Bylaws

Fredericksburg Food Cooperative, Inc.

Article I: Organization, Ownership and Purpose

1.1 Organization. Fredericksburg Food Cooperative, Inc. has been organized as a cooperative stock corporation (the “Cooperative”) under the laws of the Commonwealth of Virginia.

1.2 Ownership and Purpose. The Cooperative shall be owned by its members and shall operate on the cooperative plan for their mutual benefit,, and is formed for the purpose of conducting a full service grocery store and other purposes that are lawful under Article 1, Chapter 3, Title 13.1, of the Code of Virginia (Cooperative Associations). Without limiting the generality of the foregoing, the Cooperative’s purposes include:

(1) To establish and operate a member owned, full-service grocery store for the benefit of its members and patrons in and around Fredericksburg, Virginia, and the surrounding communities;

(2) To offer members and patrons access to a wide range of natural, organic, and plantbased products, with a special emphasis on locally-grown and sourced foods;

(3) To provide information and education about health and sound nutrition, including the value of consuming primarily plant-based foods;

(4) To support the local agricultural and food system by offering a reliable, year-round wholesale buyer for locally-produced goods;

(5) To cooperate with local civic and charitable organizations to address the needs of at risk and low income populations;

(6) To implement the most sustainable practices in every aspect of our operations, and to partner with others to encourage and support positive environmental principles;

(7) To be more than just another place to shop, but also include and welcome people of all backgrounds to gather and share ideas for the betterment of our community;

(8) To inform our members and prospective members about the principles, practices, and benefits of cooperative enterprises; and

(9) To undertake any other activities consistent with the above purposes and permitted by the Code.

Article II: Membership

2.1 Eligibility. Membership in the Cooperative shall be open to any household of one or more people residing together, and any entity including but not limited to businesses, non-profits, and governmental agencies who are in accord with its purposes, and willing to accept the responsibilities of membership.

2.2 Nondiscrimination. Membership shall be open without regard to any characteristic that does not directly pertain to a person’s eligibility.

2.3 Admission. Any eligible person may be admitted to membership upon submitting an application and investing equity in an amount and on such terms as determined by the Board of Directors (henceforth “the Board”). Households and entities shall name an individual or individuals as authorized representatives of the member according to policies adopted by the Board.

2.4 General Rights. Members have the right to elect the Cooperative’s Board, to attend meetings of the Board, except those that are closed for confidentiality reasons, to receive notice of and attend membership meetings, to petition as described in these bylaws, and to approve amendments to these bylaws. Each member shall have one vote and no more on all matters submitted to members. The rights of members shall be understood to apply only to active members in good standing. All rights and responsibilities of members are subject to the bylaws as they may be amended from time to time, and to policies and decisions of the Cooperative or the Board.

2.5 Member Preferences. Members shall have the right to express their preferences regarding product selection. This shall include, but not be limited to whether the Cooperative will offer non-vegetarian products for sale. The Board and management shall establish processes, including member committees or conducting surveys to determine the product selection preferences of the membership prior to opening a store and periodically thereafter.

2.6 Responsibilities. Members shall keep the Cooperative informed of any changes in name or current address, and shall abide by these bylaws and the policies and decisions of the Cooperative or the Board. A member who upholds these responsibilities is considered an active member in good standing.

2.7 Termination of Membership. A member may terminate his or her membership voluntarily at any time by written notice to the Cooperative. Membership may be terminated involuntarily by the Board for cause after the member is provided fair notice of the reasons for proposed termination and has an opportunity to respond in person or in writing. Cause may include intentional or repeated violation of any provision of the Cooperative’s bylaws or policies, actions that will impede the Cooperative from accomplishing its purposes, actions or threats that adversely affect the interests of the Cooperative or its members, willful obstruction of any lawful purpose or activity of the Cooperative, or breach of any contract with the Cooperative.

2.8 Return of Equity. Equity shall be returned upon termination of membership in the Cooperative, under terms determined by the Board, provided that the Board has determined that the equity is no longer necessary. 2.8 Unclaimed Property. If a member does not have a current address on file with the Cooperative for a period of 3 consecutive years, and the Cooperative publishes conspicuous notice as required by § 13.1-322 of the Va. Code, and the member or his or her heirs do not claim member equity within 180 days of publication, such member’s equity and patronage refunds and other rights shall be transferred by forfeiture to the Cooperative.

2.9 Non transferability: Membership rights and member equity may not be transferred in any manner. Article III: Member Meetings

3.1 Annual Meeting. A membership meeting shall be held each year at a time and place to be determined by the Board. The purpose of such meetings shall be to hear reports on operations and finances, to review issues that vitally affect the Cooperative, and to transact such other business as may properly come before the meeting.

