1. NAME. The name of the corporation is Worker-Owned Restaurant Corporation, dba Casa Nueva (hereinafter referred to as the “corporation”).
2. REGISTERED OFFICE. The address of the registered office of the corporation is 4 West State Street, Athens, Ohio, 45701.
3. FISCAL YEAR. The fiscal year of the corporation shall end on the last day in December of each year.
4. EXECUTIVE OF INSTRUMENTS. All deeds, leases, transfers, contracts, bonds, notes and other obligations authorized to be executed on behalf of the corporation shall be signed by the President or the Treasurer except as the directors may other wise determine.
5. CORPORATE RECORDS. Copies of the following documents shall be kept at the principal office of the corporation: a) the Articles of Incorporation and By-laws, b) records of all meetings of incorporators, directors, and members and c) the stock and transfer records containing the names of all members and the record address and the stock held by each. These records shall be available to members for inspection at reasonable times and for the purposes consistent with good faith exercise of membership rights and responsibilities in corporate affairs.
6. ARTICLES OF INCORPORATION. The Articles of Incorporation are hereby made a part of these By-laws, and the purpose of the corporation shall be set forth in the Articles of Incorporation. In the event of any inconsistency between the Articles of Incorporation and these By-laws, the provisions of the Articles of Incorporation shall be controlling. All references in these By-laws, to the Articles or Articles of Incorporation shall be construed to mean the Articles of Incorporation of the corporation as amended from time to time.
Membership and Membership Shares
1. MEMBERSHIP ORGANIZATION. The corporation will operate on a cooperative basis, with earnings and losses allocated on the basis of patronage in accordance with Article III and with decision making by the members in accordance with Article IV and Article VII.
2. ELIGIBILITY. Membership shall be limited to natural persons who: 1) patronize the corporation through contributions of their labor on a full-time or part-time basis, 2) have been approved by the Board of Directors or their designees, and 3) have paid or agreed to pay a membership fee in the amount determined by the Board of Directors. The Board and its designees will adhere to the Federal Equal Employment Opportunity Employer language.
3. MEMBERSHIP SHARES AND MEMBERSHIP FEE. The corporation has a single class of common voting stock, hereinafter referred to as “membership shares.” Each member shall own one and only one membership share, and only members may own such shares. The cost of a membership share shall be determined by the Board of Directors and shall be designated as the “membership fee”. Existing members shall have no preemptive rights to membership shares issued to new members. No capital stock other than membership shares shall be given voting power, except as otherwise provided by law.
4. TRANSFER RESTRICITONS. No membership share or interest therein may be sold, assigned or otherwise transferred, voluntarily or involuntarily, by operation of law or otherwise, except for a transfer to the corporation.
5. MEMBERSHIP TERMINATION. Upon voluntary or involuntary termination of a member’s employment by the corporation, except for temporary lay-offs or absences, his or her membership shall be terminated and the membership share shall be redeemed by the corporation for consideration determined in accordance with Article III. No member may be terminated involuntarily without written notice and a right to hearing before a body designated in the Operating Rules.
6. CERTIFICATES FOR MEMBERSHIP SHARES. Each member is entitled to a certificate representing his or her membership share in such form as prescribed by the Board of Directors. The certificate shall be signed by the President and by the Treasurer when it is issued. Each membership share shall set forth conspicuously on the face or back of the certificate: a) the full text of the restrictions prescribed in section 4, or b) a statement of the existence of such restrictions and a statement that the corporation will furnish a copy of such restrictions to the holder of such certificate upon written request and without charge. In case of loss, destruction or mutilation of a membership certificate, a duplicate certificate may be issued in its place, upon such terms as the Board of Directors may prescribe.
The Internal Capital Account
1. THE INTERNAL CAPITAL ACCOUNTS. The corporation shall have a system of internal capital accounts to reflect its net worth, and to reflect the allocation of the net worth among the members. The following definitions shall apply to terms in this Article III:
-The net worth is the difference between the assets and liabilities on the corporate books (kept according to the Generally Accepted Accounting Principles).
-The internal capital accounts consist of the individual capital accounts and the collective account. The sum of the (net credit) balances in the internal capital accounts is the net worth of the corporation.
