BY-LAWS OF THE OLONGAPO CITY GOVERNMENT EMPLOYEES’ MULTI-PURPOSE COOPERATIVE

KNOW ALL MEN BY THESE PRESENTS:

We, the undersigned, Filipino citizens, all of legal age and residents of the Philippines, representing at least majority of the members presently employed in various departments of the city government or national government offices in the City and members of the Olongapo City Government Employees’ Multi-Purpose Cooperative (OCGEMPC) a primary non-agricultural multi-purpose cooperative hereinafter referred to as cooperative, do hereby adopt the following code of by-laws.

ARTICLE I
OBJECTIVES AND PURPOSES

Section 1. Objectives and Purposes – The objectives and purposes of this Cooperative are those set forth in its Articles of Cooperation and those generally granted to cooperatives under R.A.9520, and the rules and regulations thereunder.

ARTICLE II
MEMBERSHIP

Section 1. Membership - This Cooperative shall have regular and associate membership/s.

A Regular member is one who has complied with all the membership requirements and entitled to all the rights and privileges of membership.

An Associate member is one who has no right to vote and be voted upon and shall be entitled only to such rights and privileges provided in these by-laws.

Section 2. Qualifications for Membership – Membership is open to bona fide Filipino employees of the City Government of Olongapo and National Government Offices in the City of Olongapo only who can make use of its services, who are in agreement with its purpose and who agree to abide by its By-laws

2.1 A City Government employee is one who renders work for the City, duly admitted by the local chief executive, receives remuneration there from and is under the supervision of the said executive as regards power to discipline.

2.2 A National Government employee in the City of Olongapo is one who is directly employed by a national government agency and is currently, upon application with the Cooperative, assigned whether temporarily or permanently, to perform his/her function respectively as such within the territorial jurisdiction of Olongapo City. This shall include, but not limited to, Police Officers of the Philippine National Police, Fire Officials of the Bureau of Fire Protection, employees of the Department of Justice and the Philippine Supreme Court, teachers at the Department of Education, day care workers of the Department of Social Welfare and Development, employees of the Subic Bay Metropolitan Authority (SBMA), and others.

The prospective member should:

a. Work in the area of operation or more specifically in the City Government or National Government Offices in the City whether as a regular, casual, contractual employee, volunteer or consultant performing functions directly or indirectly related to the aforementioned governments;

b. Pledge to undertake the responsibilities of membership
c. Complete or undertake to complete the prescribed pre-membership cooperative education program: and

d. Use or participate to use the services of the Cooperative more particularly the savings and loaning services and other allied services related thereto.

Section 3. Application for Membership

a. The application for membership shall be in writing on a form provided for the purpose and shall be presented to the Board of Directors for appropriate action.

The application shall be accompanied by a membership fee of FIFTY PESOS (50.00).

b. The applicant shall subscribe for at least FIFTY (50) Shares with a total value of Five Thousand PESOS (P5,000.00) of which at least FIVE HUNDRED PESOS (P500.00) corresponding to FIVE (5) shares shall be paid upon submission of the application for membership. The membership and Subscription agreement shall provide the terms of payment on the unpaid subscription.

However, no member shall own or hold more than TEN PERCENTUM (10%) of the total subscribed capital of the cooperative.

c. Appeal – An applicant rejected by the Board of Directors, may appeal his case to the next general assembly by giving notice to the secretary of the cooperative thirty (30) days before the said General Assembly, whose decision on the matter shall be final.

Section 4. Duties and Responsibilities of a Member - Every member shall have the following duties:

a. Pay the installment on capital stock subscription as it falls due and to participate on the capital build-up of the cooperative;

b. Patronize regularly its business;

c. Participate in its parliamentary affairs;

d. Attend the membership meeting, regular or special;

e. Obey the rules and regulations provided by R.A. 9520 these by-laws, the decisions of the general assembly and the Board of Directors, and policies and decisions that may be promulgated by the Cooperative Development Authority (CDA); and

f. Promote the aims and purposes of the cooperative, the success of the business the welfare of its members and the cooperative movement as a whole.

Section 5. Rights of a Member – Every regular member who is entitled to vote has the following rights:

a. Participate in the deliberation during membership meetings;

b. Vote on all matters brought before such meetings;

c. Avail himself of the services of the cooperative without any discrimination on whatsoever upon compliance with the conditions and requirements is thereof; and
d. Inspect and examine the books of accounts, the minutes books, the share register, and other records of the cooperative during office hours and to exercise other rights and privileges of membership.

5.1 A regular member is entitled to vote and is considered in good standing when he:

a. Has paid the required membership fee of FIFTY PESOS (P50.00) and the value of at least FIVE (5) shares as provided in Section 3 of this Article;

b. It is not delinquent in the payment of his capital contribution and accounts;

c. Has not violated any provision of these by-laws or as prescribed by the Board of Directors;

d. Has attended and completed the prescribed cooperative seminars;

e. Patronizes regularly the business of the cooperative and participates in its parliamentary affairs; and

f. Complies with all obligations, duties, and undertakings of membership.

Section 6. Liability of Members – The liability of a member shall be limited. No member shall be liable for any indebtedness of the cooperative beyond his subscribed shares.

