bylaws of elm city food cooperative inc. 9-21-2012

8/12/2019 BYLAWS of Elm City Food Cooperative Inc. 9-21-2012

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BYLAWSof Elm City Food Cooperative, Inc.

AMENDED 9/2012



AMENDED AND RESTATED

BYLAWS OF

ELM CITY FOOD COOPERATIVE, INC.

(A Connecticut Cooperative Association)

ARTICLE I: ORGANIZATION

1.1 Name.

The name of the organization shall be Elm City Food Cooperative, Inc. (the “Cooperative”).

1.2 Purpose.The nature of the activities to be conducted and the purposes to be promoted or carried out by the Cooperative are to operate a con-

sumer cooperative that meets the needs of its members and the community it serves, including providing educational activities and servic

which enrich the life of the community; and to engage, subject to the foregoing and those set forth below, in any and all lawful purposes a

activities for which cooperatives and corporations may be organized under the laws of the State of Connecticut and under Subchapter T

the Internal Revenue Code, as that code may be amended from time to time, and to transact any and all such business incidental thereto.

1.3 Ownership.

The Cooperative is member owned and shall be operated on a cooperative basis in accordance with Subchapter T of the Internal Reven

Code, as that code may be amended from time to time.

1.4 Governance.

The business of the Cooperative shall be governed by its board of Directors (the “Board”), who are individuals selected by and from amo

and are accountable to, its assembly of members, provided, however, that the initial Board shall not be selected by members but instead a

pointed by the incorporators of the Cooperative. The assembly of members shall retain all powers required by law or by these Bylaws. Th

Directors shall have all of the duties of managers under, and be considered managers for the purposes of, Sections 33-183 to 33-193, inclu

sive, of the Connecticut General Statutes.

1.5 Fiscal Year.

The scal year of the Cooperative shall begin the rst day of July in each year and end on the last day of June in the following year, or as

otherwise determined by the Board.

1.6 Ofces.

The Cooperative may have ofces or other facilities within or outside the State of Connecticut as may be deemed by the Board to be ne

sary or convenient to the service of members; provided however, that the Cooperative shall not do business in any other place or places

than those stated in the Certicate of Incorporation.

ARTICLE II: MEMBERSHIP

2.1 Eligibility.

Membership in the Cooperative shall be voluntary and open to any person or group which submits a completed membership application

and: (a) declares himself/itself to be interested in the mission of the Cooperative; (b) agrees to be a patron of the Cooperative and abide

by its Articles of Incorporation, Bylaws, and other rules and regulations; (c) executes a membership agreement; (d) purchases one or mor

shares of Class A stock of the Cooperative and becomes, or endeavors to become, fully vested in the Cooperative, in accordance with Se

tion 2.5 of these Bylaws; and (e) meets any other qualications as may be required by the Board.

2.2 Admission.

An eligible person or group may be admitted by the Board to membership upon meeting the criteria described in Section 2.1. A copy of

these Bylaws will be made available to each applicant.

2.3 Stock.

The Board has the power to issue stock in the Cooperative in accordance with the Certicate of Incorporation and applicable law. The p

value of such stock shall be as set forth in the Certicate of Incorporation. In order to assist the Cooperative in meeting its needs for cap

funds, members (including both partially and fully vested members) may be required to purchase one or more additional shares of Class A

stock of the Cooperative on a periodic basis as determined by the Board.

2.4 Return of Shares.

The Board shall manage the Cooperative’s equity capital in a way to preserve and build upon the Cooperative’s nancial position while

also allowing for redemptions of equity as and when the Cooperative has the nancial strength to redeem capital stock. No terminated o

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resigned member shall have any legal right to demand to demand or otherwise be entitled to a refund of any amounts tendered for their

capital stock except in the sole discretion of the Board, which shall consider the best nancial interests of the Cooperative in making suc

decision.

2.5 Denition of Member

For the avoidance of doubt, the term “member” within these Bylaws shall refer only to individuals and groups eligible for membership in

accordance with Section 2.1 which: (a) are fully vested in their membership as dened Section 2.6; or (b) for reason of economic hardsh

or otherwise, are unable to purchase all of the shares required for full vesting of membership and therefore become partially vested by: (

purchasing one (1) or more shares of Class A stock in the Cooperative, (ii) signing an agreement with the Cooperative to purchase all of

the shares required for full vesting of membership in an installment payment plan which may last for a period of up to two (2) years, subj

to the discretion of the Board, and (iii) submitting payments in a timely manner in accordance with such installment payment plan.

