Hoosier Harvest Market Bylaws
The Mission of the Hoosier Harvest Market, Inc. is to connect Indiana food producers with Indiana consumers for locally grown food products. The Hoosier Harvest Market, Inc (“Cooperative”) is incorporated in the State of Indiana as a non-profit, mutual benefit cooperative.
The Hoosier Harvest Cooperative (the Cooperative) is a not-for-profit mutual benefit cooperative according to IC 23-17 of the State of Indiana.
Section 1. Qualifications
Members shall consist of those entities that produce goods which can be sold through the Cooperative. Any person, family, firm, partnership, LLC, corporation or Cooperative, who signs and abides by the Membership Agreement with the Cooperative, and meets such other conditions as may be prescribed by the board of directors, may become a member of the Cooperative. Membership becomes effective upon signing the membership agreement provided that all membership requirements are met.
Section 2. Suspension or Termination
In the event the board of directors of the Cooperative shall find that any member has ceased to be an eligible member under Section 1, above, the board shall give the member written notice of the violation and allow thirty (30) days to cure the violation. If the violation is not cured, the board shall set a hearing date within sixty (60) days of the mailing notice. Following the hearing, the board shall determine whether the member is eligible to retain membership or whether a suspension or termination is required in the best interests of the Cooperative. If an affirmative vote of a majority of the directors casting votes finds for suspension or termination, the Member shall be suspended or terminated as the case may be.
Written notice may be given using any of the following methods; by mail, by electronic or facsimile transmission. If mailed, the notice is given when it is deposited in the U.S. Mail, with postage prepaid, addressed to the person at the person’s address as it appears on the records of the Cooperative. If notice is sent by electronic or facsimile, notice is given when an electronic or facsimile confirmation of delivery is received by the Cooperative.
A suspended or terminated member shall have no rights or privileges, nor vote or voice in the management or affairs of the Cooperative other than the right to participate in accordance with law in the event of dissolution. A suspended or terminated Member may 2 apply for renewed membership after three (3) years have lapsed.
Meetings of Members
Section 1. Annual Meeting
The annual meeting of the members of this Cooperative shall be held in the State of Indiana, during the month of February or on such date as the board of directors may determine. The board shall designate the time and place of meetings.
Section 2. Special Meetings
Special meetings of the members of the Cooperative may be called at any time by order of the board of directors and shall be called by the directors upon receipt of a written petition signed by at least Fifty-One (51%) of the members entitled to vote. The petition must state the specific business to be brought before the Cooperative and demand a special meeting at any time for consideration of such business. The directors shall designate the time and place for a special meeting.
Section 3. Notice of Meetings
Written notice of every regular and special meeting of members shall be prepared and mailed to the last known post office address of each member at least ten (10) days before such meetings. Notice is given when it is deposited in the U.S. mail. The meeting notice may also be delivered by electronic means. Such notice shall state the nature of the business expected to be conducted and the time and place of the meeting. No business shall be transacted at any special meeting other than that referred to in the notice.
Section 4. Voting
Unless otherwise stated in the Articles of Incorporation, or these Bylaws, or required by applicable law, all questions shall be decided by a vote of a majority of the members voting on the question. Each member shall be entitled to only one vote. Voting shall be permitted by mail, e-mail, or in person. Proxy voting shall be allowed. Each proxy shall be in writing, signed by the voting member. The proxy votes shall submitted to the chair of the board of directors who will cast the votes on behalf of the member(s). If a membership is held by a household, partnership, LLC, or other legal entity, the member shall designate in writing the person who shall vote on behalf of the member. That designation shall remain in effect until written notice of a properly authorized change in the designated voter shall be received by the Cooperative.
Section 5. Quorum
Ten percent (10%) of membership shall constitute a quorum at any properly called annual or special membership meeting.
Retail or wholesale consumers of products made available through the Cooperative may become subscribers of the Cooperative. Subscribers will be eligible for certain benefits and discounts as determined from time to time by the board of directors, have access to sale items not available to non-subscribers, and allowed to attend and have voice without vote at the annual meeting of the Cooperative. The board of directors shall establish the annual fee required for subscription.
