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Appendix 7

BY LAWS OF NAGA NATIONAL HIGH SCHOOL TEACHERS COOPERATIVE

KNOW ALL MEN BY THESE PRESENTS:

We, the undersigned Filipino citizens, of legal age, and residents of the
Philippines, representing at least majority of the members of this Consumers
Cooperative, do hereby adopt this By-laws.

Article I Purposes and Goals

The purposes and goals of this Cooperative are those set forth in its Articles of
Cooperation.

Article II Membership

Section 1. Kinds of Membership. This Cooperative shall have regular and

associate members. (Admission of associate member is optional)

Regular Members are those who have complied with all the membership
requirements and are entitled to all the rights and privileges of membership.

Associate Members are those who have no right to vote nor be voted upon and are
entitled only to limited rights, privileges and membership duration as provided in the
By-laws of the Cooperative, the Philippine Cooperative Code of 2008, and its
Implementing Rules and Regulation.

An associate member who meets the minimum requirements of regular membership

and continues to patronize the Cooperative for two (2) years, and signifies his/her
intention to remain a member shall be considered a regular member.

Section 2. Qualifications for Membership - The membership of this

Cooperative is open to all natural persons, Filipino citizens, of legal age, with capacity
to contract and, within the common bond and field of membership described as
follows:

1. Regular Members
a. Must be a faculty members of Naga National High School
b. Regular Non-teaching personnel of Naga National High School

2. Associate Members
a. Regular member who:
a.1. Transferred to other station,
a.2. Retired members
b. Non-teaching employees with Job-order

Section 3. Requirements for Membership.

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A member must have complied with the following requirements:

a. Approved application for membership;

b. Certificate of completion of the prescribed Pre-Membership Education
Seminar (PMES);
c. Subscribed and paid the required minimum share capital and membership
fee; and
d. ___________________________________________________________

Section 4. Application for Membership. An applicant for membership shall file a

duly accomplished form to the Board of Directors who shall act upon the application
within five (_5_) working days from the date of filing. The Board of Directors shall
devise a form for the purpose which shall, aside from the personal data of the
applicant, include the duties of a member to participate in all programs including but
not limited to capital build-up and savings mobilization of the Cooperative and, such
other information as may be deemed necessary.

The application form for membership shall include an undertaking to uphold the By-
laws, policies, guidelines, rules and regulations promulgated by the Board of
Directors and the general assembly. No application for membership shall be given
due course if not accompanied with a membership fee of _one hundred pesos (Php
100.00 ), which shall be refunded to the applicant in case of rejection.

Section 5. Appeal. An applicant whose application was denied by the Board of

Directors may appeal to the General Assembly and the latter’s decision shall be final.
For this purpose, the General Assembly may opt to create an appeal and Grievance
Committee/Membership Committee. The Appeal and Grievance Committee/
Membership Committee shall decide appeals on membership application within thirty
(30) days upon receipt thereof.

Section 6. Minimum Share Capital Requirement. An applicant for regular

membership shall subscribe at least one (1 ) shares and pay the value of at least
five hundred pesos (PhP 500.00) shares upon approval of his/her membership.
An applicant for associate membership shall subscribe at least one ( 1 ) shares
and pay the value of at least five hundred pesos (PhP 500.00) shares upon approval
of his/her membership.
However, no member shall own or hold more than ten percent (10%) of the
total subscribed share capital of the Cooperative.

Section 7. Duties and Responsibilities of a Member. Every member shall have

the following duties:

a) Pay the installment of his/her share capital subscription as it falls due and to
participate in the capital build-up and savings mobilization activities of the
Cooperative;

b) Patronize the Cooperative’s business(es) and services;

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c) Participate in the membership education programs and other activities and

affairs of the Cooperative;

d) Attend and participate in the deliberation of all matters taken during General
Assembly meetings;

e) Observe and obey all lawful orders, decisions, rules and regulations adopted
by the Board of Directors and the General Assembly.

Section 8. Rights and Privileges of Members. A member shall have the following
rights and privileges:

Regular Members

a. Attend general membership meetings;

b. Avail himself of the services of the Cooperative, subject to certain conditions
as may be prescribed by the Board of Directors;
c. Inspect and examine the books of accounts, the audited financial statements,
the minutes books, the share register, and other records of the Cooperative
during reasonable office hours;
d. Secure copies of Cooperative records/documents pertaining to the account
information of the concerned member;
e. Participate in the continuing education and other training programs of the
Cooperative; and
f. Such other rights and privileges as may be granted by the General Assembly.

