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Am. H. B. No. 288As Passed by the SenateAs Passed by the Senate
125th General Assembly | Regular Session | 2003-2004 |
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REPRESENTATIVES Faber, McGregor, Seitz, Willamowski, Latta, Gibbs, Aslanides, Carmichael, Distel, Domenick, Driehaus, C. Evans, Niehaus, Perry, Reinhard, Schlichter, Seaver, Setzer, Walcher, Widener, Book, Barrett, Beatty, Brown, Buehrer, Callender, Carano, Chandler, Clancy, Collier, Daniels, DeBose, D. Evans, Flowers, Gilb, Grendell, Hagan, Hartnett, Harwood, Hollister, Hoops, Hughes, Jolivette, Kearns, Olman, Raussen, Schmidt, Schneider, G. Smith, J. Stewart, Williams, Yates
SENATORS Robert Gardner, Jordan
A BILL
To amend sections 1729.01, 1729.02, 1729.03, 1729.04, 1729.06, 1729.07, 1729.08, 1729.11, 1729.16, 1729.18, 1729.19, 1729.22, 1729.23, 1729.26, 1729.28, 1729.35, 1729.36, 1729.38, 1729.42, 1729.46, 1729.47, 1729.49, 1729.55, 1729.56, 1729.58, 1729.59, 1729.61, 1729.69, and 1729.85 and to enact section 1729.031 of the Revised Code to modify the Cooperative Law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1729.01, 1729.02, 1729.03, 1729.04, 1729.06, 1729.07, 1729.08, 1729.11, 1729.16, 1729.18, 1729.19, 1729.22, 1729.23, 1729.26, 1729.28, 1729.35, 1729.36, 1729.38, 1729.42, 1729.46, 1729.47, 1729.49, 1729.55, 1729.56, 1729.58, 1729.59, 1729.61, 1729.69, and 1729.85 be amended and section 1729.031 of the Revised Code be enacted to read as follows:
Sec. 1729.01. As used in this chapter: (A) "Agricultural cooperative" means a cooperative to which all
of the following apply: (1) The cooperative engages in any activity in connection with the
propagation, raising, producing, harvesting, storing, drying, handling,
processing, or marketing of
agricultural products; procuring equipment and supplies or providing services
for producers and others; bargaining; and any activity related to the
foregoing. (2) Producers or agricultural cooperatives exercise more than fifty per
cent of the voting control of the cooperative. (3) The cooperative does at least fifty per cent of its business with
producers or agricultural cooperatives. (B) "Agricultural products" includes aquacultural, horticultural,
viticultural,
forestry, dairy, livestock, poultry, bee, and farm products, and the produce
or byproducts
of any of such products. (C) "Association" means any corporation organized under this
chapter. (D) "Bargaining" means the mutual obligation of a handler and a
marketing cooperative to meet at reasonable times and confer and negotiate in
good faith. Negotiations may include all terms relative to trading between
handlers and producers. The obligation does not require either party to agree
upon price, terms of sale, or any other marketing agreement, or to make a
concession. (E) "Board" means the board of directors of an
association. (F) "Cooperative" means an association or a foreign association. (G) "Corporation" means any corporation, domestic or foreign,
that is not a cooperative. (H) "Entity," except as otherwise provided, means
a foreign association, a foreign or domestic corporation other than a cooperative, or a foreign or domestic
limited liability company.
(I)(H) "Foreign association" means a corporation organized under the
cooperative laws of another state or the District of
Columbia or a foreign corporation organized under the law corporation laws of another state or,
the District of Columbia and operating, or the United States that operates on a cooperative
basis.
(J)(I) "Handler" means a person who acquires agricultural products
under a sales contract for the purpose of processing or reselling the
agricultural products.
(K)(J) "Marketing agreement" means an agreement, contract, or other
arrangement between a cooperative and a member in which the member agrees to
market all or a part of the products or produce produced by the member, or
agrees to purchase all or a part of the member's requirements for inputs,
services, or supplies.
(L)(K) "Marketing cooperative" means any agricultural cooperative
meeting the requirements of the "Co-operative Marketing
Associations Act," 42 Stat. 388 (1922), 7 U.S.C.A.
291, that negotiates sales contracts with handlers on behalf of its members
and is not in direct competition with any handler with which it negotiates
such contracts.
(M)(L) "Member" means a person who has been qualified and accepted
into membership in an association a cooperative.
(N)(M) "Membership stock" means any class of stock or other equity
interest in an association a cooperative, continuous ownership of which is required for
membership in an association the cooperative.
(N) "Patron" means a person with which a cooperative has made an enforceable agreement to allocate and distribute a per unit retain, patronage dividend, or patronage refund with respect to business conducted by the cooperative with or for the person. (O) "Patronage stock" means any stock or other equity interest in
an association a cooperative that was originally issued by the association cooperative with respect to
patronage transactions. (P) "Person" includes a natural person, partnership,
corporation, cooperative, or other entity. (Q) "Processing" means changing the physical or chemical
characteristics of agricultural products. (R) "Producer" means a person engaged in the production
of agricultural products for the market, including a lessor of land who
real or personal property used for production of agricultural products for the market that receives as rent part of the agricultural product of such land. (S) "Sales contract" means a marketing agreement or other similar
arrangement between a handler and a
producer, negotiated by the producer or by an agricultural cooperative acting
as agent for a producer, under which the producer agrees to grow or produce
agricultural products for sale to the handler.
Sec. 1729.02. (A) An association may be organized
under this chapter for any lawful purpose
permitted to corporations by the laws of this state,
except any such purpose that is inconsistent with the provisions
of this chapter or other chapters of
Title XVII of the Revised Code. This section
does not authorize any professional services otherwise prohibited by
law. (B) Associations shall be corporations that are deemed nonprofit because they
are not organized for the purpose of making a profit for themselves as such,
or for the purpose of making a profit for their members as such, but for
their members as patrons. This chapter and not Chapter 1702. of the Revised Code shall govern associations. (C) A municipal power agency, as "municipal power agency" is defined in section 3734.058 of the Revised Code, is not an association for the purposes of this chapter. (D) This chapter shall be known as the "Ohio
Cooperative Law."
Sec. 1729.03. Each association incorporated under this chapter shall
have the
following powers: (A) It may make contracts, incur
liabilities, and borrow money; issue capital stock and certificates
representing other equity
interests or indebtedness and issue certificates therefor; acquire property; and
dispose of, mortgage, pledge, lease, or otherwise use in any manner, any of
its property, or any interest in its property, wherever situated. (B) It may invest its funds, lend money for its purposes, and
hold any property as security for repayment. (C) It may act as the agent or representative of any members or other patrons in
any activities authorized by this chapter. (D) It may conduct its business and affairs, have offices, and
exercise its power in the United States or in any foreign
country. (E) It may establish reserves and invest these funds. (F) It may buy, hold, and exercise all privileges of ownership over such real
or personal property as is necessary, convenient, or incidental to the conduct
of any authorized business of the association. (G) It may establish, secure, own, and develop patents, trademarks, and
copyrights, service marks, and other intellectual property. (H) Notwithstanding Chapter 169. of the Revised
Code, it may effect effectuate the forfeiture of any unclaimed
funds, including any
unclaimed stocks stock or other equity interests, dividends, and patronage
allocations, for which the owner
cannot be found after a period of three years. Notice of the existence of
these unclaimed funds stock or other equity interests and a request for written acknowledgment from the owner
to the association shall be evidence of a bona fide attempt to deliver the
unclaimed funds stock or other equity interests to the owner. If the notice is not acknowledged within thirty
days after the notice is sent or within the period specified in the notice, if
longer, all such unclaimed funds stock or other equity interests specified in the notice are thereafter
forfeited and become the property of the association. (I) It may make donations for charitable, scientific,
educational, community development, or religious purposes, and may use all or
part of the funds forfeited to the association under division (H) for
these purposes. (J) It may do everything necessary, suitable, or proper for the
accomplishment of any of the purposes enumerated in this section. In addition
it may exercise and possess all powers,
rights, and privileges necessary or incidental to the purposes for which the
association is organized or to the activities in which it is engaged, and
any other powers, rights, and privileges granted to
corporations by
the laws of this state, except such as are inconsistent with the express
provisions of this chapter.