-An individual capital account is maintained for each member, and it records the part of the net worth ultimately to be returned to each member.
-The collective account is the unindividualized portion of the net worth that is not to be returned to the individual members during the lifetime of the corporation.
-The accounting net income is the book net income for the fiscal year computed in accordance with the Generally Accepted Accounting Principles (GAAP). The accounting net income, positive or negative, is divided into the collective net income and the individual net income.
-The individual net income is sixty percent of the accounting net income. It is that part which will immediately or ultimately be allocated to the individual members as interest on the individual capital accounts or as patronage allocations.
-The collective net income is forty percent of the accounting net income. It is that part which will only affect the collective account. The collective net income minus the corporate taxes equals the self-insurance allocation.
-The corporate taxes to be subtracted from the collective net income are all those taxes including the Federal corporate income tax which have
not been treated as an expense in determining the accounting net income.
-The self insurance allocation is the collective net income minus the corporate taxes, and it is allocated to the collective account.
-The labor patronage of a member is the total number of hours worked for the corporation during the fiscal year (regardless of the rate of pay). The members’ patronage is the total number of hours worked by members during the fiscal year. The total patronage is the sum of the members’ patronage.
-The patronage dividend is the positive amount of net income that is allocated to members in proportion to patronage as described in Section 1381 of the Internal Revenue Code of 1954 as amended (hereinafter referred to as the IRC). It can take the form of non-qualified patronage
dividends (as defined in section 1388(d) of the IRC). A non-qualified or a qualified written notice of allocation is the certificate issued to each
member specifying the amount of the respective non-qualified patronage dividend allocated to the member and retained in the corporation.
-The negative patronage allocation is the negative amount allocated to the individual capital account of the members in proportion to their current labor patronage. A negative patronage allocation may result from current losses or from an allocation to the individual capital accounts from the start-up losses account.
-The patronage calculations and allocations for a fiscal year are to be completed within the payment period for the fiscal year which is defined as eight and one-half months after the end of the fiscal year.
-The individual capital account statement is an accounting statement issued to each member during the payment period for a fiscal year which details all the changes in the member’s individual capital account for that fiscal year.
-The capital contributions to the internal accounts include the membership fee and any additional paid-in capital in excess of the membership fee.
-The membership fee is the cost of a membership share.
-A redemption of a written notice of allocation is a distribution of the amount of the notice in cash or other property to the member ordinarily a fixed number of years after the issuance of the notice.
-The termination distribution refers to the distribution of cash and/or notes of the indebtedness to an ex-member or an ex-member estate which is triggered by termination or retirement and which is not a payment in redemption of a written notice of allocation.
-The dissolution distribution refers to a distribution, if any, of cash or other property to members and ex-members following the sale, liquidation or dissolution of the corporation.
2. Net Income. The accounting net income of the corporation shall be allocated among the internal capital accounts in accordance with these by-laws.
2A. Interest on Individual Capital Accounts. The individual capital accounts shall accrue interest at an annual rate of 5% compounded annually. The interest which accrues on the individual capital accounts for a fiscal year is subtracted from the individual net income to yield net income allocated according to patronage.
2B. Patronage Allocations-General. In accordance with the law, patronage dividends shall not be declared on non-member patronage, nor shall they exceed the accounting net income.
2B1. Positive Patronage Allocations. If the individual net income, minus the interest accrued during the fiscal year on the individual capital accounts is positive, then the corporation shall declare that patronage net income as a patronage dividend in accordance with section 1381 of the IRC. The patronage dividend is the allocated amount to the members in proportion to their patronage. Each member receives a fraction of the total patronage equal to the ratio of his of her member patronage to the total members’ patronage for the fiscal year.
2B1a. Written Notices of Allocations. In any proportions determined by the Board of Directors, the patronage dividend may be paid in cash, in non-qualified written notices of allocation, and/or in qualified written notices of allocation. During the payment period for the fiscal year, the corporation shall deliver to each member the cash patronage dividend and/or the written notices of allocation showing the amount of any patronage dividend for that fiscal year retained in the corporation and credited to his or her individual capital account. Unless approved by the BOD, the written notices of allocation shall be non-transferable. In the absence of such BOD approval, any transfer of allocation notices, whether voluntary or involuntary, shall be of no effect against the corporation and shall not entitle the transferee to receive payment from the corporation.
