Article I. Identity
Article II. Purposes
Article III. Definitions
Article IV. Membership
Article V. Business Principles and Practices
Article VI. Government and Management
Article VII. Membership Meetings
Article VIII. Directors and Officers
Article IX. Nominations and Elections
Article X. Initiative and Referendum
Article XI. Management and Employees
Article XII. Amendments
Article XIII. Dissolution
Section 1. Name. The name of the Cooperative shall be the Davis Food Cooperative, Inc., referred to in these Bylaws as the Cooperative.
Section 2. Office and Place of Business. The principal office and place of business of the Cooperative shall be located in Yolo County, California.
Section 1. Business. The primary purpose of the Cooperative is to engage in the business of selling food and other household products to members, who shall be the ultimate consumers of these products.
Section 2. Other Objectives. Other objectives of the Cooperative shall be:
(A) Cooperative service for the benefit of members as consumers and the consuming public;
(B) Promotion of the cooperative ideal, and affiliation or cooperation with cooperative organizations in the local community, the state, the nation, and other countries;
(C) Conducting such other activities as will serve the economic, educational, recreational, and cultural welfare of its members and the public.
The following definitions apply to the within Bylaws:
Section 1. Person. The term "person" shall hereinafter refer to natural persons and artificial entities. The term "natural person" shall hereinafter refer to individuals (human beings) and shall exclude artificial entities.
Section 2. Shareholder. The term "shareholder" shall refer to those persons who have complied with Article IV, Section 2, parts (A) through (C) inclusive.
Section 3. Consumer shareholder. The term "consumer shareholder" shall refer to a person whose primary purchases from the Cooperative are for personal or household consumption.
Section 4. Business shareholder. The term "business shareholder" shall refer to a person whose primary purchases from the Cooperative are NOT for personal or household consumption.
Section 5. Member. The term "member" shall refer to any shareholder, or to a natural person in the household of a consumer shareholder.
Section 6. Shareholder in Good Standing. The term "shareholder in good standing" shall apply to those shareholders who have complied with Article IV, Section 3, parts (A) through (D) only.
Section 7. Working Shareholder in Good Standing. The term "working share holder in good standing" shall apply to those shareholders who have complied with Arti cle IV, Section 3, parts (A) through (F).
Section 8. Member in Good Standing. The term "member in good standing" shall apply to an individual in the household of any shareholder in good standing.
Section 9. Household. The term "household" shall refer to a consumer shareholder and any individuals who live, buy, and eat jointly in one dwelling with that shareholder. A single dwelling may contain more than one such household. A household may not consist of individuals from more than one dwelling.
Section 10. Required Shares. The term "required shares" shall refer to the shareholder's initial membership shares plus any shares assessed while s/he was a shareholder (Article IV, Section 7A, parts 2 & 3), less any shares from whose purchase s/he was exempted (Article IV, Section 7D).
Section 11. Proprietary Interest. A shareholder's proprietary interest in the Cooperative includes holdings of membership shares and any retained patronage distributions held by the Cooperative in the name of the shareholder. The amount of the proprietary interest in measured by its carrying value on the books of the Cooperative.
Section 1. Eligibility. Any person who is a resident of California and whose purpose in seeking membership is to facilitate access to the goods and services provided by the Cooperative is eligible to become a member of the Cooperative. The Cooperative shall not discriminate on the basis of age, gender, race, nationality, political opinion, sexual preference, physical or mental handicap, or religious belief.
Section 2. Becoming a Shareholder. A person may become a shareholder by completing the steps listed in this Section. Any person, whether an individual or an artificial entity, may become either a consumer shareholder or a business shareholder.
(A) The person shall make written application on a membership form as prescribed by the Board of Directors. This form shall include, but not be limited to, a statement that the applicant agrees to:
(1) comply with, and be bound by, the terms and conditions relating to membership contained in the Articles of Incorporation, the Bylaws and amendments thereto, and regulations enacted by the Board of Directors;
(2) acquire the maximum dollar amount of membership shares of stock in the Cooperative as described in Article IV Section 7 of these Bylaws.
(B) The person shall pay a non-refundable, non-transferable membership application fee, the amount to be determined by the Board of Directors.
