Co-op Bylaws. Revised 10/15/2010 BY-LAWS OF PREAMBLE

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1 Co-op Bylaws BY-LAWS OF NATURAL ABUNDANCE FOOD COOPERATIVE PREAMBLE BYLAWS 1 The Natural Abundance Food Cooperative is created to promote community involvement in the production, procurement and distribution of natural and organic food. By joining together, we realize that a cooperative enterprise can develop community advancement that is not possible through individual effort. ARTICLE I: MEMBERS A. Eligibility for membership: Any individual, family, or cooperative association which supports the principles, policies, and purposes of the cooperative may become members of the cooperative by: 1. Submitting an application for review and approval to the Board of Directors. 2. Becoming the owner of one share of Class A Common Stock. 3. Agreeing to comply with the requirements of the bylaws, store policies, contracts, and agreements. B. Termination: At any time if a member shall fail to comply with the requirements of these bylaws, the cooperative may elect to cancel the membership. The member shall be given a right to be heard at least five (5) days before the hearing. A two-thirds vote of the members present at the hearing, and only upon a determination, entered into the minutes of the meeting, that continuation of the membership in question would be detrimental to the best interest of the cooperative, terminates the membership. Such termination shall be effective upon the mailing of a written notice thereof within thirty (30) days to the member whose membership is so terminated. C. Resignation: Any member may resign from the membership in the cooperative at any time by written resignation delivered or mailed to the Board of Directors. Any such resignation shall be effective upon receipt thereof. D. Payments to Former Members: When a membership has ended in accordance with paragraphs B or C above, the Board of Directors shall tender to the former member the par value of the member's Class A stock, or the book value thereof if it is less than the par value, and any patronage refund due, less any indebtedness due the cooperative. Payments due the former member shall be tendered within sixty (60) days of the effective date of the termination or

2 BYLAW 2 resignation. However, if the total amount to be paid by the cooperative exceeds the par value, or if less than the par value, the book value of two (2) shares of Class A stock, the Board of Directors may elect to pay the amount due in equal monthly installments of not less than the par value of two (2) shares of Class A stock, or the book value of two (2) shares, whichever is less. E. Restrictions: Each member agrees that in case such member shall desire to dispose of their stock in the cooperative, the cooperative shall be given the first opportunity and privilege of purchasing it at par value. If the cooperative waives it right to purchase by failing to act within sixty (60) days, a member may then sell the stock to anyone eligible for membership. F. Voting: Each member shall have one vote. Regardless of the number shares owned, cast by voice, ballot, or other reasonable means as members may determine. No member shall be allowed to vote by proxy. G. Powers of members: A two-thirds majority at any regular or special membership meeting at which a quorum (see Article II, D) is present may veto and/or amend Board decisions and may be a two -thirds majority exert its own initiative in policy decisions, provided that in a special membership meeting, only such matters as were announced in the call may be subject to such action by the membership. ARTICLE II: MEETINGS A. Regular Meetings: Meetings will be held for the purpose of transacting any business properly coming before the members, dates and times to be determined by the Board of Directors. One meeting shall take place up to and including the eighth month following the close of the fiscal year for the purpose of election of the Board of Directors, for annual reports, and other business. B. Special Meetings: Special membership meetings may be called at any time for any purpose by: (1) a 50% plus 1 majority of the Board of Directors, or (2) a petition signed by a quorum (see Article II, D) of members and submitted to the Secretary of the cooperative. The notice of the special meeting shall be issued within ten (10) days from and after the presentation of the petition, and such special meeting shall be held within thirty (30) days from and after the date of presenting the petition. No business shall be considered at such meeting except as may be mentioned in the call and included in the notice of the meeting. The BYLAWS 3 notice of these special meetings must be given as hereinafter described in these bylaws. C. Notice of Meetings: Notice of all regular and special meetings shall be published in the Aberdeen American News or other such periodical not less than five (5) days before the meeting. The Secretary or

