Revised April 30, 2008, Hanover, NH
Enterprises of the Hanover Consumer Cooperative Society, Inc., a corporation in the State of New Hampshire and hereafter referred to as the Society, shall be conducted in accordance with the following cooperative principles as promulgated by the International Cooperative Alliance:
1. Open Membership. Without gender, social, racial, political, or religious discrimination.
2. Democratic Member Control. One vote for each member, with no proxy votes.
3. Member Economic Participation. Members contribute equitably to the capital of the Society and decide how to allocate any surplus income.
4. Autonomy and Independence. No agreements with outside entities that fail to ensure democratic control of the Society by its members.
5. Education, Training, and Information. So members, directors, and employees can contribute to the development of the Society and inform the general public about the nature and benefits of cooperation.
6. Cooperation among Cooperatives. Strengthening the cooperative movement by working together through local, regional, national, and international alliances.
7. Concern for Community. By working to assure it thrives and is developed sustainably.
Name of Store. The main store operated by the Society shall be known as THE CO-OP FOOD STORE, which name shall be acceptable on bills and checks and informal business transactions.
Branch Stores. The Society may operate other stores or enterprises as branches of the Co-op Food Store.
Sales to Organizations. The General Manager may approve short-term accounts to organizations, but these accounts must be cleared monthly.
Sales to Non-Members. Non-members may purchase goods from the society, but a non-member shall be entitled to patronage refunds only for credit towards purchase of one share of stock in the Society. (See Art. III, Sect. 2, Par. b; Art. V, Sect. 4.)
Membership Defined. The members of this Society shall be the holders of its shares of capital stock.
Becoming a Member. A person or organization may become a member of this Society by the following methods:
a. By purchase of three or more shares of stock, signed and impressed with the Seal of the Corporation as provided in these Bylaws.
b. By accrual of patronage refunds sufficient to buy three shares. Such accruals, after two consecutive calendar years, if insufficient for shares of stock, shall become part of the general reserve of the Society. (See Art. V, Sect. 4.)
c. By inheritance of three shares.
d. By gift of three shares of stock in the Society.
Limitations on Membership.
a. No shareholder less than 18 years of age shall be eligible to hold office in the Society.
b. Where two or more persons own a multiple shareholding as joint tenants, each shall be a fully qualified member of the Society independently of any others, providing that none of the expressed limitations of these Bylaws applies to either tenant and there are at least three shares for each shareholder.
c. Organizations holding membership shall be entitled to only one vote and one accredited delegate to membership meetings.
Withdrawal from Membership. Membership shall automatically be withdrawn when the member’s shares have all been transferred. (See Art. IV, Sect. 6.)
Membership Roll. A list of the members with their addresses shall be kept by the General Manager.
Presentation of Bylaws. A copy of these Bylaws shall be given to each member.
Rights of Members. Every member shall have an equal right to participate and to vote in regular and special meetings (See Art. VI), to attend any meeting of the Board of Directors or of a committee (as provided in Article VII, Sect. 5), and to share in the distribution of savings as provided in these Bylaws.
Shares Non-assessable. No member of this Corporation may be held liable for the debts of the Corporation beyond amounts credited towards membership shares.
Constructive Consent by Members. In order that patronage refunds shall qualify as federal income tax deductions for the Society, its members must be deemed to have given their consent to the following treatment of these funds. Each person who hereafter is accepted to membership in The Hanover Consumer Cooperative Society, Inc., and each member of this cooperative on the effective date of this Bylaw who thereafter continues as a member shall, by that act alone, consent that the amount of any distributions with respect to patronage occurring after February 24, 1966, which are made in written notice of allocation (as defined in 36 U.S.C. 1388) and which are received from the Society, will be taken into account at their stated dollar amounts in the manner provided in 26 U.S.C. 1385(a) in the taxable year in which such written notices of allocation are received.
Fiscal Period. The business period of the Society shall be a 52 or 53 week fiscal year with the starting date determined by the Board of Directors.
Sources of Capital Funds. The capital funds of the Society shall be composed of
1. the funds paid in by the members for capital stock;
2. funds borrowed from its members or from other sources;
3. the accumulated surplus savings from its business; and
4. income from its properties and other assets.
Share Capital. Authorized share capital of the Society shall be as provided in the Society’s Certificate of Organization.
