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BYLAWS OF THE EAST KAUAI WATER USERS' COOPERATIVE

A Hawaii Agricultural Cooperative (HRS Chapter 421)

 

TABLE OF CONTENTS

ARTICLE 4. DIRECTORS.


4.01. Powers. Subject to the limitations stated in the Articles, these Bylaws and Hawaii Revised Statutes ("HRS") Chapter 421, and subject to the duties of Directors as prescribed by HRS Chapter 421, all corporate powers shall be exercised by or under the direction of, and the business and affairs of the Corporation shall be managed by, the Board of Directors. The individual Directors shall act only as members of the Board of Directors, and individual Directors shall have no power as such. Without prejudice to the generality of the foregoing the Board of Directors shall have power and duty:


A. To exercise for the Corporation all powers, duties and authority vested in or delegated to this Corporation not reserved to the membership by other provisions of these Bylaws or the Articles;

B. To declare that a board member of the Board of Directors may be removed for cause by the members of the Corporation in the event such board member shall be absent from three (3) consecutive regular meetings of the Board of Directors;

C. To employ and remove all agents, employees, independent contractors or such other persons as they deem necessary, prescribe their duties and fix their compensation;

D. To cause to be kept a complete record of all its acts and corporate affairs and to present a statement thereof to the members at the annual meeting of the members or at any special meeting, when such statement is requested in writing by members representing one-tenth (1/10) of the voting interests of the members;

E. To supervise all officers, agents and employees of this Corporation, and to see that their duties are properly performed;

F. As more fully provided herein,

(1) to prepare the annual budget and the proposed assessment against each Lot at least sixty (60) days in advance of the Annual Meeting;

(2) to send written notice of each assessment to every Lot Owner subject thereto at least thirty (30) days in advance of the date when each assessment is due;

G. To issue, or to cause an appropriate officer to issue, upon demand by a person, a certificate setting forth whether an assessment has been paid. A reasonable charge may be made by the Board for the issuance of these certificates. Such certificate shall be conclusive evidence of any assessment therein stated to have been paid;

H. To procure and maintain adequate liability insurance, and to procure adequate hazard insurance on any property owned by the Corporation; and

I. To cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate.


4.02. Number and Eligibility of Directors.

A. Regular Members. The Board of Directors shall consist of at least three (3) but no more than nine (9) Directors until changed by a Bylaw duly adopted amending this Section 4.02. The initial number of Directors shall be nine (9) and may be hereinafter fixed within these limits by the Board of Directors. Every member of the Board of Directors shall be a member of the Corporation, provided that a member which is a legal entity may be represented on the Board of Directors by its duly appointed representative.

B. Ex Officio Members. The Board may appoint as ex officio members of the Board representatives of interested organizations or governmental agencies, including but not limited to: the County of Kauai; the Department of Land and Natural Resources; the Farm Bureau; the University of Hawaii Agricultural Extension Service; and the National Resource Conservation Service. Any such ex officio board members may exercise any of the rights of regular board members except that they shall have no voting rights.

4.03. Election and Term of Office.

A. Initial Term. For the first fiscal year of the Corporation, the Directors shall be as set forth in the Articles. Thereafter, each Director shall be elected for a term of one (1) year by a majority of the voting interests of the members at the Annual Meeting.

B. Regular Term. The term of a Director shall be one (1) year. A Director shall hold office until the earlier of (1) the expiration of the term for which such Director was elected and either such Director's successor is elected and qualified or the Board of Directors declares such Director's position to be vacant, or (2) the death, resignation or removal of the Director.

C. Nomination. Nomination for election to the Board of Directors shall be made by a Nominating Committee. Nominations may also be made from the floor at the annual meeting. The Nominating Committee shall consist of a Chairman, who shall be a member of the Board of Directors, and two or more members of the Corporation. The Nominating Committee shall be appointed by the Board of Directors prior to each annual meeting of the members, to serve from the close of such annual meeting until the next annual meeting and such appointment shall be announced at each annual meeting. The Nominating Committee shall make as many nominations for election to the Board of Directors as it shall in its discretion determine. Such nominations may only be made by members.

D. Election. Election to the Board of Directors shall be by written ballot. At such election the members or their proxies may cast as many votes as they are entitled to exercise under the provisions of Section 2.06. The persons receiving the largest number of votes shall be elected.

4.04. Resignation. Any Director may resign at any time by giving written notice of such resignation to the President, the Secretary or the Board of Directors of the Corporation. Such resignation shall take effect at the time specified in the notice; provided, however, that if the resignation is not to be effective upon receipt of the notice by the Corporation, the Corporation must accept the effective date specified. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

4.05. Removal.

A. No Director may be removed except for good cause shown, and in such case only by a vote of two-thirds (2/3) of the voting interests of the members.

B. No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of such Director's term of office.

C. If any Director misses three (3) or more consecutive Board meetings without being excused from attendance by the Board for good cause, such non-attendance shall be grounds for the good cause removal of that Director under sub-section 4.05.A. above.


4.06. Vacancies.

A. A vacancy in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any Director or if the authorized number of Directors is increased or if the Board of Directors declares vacant the position of any Director whose term has expired.