2.6 Member Vesting

At the time of the initial ratication of these Bylaws, ten (10) shares of Class A stock shall be required for a membership to become fully

vested, provided, however, that the Board shall be entitled to increase or reduce the number of shares required for full vesting of membe

ship from time to time to raise additional capital or otherwise address the needs of the Cooperative.

2.7 Member Rights.

Members, whether fully or partially vested, have the right to: purchase goods and services from the Cooperative; participate in Cooperat

events and programs as members; vote on all matters coming before the assembly of members, including the election of the Board; atten

meetings of the Board; petition the Board to call a special meeting, subject to Section 3.2 of these Bylaws; and receive notice of members

meetings. Each member shall have one voice or vote and no more on all matters submitted to the membership. In addition, all members

shall be entitled to receive patronage refunds in accordance with their shares in the Cooperative and with Article VII of these Bylaws.

2.8 Group Memberships

Membership may be designated in the name of a group, including a legal entity such as a corporation or limited liability company. Membe

of this group shall be represented by a single ofcer, Director or other authorized agent (the “Representative”). Only the Representative

is authorized to transact ofcial membership business with the Cooperative. The Representative shall be named as the member-owner o

stock certicates, patronage refund checks, and any other payments based on or made to members. It is the duty of the Representative t

account to all other members of the group for any monies or other benets received from the Cooperative, and the Cooperative is not

responsible for ensuring that individuals in any group receive money or other distributions to which they may be entitled under the grou

mutually-agreed plan. The group must notify the Cooperative in writing about a properly authorized change of the Representative.

2.9 Membership Identication.

Upon approval of an application for membership, each member (or, in the case of a group member, each Representative) shall be issued a

certain number of membership cards, keychain cards, and/or similar identication, for each membership (hereinafter the “Member Identication”). Each Membership Identication shall be in such form as may be prescribed by the Board from time to time. The Cooperative sh

maintain an ongoing list of those entitled to hold Member Identication. Such Member Identication shall not be transferable except as

provided in Section 2.10 of these Bylaws.

2.10 Membership Transfers.

Memberships, Member Identication, and stock in the Cooperative are not transferable without the express written consent of the Boar

and any attempt by a member to transfer, sell, assign, or otherwise dispose of such property shall be void, provided, however, that the Rep

resentative of a group membership may be modied pursuant to Section 2.8 of these Bylaws.

2.11 Suspension or Termination of Member.

A member who remains delinquent in nancial obligation (including failure to abide by the terms of an installment payment plan or failure

to purchase additional capital stock as required by the Board) for more than one (1) year or who fails to patronize the Cooperative for

three (3) consecutive years shall, upon notice by the Cooperative, be considered to have voluntarily terminated membership. If the Boardshall nd, after notice and an opportunity for the member to be heard, that: (a) Member Identication has come into the possession or

control of any individual or group other than the individual or group to whom it was issued; (b) that the holder has ceased to be an eligi

member or has otherwise violated the Articles of Incorporation, Bylaws, rules, or regulations of the Cooperative; (c) that the ownership

voting control of any group member has been sold or otherwise transferred to any non-member, whether operating under the same nam

and structure or not, without the prior written consent of the Cooperative; (d) that a member has violated the membership agreement

other agreement(s) made with the Cooperative; (e) if the Board has attempted in good faith to reach the member via postal mail, electro

mail, or other contact information three (3) times but the address supplied by the member is no longer valid; or (f) for other good cause

then the Board may either suspend such holder’s rights as a member or terminate membership status. Failure by a partially vested memb

to submit payments in a timely manner in accordance with an installment payment plan may result in suspension or termination of memb

ship and forfeiture of all previously paid amounts to the Cooperative.

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2.12 Resignation of Member.

Any member may resign membership by ling a written resignation with the Secretary of the Cooperative, subject to acceptance by the

Board or its delegate.

