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. Date of Meetings. Regular membership meetings shall occur annually, between the first day of April and the last day of June inclusive. The time and place of each regular meeting shall be set by the Board of Directors.
Section 2. Function of Membership Meetings. The function of the membership meetings shall be primarily:
(A) to enact legislation;
(B) to conduct elections;
(C) to discuss policies and problems of administration and management;
(D) to make recommendations and directives to the Board of Directors;
(E) to enact educational programs.
Section 3. Order of Business. The suggested order of business at regular membership meetings shall be as follows:
(A) Approval of minutes.
(B) Unfinished business.
(C) New business.
(D) Election as required by Bylaws.
(E) Reports of managers and presentation of financial statements.
(F) Reports of Board, officers, and committees.
Section 4. Special Meetings. Special membership meetings may be called by the Board of Directors, or by any shareholder in good standing possessing a written petition containing the signatures of not less than five percent (5%) of the shareholders in good standing. The petition shall state the purpose of such a proposed special meeting.
Section 5. Agenda.
(A) Agenda items for any membership meeting may be proposed by the Board of Directors, or by petition of any fifty (50) shareholders in good standing. Items so proposed at least ten (10) days before the mailing of notice for such meeting shall be placed on the agenda by the Secretary of the Cooperative and included in the notice sent to shareholders in good standing. A brief statement of the nature and purpose of each agenda item shall be included in such notice.
(B) The only matters that may be voted on at a membership meeting attended by less than one-third of the shareholders in good standing are those matters notice of the general nature of which was given, as described above.
Section 6. Notice. Written notice of all membership meetings, containing the time, place, and important agenda items, shall be mailed to all shareholders in good standing not less than twenty-one (21) days nor more than (90) days in advance of such meetings. The notice shall also, whenever practicable, be posted conspicuously in the store. In the case of special meetings, the purpose of the meeting shall be specified in such notice.
Section 7. Quorum.
(A) At any membership meeting the presence in person of two hundred fifty (250) shareholders in good standing, or such lesser number of shareholders in good standing as shall equal five percent (5%) of all shareholders in good standing, constitutes a quorum for the transaction of business.
(B) Adjournment. Once the meeting has achieved a quorum, it may continue to transact business, even if the number of shareholders in good standing present later drops below a quorum. When a quorum is no longer present, any action (except adjournment) must be approved by at least a majority of the number of shareholders in good standing required to make a quorum.
(C) Adjournment to Another Time or Place. A majority of those shareholders who are present and voting may adjourn the membership meeting to a specific time or place. Neither a quorum, nor a majority of a quorum, is required to pass this motion. At the re-convened meeting, the membership may conduct any business which could have been transacted at the original meeting. The date determining eligibility for quorum and voting at the re-convened meeting is the original meeting date.
(1) Notice of Adjourned Meeting. When a meeting is adjourned in this manner to a date 45 days or less after the original date, the Election Committee shall post a prominent notice in the store before the opening of business the next day, giving the time and place of the re-convened meeting, the business to be transacted, and the date determining eligibility for voting at that meeting. If the adjournment is to a date more than 45 days after the original date, a mailed notice is required as for a special membership meeting (Article VII, Section 6).
Section 8. Voting.
(A) A shareholder shall be entitled to vote at a membership meeting if he or she is in good standing at the time of the meeting.
(B) At any election or membership meeting the vote, in a signed writing, of any absent shareholder in good standing shall be counted provided he or she has been previously notified in writing of the exact resolution, motion or nomination, and this notification is attached to the written vote.
Section 9. Results. The results of any votes taken at a membership meeting shall be posted conspicuously in the store from the first through the fourteenth day after the meeting.
Section 1. Number of Directors; Election. The Board of Directors shall consist of nine directors. Each year three Directors shall be elected. Each director shall serve for a three-year term, or until a successor is installed. The term of Board members shall begin July 1.
Section 2. Eligibility.
(A) Any natural person who is a shareholder in good standing, and who has been a member in good standing for the whole of each of the nine months immediately previous to the first day of the election, and who is not disqualified by any other provision of these Bylaws, is eligible to serve on the Board of Directors.
(B) A maximum of two eligible shareholders who are paid employees of the Cooperative may serve as members of the Board (whether as two directors, two alternates, or one of each) at any one time, if they are not disqualified by any other provision of these Bylaws.
(C) The following are excluded from serving on the Cooperative's Board of Directors:
(1) The General Manager of the Cooperative.
