By-Laws

of Farmers Mutual Telephone Company

JANUARY 16, 2018

ARTICLE 1. – OFFICES

1.1 Principal Office. The principal office of the Company in the State of Idaho shall be located in the City of Fruitland, County of Payette. The Company may have such other offices, either within or without the State of Idaho, as the Board of Directors may designate or as the business of the Company may require from time to time.

1.2 Registered Office. The registered office of the Company required by the Idaho Nonprofit Corporation Act to be maintained in the State of Idaho may be, but need not be, identical with the principal office in the State of Idaho, and the address of the registered office may be changed from time to time by the Board of Directors.

ARTICLE 2. MEMBERS

2.1 Requirements for Membership. Any person, firm, association, organization, corporation, entity, or body politic or subdivision thereof shall become a member of the FARMERS MUTUAL TELEPHONE COMPANY (herein called the “Company” and/or “Co-op”) for the purpose obtaining end-user communication services provided by or through the Company (Co-op) upon:

(1) Making a written Application for membership; subscribing to retail service; and receiving telephone service (dial tone) or internet via the Company’s DSL, fiber optics or fixed wireless plant inside the Co-op ILEC study area; and,

(2) Agreeing to use services furnished by the Company (Co-op) when such services shall be available through its facilities, solely for their personal use and benefit and not for resale; and, to pay for the same in accordance with rates or tariffs as established from time to time by the Board, as well as to pay all other charges for installation, equipment and/or services that the member uses and/or the Company is obligated by law or contract to collect; and,

(3) Agreeing to comply with, and be bound by, the Articles of Incorporation and the By-Laws of the Company (Co-op) and any and all Policies, Rules and Regulations adopted by the Board of Directors, as the same now are, or as they may subsequently be amended or adopted; and,

(4) Paying a refundable Membership Fee of $25.00.

2.2 Competitive Local Exchange Carriers and Interexchange Carriers. Competitive Local Exchange Carriers and/or Interexchange Carriers who participate with the Company in the provision of services to members and/or other patrons are neither members nor patrons of the Company by virtue of division of revenue, other services, and/or contracts. And furthermore, their customers are not members of the Company.

2.3 Member Purchase and Issuance. Each member shall purchase only one (1) membership in the Company for each legal entity. Each membership shall be entitled to one vote on any matter to come before the membership of the Company (Co-op) regardless of the number of lines that member may have in use or the amounts of services or goods that member may purchase from or through the Company (Co-op). No membership shall be transferable except as provided by these By-Laws.

2.4 Classification of Member Business. In the discretion of the Board of Directors of the Company, the Company (Co-op) may find it necessary to separately classify certain cooperative functions, groups of members, or customers so as to more properly account for costs of service and patronage margins supplied by them. In doing so, the Company (Co-op) may consider a variety of relevant factors such as the cost of rendering service, the terms and conditions of certain types of service, the terms of agreements with members or customers, and the obligations of the parties involved. Accordingly, patronage capital credits may accrue at a different rate for certain classifications of members or for different types of service, resulting in some classifications producing no margins for allocation while other classifications produce allocable margins. If activities and margins are broken down in this manner, each member’s capital credit allocation shall show the patronage capital allocated for each class of business.

2.5 Time Sharing or Interval Ownership. Each time sharing or interval ownership premises is considered as a single member. The owner of seasonal recreational and short-interval rental properties will be deemed to hold the membership.

2.6 Joint Ownership of Membership. Persons who qualify to be members may hold a joint membership in the Company (“Joint Membership”). A Joint Membership may consist only of any two individuals occupying the same location to or for which the Company provides or will provide such services, each of whom qualifies to be a member (“Joint Owner”).

(1) There will be one vote per Joint Membership. The vote of either Joint Owner separately or both Joint Owners jointly shall constitute one vote; and,

(2) The presence at a meeting of either or both Joint Owners shall be regarded as presence of the Joint Membership and shall constitute a joint waiver of notice of the meeting by both of the Joint Owners; and,

(3) Notice to either Joint Owner shall constitute notice to both Joint Owners. A waiver of notice signed by either or both Joint Owners shall constitute a joint waiver; and,

(4) The signature of either Joint Owner shall be sufficient and shall bind both Joint Owners; and,

(5) Expulsion of either shall terminate the Joint Membership and such Joint Membership shall be converted to the individual membership of the remaining Joint Owner, if any; and,

(6) Withdrawal of either shall terminate the Joint Membership and such Joint Membership shall be converted to the individual membership of the remaining Joint Owner, if any; and,

(7) Either Joint Owner, but not both, may be elected or appointed as an Officer or Board member if individually qualified; and,

(8) Upon the death of either Joint Owner, such Joint Membership shall be converted to the individual membership of the surviving Joint Owner, if any. However, the estate of the deceased Joint Owner shall not be released from any debt due the Company.

2.07 Termination of Membership.

(1) Any member may withdraw from the Company upon compliance with such uniform terms and conditions as the Board may prescribe; and,

(2) The Board may, by the affirmative vote of not less than two-thirds of all of the members of the Board, terminate the membership of any member who ceases to purchase services from the Company, fails to make payment, or fails to comply with any of the provisions of the Articles of Incorporation, By-Laws or any Policies, Rules and/or Regulations adopted by the Board. But, only if such member shall have been given not less than fifteen (15) days’ prior written notice of the expulsion, suspension or termination and the reasons therefore, and such member shall have an opportunity to be heard, orally or in writing, not less than (5) days before the effective date of the expulsion, suspension or termination by either the General Manager of the Company or by another person authorized to decide that the proposed expulsion, suspension or termination not take place; and,

(3) Upon the termination of the membership of a member or withdrawal, death, cessation of service or expulsion, the membership of such member shall thereupon terminate and will be so recorded on the records of the Company.

