San Juan Island Food Cooperative
ARTICLE I – NAME, LOCATION AND PURPOSE
Section 1. Name. The name of the association is the San Juan Island Food Cooperative (hereinafter referred to as “The Co-op”).
Section 2. Location. The location of the principal office of The Co-op is in Friday Harbor, Washington.
Section 3 Purpose. The Co-op will strive to provide access to high-quality local and regional food and goods that are organic, non-GMO, sustainable, fairly produced, at the lowest feasible cost, with the smallest carbon-footprint, while nurturing community connections.
Section 4. Registered Agent. The name and address of The Co-op’s initial agent shall be as set forth in The Co-op’s articles of incorporation (the “Articles of Incorporation”). The Board of Directors may change the registered agent at any time by making the appropriate filing with the Washington Secretary of State.
ARTICLE II – MEMBERSHIP
Section 1. Eligibility and Equity Interests. All individuals age eighteen (18) years or older are eligible to be Members of The Co-op (“Members”). Every Member shall have an equity interest in the Co-op equal to their equity investments (as provided below) reduced by any outstanding indebtedness of the Member to The Co-op (“Equity Interests”).
Section 2. Initial Equity Investment. Annually and prior to the end of each calendar year, the Board of Directors shall establish the required initial equity investment for persons desiring to become Members during the upcoming calendar year (“Initial Equity Investment”). The annual Initial Equity Investment amount established by the Board of Directors can never increase by more than 5% (five percent) above the preceding year’s amount. The Board of Directors can allow new Members to make the Initial Equity Investment over multiple years so long as the same opportunity is provided to all persons applying to become Members in the applicable calendar year. Any person seeking to become a Member shall be required to complete an online or written application and make an equity investment in The Co-op equal to the Initial Equity Investment amount established by the Board of Directors for the year in which they apply for membership. As to the initial Members of The Co-op who were also members of San Juan Food Connections, the nonprofit corporation predecessor in interest to The Co-op, the Board of Directors may elect to waive all or part of the required Initial Equity Investment based on the number of years they were members of San Juan Food Connections. Amounts so waived shall still be considered to have been paid by the respective Members for purposes of otherwise determining their Equity Interests.
Section 3. Additional Equity Investments. The Board of Directors may, from time to time, propose that Members make additional equity investments. Any such proposal must be submitted for approval of the Members at an annual meeting or at a special meeting called for that purpose. If approved, all Members shall be required to make the additional equity investment as a condition of remaining Members.
Section 4. Active Membership. Membership shall be maintained and deemed current during each calendar year as to which the Member shall: (1) be current with their financial obligations to The Co-op; and (2) have provided The Co-op with current postal and email addresses. If a membership is not current at any time, the individual shall lose all member rights as described in Article II Section 6. A person also ceases to be a Member upon their death or at any time they notify The Co-Op that they are terminating their membership. The Board of Directors also has the authority to terminate an individual’s membership for good cause (e.g., shoplifting or being rude to employees of The Co-op).
Section 5. Transfer of Memberships. In the event of the death of a Member, their membership shall be automatically transferred to their spouse or domestic partner. Otherwise, memberships are transferrable in accordance with such procedures as may be established by the Board of Directors.
Section 6. Membership Rights. Members shall have the right to: (1) vote on the election of directors and on each other issue presented for voting at meetings of Members; (2) be eligible to serve on the Board of Directors or any committee created by the Board of Directors; (3) participate in such Member pricing and/or ordering plans as may be in existence from time to time; (4) receive dividends, if declared by the Board of Directors; and (4) have all other rights accorded Members under the Articles of Incorporation and/or RCW Ch. 23.86.
Section 7. Related Individuals. Subject to any policies that are established by the Board of Directors, spouses, domestic partners and dependent children of Members shall be able to take advantage of any pricing and/or ordering plans that are available to Members but shall not otherwise have any rights as Members (except as otherwise provided in Article III below). The death of a Member shall not impact the rights of such related individuals for the balance of the calendar year in which the death occurs.
Section 8. Limit of Liability. Members shall not be liable for the debts of The Co-op.
Section 9. Termination of Membership Interest. In the event a Member ceases to be a Member other than as a consequence of the transfer of their membership, the former Member (or their successors in interest) shall be entitled to the return of the lesser of their Equity Interest or the fair value of their Equity Interest as determined in good faith by the Board of Directors. The Board of Directors may provide that the payment will be made over an extended period (not to exceed three years) and without interest on the deferred payments so long as the payment arrangement is applied on a consistent basis to all persons ceasing to be Members in the applicable calendar year.
