By-Laws of Piedmont Biofuels, Inc.
As amended by the Board of Directors on February 17, 2008.
Article I: Name
The name of the corporation is Piedmont Biofuels, Inc.
Article II: Purposes
The purposes for which the corporation (“the Cooperative”) is formed are:
- To engage in the business of producing and selling high quality renewable energy and appropriate technology products in a cooperative manner that promotes good will among the community;
- To develop an attractive and successful model for community and patron-ownership in renewable energy and appropriate technology production, education, sales and local economic development;
- To create jobs that are secure and educational and that support the dignity of all workers of the Cooperative; and
- To engage in any other lawful act or activity which Cooperatives may perform under Chapter 54 of the General Statutes of North Carolina, Subchapter IV.
Article III: Ownership
Section 1. Ownership Eligibility and Acceptance. Ownership in the cooperative shall be open to any patron that supports the purposes of the cooperative as expressed in the Articles of Incorporation, these By-Laws, and the policies of the cooperative. Additionally, to be eligible for ownership in this cooperative, a person must:
- Read, understand, and sign a Membership-Ownership Agreement. Membership-Ownership Agreements shall be accepted unless the Board determines in its discretion that the interests of the cooperative would be better served by returning the contract; and
- Purchase exactly one Membership Share that will function for all intents and purposes as an ownership certificate.
Section 2. Membership Stock and Rights. The board shall set the price and term of a Membership Share. Members who have paid for a membership share are entitled to all the rights and privileges of ownership, including voting.
The Membership Stock of this Cooperative may be purchased, owned, and/or held only by Member-Owners of the Cooperative. Each Member-Owner may own no more than one share of Membership Stock, which will entitle its holder to vote in any meeting of the Member-Ownership according to Article V of these By-Laws.
No Member-Owner may sell, assign any interest in, or otherwise transfer his or her Membership Share during the period of his or her membership in the Cooperative. All certificates representing Membership Shares shall, in accordance with the law, have a notation thereon referring to the restrictions governing the transfer of these shares.
A Member-Owner’s percent interest in the Cooperative can be calculated by dividing one by the number of current outstanding Member-Owner shares.
Section 3. Ownership Termination. When a Member-Owner’s share expires or when a Member-Owner voluntarily or involuntarily ends his or her membership, his or her ownership automatically ends and the membership share shall be deemed transferred back to the Cooperative.
Section 4. Sale of the Cooperative. In the event that the Cooperative is sold the Board of Directors will propose a plan for distributing the proceeds which must be approved by the Owner-Members.
Article IV: Loans from Individuals
Section 1. Issue. The Board of Directors is granted authority to authorize one or more series of loans from individuals to fix and determine with respect to each series:
- The designation of such series and the limitation, or any, on the number and amount of loans, which may be solicited.
- The terms and conditions on which the principle will be repaid; and
- The rate of interest and the terms and conditions on which it will be paid.
Except as may be otherwise provided in the resolutions providing for the issue of a particular series, the Board of Directors may from time to time increase the number and amount of loans of any series already created.
All loans to individuals of all series shall be of equal rank and be identical in all respects except in respect to the particulars, which may be fixed by the Board of Directors as herein noted above.
Section 2. Early Repayment. The Cooperative by action of its Board of Directors may repay the whole or any part of the loans from individuals, at any time on 30 days notice by repaying the principle and any accumulated and unpaid interest.
Section 3. Transfer. The loan may be transferred only back to the Cooperative.
Section 4. Eligibility. Loan offers will be made only to persons who the Cooperative has reasonable grounds to believe, and does believe, either have such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the loan, or are able to bear the economic risks of the loan.
Section 5. Lack of Registration. Loans from individuals are not registered under the Securities Act of 1933, as amended, or the North Carolina Securities Act. Each loan agreement shall bear a legend to that effect.
Section 6. Disclosure. All loan offers shall be accompanied by a Securities Disclosure Statement that describes the Cooperative and the risks associated with the loan.
Section 7. Dissolution. Upon dissolution or distribution of the assets of the Cooperative all loans shall be repaid before any distribution is made on the common Membership Stock.
