EXHIBIT 3.2
BYLAWS
OF
CENEX HARVEST STATES COOPERATIVES
(EFFECTIVE DECEMBER 1, 2000)
ARTICLE I.
MEMBERSHIP
SECTION 1 - QUALIFICATIONS. Producers of agricultural products
and associations of producers of agricultural products who are eligible under
Article IV, Section 2 of the Articles of Incorporation of this cooperative and
who patronize this cooperative under conditions established by the Board of
Directors of this cooperative or as elsewhere provided in these Bylaws may, upon
approval or pursuant to the authorization of the Board of Directors, become
members of this cooperative. Each transaction between this cooperative and each
member shall be subject to and shall include as a part of its terms each
provision of the Articles of Incorporation of this cooperative and these Bylaws,
whether or not the same be expressly referred to in said transaction.
SECTION 2 - CLASSES OF MEMBERS. In accordance with the
Articles of Incorporation, there shall be three classes of members of this
cooperative, which are hereby designated as the "Cooperative Association" class,
"Individual Member" class and the "Defined Member" class. Membership in a
particular class of members shall be determined as follows:
(a) COOPERATIVE ASSOCIATION MEMBERS. All members which are
cooperative associations shall belong to and be part of the Cooperative
Association class of members and shall become known and be designated as
"Cooperative Association Members."
(b) INDIVIDUAL MEMBERS. All members who are individuals shall
belong to and be part of the Individual Member class of members, and shall
become known and be designated as "Individual Members;" and
(c) DEFINED MEMBERS. All members who are holders of Equity
Participation Units (as described in the Articles of Incorporation of this
cooperative) shall belong to and be part of the Defined Member class of members,
and shall become known and be designated as "Defined Members."
SECTION 3 - DEFINED MEMBERS AND DEFINED BUSINESS UNITS.
(a) DEFINED BUSINESS UNITS. Each Defined Member holding Equity
Participation Units in a Defined Business Unit (as such unit is established in
the Articles of Incorporation) shall be eligible to receive patronage
distributions from the Defined Business Unit as a separate allocation unit.
(b) DELIVERY RIGHTS AND OBLIGATIONS. The delivery rights and
obligations of each Defined Member shall be as specified in the member marketing
agreement between such Defined Member and this cooperative. Each such member
marketing agreement shall at all times be subject to modification by this
cooperative upon written notice to the Defined Member in question, provided that
such modification is first approved by Defined Members holding a majority of the
voting power of the Defined Business Unit in question who are present and voting
at a meeting of Defined Members holding Equity Participation Units in such
Defined Business Unit, where the notice of such meeting contains a statement of
the proposed modification.
(c) DEFINED MEMBER BOARDS. Each Defined Business Unit shall be
represented by a Defined Member Board. The initial members of each Defined
Member Board shall be selected by the Board of Directors of this cooperative.
Subsequently, the members of the Defined Business Unit in question shall be
entitled to elect, on a one Defined Member/one vote basis, the members of the
Defined Member Board. Each Defined Member Board shall be made up of at least
five (5) but not more than ten (10) individuals. Each member of a Defined Member
Board must be (i) either a Defined Member or a representative of a Defined
Member, and (ii) in good standing as a Defined Member and in full compliance
with delivery obligations in and to such member's Defined Business Unit;
provided, however, that no employee of this cooperative may serve as a member of
any Defined Member Board. Each Defined Member Board shall be headed by a
Chairperson selected by and from the Board of Directors of this cooperative.
Each Defined Member Board shall meet at least quarterly (one of which meetings
may be its annual meeting), and shall be charged with reflecting Defined Member
concerns and providing a direct communication mechanism to the Board of
Directors of this cooperative. Individuals serving on a Defined Member Board
shall serve for staggered terms of three (3) years and until their successors
are elected and have qualified.
SECTION 4 - TERMINATION OF MEMBERSHIP. If the Board of
Directors determines that a member has become ineligible for membership in this
cooperative, such member shall have no rights or privileges on account of such
membership in the management of the affairs of this cooperative, and the
membership of such member may be terminated by the Board of Directors.
Membership may, at the discretion of the Board of Directors, be terminated
whenever the Board of Directors by resolution finds that a member has:
(a) intentionally or repeatedly violated any provision of the
Articles of Incorporation, Bylaws or Board policies of this cooperative; or
(b) failed to patronize this cooperative for a period of
twelve (12) consecutive months; or
(c) breached any contract with this cooperative; or
(d) willfully obstructed any lawful purpose or activity of
this cooperative; or
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(e) remained indebted to this cooperative for ninety (90) days
after such indebtedness becomes payable; or
(f) died or legally dissolved;
provided, however, that termination of any member's membership as a result of
any of the circumstances listed in paragraphs (a) through (f) above shall not be
deemed to revoke such member's consent contained in Article VIII hereof but
rather such member may only revoke such consent in writing. Upon termination of
membership said member shall thereafter have no voting rights in this
cooperative. A terminated member's patronage credits shall be revolved or
retired in the same manner as the patronage credits of members. No action taken
hereunder shall impair the obligations or liabilities of either party under any
contract with the cooperative which may be terminated only as provided therein.
ARTICLE II.
MEETINGS OF MEMBERS
SECTION 1 - ANNUAL AND SPECIAL MEETINGS. The annual meeting of
the members of this cooperative shall be held at a time and place fixed by the
Board of Directors. Special meetings of the members of this cooperative may be
called by the Board of Directors or upon the written petition of twenty percent
(20%) of the members. The special members' meeting shall be held at the time and
place specified in the notice of the meeting, and the notice shall also state
the purpose of the special members' meeting. No business shall be considered at
the special members' meeting except as mentioned in the notice of the meeting.
SECTION 2 - NOTICE OF MEETINGS. Notice of the annual meeting
of the members of this cooperative shall be published or mailed as prescribed by
Minnesota Statutes Section 308A.611, Subdivision 5. Notice of a special meeting
of the members of this cooperative shall be published or mailed as prescribed by
Minnesota Statutes Section 308A.615, Subdivision 2. The notice of meetings must
be published at least two weeks before the date of the meeting or mailed at
least 15 days before the date of the meeting. The notice shall state the date,
time, and place of the meeting, and in the case of a special meeting, the
purposes for which the meeting is called. The Secretary shall execute a
certificate which contains a copy of the notice, shows the date of mailing or
publication (as the case may be), and states the notice was mailed or published
(as the case may be) as prescribed by these Bylaws. The certificate shall be
made a part of the meeting. The failure of any member to receive notice shall
not invalidate any action which may be taken by the members at a meeting.
