Académique Documents
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DARCA
Ditch and Reservoir Company Alliance
2010-2011
Register Online www.darca.org
DITCH AND RESERVOIR COMPANY ALLIANCE
DARCA
1630A 30th Street, #431
Boulder, Colorado 80301
970-412-1960
John McKenzie, Executive Director
John.McKenzie@darca.org
'HQYHU&RORUDGR
2FWREHU , 20
etriffo1@aol.com
INTRODUCTION
There are also some bylaws I wrote from scratch which do not
originate with any ditch company.
Eve Triffo
etriffo1@aol.com
P.O. Box 464
Canon City, CO 81215
DARCA, 1--
TABLE OF CONTENTS
STATE OF COLORADO
SUPREME COURT
BOARD OF CONTINUING LEGAL & JUDICIAL EDUCATION
1560 Broadway #1820
Denver, CO 80202
(303) 866-6500
NOTICE OF ACCREDITATION
The Board has accredited the following continuing legal education seminar under Rule 260:
GENERAL ETHICS
NAME OF SEMINAR LOCATION DATE SPONSOR CREDITS
CREDITS
Colorado attorneys and judges who attend the entire seminar may claim the credits indicated. If any Ethics Credits
are indicated, they may be claimed by attending those parts of the seminar indicated below the seminar's name.
Ethics credits are NOT IN ADDITION TO General Credits. General and Ethics Credits are NOT added to or
subtracted from each other. This accreditation is awarded provided the sponsor permits the Board's staff to attend
the seminar; gives every Colorado attorney and judge attending a copy of this combined notice/affidavit form;
accepts at the seminar, this form after it is executed by attending Colorado attorneys and judges; and delivers the
executed forms to the Board within 10 days after the seminar.
AFFIDAVIT
INSTRUCTIONS: Colorado attorneys and judges may report CLE Credits earned at this seminar by executing this
affidavit and returning the ENTIRE notice/affidavit form to the Sponsor AT THE SEMINAR according to the sponsor's
instructions. This credit will not be entered into the Board's records unless your name and Colorado attorney
registration number are PRINTED CLEARLY and your signature appears in ths spaces below.
SIGNATURE DATE
Sample articles of incorporation
of a mutual ditch company
Parenthetical comments are shown in [italics].
ARTICLES OF INCORPORATION
OF
ABC [Mutual] DITCH COMPANY
For the purpose of forming a mutual ditch company pursuant to C.R.S. 7-42-101 et seq. and the provisions of the Colo-
rado Revised Nonprot Corporation Act, the undersigned, being three natural persons of the age of eighteen years or more,
hereby make, execute and acknowledge the following articles of incorporation.
[The name of the company can, but is not required to, reect its mutual ditch status.]
ARTICLE I
Name
The name of the corporation shall be ABC [Mutual] DITCH COMPANY (hereinafter referred to as the Company).
ARTICLE II
Duration
[The duration of the company can be set by the incorporators at any length of time short of perpetual. However, it is not generally
recommended to identify less than a perpetual duration.]
ARTICLE III
Purposes
[The purpose or purposes of the company is not required to be set forth in the articles of incorporation. However, C.R.S. 7-42-101(1)
does at least require that the articles of incorporation state: the stream, channel, or source from which the water is to be taken; the point
or place at or near which the water is to be taken; the location, as near as may be, of any reservoir intended to be constructed; the line,
as near as may be, of any ditch or pipeline intended to be constructed; and the use to which the water is intended to be applied. See
Sample Article III subparagraphs A and B below. The Incorporators should carefully consider, with counsel, the specic needs of the
company and draft the provisions of the articles of incorporation accordingly.]
The purposes for which the Company is organized and the nature of the business to be carried on by it, without pecuniary
gain or prot, are as follows:
A. To acquire, own, hold, improve, manage, control, operate, repair and maintain the real property commonly known
as the [name of ditch], together with all water rights related thereto, whether now existing or as may be acquired in the
future, including the water right originally decreed to [identify decreed water rights]. The source of supply of said water
right is [identify source of supply]. [Identify the point of diversion, the line of the ditch].
B. To use the yield from said water rights for the benet of shareholders who own the rights to its use for all benecial
purposes recognized by law.
D. To do all and everything necessary, suitable, or proper for the accomplishment, attainment, or exercise of any of the
objects and purposes set forth herein, and to do every other act or thing incidental or appurtenant to or growing out of or
connected with those objects and purposes.
The enumeration of any specic purpose shall not be construed to limit or restrict in any manner the general rights of the
corporation as provided by law, nor shall the expression of one purpose be determined to exclude another.
ARTICLE IV
Principal Ofce
[Identication of the principle ofce of the company is required by C.R.S. 7-102-102 (1)(d).]
ARTICLE V
Powers
[Description of the powers of the company is not required to be included in the articles of incorporation. However, the
incorporators should consider, with advice of counsel, enumerating at least the basic powers to do business the corporation
possesses as recommended below.]
In furtherance of its purposes but not otherwise, the Company shall have the following powers:
A. All of the powers and privileges conferred upon nonprot corporations and mutual ditch companies by the common
law and the statutes of the State of Colorado in effect from time to time.
B. All of the powers necessary, suitable, proper or desirable to perform the obligations and duties and to exercise the rights
and powers of the Company including, without limitation, the following powers:
1. To make, in the manner prescribed by law, assessments on its capital stock, to be levied pro rata on the shares of stock
for the purpose of meeting operating expenses, paying any indebtedness of the Company, or both, and to enforce
such assessments according to Colorado law.
2. To have a perpetual lien upon its capital stock and the water rights represented by the same for any and all assess-
ments duly levied until the same shall be fully paid.
3. To keep in good order, condition and repair, all of the assets of the Company.
4. To obtain and maintain, to the extent available, all policies of insurance appropriate or required by law.
5. To protect and defend the assets of the Company from loss and damage by suit or otherwise.
6. To own, hold, improve, manage, control, operate, repair and maintain the assets of the Company in connection with
its affairs, subject to these Articles of Incorporation and the Bylaws.
7. To pay all expenses in connection with the performance of its duties and the exercise of its powers and all ofce,
legal, accounting and other expenses incident to the conduct of the business of the Company, specically including
all licenses, taxes, charges, fees, assessments or governmental charges levied or imposed against the assets of the
Company.
8. To borrow funds and to give security therefore in order to pay for any expenditure or outlay required pursuant to
law, these Articles of Incorporation or the Bylaws, and to execute all instruments in evidence of such indebtedness
as the Board of Directors may deem necessary or desirable.
9. To enter into contracts within the scope of the Companys duties and powers, and to do all other acts necessary,
appropriate or advisable in carrying out any purpose of the Company with or in association with any person, rm,
association, corporation or other entity or agency, public or private.
11. To keep and maintain detailed, full and accurate books and records showing in chronological order all of the
receipts, expenses, and disbursements of Company funds and, upon the vote of a majority in interest of the share-
holders, to cause a complete audit to be made of the books and records by a certied public accountant.
12. To supervise all ofcers, agents and employees of the Company and to see that their duties are properly performed.
13. To designate and remove the personnel necessary for the operation, maintenance, and repair and replacement of
the assets of the Company.
14. To adopt, alter, amend and repeal such Bylaws as may be necessary or desirable for the proper management of
the affairs of the Company, provided however, that such Bylaws may not be inconsistent with or contrary to any
provisions of law or these Articles of Incorporation.
ARTICLE VI
Capital
The aggregate number of shares which the Company shall have authority to issue is [identify number of shares of stock]
shares, without par value, which shares shall be designated Common Stock. Such Common Stock shall be fully assess-
able. No assessment shall, however, be made unless the question of making such assessment shall rst be submitted to the
holders of the Common Stock of the corporation at the annual meeting, or at a special meeting called for that purpose, and
a majority of the holders of Common Stock, either in person or by proxy voting thereon, shall vote in favor of making such
assessment.
[Information regarding shares of the company (the information required by C.R.C. 7-106-101) is required to be included in the
articles of incorporation by C.R.S. 7-102-102 (1)(b). The Incorporators should seek advice of counsel in determining how best to draft
the voting provisions to effect the goals of the company.]
ARTICLE VII
Voting
Each outstanding share of Common Stock shall be entitled to one vote and eachoutstanding fractional share of Common
Stock shall be entitled to a corresponding fractional vote on each matter submitted to a vote of shareholders, except that at
each election for directors every shareholder entitled to vote at such election shall have the right to a number of votes equal to
the number of such shareholders shares and fractional shares of Common Stock multiplied by the number of directors to be
elected. A shareholder may cumulate such votes for the election of directors to be elected, but not for any other purpose.
[This is a sample voting rights section for demonstration purposes only. Voting rights of the shareholders should be carefully consid-
ered by the Incorporators, with advice of counsel, and should be drafted to t the specic needs of the company.]
ARTICLE VIII
Preemptive rights
The shareholders shall have no preemptive rights to acquire any unissued or treasury shares of stock of the Com-
pany, securities convertible into shares, or securities carrying stock purchase options or warrants to acquire any unissued or
treasury shares of stock of the Company.
[This is a sample section dealing with preemptive rights for demonstration purposes only. The Incorporators should carefully con-
sider, with advice of counsel, what rights shareholders will and will not have and draft the provisions of the articles of incorporation to
t the specic needs of the company.]
ARTICLE IX
Quorum of Shareholders
A quorum at any meeting of shareholders of the Company shall consist of a majority of the shares of the Company entitled
to vote at such meeting, and the same proportion of the shares of any class entitled to vote as a class at such meeting, repre-
sented in person or by proxy.
ARTICLE X
Regular Shareholder Vote
At any meeting of shareholders at which a quorum is present, the afrmative vote of a majority of the shares present in person or
by proxy and entitled to vote on the matter shall be the act of the shareholders.