(C) The person shall pay ten dollars ($10) as purchase of his or her initial membership shares. In case of doubtful eligibility, membership shall be subject to approval by the Board of Directors. Should the membership application be rejected, the $10 in initial membership shares will be refunded within two weeks of the date of the application.
Section 3. Membership Responsibilities and Restrictions.
(A) A shareholder shall hold all required shares.
(B) A shareholder or member shall promptly pay any fee or debt incurred to the Cooperative. The Cooperative shall notify the member when such a fee or debt is incurred. The Board of Directors shall determine and publish the circumstances under which fees may be levied.
(C) A shareholder or member shall comply with regulations, which further the purposes of the Cooperative and are in conformity with the Bylaws, as determined and published by the Board of Directors.
(D) While on Cooperative premises, a member shall act reasonably at all times. For the purposes of this part, unreasonable conduct shall include, but not be limited to, actual or threatened violence, battery, assault, or harassment towards any Cooperative employee, member, customer, or other individual lawfully permitted on Cooperative premises.
(E) Re-registration. Each shareholder shall re-register annually in a manner approved by the Board of Directors.
(F) In order to be a working shareholder in good standing, a shareholder shall comply with parts (A) through (D) above, and in addition, he or she, or such a person as he/she may designate, shall volunteer the standard number of hours per month determined by the Board of Directors or its delegates, unless the shareholder has been exempted as described below. The type of volunteer work acceptable for work credit shall be determined by the Board.
The Board of Directors or its delegates may only grant a reduction of, or exemption from, the assessment for the work requirement for working-shareholder status to individuals who fall into hardship categories established by the Board. A hardship is a condition that makes it unduly difficult, or impossible, for an individual to volunteer the required hours. The Board of Directors shall determine and publish criteria for such exemptions.
(G) The shareholder is responsible for all actions taken under the shareholder's membership.
(H) For any change in mailing address, in com position of the household, or in au thorized agents, each shareholder shall notify the Cooper ative in the manner de termined by the Board of Directors, within ten (10) days of such change.
(I) In any dispute between the Cooperative and any of its members or former members which cannot be resolved through informal negotiation, it shall be the policy of the Cooperative to prefer the use of mediation whereby an impartial mediator may facilitate negotiations between the parties and assist them in developing a mutually acceptable settlement. No party with a grievance against the other shall have recourse to litigation until the matter is submitted to mediation and attempted to be resolved in good faith.
Section 4. Copies of Bylaws. A copy of Bylaws Article V, Section 4(B)(7), together with the Explanation of Bylaw Consent Provision with Respect to Patronage Refunds shall be given to each shareholder. A copy of the Bylaws and Articles of Incorporation, as amended to date, shall be provided to any shareholder upon request.
Section 5. Membership Rights and Privileges.
(A) A shareholder may become a shareholder in good standing by complying with Article IV, Section 3, parts (A) through (F) inclusive, of these Bylaws.
(B) A shareholder in good standing may vote at membership meetings or by written ballot as specified in these Bylaws.
(C) A member in good standing may purchase goods through the Cooperative at member prices to be established by the Board of Directors. A working member in good standing may purchase goods through the Cooperative at working-member prices that are 5% lower than member prices. A business shareholder may only purchase goods through the Cooperative at these prices for the use and purposes of the business.
(D) No voting shareholder shall be entitled to more than one vote regardless of the number of shares owned.
(E) When a share or shares are owned by an artificial entity, the artificial entity shall be deemed a single shareholder for voting purposes. One individual duly authorized by such an entity may vote and otherwise act on behalf of the entity.
(F) A natural person who is a shareholder, and who is eligible as defined in Article VIII, Section 2, may serve on the Board of Directors.
(G) Shareholders are not entitled to receive any dividends with respect to their shareholdings.
(H) No member of this corporation may be held liable for the debts of the Cooperative beyond the amounts, if any, credited toward shares.
(I) All shareholders, whether consumer shareholders or business shareholders, constitute one class of membership as defined in the California Corporations Code.
(j) Each shareholder shall, upon request, be entitled to receive a financial report containing the information required under Section 12591 of the Consumer Cooperative Corporation Law.