2.08 Rights on Termination of Membership.

1. In case of termination of membership in any manner, the Company shall refund to the member (or their fiduciary) within a reasonable time, the $25.00 paid for the membership; provided, however, that the Company may deduct from the amount paid for the membership, the amount of any debts or obligations owed by the member to the Company; and,

2. Termination of membership in any manner shall not release a member (or their estate) from any debts due to the Company nor do unpaid bills release a member from his obligations under the Articles of Incorporation, these By-Laws, or any Policies, Rules and Regulations approved and/or adopted by the Board; and,

3. All rights and interest of such member in the property and assets of the Company shall automatically terminate, except for such member’s interest in the Company’s capital as evidenced by credit(s) in that member’s capital credits account. Any indebtedness or obligations owing to the Company by a terminated member may be offset by the Company against any credits in that member’s capital credits account.

2.9 Certificates for Memberships. No certificates representing memberships in the Company shall be issued by the Company. A list of memberships shall be maintained by the Company at the offices of the Company. The name and address of the person, business, firm, association, organization, corporation, entity, or body politic or subdivision thereof to whom the membership is issued, with the date of issue, and the membership identification number shall be entered on the membership records of the Company. Except for joint memberships, there shall be no transfers of membership. A new member shall make an Application for membership and shall pay a membership fee.

2.10 Annual Meeting. The Annual Meeting of the members shall be held on such day in the first three months of each year, at such reasonable time and place, as the Board of Directors may determine and which shall be designated in a notice of the meeting, for the purposes of electing Directors, passing upon reports for the previous fiscal year, and for the transaction of such other business as may come before the meeting. Failure to hold the Annual Meeting as designated in these By-Laws shall not work a forfeiture or dissolution of the Company nor affect the validity of any corporate action.

2.11 Special Meetings. Special Meetings of the members, for any purpose or purposes, unless otherwise prescribed by statute, may be called at any time by the President or by a resolution of the Board of Directors or upon a written request signed by any three (3) Board members. A Special Meeting shall be called by the Secretary upon the request therefore, in writing, signed by the holders of not less than one-tenth (1/10th) of all outstanding memberships of the Company entitled to vote at the meeting, stating the business to be brought before the meeting; and, it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. No business other than that specified in the notice shall be considered at such meeting.

2.12 Place of Meeting. The Board of Directors may designate any reasonable place as the place of meeting for any Annual or Special Meeting. If no designation is made, the place of meeting shall be the principal office of the Company in the State of Idaho.

2.13 Notice of Meeting of Members. Written or printed notice stating the place, day and hour of the meeting and, in case of a Special Meeting or an Annual Meeting at which business requiring special notice is to be transacted, the purpose or purposes for which the meeting is called, shall (unless otherwise prescribed by statute) be delivered not less than ten (10) nor more than fifty (50) days before the date of the meeting, either personally or by mail, by or at the direction of the Board of Directors, the President, the Secretary, or the Officer calling the meeting, to each member of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the member at their address as it appears on the records of the Company, or at such other last known address of which the Company may have notice, with postage thereon prepaid. The incidental or unintentional failure of any member to receive notice of any Annual or Special Meeting shall not invalidate any action which may be taken by the members at any such meeting.

2.14 Entry of Notice. Whenever any member entitled to vote has been absent from any meeting of members, either Annual or Special, an entry in the minutes to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of such meeting was given to such member, as required by law and by the By-Laws of the Company.

2.15 Postponement of a Meeting of Members. In the event of inclement weather or the occurrence of a catastrophic event, the meeting of the members may be postponed by the President, Secretary or Board of Directors. Notice of the adjourned meeting shall be given in any media of general circulation or broadcast serving the area.

2.16 Adjourned Meetings and Notice Thereof. Any members’ meeting, Annual or Special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum, no other business may be transacted at any such meeting.

When any members’ meeting, either Annual or Special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as above stated, it shall not be necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken.

2.17 Closing of Membership Records or Fixing of a Record Date. For the purpose of determining members entitled to notice of or to vote at any meeting of members or any adjournment thereof, or in order to make a determination of members for any other proper purpose, the Board of Directors of the Company may provide that the membership records shall be closed for a stated period but not to exceed, in any case, fifty (50) days. If the membership records shall be closed for the purpose of determining members entitled to notice of or to vote at a meeting of members, such records shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the Membership records, the Board of Directors may fix in advance a date as the record date for any such determination of members, such date in any case to be not more than fifty {50) days and, in case of a meeting of members, not less than ten (10) days prior to the date on which the particular action, requiring such determination of members, is to be taken. If the membership records are not closed and no record date is fixed for the determination of members entitled to notice of, or to vote at, a meeting of members, the date on which notice of the meeting is mailed shall be the record date for such determination of members. When a determination of members entitled to vote at any meeting of members has been made as provided in this section, such determination shall apply to any adjournment thereof.

2.18 Voting of Memberships. Each member shall be entitled to one vote on each matter voted on by members at a meeting of members at which a quorum is present (either in person or by proxy). Except as otherwise provided by law, the Articles of Incorporation or these By-Laws, all questions shall be decided by a vote of a majority of the votes cast thereon, in person or by proxy, at the meeting. It shall be the duty of the presiding Officer to call for a vote by ballot on any matter which he believes will be contested.