2.13 Procedures Upon Termination or Resignation

In the event a membership is terminated or a member resigns in accordance with Sections 2.11 or 2.12 of these Bylaws, the procedures

obligations in this Section shall apply. The allocated or contributed equity of such member which has not been called for payment previo

may, in the Board’s discretion, be redesignated to the Cooperative’s capital reserve. A terminated or resigned member shall immediately

turn to the Cooperative all previously issued Member Identication. If a terminated or resigned member fails to deliver such Member Id

cation, the Cooperative may cancel such Member Identication on its books and records, and the Member Identication will be deeme

and void. Termination or resignation shall not relieve that member of the obligation to pay any dues, assessments, or other charges accruand due or past-due but unpaid. A terminated or resigned member shall have no rights or privileges resulting from any previous member

held except as may be provided in these Bylaws, nor shall a terminated or resigned member be entitled to vote or to otherwise have a v

in the management or affairs of the Cooperative. Payments made by a partially vested member who failed to abide by the terms of the in

ment payment plan shall not be credited to future applications for membership.

2.14 Consent to Take Patronage Distributions Into Income.

Each person who hereafter applies for and is accepted to membership in this Cooperative and each member of this Cooperative as of th

fective date of these Bylaws who continues as a member after such date shall, by such act alone, consent that the amount of any distribu

with respect to its patronage which are made in written notices of allocation (as dened in 26 U.S.C. § 1388), and which are received by

member from this Cooperative, will be taken into account by the member at their stated dollar amounts in the manner provided in 26 U

§ 1385(a) in the taxable year in which the written notices of allocation are received by the member.

ARTICLE III: MEMBER MEETINGS

3.1 Annual Meeting.

The annual meeting of members shall be held once each scal year at such a time and place as the Board may prescribe. The purpose of

meeting shall be to hear reports on operations and nances, to review any important policy issues or oilier matters that vitally affect the

operation of the Cooperative, to elect Directors and conduct such other business as may properly come before the meeting.

3.2 Special Meetings.

Special meetings of the assembly of members may be called by: action of the assembly of members; upon written petition of at least fty

members or ve percent (5%) of the total number of members, whichever is greater, which must be delivered certied mail to the Secre

of the Cooperative; by the written request from the majority of the Board to the Secretary of the Board; or by the President of the Boa

Only business within the purpose or purposes described in the notice of meeting may be conducted at a special meeting of members.

3.3 Notice.

Notice of the date, time, place and proposed agenda of each meeting of the assembly of members shall be communicated to the Membe

less than ten (10) nor more than sixty (60) days before the date of the meeting by:

(a) mailing the notice of the meeting to each member personally at the member’s last known post ofce address;

(b) electronic mail, voicemail or telephone;

(c) other electronic means as may be consented to by such member; or

(d) any other means permitted by Section 33-603 of the Connecticut General Statutes;

Notwithstanding the foregoing, if any of the above forms of personal notice are impractical, notice may be communicated by publication a legal newspaper of general circulation in New Haven County or by radio, television or other public broadcast communication; and by (

publication in a magazine, periodical, or other publication of this Cooperative that is regularly published by or on behalf of this Cooperat

and circulated generally among members; or (ii) by posting notice in the Cooperative’s place of business.

3.4 Voting.

Each member shall be entitled to one vote on any issue. Voting shall be in person or by proxy. The Board may x a record date for deter

ing members entitled to vote. The Cooperative’s list of members and Representatives as of such date, or the date shall determine who i

entitled to vote at any meeting Voting may be by “viva voce,” except that any member may demand a vote by ballot. In voting for Directo

each member may cast as many votes as there are positions to be lled, but no more than one (1) vote may be cast for any one candidat

Member action on any matter, other than the election of Directors, coming before the members shall require the afrmative vote of a m

ity of votes cast, unless the Connecticut General Statutes require a greater amount of afrmative votes.

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3.5 Proxies

A member may vote such member’s shares in person or by proxy. A member may appoint a proxy to vote or otherwise act for such

member by signing an appointment form or by electronic transmission of the appointment, either personally or by such member’s attorn

in-fact. An appointment of a proxy is effective when received by the Secretary or other ofcer or agent authorized to tabulate votes. An

appointment is valid for eleven (11) months unless a longer period is expressly provided in the appointment form. The death or incapaci

of the member appointing a proxy does not affect the right of the Cooperative to accept the proxy’s authority unless notice of the death

or incapacity is received by the Secretary or other ofcer or agent authorized to tabulate votes before the proxy exercises authority un

the appointment. Subject to Section 33 708 of the Connecticut General Statutes and to any express limitation on the proxy’s authority a

pearing on the fact of the appointment form, the Cooperative is entitled to accept the proxy’s vote or other action as that of the membe

making the appointment.

