Note: The source and revision history for all IO Cooperative policies is also available.
The corporation described in these Bylaws will be known as IO Cooperative, Inc., referred to, infra, as “the Corporation.”
The primary purpose of the Corporation is to engage in the business of selling server co-location, network connectivity, virtual hosting, and other technology products and services to its members, who will be the ultimate consumers of these products and services.
Other objectives of the Corporation include:
(a) Cooperative service for the benefit of its members and the public;
(b) Promotion of cooperative ideals and affiliation with other cooperative enterprises;
(c) Conducting such other activities as will serve the economic, educational, recreational, and cultural welfare of its members and the public.
Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the California Consumer Cooperative Corporation Law, referred to henceforth as “Coop Law”, will govern the construction of these bylaws.
To the fullest extent possible, “written” or “in writing” in these Bylaws includes facsimile, telegraphic, electronic mail, and other electronic transmission by and to the corporation, as authorized by California Corporate Code Sections 8, 20, and 21.
“Shareholder” and “member” and their plurals will be synonymous terms throughout these Bylaws.
The Corporation will have one class of members.
Any natural person or organization (except a subsidiary of the Corporation), who supports the values, vision, and mission of the Corporation, and is prepared to accept the responsibilities of membership, may become and remain a member of the Corporation by:
(a) Complying with such uniform conditions as may be prescribed by the Board of Directors;
(b) – Intentionally left blank –
(c) Making payment for one membership, either in full, or in accordance with a payment schedule established under section 4.08 of these Bylaws.
An applicant eligible for and desiring admission in the Corporation must file a written application for admission in whatever form and containing whatever information the Board of Directors may prescribe.
Applications for membership will be reviewed by the Board of Directors or by a duly authorized Membership Committee. An applicant will be accepted unless rejected in writing within thirty days for reasons satisfactory to the Board. If accepted, the applicant will be admitted to membership. If rejected, the applicant will be notified in writing and entitled to a refund of any amounts paid for memberships.
No member may transfer his or her membership or any right arising therefrom.
Each prospective member, upon application for membership, must receive a copy of the Articles of Incorporation, Bylaws, and other relevant disclosures required by Coop Law Section 12401(b).
Memberships may be issued for money paid in an amount and on terms determined from time to time by the Board of Directors. No member may be issued more than one membership.
Membership ownership entitles a member to only one vote in the affairs of the Corporation, and to all the rights of membership as described by statute, the Articles of Incorporation, and these Bylaws. The Corporation will not pay dividends on memberships.
(a) Pursuant to Coop Law Section 12401, prior to issuing a membership, the Corporation must provide a written disclosure to the purchaser, containing all information required by the statute, in one of its prescribed forms.
(b) The Corporation must issue a receipt or written advice of purchase to anyone purchasing a membership.
No memberships of this Corporation may be assigned or transferred. Any attempted assignment or transfer will be wholly void and will confer no rights on the intended assignee or transferee.
The Corporation may delay the purchase of memberships as described in section 5.04 of these Bylaws if the Corporation, in making such purchase is, or as a result thereof would be, likely to be unable to meet its liabilities (except those whose payment is otherwise adequately provided for) as they mature.
Any membership of a member, together with any accrued and unpaid patronage distributions related to that member, that would otherwise escheat to the State of California as unclaimed personal property, may instead become the property of the Corporation if the Corporation gives at least sixty days’ prior notice of the proposed transfer to the affected member by (1) first-class or second-class mail to the last address of the member shown on the Corporation’s records, and (2) by publication in a newspaper of general circulation in the county in which the Corporation has its principal office. No memberships or amounts may become the property of the Corporation under this section of the Bylaws if written notice objecting to the transfer is received by the Corporation from the affected member prior to the date of the proposed transfer.
A member may resign from the Corporation and terminate his or her membership by filing with the Secretary of the Corporation a written notice of resignation. The resignation will become effective immediately without any action on the part of the Corporation.
A membership will immediately terminate upon the death of a member or the dissolution of a member that is an organization.
