Article I – Organization
Section 1.1 Name.
The name of the organization is the Nashville Food Cooperative Corporation, hereinafter referred to as the “Cooperative”.
Section 1.2 Purpose.
The Cooperative is owned and democratically controlled by its Members. The Members have organized the Cooperative to operate on a cooperative basis to promote local food, community culture, and to provide healthy and high quality food into the Tennessee food system. The Cooperative will do this by supporting local farms and suppliers through a cooperative grocery system and engage in education and outreach in the community to encourage eating healthy and supporting a local economy.
Section 1.3 Powers.
Subject to the principles, obligations, and constraints stated in these bylaws, the Cooperative shall have all the powers available under Tennessee law.
Section 1.4 Triple Bottom Line Principles
The Cooperative shall be operated according to Triple Bottom Line principles. The duty of the managers to maximize financial benefit to the members is supplemented by a coequal duty to responsibly pursue optimal benefit to concerns of the company’s community, including its employees and associates and the health and safety of the public, and of the sustainability of the biological environment.
Article II – Membership
Section 2.1 Eligibility.
Any natural person, for-profit business, or non-profit corporation may apply for membership by submitting an application and payment of the Member Interest on terms established by the Board of Directors. The Cooperative shall not discriminate on social or political grounds or on the basis of race, national origin, creed, age, religion, sex, gender identity, disability, sexual orientation, marital, or veteran status. Entities applying for membership must designate an individual to serve as its proxy.
Section 2.2 Member Responsibilities.
Members shall maintain current equity investments due to the Cooperative, shall keep the Cooperative informed of any changes in name or current address, and shall abide by these bylaws, policies, and decisions of the Cooperative or the Board. All rights and responsibilities of members are subject to these Bylaws as they may be amended from time to time, and to policies and other decisions of the Cooperative or the Board.
Section 2.3 Member Rights.
a) Governance Rights.
i. Members have one vote in the affairs of the Cooperative. Entities that are members shall designate one person to vote on their behalf.
ii. Board of Directors. Members have the right to run for a seat on the Board of Directors. Entities that are members shall designate one person to run on their behalf.
iii. Members have the right to elect the Cooperative’s Board, to attend meetings of the Board, to receive notice of and attend membership meetings, to petition, and to approve amendments.
b) Financial Rights. Members have the right to share in the annual allocation of surplus patronage earnings on the basis of the member’s business with the Cooperative in accordance with Article III. Members shall have their own capital accounts within the Cooperative. Members are not liable for the debts of the Cooperative.
Section 2.4 Application for Membership.
a. Application. Persons or entities may become Members of the Cooperative by submitting the application form agreeing to the Membership terms and conditions as stated therein; meeting all requirements of Membership pursuant to these bylaws; and submitting timely payment of the purchase price for the Member Interest.
b. Payment Plans. Applicants may pay their Member Interest through a payment plan approved by the Board. Members paying through a payment plan will be given a Member Number based on the date of their first payment, and they shall have all rights and obligations as a fully paid Member so long as their payments are not past due.
c. Gifted or Funded Shares. The Board, in its discretion, may allow others to gift Member Interest or establish a Fund for pay a portion of some applicants’ Member Interest. Applicants can apply for the Fund to pay for a portion of their Member Interest in accordance with eligibility criteria determined by the Board.
Section 2.5 Member Interest and Cooperative Property
The purchase price of the Member Interest shall be set by the Board of Directors. A Member has no interest in specific cooperative property. Each Member agrees and waives any rights to have cooperative property partitioned. Memberships and Member Interests are not transferable except under special circumstances with the Board’s approval.
Section 2.6 Termination of Membership.
a) Members may terminate their membership in the Cooperative by voluntarily submitting a written statement to the Board. The Board may elect to terminate a membership if a Member dies, ceases to exist, is past due on Member Interest payments, or fails to comply with the requirements of these bylaws or other Board policies. The Board must conduct a fair and reasonable hearing conducted in good faith before terminating any membership.
b) Member Interest. When a membership is terminated, the Board may elect to repurchase the Member Interest for the original purchase price, transfer the original purchase price to a Fund established under Article II, or, under special circumstances, transfer the Member Interest to another designated party.
c) Surrender of Membership Rights. When a membership is terminated, the Member shall no longer have any rights of membership, including voting rights or rights to any information, accounting, or inspection of the books of the Cooperative’s affairs.
Article III – Capital Structure
Section 3.1 Membership Interests.
The Board shall establish the required member investment for Member Interests to assure a sound level of capital funding. Member Interests may be issued to any natural person or entity meeting the eligibility and application requirements of Article II.
Section 3.2 Dissolution or Liquidation.
Upon dissolution or liquidation of the Cooperative, the debts and liabilities of the Cooperative shall be paid according to their priorities. After all liabilities and expenses, then any remaining funds shall be paid towards the purchase price of the Member Interests. If there is any additional funds or property remaining, the Board shall distribute it in a way that furthers the Cooperative’s mission, as determined by the Board.