2.19 Voting Record. The Officer or agent having charge of the membership records shall make a complete record of the members entitled to vote at each meeting of members or any adjournment thereof, arranged in alphabetical order, with the address of each. Such record shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any member during the whole time of the meeting for the purposes thereof. Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting.

2.20 Quorum. Ten per cent (10%) of the memberships of the Company entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of members. If a quorum is present at a meeting, a majority of the memberships so represented may adjourn the meeting from time to time. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. The members present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough members to leave less than a quorum. At all meetings of the members, whether a quorum be present or not, the Secretary shall affix to the minutes of the meeting or, incorporate therein by reference, a list of those members who were registered as present in person.

2.21 Proxies. At any meeting of members or any adjournment thereof, any member may vote in person or by a proxy executed in writing by the member or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the Company before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy.

2.22 Voting of Memberships by Certain Holders
. Memberships standing in the name of another corporation may be voted by such Officer, agent or proxy as the By-Laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such other corporation may determine.

A membership held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such membership into his name. A member ­ship standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote a membership held by him without a transfer of such membership into his name or the name of the trust.

A membership standing in the name of a receiver may be voted by such receiver, and a membership held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name, if authority so to do be contained in an appropriate Order of the court by which such receiver was appointed.

A member whose membership is pledged shall be entitled to vote such membership until the membership has been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the membership so transferred.

A membership held by another corporation if a majority of the shares entitled to vote for the election of Directors of such other corporation are held by the Company, shall be voted at any meeting or counted in determining the total number of outstanding memberships at any given time for purposes of any meeting.

ARTICLE 3. RIGHTS AND LIABILITIES OF THE COMPANY AND THE MEMBERS

3.1 Service Obligations.

(1) The Company will use reasonable diligence to furnish adequate and dependable services, but it cannot and does not guarantee uninterrupted services nor will it always be able to provide every service desired by each individual member.

(2) Each member pledges to purchase all services from the Company to the extent that its services are able to meet the member’s needs and are competitively priced. Each member shall, as soon as service is available, take service from the Company. Each member shall pay therefore monthly at the rates in accordance with either established rates as fixed by the Board, or, for the services rendered by other carriers at the rates which the Company is obliged to bill and collect by contractual arrangement with other carriers. It is expressly understood that the amounts received by the Company for all services in excess of cost are furnished by members from the moment of receipt as capital, and each member shall be credited with the capital so furnished as provided in these By-Laws. However, the Company is not obligated to furnish such credits for services which are not billed and collected by the Company, even when such services are partially rendered over the facilities of the Company. Each member shall pay the above amounts owed by him to the Company as and when the same shall become due and payable.

3.2 Cooperation of the Members in the Extension of Services. The cooperation of members of the Company is imperative to the successful, efficient and economical operation of the Company. Members who are receiving or who are requesting service shall be deemed to have consented to the reasonable use of their real property to construct, operate, maintain, replace or enlarge telephone and/or communications lines, overhead or underground, including all conduit, cable, wires, surface testing terminals, markers and other appurtenances under, through, over, across, and upon any real property or interest therein owned or leased or controlled by said member for the furnishing of services to said member, or any other member, at no cost to the Company. When requested by the Company, the member does agree to execute any easement or right-of-way contract on a form to be furnished by the Company.

3.3 Nonliability of Members. The members of the Company shall not be personally liable for the debts, liabilities, or obligations of the Company.

3.4 Property Interest of Members. Upon dissolution, after:

(1) All debts and liabilities of the Company shall have been paid;

(2) All capital credits allocated and unpaid shall be retired as provided in these By-Laws; and,

(3) All membership fees shall have been repaid,

the remaining property and assets of the Company shall be distributed among all members and former members of the Company in the proportion which the allocated Capital Credits of each member and former member on the date of the payment of Capital Credits bears to the total allocated Capital Credits of all members and former members on the date of the payment of the said allocated and unpaid capital credits, unless otherwise provided by law.

ARTICLE 4. BOARD OF DIRECTORS

4.1 General Powers. The business and affairs of the Company shall be managed by a Board of Directors which shall exercise all of the powers of the Company, except such as are by law, the Articles of Incorporation, or these By-Laws conferred upon or reserved to the members.

4.2 Manner of Acting. The Directors shall in all cases act as a Board, and the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. The Directors may adopt such Rules and Regulations for the conduct of their meetings as they may deem proper a d not inconsistent with law or these By-Laws.

4.3 Number of Directors. The Board of Directors shall consist of between five (5) and seven (7) persons. The number of Directors may be changed by an amendment to these By-Laws.

4.4 Election Process and Tenure of Office. Directors shall be elected, via a form of printed secret ballot, at each Annual Meeting of members. The ballot shall list the names of the candidates nominated by the committee and by petition, with such names arranged alphabetically.

Each member of the Company present in person at the meeting, or present through proxy, shall be entitled to one vote for as many persons as there are Directors to be elected and for whose election he has a right to vote or on any issue before the meeting. The candidates receiving a plurality of votes cast for the office of Directors to be elected at such meeting shall be declared elected as Directors. Failure of an election for a given year shall allow the incumbent Directors whose director­ ships would have been voted on to hold over only until the next member meeting at which a quorum is present; provided, however, if an election of Directors shall not be held on the day designated for the Annual Meeting of members or at any adjournment thereof, a Special Meeting of the members shall be held for the purpose of electing Directors at a reasonable time thereafter.