(a) A member may, for failure to comply with these Bylaws, rules, or regulations of the Corporation, for failure to patronize the Corporation during the immediately preceding fiscal year of the Corporation in the amount of at least fifty dollars ($50.00), or for any other justifiable reason, including refusal to repay debt owed to the Corporation, be expelled from the Corporation by resolution adopted by a two-thirds vote of all members of the Board of Directors. Expulsion will become effective immediately unless the Board fixes another time in the resolution. On expulsion, the name of the member expelled must be stricken from the membership register and all of his or her rights will cease except as provided in Section 5.04 of these Bylaws.
(b) Prior to expulsion of a member, the Board of Directors must give such member at least fifteen days notice prior thereto and the reasons thereof. Such member must have the opportunity to be heard, orally or in writing, not less than five days before the effective date of expulsion by the Board.
(c) The notice required pursuant to subsection (b) of this section of these Bylaws may be given by any method reasonably calculated to provide actual notice. Any notice given by mail must be given by first-class or registered mail sent to the last known address of the member shown on the Corporation’s records.
If a membership is terminated for any reason set forth in this Article of the Bylaws, the membership interest held by the member must be purchased by the Corporation, subject to Section 4.12 of these Bylaws, within one year of the date of termination to the extent of the paid-up value of the member’s membership on such date. The Board of Directors, in so settling the member’s membership interest, may set off any and all indebtedness of the member to the Corporation. The paid-up value of the member’s membership interest is the monetary amount of such interest (including fractional memberships) that the member has been issued in accordance with Section 4.08 of these Bylaws.
The Corporation must maintain sufficient funds (in addition to funds necessary to meet liabilities) to be able to purchase a proportion, as prescribed from time to time by the Board of Directors, but not less than 10%, of the total outstanding membership interest at any time.
Meetings of members will be held either by electronic transmission by and to the Corporation, as authorized by Coop Law Section 12460(f), or at a location designated by the board.
A regular meeting of members must be held annually on the first Monday in August at 6:30 p.m. for the purpose of transacting any proper business, including the election of Directors, that may come before the meeting. If the day fixed for the regular meeting falls on a legal holiday, the meeting must be held at the same time and place on the next day.
Special meetings of members for any lawful purpose may be called by the Board of Directors, the President, or by five percent (5%) or more of the members.
Whenever members are required or permitted to take action at a meeting, a written notice of the meeting must be given not less than ten (10) nor more than ninety (90) days before the date of the meeting to each member who is entitled to vote on the record date for notice of the meeting. In the case of a specially called meeting of members, within twenty (20) days after receipt of a written request, the Secretary must cause notice to be given to the members entitled to vote that a meeting will be held at a time fixed by the Board of Directors not less than thirty-five (35) nor more than ninety (90) days after receipt of the request.
Notice may be given either personally, by electronic transmission by the corporation, or by mail or other means of written communication to the address of a member appearing on the books of the Corporation or provided by the member. If no address appears or is given, notice must be given at the principal office of the Corporation.
The record date for determining the members entitled to notice of any meeting of members is twenty (20) days before the date of the meeting.
The notice must state the place, date, and time of the meeting, and the means of electronic transmission by and to the corporation, or electronic video screen communication, if any, by which members may participate in that meeting. The notice of a regular meeting must state any matters that the Board of Directors, at the time of giving notice, intends to present for action by the members. The notice of a special meeting must state the general nature of the business to be transacted. The notice of any meeting at which Directors are to be elected must include the names of all nominees at the time of giving notice.
The transactions of a meeting, whether or not validly called and noticed, are valid if a quorum is present and each of the absent members who is entitled to vote, either before or after the meeting, signs a written waiver of notice, a consent to the holding of the meeting, or an approval of the minutes of the meeting. All waivers, consents, and approvals must be filed with the corporate records or made a part of the minutes of the meeting.
A member’s attendance at a meeting will constitute a waiver of notice of and presence at the meeting, unless the member objects at the beginning of the meeting. However, attendance at a meeting is not a waiver of any right to object to the consideration of matters required to be included in the notice but not included, if an objection is made at the meeting.
