Exhibit 3(ii)
BY-LAWS
OF
MINN-DAK FARMERS COOPERATIVE
We, the undersigned, together constituting and being all of the
members, directors and incorporators of Minn-Dak Farmers Cooperative, a
Cooperative nonprofit corporation, do hereby adopt the following code of by-laws
as and for the by-laws of said association.
ARTICLE I
PURPOSE
The purposes for which this association is formed are set forth in the
Third Article of the Articles of Incorporation of the Association.
ARTICLE II
CORPORATE SEAL
The corporate seal shall consist of a circle, having within its
circumference the words, "Minn-Dak Farmers Cooperative, August 30, 1972, North
Dakota".
ARTICLE III
MEETINGS OF MEMBERS
Section 1. REGULAR MEETINGS. A regular annual meeting of the members
shall be held at a place to be designated by the Board of Directors within 75
miles of Wahpeton, North Dakota, and Breckenridge, Minnesota, at 10:00 A.M. on a
day to be designated by the Board of Directors, within five months after the end
of the fiscal year, for the purpose of electing a board of directors and
transacting such other business as may come before the meeting.
Section 2. NOTICE OF REGULAR MEETINGS. Notice of each regular meeting
of the members shall be given. Such notice must state the time and place of the
meeting, and that the purposes thereof are the election of a board of directors
and the transaction of such other business as may come before the meeting, and a
copy thereof shall be mailed to each member of the association; such notices
shall be deposited in the post office at Wahpeton, North Dakota, with postage
prepaid, not less than ten nor more than 30 days prior to the time for holding
such meeting. (Amended and reenacted December 4, 1989.)
Section 3. SPECIAL MEETINGS. Except where otherwise prescribed by law
or elsewhere in these by-laws, a special meeting of the members may be called at
any time by the chairman, or by the board of directors, or by 20 percent of the
members. (Amended and reenacted December 4, 1989.)
Section 4. NOTICE OF SPECIAL MEETINGS. Notice of each special meeting
of the members shall be given. Such notice must state the time and place of the
meeting, and the business to be transacted at the meeting; a copy thereof shall
be mailed to each member of the association; such notice shall be deposited in
the post office at Wahpeton, North Dakota, with postage prepaid, at least five
days prior to the time for holding such meeting.
Section 5. QUORUM. Fifty members or 15 percent of the members,
whichever is less, shall constitute a quorum at any meeting but the members
present at a duly organized meeting may continue to do business until
adjournment notwithstanding the withdrawal of enough members to leave less than
a quorum. If a meeting cannot be organized because a quorum has not attended,
those present may adjourn the meeting to such time and place as they may
determine.
ARTICLE IV
BOARD OF DIRECTORS
Section 1. NUMBER. The corporate powers, business and property of the
association shall be exercised, conducted and controlled by a board of directors
of nine members.
Section 2. ELECTION, QUALIFICATION AND TENURE. Three directors shall be
elected annually at the regular meeting of the membership of the association,
with the rotations of Districts 4, 5 and 7 - starting in 1993; Districts 1, 6
and 8 - starting in 1994; and Districts 2, 3 and 9 - starting in 1995. No person
shall be eligible to become or remain a director of, or to hold any other
position of trust in, the cooperative who is not at least 18 years of age or is
in any way employed by or financially interested in a competing enterprise. No
director shall serve more than five consecutive three-year terms. One director
shall be elected from the members in each of the nine districts. The election of
directors shall be by membership of the district. Directors shall be elected by
secret ballot. No director shall be elected from a district without receiving a
majority of the votes cast in that district. In the event no candidate receives
a majority of the votes cast on the first ballot, runoff ballots will be
conducted with the candidate receiving the fewest number of votes being dropped
from the balloting. Successive runoff ballots will be conducted until one
candidate receives a majority of the votes cast at which time the candidate will
be declared elected. For the purpose of this section, a majority shall be
defined a 50 percent plus one vote. District No. 1 shall consist of the
following: The area served by the Tyler Piler; District No. 2 shall consist of
the following: All the area in Richland County served by the Factory Piler;
District No. 3 shall consist of the following: The area served by the Gorder
Piler; District No. 4 shall consist of the following: All the area in Wilkin
County served by the Factory Piler; District No. 5 shall consist of the