Section 7. Termination of Membership – Membership in the cooperative may be terminated either by automatic termination, voluntary termination or involuntary termination.

a. Automatic Termination of Membership. The death, insanity, permanent incapacity or judicial declaration by a competent court or the insolvency of a member shall be considered an automatic termination of his membership in the Cooperative.

b. Voluntary Termination. A member may, for any reason, terminate his membership by submitting a letter of voluntary termination to the board of directors. However, no member shall be allowed to withdraw or terminate his membership during any period in which he has any pending obligation either as a borrower, co-maker or guarantor of a loan.

c. Involuntary Termination – A member may be terminated by a vote of the majority of all the members of the board of directors for any of the following causes:

c1. When a member has not patronized the services of the cooperative for a period of twelve (12) months;

c2. When a member has continuously failed to comply with his obligations for more than twelve (12) months;

c3. When a member has acted in violation of the by-laws and the rules of the cooperative; and

c4. For any act or omission injurious or prejudicial to the interest or the welfare of the cooperative such as, but not limited to;

a. Maliciously circulating false rumors,
b. Unduly inciting members to cause disunity or upheaval in the Cooperative, or
c. Boycott any of its products, programs or projects
d. Adulteration of cooperative products
e. Act of deception and dishonesty in availing services

No membership fee shall be returned to any member that withdraws or is expelled.

d. Deceased Member – The death of a member shall be considered a withdrawal from membership. The deposits of a deceased member may be held and controlled by his designated beneficiaries who may withdraw the same and receive the full amount of his deposit made and all dividends less the charges; but the Board may reserve the right to withhold the settlement for sixty (60) days after notification of intention to withdraw shall have been received.

Section 8. Manner of involuntary Termination - The Board of Directors shall notify in writing the member who is being considered for termination and shall give him the opportunity to be heard.

After hearing, the Board of Directors shall render its decision in writing within 15 days and the same shall be given to said member by the Secretary of the Board, personally or by registered mail. The decision of the Board shall be appealable within (30) days from receipt thereof to the appeals and grievance committee whose decision on the matter shall be final.

Section 9. Appraisal and payment of Members Interest Upon Termination of Membership – Upon the termination of the membership of a member, the Board of Directors shall determine the book value of the member’s share capital which shall in no case exceed the par value, as established at the year-end audited financial statement nearest to the date of termination and shall fix the amount thereof in money to be paid subject to the availability of funds.

9.1 Within one (1) year after such termination, at the option of the terminated member or his designated beneficiaries, he may in lieu of cash, be issued a revolving fund certificate or other evidence of indebtedness; provided however that payment of said equity in cash shall not be made if on account of such payment the value of the cooperative’s assets would be less than the aggregate amount of its debts and liabilities exclusive of capital stock subscribes or will diminish the reserves required under existing laws.

Section 10. Associate Members – Associate members are those who invest in the Cooperative only through savings and/or time deposits. A member who has been inactive for one year or more shall be considered an associate member, and his/her share capital account shall be converted to a savings account.

A member who is terminated from or ceases to work for the City or a national office assigned in the City and is inactive for more than one year, shall be demoted to the status of associate member and his capital contribution converted to a saving account.

Associate members are not obliged to perform the duties of a member as provided in Section 3 of this Article, nor are they entitled to the rights of a member as provided by Section 4 hereof.

Section 11. Refund of Share Capital Contribution - A member whose membership is terminated shall be entitled to a refund of his share capital contribution and all other interest in the Cooperative. However, such refund shall not be made if upon payment the value of the assets of the Cooperative would be less than the aggregate amount of its debts and liabilities exclusive of his share capital contribution. In which case, the terminated member shall continue to be entitled to the interest of his share capital contributions, patronage refund and the use of the services of the Cooperative until such time that all his interests in the Cooperative shall have been duly paid. Upon the acceptance of his withdrawal or approval of his termination, however, he loses his right to attend, participate and vote in any meeting of the Board of Directors or the general assembly.

ARTICLE III
GOVERNANCE

Section 1. Membership Control – Subject to the provisions of R.A.9520, and regulations issued there under, final authority in the management and administration of the affairs of the cooperative is vested in the general assembly.

Section 2. The General Assembly – The general assembly of the cooperative shall be composed of members entitled to vote duly assembled and constituting a quorum.

Section 3. Powers and Limitations of the General Assembly – The general assembly has the power:

a) To elect and removed directors, officers and committee members for cause;

b) To hear and pass upon the reports of the Board of Directors, Officers and committees;

c) To approve annual budget and make final decisions regarding any drastic change in financial policies, subject to legal restrictions;

d) To determine and approve the amendment/s in the articles of cooperation and/or by-laws;

e) To exercise final authority on all matters vitally affecting the cooperative;

f) To act as a final arbiter in any dispute or disagreement which may arise between or among the member of the Board of Director and committees, officers and individual members;

g) To approve development plans of the cooperative; and

h) To exercise all powers expressly provided by law and By-Laws

Section 4. Annual General Assembly – The general assembly shall be held not later than March (first Friday of March) of each year at the principal office of the cooperative or at any place within its area of operation and at such time as the Board of Directors may designate.

Section 5. Special General Assembly – A special general assembly maybe called at any time by a majority vote of the Board of Directors to consider urgent matters requiring immediate membership decision. A special general assembly shall be called by the Board of Directors within thirty (30) days from the receipt of special request from (a) at least ten (10) percentum of the total number of members entitled to vote; (b) the Audit and Inventory supervisory committee; (c) the federation or union of which the cooperative is a member.

Section 6. Notice of Meeting - All notices of meetings shall be in writing and shall include the date, time, place, and agenda thereof stated therein.

Notice of General Assembly – Written notices of all meetings shall be issued by the Secretary, through flyers and bulletin boards, upon the members at their respective offices, at least two (2) weeks prior to the general assembly.

The notice for an annual general assembly shall be accompanied by the agenda, minutes of meeting of the last general assembly, consolidated reports of the Board of Directors and committees complete with financial statements, proposed amendments to the articles of cooperation and by-laws if any, and other papers needed by the members to arrive at sound and intelligent decisions during the assembly.

Notice of any special general assembly shall state the purpose for which it is to be held and no business other than the stated purpose or those related thereto shall be considered in the meeting.

