Bylaws

Section 10.01. Vote of the Members not Required

The Board of Directors may, without authorization of the members, sell, mortgage, lease or otherwise encumber or dispose of

 

(a)                 any of its property which, in the judgement of the Board , is neither necessary nor useful in operating and maintaining the corporation's system, provided that in any one (1) year, the amount shall not exceed ten percent (10%) in value of all of the property of the corporation, or

(b)                 merchandise.

 

This Section and the other provisions of this article, however, shall have no application to the mortgaging or encumbering of the property of the Association for the purpose of borrowing money.

 

 

Section 10.02. Vote Required

(a)                 For property of the Association to be sold, leased, or disposed of other than in Section 1, the same must be first authorized by the affirmative vote of a least sixty percent (60%) of the members of the Association.

(b)                 Any proxy authorizing a vote for or against a proposal to sell, or otherwise dispose of property of the Association must satisfy the requirements set forth in the Securities and Exchange Commission Rule 14A-4. Any proxy authorizing a vote for or against a proposal to sell, lease or otherwise dispose of property of the Association obtained prior to the date notice is mailed shall be deemed invalid for purposes of determining whether the required member vote pursuant to this Section has been obtained.

 

 

Section 10.03. Procedural Requirements

(a)                 A proposal to sell property of the Association may be considered and voted on at the annual meeting of members or a special meeting of members called for such purpose. A meeting of the members of the Association for the purpose of considering and voting upon the sale, lease or other disposition of property of the Association to a particular Purchaser or to any person controlling, controlled by, or under common control with such Purchaser (an "Affiliate") shall not be held more than once in any twelve month period.

(b)                 In order for any proposal to sell, lease, or otherwise dispose of property of the Association to be properly brought before an annual or special meeting of the members, the requirements of Section 77-5-237, Mississippi Code Ann. must be met and in addition the following requirements must be satisfied:

 

(1)                 The Association must have provided written notification of the offer of purchase to any lender desiring to receive such notification or to any generation and transmission association of which the Association is a member. The notification of the offer of purchase must contain all of the information provided to the Association, its management and Board of Directors, or which is filed with the Public Service Commission.

(2)                 The disclosure required by Section 77-5-237, Mississippi Code Ann. and any additional disclosure required by these bylaws must have been received in a form to allow management and the Board of Directors ample opportunity to review same.

(3)                 The Purchaser must have agreed in writing to assume those obligations of the Association as required by Section 77-5-237, Mississippi Code Ann., and other provisions of these bylaws.

(4)                 The Purchaser must have agreed in writing to indemnify the Association and its members against any damage, liability or loss (including, without limitation, reasonable attorneys' fees, interest, penalties, judgements and amounts paid in settlement of, any claim, suit, action or proceeding) sustained, incurred, paid or required to be paid by the Association arising out of any act or omission of the Association or Purchaser occurring before or after the sale of property of the Association to the Purchaser.

 

 

Section 10.04. Required Disclosure

Any Purchaser shall prepare and deliver to the board of the Association a written disclosure statement containing the following information and documents:

 

(a)                 that information as required by Section 77-5-237, Mississippi Code Ann.;

(b)                 any plans or proposal of the Purchaser or an Affiliate of the Purchaser concerning the future conduct of the business of the Association including but not limited to:

 

(1)                 resale of any of the property of the Association;

(2)                 termination of employment of persons employed by the Association.

(3)                 changes in benefits of employees of the Association under any employee benefit plan;

(4)                 changes in rates for electricity to be charged in the service area served by the Association; and

(5)                 any reduction in service, change in service area, or requirements as to minimum charges which would affect members of the Association.

 

(c)                 an opinion of counsel to the Purchaser setting forth the tax consequences of the acquisition to the Association and its members; and

(d)                 any other information which a reasonable person would consider important in deciding whether to vote for approval of a proposal to sell, lease or otherwise dispose of the property of the Association.

 

 

Section 10.05. Competing Bid Disclosure

Any competing bids given to the Association members of the proposed purchase shall include any other offers to purchase received from any lender of the Association or any generation/transmission association of which the Association is a member and shall include the terms of the offer and such other information as the lender or generation/transmission association may request to be transmitted to the members and which is material to the future generation of the assets to be purchased.

 

 

Section 10.06. Effect of Noncompliance

Any sales, lease or other disposition of the property of the Association that is not effected in strict compliance with the provisions of Section 77-5-237, Mississippi Code Ann, and the provisions of Section 10.03 and 8.02 (e) of these bylaws shall be void. Any Purchaser or Affiliate of a Purchaser which in providing the disclosure required by Sections 10.03, 10.04 and 10.05, or in any other communication with the members of the Association, written or oral, makes false, or misleading statements concerning material facts or omits information necessary to make the information disclosed not misleading, shall be liable to the Association and its members for any damages incurred thereby, including, but not limited to, the difference in the consideration paid for the property of the Association by the Purchaser and the fair value of such property and any increase paid or to be paid in the future for electricity by the members of the Association.

 

 

Section 10.07. Non-application to consolidation

The provisions of Section 10 do not apply to the consolidation of Associations effectuated pursuant to Section 77-5-217, Miss. Code Ann.

 

 

Section 10.08. Severability

If any section of Article 10, or any provision thereof, is determined by any court to be invalid, such invalidity shall not affect the validity of the other sections or provisions of this Article.