3.6 Quorum.

A majority of the votes entitled to be cast on the matter constitutes a quorum for action on that matter. Once a member is represente

for any purpose at a meeting, the member is deemed present for quorum purposes for the remainder of the meeting and for any adjourn

ment of that meeting, unless a new record date is or must be set for that adjourned meeting.

ARTICLE IV: BOARD

4.1 Powers and Duties.

The Board shall govern the business and affairs of this Cooperative and assure that the purposes and mission of the Cooperative are car

ried out. The Board shall exercise all of the powers of this Cooperative, except those powers that are conferred upon or reserved to the

members by law, the Certicate of Incorporation, or these Bylaws. Subject to the preceding sentence, the powers and duties of the Boar

shall include, but not be limited to: oversight of hiring management and consultants and evaluating their performance; approving budgetsand scal controls; ensuring fair and equitable conditions of employment; providing leadership in the realm of long range policy; overseein

operations; making all rules, policies and regulations consistent with applicable laws, the Articles of Incorporation or these Bylaws; enterin

into loans, leases, utility agreements, and all other similar agreements; and assuring that the purposes and mission of the Cooperative are

carried out. The Board shall adopt such policies, rules, and regulations and shall take such actions as it may deem advisable, provided that

Board does not act in a manner inconsistent with the law, the Articles of Incorporation, or these Bylaws. The Board may authorize the em

ployment of such other agents and counsel as it deems necessary or advisable from time to time in the best interests of the Cooperative

4.2 Qualication and Number.

The Board shall consist of not more than nine (9) and not fewer than seven (7) Directors, provided that the number of Directors shall

never fall below the number required by law. The number of Directors shall be xed from time to time by the Board. No Director may b

an employee of the Cooperative, a former employee of the Cooperative within two (2) years or termination of employment, or persons

who reside in the same household as a Cooperative employees or former employees (within two (2) years or termination of employmen

No person shall be eligible for Directorship or remain as a Director if that person is in competition with, or is afliated with any enterpr

that is in competition with the Cooperative. All Directors shall be members of the Cooperative.

4.3 Election and Tenure.

Election and Term. Directors are elected to Board positions, the number and term of which shall be established by the Board prior to the

annual Board election, by a plurality of votes cast in such election. The incorporators of the Cooperative will set forth the initial Board, w

staggered terms divided as evenly as possible among the following three groups:

Group A: Up to three (3) Directors will be elected for an initial term of three (3) years.

Group B: Up to three (3) Directors will be elected for an initial term of two (2) years.

Group C: Up to three (3) Directors will be elected for an initial term of one (1) year.

Following the completion of the initial Directors’ terms, successor Directors shall be elected by the voting members to serve a term of

three (3) years and shall serve until election of their successors or as otherwise provided in these Bylaws. Successor Directors shall beelected to staggered terms so that approximately one-third (1/3) of the Board is elected each year. Directors may serve no more than

three (3) consecutive full three (3)-year terms, but may be subsequently re-elected after a period of one (1) year.

4.4 Meeting and Method of Meeting.

The Board shall meet at least four (4) times per year. Board meetings and committee meetings may be conducted by telephone conferen

call provided that technical arrangements permit all persons participating to hear one another at the same time. Such participation shall

constitute presence in person at a meeting.

4.5 Notice for Board Meetings.

Notice of regular meetings of the Directors need not be given. Notice of a special meeting of the Directors shall be communicated to t

Directors by any means permitted by Section 33-603 of the Connecticut General Statues at least two (2) days prior to the special meeti




All meetings shall be open to members of the Cooperative, except that the Board may meet in Executive Session for legal, real estate, pe

sonnel, and other issues where an open session would be detrimental to the Cooperative, in the sole discretion of the Board. To the exte

practicable, the time and place of all meetings shall be posted in a conspicuous place at the Cooperative’s place of business. Any Director

waive notice of the meeting in writing, and his/her presence at that meeting shall automatically constitute a waiver of notice, unless the D

rector at the beginning of the meeting, or promptly upon arrival, objects to holding the meeting or the transaction of business at the mee

and thereafter does not vote for or assent to action taken at the meeting.

