Articles of incorporation

Amended June 1, 2005

Article 1: Name

The name of this corporation is PUGET CONSUMERS CO-OP.

Article 2: Duration

The duration of PUGET CONSUMERS CO-OP (herein “PCC”) shall be perpetual.

Article 3: Purposes

The purposes for which PCC is formed are:

Paragraph 1 – To engage in the business of buying and selling goods as a wholesaler and as a retailer, including the rendering of services, according to consumer cooperative principles;

Paragraph 2 – To engage in the manufacture, production, and growing of goods;

Paragraph 3 – To educate members and the public in the wise and efficient production, purchase, and use of consumer goods and services;

Paragraph 4 – To educate members and others on cooperative practices and structures;

Paragraph 5 – To cooperate with other cooperatives on local, regional or national bases; and

Paragraph 6 – To engage in all such activities as are incidental or conducive to attainment of the purposes of PCC or to any of them and to exercise all powers now or hereafter permitted by the laws of the State of Washington for corporations formed under the Nonprofit Miscellaneous and Mutual Corporations Act, Chapter 24.06 RCW, or any successor statute.

Article 4: Membership

Paragraph 1 – Membership Rights Membership in PCC shall comprise the following personal, nontransferable (including by succession) rights for the lifetime of each member, subject to these Articles and the Bylaws in effect from time to time: (a) Active Membership: Active Members shall have the following rights and privileges: (i) to vote in all elections and proceedings submitted to the vote of the members, (ii) to be nominated for membership and, if elected, to serve on the Board of Trustees (the “Board”) and Nominating Committee, (iii) to serve, if appointed by the Board, on standing committees as provided for in the Bylaws, (iv) to participate in PCC’s activities to which members are invited, (v) to receive correspondence from PCC without charge, (vi) to purchase goods and services at PCC’s places of business according to member benefit programs in effect from time to time, (vii) to receive other benefits offered to Active Members by PCC from time to time, and (viii) to receive surplus funds if and when distributed pursuant to Article 6 hereof. (b) Inactive Membership: Inactive Members shall have all of the rights and privileges of Active Members except: (i) the right to vote in elections and proceedings submitted to the vote of the members, (ii) the right to be nominated or serve on the Board, Nominating Committee, or any other committee established for Active Members’ participation from time to time, (iii) the right to purchase goods and services at PCC’s places of business according to member benefit programs in effect from time to time, and (iv) to receive other benefits offered to Active Members by PCC from time to time. (c) Affiliate Membership: Affiliate Members shall have so many of the rights and privileges of the Active Members as the Board may accord to other organizations, associations, corporations, and similar entities, or their members, whether by reciprocity or otherwise, and whether by class or on a case-by-case basis, but which rights and privileges shall not in any event include the rights to vote in any PCC elections or proceedings, to be nominated for membership or to serve on the Board or
Nominating Committee, to serve on any standing committee, or to receive surplus funds pursuant to Article 6 hereof.

Paragraph 2 – Requirements for membership. (a) Active Membership: Any natural person eighteen years of age or older, independent of race, nationality, political position, sex, age, religious belief, handicap, sexual preference, or marital status, is eligible to become a member of PCC and shall become a member upon (i) making written application to PCC on its prescribed form which shall include subscription to cooperative principles, (ii) payment of a nonrefundable membership fee and purchase of a membership certificate as provided for in the Bylaws, and (iii) acceptance of such application by the Secretary of PCC. Upon acceptance by the Secretary, the applicant becomes an Active Member entitled to all of the rights and privileges thereof. (b) Inactive Membership: An Active Member shall be automatically converted to an Inactive Member if such member fails to satisfy the requirements for membership established by the Board pursuant to the Bylaws of PCC or if such member fails for a period of more than twelve (12) consecutive months to use the services (as demonstrated by scanning the membership card or other action as may from time to time be designated by the Board as a measure of membership usage) at PCC’s places of business. An Inactive Member will again become an Active Member if such member fully satisfies the requirements for membership established by the Board pursuant to the Bylaws of PCC, uses the services (as demonstrated by scanning the membership card or other action as may from time to time be designated by the Board as a measure of membership usage) at PCC’s stores or submits a written request to PCC for reactivation. (c) Employee Membership: For so long as and only so long as they are employees, all PCC employees shall be ex-officio Active Members, and termination of employment shall terminate membership on this basis; provided, however, employees may also be Active Members of PCC independent of employment if they comply with all of the provisions of subparagraph (a), above. (d) Affiliate Membership: The Board may grant affiliate memberships on such terms and conditions as it shall determine, and may alter or revoke the same at any time.

