The FDC would like to thank Gregory Sampson of Robinson & Cole, LLP for his generous donation of both time and knowledge and for all his help revising our By-Laws.
BY-LAWS
OF
FARM DIRECT CO-OP, INC.
EFFECTIVE MARCH 24, 2013
ARTICLE I – ORGANIZATION
Section 1.1 -Name and Location. The name of the corporation shall be Farm Direct Co-op (hereinafter “the Co-op”). The mailing address of the Co-op shall be in Marblehead, Massachusetts unless the Board of Directors (the “Board”) changes the mailing address by filing a certificate with the Secretary of the Commonwealth.
Section 1.2 -Cooperative Principles. The Co-op shall be operated in accordance with cooperative principles adopted by the International Co-operative Alliance, namely: (i) voluntary and open membership without arbitrary discrimination; (ii) democratic governance by Members with equal voting rights among Members and opportunity for participation in setting policies and making decisions; (iii) economic participation by Members with Members equitably contributing to and democratically controlling the capital of the Co-op, and with earnings being equitably applied to the benefit of Members, to the development needs of the Co-op, and to the provision and extension of common services; (iv) autonomy and independence of the Co-op as a self-help organization controlled by its Members; (v) educating and training Members, directors, managers and employees so they can contribute effectively to the development of the Co-op, and informing the general public about the nature and benefits of cooperation; (vi) strengthening the cooperative movement by working with other cooperative organizations at all levels; and (vii) working for sustainable development of the Co-op’s community.
Section 1.3 -Fiscal Year. The fiscal year of the Co-op shall coincide with the calendar year unless the Board changes the fiscal year by filing a certificate with the Secretary of the Commonwealth.
Article ii - membership
Section 2.1 -Eligibility and Admission. There shall be one class of Members of the Co-op (the “Members”). Subject to availability of Membership Interests (as hereinafter defined), membership in the Co-op shall be voluntary and open on a single or family basis, or other basis as determined by the Board, to persons who desire to use the services of the Co-op and are willing to accept the responsibilities of membership. Applicants will be admitted to membership upon submitting required information and paying the required membership fee unless waived in whole or in part by the Co-op.
Section 2.2 -Rights and Obligations. The Members shall have and exercise all rights and powers conferred upon Members, generally, pursuant to Chapter 180 of the Massachusetts General Laws and such other powers and rights as are vested in them pursuant to the Articles of Organization of the Co-op or these By-laws, including, without limitation, the right to elect the directors from time to time subject to and in accordance with Paragraph 4.3 below. Further, each Member shall be entitled to make purchases from the Co-op through the purchase of shares (“Membership Interests”) on terms generally available to Members, and to participate in the governance of the Co-op as set forth in these By-laws. Each Member shall pay a membership fee on an annual basis as determined by the Board unless waived in whole or in part by the Board or its duly authorized representative (e.g., the Executive Director or a Committee). Members shall have the right to receive a copy of these By-laws, and shall be provided reasonably adequate and timely information as to the organizational and financial affairs of the Co-op. Members shall have access to the books and records of the Co-op during usual business hours for any proper purpose related to their legitimate interests as Members, provided that the Board may impose reasonable restrictions or make alternative arrangements that it considers necessary to protect confidential information.
Section 2.3 -Settlement of Disputes. In any dispute between the Co-op and any of its Members or former Members that cannot be resolved through informal negotiation, it shall be the policy of the Co-op 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. Neither 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 2.4 -Nontransferability. Membership rights and interests may not be transferred except to the Co-op. Any attempted transfer contrary to this section shall be wholly void and shall confer no rights on the intended transferee.
Section 2.5 -Termination. Membership may be terminated voluntarily by a Member at any time upon notice to the Co-op. Membership shall be automatically terminated upon failure to pay the membership fee for the current year by the date of the annual meeting occurring in such year. Membership may be terminated involuntarily only for cause by the Board, provided the accused Member is first accorded an adequate opportunity to respond to the charges in person or in writing. Upon termination of membership, all rights and interests in the Co-op shall cease.
