Bluenose Gopher Brewery Cooperative Bylaws

Version 3.1.0 – Ratified 12/08/2016

 

Definitions

Cooperative association

Patronage Distributions

Values

Name

Purpose

Amendment of bylaws by board

Bylaw changing quorum or voting requirement for members

Nonpatron membership interest

1                 Membership

1.1                 Qualifications

1.2                 Inclusive

1.3                 Initiation

1.4                 Class of Membership, Par Value, Offered Rate

1.4.1                 Members

1.4.2                 Voting Rights

1.5                 Inactivation

1.5.1                 Address Inactivation

1.5.2                 Reactivation

1.6                 Termination

1.6.1                 Withdrawal

1.6.2                 Expulsion

1.7                 Members’ Right to Net Income

1.7.1                Distribution of Net Income

1.7.2                Reserves

1.7.3                Distributions

1.7.4                Form of Distribution

1.8                 Transferability

2              Meetings of Members

2.1                Regular Members’ Meetings

2.1.1                 Annual Meeting

2.1.2                 Powers & Duties

2.1.3                Location

2.1.4                Business and Fiscal Reports

2.1.5                Election of Directors

2.1.6                Notice

2.1.7                Waiver and objections.

2.2                Special Members’ Meetings

2.2.1                Calling meeting

2.2.2                Notice of Special Members’ Meeting

2.2.3                Waiver and objections

2.3                Certification of Meeting Notice

2.3.1                Certificate of mailing

2.3.2                Matter of record

2.3.3                Quorum

2.3.4                Quorum for voting by mail

2.3.5                Meeting action invalid without quorum

2.3.6                Notice

2.3.7                Certificate of Mailing

2.3.8                Matter of Record

2.3.9                Meeting Action Invalid without Quorum

3                 Board of Directors

3.1                 Definition

3.2                Eligibility

3.3                 Powers & Duties

3.4                 Nominations

3.5                 Terms

3.6                 Election & Removal

3.6.1                 Election

3.6.2                 Removal

3.6.3                 Vacancies

4                 Meetings of the Board of Directors

4.1                Time and Place

4.2                Electronic Communications

4.3                Calling meetings and notice

4.4                Previously Scheduled Meetings

4.5                Waiver of Notice

4.6                Absent Directors

4.7                      Quorum

4.8                Conflicts of Interest

5                Action of the Board of Directors Without a Meeting

5.1                Method

5.2                Effective Time

5.3                Notice and Liability

5.4                Audit Committee

5.5               Compensation

6                Committees

6.1                Generally

6.2                Membership

6.3                Procedure

6.4                Minutes

6.5                Standard of conduct

6.6.                Standard and liability

6.7                Reliance

6.8                Presumption of assent and dissent

6.9                Considerations

6.10                Director Conflicts of Interest

6.10.1                Conflict and procedure when conflict arises

6.10.2                Material financial interest

6.11                Limitation of Directors’ Liability

7                 Officers

7.1                Election of Officers

7.1.1                Chair

7.1.2                Vice-Chair

7.1.3                Records Officer

7.1.4                Financial Officer

7.1.5                Chief Executive Officer

7.2                Authority to Bind

7.3                Additional Officers

7.4                Officers that must be members

7.5                Chief Executive Officer

8                Fiscal  Matters

8.1                Fiscal Year

8.2                Borrowing

8.3                Financial Statements

8.4                Compensation & Reimbursement

9              Miscellaneous

9.1                 Indemnification

9.2                 Severability

9.3                 Adoption & Amendment

9.4                 Renewal and Review of Bylaws at Annual Meeting of Members

Preface

 

Definitions

Cooperative association

Cooperative association is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

Patronage Distributions

The term “patronage distribution” means an amount paid to a patron under the terms specified in 26 U.S.C. § 1388, therein entitled “patron dividends”. The terms “patron dividends”, “patron refunds”, “patronage distributions” and “distributions to patron members” are understood to be interchangeable and conform to both the definition of “patron dividend” found in 26 U.S.C. § 1388 and the usage of the term “patronage distributions” of Minnesota Statute 308B.725 Subd. 3.

