SENATORS Robert Gardner, Jordan

To amend sections 1729.01, 1729.02, 1729.03, 1729.04,

1

1729.06, 1729.07, 1729.08, 1729.11, 1729.16,

2

1729.18, 1729.19, 1729.22, 1729.23, 1729.26,

3

1729.28, 1729.35, 1729.36, 1729.38, 1729.42,

4

1729.46, 1729.47, 1729.49, 1729.55, 1729.56,

5

1729.58, 1729.59, 1729.61, 1729.69, and 1729.85

6

and to enact section 1729.031 of the Revised Code

7

to modify the Cooperative Law.

8

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1729.01, 1729.02, 1729.03, 1729.04,	9
1729.06, 1729.07, 1729.08, 1729.11, 1729.16, 1729.18, 1729.19,	10
1729.22, 1729.23, 1729.26, 1729.28, 1729.35, 1729.36, 1729.38,	11
1729.42, 1729.46, 1729.47, 1729.49, 1729.55, 1729.56, 1729.58,	12
1729.59, 1729.61, 1729.69, and 1729.85 be amended and section	13
1729.031 of the Revised Code be enacted to read as follows:	14

Sec. 1729.01.  As used in this chapter:

15

(A) "Agricultural cooperative" means a cooperative to which	16
all of the following apply:	17

(1) The cooperative engages in any activity in connection	18
with the propagation, raising, producing, harvesting, storing,	19
drying, handling, processing, or marketing of agricultural	20
products; procuring equipment and supplies or providing services	21
for producers and others; bargaining; and any activity related to	22
the foregoing.	23

(2) Producers or agricultural cooperatives exercise more than	24
fifty per cent of the voting control of the cooperative.	25

(3) The cooperative does at least fifty per cent of its	26
business with producers or agricultural cooperatives.	27

(B) "Agricultural products" includes aquacultural,	28
horticultural, viticultural, forestry, dairy, livestock, poultry,	29
bee, and farm products, and the produce or byproducts of any of	30
such products.	31

(C) "Association" means any corporation organized under this	32
chapter.	33

(D) "Bargaining" means the mutual obligation of a handler and	34
a marketing cooperative to meet at reasonable times and confer and	35
negotiate in good faith. Negotiations may include all terms	36
relative to trading between handlers and producers. The obligation	37
does not require either party to agree upon price, terms of sale,	38
or any other marketing agreement, or to make a concession.	39

(E) "Board" means the board of directors of an association.

40

(F) "Cooperative" means an association or a foreign	41
association.	42

(G) "Corporation" means any corporation, domestic or foreign,	43
that is not a cooperative.	44

(H) "Entity," except as otherwise provided, means a foreign	45
association, a foreign or domestic corporation other than a	46
cooperative, or a foreign or domestic limited liability company.	47

(I)(H) "Foreign association" means a corporation organized	48
under the cooperative laws of another state or the District of	49
Columbia or a foreign corporation organized under the law	50
corporation laws of another state or, the District of Columbia and	51
operating, or the United States that operates on a cooperative	52
basis.	53

(J)(I) "Handler" means a person who acquires agricultural	54
products under a sales contract for the purpose of processing or	55
reselling the agricultural products.	56

(K)(J) "Marketing agreement" means an agreement, contract, or	57
other arrangement between a cooperative and a member in which the	58
member agrees to market all or a part of the products or produce	59
produced by the member, or agrees to purchase all or a part of the	60
member's requirements for inputs, services, or supplies.	61

(L)(K) "Marketing cooperative" means any agricultural	62
cooperative meeting the requirements of the "Co-operative	63
Marketing Associations Act," 42 Stat. 388 (1922), 7 U.S.C.A. 291,	64
that negotiates sales contracts with handlers on behalf of its	65
members and is not in direct competition with any handler with	66
which it negotiates such contracts.	67

(M)(L) "Member" means a person who has been qualified and	68
accepted into membership in an associationa cooperative.	69

(N)(M) "Membership stock" means any class of stock or other	70
equity interest in an associationa cooperative, continuous	71
ownership of which is required for membership in an association	72
the cooperative.	73

(N) "Patron" means a person with which a cooperative has made	74
an enforceable agreement to allocate and distribute a per unit	75
retain, patronage dividend, or patronage refund with respect to	76
business conducted by the cooperative with or for the person.	77

(O) "Patronage stock" means any stock or other equity	78
interest in an associationa cooperative that was originally	79
issued by the associationcooperative with respect to patronage	80
transactions.	81

(P) "Person" includes a natural person, partnership,	82
corporation, cooperative, or other entity.	83

(Q) "Processing" means changing the physical or chemical	84
characteristics of agricultural products.	85

(R) "Producer" means a person engaged in the production of	86
agricultural products for the market, including a lessor of land	87
whoreal or personal property used for production of agricultural	88
products for the market that receives as rent part of the	89
agricultural product of such land.	90

(S) "Sales contract" means a marketing agreement or other	91
similar arrangement between a handler and a producer, negotiated	92
by the producer or by an agricultural cooperative acting as agent	93
for a producer, under which the producer agrees to grow or produce	94
agricultural products for sale to the handler.	95

Sec. 1729.02.  (A) An association may be organized under this	96
chapter for any lawful purpose permitted to corporations by the	97
laws of this state, except any such purpose that is inconsistent	98
with the provisions of this chapter or other chapters of Title	99
XVII of the Revised Code. This section does not authorize any	100
professional services otherwise prohibited by law.	101

(B) Associations shall be corporations that are deemed	102
nonprofit because they are not organized for the purpose of making	103
a profit for themselves as such, or for the purpose of making a	104
profit for their members as such, but for their members as	105
patrons. This chapter and not Chapter 1702. of the Revised Code	106
shall govern associations.	107

(C) A municipal power agency, as "municipal power agency" is defined in section 3734.058 of the Revised Code, is not an association for the purposes of this chapter.

(D) This chapter shall be known as the "Ohio Cooperative	108
Law."	109

Sec. 1729.03.  Each association incorporated under this	110
chapter shall have the following powers:	111

(A) It may make contracts, incur liabilities, and borrow	112
money; issue capital stock and certificates representingother	113
equity interests or indebtednessand issue certificates therefor;	114
acquire property; and dispose of, mortgage, pledge, lease, or	115
otherwise use in any manner, any of its property, or any interest	116
in its property, wherever situated.	117

(B) It may invest its funds, lend money for its purposes, and	118
hold any property as security for repayment.	119

(C) It may act as the agent or representative of any members	120
or other patrons in any activities authorized by this chapter.	121

(D) It may conduct its business and affairs, have offices,	122
and exercise its power in the United States or in any foreign	123
country.	124

(E) It may establish reserves and invest these funds.

125

(F) It may buy, hold, and exercise all privileges of	126
ownership over such real or personal property as is necessary,	127
convenient, or incidental to the conduct of any authorized	128
business of the association.	129

(G) It may establish, secure, own, and develop patents,	130
trademarks, and copyrights, service marks, and other intellectual	131
property.	132

(H) Notwithstanding Chapter 169. of the Revised Code, it may	133
effecteffectuate the forfeiture of any unclaimed funds, including	134
any unclaimed stocksstock or other equity interests, dividends,	135
and patronage allocations, for which the owner cannot be found	136
after a period of three years. Notice of the existence of these	137
unclaimed fundsstock or other equity interests and a request for	138
written acknowledgment from the owner to the association shall be	139
evidence of a bona fide attempt to deliver the unclaimed funds	140
stock or other equity interests to the owner. If the notice is not	141
acknowledged within thirty days after the notice is sent or within	142
the period specified in the notice, if longer, all such unclaimed	143
fundsstock or other equity interests specified in the notice are	144
thereafter forfeited and become the property of the association.	145

(I) It may make donations for charitable, scientific,	146
educational, community development, or religious purposes, and may	147
use all or part of the funds forfeited to the association under	148
division (H) for these purposes.	149

(J) It may do everything necessary, suitable, or proper for	150
the accomplishment of any of the purposes enumerated in this	151
section. In addition it may exercise and possess all powers,	152
rights, and privileges necessary or incidental to the purposes for	153
which the association is organized or to the activities in which	154
it is engaged, and any other powers, rights, and privileges	155
granted to corporations by the laws of this state, except such as	156
are inconsistent with the express provisions of this chapter.	157

Sec. 1729.031. (A)(1) Subject to divisions (A)(2) and (3) of	158
this section, an association may indemnify or agree to indemnify	159
any person that was or is a party, or is threatened to be made a	160
party, to any threatened, pending, or completed civil, criminal,	161
administrative, or investigative action, suit, or proceeding,	162
other than an action or suit by or in the right of the	163
association, because the person is or was a director, officer,	164
employee, agent, or volunteer of the association or is or was	165
serving at the request of the association as a trustee, director,	166
officer, employee, member, manager, agent, or volunteer of another	167
association, entity, partnership, joint venture, trust, or other	168
enterprise. The indemnification described in division (A)(1) of	169
this section shall be for expenses, including attorney's fees,	170
judgments, fines, and amounts paid in settlement actually and	171
reasonably incurred by the person in connection with the action,	172
suit, or proceeding described in division (A)(1) of this section.	173

