By Laws

Thank you for your interest in the CWT program. The attached information is provided to enable you to review the Bylaws and Articles of Incorporation referenced in the CWT Membership Application.

CWT is a separately-funded, producer-led program established by the National Milk Producers Federation (NMPF) with a specific goal of improving milk prices for dairy farmers. Because CWT has been organized within the existing operating structure of NMPF, specific amendments to the NMPF Bylaws have been adopted in order to accommodate this program. These Bylaw amendments define the purpose of the CWT program, membership, assessments, appointment and make-up of the CWT

Management Committee, and other administrative matters.

Since the entire set of NMPF Bylaws and Articles of Incorporation consists of more than sixty pages, with the majority of pages dedicated to general governance of NMPF and other matters not related to CWT, we have attached only the sections of the NMPF Bylaws (Article XV & Article XVI) which relate directly to the CWT program. This abbreviated version has been posted merely to facilitate your review by reducing the amount of text involved. Please notify us, however, if you wish to review the NMPF Bylaws and/or Articles of Incorporation in their entirety. You can reach us by writing to CWT Program, 2101 Wilson Boulevard, Suite 400, Arlington, VA 22201 or by calling (703)243-6111, extension 443.

ARTICLE XV

CWT PROGRAM

Sec. 141.  CWT Program

The Federation may establish and maintain the Cooperatives Working Together program (the “CWT Program”) in accordance with the terms of this Article XV.

Sec. 142.  Purpose

The purpose of the CWT Program shall be to improve the prices that farmers receive for their milk through the implementation of programs to create incentives to balance supply and demand and such other programs as may be established by the CWT Committee.

Sec. 143.  CWT Membership

A. Qualification

Membership in the CWT Program (“CWT Membership”) shall be open to:

(a) Farmers’ cooperative associations and other entities that are general members of the Federation;

(b) Farmers’ cooperative associations and other entities that meet the qualifications for general membership but are not general members of the Federation; and

(c) Independent producers of milk for market that are not otherwise members of another CWT Member (“Independent Producers”).

B. Applications

Applications for CWT Membership shall be made to the president/chief executive officer of the Federation.  Applicants shall provide such records, documents and other information bearing on their eligibility for membership as the president/chief executive officer may require.

C. Admission

Applications for membership shall be acted upon by the CWT Committee on behalf of the Federation.  Each admitted member of the CWT Program Page 3 is hereinafter referred to, individually, as a “CWT Member” and, collectively, as the “CWT Members.”

D. Term

Unless earlier terminated in accordance with these Bylaws and until the discontinuance of the CWT Program pursuant to Section 147 below, CWT Membership shall be on an annual basis and shall be renewable by CWT Members unless the CWT Program has been discontinued.

E. Withdrawal

Unless otherwise approved by the CWT Committee, a CWT Member may only terminate its CWT Membership during any one-year term upon the discontinuance of the CWT Program, except that an Independent Producer may also terminate its CWT Membership during such one-year term if such Independent Producer sells its entire herd of dairy cows during such term.  Permission to withdraw may be granted or denied by the CWT Committee, in its discretion, and may be subject to such terms and conditions as the CWT Committee may prescribe.

F. Suspension or termination

The rights of any CWT Member may be suspended or terminated, with cause, at any meeting of the CWT Committee, whenever in the judgment of the CWT Committee the best interests of the Federation and the CWT Program will be served thereby.  Any CWT Member, the suspension or termination of whose membership rights is to be considered at a meeting, shall be notified and given an opportunity to appear at such meeting and present arguments in its behalf; provided that such notice requirement shall not apply to any suspension or termination of membership for nonpayment of assessments.

G. Property rights

An applicant admitted as a CWT Member shall be entitled to all of the rights, and subject to all of the obligations, of a CWT Member, including the rights and obligations set forth in this Article XV.

CWT Members constitute a class of members of the Federation separate from any other members of the Federation (including but not limited to general members) and, unless a CWT Member is otherwise a member of any other class of members of the Federation (including a general member), such CWT Member shall only be entitled to the rights granted to CWT Members pursuant to this Article XV, and shall not be entitled to any other rights granted to any other members of the Federation (including but not limited to general members) under these Bylaws or otherwise.

Except as otherwise provided in this Article XV, CWT Membership does not carry with it any individual share or property rights in any Federation property or assets, including any property or assets allocated to the CWT Program, upon dissolution or final liquidation or otherwise.

In the event of the dissolution or final liquidation of the Federation, any remaining property or assets allocated to the CWT Program, after the payment of all debts and obligations of the Federation, shall be distributed to the CWT Members in good standing as of the date of such dissolution or final liquidation.