 

Values

Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility, ecological responsibility, and caring for others.

 

Name

The name of the cooperative association is: Bluenose Gopher Brewery.

 

Purpose

The Bluenose Gopher Brewery is formed on a cooperative basis for the benefit of its members. It may own, lease, mortgage, sell, buy, manufacture, produce, distribute, and  operate, and any lawful purposes permitted by Minnesota Statutes, Chapter 308B.

Amendment of bylaws by board

The board may amend the bylaws at any time to add, change, or delete a provision. Any amendment of the bylaws by the board must be distributed to the members no later than ten days after adoption. Notice of the annual meeting of the members must contain a notice and summary or the actual amendments to the bylaws adopted by the board.

Bylaw changing quorum or voting requirement for members

An amendment to the bylaws to add, change, or delete a greater quorum or voting requirement for members shall meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

Nonpatron membership interest

Nonpatron membership interest means a membership interest that does not require the holder to conduct patronage business for or with the cooperative to receive financial rights or distributions.

1                 Membership

 

1.1                 Qualifications

Membership in the Coop is open to all natural persons at least 21 years of age. All applicant members must provide valid physical or electronic mailing addresses, and agree to abide by these bylaws and other rules and policies adopted by the Board of Directors (“the Board”).

 

1.2                 Inclusive

Race, sexual orientation, gender, religion, political affiliation, age, or ethnicity may not be used as grounds for disqualification of membership.

 

1.3                 Initiation

Membership shall commence upon the filing of a completed application form and receipt of the purchase of at least one membership interest.

 

1.4                 Class of Membership, Par Value, Offered Rate

There shall be two classes of membership, entitled patron membership and nonpatron membership. An unlimited number of patron memberships may be authorized and issued. The par value for each patron membership shall be one dollar ($1.00). Each patron membership interest shall be offered to the public for one hundred fifty dollars and twenty-one cents ($150.21). Series 1 of the nonpatron membership interests shall consist of 500 membership interests. The par value of each nonpatron membership interest shall be one dollar ($1.00). Each nonpatron membership interest shall be offered to the public for five-hundred dollars each ($500). An amendment to the bylaws is required before additional classes of membership or any additional Series of an existing class of membership may be authorized and issued.

1.4.1                 Members

Patron members shall be those who have purchased at least one membership unit and have satisfied the initiation provisions of section 1.3.  

Nonpatron members shall be those who have made application to the Board of Directors to purchase nonpatron membership Interests, have been authorized by the Board of Directors to purchase nonpatron membership through a majority vote of the Board of Directors, and who have signed and completed the requirements stipulated in the Contribution Agreement.

1.4.2                 Voting Rights                                

Patron members shall have one vote per member to elect representatives to the Board of Directors of the Cooperative Association. Each patron member has one vote regardless of how many patron membership interests he or she owns and regardless of how much capital or other contributions the patron member has contributed to the Cooperative Association.

Nonpatron members shall have one vote per member to elect representatives to the Board of Directors of the Cooperative Association. Each nonpatron member has one vote per person regardless of how many nonpatron membership interests he or she owns and regardless of how much capital or other contributions the patron member has contributed to the Cooperative Association.

 

1.5                 Inactivation

A member may have their membership inactivated under certain circumstances listed in 1.5.1 through 1.5.2 or through a majority vote of the board. Inactive members are not entitled to any benefits of membership.

 

1.5.1                 Address Inactivation

All members without valid mailing addresses (physical and electronic), and having no other activity with the Coop for a period of 2 years from the date of address invalidity, shall be considered inactive.

 

1.5.2                 Reactivation

Inactive members may have their membership reactivated upon filing a valid address. If a member’s capital has been retained by the Coop, it will be returned to their account upon reactivation.

 

1.6                 Termination

Either party may terminate membership through the procedures given below in sections 1.6.1 and 1.6.2.

