Chapter 0080

Chapter 80 Oregon Laws 2003

AN ACT

HB 2075

Relating to business entities; creating new provisions; and amending ORS 60.001, 60.034, 60.204, 60.214, 60.231, 60.307, 60.317, 60.354, 60.381, 60.470, 60.472, 60.481, 60.484, 60.801, 62.605, 62.607, 62.617, 63.467, 63.470, 63.481, 67.340, 67.342, 67.360, 70.500, 70.505, 70.525 and 805.310.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 60.001 is amended to read:

60.001. As used in this chapter:

(1) “Anniversary” means that day each year exactly one or more years after:

(a) The date of filing by the Secretary of State of the articles of incorporation in the case of a domestic corporation.

(b) The date of filing by the Secretary of State of an application for authority to transact business in the case of a foreign corporation.

(2) “Articles of incorporation” include amended and restated articles of incorporation, articles of conversion and articles of merger.

(3) “Authorized shares” means the shares of all classes a domestic or foreign corporation is authorized to issue.

(4) “Conspicuous” means so written that a reasonable person against whom the writing is to operate should have noticed it. For example, printing in italics, boldface or contrasting color, typing in capitals or underlined is conspicuous.

(5) “Corporation” or “domestic corporation” means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of this chapter.

(6) “Delivery” means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery and electronic transmission.

[(6)] (7) “Distribution” means a direct or indirect transfer of money or other property, except of a corporation’s own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a declaration or payment of a dividend, a purchase, redemption or other acquisition of shares, a distribution of indebtedness, or otherwise.

[(7)] (8) “Domestic limited liability company” means an entity that is an unincorporated association having one or more members and that is organized under ORS chapter 63.

[(8)] (9) “Domestic nonprofit corporation” means a corporation not for profit incorporated under ORS chapter 65.

[(9)] (10) “Domestic professional corporation” means a corporation organized under ORS chapter 58 for the purpose of rendering professional services and for the purposes provided under ORS chapter 58.

(11) “Electronic signature” has the meaning given that term in ORS 84.004.

(12) “Electronic transmission” means any process of communication that does not directly involve the physical transfer of paper and that is suitable for the retention, retrieval and reproduction of information by the recipient.

[(10)] (13) “Employee” includes an officer but not a director. A director may accept duties that make the director also an employee.

[(11)] (14) “Entity” includes a corporation, foreign corporation, nonprofit corporation, profit and nonprofit unincorporated association, business trust, estate, partnership, trust, two or more persons having a joint or common economic interest, any state, the United States and any foreign government.

[(12)] (15) “Foreign corporation” means a corporation for profit incorporated under a law other than the law of this state.

[(13)] (16) “Foreign limited liability company” means an entity that is an unincorporated association organized under the laws of a state other than this state 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.

[(14)] (17) “Foreign nonprofit corporation” means a corporation not for profit organized under the laws of a state other than this state.

[(15)] (18) “Foreign professional corporation” means a professional corporation organized under the laws of a state other than this state.

[(16)] (19) “Governmental subdivision” includes an authority, county, district and municipality.

[(17)] (20) “Includes” denotes a partial definition.

[(18)] (21) “Individual” means a natural person. “Individual” includes the estate of an incompetent individual or a deceased individual.

[(19)] (22) “Means” denotes an exhaustive definition.

[(20)] (23) “Office,” when used to refer to the administrative unit directed by the Secretary of State, means the office of the Secretary of State.

[(21)] (24) “Person” includes individual and entity.

[(22)] (25) “Principal office” means the office, in or out of this state, where the principal executive offices of a domestic or foreign corporation are located and designated in the annual report or application for authority to transact business in this state.

[(23)] (26) “Proceeding” includes civil, criminal, administrative and investigatory action.

[(24)] (27) “Record date” means the date established under this chapter on which a corporation determines the identity of its shareholders and their shareholdings for purposes of this chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.

[(25)] (28) [“Share”] “Shares” means the units into which the proprietary interest in a corporation are divided.

[(26)] (29) “Shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.

(30) “Signature” includes any manual, facsimile, conformed or electronic signature.

[(27)] (31) “State,” when referring to a part of the United States, includes a state, commonwealth, territory and insular possession of the United States and its agencies and governmental subdivisions.

[(28)] (32) “Subscriber” means a person who subscribes for shares in a corporation, whether before or after incorporation.

