BYLAWS OF HARVEST MOON NATURAL FOODS COOPERATIVE, INC.
Section 1.
Qualifications. Any individual, household, firm,
cooperative, nonprofit corporation or other corporation may, upon approval or
pursuant to the authorization of the Board of Directors, become a member of
this cooperative pursuant to terms established by the Board of Directors. This cooperative shall not discriminate
in its membership on social or political grounds, or on the basis of race,
creed, age, sex, handicap, sexual preference or marital status. Each transaction between this
cooperative and each member shall be subject to and shall include as part of
its terms each provision of the Articles of Incorporation of this cooperative
and these Bylaws, whether or not the same be expressly referred to in said
transaction.
Section 2.
One
Class of Members. There shall be
one class of members in this cooperative.
Each corporate or household member shall designate one person to vote on
its behalf at the time of becoming a member.
Section 3.
Admission
of New Members.
Application and Investment
Requirement. Application for
membership shall be made in writing on a form provided by this
cooperative. Pending approval by
the Board of Directors of the membership application, each prospective member
shall purchase one (1) share of Class A stock and such number of shares of
Class B stock as may be determined from time to time by the Board of
Directors.
Approval of Application. Each application shall be acted on the
Board of Directors at the first meeting of the Board following receipt of the
application. The Board of
Directors shall have full authority to approve or reject a membership
application based on policies established and approved by the Board.
Information. Each new member shall receive a copy of
the Articles of Incorporation nd Bylaws of this cooperative.
Section 4.
Termination
of Membership. Membership may be
terminated voluntarily by a member upon notice to this cooperative. Membership shall terminate
automatically if a member dies, ceases to exist, or fails to patronize this
cooperative for a period of one (1) year.
Membership of a member may also be terminated by the Board of Directors
at its discretion whenever the Board of Directors by resolution finds that the
member has:
intentionally or repeatedly
violated any provision of the Articles of Incorporation, Bylaws or Board
policies of this cooperative;
breached any contract with this
cooperative;
wilfully obstructed any lawful
purpose or activity for this cooperative; or
remained indebted to this
cooperative for ninety (90) days after such indebtedness becomes payable. Members who are to be terminated by
resolution of the Board of Directors shall be given notice of the proposed
termination and provided an opportunity to address the Board, if requested by
the member prior to the date of termination.
Section 5.
Actions
Upon Termination. When a member is
terminated, this cooperative shall either: (a) purchase the Class A stock of
the member by tendering to the member, or to the member's heirs or successors,
the par value or the book value of the member's Class A stock, whichever is
less, together with any cash portion of a patronage dividend due or unpaid,
less any indebtedness due this cooperative; or (b) purchase the Class A stock
of the member by tendering to the member, or to the member's heirs or
successors, Class B stock, together with any cash portion of a patronage
dividend due or unpaid, less any indebtedness due this cooperative. Regardless of the reasons for
termination, repurchase of this cooperative's stock from a terminated member
shall be subject to the same terms and limitations governing all stock
repurchases, including availability of replacement capital and the discretion
of the Board of Directors to determine terms of repurchase. Upon termination of membership, the
member shall thereafter have no voting rights in this cooperative. No action taken hereunder shall impair
the obligations or liabilities of either party under any contract with this
cooperative which may be terminated only as provided therein.
Section 6.
Restrictions
on Withdrawals and Transfers of Membership. Upon a member's withdrawal from membership in this
cooperative, the stock of the member can be transferred only to this
cooperative and only upon approval of the Board of Directors. The stock of this cooperative is not
transferable under any other circumstances. This cooperative shall repurchase a terminating member's
stock when this cooperative has received replacement capital from new or
continuing members.
Section 1.
Annual
and Special Meetings. The annual
meeting of the members of this cooperative shall be held at a time and place
fixed by the Board of Directors.
Special meetings of the members of this cooperative may be called by the
Board of Directors or upon the written petition of twenty (20%) of the
members. A special member's
meeting shall be held at the time and place specified in the notice of the
meeting, and the notice shall also state the purpose of the special member's
meeting. No business shall be
considered at a special member's meeting except as mentioned in the notice of
the meeting.
Section 2.
Notice
of Meeting. Notice shall be given
by the Secretary of all meetings of the members by publication in a magazine,
periodical or house organ regularly published by or on behalf of this
cooperative and circulated generally among its members, or by mailing a notice
thereof to each member at t member's last known address, at least two weeks
prior to the date of the meeting.
