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> **United States**
>
> **Department of**
>
> **Agriculture**
>
> Rural
>
> Telephone
>
> Bank
>
> Informational
>
> Publication 400-1
>
> **August** **2005**

**BYLAWS OF THE** **RURAL TELEPHONE BANK**

**with amendments adopted through August 4, 2005**

**CONTENTS**

Article I - Name, Organization, Purposes and Location

Article II - Capital Stock and Special Fund Equivalents

Article III - Meetings of Stockholders

Article IV - Directors

Article V - Meetings of Board

Article VI - Officers

Article VII - Financial Transactions

Article VIII - Patronage Capital

Article IX - Miscellaneous

Article X - Amendments

**ARTICLE I - NAME, ORGANIZATION, PURPOSES AND LOCATION**

**SEC. 1.1 NAME, ORGANIZATION, AND PURPOSES.** The name of the body
corporate by and for which these bylaws are adopted is Rural Telephone
Bank (hereinafter called the \"Bank\"). It is an agency and
instrumentality of the United States, established by the Act of May 7,
1971, 85 Stat. 29, 7 U.S.C. 931-950(b), (hereinafter called the
\"Act\"), for the general purposes of obtaining an adequate supply of
supplemental funds to the extent feasible from non-Federal sources, to
utilize said funds in the making of loans pursuant to the Act, and to
conduct its operations to the extent practicable on a self-sustaining
basis.

**SEC. 1.2 LOCATION OF OFFICES.** The Bank shall have an office in the
District of Columbia, and additional offices at such other places as the
Governor, with the concurrence of the Board of Directors of the Bank
(hereinafter called the \"Board\"), may from time to time designate.

**ARTICLE II - CAPITAL STOCK AND SPECIAL FUND EQUIVALENTS**

**SEC. 2.1 CLASSES OF STOCK.** The capital stock of the Bank shall
consist of three classes, to wit, Class A, Class B, and Class C.

**SEC. 2.2 RIGHTS, POWERS, PRIVILEGES AND PREFERENCES OF EACH CLASS OF
STOCK.** (a) Class A stock shall have a par value of one dollar (\$1.00)
per share and shall be issued only at par and only to the Administrator
of the Rural Utilities Service (hereinafter called the
\"Administrator\") on behalf of the United States for capital furnished
to the Bank by the United States as provided in section 406(a) of the
Act, and shall be non-voting stock. Such stock shall be entitled to a
cumulative return, payable from the Bank\'s income, at the rate of two
per centum (2%) per annum. Such stock shall be redeemed and retired in
such amounts and at such times as provided in section 406(c) of the Act.
Upon dissolution or liquidation of the Bank, Class A stock shall be
retired at par before any payment is made to holders of Class B or Class
C stock, and the holder of Class A stock shall be entitled to share pro
rata with the holders of Class B stock then outstanding in the surpluses
and contingency reserves remaining after the payment of all the Bank\'s
liabilities and after retirement of all classes of stock at par as
provided in section 411 of the Act. Class A stock shall not be
transferable.

\(b\) Class B stock shall have a par value of one dollar (\$1.00) per
share, shall be issued only at par, shall be held only by the recipients
of loans made under section 408 of the Act, and shall be voting stock.
No dividends shall be payable on Class B stock, but the holders thereof
shall be entitled to patronage refunds in Class B stock as hereinafter
provided. Prior to dissolution or liquidation of the Bank, Class B stock
may be redeemed and retired only after all shares of Class A stock shall
have been redeemed and retired: *Provided, however*, That the Board may,
under rules of general application adopted by it and upon agreement with
the stockholder, provide for (1) the conversion of Class B stock into
Class C stock upon payment of all amounts owed by a holder of Class B
stock to the Bank and upon surrender of sufficient shares of Class B
stock, supplemented by cash if necessary, to equal the par value of each
share of Class C stock to be issued inasmuch as fractional shares of
Class C stock shall not be issued; and (2) for the conversion of a
portion of the Class B stock, received by a stockholder as a patronage
refund or purchased by the borrower, into Class C stock before the
principal of the stockholder\'s loans from the Bank has been fully
repaid. Upon dissolution or liquidation of the Bank, holders of Class B
stock shall be entitled to share pro rata with the holder of Class A
stock then outstanding in the surpluses and contingency reserves
remaining after the payment of all of the Bank\'s liabilities and after
retirement of all classes of stock at par as provided in section 411 of
the Act. Class B stock shall not be transferable, either absolutely or
by way of collateral, except in connection with the assumption by the
transferee, with the approval of the Governor, of all or part of the
transferor\'s loan from the Bank.