2B1b. Written Notices and Individual Accounts. The amount of patronage dividends paid to a member in non-qualified or qualified written notices of allocation shall be credited to the member’s individual capital account. When allocation notices are redeemed or canceled, the member’s
individual capital account shall be accordingly debited. The net income treated as retained patronage dividends credited to the members’ accounts may be used for any and all corporate purposes.
2B1c. Qualified Written Notices of Allocation. By becoming a member of the corporation, each member shall be deemed to have consented to include his or her taxable income any qualified written notices of allocation (within the meaning of section 1388 of the IRC), received by him or her at its stated dollar amount, in the manner provided by section 1385 of the IRC, and to pay the tax thereon. In accordance with section 1388c of the IRC at least twenty percent of each member’s patronage dividend to be paid in cash and qualified written notices of allocation must be paid in cash.
2B2. Negative Patronage Allocations-General. The individual capital account of each member shall be debited with the fraction of the total negative patronage allocation equal to the ratio of his of her members’ patronage for the fiscal year. If a negative patronage allocation is applied against a portion of an individual capital account represented by a written notice of allocation, the amount of the written notice is accordingly reduced to zero.
2B3. Individual Capital Account Statements. During the payment period for a fiscal year and after all internal individual capital account changes which relate to that fiscal year, each member shall be issued an individual capital account statement. This statement shall include the previous balance in the member’s account, the accrued interest, the positive and/or negative patronage allocations to the account, the redemptions or distributions from the account and the resulting current balance in the member’s account. If all or part of any written notices of allocation were canceled by any negative patronage allocations to the account, then the account statement shall specify the notices and amounts canceled.
2C. Collective Net Income-General. Forty percent of the accounting net income (positive or negative) is the collective net income. The collective net income minus the applicable corporate income taxes yields the self-insurance allocation to the collective account.
2C1. Federal Income Tax. As described in Subchapter T of the IRC, this corporation, as a corporation operating on a cooperative basis, shall deduct from taxable income: (a) any amount paid during the payment period for the taxable year (eight and one-half months after the end of the fiscal year) as patronage dividends paid in cash, qualified written notices of allocation, or other property (except non-qualified written notices of allocation), and (b) any amounts paid in redemption of non-qualified written notices of allocation. Otherwise, the Federal corporate income tax shall be computed as in a corporation not operating on a cooperative basis.
2C2. The Self-Insurance Allocation. Positive self-insurance allocations shall be credited to the collective account. The net income credited to the collective account may be used for any and all corporate purposes. Negative self-insurance allocations shall be debited from the collective
Capital Contributions and Distributions
3A. Member Fee. Each member shall pay the corporation in cash or other property an initial membership fee, with the amount determined from time to time by Membership. The membership fee shall be credited to the member’s individual capital account. Any additional capital paid in by a member in excess of the membership fee shall be credited to the member’s individual capital account.
3B. Redemption of Written Notices of Allocation. All written notices of allocation credited to a member’s capital account shall be redeemed in cash within four years of their date of issuance unless the BOD determines that a postponement or acceleration of the redemption is appropriate.
The internal capital account credits, evidenced by written notices of allocation, shall be paid off in order of their dates of issuance, the oldest allocation notices first, except that the Board may give first priority to the estates of deceased ex-members. In determining the oldest notices, all allocation notices of the same fiscal year shall have the same priority. If any payment is not sufficient to cover all redeemable notices, a proportionate part of the dollar amount of all the redeemable notices shall be paid. When a member’s allocation notice is paid off, the member’s internal capital account shall be accordingly debited.
3C. Termination Distributions. Upon voluntary or involuntary termination of a member’s work in the corporation (excluding temporary layoffs), his or her membership share shall automatically be deemed to have been transferred to the corporation in return for the consideration specified in this paragraph, and the membership share shall be returned to the corporation. The account balance in the terminating person’s internal capital account shall be fixed after the adjustments at the end of that fiscal year and the account shall be closed to any further patronage allocations. The written notices of allocation represented in the account, plus any otherwise unpaid interest, shall be redeemed in accordance with Section
3B. After the year-end adjustments, if the portion of the account not represented by written notices of allocation has a positive balance, then that balance shall share in some combination of cash and promissory notes the BOD shall deem appropriate. The promissory notes issued, if any, shall be payable in full within four years of being issued and shall have other such terms as the BOD shall deem appropriate.
