BYLAWS

of Elm City Food Cooperative, Inc.

AMENDED 9/2012
B
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AMENDED AND RESTATED
BYLAWS OF
ELM CITY FOOD COOPERATIVE, INC.
(A Connecticut Cooperative Association)
ARTICLE I: ORGANIZATION
1.1 Name.
The name of the organization shall be Elm City Food Cooperative, Inc. (the Cooperative).
1.2 Purpose.
The nature of the activities to be conducted and the purposes to be promoted or carried out by the Cooperative are to operate a con-
sumer cooperative that meets the needs of its members and the community it serves, including providing educational activities and services
which enrich the life of the community; and to engage, subject to the foregoing and those set forth below, in any and all lawful purposes and
activities for which cooperatives and corporations may be organized under the laws of the State of Connecticut and under Subchapter T of
the Internal Revenue Code, as that code may be amended from time to time, and to transact any and all such business incidental thereto.
1.3 Ownership.
The Cooperative is member owned and shall be operated on a cooperative basis in accordance with Subchapter T of the Internal Revenue
Code, as that code may be amended from time to time.
1.4 Governance.
The business of the Cooperative shall be governed by its board of Directors (the Board), who are individuals selected by and from among,
and are accountable to, its assembly of members, provided, however, that the initial Board shall not be selected by members but instead ap-
pointed by the incorporators of the Cooperative. The assembly of members shall retain all powers required by law or by these Bylaws. The
Directors shall have all of the duties of managers under, and be considered managers for the purposes of, Sections 33-183 to 33-193, inclu-
sive, of the Connecticut General Statutes.
1.5 Fiscal Year.
The fscal year of the Cooperative shall begin the frst day of July in each year and end on the last day of June in the following year, or as
otherwise determined by the Board.
1.6 Offces.
The Cooperative may have offces or other facilities within or outside the State of Connecticut as may be deemed by the Board to be neces-
sary or convenient to the service of members; provided however, that the Cooperative shall not do business in any other place or places
than those stated in the Certifcate of Incorporation.
ARTICLE II: MEMBERSHIP
2.1 Eligibility.
Membership in the Cooperative shall be voluntary and open to any person or group which submits a completed membership application
and: (a) declares himself/itself to be interested in the mission of the Cooperative; (b) agrees to be a patron of the Cooperative and abide fully
by its Articles of Incorporation, Bylaws, and other rules and regulations; (c) executes a membership agreement; (d) purchases one or more
shares of Class A stock of the Cooperative and becomes, or endeavors to become, fully vested in the Cooperative, in accordance with Sec-
tion 2.5 of these Bylaws; and (e) meets any other qualifcations as may be required by the Board.
2.2 Admission.
An eligible person or group may be admitted by the Board to membership upon meeting the criteria described in Section 2.1. A copy of
these Bylaws will be made available to each applicant.
2.3 Stock.
The Board has the power to issue stock in the Cooperative in accordance with the Certifcate of Incorporation and applicable law. The par
value of such stock shall be as set forth in the Certifcate of Incorporation. In order to assist the Cooperative in meeting its needs for capital
funds, members (including both partially and fully vested members) may be required to purchase one or more additional shares of Class A
stock of the Cooperative on a periodic basis as determined by the Board.
2.4 Return of Shares.
The Board shall manage the Cooperatives equity capital in a way to preserve and build upon the Cooperatives fnancial position while
also allowing for redemptions of equity as and when the Cooperative has the fnancial strength to redeem capital stock. No terminated or
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resigned member shall have any legal right to demand to demand or otherwise be entitled to a refund of any amounts tendered for their
capital stock except in the sole discretion of the Board, which shall consider the best fnancial interests of the Cooperative in making such a
decision.
2.5 Defnition of Member
For the avoidance of doubt, the term member within these Bylaws shall refer only to individuals and groups eligible for membership in
accordance with Section 2.1 which: (a) are fully vested in their membership as defned Section 2.6; or (b) for reason of economic hardship
or otherwise, are unable to purchase all of the shares required for full vesting of membership and therefore become partially vested by: (i)
purchasing one (1) or more shares of Class A stock in the Cooperative, (ii) signing an agreement with the Cooperative to purchase all of
the shares required for full vesting of membership in an installment payment plan which may last for a period of up to two (2) years, subject
to the discretion of the Board, and (iii) submitting payments in a timely manner in accordance with such installment payment plan.
