

reports shall be submitted to the members at or prior to the

succeeding annual meeting of the members. The Board may

authorize special audits, complete or partial, at any time and for any

specified period of time.

3. Subscription to Cooperative’s Newsletter: For the purpose of

disseminating information devoted to the economical, effective and

conservative use of energy and other services, the Board of Directors

shall be empowered, on behalf of and for circulation to the Members

periodically, to subscribe to the Cooperative’s Newsletter, “The

Southwestern,” published by the Cooperative, the cost of which shall

be deducted from any funds accruing in favor of such Members, so as

to reduce such funds in the same manner as would any other

expense of the Cooperative.

4. Contracts and Banking: Except as otherwise provided by law or the

Bylaws, the Board of Directors may authorize any Cooperative officer,

agent or employee 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. All

checks, drafts or 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 or countersigned by such

officer, agent or employee of the Cooperative and in such manner as

shall from time to time be determined by resolution of the Board of

Directors. All funds of the Cooperative shall be deposited or invested

from time to time to the credit of the Cooperative in such bank or

banks or in such financial securities or institutions as the Board of

Directors may select.

B. Qualifications: To be eligible to become or remain a Director of the

Cooperative, such person:

1. Shall not be a Close Relative of an incumbent Director;

2. Shall not be an employee or agent of the Cooperative;

3. Shall not be, directly or indirectly, employed by or financially

interested in a competing enterprise, business selling electric energy

or supplies to the Cooperative, or a business primarily engaged in

selling electrical or plumbing appliances, fixtures or supplies to,

among others, the Members of the Cooperative;

4. Shall not be, directly or indirectly, interested in any contract, permit,

franchise or other similar agreement or authorization to which the

Cooperative is or may be a party;

5. Shall be a Member in good standing with the Cooperative and

receiving energy or service from the Cooperative at his primary place

of abode;

6. Shall be a Natural Person;

7. Shall be at least eighteen (18) years of age; provided, however, that a

duly elected officer or duly appointed agent of any Member which is

not a Natural Person shall be exempt from the qualifications stated in

Section 4(B)(6) and Section 4(B)(7) if such Member is in good

standing with the Cooperative and receiving energy or service from

the Cooperative.

C. Disqualification: Any Person who is not qualified to become or remain a

Director shall be disqualified by the then serving Board of Directors. It

shall be the duty of the Board of Directors to remove or cause to be

removed any Person who is not qualified to become or remain a Director.

D. Directorate Districts: The territory served by the Cooperative is and shall

be divided into three (3) Directorate Districts described below, and each

Directorate District shall be represented at all times on the Board of

Directors by three Directors:

Directorate Number of

District No. Description Directors

I Madison, St. Clair & Macoupin Counties 3

II Bond, Montgomery & Clinton Counties 3

III Fayette, Effingham, Marion & Shelby Counties 3

E. Term of Directors: Directors duly elected pursuant to the Bylaws shall

serve staggered terms, and shall thereafter be so nominated and elected

so that one Director from or with respect to each of Directorate Districts I,

II, and III shall be elected for a three (3) year term at an Annual Meeting

of the Members of the Cooperative; and thereafter, one (1) director from

or with respect to each of Directorate Districts I, II, and III shall be elected

for a three (3) year term at the Annual Meeting of the Members of the

Cooperative; and thereafter, one (1) Director from or with respect to each

of Directorate Districts I, II, and III shall be elected for a three (3) year

term at the next Annual Meeting of the Members of the Cooperative, and

so forth; provided, however, that the terms of any two (2) Directors from

the same Directorate District shall not coincide. Upon their election,

Directors shall, subject to the provisions of these Bylaws with respect to

the removal of Directors, serve until the Annual Meeting of the Members

of the year in which their terms expire or until their successors shall have

been elected and shall have qualified. If for any reason an election of

Directors shall not be held at an Annual Meeting of the Members duly

fixed and called pursuant to these Bylaws, such election may be held at

an adjournment of such meeting or at a subsequently held special or the

next Annual Meeting of the Members. Failure of an election for a given

year shall allow the incumbents whose directorships would have been

voted on to hold over and continue only until the conclusion of an election

duly held pursuant to the Bylaws.