[This is a sample section dealing with shareholder voting for demonstration purposes only. The Incorporators should carefully consider, with advice
of counsel, what voting requirements will t the specic needs of the company and draft the provisions of the articles of incorporation accordingly.]
ARTICLE XI
Shareholder Voting on Extraordinary Actions
With respect to the following extraordinary actions which may be taken by the Company, and which require the vote or concur-
rence of the holders of the outstanding shares of the Company shares entitled to vote thereon, the following afrmative vote of such
shares shall be required to constitute approval of such action.
B. Two-thirds to voluntarily dissolve the Company by the act of the Company or to revoke voluntary dissolution proceedings
previously initiated by the Company.
[This is a sample section dealing with shareholder voting for demonstration purposes only. The Incorporators should carefully consider, with advice
of counsel, what voting requirements will t the specic needs of the company and draft the provisions of the articles of incorporation accordingly.]
ARTICLE XII
Right of Directors and Ofcers to Contract with Company
It being the express purpose and intent of this Article to permit the Company to engage in transactions with other corporations,
rms, associations, or entities of which any or all of the directors and ofcers of the Company may be directors, ofcers, or mem-
bers or in which any or all of them may have pecuniary interests, no contract or other transaction between the Company and one
or more of its directors or any other corporation, rm, association, or entity in which one or more of its directors are directors or
ofcers or are nancially interested shall be either void or voidable solely because of such relationship or interest or solely because
such directors are present at the meeting of the board of directors or a committee of the board which authorizes, approves, or raties
such contract or transaction or solely because their votes are counted for such purpose if:
1. The fact of such relationship or interest is disclosed or known to the board of directors or committee which authorizes, ap-
proves, or raties the contract or transaction by a vote or consent sufcient for the purpose without counting the votes or
consents of such interested directors; or
2. The fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, ap-
prove, or ratify such contract or transaction by vote or written consent; or
Furthermore, common or interested directors may be counted in determining the presence of a quorum at a meeting of the board
of directors or a committee of the board which authorizes, approves, or raties any such contract or transaction.
[These provisions are not required to be included in the articles of incorporation. However, it is recommended that the incorporators consider,
with advice of counsel, what will t the specic needs of the company and draft the provisions of the articles of incorporation accordingly.]
ARTICLE XIII
Board of Directors
The business and affairs of the Company shall be conducted, managed and controlled by the Board of Directors. The number of
directors of the Company shall be xed by the bylaws, or if the bylaws fail to x such a number, then by resolution adopted from
time to time by the Board of Directors, provided that the number of directors shall not be less than three (3) nor more than ve (5).
Any vacancies on the Board of Directors occurring before the rst election of Directors by the shareholders shall be lled
by the remaining Directors.
[These provisions are not required to be included in the articles of incorporation. However, it is recommended that the incorporators
consider, with advice of counsel, what will t the specic needs of the company and draft the provisions of the articles of incorporation
accordingly.]
ARTICLE XIV
Ofcers
The Board of Directors may appoint a President, one or more Vice Presidents, a Secretary, a Treasurer and such other
ofcers as the Board of Directors in accordance with the provisions of the Bylaws deems to be in the best interests of the
Company. The ofcers shall have such duties as may be prescribed in the Bylaws and shall serve at the pleasure of the Board
of Directors.
[This provision is not required to be included in the articles of incorporation. However, it is recommended that the incorporators
consider, with advice of counsel, what will t the specic needs of the company and draft the provisions of the articles of incorporation
accordingly.]
ARTICLE XV
Initial Registered Ofce and Agent
The initial registered ofce of the Association shall be [insert address of registered agent ofce]. The initial registered agent
at such ofce shall be [insert name of registered agent].
[Identication of the initial registered ofce and agent of the company is required by C.R.S. 7-102-102 (1)(c).]
ARTICLE XVI
Dissolution
In the event of the dissolution of the Company, either voluntarily by the shareholders, by operation of law or otherwise,
those assets of the Company which are held for the benet of the shareholders including any water rights held by the Com-
pany and not directly by the shareholders and corresponding water distribution system shall be returned to the shareholders.
Any additional assets shall be disposed of pursuant to the requirements of law.
[A description of what happens in the event of dissolution is not required to be included in the articles of incorporation. Dissolution of
a corporation and distribution of assets is otherwise provided for by statute. However, because statutes change, the incorporators should
consider including what they intend to happen in the event of dissolution.]
ARTICLE XVII
Incorporation
Name Address
[Identication of the true name and address of each incorporator of the company is required by C.R.S. 7-102-102 (1)(e). For
formation of a mutual ditch company, C.R.S. 7-42-101(1) requires that there be at least three (3) incorporators.]
__________________________________________
[Incorporator]
__________________________________________
[IncorporatorSTATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me on this ___ day of ___________________, 2005, by
, and .
Notary Public
My commission expires:
[Name and address of registered agent] hereby consents to appointment as the initial Registered Agent of the Company.
The name and mailing address of the individual who causes this document to be delivered for ling is [Insert name and address].
F. Action Items:
ARTICLE I
OFFICES
The principal ofce of the Corporation in the State of Colorado shall be located in the County of ________ or __________.
The Corporation may have such other ofces, either within or without the state of incorporation as the Board of Directors may
designate or as the business of the Corporation may from time to time require.
ARTICLE II
STOCKHOLDERS
1. ANNUAL MEETING.
The date of the annual meeting of the stockholders shall be set by the Board of Directors each year, but if the directors do
not otherwise specify, it shall be held on the rst ________ (day of week) of _____________ (month) in each year at the hour
of __:00 oclock a.m. / p.m., for the purpose of electing directors and for the transaction of such other business as may come
before the meeting. If the day xed for the annual meeting shall be a legal holiday such meeting shall be held on the next suc-
ceeding business day.
2. SPECIAL MEETINGS.
Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or by the directors, and shall be called by the President at the request of the holders of not less than ___ (sugges-
tion--25) per cent of all the outstanding shares of the Corporation entitled to vote at the meeting.
3. PLACE OF MEETING.
The directors may designate any place within _______ or ______ County, Colorado, unless otherwise prescribed by statute,
as the place of meeting for any annual meeting or for any special meeting called by the directors. A waiver of notice signed by
all stockholders entitled to vote at a meeting may designate any place, either within or without the state unless otherwise pre-
scribed by statute, as the place for holding such meeting. If no designation is made, or if a special meeting be otherwise called,
the place of meeting shall be the principal ofce of the Corporation.
4. NOTICE OF MEETING.
Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than __ (suggest 10) nor more than __ (suggest 90) days
before the date of the meeting, either personally or by mail, by or at the direction of the President, or the Secretary, or the ofcer
or persons calling the meeting, to each stockholder 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 stockholder at the stockholders address as
it appears on the stock transfer books of the Corporation, with postage thereon prepaid.
7. QUORUM.
At any meeting of stockholders ___________ (suggest one-fth up to a majorityi.e. 50% + 1 share) of the outstanding
shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stock-
holders. If less than said number of the outstanding shares is represented at a meeting, a majority of the shares so represented
may adjourn the meeting from time to time without further notice. 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 notied.
The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
8. PROXIES.
At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or by the stock-
holders duly authorized attorney in fact. Such proxy shall be led with the Secretary of the Corporation before or at the time
of the meeting.
9. VOTING.
Each stockholder entitled to vote in accordance with the terms and provisions of the Articles of Incorporation and these
bylaws shall be entitled to one vote, in person or by proxy, for each share of stock entitled to vote held by such stockholder.
A fractional share shall be entitled to a fractional vote in the same amount as the fractional share. Upon the demand of any
stockholder, the vote for directors and upon any question before the meeting shall be by ballot. All elections for directors shall
be decided by plurality vote; all other questions shall be decided by majority vote except as otherwise provided by the Articles
of Incorporation or the laws of this State.
ARTICLE III
BOARD OF DIRECTORS
1. GENERAL POWERS.
The business and affairs of the Corporation shall be managed by its Board of Directors. The directors shall in all cases act as
a Board, and they may adopt such rules and regulations for the conduct of their meetings and the management of the Corpora-
tion, as they may deem proper, not inconsistent with these bylaws and the laws of this State.
2. PERFORMANCE OF DUTIES.
A director of the Corporation shall perform the directors duties as a director, including the directors duties as a member of
any committee of the Board upon which the director may serve, in good faith, in a manner the director reasonably believes to be
in the best interests of the Corporation, and with such case as an ordinarily prudent person in a like position would use under
similar circumstances. In performing the directors duties, a director shall be entitled to rely on information, opinions, reports,
or statements, including nancial statements and other nancial data, in each case prepared or presented by persons and groups
listed in paragraphs (a), (b), and (c) of this Paragraph 2; but the director shall not be considered to be acting in good faith if the
director has knowledge concerning the matter in question that would cause such reliance to be unwarranted. A person who so
performs the directors duties shall not have any liability by reason of being or having been a director of the Corporation. Those
persons and groups on whose information, opinions, reports, and statements a director is entitled to rely upon are:
a. One or more ofcers or employees of the Corporation whom the director reasonably believes to be reliable and com-
petent in the matters presented;
b. Counsel, public accountants, or other persons as to matters which the director reasonably believes to be within such
persons professional or expert competence; or
c. A committee of the Board upon which the director does not serve, duly designated in accordance with the provision
of the Articles of Incorporation or the bylaws, as to matters within the committees designated authority, which committee the
director reasonably believes to merit condence.
4. REGULAR MEETINGS.
A regular meeting of the directors shall be held without other notice than this bylaw immediately after, and at the same
place as, the annual meeting of stockholders. The directors may provide, by resolution, the time and place for the holding of
additional regular meetings without other notice than such resolution.
5. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of the President or any two directors. The person or
persons authorized to call special meetings of the directors may x the place for holding any special meeting of the directors
called by them.
6. NOTICE.
Notice of any special meeting shall be given at least __ (suggest 5) days previously thereto by written notice delivered person-
ally, or by electronic mail or mailed to each director at the directors business address. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by
electronic mail, such notice shall be deemed to be delivered when the electronic mail is delivered to the electronic network.
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.
7. QUORUM.
At any meeting of the directors the majority shall constitute a quorum for the transaction of business, but if less than said
number is present at a meeting. The act of the majority of the directors present at a meeting at which a quorum is present shall
be the act of the directors. A majority of the directors present may adjourn the meeting from time to time without further notice.
The associate director shall not be counted in determining a quorum.
8. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the directors.
13. RESIGNATION.
A director may resign at any time by giving written notice to the Board, the President or the Secretary of the Corporation.
Unless otherwise specied in the notice, the resignation shall take effect upon receipt thereof by the Board or such ofcer, and
the acceptance of the resignation shall not be necessary to make it effective.
14. COMPENSATION.
No compensation shall be paid to directors, as such, for their services, but by resolution of the Board a xed sum and ex-
penses for actual attendance at each regular or special meeting of the Board may be authorized. Such amount may be designated
ARTICLE IV
OFFICERS
1. NUMBER.
The ofcers of the Corporation shall be a President, a Vice-President, a Secretary and a Treasurer, each of whom shall be
elected by the directors. Such other ofcers and assistant ofcers as may be deemed necessary may be elected or appointed by
the directors. All ofcers of the Corporation, except the Secretary, shall be stockholders of the Corporation.
3. REMOVAL.
Any ofcer or agent elected or appointed by the directors may be removed by the directors whenever in their judgment the
best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights,
if any, of the person so removed.
4. VACANCIES.
A vacancy in any ofce because of death, resignation, removal, disqualication or otherwise, may be lled by the directors
for the unexpired portion of the term.
5. PRESIDENT.
The President shall be the principal executive ofcer of the Corporation and, subject to the control of the directors, shall in
general supervise and control all of the business and affairs of the Corporation. The President shall, when present, preside at
all meetings of the stockholders and of the directors. The President may sign, with the Secretary or any other proper ofcer of
the Corporation thereunto authorized by the directors, certicates for shares of the Corporation, any deeds, mortgages, bonds,
contracts, or other instruments which the directors have authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the directors or by these bylaws to some other ofcer or agent of the Corpora-
tion, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the ofce
of President and such other duties as may be prescribed by the directors from time to time.
6. VICE-PRESIDENT.
In the absence of the President or in event of the Presidents death, inability or refusal to act, the Vice-President shall per-
form 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 the Vice-President by
the President or by the directors.
7. SECRETARY.
The Secretary shall keep the minutes of the stockholders and of the directors meetings in one or more books provided for
that purpose, see that all notices are duly given in accordance with the provisions of these bylaws or as required, be custodian of
the corporate records and of the seal of the Corporation and keep a register of the post ofce address of each stockholder which
shall be furnished to the Secretary by such stockholder, have general charge of the stock transfer books of the Corporation and
8. TREASURER.
If required by the directors, the Treasurer shall give a bond for the faithful discharge of the Treasurers duties in such sum and
with such surety or sureties as the directors shall determine. The Treasurer shall have charge and custody of and be responsible
for all funds and securities of the Corporation; receive and give receipts for moneys due and payable to the Corporation from
any source whatsoever, and deposit all such moneys in the name of the Corporation in such banks, trust companies or other
depositories as shall be selected in accordance with these bylaws and in general perform all of the duties incident to the ofce
of Treasurer and such other duties as from time to time may be assigned to the Treasurer by the President or by the directors.
9. SALARIES.
The salaries of the ofcers shall be xed from time to time by the directors and no ofcer shall be prevented from receiving
such salary by reason of the fact that the ofcer is also a director of the Corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS.
The directors may authorize any ofcer or ofcers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority may be general or conned to specic in-
stances.
2. LOANS.
No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the directors. Such authority may be general or conned to specic instances.
4. DEPOSITS.
All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the directors may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
2. TRANSFERS OF SHARES.
(a) Upon surrender to the Corporation or the transfer agent of the Corporation of a certicate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to
issue a new certicate to the person entitled thereto, and cancel the old certicate; every such transfer shall be entered on the
transfer book of the Corporation which shall be kept at its principal ofce.
(b) The Corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof, and, accord-
ingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person
whether or not it shall have expenses or other notice thereof, except as expressly provided by the laws of this State.
(c) The ofcers of the Corporation shall not issue certicates for shares in the Corporation for less than
(insert smallest number of shares or smallest fractional share that the company desires to transfer), except that certicates shall
be issued in lieu of shares of stock of less than one (1) which were in existence on (insert date of en-
ARTICLE VII
FISCAL YEAR
The scal year of the Corporation shall begin on the 1st day of January in each year.
ARTICLE VIII
ORGANIZATION AND DIVIDENDS
This Corporation is organized as a nonprot corporation exclusively for irrigation purposes. The directors may not
declare or pay dividends on the outstanding shares of the Corporation.
ARTICLE IX
SEAL
The directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the
Corporation, the state of incorporation, year of incorporation and the words, Corporate Seal.
ARTICLE X
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be given to any stockholder or director of the Corpo-
ration under the provisions of these bylaws or under the provisions of the Articles of Incorporation, a waiver thereof in writ-
ing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI
AMENDMENTS
These bylaws may be altered, amended or repealed and new bylaws be adopted by the following method: A vote of the
Board of Directors at any regular meeting of the board, or at any special meeting called for that purpose, provided that notice
of intention to move an amendment or other change, together with the text of such amendment or change, shall have been
led with the secretary, in writing, at least ten days before such meeting; and when any such notice is led with the secretary,
the secretary shall at once mail to each of the members of the board a copy of such notice. [Insert provision here for voting
requirements above a majority vote of the stockholders, such as 2/3 or _ of the quorum or such as a majority of all issued and
outstanding shares.]
ARTICLE XII
INDEMNIFICATION
The Corporation shall indemnify each of its directors, or ofcers, agents, and employees or former directors, ofcers, agents,
or employees or any afliated organization to the maximum extent permitted by law.
ARTICLE XIII
LIABILITY
Personal liability of a director of the Corporation for monetary damages for breach of duciary duties as a director of the
Corporation to the Corporation or to its stockholders is eliminated to the maximum extent permitted by law.
ARTICLE XIV
DISTRIBUTION OF WATER
2. No stockholder shall take or cause to be taken more than the stockholders proportionate share of water from the sys-
tem.
3. No one shall draw water from the system without prior permission from the manager.
4. The Corporation may transport water allotted by ____________________ (insert names of supplemental water pro-
viders), Conservancy District or any other foreign water not owned by the Corporation, for individuals who are stockholders
or non-stockholders of this Corporation, upon such terms and conditions and for such considerations as the Board of Direc-
tors of the Corporation may from time to time determine. Delivery of such water shall be made at an established point in the
Corporations system, and the stockholder or non-stockholder shall arrange for the transportation of the water from the point
of delivery to the place of use.
5. The Board of Directors shall have the unrestricted discretion to control the location and construction of checks,
headgates and other diversion structures installed in the system, and as a condition for permitting any such checks, headgates
or diversion structures to require compliance with such structural or engineering specications as are reasonably necessary to
insure the safety and structural integrity of the system and the unimpeded and undiminished ow of water therein.
6. It shall be the policy of the Corporation, its directors and ofcers that all decreed water allocated to or delivered by
the Corporation to its stockholders or others shall be benecially used and administered only within the boundaries of the
Corporations area of service.
7. Each stockholder or person receiving water through the Corporations system desiring to change the place to which
any water the stockholder or person may be entitled shall be delivered or to make any change in water rights of any kind or
nature shall make prior written request to the Board. If in the opinion of the Board, such change can be made without injury
to the ditches, the reservoirs, the Corporation or other stockholders, such water may be delivered to such place or places as
requested upon such terms and conditions imposed by the Board. After such Board approval, such person shall notify in writing
all stockholders and other persons affected by the change prior to such change.
8. Except as hereinafter provided, no water shall be furnished to other than stockholders and to stockholders only in
proportion as the amount of stock the stockholders own or control is to the whole capital stock of the Corporation. It is made
the duty of the manager of this Corporation each and every year before any water is drawn from the reservoirs of the Corpora-
tion, to ascertain as near as may be the amount of water contained in said reservoirs, and to make and estimate of the number
of days said water can be continuously run in the ditches of the Corporation upon a basis of 1/10 cubic foot water per second
time per share, and stockholders desiring to use water for irrigation, may have the same turned out to them upon this basis at
a regular hour on any day between May 1 and October 31 each year (both dates inclusive). In order that water may not be run
to disadvantage or waste, it shall be necessary that at least CFS be ordered to initiate or to continue daily water
delivery service. All river water belonging to the Corporation run in the ditches, and all surplus water turned into the reservoirs
after they have been measured shall be divided pro rata among the stockholders. All water not delivered pursuant to such calls
prior to the rst day of November shall be forfeited to the Corporation for the benet of all its stockholders to be apportioned
among them for delivery during the next succeeding year.
ARTICLE XV
ASSESSMENT ON STOCK AND LIEN
1. If the Corporation deems it necessary to raise funds to keep its ditches, canals, or reservoirs in good repair or to pay
any indebtedness theretofore contracted or the interest thereon, the Corporation shall have power to make an assessment on the
capital stock thereof, to be levied pro rata on the shares of stock payable in money, labor, or both, for the purpose of keeping
the property of the Corporation in good repair and for the payment of any indebtedness or interest thereon.