CWT Members who withdraw or whose membership rights are suspended or terminated shall be entitled to no compensation or adjustment of any kind by reason of the property or assets owned by the Federation, or allocated to the CWT Program, at the time of such withdrawal, suspension, or termination.

CWT Membership is not assignable.

H. Voting rights

CWT Membership shall not confer any right to vote as members of the Federation.  Notwithstanding the foregoing, CWT Members shall be entitled to nominate qualified individuals for appointment by the board of directors as At-Large CWT Representatives (as defined below) in accordance with Section 144.G. below.

I. Assessments

Each CWT Member shall be required to pay to the Federation a monthly assessment in the amount of $0.179 per hundredweight of milk marketed by such CWT Member during the preceding month, or such other amount as may be established by the CWT Committee.  Such assessments shall be used by the Federation and the CWT Committee in connection with the CWT Program and the general overhead and expenses of or arising out of the CWT Program, including the payment of insurance premiums, administrative and legal fees.

Volume of milk marketed shall be computed in terms of hundred pounds of milk in the case of fluid whole milk.  The CWT Committee shall prescribe Page 5the method to be used in determining the volume of milk marketed by any CWT Member during any month and the procedure for the collection of assessments.

J. Nonpayment of Assessments

All membership rights of any CWT Member owing assessments which are delinquent for one month or more shall, after written notification by the president/chief executive officer by registered mail with return receipt requested, be suspended as long as such delinquency shall exist, and such suspension shall become effective upon action by the CWT Committee at its next meeting.

Any such suspension as to any CWT Member may be waived for limited purposes or for a limited time by the CWT Committee.  Upon application by a delinquent member in a hardship case, or where special circumstances justify such action, delinquent assessments may be deferred for a limited time in the same manner.

The membership rights of any CWT Member owing assessments which are delinquent for two months or more, and which have not been deferred as herein provided, shall, after written notification by the president/chief executive officer by registered mail with return receipt requested, stand terminated.

Any suspension or termination of membership rights pursuant to this Section 143.J. shall be without prejudice to any contract rights or other legal rights or remedies available to the Federation to collect delinquent assessments.

Sec. 144.  CWT Committee

A. Designation

The board of directors shall designate a CWT Committee to administer the CWT Program.

B. Powers

In connection with the administration of the CWT Program, the CWT Committee shall have and exercise all of the powers and authority of the board of directors, except to the extent prohibited by law and except as otherwise set forth below.

C. Limitation on powers

The CWT Committee shall have no power or authority to act in reference to (1) amending, altering or repealing these Bylaws; (2) electing, appointing or removing any director or officer of the Federation; (3) amending the Articles of Incorporation of the Federation; (4) adopting a plan to merge or consolidate the Federation with another organization; (5) authorizing the sale, lease, exchange or mortgage of all or substantially all the Federation’s property and assets; (6) authorizing the voluntary dissolution of the Federation or revoking proceedings therefore; (7) adopting a plan for distributing all or substantially all of the Federation assets; (8) amending, altering or repealing any board resolution which by its terms provides that it shall not be amended, altered or repealed by such committee; (9) any matter where the Bylaws specifically refer to action at a board meeting; or (10) any matter that does not relate to the administration of the CWT Program.

The board of directors may further limit the power and authority of the CWT Committee to any extent it deems appropriate.

D. Control by the board

The CWT Committee shall at all times be subject to the general supervision and direction of the board of directors.

E. Composition; Appointment

The CWT Committee shall be comprised of (a) the directors of the Federation (the “Director CWT Representatives”) and (b) a number of other individuals determined in accordance with Section 144.G. below (the “At-Large CWT Representatives” and, together with the Director CWT Representatives, the “Representatives”).  In no event shall the Director CWT Representatives constitute less than a majority of the CWT Committee.

The At-Large CWT Representatives shall be appointed by the board of directors, taking into account the nominations by CWT Members in accordance with Section 144.G. below.

F. Qualifications

At-Large CWT Representatives must be either (1) individuals who are actively engaged in producing milk and a CWT Member or (2) an officer or executive of a CWT Member.

G. At-Large CWT Representatives

The number of At-Large CWT Representatives shall be determined on an annual basis by the board of directors based on the nomination procedure set forth in this Section 144.G.; provided, however, that in no event shall the number of At-Large CWT Representatives exceed the difference between (a) the number of Director CWT Representatives, minus (b) two.

Notwithstanding representation on the board of directors through a group directorship, each cooperative that is a full participant in the CWT program and is a general member of the Federation, but does not have direct representation on the board of directors, shall be entitled to nominate one At-Large CWT Representative.

