Lehigh Valley Food Cooperative

Bylaws of the Lehigh Valley Food Cooperative

Background information:
Lehigh Valley Food Cooperative (LVFCo-op) adopted a combination of bylaws of Weaver's Way Co-op, People's Food Co-op and Onion River Co-op. As we are initiating a cooperatively-owned Virtual Farmers' Market, they may need some revision. The below bylaws are preliminary and will be voted in place at a later date. If you have any comments or concerns about the way the Co-op is materializing, please email membership@lvfood.coop.

Article I - Name & Purposes
1. Name. The name of the organization shall be Lehigh Valley Food Co-op(Hereinafter "the co-op").The fiscal year shall run with the calender year beginning January 1st and ending December 31st.
2. Purposes. The cooperative is organized for the following purposes: To purchase and distribute food and other useful goods and services at the lowest possible cost; to encourage patterns of food production and distribution which are healthful, ecologically sound and non-exploitative; To provide educational materials and services concerning nutrition, agricultural and food marketing practices and the world food situation; to encourage cooperative and grass roots forms of organization; and to serve as a center for activities and services in keeping with the above purposes and which otherwise enrich the life of the community To serve its members and the public within the scope of the Article of Incorporation and to the fullest extent permitted by the statute.
3. Ownership and Governance. The cooperative shall be owned by its members and shall operate for the primary and mutual benefit of its members as patrons of its goods and services. The business of the cooperative shall be governed by its board of directors selected by and accountable to its assembly of members. The assembly of members shall retain all powers required by law or by these bylaws.
Article II - Offices
Article III - Admission/Membership
1. Admission
  1. Ownership in the Co-op shall be voluntary and open to any individual, any household, or business that desires to use the services of the Co-op and is willing to accept the responsibilities of ownership. Applicants will be admitted to ownership upon submitting required information to Board of Directors and purchasing or subscribing to purchase a fair share at a price determined by the Board of Directors. All applicants shall be able to view the by-laws on-line. The Co-op has a non-discrimation statement - The Lehigh Valley Food Co-op does not discriminate in regard to race, color, religion, national origin, place of ancestry, place of birth, sex, sexual orientation, gender identity or expression, marital status, family status, age, handicap or disability, use of guide animal, height or weight.
2. Fair Share Membership
  1. Adult members of a participating household will pay $100 per household. Members have the option for a monthly installment plan of at least $25 per payment over a one year period with $5.00 processing fee for over each payment submitted until $100 fair share amount is reached (minus the processing fees). Fair Shares are redeemable if member(s) choose not to be involved with the Co-op anymore or if moving from the area. Shares can be redeemed only when Board of Directors deems that there is enough equity to allow repayment of said fair shares. Share repurchase will be allotted according to date requested when funds become available. Member can choose to donate fair share fee to Co-op for designated use. Children of members under the age of 18yrs are free. Dependents >18yrs that are full-time college students fees are waived. Fair Share prices are set by the Board of Directors and subject to change as financial needs arise to the Co-op. Members who can produce proof financial need will have reduced or waived membership fees.
  2. All Fair Share Members in good standing may have the option of purchasing preferred stock at a set amount of interest deemed fair market value and according to PA statutes, at time of commencement of the preferred stock program. Board of Directors approval required. Minimum investment of $1,000.00 is required.
  3. Member Loan program at fair market value may commence when agreed upon by the Board of Directors, minimum investment of $1,000.00 required.
3. Membership Requirements Payment in full or in payment plan option for membership capital; completion of, or being in the process of completing membership required work hours as set by the board and approved by the members. Annual membership fee of $25 per family is required, waived in first year of membership that fair shares are purchased.
4. Orientation Applicant members shall be required to attend orientation programs where rules, procedures and policies will be explained. Programs will be at varying times as to allow for different time availabilities.
5. Records
  1. Records shall be kept showing the names, addresses, phone numbers and date of membership for each member including all persons in a household.
  2. Access to information. Owners shall be provided reasonably adequate and timely information as to the organizational and financial affairs of the Co-op. Owners shall be provided access to the books and records of the Co-op at all reasonable times and for any proper purpose. The Board may deny such access if it reasonably determines that the purpose of such access is not directly related to a legitimate interest of the owner and is contrary to the best interests of the Co-op. The Board may also provide a reasonable alternative to such access that adequately accommodates a proper purpose.