Section 7. Fiscal Year – The fiscal year of this cooperative shall commence on the first day of January and end of the last day of December.

Section 8. Agenda – As far as practicable, the order of business at each annual meeting shall be:

a. Determination and Confirmation of Quorum;
b. Proof of due notice
c. Consideration of the minutes of the last general meeting;
d. Matters arising from the previous minutes;
e. Consideration of the consolidated report of officers, board of director and committees including audited statements of the financial condition and operation;
f. New business;
g. Other matters
h. Election of directors and committee members; and
i. Adjournment

Section 9. Quorum at the Membership Assembly – At the annual or special general assembly, Twenty-Five Per centum (25%) of the total number of members entitled to vote shall constitute a quorum.

Section 10. Manner of Voting – (a) Members entitled to vote shall be qualified to vote and participate in the general assembly of the cooperative. No member of the cooperative shall be entitled to more than one (1) vote regardless of the share capital owned. (b) Election and removal of Directors and Committee members shall be in any manner that will truly and correctly reflect the decision of the membership.

ARTICLE IV
BOARD OF DIRECTORS

Section 1. Board of Directors and Number – The business of the cooperative shall be administered by a Board of Directors of seven (7) members.

Section 2. Qualification of and Disqualification for Directors – All members in good standing, who have the time and the willingness to serve, and have served for at least one year in any of the committees, are qualified to be voted as directors, except those who are under any of the following circumstances which disqualify them to be voted upon to the position of director or to continue as such:

a) Holding any elective position in the government, except that of party list representative or being an officer of a cooperative he or she represents;

b) Having conflicting interest with the business of the cooperative;

c) Having served as director of the Cooperative for three (3) consecutive terms, provided that after a lapse of not less than one year after having served for three consecutive terms a former director shall again qualify for the position of director;

d) The members of the board of directors shall not hold any other position directly involved in the day-to-day operation and management of the cooperative;

e) Having been absent for three (3) consecutive regular meetings without reasonable cause;

f) Being an official or employee of the Cooperative Development Authority;

g) Having been convicted in administrative proceedings or civil/criminal suit involving financial and/or property accountability; and

h) Having been disqualified by law.

Section 3. Election of Directors – The members of the Board of Directors shall be elected by secret ballot by members entitled to vote during the annual regular general assembly meeting or special general assembly meeting called for the purpose. Unless earlier removed for cause, or have resigned or become incapacitated, they shall hold office for a term of 2 years or until their successors shall have been elected and qualified; Provided further that no director shall serve for more than 3 consecutive terms, except as provided in Section 2c above. The term of the incorporating directors shall expire upon the election of their successors in the first regular general assembly after registration.

Section 4. Election of Officers within the Board and Regular Meeting – A meeting of the members of the Board of Directors shall be held within ten (10) days after each annual general assembly to elect by secret from among themselves a Chairman, and Vice Chairman, and to elect or appoint the Treasurer and Secretary from outside of the Board.

For committees elected by the General Assembly and/or appointed by the BOD, procedural process of electing the Chairman, Vice Chairman or other positions among themselves should be in accordance with the process mentioned above.

The regular meeting of the Board of Directors shall be held at least once a month. However, the Chairperson or majority of the directors may at any time call a special Board meeting to consider urgent matters. The call shall be addressed and delivered to the Secretary stating the date, time and place of such meeting and the matters to be considered. Notice of regular or special meetings of the Board of Directors, unless dispensed with, shall be served by the Secretary in writing to each director at least 5 days before such meeting.

Majority of the total number of directors constitutes a quorum to transact business. Any decision or action taken by the majority members of the Board of Directors in a meeting duly assembled shall be a valid cooperative act.

Section 5. Vacancies - Any vacancy occurring in the Board of Directors by reason of death, incapacity, removal or resignation may be filled by a majority vote of the remaining directors, if still constituting a quorum; otherwise, such vacancy shall be filled by the general assembly in a regular or special meeting called for the purpose. The elected director shall serve only for the unexpired term of his predecessor in office.

In the event that the general assembly failed to muster a quorum to fill the positions vacated by directors whose term have expired and said directors refuse to continue their functions on a hold-over capacity, the remaining members of the Board together with the members of the Audit Committee shall designate, from the qualified regular members of the general assembly, their replacements who shall serve as such until their successors shall have been elected and qualified in a regular or special general assembly meeting called for the purpose.

If a vacancy occurs in any elective committee it shall be filled by the remaining members of the said committee, if still constituting a quorum, otherwise, the Board, in its discretion, may appoint to fill such vacancy.

Section 6. Removal of Directors and Committee Members - All complaints for the removal of any elected officer shall be filed with the board of directors and such officer shall be given the opportunity to be heard. Majority of the board of directors may place the officer concerned under preventive suspension pending the resolution of the investigation. Upon finding of a prima facie evidence of guilt, the board shall present its recommendation for removal to the general assembly. An elective officer may be removed by three-fourths (¾) of the regular members present and constituting a quorum, in a regular or special general assembly meeting called for the purpose. The officer concerned shall be given the opportunity to be heard at said assembly.

In cases where the officers sought to be removed consist of the majority of the BOD at least 10% of the members with voting rights may file a petition with the CDA upon failure of the BOD to call an assembly meeting to commence the proceeding for their removal. The decision of the GA on the matter is final and executory.

An officer elected or appointed by the Board of Directors or any committee may be removed from office for cause by a majority vote of all the members of the Board or Committee as the case may be.

Section 7. Powers and Duties of the Board - The board of directors shall be responsible for the strategic planning, direction-setting and policy-formulating activities of the cooperatives. . Provided further that any members of the board shall not hold any other position directly involved in the day-to-day operation and management of the cooperative.