 

1.6.1                 Withdrawal

Members may withdraw their membership at any time. Resigning members shall provide a written resignation and an address to which the Coop may send confirmation of their resignation. The membership interest of a resigning member shall be considered a donation to the Coop upon termination of their membership. Upon death, the membership interest of a member is terminated and the membership interests shall be considered a donation to the Coop.

 

1.6.2                 Expulsion

A member may be expelled and have their membership interest terminated for causes including, but not limited to: (a) intentionally or repeatedly violating any provision of the Coop’s Articles of Organization, bylaws, or board policies; (b) breaching any contract with the Coop; or (c) willfully obstructing any lawful purpose or activity of the Coop. Expulsion requires a majority vote of the Board of Directors. Members who are to be expelled shall be given notice of the proposed expulsion and an opportunity to address a meeting of the Board of Directors.

1.7                 Members’ Right to Net Income        

The Board of Directors shall establish a means by which certain proceeds of the Cooperative are returned to each member. Two classes of distribution rights are authorized. In any year where the Board of Directors authorizes distributions, 75% of distributions shall be distributed to nonpatron members and 25% of distributions shall be distributed to patron members. The Cooperative is not obligated to provide any such distributions in any particular year.

1.7.1                Distribution of Net Income

The Cooperative may set aside a portion of net income as the board determines advisable to create or maintain a capital reserve.

1.7.2                Reserves

In addition to a capital reserve, the board may, for patron membership interests: (1) set aside an amount not to exceed five percent of the annual net income of the cooperative for promoting and encouraging cooperative organization; and (2) establish and accumulate reserves for new buildings, machinery and equipment, depreciation, losses, and other proper purposes.

1.7.3                Distributions

Patronage distributions: Net income allocated to patron members in addition to reserves shall be distributed to patron members on the basis of that member’s patronage.

Nonpatron distributions: Net income allocated to nonpatron members in addition to reserves shall be distributed to nonpatron members on the basis of the nonpatron member’s proportion of the total issued and outstanding nonpatron membership interests.

1.7.4                Form of Distribution

The Board of Directors shall determine the form of  distribution. The Board of Directors may distribute net income to patron members in cash, capital credits, allocated patronage equities, revolving fund certificates, or its own or other securities.

 

1.8                 Transferability

Patron Membership interests shall be non-transferable. Nonpatron membership interests shall be transferable as permitted by applicable state and federal law.

 

2                      Meetings of Members

2.1                Regular Members’ Meetings

2.1.1                 Annual Meeting

Regular members' meetings shall be held annually at a date and time determined by the Board of Directors.

2.1.2                 Powers & Duties

The Members’ Meetings are the voice of the membership and holds the following powers, as well as any other powers granted to the membership: (a) election and removal of Directors; (b) passage of advisory resolutions for consideration by the Board.

2.1.3                Location

The regular members' meeting shall be held at the principal place of business of the cooperative or at another conveniently located place as determined by the board.

2.1.4                Business and Fiscal Reports

The officers shall submit reports to the members at the regular members' meeting covering the business of the cooperative for the previous fiscal year that show the condition of the cooperative at the close of the fiscal year.

2.1.5                Election of Directors

All Directors shall be elected at the regular members' meeting for the terms of office prescribed in the bylaws.

2.1.6                Notice

(a) The cooperative shall give notice of regular members' meetings by mailing the regular members' meeting notice to each member at the members' last known post office address or by other notification approved by the board and agreed to by the members. The regular members' meeting notice shall be published or otherwise given by approved method at least two weeks before the date of the meeting or mailed at least 15 days before the date of the meeting. (b) The notice shall contain a summary of any bylaw amendments adopted by the board since the last annual meeting.

2.1.7                Waiver and objections.

A member may waive notice of a meeting of members. A waiver of notice by a member entitled to notice is effective whether given before, at, or after the meeting, and whether given in writing, orally, or by attendance. Attendance by a member at a meeting is a waiver of notice of that meeting, except where the member objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened, or objects before a vote on an item of business because the item may not lawfully be considered at that meeting and does not participate in the consideration of the item at that meeting.