3 other such person or persons entitled to call such meetings or give notice of such meetings shall be responsible for submitting the meeting notice. Each notice of meeting shall state the time and place of the meeting and the purpose or purposes thereof. The failure of any member to receive any such notice of meetings shall not invalidate any action which may be taken by the members at any meeting. D. Quorum: At any meeting of the members, 10% of the total voting membership shall constitute a quorum for the purposes of transacting normal business affairs. In determining a quorum at any meeting on a question submitted to vote by absentee ballots, members present as well as those represented by absentee ballot shall be counted. E. Regular Director's Meetings: Regular meetings of the Board of Directors may be held at such intervals and at such places as may be determined by resolution of a 50% plus 1 majority of the entire Board of Directors or agreed upon in writing by all of the Directors. No notice of any such regular meeting need be given. F. Special Director's Meetings: Special meetings of the Board of Directors may be called by the President or by a 50% plus one (1) majority of said Board. Each member of the Board of Directors shall be duly notified of all such meetings. G. Action without Meetings: Any action by the Directors or the members without a meeting, which is taken or authorized in writing signed by all of the Directors, or by all of the Class A Members of the corporation, as the case may be, shall be valid and effective. H. Quorum: Unless otherwise specifically provided in these bylaws a 50% plus one (1) majority of the members of the Board of Directors shall constitute a quorum for the transaction of business. I. Executive Sessions: All Board meetings will be open to all members but subject to closed-executive sessions called by a 50% one (1) majority of the Directors present. BYLAWS 4 ARTICLE III: DIRECTORS A. Number of Directors. Qualifications. and Terms of Office: The Board shall consist of nine (9) individuals and may be increased or decreased by the membership if needed. Directors shall be elected by ballot at the annual election meeting for term of three (3) years. Directors can serve no more then two (2) terms without a one (1) year break, and shall hold office not more than six (6) successive years or until their successors shall be elected and qualified. Only one-third of the Board of Directors shall be elected every year to provide for overlapping terms. Directors are limited to no more that two separate household family members to serve on the board at the same time. Also no person can serve as a Director if they have a family member on staff at the cooperative. Family is defined as spouse, parents, children, brother, sister, brother and sister in law, father and mother in law, stepparents, stepsiblings,

4 stepchildren. This policy also applies to individuals who are not legally related, but who reside with another member or a person that you are dating. B. Vacancies: Any vacancy in the Board of Directors, except as may be caused by removal by the members, shall be filled for the duration of the term vacated by a vote of the remainder of the Board of Directors. This appointment shall be submitted to the membership at the next annual election meeting for approval. C. Resignation: Any Director may at any time resign, effective immediately or at a specified later date, either by written resignation delivered to the Secretary of the cooperative or by oral resignation stated at any meeting of the Board of Directors and recorded in the minutes of that meeting. D. Removal: Any Director of the cooperative may, for cause, at any regular or special meeting called for the purpose, at which a quorum of the members shall be present, be removed from office by a vote of 50% plus one (1) majority of the members present. Failure of a Director to attend three (3) consecutive Director's meetings, or 50% of the Director's meetings during any six (6) month period, except for cause, shall automatically vacate the office of said Director, and the remaining Directors shall thereupon fill said office as provided in Section B hereof. A Director may be removed at a regular meeting for failure to attend the required number of Board meetings without notice. The removal of a Director shall not be considered at a special meeting unless the fact has been stated in the notice of such meeting. No Director shall be removed from office at a special meeting unless he/she shall be informed of the meeting at which the matter is to be considered. Such written notice shall be delivered or mailed to the Director at least five (5) days before the meeting. He/she shall be entitled to be heard at such meeting. In case of such removal, the members shall fill the vacancy for BYLAWS 5 the unexpired term of such Director, and such election may be held at the same meeting at which the Director was removed from office. E. Voting: Each Director shall have one vote, cast by voice, ballot, or other reasonable means as the Directors may determine. All business acted upon by the Board of Directors shall be passed by a simple majority of Directors present. F. Duties and Powers: 1. Management: The Board of Directors shall manage the business, property, and affairs of the cooperative and make all necessary rules and regulations not inconsistent with law or with these bylaws, for the management of the business and guidance of the officers, employees, and agents of the cooperative, and shall have power to employ and dismiss employees of the cooperative, and to determine their duties and fix their wages.