If a special meeting is called by member petition, the notice of the
time, place and purpose of the special meeting shall be issued within ten (10)
days following receipt of the petition by the President, and the special
meeting shall be held within thirty (30) days following receipt of the petition
by the President. The notice shall
state the date, time and place of the meeting, and in the case of a special
meeting, the purposes for which the meeting is called. The Secretary shall execute a
certificate that contains a copy of the notice, shows the date of mailing or
publication (as the case may be) of the notice, and states the notice was
mailed or published (as the case may be) as prescribed by these Bylaws. The certificate shall be made a part of
the minutes of the meeting. The
failure of any member to receive notice shall not invalidate any action which
may be taken by the members at a meeting.
Section 3.
Voting. Each member shall have one vote upon
any matter submitted to a vote of the members. Voting by mail or electronic means shall be allowed in cases
in which, in the notice of the meeting, the Board of Directors of this cooperative
shall have submitted a specific issue or issues for a mail or electronic
vote. Election of directors,
except to fill a vacancy, shall always be conducted by mail or electronic
ballots, with the opportunity for members to bring ballots to the annual
meeting or to the place of business of this cooperative for counting at the
annual meeting, within the election period and timeline authorized by the Board
of Directors and specified in the voting packet sent to each member with the
ballot. Members may also vote on
any matter by electronic means if an electronic vote is authorized by the
Board. There shall be no voting by
proxy.
Section 4.
Presiding
Officer. The President or his or
her designee shall preside at all meetings of the members and directors.
Section 5.
Quorum,
members. At any regular or special
meeting of the members, a quorum necessary for the transaction of business
shall be at least five (5%) of the total number of holders of voting stock of
this cooperative. Only members in
actual attendance at the meeting shall count towards a quorum, except for
matters submitted to the membership by mail.
Section 1.
Board
of Directors. The business and
affairs of this cooperative shall be governed by the Board of Directors, which
shall consist of seven (7) directors.
The Board of Directors shall exercise all of the powers of this
cooperative except such as are by law, the Articles of Incorporation or these
Bylaws conferred upon or reserved to the members. The Board of Directors may adopt such policies, rules,
regulations and actions not inconsistent with law, the Articles of
Incorporation or these Bylaws, as it deems advisable. The Board of Directors may establish one or more committees
having such powers and authority as are delegated to it by the Board of
Directors.
Section 2.
Director
Qualifications. The qualifications
for the office of director shall be as follows:
The individual must be a member of
this cooperative.
Only one individual per household
or corporate membership may serve on the Board of Directors at any given
time.
No more than one (1) director may
be a paid employee of this cooperative at any given time.
Section 3.
Election
of Directors. At each annual
meeting of the members of this cooperative, directors shall be elected to fill
vacancies created by expired terms.
The term of office of such directors shall be three (3) years and until
their respective successors are elected and qualified.
Section 4.
Vacancies. Each vacancy occurring on the Board of
Directors may be filled by the remaining directors until the next annual
meeting of the members, at which time the members shall elect a director to
serve for the unexpired term; provided, however, that vacancies on the Board
created by an increase in the number of directors pursuant to an amendment of
the Articles of Incorporation or Bylaws shall be filed at the annual meeting of
the members next following the adoption of such amendment unless otherwise
provided in the amendment.
Section 5.
Removal.
Removal by Members for Cause. Any director of this cooperative may,
for cause related to the duties of the position of director, at any annual or
special meeting of the members, be removed from office by a majority vote of
the members present and entitled to vote.
No director shall be removed from office by the members unless he or she
has been informed of the meeting at which the matter is to be considered at
least ten (10) days before such meeting.
Such notice shall be given by certified mail addressed to him or her at
his or her last known address, and he or she shall be entitled to be heard at
such meeting. In case of removal
by action of the members, the members shall fill the vacancy for the unexpired
term of such director by special election.
Removal by Board of Directors for
Cause.
Any director of this cooperative
ma, for cause related to the duties of the position of director, at any regular
or special meeting of the Board of Directors, be removed from office by a vote
of three-fourths (3/4) of all of the remaining directors. No director shall be removed from
office under this subsection unless he or she has been informed of the meeting
at which the matter is to be considered at least ten (10) days before such
meeting. Such notice shall be
given by certified mail addressed to him or her at his or her last known
address, and he or she shall be entitled to be heard at such meeting. In case o f removal of a director by
action of the Board, the Board may fill the resulting vacancy until the next
meeting of the members of this cooperative.
Section 6.
Meetings. The Board of Directors shall meet
regularly at such times and places as the Board may determine. Special meetings may be called by the
President or any three directors.