\(c\) Class C stock shall have a par value of one thousand dollars
(\$1,000) per share, shall be issued only at par, shall be held only by
borrowers or by corporations and public bodies eligible to borrow under
section 408 of the Act, or by organizations controlled by such
borrowers, corporations and public bodies, and shall be voting stock. A
corporation or public body is considered eligible to borrow if it is
engaged in activities that the Bank determines could be financed under
section 408 of the Act. An organization is considered controlled if (1)
a majority of the voting stock or other controlling authority in the
organization is held by borrowers or by corporations and public bodies
eligible to borrow under section 408 of the Act and (2) such borrowers,
corporations, and public bodies are not prevented by any agreement or
other restriction from exercising such controlling authority as they may
desire.

\(d\) At such times and in such amounts as the Board may designate,
dividends may be declared and paid to holders of Class C stock, but only
from income of the Bank. Until all Class A stock is retired, the annual
rate of any such dividend shall not exceed the current average rate
payable on the bonds, debentures, notes and other evidences of
indebtedness issued by the Bank (hereinafter collectively called
\"telephone debentures\"). No dividend on Class C stock shall be paid at
any time when any portion of the cumulative 2 percent return on Class A
stock required by section 406(c) of the Act remains unpaid. Prior to
dissolution or liquidation of the Bank, Class C stock may be redeemed
and retired only after all shares of Class A stock shall have been
redeemed and retired. Upon dissolution or liquidation of the Bank,
holders of Class C stock shall be entitled to retirement of their stock
at par after payment of all liabilities of the Bank and after retirement
of all Class A and Class B stock at par, but shall not be entitled to
share in any remaining surpluses or contingency reserves, as provided in
section 411 of the Act. Class C stock shall not be transferable,
absolutely or by way of collateral, except to a borrower, or a
corporation or public body eligible to borrow under section 408 of the
Act, or an organization controlled by such borrowers, corporations, or
public bodies.

\(e\) No holder of Class B or Class C stock shall be entitled to more
than one vote, regardless of the number and class or classes of shares
held, nor shall Class B and Class C stockholders, regardless of their
number, which are owned or controlled by the same person, group of
persons, firm, association, or corporation be entitled to more than one
vote.

**SEC. 2.3 SHARE CERTIFICATES.** (a) All shares of stock of the Bank
shall be evidenced by entry on the books of the Bank. All paper stock
certificates issued by the Bank are cancelled as of October 1, 2005, and
replaced by entry on the books of the Bank.

\(b\) The Bank shall issue stock only upon payment in full of the par
value thereof.

\(c\) The Bank shall issue stock evidencing the distribution of
patronage refunds as hereinafter provided .

**SEC. 2.4 TRANSFER OF SHARES.** Shares in the capital stock of the Bank
shall be transferred only on the books of the Bank by authorization from
the holder thereof or by the holder's legal representative upon proof of
the legal representative's authority filed with the Secretary of the
Bank. The entity in whose name shares stand on the books of the Bank
shall be deemed to be the owner thereof for all purposes.

**SEC. 2.5 DATE FOR DETERMINATION OF STOCKHOLDERS\' RIGHTS.** The Board
may fix a date, not exceeding four (4) months preceding the date of any
meeting of stockholders or any election of Directors, any dividend
payment date or any date for the determination or allotment of rights,
as a record date for the determination of stockholders entitled to
notice of and to vote at such meeting or in such election, or entitled
to receive such dividend or rights as the case may be.