2. But no such assessment shall be made unless the question of making the assessment is rst submitted to the stock-
holders of the Corporation at an annual meeting or at a special meeting called for that purpose, if a quorum is present, and the
majority of stock represented at such meeting, either by the owner in person or proxy, entitled to vote thereon shall vote in favor
of making such assessment; and if said stockholders fail to hold any such meeting or fail to make or authorize any assessment
within ninety days after the close of the Corporations scal year, the directors shall have power to make any such assessment
at any regular or special meeting called therefor for that year.
4. The shares of stock shall be deemed personal property and transferable as such in the manner provided by the bylaws.
A forfeiture or sale of stock on failure to pay the assessments or any other amounts due that from time to time may become due
are to be conducted in the manner provided in this bylaw. No forfeiture of stock shall be declared as against any estate or against
any stockholder before demand has been made for the amount due thereon either in person or by written or printed notice duly
mailed to the last known address of such stockholder at least thirty days prior to the time the forfeiture is to take effect. If the
assessment is not paid within such 30 day period, then the Secretary is directed to cancel on the books and records of the Cor-
poration, the stock for which the amount due is unpaid, and is directed to reissue the stock in the name of the Corporation. At
the next annual meeting of the stockholders of the Corporation, such stock shall be offered for sale to the stockholders and shall
be sold to the highest bidder. If the proceeds from the sale are insufcient to satisfy the amount due the Corporation, including
all reasonable and proper costs of making and giving such notice, the Corporation may maintain an action to recover such de-
ciency. The proceeds of any sale, over and above the amount due on said shares, shall be paid to the delinquent stockholder.
POLICY STATEMENT
STATEMENT: Release of information contained in the books, records or minutes of the Company shall be controlled in the
following manner:
A. General Public. The following information of a general or routine nature regarding the Company shall be available
to persons either by written or oral request:
A.1 The Companys Articles of Incorporation, Bylaws, charges, rules and regulations;
A.3 Any publications the Company may have for general distribution; and
A.4 Publications subscribed to or otherwise obtained by the Company bearing on one or more aspects of the organization
and operation.
B. Stockholders
B.1 In addition to the above information available to the general public, the following information shall be avail-
able to a stockholder of the Company by either written or oral request:
B.1.1 The operating and other nancial reports that are regularly made to lenders to the Company;
B.1.2 monthly or periodic or special operating and nancial reports submitted by Management to the
Board of Directors;
B.1.3 adopted budgets for current and future operations and capital improvements;
B.1.4 adopted work plans for the Companys future construction, operation and maintenance of its system;
and
SECTION 1
BOARD OF DIRECTORS
2. The Board of Directors (the Board) shall consist of three members who shall
be the President, the Vice President and the Secretary/Treasurer elected each year at the
annual stockholder meeting. Members of the Board must be stockholders or, in the case
of stockholders that are corporations, partnerships, limited liability companies or other
entities with the capacity to hold property, persons designated by such entity as its
representative. Each member of the Board shall hold office for one year or until his or
her successor shall have been elected and qualified.
3. Notice of the time, date and location of the annual stockholders meeting and of
any special stockholders meeting shall be given to each stockholder by mail or personal
service at least twenty (20) days prior to the date set for such meeting.
SECTION 2
OFFICERS
3. The officers and agents of the Company shall be entitled to receive such
reasonable compensation for the services provided to the Company as shall from time to
{00048947 / 2}
time be fixed by the Board and in all cases shall be entitled to be repaid for reasonable
expenses incurred and paid by them in the transaction of the Companys business.
SECTION 3
PRESIDENT
It shall be the duty of the President to preside at all stockholders and Board
meetings, to sign all bylaws and written contracts of the Company, and to call meetings
of the Board or stockholders whenever in his or her judgment the interest of the Company
or the law shall require them.
SECTION 4
VICE PRESIDENT
The Vice President shall preside at stockholders and Board meetings in the event
that the President is absent, and shall have the authority to act in the capacity of the
President in the event that the President is and will not within a reasonable amount of
time be available to take any action that the Vice President, in his or her reasonable
judgment, believes to be necessary or appropriate.
SECTION 5
GENERAL SUPERINTENDENT/DITCH RIDER
1. The General Superintendent, under the general supervision of the Board, shall
have charge of the Companys ditches, laterals, reservoirs and right-of-way; employ all
necessary labor and assistance, including a ditch rider, for the care, maintenance,
improvement, and control of such ditches, laterals, reservoirs and right of ways, and the
operation of the Companys water service, and to fix the compensation of such labor and
assistance, have the custody of the property of the Company where such custody is not
otherwise specially provided for, and generally do and perform all other things which are
usually required or expected of general superintendents of ditch companies.
2. The duties of the ditch rider shall be such as are ordinarily required of ditch
riders in ditch companies.
SECTION 6
SECRETARY/TREASURER
1. It shall be the duty of the Secretary/Treasurer to receive and safely keep and
account for all moneys belonging to the Company, and to render a report on the accounts
2
and finances of the Company at the stockholders annual meeting next following his
election.
2. The Treasurer shall not pay out money except as authorized by the Board.
3. Subject to the approval of the Board, the Secretary/Treasurer may engage the
assistance of such accounting and/or secretarial services as may be needed for the
professional and efficient performance of the duties of the Secretary/Treasurer. All
services provided by assistants shall be performed under the supervision of the
Secretary/Treasurer.
5. The Secretary/Treasurer shall also file and preserve or cause to be filed and
preserved the Companys papers and correspondence and all bonds entered into by the
officers of the Company and upon being tendered a reasonable fee therefore, shall make a
certified copy of any Company record, paper, file or bylaw for the use of any person
entitled to receive a copy of such document.
8. It shall especially be the duty of the Secretary/Treasurer to collect all moneys due
the Company from persons who fail to make a voluntary payment.
9. The Secretary/Treasurer shall maintain the stock records of the Company, and the
Companys stock records shall be subject to inspection at all reasonable times by the
Companys stockholders and other persons entitled to inspect such records. No transfers
or assignments of shares of Company stock shall be effective unless an endorsement to
that effect is entered by the Secretary/Treasurer in the Companys stock book.
SECTION 7
POWERS AND DUTIES OF THE BOARD OF DIRECTORS
1. The Board shall have the general supervision of the Companys business, may
enact and repeal bylaws, may remove any officer for incompetence or neglect of duty or
for other good cause and may require all officers of the Company to give bond for the
faithful discharge of their duties.
2. Two members of the Board shall constitute a quorum for the transaction of
business, except in enacting and repealing bylaws. Meetings of the Board of Directors
3
may be conducted by telephone conference so long as the telephone facilities permit all
of the participants to hear and be heard by each of the other participants.
3. The Board shall have the power to take such actions as may be necessary to
prevent obstructions in the ditch, to prohibit concentrated livestock crossings of the ditch,
and to otherwise protect the integrity of the ditch channel and structure against damage or
encroachment of any kind.
4. The Board shall also have the power to appoint committees comprised of Board
members, stockholders and representatives of stockholders to address specific issues or
topics. Committees shall report directly to the Board and shall engage in activities
authorized by the Board.
6. The Board may take an action without a Board meeting if all Board members
consent to the action in writing, or if it is ratified at the next Board meeting.
7. If a vacancy occurs on the Board, the remaining members of the Board may fill
it by appointment until the next annual election of stockholders.
8. The Board may call meetings of the stockholders whenever they deem it
necessary, and they shall call meetings of the stockholders at any time upon a written
petition of stockholders owning at least one-fourth of the capital stock of the Company.
9. The Board may appoint and remove at pleasure all employees of the Company
and shall prescribe their duties and fix their compensation.
10. The Board may make rules, regulations, and policy determinations not
inconsistent with the laws of the State of Colorado or the articles of incorporation or the
bylaws of the Company.
11. The Board may incur such indebtedness as it may deem necessary for carrying
out the objects and purposes of the Company, provided that such indebtedness shall not
to exceed $30,000.00 unless approved at a duly constituted meeting of stockholders.
12. The Board shall have authority to exercise entire control of the ditch and all of
its lateral headgates, including regulating the grade of the ditch by checks or locks when
it is necessary, to control the delivery of water through flumes and lock sluices and to
determine the location and type of headgates.
13. The Board shall cause the Secretary/Treasurer, or in the absence of the
Secretary/Treasurer, a member of the Board or other person designated by the Board, to
keep a complete record of all actions taken by written consent of the Board, at Board
meetings and at meetings of the stockholders.
4
14. The Board shall supervise all the acts of the officers and employees of the
Company and require the Secretary/Treasurer to keep full and accurate books of account
and to prescribe the form and mode of keeping such books of account.
15. The Board may audit and adjust the accounts prepared by or under the direction
of the Secretary/Treasurer, authorize payment of indebtedness of the Company and direct
the Secretary/Treasurer to prepare stock certificates to be issued to stockholders entitled
thereto for signature by the President and Secretary/Treasurer.
16. The Board shall cause or permit to be delivered to each individual stockholder
the pro rata share of water due to such stockholder according to the number of shares of
stock held by each stockholder in the Company using the existing or future structures and
facilities of the Company or using other structures and/or at other locations that have
been approved in a final judgment and decree of the District Court, Water Division 1
(Water Court) or substitute water supply plan (SWSP) approved by the State
Engineers Office. The Company may, but is not obligated, to construct new facilities or
structures for delivery of water.
17. The Board shall not permit to exist any obstruction of any kind placed in said
ditch whereby the natural flow of the water is impeded or is raised above the proper
grade, thus causing danger to the embankments.
18. The Board shall protect the integrity of the ditch banks by prohibiting
concentrated livestock crossings that threaten the stability of the banks or allow water to
escape the ditch channel.
