handling, grading, standardizing, packing, preserving, drying, processing, transporting, storing, financing, advertising, selling, marketing and/or distributing of any delivered by its members or any of the products derived therefrom and in connection with the purchase or use by and/or for its members of supplies, machinery, and/or equipment, all in any capacity and on any cooperative basis that may be agreed upon.

Article III

This association shall have the following powers:

21

(a) To borrow money without limitation as to amount of corporate indebtedness or liability; to give a lien on any of its property as security therefor in any manner permitted by law; and to make advance payments and advances to members.

(b) To act as the agent or representative of any member or members in any of the activities mentioned in article II hereof.

(c) To buy, lease, hold, and exercise all privileges of ownership over such real or personal property as may be necessary or convenient for the conduct and operation of the business of the association, or incidental thereto.

(d) To draw, make, accept, endorse, guarantee, execute, and issue promissory notes, bills of exchange, drafts, warrants, certificates, and all kinds of obligations and negotiable or transferable instruments for any purpose that is deemed to further the objects for which this association is formed and to give a lien on any of its property as security therefor.

(e) To acquire, own, and develop any interest in patents, trade-marks, and copyrights connected with or incidental to the business of the association.

(f) To transact business with or for nonmembers in an amount not greater in value than the business which it transacts with its members.22

(g) To cooperate with other similar associations in creating central, regional, or national cooperative agencies, for any of the purposes for which this association is formed, and/or to become a member or stockholder of such agencies as now are or hereafter may be in existence.

(h) To have and exercise, in addition to the foregoing, all powers, privileges, and rights conferred on ordinary corporations and cooperative marketing associations by the laws of this State and all powers and rights incidental or conducive to carrying out the purposes for which this association is formed, except such as are inconsistent with the express provisions of the act under which this association is incorporated, and to do any such thing anywhere; but the enumeration of the foregoing powers shall not be held to limit or restrict in any manner the general powers which may by law be possessed by this association, all of which are hereby expressly claimed.

Article IV

The association shall have its principal place of business in the city of State of

County of

21 In some States, the statutes require that the maximum indebtedness which may be incurred by a corporation be stated in its articles of incorporation. 22 Even though it may be deemed advisable for an association to do business with nonmembers, the statute under which an association is being incorporated should be examined to ascertain that this provision, as well as every other organization matter, is in accord therewith.

402026°-42- -26

Article V

The term for which this association shall exist is the date of its incorporation.23

years from and after

Article VI

The number of directors of this association shall be elected board of directors

for 2 years; and

(Number)

shall be elected for 1 year;

(Number)

for 3 years; and thereafter all directors shall be

(Number) elected for 3 years. The names and addresses of those who are to serve as incorporating directors until the first annual meeting of the members or until their successors are elected and qualified are:

SECTION 1. This association shall not have any capital stock, but shall admit applicants to membership upon such uniform conditions as may be prescribed by the board of directors of the association, or in its bylaws. This association shall be operated on a cooperative basis for the mutual benefit of its members as producers, and membership in the association shall be restricted to producers, who shall patronize the association. The voting rights of the members of the association shall be equal and no member shall have more than one vote. The property rights and interests of each member in the association shall be unequal; and shall be determined and fixed in the proportion that the patronage of each member shall bear to the total patronage of all members with the association. New members admitted to membership shall be entitled to share in the property of the association in accordance with the foregoing general rule.

In testimony whereof, we have hereunto set our hands this

19__.

day of

23 If the act under which the association is organized permits of perpetual existence this article may read, "This association shall have perpetual existence." 24 If the statute under which an association is to be incorporated will permit, it is preferable to state in the articles of incorporation only the minimum number of directors that the association will have, providing in the bylaws, which may be more easily amended, for the actual number.

Before 25

me, a notary public, within and for said county and State on this day of 19--, personally appeared

known to me to be one of the identical persons who executed the within and foregoing instrument, and he acknowledged to me that he executed the same as his free and voluntary act and deed for the uses and purposes therein set forth.

Witness my hand and official seal the day and year above set forth.

The purposes for which this association is formed and the powers which it may exercise are set forth in the articles of incorporation of the association.

Article II

DIRECTORS AND OFFICERS

SECTION 1. Number and qualifications of directors.-The business of the association shall be controlled by a board of directors, each of whom shall be a member of this association or an authorized representative of an incorporated member. No person shall be eligible for the office of director if he is in competition with or is affiliated with any enterprise that is in competition with the association and if a majority of the board of directors of the association find at any time following a hearing that any director is so engaged or affiliated, he shall thereupon cease to be a director.

SEC. 2. Election of directors. At the first annual meeting of the members of this association, directors shall be elected to succeed the incorporating directors. (‒‒‒‒‒‒‒‒) directors shall be elected for 1 year, (‒‒‒‒‒‒‒‒) directors for 2 years, and

(________) directors for 3 years, and thereafter each director shall be elected for 3 years." At least two members shall be nominated for each directorship. Directors shall be elected by secret ballot. The nominee who, among the nominees for each directorship, receives the greatest number of votes shall be declared elected to the directorship for the ensuing term. Directors shall hold office until their successors have been elected and qualified and have entered upon the discharge of their duties."

25 The required number of incorporators should acknowledge and the acknowledgment form should conform to the requirements of the State of incorporation. If desired, directors may be elected annually for a term of 1 year.

