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To amend section 111.16 and to enact sections 1770.01 | 1 |
to 1770.17, 1770.20 to 1770.46, 1770.50 to | 2 |
1770.56, 1770.60 to 1770.65, 1770.70 to 1770.72, | 3 |
1770.80 to 1770.86, and 1770.99 of the Revised | 4 |
Code to authorize the establishment of a new form | 5 |
of cooperative business entity in this state. | 6 |
Section 1. That section 111.16 be amended and sections | 7 |
1770.01, 1770.02, 1770.03, 1770.04, 1770.05, 1770.06, 1770.07, | 8 |
1770.08, 1770.09, 1770.10, 1770.11, 1770.12, 1770.13, 1770.14, | 9 |
1770.15, 1770.16, 1770.17, 1770.20, 1770.21, 1770.22, 1770.23, | 10 |
1770.24, 1770.25, 1770.26, 1770.27, 1770.28, 1770.29, 1770.30, | 11 |
1770.31, 1770.32, 1770.33, 1770.34, 1770.35, 1770.36, 1770.37, | 12 |
1770.38, 1770.39, 1770.40, 1770.41, 1770.42, 1770.43, 1770.44, | 13 |
1770.45, 1770.46, 1770.50, 1770.51, 1770.52, 1770.53, 1770.54, | 14 |
1770.55, 1770.56, 1770.60, 1770.61, 1770.62, 1770.63, 1770.64, | 15 |
1770.65, 1770.70, 1770.71, 1770.72, 1770.80, 1770.81, 1770.82, | 16 |
1770.83, 1770.84, 1770.85, 1770.86, and 1770.99 of the Revised | 17 |
Code be enacted to read as follows: | 18 |
Sec. 111.16. The secretary of state shall charge and | 19 |
collect, for the benefit of the state, the following fees: | 20 |
(A) For filing and recording articles of incorporation of a | 21 |
domestic corporation, including designation of agent: | 22 |
(1) Wherein the corporation shall not be authorized to issue | 23 |
any shares of capital stock, one hundred twenty-five dollars; | 24 |
(2) Wherein the corporation shall be authorized to issue | 25 |
shares of capital stock, with or without par value: | 26 |
(a) Ten cents for each share authorized up to and including | 27 |
one thousand shares; | 28 |
(b) Five cents for each share authorized in excess of one | 29 |
thousand shares up to and including ten thousand shares; | 30 |
(c) Two cents for each share authorized in excess of ten | 31 |
thousand shares up to and including fifty thousand shares; | 32 |
(d) One cent for each share authorized in excess of fifty | 33 |
thousand shares up to and including one hundred thousand shares; | 34 |
(e) One-half cent for each share authorized in excess of one | 35 |
hundred thousand shares up to and including five hundred thousand | 36 |
shares; | 37 |
(f) One-quarter cent for each share authorized in excess of | 38 |
five hundred thousand shares; provided no fee shall be less than | 39 |
one hundred twenty-five dollars or greater than one hundred | 40 |
thousand dollars. | 41 |
(B) For filing and recording a certificate of amendment to or | 42 |
amended articles of incorporation of a domestic corporation, or | 43 |
for filing and recording a certificate of reorganization, a | 44 |
certificate of dissolution, or an amendment to a foreign license | 45 |
application: | 46 |
(1) If the domestic corporation is not authorized to issue | 47 |
any shares of capital stock, fifty dollars; | 48 |
(2) If the domestic corporation is authorized to issue shares | 49 |
of capital stock, fifty dollars, and in case of any increase in | 50 |
the number of shares authorized to be issued, a further sum | 51 |
computed in accordance with the schedule set forth in division | 52 |
(A)(2) of this section less a credit computed in the same manner | 53 |
for the number of shares previously authorized to be issued by the | 54 |
corporation; provided no fee under division (B)(2) of this section | 55 |
shall be greater than one hundred thousand dollars; | 56 |
(3) If the foreign corporation is not authorized to issue any | 57 |
shares of capital stock, fifty dollars; | 58 |
(4) If the foreign corporation is authorized to issue shares | 59 |
of capital stock, fifty dollars. | 60 |
(C) For filing and recording articles of incorporation of a | 61 |
savings and loan association, one hundred twenty-five dollars; and | 62 |
for filing and recording a certificate of amendment to or amended | 63 |
articles of incorporation of a savings and loan association, fifty | 64 |
dollars; | 65 |
(D) For filing and recording a certificate of conversion, | 66 |
including a designation of agent, a certificate of merger, or a | 67 |
certificate of consolidation, one hundred twenty-five dollars and, | 68 |
in the case of any new corporation resulting from a consolidation | 69 |
or any surviving corporation that has an increased number of | 70 |
shares authorized to be issued resulting from a merger, an | 71 |
additional sum computed in accordance with the schedule set forth | 72 |
in division (A)(2) of this section less a credit computed in the | 73 |
same manner for the number of shares previously authorized to be | 74 |
issued or represented in this state by each of the corporations | 75 |
for which a consolidation or merger is effected by the | 76 |
certificate; | 77 |
(E) For filing and recording articles of incorporation of a | 78 |
credit union or the American credit union guaranty association, | 79 |
one hundred twenty-five dollars, and for filing and recording a | 80 |
certificate of increase in capital stock or any other amendment of | 81 |
the articles of incorporation of a credit union or the | 82 |
association, fifty dollars; | 83 |
(F) For filing and recording articles of organization of a | 84 |
limited liability company, for filing and recording an application | 85 |
to become a registered foreign limited liability company, for | 86 |
filing and recording a registration application to become a | 87 |
domestic limited liability partnership, or for filing and | 88 |
recording an application to become a registered foreign limited | 89 |
liability partnership, one hundred twenty-five dollars; | 90 |
(G) For filing and recording a certificate of limited | 91 |
partnership or an application for registration as a foreign | 92 |
limited partnership, one hundred twenty-five dollars | 93 |
(H) For filing a copy of papers evidencing the incorporation | 94 |
of a municipal corporation or of annexation of territory by a | 95 |
municipal corporation, five dollars, to be paid by the municipal | 96 |
corporation, the petitioners therefor, or their agent; | 97 |
(I) For filing and recording any of the following: | 98 |
(1) A license to transact business in this state by a foreign | 99 |
corporation for profit pursuant to section 1703.04 of the Revised | 100 |
Code or a foreign nonprofit corporation pursuant to section | 101 |
1703.27 of the Revised Code, one hundred twenty-five dollars; | 102 |
(2) A biennial report or biennial statement pursuant to | 103 |
section 1775.63 or 1785.06 of the Revised Code, twenty-five | 104 |
dollars; | 105 |
(3) Except as otherwise provided in this section or any other | 106 |
section of the Revised Code, any other certificate or paper that | 107 |
is required to be filed and recorded or is permitted to be filed | 108 |
and recorded by any provision of the Revised Code with the | 109 |
secretary of state, twenty-five dollars. | 110 |
(J) For filing any certificate or paper not required to be | 111 |
recorded, five dollars; | 112 |
(K)(1) For making copies of any certificate or other paper | 113 |
filed in the office of the secretary of state, a fee not to exceed | 114 |
one dollar per page, except as otherwise provided in the Revised | 115 |
Code, and for creating and affixing the seal of the office of the | 116 |
secretary of state to any good standing or other certificate, five | 117 |
dollars. For copies of certificates or papers required by state | 118 |
officers for official purpose, no charge shall be made. | 119 |
(2) For creating and affixing the seal of the office of the | 120 |
secretary of state to the certificates described in division (E) | 121 |
of section 1701.81, division (E) of section 1701.811, division (E) | 122 |
of section 1705.38, division (E) of section 1705.381, division (D) | 123 |
of section 1702.43, division (E) of section 1775.47, division (E) | 124 |
of section 1775.55, division (E) of section 1782.433, or division | 125 |
(E) of section 1782.4310 of the Revised Code, twenty-five dollars. | 126 |
(L) For a minister's license to solemnize marriages, ten | 127 |
dollars; | 128 |
(M) For examining documents to be filed at a later date for | 129 |
the purpose of advising as to the acceptability of the proposed | 130 |
filing, fifty dollars; | 131 |
(N) Fifty dollars for filing and recording any of the | 132 |
following: | 133 |
(1) A certificate of dissolution and accompanying documents, | 134 |
or a certificate of cancellation, under section 1701.86, 1702.47, | 135 |
1705.43, or 1782.10 of the Revised Code; | 136 |
(2) A notice of dissolution of a foreign licensed corporation | 137 |
or a certificate of surrender of license by a foreign licensed | 138 |
corporation under section 1703.17 of the Revised Code; | 139 |
(3) The withdrawal of registration of a foreign or domestic | 140 |
limited liability partnership under section 1775.61 or 1775.64 of | 141 |
the Revised Code, or the certificate of cancellation of | 142 |
registration of a foreign limited liability company under section | 143 |
1705.57 of the Revised Code; | 144 |
(4) The filing of a cancellation of disclaimer of general | 145 |
partner status under Chapter 1782. of the Revised Code. | 146 |
(O) For filing a statement of continued existence by a | 147 |
nonprofit corporation, twenty-five dollars; | 148 |
(P) For filing a restatement under section 1705.08 or 1782.09 | 149 |
of the Revised Code, an amendment to a certificate of cancellation | 150 |
under section 1782.10 of the Revised Code, an amendment under | 151 |
section 1705.08 or 1782.09 of the Revised Code, or a correction | 152 |
under section 1705.55, 1775.61, 1775.64, or 1782.52 of the Revised | 153 |
Code, fifty dollars; | 154 |
(Q) For filing for reinstatement of an entity cancelled by | 155 |
operation of law, by the secretary of state, by order of the | 156 |
department of taxation, or by order of a court, twenty-five | 157 |
dollars; | 158 |
(R) For filing a change of agent, resignation of agent, or | 159 |
change of agent's address under section 1701.07, 1702.06, | 160 |
1703.041, 1703.27, 1705.06, 1705.55, 1746.04, 1747.03, or 1782.04 | 161 |
of the Revised Code, twenty-five dollars; | 162 |
(S) For filing and recording any of the following: | 163 |
(1) An application for the exclusive right to use a name or | 164 |
an application to reserve a name for future use under section | 165 |
1701.05, 1702.05, 1703.31, 1705.05, or 1746.06 of the Revised | 166 |
Code, fifty dollars; | 167 |
(2) A trade name or fictitious name registration or report, | 168 |
fifty dollars; | 169 |
(3) An application to renew any item covered by division | 170 |
(S)(1) or (2) of this section that is permitted to be renewed, | 171 |
twenty-five dollars; | 172 |
(4) An assignment of rights for use of a name covered by | 173 |
division (S)(1), (2), or (3) of this section, the cancellation of | 174 |
a name registration or name reservation that is so covered, or | 175 |
notice of a change of address of the registrant of a name that is | 176 |
so covered, twenty-five dollars. | 177 |
(T) For filing and recording a report to operate a business | 178 |
trust or a real estate investment trust, either foreign or | 179 |
domestic, one hundred twenty-five dollars; and for filing and | 180 |
recording an amendment to a report or associated trust instrument, | 181 |
or a surrender of authority, to operate a business trust or real | 182 |
estate investment trust, fifty dollars; | 183 |
(U)(1) For filing and recording the registration of a | 184 |
trademark, service mark, or mark of ownership, one hundred | 185 |
twenty-five dollars; | 186 |
(2) For filing and recording the change of address of a | 187 |
registrant, the assignment of rights to a registration, a renewal | 188 |
of a registration, or the cancellation of a registration | 189 |
associated with a trademark, service mark, or mark of ownership, | 190 |
twenty-five dollars. | 191 |
(V) For filing a service of process with the secretary of | 192 |
state, five dollars, except as otherwise provided in any section | 193 |
of the Revised Code; | 194 |
(W) With respect to cooperatives organized under Chapter | 195 |
1770. of the Revised Code: | 196 |
(1) For filing the articles of a cooperative, sixty dollars; | 197 |
(2) For filing a curative filing of the articles under | 198 |
division (D) of section 1770.08 of the Revised Code, five hundred | 199 |
dollars; | 200 |
(3) For all other filings required under Chapter 1770. of the | 201 |
Revised Code, thirty-five dollars. | 202 |
Fees specified in this section may be paid by cash, check, or | 203 |
money order, by credit card in accordance with section 113.40 of | 204 |
the Revised Code, or by an alternative payment program in | 205 |
accordance with division (B) of section 111.18 of the Revised | 206 |
Code. Any credit card number or the expiration date of any credit | 207 |
card is not subject to disclosure under Chapter 149. of the | 208 |
Revised Code. | 209 |
Sec. 1770.01. As used in this chapter: | 210 |
(A) "Address" means mailing address, including a zip code. In | 211 |
the case of a registered address, "address" means the mailing | 212 |
address and the actual office location, which may not be a post | 213 |
office box. | 214 |
(B) "Alternative ballot" means a method of voting on a | 215 |
candidate or issue prescribed by the board of directors of a | 216 |
cooperative in advance of the vote and may include voting by | 217 |
electronic, telephonic, internet, or other means that reasonably | 218 |
allows members the opportunity to vote. | 219 |
(C) "Articles" means the articles of organization of a | 220 |
cooperative as originally filed and subsequently amended. | 221 |
(D) "Association" means an organization conducting business | 222 |
on a cooperative plan under the laws of this state or another | 223 |
state that is chartered to conduct business under other laws of | 224 |
this state or another state. | 225 |
(E) "Board" means the board of directors of a cooperative. | 226 |
(F) "Business entity" means a company, limited liability | 227 |
company, limited liability partnership, or other legal entity, | 228 |
whether domestic or foreign, association, or body vested with the | 229 |
power or function of a legal entity. | 230 |
(G) "Cooperative" means a domestic business entity organized | 231 |
under this chapter conducting business on a cooperative plan as | 232 |
provided under this chapter. | 233 |
(H) "Domestic business entity" means a business entity | 234 |
organized under the laws of this state. | 235 |
(I) "Domestic cooperative" means a cooperative organized | 236 |
under this chapter or Chapter 1729. of the Revised Code. | 237 |
(J) "Foreign business entity" means a business entity that is | 238 |
not a domestic business entity. | 239 |
(K) "Foreign cooperative" means a foreign business entity | 240 |
organized to conduct business on a cooperative plan consistent | 241 |
with this chapter or Chapter 1729. of the Revised Code. | 242 |
(L) "Member" means a person or entity reflected on the books | 243 |
of a cooperative as the owner of governance rights of a membership | 244 |
interest of the cooperative and includes patron and nonpatron | 245 |
members. | 246 |
(M) "Membership interest" means a member's interest in a | 247 |
cooperative consisting of a member's financial rights, a member's | 248 |
right to assign financial rights, a member's governance rights, | 249 |
and a member's right to assign governance rights. "Membership | 250 |
interest" includes patron membership interests and nonpatron | 251 |
membership interests. | 252 |
(N) "Members' meeting" means a regular or special members' | 253 |
meeting. | 254 |
(O) "Limited liability company" means a limited liability | 255 |
company governed by Chapter 1705. of the Revised Code. | 256 |
(P) "Nonpatron membership interest" means a membership | 257 |
interest that does not require the holder to conduct patronage | 258 |
business for or with a cooperative to receive financial rights or | 259 |
distributions. | 260 |
(Q) "Patron" means a person or entity who conducts patronage | 261 |
business with a cooperative. | 262 |
(R) "Patronage" means business, transactions, or services | 263 |
done for or with a cooperative as defined by the cooperative. | 264 |
(S) "Patron member" means a member holding a patron | 265 |
membership interest. | 266 |
(T) "Patron membership interest" means a membership interest | 267 |
requiring the holder to conduct patronage business for or with a | 268 |
cooperative as specified by the cooperative to receive financial | 269 |
rights or distributions. | 270 |
(U) "Signed" means that the signature of a person has been | 271 |
written on a document and, with respect to a document required by | 272 |
this chapter to be filed with the secretary of state, means that | 273 |
the document has been signed by a person authorized to do so by | 274 |
this chapter, the articles or bylaws of a cooperative, or a | 275 |
resolution approved by the directors or the members of a | 276 |
cooperative. A signature on a document may be a facsimile affixed, | 277 |
engraved, printed, placed, stamped with indelible ink, transmitted | 278 |
by facsimile or electronically, or in any other manner reproduced | 279 |
on the document. | 280 |
Sec. 1770.02. A cooperative may be formed and organized on a | 281 |
cooperative plan for any lawful purpose, including any of the | 282 |
following: | 283 |
(A) Marketing, processing, or otherwise changing the form or | 284 |
marketability of products, including crops, livestock, and other | 285 |
agricultural products, manufacturing and further processing of | 286 |
those products, other purposes that are necessary or convenient to | 287 |
facilitate the production or marketing of products by patron | 288 |
members and others, and other purposes that are related to the | 289 |
business of the cooperative; | 290 |
(B) Providing products, supplies, and services to its | 291 |
members; | 292 |
(C) Any other purposes that cooperatives are authorized to | 293 |
perform by law. | 294 |
Sec. 1770.03. (A) A cooperative may be organized by one or | 295 |
more organizers who shall be over eighteen years of age and | 296 |
citizens of the United States and who may act for themselves as | 297 |
individuals or as the agents of other entities. The organizers | 298 |
forming the cooperative need not be members of the cooperative. | 299 |
(B) If the first board is not named in the articles of | 300 |
organization, the organizers may elect the first board or may act | 301 |
as directors with all of the powers, rights, duties, and | 302 |
liabilities of directors until directors are elected or until a | 303 |
contribution is accepted in accordance with this chapter, | 304 |
whichever occurs first. | 305 |
(C) After the filing of the articles of organization as | 306 |
required by section 1770.05 of the Revised Code, the organizers or | 307 |
the directors named in the articles of organization shall either | 308 |
hold an organizational meeting at the call of a majority of the | 309 |
organizers or of the directors named in the articles or take | 310 |
written action for the purposes of transacting business and taking | 311 |
actions necessary or appropriate to complete the organization of | 312 |
the cooperative, including, without limitation, amending the | 313 |
articles; electing directors; adopting bylaws; adopting banking | 314 |
resolutions; authorizing or ratifying the purchase, lease, or | 315 |
other acquisition of suitable space, furniture, furnishings, | 316 |
supplies, and materials; adopting a fiscal year for the | 317 |
cooperative; contracting to receive and accept contributions; and | 318 |
making any appropriate tax elections. If a meeting is held, the | 319 |
person or persons calling the meeting shall give at least three | 320 |
days' notice of the meeting to each organizer or director named, | 321 |
stating the date, time, and place of the meeting. Organizers and | 322 |
directors may waive notice of an organizational meeting in the | 323 |
same manner that a director may waive notice of meetings of the | 324 |
board. | 325 |
Sec. 1770.04. The name of a cooperative shall distinguish | 326 |
the cooperative on the records of the secretary of state from the | 327 |
name of any other domestic business entity or foreign business | 328 |
entity authorized or registered to do business in this state or | 329 |
from a name the right to which is, at the time of organization of | 330 |
the cooperative, reserved or provided for by law. The cooperative | 331 |
name shall be reserved for the cooperative during its existence. | 332 |
Sec. 1770.05. (A) The articles of the cooperative shall | 333 |
include all of the following: | 334 |
(1) The name of the cooperative; | 335 |
(2) The purpose of the cooperative; | 336 |
(3) The name and address of each organizer; | 337 |
(4) The period of duration for the cooperative if the | 338 |
duration is not to be perpetual; | 339 |
(5) Any other lawful provision. | 340 |
The articles shall be signed by the organizers. The original | 341 |
articles and a designation of the cooperative's registered office | 342 |
and statutory agent shall be filed with the secretary of state. | 343 |
(B) When the articles, the registration form required under | 344 |
section 1770.11 of the Revised Code, and the designation of the | 345 |
cooperative's registered office and statutory agent have been | 346 |
filed with the secretary of state and the required fee has been | 347 |
paid to the secretary of state, it shall be presumed that both of | 348 |
the following apply: | 349 |
(1) All conditions precedent that are required to be | 350 |
performed by the organizers have been complied with. | 351 |
(2) The organization of the cooperative has been chartered by | 352 |
the state as a separate legal entity. | 353 |
Sec. 1770.06. (A) The articles of a cooperative may be | 354 |
amended and, if amended, shall be amended as follows: | 355 |
(1) The board, by majority vote, shall pass a resolution | 356 |
stating the text of the proposed amendment. The text of the | 357 |
proposed amendment and an attached mail or alternative ballot | 358 |
shall be mailed or otherwise distributed with a regular or special | 359 |
meeting notice to each member. The notice shall designate the time | 360 |
and place of the meeting for the proposed amendment to be | 361 |
considered and voted on. | 362 |
(2) If a quorum of the members exists as determined in | 363 |
accordance with section 1770.37 of the Revised Code, the proposed | 364 |
amendment is adopted if either of the following applies: | 365 |
(a) The proposed amendment is approved by a majority of the | 366 |
votes cast. | 367 |
(b) In the case of a cooperative with articles or bylaws | 368 |
requiring more than majority approval or other conditions for | 369 |
approval, the amendment is approved by a proportion of the votes | 370 |
cast or a number of total members as required by the articles or | 371 |
bylaws and the conditions for approval in the articles or bylaws | 372 |
have been satisfied. | 373 |
(3) After an amendment has been adopted by the members, the | 374 |
amendment shall be signed by the chair, vice-chair, records | 375 |
officer, or assistant records officer. | 376 |
(B) A majority of directors may amend the articles if the | 377 |
cooperative does not have any members with voting rights. | 378 |
(C) Amendments to articles of incorporation, when so adopted, | 379 |
shall be filed in accordance with section 1770.08 of the Revised | 380 |
Code. | 381 |
Sec. 1770.07. (A) A cooperative organized under Chapter | 382 |
1729. of the Revised Code may convert and become subject to this | 383 |
chapter by amending its articles of incorporation to conform to | 384 |
the requirements of this chapter. | 385 |
(B) A cooperative organized under Chapter 1729. of the | 386 |
Revised Code that becomes subject to this chapter shall provide | 387 |
its members with a disclosure statement of the rights and | 388 |
