As used in this chapter:
(1) “Anniversary” means that day each year exactly one or more
years after:
(a) The date of filing by the Secretary of State of the articles of
incorporation in the case of a domestic corporation.
(b) The date of filing by the Secretary of State of an application
for authority to transact business in the case of a foreign corporation.
(2) “Articles of incorporation” include amended and restated
articles of incorporation, articles of conversion and articles of merger.
(3) “Authorized shares” means the shares of all classes a domestic
or foreign corporation is authorized to issue.
(4) “Conspicuous” means so written that a reasonable person against
whom the writing is to operate should have noticed it. For example,
printing in italics, boldface or contrasting color, typing in capitals or
underlined is conspicuous.
(5) “Corporation” or “domestic corporation” means a corporation for
profit, which is not a foreign corporation, incorporated under or subject
to the provisions of this chapter.
(6) “Delivery” means any method of delivery used in conventional
commercial practice, including delivery by hand, mail, commercial
delivery and electronic transmission.
(7) “Distribution” means a direct or indirect transfer of money or
other property, except of a corporation’s own shares, or incurrence of
indebtedness by a corporation to or for the benefit of its shareholders
in respect of any of its shares. A distribution may be in the form of a
declaration or payment of a dividend, a purchase, redemption or other
acquisition of shares, a distribution of indebtedness, or otherwise.
(8) “Domestic limited liability company” means an entity that is an
unincorporated association having one or more members and that is
organized under ORS chapter 63.
(9) “Domestic nonprofit corporation” means a corporation not for
profit incorporated under ORS chapter 65.
(10) “Domestic professional corporation” means a corporation
organized under ORS chapter 58 for the purpose of rendering professional
services and for the purposes provided under ORS chapter 58.
(11) “Electronic signature” has the meaning given that term in ORS
84.004.
(12) “Electronic transmission” means any process of communication
that does not directly involve the physical transfer of paper and that is
suitable for the retention, retrieval and reproduction of information by
the recipient.
(13) “Employee” includes an officer but not a director. A director
may accept duties that make the director also an employee.
(14) “Entity” includes a corporation, foreign corporation,
nonprofit corporation, profit and nonprofit unincorporated association,
business trust, estate, partnership, trust, two or more persons having a
joint or common economic interest, any state, the United States and any
foreign government.
(15) “Foreign corporation” means a corporation for profit
incorporated under a law other than the law of this state.
(16) “Foreign limited liability company” means an entity that is an
unincorporated association organized under the laws of a state other than
this state, under the laws of a federally recognized Indian tribe or
under the laws of a foreign country and that is organized under a statute
under which an association may be formed that affords to each of its
members limited liability with respect to liabilities of the entity.
(17) “Foreign nonprofit corporation” means a corporation not for
profit organized under the laws of a state other than this state.
(18) “Foreign professional corporation” means a professional
corporation organized under the laws of a state other than this state.
(19) “Governmental subdivision” includes an authority, county,
district and municipality.
(20) “Includes” denotes a partial definition.
(21) “Individual” means a natural person. “Individual” includes the
estate of an incompetent individual or a deceased individual.
(22) “Means” denotes an exhaustive definition.
(23) “Office,” when used to refer to the administrative unit
directed by the Secretary of State, means the office of the Secretary of
State.
(24) “Person” includes individual and entity.
(25) “Principal office” means the office, in or out of this state,
where the principal executive offices of a domestic or foreign
corporation are located and designated in the annual report or
application for authority to transact business in this state.
(26) “Proceeding” includes civil, criminal, administrative and
investigatory action.
(27) “Record date” means the date established under this chapter on
which a corporation determines the identity of its shareholders and their
shareholdings for purposes of this chapter. The determinations shall be
made as of the close of business on the record date unless another time
for doing so is specified when the record date is fixed.
(28) “Shares” means the units into which the proprietary interest
in a corporation are divided.
(29) “Shareholder” means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on
file with a corporation.
(30) “Signature” includes any manual, facsimile, conformed or
electronic signature.
(31) “State,” when referring to a part of the United States,
includes a state, commonwealth, territory and insular possession of the
United States and its agencies and governmental subdivisions.
(32) “Subscriber” means a person who subscribes for shares in a
corporation, whether before or after incorporation.
(33) “United States” includes a district, authority, bureau,
commission, department and any other agency of the United States.
(34) “Voting group” means all shares of one or more classes or
series that under the articles of incorporation or this chapter are
entitled to vote and be counted together collectively on a matter at a
meeting of shareholders. All shares entitled by the articles of
incorporation or this chapter to vote generally on the matter are for
that purpose a single voting group. [1987 c.414 §64; 1989 c.1040 §2; 1999
c.362 §3; 1999 c.371 §2; 2001 c.104 §16; 2001 c.315 §32; 2003 c.80 §1;
2005 c.107 §1](Filing Documents) (1) A document must satisfy the
requirements of this section except as any other section modifies these
requirements, to be entitled to filing by the Secretary of State.
(2) This chapter must require or permit filing the document with
the office.
(3) The document shall contain the information required by this
chapter. It may contain other information as well.
(4) The document must be legible.
(5) The document must be in the English language. The certificate
of existence required of foreign corporations need not be in English if
accompanied by a reasonably authenticated English translation.
(6) The document must be executed:
(a) By the chair of the board of directors of a domestic or foreign
corporation, its president or another of its officers;
(b) If directors have not been selected or before the
organizational meeting, by an incorporator; or
(c) If the corporation is in the hands of a receiver, trustee or
other court-appointed fiduciary, by that fiduciary, receiver or trustee.
(7) The person executing the document shall state beneath or
opposite the signature the name of the person and the capacity in which
the person signs. The document may, but is not required to contain:
(a) The corporate seal;
(b) An attestation by the secretary or an assistant secretary; or
(c) An acknowledgment, verification or proof.
(8) If the Secretary of State has prescribed a mandatory form for
the document under ORS 60.016, the document must be in or on the
prescribed form.
(9) The document must be delivered to the Office of the Secretary
of State and must be accompanied by the required fees.
(10) Delivery of a document to the office is accomplished only when
the document is actually received by the office. [1987 c.52 §4; 1989
c.1040 §3; 1999 c.486 §5] The
Secretary of State shall collect the fees described in ORS 56.140 for
each document delivered for filing under this chapter and for process
served on the secretary under this chapter. The secretary may collect the
fees described in ORS 56.140 for copying any public record under this
chapter, certifying the copy or certifying to other facts of record under
this chapter. [1987 c.52 §6; 1989 c.383 §3; 1989 c.1040 §36; 1991 c.132
§3; 1999 c.362 §§4,4a] (1) Except as provided
in subsection (2) of this section and ORS 60.014 (3), a document accepted
for filing is effective on the date it is filed by the Secretary of State
and at the time, if any, specified in the document as its effective time
or at 12:01 a.m. on that date if no effective time is specified.
(2) If a document specifies a delayed effective time and date, the
document becomes effective at the time and date specified. If a document
specifies a delayed effective date but no time, the document becomes
effective at 12:01 a.m. on that date. A delayed effective date for a
document may not be later than the 90th day after the date it is filed.
[1987 c.52 §7; 1989 c.1040 §4] (1) A domestic or foreign
corporation may correct a document filed by the Secretary of State, other
than an annual report, if the document contains an incorrect statement or
was defectively executed, attested, sealed, verified or acknowledged.
(2) A domestic or foreign corporation shall correct a document by
delivering articles of correction to the office. The articles shall
include the following:
(a) A description of the document, including its filing date, or a
copy of the document.
(b) The incorrect statement and the reason it is incorrect, or a
description of the manner in which the execution, attestation, seal,
verification or acknowledgment is defective.
(c) A correction of the incorrect statement or defective execution,
attestation, seal, verification or acknowledgment.
(3) Articles of correction are effective on the effective date of
the document they correct except as to persons relying on the uncorrected
document and adversely affected by the correction. As to those persons,
articles of correction are effective when filed. [1987 c.52 §8] Upon request, the Secretary of State may furnish
forms for documents required or permitted to be filed by this chapter.
The Secretary of State may by rule require the use of the forms. [1987
c.52 §5; 1995 c.215 §6] (1) If a document
delivered to the Office of the Secretary of State for filing satisfies
the requirements of ORS 60.004, the Secretary of State shall file it.
(2) The Secretary of State files a document by indicating thereon
that it has been filed by the Secretary of State and the date of filing.
After filing a document, except as provided in ORS 60.114, 60.117,
60.671, 60.674, 60.724, 60.727 and 60.787, the Secretary of State shall
return an acknowledgment of filing to the domestic or foreign corporation
or its representative.
(3) If the Secretary of State refuses to file a document, the
Secretary of State shall return it to the domestic or foreign corporation
or its representative within 10 business days after the document was
delivered together with a brief written explanation of the reason for the
refusal.
(4) The Secretary of State’s duty to file documents under this
section is ministerial. The Secretary of State is not required to verify
or inquire into the legality or truth of any matter included in any
document delivered to the office for filing. The Secretary of State’s
filing or refusing to file a document does not:
(a) Affect the validity or invalidity of the document in whole or
part; or
(b) Relate to the correctness or incorrectness of information
contained in the document.
(5) The Secretary of State’s refusal to file a document does not
create a presumption that the document is invalid or that information
contained in the document is incorrect. [1987 c.52 §9; 1989 c.1040 §5;
1999 c.486 §6]
If the Secretary of State refuses to file a document delivered to the
office for filing, the domestic or foreign corporation, in addition to
any other legal remedy which may be available, shall have the right to
appeal from such order pursuant to the provisions of ORS chapter 183.
[1987 c.52 §10] (1) A
certificate attached to a copy of a document filed by the Secretary of
State, bearing the Secretary of State’s signature, which may be in
facsimile, is conclusive evidence that the original document or a
facsimile thereof, is on file with the office.
(2) The provisions of ORS 56.110 shall apply to all documents filed
pursuant to this chapter. [1987 c.52 §11] (1) Anyone may
apply to the Secretary of State to furnish a certificate of existence for
a domestic corporation or a certificate of authorization for a foreign
corporation.
(2) A certificate of existence or authorization when issued means
that:
(a) The domestic corporation’s corporate name or the foreign
corporation’s corporate name is registered in this state;
(b) The domestic corporation is duly incorporated under the law of
this state or the foreign corporation is authorized to transact business
in this state;
(c) All fees payable to the Secretary of State under this chapter
have been paid, if nonpayment affects the existence or authorization of
the domestic or foreign corporation;
(d) An annual report required by ORS 60.787 has been filed by the
Secretary of State within the preceding 14 months; and
(e) Articles of dissolution or an application for withdrawal have
not been filed by the Secretary of State.
(3) A person may apply to the Secretary of State to issue a
certificate covering any fact of record.
(4) Subject to any qualification stated in the certificate, a
certificate of existence or authorization issued by the Secretary of
State may be relied upon as conclusive evidence that the domestic or
foreign corporation is in existence or is authorized to transact business
in this state. [1987 c.52 §12](Secretary of State) The Secretary of State has the power reasonably
necessary to perform the duties required of the Secretary of State by
this chapter. [1987 c.52 §13](Notice) (1) Except as provided in subsection (3) of this
section, notice under this chapter shall be in writing unless oral notice
is specifically permitted under the circumstances by the articles of
incorporation or bylaws. Notice by electronic transmission, other than
voice mail, is written notice.
(2)(a) Notice may be communicated in person, by mail or other
method of delivery, by telephone or by voice mail or other electronic
transmission.
(b) If a form of notice described in paragraph (a) of this
subsection is impracticable, notice may be communicated by a newspaper of
general circulation in the area where published, or by radio, television
or other form of public broadcast communication.
(3) All notices required by this chapter by a corporation to its
shareholders shall be in writing. Written notice by a domestic or foreign
corporation to a shareholder or director, if in a comprehensible form, is
effective:
(a) Upon deposit in the United States mail if it is mailed postpaid
and is correctly addressed to the shareholder’s address shown in the
corporation’s current record of shareholders or the director’s address
shown in the corporation’s records;
(b) When electronically transmitted to the shareholder in a manner
authorized in writing by the shareholder; or
(c) When electronically transmitted to the director in a manner
authorized by the director.
(4) Written notice to a domestic or foreign corporation authorized
to transact business in this state may be addressed to its registered
agent at its registered office or to the domestic or foreign corporation
or its president or secretary at its principal office or mailing address
as shown in the records of the office.
(5) Except as provided in subsection (3) of this section, or unless
the articles of incorporation or bylaws provide otherwise for notices to
directors, written notice, if in a comprehensible form, is effective at
the earliest of the following:
(a) When received;
(b) Five days after its deposit in the United States mail, as
evidenced by the postmark, if mailed postpaid and correctly addressed; or
(c) On the date shown on the return receipt, if sent by registered
or certified mail, return receipt requested and the receipt is signed by
or on behalf of the addressee.
(6) Oral notice is effective when communicated if communicated in a
comprehensible manner.
(7) If this chapter prescribes notice requirements for particular
circumstances, those requirements govern. If articles of incorporation or
bylaws prescribe notice requirements, not inconsistent with this section
or other provisions of this chapter, those requirements govern. [1987
c.52 §14; 1989 c.1040 §6; 2003 c.80 §2]INCORPORATION One or more individuals 18 years of age or
older, a domestic or foreign corporation, a partnership or an association
may act as incorporators of a corporation by delivering articles of
incorporation to the office for filing. [1987 c.52 §15] (1) The articles of incorporation
shall set forth:
(a) A corporate name for the corporation that satisfies the
requirements of ORS 60.094;
(b) The number of shares the corporation is authorized to issue;
(c) The address, including street and number, and mailing address,
if different, of the corporation’s initial registered office and the name
of its initial registered agent at that office;
(d) The name and address of each incorporator; and
(e) A mailing address to which notices, as required by this
chapter, may be mailed until an address has been designated by the
corporation in its annual report.
(2) The articles of incorporation may set forth:
(a) The names of the initial directors;
(b) The addresses of the initial directors;
(c) Provisions regarding:
(A) The purpose or purposes for which the corporation is organized;
(B) Managing the business and regulating the affairs of the
corporation;
(C) Defining, limiting and regulating the powers of the
corporation, its board of directors and shareholders; and
(D) A par value for authorized shares or classes of shares;
(d) A provision eliminating or limiting the personal liability of a
director to the corporation or its shareholders for monetary damages for
conduct as a director, provided that no such provision shall eliminate or
limit the liability of a director for any act or omission occurring prior
to the date when such provision becomes effective and such provision
shall not eliminate or limit the liability of a director for:
(A) Any breach of the director’s duty of loyalty to the corporation
or its shareholders;
(B) Acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(C) Any unlawful distribution under ORS 60.367; or
(D) Any transaction from which the director derived an improper
personal benefit; and
(e) Any provision that under this chapter is required or permitted
to be set forth in the bylaws.
(3) The articles of incorporation need not set forth any of the
corporate powers enumerated in this chapter. [1987 c.52 §16; 1989 c.1040
§7; 1991 c.883 §1] (1) Unless a delayed effective date is
specified, the corporate existence begins when the articles of
incorporation are filed by the Secretary of State.
(2) The Secretary of State’s filing of the articles of
incorporation is conclusive proof that the incorporators satisfied all
conditions precedent to incorporation except in a proceeding by the state
to cancel or revoke the incorporation or involuntarily dissolve the
corporation. [1987 c.52 §17] All persons
purporting to act as or on behalf of a corporation, knowing there was no
incorporation, are jointly and severally liable for all liabilities
created while so acting. [1987 c.52 §18] (1) After incorporation, if
initial directors are named in the articles of incorporation, the initial
directors shall hold an organizational meeting at the call of a majority
of the directors to complete the organization of the corporation by
appointing officers, adopting bylaws and carrying on any other business
brought before the meeting.
(2) After incorporation, if initial directors are not named in the
articles, the incorporator or incorporators shall hold an organizational
meeting at the call of a majority of the incorporators to elect directors
and complete the organization of the corporation or to elect a board of
directors who shall complete the organization of the corporation.
(3) Action required or permitted by this chapter to be taken by
incorporators at an organizational meeting may be taken without a meeting
if the action taken is evidenced by one or more written consents
describing the action taken and signed by each incorporator.
(4) An organizational meeting may be held in or out of this state.
[1987 c.52 §19] (1) The incorporators or board of directors of a
corporation shall adopt initial bylaws for the corporation.
(2) The bylaws of a corporation may contain any provision for
managing the business and regulating the affairs of the corporation that
is not inconsistent with law or the articles of incorporation. [1987 c.52
§20] (1) Unless the articles of incorporation
provide otherwise, the board of directors of a corporation may adopt
bylaws to be effective only in an emergency defined in subsection (4) of
this section. The emergency bylaws, which are subject to amendment or
repeal by the shareholders, may contain all provisions necessary for
managing the corporation during the emergency, including:
(a) Procedures for calling a meeting of the board of directors;
(b) Quorum requirements for the meeting; and
(c) Designation of additional or substitute directors.
(2) All provisions of the regular bylaws consistent with the
emergency bylaws remain effective during the emergency. The emergency
bylaws are not effective after the emergency ends.
(3) Corporate action taken in good faith in accordance with the
emergency bylaws binds the corporation and may not be used to impose
liability on a corporate director, officer, employee or agent.
(4) An emergency exists for purposes of this section if a quorum of
the corporation’s directors cannot readily be assembled because of some
catastrophic event. [1987 c.52 §21]PURPOSES AND POWERS (1) Every corporation incorporated under this
chapter has the purpose of engaging in any lawful business unless a more
limited purpose is set forth in the articles of incorporation.
(2) A business that is subject to regulation under another statute
of this state may not be incorporated under this chapter if such business
is required to be organized under such other statute. [1987 c.52 §22;
1989 c.1040 §8] (1) Unless its articles of incorporation
provide otherwise, every corporation has perpetual duration and
succession in its corporate name.
(2) Unless its articles of incorporation provide otherwise, every
corporation has the same powers as an individual to do all things
necessary or convenient to carry out its business and affairs, including
without limitation, power to:
(a) Sue and be sued and complain and defend in its corporate name;
(b) Have a corporate seal, which may be altered at will, and use it
or a facsimile thereof, by impressing, affixing or reproducing it in any
other manner;
(c) Make and amend bylaws, not inconsistent with its articles of
incorporation or with the laws of this state for managing the business
and regulating the affairs of the corporation;
(d) Purchase, receive, lease or otherwise acquire, and own, hold,
improve, use and otherwise deal with real or personal property, or any
interest in property, wherever located;
(e) Sell, convey, mortgage, pledge, lease, exchange and otherwise
dispose of all or any part of its property;
(f) Purchase, receive, subscribe for, acquire, own, hold, vote,
use, sell, mortgage, lend, pledge or otherwise dispose of and deal in and
with shares or other interests in, or obligations of, any other entity;
(g) Make contracts and guarantees, incur liabilities, borrow money,
issue its notes, bonds and other obligations that may be convertible into
other securities of the corporation or include the option to purchase
other securities of the corporation and secure any of its obligations by
mortgage or pledge of any of its property, franchises or income;
(h) Lend money, invest and reinvest corporate funds and receive and
hold real and personal property as security for repayment;
(i) Be a promoter, partner, member, associate or manager of any
partnership, joint venture, trust or other entity;
(j) Conduct its business, locate offices and exercise the powers
granted by this chapter within or without this state;
(k) Elect directors and appoint officers, employees and agents of
the corporation;
(L) Define directors’, officers’, employees’ and agents’ duties,
fix their compensation and lend them money and credit;
(m) Pay pensions and establish pension plans, share option plans
and benefit or incentive plans for any or all of its current or former
directors, officers, employees and agents;
(n) Make donations for the public welfare or for charitable,
scientific or educational purposes;
(o) Transact any lawful business that will aid governmental policy;
and
(p) Make payment or donations or do any other act, not inconsistent
with law, that furthers the business and affairs of the corporation.
[1987 c.52 §23] (1) In anticipation of or during an
emergency defined in subsection (4) of this section, the board of
directors of a corporation may:
(a) Modify lines of succession to accommodate the incapacity of any
director, officer, employee or agent; and
(b) Relocate the principal office, designate alternative principal
offices or regional offices or authorize the officers to do so.
(2) During an emergency defined in subsection (4) of this section,
unless emergency bylaws provide otherwise:
(a) Notice of a meeting of the board of directors need be given
only to those directors whom it is practicable to reach and may be given
in any practicable manner, including by publication and radio.
(b) One or more officers of the corporation present at a meeting of
the board of directors may be deemed to be directors for the meeting, in
order of the officer’s rank and within the same rank in order of
seniority, as necessary to achieve a quorum.
(3) Corporate action taken in good faith during an emergency under
this section to further the ordinary business affairs of the corporation:
(a) Binds the corporation; and
(b) May not be used to impose liability on a corporate director,
officer, employee or agent.
(4) An emergency exists for purposes of this section if a quorum of
the corporation’s directors cannot readily be assembled because of some
catastrophic event. [1987 c.52 §24] (1) Except as provided in
subsection (2) of this section, the validity of corporate action may not
be challenged on the ground that the corporation lacks or lacked power to
act.
(2) A corporation’s power to act may be challenged:
(a) In a proceeding by a shareholder against the corporation to
enjoin the act;
(b) In a proceeding by the corporation, directly, derivatively, or
through a receiver, trustee or other legal representative against an
incumbent or former director, officer, employee or agent of the
corporation; or
(c) In a proceeding by the Attorney General under ORS 60.661.
(3) In a shareholder’s proceeding under subsection (2)(a) of this
section to enjoin an unauthorized corporate act, the court may enjoin or
set aside the act, if equitable and if all affected persons are parties
to the proceeding, and may award damages for loss other than anticipated
profits suffered by the corporation or another party because of enjoining
the unauthorized act. [1987 c.52 §25]NAME (1) A corporate name shall contain one or
more of the words “corporation,” “incorporated,” “company” or “limited”
or an abbreviation of one or more of those words.
(2) A corporate name shall not contain the word “cooperative.”
(3) A corporate name shall be written in the alphabet used to write
the English language and may include Arabic and Roman numerals and
incidental punctuation.
(4) A corporate name shall be distinguishable upon the records of
the office from any other corporate name, professional corporate name,
nonprofit corporate name, cooperative name, limited partnership name,
business trust name, reserved name, registered corporate name or assumed
business name of active record with the office.
(5) The corporate name need not satisfy the requirement of
subsection (4) of this section if the applicant delivers to the office a
certified copy of a final judgment of a court of competent jurisdiction
that finds that the applicant has a prior or concurrent right to use the
corporate name in this state.
(6) The provisions of this section do not prohibit a corporation
from transacting business under an assumed business name.
(7) The provisions of this section do not:
(a) Abrogate or limit the law governing unfair competition or
unfair trade practices; or
(b) Derogate from the common law, the principles of equity or the
statutes of this state or of the United States with respect to the right
to acquire and protect trade names. [1987 c.52 §26] (1) A person may apply to the office to
reserve a corporate name. The application must set forth the name and
address of the applicant and the name proposed to be reserved.
(2) If the Secretary of State finds that the corporate name applied
for conforms to ORS 60.094, the Secretary of State shall reserve the name
for the applicant for a 120-day period.
(3) A person may transfer the reservation of a corporate name to
another person by delivering to the office a notice of the transfer
executed by the person for whom the name was reserved and specifying the
name and address of the transferee. [1987 c.52 §27] (1) A foreign corporation may apply to the
office to register its corporate name.
(2) The application must set forth the corporate name, the state or
country of its incorporation, the date of its incorporation and a brief
description of the nature of the business in which it is engaged and a
statement that it is not carrying on or doing business in the State of
Oregon. The application must be accompanied by a certificate of existence
or a document of similar import current within 60 days of delivery, duly
authenticated by the official having custody of corporate records in the
state or country under whose law it is incorporated.
(3) If the Secretary of State finds that the name conforms to ORS
60.094 the Secretary of State shall register the name effective for one
year. [1987 c.52 §28]OFFICE AND AGENT (1) Each corporation
shall continuously maintain in this state a registered agent and
registered office that may be, but need not be, the same as any of its
places of business.
(2) A registered agent shall be:
(a) An individual who resides in this state and whose business
office is identical to the registered office;
(b) A domestic corporation, domestic limited liability company,
domestic professional corporation or domestic nonprofit corporation whose
business office is identical to the registered office; or
(c) A foreign corporation, foreign limited liability company,
foreign professional corporation or foreign nonprofit corporation
authorized to transact business in this state whose business office is
identical to the registered office. [1987 c.52 §29; 2001 c.315 §24] (1) A
corporation may change its registered office or registered agent by
delivering to the office of the Secretary of State for filing a statement
of change that sets forth:
(a) The name of the corporation;
(b) If the registered office is to be changed, the address
including street and number of the new registered office;
(c) If the registered agent is to be changed, the name of the new
registered agent and that the new agent has consented to the appointment;
and
(d) That after the change or changes are made the street addresses
of its registered office and the business office of its registered agent
will be identical.
(2) If a registered agent changes the street address of the agent’s
business office, the registered agent shall change the street address of
the registered office of the corporation for which the agent is the
registered agent by notifying the corporation in writing of the change
and signing, either manually or in facsimile, and delivering to the
office of the Secretary of State a statement that complies with the
requirements of subsection (1) of this section and recites that the
corporation has been notified of the change.
(3) The filing of the statement by the Secretary of State shall
terminate the existing registered office or agent, or both, on the
effective date of the filing and establish the newly appointed registered
office or agent, or both, as that of the corporation. [1987 c.52 §30] (1) A registered agent may
resign as agent upon delivering a signed statement to the office and
giving notice in the form of a copy of the statement to the corporation.
The statement may include a statement that the registered office is also
discontinued.
(2) Upon delivery of the signed statement, the Secretary of State
shall file the resignation statement. The copy of the statement given to
the corporation under subsection (1) of this section shall be addressed
to the corporation at the corporation’s mailing address or the
corporation’s principal office as shown by the records of the office of
the Secretary of State.
(3) The agency appointment is terminated and the registered office
discontinued, if so provided, on the 31st day after the date on which the
statement was filed by the Secretary of State, unless the corporation
shall sooner appoint a successor registered agent as provided in ORS
60.114, thereby terminating the capacity of such agent. [1987 c.52 §31;
1993 c.190 §1] (1) The registered agent appointed
by a corporation shall be an agent of the corporation upon whom any
process, notice or demand required or permitted by law to be served upon
the corporation may be served.
(2) The Secretary of State shall be an agent of a corporation
including a dissolved corporation upon whom any such process, notice or
demand may be served whenever the corporation fails to appoint or
maintain a registered agent in this state or whenever the corporation’s
registered agent cannot with reasonable diligence be found at the
registered office.