Sec. 1729.031. (A)(1) Subject to divisions (A)(2) and (3) of this section, an association may indemnify or agree to indemnify any person that was or is a party, or is threatened to be made a party, to any threatened, pending, or completed civil, criminal, administrative, or investigative action, suit, or proceeding, other than an action or suit by or in the right of the association, because the person is or was a director, officer, employee, agent, or volunteer of the association or is or was serving at the request of the association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise. The indemnification described in division (A)(1) of this section shall be for expenses, including attorney's fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit, or proceeding described in division (A)(1) of this section. (2) With respect to any noncriminal action or proceeding, the indemnification described in division (A)(1) of this section shall be made if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association as described in division (D) of section 1729.23 of the Revised Code. (3) With respect to any criminal action or proceeding, the indemnification described in division (A)(1) of this section shall be made if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association as described in division (D) of section 1729.23 of the Revised Code, and the person had no reasonable cause to believe the conduct was unlawful. (4) For purposes of divisions (A)(2) and (3) of this section, the termination of any action, suit, or proceeding by judgment, order, settlement, or conviction or a plea of nolo contendere or its equivalent does not create, of itself, a presumption that the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association or that the person had reasonable cause to believe that the conduct was unlawful. (B)(1) Subject to division (B)(2) of this section and provided the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association, an association may indemnify or agree to indemnify any person that was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action or suit by or in the right of the association to procure a judgment in its favor, because the person is or was a director, officer, employee, agent, or volunteer of the association or is or was serving at the request of the association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise. The indemnification described in division (B)(1) of this section shall be for expenses, including attorney's fees, actually and reasonably incurred by the person in connection with the defense or settlement of an action or suit described in division (B)(1) of this section. (2) If a person is adjudged to be liable for negligence or misconduct in the performance of a duty to the association, the indemnification described in division (B)(1) of this section shall be made for any claim, issue, or matter only to the extent that the court of common pleas or the court in which the action or suit was brought determines, upon application, that despite the adjudication of liability and in view of all the circumstances of the case, the person fairly and reasonably is entitled to indemnity for expenses that the court of common pleas or court in which the action or suit was brought considers proper. (C) Notwithstanding division (A) or (B) of this section, to the extent that a person has been successful on the merits or otherwise in defense of any action, suit, or proceeding described in division (A) or (B) of this section, the person shall be indemnified against expenses, including attorney's fees, actually and reasonably incurred in connection with that action, suit, or proceeding. (D) Unless ordered by a court or division (C) of this section applies, the association shall make any indemnification under division (A) or (B) of this section only as authorized in the specific case, upon a determination that indemnification of the person is proper in the circumstances because the person has met the applicable standard of conduct set forth in division (A) or (B) of this section. This determination shall be made in any of the following manners: (1) By a majority vote of a quorum consisting of directors of the indemnifying association that were not and are not parties to or threatened with the action, suit, or proceeding described in division (A) or (B) of this section; (2) Whether or not a quorum as described in division (D)(1) of this section is obtainable, and if a majority of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney or a firm of attorneys associated with that attorney, that within the past five years has been retained by or has performed services for the association or has performed services for any person to be indemnified; (E)(1) The association shall pay the expenses, including attorney's fees, incurred by the person in defending the action, suit, or proceeding described in division (A) or (B) of this section, unless either of the following applies: (a) At the time of a person's act or omission that is the subject of an action, suit, or proceeding described in division (A) or (B) of this section, the articles or bylaws of the association state, by specific reference to divisions (A) and (B) of this section, that division (A) and (B) of this section do not apply to the association. (b) The only liability asserted against a person in an action, suit, or proceeding described in division (A) or (B) of this section is pursuant to section 1729.25 of the Revised Code. (2) Upon receipt of a request from a person, the association may pay expenses, including attorney's fees, incurred by a person in defending any action, suit, or proceeding described in division (A) or (B) of this section as the expenses are incurred in advance of the final disposition of the action, suit, or proceeding, if the board authorizes this payment in the specific case and upon receipt of an undertaking by or on behalf of the person to repay the amount if it ultimately is determined that the person is not entitled to be indemnified by the association. (F) Both of the following apply to the indemnification authorized by this section: (1) It is not exclusive of and is in addition to any other rights granted to a person seeking indemnification pursuant to the articles or bylaws of the association, any agreement, a vote of members or disinterested directors of the association, or otherwise, for action taken in the person's official capacity and action taken in another capacity while holding their office or position. (2) It continues as to a person that has ceased to be a director, officer, employee, member, manager, agent, or volunteer and inures to the benefit of the heirs, executors, and administrators of that person. (G) As used in this section, "association" includes all constituent associations and entities in a consolidation or merger and the new or surviving association or entity. Any person that is or was a director, officer, employee, agent, or volunteer of a
constituent association or is or was serving at the request of a constituent association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise stands in the same position under this section with respect to the new or surviving association or entity as the person would if the person had served the new or surviving association or entity in the same capacity. (H)(1) An association may purchase and maintain insurance or furnish similar protection, including, but not limited to, trust funds, letters of credit, or self-insurance, for or on behalf of any person that is or was a director, officer, employee, agent, or volunteer of the association or is or was serving at the request of the association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise. The insurance or similar protection described in division (H)(1) of this section shall be against any liability asserted against the person and incurred by the person in any such capacity, whether or not the association would have the power to indemnify the person against that liability under this section. (2) Insurance described in division (H)(1) of this section may be purchased from or maintained with a person in which the association has a financial interest.
Sec. 1729.04. (A) The name of any association organized under
this chapter shall include the word or abbreviation "cooperative," "coop,"
"co-operative,"
"co-op," "association," "assn.," "company," "co.," "incorporated," "inc.,"
"corporation," or "corp." (B) No corporation, association, or other person organized or
applying to do business in this state shall use the word or abbreviation
"cooperative,"
"coop," "co-operative," or "co-op" as a part of its corporate or other
business name or title, unless
at least one of the following applies: (1) It has complied with is organized under this chapter. (2) It is organized and operating on a cooperative
basis under Chapter 1702. of
the Revised Code. (3) It is
organized and operating in accordance with the cooperative laws of another
state, the District of Columbia, or the United
States.
(4) It is a state or federally chartered credit union.
Sec. 1729.06. (A) Two or more
individuals may form an association under this
chapter. (B)(1) Every association
shall have and maintain a statutory agent upon whom any process,
notice, or demand against the association may be served. The
agent may be a natural person who is a resident of this state or
a corporation that is authorized by its articles of
incorporation to act as such agent and has a business address in
this state. (2) Whenever appointment or designation of a statutory
agent is required by this chapter, the appointment or
designation shall be on a form prescribed by the secretary of
state for the administration of this chapter and shall conform with section 1702.06 of the
Revised Code.
