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Code of Regulations
April 18, 1991
Amended March 30, 1995
Amended March 31, 1999
Amended May 17, 2001Click on link to read article.
Article I - Meetings of Members
Article II - Board of Trustees
Article III - Officers
Article IV - Membership and Transfers
Article V - Examination of Books by Members
Article VI - Dissolution
Article VII - Conflicts, Indemnification
Article VIII - Amendment of Regulations
ARTICLE I - Meetings of Members
Sec. 1.1 Annual Meeting.
The annual meeting of the members, for the purpose of electing trustees and transacting such other business as may come before the meeting, shall be held on such date and at such time as the Board of Trustees may from year to year fix, or if the Board of Trustees fails so to fix a date and time for the meeting in any year, at the first Tuesday of May of such year if not a legal holiday, but if that day is a legal holiday under Ohio Law, the annual meeting shall be held on the first succeeding day which is not a Sunday or legal holiday. If for any reason the election of trustees is not held at the annual meeting or any adjournment thereof, the Board of Trustees shall cause the election to be held at a special meeting of the members as soon thereafter as is convenient. At any such special meeting, the members may elect trustees and transact any other business with the same effect as at an annual meeting.Sec. 1.2 Special Meetings.
A special meeting of the members may be called by the chairman of the board, if any, or the president, or by a majority of the trustees acting with or without a meeting, or by the holders of record of twenty-five percent (25%) of all membership certificates outstanding at the time of the calling of such meeting and then entitled to be voted at a meeting of the members. Upon delivery to the president or secretary of a request in writing for a meeting of the members by any persons entitled to call such meeting, it shall be the duty of the officer to whom the request is delivered to give notice to the members of such meeting. Said request shall specify the objects or purposes and the date and hour for such meeting. The date shall be at least fourteen (14) and not more than sixty-five (65) days after delivery of the request. If, upon such a request, such officer does not within five (5) days call the meeting, the persons making such request may call it by giving notice as provided in Sec. 1.4, or by causing it to be given by any designated representative.Sec. 1.3 Place of Meetings.
All meetings of the members shall be held at such place or places, within or without the State of Ohio, as may from time to time be fixed by the Board of Trustees, or if not so fixed, then as shall be specified in the respective notices or waivers of notice thereof.Sec. 1.4 Notice of Meetings.
Every member shall furnish the secretary of the company with an address at which notices of meetings and all other corporate notices may be served on or mailed to him. Except as otherwise expressly required by law, notice of such meeting of the members, whether annual or special, shall, not more than sixty (60) days and at least ten (10) days before the date specified for the meeting, be given by the president or secretary, or, in case of their refusal or failure to do so, by the person or persons entitled to call such meeting, to each member entitled to notice of the meeting, by delivering a written or printed notice thereof, to him personally or by posting it in a postage prepaid envelope addressed to him at his address furnished by him as above provided, or, if he shall not have furnished such address, then at his post office address last known to the sender. Except when expressly required by law, no publication of any notice of a meeting of the members shall be required. If membership interests are transferred after notice has been given, notice need not be given to the transferee. A record date may be fixed for determining the members entitled to notice of any meetings of members, in accordance with the provisions of Sec. 1.12. Every notice of a meeting, shall state briefly the objects or purposes thereof as may be specified by the person or persons requesting or calling the meeting. Only the business provided for in such notice shall be taken up at the meeting. Notice of the adjournment of a meeting need not be given if the time and place to which it is adjourned are fixed and announced at such meeting.Sec. 1.5 Waiver of Notice.
Any member, either before or after any meeting, may waive any notice thereof required by law, the Articles, or these regulations. Waivers must be in writing and filed with or entered upon the records of the meeting. Notice of a meeting will be deemed to have been waived by any member who attends such meeting either in person or by proxy, and who does not, before or at the commencement of the meeting, protest the lack of proper notice.Sec. 1.6 Quorum.
At all meetings of the members, the members present by proxy and entitled to vote, shall constitute a quorum for the transaction of business, except when a greater number is required by law, the Articles of Incorporation, or these regulations. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting power of the members present at such meeting by proxy, or any officer entitled to preside or act as secretary of the meeting, may adjourn the meeting from time to time. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting originally called.Sec. 1.7 Organization.
