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GENERAL PROVISIONS
(Short Title and Definitions)
62.005 Short title. This chapter shall be known and may be cited as the “Oregon Cooperative Corporation Act.” [1957 c.716 §1]
62.010 [Repealed by 1957 c.716 §76]
62.015 Definitions. As used in this chapter, unless the context requires otherwise:
(1) “Anniversary” means that day each year exactly one or more years after:
(a) The date of filing by the Secretary of State of the articles of incorporation in the case of a domestic cooperative.
(b) The date of filing by the Secretary of State of an application for authority to transact business in the case of a foreign cooperative.
(2) “Articles” means articles of incorporation, articles of conversion and articles of merger.
(3) “Board” means board of directors.
(4) “Cooperative” means a cooperative corporation which is subject to the provisions of this chapter.
(5) “Corporation” means a corporation which is not a cooperative.
(6) “Domestic limited liability company” means an entity that is an unincorporated association having one or more members and that is organized under ORS chapter 63.
(7) “Domestic nonprofit corporation” means a corporation not for profit incorporated under ORS chapter 65.
(8) “Domestic professional corporation” means a corporation organized under ORS chapter 58 for the purpose of rendering professional services and for the purposes provided under ORS chapter 58.
(9) “Foreign cooperative” means a cooperative corporation organized under laws other than the laws of this state.
(10) “Foreign corporation” means a corporation for profit incorporated under the laws of a state other than this state.
(11) “Foreign limited liability company” means an entity that is an unincorporated association organized under the laws of a state other than this state, under the laws of a federally recognized Indian tribe or under the laws of a foreign country and that is organized under a statute under which an association may be formed that affords to each of its members limited liability with respect to liabilities of the entity.
(12) “Foreign nonprofit corporation” means a corporation not for profit organized under the laws of a state other than this state.
(13) “Foreign professional corporation” means a professional corporation organized under the laws of a state other than this state.
(14) “Member” means a person who has been qualified and accepted for membership in a cooperative.
(15) “Membership stock” means any class of stock, continuous ownership of which is required for membership in a cooperative.
(16) “Negotiate” means to confer with another in order to come to terms.
(17) “Person” includes individuals, corporations, associations, firms, partnerships, joint stock companies, trusts, estates and foreign and domestic cooperative corporations.
(18) “Shareholder” means a holder of shares of capital stock of a cooperative other than membership stock. [1957 c.716 §2; 1963 c.492 §41; 1974 c.2 §4; 1987 c.94 §78; 1995 c.195 §1; 1999 c.362 §16; 2001 c.142 §1; 2001 c.315 §33; 2005 c.107 §2]
62.020 [Repealed by 1957 c.716 §76]
(Filing Documents)
62.025 Filing requirements. (1) A document must satisfy the requirements of this section or any other section that modifies these requirements, to be entitled to filing by the Secretary of State.
(2) This chapter must require or permit filing the document with the Office of Secretary of State.
(3) The document shall contain the information required by this chapter. It may contain other information as well.
(4) The document must be legible.
(5) The document must be in the English language.
(6) The document must be executed:
(a) By the chairperson of the board of directors of a domestic cooperative, its president or another of its officers;
(b) If directors have not been selected or before the organizational meeting, by an incorporator; or
(c) If the cooperative is in the hands of a receiver, trustee or other court-appointed fiduciary, by that receiver, trustee or fiduciary.
(7) The person executing the document shall state beneath or opposite the signature the name of the person and the capacity in which the person signs. The document may, but is not required to contain:
(a) The corporate seal;
(b) An attestation by the secretary or an assistant secretary; and
(c) An acknowledgment, verification or proof.
(8) If the Secretary of State has prescribed a mandatory form for the document under ORS 62.045, the document must be in or on the prescribed form.
(9) The document must be delivered to the Office of Secretary of State and must be accompanied by the required fees.
(10) Delivery of a document to the Office of Secretary of State is accomplished only when the document is actually received by the Office of Secretary of State. [1987 c.94 §69; 1999 c.486 §7]
62.030 Filing, service, copying and certification fees. The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter. [1987 c.94 §71; 1991 c.132 §4; 1995 c.195 §35; 1999 c.362 §§17,17a]
62.035 Effective time and date of document. (1) Except as provided in subsection (2) of this section and ORS 62.040, a document accepted for filing is effective on the date it is filed by the Secretary of State and at the time, if any, specified in the document as its effective time or at 12:01 a.m. on that date if no effective time is specified.
(2) If a document specifies a delayed effective time and date, the document becomes effective at the time and date specified. If a document specifies a delayed effective date but no time, the document becomes effective at 12:01 a.m. on that date. A delayed effective date for a document may not be later than the 90th day after the date it is filed. [1987 c.94 §72; 1995 c.195 §36]
62.040 Correcting filed document. (1) A cooperative may correct a document filed by the Secretary of State, other than an annual report, if the document contains an incorrect statement or was defectively executed, attested, sealed, verified or acknowledged.
(2) A cooperative shall correct a document by delivering articles of correction to the Office of Secretary of State. The articles shall include the following:
(a) A description of the document, including its filing date, or a copy of the document.
(b) The incorrect statement and the reason it is incorrect, or a description of the manner in which the execution, attestation, seal, verification or acknowledgment is defective.
(c) A correction of the incorrect statement or defective execution, attestation, seal, verification or acknowledgment.
(3) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed. [1987 c.94 §73]
62.045 Forms; rules. Upon request, the Secretary of State may furnish forms for documents required or permitted to be filed by this chapter. The Secretary of State may by rule require the use of the forms. [1987 c.94 §70; 1995 c.215 §9]
62.050 Filing duty of Secretary of State. (1) If a document delivered to the Office of Secretary of State for filing satisfies the requirements of ORS 62.025, the Secretary of State shall file it.
(2) The Secretary of State files a document by indicating thereon that it has been filed by the Secretary of State and the date of filing. After filing a document, except as provided in ORS 62.155 and 62.455, the Secretary of State shall return an acknowledgment of filing to the cooperative or its representative.
(3) If the Secretary of State refuses to file a document, the Secretary of State shall return it to the cooperative or its representative within 10 business days after the document was delivered together with a brief written explanation of the reason for the refusal.
(4) The Secretary of State’s duty to file documents under this section is ministerial and is limited in scope of review as set out by rule of the Secretary of State. The Secretary of State is not required to verify or inquire into the legality or truth of any matter included in any document delivered to the Office of Secretary of State for filing. The Secretary of State’s filing or refusing to file a document does not:
(a) Affect the validity or invalidity of the document in whole or part; or
(b) Relate to the correctness or incorrectness of information contained in the document.
(5) The Secretary of State’s refusal to file a document does not create a presumption that the document is invalid or that information contained in the document is incorrect. [1987 c.94 §74; 1999 c.486 §8]
62.055 Appeal from Secretary of State’s refusal to file document. If the Secretary of State refuses to file a document delivered to the Office of Secretary of State for filing, the cooperative, in addition to any other legal remedy that may be available, shall have the right to appeal from such order pursuant to the provisions of ORS 183.480. [1987 c.94 §75]
62.060 Evidentiary effect of copy of filed document. (1) A certificate attached to a copy of a document filed by the Secretary of State, bearing the Secretary of State’s signature, which may be in facsimile, is conclusive evidence that the original document, or a facsimile thereof, is on file with the Office of Secretary of State.
(2) The provisions of ORS 56.110 apply to all documents filed pursuant to this chapter. [1987 c.94 §76]
62.065 Certificate of existence. (1) Anyone may apply to the Secretary of State to furnish a certificate of existence for a cooperative.