Directors and Officers
Section 1. Number and Qualifications of Directors
The Cooperative shall have a board of directors of between five and twelve members; provided, however, if the Cooperative has fewer than five members, the number of directors shall equal the number of members. Each director shall be a designated voting member of this Cooperative in good standing. If a majority of the board of directors of the Cooperative finds at any time that any director or officer is so engaged or affiliated and has failed to follow the provisions set forth in Article Fifteen of these Bylaws dealing with conflicts of interest, the procedure for Removal of Directors and Officers as set forth in Article Six, Section 10 shall be followed, with the board requesting removal in the place of the member petition.
Section 2. Election of Directors
At the annual meeting of the members of the Cooperative, directors shall be elected to succeed the incorporating directors. An approximately equal number of directors shall be elected for one (1) year; two (2) year and three (3) year terms. At each annual meeting thereafter, new directors shall be elected, for a term of three (3) years each, to succeed those directors whose terms are expiring. However, if the number of members of the Cooperative is five or fewer, all members shall serve as directors until the next annual meeting held after membership has increased to more than five members. All directors shall be elected by secret ballot, and the nominee(s) receiving the greatest number of votes shall be elected. Voting shall be non-cumulative.
Section 3. Election of Officers
The board of directors shall meet within seven (7) days after the first election and within seven (7) days after each annual election and shall elect by ballot a president, vice president, secretary, and treasurer, each of whom shall hold office until the election and qualification of a successor, unless earlier removed by death, resignation, or for cause. The president and vice president shall be members of the board of directors. The secretary and treasurer need not be directors or members of the Cooperative. The secretary and treasurer offices may be held by the same person, but no officer shall execute or acknowledge any instrument in more than one capacity if the instrument is required by law or by the Articles of Incorporation or the Bylaws to be executed, acknowledged, or verified by two or more officers.
Section 4. Vacancies
Whenever a vacancy occurs in the board of directors, other than from the expiration of a term of office, the remaining directors, by majority vote, shall appoint a member to fill the vacancy for the remainder of the term. If one or more officer positions become vacant, such offices shall be filled by the board of directors, through election by ballot, at either a regular or special meeting of the board.
Section 5. Regular Board Meetings
In addition to the meetings mentioned above, regular meetings of the board of directors shall be held monthly, or at such times and at such places as the board may determine.
Section 6. Special Board Meetings
A special meeting of the board of directors shall be held whenever called by the president or a majority of the directors. Only the business specified in the written notice shall be transacted at a special meeting. Each call for a special meeting shall be in writing or electronic and delivered to the secretary, and shall state the time and place of such meeting.
Section 7. Notice of Board Meetings
Oral, written, or electronic notice of each meeting of the board of directors shall be given each director by, or under the supervision of, the secretary of the Cooperative prior to the time of meeting. But such notice may be waived by any director, and their appearance at a meeting shall constitute a waiver of notice.
Section 8. Quorum
A majority of the board of directors shall constitute a quorum at any meeting of the board.
Section 9. Reimbursement and Compensation
The Cooperative may reimburse directors for all reasonable expenses incurred in carrying out their duties and responsibilities. The compensation, if any, of the members of the board of directors shall be determined by the members of the Cooperative at any annual or special meeting of the Cooperative. No director of the Cooperative, during the term of his office, shall be a party to a contract for profit with the Cooperative differing in any way from the business relations accorded regular members.
Section 10. Removal of Directors and Officers
Whenever any director shall fail to meet qualifications as described in Section 1 of this Article, or fails to attend three (3) consecutive board meetings either regular or special without just cause and provided that notice of such meetings has been given in accordance with these bylaws, then it shall be the duty of the board to remove said director and to fill the vacancy in accordance with Section 4 of this Article. Any member of the Cooperative may bring charges against an officer or director of the Cooperative by filing them in writing with the secretary of the Cooperative, together with a petition, signed by twenty percent (20%) of the members, requesting the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the Cooperative and, by a majority of the members voting, the Cooperative may remove the officer or director and fill the vacancy. The director or officer against whom such charges are 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 bringing the charges against him shall have the same opportunity.