ARTICLE III – MEMBERSHIP MEETINGS / VOTING
Section 1. Annual Meeting. There shall be an annual meeting of the Members on a date during the first three months of the calendar year, as determined by the Board of Directors at least sixty (60) days in advance of the meeting date.
Section 2. Special Meeting. Special meetings of the Members may be called at any time by the President, the Board of Directors or at the written request of ten percent (10%) of the Members, which request must specify the purpose of the special meeting.
Section 3. Notice. During the period of at least thirty (30) days before an annual meeting and of at least fifteen (15) days before a special meeting, notice of the meeting and an agenda of topics to be covered shall be: (i) posted in The Co-op store; (ii) included in any electronic or paper newsletter or announcement that has been made generally available to the Members; and (iii) emailed at least twice to Members at the email addresses they have provided to The Co-op.
Section 4. Quorum. A quorum of the Members for voting at an annual meeting shall be 10% (ten percent) of the Members and at a special meeting shall be ten percent (10%) of the Members, in either case as determined on the first day of the month in which the meeting is held. If a quorum does not exist at the time of an annual meeting (as specified in the notice of meeting), a quorum may still be established by including official ballots received within the 30-day period before or after the time of the annual meeting or such shorter period as may be set by the Board of Directors.
Section 5. Decision Making. Decisions by the Members, other than the election of directors, a quorum having been established, shall be accomplished by a sixty percent (60%) majority of those Members voting.
Section 6. Voting and Official Ballots. Each Member shall be entitled to one vote upon each matter submitted to a vote other than as to the election of directors. Members may vote in person at a meeting or, in the case of an annual meeting, by submitting an official ballot as provided in this Section. Official ballots will be issued for any matter to be voted on in an annual meeting and which are included in the notice of meeting. Other than procedural items relating to the conduct of the annual meeting, matters may not be voted upon at an annual meeting unless they were included in the notice of meeting and on the official ballots. Ballots will be received in an official ballot box in the The Co-op store or by electronic or postal mail during a seven (7) day period prior to the annual meeting and ending seven (7) days after the annual meeting, or longer if needed to attain a 10% quorum of votes. The Co-op will keep a record of Members submitting official ballots. Official ballots may not be rescinded; accordingly, any Member who has submitted an official ballot will not be able to vote in person at the annual meeting on any matter that was included on the official ballot. Members who have submitted an official ballot will be included for purposes of determining whether a quorum is present at an annual meeting. Official ballots will not be used for special meetings, as Members or their designated proxy must be present at any special meeting to vote.
Section 7. Proxy Voting. A Member who is unable to attend a meeting may designate in writing any active Member of the San Juan Island Food Coop to vote in their place as their proxy representative at the actual meeting, but not by submitting an official ballot. Proxy voting of any other kind shall not be permitted. A Member representing another Member by proxy vote is limited to only one such proxy vote; accumulation of multiple proxy representation is not allowed.
ARTICLE IV – BOARD OF DIRECTORS
Section 1. Responsibilities. Except for the authority reserved to the Members, the Board of Directors shall have responsibility and authority for the management of The Co-op. Without limiting the generality of the foregoing, the Board of Directors shall: (1) establish governing policies; (2) adopt budgets and monitor financial performance in order to assure the financial health and long-term viability of The Co-op; (3) hire a General Manager to perform the day-to-day management of The Co-op store; (4) establish the General Manager’s authority, scope of employment and performance objectives; (5) evaluate and hold the General Manager accountable and, if necessary, terminate the employment of the General Manager; and (6) ensure performance by monitoring compliance with its policies and goals.
Section 2. Number. The Board of Directors shall consist of not less than five (5) nor more than seven (7) persons.
Section 3. Meetings. The Board of Directors shall hold regular meetings, generally monthly. Special meetings of the Board may be called by the President when deemed necessary, or by written request of a quorum of the Board of Directors. Notice of each meeting’s date, time and location shall be posted on The Co-op’s website a minimum of seven (7) days prior to a meeting except that in the case of a special meeting, called on less than seven (7) days prior notice, the notice shall be posted on the website as soon as is feasible after the meeting has been called. Meetings shall be open to Members unless the Board of Directors, based on advice of legal counsel or as necessary to discuss personnel matters, votes to close the meeting.
