Articles of Incorporation

Pursuant to the Utah Revised Nonprofit Corporation Act, XXXXX Company, following a meeting of the shareholders at which meeting the shareholders approved and adopted the following amended articles of incorporation, hereby amends its Articles of Incorporation.

Article I - Name

The name of the consolidated corporation shall be _________ (Corporation).

Article II - Registered Office and Agent

The principal place of business of this Corporation shall be at _____, County of _____, State of Utah; provided, however, that when necessary, special meetings of the Board of Directors may be held at any place within the State of Utah. The Corporation’s registered agent shall be XXXXX, President.

I hereby accept the position of Registered Agent

________________________________ XXXXX

Article III - Duration

The duration of the Corporation shall be perpetual unless terminated sooner in a manner provided by law.

Article IV - Authorized Stock

A. The Corporation may issue ____ shares of common stock. [Par value?]

B. The initial classes of shares and the number of shares to be authorized and issued per class are as follows:

CLASS A . . . . Agricultural Irrigation Use, ____ shares.
CLASS B . . . . Domestic/Municipal Use, ____ shares.
CLASS C . . . . Supplemental Irrigation Water through the Central Utah Project, ____ shares.
CLASS D . . . . Carrier Water to Remain in Distribution System upon Conversion of Class A Shares to Domestic Use to Protect Remaining Class A Shareholders, ____ shares.

C. Class A shares represent the shareholder’s right to receive irrigation water through the Company’s irrigation distribution system. One share of Class A stock shall entitle the holder thereof to ____ acre-feet of water in an average year; the quantity of water delivered per share is to be adjusted annually and during the course of any given irrigation season depending upon the available water supply in the discretion of the Board of Directors.

D. Class B Shares represent Class A Shares that have been surrendered to the Company for conversion to domestic/municipal use pursuant to a shareholder-requested change application for water to be diverted from a well or wells and no longer delivered for irrigation use through the Company’s irrigation distribution system. One share of Class B stock shall entitle the holder thereof to one (1.0) acre-feet of water in an average year; the quantity of water delivered per share is to be adjusted annually and during the course of any given irrigation season depending upon the available water supply in the discretion of the Board of Directors. Unless waived by the Board for good cause or until such time as the Company installs a piped, pressurized sprinkler irrigation system, the conversion of Class A shares to Class B shares will require the converting shareholder to convert three Class A shares to three Class D shares for every 10 shares of Class A stock to be converted to 10 Class B shares. The water available under the Class D shares shall remain in the irrigation distribution system to provide the converting shareholder’s proportionate share of carrier water to the irrigation system to avoid impairing the remaining Class A shareholders. Class D shares dedicated to carrier water cannot form the basis of further diversion and beneficial use of that quantity of water and cannot be converted to Class B shares unless and until such time as the Company installs a piped, pressurized irrigation system thereby eliminating the need for carrier water; and subject further to State Engineer approval and the satisfaction of return flow obligations.

E. Class C shares represent supplemental irrigation water subscribed for by a Class A shareholder, which supplemental irrigation water has been made available to the Company by the Central Utah Water Conservancy District. Only Class A shareholders may hold Class C shares and use supplemental irrigation water. If the shareholder ceases to own Class A Shares the shareholder’s Class C shares will be canceled in accordance with the terms and conditions of the subscription contracts and the agreement between the Central Utah Water Conservancy District and Company.