4.6 Quorum and Voting.

At all meetings of the Board a quorum shall consist of a majority of the number of Directors prescribed by the Board. Binding decisions

cannot be made unless a quorum of Directors is present. At all meetings of the Board, each Director shall be entitled to one (1) vote. Eac

matter submitted to a vote of the Board shall be determined by a majority of Directors present, unless the vote of a greater or lesser pro

portion is otherwise required by the laws of the State of Connecticut, the Certicate of Incorporation or other provisions in these Bylaw

4.7 Action Without a Meeting.

Any action required or permitted to be taken at any meeting of the Board, or any committee thereof, may be taken without a meeting if a

members of the Board or committee consent thereto in writing, and such writing is led with the minutes of the proceedings of such Bo

or committee.

4.8 Resignation and Removal.

A Director may resign at any time by submitting a written resignation to the Secretary, which shall take effect immediately without accep

tance, unless a later time is designated in the written notice. Whenever any Director fails to meet the qualications as described in Sectio

4.2 of these Bylaws, fails to satisfactorily perform his / her duties, fails to attend three (3) consecutive Board meetings, either regular or

special, without just and reasonable cause, or for other just cause when removal is deemed by a majority of the Board (without counting

the Director under consideration for removal) to be in the best interests of the Cooperative, and provided that notice and an opportunior the Director to be heard has been given in accordance with these Bylaws, then it shall be the duty of the Board to submit a proposal

to remove such Director at a special meeting of the members, and to ll the vacancy in accordance with Section 4.9 of these Bylaws. Mem

bers may remove any Director only for just cause, at a special meeting called for the purpose. The notice of such meeting shall include th

charges against such Director. Such Director shall be notied in writing of the charges and be given an opportunity to be heard at a mee

of the members. Removal of a Director by the members shall require an afrmative vote of a majority of votes cast in favor of the remov

4.9 Vacancies.

n case of any vacancy in the Board caused by death, resignation, removal or otherwise the remaining Directors may select someone to

such position for the remainder of the term of that seat.

4.10 Committees.

The Board may designate one or more committees of Directors to advise the Board and members and to exercise such authority as the

Board shall designate. The Board shall establish a nominating committee consisting of at least three (3) members, at least one of whom shbe a Board member who will chair the committee. Any committee exercising the powers of the Board, as may be authorized by the Boa

shall consist of only Directors. Committees not exercising powers of the Board may consist of Directors and non-Directors.

4.11 Nominations.

The Nominations Committee shall present a slate of qualied candidates for positions on the Board of Directors, to be lled by election

at the annual meeting. Candidates for Director may also be nominated for the slate by a petition signed by no fewer than twenty-ve (25

members in good standing, and delivered to the Secretary of the Cooperative by certied mail at least fourteen (14) days prior to the an

meeting.

4.12 Advisory Board.

The incorporators or the Board may create an advisory board that meets or provide guidance to the Board on an as-needed basis. Memb

of such advisory board shall be selected by the Board and shall include those with special expertise or understanding about food coopera

tives, food policy, the local environment, or other issues of concern to the Cooperative.

ARTICLE V: OFFICERS

5.1 Designation.

The ofcers of the Cooperative shall consist of a president, vice president, secretary, treasurer and such other ofcers or assistant ofcer

as may be determined by the Board. The ofces of treasurer and secretary may be held by the same person. The president, vice president

secretary and treasurer shall be chosen from among the Directors then in ofce.

5.2 Election and Term.

Each ofcer shall serve for the term for which such ofcer is elected and until such ofcer’s successor is duly elected or until such ofcer

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death or until such ofcer shall have resigned or have been removed. Vacancies among the ofcers shall be lled by the Board.

