Proposed Amendments to Oshkosh Food Co-op Bylaws and Articles of Incorporation
To be voted on at the Virtual Annual Membership Meeting, April 8, 2020
As the we transition from a start-up conceptual entity to an operational business, the following recommended amendments would allow the Co-op to better protect the interests of our member-owners through increased flexibility to: further membership, raise funds, better define roles and responsibilities of leadership and staff, and provide needed governance safeguards.
All amendments and restatements are at the suggestion of our attorneys at Dorsey & Whitney, Dave Swanson and Dan Lenhardt, who are specialists in Cooperative Law and Cooperative governing documents. They also reflect many of the suggested best practices of Columinate and other professional Cooperative organizations that have done extensive bylaws studies in an effort to modernize the documents throughout the industry.
Any questions in advance of the meeting can be sent to [email protected]
Oshkosh Food Co-op Bylaws Explanation of Specific Recommended Amendments
- Our current Oshkosh Food Co-op Bylaws can be found here.
- Redlined changes of Oshkosh Food Co-op Bylaws are here.
- Amendment Process for Bylaws (Article VII): These bylaws may be amended by a majority vote of the members present and voting at any meeting of the Cooperative, provided a copy of the proposed change has been sent by mail or email to every member at his/her last known address at least ten days prior to such meeting.
Article I, Clause 2: Added language to explicitly allow delegation of Board authority.
Article I, Clause 7: Added and modified language to allow Board flexibility in terminating or suspending membership.
Article I, Clause 9: Deleted language because it conflicted with Wisconsin law.
Article II, Clause 1: Added language clarifying role of Directors and authorizing Wisconsin law.
Article II, Clause 7c: Added language to protect ongoing operations of the Co-op and to prevent small faction from taking over the board.
Article III, Clause 2: Deleted and replaced language to allow flexibility as Officer and Director roles evolve as well as to provide general and standard definitions of the roles of Officers.
Article IV, Clause 4: Deleted and replaced language to allow operational flexibility.
Article V: Deleted “Allocation, Distribution and Reserves” section and replaced with “Patronage Dividends” section. The “Patronage Dividends” section is more modern and flexible and is common, best practice among cooperatives. The current clause requires non-member income to be allocated to members, but only on dissolution; the Board and legal counsel feel it is in the best interest of the co-op to have the flexibility to allocate this income to a permanent and unallocated reserve in a more equitable manner. Under current language, if in the future, the store is sold at a large gain, all of the gain has to go to members based on current year purchases even though the gain was created by member loyalty over 20 years. Additionally, the existing clause requires non-member income to be allocated to members. The Board and legal counsel feel it is in the best interest of the co-op to have the flexibility to allocate this income to a permanent and unallocated reserve.
Article VII: Added language clarifying role of Board of Directors in amending Bylaws.
Oshkosh Food Co-op Articles of Incorporation Explanation of Specific Recommended Restatements
- Here is the current Oshkosh Food Co-op Articles of Incorporation:
- Here is the proposed Oshkosh Food Co-op Articles of Incorporations.
- Amendment Process for Articles of Incorporation (WI Stat 185.51): At any member meeting a cooperative may adopt any amendment to its articles…if a statement of the nature of the amendment was contained in the notice of the meeting…an amendment is adopted when approved by two-thirds of the member votes cast thereon.
Statement of the Nature of the Amendments: Implement an operating governance document that provides the structure for the Oshkosh Food Co-op to (1) allow for additional Members; (2) give Board more flexibility with issuing and determining preferences, rights, dividends, etc. with capital stock; (3) allow greater flexibility for future stock offerings; (4) provide greater flexibility overall for Board to govern the Coop; (5) additional best practices/standard provisions.
Article III: Counsel suggests as we move towards functioning as an operating Co-op, we retain a professional registered agent at a nominal fee to ensure we maintain our good status under the laws of Wisconsin.
Article IV, Section 2: In order to facilitate additional members-owners of the Oshkosh Food Co-op and to allow for the potential for up to $5 million in capital to be raised via a capital stock offering, we modified our authorized shares and increased our authorized member stock from 2,000 to 5,000 and increased our authorized capital stock from 49,998 to 585,000, all with a par value of $10 per share. In addition, we eliminated any authorization of community stock as it is not a common or standard offering in many Cooperatives. Additionally, in the years after our Articles of Incorporation were originally drafted, it was determined that entities and businesses could become members of the Co-op, invest in any stock offerings and participate in any Capital Campaigns.
Article IV, Section 3: Added language explaining purpose and administration of member stock.
Article IV, Section 4: Added language explaining purpose and administration of capital stock.
Article IV, Section 5 and 6: Added language explaining lack of preemptive rights and fractional shares.
Article V: Added language confirming and delineating the Board of Directors as the administrator of all corporate powers related to the Oshkosh Food Co-op.
Article VI: Added and modified language clarifying preference of any remaining assets upon dissolution or liquidation of the Oshkosh Food Co-op.
Article VII: Added language clarifying that any plan of merger or consolidation must require a majority vote of any stockholders.