[(29)] (33) “United States” includes a district, authority, bureau, commission, department and any other agency of the United States.

[(30)] (34) “Voting group” means all shares of one or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group.

SECTION 2. ORS 60.034 is amended to read:

60.034. (1) Except as provided in subsection (3) of this section, notice under this chapter shall be in writing unless oral notice is specifically permitted under the circumstances by the articles of incorporation or bylaws. Notice by electronic transmission, other than voice mail, is written notice.

(2)(a) Notice may be communicated in person, [by telephone, telegraph, teletype or other form of wire or wireless communication, or by mail or private carrier] by mail or other method of delivery, by telephone or by voice mail or other electronic transmission.

(b) If a form of notice described in paragraph (a) of this subsection is impracticable, notice may be communicated by a newspaper of general circulation in the area where published, or by radio, television or other form of public broadcast communication.

(3) All notices required by this chapter by a corporation to its shareholders shall be in writing. Written notice by a domestic or foreign corporation to [its] a shareholder or director, if in a comprehensible form, is effective [when mailed]:

(a) Upon deposit in the United States mail if it is mailed postpaid and is correctly addressed to the shareholder’s address shown in the corporation’s current record of shareholders or the director’s address shown in the corporation’s records;

(b) When electronically transmitted to the shareholder in a manner authorized in writing by the shareholder; or

(c) When electronically transmitted to the director in a manner authorized by the director. [All notices required by this chapter by a corporation to its shareholders shall be in writing.]

(4) Written notice to a domestic or foreign corporation authorized to transact business in this state may be addressed to its registered agent at its registered office or to the domestic or foreign corporation or its president or secretary at its principal office or mailing address as shown in the records of the office.

(5) Except as provided in subsection (3) of this section, or unless the articles of incorporation or bylaws provide otherwise for notices to directors, written notice, if in a comprehensible form, is effective at the earliest of the following:

(a) When received;

(b) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed; or

(c) On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested and the receipt is signed by or on behalf of the addressee.

(6) Oral notice is effective when communicated if communicated in a comprehensible manner.

(7) If this chapter prescribes notice requirements for particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe notice requirements, not inconsistent with this section or other provisions of this chapter, those requirements govern.

SECTION 3. ORS 60.204 is amended to read:

60.204. (1) A corporation shall hold a special meeting of shareholders:

(a) On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws; or

(b) Except as provided in this paragraph, if the holders of at least 10 percent of all votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the corporation’s secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held. The articles of incorporation may fix a lower percentage or a higher percentage not exceeding 25 percent of all the votes entitled to be cast on any issue proposed to be considered. Unless otherwise provided in the articles of incorporation, a written demand for a special meeting may be revoked by a writing to that effect signed by a shareholder who signed the original demand, and received by the corporation prior to the receipt by the corporation of a demand sufficient to require the holding of a special meeting.

(2) If not otherwise fixed under ORS 60.207 or 60.221, the record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs the demand.

(3) Special shareholders’ meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation’s principal office.

(4) Only business within the purpose or purposes described in the meeting notice required by ORS 60.214 (3) may be conducted at a special shareholders’ meeting.

SECTION 4. Section 5 of this 2003 Act is added to and made a part of ORS chapter 60.

SECTION 5. (1) At each meeting of shareholders, a chairperson shall preside. The chairperson shall be appointed as provided in the bylaws or, in the absence of such provision, by the board.

(2) Unless the articles of incorporation or bylaws provide otherwise, the chairperson shall determine the order of business and shall have the authority to establish rules for the conduct of the meeting.

(3) Any rules adopted for, and the conduct of, the meeting shall be fair to shareholders.

(4) The chairperson of the meeting shall announce at the meeting when the polls close for each matter voted upon. If no announcement is made, the polls shall be considered to have closed upon the final adjournment of the meeting. After the polls close, no ballots, proxies or votes, or any revocations or changes thereto, may be accepted.

SECTION 6. ORS 60.214 is amended to read:

60.214. (1) A corporation shall notify shareholders of the date, time and place of each annual and special shareholders’ meeting not earlier than 60 days nor less than 10 days before the meeting date. Unless this chapter or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting.

(2) Unless required by this chapter or the articles of incorporation, notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.

(3) Notice of a special meeting must include a description of the purpose or purposes for which the meeting is called.