At each meeting of the members, the chairman of the board, if any, or, in his absence, the president, or, in the absence of both of them, a chairman chosen by a majority in voting power of the members present in person or by proxy and entitled to vote, shall act as chairman, and the secretary of the company, or, in his absence, any assistant secretary, or, in the absence of all of them, any person whom the chairman of the meeting appoints, shall act as secretary of the meeting.Sec. 1.8 Order of Business.
The order of business at all meetings of the members shall be as follows:
Roll Call;
Appointment of inspectors of election, if requested;
Proof of notice of meeting or waiver thereof;
A QUORUM BEING PRESENT:
Reading of minutes of preceding meeting and acting thereon, unless dispensed with by unanimous consent;
Report of Board of Trustees, if any;
Reports of officers, if any;
Reports of committees, if any;
Election of trustees, if any;
Unfinished business, if any; and
New business, if any.The order of business at any meeting may, however, be changed by the vote of a majority in voting power of those present in person or by proxy and entitled to vote, or by their unanimous consent. The treasurer shall, in his report at the annual meeting, or the meeting held in lieu thereof, lay before the meeting the financial statement referred to below in Sec. 3.11(e), unless dispensed with by unanimous consent.
Sec. 1.9 Voting.
Voting shall be by mail as provided in Sec. 1702.20 of the Ohio Revised Code and these regulations. Each holder of a membership certificate entitled to vote by law, these regulations or the Articles of Incorporation shall be entitled to one vote by proxy for the membership certificate registered in his name on the books of the company. A person holding more than one membership certificate, however, shall be entitled to only one vote to be exercised as provided herein. As provided below in Sec. 1.12 of this Article I, a record date for determining which members are entitled to vote at any meeting shall be fixed. Persons holding membership certificates in a fiduciary capacity shall be entitled to vote the certificate so held. Membership votes shall be made orally by the proxy holder or holders.Sec. 1.10 Proxies.
Any member who is entitled to attend a meeting of the members, or to assent or to give consents in writing, shall exercise such right and any other of his rights by a proxy or proxies appointed by a writing signed by such member, which need not be sealed, witnessed, or acknowledged. Except as herein otherwise specifically provided, actions taken by proxy or proxies shall be governed by the provisions of Sec. 1702.20 of the Ohio Revised Code, or any future statute of like tenor or effect, including provisions relating to the sufficiency of the writing, duration of the validity of the proxy or proxies, power of substitution, revocation, and all other provisions.Sec. 1.11 Inspectors of Elections.
Inspectors of elections may be appointed and act (in the same manner as with corporations for profit) as provided in Sec. 1701.50 of the Ohio Revised Code, or any future statute of like tenor or effect applicable to corporations not for profit.Sec. 1.12 Fixing Record Date.
The Board of Trustees shall fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of members as a record date for the determination of the members entitled to notice of any such meeting. Only the members of record on the date so fixed shall be entitled to receive notice of such meeting, notwithstanding any transfer of any membership certificate on the books of the company after such record date. The members of record on any such date shall be determined as of the close of business on that date. The Board of Trustees shall fix a record date not more than three (3) working days prior to the date of any meeting, after which proxies received or reported to the inspectors of election, or election committee if no inspectors have been appointed, shall not be counted or have any force or effect on the issues to be voted upon at such meeting.Sec. 1.13 List of Members at Meetings.
Upon request of any member at any meeting of the membership, there shall be produced at such meeting an alphabetically arranged list, or classified lists, of the members of record as of the applicable record date, who are entitled to vote, showing their respective addresses.
ARTICLE II - Board of Trustees
Sec. 2.1 General Powers of Board.
The powers of the company shall be exercised, its business and affairs shall be conducted, and its property shall be controlled by the Board of Trustees, except as otherwise provided by the law of Ohio, the Articles or these regulations.Sec. 2.2 Number and Qualifications.
