Exhibit 3.2
PRO-FAC COOPERATIVE, INC.
BYLAWS
(as amended March 4, 2002)
Article I: Offices
Section 1. Principal Office
The principal office of the Cooperative shall be located in
Rochester, New York or such other place as the Board of Directors may
from time to time designate.
Article II: Member
Section 1. Eligibility
All persons, partnerships, firms, corporations, institutions and
business organizations of any kind which engage in the production of
agricultural products which can be marketed through the Cooperative
shall be eligible for membership in the Cooperative as shall
cooperative corporations of such producers.
Section 2. Application for Membership
An applicant for membership in the Cooperative shall file with
the Cooperative an application for membership in such form and
containing such terms as shall be from time to time determined by the
Board of Directors. Included in the application shall be a statement
that the applicant agrees to (a) comply with and be bound by the terms
and conditions contained in the Cooperative's Restated Certificate of
Incorporation dated March 28, 2002, as further amended and restated
from time to time (the "Certificate of Incorporation") and in these
Bylaws, as further amended from time to time (the "Bylaws"); (b)
purchase the required number of shares of common stock of the
Cooperative as established from time to time by the Board of Directors
based upon the quantity and type of agricultural products to be
marketed through the Cooperative by the applicant; and (c) take into
account, pursuant to Section 1385 and 1388 of the Internal Revenue
Code of 1986 as amended, the stated dollar amount of any and all
written notices of allocation received from the Cooperative and
include such stated dollar amount in his gross income for the year in
which such written notices of allocation are received.
Section 3. Approval of Application
An application for membership may be approved by the Board of
Directors as herein provided if it is determined that the approval of
the application will be for the mutual benefit of the members of the
Cooperative and consistent with the accomplishment of its corporate
purposes.
Section 4. Membership Committee
The Board of Directors, by resolution adopted by a majority of
the entire Board of Directors, may appoint a Membership Committee, a
majority of which shall be members of the Board of Directors, each of
whom shall hold office until such appointment is
rescinded and a successor appointed and qualified. The Membership
Committee shall have such functions and responsibilities as may be
delegated by the Board of Directors, including, but not limited to,
approving or rejecting applications for membership and for transfer of
common stock by a member. In any case where factual information
concerning the qualifications of an applicant is insufficient to
determine eligibility, the matter may be referred by the Membership
Committee to the Commodity Committee of the Cooperative (as described
in Article VII of these Bylaws) in or near the community in which the
applicant resides for report and recommendation to the Membership
Committee.
Section 5. Ownership and Transfer of Common Stock
(a) The common stock of the Cooperative shall be issued to and owned
by only persons, partnerships, firms, corporations, institutions,
or other business organizations of any kind engaged in the
production of agricultural products (and cooperative corporations
of such producers) whose application for membership has been
approved and who market such agricultural products annually
through the Cooperative. The term "member" shall refer to an
owner of common stock of the Cooperative.
(b) No common stock shall be transferred without the prior written
consent of the Cooperative.
(c) Upon the death of an individual member, the estate of the
deceased shall continue as a member of the Cooperative solely for
the purpose of winding up the affairs of the deceased until all
obligations of the deceased to the Cooperative, including those
under the current commodity agreement, have been performed, after
which the estate shall dispose of its common stock in the manner
specified in Section 7.
(d) Upon determination by the Board of Directors that a member is no
longer a producer of agricultural products which he sells to the
Cooperative, then such member shall dispose of his common stock
in the Cooperative in the manner specified in Section 7.
(e) Should the Cooperative discontinue a crop, then it shall notify
all members whose ownership of common stock is based upon their
marketing such crop through the Cooperative and direct such
members within a time specified by the Board of Directors in its
discretion to sell their common stock to the Cooperative for cash
at the par value thereof, plus any declared but unpaid dividends
as of the date of such sale.
(f) Should a member desire or be required by the Cooperative
permanently to reduce the quantity of a crop which he sells to
the Cooperative, then such member shall in the manner specified
in Section 7 of this Article, dispose of such number of shares of
his common stock as is necessary to bring his ownership of common
shares into the proper relationship to the quantity and type of
agricultural products which he markets through the Cooperative as
determined by the Board of Directors.
