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1 | AN ACT concerning business.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||||||||||||||||||||||
5 | Illinois Cooperative Act.
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6 | Section 5. Definitions. In this Act:
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7 | "Association" means any corporation organized under this | ||||||||||||||||||||||||||
8 | Act. | ||||||||||||||||||||||||||
9 | "Board" means the board of directors of an association. | ||||||||||||||||||||||||||
10 | "Cooperative" means an association or a foreign | ||||||||||||||||||||||||||
11 | association. | ||||||||||||||||||||||||||
12 | "Entity", except as otherwise provided, means a foreign | ||||||||||||||||||||||||||
13 | association, a foreign or domestic corporation other than a | ||||||||||||||||||||||||||
14 | cooperative, or a foreign or domestic limited liability | ||||||||||||||||||||||||||
15 | company. | ||||||||||||||||||||||||||
16 | "Foreign association" means a corporation organized under | ||||||||||||||||||||||||||
17 | the cooperative laws of another state or the District of | ||||||||||||||||||||||||||
18 | Columbia or a foreign corporation organized under corporation | ||||||||||||||||||||||||||
19 | laws of another state, the District of Columbia, or the United | ||||||||||||||||||||||||||
20 | States that operates on a cooperative basis. | ||||||||||||||||||||||||||
21 | "Marketing agreement" means an agreement, contract, or | ||||||||||||||||||||||||||
22 | other arrangement between a cooperative and a member in which | ||||||||||||||||||||||||||
23 | the member agrees to market all or a part of the products or |
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1 | produce produced by the member, or agrees to purchase all or a | ||||||
2 | part of the member's requirements for inputs, services, or | ||||||
3 | supplies. | ||||||
4 | "Member" means a person who has been qualified and accepted | ||||||
5 | into membership in a cooperative. | ||||||
6 | "Membership stock" means any class of stock or other equity | ||||||
7 | interest in a cooperative, continuous ownership of which is | ||||||
8 | required for membership in the cooperative. | ||||||
9 |
"Patron" means a person with which a cooperative has made | ||||||
10 | an enforceable agreement to allocate and distribute a per unit | ||||||
11 | retain, patronage dividend, or patronage refund with respect to | ||||||
12 | business conducted by the cooperative with or for the person. | ||||||
13 | "Patronage stock" means any stock or other equity interest | ||||||
14 | in a cooperative that was originally issued by the cooperative | ||||||
15 | with respect to patronage transactions. | ||||||
16 | "Person" includes a natural person, partnership, | ||||||
17 | corporation, cooperative, or other entity. | ||||||
18 | "Producer" means a person engaged in the production of | ||||||
19 | agricultural products for the market.
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20 | Section 10. Purposes; deemed not-for-profit. | ||||||
21 | (a) An association may be organized under this Act for any | ||||||
22 | lawful purpose permitted to corporations by the laws of this | ||||||
23 | State, except any such purpose that is inconsistent with the | ||||||
24 | provisions of this Act, the Business Corporation Act of 1983, | ||||||
25 | or the General Not For Profit Corporation Act of 1986. This |
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1 | Section does not authorize any professional services otherwise | ||||||
2 | prohibited by law. | ||||||
3 | (b) Associations shall be corporations that are deemed | ||||||
4 | not-for-profit because they are not organized for the purpose | ||||||
5 | of making a profit for themselves as such, or for the purpose | ||||||
6 | of making a profit for their members as such, but for their | ||||||
7 | members as patrons. This Act and not the General Not For Profit | ||||||
8 | Corporation Act of 1986 shall govern associations. | ||||||
9 | (c) A municipal power agency organized under the Illinois | ||||||
10 | Municipal Code is not an association for the purposes of this | ||||||
11 | Act.
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12 | Section 15. Powers of an association.