2.6 Member Vesting
At the time of the initial ratifcation of these Bylaws, ten (10) shares of Class A stock shall be required for a membership to become fully
vested, provided, however, that the Board shall be entitled to increase or reduce the number of shares required for full vesting of member-
ship from time to time to raise additional capital or otherwise address the needs of the Cooperative.
2.7 Member Rights.
Members, whether fully or partially vested, have the right to: purchase goods and services from the Cooperative; participate in Cooperative
events and programs as members; vote on all matters coming before the assembly of members, including the election of the Board; attend
meetings of the Board; petition the Board to call a special meeting, subject to Section 3.2 of these Bylaws; and receive notice of membership
meetings. Each member shall have one voice or vote and no more on all matters submitted to the membership. In addition, all members
shall be entitled to receive patronage refunds in accordance with their shares in the Cooperative and with Article VII of these Bylaws.
2.8 Group Memberships
Membership may be designated in the name of a group, including a legal entity such as a corporation or limited liability company. Members
of this group shall be represented by a single offcer, Director or other authorized agent (the Representative). Only the Representative
is authorized to transact offcial membership business with the Cooperative. The Representative shall be named as the member-owner on
stock certifcates, patronage refund checks, and any other payments based on or made to members. It is the duty of the Representative to
account to all other members of the group for any monies or other benefts received from the Cooperative, and the Cooperative is not
responsible for ensuring that individuals in any group receive money or other distributions to which they may be entitled under the groups
mutually-agreed plan. The group must notify the Cooperative in writing about a properly authorized change of the Representative.
2.9 Membership Identifcation.
Upon approval of an application for membership, each member (or, in the case of a group member, each Representative) shall be issued a
certain number of membership cards, keychain cards, and/or similar identifcation, for each membership (hereinafter the Member Identif-
cation). Each Membership Identifcation shall be in such form as may be prescribed by the Board from time to time. The Cooperative shall
maintain an ongoing list of those entitled to hold Member Identifcation. Such Member Identifcation shall not be transferable except as
provided in Section 2.10 of these Bylaws.
2.10 Membership Transfers.
Memberships, Member Identifcation, and stock in the Cooperative are not transferable without the express written consent of the Board,
and any attempt by a member to transfer, sell, assign, or otherwise dispose of such property shall be void, provided, however, that the Rep-
resentative of a group membership may be modifed pursuant to Section 2.8 of these Bylaws.
2.11 Suspension or Termination of Member.
A member who remains delinquent in fnancial obligation (including failure to abide by the terms of an installment payment plan or failure
to purchase additional capital stock as required by the Board) for more than one (1) year or who fails to patronize the Cooperative for
three (3) consecutive years shall, upon notice by the Cooperative, be considered to have voluntarily terminated membership. If the Board
shall fnd, after notice and an opportunity for the member to be heard, that: (a) Member Identifcation has come into the possession or
control of any individual or group other than the individual or group to whom it was issued; (b) that the holder has ceased to be an eligible
member or has otherwise violated the Articles of Incorporation, Bylaws, rules, or regulations of the Cooperative; (c) that the ownership or
voting control of any group member has been sold or otherwise transferred to any non-member, whether operating under the same name
and structure or not, without the prior written consent of the Cooperative; (d) that a member has violated the membership agreement or
other agreement(s) made with the Cooperative; (e) if the Board has attempted in good faith to reach the member via postal mail, electronic
mail, or other contact information three (3) times but the address supplied by the member is no longer valid; or (f) for other good cause,
then the Board may either suspend such holders rights as a member or terminate membership status. Failure by a partially vested member
to submit payments in a timely manner in accordance with an installment payment plan may result in suspension or termination of member-
ship and forfeiture of all previously paid amounts to the Cooperative.
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2.12 Resignation of Member.
Any member may resign membership by fling a written resignation with the Secretary of the Cooperative, subject to acceptance by the
Board or its delegate.