SECTION 3 - VOTING POWER. The voting power of the members of
this cooperative shall be exercised as follows:
(a) COOPERATIVE ASSOCIATION MEMBERS. Each Cooperative
Association Member shall be entitled to the number of permitted votes designated
by the Board of Directors of this cooperative, which shall be determined based
on the following formula:
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(i) One (1) vote for each $10,000, or major fraction
thereof, of the average annual business transacted with this
cooperative and with CENEX, Inc. (combined sales to and purchases from)
during the three years ending on the last day of this cooperative's
fiscal year last ended prior to the meeting; plus
(ii) One (1) vote for each $1,000, or major fraction
thereof, of equity issued by this cooperative as a patronage refund and
standing on the books of this cooperative in the name of such
Cooperative Association Member.
For purposes of Section 3(a)(i), the dollar value of commodities delivered by a
Defined Member to a Cooperative Association Member for handling by and on behalf
of this cooperative and the Defined Member shall be included in the calculation
for determining the number of permitted votes of the Cooperative Association
Member. For purposes of Section 3(a)(ii), the face amount of any Equity
Participation Units issued to and held by a Cooperative Association Member shall
be included in the determination of the amount of equity in this cooperative
held by such Cooperative Association Member. In determining the number of
permitted votes of a Cooperative Association Member, the Board of Directors of
this cooperative shall give due consideration to the membership eligibility
criteria set forth in these Bylaws and the Articles of Incorporation of this
cooperative, and shall have the authority to suspend or adjust voting power to
reflect such criteria, including without limitation the authority to establish
reasonable procedures to address special circumstances, for example, procedures
to annualize the average annual business of Cooperative Association Members
having less than three full years of business included in the averaging period
and procedures to equitably measure the business transacted by Cooperative
Association Members that have acquired or merged with other entities that did
business with this cooperative or with CENEX, Inc. within the averaging period.
The Board of Directors of this cooperative also may require such supporting
information from Cooperative Association Members as it deems necessary or
appropriate to determine the number of permitted votes of the Cooperative
Association Members hereunder.
Each Cooperative Association Member shall be represented at members' meetings of
this cooperative by elected or appointed delegates, which delegates shall
exercise the voting rights of such Cooperative Association Member at such
meetings as hereinafter provided.
(b) INDIVIDUAL MEMBERS AND DEFINED MEMBERS., Except for votes
of Defined Members for elections to Defined Member Boards, each Individual
Member or Defined Member shall be grouped with other Individual Members and
Defined Members in local units (hereinafter referred to as "Patrons'
Associations") as may be established from time to time by the Board of Directors
of this cooperative. An Individual Member or a Defined Member may, however,
elect to exercise such Individual Member's or Defined Member's vote
individually, in which case such Individual Member shall have one (1) vote, only
after obtaining a certificate on a form provided by this cooperative and signed
by the manager of the line elevator, feed mill or other facility patronized by
such Individual Member, certifying that such Individual Member is a member of
this cooperative. A Defined Member who intends to exercise such Defined Member's
vote individually hereunder shall be entitled to do so after giving notice of
such intent to this cooperative on a form provided by this cooperative. SUCH
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CERTIFICATE OR NOTICE (AS THE CASE MAY BE) SHALL BE SENT TO THIS COOPERATIVE BY
SUCH MEMBER OR MANAGER NO LESS THAN TEN (10) DAYS OR MORE BEFORE THE ANNUAL OR
SPECIAL MEETING CONCERNED, PROVIDED THAT IN THE DISCRETION OF THE CREDENTIALS
COMMITTEE, ANY CERTIFICATES OR NOTICES (AS THE CASE MAY BE) SENT THEREAFTER MAY
ALSO BE HONORED. [IS THIS ENOUGH TIME TO REDUCE THEIR PATRON'S ASSOCIATION
COUNT?]
If an Individual Member or a Defined Member elects to cast their vote
individually, such Member's business transacted with and equity held by such
Member in this Company shall be excluded from determining the number of votes
held by such Member's Patron's Association pursuant to Sections 3(c)(i) and
3(c)(ii) below.
Each Defined Member shall have one (1) vote for the election of Defined Member
Boards which shall be cast individually in person at an annual or special
meeting (as hereinafter provided), or by mail when a mail ballot has been
provided for
(c) PATRONS' ASSOCIATIONS. The delegates representing
Individual Members and Defined Members (as provided herein) grouped in each
Patrons' Association shall be entitled (in the aggregate) to the number of
permitted votes designated by the Board of Directors of this cooperative, which
shall be determined based on the following formula:
(i) One (1) vote for each $10,000, or major fraction
thereof, of the average annual business transacted with this
cooperative (combined sales to and purchases from) by the Individual
Members and Defined Members grouped in such Patrons' Associations,
during the three years ending on the last day of this cooperative's
fiscal year last ended prior to the meeting; plus
(ii) One (1) vote for each $1,000, or major fraction
thereof, of equity issued by this cooperative as a patronage refund and
standing on the books of this cooperative in the name of the Individual
Members and Defined Members grouped in such Patrons' Associations,
calculated on an aggregate basis.
For purposes of Section 3(c)(ii), the face amount of any Equity Participation
Units issued to and held by an Individual Member or a Defined Member shall be
included in the determination of the amount of equity held by such members. In
determining the number of permitted votes of a Patron Association, the Board of
Directors of this cooperative shall have the authority to establish reasonable
procedures to address special circumstances. For example, procedures to
annualize the average annual business of Individual Members and Defined Members
having less than three full years of business included in the averaging period
and procedures to equitably measure the business transacted by Individual
Members and Defined Members that patronized entities that were acquired or
merged with this cooperative within the averaging period. The Board of Directors
of this cooperative also may require such supporting information from or
relating to the Individual Members and Defined Members grouped in Patrons'
Associations as it deems necessary or appropriate to determine the number of
permitted votes of the Patrons' Associations hereunder.
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The Individual Members and Defined Members grouped in each Patrons' Association
shall be represented at members' meetings of this cooperative by elected
delegates, which delegates shall exercise the voting rights of the Individual
Members and Defined Members grouped in such Patrons' Association at such
meetings as hereinafter provided. Such delegates and their alternates shall be
elected on a one member/one vote basis by the Individual Members and the Defined
Members grouped in the Patrons' Association, at an annual meeting of such
Patrons' Association held following reasonable notice, and pursuant to such
other procedures as the Board of Directors of this cooperative may establish
from time to time. In no instance shall managers or other employees of this
cooperative appoint such delegates or alternates. Such delegates shall exercise
the same powers at such members' meetings as the delegates of Cooperative
Association Members may exercise.
SECTION 4 - MANNER OF VOTING. At annual and special meetings
of members of this cooperative, the designated number of permitted votes of
members as hereinabove provided shall be cast in the following manner:
(a) Each Individual Member and each Defined Member who is
certified or has provided notice to vote individually as further provided in
these Bylaws shall be entitled to cast such Member's own vote in person.