  3. Settlement of disputes. In any dispute between the Co-op and any of its owners or former owners which cannot be resolved through informal negotiation, it shall be the policy of the Co-op to prefer the use of mediation whereby an impartial mediator may facilitate negotiations between the parties and assist them in developing a mutually acceptable settlement. No party with a grievance against the other shall have recourse to litigation until the matter is submitted to mediation and attempted to be resolved in good faith.
6. Work Requirement
  1. The Co-op Board of Directors has set a minimum work requirement of 4 hrs per family per month which is subject to change as needs arise. Anyone in the family (16 yrs and older)can do the work requirement for an adult member. Work requirement can be completed at home, at the Co-op, or in the field. A member may have the opportunity to bank their hours when doing a particular job for the Co-op.
7. Termination of Membership
  1. A member may, at any time, terminate membership in the Co-op by submitting to a person designated by the Board of Directors a written statement stating that the member wishes to terminate membership. Such statement shall be signed by the member or where applicable, all persons in a household. Voluntary termination shall not affect the terminating member’s existing liabilities to the Co-op. The member’s regular capital shall, upon written request, be returned in cash subject to deductions for debts owed to the Co-op.
8. Leave of Absence
  1. Leaves of absence may be granted for periods not to exceed one year. During the leave of absence the member shall be relieved from any annual work requirement, but shall not be relieved of any requirements related to payment of capital. The member shall retain his/her right to vote during the leave.
9. Transfer of Membership
  1. Membership shall be nontransferable.
10. Death of a Member
  1. Upon the death of the last or only person included in a membership, the membership shall immediately terminate. Upon written request, the Co-op shall return the member’s regular capital to the person designated as “beneficiary” on the Co-op’s records. If no such request is made within two years after the member’s death, all of the member’s capital shall be forfeited and transferred to the reserve capital account.
11. Suspension or Expulsion
  1. The Board of Directors may suspend or expel any member for cause. A member proposed for suspension or expulsion shall be given reasonable notice of the pending action. The Board shall be authorized to prescribe procedures under which the proposed suspension or expulsion shall be considered. The member shall have the right to appeal to the membership at the next regularly scheduled membership meeting. Suspension or expulsion of a member shall not affect that member’s existing liabilities to the Co-op. If a member is expelled, the member’s regular capital shall be returned, subject to deductions for debts owed to the Co-op.
12. Limits on Members
  1. The Board of Directors may, from time to time, decide to limit the number of members of the Co-op, and may decide to limit new applications for membership if needs arise.
Article IV - Meetings of Members
1. Semi-annual Meetings
  1. Regular meetings of the members shall be held semi-annually, one in the Fall and one in the Spring at a date, time and place to be determined by the Board of Directors.
2. Special Meetings
  1. Special meetings of the members may be called by a resolution of the Board of Directors, or by a petition signed by at least one-tenth of the members entitled to vote stating the purpose of the requested meeting and delivered to the Secretary. Upon receipt of such a request, the Secretary shall call a special meeting which shall take place within thirty days. If the Secretary fails to call the meeting and issue notice of it within seven days after receipt of the petition, the petitioning members may issue the notice, and the Co-op shall pay the reasonable costs of such notice.
3. Notice of Meetings
  1. The Secretary shall email a written notice of each meeting of the members, setting forth the date, time, place and nature of the business of the meeting, to each member at the member’s last known e-mail address, not less than twenty days before the date of the meeting. The notice shall also be conspicuously posted at the Co-op.
4. Agenda
  1. The agenda for the meeting shall be set forth in the notice of meeting, and no business other than that generally set forth in the notice shall be transacted at the meeting or any adjournment of it. The agenda of regular membership meetings shall be developed by the Board. Any member may request that an item be placed on the agenda of a membership meeting by submitting to the Board a petition of ten (10) voting members, which shall be delivered to the Board within sufficient time for the issue to be publicized in the notice of the membership meeting sent to members.
5. Quorum
  1. A number of household members equivalent to either five percent (5%) of the members or fifty (50) members, which ever is less, shall constitute a quorum at any meeting of members. The members present at a properly organized meeting may continue to do business, despite the withdrawal from the meeting of enough members to leave less than a quorum. If a meeting of members cannot be organized because a quorum has not attended, those present may adjourn the meeting to such date, time and place as they may determine, and notice of such adjourned meeting shall be posted in a conspicuous place at the principal place of business of the Co-op for a period of not less than seven days prior to the date of the adjourned meeting. Those who attend such adjourned meeting, although less than a quorum, shall be deemed to constitute a quorum at that meeting only for the transaction of business from the meeting that was adjourned.