5.3 Duties.

Ofcers shall have the following powers and duties together with such other powers and duties as may be determined by the Board: (a)

president shall arrange for facilitation at all meetings of the assembly of members or the Board, shall preside at all meetings of the Board

shall negotiate and execute all contracts and agreements in the name of the Cooperative in accordance with Section 5.5 of these Bylaws

and shall call annual and special meetings of members and the Board, (b) the vice president shall oversee membership records and perfo

the duties of the president in his or her absence, (c) the secretary shall oversee the recording and publishing of minutes of all meeting, s

oversee the maintenance of membership and Member Identication records, and all records required to be kept under subsections (a) a

(c) of Section 33-945of the Connecticut General Statutes, to the extent the keeping of such records is not assigned to another ofcer b

these Bylaws or by the Board, and shall serve all required notices, and (d) the treasurer shall oversee the nancial affairs of the Cooperative, provide a statement of the condition of the Cooperative at each annual meeting of the members and such other times as the treasu

may be directed by the President or the Board, oversee the annual audit in accordance with Section 5.6 of these Bylaws, and le require

reports and returns.

5.4 Removal and Resignation.

Any ofcer may be removed from ofce by the Board whenever in the Board’s judgment the best interests of the Cooperative will be

served thereby. Ofcers can resign at any time by giving notice to the Cooperative.

5.5 Signatory Responsibility of Ofcers.

Unless otherwise stated in these Bylaws, the President shall have all general signatory power and authority to execute all instruments an

writings of whatever kind on behalf of the Cooperative, including but not limited to all : checks and drafts, negotiable instruments, contra

and agreements, deeds and leases, tax returns, applications for loan or grant and al l related documentation, loan agreements, promissory

notes and mortgages and other documents granting security therefore. In addition, the Board may authorize in writing any ofcer(s), employees, agents or others to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Coop

tive, and such authority may be general or conned to specic business.

5.6 Audit

The Board shall cause an audit of the Cooperative’s books and records to be performed annually, or at such other time interval as the

Board may establish, by such person(s) as the Board shall vest with this responsibility. The audit may be conducted by outside profession

auditor, an audit committee of the Board, or by other qualied persons, as the Board may determine from time to time. All audit ndings

shall be reported to the Board, which shall ensure that any required corrective actions are promptly taken. A summary of these audit n

ings and any corrective actions taken shall be reported to the members at the annual meeting.

ARTICLE VI: RISK MANAGEMENT

6.1 Indemnication of Directors and Ofcers.

So as to induce the Directors and ofcers of the Cooperative to serve as such and as partial consideration for such services, the Coop -

erative shall indemnify, advance expenses to, and reimburse each present and future Director, ofcer, employee, and agent for any claim o

liability (including expenses and attorneys fees actually and reasonably incurred in connection therewith) to which such person may beco

subject by reason of their afliation with the Cooperative, to the maximum extent permitted by law. Such indemnication shall be made

only if it is determined by the Board that the Director, ofcer, employee, or agent acted in good faith in the reasonable belief that his or

action was in the best interests of the Cooperative and not unlawful, and that such indemnication is in the best interests of the Cooper

tive. The foregoing shall not be exclusive of any other rights to which Directors and ofcers may be lawfully entitled.

6.2 Insurance.

The Board shall provide for adequate insurance of Cooperative property, or property in the possession of or stored by the Cooperative

and not otherwise adequately insured, and, in addition, adequate insurance covering general liability, liability for injury and accidents to em

ployees and the public, Director and ofcer liability insurance and such other insurance as the Board shall deem necessary and prudent.

ARTICLE VII: OPERATION AT COST AND MEMBERS’ CAPITAL

7.1. Operation at Cost.

The Cooperative shall at all times be operated on a cooperative, service-at-cost basis for the mutual benet of its members and patrons

The Cooperative may accumulate only such capital, reserves and other nancial assets as are determined by the Board to be necessary a

prudent to the ongoing operation of the Cooperative’s business. Within a reasonable time after the end of each scal year, the Board sha

determine the net earnings (net margin) of the Cooperative for said scal year, which determination shall be made in accord with genera

accepted business principles and practices, or otherwise as the Board may direct upon the advice of the Cooperative’s accountant or ot

professional advisor. No distribution of net earnings to members shall be declared or paid until a sum equal to ten percent (10%) of the

prots is appropriated for a contingent or sinking fund and until there has been thereby accumulated a sum equal to twenty percent (20




of the stock of the Cooperative. The net earnings of the Cooperative for said year from all the business of tile Cooperative other than bu

ness done with or for members may be retained by the Cooperative as unallocated reserves or surplus. If there are no net earnings on s

business, or if such net earnings are insufcient to provide for reasonable reserves for necessary purposes of the Cooperative, as determ

by the Board, then reasonable reserves may be set aside by the Board from the net earnings on business done with or for members or

patrons.