**SEC. 2.6 SPECIAL FUND EQUIVALENTS.** The amounts to be paid by any
entity into the special fund provided for in section 406(f) of the Act
and the rights, powers, privileges and preferences in respect of
dividends, patronage refunds, voting rights, transfer of interest,
retirement of special fund equivalent and liquidation or dissolution of
the Bank accruing to an entity making such a payment, shall, to the
extent permitted under the laws of the jurisdiction in which such entity
is organized, be determined as if such entity had purchased stock in the
Bank for such payment. The Bank shall issue to such entity written
evidence, in such form as the Board may from time to time prescribe, of
the payment made by such entity into the Bank\'s special fund
established pursuant to said section 406(f) of the Act. Such writing
shall comply, in respect of its execution, numbering and the surrender
of such writing and the issuance of share certificates or other evidence
of payment into the special fund in lieu of the surrendered evidence,
with the provisions of section 2.3 above. Evidences of payment into said
special fund shall be transferred in the manner provided in section 2.4
above for the transfer of shares of stock. The provisions of section 2.5
above shall also be applicable in respect of such evidences of payment.
Each reference in these bylaws to capital stock or to Class B or Class C
stock and to stockholders shall, subject to the first sentence of this
section 2.6 be deemed to include evidences, or holders of evidences, of
payment into the special fund in lieu of purchase of the class of stock
to which reference is made.

**SEC. 2.7 COMMONLY OWNED OR CONTROLLED STOCKHOLDERS.** Each reference
in these bylaws to the voting rights of stockholders, shall, in respect
of stockholders which are owned or controlled by the same person, group
of persons, firm, association, or corporation (7 U.S.C. 946(b)) be
deemed to mean that the right is vested and is to be exercised as if all
such stockholders owned or controlled by the same person, group of
persons, firm, association or corporation were one stockholder.

**SEC. 2.8 CLASSIFICATION OF STOCKHOLDERS.** At least one month before
any meeting of stockholders or any election of Directors, the Governor
shall prepare a list of all stockholders, classified on the books of the
Rural Utilities Service as either cooperative-type or commercial-type
entities and organizations, which are entitled to vote, indicating
thereon those which are required to share their vote with other commonly
owned or controlled stockholders in a designated affiliated group. A
copy of the list shall be available for inspection and copying at the
offices of the Rural Telephone Bank and the Rural Utilities Service in
Washington, D.C.

**ARTICLE III - MEETINGS OF STOCKHOLDERS**

**SEC. 3.1 REGULAR MEETING.** A regular meeting of the stockholders
shall be held each odd-numbered year after 1995 on such day and as such
place and time as may be selected by the Board, for the purpose of (a)
hearing reports from officers of the Bank, and (b) acting upon such
other matters as may properly be brought before the meeting.

**SEC. 3.2 SPECIAL MEETINGS.** Special meetings of the stockholders may
be called by the Chairperson of the Board, by resolution of the Board,
upon a written request signed by seven (7) members of the Board, or by
not less than fifty (50) stockholders, subject to section 2.7. It shall
be the duty of the Secretary to promptly cause notice of such meeting to
be given as hereinafter provided. Special meetings may be held at any
place designated by the person or persons calling the meeting.

**SEC. 3.3 NOTICE.** Written or printed notice stating the place, day
and hour of the meeting, and the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) days nor
more than forty (40) days before the date of the meeting, either
personally or by mail, by or at the direction of the Secretary, or upon
default by the Secretary, by the entities calling the meeting, to each
stockholder and published in the [Federal Register]{.underline}. If
mailed, such notice shall be deemed to be delivered when deposited in
the United States mail, addressed to the stockholder\'s address as it
appears on the records of the Bank with postage thereon prepaid. The
failure of any stockholder to receive notice of a meeting of
stockholders shall not invalidate any action which may be taken by the
stockholders at any such meeting.

**SEC. 3.4 QUORUM.** The quorum for a meeting of the stockholders shall
consist of one hundred (100) stockholders present in person or by proxy.
All members of a commonly owned or controlled affiliated group as set
forth in section 2.7 shall be considered as one stockholder for quorum
as well as voting purposes. If less than a quorum is present at any
meeting, a majority of those present in person or by proxy may adjourn
the meeting from time to time without further notice. 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. A stockholder shall be considered as being
present in person or by proxy if the individual designated as its voting
representative pursuant to section 3.7(a), is present.