Directors shall be elected by and from the members of the Company to serve three (3) year terms, or until their successors shall have been elected and shall have qualified; and, the terms of the Directors shall be staggered to insure continuity.

4.5 Qualifications to be Nominated, to Become, or Remain a Director. Any member of the Company (or a representative of a member which is other than a natural person), who is an adult, who has been a member for more than two hundred and forty (240) days during the last twelve (12) month period; and, who is NOT an employee of the Company or in any way financially interested in a competing enterprise or a business engaged in selling communication services or communication supplies or maintaining communication facilities shall be eligible to be nominated and elected. Provided, however, that the Board may grant exceptions for “deminimus” competing enterprise. Cancellation of membership in the Company by a Director who was a member (or by a member which is other than a natural person whom the Director represents) shall automatically disqualify the Director and create a vacancy in such Director’s office. No member (or representative of a member which is not a natural person) shall serve as a Director of the Company unless he (or the entity which he represents) is subscribing to retail service and receiving a dial tone from the Company. To remain a Director, except for reasonable cause as determined by the Board, the incumbent must attend two-thirds (2/3) or more of the regular meetings during each twelve month period beginning with the month of their election.

Upon establishment of the fact that a Director or Nominee is in violation of any of the provisions of this section, that office or nomination shall be deemed vacant. Nothing in this section shall affect in any manner whatsoever, the validity of any action taken at any meeting of the Board.

4.6 Nominations. At least forty-five (45) days prior to each Annual Meeting of members, a Nominating Committee consisting of five (5) members shall be appointed by the Board of Directors from the members, at large. No member of the Board of Directors may serve on such committee. The Nominating Committee shall meet and nominate at least one more candidate than the number of directors to be elected at the Annual Meeting of the Members of the Company. After the consent of each nominee is secured and at least thirty (30) days before the Annual Meeting of members, said committee shall prepare a list of the nominations for Directors and deliver the same to the Secretary of the Company. The Secretary shall then post the list of Nominees at the principal office of the Company.

Any twenty-five (25) or more members acting together may make other nominations by petition received at the offices of the Company not less than fifteen (15) days prior to the meeting, and the Secretary shall post such nominations at the same place where the list of nominations made by the Nominating Committee is posted. The Secretary shall mail with the notice of the meeting, or separately, but at least ten (10) days before the date of the meeting, a statement of the number of Directors to be elected and the names and addresses of the candidates, specifying separately the nominations made by the committee and the nominations made by petition, if any. The ballot to be used at the election shall list the names of the candidates nominated by the committee and the names of the candidates nominated by petition, if any.

4.7 Removal of Directors. Any member may bring charges, relating to the duties and responsibilities of his position, against a Director and, by filing with the Secretary such charges in writing together with a petition signed by at least ten (10) percent of the members, may request the removal of such Director by reason thereof. Such Director shall be informed in writing of the charges at least thirty (30) days prior to the meeting of the members at which the charges are to be considered; and he shall have the right to include in the meeting notice such Director’s answer to such charges, if such answer is received by the Secretary within five (5) days of the date of delivery of the statement of charges for removal of the Director; and he shall have an opportunity at the meeting to be heard in person or by counsel to present evidence in respect to the charges; and the person or persons bringing the charges against him shall have the same opportunity. The question of the removal of such Director shall be considered and voted upon at the meeting of the members. No Director shall be removed from office unless for cause related to the duties of such Director and by a vote of two-thirds (2/3) of the members present, in person or by proxy, who were entitled to vote for the election of the Director sought to be removed. Any vacancy created by such removal may be filled by vote of the members at such meeting without compliance with the foregoing provisions with respect to nominations.

4.8 Resignation. A Director may resign his office at any time by giving written notice to the Board, the President or the Secretary of the Company. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Board or such Officer, and the acceptance of the resignation shall not be necessary to evoke it effective. The pending vacancy may be filled before the effective date but the successor shall not take office until the effective date.

4.9 Vacancies. Except for vacancies caused by removal of a Director by the members, any vacancy occurring in the Board of Directors by death, resignation, or otherwise shall be filled promptly by the affirmative vote of a majority of the remaining Directors, though less than a quorum of the Board of Directors, at a Special Meeting which shall be called for that purpose. The Director thus chosen shall hold office for the unexpired term of his predecessor in office, and until the election and qualification of his successor. Any directorship to be filled by reason of an increase in the number of Directors may be filled by election by the Board of Directors for a term of office continuing only until the next election of Directors by the members.

4.10 Compensation. Board members shall, as determined by resolution of the Board, receive a fixed sum for each day or portion thereof spent on Company business, such as attendance at meetings, conferences and training programs or performing committee assignments when authorized by the Board. If authorized by the Board, Directors may also be reimbursed for expenses actually and necessarily incurred in carrying out such Company business or granted a reasonable per diem allowance by the Board in lieu of detailed accounting for some of these expenses. Directors, who elect to participate, may be extended various forms of liability and accident insurance as well as participation in benefits provided to employees except for benefits based on salary.

No such payments shall preclude any Director from serving the Company in any other capacity and/or entering into any contract with the Company and receiving compensation therefore.

4.11 Accounting System and Reports. The Board shall cause to be established and maintained a complete and adequate accounting system. The Board shall cause to be made by a certified public accountant a full and complete annual audit of the accounts, books and financial condition of the Company. Such audit shall be subject to inspection by any Director or member of the Company during business hours at the principal office of the Company. The Directors may authorize special audits, complete or partial, at any time and for any specified period of time.