2.13 Procedures Upon Termination or Resignation
In the event a membership is terminated or a member resigns in accordance with Sections 2.11 or 2.12 of these Bylaws, the procedures and
obligations in this Section shall apply. The allocated or contributed equity of such member which has not been called for payment previously
may, in the Boards discretion, be redesignated to the Cooperatives capital reserve. A terminated or resigned member shall immediately re-
turn to the Cooperative all previously issued Member Identifcation. If a terminated or resigned member fails to deliver such Member Identi-
fcation, the Cooperative may cancel such Member Identifcation on its books and records, and the Member Identifcation will be deemed null
and void. Termination or resignation shall not relieve that member of the obligation to pay any dues, assessments, or other charges accrued
and due or past-due but unpaid. A terminated or resigned member shall have no rights or privileges resulting from any previous membership
held except as may be provided in these Bylaws, nor shall a terminated or resigned member be entitled to vote or to otherwise have a voice
in the management or affairs of the Cooperative. Payments made by a partially vested member who failed to abide by the terms of the install-
ment payment plan shall not be credited to future applications for membership.
2.14 Consent to Take Patronage Distributions Into Income.
Each person who hereafter applies for and is accepted to membership in this Cooperative and each member of this Cooperative as of the ef-
fective date of these Bylaws who continues as a member after such date shall, by such act alone, consent that the amount of any distributions
with respect to its patronage which are made in written notices of allocation (as defned in 26 U.S.C. 1388), and which are received by the
member from this Cooperative, will be taken into account by the member at their stated dollar amounts in the manner provided in 26 U.S.C.
1385(a) in the taxable year in which the written notices of allocation are received by the member.
ARTICLE III: MEMBER MEETINGS
3.1 Annual Meeting.
The annual meeting of members shall be held once each fscal year at such a time and place as the Board may prescribe. The purpose of the
meeting shall be to hear reports on operations and fnances, to review any important policy issues or oilier matters that vitally affect the
operation of the Cooperative, to elect Directors and conduct such other business as may properly come before the meeting.
3.2 Special Meetings.
Special meetings of the assembly of members may be called by: action of the assembly of members; upon written petition of at least ffty (50)
members or fve percent (5%) of the total number of members, whichever is greater, which must be delivered certifed mail to the Secretary
of the Cooperative; by the written request from the majority of the Board to the Secretary of the Board; or by the President of the Board.
Only business within the purpose or purposes described in the notice of meeting may be conducted at a special meeting of members.
3.3 Notice.
Notice of the date, time, place and proposed agenda of each meeting of the assembly of members shall be communicated to the Members no
less than ten (10) nor more than sixty (60) days before the date of the meeting by:
(a) mailing the notice of the meeting to each member personally at the members last known post offce address;
(b) electronic mail, voicemail or telephone;
(c) other electronic means as may be consented to by such member; or
(d) any other means permitted by Section 33-603 of the Connecticut General Statutes;
Notwithstanding the foregoing, if any of the above forms of personal notice are impractical, notice may be communicated by publication in
a legal newspaper of general circulation in New Haven County or by radio, television or other public broadcast communication; and by (i)
publication in a magazine, periodical, or other publication of this Cooperative that is regularly published by or on behalf of this Cooperative
and circulated generally among members; or (ii) by posting notice in the Cooperatives place of business.
3.4 Voting.
Each member shall be entitled to one vote on any issue. Voting shall be in person or by proxy. The Board may fx a record date for determin-
ing members entitled to vote. The Cooperatives list of members and Representatives as of such date, or the date shall determine who is
entitled to vote at any meeting Voting may be by viva voce, except that any member may demand a vote by ballot. In voting for Directors,
each member may cast as many votes as there are positions to be flled, but no more than one (1) vote may be cast for any one candidate.
Member action on any matter, other than the election of Directors, coming before the members shall require the affrmative vote of a major-
ity of votes cast, unless the Connecticut General Statutes require a greater amount of affrmative votes.
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3.5 Proxies
A member may vote such members shares in person or by proxy. A member may appoint a proxy to vote or otherwise act for such
member by signing an appointment form or by electronic transmission of the appointment, either personally or by such members attorney-
in-fact. An appointment of a proxy is effective when received by the Secretary or other offcer or agent authorized to tabulate votes. An
appointment is valid for eleven (11) months unless a longer period is expressly provided in the appointment form. The death or incapacity
of the member appointing a proxy does not affect the right of the Cooperative to accept the proxys authority unless notice of the death
or incapacity is received by the Secretary or other offcer or agent authorized to tabulate votes before the proxy exercises authority under
the appointment. Subject to Section 33 708 of the Connecticut General Statutes and to any express limitation on the proxys authority ap-
pearing on the fact of the appointment form, the Cooperative is entitled to accept the proxys vote or other action as that of the member
making the appointment.