Article iii - Meeting of members
Section 3.1 -Annual Meeting. The annual meeting of Members shall be held at such time and place as shall be determined from time to time by the Board. The purposes of the meeting shall be to hear reports on the operations and finances of the Co-op, to elect directors and to conduct such other business as may properly come before the meeting.
Section 3.2 -Special Meetings. Special meetings of the Members may be held at any time and at any place within any of the municipalities served by the Co-op. Special meetings of the Members may be called by one-third (1/3) of the directors or upon written application of one-third (1/3) of Members, upon seven (7) days prior notice, which notice may be given through any form of electronic communication permitted by law. Any such notice for a special meeting must state the purpose or purposes of the proposed meeting and business conducted at such meeting will be limited to the purposes stated in such notice.
Section 3.3 -Place of Meetings. The time and place of all meetings shall be determined by the Board or, if the Board fails to do so, by the Secretary. Meetings shall be at a place convenient to Members and need not be at the mailing address of the Co-op.
Section 3.4 -Notice. Written notice of the time and place, and in the case of a special meeting the purpose or purposes of the meeting, shall be given not less than ten (10) and not more than thirty (30) days before the meeting to each Member entitled to vote thereat and to each other Member who, by law, by the Articles of Organization or by these By-laws, is entitled to notice.
Section 3.5 -Quorum and Voting. The presence in person, or, when authorized, by absentee ballot, of ten percent (10%) of the Members of the Co-op shall constitute a quorum for the transaction of business at any meeting of Members, except when a larger quorum is required by law, by the Articles of Organization or by these By-laws. Any meeting may be adjourned by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. Each Member shall have one and only one vote on each issue submitted to a vote of Members, regardless of the type of membership (i.e., single, family or other). Unless otherwise required by law or by these By-laws, issues shall be decided by a simple majority of votes cast except where one or more choices are to be made from several alternatives, in which case the alternative(s) receiving the most votes shall be considered approved. Voting by proxy shall not be permitted. Meetings of Members shall be conducted generally in accordance with reasonable and accepted rules of parliamentary procedure.
Section 3.6 -Record Dates. Unless otherwise determined by the Board, only persons who are Members at the close of business on the business day immediately preceding the date of distribution of notices shall be entitled to notice of any meeting of Members and to vote at such meeting.
Section 3.7 -Absentee Ballots. The Board may authorize balloting by mail or electronic means (e.g., internet based balloting) with respect to any issue to be submitted to a vote of Members. Ballots, together with a brief statement of the qualifications of each candidate for available director positions or the text or a full description of any other issue for decision, shall be included in the notice of the meeting to which they relate. Ballots must be received by the Co-op no later than the date specified in the notice. For purposes of determining a quorum, absentee ballots shall be counted together with persons present at the meeting. When used in lieu of a meeting of Members, voting by absentee ballot shall be considered the equivalent of a meeting of Members, and the results of the balloting shall be reported to Members by mail (electronic mail or post).
Section 3.8 -Issues Submitted by Members. Notices of a meeting of Members shall include any issues submitted by petition of ten percent (10%) of Members. Petitions must be received at the mailing address of the Co-op not less than sixty (60) days before the date of the meeting.
Article iv - board of directors
Section 4.1 -Powers and Duties. Except as to matters reserved to Members by law or by these By-laws, the business and affairs of the Co-op shall be directed and controlled by the Board, who shall have and may exercise all the powers of the Co-op. The duties of the Board include to uphold the principles upon which the Co-op is founded, to act as stewards of the organization in all respects, and to provide oversight of the Co-op’s relationships and activities. The Board shall be responsible for maintaining the solvency of the Co-op, which shall include the approval of budgets, setting annual dues, and the acceptance of financial donations to the Co-op from individuals and organizations.
Section 4.2 -Number and Qualifications. The Board shall consist of not less than seven (7) nor more than fifteen (15) directors. All directors shall be Members and shall not have any overriding conflict of interest with the Co-op. Employees shall not be eligible to serve as directors.