Sec. 1729.07. (A) The articles of incorporation of an
association shall set forth all of the following: (1) The name of the association; (2) The association's purposes, as permitted by this chapter. It is
sufficient to state in
the articles that the association may engage in any activity within the
purposes for which associations may be organized under this chapter. (3) The county and municipal corporation or township where the
association's principal place of business will be located which need not be within this state; (4) The names and addresses of the incorporators; (5) The number of its directors or a statement that the number of
directors shall be as specified in the bylaws; (6) The names and addresses of those who are to serve as directors until
the first annual meeting of members or until the election and qualification of their
successors; (7) Whether the association is organized with or without capital stock. (a) If the association is organized without capital stock, the
articles shall set forth the general rules by which the property rights and
interests of each member are to be determined. (b) If the association is organized with capital stock, the total
amount of the stock, the number and par value of the shares, and dividend
rights, if any. If there is more than one class of stock, the articles shall
set forth a statement of the number of shares in each class and a statement of
the designations, preferences, rights, and limitations of the shares in each
class. (B) The articles may include additional provisions, consistent
with law, including provisions that are required or permitted to be set forth
in the bylaws. (C) The articles shall be signed by the incorporators and filed
with the secretary of state in accordance with section 1729.12
of the Revised Code. The
articles shall be accompanied by the appointment of a statutory agent in
accordance with division (B) of section 1729.06 of
the Revised Code. The legal
existence of an association
begins upon the filing of the articles and, unless the articles provide
otherwise, its period of existence is perpetual.
Sec. 1729.08. (A) The articles of
incorporation of an association may be altered
or amended at any regular meeting of the association or at any special meeting
called for that purpose, provided that the text of the proposed
change, or a general description of the change, is contained in the notice of
the meeting. An amendment shall first be approved by
two thirds of
the directors and shall then be adopted by an
affirmative vote
of sixty per cent of the member
votes cast on the amendment
or, if the articles provide or permit, by the affirmative
vote of a greater majority or by the affirmative vote of a
simple majority of all member votes eligible to be cast on the
amendment. (B) Amendments to the articles of
incorporation, when so adopted, shall be filed in accordance with section
1729.12 of the
Revised Code. (C) The board of an association may adopt a
restatement of the articles that without a member vote if the restatement merely incorporates amendments previously approved
by
the board and adopted by the members. An association may, by action taken in
the manner required for an amendment, adopt restated articles that contain
amendments made at the time of the restatement. Restated articles shall state
that they are restated, or restated and amended, if amendments are adopted
with the restatement, and shall supersede the existing articles and
amendments. Restated articles shall meet the requirements of section 1729.07
of the Revised Code, except that the names and addresses of the incorporators and initial
directors may be omitted. A restatement of the articles shall be filed in the
manner prescribed for an amendment of the articles. (D) Except
as provided in the articles of incorporation, the board may
adopt an amendment to the articles of incorporation without a
member vote in any of the following cases: (1) To change the principal place of business of the
association; (2) To designate and determine the rights and restrictions
of a series within a class of capital stock, if permitted by the
articles; (3) To reduce the authorized number of shares of any class
or series of capital stock to any number down to and including
the number of the shares issued and outstanding, and to assign
the authorization for the number of shares so reduced to another
class or classes of capital stock previously authorized; (4) After a merger, consolidation, conversion, division,
or occurrence of any other contingent event referred to in the
articles of incorporation, to eliminate from the articles any
statement or provision pertaining exclusively to the merger,
consolidation, conversion, division, or occurrence, and to make
other changes required by such elimination, but only after the deleted item has been superseded in accordance with the articles of incorporation or otherwise is no longer in effect.
Sec. 1729.11. (A) An association whose articles of
incorporation have been canceled or an association that has been dissolved in
a manner other than for a voluntary dissolution as provided in section 1729.55
of the Revised Code, or a judicial dissolution as provided in section 1729.61
of the Revised Code, may be
reinstated by filing, on a form prescribed by the secretary of state for the administration of this chapter, an
application for reinstatement and the required appointment of a statutory
agent, and by paying a filing fee of ten dollars. (B) Upon reinstatement of an association's articles of
incorporation, the rights, privileges, and franchises, including all real or
personal property rights and credits and all contract and other rights, of the
association existing at the time that its articles were canceled or the
dissolution became effective shall be continued continue in effect as if the articles
had not been canceled or the dissolution had not occurred; and the association
shall again be entitled to exercise the rights, privileges, and franchises
authorized by its articles.
Sec. 1729.16. (A) The initial bylaws may be adopted by the
association's directors who are to serve until the first annual member meeting.
After
the initial bylaws are adopted, bylaws may be adopted and amended only by the
members unless the members adopt a bylaw that permits the board
to make and amend specified bylaws articles or bylaws provide that the board, by a two-thirds vote of the entire board, may adopt or amend the bylaws or any specified bylaw. (B) Any bylaw adopted or amended by the board shall be reported
at the next regular member meeting. Any bylaw adopted or amended by the board shall not conflict with the association's articles of incorporation or with this chapter of the Revised Code. Any such bylaw is subject to amendment or
repeal by the members at any time. (C) Unless the bylaws provide otherwise, any bylaw may be
adopted, amended, or repealed by a majority of the member votes cast on the
adoption, amendment, or repeal.
Sec. 1729.18. (A) An association shall have two or more
members. However, an association may have one member
if that member is an association
a cooperative that has two or more members. (B) Each association shall hold an annual meeting of its
members. The board may call a special meeting of the
members at any time. Any meeting of the members may be held at one time or in
a series of meetings at one or more locations. (C) Twenty per cent of the members entitled to vote may file with
the board a petition stating the specific business to be brought before the
association and demanding a special meeting at any time for consideration of
such business. Upon compliance with this division, the meeting shall be
called by the board. (D) Notice of every meeting, together with a statement of the
purpose of the meeting, shall be sent to each member who is entitled to vote
at the meeting and any affected
stockholder at the member's or stockholder's
current address, as shown in the records of the
association, at least ten days prior to the
meeting, in accordance with section 1729.20 of the Revised Code. The bylaws may provide
that the notice be given by publication in a newspaper or newspapers of
general circulation
in the trade area of the association if notice to individual members and
affected shareholders is impracticable.
Sec. 1729.19. (A) Unless prohibited in an association's articles
of incorporation or bylaws, any action that may be authorized or taken at a
meeting of the members, affected stockholders, the board,
or any committee of the board, may be authorized or taken without
a meeting, with the affirmative vote or approval of, and in writing or
writings signed by the following: (1) In the case of members or affected stockholders, sixty per cent of the
votes of the members or affected stockholders who would be entitled to vote on the
action at a meeting for such purpose; (2) In the case of the board of directors or a committee of the board, all
of the directors on the board or all of the committee members on the
committee in a writing or writings signed by each of the directors or committee members. (B) Any such writing or writings A record of action described in division (A) of this section without a meeting shall be included in the records
of the association in the same manner as minutes of meetings of the
association's members, affected stockholders, board, or committee of the
board. (C) Any certificate with respect to the authorization or taking
of any action without a meeting that is required to be filed in the office of the secretary
of state shall state that the authorization or taking of such action was in
writing or writings approved and signed as provided in this section.
Sec. 1729.22. (A) Except where this chapter or an association's
articles of incorporation or bylaws require that action be otherwise
authorized or taken, all of the authority of an association shall be exercised
by or under the direction of the board. The board shall consist
of not less than five directors, elected by and from the members, unless the
number of members is less than five, in which case, the number of directors
may equal the number of members. (B) The bylaws may provide that the membership of an association
be divided into districts or other groupings and that the directors shall be
elected according to such districts or groupings. In such that case, the bylaws
shall specify the number of directors to be elected and the manner of
reapportioning or redistricting the membership. (C) The bylaws may provide that one or more directors may be
appointed by the other directors. The appointed directors need not be members
of the association, but shall have the same powers, rights, and
responsibilities as other directors. The appointed directors shall not number
more than one-fifth of the entire number of directors. (D) The bylaws may provide for an executive committee and may
allot to the executive committee any of the functions and powers of the board, subject
to
the general direction and control of the board. (E) The association may provide a fair remuneration for the time
actually spent by its officers and directors in its service, and for the
services of the members of its executive committee. (F) When Unless the bylaws provide otherwise, when a vacancy on the board occurs other than by expiration
of term, the remaining directors on the board, by a majority vote, shall elect
a
director to fill the vacancy. If the bylaws provide for an election of
directors by the members in a district or other grouping, the board may call a special meeting
of the members in that district or group to fill the vacancy.