The lesser of two hundred fifty (250) members or members representing twenty percent (20%) of the voting power will constitute a quorum at a meeting of members. Any Bylaw amendment to increase the quorum may be adopted only by approval of the members. When a quorum is present, the affirmative vote of the majority of the voting power represented at the meeting and entitled to vote will be the act of the members, unless provided otherwise by these Bylaws or the law. The only matters that may be voted upon at any regular meeting actually attended by less than one-third (1/3) of the voting power are matters notice of the general nature of which was given pursuant to the first sentence of Section 6.04 of these Bylaws.
The members present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough members to leave less than a quorum, if the action taken, other than adjournment, is approved by at least a majority of the members required to constitute a quorum.
In the absence of a quorum, any meeting of members may be adjourned by the vote of a majority of the votes represented in person, but no other business may be transacted except as provided in Section 6.10 of these Bylaws.
The corporation may transact any business at an adjourned meeting that could have been transacted at the original meeting. When a meeting is adjourned to another time or place, no notice is required if the time and place (or the means of electronic transmission by and to the corporation or electronic video screen communication, if any, by which members may participate) are announced at the original meeting. If the adjournment is for more than forty-five (45) days or if a new record date is fixed, a notice of the adjourned meeting must be given to each member of record entitled to vote at the meeting.
(a) Each member of the Corporation is entitled to one (1) vote on each matter submitted to a vote of the members.
(b) If a membership stands of record in the names of two (2) or more persons whether fiduciaries, members of a partnership, joint tenants, tenants in common, husband and wife as community property, tenants by the entirety, persons entitled to vote under an agreement, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same membership, unless the Secretary is given written notice to the contrary and furnished with a copy of the instrument or order appointing them or creating the relationship, the vote of one (1) joint holder will bind all, when only one (1) votes, and the vote of the majority will bind all, when more than one (1) joint holder votes.
(c) The record date for determining the members entitled to vote at a meeting or cast written ballots is twenty (20) days before the date of the meeting or the day on which the first ballot is mailed or solicited.
(d) Cumulative voting will not be permitted for any purpose.
(e) Voting by proxy will not be permitted for any purpose.
A combination of written or electronic ballot and personal voting may be used at any regular or special meeting of members, and may be used for the election of Directors. Prior to the meeting, the Board of Directors may authorize distribution of a written or electronic ballot to every member entitled to vote. The ballots must be distributed in a manner consistent with the provisions of Sections 6.05, 6.17(b), and 6.19 of these Bylaws. When ballots are distributed, the number of members voting at the meeting by written or electronic ballot will be deemed present at the meeting for purposes of determining a quorum but only with respect to the proposed actions referred to in the ballots.
Any written ballot used at a meeting must set forth the proposed action to be taken, provide an opportunity to specify approval or disapproval of the proposed action, and state that unless revoked by the member voting in person, the ballot will be counted if received by the Corporation on or before the time of the meeting.
Any action that may be taken at any regular or special meeting, including election of Directors, may be taken without a meeting through distribution of a written or electronic ballot to every member entitled to vote on the matter. The Secretary must cause a vote to be taken by written or electronic ballot on any action or recommendation proposed in writing by at least twenty percent (20%) of the members.
(a) Any ballot used without a meeting must set forth the proposed action, provide an opportunity to specify approval or disapproval of any proposal, and provide a reasonable time within which to return the ballot to the Corporation.
(b) The form of written or electronic ballot distributed to ten (10) or more members must afford an opportunity to specify a choice between approval and disapproval of each matter or group of related matters intended, at the time of distribution, to be acted on by the ballot. The form must also provide that whenever the person solicited specifies a choice with respect to any matter, the vote will be cast in accordance with that choice.
(c) A written or electronic ballot cannot be revoked. Approval by written or electronic ballot will be valid only when the number of votes cast by ballot within the time period specified equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.
Ballots must be solicited in a manner consistent with Sections 6.05, 6.17(b), and 6.19 of these Bylaws. The solicitations must indicate the number of responses needed to meet the quorum requirement and specify the time by which the ballot must be received to be counted. Ballots other than for the election of Directors must state the percentage of approvals necessary to pass the measure.
