Article X – Non-Profit Operation

Section 1. 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. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its Members through patronage or Membership.

Section 2. Patronage Capital in Connection with Furnishing Services.

In the furnishing of Services, the Cooperative’s operations shall be so conducted that all Members 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 basis, the Cooperative is obligated to account on a patronage basis to all its Memberships for all amounts received and receivable from the furnishing of Services in excess of operating costs and expenses properly chargeable to the Memberships for the furnishing of Services. Examples of operating costs and expenses properly chargeable in connection with the furnishing of Services include, but are not limited to, those for maintenance, operating charges, upkeep, repairs, interest charges on bonds or other obligations; to provide a sinking fund for the liquidation of bonds or other evidences of indebtedness; to provide adequate funds to be used as working capital, as well as funds for making extensions and replacements; for the payment of any taxes that may be assessed against the Cooperative or its property; and the maintenance of a reserve account for the aforementioned purposes.
Amounts paid to the Cooperative for Services in excess of the operating costs and expenses for the furnishing of such Services shall be returned to the Members on a pro rata basis according to the amounts paid by each Membership for such Services. Such amounts shall be returned to the Members, either in cash or as an abatement of current charges at the discretion of the Board. The Cooperative is obligated to pay by credits to a capital account for each Membership all such amounts in excess of operating costs and expenses on a book basis as defined by Generally Accepted Accounting Principles (GAAP.) 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, greater than $10, so furnished by each Membership is clearly reflected and credited in an appropriate record to the capital account of each Membership, and the Cooperative shall within a reasonable time after the close of the fiscal year notify each Membership of the amount of capital so credited to his account. All such amounts credited to the capital account of any Membership and the Cooperative, shall have the same status as though they had been paid to the holders of the Membership in cash in pursuance of a legal obligation to do so and the Membership had then furnished the Cooperative corresponding amounts for capital.
All non-operating margins, except those derived from furnishing goods other than Services, shall, insofar as permitted by law, be used to offset any losses during the current or any prior fiscal year and to the extent not needed for that purpose either
1. Allocated to the Memberships on a patronage basis and any amount so allocated shall be included as part of the capital to be allocated to the accounts of the Memberships in an equitable manner as approved by the Board; or
2. Used to establish and maintain a non-operating margin reserve not assignable to the Members prior to dissolution of the Cooperative.
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 Memberships. If, at any time prior to dissolution or liquidation, the Board shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital then credited to the account of each Membership may be retired in full or in part. Any such retirements of capital shall be made at the discretion of the Board. In no event, however, may any such capital be retired unless, after the proposed retirement, the capital of the Cooperative shall equal at least 40% of the total assets of the Cooperative.
Capital credited to the account of each Membership shall be assignable only on the books of the Cooperative, pursuant to written instruction from the assignor and only to successors in interest or successors in occupancy in all or a part of such Membership’s premises served by the Cooperative unless the Board, acting under policies of general application, shall determine otherwise.
Death of Members.
1. Notwithstanding any other provision of these By-Laws, the Board, at its discretion, shall have the power at any time upon the death of any Member, if the legal representatives of the Member’s estate shall request in writing that the capital to any such Member be retired prior to the time such capital would otherwise be retired under the provisions of these By-Laws, to retire capital credited to any such Member immediately upon such terms and conditions as the Board, acting under policies of general application, and the legal representatives of such Member’s estate shall be agreed upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby.
2. In the event of the death of a Member who was a natural person, the duly appointed executor of such Member’s estate may make a written request or be requested in writing by the Cooperative to retire all assigned Capital Credits due such Member at the time of death providing such request is approved by the Board and such retirement does not jeopardize the financial condition of the Cooperative.
3. It shall be the responsibility of the person making or accepting such request to provide the Cooperative with necessary documents establishing date of death of the Member and establishing such person as the executor or administrator of deceased Members estate or otherwise entitled to such credits.
4. The executor in making or accepting such a request shall agree to and thereby irrevocably gift any unassigned Capital Credits earned prior to the date of death to Cooperative. Such gift shall become the property of the Cooperative and shall not be reassigned to any other Member. The executor shall further agree that any and all unpaid claims of the deceased Member shall be deducted from the balance of all assigned Capital Credits due the Member.
5. In the event the executor or the Board elect to not accept a request for payment of assigned Capital Credits, such Capital Credits shall be retained by the Cooperative and distributed in accordance with the By-Laws of the Cooperative.
Dissolution of Entity. In the event of the dissolution of an Entity that holds a Membership, a request may be made for the distribution of assigned Capital Credits upon submission of legal evidence that such Entity no longer exists and indicating to whom distribution shall be made. All requests must be approved by the Board, in its sole discretion, and shall not in the opinion of such Board jeopardize the financial condition of the Cooperative. Unassigned Capital Credits due at the time of the request shall be considered an irrevocable gift to the Cooperative.
Termination of Membership Held by Multiple Members. In the event of the termination of a Membership that is held by multiple Members, a request executed by all Members holding such Membership may be made for the distribution of assigned Capital Credits and indicating to whom distribution shall be made. All requests must be approved by the Board, in its sole discretion, and shall not in the opinion of such Board jeopardize the financial condition of the Cooperative. Unassigned Capital Credits due at the time of the request shall be considered an irrevocable gift to the Cooperative.
All requests approved by the Board shall be distributed within 90 days from the date of request.
Unclaimed Cash Retirements of Capital Credits.

1. Notwithstanding any other provision of the By-Laws or other provision of the Membership Certificate, if any Member or former Member, on behalf of the Membership he or she holds, fails to claim any cash retirement of Capital Credits or other payment from the Cooperative to the respective Membership (including, without limitation, refunds, deposits, Membership fees, account balances, or book equity) (collectively, “Unclaimed Cash”) within 2 years after payment of the same has been made available to the Membership, or as otherwise provided by Ind. Code § 8-1-17-13, as amended from time to time, the Board may proceed to recover the Unclaimed Cash for the Cooperative. To recover the Unclaimed Cash, the Cooperative shall give public notice in a newspaper of general circulation published in White and Pulaski counties of the name of each Membership entitled to claim the Unclaimed Cash; and if such Unclaimed Cash is not claimed at the office of the Cooperative within 30 days of the notice, the funds shall be deemed forfeited by the respective Membership to the Cooperative.
2. At the discretion of the Board, the Unclaimed Cash shall be credited to retained capital as an unallocated reserve and administered by the Board in its sole discretion. Failure to claim any such payment within the meaning of this section shall include the failure of such Member or former Member to cash any check mailed to him or her by the Cooperative at the last address furnished by him or her to the Cooperative within 2 years from the date of such check, or as otherwise provided by Ind. Code § 8-1-
  17- 13, as amended from time to time.
3. Any Unclaimed Cash shall not be considered income for the purpose of determining Capital Credits in the year received.