(b) Each Cooperative Association Member and the Individual
Members and Defined Members grouped in each Patrons' Association shall cast its
designated number of permitted votes through duly selected delegates (or their
duly selected alternates). The maximum number of delegates that may represent a
Cooperative Association Member or the Individual Members and Defined Members
grouped in a Patrons' Association at members' meetings, and the maximum number
of votes that each delegate may carry at such meetings, shall be as authorized
by the Board of Directors.
(c) There shall be no mail voting except in cases where, in
the notice of the meeting, the Board of Directors of this cooperative shall have
submitted a specific issue or issues for a mail vote. In such case, a mail vote
cast by a Cooperative Association Member shall be binding upon the delegates
representing such Cooperative Association Member at the meeting (if any) on the
issue or issues so submitted. The voting power of a Cooperative Association
Member may not be split between mail voting and voting in person by delegates of
the Cooperative Association Member upon an issue or issues submitted for mail
vote. No combination of mail voting and voting in person by delegates of the
same Patrons' Association upon an issue or issues submitted for mail vote shall
be permitted. An attempt by a Cooperative Association Member or delegates of a
Patrons' Association to do such splitting or combining shall be treated as
having the effect of not voting on the issue or issues so submitted. Delegates
of Cooperative Association Members and Patrons' Associations which have not cast
a vote by mail upon the issue or issues submitted for mail vote shall cast the
vote or votes of the respective members they are representing upon said issue or
issues in the manner prescribed by the chairman of said meeting. Nothing in this
section shall, however, prevent an annual or special meeting of this cooperative
from considering and acting upon issues in addition to those submitted for mail
vote, to the extent permitted by law; and such issues shall be voted upon by
delegates (and alternates) in the manner hereinabove provided for other than
mail votes.
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(d) The mail vote of a Cooperative Association Member shall be
cast as determined by the Board of Directors of the Cooperative Association
Member and the voting power of such mail vote may not be split between yes and
no votes, unless expressly authorized by the Board of Directors of this
cooperative in the notice of the meeting which provides for the mail vote. The
mail ballot used by a Cooperative Association Member to cast its vote shall
contain the certificate of the secretary or the president of the Cooperative
Association Member that the vote shown thereon is so cast by the direction of
said member's Board of Directors and stating such supporting information as may
be prescribed by the Board of Directors of this cooperative.
(e) The mail vote cast by each Patrons' Association shall be
determined by the delegate or delegates last certified by the Patrons'
Association to this cooperative as provided in these Bylaws. The mail ballot
used by the delegate or delegates of a Patrons' Association to cast its mail
vote shall contain the certificate of the delegate or delegates that the vote
shown thereon is so cast, and stating such supporting information as may be
prescribed by the Board of Directors of this cooperative.
(f) The mail vote cast by each Individual Member or Defined
Member of this cooperative shall be on such form of ballot as may be prescribed
by the Board of Directors of this cooperative, and shall include (i) in the case
of Individual Members, the certificate that such member is a member of this
cooperative; and (ii) in the case of a Defined Member, the notice of intent to
vote individually, in either case as provided for in Section 3(b) of this
Article II.
(g) There shall be no voting by proxy or under power of
attorney at any annual or special meeting of this cooperative.
SECTION 5 - QUORUM AND REGISTRATION.
(a) A quorum necessary to the transaction of business at any
annual or special meeting of this cooperative shall be at least ten percent
(10%) of the total number of members in this cooperative represented in person
by delegates or by mail votes when the members do not exceed five hundred (500)
in number. If the members of this cooperative exceed five hundred (500) in
number, fifty (50) members of this cooperative represented in person by
delegates (or alternates) or by mail votes shall constitute a quorum. In
determining a quorum at any meeting, on a question submitted to a vote by mail,
as hereinabove provided, members represented in person by delegates (or
alternates) or represented by mail vote shall be counted. The fact of the
attendance of a sufficient number of members to constitute a quorum shall be
established by a registration of the members of this cooperative present at such
meeting, which registration shall be verified by the Chairman and Secretary of
this cooperative and shall be reported in the minutes of the meeting.
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(b) Registration of Individual Members and Defined Members and
of delegates (or alternates) of Cooperative Association Members and Patrons'
Associations shall close at such hour on the day for which an annual or special
meeting is called (or in case it is called for a series of days, at such hour on
the first day thereof) as the Board of Directors of this cooperative shall
determine and specify in the Notice of Meeting, or at such later time to which
the close of registration may be extended by majority vote of those registered
before said initial time for closing of registration. Persons otherwise eligible
to vote, either as Individual Members, Defined Members or as delegates or
alternates, but not registered as in attendance at or before said time (original
or as extended), shall have no right to vote in any of the affairs of the
meeting (including, but not limited to, election of Directors).
(c) Each Cooperative Association Member and Patrons'
Association shall certify its delegates and alternates to this cooperative, in
the manner prescribed by the Board of Directors of this cooperative. The
delegates (and alternates) so certified, and found by this cooperative to be
eligible to be seated at the meeting or meetings of this cooperative, shall
represent their Cooperative Association Members or Patrons' Associations, as the
case may be, to the extent and in the manner provided in this Article. In
matters of which advance notice has been given, such delegates and alternates
shall endeavor to inform themselves as to the views of the membership of the
Cooperative Association Member or Patrons' Association which they represent.
(d) No individual shall serve as a delegate for more than one
member of this cooperative. Delegates and alternates representing Patrons'
Associations must be an Individual Member or Defined Member grouped with such
Patrons' Association. The Board of Directors may establish such additional
eligibility criteria, procedures, standards and structure with respect to the
delegate system of this cooperative as it from time to time deems advisable. No
employee of this cooperative shall serve as a delegate or alternate at any
meeting of this cooperative; if any such person shall be certified as a delegate
or alternate of a member, such person shall nevertheless not be seated as such.
(e) Duly selected delegates and alternates certified in the
manner described above shall serve in such capacity in accordance with these
Bylaws until such delegate's (or alternate's) successor is selected and
qualified, but in no event shall such certificate of selection be valid for more
than two years; provided, further, that the election or appointment of any
delegate or alternate may be revoked by the Cooperative Association Member that
a delegate or alternate represents (effective as of the date this cooperative
receives notice of such revocation) or, in the case of delegates or alternates
representing Patrons' Associations, the election shall terminate in the event
the delegate or alternate ceases to be an Individual Member or Defined Member of
this cooperative.