Section 6. Expulsion
(a) The Board of Directors, acting through its Membership Committee
if it elects to do so, may expel any member of the Cooperative if
it determines that such member (1) has become in default in
payment of his subscription for common stock, or (2) willfully
fails to comply with these Bylaws or otherwise obstructs the
purposes or proper activities of the Cooperative, or (3) has
defaulted in his obligation under the general marketing
agreement, crop agreement, or any other agreement with the
Cooperative.
(b) A member may be expelled from the Cooperative only after a
hearing before the Membership Committee. The member shall be
given by mail or in person at least five days' written notice of
such hearing, which indicates the intention to consider such
expulsion and specifies the proposed reasons therefore. The
member shall be given an opportunity to appear and be heard at
such hearing. If after such hearing the Committee determines that
the member should be expelled, he shall have the right to appeal
the decision to the full Board of Directors. The decision of the
Board of Directors in such a case shall be final.
(c) If a member is expelled as provided herein, the Cooperative shall
cause written notice of such action to be mailed to the member.
(d) A member expelled from the Cooperative under this Section shall
dispose of his common stock as specified in Section 7.
Section 7. Procedure on Transfer
A member who is obligated to dispose of his common stock in the
Cooperative shall do so as follows:
(a) A member shall make a reasonable effort to find another grower
who is willing to purchase the common stock of such member and
assume all his obligations to the Cooperative and who meets all
requirements for membership in the Cooperative. The Cooperative
may assist the member in finding such a grower and shall give the
member a reasonable time within which to try to find such a
grower.
(b) The Cooperative shall notify the member when such reasonable time
has expired, at which time the member must then promptly sell his
common stock to the Cooperative for cash at the par value thereof
plus any dividends thereon which have been declared but remain
unpaid.
Section 8. Rights of Transferees
No one shall become a member of the Cooperative unless an
application for membership is filed in accordance with Section 2 of
this Article and is approved as provided in Section 3 of this Article.
Article III: Meetings of Members
Section 1. Meetings of Members
(a) Annual, special and regional meetings of members of the
Cooperative shall be held at such time and place and upon such
terms and conditions as shall be determined by the Board of
Directors. Written notice of the time, place and any particular
known business to be transacted at such meeting shall be given by
mailing, not less than ten nor more than fifty days prior to the
meeting, postage prepaid, a copy of such notice directed to each
eligible voter at his address as it appears on the books of the
Cooperative.
(b) The Board of Directors may direct that, in lieu of or in addition
to a single annual or special meeting of members, one or more
regional membership meetings be held in the regions, or in
combinations of the regions, designated by the Board of
Directors. Such regional meetings shall be conducted as provided
in this Article and as otherwise determined by the Board of
Directors.
(c) Should the Board of Directors direct the holding of regional
meetings of members as herein provided, then notice of such
meetings shall be given to all members in each region in the
manner provided in Section 1(a) of this Article. If so requested
by the Board of Directors, at a regional meeting the members
shall from their number elect a delegate and alternate delegate
(who shall act if the delegate is unable to serve) to represent
the members at any meeting of delegates. Delegates and alternate
delegates shall be selected and authorized to act as follows:
(1) Delegates and alternate delegates shall be nominated and
elected in the same manner as provided herein for the
nomination and election of regional directors.
(2) Delegates and alternate delegates shall be elected for a
term of one year, or until their successors have been duly
elected and qualified. At all meetings of delegates a
majority of the delegates (or any alternate delegates if
they are serving instead of the delegates) shall constitute
a quorum.
(3) Any action required to be taken by the entire membership of
the Cooperative may, if requested by the Board of Directors,
be taken in their behalf by the delegates at a meeting of
delegates.
(4) To the maximum extent possible, the members shall at
regional meetings instruct their delegates as how to vote at
any meeting of delegates. At any meeting of delegates each
delegate shall, as to all matters voted upon by members at a
regional meeting, have a number of votes equal to the total
votes cast by the members in his region at such regional
meeting, and he shall cast those votes in the same manner as
those votes were cast at the regional meeting.
(5) As to any matter properly submitted to a meeting of
delegates which has not been voted upon by members at a
regional meeting, each delegate
shall cast in a manner which he believes to be in the best
interest of the Cooperative all votes available to be cast
by the members in the region represented by such delegate.
Section 2. Special Meetings
A special meeting of members or delegates may be called by a
majority of the Board of Directors or of the members. Notice of such
special meeting, specifying the time, place and purpose for which it
is called, shall be given to each member (or if a delegate meeting is
called, to each delegate) in the manner provided in Section 1(a) of
this Article.