4.12 Rules, Regulation, Rate Schedules and Contracts. The Board of Directors shall have power to make, adopt, amend, abolish and promulgate such rules, regulations, rate classifications, rate schedules, tariffs, contracts, security deposits and any other types of deposits, payments or charges, including contributions in aid of construction, not inconsistent with law or the Certificate of Incorporation or By-Laws, as it may deem advisable for the management, administration and regulation of the business and affairs of the Company or, cause such to be sub­ mitted for any appropriate governmental regulatory approval. Further, the Board of Directors may constitute itself into committees for the purpose of studying and making recommendations to the full Board of Directors in the course of its decisional processes.

4.13 Regular Meetings. A regular Annual Meeting of the Board of Directors shall be held, without any notice other than this By-Law, for the purpose of the election or appointment of Officers and for the transaction of any other business that may come before the meeting, as soon as practicable after the adjournment of the Annual Meeting of the members. Other Regular Meetings of the Board shall also be held at such times and at such places, as the Board may from time to time determine. Such Regular meetings may be held without notice other than such resolution fixing the time and place thereof. A minimum of at least ten (10) Regular Meetings shall be held each year. Unless specifically prohibited by law, meetings, Regular or Special, may be conducted through the use of conference telephone or other communications equipment by means of which all persons participating in the meetings can communicate with each other. Such participation will constitute attendance and presence in person at the meeting of the persons so participating.

4.14 Special Meetings. Special Meetings of the Board of Directors may be called by the President or by any two Board members; and, it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. The President or Board members calling the meeting shall fix the time and place within the area served by the Company for the holding of the meeting. Any business may be transacted at such meeting.

4.15 Notice. No notice need be given of any Regular Meetings of the Board. Written notice of the time, place (or telecommunications conference event) and purpose of any Special Meeting of the Board shall be delivered to each Board member either personally or by mail, or at the direction of the Secretary, or upon default in duty by the Secretary, by the President or one of the Board members calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the U.S. Mail, addressed to the Board member at their address as it appears on the records of the Company, with first-class postage thereon prepaid, at least three (3) days before the date set for the meeting. Any Director may waive notice of any meeting. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

4.16 Quorum. A majority of the Board shall constitute a quorum, provided, that if less than such majority of the Board is present at said meeting, a majority of the Board present may adjourn the meeting from time to time; and provided further, that the Secretary shall notify any absent Board members of the time and place of such adjourned meeting. The act of a majority of the Board members present and voting at a meeting at which a quorum is present shall be the act of the Board.

Board members may not vote by proxy at Regular or Special Board Meetings.

4.17 Action Without a Meeting. Any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Directors. Such consent shall have the same force and effect as a unanimous vote at a meeting. Such consent or consents shall be filed in the minute book.

4.18 Presumption of Assent. A Director of the Company who is present at a meeting of the Board of Directors at which action on any Company matter is taken, shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting, or unless he shall file their written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof, or shall forward such dissent by registered mail to the Secretary of the Company immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

4.19 Adjournment. A quorum of the Directors may adjourn any meeting of the Board of Directors, to meet again at a stated day and hour, without further notice; provided, however, that in the absence of a quorum, any Director present at any meeting of the Board of Directors, either regular or special, may adjourn from time to time until the time fixed for the next Regular Meeting.

ARTICLE 5. OFFICERS

5.1 Number and Titles. The Officers of the Company shall be a President, a Vice-President, a Secretary, a Treasurer, and such other Officers and assistant officers as may be deemed necessary by the Board of Directors, each of whom shall be elected or appointed by the Board of Directors. The offices of Secretary and Treasurer may be held by the same person. The President, Vice-President, Secretary and Treasurer shall be members of the Board of Directors.

5.2 Election and Term of Office. The Officers of the Company shall be elected annually by the Board of Directors at the Regular Meeting of the Board of Directors held after each Annual Meeting of the Members. If the election of Officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each Officer shall hold office until the first meeting of the Board of Directors following the next succeeding Annual Meeting of the members, or until a successor shall have been duly elected and shall have qualified and assumed office, or until he shall resign or shall have been removed in the manner hereinafter provided. Except as otherwise provided in these By-Laws, a vacancy in any office shall be filled by the Board for the unexpired portion of the term.

5.3 Removal of Officers and Agents by the Board. Either with or without cause, any Officer or agent elected or appointed may be removed by the Board whenever in its judgment the best interests of the Company will be served thereby. Election or appointment of an Officer or agent shall not of itself create contract rights.

5.4 Duties of Officers. The duties and powers of the Officers of the Company shall be as follows and as shall here­ after be set by resolution of the Board of Directors:

PRESIDENT. The President shall:

(1) Be the principal executive Officer of the Company and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Company;

(2) Unless otherwise determined by the members or the Board, shall preside at all meetings of the members and of the Board;

(3) Sign, with the Secretary or any other proper Officer of the Company, any deeds, mortgages, deeds of trust, notes, bonds, contracts, or other instruments authorized by the Board of Directors to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these By-Laws to some other Officer or agent of the Company, or shall be required by law to be otherwise signed or executed; and,

(4) In general shall perform all duties incident to the Office of President and such other duties as may be prescribed by the Board of Directors from time to time.

VICE-PRESIDENT. In the absence of the President, or in the event of his inability or refusal to act, the Vice-President shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Vice-President shall perform such other duties as from time to time may be assigned to him by the President or by the Board of Directors.