**SEC. 3.5 VOTING.** Each stockholder entitled to vote shall be entitled
to only one vote upon each matter submitted to a vote at a meeting of
stockholders. All questions submitted to a vote of stockholders shall be
decided by a vote of a majority of the stockholders voting thereon
present in person or by proxy.

**SEC. 3.6 PROXIES.** (a) Subject to sections 2.7 and 3.7(a), at all
meetings of stockholders, a stockholder may vote by proxy executed in
writing by the stockholder. Such proxy shall be filed with the Secretary
before or at the time of the meeting. No proxy shall be voted at any
meeting of stockholders unless it shall designate the particular meeting
at which it is to be voted, and no proxy shall be voted at any meeting
other than the one so designated or any adjournment of such meeting. Any
stockholder which has granted a proxy may vote in person through the
individual designated as its voting representative pursuant to section
3.7(a) and such vote shall revoke the proxy theretofore given and shall
have the same effect as if the proxy shall not have been executed. A
proxy may only be voted by a voting representative of another
stockholder in the same segment of the industry as the grantor of the
proxy. Public bodies, for the purpose of these bylaws, shall be
considered part of the cooperative segment.

\(b\) Proxy voting is prohibited in the election of Directors.

**SEC. 3.7 VOTING OF SHARES BY CERTAIN HOLDERS.** (a) Shares standing in
the name of a corporation, public body, or other organization may be
voted by the director, manager, or other employee of the stockholder
authorized by the chief executive officer, president, or vice president
of such organization to be its voting representative or by the holder of
a proxy as set forth in section 3.6.

\(b\) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be
voted by the receiver without the transfer thereof into the receiver's
name if authority so to do be contained in an appropriate order of the
court by which such receiver was appointed.

\(c\) A stockholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares
so transferred.

**ARTICLE IV - DIRECTORS**

**SEC. 4.1 POWERS.** Except to the extent otherwise required by law or
by these bylaws, the management of the Bank shall be vested in the
Board.

**SEC. 4.2 NUMBER.** Until ownership, control and operation of the Bank
has been converted pursuant to section 410(a) of the Act, the Board
shall consist of seven members designated by the President of the United
States (five of whom shall be officers or employees of the United States
Department of Agriculture but not RUS, and two of whom shall be from the
general public and not officers or employees of the United States) and
six additional members elected by the holders of Class B and Class C
stock.

**SEC. 4.3 ELECTION.** (a) Six members of the Board shall be elected by
holders of Class B and Class C stock, voting noncumulatively as follows:
(1) three by a plurality vote of stockholders voting in the cooperative
segment of the industry, from among the directors, managers, and other
employees of cooperative-type entities and organizations controlled by
them holding Class B or Class C stock, and (2) three by a plurality vote
of stockholders voting in the commercial segment of the industry, from
among the directors, managers, and other employees of commercial-type
entities and organizations controlled by them holding Class B or Class C
stock. Ballots cast for the election of the Directors as established in
section 405(b)(2) and (3) of the Act shall be cast biennially and
counted on such day in November of each even-numbered year as the Board
may select.

(b)Stockholders wishing to cast a secret ballot may vote by mail.

\(c\) Each election under paragraph (a)(1) or (a)(2) of this section
shall not be considered valid unless a majority of the stockholders
eligible to vote in the election have voted in the election.

\(d\) Upon a determination by the Assistant Secretary that ballots were
received from less than a majority of eligible voters in one or both of
the two segments of the industry, the Chairperson shall call a special
meeting of the Board to determine the procedures to be followed for a
new election for the segment or segments involved.

\(e\) In the event of a tie vote, the Chairperson shall call a special
meeting of the Board to determine the procedures to be followed to break
a tie vote.

**SEC. 4.4 NOMINATIONS AND TENURE.** (a) At least three (3) months
before the tabulation of ballots for the election of Directors, the
Secretary shall send a form to each holder of Class B or Class C stock
which may be used to nominate not more than three eligible individuals
as defined in section 4.3(a) above. Any form nominating Directors
received by the Assistant Secretary of the Rural Telephone Bank within
the time limit established by the Board shall be tabulated by tellers
nominated by the Governor and approved by the Board.

