BYLAWS OF SPROUT URBAN FARMS CO.

INCORPORATED IN THE STATE OF ARKANSAS


ARTICLE I – NAME AND PURPOSE

Section 1 – Name: The name of the organization shall be Sprout Urban Farms Co., Inc. It shall be a cooperative incorporated under the laws of the State of Arkansas. 

Section 2 – Purpose: Sprout Urban Farms Co., Inc. (the Cooperative) is organized exclusively for promoting local food production and holistic nutrition. The purpose of this corporation is: to provide greater access to and production of sustainable local foods, and to promote community ownership and participation in the production of local food, and any other lawful purpose.

Section 3 –  Principles: There will be Membership in the Cooperative, which is voluntary and open to the surrounding community and the State of Arkansas. Sprout Urban Farms Co., Inc. shall be owned and controlled by its Members, and the Cooperative shall be self-governed by its members. The Cooperative shall maintain all of its operations with an eye towards its members’ needs, and a desire to develop sustainable development of its community and the surrounding communities of the State of Arkansas. Where possible, the Cooperative shall provide education and training for its members and representatives, so they can effectively contribute to the Cooperative and their own operations. The Cooperative shall work with and assist any other entities, including other cooperatives. However, in doing so, it will retain its independence from outside entities. 


ARTICLE II – MEMBERSHIP

Section 1 – Eligibility for Membership: Membership is limited to individuals 18 years of age or older. Membership is contingent upon the payment of a fee, known as the monthly member fee. This is to be paid on a monthly basis to the Cooperative, through the FareMarket or Sprout Urban Farms Co., Inc. website. The monthly fee may be changed by a two-thirds vote of the Board of Directors. There is no voting process to become a member. 

Section 2 – Equity: The membership of the Cooperative shall not hold equity in the Cooperative by virtue of membership alone. 

Section 3 – Classes of Membership: There shall be one class of membership in the Cooperative. No other classes of members shall be created unless approved by the then-existing classes of members, in accordance with the Articles of Incorporation and these Bylaws. 

Section 4 – Rights of Members: Each member is entitled to equal participation in the democratic processes of the Cooperative, as defined in these bylaws and the policies of the Cooperative. Members that hold voting rights may cast one vote in decisions of the membership and at General Membership Meetings. 

For their membership, members will receive a reduced cost of the goods that are purchased through FareMarket, LLC. Members will also receive a free membership with FareMarket, LLC. Members will not receive dividends from the Cooperative. 

Section 5 – Initial Contributions by Owners: The capital of the Cooperative shall be contributed by the owners. The cash contributions shall be: 

Members: $


Section 6 – Additional Contributions by Owners: If the Cooperative cannot meet its operating expenses, the owners will make additional capital contributions to meet such expenses determined by a vote of more than 50% of the members. Each owner will contribute a share of such required expenses as necessary in an amount not to exceed the share of profits of Sprout Urban Farms Co., to which the member is entitled under this agreement. If any member fails to make any additional capital contribution to FareMarket, LLC as authorized by this Clause, on its due date, the remaining members may, on behalf of Sprout Urban Farms Co., send the member written notice of nonpayment. The notice must state the unpaid amount and request that it be paid not less than the number of days established by a vote of more than fifty (50) percent of members, after the notice is sent. If the contribution remains unpaid at the end of the additional period stated in such notice, then the other members have the option, but not the obligation, to advance the unpaid sum to FareMarket, LLC for the benefit of their own capital accounts.

Section 7 – Failure to Meet Additional Contributions: If an owner fails to meet the expected additional contributions, the member shall be removed from the Cooperative by a five-eights (5/8) vote of the owners.

Section 8 – Rights of Owners: Each owner is entitled to equal participation in the democratic processes of the Cooperative, as defined in these bylaws and the policies of the Cooperative. 

Upon written demand, any owner who shall have been a member of record for at least six (6) months immediately preceding his or her demand shall, upon written demand therefore, be furnished a full itemized accounting of all expenditures of the funds of the Cooperative and shall have the right to examine, in person or by agent or attorney, at any reasonable time, for any proper purpose, its books and records of account, minutes, and record of shareholders and to make extracts therefrom. Upon the written request of any member, the Cooperative shall deliver to the owner its most recent financial statements showing in reasonable detail its assets and liabilities and the results of its operations. 

Section 9 - New Owners: The Cooperative will not accept any new owners of the company unless it is unanimously consented to by the members of the Cooperative.