(3) Service shall be made on the Secretary of State by:
(a) Serving the Secretary of State or a clerk on duty at the office
a copy of the process, notice or demand, with any papers required by law
to be delivered in connection with the service, and the required fee for
each party being served or by mailing to the office a copy of the
process, notice or demand and the required fee for each party being
served by certified or registered mail;
(b) Transmittal by the person instituting the proceedings of notice
of the service on the Secretary of State and copy of the process, notice
or demand and accompanying papers to the corporation being served by
certified or registered mail:
(A) At the last registered office of the corporation as shown by
the records on file in the office of the Secretary of State, and
(B) At such address the use of which the person initiating the
proceedings knows or, on the basis of reasonable inquiry, has reason to
believe is most likely to result in actual notice; and
(c) Filing with the appropriate court or other body, as part of the
return of service, the return receipt of mailing and an affidavit of the
person initiating the proceedings stating that this section has been
complied with.
(4) The Secretary of State shall keep a record of all processes,
notices and demands served upon the Secretary of State under this section.
(5) After completion of initial service upon the Secretary of
State, no additional documents need be served upon the Secretary of State
to maintain jurisdiction in the same proceeding or to give notice of any
motion or provisional process.
(6) Nothing contained in this section shall limit or affect the
right to serve any process, notice or demand required or permitted by law
to be served upon a corporation in any other manner now or hereafter
permitted by law, or enlarge the purposes for which service on the
Secretary of State is permitted where such purposes are limited by other
provisions of law. [1987 c.52 §32]SHARES AND DISTRIBUTIONS(Shares) (1) The articles of incorporation must
prescribe the classes of shares and the number of shares of each class
that the corporation is authorized to issue. If more than one class of
shares is authorized, the articles of incorporation must prescribe a
distinguishing designation for each class, and prior to the issuance of
shares of a class, the preferences, limitations and relative rights of
that class must be described in the articles of incorporation. All shares
of a class must have preferences, limitations and relative rights
identical to those of other shares of the same class except to the extent
otherwise permitted by ORS 60.134 and 60.157.
(2) If the articles of incorporation authorize only one class of
shares, that class has unlimited voting rights and rights to receive the
net assets of the corporation upon dissolution. If the articles of
incorporation authorize more than one class of shares, then one or more
classes of shares must together have unlimited voting rights, and one or
more classes of shares which may be the same class or classes as those
with voting rights, must together be entitled to receive the net assets
of the corporation upon dissolution.
(3) The articles of incorporation may authorize one or more classes
of shares that:
(a) Have special, conditional or limited voting rights, or no
voting rights, except to the extent prohibited by this chapter;
(b) Are redeemable or convertible as specified in the articles of
incorporation:
(A) At the option of the corporation, the shareholder or another
person or upon the occurrence of a designated event;
(B) For cash, indebtedness, securities or other property; or
(C) In a designated amount or in an amount determined in accordance
with a designated formula or by reference to extrinsic data or events;
(c) Entitle the holders to distributions calculated in any manner,
including dividends that may be cumulative, noncumulative or partially
cumulative; or
(d) Have preference over any other class of shares with respect to
distributions, including dividends and distributions upon the dissolution
of the corporation.
(4) The description of the designations, preferences, limitations
and relative rights of share classes in subsection (3) of this section is
not exhaustive. [1987 c.52 §33; 1989 c.4 §9; 1989 c.1040 §9]
(1) If the articles of incorporation so provide, the board of directors
may determine, in whole or part, the preferences, limitations and
relative rights, subject to the requirements of ORS 60.131, of any class
of shares before the issuance of any shares of that class or one or more
series within a class before the issuance of any shares of that series.
(2) Each series of a class must be given a distinguishing
designation.
(3) All shares of a series must have preferences, limitations and
relative rights identical with those of other shares of the same series
and, except to the extent otherwise provided in the description of the
series, of those of other series of the same class.
(4) Before issuing any shares of a class or series created under
this section, the corporation must deliver to the office for filing,
articles of amendment which are effective without shareholder action,
that set forth:
(a) The name of the corporation;
(b) The text of the amendment determining the terms of the class or
series of shares;
(c) The date it was adopted; and
(d) A statement that the amendment was duly adopted by the board of
directors. [1987 c.52 §34; 1989 c.1040 §10] (1) A corporation may issue
the number of shares of each class or series authorized by the articles
of incorporation. Shares that are issued are outstanding shares until
they are reacquired, redeemed, converted or canceled.
(2) The reacquisition, redemption or conversion of outstanding
shares is subject to the limitations of subsection (3) of this section
and ORS 60.177 and 60.181.
(3) At all times that shares of the corporation are outstanding,
one or more shares that together have unlimited voting rights and one or
more shares that together are entitled to receive the net assets of the
corporation upon dissolution must be outstanding. [1987 c.52 §35] (1) A corporation may:
(a) Issue fractions of a share or pay in money the value of
fractions of a share;
(b) Arrange for disposition of fractional shares by the
shareholders; and
(c) Issue scrip in registered or bearer form entitling the holder
to receive a full share upon surrendering enough scrip to equal a full
share.
(2) Each certificate representing scrip must be conspicuously
labeled “scrip” and must contain the information required by ORS 60.161
(2).
(3) The holder of a fractional share is entitled to exercise the
rights of a shareholder, including the right to vote, receive dividends
and participate in the assets of the corporation upon liquidation. The
holder of scrip is not entitled to any of these rights unless the scrip
provides for them.
(4) The board of directors may authorize the issuance of scrip
subject to any condition considered desirable, including:
(a) That the scrip will become void if not exchanged for full
shares before a specified date; and
(b) That the shares for which the scrip is exchangeable may be sold
and the proceeds paid to the scripholders. [1987 c.52 §36](Issuance of Shares) (1) A
subscription for shares entered into before incorporation is irrevocable
for six months unless the subscription agreement provides a longer or
shorter period or all the subscribers agree to revocation.
(2) The board of directors may determine the payment term of
subscriptions for shares that were entered into before incorporation
unless the subscription agreement specifies them. A call for payment by
the board of directors must be uniform so far as practicable as to all
shares of the same class or series, unless the subscription agreement
specifies otherwise.
(3) Shares issued pursuant to subscriptions entered into before
incorporation are fully paid and nonassessable when the corporation
receives the consideration specified in the subscription agreement.
(4) If a subscriber defaults in payment of money or property under
a subscription agreement entered into before incorporation, the
corporation may collect the amount owed as any other debt. Alternatively,
unless the subscription agreement provides otherwise, the corporation may
rescind the agreement if the debt remains unpaid more than 20 days after
the corporation sends written demand for payment to the subscriber.
(5) A subscription agreement entered into after incorporation is a
contract between the subscriber and the corporation subject to ORS
60.147. [1987 c.52 §37] (1) The powers granted in this section
to the board of directors may be reserved to the shareholders by the
articles of incorporation.
(2) The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or
benefit to the corporation, including cash, promissory notes, services
performed, contracts for services to be performed or other securities of
the corporation.
(3) Before the corporation issues shares, the board of directors
must determine that the consideration received or to be received for
shares to be issued is adequate. That determination by the board of
directors is conclusive insofar as the adequacy of consideration for the
issuance of shares relates to whether the shares are validly issued,
fully paid and nonassessable. A record of action by the board of
directors authorizing the issuance of shares for a specified
consideration may be relied upon in concluding that shares are validly
issued, fully paid and nonassessable.
(4) When the corporation receives the consideration for which the
board of directors authorized the issuance of shares, the shares issued
therefor are fully paid and nonassessable.
(5) The corporation may place in escrow shares issued for a
contract for future services or benefits or a promissory note or make
other arrangements to restrict the transfer of shares, and may credit
distributions in respect of the shares against their purchase price,
until the services are performed, the note is paid or the benefits
received. If the services are not performed, the note is not paid or the
benefits are not received, the shares placed in escrow or restricted and
the distributions credited may be canceled in whole or in part. [1987
c.52 §38; 1989 c.1040 §11] (1) A purchaser from a
corporation of its own shares is not liable to the corporation or its
creditors with respect to the shares except to pay the consideration for
which the shares were authorized to be issued or specified in the
subscription agreement.
(2) A shareholder of a corporation is not personally liable for the
acts or debts of the corporation merely by reason of being a shareholder.
[1987 c.52 §39] (1) Unless the articles of incorporation
provide otherwise, shares may be issued pro rata and without
consideration to the corporation’s shareholders or to the shareholders of
one or more classes or series. An issuance of shares under this
subsection is a share dividend.
(2) Shares of one class or series may not be issued as a share
dividend in respect to shares of another class or series unless the
articles of incorporation so authorize, a majority of the votes entitled
to be cast by the class or series to be issued approve the issue or there
are no outstanding shares of the class or series to be issued.
(3) If the board of directors does not fix the record date for
determining shareholders entitled to a share dividend, the record date is
the date the board of directors authorizes the share dividend.
(4) For purposes of this section, a share dividend shall include a
share split, other than a reverse share split. [1987 c.52 §40; 1989
c.1040 §12] (1) A corporation may
issue rights, options or warrants for the purchase of shares of the
corporation. The board of directors shall determine the terms upon which
the rights, options or warrants are issued. The board shall also
determine their form and content and the consideration for which the
shares are to be issued.
(2) Rights, options or warrants issued to the holders of all shares
of any class shall not be considered to conflict with the provisions of
ORS 60.131 (1) if the terms and conditions of the rights, options or
warrants include restrictions or conditions that:
(a) Preclude or limit the exercise, transfer or receipt of rights,
options or warrants by any person owning or offering to acquire a
specified number or percentage of the outstanding stock or other
securities of the corporation or any transferee of any such person; or
(b) Invalidate or void the rights, options or warrants held by any
such person or any transferee. [1987 c.52 §41; 1989 c.4 §10] (1) Shares may be but are
not required to be represented by certificates. Unless this chapter or
another statute expressly provides otherwise, the rights and obligations
of shareholders are identical whether or not their shares are represented
by certificates.
(2) At a minimum, each share certificate shall state on its face:
(a) The name of the issuing corporation and that it is organized
under the law of this state;
(b) The name of the person to whom the share is issued; and
(c) The number and class of shares and the designation of the
series, if any, the certificate represents.
(3) If the issuing corporation is authorized to issue different
classes of shares or different series within a class, the designations,
relative rights, preferences and limitations applicable to each class,
the variations in rights, preferences and limitations determined for each
series and the authority of the board of directors to determine
variations for future series shall be summarized on the front or back of
each certificate or, each certificate may state conspicuously on its
front or back that the corporation will furnish the shareholder with this
information on request in writing and without charge.
(4) Each share certificate must be signed, either manually or in
facsimile, by two officers designated in the bylaws or by the board of
directors. Each certificate may bear the corporate seal or its facsimile.
(5) If the person who signed a share certificate, either manually
or in facsimile, no longer holds office when the certificate is issued,
the certificate is nevertheless valid. [1987 c.52 §42] (1) Unless the articles of
incorporation or bylaws provide otherwise, the board of directors of a
corporation may authorize the issue of some or all of the shares of any
or all of its classes or series without certificates. The authorization
does not affect shares already represented by certificates until they are
surrendered to the corporation.
(2) Within a reasonable time after the issue or transfer of shares
without certificates, the corporation shall send the shareholder a
written statement of the information required on certificates by ORS
60.161 (2) and (3), and if applicable, ORS 60.167. [1987 c.52 §43] (1)
The articles of incorporation, bylaws, agreements among shareholders or
agreements between shareholders and the corporation may impose
restrictions on the transfer or registration of transfer of shares of the
corporation. A restriction does not affect shares issued before the
restriction was adopted unless the holders of the shares are parties to
the restriction agreement or voted in favor of the restriction.
(2) A restriction on the transfer or registration of transfer of
shares is valid and enforceable against the holder or a transferee of the
holder if the restriction is authorized by this section and its existence
is noted conspicuously on the front or back of the certificate or is
contained in the information statement required by ORS 60.164 (2). Unless
so noted, a restriction is not enforceable against a person who has no
knowledge of the restriction.
(3) A restriction on the transfer or registration of transfer of
shares is authorized:
(a) To maintain the corporation’s status when it is dependent on
the number or identity of its shareholders;
(b) To preserve exemptions under federal or state securities law; or
(c) For any other reasonable purpose.
(4) A restriction on the transfer or registration of transfer of
shares may:
(a) Obligate the shareholder first to offer the corporation or
other persons, separately, consecutively or simultaneously an opportunity
to acquire the restricted shares;
(b) Obligate the corporation or other persons, separately,
consecutively or simultaneously to acquire the restricted shares;
(c) Require the corporation, the holders of any class of its shares
or another person to approve the transfer of the restricted shares if the
requirement is not manifestly unreasonable; or
(d) Prohibit the transfer of the restricted shares to designated
persons or classes of persons, if the prohibition is not manifestly
unreasonable.
(5) For purposes of this section, “shares” includes a security
convertible into or carrying a right to subscribe for or acquire shares.
[1987 c.52 §44] A corporation may pay the expenses of
selling or underwriting its shares and organizing or reorganizing the
corporation from the consideration received for shares. [1987 c.52 §45](Subsequent Acquisition of Shares by Shareholders and Corporation) (1) Except to the extent
limited or denied by this section or by the articles of incorporation,
the shareholders of a corporation incorporated prior to June 15, 1987,
shall have preemptive rights as defined in this section. By articles of
amendment or restated articles filed after such date, a corporation may
eliminate preemptive rights under this subsection by including in the
articles of amendment or restated articles that “the corporation elects
to waive preemptive rights,” or words of similar import, in which event
this subsection shall no longer apply to the corporation.
(2) Except as provided in subsection (1) of this section, the
shareholders of a corporation do not have a preemptive right to acquire
the corporation’s unissued shares except to the extent the articles of
incorporation so provide.
(3) A statement included in the articles of incorporation that “the
corporation elects to have preemptive rights,” or words of similar
import, means that the following principles apply except to the extent
the articles of incorporation expressly provide otherwise:
(a) The shareholders of the corporation have a preemptive right,
granted on uniform terms and conditions prescribed by the board of
directors to provide a fair and reasonable opportunity to exercise the
right to acquire proportional amounts of the corporation’s unissued
shares upon the decision of the board of directors to issue them.
(b) A shareholder may waive the shareholder’s preemptive right. A
waiver evidenced by a writing is irrevocable even though it is not
supported by consideration.
(c) There is no preemptive right with respect to:
(A) Shares issued as compensation to directors, officers, agents or
employees of the corporation, its subsidiaries or affiliates;
(B) Shares issued to satisfy conversion or option rights created to
provide compensation to directors, officers, agents or employees of the
corporation, its subsidiaries or affiliates;
(C) Shares authorized in articles of incorporation that are issued
within six months from the effective date of incorporation; or
(D) Shares sold other than for money.
(d) Holders of shares of any class without general voting rights
but with preferential rights to distributions or assets have no
preemptive rights with respect to shares of any class.
(e) Holders of shares of any class with general voting rights but
without preferential rights to distributions or assets have no preemptive
rights with respect to shares of any class with preferential rights to
distributions or assets unless the shares with preferential rights are
convertible into or carry a right to subscribe for or acquire shares
without preferential rights.
(f) Shares subject to preemptive rights that are not acquired by
shareholders may be issued to any person for a period of one year after
being offered to shareholders at a consideration set by the board of
directors that is not lower than the consideration set for the exercise
of preemptive rights. An offer at a lower consideration or after the
expiration of one year is subject to the shareholders’ preemptive rights.
(4) For purposes of this section, “shares” includes a security
convertible into or carrying a right to subscribe for or acquire shares.
[1987 c.52 §46; 1987 c.579 §3; 1991 c.883 §2] (1) A
corporation may acquire its own shares and shares so acquired constitute
authorized but unissued shares.
(2) If the articles of incorporation prohibit the reissue of
acquired shares, the number of authorized shares is reduced by the number
of shares acquired, effective upon amendment of the articles of
incorporation.
(3) If pursuant to this section, the number of authorized shares is
reduced, articles of amendment shall be adopted by the board of directors
which may be without shareholder action and shall be delivered to the
office for filing. The articles shall set forth:
(a) The name of the corporation;
(b) The reduction in the number of authorized shares, itemized by
class and series; and
(c) The total number of authorized shares, itemized by class and
series, remaining after reduction of the shares.
(4) For purposes of this section, if shares of one class or series
of a corporation are converted into shares of another class or series of
the corporation, the shares so converted shall be considered to have been
acquired by the corporation. [1987 c.52 §47; 1993 c.403 §1](Distributions) (1) A board of directors may
authorize and the corporation may make distributions to its shareholders
subject to restriction by the articles of incorporation and the
limitation in subsection (3) of this section.
(2) If the board of directors does not fix the record date for
determining shareholders entitled to a distribution, other than a date
involving a purchase, redemption or other acquisition of the
corporation’s shares, it is the date the board of directors authorizes
the distribution.
(3) A distribution may be made only if, after giving it effect, in
the judgment of the board of directors:
(a) The corporation would be able to pay its debts as they become
due in the usual course of business; and
(b) The corporation’s total assets would at least equal the sum of
its total liabilities plus, unless the articles of incorporation permit
otherwise, the amount that would be needed if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution.
(4) The board of directors may base a determination that a
distribution is not prohibited under subsection (3) of this section
either on financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances or on a
fair valuation or other method that is reasonable in the circumstances.
(5) The effect of a distribution under subsection (3) of this
section is measured:
(a) In the case of distribution by purchase, redemption or other
acquisition of the corporation’s shares, as of the earlier of the date
the money or other property is transferred or debt incurred by the
corporation or the date the shareholder ceases to be a shareholder with
respect to the acquired shares;
(b) In the case of any other distribution of indebtedness, as of
the date the indebtedness is distributed; and
(c) In all other cases, as of the date a distribution is authorized
if the payment occurs within 120 days after the date of authorization or
the date the payment is made if it occurs more than 120 days after the
date of authorization.
(6) A corporation’s indebtedness to a shareholder incurred by
reason of a distribution made in accordance with this section is at
parity with the corporation’s indebtedness to its general unsecured
creditors, unless the shareholder agrees to subordination or the
corporation grants the shareholder a security interest or other lien
against corporate assets to secure the indebtedness. [1987 c.52 §48; 1989
c.1040 §13]SHAREHOLDERS(Meetings) (1) Except as provided in subsection (4) of
this section, a corporation shall hold an annual meeting of the
shareholders at a time stated in or fixed in accordance with the bylaws.
(2) Annual shareholders’ meetings may be held in or out of this
state at the place stated in or fixed in accordance with the bylaws. If
no place is stated in or fixed in accordance with the bylaws, annual
meetings shall be held at the corporation’s principal office.
(3) The failure to hold an annual meeting at the time stated in or
fixed in accordance with a corporation’s bylaws does not affect the
validity of any corporate action.
(4) If the articles of incorporation or bylaws of a corporation
registered under the Investment Company Act of 1940, as amended, so
provide, the corporation shall not be required to hold an annual meeting
in any year in which an election of directors is not required under the
Investment Company Act of 1940, as amended. [1987 c.52 §49; 1991 c.883
§3; 1997 c.249 §24] (1) A corporation shall hold a special
meeting of shareholders:
(a) On call of its board of directors or the person or persons
authorized to do so by the articles of incorporation or bylaws; or
(b) Except as provided in this paragraph, if the holders of at
least 10 percent of all votes entitled to be cast on any issue proposed
to be considered at the proposed special meeting sign, date and deliver
to the corporation’s secretary one or more written demands for the
meeting describing the purpose or purposes for which it is to be held.
The articles of incorporation may fix a lower percentage or a higher
percentage not exceeding 25 percent of all the votes entitled to be cast
on any issue proposed to be considered. Unless otherwise provided in the
articles of incorporation, a written demand for a special meeting may be
revoked by a writing to that effect signed by a shareholder who signed
the original demand, and received by the corporation prior to the receipt
by the corporation of a demand sufficient to require the holding of a
special meeting.
(2) If not otherwise fixed under ORS 60.207 or 60.221, the record
date for determining shareholders entitled to demand a special meeting is
the date the first shareholder signs the demand.
(3) Special shareholders’ meetings may be held in or out of this
state at the place stated in or fixed in accordance with the bylaws. If
no place is stated or fixed in accordance with the bylaws, special
meetings shall be held at the corporation’s principal office.
(4) Only business within the purpose or purposes described in the
meeting notice required by ORS 60.214 (3) may be conducted at a special
shareholders’ meeting. [1987 c.52 §50; 2003 c.80 §3] (1) The circuit court of the county
where a corporation’s principal office is located, or, if the principal
office is not in this state, where the registered office of the
corporation is or was last located, may summarily order a meeting to be
held:
(a) On application of any shareholder of the corporation entitled
to participate in an annual meeting if an annual meeting was not held
within the earlier of six months after the end of the corporation’s
fiscal year or 15 months after its last annual meeting; or
(b) On application of a shareholder who signed a demand for a
special meeting valid under ORS 60.204 and notice of the special meeting
was not given within 30 days after the date the demand was delivered to
the corporation’s secretary or the special meeting was not held in
accordance with the notice.
(2) The court may fix the time and place of the meeting, determine
the shares entitled to participate in the meeting, specify a record date
for determining shareholders entitled to notice of and to vote at the
meeting, prescribe the form and content of the meeting notice, fix the
quorum required for specific matters to be considered at the meeting or
direct that the votes represented at the meeting constitute a quorum for
action on those matters and enter other orders necessary to accomplish
the purpose or purposes of the meeting.
(3) The shareholders’ request shall be set for hearing at the
earliest possible time and shall take precedence over all matters, except
matters of the same character and hearings on preliminary injunctions
under ORCP 79 B(3). No order shall be issued by the court under this
section without notice to the corporation at least five days in advance
of the time specified for the hearing unless a different period is fixed
by order of the court. [1987 c.52 §51] (1) At each meeting
of shareholders, a chairperson shall preside. The chairperson shall be
appointed as provided in the bylaws or, in the absence of such provision,
by the board.
(2) Unless the articles of incorporation or bylaws provide
otherwise, the chairperson shall determine the order of business and
shall have the authority to establish rules for the conduct of the
meeting.
(3) Any rules adopted for, and the conduct of, the meeting shall be
fair to shareholders.
(4) The chairperson of the meeting shall announce at the meeting
when the polls close for each matter voted upon. If no announcement is
made, the polls shall be considered to have closed upon the final
adjournment of the meeting. After the polls close, no ballots, proxies or
votes, or any revocations or changes thereto, may be accepted. [2003 c.80
§5] (1)(a) Action required or permitted
by this chapter to be taken at a shareholders’ meeting may be taken
without a meeting if the action is taken by all the shareholders entitled
to vote on the action.
(b) Notwithstanding paragraph (a) of this subsection, the articles
of incorporation may provide that action required or permitted by this
chapter to be taken at a shareholders’ meeting may be taken without a
meeting if the action is taken by shareholders having not less than the
minimum number of votes that would be necessary to take such action at a
meeting at which all shareholders entitled to vote on the action were
present and voted.
(c) The action taken under this subsection must be evidenced by one
or more written consents describing the action taken, signed by all the
shareholders entitled to vote on the action, or by those shareholders
taking action under paragraph (b) of this subsection, and delivered to
the corporation for inclusion in the minutes or filing with the corporate
records.
(d) Action taken under paragraph (a) of this subsection is
effective when the last shareholder signs the consent, unless the consent
specifies an earlier or later effective date.
(e) Action taken under paragraph (b) of this subsection is
effective when the consent or consents bearing sufficient signatures are
delivered to the corporation, unless the consent or consents specify an
earlier or later effective date. An effective date specified under this
paragraph may not be earlier than the effective date of the provision
permitting action under paragraph (b) of this subsection.
(2) If not otherwise determined under ORS 60.207 or 60.221, the
record date for determining shareholders entitled to take action without
a meeting is the date the first shareholder signs a consent under
subsection (1) of this section.
(3) A consent signed under this section has the effect of a meeting
vote and may be described as such in any document.
(4)(a) If this chapter requires that notice of proposed action be
given to nonvoting shareholders and the action is to be taken by
unanimous consent of the voting shareholders, the corporation must give
its nonvoting shareholders written notice of the proposed action at least
10 days before the action is taken.
(b) If this chapter requires that notice of proposed action be
given to nonvoting shareholders and the action is taken as provided in
subsection (1)(b) of this section, the corporation must give its
nonvoting shareholders written notice of the action promptly after the
action is taken.
(c) The notice given under this subsection must contain or be
accompanied by the same material that, under this chapter, would have
been required to be sent to nonvoting shareholders in a notice of meeting
at which the proposed action would have been submitted to the
shareholders for action.
(5) If action is taken as provided in subsection (1)(b) of this
section, the corporation must give written notice of the action promptly
after the action is taken to shareholders who did not consent in writing
under subsection (1)(b) of this section. The notice given under this
subsection must contain or be accompanied by the same material that,
under this chapter, would have been required to be sent to those
shareholders in a notice of meeting at which the proposed action would
have been submitted to those shareholders for action.
(6) The fact that an action is taken by written consent without a
meeting does not impair any rights a shareholder who does not consent to
the action may have to dissent and obtain payment for the shareholder’s
shares under ORS 60.551 to 60.594. A shareholder who consents to the
action in writing is not entitled to receive payment for the
shareholder’s shares under ORS 60.551 to 60.594. [1987 c.52 §52; 2001
c.315 §22] (1) A corporation shall notify
shareholders of the date, time and place of each annual and special
shareholders’ meeting not earlier than 60 days nor less than 10 days
before the meeting date. Unless this chapter or the articles of
incorporation require otherwise, the corporation is required to give
notice only to shareholders entitled to vote at the meeting.
(2) Unless required by this chapter or the articles of
incorporation, notice of an annual meeting need not include a description
of the purpose or purposes for which the meeting is called.
(3) Notice of a special meeting must include a description of the
purpose or purposes for which the meeting is called.
(4) If not otherwise fixed under ORS 60.207 or 60.221, the record
date for determining shareholders entitled to notice of and to vote at an
annual or special shareholders’ meeting is the day before the first
notice is mailed or otherwise transmitted for delivery to shareholders in
accordance with ORS 60.034.
(5) Unless the bylaws require otherwise, if an annual or special
shareholders’ meeting is adjourned to a different date, time or place,
notice need not be given of the new date, time or place if the new date,
time or place is announced at the meeting before adjournment. If a new
record date for the adjourned meeting is or must be fixed under ORS
60.221, however, notice of the adjourned meeting must be given under this
section to persons who are shareholders as of the new record date. [1987
c.52 §53; 1989 c.1040 §16; 1991 c.883 §4; 2003 c.80 §6] (1) A shareholder may at any time waive
any notice required by this chapter, the articles of incorporation or
bylaws. The waiver must be in writing, be signed by the shareholder
entitled to the notice and be delivered to the corporation for inclusion
in the minutes for filing with the corporate records.
(2) A shareholder’s attendance at a meeting waives objection to:
(a) Lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting objects to holding the
meeting or transacting business at the meeting; and
(b) Consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice, unless
the shareholder objects to considering the matter when it is presented.
