MKC’s board of directors will ask for stockholder’s approval to adopt four changes to the Cooperative’s Articles of Incorporation and By-laws at the annual meeting scheduled for Thursday, July 19, at the Bicentennial Center in Salina.
If approved, the proposed changes would allow members the option to vote by means of electronic and mail ballots; provide for the nomination of directors via petition (in addition to the normal nominating committee process) and vote for directors by mail or electronic ballot; allow the coop the option to utilize and/or to pass through to patrons the federal income tax benefits of Section 199; and establish the distribution of net assets (in the unlikely event of liquidation or dissolution) based upon total allocated stock and equity then outstanding.
According to CJ Blew, Chairman of MKC’s board of directors, the proposed changes to the voting process will better allow members to participate in the governance of MKC. “The board recognizes that our footprint challenges some members’ ability to attend meetings to participate in our governance,” stated Blew. “Allowing members to vote by mail or electronic ballot will eliminate this challenge.”
The proposed changes to the nomination process will allow people interested in serving on MKC’s board an additional method in which to do so. If approved, nomination by petition would be in addition to the nominating committee process currently used by MKC. Members would also be able to vote for directors by mail or electronic ballot.
Blew commented that the coop’s legal counsel advised the board that the language in the current by-laws and articles may not allow the coop and its members to properly utilize the full income tax benefits of the Section 199 deduction. The memberships’ approval of this proposed change would correct the language.
According to Blew the last proposed change to the articles and by-laws will allow for the distribution of excess proceeds to be done in an equitable manner should a liquidation or dissolution of the coop occur. MKC’s current by-laws state that, in the event of a complete dissolution, the net assets would be distributed to patrons on the basis of total outstanding deferred patronage allocations until everyone is paid in full and any remaining assets would be distributed only to common stockholders based on the number of shares the patron held at liquidation. “The proposal is that the excess will also be distributed based on total outstanding deferred patronage,” stated Blew. Blew further commented that for the past year, legal counsel has been making this same recommendation to all cooperatives in Kansas.
This year’s meeting will feature keynote speaker, Jolene Brown. Registration for the meeting will begin at 5:30 p.m. with dinner to follow at 6:00. Those attending are asked to RSVP by no later than July 11.
Click here for a complete set of MKC’s articles of incorporation and by-laws with the proposed changes.