(2) With respect to any noncriminal action or proceeding, the	174
indemnification described in division (A)(1) of this section shall	175
be made if the person acted in good faith and in a manner the	176
person reasonably believed to be in or not opposed to the best	177
interests of the association as described in division (D) of	178
section 1729.23 of the Revised Code.	179

(3) With respect to any criminal action or proceeding, the	180
indemnification described in division (A)(1) of this section shall	181
be made if the person acted in good faith and in a manner the	182
person reasonably believed to be in or not opposed to the best	183
interests of the association as described in division (D) of	184
section 1729.23 of the Revised Code, and the person had no	185
reasonable cause to believe the conduct was unlawful.	186

(4) For purposes of divisions (A)(2) and (3) of this section,	187
the termination of any action, suit, or proceeding by judgment,	188
order, settlement, or conviction or a plea of nolo contendere or	189
its equivalent does not create, of itself, a presumption that the	190
person did not act in good faith and in a manner the person	191
reasonably believed to be in or not opposed to the best interests	192
of the association or that the person had reasonable cause to	193
believe that the conduct was unlawful.	194

(B)(1) Subject to division (B)(2) of this section and	195
provided the person acted in good faith and in a manner the person	196
reasonably believed to be in or not opposed to the best interests	197
of the association, an association may indemnify or agree to	198
indemnify any person that was or is a party, or is threatened to	199
be made a party, to any threatened, pending, or completed action	200
or suit by or in the right of the association to procure a	201
judgment in its favor, because the person is or was a director,	202
officer, employee, agent, or volunteer of the association or is or	203
was serving at the request of the association as a trustee,	204
director, officer, employee, member, manager, agent, or volunteer	205
of another association, entity, partnership, joint venture, trust,	206
or other enterprise. The indemnification described in division	207
(B)(1) of this section shall be for expenses, including attorney's	208
fees, actually and reasonably incurred by the person in connection	209
with the defense or settlement of an action or suit described in	210
division (B)(1) of this section.	211

(2) If a person is adjudged to be liable for negligence or	212
misconduct in the performance of a duty to the association, the	213
indemnification described in division (B)(1) of this section shall	214
be made for any claim, issue, or matter only to the extent that	215
the court of common pleas or the court in which the action or suit	216
was brought determines, upon application, that despite the	217
adjudication of liability and in view of all the circumstances of	218
the case, the person fairly and reasonably is entitled to	219
indemnity for expenses that the court of common pleas or court in	220
which the action or suit was brought considers proper.	221

(C) Notwithstanding division (A) or (B) of this section, to	222
the extent that a person has been successful on the merits or	223
otherwise in defense of any action, suit, or proceeding described	224
in division (A) or (B) of this section, the person shall be	225
indemnified against expenses, including attorney's fees, actually	226
and reasonably incurred in connection with that action, suit, or	227
proceeding.	228

(D) Unless ordered by a court or division (C) of this section	229
applies, the association shall make any indemnification under	230
division (A) or (B) of this section only as authorized in the	231
specific case, upon a determination that indemnification of the	232
person is proper in the circumstances because the person has met	233
the applicable standard of conduct set forth in division (A) or	234
(B) of this section. This determination shall be made in any of	235
the following manners:	236

(1) By a majority vote of a quorum consisting of directors of	237
the indemnifying association that were not and are not parties to	238
or threatened with the action, suit, or proceeding described in	239
division (A) or (B) of this section;	240

(2) Whether or not a quorum as described in division (D)(1)	241
of this section is obtainable, and if a majority of a quorum of	242
disinterested directors so directs, in a written opinion by	243
independent legal counsel other than an attorney or a firm of	244
attorneys associated with that attorney, that within the past five	245
years has been retained by or has performed services for the	246
association or has performed services for any person to be	247
indemnified;	248

(3) By the members.

249

(E)(1) The association shall pay the expenses, including	250
attorney's fees, incurred by the person in defending the action,	251
suit, or proceeding described in division (A) or (B) of this	252
section, unless either of the following applies:	253

(a) At the time of a person's act or omission that is the	254
subject of an action, suit, or proceeding described in division	255
(A) or (B) of this section, the articles or bylaws of the	256
association state, by specific reference to divisions (A) and (B)	257
of this section, that division (A) and (B) of this section do not	258
apply to the association.	259

(b) The only liability asserted against a person in an	260
action, suit, or proceeding described in division (A) or (B) of	261
this section is pursuant to section 1729.25 of the Revised Code.	262

(2) Upon receipt of a request from a person, the association	263
may pay expenses, including attorney's fees, incurred by a person	264
in defending any action, suit, or proceeding described in division	265
(A) or (B) of this section as the expenses are incurred in advance	266
of the final disposition of the action, suit, or proceeding, if	267
the board authorizes this payment in the specific case and upon	268
receipt of an undertaking by or on behalf of the person to repay	269
the amount if it ultimately is determined that the person is not	270
entitled to be indemnified by the association.	271

(F) Both of the following apply to the indemnification	272
authorized by this section:	273

(1) It is not exclusive of and is in addition to any other	274
rights granted to a person seeking indemnification pursuant to the	275
articles or bylaws of the association, any agreement, a vote of	276
members or disinterested directors of the association, or	277
otherwise, for action taken in the person's official capacity and	278
action taken in another capacity while holding their office or	279
position.	280

(2) It continues as to a person that has ceased to be a	281
director, officer, employee, member, manager, agent, or volunteer	282
and inures to the benefit of the heirs, executors, and	283
administrators of that person.	284

(G) As used in this section, "association" includes all	285
constituent associations and entities in a consolidation or merger	286
and the new or surviving association or entity. Any person that is	287
or was a director, officer, employee, agent, or volunteer of a	288
constituent association or is or was serving at the request of a	289
constituent association as a trustee, director, officer, employee,	290
member, manager, agent, or volunteer of another association,	291
entity, partnership, joint venture, trust, or other enterprise	292
stands in the same position under this section with respect to the	293
new or surviving association or entity as the person would if the	294
person had served the new or surviving association or entity in	295
the same capacity.	296

(H)(1) An association may purchase and maintain insurance or	297
furnish similar protection, including, but not limited to, trust	298
funds, letters of credit, or self-insurance, for or on behalf of	299
any person that is or was a director, officer, employee, agent, or	300
volunteer of the association or is or was serving at the request	301
of the association as a trustee, director, officer, employee,	302
member, manager, agent, or volunteer of another association,	303
entity, partnership, joint venture, trust, or other enterprise.	304
The insurance or similar protection described in division (H)(1)	305
of this section shall be against any liability asserted against	306
the person and incurred by the person in any such capacity,	307
whether or not the association would have the power to indemnify	308
the person against that liability under this section.	309

(2) Insurance described in division (H)(1) of this section	310
may be purchased from or maintained with a person in which the	311
association has a financial interest.	312

Sec. 1729.04.  (A) The name of any association organized	313
under this chapter shall include the word or abbreviation	314
"cooperative," "coop," "co-operative," "co-op," "association,"	315
"assn.," "company," "co.," "incorporated," "inc.," "corporation,"	316
or "corp."	317

(B) No corporation, association, or other person organized or	318
applying to do business in this state shall use the word or	319
abbreviation "cooperative," "coop," "co-operative," or "co-op" as	320
a part of its corporate or other business name or title, unless at	321
least one of the following applies:	322

(1) It has complied withis organized under this chapter.

323

(2) It is organized and operating on a cooperative basis	324
under Chapter 1702. of the Revised Code.	325

(3) It is organized and operating in accordance with the	326
cooperative laws of another state, the District of Columbia, or	327
the United States.	328

(4) It is a state or federally chartered credit union.