Shareholders. Each person or organization before admittance into Membership of the Society shall subscribe for a minimum of three shares of its capital stock and shall make full payment at that time for at least three shares. A certificate of shares in the Society shall be issued to each member on the full payment for said shares of capital stock, such certificates to be numbered and registered as issued and to contain the shareholder’s full name and the number of shares purchased. Certificates shall be signed by the President and Treasurer and shall be impressed with the Seal of the Society. A record of stockholders and the outstanding stock shall be kept by the General Manager in a stock book for that purpose.
Dividends. No dividends shall be paid on share capital.
Transfer or Repurchase of Shares. Shareholders desiring to dispose of shares must first offer them to the Society through the Board of Directors which is authorized to redeem all or some of the shares at a price not exceeding their par value or book value, if the latter be less. The duration of the option of the Society to repurchase shall be sixty (60) days, after which the shareholder shall have the right to dispose of them to any person. Transfers of the shares of this Society shall not be binding until made upon its books, and no transfers shall be completed until the old certificate or certificates have been endorsed and surrendered and a new certificate has been issued in the name of the purchaser.
Authority of the Board of Directors to Transfer Shares of Stock in the Society. If the whereabouts of an owner of shares of stock in the Society have become unknown, the Board of Directors shall declare the shareholder inactive and shall transfer the share capital into a special fund hereafter called the Unclaimed Share Capital Fund. If such share capital are unclaimed in eight (8) years following their transfer to the Unclaimed Share Capital Fund, the Board of Directors shall have the right to redeem the shares, thereby canceling any membership, and transfer the share capital to the general reserve fund of the Society, provided due notice and warning have been given in the public press and the laws of the state of New Hampshire have not been violated.
Lien on Capital. The Society shall have an absolute lien on the share or loan capital, and on the interest due thereon, of any member or any subscriber to share capital for debts owned by said member or subscriber to the Society.
Loan Capital. The Society may borrow money from its members or from non-members in such amounts and upon such terms, with respect to interest, maturity, security, and otherwise, as the Board of Directors may determine.
Reserve Fund. This fund shall consist of an annual allotment of not less than ten percent (10%) of the net savings or earnings of the business for each year, contributions from individuals, confiscated capital of removed members, and any other funds appropriated to it by action of the Board of Directors or the general membership meetings; provided however, that in the event that said reserve fund exceeds 30% of both the paid-in and subscribed capital determined as of the end of the fiscal year, then the annual allotment to the reserve fund shall be determined by the Board of Directors. The reserve fund shall be for the purpose of unforeseen losses due to extraordinary depreciation of equipment, fire, theft, or other causes, for the extension of the Society as a consumer cooperative, or for any program of social welfare or insurance or other development directly associated with the cooperative movement as shall be decided by a general meeting of the membership. The reserve fund shall be the indivisible property of the Society as a whole and shall not be depleted by payment of patronage refunds.
Distribution of Net Savings
Determination of Net Savings. Within ten weeks after the end of each fiscal year the difference between the gross receipts, from whatever source, and the total cost of doing business, including interest cost, shall be determined by a Certified Public Accountant selected by the Board of Directors and having no financial interest in the Society. This difference will be designated as the net savings for the year.
Division of Net Savings. Following the close of each fiscal year the net savings for the year shall be divided in the following manner and order, until it has been entirely divided:
a. An amount equal to the percent of sales not represented by member purchases shall be allocated to the reserve fund, but not less than 10% of the net savings and an appropriate portion of the net savings shall be set aside for the payment of income taxes on the amount so allocated.
b. The balance of the net savings, after deduction of reserves and income taxes thereon, shall be distributed as patronage refunds in accordance with Section 4 of this Article, subject to the limitation that the patronage refund rate shall not exceed the rate of net savings, expressed as a percent of gross receipts, from whatever source and provided
1. that the rate of patronage refund shall be rounded to the nearest tenth of one percent, and
2. that the patronage refund may be waived by action of a membership meeting if the rate is less than one-half of one percent.
c. Any residue of the net savings, after compliance with the preceding provisions of this section, shall, after deduction of income taxes on it, be allocated to the reserve fund.
Patronage Records. The Board of Directors shall determine a process by which accurate records may be kept of each member’s and non-member’s patronage of the Society for the purpose of determining patronage refunds and other purposes. The Board of Directors shall give sufficient notice in the Society’s publications and in the Society’s stores of the process to the Society’s members and non-members, as the Board of Directors may from time to time determine.
