BYLAWS
This document governs us. It can include any provision for managing our company that does not contradict our articles. Our board controls these bylaws. Our members elect our board and control our articles.
1. Purpose and Business
User Cooperative’s purpose is to be the people's tech company.
The “Company” strives to meet its capital needs through voluntary financial contributions from its members and profits made by its internet technology services as they go online. The Company distributes all of its financial surplus to its members, who own and democratically control the Company. Company membership is free and open to any natural person.
The Company can carry out lawful activities authorized by the Revised Code of Washington, Chapter 24.06: Nonprofit Miscellaneous and Mutual Corporations Act (“Statute”).
2. Members
1. Membership.
(a) One Class, Open to Anyone. In accordance with the Company’s Articles of Incorporation (“Company Articles”), which supersede these bylaws, the Company has one class of membership, and membership is open to any natural person. The Company allows one (1) membership per natural person.
(b) Application Form. In accordance with the Company Articles, prospective members must apply by completing a form chosen by the Company’s board of directors (“Board”).
(c) No Membership Fee. In accordance with the Company Articles, no fees or other assessments of any kind are required for membership.
(d) Applications Automatically Approved. All applications for membership are automatically approved. Upon such approval, members receive all membership rights to participate in the Company’s financial surplus, as expressly provided for in Article 7 and Article 8 of the Company Articles (“Surplus Rights”). Also, upon such approval, provided that it occurs on or after the date of the annual or special member meeting that involves the election of the Company’s first Elected Directors (defined below) (“First Member Meeting”), members receive all other membership rights pursuant to the Company Articles and these bylaws (“Voting Rights”). On the date of the First Member Meeting, members who have received Surplus Rights but not Voting Rights will automatically receive Voting Rights. Before such date, the Director on the Initial Board of Directors, as defined in Article 14 of the Company Articles, is the only member with Voting Rights. The Board can set additional criteria for approval if necessary.
(e) Only Members Can Be Users. Only members can use the Company’s consumer or consumer-facing services.
(f) Age Requirements. The age requirements for membership conform to those in the Company’s Terms of Service or a similar contract.
2. Membership Termination and Reinstatement.
(a) Termination. The Company Articles state the reasons that a membership terminates.
(b) Reinstatement. The Board can adopt policies for reinstating a membership that has terminated.
3. Annual and Special Member Meetings.
(a) Purposes. Members meet to install new Elected Directors, defined in Article 3, section 1a, or transact on business items that are brought up before the meeting according to procedure stated in these bylaws.
(b) Annual and Special Meetings. Members have annual meetings on a date, time, and place the Board chooses. Members can also have special meetings. In accordance with the Company Articles, special meetings can be called by the Board, President, or at least five (5) percent of the Company’s members entitled to vote at such meeting, and only business within the purpose or purposes described in the meeting notice can be conducted at a special meeting.
(c) Remote Meetings. Member meetings are conducted by electronic or other remote communication to the full extent the Statute allows (see RCW 24.06.032 and RCW 24.06.100). Meetings can also involve a physical assembly if the Board so chooses.
4. Member Meeting Notices.
(a) Secretary Gives Notice to All Members. The Secretary, introduced in Article 4, section 1a, vi, sends members notice of member meetings. Notice is sent by electronic transmission ten (10) to one hundred twenty (120) days in advance, in accordance with the Statute (see RCW 24.06.032 and RCW 24.106.105).
(b) Ballots and Other Material. Meeting notices come with an electronic ballot for matters to be voted on at the meeting. Ballots, information, and materials for a member meeting are provided in accordance with the Statute (see RCW 24.06.032).
(c) Record Date. All members as of a specific date receive a meeting notice. This date is called the record date. The Board can specify a record date no more than ninety (90) days before the first meeting notice. If the Board does not specify a record date, the record date is thirty (30) days before the first meeting notice.
5. Business Items Considered at Annual Member Meetings.
(a) Business Must Be on Ballot, Board Decides. No business item can be acted on at an annual member meeting unless the Board decides to include it on the ballot that accompanies the meeting’s notice.
