ARTICLE IV - Board of Directors

ARTICLE IV - Board of Directors

SECTION 4.1 – Director Districts

The Cooperative shall divide the general area in which Members are located or reside (“Cooperative Service Area”) into at least four (4) districts (collectively “Director Districts”). If necessary, the Board may revise the Director Districts to ensure that Members are equitably represented by the Director Districts. The Board may also revise the

Director District to create one (1) or more separate Director Districts for one (1) or more Classes of Members; provided, however that each Member, regardless of Class, shall be eligible to vote for at least one (1) Director.

Director Districts for any Class need not but may have the same territorial boundaries as the Director Districts for any other Class. In addition, the Board may authorize the election of one (1) or more at large directors, who shall be elected by any class or classes of Members without regard to Director Districts.

Within thirty (30) days following any Director District revision, and at least thirty (30) days before the next Annual Member Meeting, the Cooperative shall notify, in writing, any Members affected by the Director District revision.

Director District revisions are effective on the date the Cooperative releases written notice of the Director District revision. Except as permitted by Virginia Code Sections 56-231.28 and .29 and as set forth in Section 4.6 of these Bylaws, no Director District revision may:

A. Increase an existing Director’s Term without reelection; or

B. Unless the affected Director consents in writing, shorten any existing Director’s Term.

 

SECTION 4.2 – Board

The Cooperative shall have a Board consisting of one (1) or more persons from each Director District elected by the Members located or residing and belonging to the Class entitled to elect a Director from such Director District and such at large directors as the Board shall authorize. Except as otherwise provided by Law, the Articles, or these Bylaws:

A. All Cooperative powers must be exercised by the Board, or under the Board’s authority; and

B. All Cooperative affairs must be managed under the Board’s direction.

To the extent the Law, the Articles, or these Bylaws authorize any Person to exercise any power that the Board would otherwise exercise, the Person exercising the power has, and is subject to, the same duties, responsibilities, and standards of care of the Board. 

 

SECTION 4.3 – Director Qualifications

A. Director Qualifications. A Director or candidate must:

1. Be a natural person;

2. Have been a Member of the Cooperative for at least four cumulative (4) years, which membership period need not be continuous;

3. Have the capacity to enter into legally binding contracts;

4. Maintain his or her primary residence in the Director District from which the Director or candidate seeks election;

5. Be current in all financial obligations to the Cooperative;

6. If the Cooperative has any separate Director Districts for any Class, be a Member of such Class; and

7. Not have been convicted of a felony or a crime of moral turpitude.

Items one through six are referred to herein collectively as “Membership Director Qualifications.”

B. Conflict of Interest Director Qualifications While a Director, and during the one (1) year immediately prior to becoming a Director, a Director or candidate must not be, nor have been:

1. A Close Relative (see Section 4.11 for definition of close relative) of any existing Director, other than an existing Director who will cease being a Director within one (1) year;

2. An existing, or a Close Relative of an existing, non-Director Cooperative Officer, employee, agent, or representative;

3. Employed by, materially affiliated with, or share a material financial interest with, any other Director; or

4. Engaged in, nor employed by, materially affiliated with, or have a material financial interest in, any individual or entity other than an entity in which the Cooperative possessed an ownership interest (other than an entity in which the Cooperative possesses an ownership interest):

a. Directly and substantially competing with the Cooperative;

b. Selling goods or services in substantial quantity to the Cooperative; or

c. Possessing a substantial conflict of interest with the Cooperative.

Items a through c are referred to herein collectively as “Conflict of Interest Director Qualifications”.

C. Continuing Director Qualifications. Directors must comply at all times with the Membership Director Qualifications, and Conflict of Interest Director Qualifications (collectively, “Director Qualifications”) to continue to serve as a Director.

After being elected or appointed a Director, if any Director fails to comply with any Director Qualification, as determined by the Board, then the Board shall remove the Director. The failure of any individual Director to comply with all Director Qualifications does not, in itself, invalidate any Board action.

 

SECTION 4.4 – Director Nominations

Director candidates shall be nominated as follows:

A. Nominating Committee Nominations. The Board shall appoint a Nominating Committee, to which each incumbent Director shall nominate a Member (“Nominating Committee”). Nominating Committee members may not be close relatives of any incumbent Director, or of any Cooperative Officer, employee, agent or representatives, or of any declared, probable or actively campaigning candidate.

At least thirty (30) days prior to the Member Meeting at which Members are scheduled to elect Directors, the Nominating Committee shall:

Nominate at least one (1) individual to run for election for each Director position for which Members are scheduled to vote at the Member Meeting, which nominee may be, but is not required to be, the incumbent (“Nominating Committee Nominations”); and  Post the Nominating Committee Nominations at the Cooperative’s principal office and on the Cooperative’s website and publish the Nominating Committee Nominations in “Cooperative Living” magazine. The Cooperative may reasonably compensate or reimburse Nominating Committee members as determined by the Board.