An association | ||||||
13 | incorporated under this Act shall have the following powers: | ||||||
14 | (1) It may make contracts, incur liabilities, and borrow | ||||||
15 | money; issue capital stock and other equity interests and issue | ||||||
16 | certificates therefor; acquire property; and dispose of, | ||||||
17 | mortgage, pledge, lease, or otherwise use in any manner, any of | ||||||
18 | its property, or any interest in its property, wherever | ||||||
19 | situated. | ||||||
20 | (2) It may invest its funds, lend money for its purposes, | ||||||
21 | and hold any property as security for repayment. | ||||||
22 | (3) It may act as the agent or representative of any | ||||||
23 | members or other patrons in any activities authorized by this | ||||||
24 | Act. | ||||||
25 | (4) It may conduct its business and affairs, have offices, |
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1 | and exercise its power in the United States or in any foreign | ||||||
2 | country. | ||||||
3 | (5) It may establish reserves and invest these funds. | ||||||
4 | (6) It may buy, hold, and exercise all privileges of | ||||||
5 | ownership over such real or personal property as is necessary, | ||||||
6 | convenient, or incidental to the conduct of any authorized | ||||||
7 | business of the association. | ||||||
8 | (7) It may establish, secure, own, and develop patents, | ||||||
9 | trademarks, copyrights, service marks, and other intellectual | ||||||
10 | property. | ||||||
11 | (8) Notwithstanding the provisions of the Uniform | ||||||
12 | Disposition of Unclaimed Property Act, it may effectuate the | ||||||
13 | forfeiture of any unclaimed stock or other equity interests, | ||||||
14 | dividends, and patronage allocations, for which the owner | ||||||
15 | cannot be found after a period of 3 years. Notice of the | ||||||
16 | existence of unclaimed stock or other equity interests and a | ||||||
17 | request for written acknowledgment from the owner to the | ||||||
18 | association shall be evidence of a bona fide attempt to deliver | ||||||
19 | the unclaimed stock or other equity interests to the owner. If | ||||||
20 | the notice is not acknowledged within 30 days after the notice | ||||||
21 | is sent or within the period specified in the notice, if | ||||||
22 | longer, all such unclaimed stock or other equity interests | ||||||
23 | specified in the notice are forfeited and become the property | ||||||
24 | of the association. | ||||||
25 | (9) It may make donations for charitable, scientific, | ||||||
26 | educational, community development, or religious purposes, and |
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1 | may use all or part of the funds forfeited to the association | ||||||
2 | under item (8) for these purposes. | ||||||
3 | (10) It may do everything necessary, suitable, or proper | ||||||
4 | for the accomplishment of any of the purposes enumerated in | ||||||
5 | this Section. In addition it may exercise and possess all | ||||||
6 | powers, rights, and privileges necessary or incidental to the | ||||||
7 | purposes for which the association is organized or to the | ||||||
8 | activities in which it is engaged, and any other powers, | ||||||
9 | rights, and privileges granted to corporations by the laws of | ||||||
10 | this State, except as are inconsistent with the express | ||||||
11 | provisions of this Act.
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12 | Section 20. Use of words in name; prohibition.
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13 | (a) The name of any association organized under this Act | ||||||
14 | shall include the word or abbreviation "cooperative," "coop," | ||||||
15 | "co-operative", "co-op", "association", "assn.", "company", | ||||||
16 | "co.", "incorporated", "inc.", "corporation", or "corp.". | ||||||
17 | (b) No corporation or other person organized or applying to | ||||||
18 | do business in this State shall use the word or abbreviation | ||||||
19 | "cooperative," "coop," "co-operative," or "co-op" as a part of | ||||||
20 | its corporate or other business name or title, unless at least | ||||||
21 | one of the following applies: | ||||||
22 | (1) It is organized under this Act or has converted to | ||||||
23 | an association under this Act. | ||||||
24 | (2) It is organized and operating on a cooperative | ||||||
25 | basis under the General Not For Profit Corporation Act of |
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1 | 1986 or the Agricultural Co-Operative Act, or it is | ||||||
2 | organized and operating for the purpose of ownership or | ||||||
3 | administration of residential property on a cooperative | ||||||
4 | basis. | ||||||
5 | (3) It is organized and operating in accordance with | ||||||
6 | the cooperative laws of another state, the District of | ||||||
7 | Columbia, or the United States. | ||||||
8 | (4) It is a state or federally chartered credit union.