329

Sec. 1729.06.  (A) Two or more individuals may form an	330
association under this chapter.	331

(B)(1) Every association shall have and maintain a statutory	332
agent upon whom any process, notice, or demand against the	333
association may be served. The agent may be a natural person who	334
is a resident of this state or a corporation that is authorized by	335
its articles of incorporation to act as such agent and has a	336
business address in this state.	337

(2) Whenever appointment or designation of a statutory agent	338
is required by this chapter, the appointment or designation shall	339
be on a form prescribed by the secretary of state for the	340
administration of this chapter and shall conform with section	341
1702.06 of the Revised Code.	342

Sec. 1729.07.  (A) The articles of incorporation of an	343
association shall set forth all of the following:	344

(1) The name of the association;

345

(2) The association's purposes, as permitted by this chapter.	346
It is sufficient to state in the articles that the association may	347
engage in any activity within the purposes for which associations	348
may be organized under this chapter.	349

(3) The county and municipal corporation or township where	350
the association's principal place of business will be located	351
which need not be within this state;	352

(4) The names and addresses of the incorporators;

353

(5) The number of its directors or a statement that the	354
number of directors shall be as specified in the bylaws;	355

(6) The names and addresses of those who are to serve as	356
directors until the first annual meeting of members or until the	357
election and qualification of their successors;	358

(7) Whether the association is organized with or without	359
capital stock.	360

(a) If the association is organized without capital stock,	361
the articles shall set forth the general rules by which the	362
property rights and interests of each member are to be determined.	363

(b) If the association is organized with capital stock, the	364
total amount of the stock, the number and par value of the shares,	365
and dividend rights, if any. If there is more than one class of	366
stock, the articles shall set forth a statement of the number of	367
shares in each class and a statement of the designations,	368
preferences, rights, and limitations of the shares in each class.	369

(B) The articles may include additional provisions,	370
consistent with law, including provisions that are required or	371
permitted to be set forth in the bylaws.	372

(C) The articles shall be signed by the incorporators and	373
filed with the secretary of state in accordance with section	374
1729.12 of the Revised Code. The articles shall be accompanied by	375
the appointment of a statutory agent in accordance with division	376
(B) of section 1729.06 of the Revised Code. The legal existence of	377
an association begins upon the filing of the articles and, unless	378
the articles provide otherwise, its period of existence is	379
perpetual.	380

Sec. 1729.08.  (A) The articles of incorporation of an	381
association may be altered or amended at any regular meeting of	382
the association or at any special meeting called for that purpose,	383
provided that the text of the proposed change, or a general	384
description of the change, is contained in the notice of the	385
meeting. An amendment shall first be approved by two thirds of the	386
directors and shall then be adopted by an affirmative vote of	387
sixty per cent of the member votes cast on the amendment or, if	388
the articles provide or permit, by the affirmative vote of a	389
greater majority or by the affirmative vote of a simple majority	390
of all member votes eligible to be cast on the amendment.	391

(B) Amendments to the articles of incorporation, when so	392
adopted, shall be filed in accordance with section 1729.12 of the	393
Revised Code.	394

(C) The board of an association may adopt a restatement of	395
the articles thatwithout a member vote if the restatement merely	396
incorporates amendments previously approved by the board and	397
adopted by the members. An association may, by action taken in the	398
manner required for an amendment, adopt restated articles that	399
contain amendments made at the time of the restatement. Restated	400
articles shall state that they are restated, or restated and	401
amended, if amendments are adopted with the restatement, and shall	402
supersede the existing articles and amendments. Restated articles	403
shall meet the requirements of section 1729.07 of the Revised	404
Code, except that the names and addresses of the incorporators and	405
initial directors may be omitted. A restatement of the articles	406
shall be filed in the manner prescribed for an amendment of the	407
articles.	408

(D) Except as provided in the articles of incorporation, the	409
board may adopt an amendment to the articles of incorporation	410
without a member vote in any of the following cases:	411

(1) To change the principal place of business of the	412
association;	413

(2) To designate and determine the rights and restrictions of	414
a series within a class of capital stock, if permitted by the	415
articles;	416

(3) To reduce the authorized number of shares of any class or	417
series of capital stock to any number down to and including the	418
number of the shares issued and outstanding, and to assign the	419
authorization for the number of shares so reduced to another class	420
or classes of capital stock previously authorized;	421

(4) After a merger, consolidation, conversion, division, or	422
occurrence of any other contingent event referred to in the	423
articles of incorporation, to eliminate from the articles any	424
statement or provision pertaining exclusively to the merger,	425
consolidation, conversion, division, or occurrence, and to make	426
other changes required by such elimination, but only after the	427
deleted item has been superseded in accordance with the articles	428
of incorporation or otherwise is no longer in effect.	429

Sec. 1729.11.  (A) An association whose articles of	430
incorporation have been canceled or an association that has been	431
dissolved in a manner other than for a voluntary dissolution as	432
provided in section 1729.55 of the Revised Code, or a judicial	433
dissolution as provided in section 1729.61 of the Revised Code,	434
may be reinstated by filing, on a form prescribed by the secretary	435
of state for the administration of this chapter, an application	436
for reinstatement and the required appointment of a statutory	437
agent, and by paying a filing fee of ten dollars.	438

(B) Upon reinstatement of an association's articles of	439
incorporation, the rights, privileges, and franchises, including	440
all real or personal property rights and credits and all contract	441
and other rights, of the association existing at the time that its	442
articles were canceled or the dissolution became effective shall	443
be continuedcontinue in effect as if the articles had not been	444
canceled or the dissolution had not occurred; and the association	445
shall again be entitled to exercise the rights, privileges, and	446
franchises authorized by its articles.	447

Sec. 1729.16.  (A) The initial bylaws may be adopted by the	448
association's directors who are to serve until the first annual	449
member meeting. After the initial bylaws are adopted, bylaws may	450
be adopted and amended only by the members unless the members	451
adopt a bylaw that permits the board to make and amend specified	452
bylawsarticles or bylaws provide that the board, by a two-thirds	453
vote of the entire board, may adopt or amend the bylaws or any	454
specified bylaw.	455

(B) Any bylaw adopted or amended by the board shall be	456
reported at the next regular member meeting. Any bylaw adopted or	457
amended by the board shall not conflict with the association's	458
articles of incorporation or with this chapter of the Revised	459
Code. Any such bylaw is subject to amendment or repeal by the	460
members at any time.	461

(C) Unless the bylaws provide otherwise, any bylaw may be	462
adopted, amended, or repealed by a majority of the member votes	463
cast on the adoption, amendment, or repeal.	464

Sec. 1729.18.  (A) An association shall have two or more	465
members. However, an association may have one member if that	466
member is an associationa cooperative that has two or more	467
members.	468

(B) Each association shall hold an annual meeting of its	469
members. The board may call a special meeting of the members at	470
any time. Any meeting of the members may be held at one time or in	471
a series of meetings at one or more locations.	472

(C) Twenty per cent of the members entitled to vote may file	473
with the board a petition stating the specific business to be	474
brought before the association and demanding a special meeting at	475
any time for consideration of such business. Upon compliance with	476
this division, the meeting shall be called by the board.	477

(D) Notice of every meeting, together with a statement of the	478
purpose of the meeting, shall be sent to each member who is	479
entitled to vote at the meeting and any affected stockholder at	480
the member's or stockholder's current address, as shown in the	481
records of the association, at least ten days prior to the	482
meeting, in accordance with section 1729.20 of the Revised Code.	483
The bylaws may provide that the notice be given by publication in	484
a newspaper or newspapers of general circulation in the trade area	485
of the association if notice to individual members and affected	486
shareholders is impracticable.	487

Sec. 1729.19.  (A) Unless prohibited in an association's	488
articles of incorporation or bylaws, any action that may be	489
authorized or taken at a meeting of the members, affected	490
stockholders, the board, or any committee of the board, may be	491
authorized or taken without a meeting, with the affirmative vote	492
or approval of, and in writing or writings signed bythe	493
following:	494

(1) In the case of members or affected stockholders, sixty	495
per cent of the votes of the members or affected stockholders who	496
would be entitled to vote on the action at a meeting for such	497
purpose;	498

(2) In the case of the board of directors or a committee of	499
the board, all of the directors on the board or all of the	500
committee members on the committee in a writing or writings signed	501
by each of the directors or committee members.	502

(B) Any such writing or writingsA record of action described	503
in division (A) of this section without a meeting shall be	504
included in the records of the association in the same manner as	505
minutes of meetings of the association's members, affected	506
stockholders, board, or committee of the board.	507

(C) Any certificate with respect to the authorization or	508
taking of any action without a meeting that is required to be	509
filed in the office of the secretary of state shall state that the	510
authorization or taking of such action was in writing or writings	511
approved and signed as provided in this section.	512

Sec. 1729.22.  (A) Except where this chapter or an	513
association's articles of incorporation or bylaws require that	514
action be otherwise authorized or taken, all of the authority of	515
an association shall be exercised by or under the direction of the	516
board. The board shall consist of not less than five directors,	517
elected by and from the members, unless the number of members is	518
less than five, in which case, the number of directors may equal	519
the number of members.	520

(B) The bylaws may provide that the membership of an	521
association be divided into districts or other groupings and that	522
the directors shall be elected according to such districts or	523
groupings. In suchthat case, the bylaws shall specify the number	524
of directors to be elected and the manner of reapportioning or	525
redistricting the membership.	526

(C) The bylaws may provide that one or more directors may be	527
appointed by the other directors. The appointed directors need not	528
be members of the association, but shall have the same powers,	529
rights, and responsibilities as other directors. The appointed	530
directors shall not number more than one-fifth of the entire	531
number of directors.	532

(D) The bylaws may provide for an executive committee and may	533
allot to the executive committee any of the functions and powers	534
of the board, subject to the general direction and control of the	535
board.	536

(E) The association may provide a fair remuneration for the	537
time actually spent by its officers and directors in its service,	538
and for the services of the members of its executive committee.	539

(F) WhenUnless the bylaws provide otherwise, when a vacancy	540
on the board occurs other than by expiration of term, the	541
remaining directors on the board, by a majority vote, shall elect	542
a director to fill the vacancy. If the bylaws provide for an	543
election of directors by the members in a district or other	544
grouping, the board may call a special meeting of the members in	545
that district or group to fill the vacancy.	546

