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BYLAWS OF THE EAST KAUAI WATER USERS' COOPERATIVE

A Hawaii Agricultural Cooperative (HRS Chapter 421)

 

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ARTICLE 20. EQUITY REDEMPTION.

20.01 Regular Redemption. It shall be the policy of the Corporation, when other redemption priorities set forth herein have been met, and when funds are available, to redeem in cash a percentage of each member patron's capital credits, rather than ratably by year. The time and method of any such redemption shall be determined by the Board of Directors.

20.02 Discretionary Special Redemptions. Notwithstanding any other provision of these bylaws, the board, at its absolute discretion, shall have the power to retire any capital credited to members' accounts on such terms and conditions as may be agreed upon by the parties in any instance in which the interests of the Corporation and its members are deemed to be furthered thereby and funds are determined by the board to be available for such purposes.

20.03 Specified Special Redemptions. The Corporation shall give priority to redemption of members' capital credits held by deceased persons for the settlement of their estates. The Corporation shall thereafter grant priority redemption to capital credits of former members who have attained their 65th birthday and are no longer actively engaged in agricultural production as actual producers or landlords in share tenancy. The time and method of such redemption shall be determined solely by the board of directors, dependent upon the financial condition of the Corporation. In the case of redemption of the equities of those persons who have attained age 65 and retired from farming, preference may be given to the oldest retirees in establishing the order of priority among those eligible.

In the case of a legal entity (e.g. limited liability company, corporation, partnership) holder of members' capital credits, such legal entity shall be considered eligible for priority treatment to the same extent as the individual stockholders, members or partners of such legal entity would have qualified, if each individual member, stockholder or partner were an individual member-patron of this Corporation. Any redemption shall be made to the legal entity, and not to the individual member, stockholder or partner thereof.

Each legal entity shall report to the association the percentage of ownership interest in the legal entity of each of its members, stockholders or partners. Failure to report accurately the percentage of individual ownership interest shall disqualify any allocations made to the legal entity by this Corporation from redemption priority. If a legal entity should dissolve, its capital credits in this Corporation shall be prorated among, and transferred to, the individual members, stockholders or partners and considered for redemption on an individual ownership basis. The amount of any redemption or prorate related to a legal entity member shall be determined by the percentage of ownership interest as reported by the legal entity.

When two or more persons are holders of capital credits as tenants in common, without a designation of rights of survivorship, they shall be deemed by this Corporation to be acting as partners and shall be subject to the same requirements as a partnership.

Capital credits held in joint tenancy with rights of survivorship shall be considered for priority of redemption according to the qualifying status of the youngest member of the joint tenancy or, in the event of death of one of the joint tenants, of the survivor.

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