5 2. Declaration of Patronage Refund: The Board of Directors shall have the authority to declare the patronage refund and the manner and time of payment, which declaration shall be at least once annually, and within six monthsafter the close of the fiscal year. 3. Loan Signature Authority: The Board President and the manager of the cooperative have the authority to sign loan papers at a bank for borrowing money as approved by the board. ARTICLE IV: OFFICERS A. Election of Officers and Organization Meeting: The Board of Directors shall meet within thirty (30) days after the first election and after each annual election, and shall elect by ballot or other appropriate methods by and from their number a president, a secretary, a treasurer, and any other officers as the Directors may from time to time determine. B. Duties and Powers: The respective officers of the cooperative shall have such powers and duties as generally pertain to their offices or as the Board of Directors shall from time to time prescribe. C. Removal and Resignation: Any officer of the cooperative may be removed by procedures as set forth in these bylaws (Article III, D) as well as by a vote of the Board of Directors. Any officer may resign at any time from office by written or oral notice subject to approval by a 50% plus one (1) majority of the Board of BYLAWS 6 Directors. Any officer so resigning may continue to serve on the Board of Directors. D. Vacancies: In case of any vacancy in any office, a successor to fill the unexpired portion of the annual term may be elected by procedures as set forth in these bylaws (see Article III, B). ARTICLE V: OFFICE AND COOPERATIVE RECORDS A. Office: The office of the cooperative shall be located.at such places as the Board of Directors may from time to time designate. B. Cooperative Records: There shall be kept by the Secretary of the Cooperative correct records of account of the activities and transactions of the Cooperative, the articles of incorporation, a copy of the bylaws, and all minutes of meetings of the members and of the Board of Directors.. Records of the cooperative shall be available for inspection at the office of the cooperative by members at reasonable times upon reasonable notice.

6 ARTICLE VI: CAPITAL STOCK A. Certificates of Stock: Certificates of common stock shall be issued when such stock is fully paid for. Each certificate shall state: 1. The par value of such stock. 2. The number of shares represented. 3. The name of the person. firm or corporation to whom issued. and shall bear: 1. The signature of the president and secretary. 2. The seal of the cooperative. And shall be numbered and issued in numerical order from a stock certificate book. A record of each certificate shall be kept on the stub thereof or in a separate ledger. If the Articles of Incorporation provide for the issuance of stock other than common stock, such certificates shall state the class with its relative rights, preferences, and/or restrictions granted to or imposed upon the shares of each class. Each certificate shall have printed upon it words to the effect: 1. That it shall be transferable, in person or attorney, upon surrender of the certificate, with the consent and approval of the Board of Directors. BYLAWS 7 2. That such transfer shall not be effective until made on the books and record of this cooperative. 3. That the cooperative retains the right to purchase or recall such certificates. 4. That it is subject to any indebtedness owing the cooperative by the holder thereof. B. Stock Issued or Transferred: If elsewhere in these bylaws membership in this association is restricted, then Class A Stock shall only be issued or transferred to a person, firm, or corporation, eligible to membership herein. Before the new certificate is issued, the old certificate must be surrendered for cancellation, which certificate shall then be marked "cancelled" and dated. No stock shall be transferred unless any and all indebtedness owing the association by the holder thereof shall first be paid. In case the certificate to be transferred has been lost or destroyed, the Board of Directors may require the holder thereof to furnish an indemnifying bond protecting the association against any loss or damage by reason of issuing a new certificate, and may further require the person to make an affidavit that he/she has not sold, transferred, assigned or hypothecated said stock.