Section 6. Rights and Privileges of Other Persons. Individuals over 62 years of age may purchase goods through the Cooperative at the same prices as working members in good standing of the Cooperative.
Section 7. Membership Shares.
(A) Purchase of Shares. Each share shall cost one dollar ($1) and shall be purchased in a manner determined by the Board of Directors.
(1) Maximum Dollar Amount of Shares Held By Any Member. At any time the Board shall have in effect a resolution setting the maximum dollar amount of membership shares that can be issued to or held by any member. The Board is permitted to make changes to the maximum dollar amount of membership shares either based on
(a) a change in the California law regulating share investments in consumer cooperatives, or
(b) if the Cooperative has obtained permission from the California Department of Corporations to sell additional shares.
[If neither has taken place, the maximum dollar amount of membership shares shall be increased by a minimum of $100 every ten years, beginning in January 2003.
(2) Voluntary purchase. A shareholder may voluntarily purchase shares at any time, except that no shareholder may hold more than the maximum dollar amount of membership shares, or more than 4% of the total shares issued and outstanding, whichever is less.
(3) Annual Assessed Shares. Each shareholder who owns fewer than the maximum dollar amount of membership shares shall purchase and continue to own $20 in additional shares each year until the maximum dollar amount of membership shares is reached. The assessed shares must be purchased on or before the last day of March, or another month if so designated by the Board, each year. This requirement to purchase assessed shares shall be in addition to, and not reduced by, any purchase of shares as a result of patronage refunds.
(4) Incentives for purchase of additional shares. The Board of Directors may provide incentives to attract the voluntary purchase of additional shares in addition to required shares. The Board shall publish its policy on such incentives.
(B) Shares Owned by a Business. Upon acceptance into membership and upon any assessment of shares, the Board of Directors may require a business shareholder to purchase more than the number of shares required of a consumer shareholder. The Board shall issue regulations on the number and manner of purchase of such required shares. Business shareholders must be notified of this requirement and regulations whenever they are required to buy shares.
(C) The due dates for successive share assessments shall be separated by at least ninety days.
(D) Share purchase exemption.
(1) The Board of Directors may exempt a shareholder from the requirement to purchase additional required shares:
(a) if the shareholder has first applied for membership and purchased his or her initial membership shares within ninety (90) days before the deadline for the purchase of the required shares;
(b) if the shareholder has purchased and continues to own a greater number of shares than, or the same number as, he or she would have been required to own by the deadline;
(c) if the person was not in good standing, or not a shareholder, for nine consecutive months.
(2) The Board of Directors may exempt a shareholder from the requirement to purchase additional shares, or may grant an extension of the deadline by which additional shares must be purchased if a shareholder's good standing is to be retained, upon written petition of the shareholder, in cases of extreme financial need. The Board shall publish its policy on the criteria for such exemptions or extensions.
(E) Notice of Share Assessment. Written notice shall be mailed to shareholders of the requirement to purchase additional shares as follows:
(1) Mailing date. Notices of share assessment shall be mailed at least thirty (30) days before the date by which such shares must be purchased if the shareholder is to retain his/her good standing.
(2) Who shall receive notice. A notice shall be mailed to each shareholder who is required to buy such shares as determined on the first of the month preceding the month in which notice is mailed.
(3) This notice shall contain:
(a) a statement of the procedure for purchasing shares;
(b) notice of the date by which such shares must be purchased;
(c) notice that the shareholder's good standing will be suspended on that date if the required shares have not been purchased and exemption has not been granted;
(d) a statement that the Board of Directors may grant exemption from the requirement to purchase additional shares in cases of extreme financial need, and an explanation of how a shareholder may request such exemption.
(F) Share certificates shall only be issued for fully paid shares.
Section 8. Transfer. Except as described in Section 10 below, shares are non-transferable except within the household or immediate family of a shareholder, and then only on approval of the Board of Directors, or its duly authorized representative, after written request for such transfer.
Section 9. Withdrawal. Shareholders may withdraw, partially or wholly, amounts credited toward their purchase of shares, subject to the following provisions:
(A) Shareholders must submit written notice to the Board of intent to withdraw their share credit.
(B) Complete withdrawal of share credit necessitates resignation from membership.