Each farmers’ cooperative association that is a CWT Member but is not a general member of the Federation shall be entitled to nominate one AtLarge CWT Representative.

An additional At-Large CWT Representative may be nominated by each CWT member cooperative not represented by Director CWT Representatives provided the cooperative markets a minimum of 4.5 billion pounds of milk.  For each additional three billion pounds annual volume increment above 4.5 billion pounds, the CWT member cooperative shall be entitled to nominate one additional At-Large Representative.

The remaining At-Large CWT Representatives shall be nominated by the CWT Members that are Independent Producers (the “Independent CWT Members”) on a regional and national basis.  The regions shall be as set forth on Exhibit A hereto.  If the Independent CWT Members in a region, as a group, market at least 1.5 billion pounds of milk, then the Independent CWT Members in such region shall be entitled to nominate one At-Large CWT Representative pursuant to procedures established by Page 8the CWT Committee.  In addition all Independent CWT Members, as a group, shall be entitled to nominate one national At-Large CWT Representative pursuant to procedures established by the CWT Committee.

H. Term

Each Director CWT Representative shall serve until such time as he or she ceases to serve as a director of the Federation.

Each At-Large CWT Representative shall serve for a one-year term, beginning at the close of the meeting of the board of directors at which he or she was appointed and ending at the close of the meeting of the board of directors at which his or her successor is appointed and qualified.

I. Vacancies

Any vacancy occurring in the CWT Committee as a result of an increase in the number of At-Large CWT Representatives or the resignation, death, incapacity or the like of one or more of the At-Large CWT Representatives shall be filled by the board of directors.

The term of any Representative elected to fill a vacancy on the CWT Committee shall expire at the end of the unexpired term of his or her predecessor in office and upon the appointment and qualification of his or her successor.

J. Resignation

A Director CWT Representative may only resign, and shall resign, if such individual resigns as a director of the Federation.

An At-Large CWT Representatives may resign at any time by written notice delivered to the board of directors, its chairman or to the president/chief executive officer or secretary of the Federation.  A resignation is effective when the notice is delivered unless the notice specifies a future date.

K. Removal

A Director CWT Representative may only be removed from such office if such individual is removed as a director of the Federation.

An At-Large CWT Representative may be removed from office, with or Page 9without cause, at any meeting of the board of directors, whenever in the judgment of the board of directors, the best interests of the Federation will be served thereby.  Any At-Large CWT Representative whose removal is to be considered at a meeting shall be notified and given an opportunity to appear at such meeting and present arguments on his or her behalf.

Sec. 145.  Meetings of the CWT Committee

A. Meetings

Regular meetings of the CWT Committee shall be held at such times and at such places, within or without the State of Illinois, as the CWT Committee may determine.  Special meetings of the CWT Committee may be called at any time by the board of directors or the president/chief executive officer and shall be called by the president/chief executive officer or secretary on the written request of one quarter of the Representatives.

B. Meeting notices

A written notice, stating the meeting date, place, and hour of each meeting of the CWT Committee, given to each member of the CWT Committee not less than five nor more than 40 days before such meeting and shall be delivered personally, telecopied (or sent by similar means of visual data transmission, including but not limited to facsimile or e-mail), or sent by certified mail or overnight courier service, to the telecopy number, email address or mailing address, as applicable, of each Representative as reflected on the books and records of the Federation.

Notice shall be deemed given on the date of personal delivery, telecopy, email, facsimile or other visual data transmission, or when deposited in United States mail.

A Representative may waive notice of a meeting of the CWT Committee by delivering a written waiver to the secretary of the Federation, which shall be filed with the minutes of proceedings of the CWT Committee.  A Representative’s attendance at any CWT Committee meeting shall constitute a waiver of notice of such meeting, except where a Representative attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Unless otherwise required by law or these Bylaws, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the CWT Committee need be specified in the notice or waiver of notice of such meeting.  If such notice does specify business to be transacted at, or the purpose of, a meeting of the CWT Committee, such notice shall not limit the actions the CWT Committee may take at such meeting.

C. Quorum

Except as otherwise provided by law, the Articles of Incorporation or these Bylaws, a majority of the number of Representatives then in office shall constitute a quorum of the CWT Committee for the transaction of business.

If a quorum is not present at a meeting of the CWT Committee, a majority of the Representatives present at such meeting may adjourn the meeting to another time and place until a quorum shall be present.

D. Voting

Each Representative shall be entitled to one vote on each matter presented at any meeting of the CWT Committee.  Except as otherwise provided by law, the Articles of Incorporation or these Bylaws, the vote of a majority of the Representatives present at a meeting at which a quorum is present shall be the act of the CWT Committee.

