On this ballot, Owners are being asked to vote on a proposed bylaw amendment. Bylaw 6.5 defines income and how it can be used, including the use of patronage rebates. The proposed bylaw amendment, which is an addition to the current bylaw, clarifies the duty and authority of the Board regarding patronage rebates and makes clear that the Co-op can distribute patronage rebates as a combination of cash and allocated patronage equities. A more detailed explanation of the proposed amendment can be found below.

Current Bylaw 6.5
“Net proceeds as defined in Chapter 185 shall be considered income to the Co-op and may be credited to allocated or unallocated surplus or reserves of the cooperative and may be applied to losses incurred in prior years. The Board may, at its discretion, pay out or allocate all or part of the net proceeds to the Owners as a patronage rebate.”

Proposed Amendment to Bylaw 6.5 (addition of a new last sentence)
“Patronage rebates may, at the discretion of the Board of Directors, be distributed in cash, allocated patronage equities or any combination thereof, upon such terms and conditions as may be determined by the Board of Directors in its sole discretion.”

If approved, the new Bylaw 6.5 would read
“Net proceeds as defined in Chapter 185 shall be considered income to the Co-op and may be credited to allocated or unallocated surplus or reserves of the cooperative and may be applied to losses incurred in prior years. The Board may, at its discretion, pay out or allocate all or part of the net proceeds to the Owners as a patronage rebate. Patronage rebates may, at the discretion of the Board of Directors, be distributed in cash, allocated patronage equities or any combination thereof, upon such terms and conditions as may be determined by the Board of Directors in its sole discretion.”

Explanation of Proposed Bylaw Amendment
During recent meetings, the Co-op’s Board of Directors has examined the Co-op’s business operations and prospects for the future. As part of that analysis, the Board considered the possibility that the Co-op in the future will be in a position to distribute patronage rebates to the Co-op’s Owners. The Board also considered the provisions in the Co-op’s articles of incorporation and bylaws related to operation on the Co-op on a cooperative basis and the distribution of patronage rebates. Although the Board believes that applicable Wisconsin law and the Co-op’s governing documents provide ample authority for the distribution of patronage rebates, in discussions with legal counsel the Board received a recommendation that the Co-op adopt an amendment to Section 6.5 of the Co-op’s Bylaws to clarify that authority. As a result, the Board has adopted a resolution approving the amendment of Section 6.5 of the Bylaws by the addition of a new last sentence. The proposed language is simply intended to make clear that the Co-op can distribute patronage rebates in cash, in allocated patronage equities or in any combination of cash and allocated patronage equities. The proposed language also makes clear that the Board is authorized to establish the terms and conditions upon which patronage rebates are to be distributed to the Co-op’s Owners. The effect of the proposed language, then, is to clarify the Bylaws by removing any doubt regarding the Board’s duty and authority to make decisions regarding distribution of patronage rebates to the Co-op’s Owners.
Questions? If you have any questions about this proposed amendment, please contact David Waisman, Director of Finance at 608-251-0884 or .

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