In an election of Directors, any form of written or electronic ballot, which names the candidates for Director and which the member has marked “withhold” (or otherwise indicated that the authority to vote in the election of Directors is withheld) will not be used for voting in that election.
In advance of any meeting of members, the Board of Directors may appoint inspectors of election to act at the meeting and any adjournment. If inspectors are not appointed or if any appointed persons fail to appear or refuse to act, the chairperson of the meeting may and, on the request of any member, must, appoint inspectors at the meeting.
The inspectors must determine the number of memberships outstanding and the voting power of each, the number represented at the meeting, and the existence of a quorum. They may receive votes, ballots, and consents, hear and determine all challenges and questions regarding the right to vote, count and tabulate all votes and consents, determine when the polls will close, and determine the result. They may do those acts which are proper to conduct the election or vote with fairness to all members. The inspectors must perform these duties impartially, in good faith, to the best of their ability, and as expeditiously as is practical.
The corporation must have no fewer than three and no more than nine Directors, collectively known as the Board of Directors. The exact number of directors must be fixed, within those limits, by a resolution adopted by the Board of Directors.
The Directors of the Corporation must be members of the Corporation.
(a) The Board of Directors will prescribe reasonable nomination and election procedures for the election of Directors given the nature, size, and operations of the Corporation. The procedures must include: (1) a reasonable means of nominating persons for election as Directors, (2) a reasonable opportunity for a nominee to communicate the nominee’s qualifications and the reasons for the nominee’s candidacy to the members, (3) a reasonable opportunity for all nominees to solicit votes, (4) a reasonable opportunity for all the members to choose among the nominees.
(b) When the Corporation distributes any material soliciting a vote for any nominee for Director in any publication owned or controlled by the Corporation, it must make available to each other nominee, in the same material, an equal amount or space with equal prominence to be used by the nominee for a purpose reasonably related to the election. The Corporation must mail within ten (10) business days to all members any material related to the election which a nominee for Director has furnished, upon written request and payment of mailing costs by the nominee, or allow the nominee to obtain the names, addresses, and voting rights of members within five (5) business days after the request.
The Directors may be elected at the annual meetings or by written or electronic ballot in accordance with Sections 6.16–6.19 of these Bylaws. The candidates receiving the highest number of votes up to the number of Directors to be elected will be elected.
The terms of office for Directors will be 1 year. Each Director may hold office until the expiration of the term for which elected and until the election and qualification of a successor. Any reduction of the authorized number of Directors must not result in any Director’s being removed before his or her term of office expires.
The Directors will serve without compensation except that they may be paid in advance or reimbursed by the Corporation for their actual and reasonable expenses incurred in the performance of their duties as Directors of the Corporation. Officers of the Corporation may also be paid in advance or reimbursed for such expenses.
Meetings of the Board of Directors may be called by the President, any Vice-President, the Secretary, or any two Directors.
Meetings of the Board of Directors may be held at any place designated in the notice of the meeting, or, if not stated in a notice, by resolution of the Board.
Directors may participate at meetings of the Board through the use of conference telephone, electronic video screen communication, or electronic transmission by and to the corporation. Participation by communications equipment constitutes presence at the meeting as long as the requirements listed in Coop Law Section 12351(a)(6) have been met.
Regular meetings of the Board of Directors must be held, without call or notice, immediately following the annual meeting of members, as set forth in Section 6.02 of these Bylaws.
Special meetings may be held upon four (4) days’ notice by first-class mail or forty-eight (48) hours notice delivered personally or by telephone, including a voice messaging system, or by electronic transmission by the corporation. Notice of regular or special meetings need not be given to any Director who signs a waiver of notice, a written consent to holding the meeting, or an approval of the minutes (either before or after the meeting), or who attends the meeting without protesting prior thereto or at its commencement, the lack of notice to that Director. All waivers, consents, and approvals must be filed with the corporate records or made a part of the minutes of the meetings.
A majority of the authorized number of Directors constitutes a quorum for the transaction of business.
Unless provided otherwise in the Articles of Incorporation, these Bylaws, or by law, every act or decision done or made by a majority of the Directors present at a duly held meeting at which a quorum is present is the act of the Board. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of Directors, if any action taken is approved by at least a majority of the required quorum for the meeting or a greater number required by the Articles, these Bylaws, or by law.