E. Action without a meeting

Any action required or permitted to be taken at a meeting of the CWT Committee may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Representatives, and such written consent is delivered to the secretary of the Federation to be filed in the corporate records.

F. Meetings by conference telephone

Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any or all Representatives may participate in and act at any meeting of the CWT Committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can communication with each other, and such participation shall constitute presence in person at the meeting.

G. Minutes Page 11

The secretary of the Federation shall keep minutes of all meetings of the CWT Committee.

Sec. 146.  Application of other provisions of these Bylaws

Except as otherwise provided by resolution of the board of directors, the membership, governance and administration of the CWT Committee shall be as set forth in this Article XV, and no other provisions of these Bylaws relating to members of the Federation or any committees of the board of directors, including, without limitations, Articles II, V or XI hereof, shall apply.

Notwithstanding the foregoing, Sections 128, 129, 130, 131, 132, 133, 135, 136 shall apply to the CWT Program, the CWT Committee and the CWT Members, as appropriate.

Sec. 147.  Discontinuance of the CWT Program 

The board of directors may, in its sole discretion, discontinue the CWT Program at any time.  Upon any discontinuance of the CWT Program, the board shall provide written notice to each of the CWT Members and the Representatives.

The effective date of any such discontinuance shall be the last day of the calendar month in which such notice is delivered, or such other date as the board of directors may determine and set forth in such notice.  Upon the effectiveness of any such discontinuance, the CWT Members shall cease to be CWT Members of the Federation, and such CWT Members shall have no further obligations to the Federation in such capacity, and the CWT Committee shall be eliminated.  Any unused assessments shall be applied to the payment of any remaining administrative or other expenses relating to the CWT Program and the balance, if any, shall be distributed as determined by the Board of Directors.  Nothing contained in this Article XV shall affect the rights of any general or associate members of the Federation as provided elsewhere in these Bylaws or otherwise.

ARTICLE XVI

ARBITRATION

Sec. 148.  Arbitration

Any dispute, claim, demand or controversy arising out of or relating to these Bylaws or any agreement executed in connection herewith, including, without limitation, any membership application, or any action to enforce any term, provision or condition hereof or thereof (a “Dispute”) shall be finally settled by binding arbitration administered expeditiously by the American Arbitration Association (the “AAA”) in accordance with its Commercial Arbitration Rules in effect at the time of the arbitration (the “AAA Rules”), except as they may be modified herein or by agreement of the Parties.  The Parties agree that the following terms shall govern any arbitral proceeding hereunder:

(a) The arbitration shall be conducted by a single arbitrator selected in accordance with the AAA Rules, who shall be an attorney or shall have experience in handling disputes of a commercial nature in the dairy industry or a background or training in the dairy industry.

(b) The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1, et. seq.

(c) The arbitration shall be held at a mutually acceptable location in the Commonwealth of Virginia, which shall be the seat of arbitration.

(d) In addition to the authority conferred on the arbitrator by the AAA Rules, the arbitrator shall have the authority to order reasonable discovery, including the deposition of witnesses and production of documents.

(e) The arbitral award shall be in writing, state the reasons for the award, and be final and binding on the parties to the arbitration.

(f) Subject to the terms of this Agreement, the arbitrator shall have the power to award any relief deemed by the arbitrator to be just and equitable, including temporary relief, injunctive relief and specific performance.  Notwithstanding the foregoing, the arbitrator is not empowered to award exemplary, special or punitive damages.

(g) Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant party or its assets.

(h) The parties to the arbitration shall expressly waive all rights whatsoever to file an appeal against or otherwise to challenge any award by the arbitrator, provided that the foregoing shall not limit the rights of a party to bring a proceeding in any applicable jurisdiction to confirm, enforce or enter judgment upon such award (and the rights of any other party to such arbitration, if such a proceeding is brought, to contest such confirmation, enforcement or entry of judgment, but only to the extent permitted by the Federal Arbitration Act).

 

EXHIBIT A TO BYLAWS

Region 1

Connecticut

Delaware

Maine

Maryland

Massachusetts

New Hampshire

New Jersey

New York

Pennsylvania

Rhode Island

Vermont

 

Region 2

Alabama

Arkansas

Florida

Georgia

Kentucky

Louisiana

Mississippi

Missouri

North Carolina

South Carolina

Tennessee

Virginia

West Virginia

 

Region 3

Indiana

Illinois

Iowa

Michigan

Minnesota

North Dakota

Ohio

South Dakota

Wisconsin

 

Region 4

Arizona

Colorado

Kansas

Nebraska

New Mexico

Oklahoma

Texas

 

Region 5

California

Idaho

Montana

Nevada

Oregon

Utah

Washington

Wyoming