\(b\) All eligible individuals receiving at least ten (10) nominations
by cooperative-type stockholders shall be entered on the official ballot
as candidates for the three positions on the Board allocated to the
cooperative segment of the industry. All eligible individuals receiving
at least ten (10) nominations by commercial-type stockholders shall be
entered on the official ballot as candidates for the three positions on
the Board allocated to the commercial segment of the industry. The only
nominees eligible for inclusion on the official ballot as candidates are
those certified by the Secretary as having been nominated in accordance
with the provisions in this subsection and section 4.3(a) above,
however, write-in candidates are permitted on the official ballot which
will contain blank spaces for writing in the names of three additional
candidates.

\(c\) The Secretary shall be responsible for mailing, at least three (3)
weeks before the date for tabulation of ballots, a statement of the
number of Board members to be elected by the stockholders in each
segment of the industry, a biographical sketch of each candidate for the
Board, and the official ballot to be used by the stockholder. Each
ballot shall show the name and the position of each candidate in the
candidate\'s stockholder\'s organization.

\(d\) The authorized voting representative of each stockholder shall
vote by mail ballot and shall be entitled to cast one vote for one
candidate for each position for which that stockholder is eligible to
vote. The authorized voting representative may be a director, manager,
or other employee of the stockholder authorized by the chief executive
officer, president, or vice president of such organization. Any mail
ballot received by the Assistant Secretary of the Bank by close of
business on the day before the day the ballots are to be counted shall
be tabulated by tellers nominated by the Governor and approved by the
Board. The Assistant Secretary shall deliver the ballots to the head
teller to be tabulated. A ballot sent by telephone facsimile and
received by the Assistant Secretary of the Bank shall be considered to
be a mail ballot.

\(e\) Directors shall be elected for two (2) years but they shall serve
after expiration of the term of office of such member until the
successor for such member has taken office. Upon the establishment of
the fact that a Director, at the time of the Director's election, did
not, or has since ceased to, have the qualifications required by these
bylaws or the Act, the Board shall remove such Director from office.

\(f\) Any nominating form or official ballot placed in the mail by the
Bank in Washington, D.C., addressed with the address appearing in the
official records of the Bank and with postage fully paid, shall be
considered properly mailed in satisfaction of the requirements of these
bylaws.

**SEC. 4.5 VACANCIES.** Any vacancy occurring on the Board shall be
filled by the affirmative vote of the remaining Board members for the
unexpired portion of the term; *Provided, however,* That the person
selected by the Board to fill a vacancy shall be chosen from among the
same group (cooperative-type or commercial-type) of individuals that
elected the member's predecessor to the Board; *And provided, further,*
That the Board shall have no power to choose a successor to a Director
appointed by the President of the United States.

**SEC. 4.6 COMPENSATION.** Board members designated from the general
public, pursuant to section 405(b)(1)(B) of the Act, or elected pursuant
to section 405(b)(2) or (3) of the Act, shall receive one hundred
dollars (\$100) per day for each day or part thereof, not to exceed
fifty days per year, spent in the performance of official duties for the
Bank, and shall be reimbursed by the Bank for travel and other expenses
in such manner and subject to such limitations as the Board may
prescribe. Directors who are officers or employees of the Department of
Agriculture shall serve as directors without additional compensation. No
close relative of a Board member shall receive compensation for serving
the Bank unless the relationship shall have been fully disclosed to the
Board prior to the relative's employment and the Board shall have
determined that the relative's employment will be beneficial to the
Bank.

**SEC. 4.7 BOARD COMMITTEES.** The Board may, from time to time, provide
for such committees as it deems desirable. The resolution establishing
the committee shall prescribe the name and functions of the committee,
and shall name the Director or Directors who shall constitute it and the
Chairperson thereof. A majority of the members of any such committee
shall constitute a quorum. Vacancies on any such committee shall be
filled by appointment by the Board. The committee shall keep a record of
its proceedings and shall report to the Board as and when required by
it.

**ARTICLE V - MEETINGS OF BOARD**

**SEC. 5.1 REGULAR MEETINGS.** A regular meeting of the Board shall be
held quarterly on ten (10) days notice at such times and places as
designated by resolution of the Board. In an election year, one such
meeting shall be held no more than 45 days after the date of the
election of Directors.