F. Removal of Directors by Members: Any Member may bring one or more

charges for cause against any one or more Directors and may request the

removal of such Director(s) by reason thereof by filing with the Secretary

such charge(s) in writing together with a petition signed by not less than

ten percent (10%) of the total Members of the Cooperative, which petition

shall call for a special Member meeting, the stated purpose of which shall

be to hear and act upon such charges and, if one (1) or more Director(s)

are recalled, to thereafter elect their successor(s), and which specifies the

place, time and date thereof not less than sixty (60) days after filing of

such petition, or which requests that the matter be acted upon at the

subsequent annual Member meeting if such meeting will be held no

sooner than sixty (60) days after the filing of such petition. Each page of

the petition shall, in the forepart thereof, state the name and address of

each Member filing such charge(s), a verbatim statement of such

charge(s) and the name(s) of the Director(s) against whom such charge(s)

are being made. The petition shall be signed by each Member in the same

name as he is billed by the Cooperative and shall state the signatory’s

address as the same appears on such billings. Notice of such charge(s)

verbatim, of the Director(s) against whom the charge(s) and have been

made, of the Member(s) filing the charge(s) and the purpose of the

meeting shall be contained in the notice of the meeting, or separately

noticed to the Members not less than fifteen (15) days prior to the special

Member meeting at which the matter will be acted upon; provided,

however, that the notice shall set forth only twenty (20) of the names (in

alphabetical order) of the Members filing one or more charges if twenty

(20) or more Members file the same charge(s) against the same

Director(s). Such Director(s) shall be informed in writing of the charges

after they have been validly filed and at least twenty (20) days prior to the

special Member meeting at which the charge(s) are to be considered, and

shall have an opportunity at the meeting to be heard in person, by

witnesses, by counsel or any combination of such, and to present

evidence in respect of the charge(s); and the person(s) bringing the

charge(s) shall have the same opportunity, but must be heard first. The

question of the removal of such Director(s) shall, separately for each if

more than one has been charged, be considered and voted upon at such

meeting, and any vacancy created by such removal shall be filled by vote

of the Members at such meeting without compliance with the foregoing

provisions with respect to nominations, except that nominations shall

be made from the floor; provided, however, that the question of the

removal of a Director shall not be voted upon at all unless some evidence

in support of the charge(s) against him shall have been presented during

the meeting through sworn testimony, documents or otherwise. A newly

elected Director shall be from or with respect to the same Directorate

District as was the Director whose office he succeeds and shall serve the

remaining portion of the removed Director’s term.

G. Vacancies: Except for vacancies filled pursuant to Section 5F of these

Bylaws, all vacancies occurring on the Board of Directors shall be filled by

appointment of the Board of Directors. A Director thus appointed by the

Board of Directors shall serve out the remaining term of the Director

whose office was vacated and until a successor is duly elected; provided,

however, that such Director shall be from the same Directorate District as

was the Director whose office was vacated; and provided further that if the

remaining term of the vacated office is less than 180 days, then such

vacancy shall be filled by the plurality vote of the Members at the Annual

Meeting of Members in accordance with the Bylaws.

H. Compensation and Expenses: Directors shall, as determined by a

resolution of the Board of Directors, receive on a per diem basis, a fixed

fee, which may include insurance benefits, (a) for attending meetings of

the Board of Directors; and, (b) when such has had prior approval of the

Board of Directors for the performance of other Cooperative business.

Directors shall also receive advancement or reimburse ment of any travel

and out-of-pocket expenses actually, necessarily and reasonably incurred.

No Director shall receive compensation for serving the Cooperative in any

other capacity, nor shall any Close Relative of a Director receive

compensation for serving the Cooperative, unless the payment and

amount of such compensation shall be specifically authorized by a vote of

the Members or such payment and amount shall be specifically authorized

by the Board of Directors upon their certification of such as an emergency

measure; provided, however, that a Director who is also an officer of the

Board of Directors, and who as such officer performs regular or periodic

duties of a substantial nature for the Cooperative in its fiscal affairs, may

be compensated in such amount as shall be fixed and authorized in

advance of such service by the Board of Directors.

SECTION 6: MEETINGS OF THE BOARD OF DIRECTORS:

A. Regular Meetings: A regular meeting of the Board of Directors shall be

held, without notice, immediately after the adjournment of the Annual

Meeting of the Members, or as soon thereafter as conveniently may be,

at such site as designated by the Board in advance of the annual

meeting. A regular meeting of the Board of Directors shall also be held

monthly at such date, time and place in one of the counties in Illinois

within which the Cooperative serves as the Board shall provide by

resolution. Such regular monthly meeting(s) may be held without notice

other than such resolution fixing the date, time and place thereof, except

when business to be transacted at such meeting shall require special

notice; provided, however, that any director absent from any meeting of

the Board of Directors at which such a resolution initially determines or

makes any change in the date, time or place of a regular meeting shall be

entitled to receive written notice of such determination or change at least

five (5) days prior to the next meeting of the Board of Directors; and

provided further that, if a policy therefore is established by the Board of

Directors, the President may change the date, time or place of a regular

monthly meeting for good cause and upon not less than five (5) days

notice thereof to all Directors.