2.2                Special Members’ Meetings

2.2.1                Calling meeting

Special members' meetings of the members may be called by: (1) a majority vote of the board; or (2) the written petition of at least 20 percent of the patron members and, if authorized, 20 percent of the nonpatron members, 20 percent of all members, or members representing 20 percent of the membership interests collectively are submitted to the chair.

2.2.2                Notice of Special Members’ Meeting

The cooperative shall give notice of a special members' meeting by mailing the special members' meeting notice to each member personally at the person's last known post office address or an alternative method approved by the board and the member individually or the members generally. For a member that is an entity, notice mailed or delivered by an alternative method shall be to an officer of the entity. The special members' meeting notice shall state the time, place, and purpose of the special members' meeting. The special members' meeting notice shall be issued within ten days from and after the date of the presentation of a members' petition, and the special members' meeting shall be held within 30 days after the date of the presentation of the members' petition.

2.2.3                Waiver and objections

A member may waive notice of a meeting of members. A waiver of notice by a member entitled to notice is effective whether given before, at, or after the meeting, and whether given in writing, orally, or by attendance. Attendance by a member at a meeting is a waiver of notice of that meeting, except where the member objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened, or objects before a vote on an item of business because the item may not lawfully be considered at that meeting and does not participate in the consideration of the item at that meeting.

2.3                Certification of Meeting Notice

2.3.1                Certificate of mailing

After mailing special or regular members' meeting notices or otherwise delivering the notices, the cooperative shall execute a certificate containing the date of mailing or delivery of the notice and a statement that the special or regular members' meeting notices were mailed or delivered as prescribed by law.

2.3.2                Matter of record

The certificate shall be made a part of the record of the meeting. Failure to receive meeting notice. Failure of a member to receive a special or regular members' meeting notice does not invalidate an action taken by the members at a members' meeting.

2.3.3                Quorum

The quorum for a members' meeting to transact business shall be: (1) ten percent of the total number of members for a cooperative with 500 or fewer members; or (2) 50 members for cooperatives with more than 500 members.  

2.3.4                Quorum for voting by mail

In determining a quorum at a meeting, on a question submitted to a vote by mail or an alternative method, members present in person or represented by mail vote or the alternative voting method shall be counted. The attendance of a sufficient number of members to constitute a quorum shall be established by a registration of the members of the cooperative present at the meeting. The registration shall be verified by the chair or the records officer of the cooperative and shall be reported in the minutes of the meeting.

2.3.5                Meeting action invalid without quorum

An action by a cooperative is not valid or legal in the absence of a quorum at the meeting at which the action was taken.

2.3.6                Notice

Notice shall be given by the Records Officer of all members meetings by any or all of the following: 1) written letter to the registered address of each member; 2) electronic communication via e-mail or comparable technology to each member;  3) publication in any regular periodical produced by the Cooperative for benefit of and distribution to the membership as a whole; 4) published on the website or on social media platforms of the Cooperative. The failure of any member to receive notice shall not invalidate any action that may be taken by the members at a meeting.

2.3.7                Certificate of Mailing 

After mailing special or regular members' meeting notices or otherwise delivering the notices, the cooperative shall execute a certificate containing the date of mailing or delivery of the notice and a statement that the special or regular members' meeting notices were mailed or delivered as prescribed by law.

2.3.8                Matter of Record 

The certificate shall be made a part of the record of the meeting. Failure to receive meeting notice. Failure of a member to receive a special or regular members' meeting notice does not invalidate an action taken by the members at a members' meeting.

2.3.9                Meeting Action Invalid without Quorum

An action by a cooperative is not valid or legal in the absence of a quorum at the meeting at which the action was taken.

 

3                         Board of Directors

 

3.1                 Definition

The governance and management of Bluenose Gopher Brewery is directed by its Board of seven Directors. Elections shall be as described in 3.5.