After the year-end adjustments, if there is no balance in the person’s individual capital account, which is not represented by written notices, then the membership share shall be returned to the corporation for no consideration.
3D. Dissolution Distributions. On the sale of all the assets, liquidation or dissolution of the corporation, any residual assets left after the payment of all debts and individual capital accounts shall be distributed in proportion to patronage to all previous and current members, or their heirs; except that no distribution need be made to any person who fails to acknowledge, in a timely manner, receipt of notice of liquidation. It shall be deemed sufficient notice to a current or former member to send notice of liquidation by certified mail, at least 30 days before distribution of any residual assets, to the person’s last known business or residence address. Any amounts unclaimed after sufficient notice shall be distributed in proportion to patronage to all previous and current members who acknowledge receipt of notice of liquidation.
1. Annual Meeting. The annual meeting of the members shall be held on the last Monday of May. The location of the annual meeting shall be fixed by the BOD or by the President. The annual meeting shall be held for the purpose of electing the BOD, and for any other lawful purpose that are: (1) prescribed by law, by the Articles of Incorporation, or by these By-Laws, or (2) specified by the President or the directors or at least 25% of the members. If the annual meeting is omitted on the day specified herein, a special meeting may be held in its place and any business transacted shall have the same effect as if transacted at the annual meeting.
2. Regular Meetings. Regular meetings of the members shall be held at such places and at such times as the President or a majority of the members may from time to time determine, provided that each member shall be given notice of the determination.
3. Special Meetings. The BOD or the President may call special meetings of the members at any time. Upon written application of 25% of the members, an officer shall call a special meeting. Special meetings may be called for any lawful purpose.
4. Notice of Meetings. A written notice of each annual , regular, or special membership meeting stating the time, place and purpose shall be given by the secretary or by the officer calling the meeting, at least four days before the meeting, to each member either: (1) in person, (2) by leaving a notice at the member’s residence or usual workplace, or (3) by mailing it to the member’s address as shown on the records of the corporation. Notice need not be given to a member if a written waiver of notices, executed before or after the meeting by such member, is filed with the records of the meeting. Each member shall notify the corporation of his or her current mailing address.
5. Quorum. A majority of the members at the time of the meeting shall be required to constitute a quorum at any membership meeting.
6. Voting. Each member of the record at the time of the meeting is entitled to one and only one vote on any matter requiring membership voting. Decision-making will be accomplished according to guidelines in Article VII.
7. Action at a Meeting. The President, Chairperson or other designee, as determined by the BOD, shall preside at membership meetings. When a quorum is present at a membership meeting, 51% of the members present and entitled to vote shall decide any matter to be voted upon by the members, unless a larger vote is required by law or the Articles or these By-laws. A secret ballot is required if requested by 25% of membership present at the meeting. The corporation shall not, directly or indirectly vote any share of its stock.
8. Action without Meeting. Any action to be taken by the members may be taken without a meeting if all members entitled to vote on the matter consent to the action in writing. Such written consent shall be filed with the records of the meetings of members, and shall be treated for all purposes as a vote at a meeting.
The Board of Directors
1. Powers. The Board may exercise all the powers of the corporation, including the power to issue stock, except as otherwise provided by law, by the Articles or by these By-laws. In the event of a vacancy on the Board, the remaining Board members may exercise the powers of the full Board until the vacancy is filled except as otherwise provided by law.
2. Election and Size. The number of Board members shall be seven. Board members shall be members/shareholders of the corporation. Membership shall elect Board members at the annual meeting on the last Monday of every May, or at a special member meeting held in its place. Board members shall serve one-year terms, and may be re-elected. Three Coordinators may be elected to the voting BOD as non-executive officers, unless the number of non-Coordinator Members dictates the need to put Coordinators into executive positions. The Coordinator team will serve as non-voting members of the Board.