obligations of the members and the capital structure of the | 389 |
cooperative before becoming subject to this chapter. A cooperative | 390 |
organized under Chapter 1729. of the Revised Code, upon | 391 |
distribution of the disclosure statement required in this division | 392 |
and approval of its members as necessary for amending its articles | 393 |
under Chapter 1729. of the Revised Code, may amend its articles to | 394 |
comply with this chapter. | 395 |
(C) A cooperative organized under Chapter 1729. of the | 396 |
Revised Code that is converting to be subject to this chapter | 397 |
shall prepare a certificate stating all of the following: | 398 |
(1) The date on which the entity was first organized; | 399 |
(2) The name of the cooperative organized under Chapter 1729. | 400 |
of the Revised Code and, if the name is to be changed, the name of | 401 |
the cooperative to be governed under this chapter; | 402 |
(3) The future effective date and time, which shall be a date | 403 |
and time certain, that the cooperative will be governed by this | 404 |
chapter if the effective date and time are not to be the date and | 405 |
time of filing. | 406 |
(D) Upon filing with the secretary of state of the articles | 407 |
for compliance with this chapter and the certificate required | 408 |
under division (C) of this section, a cooperative organized under | 409 |
Chapter 1729. of the Revised Code is converted and governed by | 410 |
this chapter unless a later date and time are specified in the | 411 |
certificate required under division (C) of this section. | 412 |
(E) With respect to a conversion under this section under | 413 |
which a cooperative becomes governed by this chapter, the rights, | 414 |
property, securities, or interests in the cooperative organized | 415 |
under Chapter 1729. of the Revised Code may be exchanged or | 416 |
converted into rights, property, securities, or interests in the | 417 |
cooperative as governed by this chapter. | 418 |
(F) The conversion of a cooperative organized under Chapter | 419 |
1729. of the Revised Code to a cooperative governed by this | 420 |
chapter does not affect any obligations or liabilities of the | 421 |
cooperative before the conversion or the personal liability of any | 422 |
person incurred before the conversion. When the conversion is | 423 |
effective, the rights, privileges, and powers of the cooperative, | 424 |
real and personal property of the cooperative, debts due to the | 425 |
cooperative, and causes of action belonging to the cooperative | 426 |
remain vested in the cooperative and are the property of the | 427 |
cooperative as converted and governed by this chapter. Title to | 428 |
real property vested by deed or otherwise in the cooperative | 429 |
organized under Chapter 1729. of the Revised Code does not revert | 430 |
and is not impaired by reason of the cooperative's being converted | 431 |
and governed by this chapter. Rights of creditors and liens on | 432 |
property of the cooperative under Chapter 1729. of the Revised | 433 |
Code are preserved unimpaired. Debts, liabilities, and duties of | 434 |
the cooperative remain attached to the cooperative as converted | 435 |
and governed by this chapter and may be enforced against the | 436 |
cooperative to the same extent as if the debts, liabilities, and | 437 |
duties had originally been incurred or contracted by the | 438 |
cooperative as organized under this chapter. The rights, | 439 |
privileges, powers, and interests in property of the cooperative | 440 |
under Chapter 1729. of the Revised Code as well as the debts, | 441 |
liabilities, and duties of the cooperative are not deemed, as a | 442 |
consequence of the conversion, to have been transferred for any | 443 |
purpose of the laws of this state. | 444 |
Sec. 1770.08. (A) For filing articles of a cooperative or | 445 |
amendment of the articles or a certificate of merger, | 446 |
consolidation, conversion, division, or dissolution, a cooperative | 447 |
shall pay to the secretary of state the fees imposed by section | 448 |
111.16 of the Revised Code. | 449 |
(B) When the articles or amendment of the articles or a | 450 |
certificate of merger, consolidation, conversion, division, or | 451 |
dissolution is filed with the secretary of state, the secretary of | 452 |
state, if the articles, amendment, or certificate complies with | 453 |
this chapter, shall endorse approval thereon, the date of filing, | 454 |
and a file number, and make a legible copy thereof by any | 455 |
authorized method. The original or a copy of the articles, | 456 |
amendment, or certificate, certified by the secretary of state, | 457 |
shall be returned to the person filing the articles, amendment, or | 458 |
certificate. | 459 |
(C) All persons shall have the opportunity to acquire a copy | 460 |
of the articles, amendments, and certificates filed and recorded | 461 |
in the office of the secretary of state, but no person dealing | 462 |
with the cooperative shall be charged with constructive notice of | 463 |
the contents of any such articles, amendments, or certificates by | 464 |
reason of the filing or recording. | 465 |
(D) If the secretary of state determines that a filing has | 466 |
been made in error by a cooperative, the secretary of state may | 467 |
revoke and expunge the erroneous filing and authorize a curative | 468 |
document to be filed. | 469 |
Sec. 1770.09. The existence of a cooperative shall commence | 470 |
when the articles are filed with the secretary of state. A | 471 |
cooperative shall have a perpetual duration unless the cooperative | 472 |
provides for a limited period of duration in the articles. | 473 |
Sec. 1770.10. (A) A cooperative shall establish and | 474 |
continuously maintain in this state both of the following: | 475 |
(1) A registered office that may be, but need not be, the | 476 |
same as its place of business; | 477 |
(2) A registered statutory agent who may be either an | 478 |
individual resident of this state whose business office is | 479 |
identical with the registered office, or a domestic business | 480 |
entity or a foreign business entity authorized to transact | 481 |
business in this state having an office identical with the | 482 |
registered office. | 483 |
(B) A cooperative may designate or change its registered | 484 |
office or statutory agent, or both, upon filing with the secretary | 485 |
of state a statement setting forth all of the following: | 486 |
(1) The name of the cooperative; | 487 |
(2) The address of its then registered office; | 488 |
(3) If the address of its registered office is to be changed, | 489 |
the address to which the registered office is to be changed; | 490 |
(4) The name of its then registered statutory agent; | 491 |
(5) If its registered statutory agent is to be changed, the | 492 |
name of its successor registered statutory agent; | 493 |
(6) That the address of its registered office and the address | 494 |
of the business office of its registered statutory agent, as | 495 |
changed, will be identical; | 496 |
(7) That the change was authorized by affirmative vote of a | 497 |
majority of the board of the cooperative. | 498 |
(C) If the secretary of state finds that the statement | 499 |
required by division (B) of this section complies with this | 500 |
section, the secretary of state shall file the statement, and upon | 501 |
filing the change of address of the registered office or the | 502 |
appointment of a new registered statutory agent or both, as | 503 |
applicable, is effective. | 504 |
(D) A registered statutory agent of a cooperative may resign | 505 |
as statutory agent upon filing one original and one exact or | 506 |
conformed copy of a signed written notice of resignation with the | 507 |
secretary of state, who shall mail a copy to the cooperative at | 508 |
its principal mailing address as defined and prescribed by the | 509 |
secretary of state. The appointment of the statutory agent shall | 510 |
terminate upon the expiration of thirty days after receipt of | 511 |
notice by the secretary of state. | 512 |
(E) If the address or name of a registered statutory agent | 513 |
changes, the statutory agent shall change the address of the | 514 |
registered office or the name of the registered statutory agent by | 515 |
filing with the secretary of state the statement required by | 516 |
division (B) of this section. The statutory agent shall mail a | 517 |
copy of the statement to the cooperative at its principal mailing | 518 |
address. | 519 |
Sec. 1770.11. (A) In each odd-numbered year, a cooperative | 520 |
governed by this chapter shall file a biennial registration with | 521 |
the secretary of state. The secretary of state shall establish | 522 |
procedures for the biennial registration, which shall include a | 523 |
requirement that the secretary of state mail by first class mail a | 524 |
registration form to the registered office of each cooperative as | 525 |
shown in the records of the secretary of state or, if no such | 526 |
address is in the records, to the location of the principal place | 527 |
of business shown in the records of the secretary of state. The | 528 |
form shall include the following statement: | 529 |
"NOTICE: Failure to file this form by December 31 of this | 530 |
year will result in the dissolution of this cooperative without | 531 |
further notice from the Secretary of State under section 1770.11 | 532 |
of the Revised Code." | 533 |
(B) The registration required by this section shall include | 534 |
all of the following: | 535 |
(1) The name of the cooperative; | 536 |
(2) The address of its registered office; | 537 |
(3) The address of its principal place of business if | 538 |
different from the registered office address; | 539 |
(4) The name and business address of the chief executive | 540 |
officer or other person exercising the principal functions of the | 541 |
chief executive officer of the cooperative. | 542 |
(C) A cooperative that has failed to file a registration | 543 |
under this section shall be dissolved by the secretary of state. | 544 |
To effectuate the dissolution, the secretary of state shall issue | 545 |
a certificate of involuntary dissolution, which shall be filed | 546 |
with the secretary of state. The secretary of state annually shall | 547 |
inform the attorney general and the tax commissioner in writing of | 548 |
the methods by which the names of cooperatives dissolved under | 549 |
this section during the preceding year may be determined. The | 550 |
secretary of state also shall make available in an electronic | 551 |
format the names of the dissolved cooperatives. | 552 |
(D) A cooperative may retroactively reinstate its existence | 553 |
by filing a biennial registration. Filing the biennial | 554 |
registration with the secretary of state does all of the | 555 |
following: | 556 |
(1) Returns the cooperative to active status as of the date | 557 |
of the dissolution; | 558 |
(2) Validates contracts or other acts within the authority of | 559 |
the articles and retains the cooperative's liability for those | 560 |
contracts or acts; | 561 |
(3) Restores to the cooperative all assets and rights of the | 562 |
cooperative and its shareholders or members to the extent they | 563 |
were held by the cooperative and its shareholders or members | 564 |
before the dissolution occurred, except to the extent that assets | 565 |
or rights were affected by acts occurring after the dissolution or | 566 |
sold or otherwise distributed after that time. | 567 |
Sec. 1770.12. (A) A cooperative shall have bylaws governing | 568 |
the cooperative's business affairs, its structure, the | 569 |
qualifications, classification, rights, and obligations of | 570 |
members, and the classifications, allocations, and distributions | 571 |
of membership interests that are not otherwise provided in the | 572 |
articles or by this chapter. | 573 |
(B) If not stated in the articles, the bylaws shall state all | 574 |
of the following: | 575 |
(1) The purpose of the cooperative; | 576 |
(2) The capital structure of the cooperative, including a | 577 |
statement of the classes and relative rights, preferences, and | 578 |
restrictions granted to or imposed on each class of member | 579 |
interests, the rights to share in profits or distributions of the | 580 |
cooperative, and the authority to issue membership interests, | 581 |
which may be designated to be determined by the board; | 582 |
(3) A provision designating the voting and governance rights, | 583 |
including which membership interests have voting power and any | 584 |
limitations or restrictions on the voting power, which shall be in | 585 |
accordance with this chapter; | 586 |
(4) A statement that patron membership interests with voting | 587 |
power shall be restricted to one vote for each member regardless | 588 |
of the amount of patron membership interests held in the affairs | 589 |
of the cooperative or a statement describing the allocation of | 590 |
voting power allocated as prescribed in this chapter; | 591 |
(5) A statement that membership interests held by a member | 592 |
are transferable only with the approval of the board or as | 593 |
provided in the bylaws; | 594 |
(6) If nonpatron membership interests are authorized, a | 595 |
statement as to how profits and losses will be allocated and cash | 596 |
will be distributed between patron membership interests | 597 |
collectively, a statement that net income allocated to a patron | 598 |
membership interest as determined by the board in excess of | 599 |
dividends and additions to reserves shall be distributed on the | 600 |
basis of patronage, and a statement that the records of the | 601 |
cooperative shall include patron membership interests and, if | 602 |
authorized, nonpatron membership interests, which may be further | 603 |
described in the bylaws. | 604 |
(C) The bylaws may contain any provision relating to the | 605 |
management or regulation of the affairs of the cooperative that | 606 |
are not inconsistent with this chapter, any other provision of the | 607 |
Revised Code, or the articles and shall include all of the | 608 |
following: | 609 |
(1) The number of directors and the qualifications, manner of | 610 |
election, powers, duties, and compensation, if any, of directors; | 611 |
(2) The qualifications of members and any limitations on | 612 |
their number; | 613 |
(3) The manner of admission, withdrawal, suspension, and | 614 |
expulsion of members; | 615 |
(4) Generally, the governance rights, financial rights, | 616 |
assignability of governance and financial rights, and other | 617 |
rights, privileges, and obligations of members and their | 618 |
membership interests, which may be further described in member | 619 |
control agreements; | 620 |
(5) Any provisions required by the articles to be in the | 621 |
bylaws. | 622 |
(D)(1) Bylaws shall be adopted before any distributions to | 623 |
members, but if the articles or bylaws provide that rights of | 624 |
contributors to a class of membership interest will be determined | 625 |
in the bylaws, the bylaws shall be adopted before the acceptance | 626 |
of any contributions to that class. | 627 |
(2) Subject to divisions (E) to (G) of this section, the | 628 |
bylaws of a cooperative may be adopted or amended by the | 629 |
directors, or the members may adopt or amend bylaws at a regular | 630 |
or special members' meeting if all of the following apply: | 631 |
(a) The notice of the regular or special meeting contains a | 632 |
statement that the bylaws or amended bylaws will be voted on and | 633 |
copies are included with the notice, or copies are available upon | 634 |
request from the cooperative, and a summary statement of the | 635 |
proposed bylaws or amendment is included with the notice. | 636 |
(b) A quorum exists as determined in accordance with section | 637 |
1770.37 of the Revised Code. | 638 |
(c) The bylaws or amendment is approved by a majority vote | 639 |
cast, or for a cooperative with articles or bylaws requiring more | 640 |
than majority approval or other conditions for approval, the | 641 |
bylaws or amendment is approved by a proportion of the vote cast | 642 |
or the number of the total members as required by the articles or | 643 |
bylaws and the conditions for approval in the articles or bylaws | 644 |
have been satisfied. | 645 |
Until the next annual or special members' meeting, the | 646 |
majority of directors may adopt and amend bylaws for the | 647 |
cooperative that are consistent with divisions (E) to (G) of this | 648 |
section, which may be further amended or repealed by the members | 649 |
at an annual or special members' meeting. | 650 |
(E) The board may amend the bylaws at any time to add, | 651 |
change, or delete a provision unless either of the following | 652 |
applies: | 653 |
(1) This chapter, the articles, or the bylaws reserve the | 654 |
power exclusively to the members in whole or in part. | 655 |
(2) A particular bylaw expressly prohibits the board from | 656 |
doing so. | 657 |
An amendment of the bylaws by the board shall be distributed | 658 |
to the members not later than ten days after adoption, and the | 659 |
notice of the annual meeting of the members shall contain a notice | 660 |
of and a summary of the amendment. The members may amend the | 661 |
bylaws even though the bylaws also may be amended by the board. | 662 |
(F) The members may amend the bylaws to establish a greater | 663 |
quorum or voting requirement for members, or voting groups of | 664 |
members, than is required under this chapter. In addition, the | 665 |
members may amend the bylaws to subsequently reduce or eliminate a | 666 |
greater quorum or voting requirement for members or voting groups | 667 |
of members. An amendment to the bylaws to establish, reduce, or | 668 |
eliminate a greater quorum or voting requirement for members shall | 669 |
meet the same quorum requirement and be adopted by the same vote | 670 |
and voting groups required to take action under the quorum and | 671 |
voting requirements then in effect or proposed to be established, | 672 |
whichever are greater. | 673 |
A bylaw that establishes a greater quorum or voting | 674 |
requirement for members under this division shall not be adopted | 675 |
or amended by the board. | 676 |
(G) A bylaw that establishes a greater quorum or voting | 677 |
requirement for the board may be amended only if either of the | 678 |
following applies: | 679 |
(1) If adopted by the members, only by the members; | 680 |
(2) If adopted by the board, either by the members or by the | 681 |
board. | 682 |
A bylaw adopted or amended by the members that establishes a | 683 |
greater quorum or voting requirement for the board may provide | 684 |
that it may be amended only by a specified vote of either the | 685 |
members or the board, but if the bylaw is to be amended by a | 686 |
specified vote of the members, the bylaw shall be adopted by the | 687 |
same specified vote of the members. | 688 |
Action by the board under division (G)(2) of this section | 689 |
shall meet the same quorum requirement and be adopted by the same | 690 |
vote required to take action under the quorum and voting | 691 |
requirement then in effect or proposed to be established, | 692 |
whichever are greater. | 693 |
(H)(1) Unless otherwise provided in the articles or bylaws, | 694 |
the board may adopt bylaws to be effective only in an emergency. | 695 |
The emergency bylaws, which are subject to amendment or repeal by | 696 |
the members, may include all provisions necessary for managing the | 697 |
cooperative during the emergency, including all of the following: | 698 |
(a) Procedures for calling a meeting of the board; | 699 |
(b) Quorum requirements for the meeting; | 700 |
(c) Designation of additional or substitute directors. | 701 |
(2) All provisions of the regular bylaws that are consistent | 702 |
with the emergency bylaws shall remain in effect during the | 703 |
emergency. The emergency bylaws shall not be effective after the | 704 |
emergency ends. | 705 |
(3) With respect to actions taken in good faith in accordance | 706 |
with the emergency bylaws, both of the following apply: | 707 |
(a) The actions are binding on the cooperative. | 708 |
(b) The actions may not be the basis for imposition of | 709 |
liability on any director, officer, employee, or statutory agent | 710 |
of the cooperative on the grounds that the action was not | 711 |
authorized cooperative action. | 712 |
(4) For purposes of division (H) of this section, an | 713 |
emergency exists if a quorum of the directors cannot readily be | 714 |
obtained because of a catastrophic event. | 715 |
Sec. 1770.13. (A) A cooperative shall keep as permanent | 716 |
records minutes of all meetings of its members and of the board, a | 717 |
record of all actions taken by the members or the board without a | 718 |
meeting by a written unanimous consent in lieu of a meeting, and a | 719 |
record of all waivers of notices of meetings of the members and of | 720 |
the board. | 721 |
(B) A cooperative shall maintain appropriate accounting | 722 |
records. | 723 |
(C) A cooperative shall maintain its records in written form | 724 |
or in another form that is capable of conversion into written form | 725 |
within a reasonable time. | 726 |
(D) A cooperative shall keep a copy of each of the following | 727 |
records at its principal office: | 728 |
(1) Its articles and other governing instruments; | 729 |
(2) Its bylaws or other similar instruments; | 730 |
(3) A record of the names and addresses of its members in a | 731 |
form that allows preparation of an alphabetical list of members | 732 |
with each member's address; | 733 |
(4) The minutes of members' meetings, and records of all | 734 |
actions taken by members without a meeting by unanimous written | 735 |
consent in lieu of a meeting, for the preceding three calendar | 736 |
years; | 737 |
(5) All written communications within the preceding three | 738 |
calendar years to members as a group or to any class of members as | 739 |
a group; | 740 |
(6) A list of the names and business addresses of its current | 741 |
board members and officers. | 742 |
(E) Except as otherwise limited by this chapter, the board of | 743 |
a cooperative shall have discretion to determine what records are | 744 |
appropriate for the purposes of the cooperative, the length of | 745 |
time that records are to be retained, and policies relating to the | 746 |
confidentiality, disclosure, inspection, and copying of the | 747 |
records of the cooperative. | 748 |
Sec. 1770.14. (A) In addition to other powers, a cooperative: | 749 |
(1) May perform every act necessary or proper to the conduct | 750 |
of the cooperative's business or the accomplishment of the | 751 |
purposes of the cooperative; | 752 |
(2) Has other rights, powers, or privileges granted by the | 753 |
laws of this state to other cooperatives, except those that are | 754 |
inconsistent with the express provisions of this chapter; | 755 |
(3) Has the powers given in section 1770.02 of the Revised | 756 |
Code and in this section. | 757 |
This section does not give a cooperative the power or | 758 |
authority to exercise the powers of a credit union under Chapter | 759 |
1733. of the Revised Code or a bank, savings and loan association, | 760 |
or savings bank under Title XI of the Revised Code. | 761 |
(B) A cooperative may buy, sell, or deal in its own products; | 762 |
the products of its individual members, patrons, or nonmembers; | 763 |
the products of another cooperative or an association or of its | 764 |
members or patrons; or the products of another person or entity. A | 765 |
cooperative may negotiate the price at which its products may be | 766 |
sold. | 767 |
(C) A cooperative may enter into or become a party to a | 768 |
contract or agreement for the cooperative or for the cooperative's | 769 |
individual members or patrons or between the cooperative and its | 770 |
members. | 771 |
(D) A cooperative may purchase and hold, lease, mortgage, | 772 |