SECRETARY. The Secretary shall be responsible for:

(1) Seeing that the minutes of the proceedings of the members and of the Board of Directors are kept in one or more books prepared for that purpose;

(2) Seeing that all notices are duly given in accordance with the provisions of these By-Laws or as required by law;

(3) The safekeeping of the Company books and records, the execution of documents on behalf of the Company which is duly authorized in accordance with these By-Laws;

(4) Seeing that a register of the names, alphabetically arranged, of all the persons who are members of the Company, showing their post office addresses and their membership number, is kept at the principal office of the Company;

(5) Causing to be kept on file at all times a complete copy of the Articles of Incorporation and By-Laws of the Company containing all amendments thereto and, at the expense of the Company, cause to be furnished a copy of these By-Laws and of all amendments thereto to each member;

(6) In general, performing all duties incident to the Office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors.

TREASURER. The Treasurer shall be responsible for:

(1) Custody of all funds and securities of the Company;

(2) The receipt of and the issuance of receipts for all monies due and payable to the Company and for the deposit of all such monies in the name of the Company in such bank or banks or other depositaries as shall be selected in accordance with the provisions of these By­Laws; provided, however, that the Treasurer shall have authority, with the approval of the Board, to delegate to the General Manager the authority to appoint employees of the Company to actually carry out the responsibilities set forth in this Section;

(3) Directing the making, signing and endorsing in the name of the Company all checks, drafts, notes, and other orders for the payment of money, and the paying out and disposing of such under the direction of the Board of Directors; and,

(4) The general performance all of the duties incident to the Office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors; provided, however, with respect to the duties and responsibilities of the Treasurer, the Company shall indemnify and hold the Treasurer harmless against any and all losses, claims and/or damages which may be asserted against the Treasurer, in their official capacity, unless such claim is a result of an act intentionally committed or omitted by the Treasurer resulting in a loss to the Company.

GENERAL MANAGER. The Board shall appoint a General Manager, who shall perform such duties as the Board may from time to time require and shall have authority as the Board may from time to time vest in him.

OTHER OFFICERS. Other officers shall perform such duties and have such powers as may be assigned to them by the Board of Directors.

5.5 Vacancies. A vacancy in any Office because of death, resignation, removal, disqualification or otherwise, shall be filled, for the unexpired portion of the term, by the Board of Directors, either at a Regular Meeting or at a meeting specially called for that purpose.

5.6 Compensation. The powers, duties and compensation of Officers, agents and employees shall be fixed or approved by the Board from time to time, and no Officer shall be prevented from receiving such salary by reason of the fact that he is also a Director of the Company.

5.7 Bonds. The Board may require the Treasurer and any other Officer, agent or employee of the Company charged with responsibility for the custody of any of its funds or property to give bond in such sum and with such surety as the Directors shall determine. The Directors in their discretion may also require any other Officer, agent or employee of the Company to give bond in such amount and with such surety as it shall determine. The costs of all such bonds shall be borne by the Company.

5.8 Reports. The Company shall submit at each Annual Meeting of the members reports covering the business of the Company for the previous fiscal year. Such reports shall set forth the condition of the Company at the close of such fiscal year.

ARTICLE 6. FINANCIAL TRANSACTIONS

6.1 Negotiable Instruments. All negotiable instruments of the Company shall be made in the name of the Company and shall be signed by such Officer or Officers, or agents as the Board of Directors shall from time to time by resolution direct.

6.2 Contracts. Except as otherwise provided in these Bylaws, the Board may authorize any Officer or Officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Company, and such authority may be general or confined to specific instances.

6.3 Loans. No loans shall be contracted on behalf of the Company and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

6.4 Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, and all notes, bonds, or other evidences of indebtedness issued in the name of the Company, shall be signed by such Officer or Officers, agent or agents, employee or employees of the Company and in such manner, as shall from time to time be determined by resolution of the Board of Directors.

6.5 Deposits. All funds of the Company, not otherwise employed, shall be deposited from time to time to the credit of the Company in such banks, trust companies, or other depositaries or institutions as the Board may authorize and select.

6.6 Membership In Other Organizations. The Company may become a member or purchase stock in other profit or non-profit corporations, organizations, associations, partnerships or joint ventures when the Board finds that the general or long-term interests of its membership will be served by such investments or participation.

6.7 Shares of Other Corporations. Whenever the Company is the holder of shares of any other corporation, any right or power of the Company as such member (including the attendance, acting and voting at member’s meetings and execution of waivers, consents, proxies or other instruments) may be exercised on behalf of the Company by the President or such other person as the Board may authorize.

6.8 Sale of Assets Other Than in the Regular Course of Activities. The Company may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property, with or without the goodwill, other than in the usual and regular course of its activities on the terms and conditions and for the consideration determined by the Board of Directors; provided that the proposed transaction is authorized and approved by sixty­six and two-thirds percent (66 2/3%) of the Board, and by sixty-six and two-thirds percent (66 2/3%) of the total voting power of the Company, voting in person or by proxy.

6.9 Sale of the Company. The Company may be sold, leased, exchanged, or otherwise disposed of, with or without the goodwill, upon the terms and conditions and for the consideration determined by the Board of Directors; provided that the proposed transaction is authorized and approved by sixty­six and two-thirds percent (66 2/3%) of the Board and by sixty-six and two-thirds percent (66 2/3%) of the total voting power of the Company, voting in person or by proxy.

ARTICLE 7. NON-PROFIT OPERATION

7.1 Interest or Dividends on Capital Prohibited. The Company shall at all times be operated on a co-operative nonprofit basis for the mutual benefit of its members. No interest or dividends shall be paid or payable by the Company on any membership issued by the Company or on any capital furnished by its members.