Duties of Directors
Section 1. Management of Business
The board of directors shall have general supervision and control of the business and the affairs of the Cooperative and shall make all rules and regulations not addressed by law, the articles of incorporation, or bylaws for the management of the business and the guidance of the members, officers, employees, and agents of the Cooperative.
Section 2. Bonds and Insurance
The board of directors may require the manager and all other officers agents and employees charged by the Cooperative with responsibility for the custody of any of the funds, negotiable instruments, or other property of or for the Cooperative to give adequate bonds. Such bonds, unless cash security is given, shall be furnished by a responsible company and approved by the board of directors, and the cost shall be paid by the 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 the 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 Audits
The board of directors shall have installed an accounting system that 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 in each year the board of directors shall secure the services of a competent and disinterested qualified third party, who shall make a careful reconciliation of the books and accounts of the Cooperative and render a report in writing, which report shall be submitted to the directors and the manager of the Cooperative, and an operating statement for the fiscal period under review.
Section 4. Depository
The board of directors shall select one or more banks to act as depositories of the funds. The board of directors shall also determine the manner of receiving, depositing, and disbursing the funds, form of checks and the person or persons with signing authority for such checks and accounts.
Section 5. Committees
The board may, at its discretion, appoint from its own membership an executive committee of three (3) members, and determine their tenure of office and their powers and duties. The board may delegate to the executive committee all or any stated portion of the functions and powers of the board, subject to the general direction, approval, and control of the board. Copies of the minutes of any meeting of the executive committee shall be available to all directors within seven (7) days following such meeting. The board of directors may, at its discretion, appoint such other committees, as it deems appropriate.
Duties of Officers
Section 1. President.
The president shall (1) preside over all meetings of the Cooperative and of the board of directors; (2) call special meetings of the board of directors; (3) appoint such committees as the board of directors may deem advisable for the proper conduct of the Cooperative; and (4) perform all acts and duties usually performed by a presiding officer.
Section 2. Vice President.
In the absence or disability of the president, the vice president shall perform the duties of the president; provided, however, that in case of death, resignation, or disability of the president, the board of directors may declare the office vacant and elect any eligible person president.
Section 3. Duties of Secretary.
The secretary shall keep a complete record of all meetings of the Cooperative and of the board of directors and shall have general charge and supervision of the books and records of the Cooperative. The secretary shall sign papers pertaining to the Cooperative as authorized or directed by the board of directors. The secretary shall serve all notices required by law and by these bylaws and shall make a full report of all matters and business pertaining to the office to the members at the annual meeting. The secretary shall perform such other duties as may be required by the Cooperative or the board of directors. Upon the election of a successor, the secretary shall turn over all books and other property belonging to the Cooperative to the successor.
Section 4. Duties of Treasurer.
The treasurer shall be responsible for the keeping and disbursing of all monies of the Cooperative, and shall provide for keeping accurate books of accounts of all transactions of the Cooperative. The treasurer shall perform such duties with respect to the finances of the Cooperative as may be prescribed by the board of directors. At the expiration of the term of office, the treasurer shall promptly turn over to the successor all monies, property, books, records, and documents pertaining to the office or belonging to the Cooperative.
Patrons and Patrons’ Net Margins ‘
Section 1. Operation at Cost
The Cooperative shall at all times be operated on a cooperative service-at-cost basis for the mutual benefit of its member patrons. The term “Patron” as used in these Bylaws and in the Articles of Incorporation shall mean members doing business with this Cooperative. Each transaction conducted on a cooperative basis between this Cooperative and each Patron shall be a “patronage transaction” and shall include as part of its terms each provision of the Articles of Incorporation and Bylaws of this Cooperative, whether or not referred to in the transaction. Each Patron shall be entitled to a portion of Patrons’ Net Margins (patronage refunds), as provided in these Bylaws. Subscribers, as defined in Article Five, are not entitled to a portion of Patrons’ Net Margins.
Section 2. Computation of Net Margins
The Net Margins shall be computed on a tax basis as of the end of each fiscal year as follows:
Section 2.1 Gross Receipts.