**SEC. 5.2 SPECIAL MEETINGS.** (a) Special meetings of the Board may be
called by the Chairperson or by any three Board members on ten (10) days
notice given in accordance with the regulations and bylaws of the Bank.
The person or persons calling the meeting shall fix the time and place
for the holding of the meeting.

\(b\) Special meetings of the Board may be held on less than ten (10)
days notice if a majority of the Directors determines by a recorded vote
that Bank business requires that the special meeting be held on less
than ten (10) days notice and that no earlier public announcement of the
change is possible.

**SEC. 5.3 NOTICE.** Notice of any meeting shall be given in writing and
delivered in person, by mail, by facsimile, or by telegram, to each
Director and published in the [Federal Register]{.underline}. If mailed,
such notices shall be deemed to be delivered when deposited in the
United States mail, addressed to the Director at the Director's address
as it appears on the records of the Bank, with postage thereon prepaid;
and if notice is by telephone facsimile, such notice shall be deemed to
be delivered when transmission of notice has been successfully completed
as shown on the facsimile machine's communication report or comparable
document; and if notice is by telegram, such notice shall be deemed to
be delivered when the telegram is delivered to the telegram company
prepaid.

**SEC. 5.4 QUORUM.** A majority of the members of the Board shall
constitute a quorum for the transaction of business at any meeting of
the Board; *Provided, however,* That if less than a majority of the
Board members is present at said meetings, a majority of Board members
present may adjourn the meeting from time to time; *And provided,
further,* That the Secretary shall notify any absent Board members of
the time and place of such adjourned meeting and shall publish notice
thereof in the [Federal Register]{.underline}. The act of a majority of
the Board members present at a meeting at which a quorum is present
shall be the act of the Board except as otherwise provided in these
bylaws.

**SEC. 5.5 SUNSHINE ACT.** All meetings of the Board shall comply with
the Government in the Sunshine Act (5 U.S.C. 552b) and the regulations
of the Bank implementing such Act (7 CFR §1600.1 [et]{.underline}
[seq]{.underline}.).

**SEC. 5.6 MEETING BY** **ELECTRONIC** **MEANS.** Meetings of the Board
of Directors may be held by any electronic means, including, without
limitation, telephone or any other communications equipment, provided
that, during the meeting, all persons participating can clearly and
promptly hear, send, and receive all messages or spoken words.
Participation in such a meeting shall constitute presence at the
meeting.

**ARTICLE VI - OFFICERS**

**SEC. 6.1 NUMBER.** The officers of the Board of Directors shall be the
Chairperson, Vice Chairperson, Secretary, Treasurer, and such other
officers as may be determined by the Board from time to time. The
offices of Secretary and Treasurer may be held by the same person.

**SEC. 6.2 ELECTION AND TERM OF OFFICE.** The officers shall be elected
by the Board at the meeting of the Board held pursuant to section 5.1 of
these bylaws. If the election of officers shall not be held at such
meeting, such election shall be held as conveniently thereafter as may
be. Each officer shall hold office until the first meeting of the Board
following the next succeeding election of Directors or until the
officer's successor shall have been elected and shall have qualified. A
vacancy in any office shall be filled by the Board for the unexpired
portion of the term.

**SEC. 6.3 REMOVAL OF OFFICERS AND AGENTS.** Any officer or agent
elected or appointed by the Board may be removed by the Board whenever
in its judgment the best interest of the Bank will be served thereby.

**SEC. 6.4 CHAIRPERSON AND VICE CHAIRPERSON.** The Chairperson or, in
the Chairperson\'s absence or inability to act, the Vice Chairperson
shall:

\(a\) Preside at all meetings of the stockholders and of the Board; and

\(b\) Not vote on a matter before the Board whenever the Chairperson\'s
vote will cause a tie vote on the matter.