Section 3. Quorum & Voting
(a) At all meetings of the members, the members present shall
constitute a quorum. At any annual, special or regional meeting
of members, duly called in accordance with these Bylaws and
applicable law, the written vote of an absent member signed by
him shall be received and counted, provided he shall have been
previously notified in writing of the substance of the motion or
resolution upon which such vote is taken. At all annual and
special meetings of members and all regional meetings of members
with respect to the election of directors, delegates and
alternate delegates, all decisions (except decisions on matters
otherwise regulated by statute or otherwise governed by these
bylaws) shall be determined by the majority vote of the members
present in person or voting by mail as herein provided. At all
regional meetings of members other than those as they relate to
the election of directors, delegates or alternate delegates, all
decisions (except decisions on matters otherwise regulated by
statue or otherwise governed by these bylaws) shall be determined
by the majority vote of the aggregate number of members present
in person or voting by mail as herein provided at all such
regional meetings, taken in the aggregate.
(b) All voting by members and delegates shall be as described in
these Bylaws, and voting by proxy shall not be permitted.
(c) The delegates may take action without a meeting upon the
unanimous written consent of all of the delegates.
Section 4. Inspectors of Election
Two inspectors of election shall be appointed by the chairman of
the meeting at each annual meeting or regional meeting of members to
serve for that meeting. If any inspector shall not be present or shall
decline to serve, the chairman shall appoint an inspector to fill his
place.
Article IV. Directors
Section 1. Number of Directors
There shall be no fewer than eleven (11) nor more than eighteen
(18) directors of the Cooperative, with the exact number to be
determined from time to time by resolution of the Board.
Section 2. Term of Office
Except as provided in Section 5(b) and (c) of this Article,
directors shall serve for the term of three (3) years or until their
successors shall have been duly elected and qualified.
Section 3. Election of Directors
(a) Directors shall be chosen by a plurality of the votes cast at any
meeting called for that purpose, and substantially one-third
(1/3) of their number shall be elected each year.
(b) The Board of Directors shall divide the territorial area in which
the Cooperative operates into regions and shall designate the
number of directors to be elected from each region so as to
attain reasonably balanced regional representation on the Board
of Directors based upon the value of raw product delivered by the
members in each region. The Board of Directors may in its
discretion further divide any region into districts within the
region.
(c) The Board of Directors may appoint a number of Directors no
greater than one-fifth (1/5) of the entire number of Directors to
represent primarily the interest of the general public in the
Cooperative. Such directors need not be members of the
Cooperative.
(d) The members in each region shall elect the director or directors
for that region. In any region which is divided into districts,
the members in each district shall elect the directors from that
district.
Section 4. Nomination of Directors
(a) The members of each region of the Cooperative shall elect a
nominating committee for their region. In any region which is
divided into districts there shall be a nominating committee for
each district elected by the members of the district. Each
committee member shall serve for a two-year term with
substantially one-half of the membership of the committee elected
each year.
(b) Directors representing each region or district shall be nominated
by the regional or district nominating committees formed pursuant
to these Bylaws. Additional nominations of directors may
otherwise be made only by members from the floor of the meeting
at which directors are to be elected.
(c) All nominees for director, to be validly nominated must meet such
qualifications for office as are established under these Bylaws
or by law.
Section 5. Revision of Regional Representation
(a) Should there be major shifts in the geographical distribution of
members or the production of raw products delivered to the
Cooperative, the Board of Directors shall redistribute the number
of Directors representing one or more regions or shall revise the
boundaries of one or more regions so as to maintain reasonably
balanced regional representation on the Board of Directors based
upon the value of raw product delivered in each region.
(b) In case the number of Directors representing a region is to be
reduced by a redistribution as provided in Section 5(a), then in
order to facilitate that reduction the Board of Directors may
request (but not compel) the resignation as a director of all
directors from the region (or from a district within a region)
affected whose terms will not have expired as of the time such
reduction is to become effective.