Section 10 – Responsibilities: Members must comply with all policies and rules of the Cooperative. Members must remain current on all financial and contractual obligations to the Cooperative, including service requirements and attendance of meetings as may be required by policy. If the attendance requirement is not met for one (1) consecutive year, the members voting privileges will be terminated. After termination of the voting privileges, the member may receive the privilege again by a two-thirds vote of the members present at any meeting. Members will also be required to notify Sprout Urban Farms Co. Inc. of changes in address or name. Memberships are not transferable or divisible. 

Section 11 – Termination of Membership: An individual’s membership may be terminated in the following ways: 

  • Voluntarily by written notice from the member to Sprout Urban Farms Co, Inc.; or
  • Automatically when a member becomes delinquent in the payment of [monthly/annual] fees to the extent determined by the Board of Directors.

Section 12 – Non-voting Membership: The board shall have the authority to establish and define non-voting categories of membership. 


ARTICLE III – CAPITAL STOCK AND DISTRIBUTION OF PROCEEDS

[THE FOLLOWING NEEDS TO BE AGREED UPON BY OWNERS]

Section 1 – Classes of Stock: There shall be one class of stock in the Cooperative, known as the Class A common stock. This stock shall be that which is required solely for the purpose of ownership. 

Section 2 – Limitation on Membership Stock: No person shall be allowed to own or to have an interest in more than one (1) share of Class A common stock. 

Section 3 – Capital Requirement: The Cooperative shall not commence business until at least twenty percent (20%) of its capital stock has been paid for in actual cash and a sworn statement to that effect has been filed with the Arkansas Secretary of State, and his receipt for the statement shall be construed as a permit to do business. 

Section 4 – Distribution Upon Termination of Ownership: The individual owner, who has their ownership terminated by the Cooperative or their own volition, will not receive any compensation from Sprout Urban Farms Co., Inc. 

Section 5 – Transfer of Capital Stock: The common stock of the Cooperative may not be sold or transferred. The Board is authorized to make further rules and regulations concerning the transfer of shares of common stock of the Cooperative as it deems necessary to comply with applicable state and federal securities laws. 

Section 6 – Distribution of Proceeds: The total proceeds of the Cooperative shall be distributed back into the Cooperative and to any other businesses the relevant community desires to build into the Sprout Urban Farms Co., Inc. model. No distributions will be made to members of the Cooperative. The membership of the Cooperative is authorized to revise and make additional rules by a two-thirds (2/3) majority vote. 


ARTICLE IV – MEETINGS OF MEMBERS

Section 1 – Regular Meetings: Regular meetings of the members shall be held [monthly/annually] at a time designated by the directors. The meetings should occur at the Cooperative’s place of business. At the monthly meetings the members shall receive reports on the activities of the Cooperative and deliberate on any business matters brought before the meeting. There will also be an annual meeting, at a time and place designated by the directors. At the annual meeting of the members, members shall elect directors and officers. 

Section 2 – Special Meetings: A petition signed by fifty-one (51) percent of voting members may call a special meeting. The time and location of said meeting shall be designated by the petition. 

Section 3 – Notice of Meetings: Notice of each meeting shall be given in writing to each member (via mail, email, or text, or any other method chosen by the Board) seven (7) days in advance. 

Section 4 – Quorum: At least sixty-five (65) percent of the membership present at any properly announced meeting shall constitute a quorum. At least sixty-five (65) percent of the membership present at any special meeting shall constitute a quorum. “Present” includes proxy votes or attendance by electronic means. 

Section 5 – Voting: All issues to be voted on shall be decided by a two-thirds (2/3) majority of those present at the meeting in which the vote takes place. 

Section 6 – Removal: The members shall have the power at any regular or special members’ meeting, legally called, to remove any director or officer for cause or without cause, by a two-thirds (2/3) majority vote, and fill the vacancy by a two-thirds (2/3) majority vote, thereupon the director so removed shall cease to be a director of the association. 


ARTICLE V – MEETINGS OF OWNERS

Section 1 – Regular Meetings: Regular meetings of the owners shall be held [MONTHLY/ANNUALLY] at a time designated by the directors. The meetings should occur at the Cooperative’s place of business. At the monthly meetings the members shall receive reports on the activities of the Cooperative and deliberate on any business matters brought before the meeting. There will also be an annual meeting, at a time and place designated by the chair. At the annual meeting of the members, members shall elect directors and officers. 

Section 2 – Special Meetings: A petition signed by twenty-five (25) percent of voting members may call a special meeting. The time and location of said meeting shall be designated by the petition. 

Section 3 – Notice of Meetings: Notice of each meeting shall be given in writing to each member (via mail, email, or text, or any other method chosen by the Board) seven (7) days in advance. 

Section 4 – Quorum: At least twenty-five (25) percent of the membership present at any properly announced meeting shall constitute a quorum. “Present” includes proxy votes or attendance by electronic means. 