encumber, sell, exchange, and convey as a legal entity real, | 773 |
personal, and intellectual property, including real estate, | 774 |
buildings, personal property, patents, and copyrights as the | 775 |
business of the cooperative may require, including the sale or | 776 |
other disposition of assets required by the business of the | 777 |
cooperative as determined by the board. A cooperative may take, | 778 |
receive, and hold real and personal property, including the | 779 |
principal and interest of money or other funds and rights in a | 780 |
contract, in trust for any purpose not inconsistent with the | 781 |
purposes of the cooperative specified in its articles or bylaws | 782 |
and may exercise fiduciary powers in relation to taking, | 783 |
receiving, and holding the real and personal property. A | 784 |
cooperative may erect buildings or other structures or facilities | 785 |
on the cooperative's owned or leased property or on a right-of-way | 786 |
that is legally acquired by the cooperative. | 787 |
(E) A cooperative may issue bonds, debentures, or other | 788 |
evidence of indebtedness and may borrow money, may secure any of | 789 |
its obligations by mortgage of or creation of a security interest | 790 |
in or other encumbrances or assignment of all or any of its | 791 |
property, franchises, or income, and may issue guarantees for any | 792 |
legal purpose. A cooperative may form special purpose business | 793 |
entities to secure assets of the cooperative. | 794 |
(F) A cooperative may make advances to its members or patrons | 795 |
on products delivered by the members or patrons to the | 796 |
cooperative. | 797 |
(G) A cooperative may accept donations or deposits of money | 798 |
or real or personal property from other cooperatives or | 799 |
associations from which it is constituted. | 800 |
(H) A cooperative may loan or borrow money to or from | 801 |
individual members, cooperatives, or associations from which it is | 802 |
constituted with security that it considers sufficient. A | 803 |
cooperative may invest and reinvest its funds. | 804 |
(I) A cooperative may pay pensions, retirement allowances, | 805 |
and compensation for past services to and for the benefit of, and | 806 |
establish, maintain, continue, and carry out, wholly or partially | 807 |
at the expense of the cooperative, employee benefit and incentive | 808 |
plans, trusts, and provisions to or for the benefit of, any or all | 809 |
of its and its related organizations' officers, managers, | 810 |
directors, governors, employees, and statutory agents and, in the | 811 |
case of a related organization that is a cooperative, members who | 812 |
provide services to the cooperative, and any of their families, | 813 |
dependents, and beneficiaries. A cooperative may indemnify and | 814 |
purchase and maintain insurance for and on behalf of a fiduciary | 815 |
of any of those employee benefit and incentive plans, trusts, and | 816 |
provisions. | 817 |
(J) A cooperative may provide for its benefit life insurance | 818 |
and other insurance with respect to the services of any or all of | 819 |
its members, managers, directors, employees, and statutory agents | 820 |
or on the life of a member for the purpose of acquiring at the | 821 |
death of the member any or all membership interests in the | 822 |
cooperative owned by the member. | 823 |
(K) A cooperative may purchase, acquire, hold, or dispose of | 824 |
the ownership interests of another business entity or business | 825 |
entities whether organized under the laws of this state or another | 826 |
state or the United States and assume all rights, interests, | 827 |
privileges, responsibilities, and obligations arising out of the | 828 |
ownership interests, including a business entity organized: | 829 |
(1) As a federation of associations; | 830 |
(2) For the purpose of forming a district, state, or national | 831 |
marketing sales or service agency; | 832 |
(3) For the purpose of acquiring marketing facilities at | 833 |
terminal or other markets in this state or other states. | 834 |
A cooperative may purchase, own, and hold ownership | 835 |
interests, including stock and other equity interests, | 836 |
memberships, interests in nonstock capital, and evidences of | 837 |
indebtedness of any domestic business entity or foreign business | 838 |
entity. | 839 |
(L) A cooperative may exercise any and all fiduciary powers | 840 |
in relations with members, cooperatives, associations, or business | 841 |
entities from which it is constituted. | 842 |
Sec. 1770.15. (A) In anticipation of or during an emergency | 843 |
as described in division (D) of this section, a board may modify | 844 |
lines of succession to accommodate the incapacity of any director, | 845 |
officer, employee, or statutory agent, relocate the principal | 846 |
office, designate alternative principal offices or regional | 847 |
offices, or authorize the officers to do so. | 848 |
(B) During an emergency, unless emergency bylaws provide | 849 |
otherwise, both of the following apply: | 850 |
(1) Notice of a meeting of the board need be given only to | 851 |
those directors whom it is practicable to reach and may be given | 852 |
in any practicable manner, including by publication or radio. | 853 |
(2) One or more officers of the cooperative who are present | 854 |
at a meeting of the board may be deemed to be directors for the | 855 |
meeting, in order of rank and within the same rank in order of | 856 |
seniority, as necessary to achieve a quorum. | 857 |
(C) Cooperative action taken in good faith during an | 858 |
emergency under this section to further the ordinary business | 859 |
affairs of the cooperative binds the cooperative and may not be | 860 |
the basis for the imposition of liability on any director, | 861 |
officer, employee, or statutory agent of the cooperative on the | 862 |
grounds that the action was not an authorized cooperative action. | 863 |
(D) An emergency exists for purposes of this section if a | 864 |
quorum of the directors cannot readily be obtained because of a | 865 |
catastrophic event. | 866 |
Sec. 1770.16. A foreign cooperative may conduct activities | 867 |
in this state upon compliance with the general requirements that | 868 |
are applicable to such a cooperative desiring to do business in | 869 |
this state. All contracts that may be made by a cooperative under | 870 |
this chapter and that are made by or with such a foreign | 871 |
cooperative shall be enforceable in this state with all of the | 872 |
remedies established in this chapter. | 873 |
Sec. 1770.17. (A) A cooperative and a patron member or patron | 874 |
of the cooperative may make and execute a marketing contract that | 875 |
requires the patron member or patron to sell a specified portion | 876 |
of the patron member's or patron's agricultural product or | 877 |
specified commodity produced from a certain area exclusively to or | 878 |
through the cooperative or a facility established by the | 879 |
cooperative. | 880 |
If a sale is contracted to the cooperative, the sale shall | 881 |
transfer title to the product absolutely, except for any recorded | 882 |
lien or security interest against the agricultural products of the | 883 |
patron member or patron, to the cooperative on delivery of the | 884 |
product or at another specified time if expressly provided in the | 885 |
contract. However, the contract may allow the cooperative to sell | 886 |
or resell the product of its patron member or patron with or | 887 |
without taking title to the product, and pay the resale price to | 888 |
the patron member or patron, after deducting all necessary | 889 |
selling, overhead, and other costs and expenses, including other | 890 |
proper reserves and interest. | 891 |
(B) A single term of a marketing contract executed under this | 892 |
section shall not exceed ten years, but a marketing contract may | 893 |
be made self-renewing for periods not exceeding five years each, | 894 |
subject to the right of either party to terminate by giving | 895 |
written notice of the termination during a period of the current | 896 |
term as specified in the contract. | 897 |
(C) The bylaws of the cooperative or the marketing contract, | 898 |
or both, may set a specific sum as liquidated damages to be paid | 899 |
by the patron member or patron to the cooperative for breach of | 900 |
any provision of the marketing contract entered into under this | 901 |
section and may provide that the patron member or patron shall pay | 902 |
the costs, premiums for bonds, expenses, and fees if an action is | 903 |
brought on the contract by the cooperative. The remedies for | 904 |
breach of contract are valid and enforceable in the courts of this | 905 |
state. The provisions shall be enforced as liquidated damages and | 906 |
are not considered a penalty. | 907 |
(D) If there is a breach or threatened breach of a marketing | 908 |
contract entered into under this section by a patron member or | 909 |
patron, the cooperative is entitled to an injunction to prevent | 910 |
further breach of the contract and to a decree of specific | 911 |
performance of the contract. Pending the adjudication of the | 912 |
action after filing a complaint showing the breach or threatened | 913 |
breach and filing a sufficient bond, the cooperative is entitled | 914 |
to a temporary restraining order and preliminary injunction | 915 |
against the patron member or patron. | 916 |
(E) No person shall knowingly induce or attempt to induce a | 917 |
patron member or patron of a cooperative organized under this | 918 |
chapter to breach a marketing contract with the cooperative or | 919 |
knowingly spread false reports about the cooperative's finances or | 920 |
management. | 921 |
(F) A person may be liable to a cooperative for civil damages | 922 |
for a violation of division (E) of this section. Each violation | 923 |
constitutes a separate offense. | 924 |
Sec. 1770.20. (A) A cooperative shall be governed by its | 925 |
board, which shall take all action for and on behalf of the | 926 |
cooperative, except those actions reserved or granted to members. | 927 |
Board action shall be by the affirmative vote of a majority of the | 928 |
directors voting at a duly called meeting unless a greater | 929 |
majority is required by the articles or bylaws of the cooperative. | 930 |
A director individually or collectively with other directors does | 931 |
not have authority to act for or on behalf of the cooperative | 932 |
unless authorized by the board. A director may advocate interests | 933 |
of members or member groups to the board, but the fiduciary duty | 934 |
of a director is to represent the best interests of the | 935 |
cooperative and all members collectively. | 936 |
(B) The board shall not have fewer than five directors, | 937 |
except that a cooperative with fifty or fewer members may have | 938 |
three or more directors as prescribed in the articles or bylaws. | 939 |
Sec. 1770.21. (A) The organizers of a cooperative shall | 940 |
elect the first board to serve until directors are elected by | 941 |
members of the cooperative. Until election by the members, the | 942 |
first board shall appoint directors to fill any vacancies. | 943 |
(B)(1) Directors shall be elected for the term, at the time, | 944 |
and in the manner provided in this section and the bylaws. | 945 |
(2) A majority of the directors shall be members and a | 946 |
majority of the directors shall be elected exclusively by the | 947 |
members holding patron membership interests unless otherwise | 948 |
provided in the articles or bylaws. | 949 |
(3) The voting authority of the directors may be allocated | 950 |
according to allocation units or equity classifications of the | 951 |
cooperative, provided that at least one-half of the voting power | 952 |
on general matters of the cooperative shall be allocated to the | 953 |
directors elected by members holding patron membership interests, | 954 |
or in the alternative, the directors elected by the members | 955 |
holding patron membership interests shall have an equal or shall | 956 |
not have a minority voting power on general matters of the | 957 |
cooperative. | 958 |
(4) A director shall hold office for the term to which the | 959 |
director was elected and until a successor is elected and has | 960 |
qualified to be a director or until earlier death, resignation, | 961 |
removal, or disqualification of the director. | 962 |
(5) The expiration of a director's term with or without | 963 |
election of a qualified successor does not make the prior or | 964 |
subsequent acts of the director or the board void or voidable. | 965 |
(6) Subject to any limitation in the articles or bylaws, the | 966 |
board may set the compensation of directors. | 967 |
(7) Directors may be divided into or designated and elected | 968 |
by class or other distinction as provided in the articles or | 969 |
bylaws. | 970 |
(8) A director may resign by giving written notice to the | 971 |
chair of the board or the board. The resignation is effective | 972 |
without acceptance when the notice is given to the chair of the | 973 |
board or the board unless a later effective time is specified in | 974 |
the notice. | 975 |
(C) Directors shall be elected at the regular members' | 976 |
meeting for the terms of office prescribed in the bylaws. Except | 977 |
for directors elected at district meetings or special meetings to | 978 |
fill a vacancy, all directors shall be elected at the regular | 979 |
members' meeting. There shall be no cumulative voting for | 980 |
directors except as provided in this chapter and the articles or | 981 |
bylaws. | 982 |
(D) For a cooperative that has districts or other units, | 983 |
members may elect directors on a district or unit basis if | 984 |
provided in the bylaws. The directors may be nominated or elected | 985 |
at district meetings if provided in the bylaws. Directors who are | 986 |
nominated at district meetings shall be elected at the regular | 987 |
members' meeting by vote of the entire membership unless the | 988 |
bylaws provide that directors who are nominated at district | 989 |
meetings are to be elected by vote of the members of the district, | 990 |
at the district meeting, or at the regular members' meeting. | 991 |
(E) The following shall apply to voting by mail or by | 992 |
alternative ballot: | 993 |
(1) A member may not vote for a director other than by being | 994 |
present at a meeting or by mail ballot or alternative ballot | 995 |
authorized by the board. | 996 |
(2) A ballot shall be in a form prescribed by the board. | 997 |
(3) A member shall mark the ballot for the candidate chosen | 998 |
and mail the ballot to the cooperative in a sealed plain envelope | 999 |
inside another envelope bearing the member's name or shall vote | 1000 |
designating the candidate chosen by alternative ballot in the | 1001 |
manner prescribed by the board. | 1002 |
(4) If the ballot of the member is received by the | 1003 |
cooperative on or before the date of the regular members' meeting | 1004 |
or as otherwise prescribed for alternative ballots, the ballot | 1005 |
shall be accepted and counted as the vote of the member. | 1006 |
Sec. 1770.22. (A) If a patron member director's position | 1007 |
becomes vacant or a new director position is created for a | 1008 |
director that was or is to be elected by patron members, the | 1009 |
board, in consultation with the directors elected by patron | 1010 |
members, shall appoint a patron member of the cooperative to fill | 1011 |
the director's position until the next regular or special members' | 1012 |
meeting. If there are no directors elected by patron members on | 1013 |
the board at the time of the vacancy, a special patron members' | 1014 |
meeting shall be called to fill the patron member director | 1015 |
vacancy. | 1016 |
(B) If a vacating director was not elected by the patron | 1017 |
members or a new director position is created, unless otherwise | 1018 |
provided in the articles or bylaws, the board shall appoint a | 1019 |
director to fill the vacant position by majority vote of the | 1020 |
remaining or then serving directors even if they constitute less | 1021 |
than a quorum. At the next regular or special members' meeting, | 1022 |
the members or patron members shall elect a director to fill the | 1023 |
unexpired term of the vacant director's position. | 1024 |
Sec. 1770.23. (A) A director may be removed at any time, | 1025 |
with or without cause, if all of the following apply: | 1026 |
(1) The director was named by the board to fill a vacancy. | 1027 |
(2) The members have not elected directors in the interval | 1028 |
between the time of the appointment to fill a vacancy and the time | 1029 |
of the removal. | 1030 |
(3) A majority of the remaining directors affirmatively vote | 1031 |
to remove the director. | 1032 |
(B) Any one or all of the directors may be removed at any | 1033 |
time, with or without cause, by the affirmative vote of the | 1034 |
holders of a majority of the voting power of membership interests | 1035 |
entitled to vote at an election of directors, provided that if a | 1036 |
director has been elected solely by the patron members or the | 1037 |
holders of a class or series of membership interests as stated in | 1038 |
the articles or bylaws, that director may be removed only by the | 1039 |
affirmative vote of the holders of a majority of the voting power | 1040 |
of the patron members for a director elected by the patron members | 1041 |
or of all membership interests of that class or series entitled to | 1042 |
vote at an election of that director. | 1043 |
(C) New directors may be elected at a meeting at which | 1044 |
directors are removed. | 1045 |
(D) This section applies unless the articles or bylaws of a | 1046 |
cooperative establish different requirements and procedures. | 1047 |
Sec. 1770.24. (A) Meetings of a board may be held from time | 1048 |
to time as provided in the articles or bylaws at any place within | 1049 |
or without the state that the board may select or by any means | 1050 |
described in division (B) of this section. If the board fails to | 1051 |
select a place for a meeting, the meeting shall be held at the | 1052 |
principal executive office unless the articles or bylaws provide | 1053 |
otherwise. | 1054 |
(B)(1) A conference among directors by any means of | 1055 |
communication through which the directors may simultaneously hear | 1056 |
each other during the conference constitutes a board meeting if | 1057 |
the same notice concerning the meeting is given as would be | 1058 |
required by division (C) of this section and if the number of | 1059 |
directors participating in the conference would be sufficient to | 1060 |
constitute a quorum at a meeting. Participation in a meeting by | 1061 |
that means constitutes presence in person at the meeting. | 1062 |
(2) A director may participate in a board meeting not | 1063 |
described in division (B)(1) of this section by any means of | 1064 |
communication through which the director, other directors so | 1065 |
participating, and all directors physically present at the meeting | 1066 |
may simultaneously hear each other during the meeting. | 1067 |
Participation in a meeting by that means constitutes presence in | 1068 |
person at the meeting. | 1069 |
(C) Unless the articles or bylaws provide for a different | 1070 |
time period, a director may call a board meeting by giving at | 1071 |
least ten days' notice or, in the case of organizational meetings, | 1072 |
at least three days' notice to all directors of the date, time, | 1073 |
and place of the meeting. The notice need not state the purpose of | 1074 |
the meeting unless this chapter, the articles, or the bylaws | 1075 |
require it. | 1076 |
(D) If the day or date, time, and place of a board meeting | 1077 |
have been specified in the articles or bylaws or announced at a | 1078 |
previous meeting of the board, no notice is required. Notice of an | 1079 |
adjourned meeting need not be given other than by announcement at | 1080 |
the meeting at which adjournment occurs. | 1081 |
(E) A director may waive notice of a meeting of the board. A | 1082 |
waiver of notice by a director entitled to notice is effective | 1083 |
whether given before, at, or after the meeting and whether given | 1084 |
in writing, orally, or by attendance. Attendance by a director at | 1085 |
a meeting is a waiver of notice of that meeting, except where the | 1086 |
director objects at the beginning of the meeting to the | 1087 |
transaction of business because the meeting is not lawfully called | 1088 |
or convened and does not participate in the meeting after the | 1089 |
objection. | 1090 |
(F) If the articles or bylaws so provide, a director may give | 1091 |
advance written consent or opposition to a proposal to be acted on | 1092 |
at a board meeting. If the director is not present at the meeting, | 1093 |
consent or opposition to a proposal does not constitute presence | 1094 |
for purposes of determining the existence of a quorum. Consent or | 1095 |
opposition shall be counted as the vote of a director present at | 1096 |
the meeting in favor of or against the proposal and shall be | 1097 |
entered in the minutes or other record of action at the meeting if | 1098 |
the proposal acted on at the meeting is substantially the same or | 1099 |
has substantially the same effect as the proposal to which the | 1100 |
director has consented or objected. | 1101 |
(G) A majority, or a larger or smaller portion or number | 1102 |
provided in the articles or bylaws, of the directors currently | 1103 |
holding office is a quorum for the transaction of business. In the | 1104 |
absence of a quorum, a majority of the directors present may | 1105 |
adjourn a meeting from time to time until a quorum is present. If | 1106 |
a quorum is present when a duly called or held meeting is | 1107 |
convened, the directors present may continue to transact business | 1108 |
until adjournment even though the withdrawal of a number of | 1109 |
directors originally present leaves less than the portion or | 1110 |
number otherwise required for a quorum. | 1111 |
Sec. 1770.25. (A) A board shall take action by the | 1112 |
affirmative vote of the greater of a majority of directors present | 1113 |
at a duly held meeting at the time the action is taken or a | 1114 |
majority of the minimum portion or number of directors that would | 1115 |
constitute a quorum for the transaction of business at the | 1116 |
meeting, except when this chapter, the articles, or the bylaws | 1117 |
require the affirmative vote of a larger portion or number. If the | 1118 |
articles or bylaws require a larger portion or number than is | 1119 |
required by this chapter for a particular action, the articles or | 1120 |
bylaws control. | 1121 |
(B) An action that is required or permitted to be taken at a | 1122 |
board meeting may be taken by written action signed by all of the | 1123 |
directors. If the articles or bylaws so provide, an action, other | 1124 |
than an action requiring member approval, may be taken by written | 1125 |
action signed by the number of directors that would be required to | 1126 |
take the same action at a meeting of the board at which all | 1127 |
directors were present. The written action is effective when | 1128 |
signed by the required number of directors unless a different | 1129 |
effective time is provided in the written action. | 1130 |
(C) When written action is permitted to be taken by fewer | 1131 |
than all directors, all directors shall be notified immediately of | 1132 |
its text and effective date. Failure to provide the notice does | 1133 |
not invalidate the written action. A director who does not sign or | 1134 |
consent to the written action has no liability for the action or | 1135 |
actions taken by the written action. | 1136 |
Sec. 1770.26. (A) A board shall establish an audit committee | 1137 |
to review the financial information and accounting report of the | 1138 |