(f) A cooperative association which conducts business with
this cooperative on a patronage basis as a nonmember patron in the manner
prescribed by these Bylaws may have a representative present at a meeting of the
members of this cooperative only as authorized by the Board of Directors of this
cooperative. A representative so authorized shall have no voting rights and
shall only be recognized to speak at the discretion of the Chairman of the
meeting.
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(g) Nothing herein shall prevent Individual Members or Defined
Members of this cooperative or of Cooperative Association Members, who are not
delegates to the annual meetings or special meetings of this cooperative from
serving as chairperson of a regional meeting or as chairperson or member of a
committee.
(h) Each member of the Board of Directors of this cooperative
shall have the right to speak on any subject during annual or special meetings
of this cooperative.
ARTICLE III.
DIRECTORS
SECTION 1 - BOARD OF DIRECTORS. The business and affairs of
this cooperative shall be governed by the Board of Directors of this
cooperative, which shall consist of seventeen (17) directors.
SECTION 2 - DIRECTOR QUALIFICATIONS. The qualifications for
the office of director shall be as follows:
(a) At the time of the election, the individual must be less
than the age of 68.
(b) The individual must be a member of this cooperative or a
member of a Cooperative Association Member.
(c) The individual must reside in the Region from which he or
she is to be elected.
(d) The individual must be an active farmer or rancher. For
purposes of this section, "active farmer or rancher" means an individual whose
primary occupation is that of a farmer or rancher.
(e) The definition of "farmer or rancher" shall not include
anyone who is a full-time employee of this cooperative, or of a Cooperative
Association Member.
(f) The individual must currently be serving or shall have
served at least one full term as a director of a Cooperative Association Member
of this cooperative.
(g) The qualifications set forth in this Section 2 shall
become effective immediately upon the adoption of these Bylaws, except that the
qualifications in (f) above shall not apply to any individual serving as a
director of this cooperative on the date of said adoption.
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SECTION 3 - ELECTION OF DIRECTORS.
(a) At each annual meeting of the members of this Association,
directors shall be elected to fill vacancies created by expired terms. The term
of office of such directors shall be three (3) years and until their respective
successors are elected and qualified.
(b) The nomination and election of directors of this
cooperative shall be by Region. The territory served by this cooperative shall
be divided into the following Regions, with the Board of Directors, composed of
the following number of directors from each Region:
REGION NUMBER 1 - which shall include the State of Minnesota,
and shall be represented by five (5) persons who must be residents of
Region Number 1;
REGION NUMBER 2 - which shall include the States of Montana
and Wyoming, and shall be represented by one (1) person who must be a
resident of Region Number 2;
REGION NUMBER 3 - which shall include the State of North
Dakota, and shall be represented by (3) persons who must be residents
of Region Number 3;
REGION NUMBER 4 - which shall include the State of South
Dakota, and shall be represented by two (2) persons who must be
residents of Region Number 4;
REGION NUMBER 5 - which shall include the States of Wisconsin,
Michigan and Illinois, and shall be represented by two (2) persons who
must be residents of Region Number 5;
REGION NUMBER 6 - which shall include the States of Alaska,
Arizona, California, Idaho, Oregon, Washington and Utah, and shall be
represented by two (2) persons who must be residents of Region Number
6;
REGION NUMBER 7 - which shall include the States of Iowa and
Missouri, and shall be represented by one (1) person who must be a
resident of Region Number 7; and
REGION NUMBER 8 - which shall include the States of Colorado,
Nebraska, Kansas, Oklahoma and Texas, and shall be represented by one
(1) person who must be a resident of Region Number 8.
(c) From time to time, the Board of Directors shall review
member representation. Future redistricting plans shall be designed to maintain
equitable representation. Any redistricting plan shall be determined by using a
weighted formula based on sales/purchases and equity by Region. All future
redistricting plans shall be subject to member approval at either a special or
annual meeting of the members of this cooperative.
(d) With respect to elections at each annual meeting of the
members of this cooperative, Individual Members, Defined Members, and delegates
from each Region who are registered in accordance with these Bylaws shall meet
separately by Region for the purpose of nominating and electing the directors of
this cooperative from such Region. At each such regional meeting, nominations
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for the election of directors shall be made by the members or delegates of this
cooperative and may be made by balloting, nominating committee, petition of
members or from the floor; provided that nominations from the floor shall be
requested in addition to nominations made by petition or nominating committee.
Before each annual meeting of the members of this cooperative, the Board of
Directors may appoint a nominating committee to supervise the nominating
procedure for election of directors, which procedure shall be prescribed by the
Board of Directors.
(e) When nominations have been closed, the Individual Members,
Defined Members and delegates at each regional meeting shall vote on each of the
nominees, and the director or directors from such Region shall be elected by a
majority of the votes cast at such regional meeting. The Board of Directors
shall have the power and authority to adopt a policy and procedure for assigning
to an existing Region those members who are not residents of any Region
established in Section 3(b) above. Such policy and procedure may be amended from
time to time at the discretion of the Board of Directors. Each such regional
election shall be binding upon the annual meeting and upon this cooperative,
without any ratification or right of rescission or veto by Individual Members or
Defined Members or delegates, or any combination thereof, of other Regions. A
temporary Chairman of each such regional meeting shall be selected by the
Chairman of this cooperative, to serve until a Chairman of such regional meeting
is elected by the Individual Members, Defined Members and delegates at such
regional meeting. Election of directors shall be by balloting when there are two
or more nominees for a position to be filled, or when there are more nominees
than there are positions to be filled.
SECTION 4 - VACANCIES. Each vacancy occurring on the Board of
Directors may be filled by the remaining directors until the next annual meeting
of the members when the members shall elect a director to serve for the
unexpired term, provided that vacancies on the Board created by any amendment of
the Articles of Incorporation or Bylaws shall first be filled at the annual
meeting of the members next following the adoption of such amendment unless
otherwise provided in the amendment.
SECTION 5 - MEETINGS. The Board of Directors shall meet
regularly at such times and places as the Board may determine. Special meetings
may be called by the Chairman or any three directors. All meetings shall be held
on such notice as the Board may prescribe provided that any business may be
transacted at any meeting without specification of such business in the notice
of such meeting. Directors may participate in any such meeting by means of a
conference telephone conversation or other comparable method of communication by
which all persons participating in the meeting can hear and communicate with
each other; and for purposes of taking any action at the meeting, any such
directors shall be deemed present in person at the meeting.
SECTION 6 - QUORUM AND VOTING. A quorum shall consist of a
majority of the directors. A majority vote of the directors present shall decide
all questions except where a greater vote is required by the Articles of
Incorporation, by these Bylaws or by law.
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SECTION 7 - ACTION WITHOUT MEETING. Any action required or
permitted to be taken at a meeting of the Board of Directors may be taken
without a meeting if all directors consent thereto in writing and the writing or
writings are held with the minutes or proceedings of the Board of Directors.
