Peninsula Light Company

Candidate for PLC Board of Directors Election Packet

Table of Contents

1. Article III, Bylaw Provisions Regarding Nominating Committee and Nominating

Petitions for Election as a Peninsula Light Company Director 2. Board Policy No. 7, Functions of the Board of Directors 3. Board Policy No. 12, Rules Governing the Election of Directors 4. Position Description, Board Member, PLC Board of Directors 5. Application for Director Candidacy 6. Declaration of Director Candidacy

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Peninsula Light Company Board of Directors

Excerpts from Bylaw Articles II & III on Voting, Election of Directors, Nominating Committee, and Election Rules & Procedures

The following are excerpts from the Peninsula Light Company’s (PLC) Bylaws. They include provisions that govern the election and qualifications of its Board of Directors and, in particular, the process by which a PLC member in good standing may be nominated by the Nominating Committee or by a Nominating Petition signed by 3% of the membership.

ARTICLE II. MEETINGS OF MEMBERS

Section 4. Voting

At every meeting of the members, each membership in good standing shall be entitled to one vote. Voting for the election of directors and upon such other issues which are submitted in writing to the membership shall be only by mail as provided in Article I, Section 1(h) of these Bylaws. Subscribers for a membership who have not paid in full their membership fee shall not be entitled to vote. Proxies shall not be recognized or permitted. For purposes of this section, a member in good standing means an individual or entity named on a membership certificate who is not over 30 days delinquent on the payment of any amount due and owing to PLC, unless there is a bona fide dispute as to the amount owing, and is not in violation of any rules and regulations of PLC.

ARTICLE III. DIRECTORS

Section 1. Election of Directors

(a) General Qualifications of Directors. All the business affairs of this mutual corporation, except those reserved by law to the members, shall be managed by a board of nine directors, all of whom shall be members in good standing holding fully paid membership certificates in this mutual corporation.

(b) Additional Qualifications of Directors. Directors shall have the following additional qualifications, provided the requirements of (4) below may be excused by the Board for good cause:

(1) Be an individual.

(2) Have the capacity to enter into legally binding contracts.

(3) While a director, and during the five (5) years immediately prior to

becoming a director, not:

(i) be, or have been convicted of a felony, or (ii) plead, nor have pleaded guilty to a felony.

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(4) Each director shall:

(i) Within two (2) years of first becoming a director, have obtained a

Credentialed Cooperative Director (CCD) designation, Director's Certificate from NRECA or other similar certification from another recognized utility industry continuing education organization.

(ii) Directors shall not be absent for more than three (3) scheduled

meetings in any twelve (12) month period. Scheduled meetings include monthly board meetings, the board meeting/retreat, the board meeting/annual meeting, committee meetings, and annual training.

(iii) Attend at least one (1) industry conference or continuing

education course during every twelve (12) month period.

(iv) For purposes of the preceding subparagraph (i.e. subparagraph 4 (iii) immediately above); the term industry conference or continuing education course is intended to be defined broadly to include, without limitation, any NRECA Board training, legal or other educational programs, any bar association approved continuing legal education program that deals with cooperative law, utility law, utility regulation, power supply, corporate governance, employment law, or any other legal issues that are relevant to the utility industry generally, or to PLC, and any meetings of any regional or national utility industry organization or association at which issues confronting the utility industry are discussed and any other meetings, conferences, or seminars that contribute to the director’s ability to perform his or her responsibilities as a director.

(5) Maintain their primary residence in the PLC service territory.

(6) Use, receive, or purchase cooperative services from PLC at the

director’s primary residence. (7) Be willing to devote such time and effort to his or her duties as a

Director as may be necessary to oversee PLC’s business affairs.

(c) Prohibited Conflicts of Interest. It shall be a continuing qualification of any individual who is a director or a director candidate, that while a director or director candidate and during the five (5) years immediately prior to becoming a director, or director candidate, the individual must not be or have been:

(1) A Close Relative of any existing director.

(2) An employee of PLC or a subsidiary entity in which PLC owns a majority

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interest or a Close Relative of an existing employee, agent or representative of PLC or a subsidiary entity.

(3) Employed by, Materially Affiliated with, or share in a Material

Financial interest with any other director.

(4) Employed by, Materially Affiliated with, or have a Material Financial interest in, any individual or entity:

(i) directly and substantially competing with PLC, or (ii) possessing a Substantial Conflict of interest with PLC.

(d) Other Conflicts of Interest. Directors are required to disclose all conflicts of

interest and recuse themselves from any vote related to any matter or transaction that comes before the Board involving a transaction or matter in which the director has a conflict of interest.