cooperative. The cooperative shall have the financial information | 1139 |
audited for presentation to the members unless the bylaws allow | 1140 |
financial statements that are not audited and the financial | 1141 |
statements clearly state that they are not audited and state the | 1142 |
difference between financial statements that are not audited and | 1143 |
financial statements that are audited and prepared according to | 1144 |
generally accepted accounting procedures. The directors shall | 1145 |
elect members to the audit committee. The audit committee shall | 1146 |
ensure an independent review of the cooperative's finances and | 1147 |
audit, if any. | 1148 |
(B)(1) A resolution approved by the affirmative vote of a | 1149 |
majority of the board may establish committees having the | 1150 |
authority of the board in the management of the business of the | 1151 |
cooperative only to the extent provided in the resolution. | 1152 |
Committees may include a special litigation committee consisting | 1153 |
of one or more independent directors or other independent persons | 1154 |
to consider legal rights or remedies of the cooperative and | 1155 |
whether those rights and remedies should be pursued. Committees | 1156 |
other than special litigation committees are subject at all times | 1157 |
to the direction and control of the board. | 1158 |
(2) Unless the articles or bylaws provide for a different | 1159 |
membership or manner of appointment, a committee shall consist of | 1160 |
one or more persons, who need not be directors, appointed by | 1161 |
affirmative vote of a majority of the directors present. | 1162 |
(3) The procedures governing meetings of the board apply to | 1163 |
committees and members of committees to the same extent as those | 1164 |
procedures apply to the board and individual directors. | 1165 |
(4) Minutes, if any, of committee meetings shall be made | 1166 |
available upon request to members of the committee and to any | 1167 |
director. | 1168 |
(5) The establishment of, delegation of authority to, and | 1169 |
action by a committee do not alone constitute compliance by a | 1170 |
director with the standard of conduct established in section | 1171 |
1770.27 of the Revised Code. | 1172 |
(6) Committee members are considered to be directors for | 1173 |
purposes of sections 1770.27, 1770.28, and 1770.30 of the Revised | 1174 |
Code. | 1175 |
Sec. 1770.27. (A) A director shall discharge the duties of | 1176 |
the position of director in good faith, in a manner that the | 1177 |
director reasonably believes to be in the best interests of the | 1178 |
cooperative, and with the care that an ordinarily prudent person | 1179 |
in a like position would exercise under similar circumstances. A | 1180 |
person who so performs those duties is not liable by reason of | 1181 |
being or having been a director of the cooperative. | 1182 |
(B) A director may rely on information, opinions, reports, or | 1183 |
statements, including financial statements and other financial | 1184 |
data, prepared or presented by any of the following: | 1185 |
(1) One or more officers or employees of the cooperative whom | 1186 |
the director reasonably believes to be liable and competent in the | 1187 |
matters presented; | 1188 |
(2) Counsel, public accountants, or other persons as to | 1189 |
matters that the director reasonably believes are within the | 1190 |
person's professional or expert competence; | 1191 |
(3) A committee of the board on which the director does not | 1192 |
serve, duly established by the board, as to matters within its | 1193 |
designated authority if the director reasonably believes the | 1194 |
committee to merit confidence. | 1195 |
Division (B) of this section does not apply to a director who | 1196 |
has knowledge concerning the matter in question that makes the | 1197 |
reliance otherwise permitted by division (B) of this section | 1198 |
unwarranted. | 1199 |
(C) A director who is present at a meeting of the board when | 1200 |
an action is approved by the affirmative vote of a majority of the | 1201 |
directors present is presumed to have assented to the action | 1202 |
approved unless the director does any of the following: | 1203 |
(1) Objects at the beginning of the meeting to the | 1204 |
transaction of business because the meeting is not lawfully called | 1205 |
or convened and does not participate in the meeting after the | 1206 |
objection, in which case the director is not considered to be | 1207 |
present at the meeting for any purpose of this chapter; | 1208 |
(2) Votes against the action at the meeting; | 1209 |
(3) Is prohibited by a conflict of interest from voting on | 1210 |
the action. | 1211 |
(D) In discharging the duties of the position of director, a | 1212 |
director, in considering the best interests of the cooperative, | 1213 |
may consider the interests of the cooperative's employees, | 1214 |
customers, suppliers, and creditors, the economy of the state, and | 1215 |
long-term as well as short-term interests of the cooperative and | 1216 |
its patron members, including the possibility that those interests | 1217 |
may be best served by the continued independence of the | 1218 |
cooperative. | 1219 |
Sec. 1770.28. (A) A contract or other transaction between a | 1220 |
cooperative and one or more of its directors, or between a | 1221 |
cooperative and a business entity in or of which one or more of | 1222 |
its directors are governors, directors, managers, officers, or | 1223 |
legal representatives or have a material financial interest, is | 1224 |
not void or voidable because the director or directors or the | 1225 |
other business entities are parties or because the director or | 1226 |
directors are present at the meeting of the members or the board | 1227 |
or a committee at which the contract or transaction is authorized, | 1228 |
approved, or ratified if either of the following applies: | 1229 |
(1) The contract or transaction was, and the person asserting | 1230 |
the validity of the contract or transaction sustains the burden of | 1231 |
establishing that the contract or transaction was, fair and | 1232 |
reasonable as to the cooperative at the time that it was | 1233 |
authorized, approved, or ratified and both of the following apply: | 1234 |
(a) The material facts as to the contract or transaction and | 1235 |
as to the director's or directors' interest are disclosed or known | 1236 |
to the members. | 1237 |
(b) The material facts as to the contract or transaction and | 1238 |
as to the director's or directors' interest are fully disclosed or | 1239 |
known to the board or a committee, and the board or committee | 1240 |
authorizes, approves, or ratifies the contract or transaction in | 1241 |
good faith by a majority of the board or committee, but the | 1242 |
interested director or directors are not counted in determining | 1243 |
the presence of a quorum and do not vote. | 1244 |
(2) The contract or transaction is a distribution, contract, | 1245 |
or transaction that is made available to all members or patron | 1246 |
members as part of the cooperative's business. | 1247 |
(B) If a committee is elected or appointed to authorize, | 1248 |
ratify, or approve a contract or transaction under this section, | 1249 |
the members of the committee shall not have a conflict of interest | 1250 |
and shall be charged with representing the best interests of the | 1251 |
cooperative. | 1252 |
(C) For purposes of this section both of the following apply: | 1253 |
(1) A resolution fixing the compensation of a director or | 1254 |
fixing the compensation of another director as a director, | 1255 |
officer, employee, or statutory agent of the cooperative is not | 1256 |
void or voidable or considered to be a contract or other | 1257 |
transaction between a cooperative and one or more of its directors | 1258 |
for purposes of this section even though the director receiving | 1259 |
the compensation fixed by the resolution is present and voting at | 1260 |
the meeting of the board or a committee at which the resolution is | 1261 |
authorized, approved, or ratified or even though other directors | 1262 |
voting on the resolution are also receiving compensation from the | 1263 |
cooperative. | 1264 |
(2) A director has a material financial interest in each | 1265 |
organization in which the director or the spouse, parents, | 1266 |
children, spouses of children, brothers and sisters, spouses of | 1267 |
brothers and sisters, and brothers and sisters of the spouse of | 1268 |
the director or any combination of them have a material financial | 1269 |
interest. For purposes of this section, a contract or other | 1270 |
transaction between a cooperative and the spouse, parents, | 1271 |
children, spouses of children, brothers and sisters, spouses of | 1272 |
brothers and sisters, and brothers and sisters of the spouse of a | 1273 |
director or any combination of them is considered to be a | 1274 |
transaction between the cooperative and the director. | 1275 |
Sec. 1770.29. (A) A director's personal liability to the | 1276 |
cooperative or members for monetary damages for breach of | 1277 |
fiduciary duty as a director may be eliminated or limited in the | 1278 |
articles or bylaws, except as provided in division (B) of this | 1279 |
section. | 1280 |
(B) The articles or bylaws may not eliminate or limit the | 1281 |
liability of a director for any of the following: | 1282 |
(1) A breach of the director's duty of loyalty to the | 1283 |
cooperative or its members; | 1284 |
(2) Acts or omissions that are not in good faith or involve | 1285 |
intentional misconduct or a knowing violation of law; | 1286 |
(3) Knowing violations of securities laws or illegal | 1287 |
distributions; | 1288 |
(4) A transaction from which the director derived an improper | 1289 |
personal benefit; | 1290 |
(5) An act or omission occurring before the date when the | 1291 |
provision in the articles or bylaws eliminating or limiting | 1292 |
liability becomes effective. | 1293 |
Sec. 1770.30. (A) As used in this section: | 1294 |
(1) "Cooperative" includes a domestic or foreign cooperative | 1295 |
that was the predecessor of the cooperative referred to in this | 1296 |
section in a merger or other transaction in which the | 1297 |
predecessor's existence ceased upon consummation of the | 1298 |
transaction. | 1299 |
(2) "Official capacity" means all of the following: | 1300 |
(a) With respect to a director, the position of director in a | 1301 |
cooperative; | 1302 |
(b) With respect to a person other than a director, the | 1303 |
elective or appointive office or position held by the person, | 1304 |
membership on a committee of the board, the employment | 1305 |
relationship undertaken by an employee of the cooperative, or the | 1306 |
scope of services provided by members of the cooperative to the | 1307 |
cooperative; | 1308 |
(c) With respect to a director, chief executive officer, | 1309 |
member, or employee of the cooperative who, while holding such an | 1310 |
office or position, is or was serving at the request of the | 1311 |
cooperative or whose duties in that office or position involve or | 1312 |
involved service as a governor, director, manager, officer, | 1313 |
member, partner, trustee, employee, or agent of another | 1314 |
organization or employee benefit plan, the office or position of | 1315 |
that person as a governor, director, manager, officer, member, | 1316 |
partner, trustee, employee, or agent, as the case may be, of the | 1317 |
other organization or employee benefit plan. | 1318 |
(3) "Proceeding" means a threatened, pending, or completed | 1319 |
civil, criminal, administrative, arbitration, or investigative | 1320 |
proceeding, including a proceeding by or in the right of the | 1321 |
cooperative. | 1322 |
(B) Subject to division (D) of this section, a cooperative | 1323 |
shall indemnify a person that is made or threatened to be made a | 1324 |
party to a proceeding by reason of the former or present official | 1325 |
capacity of the person against judgments, penalties, fines, | 1326 |
including, without limitation, excise taxes assessed against the | 1327 |
person with respect to an employee benefit plan, settlements, and | 1328 |
reasonable expenses, including attorney's fees and disbursements | 1329 |
incurred by the person in connection with the proceeding, if, with | 1330 |
respect to the acts or omissions of the person complained of in | 1331 |
the proceeding, all of the following apply to the person: | 1332 |
(1) The person has not been indemnified by another | 1333 |
organization or employee benefit plan for the same judgments, | 1334 |
penalties, fines, including, without limitation, excise taxes | 1335 |
assessed against the person with respect to an employee benefit | 1336 |
plan, settlements, and reasonable expenses, including attorney | 1337 |
fees and disbursements incurred by the person in connection with | 1338 |
the proceeding, with respect to the same acts or omissions. | 1339 |
(2) The person acted in good faith. | 1340 |
(3) The person received no improper personal benefit, and the | 1341 |
person has not committed an act for which liability cannot be | 1342 |
eliminated or limited under section 1770.29 of the Revised Code. | 1343 |
(4) In the case of a criminal proceeding, the person had no | 1344 |
reasonable cause to believe the conduct was unlawful. | 1345 |
(5) In the case of acts or omissions occurring in the | 1346 |
person's official capacity, the person reasonably believed that | 1347 |
the conduct was in the best interests of the cooperative or that | 1348 |
the conduct was not opposed to the best interests of the | 1349 |
cooperative. If the person's acts or omissions complained of in | 1350 |
the proceeding relate to conduct as a director, officer, trustee, | 1351 |
employee, or agent of an employee benefit plan, the conduct is not | 1352 |
considered to be opposed to the best interests of the cooperative | 1353 |
if the person reasonably believed that the conduct was in the best | 1354 |
interests of the participants or beneficiaries of the employee | 1355 |
benefit plan. | 1356 |
The termination of a proceeding by judgment, order, | 1357 |
settlement, or conviction or upon a plea of no contest does not, | 1358 |
of itself, establish that the person did not meet the criteria | 1359 |
established in this division. | 1360 |
(C) Subject to division (D) of this section, if a person is | 1361 |
made or threatened to be made a party to a proceeding, the person | 1362 |
is entitled, upon written request to the cooperative, to payment | 1363 |
or reimbursement by the cooperative of reasonable expenses, | 1364 |
including attorney fees and disbursements incurred by the person | 1365 |
in advance of the final disposition of the proceeding, if both of | 1366 |
the following apply: | 1367 |
(1) Upon receipt by the cooperative of a written affirmation | 1368 |
by the person of a good faith belief that the criteria for | 1369 |
indemnification established in division (B) of this section have | 1370 |
been satisfied, and a written undertaking by the person to repay | 1371 |
all amounts paid or reimbursed by the cooperative if it is | 1372 |
ultimately determined that the criteria for indemnification have | 1373 |
not been satisfied; | 1374 |
(2) After a determination that the facts then known to those | 1375 |
making the determination would not preclude indemnification under | 1376 |
this section. | 1377 |
The written undertaking required by division (C)(1) of this | 1378 |
section is an unlimited general obligation of the person making | 1379 |
it, but need not be secured and shall be accepted without | 1380 |
reference to financial ability to make the repayment. | 1381 |
(D) The articles or bylaws either may prohibit | 1382 |
indemnification or advances of expenses otherwise required by this | 1383 |
section or may impose conditions on indemnification or advances of | 1384 |
expenses in addition to the conditions established in divisions | 1385 |
(B) and (C) of this section, including, without limitation, | 1386 |
monetary limits on indemnification or advances of expenses if the | 1387 |
conditions apply equally to all persons or to all persons within a | 1388 |
given class. A prohibition or limit on indemnification or advances | 1389 |
of expenses may not apply to or affect the right of a person to | 1390 |
indemnification or advances of expenses with respect to any acts | 1391 |
or omissions of the person occurring before the effective date of | 1392 |
a provision in the articles or the date of adoption of a provision | 1393 |
in the bylaws establishing the prohibition or limit on | 1394 |
indemnification or advances of expenses. | 1395 |
(E) This section does not require or limit the ability of a | 1396 |
cooperative to reimburse expenses, including attorney's fees and | 1397 |
disbursements, incurred by a person in connection with an | 1398 |
appearance as a witness in a proceeding at a time when the person | 1399 |
has not been made or threatened to be made a party to a | 1400 |
proceeding. | 1401 |
(F) All determinations concerning whether indemnification of | 1402 |
a person is required by division (B) of this section and whether a | 1403 |
person is entitled to payment or reimbursement of expenses in | 1404 |
advance of the final disposition of a proceeding as provided in | 1405 |
division (C) of this section shall be made as follows: | 1406 |
(1) By a majority of a quorum of the board if the directors | 1407 |
who are, at the time, parties to the proceeding are not counted | 1408 |
for determining either a majority or the presence of a quorum; | 1409 |
(2) If a quorum under division (F)(1) of this section cannot | 1410 |
be obtained by a majority of a committee of the board consisting | 1411 |
solely of two or more directors not at the time parties to the | 1412 |
proceeding duly designated to act in the matter, by a majority of | 1413 |
the full board, including directors who are parties; | 1414 |
(3) If a determination cannot be made under division (F)(1) | 1415 |
or (2) of this section, by the affirmative vote of the members, | 1416 |
but the membership interests held by parties to the proceeding | 1417 |
shall not be counted in determining the presence of a quorum, and | 1418 |
those members are not considered to be present and entitled to | 1419 |
vote on the determination. | 1420 |
(G) A cooperative may purchase and maintain insurance on | 1421 |
behalf of a person in that person's official capacity against any | 1422 |
liability asserted against and incurred by the person in or | 1423 |
arising from that capacity whether or not the cooperative would | 1424 |
have been required to indemnify the person against the liability | 1425 |
under this section. | 1426 |
(H) A cooperative that indemnifies or advances expenses to a | 1427 |
person in accordance with this section in connection with a | 1428 |
proceeding by or on behalf of the cooperative shall report to the | 1429 |
members in writing the amount of the indemnification or advance | 1430 |
and to whom and on whose behalf it was paid not later than the | 1431 |
next regular members' meeting. | 1432 |
(I) Nothing in this section shall be construed to limit the | 1433 |
power of the cooperative to indemnify persons other than a | 1434 |
director, chief executive officer, member, employee, or member of | 1435 |
a committee of the board of the cooperative by contract or | 1436 |
otherwise. | 1437 |
Sec. 1770.31. (A) A board shall elect both of the following: | 1438 |
(1) A chair; | 1439 |
(2) One or more vice-chairs. | 1440 |
(B) The board shall elect or appoint both of the following: | 1441 |
(1) A records officer; | 1442 |
(2) A financial officer. | 1443 |
(C) The officers, other than the chief executive officer | 1444 |
employed under division (G) of this section, shall not have the | 1445 |
authority to bind the cooperative except as authorized by the | 1446 |
board. | 1447 |
(D) The board may elect or appoint additional officers as the | 1448 |
articles or bylaws authorize or require. | 1449 |
(E) The offices of records officer and financial officer may | 1450 |
be combined. | 1451 |
(F) The chair and first vice-chair shall be directors and | 1452 |
members. The financial officer, records officer, and additional | 1453 |
officers need not be directors or members. | 1454 |
(G) The board may employ a chief executive officer to manage | 1455 |
the day-to-day affairs and business of the cooperative, and, if a | 1456 |
chief executive officer is employed, the chief executive officer | 1457 |
shall have the authority to implement the functions, duties, and | 1458 |
obligations of the cooperative except as restricted by the board. | 1459 |
The chief executive officer shall not exercise authority reserved | 1460 |
to the board or the members under this chapter, the articles, or | 1461 |
the bylaws. | 1462 |
Sec. 1730.32. (A) A cooperative shall have one or more | 1463 |
members, including one or more patron members. A cooperative may | 1464 |
divide members into units, classes, or series as authorized by its | 1465 |
articles or bylaws. The board may implement the use of units, | 1466 |
classes, or series to elect delegates to members' meetings. | 1467 |
(B) A member who purposely or repeatedly violates a provision | 1468 |
of the articles, the bylaws, a member control agreement, or a | 1469 |
marketing contract with the cooperative may be required by the | 1470 |
board to surrender the member's voting power or the financial | 1471 |
rights of membership interest of any class owned by the member, or | 1472 |
both. The cooperative shall refund to the member for the | 1473 |
surrendered financial rights of membership interest the lesser of | 1474 |
the book value or market value of those financial rights payable | 1475 |
in not more than seven years from the date of surrender, or the | 1476 |
board may transfer all of a patron member's financial rights to a | 1477 |
class of financial rights held by members who are not patron | 1478 |
members or to a certificate of interest, which carries liquidation | 1479 |
rights on par with membership interests and is redeemed within | 1480 |
seven years after the transfer as provided in the certificate. | 1481 |
Membership interests required to be surrendered may be reissued or | 1482 |
be retired and canceled by the board. | 1483 |
Sec. 1770.33. A member is not personally liable for the | 1484 |
acts, debts, liabilities, or obligations of a cooperative. A | 1485 |
member is liable for any unpaid subscription for the membership | 1486 |
interest, unpaid membership fees, or a debt for which the member | 1487 |
has separately contracted with the cooperative. | 1488 |
Sec. 1770.34. (A) Regular members' meetings shall be held | 1489 |
annually at a time determined by the board unless otherwise | 1490 |
provided for in the bylaws. | 1491 |
(B) The regular members' meeting shall be held at the | 1492 |
principal place of business of the cooperative or at another | 1493 |
conveniently located place as determined by the bylaws or the | 1494 |
board. | 1495 |
(C) The officers shall submit reports to the members at the | 1496 |
regular members' meeting covering the business of the cooperative | 1497 |
for the previous fiscal year that show the condition of the | 1498 |
cooperative at the close of the fiscal year. | 1499 |
(D) All directors shall be elected at the regular members' | 1500 |
meeting for the terms of office prescribed in the bylaws. However, | 1501 |
if the members have been divided into units, classes, or series, | 1502 |
the bylaws may allow for the election of a director or directors | 1503 |
by unit, class, or series of members. | 1504 |
(E)(1) A cooperative shall give notice of regular members' | 1505 |
meetings by mailing a notice to each member at the member's last | 1506 |
known post office address or by other notification approved by the | 1507 |
board and agreed to by the members. The regular members' meeting | 1508 |