SECTION 8 - BORROWINGS. The Board of Directors shall have
power to authorize and approve the borrowing of money and the pledging and
mortgaging of any or all of the assets of this cooperative as security for the
sums so borrowed.
ARTICLE IV.
DUTIES OF DIRECTORS
SECTION 1 - GENERAL POWERS. The business and affairs of this
cooperative shall be governed by the Board of Directors of this cooperative. The
Board of Directors shall exercise all of the powers of this cooperative except
such as are by law, the Articles of Incorporation, or these Bylaws conferred
upon or reserved to the members. The Board of Directors shall adopt such
policies, rules, regulations, and actions not inconsistent with law, the
Articles of Incorporation, or these Bylaws, as it may deem advisable. The Board
of Directors may establish one or more than one committee having such powers and
authority as are delegated to it by the Board of Directors.
SECTION 2 - BONDS AND INSURANCE. The Board of Directors may
require the officers, agents, or employees charged by this cooperative with
responsibility for the custody of any of its funds or property to give adequate
bonds. Such bonds, unless cash security is given, shall be furnished by a
responsible bonding company and approved by the Board of Directors and the cost
thereof shall be paid by this cooperative. The Board of Directors shall provide
for the adequate insurance of the property of the cooperative, or property which
may be in the possession of this cooperative, or stored by it, and not otherwise
adequately insured, and in addition adequate insurance covering liability for
accidents to all employees and the public.
SECTION 3 - ACCOUNTING SYSTEM AND AUDIT. The Board of
Directors shall install and maintain an adequate system of accounts and records.
At least once in each year the books and accounts of this cooperative shall be
audited and a review of such audit shall be published annually, and a report of
such audit shall in addition be made at the next annual meeting of the members.
SECTION 4 - DEPOSITORY. The Board of Directors shall have
power to select one or more banks to act as depositories of the funds of this
cooperative, and to determine the manner of receiving, depositing, and
disbursing the funds of this cooperative, the form of checks, and the person or
persons by whom they shall be signed, with the power to change such banks and
the person or persons signing such checks and the form thereof at will.
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ARTICLE V.
OFFICERS
SECTION 1 - ELECTION OF OFFICERS. Promptly following each
annual meeting of the members, the Board of Directors shall elect from its
membership a Chairman, one or more Vice Chairmen, a Secretary, a Treasurer, and
such other officers as it shall deem necessary. The Board of Directors shall
also elect a Chief Executive Officer, who need not be a director of this
cooperative. Upon the recommendation of the Chief Executive Officer, the Board
of Directors may elect a President and General Manager, a Chief Financial
Officer, one or more Vice Presidents (with such designations as recommended by
the Chief Executive Officer), Assistant Secretaries and Assistant Treasurers,
and such additional officers with such authority and duties as may be prescribed
by the Board of Directors upon the recommendation of the Chief Executive
Officer, none of whom need be a director of this cooperative. Other than the
office of Chairman and Vice Chairman, one person may hold one or more of the
offices provided for above, if eligible to hold each such office. If any vacancy
shall occur among the offices of Chairman, Vice Chairmen, Secretary or
Treasurer, it shall be filled by the Board of Directors at its next regular
meeting following the vacancy.
SECTION 2 - CHAIRMAN. The Chairman shall preside at all
meetings of the members and the Board of Directors. Except where the signature
of the Chief Executive Officer is required, the Chairman shall possess the same
power as the Chief Executive Officer to sign all certificates, contracts and
other instruments of this cooperative which may be authorized by the Board of
Directors.
SECTION 3 - VICE CHAIRMEN. In the absence or disability of the
Chairman, the Vice Chairmen, in the order designated by the Board of Directors,
shall perform the duties and exercise the powers of the Chairman. Each Vice
Chairman shall have such other duties as are assigned to such Vice Chairman from
time to time by the Board of Directors.
SECTION 4 - CHIEF EXECUTIVE OFFICER. The Chief Executive
Officer shall be the chief executive officer of this cooperative, shall have
general supervision of the affairs of this cooperative, shall sign or
countersign all certificates, contracts or other instruments of this cooperative
as authorized by the Board of Directors, shall make reports to the Board of
Directors and members, shall recommend the officers of this cooperative to the
Board of Directors for election (except the offices of Chairman, Vice Chairmen,
Secretary or Treasurer), and shall perform such other duties as are incident to
the Chief Executive Officer's office or are properly required by the Board of
Directors. In the event the office of President and General Manager is not
filled, the Chief Executive Officer shall also serve as the President of this
cooperative and may exercise the authority of the office of Chief Executive
Officer in either or both capacities.
SECTION 5 - PRESIDENT AND GENERAL MANAGER. The President and
General Manager shall report to the Chief Executive Officer of this cooperative,
and shall perform such duties as the Board of Directors may prescribe upon the
recommendation of the Chief Executive Officer. In the absence or disability of
the Chief Executive Officer, the President and General Manager shall perform the
duties and exercise the powers of the Chief Executive Officer.
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SECTION 6 - VICE PRESIDENTS. In the absence or disability of
the President and General Manager, the Vice Presidents, in the order designated
by the Board of Directors, shall perform the duties and exercise the powers of
the President. Each Vice President shall have such other duties as are assigned
to such Vice President from time to time by the Chief Executive Officer or the
President and General Manager.
SECTION 7 - SECRETARY. The Secretary shall keep complete
minutes of each meeting of the members and of the Board of Directors, and shall
sign with Chairman or the Chief Executive Officer all notes, conveyances and
encumbrances of real estate, capital securities and instruments requiring the
corporate seal; provided that the Secretary, in writing, may authorize any other
officer or employee to execute or sign the Secretary's name to any or all such
instruments. The Secretary shall keep a record of all business of this
cooperative, prepare and submit to the annual meeting of the members a report of
the previous fiscal year's business, and give all notice as required by law. The
Secretary shall perform such other duties as may be required by the Board of
Directors. The Board of Directors may delegate, or authorize the Secretary to
delegate, to any other officer or employee, under the supervision of the
Secretary, all or any of the duties enumerated in this section.
SECTION 8 - TREASURER. The Treasurer shall supervise the
safekeeping of all funds and property of this cooperative, supervise the books
and records of all financial transactions of this cooperative, and perform such
other duties as may be required by the Board of Directors. The Board of
Directors may delegate, or authorize the Treasurer to delegate, to any other
officer or employee, under the supervision of the Treasurer, all or any of the
duties enumerated in this section.
ARTICLE VI.