7.2 Patronage Capital in Connection with Furnishing Services. In the furnishing of telecommunications and information services to members, the Company’s (Co-op’s) operations shall be so conducted that all members will, through their patronage, furnish capital for the Company (Co-op) through their use of end user services provided by or through the Company (Co­op). This use of end user services provided by or through the Company (Co-op) constitutes patronage. In order to induce patronage and to insure that the Co-op will operate on a non­ profit basis, the Company (Co-op) is obligated to account on a patronage basis to its members for all amounts received and receivable from the furnishing of telecommunication and information services (including state and interstate access and related services) conducted with or for members and may account on a patronage basis to its members for all amounts received and receivable from other sources in excess of operating costs and expenses properly chargeable against the furnishing of such services. All such amounts in excess of operating costs and expenses at the moment of receipt by the Company (Co-op) are received with the understanding that they are furnished by the members as capital. The Company (Co-op) is obligated to pay by credits to a capital account for each member all such amounts in excess of operating costs and expenses. The books and records of the Company shall be set up and kept in such a manner that, at the end of each fiscal year, the amount of capital, if any, so furnished by each member is clearly reflected and credited in an appropriate record to the capital account of each member; and the Company shall, within a reasonable time after the close of the fiscal year, notify each member of the amount of capital so credited or debited to their account. All such amounts credited to the capital account of any member shall have the same status as though it had been paid to the member in cash in pursuance of a legal obligation to do so and the member had then furnished the Company corresponding amounts of capital.

All accumulated operating deficits shall be recouped before any allocation of patronage capital is made, as set forth herein. Patronage capital shall be pro-rated to members in proportion to their charges for service.

All other non-operating income received by the Company from its operations in excess of costs and expenses to produce the same may, insofar as permitted by law, be:

(1) Used to offset any losses incurred during the current or any prior fiscal year: and,

(2) To the extent not needed for that purpose, be allocated to expenses for the current year; and,

(3) To the extent not needed for that purpose, be allocated to a fund for capital improvements.

In the event of dissolution or liquidation of the Company, after all outstanding indebtedness of the Company 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 members. If, at any time prior to dissolution or liquidation, the Board shall determine that the financial condition of the Company will not be impaired thereby, the capital then credited to members accounts may be retired in full or in part. Any such retirements of capital shall be at the discretion and direction of the Board as to timing, priority, method and type of retirement.

Capital credited to the account of each member shall be assignable only on the books of the Company, pursuant to written instruction from the assignor and only to successors-in-interest or successors-in-occupancy in all or in a part of such member’s premises served by the Company unless the Board, acting under policies of general application, shall authorize other types of assignments.

The members and customers of the Company, by dealing with the Company, acknowledge that the terms and provisions of the Articles of Incorporation and By-Laws shall constitute and be a contract both between the Company and each member and customer, and further, between all the members themselves, individually. Both the Company and the members are bound by such contract, as fully as though each member had individually signed a separate instrument containing such terms and provisions with the Company and each of its members. The provisions of this Article of the By-Laws shall be called to the attention of each member of the Company by posting in a conspicuous place in the Company’s office or by publication distributed by the Company to its members.

7.3 Retirement of Capital Credits. At any time prior to dissolution or liquidation the Board may retire capital then credited to members’ accounts in full or in part if the Board determines that the financial condition of Company will not be impaired thereby. During twelve months immediately following the close of the fiscal year, the Board may retire up to twenty-five (25%) of such year’s capital credits. All other retirement of capital shall be made in order of priority according to the year in which the capital was furnished and credited, the capital first received by Company being first retired; provided the Board may, in its discretion, retire capital credits of de minimis amounts for any given year at any time without priority.

7.4. Death of a Member. Upon the death of any member, the capital credited to such member may be retired prior to the time such capital would otherwise be retired if such retirement is requested by: (1) The membership beneficiary designated by the member on such member’s Membership Application; or, (2) if no such designation had been made by the member, the legal representative of the member’s estate.

If the Board determines that the financial condition of the Company will not be impaired thereby, the Board, in its discretion, may retire capital credited to such member upon such terms and conditions as the Board, acting under policies of general application, and the membership beneficiary or legal representative of such member’s estate shall agree.

7.5. Abandoned Capital. A member’s capital which has been retired shall remain available for a period of five years before it is presumed abandoned (such abandoned capital is herein called the “Abandoned Capital”). The Company shall establish a revolving fund comprised of the Abandoned Capital as follows:

(1) The Company shall retain in said fund an amount equal to twenty-five percent (25%) of the accumulated Abandoned Capital or twenty thousand dollars ($20,000), whichever is less.

(2) Excess money in said revolving fund may be transferred to any Company fund to be used for any purpose for which the Company is incorporated.

(3) The member’s right to claim the Abandoned Capital shall not be extinguished and the member or the legal representative of the member’s estate (or the membership beneficiary if the member is deceased and had previously designated such beneficiary), shall have the right to claim said Abandoned Capital from the revolving fund.

(4) The Company shall establish, maintain and update a current list of such Abandoned Capital and shall provide the list to the unclaimed property division of the Idaho State Treasurer’s Office pursuant to Idaho Code § 14-542 2(c).

7.6 Offset of Indebtedness. Any indebtedness due from the record holder of a capital credit to the Company, or their assignee, may be offset by the Company before the retirement or transfer of such credit or any part thereof pursuant to any section of this article.