All meetings shall be held on such notice as the Board may prescribe,
provided that any business may be transacted at any meeting without
specification of such business in the notice of such meeting. Directors may participate in any such
meeting by means of a conference telephone conversation or by other comparable
method of communication by which all persons participating in the meeting can
hear and communicate with each other; and for purposes of taking any action at
the meeting, any such directors shall be deemed present at the meeting.
Section 7.
Quorum
and Voting. A quorum shall consist
of a majority of the directors. A
majority vote of the directors present shall decide all questions except where
a greater vote is required by the Article of Incorporation, by these Bylaws or
by law.
Section 8.
Action
Without Meeting. Any action
required or permitted to be taken at a meeting of the Board of Directors may be
taken without a meeting if all directors consent thereto in writing and the
writing or writings are held with the minutes or proceedings of the Board of
Directors.
Section 1.
Election
of Officers. Promptly following
each annual meeting of the members, the Board of Directors shall elect from its
membership a President, one or more Vice Presidents, a Secretary-Treasurer and
such other officers as it shall deem necessary, with such authority and duties
as may be prescribed by the Board of Directors. Other than the offices of President and Vice President, one
person may hold one or more of the offices of this cooperative if eligible to
hold each such office. If any
vacancy occurs among the officers of this cooperative, it shall be filled by
the Board of Directors at its next regular or special meeting following the
vacancy.
Section 2.
President. The President shall preside at all
meetings of the members and the Board of Directors. The President shall have such authority to execute all
certificates, contracts and other documents on behalf of this cooperative as
may be delegated to the President by the Board of Directors.
Section 3.
Vice
President. In the absence or
disability of the President, the Vice President shall perform the duties of the
President. The Vice President
shall have such other duties as may be assigned to him or her by the President
or the Board of Directors.
Section 4.
Secretary. The Secretary shall keep complete
minutes of each meeting of the members and of the Board of Directors, and shall
sign with the President all notes, deeds and other conveyances of real estate,
and affix the corporate seal to all documents requiring the corporate
seal. The Secretary shall keep a
record of all business of this cooperative and shall prepare and submit to the
annual meeting of the members a report of the previous fiscal year's business.
The annual report shall contain a statement of assets and liabilities, a
statement of income and expenses, and such other statements and statistical
memoranda as the Board of Directors shall require. The Secretary shall perform such other duties as may be required
by the Board of Directors. The
Board of Directors may delegate, or authorize the Secretary to delegate, to any
other officer or employee of this cooperative, under the supervision of the
Secretary, any or all of the duties enumerated in this section.
Section 5.
Treasurer. The Treasurer shall oversee the receipt
and disbursement of all funds of this cooperative, ensure that complete records
of all financial transactions of the cooperative are kept, and perform such
other duties as may be required by the Board of Directors. The Board of Directors may delegate, or
authorize the Treasurer to delegate, to any other officer or employee of this
cooperative, under the supervision of the Treasurer, any or all of the duties
enumerated in this section.
Section 6.
Secretary-Treasurer. In the event that the offices of Secretary and Treasurer
are combined, his or her duties shall be a combination of the duties of the
Secretary and the Treasurer and his or her office shall be known as Secretary-Treasurer.
Section 7.
General
Manager. The Board of Directors
shall have power to employ and supervise a General Manager of this
cooperative. The General Manager
shall have general charge of the ordinary and usual business operations of this
cooperative subject to the direction and approval of the Board of
Directors. The General Manager
shall properly maintain all business records and accounts of this
cooperative. He or she shall
provide annual and periodic reports in a form and manner prescribed by the
Board of Directors. The General
Manager shall employ and discharge employees subject to direction and
guidelines approved by the Board.
The General Manager shall handle and account for all monies belonging to
this cooperative which come into his or her possession in the manner and form
prescribed by the Board of Directors.
Section 1.
Certificate
of Proof of Membership.
The signed, completed membership application form, or a carbon copy
thereof, validated to indicate receipt of initial stock purchase, shall serve
in lieu of certificates for Class A stock, when the initial required stock is
fully paid for and the membership application has been received. Class B stock received as patronage
dividends shall be evidenced by written notice of allocation mailed to the
members. Certificates evidencing
other types of stock shall contain the name of the member who owns the stock,
the membership number assigned to that member, and shall bear the signature of
the President and Secretary. This
cooperative shall retain the right to terminate all memberships as provided in
these Bylaws and to purchase or recall all stock of this cooperative. Redemption of capital stock by this
cooperative is subject to any indebtedness owned to this cooperative by the
member.
Section 2.