Associate Members

a) Attend general membership meetings;

b) Avail themselves of the services of the Cooperative, subject to certain
conditions as may be prescribed by the Board of Directors;
c) Inspect and examine the books of accounts, the audited financial
statements, the minutes books, the share register, and other records of
the Cooperative during reasonable office hours;
d) Secure copies of Cooperative records/documents pertaining to the
account information of the concerned member;
e) Such other rights and privileges as may be granted by the General
Assembly.

Section 9. Members Entitled to Vote. Any regular member who meets the
following conditions is a member entitled to vote:

a. Paid the membership fee and the value of the minimum shares required for
membership;

b. Not delinquent in the payment of his/her share capital subscriptions and

other accounts or obligations;
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c. Has completed the continuing education program prescribed by the Board

of Directors;

d. Has participated in the affairs of the Cooperative and patronized its

businesses in accordance with cooperative’s policies and guidelines; and

e. ___________________________________________________________
__________.

Failure of the member to meet any of the above conditions shall mean suspension of
voting until the same have been lifted upon the determination of the Board of
Directors.

Consequently, a member entitled to vote shall have the following additional rights:

a. Participate and vote on all matters deliberated upon during General

Assembly meetings;

b. Seek any elective or appointive position, subject to the provisions of this

By-laws and the Philippine Cooperative Code of 2008; and

c. Such other rights and privileges as may be provided by the General

Assembly.

Section 10. Liability of Members. A member shall be liable for the debts of the
Cooperative only to the extent of his/her subscribed share capital.

Section 11. Termination of Membership. Termination of membership may be

automatic, voluntary or involuntary, which shall have the effect of extinguishing all
rights of a member in the Cooperative, subject to refund of share capital contributions
under Section 13 hereof.

a. Automatic Termination of Membership. The death or insanity of a

member shall be considered an automatic termination of his/her
membership in the Cooperative.

Failure of the associate member to meet the minimum requirement of regular

membership, to continue to patronize the products and services of the
Cooperative for two (2) years, and signify his/her intention to become regular
member shall automatically terminate his/her membership.

b. Voluntary Termination. A member may, for any valid reason, withdraw

his/her membership from the Cooperative by giving a sixty (60) day
notice to the Board of Directors.
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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:

i.Has not patronized the service(s)/business(es) of the Cooperative as

provided for in the policies of the cooperative;
ii. Has continuously failed to comply with his/her obligations as provided
for in the policies of the Cooperative;
iii. Has violated any provision of this By-laws and the policies of the
Cooperative; and
iv. For any act or omission injurious or prejudicial to the interest or
the welfare of the Cooperative, as defined by the General
Assembly.

Section 12. Manner of Involuntary Termination. The Board of Directors shall

notify in writing the member who is being considered for termination and shall give
him/her the opportunity to be heard.

The written decision of the board of directors shall be communicated in person

or by registered mail to said member and is appealable within thirty (30) days from
receipt thereof to the General Assembly or Appeal and Grievance
Committee/Membership Committee, as the case may be, whose decision shall be
final.

Section 13. Refund of Share Capital Contribution. A member whose membership

is terminated shall be entitled to a refund of his/her share capital contribution and all
other interests 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/her share capital contribution. In
which case, the member shall continue to be entitled to the interest of his/her share
capital contributions, patronage refund and the use of the services of the Cooperative
until such time that all his/her interests in the Cooperative shall have been duly paid

Article III Administration

Section 1. The General Assembly (GA). The General Assembly is composed of all
the members entitled to vote, duly assembled and constituting a quorum and is the
highest policy-making body of the Cooperative.

Section 2. Powers of the General Assembly. Subject to the pertinent provisions

of the Cooperative Code and the rules issued thereunder, the General Assembly
shall have the following exclusive powers which cannot be delegated:

a) To determine and approve amendments to the Cooperative Articles of

Cooperation and By-laws;

b) To elect or appoint the members of the Board of Directors, and to remove

them for cause; and
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c) To approve developmental plans of the Cooperative;

Section 3. Meetings. Meetings of the General Assembly, may be regular or special.

All proceedings and business(es) undertaken at any meeting of the General
Assembly, if within the powers or authority of the Cooperative, there being a quorum,
shall be valid.

