These By-Laws were formally adopted on September 24th, 2014
BisMan Community Food Cooperative
BisMan Community Food Cooperative
A Cooperative organized under North Dakota Century Code, Chapter 10-15
Adopted: September 24th, 2014
Article I: Organization
1.1 Name. The name of the organization shall be BisMan Community Food Cooperative (henceforth “the Cooperative”).
1.2 Ownership and Purpose. The Cooperative shall be owned by its Members and shall operate for the mutual benefit of its Members. The purpose of the Cooperative shall be to engage, on a Cooperative basis, in the formation and operation of one or more retail grocery stores in order to market and supply its Members and patrons with such foods, goods, and services as the Members may require or in any lawful business the Members may authorize. The Cooperative will work to provide a model of responsible business practices based on cooperative principles, giving consideration to the needs of all Members and recognizing the rights of workers to participatory management. The Cooperative will strive to educate Members and the public on cooperative practices and structures, as well as in the judicious and efficient production, purchase, and use of consumer goods and services.
1.3 Operating Principles. The Cooperative will strive to provide its Members and nonpatron
customers with a source of food and related items that reflect a commitment to health, local products, sustainable agriculture, and environmental preservation. In so doing, the Cooperative will strive to operate in accordance with the following principles that constitute the values, goals, and guidelines of cooperative governance:
First Principle: Voluntary and Open Membership
Second Principle: Democratic Member Control
Third Principle: Member Economic Participation
Fourth Principle: Autonomy and Independence
Fifth Principle: Educate, Train, and Inform
Sixth Principle: Cooperation among Cooperatives
Seventh Principle: Concern for Sustainable Development of Communities
Article II: Membership
2.1 Eligibility. Membership in the Cooperative shall be open to any individual who is in accord with its purposes and is willing to accept the responsibilities of membership.
2.2 Nondiscrimination. Membership shall be open without regard to any characteristic that does not directly pertain to a person’s eligibility.
2.3 Admission. Any eligible person may be admitted to membership upon submitting an application and investing equity in an amount and on such terms as determined by the Board of Directors (henceforth “the Board”).
2.4 Rights. Members have the right to elect the Cooperative’s Board, to attend meetings of the Board, to receive notice of and attend membership meetings, to petition as described in these bylaws, and to approve amendments to these bylaws. Each Member shall have one vote and no more on all matters submitted to Members. The rights of Members shall be understood to apply only to active Members in good standing. All rights and responsibilities of members are subject to the Bylaws as they may be amended from time to time, and to policies and decisions of the Cooperative or the Board.
2.5 Responsibilities. Members shall keep current in equity investments due to the Cooperative, shall keep the Cooperative informed of any changes in name or current address, and shall abide by these Bylaws and the policies and decisions of the Cooperative or the Board. A Member who upholds these responsibilities is considered an active Member in good standing.
2.6 Categories of Membership. The Board is authorized to establish one or more categories of Members in the Cooperative, including but not limited to categories for individuals, households, students, or legal entities. The Board shall also establish the criteria and eligibility for each category, which may be made on any reasonable basis that complies with applicable law.
2.7 Membership Fees. The Board shall establish, and may from time to time amend, a schedule of Membership fees and other membership requirements. The Board is authorized to establish different Membership fees and requirements for the various categories of Members on any reasonable basis that complies with applicable law.
2.8 Restrictions on Withdrawal and Transfer of Membership. Upon withdrawal from Membership in the Cooperative, a membership may only be transferred to the Cooperative and only upon approval by the Board. Memberships in the Cooperative are not transferable under any other circumstances. The Board in its discretion may establish a policy of redeeming memberships.
2.9 Information. The Board shall provide a Member a copy of the Articles of Association and the Bylaws upon request of the Member.
2.10 Limited Liability of Members and Patrons. Members and patrons of this Cooperative shall not be obligated to pay, nor liable upon, any Cooperative obligation.
2.11 Termination. Membership in the Cooperative may be terminated in any of the following ways: 1) voluntarily by a Member upon notice to the Cooperative; 2) automatically if a Member should die or cease to exist; 3) failure to keep current on any Member investment payment plan; 4) failure to pay past due debts; 5) breach of contract with the Cooperative; 6) for cause, including but not limited to willful violation of the Bylaws or any policies of the Cooperative. Members terminated for cause will receive written notice of the proposed termination, including the reason for termination, according to Board policy. Upon termination, a Member will no longer be entitled to the rights, privileges, and benefits of membership in the Cooperative, including voting rights.