3.2 Special Meetings. Special meetings of the membership may be called by the Board, either by decision of the Board or in response to a written petition of 10% of the active members. Notice of special meetings shall be issued to members. In the case of a petition, notice of the special meeting will be issued within ten (10) days after a presentation of the petition to the Board. No business shall be conducted at that special meeting except that specified in the notice of meeting.

3.3 Notice of meetings. Notice of the date, time, place and purpose of each meeting of the membership shall be communicated to members. In the case of meetings where business will be conducted notice shall be given to the members not less than four (4) weeks prior to the date of the meeting.

3.4 Voting. Voting shall be accomplished through methods and means established by the Board. Notice of the opportunity to vote shall be communicated to members not less than four (4) weeks prior to the election. Unless otherwise stated in the articles of incorporation, or these bylaws, or required by law, all matters shall be decided by a vote of a majority of the members voting thereon. Proxy voting is not allowed.

3.5 Quorum. At any meeting of the members, or for any vote of the members, a quorum necessary for decision making shall be 10% of the total number of members.

ARTICLE IV: Board of Directors

4.1 Powers and Duties. The Board shall be composed of not less five (5) nor more than nine (9) Directors (the exact number to be determined by the Board), elected from among members of the Cooperative. Except for matters for which member voting is required, the Board shall have full power to govern the Cooperative, including but not limited to, hiring management and evaluating its performance, and assuring that the mission of the Cooperative is carried out.

4.2 Eligibility, Terms, and Elections. Only members of the Cooperative or representatives of entities that are members shall be eligible to serve on the Board of Directors. Elections shall occur annually, in a manner prescribed by the Board. Directors shall serve a term of three (3) years and shall serve staggered terms so that approximately one-third (1/3) of the Board is elected each year. No Director may serve more than three (3) consecutive terms.

4.3 Vacancies. Any vacancy among Directors elected by the members may be filled by appointment by the Board. A Director so appointed shall complete the pertinent term.

4.4 Removal. A Director may be removed by decision of 2/3 of the remaining Directors for conduct contrary to the Cooperative or failure to follow Board policies.

4.5 Meetings. The Board shall hold regular and special meetings at such time and place as it shall determine, and all Directors shall be notified of said meeting by reasonable advance notice. Meetings shall be open to all members unless the Board decides to go into executive session regarding confidential or proprietary matters such as: labor relations or personnel issues; negotiation of a contract; discussion of strategic goals or business plans, the disclosure of which would adversely impact the Cooperative’s position in the marketplace; and/or discussion of a matter that may, by law or contract, be considered confidential.

4.6 Action without a Meeting. Any action required or permitted to be taken at a meeting of the Board may be taken by written action affirmed by all of the Directors. The action is effective when affirmed by all of the Directors, unless a different effective time is provided in the action.

4.7 Quorum. A majority of the current Directors shall constitute a quorum and no decisions will be made without a quorum.

4.8 Conflicts of Interest. Directors shall be under an obligation to disclose their actual or potential conflicts of interest in any matter under consideration by the board. Directors having such a conflict shall absent themselves from discussion and decision of the matter unless otherwise determined by the Board. Directors may not do business with the Cooperative except in the same manner as other member-owners generally do business with the Cooperative or under other conditions that are procedurally defined to avoid preferential treatment. No employee of the Cooperative may serve on the Board.

ARTICLE V: Officers

5.1 General. The officers of the Cooperative shall consist of Chair, Vice Chair, Secretary, and Treasurer, each of whom must be a director, and such other officers as the Board may appoint. All officers shall be appointed by the Board of Directors and shall serve at the pleasure of the Board of Directors

5.2 Resignation and Removal. An officer may resign from office at any time by delivering written notice to the Board of Directors. A resignation shall be effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the Cooperative accepts the future effective date, it may fill the pending vacancy before the effective date if the officer’s successor does not take office until the effective date. The Board of Directors may remove any officer at any time with or without cause.

5.3 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise shall be filled by the Board.

5.4 Chair. The Chair shall preside at all meetings of the Members and the Board of Directors, discharge all the duties that devolve upon a presiding officer, and perform such other duties as these Bylaws or the Board of Directors may prescribe. A Director may not serve as chair for more than one consecutive 12 month term.

5.5 Vice Chair. The Vice Chair shall perform all duties incumbent upon the Chair during the absence or disability of the Chair, and shall perform such other duties as these Bylaws or the Board of Directors may prescribe.