(4) If not otherwise fixed under ORS 60.207 or 60.221, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders’ meeting is the day before the first notice is mailed or otherwise transmitted for delivery to shareholders in accordance with ORS 60.034.

(5) Unless the bylaws require otherwise, if an annual or special shareholders’ meeting is adjourned to a different date, time or place, notice need not be given of the new date, time or place if the new date, time or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under ORS 60.221, however, notice of the adjourned meeting must be given under this section to persons who are shareholders as of the new record date.

SECTION 7. ORS 60.231 is amended to read:

60.231. (1) A shareholder may vote shares in person or by proxy.

(2) A shareholder may authorize a person or persons to act for the shareholder as proxy in any one of the following manners:

(a) A shareholder or the shareholder’s designated officer, director, employee or agent may execute a writing by:

(A) Signing it; or

(B) Causing the shareholder’s signature or the signature of the designated officer, director, employee or agent of the shareholder to be affixed to the writing by any reasonable means, including facsimile signature.

(b) A shareholder may [transmit or authorize the transmission of an electronic submission. The electronic submission] authorize an electronic transmission that:

[(A) May be transmitted by any electronic means, including data and voice telephonic communications and computer network;]

[(B)] (A) May be transmitted to:

(i) The person who will be the holder of the proxy;

(ii) The proxy solicitation firm; or

(iii) A proxy support service organization or similar agency authorized by the person who will be the holder of the proxy to receive the electronic [submission] transmission; and

[(C)] (B) Must [either] contain or be accompanied by information from which it can be determined that the [electronic submission was transmitted by or authorized by the shareholder] shareholder or the shareholder’s designated officer, director, employee or agent authorized the transmission.

(3) A copy, facsimile telecommunication or other reliable reproduction of the writing or electronic [submission] transmission created under subsection (2)(a) or (b) of this section may be used instead of the original writing or electronic [submission] transmission for all purposes for which the original writing or electronic [submission] transmission may be used if the copy, facsimile telecommunication or other reproduction is a complete copy of the entire original writing or electronic [submission] transmission.

(4) An authorization of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An authorization is valid for 11 months unless a longer period is expressly provided in the authorization form.

(5) An authorization of a proxy is revocable by the shareholder unless the authorization conspicuously states that it is irrevocable and the authorization is coupled with an interest. Authorizations coupled with an interest include the authorization of:

(a) A pledgee;

(b) A person who purchased or agreed to purchase the shares;

(d) An employee of the corporation whose employment contract requires the authorization; or

(e) A party to a voting agreement created under ORS 60.257.

(6) The death or incapacity of the shareholder authorizing a proxy does not affect the right of the corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy’s authority under the authorization.

(7) An authorization made irrevocable under subsection (5) of this section is revoked when the interest with which it is coupled is extinguished.

(8) A transferee for value of shares subject to an irrevocable authorization may revoke the authorization if the transferee did not know of its existence when the transferee acquired the shares and the existence of the irrevocable authorization was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.

(9) Subject to ORS 60.237 and to any express limitation on the proxy’s authority appearing on the face of the authorization form or electronic transmission, a corporation is entitled to accept the proxy’s vote or other action as that of the shareholder making the authorization.

SECTION 8. Section 9 of this 2003 Act is added to and made a part of ORS chapter 60.

SECTION 9. (1) A corporation having any shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association shall, and any other corporation may, appoint one or more inspectors to act at a meeting of shareholders and make a written report of the inspectors’ determinations. Each inspector shall take and sign an oath to faithfully execute the duties of the inspector with strict impartiality and according to the best of the inspector’s ability.

(2) The inspectors shall:

(a) Ascertain the number of shares outstanding and the voting power of each share;

(b) Determine the shares represented at a meeting;

(c) Determine the validity of proxies and ballots;

(d) Count all votes; and

(e) Determine the result.

(3) An inspector may be an officer or employee of the corporation.

SECTION 10. ORS 60.307 is amended to read:

60.307. (1) A board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws. Notwithstanding ORS 60.001 (21), the estate of an incompetent individual or a deceased individual may not be a director.

(2) The [articles of incorporation or bylaws may establish a variable range for the size of the board of directors by fixing a minimum and maximum number of directors. If a variable range is established, the] number of directors may be [fixed or changed periodically, within the minimum and maximum, by the shareholders or the board of directors. If] increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation [establish a fixed or a variable range for the size of the board of directors then, after shares are issued, only the shareholders may change the range for the size of the board or change from a fixed or a variable-range size board] or the bylaws.