Sec. 1729.23. (A) A director shall perform the duties
of a director, including duties as a member of any committee of the directors
upon which the director serves, in good faith, in a manner the director
reasonably
believes to be in or not opposed to the best interests of the association, and
with the care that an ordinarily prudent person in a like position would use
under similar circumstances. In performing these duties, a director is
entitled to rely on information, opinions, reports, or statements, including
financial statements and other financial data, that are prepared or presented
by any of the following: (1) One or more directors, officers, or employees of the association whom
the director reasonably believes are reliable and competent in the matters
prepared or presented; (2) Counsel, public accountants, or other persons as to matters that the
director reasonably believes are within the person's professional or expert
competence; (3) A committee of the directors upon which the director does not serve,
established in accordance with the association's articles of incorporation or
bylaws, as to matters within its designated authority, provided the director
reasonably believes the committee merits confidence. (B) For purposes of division (A) of this section: (1) A director shall not be found to have failed to perform the duties in
accordance with division (A) of this section, unless it is proved, by
clear and convincing evidence, in an action brought against the director that
the director has not acted in good faith, in a manner reasonably believed to
be in or not opposed to the best interests of the association, or with the
care that an ordinarily prudent person in a like position would use under
similar circumstances. Such an action includes, but is not limited to, an
action that involves or affects any of the following: (a) A change or potential change in control of the association; (b) A termination or potential termination of the director's
service to the association as a director; (c) Service in any other position or relationship with the
association. (2) A director shall not be considered to be acting in good faith if the
director has knowledge concerning the matter in question that would cause
reliance on information, opinions, reports, or statements that are prepared or
presented by the persons described in divisions (A)(1) to (3) of this
section to be unwarranted. (3) The provisions of division Division (B) of this section do does not limit
relief available under section 1729.24 of the Revised Code. (C)(1) Subject to divisions (C)(2) and (3) of this
section, a director is liable in damages for any act that the director takes
or fails to take as director only if it is proved, by clear and convincing
evidence, in an action brought against the director that the act or omission
of the director was one
undertaken with a deliberate intent to cause injury to the association or was
one undertaken with a reckless disregard for the best interests of the
association. (2) Division (C)(1) of this section does not affect the liability
of a director under section 1729.25 of the Revised Code. (3) Subject to division (C)(2) of this section, division
(C)(1) of this section does not apply if, and only to the extent
that, at the time of an act or omission of the director, the association's
articles of incorporation or bylaws state, by specific reference to division
(C)(1) of this section, that its provisions do not apply to the
association. (D) For purposes of this section and section 1729.031 of the Revised Code, in determining what is
reasonably believed to be in or not opposed to the best interests of the
association, a director shall consider the purposes of the association and may
consider any of the following: (1) The interests of the employees, suppliers, creditors, and customers of
the association; (2) The economy of this state and of the United States; (3) Community and societal matters; (4) The long-term and short-term best interests of the association,
including, but not limited to, the possibility that those interests may be
best served by the continued independence of the association; (5) The interests of the members as patrons of the association. (E) Divisions (B) and (C) of this section do
not affect the duties of a director who acts in any capacity other than as a
director.
Sec. 1729.26. (A) The officers of an association shall consist
of a president, a secretary, a treasurer, and, if desired, a chairperson and one or more vice chairpersons of
the board, one or more vice-presidents, and
such other officers and assistant officers as necessary. The officers shall
be elected by the board. The chairperson and any vice chairperson of the board shall
be a director. Unless the association's articles of
incorporation or bylaws provide
otherwise, none of the other officers need be a director. Any two or more
offices may be held by the same person, but no officer shall execute,
acknowledge, or verify any instrument in more than one capacity if the
instrument is required by law or by the articles or bylaws to be executed,
acknowledged, or verified by two or more officers. Unless the articles or the
bylaws provide otherwise, all officers shall be elected annually. (B) All officers shall have the authority to perform, and shall
perform, the duties as the bylaws provide, or as the board may determine in
accordance with the bylaws.
Sec. 1729.28. (A) Any member of an
association may bring charges
against an
officer or director of the association by filing them in writing with the
secretary of the association, together with a petition, signed by
twenty per
cent of the members, requesting the removal of the officer or director in
question. The removal shall be voted upon at the next regular or special
meeting of the members of the association and, by a vote of a majority of the members, the
association may remove the officer or director and fill the vacancy. The
director or officer against whom such charges are brought shall be informed in
writing of the charges previous to the meeting and shall have an opportunity
at the meeting to be heard in person or by counsel and to present witnesses,
and the persons bringing the charges against the director or
officer shall have the same opportunity. (B) In case If the bylaws provide for election of directors by
districts the members in a district or other grouping, then the petition for
removal of a director must
be signed by twenty per cent of the members residing in the district or
belonging to the group from
which
the director was elected. The board
shall then
call a special meeting of the members residing in that district or
belonging to the group to consider and vote upon
the removal of the director; and at such meeting, by a vote of the majority of
the members of that district or belonging to the group, the director in
question shall be removed from
office.
Sec. 1729.35. (A) An association may merge or consolidate with
one or more associations under this chapter. Before an association may merge
or consolidate with any other association, a written agreement of merger or
consolidation shall be approved by the board of each constituent
association and by the members of each constituent association.
The agreement shall set forth the terms of the merger or consolidation,
including any provisions for amendment or abandonment of the agreement. In
the case of a consolidation, the agreement also shall contain the articles of
incorporation of the new association. (B)(1) If the agreement of merger or consolidation provides that
a holder of stock other than membership stock or patronage stock in a
constituent association will be affected, all of the following apply: (a) Unless the board of the constituent association provides that
division (B)(1)(b) of this section applies, the
affected stockholder shall be entitled to cast one vote on the agreement
regardless of the par or stated value, the number of shares, or the number of
affected classes of the stock held. (b) The board of a constituent association may provide that a
stockholder otherwise entitled to vote under division
(B)(1)(a) of this section shall instead be entitled to
payment of fair cash value of the affected stock held by the stockholder in
accordance with section 1729.46 of the Revised Code. (c) A member holding stock affected by a proposed agreement of
merger or consolidation may vote only as a member and shall not be entitled to
vote or demand fair cash value as an affected stockholder. (2) For purposes of this section, a holder of stock is affected as to any
class of stock owned by the holder only if the agreement of merger or
consolidation does any of the following: (a) Decreases the dividends to which that class may be entitled
or changes the method by which the dividend rate on that class is fixed; (b) Provides for additional restriction of rights to transfer
shares of that class; (c) Gives to another existing or any new class of stock or equity
interest not previously entitled thereto any preference, as to dividends or
upon dissolution, that is higher than preferences of that class; (d) Changes the par value of shares of that class or of any other
class having the same or higher preferences as to dividends or upon
dissolution; (e) Increases the number of authorized shares of any other class
having the same or higher preferences as to dividends or upon dissolution
beyond the aggregate authorizations for such classes in the constituent
associations; (f) Requires or permits an exchange of shares of any class with
lower preferences as to dividends or upon dissolution for shares of any other
class with higher preferences. (C) The agreement is approved if both of the following conditions
are met with respect to each constituent association: (1) Notice of the meeting to vote on the agreement, the agreement, and a
description of the method of voting have been sent to all members, and to all
affected stockholders entitled either to vote on the agreement
or to receive payment of fair cash value under division (B)
of this section; (2) Sixty per cent of the member votes cast approve the agreement, and a
simple majority of the votes cast by the affected stockholders entitled to
vote under
division (B) of this section approve the agreement. (D) Notwithstanding division (C) of this section, no
vote of the members or stockholders of a constituent association shall be
necessary to approve a merger of a wholly owned subsidiary association with
and into its parent association cooperative or a merger or a consolidation of two or more
subsidiary associations that are wholly owned by an association a cooperative. (E) After approval of an agreement under this section, but before
the merger or consolidation is effective, the agreement may be amended in
accordance with any provision for amendment set forth in the agreement,
provided that an amendment made subsequent to adoption of the agreement by the
members of any constituent association shall not do any of the following: (1) Change the membership rights, or the amount or kind of stock,
securities, cash, property, or other rights to be received, exchanged, or
converted in the merger or consolidation; (2) Change the articles of incorporation or bylaws of the surviving or new
association as provided for in the agreement; (3) Change any provision of the agreement with respect to the rights of
members or the manner of voting in the surviving or new association. (F) After approval of an agreement under this section, but before
the merger or consolidation is effective, the merger or consolidation may be
abandoned in accordance with any provision for abandonment set forth in the
agreement. (G) The merger or consolidation shall take effect in accordance
with sections 1729.37 and 1729.38 of the Revised Code.