3.6 Quorum.
A majority of the votes entitled to be cast on the matter constitutes a quorum for action on that matter. Once a member is represented
for any purpose at a meeting, the member is deemed present for quorum purposes for the remainder of the meeting and for any adjourn-
ment of that meeting, unless a new record date is or must be set for that adjourned meeting.
ARTICLE IV: BOARD
4.1 Powers and Duties.
The Board shall govern the business and affairs of this Cooperative and assure that the purposes and mission of the Cooperative are car-
ried out. The Board shall exercise all of the powers of this Cooperative, except those powers that are conferred upon or reserved to the
members by law, the Certifcate of Incorporation, or these Bylaws. Subject to the preceding sentence, the powers and duties of the Board
shall include, but not be limited to: oversight of hiring management and consultants and evaluating their performance; approving budgets
and fscal controls; ensuring fair and equitable conditions of employment; providing leadership in the realm of long range policy; overseeing
operations; making all rules, policies and regulations consistent with applicable laws, the Articles of Incorporation or these Bylaws; entering
into loans, leases, utility agreements, and all other similar agreements; and assuring that the purposes and mission of the Cooperative are
carried out. The Board shall adopt such policies, rules, and regulations and shall take such actions as it may deem advisable, provided that the
Board does not act in a manner inconsistent with the law, the Articles of Incorporation, or these Bylaws. The Board may authorize the em-
ployment of such other agents and counsel as it deems necessary or advisable from time to time in the best interests of the Cooperative.
4.2 Qualifcation and Number.
The Board shall consist of not more than nine (9) and not fewer than seven (7) Directors, provided that the number of Directors shall
never fall below the number required by law. The number of Directors shall be fxed from time to time by the Board. No Director may be
an employee of the Cooperative, a former employee of the Cooperative within two (2) years or termination of employment, or persons
who reside in the same household as a Cooperative employees or former employees (within two (2) years or termination of employment).
No person shall be eligible for Directorship or remain as a Director if that person is in competition with, or is affliated with any enterprise
that is in competition with the Cooperative. All Directors shall be members of the Cooperative.
4.3 Election and Tenure.
Election and Term. Directors are elected to Board positions, the number and term of which shall be established by the Board prior to the
annual Board election, by a plurality of votes cast in such election. The incorporators of the Cooperative will set forth the initial Board, with
staggered terms divided as evenly as possible among the following three groups:
Group A: Up to three (3) Directors will be elected for an initial term of three (3) years.
Group B: Up to three (3) Directors will be elected for an initial term of two (2) years.
Group C: Up to three (3) Directors will be elected for an initial term of one (1) year.
Following the completion of the initial Directors terms, successor Directors shall be elected by the voting members to serve a term of
three (3) years and shall serve until election of their successors or as otherwise provided in these Bylaws. Successor Directors shall be
elected to staggered terms so that approximately one-third (1/3) of the Board is elected each year. Directors may serve no more than
three (3) consecutive full three (3)-year terms, but may be subsequently re-elected after a period of one (1) year.
4.4 Meeting and Method of Meeting.
The Board shall meet at least four (4) times per year. Board meetings and committee meetings may be conducted by telephone conference
call provided that technical arrangements permit all persons participating to hear one another at the same time. Such participation shall
constitute presence in person at a meeting.
4.5 Notice for Board Meetings.
Notice of regular meetings of the Directors need not be given. Notice of a special meeting of the Directors shall be communicated to the
Directors by any means permitted by Section 33-603 of the Connecticut General Statues at least two (2) days prior to the special meeting.
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All meetings shall be open to members of the Cooperative, except that the Board may meet in Executive Session for legal, real estate, per-
sonnel, and other issues where an open session would be detrimental to the Cooperative, in the sole discretion of the Board. To the extent
practicable, the time and place of all meetings shall be posted in a conspicuous place at the Cooperatives place of business. Any Director may
waive notice of the meeting in writing, and his/her presence at that meeting shall automatically constitute a waiver of notice, unless the Di-
rector at the beginning of the meeting, or promptly upon arrival, objects to holding the meeting or the transaction of business at the meeting
and thereafter does not vote for or assent to action taken at the meeting.