Section 5 – Voting: All issues to be voted on shall be decided by a two-thirds (2/3) majority of those present at the meeting in which the vote takes place. 

Section 6 – Removal: The members shall have the power at any regular or special members’ meeting, legally called, to remove any director or officer for cause or without cause, by a two-thirds (2/3) majority vote, and fill the vacancy by a two-thirds (2/3) majority vote, thereupon the director so removed shall cease to be a director of the association. 


ARTICLE VI – BOARD OF DIRECTORS

Section 1 – Board Composition: The Board of Directors shall be comprised of five (5) individuals that are within twenty (20) miles of Sprout Urban Farms Co., Inc. place of business, or the individual is within twenty (20) miles of any operation being done by Sprout Urban Farms Co., Inc. [INDICATE WHETHER YOU WANT THE BOARD TO BE OWNERS] 

Section 2 – Terms: All board members shall serve one (1) year terms but are eligible for re-election or re-appointment indefinitely. Elections shall be held on an annual basis. 

Section 3 – Meetings and Notice: The Board of Directors shall hold monthly meetings at Sprout Urban Farms Co., Inc. place of business. Notice of the meeting shall be given in writing (via mail, email, or text, or any other method chosen by the Board) seven (7) days in advance.

Section 4 – Board Elections: Prospective board members shall be nominated by current board members or members of the assembly, and voted on by the members. To be elected as a board member, the candidate must receive a vote of more than fifty percent (50%+1). (If Benefit Corp)

or 

Section 4 – Board Elections: The board members shall be elected by the members of Sprout Urban Farms Co., Inc. To be elected, an individual must receive a vote of more than fifty percent (50%+1). (If Cooperative)

Section 5 – Quorum: A quorum shall consist of no less than three (3) of the sitting board members.  

Section 6 – Rights of the Board: The Board of Directors shall have the rights delegated to them by the membership of the Cooperative, as well as the following rights, the Board may: 

  • Transact in the Cooperative’s name, if the amount is under $5,000;
  • Purchase Property, if the amount is under $5,000; 
  • Invest in the purchasing of equipment and supplies necessary for production, if the amount is under $5,000; and
  • Purchase equipment and supplies for daily business operations, if the amount is under $5,000. 

To utilize such a right, the Director will need to obtain a simple majority vote of the remaining Directors. The membership of the Cooperative may vote to amend these rights at any meeting by obtaining a two-thirds (2/3) majority vote. 

Section 7 – Officers and Duties: The Board of Directors may appoint specific officers for the Cooperative to direct the day-to-day operations. These officers shall be consisting of a President, Vice President, Secretary, and Treasurer. The Board of Directors may appoint additional officers at their discretion. These officers will not receive compensation or be reimbursed for services delivered to the Cooperative. The duties of these officers are as follows: 

  • The President shall convene regularly scheduled board meetings, and shall facilitate or arrange for another member to facilitate the meeting. 
  • The Vice President shall serve as the President in the President’s absence. 
  • The Secretary shall be responsible for keeping records of board actions, including overseeing the taking of minutes at all board meetings, sending out meeting announcements, distributing copies of minutes and the agenda to each board member, and assuring that corporate records are maintained. 
  • The Treasurer shall make a report at each board meeting. The Treasurer shall chair the finance committee, assist in the preparation of the budget, help develop plans, and make financial information available to board members and the public. 

Section 8 – Resignation, Termination, and Absences: Resigning members shall provide a written resignation and an address to which the Cooperative may send confirmation of their resignation. A board member shall be terminated from the board due to excess absences, more than two unexcused absences from board meetings in a term. A board member may be removed for other reasons by a majority vote of the remaining directors. A board member may also be removed by a two-thirds (2/3) majority vote of the members subject to section IV.6. 

Section 9 – Vacancies: Vacant positions on the Board shall be filled by either a nomination from the current members of the board or a nomination from voting members. To be nominated by the board, a candidate must receive a simple majority vote in support of the nomination. To be nominated by the members, a candidate must receive a majority vote in support of the nomination. A vote of two-thirds (2/3) majority will determine who shall fill the vacancy. The term of a board member elected in order to fill a vacancy shall expire at the same time as the other board members.

Section 10 – Special Meetings: Special meetings may be called by a simple majority of the Board of Directors. 

Section 11 – Compensation: The Board of Directors and Appointed Officers shall not be compensated for their services. 