Regular and associate members are required to attend the meetings for the purpose
of exercising all the rights and performing all the obligations pertaining to them, as
provided by the Code, Articles of Cooperation and ByLaws.

Section 4. Regular General Assembly Meeting. The General Assembly shall hold
its annual regular meeting every last Friday of June and first Friday of December
(shall not be beyond ninety (90) days after the close of its calendar year) at the
principal office of the Cooperative or at any place as may be determined by the
Board.

Section 5. Special General Assembly Meeting. The Board of Directors may, by a

majority vote of all its members, call a Special General Assembly meeting at any time
to consider urgent matters requiring immediate membership decision. The Board of
Directors must likewise call a Special General Assembly meeting within one (1)
month from receipt of a written request from:

a. at least ten percent (10%) of the total number of members entitled to vote;
b. the Audit Committee; or
c. the Federation or Union to which the Cooperative is a member; or
d. upon Order of the Cooperative Development Authority.

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.

a. Regular General Assembly Meeting. Notice of the annual Regular General

Assembly meeting shall be served by the Secretary, personally or his/her duly
authorized representative, by registered mail, or by electronic means to all
members of record at his/her last known postal address, or by posting or
publication, or through other electronic means,
at least one (1) week before the said meeting. It shall be accompanied with
an agenda, minutes of meeting of the last General Assembly meeting,
consolidated reports of the Board of Directors and Committees, audited
financial statements, and other papers which may assist the members to
intelligently participate in the proceedings.

b. Special General Assembly Meeting. Notice of any Special General

Assembly meeting shall be served by the Secretary personally or his/her duly
authorized representative, by registered mail, or by electronic means upon
each members who are entitled to vote at his/her last known postal address,
or by posting or publication, or through other electronic means, at least one
(1) week before the said meeting. It shall state the purpose and, except for
related issues, no other business shall be considered during the meeting.
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c. Waiver of Notice. Notice of any meeting may be waived, expressly or

impliedly, by the member concerned.

Section 7. Order of Business. As far as practicable, the order of business of a

Regular General Assembly meeting shall be:

a. Call to Order;
b. Proof of due notice;
c. Roll Call;
d. Reading, consideration and approval of the minutes of the
previous meeting;
e. Presentation and approval of the reports of the Board of
Directors, officers, and the committees, including Cooperative
Annual Progress Report and all other required reports;
f. Unfinished business;
g. New business;

i. Election of directors and committee members;

ii. Approval of Development and/or Annual Plan and
Budget; iii. Hiring of
External Auditor; and iv. Other
related business matters

h. Announcements; and
i. Adjournment

Section 8. Quorum for General Assembly Meeting. During Regular or Special

General Assembly meeting, 25% of the total number of members entitled to vote
shall constitute a quorum.

Section 9. Voting System. Only members entitled to vote shall be qualified to

participate and vote in any General Assembly meeting. A member is entitled to one
vote only regardless of the number of shares he/she owns.

Election or removal of Directors and Committee members shall be by secret

ballot. Action on all matters shall be in any manner that will truly and correctly reflect
the will of the membership. No proxy and/or cumulative voting shall be allowed.

Article IV Board of Directors

Section 1. Composition of the Board of Directors (BOD). The Board of Directors

shall be composed of five ( 5 ) members.

Section 2. Functions and Responsibilities. The Board of Directors shall have the
following functions and responsibilities:

a. Provide over-all policy direction;

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b. Formulate development plan;

c. Review the annual plan and budget and recommend for the approval of the
General/Representative Assembly;
d. Evaluate the capability and qualification and recommend for the approval
of the General/Representative Assembly the engagements of the services
of an External Auditor;
e. Appoint and terminate, based on just cause, the General Manager or
Chief Executive Officer (CEO);
f. Review, monitor and evaluate the effectiveness of the programs, projects
and activities;
g. Formulate and review the vision, mission and goals of the Cooperative;
h. Establish risk management system;
i. Establish performance evaluation system at all levels;
j. Review and approve the organizational and operational structures;
k. Establish policies and procedures for the effective operation and ensure
proper implementation of such;
l. Appoint the members of the Mediation and Conciliation Committee, Ethics
Committee, Education and Training Committee and other
Officers as specified in the Code and By-laws of the Cooperative;
m. Decide election-related cases involving the Election Committee and its
members;
n. Act on the recommendation of the Ethics Committee on cases involving
violations of the Code of Governance and Ethical Standards;
o. Ensure compliance by the Cooperative with the regulations of the Authority
and other statutory requirements of appropriate government agencies;
p. Report to the General/Representative Assembly the performance and
achievements of the Cooperative;
q. Present to the General/Representative Assembly policies which require
confirmation as provided under the law, the Cooperative By-laws, and
regulations;
r. Present to the General/Representative Assembly the financial, social and
performance reports; and
s. Perform such other functions as may be authorized by the
General/Representative Assembly.