6. Voting
  1. Eligibility - The Membership Chairperson shall review or cause to have reviewed the membership records prior to each meeting of the members and shall determine that they contain the names of members in good standing and entitled to vote. A list of such members or other similar records shall be produced and kept open at the time and place of such meeting. Listing in the membership records shall be prima facie evidence of a member’s eligibility to vote.
  2. Each single adult household shall have one and only one vote upon any single matter. Each multiple adult household shall have two and only two votes upon any single matter. Voting must be in person, except as specifically authorized in these By-laws. Proxies shall not be permitted. Membership may be required as a condition of attendance at the meeting.
  3. All questions brought before the meeting shall be determined by the votes of a majority of the members present in person and entitled to vote, except as otherwise provided by statute or these Bylaws.
7. Conduct of Meetings
  1. Meetings of members shall be governed by Robert’s Rules of Order or The Modern Rules of Order, as determined by the presiding officer prior to commencement of the meeting. The presiding officer at such meeting shall appoint a parliamentarian to advise the presiding officer with regard to procedural matters. The regular meetings of members shall include the following matters:
    1. Recording the names of members present;
    2. Reading and action on minutes of previous meeting of members;
    3. Elections;
    4. Reports of Officers, Board of Directors, committees, and manager;
    5. Report of financial condition;
    6. Other business.
8. Notice of Nomination and Election of Directors and of Committee Chairpersons
  1. No later than sixty (60) days prior to the Spring membership meeting the Chairperson of the Leadership Committee shall post a notice of elections in a conspicuous place at the principal place of business of the Co-op, which notice shall state the date of the elections, the positions for which elections are to be held and the procedure for nomination of candidates for the positions. The notice shall also be published in a publication generally distributed to all members. Nominations of candidates for positions on the Board of Directors and for Committee Chairpersons may be made by any person in a member household by submitting the name of the nominee(s) to the Chairperson of the Leadership Committee of the Co-op within sufficient time to permit the nomination to be disseminated to the membership by mail in accordance with these by-laws. Representatives of the Leadership Committee shall contact each nominee and determine the nominee’s willingness to serve.
9. Referendum on Acts of Directors
  1. Issues for decision by the membership may be placed on the ballot in any of the following ways: a) by action of the board of directors; b) by action of the assembly of members at a meeting; c) by written petition signed by twenty-five (25) or more members which is submitted to the principal office of the cooperative. Decisions on all such issues shall be binding except where the existence of compelling information not previously available appears, in which case the issue shall be resubmitted to the membership at the next balloting period. In all other cases the same issue cannot be reintroduced for six months after it has been balloted
  2. Any action taken by the Board of Directors shall be referred to the members for approval or disapproval if demanded by petition of at least ten percent (10%) of the members delivered to the Secretary within sixty (60) days after the date that the action is authorized by the Board of Directors. Such matters shall be approved or disapproved by the members at the next regular meeting. Upon receipt of a petition demanding a referendum, the Secretary shall place the item on the agenda for the next membership meeting and shall stay execution of the action until the referendum has been held. Rights of third parties which vest between the time that the action is authorized by the Board of Directors and the time that the petition is received or the referendum is held shall not be impaired by a vote of the members.
10. Termination of Product Boycotts
  1. Any decision made by the membership to participate in a product boycott shall expire at the membership meeting marking the two-year anniversary of any such decision unless reauthorized by majority vote of the membership at that meeting.
Article V - Directors and Officers
1. Election of Directors
  1. The election of Directors shall take place at the Spring meeting. The Board shall provide for voting by absentee ballot for election of Directors, subject to these limitations:
    1. At least twenty (20) days advance notice shall be given to members, by e-mail or in a publication generally distributed to all members and also posted in the principal place of business of the Co-op.
    2. There shall be opportunity in the same publication for presentation of brief statements relating to each candidate.
    3. The ballot shall be available within the Co-op at least twenty (20) days before the date of the meeting at which the vote is to be recorded.