following: The area served by the Hawes Piler; District No. 6 shall consist of
the following: The area served by the Yaggie Piler; District No. 7 shall consist
of the following: The area served by the Lehman Piler; District No. 8 shall
consist of the following: The area served by the Lyngaas Piler; District No. 9
shall consist of the following: The area served by the Peet Piler. No member
shall be eligible to become or remain a director who is not a grower of the
district from which he is elected, and meets the qualifications of membership
under these Bylaws of the Cooperative. Upon establishment of the fact that a
nominee for director lacks eligibility under this section or as may be provided
elsewhere in these by-laws, it shall be the duty of the chairman presiding at
the meeting at which such nominee would otherwise be voted upon to disqualify
such nominee. Upon the establishment of the fact that any person being
considered for or already holding, a directorship or other position of trust in
the cooperative lacks eligibility under this section, it shall be the duty of
the board of directors to withhold such position from such person, or to cause
him to be removed therefrom, as the case may be. Nothing in this section shall,
or shall be construed to affect in any manner, whatsoever, the validity of any
action taken at any meeting of the board of directors. (Amended and reenacted
December 7, 1993.)
Section 3. VACANCIES. Vacancies in the board of directors shall be
filled by the other directors in office; and such persons shall hold office
until the election of their successor by the members.
Any director who ceases to be a member or who violates any contract
with this association in any particular, shall cease to be a member of the board
as soon as majority of the board pass a resolution to such effect. The vacancy
caused thereby shall be filled by the directors.
Any member may bring charges against an officer or director by filing
them in writing with the secretary of the association, together with a petition
signed by ten percent of the members, request the removal of the officer or
director in question. The removal shall be voted upon at the next regular or
special meeting of the association, and, by a vote of a majority of the members,
the association may remove the officer or director and fill the vacancy. The
director or officer against whom such charges have been brought, shall be
informed in writing of the charges previous to the meeting and shall have an
opportunity at the meeting to be heard in person or by counsel and to present
witnesses; and the person or persons bringing the charges against him shall have
the same opportunity.
Section 4. FIRST MEETING OF DIRECTORS. Within 24 hours after each
election of directors, the newly elected directors shall hold a special,
reorganizational meeting to elect a chairman, a vice chairman, a secretary and a
treasurer, and any or all other officers, agents or employees of the
association. (Amended and reenacted December 10, 1991.)
Section 5. REGULAR MEETINGS. In addition to the special meetings
mentioned, a regular meeting of the board of directors shall be held at the
offices of the association or at such time and place as the board may direct,
but at least once a month.
Section 6. SPECIAL MEETINGS. A special meeting of the board of
directors shall be held whenever called by the chairman or by a majority of the
directors. Any and all business may be transacted at a special meeting. Each
call for a special meeting shall be in writing, signed by the person or persons
making the same, addressed and delivered to the secretary, and shall state the
time and place of such meeting.
Section 7. NOTICE OF REGULAR OR SPECIAL MEETINGS. Notice of regular or
special meetings of the directors shall be mailed to each director at least
three days prior to the time set for the meeting. Provided, however, that one
day, but not less than 24 hours notice shall be sufficient if notice is given by
telephone or in person to the directors.
Section 8. QUORUM. Seven directors shall constitute a quorum of the
board at all meetings and the affirmative vote of at least a majority of the
directors present and voting shall be necessary to pass any resolution or
authorize any corporate act.
Section 9. COMPENSATION. Directors shall receive no stated salary for
their services as directors, but shall receive such sum per meeting as is
determined by the Board to be reasonable compensation based on the type and
length of meeting attended. Any sum so determined to apply to an upcoming year
may be reviewed by the membership of the cooperative at an annual meeting of the
members upon proper motion. A director shall be allowed reasonable expenses
while engaged in the business of the cooperative, to be audited, allowed, and
paid as other claims against the cooperative. (Amended and reenacted December
10, 1991.)