ARTICLE V
COMMITTEE

Section 1. Audit and Inventory Committee - An Audit and Inventory Committee is hereby created and shall be composed of 3 members to be elected during a general assembly meeting and shall hold office for a term of TWO (2) years or until their successors shall have been elected and qualified. Within TEN (10) days after their election, they shall elect from among themselves a Chairman, Vice-Chairman and a Secretary. No member of the committee shall hold any other position within the Cooperative during his term of office. The Committee shall provide internal audit service, maintain a complete record of its examination and inventory, and submit an audited financial report quarterly or as may be required by the Board and the general assembly.

The audit committee shall be directly accountable and responsible to the General Assembly. It shall have the power and duty to continuously monitor the adequacy and effectiveness of the cooperative's management control system and audit the performance of the cooperative and its various responsibility centers.

Section 2. Election Committee - An Election Committee is hereby created and shall be composed of three members to be elected during a general assembly meeting and shall hold office for a term of two (2) years or until their successors shall have been elected and qualified. Within 10 days after their election they shall elect from among themselves a Chairman, Vice-Chairman and a Secretary. No member of the committee shall hold any other position within the Cooperative during his term of office.
The Committee, as an independent body, shall promulgate rules and regulations which shall govern the conduct of elections in accordance with the provisions of the by-laws; pass upon the qualifications of candidates, supervise the conduct of elections, canvass and certify in writing the returns; proclaim the winning candidates; and hear and decide all election protests. Election protests filed by the members of the Election Committee shall be decided by the Board of Directors.

The decision of the Election Committee is appealable to the Board of Directors within FIFTEEN (15) days from receipt thereof who shall decide the case within thirty (30) days after receipt of the records of the case. The decision of the Board is likewise appealable to the Cooperative Development Authority FIFTEEN (15) from receipt of said decision. At the option of any of the parties, however, the case may be submitted for arbitration to a special board composed of THREE (3) persons, ONE (1) of whom shall come from the Cooperative Development Authority and the TWO (2) to be nominated by each of the parties concerned.

Section 3. Education, Training and Membership Committee - An Education, Training and Membership Committee is hereby created and shall be composed of THREE (3) members to be appointed by the Board of Directors and shall serve for a term of TWO (2) years, without prejudice to their reappointment. Except for the Vice-Chairman, no member of the committee shall hold any other position within the Cooperative during his term of office.

The committee shall be responsible for the planning and implementation of the internal information, educational and human resource development programs of the Cooperative for its members, officers and the communities within its area of operation. It shall screen application for membership prior to approval of the Board of Directors.

Section 4. Mediation and Conciliation Committee - A Mediation and Conciliation Committee is hereby created and shall be composed of THREE (3) members to be appointed by the Board of Directors. Within TEN (10) days after their election, they shall elect from among themselves a Chairman, Vice-Chairman and a Secretary who shall serve for a term of TWO (2) years or until successors shall have been elected and qualified. No member of the Committee shall hold any other position in the Cooperative during his term of office.

The Mediation and Conciliation Committee shall have the following powers and functions:

a. To conciliate, hear and decide all intra-cooperative disputes between and/or among members, officers, directors and community.

b. Subject to the approval of the general assembly, to issue supplemental rules and procedures concerning conciliation processes as may be deemed necessary; and

c. To exercise such other powers as may be necessary to ensure speedy, just, equitable and inexpensive settlement of disputes within the Cooperative.

MC 2007- 03-05 dated March 30, 2007 issued and pertinent rules and regulations prescribed by the Authority shall be observed in the composition, appointment, procedure of conciliation and mediation proceedings.

Section 5. Ethics Committee - An Ethics Committee is hereby created and shall be composed of THREE (3) members to be appointed by the Board of Directors. Within TEN (10) days after their appointment, they shall elect from among themselves a Chairman, Vice-Chairman and a Secretary who shall serve for a term of TWO (2) years or until successors shall have been appointed and qualified. No member of the Committee shall hold any other position in the Cooperative during his term of office. The powers, function, duties and responsibilities of the member shall be in accordance to the implementing rules and regulations promulgated by the Cooperative Development Authority
Section 6. Other Committees - By a majority vote of all its members, the Board of Directors may form such other committees as may be deemed necessary for the smooth operation of the Cooperative.

ARTICLE VI
OFFICERS OF THE COOPERATIVE

Section 1. Officers and their Duties - The officers of the cooperative shall include the members of the different committees created by the general assembly, general manager or chief executive officers, secretary, treasurer and members holding other positions as may be provided for in this by-laws, shall serve according to the functions of their respective offices as follows:

Chairman – The Chairman shall:
a. Preside over all meetings of the Cooperative and of the Board of Directors;

b. Sign all share certificates, revolving fund certificates, contracts and other instruments or papers essential to the operations of the Cooperative; and

c. Perform such other necessary functions, subject to the restrictions which may be imposed by the Board of Directors or the general assembly.

Vice-Chairman – In the absence or incapacity of the Chairman, the Vice-Chairman shall discharge the duties and responsibilities of the Chairman; provided, however, that in case of death, resignation, removal or permanent incapacity of the Chairman, the Board of Directors may elect a new Chairman. The Vice-Chairman of the Board shall serve as ex-officio chairman of the Education and Training Committee.

Treasurer – The Treasurer shall:
a. Take custody of all monies, securities and papers acquired by the Cooperative, maintain a complete records of all its transactions;

b. Keep a complete record of its cash transaction for the establishment of proof of his cash position at any given time and date;

c. Pay all financial obligations incurred by the Cooperative as approved by the Manager and/or Board of Directors;

d. Render report and certify the correctness of the cash position of the Cooperative in all financial statements and other reports submitted to the Board of Directors, the general assembly and the Cooperative Development Authority;

e. Turn over to his successor all monies, securities, papers, books and other properties belonging to the Cooperative in his possession upon the expiration/term of office;

f. Act as Secretary in case of the latter’s absence or incapacity to perform his duties; and

g. Perform such other duties as the Board of Directors may prescribe.