(C) Resignation of membership may be accomplished by filing with the Board the appropriate form. Resignation is effective when approved by the Board.
(D) Withdrawal below the required level of share purchase is permitted only for reasons of extreme need and only if at least ten dollars ($10) in shares is retained.
(E) Shares shall be redeemed following voluntary termination of membership when replacement capital is provided by other members.
(F) Re-joining. A shareholder who resigns membership, but re-joins the Cooperative within one year, must re-invest the same amount in shares as was withdrawn. The shareholder must also purchase the shares required by any assessment made since the date of resignation.
Section 10. Divorce or Separation.
(A) Upon termination of a common household by a married couple by dissolution of marriage, legal separation or actual separation, all community-property shares shall, unless both husband and wife direct otherwise, be divided equally between husband and wife, to be held by each as his or her separate property. If married shareholders living in separate households direct the Cooperative not to divide their shares, they must designate one of their households as the "buying household" and only the members of that household may exercise the privileges of household members under Article IV, Section 5C of these Bylaws.
(B) Upon dissolution of an artificial entity that is a shareholder, all shares purchased during the life of the entity shall, unless the designated voter of the entity directs otherwise, be divided equally among the participants, owners, or agents of the entity according to the Cooperative's records.
(C) Any non-shareholder receiving at least $10 in shares under the provisions of this section shall be an individual shareholder beginning with the same standing as the original shareholder's standing on the date of the transfer.
(D) Any non-shareholder receiving less than $10 in shares, under the provisions of this section, may become a new shareholder by paying to the Cooperative the remaining amount necessary to make $10. If this is not done within one (1) year, the share credit will be recalled by the Board and the option of membership by this means will be terminated.
Section 11. Inactive Status. A member who becomes delinquent in meeting his or her share purchase obligation to an extent determined by the Board, or who fails to patronize the Co-op for a period of time determined by the Board, shall, no sooner than thirty days after delivery of written notification, be placed into inactive status. His or her participation rights shall then be suspended. A member in inactive status may attain good standing only upon full correction of all delinquencies. References herein to the rights and entitlements of members shall be understood to refer only to members in good standing.
(A) Expulsion, Suspension, or Termination for Cause. Membership may be terminated, or members may be expelled or terminated for cause by the Board, but only when such expulsion, suspension, or termination is done in good faith. Any expulsion, suspension, or termination shall conform to the following procedures: (i) the member shall be given at least 15 days prior notice of the proposed expulsion, suspension, or termination and the reasons therefor by first class or registered mail; (ii) notice under this Section shall be given by first class or registered mail to the member's last known address as shown on the corporation's records; and (iii) the member shall have the opportunity to be heard by the Board, orally or in writing, not less than five days before the effective date of the proposed expulsion, suspension, or termination. Nothing in this Section shall be deemed to limit the ability of the Cooperative to prohibit or restrict the presence of any individual from cooperative premises for health and safety reasons, as set forth in part (C) of this Section.
(B) Definition of Cause. For purposes of this Section, cause shall include, but not be limited to, (i) ineligibility for membership, (ii) intentional or repeated violation of these bylaws, (iii) willful obstruction of any lawful purpose or activity of the Cooperative, (iv) unreasonable conduct, as defined by Article IV, Section 3, part (D) above. Upon termination of membership for any reason, all rights and interests in the Cooperative shall cease except for rights to return of capital funds pursuant to these Bylaws.
(C) Limiting access to Cooperative premises for health and safety reasons. Notwithstanding any other provision of these bylaws, the Cooperative shall have the right, at its sole discretion, to temporarily prohibit any individual from entering Cooperative premises, or limit the access of any individual to the premises to any extent, pending any procedures set forth in part (A) of this section, if the presence of such an individual creates a health and safety concern for any cooperative employee, a member, customer, or other individual lawfully permitted on Cooperative premises. In for the purposes of this part, we “safety concerns” shall include, but not be limited to, any conduct that the cooperative deems actual or threatened violence, and battery, assault, hostility, or harassment towards any other Cooperative employee, member, customer, or other individuals lawfully permitted on Cooperative premises. Similarly, for the purposes of this part, “health concerns” shall include conditions that pose an immediate or ongoing health risk to other Cooperative employees, members, customers, or other individuals lawfully permitted on Cooperative premises.