(3) Directors are elected at the first annual shareholders’ meeting and at each annual meeting thereafter unless their terms are staggered under ORS 60.317.

SECTION 11. ORS 60.317 is amended to read:

60.317. (1) [If there are six or more directors,] The articles of incorporation [or the bylaws] may provide for staggering [their terms] the terms of directors by dividing the total number of directors into two or three groups, with each group to be as nearly equal in number as possible.

(2) [In that event] If the terms of the directors are staggered, the terms of directors in the first group expire at the first annual shareholders’ meeting after their election, the terms of the second group expire at the second annual shareholders’ meeting after their election and the terms of the third group, if any, expire at the third annual shareholders’ meeting after their election. At each annual shareholders’ meeting held thereafter, directors shall be chosen for a term of two years or three years, as the case may be, to succeed those whose terms expire.

(3) If the corporation has cumulative voting, terms of directors may be staggered only if authorized by the articles of incorporation and each group of directors contains at least three members.

SECTION 12. ORS 60.354 is amended to read:

60.354. (1) Unless this chapter, the articles of incorporation or the bylaws provide otherwise, a board of directors may create one or more committees and appoint one or more members of the board of directors to serve on [them. Each committee shall have two or more members, who serve at the pleasure of the board of directors] each committee.

(2) Unless this chapter provides otherwise, the creation of a committee and appointment of members to it must be approved by the greater of:

(a) A majority of all the directors in office when the action is taken; or

(b) The number of directors required by the articles of incorporation or bylaws to take action under ORS 60.351.

(3) ORS 60.337 to 60.351 [governing meetings, action without meetings, notice and waiver of notice and quorum and voting requirements of the board of directors apply to committees and their members as well] apply both to committees of the board and to members of the committees.

(4) Except as provided in subsection (5) of this section, to the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the [authority] powers of the board of directors under ORS 60.301.

(5) A committee may not:

(a) Authorize or approve distributions, except [as may be permitted by paragraph (g) of this subsection] according to a formula or method, or within limits, prescribed by the board of directors;

(b) Approve or propose to shareholders [actions] action that this chapter requires [to] be approved by shareholders;

[(d) Amend articles of incorporation pursuant to ORS 60.434, except as may be necessary to document a determination of the relative rights, preferences and limitations of a class or series of shares by a committee or an officer of the corporation as permitted by paragraph (h) of this subsection;]

[(e)] (d) Adopt, amend or repeal bylaws[;].

[(f) Approve a plan of merger not requiring shareholder approval;]

[(g) Authorize or approve reacquisition of shares, except within limits prescribed by the board of directors; or]

[(h) Authorize or approve the issuance or sale or contract for sale of shares or determine the designation and relative rights, preferences and limitations of a class or series of shares, except that the board of directors may authorize a committee or an officer of the corporation to do so:]

[(A) Pursuant to a stock option or other stock compensation plan; or]

[(B) By approving the maximum number of shares to be issued and delegating the authority to determine all or any part of the terms of the issuance or sale or contract of sale and the designation and relative rights, preferences and limitations of the class or series of shares.]

(6) The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in ORS 60.357.

(7) The board of directors may appoint one or more directors as alternate members of any committee to replace any absent or disqualified member during the member’s absence or disqualification. Unless the articles of incorporation, the bylaws or the resolution creating the committee provide otherwise, in the event of the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, unanimously, may appoint a director to act in place of the absent or disqualified member.

SECTION 13. ORS 60.381 is amended to read:

60.381. (1) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is effective under ORS 60.034 (5) unless the notice specifies a later effective [date] time. If a resignation is made effective at a later [date] time and the corporation accepts the future effective [date] time, its board of directors or the appointing officer may fill the pending vacancy before the effective [date] time if the board of directors or the appointing officer provides that the successor does not take office until the effective [date] time.

(2) [A board of directors may remove any] An officer may be removed at any time with or without cause[. A duly appointed officer may remove any other officer at any time with or without cause if the appointed officer is authorized] by:

(a) The board of directors;

(b) The appointing officer, unless otherwise provided by the bylaws or the board of directors [to remove the other officer.]; or

(c) Any other officer if authorized by the bylaws or the board of directors.