Section 3.3 Patronage Earnings.
The Cooperative operates on a cooperative basis in accordance with Subchapter T of the Internal Revenue Code. The Board determines the amount of surplus patronage earnings each year, which are those earnings that in the Board’s opinion are not needed to conduct the business of the Cooperative. For fiscal years with surplus patronage earnings, the Cooperative may declare a patronage dividend to be distributed among the Members in accordance with the patronage business generated by each member during that fiscal year. The Board’s decision of whether there is a surplus and the amount returned to each member shall be conclusive.
Section 3.4 Tax Consent Notification for Patronage Earnings.
The Internal Revenue Service generally requires each Member receiving a patronage earning to include that amount as taxable gross income in the year it was received. The Board has been advised by legal counsel, however, that there is an exception for consumer purchases. Therefore, patronage earnings to Members are generally not taxable as long as the purchase is for consumer goods and not to be used for business or commercial purposes.
Article IV – Board of Directors and Officers
Section 4.1 Number and Qualifications of Directors.
The Cooperative is governed by a Board of Directors. The number of Directors of the corporation shall be not less than three, nor more than nine. All Directors must be members, voted on by the members. Employees of the Cooperative are not eligible to be Directors. The Board may establish a policy to solicit and qualify applications for nominations to the Board.
Section 4.2 Election and Terms.
The Cooperative will hold its first Board election after it reaches two hundred members; before then, Directors will be appointed by the rest of the Board. Directors shall be elected to three year terms and until their successors are elected. To preserve governance continuity, the terms shall be staggered. Directors are elected by a majority vote at the Annual Meeting of the year the Directors’ term is over.
Section 4.3 Removal of Directors.
Directors may be removed from office at any time with or without cause by the vote of the members that would be required to elect the Director. If a Director is removed, a new Director may be elected to fill the vacancy at the same meeting.
Section 4.4 Resignation of Directors; Vacancy.
A Director may resign at any time by communicating such resignation to the Board of Directors or its Secretary. The resignation is effective when communicated unless the notice specifies a later effective date or subsequent event upon which it will become effective. The Board of Directors may appoint a Member to temporarily fill a vacancy on the Board resulting from a Director’s resignation, death, or other cause. A Temporary Director appointed by the Board shall serve until next Annual Meeting when the vacancy will be filled by Election.
Section 4.5 Compensation.
The compensation, if any, of the members of the Board of Directors shall be determined by the members at any annual or special meeting of the Cooperative. The Cooperative shall reimburse directors for all reasonable expenses incurred in carrying out their duties and responsibilities.
Section 4.6 Board Meetings; Quorum; Closed Sessions.
a) Board Meetings. The Board shall determine when to conduct Board meetings. Board meetings can be conducted without notice. A majority of current Directors constitute a quorum for the transaction of business at a meeting of the Board of Directors.
b) Action Without a Meeting. The Board may take action by written consent instead of calling a meeting, if the Directors submit a written vote on the action A Director shall forfeit his or her vote if reasonable attempts have been made to contact a Director to submit a written vote, and a reasonable period of time has gone by without the Director submitting a written vote.
c) Closed Sessions. The Board may, during any regular meeting, enter into a period of Closed Session and exclude individuals who are not Directors or Officers for the purpose of discussing confidential matters, including but not limited to employment and personnel matters, real estate, lease, or other critical business negotiations, and consultations with the Cooperative’s attorneys or accountants. The Board shall record separate minutes of Closed Sessions and withhold such minutes from publication to the Members, unless disclosure is approved by a majority of all current Directors.
Section 4.7 Conflict of Interest.
Directors shall be under an affirmative duty to disclose an actual or potential conflict of interest in any matter under consideration by the Board. Directors having such an interest may not participate in the discussion or decision of the matter unless otherwise determined by the Board. Upon a determination by the Board that a Director had an actual conflict of interest and failed to notify the Board and participated discussion or decision on the matter, then that Director will be subject to automatic removal from the Board.
Section 4.8 Officers.
The Board shall be managed by Officers, consisting of a President, a Secretary, and a Treasurer. The offices of Secretary and Treasurer may be combined. The Board may create other Officers with defined roles to further the interests of the Cooperative.
a) The President shall serve as chair of the Board of Directors and lead its meetings and, subject to the supervision and direction of the Board, shall have administrative authority and responsibility for the operations of the Cooperative. The President shall have such other duties and powers as the Board shall determine from time to time.
b) The Treasurer shall, subject to the supervision and direction of the Board, maintain current and accurate financial records for the Cooperative.
c) The Secretary shall, subject to the supervision and direction of the Board, maintain the organizational records of the Cooperative including the roster of Members and ledger of Member Interest transactions, minutes of meetings, actions of the Members and the Board of Directors, other corporate documents, and perform other duties and powers as determined by the Board. The Secretary shall collect and maintain all current policies in single policy manual and provide each Director and the General Manager with a copy of the policy manual. In the absence of the Secretary at a meeting, a temporary secretary designated by the person presiding at such meeting shall perform the duties of the Secretary.