(c) In acting pursuant to this Section 5, the Board of Directors may
request the nominating committees for the affected regions or
districts to nominate members for election to those vacant
directorships which the region or district may be entitled to
elect after the redistribution of director representation as
provided in this Section 5. At a meeting of the members of the
affected region or district called upon such terms as may be
determined by the Board of Directors, directors may be elected to
fill such vacant directorships as the members of the affected
regions or districts may be entitled to elect after the
redistribution of director representation as provided in this
Section 5. Such directors shall be nominated for and elected to
such directorships for terms of one to three years so that the
terms of substantially one-third of all directors shall expire
each year.
Section 6. Board Vacancies
Vacancies in the Board of Directors occurring during the year
caused by death, resignation or otherwise, may, until the next meeting
of members called for the election of a successor director, be filled
by a majority vote of the remaining directors at any meeting of the
Board of Directors. Vacancies shall be filled by members from the
region or district in which the vacancy occurs.
Section 7. Compensation
Directors, as such, shall not receive any stated salary, but as
fixed by resolution of the Board of Directors, a stated sum and
expenses of attendance may be allowed for such meetings as they
necessarily attend in behalf of the Cooperative.
Section 8. Power of Directors
Subject to the provisions of the Certificate of Incorporation and
of these Bylaws, the business of the Cooperative shall be managed and
conducted by the Board of Directors. The Board may adopt rules and
regulations for the conduct of its meetings and
for the management of the affairs of the Cooperative and may adopt
additional bylaws consistent with the laws of the State of New York
and with these Bylaws, provided such additional bylaws are submitted
for the approval of members at the next annual meeting, or at the next
regional meeting of members held in lieu of an annual meeting, or at a
special meeting called for such purpose.
Section 9. Committees of the Board
The Board of Directors, by resolution adopted by a majority of
the entire board, may designate from among its members an executive
committee and other committees, each consisting of three or more
directors, and each of which, to the extent provided in such
resolution, shall have all the authority of the Board, except as to
the following matters:
(a) The submission to members of any action that by law requires
authorization of members;
(b) The filling of vacancies in the Board of Directors or in any
committee;
(c) The fixing of compensation of any director for serving on the
Board or on any committee;
(d) The amendment or repeal of the Bylaws, or the adoption of new
bylaws; and
(e) The amendment or repeal of any resolution of the Board of
Directors which by its terms shall not be so amendable or
repealable.
The Board of Directors may designate one or more directors as
alternate members of any such committee, who may replace any absent
member or members at any meeting of such committee. Each such
committee (and each member of such committee) shall serve at the
pleasure of the Board of Directors.
Each committee, by resolution adopted by a majority of the entire
committee, may appoint subcommittees and each such subcommittee may be
referred to as a "committee" of the Board. Such subcommittees, to the
extent provided in the resolution, shall have the authority of the
Board, except as to the matters enumerated in (a) - (e) above.
Article V: Meetings of Directors
Section 1. Place of Meetings
All meetings of the Board of Directors shall be held at the
principal office of the Cooperative or at such other places as the
Board of Directors, from time to time, may determine.
Section 2. Regular Meetings
Regular meetings of the Board of Directors shall be at such time
as may be fixed by the directors for regular meetings.
Section 3. Special Meetings
Special meetings of the Board of Directors may be called by the
president or the secretary and shall be called by the president at any
time at the request of any three directors.
Section 4. Notice
Written notice of each regular meeting of the Board of Directors
shall be mailed to each director not less than five days before each
regular meeting. Notice of special meetings shall be given not less
than five days before the meeting, if given by mail, or three days
before the meeting, if given by telephone or telegram, and such notice
shall state the purpose of the meeting. No other business shall be
transacted at a special meeting except with the unanimous consent of
all directors. Notice of meeting need not be given to any director who
submits a signed waiver of notice whether before or after the meeting,
or who attends the meeting without protesting, prior to the meeting or
at its commencement, the lack of notice to him.
Section 5. Quorum
A majority of all the directors shall constitute a quorum for the
transaction of business at any meeting.
Section 6. Official Acts of the Board
Each of the official acts of the Board of Directors shall be by a
majority vote of the directors present at any duly convened meeting.
The Board may take action without a meeting upon the unanimous written
consent of all the Directors.
Article VI: Officers
Section 1. Officers and Agents
(a) The officers of the Cooperative shall be a president, a vice
president, a secretary, a treasurer, and a general manager, who
shall be elected by the Board of Directors immediately after each
annual meeting of members or delegates. Any two of the aforesaid
offices, except those of president and secretary, may be held by
the same person.