Manner of Distribution of Patronage Refunds. The patronage refund payable to each patron shall be that fraction of the total amount available for patronage refunds (under Section 2 of this Article) that the sum of the purchases actually made by the patron bears to the sum of all such purchases. If, in the discretion of the Board, distribution of patronage refunds in cash would injuriously deplete the working capital of the Society, it shall be the right of the Board to decide that payments be made in the form of certificates of indebtedness or in the form of credit to be applied against such certificates of indebtedness later to be issued, or that up to fifty percent (50%) of the distribution be made in the form of credits toward shares of capital stock. The Board may pay patronage refunds in the form of merchandise certificates redeemable in trade with any store of the Society. A member may decide that said patronage refund be paid in the form of credit toward purchase of shares of capital stock. Non-members shall be eligible for all patronage refunds, but such payment shall be recorded as stock subscriptions and held in the books of the Society in individual subscription accounts until the account accumulates to fifteen dollars. At that time the patron shall become a member of the Society and shall receive three shares of stock. If a member redeems the shares necessary for membership in the year acquired, the member will not be entitled to patronage refunds for the year in which the stocks are sold. A member may repurchase ten shares before the calculation of the next patronage refund and be reinstated to full membership rights. Stock subscription accounts which have not accumulated to five dollars, and to which no credits have been applied for a period of two years, shall be transferred to donated surplus. (See Art. III, Sect. 2, Par. b.)
Patronage Refund in Cash. Until a patron owns ten (10) shares, said patron’s refunds shall be paid as follows:
1. twenty percent (20%) of patronage refunds in cash and
2. eighty percent (80%) of patronage refunds credited as payment on membership shares; and thereafter said patron’s refunds shall be paid as provided in other sections of this article.
Membership (Stockholders) Meetings
Membership Control. The final authority to make and change the Bylaws of the Society shall be vested in the members, to be exercised by them as provided in these Bylaws. The members shall elect a Board of Directors to administer the affairs of the Society.
Regular Meetings. Each year the Annual Meeting of the Society shall be held within four calendar months following the end of the immediately preceding fiscal year. A second regular meeting of the Society shall be held four to eight months following the Annual Meeting at a date specified by the Board to address the business of the Society, including, without limitation, Bylaws changes. At the discretion of the Board, said second regular meeting may be cancelled.
Special Meetings. Special meetings may be called by a majority vote of the full Board of Directors and must be called whenever a petition therefor signed by at least ten (10) percent of the members is presented to the Board.
Notice of membership meetings shall be mailed to all members at their last known address at least ten days in advance. (See Art. IX)
All Meetings. For the purposes of these bylaws, a Membership Meeting (Meeting of the Society; Meeting of the Members), including the Annual Meeting, shall last for a period of at least 3, but no more than 30, days, during which period ballots may be cast as provided in these Bylaws. All meetings shall provide for an assembly of members (of more limited duration) in person to receive the report(s) of the Society. The duration of a meeting and the date, time, and place of the assembly of members shall each be determined by the Board of Directors.
Notice of membership meetings shall be mailed to all members at their last known address at least ten days prior to the beginning of the meeting or at such earlier time as may be required by law or Art. IX.
Quorum. In order for any action to carry, at least two hundred (200) ballots, as certified by the Board, must be received by the end of the meeting. No minimum number of Members need be present in person at an assembly of members.
Rights and Limitations of Membership. Members have the right and responsibility to elect Directors; to recall any member from the Board of Directors, committees, or any other office of the Society; to receive and act on the reports of officers and the General Manager and the Education and Member Services Director of the Society and of the committees responsible to it; to rescind or approve any decision of the Board, committees, or other offices in matters involving commitments of sums in excess of 4% of the last fiscal year’s gross annual sales; to make the final decision regarding any substantial change in the financial policy of the Society; to act on recommendations submitted by the Board of Directors; and to enact and amend the Bylaws and amend the Articles of Agreement of the Society as herein provided.
Voting. With the exception of a motion to amend these Bylaws or the Articles of Agreement or any other matter required by law, the majority vote of the members voting shall decide upon all business, including disposition of any patronage refund. Action on all matters including election of Directors shall be by ballot at the assembly of members or by absentee ballot during the meeting. At the discretion of the Board, ballots may be made available to be picked up by Members at designated locations. Ballots shall be mailed (in paper or electronic media) to each member and returned by mail or by hand to the location designated (in any case the ballot is to be received by the Secretary of the Society by the date specified) or at the designated membership assembly. Each member shall have one vote on all voting occasions, and never more than one vote and there shall be no voting by proxy. Ballots shall be mailed out to Members (or made available for pick up) at least ten (10) days prior to the beginning of the meeting. To be counted, ballots must be received by mail, by deposit at designated sites within the stores or at the assembly of members, or by electronic means, as set up for that purpose, prior to the end of the meeting. To be counted, a ballot must also meet certification standards set by the Board of Directors to ensure confidentiality, authenticity, and validity.
