LISTSERV 16.0 - MICE-DISCUSS Archives

In general I support this.

Question #1:
I'll piggy back on Frank's question. Is there a specific timeline specified
for filling a vacant Board position?

Question #2:
2.11.iii ends with "and". Are all four forms of notice required to be
given, or is the intent to provide notice using one of the four options?

i.e. "The notice is deemed given by *one or more of*:"  or similar? Remove
the "and"


Ben Wiechman

Director of IP Strategy and Engineering

320.247.3224 | [log in to unmask]

Arvig | 224 East Main Street | Melrose, MN 56352 | arvig.com




On Fri, Feb 25, 2022 at 12:53 AM Frank Bulk <[log in to unmask]>
wrote:

> Thanks to Richard and all those who contributed to the discussion and
> changes!
>
>
>
> This all seems pretty good to me, but I did have a minor question about
> one thing.  In section 2.17(c) there’s this sentence: “If the governor is
> not reinstated by affirmative vote, the position shall be filled by a vote
> of the Members.”  I assume that those two actions (“vote to not reinstate”
> and “vote to fill the vacant position”) don’t have to happen at the same
> meeting/time?
>
>
>
> Frank
>
>
>
> *From:* MICE Discuss <[log in to unmask]> * On Behalf Of *Richard
> Laager
> *Sent:* Thursday, February 24, 2022 10:19 PM
> *To:* [log in to unmask]
> *Subject:* [MICE-DISCUSS] MICE Bylaws Changes
>
>
>
> At the last meeting, we discussed various bylaws issues. This started with
> the quorum issue. I was short on the official notice period for the last
> meeting, plus there was a desire for legal advice on certain questions, so
> we held off on voting on things.
>
> As promised, I engaged a lawyer at Moss & Barnett. I consulted with him on
> the questions, he drafted bylaws changes, I reviewed them, and then the
> board reviewed them. The results of this are below. I have numbered the
> changes for ease of reference, but the order is not significant; each
> amendment is standalone.
>
> The Board recommends adoption of all changes.
>
> The Proposed (all changes) and Current bylaws are attached.
>
> Please review and comment here on the mailing list. Out of respect for
> people's time, I would like to avoid a long interactive meeting, limiting
> that to primarily voting. "Speak now or forever hold your peace" as it were.
>
>
>
> *Change 1: Quorum*
>
> This is the issue that we have discussed at length before. There seemed to
> be a consensus on this previously. Our lawyer's view was that the proposed
> language was fine. But when he actually integrated it into the text, he did
> use slightly different structure, giving them "(i)" and "(ii)" prefixes. So
> this is now using the lawyer's wording.
>
> ACTION:
>
> Amend the first sentence of section 1.11 "Quorum" to insert the words,
> "the lesser of (i) ten (10) members entitled to vote or (ii)", such that it
> now reads:
>
> Members representing *the lesser of (i) ten (10) members entitled to vote
> or (ii)* ten percent (10%) of the voting power of the membership
> interests entitled to vote at a meeting of the members are a quorum for the
> transaction of business.
>
>
>
> *Change 2: Affiliates*
>
> As discussed at the last meeting, we wanted to add to the bylaws (where it
> belongs) the longstanding MICE policy that affiliated members (e.g. parent
> companies and subsidiaries) only get one vote. We specifically wanted to
> get a lawyer to draft the language for defining this.
>
> Originally, we were (or at least I was) thinking that we wanted
> self-executing language (e.g. if two members merge, one of the entities
> *automatically* loses membership status). The lawyer strongly advised
> against this. First off, for that to work, the language has to be
> deterministic at the point the e.g. merger happens. For example, there is
> no way for the merged entities to indicate which will be the member moving
> forward. Second, he advised this creates a risk of ultra vires actions.
> Imagine some members merge, then we elect a board member in a nearly-tied
> election, then the board makes some decisions, etc. etc. Later, we find out
> about a merger that predated the election, and that changed the result of
> the election. Now you have to try to unwind all that? While that particular
> possibility is remote, ultimately he recommended a different approach,
> which is what is taken here.
>
> This change creates an affirmative duty for members to notify MICE of
> mergers. It allows the board to refuse to admit the second entity (for new
> member scenarios) and to terminate the membership of all-but-one affiliate
> (for e.g. the merger scenario). This is the procedure we have been using.
>
> This also includes a language cleanup to clarify what "Board" means. This
> is just a cleanup.
>
> The Bylaws allow the Board to amend the membership qualifications section,