3.2                Eligibility

All members are eligible to run for the Board of Directors. Neither gender shall hold less than 25% of the seats on the Board of Directors.

 

3.3                 Powers & Duties

The Board is responsible for setting policy, issuing membership interests, leading Members’ Meetings, and ensuring that all actions taken by the Coop are both lawful and consistent with these bylaws. A director individually or collectively with other Directors does not have authority to act for or on behalf of the cooperative unless authorized by the board. A director may advocate interests of members or member groups to the board, but the fiduciary duty of each director is to represent the best interests of the cooperative and all members collectively.

 

3.4                 Nominations

The Board shall establish a Membership Linkage Committee responsible for finding and cultivating competent candidates to fill open positions on the board. All candidates for Board positions must fill out an application, disclose all possible conflicts of interest they may hold, and comply with any other requirements of the Membership Linkage Committee for inclusion among the Board candidates.

 

3.5                 Terms

Directors shall serve two-year terms, and elections shall be held on a staggered basis such that either three or four seats are up for election annually. Directors may serve on the Board for no more than four consecutive two-year terms or eight consecutive years, and thereafter must wait at least two years before standing again for election.

 

3.6                 Election & Removal

 

3.6.1                 Election

Board elections shall be held by a referendum of the members. An election vote shall be open for 30 days, even if the required number of ballots for a successful normal referendum has already been cast.

 

3.6.2                 Removal

A Director may be removed with or without cause. Removal requires a vote of two-thirds vote of the Board, or a majority vote of a Meeting of the Members.

 

3.6.3                 Vacancies

Should a vacancy arise, the Board shall choose an individual to fill that position on a temporary basis until the next election cycle.

 

4                 Meetings of the Board of Directors

4.1                Time and Place

Meetings of the board may be held from time to time as provided in the articles or bylaws at any place. If the board fails to select a place for a meeting, the meeting must be held at the principal executive office, unless the articles or bylaws provide otherwise.

4.2                Electronic Communications

(a) A conference among Directors by any means of communication through which the Directors may simultaneously hear each other during the conference constitutes a board meeting, if the same notice is given of the conference as would be required by otherwise for a meeting, and if the number of Directors participating in the conference would be sufficient to constitute a quorum at a meeting. Participation in a meeting by that means constitutes presence in person at the meeting.

(b) A director may participate in a board meeting not described in paragraph (a) by any means of communication through which the director, other Directors so participating, and all Directors physically present at the meeting may simultaneously hear each other during the meeting. Participation in a meeting by that means constitutes presence in person at the meeting.

4.3                Calling meetings and notice

A Director may call a board meeting by giving at least ten days' notice or, in the case of organizational meetings, at least three days' notice to all Directors of the date, time, and place of the meeting. The notice need not state the purpose of the meeting unless this chapter, the articles, or the bylaws require it.

4.4                Previously Scheduled Meetings

If the day or date, time, and place of a board meeting have been provided in the articles or bylaws, or announced at a previous meeting of the board, no notice is required. Notice of an adjourned meeting need not be given other than by announcement at the meeting at which adjournment is taken.

4.5                Waiver of Notice

A director may waive notice of a meeting of the board. A waiver of notice by a director entitled to notice is effective whether given before, at, or after the meeting, and whether given in writing, orally, or by attendance. Attendance by a director at a meeting is a waiver of notice of that meeting, except where the director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate in the meeting after the objection.

4.6                Absent Directors

If the articles or bylaws so provide, a director may give advance written consent or opposition to a proposal to be acted on at a board meeting. If the director is not present at the meeting, consent or opposition to a proposal does not constitute presence for purposes of determining the existence of a quorum, but consent or opposition must be counted as the vote of a director present at the meeting in favor of or against the proposal and must be entered in the minutes or other record of action at the meeting, if the proposal acted on at the meeting is substantially the same or has substantially the same effect as the proposal to which the director has consented or objected.

