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2012 Ballot Explained

Natural Times, October/November/December 2012

By Madelon Horwich, Board Vice-President

The 2012 Annual Owners’ Meeting will take place November 3, 2012, starting at 1:30 pm, at the American Legion Hall on Lake Ella. In addition to the election of directors for three Board positions, members will be asked to approve amendments to the Co-op’s bylaws and articles of incorporation.

Bylaws are exciting because as a community, we get to write the rules for our business. Bylaws are the foundation of our business and New Leaf Market’s (NLM) bylaws have never been completely revised since our inception. We have grown so much since 1974. Your Board of Directors came to an agreement at its October 16, 2011 annual retreat that it was time to make sure our bylaws reflect our size and complexity, as well as our current practices and philosophies. With the help of Thane Joyal, Cooperative Development Services (CDS) consultant, the committee studied model co-op bylaws and proposed changes to the Board. After approving the proposed changes, the Board had the changes reviewed by an attorney experienced in the bylaws of cooperatives organized under Minnesota law (as our co-op is). The Board incorporated various changes suggested by the attorney, to ensure compliance with Minnesota law and consistency between our bylaws and our actual practices.

Below are a summary of the bylaw changes and the text of a new article of incorporation. Both are on the ballot in the printed newsletter available in the store and will be presented to co-op owners at the November 3 Annual Owners’ Meeting. The full text of the proposed bylaws changes can be found on the Co-op’s website at: www.newleafmarket.coop/ownership. At that site you can view the complete proposed new bylaws and a version showing the changes in legislative format (changes shown by strike-through of deletions and underlining of additions).

Summary/Highlights of Proposed

Bylaw Changes - 2012

Article I

  • We changed “store” to “one or more stores” in case we ever open another.
  • We changed 1.5 to address a leap-year issue.

Article II

  • Deletions and additions caused sections to be renumbered. Refer to the legislative-format version for all changes.
  • We separated §2.1 into two sections—Eligibility and Admission—and deleted 2.2—Categories—for clarity. We simplified the language as store policy covers household membership issues.
  • We changed the sections on Rights and Responsibilities §§2.3-2.4 to be more in line with practice; e.g., we deleted “An owner who becomes delinquent in meeting his or her share purchase obligation to an extent determined by the Board shall, no sooner than thirty days after delivery of written notification, be placed into inactive status.”
  • §§2.5 and 2.6 (Access to information and Settlement of Disputes) were deleted.
  • §2.8 was renumbered as §2.6 and we added “and Return of Equity” to the section title. We also added “written” in the first sentence: “Ownership may be terminated voluntarily by an owner at any time upon written notice to the Co-op.”
  • We added a new 2.7 titled “Unclaimed Property.”

Article III

  • §3.2 was changed so special meetings of owners are called as soon as practicable upon receipt of petitions signed by 20% of the owners rather than 100 owners.
  • We clarified meeting-notice and voting requirements. E.g., we added a provision in §3.4 for electronic voting, and a quorum of owners is 50 owners or 1%, rather than 100 or 2%, of the total number of active owners.
  • We deleted several sections as redundant or unnecessary, but we added §3.9 provisions
  • into Policy G-1: “Ballots shall be delivered to the Co-op in a plain sealed envelope inside another envelope bearing the owner’s name. A properly executed ballot shall be counted as the vote of the owner.”

Article IV

  • We changed “quorum” of directors from two thirds of the directors to a majority of the current directors.
  • We deleted §4.6 because it’s provided for under state law. We deleted §4.8 because the provisions are in Policy II-E. Various other sections would be renumbered.
  • We moved the indemnification provisions (Article VIII) to new §4.13 and added language limiting director liability as permitted under Minnesota statutes (see proposed Articles of Incorporation amendment below).

Article V

  • We deleted Article V (Meetings of the Board) entirely as unnecessary and incorporated the relevant provisions to Article IV. New Article V is titled “Owner Shares.”

Article VI

  • We deleted Article VI as unnecessary: §6.1 is in Policy II-D, §6.2 is replaced with what is now §4.12, and §6.3 was deleted.

Article VII

  • This section on capital stock was deleted entirely; see new Article V.

Article VIII

  • We deleted Article VIII (“Indemnification”) entirely, and instead added a section on indemnification—which includes new provisions on limitation of director liability, requiring a change to our articles of incorporation—to Article IV.

Article VIIIA

  • This article is renumbered as VI.

Article IX

  • This article was deleted as unnecessary because state law addresses notice issues.

Article X

  • This article, regarding amendment of bylaws, is renumbered as VII and some changes are proposed.

Article VIII

  • This article is new and provides for asset distribution upon dissolution of the Co-op.

Amendment to Articles of Incorporation of New Leaf Market, Inc.

The following article would be added to the Articles of Restatement of New Leaf Market, Inc., which were originally executed on April 3, 2000:

Article IX

To the fullest extent not prohibited by Minnesota law, as it exists on this date or is later amended, a director of the corporation shall not be liable to the corporation or its members for any monetary damages for conduct as a director and/or officer. This provision, however, shall not eliminate or limit the liability of a director or officer for:

(1)  any breach of the director’s duty of loyalty to the corporation or its members;

(2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

(3) any transaction from which the director or officer derived an improper personal benefit; or

(4) any act or omission occurring before the date this article became effective.

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