[1987 c.52 §54] Unless otherwise provided in the
articles of incorporation or bylaws, a majority of votes represented at a
meeting of shareholders, whether or not a quorum, may adjourn the meeting
from time to time to a different time and place without further notice to
any shareholder of any adjournment, except as such notice may be required
by ORS 60.214. At the adjourned meeting at which a quorum is present, any
business may be transacted that might have been transacted at the meeting
originally held. [1989 c.1040 §18] (1) The bylaws may fix or provide the manner of
fixing the record date for one or more voting groups in order to
determine the shareholders entitled to notice of a shareholders’ meeting,
to demand a special meeting, to vote or to take any other action. The
record date shall be the same for all voting groups. If the bylaws do not
fix or provide for fixing a record date, the board of directors of the
corporation may fix a future date, or a later time on the date the board
of directors fixes the record date, as the record date.
(2) A record date fixed under this section may not be more than 70
days before the meeting or action requiring a determination of
shareholders.
(3) A determination of shareholders entitled to notice of or to
vote at a shareholders’ meeting is effective for any adjournment of the
meeting unless the board of directors fixes a new record date, which it
must do if the meeting is adjourned to a date more than 120 days after
the date fixed for the original meeting.
(4) If a court orders a meeting adjourned to a date more than 120
days after the date fixed for the original meeting, it may provide that
the original record date continues in effect or it may fix a new record
date. [1987 c.52 §55; 1993 c.403 §2] (1) Unless the articles of
incorporation or bylaws provide otherwise, the bylaws or the board of
directors, by resolution adopted in advance either specifically with
respect to a particular meeting or generally with respect to future
meetings, may permit any or all shareholders to participate in an annual
or special meeting by, or may permit the conduct of a meeting through,
use of any means of communication by which all shareholders participating
may simultaneously hear each other. A shareholder participating in a
meeting by this means is deemed to be present in person at the meeting.
(2) The notice of each annual or special meeting of shareholders at
which participation in the manner referred to in subsection (1) of this
section is permitted shall state that fact and shall describe how any
shareholder desiring to participate may notify the corporation of the
shareholder’s desire to be included in the meeting. [1989 c.1040 §15] (1) A corporation having any
shares listed on a national securities exchange or regularly traded in a
market maintained by one or more members of a national or affiliated
securities association shall, and any other corporation may, appoint one
or more inspectors to act at a meeting of shareholders and make a written
report of the inspectors’ determinations. Each inspector shall take and
sign an oath to faithfully execute the duties of the inspector with
strict impartiality and according to the best of the inspector’s ability.
(2) The inspectors shall:
(a) Ascertain the number of shares outstanding and the voting power
of each share;
(b) Determine the shares represented at a meeting;
(c) Determine the validity of proxies and ballots;
(d) Count all votes; and
(e) Determine the result.
(3) An inspector may be an officer or employee of the corporation.
[2003 c.80 §9](Voting) (1) After fixing a record
date for a meeting, a corporation shall prepare an alphabetical list of
the names of all its shareholders who are entitled to notice of a
shareholders’ meeting. The list must be arranged by voting group, and
within each voting group by class or series of shares and show the
address of and number of shares held by each shareholder.
(2) The shareholders’ list must be available for inspection by any
shareholder, beginning two business days after notice of the meeting is
given for which the list was prepared and continuing through the meeting,
at the corporation’s principal office or at a place identified in the
meeting notice in the city where the meeting will be held. A shareholder,
the shareholder’s agent or attorney is entitled on written demand to
inspect and, subject to the requirements of ORS 60.774 (3), to copy the
list during regular business hours and at the shareholder’s expense
during the period it is available for inspection.
(3) The corporation shall make the shareholders’ list available at
the meeting, and any shareholder, the shareholder’s agent or attorney is
entitled to inspect the list at any time during the meeting or any
adjournment.
(4) If the corporation refuses to allow a shareholder, the
shareholder’s agent or attorney to inspect the shareholders’ list before
or at the meeting or copy the list as permitted by subsection (2) of this
section, on application of the shareholder, the circuit court of the
county where a corporation’s principal office is located, or if the
principal office is not in this state, where its registered office is or
was last located, may enter a temporary restraining order or preliminary
injunction pursuant to ORCP 79 ordering the inspection or copying at the
corporation’s expense and may postpone the meeting for which the list was
prepared until the inspection or copying is complete. The party
initiating such a proceeding shall not be required to post an undertaking
pursuant to ORCP 82 A.
(5) Refusal or failure to prepare or make available the
shareholder’s list does not affect the validity of action taken at the
meeting. [1987 c.52 §56] (1) Except as provided in
subsections (2) and (3) of this section and ORS 60.807, or unless the
articles of incorporation provide otherwise, each outstanding share,
regardless of class, is entitled to one vote on each matter voted on at a
shareholders’ meeting. Only shares are entitled to vote.
(2) The shares of a corporation are not entitled to vote if they
are owned, directly or indirectly, by a second domestic or foreign
corporation, and the first corporation owns, directly or indirectly, a
majority of the shares entitled to vote for directors of the second
corporation.
(3) Subsection (2) of this section does not limit the power of a
corporation to vote any shares, including its own shares, held by it in a
fiduciary capacity.
(4) Redeemable shares are not entitled to vote after notice of
redemption is mailed to the holders and a sum sufficient to redeem the
shares has been deposited with a bank, trust company or other financial
institution under an irrevocable obligation to pay the holders the
redemption price on surrender of the shares. [1987 c.52 §57; 1989 c.4 §7] (1) A shareholder may vote shares in person or by
proxy.
(2) A shareholder may authorize a person or persons to act for the
shareholder as proxy in any one of the following manners:
(a) A shareholder or the shareholder’s designated officer,
director, employee or agent may execute a writing by:
(A) Signing it; or
(B) Causing the shareholder’s signature or the signature of the
designated officer, director, employee or agent of the shareholder to be
affixed to the writing by any reasonable means, including facsimile
signature.
(b) A shareholder may authorize an electronic transmission that:
(A) May be transmitted to:
(i) The person who will be the holder of the proxy;
(ii) The proxy solicitation firm; or
(iii) A proxy support service organization or similar agency
authorized by the person who will be the holder of the proxy to receive
the electronic transmission; and
(B) Must contain or be accompanied by information from which it can
be determined that the shareholder or the shareholder’s designated
officer, director, employee or agent authorized the transmission.
(c) Any other method allowed by law.
(3) A copy, facsimile telecommunication or other reliable
reproduction of the writing or electronic transmission created under
subsection (2)(a) or (b) of this section may be used instead of the
original writing or electronic transmission for all purposes for which
the original writing or electronic transmission may be used if the copy,
facsimile telecommunication or other reproduction is a complete copy of
the entire original writing or electronic transmission.
(4) An authorization of a proxy is effective when received by the
secretary or other officer or agent authorized to tabulate votes. An
authorization is valid for 11 months unless a longer period is expressly
provided in the authorization form.
(5) An authorization of a proxy is revocable by the shareholder
unless the authorization conspicuously states that it is irrevocable and
the authorization is coupled with an interest. Authorizations coupled
with an interest include the authorization of:
(a) A pledgee;
(b) A person who purchased or agreed to purchase the shares;
(c) A creditor of the corporation who extended it credit under
terms requiring the authorization;
(d) An employee of the corporation whose employment contract
requires the authorization; or
(e) A party to a voting agreement created under ORS 60.257.
(6) The death or incapacity of the shareholder authorizing a proxy
does not affect the right of the corporation to accept the proxy’s
authority unless notice of the death or incapacity is received by the
secretary or other officer or agent authorized to tabulate votes before
the proxy exercises the proxy’s authority under the authorization.
(7) An authorization made irrevocable under subsection (5) of this
section is revoked when the interest with which it is coupled is
extinguished.
(8) A transferee for value of shares subject to an irrevocable
authorization may revoke the authorization if the transferee did not know
of its existence when the transferee acquired the shares and the
existence of the irrevocable authorization was not noted conspicuously on
the certificate representing the shares or on the information statement
for shares without certificates.
(9) Subject to ORS 60.237 and to any express limitation on the
proxy’s authority appearing on the face of the authorization form or
electronic transmission, a corporation is entitled to accept the proxy’s
vote or other action as that of the shareholder making the authorization.
[1987 c.52 §58; 1999 c.371 §1; 2001 c.104 §17; 2003 c.80 §7] (1) A corporation may establish a
procedure by which the beneficial owner of shares that are registered in
the name of a nominee is recognized by the corporation as the
shareholder. The extent of this recognition may be determined in the
procedure.
(2) The procedure referred to in subsection (1) of this section may
set forth:
(a) The types of nominees to which it applies;
(b) The rights or privileges that the corporation recognizes in a
beneficial owner;
(c) The manner in which the procedure is selected by the nominee;
(d) The information that must be provided when the procedure is
selected;
(e) The period for which selection of the procedure is effective;
and
(f) Other aspects of the rights and duties created. [1987 c.52 §59] (1) If the name signed on
a vote, consent, waiver or proxy authorization corresponds to the name of
a shareholder, the corporation, if acting in good faith, is entitled to
accept the vote, consent, waiver or proxy authorization and give it
effect as the act of the shareholder.
(2) If the name signed on a vote, consent, waiver or proxy
authorization does not correspond to the name of its shareholder, the
corporation, if acting in good faith, is nevertheless entitled to accept
the vote, consent, waiver or proxy authorization and give it effect as
the act of the shareholder if:
(a) The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity;
(b) The name signed purports to be that of an administrator,
executor, guardian or conservator representing the shareholder and, if
the corporation requests, evidence of fiduciary status acceptable to the
corporation has been presented with respect to the vote, consent, waiver
or proxy authorization;
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence
of this status acceptable to the corporation has been presented with
respect to the vote, consent, waiver or proxy authorization;
(d) The name signed purports to be that of a pledgee, beneficial
owner or attorney-in-fact of the shareholder and, if the corporation
requests, evidence acceptable to the corporation of the signatory’s
authority to sign for the shareholder has been presented with respect to
the vote, consent, waiver or proxy authorization; or
(e) Two or more persons are the shareholder as cotenants or
fiduciaries and the name signed purports to be the name of at least one
of the coowners and the person signing appears to be acting on behalf of
all coowners.
(3) The corporation is entitled to reject a vote, consent, waiver
or proxy authorization if the secretary or other officer or agent
authorized to tabulate votes, acting in good faith, has reasonable basis
for doubt about the validity of the signature on it or about the
signatory’s authority to sign for the shareholder.
(4) The corporation and its officer or agent who accepts or rejects
a vote, consent, waiver or proxy authorization in good faith and in
accordance with the standards of this section are not liable in damages
to the shareholder for the consequences of the acceptance or rejection.
(5) Corporate action based on the acceptance or rejection of a
vote, consent, waiver or proxy authorization under this section is valid
unless a court of competent jurisdiction determines otherwise. [1987 c.52
§60; 1999 c.371 §3] (1) Shares
entitled to vote as a separate voting group may take action on a matter
at a meeting only if a quorum of those shares exists with respect to that
matter. Unless the articles of incorporation or this chapter provide for
a lesser or greater number in accordance with ORS 60.247, a majority of
the votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.
(2) Once a share is represented for any purpose at a meeting, it is
deemed present for quorum purposes for the remainder of the meeting and
for any adjournment of that meeting unless a new record date is or must
be set for that adjourned meeting.
(3) If a quorum exists, action on a matter, other than the election
of directors, by a voting group is approved if the votes cast within the
voting group favoring the action exceed the votes cast opposing the
action, unless the articles of incorporation or this chapter require a
greater number of affirmative votes.
(4) An amendment of articles of incorporation adding, changing or
deleting a quorum or voting requirement for a voting group greater than
specified in subsection (2) or (3) of this section is governed by ORS
60.247.
(5) The election of directors is governed by ORS 60.251. [1987 c.52
§61] (1) If the
articles of incorporation or this chapter provide for voting by a single
group on a matter, action on that matter is taken when voted upon by that
voting group as provided in ORS 60.241.
(2) If the articles of incorporation or this chapter provide for
voting by two or more voting groups on a matter, action on that matter is
taken only when voted upon by each of those voting groups counted
separately as provided in ORS 60.241. Action may be taken by one voting
group on a matter even though no action is taken by another voting group
entitled to vote on the matter. [1987 c.52 §62; 1991 c.883 §5] (1) The
articles of incorporation may provide for a lesser or greater quorum
requirement for shareholders, or voting groups of shareholders, than is
provided for by this chapter, but in no event shall a quorum for
shareholders, or any voting group of shareholders, consist of less than
one-third of the votes entitled to be cast on any matter by the
shareholders, or voting group of shareholders. The articles of
incorporation may provide for a greater voting requirement for
shareholders, or voting groups of shareholders, than is provided for by
this chapter.
(2) An amendment to the articles of incorporation that adds a
greater quorum or voting requirement must meet the quorum requirement and
be adopted by the vote and voting groups required to take action under
the quorum and voting requirements then in effect. An amendment to the
articles of incorporation that changes or deletes a greater quorum or
voting requirement must meet the quorum requirement and be adopted by the
vote and voting groups required to take action immediately prior to the
change or deletion. [1987 c.52 §63; 1989 c.1040 §19] (1) Unless otherwise provided in the
articles of incorporation, directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at
which a quorum is present.
(2) Shareholders do not have a right to cumulate their votes for
directors unless the articles of incorporation so provide.
(3) A statement included in the articles of incorporation that “all
shareholders are entitled to cumulate their votes for directors,” “a
designated voting group of shareholders are entitled to cumulate their
votes for director” or words of similar import means that the
shareholders designated are entitled to multiply the number of votes they
are entitled to cast by the number of directors for whom they are
entitled to vote and cast the product for a single candidate or
distribute the product among two or more candidates. [1987 c.52 §64; 1993
c.403 §3](Voting Trusts and Agreements) (1) One or more shareholders may create a
voting trust and conferring on a trustee the right to vote or otherwise
act for them by signing an agreement setting out the provisions of the
trust which may include anything consistent with its purpose and
transferring their shares to the trustee. When a voting trust agreement
is signed, the trustee shall prepare a list of the names and addresses of
all owners of beneficial interests in the trust, together with the number
and class of shares each transferred to the trust, and deliver copies of
the list and agreement to the corporation’s principal office.
(2) A voting trust becomes effective on the date the first shares
subject to the trust are registered in the trustee’s name. A voting trust
is valid for not more than 10 years after its effective date unless
extended under subsection (3) of this section.
(3) All or some of the parties to a voting trust may extend it for
additional terms of not more than 10 years each by signing an extension
agreement and obtaining the voting trustee’s written consent to the
extension. An extension is valid for 10 years from the date the first
shareholder signs the extension agreement. The voting trustee must
deliver copies of the extension agreement and list of beneficial owners
to the corporation’s principal office. An extension agreement binds only
those parties signing it. [1987 c.52 §65] (1) Two or more persons may provide for
the manner in which they will vote their shares by signing an agreement
for that purpose. A voting agreement created under this section is not a
voting trust subject to the provisions of ORS 60.254.
(2) A voting agreement created under this section is specifically
enforceable. [1987 c.52 §66](Derivative Proceedings) (1) A person may not commence a
proceeding in the right of a domestic or foreign corporation unless the
person was a shareholder of the corporation when the transaction
complained of occurred or unless the person became a shareholder through
transfer by operation of law from one who was a shareholder at that time.
(2) A complaint in a proceeding brought in the right of a
corporation must allege with particularity the demand made, if any, to
obtain action by the board of directors and either that the demand was
refused or ignored or why a demand was not made. Whether or not a demand
for action was made, if the corporation commences an investigation of the
charges made in the demand or complaint, the court may stay any
proceeding until the investigation is completed.
(3) A proceeding commenced under this section may not be
discontinued or settled without the court’s approval. If the court
determines that a proposed discontinuance or settlement will
substantially affect the interest of the corporation’s shareholders or a
class of shareholders, the court shall direct that notice be given the
shareholders affected.
(4) For purposes of this section, “shareholder” includes a
beneficial owner whose shares are held in a voting trust or held by a
nominee on behalf of the beneficial owner. [1987 c.52 §67](Shareholder Agreements)(1) An
agreement among the shareholders of a corporation entered into after
December 31, 1993, that is inconsistent with one or more other provisions
of this chapter is effective among the shareholders and the corporation,
and binding on the board of directors, if the agreement complies with
this section and it:
(a) Restricts the discretion or powers of the board of directors;
(b) Establishes who shall be directors or officers of the
corporation or establishes their terms of office or manner of selection
or removal;
(c) Governs, in general or in regard to specific matters, the
exercise or division of voting power by or between the shareholders and
directors or by or among any of them, including use of weighted voting
rights or director proxies;
(d) Establishes the terms and conditions of any agreement for the
transfer or use of property or the provision of services between the
corporation and any shareholder, director, officer or employee of the
corporation or among any of them; or
(e) Requires dissolution of the corporation at the request of one
or more of the shareholders or upon the occurrence of a specified event
or contingency.
(2) An agreement authorized by this section shall be:
(a) Set forth:
(A) In the articles of incorporation or bylaws and approved by all
persons who are shareholders at the time of the agreement; or
(B) In a written agreement that is signed by all persons who are
shareholders at the time of the agreement and is made known to the
corporation;
(b) Subject to amendment only by all persons who are shareholders
at the time of the amendment, unless the agreement provides otherwise; and
(c) Valid for 10 years, unless the agreement provides otherwise.
(3) The existence of an agreement authorized by this section shall
be noted conspicuously on the front or back of each certificate for
outstanding shares or on the information statement required by ORS 60.164
(2). If at the time of the agreement the corporation has shares
outstanding represented by certificates, the corporation shall recall the
outstanding certificates and issue substitute certificates that comply
with this subsection. The failure to note the existence of the agreement
on the certificate or information statement shall not affect the validity
of the agreement or any action taken pursuant to it. Any purchaser of
shares who, at the time of purchase, did not have knowledge of the
existence of the agreement shall be entitled to rescission of the
purchase. A purchaser shall be deemed to have knowledge of the existence
of the agreement if its existence is noted on the certificate or
information statement for the shares in compliance with this subsection
and, if the shares are not represented by a certificate, the information
statement is delivered to the purchaser at or prior to the time of
purchase of the shares. An action to enforce the right of rescission
authorized by this subsection must be commenced within the earlier of:
(a) Ninety days after notice from the corporation or the seller to
the purchaser of the existence of the agreement describing the rights of
a purchaser without knowledge of the existence of the agreement, and
stating that failure to timely exercise rescission rights will result in
their termination;
(b) One year after discovery of the existence of the agreement; or
(c) Three years after the time of purchase of the shares.
(4) An agreement authorized by this section shall cease to be
effective when shares of the corporation are listed on a national
securities exchange or quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System. If the agreement ceases to be
effective for any reason and is contained or referred to in the
corporation’s articles of incorporation or bylaws, the board of directors
may adopt, without shareholder action, an amendment to the articles of
incorporation or bylaws to delete the agreement and any references to it.
(5) An agreement authorized by this section that limits the
discretion or powers of the board of directors shall relieve the
directors of, and impose upon the person or persons in whom such
discretion or powers are vested, liability for acts or omissions imposed
by law on directors to the extent that the discretion or powers of the
directors are limited by the agreement.
(6) The existence or performance of an agreement authorized by this
section shall not be a ground for imposing personal liability on any
shareholder for the acts or debts of the corporation even if the
agreement or its performance treats the corporation as if it were a
partnership or results in failure to observe the corporate formalities
otherwise applicable to the matters governed by the agreement.
(7) Incorporators or subscribers for shares may act as shareholders
with respect to an agreement authorized by this section if no shares have
been issued when the agreement is made. [1993 c.403 §12]DIRECTORS AND OFFICERS(Board of Directors) (1) Each
corporation shall have a board of directors.
(2) All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation managed
under the direction of, the board of directors, subject to any limitation
set forth in the articles of incorporation or in an agreement authorized
by ORS 60.265. [1987 c.52 §68; 1993 c.403 §4] The articles of incorporation
or bylaws may prescribe qualifications for directors. A director need not
be a resident of this state or a shareholder of the corporation unless
required by the articles of incorporation or bylaws. [1987 c.52 §69] (1) A board of directors
must consist of one or more individuals, with the number specified in or
fixed in accordance with the articles of incorporation or bylaws.
Notwithstanding ORS 60.001 (21), the estate of an incompetent individual
or a deceased individual may not be a director.
(2) The number of directors may be increased or decreased from time
to time by amendment to, or in the manner provided in, the articles of
incorporation or the bylaws.
(3) Directors are elected at the first annual shareholders’ meeting
and at each annual meeting thereafter unless their terms are staggered
under ORS 60.317. [1987 c.52 §70; 2003 c.80 §10] If
the articles of incorporation authorize dividing the shares into classes
or series, the articles may also authorize the election of all or a
specified number of directors by the holders of one or more authorized
classes or series of shares. Each class or classes or series of shares
entitled to elect one or more directors is a separate voting group for
purposes of the election of directors. [1987 c.52 §71] (1) The terms of the initial
directors of a corporation expire at the first shareholders’ meeting at
which directors are elected.
(2) The terms of all other directors expire at the next annual
shareholders’ meeting following their election unless their terms are
staggered under ORS 60.317.
(3) A decrease in the number of directors does not shorten an
incumbent director’s term.
(4) The term of a director elected by the board of directors to
fill a vacancy expires at the next shareholders’ meeting at which
directors are elected.
(5) Despite the expiration of a director’s term, the director
continues to serve until the director’s successor is elected and
qualifies or until there is a decrease in the number of directors. [1987
c.52 §72; 1989 c.1040 §20] (1) The articles of
incorporation or the bylaws may provide for staggering the terms of
directors by dividing the total number of directors into two or three
groups, with each group to be as nearly equal in number as possible.
(2) If the terms of the directors are staggered, the terms of
directors in the first group expire at the first annual shareholders’
meeting after their election, the terms of the second group expire at the
second annual shareholders’ meeting after their election and the terms of
the third group, if any, expire at the third annual shareholders’ meeting
after their election. At each annual shareholders’ meeting held
thereafter, directors shall be chosen for a term of two years or three
years, as the case may be, to succeed those whose terms expire.
(3) If the corporation has cumulative voting, terms of directors
may be staggered only if authorized by the articles of incorporation and
each group of directors contains at least three members. [1987 c.52 §73;
1989 c.1040 §21; 2003 c.80 §11; 2005 c.92 §1] (1) A director may resign at any
time by delivering written notice to the board of directors, its
chairperson or the corporation.
(2) A resignation is effective when the notice is effective under
ORS 60.034 (5) unless the notice specifies a later effective date.
(3) Once delivered, a notice of resignation is irrevocable unless
revocation is permitted by the board of directors. [1987 c.52 §74] (1) The shareholders
may remove one or more directors with or without cause unless the
articles of incorporation provide that directors may be removed only for
cause.
(2) If a director is elected by a voting group of shareholders,
only the shareholders of that voting group may participate in the vote to
remove the director.
(3) If cumulative voting is authorized, a director may not be
removed if the number of votes sufficient to elect the director under
cumulative voting is voted against the director’s removal. If cumulative
voting is not authorized, a director may be removed only if the number of
votes cast to remove the director exceed the number of votes cast not to
remove the director.
(4) A director may be removed by the shareholders only at a meeting
called for the purpose of removing the director and the meeting notice
must state that the purpose, or one of the purposes, of the meeting is
removal of the director. [1987 c.52 §75] (1) The circuit
court of the county where a corporation’s principal office is located or
if the principal office is not in this state where its registered office
is or was last located, may remove a director of the corporation from
office in a proceeding commenced either by the corporation or by its
shareholders holding at least 10 percent of the outstanding shares of any
class if the court finds that:
(a) The director engaged in fraudulent or dishonest conduct or
gross abuse of authority or discretion with respect to the corporation;
and
(b) Removal is in the best interest of the corporation.
(2) The court that removes a director may bar the director from
reelection for a period prescribed by the court.
(3) If shareholders commence a proceeding under subsection (1) of
this section, they shall make the corporation a party defendant. [1987
c.52 §76] (1) Unless the articles of incorporation
provide otherwise, if a vacancy occurs on a board of directors, including
a vacancy resulting from an increase in the number of directors:
(a) The shareholders may fill the vacancy;
(b) The board of directors may fill the vacancy; or
(c) If the directors remaining in office constitute fewer than a
quorum of the board, they may fill the vacancy by the affirmative vote of
a majority of all the directors remaining in office.
(2) If the vacant office is filled by the shareholders and was held
by a director elected by a voting group of shareholders, then only the
holders of shares of that voting group are entitled to vote to fill the
vacancy.
(3) A vacancy that will occur at a specific later date, by reason
of a resignation effective at later date under ORS 60.321 (2) or
otherwise may be filled before the vacancy occurs but the new director
may not take office until the vacancy occurs. [1987 c.52 §77] Unless the articles of
incorporation or bylaws provide otherwise, the board of directors may fix
the compensation of directors. [1987 c.52 §78](Meetings and Action of Board) (1) The board of directors may hold regular or
special meetings in or out of this state.
(2) Unless the articles of incorporation or bylaws provide
otherwise, the board of directors may permit any or all directors to
participate in a regular or special meeting by, or conduct the meeting
through, use of any means of communication by which all directors
participating may simultaneously hear each other during the meeting. A
director participating in a meeting by this means is deemed to be present
in person at the meeting. [1987 c.52 §79] (1) Unless the articles of
incorporation or bylaws provide otherwise, action required or permitted
by this chapter to be taken at a board of directors’ meeting may be taken
without a meeting if the action is taken by all members of the board. The
action must be evidenced by one or more written consents describing the
action taken, signed by each director, and included in the minutes or
filed with the corporate records reflecting the action taken.
(2) Action taken under this section is effective when the last
director signs the consent, unless the consent specifies an earlier or
later effective date.
(3) A consent signed under this section has the effect of a meeting
vote and may be described as such in any document. [1987 c.52 §80] (1) Unless the articles of incorporation
or bylaws provide otherwise, regular meetings of the board of directors
may be held without notice of the date, time, place or purpose of the
meeting.
(2) Unless the articles of incorporation or bylaws provide for a
longer or shorter period, special meetings of the board of directors must
be preceded by at least two days’ notice of the date, time and place of
the meeting. The notice need not describe the purpose of the special
meeting unless required by the articles of incorporation or bylaws. [1987
c.52 §81] (1) A director may at any time waive any
notice required by this chapter, the articles of incorporation or bylaws.
Except as provided by subsection (2) of this section, the waiver must be
in writing, must be signed by the director entitled to the notice, must
specify the meeting for which notice is waived and must be filed with the
minutes or corporate records.
(2) A director’s attendance at or participation in a meeting waives
any required notice to the director of the meeting unless the director at
the beginning of the meeting, or promptly upon the director’s arrival,
objects to holding the meeting or transacting business at the meeting and
does not thereafter vote for or assent to action taken at the meeting.