(3) Once delivered, a notice of resignation is irrevocable unless revocation is permitted by the board of directors.

(4) As used in this section, “appointing officer” means the officer or any successor to that officer who appointed the officer resigning or being removed.

SECTION 14. ORS 60.470 is amended to read:

60.470. As used in ORS 60.470 to 60.501:

(1) “Business entity” means:

(a) Any of the following for-profit entities:

[(a)] (A) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

[(b)] (B) A corporation organized under this chapter, predecessor law or comparable law of another jurisdiction;

[(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;]

[(d)] (C) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

[(e)] (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

[(f)] (E) A limited partnership organized under ORS chapter 70, predecessor law or comparable law of another jurisdiction; and

(b) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction.

(2) “Organizational document” means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(3) “Owner” means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 15. ORS 60.472 is amended to read:

60.472. (1) A business entity other than a corporation may be converted to a corporation organized under this chapter, and a corporation organized under this chapter may be converted to another business entity organized under the laws of this state, if conversion is permitted by the statutes governing the other business entity, by approving a plan of conversion and filing articles of conversion. A corporation organized under this chapter may be converted to a business entity organized under the laws of another jurisdiction if:

(a) The conversion is permitted by the laws of that jurisdiction;

(b) A plan of conversion is approved by the converting corporation;

(d) The converted business entity submits an application to transact business as a foreign business entity of that type to the Secretary of State for filing and meets all other requirements prescribed under the laws of this state for authorization to transact business as a foreign business entity of that type; and

(e) The corporation complies with all requirements imposed under the laws of the other jurisdiction with respect to the conversion.

(2) The plan of conversion shall set forth:

(a) The name and type of the business entity prior to conversion;

(b) The name and type of the business entity after conversion;

(d) The manner and basis of converting the ownership interests of each owner into ownership interests or obligations of the converted business entity or any other business entity, or into cash or other property in whole or in part; and

(e) Any additional information required in the organizational document of the converted business entity by the statutes governing that type of business entity.

(3) The plan of conversion may set forth other provisions relating to the conversion.

SECTION 16. ORS 60.481 is amended to read:

60.481. (1)(a) One or more business entities may merge into a corporation organized under [the laws of] this [state] chapter if the merger is permitted by the statutes governing each other business entity that is a party to the merger, a plan of merger is approved by each business entity that is a party to the merger and articles of merger are filed. A corporation organized under this chapter may be merged into a business entity organized under the laws of this state or under the laws of another jurisdiction, other than a foreign corporation, if:

(A) The merger is permitted by the laws of [the other jurisdiction;] 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;

(D) The corporation complies with all requirements imposed under the laws of this state and, if applicable, the laws of the other jurisdiction with respect to the merger.

(b) A merger of one or more domestic corporations with one or more foreign corporations is governed by ORS 60.501.

(2) The plan of merger shall set forth:

(a) The name and type of each business entity planning to merge;

(b) The name and type of the business entity that will survive;

(d) The manner and basis of converting the shares or other ownership interests of each owner into shares, ownership interests or obligations of the surviving business entity or any other business entity, or into cash or other property in whole or in part; and

(e) If any party is a business entity other than a corporation, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the articles of incorporation of a corporation, if the corporation is the surviving business entity; and

(b) Other provisions relating to the merger.

(4) One or more corporations may merge with a nonprofit corporation under ORS 65.481 to 65.504.

SECTION 17. ORS 60.484 is amended to read:

60.484. (1) A corporation may acquire all of the outstanding shares of one or more classes or series of another corporation if the board of directors of each corporation adopts a plan of exchange and, if required by ORS 60.487, the shareholders of each corporation approve the exchange.

(2) The plan of exchange must set forth:

(a) The name of the corporation whose shares will be acquired and the name of the acquiring corporation;

(b) [The] A summary of the material terms and conditions of the exchange; and

(c) The manner and basis of exchanging the shares to be acquired for shares, obligations, or other securities of the acquiring or any other corporation or for cash or for other property in full or part.

(3) The plan of exchange may set forth other provisions relating to the exchange.

(4) This section does not limit the power of a corporation to acquire all or part of the shares of one or more classes or series of another corporation through a voluntary exchange or otherwise.

SECTION 17a. ORS 60.801 is amended to read:

60.801. As used in ORS 60.801 to 60.816:

(1) “Acquiring group” means two or more persons who agree to act together or enter into any arrangement or understanding for the purpose of voting or acquiring voting shares of an issuing public corporation, but does not include two or more persons whose sole agreement relates to the granting of an immediately revocable proxy.