A majority of the Directors present, whether or not a quorum is present, may adjourn to another time and place. If the meeting is adjourned for more than twenty-four (24) hours, notice of the adjournment must be given prior to the time of the adjourned meeting to the Directors who were not present at the time of adjournment.
Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, if all Directors individually or collectively consent in writing to the action. The consents must be filed with the minutes of the proceedings of the Board. Action by written consent has the same force and effect as a unanimous vote of the Directors.
(a) The Board of Directors may create one or more committees to serve at its pleasure by resolution adopted by a majority of the number of Directors then in office when a quorum is present. The members of each committee must be appointed by a majority vote of the Directors then in office.
(b) Any executive committee, to the extent provided in the resolution of the Board, will have all the authority of the Board, except with respect to the following actions:
The approval of any action for which the approval of the members or a majority of all members is required by law;
The filling of vacancies on the Board or in any committee that has the authority of the Board;
The fixing of compensation of the Directors for serving on the Board or on any committee;
The amendment or repeal of Bylaws or the adoption of new Bylaws;
The amendment or repeal of any resolution of the Board which by its express terms are not amendable or repealable:
The appointment of committees of the Board or the members of such committees:
The expenditure of corporate funds to support a nominee for Director after there are more people nominated for Director than can be elected.
Any Director may resign effective upon written notice to the President, the Secretary, or the Board of Directors, unless the notice specifies a later time for the effectiveness of the resignation. If a resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.
Any or all Directors may be removed without cause by the members. If the Corporation has fewer than fifty (50) members, the removal must be approved by an affirmative vote or written ballot of a majority of all the votes entitled to be cast. If the Corporation has fifty (50) or more members, the removal must be approved or ratified by the affirmative vote of a majority of all the votes represented and voting at a duly held meeting at which a quorum is present, or by written ballot, or by the affirmative vote or written ballot of any greater proportion of the votes as required in these Bylaws or by law.
Vacancies on the Board of Directors will exist on the death, resignation, termination of membership, or removal of a Director; whenever the authorized number of Directors is increased; whenever the Board declares an office vacant pursuant to Section 7.20 of these Bylaws; and on the failure of the members to elect the full number of Directors authorized.
The Board of Directors may declare vacant the office of any Director whose eligibility for election has ceased, who has been declared of unsound mind by a final order of court, who is convicted of a felony, or who has not attended three or more consecutive regular or special meetings of the Board.
Except for vacancies created by removal of a Director pursuant to Section 7.18 of these Bylaws, vacancies may be filled by a majority of the Directors then in office, whether or not less than a quorum, or by a sole remaining Director. Vacancies created by the removal of a Director may be filled only by approval of the members (as defined by Coop Law Section 12224). The members may elect a Director at any time to fill any vacancy not filled by the Directors.
The officers of the Corporation must be a President, Secretary, Chief Financial Officer, and any other officers with such titles and duties as determined by the Board of Directors and as may be necessary to enable it to sign instruments. The President is the Chief Executive Officer of the Corporation. The same person may hold any number of offices. The President must be chosen from among the Directors elected by the membership of the Corporation.
The officers will be chosen by the Board of Directors and serve at the pleasure of the Board, subject to the rights, if any, of an officer under any contract of employment. Any officer may resign at any time on written notice to the Corporation without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.
The Corporation must keep adequate and correct books and records of account and minutes of the proceedings of its members, Board of Directors, and committees of the Board. It must also keep a record of the members, including the names, addresses, email addresses, and number of memberships held by each. The minutes and other books and records must be kept either in written form or in any other form capable of being converted into written form.
(a) For fiscal years in which the Corporation has, at any time, more than twenty-five (25) members, the Corporation must notify each member yearly of the member’s right to receive an annual financial report. The Board of Directors must promptly cause the most recent annual report to be sent to a member on written request. The annual report must be prepared no later than one hundred twenty (120) days after the close of the Corporation’s fiscal year.