notice shall be published or otherwise provided by approved method | 1509 |
at least two weeks before the date of the meeting or mailed at | 1510 |
least fifteen days before the date of the meeting. | 1511 |
(2) The notice shall contain a summary of any bylaw | 1512 |
amendments adopted by the board since the last annual meeting. | 1513 |
(F) A member may waive notice of a regular members' meeting. | 1514 |
A waiver of notice by a member entitled to notice is effective | 1515 |
whether given before, at, or after the meeting and whether given | 1516 |
in writing, orally, or by attendance. Attendance by a member at a | 1517 |
meeting is a waiver of notice of that meeting, except when the | 1518 |
member objects at the beginning of the meeting to the transaction | 1519 |
of business because the meeting has not been lawfully called or | 1520 |
convened or objects before a vote on an item of business because | 1521 |
the item may not lawfully be considered at that meeting and does | 1522 |
not participate in the consideration of the item at that meeting. | 1523 |
Sec. 1770.35. (A) Special members' meetings may be called by | 1524 |
either of the following: | 1525 |
(1) A majority vote of a quorum of the board; | 1526 |
(2) A written petition submitted to the chair of the board by | 1527 |
at least twenty per cent of the patron members and, if authorized | 1528 |
by the bylaws, twenty per cent of the nonpatron members or members | 1529 |
representing twenty per cent of the membership interests | 1530 |
collectively. | 1531 |
(B) A cooperative shall give notice of a special members' | 1532 |
meeting in the same manner that notice of a regular members' | 1533 |
meeting is given under section 1770.34 of the Revised Code, and | 1534 |
notice of a special members' meeting may be waived in the same | 1535 |
manner that notice may be waived under that section. | 1536 |
Sec. 1770.36. After mailing regular or special members' | 1537 |
meeting notices or otherwise delivering the notices, a cooperative | 1538 |
shall create a record containing the date of mailing or delivery | 1539 |
of the notices and a statement that the regular or special | 1540 |
members' meeting notices were mailed or delivered as prescribed by | 1541 |
law. The certificate shall be made a part of the record of the | 1542 |
meeting. Failure of a member to receive a regular or special | 1543 |
members' meeting notice does not invalidate an action taken by the | 1544 |
members at a members' meeting. | 1545 |
Sec. 1770.37. A quorum at a members' meeting that is | 1546 |
necessary to transact business shall be ten per cent of the total | 1547 |
number of members for a cooperative with five hundred or fewer | 1548 |
members and fifty members for cooperatives with more than five | 1549 |
hundred members. Members may vote by mail or by an alternative | 1550 |
ballot. In determining if a quorum exists at a meeting, members | 1551 |
present in person or represented by mail vote or an alternative | 1552 |
ballot shall be counted. A quorum shall be verified by the chair | 1553 |
or the records officer of the cooperative and shall be reported in | 1554 |
the minutes of the meeting. An action by a cooperative is not | 1555 |
valid or legal in the absence of a quorum at the meeting at which | 1556 |
the action was taken. | 1557 |
Sec. 1730.38. To the extent authorized in the articles or | 1558 |
bylaws or a member control agreement, a regular or special | 1559 |
members' meeting may be held solely by a combination of means of | 1560 |
remote communication through which the members may participate in | 1561 |
the meeting if notice of the meeting is given to every owner of | 1562 |
membership interests entitled to vote as required by this chapter | 1563 |
for a meeting and if the membership interests held by the members | 1564 |
participating in the meeting would be sufficient to constitute a | 1565 |
quorum at a meeting. Participation by a member by means of remote | 1566 |
communication constitutes presence at the meeting in person or by | 1567 |
proxy if all the other requirements of this chapter for the | 1568 |
meeting are met. | 1569 |
Sec. 1770.39. (A) Except when this chapter, the articles or | 1570 |
bylaws, or a member control agreement requires otherwise, members | 1571 |
shall take action by the affirmative vote of a majority of the | 1572 |
voting power of the membership interests that are part of a quorum | 1573 |
and entitled to vote on that item of business. The articles or | 1574 |
bylaws adopted by the members may provide for a greater quorum or | 1575 |
voting requirement for members or a unit, class, or series of | 1576 |
members than is provided for by this chapter. An amendment to the | 1577 |
articles or bylaws that establishes, reduces, or eliminates a | 1578 |
greater quorum or voting requirement shall be adopted in | 1579 |
accordance with section 1770.06 or 1770.12 of the Revised Code, as | 1580 |
applicable. If the articles or bylaws or a member control | 1581 |
agreement requires such a larger proportion for a particular | 1582 |
action, the articles, bylaws, or member control agreement | 1583 |
controls. | 1584 |
(B) In a case where a unit, class, or series of membership | 1585 |
interests is entitled by this chapter, the articles or bylaws, a | 1586 |
member control agreement, or the terms of the membership interests | 1587 |
to vote as a unit, class, or series, the matter being voted on | 1588 |
also shall receive the affirmative vote of the owners of the same | 1589 |
proportion of the membership interests present of that unit, | 1590 |
class, or series, or of the total outstanding membership interests | 1591 |
of that unit, class, or series, as the proportion required under | 1592 |
division (A) of this section unless the articles or bylaws or the | 1593 |
member control agreement requires a larger proportion. Unless | 1594 |
otherwise stated in the articles or bylaws or a member control | 1595 |
agreement, in the case of voting as a unit, class, or series, the | 1596 |
minimum percentage of the total voting power of membership | 1597 |
interests of the unit, class, or series that shall be present is | 1598 |
equal to the minimum percentage of all membership interests | 1599 |
entitled to vote and required to be present under section 1770.37 | 1600 |
of the Revised Code. | 1601 |
Sec. 1770.40. (A) The bylaws of a cooperative shall require | 1602 |
patron members to vote collectively based on the vote of the | 1603 |
majority of patron members voting on an issue before the members | 1604 |
of the cooperative. In no case shall the bylaws of a cooperative | 1605 |
allow the collective vote of patron members to constitute less | 1606 |
than fifteen per cent of the total vote of members of the | 1607 |
cooperative even if the total patron membership constitutes less | 1608 |
than fifteen per cent of the total membership of the cooperative. | 1609 |
(B) A patron member of a cooperative is entitled to only one | 1610 |
vote on an issue to be voted on by members holding patron | 1611 |
membership interests, except that if authorized in the articles or | 1612 |
bylaws, a patron member may be entitled to additional votes in | 1613 |
accordance with section 1770.41 of the Revised Code. A nonpatron | 1614 |
member has voting rights in accordance with the nonpatron member's | 1615 |
membership interests as granted in the bylaws, subject to this | 1616 |
chapter. | 1617 |
(C) A cooperative may provide in the articles or bylaws that | 1618 |
units, classes, or series of members are entitled to be | 1619 |
represented at members' meetings by delegates chosen by the | 1620 |
members of the unit, class, or series. The delegates may vote on | 1621 |
matters at the members' meeting in the same manner as a member. | 1622 |
The delegates may only exercise the voting rights on the basis and | 1623 |
with the number of votes prescribed in the articles or bylaws. If | 1624 |
the approval of a certain portion of the members is required for | 1625 |
adoption of amendments, a dissolution, a merger, a consolidation, | 1626 |
or a sale of assets, the votes of delegates shall be counted as | 1627 |
votes by the members represented by the delegates. | 1628 |
Sec. 1770.41. (A) A cooperative may authorize in its articles | 1629 |
or bylaws patron members to have additional votes concerning any | 1630 |
of the following or a combination of them: | 1631 |
(1) A stipulated amount of business transacted between a | 1632 |
patron member and the cooperative; | 1633 |
(2) A stipulated number of patron members in the cooperative; | 1634 |
(3) A stipulated amount of equity allocated to or held by a | 1635 |
patron member cooperative in the cooperative's central | 1636 |
organization. | 1637 |
(B) A cooperative that is organized into units or districts | 1638 |
of patron members may authorize in its articles or bylaws the | 1639 |
delegates elected by its patron members to have an additional vote | 1640 |
for either of the following or a combination of them: | 1641 |
(1) A stipulated amount of business transacted between the | 1642 |
patron members in the units or districts and the cooperative; | 1643 |
(2) A stipulated amount of equity allocated to or held by the | 1644 |
patron members of the units or districts of the cooperative. | 1645 |
Sec. 1770.42. (A) A board may fix a date of not more than | 1646 |
sixty days prior to the date of a members' meeting as the date for | 1647 |
the determination of which owners of membership interests are | 1648 |
entitled to notice of and to vote at the meeting. The articles or | 1649 |
bylaws may establish a shorter period of time for making such a | 1650 |
determination. When a date is so fixed, only members on that date | 1651 |
are entitled to notice of and to vote at that meeting. | 1652 |
(B) The articles or bylaws may give or prescribe the manner | 1653 |
of giving a creditor, security holder, or other person a right to | 1654 |
vote on patron membership interests. | 1655 |
(C) Membership interests that are owned by two or more | 1656 |
members may be voted by any one of them unless the cooperative | 1657 |
receives written notice from any one of them denying the authority | 1658 |
of that person to vote those membership interests. | 1659 |
(D) Except as provided in this division, an owner of a | 1660 |
nonpatron membership interest or a patron membership interest with | 1661 |
more than one vote that is entitled to vote may vote any portion | 1662 |
of the membership interest in any way the member chooses. If a | 1663 |
member votes without designating the portion voted in a particular | 1664 |
way, the member is considered to have voted all of the membership | 1665 |
interest in that way. | 1666 |
Sec. 1770.43. (A) Membership interests of a cooperative | 1667 |
reflected in the records of the cooperative as being owned by | 1668 |
another domestic or foreign business entity may be voted by the | 1669 |
chair, the chief executive officer, or another legal | 1670 |
representative of that entity. | 1671 |
(B) Membership interests of a cooperative in the name of, or | 1672 |
under the control of, the cooperative or a subsidiary in a | 1673 |
fiduciary capacity are not entitled to be voted on any matter, | 1674 |
except to the extent that the settlor or beneficiary possesses and | 1675 |
exercises a right to vote or gives the cooperative or, with | 1676 |
respect to membership interests in the name of or under control of | 1677 |
a subsidiary, the subsidiary binding instructions on how to vote | 1678 |
the membership interests. | 1679 |
(C) Subject to section 1770.40 of the Revised Code, | 1680 |
membership interests under the control of a person in a capacity | 1681 |
as a personal representative, administrator, executor, guardian, | 1682 |
conservator, or similar capacity may be voted by the person, | 1683 |
either in person or by proxy, without reflecting in the records of | 1684 |
the cooperative those membership interests in the name of the | 1685 |
person. | 1686 |
(D) Membership interests reflected in the records in the name | 1687 |
of a trustee in bankruptcy or a receiver may be voted by the | 1688 |
trustee or receiver either in person or by proxy. Membership | 1689 |
interests under the control of a trustee in bankruptcy or a | 1690 |
receiver may be voted by the trustee or receiver without | 1691 |
reflecting in the records of the cooperative the name of the | 1692 |
trustee or receiver if authority to do so is contained in an | 1693 |
appropriate order of the court by which the trustee or receiver | 1694 |
was appointed. The right to vote of trustees in bankruptcy and | 1695 |
receivers is subject to section 1770.40 of the Revised Code. | 1696 |
(F) Membership interests reflected in the records of the | 1697 |
cooperative in the name of a business entity not described in | 1698 |
divisions (A) to (D) of this section may be voted either in person | 1699 |
or by proxy by the legal representative of that business entity. | 1700 |
(G) The grant of a security interest in a membership interest | 1701 |
does not entitle the holders of the security interest to vote. | 1702 |
Sec. 1770.44. (A) Patron members may be represented by the | 1703 |
proxy of other patron members. Nonpatron members may be | 1704 |
represented by proxy if authorized by the bylaws. | 1705 |
(B) A member may cast or authorize the casting of a vote by | 1706 |
proxy either by filing a written appointment of a proxy with the | 1707 |
board at or before the meeting at which the appointment is to be | 1708 |
effective or by telephonic transmission or authenticated | 1709 |
electronic communication as authorized by the bylaws. | 1710 |
(C) The appointment of a proxy is valid for eleven months | 1711 |
unless a longer period is expressly provided in the appointment. | 1712 |
No appointment is irrevocable unless the appointment is coupled | 1713 |
with an interest in a membership interest or the cooperative. | 1714 |
(D) An appointment may be terminated at will unless the | 1715 |
appointment is coupled with an interest in the cooperative or a | 1716 |
membership interest, in which case it shall not be terminated | 1717 |
except in accordance with the terms of an agreement, if any, | 1718 |
between the parties to the appointment. Termination may be made by | 1719 |
filing written notice of the termination of the appointment with | 1720 |
the board or by filing a new written appointment of a proxy with | 1721 |
the board in accordance with division (B) of this section. | 1722 |
Termination in either manner revokes all prior proxy appointments | 1723 |
and is effective when filed with the board. | 1724 |
(E) The death or incapacity of a person appointing a proxy | 1725 |
does not revoke the authority of the proxy unless written notice | 1726 |
of the death or incapacity is received by the board before the | 1727 |
proxy exercises the authority under that appointment. | 1728 |
(F) Unless the appointment specifically provides otherwise, | 1729 |
if two or more persons are appointed as proxies for a member, both | 1730 |
of the following apply: | 1731 |
(1) Any one of them may vote the membership interests on each | 1732 |
item of business in accordance with specific instructions | 1733 |
contained in the appointment. | 1734 |
(2) If no specific instructions are contained in the | 1735 |
appointment with respect to voting the membership interests on a | 1736 |
particular item of business, the membership interests shall be | 1737 |
voted as a majority of the proxies determines. If the proxies are | 1738 |
equally divided, the membership interests shall not be voted. | 1739 |
(G) Unless the appointment of a proxy contains a restriction, | 1740 |
limitation, or specific reservation of authority, the cooperative | 1741 |
may accept a vote or action taken by a person named in the | 1742 |
appointment. The vote of a proxy is final, binding, and not | 1743 |
subject to challenge, but the proxy is liable to the member for | 1744 |
damages resulting from a failure to exercise the proxy or from an | 1745 |
exercise of the proxy in violation of the authority granted in the | 1746 |
appointment. | 1747 |
(H) If a proxy is given authority by a member to vote on | 1748 |
fewer than all items of business considered at a members' meeting, | 1749 |
the member is considered to be present and entitled to vote by the | 1750 |
proxy only with respect to those items of business for which the | 1751 |
proxy has authority to vote. | 1752 |
Sec. 1770.45. A board may direct a cooperative that holds | 1753 |
ownership interests of another business entity to elect or appoint | 1754 |
a person to represent the cooperative at a meeting of the business | 1755 |
entity. The representative has authority to represent the | 1756 |
cooperative and may cast the cooperative's vote at the meeting. | 1757 |
Sec. 1770.46. (A) A member is entitled to inspect and copy, | 1758 |
at the member's expense, during regular business hours at a | 1759 |
reasonable location specified by the cooperative, any of the | 1760 |
records described in section 1770.13 of the Revised Code if the | 1761 |
member meets the requirements of division (B) of this section and | 1762 |
gives the cooperative written demand at least five business days | 1763 |
prior to the date on which the member wishes to inspect and copy | 1764 |
the records. However, no member shall have the right to inspect or | 1765 |
copy any records of the cooperative relating to the amount of | 1766 |
equity capital in the cooperative held by any person or any | 1767 |
accounts receivable or other amounts due the cooperative from any | 1768 |
person or any personnel records or employment records of any | 1769 |
employee. | 1770 |
(B) In order to be entitled to inspect and copy records, a | 1771 |
member shall meet the following requirements: | 1772 |
(1) The member shall have been a member for at least one year | 1773 |
immediately preceding the demand to inspect and copy or be a | 1774 |
member holding at least five per cent of all of the outstanding | 1775 |
equity interests in the cooperative as of the date on which the | 1776 |
demand is made. | 1777 |
(2) The demand is made in good faith and for a proper | 1778 |
cooperative business purpose. | 1779 |
(3) The member describes with reasonable particularity the | 1780 |
purpose of the demand to inspect and copy records and describes | 1781 |
the records that the member desires to inspect and copy. | 1782 |
(4) The records are directly connected with the described | 1783 |
purpose. | 1784 |
(C)(1) The right of inspection and copying granted by this | 1785 |
section shall not be abolished or limited by the articles or | 1786 |
bylaws or any actions of the board or the members. | 1787 |
(2) This section does not affect either of the following: | 1788 |
(a) The right of a member to inspect records to the same | 1789 |
extent as any other litigant if the member is in litigation with | 1790 |
the cooperative; | 1791 |
(b) The power of a court to compel the production of the | 1792 |
cooperative's records for examination. | 1793 |
(3) Notwithstanding any other provision of this section, if | 1794 |
the records to be inspected or copied are in active use or storage | 1795 |
and not available at the time otherwise provided for inspection or | 1796 |
copying, the cooperative shall notify the member and shall set a | 1797 |
date and hour within three business days of the date otherwise set | 1798 |
in this section for the inspection or copying. | 1799 |
(4) A member's agent or attorney has the same inspection and | 1800 |
copying rights as the member. | 1801 |
(D) If a cooperative refuses to allow a member, or the | 1802 |
member's agent or attorney, to inspect or copy any records in | 1803 |
accordance with this section, the court of common pleas of the | 1804 |
county where the cooperative's principal office is located or, if | 1805 |
it has no principal office in this state, the court of common | 1806 |
pleas of the county in which its registered office is located, on | 1807 |
application of the member, may order the inspection or copying of | 1808 |
the records demanded at the cooperative's expense. | 1809 |
If a court orders inspection or copying of the records | 1810 |
demanded, unless the cooperative proves that it refused inspection | 1811 |
or copying in good faith because it had a reasonable basis for | 1812 |
doubt about the right of the member or the member's agent or | 1813 |
attorney to inspect or copy the records demanded, the court may do | 1814 |
all of the following: | 1815 |
(1) Order the losing party to pay the prevailing party's | 1816 |
reasonable costs, including reasonable attorney fees; | 1817 |
(2) Order the losing party to pay the prevailing party for | 1818 |
any damages that the prevailing party incurred by reason of the | 1819 |
subject matter of the litigation; | 1820 |
(3) Order the cooperative to pay the member's inspection and | 1821 |
copying expenses; | 1822 |
(4) Grant either party any other remedy provided by law; | 1823 |
(5) Impose reasonable restrictions on the use or distribution | 1824 |
of the records by the demanding member. | 1825 |
Sec. 1770.50. (A) The authorized amount and divisions of | 1826 |
patron membership interests and, if authorized, nonpatron | 1827 |
membership interests may be increased, decreased, established, or | 1828 |
altered in accordance with the restrictions in this chapter by | 1829 |
amending the articles or bylaws at a regular members' meeting or | 1830 |
at a special members' meeting called for the purpose of the | 1831 |
amendment. | 1832 |
(B) Authorized membership interests may be issued on terms | 1833 |
and conditions prescribed in the articles or bylaws or, if | 1834 |
authorized in the articles or bylaws, as determined by the board. | 1835 |
The cooperative shall disclose to any person or entity acquiring | 1836 |
membership interests to be issued by the cooperative the | 1837 |
organization, capital structure, and known business prospects and | 1838 |
risks of the cooperative as well as the nature of the governance | 1839 |
and financial rights of the membership interest being acquired and | 1840 |
of other classes of membership and membership interests. The | 1841 |
cooperative shall notify all members of the membership interests | 1842 |
being issued by the cooperative. A membership interest may not be | 1843 |
issued until the subscription price of the membership interest has | 1844 |
been paid in money or property with the value of the property to | 1845 |
be contributed approved by the board. | 1846 |
(C) The patron membership interests collectively shall have | 1847 |
not less than sixty per cent of the cooperative's financial rights | 1848 |
to profit allocations and distributions. However, if authorized in | 1849 |
the original articles as filed, articles or bylaws adopted by an | 1850 |
affirmative vote of the patron members, or articles or bylaws as | 1851 |
amended by an affirmative vote of patron members, the | 1852 |
cooperative's financial rights to profit allocations and | 1853 |
distributions to patron members collectively may be not less than | 1854 |
fifteen per cent. | 1855 |
(D) After issuance by the cooperative, membership interests | 1856 |
in a cooperative may only be sold or transferred with the approval | 1857 |
of the board. The board may adopt resolutions prescribing | 1858 |
procedures to prospectively approve transfers. | 1859 |
(E) If authorized by the articles, the cooperative may | 1860 |
solicit and issue nonpatron membership interests on terms and | 1861 |
conditions determined by the board and disclosed in the articles | 1862 |
or bylaws or by separate disclosure to the members. A member | 1863 |
acquiring nonpatron membership interests shall sign a member | 1864 |
control agreement or agree to the conditions in the bylaws, either | 1865 |
of which shall describe the rights and obligations of the member | 1866 |
as it relates to the nonpatron membership interests, the financial | 1867 |
and governance rights, the transferability of the nonpatron | 1868 |