Section 4.3 -Nominations, Election and Terms. The Board shall adopt a policy (the “Election Policy”) governing the election of directors, which directors shall be elected by a vote of the membership, as further specified in the Election Policy of the Co-op. Any Member in good standing is eligible to serve on the Board. Terms of directors shall be so staggered that one-third of the terms or as nearly so as may be practicable shall expire in each year. Directors shall normally be elected for terms of three years, although the Board may establish that some directors be elected for one or two year terms to facilitate term staggering or for any other reason. Directors shall hold office until their successors are elected or until their terms are terminated sooner in accordance with these By-laws. The duration for an individual to serve as a director is limited to two (2) consecutive terms. At least one (1) year must pass before an individual may be re-elected to the Board and may serve once again for a maximum period of two (2) terms. For purposes of this Paragraph 4.3, any term of service of one (1) year or greater on the Board shall count toward the limit of two (2) consecutive terms.
Section 4.4 -Standards of Conduct. Directors and officers shall be responsible at all times for discharging their duties in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances and in a manner that they reasonably believe to be in the best interests of the Co-op.
Section 4.5 -Conflicts of Interest. Directors and officers shall be under an affirmative duty to disclose their direct or indirect conflicts of interest, either actual or potential, 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. Directors having such an interest shall not be permitted to participate in the discussion or decision of the matter, although they may be permitted to make a statement with regard to the matter. A transaction in which a director has an interest shall be prohibited unless the transaction is fair to the Co-op and is approved by no less than a two-thirds majority of all disinterested directors.
Section 4.6 -Termination. The term of office of a director may be terminated prior to its expiration in any of the following ways: (i) voluntarily by a director upon notice to the Co-op; (ii) automatically upon termination of membership in the Co-op; (iii) with or without cause by action at a meeting of Members; and (iv) with cause by the Board. In the case of any removal for cause, the accused director shall be provided reasonable notice of the charges and the opportunity to respond in person or in writing. Failure of a Director to attend at least fifty percent (50%) of the Board meetings in a twelve (12) month period may result in removal from the Board.
Section 4.7 -Vacancies. A vacancy among directors occurring between annual meetings may be filled by the Board. Any such vacancy that results in less than seven remaining directors shall be filled by the Board. Directors so appointed shall serve until the next regularly scheduled election of directors.
ARTICLE V – MEETINGS OF THE BOARD
Section 5.1 -Convening. Regular meetings of the Board may be held without notice at such places and at such times as the Board may from time to time determine. A regular meeting of the Board may be held without notice immediately following and at the same place as the annual meeting of the Members. The Board shall meet at least four times per year at whatever time and place it selects. Meeting via conference calls and voting by mail or electronic means are permitted in appropriate circumstances as determined by the Board and to the extent permitted by law.
Section 5.2 -Notice. Meetings called by the Board shall require no further notice to directors than the decision of the Board. All other meetings shall require written or oral notice to all directors. Written notice shall be mailed (by electronic mail or post) or otherwise delivered not less than seven days before the date of the meeting, and oral notices shall be given in person or by telephone not less than three days before the date of the meeting.
Section 5.3 -Quorum. The presence in person at the opening of the meeting of a majority of directors shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board.
Section 5.4 -Decision Making. When a quorum is present at any meeting, a majority of the directors present and voting shall decide any question, including election of officers, unless otherwise provided by law, by the Articles of Organization or by these By-laws. Notwithstanding the foregoing, decisions involving monetary transactions equal to or greater than $20,000 shall require approval by a majority of the directors then in office.
Section 5.5 -Waiver of Notice. Notice of a meeting of the Board may be waived in writing at any time before or after the meeting for which notice is required. The attendance of a director at a meeting shall constitute a waiver of notice of the meeting except where the person attends for the express purpose of objecting to the transaction of business because the meeting is not lawfully convened.
Section 5.6 -Action without a Meeting. Any action required or permitted to be taken at a meeting of the Board may be taken without a meeting if a written consent to the action is approved by a majority of the directors and filed with the minutes of meetings.