INDEMNIFICATION AND INSURANCE
SECTION 1 - INDEMNIFICATION. This cooperative shall indemnify
each person who is or was a director, officer, manager, employee, or agent of
this cooperative, and any person serving at the request of this cooperative as a
director, officer, manager, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses,
including attorneys' fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred to the fullest extent to which such directors,
officers, managers, employees or agents of an cooperative may be indemnified
under the law of the State of Minnesota or any amendments thereto or
substitutions therefor.
SECTION 2 - INSURANCE. This cooperative shall have power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, manager, employee, or agent of this cooperative, or is or was
serving at the request of this cooperative as a director, officer, manager,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise against any liability asserted against that person and incurred
by that person in any such capacity.
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ARTICLE VII.
METHOD OF OPERATION - PATRONAGE REFUNDS
SECTION 1 - COOPERATIVE OPERATION. This cooperative shall be
operated upon the cooperative basis in carrying out its business within the
scope of the powers and purposes defined in the Articles of Incorporation.
Accordingly, the net income of this cooperative in excess of amounts credited by
the Board of Directors to Capital Reserves and amounts of dividends, if any,
paid with respect to equity capital shall be accounted for and distributed
annually on the basis of allocation units as provided in this Article VII. In
determining the net income or net loss of this cooperative or its allocation
units, there shall be taken into account this cooperative's share of the net
income or net loss of any unincorporated entity in which it owns an equity
interest, patronage dividends distributed by other cooperatives of which it is a
patron and, to the extent determined by the Board of Directors, its share of the
undistributed net income or net loss of any corporation in which it owns an
equity interest.
Each transaction between this cooperative and each member
shall be subject to and shall include as a part of its terms each provision of
the Articles of Incorporation and Bylaws of this cooperative, whether or not the
same be expressly referred to in said transaction. Each member for whom this
cooperative markets or procures goods or services shall be entitled to the net
income arising out of said transaction as provided in this Article VII unless
such member and this cooperative have expressly agreed to conduct said business
on a nonpatronage basis. No nonmember for whom this cooperative markets or
procures goods or services shall be entitled to the net income arising out of
said transactions as provided in this Article VII unless this cooperative agrees
to conduct said business on a patronage basis.
SECTION 2 - PATRONS; PATRONAGE BUSINESS; NONPATRONAGE
BUSINESS. As used in this Article VII, the following definitions shall apply:
(a) The term "patron" shall refer to any member or nonmember
with respect to business conducted with this cooperative on a patronage basis in
accordance with Section 1 of this Article VII.
(b) The term "patronage business" shall refer to business done
by this cooperative with or for patrons.
(c) The term "nonpatronage business" shall refer to business
done by this cooperative that does not constitute "patronage business."
SECTION 3 - ESTABLISHMENT OF ALLOCATION UNITS. Allocation
units shall be established by the Board of Directors on a reasonable and
equitable basis and they may be functional, divisional, departmental,
geographic, or otherwise; provided, that each Defined Business Unit shall be
accounted for as a separate allocation unit. The Board of Directors shall adopt
such reasonable and equitable accounting procedures as will, in the Board's
judgment, equitably allocate among such allocation units this cooperative's
income, gains, expenses and losses and, to the extent provided in Section 1 of
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this Article VII, patronage dividends received by this cooperative and its share
of income, gain, loss and deduction of other entities in which it owns an
interest.
SECTION 4 - DETERMINATION OF THE PATRONAGE INCOME OR LOSS OF
AN ALLOCATION UNIT. The net income or net loss of an allocation unit from
patronage business for each fiscal year shall be the sum of (1) the gross
revenues directly attributable to goods or services marketed or procured for
patrons of such allocation unit, plus (2) an equitably apportioned share of
other items of income or gain attributable to this cooperative's patronage
business, less (3) all expenses and costs of goods or services directly
attributable to goods or services marketed or procured for patrons of such
allocation unit, less (4) an equitably apportioned share of all other expenses
or losses attributable to this cooperative's patronage business, dividends on
equity capital and distributable net income from patronage business that is
credited to the Capital Reserve pursuant to Section 8(c) of this Article VII.
The foregoing amounts shall be determined using the accounting methods and
principles used by the cooperative in preparation of its annual audited
financial statements; provided, however, that the Board of Directors may
prospectively adopt a reasonable alternative method. Expenses and cost of goods
or services shall include without limitation such amounts of depreciation, cost
depletion and amortization as may be appropriate, any unit retentions provided
in Section 10 of this Article VII, amounts incurred for the promotion and
encouragement of cooperative organization, and taxes other than federal income
taxes. Such net income or net loss shall be subject to adjustment as provided in
Sections 6 and 9(b) of this Article VII relating to losses.
SECTION 5 - ALLOCATION OF PATRONAGE INCOME WITHIN ALLOCATION
UNITS. The net income of an allocation unit from patronage business for each
fiscal year, less any amounts thereof that are otherwise allocated in
dissolution pursuant to Article IX, shall be allocated among the patrons of such
allocation unit in the ratio that the quantity or value of the business done
with or for each such patron bears to the quantity or value of the business done
with or for all patrons of such allocation unit. The Board of Directors shall
reasonably and equitably determine whether allocations within any allocation
unit shall be made on the basis of quantity or value.
SECTION 6 - TREATMENT OF PATRONAGE LOSSES OF AN ALLOCATION
UNIT.
(a) METHODS FOR HANDLING PATRONAGE LOSSES. If an allocation
unit incurs a net loss in any fiscal year from patronage business, this
cooperative may take one or more of the following actions:
(i) Offset all or part of such net loss against the
net income of other allocation units for such fiscal year to the extent
allowed by law; provided, however, that the net income or net loss of a
Defined Business Unit shall not be offset by the net loss of nor netted
against the net income of other allocation units;
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(ii) Establish accounts payable by patrons of the
allocation unit that incurs the net loss that may be satisfied out of
any future amounts that may become payable by this cooperative to each
such patron;
(iii) Carry all or part of the loss forward to be
charged against future net income of the allocation unit that incurs
the loss;
(iv) Offset all or part of such net loss against the
Capital Reserve;
(v) Cancel outstanding Patrons' Equities; provided,
however, that the net loss of a Defined Business Unit shall not be
applied in cancellation of Patrons' Equities of patrons of other
allocation units and net losses of other allocation units may not be
applied in cancellation of Patrons' Equities of patrons of Defined
Business Units;
(b) ALLOCATION OF NET LOSS AMONG PATRONS OF LOSS UNIT. Any
cancellation of equities and/or establishment of accounts payable pursuant to
this Section 6 shall be made among the patrons of an allocation unit in a manner
consistent with the allocation of net income of such allocation unit.