Proceeds of sales of products marketed for Patrons, plus amounts received for supplies and services provided to Patrons, plus amounts received from any other source, shall be “gross receipts.”
Section 2.2 Net Margins.
This Cooperative shall deduct from gross receipts the sum of all costs and expenses and other charges that are excludable or deductible from this Cooperative’s gross income for the purpose of determining federal income or related taxes payable by this Cooperative, except the amount of such taxes, the amount of non-qualified allocations redeemed, and the amount of the Patrons’ Net Margins. The gross receipts that remain after the foregoing deductions shall be called “Net Margins.”
Section 3. Allocation.
Cooperative Net Margins. From the Net Margins, the Cooperative shall set aside “Cooperative Net Margins” to be applied to the Cooperative’s federal income or related taxes. The funds to pay taxes shall first come from Net Margins attributable to sources other than patronage transactions (“non-patronage source margins”) to the extent allocable under federal income tax law. Any non-patronage source margins not so applied shall be set aside in the Capital Reserve. The Cooperative Net Margins shall also be applied to the dividends paid, if any, on preferred stock.
Patrons’ Net Margins. The balance of Net Margins after deduction of the Cooperative Net Margins shall be the Patrons’ Net Margins. The Patrons’ Net Margins shall belong to the Patrons on the basis of their respective patronage transactions and may be allocated on the basis of their respective patronage of the Cooperative and the Net Margins that resulted from the operations of the Cooperative.
Section 4. Distribution of Patrons’ Net Margins.
Section 4.1 Written Notice of Allocation.
The Cooperative shall distribute Patrons’ Net Margins within eight and one-half (8 1⁄2) months after the end of each fiscal year by written notice of the allocation. The written notice shall show the manner and amount of distribution, and the exact amount distributed in cash, or in Capital Credits (or any combination of the two). The Board of Directors may establish a plan for financing the Cooperative that relates Patron investment to patronage transactions. Such plan may provide for the periodic adjustment of Patron investment by the application of a Patron’s patronage refunds to additional investment requirements prescribed by the plan.
Section 4.2 Events of Forfeiture of Refund.
If the Cooperative distributes a patronage refund to a Patron who (a) does not consent to include the patronage refund in income as provided in the Consent Bylaw; or (b) is unable to receive distribution; or (c) cannot be located for redemption of such patronage refunds, such patronage refunds shall forfeit to this Cooperative and be added to the Capital Reserve. Patronage refunds of less than Ten Dollars ($10) shall be treated as non-distributable Net Margins and added to the Capital Reserve.
Section 5. Capital Reserve.
The Cooperative shall maintain a Capital Reserve for the purpose of providing a reserve against which it may charge losses and other charges that could be charged against the surplus of a business corporation for profit.
Section 6. Loss or Losses.
If the Cooperative incurs a net loss in any fiscal year, such net loss may be charged against the Capital Reserve. If the loss exceeds the Capital Reserve or, in any event, if the Board so elects, the loss may be recovered from prior or subsequent years’ Net Margins. The Board shall have no authority to make assessment for net losses against Members. This section shall not be construed to deprive the Cooperative of the right to carry back or carry forward net operating losses in accordance with the Internal Revenue Code or Indiana taxing statutes.
Section 7. Consent Bylaw.
Each person (including individuals, partnerships, corporations, limited liability companies) who is accepted to Membership in this Cooperative and each Member of this Cooperative on the effective date of this Bylaw who continues as a Member shall, by such act alone, consent to include in gross income (for federal income tax purposes) the amount of any written notice of allocation (as defined in 26 U.S.C. Section 1388, the Internal Revenue Code) received from this Cooperative with respect to his or her patronage transactions as provided in 26 U.S.C. Section 1385.
Section 8. Records and Documentation.
The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year, the amount of capital, if any, so furnished by each member is clearly reflected and credited in an appropriate record to the capital account of each member.
Section 9. Fiscal Year.
The fiscal year of this Cooperative shall commence on the first day of January and end on the last day of December.
Section 1. Regular Redemption.