Article V: Member Meetings
Section 1. Powers. All powers of the Cooperative originate from the Owners of the Cooperative. The Owners exercise their powers through representatives elected by them who are called directors. The directors shall be recalled and replaced at any time by the will of the Owners.
Section 2. Annual Meeting. The annual meeting of the Owners of the Cooperative shall be held in Chatham County, North Carolina, or at such other place as the Board of Directors, from time to time may determine. Meetings shall be held at such a time as the Board of Directors shall determine, within six months after the close of the fiscal year.
Section 3. Special Meetings. Special meetings of the members of the Cooperative may be called at any time by order of the Board of Directors and shall be called at any time upon written request of at least one-third of the Member-Owners. The request shall state the time, place, and object of the meeting. No business shall be transacted at special meetings other than what is described in the posted notices.
Section 4. Notice of Meetings. Written and printed notice of every regular and special meeting of Member-Owners shall be given to all Owners, as appropriate, personally or by mail or email at their last known address at least ten days, and not more than thirty days prior to the date of the meeting.
Section 5. Voting. Member-Owners shall vote only in the election and recall of directors and on other such matters not constituting formal action of the Owners of the Cooperative, including advisory questions as may be put before the Owners by the directors or by the initiative of the Owners.
At any regular or special meeting legally called, a written and signed vote by any absent Owner may be submitted if such Owner has been previously notified in writing of the exact motion or resolution upon which the vote is taken. Owners represented by ballot or signed vote shall be counted in computing a quorum but only on those questions on which the ballot or singed vote is taken.
Section 6. Quorum. A quorum at an Owner meeting shall not be less than 10. Owners may conduct proper business if quorum is met.
Article VI: Board of Directors
Section 1. Number. The general powers to manage the affairs of the Cooperative are delegated by the Member-Ownership to a Board of Directors consisting of no less than three and no more than seven Member-Owners.
Section 2. Composition of the Board of Directors. The Board of Directors shall consist of no less than 3 and no more than 7 directors elected by the Member-Owners. At all times at least 1 director shall be from Piedmont Biofuels Industrial, LLC.
Section 3. Eligibility. The directors shall accept any Member-Owner in good standing as a candidate for the election to the Board of Directors.
Section 4. Election of Directors. A simple majority will elect directors at the annual meeting of Owners. Owners unable to attend the annual meeting may vote with a signed absentee ballot received by the time of the vote.
Section 5. Term of Office. The initial Board of Directors of the Cooperative shall hold office until their successors assume office. The first Board of Directors shall decide by lot or otherwise as they deem best who shall constitute the one half of the directors whose terms of office are to be at the next two annual meetings of the Member-Owners. Thereafter, one half of the directors are to be elected for a term of two years at each annual meeting and assume office the following year.
Section 6. Removal of Directors. Any director may be removed from office with or without cause by a vote of not less than two thirds of the Member-Ownership. After the second consecutive absence or third missed meeting within one year, the Board can review status of an appointed Member-Owner and remove said board member through the regular majority process.
Section 7. Vacancies. In the event of any vacancy on the Board of Directors through death, resignation, or other cause, the remaining directors may, by majority vote, elect a successor to hold office until the next annual meeting, at which time a director shall be elected to complete the term of the director whose place was vacant.
Section 8. Duties of the Board. The duties and powers of the Board of Directors shall include all powers given a corporation under the laws of North Carolina, consistent with the laws of the United States and with the Cooperative’s Articles of Incorporation and By-Laws.
Article VII: Meeting of the Board of Directors
Section 1. Place of Meetings. All meetings of the Board of Directors shall be held at the Cooperative’s offices or at such other place as the Board of Directors, from time to time, may determine.
Section 2. Regular Meetings. Regular meetings of the Board of Directors shall be held immediately after the annual meeting of Owners and thereafter, at such time and date as may be fixed by the directors. Notice and agenda for regular meetings of the Board of Directors shall be delivered to board members not less than five days before the meeting. A board meeting may be rescheduled up to one week in advance of the originally scheduled meeting, provided every board member agrees to the change. If a rescheduled meeting causes a board member to be unable to attend, that absence will not count.