4.6 Quorum and Voting.
At all meetings of the Board a quorum shall consist of a majority of the number of Directors prescribed by the Board. Binding decisions
cannot be made unless a quorum of Directors is present. At all meetings of the Board, each Director shall be entitled to one (1) vote. Each
matter submitted to a vote of the Board shall be determined by a majority of Directors present, unless the vote of a greater or lesser pro-
portion is otherwise required by the laws of the State of Connecticut, the Certifcate of Incorporation or other provisions in these Bylaws.
4.7 Action Without a Meeting.
Any action required or permitted to be taken at any meeting of the Board, or any committee thereof, may be taken without a meeting if all
members of the Board or committee consent thereto in writing, and such writing is fled with the minutes of the proceedings of such Board
or committee.
4.8 Resignation and Removal.
A Director may resign at any time by submitting a written resignation to the Secretary, which shall take effect immediately without accep-
tance, unless a later time is designated in the written notice. Whenever any Director fails to meet the qualifcations as described in Section
4.2 of these Bylaws, fails to satisfactorily perform his / her duties, fails to attend three (3) consecutive Board meetings, either regular or
special, without just and reasonable cause, or for other just cause when removal is deemed by a majority of the Board (without counting
the Director under consideration for removal) to be in the best interests of the Cooperative, and provided that notice and an opportunity
for the Director to be heard has been given in accordance with these Bylaws, then it shall be the duty of the Board to submit a proposal
to remove such Director at a special meeting of the members, and to fll the vacancy in accordance with Section 4.9 of these Bylaws. Mem-
bers may remove any Director only for just cause, at a special meeting called for the purpose. The notice of such meeting shall include the
charges against such Director. Such Director shall be notifed in writing of the charges and be given an opportunity to be heard at a meeting
of the members. Removal of a Director by the members shall require an affrmative vote of a majority of votes cast in favor of the removal.
4.9 Vacancies.
In case of any vacancy in the Board caused by death, resignation, removal or otherwise the remaining Directors may select someone to fll
such position for the remainder of the term of that seat.
4.10 Committees.
The Board may designate one or more committees of Directors to advise the Board and members and to exercise such authority as the
Board shall designate. The Board shall establish a nominating committee consisting of at least three (3) members, at least one of whom shall
be a Board member who will chair the committee. Any committee exercising the powers of the Board, as may be authorized by the Board,
shall consist of only Directors. Committees not exercising powers of the Board may consist of Directors and non-Directors.
4.11 Nominations.
The Nominations Committee shall present a slate of qualifed candidates for positions on the Board of Directors, to be flled by election
at the annual meeting. Candidates for Director may also be nominated for the slate by a petition signed by no fewer than twenty-fve (25)
members in good standing, and delivered to the Secretary of the Cooperative by certifed mail at least fourteen (14) days prior to the annual
meeting.
4.12 Advisory Board.
The incorporators or the Board may create an advisory board that meets or provide guidance to the Board on an as-needed basis. Members
of such advisory board shall be selected by the Board and shall include those with special expertise or understanding about food coopera-
tives, food policy, the local environment, or other issues of concern to the Cooperative.
ARTICLE V: OFFICERS
5.1 Designation.
The offcers of the Cooperative shall consist of a president, vice president, secretary, treasurer and such other offcers or assistant offcers
as may be determined by the Board. The offces of treasurer and secretary may be held by the same person. The president, vice president,
secretary and treasurer shall be chosen from among the Directors then in offce.
5.2 Election and Term.
Each offcer shall serve for the term for which such offcer is elected and until such offcers successor is duly elected or until such offcers
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death or until such offcer shall have resigned or have been removed. Vacancies among the offcers shall be flled by the Board.