Section 13. Terms of Share Redemption. Shares shall be redeemable in all circumstances at the lesser of their carrying value on the books of the Cooperative or their net book value, less a reasonable processing fee, if any, as determined by the Board. Redemption proceeds shall be subject to offset by amounts due and payable to the Cooperative by the member. No redemption shall be made when such payment would impair the ability of the Cooperative to meet its other obligations as they become due.
Section 14. Gifts of Proprietary Interests. A member may make a gift to the Cooperative of any proprietary interest by affirmatively so communicating to the Cooperative. A proprietary interest of member shall also be transferred to the Cooperative if the following procedures have been complied with: (i) at any time after such interest would otherwise escheat to the state, the Cooperative shall provide at least sixty days prior notice of the proposed transfer to the Cooperative by first-class or second-class mail to the last address of the member shown on the Cooperative's records and by publication in a newspaper of the general circulation in the county in which the Cooperative has its principal office; and (ii) no written notice objecting to the proposed transfer is received by the Cooperative from the affected member prior to the date of the proposed transfer. A member who fails to provide written notice objecting to the proposed transfer shall be deemed to have made a gift of such interest to the Cooperative as of the effective date of the transfer.
Section 1. Governing Principles.
The business of the Cooperative shall be conducted according to the following principles:
(A) Democratic control. There shall be one vote for each shareholder in good standing. No voting by proxy is permitted.
(B) Open membership. Membership is open to all as described in Article IV Section 1.
(C) No dividends on capital. No dividends shall be declared or paid with respect to membership shares.
(D) Patronage refunds based on purchases. The distribution of all patronage refunds shall be based on the price paid, including any discount, for purchases made by members in good standing.
(E) Education and promotion. Funds shall be provided for education and promotion.
(F) Neutrality. The Cooperative shall not advocate religious beliefs and shall not support any candidate for political office.
(G) Rules of Procedure. Roberts' Rules of Order shall govern membership meetings and meetings of the Board of Directors of this Cooperative.
(H) Open meetings. All meetings of the Cooperative, and of its Board of Directors, staff and committees, shall be open to all members in good standing, except in special circumstances defined in published Board regulations. The public minutes of the Cooperative shall state that such a closed meeting occurred and shall specify the regulation under which it was closed.
(I) Official Action. Unless a higher vote is required by law or by these bylaws, official action requires the vote of a majority of the voters present and voting in any meeting or election, provided such vote also constitutes at least a majority of the required quorum.
Section 2. Fiscal Year. The fiscal year shall be determined by the Board of Directors.
Section 3. Annual Audit, Records, and Share Register.
(A) Audit and financial report.
(1) An annual audit of accounts shall be made by an auditor designated by the Board of Directors, and a complete financial report, including the report of the auditor, shall be available to members by February 1st of the succeeding year.
(2) Notice of capital impairment. The membership shall be notified within sixty (60) days if the capital of the Cooperative becomes impaired. All prospective shareholders shall also be notified of the impairment for the duration of the impairment. The notice shall be conspicuously featured in a regular or special newsletter available to members.
(B) Permanent records. The books, accounts, and records of the Cooperative, including the minutes of all Board meetings, membership meetings, and committee meetings, shall, subject to the limitations under California law, be made available for inspection by any member of the Cooperative at reasonable hours and upon two (2) days notice.
(C) Share register. There shall be kept and maintained at the principal office of the Cooperative a complete share register showing the names of the shareholders and their latest known addresses; the numbers and dates of the share certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. Notifications of meetings and any other items of importance shall be sent to the shareholders in good standing at their addresses as shown on such records.
Section 4. Net Surplus Savings and Earnings. At the end of each fiscal year the net surplus savings and earnings of the Cooperative (hereafter referred to as net earnings) shall be computed and applied as follows:
(A) Computation of net earnings. For purposes of this article the net earnings of the Cooperative shall be based on the annual financial report and computed, in accordance with generally accepted accounting practices, as follows:
(1) without regard to patronage refunds;
(2) before provisions for federal and state income taxes; and
(3) after allocating to the Reserve fund the net amount, after federal and state income taxes, of any gains or losses resulting from the sale or exchange of land, buildings, or equipment.