Sec. 1729.23.  (A) A director shall perform the duties of a	547
director, including duties as a member of any committee of the	548
directors upon which the director serves, in good faith, in a	549
manner the director reasonably believes to be in or not opposed to	550
the best interests of the association, and with the care that an	551
ordinarily prudent person in a like position would use under	552
similar circumstances. In performing these duties, a director is	553
entitled to rely on information, opinions, reports, or statements,	554
including financial statements and other financial data, that are	555
prepared or presented by any of the following:	556

(1) One or more directors, officers, or employees of the	557
association whom the director reasonably believes are reliable and	558
competent in the matters prepared or presented;	559

(2) Counsel, public accountants, or other persons as to	560
matters that the director reasonably believes are within the	561
person's professional or expert competence;	562

(3) A committee of the directors upon which the director does	563
not serve, established in accordance with the association's	564
articles of incorporation or bylaws, as to matters within its	565
designated authority, provided the director reasonably believes	566
the committee merits confidence.	567

(B) For purposes of division (A) of this section:

568

(1) A director shall not be found to have failed to perform	569
the duties in accordance with division (A) of this section, unless	570
it is proved, by clear and convincing evidence, in an action	571
brought against the director that the director has not acted in	572
good faith, in a manner reasonably believed to be in or not	573
opposed to the best interests of the association, or with the care	574
that an ordinarily prudent person in a like position would use	575
under similar circumstances. Such an action includes, but is not	576
limited to, an action that involves or affects any of the	577
following:	578

(a) A change or potential change in control of the	579
association;	580

(b) A termination or potential termination of the director's	581
service to the association as a director;	582

(c) Service in any other position or relationship with the	583
association.	584

(2) A director shall not be considered to be acting in good	585
faith if the director has knowledge concerning the matter in	586
question that would cause reliance on information, opinions,	587
reports, or statements that are prepared or presented by the	588
persons described in divisions (A)(1) to (3) of this section to be	589
unwarranted.	590

(3) The provisions of divisionDivision (B) of this section	591
dodoes not limit relief available under section 1729.24 of the	592
Revised Code.	593

(C)(1) Subject to divisions (C)(2) and (3) of this section, a	594
director is liable in damages for any act that the director takes	595
or fails to take as director only if it is proved, by clear and	596
convincing evidence, in an action brought against the director	597
that the act or omission of the director was one undertaken with a	598
deliberate intent to cause injury to the association or was one	599
undertaken with a reckless disregard for the best interests of the	600
association.	601

(2) Division (C)(1) of this section does not affect the	602
liability of a director under section 1729.25 of the Revised Code.	603

(3) Subject to division (C)(2) of this section, division	604
(C)(1) of this section does not apply if, and only to the extent	605
that, at the time of an act or omission of the director, the	606
association's articles of incorporation or bylaws state, by	607
specific reference to division (C)(1) of this section, that its	608
provisions do not apply to the association.	609

(D) For purposes of this section and section 1729.031 of the	610
Revised Code, in determining what is reasonably believed to be in	611
or not opposed to the best interests of the association, a	612
director shall consider the purposes of the association and may	613
consider any of the following:	614

(1) The interests of the employees, suppliers, creditors, and	615
customers of the association;	616

(2) The economy of this state and of the United States;

617

(3) Community and societal matters;

618

(4) The long-term and short-term best interests of the	619
association, including, but not limited to, the possibility that	620
those interests may be best served by the continued independence	621
of the association;	622

(5) The interests of the members as patrons of the	623
association.	624

(E) Divisions (B) and (C) of this section do not affect the	625
duties of a director who acts in any capacity other than as a	626
director.	627

Sec. 1729.26.  (A) The officers of an association shall	628
consist of a president, a secretary, a treasurer, and, if desired,	629
a chairperson and one or more vice chairpersons of the board, one	630
or more vice-presidents, and such other officers and assistant	631
officers as necessary. The officers shall be elected by the board.	632
The chairperson and any vice chairperson of the board shall be a	633
director. Unless the association's articles of incorporation or	634
bylaws provide otherwise, none of the other officers need be a	635
director. Any two or more offices may be held by the same person,	636
but no officer shall execute, acknowledge, or verify any	637
instrument in more than one capacity if the instrument is required	638
by law or by the articles or bylaws to be executed, acknowledged,	639
or verified by two or more officers. Unless the articles or the	640
bylaws provide otherwise, all officers shall be elected annually.	641

(B) All officers shall have the authority to perform, and	642
shall perform, the duties as the bylaws provide, or as the board	643
may determine in accordance with the bylaws.	644

Sec. 1729.28.  (A) Any member of an association may bring	645
charges against an officer or director of the association by	646
filing them in writing with the secretary of the association,	647
together with a petition, signed by twenty per cent of the	648
members, requesting the removal of the officer or director in	649
question. The removal shall be voted upon at the next regular or	650
special meeting of the members of the association and, by a vote	651
of a majority of the members, the association may remove the	652
officer or director and fill the vacancy. The director or officer	653
against whom such charges are brought shall be informed in writing	654
of the charges previous to the meeting and shall have an	655
opportunity at the meeting to be heard in person or by counsel and	656
to present witnesses, and the persons bringing the charges against	657
the director or officer shall have the same opportunity.	658

(B) In caseIf the bylaws provide for election of directors	659
by districtsthe members in a district or other grouping, then the	660
petition for removal of a director must be signed by twenty per	661
cent of the members residing in the district or belonging to the	662
group from which the director was elected. The board shall then	663
call a special meeting of the members residing in that district or	664
belonging to the group to consider and vote upon the removal of	665
the director; and at such meeting, by a vote of the majority of	666
the members of that district or belonging to the group, the	667
director in question shall be removed from office.	668

Sec. 1729.35.  (A) An association may merge or consolidate	669
with one or more associations under this chapter. Before an	670
association may merge or consolidate with any other association, a	671
written agreement of merger or consolidation shall be approved by	672
the board of each constituent association and by the members of	673
each constituent association. The agreement shall set forth the	674
terms of the merger or consolidation, including any provisions for	675
amendment or abandonment of the agreement. In the case of a	676
consolidation, the agreement also shall contain the articles of	677
incorporation of the new association.	678

(B)(1) If the agreement of merger or consolidation provides	679
that a holder of stock other than membership stock or patronage	680
stock in a constituent association will be affected, all of the	681
following apply:	682

(a) Unless the board of the constituent association provides	683
that division (B)(1)(b) of this section applies, the affected	684
stockholder shall be entitled to cast one vote on the agreement	685
regardless of the par or stated value, the number of shares, or	686
the number of affected classes of the stock held.	687

(b) The board of a constituent association may provide that a	688
stockholder otherwise entitled to vote under division (B)(1)(a) of	689
this section shall instead be entitled to payment of fair cash	690
value of the affected stock held by the stockholder in accordance	691
with section 1729.46 of the Revised Code.	692

(c) A member holding stock affected by a proposed agreement	693
of merger or consolidation may vote only as a member and shall not	694
be entitled to vote or demand fair cash value as an affected	695
stockholder.	696

(2) For purposes of this section, a holder of stock is	697
affected as to any class of stock owned by the holder only if the	698
agreement of merger or consolidation does any of the following:	699

(a) Decreases the dividends to which that class may be	700
entitled or changes the method by which the dividend rate on that	701
class is fixed;	702

(b) Provides for additional restriction of rights to transfer	703
shares of that class;	704

(c) Gives to another existing or any new class of stock or	705
equity interest not previously entitled thereto any preference, as	706
to dividends or upon dissolution, that is higher than preferences	707
of that class;	708

(d) Changes the par value of shares of that class or of any	709
other class having the same or higher preferences as to dividends	710
or upon dissolution;	711

(e) Increases the number of authorized shares of any other	712
class having the same or higher preferences as to dividends or	713
upon dissolution beyond the aggregate authorizations for such	714
classes in the constituent associations;	715

(f) Requires or permits an exchange of shares of any class	716
with lower preferences as to dividends or upon dissolution for	717
shares of any other class with higher preferences.	718

(C) The agreement is approved if both of the following	719
conditions are met with respect to each constituent association:	720

(1) Notice of the meeting to vote on the agreement, the	721
agreement, and a description of the method of voting have been	722
sent to all members, and to all affected stockholders entitled	723
either to vote on the agreement or to receive payment of fair cash	724
value under division (B) of this section;	725

(2) Sixty per cent of the member votes cast approve the	726
agreement, and a simple majority of the votes cast by the affected	727
stockholders entitled to vote under division (B) of this section	728
approve the agreement.	729

(D) Notwithstanding division (C) of this section, no vote of	730
the members or stockholders of a constituent association shall be	731
necessary to approve a merger of a wholly owned subsidiary	732
association with and into its parent associationcooperative or a	733
merger or a consolidation of two or more subsidiary associations	734
that are wholly owned by an associationa cooperative.	735

(E) After approval of an agreement under this section, but	736
before the merger or consolidation is effective, the agreement may	737
be amended in accordance with any provision for amendment set	738
forth in the agreement, provided that an amendment made subsequent	739
to adoption of the agreement by the members of any constituent	740
association shall not do any of the following:	741

