Cooperative Association is organized to provide high quality

THE BYLAWS OF
LA MONTANITA FOOD COOPERATIVE
(With changes voted for by the membership in July, 1999)

The Cooperative Association is organized to provide high quality, natural and organic products at the lowest prices possible, as well as education and information about cooperatives, to, and for the social and economic benefit of, the community at large and the membership in particular. The management of our Cooperative, under direction of the representative Board of Directors, shall try in every way to:

1. Provide food and other commodities at the lowest prices possible by forming the most direct link between producer and consumer.
2. Educate ourselves about and take responsibility for our environment.
3. Actively support individual participation and group cooperation.

ARTICLE I.
MEMBERSHIP

Section 1.1. ELIGIBILITY.
Any household shall be eligible for membership.

Section 1.2. APPLICATION FOR MEMBERSHIP.
In order to be admitted to membership, the household shall file with the Cooperative a completed membership certificate. Membership certificates shall be filed under the name of the "primary member" of the household, who shall be the owner of the certificate. The "primary member" of the household shall be responsible for paying the annual membership fees. The "primary member" of the household is also the only member of the household who will have the right to vote in elections for the Board of Directors, cast mail ballots, and vote at membership meetings. The annual rebate check (if any) will be issued in the name of the "primary member". Two additional members of a household may be listed on the certificate. The certificate shall contain the name, signature, and address of the owner (primary member); date of issue and date(s) of renewal. The application form shall include a statement that the applicant agrees that:

1. No dividends or interest shall be payable on the certificate.
2. Each member shall have the right to but one vote.
3. A membership is not transferable.
4. The applicant will comply with and be bound by the terms and conditions relating to membership contained in the Articles of Incorporation and these Bylaws.
5. Each applicant will acquire a membership in the Cooperative by paying annual membership fees of $12, payable in installments of $6 or $12, or by paying a lifetime membership fee of $200. The lifetime membership fee shall be refundable after a period of two years after payment of the fee. If the lifetime membership is refunded, the household's membership will no longer be considered current.

Section 1.3. MEMBERS.
The members shall consist of households who have filled out membership applications and whose membership fees are current.

Section 1.4.a.
The Board of Directors is authorized to approve appropriate discounts to members who provide administrative, executive including committee, professional, or independent contractor services to the Cooperative.

Section 1.4.b.
The Board of Directors shall set up benefits for members that reflect their valuable contribution to the Co-op.

Section 1.5.
The ultimate control of the Association shall be vested in the membership specifically to:

1. Support the Association economically by making capital contributions and patronizing its services.
2. Elect a representative Board of Directors to manage the affairs of the Cooperative, and remove them from office if they are derelict in their duties.
3. Develop, in concert with the Directors, long range goals and objectives for the Cooperative.
4. Delegate appropriate powers to the Board of Directors and its committees and managers in conjunction with overall guidelines for their performance.
5. Hear and act on reports of officers, managers, and committees of the Association.

 

ARTICLE II.
BOARD OF DIRECTORS

Section 2.1.
The affairs of the Cooperative shall be managed by its Board of Directors, composed of nine (9) members. Open board positions shall be filled by the candidates receiving the greatest number of votes cast in the annual membership ballot in the month of November. If one or more of the vacancies is to fill an unexpired term of less than three (3) years, the candidate receiving the greatest number of votes will fill the vacancy with the longest term. Members will have a two (2) week period of voting. Ballots and ballot boxes will be available at the principal offices of the Cooperative. The Board may institute a mail-in ballot procedure. Election results shall be reported at the next meeting and in the newsletter. Voting by proxy and cumulative voting shall not be permitted.

Section 2.2.
The term of each Director shall be three (3) years. The terms of three (3) of the nine (9) Board positions shall begin each year.

Section 2.3.
All candidates for Director shall be honest and caring people and shall have been members in good standing of the Cooperative for the four (4) months prior to Board elections. Candidates shall declare their candidacy by submitting a statement of qualifications to the Co-op's Information Desk at least four (4) weeks before the elections begin. A Director shall: be a member of the Association; find sufficient time to devote to duties as a Director; and be committed to cooperation as a viable economic relationship. Up to two (2) of the nine (9) Board positions may be filled by part-time or full-time staff members. In the event that the number of staff member candidates is greater than the number of staff positions open on the Board, the staff members receiving the greater number of votes shall fill the Board staff position. Neither the General Manager, nor any other person supervised by the Board of Directors, may run for the Board of Directors.