(b) The annual report must contain in appropriate detail all of the following: (1) a balance sheet as of the end of the fiscal year, an income statement, and a statement of cashflows for the fiscal year; (2) a statement of the place where the names and addresses of the current members are located; and (3) the statement required by Section 9.03 of these Bylaws.
(c) The annual report must be accompanied by any pertinent report by independent accountants, or, if there is no such report, by the certificate of an authorized officer of the Corporation that the statements were prepared without audit from the books and records of the Corporation.
In addition to the annual report described in Section 9.02 of these Bylaws, the Corporation must furnish annually (pursuant to Coop Law Section 12592) to its members and Directors a statement of the transactions and indemnifications to interested persons. If the Corporation does not issue an annual report pursuant to Section 9.02 of these Bylaws, such statement must be mailed or delivered to members within one hundred twenty (120) days after the close of the fiscal year.
The corporation must keep at its principal office in California the original or a copy of its Articles of Incorporation and Bylaws as amended to date, which must be open to inspection by the members at all reasonable times during office hours. If the Corporation has no office in California, it must furnish on the written request of any member a copy of the Articles or Bylaws as amended to date.
The accounting books and records and minutes of proceedings of the members, the Board of Directors, and committees of the Board must be open to inspection on the written demand of any member at any reasonable time, for a purpose reasonably related to that person’s interests as a member.
Every Director has the absolute right at any reasonable time to inspect and copy all books, records, and documents of every kind, and to inspect the physical properties of the Corporation.
(a) Subject to the Corporation’s right to set aside a member’s demand for inspection pursuant to Coop Law Section 12601 and the power of the court to limit inspection rights pursuant to Coop Law Section 12602, and unless the Corporation provides a reasonable alternative pursuant to Section 10.03(c) of these Bylaws, a member may do either or both of the following:
Inspect and copy the record of all the members’ names, addresses, and voting rights, at reasonable times, on making a written demand five (5) business days in advance which states the purpose for which the inspection rights are requested;
Obtain from the Secretary, upon written demand and tender of a reasonable charge, a list of names, addresses, and voting rights of those members entitled to vote for the election of Directors, as of the most recent record date for which it has been compiled, or as of a date specified by the member subsequent to the date of demand. The demand must state the purpose for which the list is requested. The membership list must be made available on or before the later of ten (10) business days after the demand is received or after the date specified as the date as of which the list is to be compiled.
(b) The rights set forth in Subsection (a) of this Bylaw section may be exercised by any member or members possessing five percent (5%) or more of the voting power for a purpose reasonably related to the members’ interest as members. The Corporation may deny access to the membership list where it reasonably believes that the information therein will be used for another purpose or where the Corporation provides a reasonable alternative pursuant to Section 10.03(c) of these Bylaws.
(c) The Corporation may within ten (10) days after receiving a demand, deliver a written offer of an alternative method of achieving the purpose identified in the demand without providing access to or a copy of the membership list. An alternative method that reasonably and in a timely manner accomplishes the proper purpose set forth in a demand made pursuant to Section 10.03(a) of these Bylaws will be a reasonable alternative, unless the Corporation fails to do the things that it offered to do within a reasonable time after acceptance of the offer. Any rejection of the offer must be in writing and indicate the reasons the proposed alternative does not meet the proper purpose of the demand.
The fiscal year of the Corporation will end at the close of the business day on the last day of the month of June of each year.
(a) “Surplus” is defined as the excess of revenues and gains over expenses and losses for a fiscal year. Such surplus will be determined in accordance with generally accepted accounting principles and must be computed without regard to any patronage refunds, capital allocations, dividends, or income taxes.
(b) “Patronage” is defined as payment of charges for services provided by the Corporation.
(a) Before any patronage refunds are distributed for each fiscal year, any surplus should first be allocated to any deficit in the accounting of “retained earnings” of the Corporation.
(b) The Directors may then uniformly distribute all the remaining surplus attributed to patronage of the members of the Corporation to such members as described in the following paragraphs of this subsection of these Bylaws. For the purposes of this subsection of the Bylaws, the remaining patronage surplus must be computed consistent with Subchapter T of the Internal Revenue Code, related Treasury Regulations, and related court and other relevant interpretations.