(2) A certificate of existence when issued means that:
(a) The cooperative’s corporate name is registered in this state;
(b) The cooperative is duly incorporated under the law of this state;
(c) All fees payable to the Secretary of State under this chapter have been paid, if nonpayment affects the existence or authorization of the cooperative;
(d) An annual report required by ORS 62.455 has been filed by the Secretary of State within the preceding 14 months; and
(e) Articles of dissolution have not been filed by the Secretary of State.
(3) A person may apply to the Secretary of State to issue a certificate covering any fact of record.
(4) Subject to any qualification stated in the certificate, a certificate of existence or authorization issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign cooperative is in existence or is authorized to transact business in the state. [1987 c.94 §77; 1995 c.195 §37]
62.110 [Repealed by 1957 c.716 §76]
SUBSTANTIVE PROVISIONS
62.115 Purposes for which cooperatives may be organized. Cooperatives may be organized under this chapter for any lawful purpose or purposes, except for the purpose of banking or insurance. [1957 c.716 §3]
62.120 [Repealed by 1957 c.716 §76]
62.125 General powers. Each cooperative shall have power:
(1) To have perpetual succession unless a limited period of duration is stated in its articles.
(2) To sue and be sued, complain and defend, in its corporate name.
(3) To have a corporate seal which may be altered at pleasure, and to use the seal by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced.
(4) To purchase, take, receive, lease, take by gift, devise or bequest, or otherwise acquire, own, hold, improve, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated.
(5) To sell, convey, mortgage, pledge, lease, exchange, transfer and otherwise dispose of, all or any part of its property and assets.
(6) To purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in, or obligations of, other domestic or foreign cooperatives and corporations, partnerships or individuals, or direct or indirect obligations of the United States or of any other government, state, territory, governmental district or municipality or of any instrumentality thereof.
(7) To make contracts and incur liabilities, borrow money at such rates of interest as the cooperative may determine, issue its notes, bonds, certificates of indebtedness and other obligations, issue certificates representing equity interests in its assets, and secure any of its obligations by mortgage or pledge of all or any of its property, franchises and income.
(8) To lend money for its corporate purposes, invest and reinvest its funds and take and hold real and personal property as security for the payment of funds so loaned or invested.
(9) To conduct its business and affairs and have offices and exercise its powers in any state, territory, district or possession of the United States, or in any foreign country.
(10) To elect or appoint officers and agents, and define their duties and fix their compensation.
(11) To make and alter bylaws, consistent with its articles and the laws of this state, for the administration and regulation of its affairs.
(12) To make donations for the public welfare or for charitable, scientific or educational purposes.
(13) To cease its activities and surrender its franchise.
(14) To have and exercise all powers necessary or convenient to effect any or all of the purposes for which the cooperative is organized. [1957 c.716 §4; 1981 c.542 §1]
62.128 Reserved name. (1) A person may apply to the Office of Secretary of State to reserve a corporate name. The application must set forth the name and address of the applicant and the name proposed to be reserved.
(2) If the Secretary of State finds that the corporate name applied for conforms to ORS 62.131, the Secretary of State shall reserve the name for the applicant for a 120-day period.
(3) A person may transfer the reservation of a corporate name to another person by delivering to the Office of Secretary of State a notice of the transfer executed by the person for whom the name was reserved and specifying the name and address of the transferee. [1969 c.364 §2; 1987 c.94 §79]
62.130 [Repealed by 1957 c.716 §76]
62.131 Cooperative name. (1) The name of a cooperative shall be written in the English language and may include Arabic and Roman numerals and incidental punctuation.
(2) The name of a cooperative shall be distinguishable upon the records of the Office of Secretary of State from any other corporate name, professional corporate name, nonprofit corporate name, cooperative name, limited partnership name, reserved name, registered corporate name or assumed business name of active record with the Office of Secretary of State.
(3) The name of a cooperative need not satisfy the requirement of subsection (2) of this section if the applicant delivers to the Office of Secretary of State a certified copy of a final judgment of a court of competent jurisdiction that finds that the applicant has a prior or concurrent right to use the cooperative name in this state.
(4) The provisions of this section do not prohibit a cooperative from transacting business under an assumed business name.
(5) The provisions of this section do not:
(a) Abrogate or limit the law governing unfair competition or unfair trade practices.
(b) Derogate from the common law, the principles of equity or the statutes of this state or of the United States with respect to the right to acquire and protect trade names. [1987 c.94 §84]
62.135 Bylaws. The initial bylaws of a cooperative shall be adopted by its board of directors. Power to alter, amend or repeal the bylaws or adopt new bylaws is vested in the members of the cooperative. Bylaws may contain any provisions for the regulation and management of the affairs of the cooperative not inconsistent with law or the articles. [1957 c.716 §8]
62.140 [Repealed by 1957 c.716 §76]
62.145 Membership. (1) Membership in a cooperative is conditioned on ownership of a share of membership stock or payment of a membership fee as set forth in the articles. If the articles so provide, the bylaws may authorize a procedure by which the membership fee initially stated in the articles pursuant to ORS 62.513 (1)(c) may be changed without filing amended or restated articles. The bylaws of a cooperative may authorize membership conditioned upon payment of part of the membership fee or payment for part of the membership stock subscribed for and compliance with an agreement to pay the balance.
(2) Qualifications for membership and method of acceptance of members shall be as set forth in the bylaws of the cooperative.
(3) Bylaws may provide for termination of membership and the conditions and terms thereof. [1957 c.716 §9; 1995 c.195 §2]
62.150 [Repealed by 1957 c.716 §76]
62.155 Registered office and registered agent; service of process on cooperative. (1) Each cooperative shall have and continuously maintain in this state:
(a) A registered office which may, but need not be, the same as its place of business.
(b) A registered agent who shall be:
(A) An individual resident in this state whose business office is identical to such registered office;
(B) A domestic corporation, domestic limited liability company, domestic professional corporation or domestic nonprofit corporation having a business office identical to such registered office; or
(C) A foreign corporation, foreign limited liability company, foreign professional corporation or foreign nonprofit corporation authorized to transact business in this state and having a business office identical to such registered office.
(2) A cooperative may change its registered office or registered agent in accordance with the procedure set forth in ORS 60.114.
(3) A person who has been designated by a cooperative as its registered agent may resign in accordance with the procedure set forth in ORS 60.117.
(4) A registered agent appointed by a cooperative is an agent of the cooperative upon whom any process, notice or demand required or permitted by law to be served upon the cooperative may be served.
(5) The provisions of ORS 60.121 are applicable to cooperatives. [1957 c.716 §10; 1987 c.94 §80; 2001 c.315 §26]
62.160 [Repealed by 1957 c.716 §76]
62.165 Actions in excess of authority. No act and no transfer of property to or by a cooperative is invalid because in excess of the cooperative’s power to do such act or make or receive such transfer, except that such lack of power may be asserted in a proceeding by:
(1) A member, shareholder or director against the cooperative to enjoin any act or transfer of property to or by the cooperative. If the unauthorized acts or transfer sought to be enjoined are being, or are to be, performed or made pursuant to any contract to which the cooperative is a party, the court may, if all of the parties to the contract are parties to the proceeding and if it deems the same to be equitable, set aside and enjoin the performance of the contract, and in so doing may allow to the cooperative or to the other parties to the contract, as the case may be, compensation for the loss or damage sustained by either of them which may result from the action of the court in setting aside and enjoining the performance of the contract but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained.
(2) A cooperative, its legal representative, or through its members or shareholders in a representative suit, against the officers or directors or former officers or directors of the cooperative.
(3) The Attorney General against the cooperative in an action to dissolve the cooperative or to enjoin it from the transaction of unauthorized business. [1957 c.716 §11]
62.170 [Repealed by 1957 c.716 §76]
62.175 Capital stock; membership stock. (1) Any cooperative, including a cooperative which requires a membership fee rather than the holding of membership stock as a prerequisite of membership, has power to issue the number of shares of capital stock stated in its articles. Such shares may be divided into more than one class with such designations, preferences, limitations and relative rights as shall be stated in the articles, except that capital stock as such shall have no voting power except as specifically authorized in this chapter.