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9 | Section 25. Number of incorporators; statutory agent. | ||||||
10 | (a) Two or more individuals may form an association under | ||||||
11 | this Act. | ||||||
12 | (b) An association shall have and maintain a statutory | ||||||
13 | agent upon whom any process, notice, or demand against the | ||||||
14 | association may be served. The agent shall be one of the | ||||||
15 | following: | ||||||
16 | (1) A natural person who is a resident of this State. | ||||||
17 | (2) A domestic or foreign corporation, not-for-profit | ||||||
18 | corporation, limited liability company, partnership, | ||||||
19 | limited partnership, limited liability partnership, | ||||||
20 | limited partnership association, professional association, | ||||||
21 | business trust, or unincorporated not-for-profit | ||||||
22 | association that has a business address in this State. If | ||||||
23 | the agent is an entity other than a domestic corporation, | ||||||
24 | the agent shall meet the requirements of Illinois law for | ||||||
25 | an entity of the agent's type to transact business or |
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1 | exercise privileges in this State. | ||||||
2 | (c) Whenever appointment or designation of a statutory | ||||||
3 | agent is required by this Act, the appointment or designation | ||||||
4 | shall be on a form prescribed by the Secretary of State for the | ||||||
5 | administration of this Act.
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6 | Section 30. Articles of incorporation.
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7 | (a) The articles of incorporation of an association shall | ||||||
8 | set forth all of the following: | ||||||
9 | (1) The name of the association. | ||||||
10 | (2) The association's purposes, as permitted by this | ||||||
11 | Act. It is sufficient to state in the articles that the | ||||||
12 | association may engage in any activity within the purposes | ||||||
13 | for which associations may be organized under this Act. | ||||||
14 | (3) The county and municipal corporation or township | ||||||
15 | where the association's principal place of business will be | ||||||
16 | located which need not be within this State. | ||||||
17 | (4) The names and addresses of the incorporators. | ||||||
18 | (5) The number of its directors or a statement that the | ||||||
19 | number of directors shall be as specified in the bylaws. | ||||||
20 | (6) The names and addresses of those who are to serve | ||||||
21 | as directors until the first meeting of members or until | ||||||
22 | the election and qualification of their successors. | ||||||
23 | (7) Whether the association is organized with or | ||||||
24 | without capital stock and: | ||||||
25 | (A) if the association is organized without |
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1 | capital stock, the articles shall set forth the general | ||||||
2 | rules by which the property rights and interests of | ||||||
3 | each member are to be determined; and | ||||||
4 | (B) if the association is organized with capital | ||||||
5 | stock, the total amount of the stock, the number and | ||||||
6 | par value of the shares, and dividend rights, if any;
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7 | if there is more than one class of stock, the articles | ||||||
8 | shall set forth a statement of the number of shares in | ||||||
9 | each class and a statement of the designations, | ||||||
10 | preferences, rights, and limitations of the shares in | ||||||
11 | each class. | ||||||
12 | (b) The articles may include additional provisions, | ||||||
13 | consistent with law, including provisions that are required or | ||||||
14 | permitted to be set forth in the bylaws. | ||||||
15 | (c) The articles shall be signed by the incorporators and | ||||||
16 | filed with the Secretary of State in accordance with Section | ||||||
17 | 55. The articles shall be accompanied by the appointment of a | ||||||
18 | statutory agent in accordance with Section 25. The legal | ||||||
19 | existence of an association begins upon the filing of the | ||||||
20 | articles and, unless the articles provide otherwise, its period | ||||||
21 | of existence is perpetual.
