USA Statutes : oregon
Title : TITLE 03 REMEDIES AND SPECIAL ACTIONS AND PROCEEDINGS
Chapter : Chapter 62 Cooperatives
This chapter shall be known and may be cited as
the “Oregon Cooperative Corporation Act.” [1957 c.716 §1] As used in this chapter, unless the context
requires otherwise:
(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 cooperative.
(b) The date of filing by the Secretary of State of an application
for authority to transact business in the case of a foreign cooperative.
(2) “Articles” means articles of incorporation, articles of
conversion and articles of merger.
(3) “Board” means board of directors.
(4) “Cooperative” means a cooperative corporation which is subject
to the provisions of this chapter.
(5) “Corporation” means a corporation which is not a cooperative.
(6) “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.
(7) “Domestic nonprofit corporation” means a corporation not for
profit incorporated under ORS chapter 65.
(8) “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.
(9) “Foreign cooperative” means a cooperative corporation organized
under laws other than the laws of this state.
(10) “Foreign corporation” means a corporation for profit
incorporated under the laws of a state other than this state.
(11) “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.
(12) “Foreign nonprofit corporation” means a corporation not for
profit organized under the laws of a state other than this state.
(13) “Foreign professional corporation” means a professional
corporation organized under the laws of a state other than this state.
(14) “Member” means a person who has been qualified and accepted
for membership in a cooperative.
(15) “Membership stock” means any class of stock, continuous
ownership of which is required for membership in a cooperative.
(16) “Negotiate” means to confer with another in order to come to
terms.
(17) “Person” includes individuals, corporations, associations,
firms, partnerships, joint stock companies, trusts, estates and foreign
and domestic cooperative corporations.
(18) “Shareholder” means a holder of shares of capital stock of a
cooperative other than membership stock. [1957 c.716 §2; 1963 c.492 §41;
1974 c.2 §4; 1987 c.94 §78; 1995 c.195 §1; 1999 c.362 §16; 2001 c.142 §1;
2001 c.315 §33; 2005 c.107 §2] (1) A document must satisfy the
requirements of this section or any other section that 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 of Secretary of State.
(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.
(6) The document must be executed:
(a) By the chairperson of the board of directors of a domestic
cooperative, 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 cooperative is in the hands of a receiver, trustee or
other court-appointed fiduciary, by that receiver, trustee or fiduciary.
(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; and
(c) An acknowledgment, verification or proof.
(8) If the Secretary of State has prescribed a mandatory form for
the document under ORS 62.045, the document must be in or on the
prescribed form.
(9) The document must be delivered to the Office of Secretary of
State and must be accompanied by the required fees.
(10) Delivery of a document to the Office of Secretary of State is
accomplished only when the document is actually received by the Office of
Secretary of State. [1987 c.94 §69; 1999 c.486 §7] 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.94 §71; 1991 c.132 §4; 1995 c.195 §35; 1999 c.362
§§17,17a] (1) Except as provided
in subsection (2) of this section and ORS 62.040, 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.94 §72; 1995 c.195 §36] (1) A cooperative 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 cooperative shall correct a document by delivering articles
of correction to the Office of Secretary of State. 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.94 §73] 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.94 §70; 1995 c.215 §9] (1) If a document
delivered to the Office of Secretary of State for filing satisfies the
requirements of ORS 62.025, 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 62.155 and 62.455, the
Secretary of State shall return an acknowledgment of filing to the
cooperative or its representative.
(3) If the Secretary of State refuses to file a document, the
Secretary of State shall return it to the cooperative 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 and is limited in scope of review as set out by
rule of the Secretary of State. 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 of Secretary of State 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.94 §74; 1999 c.486 §8]
If the Secretary of State refuses to file a document delivered to the
Office of Secretary of State for filing, the cooperative, in addition to
any other legal remedy that may be available, shall have the right to
appeal from such order pursuant to the provisions of ORS 183.480. [1987
c.94 §75] (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 of Secretary of State.
(2) The provisions of ORS 56.110 apply to all documents filed
pursuant to this chapter. [1987 c.94 §76] (1) Anyone may apply to the
Secretary of State to furnish a certificate of existence for a
cooperative.
(2) A certificate of existence when issued means that:
(a) The cooperative’s corporate name is registered in this state;
(b) The cooperative is duly incorporated under the law of 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 cooperative;
(d) An annual report required by ORS 62.455 has been filed by the
Secretary of State within the preceding 14 months; and
(e) Articles of dissolution 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 cooperative is in existence or is authorized to transact business
in the state. [1987 c.94 §77; 1995 c.195 §37]SUBSTANTIVE PROVISIONS
Cooperatives may be organized under this chapter for any lawful purpose
or purposes, except for the purpose of banking or insurance. [1957 c.716
§3] Each cooperative shall have power:
(1) To have perpetual succession unless a limited period of
duration is stated in its articles.
(2) To sue and be sued, complain and defend, in its corporate name.
(3) To have a corporate seal which may be altered at pleasure, and
to use the seal by causing it, or a facsimile thereof, to be impressed or
affixed or in any other manner reproduced.
(4) To purchase, take, receive, lease, take by gift, devise or
bequest, or otherwise acquire, own, hold, improve, use and otherwise deal
in and with, real or personal property, or any interest therein, wherever
situated.
(5) To sell, convey, mortgage, pledge, lease, exchange, transfer
and otherwise dispose of, all or any part of its property and assets.
(6) To purchase, take, receive, subscribe for, or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or
otherwise dispose of, and otherwise use and deal in and with, shares or
other interests in, or obligations of, other domestic or foreign
cooperatives and corporations, partnerships or individuals, or direct or
indirect obligations of the United States or of any other government,
state, territory, governmental district or municipality or of any
instrumentality thereof.
(7) To make contracts and incur liabilities, borrow money at such
rates of interest as the cooperative may determine, issue its notes,
bonds, certificates of indebtedness and other obligations, issue
certificates representing equity interests in its assets, and secure any
of its obligations by mortgage or pledge of all or any of its property,
franchises and income.
(8) To lend money for its corporate purposes, invest and reinvest
its funds and take and hold real and personal property as security for
the payment of funds so loaned or invested.
(9) To conduct its business and affairs and have offices and
exercise its powers in any state, territory, district or possession of
the United States, or in any foreign country.
(10) To elect or appoint officers and agents, and define their
duties and fix their compensation.
(11) To make and alter bylaws, consistent with its articles and the
laws of this state, for the administration and regulation of its affairs.
(12) To make donations for the public welfare or for charitable,
scientific or educational purposes.
(13) To cease its activities and surrender its franchise.
(14) To have and exercise all powers necessary or convenient to
effect any or all of the purposes for which the cooperative is organized.
[1957 c.716 §4; 1981 c.542 §1] (1) A person may apply to the Office of
Secretary of State 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 62.131, 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 of Secretary of State a notice
of the transfer executed by the person for whom the name was reserved and
specifying the name and address of the transferee. [1969 c.364 §2; 1987
c.94 §79]
(1) The name of a cooperative shall be
written in the English language and may include Arabic and Roman numerals
and incidental punctuation.
(2) The name of a cooperative shall be distinguishable upon the
records of the Office of Secretary of State from any other corporate
name, professional corporate name, nonprofit corporate name, cooperative
name, limited partnership name, reserved name, registered corporate name
or assumed business name of active record with the Office of Secretary of
State.
(3) The name of a cooperative need not satisfy the requirement of
subsection (2) of this section if the applicant delivers to the Office of
Secretary of State 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 cooperative name in this state.
(4) The provisions of this section do not prohibit a cooperative
from transacting business under an assumed business name.
(5) The provisions of this section do not:
(a) Abrogate or limit the law governing unfair competition or
unfair trade practices.
(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.94 §84] The initial bylaws of a cooperative shall be adopted
by its board of directors. Power to alter, amend or repeal the bylaws or
adopt new bylaws is vested in the members of the cooperative. Bylaws may
contain any provisions for the regulation and management of the affairs
of the cooperative not inconsistent with law or the articles. [1957 c.716
§8] (1) Membership in a cooperative is conditioned
on ownership of a share of membership stock or payment of a membership
fee as set forth in the articles. If the articles so provide, the bylaws
may authorize a procedure by which the membership fee initially stated in
the articles pursuant to ORS 62.513 (1)(c) may be changed without filing
amended or restated articles. The bylaws of a cooperative may authorize
membership conditioned upon payment of part of the membership fee or
payment for part of the membership stock subscribed for and compliance
with an agreement to pay the balance.
(2) Qualifications for membership and method of acceptance of
members shall be as set forth in the bylaws of the cooperative.
(3) Bylaws may provide for termination of membership and the
conditions and terms thereof. [1957 c.716 §9; 1995 c.195 §2](1) Each cooperative shall have and continuously maintain
in this state:
(a) A registered office which may, but need not be, the same as its
place of business.
(b) A registered agent who shall be:
(A) An individual resident in this state whose business office is
identical to such registered office;
(B) A domestic corporation, domestic limited liability company,
domestic professional corporation or domestic nonprofit corporation
having a business office identical to such 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 and having a business
office identical to such registered office.
(2) A cooperative may change its registered office or registered
agent in accordance with the procedure set forth in ORS 60.114.
(3) A person who has been designated by a cooperative as its
registered agent may resign in accordance with the procedure set forth in
ORS 60.117.
(4) A registered agent appointed by a cooperative is an agent of
the cooperative upon whom any process, notice or demand required or
permitted by law to be served upon the cooperative may be served.
(5) The provisions of ORS 60.121 are applicable to cooperatives.
[1957 c.716 §10; 1987 c.94 §80; 2001 c.315 §26] No act and no transfer of
property to or by a cooperative is invalid because in excess of the
cooperative’s power to do such act or make or receive such transfer,
except that such lack of power may be asserted in a proceeding by:
(1) A member, shareholder or director against the cooperative to
enjoin any act or transfer of property to or by the cooperative. If the
unauthorized acts or transfer sought to be enjoined are being, or are to
be, performed or made pursuant to any contract to which the cooperative
is a party, the court may, if all of the parties to the contract are
parties to the proceeding and if it deems the same to be equitable, set
aside and enjoin the performance of the contract, and in so doing may
allow to the cooperative or to the other parties to the contract, as the
case may be, compensation for the loss or damage sustained by either of
them which may result from the action of the court in setting aside and
enjoining the performance of the contract but anticipated profits to be
derived from the performance of the contract shall not be awarded by the
court as a loss or damage sustained.
(2) A cooperative, its legal representative, or through its members
or shareholders in a representative suit, against the officers or
directors or former officers or directors of the cooperative.
(3) The Attorney General against the cooperative in an action to
dissolve the cooperative or to enjoin it from the transaction of
unauthorized business. [1957 c.716 §11]
(1) Any cooperative,
including a cooperative which requires a membership fee rather than the
holding of membership stock as a prerequisite of membership, has power to
issue the number of shares of capital stock stated in its articles. Such
shares may be divided into more than one class with such designations,
preferences, limitations and relative rights as shall be stated in the
articles, except that capital stock as such shall have no voting power
except as specifically authorized in this chapter.
(2) The articles may require that members own one or more shares of
membership stock, and may provide limitations on the issuance and
transferability of such stock. Unless restricted by the articles, stock
other than membership stock may be issued or transferred without
limitation.