(2) “Acquiring person” means a person who acquires or proposes to acquire ownership of, or the power to direct the voting of, voting shares of an issuing public corporation and includes all affiliates of such person.

(3)(a) “Affiliate” means a person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person. As used in this subsection, “control,” including the terms “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise. A person who is the owner of 10 percent or more of a corporation’s outstanding voting shares shall be presumed to have control of the corporation in the absence of proof by a preponderance of the evidence to the contrary.

(b) Notwithstanding paragraph (a) of this subsection, a presumption of control shall not apply where a person holds voting shares in good faith and not for the purpose of circumventing ORS 60.801 to 60.816 as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of the corporation.

(4)(a) “Control share acquisition” means the acquisition, directly or indirectly, by any acquiring person, including a member of an acquiring group, of ownership of, or the power to direct the voting of, voting shares of an issuing public corporation in a transaction that causes the total voting power of the acquiring person or any acquiring group of which the acquiring person is a member in the election of directors of the issuing public corporation to exceed one-fifth, one-third or one-half of the total voting power of all the voting shares.

(b) For purposes of this subsection, voting shares of an issuing public corporation acquired within 90 days of a control share acquisition by the acquiring person or members of the acquiring group making the control share acquisition shall be considered to have been acquired in the same control share acquisition.

(c) For purposes of this subsection, a person who acquires voting shares in the ordinary course of business for the benefit of others in good faith and not for the purpose of circumventing ORS 60.801 to 60.816 has ownership and voting power only of voting shares in respect of which that person would be able to exercise or direct the exercise of votes without further instruction from others.

(d) For purposes of this subsection, if two or more persons enter into a binding agreement that is not immediately revocable with respect to the voting of their voting shares, in addition to those persons thereby becoming an acquiring group:

(A) Any single person who thereby obtains the right to determine how any other parties to the agreement must vote their shares shall be deemed to have acquired the power to direct the voting of the voting shares held by such other parties to the agreement; and

(B) Any group of persons who thereby obtain the right to determine how any parties to the agreement must vote their shares shall collectively be deemed to be a separate acquiring person who has acquired the power to direct the voting of all voting shares held by such parties to the agreement. The group of persons shall include all parties to the agreement if all parties share in the decision or if the agreement specifies how the shares must be voted.

(e) The acquisition of any voting shares of an issuing public corporation does not constitute a control share acquisition if the acquisition is consummated in any of the following circumstances:

(A) At a time when the corporation was not subject to ORS 60.801 to 60.816.

(B) Pursuant to a contract entered into at a time when the corporation was not subject to ORS 60.801 to 60.816.

(D) Pursuant to the satisfaction of a pledge or other security interest created in good faith and not for the purpose of circumventing ORS 60.801 to 60.816.

(E) In a transaction in which voting shares are acquired from the issuing public corporation.

(F) Pursuant to a merger or plan of share exchange effected in compliance with ORS 60.470 to 60.501, if the issuing public corporation is a party to the agreement of merger or plan of share exchange.

(G) Pursuant to a transfer of voting shares between or among affiliates or immediate family members unless the voting shares are control shares that have not had their voting rights restored under ORS 60.807.

(H) In a transaction in which voting power is acquired solely by receipt of an immediately revocable proxy or by any other agreement or understanding that is not binding on the person transferring such voting power.

(5)(a) “Control shares” means voting shares of an issuing public corporation that are acquired in a control share acquisition. “Control shares” does not include voting shares acquired in a control share acquisition that are subsequently transferred, or whose voting power is subsequently transferred, other than a transfer of voting power by termination of a binding voting agreement, to a person that is not an affiliate of the transferor or a member of an acquiring group of which the transferor is a member in a transaction that is not a control share acquisition. “Control shares” also does not include voting shares acquired in a control share acquisition whose voting power is subsequently transferred pursuant to the termination of a binding voting agreement if, assuming the parties to the agreement had never entered into the agreement but had been members of an acquiring group during the term of the agreement, the voting shares would not have been control shares.