Sec. 1729.36. (A) An association may merge or consolidate with
one or more entities, if such merger or consolidation is permitted by the laws
under which each constituent entity exists and the association complies with
this section. (B) Each constituent association shall comply with section
1729.35 of the Revised Code with respect to form and approval of an agreement
of merger or
consolidation, and each constituent entity shall comply with the applicable
provisions of the laws under which it exists, except that the agreement of
merger or consolidation, by whatever name designated, shall comply with
divisions (C) and (D) of this section. (C) The agreement of merger or consolidation shall set forth all
of the following: (1) The names of the states and the laws under which each constituent
entity exists; (2) All statements and matters required to be set forth in agreements of
merger or consolidation by the laws under which any constituent entity exists; (3) A statement that the surviving or new entity is to be an association,
a foreign association, a corporation other than a cooperative, or a limited liability company; (4) If the surviving or new entity is to be a foreign entity: (a) The place where the principal office of the surviving or new
entity is to be located in the state in which the surviving or new entity is
to exist; (b) The consent by the surviving or new entity that it may be
sued and served with process in this
state in any proceeding for the enforcement of any obligation of any
constituent association or domestic entity; (c) The consent by the surviving or new entity that it shall
be subject to the applicable provisions of
Chapter 1703. of the
Revised
Code, if it is a foreign
corporation or foreign association, or to sections 1705.53 to
1705.58 of the Revised
Code, if it is a foreign
limited liability company; (d) If it is desired that the surviving or new entity exercise
its corporate privileges in this state as a foreign
entity. (D) The agreement also may also set forth other provisions permitted
by the laws of any state in which any constituent entity exists. (E) If the surviving or new entity is an association, the merger
or consolidation shall take effect in accordance with sections
1729.37 and 1729.38 of the Revised Code. (F) If the surviving or new entity is an entity other than an
association, the merger or consolidation shall take effect in accordance with
the applicable provisions of the laws under which it exists.
Sec. 1729.38. (A)(1) Upon adoption of an agreement of merger or
consolidation under section 1729.35 or 1729.36 of the Revised Code, a
certificate, signed by
any authorized officer or representative of each constituent association or entity, shall be
filed with
the secretary of state
on a form prescribed by the secretary of state that sets
forth the following: (a) The name and form of each constituent association or entity
and the state law under which each constituent entity exists; (b) A statement that each constituent association or entity has
adopted the agreement of merger or consolidation, the manner of adoption, and
that the agreement was adopted in compliance with the laws applicable to each
constituent association or entity; (c) The effective date of the merger or consolidation, which date
may be on or after the date of filing of the certificate; (d) In the case of a merger, a statement that one or more
specified constituent associations or entities will be merged into a specified
surviving association or entity, or, in the case of a consolidation, a
statement that the constituent associations or entities will be consolidated
into a new association or entity; (e) The name and address of the statutory agent upon whom any
process, notice, or demand against any constituent association or entity, or
the surviving or new association or entity, may be served. (2) In the case of a merger into an association or domestic entity, any
amendments to the articles of incorporation or the articles or organization of
the surviving association or entity shall be filed with the certificate. (3) In the case of a consolidation to form a new domestic association or
entity, the articles of incorporation or the articles of organization of the
new association or entity shall be filed with the certificate. (4) If the surviving or new entity is a foreign entity that desires to
transact business in this state as a foreign entity, the certificate shall be
accompanied by the information required for qualification of a foreign entity
in this state by Chapter 1703. of the Revised Code, in the case of a foreign
corporation or foreign cooperative, or by sections 1705.53 and 1705.54 of the
Revised Code,
in the case of a foreign limited liability company. (B) A copy of the certificate of merger or consolidation,
certified by the secretary of state, may be filed for record in the office of
the county recorder of any county in this state. For such recording the
county recorder shall charge and collect the same fee as
in the case of deeds. The certified copy of the certificate of merger or
consolidation shall be
recorded in the records of deeds. (C) For purposes of
this section, "domestic entity" means a corporation other than an association or a limited
liability company organized under the laws of this state.
Sec. 1729.42. (A) A domestic corporation that is not an association may convert itself into
an association by adopting an amendment to its articles of incorporation in
which it elects to become subject to this chapter, together with any changes
in its articles of incorporation and bylaws required by this chapter, and any
other desirable changes permitted by this chapter. The amendment shall be
adopted, filed, and recorded in the manner provided by the law under which the
corporation exists. (B) An association may convert itself to a domestic corporation
that is not an association by adopting an amendment to its articles of incorporation in which it elects
to become subject to any other chapter of Title XVII of the Revised Code,
if so
permitted by such chapter, together with any changes in its articles of
incorporation and bylaws required by such chapter and any other desirable
changes permitted by such chapter. The amendment shall be adopted, filed, and
recorded under this chapter in the same manner as an amendment of the articles
of incorporation under sections 1729.08 and 1729.09 of the Revised Code.