7 ARTICLE VII: REVOLVING FUND AND RECORDS A. In order to further the cooperative character of this association and provide a means whereby its current and active patrons will finance the association, this association is authorized to issue a) Class A and Class 8 Common Stock, b) equity reserve or capital interest certificates, or c) any other media as determined by the Board of Directors, and as permitted by the laws under which the association is organized, evidencing the patronage refunds received by this association from other cooperative associations, deductions made pursuant to agreements, or the patronage refunds of this fiscal year. Funds and credits arising from the issuance of such stock or certificates or other media may be used for creating a revolving fund for building working capital and an interest in other wholesale or central cooperatives as are deemed necessary by this association. Whenever the association determines that such funds are not necessary for the proper financing of the operations of the association, such revolving capital shall be devoted to retiring the following in full or on a pro rata basis: 1. Class A or Class B Common Stock. 2. Certificates of indebtedness or interest or any other media. in a manner provided in the Articles of Incorporation. BYLAWS 8 B. The books and records of the association shall be kept on fiscal year basis, and in such manner that the patronage refunds of each patron of the association may be ascertained at any time. ARTICLE VIII: NET SAVINGS AND DISTRIBUTION 1. Gross receipts from patronage shall be all proceeds from the sale of goods and services to members and non-members and all other sums received which constitute patronage income (including patronage dividends). Gross receipts from non-patronage shall be all income from non-patronage activities of the association. 1. The association shall deduct from each of the gross receipts above (patronage and non -patronage) all expenses incurred in generating the gross receipts including, but not limited to marketing expenses, cost of goods or services sold, taxes, depreciation, reserves for doubtful accounts and all other necessary expenses incurred in generating the gross receipts. The amount remaining after reducing the gross receipts by these deductions shall constitute the annual net savings of the association from patronage sources and annual net savings from nonpatronage sources whose sum shall equal the total annual new savings (net earnings). 1. Annual net savings from patronage shall be divided into 1) annual net savings from me mber patronage and 2) annual net savings from non-member patronage. Annual net savings from member patronage shall be

8 determined by taking the percentage of gross receipts attributable to business done with or for members (including patronage dividends, etc.) and multiplying that percentage times the total annual net savings from patronage (total annual net savings minus non-patronage savings). The amount resulting shall be annual net savings form member patronage. The difference between total annual net savings from patronage and annual net savings from member patronage shall be annual net savings from non -member patronage. Annual net savings from member patronage shall be distributed to the member-patrons of this association in proportion to the amount of business done by them with the association, subject only to the deductions and exceptions provided in section D of article VIII below. This patronage refund shall be paid in the following manner: 1. A minimum of 20% of the patronage refund shall be returned to the memberpatron. BYLAWS 9 2. The balance of the patronage refund shall be credited to the member-patron s patronage account, and proper entries to that effect made on the books and records of the association. 1. Capital Reserve. The Board of Directors shall annually set aside all annual net savings from non -member patronage and all annual net savings from non-patronage sources less any income tax liability, as a capital reserve. In addition, the board of directors may also place into the capital reserve fund: 1) all annual net savings from member patronage attributable to member-patrons who have not provided current contact information or are unidentified, or who do not consent to take into account patronage dividends from the association in the manner provided in 26 U.S.C. section 1385, and 2) annual net savings from patronage attributable to members who do so consent, but which result in a dividend allocation of less than $ to a member in a fiscal year. Amounts previously set aside as capital reserves shall not be allocated to the member patrons but shall be kept in the general reserve fund of the association. The board of directors may, by resolutions duly adopted prior to the beginning of the fiscal year, set aside up to fifty percent (50%) of the total annual savings from member patronage or other reasonable amounts as capital reserve. 1. Each member of this association shall, by becoming a member, consent that the amount of any distributions with respect to his, her of its patronage occurring in any fiscal year which are made by qualified written notices of allocation (as defined in 26 U.S.C. 1388) received by him, her or it from the association shall be included in his, her or its income in the manner provided in 26 U.S. C during the taxable year in which the qualified written notices of allocation are received. It is the intent of this provision to provide a consent binding on all members who retain or obtain membership in this association and receive a written notification and copy of this bylaw, for the purpose of making such distributions qualified within the meaning of the Internal Revenue Code.

9 BYLAWS 10 ARTICLE IX: INDEMNIFICATION. The corporation shall, to the fullest extent now or hereafter permitted by the law, indemnify any person made or threatened to be made a party to any action or proceedings by reason of the fact that he or she, his or her testator or intestate was an associate, director, officer, or agent of the corporation, or of any other organization served by him or her in any capacity at the request of the corporation, against judgments, fines, amounts paid in settlement, and reasonable expenses, including attorney fees. The corporation shall not however, indemnify any such person in respect of any matter as to which he or she shall be or shall have been finally adjudged in any such action or proceeding to be or to have been derelict in the performance of his or her duty or in respect of any matter on which any settlement is or has been affected, if the total expense, including the cost of settlement, shall substantially exceed the expenses which might reasonably have been incurred. The foregoing right of indemnification shall not be exclusive of other rights to which any such person may be entitled as a matter of law.

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