(1) Change the membership rights, or the amount or kind of	742
stock, securities, cash, property, or other rights to be received,	743
exchanged, or converted in the merger or consolidation;	744

(2) Change the articles of incorporation or bylaws of the	745
surviving or new association as provided for in the agreement;	746

(3) Change any provision of the agreement with respect to the	747
rights of members or the manner of voting in the surviving or new	748
association.	749

(F) After approval of an agreement under this section, but	750
before the merger or consolidation is effective, the merger or	751
consolidation may be abandoned in accordance with any provision	752
for abandonment set forth in the agreement.	753

(G) The merger or consolidation shall take effect in	754
accordance with sections 1729.37 and 1729.38 of the Revised Code.	755

Sec. 1729.36.  (A) An association may merge or consolidate	756
with one or more entities, if such merger or consolidation is	757
permitted by the laws under which each constituent entity exists	758
and the association complies with this section.	759

(B) Each constituent association shall comply with section	760
1729.35 of the Revised Code with respect to form and approval of	761
an agreement of merger or consolidation, and each constituent	762
entity shall comply with the applicable provisions of the laws	763
under which it exists, except that the agreement of merger or	764
consolidation, by whatever name designated, shall comply with	765
divisions (C) and (D) of this section.	766

(C) The agreement of merger or consolidation shall set forth	767
all of the following:	768

(1) The names of the states and the laws under which each	769
constituent entity exists;	770

(2) All statements and matters required to be set forth in	771
agreements of merger or consolidation by the laws under which any	772
constituent entity exists;	773

(3) A statement that the surviving or new entity is to be an	774
association, a foreign association, a corporation other than a	775
cooperative, or a limited liability company;	776

(4) If the surviving or new entity is to be a foreign entity:

777

(a) The place where the principal office of the surviving or	778
new entity is to be located in the state in which the surviving or	779
new entity is to exist;	780

(b) The consent by the surviving or new entity that it may be	781
sued and served with process in this state in any proceeding for	782
the enforcement of any obligation of any constituent association	783
or domestic entity;	784

(c) The consent by the surviving or new entity that it shall	785
be subject to the applicable provisions of Chapter 1703. of the	786
Revised Code, if it is a foreign corporation or foreign	787
association, or to sections 1705.53 to 1705.58 of the Revised	788
Code, if it is a foreign limited liability company;	789

(d) If it is desired that the surviving or new entity	790
exercise its corporate privileges in this state as a foreign	791
entity.	792

(D) The agreement also may also set forth other provisions	793
permitted by the laws of any state in which any constituent entity	794
exists.	795

(E) If the surviving or new entity is an association, the	796
merger or consolidation shall take effect in accordance with	797
sections 1729.37 and 1729.38 of the Revised Code.	798

(F) If the surviving or new entity is an entity other than an	799
association, the merger or consolidation shall take effect in	800
accordance with the applicable provisions of the laws under which	801
it exists.	802

Sec. 1729.38.  (A)(1) Upon adoption of an agreement of merger	803
or consolidation under section 1729.35 or 1729.36 of the Revised	804
Code, a certificate, signed by any authorized officer or	805
representative of each constituent association or entity, shall be	806
filed with the secretary of state on a form prescribed by the	807
secretary of state that sets forth the following:	808

(a) The name and form of each constituent association or	809
entity and the state law under which each constituent entity	810
exists;	811

(b) A statement that each constituent association or entity	812
has adopted the agreement of merger or consolidation, the manner	813
of adoption, and that the agreement was adopted in compliance with	814
the laws applicable to each constituent association or entity;	815

(c) The effective date of the merger or consolidation, which	816
date may be on or after the date of filing of the certificate;	817

(d) In the case of a merger, a statement that one or more	818
specified constituent associations or entities will be merged into	819
a specified surviving association or entity, or, in the case of a	820
consolidation, a statement that the constituent associations or	821
entities will be consolidated into a new association or entity;	822

(e) The name and address of the statutory agent upon whom any	823
process, notice, or demand against any constituent association or	824
entity, or the surviving or new association or entity, may be	825
served.	826

(2) In the case of a merger into an association or domestic	827
entity, any amendments to the articles of incorporation or the	828
articles or organization of the surviving association or entity	829
shall be filed with the certificate.	830

(3) In the case of a consolidation to form a new domestic	831
association or entity, the articles of incorporation or the	832
articles of organization of the new association or entity shall be	833
filed with the certificate.	834

(4) If the surviving or new entity is a foreign entity that	835
desires to transact business in this state as a foreign entity,	836
the certificate shall be accompanied by the information required	837
for qualification of a foreign entity in this state by Chapter	838
1703. of the Revised Code, in the case of a foreign corporation or	839
foreign cooperative, or by sections 1705.53 and 1705.54 of the	840
Revised Code, in the case of a foreign limited liability company.	841

(B) A copy of the certificate of merger or consolidation,	842
certified by the secretary of state, may be filed for record in	843
the office of the county recorder of any county in this state. For	844
such recording the county recorder shall charge and collect the	845
same fee as in the case of deeds. The certified copy of the	846
certificate of merger or consolidation shall be recorded in the	847
records of deeds.	848

(C) For purposes of this section, "domestic entity" means a	849
corporation other than an association or a limited liability	850
company organized under the laws of this state.	851

Sec. 1729.42.  (A) A domestic corporation that is not an	852
association may convert itself into an association by adopting an	853
amendment to its articles of incorporation in which it elects to	854
become subject to this chapter, together with any changes in its	855
articles of incorporation and bylaws required by this chapter, and	856
any other desirable changes permitted by this chapter. The	857
amendment shall be adopted, filed, and recorded in the manner	858
provided by the law under which the corporation exists.	859

(B) An association may convert itself to a domestic	860
corporation that is not an association by adopting an amendment to	861
its articles of incorporation in which it elects to become subject	862
to any other chapter of Title XVII of the Revised Code, if so	863
permitted by such chapter, together with any changes in its	864
articles of incorporation and bylaws required by such chapter and	865
any other desirable changes permitted by such chapter. The	866
amendment shall be adopted, filed, and recorded under this chapter	867
in the same manner as an amendment of the articles of	868
incorporation under sections 1729.08 and 1729.09 of the Revised	869
Code.	870

Sec. 1729.46.  (A) In order to obtain payment of the fair	871
cash value, a stockholder entitled to payment of the fair cash	872
value of stock under section 1729.09, 1729.35, 1729.36, or 1729.40	873
of the Revised Code shall deliver a written demand for payment of	874
the fair cash value of the stock to the association no later than	875
fifteen days after notice is sent to members and stockholders in	876
accordance with section 1729.09, 1729.35, 1729.36, or 1729.40 of	877
the Revised Code, as the case may be. The written demand shall	878
state the name and address of the stockholder, the number and	879
class of the stock for which fair cash value is demanded, and the	880
amount claimed by the stockholder to be the fair cash value of the	881
stock. Delivery of written demand for payment of fair cash value	882
of stock in accordance with this section is sufficient if	883
delivered to the association or to the surviving or new	884
association or entity resulting from the merger, consolidation,	885
division, or conversion, whether the demand is delivered before,	886
on, or after the effective date of the action. If written demand	887
is not timely delivered in conformity with this section, the	888
stockholder's right to payment of fair cash value with respect to	889
the amendment to the articles of incorporation, agreement of	890
merger or consolidation, plan of division, or conversion shall be	891
barred.	892

(B) If a timely demand is delivered in accordance with this	893
section, fair cash value of the stock shall be determined and paid	894
to the stockholder in accordance with the following procedures:	895

(1) The association or the surviving, new, or resulting	896
association or entity shall send a written acknowledgment of	897
receipt of the demand for fair cash value to the address specified	898
in the demand no later than fifteen days after receipt of the	899
demand. If the board of the association or the surviving, new, or	900
resulting association or entity believes that the demand has	901
failed to comply with the requirements of this section, the	902
acknowledgment shall state any such defects. The acknowledgment	903
also shall state what the board believes to be the fair cash value	904
of the stock that is the subject of the demand. If the articles of	905
incorporation of the constituent or original association provide a	906
value for the stock upon redemption, the fair cash value of the	907
stock presumptively shall be the lesser of the redemption value or	908
the fair market value of suchthe stock immediately prior to the	909
merger, consolidation, division, or conversion.	910

(2) The stockholder shall not transfer, encumber, pledge, or	911
otherwise dispose of the stock that is the subject of the demand	912
for fair cash value, or any certificate representing suchthe	913
stock, until the demand is finally resolved by agreement,	914
withdrawal, or final judicial determination as provided in this	915
section 1729.47 of the Revised Code.	916