B. Special Meetings: Special meetings of the Board of Directors may be

called by resolution of the Board of Directors, or by any three (3)

Directors, or by the President, and it shall thereupon be the duty of the

Secretary to cause notice of such meeting to be given as hereinafter

provided in Section 6(C) of the Bylaws. The Board, the President, or the

Directors calling the meeting shall fix the date, time and place for the

meeting, which shall be held in one of the counties in Illinois within which

the Cooperative serves, unless all Directors consent to its being held in

some other place in Illinois or elsewhere.

C. Notice of Meetings: Written notice of the date, time, place (or telephone

conference call) and purpose or purposes of any special meeting of the

Board shall be delivered to each Director not less than five (5) days prior

thereto, either personally or by mail, by or at the direction of the Secretary

or, upon a default in this duty by the Secretary, by him or those calling it

in the case of a special meeting or by any director in the case of a meeting

whose date, time and place have already been fixed by Board resolution.

If mailed, such notice shall be deemed to be delivered when deposited in

the United States mail, addressed to the director at his address as it

appears on the records of the Cooperative, with first class postage theron

prepaid, and postmarked at least five (5) days prior to the meeting date.

The attendance of a Director at any meeting of the Board of Directors shall

constitute a waiver of notice of such meeting unless such attendance shall

be for the express purpose of objecting to the transaction of any business,

or of one or more items of business, on the ground that the meeting shall

not have been lawfully called or convened. A Director may waive, in

writing, any notice of any meeting required to be given under the Bylaws,

or any notice otherwise required by law, either before or after such notice

is required to be given.

D. Quorum: The presence of a majority of the Directors then in office shall

be required for the transaction of business and the affirmative votes of

a majority of the Directors present shall be required for any action to be

taken by the Board of Directors; provided, however, that a Director who

by law or these Bylaws is disqualified from voting on a particular matter

shall not, with respect to consideration of and action upon that matter, be

counted in determining the number of directors in office or present; and

provided further that, if less than a quorum be present at a meeting, a

majority of the directors present may adjourn the meeting from time to

time, but shall cause the absent Directors to be duly and timely notified of

the date, time and place of such adjourned meeting.

E. Telephonic Participation: Directors may participate in a meeting by

means of a conference telephone or similar communication equipment by

means of which all persons participating in the meeting can hear each

other at the same time and participation by such means shall constitute

presence in person at a meeting for all purposes, including but not limited

to the determination of a quorum.

SECTION 7: OFFICERS:

The officers of the Cooperative shall be a President, Vice President, Secretary and Treasurer, and such other officers as may from time to time be created by the Board of Directors. The office of Secretary and Treasurer may be held by the same person.

A. Election and Term of Office: The President, Vice President, Secretary

and Treasurer shall be elected by secret written ballot, annually and

without prior nomination, by and from the Board of Directors at the first

meeting of the Board held after the Annual Meeting of the Members. If the

election of such officers shall not be held at such meeting, it shall be held

as soon thereafter as conveniently may be. Each such officer shall hold

office until the meeting of the Board of Directors first held after the next

succeeding Annual Meeting of the Members or until his successor shall

have been duly elected and shall have qualified, subject to the provisions

of the Bylaws with respect to the removal of Directors and to the removal

of officers by the Board of Directors. Any other officers may be elected

by the Board of Directors from among such persons, and with such title,

tenure, responsibilities and authorities, as the Board of Directors may

from time to time deem advisable. A vacancy in any office elected or

appointed by the Board of Directors shall be filled by the Board of

Directors for the remaining portion of such term as the Board of Directors

shall from time to time determine.

B. Removal: Any officer, agent or employee elected or appointed by the

Board of Directors may be removed at the discretion of the Board of

Directors.

C. President: The President shall (1) be the principal executive officer of

the Cooperative and shall preside at all meetings of the Board of

Directors, and, unless determined otherwise by the Board of Directors, at

all meetings of the members; (2) sign, with the Secretary, any deeds,

mortgages, deeds of trust, notes, bonds, contracts or other instruments

authorized by the Board of Directors to be executed, except in cases in

which the signing and execution thereof shall be expressly delegated by

the Board of Directors or by these Bylaws to some other officer or agent of

the Cooperative, or shall be required by law to be otherwise signed or

executed; and, (3) in general, perform all duties incident to the office of

President and such other duties as may be prescribed by the Board of

Directors from time to time.