The number of trustees, each of whom must be a member of the company, shall be five (5). The number of trustees may be fixed and from time to time changed by resolution adopted by the vote of holders of membership certificates representing a majority of the voting power present by proxy at any annual meeting, or at any special meeting called for that purpose; but no reduction of the number of trustees shall have the effect of removing any trustee prior to the expiration of his term of office.Sec. 2.3 Compensation and Expenses.
The trustees shall be entitled to such compensation, on a monthly or annual basis, or on the basis of meetings of the board attended, or any of these bases, as the Board of Trustees may from time to time determine and establish. No trustee shall be precluded from serving the company as an officer or in any other capacity, or from receiving compensation therefor. Trustees may be reimbursed for their reasonable expenses incurred in the performance of their duties, including the expense of traveling to and from meetings of the board, if such reimbursement is authorized by a majority of them.Sec. 2.4 Election of Trustees.
At each meeting of the members for the election of trustees at which a quorum is present, the persons receiving the greatest number of votes shall be the trustees.Sec. 2.5 Term of Office.
Unless he shall earlier resign, is removed as hereinafter provided, dies, or is adjudged mentally incompetent, each trustee, except as otherwise provided in the Plan and Agreement of Merger between the company and The Clinton County Rural Water Co. dated April 18, 1991, shall hold office for a term of three years, until the sine die adjournment of the annual meeting of members next succeeding the end of his term, or, if the election of trustees shall not be held at that annual meeting or any adjournment thereof, until the sine die adjournment of the special meeting of the members for the election of trustees held thereafter as provided in Sec. 1.1 of Article I, of these regulations, and until his successor is elected and qualified. The terms of the trustees shall be staggered so as to provide continuity and stability.Sec. 2.6 Resignations.
Any trustee may resign by giving written or oral notice to the president or the secretary of the company. Such resignation shall be effective at the time specified therein, if any. If none is specified, the resignation shall be effective immediately. Unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. The vacancy created by a resignation shall be filled by the remaining trustees as provided in Sec. 2.7.Sec. 2.7 Vacancies.
A vacancy in the Board of Trustees, other than one resulting from a trustee completing his term as provided in Sec. 2.5, shall be filled, for the unexpired term of the trustee whose loss or departure created the vacancy, by a majority vote of the remaining trustees, even though they are less than a quorum.Sec. 2.8 Bylaws, Etc.
The Board of Trustees shall adopt a Code of Bylaws to govern the transaction of its business; the manner of calling, and the places and manner of holding, its meetings; and any other matters which it determines to include therein; but no provision thereof may conflict with any provision of these regulations. (See, also, Sec. 4.5, below.)Sec. 2.9 Quorum and Manner of Acting.
A majority of the number of trustees fixed in or established pursuant to Sec. 2.2 as at the time of any meeting of the Board of Trustees, must be present in person at such meeting in order to constitute a quorum for the transaction of business. The act of a majority of the trustees present at any meeting at which a quorum is present shall be the act of the Board of Trustees. In the absence of a quorum, a majority of those present may adjourn a meeting from time to time until a quorum is had. Notice of an adjourned meeting need not be given. The trustees shall act only as a board. Individual trustees shall have no power or authority as such.Sec. 2.10 Removal of Trustees.
Any trustee may be removed, either with or without cause, at any time, by a majority vote of those present in person or by proxy and entitled to vote thereat, at a special meeting of the members called for that purpose. The vacancy in the Board of Trustees caused by any such removal shall be filled by the remaining trustees as provided in Sec. 2.7. In addition, a trustee may be removed, either with or without cause, at any time, by written instrument signed by all the other trustees specifying the date when such removal shall become effective. A trustee shall automatically and without further action cease to be a trustee in the event he is adjudicated incompetent by a court of competent jurisdiction.Sec. 2.11 Action in Writing in Lieu of Meeting.
Any action which, by virtue of any provision of the laws of Ohio, the Articles, or these regulations, may be taken at a meeting of the trustees, may be taken without a meeting if authorized by a writing signed by all the trustees.
Sec. 3.1 Number and Titles.