Secretary – The Secretary shall:
a. Keep and maintain a complete registry of all members and records/minutes of all meetings of the Board of Directors and the General Assembly;

b. Give notice of all meetings called;

c. Keep and maintain the share and Transfer book and serve as the custodian of the corporate seal of the Cooperative;

d. Turn over to his successor all books, records and other properties belonging to the Cooperative in his possession upon the expiration/termination of his term of office; and;

e. Act as a Treasurer in case of the latter’s absence or inability to perform his duties as the Board of Directors may prescribe.

Section 2. Liabilities of Directors, Officers and Committee Members - Directors, officers and committee members, who willfully and knowingly vote for or assent to patently unlawful acts, or who are guilty of gross negligence or bad faith in directing the affairs of the Cooperative or acquire any personal or pecuniary interest in conflict with their duties as Directors, officers or committee members shall be liable jointly and severally for all damages resulting therefrom to the Cooperative, members and other persons.

When a director, officer or committee member attempts to acquire, or acquires in violation of his duties, any interest or equity adverse to the Cooperative in respect to any matter which has been reposed in him in confidence, he shall, as a trustee for the Cooperative, be liable for damages or loss of profits which otherwise would have accrued to the Cooperative.

Section 3. Management Staff - The Board of Directors shall appoint the members of the Management Staff; fix their compensation and tenure of office.

Section 4. The General Manager - No person shall be appointed to the position of general manager unless he possesses the following qualifications and none of the disqualifications herein enumerated:

a. He must be familiar with the business operation of the Cooperative;

b. He must have at least two (2) years experience in the operations of Cooperative or related business;

c. He must not be engaged directly or indirectly in any activity similar to the business of the Cooperative;

d. He must not have been convicted of any administrative, civil or criminal case involving moral turpitude, gross negligence or grave misconduct in the performance of his duties;

e. He must not be addicted to any form of gambling or immoral or vicious habits;

f. At the time of his appointment he must have no pending administrative, civil or criminal case involving financial and/or property accountabilities; and

g. He must be willing to undergo pre-service and/or in-service trainings.

Section 5. Duties of the General Manager - The General Manager shall:

a. Have general charge of all the phases of the business operations of the Cooperative, subject to the policies and guidelines set by the board of Directors and the General Assembly.

b. Maintain records and accounts of the Cooperative in such manner that the true condition of its business may be ascertained there from at any time.

c. Render reports monthly, annually or as may be required by the Board of Directors or the general assembly, and preserve the books, documents, correspondence and records of whatever nature concerning the operations of the Cooperative which may be come into his possession;

d. Subject to the policies set by the Board of Directors, employ, supervise and/or dismiss any agent or employee in the management force; and

e. Perform such other duties as the Board of Directors may prescribe and turn over to his successor all properties belonging to the Cooperative in his possession or over which he has control upon the expiration/termination of his services.

Section 6. Accountant/Bookkeeper - No person shall be appointed to the position of accountant/bookkeeper unless he possesses the following qualifications and none of the disqualifications herein enumerated:

a. He must be knowledgeable in accounting and bookkeeping and must have at least two (2) years experience in Cooperative or related business;

b. He must not be engaged directly or indirectly in any activity similar to the business of the Cooperative;

c. He must not be convicted of any administrative, civil or criminal case involving moral turpitude, gross negligence or grave misconduct in the performance of his duties;

d. He must not be addicted to any form of gambling or immoral or vicious habits;

e. He must be willing to undergo pre-service and/or in-service trainings in accounting; and

f. At the time of his appointment, he must have no pending administrative, civil or criminal case involving financial and/or property accountabilities.

Section 7. Duties of the Accountant - The Accountant of the Cooperative, who shall be under supervision and control of the General Manager shall:

a. Install an adequate and effective accounting system within the Cooperative;

b. Render reports on the financial condition and operations of the Cooperative monthly, annually or as may be required by the Board of Directors and/or the general assembly,

c. Provide assistance to the Board of Directors in the preparation of annual budget;

d. Keep, maintain and preserve all books of accounts, documents, vouchers, contracts and other records concerning the business of the Cooperative and make them available for auditing purposes to the Chairman of the Audit Committee; and

e. Perform such other duties as the Board of Directors may require.

Section 8. Compensation - Subject to the approval of the general assembly, the members of the Board and Committees may, in addition to per diems for actual attendance to board and committee meetings, and reimbursement of actual and necessary expenses while performing functions in behalf of the cooperative, be given regular compensation; Provided, further, that the directors and officers shall not be entitled to any per diem when, if in the preceding calendar year, the cooperative reported a net loss or had a dividend rate less than the official inflation rate for the same year.

ARTICLE VII
CAPITAL STRUCTURE

Section 1. Source of Funds - The Cooperative may derive its funds from any or all of the following sources:

a. Member’s share capital contribution, common and/or preferred;

b. Revolving capital build-up which consist of the deferred payment of patronage refund or interest on share capital;

c. Loans and borrowings including deposits;

d. Subsidies, grants, legacies, aids, donation and such other assistance from any local or foreign institution, public or private;

e. Retentions from the proceeds of services/goods procured by members; and

f. Other sources of funds as may be authorized by law.

Section 2. Continuous Capital Build-Up - Every member shall have invested in any or all of the following:

a. At least P100 of his monthly income;

b. At least 50% of his annual interest on capital and patronage refund; and

c. At least 3% of the Regular Loan.