Section 3. Special Meetings. Special meetings of the Board of Directors may be called by any three directors. Notice for special meeting shall state the purposes of the meeting, and no other business shall be transacted except with unanimous consent of the directors. Notice shall be mailed, emailed, or delivered not less than fifteen days before special meetings.
Section 4. Quorum. A majority of all the directors shall constitute a quorum for the transaction of business at any meeting.
Section 5. Official Acts of the Board. Each of the official acts of the Board of Directors shall be by a majority vote of a quorum of the directors present and shall be recorded with the yeas and nays of each director of the unanimous approval thereon in the minutes of the Cooperative.
Section 6. Executive Session. The Board may choose to meet in executive session as needed.
Secition 7. Members and Trustees shall have an affirmative obligation to disclose the following at the beginning of any business meeting:
Where appropriate, the member or Trustee shall withdraw from discussion and/or voting upon the related issues.
Article VIII: Officers
Section 1. Officers. The officers of the Cooperative shall consist of a President, a Vice President, a Treasurer, a Secretary, and any other officers as the Board of Directors may determine.
Section 2. Election. The Board of Directors shall elect the officers for a one-year term at the new board’s first meeting.
Section 3. Qualifications. Each officer shall be a member of the Board of Directors.
Section 4. Removal. Any officer may be removed from office with or without cause by a vote of a majority of a quorum and the Board present at any meeting, the notice of which shall include purpose.
Section 5. Duties of the President. The President will be responsible to ensure the integrity of the board’s governance; to preside over all meetings of the Cooperative and of the Directors.
Section 6. Duties of the Vice President. In the absence or disability of the President, the Vice President shall perform the duties of the President. The Vice President shall also perform such duties as may be assigned to him/her by the President or Board of Directors.
Section 7. Duties of the Secretary. The Secretary will be responsible for the integrity of the board’s documents and perform such other duties as may be required of him or her by the Cooperative or the Board of Directors.
Section 8. Duties of the Treasurer. The Treasurer shall oversee the receipt and disbursement of all funds of the Cooperative; ensure that complete records of all financial transactions of the Cooperative are kept; and perform such other duties pertaining to his or her office as may be required by the Board of Directors.
Article IX: Miscellaneous Provisions
Section 1. Adoption and Form of Seal. The seal of the Cooperative shall contain the name of the Cooperative in the form as impressed in the margin hereof, and the seal in that form shall be, and is hereby adopted at the official seal of the Cooperative.
Section 2. The fiscal year of this Cooperative shall be a 52-53 week fiscal year commencing on the first day of January and ending on the last day of December.
Section 3. Indemnification of Directors. The Cooperative shall indemnify each person who has, does or will serve as a director or officer of the Cooperative and their heirs and personal representatives against any and all costs and expenses, including but not limited to, counsel fees, judgments paid, and amounts paid in settlement, that are actually and reasonably incurred in connection with the defense of any claim, action, suit, or proceeding, whether civil, criminal, administrative or otherwise in nature, in which he or she may be involved by reason of being or having been a director or officer of the Cooperative.
No indemnification shall be made as to matters which such director or officer shall be adjudged in any action, suit or proceeding to be liable for his or her own fraud or conscious misconduct in the performance of a duty to the Cooperative or a duty under federal or state laws. A conviction or judgment, whether based on a plea of guilty or nolo contendere or its equivalent, or after trial is a criminal action, suit or preceding shall not be deemed an adjudication of liability for fraud or conscious misconduct in the performance of duty to the Cooperative, if such officer or director acted in good faith in what he or she considered to be the best interest of the Cooperative.
Section 4. Amendments to By-Laws. The By-Laws of the Cooperative may be altered, rescinded, or amended by a majority vote of the directors or by a vote of two-thirds of the Member-Owners.
Section 5. Majority Vote. All decisions referred to in these By-Laws are made by majority vote unless otherwise indicated.