B. Member Petition Nominations. Members may nominate additional individuals to run for election for any Director position for which Members are scheduled to vote at any Member meeting (“Member Petition Nominations”). Members may make Member Petition Nominations by delivering to the Secretary at least seventy-five (75) days prior to the Member meeting a writing for each Member Petition Nomination (“Member Petition”): Listing the name of the Member Petition Nominee; Indicating the Director position for which the Member Petition Nominee will run; and Containing the printed names, addresses, and original signatures, of at least 200 Members in good standing of the Members residing in the District from which the Member seeks election. After verifying that the Member Petition complies with this Bylaw, the Cooperative shall post the Member Petition Nomination in approximately the same location as the Nominating Committee Nominations.

C. Notice of Director Nominations. At least ten (10) days prior to any Member Meeting at which Members are scheduled to elect Directors, the Cooperative shall notify Members of the: Director positions for which Members are scheduled to vote; Names and corresponding Director positions of all Nominating Committee Nominations; and Names and corresponding Director positions of all Member Petition Nominations.

Nominations from the floor at the Annual Member Meeting are prohibited and shall not be entertained or recognized.

 

SECTION 4.5 – Director Elections

At the Annual Member Meeting, Members present in person or by proxy, shall annually elect Directors for which the incumbent Director’s Term is expiring. In any election for Director, each Member shall have the right to vote for the duly nominated candidate of his/her choice in person at the Annual Member Meeting or upon a proxy form prepared by or caused to be prepared by the Board of Directors and timely distributed to the Membership.

 

SECTION 4.6 – Director Terms

Prior to the 2020 Annual Meeting, each Director’s term (“Director Term”) is three (3) years, staggered by dividing the total number of authorized Directors into groups of approximately equal number and Members will annually elect an approximately equal number of Directors.

Decreasing the number of Directors or length of Director Terms may not shorten an incumbent Director’s Term without such Director’s written consent. Despite the expiration of a Director Term, the Director continues to serve until a new Director is elected, or until the number of Directors is decreased.

 

SECTION 4.7 – Director Resignation

A Director may resign at any time by delivering written notice of resignation to the Board, Chairman, or Secretary. Unless the written notice of resignation specifies a later effective date, a Director’s resignation is effective upon the Board, Chairman, or Secretary receiving the written notice of resignation. If a Director’s resignation is effective at a later date, and if the successor Director does not take office until the effective date of the Director’s resignation, then the pending Director vacancy may be filled before the effective date of the Director’s resignation.

 

SECTION 4.8 – Director Removal

A. A Director may be removed for cause by the affirmative vote of a majority of the Members.

B. “Cause” for removal shall mean that the Director is alleged to have committed an act or omission adversely affecting the business and affairs of the Cooperative and amounting to gross negligence, fraud or criminal conduct.

C. No Director shall be removed except upon certification that the following procedures have been followed:

  1. A written petition must be presented to the Board, which shall:

a. Describe in detail each of the charges and the basis therefor. If more than one (1) Director is sought to be removed, individual charges for removal shall be specified.

b. Be signed by a minimum of 10 percent (10%) of the Members of the Cooperative within sixty (60) days of the date of the petition.

  1. If the Board determines that the petition complies with paragraph (C)(1.), and only if the Secretary certifies the authenticity of the petition, a meeting of the Members shall be noticed in accordance with these Bylaws and shall be held within sixty (60) days after receipt by the Cooperative of the written petition.
  2. At such meeting, evidence must be presented in support of the charges. The Director shall be entitled to be represented by counsel and shall have the opportunity to refute such charges and present evidence in his or her defense before a vote of the Members is taken.

D. Any vacancy created by such removal may be filled by vote of the Members at such meeting without compliance with the foregoing provisions with respect to nominations.

E. Nothing contained herein, however, shall affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors.

 

SECTION 4.9 – Director Vacancy

Unless otherwise provided in these Bylaws:

A. The Board shall, by majority vote, fill any vacant Director position, including any vacant Director position resulting from increasing the number of Directors; and

B. Any Director elected by the Board to fill any vacant Director position shall serve until the next Annual Member Meeting, at which time the Members shall elect a new Director to fill the previously vacant Director position. If there remains any unexpired term for the vacated Director position, then such member-elected Director shall serve for a period equal to the remaining unexpired term. If the term for the vacated position would have expired at or prior to the Annual meeting at which such new Director is elected, then he or she will have been elected for a full Director Term.

An individual elected to fill a vacant Director position must comply with the Director Qualifications.

 

SECTION 4.10 – Director Compensation

As allowed by Law and the Articles, the Cooperative may reasonably reimburse, compensate, or provide benefits to, Directors. The Board shall determine the manner and method of any reasonable Director reimbursement, compensation, or benefits.

 

SECTION 4.11 – Close Relative

As used in these Bylaws, the term “Close Relative” means an individual who:

A. Is, either by blood, law, or marriage, including half, step, foster, and adoptive relations, a spouse, child, grandchild, parent, grandparent, or sibling; or

B. Principally resides in the same residence.

Any individual properly qualified and elected or appointed to any position does not become a Close Relative while serving in the position because of any marriage or legal action to which the individual was not a party.

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