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22 | Section 35. Amendment or restatement of articles. | ||||||
23 | (a) The articles of incorporation of an association may be | ||||||
24 | altered or amended at any regular meeting of the association or | ||||||
25 | at any special meeting called for that purpose, provided that |
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1 | the text of the proposed change, or a general description of | ||||||
2 | the change, is contained in the notice of the meeting. An | ||||||
3 | amendment shall first be approved by two-thirds of the | ||||||
4 | directors and shall then be adopted by an affirmative vote of | ||||||
5 | 60% of the member votes cast on the amendment or, if the | ||||||
6 | articles provide or permit, by the affirmative vote of a | ||||||
7 | greater majority or by the affirmative vote of a simple | ||||||
8 | majority of all member votes eligible to be cast on the | ||||||
9 | amendment. | ||||||
10 | (b) Amendments to the articles of incorporation, when so | ||||||
11 | adopted, shall be filed in accordance with Section 55. | ||||||
12 | (c) The board of an association may adopt a restatement of | ||||||
13 | the articles without a member vote if the restatement merely | ||||||
14 | incorporates amendments previously approved by the board and | ||||||
15 | adopted by the members. An association may, by action taken in | ||||||
16 | the manner required for an amendment, adopt restated articles | ||||||
17 | that contain amendments made at the time of the restatement. | ||||||
18 | Restated articles shall state that they are restated, or | ||||||
19 | restated and amended, if amendments are adopted with the | ||||||
20 | restatement, and shall supersede the existing articles and | ||||||
21 | amendments. Restated articles shall meet the requirements of | ||||||
22 | Section 30, except that the names and addresses of the | ||||||
23 | incorporators and initial directors may be omitted. A | ||||||
24 | restatement of the articles shall be filed in the manner | ||||||
25 | prescribed for an amendment of the articles. | ||||||
26 | (d) Except as provided in the articles of incorporation, |
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1 | the board may adopt an amendment to the articles of | ||||||
2 | incorporation without a member vote in any of the following | ||||||
3 | cases: | ||||||
4 | (1) to change the principal place of business of the | ||||||
5 | association;
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6 | (2) to designate and determine the rights and | ||||||
7 | restrictions of a series within a class of capital stock, | ||||||
8 | if permitted by the articles; | ||||||
9 | (3) to reduce the authorized number of shares of any | ||||||
10 | class or series of capital stock to any number down to and | ||||||
11 | including the number of the shares issued and outstanding, | ||||||
12 | and to assign the authorization for the number of shares so | ||||||
13 | reduced to another class or classes of capital stock | ||||||
14 | previously authorized; | ||||||
15 | (4) after a merger, consolidation, conversion, | ||||||
16 | division, or occurrence of any other contingent event | ||||||
17 | referred to in the articles of incorporation, to eliminate | ||||||
18 | from the articles any statement or provision pertaining | ||||||
19 | exclusively to the merger, consolidation, conversion, | ||||||
20 | division, or occurrence, and to make other changes required | ||||||
21 | by such elimination, but only after the deleted item has | ||||||
22 | been superseded in accordance with the articles of | ||||||
23 | incorporation or otherwise is no longer in effect.
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24 | Section 40. Voting on amendment. | ||||||
25 | (a)(1) Unless the board provides that division (a)(3) of |
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1 | this Section applies to an amendment to the articles of | ||||||
2 | incorporation, a holder of stock other than membership stock or | ||||||
3 | patronage stock who is affected by a proposed amendment to the | ||||||
4 | articles shall be entitled to cast one vote on the amendment | ||||||
5 | regardless of the par or stated value of the stock, the number | ||||||
6 | of shares, or the number of affected classes of stock held. | ||||||
7 | (2) A member holding stock affected by a proposed amendment | ||||||
8 | may vote only as a member and shall not be entitled to vote or | ||||||
9 | demand fair cash value as an affected stockholder. | ||||||
10 | (3) The board may provide that a stockholder otherwise | ||||||
11 | entitled to vote under division (a)(1) of this Section shall | ||||||
12 | instead be entitled to payment of fair cash value of the | ||||||
13 | affected stock held by such stockholder in accordance with | ||||||
14 | Section 170. | ||||||
15 | (b) For purposes of this Section, a holder of stock is | ||||||
16 | affected as to any class of stock owned by the holder only if | ||||||
17 | an amendment would expressly do any of the following: | ||||||
18 | (1) decrease the dividends to which that class may be | ||||||
19 | entitled or change the method by which the dividend rate on | ||||||