(e) Definitions.

(1) The term “Close Relative” shall mean children or their spouse, husband,

wife, sister, brother, parents, foster, or step-parents, grandparents, aunts, uncles, mother or father-in-law, sister or brother-in-law, whether by marriage or adoption, or any individual who resides in the same residence as a PLC director or employee.

(2) The term “Substantial Conflicts of Interest” shall include, without limitation,

(i) having sought to advance or having advanced the individual's pecuniary interest by competing with PLC, or by having a financial interest or relationship that would likely impair the ability of the Director to serve the best interests of PLC, including, without limitation, the following:

a. employment or service, including as a consultant, sales representative, broker, trustee, director, or agent, with a consultant, contractor, supplier or vendor of PLC, or a financial institution which has engaged in financial transactions with PLC; or

b. being employed by or Materially Affiliated with or having a Material Financial Interest in any business providing electric, water or radio service, and/or that acts in the capacity as a consultant, contractor, supplier or vendor, selling, or that offers, or solicits the sale of goods and/or services in substantial quantities to any electric or water distribution utility, or being employed by or Materially Affiliated with any labor union that presently represents or may in the future

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represent employees in any business engaged in by PLC or any subsidiary of PLC,

c. using Business Information of PLC (as defined in Board Policies) for personal gain or advancement.

(ii) The terms “Material Affiliation” and “Material Financial Interest” do not include isolated transactions or passive investment activity that is not related to any business providing electric, water or radio service or to their suppliers.

(f) Continuing Qualifications and Removal of a Director for Failure to Meet Continuing Qualifications. Only individuals who comply with the above qualifications and requirements may be nominated, re-nominated, serve, or continue to serve as a director. After being elected or appointed a director, if any director fails to comply with any qualification or requirement, the Board is authorized to remove the director, except that compliance with the requirements of subsection (b)(4) above may be excused by the Board for good cause.

(g) Savings Clause. The failure of any director to meet the qualifications and requirements for a director without excuse for good cause, shall not invalidate any Board action if a majority of directors who do meet the qualifications and requirements vote in favor of the measure.

(h) Election of Directors. Directors have staggered three year terms so that the

terms of one-third (three) of the Directors shall expire each year. The election of directors and decisions on other matters to be decided by vote of the membership shall be voted on each year at the annual meeting. Director elections and voting on other matters shall be by completed ballot. Directors shall be elected “at large,” The term of each Director shall commence at the conclusion of the Annual Meeting at which the Director was elected and shall expire at the conclusion of the Annual Meeting three years later. Ballots containing the names of all candidates for director and any other matter to be voted upon by the membership shall be mailed or otherwise delivered to all members of PLC at least fifteen (15) days before the Annual Meeting at which directors are to be elected or other matter is to be decided. Members may vote only by mailing such ballot to PLC’s designated election service provider or by depositing the ballot at a place designated by the Board. Ballots that are post-marked later than the Monday before the Annual Meeting, or not delivered to a designated location by that date will be deemed late filed and will not be counted. In any election, the three candidates receiving the most votes shall be deemed elected to the expiring three year terms of the three directors whose terms expire at the conclusion of the Annual Meeting. If the voting results in a tie between two candidates, the election shall be decided by a coin flip.

Section 2. Election Committee and Election Procedures.

The following procedures shall be used for nominating the persons whose names shall be submitted to the membership as candidates for the office of director of PLC.

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(a) Any incumbent director of PLC who meets the applicable director qualifications set forth in Section 1 of this Article III as determined by the Board, and who desires to run for re-election to the Board, including Directors appointed to fill vacancies pursuant to Article III, Section 3, shall so advise the Board by the date of the November Board meeting of the year prior to the election and his or her name shall be placed on the ballot as an incumbent candidate in the upcoming election, whether or not the Election Committee has nominated him or her. The Board may, for good cause, excuse an incumbent from meeting the requirements of this Article III, Section 1 (b)(4).

(b) As soon as practical after each annual meeting of the membership, the Board

Chair shall appoint a Director, who is not running for reelection in the upcoming election to chair the Election Committee. At least one-hundred eighty (180) days before the upcoming Annual Meeting, the Election Committee Chair shall recruit three (3) PLC members in good standing of PLC who are not currently members of the Board to serve on the Committee. The Committee shall recruit candidates to be nominated for Director and perform the other duties as described in this Section 2, BOD Policy 12 and any other applicable bylaw or policy. The Chair shall vote on nominations only in case of a tie vote by the non-Board members serving on the Committee. Prior to the appointment of non-Board member appointees to the Elections Committee, the Board shall determine that such appointees have similar qualifications to those required under Article III, Section 1 for an individual to be nominated or to serve as a Director, except as follows: non-Board member appointees to the Elections Committee shall not be required to comply with the continuing education and attendance requirements in Article III, Section 1, (b)(3) and (4), or the provisions in Article III, Section 1, (f), and (h).