Section 5.7 -Referendum. A decision of, or issue before, the Board shall be referred to a meeting of Members for ratification or decision if, in the opinion of a majority of the directors then present, such matter is of vital importance to the Co-op. Such meeting of Members shall be called as soon as practicable. Any such decision of the Board shall stand until modified by Members. Rejection or modification by Members shall not impair rights previously acquired by outside parties.
Section 5.8 -Open Meetings. Meetings of the Board and of all committees shall be open to all Members and employees of the Co-op. Sessions of a meeting may be closed only as to issues of a particularly sensitive nature. Such closed session shall be for purposes of discussion only and no decisions shall be made in closed session.
ARTICLE VI – OFFICERS
Section 6.1 -Designation. The officers of the Co-op shall consist of President, Vice-President, Treasurer, Secretary, and such other officers or assistant officers as may be determined by the Board.
Section 6.2 -Qualifications, Election, and Term. Officers shall be elected by the Board. The President and Treasurer shall be directors. The Secretary shall be a resident of Massachusetts unless the Co-op has a duly appointed resident agent. Officers shall serve for terms of one year or until election of their successors.
Section 6.3 -Duties. Officers shall, as authorized by the Board, sign or attest to formal documents on behalf of the Co-op, and have the following duties and such additional duties as is determined by the Board:
- President: The President shall preside over meetings of the Board and Members, shall coordinate the activities of the Board, shall facilitate effective communications with the general manager, and shall present a report to the annual meeting on the organizational affairs of the Co-op. The President shall be the chief executive officer of the Co-op and, subject to the control of the Board,shall have general charge and supervision of the affairs of the Co-op and all powers of a president of a corporation pursuant to M.G.L. c. 180, and shall have such other powers and duties as may be determined by the Board. The President may execute documents in the title of “President” of the Co-op.
- Treasurer: The Treasurer shall be the chief financial officer and the chief accounting officer of the Co-op. He or she shall be in charge of its financial affairs, funds, securities and valuable papers and shall keep full and accurate records thereof. He or she shall also be in charge of its books of account and accounting records and of its accounting procedures. It shall be the duty of the Treasurer to present a financial statement to the Board on no less than a quarterly basis, to prepare an annual budget for approval by the Board, and to prepare or oversee all filings required by the Commonwealth of Massachusetts, the Internal Revenue Service and other federal or state agencies.
- Secretary: The Secretary shall have all of the powers of a clerk of a corporation pursuant to M.G.L. c.180. The Secretary shall record and maintain records of all proceedings of the Members and Board in a book or series of books kept for that purpose, which book or books shall be kept within the Commonwealth at the mailing address of the Co-op or at the office of its Secretary or of its resident agent (if any) and shall be open at all reasonable times to the inspection of any Member. Such book or books shall also contain the records of all meetings of incorporators and the originals, or attested copies, of the Articles of Organization and the By-laws and the names of all Members and Board and the address of each. The Secretary shall maintain the Co-op’s calendar, which will include the dates critical for forthcoming Co-op elections, as well as Board meeting dates, which shall be held no less than quarterly. The Secretary shall record attendance at Board meetings, provide minutes to all directors and attendees, and keep a record of all decisions made by the Board. In the absence of the Secretary at a Board meeting, the directors attending the Board meeting shall select from among all the Board members present a temporary Secretary to ensure that the above requirements are fulfilled. If the Secretary is absent from any meeting of Members or Board, a Temporary Secretary chosen at the meeting shall exercise the duties of the Secretary at the meeting.
Vice President: The Vice President shall have all of the powers of a vice president of a corporation pursuant to M.G.L. c. 180 and shall assume the powers and duties of the President whenever the President is absent from any meeting of the Co-op or the Board or is unable to act in his or her capacity as President.
Section 6.4 –Other Officers. The Board may from time to time appoint other officers of the Co-op, who shall have such duties and powers as may be designated by the Board.
Section 6.5 -Resignations. Any officer may resign at any time by delivering his or her resignation in writing to the President, if any, or the Secretary or to the Co-op at its mailing address. Such resignation shall be effective upon receipt unless specified to be effective at some other time.