Paragraph 3 – Each Active Member shall be entitled to only one vote, notwithstanding that such member may be both a paid member and an employee member. Active Members shall be determined as of the date on which a resolution to submit a proposal or subject of voting to the membership is passed or, if the proposal or subject of voting be submitted by initiative petition, as of the date on which such petition is filed with the Board or at such later date as the Board determines. All such matters, including the election of Board members, shall be submitted to the Active Members pursuant to a resolution passed by the Board or pursuant to an initiative petition filed with the Board. The right to submit and procedure for submitting an initiative measure shall be subject to any provisions of the Bylaws relating thereto.

Paragraph 4 – The annual meeting of the members of PCC may be held at such times and places as prescribed in the Bylaws. All votes shall be on forms prepared and provided by PCC.

Paragraph 5 – Whenever proposals or directors are to be voted upon, such vote may be taken by mail if the name of each candidate and the text of each proposal to be so voted upon are set forth in a writing accompanying or contained in the notice of the meeting. Notices, including without limitation electronic notices, of annual, regular or special meetings of the members shall be given as provided in the Bylaws. Quorum requirements, both for meetings and proposals to be voted on by mail, shall be set forth in the Bylaws, but in any event shall not be less than the percentage of Active Members required by law.

Paragraph 6 – During his or her lifetime any member may personally or by his or her guardian or personal representative, and upon written notice to PCC, terminate his or her own membership. The membership certificate in that member’s name shall be redeemable upon such termination in the manner set forth in the Bylaws. Upon the death of a member, all sums theretofore paid by such member for his or her membership certificate shall be deemed fully earned by PCC and nonrefundable to such member’s personal representatives, estate or heirs, and the decedent’s membership shall terminate.

Article 5: Capital Stock

PCC Shall have no capital stock

Article 6: Surplus Funds

PCC may from time to time and at such rate or rates determined by the Board, distribute annually as a patronage rebate, in kind or in cash, to its members based on their respective purchases of goods or services, the net earnings of PCC attributable to business done with members, reserving such funds as the Board deems necessary for inventories, depreciation, capital expenses, working capital, or any other reasonable future business expense. PCC shall not distribute as a patronage refund any income from operations not attributable to business with its members. The Bylaws of PCC may contain such other provisions not inconsistent with the foregoing which the Board deems appropriate regarding distribution of surplus funds.

Article 7: Dissolution

Upon dissolution or final liquidation of PCC, the assets of PCC shall be distributed in the following order or priority:

Paragraph 1 – All debts to nonmembers shall be satisfied.

Paragraph 2 – All debts to members shall be satisfied.

Paragraph 3 – All membership certificates or members resigning more than 180 days prior to dissolution or final liquidation shall be redeemed.

Paragraph 4 – All other membership certificates shall be redeemed.

Paragraph 5 – All surplus funds shall be given to such nonprofit organization or organizations as the Board shall designate.

Article 8: Dissenting Member

Any member who becomes a dissenting member pursuant to RCW 24.06.250, or a successor statute, shall be limited to a return equal to the aggregate price which the member has paid for membership certificates in such person’s name plus the member’s membership fee or the fair value of such member’s membership, whichever is lesser, less any debt, including interest, such member then owes PCC.

Article 9: Registered Office

The registered office of PCC is 3131 Elliott Ave, Suite 500, Seattle, Washington 98121, and the registered agent at this address is Randy Lee.

Article 10: Board of Trustees

The administration of PCC shall be vested in the Board of nine trustees. The Board shall be filled as provided by the Bylaws and may be increased or decreased from time to time in the manner specified therein. A trustee may be removed from the Board in one of two ways: (i) by the Board, upon adoption of a resolution by two-thirds of the full membership of the Board removing such trustee because such trustee has substantially failed to perform the duties of a trustee, has acted in a manner not in the best interests of PCC, or has engaged in behavior that is disruptive to the proceedings of the Board, or (ii) by the Active Members, upon the proposal by any Active Member that such trustee be removed. If an Active Member proposes to have a trustee removed from office, a written statement must be filed with PCC’s registered agent stating the objections to the actions and/or votes on corporate matters of the trustee in question. The written statement will be posted at each of the stores with a petition form. The statement and petition will be posted for three months. All Active Members will be eligible to sign the petition during the three-month period following posting of the statement and petition. If 3% of the Active Members at the time the removal is proposed sign the petition, the removal will be voted upon by the Active Members as prescribed in these Articles and the Bylaws. A quorum for a vote to remove a trustee shall be 5% of the Active Members, with a simple majority needed to approve the proposal.


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