(3) If the association's articles of incorporation or bylaws	917
provide a reasonable basis for determining and paying the fair	918
cash value of the stock that is the subject of the demand for fair	919
cash value, or if the association or the surviving, new, or	920
resulting association or entity and the demanding stockholder	921
reach an agreement on the fair cash value of the stock within	922
three months after delivery of the demand for fair cash value, the	923
fair cash value of the stock shall be determined in accordance	924
with the constituent or original association's articles of	925
incorporation or bylaws, or as agreed upon, as the case may be.	926
The association shall thereupon tender payment of the fair cash	927
value so determined, to be paid to the stockholder within thirty	928
days of delivery of any certificates representing the stock or the	929
stockholder's written waiver and release of claim to all rights to	930
the stock to the association or the surviving, new, or resulting	931
association or entity. Without precluding other possible	932
reasonable bases for determining fair cash value of stock under	933
this section, a provision in the constituent or original	934
association's articles of incorporation or bylaws that fair cash	935
value shall be determined by final and binding arbitration, or	936
that fair cash value shall be the lesser of par value, book value,	937
or fair market value, shall be considered a reasonable basis for	938
determining and paying the fair cash value of stock.	939

(C) The right of a demanding stockholder to receive the fair	940
cash value of stock as to which the stockholder seeks relief and	941
the obligation of the association or the surviving, new, or	942
resulting association or entity to furnish the fair cash value for	943
those interests terminate if any of the following applies:	944

(1) The demanding stockholder fails to comply with this	945
section.	946

(2) The association abandons the amendment of articles,	947
merger, consolidation, division, or conversion or is finally	948
enjoined or prevented from taking such action.	949

(3) The demanding stockholder withdraws the demand for fair	950
cash value with consent of the association.	951

(4) The demanding stockholder attempts to sell, transfer, or	952
encumber the stock which is the subject of the demand prior to	953
final determination of its fair cash value under this section or	954
under section 1729.47 of the Revised Code.	955

(5) All of the following apply:

956

(a) The articles of incorporation or bylaws of the	957
association do not provide a reasonable basis for determining and	958
paying fair cash value to an affected stockholder;	959

(b) The association and the affected stockholder have not	960
agreed upon the fair cash value of the stock which is the subject	961
of the demand;	962

(c) The affected stockholder does not file a timely complaint	963
under section 1729.47 of the Revised Code.	964

(D) The fair cash value that is agreed upon by the affected	965
stockholder and the association, or determined using a reasonable	966
basis for determining and paying fair cash value in the	967
association's articles of incorporation or bylaws, or fixed by a	968
court in a proceeding under section 1729.47 of the Revised Code,	969
shall be paid within thirty days as follows:	970

(1) Immediately to the holder of uncertificated stock;

971

(2) Upon and simultaneously with the surrender of	972
certificates representing certificated stock.	973

Sec. 1729.47.  (A) If the association's articles of	974
incorporation or bylaws do not provide a reasonable basis for	975
determining and paying fair cash value of the stock that is the	976
subject of the demand for payment of fair cash value, and the	977
affected stockholder has not agreed upon a fair cash value of the	978
stock that is the subject of the demand within three months after	979
delivery of the demand for payment of fair cash value, the	980
affected stockholder, within thirty days thereafter, may file a	981
complaint for recovery of fair cash value of the stock from the	982
association or the surviving, new, or resulting association or	983
entity in the court of common pleas of the county in which the	984
principal officeplace of business of the association that issued	985
the stock is or was located. However, if the principal place of	986
business of an association is not within this state, then the	987
complaint described in this division shall be filed in the court	988
of common pleas of the county in which the association's statutory	989
agent resides. Other affected stockholders who have made timely	990
demand for payment of fair cash value may join as plaintiffs in	991
the proceeding, and any two or more proceedings commenced by	992
affected stockholders may be consolidated. The complaint shall	993
contain a brief statement of the relevant facts, including the	994
vote by members of the association, the facts entitling the	995
stockholder to relief under this section, and a demand for that	996
relief. Notwithstanding the Rules of Civil Procedure, no answer to	997
a complaint filed under this section is required.	998

(B) Upon filing the complaint and upon motion of the	999
complainant, the court shall fix a date for hearing on the	1000
complaint and require service of a notice of the complaint and the	1001
date for hearing on the defendant in the manner prescribed in the	1002
Rules of Civil Procedure for service of process.	1003

(C) On the date fixed for the hearing or any adjournment	1004
thereof, the court shall determine from the complaint and any	1005
evidence submitted at the hearing by the parties, whether the	1006
affected stockholder is entitled to the fair cash value of stock	1007
that is the subject of the demand and, if the stockholder is to be	1008
so paid, the number and class of stock for which payment is to be	1009
made.	1010

(D) If the court finds that the affected stockholder is to be	1011
paid, it may appoint one or more persons as appraisers to receive	1012
evidence as to the fair cash value. The appraisers shall have the	1013
power and authority that the court specifies in the order of	1014
appointment, and the court shall fix reasonable compensation for	1015
the appraisers. After receiving the recommendation of any	1016
appointed appraiser, or if appraisers are not appointed, the court	1017
shall make findings as to the fair cash value and render judgment	1018
for the payment of that fair cash value and interest at the rate	1019
and from the date the court considers equitable. The costs of the	1020
proceeding, including compensation of the appointed appraisers as	1021
fixed by the court, shall be assessed as the court considers	1022
equitable.	1023

(E) The proceeding on the complaint for fair cash value is a	1024
special proceeding, and final orders in it may be vacated,	1025
modified, or reversed on appeal pursuant to the Rules of Appellate	1026
Procedure and, to the extent not in conflict with those rules,	1027
Chapter 2505. of the Revised Code.	1028

Sec. 1729.49.  (A) As used in this section, "substantially	1029
all" means more than two-thirds of the association's assets,	1030
measured, in the board's discretion, either by value as recorded	1031
in the books and records of the association or by fair market	1032
value.	1033

(B) Unless the articles of incorporation or the bylaws of an	1034
association otherwise provide, a lease, sale, exchange, transfer,	1035
or other disposition of any assets of an association may be made	1036
upon terms and for consideration, which may consist, in whole or	1037
in part, of money or other property, including shares or other	1038
securities or promissory obligations of any association or entity,	1039
as may be authorized by the board. If a lease, sale, exchange,	1040
transfer, or other disposition, or a series of such transactions,	1041
would dispose of all or substantially all of the assets of the	1042
association, then the disposition may be made only upon a written	1043
plan of disposition prepared by the board or by a committee	1044
selected by the board for that purpose, and adopted in the same	1045
manner as provided for the adoption of a resolution of dissolution	1046
in section 1729.55 of the Revised Code. A plan of disposition	1047
shall set forth a general description or summary of the assets	1048
subject to disposition,; the method of disposition,; the intended	1049
transferee of the assets, if known to the board of directors,; and	1050
a general description of any material effect the board believes	1051
the disposition will have on the interests of the members and	1052
stockholders. Notice of a meeting of the members at which a plan	1053
of disposition will be voted on shall be given to all members,	1054
whether or not entitled to vote at the meeting. SuchThe notice	1055
shall be accompanied by a copy or summary of the plan of	1056
disposition and a ballot for those members entitled to vote on the	1057
plan.	1058

(C) The association, by its board, may abandon a plan of	1059
disposition, subject to the contract rights of other persons, if	1060
the power of abandonment is conferred upon the board either by the	1061
terms of the transaction or in the plan of disposition.	1062

(D) An action to set aside a disposition of assets by an	1063
association, on the ground that any section of the Revised Code	1064
applicable to the lease, sale, exchange, transfer, or other	1065
disposition of all or substantially all the assets of suchthe	1066
association has not been complied with, shall be brought within	1067
ninety days after such transaction, or suchthe action shall beis	1068
forever barred.	1069

Sec. 1729.55.  (A) An association may be dissolved	1070
voluntarily in the manner provided in this section.	1071

(B) A resolution of dissolution for an association shall	1072
state both of the following:	1073

(1) That the association elects to be dissolved;

1074

(2) Any additional provision considered necessary with	1075
respect to the proposed dissolution and winding up.	1076

(C) Before subscriptions for membership and any stock or	1077
other ownership interest have been received, the incorporators or	1078
a majority of the incorporators may adopt, by a writing signed by	1079
them, a resolution of dissolution.	1080

(D) The directors may adopt a resolution of dissolution in	1081
the following cases:	1082

(1) When the association has been adjudged bankrupt or has	1083
made a general assignment for the benefit of creditors;	1084

(2) By leave of the court, when a receiver has been appointed	1085
in a general creditors' suit or in any suit in which the affairs	1086
of the association are to be wound up;	1087

(3) When substantially all of the assets have been sold at	1088
judicial sale or otherwise;	1089

(4) When the articles of incorporation have been canceled for	1090
failure to file annual franchise or excise tax returns or for	1091
failure to pay franchise or excise taxes and the association has	1092
not been reinstated or does not desire to be reinstated;	1093

(5) When the period of existence of the association specified	1094
in its articles has expired.	1095

(E) At a meeting held for such purpose, the members may adopt	1096
a resolution of dissolution by the affirmative vote of sixty per	1097
cent of the member votes cast on suchthe proposal or, if the	1098
articles provide or permit, by the affirmative vote of a greater	1099
or lesser proportion, though not less than a majority, of suchthe	1100
voting power, of any particular class as is required by the	1101
articles of incorporation. Notice of the meeting of the members	1102
shall be given to all members and stockholders whether or not	1103
entitled to vote.	1104