Section 2.4.
Notice of any meeting of the Board of Directors shall be given not less than three (3) days previous thereto by posting a written notice in the store. In addition, each director shall receive three (3) day's advance notice of any meeting of the Board of Directors, either in person, by telephone, or by mail at her or his address as shown on the Cooperative's records. In an emergency, a majority of the Directors may agree to waive the notice requirement, but decisions taken at such an emergency meeting must be ratified at the next regularly scheduled meeting.

Section 2.5.a.
Board members may be temporarily suspended for cause, which shall include but not be limited to failure to attend three (3) consecutive meetings of the Board of Directors, by a simple majority of Board members present and voting at a regularly scheduled meeting of the Board of Directors. Impeachment of a suspended Director will be voted upon at the next general membership meeting.

Section 2.5.b.
Board members may be impeached by a two-thirds (2/3) majority of members voting either in person at a scheduled membership meeting or by mail ballot after thirty (30) day's written notice has been given to the membership. The Board member shall have an opportunity to be heard at the meeting.

Section 2.6.
Six (6) Board members shall constitute a quorum.

Section 2.7.
If membership on the Board should fall below nine (9) members for any reason (e.g., resignation or disability of a Director), the Board may select as many members as may be required to have nine (9) Board members. Board members selected in this manner shall serve only until the next member meeting or election, at which time the membership shall elect Board members to fill the unexpired terms of any Board positions filled by the Board. Candidates considered for this selection shall meet the same requirements as candidates during regular elections.

Section 2.8.
Each of the official acts of the Board of Directors shall be by a majority vote of the Directors present, and shall be recorded with the yeas and nays of each Director or the unanimous approval of the Board in the Minute Book of the Cooperative.

Section 2.9.
The Directors are vested with the legal responsibility to carry out the provisions of state statutes, the Articles of Incorporation, and these Bylaws, specifically to:

1. Convene membership meetings.
2. Oversee implementation of decisions of the membership.
3. Oversee the management of the business, property, funds, operations, and affairs of the Association, and enter into legal contracts on behalf of the membership.
4. Hire and fire managers and establish committees, make policies for their guidance, and approve their job descriptions.
5. Oversee an active publicity and education program for the membership on cooperative principles.
6. Develop long range goals and objectives for the association, based on membership input.
7. Maintain records of the total number of members, number of members admitted or withdrawn during each year, and the amount of membership fees and/or capital contributions collected, and the rate of any interest dividends paid.
8. Prepare an annual budget and present it to the membership in the fall.
9. Have the books of the Association reviewed at the end of each fiscal year by a CPA selected by the Board.
10. Prepare a written financial report annually to a membership meeting, including a statement of the amount of business transacted with nonmembers and with members, a balance sheet, and income/expense statement.
11. Make an annual report to the State Corporation Commission within sixty (60) days of the end of the Association's fiscal year and keep a copy on file at the principal office of the Association.
12. Require adequate bonding, at the expense of the Association, for all officers and employees handling more than $1,000 in one year.
13. Delegate preceding duties when appropriate.

ARTICLE III.
OFFICERS

Section 3.1.
The officers of the Cooperative shall be a President, a Vice-President, a Secretary, a Treasurer, and such other officers as may be determined from time to time by the Board of Directors. The offices of Secretary and Treasurer may be filled by the same person. The Board of Directors shall elect the officers at a Board meeting immediately preceding the general election.

Section 3.2.
The officers, who must be Directors of the Cooperative, shall serve one-year terms or until their successors are elected.

Section 3.3.
A vacancy in any office for any reason will be filled by the Board of Directors for the unexpired portion of the term.

Section 3.4.a.
The President shall designate the chair and/or facilitator of meetings of the Board of Directors and general membership. In the President's absence, the Vice-President shall designate the chair and/or facilitator. The President shall sign, with the Secretary or any other person of the Cooperative authorized by the Board of Directors, any deeds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws or by the Statute to some other officer or agent of the Cooperative, and, in general, s/he shall perform all duties incident to the office of President.

Section 3.4.b.
The Vice-President shall: (1) in the absence or disability of the President, perform the duties of the President; (2) carry out any other duties that the Directors may require.

Section 3.4.c.
The Secretary shall: (1) keep a complete and accurate record of meetings and prepare such records for approval within twenty (20) days after the meeting or delegate this task to other competent persons; (2) act as a legal signer for the Association; (3) see that notices are duly given in accordance with the Statutes, Articles and Bylaws; and (4) carry out any other duties that the Directors may require.

Section 3.4.d.
The Treasurer shall: (1) receive and disburse of all funds of the Association; (2) keep a complete and accurate record of all financial transactions of the Association, and make adequate and timely financial reports to the Directors and the membership; (3) carry out any other duties that the Directors may require; and (4) delegate her/his duties to other competent persons.