[1987 c.52 §82] (1) Unless the articles of incorporation
or bylaws requires a greater number or a lesser number as authorized
under subsection (2) of this section, a quorum of a board of directors
consists of:
(a) If the corporation has a fixed board size, a majority of the
fixed number of directors; or
(b) If the corporation has a variable-range size board, a majority
of the number of directors prescribed, or if no number is prescribed, a
majority of the number in office immediately before the meeting begins.
(2) The articles of incorporation or bylaws may authorize a quorum
of a board of directors to consist of no fewer than one-third of the
fixed or prescribed number of directors determined under subsection (1)
of this section.
(3) If a quorum is present when a vote is taken, the affirmative
vote of a majority of directors present is the act of the board of
directors unless the articles of incorporation or bylaws require the vote
of a greater number of directors.
(4) A director who is present at a meeting of the board of
directors or a committee of the board of directors when corporate action
is taken is deemed to have assented to the action taken unless:
(a) The director objects at the beginning of the meeting, or
promptly upon the director’s arrival, to holding the meeting or
transacting business at the meeting;
(b) The director’s dissent or abstention from the action taken is
entered in the minutes of the meeting; or
(c) The director delivers written notice of dissent or abstention
to the presiding officer of the meeting before its adjournment or to the
corporation immediately after adjournment of the meeting. The right of
dissent or abstention is not available to a director who votes in favor
of the action taken. [1987 c.52 §83] (1) Unless this chapter,
the articles of incorporation or the bylaws provide otherwise, a board of
directors may create one or more committees and appoint one or more
members of the board of directors to serve on each committee.
(2) Unless this chapter provides otherwise, the creation of a
committee and appointment of members to it must be approved by the
greater of:
(a) A majority of all the directors in office when the action is
taken; or
(b) The number of directors required by the articles of
incorporation or bylaws to take action under ORS 60.351.
(3) ORS 60.337 to 60.351 apply both to committees of the board and
to members of the committees.
(4) Except as provided in subsection (5) of this section, to the
extent specified by the board of directors or in the articles of
incorporation or bylaws, each committee may exercise the powers of the
board of directors under ORS 60.301.
(5) A committee may not:
(a) Authorize or approve distributions, except according to a
formula or method, or within limits, prescribed by the board of directors;
(b) Approve or propose to shareholders action that this chapter
requires be approved by shareholders;
(c) Fill vacancies on the board of directors or, subject to
subsection (7) of this section, on any of its committees; or
(d) Adopt, amend or repeal bylaws.
(6) The creation of, delegation of authority to, or action by a
committee does not alone constitute compliance by a director with the
standards of conduct described in ORS 60.357.
(7) The board of directors may appoint one or more directors as
alternate members of any committee to replace any absent or disqualified
member during the member’s absence or disqualification. Unless the
articles of incorporation, the bylaws or the resolution creating the
committee provide otherwise, in the event of the absence or
disqualification of a member of a committee, the member or members
present at any meeting and not disqualified from voting, unanimously, may
appoint a director to act in place of the absent or disqualified member.
[1987 c.52 §84; 1989 c.1040 §22; 1991 c.883 §6; 1993 c.403 §5; 2003 c.80
§12](Standards of Conduct) (1) A director shall
discharge the duties of a director, including the duties as a member of a
committee, in good faith, with the care an ordinarily prudent person in a
like position would exercise under similar circumstances and in a manner
the director reasonably believes to be in the best interests of the
corporation.
(2) In discharging the duties of a director, a director is entitled
to rely on information, opinions, reports or statements including
financial statements and other financial data, if prepared or presented
by:
(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants or other persons as to
matters the director reasonably believes are within the person’s
professional or expert competence; or
(c) A committee of the board of directors of which the director is
not a member if the director reasonably believes the committee merits
confidence.
(3) A director is not acting in good faith if the director has
knowledge concerning the matter in question that makes reliance otherwise
permitted by subsection (2) of this section unwarranted.
(4) A director is not liable for any action taken as a director, or
any failure to take any action, if the director performed the duties of
the director’s office in compliance with this section.
(5) When evaluating any offer of another party to make a tender or
exchange offer for any equity security of the corporation, or any
proposal to merge or consolidate the corporation with another corporation
or to purchase or otherwise acquire all or substantially all the
properties and assets of the corporation, the directors of the
corporation may, in determining what they believe to be in the best
interests of the corporation, give due consideration to the social, legal
and economic effects on employees, customers and suppliers of the
corporation and on the communities and geographical areas in which the
corporation and its subsidiaries operate, the economy of the state and
nation, the long-term as well as short-term interests of the corporation
and its shareholders, including the possibility that these interests may
be best served by the continued independence of the corporation, and
other relevant factors. [1987 c.52 §85; 1989 c.4 §8] (1) A conflict of interest transaction
is a transaction with the corporation in which a director of the
corporation has a direct or indirect interest. A conflict of interest
transaction is not voidable by the corporation solely because of the
director’s interest in the transaction if any one of the following is
true:
(a) The material facts of the transaction and the director’s
interest were disclosed or known to the board of directors or a committee
of the board of directors and the board of directors or committee
authorized, approved or ratified the transaction;
(b) The material facts of the transaction and the director’s
interest were disclosed or known to the shareholders entitled to vote and
they authorized, approved or ratified the transaction; or
(c) The transaction was fair to the corporation.
(2) For purposes of this section, a director of the corporation has
an indirect interest in a transaction if:
(a) Another entity in which the director has a material financial
interest or in which the director is a general partner is a party to the
transaction; or
(b) Another entity of which the director is a director, officer or
trustee is a party to the transaction and the transaction is or should be
considered by the board of directors of the corporation.
(3) For purposes of subsection (1)(a) of this section, a conflict
of interest transaction is authorized, approved or ratified if it
receives the affirmative vote of a majority of the directors on the board
of directors, or on the committee, who have no direct or indirect
interest in the transaction. A transaction may not be authorized,
approved or ratified under this section by a single director. If a
majority of the directors who have no direct or indirect interest in the
transaction vote to authorize, approve or ratify the transaction, a
quorum is present for the purpose of taking action under this section.
The presence of, or a vote cast by, a director with a direct or indirect
interest in the transaction does not affect the validity of any action
taken under subsection (1)(a) of this section if the transaction is
otherwise authorized, approved or ratified as provided in subsection (1)
of this section.
(4) For purposes of subsection (1)(b) of this section, a conflict
of interest transaction is authorized, approved or ratified if it
receives the vote of a majority of the shares entitled to be counted
under this subsection, voting as a single voting group. Shares owned by
or voted under the control of a director who has a direct or indirect
interest in the transaction, and shares owned by or voted under the
control of an entity described in subsection (2)(a) of this section may
be counted in a vote of shareholders to determine whether to authorize,
approve or ratify a conflict of interest transaction under subsection
(1)(b) of this section. A majority of the shares, whether or not present,
that are entitled to be counted in a vote on the transaction under this
subsection constitutes a quorum for the purpose of taking action under
this section. [1987 c.52 §86] (1) Except as provided by subsection (3)
of this section, a corporation may not lend money to or guarantee the
obligation of a director of the corporation unless:
(a) The particular loan or guarantee is approved by a majority of
the votes represented by the outstanding voting shares of all classes,
voting as a single voting group, excluding the votes of shares owned by
or voted under the control of the benefited director; or
(b) The corporation’s board of directors determines that the loan
or guarantee benefits the corporation and either approves the specific
loan or guarantee or a general plan authorizing the loans and guarantees.
(2) The fact that a loan or guarantee is made in violation of this
section does not affect the borrower’s liability on the loan.
(3) This section does not apply to loans and guarantees authorized
by statute regulating any special class of corporations. [1987 c.52 §87] (1) Unless the
director complies with the applicable standards of conduct described in
ORS 60.357, a director who votes for or assents to a distribution made in
violation of this chapter or the articles of incorporation is personally
liable to the corporation for the amount of the distribution that exceeds
what could have been distributed without violating this chapter or the
articles of incorporation.
(2) A director held liable for an unlawful distribution under
subsection (1) of this section is entitled to contribution:
(a) From every other director who voted for or assented to the
distribution without complying with the applicable standards of conduct
described in ORS 60.357; and
(b) From each shareholder for the amount the shareholder accepted
knowing the distribution was made in violation of this chapter or the
articles of incorporation. [1987 c.52 §88](Officers) (1) A corporation has the officers
described in its bylaws or appointed by the board of directors in
accordance with the bylaws which shall include a president and a
secretary.
(2) A duly appointed officer may appoint one or more officers or
assistant officers if such appointment is authorized by the bylaws or the
board of directors.
(3) The secretary shall have the responsibility for preparing
minutes of the directors’ and shareholders’ meetings and for
authenticating records of the corporation.
(4) The same individual may simultaneously hold more than one
office in a corporation. [1987 c.52 §89] Each officer has the authority and shall
perform the duties set forth in the bylaws or, to the extent consistent
with the bylaws, the duties prescribed by the board of directors or by
direction of an officer authorized by the board of directors to prescribe
the duties of other officers. [1987 c.52 §90] (1) An officer with
discretionary authority shall discharge the duties of an officer under
that authority:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and
(c) In a manner the officer reasonably believes to be in the best
interests of the corporation.
(2) In discharging the duties of an officer, an officer is entitled
to rely on information, opinions, reports or statements, including
financial statements and other financial data, if prepared or presented
by:
(a) One or more officers or employees of the corporation whom the
officer reasonably believes to be reliable and competent in the matters
presented; or
(b) Legal counsel, public accountants or other persons as to
matters the officer reasonably believes are within the person’s
professional or expert competence.
(3) An officer is not acting in good faith if the officer has
knowledge concerning the matter in question that makes reliance otherwise
permitted by subsection (2) of this section unwarranted.
(4) An officer is not liable for any action taken as an officer, or
any failure to take any action, if the officer performed the duties of
the office in compliance with this section. [1987 c.52 §91] (1) An officer may
resign at any time by delivering notice to the corporation. A resignation
is effective when the notice is effective under ORS 60.034 (5) unless the
notice specifies a later effective time. If a resignation is made
effective at a later time and the corporation accepts the future
effective time, its board of directors or the appointing officer may fill
the pending vacancy before the effective time if the board of directors
or the appointing officer provides that the successor does not take
office until the effective time.
(2) An officer may be removed at any time with or without cause by:
(a) The board of directors;
(b) The appointing officer, unless otherwise provided by the bylaws
or the board of directors; or
(c) Any other officer if authorized by the bylaws or the board of
directors.
(3) Once delivered, a notice of resignation is irrevocable unless
revocation is permitted by the board of directors.
(4) As used in this section, “appointing officer” means the officer
or any successor to that officer who appointed the officer resigning or
being removed. [1987 c.52 §92; 1993 c.403 §6; 2003 c.80 §13] (1) The appointment of an
officer does not itself create contract rights.
(2) Removal or resignation of an officer does not affect the
contract rights, if any, of the corporation or the officer. [1987 c.52
§93](Indemnification)
(1) “Corporation” includes any domestic or foreign predecessor
entity of a corporation in a merger or other transaction in which the
predecessor’s existence ceased upon consummation of the transaction.
(2) “Director” means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is
or was serving at the corporation’s request as a director, officer,
partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise. A director is considered to be serving an employee
benefit plan at the corporation’s request if the director’s duties to the
corporation also impose duties on or otherwise involve services by the
director to the plan or to participants in or beneficiaries of the plan.
“Director” includes, unless the context requires otherwise, the estate or
personal representative of a director.
(3) “Expenses” include counsel fees.
(4) “Liability” means the obligation to pay a judgment, settlement,
penalty, fine, including an excise tax assessed with respect to an
employee benefit plan or reasonable expenses incurred with respect to a
proceeding.
(5) “Officer” means an individual who is or was an officer of a
corporation or an individual who, while an officer of a corporation, is
or was serving at the corporation’s request as a director, officer,
partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise. An officer is considered to be serving an employee
benefit plan at the corporation’s request if the officer’s duties to the
corporation also impose duties on or include services by the officer to
the employee benefit plan or to participants in or beneficiaries of the
plan. “Officer” includes, unless the context requires otherwise, the
estate or personal representative of an officer.
(6) “Party” includes an individual who was, is or is threatened to
be made a named defendant or respondent in a proceeding.
(7) “Proceeding” means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal. [1987 c.52 §94] (1) Except as provided in
subsection (4) of this section, a corporation may indemnify an individual
made a party to a proceeding because the individual is or was a director
against liability incurred in the proceeding if:
(a) The conduct of the individual was in good faith;
(b) The individual reasonably believed that the individual’s
conduct was in the best interests of the corporation, or at least not
opposed to its best interests; and
(c) In the case of any criminal proceeding, the individual had no
reasonable cause to believe the individual’s conduct was unlawful.
(2) A director’s conduct with respect to an employee benefit plan
for a purpose the director reasonably believed to be in the interests of
the participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subsection (1)(b) of this section.
(3) The termination of a proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of
conduct described in this section.
(4) A corporation may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation;
or
(b) In connection with any other proceeding charging improper
personal benefit to the director in which the director was adjudged
liable on the basis that personal benefit was improperly received by the
director.
(5) Indemnification permitted under this section in connection with
a proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding. [1987
c.52 §95] Unless limited by its articles of
incorporation, a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding
to which the director was a party because of being a director of the
corporation against reasonable expenses incurred by the director in
connection with the proceeding. [1987 c.52 §96] (1) A corporation may pay for or
reimburse the reasonable expenses incurred by a director who is a party
to a proceeding in advance of final disposition of the proceeding if:
(a) The director furnishes the corporation a written affirmation of
the director’s good faith belief that the director has met the standard
of conduct described in ORS 60.391; and
(b) The director furnishes the corporation a written undertaking,
executed personally or on the director’s behalf, to repay the advance if
it is ultimately determined that the director did not meet the standard
of conduct.
(2) The undertaking required by subsection (1)(b) of this section
must be an unlimited general obligation of the director but need not be
secured and may be accepted without reference to financial ability to
make repayment.
(3) Any authorization of payments under this section may be made by
provision in the articles of incorporation, or bylaws, by a resolution of
the shareholders or board of directors or by contract. [1987 c.52 §97] Unless the corporation’s
articles of incorporation provide otherwise, a director of the
corporation who is a party to a proceeding may apply for indemnification
to the court conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court after giving any
notice the court considers necessary may order indemnification if it
determines:
(1) The director is entitled to mandatory indemnification under ORS
60.394, in which case the court shall also order the corporation to pay
the director’s reasonable expenses incurred to obtain court-ordered
indemnification; or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not
the director met the standard of conduct set forth in ORS 60.391 or was
adjudged liable as described in ORS 60.391 (4), whether the liability is
based on a judgment, settlement or proposed settlement or otherwise.
[1987 c.52 §98] (1) A
corporation may not indemnify a director under ORS 60.391 unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances
because the director has met the standard of conduct set forth in ORS
60.391.
(2) A determination that indemnification of a director is
permissible shall be made:
(a) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(b) If a quorum cannot be obtained under paragraph (a) of this
subsection, by a majority vote of a committee duly designated by the
board of directors consisting solely of two or more directors not at the
time parties to the proceeding. However, directors who are parties to the
proceeding may participate in designation of the committee;
(c) By special legal counsel selected by the board of directors or
its committee in the manner prescribed in paragraph (a) or (b) of this
subsection or, if a quorum of the board of directors cannot be obtained
under paragraph (a) of this subsection and a committee cannot be
designated under paragraph (b) of this subsection, the special legal
counsel shall be selected by majority vote of the full board of
directors, including directors who are parties to the proceeding; or
(d) By the shareholders.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall be
made by those entitled under subsection (2)(c) of this section to select
counsel. [1987 c.52 §99] Unless a
corporation’s articles of incorporation provide otherwise:
(1) An officer of the corporation is entitled to mandatory
indemnification under ORS 60.394, and is entitled to apply for
court-ordered indemnification under ORS 60.401, in each case to the same
extent as a director under ORS 60.394 and 60.401.
(2) The corporation may indemnify and advance expenses under ORS
60.387 to 60.411 to an officer, employee or agent of the corporation to
the same extent as to a director. [1987 c.52 §100] A corporation may purchase and maintain insurance
on behalf of an individual against liability asserted against or incurred
by the individual who is or was a director, officer, employee or agent of
the corporation or who, while a director, officer, employee or agent of
the corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. The corporation may purchase and
maintain the insurance even if the corporation has no power to indemnify
the individual against the same liability under ORS 60.391 or 60.394.
[1987 c.52 §101] (1) The indemnification
and provisions for advancement of expenses provided by ORS 60.387 to
60.411 shall not be deemed exclusive of any other rights to which
directors, officers, employees or agents may be entitled under the
corporation’s articles of incorporation or bylaws, any agreement, general
or specific action of its board of directors, vote of shareholders or
otherwise, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person. Specifically
and not by way of limitation, a corporation shall have the power to make
or agree to make any further indemnification, including advancement of
expenses, of:
(a) Any director as authorized by the articles of incorporation,
any bylaws approved, adopted or ratified by the shareholders or any
resolution or agreement approved, adopted or ratified, before or after
such indemnification or agreement is made, by the shareholders, provided
that no such indemnification shall indemnify any director from or on
account of acts or omissions for which liability could not be eliminated
under ORS 60.047 (2)(d); and
(b) Any officer, employee or agent who is not a director as
authorized by its articles of incorporation or bylaws, general or
specific action of its board of directors or agreement. Unless the
articles of incorporation, or any such bylaws, agreement or resolution
provide otherwise, any determination as to any further indemnity under
this paragraph shall be made in accordance with ORS 60.404.
(2) If articles of incorporation limit indemnification or advance
of expenses, any indemnification and advance of expenses are valid only
to the extent consistent with the articles of incorporation.
(3) ORS 60.387 to 60.411 do not limit a corporation’s power to pay
or reimburse expenses incurred by a director in connection with the
director’s appearance as a witness in a proceeding at a time when the
director has not been made a named defendant or respondent to a
proceeding. [1987 c.52 §102; 1991 c.883 §7]AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS(Amendment of Articles of Incorporation) (1) A corporation may amend its articles of
incorporation at any time to add, change or delete any provision if the
articles of incorporation as amended would be permitted under this
chapter as of the effective date of the amendment.
(2) A shareholder of the corporation does not have a vested
property right resulting from any provision in the articles of
incorporation, including provisions relating to management, control,
capital structure, dividend entitlement, purpose or duration of the
corporation. [1987 c.52 §103] Unless the articles of
incorporation provide otherwise, a corporation’s board of directors may
adopt one or more amendments to the corporation’s articles of
incorporation without shareholder action to:
(1) Extend the duration of the corporation if it was incorporated
at a time when limited duration was required by law;
(2) Delete the names and addresses of the initial directors;
(3) Delete the name and address of the initial registered agent or
registered office, if a statement of change is on file with the office of
the Secretary of State;
(4) Delete the mailing address if an annual report has been filed
with the office of the Secretary of State;
(5) Change the corporate name by substituting the word
“corporation,” “incorporated,” “company,” “limited,” or the abbreviation
“corp.,” “inc.,” “co.” or “ltd.,” for a similar word or abbreviation in
the name, or by adding, deleting or changing a geographical attribution
for the name;
(6) In the case of a corporation registered as an open-end
investment company under the Investment Company Act of 1940, as amended,
increase or decrease the number of shares the corporation is authorized
to issue; or
(7) Make any other change expressly permitted by this chapter to be
made without shareholder action. [1987 c.52 §104; 1989 c.1040 §23; 1991
c.883 §8; 1997 c.249 §25] (1) A
corporation’s board of directors may propose one or more amendments to
the articles of incorporation for submission to the shareholders.
(2) For the amendment to be adopted, the board of directors shall
adopt a resolution setting forth the proposed amendment and directing
that it be submitted to a vote at a meeting of shareholders, which may be
either an annual or a special meeting, and the shareholders entitled to
vote on the amendment must approve the amendment as provided in
subsection (5) of this section.
(3) The board of directors may condition its submission of the
proposed amendment on any basis.
(4) The corporation shall notify each shareholder, whether or not
entitled to vote, of the proposed shareholders’ meeting in accordance
with ORS 60.214. The notice of meeting must also state that the purpose,
or one of the purposes, of the meeting is to consider the proposed
amendment and contain or be accompanied by a copy or summary of the
amendment.
(5) Unless this chapter, the articles of incorporation or the board
of directors acting pursuant to subsection (3) of this section require a
greater vote or a vote by voting groups, the amendment to be adopted must
be approved by:
(a) A majority of the votes entitled to be cast on the amendment by
any voting group with which the amendment would create dissenters’
rights; and
(b) The votes required by ORS 60.241 and 60.244 by every other
voting group entitled to vote on the amendment. [1987 c.52 §105; 1989
c.1040 §24] (1) The holders of
the outstanding shares of a class are entitled to vote as a separate
voting group if shareholder voting is otherwise required by this chapter
on a proposed amendment if the amendment would:
(a) Increase or decrease the aggregate number of authorized shares
of the class;
(b) Effect an exchange or reclassification of all or part of the
shares of the class into shares of another class;
(c) Effect an exchange or reclassification, or create the right of
exchange, of all or part of the shares of another class into shares of
the class;
(d) Change the designation, rights, preferences or limitations of
all or part of the shares of the class;
(e) Change the shares of all or part of the class into a different
number of shares of the same class;
(f) Create a new class of shares having rights or preferences with
respect to distributions or to dissolution that are prior, superior or
substantially equal to the shares of the class;
(g) Increase the rights, preferences or number of authorized shares
of any class that, after giving effect to the amendment, have rights or
preferences with respect to distributions or to dissolution that are
prior, superior, or substantially equal to the shares of the class;
(h) Limit or deny an existing preemptive right of all or part of
the shares of the class; or
(i) Cancel or otherwise affect rights to distributions or dividends
that have accumulated but not yet been declared on all or part of the
shares of the class.
(2) If a proposed amendment would affect a series of a class of
shares in one or more of the ways described in subsection (1) of this
section, the shares of that series are entitled to vote as a separate
voting group on the proposed amendment.
(3) If a proposed amendment that entitles two or more series of
shares to vote as separate voting groups under this section would affect
those two or more series in the same or a substantially similar way, the
shares of all the series so affected must vote together as a single
voting group on the proposed amendment.
(4) A class or series is entitled to the voting rights granted by
this section although the articles of incorporation provide that the
shares are nonvoting shares. [1987 c.52 §106] If a corporation has
not yet issued shares, its incorporators or the board of directors may
adopt one or more amendments to the corporation’s articles of
incorporation. If any such amendment relates to the duration, purposes,
authorized capital, rights or preferences of shares or internal affairs,
the incorporators or board of directors shall immediately notify in
writing each person who is a party to any agreement for the subscription
of stock of the corporation. Such notice shall set forth the text of the
amendment and state that the subscriber may, within 30 days after
delivery or mailing of the notice of amendment, rescind the subscription
by notice in writing delivered or mailed to the incorporators or board of
directors at an address specified. If a notice of rescission is not
delivered or mailed within 30 days, the subscriber may not thereafter
assert the fact of the amendment as the basis for avoiding the
subscription agreement or asserting any claim against any person. [1987
c.52 §107] (1) A corporation amending its
articles of incorporation shall deliver articles of amendment to the
office for filing.
(2) Articles of amendment shall contain:
(a) The name of the corporation;
(b) The text of each amendment adopted;
(c) If an amendment provides for an exchange, reclassification or
cancellation of issued shares, provisions for implementing the amendment
if not contained in the amendment itself;
(d) The date of each amendment’s adoption;
(e) If an amendment was adopted by the incorporators or board of
directors without shareholder action, a statement to that effect and a
statement that shareholder action was not required; and
(f) If an amendment was approved by the shareholders:
(A) The designation, number of outstanding shares, number of votes
entitled to be cast by each voting group entitled to vote separately on
the amendment; and
(B) The total number of votes cast for and against the amendment by
each voting group entitled to vote separately on the amendment. [1987
c.52 §108] (1) A corporation’s
board of directors may restate its articles of incorporation at any time
with or without shareholder action. If a corporation has not yet issued
shares, its incorporators or the board of directors may adopt restated
articles of incorporation, subject to the requirements of ORS 60.444.
(2) The restatement may include one or more amendments to the
articles. If the restatement includes an amendment requiring shareholder
approval, it must be adopted as provided in ORS 60.437.
(3) If the board of directors submits a restatement for shareholder
action, the corporation shall notify each shareholder, whether or not
entitled to vote, of the proposed shareholders’ meeting in accordance
with ORS 60.214. The notice must also state that the purpose, or one of
the purposes, of the meeting is to consider the proposed restatement and
contain or be accompanied by a copy of the restatement that identifies
any amendment or other change it would make in the articles.
(4) A corporation restating its articles of incorporation shall
deliver to the office for filing articles of restatement setting forth
the name of the corporation and the text of the restated articles of
incorporation together with a certificate setting forth:
(a) Whether the restatement contains an amendment to the articles
requiring shareholder approval and, if it does not, that the board of
directors adopted the restatement; or
(b) If the restatement contains an amendment to the articles
requiring shareholder approval, the information required by ORS 60.447.
(5) Restated articles of incorporation shall contain all statements
required to be included in original articles of incorporation except that
no statement is required to be made with respect to:
(a) The names and addresses of the incorporators or the initial or
present registered office or agent; or
(b) The mailing address of the corporation if an annual report has
been filed with the office of the Secretary of State.
(6) Duly adopted restated articles of incorporation supersede the
original articles of incorporation and all amendments to them.
(7) The Secretary of State may certify restated articles of
incorporation, as the articles of incorporation currently in effect,
without including the certificate information required by subsection (4)
of this section. [1987 c.52 §109; 1989 c.1040 §25] (1) A corporation’s
articles of incorporation may be amended without action by the board of
directors or shareholders to carry out a plan of reorganization ordered
or decreed by a court of competent jurisdiction under federal statute if
the articles of incorporation after amendment contain only provisions
required or permitted by ORS 60.047.
(2) The individual or individuals designated by the court shall
deliver to the office for filing articles of amendment setting forth:
(a) The name of the corporation;
(b) The text of each amendment approved by the court;
(c) The date of the court’s order or decree approving the articles
of amendment;
(d) The title of the reorganization proceeding in which the order
or decree was entered; and
(e) A statement that the court had jurisdiction of the proceeding
under federal statute.
(3) Shareholders of a corporation undergoing reorganization do not
have dissenters’ rights except as and to the extent provided in the
reorganization plan.
(4) This section does not apply after entry of a final decree in
the reorganization proceeding even though the court retains jurisdiction
of the proceeding for limited purposes unrelated to consummation of the
reorganization plan. [1987 c.52 §110] An amendment to articles of
incorporation does not affect a cause of action existing against or in
favor of the corporation, a proceeding to which the corporation is a
party or the existing rights of persons other than shareholders of the
corporation. An amendment changing a corporation’s name does not abate a
proceeding brought by or against the corporation in its former name.