    4. Absentee ballots can be e-mailed @membership@lvfood.coop or mailed to 860 Broad St, Suite 115, Emmaus, PA 18049 to be included in the voting process. Absentee ballots shall be counted at the meeting at which the vote is to be recorded. No absentee ballot received after the meeting date shall be counted.
    5. Members who do not vote by absentee shall be permitted to vote in person by attending the meeting. Members voting by absentee may change their votes at the membership meeting.
2. Number of Directors
  1. Effective with the Board election at the February meeting of 2008, the administration of the Co-op shall be vested in a Board of Directors comprised of a minimum of nine (9) and a maximum of eleven (11) persons who shall act for the Co-op in all matters, except those required by statute, the Articles of Incorporation or reserved by these By-laws for the members.
3. Board Positions
  1. The Board of Directors shall consist of the following persons, all of whom shall be members of the Co-op: the President, the Vice-President, the Secretary, the Treasurer, the Immediate Past-President, and a minimum of four (4) and a maximum of six (6) other Directors, at least 1, with limit on 2 directors may be staff members, and the rest from the membership at-large. If the Immediate Past President is unavailable to serve as a Director, there shall be one additional at large Director. The Immediate Past-President shall in all other respects be treated as an at-large Director. Staff members may not be elected to other positions on the Board. Except for vacancies filled subject to Article V, Section 6, and the position of Immediate Past-President, all Directors are elected by the membership according to Article V, Section 1.
4. Officers
  1. The officers of the Co-op shall be a President, Vice-President, Secretary and Treasurer, all of whom shall be elected to their offices by the Board at the first Board meeting following the election of Directors. The officers shall be elected by a majority vote of those present and voting. Officers shall be elected for a term of one (1) year and shall serve until that officer’s successor is elected and assumes office. Transition election of 2009: The Treasurer and Secretary who were elected in 2005 shall continue to serve in that capacity until the election of 2009; the President and Vice-President shall be elected by the Board following the election of Spring 2009.
5. Terms of Office'
  1. Terms of Office of Directors - Each Director shall be elected for a term of two (2) years and shall serve until that Director’s successor is elected and assumes office.
  2. Term Limits - Membership on the Board, except in the case of the Immediate Past-President position who may serve an additional year, shall be limited to three (3) consecutive two-year terms. After being elected and serving a third consecutive term on the Board, a member shall retire from the Board for one year, before regaining his or her eligibility for election.
  3. Staggered Terms of Office - The election of Directors will be such that terms are staggered so that under normal circumstances approximately half the Directors are elected in even-numbered years and half in odd-numbered years.
6. Vacancies
  1. Vacancies on the Board of Directors occurring between elections shall be filled by a majority vote of the remaining Directors, and each person so elected shall be a Director until his or her successor is elected by the members at the next membership meeting. If the size of the Board falls below the 9-member minimum, the Board may continue to function, but must make a good faith effort to bring the size back to the minimum as soon as possible.
7. Removal of Directors
  1. A Director may be removed with or without cause, by a vote of at least two-thirds of the members present and entitled to vote at a regular or special membership meeting. Any member or members may request removal by bringing formal charges against a Director by following the procedures which are set forth in the By-laws for the calling of a special membership meeting. The Director whose removal is proposed shall be given the opportunity to be heard at the membership meeting. A vacancy caused by removal shall be filled at the same meeting by the vote of the members present at the meeting.
  2. Directors who incur three (3) consecutive unexcused absences from Board meetings shall be automatically removed. An unexcused absence shall be determined by the President.
8. Compensation of Directors
  1. Directors shall receive a monetary stipend for compensation from the Coop for their services as Directors as approved by the membership. Co-op will reimburse Directors for any personal expenses incurred while in office with proof of receipt and when funds are available for payment by the Co-op.
9. Meetings
  1. The Board of Directors may hold meetings, both regular and special, at such time and place as they may, from time to time, determine. The date, time and place of each meeting of the Board of Directors shall be posted by the Secretary in a conspicuous place at the principal place of business of the Co-op for at least three (3) days prior to a special meeting, and two (2) weeks prior to a regular meeting. All meetings for the transaction of business of the Board of Directors shall be open to the membership of the Co-op.
10. Special Meetings
  1. Special meetings of the Board of Directors may be called by the President or by any three (3) Directors. Notice of a special meeting shall be given to each Director at last three (3) days prior to the meeting if possible.
  2. Decision making. Decisions of the Board shall be made by a system to be established in writing by the Board, such system to be within the range of majority rule to full consensus.