membership interests, the division and allocations of profits and | 1869 |
losses among the membership interests and membership classes, and | 1870 |
financial rights upon liquidation. If the articles or bylaws do | 1871 |
not otherwise provide for the allocation of the profits and losses | 1872 |
between patron membership interests and nonpatron membership | 1873 |
interests, the allocation of profits and losses among nonpatron | 1874 |
membership interests individually and patron membership interests | 1875 |
collectively shall be allocated on the basis of the value of | 1876 |
contributions to capital made according to the patron membership | 1877 |
interests collectively and the nonpatron membership interests | 1878 |
individually to the extent that the contributions have been | 1879 |
accepted by the cooperative. Distributions of cash or other assets | 1880 |
of the cooperative shall be allocated among the membership | 1881 |
interests as provided in the articles and bylaws, subject to this | 1882 |
chapter. If not otherwise provided in the articles or bylaws, | 1883 |
distributions shall be made on the basis of value of the capital | 1884 |
contributions of the patron membership interests collectively and | 1885 |
the nonpatron membership interests to the extent that the | 1886 |
contributions have been accepted by the cooperative. | 1887 |
(F) The articles or bylaws may provide that the cooperative | 1888 |
or the patron members, individually or collectively, have the | 1889 |
first privilege of purchasing the membership interests of any | 1890 |
class of membership interests offered for sale. A membership | 1891 |
interest acquired by the cooperative may be held in order to be | 1892 |
reissued or may be retired and canceled. | 1893 |
(G) Subject to the articles and bylaws, a member may dissent | 1894 |
from and obtain payment for the fair value of the member's | 1895 |
nonpatron membership interests in the cooperative if the articles | 1896 |
or bylaws are amended in a manner that materially and adversely | 1897 |
affects the rights and preferences of the nonpatron membership | 1898 |
interests of the dissenting member. The dissenting member shall | 1899 |
file a notice of intent to demand fair value of the membership | 1900 |
interest with the records officer of the cooperative within thirty | 1901 |
days after the amendment of the articles or bylaws and notice of | 1902 |
the amendment to members. If the dissenting member fails to do so | 1903 |
within the thirty-day period, or if the dissenting member voted in | 1904 |
favor of the amendment, the right of the dissenting member to | 1905 |
demand payment of fair value for the membership interest is | 1906 |
waived. After receipt of the dissenting member's notice, the | 1907 |
cooperative either shall rescind the amendment not later than | 1908 |
sixty days after receipt of the notice or remit payment for the | 1909 |
fair value of the membership interest to the dissenting member not | 1910 |
later than one hundred eighty days after receipt of the notice. | 1911 |
Upon receipt of payment for the fair value of the membership | 1912 |
interest, the member has no further member rights in the | 1913 |
cooperative. | 1914 |
Sec. 1770.51. (A) Except as provided in division (C) of this | 1915 |
section, a member's financial rights are transferable in whole or | 1916 |
in part. | 1917 |
(B) An assignment of a member's financial rights entitles the | 1918 |
assignee to receive, to the extent assigned, only the share of | 1919 |
profits and losses and the distributions to which the assignor | 1920 |
would otherwise be entitled. An assignment of a member's financial | 1921 |
rights does not dissolve the cooperative and does not entitle or | 1922 |
empower the assignee to become a member, to exercise any | 1923 |
governance rights, to receive any notices from the cooperative, or | 1924 |
to cause dissolution. The assignment shall not allow the assignee | 1925 |
to control the member's exercise of governance or voting rights. | 1926 |
(C) A restriction on the assignment of financial rights may | 1927 |
be imposed in the articles, in the bylaws, in a member control | 1928 |
agreement, by a resolution adopted by the members, by an agreement | 1929 |
among or other written action by the members, or by an agreement | 1930 |
among or other written action by the members and the cooperative. | 1931 |
A restriction is not binding with respect to financial rights | 1932 |
reflected in the records of the cooperative before the adoption of | 1933 |
the restriction unless the owners of those financial rights are | 1934 |
parties to the agreement or voted in favor of the restriction. | 1935 |
A written restriction on the assignment of financial rights | 1936 |
that is not manifestly unreasonable under the circumstances and is | 1937 |
noted conspicuously in the records of the cooperative may be | 1938 |
enforced against the owner of the restricted financial rights or a | 1939 |
successor or transferee of the owner, including a pledgee or a | 1940 |
legal representative. Unless noted conspicuously in the records of | 1941 |
the cooperative, a restriction, even though permitted by this | 1942 |
section, is ineffective against a person without knowledge of the | 1943 |
restriction. | 1944 |
With regard to restrictions on the assignment of financial | 1945 |
rights, a would-be assignee of financial rights is entitled to | 1946 |
rely on a statement of membership interest issued by the | 1947 |
cooperative under section 1770.52 of the Revised Code. A | 1948 |
restriction on the assignment of financial rights, which is | 1949 |
otherwise valid and in effect at the time of the issuance of a | 1950 |
statement of membership interest, but which is not reflected in | 1951 |
that statement, is ineffective against an assignee who takes an | 1952 |
assignment in reliance on the statement. Notwithstanding any | 1953 |
provision of law, articles, bylaws, member control agreement, | 1954 |
other agreement, resolution, or action to the contrary, a security | 1955 |
interest in a member's financial rights may be foreclosed and | 1956 |
otherwise enforced, and a secured party may assign a member's | 1957 |
financial rights in accordance with applicable law, without the | 1958 |
consent or approval of the member whose financial rights are | 1959 |
subject to the security interest. | 1960 |
Sec. 1770.52. (A) A membership interest is personal | 1961 |
property. A member has no interest in specific cooperative | 1962 |
property. All property of the cooperative is property of the | 1963 |
cooperative itself. | 1964 |
(B) At the request of a member, the cooperative shall state | 1965 |
in writing the particular membership interest owned by that member | 1966 |
as of the date on which the cooperative issues the statement. The | 1967 |
statement shall describe the member's rights to vote, if any, to | 1968 |
share in profits and losses, and to share in distributions, | 1969 |
restrictions on assignments of financial rights under section | 1970 |
1770.51 of the Revised Code, or voting rights under this chapter | 1971 |
then in effect as well as any assignment of the member's rights | 1972 |
then in effect other than a security interest. | 1973 |
(C) All the membership interests of a cooperative shall: | 1974 |
(1) Be of one class, without series, unless the articles or | 1975 |
bylaws establish or authorize the board to establish more than one | 1976 |
class or series within classes; | 1977 |
(2) Be ordinary patron membership interests or, if authorized | 1978 |
in the articles or bylaws, nonpatron membership interest subject | 1979 |
to this chapter entitled to vote as provided in this chapter and | 1980 |
have equal rights and preferences in all matters not otherwise | 1981 |
provided for by the board and to the extent that the articles or | 1982 |
bylaws have fixed the relative rights and preferences of different | 1983 |
classes and series; | 1984 |
(3) Share profits and losses and are entitled to | 1985 |
distributions as provided in this chapter. | 1986 |
(D) On application to a court of competent jurisdiction by a | 1987 |
judgment creditor of a member, the court may charge a member's or | 1988 |
an assignee's financial rights with payment of the unsatisfied | 1989 |
amount of the judgment with interest. To the extent so charged, | 1990 |
the judgment creditor has only the rights of an assignee of a | 1991 |
member's financial rights under section 1770.51 of the Revised | 1992 |
Code. This chapter does not deprive a member or assignee of | 1993 |
financial rights of the benefit of any exemption laws that are | 1994 |
applicable to the membership interest. This section is the sole | 1995 |
and exclusive remedy of a judgment creditor with respect to the | 1996 |
judgment debtor's membership interest. | 1997 |
(E) Subject to any restrictions in the articles or bylaws, | 1998 |
the power granted in this division may be exercised by a | 1999 |
resolution or resolutions establishing a class or series, setting | 2000 |
forth the designation of the class or series, and fixing the | 2001 |
relative rights and preferences of the class or series. Any of the | 2002 |
rights and preferences of a class or series established in the | 2003 |
articles or bylaws or by resolution of the board may do both of | 2004 |
the following: | 2005 |
(1) Be made dependent on facts ascertainable outside the | 2006 |
articles or bylaws or outside the resolution or resolutions | 2007 |
establishing the class or series if the manner in which the facts | 2008 |
operate on the rights and preferences of the class or series is | 2009 |
clearly and expressly set forth in the articles or bylaws or in | 2010 |
the resolution or resolutions establishing the class or series; | 2011 |
(2) Include by reference some or all of the terms of any | 2012 |
agreements, contracts, or other arrangements entered into by the | 2013 |
cooperative in connection with the establishment of the class or | 2014 |
series if the cooperative retains at its principal executive | 2015 |
office a copy of the agreements, contracts, or other arrangements. | 2016 |
A statement setting forth the name of the cooperative and the | 2017 |
text of the resolution and certifying the adoption of the | 2018 |
resolution and the date of adoption shall be given to the members | 2019 |
before the acceptance of any contributions for which the | 2020 |
resolution creates rights or preferences not set forth in the | 2021 |
articles or bylaws. When the members have received notice of the | 2022 |
creation of membership interests with rights or preferences not | 2023 |
set forth in the articles or bylaws before the acceptance of the | 2024 |
contributions with respect to the membership interests, the | 2025 |
statement may be filed any time within one year after the | 2026 |
acceptance of the contributions. The resolution is effective three | 2027 |
days after delivery of the notice to the members. | 2028 |
(F) Without limiting the authority granted in this section, a | 2029 |
cooperative may have membership interests of a class or series: | 2030 |
(1) Subject to the right of the cooperative to redeem any of | 2031 |
those membership interests at the price fixed for their redemption | 2032 |
by the articles or bylaws or by the board; | 2033 |
(2) Entitling the members to cumulative, partially | 2034 |
cumulative, or noncumulative distributions; | 2035 |
(3) Having preference over any class or series of membership | 2036 |
interests for the payment or distributions of any or all kinds; | 2037 |
(4) Convertible into membership interests of any other class | 2038 |
or any series of the same or another class; | 2039 |
(5) Having full, partial, or no voting rights. | 2040 |
(G)(1) If a member who is an individual dies or a court of | 2041 |
competent jurisdiction adjudges the member to be incompetent to | 2042 |
manage the member's person or property, or an order for relief | 2043 |
under the statutes governing bankruptcy is entered with respect to | 2044 |
the member, the member's executor, administrator, guardian, | 2045 |
conservator, trustee, or other legal representative may exercise | 2046 |
all of the member's rights for the purpose of settling the estate | 2047 |
or administering the member's property. If a member is a business | 2048 |
entity, trust, or other entity and is dissolved, terminated, or | 2049 |
placed by a court in receivership or bankruptcy, the powers of | 2050 |
that member may be exercised by its legal representative or | 2051 |
successor. | 2052 |
(2) If an event referred to in division (G)(1) of this | 2053 |
section causes the termination of a member's membership interest | 2054 |
and the termination does not result in dissolution, the terminated | 2055 |
member's interest, subject to the articles and bylaws, shall be | 2056 |
considered to be merely that of an assignee of the financial | 2057 |
rights owned before the termination of membership, and the rights | 2058 |
to be exercised by the legal representative of the terminated | 2059 |
member shall be limited accordingly. | 2060 |
(H) A subscriber for membership interests or a member of a | 2061 |
cooperative is under no obligation to the cooperative or its | 2062 |
creditors with respect to the membership interests subscribed for | 2063 |
or owned, except to pay to the cooperative the full consideration | 2064 |
for which the membership interests are issued or to be issued. | 2065 |
Sec. 1770.53. (A) The membership interests of a cooperative | 2066 |
shall be either certificated or uncertificated. A holder of | 2067 |
certificated membership interests is entitled to a certificate of | 2068 |
membership interests. Certificates shall be signed by a statutory | 2069 |
agent or officer authorized in the articles or bylaws to sign | 2070 |
share certificates or, in the absence of an authorization, by the | 2071 |
chair or records officer of the cooperative. | 2072 |
If a person signs or has a facsimile signature placed on a | 2073 |
certificate while the chair or an officer, transfer agent, or | 2074 |
records officer of a cooperative, the certificate may be issued by | 2075 |
the cooperative, even if the person has ceased to have that | 2076 |
capacity before the certificate is issued, with the same effect as | 2077 |
if the person had that capacity on the date of its issue. | 2078 |
(B) A certificate of membership interests of a cooperative | 2079 |
shall contain on its face all of the following: | 2080 |
(1) The name of the cooperative; | 2081 |
(2) A statement that the cooperative is organized under the | 2082 |
laws of this state and this chapter; | 2083 |
(3) The name of the person to whom the certificate is issued; | 2084 |
(4) The number and class of membership interests, and the | 2085 |
designation of the series, if any, that the certificate | 2086 |
represents; | 2087 |
(5) A statement that the membership interests in the | 2088 |
cooperative are subject to the articles and bylaws of the | 2089 |
cooperative; | 2090 |
(6) Any restrictions on transfer, including approval of the | 2091 |
board, if applicable, first rights of purchase by the cooperative, | 2092 |
and other restrictions on transfer, which may be stated by | 2093 |
reference to the back of the certificate or to another document. | 2094 |
(C) A certificate of membership interests issued by a | 2095 |
cooperative that is authorized to issue membership interests of | 2096 |
more than one class or series shall state on the face or back of | 2097 |
the certificate that the cooperative will furnish to any member | 2098 |
upon request and without charge a full statement of the | 2099 |
designations, preferences, limitations, and relative rights of the | 2100 |
membership interests of each class or series authorized to be | 2101 |
issued, so far as they have been determined, and the authority of | 2102 |
the board to determine the relative rights and preferences of | 2103 |
subsequent classes or series. | 2104 |
(D) A certificate that is signed as provided in division (A) | 2105 |
of this section is prima-facie evidence of the ownership of the | 2106 |
membership interests referred to in the certificate. | 2107 |
(E) Unless uncertificated membership interests are prohibited | 2108 |
by the articles or bylaws, a resolution approved by the | 2109 |
affirmative vote of a majority of the directors present may | 2110 |
provide that some or all of any or all classes and series of its | 2111 |
membership interests will be uncertificated membership interests. | 2112 |
The resolution does not apply to membership interests represented | 2113 |
by a certificate until the certificate is surrendered to the | 2114 |
cooperative. Within a reasonable time after the issuance or | 2115 |
transfer of uncertificated membership interests, the cooperative | 2116 |
shall send to the new member the information required by this | 2117 |
section to be stated on certificates. The information is not | 2118 |
required to be sent to the new holder by a publicly held | 2119 |
cooperative that has adopted a system of issuance, recordation, | 2120 |
and transfer of its membership interests by electronic or other | 2121 |
means not involving an issuance of certificates if the system | 2122 |
complies with section 17A of the "Securities Exchange Act of | 2123 |
1934," 48 Stat. 881, 15 U.S.C. 78a. Except as otherwise expressly | 2124 |
provided in the Revised Code, the rights and obligations of the | 2125 |
holders of certificated and uncertificated membership interests of | 2126 |
the same class and series are identical. | 2127 |
Sec. 1770.54. A new certificate of membership interests may | 2128 |
be issued in place of one that is alleged to have been lost, | 2129 |
stolen, or destroyed. The issuance of a new certificate under this | 2130 |
section does not constitute an overissue of the membership | 2131 |
interests that it represents. | 2132 |
Sec. 1770.55. (A) A restriction on the transfer or | 2133 |
registration of transfer of membership interests of a cooperative | 2134 |
may be imposed in the articles, in the bylaws, by a resolution | 2135 |
adopted by the members, or by an agreement among or other written | 2136 |
action by a number of members or holders of other membership | 2137 |
interests or among them and the cooperative. A restriction is not | 2138 |
binding with respect to membership interests issued prior to the | 2139 |
adoption of the restriction unless the holders of those membership | 2140 |
interests are parties to the agreement or voted in favor of the | 2141 |
restriction. | 2142 |
(B) A written restriction on the transfer or registration of | 2143 |
transfer of membership interests of a cooperative that is not | 2144 |
manifestly unreasonable under the circumstances may be enforced | 2145 |
against the holder of the restricted membership interests or a | 2146 |
successor or transferee of the holder, including a pledgee or a | 2147 |
legal representative, if the restriction is either noted | 2148 |
conspicuously on the face or back of the certificate, established | 2149 |
in this chapter or the articles or bylaws, or included in | 2150 |
information sent to the holders of uncertificated membership | 2151 |
interests. A restriction that is not so noted, established, or | 2152 |
included, even though permitted by this section, is ineffective | 2153 |
against a person without knowledge of the restriction. A | 2154 |
restriction under this section is determined to be noted | 2155 |
conspicuously on a certificate and is effective if the existence | 2156 |
of the restriction is stated on the certificate and reference is | 2157 |
made to a separate document creating or describing the | 2158 |
restriction. | 2159 |
Sec. 1770.56. (A) A written agreement among persons who are | 2160 |
then members, including a sole member, or who have signed | 2161 |
subscription or contribution agreements, relating to the control | 2162 |
of any phase of the business and affairs of the cooperative, its | 2163 |
liquidation, dissolution, and termination, or the relations among | 2164 |
members or persons who have signed subscription or contribution | 2165 |
agreements is valid as provided in division (B) of this section. | 2166 |
Whenever this chapter provides that a particular result may or | 2167 |
shall be obtained through a provision in the articles or bylaws, | 2168 |
the same result may be accomplished through a member control | 2169 |
agreement valid under this section or through a procedure | 2170 |
established by a member control agreement valid under this | 2171 |
section. | 2172 |
(B) Other than patron member voting control under section | 2173 |
1770.40 of the Revised Code and patron member allocation and | 2174 |
distribution under sections 1770.64 and 1770.65 of the Revised | 2175 |
Code, a written agreement among persons described in division (A) | 2176 |
of this section that relates to the control of or the liquidation, | 2177 |
dissolution, and termination of the cooperative; the relations | 2178 |
among members or other persons; or any phase of the business and | 2179 |
affairs of the cooperative, including, without limitation, the | 2180 |
management of its business, the declaration and payment of | 2181 |
distributions, the sharing of profits and losses, the election of | 2182 |
directors, the employment of members by the cooperative, or the | 2183 |
arbitration of disputes, is valid if the agreement is signed by | 2184 |
all persons who are then members of the cooperative, whether or | 2185 |
not the members all have voting power, and all those who have | 2186 |
signed contribution agreements regardless of whether those | 2187 |
signatories will, when members, have voting power. | 2188 |
(C) This section does not apply to, limit, or restrict | 2189 |
agreements otherwise valid, nor is the procedure established in | 2190 |
this section the exclusive method of agreement among members or | 2191 |
between the members and the cooperative with respect to any of the | 2192 |
matters described in this section. | 2193 |
Sec. 1770.60. (A) Subject to any restrictions in this | 2194 |
chapter regarding patron and nonpatron membership interests or in | 2195 |
the articles or bylaws, and only when authorized by the board, a | 2196 |
cooperative may accept contributions, which may be patron or | 2197 |
nonpatron membership contributions as determined by the board | 2198 |
under divisions (B) and (C) of this section, make contribution | 2199 |
agreements under section 1770.62 of the Revised Code, and make | 2200 |
contribution allowance agreements under section 1770.63 of the | 2201 |
Revised Code. | 2202 |
(B) A person may make a contribution to a cooperative by | 2203 |
paying money or transferring the ownership of an interest in | 2204 |
property to the cooperative or performing services to or for the | 2205 |
benefit of the cooperative or through a written obligation signed | 2206 |
by the person to pay money or transfer ownership of an interest in | 2207 |
property to the cooperative or to perform services to or for the | 2208 |
benefit of the cooperative. | 2209 |
(C) No purported contribution is to be treated as or | 2210 |
considered to be a contribution unless both of the following | 2211 |
apply: | 2212 |
(1) The board accepts the contribution on behalf of the | 2213 |
cooperative and in that acceptance describes the contribution, | 2214 |
including terms of future performance, if any, and states the | 2215 |
value being accorded to the contribution. | 2216 |
(2) The fact of contribution and the contribution's accorded | 2217 |
value are both reflected in the records of the cooperative. | 2218 |
(D) The determinations of the board as to the amount or fair | 2219 |
value or the fairness to the cooperative of the contribution | 2220 |
accepted or to be accepted by the cooperative or the terms of | 2221 |
payment or performance, including under a contribution agreement | 2222 |
under section 1770.62 of the Revised Code and a contribution | 2223 |