(c) No later than November 1 of each year PLC shall publicize on its website and in

its member newsletter that members may apply to be considered by the Elections Committee as a candidate for director in the upcoming director election. Any individual member in good standing who meets the qualifications and requirements set forth in Article III, Section 1, may submit his or her name to the Elections Committee no later than December 31 of the year prior to the election to be considered for nomination as a candidate for director at the upcoming director election and such member shall be considered by the Elections Committee.

(d) In addition to candidates who apply to be considered, the Elections Committee shall identify, recruit, consider and nominate candidates for the office of director so that there are at least two candidates (including any incumbent director) for each director position to be elected at the forthcoming annual meeting. The Elections Committee shall only nominate candidates for the office of director who the Committee has determined meet the applicable qualifications for a director set forth in Section 1 of this Article III.

(e) In addition to the candidates placed on the ballot from among: (i) incumbent directors who elect to run for re-election, and (ii) members nominated by the Elections Committee from among members who asked to be considered to be a candidate for director or (iii) who were recruited by the Elections Committee to be a candidate for director, (iv) any member in good standing, shall be entitled to have his or her name printed on the ballot as a candidate by submitting to the Board on or before the last working day of December 31 of

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the year prior to the election a written Nomination Petition signed by at least 3% of the membership in good standing at the end of the prior year. Signatures on a Nomination Petition must be executed after the date of the last annual meeting of the corporation prior to the election for which the member seeks to have his or her name placed on the ballot by Nomination Petition. The form of such Nomination Petition shall be as prescribed by the Board.

(f) As a condition of being placed on the ballot, all director candidates must provide relevant documents and other materials reasonably needed by the Committee to verify to its satisfaction that the candidate meets the qualifications to be a director. PLC shall not publicly disclose such records except with the consent of the person providing them.

(g) The names of any incumbent directors who elect to run for reelection, , the

nominees recommended by the Election Committee from among any candidates who apply to run to be a director, or who are recruited by the Election Committee, and any candidates nominated by Nominating Petition shall be forwarded to the Board. The Board shall review the Committee’s proposed slate of candidates and determine if they meet the qualifications to be a Director. r A sitting director who is a candidate in the upcoming election will recuse himself or herself from any discussion, deliberation or vote concerning the qualifications of the candidates recommended by the Elections Committee, or who have petitioned to be placed on the ballot. If an incumbent director, a candidate recommended by the Elections Committee, or a member who petitions to be listed on the ballot does not meet the applicable qualifications for a director, as determined by the Board, his or her name shall not be placed on the ballot; provided, non-incumbent candidates are excused from meeting the requirements of subsection (b)(4) above, and the Board may excuse an incumbent candidate from meeting the requirements of subsection (b)(4) above for good cause. Unless disqualified by the Board for not meeting the qualifications to be a director; the recommended slate of candidates shall appear on the ballot for election of directors at the Annual Meeting. If any nominee is disqualified on the grounds that he or she does not meet the qualifications, the Board may ask the Elections Committee to nominate another candidate to replace the disqualified candidate and forward the replacement candidate’s name to the Board.

The names of candidates shall otherwise appear on the ballot in the order and according to such other rules or policies as may be established by the Board. For purposes of this Section and the Nominating Petition, a member in good standing means an individual named on a membership certificate who is not over 30 days delinquent on the payment of any amount due and owing PLC and is not in violation of the articles of the corporation, any bylaws, rules and regulations, tariffs, customer service policies, or other Governing Documents of PLC on the date the Petition was signed, which include the Articles of Incorporation, these Bylaws, PLC’s service rules and regulations; its rate or price schedules; all rules, regulations, requirements, guidelines, procedures, policies, programs, determinations, resolutions, or actions taken, adopted, promulgated, approved or permitted by the Board; all applicable law and all legally binding agreements. Petition candidates must meet the applicable qualifications for a director set forth in Section 1 of this Article III. The Board shall determine whether the signature of any Petition signatory shall be disqualified on the ground that the

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member is not in good standing and/or whether a petition candidate is a member in good standing and meets the qualifications to be a director. The signature of one member of a joint membership shall constitute the signature on behalf of the joint membership. If more than one individual signs the Petition on behalf of a joint membership, the signatures shall constitute only one signature for the purpose of the Nomination Petition.