20 | that class is fixed; | ||||||
21 | (2) further restrict rights to transfer that class; | ||||||
22 | (3) give to another existing or any new class of stock | ||||||
23 | or equity interest not previously entitled thereto any | ||||||
24 | preference, as to dividends or upon dissolution, that is | ||||||
25 | higher than preferences of that class; | ||||||
26 | (4) change the par value of shares of that class or of |
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1 | any other class having the same or higher preferences as to | ||||||
2 | dividends or upon dissolution; | ||||||
3 | (5) increase the number of authorized shares of any | ||||||
4 | class having a higher preference as to dividends or upon | ||||||
5 | dissolution; or | ||||||
6 | (6) require or permit an exchange of shares of any | ||||||
7 | class with lower preferences as to dividends or upon | ||||||
8 | dissolution for shares of any other class with higher | ||||||
9 | preferences. | ||||||
10 | (c) If any proposed amendment will alter or change the | ||||||
11 | powers, preferences, or special rights of one or more series of | ||||||
12 | any class so as to affect them adversely, but shall not so | ||||||
13 | affect the entire class, then only the shares of the series so | ||||||
14 | affected by the amendment shall be considered a separate class | ||||||
15 | for the purposes of subsection (b) of this Section. | ||||||
16 | (d) If stockholders are entitled to vote on an amendment, | ||||||
17 | the amendment is adopted only if all of the following | ||||||
18 | conditions are met: | ||||||
19 | (1) notice of the meeting, an exact copy of the | ||||||
20 | proposed amendment, and a ballot on the amendment have been | ||||||
21 | sent to each affected stockholder; | ||||||
22 | (2) approval by the members under Section 35; and | ||||||
23 | (3) approval by a simple majority of the affected | ||||||
24 | stockholders present and voting at a meeting of the | ||||||
25 | stockholders. | ||||||
26 | (c) This Section does not apply to stock issued prior to |
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1 | the effective date of this Act, unless the association adopts | ||||||
2 | an amendment to its articles of incorporation making the stock | ||||||
3 | subject to this Section. As to such stock, an amendment shall | ||||||
4 | first be approved by two-thirds of the directors and shall then | ||||||
5 | be adopted by a vote representing a majority of all the members | ||||||
6 | of the association.
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7 | Section 45. Evidence of incorporation. | ||||||
8 | (a) A copy of the association's articles of incorporation | ||||||
9 | or amended articles filed in the office of the Secretary of | ||||||
10 | State, and certified by the Secretary of State, is conclusive | ||||||
11 | evidence, except as against the State, that the association has | ||||||
12 | been incorporated under the laws of this State; and a copy | ||||||
13 | certified by the Secretary of State of any certificate of | ||||||
14 | amendment or other certificate is prima-facie evidence of such | ||||||
15 | amendment or of the facts stated in the certificate, and of the | ||||||
16 | observance and performance of all antecedent conditions | ||||||
17 | necessary to the action that the certificate purports to | ||||||
18 | evidence. | ||||||
19 | (b) A copy of amended articles filed in the office of the | ||||||
20 | Secretary of State, and certified by the Secretary of State, | ||||||
21 | shall be accepted in this State and other jurisdictions in lieu | ||||||
22 | of the original articles, amendments to the articles, and prior | ||||||
23 | amended articles. | ||||||
24 | (c) The original or a copy of the record of minutes of the | ||||||
25 | proceedings of the incorporators of an association, or of the |
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1 | proceedings or meetings of the members or any class of | ||||||
2 | stockholders, or of the directors, or of any committee thereof, | ||||||
3 | including any written consent, waiver, release, or agreement | ||||||
4 | entered in such record or minutes, or the original or a copy of | ||||||
5 | a statement that no specified proceeding was had or that no | ||||||
6 | specified consent, waiver, release, or agreement exists, | ||||||
7 | shall, when certified to be true by the secretary or an | ||||||
8 | assistant secretary of an association, be received in the | ||||||
9 | courts as prima-facie evidence of the facts stated therein. | ||||||
10 | Every meeting referred to in the certified original or copy is | ||||||
11 | considered duly called and held, and all motions and | ||||||
12 | resolutions adopted and proceedings had at the meeting are | ||||||
13 | considered duly adopted and had, and all elections of directors | ||||||
14 | and all elections or appointments of officers chosen at the | ||||||
15 | meeting are considered valid, until the contrary is proved; and | ||||||
16 | whenever a person who is not a member, patron, or stockholder | ||||||
17 | of an association has acted in good faith in reliance upon any | ||||||
18 | such certified original or copy, it is conclusive in that | ||||||
19 | person's favor.