allowance agreement under section 1770.63 of the Revised Code, are | 2224 |
presumed to be proper if they are made in good faith and on the | 2225 |
basis of accounting methods, or a fair valuation or other method, | 2226 |
reasonable in the circumstances. Directors who are present and | 2227 |
entitled to vote and who, intentionally or without reasonable | 2228 |
investigation, fail to vote against approving a consideration that | 2229 |
is unfair to the cooperative, or overvalue property or services | 2230 |
received or to be received by the cooperative as a contribution, | 2231 |
are jointly and severally liable to the cooperative for the | 2232 |
benefit of the then members who did not consent to and are damaged | 2233 |
by the action to the extent of the damages to those members. A | 2234 |
director against whom a claim is asserted under this division, | 2235 |
except in a case of knowing participation in a deliberate fraud, | 2236 |
is entitled to contribution on an equitable basis from other | 2237 |
directors who are liable under this division. | 2238 |
Sec. 1770.61. (A) As used in this section, "old | 2239 |
contribution" means a contribution that is reflected in the | 2240 |
records of a cooperative before the time at which the cooperative | 2241 |
accepts a new contribution. | 2242 |
(B) When a cooperative accepts a new contribution, the board | 2243 |
shall restate, as required by this section, the value of all old | 2244 |
contributions. | 2245 |
(C) A cooperative shall restate the value of old | 2246 |
contributions that pertain to the same series or class to which a | 2247 |
new contribution pertains in accordance with this division unless | 2248 |
otherwise provided in the articles or bylaws. To restate the | 2249 |
value, a cooperative shall do all of the following: | 2250 |
(1) State the value that the cooperative has accorded to the | 2251 |
new contribution under division (C) of section 1770.60 of the | 2252 |
Revised Code; | 2253 |
(2) Determine what percentage the value stated under division | 2254 |
(C)(1) of this section will constitute, after the restatement, of | 2255 |
the total value of all contributions that pertain to the | 2256 |
particular series or class to which the new contribution pertains; | 2257 |
(3) Divide the value stated under division (C)(1) of this | 2258 |
section by the percentage determined under division (C)(2) of this | 2259 |
section, yielding the total value, after the restatement, of all | 2260 |
contributions pertaining to the particular series or class; | 2261 |
(4) Subtract the value stated under (C)(1) of this section | 2262 |
from the value determined under division (C)(3) of this section, | 2263 |
yielding the total value, after the restatement, of all the old | 2264 |
contributions pertaining to the particular series or class; | 2265 |
(5) Subtract the value, as reflected in the records of the | 2266 |
cooperative before the restatement, of the old contributions from | 2267 |
the value determined under division (C)(4) of this section, | 2268 |
yielding the value to be allocated among and added to the old | 2269 |
contributions pertaining to the particular series or class; | 2270 |
(6) Allocate the value determined under division (C)(5) of | 2271 |
this section proportionally among the old contributions pertaining | 2272 |
to the particular series or class, add the allocated values to | 2273 |
those old contributions, and change the records of the cooperative | 2274 |
accordingly. | 2275 |
The values determined under division (C)(5) of this section | 2276 |
and allocated and added under division (C)(6) of this section may | 2277 |
be positive, negative, or zero. | 2278 |
(D) A cooperative shall restate the value of old | 2279 |
contributions that do not pertain to the same series or class to | 2280 |
which a new contribution pertains in accordance with this division | 2281 |
unless otherwise provided in the articles or bylaws. To restate | 2282 |
the value, a cooperative shall do both of the following: | 2283 |
(1) Determine the percentage by which the restatement under | 2284 |
division (C) of this section has changed the total contribution | 2285 |
value reflected in the records of the cooperative for the series | 2286 |
or class to which the new contribution pertains; | 2287 |
(2) For each old contribution that does not pertain to the | 2288 |
same series or class to which the new contribution pertains, | 2289 |
change the value reflected in the records of the cooperative by | 2290 |
the percentage determined under division (D)(1) of this section. | 2291 |
The percentage determined under division (D)(1) of this section | 2292 |
may be positive, negative, or zero. | 2293 |
(E) If a cooperative accepts more than one new contribution | 2294 |
pertaining to the same series or class at the same time, the | 2295 |
cooperative may consider all the new contributions to be a single | 2296 |
contribution for the purpose of the restatement required by this | 2297 |
section. | 2298 |
Sec. 1770.62. (A) A contribution agreement, whether made | 2299 |
before or after the formation of the cooperative, is not | 2300 |
enforceable against the would-be contributor unless it is in | 2301 |
writing and signed by the would-be contributor. | 2302 |
(B) Unless otherwise provided in the contribution agreement, | 2303 |
or unless all of the would-be contributors and, if in existence, | 2304 |
the cooperative consent to a shorter or longer period, a | 2305 |
contribution agreement is irrevocable for a period of six months. | 2306 |
(C) A contribution agreement, whether made before or after | 2307 |
the formation of a cooperative, shall be paid or performed in full | 2308 |
at the time or times or in the installments, if any, specified in | 2309 |
the contribution agreement. In the absence of a provision in the | 2310 |
contribution agreement specifying the time at which the | 2311 |
contribution is to be paid or performed, the contribution shall be | 2312 |
paid or performed at the time or times determined by the board, | 2313 |
but a call made by the board for payment or performance on | 2314 |
contributions shall be uniform for all membership interests of the | 2315 |
same class or for all membership interests of the same series. | 2316 |
(D)(1) Unless otherwise provided in the contribution | 2317 |
agreement, in the event of default in the payment or performance | 2318 |
of an installment or call when due, the cooperative may proceed to | 2319 |
collect the amount due in the same manner as a debt due the | 2320 |
cooperative. If a would-be contributor does not make a required | 2321 |
contribution of property or services, the cooperative shall | 2322 |
require the would-be contributor to contribute cash equal to that | 2323 |
portion of the value, as stated in the records of the cooperative, | 2324 |
of the contribution that has not been made. | 2325 |
(2) If the amount due under a contribution agreement remains | 2326 |
unpaid for a period of twenty days after written notice of demand | 2327 |
for payment has been given to the delinquent would-be contributor, | 2328 |
the membership interests that were subject to the contribution | 2329 |
agreement may be offered for sale by the cooperative for a price | 2330 |
in money equaling or exceeding the sum of the full balance owed by | 2331 |
the delinquent would-be contributor plus the expenses incidental | 2332 |
to the sale. If the membership interests that were subject to the | 2333 |
contribution agreement are sold according to division (D)(2) of | 2334 |
this section, the cooperative shall pay to the delinquent would-be | 2335 |
contributor or to the delinquent would-be contributor's legal | 2336 |
representative the lesser of the following: | 2337 |
(a) The excess of net proceeds realized by the cooperative | 2338 |
over the sum of the amount owed by the delinquent would-be | 2339 |
contributor plus the expenses incidental to the sale less any | 2340 |
penalty stated in the contribution agreement, which may include | 2341 |
forfeiture of the partial contribution; | 2342 |
(b) The amount actually paid by the delinquent would-be | 2343 |
contributor. | 2344 |
(3) If the membership interests that were subject to the | 2345 |
contribution agreement are not sold according to division (D)(2) | 2346 |
of this section, the cooperative may collect the amount due in the | 2347 |
same manner as a debt due the cooperative or cancel the | 2348 |
contribution agreement according to division (D)(3) of this | 2349 |
section. | 2350 |
If the amount due under a contribution agreement remains | 2351 |
unpaid for a period of twenty days after written notice of demand | 2352 |
for payment has been given to the delinquent would-be contributor | 2353 |
and the membership interests that were subject to the contribution | 2354 |
agreement have not been sold according to division (D)(2) of this | 2355 |
section, the cooperative may cancel the contribution agreement, | 2356 |
the cooperative may retain any portion of the contribution | 2357 |
agreement price actually paid as provided in the contribution | 2358 |
agreement, and the cooperative shall refund to the delinquent | 2359 |
would-be contributor or the delinquent would-be contributor's | 2360 |
legal representatives any portion of the contribution agreement | 2361 |
price as provided in the contribution agreement. | 2362 |
(E) Unless otherwise provided in the articles or bylaws, a | 2363 |
would-be contributor's rights under a contribution agreement may | 2364 |
not be assigned, in whole or in part, to a person who was not a | 2365 |
member at the time of the assignment unless all the members | 2366 |
approve the assignment by unanimous written consent. | 2367 |
Sec. 1770.63. Subject to any restrictions in the articles or | 2368 |
bylaws, a cooperative may enter into contribution rights | 2369 |
agreements under the terms, provisions, and conditions fixed by | 2370 |
the board. Any contribution rights agreement shall be in writing | 2371 |
and shall state in full, summarize, or include by reference all | 2372 |
the agreement's terms, provisions, and conditions of the rights to | 2373 |
make contributions. Unless otherwise provided in the articles or | 2374 |
bylaws, a would-be contributor's rights under a contribution | 2375 |
rights agreement may not be assigned, in whole or in part, to a | 2376 |
person who was not a member at the time of the assignment unless | 2377 |
all the members approve the assignment by unanimous written | 2378 |
consent. | 2379 |
Sec. 1770.64. (A) The bylaws shall prescribe the allocation | 2380 |
of profits and losses between patron membership interests | 2381 |
collectively and any other membership interests. If the bylaws do | 2382 |
not provide otherwise, the profits and losses between patron | 2383 |
membership interests collectively and other membership interests | 2384 |
shall be allocated on the basis of the value of contributions to | 2385 |
capital made by the patron membership interests collectively and | 2386 |
other membership interests and accepted by the cooperative. The | 2387 |
allocation of profits to the patron membership interests | 2388 |
collectively shall not be less than fifty per cent of the total | 2389 |
profits in any fiscal year, except that if authorized in the | 2390 |
original articles as filed, in the articles or bylaws that are | 2391 |
adopted by the affirmative vote of the patron members, or in the | 2392 |
articles or bylaws that are amended by the affirmative vote of the | 2393 |
patron members, the allocation of profits to the patron membership | 2394 |
interests collectively shall not be less than fifteen per cent of | 2395 |
the total profits in any fiscal year. | 2396 |
(B) The bylaws shall prescribe the distribution of cash or | 2397 |
other assets of the cooperative among the membership interests of | 2398 |
the cooperative. If the bylaws do not provide otherwise, | 2399 |
distribution shall be made to the patron membership interests | 2400 |
collectively and other members on the basis of the value of | 2401 |
contributions to capital made and accepted by the cooperative, by | 2402 |
the patron membership interests collectively, and by other | 2403 |
membership interests. The distributions to patron membership | 2404 |
interests collectively shall not be less than fifty per cent of | 2405 |
the total distributions in any fiscal year, except that if | 2406 |
authorized in the articles or bylaws that are adopted by the | 2407 |
affirmative vote of the patron members or in the articles or | 2408 |
bylaws that are amended by the affirmative vote of the patron | 2409 |
members, the distributions to patron membership interests | 2410 |
collectively shall not be less than fifteen per cent of the total | 2411 |
distributions in any fiscal year. | 2412 |
Sec. 1770.65. (A) A cooperative may set aside a portion of | 2413 |
net income allocated to the patron membership interests as the | 2414 |
board determines advisable to create or maintain a capital | 2415 |
reserve. In addition to a capital reserve, the board, for patron | 2416 |
membership interests, may do either of the following: | 2417 |
(1) Set aside an amount not to exceed five per cent of the | 2418 |
annual net income of the cooperative for promoting and encouraging | 2419 |
cooperative organization; | 2420 |
(2) Establish and accumulate reserves for new buildings, | 2421 |
machinery and equipment, depreciation, losses, and other proper | 2422 |
purposes. | 2423 |
(B) Net income allocated to patron members in excess of | 2424 |
dividends on equity and additions to reserves shall be distributed | 2425 |
to patron members on the basis of patronage. A cooperative may | 2426 |
establish allocation units that are functional, divisional, | 2427 |
departmental, geographic, or otherwise and pooling arrangements | 2428 |
and may account for and distribute net income to patrons on the | 2429 |
basis of allocation units and pooling arrangements. A cooperative | 2430 |
may offset the net loss of an allocation unit or pooling | 2431 |
arrangement against the net income of other allocation units or | 2432 |
pooling arrangements. | 2433 |
(C) Distribution of net income shall be made at least | 2434 |
annually. The board shall present to the members at their annual | 2435 |
meeting a report covering the operations of the cooperative during | 2436 |
the preceding fiscal year. A cooperative may distribute net income | 2437 |
to patron members in cash, capital credits, allocated patronage | 2438 |
equities, revolving fund certificates, or its own or other | 2439 |
securities. The cooperative may provide in the bylaws that | 2440 |
nonmember patrons are allowed to participate in the distribution | 2441 |
of net income payable to patron members on equal terms with patron | 2442 |
members. | 2443 |
(D) If a nonmember patron with patronage credits is not | 2444 |
qualified or eligible for membership, a refund due may be credited | 2445 |
to the patron's individual account. The board may issue a | 2446 |
certificate of interest to reflect the credited amount. After the | 2447 |
patron is issued a certificate of interest, the patron may | 2448 |
participate in the distribution of income on the same basis as a | 2449 |
patron member. | 2450 |
Sec. 1770.70. (A) Unless otherwise prohibited, a cooperative | 2451 |
may merge or consolidate with one or more business entities if the | 2452 |
merger or consolidation is permitted by the laws under which each | 2453 |
constituent entity exists and the cooperative complies with this | 2454 |
section. | 2455 |
(B) To initiate a merger or consolidation of a cooperative, a | 2456 |
written plan of merger or consolidation shall be prepared by the | 2457 |
board or by a committee selected by the board to prepare a plan. | 2458 |
The plan shall state all of the following: | 2459 |
(1) The names of the cooperative or cooperatives and other | 2460 |
business entities that are parties to the merger; | 2461 |
(2) The name of the surviving or new cooperative or other | 2462 |
business entity; | 2463 |
(3) The manner and basis of converting membership or | 2464 |
ownership interests in the cooperative and other business entities | 2465 |
into membership or ownership interests in the surviving or new | 2466 |
cooperative or other business entity; | 2467 |
(4) The terms of the merger or consolidation; | 2468 |
(5) The proposed effect of the consolidation or merger on the | 2469 |
members and patron members of each constituent cooperative and | 2470 |
business entity. | 2471 |
With respect to a consolidation, the plan also shall contain | 2472 |
the articles of the entity or organizational documents to be filed | 2473 |
with the state in which the entity is organized. | 2474 |
(C) The board shall mail or otherwise transmit or deliver | 2475 |
notice of the merger or consolidation to each member. The notice | 2476 |
shall contain the full text of the plan and the time and place of | 2477 |
the meeting at which the plan will be considered. A cooperative | 2478 |
with more than two hundred members may provide the notice in the | 2479 |
same manner as a regular members' meeting notice. | 2480 |
(D) A plan of merger or consolidation shall be adopted by a | 2481 |
cooperative if both of the following apply: | 2482 |
(1) A quorum of the members exists as determined in | 2483 |
accordance with section 1770.37 of the Revised Code. | 2484 |
(2) The plan is approved by the patron members or, if | 2485 |
otherwise provided in the articles or bylaws, by a majority of the | 2486 |
votes cast in each class of votes cast, or, for a cooperative with | 2487 |
articles or bylaws requiring more than a majority of the votes | 2488 |
cast or other conditions for approval, the plan is approved by a | 2489 |
proportion of the votes cast or the number of members required by | 2490 |
the articles or bylaws and the conditions for approval in the | 2491 |
articles or bylaws have been satisfied. | 2492 |
After the plan has been adopted, articles of merger or | 2493 |
consolidation stating the plan and that the plan was adopted | 2494 |
according to this division shall be signed by the chair, | 2495 |
vice-chair, records officer, or documents officer of each | 2496 |
constituent cooperative or business entity. | 2497 |
For a merger, the articles of the surviving cooperative are | 2498 |
deemed amended to the extent provided in the articles of merger. | 2499 |
Unless a later date is provided in the plan, the merger or | 2500 |
consolidation is effective when the articles of merger or | 2501 |
consolidation are filed in accordance with section 1770.72 of the | 2502 |
Revised Code. | 2503 |
Sec. 1770.71. (A) After a plan of merger or consolidation has | 2504 |
been approved under section 1770.70 of the Revised Code, but | 2505 |
before the effective date of the merger or consolidation as | 2506 |
provided in that section, the plan may be amended or abandoned by | 2507 |
the same vote that approved the plan. | 2508 |
(B) If the merger or consolidation is amended or abandoned as | 2509 |
provided in division (A) of this section, an authorized officer of | 2510 |
each constituent cooperative and business entity shall sign a | 2511 |
certificate of amendment or abandonment stating that the plan of | 2512 |
merger or consolidation has been amended or abandoned and the date | 2513 |
of that action and shall file the certificate in the same manner | 2514 |
as the articles of merger or consolidation in accordance with | 2515 |
section 1770.72 of the Revised Code. A certificate of amendment or | 2516 |
abandonment shall be filed prior to the date on which the merger | 2517 |
or consolidation would otherwise be effective. | 2518 |
Sec. 1770.72. (A) Upon adoption of a plan of merger or | 2519 |
consolidation under section 1770.70 of the Revised Code, the | 2520 |
articles of merger or consolidation that were signed as required | 2521 |
by that section shall be filed with the secretary of state on a | 2522 |
form prescribed by the secretary of state that sets forth the | 2523 |
following: | 2524 |
(1) The name and form of each constituent cooperative or | 2525 |
business entity and the state law under which each constituent | 2526 |
cooperative or business entity exists; | 2527 |
(2) A statement that each constituent cooperative or business | 2528 |
entity has adopted the plan of merger or consolidation, including | 2529 |
the manner of adoption, and that the plan was adopted in | 2530 |
compliance with the laws applicable to each constituent | 2531 |
cooperative or business entity; | 2532 |
(3) The effective date of the merger or consolidation, which | 2533 |
date may be on or after the date of filing of the articles; | 2534 |
(4) In the case of a merger, a statement that one or more | 2535 |
specified constituent cooperatives or business entities will be | 2536 |
merged into a specified surviving cooperative or business entity, | 2537 |
or, in the case of a consolidation, a statement that the | 2538 |
constituent cooperatives or business entities will be consolidated | 2539 |
into a new cooperative or business entity; | 2540 |
(5) The name and address of the statutory agent on whom any | 2541 |
process, notice, or demand against any constituent cooperative or | 2542 |
business entity, or the surviving or new cooperative or business | 2543 |
entity, may be served. | 2544 |
(B)(1) In the case of a merger into a cooperative or business | 2545 |
entity, any amendments to the articles of incorporation or the | 2546 |
articles of organization of the surviving cooperative or business | 2547 |
entity shall be filed with the articles of merger or | 2548 |
consolidation. | 2549 |
(2) In the case of a consolidation to form a new cooperative | 2550 |
or business entity, the articles of incorporation or the articles | 2551 |
of organization of the new cooperative or business entity shall be | 2552 |
filed with the articles of merger or consolidation. | 2553 |
(C) If the surviving or new entity is a foreign entity that | 2554 |
desires to transact business in this state as a foreign entity, | 2555 |
the articles of merger or consolidation shall be accompanied by | 2556 |
the information required for qualification of a foreign entity in | 2557 |
this state by Chapter 1703. of the Revised Code, in the case of a | 2558 |
foreign corporation or foreign cooperative, or by sections 1705.53 | 2559 |
and 1705.54 of the Revised Code, in the case of a foreign limited | 2560 |
liability company. | 2561 |
(D) A copy of the articles of merger or consolidation, | 2562 |
certified by the secretary of state, may be filed for record in | 2563 |
the office of the county recorder of any county in this state. For | 2564 |
the recording the county recorder shall charge and collect the | 2565 |
same fee as in the case of deeds. The certified copy of the | 2566 |
articles of merger or consolidation shall be recorded in the | 2567 |
records of deeds. | 2568 |
Sec. 1770.80. (A) A cooperative, by affirmative vote of a | 2569 |
majority of the board present, on terms and conditions and for | 2570 |
considerations, which may be money, securities, or other | 2571 |
instruments for the payment of money or other property, that the | 2572 |
board considers expedient and without member approval, may do any | 2573 |
of the following: | 2574 |
(1) Sell, lease, transfer, or otherwise dispose of all or | 2575 |
substantially all of its property and assets in the usual and | 2576 |
regular course of its business; | 2577 |
(2) Sell, lease, transfer, or otherwise dispose of all or | 2578 |
substantially all of its property and assets not in the usual and | 2579 |
regular course of its business if all of the following apply: | 2580 |
(a) The cooperative's accountant has given an opinion that | 2581 |
the cooperative cannot continue as an ongoing business and the | 2582 |
cooperative is under financial duress. | 2583 |
(b) The cooperative has given notice to the members of the | 2584 |
impending or potential disposition prior to the disposition. | 2585 |
(c) The board has determined that failure to proceed with the | 2586 |