Article V - Purposes and Powers of the Corporation

A. The purposes and powers of the Corporation and the business for which the Corporation is formed are:

i. To own, manage, operate, maintain, repair and replace, construct and reconstruct water diversion, distribution and storage facilities, including, without limitation, canals, ditches, wells, dams, reservoirs, flumes, aqueducts, underground pipelines and all necessary and desired appurtenances thereto, in the County of Summit, State of Utah, for the purpose of supplying water for irrigation, stock watering, domestic and all other beneficial uses and purposes;
ii. To own and acquire, by appropriation, purchase, condemnation, lien, lease, contract or otherwise, any and all real and personal property, including, without limitation, water and water rights, water supply contracts with water conservancy districts for use of Reclamation Project Water, and other needful water, water rights, water stock and sources of water supply used in connection with the said water diversion, distribution and storage facilities and the water supply flowing in and through the same and to supervise, regulate, control, divide and distribute said water and water supply to shareholders of the Corporation; to sell, lease and otherwise dispose of the same; and in general to do any and all things necessary and proper to be done in carrying out the business of a mutual irrigation Corporation under Utah law;
iii. To issue bonds and other forms of indebtedness end to otherwise make and perform contracts of any kind and description, including contracts with the United States, the State of Utah, and other governmental special districts and entities, pursuant to which the Corporation shall be authorized to sell, lease, exchange, mortgage, pledge, or otherwise dispose of all or substantially all of the assets of the Corporation, as and for security for indebtedness, or otherwise, for the acquisition of real and personal property, including, without limitation, water, water rights and water stock, and the use, joint development of and/or improvements to all water diversion, distribution and storage facilities, and in carrying on its business, or for the purpose of attaining or furthering any of its objectives;
iv. To apportion any loss of all or any portion of the water rights of Corporation due to abandonment or forfeiture for non-use to any and all shareholders whose failure to make beneficial use of the water caused the loss, forfeiture or partial forfeiture of the water rights of the Corporation;
v. To levy assessments on its stock for any payments that might become delinquent under any such assessment or contract with either, or any of the aforenamed authorities or agencies.
vi. To do any and all acts and things, and to have and exercise all rights and powers from time-to-time granted to a non-profit corporation by law, including, without limitation, those powers described in the Act.

B. The Corporation is organized as a non-profit, private irrigation company engaged in distributing water only to its shareholders and, therefore, is not a public utility as defined by law and is not subject to regulation, by the Utah Public Service Commission.

C. None of the objects of the Corporation shall be for the pecuniary profit of its members, directors or officers, and no part of the income of the Corporation shall inure to the benefit of or otherwise be distributed to any shareholder or individual. No loan shall be made by the Corporation to any of its directors, officers or shareholder.

D. The purposes and powers enumerated herein shall not be construed as limiting or restricting in any manner the purposes and powers of the Corporation as conferred by the laws of the State of Utah. The Corporation shall be authorized to exercise and enjoy all the powers, rights, and privileges conferred upon nonprofit corporation by the laws of the State of Utah. The Corporation shall always have such incidental powers as may be connected with or related to any specific purpose or power enumerated herein.

E. No substantial part of the activities of the Corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political’ campaign on behalf of any candidate for public office except as authorized under the Code. Notwithstanding any other provision of these Articles, the Corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under the Code, as amended or supplemented, or (b) by a corporation, contributions to which are deductible under Section 170(c)(2) of the Internal Revenue Code, as amended or supplemented.

Article VI - Members

A. The members of the Corporation shall be the shareholders of the Corporation, and membership shall be acquired only by the acquisition of stock in the Corporation.

B. The names, places of residences, and the amount of shares subscribed and held by each shareholder shall be maintained at the Corporation’s office.

Article VII - Board of Directors

A. The powers of the Corporation shall be exercised by a Board of five (5) Directors who shall be members of the Corporation, as on Corporation’s records. The Board shall manage and direct the business and affairs of the Corporation. Each director shall serve a term of three years. The board shall establish staggered terms for the board members so that no more than three board members are subject to election in any one calendar year.

B. Three (3) members of the Board of Directors shall constitute a quorum for the transaction of business at any meeting for the Board of Directors, and such quorum shall have power and authority to transact the business of the Corporation and exercise the corporate powers thereof.

Article VIII - Officers

The Corporation’s officers shall be elected by the Board, and shall consist of a president, vice-president, secretary, and treasurer. Those persons to serve in the office of president and vice-president shall be elected from among the membership of the Board. Those persons to serve in the office of secretary and treasurer may, but need not be, members of the Board. One person may hold the office of secretary and treasurer. The term of office shall be one year.