2.12 Discounts and Incentives. The Board may establish reward or incentive programs for Members as it determines are appropriate.
2.13 Common Stock. In lieu of establishing membership fees, the Board may elect to issue Common Stock. The holders of Common Stock shall be the Members of this Cooperative with the power to vote in its affairs; only the holders of Common Stock of this Cooperative shall have such voting power, and each holder of Common Stock shall be restricted to only one vote, regardless of the number of shares of Common Stock held by any one person. Each holder of Common Stock shall be referred to as a “Member” and shall be subject to all the conditions, rights and liabilities of membership as provided by the Articles, these Bylaws, and applicable law. If the Board elects to issue Common Stock, Members shall join the Cooperative by purchasing a share of Common Stock and qualifying under, and complying with, these Bylaws and any other requirements imposed by the Board. Common stock shall pay no dividends, may not be transferred, and may be redeemed only as set forth herein.
Article III: Member Meetings
3.1 Annual Meeting. A membership meeting shall be held each year at a time and place to be determined by the Board. The purpose of such meetings shall be to hear reports on operations and finances, to review issues that vitally affect the Cooperative, and to transact such other business as may properly come before the meeting.
3.2 Special Meetings. Special meetings of the membership may be called by the Board, either by decision of the Board or in response to a written petition of 5% of the active Members. Notice of special meetings shall be issued to Members. In the case of a petition, notice of the special meeting will be issued within ten (10) days after a presentation of the petition to the Board. No business shall be conducted at that special meeting except that specified in the notice of meeting. Decisions made at any special meeting are advisory only.
3.3 Notice of meetings. Notice of the date, time, place and purpose of each meeting of the membership shall be posted in a conspicuous place at the Cooperative and communicated to Members not less than four (4) weeks prior to the date of the meeting.
3.4 Voting. No person other than a Member may vote at any meeting. Each Member will have one vote upon any matter submitted to a vote. Voting by mail shall be allowed in cases in which, in the notice of the meeting, the board of directors submitted a specific issue or issues for a mail vote. Election of directors, except to fill a vacancy, will always be conducted via ballots, which shall be allowed by mail. Members will also have the opportunity to bring ballots to the annual meeting or designated place for counting at the annual meeting within the time line authorized by the Board. Members may also vote on any matter by electronic means if authorized by the board of directors. There will be no voting by proxy. Members on a Member investment payment plan will be allowed to vote, as long as they are current in their payments.
3.5 Quorum. At any meeting of the Members, or for any vote of the Members, a quorum necessary for decision-making shall be 5% of the total number of Members or 200 Members, whichever is lesser. If less than a quorum is present at any meeting, a majority of those present may adjourn the meeting to a time and place they may determine. If a meeting is adjourned to another time and/or place, due notice shall be given to the membership. In the event that a quorum of persons present in person is not reached at a Member meeting, any specific issue up for vote (including the election of directors) for which voting by mail is allowed under this Bylaw may be voted on at such a Member meeting if a quorum as provided in this Section exists when the ballots submitted by mail are counted along with Members present in person.
Article IV: Board of Directors
4.1 Number of Directors. The Board of Directors shall consist of no less than five (5) and no more than nine (9) directors. The number of authorized directors shall be determined at each annual Members’ meeting in accordance with the provisions contained in these Bylaws. Directors will be elected according to the voting procedures contained in these Bylaws. The number of directors may not be reduced unless a vacancy exists and such a reduction complies with this Section.
4.2 Powers and Duties. Except for matters for which Member voting is required, the Board shall have full power to govern the Cooperative, including, but not limited to, hiring management and evaluating its performance, establishing compensation, if any, for the Board, and assuring that the mission of the Cooperative is carried out.
4.3 Qualifications. The qualifications for the office of director will be:
(1) the individual must be a Member in good standing of the Cooperative;
(2) only one individual per household or corporate membership will be eligible to serve on the Board at any given time;
(3) the individual must not have interests, financial or otherwise, adverse to the Cooperative;
(4) No Director may be a paid employee of the Cooperative.
