The fundamental strength of cooperative organizations is the voting process. Through voting, all voices are heard. Member-owner votes help make important decisions that dictate the direction of the Co-op. The Annual Member Meeting facilitates space for member owners to exercise this right and responsibility.
This year we will be voting to elect council members to the board, modifications to the preferred stock clause in our bylaws and the release of additional preferred stock to provide more flexibility.
This year the following individuals have been nominated by the council for election:
- Corey Auger (current council chair)
- Viennie Chanthachack (current council member)
- Gian Facenda (current council member)
- Barbara Fleury (current council member)
- Jena Gaines (current council member)
- Carol Auer (new council member nominee)
- Marc Popkin (new council member nominee)
(Any member-owner may also be nominated for election to the council by membership through the submission of 25 signatures of member-owners supporting the person’s nomination by Monday, June 10 2019).
In addition to electing new council members, we’ll be voting on the following resolutions to allow the co-op to release additional preferred stock under the same terms as previously defined, in order to allow the co-op to raise additional capital this year to provide more financial security. This involves modifications to the Urban Greens bylaws describing our preferred stock, as well as a vote to amend the articles of incorporation and a vote to release additional preferred stock. The resolutions are to enable the Co-op to release an additional $1,000,000 in preferred stock, however at this time the offering will be for $600,000 (our goal will be to raise at least $300,000). The larger release of preferred stock helps provide Urban Greens additional future flexibility if needed.
RESOLVED: that the articles of incorporation of Urban Greens Food Co-op be amended by deleting Article V and inserting the following:
Article V. Capital Stock. The capital stock of the cooperative shall be divided into stock of the following classes and amounts: 500,000 shares of unrestricted, voting common stock at par value to be determined by the Council; and 20,000 shares of non-voting, non-convertible Series A Preferred Shares of stock at a price of $100 per share.
The current effective text of the articles of incorporation describing stock is:
“The capital stock of the cooperative shall be divided into stock of the following classes and amounts: 500,000 shares of unrestricted, voting common stock at par value to be determined by the Council; and 10,000 shares of non-voting, non-convertible Series A Preferred Shares of stock at a price of $100 per share.”
The amendment will add 10,000 shares of preferred stock that the cooperative can sell.
RESOLVED: That the first sentence of Section 8.1 of the Co-op’s bylaws be amended by deleting “10,000” and inserting “20,000” to designate the total number of preferred shares of the Co-op.
The current language of Section 8.1 is:
Section 8.1 – Preferred Stock Offering. The Co-op is offering up to 10,000 shares of non-voting, non-convertible Series A Preferred Shares of stock (the “Preferred Shares”) at a price of $100 Dollars per share (the “Purchase Price”). The minimum investment per investor is 20 shares ($2,000.00) and the suggested minimum investment per accredited investor is 50 shares ($5,000.00). There will be no variation in the kind and amount of securities to be offered, the price, or the method by which it is to be computed. The purchase price may only be paid in cash.
The amendment will change the number in the first sentence from 10,000 to 20,000.
RESOLVED: That the third and fourth full sentences of Section 8.2 of the Co-op’s bylaws shall be deleted.
The strike-outs below show what this amendment will delete. This is necessary because the language to be struck only works for the first capital-raise. It is not correct for second raise. It is not necessary because the targets are explained in the offering documents, and the language proposed to be struck only talks about targets, it is not binding. With these two sentences deleted, the rest of Section 8.2 will continue to work.
This is the language of current Section 8.2, with strike-outs added to show the change:
Section 8.2 – Dividend Rights. Dividends shall be payable to holders of the Preferred Shares (“Preferred Holders”) when, as, and if declared by the Council. Annual dividends are guaranteed at two percent per year and are cumulative. The Co-op expects to begin paying cumulative dividends in 2019, approximately three years after conclusion of this offering. Beginning in 2022, approximately six years after conclusion of this offering, the Co-op expects to begin declaring target (non-guaranteed) dividends of approximately four percent per year. Determination of whether target dividend payments, above the guaranteed dividend payments, will be made by the Council, in their sole discretion. Preferred shareholders are not entitled to participation rights or to distributions paid to Members. Dividends, if declared, will be paid within 60 days from the end of the calendar year.
RESOLVED: that the Co-op shall offer its Series A Preferred Shares in order to raise capital, as contemplated by its Offering Memorandum, attached as Exhibit A to this resolution, consistent with all contracts relating to this offering, and in compliance with applicable federal and state securities laws and regulations.
RESOLVED FURTHER, that the Co-op’s officers are authorized and directed to do all things necessary or appropriate to apply for and receive a permit to offer the Series A Preferred Shares and to offer and sell the Shares.