5.3 Duties.
Offcers shall have the following powers and duties together with such other powers and duties as may be determined by the Board: (a) the
president shall arrange for facilitation at all meetings of the assembly of members or the Board, shall preside at all meetings of the Board,
shall negotiate and execute all contracts and agreements in the name of the Cooperative in accordance with Section 5.5 of these Bylaws,
and shall call annual and special meetings of members and the Board, (b) the vice president shall oversee membership records and perform
the duties of the president in his or her absence, (c) the secretary shall oversee the recording and publishing of minutes of all meeting, shall
oversee the maintenance of membership and Member Identifcation records, and all records required to be kept under subsections (a) and
(c) of Section 33-945of the Connecticut General Statutes, to the extent the keeping of such records is not assigned to another offcer by
these Bylaws or by the Board, and shall serve all required notices, and (d) the treasurer shall oversee the fnancial affairs of the Coopera-
tive, provide a statement of the condition of the Cooperative at each annual meeting of the members and such other times as the treasurer
may be directed by the President or the Board, oversee the annual audit in accordance with Section 5.6 of these Bylaws, and fle required
reports and returns.
5.4 Removal and Resignation.
Any offcer may be removed from offce by the Board whenever in the Boards judgment the best interests of the Cooperative will be
served thereby. Offcers can resign at any time by giving notice to the Cooperative.
5.5 Signatory Responsibility of Offcers.
Unless otherwise stated in these Bylaws, the President shall have all general signatory power and authority to execute all instruments and
writings of whatever kind on behalf of the Cooperative, including but not limited to all: checks and drafts, negotiable instruments, contracts
and agreements, deeds and leases, tax returns, applications for loan or grant and all related documentation, loan agreements, promissory
notes and mortgages and other documents granting security therefore. In addition, the Board may authorize in writing any offcer(s), em-
ployees, agents or others to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Coopera-
tive, and such authority may be general or confned to specifc business.
5.6 Audit
The Board shall cause an audit of the Cooperatives books and records to be performed annually, or at such other time interval as the
Board may establish, by such person(s) as the Board shall vest with this responsibility. The audit may be conducted by outside professional
auditor, an audit committee of the Board, or by other qualifed persons, as the Board may determine from time to time. All audit fndings
shall be reported to the Board, which shall ensure that any required corrective actions are promptly taken. A summary of these audit fnd-
ings and any corrective actions taken shall be reported to the members at the annual meeting.
ARTICLE VI: RISK MANAGEMENT
6.1 Indemnifcation of Directors and Offcers.
So as to induce the Directors and offcers of the Cooperative to serve as such and as partial consideration for such services, the Coop-
erative shall indemnify, advance expenses to, and reimburse each present and future Director, offcer, employee, and agent for any claim or
liability (including expenses and attorneys fees actually and reasonably incurred in connection therewith) to which such person may become
subject by reason of their affliation with the Cooperative, to the maximum extent permitted by law. Such indemnifcation shall be made
only if it is determined by the Board that the Director, offcer, employee, or agent acted in good faith in the reasonable belief that his or her
action was in the best interests of the Cooperative and not unlawful, and that such indemnifcation is in the best interests of the Coopera-
tive. The foregoing shall not be exclusive of any other rights to which Directors and offcers may be lawfully entitled.
6.2 Insurance.
The Board shall provide for adequate insurance of Cooperative property, or property in the possession of or stored by the Cooperative
and not otherwise adequately insured, and, in addition, adequate insurance covering general liability, liability for injury and accidents to em-
ployees and the public, Director and offcer liability insurance and such other insurance as the Board shall deem necessary and prudent.
ARTICLE VII: OPERATION AT COST AND MEMBERS CAPITAL
7.1. Operation at Cost.
The Cooperative shall at all times be operated on a cooperative, service-at-cost basis for the mutual beneft of its members and patrons.
The Cooperative may accumulate only such capital, reserves and other fnancial assets as are determined by the Board to be necessary and
prudent to the ongoing operation of the Cooperatives business. Within a reasonable time after the end of each fscal year, the Board shall
determine the net earnings (net margin) of the Cooperative for said fscal year, which determination shall be made in accord with generally
accepted business principles and practices, or otherwise as the Board may direct upon the advice of the Cooperatives accountant or other
professional advisor. No distribution of net earnings to members shall be declared or paid until a sum equal to ten percent (10%) of the net
profts is appropriated for a contingent or sinking fund and until there has been thereby accumulated a sum equal to twenty percent (20%)
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of the stock of the Cooperative. The net earnings of the Cooperative for said year from all the business of tile Cooperative other than busi-
ness done with or for members may be retained by the Cooperative as unallocated reserves or surplus. If there are no net earnings on such
business, or if such net earnings are insuffcient to provide for reasonable reserves for necessary purposes of the Cooperative, as determined
by the Board, then reasonable reserves may be set aside by the Board from the net earnings on business done with or for members or
patrons.