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20 | Section 50. Reinstatement of association.
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21 | (a) An association whose articles of incorporation have | ||||||
22 | been canceled or an association that has been dissolved in a | ||||||
23 | manner other than for a voluntary dissolution as provided in | ||||||
24 | Section 180, or a judicial dissolution, may be reinstated by | ||||||
25 | filing, on a form prescribed by the Secretary of State for the |
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1 | administration of this Act, an application for reinstatement | ||||||
2 | and the required appointment of a statutory agent, and by | ||||||
3 | paying a filing fee of $10. | ||||||
4 | (b) Upon reinstatement of an association's articles of | ||||||
5 | incorporation, the rights, privileges, and franchises, | ||||||
6 | including all real or personal property rights and credits and | ||||||
7 | all contract and other rights, of the association existing at | ||||||
8 | the time that its articles were canceled or the dissolution | ||||||
9 | became effective shall continue in effect as if the articles | ||||||
10 | had not been canceled or the dissolution had not occurred; and | ||||||
11 | the association shall again be entitled to exercise the rights, | ||||||
12 | privileges, and franchises authorized by its articles.
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13 | Section 55. Filing articles and certificates of amendment.
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14 | (a) For filing articles of incorporation or a certificate | ||||||
15 | of amendment of articles or a certificate of merger, | ||||||
16 | consolidation, division, or dissolution, an association | ||||||
17 | organized under this Act shall pay to the Secretary of State | ||||||
18 | the same fees required of corporations organized under the | ||||||
19 | Business Corporation Act of 1983. In the case of a certificate | ||||||
20 | of division, the filing fee shall be the same as for a | ||||||
21 | certificate of merger or consolidation. | ||||||
22 | (b) When the articles of incorporation, or a certificate of | ||||||
23 | amendment of articles, or a certificate of merger, | ||||||
24 | consolidation, conversion, division, or dissolution is filed | ||||||
25 | with the Secretary of State, the Secretary of State shall, if |
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1 | the articles or certificate complies with this Act, endorse | ||||||
2 | approval thereon, the date of filing, a file number, and make a | ||||||
3 | legible copy thereof by any authorized method. The original or | ||||||
4 | a copy of the articles or certificate, certified by the | ||||||
5 | Secretary of State, shall be returned to the person filing the | ||||||
6 | articles or certificate, who shall within 15 days file such | ||||||
7 | document for record in the office of the recorder of the county | ||||||
8 | in which the registered office of the corporation in this State | ||||||
9 | is situated. | ||||||
10 | (c) All persons shall have the opportunity to acquire a | ||||||
11 | copy of the articles and other certificates filed and recorded | ||||||
12 | in the office of the Secretary of State, but no person dealing | ||||||
13 | with the association shall be charged with constructive notice | ||||||
14 | of the contents of any such articles or certificates by reason | ||||||
15 | of the filing or recording.
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16 | Section 60. Dividends; stock; security interest.