D. Vice President: In the absence of the President, or in the event of his

inability or refusal to act, the Vice President shall perform the duties of the

President, and, when so acting, shall have all the powers of and be

subject to all the restrictions upon the President; and shall perform such

other duties as from time to time may be assigned to him by the Board of

Directors.

E. Secretary: The Secretary shall (1) keep, or cause to be kept, the minutes

of meetings of the members and of the Board of Directors in one or more

books provided for that purpose; (2) see that all notices are duly given

in accordance with these Bylaws or as required by law; (3) be custodian

of the corporate records and of the seal of the Cooperative and see that

the seal of the Cooperative is affixed 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 or is required by law; (4)

keep, or cause to be kept, a register of the name and post office address

of each Member, which address shall be furnished to the Cooperative by

such Member; (5) sign, with the President, documents which shall have

been authorized by resolution of the Board of Directors; (6) have general

charge of the books of the Cooperative in which a record of the Members

is kept; (7) keep on file at all times a complete copy of the Cooperative’s

Article of Incorporation and Bylaws, together with all amendments thereto,

which copies shall always be open to the inspection of any Member, and,

at the expense of the Cooperative, furnish a copy of such documents and

of all amendments thereto upon request to any Member; and, (8) in

general, perform all duties incident to the office of the Secretary and such

other duties as from time to time may be assigned to him by the Board of

Directors.

F. Treasurer: The Treasurer shall (1) have charge and custody of and be

responsible for all funds and securities of the Cooperative; (2) receive

and give receipts for monies due and payable to the Cooperative from any

source whatsoever, and deposit or invest all such monies in the name of

the Cooperative in such bank or banks or in such financial institutions or

securities as shall be selected in accordance with the provisions of these

Bylaws; and, (3) in general perform all the duties incident to the office of

Treasurer and such other duties as from time to time may be assigned to

him by the Board of Directors.

G. Delegation of Secretary’s and Treasurer’s Responsibilities:

Notwithstanding the duties, responsibilities and authorities of the

Secretary and of the Treasurer provided in the Bylaws, the Board of

Directors by resolution may, except as otherwise prohibited by law,

delegate, wholly or in part, the responsibility and authority for, and the

regular or routine administration of, one or more of each such officer’s

such duties to one or more agents, other officers or employees of the

Cooperative who are not Directors. To the extent that the Board of

Directors does so delegate with respect to any such officer, until that

officer as such shall be released from such duties, responsibilities and

authorities.

H. General Manager; Chief Executive Officer: The Board of Directors

may appoint a General Manager, who may be, but who shall not be

required to be, a Member of the Cooperative, and who also may be

designated Chief Executive Officer. Such officer shall perform such duties

as the Board of Directors may from time to time require and shall have

such authority as the Board of Directors may from time to time vest in him.

I. Bonds: The Board of Directors shall require the Treasurer and any other

officer, agent or employee of the Cooperative charged with responsibility

for the custody of any of its funds or property to give bond in such sum

and with such surety as the Board of Directors shall determine. The

Board of Directors in its discretion may also require any other officer,

agent or employee of the Cooperative to give bond in such amount and

with such surety as it shall determine. The costs of all such bonds shall

be borne by the Cooperative.

J. Compensation; Indemnification: The compensation, if any, of any

officer, agent, employee or Director shall be determined by the Board of

Directors by majority vote. Each person who at any time is or shall have

been a Director, officer, employee, or agent of the Cooperative, or is or

shall have been serving at the written direction of the Cooperative as a

Director, officer, employee or agent of another corporation, partnership,

company, joint venture, trust of other enterprise shall be indemnified by

the Cooperative in accordance with and to the fullest extent permitted by

the Act, as amended from time to time. The foregoing right of

indemnification shall not be deemed exclusive of any other rights to which

a person seeks indemnification may be entitled to under any other written

agreement duly approved by the majority vote of the Board of Directors

and executed by the Cooperative. The Board of Directors may approve,

by majority vote, the purchase of insurance on behalf of any person

serving as a Director, officer, employee or agent of the Cooperative or at

the direction of the Cooperative to the fullest extent permitted by the Act,

as amended from time to time.