[1987 c.52 §111](Amendment of Bylaws)
(1) A corporation’s board of directors may amend or repeal the
corporation’s bylaws unless:
(a) The articles of incorporation or this chapter reserve this
power exclusively to the shareholders in whole or in part; or
(b) The shareholders in amending or repealing a particular bylaw
provide expressly that the board of directors may not amend or repeal
that bylaw.
(2) A corporation’s shareholders may amend or repeal the
corporation’s bylaws even though the bylaws may also be amended or
(1) If expressly authorized by the articles of
incorporation, the shareholders may adopt or amend a bylaw that fixes a
greater quorum or voting requirement for shareholders, or voting groups
of shareholders, than is required by this chapter. The adoption or
amendment of a bylaw that adds, changes or deletes a greater quorum or
voting requirement for shareholders must meet the same quorum requirement
and be adopted by the same vote and voting groups required to take action
under the quorum and voting requirement then in effect or the quorum and
voting requirement proposed to be adopted, whichever is greater.
(2) A bylaw that fixes a greater quorum or voting requirement for
shareholders under subsection (1) of this section may not be adopted,
(1) A bylaw provision that fixes a greater quorum or voting requirement
for the board of directors may be amended or repealed:
(a) If the provision was originally adopted by the shareholders,
only by the shareholders; or
(b) If the provision was originally adopted by the board of
directors, either by the shareholders or by the board of directors.
(2) A bylaw provision adopted or amended by the shareholders that
fixes a greater quorum or voting requirement for the board of directors
may provide that it may be amended or repealed only by a specified vote
CONVERSION, MERGER AND SHARE EXCHANGE
(1) “Business entity” means:
(a) Any of the following for-profit entities:
(A) A professional corporation organized under ORS chapter 58,
predecessor law or comparable law of another jurisdiction;
(B) A corporation organized under this chapter, predecessor law or
comparable law of another jurisdiction;
(C) A limited liability company organized under ORS chapter 63 or
comparable law of another jurisdiction;
(D) A partnership organized in Oregon after January 1, 1998, or
that is registered as a limited liability partnership, or that has
elected to be governed by ORS chapter 67, and a partnership governed by
law of another jurisdiction that expressly provides for conversions and
mergers; and
(E) A limited partnership organized under ORS chapter 70,
predecessor law or comparable law of another jurisdiction; and
(b) A cooperative organized under ORS chapter 62, predecessor law
or comparable law of another jurisdiction.
(2) “Organizational document” means the following for an Oregon
business entity or, for a foreign business entity, a document equivalent
to the following:
(a) In the case of a corporation, professional corporation or
cooperative, articles of incorporation;
(b) In the case of a limited liability company, articles of
organization;
(c) In the case of a partnership, a partnership agreement and, for
a limited liability partnership, its registration; and
(d) In the case of a limited partnership, a certificate of limited
partnership.
(3) “Owner” means a:
(a) Shareholder of a corporation or of a professional corporation;
(b) Member or shareholder of a cooperative;
(c) Member of a limited liability company;
(d) Partner of a partnership; and
(e) General partner or limited partner of a limited partnership.
[1999 c.362 §6; 2003 c.80 §14] (1) A business entity other than a corporation
may be converted to a corporation organized under this chapter, and a
corporation organized under this chapter may be converted to another
business entity organized under the laws of this state, if conversion is
permitted by the statutes governing the other business entity, by
approving a plan of conversion and filing articles of conversion. A
corporation organized under this chapter may be converted to a business
entity organized under the laws of another jurisdiction if:
(a) The conversion is permitted by the laws of that jurisdiction;
(b) A plan of conversion is approved by the converting corporation;
(c) Articles of conversion are filed in this state;
(d) The converted business entity submits an application to
transact business as a foreign business entity of that type to the
Secretary of State for filing and meets all other requirements prescribed
under the laws of this state for authorization to transact business as a
foreign business entity of that type; and
(e) The corporation complies with all requirements imposed under
the laws of the other jurisdiction with respect to the conversion.
(2) The plan of conversion shall set forth:
(a) The name and type of the business entity prior to conversion;
(b) The name and type of the business entity after conversion;
(c) A summary of the material terms and conditions of the
conversion;
(d) The manner and basis of converting the ownership interests of
each owner into ownership interests or obligations of the converted
business entity or any other business entity, or into cash or other
property in whole or in part; and
(e) Any additional information required in the organizational
document of the converted business entity by the statutes governing that
type of business entity.
(3) The plan of conversion may set forth other provisions relating
to the conversion. [1999 c.362 §7; 2001 c.315 §12; 2003 c.80 §15] (1) A plan of conversion shall
be approved as follows:
(a) In the case of a corporation, in the manner provided in ORS
60.487 for mergers; and
(b) In the case of a business entity other than a corporation, as
provided by the statutes governing that business entity.
(2) After a conversion is approved, and at any time before articles
of conversion are filed, the planned conversion may be abandoned, subject
to any contractual rights:
(a) By a corporation, in the manner provided in ORS 60.487 (9); and
(b) By a business entity that planned to convert to a corporation,
in accordance with the procedure set forth in the plan of conversion or,
if none is set forth, in the manner permitted by the statutes governing
that business entity. [1999 c.362 §8] (1) After conversion is approved by
the owners, the converting business entity shall file articles of
conversion, which shall state the name and type of business entity prior
to conversion and the name and type of business entity after conversion,
and shall include the plan of conversion.
(2) The conversion takes effect at the later of the date and time
determined pursuant to ORS 60.011 or the date and time determined
pursuant to the statutes governing the business entity that is not a
corporation. [1999 c.362 §9; 2001 c.315 §7] (1) When a
conversion to or from a corporation pursuant to ORS 60.472 takes effect:
(a) The business entity continues its existence despite the
conversion;
(b) Title to all real estate and other property owned by the
converting business entity is vested in the converted business entity
without reversion or impairment;
(c) All obligations of the converting business entity, including,
without limitation, contractual, tort, statutory and administrative
obligations, are obligations of the converted business entity;
(d) An action or proceeding pending against the converting business
entity or its owners may be continued as if the conversion had not
occurred, or the converted business entity may be substituted as a party
to the action or proceeding;
(e) The ownership interests of each owner that are to be converted
into ownership interests or obligations of the converted business entity
or any other business entity, or into cash or other property, are
converted as provided in the plan of conversion;
(f) Liability of an owner for obligations of the business entity,
including, without limitation, contractual, tort, statutory and
administrative obligations, shall be determined:
(A) As to liabilities incurred prior to conversion, according to
the laws applicable prior to conversion; and
(B) As to liabilities incurred after conversion, according to the
laws applicable after conversion, except as provided in paragraph (g) of
this subsection;
(g) If prior to conversion an owner of a business entity was a
partner of a partnership or general partner of a limited partnership and
was personally liable for the business entity’s liabilities, and after
conversion is an owner normally protected from personal liability, then
such owner shall continue to be personally liable for the business
entity’s liabilities incurred during the 12 months following conversion,
if the other party or parties to the transaction reasonably believed that
the owner would be personally liable and had not received notice of the
conversion; and
(h) Unless the converted business entity is a partnership, the
registration of an assumed business name of a business entity pursuant to
ORS chapter 648 shall continue as the assumed business name of the
converted business entity. If the converted business entity is a
partnership, the converting business entity shall amend or cancel the
registration of the assumed business name under ORS chapter 648, and the
partners of the partnership shall register the name as an assumed
business name under ORS chapter 648.
(2) Owners of the business entity that converted are entitled to
the rights provided in the plan of conversion and:
(a) In the case of shareholders of a corporation, the right to
dissent and obtain payment of the fair value of the shareholder’s shares
as provided in ORS 60.551 to 60.594; and
(b) In the case of owners of business entities other than
corporations, the rights provided in the statutes, common law and private
agreements applicable to the business entity prior to conversion,
including, without limitation, any rights to dissent, to dissociate, to
withdraw, to recover for breach of any duty or obligation owed by the
other owners, and to obtain an appraisal or payment for the value of an
owner’s interest. [1999 c.362 §10; 2001 c.315 §2] (1)(a) One or more business entities may merge into
a corporation organized under this chapter if the merger is permitted by
the statutes governing each other business entity that is a party to the
merger, a plan of merger is approved by each business entity that is a
party to the merger and articles of merger are filed. A corporation
organized under this chapter may be merged into a business entity
organized under the laws of this state or under the laws of another
jurisdiction, other than a foreign corporation, if:
(A) The merger is permitted by the laws of this state or by the
laws of the other jurisdiction that govern the other business entity;
(B) A plan of merger is approved by each business entity that is a
party to the merger;
(C) Articles of merger are filed in this state; and
(D) The corporation complies with all requirements imposed under
the laws of this state and, if applicable, the laws of the other
jurisdiction with respect to the merger.
(b) A merger of one or more domestic corporations with one or more
foreign corporations is governed by ORS 60.501.
(2) The plan of merger shall set forth:
(a) The name and type of each business entity planning to merge;
(b) The name and type of the business entity that will survive;
(c) A summary of the material terms and conditions of the merger;
(d) The manner and basis of converting the shares or other
ownership interests of each owner into shares, ownership interests or
obligations of the surviving business entity or any other business
entity, or into cash or other property in whole or in part; and
(e) If any party is a business entity other than a corporation, any
additional information required for a merger by the statutes governing
that business entity.
(3) The plan of merger may set forth:
(a) Amendments to the articles of incorporation of a corporation,
if the corporation is the surviving business entity; and
(b) Other provisions relating to the merger.
(4) One or more corporations may merge with a nonprofit corporation
under ORS 65.481 to 65.504. [1987 c.52 §115; 1989 c.1010 §176; 1991 c.883
§9; 1999 c.362 §11; 2001 c.315 §13; 2003 c.80 §16] (1) A corporation may acquire all of the
outstanding shares of one or more classes or series of another
corporation if the board of directors of each corporation adopts a plan
of exchange and, if required by ORS 60.487, the shareholders of each
corporation approve the exchange.
(2) The plan of exchange must set forth:
(a) The name of the corporation whose shares will be acquired and
the name of the acquiring corporation;
(b) A summary of the material terms and conditions of the exchange;
and
(c) The manner and basis of exchanging the shares to be acquired
for shares, obligations, or other securities of the acquiring or any
other corporation or for cash or for other property in full or part.
(3) The plan of exchange may set forth other provisions relating to
the exchange.
(4) This section does not limit the power of a corporation to
acquire all or part of the shares of one or more classes or series of
another corporation through a voluntary exchange or otherwise. [1987 c.52
§116; 1989 c.171 §7; 1989 c.1040 §27; 2003 c.80 §17] (1) After
adopting a plan of merger or share exchange, the board of directors of
each corporation party to the merger and the board of directors of the
corporation whose shares will be acquired in the share exchange, shall
submit the plan of merger, except as provided in subsection (7) of this
section, or share exchange for approval by its shareholders.
(2) For a plan of merger or share exchange to be approved:
(a) The board of directors shall direct by resolution that the plan
of merger or share exchange be submitted to a vote at a meeting of
shareholders, which may be either an annual or a special meeting; and
(b) The shareholders entitled to vote must approve the plan.
(3) The board of directors may condition its submission of the
proposed merger or share exchange on any basis.
(4) The corporation shall notify each shareholder, whether or not
entitled to vote, of the proposed shareholders’ meeting in accordance
with ORS 60.214. The notice must also state that the purpose, or one of
the purposes, of the meeting is to consider the plan of merger or share
exchange and contain or be accompanied by a copy or summary of the plan.
(5) Unless this chapter, the articles of incorporation or the board
of directors, acting pursuant to subsection (3) of this section, requires
a greater vote or a vote by voting groups, the plan of merger or share
exchange to be authorized shall be approved by each voting group entitled
to vote separately on the plan by a majority of all the votes entitled to
be cast on the plan by that voting group.
(6) Separate voting by voting groups is required:
(a) On a plan of merger if the plan contains a provision that, if
contained in a proposed amendment to articles of incorporation, would
require action by one or more separate voting groups on the proposed
amendment under ORS 60.441, except that separate voting by a voting group
is not required if:
(A) Under the plan of merger, the shares that constitute the voting
group are to be converted into shares, obligations, other securities,
cash or other property with a value at least equal to the value the
shares would receive in a liquidation of the corporation. For purposes of
determining the value the shares would receive in a liquidation of the
corporation, the value of property available for distribution to all
shareholders in the liquidation shall be assumed to be equal to the total
value of shares, obligations, other securities, cash or other property
into which all shares of the corporation are to be converted under the
plan of merger; or
(B) The articles of incorporation provide that the voting group is
not entitled to vote separately on a plan of merger; and
(b) On a plan of share exchange by each class or series of shares
included in the exchange, with each class or series constituting a
separate voting group.
(7) Action by the shareholders of the surviving corporation on a
plan of merger is not required if:
(a) The articles of incorporation of the surviving corporation will
not differ, except for amendments enumerated in ORS 60.434, from its
articles before the merger;
(b) Each shareholder of the surviving corporation whose shares were
outstanding immediately before the effective date of the merger will hold
the same number of shares, with identical designations, preferences,
limitations and relative rights, immediately after;
(c) The number of voting shares outstanding immediately after the
merger, plus the number of voting shares issuable as a result of the
merger, either by the conversion of securities issued pursuant to the
merger or the exercise of rights and warrants issued pursuant to the
merger, will not exceed by more than 20 percent the total number of
voting shares of the surviving corporation outstanding immediately before
the merger; and
(d) The number of participating shares outstanding immediately
after the merger, plus the number of participating shares issuable as a
result of the merger, either by the conversion of securities issued
pursuant to the merger or the exercise of rights and warrants issued
pursuant to the merger, will not exceed by more than 20 percent the total
number of participating shares outstanding immediately before the merger.
(8) As used in subsection (7) of this section:
(a) “Participating shares” means shares that entitle their holders
to participate without limitation in distributions.
(b) “Voting shares” means shares that entitle their holders to vote
unconditionally in elections of directors.
(9) After a merger or share exchange is authorized, and at any time
before articles of merger or share exchange are filed, the planned merger
or share exchange may be abandoned, subject to any contractual rights,
without further shareholder action, in accordance with the procedure set
forth in the plan of merger or share exchange or, if none is set forth,
in the manner determined by the board of directors.
(10) If a party to a plan of merger is a business entity other than
a corporation, approval of the plan, and abandonment of the plan after
approval, shall be in accordance with the statutes governing that
business entity. [1987 c.52 §117; 1989 c.1040 §28; 1991 c.883 §10; 1993
c.403 §7; 1999 c.362 §12] (1) A parent corporation owning at
least 90 percent of the outstanding shares of each class of a subsidiary
corporation may merge the subsidiary into itself, or may merge itself
into the subsidiary, without approval of the shareholders of the parent
or subsidiary.
(2) If the parent will be the surviving corporation:
(a) The board of directors of the parent shall adopt a plan of
merger that sets forth:
(A) The names of the parent and subsidiary; and
(B) The manner and basis of converting the shares of the subsidiary
into shares, obligations or other securities of the parent or any other
corporation or into cash or other property in whole or part, or of
canceling any part of the shares;
(b) The parent shall mail a copy or summary of the plan of merger
to each shareholder of the subsidiary who does not waive the mailing
requirement in writing;
(c) The parent may not deliver the articles of merger to the office
for filing until at least 30 days after the date the parent mailed a copy
of the plan of merger to each shareholder of the subsidiary who did not
waive the mailing requirement; and
(d) Articles of merger under this subsection may not contain
amendments to the articles of incorporation of the parent corporation,
except for amendments listed in ORS 60.434.
(3) If the parent will not be the surviving corporation:
(a) The board of directors of the parent shall adopt a plan of
merger that sets forth:
(A) The names of the parent and subsidiary;
(B) The manner and basis of converting the shares of the parent
into shares of the surviving corporation, which shall ensure that each
shareholder of the parent immediately before the merger takes effect will
immediately thereafter:
(i) Hold the same percentage of the total of each class of shares
of the surviving corporation owned by former shareholders of the parent
as the shareholder held in each class of shares of the parent; and
(ii) Hold shares of the surviving corporation having the same
rights, preferences, privileges and restrictions as the shares of the
parent held by such shareholder immediately before the merger takes
effect;
(C) Amendments to the articles of incorporation of the surviving
corporation so that the articles are identical to the articles of
incorporation of the parent in effect immediately before the merger takes
effect, except for amendments to the articles of incorporation of the
parent listed in ORS 60.434; and
(D) Provisions relating to the outstanding shares of the subsidiary
including cancellation of the shares held by the parent. If under the
plan of merger the shareholders of the subsidiary other than the parent
will not be shareholders of the surviving corporation, the plan shall
also set forth the manner and basis of converting the shares of the
subsidiary held by such shareholders into obligations or other securities
of the surviving corporation or shares, obligations or other securities
of any other corporation or into cash or other property in whole or in
part;
(b) The parent shall mail a copy or summary of the plan of merger
to each shareholder of the subsidiary who does not waive the mailing
requirement in writing;
(c) The parent may not deliver the articles of merger to the office
for filing until at least 30 days after the date the parent mailed a copy
or summary of the plan of merger to each shareholder of the subsidiary
who did not waive the mailing requirement; and
(d) The surviving corporation shall be a domestic corporation.
[1987 c.52 §118; 1993 c.403 §8; 1997 c.392 §1] (1) After a plan of
merger or share exchange is approved by the owners of each business
entity, or adopted by a board of directors if shareholder approval is not
required, the surviving or acquiring business entity shall deliver to the
office of the Secretary of State, for filing, articles of merger or
articles of share exchange setting forth:
(a) The plan of merger or share exchange;
(b) For each corporation that is a party to the merger or share
exchange:
(A) If shareholder approval was not required, a statement to that
effect; or
(B) If shareholder approval was required:
(i) The designation, number of outstanding shares and number of
votes entitled to be cast by each voting group entitled to vote
separately on the plan as to each corporation; and
(ii) The total number of votes cast for and against the plan by
each voting group entitled to vote separately on the plan; and
(c) For each business entity other than a corporation that is a
party to the merger, a statement that the plan of merger was duly
authorized and approved in accordance with the statutes governing that
business entity.
(2) The merger or share exchange takes effect on the later of the
date and time determined pursuant to ORS 60.011 or the date and time
determined pursuant to the statutes governing any business entity other
than a corporation that is a party to the merger. [1987 c.52 §119; 1999
c.362 §13; 2001 c.104 §18; 2001 c.315 §1] (1) When a merger
involving a corporation takes effect:
(a) Every other business entity that is a party to the merger
merges into the surviving business entity, and the separate existence of
every other party ceases;
(b) Title to all real estate and other property owned by each of
the business entities that were parties to the merger is vested in the
surviving business entity without reversion or impairment;
(c) All obligations of each of the business entities that were
parties to the merger, including, without limitation, contractual, tort,
statutory and administrative obligations, are obligations of the
surviving business entity;
(d) An action or proceeding pending against each of the business
entities or its owners that were parties to the merger may be continued
as if the merger had not occurred, or the surviving business entity may
be substituted as a party to the action or proceeding;
(e) If a corporation is the surviving business entity, its articles
of incorporation are amended to the extent provided in the plan of merger;
(f) The shares or other ownership interests of each owner that are
to be converted into ownership interests or obligations of the surviving
business entity or any other business entity, or into cash or other
property, are converted as provided in the plan of merger;
(g) Liability of an owner for obligations of the business entity,
including, without limitation, contractual, tort, statutory and
administrative obligations, shall be determined:
(A) As to obligations incurred prior to merger, according to the
laws applicable prior to merger; and
(B) As to obligations incurred after merger, according to the laws
applicable after merger, except as provided in paragraph (h) of this
subsection;
(h) If prior to merger an owner of a business entity was a partner
of a partnership or general partner of a limited partnership and was
personally liable for the business entity’s obligations, and after merger
is an owner normally protected from personal liability, then such owner
shall continue to be personally liable for the business entity’s
obligations incurred during the 12 months following merger, if the other
party or parties to the transaction reasonably believed that the owner
would be personally liable and had not received notice of the merger; and
(i) The registration of an assumed business name of a business
entity pursuant to ORS chapter 648 shall continue as the assumed business
name of the surviving business entity.
(2) Owners of the business entities that merged are entitled to the
rights provided in the plan of merger and:
(a) In the case of shareholders, the rights provided in this
chapter; and
(b) In the case of owners of business entities other than
corporations, the rights provided in the statutes applicable to that
business entity, including, without limitation, any rights to dissent, to
dissociate, to withdraw, to recover for breach of any duty or obligation
owed by the other owners, and to obtain an appraisal or payment for the
value of an owner’s interest.
(3) When a share exchange takes effect, the shares of each acquired
corporation are exchanged as provided in the plan, and the former holders
of the shares are entitled only to the exchange rights provided in the
articles of share exchange or to their rights under this chapter. [1987
c.52 §120; 1999 c.362 §14; 2001 c.104 §19] (1) One
or more foreign corporations may merge or enter into a share exchange
with one or more domestic corporations if:
(a) In a merger, the merger is permitted by the law of the state or
country under whose law each foreign corporation is incorporated and each
foreign corporation complied with that law in effecting the merger;
(b) In a share exchange, the corporation whose shares will be
acquired is a domestic corporation, whether or not a share exchange is
permitted by the law of the state or country under whose law the
acquiring corporation is incorporated;
(c) The foreign corporation complies with ORS 60.494 if it is the
surviving corporation of the merger or acquiring corporation of the share
exchange; and
(d) Each domestic corporation complies with the applicable
provisions of ORS 60.481 to 60.491 and, if it is the surviving
corporation of the merger or acquiring corporation of the share exchange,
with ORS 60.481 to 60.494.
(2) Upon the merger or share exchange taking effect, the surviving
foreign corporation of a merger and the acquiring foreign corporation of
a share exchange is deemed:
(a) To appoint the Secretary of State as its agent for service of
process in a proceeding to enforce any obligation or the rights of
dissenting shareholders of each domestic corporation party to the merger
or share exchange; and
(b) To agree that it will promptly pay to the dissenting
shareholders of each domestic corporation party to the merger or share
exchange the amount, if any, to which they are entitled under this
chapter.
(3) This section does not limit the power of a foreign corporation
to acquire all or part of the shares of one or more classes or series of
a domestic corporation through a voluntary exchange or otherwise. [1987
c.52 §121]SALE OF ASSETS(1) A corporation may, on the terms and conditions and for the
consideration determined by the board of directors:
(a) Sell, lease, exchange or otherwise dispose of all or
substantially all of its property in the usual and regular course of
business;
(b) Mortgage, pledge, dedicate to the repayment of indebtedness,
whether with or without recourse, or otherwise encumber any or all of its
property whether or not in the usual and regular course of business; or
(c) Transfer any or all of its property to a corporation all the
shares of which are owned by the corporation.
(2) Unless required by the articles of incorporation, approval by
the shareholders of a transaction described in subsection (1) of this
section is not required. [1987 c.52 §122] (1)
A corporation may sell, lease, exchange or otherwise dispose of all or
substantially all of its property, with or without the goodwill, other
than in the usual and regular course of business, on the terms and
conditions and for the consideration determined by the corporation’s
board of directors, if the board of directors proposes and its
shareholders approve the proposed transaction.
(2) For a transaction to be authorized:
(a) The board of directors shall adopt a resolution directing that
such sale, lease, exchange or other disposition be submitted to a vote at
a meeting of shareholders, which may be either an annual or a special
meeting; and
(b) The shareholders entitled to vote must approve the transaction.
(3) The board of directors may condition its submission of the
proposed transaction on any basis.
(4) The corporation shall notify each shareholder, whether or not
entitled to vote, of the proposed shareholders’ meeting in accordance
with ORS 60.214. The notice must also state that the purpose, or one of
the purposes, of the meeting is to consider the sale, lease, exchange or
other disposition of all or substantially all the property of the
corporation and contain or be accompanied by a description of the
transaction.
(5) Unless the articles of incorporation or the board of directors,
acting pursuant to subsection (3) of this section, require a greater vote
or a vote by voting groups, the transaction to be authorized must be
approved by a majority of all the votes entitled to be cast on the
transaction.
(6) After a sale, lease, exchange or other disposition of property
is authorized, the transaction may be abandoned, subject to any
contractual rights, without further shareholder action.
(7) A transaction that constitutes a distribution is governed by
ORS 60.181 and not by this section. [1987 c.52 §123; 1989 c.1040 §29]DISSENTERS’ RIGHTS(Right to Dissent and Obtain Payment for Shares)
(1) “Beneficial shareholder” means the person who is a beneficial
owner of shares held in a voting trust or by a nominee as the record
shareholder.
(2) “Corporation” means the issuer of the shares held by a
dissenter before the corporate action, or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(3) “Dissenter” means a shareholder who is entitled to dissent from
corporate action under ORS 60.554 and who exercises that right when and
in the manner required by ORS 60.561 to 60.587.
(4) “Fair value,” with respect to a dissenter’s shares, means the
value of the shares immediately before the effectuation of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action unless exclusion
would be inequitable.
(5) “Interest” means interest from the effective date of the
corporate action until the date of payment, at the average rate currently
paid by the corporation on its principal bank loans or, if none, at a
rate that is fair and equitable under all the circumstances.
(6) “Record shareholder” means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on
file with a corporation.
(7) “Shareholder” means the record shareholder or the beneficial
shareholder. [1987 c.52 §124; 1989 c.1040 §30] (1) Subject to subsection (2) of this
section, a shareholder is entitled to dissent from, and obtain payment of
the fair value of the shareholder’s shares in the event of, any of the
following corporate acts:
(a) Consummation of a plan of merger to which the corporation is a
party if shareholder approval is required for the merger by ORS 60.487 or
the articles of incorporation and the shareholder is entitled to vote on
the merger or if the corporation is a subsidiary that is merged with its
parent under ORS 60.491;
(b) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be acquired,
if the shareholder is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all or substantially all
of the property of the corporation other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which
all or substantially all of the net proceeds of the sale will be
distributed to the shareholders within one year after the date of sale;
(d) An amendment of the articles of incorporation that materially
and adversely affects rights in respect of a dissenter’s shares because
it:
(A) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities; or
(B) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be acquired
for cash under ORS 60.141;
(e) Any corporate action taken pursuant to a shareholder vote to
the extent the articles of incorporation, bylaws or a resolution of the
board of directors provides that voting or nonvoting shareholders are
entitled to dissent and obtain payment for their shares; or
(f) Conversion to a noncorporate business entity pursuant to ORS
60.472.
(2) A shareholder entitled to dissent and obtain payment for the
shareholder’s shares under ORS 60.551 to 60.594 may not challenge the
corporate action creating the shareholder’s entitlement unless the action
is unlawful or fraudulent with respect to the shareholder or the
corporation.