19. In any proceedings before the Water Court and/or the State Engineers office
instituted by any stockholder(s) seeking a change in use of that portion of water rights
represented by such stockholders shares, the Board or such persons as may be authorized
by the Board may participate on behalf of the Company in order to ensure that adequate
terms and conditions are included in any final judgment and decree of the Water Court or
any SWSP approval to protect injury to the shares that are not the subject of such change
proceeding.
SECTION 8
CONDUCT OF STOCKHOLDERS MEETINGS
1. At all regular and called meetings each stockholder shall be entitled to cast one
vote for each share of stock owned by such stockholder, and a fractional vote equivalent
to any fraction of a share held.
2. The President shall appoint two (2) stockholders or other responsible persons as
tellers at each meeting of the stockholders at which a vote is taken. The tellers shall be
responsible for collecting and counting the votes in the election of the Board.
5
4. Any stockholders or persons designated for such purpose by stockholders that
are entities shall be eligible for any Company office.
5. The officer or agent having charge of the stock transfer books for shares of the
Company shall make, at least ten days before each meeting of stockholders, a complete
list of the stockholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address of, and the number of shares held by
each, which list, for a period of ten days prior to such meeting, shall be kept on file at the
principal office of the Company and shall be subject to inspection by any stockholder at
any time during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to inspection of any stockholder
during the whole time of the meeting. The original stock transfer book shall be prima
facie evidence as to who are the stockholders entitled to examine such list or transfer
books or to vote at any meeting of stockholders.
SECTION 9
HEADGATES/CHECKS
1. The Company shall own and control all headgates in the Companys ditches,
and it is hereby made the duty of the ditch rider to destroy and remove all headgates from
said ditches not put in and owned by the Company, except those permitted by the General
Superintendent.
6
3. All checks shall be examined under the direction of the General Superintendent
between the first of November and the first of the following March and the owners of
checks that are condemned shall be required to repair or reconstruct the same before the
fifteenth day of March under the directions of the General Superintendent or a person
deputized by the Board or the General Superintendent for that purpose.
SECTION 10
FENCES
No person shall build or maintain any fence or other erection upon the Companys
right of way without the consent of the General Superintendent, unless such person shall
provide and maintain a convenient gate way through such fence or such right of way or
within a reasonable distance therefrom.
SECTION 11
TRANSFER OF STOCK
2. All certificates of stock, when issued, shall be signed by the President and
countersigned by the Secretary or a member of the Board, and shall be sealed with the
Companys seal. Certificates shall be numbered in the order of issuance, and each
certificate shall show on its face its certificate number, the date of its issue, the number of
shares which it represents, the name of the holder, the par value of each share, and
whether the shares are fully paid.
4. Stock can be transferred only on the books of the Company upon surrender of
the certificate with authority for the transfer endorsed thereon either by the owner in
person or by his authorized agent, or attorney in fact, having written authority therefore.
Such surrendered certificate shall be canceled before the issuance of a new certificate in
lieu thereof; but no certificate of stock transferred until all assessments and interest
thereon up to the date of cancellation or transfer shall have been paid in full.
7
6. The Secretary may collect, as a fee for each transfer of capital stock, such sum
as set by the Board each year, the same to be paid by the person, or persons, making such
transfer.
7. Each stockholder in this ditch Company shall be entitled to freely transfer his
stock to any other stockholder or to any purchaser of land heretofore irrigated by said
Company, and each holder of capital stock shall be entitled to receive from the
Companys ditch, water owned or controlled by the stockholder for the irrigation of lands
heretofore irrigated by said ditch, in such amount of water as carried in said ditch in the
ratio and proportion which his shares shall bear to the total outstanding shares of said
Company, subject to the limitations and conditions set forth in this Section and Section
16 of these bylaws.
8. No transfer of shares for uses on land not historically irrigated by water of this
ditch (hereinafter new land) or for uses not historically made (hereinafter new uses)
shall be permitted, except by and upon orders and approval of the Board. If a person
acquiring stock (hereinafter applicant) expresses an intent to use the purchased shares
for new uses or upon new lands, the secretary of this Company shall suspend the re-
issuance of certificates pending review by the Board. The applicant shall submit an
application to the board describing the new uses and/or locations that is sufficiently
detailed to permit the board to determine whether the proposed uses will be detrimental to
the operation of the Companys delivery system, in violation of the Companys water
rights decrees or these bylaws, or otherwise injurious to the stockholders and the
Company as a whole. The board shall review any such application in a timely manner,
and, if the board determines that the application cannot be granted as presented, it shall
allow the applicant an opportunity to revise its plan to address the boards concerns. The
board is authorized to engage engineering and legal help to assist in its review of the
application, and any fees thereby generated which would not have been incurred but for
the application shall be borne by the applicant.
SECTION 12
ASSESSMENTS
1. The Company shall have the power to make an assessment on the capital stock,
to be levied pro-rata on the shares of the stock payable in money for any of the purposes
of the Company.
2. All assessments for every purpose necessary for the operation and maintenance
of the Company and its property shall be levied by the stockholders at the annual or any
special meeting of the stockholders. In the event that the stockholders fail to levy an
8
assessment, a levy may be made by the Board to meet the necessary expenses of
operation and maintenance of the Company. The Secretary/Treasurer shall mail the bills
to the stockholders no later than May 1st of each year. This annual assessment shall be
paid no later than May 15th each year.
3. In the event that the assessment described above is not paid by May 15th, a late
fee of seventy-five (75) dollars per stockholder per month shall be due and owing at once,
and the Board shall cease delivery of water. If the assessment and late fees have not been
paid by December 31st of the year in which levied the Board may proceed to collect said
assessments and fees, with interest, costs and attorneys fees, by suit for the recovery
thereof against the delinquent stockholder, or the Company may sell the stock, at the
annual stockholders meeting or in any other forum, for the purpose of paying the unpaid
assessment and interest, together with necessary expenses incurred in selling the stock.
All sales of forfeited stock shall be by public auction conducted by the President or such
person as may be designated by the Board, and the proceeds of such sale, if any, over and
above the amount due on said shares, including late fees and interest, plus the expenses of
the sale, shall be paid to the delinquent stockholder. No such sale shall occur until the
delinquent stockholder has been given notice of the time, place, manner and purpose of
the sale by mail or personal service at least thirty (30) days before the proposed sale or by
publication at least ten (10) days before the proposed sale. Inclusion of the notice of sale
in the notice of annual meeting mailed to stockholders and published pursuant to Section
3 of these bylaws shall constitute sufficient notice to the delinquent stockholder. In the
event the sale of the stock shall not cover the unpaid assessment, the Company may seek
recovery against the stockholder by any other lawful means available.
4. The address of each stockholder as shown on the books of the Company shall be
deemed the correct address.
SECTION 13
WATER DELIVERIES
3. No water shall be delivered for irrigation or any other use on lands not
historically served by the ditch unless the stockholder seeking such use has applied for
and received approval for such use from the Water Court in a final judgment and decree
or in a SWSP.
9
4. Any stockholder (or person designated by a stockholder to take delivery of
water on such stockholders behalf) who is found to have willfully wasted water by
reason of insufficiently diked or filled up or uncleaned laterals or otherwise, shall forfeit
the right to receive water from the Company ditches until he shall have provided
sufficient and adequate laterals, and otherwise have provided for the economic use of
water, and no such consumer who is in arrears with his assessment on stock for more than
thirty days shall be entitled to further water service by the Company until such arrears
shall have been satisfactorily adjusted with the Company.
5. If due to any cause the supply of water shall be insufficient to fill and flow
through the Companys canal according to its capacity, or if from any other cause, the
supply shall be insufficient; such water as may flow through said canal shall be
distributed pro rata to the stockholders to whom water shall have been allotted and for the
purpose of so doing the Board may establish and enforce such rules and regulations as
they may deem necessary or expedient; and except as otherwise provided herein, the
stockholders to whom water shall have been allotted shall be entitled to the amount of
water as above provided.
SECTION 14
DAMAGES
SECTION 15
INDEMNIFICATION
1. The Company shall indemnify any person who was or is an involuntary party or
is threatened to be made a party to any threatened, pending or contemplated action, suit
or proceeding, whether civil, criminal, administrative, or investigative (other than an
action by or in the right of the Company) by reason of the fact that he is or was a trustee,
officer, employee, fiduciary or agent of the Company or is or was serving at the request
of the Company as a trustee, officer, employee, fiduciary or agent of another Company,
partnership, joint venture, trust or other enterprise, against expenses (including attorney
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit, or proceeding, if he acted in good faith and in
a manner he reasonably believed to be in the best interest of the Company and, with
respect to any criminal action or proceeding had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit, or proceeding by judgment,
10
order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent shall
not of itself create a presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in the best interest of the Company and, with respect
to any criminal action or proceeding, had reasonable cause to believe his conduct was
unlawful.
2. The Company shall indemnify any person who was or is a party defendant or is
threatened to be made a party to any threatened, pending or completed action or suit by or
in the right of the Company to procure a judgment in its favor by reason of the fact that
he is or was a trustee, officer, employee, fiduciary or agent of another Company,
partnership, joint venture, trust or other enterprise against expenses (including attorney
fees) actually and reasonably incurred by him in connection with the defense or
settlement or such action or suit if he acted in good faith and a manner he reasonably
believed to be in the best interest of the Company; but no indemnification shall be made
in respect to any claim, issue, or matter as to which such person has been adjudged to be
liable for negligence or misconduct in the performance of his duty to the Company unless
and only to the extent that the court in which such action or suit was brought determines
upon application that despite the adjudication such person is fairly and reasonably
entitled to indemnification for such expenses which such court deems proper.