Section 6.6 – Removals. An officer may be removed with or without cause by a two-thirds vote of the Board. A director or officer may be removed for cause only after reasonable notice and opportunity to be heard before the Board, which hearing may be waived.
Section 6.7 -No Right to Compensation. No officer resigning, and (except where a right to receive compensation shall be expressly provided in a duly authorized written agreement with the Co-op) no officer removed, shall have any right to any compensation as such officer for any period following his or her resignation or removal, or any right to damages on account of such removal, whether his or her compensation be by the month or by the year or otherwise; unless the Board shall in its discretion provide for compensation.
Section 6.8 -Appointment of Executive Director. The Board may appoint and employ a salaried staff head who shall have the title of Executive Director or such other title as the Board determines and whose terms and conditions of employment and authority to act on behalf of the Co-op shall be as specified by the Board.
ARTICLE VII – MEMBER COMMITTEES
Section 7.1 -Purposes. The Board may establish Committees of Members of the Co-op to address such projects and topics as the Board may determine from time to time. The Board may adopt resolutions that establish the purposes and objectives of specified Member committees, the scope of work and other terms of reference, the committee’s duration, which may be indefinite, and may appoint or otherwise recognize the selection of a leader for any Committee (each, a “Committee Leader”), who shall be a Co-op Member in good standing.
Section 7.2 -Number of Members; Appointment; etc. The Board shall determine the composition, appointment and removal procedures of each Member committee provided for hereunder in this Section VI. The Board shall approve the selection process for all Committee Leaders. Unless otherwise provided for at the discretion of the Board, the term of a Committee Leader shall be one year. Leaders may serve for a maximum of three (3) consecutive terms in the same post.
7.2.1. The President shall inform all Committee Leaders of the Committee’s scope of work and other terms of reference, duration, and any other matters aimed at ensuring satisfactory performance. Thereafter, the President may designate another Board Member as a liaison to the Committee to allow for effective communication between the Committee Leader and the Board.
7.2.2. The Board shall ensure that all Committee activities are conducted in accordance with the Co-op’s interests. If it becomes apparent that a Committee is carrying out any activity that appears to be against the interests of the Co-op, the Co-op President has the authority to issue a notice to the Committee Leader directing the cessation of such activity. The Committee Leader may appeal such a directive to the Board, who shall issue a final decision on the matter.
7.2.3. Any Co-op Member in good standing may request the Board to recognize a new Co-op Committee, modify its scope of work, or request its cessation. The Committee’s Leader or Sponsor may participate in a Board Meeting to explain the request. The Board has the sole authority to recognize, amend the scope of work, or wind up a Co-op Committee.
ARTICLE VIII – COMPENSATION; PERSONAL LIABILITY
Section 8.1 -Compensation; Expense Reimbursement; Co-op Property. A director shall not be entitled to compensation by virtue or in consideration of his or her service to the Co-op as a director and all directors and Committee members shall serve without compensation, unless otherwise directed by Members at a meeting of Members. A director or a committee member may be reimbursed for any out-of-pocket costs or expenses reasonably incurred by such director or committee member other than the out-of-pocket costs or expenses incurred in the ordinary course of attending meetings of the Board or the committee, as the case may be. Directors and committee members shall not be precluded from serving the Co-op in any other capacity and receiving compensation for any such services. Subject to the Articles of Organization, these By-laws and any applicable law, the Board shall adopt a conflict of interest and compensation policy covering the corporation’s directors, officers and such staff as may be specified in the policy. No part of the Co-op’s property shall inure to the benefit of any Officer, director or Member of the Co-op.
Section8.2 -No Personal Liability. The Members, directors and officers of the Co-op shall not be personally liable for any debt, liability or obligation of the Co-op. All persons, corporations or other entities extending credit to, contracting with or having any claim against the Co-op may look only to the funds and property of the Co-op for the payment of any such contract or claim, or for the payment of any debt, damages, judgment or decree or of any money that may otherwise become due or payable to them from the Co-op.