(c) RESTORATION OF NET LOSS OUT OF FUTURE NET INCOME. The
future net income of an allocation unit that incurs a net loss may be reduced by
part or all of such net loss that was offset against the Capital Reserve,
Patrons' Equities of patrons of another allocation unit or against the net
income of another allocation unit and may be used to restore the Capital
Reserve, restore such Patrons' Equities or to increase the future net income of
such other allocation unit; provided that reasonable notice of the intent to do
so is given to the patrons of the loss unit.
(d) BOARD DISCRETION. The provisions of this Section 6 shall
be implemented by the Board of Directors, having due consideration for all of
the circumstances which caused the net loss, in a manner that it determines is
both equitable and in the overall best interest of this cooperative.
(e) NO ASSESSMENTS AGAINST MEMBERS OR NONMEMBER PATRONS. There
shall be no right of assessment against members or nonmember patrons for the
purpose of restoring impairments to capital caused by net losses.
SECTION 7 - DISTRIBUTION OF NET INCOME.
(a) PATRONAGE REFUNDS. The net income allocated to a patron
pursuant to Sections 5 and 9 of this Article VII shall be distributed annually
or more often to such patron as a patronage refund; provided, however, that no
distribution need be made where the amount otherwise to be distributed to a
patron is less than a de minimus amount that may be established from time to
time by the Board of Directors.
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(b) FORM OF PATRONAGE REFUNDS. Patronage refunds shall be
distributed in cash, allocated patronage equities, revolving fund certificates,
securities of this cooperative, other securities, or any combination thereof
designated by the Board of Directors (all such patronage refunds referred to
collectively herein as "Patrons' Equities), including, without limitation, the
following instruments:
(i) CAPITAL EQUITY CERTIFICATES, in one or more than
one class or series, in such designations or denominations, and with
such relative rights, preferences, privileges and limitations as may be
fixed by the Board of Directors, and bearing no interest, dividend or
other annual payment.
(ii) CERTIFICATES OF INDEBTEDNESS in one or more than
one class or series, in such designations or denominations, and with
such relative rights, preferences, privileges and limitations as may be
fixed by the Board of Directors, and bearing such maturity and rate of
interest, if any, as may be fixed by the Board of Directors. Such
certificates shall be callable for payment in cash or other assets at
such times as may be determined by the Board of Directors.
(iii) NON-PATRONAGE EARNINGS CERTIFICATES, in one or
more than one class or series, in such designations or denominations,
and with such relative rights, preferences, privileges and limitations
as may be fixed by the Board of Directors, with no maturity date, and
bearing no interest, dividend or other annual payment. Non-Patronage
Earnings Certificates may be distributed only to members and to
nonmember patrons as part of the allocation and distribution of
nonpatronage income. Such certificates shall be callable for payment in
cash or other assets at such times as may be determined by the Board of
Directors.
(iv) PREFERRED CAPITAL CERTIFICATES in one or more
than one class or series, in such designations or denominations, and
with such relative rights, preferences, privileges and limitations as
may be fixed by the Board of Directors.
(c) WRITTEN NOTICES OF ALLOCATION. The noncash portion of a
patronage refund distribution that is attributable to patronage business shall
constitute a written notice of allocation as defined in 26 U.S.C. Section 1388
which shall be designated by the Board of Directors as a qualified written
notice of allocation, as a nonqualifed written notice of allocation or any
combination thereof as provided in said section.
(d) NO VOTING RIGHTS. Patrons' Equities shall not entitle the
holders thereof to any voting or other rights to participate in the affairs of
this cooperative (which rights are reserved solely for the members of this
cooperative), provided that Patrons' Equities held by members of this
cooperative shall be a factor in determining the voting power of such members as
more particularly provided in these Bylaws.
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(e) TRANSFER RESTRICTION. Patrons' Equities may only be
transferred with the consent and approval of the Board of Directors, and by such
instrument of transfer as may be required or approved by this cooperative.
(f) BOARD AUTHORITY TO ALLOW CONVERSION. The Board of
Directors of this cooperative also shall have the authority to allow conversion
of Patrons' Equities into Equity Participation Units, Preferred Equities or such
other debt and/or equity instruments of this cooperative on such terms as shall
be established by the Board of Directors.
(g) REVOLVEMENT DISCRETIONARY. No person shall have any right
whatsoever to require the retirement or redemption of any Patrons' Equities
except in accordance with their term, or of any allocated capital reserve. Such
redemption or retirement is solely within the discretion and on such terms as
determined from time to time by the Board of Directors of this cooperative.
SECTION 8 - CAPITAL RESERVE. The Board of Directors shall
cause to be created a Capital Reserve and, except as otherwise provided in
Section 9 of this Article VII, shall annually add to the Capital Reserve the sum
of the following amounts:
(a) The annual net income of this cooperative attributable to
nonpatronage business;
(b) Annual net income from patrons who are unidentified or to
whom the amount otherwise to be distributed is less than the de minimus amount
provided in Section 7(a) of this Article VII; and
(c) An amount not to exceed 10% of the distributable net
income from patronage business. The discretion to credit patronage income to a
Capital Reserve shall be reduced or eliminated with respect to the net income of
any period following the adoption of a Board resolution that irrevocably
provides for such reduction or elimination with respect to such period.
Federal income taxes shall be charged to the Capital Reserve.
SECTION 9 - ALLOCATION AND DISTRIBUTION OF NONPATRONAGE INCOME
AND LOSS.
(a) NONPATRONAGE INCOME. The Board of Directors shall have the
discretion to allocate to allocation units amounts that are otherwise to be
added to the Capital Reserve pursuant to Section 8(a) of this Article VII. Such
allocation may be made on the basis of any reasonable and equitable method.
Amounts so allocated to allocation units shall be further allocated among the
patrons thereof on a patronage basis using such method as the Board of Directors
determines to be reasonable and equitable. Amounts so allocated shall be
distributed to patrons thereof in the form of cash, property, Non-Patronage
Earnings Certificates, or any combination thereof designated by the Board of
Directors. The Board of Directors may determine whether and to what extent
nonmember patrons may share in such distributions.
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(b) NONPATRONAGE LOSS. If the cooperative incurs a net loss on
its nonpatronage business or if a net loss is incurred with respect to the
nonpatronage business of an allocation unit, such net loss generally shall be
chargeable against Capital Reserve unless and to the extent the Board of
Directors, having due consideration for the circumstances giving rise to such
net loss, determines that it is reasonable and equitable to allocate all or part
of such a net loss among allocation units generally or to a specific allocation
unit or units. Any such loss allocated to an allocation unit shall reduce such
unit's net income from patronage business to the extent thereof and the excess,
if any, shall be treated generally in accordance with Section 6(a)(ii), (iii)
and (v) of this Article VII. Notwithstanding the foregoing, a net loss incurred
by a Defined Business Unit with respect to nonpatronage business conducted by
such unit shall be borne entirely by such unit and no other net loss incurred on
nonpatronage business shall be allocated to a Defined Business Unit.