Section 10. ELECTRONIC COMMUNICATIONS. A meeting of the Board of
Directors may be conducted by:
(a.) A conference among directors using any means of communication
through which the directors may simultaneously hear each other
during the conference constitutes a meeting of the Board of
Directors, if the same notice is given of the conference as
would be required by Article IV, Section 7 for a meeting, and
if the number of directors participating in the conference
would be sufficient to constitute a quorum at a meeting.
Participation in meeting by that means constitutes presence in
person at the meeting; or
(b.) Any means of communication through which the director, other
directors so participating, and all directors physically
present at the meeting may simultaneously hear each other
during the meeting. Participation in a meeting by that means
constitutes presence in person at the meeting. (Enacted
December 5, 1995.)
ARTICLE V
POWERS OF DIRECTORS
The Directors shall have the power:
1. To call a special meeting of the members when they deem it
necessary; and they shall call a meeting at any time upon the
written request of one-fifth (1/5) of the members. (Amended and
reenacted December 4, 1989.)
2. To appoint and remove, at pleasure, all officers, agents and
employees of the association, prescribe their duties, fix their
compensation and require from them, if advisable, security for
faithful service.
3. To select one or more banks to act as depository of the funds of
the association and determine the manner of receiving, depositing
and disbursing the funds and the form of checks and the person or
persons by whom shall be signed, with power to change such banks
and the person or persons signing said checks and the form thereof
at will;
4. To conduct, manage and control the affairs and business of the
association and to make rules and regulations for the guidance of
the officers and management of its affairs;
5. To make and enter into agreements with processors, brokers, or
others for the sale or consignment of sugar or other products grown
by members of the association; to make and enter into agreements
with any processors, brokers, or others for the packaging of sugar
or other products grown by the members of the association for the
sale of sugar or other products grown by the members of the
association.
6. To carry out the crop contracts of the association and members in
every way advantageous to the association, representing the members
collectively.
7. To settle, in the name of its members, any claims for damages which
may occur to the products in transit.
ARTICLE VI
DUTIES OF DIRECTORS
It shall be the duty of the board of directors:
1. To keep a complete record of all its acts and of the proceedings of
its meetings, and to present a full statement at the regular
meetings of the members, showing in detail the condition of the
affairs of the association.
2. To supervise all officers, agents and employees, and see that their
duties are properly performed, and to cause to be issued
appropriate certificates of membership.
3. To install such a system of bookkeeping and auditing that each
member may know and be advised from time to time fully concerning
the receipts and disbursements of the association.
ARTICLE VII
OFFICERS
The officers of the association shall be a chairman, vice chairman,
secretary and treasurer who shall be elected from the board of directors,
together with a president, one or more vice presidents, and any other
administrative officers who need not be directors or stockholders, which the
board of directors may see fit in its discretion to provide for by resolution
entered upon its minutes.
ARTICLE VIII
THE CHAIRMAN
If at any time the chairman shall be unable to act, the vice chairman
shall take his place and perform his duties; and if the vice chairman shall be
unable to act, the board shall appoint a director to do so. The chairman or such
vice chairman or director:
1. Shall preside over all meetings of the members and directors.
2. Shall sign, as chairman, all certificates of membership, and all
contracts and instruments which have been first approved by the
board of directors.
3. Shall call the directors together whenever he deems it necessary,
and shall have, subject to the advice of the directors, direction
of the affairs of the association and generally shall discharge
such other duties as may be required of him by these by-laws or by
the board.
ARTICLE IX
SECRETARY
It shall be the duty of the secretary:
1. To keep a record of the proceedings of the meetings of the board of
directors and of the members.
2. To keep the corporate seal and the book of blank membership
certificates and countersign all certificates issued and affix said
corporate seal to all papers requiring a seal.
3. To keep a proper membership book, showing the name of each member
of the association, the number of his membership certificate, the
date of issuance, surrender, cancellation, forfeiture or transfer.
4. To execute and sign contract, notes, papers and documents.
5. To discharge such other duties as pertain to his office or may be
prescribed by the board of directors.