(2) Members of the household or immediate family of the General Manager or of a director serving a concurrent term.
(3) Lessees of the Cooperative, including:
(a) Owners, lenders, employees, attorneys or real estate agents of a business operated by a lessee as a tenant of the Cooperative,
(b) Members of the household or immediate family of a lessee.
(D) Limitation on consecutive terms. No shareholder shall be eligible for election or appointment to the Board of Directors if such election or appointment would cause them to serve as a director for more than seven consecutive years. A shareholder who is ineligible for this reason, or who resigns or is removed from the Board, shall be and remain ineligible to serve as a director for one year from the date of last Board service.
(E) Before declaring candidacy for the Board or accepting nomination (Article IX, Sections 3 and 4) or appointment (Article VIII, Section 12), a shareholder is responsible for assuring that he or she will be eligible to serve on the Board.
Section 3. Alternate Members. Alternates are appointed only as follows: at each election of directors, the candidate having the highest number of votes after all vacancies on the Board of Directors have been filled shall be the first alternate, and the candidate with the next highest number of votes shall be the second alternate; or, in the absence of candidates described above in this section and in the event of vacancy, by a majority vote of the serving directors. Alternates shall serve until candidates elected in the next election of directors are installed. Alternate Board members can vote at Board meetings only as follows: the first alternate can participate in a vote only if no more than eight directors are present, and the second alternate can vote only if no more than eight other directors and alternates are present.
Section 4. Election of Officers. At the first Board meeting after new Board members take office, a President, Vice-President, Secretary and Treasurer shall be elected. Only a director who is not an interim director is eligible for election as President or Vice-President. Any shareholder in good standing is eligible for election as Treasurer or Secretary, and one person may hold both these offices. If an officer resigns or is removed from that office or from the Board, at the next Board meeting the directors shall elect a new officer as above.Section 5. Duties of Officers. In addition to signing or attesting to formal documents on behalf of the Cooperative as authorized by the Board, officers shall have such additional duties as are determined by the Board.
Section 6. Meetings, Quorum.
(A) Dates of Meetings. The Board shall have regular meetings at least eight times yearly. The dates of regular meetings shall be set by the Board; any three (3) directors may call a special meeting of the Board.
(B) Quorum. Five (5) directors shall constitute a quorum for official business.
(C) Notice. Each director and alternate shall be notified personally at least seven days prior to each meeting. Notice of the time, place and major agenda items shall be posted in the store at least seven days prior to the meeting.
(D) Resolution by Written Consent. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
(E) Adjournment. The meeting shall be adjourned when there are no longer five directors and alternates present, or when the Board votes to adjourn, whichever comes first.
Section 7. Suggested Order of Business. The suggested order of business at regular meetings of the directors is:
(A) Minutes of the preceding meeting.
(B) Unfinished business.
(C) Communications and bills.
(D) Reports from officers, managers, and committees.
(E) New business.
Section 8. Emergency Board Meetings. The Board may hold an emergency meeting, with at least 48 hours' notice to all Board members. At the emergency meeting, the Board shall be empowered to deal only with those matters which, because of their immediacy, cannot wait for a duly called meeting of the Board. Any three (3) directors may call such a meeting and personal, telephone, or telegraph notice shall be given to all Board members. Absence from an emergency meeting of the Board shall not be deemed an absence from a Board meeting.
Section 9. Committees. The President shall appoint, with the advice and consent of the Board, and from among the directors and the membership, such committees as the Board may deem necessary. The functions and duties of these committees shall be prescribed by the Board. For the purposes of these Bylaws, "committees" shall include "task forces".
Section 10. Resignation and removal. A director may resign from office upon notice to the President. A Director shall be presumed to have resigned if he or she: (i) has ceased to meet the qualifications as a director; (ii) has accumulated three absences from meetings of the Board within any one-year period; or (iii) has been declared of unsound mind by a final order of court or convicted of a felony. A director may be removed from office by action of a majority of members.
Section 11. Removal of Director by Membership. Any director or alternate may be removed from office by a vote of a majority of the shareholders in good standing who are present and voting at a duly held membership meeting at which a quorum is present, the notice of which includes such purpose; or by a duly held written ballot as defined in Article IX of these Bylaws.