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17 | (a) An association may pay dividends annually on its | ||||||
18 | capital stock at a rate not exceeding 8% of its par value for | ||||||
19 | any year, but dividends may be cumulative. The realized net | ||||||
20 | earnings of the cooperative, to the extent attributable to | ||||||
21 | business done with or for its patrons, shall be allocated and | ||||||
22 | distributed among patrons in proportion to their patronage and | ||||||
23 | in such manner and at such time as to constitute patronage | ||||||
24 | dividends within the meaning of federal income tax law. | ||||||
25 | (b) Notwithstanding subsection (a), the articles or bylaws |
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1 | may provide for any of the following: | ||||||
2 | (1) that eligibility for patronage dividends is | ||||||
3 | limited to members or to members in good standing; | ||||||
4 | (2) that the net earnings of the cooperative shall be | ||||||
5 | retained for the capital and development needs of the | ||||||
6 | cooperative and the improvement and extension of its | ||||||
7 | services; | ||||||
8 | (3) that the number of allocation units of the | ||||||
9 | cooperative shall be limited in any reasonable and | ||||||
10 | equitable manner; or | ||||||
11 | (4) that patronage-sourced net operating losses of the | ||||||
12 | cooperative shall not be allocated to patrons but shall be | ||||||
13 | carried forward to offset patronage-sourced net earnings | ||||||
14 | of subsequent years. | ||||||
15 | (c) An association, at any time, may purchase its own | ||||||
16 | common stock at par or book value as determined by the board. | ||||||
17 | (d) An association shall have a continued perfected | ||||||
18 | security interest in its membership stock and patronage stock | ||||||
19 | to secure payment of any indebtedness or other obligation of | ||||||
20 | the holder or owner to the association. Notwithstanding | ||||||
21 | Articles 8 and 9 of the Uniform Commercial Code, the security | ||||||
22 | interest shall have priority over all other perfected security | ||||||
23 | interests. Unless otherwise provided in the association's | ||||||
24 | articles of incorporation or bylaws, or by contract, a member | ||||||
25 | or other patron has no right to compel an association to offset | ||||||
26 | its membership stock or patronage stock against any |
| |||||||
| |||||||
1 | indebtedness or obligation owed to the association.
| ||||||
2 | Section 65. Bylaws. An association shall adopt bylaws that | ||||||
3 | are not inconsistent with this Act or the association's | ||||||
4 | articles of incorporation. The bylaws may provide for any of | ||||||
5 | the following: | ||||||
6 | (1) The time, place, and manner of calling and | ||||||
7 | conducting the association's meetings. | ||||||
8 | (2) The number of members constituting a quorum. If | ||||||
9 | voting by any method other than personal appearance is | ||||||
10 | used, members represented by a ballot may be counted in | ||||||
11 | computing a quorum only on those matters for which the | ||||||
12 | ballots were submitted. | ||||||
13 | (3) The right of members to vote by ballot delivered in | ||||||
14 | person, by mail, by electronic or telephonic transmittal, | ||||||
15 | or any combination of these, and the conditions, manner, | ||||||
16 | form, and effect of such votes. | ||||||
17 | (4) Subject to the provisions of Section 75, a method | ||||||
18 | of voting by members or delegates, and any limitations on | ||||||
19 | voting rights of any group or class of members or | ||||||
20 | delegates. | ||||||
21 | (5) The number of directors constituting a quorum. | ||||||
22 | (6) The number, qualifications, compensation, duties, | ||||||
23 | and terms of office of directors and officers, and the time | ||||||
24 | of their election and the manner of giving notice of the | ||||||
25 | election. |
| |||||||
| |||||||
1 | (7) Penalties for violation of the bylaws. | ||||||
2 | (8) The amounts of entrance, organization, and | ||||||
3 | membership fees, if any, the manner of collecting them, and | ||||||
4 | the purposes for which they may be used, or the par value | ||||||
5 | and number of shares required for membership, if any. | ||||||
6 | (9) Any amount that each member is required to pay | ||||||
7 | annually or from time to time to carry on the business of | ||||||
8 | the association; any charge to be paid by each member for | ||||||
9 | services rendered by the association, and the time of | ||||||
10 | payment and the manner of collection of such charge; and | ||||||