Subject to the requirement that only persons who meet the applicable qualifications may be elected and serve as a Director, or who are validly excused from meeting any applicable qualification, in addition to the candidates for director nominated as above, the members may write in the name of any member in good standing who meets the applicable qualifications for a director as set forth in Section 1 of this Article III as a candidate on the ballot submitted by the member.

Section 8. Election Rules and Procedures.

(a) The Board shall be responsible for assuring the fairness and integrity of all elections, including for the adoption and enforcement of appropriate rules and procedures for the conduct of elections, including the tabulation of ballots. Prior to any Annual Member Meeting, the Board shall make such arrangements as it deems necessary and appropriate for validating the member list and distributing ballots to each member prior to each election.

(b) The Board shall make arrangements for tabulating member votes, which may

include, without limitation, the appointment of an independent person(s) or an entity or organization to tabulate member votes. The person(s) entity or organization appointed to tabulate the votes may not utilize any of the following individuals to tabulate votes:

(1) Any member of the Election Committee.

(2) Any existing director, close relative of an existing director, or candidate

for director.

(3) Any officer or employee of the mutual corporation.

(c) Notwithstanding the appointment of a person, entity or organization to tabulate the votes, it shall be the responsibility of the Board to adopt rules and regulations for the conduct of elections and to resolve all questions, issues, or disputes regarding the conduct of elections, including, without limitation, compliance with election rules, the qualification of members to vote, voting and the tabulation of member votes.

Peninsula Light Company

POSITION DESCRIPTION

POSITION TITLE: Board Member, PLC Board of Directors

REQUIRED APPLICANT QUALIFICATIONS

Have lived within Peninsula Light Company (PLC) service territory for at least three years.

Have shown an involvement with community, service clubs, associations, etc. At least eighteen years of age, not an employee of PLC or close relative of an

employee or Director, nor have financial interest in a competing company. Be a member in good standing with PLC. Have a working knowledge of business budgets (process and documents). Willingness to represent the best interests of the membership. Must sign a Declaration of Director Candidacy acknowledging: o Receipt and compliance with Board Policy No. 12 (Rules of Board Election). o Review and compliance with Article III of PLC Bylaws concerning the qualifications,

election, and responsibilities of Directors. o Authorization to release PLC account information to the Election Committee

verifying that candidate is a member in good standing.

DESIRED APPLICANT QUALIFICATIONS

• Strong interest in the electrical utilities industry • Willingness to learn about the electrical utilities industry

APPLICANT CONSIDERATIONS

A Board member must be willing to devote a considerable amount of time preparing for and attending meetings/events (estimate 10–20 hours per month). A Board member should be able to give time to attend:

1. Regular monthly Board meetings on the second Thursday of each month. Board meetings typically start at 5:00 p.m. and last up to three hours; must attend at least nine of 12 per year.

2. Be willing to study information and data presented to the Board to stay well informed, including time before each Board meeting to read and prepare for the meeting.

3. Annual Board Retreat (two and a half days in September or October).

4. Board subcommittee meeting of, two to three hours on an occasional basis. Note: October and November are busy months for subcommittee meetings.

5. Director training programs to obtain NRECA Credentialed Cooperative Director certification (CCD), which is required within two years. This typically involves out-of-state travel for three to five days.

6. Director training programs to obtain Board Leadership Certificate (BLC), if you wish to pursue a leadership role on the Board. (Prerequisite: Credentialed Cooperative Director Certificate).

7. At least one industry conference or continuing education course during every 12-month period.

8. Regional and national utility industry meetings and conventions, typically one every three years if already CCD certified.

OBJECTIVES AND KEY RESPONSIBILITIES

1. Embrace company objectives.

2. Adhere to the company's Articles of Incorporation, Bylaws, and Policies.

3. Foster and maintain the cooperative’s reputation for fair dealing, prompt and dependable service, integrity, courtesy, productive ability, and technical competence.

4. Cultivate the cooperative's image as a good citizen in the community; encourage employees and directors to take an active part in making it a better place to live.

5. Provide direction and review of the Board's sole employee, the Chief Executive Officer.

6. Cooperate with similar utilities and industries for mutual betterment.

7. PLC Board members believe in the following cooperative principles: non-profit operation; member ownership and control; and one member – one vote.

KNOWLEDGE, ABILITIES, AND PERSONAL CHARACTERISTICS

1. Demonstrated action as a proven leader in the community with broad interests.

2. Be an individual with high integrity.

3. Maturity, with ability to exercise sound and logical reasoning.

4. Willingness to support the decisions and actions of the Board once action has been taken by a majority of the Board.

5. Ability to work collaboratively with others on the Board and to represent the total cooperative membership on an impartial basis.