(b) How Members Get Business on Ballot. A member can submit a business item for consideration or vote at an annual meeting if:
(i) That member submits no later than three (3) months before the annual meeting an electronic notice that describes the business item in no more than 150 words and bears the signatures or electronic signatures from 150 other members, and
(ii) One-third or more Directors agree in writing that the business item is appropriate for members to consider or act on and should be included on the ballot that accompanies the meeting’s notice.
(c) Statements For and Against Member Business on Ballot. Meeting notices can include statements for and against a business item that a member got placed on the ballot. Neither statement can be more than 250 words. The member who submitted the business item can also submit a statement in favor of the business item which cannot be more than 250 words. This statement or an edited version of it is included in the meeting notice. Edits to this statement must be agreed on by the majority of Directors who agreed to put the business item on the ballot. Directors who did not agree to put the business item on the ballot can include in the meeting notice an opposing or other statement about the business item.
6. Voting.
(a) In accordance with the Company Articles:
(i) One Member, One Vote. Each member has one (1) vote for each Board seat to be elected and one (1) vote on each other item of business submitted to a vote of members.
(ii) Members Vote for Themselves. Voting by proxies or designees is not allowed.
(iii) Electronic Voting. Any member vote is taken electronically to the full extent the law allows.
(b) A member’s vote is counted if:
(i) Correct Form. It is submitted on the ballot form that the Secretary provided for the meeting.
(ii) Meets Deadline. The Secretary receives the executed ballot no later than the ballot-submission deadline set by the Nominating and Governance Committee introduced in Article 3, section 7a, iii. This deadline is chosen to give the Secretary enough time to count the votes and it cannot be more than seven (7) days before the meeting.
(c) No Quorum and Majority Vote. Unless otherwise defined in the Company Articles or required by law, (i) no quorum of members is required to transact business, and (ii) the affirmative vote of a majority of members who vote on any business item is enough to approve an action.
7. Conduct of Member Meetings. The President, introduced in Article 4, section 1a, i, presides as the chairperson of member meetings. The chairperson of the meeting can convene the meeting and, for any or no reason, (a) recess and/or adjourn the meeting, (b) prescribe meeting rules, regulations, and procedures, and (c) do anything or make any determination that, in the chairperson’s judgement, is appropriate for the proper conduct of the meeting. Such rules, regulations, or procedures can include, without limitation: (a) setting the agenda or matter of business for the meeting, (b) establishing rules and procedures for maintaining order at the meeting, (c) limiting participation in the meeting to Company members of record or other persons, (d) restricting entry to the meeting after it has already begun, and (e) limiting the time allotted to participants for questions or comments. The chairperson of the meeting will, if the facts warrant, determine and declare at the meeting that a matter or business was not properly brought before the meeting, and, consequently, such matter or business will not be transacted or considered.
8. Data and Privacy. The Company has a Privacy Policy that explains how the Company collects, stores, protects, manages, shares, and uses data on members and customers. The Company complies with that policy and all applicable privacy laws. The Company also adopts measures to prevent misuse of such data by third parties, including other members who request to inspect such data in accordance with the Statute (see RCW 24.06.160).
3. Board of Directors
1. Board.
(a) Three to Nine Directors. In accordance with the Company Articles, the Company’s affairs are managed by a board of three (3) to nine (9) directors (“Directors”), as the Board determines, and all Directors are elected by members, except for the President (“Elected Directors”). The Initial Board of Directors, as defined in the Company Articles, is the exception, and it consists of one (1) Director, who is the President. The Initial Board of Directors currently manages the Company’s affairs. The Initial Board of Directors must conclude its transition to a board of three (3) to nine (9) Directors (“Board Transition”) no later than six (6) months after the date upon which two conditions are met: (i) the Company reaches, for the first time, one million five hundred thousand (1,500,000) members and (ii) the Company collects in cash fifteen million dollars ($15,000,000) of cumulative gross revenue, which includes, but is not limited to, voluntary financial contributions from the Company’s members. The Board Transition concludes when members elect two (2) to eight (8) Elected Directors at the First Member Meeting.