If at any time the board of directors determines that the financial condition of the Cooperative will not be impaired by a redemption, capital credited to members’ accounts may be redeemed in full or in part. Any such redemption of capital shall be made in order of priority according to the year in which the capital was furnished and credited, the capital first received by the Cooperative being the first redeemed.
Section 2. Discretionary Special Redemptions.
Notwithstanding any other provision of these bylaws, the board, at its absolute discretion, shall have the power to retire any capital credited to members’ accounts on such terms and conditions as may be agreed upon by the parties in any instance in which the interests of the Cooperative and its members are deemed to be furthered thereby and funds are determined by the board to be available for such purposes.
This Cooperative may conduct business with nonmembers on either a patronage or nonpatronage basis. However, this Cooperative shall not Cooperative the products of nonmembers in an amount the value of which exceeds the value of the products marketed for members. It shall not purchase supplies and equipment for nonmembers in an amount the value of which exceeds the value of the supplies and equipment purchased for members.
Dissolution and Property Interest of Members
Section 1. Voluntary Dissolution.
At any member meeting held for the purpose of dissolving the Cooperative, the members may adopt a resolution of dissolution by the affirmative vote of sixty percent (60%) of the members votes cast on the proposal. Notice of the meeting shall be given to all members, whether or not entitled to vote.
Section 2. Involuntary Dissolution.
The board of directors may adopt a resolution of dissolution in the following cases:
When the Cooperative has been adjudged bankrupt or has made a general assignment for the benefit of creditors:
By leave of the court, when a receiver has been appointed in a general creditors’ suit or in any suit in which the affairs of the Cooperative are to be wound up:
When the Articles of Incorporation have been canceled for failing to file annual franchise or excise tax returns or to pay franchise and excise taxes and the Cooperative has not been nor desires to be reinstated: or
When substantially all of the assets have been sold at judicial sale or otherwise. The board of directors shall be responsible for seeing the appropriate state filings are made and notices given pursuant to Chapter 1729.
Section 3. Disbursement of Assets.
Upon dissolution, the board of directors shall disburse the Cooperative’s assets in the following order; first, to pay the Cooperative’s debts and liabilities; second, to retire all capital furnished through patronage (member capital accounts) without priority on a pro rata basis; and third, to distribute the remaining property and assets of the Cooperative among the members in the proportion in which the aggregate patronage of each member bears to the total patronage of all such members insofar as practical, unless otherwise provided by law.
The Cooperative shall indemnify its officers, directors, employees, and agents to the fullest extent possible. The Cooperative may purchase liability insurance coverage for any person serving as an officer, director, employee or agent to the extent permitted by applicable Indiana law. The directors of the Cooperative shall be liable only as members of the Cooperative, unless otherwise provided by law.
If notice of the character of the amendment proposed has been given in the notice of meeting, these Bylaws may be altered or amended at any regular or special meeting of the members by the affirmative vote of the majority of the member votes cast.
Conflict of Interest
Section 1. General policy.
Recognizing that directors and officers have a duty to loyalty and fidelity to the Cooperative and must govern the Cooperative’s affairs honestly and economically, while exercising their best care, skill and judgment for the benefit of the Cooperative, to avoid even the appearance of impropriety, the directors and officers of the Cooperative shall:
Disclose to the Board any situation wherein the director or officer has a conflicting or duality of interest that could possibly cause that person to act in other than the best interest of the Cooperative; and
Follow the procedures stated in Section 2, below, governing the participation on behalf of the Cooperative in any transaction in which the person has, or may have, a conflict of interest.
Section 2. Procedure.
Any director or officer having a known duality of interest or possible conflict of interest on any matter shall make a disclosure of such conflict to the other directors. Such director shall not vote or use his or her personal influence on the matter, but such director may be counted in determining the quorum for the meeting. The minutes of the meeting shall reflect the making of the disclosure, the abstention from voting and the quorum situation. Any officer having a known duality of interest or possible conflict of interest on any matter before such officer for administrative action shall report the conflict to the president or, in the case of the president, to the vice president. Such officer shall abstain from taking any administrative action on the matter. The requirements in this Section 2 shall not be construed as preventing any director or officer from briefly stating his or her position in the matter, nor from answering pertinent questions of the board or other officers.