3. Orientation Requirements. Newly elected Board of Directors members will commence their voting rights within a minimum time frame of two weeks and within a maximum time frame of one month following their election in May. The out-going Board of Director members will retain their voting responsibilities within the interim of either a minimum time frame of two weeks and a maximum time frame of one month. A competency standard consisting of an orientation training of 15 hours as described within the Governance Policies of the Casa Nueva Handbook will be fulfilled within the first quarter of a newly elected Board of Directors term. An indeterminate amount of intensive orientation training as described within the Governance Policies of the handbook for all new Board of Directors will be fulfilled within a minimum time frame of two weeks and a maximum time frame of one month.
4. Vacancies. Any vacancy in the Board, occurring between the annual membership meetings, may be filled at a special meeting of the members or at a regular membership meeting. Members elected to a vacated Board seat will serve only the remainder of the one-year term they are filling, and then be eligible for re-election at the annual meeting.
5. Enlargement of the Board. The number constituting the Board may be increased and one or more additional Board members elected at the annual meeting or any special or regular meeting of the members.
6. Tenure. Except as otherwise provided by law, by the Articles or by these By-laws, Board members shall hold office until their successors are elected. Any Board member may resign by delivering his or her written resignation to any officer or to a meeting of the Board, effective upon receipt, or at some later time specified. No Board member resigning or removed shall have any right to compensation as such Board member for any period following his or her resignation or removal or any right to damages on account of such removal, unless provided by a written agreement or by a resolution of the remaining Board members.
7. Removal. A Board member may at any time be removed from office (1) with or without cause by a vote of the majority of the members or (2) for cause by a majority of the Board members then in office. A Board member may be removed for cause only after reasonable notice and opportunity to be heard before the body proposing to remove the Board member.
8. Meetings. Regular meetings of the Board may be held at such places and times as the Board may from time to time determine. Special meetings of the Board may be called at anytime by the President or by the Secretary at the request of three or more of the directors.
9. Notice of Meetings. Notice of the time, place and purposes of any meeting of the Board shall be given to each Board member by an officer or by one of the Board members calling the meeting. Notice shall be given to each Board member in person or by telephone or by currently accepted technological means of communication sent not less than twenty-four hours before the meeting or by written notice mailed to the Board Member’s last known address at least 72 hours before the meeting. Alternatively, a written notice may be posted in the Board Members place of employment at least 96 hours in advance. Notice need not be given to any Board member if a written waiver of notice, executed by the Board member before or after the meeting, is filed with the records of the meeting or to any Board member who attends the meeting without protesting lack of notice.
10. Quorum. At any meeting of the Board, four Board members then in office shall constitute a Quorum.
11. Action (Decisions) at a Meeting. Decisions made (motions sustained) by the Board will need the consenting approval of a four-person majority.
12. Action by Consent. Any action by the Board members may be taken without a meeting if all Board members then in office consent to the action in writing and the written consents are filed with the records of the Board members’ meetings. Such consent shall be treated as a vote of the Board members for all purposes.
13. Committees. The Board members may elect committees and may delegate thereto some or all of their powers except those, which they are prohibited from delegating by the law, the Articles or by these By-laws. Except as the Board members may otherwise determine, any such committee may make rules for the conduct of its business.
1. Elected officers. A President, Vice President, Treasurer and a Secretary shall be elected annually by the BOD at its first meeting following the annual membership meeting or following a special meeting held in its place thereof. The BOD at its discretion may elect other officers.
2. Qualifications. Each officer shall be a member, and all officers shall be directors. The same person may hold no more than two offices. The President may hold no more than one office.
3. Tenure. Except as otherwise provided by law, by the Articles, or by these By-laws, the term of office of the officers shall be determined by the BOD. Any officer may resign by delivering to any director his or her written resignation, effective upon receipt or at some later time specified. No officer resigning or removed shall have the right to any compensation as such officer for any period following his or her resignation or removal, unless provided by a written agreement or by a resolution of the directors. In the event that the president resigns, the Vice-President will fill the President’s position until a new President is elected by the Board of Directors.
4. Removal. The Board of Directors may remove any officer with or without just cause. If an officer is removed for cause, he or she is entitled to reasonable notice and opportunity to be heard by the BOD.
