Shelby Energy Cooperative

“Line 6 explanation - must be a member to receive electric service. Each member has 1 vote. May have more than 1 service per membership.”

“Line 7a explanation - nominating committee meets every year and a member is selected by the committee to run for director. Any member may run for director with a petition signed by 100 or more eligible members.”

“Line 7b explanation - articles of incorporation can only be changed by a 2/3 majority vote of the members. Bylaws may be altered, amended, or repealed at any special or regular board meeting with a majority vote of the board.”

“Line 11b explanation - the form 990 is provided to the board of directors for review approximately a week before the regular board meeting is held. Members of the board have the opportunity to ask questions prior to the meeting. The form 990 is then placed on the agenda for review with the full board at the regular meeting prior to being submitted to the irs.”

“Should any situation be reported or come to the attention of the board, it would be addressed immediately. If the situation involves a key employee, it would be reported to and addressed by the president & ceo. Should the situation involve the president & ceo or a member of the board, it would be reported to the cooperative's legal counsel. The board is provided the applicable board policy on an annual basis to review and sign a conflict of interest statement as does management, key employees, and lead staff members.”

“The president & ceo performs an annual wage and salary study with assistance and oversight of the applicable manager. An independent human resources consultant conducts a review of the wage information assembled for all employees. The board receives compensation data from both local and national surveys of electric cooperatives. The board uses this data, along with a performance review of the ceo, to set compensation.”

“Articles of incorporation and bylaws are made available to each new member on the cooperative's website and available upon request. Annual financial information is provided to all members in the newsletter mailed to each member, at the annual membership meeting, on the cooperative's website, and on the kentucky public service commission website.”

“Net margins 1,431,263. Comprehensive income 139,909. Refunds of capital credits -50,351. Other equities 20,847.”

“No changes from prior year.”

“Represents patronage capital allocated to members in accordance with the bylaws of the cooperative. This reporting results in a difference between book and income reported on the form 990 by the same amount.”