(b) The Board may elect such other officers as it shall deem
necessary, who shall have such authority and shall perform such
duties as from time to time shall be prescribed by the Board.
Section 2. Term of Office
The officers of the Cooperative shall hold office for one year
and until their successors are chosen and qualify in their stead. Any
officer may be removed at any time by the affirmative vote of a
majority of the directors. If any office becomes vacant for any
reason, the vacancy shall be filled by the Board of Directors.
Section 3. President
The president shall be a member and director of the Cooperative;
he shall preside at all meetings of members, delegates and directors.
Section 4. Vice President
The vice president shall be a member and director of the
Cooperative, in the absence or disability of the president, he shall
perform the duties and exercise the power of the president. He shall
also perform such other duties as the Board of Directors shall
prescribe.
Section 5. Secretary
The secretary shall attend all meetings of the Board of Directors
and of the members or delegates and shall
(a) give or cause to be given a notice of all meetings of members,
shareholders, delegates and the Board of Directors,
(b) record or cause to be recorded all votes and minutes of the
proceedings of such meetings,
(c) have custody of the seal of the Cooperative and affix it to any
instrument when authorized by the Board of Directors,
(d) perform or cause to be performed such other duties as may be
prescribed by the Board of Directors.
Section 6. Treasurer
The treasurer shall
(a) have custody of the funds of the Cooperative,
(b) keep or cause to be kept full and accurate accounting of receipts
and disbursements in books belonging to the Cooperative,
(c) deposit or cause to be deposited, all money and other valuable
effects in the name and to the credit of the Cooperative in such
depositories as may be designated by the Board of Directors,
(d) disburse or cause to be disbursed, the funds of the Cooperative
as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements,
(e) render or cause to be rendered to the president, directors and
members an accounting of all his transactions as Treasurer and of
the financial condition of the Cooperative,
(f) give, or cause to be given to the Cooperative, if required by the
Board of Directors, a bond in such sum or sums with such surety
or sureties as shall be satisfactory to the Board, conditioned
upon the faithful performance of his duties and for restoration
to the Cooperative in case of his death, resignation, retirement,
or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his
control belonging to the Cooperative.
Section 7. General Manager
The General Manager shall be the chief executive officer of the
Cooperative and shall see that all orders and resolutions of the Board
of Directors are carried into effect.
Article VII: Commodity Committees
Section 1. Formation
There shall be a commodity committee representing the member(s)
for each of the major crops produced for the Cooperative as determined
by the Board of Directors.
Section 2. Committee Members
The number, distribution, and method of election of committee
members, each of whom shall be a member of the Cooperative, shall be
determined by the Board of Directors.
Section 3. Purpose
Commodity Committees are charged with the responsibility of
counseling and advising the Board of Directors and officers and
management of the Cooperative on matters generally associated with the
specific crop, the growers of which they represent. The committees
shall also act in matters referred to them by the membership committee
under Article II, Section 4 hereof, and shall have such other
functions as may be delegated by the Board.
Article VIII: Investment Summaries and Shares of Stock
Section 1. Investment Summaries
To the extent a determination to issue certificates is not made
pursuant to Section 2 of this Article, the Cooperative shall issue,
not less frequently than annually, investment summaries to each member
or shareholder of the Cooperative, which shall set forth the entire
interest of the member or shareholder in the Cooperative as of the
date it is issued.
Section 2. Certificates of Stock
The Board of Directors may determine to issue certificates for
some or all of its capital stock. The certificates of stock of the
Cooperative shall be numbered and entered in the books of the
Cooperative as they are issued. They shall exhibit the holder's name
and the number of shares and shall be signed by the president or vice
president and the treasurer or an assistant treasurer or the secretary
or an assistant secretary.
Section 3. Lost Certificates
Should it appear that a stock certificate issued by the
Cooperative has been lost, the Board of Directors may direct that a
new certificate or certificates be issued in place of any certificates
theretofore issued by the Cooperative, alleged to have been lost or
destroyed, upon the making of an affidavit of the fact by the person
claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board
of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or give the
Cooperative a bond in such sum and with such surety or sureties as may
direct as indemnity against any claim that may be made against the
Cooperative with respect to the certificate alleged to have been lost
or destroyed.