ARTICLE VII – MANAGEMENT

Section 1 – Management: The management of the Cooperative shall be vested in a full-time Manager designated by a two-thirds (2/3) majority vote of its Class A Members. The decision of the Manager shall be controlling on matters set out in the Management Responsibilities Document and, unless otherwise expressly provided in this Agreement, shall be required for any decision, determination, consent, or approval of Members under this Agreement. The Manager is hereby granted all rights, powers, authority, and authorization necessary, appropriate, advisable and/or convenient to manage the Cooperative and determine and carry out its affairs. 

Section 2 – Removal: The members shall have the power at any regular or special members’ meeting, legally called, to remove any manager for cause or without cause, by a two-thirds (2/3) majority vote, and fill the vacancy by a two-thirds (2/3) majority vote, thereupon the manager so removed shall cease to be a manager of the association. 

Section 3 – Board Members: The [MEMBER/OWNERS] can elect Board Members to perform such duties and have such powers as may from time to time be assigned to them by the Class A Members, as described in section V.4. 

Section 4 – Employees: Managers may hire Employees, by a two-thirds (2/3) majority vote. 


ARTICLE VIII – COMMITTEES

Section 1 – Committee Formation: The Board of Directors may create committees as needed. Such committees shall have no powers or authorities other than those rightfully granted by the Board or these Bylaws. Each committee shall be at-will, and composed of members of the Cooperative. Each committee shall elect a chair, who shall provide regular reports on the activities of the committee to the Board. At least one Board Member shall serve on each committee. 

Section 2 – Executive Committee: When applicable, the five officers will serve as the members of the Executive Committee. Except for the power to amend the Articles of Incorporation and Bylaws, the Executive Committee shall have all the powers and authority of the Board of Directors in the intervals between meetings of the Board of Directors and is subject to the direction and control of the full board. 


ARTICLE IX – FINANCIAL PRACTICES

Section 1 – Fiscal Year: The fiscal year shall be the calendar year. 

Section 2 – Financial Records: The financial records of the organization, including any audits by third parties, shall be made available to the membership and board members upon request. 


ARTICLE X – DISSOLUTION

Section 1 – Vote to Dissolve: The Cooperative may be dissolved by a unanimous vote of the Owners. 

Section 2 – Other Means of Dissolution: The Cooperative may also be dissolved if the Cooperative declares bankruptcy or the Cooperative becomes involved in serious criminal matters. Serious criminal matters will be defined by the members of the Cooperative. This will require a simple majority vote of the membership.  

Section 3 – Distribution After Dissolution: In the event of dissolution, the net assets of the Cooperative shall be distributed to the remaining members in proportion to their ownership share. 


ARTICLE XI – DECISIONS WHICH REQUIRE VOTING

Section 1 – Amendments: These Bylaws and the Articles of Incorporation of the Cooperative may be amended when necessary by a two-thirds (2/3) majority vote of members at a membership meeting. 

Section 2 – Dissolution and Merger: Members may also vote to dissolve or merge the Cooperative with another entity by a two-thirds (2/3) majority vote of members at a membership meeting. 


ARTICLE XII – MISCELLANEOUS

Section 1 – Benefit Director: Benjamin Harrison will serve as the initial Benefit Director for Sprout Urban Farms Co., Inc. 

Section 2 – Reports: Sprout Urban Farms Co., Inc. shall make an annual report to the Arkansas Secretary of State of all its stockholders and the amount of stock owned by each for the year. Initially, Benjamin Harrison will be responsible for maintaining these reports, unless a five-eighths (5/8) vote of the membership dictates otherwise. 

Section 3 – Records: Corporate records will be kept at the Cooperative’s place of business. These records will also be stored digitally. The records to be stored shall include these bylaws, the Articles of Incorporation, financial reports, tax reports, and membership lists. These records will be provided to the membership on a quarterly basis. If a member wants to inspect the records at a different time, the member must give seven (7) days notice to the Record Holder, before the member will be allowed to inspect the records. 

Section 4 – Working Outside of the Cooperative: Employees and the Board of Directors shall not work with entities that would be deemed as competitors to Sprout Urban Farms Co., Inc. 

Section 5 – Ownership in Other Corporations: Sprout Urban Farms Co., Inc. may form, operate, control, have an interest in, own stock of, or be a member of any corporation or association with or without capital stock. 

Section 6 – Debt Liability: Except for debts lawfully contracted between him or her and the association, no owner shall be liable for the debts of the Cooperative to an amount exceeding the capital stock purchased, including any unpaid balance on any promissory notes given in payment thereof. Members shall not accrue any liability for the acts of the Cooperative. 

Section 7 – Tort Liability: The Cooperative shall be liable and subject to being sued in the Courts of Arkansas for its torts resulting from the negligent acts of its agents, servants, and employees committed in the scope of their employment for the Cooperative.