ARTICLE X
TREASURER
It shall be the duty of the treasurer:
1. To receive and deposit all funds of the association, to be paid out
only on checks drawn as herein before provided, and account for all
receipts, disbursements and balance on hand.
2. To furnish a bond in such form and in such amount as to the board
of directors may from time to time require.
3. To discharge such other duties as pertain to his office or may be
prescribed by the board of directors.
ARTICLE XI
EXECUTIVE OR ADVISORY COMMITTEE
The board of directors may appoint an executive or advisory committee
from among its members, determine the number of its members and tenure of office
and its powers and duties. The chairman and vice chairman shall be members of
such executive or advisory committee.
ARTICLE XII
AUDITING COMMITTEE
The board of directors may appoint an auditing committee from among its
members, determine the number of its members and its tenure of office. The board
may prescribe rules and regulations with reference to the manner and form in
which claims shall be presented against the association and the manner of
auditing the same, and in lieu of such action by the board, the auditing
committee may prescribe rules and regulations with reference to its meetings and
procedure.
ARTICLE XIII
BOOKS AND PAPERS
The books and such papers as may be placed on file by vote of the
members or directors shall at all times in business hours be subject to the
inspection of the board and of any member of the association, or his
representative, duly authorized in writing.
The board of directors shall cause to be sent to all the members of
this association, not later than 120 days after the close of the fiscal or
calendar year, an annual report of the operations of the association. Such
annual report shall include a balance sheet as of the closing date. Such
financial statement shall be prepared in a form sanctioned by sound accounting
practices and approved by a duly certified public accountant.
ARTICLE XIV
PROXIES
THIS ARTICLE HAS BEEN REPEALED.
ARTICLE XV
BORROWING MONEY
The association shall have the power to borrow money in such amounts
and upon such terms and conditions as may from time to time seem to the board of
directors advisable or necessary, by a two-thirds (2/3) vote of all the
directors.
ARTICLE XVI
STOCK CERTIFICATES
Section 1. COMMON STOCK. Each certificate of common stock shall have
the following statement printed on its face: "The common stock of the
association may be purchased, owned, and/or held only by producers who shall
patronize the association in accordance with uniform terms and conditions
prescribed thereby and only such persons shall be regarded as eligible members
of the association. In the event the board of directors shall find following a
hearing that any of the common stock has come into the hands of any person who
is not an eligible member, or that the holder thereof has ceased to be an
eligible member, or shall have failed to patronize this cooperative for a period
of 12 consecutive calendar months, or shall have intentionally or repeatedly
violated any by-laws or shall have breached any contract between him and this
cooperative, or shall have willfully obstructed any purpose or proper activity
of this cooperative, then in any such event, the board of directors shall in its
discretion recall all common stock owned by such member, and the cooperative
shall refund to him the par value or book value of such stock, whichever is
lesser, and such refund shall be made in cash. Each eligible holder of common
stock shall be entitled to only one vote in any meeting of the stockholders,
regardless of the number of shares of stock owned by him. This association shall
have a lien on all of its issued common stock for all indebtedness of the
holders thereof to the association. Such stock is also subject to all the other
terms and conditions now or hereafter contained in the Articles of Incorporation
or By-laws of this association."
Section 2. PREFERRED STOCK. Each certificate of preferred stock of
this association shall have the following statement printed on its face:
"The preferred stock of this association shall carry no voting rights
and may be transferred only on the books of the association; and may be redeemed
in whole or in part on a pro rata basis at par at any time on 30 day's notice by
the association, provided said stock is redeemed in the same order as originally
issued by years, and on failure to deliver the certificate or certificates
evidencing any such stock the association may cancel the same on its books.
Stock which has been redeemed may, in the discretion of the board of directors,
be reissued or retired. All such preferred stock so redeemed shall be paid for
in cash at the par value thereof. This association shall have a lien on all of
its issued preferred stock for all indebtedness of the holders thereof to the
association. Upon dissolution or distribution of the assets of the association,
the holders of all preferred stock shall be entitled to receive the par value of
their stock, before any distribution is made on the common stock."