Sec. 1729.46. (A) In order to obtain payment of the fair cash
value, a stockholder entitled to payment of the fair cash value of stock under
section 1729.09, 1729.35, 1729.36, or 1729.40 of the Revised Code shall
deliver a
written demand for
payment of the fair cash value of the stock to the association no later than
fifteen days after notice is sent to members and stockholders in accordance
with section 1729.09, 1729.35, 1729.36, or 1729.40 of the Revised Code,
as the case may be. The written demand shall state the name and address of
the
stockholder,
the number and class of the stock for which fair cash value is demanded, and
the amount claimed by the stockholder to be the fair cash value of the
stock. Delivery of written demand for payment
of fair cash value of stock in
accordance with this section is sufficient if delivered to the association or
to the surviving or new association or entity resulting from the merger,
consolidation, division, or conversion, whether the demand is delivered
before, on, or after the
effective date of the action. If written demand is not
timely delivered in conformity with this section,
the stockholder's right to payment of fair cash value with respect to the
amendment to the articles of incorporation, agreement of merger or
consolidation, plan of division, or conversion shall be barred. (B) If a timely demand is delivered in accordance with this
section, fair cash value of the stock shall be determined and paid to the
stockholder in accordance with the following procedures: (1) The association or the surviving, new, or resulting association or
entity shall send a
written acknowledgment of receipt of the demand for fair cash value to the
address specified in the demand no later than fifteen days after receipt of
the demand. If the board of the association or the surviving, new,
or resulting association or entity believes that the demand has failed to
comply with the
requirements of this section, the acknowledgment shall state
any such defects. The acknowledgment also shall
state what the board believes
to be the fair cash value of the stock that is the subject of the demand. If
the articles of incorporation of the constituent or original association
provide a value for the stock
upon redemption, the fair cash value of the stock
presumptively shall be the
lesser of the redemption value or the fair market value of such the stock
immediately prior to the merger, consolidation, division, or conversion. (2) The stockholder shall not transfer, encumber, pledge, or otherwise
dispose of the stock that is the subject of the demand for fair cash value, or
any certificate representing such the stock, until the demand is finally resolved
by agreement, withdrawal, or final judicial determination as provided in this
section 1729.47 of the Revised Code. (3) If the association's articles of incorporation or bylaws provide a
reasonable basis for determining and paying the fair cash value of the stock
that is the subject of the demand for fair cash value, or if the association
or the surviving, new, or resulting association or entity and the demanding
stockholder reach an
agreement on the fair cash value of the stock within three months after
delivery of the demand for fair cash value, the fair cash value of the stock
shall be determined in accordance with the constituent or original
association's articles of
incorporation or bylaws, or as agreed upon, as the case may be. The
association shall thereupon tender payment of the fair cash value so
determined, to be paid to the stockholder within thirty days of delivery of
any certificates representing the stock or the stockholder's written waiver
and release of claim to all rights to the stock to the association or the
surviving, new, or resulting association or entity. Without precluding other
possible reasonable
bases for determining fair cash value of stock under this section, a provision
in the constituent or original association's articles of incorporation or
bylaws that fair cash value
shall be determined by final and binding arbitration, or that fair cash value
shall be the lesser of par value, book value, or fair market value, shall be
considered a reasonable basis for determining and paying the fair cash value
of
stock. (C) The right of a demanding stockholder to receive the fair cash
value of stock as to which the stockholder seeks relief and the obligation of
the association or the surviving, new, or resulting association or entity
to furnish the fair cash
value for those interests terminate if any of the following applies: (1) The demanding stockholder fails to comply with this section. (2) The association abandons the amendment of articles, merger,
consolidation, division, or conversion or is finally enjoined or prevented
from taking such action. (3) The demanding stockholder withdraws the demand for fair cash value
with consent of the association. (4) The demanding stockholder attempts to sell, transfer, or encumber the
stock which is the subject of the demand prior to final determination of its
fair cash value under this section or under section 1729.47 of the Revised Code. (5) All of the following apply: (a) The articles of incorporation or bylaws of the association
do not provide a reasonable basis for determining and paying
fair cash value to an affected stockholder; (b) The association and the affected stockholder have not agreed
upon the fair cash value of the stock which is the subject of the demand; (c) The affected stockholder does not file a timely complaint
under section 1729.47 of the Revised Code. (D) The fair cash value that is agreed upon by the affected
stockholder and the association, or determined using a reasonable basis for
determining and paying fair cash value in the association's articles of
incorporation or bylaws, or fixed by a court in a proceeding under section
1729.47 of the Revised Code, shall be paid within thirty days as follows: (1) Immediately to the holder of uncertificated stock; (2) Upon and simultaneously with the surrender of certificates
representing certificated stock.
Sec. 1729.47. (A) If the association's articles of
incorporation or bylaws do
not provide a reasonable basis for determining and paying fair cash value of
the stock that is the subject of the demand for payment of fair cash value, and
the
affected stockholder has not agreed upon a fair cash value of the stock that
is the subject of the demand within three months after delivery of the demand
for payment of fair cash value, the affected stockholder, within thirty
days
thereafter, may file a complaint for recovery of fair cash value of the stock
from
the association or the surviving, new, or resulting association or entity in
the court of common pleas of the
county in which the principal office place of business of the association that issued the stock
is or was located.
However, if the principal place of business of an association is not within this state, then the complaint described in this division shall be filed in the court of common pleas of the county in which the association's statutory agent resides. Other affected
stockholders who have made timely demand for payment of fair cash value
may join as plaintiffs in the proceeding, and any two or more
proceedings commenced by affected stockholders may be consolidated. The
complaint shall contain a brief statement of the relevant facts, including the
vote by members of the association, the facts entitling the stockholder to
relief under this section, and a demand for that relief. Notwithstanding the
Rules of Civil Procedure, no answer to a complaint
filed under this section is required. (B) Upon filing the complaint and upon motion of the complainant,
the court shall fix a date for hearing on the complaint and require service of
a notice of the complaint and the date for hearing on the defendant in the
manner prescribed in the Rules of Civil Procedure
for service of process. (C) On the date fixed for the hearing or any adjournment thereof,
the court shall determine from the complaint and any evidence submitted at the
hearing by the parties, whether the affected stockholder is entitled to the
fair cash value of stock that is the subject of the demand and, if the
stockholder is to be so paid, the number and class of stock for which payment
is to be made. (D) If the court finds that the affected stockholder is to be
paid, it may appoint one or more persons as appraisers to receive evidence as
to the fair cash value. The appraisers shall have the power and authority
that the court specifies in the order of appointment, and the court shall fix
reasonable compensation for the appraisers. After receiving the
recommendation of any appointed appraiser, or if appraisers are not appointed,
the court shall make findings as to the fair cash value and render judgment
for the payment of that fair cash value and interest at the rate and from the
date the court considers equitable. The costs of the proceeding, including
compensation of the appointed appraisers as fixed by the court, shall be
assessed as the court considers equitable. (E) The proceeding on the complaint for fair cash value is a
special proceeding, and final orders in it may be vacated, modified, or
reversed on appeal pursuant to the Rules of Appellate
Procedure and, to the extent not in conflict with those rules,
Chapter 2505. of the Revised Code.
Sec. 1729.49. (A) As used in this section, "substantially all"
means more than two-thirds of the association's assets, measured, in the
board's discretion, either by value as recorded in the books and records of
the association or by fair market value. (B) Unless the articles of incorporation or the bylaws of an
association otherwise provide, a lease, sale, exchange, transfer, or other
disposition of any assets of an association may be made upon terms and
for consideration, which may consist, in whole or in part, of money or
other property, including shares or other securities or promissory
obligations
of any association or entity, as may be authorized by the
board. If a lease, sale, exchange, transfer, or other
disposition, or a series of such transactions, would dispose of all or
substantially all of the assets of the association, then the disposition may
be made only upon a written plan of disposition prepared by the board
or by a committee selected by the board for that purpose, and
adopted in the same manner as provided for the adoption of a resolution of
dissolution in section 1729.55 of the
Revised Code. A plan of disposition shall set forth a
general description or summary of the assets subject to disposition,; the
method of disposition,; the intended transferee of the assets, if known to the
board of directors,; and a general description of any material effect the board
believes the disposition will have on the interests of the members and
stockholders. Notice of a meeting of the members at which a plan of
disposition will be voted on shall be given to all members, whether or not
entitled to vote at the meeting. Such The notice shall be accompanied by a copy
or summary of the plan of disposition and a ballot for those members entitled
to vote on the plan. (C) The association, by its board, may abandon a
plan of disposition, subject to the contract rights of other persons, if the
power of abandonment is conferred upon the board either by the
terms of the transaction or in the plan of disposition. (D) An action to set aside a disposition of assets by an
association, on the
ground that any section of the Revised Code applicable to the lease, sale, exchange,
transfer, or other disposition of all or substantially all the assets of such
the association has not been complied with, shall be brought within ninety days
after such transaction, or such the action shall be is forever barred.