  3. Action without a meeting. Any action required or permitted to be taken at a meeting of the Board may be taken without a meeting if a written consent to the action is signed by all directors and filed with the minutes of meetings.
11. Quorum
  1. At all meetings of the Board of Directors, a majority of those who are presently serving on the Board shall be necessary to constitute a quorum for the transaction of business. If a quorum shall not be present at any meeting of Directors, the Directors present may adjourn the meeting and determine a time and place for an adjourned meeting. Notice of the adjourned meeting shall be given to each Director, and shall be posted at least three (3) days prior to the adjourned meeting.
12. Decision-Making
  1. The membership shall decide all major policy changes, including relocation or moving of the principle offices or retail outlet of the cooperative, or changes in membership rights, responsibilities, or requirements. These decisions shall be decided by the referendum process with a simple majority vote being decisive. Board of Director's recommendations on major policy changes shall be presented at regular or special meetings of the assembly of members. In all cases, a majority shall mean the majority of ballots cast. In the case of changes to the articles of incorporation, merge or consolidation, dissolution or sale, exchange of transfer of all or substantially all of the assets of the cooperative, a special meeting must be called to discuss the issue at hand, and whereafter balloting shall decide the issue by a 2/3 majority of ballots cast. Balloting shall occur as in 3.5. The board of directors and any committees shall endeavor to decide all issues by consensus through reconciling differing points of views based upon the purposes of the cooperative. Any issue decided by consensus shall be deemed to be inclusive of a vote in any percentage required by law. If after diligent efforts a consensus cannot be reached and a majority decide a decision must be made, then a majority shall decide the issue. Upon resolution of the issue, decision-making shall revert to consensus.
Article VI - Officers
1. President
  1. The President shall preside at all meetings of the Board of Directors. The President shall oversee all operations of the Co-op and shall see that all orders and resolutions of the Board of Directors and of the members are carried into effect. Except as otherwise provided by these Bylaws or resolution of the Board of Directors, the President shall sign all contractual notes, bonds and other evidences of indebtedness issued by the Co-op, and other official instruments or documents of the Co-op. The president shall be a member ex-officio of all committees of the Coop. The President shall deliver the report of the Board of Directors at the membership meetings.
2. Vice-President
  1. The Vice-President shall, in the absence or disability of the President, perform the duties and exercise the power of the President. In the event of the death, resignation or midterm withdrawal from office by the President, the Vice-President shall complete the unexpired term of the President. The Vice-President shall preside at membership meetings, shall rule on points of order and procedure at such meetings, shall appoint a parliamentarian at such meetings to advise on points of order and procedure and shall not vote unless a tie occurs. The Vice-President shall be a liaison between the committee chairpersons and the board. The Vice-President shall perform such other duties and have such other powers as the Board of Directors may, from time to time, prescribe.
3. Secretary
  1. The Secretary shall attend all meetings of the membership and Board of Directors and shall record or cause to be recorded the minutes of the meeting. The Secretary shall post a copy of the minutes of the meetings of the Board of Directors and general membership meetings in a conspicuous place at the principal place of business of the Co-op. Minutes of the Board of Directors meetings shall be posted within seven (7) days after approval by the Board. Draft minutes of the general membership meetings shall be posted no later than twenty (20) days prior to the general membership meeting at which they are scheduled to be approved. The Secretary shall give all notice of meetings required by these By-laws. The Secretary shall keep custody of the official documents of the Co-op. The Secretary shall keep custody of the seal of the Co-op, and, when authorized by the Board of Directors, affix it to any instrument and attest to its authenticity by signature.
4. Treasurer
  1. The Treasurer shall monitor the operations accounts on a monthly basis and report to the Board as appropriate. Treasurer shall chair the Finance Committee, assist in the preparation of the budget, and advise and assist on making financial information available to both co-op members and the Board. In addition, the Treasurer shall serve as the liaison between the Board and its accountant.
Article VII - Committees
1. Standing Committees
  1. Committees are established to provide a means for Lehigh Valley Food Co-op members to participate directly in furthering our co-op’s mission. Committee activity shall be within the scope of these bylaws and the Lehigh Valley Food Co-op's Mission Statement, and shall be subject to board supervision. The Coop shall have the following standing committees: Finance, Membership, Community Outreach, Media/Advertisement.
