BY-LAWS

OF

FARM DIRECT CO-OP, INC.

Effective January 1, 2004

 

Article I - Organization

Section 1.1 -Name and location. The name of the corporation shall be Marblehead Eco-Farm, Inc. d/b/a Farm Direct Co-op (hereinafter "the Co-op"). The prin­ci­pal office of the Co-op shall be in Marblehead, Massachusetts. 

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.

Article II - Membership

Section 2.1 - Eligibility and admission. Subject to availability of membership interests, membership in the Co-op shall be voluntary and open on a single or family basis 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. Each member shall be entitled to make purchases from the Co-op 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 Co-op. 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 - Meetings of Members 

Section 3.1 -Annual meeting. An annual meeting of members shall be held within three months after the close of each fiscal year. 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 members may be called by the Board and shall be called by the Clerk as soon as practicable upon receipt of petitions signed by ten percent of the number of members required for a quorum at a meeting of members, such petitions stating any proper business to be brought before the meeting. Any business conducted at a special meeting other than that specified in the notice of the meeting shall be of an advisory nature only.

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 Clerk. Meetings shall be at a place convenient to members and need not be at the principal office 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 mailed to each member not less than twenty nor more than fifty days before the date of the meeting.

Section 3.5 -Quorum and voting. The presence in person or, when authorized, by absentee ballot of 12.5 percent of the members as of the previous July first shall constitute a quorum for the transaction of business at any meeting of members. Each member shall have one and only one vote on each issue submitted to a vote of members. 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 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.

Section 3.8 -Issues submitted by members. Notices of a meeting of members shall include any issues submitted by petition of ten percent of the number of members required for a quorum at a meeting of members. Petitions must be received at the principal office of the Co-op not less than sixty 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 of Directors (sometimes referred to in these by-laws as "the Board").

Section 4.2 -Number and qualifications. The Board shall consist of not less than six nor more than nine directors, as determined at a meeting of members. 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. Directors may be nominated by the Board, by a nominating committee appointed by the Board, or by petitions signed by four or more members and submitted to the Co-op at least sixty days before commencement of the election process. Directors shall be elected by members at the annual meeting or at a meeting in lieu thereof. 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. To facilitate staggering of terms, some directors may periodically be elected for one or two year terms. Directors shall hold office until their successors are elected or until their terms are terminated sooner in accordance with these by-laws.

Section 4.4 -Compensation.  Directors may be reimbursed for reasonable expenses incurred in connection with business of the Co-op as is author­ized by the Board.  Directors may receive such compensation for services provided in their official capacities as is author­ized by a meeting of members.

Section 4.5 -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 4.6 -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 4.7 -Committees. The Board may appoint special or standing committees to advise the Board or to exercise such authority as the Board shall designate. Advisory committees shall include at least one director. Committees exercising any authority of the Board shall consist only of directors, and shall conform to the requirements of law and the procedures applicable to the Board.

Section 4.8 -Indemnification. Subject to limitations in its Articles of Incorporation, the Co-op shall indemnify its current and former directors and officers against all reasonable ex­penses to which they may become subject by reason of their positions with the Co-op or their service in its behalf to the fullest extent permitted by law. Indemnification payments and advances of expenses shall be made on a priority basis but only in such increments and at such times as will not jeopar­dize the ability of the Co-op to pay its ordinary and necessary obligations as they become due. All such payments made shall be reported in writing to members with or before the notice of the next scheduled meeting of members.

Section 4.9 -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. A director who is absent from two consecutive Board meetings, unless excused by the Board for good cause, shall be presumed to have resigned.

Section 4.10 -Vacancies. A vacancy among directors occurring between annual meetings may be filled by the Board. Any such vacancy that results in less than six 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. A regular meeting of the Board shall be held, without any other notice, immediately after the annual meeting. The Board may determine the times and places of additional regular meetings. Special meetings may be called by the President and shall be called upon request of any two directors. Meetings of the Board shall be held at least five times per year.

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 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. The Board shall strive to make decisions by consensus, attempting to reconcile differing points of view based upon the best interests of the Co-op.  Any decision made by consensus shall be deemed to be inclusive of a vote in any required percentage.  If, in the opinion of a majority of directors present, diligent efforts have failed to produce consensus and the issue requires immediate action, then such issue may be decided by a two-thirds majority vote.

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 signed by all 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 any three directors, 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, Clerk, and such other officers or assistant officers as may be determined by the Board.

Section 6.2 -Qualifications, election, term and removal. Officers shall be elected by the Board. The President and Treasurer shall be directors. The Clerk 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. Officers may be removed by the Board at any time whenever, in its opinion, the best interests of the Co-op would thereby be served.

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:

1. 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;
2. The Treasurer shall be the chief financial officer, and shall present a report to the annual meeting on the financial affairs of the Co-op; and
3. The Clerk shall oversee the issuance of required notices and the keeping of minutes of Board and member meetings, and shall authenticate Co-op records.
4. The Vice President shall act in the role of President in the President’s absence.

Article VII -  Interpretation and Amendment

Section 7.1 -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 7.2 -Amendment. These by-laws may be amended by action at a meeting of members, provided that the proposed amendments are stated or fully described in the notice of the meeting at which the amendments are to be adopted. These by-laws may also be amended by the Board, provided that such amendments are presented for ratification at the next meeting of members.

10/14/03

Version 5.1

 

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