Non-Transferability. All shares of stock of this cooperative
shall be transferable only to this cooperative with the consent and approval of
the Board of Directors. Shares of
stock may not be transferred in any other manner.
Section 3.
Refund
or Repurchase by this Cooperative.
This cooperative shall repurchase all shares of stock of terminating
members, whether for cause or for voluntary or involuntary reasons., provided
that this cooperative has received replacement capital from new or continuing
members. The Board of Directors
may establish additional conditions and terms for repurchase of member's shares
of stock, provided such conditions and terms apply to all members
equitably.
Section 4.
Classes and Issuance. To further the cooperative character of this cooperative and provide a means by which its members will finance its activities, this cooperative is authorized to issue Class B and Class C stock, equity reserve or capital interest certificates, or any other media as determined by the Board of Directors and as permitted by law. Funds and credits arising from the issue of such stock, certificates or other media may be used for creating a revolving fund for the purpose of creating working capital to meet this cooperative’s financing needs. Whenever this cooperative determines that all of its funds are not necessary for the proper financing of its operations, the Board of Directors may choose to retire Class B or Class C stock, liquidate equity or capital reserves or any other media previously issued.
Section 5.
Order
of Payment Upon Dissolution or Liquidation. Upon dissolution or liquidation of this cooperative, the
debts and liabilities of this cooperative shall first be paid according to
their respective priorities.
Stockholders or other holders of equity of capital reserve credits or
other media issued by the Board of Directors shall then be paid the par value
of their shares or credits with payment made in the order of preference stated
in the Articles of Incorporation.
Any additional property remaining after stockholders and other equity
holders have been paid shall be distributed to another cooperative doing
business on a cooperative basis or a nonprofit organization exempt from taxes
under Section 501(a) of the Internal Revenue Code, as shall be determined by
the Board of Directors.
Section 1.
Annual
Net Savings.
Gross Receipts. Gross receipts shall be all proceeds
from the sale of goods and services to members and non-members and all other
sums received (including patronage
dividends and all non-patronage income.)
Deductions From Gross
Receipts. This cooperative shall
deduct from gross receipts all expenses incurred in generating said gross
receipts, including but not limited to, marketing expenses, costs of goods or
services sold, taxes, depreciation, reserves for doubtful accounts and all
other necessary expenses.
Total Annual Net Savings. The amount remaining after reducing the
gross receipts in subsection (a) by the deductions in subsection (b) shall
constitute the annual net savings (net earnings) of this cooperative.
Section 2.
Member
Patronage Income.
(a) Member
Patronage. The annual net savings
of this cooperative shall be divided into (1) annual net savings from member
patronage; (2) annual net savings from non-member patronage; and (3) non-patronage sources. Annual net savings from member
patronage shall be determined by multiplying the percentage of gross receipts
attributable business done with or for members (including patronage dividends,
etc.) By the total annual net savings minus non-patronage savings. The resulting amount shall be the
annual net savings from member patronage, which shall be distributed to the
members of this cooperative in proportion to the amount of business done by
each member with the cooperative, subject only to the deductions and the
exceptions provided in Sections 3 and 4 of this Article.
Non-Member Patronage and
Non-Patronage Income. The
difference between total annual net savings and net savings from member
patronage shall be the annual, net savings from non-member patronage and
non-patronage sources.
Section 3.
Educational
Reserve. The Board of Directors
may set aside a sum not to exceed five percent (5%) of non-member patronage and
non-patronage income as an educational fund to promote and encourage
cooperatives.
Section 4.
Capital
Reserve. The Board of Directors
shall annually set aside all annual net savings from non-member patronage and
non-patronage sources less any deductions for the educational reserve as a
capital reserve. In addition, the
Board of Directors may also place into the capital reserve fund all annual net
savings from member patronage attributable to members who are unidentified, or
who do not consent to take into account patronage dividends from this
cooperative in the manner provided in 26 U.S.C. Section 1385. Amounts previously set aside as capital
reserves shall not be allocated to the members but shall be kept in the general
reserve fund of this cooperative.
The Board of Directors may, by resolution duly adopted prior to the
beginning of the fiscal year, set aside up to fifty percent (50%) of the total
annual net savings or other reasonable amounts as a capital reserve.
Section 5.
Patronage
Dividend Distribution.
The annual net savings from member
patronage, less any deductions or exceptions as determined by Sections 3 or 4
of this Article, shall be distributed annually to the members of this
cooperative. Members shall, by
their ongoing membership in this cooperative, consent to include in their
income such patronage distributions from this cooperative in the manner
provided in and to the extent required by 26 U.S.C. Section 1385.