7.2 Capital Plan and Annual Operating Budget.
The Board shall adopt a Capital Plan, which shall be reviewed at least annually thereafter, to establish and provide for the capital needs of the
Cooperative, including the fnancial requirements of the Annual Operating Budget and the Strategic Plan. The Capital Plan shall establish a
base amount of Capital, and the method and amount of equitable contribution(s) of capital required of members. If capital is accumulated in
excess of the amount provided for in the Capital Plan, such excess shall be returned to members on an equitable basis. The Board shall ap-
prove each year an Annual Operating Budget, proposed or developed in consultation with the general Director, to provide for the payment of
the operating expenses of the Cooperative.
7.3 Patronage Refunds.
This Cooperative operates on a cooperative basis and allocates earning and losses to patron-members on the basis of the business done
with or for such patrons. Thus, in accordance with Section 1381 of the Internal Revenue Code of 1986, this Cooperative may declare a
patronage refund to be allocated among the patron-members in accordance with the total amount of purchases made by each such patron
during the preceding fscal year. If available, such patronage refunds shall be declared and paid from net earnings (net margin) at the end of
each fscal year, as required in these Bylaws. Each year, the Cooperative shall be obligated to account for and pay on a patronage basis to all
members all of the Cooperatives net earnings (net margin) over and above the cost of providing services to such members, after paying all
costs including dividends declared on Class B stock and making reasonable additions to capital and reserves and redeeming capital credits.
In accordance with Section 1382 of the Internal Revenue Code, the patronage refunds declared by the Cooperative are deductible from the
taxable income of the Cooperative.
All members shall be treated equitably, and patronage refunds shall be paid in proportion to and based on the volume or value of products
and services purchased by each member from the Cooperative during the year in question or based on such other equitable method as is
established by the Board. Patronage refunds to members shall be paid in cash or the equivalent or by an appropriate credit to a members
capital account or in both forms of distribution, as may be determined by the Board from time to time. The Cooperative may retain the dis-
tributed cash portion of any patronage allocation to offset any amounts due to the cooperative for purchase of capital shares.
7.4 Declaration and Notice of Patronage.
The Cooperative shall, within eight and one-half (8 ) months after the close of each fscal year, declare and pay any available patronage
refund as required by these Bylaws and shall notify each member thereof. The patronage notice shall be in the form of a written notice of
allocation or a per-unit retains certifcate (as those terms are used in Subchapter T of the Internal Revenue Code) or other appropriate
document.
7.5 Dividends.
No dividends or interest shall be paid on Cooperative stock or member Capital Accounts, except as provided in these Bylaws. Dividends
shall not exceed the legally authorized limit per year based on the book value of the shares or the member Capital Account.
7.6 Patronage Losses.
If the Cooperative suffers a loss during any year on business conducted with or for members (patronage loss), such loss may be appor-
tioned among the members during the year of loss so that such loss will, to the extent practicable, be borne by those who are members in
the loss year on an equitable basis. The Board shall have full authority to prescribe the basis on which capital furnished by members may be
reduced, or how such patronage loss will otherwise be equitably apportioned among the members. If in any fscal year the Cooperative shall
incur a loss other than on patronage operations (non-patronage loss), such loss shall be charged frst against any reserve accumulated from
non-patronage earnings in prior years. This Section shall not be construed to deprive the Cooperative of the right to carry backward or
forward losses from any source whatsoever in accordance with the Internal Revenue Code, state tax statutes or other applicable laws.
7.7 Class B stock
The Class B stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the funds of the Cooperative legally
available therefor, cumulative cash dividends at the annual dividend rate of 6.25% of the par value ($500) through and including December 31,
2018, and 8.00% of the par value ($500) thereafter, for each share of Class B stock, payable annually on January 31st of each year, beginning
on January 31, 2012 (and, in the case of any accrued but unpaid dividends, at such additional times and for such interim periods, if any, as de-
termined by the Board of Directors). Dividends, if paid, on the Class B stock will be payable annually in arrears on each January 31, beginning
on January 31, 2012. Dividends on the Class B stock will be cumulative, whether or not in any year there shall be funds of the Cooperative
legally available for the payment of such dividends and whether or not such dividends are authorized or declared. Dividends on the Class B
stock will accrue (whether or not declared) on an annual basis from the issue date, and accrued dividends for each annual dividend period
will accumulate to the extent not paid. If the Board of Directors decides to call any shares of the Class B stock for redemption, pursuant to
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Section 6 of Article V of the Cooperatives Certifcate of Incorporation, the Cooperative will pay the par value ($500) plus all accrued and
unpaid dividends on such shares of Class B stock. If the Cooperative decides to redeem less than all of the outstanding Class B stock, any
such partial redemption will be made on a pro rata basis on all of the outstanding shares of Class B stock.