Sec. 1729.55. (A) An association may be dissolved voluntarily in
the manner provided in this section. (B) A resolution of dissolution for an association shall state
both of the following: (1) That the association elects to be dissolved; (2) Any additional provision considered necessary with respect to the
proposed dissolution and winding up. (C) Before subscriptions for membership and any stock or other
ownership interest have been received, the incorporators or a majority of the
incorporators may adopt, by a writing signed by them, a resolution of
dissolution. (D) The directors may adopt a resolution of dissolution in the
following cases: (1) When the association has been adjudged bankrupt or has made a general
assignment for the benefit of creditors; (2) By leave of the court, when a receiver has been appointed in a general
creditors' suit or in any suit in which the affairs of the association are to
be wound up; (3) When substantially all of the assets have been sold at judicial sale
or otherwise; (4) When the articles of incorporation have been canceled for failure to
file annual franchise or excise tax returns or for failure to pay franchise or
excise taxes and the association has not been reinstated or does not desire to
be reinstated; (5) When the period of existence of the association specified in its
articles has expired. (E) At a meeting held for such purpose, the members may adopt a
resolution of dissolution by the affirmative vote of sixty per cent of the
member votes cast on such the proposal or, if the articles provide or permit, by
the affirmative vote of a greater or lesser proportion, though not less than a
majority, of such the voting power, of any particular class as is required by the
articles of incorporation. Notice of the meeting of the members shall be
given to all members and stockholders whether or not entitled to vote. (F) Upon the adoption of a resolution of dissolution, a
certificate shall be filed with the secretary of state, on a form prescribed
by the secretary of state,
stating all of the following: (1) The name of the association; (2) A statement that a resolution of dissolution has been adopted, its
manner of adoption, and, in the case of its adoption by the incorporators or
directors, a statement of the basis for such adoption; (3) The place in this state where the association's principal office place of business is
located; (4) The names and addresses of the association's directors and officers,
or if the resolution of dissolution is adopted by the incorporators, the names
and addresses of the incorporators; (5) The name and address of the association's statutory agent. (G) Such The certificate described in division (F) of this section shall be signed as follows: (1) When the resolution of dissolution is adopted by the incorporators,
the
certificate shall be signed by not less than a majority of the incorporators; (2) When the resolution is adopted by the directors or by the members, the
certificate shall be signed by any authorized officer. However, if no
authorized officer
executes and files such the certificate within thirty days after the adoption of
the
resolution or upon any date specified in the resolution as the date upon which
such the certificate is to be filed or upon the expiration of any period specified
in the resolution as the period within which such the certificate is to be filed,
whichever is latest, the certificate of dissolution may be signed by any three
members, or if there are less than three members, then by all of the members,
and shall set forth a statement that the persons signing the certificate are
members and are filing the certificate because of the failure of an authorized
officer
to do so. (H) A certificate of dissolution, filed with the secretary of
state, shall be accompanied by all of the following: (1) An affidavit of one or more of the persons executing the certificate
of dissolution or of any authorized officer of the association containing a
statement of
the counties, if any, in this state in which the association has personal
property or a statement that the association is of a type required to pay
personal property taxes to state authorities only; (2) A receipt, certificate, or other evidence showing the payment of all
franchise, sales, use, and highway use taxes accruing up to the date of such
the filing, or that such payment adequately has been adequately guaranteed; (3) A receipt, certificate, or other evidence showing the payment of all
personal property taxes accruing up to the date of such the filing; (4) A receipt, certificate, or other evidence from the
director of job and family services showing
that all contributions due from the association as
an employer have been paid, or that such payment adequately has been adequately
guaranteed, or that the association is not subject to such contributions; (5) A receipt, certificate, or other evidence from the bureau of workers'
compensation showing that all premiums due from the association as an employer
have been paid, or that such payment adequately has been adequately guaranteed, or that
the association is not subject to such premium payments; (6) In lieu of the receipt, certificate, or other evidence described in
division (H)(2), (3), (4), or (5) of this section, an affidavit of
one or more persons executing the certificate of dissolution or of any
authorized officer
of the association containing a statement of the date upon which the
particular
department, agency, or authority was advised in writing of the scheduled date
of filing of the certificate of dissolution and was advised in writing of the
acknowledgment by the association of the applicability of section 1729.25
of the Revised Code. (I) Upon the filing of a certificate of dissolution and the
accompanying documents required by division (H) of this section, the
association shall be dissolved.
Sec. 1729.56. Following the filing of the certificate of dissolution, the
directors, members, or the incorporators who filed the certificate, as the case may be,
shall cause a notice of voluntary dissolution to be published once a week on
the same day of each week for two successive weeks, in a newspaper published
and of general circulation in the county in which the principal office place of business of the
association was to be or is located, and shall cause written notice of
dissolution to be given to all known creditors of, and to all known claimants
against, the dissolved association.
Sec. 1729.58. (A) When an association is dissolved voluntarily,
when the articles of incorporation of an association have been canceled, when
a final order of a court of common pleas is made dissolving an association
under section 1729.59 of the Revised Code, or when the period of existence of
the association
specified in its articles of incorporation has expired, the association shall
cease to carry on business and shall do only such acts as are required to wind
up its affairs, or to obtain reinstatement of the articles in accordance with
section 1729.11 of the Revised Code. (B) Any claim existing or action or proceeding pending by or
against the association or which would have accrued against it may be
prosecuted to judgment, with right of appeal as in other cases, but any
proceeding, execution, or process, or the satisfaction or performance of any
order, judgment, or decree, may be stayed as provided in section 1729.59 of the Revised Code. (C) Any process, notice, or demand against the association may be
served by delivering a copy to an officer, director, liquidator, or person
having charge of its assets or, if no such person can be found, to the
statutory agent. (D) The directors of the association or their
successors shall act as a the board of directors in accordance with the articles
of incorporation and bylaws until the affairs of the association are
completely wound up. Subject to the orders of courts of this state having
jurisdiction over the association, the directors shall proceed as speedily as
is practicable to a complete winding up of the affairs of the association and,
to the extent necessary or expedient to that end, shall exercise all the
authority of the association. Without limiting the generality of such
authority, the directors may fill vacancies,; elect officers,; carry out
contracts of the association,; make new contracts,; borrow money,; mortgage or
pledge the property of the association as security,; sell its assets at public
or private sale,; make conveyances in the association's name,; lease real estate
for any term, including ninety-nine years renewable forever,; settle or
compromise claims in favor of or against the association,; appoint or employ one or more
persons as liquidators to wind up the affairs of the association with such
authority as the directors see fit to grant,; cause the title to any of the
assets of the association to be conveyed to such liquidators for that purpose,;
apply assets to the payment of obligations,; and, after paying or adequately
providing for the payment of all known obligations of the association,
distribute the remainder of the assets either in cash or in kind among the
members, patrons, and stockholders according to their respective rights and
interests. In addition, the directors may perform all other acts necessary or
expedient to the winding up of the affairs of the association. (E) The directors, or any liquidator to whom the directors grant such authority, in the course of winding up the association's affairs, shall apply the assets of the association in the following order: (1) To expenses incidental to winding up the association's affairs; (2) To all legally enforceable liabilities and obligations of the association due claimants and creditors; (3) To the stockholders, members, and patrons of the association as provided in the association's articles of incorporation or bylaws. (F) Without limiting the authority of the directors, any action
within the purview of this section that is authorized or approved at a meeting
of the members by sixty per cent of the member votes cast thereon shall be
conclusive for all purposes upon all members, patrons, and stockholders of the
association. (F)(G) All deeds and other instruments of the association shall be
in the name of the association and shall be executed, acknowledged, and
delivered by the officers appointed by the directors.
(G)(H) At any time during the winding up of its affairs, the
association by its directors may make application to the court of common pleas
of the county in this state in which the principal office place of business of the association
is located to have the winding up continued under supervision of the court, as
provided in section 1729.59 of the Revised Code. However, if the association has no principal place of business in this state, the application described in this division may be made to a court of common pleas in the county in this state where the statutory agent resides.