Any remaining patronage surplus attributed to the members and to be distributed to them must be the total remaining patronage surplus attributed to both member and nonmember business (reduced by allocations to eliminate a deficit in retained earnings) multiplied by the ratio of member patronage to total patronage.
A member is entitled to a patronage refund, if such is distributed, in the amount of the remaining patronage surplus, as determined by Paragraph (1) of this subsection of these Bylaws, multiplied by the ratio of such member’s patronage with the Corporation to the patronage of all members with the Corporation.
(c) If a member owns three hundred dollars ($300.00) or more in memberships as of the end of the fiscal year for which patronage refunds are to be paid or allocated, such member must receive all of her or his patronage refunds in cash. The three hundred dollar ($300.00) amount will be known as a member’s “Fair Share.”
(d) Each person who becomes a member of this Corporation consents to include in his or her gross income for federal income tax purposes the amount of any patronage refund paid to him or her by this Corporation in money or by written notice of allocation (as defined in the Internal Revenue Code), except to the extent that such a patronage refund is not income to the member because (i) it is attributable to the purchase of personal, living, or family items, or (ii) it should properly be treated as an adjustment to the tax basis of property previously purchased. The term “patronage refund,” as used herein, will have the same meaning as the term “patronage dividend,” as used in the Internal Revenue Code.
(e) For the purpose of allocating and distributing any annual surplus, the entire operations of the Corporation must be considered as a unit; provided that by resolution of the Board of Directors, the Corporation may distribute patronage refunds on the basis of the business transacted by each of the departments or divisions into which the operations of the Corporation may be divided by the Board for the purpose of such allocation.
The Bylaws may be adopted, amended, or repealed by the Board of Directors unless the action would:
(a) materially and adversely affect the rights or obligations of members as to voting, dissolution, redemption transfer, distributions, patronage distributions, patronage, property rights, or rights to repayment of contributed capital;
(b) increase or decrease the number of members or memberships authorized in total or for any class;
(c) effect an exchange, reclassification, or cancellation of all or part of the memberships;
(d) authorize a new class of memberships;
(e) change the number of Directors or establish a variable number of Directors;
(f) extend the term of a Director beyond that for which the Director was elected or increase the terms of the Directors;
(g) allow all or any portion of the Directors to hold office by virtue of designation or selection rather than by election by the members: and
(h) allow the Board to fill vacancies occurring in the Board by reason of the removal of Directors.
Where the Board of Directors is denied the right to adopt, amend, or repeal these Bylaws pursuant to Section 12.01 of these Bylaws, these Bylaws may be adopted, amended, or repealed by approval of the members.
(a) To the fullest extent permitted by law, the Corporation will indemnify its directors, officers, employees, and other persons described in Coop Law Section 12377(a), including persons formerly occupying any such positions, against all expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred by them in connection with any “proceeding,” as that term is used in that section, and including an action by or in the right of the Corporation, by reason of the fact that the person is or was a person described in that section. “Expenses,” as used in this bylaw, will have the same meaning as in that section of the Coop Law.
(b) On written request to the Board of Directors by any person seeking indemnification under Coop Law Section 12377(b) or Section 12377(c), the Board must promptly decide, per the procedure in Coop Law Section 12377(e), whether the applicable standard of conduct set forth in the corresponding section has been met and, if so, the Board will authorize indemnification.
(c) If the Board of Directors cannot authorize indemnification, because the number of directors who are parties to the proceeding with respect to which indemnification is sought prevents the formation of a quorum of directors who are not parties to that proceeding, the Board must promptly call a meeting of members. At that meeting, the members must determine under Coop Law Section 12377(e) whether the applicable standard of conduct has been met and, if so, the members present at the meeting will authorize indemnification.
CERTIFICATE OF SECRETARY OF IO COOPERATIVE, INC.
I hereby certify that I am the duly elected and acting Secretary of this Corporation and that the foregoing Bylaws constitute the Bylaws of this Corporation, as duly adopted by the Board of Directors on February 13, 2013.
Dated: February 13, 2013.
[signature]
_____________________________
[typed name], Secretary