ARTICLE IV.
COMMITTEES

Each Director may supervise one or more committees of the Cooperative. Committees shall report to the Board at least quarterly and to the general membership at least once a year.

ARTICLE V.
MEETINGS

Section 5.1.a. GENERAL MEETINGS.
There will be at least one general meeting of the member-owners each year to discuss major issues. The proposed agenda for each meeting shall be mailed to each member as notification at least two weeks in advance of the general meeting. The agenda shall also be posted in the store. A quorum of members from forty (40) households shall be required for conducting business and making decisions.

Section 5.1.b.
Members who know they cannot attend the meeting may request an absentee ballot prior to the meeting. The Secretary shall send to each of these members an exact copy of the proposal acted upon at the meeting. Those ballots that are returned within fifteen (15) days of being mailed, will count toward the vote.

Section 5.2. VOTING BY MAIL.
The Board can order a mail ballot without calling a meeting, and the results of the ballot will be valid. A ballot will be mailed to the address on record at the Co-op for each member.

Section 5.3. BOARD MEETINGS.
Board meetings will be held monthly and any member of the Cooperative may attend. Board meetings will be held to discuss business, policy, and proposed Bylaws. Decisions will be made by the Board of Directors upon recommendation of the staff and membership. The time and place for such meetings shall be posted in the store. Following each Board election a meeting shall be scheduled with mandatory attendance of all Directors to review and discuss together the provisions of State Statutes, the Articles of Incorporation and these Bylaws.

Section 5.4. SPECIAL MEETING OF THE MEMBERSHIP.
The President shall call a special meeting of the membership within thirty (30) days of receipt of written request to consider one or more specific agenda items signed by one-tenth (1/10th) of member households, or when called by a vote of the Board of Directors. If one or more of the agenda items is a change in the Bylaws, then the special meeting shall be called within forty-five (45) days of receipt of written request.

ARTICLE VI.
CONTRACTS, CHECKS, DEPOSITS, AND FUNDS

Section 6.1.
The Board of Directors may authorize an officer or officers, agent or agents of the Cooperative, in addition to the officers authorized by these Bylaws, to enter into any contract or execute and deliver any instruments in the name of, and on behalf of, the Cooperative, and such authority may be general or confined to specific instances.

Section 6.2.
All checks, drafts, or orders for the payment of money, notes or other evidence of indebtedness issued in the name of the Cooperative shall be signed by such an officer or officers, agent or agents of the Cooperative, and in such manner as shall from time to time be determined by resolution of the Board of Directors. In the absence of such determination by the Board of Directors, such instrument shall be signed by the Secretary and countersigned by the President of the Cooperative.

Section 6.3.
All funds of the Cooperative shall be deposited from time to time to the credit of the Cooperative in such banks or other depositories as the Board of Directors may select.

Section 6.4.
The Board of Directors may accept on behalf of the Cooperative any contribution, gift, bequest, or devise for the general purpose or for any special purpose of the Cooperative.

ARTICLE VII.
WAIVER OF NOTICE

Whenever any notice is required to be given under the provisions of any Statute, the Articles of Incorporation, or the Bylaws of the Cooperative, a waiver thereof in writing, signed by the person or persons entitled to such notice whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

ARTICLE VIII.
AMENDMENTS

These Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by a majority of the membership present at any general membership meeting at which a quorum is present. Thirty (30) days written notice shall be given of intention to alter, amend, repeal, or to adopt new Bylaws. Amendments shall be ratified by a majority of the members voting either in person at a scheduled membership meeting or by mail ballot.

ARTICLE IX.
CAPITALIZATION

Section 9.1. COOPERATIVE OPERATION.
The Cooperative shall be operated for the mutual benefit of its members, who shall patronize the Cooperative. The participation rights of the members shall be equal and no member shall have more than one vote. The property rights and interest of the members shall be unequal and shall be determined by their capital investments resulting from retained patronage refunds and the purchase of member investment certificates.

Section 9.2. CAPITAL.
The Cooperative may establish any or all of the following vehicles for capitalization:
1. Earnings retained from each year's operations.
2. Portions of the annual patronage refunds retained as Patronage Retains Certificates in members' equity accounts.
3. Sale of Member Investment Certificates. As equity, the above capital vehicles are subordinate to all debt of the cooperative. Annual membership fees are not considered as member investment or capital certificates, they are a requirement for membership.