 

4.7                      Quorum

A majority, or a larger or smaller portion or number provided in the articles or bylaws, of the Directors currently holding office is a quorum for the transaction of business. In the absence of a quorum, a majority of the Directors present may adjourn a meeting from time to time until a quorum is present. If a quorum is present when a duly called or held meeting is convened, the Directors present may continue to transact business until adjournment, even though the withdrawal of a number of Directors originally present leaves less than the proportion of number otherwise required for a quorum.

 

4.8                Conflicts of Interest

If a quorum of Directors, of the seats currently held, exists but a quorum on an issue can not be established among non-interested Directors then any number of non- interested Directors totaling two or more shall be considered a quorum for the purpose of transacting the business at hand. Directors abstaining for reasons other than being interested in the current issue shall be included in quorum.

 

5                Action of the Board of Directors Without a Meeting

5.1                Method

An action required or permitted to be taken at a board meeting may be taken by written action signed by all of the Directors. If the articles or bylaws so provide, any action, other than an action requiring member approval, may be taken by written action signed by the number of Directors that would be required to take the same action at a meeting of the board at which all Directors were present.

5.2                Effective Time

 The written action is effective when signed by the required number of Directors, unless a different effective time is provided in the written action.

5.3                Notice and Liability

 When written action is permitted to be taken by less than all Directors, all Directors must be notified immediately of its text and effective date. Failure to provide the notice does not invalidate the written action. A director who does not sign or consent to the written action has no liability for the action or actions taken by the written action.

5.4                Audit Committee

The board shall establish an audit committee to review the financial information and accounting report of the cooperative. The cooperative shall have the financial information audited for presentation to the members unless the bylaws allow financial statements that are not audited and the financial statements clearly state that they are not audited and the difference between the financial statements and audited financial statements that are prepared according to generally accepted accounting procedures. The Directors shall elect members to the audit committee. The audit committee shall ensure an independent review of the cooperative's finances and audit.

 

5.5               Compensation

The compensation of the Board shall be defined in policy, but may not exceed that of any other position within the Coop.

 

6                Committees

6.1                Generally

A resolution approved by the affirmative vote of a majority of the board may establish committees having the authority of the board in the management of the business of the cooperative only to the extent provided in the resolution. Committees may include a special litigation committee consisting of one or more independent Directors or other independent persons to consider legal rights or remedies of the cooperative and whether those rights and remedies should be pursued. Committees other than special litigation committees are subject at all times to the direction and control of the board.

6.2                Membership

Committee members must be natural persons and be a patron member. Unless the articles or bylaws provide for a different membership or manner of appointment, a committee consists of one or more persons, who need not be Directors, appointed by affirmative vote of a majority of the Directors present.

6.3                Procedure

The procedures for meetings of the board apply to committees and members of committees to the same extent as those sections apply to the board and individual Directors.

6.4                Minutes

Minutes, if any, of committee meetings must be made available upon request to members of the committee and to any director.

6.5                Standard of conduct

The establishment of, delegation of authority to, and action by a committee does not alone constitute compliance by a director with the standard of conduct set forth in section.

6.6.                Standard and liability

A director shall discharge the duties of the position of director in good faith, in a manner the director reasonably believes to be in the best interests of the cooperative, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. A person who so performs those duties is not liable by reason of being or having been a director of the cooperative.

6.7                Reliance

(a) A director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by: (1) one or more officers or employees of the cooperative who the director reasonably believes to be liable and competent in the matters presented; (2) counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person's professional or expert competence; or (3) a committee of the board upon which the director does not serve, duly established by the board, as to matters within its designated authority, if the director reasonably believes the committee to merit confidence. (b) Paragraph (a) does not apply to a director who has knowledge concerning the matter in question that makes the reliance otherwise permitted by paragraph (a) unwarranted.

6.8                Presumption of assent and dissent

 A director who is present at a meeting of the board when an action is approved by the affirmative vote of a majority of the Directors present is presumed to have assented to the action approved, unless the director: (1) objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and does not participate in the meeting after the objection, in which case the director is not considered to be present at the meeting for any purpose of this chapter; (2) votes against the action at the meeting; or (3) is prohibited by a conflict of interest from voting on the action.