Section 3. Borrowing - The Board of Directors, upon approval of the General Assembly, may borrow money from any source, local or foreign, under such terms and conditions that best serve the interest of the Cooperative.

Section 4. Revolving Capital - To strengthen the capital structure of the Cooperative, the general assembly may authorize the Board of Directors to raise a revolving capital by deferring the payment of patronage refunds and interest on share capital, or such other schemes as may be legally adopted. To implement this provision, the Board of Directors shall issue a Revolving Capital Certificate with serial number, name, rate of interest, date of retirement and such other rights and privileges or restrictions as may be deemed just and equitable.

Section 5. Retentions - The general assembly may authorize the Board of Directors to raise additional capital by deducting a certain percent on a per unit basis from the proceeds of services and/or goods procured by members.

Section 6. Share Capital Contribution - Share Capital Contribution refers to the unit of capital stated in the Common and/or Preferred shares issued by the Cooperative in accordance with its Articles of Cooperation, subscribed and paid for by a member.
Common shares shall be issued only to regular members. Preferred shares, on the other hand, may be issued to regular or associate members with such rights, privileges, or restrictions as may be provided by the Board of Directors, subject to the approval by the General Assembly.

Section 7. Share Capital Certificate - The Board of directors shall issue a Share Capital Certificate only to a member who has fully paid his subscription. The Certificate shall be serially numbered and contain the share holder’s name, the number of shares owned, the par value, and duly signed by the Chairman and the Secretary, and bearing the official seal of the cooperative. All certificates issued and/or shall be registered in the cooperative’s Share and Transfer Book.

The shares may be purchased, owned or held only by persons who are eligible for membership. Subject to existing government rules or laws, interests shall be paid only to paid-up shares which may be in cash; or credited as payment of unpaid subscriptions, outstanding accounts, or additional shares or to the revolving fund of the cooperative.

Section 8. Transfer of Shares - The Cooperative shall have the first option to buy any share offered for sale. The amount to be paid for such shares shall be the par value or the present market value whichever is lower, provided that:

a. The transferee has held such shares or interests for at least ONE year;

b. The transfer is made to a member of the cooperative or to a person who falls within the field of membership of the cooperative, and that said person is acceptable to the cooperative; and

c. The Board has approved such transfer.

The transfer of shares shall not be binding to the cooperative until such transfer has been registered in the share and transfer book. No transfer shall be completed until the old certificate have been endorsed and surrendered to the Cooperative and a new certificate is issued in the name of the member-transferee. If the last transferee, is not a member but qualified to be a member, he shall be required to pay the membership fee and a transfer fee of FIVE HUNDRED PESOS (P500.00).

In case of lost or destroyed share certificate, the Board of Directors may issue a replacement after the owner thereof executes a sworn affidavit in triplicate, setting forth the following:

a) Circumstances as to how, when and where said certificate was lost or destroyed;

b) The serial number of the certificate; and the number of shares it represents; and

The lost or destroyed certificate has never been transferred, sold or endorsed to any third party; and that should the same be found, the owner shall surrender it to the cooperative. Any false representation or statement made in the aforesaid affidavit shall be a ground for expulsion from the cooperative.

ARTICLE VIII
OPERATIONS

Section 1. Primary Consideration - Adhering to the principle of service over and above profit, the Cooperative shall endeavor to:

a. Formulate and implement program strategies that will provide its members and the communities within its area of operation needed goods/services; control a significant segment of the retail industry and stabilize the prices of basic commodities;

b. Adopt and implement plans and programs which insures the continued build-up of the cooperative’s capital structure with the end view establishing other needed services for the members and the public;

c. Formulate and implement studies and/or programs that will address the needs of members;

Section 2. The cooperative is organized to provide its members with quality goods and services requirements and to operate an enterprise that will provide needed goods and services to the members and/or community. In either case, the cooperative shall be operated primarily to ensure efficient and reliable services at competitive prices.

Section 3. The cooperative shall endeavor to have a sizeable portion of the retail trade and/or services and influence the traffic and prices of the goods and/or services toward stabilizing prices of these goods/services. In this regard, the cooperative shall endeavor to serve as the direct link between the producers and the consumers/users to minimize the factors of merchandising and bring down prices of commodity to a realistic level.

Section 4. For purposes of ensuring efficient and reliable service, the cooperative shall accept only qualified persons presently engaged in the same or similar service or persons who can be trained for the technical competence required by the service, maintain standards of quality befitting the status of its clientele, exercise close supervision over its members/workers and conduct periodic and continuing training to develop skills and update the competence of its members-workers.

Section 5. Loans may be granted to members entitled to vote either for providential or productive purpose.

In the determination of the amount of the loans to be granted, the applicant’s character, capacity to pay, collateral or securities offered to insure the payment of the loans shall be considered.

Section 6. Condition on Loans – The Board of Directors shall prescribe the terms and conditions for the granting of loans, the maximum amount that may be granted a member, the rate of interest, fines for payment in default, maximum period of repayment, and all other factors as well, to facilitate the loans in operation and safeguard the interest of the members and the borrowers. The Board may determine the type and minimum amount of loans that require Board approval.

In determining the rate of interest, the Board shall be guided by the overriding principle of service above profit.

Section 7. Renewal of Loans – Regular loans may be renewed provided a certain percent thereof has already been paid. The percentage of payment shall be determined by the Board from time to time as changes in the total maximum loans allowed to all members occur and as the need arises.

Section 8. Application for Loans – A loan application shall state specifically the purpose or purposes for which the money is to be used. Any false representation or statement made in the application shall be a ground for the cancellation of the loans or if the money has been used for a purpose other than those for which it was granted, the loan shall at once become due and demandable.