The officers of the company shall be a president, one or more vice presidents, a treasurer, one or more assistant treasurers, if needed, a secretary, and one or more assistance secretaries, if needed and a general manager. There may, in addition, be a chairman of the board, at any times during which the board shall see fit to cause such office to be filled. Furthermore, if there is more than one vice president, the board may, in its discretion, establish designations for the vice presidencies so as to distinguish them as to their functions or their order. Any person may hold two or more offices and perform the duties thereof, except that no person may be a vice president, secretary, or assistant secretary while he is president, and no person may at the same time be treasurer and an assistant treasurer or secretary and an assistant secretary. If one person is elected to the offices of secretary and treasurer, he shall be known as the secretary-treasurer, and all of the duties and authority assigned to, and all of the references made to, both the secretary and treasurer in these regulations and in the code of bylaws shall apply to the secretary-treasurer. The Board of Trustees shall have the discretion to determine from time to time the number of vice presidents the company shall have, whether or not assistant treasurers and assistant secretaries are needed, and, if so, the number of assistant treasurers and assistant secretaries the company shall have.Sec. 3.2 Election, Terms of Office, Qualifications, and Compensation.
The officers shall be elected by the Board of Trustees. Each shall be elected for an indeterminate term and shall hold office during the pleasure of the Board of Trustees. The Board of Trustees may hold annual elections of officers. At any time after one year following an election of a full slate of officers, an election of officers shall be held within 30 days after delivery to the president or the secretary of a written request for such election by any trustee. The notice of the meeting held in response to such request shall specify that an election of officers is one of the purposes thereof. Each officer, except the general manager, must be a trustee; and if an officer ceases to be a trustee, he shall immediately cease to be an officer. The Board of Trustees shall fix the compensation of each officer, if any.Sec. 3.3 Additional Officers, Agents, Etc.
In addition to the officers mentioned in Sec. 3.1, the company may have such other officers, agents, and committees as the Board of Trustees may deem necessary and may appoint, each of whom or each member of which shall hold office for such period, have such authority, and perform such duties as may be provided in these regulations or in the Code of Bylaws adopted by the board, or as the board may from time to time determine. The Board of Trustees may delegate to any officer or committee the power to appoint any subordinate officers, agents, or committees. In the absence of any officer, or for any other reason, the Board of Trustees may deem sufficient, the Board of Trustees may delegate, for the time being the powers and duties, or any of them of such officer to any other officer, or to any trustee.Sec. 3.4 Removal.
Any officer (except the general manager, if under contract, as provided in Sec. 3.15, below) may be removed, either with or without cause, at any time, by the Board of Trustees at any meeting, the notices (or waivers of notices) of which shall have specified that such removal action was to be considered. Any officer appointed by an officer or committee to which the board shall have delegated the power of appointment may be removed, either with or without cause, by the committee or superior officer (including successors) who made the appointment, or by any committee or officer upon whom such power of removal may be conferred by the Board of Trustees.Sec. 3.5 Resignation.
Any officer may resign at any time by giving written notice to the Board of Trustees, the president, or the secretary. Any such resignation shall take effect at the time specified therein. The acceptance of such resignation shall not be necessary to make it effective.Sec. 3.6 Vacancies.
A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, shall be filled in the manner prescribed for regular appointments or elections to such office.Sec. 3.7 Powers, Authority and Duties of Officers.
Officers of the company shall have the powers and authority conferred and the duties prescribed by law, in addition to those specified or provided for in the other sections of this Article III.Sec. 3.8 The President.
Subject to the control of the Board of Trustees, the president shall sign, execute, and deliver in the name of the company all deeds, mortgages, bonds, contracts, and other instruments when specially authorized by the Board of Trustees , except in cases where the signing and execution thereof shall be expressly delegated by these regulations or by the Board to some other officer or agent of the company or shall be required by law or otherwise to be signed or executed by some other officer or agent. He may cause the seal of the company to be affixed to any instrument. He shall serve as Chairman of all meetings of the Board of Trustees and all meetings of the Members, and shall perform such other duties as from time to time may be assigned to him by the Board of Trustees.Sec. 3.9 The Vice Presidents.