6.9                Considerations

In discharging the duties of the position of director, a director may, in considering the best interests of the cooperative, consider the interests of the cooperative's employees, customers, suppliers, and creditors, the economy of the state, and long-term as well as short-term interests of the cooperative and its patron members, including the possibility that these interests may be best served by the continued independence of the cooperative.

6.10                Director Conflicts of Interest

6.10.1                Conflict and procedure when conflict arises

6.10.1(a) A contract or other transaction between a cooperative and one or more of its Directors, or between a cooperative and a business entity in or of which one or more of its Directors are governors, Directors, managers, officers, or legal representatives or have a material financial interest, is not void or voidable because the director or Directors or the other business entities are parties or because the Director or Directors are present at the meeting of the members or the board or a committee at which the contract or transaction is authorized, approved, or ratified, if:

6.10.1(a)(1) the contract or transaction was, and the person asserting the validity of the contract or transaction sustains the burden of establishing that the contract or transaction was, fair and reasonable as to the cooperative at the time it was authorized, approved, or ratified and: 6.10.1(a)(1)(i) the material facts as to the contract or transaction and as to the director's or Directors' interest are disclosed or known to the members; and 6.10.1(a)(1)(ii) the material facts as to the contract or transaction and as to the director's or Directors' interest are fully disclosed or known to the board or a committee, and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a majority of the board or committee, but the interested director or Directors are not counted in determining the presence of a quorum and must not vote; or

6.10.1(a)(2) the contract or transaction is a distribution, contract, or transaction that is made available to all members or patron members as part of the cooperative's business.

6.10.1(b) If a committee is elected or appointed to authorize, ratify, or approve a contract or transaction under this section, the members of the committee must not have a conflict of interest and be charged with representing the best interests of the cooperative.

6.10.2                Material financial interest 

For purposes of this section, (1) a resolution fixing the compensation of a director or fixing the compensation of another director as a director, officer, employee, or agent of the cooperative, is not void or voidable or considered to be a contract or other transaction between a cooperative and one or more of its Directors for purposes of this section even though the director receiving the compensation fixed by the resolution is present and voting at the meeting of the board or a committee at which the resolution is authorized, approved, or ratified or even though other Directors voting upon the resolution are also receiving compensation from the cooperative; and (2) a director has a material financial interest in each organization in which the director or the spouse; parents; children and spouses of children; brothers and sisters and spouses of brothers and sisters; and the brothers and sisters of the spouse of the director or any combination of them have a material financial interest. For purposes of this section, a contract or other transaction between a cooperative and the spouse; parents; children and spouses of children; brothers and sisters and spouses of brothers and sisters; and the brothers and sisters of the spouse of a director or any combination of them, is considered to be a transaction between the cooperative and the director.

6.11                Limitation of Directors’ Liability

A Director of the Cooperative shall not be personally liable to the Articles may limit liability. A director's personal liability to the cooperative or members for monetary damages for breach of fiduciary duty as a director may be eliminated or limited in the articles or bylaws except as provided in law.

Restrictions on liability limitation. The articles or bylaws may not eliminate or limit the liability of a director: (1) for a breach of the director's duty of loyalty to the cooperative or its members; (2) for acts or omissions that are not in good faith or involve intentional misconduct or a knowing violation of law; (3) for knowing violations of securities laws or for illegal distributions; (4) for a transaction from which the director derived an improper personal benefit; or (5) for an act or omission occurring before the date when the provision in the articles or bylaws eliminating or limiting liability becomes effective.

7                 Officers

 

7.1                Election of Officers

The Board shall elect: a chair; and one or more vice-chairs; a records officer; and a financial officer.

7.1.1                Chair

The Chair shall preside at all meetings of the members and the Board of Directors. The Chair shall also have whatever powers and abilities the Board of Directors choose to delegate or assign to him or her.

