The Co-op Bylaws &
Articles of Incorporation Amendment
Has passed with a resounding "Yes"!
Our Board of Directors proposed to sell Class B Investment Shares to help finance our relocation. The Co-op owners voted in a special election to change the Co-op's Bylaws and Articles of Incorporation. The vote tally was 121 yes compared to 9 no.
What are the Bylaws and Articles of Incorporation?
The Co-op's Articles of Incorporation are filed with the California Secretary of State, and give the Cooperative legal existence. The Articles also state the capitalization of the Cooperative by setting out the share structure.
The Bylaws are the primary rules governing management and structure of the organization. Think of them as the Constitution and laws of our Cooperative enterprise!
Why do the Co-op bylaws need to be amended?
Sections 10.3 and 10.4 of the Co-op’s bylaws state that only a vote by the Co-op’s owners may authorize the store to create a new class of shares. The Articles need to be amended to create a new class of non-voting investment shares. Members will need to vote to amend the Co-op’s Bylaws and Articles of Incorporation to permit the Co-op to offer the preferred non-voting shares.
What is the difference between the existing ownership shares and the newly proposed Investment Shares?
Both shares are a way for owners to invest in their Cooperative. The current, “common” ownership shares entitle owners to a slew of benefits in store, including Patronage Refunds. More importantly, they give every owner one vote, guaranteeing each owner an equal say in the governance of the store. Investment Shares have no voting rights and offer no additional influence in store governance. Instead, they are a financial instrument which allows the Co-op to raise additional capital from its owners. Investment shares earn dividends on the principal invested. Click here to learn more about Investment Shares.
Have other Co-ops gone through this
Yes. Sacramento Natural Foods Cooperative recently offered Investment Shares to their owners to raise capital for a relocation. They raised approximately 1.5 million dollars through Class B Investment shares. Other Co-ops including Lexington (of Buffalo, NY), Sacramento, and St. Peter (of St. Peter, MN)have all run successful campaigns.
When was the special Election?
The election was held from August 24, 2015, until September 7, 2015.
If I vote yes, am I obligated to purchase Investment Shares?
No. Changing the Bylaws and Articles of Incorporation will allow the Co-op to sell Investment Shares to owners. Owners have no obligation to actually buy in those shares.
What would have happened if the proposed changes did not pass?
The Co-op would not be allowed to offer Investment Shares. Securing the capital needed to relocate would be much more difficult, as the Co-op would be entirely dependent on outside sources for funding.
Click the boxes below to view or download printable versions of the changes.