The vice presidents shall perform such duties as may be assigned to them, individually or collectively, by the Board of Trustees, or by the president. In the absence or disability of the president, one or more of the vice presidents may perform such duties of the president as the president or the Board of Trustees may designate.Sec. 3.10 The Treasurer.
If required by the Board of Trustees, the treasurer shall give bond for the faithful discharge of his duties in such penal sum and with such sureties as the Board of Trustees shall determine.
He shall:
Cause to be kept, at the principal office of the company correct records of the monies, business, and transactions of the company as the Board of Trustees shall from time to time designate;
Report to the Board of Trustees at each regular meeting, a report of the financial condition of the company, and as soon as may be after the close of each fiscal year, submit to the Board of Trustees the audited report for such fiscal year prepared by the company’s independent auditors; and
Lay before each annual meeting of the members or the meeting held in lieu of it, a copy of the audited report prepared by the company’s independent auditors for the most recent fiscal year.Sec. 3.11 The Assistant Treasurers.
The assistant treasurers shall perform such duties as from time to time may be assigned to them, individually or collectively, by the Board of Trustees, by the president, or by the treasurer. In the absence or disability of the treasurer, one or more of the assistant treasurers may perform such duties of the treasurer as the treasurer, the president, or the Board of Trustees may designate.Sec. 3.12 The Secretary.
The secretary shall:Cause minutes of all meetings of the members and of the Board of Trustees to be taken and kept in one or more books provided for that purpose;
See that the seal of the company is affixed to all membership certificates before they are issued, and to all other documents to which the seal is required to be affixed;
Sign (or see that the treasurer or other proper officer of the company thereunto authorized by the Board of Trustees signs), with the president or vice president, membership certificates in the company;
In general, perform such other duties as from time to time may be assigned to him by the Board of Trustees or the president.Sec. 3.13 The Assistant Secretaries.
The assistant secretaries shall perform such duties as from time to time may be assigned to them, individually or collectively, by the Board of Trustees, by the president, or by the secretary. In the absence or disability of the secretary, one or more of the assistant secretaries may perform such duties of the secretary as the secretary, the president, or the Board of Trustees may designate.
Sec. 3.14 General Manager.
The general manager shall have the direct responsibility for the day to day operations and running of the company. He shall employ, direct, fix the compensation of (subject to approval of the Board of Trustees), discipline, and discharge its personnel. He shall assist the other officers, as they may request and as provided below, in the performance of their duties.He shall:
Superintend and manage the business of the company; coordinate and supervise the work of its employees, agents and independent contractors;
Have charge and custody of, and be responsible for all funds, securities, notes, contracts, deeds, documents, and all other indicia of title in the company and valuable effects of the company; receive and give receipts for monies payable to the company from any sources whatsoever; deposit all monies in the name of the company in such banks, trust companies, or other depositories as shall be selected by or pursuant to the direction of the Board of Trustees; cause such funds to be disbursed by checks or drafts on the authorized depositories of the company, signed as the Board of Trustees may require; and be responsible for the accuracy of the amounts of, and cause to be preserved proper vouchers for, all monies disbursed;
Prepare from time to time reports or statements giving such information as the Board of Trustees may desire with respect to any and all financial transactions of the company.
See that all notices are duly given in accordance with these regulations or as required by law;
Be custodian of the corporate records and of the seal of the company;
Have available at each members meeting the list or lists required by Sec. 1.13, above, certified by the officer or agent in charge of the transfer of certificates;
See that the books, reports, statements, certificates, and all other documents and records required by law are properly kept and filed, are kept and maintained at the principal offices of the company, or at such other office as the Board of Trustees shall determine and direct; and
Perform such other duties as the Board of Trustees may from time to time assign to him.In addition to his duty to keep the Board of Trustees informed, the general manager shall keep the Treasurer and the Secretary of the company informed of the status of the matters for which he is responsible [items (b) through (g), above] on a current and continuing basis.
The Board of Trustees may enter into a contract or contracts with the general manager regarding his duties, the term of his office, his compensation and other like or similar matters regarding his duties and responsibilities. In such event the terms of such contract or contracts shall govern, notwithstanding such terms may be or appear to be in conflict with these Regulations.