6. That the indemnification provided by this bylaw shall not be deemed exclusive
of any other rights to which those indemnified may be entitled to under any other bylaw,
agreement, vote of Stockholders or disinterested directors, or otherwise any procedure
provided for by any of the foregoing, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a person
11
who has ceased to be a trustee, officer, employee, fiduciary or agent and shall inure to the
benefit of heirs, executors, and administrators of such a person.
7. That the Company may purchase and maintain insurance on behalf of any
person who is or was a trustee, officer, employee, fiduciary or agent of the Company or
who is or was serving at the request of the Company as a trustee, officer, employee,
fiduciary or agent of another Company, partnership, joint venture, trust, or other
enterprise against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under provisions of this Section.
SECTION 16
CHANGE OF WATER RIGHT
2. The Company shall evaluate the application for change of water right within a
reasonable amount of time.
4. An applicant for a change of water right must reimburse the Company for the
Companys reasonable costs and fees, including a charge for time spent by the directors
and Company employees in analyzing the application to the Company and in any judicial
litigation that follows. This specifically includes a challenge to the Companys denial of
an application. Prior to analyzing the proposed change, the Company shall obtain an
estimate of costs. The Company shall make said estimate of cost within 30 days of
submission of an application and the applicant shall have 30 days after receipt of the
12
estimate from the Company to make the deposit. The Company shall not take final action
on any application until, and unless, the applicant makes said deposit. If the estimate and
deposit needs to be adjusted by further payment or reimbursement, said adjustment shall
be made upon the completion of the analysis. In no event shall the Company be required
to finally approve or disapprove the application until all fees incurred by the Company
are reimbursed.
SECTION 17
All bylaws shall take effect from and after the date of their adoption.
Amendments to these bylaws may be proposed by any stockholder or the Board.
Proposed bylaw amendments shall not become effective unless and until approved by
written consent of the all of the members of the Board or by a majority of the Board or of
the shares present or represented at a duly constituted meeting.
Date: ____________ by
Name:
Title: President
Attest:
Name:
Title: Secretary/Treasurer
13
SAMPLE POLICY STATEMENT
THE ______ DITCH AND RESERVOIR COMPANY
A. General Public. The following information of a general or routine nature regarding the
Company shall be available to persons either by written or oral request:
A.1 The Companys Articles of Incorporation, Bylaws, charges, rules and regulations;
A.2 Formal audit reports rendered periodically by independent auditors;
A.3 Any publications the Company may have for general distribution; and
A.4 Publications subscribed to or otherwise obtained by the Company bearing on one or more
aspects of the organization and operation.
B. Stockholders
B.1 In addition to the above information available to the general public, the following
information shall be available to a stockholder of the Company by either written or oral
request:
B.1.1 The operating and other financial reports that are regularly made to lenders to the
Company;
B.1.2 monthly or periodic or special operating and financial reports submitted by management
to the Board of Directors;
B.1.3 adopted budgets for current and future operations and capital improvements;
B.1.4 adopted work plans for the Companys future construction, operation and maintenance
of its system; and
B.1.5 the Minutes of any prior stockholder meeting.
B. Stockholders
B.2 In addition to the above information available to the general public and the stockholders,
the following information shall be available to a stockholder of the Company by formal written
request on the attached form:
B.2.1 Information that is germane to the requesting stockholders interest as a stockholder of
the Company; and
B.2.2 other information specifically approved by the Board of Directors.
Information Not to be Released. The following information is confidential and will not be
released.
1. Information in relation to any threatened or pending lawsuit against the Company or any
Director or employee of the Company without a court order, the Companys Board approval, or
advice of counsel;
2. Information that will, or may invade the privacy of any person, employee or Director of the
Company, or violate any of their rights;
3. Information that would violate an agreement or contract with third parties with respect to
trade secrets;
4. Information that might result in an adverse action against the Company, its Board of
Directors or employees;
5. Information that may be used to adversely affect the Company with third-party negotiations;
or
6. Information contained in confidential communications between the Company and its legal
counsel.
Information for Financial Institutions & Regulatory Agencies. The above information may
be released to financial institutions and to regulatory agencies as necessary or required to carry
on the affairs of the Company.
Release of Information. Upon compliance with the above requirements and authorizations,
information shall be released as promptly as possible during regular business hours. At the sole
discretion of the Company, a charge for multiple copies of information or for the cost to
produce the requested information that exceeds a minimal cost may be required and shall be
paid in advance.
ATTESTED: By action of the Board of Directors at its regular meeting held ___________, 2___.
____________________________________
President
____________________________________
Secretary
1
BEFORE THE FIRST OF FEBRUARY EACH YEAR.
FAILURE TO PAY ASSESSMENTS BY FEBRUARY 1
WILL RESULT IN MONTHLY INTEREST CHARGES
FROM THE DATE OF THE ASSSESSMENT WHICH IS
JANUARY 1. ALL UNPAID BALANCES WILL
CONTINUE TO DRAW INTEREST AT THE RATE OF
ONE AND ONE-HALF PERCENT PER MONTH PLUS A
MONTHLY SERVICE CHARGE OF $5.00. FAILURE TO
PAY ASSESSMENTS, INCLUDING INTEREST AND
SERVICE CHARGES, BY MARCH 1 WILL RESULT IN
THE FORFEITURE OF SHARES.
10. Shareholders who plan to subdivide their property must
submit plans for the redistribution of water shares to the Board
of Directors for approval. This is to assure that proper and
equitable apportionment of the shares has been made and that
proper easements have been provided. If a shareholder sells his
or her property, all of the ditch shares must be transferred to the
new owner (administrative fee is $50). In the case of death or
divorce (or name change), a stock transfer must be made
(administrative fee is $50).
2
DARCA 11/09: SAMPLE DITCH COMPANY BYLAWS
OPERATIONS
1
Alternative to Shareholder Rights and Responsibilities re Water Delivery.
2
DROUGHT/OVER USE
3
FIRST ALTERNATIVE TO DROUGHT/OVER USE
Whenever there is insufficient water available for the ditch to fully supply
all stockholders or other persons demand, the Superintendent [Ditch Rider,
Ditch Foreman, Manager] may make such distribution of the water available
as the Superintendent finds most likely to effectuate an equitable distribution
to create the most advantageous use of the limited supply available. Such
distribution may include a proportional delivery of water to all stockholders
or other persons entitled to delivery of water alike, or the Superintendent
may provide a full delivery to all stockholders or other persons entitled to
delivery of water in a section of the ditch for a limited time, moving the
section from portion to portion of the ditch as may appear to the
Superintendent to be calculated to make the most efficient and effective use
of the limited supply available.
4
SECOND ALTERNATIVE TO DROUGHT/OVER USE
5
CONTROL OF WATER DELIVERY STRUCTURES
The Board shall have unrestricted discretion to control the location and
construction of checks, head gates and other diversion structures installed in
the water delivery system and, as a condition for permitting any such
structures, may require compliance with such structural or engineering
specifications as are reasonably necessary to insure the safety and structural
integrity of the system and the unimpeded and undiminished flow of water
in it.
When more than one person is entitled to receive water through a delivery
structure, the charge for construction of it shall be divided among the
Shareholders or persons entitled to receive water through that structure in
proportion to the amount of water to be delivered through the structure to
those Shareholders or persons. No water shall be delivered through the
structure until the entire structure has been paid for by the appropriate
Shareholders or persons.
Before beginning work on any delivery structure, the Ditch Company shall
require, in advance, a deposit in the estimated amount of the cost of the
work. Any change in or modification of a delivery structure except as
authorized by the Board shall be deemed to have been done by the
Shareholder(s) or person(s) taking water from the delivery structure, and
unless such Shareholder(s) or person(s) can demonstrate the change or
modification is necessary to the proper delivery of water through that
structure, the cost of correcting the modification or change shall be charged
to the Shareholder(s) or person(s) causing that change or medication to be
made. The Board may cause any unauthorized modification or change to be
rectified to the Ditch Companys standards and the cost shall be paid by the
Shareholder(s) or person(s) taking water from that structure.
6
water to the proportion of water to which that Shareholder or person is
legally entitled. Once measured and turned out of the ditch for the account
of a Shareholder or person, the management, use and enjoyment of the water
so delivered and the duty of complying with the laws of Colorado respecting
such water is the sole responsibility of the Shareholder or person receiving
that water.
7
FIRST ALTERNATIVE TO CONTROL OF WATER
DELIVERY STRUCTURES
8
DISTRIBUTION OF WATER TO SHAREHOLDERS
Right to water. The ownership of stock in the Ditch Company shall entitle
the Shareholder to a proportionate amount [measured by number of
Shareholders, or by amount of stock owned, etc.] of the total amount of
water available when distributed to all other Shareholders.
9
FIRST ALTERNATIVE TO DISTRIBUTION OF WATER:
10
8. Except as provided below, no water shall be furnished other than to
stockholders, and then only in the proportion of the amount of stock a
stockholder owns or controls to the whole capital stock of the Ditch
Company. Every year before any water is drawn from the reservoir(s)
of the Ditch Company, the manager [superintendent, ditch rider, etc.]
must determine as near as may be the amount of water contained in
said reservoir[s], and must make and estimate the number of days that
water can be continuously run in the Ditch Companys ditches upon a
basis of [1/10 cubic foot] water per second of time per share.
Stockholders who wish to use water for irrigation may have water
turned out to them on this basis at a regular hour on any day between
May 1 and October 31 each year (both dates inclusive). In order that
water may not be run to disadvantage or waste, it shall be necessary
that at least ____________ CFS be ordered to initiate or to continue
daily water delivery service. All river water belonging to the Ditch
Company run in the ditches, and all surplus water turned into the
reservoir[s] after they have been measured, shall be divided pro rata
among the stockholders. All water not delivered pursuant to such
calls prior to the first day of November shall be forfeited to the Ditch
Company for the benefit of all of its stockholders to be apportioned
among them for delivery during the next succeeding year [season].