Article IX - Bylaws

The directors may adopt and amend bylaws and make such rules and regulations as four (4) of the five (5) of them may approve. The Bylaws must be consistent with these Articles or the laws of the State of Utah.

Article X - Assessments

A. The Corporation’s stock is assessable in such amounts, at such times, in such manner, and for purposes consistent with the Corporation’s purposes as the Board from time to time shall determine. Each member of the Corporation shall be liable for the assessment.

B. Each share of stock shall be assessable pursuant to the Utah Share Assessment Act, Utah Code Ann. §§16-101 to -312 as amended, for the purpose of raising funds to accomplish the purposes of the Corporation and to pay its debts, liabilities, or obligations. The Board shall have the discretion to levy assessments on other than a pro rata basis and may vary the amounts of the assessments among the members; such assessments must be equitable but need not be equal among the members.

C. In the event a member is in default of payment on an assessment, the corporation may, after reasonable notice to the delinquent member, take any reasonable action necessary to enforce payment of the delinquent assessment, including but not limited to:

Impose a late charge, penalty, or interest;
Suspend one (1) or more benefits of share ownership, including the right to vote, to transfer shares, or the delivery of water;
Sell the shares on which payment is delinquent at a limited public auction in conformance with the requirements of the Utah Share Assessment Act; 1. Cancel the delinquent Share and convert it to treasury stock;
Commencing legal action for specific performance to collect the unpaid assessment, including costs and reasonable attorney’s fees; and
Any other enforcement method adopted by the Board or set forth in the Bylaws and consistent with Corporation’s Articles.

D. No delay by the Corporation in exercising any right or single partial exercise of any such right under this Section shall operate as a waiver thereof. Enforcement by the Corporation of any right hereunder shall not constitute any election by it of remedies so as to preclude the exercise of any other remedy available to it.

Article XI - Stockholder Liability

The private property of the Corporation’s stockholders or members of this Corporation shall not be held liable or taken for the debts of obligations of this corporation.

Article XII - Meetings

At a location determined by the Board, the annual meeting of the shareholders shall be held on the first Monday of February each year for the Shareholders to elect Directors and for such other purposes as may come before such meeting. Notice of said meeting shall be given to each shareholder of record by mailing to the last known address of such shareholder a written notice thereof, ten (10) days prior to the holding of such meeting. Failure to hold the annual shareholder meeting or any other shareholder meeting at the time appointed therefor shall not prevent a meeting at any subsequent time upon ten (10) days written notice thereof to each shareholder and shall not affect the validity of any corporate action or work a forfeiture or dissolution of the Corporation. Special meetings shall occur as set forth in the bylaws.

Article XIII - Removal From Office

Any elected director may be removed from office and his or her office declared vacant for misconduct or just cause by a two-thirds majority vote of the stock of the Corporation represented at a meeting called for that purpose, of which meeting and the purpose thereof, the offending officer and shareholders shall be given at least ten (10) days notice in writing. Said meeting may be called by the president or by a call signed by ten (10) percent of the stock issued.

Article XIV - Board Vacancy

A vacancy on the Board of Directors or other officers caused by resignation, death, removal, or disability shall be filled by the remaining directors by appointment, and said appointee shall hold his or her office until the next annual meeting, or until his or her successor is elected and qualified.

Article XV - Amendments

These Articles of Incorporation may be amended by a two-thirds (2/3) majority vote of all the outstanding voting shares; the vote must occur at a meeting called for that purpose.

Verification

The undersigned, as directors of XXXXX Company hereby certify that the above Amended Articles of Incorporation were adopted by a vote of ____ in favor and ____ vote in opposition by a special meeting of the shareholders called for the purpose of amending the articles at a meeting held on _____ in _____, Utah.

________________________ [Name and address]