"In the event that the board of directors of the association shall
find, following a hearing, that any of the preferred stock of this association
has come into the hands of any person who is not eligible for membership, or
that the holder thereof has ceased to be an eligible member, or that such holder
has not, for a period of one year, marketed through the association the products
covered by a marketing agreement or agreements with it, or has not otherwise
patronized the association, such holder shall have no rights or privileges on
account of such stock, or voice in the management or affairs of the association
other than the right to participate in accordance with law in case of
dissolution. The association shall have the right, at its option, (a) to
purchase such stock at its book or par value, whichever is less, as determined
by the board of directors of the association; or (b) to require the transfer of
any such stock at such book or par value, to any person eligible to hold it."
ARTICLE XVII
MEMBERS
QUALIFICATIONS. Membership in this association shall be limited to producers (a)
who reside in the territory served by this association, (b) who patronize the
association in accordance with uniform terms and conditions prescribed by it,
and (c) who have been approved by the board of directors. "Member-Producer"
shall mean and include persons (natural or corporate) actually engaged in the
production of sugar beets, or other agricultural products, including tenants of
land used for the production of any such products, and lessors of such land who
receive as rent therefor part of any such products of such land, and cooperative
associations (corporate or otherwise) of such member-producers.
ARTICLE XVIII
AMENDMENTS TO BY-LAWS. The by-laws of the cooperative may be altered,
amended, rescinded or added to by the vote of majority of the members present at
a special meeting convened for such purpose or at a regular meeting, but the
notice of the special or regular meeting must set forth fully and clearly the
proposed alteration, amendment, rescission or addition.
ARTICLE XIX
LOSSES
To the extent that there is a loss resulting from the business
operations of the cooperative in any one year, the cooperative shall act in such
a manner as to first recoup the loss from those patrons who were patrons in the
year in which the loss occurred. This section shall not be administered in such
a way as to preclude the Association from availing itself of the right to carry
back or carry forward net operating losses to past or future years.
ARTICLE XX
DIVISION OF PROFITS
That the proceeds of sales, less necessary expenses, shall be allocated
or distributed to the patron members on the basis of either the quantity or
value of the products furnished by them. The cooperative shall allocate or
distribute its profits from marketing and purchasing among its patron members on
the basis of either the quantity or the value of the products furnished or
purchased by them.
ARTICLE XXI
PATRONAGE REFUNDS
Section 1. NET INCOME. The net income of this corporation determined in
accordance with generally accepted accounting principals consistently applied,
shall be distributed annually on the basis of dollar value of patronage, in cash
or in the form of credits in a patronage credit account set up on the books of
the corporation. Distribution of patronage shall be made as soon as practicable
after the close of each fiscal year and written notice thereof shall be sent to
each shareholder showing the total amount of distribution made to him and the
manner of such distribution setting forth the amount distributed in cash and in
credits.
Section 2. CASH AND PATRONAGE DISTRIBUTION. The corporation may
distribute to its shareholders, in cash, a percentage of the patronage dividends
to which each individual shareholder is entitled. Such percentage to be
determined by action of the board of directors. The board of directors shall
have the power to determine whether a patronage credit will be "qualified
written notice of allocation" or a "non-qualified written notice of allocation".
Section 3. CONSENT BY-LAW. Each shareholder of this corporation shall,
by the act of continuing as a shareholder, and by that act alone, consent that
the amount of any distribution with respect to the patronage of this corporation
which are made in written notices of allocations (as defined in 26 U.S.C. 1388,
Internal Revenue Code) and which are received by him from the corporation, will
be taken into account by him at the stated dollar amount in the manner provided
in 26 U.S.C. 1385 in the taxable year in which such written notices of
allocation are received by him.
Section 4. RETIREMENT OF PATRONAGE CREDITS. Whenever in the discretion
of the board of directors, the capital represented by patronage credits is found
to be in excess of the amount needed for the operation of the business, such
excess may be distributed in cash; and when paid in cash, it shall be the policy
to pay the oldest outstanding patronage credits first. At the discretion of the
board of directors, a shareholder's credits may be paid in cash in other than
the regular order when such credits are carried on the books of the corporation
in the name of a deceased person, or when earlier payments of individual amounts
will facilitate the corporation's records, aims, purposes and good will.