(3) Dissenters’ rights shall not apply to the holders of shares of
any class or series if the shares of the class or series were registered
on a national securities exchange or quoted on the National Association
of Securities Dealers, Inc. Automated Quotation System as a National
Market System issue on the record date for the meeting of shareholders at
which the corporate action described in subsection (1) of this section is
to be approved or on the date a copy or summary of the plan of merger is
mailed to shareholders under ORS 60.491, unless the articles of
incorporation otherwise provide. [1987 c.52 §125; 1989 c.1040 §31; 1993
c.403 §9; 1999 c.362 §15] (1) A record
shareholder may assert dissenters’ rights as to fewer than all the shares
registered in the shareholder’s name only if the shareholder dissents
with respect to all shares beneficially owned by any one person and
notifies the corporation in writing of the name and address of each
person on whose behalf the shareholder asserts dissenters’ rights. The
rights of a partial dissenter under this subsection are determined as if
the shares regarding which the shareholder dissents and the shareholder’s
other shares were registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters’ rights as to
shares held on the beneficial shareholder’s behalf only if:
(a) The beneficial shareholder submits to the corporation the
record shareholder’s written consent to the dissent not later than the
time the beneficial shareholder asserts dissenters’ rights; and
(b) The beneficial shareholder does so with respect to all shares
of which such shareholder is the beneficial shareholder or over which
such shareholder has power to direct the vote. [1987 c.52 §126](Procedure for Exercise of Rights) (1) If proposed corporate
action creating dissenters’ rights under ORS 60.554 is submitted to a
vote at a shareholders’ meeting, the meeting notice must state that
shareholders are or may be entitled to assert dissenters’ rights under
ORS 60.551 to 60.594 and be accompanied by a copy of ORS 60.551 to 60.594.
(2) If corporate action creating dissenters’ rights under ORS
60.554 is taken without a vote of shareholders, the corporation shall
notify in writing all shareholders entitled to assert dissenters’ rights
that the action was taken and send the shareholders entitled to assert
dissenters’ rights the dissenters’ notice described in ORS 60.567. [1987
c.52 §127] (1) If proposed
corporate action creating dissenters’ rights under ORS 60.554 is
submitted to a vote at a shareholders’ meeting, a shareholder who wishes
to assert dissenters’ rights shall deliver to the corporation before the
vote is taken written notice of the shareholder’s intent to demand
payment for the shareholder’s shares if the proposed action is
effectuated and shall not vote such shares in favor of the proposed
action.
(2) A shareholder who does not satisfy the requirements of
subsection (1) of this section is not entitled to payment for the
shareholder’s shares under this chapter. [1987 c.52 §128] (1) If proposed corporate action
creating dissenters’ rights under ORS 60.554 is authorized at a
shareholders’ meeting, the corporation shall deliver a written
dissenters’ notice to all shareholders who satisfied the requirements of
ORS 60.564.
(2) The dissenters’ notice shall be sent no later than 10 days
after the corporate action was taken, and shall:
(a) State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;
(b) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of
the first announcement of the terms of the proposed corporate action to
news media or to shareholders and requires that the person asserting
dissenters’ rights certify whether or not the person acquired beneficial
ownership of the shares before that date;
(d) Set a date by which the corporation must receive the payment
demand. This date may not be fewer than 30 nor more than 60 days after
the date the subsection (1) of this section notice is delivered; and
(e) Be accompanied by a copy of ORS 60.551 to 60.594. [1987 c.52
§129] (1) A shareholder sent a dissenters’
notice described in ORS 60.567 must demand payment, certify whether the
shareholder acquired beneficial ownership of the shares before the date
required to be set forth in the dissenters’ notice pursuant to ORS 60.567
(2)(c), and deposit the shareholder’s certificates in accordance with the
terms of the notice.
(2) The shareholder who demands payment and deposits the
shareholder’s shares under subsection (1) of this section retains all
other rights of a shareholder until these rights are canceled or modified
by the taking of the proposed corporate action.
(3) A shareholder who does not demand payment or deposit the
shareholder’s share certificates where required, each by the date set in
the dissenters’ notice, is not entitled to payment for the shareholder’s
shares under this chapter. [1987 c.52 §130] (1) The corporation may restrict the
transfer of uncertificated shares from the date the demand for their
payment is received until the proposed corporate action is taken or the
restrictions released under ORS 60.581.
(2) The person for whom dissenters’ rights are asserted as to
uncertificated shares retains all other rights of a shareholder until
these rights are canceled or modified by the taking of the proposed
corporate action. [1987 c.52 §131](1) Except as provided in ORS 60.584, as soon as
the proposed corporate action is taken, or upon receipt of a payment
demand, the corporation shall pay each dissenter who complied with ORS
60.571, the amount the corporation estimates to be the fair value of the
shareholder’s shares, plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation’s balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, an income
statement for that year and the latest available interim financial
statements, if any;
(b) A statement of the corporation’s estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter’s right to demand payment under
ORS 60.587; and
(e) A copy of ORS 60.551 to 60.594. [1987 c.52 §132; 1987 c.579 §4] (1) If the corporation does not take
the proposed action within 60 days after the date set for demanding
payment and depositing share certificates, the corporation shall return
the deposited certificates and release the transfer restrictions imposed
on uncertificated shares.
(2) If after returning deposited certificates and releasing
transfer restrictions, the corporation takes the proposed action, it must
send a new dissenters’ notice under ORS 60.567 and repeat the payment
demand procedure. [1987 c.52 §133] (1) A corporation may elect to
withhold payment required by ORS 60.577 from a dissenter unless the
dissenter was the beneficial owner of the shares before the date set
forth in the dissenters’ notice as the date of the first announcement to
news media or to shareholders of the terms of the proposed corporate
action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate
action, it shall estimate the fair value of the shares plus accrued
interest and shall pay this amount to each dissenter who agrees to accept
it in full satisfaction of such demand. The corporation shall send with
its offer a statement of its estimate of the fair value of the shares an
explanation of how the interest was calculated and a statement of the
dissenter’s right to demand payment under ORS 60.587. [1987 c.52 §134]
(1) A dissenter may notify the corporation in writing of the dissenter’s
own estimate of the fair value of the dissenter’s shares and amount of
interest due, and demand payment of the dissenter’s estimate, less any
payment under ORS 60.577 or reject the corporation’s offer under ORS
60.584 and demand payment of the dissenter’s estimate of the fair value
of the dissenter’s shares and interest due, if:
(a) The dissenter believes that the amount paid under ORS 60.577 or
offered under ORS 60.584 is less than the fair value of the dissenter’s
shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under ORS 60.577 within
60 days after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action,
does not return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within 60 days after the
date set for demanding payment.
(2) A dissenter waives the right to demand payment under this
section unless the dissenter notifies the corporation of the dissenter’s
demand in writing under subsection (1) of this section within 30 days
after the corporation made or offered payment for the dissenter’s shares.
[1987 c.52 §135](Judicial Appraisal of Shares)(1) If a demand for payment under ORS 60.587
remains unsettled, the corporation shall commence a proceeding within 60
days after receiving the payment demand under ORS 60.587 and petition the
court under subsection (2) of this section to determine the fair value of
the shares and accrued interest. If the corporation does not commence the
proceeding within the 60-day period, it shall pay each dissenter whose
demand remains unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the circuit
court of the county where a corporation’s principal office is located, or
if the principal office is not in this state, where the corporation’s
registered office is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the
proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the
foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not
residents of this state, whose demands remain unsettled parties to the
proceeding as in an action against their shares. All parties must be
served with a copy of the petition. Nonresidents may be served by
registered or certified mail or by publication as provided by law.
(4) The jurisdiction of the circuit court in which the proceeding
is commenced under subsection (2) of this section is plenary and
exclusive. The court may appoint one or more persons as appraisers to
receive evidence and recommend decision on the question of fair value.
The appraisers have the powers described in the court order appointing
them, or in any amendment to the order. The dissenters are entitled to
the same discovery rights as parties in other civil proceedings.
(5) Each dissenter made a party to the proceeding is entitled to
judgment for:
(a) The amount, if any, by which the court finds the fair value of
the dissenter’s shares, plus interest, exceeds the amount paid by the
corporation; or
(b) The fair value, plus accrued interest, of the dissenter’s
after-acquired shares for which the corporation elected to withhold
payment under ORS 60.584. [1987 c.52 §136] (1) The court in an appraisal
proceeding commenced under ORS 60.591 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of
appraisers appointed by the court. The court shall assess the costs
against the corporation, except that the court may assess costs against
all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously,
or not in good faith in demanding payment under ORS 60.587.
(2) The court may also assess the fees and expenses of counsel and
experts of the respective parties in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters
if the court finds the corporation did not substantially comply with the
requirements of ORS 60.561 to 60.587; or
(b) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith
with respect to the rights provided by this chapter.
(3) If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters similarly
situated, and that the fees for those services should not be assessed
against the corporation, the court may award to counsel reasonable fees
to be paid out of the amount awarded the dissenters who were benefited.
[1987 c.52 §137]DISSOLUTION(Voluntary Dissolution) (1) A
majority of the incorporators or initial directors of a corporation that
has not issued shares and has not commenced business may dissolve the
corporation by delivering articles of dissolution to the office for
filing.
(2) Articles of dissolution shall set forth:
(a) The name of the corporation;
(b) The date of its incorporation;
(c) That none of the corporation’s shares has been issued and that
the corporation has not commenced business;
(d) That no debt of the corporation remains unpaid; and
(e) That a majority of the incorporators or initial directors
authorized the dissolution. [1987 c.52 §138; 1987 c.579 §5] A
corporation may be voluntarily dissolved by the written consent of all of
its shareholders. [1987 c.52 §139] (1) A
corporation’s board of directors may propose dissolution for submission
to the shareholders.
(2) For a proposal to dissolve to be adopted:
(a) The board of directors must recommend dissolution to the
shareholders unless the board of directors determines that because of
conflict of interest or other special circumstances it should make no
recommendation and communicates the basis for its determination to the
shareholders; and
(b) The shareholders entitled to vote must approve the proposal to
dissolve as provided in subsection (5) of this section.
(3) The board of directors may condition its submission of the
proposal for dissolution on any basis.
(4) The corporation shall notify each shareholder, whether or not
entitled to vote, of the proposed shareholders’ meeting in accordance
with ORS 60.214. The notice must also state that the purpose, or one of
the purposes, of the meeting is to consider dissolving the corporation.
(5) Unless the articles of incorporation or the board of directors,
acting pursuant to subsection (3) of this section, require a greater vote
or a vote by voting groups, the proposal to dissolve to be adopted must
be approved by a majority of all the votes entitled to be cast on the
proposal. [1987 c.52 §140] (1) At any time after dissolution
is authorized, the corporation may dissolve by delivering to the office
for filing articles of dissolution setting forth:
(a) The name of the corporation;
(b) The date dissolution was authorized;
(c) If dissolution was approved by the shareholders:
(A) The number of votes entitled to be cast on the proposal to
dissolve; and
(B) The total number of votes cast for and against dissolution and
a statement that the number cast for dissolution was sufficient for
approval; and
(d) If voting by voting groups is required, the information
required by paragraph (c) of this subsection separately provided for each
voting group entitled to vote separately on the plan to dissolve.
(2) A corporation is dissolved upon the effective date of its
articles of dissolution. [1987 c.52 §141] (1) A corporation may revoke its
dissolution within 120 days of its effective date.
(2) Revocation of dissolution must be authorized in the same manner
as the dissolution was authorized unless that authorization of
dissolution permits revocation by action by the board of directors alone.
If the authorization of dissolution permits revocation by action of the
board of directors alone, the board of directors may revoke the
dissolution without shareholder action.
(3) After the revocation of dissolution is authorized, the
corporation may revoke the dissolution by delivering to the office for
filing, articles of revocation of dissolution that set forth:
(a) The name of the corporation;
(b) The effective date of the dissolution that was revoked;
(c) The date that the revocation of dissolution was authorized;
(d) If the corporation’s board of directors, or incorporators,
revoked the dissolution, a statement to that effect;
(e) If the corporation’s board of directors revoked a dissolution
authorized by the shareholders, a statement that revocation was permitted
by action by the board of directors alone pursuant to that authorization;
and
(f) If shareholder action was required to revoke the dissolution,
the information required by ORS 60.631 (1)(c) and (d).
(4) Unless a delayed effective date is specified, revocation of
dissolution is effective when articles of revocation of dissolution are
filed.
(5) When the revocation of dissolution is effective, it relates
back to and takes effect as of the effective date of the dissolution and
the corporation resumes carrying on its business as if dissolution had
never occurred. [1987 c.52 §142] (1) A dissolved corporation continues
its corporate existence but may not carry on any business except that
appropriate to wind up and liquidate its business and affairs, including:
(a) Collecting its assets;
(b) Disposing of its properties that will not be distributed in
kind to its shareholders;
(c) Discharging or making provision for discharging its liabilities;
(d) Distributing its remaining property among its shareholders
according to their interests; and
(e) Doing every other act necessary to wind up and liquidate its
business and affairs.
(2) Dissolution of a corporation does not:
(a) Transfer title to the corporation’s property;
(b) Prevent transfer of its shares or securities, although the
authorization to dissolve may provide for closing the corporation’s share
transfer records;
(c) Subject its directors or officers to standards of conduct
different from those prescribed in this chapter;
(d) Change quorum or voting requirements for the board of directors
or shareholders, change provisions for selection, resignation, or removal
of its directors or officers or both or change provisions for amending
its bylaws;
(e) Prevent commencement of a proceeding by or against the
corporation in its corporate name;
(f) Abate or suspend a proceeding pending by or against the
corporation on the effective date of dissolution; or
(g) Terminate the authority of the registered agent of the
corporation. [1987 c.52 §143] (1) A dissolved
corporation may dispose of the known claims against it by following the
procedure described in this section.
(2) The dissolved corporation shall notify its known claimants in
writing of the dissolution at any time after its effective date. The
written notice must:
(a) Describe information that must be included in a claim;
(b) Provide a mailing address where a claim may be sent;
(c) State the deadline, which may not be fewer than 120 days from
the effective date of the written notice, by which the dissolved
corporation must receive the claim; and
(d) State that the claim will be barred if not received by the
deadline.
(3) A claim against the dissolved corporation is barred:
(a) If a claimant who was given written notice under subsection (2)
of this section does not deliver the claim to the dissolved corporation
by the deadline; or
(b) If a claimant whose claim was rejected by the dissolved
corporation does not commence a proceeding to enforce the claim within 90
days from the effective date of the rejection notice.
(4) For purposes of this section, “claim” does not include a
contingent liability or a claim based on an event occurring after the
effective date of dissolution. [1987 c.52 §144] (1) A
dissolved corporation may also publish notice of its dissolution and
request that persons with claims against the corporation present them in
accordance with the notice.
(2) The notice must:
(a) Be published one time in a newspaper of general circulation in
the county where the dissolved corporation’s principal office is located,
or if the principal office is not in this state, where its registered
office is or was last located;
(b) Describe the information that must be included in a claim and
provide a mailing address where the claim may be sent; and
(c) State that a claim against the corporation will be barred
unless a proceeding to enforce the claim is commenced within five years
after the publication of the notice.
(3) If the dissolved corporation publishes a newspaper notice in
accordance with subsection (2) of this section, the claim of each of the
following claimants is barred unless the claimant commences a proceeding
to enforce the claim against the dissolved corporation within five years
after the publication date of the newspaper notice:
(a) A claimant who did not receive written notice under ORS 60.641;
(b) A claimant whose claim was sent in a timely manner to the
dissolved corporation but not acted on; or
(c) A claimant whose claim is contingent or based on an event
occurring after the effective date of dissolution. [1987 c.52 §145; 1991
c.883 §11] A claim
against a dissolved corporation that is not barred under ORS 60.641 or
60.644 may be enforced:
(1) Against the dissolved corporation to the extent of its
undistributed assets; or
(2) If the assets have been distributed in liquidation, against the
shareholder of the dissolved corporation to the extent of the
shareholder’s pro rata share of the claim or the corporate assets
distributed to the shareholder in liquidation, whichever is less. A
shareholder’s total liability for all claims under this section may not
exceed the total value of assets distributed to the shareholder, as of
the date or dates of distribution, less any liability of the corporation
paid on behalf of the corporation by that shareholder after the date of
the distribution. [1991 c.883 §16](Administrative Dissolution) The Secretary of
State may commence a proceeding under ORS 60.651 to administratively
dissolve a corporation if:
(1) The corporation does not pay when due any fees imposed by this
chapter;
(2) The corporation does not deliver its annual report to the
Secretary of State when due;
(3) The corporation is without a registered agent or registered
office in this state;
(4) The corporation does not notify the Secretary of State that its
registered agent or registered office has been changed, that its
registered agent has resigned or that its registered office has been
discontinued; or
(5) The corporation’s period of duration stated in its articles of
incorporation expires. [1987 c.52 §146] (1) If the
Secretary of State determines that one or more grounds exist under ORS
60.647, for dissolving a corporation, the Secretary of State shall give
the corporation written notice of the determination.
(2) If the corporation does not correct each ground for dissolution
or demonstrate to the reasonable satisfaction of the Secretary of State,
within 45 days after notice is given, that each ground determined by the
Secretary of State does not exist, the Secretary of State shall dissolve
the corporation.
(3) A corporation administratively dissolved continues its
corporate existence but may not carry on any business except that
necessary to wind up and liquidate its business and affairs under ORS
60.637, and notify claimants under ORS 60.641 and 60.644.
(4) The administrative dissolution of a corporation does not
terminate the authority of its registered agent. [1987 c.52 §147; 1987
c.579 §6; 1993 c.190 §2] (1) A
corporation administratively dissolved under ORS 60.651 may apply to the
Secretary of State for reinstatement within five years from the date of
dissolution. The application shall:
(a) State the name of the corporation and the effective date of its
administrative dissolution; and
(b) State that the ground or grounds for dissolution either did not
exist or have been eliminated.
(2) If the Secretary of State determines that the application
contains the information required by subsection (1) of this section, that
the information is correct and that the corporation’s name satisfies the
requirements of ORS 60.094, the Secretary of State shall reinstate the
corporation.
(3) When the reinstatement is effective, it relates back to and
takes effect as of the effective date of the administrative dissolution
and the corporation resumes carrying on its business as if the
administrative dissolution had never occurred. [1987 c.52 §148; 1995
c.215 §7] (1) If the Secretary of
State denies a corporation’s application for reinstatement following
administrative dissolution, the Secretary of State shall give written
notice to the corporation that explains the reason or reasons for denial.
(2) The corporation may appeal the denial of reinstatement pursuant
to the provisions of ORS chapter 183. [1987 c.52 §149](Judicial Dissolution) The circuit courts may
dissolve a corporation:
(1) In a proceeding by the Attorney General if it is established
that:
(a) The corporation obtained its articles of incorporation through
fraud; or
(b) The corporation has continued to exceed or abuse the authority
conferred upon it by law.
(2) In a proceeding by a shareholder in a corporation that has
shares that are listed on a national securities exchange or that are
regularly traded in a market maintained by one or more members of a
national or affiliated securities association, if it is established that:
(a) The directors are deadlocked in the management of the corporate
affairs, the shareholders are unable to break the deadlock and
irreparable injury to the corporation is threatened or being suffered, or
the business and affairs of the corporation can no longer be conducted to
the advantage of the shareholders generally, because of the deadlock;
(b) The directors or those in control of the corporation have
acted, are acting or will act in a manner that is illegal, oppressive or
fraudulent;
(c) The shareholders are deadlocked in voting power and have
failed, for a period that includes at least two consecutive annual
meeting dates, to elect successors to directors whose terms have expired;
or
(d) The corporate assets are being misapplied or wasted.
(3) In a proceeding by a creditor if it is established that:
(a) The creditor’s claim has been reduced to judgment, the
execution on the judgment returned unsatisfied and the corporation is
insolvent; or
(b) The corporation has admitted in writing that the creditor’s
claim is due and owing and the corporation is insolvent.
(4) In a proceeding by the corporation to have its voluntary
dissolution continued under court supervision. [1987 c.52 §150; 2001
c.315 §58] (1) Venue for a
proceeding by the Attorney General to dissolve a corporation lies in
Marion County. Venue for a proceeding brought by any other party named in
ORS 60.661 or 60.952 lies in the county where a corporation’s principal
office is located or, if the principal office is not in this state, where
its registered office is or was last located.
(2) It is not necessary to make shareholders parties to a
proceeding to dissolve a corporation unless relief is sought against them
individually.
(3) A court in a proceeding brought to dissolve a corporation may
issue injunctions, appoint a receiver or custodian pendente lite with all
powers and duties the court directs, take other action required to
preserve the corporate assets wherever located and carry on the business
of the corporation until a full hearing can be held. [1987 c.52 §151;
2001 c.315 §61] (1) A court in a judicial
proceeding brought to dissolve a corporation, or in a judicial proceeding
for shareholder remedies described in ORS 60.952, may appoint one or more
receivers to wind up and liquidate the business and affairs of the
corporation or one or more custodians to manage the business and affairs
of the corporation. The court shall hold a hearing, after notifying all
parties to the proceeding and any interested persons designated by the
court, before appointing a receiver or custodian. The court appointing a
receiver or custodian has exclusive jurisdiction over the corporation and
all its property wherever located.
(2) The court may appoint an individual or a domestic or foreign
corporation, authorized to transact business in this state, as a receiver
or custodian. The court may require the receiver or custodian to post
bond, with or without sureties, in an amount the court directs.
(3) The court shall describe the powers and duties of the receiver
or custodian in its appointing order, which may be amended periodically.
Among other powers:
(a) The receiver may dispose of all or any part of the assets of
the corporation wherever located, at a public or private sale, if
authorized by the court and may sue and defend in the receiver’s own name
as receiver of the corporation in all courts of this state.
(b) The custodian may exercise all of the powers of the
corporation, through or in place of its board of directors or officers,
to the extent necessary to manage the affairs of the corporation in the
best interests of its shareholders and creditors.
(4) The court during a receivership may redesignate the receiver a
custodian, and during a custodianship may redesignate the custodian a
receiver, if doing so is in the best interests of the corporation, its
shareholders and creditors.
(5) The court periodically during the receivership or custodianship
may order compensation paid and expense disbursements or reimbursements
made to the receiver or custodian and the receiver’s or custodian’s
counsel from the assets of the corporation or proceeds from the sale of
the assets. [1987 c.52 §152; 2001 c.315 §62] (1) If after a hearing the court
determines that one or more grounds for judicial dissolution described in
ORS 60.661 or 60.952 (2)(m) exist, it may enter a judgment dissolving the
corporation and specifying the effective date of the dissolution. The
clerk of the court shall deliver a certified copy of the judgment to the
office for filing. The Secretary of State shall file the certified copy
of the judgment.
(2) After entering the judgment of dissolution, the court shall
direct the winding up and liquidation of the corporation’s business and
affairs in accordance with ORS 60.637 and the notification of claimants
in accordance with ORS 60.641 and 60.644. [1987 c.52 §153; 2001 c.315
§63; 2003 c.576 §323](Disposition of Assets)Assets of a dissolved corporation that should be distributed to a
creditor, claimant or shareholder of the corporation who cannot be found
shall be reduced to cash and, within one year after the final
distribution in such liquidation or winding up is payable, deposited with
the Department of State Lands. The receiver or other liquidating agent
shall prepare in duplicate and under oath a statement containing the
names and last-known addresses of the persons entitled to such funds. One
of the statements shall be filed with the Department of State Lands with
the cash and another shall be delivered to the office for filing. The
owner, heirs or personal representatives of the owner, may file a claim
with the Department of State Lands in the manner provided by ORS 98.392
and 98.396. [1987 c.52 §154; 1993 c.694 §34]FOREIGN CORPORATIONS(Authority to Transact Business) (1) A foreign
corporation may not transact business in this state until it has been
authorized to do so by the Secretary of State.
(2) The following activities among others, do not constitute
transacting business within the meaning of subsection (1) of this section:
(a) Maintaining, defending or settling any proceeding.
(b) Holding meetings of the board of directors or shareholders or
carrying on other activities concerning internal corporate affairs.
(c) Maintaining bank accounts.
(d) Maintaining offices or agencies for the transfer, exchange and
registration of the corporation’s own securities or maintaining trustees
or depositaries with respect to those securities.
(e) Selling through independent contractors.
(f) Soliciting or obtaining orders, whether by mail or through
employees or agents or otherwise, if the orders require acceptance
outside this state before they become contracts.
(g) Creating or acquiring indebtedness, mortgages and security
interests in real or personal property.
(h) Securing or collecting debts or enforcing mortgages and
security interests in property securing the debts.
(i) Owning without more real or personal property.
(j) Conducting an isolated transaction that is completed within 30
days and is not one in the course of repeated transactions of a like
nature.
(k) Transacting business in interstate commerce.
(3) The list of activities in subsection (2) of this section is not
exhaustive. [1987 c.52 §155] (1)
A foreign corporation transacting business in this state without
authorization from the Secretary of State may not maintain a proceeding
in any court in this state until it obtains authorization from the
Secretary of State to transact business in this state.
(2) The successor to a foreign corporation that transacted business
in this state without authority to transact business in this state and
the assignee of a cause of action arising out of that business may not
maintain a proceeding based on that cause of action in any court in this
state until the foreign corporation or its successor obtains
authorization from the Secretary of State to transact business in this
state.
(3) A court may stay a proceeding commenced by a foreign
corporation, its successor or assignee until it determines whether the
foreign corporation or its successor requires authorization from the
Secretary of State to transact business in this state. If it so
determines, the court may further stay the proceeding until the foreign
corporation or its successor obtains the authorization.
(4) A foreign corporation that transacts business in this state
without authority shall be liable to this state for the years or parts
thereof during which it transacted business in this state without
authority in an amount equal to all fees that would have been imposed by
this chapter upon such corporation had it duly applied for and received
authority to transact business in this state as required by this chapter
and thereafter filed all reports required by this chapter.
(5) Notwithstanding subsections (1) and (2) of this section, the
failure of a foreign corporation to obtain authority to transact business
in this state does not impair the validity of its corporate acts or
prevent it from defending any proceeding in this state. [1987 c.52 §156] (1) A
foreign corporation may apply for authority to transact business in this
state by delivering an application to the office for filing. The
application shall set forth:
(a) The name of the foreign corporation or, if its name is
unavailable for filing in this state, another corporate name that
satisfies the requirements of ORS 60.717;
(b) The name of the state or country under whose law it is
incorporated;
(c) Its date of incorporation and period of duration if not
perpetual;
(d) The address, including street and number and mailing address,
if different, of its principal office;
(e) The address, including street and number, of its registered
office in this state and the name of its registered agent at that office;
and
(f) The names and respective addresses of the president and
secretary of the foreign corporation.