(2) The articles may require that members own one or more shares of membership stock, and may provide limitations on the issuance and transferability of such stock. Unless restricted by the articles, stock other than membership stock may be issued or transferred without limitation.
(3) Shares having a par value may be issued for such consideration expressed in dollars, not less than the par value thereof, as shall be fixed from time to time by the board. Shares without par value, may be issued for such consideration expressed in dollars as may be fixed for such shares by the board. Payment for shares may be in cash or other property, tangible or intangible. If in other property, the value thereof shall be determined by the board, and such determination, if made in good faith, is conclusive.
(4) No certificate shall be issued for any share until such share is fully paid.
(5) Shareholders as such have no preemptive right to purchase additional shares. [1957 c.716 §12; 1963 c.156 §1]
62.180 [Repealed by 1957 c.716 §76]
62.185 Certificates of stock; contents. Each certificate of stock of a cooperative shall bear the manual or facsimile signature of a principal officer and shall include the following information:
(1) The name of the cooperative, number and class of the shares represented by the certificate, the par value of each share or a statement that the shares are without par value, and if the shares are membership stock, their designation as such.
(2) Any restrictions on the issuance or transfer of such shares.
(3) If more than one class of stock is authorized or if stock is authorized in a cooperative which requires a membership fee of its members, designation of the several classes of stock and the respective preferences, limitations and relative rights of such classes. In lieu of a full statement, the information required by this subsection may be given in summary form. [1957 c.716 §13]
62.190 [Repealed by 1957 c.716 §76]
62.195 Voting by shareholders. (1) A shareholder may vote either in person or by proxy executed in writing by the shareholder or by the duly authorized attorney-in-fact of the shareholder. No proxy shall be valid after 11 months from the date of its execution unless otherwise provided in the proxy. The following provisions, relating to voting of shares, apply to shareholders of cooperatives and shares of the capital stock of cooperatives other than membership stock:
(a) Shares standing in the name of another domestic or foreign cooperative may be voted by such officer, agent or proxy as the bylaws of the cooperative may prescribe, or, in the absence of such provision, as the board of directors of the cooperative may determine.
(b) An administrator, executor, guardian or conservator holding shares may vote the shares, either in person or by proxy, without a transfer of such shares into the name of the administrator, executor, guardian or conservator. Shares standing in the name of a trustee may be voted by the trustee, either in person or by proxy, but no trustee shall be entitled to vote shares held by the trustee without a transfer of the shares into the trustee’s name.
(c) Shares standing in the name of a receiver may be voted by the receiver, and shares held by or under control of a receiver may be voted by the receiver without the transfer thereof into the receiver’s name if authority so to do is contained in an appropriate order of the court by which the receiver was appointed.
(d) A shareholder whose shares are pledged shall be entitled to vote the shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred.
(3) For the purpose of determining shareholders entitled to notice of or to vote at meetings, or entitled to receive payment of any dividend, the bylaws may fix in advance a date as the record date for any such determination of shareholders. Such date shall be not more than 50 days and not less than 10 days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no such record date is fixed by the bylaws, the date on which notice of the meeting is mailed or the date on which the resolution of the board of directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting has been made as provided in this section, such determination shall apply to any adjournment of that meeting. [1957 c.716 §15; 1987 c.94 §81]
62.200 [Repealed by 1957 c.716 §76]
62.205 Subscription agreement for shares or agreement to pay a membership fee; default. (1) A subscription agreement for shares, including membership stock, of a cooperative, where the subscription is entered into before incorporation, or an agreement entered into before incorporation to pay a membership fee is irrevocable for six months unless:
(a) Otherwise provided by the subscription agreement or the agreement to pay a membership fee; or
(b) All subscribers or parties to all the agreements to pay a membership fee consent to the revocation.
(2) If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, or if a party to an agreement to pay a membership fee defaults in the payment of money or property under an agreement to pay a membership fee entered into before incorporation, the cooperative may collect the amount owed as any other debt. Alternatively, unless the subscription agreement or agreement to pay a membership fee provides otherwise, the cooperative may rescind the agreement if the debt remains unpaid more than 20 days after the cooperative sends written demand for payment to the subscriber or the party. [1957 c.716 §16; 1995 c.195 §3]
62.210 [Repealed by 1957 c.716 §76]
62.215 Limitation of liability of members and shareholders. Except for debts lawfully contracted between a member or shareholder and the cooperative, no member or shareholder is liable for the acts or debts of the cooperative to an amount exceeding the sum remaining unpaid on the subscription of the member or shareholder for shares of the cooperative, and the sum remaining unpaid on such member’s membership fee if such fee is required by the cooperative. [1957 c.716 §17; 1995 c.195 §4]
62.220 [Repealed by 1957 c.716 §76]
62.225 Dividends on capital stock. A cooperative organized with capital stock may pay a dividend upon capital stock as is authorized by its articles. A payment under this section shall not be made if the result of the payment would be to bring the value of the cooperative’s remaining assets below the aggregate of the cooperative’s indebtedness. [1957 c.716 §18; 1995 c.195 §5]
62.230 [Repealed by 1957 c.716 §76]
62.235 Recall, exchange or redemption of stock or other evidence of equity by cooperative. (1) Unless the articles provide otherwise, a cooperative may recall membership stock upon termination of membership, acquire, exchange, redeem, and reissue its own shares or other evidences of equity. Consideration paid for shares of membership stock recalled by the cooperative shall be the par value thereof and accrued and unpaid dividends, if any, except that if such shares have no par value the consideration paid therefor shall be the consideration in dollars for which the shares were issued plus accrued and unpaid dividends. The cooperative may set off obligations to it of the holder of membership stock or other stock or other evidence of equity, including capital credits or accounts representing capital credits. The cooperative shall have a continuing perfected security interest in the evidence of equity, capital credits or accounts representing capital credits to secure payment of any indebtedness, whenever incurred, owed to the cooperative by the holder. Notwithstanding any other provision of law, the security interest shall take priority over all other perfected security interests. No such acquisition, recall or redemption of stock or other evidence of equity shall be made if the result thereof would be to bring the value of the remaining assets of the cooperative below the aggregate of its indebtedness. The articles may provide other limitations on the right of a cooperative to acquire, recall, exchange or redeem its shares or other evidences of equity.
(2) When shares are acquired, recalled, exchanged or redeemed by the cooperative, such shares shall be restored to the status of authorized but unissued shares. [1957 c.716 §14; 1993 c.428 §1]
62.240 [Repealed by 1957 c.716 §76]
62.245 Missing certificates or evidence of interest in cooperative; missing records relating to redemption of interest in cooperative. (1) When a certificate of membership in a cooperative or a certificate for a share or shares of membership or capital stock, if certificated, in a cooperative, or other written evidence of the apportionment, distribution and payment of net proceeds or savings of the cooperative, or of any indebtedness or other equity interest in a cooperative, issued by a cooperative is missing, the cooperative shall issue a duplicate thereof upon the request of the owner and upon the furnishing of such indemnity as may be required by the cooperative.
(2) When records showing ownership of membership in a cooperative or of a share or shares of membership or capital stock in a cooperative, or of the apportionment, distribution and payment of net proceeds or savings of the cooperative, or of any indebtedness or other equity interest in a cooperative, are missing and if the information which is missing is necessary to a proposed redemption of any of the items described in this subsection, the cooperative may give notice and redeem the items as follows:
(a) The cooperative shall set aside an amount equal to the value of the items to be redeemed.
(b) The cooperative shall give notice of the redemption to all owners of items of which the cooperative has knowledge.