(F) Upon the adoption of a resolution of dissolution, a	1105
certificate shall be filed with the secretary of state, on a form	1106
prescribed by the secretary of state, stating all of the	1107
following:	1108

(1) The name of the association;

1109

(2) A statement that a resolution of dissolution has been	1110
adopted, its manner of adoption, and, in the case of its adoption	1111
by the incorporators or directors, a statement of the basis for	1112
such adoption;	1113

(3) The place in this state where the association's principal	1114
officeplace of business is located;	1115

(4) The names and addresses of the association's directors	1116
and officers, or if the resolution of dissolution is adopted by	1117
the incorporators, the names and addresses of the incorporators;	1118

(5) The name and address of the association's statutory	1119
agent.	1120

(G) SuchThe certificate described in division (F) of this	1121
section shall be signed as follows:	1122

(1) When the resolution of dissolution is adopted by the	1123
incorporators, the certificate shall be signed by not less than a	1124
majority of the incorporators;	1125

(2) When the resolution is adopted by the directors or by the	1126
members, the certificate shall be signed by any authorized	1127
officer. However, if no authorized officer executes and files such	1128
the certificate within thirty days after the adoption of the	1129
resolution or upon any date specified in the resolution as the	1130
date upon which suchthe certificate is to be filed or upon the	1131
expiration of any period specified in the resolution as the period	1132
within which suchthe certificate is to be filed, whichever is	1133
latest, the certificate of dissolution may be signed by any three	1134
members, or if there are less than three members, then by all of	1135
the members, and shall set forth a statement that the persons	1136
signing the certificate are members and are filing the certificate	1137
because of the failure of an authorized officer to do so.	1138

(H) A certificate of dissolution, filed with the secretary of	1139
state, shall be accompanied by all of the following:	1140

(1) An affidavit of one or more of the persons executing the	1141
certificate of dissolution or of any authorized officer of the	1142
association containing a statement of the counties, if any, in	1143
this state in which the association has personal property or a	1144
statement that the association is of a type required to pay	1145
personal property taxes to state authorities only;	1146

(2) A receipt, certificate, or other evidence showing the	1147
payment of all franchise, sales, use, and highway use taxes	1148
accruing up to the date of suchthe filing, or that such payment	1149
adequately has been adequately guaranteed;	1150

(3) A receipt, certificate, or other evidence showing the	1151
payment of all personal property taxes accruing up to the date of	1152
suchthe filing;	1153

(4) A receipt, certificate, or other evidence from the	1154
director of job and family services showing that all contributions	1155
due from the association as an employer have been paid, or that	1156
such payment adequately has been adequately guaranteed, or that	1157
the association is not subject to such contributions;	1158

(5) A receipt, certificate, or other evidence from the bureau	1159
of workers' compensation showing that all premiums due from the	1160
association as an employer have been paid, or that such payment	1161
adequately has been adequately guaranteed, or that the association	1162
is not subject to such premium payments;	1163

(6) In lieu of the receipt, certificate, or other evidence	1164
described in division (H)(2), (3), (4), or (5) of this section, an	1165
affidavit of one or more persons executing the certificate of	1166
dissolution or of any authorized officer of the association	1167
containing a statement of the date upon which the particular	1168
department, agency, or authority was advised in writing of the	1169
scheduled date of filing of the certificate of dissolution and was	1170
advised in writing of the acknowledgment by the association of the	1171
applicability of section 1729.25 of the Revised Code.	1172

(I) Upon the filing of a certificate of dissolution and the	1173
accompanying documents required by division (H) of this section,	1174
the association shall be dissolved.	1175

Sec. 1729.56.  Following the filing of the certificate of	1176
dissolution, the directors, members, or the incorporators who	1177
filed the certificate, as the case may be, shall cause a notice of	1178
voluntary dissolution to be published once a week on the same day	1179
of each week for two successive weeks, in a newspaper published	1180
and of general circulation in the county in which the principal	1181
officeplace of business of the association was to be or is	1182
located, and shall cause written notice of dissolution to be given	1183
to all known creditors of, and to all known claimants against, the	1184
dissolved association.	1185

Sec. 1729.58.  (A) When an association is dissolved	1186
voluntarily, when the articles of incorporation of an association	1187
have been canceled, when a final order of a court of common pleas	1188
is made dissolving an association under section 1729.59 of the	1189
Revised Code, or when the period of existence of the association	1190
specified in its articles of incorporation has expired, the	1191
association shall cease to carry on business and shall do only	1192
such acts as are required to wind up its affairs, or to obtain	1193
reinstatement of the articles in accordance with section 1729.11	1194
of the Revised Code.	1195

(B) Any claim existing or action or proceeding pending by or	1196
against the association or which would have accrued against it may	1197
be prosecuted to judgment, with right of appeal as in other cases,	1198
but any proceeding, execution, or process, or the satisfaction or	1199
performance of any order, judgment, or decree, may be stayed as	1200
provided in section 1729.59 of the Revised Code.	1201

(C) Any process, notice, or demand against the association	1202
may be served by delivering a copy to an officer, director,	1203
liquidator, or person having charge of its assets or, if no such	1204
person can be found, to the statutory agent.	1205

(D) The directors of the association or their successors	1206
shall act as athe board of directors in accordance with the	1207
articles of incorporation and bylaws until the affairs of the	1208
association are completely wound up. Subject to the orders of	1209
courts of this state having jurisdiction over the association, the	1210
directors shall proceed as speedily as is practicable to a	1211
complete winding up of the affairs of the association and, to the	1212
extent necessary or expedient to that end, shall exercise all the	1213
authority of the association. Without limiting the generality of	1214
such authority, the directors may fill vacancies,; elect	1215
officers,; carry out contracts of the association,; make new	1216
contracts,; borrow money,; mortgage or pledge the property of the	1217
association as security,; sell its assets at public or private	1218
sale,; make conveyances in the association's name,; lease real	1219
estate for any term, including ninety-nine years renewable	1220
forever,; settle or compromise claims in favor of or against the	1221
association,; appoint or employ one or more persons as liquidators	1222
to wind up the affairs of the association with such authority as	1223
the directors see fit to grant,; cause the title to any of the	1224
assets of the association to be conveyed to such liquidators for	1225
that purpose,; apply assets to the payment of obligations,; and,	1226
after paying or adequately providing for the payment of all known	1227
obligations of the association, distribute the remainder of the	1228
assets either in cash or in kind among the members, patrons, and	1229
stockholders according to their respective rights and interests.	1230
In addition, the directors may perform all other acts necessary or	1231
expedient to the winding up of the affairs of the association.	1232

(E) The directors, or any liquidator to whom the directors	1233
grant such authority, in the course of winding up the	1234
association's affairs, shall apply the assets of the association	1235
in the following order:	1236

(1) To expenses incidental to winding up the association's	1237
affairs;	1238

(2) To all legally enforceable liabilities and obligations of	1239
the association due claimants and creditors;	1240

(3) To the stockholders, members, and patrons of the	1241
association as provided in the association's articles of	1242
incorporation or bylaws.	1243

(F) Without limiting the authority of the directors, any	1244
action within the purview of this section that is authorized or	1245
approved at a meeting of the members by sixty per cent of the	1246
member votes cast thereon shall be conclusive for all purposes	1247
upon all members, patrons, and stockholders of the association.	1248

(F)(G) All deeds and other instruments of the association	1249
shall be in the name of the association and shall be executed,	1250
acknowledged, and delivered by the officers appointed by the	1251
directors.	1252

(G)(H) At any time during the winding up of its affairs, the	1253
association by its directors may make application to the court of	1254
common pleas of the county in this state in which the principal	1255
officeplace of business of the association is located to have the	1256
winding up continued under supervision of the court, as provided	1257
in section 1729.59 of the Revised Code. However, if the	1258
association has no principal place of business in this state, the	1259
application described in this division may be made to a court of	1260
common pleas in the county in this state where the statutory agent	1261
resides.	1262

Sec. 1729.59.  (A) Without limiting the generality of its	1263
authority and subject to division (B) of this section, the court	1264
of common pleas of the county in this state in which is located	1265
the principal officeplace of business of a voluntarily dissolved	1266
association or of an association whose articles have been canceled	1267
or whose period of existence has expired, upon the complaint of	1268
the association, or a majority of the directors, or ten per cent	1269
of the members or twenty members, whichever is less, and upon such	1270
notice to all the directors and such other persons interested as	1271
the court considers proper, at any time may order and adjudge any	1272
of the following matters:	1273

(1) The presentation and proof of all claims and demands	1274
against the association and of all rights, interests, or liens in	1275
or on any of its property; the fixing of the time and the manner	1276
in which such proof shall be made and the person to whom such	1277
presentation shall be made; and the barring from participation in	1278
any distribution of assets of all persons failing to make and	1279
present proofs as required by the order of the court;	1280