Members, Certificates of Membership and Their Transfer
Sec. 4.1 Membership.
A person holding a membership certificate, or who is entitled to vote a membership certificate, is a Member. All members shall be subject to and shall abide by these Regulations and the rules adopted by the Board of Trustees.Sec. 4.2 Membership Certificates.
Every property owner being serviced with water by the company shall be entitled to a membership certificate, upon the execution of such applications and agreements as the Board of Trustees shall require by rule. "Property owner" for purposes of this Sec. 4.2, shall mean the record owner of the fee interest in the property being service or the person having a present possessory interest in such property. Only one membership certificate shall be issued for any one such property. If the property owner is a corporation, that corporation shall designate one person to exercise the rights of a member and shall certify that designation to the company, in writing. Only the person so designated shall exercise the rights of a member until the corporation holding the certificate changes its designation by a new writing.Sec. 4.3 Form of Certificates.
The membership certificate shall be in such form as the Board of Trustees prescribes. The certificates shall be numbered in the order in which they are issued and shall be signed in the name of the company by the president or any vice president and by the secretary, any assistant secretary, treasurer, or any assistant treasurer. The seal of the company shall be affixed thereto. A record shall be kept of the name of the member represented by each such certificate, the date thereof, and in case of cancellation, the date of cancellation. Every certificate surrendered to the company for exchange or transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificates until such existing certificates shall have been so canceled, except in cases provided for below in Sec. 4.4.Sec. 4.4 Transfer of Certificates.
Membership certificates are transferable with the transfer of the fee or possessory interest, upon the satisfaction of such requirements as the Board of Trustees shall have established by rule. If the membership certificate is not transferred with the transfer of the fee or possessory interest, for any reason, that membership certificate shall be canceled and all rights thereunder shall be terminated without further action. Such termination shall not disqualify any person who subsequently becomes a property owner and otherwise meets the requirements for issuance of a membership certificate.Sec. 4.5 Regulations.
The Board of Trustees may make such rules and regulations as it may deem expedient, not inconsistent with these regulations, concerning the issue, transfer, and registration of membership certificates or the cancellation of such certificates. Any such rules and regulations, to be effective, shall be incorporated in the Code of Bylaws.Sec. 4.6 Lost, Destroyed, and Mutilated Certificates.
If any certificate becomes worn, defaced, or mutilated but is still substantially intact and recognizable, the trustees, upon production and surrender thereof, shall order it canceled, and a new certificate issued in lieu of it. The holder of any membership certificate shall immediately notify the company if a certificate shall be lost, destroyed, or mutilated beyond recognition, and the company may issue a new certificate in the place of any certificate theretofore issued by it which is alleged to have been lost or destroyed or mutilated beyond recognition. The Board of Trustees may require the owner of the certificate which is alleged to have been lost, destroyed, or mutilated beyond recognition, or his legal representative, to give the company a bond with such surety or sureties, and in such penal sum, as it may direct, to indemnify the company and its trustees and officers against any claim that may be made against it or any of them on account of the issuance of such new certificate in the place of the allegedly lost, destroyed, or mutilated certificate. The Board of Trustees may, however, refuse to issue any such new certificate except pursuant to legal proceedings under the laws of Ohio.
Examination of Books by Member
The Board of Trustees may make reasonable rules prescribing under what conditions and regulations the books, records, accounts, and documents of the company, or any of them, shall be open to the inspection of the members. Any such rules, to be effective, shall be incorporated in the Code of Bylaws. No member shall be denied any right to inspect any book, record, account, or document of the company which is conferred by Sec. 1702.15 of the Ohio Revised Code or any other Ohio law. An original or duplicate ledger showing the names and addresses of the members shall at all times during the usual hours of business be open to the examination of every member at the principal office or place of business of the company in the State of Ohio.
Upon dissolution of the company, after paying off all debts and obligations, members and former members will be entitled to receive their equitable share of all proceeds remaining, to the extent practicable, as reflected by the records of the company.
ARTICLE VII - Conflicts, Indemnification
Sec. 7.1 Conflicts of Interest.