Section 4. Stock Ownership
The Cooperative shall be entitled to treat the holder of record
of any share or shares of stock as the holder in fact thereof, and
accordingly shall not be bound to recognize any equitable or other
claim to or interest in such share on the part of any other person
whether or not it shall have express or other notice thereof, except
as expressly provided by the laws of New York.
Section 5. Closing of Transfer Books or Fixing of Record Date
The Board of Directors may prescribe a period not exceeding fifty
days prior to the date of meetings of the members and shareholders or
prior to the last day on which the consent or dissent of members and
shareholders may be effectively expressed for any purpose without a
meeting, during which no transfer of stock on the books of the
Cooperative may be made; or in lieu of prohibiting the transfer of
stock, may fix a time not more than fifty days prior to the date of
any meeting of members and shareholders or prior to the last day on
which the consent or dissent of members and shareholders may be
effectively expressed for any purpose without a meeting, as the time
of which members and shareholders entitled to notice of and to vote at
such a meeting or whose consent or dissent is required or may be
expressed for any purpose, as the case may be, shall be determined;
and all persons who were holders of record of voting stock at such
time and no others shall be entitled to notice of and to vote at such
meeting or to express their consent or dissent, as the case may be.
The Board of Directors may also fix a time not exceeding fifty days
preceding the date fixed for the payment of any dividend or the making
of any distribution, or for the delivery of evidence of rights, or
evidence of interests arising out of any change, conversion or
exchange of capital stock, as a record time for the determination of
the members and shareholders entitled to receive any such dividend,
distribution, rights or interests, or at its option, in lieu of so
fixing a record time, may prescribe a period not exceeding fifty days
prior to the date for such payment, distribution or delivery during
which no transfer of stock on the books of the Cooperative may be
made.
Article IX: Processing and Marketing
Section 1. Agent Growers
A member of the Cooperative may on a temporary basis contract
with another grower who may, but need not be, a member of the
Cooperative, to fulfill all or a part of the member's obligation to
deliver crops to the Cooperative, provided such agreement is approved
by the Membership Committee of the Board of Directors. Such grower
shall be referred to as an "agent grower."
Section 2. Delivery of Members' Products
It shall be the duty of every member and agent grower to deliver
his crops to the Cooperative for marketing in accordance with the
terms and conditions of, and in the amounts specified in, the general
marketing agreement, the annual crop agreements, or any agreement
between him and the Cooperative. It shall be the duty of the
Cooperative to receive and market such crops in accordance with the
terms and conditions of all such agreements.
Section 3. Cooperative's Control
All handling of the products of members and agent growers
produced under agreement with the Cooperative shall upon delivery to
the Cooperative be under the full and exclusive control of the
Cooperative and its agents and representatives, and the Cooperative
shall have the full and unqualified right to take title to such
products and process, sell, mortgage, pledge or otherwise encumber,
dispose of or transfer them and to sue on, enforce and compromise any
rights or claims arising out of any transaction involving such
products. No member or agent grower shall have any rights or shall
exercise any control over any products delivered by virtue of having
furnished such products, other than as may be expressly provided in
these Bylaws or in any agreement with the Cooperative.
Section 4. Liens
The Cooperative shall have a lien upon all of the products of any
member or agent grower to be marketed through the Cooperative, whether
harvested or growing, and upon all sums payable to the member or agent
grower, as security for the payment to the Cooperative of all sums
owing from such member or agent at any time, including the sums due as
damages pursuant to any crop purchase or other agreement.
Section 5. Non-Member Dealings
The Cooperative shall have the right to handle the products of or
otherwise deal with non-members upon such terms and conditions as the
Board of Directors may from time to time determine, but the total
value of all such products shall not exceed the total value of all
products handled for its members.
Section 6. Other Activities
The Cooperative shall have the right to engage in such other
activities, including but not limited to, the furnishing of equipment
and supplies to members and agent growers, research and advertising,
as may be conducive to the attainment of its purposes.
Article X: Proceeds and Disposition of Proceeds
Section 1. Commercial Market Value
The Board of Directors shall each year determine the commercial
market value of each crop marketed through the Cooperative. Such
commercial market value is to be a weighted average of the prices paid
by commercial processors for similar crops sold for similar or related
uses in the same or competing marketing areas, as determined by the
Board of Directors in agreement with the Board of Directors of
Agrilink Foods.