> and that was the original plan discussed at the last meeting. But since the
> members are already voting on bylaws changes, the board is bringing this to
> the members too. This also allows for the language cleanup in section 1.1
> and the section 1.16 change.
>
> ACTION:
>
> Amend section 1.1 "Membership Qualifications" to make the existing text
> subsection "(a)".
>
> Amend section 1.1 (a) to insert the text, " of Governors of the Company
> (the “Board” or “Board of Governors”)" after the first occurrence of
> "Board", such that it reads:
>
> In order to qualify for membership, a member shall be: (i) an operator of
> an internet protocol network which has one or more direct, or approved
> indirect, connections to Midwest Internet Cooperative Exchange LLC’s (the
> “Company”) switches; or (ii) an operator of equipment providing approved
> indirect connections; or (iii) an operator of a colocation data center in
> which the Company’s switches are located.  A member may be elected by the
> membership or appointed to membership by the Board* of Governors of the
> Company (the “Board” or “Board of Governors”)*.  Members may have such
> other qualifications as the Board may prescribe by amendment to this
> Operating Agreement.
>
> Add a subsection 1.1 (b) that reads:
>
> Each member shall have an affirmative duty to disclose the identity each
> of its Affiliates that is a member of the Company.  “Affiliate” means, with
> respect to any entity, (i) any other entity directly or indirectly
> controlling, controlled by, or under common control with such specified
> entity, or (ii) any other person or entity owning or controlling fifty
> percent (50%) or more of the outstanding voting securities of such entity.
> For purposes of the foregoing, the term “control” (including, with
> correlative meanings, the terms “controlled by” and “under common control
> with”), as applied to any entity, means the possession, directly or
> indirectly, of the power to cause the direction of the management and
> policies of such entity, whether through the ownership of voting or other
> securities, by contract or otherwise.  The Board may refuse to admit any
> entity that is an Affiliate of a member or may condition such admission on
> the acknowledgment that such entity and each of its Affiliates, will only
> have one member vote which may only be exercised by one of the affiliated
> members.
>
> Amend section 1.16 "Resignation, Expulsion or Suspension of Members" to
> add a subsection (d) that reads:
>
> Notwithstanding the foregoing, the Board may terminate the membership of
> one or more members who are Affiliates, such that such Affiliates shall
> only have one member vote. The intention of this provision is to prevent
> the concentration of voting power in members who are under common ownership
> or common control.
>
>
>
> *Change 3: Action Without a Meeting*
>
> This cleanup was proposed by the lawyer, when reviewing the bylaws. The
> first sentence says that we can do things without a meeting by *every
> single member* consenting to it. As a practical matter, that would never
> happen. It's also duplicative, since the second sentence says we can do
> things without a meeting with a *majority* of all members.
>
> ACTION:
>
> Amend section 1.13 "Action Without a Meeting" to strike the first
> sentence, "Any action required or permitted to be taken at a meeting of the
> members may be taken by written action signed, or consented to by
> authenticated electronic communication, by all the members entitled to vote
> on such action."
>
>
>
> *Change 4: Removal of Board Members*
>
> The lawyer found a number of concerns in the existing language (drafting
> errors, referencing the wrong statute, etc.) and procedure. He basically
> felt that it needed to be thrown out and completely redrafted.
>
> The current bylaws allow the members to remove a governor, with or without
> cause, by a "[two-thirds] majority" (drafting errors per original). At our
> current size, this is effectively impossible. The proposed change allows
> the members to remove a governor, with or without cause, by a majority (of
> *all* members, not just those voting on the issue), which is still a very
> high bar, but far more possible should the need arise.
>
> The current bylaws allow the board to remove a governor only if the board
> appointed that governor in the first place. The proposed change allows the
> board to remove a governor for cause (which is defined in quite a bit of
> detail) or disability (also defined).
>
> The Board had significant discussion on this change. There are two
> directly opposite concerns here, and any solution is going to involve some
> compromise. First, it is desirable to be able to remove a governor,
> promptly, when this is legitimate. Second, it is desirable to slow down or
> prevent removing a governor when this is illegitimate.
>