4.4 Terms and Elections. Elections shall occur annually, in a manner prescribed by the Board. Directors shall serve a term of three (3) years and shall serve staggered terms so that approximately one-third (1/3) of the Board is elected each year. No Director may serve more than three (3) consecutive terms. A director is expected to take office at the organizing meeting of the Board of Directors following the annual meeting at which they were elected, and will remain seated until a successor takes office. New Directors will be expected to attend board meetings and participate in an orientation program during the period between their election and assumption of office. If any director ceases to be a Member, his or her office will be automatically vacated.
4.5 Vacancies. Any vacancy among Directors elected by the Members may be filled by appointment by the Board. A Director so appointed shall complete the pertinent term.
4.6 Removal. A Director may be removed by decision of 2/3 of the remaining Directors for conduct contrary to the Cooperative or failure to follow Board policies.
4.7 Meetings. The Board shall hold regular and special meetings at such time and place as it shall determine, and all Directors shall be notified in writing of said meeting at least ten (10) days in advance. The time and place of all meetings shall be posted in a conspicuous place at the principal offices of the Cooperative not more than one day after calling of the meeting. Meetings shall be open to all Members unless the Board decides to go into executive session regarding confidential or proprietary matters such as: labor relations or personnel issues; negotiation of a contract; discussion of strategic goals or business plans, the disclosure of which would adversely impact the Cooperative’s position in the marketplace; and/or discussion of a matter that may, by law or contract, be considered confidential.
4.8 Action without a Meeting. Any action required or permitted to be taken at a meeting of the Board may be taken by written action affirmed by all of the Directors. The action is effective when affirmed by all of the Directors, unless a different effective time is provided in the action.
4.9 Quorum. A majority of the current Directors shall constitute a quorum and no decisions will be made without a quorum.
4.10 Conflicts of Interest. Directors shall be under an obligation to disclose their actual or potential conflicts of interest in any matter under consideration by the board. Directors having such a conflict shall absent themselves from discussion and decision of the matter unless otherwise determined by the Board. No employee of the Cooperative may serve on the Board.
4.11 Compensation. At the discretion of the Board, Directors may be entitled to reimbursement for actual expenses incurred in attending board meetings or other business of the association. Expense claims will be approved by the Board. Compensation and/or reimbursement to directors will not constitute payments to them as employees.
4.12 Removal of Directors. Directors may be removed as follows:
A. By Members. Any director may, for cause, be removed from office by a majority vote at any annual or special meeting of the Members. No director shall be removed from office by the Members unless he or she has been given ten days’ notice of the meeting at which the matter is to be considered. Notice shall be given via certified mail and he or she shall be entitled to be heard at the meeting. In case of removal by action of the Members, the Members shall fill the vacancy for the unexpired term by special election.
B. By Board. At any regular or special meeting, any director may, for cause, be removed from office by a vote of three-fourths of the remaining directors. No director shall be removed from office by the Board unless he or she has been given ten days’ notice of the meeting at which the matter is to be considered. Notice shall be given via certified mail and he or she shall be entitled to be heard at the meeting. In case of removal by action of the board, the board shall fill the vacancy for the unexpired term until the next Member meeting.
4.13 Members Attendance at Meetings. Members may attend any regular meeting of the board of directors as observers, with the exception of the executive session. Members who wish to address the board will be provided a scheduled session on the agenda. Written notice of the presentation should be provided by the Member to the board secretary at least 10 days prior to the meeting.
4.14 Indemnification. The Cooperative shall indemnify and reimburse each present, past and future Director for any claim or liability (including expenses and attorneys fees actually and reasonably incurred in connection therewith) to which such person may become subject by reason of being a Director. Such indemnification shall be made only if it is determined by the Board that the Director acted in good faith in the reasonable belief that his or her action was in the best interests of the Cooperative, or as otherwise allowed by law.
Article V: Officers and Management
5.1 Officers. The officers of the Board of Directors shall be a President, one or more Vice-Presidents, a Secretary, and a Treasurer. The offices of secretary and treasurer may be combined in one person. The board of directors may appoint more offices as needed.
5.2 Election of Officers. Officers will be elected annually by and from the board of directors at the first meeting following the annual Membership meeting. If any vacancy occurs among the officers, it shall be filled by the board of directors at its next regular or special meeting following the vacancy.