Section 12. Vacancies
(A) Interim director. In the event of a vacancy among the directors, through death, resignation, incapacity or other cause, the remaining directors shall select an interim director to serve until an elected successor is installed. If the vacating director was a paid employee of the Cooperative when elected, the Board shall if possible appoint a paid employee as interim director. Otherwise, the Board shall select the alternate who received the highest number of votes. If there are no alternates, the Board may appoint an interim director from among the shareholders eligible to serve as directors, to serve under the same terms as interim directors appointed from among the alternates.
(B) Special election. If the remainder of the term of the vacating director is fourteen months or more, a special election shall begin at the next spring membership meeting to fill the seat for the remainder of the term. The interim director shall serve until the director so elected is installed. Notice of the election shall be included in the notice of that meeting, and shall be posted conspicuously in the store at the time the notice is mailed.
(C) Short term remaining. If the remainder of the term of the vacating director is less than fourteen months, the interim director shall serve for the remainder of that term.(D) Elections combined. If a special Board election is held, it and the regular election shall be combined and held as one election. If terms of office of different lengths are to be filled, the elected nominee receiving the fewest votes will fill the shorter term.(E) In all other respects special elections shall be conducted in the same manner as regular elections.
Section 13. The vote of a Board member who is also a paid employee of the Cooperative shall not be counted in matters relating to the employment of the General Manager.
Section 14. Conflicts of Interest. Directors shall be under an affirmative duty to disclose their actual or potential conflicts of interest in any matter under consideration by the Board or by a committee exercising any authority of the Board, and such interest shall be made a matter of record in the minutes of the meeting. A Director having such an interest may not participate in the decision of the matter. A transaction in which a director has a material financial interest shall be prohibited unless the transaction is just and reasonable to the Cooperative and is approved in good faith by a sufficient vote of disinterested directors or committee members. Any transaction involving a material financial interest shall be reported to members annually as required by section 12592 of the Consumer Cooperative Corporation Law.
Section 15. Indemnification. To the fullest extent permitted by law, this corporation shall indemnify its directors, officers, employees, and other persons described in Section 12377(a) of the California Cooperative Corporation Law, including persons formerly occupying any such position, against all expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred by them in connection with any "proceeding", as that term is used in said Section 12377(a), and including an action by or in the right of the corporation by reason of the fact that the person is or was a person described in that Section, provided such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the Cooperative and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. "Expenses" shall have the same meaning as in said Section.To the fullest extent permitted by law and except as otherwise determined by the board in a specific instance, expenses incurred by a person seeking indemnification in defending any "proceeding" shall be advanced by the corporation before final disposition of the proceeding upon receipt by the corporation of an undertaking by or on behalf of that person to repay such amount unless it is ultimately determined that the person is entitled to be indemnified by the corporation for those expenses.The corporation shall have power to purchase and maintain insurance to the full extent permitted by law on behalf of its officers, directors, employees, and other agents, against any liability asserted against or incurred by such persons in such capacity or arising out of the person's status as such.
Elections shall occur annually, in accordance with applicable California statutes in a manner prescribed by the Board and the Davis Food Co-op Election Policies.
Section 1. Referendum. In the event it shall be deemed advisable for any reason, the Board of Directors may conduct a vote on a specific issue or issues.
Section 2. Initiative.
(A) Subject to the provisions of these Bylaws, members shall have the right to submit initiatives, consisting of petitions signed by not less than five percent of shareholders in good standing which specify any lawful and proper purpose. The determination of what constitutes “five percent of shareholders in good standing” shall be made based on the first day of the month preceding the date on which petitions are submitted or filed.
(B) Initiatives that are timely and properly filed with the Board in accordance with the requirements of these Bylaws, including Article IX, Section 6(B), shall be presented to members for a vote at the nearest upcoming regularly-scheduled general election or, at the Board's discretion, by special election (i.e., balloting specially called for that purpose) within 12 months of its filing with, or submission to, the Board. Member initiatives that are not timely and properly filed with the Board in accordance with the requirements of these Bylaws, including Article IX, Section 6(B), shall be presented to the members for a vote at the regularly-scheduled general election following the nearest upcoming general election, or, at the Board's discretion, by special election within 12 months of such submission of its filing with, or submission to, the Board. Notwithstanding any other provision of this part, initiatives that are rejected by the Board pursuant to parts (D) and (E) of this Section, shall not be presented to members for a vote.