26

"It is sometimes deemed advisable to include a provision like the following: No director after having served for two consecutive terms shall be eligible to succeed himself but after a lapse of 1 year shall again be eligible.

SEC. 3. Election of officers.-The board of directors shall meet within

(‒‒‒‒‒‒‒‒) days after the first election and within

(‒‒‒‒‒‒‒‒) days after each annual election and shall elect by ballot a president, vice president, secretary, and treasurer (or a secretary-treasurer), each of whom shall hold office until the election and qualification of his successor unless earlier removed by death, resignation, or for cause. The president and vice president only need be members of the board of directors.

SEC. 4. Vacancies.-Whenever a vacancy occurs in the board of directors, other than from the expiration of a term of office, the remaining directors shall appoint a member to fill the vacancy until the next regular meeting of the members.

SEC. 5. Board meetings.-In addition to the meetings mentioned above, regular meetings of the board of directors shall be held (monthly, quarterly, or semiannually) or at such other times and at such places as the board may determine.

SEC. 6. Special meetings.—A special meeting of the board of directors shall be held whenever called by the president or by a majority of the directors. Any and all business may be transacted at a special meeting. Each call for a special meeting shall be in writing, signed by the person or persons making the same, addressed and delivered to the secretary, and shall state the time and place of such meeting, and the matters to be acted upon.

SEC. 7. Notice of board meetings.—Notice of the regular or special meetings of the directors shall be mailed to each director at least

(‒‒‒‒‒‒‒‒) days prior to the time of such meeting.

SEC. 8. Compensation.-The compensation, if any, of the members of the board of directors and of the executive committee, shall be determined by the members of the association at any annual or special meeting of the association; provided, however, that no member of the board of directors, other than one who is acting as an officer of the association and receiving a regular salary therefor, shall receive compensation or allowance for services rendered the association for more than thirty (30) days in any one year, exclusive of the periods for which compensation is paid for attendance at directors' meetings, or at meetings of the executive committee.

SEC. 9. Quorum.-A majority of the board of directors shall constitute a quorum at any meeting of the board.

Article III

DUTIES OF DIRECTORS

SECTION 1. Management of business.-The board of directors shall have general supervision and control of the business and the affairs of the association and shall make all rules and regulations not inconsistent with law or with these bylaws for the management of the business and the guidance of the members, officers, employees, and agents of the association. They shall have installed an accounting system which shall be adequate to the requirements of the business, and it shall be their duty to require proper records to be kept of all business transactions.

SEC. 2. Employment of manager.-The board of directors shall have power to employ or to authorize the employment of a manager and such other employees as may be deemed necessary, and to fix their compensation. The manager shall have charge of the business of the association under the direction of the board of directors.

No director shall serve as manager.

SEC. 3. Bonds and insurance.-The board of directors shall require the manager and all other officers, agents, and employees charged by the association with responsibility for the custody of any of its funds or negotiable instruments to give adequate bonds. Such bonds shall be furnished by a responsible bonding company and approved by the board of directors, and the cost thereof shall be paid by the association. The board of directors shall provide for the adequate insurance of the property of the association, or property which may be in the possession of the association, or stored by it, and not otherwise adequately insured, and in addition adequate insurance covering liability for accidents to all employees and the public.

SEC. 4. Audits.-At least once in each year the board of directors shall secure the services of a competent and disinterested public auditor or accountant, who shall make a careful audit of the books and accounts of the association and render a report in writing thereon, which report shall be submitted to the members of the association at their annual meeting. This report shall include at least (1) a balance sheet showing the true assets and liabilities of the association; (2) an operating statement for the fiscal period under review which shall show the cost of, and income from, sales and the gross income or loss from each of the commodities handled during the period; (3) an itemized statement of all expenses for the period under review.

SEC. 5. Agreements with members.-The board of directors shall have the power to carry out all agreements of the association with its members in every way advantageous to the association representing the members collectively.

SEC. 6. Depositary.-The board of directors shall have the power to select one or more banks to act as depositaries of the funds of the association and to determine the manner of receiving, depositing, and disbursing the funds of the association and the form of checks and the person or persons by whom same shall be signed, with the power to change such banks and the person or persons signing such checks and the form thereof at will.

Article IV

STOCK CERTIFICATES

SECTION 1. Common stock certificates.

(a) Each certificate of common stock shall have the following statement printed on its face:

The stock evidenced hereby may be purchased, owned, and/or held only by producers who shall patronize the association in accordance with uniform terms and conditions prescribed thereby, and only such producers shall be regarded as eligible members of the association. No stockholder shall have more than one vote in any meeting of the association, regardless of the number of shares owned by him. In the event the board of directors of the association shall find, following a hearing, that any of the stock evidenced hereby has come into the hands of any person who is not eligible for membership, or that the holder hereof has ceased to be an eligible member or that such holder has not, for a period of years, marketed his agricultural products through the association, he shall have no rights or privileges on account of such stock, or vote or voice in the management or affairs of the association (other than the right to participate in accordance with law in case of dissolution), and the association shall have the right, at its option (a) to purchase such stock at its book or par value, whichever is less, as determined by the board of directors of the association; (b) to require the transfer of any such stock at such book or par value to any person eligible to hold the same; or (c) to require the