11
NO STORAGE
All water furnished by the Ditch Company must be applied directly to the
land and no water may be stored and kept for use at a later time.
12
NO CLAIM FOR LEAKAGE OR OVERFLOW
No shareholder shall make any claim for loss or damage by reason of any
leakage or overflow of the Ditch Companys main ditch [canal], or any of its
reservoirs, lakes or laterals, upon any land or lands belonging to him,
notwithstanding any statute, law or custom to the contrary.
Any shareholder making such claim and not prevailing shall be liable for
and pay all of the Ditch Companys attorneys fees, expenses and costs of
litigation including expert witness fees.
13
DITCH FOREMAN
The Board of Directors may hire a Ditch Foreman [Ditch Rider, Ditch
Superintendent] for the Ditch Company with qualifications and at a salary to
be set by the Board of Directors. The Ditch Foreman shall act as foreman of
work and construction on the Ditch and its appurtenances. He shall keep a
labor record and any other record required by his duties, and report the same
to the secretary-treasurer before each special or annual meeting of the
shareholders of the Ditch Company.
14
FIRST ALTERNATIVE TO DITCH FOREMAN
DITCH SUPERINTENDENT
The Superintendent shall, subject to the control and direction of the Board of
Directors and the President, supervise and control the ditch, headgates and
other irrigations facilities of the Ditch Company.
15
SECOND ALTERNATIVE TO DITCH FOREMAN
16
THIRD ALTERNATIVE TO DITCH FOREMAN
DITCH RIDER
The Ditch Rider [Ditch Superintendent, Ditch Foreman] shall have the direct
management and control of the canal and all its appurtenances, including the
lateral head gates, subject to the supervision of the Board of Directors. He
shall divide the water from the canal pro rata to all those shareholders or
others who have rights to use the same, and who actually are using the same,
in any irrigating season, and who have paid all assessments for
superintendence and maintenance and other lawful purposes duly made,
according to the number of shares or water rights which they own or have
the right to use, respectively. He shall attend the regular monthly meetings
of the Board of Directors and report at any meeting, either verbally or in
writing, the condition of the ditch and property of the Ditch Company, what
repairs, if any, are needed, and such other matters as may be required by the
Board of Directors.
17
DARCA 11/09: SAMPLE DITCH COMPANY BYLAWS
Any person who tampers or interferes with any headgate, flume, bridge
or other structure or portion of the ditch without the permission of the
Ditch Superintendent or the Board, shall be prosecuted to the full extent
of the law.
1
FIRST ALTERNATIVE TO PENALTIES FOR INTERFERENCE
WITH DITCH STRUCTURES
Violators of [put in the section number(s) here for the bylaws about
operation of the ditch and what people can and cannot do] will be given
written notices to correct the violation within three days. If the violation
is repeated or not corrected, the Board is authorized to levy an
appropriate fine or suspend the delivery of water to the offending
Shareholder or other person entitled to use ditch water for the remainder
of the irrigation season. In an effort to increase legal enforcement by
giving notice of Colorado law, the following Colorado Statutes which
cover both irrigation and right-of-way will be enforced by the Ditch
Company and the appropriate law enforcement agencies:
2
It is the duty of every such person, taking water from any
ditch, canal, or reservoir, to be used for irrigation purposes,
on finding that he is receiving more water from such ditch,
canal, or reservoir, either through his head gate or by means
of leaks, or by any means whatsoever, immediately to take
steps to prevent his further receiving more water from such
ditch, canal or reservoir than the amount to which he is
entitled. If knowingly he permits such extra water to come
upon his land from such ditch, canal, or reservoir, and does
not immediately notify the owners of such ditch or take
steps to prevent its further flowing upon his land, he shall be
liable to any person, company, or Corporation [ditch
company] who may be injured by such extra appropriation
of water, for the actual damage sustained by the party
aggrieved. The damages shall be adjudged to be paid,
together with the costs of suit, and a reasonable attorneys
fee to be fixed by the court and taxed with costs.
3
drain or tile drain, is guilty of a misdemeanor and, upon
conviction thereof, shall be punished by a fine of not less
than fifty dollars nor more than seven hundred fifty dollars
or by imprisonment in the county jail for not more than
ninety days. The court shall further order that such person
make full restitution to the victim of his or her conduct for
the actual damages that were sustained. The amount of such
restitution shall be equal to the actual pecuniary damages
that were sustained. The court shall fix the manner and time
in which such restitution shall be made.
4
(8.) C.R.S. 37-86-106: Shortest route must be taken
Whenever any persons find it necessary to convey water
through the lands of others, they shall select for the line of such
conveyance the shortest and most direct route practicable upon
which said ditch can be constructed with uniform or nearly
uniform grade.
5
SECOND ALTERNATIVE TO PENALTIES FOR INTERFERENCE
WITH DITCH STRUCTURES
Any shareholder or other person entitled to use the Ditch Companys water
who tampers or interferes with any headgate, flume, bridge or other structure
or portion of the ditch and its facilities without the permission of the Ditch
Superintendent or the Board shall be fined a dollar amount in the discretion
of the Board of Directors, not to exceed $_______ for a first offense, and
increasing by $________ for each subsequent offense.
The Board of Directors shall prosecute to the fullest extent of the law any
person other than a shareholder or other person entitled to use the Ditch
Companys water who tampers or interferes with any headgate, flume,
bridge of other structure or portion of the ditch and its facilities without the
permission of the Ditch Superintendent or the Board. In the discretion of the
Board of Directors, the Board may prosecute to the fullest extent of the law
any shareholder or other person entitled to use the Ditch Companys water
who has been fined ___ or more times for interference with the Ditch
Companys ditch structures.
6
DARCA 11/09: SAMPLE DITCH COMPANY BYLAWS
B. The written change application should detail the requested change and
include adequate terms and conditions to prevent injury to the Ditch
Company and its Shareholders. If, in a reasonable opinion of the directors,
such change may be approved without injury to the Ditch Company and all
of its Shareholders, then the directors shall approve the change application
subject to necessary terms and conditions. In evaluating whether the
requested change of water right can be made without injury to the Ditch
Company and its Shareholders, the Ditch Company may obtain an
engineering and legal analysis of the requested change by the Applicant and
the terms and conditions offered by the Applicant. The Ditch Company
shall evaluate the application for change of water right with diligence and
reach a decision within a reasonable amount of time.
1
reasonable costs and fees in analyzing the application for change of water
right to the Ditch Company, participation in any Water Court litigation, and
participation in any substitute water supply plan approval process. Prior to
obtaining legal and engineering analyses of the proposed change, the Ditch
Company shall obtain an estimate of the costs. The Ditch Company shall
obtain said estimates of cost within thirty (30) days of submission of a
written application which complies fully with section B above and the
Applicant shall have thirty (30) days after receipt of the estimate from the
Ditch Company to make the deposit required by the Ditch Company before
continuing with the Water Court proceedings or the substitute water supply
plan. The Ditch Company shall not take final action on any application
until, and unless, the Applicant makes said deposit. In no event shall the
Ditch Company be required to finally approve or disapprove the application
until all fees incurred by the Ditch Company shall be reimbursed.
E. In addition to the fees and costs described in section D above, the Applicant
shall pay for the following:
1. A fee for the Superintendents [Ditch Riders] administration of
the change;
2. The cost of measuring devices, additional or new headgates,
division boxes, flumes and outlet structures to administer the
change; and
3. Fees for storage and carriage to compensate Shareholders and the
Ditch Company for seepage, shrinkage, evaporation, return flows,
and additional maintenance.
2
FIRST ALTERNATIVE TO CHANGE OF WATER
RIGHT/CATLIN BYLAW
2. The Ditch Company shall evaluate the application for change of water
right within a reasonable period of time.
3
litigation, that follow. This specifically includes a challenge to the
Ditch Companys denial of an application. Prior to analyzing the
proposed change, the Ditch Company shall obtain an estimate of
costs. The Ditch Company shall make said estimate of cost within
thirty (30) days of submission of a written application and the
Applicant shall have thirty (30) days after receipt of the estimate from
the Ditch Company to make the deposit required by the Ditch
Company. The Ditch Company shall not take final action on any
application until, and unless, the Applicant makes said deposit. If the
estimate and deposit need to be adjusted by further payment or
reimbursement, said adjustment shall be made upon the completion of
the analysis. In no event shall the Ditch Company be required to
finally approve or disapprove the application until all fees incurred by
the Ditch Company are reimbursed.
4
SECOND ALTERNATIVE TO CHANGE OF WATER
RIGHT/CATLIN BYLAW
1. Change in Use. The shares held in this Ditch Company are for the
purpose of delivering water to shareholders as a mutual irrigating
reservoir company to deliver water from ___________ to farms along
the ditch, primarily for agricultural purposes. No water shall be
deliverable to any shareholder except through existing headgates or
additional headgates authorized specifically by the board of directors
as to engineering feasibility, location and purpose of use. This bylaw
shall not be construed to prohibit plans of augmentation, changes in
the nature of use, point of diversion or other extended uses or changes
in water rights, provided the same are allowable under Colorado law
and provided there is no damage to any vested rights of any other
shareholder by virtue of any such plan. The board of directors shall
have discretionary authority to approve, conditionally, approve, or
disapprove such changes in the event there might be damage to a
shareholders vested interest. No such change shall be valid unless an
application for such change has been previously submitted to the
board of directors. In the event such change has not been approved,
conditionally approved, or disapproved within ninety (90) days after
the same has been submitted to the board, no approval of the board of
directors shall be required.