7.2 Capital Plan and Annual Operating Budget.

The Board shall adopt a Capital Plan, which shall be reviewed at least annually thereafter, to establish and provide for the capital needs of

Cooperative, including the nancial requirements of the Annual Operating Budget and the Strategic Plan. The Capital Plan shall establish a

base amount of Capital, and the method and amount of equitable contribution(s) of capital required of members. If capital is accumulated

excess of the amount provided for in the Capital Plan, such excess shall be returned to members on an equitable basis. The Board shall approve each year an Annual Operating Budget, proposed or developed in consultation with the general Director, to provide for the payme

the operating expenses of the Cooperative.

7.3 Patronage Refunds.

This Cooperative operates on a cooperative basis and allocates earning and losses to patron-members on the basis of the business done

with or for such patrons. Thus, in accordance with Section 1381 of the Internal Revenue Code of 1986, this Cooperative may declare a

patronage refund to be allocated among the patron-members in accordance with the total amount of purchases made by each such patro

during the preceding scal year. If available, such patronage refunds shall be declared and paid from net earnings (net margin) at the end o

each scal year, as required in these Bylaws. Each year, the Cooperative shall be obligated to account for and pay on a patronage basis to a

members all of the Cooperative’s net earnings (net margin) over and above the cost of providing services to such members, after paying

costs including dividends declared on Class B stock and making reasonable additions to capital and reserves and redeeming capital credits

n accordance with Section 1382 of the Internal Revenue Code, the patronage refunds declared by the Cooperative are deductible from t

taxable income of the Cooperative.

All members shall be treated equitably, and patronage refunds shall be paid in proportion to and based on the volume or value of produc

and services purchased by each member from the Cooperative during the year in question or based on such other equitable method as i

established by the Board. Patronage refunds to members shall be paid in cash or the equivalent or by an appropriate credit to a member’

capital account or in both forms of distribution, as may be determined by the Board from time to time. The Cooperative may retain the d

tributed cash portion of any patronage allocation to offset any amounts due to the cooperative for purchase of capital shares.

7.4 Declaration and Notice of Patronage.

The Cooperative shall, within eight and one-half (8 ½) months after the close of each scal year, declare and pay any available patronage

refund as required by these Bylaws and shall notify each member thereof. The patronage notice shall be in the form of a written notice of

allocation or a per-unit retains certicate (as those terms are used in Subchapter T of the Internal Revenue Code) or other appropriate

document.

7.5 Dividends.

No dividends or interest shall be paid on Cooperative stock or member Capital Accounts, except as provided in these Bylaws. Dividends

shall not exceed the legally authorized limit per year based on the book value of the shares or the member Capital Account.

7.6 Patronage Losses.

f the Cooperative suffers a loss during any year on business conducted with or for members (“patronage loss”), such loss may be appor-

tioned among the members during the year of loss so that such loss will, to the extent practicable, be borne by those who are members

the loss year on an equitable basis. The Board shall have full authority to prescribe the basis on which capital furnished by members may b

reduced, or how such patronage loss will otherwise be equitably apportioned among the members. If in any scal year the Cooperative s

ncur a loss other than on patronage operations (“non-patronage loss”), such loss shall be charged rst against any reserve accumulated f

non-patronage earnings in prior years. This Section shall not be construed to deprive the Cooperative of the right to carry backward or

forward losses from any source whatsoever in accordance with the Internal Revenue Code, state tax statutes or other applicable laws.

7.7 Class B stock

The Class B stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the funds of the Cooperative leg

available therefor, cumulative cash dividends at the annual dividend rate of 6.25% of the par value ($500) through and including Decembe

2018, and 8.00% of the par value ($500) thereafter, for each share of Class B stock, payable annually on January 31st of each year, beginnin

on January 31, 2012 (and, in the case of any accrued but unpaid dividends, at such additional times and for such interim periods, if any, as d

termined by the Board of Directors). Dividends, if paid, on the Class B stock will be payable annually in arrears on each January 31, beginn

on January 31, 2012. Dividends on the Class B stock will be cumulative, whether or not in any year there shall be funds of the Cooperati

egally available for the payment of such dividends and whether or not such dividends are authorized or declared. Dividends on the Class

stock will accrue (whether or not declared) on an annual basis from the issue date, and accrued dividends for each annual dividend perio

will accumulate to the extent not paid. If the Board of Directors decides to call any shares of the Class B stock for redemption, pursuan




Section 6 of Article V of the Cooperative’s Certicate of Incorporation, the Cooperative will pay the par value ($500) plus all accrued an

unpaid dividends on such shares of Class B stock. If the Cooperative decides to redeem less than all of the outstanding Class B stock, an

such partial redemption will be made on a pro rata basis on all of the outstanding shares of Class B stock.