Section 9.3. PATRONAGE REFUNDS AND PATRONAGE RETAINS CERTIFICATES.
Patronage refunds may be issued annually from the excess receipts of the Cooperative as follows:
1. Patronage refunds shall be allocated at the same uniform rate to all members in proportion to each member's total purchases from the Cooperative during the previous fiscal year. The rate shall be determined by the Board of Directors after the end of each fiscal year.
2. In the case of non-member patrons, their proportionate amount of the patronage refund shall be set aside in a general fund for such patrons and shall be allocated to individual non-member patrons only upon request and presentation of evidence of the amount of their purchases. Any such patronage refund shall be reduced by the annual membership fee, in effect admitting the non-member patron to membership retroactively for the previous year. All other provisions of this section then apply to such a patron the same as to any member. The Board of Directors shall specify a period of time in which non-member patrons may request a patronage refund, after which time the remainder of the general fund for such patrons shall go to an educational fund, as required by law.
3. At least twenty percent (20%) of each annual patronage refund shall be paid in cash and the balance shall be paid as Patronage Retains Certificates. Within the twenty percent (20%) limit, the Board of Directors shall determine the proportion of cash and certificates. The total equity represented by all outstanding Patronage Retains Certificates shall be considered the Members' Patronage Retains Fund.
4. The members of this Cooperative have agreed to take the amount of any patronage refund received into account in computing income in the taxable year that the refund is received, to the extent that this is required by law.

Section 9.4. MEMBER INVESTMENT CERTIFICATES. Member Investment Certificates may be issued by the Cooperative as follows:
1. Member Investment Certificates may be issued in a total amount not to exceed $1,500,000. There is no limit on capitalization acquired through retained earnings or retained patronage refunds. The total equity represented by all outstanding Member Investment Certificates shall be considered the Members' Investment Fund.
2. Up to 75,000 Member Investment Certificates, with par values of $20 per certificate, may be issued.
3. Only individuals who are listed as belonging to member households of the Cooperative are eligible to purchase Member Investment Certificates. Each Member Investment Certificate shall be issued in the name of an individual person, rather than being issued to a household.
4. No person may own more than one percent (1%) of the Member Investment Certificates authorized by this article, that is, no more than $15,000 total par value.
5. The Board of Directors shall make all decisions needed to implement this section.

Section 9.5. REVOLVING FUNDS. The Members Patronage Retains Fund and Members' Investment Fund shall both be considered revolving funds, which shall be administered as follows:
1. At the discretion of the Board of Directors, certificates in these funds may earn dividends not to exceed fifteen percent (15%) per year, and shall be non-cumulative. The annual dividend rate for each fund shall be independent of the other fund's rate.
2. The total of all dividends on certificates for any single fiscal year shall not exceed fifty percent (50%) of the Cooperative's excess receipts for that year.
3. Certificates may be redeemed in full or on a pro-rated basis by the Cooperative, as determined annually by the Board of Directors. Redemption of certificates rests in the sole discretion of the Board of Directors, who may redeem certificates when to do so is deemed prudent for the Cooperative.
4. Within each fund, certificates shall be redeemed in order of the time of the original investment, with the oldest certificates being redeemed first. Exceptions may be made to this rule, at the discretion of the Board of Directors, in the event that redemption of a particular certificate will allow the settling of a dispute or the settling of an estate, or in response to the request of a member withdrawing from membership of the cooperative.
5. The Board of Directors shall consider redemption of certificates at least once a year, including specific requests for redemption by members. Applicants for redemption shall be notified of any decisions.

ARTICLE X.
DISPOSITION OF RECEIPTS

Section 10.1. ASCERTAINMENT OF EXCESS RECEIPTS.
The receipts of the Cooperative during each year shall be first employed for the payment of all its operating expenses, including without limitation, employee compensation and benefits, taxes, maintenance, repairs, upkeep, replacement, insurance, interest and payment of any other obligations of the Cooperative as they become due. The balance shall be considered as the excess receipts of the Cooperative. Section

10.2. APPLICATION OF EXCESS RECEIPTS.
At the end of each fiscal year, the Cooperative shall set aside a portion of the excess receipts as retained earnings in amounts determined by the Board of Directors to be prudent for the continuing operations of the Cooperative. In addition, up to five percent (5%) of the total excess receipts may be set aside by the Board of Directors for educational purposes. Any remaining excess receipts shall be distributed to the members or patrons in the form of patronage refunds and/or dividends on certificates as specified above in Section IX Capitalization. Receipts shall not be used for any other purpose without the prior consent of the members.

ARTICLE XI.
MISCELLANEOUS

Section 11. FISCAL YEAR.
The fiscal year of the Cooperative shall begin on the first day of September and close on the last day of August.

Revision history:
T he Board initiated the changes in italics. They were slightly modified at the May, 1999 meeting. The changes all passed, results are on page 7 of the August, 1999 Co-op Connection.