(C) In addition to any other applicable provision of these Bylaws, submission of an initiative shall be subject to the following procedure: prior to petitioning for the requisite number of signatures, and prior to submission of any initiative to the Board, the member(s) seeking to submit an initiative must first declare their intent to propose an initiative, in writing, to the Board or its designated agent(s), including providing a reasonably detailed description of the initiative sought. Thereafter, and in accordance with the provisions of these Bylaws governing petitioning activity (including coordination of the petitioning activity with the corporation's management), the member(s) seeking to submit the initiative in question shall have no more than 90 days to collect the requisite number of signatures. If the proposed initiative is properly submitted to the Board, and the requisite number of signatures is collected within 90 days, the complete initiative shall be filed with the Board, or its designated agent(s), for further action. For the purposes of these Bylaws, a petition shall be deemed “filed with” or “submitted to” the Board on the date it is received by the Board, or its designated agent(s), after the completion of all relevant procedures set forth in these Bylaws.
(D) Upon receiving an initiative, the Board shall review it and inform the member(s) who submitted it, within a reasonable time, and in writing, whether the initiative satisfies the requirements set forth in these Bylaws.
(1) If any initiative is not submitted to or filed with the Board pursuant to the procedures described above, or if the Board determines that the initiative is not lawful or proper as set forth in these Bylaws, the Board shall have the authority to reject said initiative, and refuse to send it to the members for a vote. If the Board does so, it shall notify the members(s) who submitted the initiative, in writing, of its decision and the stated reasons therefor; or alternatively, the Board may issue a resolution rejecting said initiative and stating the reasons therefor. Where the Board rejects an initiative because it is not submitted or filed pursuant to the procedures set forth in these Bylaws, the Board may, at its discretion, give the member(s) who submitted said initiative an opportunity to cure the defect(s), and resubmit the initiative within a time period specified by the Board. If the Board does not provide any opportunity to cure said defect(s), no further petitioning for such an initiative may take place for at least 12 months from the date of its rejection. Where the Board rejects an initiative on the grounds that it is unlawful and/or improper, an identical or substantially similar initiative may not be proposed, unless the Board is satisfied that any unlawfulness or impropriety has been cured. (2) If an initiative is submitted and filed properly pursuant to the procedures described above, and is lawful and proper as set forth in these Bylaws, the Board shall present the initiative to the member for a vote as described in this Section.
(3) Determinations of lawfulness and propriety shall be made by the Board, in good faith, after the exercise of reasonable diligence, without bias, and based upon the considerations set forth in this Section, as well as other considerations permitted by law or these Bylaws, which include business considerations made in the best interest of the corporation.
(E) The Board shall have discretion to determine whether any initiative submitted by member(s) has satisfied the procedures described in these Bylaws, and/or is lawful and proper as set forth in these Bylaws. For the purposes of this Section, an initiative shall be deemed “unlawful” if it actually violates, or poses a significant risk of violating, California or federal law, including (but not limited to) statues, codes, regulations, ordinances, policies, and/or common or case law. For the purposes of this Section, an initiative shall be deemed “improper” if, among other reasons:
(1) it poses a significant risk of depriving or restricting the authority and discretion of the Board, or its designated agent(s), in the management of the corporation's business and affairs, including its day-to-day operations;
(2) it poses a significant risk of subjecting the authority and discretion of the Board, or its designated agent(s), in the management and operation of the corporation to any third party or entity;
(3) its wording or mandates are so broad, ambiguous, or materially misleading that they do not provide practical specificity about the nature, scope, or effect of the proposed initiative;
(4) it would require an unreasonable expenditure of time, money, and resources to determine the corporation's obligations thereunder, or to implement its requirements;
(5) it poses a significant and disproportionate risk of substantial disruption to business operations, loss of capital, or reduction in shoppers and/or sales; or
(6) it is such a controversial or divisive issue that it creates a significant and disproportionate risk of permanent member, shopper, or employee loss and/or resignations.
(F) Nothing in this Section shall be construed to deprive the Board, or its designated agent(s), from properly exercising its authority and discretion to manage the corporation's business and affairs, including its day-to-day operations, as required by California or federal law.
(G) Notwithstanding any other provision in this Section, the Board may not, and nothing in this Section shall be construed to, deprive members of rights expressly reserved or granted to them by California or federal law.
Section 1. Management's Conduct. The manager or managers shall conduct the business of the Cooperative in conformity with the Articles of Incorporation, the Bylaws, and policies determined by the Board of Directors and the membership and in accordance with regulations and instructions of the Board of Directors as the administrative agency of the Cooperative.
Section 2. Reports to Board; Financial Report. A manager shall attend meetings of the Board of Directors and shall make reports as requested by the Board. He or she shall submit a monthly financial report to the Board.