(b) Maximum Years of Service. In accordance with the Company Articles, Elected Directors can serve for no more than nine (9) years. The President serves as Director for the greater of nine (9) years or their tenure as President. The President ceases to be Director when they are no longer President.
(c) Three-Year Terms. Elected Directors serve for terms of three (3) years except in situations which shorter terms are permitted under these bylaws.
(d) Staggered Elections. Elected Directors are divided into three (3) groups as nearly equal in number as the total number of Directors permits (each, a “Group”). The terms of Elected Directors in a Group expire at the same time, and the terms of all three (3) Groups expire in three (3) consecutive years.
(e) The Board Sets the Stagger. The Board assigns Elected Directors to Groups and defines the terms of each Group. The Board can prescribe terms of less than three (3) years for certain Elected Directors or nominees if it considers shortened terms to be necessary to balance the staggered terms among the Elected Directors. No action by the Board to prescribe a shortened term for an Elected Director shortens the term of an incumbent Elected Director without their consent.
(f) Term Length in a Vacancy Event. A Director designated by the Board to fill the seat of an Elected Director whose seat has become vacant for any reason will have the same term of office as the other Directors in the Group to which the predecessor belonged.
2. Eligibility to Become Director.
(a) General. To be a Director, one must be a Company member and at least twenty-one (21) years old. Also, in accordance with the Company Articles, one cannot exceed nine (9) years of Director service by the end of the term to which they are to be elected or appointed unless they are the President.
(b) Independent. “Independent” in this case means that one is free of conflict and motivated to act in the best interests of the Company. Elected Directors must meet independence standards prescribed by the Nominating and Governance Committee at the time of their election or appointment and throughout their terms. Also, the Board must electronically disclose to all members such standards and, within no more than three (3) days, any changes made to them.
(c) Partial Terms. One who has served less than nine (9) years as Director can be appointed by at least a two-thirds vote of Elected Directors to serve for a partial term equal to part or all of the time remaining in that person’s nine (9)-year service limitation in accordance with the Company Articles.
3. Director Nominations and Elections.
(a) The Nominating and Governance Committee, introduced in section 7a, iii of this Article, sets procedures and criteria for recommending and nominating Elected Director candidates.
(b) Every year, the Nominating and Governance Committee recommends to the Board a number of Elected Director candidates that is no more than two (2) times the number of Elected Directors that could be elected at the next annual member meeting.
(c) From the Nominating and Governance Committee’s recommendations for Elected Director candidates, the Board nominates a number of Elected Director candidates that is (i) no less than the number of Elected Directors that must be elected at the next annual member meeting and (ii) no more than two (2) times the number of Elected Directors that must be elected at the next annual member meeting. No one else can be nominated to become an Elected Director at the next annual member meeting.
(d) If the number of Elected Director nominees exceeds the number of Elected Director seats available, the Board specifies (i) which nominees will run for a seat on an uncontested basis and (ii) which nominees will run against one another on a contested basis for a specified seat. No more than two (2) Elected Director nominees can vie for one (1) Elected Director seat.
(e) Before each annual member meeting, the Secretary provides to all members (i) biographical information about the Elected Director nominees that the Nominating and Governance Committee considers appropriate, (ii) information about which nominees are running on an uncontested or contested basis, and (iii) a ballot to vote for Elected Director nominees.
(f) The ballot allows members to vote “for” or “withhold” their vote for uncontested Elected Director nominees. In an uncontested election, a nominee is elected if the number of “for” votes is more than the number of “withhold” votes. If the nominee is not elected, the Board seat for which the nominee was nominated is considered vacant.
(g) A vacancy created by the “loss” of an uncontested Elector Director nominee may be filled by action of the remaining Directors, in accordance with the Statute, by appointing a Director chosen from nominees selected by the Nominating and Governance Committee for a term that expires at the next annual member meeting.