    1. Committee Chairpersons shall be elected by the committee members at the first meeting following the Spring Membership Meeting and shall serve for 1 year or until a successor has been elected and assumes office.
    2. Vacancies - Vacancies caused by the resignation of a Committee Chairperson between elections shall be filled by a majority vote of the members of that committee, and each person so elected shall be the Chairperson until his or her successor is chosen according to Article VII, Section 1a.
    3. Removal of Committee Chairpersons - Provisions of Article V, Section 7, Removal of Directors, apply.
2. Education Committee
  1. The Education Committee shall:
    1. Assist the Board in the development and monitoring of editorial and advertising policy for the newsletter and website;
    2. Develop a program of continuing education in matters related to the Co-op’s purposes and operations;
    3. Arrange education and development meetings and conferences;
    4. Work to further the education of LVFCo-op members and the general public in matters related to the general mission of LVFCo-op.
3. Membership Committee
  1. The Membership Committee shall assist and advise the General Manager and the Board on issues relating to membership, including instructing new members as to the philosophy and procedures of the Co-op, and the recruitment of and outreach to new members
4. Merchandising Support Committee
  1. The Merchandising Support Committee shall provide support and advice to the General Manager and the Board of Directors on merchandising issues.
5. Environment Committee
  1. The Environment Committee shall engage in environmental activities that benefit the Co-op, our community and our world.
6. Finance Committee
  1. The Finance Committee shall be chaired by the Treasurer and shall serve in an advisory capacity to both the General Manager and the Board in the oversight and reporting of the financial status of the Co-op.
7. Operations Support Committee
  1. The Operations Support Committee shall provide support and advice to the General Manager and the Board of Directors on operational issues.
8. Diversity and Outreach Committee
  1. The Diversity and Outreach Committee shall work toward better reflecting the diversity of our community in our membership. We seek diversity in many areas — principally in race and ethnicity, but also in income, age, and other differences.
9. Special Committees
  1. The Board of Directors may, by resolution, designate other committees for such purposes and such times as the Board shall decide.
Article VIII - Miscellaneous
1. Manager
  1. The Board of Directors of the Co-op shall hire a manager who shall be subject to the direction, management and control of the Board of Directors. The manager shall perform such duties and shall have such responsibilities as the Board of Directors shall, from time to time, determine.
2. Bonding
  1. All persons authorized to sign checks or withdraw funds of the Co-op, bookkeepers performing services for the Coop and any other persons handling funds of the Co-op amounting to $1,000 or more in any one year shall be covered by an adequate bond in an amount to be determined by the Board of Directors. This bonding coverage shall be maintained at the Co-op’s expense (to be assumed at direction of BOD).
3. Auditing
  1. The Books of the Co-op shall be audited at least once every three (3) years or when deemed necessary by the Board of Directors, with no less than a Review in the intervening years by a certified public accountant who shall be independent of the Co-op. Additionally, the Board will ensure that an annual review of the financial controls of the Co-op is conducted.
4. Checks
  1. All checks of the Co-op shall be signed by such persons as the Board of Directors shall designate.
5. Fiscal Year
  1. The Fiscal year shall start January 1st and end on December 31st.
6. Seal
  1. The Board may authorize the purchase of a corporate seal. The seal of the Co-op shall have inscribed upon it the name of the Co-op, the year 2008, and the Commonwealth of Pennsylvania.
7. Amendment of By-laws
  1. These By-laws may be altered, amended or repealed by a majority of the members present and entitled to vote at any regular or special membership meeting duly convened after notice to the members of this purpose, which notice shall contain the text of the proposed amendments. Any proposed amendments to these By-laws must be posted in a conspicuous place at the principal place of business of the Co-op for at least fourteen (14) days prior to the meeting at which they will be acted upon.
  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 conform with such statute or rule of law without affecting the validity or enforceability of any other provision of these bylaws.
8. Fiduciary Duty
  1. A Director of the Co-op shall stand in a fiduciary relation to the Co-op and shall perform his or her duties as a Director, including his or her duties as a member of any committee of the Board upon which he or she may serve, in good faith, in a matter he or she reasonably believes to be in the best interest of the Co-op, and with such care, including reasonable inquiry, zeal and diligence, as a person of ordinary prudence would use under similar circumstances. In performing his or her duties, a Director shall be entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared by any of the following: (1) one or more officers or employees of the Co-op whom the Director reasonably believes to be reliable and competent in the matters presented; (2) counsel, public accountants or other persons as to matters which the Director reasonably believes to be within the professional or expert competence of such person; (3) a committee of the Co-op as to matters within its designated authority, which the Director reasonably believes to merit confidence.