Patronage dividends shall be
distributed in cash or in equity (Class B stock) or by any combination thereof
designated by the Board of Directors.
Equity distributions (Class B stock) may be paid or redeemed in whole or
in part at such time, in such manner and such order as shall be determined by
the Board of Directors in its sole discretion. The Board of Directors may establish policies and programs
for the payments of or redemption of such equities. No transfer or assignment of such equity (Class B stock)
shall be allowed without the approval of this cooperative.
Section 6.
Allocation
of Losses. If this cooperative
sustains an annual loss in net savings from member patronage, the Board of
Directors shall have the power and authority to allocate such losses from
member business in the following manners: (1) to the members for such year or
years on a patronage basis and apply such losses against the equity credits or
stock of said members; (2) to apply the loss to this cooperative's capital
reserve; or (3) to carry such loss forward or back to other years.
Each member of this cooperative
shall, by becoming a member, consent that the amount of any distributions with
respect to such member's patronage occurring in any fiscal year which are made
by qualified written notice of allocation (as defined in 26 U.S.C. Section
1388) received by such member from the cooperative shall be included in such
member's income in the manner provided in 26 U.S.C. Section 1385 during the
taxable year in which the qualified written notices of allocation are
received. It is the intent of his
provision to provide a consent binding on all members who retain or obtain
membership in this cooperative and receive a written notification and copy of
this provision, for the purpose of making such distributions qualified within
the meaning of the Internal Revenue Code.
Section 1.
Indemnification. This cooperative shall indemnify each
person who is or was a director, officer, manager, employee or agent of this
cooperative, and any person serving at the request of this cooperative as a
director, officer, manager, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorney's fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred, to the fullest extent to which such
directors, officers, managers, employees or agents of a cooperative may
indemnified under Minnesota law.
Section 2.
Insurance. This cooperative may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
manager, employee or agent of this cooperative, or is or was serving at the
request of this cooperative as a director, officer, manager, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against that person and incurred by that person
in any such capacity.
Section 1.
Fiscal
Year. The fiscal year of this
cooperative shall end on June 30 of each year.
Section 2.
Borrowing. The Board of Directors shall have power
to authorize and approve the borrowing of money and the pledging and mortgaging
or any or all of the assets of this cooperative as security for the sums so borrowed.
Section 3.
Compensation
and Reimbursement. Compensation of
the Board of Directors shall be determined by resolution of the Board of
Directors. All decisions regarding
director's compensation shall be announced to the members of this cooperative
at that next regular or special meeting of the members. Officers and directors shall also be
entitled to reimbursement for actual expenses incurred in attending Board
meetings or other business of this cooperative. Such expense claims shall be approved by a majority of the
Board. Compensation and
reimbursement paid to directors shall not constitute payments to them as
employees.
Section 4.
Bonds
and Insurance. The Board of
Directors may require the officers, agents or employees charged by this cooperative
with responsibility for the custody of any of its funds or property to give
adequate bonds. Such bonds unless
cash security is given, shall be furnished by a responsible bonding company and
approved by the Board of Directors and the cost thereof shall be paid by this
cooperative. The Board of
Directors shall maintain in effect property and liability insurance for this
cooperative.
Section 5.
Audit. The Board of Directors shall review all
financial statements prepared and presented by management at their regular
meetings but no less than four times a year. The Board may, in addition, have the books audited or
reviewed at least annually by a certified public accountant. Such audit or review shall be made
between the date of the close of the fiscal ear and the date of the annual
meeting of members, and a report of findings, containing at least a statement
of assets and liabilities showing the financial condition of this cooperative
at the close of the fiscal year and a statement of income and expenses for the
year, shall be submitted to the members at the annual meeting.
Section 6.
Depository. The Board of Directors may select one
or more financial institutions to act as depositories of the funds of this
cooperative, and to determine the manner of receiving, depositing, and
disbursing the funds of this cooperative, the form of checks, and the person or
persons by whom such checks shall be signed, with the power to change such
financial institutions and the person or persons signing such checks and the
form thereof at will.
These Bylaws may be amended,
repealed or altered in whole or in part by a majority vote of a quorum of the
members present at a meeting or voting by mail.
Section 1.
Dissolution. This cooperative may be dissolved by a
two-thirds vote of the members present and/or voting at a meeting called to
consider the matter.
Section 2.
Severability. In the event that any provision of
these bylaws is determined to be invalid or unenforceable under any statute or
rule of law, then such provision shall be deemed inoperative to such extent and
shall be deemed modified to confirm with such statute or rule of law without
affecting the validity or enforceability of any other provision of these
bylaws.
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