A trustee or officer of the company shall not be disqualified by his office from dealing or contracting with the company as a vendor, purchaser, employee, agent or otherwise. No transaction or contract or act of the company shall be void or voidable or in any way affected or invalidated by reason of the fact that any trustee or officer is a manager, or any corporation of which any trustee or officer is a member, or any corporation of which any trustee or officer is a shareholder, director, or trustee or beneficiary, is in any way interested in such transaction or contract or act.No trustee or officer shall be accountable or responsible to the company for or in respect to any transaction or contract or act of the company or for any gains or profits directly or indirectly realized by him by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, director, or trustee, or any trust of which he is a trustee or beneficiary, is interested in said transaction, contract or act; provided the fact that such trustee or officer or such firm or such corporation or such trust is so interested shall have been disclosed or shall have been known to the Board of Trustees or such members thereof as shall be presented at any meeting of the Board of Trustees at which action upon such contract or transaction or act shall have been taken. Any trustee may be counted in determining the existence of a quorum at any meeting of the Board of Trustees which shall authorize or take action in respect to any such contract or transaction or act, and may vote thereafter to authorize, ratify, or approve any such contract or transaction or act, and any officer of the corporation may take any action within the scope of his authority respecting such contract or transaction or act with like force and effect as if he or any firm of which he is a member, or any corporation of which he is a shareholder, director, or trustee, or any trust of which he is a trustee or beneficiary, were not interested in such transaction or contract or act. Without limiting or qualifying the foregoing, if in any judicial or other inquiry, suit, cause, or proceeding, the question of whether a trustee or officer of the company has acted in good faith is material, then notwithstanding any statute or rule of law or of equity to the contrary (if any there be), his good faith shall be presumed, in the absence of proof to the contrary by clear and convincing evidence.
Sec. 7.2 Indemnification.
Every person who is a trustee, officer, or employee of the company or a former trustee, officer or employee of the company, or a person who is serving or has served at the request of the company as a trustee, officer or employee of another corporation is hereby indemnified against expenses, judgments, decrees, fines, penalties, or amounts paid in settlement in connection with the defense of any pending or threatened action, suit, or proceeding, criminal or civil, to which he is or may be made a party by reason of being or having been such trustee, officer, or employee, provided he is determined by the trustees of the company acting at a meeting at which a quorum consisting of trustees who are not parties to or threatened with any such action, suit or proceeding is present (a) not to have been negligent or guilty of misconduct in the performance of his duty to the corporation of which he is such trustee, officer or employee; (b) to have acted in good faith in what he reasonably believed to be the best interest of such corporation; and (c) in any matter the subject of a criminal action, suit, or proceeding, to have had no reasonable cause to believe that his conduct was unlawful; provided, however, no trustee who is a party to or threatened with any such action, suit or proceeding shall be qualified to vote on such matter. Alternatively, such determinations may be made (a) by a court of competent jurisdiction or (b) by the members of the company at a meeting held for such purpose by the affirmative vote of the holders of membership certificates entitling them to exercise a majority of voting power of the company on such proposal. Such indemnification shall not be deemed exclusive of any other rights to which such trustee, officer or employee may be entitled including, without limiting the generality of the foregoing, any insurance purchased by the company, or such rights as may be provided by Sec. 1702.30, Ohio Revised Code, which provisions are specifically incorporated herein by reference.
ARTICLE VIII - Amendment of Regulations
These regulations may be amended or added to, or repealed and superseded by a new Code of Regulations, at any annual or special meeting of members in the notice (or waivers of notice) of which the intention to consider such amendment, addition, or repeal is stated, by a majority vote of those members present in person or by proxy and entitled to vote thereat; provided, however, so long as any indebtedness is held by or guaranteed by the Farmers Home Administration, the members shall not have the power to change the purposes of the corporation so as to decrease its rights and powers under the laws of the State, or to waive any requirement of bond or other provision for the safety and security of the property and funds of the corporation or its members, or so to amend the Code of Regulations as to effect a fundamental change in the policies of the corporation without the prior approval of the Farmers Home Administration in writing.
(End of Code of Regulations)
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