(c) If there are items the ownership of which is unknown to the cooperative, it shall publish notice of the redemption at least once a month for four months in a newspaper of general circulation in the county in which the registered office of the cooperative is located.
(d) After the completion of the publication, any unclaimed outstanding items represented by the missing records may then be terminated in accordance with the provisions of this chapter dealing with unclaimed distributions, redemptions or proceeds. [1957 c.716 §19; 1995 c.195 §6]
62.250 [Repealed by 1957 c.716 §76]
62.255 Meetings of members. (1) Meetings of members may be held either within or without this state as may be provided in the bylaws, and in the absence of a bylaw provision such meetings shall be held at the principal place of business of the cooperative.
(2) An annual meeting of the members shall be held at such time or within such time as may be provided in the bylaws. If the bylaws do not fix a time for such meeting, the annual meeting shall be held in each calendar year at such time as the board shall determine. Failure to hold the annual meeting at the designated time does not work a forfeiture or dissolution of the cooperative.
(3) Special member meetings may be called by the president or the board; or the secretary shall call such a meeting upon the filing of a petition stating the business to be brought before the meeting signed by not less than 10 percent of the members of the cooperative.
(4) Written or printed notice, stating the place, day and hour, and in case of a special member meeting the purposes for which the meeting is called, shall be given to each member and each shareholder, if shareholders are entitled to vote at such meeting, either personally or by mail not less than seven or more than 30 days before the meeting by direction of the person calling the meeting. If mailed, the notice shall be deemed to be given when deposited in the United States mail addressed to the member or shareholder at the address of the member or shareholder as it appears on the records of the cooperative with postage thereon prepaid. At any meeting at which the members are to be represented by delegates, notice to the members may be given by notifying the delegates and their alternates if any.
(5) A cooperative may provide in its bylaws:
(a) For the formation of districts and the holding of member meetings by districts and that elections of directors may be held at district meetings.
(b) That district meetings may elect delegates who shall represent their districts in annual and special meetings of the members. Notice of district meetings shall be given in the same manner as prescribed in this section for member meetings. [1957 c.716 §20]
62.260 [Repealed by 1957 c.716 §76]
62.265 Voting by members. (1) At any member meeting each member has one vote except that bylaws may authorize voting according to actual, estimated or potential patronage, or a combination of such plans of voting. Shares of stock as such shall not be given voting power except in the specific instances authorized by this chapter.
(2) Members as such shall not vote by proxy; but a member that is a corporation, association or partnership may designate a representative to cast its vote. In the absence of written notice that some person has been designated to represent a member which is other than a natural person, such member may be represented by any of its principal officers. If the bylaws of a cooperative provide for the formation of districts and the election of delegates at district meetings to represent their districts in member meetings, such representation is not considered voting by proxy, and the delegates so elected shall cast the votes to which members represented by them are entitled on such matters as are not covered by mail ballots submitted to all members.
(3) If the bylaws so provide, the board may cause to be submitted by mail ballot any question to be voted on at any member meeting, including the election of directors. In such event the secretary shall mail to each member along with the notice of the meeting, the ballot on each such question and a voting envelope. The ballot may be cast only in a sealed envelope which is authenticated by the member’s signature. A vote so cast shall be counted as if the member were present and voting in person.
(4) The bylaws may set forth provisions, not inconsistent with this chapter, relating to the methods and procedures for voting. [1957 c.716 §21]
62.270 [Repealed by 1957 c.716 §76]
62.275 Quorum of members. (1) Those members present at any annual or special member meeting of a cooperative constitute a quorum at the meeting, unless the bylaws of that cooperative provide that a greater number constitutes a quorum.
(2) Any action taken at a member meeting of a cooperative subsequent to December 31, 1953, and prior to January 1, 1958, which would have been effective except for the absence of a quorum shall be deemed effective in all respects if there were present at such meeting a quorum of members as provided in the bylaws of that cooperative which were in effect at the time of that meeting. [1957 c.716 §22]
62.280 Board of directors. (1) The corporate powers of a cooperative shall be exercised by or under the authority of the board of directors, and the business and affairs of a cooperative shall be managed under the direction of the board of directors. Each director, at all times during the director’s term of office, shall be a member or a representative of a member which is other than a natural person. Unless the bylaws otherwise provide, directors need not be residents of this state. The bylaws may prescribe any other qualifications for directors and may provide that directors be from specified territorial districts. The bylaws may also provide that voting on the election of directors from specified territorial districts may be limited to members from the respective districts without the obligation to hold district meetings.
(2) The number of directors of a cooperative shall be not less than three, unless the number of members of the cooperative is less than three. If the number of members of the cooperative is less than three, the number of directors shall not be less than the number of members of the cooperative. Subject to this limitation, the number of directors shall be fixed or determined by the bylaws, except as to the number constituting the initial board, which number shall be fixed by the articles.
(3) Directors constituting the initial board named in the articles shall hold office until the first annual meeting of the members and until their successors are elected and take office. At that meeting and thereafter, directors shall be elected by the members in the manner and for the term of office, not to exceed three years, provided in the bylaws. Each director shall begin immediately to discharge the duties of director and, subject to resignation or removal, shall hold office for the term for which the director was elected and until a successor takes office.
(4) A director may be removed upon a majority vote of all members voting in person thereon at a duly called member meeting if written reasons for removal of the director are included in the notice of the meeting and the director whose removal is sought has had an opportunity to answer the reasons at the meeting. The written statement of reasons for removal shall be filed with the minutes of the meeting. The bylaws may contain such other provisions for the removal of a director as may be consistent with the provisions of this subsection.
(5) Unless the bylaws provide otherwise, any vacancy occurring in the board may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board. The director elected to fill a vacancy shall be elected for the unexpired term of the director’s predecessor in office. [1957 c.716 §23; 1981 c.542 §2; 1995 c.195 §7]
62.283 Standard of conduct for directors; permissible reliance on opinions and reports of others; limitation of liability. (1) A director shall discharge the duties of a director, including the duties as a member of a committee, in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances and in a manner the director reasonably believes to be in the best interests of the cooperative.
(2) In discharging the duties of a director, a director is entitled to rely on information, opinions, reports or statements including financial statements and other financial data, if prepared or presented by:
(a) One or more officers or employees of the cooperative whom the director reasonably believes to be reliable and competent in the matters presented;
(b) Legal counsel, public accountants or other persons as to matters the director reasonably believes are within the person’s professional or expert competence; or
(c) A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
(3) A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) of this section unwarranted.
(4) A director is not liable for any action taken as a director, or any failure to take any action, if the director performed the duties of the director’s office in compliance with this section.
(5) When evaluating any offer of another party to make a tender or exchange offer for any equity security of the cooperative or any proposal to merge or consolidate the cooperative with another corporation or cooperative or to purchase or otherwise acquire all or substantially all the properties and assets of the corporation or cooperative, the directors of the cooperative may, in determining what they believe to be in the best interests of the cooperative, give due consideration to the social, legal and economic effects on employees, customers and suppliers of the cooperative and on the communities and geographical areas in which the cooperative and its subsidiaries operate, the economy of the state and nation, the long term as well as short term interests of the cooperative and its members, including the possibility that these interests may be best served by the continued independence of the cooperative, and other relevant factors. [1981 c.542 §3; 1995 c.195 §8]
62.284 Director conflict of interest. (1) A conflict of interest transaction is a transaction with the cooperative, other than in the ordinary course of business for which the cooperative is organized, whether or not on a patronage basis, in which a director of the cooperative has a direct or indirect interest. A conflict of interest transaction is not voidable by the cooperative solely because of the director’s interest in the transaction if any one of the following is true:
(a) The material facts of the transaction and the director’s interest were disclosed or known to the board of directors or a committee of the board of directors, and the board of directors or committee authorized, approved or ratified the transaction;
(b) The material facts of the transaction and the director’s interest were disclosed or known to the members entitled to vote and they authorized, approved or ratified the transaction; or
(c) The transaction was fair to the cooperative.