ARTICLE VIII: DISSOLUTION, MERGER, AND LIQUIDATION

8.1 Dissolution.

In accordance with Section 33-881 of the Connecticut General Statutes, the afrmative vote of majority of the members at a meeting at

which there is a quorum in accordance with Section 3.5 shall be required to dissolve the Cooperative.

8.2 Merger or Consolidation.

If the terms of a merger or consolidation of which this Cooperative is a party do not provide the members of this Cooperative with an

economic interest in the surviving entity that is substantially similar to the economic interest possessed by such members in this Cooper

tive immediately before such merger or consolidation, the value of the consideration received shall be divided among them in the same

manner as a comparable amount of net liquidation proceeds would be distributed pursuant to Section 8.3 of these Bylaws. This shall not

construed to prevent issuance of differing forms of consideration to different groups of members to the extent allowed by law.

8.3 Liquidation, Dissolution and Winding-Up.

Subject to the Certicate of Incorporation, in the event of any liquidation, dissolution or winding up of the affairs of this Cooperative,

whether voluntary or involuntary, all debts and liabilities of this Cooperative shall be paid rst according to their respective priorities. Th

remaining assets shall be distributed in the following manner and order of preference: rst to Class B stockholders in amount equal to th

par value of each holder’s Class B stock plus accrued unpaid dividends, if any, second holders of memberships in an amount equal to the

value of the consideration for which the memberships were issued, without priority and on a pro rata basis if necessary and any assets

remaining after the foregoing payments have been made shall be allocated among the allocation units in the manner as the Board, having

taken into consideration the origin of the amounts, shall determine to be reasonable and equitable. Amounts so allocated shall be paid to

current and former patrons of each such allocation unit in proportion to their patronage of the unit over the period as may be determin

to be equitable and practicable by the Board. The obligation to distribute shall be construed as a preexisting duty to distribute any patro

age sourced net gain realized in the winding up process to the maximum extent allowable by law.

ARTICLE IX: CONFLICT OF INTEREST

Any authorization by the Board or the members of a Director’s conicting interest transaction, as dened in Section 33-781 of the Con-

necticut General Statutes, shall be made in accordance with the provisions of Sections 33-781 to 33-785, inclusive, of the Connecticut

General Statutes and any supplemental procedures that the Board may adopt from time to time.

ARTICLE X: MISCELLANEOUS

10.1 Amendments.

These Bylaws may be amended or repealed in whole or in part by the Board or by the Members.

10.2 Conict with Other Documents.

In the event of any conict between these Bylaws and the laws of the State of Connecticut or the laws of the federal government relat-

ing to Subchapter T corporations, such laws shall prevail. Similarly, in the event of any conict between these Bylaws and the Certicate o

Incorporation, the provisions of the Certicate of Incorporation shall prevail.

10.3 Records.

In addition to the records required to be kept by Section 33-945 of the Connecticut General Statutes, there shall be kept correct and co

plete books and records of accounts and minutes of the proceedings of the incorporators, Board and committees of the Board. At intervof not more than twelve months the Cooperative shall prepare a balance sheet showing its nancial condition as of a date not more than

four months preceding such date. The balance sheet and a prot and loss statement shall be deposited at the principal ofce of the Co-

operative and be kept for at least ten years from such date. The treasurer and president shall have access to all records, including nancia

records, of the Cooperative. Members may inspect and copy records to the extent provided by Section 33-946 of the Connecticut Gene

Statutes, or by other applicable law.

10.4 Severance.

Should any provision of these Bylaws be invalid under law, then such provision shall be deemed stricken from these Bylaws and the rema

der shall be unaffected thereby. Should any provision be invalid due to its scope or breadth, then it shall be construed to be valid to the

scope or breadth permitted by law.