Section 4. Quorum. A quorum of the Board of Directors shall be a simple majority of the current number of directors. Directors may participate in a meeting by conference call or similar means and directors so participating shall be counted for purposes of determining a quorum and voting.
Section 5. Decision Making. Decisions of the Board of Directors shall be made by a majority vote of the directors at a meeting at which a quorum is present. All actions of the Board of Directors may also be taken by unanimous written consent in lieu of meeting.
Section 6. Conflict of Interest. Directors shall be under an affirmative duty to disclose in advance their actual or potential conflicts of interest in any matter under consideration by the Board of Directors. Unless the remaining directors vote to waive the conflict, a director must recuse themselves from voting on any matter or transaction that comes before the Board of Directors in which the director has a conflict of interest.
Section 7. Committees. The Board of Directors may create committees to assist in the management of The Co-op. Committees may include directors, non-directors, Members and non-Members. Committees shall have such authority as may be determined by the Board of Directors except that no committee shall have authority to elect officers, amend these Bylaws, fill vacancies on the Board of Directors, hire or remove the General Manager, create committees, select committee members or otherwise take any action that by applicable law is reserved to the Board of Directors.
ARTICLE V – SELECTION OF DIRECTORS
Section 1. Qualifications. A director must be a Member at the time they are elected as a director and for so long as they remain a director. If a director ceases to be a Member, they shall be deemed to have submitted their resignation as a director.
Section 2. Paid Employees. A paid employee of The Co-op may become a director so long as no other directors are then paid employees of The Co-op and so long as the individual is not the General Manager of The Co-op.
Section 3. Initial Directors. The initial directors shall be the individuals listed in the Articles of Incorporation, with staggered terms as designated therein. Initial directors need not stand for election until their term expires.
Section 4. Candidates. Candidates for director shall submit a written notice of intent to the Secretary at least twenty-one (21) days prior to the annual meeting in order to appear on the official ballot. Persons who have not given timely notice may still run for director, but their names will not appear on the official ballot. Candidates need not designate the seat for which they choose to run.
Section 5. Election. Members shall have one vote for each open director position but may not accumulate their votes for any one or more candidates. Those candidates receiving the most votes shall fill the open seat(s). If more than one employee-candidate is running, only the employee-candidate receiving the most votes as among the employee-candidates can be elected as a director and the other employee-candidate(s) shall be eliminated from the tally. Runoffs between tied candidates are required in the event the tie would result in there being more directors than open positions. A special election shall be held between the two tied candidates to determine which shall fill the seat. The provisions of these Bylaws applicable to the annual meeting shall apply with respect to any such special election.
Section 6. Term for Elected Directors. Directors shall be elected for a 3-year term although the exact duration may vary depending on the dates of annual meetings. The elected director’s term shall begin at the conclusion of the annual meeting at which they are elected and shall continue until the conclusion of the third annual meeting following their election unless prior to then they resign, die or are removed from office. Directors shall serve no more than three (3) consecutive full terms.
Section 7. Removal. A director may be removed from office by the Members as provided in RCW 23.86.087. A director may also be removed as a director by a minimum two-thirds vote of the full Board of Directors at any meeting of the Board of Directors called for that purpose; the meeting must be open to the Members and the director sought to be removed shall have the same rights at that meeting as a director being considered for removal pursuant to RCW 23.86.087.
Section 8. Vacancies. Any vacancy on the Board of Directors shall be filled by the Board of Directors as soon as is feasible. To be selected to fill a vacancy, a replacement director requires the affirmative vote of at least two-thirds of the full Board of Directors. Replacement directors shall serve until the expiration of the term of the director they are replacing unless prior to then they resign, die or are removed from office.
ARTICLE VI – OFFICERS
Section 1. Election. At its first meeting following an annual meeting of Members, the Board of Directors shall elect a President, Vice President, Treasurer and Secretary. All officers other than the Treasurer, who must have expertise in financial matters, must be directors and Members. The Board may appoint such additional officers as it deems appropriate; additional officers need not be directors but must be Members. Officers shall hold office until their successors are elected unless prior thereto, they resign, are removed, or no longer satisfy the requirements specified above for holding their office. Any vacancy shall be filled by the Board of Directors at the next meeting of the Board of Directors.
Section 2. The President shall preside at all meetings of the Board of Directors, shall perform such duties as are provided in these Bylaws and shall otherwise generally perform the duties typically performed by a president of a cooperative association in which day-to-day management responsibilities are being handled by a General Manager. The President shall appoint the chairperson of each committee established by the Board of Directors and, unless they are a member of the committee, shall be an ex-officio member of each such committee.