Section 3. Report to Membership. A manager shall attend membership meetings and make such reports as are requested by the President or by action taken in membership meetings. At the membership meetings, he or she shall present a statement of operations and a balance sheet with copies available for any members.
Section 4. Employee Grievances. Any employee or representative of employees shall have the right to present any grievances directly to the Board of Directors when all other grievance procedures established by the Board have been exhausted.
Section 5. Suspension or Termination of Employees. The management must give an employee notice of intention of terminating that employee's services as specified in the personnel policy. For serious cause as specified in that policy, such as dishonesty or other immoral conduct, the Board or the management may immediately suspend without pay an employee. In either case, the employee shall have access to the grievance procedures as established by the Board and as specified by Section 4 of this Article.
Section 1. Proposal. Amendments to these Bylaws or the Articles of Incorporation may be proposed by the Board of Directors or by initiative as described in Article X, Section 2 of these Bylaws.
Section 2. Adoption of Amendment to Bylaws. Amendment to the Bylaws may be adopted by a duly conducted written ballot, or by a vote at a membership meeting duly called, the notice of which includes such purpose and the text of the proposed amendment. Amendments shall take effect as soon as approved, unless the ballot specifies a later date.
Section 3. Adoption of Amendment to Articles. The Articles of Incorporation may be amended in respect to a matter of a fundamental character only by the vote or written consent of the Board of Directors and of at least two thirds (2/3) of those shareholders in good standing voting in a duly conducted election as defined elsewhere in these Bylaws or at a duly called and conducted meeting of the membership.
Section 4. Notification of Amendments. Upon adoption of amendments to the Articles of Incorporation or Bylaws, a revised set of Articles or Bylaws shall be conspicuously posted in the store not later than seven (7) days following the final day of balloting. Copies shall be available for distribution to members not later than twenty-three (23) days thereafter.
Section 5. Correction of Bylaws. The Board of Directors may amend the Bylaws without a shareholder vote, only if the nine (9) directors unanimously agree that the word(s) proposed to be changed constitute one or more of the following:
(A) a typographical error;
(B) an error in grammar or spelling;
(C) a provision directly and clearly contrary to statute;
(D) a nonsensical statement of which the real intended import is clear;
(E) a re-numbering, re-arrangement, or re-titling of portions of the Bylaws, with no change in their meaning.
The same directors must further unanimously agree that the proposed correction is non-substantive and would in no way diminish the rights or privileges of members or shareholders.
Any such correction, and the reason for it, must be:
(1) posted with the agenda at least seven (7) days before the Board meeting where it is to be considered, and
(2) if passed, reported to the membership in the notice for the next succeeding membership meeting with a statement to the effect that shareholders will have a right to vote to repeal the amendment.
A vote at a membership meeting duly called, or a duly conducted written ballot of the shareholders, shall have the power to revoke any Board amendment.
This Cooperative may be dissolved pursuant to Sections 12630-12637of the California Consumer Co-operatives Corporations Code. Upon dissolution of the Cooperative its assets shall be distributed in the following manner and order: (i) by paying or making provision for payment of all liabilities and expenses of liquidation; [ii] by redeeming any retained patronage dividends which, if they cannot be paid in full, shall be paid in the order of the oldest outstanding amounts: (iii) by redeeming common shares, which, if they cannot be paid in full, shall be paid on a pro rata basis among all outstanding amounts; and (iv) by distributing any remaining assets to one or more cooperative organizations as determined at a meeting of the Directors.
A provision of the Davis Food Co-op Bylaws Article V, Section 4(B) (7) requires that persons who become or remain shareholders of the Co-op after the adoption of that provision thereby consent to include in their gross incomes for income tax purposes the amounts of any patronage refund paid to them by the Co-op, except to the extent that certain exceptions apply.
The first exception states that inclusion in taxable income is not required where a shareholder's purchases from the Co-op are attributable to “personal, living, or family items.” This exception would apply to “consumer shareholders” whose purchases were for personal or household consumption. It would not apply to consumer shareholders whose purchases were for use or resale in a trade or business, or for use in other income-producing activities, nor would it apply to business shareholders.
Thus, the Bylaw consent provision is of no significance to most consumer shareholders of the Co-op, and such shareholders are not required to include the patronage refund in their taxable incomes. Inclusion of the patronage refund in taxable income is required only of business shareholders and of consumer shareholders whose purchases were for business or income-producing purposes.