5.3 President. The President shall preside at all meetings of the Members and of the Board. For each meeting, the president will prepare the agenda and provide notice of the meeting to the board and Membership. The President, along with the Secretary, will be responsible for signing documents, contracts, and other documents for the Cooperative.
5.4 Vice-President. In the absence or disability of the President, the Vice-President will perform the duties of the President as well as any duties assigned by the President of board of directors. If there are more than one Vice-Presidents, then they shall preside, in the absence of the President, in the order of seniority.
5.5 Secretary. The Secretary will be responsible for keeping a complete record of every meeting of the Members and of the Board. The Secretary shall sign, along with the President, all documents, contracts, and other documents for the Cooperative. The Secretary will prepare and submit the annual report to the annual meeting of Members. The annual report will contain a statement of assets and liabilities, a statement of income and expenses, and other statements and information the Board requires. The Secretary will perform other duties required by the board of directors. The Board may authorize the Secretary to delegate duties to any other officer or employee of the Cooperative.
5.6 Treasurer. The Treasurer will oversee receipt and disbursement of all funds of the Cooperative, ensure that complete records of all financial transactions of the association are kept, and perform other duties required by the Board. The Board may authorize the Treasurer to delegate duties to any other officer or employee of the Cooperative.
5.7 General Manager. When required for the operation of the Cooperative’s business, the Board will employ and supervise a general manager. The general manager will have general charge of the ordinary and usual business operations of the Cooperative, subject to the policies and approval of the board. The general manager will properly maintain all business records and accounts, and will provide annual and periodic reports in a form and manner prescribed by the board. The general manager will employ and discharge employees subject to established policy. The general manager will handle and account for all monies belonging to the Cooperative which come into his or her possession in the manner and form prescribed by board policy.
Article VI: Patronage Dividends
6.1 Allocations to Members. The Cooperative shall allocate and distribute to Members the net profit from business done with them in such a manner as to qualify them as patronage dividends consistent with cooperative principles, applicable state and federal laws and generally accepted accounting principles. The Board shall determine when and how such allocations and distributions will be made.
6.2 Consent of Members. By obtaining or retaining membership in the Cooperative, each Member consents to take into account, in the manner and to the extent required by federal and state tax law, any patronage dividend received from the Cooperative.
Article VII: Dissolution
7.1 Dissolution of the Cooperative. The Cooperative may be dissolved at a Member meeting if proper notice of a resolution for dissolution has been given. The resolution must be adopted by three-fourths of the votes cast on thereon.
7.2 Liquidation. If the resolution is adopted, either a committee designated by the resolution or the board shall liquidate all assets and pay the net proceeds of such liquidation available for distribution to all persons entitled to the same by law, the Articles, and the Bylaws.
7.3 Distribution Upon dissolution, the assets of the Cooperative shall be distributed in the following order:
(a) To pay the costs of dissolution;
(b) To pay any liabilities, including member loans;
(c) To redeem the paid in capital attributable to all preferred stock issued and outstanding;
(d) To redeem the paid in capital attributable to common stock or membership fees;
(e) To redeem any allocated patronage credits of members; and
(f) Any remaining assets shall be distributed among the active Members in good standing on the basis of such Members’ patronage over the ten (10) years preceding dissolution.
Article VIII: Miscellaneous
8.1 Amendments. These Bylaws may be amended or repealed in whole or in part by a majority of the Members who participate in the vote. An amendment may be proposed by decision of the Board or by petition of at least five percent (5%) of active Members. The proposed amendment shall be publicized to the membership not less than four (4) weeks prior to the voting process, which shall be held at a time and in a manner determined by the Board.
8.2 Notices. Whenever notice is required by this chapter to be given to any person, such notice shall be given either personally, by mail, or by electronic mail. If mailed, such notice is given when deposited in the United States mail, with postage prepaid thereon, addressed to such person at the person's address as it appears on the records of the Cooperative. A signed waiver is equivalent to personal notice to the person so signing.
8.3 Severability. To assure the carrying out of the purposes hereof, each and every one of the provisions of these Bylaws are to be regarded and construed as independent of every other provision. In the event that the final determination of a Court of competent jurisdiction shall adjudge that any of the terms, conditions or provisions of these Bylaws or the Articles are invalid, such adjudication shall in no wise affect the validity of the remaining provisions.
8.4 Governing Law. These Bylaws and the internal governance of the Cooperative shall be controlled by the laws of the State of North Dakota.