(h) If two (2) Elected Director nominees are vying for one (1) Elected Director seat, then such seat is filled by the nominee who receives more votes.
(i) An Elected Director’s term starts on the date of the annual member meeting.
4. Board Meetings.
(a) Annual Board Meetings. Each newly constituted Board has an annual meeting the day of the annual member meeting or shortly thereafter. During the annual Board meeting, the Board appoints Company officers (“Officers”) and can deal with other business matters. The annual Board meeting can be conducted via teleconference, at the Company’s principal office, or another location the President designates. No notice of the annual Board meeting is required if it is on the same day as the annual member meeting.
(b) Regular Board Meetings. The Board must have at least four (4) regularly scheduled meetings per year, and it can by resolution designate a time, date, and place for its regular meetings. If scheduled in this manner, regular Board meetings can be held without further notice to the Directors.
(c) Executive Sessions. Each regular Board meeting must have a session that excludes the President and other members of management.
(d) Special Board Meetings. The President or any three (3) or more Directors can call a special Board meeting by delivering to the Secretary a written or electronic request that states the meeting’s purpose. The Secretary in turn promptly gives notice to each Director at least three (3) days before the date of the meeting. A special Board meeting can be held either via teleconference or at the Company’s principal office. A special Board meeting can also be called by action of the Board, to be held at least three (3) days’ advance notice at a time and place the Board can specify.
(e) Waiver of Meeting Notice. Any required notice of a meeting of Directors may be waived in writing by any Director before or after the meeting.
5. Majority Quorum and Majority Vote for Board Decisions. Except as otherwise required by law, (a) a majority of the Directors in office constitutes a quorum to transact business, and (b) the affirmative vote of a majority of Directors present at a meeting at which a quorum is present is enough to approve an action, except for amending these bylaws (see Article 7).
6. Director Compensation. Elected Directors are compensated for their service, and, if they are a chairperson of a Board committee, they receive additional compensation. The amount, time, and manner of such compensation are determined by the Compensation Committee, which is introduced in section 7a, iv of this Article, and subject to Board approval.
7. Board Committees.
(a) The Board can appoint standing or temporary committees of one or more Directors with authority the Board can prescribe, subject to the limitations of the Statute. The Board will appoint the standing committees below when the Initial Board of Directors, as defined in the Company Articles, ceases to manage the Company's affairs. Until then, the Initial Board of Directors will fulfill to the extent possible the duties of such standing committees.
(i) Executive Committee. This committee acts on behalf of the Board between meetings, and it deals with executive performance and succession.
(ii) Audit and Finance Committee. This committee helps the Board fulfill its financial oversight responsibilities by evaluating financial reporting, business risk management, legal compliance, and audit processes.
(iii) Nominating and Governance Committee. This committee sources Director candidates, evaluates Board performance, and recommends policies and courses of action to make the Board better.
(iv) Compensation Committee. This committee makes sure that Directors' and Officers’ compensation motivates them.
(b) Each standing or temporary committee has the authority and responsibilities described in their respective charters, which are subject to Board approval and the Statute. Any such committee, to the extent provided in their respective charters, will have and may exercise all the powers and authority of the Board in the management of the affairs of the Company, but no such committee will have the power or authority to (i) approve, adopt, or recommend to the members any action or matter expressly required by the Statute to be submitted to members for approval, except for the election or removal of Directors, or (ii) adopt, amend, or repeal any bylaw of the Company.
8. Board Action by Consent Without a Meeting. Actions that can be taken at a meeting of Directors or a Board committee may be taken without a meeting if written or electronic consent describing the action to be taken is signed before or after such action by all of the Directors in office or all of the members of the Board committee, as the case may be. Such consent has the same effect as a unanimous vote and is effective when the last Director signs unless a later date is specified.
4. Officers
1. Officers.
(a) Descriptions. Officers serve at the pleasure of the Board and have responsibilities and authority that are customary for their offices, subject to these bylaws and modifications that the Board may prescribe. Officers include or will include the following:
(i) President. The person holding the office of President is the Chief Executive Officer of the Company. The general powers and duties of the President are to act as the manager of the Company and, subject to the control of the Board, to have general supervision, direction, and control of the business and affairs of the Company. Also, the President acts as the chairperson of member meetings and, as Director by virtue of the office, Board meetings.