(b) If an acquiring person or any member of an acquiring group transfers control shares in a transaction that causes the control shares to cease to be control shares without reducing the total voting power of the acquiring person or acquiring group to less than one-fifth of the total voting power of all the voting shares, and within 90 days before or after such transfer the transferor or any member of an acquiring group of which the transferor is a member acquires ownership of, or the power to direct the voting of, any voting shares, all such voting shares up to the number of voting shares having total voting power equal to the total voting power of the control shares transferred shall be considered control shares.

(6) “Immediate family member” means any grandparent, parent, brother, sister, child, grandchild or spouse of a person, or any other relative of the person or the person’s spouse who has the same home as the person.

(7)(a) “Interested shares” means voting shares of an issuing public corporation that any of the following persons have sole or shared power to vote, or direct the voting of, either directly or by proxy or voting agreement, at a meeting at which the voting rights of control shares are to be considered:

(A) The acquiring person or a member of the acquiring group whose voting rights are under consideration.

(B) Any officer of the issuing public corporation.

(b) For purposes of this subsection, a person shall not be deemed to have the power to vote, or direct the voting of, voting shares if the person’s power with respect to the shares arises solely from holding an immediately revocable proxy, unless the proxy is solicited in connection with an offer to purchase or solicitation of offers to sell voting shares which requires the granting of a proxy as a condition to the acceptance of a tender of voting shares from any shareholder.

(8)(a) “Issuing public corporation” means a corporation incorporated or existing pursuant to the provisions of this chapter that has:

(A) One hundred or more record or beneficial shareholders;

(B) Its principal place of business, its principal office or [substantial] assets with a fair market value of not less than $1 million within this state; and

(i) More than 10 percent of its record shareholders resident in this state;

(ii) More than 10 percent of its shares owned beneficially or of record by residents of this state; or

(iii) [Ten thousand] At least 10,000 of its record or beneficial shareholders resident in this state.

(b) The residence of a shareholder is presumed to be the address appearing in the records of the corporation.

(c) Shares held by banks, except as trustee or guardian, brokers or nominees shall be disregarded for purposes of calculating the percentages or numbers described in paragraph (a)(C) of this subsection.

(9) “Person” means any individual, corporation, partnership, unincorporated association or other entity.

(10) “Total voting power” of any person or any shares means the voting power such person or shares would have except for ORS 60.801 to 60.816.

(11) “Voting shares” means shares that have, or would have except for this Act, voting power in any vote for the election of directors and that belong to a class or series that, together with all other classes or series that vote with such class or series as a group with respect to the election of directors, elects at least a majority of the directors.

SECTION 17b. ORS 62.605 is amended to read:

62.605. 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) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

[(b)] (B) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

[(c) A cooperative organized under this chapter, predecessor law or comparable law of another jurisdiction;]

[(d)] (C) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

[(f)] (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;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 18. ORS 62.607 is amended to read:

62.607. (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;

(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;

(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.

SECTION 19. ORS 62.617 is amended to read:

62.617. (1) One or more business entities may merge into a cooperative organized under [the laws of] this [state] 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 [the other jurisdiction;] 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;

(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;

(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.

SECTION 20. ORS 63.470 is amended to read:

63.470. (1) A business entity other than a limited liability company may be converted to a limited liability company organized under this chapter, and a limited liability company 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 limited liability company 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 limited liability company;

(e) The limited liability company complies with any 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;

(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.

SECTION 21. ORS 63.481 is amended to read:

63.481. (1) One or more business entities may merge into a limited liability company organized under [the laws of] this [state] 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 limited liability company 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 [that jurisdiction;] 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;

(d) The limited liability company complies with any 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;

(e) If any party is a business entity other than a limited liability company, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the articles of organization of a limited liability company, if that company is the surviving business entity; and

(b) Other provisions relating to the merger.

SECTION 22. ORS 67.342 is amended to read:

67.342. (1) A business entity other than a partnership may be converted to a partnership organized under this chapter, and a partnership 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 partnership 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 partnership;

(e) The partnership complies with any 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;

(e) If the business entity after conversion is not a partnership, 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.

SECTION 23. ORS 67.360 is amended to read:

67.360. (1) One or more business entities may merge into a partnership organized under [the laws of] this [state] 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 partnership 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 [the other jurisdiction;] 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;

(d) The partnership 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;

(e) If any party is a business entity other than a partnership, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the partnership agreement of a partnership and, if applicable, its registration as a limited liability partnership if the partnership is the surviving business entity; and

(b) Other provisions relating to the merger.