(2) For purposes of this section, a director of the cooperative has an indirect interest in a transaction if:
(a) Another entity in which the director has a material financial interest or in which the director is a general partner is a party to the transaction; or
(b) Another entity of which the director is a director, officer or trustee is a party to the transaction and the transaction is or should be considered by the board of directors of the cooperative.
(3) For purposes of subsection (1)(a) of this section, a conflict of interest transaction is authorized, approved or ratified if it receives the affirmative vote of a majority of the directors on the board of directors, or on the committee, who have no direct or indirect interest in the transaction. A transaction may not be authorized, approved or ratified under this section by a single director, unless only one director is authorized to serve pursuant to ORS 62.280. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under subsection (1)(a) of this section if the transaction is otherwise authorized, approved or ratified as provided in subsection (1) of this section.
(4) For purposes of subsection (1)(b) of this section, a conflict of interest transaction is authorized, approved or ratified if it receives the vote of a majority of the member votes entitled to be counted under this subsection. Any director who is a member who has a direct or indirect interest in the transaction, and any votes by a member under the control of an entity described in subsection (2)(a) of this section may be counted in a vote of members to determine whether to authorize, approve or ratify a conflict of interest transaction under subsection (1)(b) of this section. A majority of the members, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section. [1995 c.195 §9]
62.285 Meetings of board of directors. (1) Regular or special meetings of the board may be held either within or without this state.
(2) Regular meetings of the board may be held with or without notice as prescribed in the bylaws. Special meetings of the board shall be held upon such notice as is prescribed in the bylaws. Attendance of a director at a meeting shall constitute a waiver of notice of the meeting except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.
(3) Unless the bylaws provide otherwise, the purposes of any meeting of the board need not be specified in the notice or waiver of notice of the meeting.
(4) Unless a greater number is required in the bylaws, a majority of the number of directors fixed by or determined pursuant to the bylaws, or in the absence of a bylaw fixing the number of directors, then of the number stated in the articles, shall constitute a quorum for the transaction of business. Unless a greater number is required in the bylaws, an act of the majority of the directors present at a meeting at which a quorum is present is the act of the board. [1957 c.716 §24]
62.286 Loans to or guarantees for directors. (1) Except as provided by subsection (3) of this section, a cooperative may not lend money to or guarantee the obligation of a director of the cooperative unless:
(a) The particular loan or guarantee is approved by a majority of the votes of all the members excluding the votes of any member who is a benefited director; or
(b) The cooperative’s board of directors determines that the loan or guarantee benefits the cooperative and either approves the specific loan or guarantee or a general plan authorizing the loans and guarantees.
(2) The fact that a loan or guarantee is made in violation of this section does not affect the borrower’s liability on the loan.
(3) This section does not apply to loans and guarantees authorized by statute regulating any special class of cooperatives. [1995 c.195 §10]
62.287 Directors’ meeting by conference telephone or similar communications equipment. Unless otherwise restricted by the articles of incorporation or bylaws of a cooperative, members of the board of directors of a cooperative or any committee designated by the board may hold a meeting of the board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this section shall constitute presence in person at the meeting. [1981 c.542 §5]
62.290 Executive committee. (1) If the bylaws so provide, the board may elect an executive committee to consist of three or more directors, which committee to the extent provided in the bylaws of the cooperative shall have and may exercise all the authority of the board in the management of the cooperative, except in respect to:
(a) Apportionment or distribution of net proceeds, savings or losses.
(b) Selection of officers.
(c) Filling of vacancies in the board or the executive committee.
(2) The board may elect other directors as alternates for members of the executive committee.
(3) Designation of an executive committee and the delegation thereto of authority shall not operate to relieve the board or any member thereof of any responsibility imposed upon the board or member by law. [1957 c.716 §25]
62.295 Officers. (1) The principal officers of a cooperative are a president, one or more vice presidents as prescribed in the bylaws, a secretary and a treasurer. These officers shall be elected annually by the board at such time and in such manner as the bylaws provide. The offices of secretary and treasurer may be combined in one person. At least one principal officer must be a director of the cooperative. The manager of a cooperative may hold the office of president or any other office.
(2) The bylaws may provide for a chairperson of the board of directors. The offices of chairperson and president may be combined in one person. However, notwithstanding subsection (1) of this section, a person who is not a director may not serve as chairperson of the board of directors.
(3) Any other officer may be chosen by the board.
(4) All officers shall have such authority and perform such duties as the bylaws provide, or as the board may determine, not inconsistent with the bylaws. Any officer may be removed by the board whenever in its judgment the best interests of the cooperative will be served thereby. Election or appointment shall not of itself create contract rights. [1957 c.716 §26; 1969 c.312 §1; 1981 c.542 §4]
62.300 Compensation and benefits to directors, officers and employees. (1) Unless the bylaws provide otherwise, only the members of the cooperative may establish compensation or other benefits for a director, not available generally to officers and employees, for services as a director.
(2) Unless the bylaws provide otherwise, no director shall hold during the term as director any position in the cooperative on regular salary.
(3) Unless the bylaws provide otherwise, the board may provide, for prior or future services of any officer or employee, reasonable compensation, pension or other benefits to such officer or employee and pension or other benefits to a member of the family of the officer or employee or beneficiaries of the officer or employee. No officer or employee who is a director may take part in any vote on the compensation of the officer or employee for services rendered or to be rendered the cooperative. [1957 c.716 §27]
62.305 Taking action without meeting; effective date of action. Any action required by this chapter to be taken at a meeting of the members or directors of a cooperative, or any other action which may be taken at a meeting of the members, directors or members of the executive committee, and any matter on which shareholders are entitled to vote under this chapter, may be taken without a meeting if a consent in writing setting forth the action so taken is signed by all of the members, directors, executive committee members or shareholders entitled to vote with respect to the subject matter thereof. Such consent shall have the same force and effect as a unanimous vote at a meeting. Unless the consent specifies a different effective date, action taken under this section is effective when the last member, director, member of the executive committee or shareholder entitled to vote, signs the consent. [1957 c.716 §28; 1995 c.195 §11]
62.310 [Repealed by 1957 c.716 §76]
62.315 Waiver of notice. Whenever any notice is required to be given to any member or director of a cooperative under the provisions of this chapter or under the provisions of the articles or bylaws of a cooperative, a waiver thereof in writing signed by the person or persons entitled to the notice, whether before or after the time stated therein, is equivalent to the giving of the notice. [1957 c.716 §29]
62.320 [Repealed by 1957 c.716 §76]
62.325 Voting requirements of articles. Whenever the articles require the vote of a greater proportion of the members or shareholders than required by this chapter, the articles shall control. [1957 c.716 §30]
62.330 [Repealed by 1957 c.716 §76]
62.335 Action brought in right of cooperative by member or shareholder; attorney fees. (1) No action may be instituted or maintained in the right of any cooperative by a member or shareholder unless the member or shareholder:
(a) Alleges in the complaint that the member or shareholder was a member or shareholder of record when any part of the transaction of which complained took place, or that the membership or stock thereafter devolved upon the member or shareholder by operation of law from a member or shareholder at such time.
(b) Alleges in the complaint with particularity the efforts of the member or shareholder to secure from the board such action as desired. The member or shareholder shall further allege that the member or shareholder has either informed the cooperative or board in writing of the ultimate facts of each cause of action against each director or delivered to the cooperative or board a copy of the complaint proposed to be filed. The member or shareholder shall state the reasons for failure to obtain such action or the reasons for not making such effort.
(c) Files a complaint in such action within 20 days after notification given to the cooperative or board as provided by paragraph (b) of this subsection.