disposition would be adverse to the interests of the members and | 2587 |
the cooperative. | 2588 |
(3) Grant a security interest in all or substantially all of | 2589 |
its property and assets whether or not in the usual and regular | 2590 |
course of its business; | 2591 |
(4) Transfer any or all of its property to a business entity | 2592 |
all the ownership interests of which are owned by the cooperative; | 2593 |
(5) For purposes of debt financing, transfer any or all of | 2594 |
its property to a special purpose entity owned or controlled by | 2595 |
the cooperative for an asset securitization. | 2596 |
(B) Except as provided in division (A) of this section, a | 2597 |
cooperative, by affirmative vote of a majority of the board | 2598 |
present, may sell, lease, transfer, or otherwise dispose of all or | 2599 |
substantially all of its property and assets, including its good | 2600 |
will, not in the usual and regular course of its business, on | 2601 |
terms and conditions and for considerations, which may be money, | 2602 |
securities, or other instruments for the payment of money or other | 2603 |
property, that the board considers expedient when approved at a | 2604 |
members' meeting by the affirmative vote of the owners of a | 2605 |
majority of the voting power of the interests entitled to vote. | 2606 |
Written notice of the meeting shall be given to all members | 2607 |
whether or not they are entitled to vote at the meeting. The | 2608 |
written notice shall state that a purpose of the meeting is to | 2609 |
consider the sale, lease, transfer, or other disposition of all or | 2610 |
substantially all of the property and assets of the cooperative. | 2611 |
(C) Confirmatory deeds, assignments, or similar instruments | 2612 |
to evidence a sale, lease, transfer, or other disposition may be | 2613 |
signed and delivered at any time in the name of the transferor by | 2614 |
its current chair of the board or authorized agents. | 2615 |
(D) The transferee is liable for the debts, obligations, and | 2616 |
liabilities of the transferor only to the extent provided in the | 2617 |
contract or agreement between the transferee and the transferor or | 2618 |
to the extent provided by law. | 2619 |
Sec. 1770.81. (A) A cooperative may be dissolved voluntarily | 2620 |
in the manner provided in this section. | 2621 |
(B) A resolution of dissolution of a cooperative shall state | 2622 |
both of the following: | 2623 |
(1) That the cooperative elects to be dissolved; | 2624 |
(2) Any additional provision considered necessary with | 2625 |
respect to the proposed dissolution and winding up. | 2626 |
(C) The directors may adopt a resolution of dissolution in | 2627 |
the following cases: | 2628 |
(1) When the cooperative has been adjudged bankrupt or has | 2629 |
made a general assignment for the benefit of creditors; | 2630 |
(2) By leave of the court, when a receiver has been appointed | 2631 |
in a general creditors' suit or in any suit in which the affairs | 2632 |
of the cooperative are to be wound up; | 2633 |
(3) When substantially all of the assets have been sold at | 2634 |
judicial sale or otherwise; | 2635 |
(4) When the period of existence of the cooperative specified | 2636 |
in its articles has expired. | 2637 |
(D) At a meeting held for that purpose, the members may adopt | 2638 |
a resolution of dissolution by the affirmative vote of sixty per | 2639 |
cent of the member votes cast on the proposal or, if the articles | 2640 |
or bylaws provide or permit, by the affirmative vote of a greater | 2641 |
or lesser portion though not less than a majority, of the voting | 2642 |
power, of any particular class as required by the articles or | 2643 |
bylaws. Notice of the meeting shall be provided to the members as | 2644 |
required by this chapter. | 2645 |
(E) Upon the adoption of a resolution of dissolution, a | 2646 |
certificate shall be filed with the secretary of state, on a form | 2647 |
prescribed by the secretary of state, stating all of the | 2648 |
following: | 2649 |
(1) The name of the cooperative; | 2650 |
(2) A statement that a resolution of dissolution has been | 2651 |
adopted, including the manner of adoption, and, in the case of its | 2652 |
adoption by directors, a statement of the basis for the adoption; | 2653 |
(3) The place where the cooperative's principal executive | 2654 |
office is located; | 2655 |
(4) The names and addresses of the cooperative's directors | 2656 |
and officers; | 2657 |
(5) The name and address of the cooperative's statutory | 2658 |
agent. | 2659 |
(F) When a resolution of dissolution is adopted by the | 2660 |
directors or by the members, the certificate that is required by | 2661 |
division (E) of this section shall be signed by an authorized | 2662 |
officer. However, if no authorized officer executes and files the | 2663 |
certificate within thirty days after the adoption of the | 2664 |
resolution or on any date specified in the resolution as the date | 2665 |
on which the certificate is to be filed or upon the expiration of | 2666 |
any period specified in the resolution as the period within which | 2667 |
the certificate is to be filed, whichever is latest, the | 2668 |
certificate of dissolution may be signed by three members or, if | 2669 |
there are fewer than three members, by all of the members and | 2670 |
shall include a statement that the persons signing the certificate | 2671 |
are members and are filing the certificate because of the failure | 2672 |
of an authorized officer to do so. | 2673 |
(G) A certificate of dissolution, filed with the secretary of | 2674 |
state, shall be accompanied by all of the following: | 2675 |
(1) An affidavit of one or more of the persons executing the | 2676 |
certificate of dissolution or of an authorized officer of the | 2677 |
cooperative containing a statement of the counties, if any, in | 2678 |
this state in which the cooperative has personal property or a | 2679 |
statement that the cooperative is of a type that is required to | 2680 |
pay personal property taxes to state authorities only; | 2681 |
(2) A receipt, certificate, or other evidence showing the | 2682 |
payment of all sales, use, highway use, and other applicable taxes | 2683 |
accruing up to the date of the filing or that payment adequately | 2684 |
has been guaranteed; | 2685 |
(3) A receipt, certificate, or other evidence showing the | 2686 |
payment of all personal property taxes accruing up to the date of | 2687 |
the filing; | 2688 |
(4) A receipt, certificate, or other evidence from the | 2689 |
director of job and family services showing that all contributions | 2690 |
due from the cooperative as an employer have been paid, that | 2691 |
payment adequately has been guaranteed, or that the cooperative is | 2692 |
not subject to such contributions; | 2693 |
(5) A receipt, certificate, or other evidence from the bureau | 2694 |
of workers' compensation showing that all premiums due from the | 2695 |
cooperative as an employer have been paid, that payment adequately | 2696 |
has been guaranteed, or that the cooperative is not subject to | 2697 |
such premium payments. | 2698 |
(H) Upon the filing of a certificate of dissolution and the | 2699 |
accompanying documents required by division (G) of this section, | 2700 |
the cooperative shall be dissolved. | 2701 |
Sec. 1770.82. Following the filing of a certificate of | 2702 |
dissolution, the directors or members who filed the certificate, | 2703 |
as the case may be, shall cause a notice of voluntary dissolution | 2704 |
to be published once a week on the same day of each week for two | 2705 |
successive weeks in a newspaper that is published and of general | 2706 |
circulation in the county in which the principal executive office | 2707 |
of the cooperative was or is located and shall cause written | 2708 |
notice of the dissolution to be given to all known creditors of, | 2709 |
and to all known claimants against, the dissolved cooperative. | 2710 |
Sec. 1770.83. (A) When a cooperative is dissolved | 2711 |
voluntarily, when the articles of organization of a cooperative | 2712 |
have been canceled, when a final order of a court of common pleas | 2713 |
is made dissolving a cooperative under section 1770.84 of the | 2714 |
Revised Code, or when the period of existence of a cooperative | 2715 |
specified in its articles of organization has expired, the | 2716 |
cooperative shall cease to carry on business and shall do only | 2717 |
those acts that are required to wind up its affairs. | 2718 |
(B) Any claim existing or action or proceeding pending by or | 2719 |
against the cooperative or that would have accrued against it may | 2720 |
be prosecuted to judgment, with right of appeal as in other cases, | 2721 |
but any proceeding, execution, or process, or the satisfaction or | 2722 |
performance of any order, judgment, or decree, may be stayed as | 2723 |
provided in section 1770.84 of the Revised Code. | 2724 |
(C) Any process, notice, or demand against the cooperative | 2725 |
may be served by delivering a copy to an officer, director, | 2726 |
liquidator, or person having charge of its assets or, if no such | 2727 |
person can be found, to the statutory agent. | 2728 |
(D) The directors of the cooperative or their successors | 2729 |
shall act as the board of directors in accordance with the | 2730 |
articles of organization and bylaws until the affairs of the | 2731 |
cooperative are completely wound up. Subject to the orders of | 2732 |
courts of this state having jurisdiction over the cooperative, the | 2733 |
directors shall proceed as speedily as is practicable to a | 2734 |
complete winding up of the affairs of the cooperative and, to the | 2735 |
extent necessary or expedient to that end, shall exercise all the | 2736 |
authority of the cooperative. Without limiting the generality of | 2737 |
that authority, the directors may fill vacancies; elect officers; | 2738 |
carry out contracts of the cooperative; make new contracts; borrow | 2739 |
money; mortgage or pledge the property of the cooperative as | 2740 |
security; sell its assets at public or private sale; make | 2741 |
conveyances in the cooperative's name; lease real estate for any | 2742 |
term, including ninety-nine years renewable forever; settle or | 2743 |
compromise claims in favor of or against the cooperative; appoint | 2744 |
or employ one or more persons as liquidators to wind up the | 2745 |
affairs of the cooperative with authority that the directors see | 2746 |
fit to grant; cause the title to any of the assets of the | 2747 |
cooperative to be conveyed to those liquidators for that purpose; | 2748 |
apply assets to the payment of obligations; and, after paying or | 2749 |
adequately providing for the payment of all known obligations of | 2750 |
the cooperative, distribute the remainder of the assets either in | 2751 |
cash or in kind among the members or patrons according to their | 2752 |
respective rights and interests. In addition, the directors may | 2753 |
perform all other acts that are necessary or expedient to the | 2754 |
winding up of the affairs of the cooperative. | 2755 |
(E) The directors, or any liquidator to whom the directors | 2756 |
grant such authority, in the course of winding up the | 2757 |
cooperative's affairs, shall apply the assets of the cooperative | 2758 |
in the following order: | 2759 |
(1) To expenses that are incidental to winding up the | 2760 |
cooperative's affairs; | 2761 |
(2) To all legally enforceable liabilities and obligations of | 2762 |
the cooperative that are due claimants and creditors; | 2763 |
(3) To the members and patrons of the cooperative as provided | 2764 |
in the cooperative's articles or bylaws. | 2765 |
(F) Without limiting the authority of the directors, any | 2766 |
action within the purview of this section that is authorized or | 2767 |
approved at a meeting of the members by sixty per cent of the | 2768 |
member votes cast shall be conclusive for all purposes on all | 2769 |
members or patrons of the cooperative. | 2770 |
(G) All deeds and other instruments of the cooperative shall | 2771 |
be in the name of the cooperative and shall be executed, | 2772 |
acknowledged, and delivered by the officers appointed by the | 2773 |
directors. | 2774 |
(H) At any time during the winding up of its affairs, the | 2775 |
cooperative by its directors may apply to the court of common | 2776 |
pleas of the county in this state in which the principal executive | 2777 |
office of the cooperative is located to have the winding up | 2778 |
continued under supervision of the court as provided in section | 2779 |
1770.84 of the Revised Code. However, if the cooperative has no | 2780 |
principal executive office in this state, the application may be | 2781 |
made to a court of common pleas in the county in this state where | 2782 |
the statutory agent resides. | 2783 |
Sec. 1770.84. (A) The court of common pleas of the county in | 2784 |
this state in which is located the principal executive office of a | 2785 |
voluntarily dissolved cooperative or of a cooperative whose period | 2786 |
of existence has expired, upon the complaint of the cooperative, | 2787 |
or a majority of the directors, or ten per cent of the members or | 2788 |
twenty members, whichever is less, and upon notice to all the | 2789 |
directors and other interested persons that the court considers | 2790 |
proper, at any time may order and adjudge any of the following | 2791 |
matters: | 2792 |
(1) The presentation and proof of all claims and demands | 2793 |
against the cooperative and of all rights, interests, or liens in | 2794 |
or on any of its property; the fixing of the time and the manner | 2795 |
in which such proof shall be made and the person to whom | 2796 |
presentation shall be made; and the barring from participation in | 2797 |
any distribution of assets of all persons failing to make and | 2798 |
present proofs as required by the order of the court; | 2799 |
(2) The stay of the prosecution of any proceeding against the | 2800 |
cooperative or involving any of its property; the requirement that | 2801 |
the parties to the proceeding present and prove their claims, | 2802 |
demands, rights, interests, or liens at the time and in the manner | 2803 |
required of creditors or others; or the grant of leave to bring or | 2804 |
maintain an independent proceeding to enforce liens; | 2805 |
(3) The settlement or determination of all claims of every | 2806 |
nature against the cooperative or any of its property; the | 2807 |
determination of the assets required to be retained to pay or | 2808 |
provide for the payment of such claims or any claim; the | 2809 |
determination of the assets available for distribution among and | 2810 |
rights of members or patrons; and the making of new parties to the | 2811 |
proceeding so far as the court considers proper for the | 2812 |
determination of all matters; | 2813 |
(4) The presentation and filing of intermediate and final | 2814 |
accounts of the directors or of the liquidators and hearings on | 2815 |
them; the allowance, disallowance, or settlement of the accounts; | 2816 |
and the discharge of the directors, the liquidators, or any of | 2817 |
them from their duties and liabilities; | 2818 |
(5) The appointment of a special master commissioner to hear | 2819 |
and determine any matters with authority that the court considers | 2820 |
proper; | 2821 |
(6) The filling of any vacancies in the number of directors | 2822 |
or liquidators when the directors are unable to act on the | 2823 |
vacancies for want of a quorum or for any other reason; | 2824 |
(7) The appointment of a receiver, in accordance with the | 2825 |
usage of a court in equitable matters, to wind up the affairs of | 2826 |
the cooperative, to take custody of any of its property, or for | 2827 |
any other purpose; | 2828 |
(8) The issuance or entry of any injunction or any other | 2829 |
order that the court considers proper in the winding up of the | 2830 |
affairs of the cooperative and the giving of notice of the entry | 2831 |
of injunction or order; | 2832 |
(9) The allowance and payment of compensation to the | 2833 |
directors or any of them, to liquidators, to a receiver, to the | 2834 |
attorney for the complainant, or to any person properly rendering | 2835 |
services beneficial to the cooperative or to those interested in | 2836 |
it; | 2837 |
(10) The entry of a judgment or decree that, if it so | 2838 |
provides, may operate as the deed or other instrument ordered to | 2839 |
be executed, or the appointment of a master to execute the deed or | 2840 |
instrument in the name of the cooperative with the same effect as | 2841 |
if executed by an authorized officer pursuant to authority | 2842 |
conferred by the directors or the members of the cooperative | 2843 |
whenever there is no officer or agent competent to execute the | 2844 |
deed or instrument, whenever the cooperative or its officers do | 2845 |
not perform or comply with a judgment or decree of court, or | 2846 |
whenever the court considers it proper. | 2847 |
(B) If the cooperative has no principal executive office in | 2848 |
this state, without limiting the generality of its authority, the | 2849 |
court of common pleas in the county in this state where the | 2850 |
statutory agent resides may order and adjudge the matters | 2851 |
described in division (A) of this section. | 2852 |
(C) A judicial proceeding under this section concerning the | 2853 |
winding up of the affairs of a cooperative is a special | 2854 |
proceeding, and final orders in the proceeding may be vacated, | 2855 |
modified, or reversed on appeal pursuant to the Rules of Appellate | 2856 |
Procedure and, to the extent not in conflict with those rules, | 2857 |
Chapter 2505. of the Revised Code. | 2858 |
Sec. 1770.85. (A) Whenever, after a cooperative is dissolved | 2859 |
voluntarily or the period of existence of a cooperative has | 2860 |
expired, a receiver is appointed to wind up the affairs of the | 2861 |
cooperative, all the claims, demands, rights, interests, or liens | 2862 |
of creditors, claimants, members, and patrons shall be determined | 2863 |
as of the day on which the receiver was appointed. Unless it is | 2864 |
otherwise ordered, the appointment vests in the receiver and | 2865 |
successors of the receiver the right to the immediate possession | 2866 |
of all the property of the cooperative, which, if so ordered, | 2867 |
shall execute and deliver conveyances of that property to the | 2868 |
receiver. | 2869 |
(B) Any officer, director, member, or other person, whether a | 2870 |
resident of the state or a nonresident and however interested, may | 2871 |
be appointed as receiver. | 2872 |
(C) The receiver shall have all the authority vested in the | 2873 |
directors and officers of the cooperative, shall exercise | 2874 |
authority subject to orders that are made by the court, and may be | 2875 |
required to qualify by giving bond to the state in an amount that | 2876 |
the court fixes, with surety to the satisfaction of the clerk of | 2877 |
the court, conditioned for the faithful discharge of duties and | 2878 |
for a due accounting for all money or property received. | 2879 |
Sec. 1770.86. (A) A cooperative may be dissolved judicially | 2880 |
and its affairs wound up by an order of the court of common pleas | 2881 |
of the county in this state in which the cooperative has its | 2882 |
principal executive office, in an action brought by the members | 2883 |
having sixty per cent of the voting power of the cooperative on | 2884 |
the proposal, or the holders of a lesser portion as are entitled | 2885 |
by the articles or bylaws to dissolve the cooperative voluntarily, | 2886 |
when it is established that it is beneficial to the members or | 2887 |
patrons that the cooperative be judicially dissolved. However, if | 2888 |
the cooperative has no principal executive office in this state, | 2889 |
the court of common pleas in the county in this state where the | 2890 |
statutory agent resides may dissolve and wind up the affairs of a | 2891 |
cooperative in accordance with this section. | 2892 |
(B) A complaint for judicial dissolution shall be verified by | 2893 |
any of the complainants and shall set forth facts showing that the | 2894 |
case is as specified in this section. A schedule shall be annexed | 2895 |
to the complaint setting forth the name and address of each member | 2896 |
of the cooperative, if it is known, or the fact that it is not | 2897 |
known. | 2898 |
(C) Upon the filing of a complaint for judicial dissolution, | 2899 |
the court with which it is filed shall have power to issue | 2900 |
injunctions; to appoint a receiver with authority and duties that | 2901 |
the court from time to time may direct; to take other proceedings | 2902 |
that may be necessary to protect the property or the rights of the | 2903 |
members or patrons; and to carry on the business of the | 2904 |
cooperative until a full hearing can be conducted. Upon or after | 2905 |
the filing of a complaint for judicial dissolution, the court, by | 2906 |
injunction or order, may stay the prosecution of any proceeding | 2907 |
against the cooperative or involving any of its property and | 2908 |
require the parties to the proceeding to present and prove their | 2909 |
claims, demands, rights, interests, or liens at the time and in | 2910 |
the manner required of creditors or others. The court may refer | 2911 |
the complaint to a special master commissioner. | 2912 |
(D) After a hearing upon notice as that court directs to be | 2913 |
given to all parties to the proceeding and to any other parties in | 2914 |
interest designated by the court, a final order based either on | 2915 |
the evidence or on the report of the special master commissioner, | 2916 |
if one has been appointed, shall be made dissolving the | 2917 |
cooperative or dismissing the complaint. An order or judgment for | 2918 |
the judicial dissolution of a cooperative shall contain a concise | 2919 |
statement of the proceedings leading up to the order or judgment, | 2920 |
the name of the cooperative, the place where its principal | 2921 |
executive office is located, the names and addresses of its | 2922 |
directors and officers, the name and address of a statutory agent, | 2923 |
and, if desired, other provisions with respect to the judicial | 2924 |
dissolution and winding up that are considered necessary or | 2925 |
desirable. A certified copy of the order shall be filed in the | 2926 |
office of the secretary of state, whereupon the cooperative shall | 2927 |
be dissolved. To the extent consistent with orders entered in the | 2928 |
proceeding, the effect of judicial dissolution shall be the same | 2929 |
as in the case of voluntary dissolution, and the provisions of | 2930 |
sections 1770.83, 1770.84, and 1770.85 of the Revised Code | 2931 |
relating to the authority and duties of directors during the | 2932 |
winding up of the affairs of a cooperative dissolved voluntarily, | 2933 |
with respect to the jurisdiction of courts over the winding up of | 2934 |
the affairs of a cooperative, and with respect to receivers for | 2935 |
winding up the affairs of a cooperative shall be applicable to | 2936 |
cooperatives that are judicially dissolved. | 2937 |
(E) A proceeding under this section for judicial dissolution | 2938 |
of a cooperative is a special proceeding, and final orders in it | 2939 |
may be vacated, modified, or reversed on appeal pursuant to the | 2940 |
Rules of Appellate Procedure and, to the extent not in conflict | 2941 |
with those rules, Chapter 2505. of the Revised Code. | 2942 |
Sec. 1770.99. Whoever violates division (E) of section | 2943 |
1770.17 of the Revised Code is guilty of a misdemeanor and shall | 2944 |
pay a fine of not less than one hundred dollars and not more than | 2945 |
one thousand dollars for each offense. | 2946 |
Section 2. That existing section 111.16 of the Revised Code | 2947 |
is hereby repealed. | 2948 |