Section 3. The Vice President shall perform the duties of the President in their absence or if a vacancy in the office occurs and shall undertake such other responsibilities as the President may assign.
Section 4. The Secretary shall be custodian of The Co-op records and shall otherwise generally perform the duties typically performed by a secretary of a cooperative association in which day-to-day management responsibilities are being handled by a General Manager. The records shall include copies of all important records, legal documents, financial statements, minutes of meetings of the Board of Directors and membership, and any other pertinent documents relating to The Co-op. The records shall be kept at The Co-op office and in an online file system accessible to all directors.
Section 5. The Treasurer shall provide financial counsel to the board to ensure the integrity of financial accounts and shall otherwise generally perform the duties typically performed by a treasurer of a cooperative association in which day-to-day management responsibilities are being handled by a General Manager. The Treasurer may execute contracts and agreements approved by the Board of Directors, but may not be the sole signatory on behalf of The Co-op. The Board of Directors may elect to have the Treasurer, rather than the Secretary, be the custodian of the financial records of The Co-op. In such event, such records shall still be kept at The Co-op office and in an online file system accessible to all directors.
Section 6. Removal. An officer may be removed from office by the members as provided in RCW 23.86.087. An officer may also be removed as an officer by a minimum two-thirds vote of the full Board of Directors at any meeting of the Board of Directors called for that purpose; the meeting must be open to the Members and the officer sought to be removed shall have the same rights at that meeting as an officer being considered for removal pursuant to RCW 23.86.087.
ARTICLE VII – MEMBER DIVIDENDS
Section 1. Operating Principles and Reserves. The Co-op shall operate for the purposes defined in Article I and for the mutual benefit of its Members, as nearly as possible at cost, provided that reasonable reserves, as determined by the Board of Directors, may be set aside and accumulated for the purpose of meeting the operating and capital needs of The Co-op and for such other purposes as the Board of Directors may determine are in the best interest of The Co-op.
Section 2. Member Dividends. There is no expectation that monies will be available for distributions to Members. If, however, the Board of Directors has paid all expenses and set aside sufficient reserves, it may further determine that distributions are appropriate and financially feasible. In such event, the Board of Directors may elect to make distributions to then-existing Members. At the discretion of the Board of Directors and subject to the Articles of Incorporation, distributions may either be made in equal amounts to each Member or may be based on the total purchases at the store during the preceding calendar year by the Member and their related individuals as provided in Article II above.
ARTICLE VIII – AMENDMENTS
Section 1. These Bylaws may be amended by a majority vote of the Members at an annual meeting as to which notice of the proposed amendment is provided to Members as part of the annual meeting notice, or at a special meeting called for that purpose. If done at an annual meeting, the proposed amendment shall be included on the official ballot.
Section 2. Notice of the action to be taken must include the proposed amendment together with an explanation for the amendment.
ARTICLE IX – STANDARD OF CARE AND INDEMNIFICATION
Section 1. Standard of Care. Directors and officers shall be responsible for discharging their duties in good faith, in a manner that they reasonably believe to be in the best interests of The Co-op and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
Section 2. Duty Upon Termination of Position. At the time a person ceases to be a director and/or officer, they shall promptly turn over to the President or the President’s designee all money, keys, property, papers, records, books, digital passwords or other pertinent resources of The Co-op that may be in their possession.
Section 3. Indemnification for Successful Defense of Proceedings. The Co-op shall indemnify any director or officer who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which they were a party by reason of the fact that they are or were a director or officer of The Co-op, against reasonable expenses (including counsel fees) incurred by them in connection with the proceeding, whether civil, criminal, administrative or investigative and whether formal or informal.
Section 4. Indemnification for Other Proceedings. The Co-op may, to the fullest extent permitted by law, indemnify each person who may serve or who has served at any time as a director, officer, employee or agent of The Co-op against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon such person in connection with any proceeding in which they may become involved by reason of them serving or having served in such capacity. The indemnification provided hereunder shall inure to the benefit of the heirs, executors and administrators of a director, officer or other person entitled to indemnification hereunder.
Section 5. Non-Exclusivity of Indemnification Rights. The foregoing rights of indemnification shall be in addition to and not exclusive of any other rights which such director, officer, or other person may be entitled to under any agreement with The Co-op or any action taken by the directors or Members of The Co-op or otherwise.