(2) The action shall not be dismissed or compromised without the approval of the court.
(3) If anything is recovered or obtained as the result of the action, whether by means of a compromise and settlement or by a judgment, the court may direct the plaintiff to account to the cooperative for the remainder of the proceeds.
(4) In an action brought in the right of a cooperative by fewer than three percent of the members or by holders of less than three percent of any class of stock outstanding, the defendants may require the plaintiff to give security for the reasonable expenses of defending the action, including attorney fees. The amount of the security may thereafter be increased or decreased in the discretion of the court upon showing that the security provided is or may be inadequate or is excessive.
(5) The court may award reasonable attorney fees to the prevailing party in an action under this section. [1957 c.716 §69; 1981 c.897 §15; 1995 c.618 §38]
62.355 Cooperative contracts. (1) Contracts for any of the following purposes, whether contained in the bylaws or separately written, are valid when made between a cooperative and any member in which such member agrees to:
(a) Sell, market or deliver to or through the cooperative or any facilities furnished by it, all or any specified part of products produced or to be produced either by the member or under the control of the member.
(b) Authorize the cooperative or any facilities furnished by it to act for the member in any manner with respect to all or any specified part of such products.
(c) Buy or procure from or through the cooperative or any facilities furnished by it, all or any specified part of goods or services to be bought or procured by the member.
(d) Authorize the cooperative or any facilities furnished by it to act for the member in any manner in the procurement of goods or the procurement or performance of services.
(2) The contract referred to in subsection (1) of this section may fix and require liquidated damages to be paid by the member to the cooperative in the event of breach of the contract by the member. Liquidated damages may be a percentage of the value or a specific amount per unit of the products, goods or services involved by the breach, or a specific sum.
(3) Two or more cooperatives may contract and act in association, corporate or otherwise, to perform collectively any of their powers or purposes authorized by this chapter. [1957 c.716 §32]
62.360 Recording cooperative contracts. (1) A cooperative may record any contract authorized by ORS 62.355 in the office of the county clerk of the county in which the member resides or in which products covered by that contract have been or are to be produced. If the cooperative has substantially uniform contracts with more than one member residing or producing such products in any county, it may, in lieu of recording the original contracts, record:
(a) A true copy of the uniform contract; and
(b) A sworn list or sworn lists of the names of members who have executed such contract and who reside or produce such products in that county, and the effective date of the contract as to each such member.
(2) The county clerk shall record each such contract, and shall record alphabetically in the Cooperative Contract Record the name of each party to that contract. For recording such contract the fee is the same as for recording a contract under ORS 205.320.
(3) Recording pursuant to this section shall operate as constructive notice to all persons of the existence and contents of the contract. Any right, title, interest or lien created as to the products covered by the contract subsequent to such recording is subject to the cooperative’s right, title or interest under that contract. If the member creates any mortgage upon or other security interest in any such products subsequent to such contract recording, and if the member and the mortgagee or secured party jointly notify the cooperative in writing of the existence and amount of the mortgage or other security interest, all payments which after such notice become due from the cooperative to that member by reason of the cooperative’s sale or other handling of those products shall be paid by the cooperative to the mortgagee or other secured interest until the amount of the mortgage or secured party has been paid, and the balance thereafter shall be paid to the member.
(4) When a contract recorded under this section has been terminated in any manner, the cooperative shall give, upon demand, a statement of termination to the member party to the contract, who may record the statement in the office of the county clerk where the contract was originally filed or recorded. The county clerk shall record the termination and index the name of the member in the Cooperative Contract Record. A cooperative may record at any time in the office of the county clerk where the contract was originally filed or recorded, a sworn list of the names of all persons whose contracts have been terminated in any manner other than by expiration of their term, and the county clerk shall record the termination and index the name of each of those persons in the Cooperative Contract Record. The fee for recording and indexing a document under this section is the fee established in ORS 205.320. [1957 c.716 §33; 1965 c.632 §6; 1971 c.621 §12; 1975 c.607 §14; 1979 c.833 §15; 1981 c.835 §5; 1999 c.654 §3]
62.365 Relief against breach or threatened breach of contract; penalty for interference. (1) In the event of a breach or threatened breach of a cooperative contract authorized by ORS 62.355, the cooperative is entitled to an injunction to prevent the breach or any further breach thereof, and to a judgment of specific performance thereof. Upon filing of a verified complaint showing the breach or threatened breach, and upon filing a sufficient bond, the cooperative is entitled to a temporary restraining order.
(2) Any person who, with knowledge that a contract exists, induces or attempts to induce any member to breach the contract with the cooperative, or who in any manner aids a breach of the contract, is liable to the cooperative for damages caused by such interference. The cooperative is also entitled to an injunction to prevent any interference or further interference with the contract. [1957 c.716 §34; 2003 c.576 §324]
62.370 Civil action for inducing breach of contract with cooperative or spreading false reports about cooperative. In addition to the remedies provided in ORS 62.365 (2), any person who knowingly and maliciously induces or attempts to induce any member of a cooperative to breach a contract of the member with the cooperative authorized by ORS 62.355, or who knowingly and maliciously spreads any false report about the finances or management of a cooperative is liable, in a civil action, to the cooperative aggrieved, in the penal sum of $500 for each offense. [1957 c.716 §72]
62.410 [Repealed by 1957 c.716 §76]
62.415 Apportionment and distribution of net proceeds or savings or net losses. (1) The net proceeds or savings of a cooperative shall be apportioned, distributed and paid periodically to those persons entitled to receive them, at such times and in such reasonable manner as the bylaws shall provide; except that net proceeds or savings on patronage of the cooperative by its members shall be apportioned and distributed among those members in accordance with the ratio which each member’s patronage during the period involved bears to total patronage by all members during that period. The bylaws may contain any reasonable provisions for the apportionment and charging of net losses. For the purposes of this section work performed as a member of a workers’ cooperative shall be deemed to be patronage of that cooperative.
(2) The apportionment, distribution and payment of net proceeds or savings required by subsection (1) of this section may be in cash, credits, capital stock, certificates of interest, revolving fund certificates, letters of advice or written evidence of indebtedness or other equity interest issued by the cooperative or by any affiliated domestic or foreign cooperative association whether or not incorporated under this chapter.
(3) Apportionment and distribution of its net proceeds or savings or net losses may be separately determined for, and be based upon patronage of, single or multiple pools, particular departments of the cooperative, or as to particular commodities, supplies or services, or such apportionment and distribution may be based upon classification of patronage according to the type thereof.
(4) A cooperative may provide in its bylaws:
(a) The minimum amount of any single patronage transaction; and
(b) The minimum aggregate amount of patronage transactions by any patron during the fiscal year of the cooperative.
(5) Any amount described in subsection (4) of this section shall be taken into account for the purpose of participation in allocation and distribution of net proceeds or savings or net losses under this section.
(6) For the purposes of this section net proceeds or savings or net losses shall be computed in accordance with generally accepted accounting principles applicable to cooperative corporations, and after deducting from gross proceeds or savings any dividends paid upon capital stock. [1957 c.716 §36; 1963 c.156 §2; 1995 c.79 §15; 1995 c.195 §12]
62.420 [Repealed by 1957 c.716 §76]
62.425 Unclaimed distribution, redemptions or payments. (1) Any distribution of net margins by a cooperative or any redemption of or payment based upon any indebtedness, capital stock of a cooperative or other equity interest which remains unclaimed four years after the date authorized for payment, redemption or retirement may be forfeited by the board. Any amount forfeited may revert to the cooperative, if, at least six months prior to the declared date of forfeiture, notice that the payment is available has been mailed to the last-known address of the person shown by the cooperative’s records to be entitled thereto or, if the address is unknown, is published as provided by ORS 62.245.