Section 2. Pools
The Cooperative shall operate with a single pool, unless the
Board of Directors determines that additional pools are advisable. The
term "pool" means the grouping together each fiscal year, for
accounting purposes, of the operations concerned with the
determination of proceeds derived from a commodity or group of
commodities.
Section 3. Patronage Proceeds
The patronage proceeds of the Cooperative shall be its gross
receipts derived from sources which under law qualify as patronage
income, including income from the sale of raw products and all income
from other patronage sources, less its operating expenses properly
attributable to the production of such patronage income, including
overhead, interest, dividends on capital stock to the extent funded
from current earnings, maintenance, depreciation, obsolescence,
depletion, bad debts, and other proper costs, all as determined by the
Board of Directors in accordance with regular business practices and
sound accounting principles. Since entering into the Marketing and
Facilitation Agreement with Agrilink Foods, Inc. dated November 3,
1994, as amended, the Cooperative generally does not directly incur
overhead, interest, maintenance, depreciation, obsolescence,
depletion, and bad debts which are incurred at the Agrilink Foods
level. Capital gains and capital losses shall be distributed as
determined by the Board of Directors in its discretion after
considering the current federal income tax law and regulations.
Section 4. Members' Share of Patronage Proceeds; Reduction of
Commercial Market Value
Each member's and each agent grower's pro rata share of the
patronage proceeds shall be determined annually by dividing the
patronage proceeds by the total raw product value (commercial market
value times total quantity delivered); this gives the percent of
commercial market value earned. The multiplication of that percentage
by the raw product value delivered by each member and agent grower
determines the pro rata share of patronage proceeds of each member and
agent grower.
In any year in which patronage proceeds as determined pursuant to
Sections 3, 4 and 8 are less than commercial market value determined
pursuant to Section 1, there shall be paid or allocated to each member
and agent grower as the purchase price for his crops as provided in
Section 5 only the amount of commercial market value as determined
pursuant to Section 1 reduced by the amount equal to each member's or
agent grower's share of the difference between such commercial market
value and the patronage proceeds. In addition, in any such year in
which patronage proceeds are less than commercial market value, there
shall be paid to each member and agent grower his share of funds
available for such payment pursuant to any commercial market value
stabilization program adopted by the Board of Directors, up to a total
payment or allocation of full commercial market value as determined
under Section 1 or the maximum amount available under the program,
whichever is less.
In any year in which patronage proceeds as determined pursuant to
Sections 3, 4 and 8 are less than commercial market value determined
pursuant to Section 1, any reduction in accordance with the preceding
paragraph of this Section 4 shall be accomplished as determined by the
Board of Directors of the Cooperative.
Notwithstanding any provision herein to the contrary, the Board
of Directors of the Cooperative may elect to retain a portion or all
of the patronage proceeds otherwise payable as necessary for the
operations of the Cooperative or its subsidiary, Agrilink Foods, Inc.,
and for the establishment of such reserve funds as the Board of
Directors deems fair and reasonable.
Section 5. Payment of Patronage Proceeds
Without any further action on the part of any officer or the
Board of Directors of the Cooperative, the Cooperative shall be
absolutely liable for the payment or allocation as herein provided to
each member and agent grower of the pro rata share of patronage
proceeds of each member and agent grower determined pursuant to
Section 4. Such payment allocation shall be accomplished annually
within eight and one-half months of the close of the fiscal year of
the Cooperative.
Section 6. Retention of Patronage Proceeds
In any year in which patronage proceeds as determined pursuant to
Sections 3, 4, and 8 are greater than commercial market value
determined pursuant to Section 1, and upon such terms and conditions
and in such amounts as are deemed advisable in the discretion of the
Board of Directors, a portion of the patronage proceeds may be
retained in the Cooperative for use as working capital or for such
other purposes as may be determined by the Board of Directors. Such
portion of the patronage proceeds so retained shall be allocated among
the members and agent growers entitled thereto, and the Cooperative
shall cause written notice of such allocation to be sent to each such
member and agent grower. Subject to any limitations or restrictions
that may be imposed in the financing documents, the balance of the
patronage proceeds not so retained shall be paid in cash.
Section 7. Taxable Income of Members
Each member of the Cooperative, and, as applicable, each agent
grower as described in Article IX, Section 1, shall take into account,
pursuant to Section 1385 and 1388 of the Internal Revenue Code of 1986
as amended, the stated dollar amount of any and all written notices of
allocation received from the Cooperative and shall include such stated
dollar amount in his gross income for tax purposes for the year in
which such written notice of allocation is received.