K. Reports: 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 and showing the condition of the Cooperative

at the close of such fiscal year.

SECTION 8: NON-PROFIT, COOPERATIVE OPERATION, & NOTICE
OF CONTRACT:

A. Interest or Dividends on Capital Prohibited: The Cooperative shall at

all times be operated on a Cooperative non-profit basis for the mutual

benefit of its Members or Patrons. No interest or dividends shall be paid or

payable by the Cooperative on any capital furnished by its Members or

Patrons.

B. Patronage Capital: In the furnishing of energy or services to Members

or Patrons on a cooperative basis, the Cooperative’s operations shall be

conducted so that all Members or 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, cooperative

basis, the Cooperative is obligated to account on a patronage basis to all

its Members and Patrons for all amounts received and receivable from the

furnishing of energy or other services in excess of operating costs and

expenses properly chargeable against the furnishing of energy or other

services. 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 Members or Patrons as

capital. The Cooperative is obligated to pay by credits to a capital account

for each Member or 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 a manner that at the end of each fiscal year the amount

of capital, if any, so furnished by each Member or Patron is clearly

reflected and credited in an appropriate record to the capital account of

each Member or Patron, and the Cooperative shall within a reasonable

time after the close of the fiscal year notify each Member or Patron of the

amount of capital so credited to his account. All such amounts credited to

the capital account of any Member or Patron shall have the same status

as though they had been paid to the Member or Patron in cash in

pursuance of a legal obligation to do so and the Member or Patron had

then furnished the Cooperative corresponding amounts for capital. All

other amounts received by the Cooperative from non-operation activity in

excess of costs and expenses shall, in the discretion of the Board of

Directors and insofar as permitted by law, be used to offset any losses

incurred during the current or any prior fiscal year, and to the extent not

needed for that purpose, at the discretion of the Board of Directors, shall

be allocated or not allocated to the Members or Patrons on a patronage

basis. Any amount so allocated shall be included as a part of the capital

credited to the accounts of its Members or Patrons, as provided herein. 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; provided, however, that after the payment of debt and the

retirement of outstanding capital credits to Members and Patrons, all

remaining assets shall be distributed to Members, but not Patrons, of the

Cooperative. If, at any time prior to dissolution or liquidation, the Board of

Directors shall determine that the financial condition of the Cooperative

will not be impaired thereby, the capital then credited to Members’ and/or

Patrons’ accounts may be retired in full or in part. Any such retirements of

capital shall be made on such terms and conditions as the Board of

Directors shall determine. Capital credited to the account of each Patron

shall be assignable only on the books of the Cooperative pursuant to

written instructions 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 of Directors, acting under policies of

general application, shall determine otherwise. Notwithstanding any other

provisions of these Bylaws, the Board of Directors shall at its discretion

have the power at any time upon the death of any Patron, who was a

natural person (or, if as so provided for in the preceding paragraph, upon

the death of an assignee of the capital credits of a Patron, which assignee

was a natural person), if the legal representatives of his estate shall

request in writing that the capital so credited or assigned, as the case may

be, be retired prior to the time such capital would otherwise be retired

under the provisions of the Bylaws, to retire such capital immediately upon

such terms and conditions as the Board of Directors, acting under policies

of general application to situations of like kind, and such legal

representatives, shall agree upon; provided, however, that the financial

condition of the Cooperative will not be impaired thereby. The

Cooperative, before retiring any capital credited to any Patron’s account,

shall deduct there from any amount owing by such Patron to the

Cooperative, together with interest thereon at the Illinois legal rate on

judgments in effect when such amount became overdue, compounded

annually. If the Board of Directors elects to retire capital credits as

provided for herein, but one or more Members cannot be identified or

located after reasonable exercise of due diligence and due inquiry, then

the Board of Directors, acting under policies of general application, may

declare the capital credits of such Members as permanent equity, and

such capital credits shall be thereafter recorded on the books and records

of the Cooperative as permanent equity of the cooperative; provided,

however, that if such Member is located and identified the capital credits

of such Member that were recorded as permanent equity of the

Cooperative shall be paid to such Member.

C. Notice to Members or Patrons of Contract: The Members of the

Cooperative, by dealing with the Cooperative, acknowledge that the terms

and provisions of the Articles of Incorporation and Bylaws shall constitute

and be a contract between the Cooperative and each Member, and both

the Cooperative and the Members are bound by such contract, as fully as

though each Member had individually signed a separate instrument

containing such terms and provisions. The provisions of the Bylaws shall

be called to the attention of each Member or Patron of the Cooperative by

the posting of the Bylaws in a conspicuous place in the Cooperative’s

offices.