> We ultimately went back to the lawyer asking him to provide a mechanism by
> which a removal could be reviewed by the members. This ended up raising the
> question of notice to the removed governor. Initially notice was required
> by implication; this was made explicit. As part of this, section 1.14(d)
> "Notice to Members" was then copied, with s/member/governor (and the "(1)"
> and "(2)" labels removed), as 2.11(c).
>
> ACTION:
>
> Amend section 2.11 to add a subsection (c) which reads:
>
> Any notice to governors given by the Company or the Board by a form of
> electronic communication consented to by the governor to whom the notice is
> given is effective when given.  The notice is deemed given by:
>
> (i)    facsimile communication, when directed to a telephone number at
> which the governor has consented to receive notice;
>
> (ii)    electronic mail, when directed to an electronic mail address at
> which the governor has consented to receive notice;
>
> (iii)    a posting on an electronic network on which the governor has
> consented to receive notice, together with separate notice to the governor
> of the specific posting, upon the later of: (i) the posting; and (ii) the
> giving of the separate notice; and
>
> (iv)    any other form of electronic communication by which the governor
> has consented to receive notice, when directed to the governor.
>
> Consent by a governor to notice given by electronic communication may be
> given in writing or by authenticated electronic communication.  The Company
> and the Board is entitled to rely on any consent so given until revoked by
> such governor, provided that no revocation affects the validity of any
> notice given before receipt by the Company or the Board of revocation of
> the consent.
>
> Replace the contents of section 2.17 "Removal of Governors" entirety with:
>
> (a)    *Removal for Cause or Disability by the Governors*.  The Board may
> remove a governor for Cause or Disability by the unanimous vote of the
> governors, excluding the governor to be removed (the “*Voting Governors*”).
> “*Cause*” shall exist if the Voting Governors determine in good faith
> that the governor to be removed (i) has failed to discharge his, her, or
> their duties as governor in good faith, (ii) has breached his, her, or
> their fiduciary duties to the Company or its members, (iii) has committed
> theft, embezzlement or conversion of Company property, (iv) has engaged in
> any illegal activity or fraud in connection with the Company, (v) has been
> convicted of a felony or other crime involving moral turpitude, while a
> governor; (vi) has engaged in a conflict of interest without complying with
> Section 5.1 and 5.2 of this operating agreement or (vii) has engaged in
> acts or omissions which the Board reasonably deems to be materially
> damaging to the name, reputation, or business of the Company or which could
> jeopardize the good will or relationship with its member or other persons
> and entities important to its mission.  “*Disability*” a physical or
> mental impairment which prevents the governor from performing his, her, or
> their duties as a governor for a period of not less than 6 months.  The
> Board shall send a written notice to the removed governor stating the basis
> for their removal under this Section 2.17(a), within three (3) business
> days following a Board vote removing a such governor.
>
> (b)    *Retention Vote by Members*.  In the event the Board has removed a
> governor solely for the reasons stated in Section 2.17(a)(i) or (vii) (and
> not for any other reason constituting Cause or Disability), the removed
> governor within ten (10) business days following the dispatch of the notice
> of removal may provide a notice of disagreement with such removal and a
> request to submit such matters to the vote of the Members.  The Board shall
> call a meeting of the Members to vote on the retention of such governor to
> be held within 30 days.  Prior to such meeting, the governor shall continue
> to be removed subject to later reinstatement by the Members by affirmative
> vote.  If the governor is not reinstated by affirmative vote, the position
> shall be filled by a vote of the Members.  If notice by the removed
> governor is not given within ten (10) business days, the removed governor
> shall have waived his or her right to challenge the removal.  No governor
> shall have the right to appeal or challenge a removal by the Board under
> Section 2.17(a), except as expressly set forth in this Section 2.17(b)
>
> (c)    *Removal by Members*.  Any one or all of the governors may be
> removed at any time, with or without cause, by the affirmative vote of a
> majority of the voting power of all membership interests entitled to vote
> at an election of governors.
>
> --
>
> Richard
>
>
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