(2) The foreign corporation shall deliver with the completed
application a certificate of existence, or a document of similar import,
current within 60 days of delivery and authenticated by the official
having custody of corporate records in the state or country under whose
law it is incorporated. [1987 c.52 §157] (1) A foreign
corporation authorized to transact business in this state shall deliver
an amendment to the application for authority to transact business in
this state to the office for filing if it changes:
(a) Its corporate name as shown on the records of the office; or
(b) The period of its duration.
(2) The amendment to the application for authority to transact
business in this state shall set forth its corporate name shown on the
records of the office and the new corporate name or the new period of
duration. The corporate name as changed must satisfy the requirements of
ORS 60.717. [1987 c.52 §158] (1) A foreign corporation authorized to
transact business in this state has the same but no greater rights and
has the same but no greater privileges as, and except as otherwise
provided by this chapter is subject to the same duties, restrictions,
penalties and liabilities now or later imposed on, a domestic corporation
of like character.
(2) The filing by the Secretary of State of an application or
amendment to the application for authority to transact business shall
constitute authorization to transact business in this state, subject to
the right of the Secretary of State to revoke the authorization.
(3) This chapter does not authorize this state to regulate the
organization or internal affairs of a foreign corporation authorized to
transact business in this state. [1987 c.52 §159] (1) Except as
provided in subsections (2) and (3) of this section, the Secretary of
State shall not authorize a foreign corporation to transact business in
this state if the corporate name of the corporation does not conform to
ORS 60.094.
(2) The name of the corporation must contain a word or abbreviation
required by ORS 60.094 (1) unless the corporate name contains some other
word, phrase or abbreviation that the laws of the place of incorporation
require to denote a person of limited liability.
(3) If a corporate name, professional corporate name, nonprofit
corporate name, cooperative name, limited partnership name, business
trust name, reserved name, registered corporate name or assumed business
name of active record with the office is not distinguishable on the
records of the office from the corporate name of the applicant foreign
corporation, the Secretary of State shall not authorize the applicant to
transact business in this state unless the foreign corporation states the
corporate name on the application for authority to transact business in
this state under ORS 60.707 as (name under which incorporated), a
corporation of (place of incorporation), the entirety of which shall be
the real and true name of the corporation under ORS chapter 648.
(4) If a foreign corporation authorized to transact business in
this state changes its corporate name to one that does not satisfy the
requirements of this section, it may not transact business in this state
under the changed name until it adopts a name satisfying the requirements
of this section and ORS 60.711. [1987 c.52 §160]Each foreign corporation authorized to transact business in
this state must continuously maintain in this state:
(1) A registered office that may be, but need not be, the same as
any of its places of business; and
(2) A registered agent who may be:
(a) An individual who resides in this state and whose business
office is identical to the registered office;
(b) A domestic corporation, domestic limited liability company,
domestic professional corporation or domestic nonprofit corporation whose
business office is identical to the registered office; or
(c) A foreign corporation, foreign limited liability company,
foreign professional corporation or foreign nonprofit corporation
authorized to transact business in this state whose business office is
identical to the registered office. [1987 c.52 §161; 2001 c.315 §25](1) A foreign corporation authorized to transact business in
this state may change its registered office or registered agent by
delivering to the office of the Secretary of State for filing a statement
of change that sets forth:
(a) The name of the foreign corporation;
(b) If the registered office is to be changed, the street address,
including street and number, of the new registered office;
(c) If the registered agent is to be changed, the name of the new
registered agent and a statement that the new agent has consented to the
appointment; and
(d) That after the change or changes are made, the street addresses
of the registered office and the business office of its registered agent
will be identical.
(2) If a registered agent changes the street address of the agent’s
business office, the registered agent shall change the street address of
the registered office of the foreign corporation for which the agent is
the registered agent by notifying the corporation in writing of the
change and signing, either manually or in facsimile, and delivering to
the office of the Secretary of State a statement of change that complies
with the requirements of subsection (1) of this section and states that
the corporation has been notified of the change.
(3) The filing of the statement by the Secretary of State shall
terminate the existing registered office or agent or both, on the
effective date of the filing and establish the newly appointed registered
office or agent, or both, as that of the foreign corporation. [1987 c.52
§162] (1)
The registered agent of a foreign corporation may resign as agent upon
delivering a signed statement to the office and giving notice in the form
of a copy of the statement to the foreign corporation. The statement of
resignation may include a statement that the registered office is also
discontinued.
(2) Upon the delivery of the signed statement, the Secretary of
State shall file the resignation statement. The copy of the statement
given to the foreign corporation under subsection (1) of this section
shall be addressed to the foreign corporation at the foreign
corporation’s mailing address or the foreign corporation’s principal
office as shown on the records of the office of the Secretary of State.
(3) The agency appointment is terminated and the registered office
discontinued if so provided in the signed statement under subsection (1)
of this section on the 31st day after the date on which the statement was
filed by the Secretary of State unless the foreign corporation has
previously appointed a successor registered agent, as provided in ORS
60.724 thereby terminating the capacity of such agent. [1987 c.52 §163;
1993 c.190 §3] (1) The registered agent
appointed by a foreign corporation authorized to transact business in
this state shall be an agent of such corporation upon whom any process,
notice or demand required or permitted by law to be served upon the
corporation may be served.
(2) The Secretary of State shall be an agent of a foreign
corporation upon whom any process, notice or demand may be served, if:
(a) The corporation is authorized to transact business in this
state, and it fails to appoint or maintain a registered agent in this
state, or its registered agent cannot with reasonable diligence be found
at the registered office;
(b) The corporation’s authority to transact business in this state
has been revoked;
(c) The corporation is transacting business in this state without
being authorized as provided in this chapter;
(d) The corporation has been authorized to transact business in
this state and has withdrawn; or
(e) The corporation has transacted business in this state without
being authorized to do so, has ceased to transact business and has become
subject to service on the Secretary of State as prescribed in this
chapter.
(3) Service on the Secretary of State of any such process, notice
or demand shall be made in the same manner as provided in ORS 60.121 (3),
except that when the corporation served is not authorized to transact
business in this state and was not authorized to transact business in
this state at the time the transaction, event or occurrence upon which
the proceeding is based occurred, the copy of the process, notice or
demand shall be sent immediately by registered or certified mail by the
plaintiff or the attorney of the plaintiff to the principal office or
place of business of the corporation, instead of the last registered
office of the corporation.
(4) The Secretary of State shall keep a record of all processes,
notices and demands served upon the Secretary of State under this section.
(5) After completion of initial service upon the Secretary of
State, no additional documents need to be served upon the Secretary of
State to maintain jurisdiction in the same proceeding or to give notice
of any motion or provisional process.
(6) Nothing contained in this section shall limit or affect the
right to serve any process, notice or demand required or permitted by law
to be served upon a corporation in any other manner permitted by law, or
enlarge the purposes for which service on the Secretary of State is
permitted where such purposes are limited by other provisions of law.
[1987 c.52 §164](Withdrawal) (1) A foreign corporation
authorized to transact business in this state may withdraw from
transacting business in this state by applying to the office for
withdrawal. The application shall set forth:
(a) The name of the foreign corporation and the name of the state
or country under whose law it is incorporated;
(b) That it is not transacting business in this state and that it
surrenders its authority to transact business in this state;
(c) That it revokes the authority of its registered agent to accept
service on its behalf and appoints the Secretary of State as its agent
for service of process in any proceeding based on a cause of action
arising during the time it was authorized to transact business in this
state;
(d) A mailing address to which the person initiating any
proceedings may mail to the foreign corporation a copy of any process
served on the Secretary of State under paragraph (c) of this subsection;
and
(e) A commitment to notify the Secretary of State for a period of
five years from the date of withdrawal of any change in its mailing
address.
(2) Upon filing by the Secretary of State of the application to
withdraw, the authority of the foreign corporation to transact business
in this state shall cease. [1987 c.52 §165](Revocation of Authority) The Secretary of State may commence
a proceeding under ORS 60.741 to revoke the authority of a foreign
corporation to transact business in this state if:
(1) The foreign corporation does not deliver its annual report to
the Secretary of State within the time prescribed by this chapter;
(2) The foreign corporation does not pay within the time prescribed
by this chapter any fees imposed by this chapter;
(3) The foreign corporation has failed to appoint or maintain a
registered agent or registered office in this state as prescribed by this
chapter;
(4) The foreign corporation does not inform the Secretary of State
under ORS 60.724 or 60.727 that its registered agent or registered office
has changed, that its registered agent has resigned or that its
registered office has been discontinued;
(5) An incorporator, director, officer or agent of the foreign
corporation signed a document knowing it was false in any material
respect with intent that the document be delivered to the office for
filing; or
(6) The Secretary of State receives a duly authenticated
certificate from the official having custody of corporate records in the
state or country under whose law the foreign corporation is incorporated
stating that it has been dissolved or disappeared as the result of a
merger. [1987 c.52 §166] (1) If the Secretary
of State determines that one or more grounds exist under ORS 60.737 for
revocation of authority of a foreign corporation to transact business in
this state, the Secretary of State shall give the foreign corporation
written notice of the determination.
(2) If the foreign corporation does not correct each ground for
revocation or demonstrate to the reasonable satisfaction of the Secretary
of State that each ground determined by the Secretary of State does not
exist within 45 days after notice is given, the Secretary of State shall
revoke the foreign corporation’s authority.
(3) The authority of a foreign corporation to transact business in
this state ceases as of the date of revocation of its authority to
transact business in this state.
(4) The Secretary of State’s revocation of a foreign corporation’s
authority to transact business in this state appoints the Secretary of
State the foreign corporation’s agent for service of process in any
proceeding based on a cause of action which arose during the time the
foreign corporation was authorized to transact business in this state.
(5) Revocation of a foreign corporation’s authority to transact
business in this state terminates the authority of the registered agent
of the corporation. [1987 c.52 §167; 1993 c.190 §4] In addition to any other legal
remedy which may be available, a foreign corporation shall have the right
to appeal the Secretary of State’s revocation of its authority to
transact business in this state pursuant to the provisions of ORS chapter
183. [1987 c.52 §168] (1) A foreign corporation which
has had its authority revoked under ORS 60.737 may apply to the Secretary
of State for reinstatement within five years from the date of revocation.
The application shall:
(a) State the name of the corporation and the effective date its
authority was revoked; and
(b) State that the ground or grounds for revocation of authority
either did not exist or have been eliminated.
(2) If the Secretary of State determines that the application
contains the information required by subsection (1) of this section, that
the information is correct and that the corporation’s name satisfies the
requirements of ORS 60.717, the Secretary of State shall reinstate the
authority.
(3) When the reinstatement is effective, it relates back to and
takes effect as of the effective date of the administrative revocation of
authority and the corporation resumes carrying on its business as if the
administrative revocation of authority had never occurred. [1989 c.1040
§33; 1995 c.215 §8]RECORDS AND REPORTS(Records) (1) A corporation shall keep as permanent
records minutes of all meetings of its shareholders and board of
directors, a record of all actions taken by the shareholders or board of
directors without a meeting and a record of all actions taken by a
committee of the board of directors in place of the board of directors on
behalf of the corporation.
(2) A corporation shall maintain appropriate accounting records.
(3) A corporation or its agent shall maintain a record of its
shareholders, in a form that permits preparation of a list of the names
and addresses of all shareholders in alphabetical order by class of
shares showing the number and class of shares held by each.
(4) A corporation shall maintain its records in written form or in
another form capable of conversion into written form within a reasonable
time.
(5) A corporation shall keep a copy of the following records at its
principal office or registered office:
(a) Its articles or restated articles of incorporation and all
amendments to them currently in effect;
(b) Its bylaws or restated bylaws and all amendments to them
currently in effect;
(c) Resolutions adopted by its board of directors creating one or
more classes or series of shares and fixing their relative rights,
preferences and limitations, if shares issued pursuant to those
resolutions are outstanding;
(d) The minutes of all shareholders’ meetings and records of all
action taken by shareholders without a meeting, for the past three years;
(e) All written communications to shareholders generally within the
past three years;
(f) A list of the names and business addresses of its current
directors and officers; and
(g) Its most recent annual report delivered to the Secretary of
State under ORS 60.787. [1987 c.52 §169] (1) Subject to ORS
60.777 (3), a shareholder of a corporation is entitled to inspect and
copy, during regular business hours at the corporation’s principal
office, any of the records of the corporation described in ORS 60.771 (5)
if the shareholder gives the corporation written notice of the
shareholder’s demand at least five business days before the date on which
the shareholder wishes to inspect and copy.
(2) A shareholder of a corporation is entitled to inspect and copy,
during regular business hours at a reasonable location specified by the
corporation, any of the following records of the corporation if the
shareholder meets the requirements of subsection (3) of this section and
gives the corporation written notice of the shareholder’s demand at least
five business days before the date on which the shareholder wishes to
inspect and copy:
(a) Excerpts from minutes of any meeting of the board of directors,
records of any action of a committee of the board of directors while
acting in place of the board of directors on behalf of the corporation,
minutes of any meeting of the shareholders and records of action taken by
the shareholders or board of directors without a meeting, to the extent
not subject to inspection under subsection (1) of this section;
(b) Accounting records of the corporation, including tax returns;
and
(c) The record of shareholders.
(3) A shareholder may inspect and copy the records identified in
subsection (2) of this section only if:
(a) The shareholder’s demand is made in good faith and for a proper
purpose;
(b) The shareholder described with reasonable particularity the
shareholder’s purpose and the records the shareholder desires to inspect;
and
(c) The records are directly connected with the shareholder’s
purpose.
(4) The right of inspection granted by this section may not be
abolished or limited by a corporation’s articles of incorporation or
bylaws.
(5) This section does not affect:
(a) The right of a shareholder to inspect records under ORS 60.224
or, if the shareholder is in litigation with the corporation, to the same
extent as any other litigant; or
(b) The power of a court, independent of this chapter, to compel
the production of corporate records for examination.
(6) For purposes of this section, “shareholder” includes a
beneficial owner whose shares are held in a voting trust or by a nominee
on behalf of the beneficial owner. [1987 c.52 §170; 1989 c.1040 §34; 1993
c.403 §10] (1) A shareholder’s agent or
attorney has the same inspection and copying rights as the shareholder.
(2) The right to copy records under ORS 60.774 includes, if
reasonable, the right to receive copies made by photographic, xerographic
or other means.
(3) The corporation may impose a reasonable charge, covering the
costs of labor and material, for copies of any documents provided to the
shareholder. The charge may not exceed the estimated cost of production
or reproduction of the records.
(4) The corporation may comply with a shareholder’s demand to
inspect the record of shareholders under ORS 60.774 (2)(c) by providing
the shareholder with a list of its shareholders that was compiled no
earlier than the date of the shareholder’s demand. [1987 c.52 §171] (1) If a corporation does not
allow a shareholder who complies with ORS 60.774 (1) to inspect and copy
any records required by that subsection to be available for inspection,
the circuit court of the county where the corporation’s principal office
is located, or, if the principal office is not in this state, where its
registered office is or was last located, may summarily order inspection
and copying of the records demanded at the corporation’s expense upon
application of the shareholder.
(2) If a corporation does not within a reasonable time allow a
shareholder to inspect and copy any other record, the shareholder who
complies with ORS 60.774 (2) and (3) may apply to the circuit court in
the county where the corporation’s principal office is located, or, if
the principal office is not in this state, where its registered office is
or was last located, for an order to permit inspection and copying of the
records demanded.
(3) If the court orders inspection and copying of the records
demanded, it shall also order the corporation to pay the shareholder’s
costs, including reasonable counsel fees, incurred to obtain the order
unless the corporation proves that it refused inspection in good faith
because it had a reasonable basis for doubt about the right of the
shareholder to inspect the records demanded.
(4) If the court orders inspection and copying of the records
demanded, it may impose reasonable restrictions on the use or
distribution of the records by the demanding shareholder.
(5) No order shall be issued under this section without notice to
the corporation at least five days in advance of the time specified for
the hearing unless a different period is fixed by the court. The
shareholder’s request shall be set for hearing at the earliest possible
time and shall take precedence over all matters, except matters of the
same character and hearing on preliminary injunctions under ORCP 79 B(3).
[1987 c.52 §172](Reports) If a corporation
indemnifies or advances expenses to a director under ORS 60.391, 60.394,
60.397 or 60.401 in connection with a proceeding by or in the right of
the corporation, the corporation shall report the indemnification or
advance in writing to the shareholders with or before the notice of the
next shareholders’ meeting. [1987 c.52 §173] (1) Each domestic corporation, and each
foreign corporation authorized to transact business in this state, shall
by its anniversary deliver to the office for filing an annual report that
sets forth:
(a) The name of the corporation and the state or country under
whose law it is incorporated;
(b) The street address of its registered office and the name of its
registered agent at that office in this state;
(c) The address, including street and number and mailing address,
if different, of its principal office;
(d) The names and addresses of the president and secretary of the
corporation;
(e) The category of the classification code established by rule of
the Secretary of State most closely designating the primary business
activity of the corporation;
(f) The federal employer identification number of the corporation;
and
(g) Additional identifying information that the Secretary of State
may require by rule.
(2) The information contained on the annual report shall be current
as of 30 days before the anniversary of the corporation.
(3) The Secretary of State shall mail the annual report form to any
address shown for the corporation in the current records of the office.
The failure of the corporation to receive the annual report form from the
Secretary of State shall not relieve the corporation of its duty to
deliver an annual report to the office as required by this section.
(4) If an annual report does not contain the information required
by this section, the Secretary of State shall notify the reporting
domestic or foreign corporation in writing and return the report to it
for correction. The domestic or foreign corporation must correct the
error within 45 days after the Secretary of State gives such notice.
(5) A domestic or foreign corporation may deliver to the office for
filing an amendment to the annual report if a change in the information
set forth in the annual report occurs after the report is delivered to
the office for filing and before the next anniversary. This subsection
applies only to a change that is not required to be made by an amendment
to the articles of incorporation. The amendment to the annual report must
set forth:
(a) The name of the corporation as shown on the records of the
office; and
(b) The information as changed. [1987 c.52 §174; 1987 c.843 §14]REGULATION OF CORPORATE ACQUISITIONS
(1) “Acquiring group” means two or more persons who agree to act
together or enter into any arrangement or understanding for the purpose
of voting or acquiring voting shares of an issuing public corporation,
but does not include two or more persons whose sole agreement relates to
the granting of an immediately revocable proxy.
(2) “Acquiring person” means a person who acquires or proposes to
acquire ownership of, or the power to direct the voting of, voting shares
of an issuing public corporation and includes all affiliates of such
person.
(3)(a) “Affiliate” means a person who directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with, another person. As used in this subsection,
“control,” including the terms “controlled by” and “under common control
with,” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting shares, by contract or otherwise.
A person who is the owner of 10 percent or more of a corporation’s
outstanding voting shares shall be presumed to have control of the
corporation in the absence of proof by a preponderance of the evidence to
the contrary.
(b) Notwithstanding paragraph (a) of this subsection, a presumption
of control shall not apply where a person holds voting shares in good
faith and not for the purpose of circumventing ORS 60.801 to 60.816 as an
agent, bank, broker, nominee, custodian or trustee for one or more owners
who do not individually or as a group have control of the corporation.
(4)(a) “Control share acquisition” means the acquisition, directly
or indirectly, by any acquiring person, including a member of an
acquiring group, of ownership of, or the power to direct the voting of,
voting shares of an issuing public corporation in a transaction that
causes the total voting power of the acquiring person or any acquiring
group of which the acquiring person is a member in the election of
directors of the issuing public corporation to exceed one-fifth,
one-third or one-half of the total voting power of all the voting shares.
(b) For purposes of this subsection, voting shares of an issuing
public corporation acquired within 90 days of a control share acquisition
by the acquiring person or members of the acquiring group making the
control share acquisition shall be considered to have been acquired in
the same control share acquisition.
(c) For purposes of this subsection, a person who acquires voting
shares in the ordinary course of business for the benefit of others in
good faith and not for the purpose of circumventing ORS 60.801 to 60.816
has ownership and voting power only of voting shares in respect of which
that person would be able to exercise or direct the exercise of votes
without further instruction from others.
(d) For purposes of this subsection, if two or more persons enter
into a binding agreement that is not immediately revocable with respect
to the voting of their voting shares, in addition to those persons
thereby becoming an acquiring group:
(A) Any single person who thereby obtains the right to determine
how any other parties to the agreement must vote their shares shall be
deemed to have acquired the power to direct the voting of the voting
shares held by such other parties to the agreement; and
(B) Any group of persons who thereby obtain the right to determine
how any parties to the agreement must vote their shares shall
collectively be deemed to be a separate acquiring person who has acquired
the power to direct the voting of all voting shares held by such parties
to the agreement. The group of persons shall include all parties to the
agreement if all parties share in the decision or if the agreement
specifies how the shares must be voted.
(e) The acquisition of any voting shares of an issuing public
corporation does not constitute a control share acquisition if the
acquisition is consummated in any of the following circumstances:
(A) At a time when the corporation was not subject to ORS 60.801 to
60.816.
(B) Pursuant to a contract entered into at a time when the
corporation was not subject to ORS 60.801 to 60.816.
(C) Pursuant to the laws of descent and distribution.
(D) Pursuant to the satisfaction of a pledge or other security
interest created in good faith and not for the purpose of circumventing
ORS 60.801 to 60.816.
(E) In a transaction in which voting shares are acquired from the
issuing public corporation.
(F) Pursuant to a merger or plan of share exchange effected in
compliance with ORS 60.470 to 60.501, if the issuing public corporation
is a party to the agreement of merger or plan of share exchange.
(G) Pursuant to a transfer of voting shares between or among
affiliates or immediate family members unless the voting shares are
control shares that have not had their voting rights restored under ORS
60.807.
(H) In a transaction in which voting power is acquired solely by
receipt of an immediately revocable proxy or by any other agreement or
understanding that is not binding on the person transferring such voting
power.
(5)(a) “Control shares” means voting shares of an issuing public
corporation that are acquired in a control share acquisition. “Control
shares” does not include voting shares acquired in a control share
acquisition that are subsequently transferred, or whose voting power is
subsequently transferred, other than a transfer of voting power by
termination of a binding voting agreement, to a person that is not an
affiliate of the transferor or a member of an acquiring group of which
the transferor is a member in a transaction that is not a control share
acquisition. “Control shares” also does not include voting shares
acquired in a control share acquisition whose voting power is
subsequently transferred pursuant to the termination of a binding voting
agreement if, assuming the parties to the agreement had never entered
into the agreement but had been members of an acquiring group during the
term of the agreement, the voting shares would not have been control
shares.
(b) If an acquiring person or any member of an acquiring group
transfers control shares in a transaction that causes the control shares
to cease to be control shares without reducing the total voting power of
the acquiring person or acquiring group to less than one-fifth of the
total voting power of all the voting shares, and within 90 days before or
after such transfer the transferor or any member of an acquiring group of
which the transferor is a member acquires ownership of, or the power to
direct the voting of, any voting shares, all such voting shares up to the
number of voting shares having total voting power equal to the total
voting power of the control shares transferred shall be considered
control shares.
(6) “Immediate family member” means any grandparent, parent,
brother, sister, child, grandchild or spouse of a person, or any other
relative of the person or the person’s spouse who has the same home as
the person.
(7)(a) “Interested shares” means voting shares of an issuing public
corporation that any of the following persons have sole or shared power
to vote, or direct the voting of, either directly or by proxy or voting
agreement, at a meeting at which the voting rights of control shares are
to be considered:
(A) The acquiring person or a member of the acquiring group whose
voting rights are under consideration.
(B) Any officer of the issuing public corporation.
(C) Any employee of the issuing public corporation who is also a
director of the corporation.
(b) For purposes of this subsection, a person shall not be deemed
to have the power to vote, or direct the voting of, voting shares if the
person’s power with respect to the shares arises solely from holding an
immediately revocable proxy, unless the proxy is solicited in connection
with an offer to purchase or solicitation of offers to sell voting shares
which requires the granting of a proxy as a condition to the acceptance
of a tender of voting shares from any shareholder.
(8)(a) “Issuing public corporation” means a corporation
incorporated or existing pursuant to the provisions of this chapter that
has:
(A) One hundred or more record or beneficial shareholders;
(B) Its principal place of business, its principal office or assets
with a fair market value of not less than $1 million within this state;
and
(C) Either:
(i) More than 10 percent of its record shareholders resident in
this state;
(ii) More than 10 percent of its shares owned beneficially or of
record by residents of this state; or
(iii) At least 10,000 of its record or beneficial shareholders
resident in this state.
(b) The residence of a shareholder is presumed to be the address
appearing in the records of the corporation.
(c) Shares held by banks, except as trustee or guardian, brokers or
nominees shall be disregarded for purposes of calculating the percentages
or numbers described in paragraph (a)(C) of this subsection.
(9) “Person” means any individual, corporation, partnership,
unincorporated association or other entity.
(10) “Total voting power” of any person or any shares means the
voting power such person or shares would have except for ORS 60.801 to
60.816.
(11) “Voting shares” means shares that have, or would have except
for this Act, voting power in any vote for the election of directors and
that belong to a class or series that, together with all other classes or
series that vote with such class or series as a group with respect to the
election of directors, elects at least a majority of the directors. [1989
c.4 §1; 1989 c.1040 §37; 1991 c.7 §1; 2003 c.80 §17a]Note: 60.801 to 60.816 were enacted into law by the Legislative
Assembly but were not added to or made a part of ORS chapter 60 or any
series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation. (1) An issuing public
corporation shall be subject to ORS 60.801 to 60.816 unless the
corporation’s articles of incorporation or bylaws provide that ORS 60.801
to 60.816 do not apply to acquisitions of its voting shares. After a
corporation’s articles of incorporation or bylaws are amended to provide
that ORS 60.801 to 60.816 do not apply to acquisitions of its voting
shares, any voting shares that were control shares prior to the amendment
shall cease to be considered control shares.
(2) An issuing public corporation whose articles of incorporation
or bylaws provide that it is not subject to ORS 60.801 to 60.816 may, at
any time, amend its articles of incorporation or bylaws in accordance
with ORS 60.431 to 60.467 to remove the provision and become subject to
ORS 60.801 to 60.816.
(3) Any amendment to the articles of incorporation or bylaws of an
issuing public corporation relating to whether or not the corporation is
subject to ORS 60.801 to 60.816 that is adopted or approved by the
shareholders must be adopted or approved by holders of voting shares with
at least a majority of the votes entitled to be cast by holders of voting
shares in addition to any other vote that may be required by statute or
the articles of incorporation.
(4) Upon request by any person, a corporation shall inform the
person whether or not the corporation’s articles of incorporation or
bylaws provide that ORS 60.801 to 60.816 do not apply to acquisitions of
its voting shares. [1989 c.4 §2; 1991 c.7 §2]Note: See note under 60.801. (1) Control shares acquired
in a control share acquisition have no voting rights other than those
provided for in subsection (2)(a) of this section, unless the restoration
of the voting rights associated with the shares before the control share
acquisition is approved by the shareholders of the issuing public
corporation.