Section 9. Restrictions on Officers, Directors, and Committee Members – No director or committee member shall vote on a loan requested by a member of his family, natural or by affinity to the third degree or on a loan requested by a person who owes a debt to him or to any member of his family; neither can he become a co-maker, surety nor indorser on any loan contracted with the cooperative. The application for a loan by a member of the credit committee shall be subject to the approval of the Board of Directors.

Section 10. Appeal – An appeal from the decision of the Credit Committee for abuse of discretion or violation of any existing policy of the Board of Directors may be made to the joint meeting of the Board of Directors and the Audit and Inventory Committee whose decision on the matter shall be final.

Section 11. Deposits – The cooperative shall receive two kinds of deposits:

a) Savings Deposits – Any member, in addition to his share capital investment, may open a savings deposit, the rate of interest of which shall be determined by the Board at the beginning of each fiscal year in no case to exceed the rate prescribed by Central Bank of the Philippines.


Savings deposits not falling below FIVE HUNDRED PESOS (500.00) during any calendar month shall be entitled to interest to be computed quarterly based on the lowest monthly balance outstanding during the period. The interest shall be credited to the depositor’s account, and the same shall earn interest from the date it is credited, at the same rate as savings deposits.

The Board of Directors shall prescribe the rules and regulations governing withdrawals from the savings deposits.

b) Time Deposits – Deposits for a fixed period of time and for a fixed rate of interest may be accepted by the cooperative.

Section 12. The cooperative shall mobilize the resources of its members for capital formation toward financing other services needed by them and the community.

ARTICLE IX
ALLOCATION AND DISTRIBUTION OF NET SURPLUS

Section 1. At the end of its fiscal year, the Cooperative shall allocate and distribute its net surplus as follows:

A. Reserve Fund. TEN percent (10%) shall be set aside for Reserve Fund.

a. The reserve fund shall be used for the stability of the Cooperative and to meet net losses in its operations. The general assembly may decrease the amount allocated to the reserve fund when it has already exceeded the authorized share capital. Any sum recovered on items previously charged to the reserve fund shall be credited to such fund.

b. The reserve fund shall not be utilized for investment, other than those allowed in the Cooperative Code. Such sum of the reserve fund in excess of the authorized share capital may be used at any time for any project that would expand the operations of the cooperative upon the resolution of the general assembly.

c. Upon the dissolution of the cooperative, the reserve fund shall not be distributed among the members. However, the general assembly may resolve:

1. To establish usufructuary fund for the benefit of any federation or union to which the cooperative is affiliated; or

2. To donate, contribute or otherwise dispose of the amount for the benefit of the community where the cooperative operates. If the member could not decide on the disposition of the reserve fund, the same shall be given to the federation or union to which the cooperative is affiliated.

B. Education and Training Fund. TEN percent (10%) shall be set aside for Education and Training Fund.

a. Half of the amount allocated to the education and training fund annually under this subsection may be spent by the cooperative for education and training purposes; while the other half may be remitted to a union or federation of which the cooperative is a member.

b. Upon the dissolution of the cooperative, the unexpended balance of the education and training fund pertaining to the cooperative shall be credited to the cooperative education and training fund of the chosen union or federation.

C. Community Development Fund. THREE percent (3%) shall be used for projects and activities that will benefit the community where the cooperative operates.

D. Optional Fund. SEVEN percent (7%) shall be set aside for Optional Fund for land and building fund, and any other necessary expenses.

Interest on Share Capital and Patronage Refund. The remaining net surplus shall be made available to the members in the form of interest on share capital not to exceed the normal rate of return on investment prescribed by law, and patronage refunds. The sum allocated for patronage refund shall be made available at the same rate to all patrons of the cooperative in proportion to their individual patronage, subject to the following rules:

a. The patronage refund of a member with fully paid share capital shall be paid to him in cash or at this option be credited to his account as additional share capital;

b. The patronage refund of a member with unpaid share capital subscription shall be credited to his account as payment of his unpaid subscriptions until the same shall have been fully paid;

c. For non-member patrons, their proportionate patronage refunds shall be set aside in a general fund created for the purpose. Their individual patronage refund shall be credited to their respective names only upon request and presentation of evidence of the amount of his patronage. When the amount so accumulated under his name within a period of ONE year equals the minimum share capital contribution for membership and he is qualified and willing to comply with the requirements for membership, said non-member patron shall be considered member of the cooperative upon payment of membership fee.

d. If within the period specified in the preceding paragraph, any non-member patron who has accumulated the sum necessary for membership, but refuses or fails to qualify for membership, the amount so accumulated in his account together with any part of the general fund for non-member patrons shall be credited to the reserve fund or to the education and training fund of the cooperative at the option of the general assembly.

ARTICLE X
SETTLEMENT OF DISPUTES

Section 1. Mediation and Conciliation Procedures - All intra-cooperative disputes shall be settled within the cooperative. If amicable settlement is not feasible, unless modified or amended by the general assembly, the following rules and procedures shall govern all conciliation processes within the cooperative:

1. Parties to a complaint. The party who files a complaint shall be called a Complainant and the party being charged shall be called the Respondent.

2. Who may file a complaint? Any member who has a cause of action against any member, officer or member of any committee, or of the Board of Directors shall file a written complaint, in any form and in such numbers as there are respondents, to the Secretary of the Conciliation Committee, stating the following:

a. Name, Address, position in Cooperative and status of membership of the complainant and the respondent/s if known;

b. brief statement of facts and circumstances which caused commission or omission of the act complained of;

c. Rights violated and evidence or testimony of witnesses; and

d. Prayer which shall state the relief sought and such other relief as may be deemed just and equitable.