7.1.2                Vice-Chair 

In the absence of the Chair, the Vice-Chair shall perform his or her duties. The Vice-Chair shall also have whatever powers and abilities the Board of Directors choose to delegate or assign to him or her.

7.1.3                Records Officer

The Records Officer shall be responsible for documenting and keeping all records of the affairs of the Board of Directors, as well as any other duties that the Board of Directors may deem appropriate.

7.1.4                Financial Officer

The Financial Officer shall be responsible for reviewing all financial records of the Cooperative and presenting them to the Board of Directors.                                        

7.1.5                Chief Executive Officer

The Chief Executive Officer shall oversee the general operations of the Cooperative. He or she shall have any authority to execute all certificates, contracts, and other documents on behalf of the Cooperative as delegated to the Chief Executive Officer by the Board of Directors. The Chief Executive Officer shall have final, but delegable, authority to hire and fire any employees of the Cooperative not appointed directly by the Board of Directors.

7.2                Authority to Bind

The officers, other than the chief executive officer, shall not have the authority to bind the cooperative except as authorized by the board.

7.3                Additional Officers

The board may elect additional officers as the articles or bylaws authorize or require.

7.4                Officers that must be members

The chair and first vice-chair shall be Directors and members. The financial officer, records officer, and additional officers need not be Directors or members.

7.5                Chief Executive Officer

The board may employ a chief executive officer to manage the day-to-day affairs and business of the cooperative, and if a chief executive officer is employed, the chief executive officer shall have the authority to implement the functions, duties, and obligations of the cooperative except as restricted by the board. The chief executive officer shall not exercise authority reserved to the board or the members under this chapter, the articles, or the bylaws.

                                                   

8                Fiscal  Matters

                                        

8.1                Fiscal Year 

The fiscal year for this cooperative shall end on December 31.

                                        

8.2                Borrowing 

The Board of Directors shall have power to authorize and approve the borrowing of money and the pledging and mortgaging of any or all of the assets of this cooperative as security for the sums so borrowed.

                                        

8.3                Financial Statements 

The Cooperative is authorized to use unaudited financial statements.

                                        

8.4                Compensation & Reimbursement

Compensation, if any, for the Board of Directors shall be determined by a resolution of the Board of Directors. The Board of Directors shall also decide issues of any additional compensation provided for Directors and managers. Director compensation shall be disclosed to the membership at large. All officers and Directors shall be entitled to reimbursement for legitimate expenses incurred in attending meetings of the Board of Directors or conducting other business of the Cooperative. These expense claims must be approved by a majority vote of the Board of Directors.  

9                      Miscellaneous

 

9.1                 Indemnification

The Coop shall indemnify, as allowed by law, any officer, Director, or employee of the Coop, for expenses and costs actually and necessarily incurred in connection with any claim asserted by reason of the person being or having been such officer, Director, or employee, except in relation to matters of negligence, fraud, criminal acts, or intentional misconduct in respect of the matter in which indemnity is sought. The Coop shall carry appropriate liability insurance to protect its officers, Directors, employees, and the Coop itself against the costs of such indemnification.

 

9.2                 Severability

If any section, clause, provision, or portion of these bylaws is adjudged unconstitutional or invalid by a court of competent jurisdiction, the remainder of these bylaws shall not be affected thereby.

 

9.3                 Adoption & Amendment

Adoption of these bylaws requires a simple majority vote of the members present at the organizational meeting. These bylaws may be amended at any time. Amendments may be proposed by the Board of Directors, a majority of the Members’ Assembly, or by a petition of 25 members. Ratification shall follow voting procedures decided upon by the Members’ Assembly and requires a 2/3 majority vote of the members present at the meeting on which the ratification is voted upon for success.

 

9.4                 Renewal and Review of Bylaws at Annual Meeting of Members

These bylaws must be re-approved at the annual meeting every year. Failure to renew the bylaws does not invalidate or affect the authority of the last authorized version in any way.