(2) To be approved under this section, the restoration of voting
rights for control shares must be approved by:
(a) The holders of the voting shares, including all interested
shares, by a majority of all the votes entitled to be cast by holders of
voting shares; and
(b) The holders of the voting shares, excluding all interested
shares, by a majority of all the votes, other than votes of interested
shares, entitled to be cast by holders of voting shares. [1989 c.4 §3]Note: See note under 60.801. (1) Any
acquiring person who proposes to make or has made a control share
acquisition may at the person’s election deliver an acquiring person
statement to the issuing public corporation at the issuing public
corporation’s principal office. The acquiring person statement shall set
forth all of the following:
(a) The identity of the acquiring person and each other member of
any acquiring group of which the person is a member.
(b) A statement that the acquiring person statement is given
pursuant to ORS 60.801 to 60.816.
(c) The number of voting shares of the issuing public corporation
owned, directly or indirectly, by the acquiring person and each member of
the acquiring group, and the acquisition dates and acquisition prices of
all such shares acquired in a control share acquisition and within 90
days prior to the date of delivery of the acquiring person statement.
(d) The number of additional voting shares of which the acquiring
person and each member of the acquiring group has the power to direct the
voting other than solely through the holding of an immediately revocable
proxy, the identities of the owners of the voting shares and a
description of the transaction or transactions in which the voting power
was acquired.
(e) If the control share acquisition has not taken place, a
description in reasonable detail of the terms of the proposed control
share acquisition, including the number of voting shares being sought,
the price or range of prices to be paid for the voting shares being
sought, the source of financing for the acquisition, whether or not the
acquisition will be made by means of a tender offer and, if so, whether
the tender offer will be for all outstanding voting shares.
(f) Any plans of the acquiring person for a merger or other
fundamental corporate change involving the issuing public corporation.
(2) If the acquiring person requests at the time of delivery of an
acquiring person statement and gives an undertaking to pay the
corporation’s expenses of a special meeting, the directors of the issuing
public corporation shall, within 10 days after receipt by the corporation
of the acquiring person statement, call a special meeting of shareholders
of the issuing public corporation for the purpose of considering the
voting rights to be accorded the voting shares acquired or to be acquired
in the control share acquisition. Unless otherwise specified by the board
of directors, no other business shall be conducted at a special meeting
of shareholders called under this section.
(3) Unless the acquiring person agrees in writing to another date,
the special meeting of shareholders shall be held no sooner than 30 days
and no later than 50 days after receipt by the issuing public corporation
of the request.
(4) If no request is made, the voting rights to be accorded the
voting shares acquired in the control share acquisition shall be
presented to the next special or annual meeting of shareholders that is
held more than 60 days after the date of the control share acquisition.
(5) If a special meeting is requested, notice of the special
meeting of shareholders shall be given as promptly as reasonably
practicable by the issuing public corporation to all shareholders of
record as of the record date set for the meeting, whether or not the
shareholders are entitled to vote at the meeting. The board of directors
shall fix the record date.
(6) Notice of the special or annual shareholder meeting at which
the voting rights are to be considered must include or be accompanied by
all of the following:
(a) A copy of the acquiring person statement delivered to the
issuing public corporation pursuant to ORS 60.801 to 60.816.
(b) A statement authorized by the board of directors of the
corporation of the position or recommendation of the board, or that the
board is taking no position or making no recommendation, with respect to
the proposed control share acquisition.
(c) A description of the dissenters’ rights that may result from
the vote of shareholders.
(7) To the extent the acquiring person makes any representations in
the acquiring person statement or any other communication to the
shareholders of the issuing public corporation relating to transactions
or other actions to be effected after the shareholder vote on voting
rights for control shares acquired by the acquiring person, any approval
of voting rights shall be conditioned upon the completion of those
transactions or actions as represented and shall be void if the
transactions or actions are not effected as represented.
(8) An acquiring person whose voting rights for control shares are
denied by the shareholders may request another special meeting of
shareholders in accordance with this section to consider those voting
rights no sooner than six months after the meeting at which voting rights
were denied. [1989 c.4 §4; 1991 c.7 §3]Note: See note under 60.801. Unless otherwise provided in a
corporation’s articles of incorporation or bylaws before a control share
acquisition has occurred, in the event control shares acquired in a
control share acquisition are accorded voting rights and the acquiring
person or acquiring group owns, or has the power to direct the voting of,
other than solely through the holding of immediately revocable proxies,
voting shares with a majority or more of the total voting power of all
voting shares, any holder of voting shares of the issuing public
corporation who does not vote in favor of the restoration of voting
rights shall be entitled to dissent from such restoration and obtain the
fair value of the holder’s shares. ORS 60.551 and 60.557 to 60.594 shall
apply to dissenters’ rights created under this section, except that for
purposes of this section, fair value may not be a value less than the
highest price paid per share by the acquiring person or acquiring group
in the control share acquisition. ORS 60.554 shall not apply to
dissenters’ rights created under this section. [1989 c.4 §5]Note: See note under 60.801.ORS 60.801 to 60.813 shall be known and may be
cited as the “Oregon Control Share Act.” [1989 c.4 §6]Note: See note under 60.801.BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
(1) “Affiliate” means a person that directly, or indirectly through
one or more intermediaries, controls, is controlled by, or is under
common control with, another person.
(2) “Associate,” when used to indicate a relationship with any
person, means:
(a) Any corporation or organization of which the person is a
director, officer or partner or is, directly or indirectly, the owner of
20 percent or more of any class of voting stock;
(b) Any trust or other estate in which the person has at least a 20
percent beneficial interest or as to which the person serves as trustee
or in a similar fiduciary capacity; and
(c) Any relative or spouse of the person, or any relative of a
spouse, who has the same residence as the person.
(3) “Business combination,” when used in reference to any
corporation and any interested shareholder of the corporation, means:
(a) Any merger or plan of exchange of the corporation or any direct
or indirect majority-owned subsidiary of the corporation with:
(A) The interested shareholder; or
(B) Any other corporation if the merger or plan of exchange is
caused by the interested shareholder and as a result of the merger or
plan of exchange, ORS 60.835 is not applicable to the surviving
corporation;
(b) Any sale, lease, exchange, mortgage, pledge, transfer or other
disposition, in one transaction or a series of transactions, except
proportionately as a shareholder of the corporation, to or with the
interested shareholder, whether as part of a dissolution or otherwise, of
assets of the corporation or of any direct or indirect majority-owned
subsidiary of the corporation where the assets have an aggregate market
value equal to 10 percent or more of either the aggregate market value of
all the assets of the corporation determined on a consolidated basis or
the aggregate market value of all the outstanding stock of the
corporation;
(c) Any transaction which results in the issuance or transfer by
the corporation or by any direct or indirect majority-owned subsidiary of
the corporation of any shares of the corporation or of any such
subsidiary to the interested shareholder, except:
(A) Pursuant to the exercise, exchange or conversion of securities
exercisable for, exchangeable for or convertible into shares of the
corporation or any subsidiary where the securities were outstanding prior
to the time that the interested shareholder became an interested
shareholder or were distributed pro rata to all holders of a class or
series of shares of the corporation or any subsidiary subsequent to the
time the interested shareholder became an interested shareholder;
(B) Pursuant to a dividend or distribution paid or made pro rata to
all holders of a class or series of shares of the corporation or any
subsidiary subsequent to the time the interested shareholder became an
interested shareholder, provided that there is no increase in the
interested shareholder’s proportionate share of any class or series of
shares of the corporation or of the voting stock of the corporation; or
(C) Pursuant to an exchange offer by the corporation to purchase
shares made on the same terms to all holders of the shares, provided that
there is no increase in the interested shareholder’s proportionate share
of any class or series of shares of the corporation or of the voting
stock of the corporation;
(d) Any transaction involving the corporation or any direct or
indirect majority-owned subsidiary of the corporation which has the
effect, directly or indirectly, of increasing the proportionate share of
any class or series of shares, or securities convertible into the shares
of any class or series, of the corporation or of any such subsidiary
which is owned by the interested shareholder, except as a result of
immaterial changes due to fractional share adjustments or as a result of
any purchase or redemption of any shares not caused, directly or
indirectly, by the interested shareholder; or
(e) Any receipt by the interested shareholder of the benefit,
directly or indirectly, except proportionately as a shareholder of such
corporation, of any loans, advances, guarantees, pledges or other
financial benefits, other than those expressly permitted in paragraphs
(a) to (d) of this subsection, provided by or through the corporation or
any direct or indirect majority-owned subsidiary.
(4)(a) “Control,” including the terms “controlling,” “controlled
by” and “under common control with,” means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting stock, by contract or otherwise. A person who is the owner of 10
percent or more of a corporation’s outstanding voting stock shall be
presumed to have control of the corporation, in the absence of proof by a
preponderance of the evidence to the contrary.
(b) Notwithstanding paragraph (a) of this subsection, a presumption
of control shall not apply when a person holds voting stock, in good
faith and not for the purpose of circumventing this section, as an agent,
bank, broker, nominee, custodian or trustee for one or more owners who do
not individually or as a group have control of the corporation.
(5)(a) “Interested shareholder” means:
(A) Any person, other than the corporation and any direct or
indirect majority-owned subsidiary of the corporation, that:
(i) Is the owner of shares representing 15 percent or more of the
outstanding voting stock of the corporation; or
(ii) Is an affiliate or associate of the corporation and was the
owner of shares representing 15 percent or more of the outstanding voting
stock of the corporation at any time within the three-year period
immediately prior to the date on which it is sought to be determined
whether the person is an interested shareholder; and
(B) The affiliates and associates of a person described in
subparagraph (A) of this paragraph.
(b) Notwithstanding paragraph (a) of this subsection, the term
“interested shareholder” shall not include:
(A) Any person who:
(i) Owned shares in excess of the 15 percent limitation described
in paragraph (a) of this subsection as of April 4, 1991, and who
continued to own shares in excess of the 15 percent limitation or would
have but for action by the corporation;
(ii) Acquired shares in excess of the 15 percent limitation
described in paragraph (a) of this subsection pursuant to a tender offer
commenced prior to April 4, 1991, and who continued to own shares in
excess of the 15 percent limitation or would have but for action by the
corporation;
(iii) Acquired shares in excess of the 15 percent limitation
described in paragraph (a) of this subsection pursuant to an exchange
offer announced prior to April 4, 1991, and commenced within 90 days
after April 4, 1991, and who continued to own shares in excess of the 15
percent limitation or would have but for action by the corporation; or
(iv) Acquired shares in excess of the 15 percent limitation
described in paragraph (a) of this subsection from a person described in
sub-subparagraphs (i) to (iii) of this subparagraph by gift, inheritance
or in a transaction in which no consideration was exchanged; or
(B) Any person whose ownership of shares in excess of the 15
percent limitation described in paragraph (a) of this subsection is the
result of action taken solely by the corporation provided that the person
shall be an interested shareholder if the person later acquires
additional voting stock of the corporation, except as a result of further
corporate action not caused, directly or indirectly, by the person.
(c) For the purpose of determining whether a person is an
interested shareholder, the voting shares of the corporation considered
to be outstanding shall include shares considered to be owned by the
person through application of ORS 60.830 (1).
(6) “Person” means any individual, corporation, partnership,
unincorporated association or other entity.
(7) “Voting stock” means shares of any class or series that,
together with all other classes or series that vote with the class or
series as a group with respect to the election of directors, elects at
least a majority of the directors. [1991 c.40 §2](1) For purposes of ORS 60.825 to
60.845, a person shall be considered to be the “owner” of and to “own”
any shares:
(a) Which the person or any of the person’s affiliates or
associates, directly or indirectly, have the power to vote or dispose of,
including voting or dispositive power pursuant to any agreement,
arrangement or understanding, whether or not in writing;
(b) Over which the person or any of the person’s affiliates or
associates, directly or indirectly, have the right to acquire voting or
dispositive power, whether the right is exercisable immediately or only
after the passage of time, pursuant to any agreement, arrangement or
understanding, whether or not in writing, or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; or
(c) Which are owned, directly or indirectly, by any other person,
or any affiliate or associate of the person, with which the person, or
any affiliates or associates of the person, have any agreement,
arrangement or understanding, whether or not in writing, for the purpose
of acquiring, holding, voting or disposing of any securities of the
corporation.
(2) For purposes of subsection (1) of this section, a person shall
not be considered to be the “owner” of or to “own” any shares:
(a) If an agreement, arrangement or understanding to vote shares
arises solely from a revocable proxy or consent given to the person in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations of the
Securities Exchange Act of 1934;
(b) Tendered pursuant to a tender or exchange offer made by or on
behalf of the person or any of the person’s affiliates or associates
until any tendered shares are accepted for purchase or exchange; or
(c) Acquired by a person engaged in business as an underwriter of
securities through the person’s participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of
the acquisition of the shares. [1991 c.40 §3] Notwithstanding any other
provision of this chapter, a corporation shall not engage in any business
combination with any interested shareholder for a period of three years
following the date that the shareholder became an interested shareholder,
unless:
(1) Prior to that date the board of directors of the corporation
approved either the business combination or the transaction which
resulted in the shareholder becoming an interested shareholder;
(2) Upon consummation of the transaction which resulted in the
shareholder becoming an interested shareholder, the interested
shareholder owned at least 85 percent of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares
owned by:
(a) Persons who are directors and also officers; and
(b) Employee share plans in which employee participants do not have
the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or
(3) On or subsequent to the date, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of shareholders, and not by written consent, by the affirmative
vote of at least 66-2/3 percent of the outstanding voting stock which is
not owned by the interested shareholder. [1991 c.40 §4; 1991 c.883 §18;
1991 c.927 §5]
(a) The corporation’s original articles of incorporation contain a
provision expressly electing not to be governed by ORS 60.825 to 60.845;
(b) The corporation, by action of its board of directors, adopts an
amendment to its bylaws within 90 days after April 4, 1991, expressly
electing not to be governed by ORS 60.825 to 60.845. The amendment shall
not be further amended by the board of directors;
(c) The corporation, by action of its shareholders, adopts an
amendment to its articles of incorporation or bylaws expressly electing
not to be governed by ORS 60.825 to 60.845, provided that, in addition to
any other vote required by law, the amendment to the articles of
incorporation or bylaws must be approved by the affirmative vote of a
majority of the shares entitled to vote. An amendment adopted pursuant to
this paragraph shall not be effective until 12 months after the adoption
of the amendment and shall not apply to any business combination between
the corporation and any person who became an interested shareholder of
the corporation on or prior to the adoption of the amendment. A bylaw
amendment adopted pursuant to this paragraph shall not be further amended
by the board of directors;
(d) The corporation does not have a class of voting stock that is:
(A) Listed on a national securities exchange;
(B) Authorized for quotation on an interdealer quotation system of
a registered national securities association; or
(C) Held of record by more than 2,000 shareholders; or
(e) A shareholder becomes an interested shareholder inadvertently
and:
(A) As soon as practicable divests sufficient shares so that the
shareholder ceases to be an interested shareholder; and
(B) Would not, at any time within the three-year period immediately
prior to a business combination between the corporation and the
shareholder, have been an interested shareholder, but for the inadvertent
acquisition.
(2) Subsection (1)(d) of this section does not apply if anything
described in subsection (1)(d) of this section results from action taken,
directly or indirectly, by an interested shareholder or from a
transaction in which a person becomes an interested shareholder.
(3) Notwithstanding subsection (1) of this section, a corporation
may elect by a provision of its original articles of incorporation or any
amendment thereto to be governed by ORS 60.825 to 60.845, except that any
amendment to the articles of incorporation shall not apply to restrict a
business combination between the corporation and an interested
shareholder of the corporation if the interested shareholder became an
interested shareholder prior to April 4, 1991. [1991 c.40 §5] No provision of any
articles of incorporation or bylaws shall require a greater vote of
shareholders than that specified in ORS 60.825 to 60.845 for any vote of
shareholders required by ORS 60.825 to 60.845. [1991 c.40 §6]MISCELLANEOUS This chapter shall be known and may be cited as
the “Oregon Business Corporation Act.” [1987 c.52 §1](1) In a
proceeding by a shareholder in a corporation that does not have shares
that are listed on a national securities exchange or that are regularly
traded in a market maintained by one or more members of a national or
affiliated securities association, the circuit court may order one or
more of the remedies listed in subsection (2) of this section if it is
established that:
(a) The directors are deadlocked in the management of the corporate
affairs, the shareholders are unable to break the deadlock and
irreparable injury to the corporation is threatened or being suffered, or
the business and affairs of the corporation can no longer be conducted to
the advantage of the shareholders generally, because of the deadlock;
(b) The directors or those in control of the corporation have
acted, are acting or will act in a manner that is illegal, oppressive or
fraudulent;
(c) The shareholders are deadlocked in voting power and have
failed, for a period that includes at least two consecutive annual
meeting dates, to elect successors to directors whose terms have expired;
or
(d) The corporate assets are being misapplied or wasted.
(2) The remedies that the court may order in a proceeding under
subsection (1) of this section include but are not limited to the
following:
(a) The performance, prohibition, alteration or setting aside of
any action of the corporation or of its shareholders, directors or
officers or any other party to the proceeding;
(b) The cancellation or alteration of any provision in the
corporation’s articles of incorporation or bylaws;
(c) The removal from office of any director or officer;
(d) The appointment of any individual as a director or officer;
(e) An accounting with respect to any matter in dispute;
(f) The appointment of a custodian to manage the business and
affairs of the corporation, to serve for the term and under the
conditions prescribed by the court;
(g) The appointment of a provisional director to serve for the term
and under the conditions prescribed by the court;
(h) The submission of the dispute to mediation or another form of
nonbinding alternative dispute resolution;
(i) The issuance of distributions;
(j) The award of damages to any aggrieved party;
(k) The purchase by the corporation or one or more shareholders of
all of the shares of one or more other shareholders for their fair value
and on the terms determined under subsection (5) of this section;
(L) The retention of jurisdiction of the case by the court for the
protection of the shareholder who filed the proceeding; or
(m) The dissolution of the corporation if the court determines that
no remedy specified in paragraphs (a) to (L) of this subsection or other
alternative remedy is sufficient to resolve the matters in dispute. In
determining whether to dissolve the corporation, the court shall consider
among other relevant evidence the financial condition of the corporation
but may not refuse to dissolve the corporation solely because it has
accumulated earnings or current operating profits.
(3) The remedies set forth in subsection (2) of this section shall
not be exclusive of other legal and equitable remedies that the court may
impose. Except as provided in this subsection, the shareholders of a
corporation may, pursuant to an agreement described in ORS 60.265, agree
to limit or eliminate any of the remedies set forth in subsection (2) of
this section. The remedies set forth in subsection (2)(e), (j) and (m) of
this section may not be eliminated.
(4) In determining the appropriate remedies to order under
subsection (2) of this section, the court may take into consideration the
reasonable expectations of the corporation’s shareholders as they existed
at the time the corporation was formed and developed during the course of
the shareholders’ relationship with the corporation and with each other.
The court shall endeavor to minimize the harm to the business of the
corporation.
(5)(a) If the court orders a share purchase, the court shall:
(A) Determine the fair value of the shares, with or without the
assistance of appraisers, taking into account any impact on the value of
the shares resulting from the actions giving rise to a proceeding under
subsection (1) of this section;
(B) Consider any financial or legal constraints on the ability of
the corporation or the purchasing shareholder to purchase the shares;
(C) Specify the terms of the purchase, including, if appropriate,
terms for installment payments, interest at the rate and from the date
determined by the court to be equitable, subordination of the purchase
obligation to the rights of the corporation’s other creditors, security
for a deferred purchase price and a covenant not to compete or other
restriction on the seller;
(D) Require the seller to deliver all of the seller’s shares to the
purchaser upon receipt of the purchase price or the first installment of
the purchase price; and
(E) Retain jurisdiction to enforce the purchase order by, among
other remedies, ordering the corporation to be dissolved if the purchase
is not completed in accordance with the terms of the purchase order.
(b) The share purchase ordered under this subsection shall be
consummated within 20 days after the date the order becomes final unless
before that time the corporation files with the court a notice of its
intention to dissolve and articles of dissolution are properly filed with
the Secretary of State within 50 days after filing the notice with the
court.
(c) After the purchase order is entered and before the purchase
price is fully paid, any party may petition the court to modify the terms
of the purchase, and the court may do so if the court finds that the
modifications are equitable.
(d) Unless the purchase order is modified by the court, the selling
shareholder shall have no further rights as a shareholder from the date
the seller delivers all of the shareholder’s shares to the purchaser or
such other date specified by the court.
(e) If the court orders shares to be purchased by one or more other
shareholders, in allocating the shares to be purchased by the other
shareholders, unless equity requires otherwise, the court shall attempt
to preserve the existing distribution of voting rights and other
designations, preferences, qualifications, limitations, restrictions and
special or relative rights among the holders of the class or classes of
shares and may direct that holders of a specific class or classes not
participate in the purchase.
(6) At any time within 90 days after the filing of a proceeding
under subsection (1) of this section, or at such time determined by the
court to be equitable, the corporation or one or more shareholders may
elect to purchase all of the shares owned by the shareholder who filed
the proceeding for their fair value. An election to purchase under this
subsection shall state in writing the amount that the electing party will
pay for the shares. The following apply:
(a) The election to purchase shall be irrevocable unless the court
determines that it is equitable to set aside or modify the election.
(b) If the election to purchase is filed by one or more
shareholders, the corporation shall, within 10 days thereafter, give
written notice to all shareholders. The notice shall state the name of
the shareholder who filed the proceeding under subsection (1) of this
section and the number of shares owned by that shareholder, the name of
each electing shareholder and the number of shares owned by that electing
shareholder and the amount that each electing shareholder will pay for
the shares. The notice also must advise the recipients of their right to
join in the election to purchase shares. Shareholders who wish to
participate must file notice of their intention to join in the election
to purchase not later than 30 days after the date of the notice to them
or at such time as the court in its discretion may allow. All
shareholders who have filed an election or notice of their intention to
participate in the election to purchase thereby become parties to the
proceeding under subsection (1) of this section and shall participate in
the purchase in proportion to their ownership of shares as of the date
the first election was filed, unless the shareholders otherwise agree or
the court otherwise directs.
(c) The court in its discretion may allow the corporation and
shareholders to file an election to purchase the shares of the
shareholder who filed the proceeding under subsection (1) of this section
at a price higher than the amount previously offered. If the court does
so, it shall allow other shareholders an opportunity to join in the
election to purchase at the higher price in accordance with their
proportionate ownership interest.
(d) After an election to purchase has been filed by the corporation
or one or more shareholders, the proceeding filed under subsection (1) of
this section may not be discontinued or settled, nor may the shareholder
who filed the proceeding sell or otherwise dispose of the shareholder’s
shares, unless the court determines that it would be equitable to the
corporation and the shareholders, other than the petitioner, to permit
the discontinuance, settlement, sale or other disposition. In considering
whether equity exists to approve any settlement, the court may take into
consideration the reasonable expectations of the shareholders as referred
to in subsection (4) of this section, including any existing agreement
among the shareholders.
(e) If, within 30 days of the filing of the latest election to
purchase allowed by the court, the parties reach agreement as to the fair
value and terms of purchase of the shares of the shareholder who filed
the proceeding under subsection (1) of this section, the court shall
enter an order directing the purchase of shares upon the terms and
conditions agreed to by the parties.
(f) If the parties are unable to reach an agreement as described in
paragraph (e) of this subsection, the court, upon application of any
party, shall stay the proceeding under subsection (1) of this section and
shall, under subsection (5) of this section, determine the fair value and
terms of purchase of the shares of the shareholder who filed the
proceeding as of the day before the date on which the proceeding was
filed or as of such other date as the court deems appropriate under the
circumstances.
(7) In any proceeding under subsection (1) of this section, the
court shall allow reasonable compensation to the custodian, provisional
director, appraiser or other such person appointed by the court for
services rendered and reimbursement or direct payment of reasonable costs
and expenses. Amounts described in this subsection shall be paid by the
corporation. [2001 c.315 §60] All or part of this
chapter may be amended or repealed at any time and all domestic and
foreign corporations subject to this chapter are governed by the
This chapter
applies to all domestic corporations in existence on June 15, 1987, that
were incorporated under any general statute of this state providing for
incorporation of corporations for profit if power to amend or repeal the
statute under which the corporation was incorporated was reserved. [1987
c.52 §176] A foreign
corporation authorized to transact business in this state on June 15,
1987, is subject to this chapter but is not required to apply for new
authority to transact business under this chapter. [1987 c.52 §177] (1) Except as provided in subsections
(2), (3) and (4) of this section, the repeal of a statute by this chapter
does not affect:
(a) The operation of the statute or any action taken under it
before its repeal;
(b) Any ratification, right, remedy, privilege, obligation or
liability acquired, accrued or incurred under the statute before its
repeal;
(c) Any violation of the statute, or any penalty, forfeiture or
punishment incurred because of the violation, before its repeal; or
(d) Any proceeding, reorganization or dissolution commenced under
the statute before its repeal. The proceeding, reorganization or
dissolution may be completed in accordance with the statute as if it had
not been repealed.
(2) The provisions of ORS 60.387 to 60.411 shall apply to all
indemnification made by a corporation after June 15, 1987 and all other
actions regarding indemnification taken by or on behalf of a corporation
or by a court after June 15, 1987, including all indemnification made and
other actions taken after June 15, 1987, with respect to claims that
arose or matters that occurred prior to June 15, 1987, or pursuant to any
provisions of any articles of incorporation, bylaws, resolutions or
agreements in effect prior to June 15, 1987.
(3) If a penalty or punishment imposed for violation of a statute
repealed by this chapter is reduced by this chapter, the penalty or
punishment, if not already imposed, shall be imposed in accordance with
this chapter.
(4) This chapter shall apply to any amendment to a corporation’s
articles of incorporation filed after June 15, 1987, even if shareholder
The
shareholders of any private incorporation incorporated by any special Act
of the Legislative Assembly before December 31, 1953, may incorporate
themselves under this chapter at any time after June 15, 1987, while the
corporation exists for the purpose of carrying on the enterprise,
business, pursuit or occupation for which they were specially
incorporated. The filing of the articles of incorporation shall be deemed
a surrender of the special incorporation, but not of any vested right
thereunder, and thereafter the corporation shall have the powers and
privileges, and be subject to the liabilities and limitations provided by
If any provision of this chapter or its
application to any person or circumstance is held invalid by a court of
competent jurisdiction, the invalidity does not affect other provisions
or applications of this chapter that can be given effect without the
invalid provision or application, and to this end the provisions of this
chapter are severable. [1987 c.52 §180]PENALTY (1) A person commits the
crime of falsely signing a document for filing if the person signs a
document knowing it is false in any material respect with intent that the
document be delivered to the office for filing.
(2) Falsely signing a document for filing is a Class B misdemeanor.
[Formerly 60.990]
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