Patronage credits shall be redeemed only when such redemption is not in
violation of any loan agreements entered into by the corporation.
Section 5. TRANSFER OF CREDITS. Patronage credits shall not be
transferred except with the approval and consent of the board of directors.
ARTICLE XXII
NON-PATRONAGE INCOME
Section 1. UNIT RETAIN. The corporation may require investment in its
capital in addition to the investments from retained patronage. These
investments shall be direct capital investments from a retain on a per unit
basis of the products purchased from its common shareholders. The unit
retention, if required, shall be made on all products delivered, in the same
amount per unit and shall at no time become a part of net income available for
patronage. Each shareholder, by continuing to be such, agrees that he will
invest in capital of this corporation as prescribed in this article. Such
investments shall be accounted for separately in a unit retention account set up
on the books of the corporation.
Section 2. INCOME TAX TREATMENT. The board of directors shall have the
power to determine whether such unit retain shall be a "qualified per unit
retain" or a "non-qualified per unit retain". In the event that the board of
directors determine that such unit retains are to be a "qualified per unit
retain", such shareholder of this corporation by the act of continuing as a
shareholder and by that act alone agrees that the amount of any unit retain
charged him as provided in this article will be taken into account by him at its
stated dollar amount in the manner provided in 27 U.S.C. 1385 and will be
reported by him in his income tax returns for the taxable year in which written
notice of such retention is received by him. The purpose of this consent by-laws
is to make such unit retain a "qualified per unit retain" within the meaning of
the United States Internal Revenue Code.
Section 3. RETIREMENT OF UNIT RETENTION CAPITAL. Whenever in the
discretion of the board of directors the capital represented by the unit
retention capital investment is found to be in excess of the amount needed for
the operation of the business and the service of its debts, then it shall
distribute such excess in cash, and when paid in cash it shall be the policy to
pay the oldest outstanding unit retention capital investment first. At the
discretion of the board of directors, unit retention capital investment may be
paid in cash in other than the regular order when such credits are carried on
the books of the corporation in the name of a deceased person, or when earlier
payment of other individual amounts will facilitate the corporation's records,
aims, purposes and good will. Unit retention capital investments shall be
redeemed only when such redemption is not in violation of any loan agreements
entered into by the corporation.
Section 4. TRANSFER OF RETENTION CAPITAL. Unit retention capital
investments shallnot be transferred except with the approval and consent of the
board of directors.
ARTICLE XXIII
NON-PATRONAGE INCOME
All amounts received by the corporation from non-patronage sources, in
excess of costs and expenses related to such non-patronage sources or net income
derived from business done by persons who are not common shareholders, net of
taxes thereon, shall become property of the corporation.
ARTICLE XXIV
INDEMNIFICATION OF DIRECTOR OR OFFICER
Section 1. INDEMNIFICATION OF DIRECTOR OR OFFICER. The corporation
shall indemnify every Director or Officer, their heirs, executors and
administrators, against expenses reasonably incurred by him or her in connection
with any action, suit or proceedings to which he or she may be made a party by
reason of his or her being or having been a Director or Officer of the
corporation, indemnification shall be provided only in connection with such
matters covered by the settlement as to which the corporation is advised by
council that the person to be indemnified did not commit such a breach of duty.
ARTICLE XXV
TRANSFER OR SALE OF MEMBER EQUITY OR STOCK
Section 1. From and after December 8, 1987 the board of directors shall
at the option of the member permit the sale of a member's stock in the
cooperative without the transfer of the member's accumulated patronage credits
and unit retention capital. It is the declared policy of the cooperative that
after such a sale the purchaser must assume any and all obligations of the
seller to the cooperative in relation to the stock purchased.
ARTICLE XXVI
SUGAR BEET SEED
All sugar beet seed to be planted by the Growers must be purchased by
the Growers from the Cooperative.
November 25, 1996