(ii) One or More Vice Presidents. The person holding an office of Vice President is likely to manage at least one of the Company’s operating or administrative divisions. A Vice President can be designated by the Board to perform the duties of the President in the event of their absence or disability.
(iii) Chief Operating Officer. The person holding the office of Chief Operating Officer manages the Company in a less general way than the President does. The Chief Operating Officer can be designated by the Board to perform the duties of the President in the event of their absence or disability.
(iv) Chief Financial Officer. The person holding the office of Chief Financial Officer is also the Treasurer of the Company unless the Board appoints another Officer as the Treasurer of the Company. Generally, the Chief Financial Officer manages the financial affairs of the Company.
(v) Treasurer. Generally, the person holding the office of Treasurer has custody of all money and securities held by the Company, and the Treasurer makes and provides an account of authorized disbursements of Company funds.
(vi) Secretary. The person holding the office of Secretary is generally responsible for issuing all authorized notices for and keeping minutes of all member meetings and Board meetings. The Secretary is in charge of the Company’s minute books and similar records. If the Secretary is absent for a member meeting, Board meeting, or any other meeting that requires their presence, the chairperson of such meeting can appoint any person to act as secretary of such meeting.
(b) Appointing Officers. The Board appoints the President, Chief Financial Officer, and Treasurer. The President appoints the other Officers.
(c) Term Length and Vacancies. Each Officer holds their office for a term of one (1) year, and there is no limit to the number of terms each Officer can serve. An Officer’s term can end in less than one (1) year upon such Officer’s resignation, death, or removal. Any vacancy occurring in any office of the Company may be filled by the Board or, if the vacancy is in an office that the President appoints, the President.
(d) Removal. Officers may be removed at any time, with or without cause, by the affirmative vote of a majority of the Directors in office or, solely with respect to Officers appointed by the President, upon notification of removal by the President. Any such removal does not impair any contract rights of the person removed.
5. Dividends
1. Patronage Dividends.
(a) The Board Determines Dividends. In accordance with the Company Articles, the Board annually determines (i) the amount of Surplus Funds, if any, from the prior calendar year, (ii) the time and manner of returning such Surplus Funds as patronage dividends to members, and (iii) any other related matters. “Surplus Funds” is defined in section 2 of this Article.
(b) Dividends for Use. In accordance with the Company Articles, Surplus Funds are returned to members in proportion to their use. “Use” (noun) is defined in the Company Articles and is copied in section 2 of this Article.
(c) Dividends Not Guaranteed. In accordance with the Company Articles, the Board may elect not to declare or distribute a patronage dividend of Surplus Funds for any calendar year if it determines that such election is in the best interests of the Company.
(d) Foreign Subsidiaries. The Board may establish separate allocation units or pools for Foreign Subsidiaries, defined in section 6 of this Article, for specified services and distribute the net profits based on the value of business done with or for members with respect to such units or pools.
2. Definitions.
(a) Surplus Funds. “Surplus Funds” means the positive amount equal to (i) the calendar-year earnings from the Company’s cooperative business for such year as determined by the Board minus (ii) the reserves the Board considers necessary for business purposes. Surplus Funds do not include voluntary financial contributions from members.
(b) Use. “Use,” as defined in the Company Articles, is the use of services of the Company’s cooperative program. Use for any period is quantified as (i) the sum of unique member-to-service calls, like a member’s clicks, taps, and swipes on an app or website, plus (ii) the sum of unique service-to-member calls, like automatic pings to a member’s mobile device to retrieve GPS data for a navigation app.
3. Form of Payment and Taxation.
(a) Form of Payment. Patronage dividends can be distributed in cash, merchandize credits, qualified or non-qualified written notices of allocation, other property, or any combination of those. The Board determines this.