1. Baseless complaint. Within TEN (10) days from receipt of the complaint, the committee shall determine the merit of the complaint. If upon its sound discretion, the complaint is found to be baseless or without merit, it may out rightly dismiss the same and inform in writing the complainant, expressly stating the legal and factual bases of its decision.

2. Valid cause of action. If the complaint states a valid cause of action, the committee shall forthwith inform in writing the respondent/s providing him a copy of complaint, and directing him to submit his answer within ten (10) days from receipt thereof. The Committee Chairman may, upon written request by the respondent, extend the period within which to file his answer provided that it shall not exceed FIFTEEN (15) days.

3. Withdrawal of complaint. At any time before judgment, the complainant may, in writing, withdraw his complaint or enter into a compromise agreement and the case shall be considered dismissed or settled, as the case may be.

4. Answer. In his answer, the respondent shall specifically admit or deny, or deny only a part of averment in the complaint. He shall set forth the substance of the matter upon which he relies to support his denial. If he denies only a part of the averment, he shall specify so much of it, as it is true and deny the remainder. He may also state that he had no sufficient knowledge as to the truth of a certain matter alleged in the complaint and this shall have the effect of denial. Any averment in the complaint not specifically denied shall be deemed admitted.

5. Preliminary conference. Within TEN (10) days from the receipt of the answer, the committee shall set a preliminary conference whereby only the parties are invited for possible amicable settlement. If no settlement is made, the chairman may, at his discretion or upon request of either party, set another conference, which shall not be later than ten (10) days. Any party may waive his right to a preliminary conference and instead move in writing for a formal hearing. In which case, the chairman shall set a date, time and place of hearing and the secretary shall notify in writing the parties at least FIVE (5) days before the date fixed.

6. Manner of hearing. The Committee may adopt any manner of hearing that best serve the purpose of resolving the dispute objectively, fairly and amicably. The Committee shall always exert all possible efforts to settle the dispute or encourage the parties to enter into a compromise agreement. The Committee may schedule a series of hearings until the parties shall have completed the presentation of their respective evidence. After which, it shall decide the case within FIFTEEN (15) days from the date of the last hearing, categorically stating the legal and factual basis of its decision.

7. Appeal to the Board of Directors. Any party to a controversy may appeal to the Board of Directors within FIVE (5) days from receipt of a copy of the decision. After the period to appeal, the decision of the committee shall become final and executory and can no longer be reopened, except when the appealing party can show proof that the decision is patently erroneous or obtained through fraud, accident, mistake and excusable negligence or the Committee has committed grave abuse of discretion.

8. Decision of the Board. Within TEN (10) days from receipt of the records of the case, the Board of Directors, constituting a quorum, shall review and decide the case, specifically stating the reasons and basis of its decision. The parties may be summoned to appear before the Board of Directors to clarify certain matters, or to submit additional evidence.

9. Appeal to the General Assembly. The decision of the Board of Directors may be appealed to the general assembly whose decision shall be final, save those reserved to the adjudicatory powers of the Cooperative Development Authority as provided under the Cooperative Code of the Philippines and other existing rules and laws.

Section 2. Disputes Involving Members of the Mediation and Conciliation Committee and Board of Directors - If one of the parties to a controversy is a member of the Conciliation Committee, the chairman shall endorse the case to the Board of Directors who shall resolve the case following the procedures prescribed in the proceeding section.

If one or both parties are members of the Board of Directors and the Conciliation Committee, the Chairman of the Committee shall communicate in writing such fact to the Chairman of the Board of Directors who shall forthwith call a special board meeting to form a five-man Special Conciliation Committee, consisting of the heads of Audit and Election Committees, the Secretary and one representative of each party. The special committee shall convene immediately and after electing from among themselves the Chairman, Vice-Chairman and the Secretary, proceed to resolve the case in accordance with the procedures prescribed in the proceeding section. The committee shall automatically cease to exist upon the final resolution of the controversy.

The rules on conciliation and mediation prescribed by the Authority shall have suppletory application.
ARTICLE XI
MISCELLANEOUS

Section 1. Investment of Capital - The Cooperative may invest its capital in any or all of the following:

a. Shares or debentures or securities of any other cooperative;
b. Cooperative bank or any reputable bank in the locality;
c. Securities issued or guaranteed by Government; and/or
d. Real Estate primarily for the use of the Cooperative or its members; or
e. In any other manner approved by the general assembly.

Section 2. Accounting System - The Cooperative shall keep, maintain and preserve all its books of accounts and other financial records in accordance with generally accepted accounting principles and practices, applied consistently from year to year, and subject to existing rules and laws.

Section 3. External Audit - At least once a year, the Board of Directors shall in consultation with the Audit Committee, cause the audit of the books of accounts of the Cooperative by an independent Certified Public Accountant.

Section 4. Annual Report - During the annual regular assembly meeting, the Cooperative shall submit a report of its operation to the general assembly together with the audited financial statements. The annual report shall be certified by the Chairman, Treasurer, Manager and other responsible officers of the Cooperative as true and correct in all aspects to the best of their knowledge. And the audited financial statements shall be certified by an independent Certified Public Accountant.

Copies of the annual report and audited financial statements shall be submitted to the Cooperative Development Authority within (120) days from the end of every calendar year.

The form and contents of the reports shall be prescribed by the rules of the Authority

The Fiscal year of the cooperative shall be the calendar year.

ARTICLE XII
AMENDMENTS

Section 1. Amendment of Articles and By-Laws - Amendments to the Articles of Cooperation and this By-Laws may be adopted by at least two-thirds (2/3) votes of all members with voting rights without prejudice to the rights of dissenting members to withdraw their membership under the provisions of the Cooperative Code of 2008.
The amendment/s shall take effect upon approval by the Cooperative Development Authority.

Voted and adopted this 19th day of November, 2011 in Olongapo City, Philippines.