B. Vacancies on the Board of Directors may be filled by a majority vote of the Directors then in office, whether or not less than a quorum, or by a sole remaining Director. The term of a Director so elected shall be the unexpired portion of the term of the Director being replaced.

4.07. Annual Meeting. The annual meeting of the Board of Directors shall be held at such time and place as the Board shall designate. At such annual meeting, the Board of Directors shall transact such business as may be appropriate. The first annual meeting shall take place not later than one (1) year after the date of the incorporation of the Corporation.

4.08. Regular Meetings. The Board of Directors may establish the time and place for the holding of regular meetings of the Board of Directors.

4.09. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the President or any two (2) Directors of the Corporation.

4.10. Place of Meetings. Meetings of the Board of Directors shall be held at any place within the State of Hawaii which may be designated in the notice of the meeting, or, if not stated in the notice or if there is no notice, designated by resolution of the Board of Directors. In the absence of such designation, meetings of the Board of Directors shall be held at the principal office of the Corporation.

4.11. Telephonic Meetings. Members of the Board of Directors may participate in a regular or special meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another. Participation in a meeting pursuant to this Section 4.11 constitutes presence in person at such meeting.

4.12. Notice of Meetings. Reasonable notice of the time and place of all meetings of the Board of Directors shall be delivered personally to each Director or sent to each Director by certified mail, return receipt requested, at least twenty-five (25) days prior to the time of the holding of the meeting. For purposes of determining whether such twenty-five (25) day requirement has been satisfied, the day of the meeting and the day notice is given shall each be counted as one (1) full day regardless of the time of the day the meeting is held or the notice is given. Each notice shall be deemed given to a Director when deposited, with postage thereon prepaid, in the United States post office and addressed to such Director at the address designated by him or her for that purpose or, if none is designated, at his or her last known address. Such notice may be given by the Secretary of the Corporation or by the persons who called said meeting. Such notice need not specify the purpose of the meeting, unless the meeting is to consider the removal of a Director or an amendment to the Bylaws, or as may otherwise be required by these Bylaws. Notice shall not be necessary if appropriate waivers, consents or approvals are filed in accordance with Section 4.13 of these Bylaws.

4.13. Waiver of Notice. Notice of a meeting need not be given to any Director who signs a waiver of notice, or a written consent to holding the meeting or an approval of the minutes of the meeting, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Director. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Neither the business to be transacted nor the purpose of any regular or special meeting of the Directors, or of a committee of Directors, need be specified in any such waiver, consent or approval.

4.14. Action Without Meeting. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, if all members of the Board shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board. Such action by written consent shall have the same force and effect as a unanimous vote of such Directors.

4.15. Quorum. A majority of the authorized number of Directors shall constitute a quorum for the transaction of business. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be the act of the Board of Directors, unless the Articles, these Bylaws, or the Hawaii Nonprofit Corporation Act specifically requires a greater number. In the absence of a quorum at any meeting or the Board of Directors, a majority of the Directors present may adjourn the meeting as provided in Section 4.16 of these Bylaws. A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of enough Directors to leave less than a quorum, if any action taken is approved by at least a majority of the required quorum for such meeting.

4.16. Adjournment. Any meeting of the Board of Directors, whether or not a quorum is present, may be adjourned to another time and place by the vote of a majority of the Directors present. Notice of the time and place of the adjourned meeting need not be given to absent Directors if said time and place are fixed at the meeting adjourned; provided, however, that if the meeting is adjourned for more than twenty-four (24) hours, notice of any adjournment to another time and place shall be given, prior to the time of the adjourned meeting, to the Directors who were not present at the time of the adjournment.

4.17. Inspection Rights. Every Director and member shall have the absolute right at any time to inspect, copy and make extracts of, in person or by agent or attorney, all books, records and documents of every kind and to inspect the physical properties of the Corporation.

4.18. Fees and Compensation. Directors shall not receive any compensation for their services as Directors. Directors may be reimbursed in such amounts as may be determined from time to time by the approval of eighty percent (80%) of the Board of Directors for expenses paid while acting on behalf of the Corporation; provided, however, that no Director shall be compensated for travel expenses to attend a Board or membership meeting. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving compensation therefore, provided disclosure is first made by written report to the members at the annual meeting, as part of the annual report.

4.19. General Terms Applicable to Meetings of the Board of Directors.

A. All meetings of the Board of Directors, other than executive sessions involving pending or threatened litigation between the Corporation and any member or the Board of Directors and any member, shall be open to all members. Members who are not on the Board of Directors may participate in any deliberation or discussion, other than executive sessions, unless a majority of a quorum of the Board of Directors votes otherwise.

B. The Board of Directors shall meet at least once each year.

C. Minutes of the meetings of the Board of Directors shall include the recorded vote of each Board member on all motions except motions voted upon in executive session.

D. The Board of Directors, with the approval of a majority of a quorum of its members, may adjourn any meeting and reconvene in executive session to discuss and vote upon matters concerning personnel, litigation in which the Corporation is or may become involved, or as may be necessary to protect the attorney-client privilege of the Corporation. The general nature of any business to be considered in executive session shall be first announced in the regular session.

E. No Board member shall vote by proxy at Board meetings.

F. A Director who has a conflict of interest on any issue before the Board shall not be allowed to vote on such issue.

TABLE OF CONTENTS

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