(3) Shares having a par value may be issued for such consideration
expressed in dollars, not less than the par value thereof, as shall be
fixed from time to time by the board. Shares without par value, may be
issued for such consideration expressed in dollars as may be fixed for
such shares by the board. Payment for shares may be in cash or other
property, tangible or intangible. If in other property, the value thereof
shall be determined by the board, and such determination, if made in good
faith, is conclusive.
(4) No certificate shall be issued for any share until such share
is fully paid.
(5) Shareholders as such have no preemptive right to purchase
additional shares. [1957 c.716 §12; 1963 c.156 §1] Each certificate of stock
of a cooperative shall bear the manual or facsimile signature of a
principal officer and shall include the following information:
(1) The name of the cooperative, number and class of the shares
represented by the certificate, the par value of each share or a
statement that the shares are without par value, and if the shares are
membership stock, their designation as such.
(2) Any restrictions on the issuance or transfer of such shares.
(3) If more than one class of stock is authorized or if stock is
authorized in a cooperative which requires a membership fee of its
members, designation of the several classes of stock and the respective
preferences, limitations and relative rights of such classes. In lieu of
a full statement, the information required by this subsection may be
given in summary form. [1957 c.716 §13] (1) A shareholder may vote either in
person or by proxy executed in writing by the shareholder or by the duly
authorized attorney-in-fact of the shareholder. No proxy shall be valid
after 11 months from the date of its execution unless otherwise provided
in the proxy. The following provisions, relating to voting of shares,
apply to shareholders of cooperatives and shares of the capital stock of
cooperatives other than membership stock:
(a) Shares standing in the name of another domestic or foreign
cooperative may be voted by such officer, agent or proxy as the bylaws of
the cooperative may prescribe, or, in the absence of such provision, as
the board of directors of the cooperative may determine.
(b) An administrator, executor, guardian or conservator holding
shares may vote the shares, either in person or by proxy, without a
transfer of such shares into the name of the administrator, executor,
guardian or conservator. Shares standing in the name of a trustee may be
voted by the trustee, either in person or by proxy, but no trustee shall
be entitled to vote shares held by the trustee without a transfer of the
shares into the trustee’s name.
(c) Shares standing in the name of a receiver may be voted by the
receiver, and shares held by or under control of a receiver may be voted
by the receiver without the transfer thereof into the receiver’s name if
authority so to do is contained in an appropriate order of the court by
which the receiver was appointed.
(d) A shareholder whose shares are pledged shall be entitled to
vote the shares until the shares have been transferred into the name of
the pledgee, and thereafter the pledgee shall be entitled to vote the
shares so transferred.
(3) For the purpose of determining shareholders entitled to notice
of or to vote at meetings, or entitled to receive payment of any
dividend, the bylaws may fix in advance a date as the record date for any
such determination of shareholders. Such date shall be not more than 50
days and not less than 10 days prior to the date on which the particular
action requiring such determination of shareholders is to be taken. If no
such record date is fixed by the bylaws, the date on which notice of the
meeting is mailed or the date on which the resolution of the board of
directors declaring such dividend is adopted, as the case may be, shall
be the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting has been
made as provided in this section, such determination shall apply to any
adjournment of that meeting. [1957 c.716 §15; 1987 c.94 §81]
(1) A subscription agreement for shares,
including membership stock, of a cooperative, where the subscription is
entered into before incorporation, or an agreement entered into before
incorporation to pay a membership fee is irrevocable for six months
unless:
(a) Otherwise provided by the subscription agreement or the
agreement to pay a membership fee; or
(b) All subscribers or parties to all the agreements to pay a
membership fee consent to the revocation.
(2) If a subscriber defaults in payment of money or property under
a subscription agreement entered into before incorporation, or if a party
to an agreement to pay a membership fee defaults in the payment of money
or property under an agreement to pay a membership fee entered into
before incorporation, the cooperative may collect the amount owed as any
other debt. Alternatively, unless the subscription agreement or agreement
to pay a membership fee provides otherwise, the cooperative may rescind
the agreement if the debt remains unpaid more than 20 days after the
cooperative sends written demand for payment to the subscriber or the
party. [1957 c.716 §16; 1995 c.195 §3]
Except
for debts lawfully contracted between a member or shareholder and the
cooperative, no member or shareholder is liable for the acts or debts of
the cooperative to an amount exceeding the sum remaining unpaid on the
subscription of the member or shareholder for shares of the cooperative,
and the sum remaining unpaid on such member’s membership fee if such fee
is required by the cooperative. [1957 c.716 §17; 1995 c.195 §4]
A cooperative organized with
capital stock may pay a dividend upon capital stock as is authorized by
its articles. A payment under this section shall not be made if the
result of the payment would be to bring the value of the cooperative’s
remaining assets below the aggregate of the cooperative’s indebtedness.
[1957 c.716 §18; 1995 c.195 §5](1) Unless the articles provide otherwise, a
cooperative may recall membership stock upon termination of membership,
acquire, exchange, redeem, and reissue its own shares or other evidences
of equity. Consideration paid for shares of membership stock recalled by
the cooperative shall be the par value thereof and accrued and unpaid
dividends, if any, except that if such shares have no par value the
consideration paid therefor shall be the consideration in dollars for
which the shares were issued plus accrued and unpaid dividends. The
cooperative may set off obligations to it of the holder of membership
stock or other stock or other evidence of equity, including capital
credits or accounts representing capital credits. The cooperative shall
have a continuing perfected security interest in the evidence of equity,
capital credits or accounts representing capital credits to secure
payment of any indebtedness, whenever incurred, owed to the cooperative
by the holder. Notwithstanding any other provision of law, the security
interest shall take priority over all other perfected security interests.
No such acquisition, recall or redemption of stock or other evidence of
equity shall be made if the result thereof would be to bring the value of
the remaining assets of the cooperative below the aggregate of its
indebtedness. The articles may provide other limitations on the right of
a cooperative to acquire, recall, exchange or redeem its shares or other
evidences of equity.
(2) When shares are acquired, recalled, exchanged or redeemed by
the cooperative, such shares shall be restored to the status of
authorized but unissued shares. [1957 c.716 §14; 1993 c.428 §1](1)
When a certificate of membership in a cooperative or a certificate for a
share or shares of membership or capital stock, if certificated, in a
cooperative, or other written evidence of the apportionment, distribution
and payment of net proceeds or savings of the cooperative, or of any
indebtedness or other equity interest in a cooperative, issued by a
cooperative is missing, the cooperative shall issue a duplicate thereof
upon the request of the owner and upon the furnishing of such indemnity
as may be required by the cooperative.
(2) When records showing ownership of membership in a cooperative
or of a share or shares of membership or capital stock in a cooperative,
or of the apportionment, distribution and payment of net proceeds or
savings of the cooperative, or of any indebtedness or other equity
interest in a cooperative, are missing and if the information which is
missing is necessary to a proposed redemption of any of the items
described in this subsection, the cooperative may give notice and redeem
the items as follows:
(a) The cooperative shall set aside an amount equal to the value of
the items to be redeemed.
(b) The cooperative shall give notice of the redemption to all
owners of items of which the cooperative has knowledge.
(c) If there are items the ownership of which is unknown to the
cooperative, it shall publish notice of the redemption at least once a
month for four months in a newspaper of general circulation in the county
in which the registered office of the cooperative is located.
(d) After the completion of the publication, any unclaimed
outstanding items represented by the missing records may then be
terminated in accordance with the provisions of this chapter dealing with
unclaimed distributions, redemptions or proceeds. [1957 c.716 §19; 1995
c.195 §6] (1) Meetings of members may be held
either within or without this state as may be provided in the bylaws, and
in the absence of a bylaw provision such meetings shall be held at the
principal place of business of the cooperative.
(2) An annual meeting of the members shall be held at such time or
within such time as may be provided in the bylaws. If the bylaws do not
fix a time for such meeting, the annual meeting shall be held in each
calendar year at such time as the board shall determine. Failure to hold
the annual meeting at the designated time does not work a forfeiture or
dissolution of the cooperative.
(3) Special member meetings may be called by the president or the
board; or the secretary shall call such a meeting upon the filing of a
petition stating the business to be brought before the meeting signed by
not less than 10 percent of the members of the cooperative.
(4) Written or printed notice, stating the place, day and hour, and
in case of a special member meeting the purposes for which the meeting is
called, shall be given to each member and each shareholder, if
shareholders are entitled to vote at such meeting, either personally or
by mail not less than seven or more than 30 days before the meeting by
direction of the person calling the meeting. If mailed, the notice shall
be deemed to be given when deposited in the United States mail addressed
to the member or shareholder at the address of the member or shareholder
as it appears on the records of the cooperative with postage thereon
prepaid. At any meeting at which the members are to be represented by
delegates, notice to the members may be given by notifying the delegates
and their alternates if any.
(5) A cooperative may provide in its bylaws:
(a) For the formation of districts and the holding of member
meetings by districts and that elections of directors may be held at
district meetings.
(b) That district meetings may elect delegates who shall represent
their districts in annual and special meetings of the members. Notice of
district meetings shall be given in the same manner as prescribed in this
section for member meetings. [1957 c.716 §20]
(1) At any member meeting each member has
one vote except that bylaws may authorize voting according to actual,
estimated or potential patronage, or a combination of such plans of
voting. Shares of stock as such shall not be given voting power except in
the specific instances authorized by this chapter.
(2) Members as such shall not vote by proxy; but a member that is a
corporation, association or partnership may designate a representative to
cast its vote. In the absence of written notice that some person has been
designated to represent a member which is other than a natural person,
such member may be represented by any of its principal officers. If the
bylaws of a cooperative provide for the formation of districts and the
election of delegates at district meetings to represent their districts
in member meetings, such representation is not considered voting by
proxy, and the delegates so elected shall cast the votes to which members
represented by them are entitled on such matters as are not covered by
mail ballots submitted to all members.
(3) If the bylaws so provide, the board may cause to be submitted
by mail ballot any question to be voted on at any member meeting,
including the election of directors. In such event the secretary shall
mail to each member along with the notice of the meeting, the ballot on
each such question and a voting envelope. The ballot may be cast only in
a sealed envelope which is authenticated by the member’s signature. A
vote so cast shall be counted as if the member were present and voting in
person.
(4) The bylaws may set forth provisions, not inconsistent with this
chapter, relating to the methods and procedures for voting. [1957 c.716
§21] (1) Those members present at any annual
or special member meeting of a cooperative constitute a quorum at the
meeting, unless the bylaws of that cooperative provide that a greater
number constitutes a quorum.
(2) Any action taken at a member meeting of a cooperative
subsequent to December 31, 1953, and prior to January 1, 1958, which
would have been effective except for the absence of a quorum shall be
deemed effective in all respects if there were present at such meeting a
quorum of members as provided in the bylaws of that cooperative which
were in effect at the time of that meeting. [1957 c.716 §22] (1) The corporate powers of a
cooperative shall be exercised by or under the authority of the board of
directors, and the business and affairs of a cooperative shall be managed
under the direction of the board of directors. Each director, at all
times during the director’s term of office, shall be a member or a
representative of a member which is other than a natural person. Unless
the bylaws otherwise provide, directors need not be residents of this
state. The bylaws may prescribe any other qualifications for directors
and may provide that directors be from specified territorial districts.
The bylaws may also provide that voting on the election of directors from
specified territorial districts may be limited to members from the
respective districts without the obligation to hold district meetings.
(2) The number of directors of a cooperative shall be not less than
three, unless the number of members of the cooperative is less than
three. If the number of members of the cooperative is less than three,
the number of directors shall not be less than the number of members of
the cooperative. Subject to this limitation, the number of directors
shall be fixed or determined by the bylaws, except as to the number
constituting the initial board, which number shall be fixed by the
articles.
(3) Directors constituting the initial board named in the articles
shall hold office until the first annual meeting of the members and until
their successors are elected and take office. At that meeting and
thereafter, directors shall be elected by the members in the manner and
for the term of office, not to exceed three years, provided in the
bylaws. Each director shall begin immediately to discharge the duties of
director and, subject to resignation or removal, shall hold office for
the term for which the director was elected and until a successor takes
office.
(4) A director may be removed upon a majority vote of all members
voting in person thereon at a duly called member meeting if written
reasons for removal of the director are included in the notice of the
meeting and the director whose removal is sought has had an opportunity
to answer the reasons at the meeting. The written statement of reasons
for removal shall be filed with the minutes of the meeting. The bylaws
may contain such other provisions for the removal of a director as may be
consistent with the provisions of this subsection.
(5) Unless the bylaws provide otherwise, any vacancy occurring in
the board may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the board. The director
elected to fill a vacancy shall be elected for the unexpired term of the
director’s predecessor in office. [1957 c.716 §23; 1981 c.542 §2; 1995
c.195 §7](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 cooperative.
(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 cooperative 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 cooperative or any proposal
to merge or consolidate the cooperative with another corporation or
cooperative or to purchase or otherwise acquire all or substantially all
the properties and assets of the corporation or cooperative, the
directors of the cooperative may, in determining what they believe to be
in the best interests of the cooperative, give due consideration to the
social, legal and economic effects on employees, customers and suppliers
of the cooperative and on the communities and geographical areas in which
the cooperative and its subsidiaries operate, the economy of the state
and nation, the long term as well as short term interests of the
cooperative and its members, including the possibility that these
interests may be best served by the continued independence of the
cooperative, and other relevant factors. [1981 c.542 §3; 1995 c.195 §8] (1) A conflict of interest
transaction is a transaction with the cooperative, other than in the
ordinary course of business for which the cooperative is organized,
whether or not on a patronage basis, in which a director of the
cooperative has a direct or indirect interest. A conflict of interest
transaction is not voidable by the cooperative 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 members entitled to vote and they
authorized, approved or ratified the transaction; or
(c) The transaction was fair to the cooperative.
(2) For purposes of this section, a director of the cooperative 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 cooperative.
(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, unless only
one director is authorized to serve pursuant to ORS 62.280. 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 member votes entitled to be
counted under this subsection. Any director who is a member who has a
direct or indirect interest in the transaction, and any votes by a member
under the control of an entity described in subsection (2)(a) of this
section may be counted in a vote of members to determine whether to
authorize, approve or ratify a conflict of interest transaction under
subsection (1)(b) of this section. A majority of the members, 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. [1995 c.195 §9] (1) Regular or special
meetings of the board may be held either within or without this state.
(2) Regular meetings of the board may be held with or without
notice as prescribed in the bylaws. Special meetings of the board shall
be held upon such notice as is prescribed in the bylaws. Attendance of a
director at a meeting shall constitute a waiver of notice of the meeting
except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not
lawfully called or convened.
(3) Unless the bylaws provide otherwise, the purposes of any
meeting of the board need not be specified in the notice or waiver of
notice of the meeting.
(4) Unless a greater number is required in the bylaws, a majority
of the number of directors fixed by or determined pursuant to the bylaws,
or in the absence of a bylaw fixing the number of directors, then of the
number stated in the articles, shall constitute a quorum for the
transaction of business. Unless a greater number is required in the
bylaws, an act of the majority of the directors present at a meeting at
which a quorum is present is the act of the board. [1957 c.716 §24] (1) Except as provided
by subsection (3) of this section, a cooperative may not lend money to or
guarantee the obligation of a director of the cooperative unless:
(a) The particular loan or guarantee is approved by a majority of
the votes of all the members excluding the votes of any member who is a
benefited director; or
(b) The cooperative’s board of directors determines that the loan
or guarantee benefits the cooperative 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 cooperatives. [1995 c.195 §10]Unless otherwise restricted by the articles of
incorporation or bylaws of a cooperative, members of the board of
directors of a cooperative or any committee designated by the board may
hold a meeting of the board or committee by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a
meeting pursuant to this section shall constitute presence in person at
the meeting. [1981 c.542 §5] (1) If the bylaws so provide, the board
may elect an executive committee to consist of three or more directors,
which committee to the extent provided in the bylaws of the cooperative
shall have and may exercise all the authority of the board in the
management of the cooperative, except in respect to:
(a) Apportionment or distribution of net proceeds, savings or
losses.
(b) Selection of officers.
(c) Filling of vacancies in the board or the executive committee.
(2) The board may elect other directors as alternates for members
of the executive committee.
(3) Designation of an executive committee and the delegation
thereto of authority shall not operate to relieve the board or any member
thereof of any responsibility imposed upon the board or member by law.
[1957 c.716 §25] (1) The principal officers of a cooperative are a
president, one or more vice presidents as prescribed in the bylaws, a
secretary and a treasurer. These officers shall be elected annually by
the board at such time and in such manner as the bylaws provide. The
offices of secretary and treasurer may be combined in one person. At
least one principal officer must be a director of the cooperative. The
manager of a cooperative may hold the office of president or any other
office.
(2) The bylaws may provide for a chairperson of the board of
directors. The offices of chairperson and president may be combined in
one person. However, notwithstanding subsection (1) of this section, a
person who is not a director may not serve as chairperson of the board of
directors.
(3) Any other officer may be chosen by the board.
(4) All officers shall have such authority and perform such duties
as the bylaws provide, or as the board may determine, not inconsistent
with the bylaws. Any officer may be removed by the board whenever in its
judgment the best interests of the cooperative will be served thereby.
Election or appointment shall not of itself create contract rights. [1957
c.716 §26; 1969 c.312 §1; 1981 c.542 §4](1) Unless the bylaws provide otherwise, only the members of
the cooperative may establish compensation or other benefits for a
director, not available generally to officers and employees, for services
as a director.
(2) Unless the bylaws provide otherwise, no director shall hold
during the term as director any position in the cooperative on regular
salary.
(3) Unless the bylaws provide otherwise, the board may provide, for
prior or future services of any officer or employee, reasonable
compensation, pension or other benefits to such officer or employee and
pension or other benefits to a member of the family of the officer or
employee or beneficiaries of the officer or employee. No officer or
employee who is a director may take part in any vote on the compensation
of the officer or employee for services rendered or to be rendered the
cooperative. [1957 c.716 §27] Any
action required by this chapter to be taken at a meeting of the members
or directors of a cooperative, or any other action which may be taken at
a meeting of the members, directors or members of the executive
committee, and any matter on which shareholders are entitled to vote
under this chapter, may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by all of the
members, directors, executive committee members or shareholders entitled
to vote with respect to the subject matter thereof. Such consent shall
have the same force and effect as a unanimous vote at a meeting. Unless
the consent specifies a different effective date, action taken under this
section is effective when the last member, director, member of the
executive committee or shareholder entitled to vote, signs the consent.
[1957 c.716 §28; 1995 c.195 §11] Whenever any notice is required to be
given to any member or director of a cooperative under the provisions of
this chapter or under the provisions of the articles or bylaws of a
cooperative, a waiver thereof in writing signed by the person or persons
entitled to the notice, whether before or after the time stated therein,
is equivalent to the giving of the notice. [1957 c.716 §29] Whenever the articles
require the vote of a greater proportion of the members or shareholders
than required by this chapter, the articles shall control. [1957 c.716
§30](1) No action may be instituted or maintained
in the right of any cooperative by a member or shareholder unless the
member or shareholder:
(a) Alleges in the complaint that the member or shareholder was a
member or shareholder of record when any part of the transaction of which
complained took place, or that the membership or stock thereafter
devolved upon the member or shareholder by operation of law from a member
or shareholder at such time.
(b) Alleges in the complaint with particularity the efforts of the
member or shareholder to secure from the board such action as desired.
The member or shareholder shall further allege that the member or
shareholder has either informed the cooperative or board in writing of
the ultimate facts of each cause of action against each director or
delivered to the cooperative or board a copy of the complaint proposed to
be filed. The member or shareholder shall state the reasons for failure
to obtain such action or the reasons for not making such effort.
(c) Files a complaint in such action within 20 days after
notification given to the cooperative or board as provided by paragraph
(b) of this subsection.
(2) The action shall not be dismissed or compromised without the
approval of the court.
(3) If anything is recovered or obtained as the result of the
action, whether by means of a compromise and settlement or by a judgment,
the court may direct the plaintiff to account to the cooperative for the
remainder of the proceeds.
(4) In an action brought in the right of a cooperative by fewer
than three percent of the members or by holders of less than three
percent of any class of stock outstanding, the defendants may require the
plaintiff to give security for the reasonable expenses of defending the
action, including attorney fees. The amount of the security may
thereafter be increased or decreased in the discretion of the court upon
showing that the security provided is or may be inadequate or is
excessive.
(5) The court may award reasonable attorney fees to the prevailing
party in an action under this section. [1957 c.716 §69; 1981 c.897 §15;
1995 c.618 §38] (1) Contracts for any of the
following purposes, whether contained in the bylaws or separately
written, are valid when made between a cooperative and any member in
which such member agrees to:
(a) Sell, market or deliver to or through the cooperative or any
facilities furnished by it, all or any specified part of products
produced or to be produced either by the member or under the control of
the member.
(b) Authorize the cooperative or any facilities furnished by it to
act for the member in any manner with respect to all or any specified
part of such products.
(c) Buy or procure from or through the cooperative or any
facilities furnished by it, all or any specified part of goods or
services to be bought or procured by the member.
(d) Authorize the cooperative or any facilities furnished by it to
act for the member in any manner in the procurement of goods or the
procurement or performance of services.
(2) The contract referred to in subsection (1) of this section may
fix and require liquidated damages to be paid by the member to the
cooperative in the event of breach of the contract by the member.
Liquidated damages may be a percentage of the value or a specific amount
per unit of the products, goods or services involved by the breach, or a
specific sum.
(3) Two or more cooperatives may contract and act in association,
corporate or otherwise, to perform collectively any of their powers or
purposes authorized by this chapter. [1957 c.716 §32] (1) A cooperative may
record any contract authorized by ORS 62.355 in the office of the county
clerk of the county in which the member resides or in which products
covered by that contract have been or are to be produced. If the
cooperative has substantially uniform contracts with more than one member
residing or producing such products in any county, it may, in lieu of
recording the original contracts, record:
(a) A true copy of the uniform contract; and
(b) A sworn list or sworn lists of the names of members who have
executed such contract and who reside or produce such products in that
county, and the effective date of the contract as to each such member.
(2) The county clerk shall record each such contract, and shall
record alphabetically in the Cooperative Contract Record the name of each
party to that contract. For recording such contract the fee is the same
as for recording a contract under ORS 205.320.
(3) Recording pursuant to this section shall operate as
constructive notice to all persons of the existence and contents of the
contract. Any right, title, interest or lien created as to the products
covered by the contract subsequent to such recording is subject to the
cooperative’s right, title or interest under that contract. If the member
creates any mortgage upon or other security interest in any such products
subsequent to such contract recording, and if the member and the
mortgagee or secured party jointly notify the cooperative in writing of
the existence and amount of the mortgage or other security interest, all
payments which after such notice become due from the cooperative to that
member by reason of the cooperative’s sale or other handling of those
products shall be paid by the cooperative to the mortgagee or other
secured interest until the amount of the mortgage or secured party has
been paid, and the balance thereafter shall be paid to the member.
(4) When a contract recorded under this section has been terminated
in any manner, the cooperative shall give, upon demand, a statement of
termination to the member party to the contract, who may record the
statement in the office of the county clerk where the contract was
originally filed or recorded. The county clerk shall record the
termination and index the name of the member in the Cooperative Contract
Record. A cooperative may record at any time in the office of the county
clerk where the contract was originally filed or recorded, a sworn list
of the names of all persons whose contracts have been terminated in any
manner other than by expiration of their term, and the county clerk shall
record the termination and index the name of each of those persons in the
Cooperative Contract Record. The fee for recording and indexing a
document under this section is the fee established in ORS 205.320. [1957
c.716 §33; 1965 c.632 §6; 1971 c.621 §12; 1975 c.607 §14; 1979 c.833 §15;
1981 c.835 §5; 1999 c.654 §3](1) In the event of a breach or threatened
breach of a cooperative contract authorized by ORS 62.355, the
cooperative is entitled to an injunction to prevent the breach or any
further breach thereof, and to a judgment of specific performance
thereof. Upon filing of a verified complaint showing the breach or
threatened breach, and upon filing a sufficient bond, the cooperative is
entitled to a temporary restraining order.
(2) Any person who, with knowledge that a contract exists, induces
or attempts to induce any member to breach the contract with the
cooperative, or who in any manner aids a breach of the contract, is
liable to the cooperative for damages caused by such interference. The
cooperative is also entitled to an injunction to prevent any interference
or further interference with the contract. [1957 c.716 §34; 2003 c.576
§324]In addition to
the remedies provided in ORS 62.365 (2), any person who knowingly and
maliciously induces or attempts to induce any member of a cooperative to
breach a contract of the member with the cooperative authorized by ORS
62.355, or who knowingly and maliciously spreads any false report about
the finances or management of a cooperative is liable, in a civil action,
to the cooperative aggrieved, in the penal sum of $500 for each offense.
[1957 c.716 §72](1) The net proceeds or savings of a cooperative shall be
apportioned, distributed and paid periodically to those persons entitled
to receive them, at such times and in such reasonable manner as the
bylaws shall provide; except that net proceeds or savings on patronage of
the cooperative by its members shall be apportioned and distributed among
those members in accordance with the ratio which each member’s patronage
during the period involved bears to total patronage by all members during
that period. The bylaws may contain any reasonable provisions for the
apportionment and charging of net losses. For the purposes of this
section work performed as a member of a workers’ cooperative shall be
deemed to be patronage of that cooperative.
(2) The apportionment, distribution and payment of net proceeds or
savings required by subsection (1) of this section may be in cash,
credits, capital stock, certificates of interest, revolving fund
certificates, letters of advice or written evidence of indebtedness or
other equity interest issued by the cooperative or by any affiliated
domestic or foreign cooperative association whether or not incorporated
under this chapter.
(3) Apportionment and distribution of its net proceeds or savings
or net losses may be separately determined for, and be based upon
patronage of, single or multiple pools, particular departments of the
cooperative, or as to particular commodities, supplies or services, or
such apportionment and distribution may be based upon classification of
patronage according to the type thereof.
(4) A cooperative may provide in its bylaws:
(a) The minimum amount of any single patronage transaction; and
(b) The minimum aggregate amount of patronage transactions by any
patron during the fiscal year of the cooperative.
(5) Any amount described in subsection (4) of this section shall be
taken into account for the purpose of participation in allocation and
distribution of net proceeds or savings or net losses under this section.
(6) For the purposes of this section net proceeds or savings or net
losses shall be computed in accordance with generally accepted accounting
principles applicable to cooperative corporations, and after deducting
from gross proceeds or savings any dividends paid upon capital stock.
[1957 c.716 §36; 1963 c.156 §2; 1995 c.79 §15; 1995 c.195 §12] (1) Any
distribution of net margins by a cooperative or any redemption of or
payment based upon any indebtedness, capital stock of a cooperative or
other equity interest which remains unclaimed four years after the date
authorized for payment, redemption or retirement may be forfeited by the
board. Any amount forfeited may revert to the cooperative, if, at least
six months prior to the declared date of forfeiture, notice that the
payment is available has been mailed to the last-known address of the
person shown by the cooperative’s records to be entitled thereto or, if
the address is unknown, is published as provided by ORS 62.245.
(2) This section applies to payments authorized before or after
January 1, 1958, except that this section does not authorize the
forfeiture prior to January 1, 1959, of any right to any such amount
which would not otherwise have been barred prior to January 1, 1959.
[1957 c.716 §37; 1987 c.341 §1; 1995 c.195 §13](1) If authorized by the bylaws, a cooperative
may pay the following persons up to $10,000 in redemption or refund of
capital credits or retains recorded on the books and records of the
cooperative in the name of a deceased owner thereof:
(a) The surviving spouse of the deceased owner;
(b) If there is no surviving spouse, the deceased owner’s surviving
children 18 years of age or older;
(c) If the deceased owner left no surviving spouse or surviving
children 18 years of age or older, the deceased owner’s surviving
parents; or
(d) If there is no surviving spouse, surviving children 18 years of
age or older or surviving parent, the deceased owner’s surviving brothers
and sisters 18 years of age or older.
(2) The affidavit of the person claiming payment shall:
(a) State where and when the deceased owner died;
(b) State that the total face value of the capital credits or
retains of the deceased owner in the cooperative does not exceed $10,000
and that they are free and clear of any security interest or other lien
or encumbrance;
(c) Show the relationship of the affiant or affiants to the
deceased owner;
(d) Embody a promise to pay the expenses of last sickness, funeral
expenses and just debts of the deceased owner out of the capital credits
or retains to be redeemed or refunded to the full extent thereof if
necessary, and to distribute any balance to those persons entitled
thereto by law; and
(e) State any other information deemed appropriate by the
cooperative.
(3) A cooperative is under no obligation to determine the
relationship of the affiant to the deceased owner, or to determine other
than from its books and records whether the deceased owner’s capital
credits or retains are subject to a security interest or other lien or
encumbrance. Payment made in good faith to the person making the
affidavit is a full acquittance and release of the cooperative for the
amount so paid.
(4) A probate proceeding is not necessary to establish the right of
the surviving spouse, surviving children, surviving parent or surviving
brothers and sisters to obtain payment of the capital credits or retains
as provided by this section. However, if a personal representative is
appointed in an estate of a deceased member or patron whose capital
credits or retains have been redeemed or refunded under this section, the
person or persons signing the affidavit shall account for them to the
personal representative.
(5) Nothing in this section shall abrogate the rights of a
cooperative set forth in ORS 62.235, and a cooperative’s right to set off
from a deceased owner’s capital credits or retains any debts owed to the
cooperative by the deceased owner. This section shall not require that
redemption or refund of capital credits or retains be made in accordance
with this section, or otherwise limit or affect the manner in which a
cooperative may pay, redeem, refund, administer or distribute its net
savings, or any retains thereof, capital credits or other equity
interests, nor shall it be deemed or construed to impose any further
obligation or liability on a cooperative in its payment or redemption of
retains in excess of $10,000.
(6) Notwithstanding any provision of this section, if the
cooperative’s books and records reflect that the deceased owner’s capital
credits or retains are subject to a security interest or other
encumbrance, the cooperative shall not be relieved of any liability
arising from the security interest or the encumbrance if the redemption
or refund of capital credits is made to the person making the affidavit
under this section. [1995 c.195 §31; 1999 c.377 §1] (1) The sale,
lease, exchange or other disposition of all, or substantially all, the
property and assets of a cooperative, when made in the usual and regular
course of the business of the cooperative, may be made on such terms and
conditions and for such consideration, which may consist in whole or in
part of money or property, real or personal, including shares of any
other cooperative, corporation or association, domestic or foreign, as
shall be authorized by its board; and in such case no authorization or
consent of members or shareholders is required.
(2) A sale, lease, exchange or other disposition of all, or
substantially all, the property and assets, with or without the goodwill,
of a cooperative, if not made in the usual and regular course of its
business, may be made upon such terms and for such consideration, which
may consist in whole or in part of money or property, real or personal,
including shares of any other cooperative, corporation or association, as
may be authorized in the following manner:
(a) The board shall adopt a resolution recommending the sale,
lease, exchange or other disposition and directing the submission thereof
to a vote at a meeting of members, which may be either an annual or a
special meeting, or if there are shareholders the submission shall be to
a joint meeting of members and shareholders.
(b) Written or printed notice shall be given to each member and to
each shareholder within the time and in the manner provided in ORS 62.255
for the giving of notice of meetings of members, and shall state that the
purpose, or one of the purposes, of the meeting is to consider the
proposed sale, lease, exchange or other disposition.
(c) At the meeting, the members, by affirmative vote of a majority
of the member votes cast thereon, and the shareholders, by affirmative
vote of a majority of the shareholder votes entitled to be voted thereon,
or in the case of an electric or a telephone cooperative by affirmative
vote of two-thirds of all the members and affirmative vote of two-thirds
of the shareholder votes entitled to be voted thereon, may approve the
sale, lease, exchange or other disposition, and may fix, or may authorize
the board to fix, any or all of the terms and conditions thereof and the
consideration to be received by the cooperative therefor.
(3) After authorization by votes of members and shareholders, the
board nevertheless, in its discretion, may abandon the sale, lease,
exchange or other disposition of assets subject to the rights of third
parties under any contracts relating thereto, without further action or
approval by members or shareholders. [1957 c.716 §48] (1) A cooperative shall
keep correct and complete books and records of account, and shall keep
minutes of the proceedings of its members, board and executive committee.
It shall keep at its principal office records of the names and addresses
of all members and shareholders. At any reasonable time, any member or
shareholder, or the agent or attorney of any member or shareholder, upon
written notice stating the purposes thereof, may examine for any proper
purpose any books or records pertinent to the purpose specified in the
notice and may make extracts therefrom, all in accordance with any
reasonable conditions prescribed by the board restricting the disclosure,
dissemination or use by any member or shareholder, or any agent or
attorney of any member or shareholder, of any information therein
contained. The board may deny a request to examine books and records if
the board determines that the purpose is not directly related to the
business or affairs of the cooperative and is contrary to the best
interests of the cooperative.
(2) In any action or proceeding to enforce the rights of members or
shareholders provided in this section, the court may award reasonable
attorney fees to the prevailing party. [1957 c.716 §31; 1981 c.897 §16;
1995 c.195 §14; 1995 c.618 §39] (1) Each
cooperative shall by its anniversary deliver to the Office of Secretary
of State for filing an annual report that sets forth:
(a) The name of the cooperative.
(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
cooperative.
(e) The category of the classification code established by rule of
the Secretary of State most closely designating the primary business
activity of the cooperative.
(f) The federal employer identification number of the cooperative.
(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 cooperative.
(3) The Secretary of State shall mail the annual report form to any
address shown for the cooperative in the current records of the Office of
Secretary of State. The failure of the cooperative to receive the annual
report form from the Secretary of State shall not relieve the cooperative
of its duty to deliver an annual report to the Office of Secretary of
State 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
cooperative in writing and return the report to it for correction. The
cooperative must correct the error within 45 days after the Secretary of
State gives such notice.
(5) A cooperative may deliver to the Office of Secretary of State
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 of Secretary of State 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 cooperative as shown on the records of the
Office of Secretary of State; and
(b) The information as changed. [1957 c.716 §63; 1963 c.492 §43;
1983 c.717 §25; 1985 c.728 §66; 1987 c.94 §82; 1987 c.843 §16]INDEMNIFICATION OF DIRECTORS
(1) “Cooperative” includes any domestic or foreign predecessor
entity of a cooperative 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
cooperative or an individual who, while a director of a cooperative, is
or was serving at the cooperative’s request as a director, officer,
partner, trustee, employee or agent of another foreign or domestic
cooperative, corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. A director is considered to be serving
an employee benefit plan at the cooperative’s request if the director’s
duties to the cooperative 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” includes counsel fees.
(4) “Liability” means the obligation to pay a judgment, settlement,
penalty or 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
cooperative or an individual who, while an officer of a cooperative, is
or was serving at the cooperative’s request as a director, officer,
partner, trustee, employee or agent of another foreign or domestic
cooperative, corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. An officer is considered to be serving
an employee benefit plan at the cooperative’s request if the officer’s
duties to the cooperative 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. [1995 c.195 §15] (1)
Except as provided in subsection (4) of this section, a cooperative 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 cooperative, 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
or 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 cooperative may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the
cooperative in which the director was adjudged liable to the cooperative;
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 cooperative is limited to
reasonable expenses incurred in connection with the proceeding.
(6) If a cooperative indemnifies or advances expenses to a director
under this section or ORS 62.466, 62.468 or 62.472 in connection with a
proceeding by or in the right of the cooperative, the cooperative shall
report the indemnification or advance in writing to the members with or
before the notice of the next membership meeting. [1995 c.195 §16] Unless limited by its
articles of incorporation, a cooperative 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 cooperative against reasonable expenses incurred by the director
in connection with the proceeding. [1995 c.195 §17] (1) A cooperative 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 cooperative a written affirmation of
the director’s good faith belief that the director has met the standard
of conduct described in ORS 62.464; and
(b) The director furnishes the cooperative 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 members or board of directors or by contract. [1995 c.195 §18] Unless the cooperative’s
articles of incorporation provide otherwise, a director of the
cooperative 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
62.466, in which case the court shall also order the cooperative 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 62.464 or was
adjudged liable as described in ORS 62.464 (4), whether the liability is
based on a judgment, settlement or proposed settlement or otherwise.
[1995 c.195 §19] (1) A
cooperative may not indemnify a director under ORS 62.464 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
62.464.
(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 members.
(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. [1995 c.195 §20] Unless a
cooperative’s articles of incorporation provide otherwise:
(1) An officer of the cooperative is entitled to mandatory
indemnification under ORS 62.466, and is entitled to apply for
court-ordered indemnification under ORS 62.472, in each case to the same
extent as a director under ORS 62.466 or 62.472.
(2) The cooperative may indemnify and advance expenses under ORS
62.462 to 62.482 to an officer, employee or agent of the cooperative to
the same extent as to a director. [1995 c.195 §21] A cooperative 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 cooperative or who, while a director, officer, employee or agent of
the cooperative, is or was serving at the request of the cooperative as a
director, officer, partner, trustee, employee or agent of another foreign
or domestic cooperative, corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. The cooperative may purchase
and maintain the insurance even if the cooperative has no power to
indemnify the individual against the same liability under ORS 62.464 or
62.466. [1995 c.195 §22] (1) The indemnification
and provisions for advancement of expenses provided by ORS 62.462 to
62.482 shall not be deemed exclusive of any other rights to which
directors, officers, employees or agents may be entitled under the
cooperative’s articles of incorporation or bylaws, any agreement, general
or specific action of its board of directors, vote of members 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 cooperative 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 members or any resolution
or agreement approved, adopted or ratified, before or after such
indemnification or agreement is made, by the members, 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
62.513 (4)(f); 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 62.474.
(2) If articles of incorporation limit indemnification or advance
of expenses, any indemnification or advance of expenses is valid only to
the extent consistent with the articles of incorporation.
(3) ORS 62.462 to 62.482 do not limit a cooperative’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. [1995 c.195 §23]FORMATION OF COOPERATIVES One or more
individuals 18 years of age or older, a domestic or foreign corporation
or cooperative, a partnership or an association may act as incorporators
of a cooperative by delivering articles of incorporation to the Office of
Secretary of State for filing. [1995 c.195 §24] (1) The articles of
incorporation shall set forth:
(a) The name of the cooperative, which satisfies the requirements
of ORS 62.131.
(b) The purposes for which the cooperative is organized. It shall
be sufficient to state, either alone or with other purposes, that the
purpose of the cooperative is to engage in any lawful activity for which
cooperatives may be organized under this chapter, and by such statement,
all lawful activities shall be within the purposes of the cooperative,
except for express limitations, if any.
(c) Whether the cooperative is organized with or without membership
stock, and if organized without membership stock the amount of the
membership fee and whether the membership fee may be changed in
accordance with a procedure established in the bylaws without the
necessity of filing amended or restated articles, and the limitations, if
any, on transfer of a membership.
(d) The number and par value, if any, of shares of each authorized
class of stock, and if more than one class is authorized, the
designation, preferences, limitations and relative rights of each class.
(e) Which classes of stock, if any, are membership stock, and the
limitations upon transfer, if any, applicable to such stock.
(f) Any limitation of the right to acquire or recall any stock.
(g) The basis of distribution of assets in the event of dissolution
or liquidation.
(h) The street address of the cooperative’s initial registered
office and the name of its initial registered agent who shall be amenable
to service of process at the address.
(i) A mailing address to which the Secretary of State may mail
notices as required by this chapter.
(j) The number of directors constituting the initial board of
directors.
(k) The name and address of each incorporator.
(2) Duration shall be perpetual unless the articles of
incorporation expressly limit the period of duration.
(3) It is not necessary to set forth in the articles any of the
corporate powers enumerated in this chapter. The articles may include
additional provisions, not inconsistent with law, for the regulation of
the internal affairs of the cooperative, including any provision that
restricts the transfer of shares or that under this chapter is required
or permitted to be set forth in the bylaws. Any provision required or
permitted in the bylaws has equal force and effect if stated in the
articles. Whenever a provision of the articles is inconsistent with a
bylaw, the articles control.
(4) Without limiting the provisions of subsection (3) of this
section, the articles of incorporation may set forth:
(a) The names of the initial directors;
(b) The addresses of the initial directors;
(c) The names and addresses of the president and secretary;
(d) The federal employer identification number of the cooperative;
(e) Provisions regarding:
(A) Managing the business and regulating the affairs of the
cooperative; and
(B) Defining, limiting and regulating the powers of the
cooperative, its board of directors and members;
(f) A provision eliminating or limiting the personal liability of a
director to the cooperative, its members or its shareholders for monetary
damages for conduct as a director, provided that the provision shall not
eliminate or limit the liability of a director for any act or omission
occurring prior to the date when the provision becomes effective and the
provision shall not eliminate or limit the liability of a director for:
(A) Any breach of the director’s duty of loyalty to the
cooperative, its members or its shareholders;
(B) Acts or omissions that are not in good faith or that involve
intentional misconduct or a knowing violation of law; or
(C) Any transaction from which the director derived an improper
personal benefit; and
(g) Any provision that under this chapter is required or permitted
to be set forth in the bylaws.
(5) The Secretary of State by rule may require additional
identifying information. [1995 c.195 §25] After the issuance of the
certificate of incorporation an organization meeting of the board of
directors named in the articles shall be held, either within or without
this state, at the call of a majority of the incorporators, for the
purpose of adopting bylaws, electing officers and the transaction of such
other business as may come before the meeting. [1957 c.716 §7]AMENDMENT OF ARTICLES (1) A cooperative
may amend its articles from time to time in any and as many respects as
may be desired, so long as its articles as amended contain only such
provisions as might be lawfully contained in original articles at the
time of making the amendment, and, if a change in shares or the rights of
shareholders or members, or an exchange, reclassification or cancellation
of shares or rights of shareholders or members is to be made, such
provisions as may be necessary to effect the change, exchange,
reclassification or cancellation.
(2) Amendments to the articles shall be made in the following
manner:
(a) The board shall adopt a resolution setting forth the proposed
amendment and directing that it be submitted to a vote at a meeting of
the members of the cooperative, which may be either an annual or a
special meeting.
(b) Written or printed notice setting forth the proposed amendment
or a summary of the changes to be effected thereby shall be given to each
member of record within the time and in the manner provided in ORS 62.255
for the giving of notice of meetings of members. If the meeting is an
annual meeting, the proposed amendment or the summary may be included in
the notice of the annual meeting.
(c) At the meeting a vote of the members shall be taken on the
proposed amendment. The proposed amendment is adopted upon receiving the
affirmative vote of a majority of the member votes cast thereon, unless
shareholders are entitled by ORS 62.560 to vote on the proposed
amendment, in which event the proposed amendment is adopted upon
receiving the approval of shareholders as specified in ORS 62.560, as
well as the affirmative vote of a majority of member votes cast thereon.
Any number of amendments may be submitted to the members and voted upon
by them at one meeting. [1957 c.716 §38] (1) If a
proposed amendment to articles would affect a shareholder, such
shareholder, whether or not permitted to vote by the articles, is
entitled to cast one vote on the amendment regardless of the dollar
amount of stock or number of affected classes of stock held by the
shareholder; except that the articles may permit such affected
shareholder to cast one vote for each share of stock the shareholder
holds other than membership stock. A member holding stock affected by a
proposed amendment may vote both as a member and as an affected
shareholder.
(2) If any shareholder is entitled to vote on a proposed amendment,
the meeting at which that proposed amendment is to be voted upon shall be
a joint meeting of members and affected shareholders, and notice of that
meeting together with a copy of the proposed amendment or a summary of
the changes to be effected thereby shall be given to each such
shareholder of record entitled to vote thereon within the time and in the
manner provided in ORS 62.255 for the giving of notice of meetings of
members. The proposed amendment is adopted only if it receives the
affirmative vote of a majority of the votes of the affected shareholders
entitled to vote thereon.
(3) For the purpose of this section, a shareholder is affected as
to any class of stock owned by the shareholder only if an amendment would
expressly:
(a) Decrease the dividends to which that class may be entitled or
change the method by which the dividend rate on that class is fixed.
(b) Restrict rights to transfer that class.
(c) Give to another existing or any new class of stock or equity
interest not previously entitled thereto any preference as to dividends
or upon dissolution which is the same or higher than preferences of that
class.
(d) Change the par value of shares of that class or of any other
class having the same or higher preferences as to dividends or upon
dissolution.
(e) Increase the number of authorized shares of any class having a
higher preference as to dividends or upon dissolution.
(f) Require or permit an exchange of shares of any class with lower
preferences as to dividends or upon dissolution for shares of that class
or any other class with the same or higher preferences. [1957 c.716 §39] (1) Following
adoption of an amendment or amendments to articles as provided in this
chapter, articles of amendment shall set forth:
(a) The name of the cooperative.
(b) The text of each amendment adopted.
(c) The date of the adoption of the amendment by the members.
(d) The numbers of members voting for and against the amendment.
(e) If affected shareholders had the right to vote under ORS
62.560, the number of affected shareholders, the number of shareholder
votes entitled to be voted thereon, and the numbers of such votes cast
for and against the amendment.
(2) No amendment shall affect any existing cause of action in favor
of or against the cooperative, or any pending suit to which the
cooperative is a party, or the existing rights of persons other than
members or affected shareholders; and, if the cooperative’s name is
changed by amendment, no suit brought by or against the cooperative under
its former name shall abate for that reason. [1957 c.716 §40; 1981 c.633
§63; 1985 c.728 §69; 1987 c.94 §85; 1995 c.195 §32] (1) A cooperative by action taken in the
same manner as required for amendment of articles of incorporation may
adopt restated articles of incorporation. The restated articles of
incorporation may contain any changes in the articles of incorporation
that could be made by amendment regularly adopted. Adoption of restated
articles of incorporation containing any such changes shall have the
effect of amending the existing articles of incorporation to conform to
the restated articles, without further action of the board of directors
or shareholders.
(2) Restated articles of incorporation shall contain all the
statements required under this chapter to be included in original
articles of incorporation except that no statement need be made with
respect to:
(a) The number, names and addresses of directors constituting the
initial board of directors;
(b) The names and addresses of the incorporators;
(c) The initial or present registered office or agent; or
(d) The mailing address of the cooperative if an annual report has
been filed with the Office of the Secretary of State.
(3) Restated articles of incorporation when executed and filed in
the manner prescribed in this chapter shall supersede the theretofore
existing articles of incorporation and amendments thereto. The Secretary
of State shall upon request certify a copy of the articles of
incorporation, or the articles of incorporation as restated, or any
amendments to either thereof.
(4) The restated articles of incorporation, when filed, shall be
accompanied by a statement and a true copy of the statement as provided
in this subsection. The statement shall set forth:
(a) The name of the cooperative.
(b) The date of the adoption of the restated articles of
incorporation.
(c) The number of shares outstanding, and if affected shareholders
have the right to vote, the number of affected shares, the number of
shareholder votes entitled to be voted thereon, and, if the shareholders
of any class are entitled to vote thereon as a class, the designation and
number of outstanding shares entitled to vote thereon of each class.
(d) The number of members voting for and against the restated
articles of incorporation, respectively, and, if there are shareholders
entitled to vote, the number of shares voted for and against the restated
articles of incorporation, respectively, and, if the shares of any class
are entitled to vote thereon as a class, the number of shares of each
such class voted for and against the restated articles, respectively.
(e) If the restated articles of incorporation provide for an
exchange, reclassification or cancellation of issued shares, and if the
manner in which the same shall be effected is not set forth in the
restated articles of incorporation, then a statement of the manner in
which the same shall be effected. [1957 c.716 §41; 1963 c.492 §46; 1987
c.94 §86; 1995 c.195 §33]CONVERSIONS AND MERGERS As used in this
section and ORS 62.607 to 62.623:
(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 ORS chapter 60, 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 this chapter, 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.
[1957 c.716 §42; 1995 c.195 §38; 1999 c.362 §18; 2003 c.80 §17b] (1) A business entity other than a cooperative
may be converted to a cooperative organized under this chapter, and a
cooperative 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
cooperative 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 cooperative;
(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 cooperative 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 surviving
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 §20; 2001 c.315 §14; 2003 c.80 §18] (1) A plan of conversion shall
be approved by the business entity as follows:
(a) In the case of a cooperative, in the manner provided in ORS
62.619 (1)(a) for mergers; and
(b) In the case of a business entity other than a cooperative, 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 cooperative, without further action by the members or
shareholders, in accordance with the procedure set forth in the plan of
conversion or, if none is set forth, in the manner determined by the
board of directors.
(b) By another business entity that planned to convert to a
cooperative, 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 §21] (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 62.035 or the date and time determined
pursuant to the statutes governing the business entity that is not a
cooperative. [1999 c.362 §22; 2001 c.315 §8] (1) When a
conversion to or from a cooperative pursuant to ORS 62.607 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
shall be determined:
(A) As to liabilities incurred by the business entity prior to
conversion, according to the status of the owner prior to conversion; and
(B) As to liabilities incurred by the business entity after
conversion, according to the status of the owner 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 under 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, in the case of
business entities other than cooperatives, to the rights provided in the
statutes 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 §23; 2001 c.315 §3] (1) One or more business entities
may merge into a cooperative 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
cooperative 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 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 cooperative 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.
(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 cooperative, any
additional information required for a merger by the statutes governing
that type of business entity.
(3) The plan of merger may set forth:
(a) Amendments to the articles of incorporation of a cooperative,
if the cooperative is the surviving business entity; and
(b) Other provisions relating to the merger. [1999 c.362 §24; 2001
c.315 §15; 2003 c.80 §19] (1) A plan of merger shall be
approved by each business entity that is a party to the merger, as
follows:
(a) In the case of a cooperative, the board shall by resolution
approve the plan and direct that the plan be submitted to a vote at an
annual or a special meeting of members. Written notice shall be given to
each member in the manner provided in this chapter for meetings of
members, and approval of the plan shall be by affirmative vote of a
majority of the member votes cast thereon. The articles may permit
shareholders to vote on approval of the plan, and may fix the proportion
of shareholder votes required for approval. If the articles permit
shareholders to vote on such a plan, written notice shall be given to
each shareholder entitled to vote thereon in the manner and at the time
provided for notice to members.
(b) In the case of a business entity other than a cooperative, as
provided by the statutes governing that business entity.
(2) After a merger is authorized, and at any time before articles
of merger are filed, the planned merger may be abandoned, subject to any
contractual rights:
(a) By the cooperative, without further action by the members or
shareholders, in accordance with the procedure set forth in the plan of
merger or, if none is set forth, in the manner determined by the board of
directors.
(b) By a party to the merger that is not a cooperative, in
accordance with the procedure set forth in the plan of merger or, if none
is set forth, in the manner permitted by the statutes governing that
business entity. [1999 c.362 §25] (1) After a plan of merger is approved
by each business entity that is a party to the merger, the surviving
business entity shall deliver to the office of the Secretary of State,
for filing, articles of merger setting forth:
(a) The plan of merger;
(b) The date of approval of the plan;
(c) A statement that the plan of merger was duly authorized and
approved by each business entity that is a party to the merger in
accordance with ORS 62.619;
(d) As to each cooperative, the numbers of member votes cast for
and against the plan; and
(e) As to each cooperative, if shareholders are authorized to vote
on the plan, the number of shareholder votes entitled to be voted on the
plan, the number of such shareholder votes cast for and against the plan
and the number of such votes required by the articles for approval
thereof.
(2) The merger takes effect on the later of the date and time
determined pursuant to ORS 62.035 or the date and time determined
pursuant to the statutes governing any party to the merger that is a
business entity other than a cooperative. [Formerly 62.615] (1) When a merger involving a cooperative
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 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 cooperative 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 shareholder or
other owner that are to be converted into shares or other 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 a business entity that
is a party to the merger shall be determined:
(A) As to obligations incurred by the business entity prior to
merger, according to the status of the owner prior to merger; and
(B) As to obligations incurred by the business entity after merger,
according to the status of the owner 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 under 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, in the case of owners of
business entities other than cooperatives, 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.
[Formerly 62.620]DISSOLUTION A cooperative
may be dissolved by the act of the cooperative, when authorized in the
following manner:
(1) The board shall adopt a resolution directing that the question
of dissolution be submitted to a vote at a meeting of members, which may
be either an annual or a special meeting.
(2) Written or printed notice shall be given to each member in the
manner provided in ORS 62.255 for the giving of notice of meetings of
members, and whether the meeting be an annual or special meeting, shall
state that the purpose, or one of the purposes, of the meeting is to
consider the advisability of dissolving the cooperative.
(3) At the meeting a vote of members shall be taken on a resolution
to dissolve the cooperative. Adoption of the resolution shall be by
affirmative vote of two-thirds of the member votes cast on that
resolution. The articles may permit shareholders to vote on such a
resolution for dissolution, and may fix the proportion of authorized
shareholder votes required for adoption thereof. [1957 c.716 §49; 1965
c.631 §20] After the adoption of a
resolution to dissolve by the members and, if appropriate, the
shareholders:
(1) The cooperative shall proceed to collect its assets, convey and
dispose of such of its properties as are not to be distributed in kind to
its members or shareholders, pay, satisfy and discharge its liabilities
and obligations and do all other acts required to liquidate its business
and affairs, and, after paying or adequately providing for the payment of
all its obligations, distribute the remainder of its assets either in
cash or in kind, among the persons entitled to the same by law, the
articles and the bylaws.
(2) The cooperative, at any time during the liquidation of its
business and affairs, may make application to a court of competent
jurisdiction within the state and judicial subdivision in which the
registered office or principal place of business of the cooperative is
situated, to have the liquidation continued under the supervision of the
court as provided in this chapter. [1957 c.716 §51; 1965 c.631 §21] A cooperative, at any
time prior to the time the Secretary of State has filed the articles of
dissolution, may revoke voluntary dissolution proceedings theretofore
taken, by adoption of a resolution of revocation in the same manner and
by the same required vote of members and shareholders as are required by
this chapter for adoption of a resolution to dissolve. [1957 c.716 §52;
1965 c.631 §22; 1985 c.728 §71]
Upon the revocation of voluntary dissolution proceedings the cooperative
may again carry on its business. [1957 c.716 §53; 1965 c.631 §23] (1) If voluntary dissolution
proceedings have not been revoked, articles of dissolution may be filed
when all debts, liabilities and obligations of the cooperative have been
paid and discharged or adequate provision has been made therefor, or all
of the assets of the cooperative have been distributed to its creditors
for application to the outstanding debts, obligations and liabilities of
the cooperative to the fullest extent possible, and all of the remaining
property and assets of the cooperative, if any, have been distributed to
the persons entitled thereto. Articles of dissolution shall set forth:
(a) The name of the cooperative.
(b) The date dissolution was authorized.
(c) The number of member votes for and against the resolution.
(d) If shareholders were authorized to vote on the resolution, the
total number of authorized shareholder votes, the numbers of such votes
cast for and against the resolution and the number of such votes required
by the articles for adoption thereof.
(2) A cooperative is dissolved upon the effective date of its
articles of dissolution. [1957 c.716 §54; 1965 c.631 §24; 1981 c.633 §65;
1985 c.728 §72; 1987 c.94 §90; 1995 c.195 §34] When the Secretary
of State has filed the articles of dissolution, the existence of the
cooperative shall cease, except for the purpose of suits, other
proceedings and appropriate corporate action by members, shareholders,
directors and officers as provided in this chapter. [1957 c.716 §55; 1981
c.633 §66; 1985 c.728 §73; 1987 c.94 §91]The provisions of ORS 60.647 to
60.657, relating to dissolution by the Secretary of State, apply to
cooperatives. [1957 c.716 §56; 1987 c.94 §92](1) In addition to any other
instances in which the law provides such power, a circuit court has full
power to dissolve a cooperative and liquidate the assets and business
thereof:
(a) In an action by a member or shareholder when it is established
that:
(A) The members are deadlocked in voting power, and have failed,
for a period which includes at least two consecutive annual meeting
dates, to elect successors to directors whose terms have expired or would
have expired upon the election of their successors; or
(B) The corporate assets are being misapplied or wasted.
(b) In an action by a creditor:
(A) When the claim of the creditor has been reduced to judgment and
an execution thereon returned unsatisfied and it is established that the
cooperative is insolvent; or
(B) When the cooperative has admitted in writing that the claim of
the creditor is due and owing and it is established that the cooperative
is insolvent.
(c) Upon application by a cooperative which has commenced voluntary
dissolution proceedings as provided in this chapter, to have its
liquidation continued under the supervision of the court.
(d) When an action has been filed by the Attorney General to
dissolve a cooperative and it is established that liquidation of its
business and affairs should precede the entry of a judgment of
dissolution.
(2) 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 this section 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.
(3) It is not necessary to make members or shareholders parties to
any action or proceeding under this section unless relief is sought
against them personally.
(4) A court in a proceeding brought to dissolve a cooperative 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 assets of the cooperative wherever located and carry on the
business of the cooperative until a full hearing can be held. [1957 c.716
§57; 1965 c.631 §25; 1987 c.94 §93; 2003 c.576 §325] (1) A
court in a judicial proceeding brought to dissolve a cooperative may
appoint one or more receivers to wind up and liquidate the business and
affairs of the cooperative or one or more custodians to manage the
business and affairs of the cooperative. 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 cooperative 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 cooperative 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 cooperative in all courts of this state.
(b) The custodian may exercise all of the powers of the
cooperative, through or in place of its board of directors or, creditors
and any holders of other equity interest in the cooperative officers, to
the extent necessary to manage the affairs of the cooperative in the best
interests of its members, shareholders, creditors and any holders of
other equity interest in the cooperative.
(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 cooperative, its
members, shareholders, creditors and any holders of other equity interest
in the cooperative.
(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 cooperative or proceeds from the sale of
the assets. [1995 c.195 §26] (1) If after a
hearing the court determines that one or more grounds for judicial
dissolution described in ORS 62.695 exist, it may enter a judgment
dissolving the cooperative 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 cooperative’s business and
affairs in accordance with ORS 62.708 and the notification of claimants
in accordance with ORS 62.712 and 62.714. [1995 c.195 §27; 2003 c.576
§326] (1) A dissolved cooperative 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 members or shareholders;
(c) Discharging or making provision for discharging its liabilities;
(d) Distributing its remaining property among its members or
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 cooperative does not:
(a) Transfer title to the cooperative’s property;
(b) Prevent transfer of its shares, indebtedness or other equity
interest, although the authorization to dissolve may provide for closing
the cooperative’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, members 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
cooperative in its corporate name;
(f) Abate or suspend a proceeding pending by or against the
cooperative on the effective date of dissolution; or
(g) Terminate the authority of the registered agent of the
cooperative. [1995 c.195 §28]
(1) A dissolved cooperative may dispose of the known claims against it by
following the procedure described in this section.
(2) The dissolved cooperative 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
cooperative 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 cooperative 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 cooperative
by the deadline; or
(b) If a claimant whose claim was rejected by the dissolved
cooperative 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. [1995 c.195 §29](1) A dissolved cooperative may also publish notice of its
dissolution and request that persons with claims against the cooperative
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 cooperative’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 cooperative 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 cooperative 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 cooperative within five years
after the publication date of the newspaper notice:
(a) A claimant who did not receive written notice under ORS 62.712;
(b) A claimant whose claim was sent in a timely manner to the
dissolved cooperative but not acted on; or
(c) A claimant whose claim is contingent or based on an event
occurring after the effective date of dissolution. [1995 c.195 §30](1) All intangible personal property
distributable in the course of a voluntary or involuntary dissolution of
a cooperative that is unclaimed by the owner within two years after the
date for final distribution is presumed abandoned. Such property shall be
subject to the provisions of ORS 98.302 to 98.436 and 98.992, except that
with respect to agricultural cooperatives, the report of unclaimed
property shall be filed with the Department of State Lands as set forth
in ORS 98.352. A copy of the report shall also be filed with the State
Board of Higher Education.
(2) All unclaimed property specified in the report required by ORS
98.352 shall be delivered within the time specified in ORS 98.362 to the
Department of State Lands which shall assume custody and shall be
responsible for the safekeeping thereof. The department shall reconcile
the report to the delivered funds, deduct the costs as provided for in
subsection (3) of this section, and forward the funds to the State Board
of Higher Education within 14 working days of receipt of the funds. Any
person who pays or delivers unclaimed property to the Department of State
Lands under this section is relieved of all liability to the extent of
the value of the property so paid or delivered for any claim which then
exists or which thereafter may arise or be made in respect to the
property.
(3) All funds received under this section shall be used for the
benefit of Oregon State University in such programs related to
agricultural research as the university may determine except for:
(a) The payment of claims which may be made pursuant to this
section; and
(b) The payment of expenses of mailing and publication in
connection with any unclaimed property, reasonable service charges and
expenses of the Department of State Lands in connection with claims made
pursuant to ORS 98.392 to 98.402.
(4) The provisions of ORS 98.392 to 98.402 are applicable to claims
against unclaimed property delivered to the State Board of Higher
Education pursuant to this section. The State Board of Higher Education
shall pay such claims from funds delivered to it pursuant to this section
within 30 days of receipt of a verified copy of a finding and decision of
the Department of State Lands made pursuant to ORS 98.396 or a certified
copy of a judgment made pursuant to ORS 98.402.
(5) As used in this section, an agricultural cooperative is any
cooperative in which farmers act together in producing, processing,
preparing for market, handling or marketing the agricultural products of
such farmers, and any cooperative in which farmers act together in
purchasing, testing, grading, processing, distributing and furnishing
farm supplies or farm business services.
(6) The provisions of this section are applicable with respect to
the voluntary or involuntary dissolution of any cooperative, which
dissolution commenced on or after January 1, 1970. [1974 c.2 §§1,2,3;
1985 c.565 §7; 1987 c.94 §127; 1993 c.694 §35; 1995 c.79 §16]Note: 62.720 was enacted into law by the Legislative Assembly, but
was not added to or made a part of ORS chapter 62 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.FOREIGN COOPERATIVES A foreign cooperative
which has a member or members residing in this state, and which
distributes its proceeds and savings according to either this chapter or
the law of the state where incorporated, is entitled to all rights,
exemptions and privileges of a cooperative organized under this chapter,
if it is authorized to do business in this state under ORS chapter 60. A
foreign cooperative may be authorized under ORS chapter 60 to transact
business in this state whether or not formed for profit and whether or
not formed with stock. [1957 c.716 §61; 1987 c.94 §96] Any foreign
cooperative may register its corporate name under ORS 60.101. [1957 c.716
§70; 1987 c.94 §97]EMPLOYEE COOPERATIVESAn employee cooperative may revoke its election under ORS
62.765 to 62.792 by a vote of two-thirds of the members and through
amendment to its articles of incorporation filed in accordance with this
chapter. [1987 c.677 §14](1) The articles of incorporation or the bylaws shall establish
qualifications and the method of acceptance and termination of members.
No person may be accepted as a member unless employed by the employee
cooperative on a full-time or part-time basis.
(2) An employee cooperative shall issue a class of voting shares
designated as membership shares. Each member shall own only one such
membership share and only members may own such shares.
(3) Membership shares shall be issued for a fee as shall be
determined from time to time by the directors. The redemption price of
membership shares is determined by reference to internal capital accounts
as described in ORS 62.783.
(4) Members of an employee cooperative shall have all the rights
and responsibilities of shareholders of a corporation organized under
this chapter, except as otherwise provided in ORS 62.765 to 62.792. [1987
c.677 §16; 1989 c.171 §8] (1) No capital shares other than
membership shares shall be given voting power in an employee cooperative,
except as otherwise provided in ORS 62.765 to 62.792 or in the articles
of incorporation.
(2) The power to amend or repeal bylaws of an employee cooperative
shall be in the members only, except to the extent that directors are
authorized to amend or repeal the bylaws.
(3) Voting on amendments to the articles of incorporation of an
employee cooperative shall be limited to the members, except that
amendments adversely affecting the rights of shareholders may not be
adopted without the vote of such shareholders. [1987 c.677 §17] (1)(a) The net
earnings or losses of an employee cooperative shall be apportioned and
distributed at such times and in such manner as the articles of
incorporation or bylaws shall specify. Net earnings declared as patronage
allocations with respect to a period of time, and paid or credited to
members, shall be apportioned among the members in accordance with the
ratio which each member’s patronage during the period involved bears to
total patronage by all members during that period.
(b) As used in this subsection, “patronage” means the amount of
work performed as a member of an employee cooperative, measured in
accordance with the articles of incorporation and bylaws.
(2) The apportionment, distribution and payment of net earnings
required by subsection (1) of this section may be in cash, credits,
written notices of allocation or capital shares issued by the employee
cooperative. [1987 c.677 §18](1)(a) Any employee cooperative may establish through
its articles of incorporation or bylaws a system of internal capital
accounts, to reflect the book value and to determine the redemption price
of membership shares, capital shares and written notices of allocation.
(b) As used in this subsection, “written notice of allocation”
means a written instrument which discloses to a member the stated dollar
amount of such member’s patronage allocation and the terms for payment of
that amount by the employee cooperative.
(2) The articles of incorporation or bylaws of an employee
cooperative may permit the periodic redemption of written notices of
allocation and capital shares, and must provide for recall and redemption
of the membership share upon termination of membership in the
cooperative. No redemption shall be made if such redemption would result
in the liability of any director or officer of the employee cooperative.
(3) The articles of incorporation or bylaws may provide for the
employee cooperative to pay or credit interest on the balance in each
member’s internal capital account.
(4) The articles of incorporation or bylaws may authorize
assignment of a portion of retained net earnings and net losses to a
collective reserve account. Earnings assigned to the collective reserve
account may be used for any and all corporate purposes as determined by
the board of directors. [1987 c.677 §19] (1) An internal
capital account cooperative is an employee cooperative whose entire net
book value is reflected in internal capital accounts, one for each
member, and a collective reserve account, and in which no persons other
than members own capital shares. In an internal capital account
cooperative, each member shall have one and only one vote in any matter
requiring voting by shareholders.
(2) An internal capital account cooperative shall credit the
paid-in membership fee and additional paid-in capital of a member to the
member’s internal capital account, and shall also record the
apportionment of retained net earnings or net losses to the members in
accordance with patronage by appropriately crediting or debiting the
internal capital accounts of members. The collective reserve account in
an internal capital account cooperative shall reflect any paid-in
capital, net losses and retained net earnings not allocated to individual
members.
(3) In an internal capital account cooperative, the balances in all
the individual internal capital accounts and collective reserve account,
if any, shall be adjusted at the end of each accounting period so that
the sum of the balances is equal to the net book value of the employee
cooperative. [1987 c.677 §20] (1)
When any employee cooperative revokes its election in accordance with ORS
62.771, the amendment to the articles of incorporation shall provide for
conversion of membership shares and internal capital accounts or their
conversion to securities or other property in a manner consistent with
this chapter.
(2) An employee cooperative which has not revoked its election
under ORS 62.765 to 62.792 may not merge with another corporation other
than an employee cooperative. Two or more employee cooperatives may merge
in accordance with this chapter. [1987 c.677 §21; 1995 c.195 §43]ORS 62.765 to 62.792 shall be known and may be
cited as the “Employee Cooperative Corporations Act.” [1987 c.677 §11]MISCELLANEOUS PROVISIONS The Secretary of State has the
power and authority reasonably necessary to enable the Secretary of State
to administer this chapter efficiently and to perform the duties imposed
upon the Secretary of State by this chapter. [1957 c.716 §65](1) It is the public policy of the State of Oregon to
encourage the efficient production and distribution of agricultural,
seafood and other products derived from natural resources or labor
resources of this state. Accordingly, a cooperative that operates in
compliance with the provisions of this chapter and that does not during
its fiscal year market products for nonmember patrons in an amount
greater in value than the products marketed for its members may not be
deemed to be a conspiracy or combination in restraint of trade, or an
illegal monopoly; nor shall the contracts of such cooperative authorized
by this chapter, whether or not required by the cooperative as a
condition of membership or of doing business with the cooperative, be
construed as an unlawful restraint of trade, or as part of a conspiracy
or combination to accomplish an improper or illegal purpose or act.
(2) A negotiating committee of dealers, as defined in ORS 646.515
(3), that operates in compliance with the provisions of ORS 62.848 or
62.849 may not be deemed to be engaged in unlawful restraint of trade or
to be participants in a conspiracy or combination to accomplish an
improper or illegal purpose or act when the negotiating committee
negotiates with a cooperative:
(a) The price for which the members of the cooperative will sell
agricultural products to be produced by the members;
(b) The season starting price for which the members of the
cooperative will sell seafood to be harvested by the members;
(c) The price to be paid for the services of producing agricultural
products by the members or under the control of the members; or
(d) The season starting price for the services of harvesting
seafood products by the members or under control of the members. [1957
c.716 §35; 2001 c.142 §2; 2003 c.487 §1](1)
As used in this section:
(a) “Parties” or “party” means seed producers, seed associations,
seed cooperatives or seed dealers that participate in a state regulatory
program described in subsection (2) of this section.
(b) “Regulatory program” means a state regulatory program described
in subsection (2) of this section that is actively supervised by the
Director of Agriculture and that authorizes parties to engage in certain
collective bargaining and negotiations to establish the price of
perennial ryegrass seed to be produced and sold to perennial ryegrass
seed dealers in the future, annual ryegrass seed to be produced and sold
to annual ryegrass seed dealers in the future or tall fescue seed to be
produced and sold to tall fescue seed dealers in the future.
(2)(a) It is the intent of this section and ORS 646.535 (2) and
646.740 (10) to displace competition with regulatory programs in the
perennial ryegrass seed, annual ryegrass seed and tall fescue seed
industries to a limited degree. The regulatory programs are intended to
grant immunity from federal and state antitrust laws to perennial
ryegrass seed, annual ryegrass seed and tall fescue seed producers and
perennial ryegrass seed, annual ryegrass seed and tall fescue seed
dealers for the limited purpose of allowing the producers and the dealers
to bargain collectively and to arrive at a negotiated price for the sale
of seed by the producers to the dealers. The activities of any party that
comply with the provisions of this section may not be considered to be in
restraint of trade, a conspiracy or combination or any other unlawful
activity in violation of any provision of ORS 646.705 to 646.826 or
federal antitrust laws.
(b) A seed cooperative or seed association for perennial ryegrass
seed, annual ryegrass seed or tall fescue seed may negotiate with one or
more dealers, as defined in ORS 646.515, of perennial ryegrass seed,
annual ryegrass seed or tall fescue seed to establish the price at which
members of the cooperative or association will sell perennial ryegrass
seed, annual ryegrass seed or tall fescue seed to be produced by its
members or under the control of its members. The seed dealers may
negotiate the price of the seed through a committee that sets forth the
views of the dealers and votes on any issues being negotiated as
authorized by this section, including the price of the seed.
(c) The Director of Agriculture is authorized to actively supervise
the conduct of perennial ryegrass seed, annual ryegrass seed and tall
fescue seed agricultural cooperatives organized under this chapter,
representative committees of perennial ryegrass seed, annual ryegrass
seed or tall fescue seed dealers and any perennial ryegrass seed, annual
ryegrass seed or tall fescue seed associations in establishing the price
of perennial ryegrass seed, annual ryegrass seed or tall fescue seed to
be produced and sold to seed dealers at a future date. The director is
authorized to supervise the negotiations between the parties, review the
prices established by the negotiations and approve the prices proposed by
the parties before the prices take effect. The director must approve the
proposed prices and any adjustments to previously approved prices before
the prices may be implemented.
(d) The director may compel the parties to take whatever action the
director considers necessary to:
(A) Ensure that the parties are engaging in conduct that is
authorized under this section;
(B) Ensure that the policies of this state are being fulfilled
under the regulatory programs; and
(C) Enjoin conduct by any of the parties that is not authorized by
the director or conduct that the director finds does not advance the
interests of this state in carrying out the regulatory programs.
(e) The Director of Agriculture may adopt rules to carry out the
director’s authority under this section.
(f) The director may designate persons as the director deems
necessary to carry out the responsibility of actively supervising the
conduct of the parties, including serving as intermediaries between
prospective parties. Persons designated by the director must be employees
of the State Department of Agriculture.
(g) The director by rule shall set and collect fees from the
parties who are participants in regulatory programs. The fees shall be
deposited in the Department of Agriculture Account established under ORS
561.150.
(h) The director shall supervise the labeling of perennial ryegrass
seeds, annual ryegrass seeds and tall fescue seeds to ensure compliance
with ORS 633.520, 633.531 and 633.541. [2001 c.142 §4; 2005 c.290 §1](1) As used in this section:
(a) “Dealer” has the meaning given that term in ORS 646.515.
(b) “Parties” or “party” means Oregon seafood harvesters, Oregon
seafood harvester associations, Oregon seafood harvester cooperatives or
dealers that are participants in the state regulatory program described
in subsection (2) of this section.
(c) “Regulatory program” means the state regulatory program
described in subsection (2) of this section that is actively supervised
by the Director of Agriculture and that authorizes parties to engage in
certain collective bargaining and negotiations to establish the price of
Oregon seafood to be harvested and sold to dealers in the future.
(d) “Season starting price” means the price at which the parties
agree to sell Oregon seafood and at which the parties agree to pay for
Oregon seafood at the onset of a seafood harvesting season and for as
long a period as the parties to the negotiations determine.
(2)(a) It is the intent of this section and ORS 646.535 (2) and
646.740 (11) to displace competition with a regulatory program in the
Oregon seafood harvesting industry to a limited degree. The regulatory
program is intended to grant immunity from federal and state antitrust
laws to Oregon seafood harvesters and dealers for the limited purpose of
allowing the harvesters and the dealers to bargain collectively and to
arrive at a negotiated season starting price for the sale of Oregon
seafood by the harvesters to the dealers. The activities of any party
that comply with the provisions of this section may not be considered to
be in restraint of trade, a conspiracy or combination or any other
unlawful activity in violation of any provision of ORS 646.705 to 646.826
or federal antitrust laws.
(b) An Oregon seafood harvester cooperative or Oregon seafood
harvester association may negotiate with one or more dealers to establish
the season starting price at which members of the cooperative or
association will sell Oregon seafood to be harvested by its members or
under the control of its members. The dealers may negotiate the season
starting price of Oregon seafood through a committee that sets forth the
views of the dealers and votes on any issues being negotiated as
authorized by this section, including the season starting price of Oregon
seafood. Participation by a dealer in season starting price negotiations
is voluntary.
(c) If the dealers negotiate the season starting price through a
committee under paragraph (b) of this subsection, nonparticipating
dealers are not bound by the acts of the committee.
(d) Any agreements that arise from negotiations conducted under
this section are binding only on the parties that participate in the
negotiations and agree to be bound.
(e) The Director of Agriculture is authorized to actively supervise
the conduct of an Oregon seafood harvester cooperative organized under
this chapter, a representative committee of dealers and any Oregon
seafood harvester association in establishing the season starting price
of Oregon seafood to be harvested and sold to dealers at a future date.
The director is authorized to supervise the negotiations between the
parties, review the season starting prices established by the
negotiations and approve the season starting prices proposed by the
parties before the season starting prices take effect. The director must
approve the proposed season starting prices and any adjustments to
previously approved season starting prices before the season starting
prices may be implemented.
(f) The director may compel the parties to take whatever action the
director considers necessary to:
(A) Ensure that the parties are engaging in conduct that is
authorized under this section;
(B) Ensure that the policies of this state are being fulfilled
under the regulatory program; and
(C) Enjoin conduct by any of the parties that is not authorized by
the director or conduct that the director finds does not advance the
interests of this state in carrying out the regulatory program.
(g) The director may adopt rules to carry out the director’s
authority under this section.
(h) The director may designate persons as the director deems
necessary to carry out the responsibility of actively supervising the
conduct of the parties, including serving as intermediaries between
prospective parties. Persons designated by the director must be employees
of the State Department of Agriculture.
(i) The director by rule shall set and collect fees from the
parties who are participants in a regulatory program. The fees shall be
deposited in the Department of Agriculture Account established under ORS
561.150. [2003 c.487 §3]” (1) No person other than a
cooperative incorporated under this chapter or a previous Act of this
state shall use the term “cooperative,” or any variation thereof, as part
of its corporate or other business name or title.
(2) Any violation of this section may be enjoined upon suit by any
cooperative, without a showing of any damage to itself. [1957 c.716 §71;
1981 c.542 §12] The provisions of this chapter apply
to the fullest extent permitted by the laws and Constitution of the
United States and of the State of Oregon, to all existing cooperative
associations incorporated under any previously existing Act of this state
relating to incorporation of cooperative associations. [1957 c.716 §73]The Oregon Cooperative Corporation Act may be amended,
repealed or modified, but such amendment, repeal or modification shall
not affect any vested rights or take away or impair any remedy for any
The repeal (by section
76, chapter 716, Oregon Laws 1957) of the sections compiled in the 1953
part for ORS chapter 62 does not affect any right accrued or established,
or any liability or penalty incurred, under the provisions of those
sections prior to their repeal. [1957 c.716 §75]An agricultural cooperative
organized and operating under ORS chapter 62 must send a notice to all
members of the cooperative annually. The cooperative shall send a member
the notice in February or with the member’s contract. The notice shall
state that members may not file an agricultural produce lien under ORS
87.228 and 87.700 to 87.736 against the cooperative. Failure by a
cooperative to send the notice does not give a member lien rights against
the cooperative. [2001 c.301 §4]Note: 62.870 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 62 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.