SECTION 10 - DEFINED BUSINESS UNIT RETENTIONS. This
cooperative may require from time to time, investment in its capital in addition
to the investments from retained patronage and Equity Participation Units. These
investments shall be direct capital investments from a retain on a per unit
basis for the products received by the cooperative from its Defined Members, and
the same may be determined on either a Qualified or a Nonqualified basis as
defined in Subchapter T of the United States Internal Revenue Code. The per unit
retention, if required, shall be made on products delivered, in the same amount
per unit and shall not become a part of the net annual income available for
patronage.
Each member, by continuing to be such, agrees to invest in the
capital of this cooperative. Such investment shall be accounted for separately
in a unit retention account set up on the books of the cooperative. All such
amounts, from the moment of receipt by this cooperative, are received and
retained with the understanding that they are furnished by members as capital.
This cooperative is obligated to account to each member in such manner that the
amount of per unit retains furnished by each member is annually credited to an
appropriate record to the per unit retains capital account of each member.
Within a reasonable time after the close of its fiscal year, this cooperative
shall notify each member of the amount of capital retains and credit it to the
member's account by reflection upon this cooperative's books.
When the Board of Directors determines in its sole discretion
that this cooperative has sufficient working capital in the applicable Defined
Business Unit, unit retains may be called for payment at the lesser of their
stated or book value. Unit retains may be paid, redeemed, or revolved in whole
or in part at a time and manner determined by the Board of Directors.
ARTICLE VIII.
CONSENT
SECTION 1 - CONSENT. Each individual or entity that hereafter
applies for and is accepted to membership in this cooperative and each member of
this cooperative as of the effective date of this bylaw who continues as a
member after such date shall, by such act alone, consent that the amount of any
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distributions with respect to its patronage which are made in written notices of
allocation (as defined in 26 U.S.C. ss.1388), and which are received by the
member from this cooperative, will be taken into account by the member at their
stated dollar amounts in the manner provided in 26 U.S.C. ss.1385(a) in the
taxable year in which such written notices of allocation are received by the
member.
SECTION 2 - CONSENT NOTIFICATION TO MEMBERS AND PROSPECTIVE
MEMBERS. Written notification of the adoption of this Bylaw, a statement of its
significance and a copy of the provision shall be given separately to each
member and prospective member before becoming a member of this cooperative.
SECTION 3 - CONSENT OF NONMEMBER PATRONS. If this cooperative
obligates itself to do business with a nonmember on a patronage basis, such
nonmember must either: (a) agree in writing, prior to any transaction to be
conducted on a patronage basis, that the amount of any distributions with
respect to patronage which are made in written notices of allocation (as defined
in 26 U.S.C. ss.1388), and which are received by the nonmember patron from this
cooperative, will be taken into account by the nonmember patron at their stated
dollar amounts in the manner provided in 26 U.S.C. ss.1385(a) in the taxable
year in which such written notices of allocation are received by the nonmember
patron and further, that any revocation of such agreement will terminate this
cooperative's obligation to distribute patronage with respect to transactions
with such nonmember that occur after the close of this cooperative's fiscal year
in which the revocation is received; or (b) consent to take the stated dollar
amount of any written notice of allocation into account in the manner provided
in 26 U.S.C. ss.1385 by endorsing and cashing a qualified check as defined in
and within the time provided in 26 U.S.C. ss.1388(c)(2)(C); provided that
failure to so consent shall cause the written notice of allocation that
accompanies said check to be canceled with no further action on the part of this
cooperative.
ARTICLE IX.
MERGER OR CONSOLIDATION; DISSOLUTION
SECTION 1 - MERGER OR CONSOLIDATION. If the terms of a merger
or consolidation of which this cooperative is a party do not provide the members
and nonmember patrons of this cooperative with an economic interest in the
surviving entity that is substantially similar to the economic interest
possessed by such members and nonmember patrons in this cooperative immediately
before such merger or consolidation, the value of the consideration received
shall be divided among them in the same manner as a comparable amount of net
liquidation proceeds would distributed pursuant to Section 2 of this Article IX.
This shall not be construed to prevent issuance of differing forms of
consideration to different groups of members and nonmember patrons to the extent
allowed by law.
SECTION 2 - LIQUIDATION, DISSOLUTION AND WINDING-UP. Subject
to the Articles of Incorporation, in the event of any liquidation, dissolution
or winding up of the affairs of this cooperative, whether voluntary or
involuntary, equity capital shall be distributed to the holders thereof as
follows: first to payment of the face amount (par value) of all Preferred
Equities whose priority was so established upon the issuance of such Preferred
Equities, second to payment of the face amount (par value) of all Equity
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Participation Units and all Preferred Capital Certificates, third to payment of
the face amount (par value) of all Capital Equity Certificates and other
outstanding equities (other than Non-Patronage Earnings Certificates), and
fourth to payment of the face amount (par value) of Non-Patronage Earnings
Certificates; provided, however, that assets held at such time by any Defined
Business Unit shall first be used to redeem the Equity Participation Units and
Preferred Capital Certificates of the Defined Business Unit on a pro rata basis.
Any assets remaining after the foregoing payments have been made shall be
allocated among the allocation units in such manner as the Board of Directors,
having taken into consideration the origin of such amounts, shall determine to
be reasonable and equitable. Amounts so allocated shall be paid to current and
former patrons of each such allocation unit in proportion to their patronage of
such unit over such period as may be determined to be equitable and practicable
by the Board of Directors. Such obligation to distribute shall be construed as a
preexisting duty to distribute any patronage sourced net gain realized in the
winding up process to the maximum extent allowable by law.
ARTICLE X.
SEAL
The Board of Directors may, by resolution, adopt, alter or
abandon the use of a corporate seal.
ARTICLE XI.
AMENDMENTS
These Bylaws may be amended in accordance with the Minnesota
Cooperative Law, Minnesota Statutes Chapter 308A; upon the approval of a
majority of the votes cast in person or by mail vote at any annual or special
meeting of the members called in accordance with Section 1 of Article II of
these Bylaws; provided, however, in the event the Board of Directors of this
cooperative declares, by resolution adopted by a majority of the Board of
Directors present and voting, that the amendment involves or is related to a
hostile take over, then the amendment may be adopted only upon the approval of
eighty percent (80%) of the total voting power of the members of this
cooperative, whether or not present and/or voting on the amendment; and provided
further that notice of such amendment shall have been given in accordance with
Section 2 of Article II of these Bylaws to the members in or with the notice of
such meeting.
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