The Corporation may not sell, mortgage, lease or otherwise dispose of or encumber all or any portion in excess of 7% of its total assets unless such sale, mortgage, lease or other disposition or encumbrance is authorized at a meeting of the members of the Corporation, by the affirmative vote of not less than 2/3 of all the members of the Corporation, and unless the notice of such proposed sale, mortgage, lease or other disposition or encumbrance shall have been contained in the notice of the meeting; provided, however, that notwithstanding anything herein contained, the Board, without authorization by the members of this Corporation, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust on, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the Corporation, whether acquired or to be acquired and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the Board shall determine, to secure any indebtedness of the Corporation to the following entities:
- The United States of America or any instrumentality or agency thereof; or
- To a national financing institution, organized on a cooperative plan, in which the Corporation holds membership, for the purpose of financing its members’ programs, projects, and undertakings; or
- To the Rural Telephone Finance Cooperative, the National Rural Utilities Cooperative Finance Corporation, or any other financing institution organized for the benefit of rural utility systems; or
- To any bank or other financial institution or organization; provided further, that the Board may, on the authorization of a majority of these members of the Corporation present at a meeting of the members thereof, sell, lease, or otherwise dispose of all or a substantial portion of its property to another rural telecommunication cooperative corporation or foreign corporation doing business in the Commonwealth of Kentucky pursuant to the Act under which this Corporation is incorporated. Supplementary to the foregoing paragraph and any other applicable provisions of law or these Bylaws, no sale, lease-sale, exchange, transfer, or other disposition within a single calendar year of the physical plant of the Corporation with net value in excess of 7% of the Cooperative’s total assets, based upon the most recent audit of the Corporation, shall be authorized except In conformity with the following:
- If the Board looks with favor upon any proposal for such sale, lease, lease-sale, exchange, transfer, or other disposition, it shall first cause three independent, non-affiliated appraisers, experts in such matters, to render their individual opinions as to the value of the Corporation with respect to such a sale, lease, lease-sale, exchange, transfer or other disposition and as to any other terms and conditions which should be considered. The three such appraisers shall be designated by a District Court Resident Judge for the Judicial District in Kentucky in which the Cooperative’s headquarters are located. If such a Judge refuses to make such designations, they shall be made by the Board.
- lf the Board after receiving such appraisals (and other terms and conditions which are submitted, if any) determines that the proposal should be submitted for consideration by members, it shall first give every other rural telecommunication cooperative corporately sited and operating in Kentucky (which has not made such an offer for such sale, lease, lease-sale, exchange, transfer or other disposition) an opportunity to submit competing proposals. Such opportunity shall be in the form of a written notice to such rural telecommunications cooperatives, which notice shall be attached to a copy of the proposal that the Corporation has already received and copies of the respective reports of the three appraisers. Such rural telecommunications cooperatives shall be given not less than 30 days during which to submit competing proposals, and the actual minimum period within which proposals are to be submitted shall be stated in the written notice given to them.
- If the Board then determines that favorable consideration should be given to the initial or any subsequent proposal, which has been submitted to it, it shall so notify the members not less than 60 days before noticing a special meeting of the members thereon, or, if such be the case, the next annual members meeting, expressing in detail each of any such proposals, and shall call a special meeting of the members for the consideration thereof and action thereon, which meeting shall be held not less than 10 nor more than 30 days after the giving of notice thereof to the members: Provided, that consideration and action by the members may be given at the next annual meeting if the Board so determines and if such annual meeting is held not less than 10 nor more than 30 days after the giving of notice of such meeting.
- Any 50 or more members, by so petitioning the Board not less than 30 days prior to the date of such special or annual meeting, may cause the Corporation, with the cost to be borne by the Corporation, to mail to all members any opposing or alternative positions which they may have to the proposals that have been submitted or any recommendations that the Board has made. The provisions of this Article shall not apply to a sale, lease, lease-sale, exchange, transfer, or other disposition to one or more rural telecommunications cooperatives if the substantive or actual legal effect thereof is to merge or consolidate with such other one or more rural telecommunications cooperatives.
- The Corporation has established an investment account or accounts funded by the proceeds of the sale of its interest in a cellular telephone business, the income from which will be used to defray the costs of operation of the Corporation. It is the intention to preserve the principal as long as possible to ensure the continuation of the services of the Corporation. Therefore any dispersal from or expenditure of principal from the investment account (s) from the sale of the cellular phone business shall require the vote of 2/3 of the Board of Trustees.
The foregoing provisions of this Article shall not apply to prohibit or limit the Corporation from entering into any mortgage or security agreement or other financial contracts approved by the Board.
(July 30. 1987; January 25, 1990; April 26, 2018; March 25, 2021)