ARTICLE 8. DISSOLUTION AND DISTRIBUTION OF SURPLUS ASSETS UPON DISSOLUTION

8.1 Dissolution. The Company may be dissolved, subject to the requirements of law, by filing, as hereinafter provided, a certificate which shall be entitled and endorsed “Certificate of Dissolution of FARMERS MUTUAL TELEPHONE COMPANY” and shall state:

(1) Name of the Company, and if such Company is a corporation resulting from a consolidation as herein provided, the names of all the original corporations or cooperatives.

(2) The date of filing of Certificate of Incorporation, and if such corporation is a Company resulting from a consolidation as herein provided, the dates on which the Certificates of Incorporation of the original corporations were filed.

(3) That the Company elects to dissolve.

(4) The name and post office address of each of its Directors, and the name, title and post office address of each of its Officers.

Such Certificate shall be subscribed and acknowledged by the President or a Vice-President, and the Secretary or an assistant Secretary, who shall make and annex an affidavit, stating that they have been authorized to execute and file such certificate by the votes cast of at least a majority of its total members voting, in person or by proxy, and that the dissolution has been authorized by at least a majority of the Board of Directors and fifty per cent (50%) of the holders of the indebtedness of the Company.

Such Certificate shall be subscribed and acknowledged by the President or a Vice-President, and the Secretary or an assistant Secretary, who shall make and annex an affidavit, stating that they have been authorized to execute and file such certificate by the votes cast, in person or by proxy, of at least sixty-six and two-thirds percent (66 2/3%) of the total voting power of the Company, voting in person or by proxy, and that the dissolution has been authorized by at least sixty-six and two-thirds percent (66 2/3%) of the Board of Directors and by sixty-six and two-thirds percent (66 2/3%) of the holders of the indebtedness of the Company.

A Certificate of Dissolution and a certified copy or copies thereof shall be filed in the same place as the Certificate of Incorporation and thereupon the Company shall be deemed to be dissolved.

Such Company shall continue for the purpose of paying, satisfying and discharging any existing liabilities or obligations and collecting or liquidating its assets, and doing all other acts required to adjust and wind up its business and affairs, and may sue and be sued in its corporate name.

8.2 Distribution of Surplus Assets on Dissolution. Any assets remaining after all debts and liabilities of the Company shall have been paid shall be disposed of pursuant to the provisions of Section 3.04 of these By-Laws; provided however, that, if in the judgment of the Board the amount of such surplus is too small to justify the expense of making such distribution, the Board may, in lieu thereof, donate or provide for the donation of, such surplus to one or more non-profit, charitable or educational organizations that are exempt from federal income taxation.

Any indebtedness due to the Company from the holders of such equities in the Company may be offset by the Company before retirement of such equities.

ARTICLE 9. FISCAL YEAR

The fiscal year of the Company shall begin on the 1st day of January, and end on the 31st day of December.

ARTICLE 10. CORPORATE SEAL

The Company shall not have or use a corporate seal.

ARTICLE 11. GENERAL PROVISIONS

11.1 Reimbursement. It is recognized that Directors, Officers, and certain other agents or employees of the Company often incur out-of-pocket expenses such as are incurred in the everyday business use of their automobiles, club dues, and other expenses which are deemed advisable or necessary to properly perform their duties and maintain desirable business contacts. The Company, in fixing the amount of compensation which is paid to these Directors, Officers, and employees, shall take into consideration that these expenses will be incurred by the Company and will be charged back to the Company. The Company does hereby authorize these Directors, Officers, and employees to incur these expenses with the understanding that reimbursement may be made by the Company to the Directors, Officer, or employee in regard thereto.

11.2 Waiver of Notice. Any member or Director may waive, in writing, any notice of a meeting required to be given by these By-Laws. The attendance of a member or Director at any meeting shall constitute a waiver of notice of such meeting by such member or Director, except in case a member or Director shall attend a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting has not been lawfully called or convened.

ARTICLE 12. BENEFITS

The Company may enter into any kind of contract or agreement, health benefit, death benefit or salary continuation plan upon disablement, or any type of retirement or incentive compensation plan, with its Directors, Officers, and/or employees, that the Board may deem advantageous or expedient, or otherwise to reward or pay persons for their services as the Directors may deem fit.

ARTICLE 13. FORCE AND EFFECT OF BY-LAWS

These By-Laws are subject to the provisions of the law of the State of Idaho and the Company’s Articles of Incorporation, as they may be amended from time to time. If any provision in these By-Laws is inconsistent with a provision in the State statutes or the Articles of Incorporation, the provision of the State statutes or the Articles of Incorporation shall govern.

ARTICLE 14. AMENDMENTS

The power to alter, amend or repeal the By-Laws, and/or to adopt new By-Laws, has been delegated by the members to the Board; and therefore, these By-Laws (or any provisions thereof) may be altered, amended or repealed, and/or new By-Laws adopted, by the affirmative vote of not less than a majority of the Directors in office, at a Regular or Special Meeting of the Board; provided, however, that By-Laws altered, amended or repealed or new By-Laws adopted by the Board of Directors shall be subject to change or repeal by the affirmative vote of a majority of the members entitled to vote at an Annual Meeting or at a Special Meeting called for that purpose; provided that, a written notice shall have been sent to each member of record entitled to vote at such meeting at his last known post office address at least ten (10) days before the date of such Annual or Special Meeting, which notice shall state the alterations, amendments, additions, or changes which are proposed to be made in such By-Laws. Only such changes shall be made as have been specified in the notice.