2. Each certificate of stock hereinafter transferred shall contain the
following endorsement thereon:
Plans of augmentation, changes in nature of use, time of use,
return flow patterns, purpose of use or changes in point of
diversion or other extended uses or changes in the water rights
appertaining to these shares are subject to the reasonable
approval of the board of directors, as provided in the bylaws of
the Ditch Company.
3. Reimbursement of Costs for Change of Use.
The applicant for a change of use as described above in these bylaws
shall reimburse the Ditch Company for all of its reasonable costs and
expenses in connection therewith, including, but not limited to, the
following:
a. Attorneys fees.
b. Engineering costs.
c. Court costs.
5
d. Additional fees and costs for the Ditch Superintendent [Ditch
Rider] to administer said changes.
e. Cost of measuring devices, additional or new headgates,
division boxes, flumes and outlet structures.
f. Storage and carrying fees and water to convert a direct flow
water right into a storage right and to pay and compensate
shareholders and the Ditch Company for seepage, shrinkage,
evaporation, return flows, and additional maintenance.
g. Any other reasonable expenses that are necessitated by
hearings, contract negotiations, objections or protests to a water
change application and trials involving shares of the Ditch
Company, so that the owner of stock being changed does not
cause a disproportionate burden on the other shareholders
assessments or usage of water.
6
THIRD ALTERNATIVE TO CHANGE OF WATER RIGHT BYLAW
7
DARCA 11/09: SAMPLE DITCH COMPANY BYLAWS
INDEMNIFICATION
1
FIRST ALTERNATIVE TO INDEMNIFICATION BYLAW
Except to the extent that such sums are covered by insurance, the Ditch
Company and its Shareholders shall indemnify any person who is a party
or is threatened to be made a party to any threatened or pending civil
action, suit, or proceeding, by reason of the fact that such person is or
was a director, officer, or employee of the Ditch Company, against
expenses (including attorneys fees), judgments and amounts paid in
settlement actually and reasonably incurred by such person in connection
with such action, suit, or proceeding, unless such persons acts or
omissions were dishonest, fraudulent, malicious, criminal, ultra vires, or
the result of gross negligence.
2
SECOND ALTERNATIVE TO INDEMNIFICATION
3
DARCA 11/09: SAMPLE DITCH COMPANY BYLAWS
1
the electing Shareholder shall proceed with the closing as specified in
the Notice.
5. If more than one (1) Shareholder provides timely notice of his election
to purchase the shares, the Secretary shall notify all electing
Shareholders of the multiple acceptances. If the electing Shareholders
cannot agree among themselves within __ days of the Secretarys
notification, as to their percentage interests in the sale, a lottery
[auction?] shall be held by the Secretary ___ days after the end of the
30-day period described above to designate the Shareholder who shall
be entitled to purchase the shares. The Board of Directors, in its
discretion, shall be entitled to request whatever proof of ability to pay
for the shares from the electing Shareholders prior to the lottery
[auction?].
7. The Secretary shall not transfer on the books of the Ditch Company
any shares not sold in conformity with this section. The Selling
Shareholder shall supply the Secretary with his sworn affidavit of the
price at which the offered shares were sold, together with copies of
closing documentation, which shall be presented at the time that
transfer on the books is requested, but not more than sixty (60) days
after the sale.
2
Right of First Refusal (ROFR)
EASEMENT BYLAW
In most cases, the easement for the Ditch Companys water distribution,
drainage and waste systems (ditch, canal, etc.) is prescriptive. The ditch
easement has been established by use since the inception of the Ditch
Company, together with other appurtenant easements, over a period of a
number of years; and under Colorado law, sufficient space on either side
of the centerline of a ditch or canal for operation and maintenance
thereof is included in such prescriptive easement. The Ditch Companys
easements are generally not exclusive, but in most cases are prior in time
to any other encroaching use. Private property interests, public access
and utility interests, and other legitimate property or access interests
encroaching within or upon the Ditch Companys prescriptive easement
must recognize the extent of the Ditch Companys rights, and in the
event that an encroachment is unlawful, the Ditch Company shall be
fully reimbursed for clerical, administrative, legal, engineering and any
other expenses incurred in exercising and defending its easement rights.
Nothing herein shall preclude collection of fees and expenses as
provided elsewhere in these bylaws.
1
EASEMENT LICENSE BYLAW
2
DARCA 11/09: SAMPLE DITCH COMPANY BYLAWS
ASSESSMENT BYLAW
1
No transfer of stock will be permitted while the holder thereof is
indebted to the Ditch Company.
The Board of Directors may establish and enforce such other rules
and regulations, and provide and declare such other penalties and
forfeitures, as they may deem necessary or expedient for the
purposes of enforcing and collecting delinquent payments.
2
FIRST ALTERNATIVE TO ASSESSMENT BYLAW
Assessments may be made from time to time on the paid-up capital stock of
the Ditch Company to keep its ditch or other property in good repair, to pay
any indebtedness contracted or the interest thereon, and for payment of any
claim against the Ditch Company not otherwise provided for, provided the
question of making any such assessment shall first be submitted to the
stockholders of the Ditch Company as provided by C.R.S. 7-42-104.
Assessments when regularly made shall draw interest at the rate of ten (10)
percent per year from the time fixed in the levy of the assessment for the
same to become delinquent. No stockholder delinquent in payment of an
assessment levied shall, during the period of his delinquency, be permitted to
draw any water either in person or by his privies in interest. The Secretary
shall furnish to the Superintendent [manager, ditch rider] and President of
the Ditch Company a list of all stockholders who are delinquent in paying
assessments.
Before any assessment duly levied shall become delinquent, at least thirty
(30) days notice thereof shall be given by the Secretary to each stockholder
by mail addressed to the last known post office address of each such
stockholder. The Secretarys certificate of mailing shall be prima facie
evidence that notice has been duly given.
3
SECOND ALTERNATIVE TO ASSESSMENT BYLAW
4. Notice of Assessment. Not less than thirty (30) days, nor more than
sixty-five (65) days before any assessment or any part of any
assessment shall be due and payable, the Treasurer shall prepare
notices and demands therefore, and shall serve the same upon each
Shareholder, specifying therein the sum which will be due and
payable and the date when the same will become due and payable,
demanding payment of said sum and stating that if said sum be not
then paid, the shares held by said Shareholder will be forfeited and
sold in accordance with these bylaws.
4
demands to the Shareholders for whom the same are intended to the
address of record on the Ditch Companys Shareholder records.
7. First Lien. The Ditch Company shall have the first lien, in perpetuity,
on all shares of stock and the water rights represented thereby for any
unpaid assessments until the Shareholder fully pays the assessments,
the special assessments, out-of-pocket fees and expenses, accrued
interest and penalties. Such lien shall be noted on each new stock
certificate issued by the Ditch Company. [Each such lien shall be
recorded in the __________ County Recorders office as a lien against
the real property of the delinquent Shareholder which is serviced by
the Ditch Companys ditch. ??]
5
Forfeiture Bylaw
6
DARCA 11/09: SAMPLE DITCH COMPANY BYLAWS
FRACTIONAL SHARES
Any Shareholder who holds less than one full share in the Ditch Company shall be
eligible for the following benefits as consideration for the surrender of his, her or
its ownership of the fractional share to the Ditch Company:
1
writing and certifies that the Shareholder has complied with all terms or
conditions imposed by the Ditch Company, the Ditch Company shall
issue the payment to the Shareholder, who shall then surrender the
fractional share(s) to the Ditch Company simultaneous with the Ditch
Companys payment to the Shareholder.
3. Any Shareholder who does not voluntarily surrender their fractional
share(s) in return for the payment described above shall not receive such
payment.
4. Once the Ditch Company is in possession of the fractional share, the
Ditch Company shall take all necessary steps at the Ditch Companys
expense to prevent the former Shareholder from accessing the Ditch
Companys water.
5. The Ditch Company shall have the option to retain in the Ditch
Companys name all such fractional shares surrendered to the Ditch
Company, and shall be empowered, by vote of the Board of Directors, to
lease such fractional shares to other Shareholder of the Ditch Company,
either as short term or long term leases. The leasing price shall include at
least the annual assessment per fractional share charged to the Ditch
Companys Shareholders and all costs associated with the lease. The
lessee shall be responsible for all maintenance and repair associated with
the leased shares during the term of the lease. For leasing purposes, the
Ditch Company may either combine fractional shares into whole shares
for leasing, or may lease fractional shares. The revenues from such
leasing shall be retained by the Ditch Company and used for the same
purposes that assessments from Shareholders are used.
2
FIRST ALTERNATIVE TO FRACTIONAL SHARES BYLAW
3. The Ditch Company shall have thirty (30) days in which to make
payment to the Shareholder who seeks to sell the fractional share(s) to
the Ditch Company after all necessary steps have been taken and all
necessary approvals have been obtained. As a condition of payment,
the Shareholder shall surrender the fractional share(s) to the Ditch
Companys ownership.
5. The Ditch Company shall retain in its own name all such fractional
share(s) surrendered to the Ditch Company, and shall be empowered,
by vote of the Board of Directors, to lease such fractional share(s) to
other Shareholders of the Ditch Company either as short term or long
term leases. The leasing price shall include at least the annual
assessment per fractional share charged to the Ditch Companys
Shareholders and all costs associated with the lease. The lessee shall
be responsible for all maintenance and repair associated with the
leased shares during the term of the lease. For leasing purposes, the
3
Ditch Company may either combine fractional shares into whole
shares for leasing, or may lease fractional shares to Shareholders. The
revenues from such leasing shall be retained by the Ditch Company
and used for the same purposes that assessments from Shareholders
are used
4
SECOND ALTERNATIVE TO FRACTIONAL SHARES BYLAW
5
THIRD ALTERNATIVE TO FRACTIONAL SHARES BYLAW
The Ditch Company shall not issue stock certificates representing less than
__________________ (__8) shares.