Section 4.9 Election of Officers.
The officers of the corporation shall be elected by the Board of Directors at the Annual Meeting. Each officer shall hold office for a term of two years, until a successor is validly elected. The Board may appoint a Member to fill vacancy on the Board resulting from an Officer’s resignation, death, or other cause.
Section 4.10 Duties of the Board.
a) General Powers. The Board shall conduct the business of the Cooperative and have the authority to take all actions necessary and appropriate in furtherance of the Cooperative’s business. The Board shall enact policies and rules consistent with these bylaws for the management of the business and the guidance of the members, officers, employees, and agents of the Cooperative. A Board member is subject to removal proceedings if that individual does not fulfill his or her duties as they are required under the Bylaws and Board policies.
b) General Manager. The Board shall have power to employ, define duties, fix compensation, and dismiss a manager with or without cause at any time. The Board shall authorize the employment of such other employees, agents, and counsel as it from time to time deems necessary or advisable in the interest of The General Manager shall run the day-to-day business operations of the Cooperative under the direction of the Board of Directors through written policies. This includes hiring and firing other employees.
c) The Board shall ensure the Cooperative carries all insurance coverage liability as is customary for the business.
d) Accounting and Audit. The Board shall implement an accounting system which shall be adequate to meet the requirements of the business and shall require proper records to be kept of all business transactions. At least once a year, before the Board’s Annual Meeting, the Board shall conduct a thorough and careful audit of the books and accounts of the Cooperative and render a report in writing This report shall include at least a balance sheet showing the true assets and liabilities of the Cooperative.
e) The Board may create committees to carry out its duties by a resolution adopted by a majority of Directors. Vacancies in the membership of such committees shall be filled by appointment made in the same manner as provided in the case of the original appointment. The authority of the committee will be established by the Board at the creation of the committee.
Article V – Indemnification
To ensure that the Directors and Officers are able to use independent judgment in their duties and actions, to serve the needs of the Cooperative without fear of external pressure or risk of financial liability, the Cooperative shall indemnify and hold harmless each person who serves or has served in the past as an Officer, Director, employee, or agent of the Cooperative in their duties for the Cooperative.
Article VI – Membership Meetings
Section 6.1 Annual Meetings.
A meeting of the members shall be held each year for the purpose of electing Directors and Officers and the transaction of such other business as may be properly brought before the meeting. Questions requiring decision by the Members shall be decided by majority vote of Members present.
Section 6.2 Notice of Meetings.
Notice of the Annual Meeting shall be generally circulated among the Members, at least two weeks before the Annual Meeting. The Ballot for any Election to be decided at the Meeting shall be included with the notice. Failure of any member to receive notice of the meeting does not invalidate any action taken at the meeting.
Section 6.3 Special Meetings.
The Board may call special meetings of the Members for the purpose of specific business that cannot wait to be presented at an Annual Meeting. Special Meetings shall be called upon by the Board or by written request of at least twenty percent of the membership. The request for Special Meeting shall state the specific purpose of the meeting, describing the business to be transaction and/or all questions to be decided. The Board shall schedule and notice the meeting to be held within thirty days of the request or Board decision to call the meeting.
Section 6.4 Voting.
a) Each member has one vote. The Board may write a policy detailing how votes shall be cast. Neither cumulative nor proxy voting is allowed. The Board may authorize mail ballots and shall accept all ballots received by the date and time of the meeting or, if the Board sets a voting period, by the close of business on the final day of the voting period.
b) Entity Designation to Cast Vote. If a membership is held by an entity, the Member shall designate in writing the person who will vote on behalf of the Member. That designation shall remain in effect until written notice of a properly authorized change is received by the Cooperative.
Section 6.5 Quorum.
The presence of ten percent of the membership shall constitute a quorum at any properly called Annual or Special Meeting.
Section 6.6 Supermajority Required for Certain Decisions.
The following actions by the Cooperative can only be made through an Election with approval of at least two-thirds of all voting Members entitled to vote: to merge the Cooperative with another Cooperative or business organization; to sell the Cooperative or substantially all of its assets; to amend the Articles of Incorporation.
Article VII – Miscellaneous Provisions
Section 7.1 Amendments.
a) Amendment by the Board. The Board may amend these bylaws by a two-thirds majority vote. Notice of the amendments to be considered shall be given at the Board meeting prior to the meeting in which the vote will take place. The Board will present the change in bylaws to the members at the next Annual Meeting.
b) Amendment by the Membership. The Membership may amend the bylaws by a two-thirds majority vote. Notice of the amendments to be considered shall be given along with the notice of meeting but no later than thirty days before the meeting.