**SEC. 6.5 SECRETARY AND ASSISTANT SECRETARY.** The Secretary or, in the
Secretary's absence or inability to act, the Assistant Secretary, shall
be responsible for:

\(a\) Keeping the minutes of all meetings except as otherwise provided
in these bylaws;

\(b\) Seeing that all notices are duly given in accordance with these
bylaws or as required by law;

\(c\) Safekeeping of the corporate records and affixing the seal of the
Bank to all documents, the execution of which on behalf of the Bank
under its seal is duly authorized in accordance with the provisions of
these bylaws;

\(d\) Keeping stock records containing names and addresses of all
stockholders of the Bank, showing, among other things, the number of
shares held by each, and the dates when they became the owners thereof;

\(e\) Attesting share certificates, and telephone debentures, the issue
of which shall have been authorized by the Board;

\(f\) Keeping on file at all times a complete copy of the bylaws of the
Bank containing all amendments thereto and, at the expense of the Bank,
furnishing a copy of the bylaws and of all amendments thereto to every
stockholder; and

\(g\) In general performing all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to
the Secretary by the Board.

**SEC. 6.6 TREASURER AND ASSISTANT TREASURER.** The Treasurer or, in the
Treasurer's absence or inability to act, the Assistant Treasurer, shall
be responsible for:

\(a\) Custody of all funds and securities of the Bank;

\(b\) The receipt of, and the issuance of receipts for, all moneys due
and payable to the Bank and for the deposit of all such moneys in the
name of the Bank in accordance with the provisions of these bylaws;

\(c\) Signing all checks, drafts, or other orders for the payment of
money; and

\(d\) In general performing all the duties incident to the office of the
Treasurer and such other duties as from time to time may be assigned to
the Treasurer by the Board.

**SEC. 6.7 GOVERNOR.** The Governor shall be the chief executive officer
of the Bank, and, without limiting the generality of the authority
vested in the Governor by law, shall:

\(a\) Sign share certificates and telephone debentures, the issue of
which shall have been authorized by the Board, and any other instrument
or document of the Bank;

\(b\) Establish the positions of Deputy Governor, Assistant Governor,
Deputy Assistant Governor, Assistant Secretary, and Assistant Treasurer
and recommend to the Board for approval those persons to serve in such
positions; and establish such other positions as the Governor shall deem
necessary, and appoint persons to fill such positions; and

\(c\) Carry-out policy adopted by the Board of Directors and administer
the telephone program in compliance with the laws enacted by Congress.

**SEC. 6.8 BONDS.** Officers, employees or agents of the Bank shall be
bonded, at the expense of the Bank, if and to the extent the Governor
and the Board shall determine.

**SEC. 6.9 REPORTS.** The officers of the Bank shall annually submit to
the stockholders and to persons with a loan or loan commitment from RUS
reports covering the business of the Bank. The Board shall also make an
annual report to the Secretary of Agriculture, for transmittal to the
Congress, on the Administration of Title IV of the Rural Electrification
Act of 1936, as amended, and upon any other matters relating to the
effectuation of the policies of said Title IV, including recommendations
for legislation.

**ARTICLE VII - FINANCIAL TRANSACTIONS**

**SEC. 7.1 COUNTERSIGNATURE OF CHECKS, DRAFTS, ETC.** Unless otherwise
determined by the Governor, all checks, drafts or other orders for the
payment of money shall be countersigned by such person or persons as
shall be designated by the Governor.

**SEC. 7.2 DEPOSITS.** All funds except petty cash of the Bank shall be
deposited from time to time to the credit of the Bank in accordance with
the provisions of 31 United States Code 867. If, in accordance with the
provisions of such law, the Bank is permitted to choose a depository
other than the Treasurer of the United States, the Governor, with the
approval of the Board, shall select such other depository or
depositories.

**SEC. 7.3 FISCAL YEAR.** The fiscal year of the Bank shall, through
June 30, 1976, commence on July 1 of each year and end on June 30 of the
following year; and shall, beginning on October 1, 1976, commence on
October 1 of each year and end on September 30 of the following year
with the three months ending on September 30, 1976, being considered a
transition quarter between two fiscal years.