SECTION 9: DISPOSITION AND PLEDGING OF ASSETS; DISTRIBUTION OF SURPLUS ASSETS ON DISSOLUTION

A. Disposition and Pledge: The Cooperative shall not merge or consolidate

or sell, lease, exchange, or otherwise dispose of substantially all the

assets of the Cooperative unless such merger or consolidation or sale,

lease, exchange, or disposal is conducted and authorized at a meeting of

the Members by the affirmative vote of two-thirds (2/3rds) of the Members

in attendance at such meeting conducted and called in a manner

consistent with the Act. The Board of Directors may sell, lease, exchange,

transfer, or otherwise dispose of any property no longer deemed

necessary or useful in the common course of the Cooperative’s business

in a manner consistent with the Act. The Board of Directors may, in the

common course of the Cooperative’s business, mortgage, pledge, convey

security interests in, and otherwise encumber all or any 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 any revenues or income derived there from, to secure any

in debtedness of the Cooperative to any financial institution in a manner

consistent with the Act.

B. Distribution of Surplus Assets on Dissolution: Upon the Cooperative’s

dissolution, any assets remaining after all liabilities or obligations of the

Cooperative have been satisfied and discharged shall, to the extent

practicable as determined by the Board of Directors not inconsistently with

the provisions of the Bylaws and the Act, be distributed without priority but

on a patronage basis among all persons who have been Members of the

Cooperative for any period(s) during its existence; provided, however, that

if in the judgment of the Board of Directors the amount of such surplus is

too small to justify the expense of making such distribution the Board may,

in lieu thereof and within a period of one year after dissolution, donate, or

provide for the donation of, such surplus to one or more nonprofit

charitable or educational organizations that are exempt from Federal

income taxation.

SECTION 10: MISCELLANEOUS:

A. Fiscal Year: The Cooperative’s fiscal year shall begin on the first day of

the month of January of each year and end on the last day of the month of

December following.

B. Rules of Order: Parliamentary procedure at all meetings of the Members,

of the Board of Directors, of any committee provided for in these Bylaws

and of any other committee of the Members or Board of Directors which

may from time to time be duly established shall be governed by the most

recent edition of Robert’s Rules of Order, except to the extent such

procedure is otherwise determined by law or by the Cooperative’s Articles

of Incorporation, Bylaws or other rule, regulation, or policy duly adopted

by the Members or the Board of Directors, as the case may be.

C. Cooperative Seal: The Corporate seal of the Cooperative shall be in the

form of a circle and shall have inscribed thereon the name of the

Cooperative and the words “Corporate Seal, Illinois.”

D. Amendments: These Bylaws may be altered, amended or repealed by

the Members of the Cooperative at any regular or special member

meeting, but only if a notice of such meeting shall have contained a copy

of the proposed alteration, amendment or repeal, or an accurate summary

explanation thereof.

E. Interests in Other Organizations: The Cooperative may, upon

authorization of the Board of Directors, become a member, stockholder or

other interest holder in any other organization which the Board of

Directors deems to be in the best interest of the Cooperative.

F. Statement of Nondiscrimination: Southwestern Electric Cooperative,

Inc. is the recipient of Federal financial assistance from the Rural Utilities

Service, an agency of the U.S. Department of Agriculture, and is subject

to the provisions of Title VI of the Civil Rights Act of 1964, as amended,

Section 504 of the Rehabilitation Act of 1973, as amended, the Age

Discrimination Act of 1975, as amended, and the rules and regulations of

the U.S. Department of Agriculture. In accordance with Federal law and

the U.S. Department of Agriculture’s policy, this institution is prohibited

from discriminating on the basis of race, color, national origin, sex,

religion, age, or disability (Not all prohibited bases apply to all programs).

The person responsible for coordinating this organization’s

nondiscrimination compliance efforts is the Director of Human Resources.

Any individual or specific class of individuals, who feels that this

organization has subjected them to discrimination, may obtain further

information about the statutes and regulations listed above from and/or file

a written complaint with this organization. To file a complaint of

discrimination, write USDA, Director, Office of Civil Rights, Room 326-W,

Whitten Building, 1400 Independence Avenue, SW, Washington, DC

20250-9410, or call (202) 720-5964 (voice or TDD). USDA is an equal

opportunity provider and employer. Complaints must be filed within

180 days after the alleged discrimination. Confidentiality will be

maintained to the extent possible.