Conduct of Meetings. Except where the Bylaws and Articles of Agreement otherwise provide, Robert’s Rules of Order, as revised, shall govern.
Board of Directors
Composition of the Board and Election of Officers. Only members of the Society may serve on the Board of Directors. The administration of the Society shall be vested in a Board of Directors, consisting of nine (9) members whose three year terms shall be staggered so as to provide continuity. Directors shall be elected by the membership during the Annual Meeting of the Society. After the conclusion of the voting by the membership for the Board of Directors (see Article VI, Section 5) the Directors shall elect the officers and the Chair of the Nominating Committee from among the members of the Board. The officers shall be the President, Vice President, Secretary, and Treasurer. Directors and officers shall serve until their successor is elected and qualified, as provided by law, these Bylaws, or the Certificate of Organization.
Employees as Directors. Employees of the Society who are members of the Society, except those who report to the Board or directly to the General Manager, may run for and serve on the Board but shall not be eligible to serve as an officer of the Board. Employee Directors shall have the same responsibilities, term, and voting privileges as the other Directors with the exception that employee Directors shall not participate directly in evaluation of the General Manager or in determination of his/her compensation. Employee Directors may participate in executive sessions at the discretion of a majority of the non-employee Directors present and voting. No more
than two employees shall serve on the Board at
any one time.
Responsibilities of the Directors and Disqualification of Directors. Directors of the Society shall take care to properly discharge their responsibilities to the Society. If, in the opinion of a majority of the full Board, there is a reasonable demonstration that any Director is not properly discharging his or her responsibilities to the Society, that Director may be removed from the Board of Directors by a vote of two-thirds of the full Board. Alternatively, a majority of the full Board may call a special meeting of the members to consider and decide whether that Director should be removed from the Board.
Vacancies. The Board of Directors may fill by
appointment any vacancy in an elective office.
Such an appointee shall hold office only until the
next Annual Meeting, when the position shall be
filled by election.
Duties. The Board of Directors shall administer all business carried on by or on account of the Society. Regular meetings of the Board, on the call of the President and with due notice to the Directors and members, shall be held at least quarterly. A majority of Directors shall form a quorum. The Directors may arrange themselves into committees. Any member of the Society may attend any meeting of the Board of Directors or of a committee as an observer, and may upon invitation of the Chair participate in its discussions, except that closed executive sessions, solely for discussion of a specified subject, may be ordered by a two-thirds vote of a quorum. All binding decisions of the Board and its committees shall be made by recorded votes in open sessions. The Board shall convene the membership meetings of the Society. The President or any four Directors may call a special Board meeting by giving two days’ written notice to the Secretary, specifying the object thereof. At the discretion of the President, when necessary to transact urgent business, special meetings of the Board may be conducted by telephone. Directors must otherwise be present to vote or otherwise to participate in meetings of the Board.
The Board shall act for the Society and be responsible for:
1. Engaging a General Manager of its business and determining his duties and emoluments.
2. Providing suitable accommodations, machinery, and plant to conduct the business of the Society.
3. Insuring that the business is conducted in accordance with these Bylaws.
4. Controlling all investments.
5. Securing the soundness of the business of the Society by providing that all officers and employees having custody of the funds or goods shall each give sufficient bond with corporate surety.
6. Providing the best possible conditions of employment in the service of the Society, and for requiring efficiency, faithfulness, and diligence on the part of the staff.
7. Maintaining a direct and vital connection with other cooperative organizations.
8. Fostering a spirit of enthusiasm for cooperative effort, in the staff and among the members of the Society, and for encouraging them to identify themselves with every good feature of cooperative endeavor.
9. Determining special committees of the Society and designating their chairmen, who shall select the additional members of such committees, subject to the approval of the Board of Directors. Such committees of the Society shall serve for one year unless otherwise specified.