ARTICLE VIII: DISSOLUTION, MERGER, AND LIQUIDATION
8.1 Dissolution.
In accordance with Section 33-881 of the Connecticut General Statutes, the affrmative vote of majority of the members at a meeting at
which there is a quorum in accordance with Section 3.5 shall be required to dissolve the Cooperative.
8.2 Merger or Consolidation.
If the terms of a merger or consolidation of which this Cooperative is a party do not provide the members of this Cooperative with an
economic interest in the surviving entity that is substantially similar to the economic interest possessed by such members in this Coopera-
tive immediately before such merger or consolidation, the value of the consideration received shall be divided among them in the same
manner as a comparable amount of net liquidation proceeds would be distributed pursuant to Section 8.3 of these Bylaws. This shall not be
construed to prevent issuance of differing forms of consideration to different groups of members to the extent allowed by law.
8.3 Liquidation, Dissolution and Winding-Up.
Subject to the Certifcate of Incorporation, in the event of any liquidation, dissolution or winding up of the affairs of this Cooperative,
whether voluntary or involuntary, all debts and liabilities of this Cooperative shall be paid frst according to their respective priorities. The
remaining assets shall be distributed in the following manner and order of preference: frst to Class B stockholders in amount equal to the
par value of each holders Class B stock plus accrued unpaid dividends, if any, second holders of memberships in an amount equal to the
value of the consideration for which the memberships were issued, without priority and on a pro rata basis if necessary and any assets
remaining after the foregoing payments have been made shall be allocated among the allocation units in the manner as the Board, having
taken into consideration the origin of the amounts, shall determine to be reasonable and equitable. Amounts so allocated shall be paid to
current and former patrons of each such allocation unit in proportion to their patronage of the unit over the period as may be determined
to be equitable and practicable by the Board. The obligation to distribute shall be construed as a preexisting duty to distribute any patron-
age sourced net gain realized in the winding up process to the maximum extent allowable by law.
ARTICLE IX: CONFLICT OF INTEREST
Any authorization by the Board or the members of a Directors conficting interest transaction, as defned in Section 33-781 of the Con-
necticut General Statutes, shall be made in accordance with the provisions of Sections 33-781 to 33-785, inclusive, of the Connecticut
General Statutes and any supplemental procedures that the Board may adopt from time to time.
ARTICLE X: MISCELLANEOUS
10.1 Amendments.
These Bylaws may be amended or repealed in whole or in part by the Board or by the Members.
10.2 Confict with Other Documents.
In the event of any confict between these Bylaws and the laws of the State of Connecticut or the laws of the federal government relat-
ing to Subchapter T corporations, such laws shall prevail. Similarly, in the event of any confict between these Bylaws and the Certifcate of
Incorporation, the provisions of the Certifcate of Incorporation shall prevail.
10.3 Records.
In addition to the records required to be kept by Section 33-945 of the Connecticut General Statutes, there shall be kept correct and com-
plete books and records of accounts and minutes of the proceedings of the incorporators, Board and committees of the Board. At intervals
of not more than twelve months the Cooperative shall prepare a balance sheet showing its fnancial condition as of a date not more than
four months preceding such date. The balance sheet and a proft and loss statement shall be deposited at the principal offce of the Co-
operative and be kept for at least ten years from such date. The treasurer and president shall have access to all records, including fnancial
records, of the Cooperative. Members may inspect and copy records to the extent provided by Section 33-946 of the Connecticut General
Statutes, or by other applicable law.
10.4 Severance.
Should any provision of these Bylaws be invalid under law, then such provision shall be deemed stricken from these Bylaws and the remain-
der shall be unaffected thereby. Should any provision be invalid due to its scope or breadth, then it shall be construed to be valid to the
scope or breadth permitted by law.

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