5. Vacancies. If any executive office becomes vacant for any reason, the BOD shall within a reasonable time elect a successor or successors, who shall hold office for the unexpired term, except as otherwise provided by law, the Articles or by these By-laws.
6. The President. The President shall be the chief executive officer of the corporation and shall, subject to the discretion of the Board have general supervision of the business of the corporation. The President of the Board or in his or her absence, the Vice President, the Secretary or the Treasurer shall preside at all meetings of the Board. The President has the power to enter into contracts in the name of the corporation upon approval by the Board or the Membership, according to the decision-making parameters (Article VII). The President shall have such other duties and powers, as the Board shall determine from time to time.
7. Treasurer. Subject to the supervision of the directors, the Treasurer shall
have: (1) general charge of the finances and custody of the funds of the corporation, (2) power to endorse for deposit or collection all notes, checks, drafts and other obligations of payments to the corporation and to accept drafts on behalf of the corporation and (3) shall cause to be kept accurate books on account, which shall be the property of the corporation. If required by the BOD, the Treasurer shall give bond for faithful performance of duty.
8. Secretary. The Secretary shall be a resident of the state of Ohio. The Secretary shall keep at his or her office or at the principal office of the corporation those documents described in Section 5 of Article I and such other documents as the BOD shall determine, and shall have such other duties and powers as determined by the Board. In the absence of the Secretary at a meeting, a temporary Secretary designated by the person presiding at such meeting shall perform the duties of the Secretary.’
9. Vice President. The vice president shall work with the president to ensure that agendas for Board and member meetings are posted. The exception to this will be special meetings (Article V, #8). The vice president shall be well versed in the president’s role, and shall assume the duties of the president if he/she is unable to fulfill them. The vice president shall have such other duties and responsibilities, as the Board shall determine from time to time.
Parameters and Method for Decision Making
1. Decisions will be made according to the principles set forth in the operating rules of the WORC.
2. Coordinator and Coordinator team decision making will have the responsibility of decisions carrying out the WORC operating rules, current operating goals and financial guidelines as outlined in the current fiscal year business plan. Individual Coordinators have the responsibility for decisions concerning a maximum total of $5,000 in assets or revenue; $10,000 with the consent of the financial team, including the financial cash flow manager and the BOD Treasurer.
3. The BOD will have the responsibility for decisions concerning $10,000 to a maximum of $20,000 in assets or revenue.
4. Membership will have the responsibility for all decisions beyond $20,000 in assets or revenue. All decisions made by individual coordinators, coordinator teams, or the Board of Directors, regardless of decision making authority as outlined by these by-laws or operating rules, can be brought before membership for reversal or modification following the decision making process of the WORC.
Indemnification and Insurance
1. Indemnification. The corporation shall indemnify each of its directors and officers against all liabilities and expenses including amounts paid in satisfaction of judgments in compromise, or as fines and penalties, and counsel fees of reasonably incurred or paid by him or her in connection with the defense or disposition of any action, suit or other proceeding (whether civil or criminal) in which he or she may be involved, while in office or thereafter, by reason of his or her having been such a director or officer; except with respect to any matter as to which he or she shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his or her action was in the best interest of the corporation, or with respect to any matter as to which he or she shall agree to be ordered by any court of competent jurisdiction to make payment to the corporation. The right of indemnification herein provided for shall be in addition to any other right which any such person may have or obtain, shall continue as to any such person who has ceased to be a director or officer and shall insure to the benefit of the heirs of any such person.
2. Insurance. The corporation may purchase insurance to cover any liability or expense reasonably incurred by members, officers or directors by reason of their having been members, officers or directors.
1. By Members. The members shall have the power to make, amend or repeal these By-laws by following the decision making process of the W.O.R.C., provided that the notice for such a meeting indicated a change in the By-laws was to be considered.
1. Operating Rules. Membership may establish operating rules, separate from these By-laws. These Operating Rules may be added to, amended or repealed at any meeting of the members or the Board, by a decision of the quorum. The Operating Rules shall be binding on all members and directors, unless inconsistent with the law, the Articles of Incorporation or these By-laws. The Secretary shall maintain a current copy of the Operating Rules, and a copy shall be available to any member requesting a copy.