ARTICLE IX – INTERPRETATION AND AMENDMENT
Section 9.1 -Severability. In the event that any provision of these By-laws is determined to be invalid or unenforceable under any statute or rule of law, then such provision shall be deemed inoperative to such extent and shall be deemed modified to conform with such statute or rule of law without affecting the validity or enforceability of any other provision of these By-laws.
Section 9.2 -Amendment. These By-laws may be altered, amended or repealed at any meeting of the Board, notice of which shall specify the subject matter of the proposed alteration, amendment or repeal or the sections to be affected thereby, by vote of a two-thirds (2/3) of the directors then in office at a regular or special meeting of the Board where quorum has been established. Amendments to these By-laws may also be made at any properly called meeting of Members with a two-week prior notice. Amendments shall be adopted upon a two-thirds vote of the membership present and voting. Electronic ballots may be employed in accordance with state nonprofit law.
ARTICLE X – INDEMNIFICATION
Section 10.1 – Definitions. For purposes of this Section X, the following terms shall have the following meanings:
(i) “Indemnitee” means any person who serves or has served as a Member of the Co-op, a director, an officer or employee of the Co-op, a committee member or the incorporator listed on the Articles of Organization;
(ii) “Proceeding” means any action, suit or proceeding, whether civil, criminal or investigatory, brought or threatened in or before any court, tribunal or administrative or legislative body or agency
(iii) “Expense” means any liability fixed by a judgment, order, decree or award in a Proceeding, any fine or penalty, any liability reasonably incurred in connection with the settlement of a Proceeding and any professional fees and other expenses reasonably incurred in connection with a Proceeding or the settlement thereof; and
(iv) “Enforcement Proceeding” means a Proceeding initiated by an Indemnitee or by his or her heirs or legal representatives in which he or she successfully enforces his or her rights to indemnification under this Section X.
Section 10.2 -General. Except as otherwise expressly provided by this Section X, the Co-op shall indemnify each Indemnitee and his or her heirs and personal representatives, to the extent legally permissible, against all Expenses incurred by such Indemnitee in connection with any Proceeding in which he or she is involved as a result of serving or having served as a director, officer or employee of the Co-op or in a different official capacity of the Co-op as directed by the Board, or, at the request of the Co-op, as a director, officer, employee or other agent of any other organization or in any capacity with respect to any employee benefit plan.
No indemnification shall be provided to an Indemnitee or his or her heirs or personal representatives with respect to any matter as to which it shall have been adjudicated in any Proceeding that (i) such Indemnitee did not act in good faith in the reasonable belief that his or her action was in the best interest of the Co-op and at the direction of the Board.
Notwithstanding any other provision of this Section X, an Indemnitee and his or her heirs and personal representatives shall not be entitled to indemnification under this Section IX with respect to acts or omissions occurring during any period in which such Indemnitee was not a director, officer or employee of the Co-op, except to the extent expressly approved by vote of the Board.
To the extent authorized by the Board, indemnification under this Section X shall include payment by the Co-op of Expenses incurred by an Indemnitee or his or her heirs or personal representatives in defending a Proceeding in advance of the final disposition of such Proceeding; provided, however, that the Co-op has first received an undertaking from such Indemnitee, or such heirs or personal representatives, to repay to the Co-op all such advance payments if such Indemnitee, heirs or personal representatives shall be adjudicated in any Proceeding to be not entitled to such indemnification.
An Indemnitee and his or her heirs and personal representatives shall be entitled to indemnification under this Section IX against reasonable Expenses incurred by him or her in connection with any Enforcement Proceeding. An Indemnitee and his or her heirs and personal representatives shall not be entitled to indemnification under this Section X against Expenses incurred by any of them in connection with any Proceeding initiated by any of them other than an Enforcement Proceeding unless the initiation of such Proceeding was expressly approved in advance by the Board.
Nothing in this Section X shall limit any lawful rights to indemnification existing independently of this Section X. Nothing in this Section X shall be construed as limiting in any manner the power of the Board of the Co-op to provide indemnification to any person who is not a director of the Co-op and who serves as an officer, employee or other agent of the Co-op.
Approved by the Members of the Co-op, at an Annual Meeting on March 24, 2013