6. Initiative to make every effort to obtain increasing member and public understanding and support of the cooperative.

7. Have effective communication skills.

ADDITIONAL APPLICANT CONSIDERATIONS – COMPENSATION SCHEDULE

1. Monthly stipend: $1400 a. Board President’s stipend: $250/month

b. Chairs of Finance, Policy & Bylaws, Goals and Compensation Committee stipends: $150/month

2. Local meetings, Board, subcommittee, or lengthy phone conference: $250/event 3. Out-of-area conference or meeting: $350/day 4. Board retreat, CCD or Board Leadership training, or continuing education: $500/day 5. Travel days: $200/day

Peninsula Light Company Board of Directors

Application for Director Candidacy Peninsula Light Company (PLC) is seeking people interested in applying for nomination in the Annual Board of Directors’ election. Persons interested in being nominated for PLC's Board of Directors may use this form to apply or may apply online at www.penlight.org. Paper forms may also be mailed to, or delivered to our headquarters at 13315 Goodnough Drive NW, Purdy, WA 98332 during regular working hours Monday through Friday, 8:00 a.m. to 4:30 p.m. Applications must be received by noon on the last business day of December. APPLICANT QUALIFICATIONS: All applicants must hold an active membership in Peninsula Light Company and be a member in good standing. An "active" membership means that the applicant holds a valid membership certificate and is purchasing power or water from PLC. A "member in good standing" means that the applicant is current in bills owing to PLC and is in compliance with the rules and regulations of the utility. All applicants must sign the "Declaration of Director Candidate" form included with the application form. Applicants must disclose any conflicts of interest with PLC as defined in our policy. Such conflicts do not, of themselves, disqualify a candidate from applying. A description of candidate and director qualifications and related policies are included with this form. SELECTION PROCESS: All applications from qualified people will be considered by the Board of Directors’ Election Committee. This Committee consists of one standing Board Member and three "at large" non-Board members elected by the full Board by balloting. Applicants chosen will be interviewed by the Election Committee, who will present a slate of nominees to the full Board at the February Board Meeting. The slate will include incumbent Directors running for re-election. Successful candidates must stand for election in 2019. Names of non-incumbent candidates shall be placed on the ballot in alphabetical order. Please provide the following information: NAME (print) EMAIL:

ADDRESS

MEMBERSHIP # PHONE #

Address where applicant holds a valid and active membership (if different from above):

NAME (print) EMAIL:

ADDRESS

1. Please tell us why you are interested in serving on the Board of Directors:

2. Please give the committee a brief description of your background, which may include your work background, education, special interests or skills, etc.

3. Please describe community service or volunteer activity in which you have experience:

4. Please describe any experience you have working with Boards of Directors, commissions, committees, or councils:

5. Please list and describe any special talents, skills, or experience that would especially qualify you to serve on the PLC Board of Directors.

6. Do you have now or have you had any relative that is now or has been an employee of Peninsula Light Company in the past five years?

Yes No

7. Have you ever worked for Peninsula Light Company yourself or been employed by a company doing business with PLC?

Yes (please provide name and details) No

(Need help? Call us at 253-857-1504 or send an email to britni@penlight.org, RE: Election Committee)

Please attach a separate sheet if more room is needed.

Peninsula Light Company Board of Directors

Declaration of Director Candidacy

NAME (print) EMAIL:

ADDRESS

MEMBERSHIP # PHONE #

I, , declare that: I, , acknowledge receipt of Peninsula Light Company's Election Rules and agree to comply with them. I understand that a violation of these rules could subject me to the penalties described in these rules. I have reviewed all of the provisions of Article Ill of the Peninsula Light Company bylaws concerning the qualification, election, and responsibilities of directors. I understand that I am required to disclose any information of which I am aware that would disqualify me from serving as a director of Peninsula Light Company. I understand that while a candidate and if elected I must meet the qualifications and requirements of a director on a continuing basis and I agree that I will, to the best of my ability, do so. I am a member in good standing of Peninsula Light Company, which I understand to mean that my account is current and that I am in compliance with all of the rules, regulations, and member policies of Peninsula Light Company. I hereby authorize Peninsula Light Company to release to the Election Committee my account information for the purpose of determining that I am a member in good standing of Peninsula Light Company. I am over 18 years of age. I am not an employee of Peninsula Light Company or a close relative of an employee or a director of Peninsula Light Company, nor am I financially interested in a competing company. DATED this day of , 201_. SIGNATURE: