68th OREGON LEGISLATIVE ASSEMBLY--1995 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 953
A-Engrossed
Senate Bill 62
Ordered by the Senate February 1
Including Senate Amendments dated February 1
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Judiciary
Committee for Business Law Section, Oregon State Bar)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Revises cooperative corporation laws. { + Requires that
cooperative give written notice to members before next membership
meeting if cooperative indemnifies or advances expenses to
director. Makes technical changes for consistency. + }
A BILL FOR AN ACT
Relating to cooperative corporations; creating new provisions;
amending ORS 62.015, 62.030, 62.035, 62.065, 62.145, 62.205,
62.215, 62.225, 62.245, 62.280, 62.283, 62.305, 62.415, 62.425,
62.440, 62.565, 62.570, 62.605, 62.610, 62.615, 62.620, 62.625,
62.680, 62.789 and 543.660; and repealing ORS 62.460, 62.465,
62.470, 62.475, 62.480, 62.510, 62.700 and 62.710.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 62.015 is amended to read:
62.015. { - (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. + }
{ - (a) - } { + (2) + } 'Articles' means articles of
incorporation.
{ - (b) - } { + (3) + } 'Board' means board of directors.
{ - (c) - } { + (4) + } 'Cooperative' means a cooperative
corporation which is subject to the provisions of this chapter.
{ - (d) - } { + (5) + } 'Corporation' means a corporation
which is not a cooperative.
{ - (e) - } { + (6) + } 'Foreign cooperative' means a
cooperative corporation organized under laws other than the laws
of this state.
{ - (f) - } { + (7) + } 'Member' means a person who has
been qualified and accepted for membership in a cooperative.
{ - (g) - } { + (8) + } 'Membership stock' means any class
of stock, continuous ownership of which is required for
membership in a cooperative.
{ - (h) - } { + (9) + } 'Person' includes individuals,
corporations, associations, firms, partnerships, joint stock
companies, trusts { + , + }
{ - and - } estates { + and foreign and domestic cooperative
corporations + }.
{ - (i) - } { + (10) + } 'Shareholder' means a holder of
shares of capital stock of a cooperative other than membership
stock.
{ - (j) '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) As used in ORS 62.245, 62.415, 62.425 and 62.700, '
security' or 'securities' means any indebtedness, capital stock
or other equity interest in a cooperative's assets. - }
SECTION 2. ORS 62.145 is amended to read:
62.145. (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
section 25 (1)(c) of this 1995 Act may be changed without filing
amended or restated articles. + } { - ; except that - } 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.
SECTION 3. ORS 62.205 is amended to read:
62.205. { + (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 + } { - , or
unless - }
{ + (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. + }
SECTION 4. ORS 62.215 is amended to read:
62.215. 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.
SECTION 5. ORS 62.225 is amended to read:
62.225. A cooperative organized with capital stock may pay
{ - such - } { + a + } dividend upon capital stock as is
authorized by its articles { + . + } { - if its capital is not
impaired and would not be impaired by such payment - } { + 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 + }.
SECTION 6. ORS 62.245 is amended to read:
62.245. (1) When a certificate { + of membership in a
cooperative or a certificate + } for a { - security - }
{ + 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
{ - certificate - } { + 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 { - securities - }
{ + 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 { - or if
records upon which the apportionment of securities is based are
missing, and in either case - } { + and + } if the information
which is missing is necessary to a proposed redemption of
{ - the securities - } { + any of the items described in this
subsection + }, the cooperative may give notice and redeem
{ - such securities - } { + the items + } as follows:
(a) The cooperative shall set aside an amount equal to the
value of the { - securities - } { + items + } to be redeemed.
(b) The cooperative shall give notice of the redemption to all
owners of { - such securities - } { + items + } of which the
cooperative has knowledge.
(c) If there are { - securities - } { + 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 { - such - } { + the + }
publication, any unclaimed outstanding { - securities - }
{ + 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.
SECTION 7. ORS 62.280 is amended to read:
62.280. (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.
SECTION 8. ORS 62.283 is amended to read:
62.283. { - (1) A director shall perform in good faith the
duties of a director under this chapter, including the duties as
a member of any committee of the board upon which the director
may serve, in a manner the director reasonably believes to be in
the best interests of the cooperative and with the care an
ordinarily prudent person in a like position would use under
similar circumstances. A person who performs the duties of a
director as provided in this section shall not be liable to the
cooperative on the basis of being or having been a director. - }
{ - (2) In performing the duties of a director, a director
may rely on information, opinions, reports or statements,
including financial statements and other financial data, 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 matter presented; - }
{ - (b) Counsel, public accountants or other persons as to
matters which the director believes are within the person's
professional or expert competence; or - }
{ - (c) A committee of the board created under the articles
of incorporation or bylaws and upon which the director does not
serve. - }
{ - (3) A director may rely on a committee under subsection
(2) of this section only as to matters within the committee's
designated authority. The director must reasonably believe that
the committee merits confidence. The director does not act in
good faith under this subsection if the director has knowledge
concerning the matter in question that would cause the director's
reliance to be unwarranted. - }
{ + (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. + }
SECTION 9. { + (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. + }
SECTION 10. { + (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. + }
SECTION 11. ORS 62.305 is amended to read:
62.305. 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, { - or - } 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. + }
SECTION 12. ORS 62.415 is amended to read:
62.415. (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 { - other securities or
certificates - } { + 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
which 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.
(5) 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.
SECTION 13. ORS 62.425 is amended to read:
62.425. (1) Any distribution of net margins by a cooperative or
any redemption of or payment based upon any { - security, - }
{ + 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.
SECTION 14. ORS 62.440 is amended to read:
62.440. (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, if the member
or shareholder prevails in the action or proceeding, there shall
be taxed and allowed to such member or shareholder, at trial and
on appeal, a reasonable amount to be fixed by the court as
attorney fees for the prosecution of the action or proceeding.
SECTION 15. { + As used in sections 15 to 23 of this 1995 Act:
(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. + }
SECTION 16. { + (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 section 17, 18 or 19 of this 1995
Act 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. + }
SECTION 17. { + 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. + }
SECTION 18. { + (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 section 16 of this
1995 Act; 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. + }
SECTION 19. { + 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
section 17 of this 1995 Act, 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 section 16 of this 1995 Act or was adjudged liable as
described in section 16 (4) of this 1995 Act, whether the
liability is based on a judgment, settlement or proposed
settlement or otherwise. + }
SECTION 20. { + (1) A cooperative may not indemnify a director
under section 16 of this 1995 Act 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 section 16 of this 1995 Act.
(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. + }
SECTION 21. { + Unless a cooperative's articles of
incorporation provide otherwise:
(1) An officer of the cooperative is entitled to mandatory
indemnification under section 17 of this 1995 Act, and is
entitled to apply for court-ordered indemnification under section
19 of this 1995 Act, in each case to the same extent as a
director under section 17 or 19 of this 1995 Act.
(2) The cooperative may indemnify and advance expenses under
sections 15 to 23 of this 1995 Act to an officer, employee or
agent of the cooperative to the same extent as to a director. + }
SECTION 22. { + 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 section 16 or 17 of this 1995 Act. + }
SECTION 23. { + (1) The indemnification and provisions for
advancement of expenses provided by sections 15 to 23 of this
1995 Act 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 section 25
(4)(f) of this 1995 Act; 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
section 20 of this 1995 Act.
(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) Sections 15 to 23 of this 1995 Act 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. + }
SECTION 24. { + 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. + }
SECTION 25. { + (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. + }
SECTION 26. { + (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. + }
SECTION 27. { + (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 decree dissolving the
cooperative and specifying the effective date of the dissolution.
The clerk of the court shall deliver a certified copy of the
decree to the office for filing. The Secretary of State shall
file the certified copy of the decree.
(2) After entering the decree of dissolution, the court shall
direct the winding up and liquidation of the cooperative's
business and affairs in accordance with section 28 of this 1995
Act and the notification of claimants in accordance with sections
29 and 30 of this 1995 Act. + }
SECTION 28. { + (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. + }
SECTION 29. { + (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. + }
SECTION 30. { + (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 section
29 of this 1995 Act;
(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. + }
SECTION 31. { + (1) If authorized by the bylaws, a cooperative
may pay the following persons up to $250 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
$250 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 $250.
(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. + }
SECTION 32. ORS 62.565 is amended to read:
62.565. (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) { - If an amendment changes any provision of the original
or amended articles, an identification by reference or
description of the affected provision and a statement of its text
as it is amended to read. If an amendment strikes or deletes any
provision of the original or amended articles, an identification
by reference or description of the provision so stricken or
deleted and a statement that it is stricken or deleted. If the
amendment is an addition to the original or amended articles, a
statement of that fact and the full text of each provision
added. - } { + 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.
SECTION 33. ORS 62.570 is amended to read:
62.570. (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
{ - of incorporation - } , without further action of the board
of directors or shareholders. { - Restated articles of
incorporation shall contain a statement that they supersede the
theretofore existing articles of incorporation and amendments
thereto. - }
{ + (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 { + ; + }
{ - or - }
{ + (b) + } The names and addresses of the
incorporators { + ; + } { - or - }
{ + (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 + }.
{ - (2) - } { + (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.
{ - (3) - } { + (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.
SECTION 34. ORS 62.680 is amended to read:
62.680. { + (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:
{ - (1) - } { + (a) + } The name of the cooperative.
{ - (2) That all the property and assets of the cooperative
remaining after payment or discharge, or adequate provision
therefor, of all debts, obligations and liabilities of the
cooperative have been distributed to the persons entitled thereto
in accordance with their respective rights and interests, or that
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. - }
{ + (b) The date dissolution was authorized. + }
{ - (3) That there are no suits pending against the
cooperative in any court, or that adequate provision has been
made for the satisfaction of any judgment, order or decree which
may be entered against it in any pending suit. - }
{ - (4) The names and respective addresses of its
officers. - }
{ - (5) The names and respective addresses of its
directors. - }
{ - (6) A copy of the resolution adopted authorizing the
dissolution of the cooperative and a statement of the date of its
adoption. - }
{ - (7) - } { + (c) + } The number of member votes for and
against the resolution.
{ - (8) - } { + (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. + }
SECTION 35. ORS 62.030 is amended to read:
62.030. (1) The Secretary of State shall collect the following
fees for the documents delivered for filing:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Document Fee
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
(a)Articles of incorporat$40
(b)Application for reserved
name $10
(c)Application of a cooperative
for reinstatement following
administrative dissolu$30n
(d)Annual report of a coo$20ative
(e)Application for certificate of
existence $10
(f)Dissolutions $10
(g)Change of registered agent
or office $10
(h)Registered agent resig$10ion
(i)Correction of annual
report { +
/articles + }
$ 10
(j)Amendments $10
(k)Restated articles of
incorporation $10
(L)Merger { -
or consolidation - }
$ 10
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(2) The Secretary of State shall collect a fee of $20 each time
process is served on the Secretary of State under this chapter.
(3) The Secretary of State by rule may establish fees, in
addition to those provided for in subsections (1) and (2) of this
section, for:
(a) Copying any public record maintained by the Office of
Secretary of State and relating to a cooperative, and for
certifying the copy.
(b) Certifying to facts of record, other than a certificate of
existence, pursuant to ORS 62.065.
SECTION 36. ORS 62.035 is amended to read:
62.035. (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.
SECTION 37. ORS 62.065 is amended to read:
62.065. (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. + }
SECTION 38. ORS 62.605 is amended to read:
62.605. As used in ORS 62.610 to 62.635 { + , + } { - : - }
{ - (1) 'New cooperative' means the new cooperative provided
for in the plan of consolidation. - }
{ - (2) - } 'surviving cooperative' means the cooperative
designated in the plan of merger as the surviving cooperative.
SECTION 39. ORS 62.610 is amended to read:
62.610. (1) Any two or more cooperatives may merge { - or
consolidate - } pursuant to a plan of merger { - or
consolidation - } adopted in the manner provided in this section.
(2) The board of each cooperative shall, by resolution adopted
by each such board, approve a plan of merger { - or
consolidation - } setting forth:
(a) The names of the cooperatives proposing to merge { - or
consolidate, - } and the name of the cooperative into which they
propose to merge { - or the name of the new cooperative into
which they propose to consolidate - } .
(b) The terms and conditions of the proposed merger { - or
consolidation - } .
(c) The effect of the proposed merger { - or
consolidation - } on all members and shareholders of each of the
cooperatives.
{ - (d) In the case of a plan for consolidation, the articles
of the new cooperative, which shall include all of the statements
required to be set forth in articles for cooperatives organized
under this chapter. - }
{ - (e) - } { + (d) + } Such other provisions with respect
to the proposed merger { - or consolidation - } as are
considered necessary or desirable.
(3) The board of each cooperative, upon approving the plan of
merger { - or plan of consolidation - } , shall by resolution
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 adoption 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 adoption of the plan, and may fix
the proportion of shareholder votes required for adoption
thereof. 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.
(4) After adoption of the plan, and at any time prior to the
filing of the articles of merger { - or consolidation - } , the
merger
{ - or consolidation - } may be abandoned pursuant to
provisions therefor, if any, set forth in the plan of merger
{ - or consolidation - } .
SECTION 40. ORS 62.615 is amended to read:
62.615. Upon adoption of the plan of merger { - or
consolidation - } , { + the + } articles of merger { - or
articles of consolidation, as the case may be, - } shall set
forth:
(1) The plan of merger { - or plan of consolidation - } .
(2) The date of adoption of the plan.
(3) As to each cooperative, the numbers of member votes cast
for and against the plan.
(4) 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 numbers of such shareholder votes cast for
and against the plan and the number of such votes required by the
articles for adoption thereof.
SECTION 41. ORS 62.620 is amended to read:
62.620. When the merger { - or consolidation - } has been
effected:
(1) The several cooperative parties to the plan of merger
{ - or consolidation - } shall be a single cooperative, which
{ - , in the case of a merger, - } shall be that cooperative
designated in the plan of merger as the surviving cooperative
{ - , and, in the case of a consolidation, shall be the new
cooperative provided for in the plan of consolidation - } .
(2) The separate existence of all cooperatives parties to the
plan of merger { - or consolidation - } , except the surviving
{ - or new - } cooperative, shall cease.
(3) The surviving { - or new - } cooperative shall thereupon
and thereafter possess all the rights, privileges, immunities and
franchises, as well of a public as of a private nature, of each
of the merging { - or consolidating - } cooperatives; and all
property, real, personal and mixed, and all debts due on whatever
account, including subscriptions to shares, and all other choses
in action, and all and every other interest, of or belonging to
or due to each of the cooperatives so merged { - or
consolidated - } , shall be deemed to be transferred to and
vested in such single cooperative without further act or deed;
and the title to any real estate, or any interest therein, vested
in any of such cooperatives shall not revert or be in any way
impaired by reason of the merger { - or consolidation - } .
(4) The surviving { - or new - } cooperative is thenceforth
responsible and liable for all the liabilities and obligations of
each of the cooperatives so merged { - or consolidated; - }
and any claim existing or action or proceeding pending by or
against any of such cooperatives may be prosecuted as if the
merger { - or consolidation - } had not taken place, or the
surviving { - or new - } cooperative may be substituted in its
place. Neither the rights of creditors nor any liens upon the
property of any such cooperative are impaired by the merger
{ - or consolidation - } .
(5) { - In the case of a merger, - } The articles of the
surviving cooperative shall be deemed to be amended to the
extent, if any, that changes in its articles are stated in the
plan of merger { - ; and, in case of a consolidation, the
statements set forth in the articles of consolidation and which
are required or permitted to be set forth in the articles of
cooperatives organized under this chapter shall be deemed to be
the original articles of the new cooperative - } .
SECTION 42. ORS 62.625 is amended to read:
62.625. (1) One or more cooperatives may merge { - or
consolidate - } with one or more of the following classes of
business organizations:
(a) Foreign cooperatives if such merger { - or
consolidation - } is permitted by the laws of the state under
which each such foreign cooperative is organized and each such
foreign cooperative complies with the applicable provisions of
such laws.
(b) Foreign business corporations if such merger { - or
consolidation - } is permitted by the laws of the state under
which each such foreign corporation is organized and each such
foreign corporation complies with the applicable provisions of
such laws.
(2) One or more cooperatives may merge with one or more
domestic corporations that are subject to ORS chapter 60 if such
corporations comply with the provisions of ORS chapter 60
relating to the merger.
(3) Each cooperative merging { - or consolidating - }
pursuant to this section shall comply with the provisions of this
chapter relating to merger { - or consolidation - } .
(4) If the surviving { - or new business - } corporation
{ - or cooperative, as the case may be, - } is to be governed
by the laws of any state other than this state, it shall comply
with the provisions of ORS chapter 60 with respect to foreign
corporations if it is to transact business in this state.
(5) The effect of the merger { - or consolidation - } under
subsection (1) of this section shall:
(a) If the surviving { - or new - } corporation is a
cooperative, be the same as provided in this chapter for the
merger { - or consolidation - } of cooperatives.
(b) If the surviving { - or new - } corporation or
cooperative is to be governed by the laws of any state other than
this state, be the same as in the case of the merger { - or
consolidation - } of cooperatives or merger of domestic
corporations, as the case may be, except insofar as the laws of
the other state provide otherwise.
(6) The effect of the merger under subsection (2) of this
section:
(a) If the surviving { - or new - } corporation is a
cooperative, shall be the same as provided in this chapter for
the merger of cooperatives.
(b) If the surviving corporation is a domestic corporation,
shall be the same as provided in ORS chapter 60 for the merger.
SECTION 43. ORS 62.789 is amended to read:
62.789. (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 { - consolidate or - }
merge with another corporation other than an employee
cooperative. Two or more employee cooperatives may
{ - consolidate or - } merge in accordance with this chapter.
{ +
+ } { + SECTION 44. + } ORS 543.660 is amended to read:
543.660. (1) A district, alone or jointly with other districts,
electric cooperatives, as defined in ORS 261.010 (8), people's
utility districts, a cooperative as defined in ORS 62.015
{ - (1)(c) - } , municipal corporations authorized to engage in
generating and distributing electricity or public utilities, as
defined in ORS 757.005, engaged in the business of generating and
distributing electricity, may enlarge or modify its water system
for the purpose of generating electricity and may operate and
maintain such facilities, notwithstanding any provision of
paragraph (a) of this subsection. If a district already has
hydroelectric generating capability, the district may enlarge or
modify the district's facilities used for generation of
hydroelectric power. Two or more districts may, as a joint
venture, generate electricity under ORS 543.650 to 543.685 so
long as the structure or facility that is enlarged or modified to
produce the electricity is part of the water system of at least
one of the districts participating in the joint venture. However,
a district may not:
(a) Construct, acquire, operate or maintain any facility or
structure that is not an enlargement or modification of the
district's water system solely or primarily for the purpose of
generating electricity; or
(b) Be created solely or primarily for the purpose of
constructing, acquiring, operating or maintaining hydroelectric
facilities.
(2) A district shall sell the excess electric energy generated
at such hydroelectric facilities to the Bonneville Power
Administration, a public utility as defined in ORS 757.005, an
electric cooperative as defined in ORS 261.010 (8), a people's
utility district, a cooperative as defined in ORS 62.015
{ - (1)(c) - } , a municipal corporation or a municipally owned
utility. Any sale of excess electric energy shall be made in
accordance with terms and conditions of the Federal Power Act, as
amended by the Public Utility Regulatory Policies Act of 1978. As
used in this subsection, 'excess electric energy' means electric
energy not used by the district to meet its own electric pumping
requirements.
(3) The board of directors of the district shall establish
regulations governing electric energy generation and sale under
this section.
(4) Electricity shall be sold under this section only at
wholesale.
SECTION 45. { + Sections 9, 10 and 15 to 31 of this Act are
added to and made a part of ORS chapter 62. + }
SECTION 46. { + ORS 62.460, 62.465, 62.470, 62.475, 62.480,
62.510, 62.700 and 62.710 are repealed. + }
----------