Section 3. Qualifications. Any member who is entitled to vote and has the
following qualifications can be elected or continue as member of the Board of
Directors:

a. Has paid the minimum capital requirement;

b. Has no delinquent account with the Cooperative;
c. Has continuously patronized the Cooperative services;
d. A member in good standing for the last two (2) years;
e. Completed or willingness to complete within the prescribed period the
required education and training whichever is applicable; and
f. (Other qualifications)
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Section 4. Disqualifications. Any member who is under any of the following

circumstances shall be disqualified to be elected as a member of the Board of
Directors, or to continue as such:

a. Holding any elective position in the government, except that of a party list
representative being an officer of a Cooperative he/she represents;
b. Members holding any other position directly involved in the day-to-day
operation and management of the Cooperative;
c. Having direct or indirect personal interest with the business of the
Cooperative;
d. Having been absent for 5 consecutive meetings or in more than seventy five
percent (75%) of all meetings within the twelve (12) month period unless with
valid excuse as approved by the Board of Directors;
e. Being an official or employee of the Cooperative Development Authority,
except in a Cooperative organized among themselves;
f. Having been convicted by final judgement in administrative proceedings or
civil/criminal suits involving financial and/or property accountability; and
g. Having been disqualified by law.

Section 5. Procedure for Disqualifications.

The procedure for disqualification shall be provided in the election guidelines or

policy of the Cooperative.

Section 6. Election of Directors. The members of the Board of Directors shall be

elected by secret ballot by members entitled to vote during the a nnual 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 two ( 2) years or until their
successors shall have been elected and qualified; Provided, that majority of the
elected directors obtaining the highest number of votes during the first election after
registration shall serve for two (2) years, and the remaining directors for one (1) year.
Thereafter, all directors shall serve for a term of two (2) years. The term of the
cooperators-directors shall expire upon the election of their successors in the first
Regular General Assembly after registration.

Section 7. Election of Officers within the Board. The Board of Directors shall
convene within ten (10) days after the General Assembly meeting to elect by secret
ballot from among themselves the Chairperson and the ViceChairperson, and to elect
or appoint the Secretary and Treasurer from outside of the Board.

For committees elected by the General Assembly and/or appointed by the

Board of Directors, procedural process of electing the Chairperson, Vice-Chairperson
or other positions among themselves should be in accordance with the process
mentioned above.

Section 8. Meeting of the Board of Directors. The regular meeting of the Board of
Directors shall be held at least once a month. However, the Chairperson or majority
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of the directors may at any time call a Special Board meeting to consider urgent
matters. The call shall be addressed and delivered through the Secretary stating the
date, time and place of such meeting and the matters to be considered. Notice of
special meetings of the Board of Directors, shall be served by the Secretary in writing
or through electronic means to each director at least one (1) week 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 9. Vacancies. Any vacancy occurring in the Board of Directors by reason

of death, incapacity, removal or resignation may be filled-up within thirty (30) days 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/her 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 temporarily
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 or hold a special election to fill such vacancy.

Section 10. Removal of Members of the Board 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 of Directors shall present its recommendation for removal
to the General Assembly. For this purpose, the Board of Directors shall provide a
policy on suspension in consultation with the Ethics Committee subject to the
approval of 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. The decision of the General Assembly on
the matter is final and executory.

In cases where the officers sought to be removed consist of the majority of the Board
of Directors, at least 10% of the members with voting rights may file a petition with
the Cooperative Development Authority to call a Special General Assembly meeting
for the purpose of removing the Board of Director/s upon failure of the Board of
Directors to call an assembly meeting to commence the proceeding for their removal.
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An officer appointed by the Board of Directors may be removed from office for cause
by a majority vote of all the members of the Board of Directors.

Section 11. Prohibitions. Any member of the Board of Directors shall not hold any
other position directly involved in the day-to-day operation and management of the
Cooperative nor engage in any business similar to that of the Cooperative or who in
any way has a conflict of interest with it.

The extent of conflict of interest shall be clearly defined in the policy of the
Cooperative.