  2. In discharging the duties of their respective positions, the Board of Directors may, in considering the best interests of the Co-op, consider the effects of any action upon employees, suppliers, members of the Co-op and the community in which the Co-op is located, and all other pertinent factors. The consideration of those factors shall not constitute a violation of this section. Absent breach of fiduciary duty, lack of good faith or self-dealing, actions taken as a Director or any failure to take any action shall be presumed to be in the best interest of the Co-op.
  3. A Director of the Co-op shall not be personally liable for monetary damages for any action taken or for any failure to take any action, unless: (1) the Director has breached or failed to perform the duties of his or her office under this section; (2) the breach or failure to perform constitutes selfdealing, willful misconduct or recklessness. The provisions of this section shall not apply to: (1) the responsibility or liability of the Director pursuant to any criminal statute; or (2) the liability of a Director for the payment of taxes pursuant to local, state or federal law. The Co-op shall indemnify each of its Directors, officers, committee chairs and employees who was or is an authorized representative of the Co-op and who was or is “party” (which shall include for purposes of this provision the giving of testimony or similar involvement) or is threatened to be made a party to any “proceeding” (which shall mean for purposes of this provision any threatened, pending or completed action, suit, appeal or other proceeding of any nature, whether civil administrative or investigative, whether formal or informal, and whether brought by or in the right of the Co-op or otherwise) by reason of fact that such person was or is an authorized representative of the Co-op, to the fullest extent permitted by law, including without limitation, indemnification against expenses (which shall include for purposes of this provision attorney’s fees and disbursements), damages, punitive damages, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding, unless the act or failure to act giving rise to the claim is finally determined by a court to have constituted willful misconduct or recklessness. If an authorized representative is not entitled to indemnification in respect of a portion of any liabilities to which such person may be subject, the Co-op shall nonetheless indemnify such person to the maximum extent for the remaining portion of the liabilities.
  4. The Co-op shall pay the expenses (including attorney’s fees and disbursements) actually and reasonably incurred in defending a proceeding on behalf of any person entitled to indemnification under Section C of this provision in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Co-op and may pay such expenses in advance on behalf of any employee or agent on receipt of a similar undertaking. The financial ability of such authorized representative to make such repayment shall not be a prerequisite to the making of an advance.
  5. Each person who shall act as an authorized representative of the Co-op shall be deemed to be doing so in reliance upon the rights of indemnification provided by this provision.
  6. All rights of indemnification under this provision shall be deemed a contract between the Co-op and the person entitled to indemnification pursuant to which the Co-op and each person intend to be legally bound. Any repeal, amendment or modification hereof shall be prospective only and shall not limit, but may expand any rights or obligations in respect of any proceeding, whether commenced prior or after such change, to the extent such proceeding pertains to actions or failures to act, prior to such change.
  7. The indemnification, as authorized by this section, shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, agreement, vote of disinterested Directors or otherwise. The indemnification and advancement of expense provided by, or granted pursuant to, this action shall continue as to a person who has ceased to be an officer or Director in respect of matters arising prior to such time, and shall inure to the benefit of the heirs, executors and administrators of such person.
9. Conflicts of Interest
  1. Directors shall be under an affirmative duty to disclose their actual or potential conflicts of interest in any matter under consideration by the Board, and such interest shall be made a matter of record in the minutes of the meeting. Directors having such an interest may not participate in the decision of the matter.
10. Newsletter
  1. A newsletter shall be published on a regular basis in accordance with the mission of the Co-op. The Board shall establish editorial and advertising policy, but may delegate publication responsibilities to the General Manager.
11. Website
  1. A website shall be developed and maintained in accordance with the mission of the Co-op. The Board shall establish editorial and advertising policy, but may delegate development and maintenance responsibilities to the General Manager.
Article IX - Disposition of Net Savings
1. Net Savings
  1. Net Savings is the total income of the Co-op minus its costs of operation for the fiscal year.
2. Patronage
  1. A member’s patronage is the total amount spent by the member for purchases of goods from the Co-op. The total patronage is the total of all the members’ patronage.