(2) This section applies to payments authorized before or after January 1, 1958, except that this section does not authorize the forfeiture prior to January 1, 1959, of any right to any such amount which would not otherwise have been barred prior to January 1, 1959. [1957 c.716 §37; 1987 c.341 §1; 1995 c.195 §13]
62.430 Payments in name of deceased owner of capital credits or retains in cooperative. (1) If authorized by the bylaws, a cooperative may pay the following persons up to $10,000 in redemption or refund of capital credits or retains recorded on the books and records of the cooperative in the name of a deceased owner thereof:
(a) The surviving spouse of the deceased owner;
(b) If there is no surviving spouse, the deceased owner’s surviving children 18 years of age or older;
(c) If the deceased owner left no surviving spouse or surviving children 18 years of age or older, the deceased owner’s surviving parents; or
(d) If there is no surviving spouse, surviving children 18 years of age or older or surviving parent, the deceased owner’s surviving brothers and sisters 18 years of age or older.
(2) The affidavit of the person claiming payment shall:
(a) State where and when the deceased owner died;
(b) State that the total face value of the capital credits or retains of the deceased owner in the cooperative does not exceed $10,000 and that they are free and clear of any security interest or other lien or encumbrance;
(c) Show the relationship of the affiant or affiants to the deceased owner;
(d) Embody a promise to pay the expenses of last sickness, funeral expenses and just debts of the deceased owner out of the capital credits or retains to be redeemed or refunded to the full extent thereof if necessary, and to distribute any balance to those persons entitled thereto by law; and
(e) State any other information deemed appropriate by the cooperative.
(3) A cooperative is under no obligation to determine the relationship of the affiant to the deceased owner, or to determine other than from its books and records whether the deceased owner’s capital credits or retains are subject to a security interest or other lien or encumbrance. Payment made in good faith to the person making the affidavit is a full acquittance and release of the cooperative for the amount so paid.
(4) A probate proceeding is not necessary to establish the right of the surviving spouse, surviving children, surviving parent or surviving brothers and sisters to obtain payment of the capital credits or retains as provided by this section. However, if a personal representative is appointed in an estate of a deceased member or patron whose capital credits or retains have been redeemed or refunded under this section, the person or persons signing the affidavit shall account for them to the personal representative.
(5) Nothing in this section shall abrogate the rights of a cooperative set forth in ORS 62.235, and a cooperative’s right to set off from a deceased owner’s capital credits or retains any debts owed to the cooperative by the deceased owner. This section shall not require that redemption or refund of capital credits or retains be made in accordance with this section, or otherwise limit or affect the manner in which a cooperative may pay, redeem, refund, administer or distribute its net savings, or any retains thereof, capital credits or other equity interests, nor shall it be deemed or construed to impose any further obligation or liability on a cooperative in its payment or redemption of retains in excess of $10,000.
(6) Notwithstanding any provision of this section, if the cooperative’s books and records reflect that the deceased owner’s capital credits or retains are subject to a security interest or other encumbrance, the cooperative shall not be relieved of any liability arising from the security interest or the encumbrance if the redemption or refund of capital credits is made to the person making the affidavit under this section. [1995 c.195 §31; 1999 c.377 §1]
62.435 Sale or other disposition of entire assets. (1) The sale, lease, exchange or other disposition of all, or substantially all, the property and assets of a cooperative, when made in the usual and regular course of the business of the cooperative, may be made on such terms and conditions and for such consideration, which may consist in whole or in part of money or property, real or personal, including shares of any other cooperative, corporation or association, domestic or foreign, as shall be authorized by its board; and in such case no authorization or consent of members or shareholders is required.
(2) A sale, lease, exchange or other disposition of all, or substantially all, the property and assets, with or without the goodwill, of a cooperative, if not made in the usual and regular course of its business, may be made upon such terms and for such consideration, which may consist in whole or in part of money or property, real or personal, including shares of any other cooperative, corporation or association, as may be authorized in the following manner:
(a) The board shall adopt a resolution recommending the sale, lease, exchange or other disposition and directing the submission thereof to a vote at a meeting of members, which may be either an annual or a special meeting, or if there are shareholders the submission shall be to a joint meeting of members and shareholders.
(b) Written or printed notice shall be given to each member and to each shareholder within the time and in the manner provided in ORS 62.255 for the giving of notice of meetings of members, and shall state that the purpose, or one of the purposes, of the meeting is to consider the proposed sale, lease, exchange or other disposition.
(c) At the meeting, the members, by affirmative vote of a majority of the member votes cast thereon, and the shareholders, by affirmative vote of a majority of the shareholder votes entitled to be voted thereon, or in the case of an electric or a telephone cooperative by affirmative vote of two-thirds of all the members and affirmative vote of two-thirds of the shareholder votes entitled to be voted thereon, may approve the sale, lease, exchange or other disposition, and may fix, or may authorize the board to fix, any or all of the terms and conditions thereof and the consideration to be received by the cooperative therefor.
(3) After authorization by votes of members and shareholders, the board nevertheless, in its discretion, may abandon the sale, lease, exchange or other disposition of assets subject to the rights of third parties under any contracts relating thereto, without further action or approval by members or shareholders. [1957 c.716 §48]
62.440 Books and records; attorney fees. (1) A cooperative shall keep correct and complete books and records of account, and shall keep minutes of the proceedings of its members, board and executive committee. It shall keep at its principal office records of the names and addresses of all members and shareholders. At any reasonable time, any member or shareholder, or the agent or attorney of any member or shareholder, upon written notice stating the purposes thereof, may examine for any proper purpose any books or records pertinent to the purpose specified in the notice and may make extracts therefrom, all in accordance with any reasonable conditions prescribed by the board restricting the disclosure, dissemination or use by any member or shareholder, or any agent or attorney of any member or shareholder, of any information therein contained. The board may deny a request to examine books and records if the board determines that the purpose is not directly related to the business or affairs of the cooperative and is contrary to the best interests of the cooperative.
(2) In any action or proceeding to enforce the rights of members or shareholders provided in this section, the court may award reasonable attorney fees to the prevailing party. [1957 c.716 §31; 1981 c.897 §16; 1995 c.195 §14; 1995 c.618 §39]
62.455 Annual report; form; effect of error; amendment. (1) Each cooperative shall by its anniversary deliver to the Office of Secretary of State for filing an annual report that sets forth:
(a) The name of the cooperative.
(b) The street address of its registered office and the name of its registered agent at that office in this state.
(c) The address, including street and number and mailing address, if different, of its principal office.
(d) The names and addresses of the president and secretary of the cooperative.
(e) The category of the classification code established by rule of the Secretary of State most closely designating the primary business activity of the cooperative.
(f) The federal employer identification number of the cooperative.
(g) Additional identifying information that the Secretary of State may require by rule.
(2) The information contained on the annual report shall be current as of 30 days before the anniversary of the cooperative.
(3) The Secretary of State shall mail the annual report form to any address shown for the cooperative in the current records of the Office of Secretary of State. The failure of the cooperative to receive the annual report form from the Secretary of State shall not relieve the cooperative of its duty to deliver an annual report to the Office of Secretary of State as required by this section.
(4) If an annual report does not contain the information required by this section, the Secretary of State shall notify the reporting cooperative in writing and return the report to it for correction. The cooperative must correct the error within 45 days after the Secretary of State gives such notice.
(5) A cooperative may deliver to the Office of Secretary of State for filing an amendment to the annual report if a change in the information set forth in the annual report occurs after the report is delivered to the Office of Secretary of State for filing and before the next anniversary. This subsection applies only to a change that is not required to be made by an amendment to the articles of incorporation. The amendment to the annual report must set forth:
(a) The name of the cooperative as shown on the records of the Office of Secretary of State; and
(b) The information as changed. [1957 c.716 §63; 1963 c.492 §43; 1983 c.717 §25; 1985 c.728 §66; 1987 c.94 §82; 1987 c.843 §16]
62.460 [1981 c.542 §6; repealed by 1995 c.195 §46]
INDEMNIFICATION OF DIRECTORS
62.462 Definitions for ORS 62.462 to 62.482. As used in ORS 62.462 to 62.482:
(1) “Cooperative” includes any domestic or foreign predecessor entity of a cooperative in a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction.