5.6 Secretary. The Secretary shall oversee preparation and maintenance of custody of minutes of the Board of Directors’ and Members’ meetings and authenticate records of the Cooperative. The Secretary shall keep or cause to be kept in a book provided for the purpose a true and complete record of the proceedings of all meetings. The Secretary shall attend to the giving of all notices and shall perform such other duties as these Bylaws or the Board of Directors may prescribe.

5.7 Treasurer. The Treasurer shall oversee the custody of all the funds and securities of the Cooperative, and shall deposit or cause others to deposit the same in the name of the Cooperative in such banks or credit unions as the Directors may select. The Treasurer shall perform such other duties as these Bylaws or the Board of Directors may prescribe.

5.8 Transfer of Authority. In case of the absence of any officer of the Cooperative or for any other reason that the Board of Directors may deem sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer or to any director or employee of the Cooperative.

ARTICLE VI: Patronage Dividends

6.1 Allocations to Members. The Cooperative shall allocate and distribute to members the net profit from business done with them in such a manner as to qualify them as patronage dividends consistent with cooperative principles, applicable state and federal laws and generally accepted accounting principles. The Board shall determine when and how such allocations and distributions will be made, including the amount if any distributed in cash and the form of any amount distributed as equity, whether the allocations will be made in one or more divisions, departments or allocation units, and whether all or part of the excess margins shall be set-aside in capital or other necessary reserves. Net margins from business done with persons that are not member – owners (or eligible patrons) may be allocated to member – owners and eligible patrons or set-aside in an unallocated surplus or retained earnings (if the allocation is made prior to the beginning of the fiscal year).

6.2 Consent of Members. By obtaining or retaining membership in the Cooperative, each member consents to take into account, in the manner and to the extent required by federal and state tax law, any patronage dividend received from the Cooperative.

6.3 Reserves. Amounts carried in reserves shall be allocated on the books of the Cooperative on a patronage basis or in lieu thereof the books and records of the Cooperative shall afford a means of doing so at any time so that in the event of distribution each member-owner and eligible patron may receive a pro rata share of such distribution. Amounts carried in reserves or unallocated surplus and not allocated to the member-owners and patrons may be so allocated by the Board at any time.

6.4 Extraordinary Gains. Margins produced by a transaction (such as income from the lease of premises, investment in securities, or from the sale or exchange of capital assets) which is directly related to the Cooperative’s business will be deemed to be patronage sourced margins and may be distributed to member – owners in proportion, insofar as is practicable, to their patronage during any period to which such margins are attributable, as determined by the Board.

6.5 Allocation of Losses.

a. Operating Losses. An operating loss will be apportioned among the member – owners and eligible patrons during the year of loss so that the loss will, to the extent practicable, be borne by those member – owners and patrons with respect to the loss year on an equitable basis, including charging the loss against allocated reserves, unallocated surplus, or the patronage equity. Member – owners and patrons may not be directly assessed for any loss. The Board may also direct that all or part of any loss be carried forward or back so long as any carry-forward or carryback will not place an inequitable burden upon past or future members.

b. Other Losses. If, in any fiscal year, the Cooperative incurs a loss other than an operating loss, the Board may determine the basis on which patronage capital furnished by the member – owners and eligible patrons may be reduced or such loss is to be otherwise equitably apportioned among the member – owners and eligible patrons.

ARTICLE VII: Dissolution

7.1 Asset Distribution: The Cooperative may be dissolved upon a decision of the Board and a two thirds (2/3) vote of the members who participate in the vote. Upon dissolution of the Cooperative, its assets shall be distributed in the following manner and order: (i) by paying or making provision for payment of all liabilities and expenses of liquidation; (ii) by redeeming all outstanding preferred stock and any unpaid cumulated dividends; (iii) by redeeming outstanding Common Stock at the par value of $200 per share plus any declared and unpaid dividends, (iv) by redeeming any equity accounts which, if they cannot be paid in full, shall be paid in the order of the oldest outstanding amounts; (v) by distributing any remaining assets in a way that furthers the Cooperative’s mission and which is consistent with applicable law, as determined by the Board.

ARTICLE VIII: By-laws

8.1 Amendments. These bylaws may be amended or repealed in whole or in part by a majority of the members who participate in the vote. An amendment may be proposed by decision of the Board or by petition of at least ten percent (10%) of active members. The proposed amendment shall be publicized to the membership not less than four (4) weeks prior to the voting process, which shall be held at a time and in a manner determined by the Board.