3. Patronage Rebate of Net Savings
  1. The net savings of the Co-op attributable to the patronage of its members for each fiscal year shall be allocated and distributed among members in proportion to their patronage and in such a manner as to constitute patronage rebates within the meaning of federal income tax law. Such net savings may be reduced by such reasonable reserves for necessary business purposes as may be determined by the Board of Directors. If the cash payment portion of a member’s patronage rebate would equal less than one (1) dollar, such cash payment shall be allocated to the member’s regular capital account.
  2. Exceptions. Net savings may be reduced by such reasonable reserves for necessary business purposes as is determined by the Board. Any allocations of such a nominal amount as not to justify the expenses of distribution may, as determined by the Board, be excluded from distribu-tion provided that they are not then or later distributed to other owners. Owners shall retain the right to waive in whole or in part, by action at a meeting of owners, any patronage refunds to which they may be entitled.
  3. Retentions. A portion of patronage refunds may be retained for the reasonable capital needs of the Co-op. Such retentions shall be credited to revolving capital accounts in the names of recipient owners, shall accrue no monetary return on investment, and shall not be transferable. They shall be redeemed when deter-mined by the Board to be no longer needed for capital pur-poses. At that time they shall be redeemed in the order of the oldest out-standing amounts and on a pro rata basis among such amounts. Retentions may also be redeemed under compelling circumstances as deter-mined by associates.
  4. Allocation of net loss. In the event the Co-op shall incur a net loss in any fiscal year, such loss may be charged against retained savings or other unallocated equity accounts. If the net loss exceeds such amounts, or in any event if the Board so determines, the amount of such loss may either be carried forward to offset adjusted net savings of subsequent fiscal years or allocated to owners in the same manner as for adjusted net savings except that such allocation shall not exceed the total of invested capital. Any such allocated net loss shall be charged first against retained patronage dividends of prior fiscal years and then against patronage dividend allocations of subsequent fiscal years. Allocated net losses which are not so offset may be charged against the carrying value of shares only upon termination of ownership. Allocated net losses shall not otherwise be assessed to or collected from owners.
4. Written Notice to Members
  1. An allocation of patronage rebates shall be evidenced by an e-mail notice within eight months and fifteen days after the end of the fiscal year stating:
    1. The amount of net savings assigned to that member’s reserve capital account as part of the patronage rebate;
    2. The amount of net savings assigned to that member’s regular capital account as part of the patronage rebate;
    3. The amount of net savings being paid to the member in cash as part of the patronage rebate;
    4. The total of a, b, and c designated “total patronage rebate”;
    5. The member’s total reserve capital account;
    6. The member’s total regular capital account;
    7. That the cash portion will be assigned to the member’s regular capital account if not redeemed within four months of the date of this notice.
5. Retained Allocation.
  1. The portion of patronage dividend not paid in cash at the time of issuance of written notice of allocation shall be credited to revolving capital accounts in the name of each recipient member. Allocations so retained shall be understood to have the same status as though they had been paid to members in cash in pursuance of a legal obligation to do so and members had then furnished corresponding amounts for capital of the cooperative. Such retained allocations may be held with or without interest as may be determined by the board of directors. They shall be subordinated to all indebtedness of the cooperative and shall be retired only at the discretion of the board of directors and only in the order of the oldest outstanding credits on a pro-rata basis but in no case later than the date of dissolution of the cooperative. Retained allocations shall be subject at all times to set off against other amounts, however arising, which may be due and payable to the cooperative. Notwithstanding any provision of these by-laws, the board of directors satisfaction of any outstanding credits to compromise or settle a dispute or to facilitate settling of an estimate in probate or bankruptcy or to secure a similar purpose.
6. Consent of members
  1. By obtaining or retaining membership in the Co-op, each member shall thereby consent to take into account, in the manner and to the extent required by Section 1385 of the Internal Revenue Code, the stated dollar amount of any qualified written notice of allocation in the taxable year in which such notice is received.
  2. The Co-op has been advised by legal counsel, however, that the general rule for inclusion in income of patronage dividends is subject to an exception that is applicable to consumer cooperatives. Under that exception, a patronage dividend is not required to be included in gross income if the owner's purchases from the Co-op related to "personal, living or family items." The patronage dividend would thus be taxable to an owner only if his or her purchases related to the operation of a trade or business or other income-producing activities.
Article X - Membership Capital