Executive Committee. Ordinarily, the President, the Vice-President, the Treasurer, and the Secretary shall constitute the Executive Committee of the Board of Directors. Whenever necessary, however, other members of the Board may be elected or appointed to this committee in their stead. The Executive Committee shall meet as required to act on current business between regular meetings of the Board. The decisions of the Executive Committee shall be reported to the next Board meeting and shall be subject to the approval of the Board as a whole.
Indemnification. The Co-op shall indemnify or reimburse its current and former directors for all claims and liabilities including reasonable expenses and attorney’s fees, to which they may be subject by reason of their positions with the Co-op or by reason of service as a Director or officer of another corporation at the request of the Co-op. Indemnification or reimbursement shall not, however, be made if it is determined that such persons did not act in good faith or in the reasonable belief that their actions were in the best interest of the Co-op. If this determination is not made in a legal proceeding related to the claim, it may be made by a quorum of disinterested Directors. If not made or able to be made by either, the determination shall be made by independent legal counsel. The foregoing shall not be exclusive of any other rights to which Directors and officers may be lawfully entitled.
Duties of Officers, Committees and General Manager
President. The President shall preside at all membership and Board of Directors meetings, sign and execute with the Treasurer all certificates of stock, sign such other documents as required in behalf of the Society, and shall perform any other duties required by the Board. All contracts not executed by the General Manager in the ordinary course of business shall be signed by the President and countersigned by the Secretary or another member of the Board.
Vice-President. The Vice-President shall perform the duties of the President when the President is unable to do so. Should the President and the Vice-President both be absent from a membership or Board meeting, the Officers and Directors present shall elect one from among themselves to chair the meeting.
Secretary. The Secretary shall attend all meetings of the membership and the Board of Directors and be responsible for recording the names of all Directors present, all votes and proceedings of each meeting, and the minutes of their proceedings, or designate such a person to do so. All contracts approved and entered into by the Board shall be countersigned by the Secretary or another member of the Board. The Secretary shall be responsible for all correspondence, and keep the records, documents and other papers of this Society in such a manner and for such purposes as the Board may require.
Treasurer. The Treasurer shall attend all meetings of the membership and of the Board of Directors; shall be responsible for overseeing the financial condition of the Society; shall sign with the President all certificates of stock; shall review with the Board at least quarterly a Statement of Income and Expense and a Balance Sheet, and keep the Board informed of the financial status of the Society by monthly reports at the regular meetings of the Board prepared either by the Treasurer, the General Manager, or the designee of the General Manager. The Treasurer shall review the Annual Budget as developed by the General Manager and make recommendations to the Board of Directors as to its appropriateness.
Finance Committee. The Board of Directors convened as a committee of the whole, shall serve as the Finance Committee of the Society to the extent such a committee may be required by law.
Nominating Committee. The duties of the Nominating Committee shall be to present a slate of candidates to fill vacancies on the Board of Directors and to encourage a contest. The Board of Directors shall elect the Chair of the Nominating Committee from among the members of the Board and shall appoint additional members to the Committee from among the members of the Society in sufficient number and of such capability and diversity, as to carry out an effective election process. The Chair shall serve in such capacity for a term of one year or until his/her successor is duly elected and qualified. The Board shall provide the various committee Chairs of the Society with the names of members who may be qualified to serve on their committee.
Any member may volunteer to be considered as a candidate for the Board of Directors by submitting his or her name and a statement of interests and qualifications to the Chair of the Nominating Committee. The inclusion of such a member on the slate of nominees nominated by the Nominating Committee shall be at the Nominating Committee’s discretion. In addition, a member has the right to be nominated by petition of at least 50 eligible-to-vote Co-op members. This petition must be submitted to the Chair of the Nominating Committee in time for candidate information to be included in the Annual Report, which is mailed to all members. Such a candidate will be identified in the roster of candidates as being nominated by petition in contrast to candidates nominated by the Nominating Committee.
General Manager. The General Manager is directly responsible to the Board of Directors for the administration and supervision of the business of the Society.
The Bylaws and Certificate of Organization may be amended by a two-thirds vote of the members voting at a regular meeting of the members. A committee, appointed by the President with the approval of the Board of Directors, shall review all proposed amendments in order to render their wording consistent with the Certificate of Organization and Bylaws of the Society and with the laws of the State of New Hampshire governing consumer cooperatives.
At least thirty (30) days before the voting period called to consider an amendment, the proposed amendment shall be mailed to all members of the Society together with explanation of the manner and time by which votes must be submitted.