(B) Application of net earnings. The net earnings shall be applied as follows:
(1) Capital shall be restored to the extent of any impairment thereof;
(2) The Board may set aside reasonable reserves for necessary business purposes;
(3) The net earnings of the Cooperative for each fiscal year, to the extent attributable to the patronage of members in good standing, shall be allocated and distributed among such members as patronage refunds in proportion to their patronage. In determining and allocating net earnings, the Cooperative shall use a single allocation unit except to the extent that it may subsequently engage in any new and distinct line of business;
(4) Members shall retain the right to waive in whole or in part, by vote of members at a meeting, any patronage refunds to which they may be entitled;
(5) Patronage dividends shall be paid in the manner and to the extent required by the Internal Revenue Code and Treasury Department regulations to qualify for income tax deductions for the Cooperative. A qualified written notice of allocation shall be mailed to those eligible within eight-and-a-half months of the end of the fiscal year, including payment in cash of 20% or more, as determined by the Board. Any amounts not paid in cash will be credited as payment on additional shares until a shareholder owns the maximum dollar amount of membership shares, after which all amounts will be paid in cash;
(6) Any allocations of such a nominal amount as not to justify the expenses of distribution may, as determined by the Board, be excluded from distribution provided that they are not then or later distributed to other members;
(7) Persons who become or remain shareholders of this Cooperative after the adoption of this Bylaw thereby consent to include in their gross income for federal income tax purposes the stated dollar amount of any qualified written notice of allocation in the taxable year in which such notice is received, except to the extent that such a patronage refund is not income to the shareholder because: (a) it is attributable to the purchase of personal, living, or family items, or (b) it should properly be treated as an adjustment to the tax basis of property previously purchased. All terms used herein shall have the same meaning as under the Internal Revenue Code.
(8) A portion of patronage refunds, not to exceed eighty percent of the allocation, may be retained for the reasonable capital needs of the Cooperative. Such retentions shall be credited to revolving capital accounts in the names of recipient members, shall accrue no monetary return on investment, shall not be transferable, and shall be in whole dollars only. They shall be redeemed when determined by the Board to be no longer needed for capital purposes. At that time they shall be redeemed in the order of the oldest outstanding amounts and on a pro rata basis among such amounts. Retained amounts may also be redeemed under compelling circumstances as determined by the Board. Retained amounts shall be subject at all times to being offset by amounts otherwise due and payable to the Cooperative.
Section 5. Bonds. Fidelity bonds may be required of the Treasurer and of managers and employees as the Board deems advisable.
Section 6. Loans Involving Mortgages. The Board shall not accept any loan involving a mortgage on any of the property of the Cooperative which would increase aggregate loans for the fiscal year above the Board Loan Limit except as authorized at a membership meeting or by a mail ballot of at least fourteen (14) days duration, with previous notice of the proposed plan. The Board Loan Limit is $300,000 in Fiscal Year 1992-93 and shall be adjusted upward each fiscal year by five percent (5%).
Section 1. Membership Control. The control of the Cooperative shall be vested in the membership through their election of the Board of Directors and through their voting on amendments to the Bylaws and on other matters as provided in these Bylaws. Under the Cooperative Corporations Code, the Board of Directors is the body that is held directly responsible for the corporation.
Section 2. Administration by Board of Directors. The management of the Cooperative is vested in the Board of Directors. The Board may delegate to other persons such power and duties not inconsistent with these Bylaws.
Section 3. Managers. The Board of Directors may delegate the day-to-day responsibility of managing the Cooperative to managers of their choice. These managers shall make written reports to the Board at least once a month, as the Board specifies.
Section 4. Delegates to Other Organizations. Delegates to any society of which this Cooperative is a member shall be appointed by the Board of Directors for an appropriate term. Such delegates serve at the pleasure of the Board. They shall make regular written reports to the Board, including a record of any votes cast and actions taken on behalf of this Cooperative.
Article VII. Membership Meetings
Article VIII. Directors and Officers
Article IX. Nominations and Elections
Article X. Initiative and Referendum
Article XI. Management and Employees
Article XII. Amendments
Article XIII. Dissolution