(b) Written Notices of Allocation. 26 USC Subtitle A, CHAPTER 1, Subchapter T: Cooperatives and Their Patrons (“Subchapter T”), section 1388 defines “written notices of allocation.” Generally, these disclose to the recipient (i) a dollar amount that a cooperative allocates to and withholds from them and (ii) the portion of that amount that is a patronage dividend. The Board must designate as such any patronage dividend distributed as a written notice of allocation in accordance with Subchapter T, section 1388.
(c) Credits for Notices. The Company redeems qualified and non-qualified written notices of allocation with merchandize credits.
(d) Merchandize Credit Terms of Use. The Board designates the terms of use for merchandize credits distributed in payment of patronage dividends or in redemption of qualified or non-qualified written notices of allocation.
(e) Member Consent for Written Notices of Allocation. Each member, by act of membership alone, consents that the amount of any distribution with respect to their patronage which is made in the form of a qualified written notice of allocation will be taken into account as part of the member’s taxable income at its stated dollar amount in the manner provided in Subchapter T, section 1385(a) in the taxable year in which the member receives such qualified written notice of allocation.
4. Unclaimed Dividends.
(a) Dividend Expiration and Reversion. Unless it takes specific action to the contrary, the Board is presumed to have exercised its discretion under the Statute (see RCW 23.86.160) to cause the expiration and reversion to the Company of any patronage dividend that was paid in the form of a written notice of allocation or in merchandise credits, to the extent it has not been used or redeemed on or before the second January 3 following declaration of the patronage dividend.
(b) Member Requests for Payment. The Company can treat written or electronic communication that it receives from a member regarding their unredeemed patronage dividend as a request for payment of the patronage dividend in cash, whether the member explicitly makes such a request.
5. Tax-Deductibility of Patronage Dividends. If any part of the Company’s annual earnings or income to be distributed and paid to members as patronage dividends is not deductible from the Company’s gross income as a patronage dividend (under applicable provisions of Subchapter T, sections 1381-1388, inclusive, or any other applicable revenue statute or regulation), the declaration and payment of such patronage dividends will to such extent be deemed to have been made out of annual earnings that do so qualify as deductible, whether or not the dividend resolution of the Board made specific reference to the source of earnings out of which the patronage dividend was declared or payable.
6. Foreign Subsidiaries.
(a) Defined. The Company may own corporations or other entities under the laws of countries other than the United States (“Foreign Subsidiaries”) to conduct business in other countries.
(b) Surplus Funds. Any Surplus Funds of any Foreign Subsidiary are distributed to members who used that Foreign Subsidiary’s services in a manner as consistent as possible with these bylaws.
6. Indemnification
1. Basic Indemnity. In addition to the immunities and releases from liability provided by RCW sections 4.24.264, 23B.08.320, and 24.06.035, the Company, in accordance with the Statute, indemnifies its current and former Directors, Officers, employees, and agents against any expense, loss, or damages incurred by them in connection with or arising out of their service in such capacities to the extent allowed by law under any circumstances.
2. Other Indemnity for Directors and Officers. Without limiting the indemnity in the previous paragraph, which is not exclusive, the Company may also indemnify and provide other benefits to its current and former Directors and Officers through separate agreements approved by the Board and authorized under the Statute (see RCW 24.06.030(15)).
3. Other. Whether any such separate agreement has been entered into, the right to indemnification conferred in this Article is a contract right upon which each beneficiary hereof will be presumed to have relied.
Any amendment to or repeal of this Article will not adversely affect any right or protection of any current or former Director, Officer, employee, or agent for or with respect to any acts or omissions of such individual occurring prior to such amendment or repeal.
7. Amendments to These Bylaws
In accordance with the Company Articles, (1) these bylaws may be altered, amended, or repealed by the affirmative vote of at least two-thirds of the Directors in office, and (2) any proposal for such change submitted for a vote, along with the names of the Directors who voted for and against it, are sent electronically to all members no more than three (3) days after the vote is concluded.
Proposals in (2) above cannot exceed 150 words.