**ARTICLE VIII - PATRONAGE CAPITAL**

**SEC. 8.1 PATRONAGE CAPITAL ASSIGNABLE.** \"Patronage capital
assignable\" shall consist of all revenues of the Bank for any fiscal
year in excess of the amount thereof necessary to:

\(a\) Pay expenses of the Bank, including without limitation, payments
in lieu of property taxes as provided in section 401(c) of the Act;

\(b\) Pay interest on telephone debentures accruing in such fiscal year;

\(c\) Provide reasonable allowances for depreciation, obsolescence and
losses on loans and interest receivable;

\(d\) Pay to the holder or holders of Class A stock an amount equal to
two per centum (2%) per annum of the capital furnished to the Bank for
such stock; and

\(e\) Pay to the holders of Class C stock dividends at the rate
determined by the Board; *Provided, however,* That no dividends shall be
declared on Class C stock until arrearages, if any, on payments to
holders of the cumulative Class A stock have been paid; *And provided,
further,* That until all Class A stock shall have been retired, the
Board shall not declare any dividends on Class C stock at an annual rate
in excess of the then current average rate payable on the Bank\'s
telephone debentures.

**SEC. 8.2 CALCULATION OF PATRONAGE REFUNDS.** (a) After the end of each
fiscal year after fiscal year 1987, the patronage capital assignable
will be transferred to the reserve for losses due to interest rate
fluctuations. Any amounts in this reserve then in excess of \$10,000,000
shall be transferred from the reserve, on the basis of amounts first
transferred to the reserve being those first transferred therefrom and
these amounts shall be allocated as Class B stock to those borrowers
holding Class B stock during the fiscal year the amounts were earned.
The amount allocated to each such holder of Class B stock for each
fiscal year shall be calculated by applying to the amount for a
particular year transferred from the reserve pursuant to the preceding
sentence the ratio which the amount of interest revenue to the Bank from
each such holder of Class B stock in that same fiscal year bears to the
Bank\'s total interest revenue from all holders of Class B stock in that
same fiscal year.

\(b\) If, at any time after all Class A stock has been retired, the
Board should determine that the Bank\'s financial condition will not be
impaired thereby, it may establish procedures for the retirement of
Class B stock in full or in part or its conversion to Class C stock in
addition to the partial or full conversions authorized in section 2.2(b)
hereof.

**SEC. 8.3 CALCULATION OF CLASS C STOCK DIVIDEND.** For any fiscal year
after 1988, any dividends on Class C stock shall be paid to the holders
hereof on the basis of one-twelfth of the dividend for each full month,
or portion of a month, the stock is held during such fiscal year.

**ARTICLE IX - MISCELLANEOUS**

**SEC. 9.1 WAIVER OF NOTICE.** Any stockholder or member of the Board
may waive in writing any notice of a meeting required to be given by
these bylaws, either before or after the time of such meeting. The
attendance of a stockholder or member of the Board at any meeting shall
constitute a waiver of notice of such meeting by such stockholder or
Board member, unless such attendance shall be for the express purpose of
objecting to the transaction of any business on the ground that the
meeting has not been lawfully called or convened.

**SEC. 9.2 POLICIES, RULES AND REGULATIONS.** The Board shall have power
to make and adopt such policies, rules and regulations, not inconsistent
with law or these bylaws, as it may deem advisable for the management of
the Bank.

**SEC. 9.3 ACCOUNTING SYSTEM AND AUDIT REPORTS.** The Board shall cause
to be established and maintained a complete accounting system which,
among other things, shall conform to accounting system principles,
standards and procedures applicable to corporate business enterprises. A
summary of the report of each audit of the Bank\'s financial
transactions made by the General Accounting Office of the United States
shall be mailed to each stockholder promptly after the report shall have
been received.

**SEC. 9.4 SEAL.** The Board shall adopt a suitable corporate seal,
containing the name of the Bank.

**SEC. 9.5 CONDUCT OF MEETINGS.** Meetings of stockholders and Directors
of the Bank shall be conducted in accordance with the current edition of
\"Roberts\' Rules of Order\" except as such rules may be inconsistent
with the Act or these Bylaws.

**ARTICLE X - AMENDMENTS**

These bylaws may be altered or amended by a vote of two-thirds of the
entire Board at any regular or special meeting of the Board provided the
notice of such meeting shall contain a copy of the proposed amendment or
alteration. All stockholders shall be notified immediately of any
amendment of these bylaws.