Section 8. Non-Patronage Proceeds
The non-patronage proceeds of the Cooperative shall be its gross
receipts derived from all sources which under law do not qualify as
patronage income, less all expenses properly attributable to the
production of such non-patronage income. Non-patronage proceeds shall
be used in behalf of the Cooperative and its members in accordance
with such lawful purposes as may be determined by the Board of
Directors. In any year in which non-patronage expenses exceed
non-patronage income so that there is a loss from the non-patronage
activities of the Cooperative, such non-patronage loss shall be
deducted from patronage proceeds determined in accordance with
Sections 3 and 4 of this article before payment and allocation of
patronage proceeds is made pursuant to Sections 5 and 6 of this
article.
Section 9. Dissolution.
(a) Upon dissolution or other termination of the Cooperative or its
business, after the payment of all debts, amounts allocated to
members but retained by the Cooperative shall be paid in full, or
on a pro rata basis without priority, before any liquidating
dividends are declared on or with respect to capital stock of the
Cooperative.
(b) After the payments provided for above in subsection (a), the
holders of the Cooperative's preferred stock (the "Preferred
Stock") shall be entitled to be paid, before any sums shall be
paid or any assets distributed to holders of common stock out of
assets of the Cooperative available for distribution to holders
of the Cooperative's capital stock, their liquidation amounts or
preferences as provided in the Cooperative's Certificate of
Incorporation.
(c) After payments to the holders of Preferred Stock, and subject to
the preferences upon liquidation, dissolution or winding up of
the holders of Preferred Stock, holders of each share of common
stock shall be entitled to be paid, out of the assets of the
Cooperative available for distribution to holders of the
Cooperative's capital stock, the sum of $5.00 (plus declared but
unpaid dividends) per share of common stock. If the assets of the
Cooperative are insufficient to permit payment in full to holders
of common stock as provided in this Section 9(c), then the entire
assets of the Cooperative available for distribution shall be
distributed ratably among the holders of the common stock
according to the respective amounts which would be payable in
respect of the shares held by them upon such distribution if all
amounts payable on or with respect to said shares were paid in
full.
(d) After payment shall have been made in full to the holders of
preferred and common stock, all remaining assets available for
distribution shall be distributed among the members to whom
interests in funds retained by the Cooperative have been
allocated during the preceding five fiscal years and the fiscal
year of dissolution in such proportion as the total of the
amounts allocated to each member during such period shall bear to
the total of the amounts allocated to all members but retained by
the Cooperative during such period.
Section 10. Guarantee
The Cooperative may, by resolution of the Board of Directors,
guarantee and endorse the notes, checks, drafts or borrowings of any
other corporation, and any bank or trust company shall be fully
protected under any such guarantee or endorsement upon receipt of a
copy of any such resolution duly certified by the secretary of the
Cooperative.
Section 11. Fiscal Year
The fiscal year of the Cooperative shall be as determined from
time to time by the Board of Directors of the Cooperative.
Article XI: Dividends
Section 1. Declaration
Dividends upon the capital stock of the Cooperative may be
declared by the Board of Directors at any regular or special meeting,
subject to the provisions of law and of the Certificate of
Incorporation relating thereto.
Article XII: Miscellaneous Provisions
Section 1. Seal
The seal of the Cooperative shall be circular in form and contain
the name of the Cooperative, the year of its organization and the
words, "Corporate Seal, New York". The seal may be used by causing it
to be impressed directly on the instrument or writing to be sealed, or
upon an adhesive substance affixed thereto. The seal on any corporate
instrument may be a facsimile, engraved or printed.
Section 2. Roberts Rules of Order
To the extent that issues concerning the operation of the
Cooperative are not resolved by law, the Certificate of Incorporation,
or these Bylaws, are to be determined in accordance with the most
recent edition of Roberts Rules of Order published at the time such
issue arises.
Section 3. Amendments
These Bylaws may be amended by the Board of Directors as set
forth in Article IV, Section 8, hereof, and may also be amended or
repealed, or new bylaws adopted, at any meeting of members or
delegates by the affirmative vote of two-thirds of the votes cast by
the members voting, either in person or by mail, providing the
substance of the proposed amendment has been inserted in the notice of
such meeting.