Sec. 1729.59. (A) Without limiting the generality of its
authority and subject to division (B) of this section, the court of common pleas of the county in this state in which is
located the principal office place of business of a voluntarily dissolved association or of an
association whose articles have been canceled or whose period of existence has
expired, upon the complaint of the association, or a majority of the
directors, or ten per cent of the members or twenty members, whichever is
less, and upon such notice to all the directors and such other persons
interested as the court considers proper, at any time may order and adjudge
any of the following matters: (1) The presentation and proof of all claims and demands against the
association and of all rights, interests, or liens in or on any of its
property; the fixing of the time and the manner in which such proof shall be
made and the person to whom such presentation shall be made; and the barring
from participation in any distribution of assets of all persons failing to
make
and present proofs as required by the order of the court; (2) The stay of the prosecution of any proceeding against the association
or involving any of its property, and; the requirement that the parties to the
proceeding present and prove their claims, demands, rights, interests, or
liens at the time and in the manner required of creditors or others; or the
grant of leave to bring or maintain an independent proceeding to enforce
liens; (3) The settlement or determination of all claims of every nature against
the association or any of its property; the determination of the assets
required to be retained to pay or provide for the payment of such claims or
any claim; the determination of the assets available for distribution among
and rights of members, patrons, and stockholders; and the making of new
parties to the proceeding so far as the court considers proper for the
determination of all matters; (4) The presentation and filing of intermediate and final accounts of the
directors or of the liquidators and hearings on them; the allowance,
disallowance, or settlement of the accounts; and the discharge of the
directors, the liquidators, or any of them from their duties and liabilities; (5) The appointment of a special master commissioner to hear and determine
any such matters with such authority as the court considers proper; (6) The filling of any vacancies in the number of directors or liquidators
when the directors are unable to act on the vacancies for want of a quorum or
for any other reason; (7) The appointment of a receiver, in accordance with the usage of a court
in equitable matters, to wind up the affairs of the association, to take
custody of any of its property, or for any other purpose; (8) The issuance or entry of any injunction or any other order that the
court considers proper in the administration of the trust involved in the
winding up of the affairs of the association and the giving of notice of the
entry of injunction or order; (9) The allowance and payment of compensation to the directors or any of
them, to liquidators, to a receiver, to the attorney for the complainant, or
to any person properly rendering services beneficial to the association or to
those interested in it; (10) The entry of a judgment or decree that, if it so provides, may
operate as the deed or other instrument ordered to be executed, or the
appointment of a master to execute such deed or instrument in the name of the
association with the same effect as if executed by an authorized officer
pursuant to authority conferred by the directors or the members, patrons, and
stockholders of the association, whenever there is no officer or agent
competent to execute such deed or instrument, whenever the association or its
officers do not perform or comply with a judgment or decree of court, or
whenever the court considers it proper. (B) If the association has no principal place of business in this state, without limiting the generality of its authority, the court of common pleas in the county in this state where the statutory agent resides may order and adjudge the matters described in division (A) of this section. (C) A judicial proceeding under this section concerning the
winding up of the affairs of an association is a special proceeding, and final
orders in the proceeding may be vacated, modified, or reversed on appeal
pursuant to the Rules of Appellate Procedure and,
to the extent not in conflict with those rules, Chapter 2505. of the Revised Code.
Sec. 1729.61. (A) An association may be dissolved judicially and
its affairs wound up by an order of the court of common pleas of the county in
this state in which the association has its principal office place of business, in an action
brought by the members having sixty per cent of the voting power of the
association on such proposal, or the holders of such a lesser proportion as are
entitled by the articles of incorporation to dissolve the association
voluntarily, when it is established that it is beneficial to the members,
patrons, and stockholders that the association be judicially dissolved. However, if the association has no principal place of business in this state, the court of common pleas in the county in this state where the statutory agent resides may dissolve and wind up the affairs of an association in accordance with this division. (B) A complaint for judicial dissolution shall be verified by any
of the complainants and shall set forth facts showing that the case is as
specified in this section. Unless the complainants set forth in the complaint
that they are unable to annex a list of members, patrons, or stockholders, a
schedule shall be annexed to the complaint setting forth the name and address
of each member, patron, and stockholder, if it is known, or the fact that it
is
not known. (C) Upon the filing of a complaint for judicial dissolution, the
court with which it is filed shall have power to issue injunctions,; to appoint
a receiver with such authority and duties as the court from time to time may
direct,; to take such other proceedings as may be necessary to protect the
property or the rights of the members, patrons, and stockholders,; and to carry
on the business of the association until a full hearing can be conducted.
Upon or after the filing of a complaint for judicial dissolution, the court,
by injunction or order, may stay the prosecution of any proceeding against the
association or involving any of its property and require the parties to the
proceeding to present and prove their claims, demands, rights, interests, or
liens, at the time and in the manner required of creditors or others. The
court may refer the complaint to a special master commissioner. (D) After a hearing upon such notice as the court may direct directs to
be given to all parties to the proceeding and to any other parties in interest
designated by the court, a final order based either upon the evidence, or upon
the report of the special master commissioner if one has been appointed, shall
be made dissolving the association or dismissing the complaint. An order or
judgment for the judicial dissolution of an association shall contain a
concise statement of the proceedings leading up to the order or judgment, the
name of the association, the place in this state where its principal office place of business is
located, the names and addresses of its directors and officers, the name and
address of a statutory agent, and, if desired, such other provisions with
respect to the judicial dissolution and winding up as are considered necessary
or desirable. A certified copy of such the order shall be filed in the office of
the secretary of state, whereupon the association shall be dissolved. To the
extent consistent with orders entered in such proceeding, the effect of such
judicial dissolution shall be the same as in the case of voluntary
dissolution, and the provisions of sections 1729.58, 1729.59, and 1729.60 of
the Revised Code
relating to the authority and duties of directors during the winding up of the
affairs of an association dissolved voluntarily, with respect to the
jurisdiction of courts over the winding up of the affairs of an association,
and with respect to receivers for winding up the affairs of an association,
shall be applicable to associations judicially dissolved. (E) A proceeding under this section for judicial dissolution of
an association is a special proceeding, and final orders in it may be vacated,
modified, or reversed on appeal pursuant to the Rules of
Appellate Procedure and, to the extent not in conflict with
those rules, Chapter 2505. of the Revised Code.
Sec. 1729.69. (A) No handler shall commit
an unfair
marketing practice, as defined in division
(B) of this section, whenever a
marketing cooperative has been authorized by its members to
bargain on behalf of its members for sales contracts with the
handler and any of the
following conditions exist: (1) Members of the marketing cooperative are obligated to produce and
deliver agricultural products or produce under sales contracts negotiated by
the marketing association cooperative. (2) Members of the marketing cooperative represent, on the yearly average
calculated over the immediate two preceding calendar years, at least fifty-one
per cent of the producers who delivered such agricultural products or produce to the
specified facility of the handler under sales contracts. (3) Members of the marketing cooperative delivered, under sales contracts,
on the yearly average calculated over the immediate two preceding calendar
years, at least fifty per cent of the total amount of such agricultural
products delivered to such the specified facility of the handler under sales contracts. (4) The marketing cooperative, if requested by the handler, presents to
the
handler copies of the agreements with its members authorizing the marketing
cooperative to bargain on behalf of its members for sales contracts for the
agricultural products that are the subject of the sales contract under
negotiation. (B) For purposes of this
section, it is an unfair marketing practice if either of the following
applies: (1) If the handler or the marketing cooperative that is bargaining
fails to bargain in good faith in negotiating sales contracts for agricultural
products to be delivered to a facility of the handler; (2) If a handler enters into a sales contract directly with a producer,
pertaining to agricultural products to be delivered to the same facility, with
the intent to cause the marketing cooperative to fail to meet the conditions
set forth in divisions (A)(2) and (3) of this section.
Sec. 1729.85. Membership stock and patronage stock of an association a cooperative are
not to be considered securities under
Chapter 1707. of the Revised Code.
Section 2. That existing sections 1729.01, 1729.02, 1729.03, 1729.04, 1729.06, 1729.07, 1729.08, 1729.11, 1729.16, 1729.18, 1729.19, 1729.22, 1729.23, 1729.26, 1729.28, 1729.35, 1729.36, 1729.38, 1729.42, 1729.46, 1729.47, 1729.49, 1729.55, 1729.56, 1729.58, 1729.59, 1729.61, 1729.69, and 1729.85 of the Revised Code are hereby repealed.
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