(2) “Director” means an individual who is or was a director of a cooperative or an individual who, while a director of a cooperative, is or was serving at the cooperative’s request as a director, officer, partner, trustee, employee or agent of another foreign or domestic cooperative, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. A director is considered to be serving an employee benefit plan at the cooperative’s request if the director’s duties to the cooperative also impose duties on or otherwise involve services by the director to the plan or to participants in or beneficiaries of the plan. “Director” includes, unless the context requires otherwise, the estate or personal representative of a director.
(3) “Expenses” includes counsel fees.
(4) “Liability” means the obligation to pay a judgment, settlement, penalty or fine, including an excise tax assessed with respect to an employee benefit plan or reasonable expenses incurred with respect to a proceeding.
(5) “Officer” means an individual who is or was an officer of a cooperative or an individual who, while an officer of a cooperative, is or was serving at the cooperative’s request as a director, officer, partner, trustee, employee or agent of another foreign or domestic cooperative, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. An officer is considered to be serving an employee benefit plan at the cooperative’s request if the officer’s duties to the cooperative also impose duties on or include services by the officer to the employee benefit plan or to participants in or beneficiaries of the plan. “Officer” includes, unless the context requires otherwise, the estate or personal representative of an officer.
(6) “Party” includes an individual who was, is or is threatened to be made a named defendant or respondent in a proceeding.
(7) “Proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal. [1995 c.195 §15]
62.464 Authority to indemnify director; report to members. (1) Except as provided in subsection (4) of this section, a cooperative may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if:
(a) The conduct of the individual was in good faith;
(b) The individual reasonably believed that the individual’s conduct was in the best interests of the cooperative, or at least not opposed to its best interests; and
(c) In the case of any criminal proceeding, the individual had no reasonable cause to believe the individual’s conduct was unlawful.
(2) A director’s conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (1)(b) of this section.
(3) The termination of a proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.
(4) A cooperative may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the cooperative in which the director was adjudged liable to the cooperative; or
(b) In connection with any other proceeding charging improper personal benefit to the director in which the director was adjudged liable on the basis that personal benefit was improperly received by the director.
(5) Indemnification permitted under this section in connection with a proceeding by or in the right of the cooperative is limited to reasonable expenses incurred in connection with the proceeding.
(6) If a cooperative indemnifies or advances expenses to a director under this section or ORS 62.466, 62.468 or 62.472 in connection with a proceeding by or in the right of the cooperative, the cooperative shall report the indemnification or advance in writing to the members with or before the notice of the next membership meeting. [1995 c.195 §16]
62.465 [1981 c.542 §7; repealed by 1995 c.195 §46]
62.466 Mandatory indemnification of director. Unless limited by its articles of incorporation, a cooperative shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because of being a director of the cooperative against reasonable expenses incurred by the director in connection with the proceeding. [1995 c.195 §17]
62.468 Advance for expenses. (1) A cooperative may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:
(a) The director furnishes the cooperative a written affirmation of the director’s good faith belief that the director has met the standard of conduct described in ORS 62.464; and
(b) The director furnishes the cooperative a written undertaking, executed personally or on the director’s behalf, to repay the advance if it is ultimately determined that the director did not meet the standard of conduct.
(2) The undertaking required by subsection (1)(b) of this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.
(3) Any authorization of payments under this section may be made by provision in the articles of incorporation, or bylaws, by a resolution of the members or board of directors or by contract. [1995 c.195 §18]
62.470 [1981 c.542 §8; repealed by 1995 c.195 §46]
62.472 Court-ordered indemnification. Unless the cooperative’s articles of incorporation provide otherwise, a director of the cooperative who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines:
(1) The director is entitled to mandatory indemnification under ORS 62.466, in which case the court shall also order the cooperative to pay the director’s reasonable expenses incurred to obtain court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in ORS 62.464 or was adjudged liable as described in ORS 62.464 (4), whether the liability is based on a judgment, settlement or proposed settlement or otherwise. [1995 c.195 §19]
62.474 Determination and authorization of indemnification. (1) A cooperative may not indemnify a director under ORS 62.464 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in ORS 62.464.
(2) A determination that indemnification of a director is permissible shall be made:
(a) By the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(b) If a quorum cannot be obtained under paragraph (a) of this subsection, by a majority vote of a committee duly designated by the board of directors consisting solely of two or more directors not at the time parties to the proceeding. However, directors who are parties to the proceeding may participate in designation of the committee;
(c) By special legal counsel selected by the board of directors or its committee in the manner prescribed in paragraph (a) or (b) of this subsection or, if a quorum of the board of directors cannot be obtained under paragraph (a) of this subsection and a committee cannot be designated under paragraph (b) of this subsection, the special legal counsel shall be selected by majority vote of the full board of directors, including directors who are parties to the proceeding; or
(d) By the members.
(3) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection (2)(c) of this section to select counsel. [1995 c.195 §20]
62.475 [1981 c.542 §9; repealed by 1995 c.195 §46]
62.476 Indemnification of officers, employees and agents. Unless a cooperative’s articles of incorporation provide otherwise:
(1) An officer of the cooperative is entitled to mandatory indemnification under ORS 62.466, and is entitled to apply for court-ordered indemnification under ORS 62.472, in each case to the same extent as a director under ORS 62.466 or 62.472.
(2) The cooperative may indemnify and advance expenses under ORS 62.462 to 62.482 to an officer, employee or agent of the cooperative to the same extent as to a director. [1995 c.195 §21]
62.478 Insurance. A cooperative may purchase and maintain insurance on behalf of an individual against liability asserted against or incurred by the individual who is or was a director, officer, employee or agent of the cooperative or who, while a director, officer, employee or agent of the cooperative, is or was serving at the request of the cooperative as a director, officer, partner, trustee, employee or agent of another foreign or domestic cooperative, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The cooperative may purchase and maintain the insurance even if the cooperative has no power to indemnify the individual against the same liability under ORS 62.464 or 62.466. [1995 c.195 §22]
62.480 [1981 c.542 §10; repealed by 1995 c.195 §46]
62.482 Application of ORS 62.462 to 62.482. (1) The indemnification and provisions for advancement of expenses provided by ORS 62.462 to 62.482 shall not be deemed exclusive of any other rights to which directors, officers, employees or agents may be entitled under the cooperative’s articles of incorporation or bylaws, any agreement, general or specific action of its board of directors, vote of members or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Specifically and not by way of limitation, a cooperative shall have the power to make or agree to make any further indemnification, including advancement of expenses, of:
(a) Any director as authorized by the articles of incorporation, any bylaws approved, adopted or ratified by the members or any resolution or agreement approved, adopted or ratified, before or after such indemnification or agreement is made, by the members, provided that no such indemnification shall indemnify any director from or on account of acts or omissions for which liability could not be eliminated under ORS 62.513 (4)(f); and
(b) Any officer, employee or agent who is not a director as authorized by its articles of incorporation or bylaws, general or specific action of its board of directors or agreement. Unless the articles of incorporation, or any such bylaws, agreement or resolution provide otherwise, any determination as to any further indemnity under this paragraph shall be made in accordance with ORS 62.474.
(2) If articles of incorporation limit indemnification or advance of expenses, any indemnification or advance of expenses is valid only to the extent consistent with the articles of incorporation.
(3) ORS 62.462 to 62.482 do not limit a cooperativ