(2) The stay of the prosecution of any proceeding against the	1281
association or involving any of its property, and; the requirement	1282
that the parties to the proceeding present and prove their claims,	1283
demands, rights, interests, or liens at the time and in the manner	1284
required of creditors or others; or the grant of leave to bring or	1285
maintain an independent proceeding to enforce liens;	1286

(3) The settlement or determination of all claims of every	1287
nature against the association or any of its property; the	1288
determination of the assets required to be retained to pay or	1289
provide for the payment of such claims or any claim; the	1290
determination of the assets available for distribution among and	1291
rights of members, patrons, and stockholders; and the making of	1292
new parties to the proceeding so far as the court considers proper	1293
for the determination of all matters;	1294

(4) The presentation and filing of intermediate and final	1295
accounts of the directors or of the liquidators and hearings on	1296
them; the allowance, disallowance, or settlement of the accounts;	1297
and the discharge of the directors, the liquidators, or any of	1298
them from their duties and liabilities;	1299

(5) The appointment of a special master commissioner to hear	1300
and determine any such matters with such authority as the court	1301
considers proper;	1302

(6) The filling of any vacancies in the number of directors	1303
or liquidators when the directors are unable to act on the	1304
vacancies for want of a quorum or for any other reason;	1305

(7) The appointment of a receiver, in accordance with the	1306
usage of a court in equitable matters, to wind up the affairs of	1307
the association, to take custody of any of its property, or for	1308
any other purpose;	1309

(8) The issuance or entry of any injunction or any other	1310
order that the court considers proper in the administration of the	1311
trust involved in the winding up of the affairs of the association	1312
and the giving of notice of the entry of injunction or order;	1313

(9) The allowance and payment of compensation to the	1314
directors or any of them, to liquidators, to a receiver, to the	1315
attorney for the complainant, or to any person properly rendering	1316
services beneficial to the association or to those interested in	1317
it;	1318

(10) The entry of a judgment or decree that, if it so	1319
provides, may operate as the deed or other instrument ordered to	1320
be executed, or the appointment of a master to execute such deed	1321
or instrument in the name of the association with the same effect	1322
as if executed by an authorized officer pursuant to authority	1323
conferred by the directors or the members, patrons, and	1324
stockholders of the association, whenever there is no officer or	1325
agent competent to execute such deed or instrument, whenever the	1326
association or its officers do not perform or comply with a	1327
judgment or decree of court, or whenever the court considers it	1328
proper.	1329

(B) If the association has no principal place of business in	1330
this state, without limiting the generality of its authority, the	1331
court of common pleas in the county in this state where the	1332
statutory agent resides may order and adjudge the matters	1333
described in division (A) of this section.	1334

(C) A judicial proceeding under this section concerning the	1335
winding up of the affairs of an association is a special	1336
proceeding, and final orders in the proceeding may be vacated,	1337
modified, or reversed on appeal pursuant to the Rules of Appellate	1338
Procedure and, to the extent not in conflict with those rules,	1339
Chapter 2505. of the Revised Code.	1340

Sec. 1729.61.  (A) An association may be dissolved judicially	1341
and its affairs wound up by an order of the court of common pleas	1342
of the county in this state in which the association has its	1343
principal officeplace of business, in an action brought by the	1344
members having sixty per cent of the voting power of the	1345
association on such proposal, or the holders of sucha lesser	1346
proportion as are entitled by the articles of incorporation to	1347
dissolve the association voluntarily, when it is established that	1348
it is beneficial to the members, patrons, and stockholders that	1349
the association be judicially dissolved. However, if the	1350
association has no principal place of business in this state, the	1351
court of common pleas in the county in this state where the	1352
statutory agent resides may dissolve and wind up the affairs of an	1353
association in accordance with this division.	1354

(B) A complaint for judicial dissolution shall be verified by	1355
any of the complainants and shall set forth facts showing that the	1356
case is as specified in this section. Unless the complainants set	1357
forth in the complaint that they are unable to annex a list of	1358
members, patrons, or stockholders, a schedule shall be annexed to	1359
the complaint setting forth the name and address of each member,	1360
patron, and stockholder, if it is known, or the fact that it is	1361
not known.	1362

(C) Upon the filing of a complaint for judicial dissolution,	1363
the court with which it is filed shall have power to issue	1364
injunctions,; to appoint a receiver with such authority and duties	1365
as the court from time to time may direct,; to take such other	1366
proceedings as may be necessary to protect the property or the	1367
rights of the members, patrons, and stockholders,; and to carry on	1368
the business of the association until a full hearing can be	1369
conducted. Upon or after the filing of a complaint for judicial	1370
dissolution, the court, by injunction or order, may stay the	1371
prosecution of any proceeding against the association or involving	1372
any of its property and require the parties to the proceeding to	1373
present and prove their claims, demands, rights, interests, or	1374
liens, at the time and in the manner required of creditors or	1375
others. The court may refer the complaint to a special master	1376
commissioner.	1377

(D) After a hearing upon such notice as the court may direct	1378
directs to be given to all parties to the proceeding and to any	1379
other parties in interest designated by the court, a final order	1380
based either upon the evidence, or upon the report of the special	1381
master commissioner if one has been appointed, shall be made	1382
dissolving the association or dismissing the complaint. An order	1383
or judgment for the judicial dissolution of an association shall	1384
contain a concise statement of the proceedings leading up to the	1385
order or judgment, the name of the association, the place in this	1386
state where its principal officeplace of business is located, the	1387
names and addresses of its directors and officers, the name and	1388
address of a statutory agent, and, if desired, such other	1389
provisions with respect to the judicial dissolution and winding up	1390
as are considered necessary or desirable. A certified copy of such	1391
the order shall be filed in the office of the secretary of state,	1392
whereupon the association shall be dissolved. To the extent	1393
consistent with orders entered in such proceeding, the effect of	1394
such judicial dissolution shall be the same as in the case of	1395
voluntary dissolution, and the provisions of sections 1729.58,	1396
1729.59, and 1729.60 of the Revised Code relating to the authority	1397
and duties of directors during the winding up of the affairs of an	1398
association dissolved voluntarily, with respect to the	1399
jurisdiction of courts over the winding up of the affairs of an	1400
association, and with respect to receivers for winding up the	1401
affairs of an association, shall be applicable to associations	1402
judicially dissolved.	1403

(E) A proceeding under this section for judicial dissolution	1404
of an association is a special proceeding, and final orders in it	1405
may be vacated, modified, or reversed on appeal pursuant to the	1406
Rules of Appellate Procedure and, to the extent not in conflict	1407
with those rules, Chapter 2505. of the Revised Code.	1408

Sec. 1729.69.  (A) No handler shall commit an unfair	1409
marketing practice, as defined in division (B) of this section,	1410
whenever a marketing cooperative has been authorized by its	1411
members to bargain on behalf of its members for sales contracts	1412
with the handler and any of the following conditions exist:	1413

(1) Members of the marketing cooperative are obligated to	1414
produce and deliver agricultural products or produce under sales	1415
contracts negotiated by the marketing associationcooperative.	1416

(2) Members of the marketing cooperative represent, on the	1417
yearly average calculated over the immediate two preceding	1418
calendar years, at least fifty-one per cent of the producers who	1419
delivered suchagricultural products or produce to the specified	1420
facility of the handler under sales contracts.	1421

(3) Members of the marketing cooperative delivered, under	1422
sales contracts, on the yearly average calculated over the	1423
immediate two preceding calendar years, at least fifty per cent of	1424
the total amount of such agricultural products delivered to such	1425
the specified facility of the handler under sales contracts.	1426

(4) The marketing cooperative, if requested by the handler,	1427
presents to the handler copies of the agreements with its members	1428
authorizing the marketing cooperative to bargain on behalf of its	1429
members for sales contracts for the agricultural products that are	1430
the subject of the sales contract under negotiation.	1431

(B) For purposes of this section, it is an unfair marketing	1432
practice if either of the following applies:	1433

(1) If the handler or the marketing cooperative that is	1434
bargaining fails to bargain in good faith in negotiating sales	1435
contracts for agricultural products to be delivered to a facility	1436
of the handler;	1437

(2) If a handler enters into a sales contract directly with a	1438
producer, pertaining to agricultural products to be delivered to	1439
the same facility, with the intent to cause the marketing	1440
cooperative to fail to meet the conditions set forth in divisions	1441
(A)(2) and (3) of this section.	1442

Sec. 1729.85.  Membership stock and patronage stock of an	1443
associationa cooperative are not to be considered securities	1444
under Chapter 1707. of the Revised Code.	1445

Section 2. That existing sections 1729.01, 1729.02, 1729.03,	1446
1729.04, 1729.06, 1729.07, 1729.08, 1729.11, 1729.16, 1729.18,	1447
1729.19, 1729.22, 1729.23, 1729.26, 1729.28, 1729.35, 1729.36,	1448
1729.38, 1729.42, 1729.46, 1729.47, 1729.49, 1729.55, 1729.56,	1449
1729.58, 1729.59, 1729.61, 1729.69, and 1729.85 of the Revised	1450
Code are hereby repealed.	1451