SECTION 24. ORS 70.505 is amended to read:

70.505. (1) A business entity [that is not] other than a limited partnership may [convert] be converted to a limited partnership organized under this chapter, and a limited partnership organized under this chapter may [convert] 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 limited partnership 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 limited partnership;

(e) The limited partnership complies with any requirements imposed under the laws of the other jurisdiction with respect to the conversion.

(2) A plan of conversion shall set forth:

(a) The name and type of business entity prior to conversion;

(b) The name and type of the business entity after conversion;

(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.

SECTION 25. ORS 70.525 is amended to read:

70.525. (1) One or more business entities may merge into a limited partnership organized under [the laws of] this [state] 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 limited partnership 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 [the other jurisdiction;] 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;

(d) The limited partnership 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;

(e) If any party is a business entity other than a limited partnership, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the certificate of limited partnership, if a limited partnership is the surviving business entity; and

(b) Other provisions relating to the merger.

SECTION 26. ORS 805.310 is amended to read:

805.310. To qualify for issuance of registration described under ORS 805.300 a person must be engaged, either as owner or renter, in operating one or more farms, orchards or ranches actually producing agricultural products or raising livestock in sufficient quantities to reasonably require the use of the motor vehicle or vehicles for which the farm vehicle license is sought. Cooperative corporations or associations organized under the provisions of ORS chapter 62 or corporations or subsidiaries of corporations do not qualify for the issuance of licenses described under ORS 805.300 if owned by more than 100 shareholders. As used in this section, “shareholder” [and “share” have] has the [same] meaning given [those terms] that term in ORS 60.001.

SECTION 27. ORS 63.467 is amended to read:

63.467. As used in ORS 63.467 to 63.497:

(1) “Business entity” means:

(a) Any of the following for-profit entities:

[(a)] (A) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

[(b)] (B) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

[(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;]

[(d)] (C) A limited liability company organized under this chapter or comparable law of another jurisdiction;

[(f)] (E) A limited partnership organized under ORS chapter 70, predecessor law or comparable law of another jurisdiction; and

(b) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction.

(2) “Organizational document” means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(3) “Owner” means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 28. ORS 67.340 is amended to read:

67.340. As used in ORS 67.340 to 67.365:

(1) “Business entity” means:

(a) Any of the following for-profit entities:

[(a)] (A) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

[(b)] (B) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

[(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;]

[(d)] (C) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

[(e)] (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 this chapter, and a partnership governed by law of another jurisdiction that expressly provides for conversions and mergers; and

[(f)] (E) A limited partnership organized under ORS chapter 70, predecessor law or comparable law of another jurisdiction; and

(b) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction.

(2) “General partner” means a partner in a partnership and a general partner in a limited partnership.

(3) “Limited partner” means a limited partner in a limited partnership.

(4) “Limited partnership” means a limited partnership created under ORS chapter 70, predecessor law or comparable law of another jurisdiction.

(5) “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.

(6) “Owner” means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(d) Partner of a partnership; and

(e) Partner of a limited partnership.

(7) “Partner” includes both a general partner and a limited partner.

SECTION 29. ORS 70.500 is amended to read:

70.500. As used in ORS 70.500 to 70.540:

(1) “Business entity” means:

(a) Any of the following for-profit entities:

[(a)] (A) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

[(b)] (B) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

[(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;]

[(d)] (C) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

[(f)] (E) A limited partnership organized under this chapter, predecessor law or comparable law of another jurisdiction; and

(b) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction.

(2) “Organizational document” means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(3) “Owner” means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 30. (1) The amendments to ORS 60.034 by section 2 of this 2003 Act apply to notices given or required to be given on or after the effective date of this 2003 Act.

(2) Sections 5 and 9 of this 2003 Act apply to meetings of shareholders held on or after the effective date of this 2003 Act.

(3) The amendments to ORS 60.231 by section 7 of this 2003 Act apply to authorizations to act as proxy executed or transmitted on or after the effective date of this 2003 Act.

(4) The amendments to ORS 60.354 by section 12 of this 2003 Act apply to committee actions that occur on or after the effective date of this 2003 Act.

(5) The amendments to ORS 60.381 by section 13 of this 2003 Act apply to officers who resign or are removed on or after the effective date of this 2003 Act.

Approved by the Governor May 24, 2003

Filed in the office of Secretary of State May 27, 2003

Effective date January 1, 2004

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