11 | any marketing contract between the association and its | ||||||
12 | members that members may be required to sign. | ||||||
13 | (10) The number and qualifications of members of the | ||||||
14 | association and the conditions of membership or for | ||||||
15 | ownership of membership stock in the association. | ||||||
16 | (11) The time and manner of permitting members to | ||||||
17 | withdraw or the holders of membership stock to transfer | ||||||
18 | their stock; and the manner of assignment and transfer of | ||||||
19 | membership stock. | ||||||
20 | (12) The conditions upon which, and the time when, the | ||||||
21 | membership of any member ceases; and the suspension of the | ||||||
22 | rights of a member who ceases to be eligible for membership | ||||||
23 | in the association. | ||||||
24 | (13) The manner and effect of the expulsion of a | ||||||
25 | member. | ||||||
26 | (14) In the event of the death or withdrawal of a |
| |||||||
| |||||||
1 | member or upon the expulsion of a member or the forfeiture | ||||||
2 | of membership, any of the following: | ||||||
3 | (A) the manner of determining the value of a | ||||||
4 | member's interest; | ||||||
5 | (B) provision for the purchase of a member's | ||||||
6 | interest by the association; or | ||||||
7 | (C) at the option of the association, provision for | ||||||
8 | such purchase at a price fixed by appraisal by the | ||||||
9 | board of directors of the association. | ||||||
10 | (15) Any other provision for any matter relative to the | ||||||
11 | control, regulation, operation, management, or government | ||||||
12 | of the association.
| ||||||
13 | Section 70. Adoption, amendment, or repeal of bylaws.
| ||||||
14 | (a) The initial bylaws may be adopted by the association's | ||||||
15 | directors who are to serve until the first member meeting. | ||||||
16 | After the initial bylaws are adopted, bylaws may be adopted and | ||||||
17 | amended only by the members unless the articles or bylaws | ||||||
18 | provide that the board, by a two-thirds vote of the entire | ||||||
19 | board, may adopt or amend the bylaws or any specified bylaw. | ||||||
20 | (b) Any bylaw adopted or amended by the board shall be | ||||||
21 | reported at the next member meeting. Any bylaw adopted or | ||||||
22 | amended by the board shall not conflict with the association's | ||||||
23 | articles of incorporation or with this Act. Any bylaw is | ||||||
24 | subject to amendment or repeal by the members at any time. | ||||||
25 | (c) Unless the bylaws provide otherwise, any bylaw may be |
| |||||||
| |||||||
1 | adopted, amended, or repealed by a majority of the member votes | ||||||
2 | cast on the adoption, amendment, or repeal.
| ||||||
3 | Section 75. Members or delegates entitled to vote.
| ||||||
4 | (a) A member entitled to vote shall have one vote, except | ||||||
5 | that the articles or bylaws of the association may permit the | ||||||
6 | following: | ||||||
7 | (1) voting by members in accordance with the amount of | ||||||
8 | business done with or through the association; | ||||||
9 | (2) voting by delegates, including a voting system that | ||||||
10 | provides any one or a combination of the following: | ||||||
11 | (A) that a delegate may cast only one vote; | ||||||
12 | (B) that a delegate may cast one vote for each | ||||||
13 | member represented by the delegate; or | ||||||
14 | (C) that another form of delegate voting may be | ||||||
15 | used.
| ||||||
16 | (3) Voting by delegates or certain members on matters | ||||||
17 | that are to be submitted to a member vote. | ||||||
18 | (4) Voting by any combination of the methods set forth | ||||||
19 | in this subsection or any other method of voting set forth | ||||||
20 | in the bylaws, provided the association is controlled by | ||||||
21 | the members. | ||||||
22 | (b) If the articles or bylaws provide that only delegates | ||||||
23 | or certain members are entitled to vote on matters to be | ||||||
24 | submitted to a member vote, "member" or "members", as used in | ||||||
25 | this Act with respect to the right of a member to vote, voting |
| |||||||
| |||||||
1 | procedure, the required proportion of member votes, actions | ||||||
2 | that are required or permitted to be taken by members, and the | ||||||
3 | number of members required for a quorum, means the delegates or | ||||||
4 | other members entitled to vote. When voting is based on the | ||||||
5 | amount of business done, provisions of this Act requiring a | ||||||
6 | vote of the members are met if the required membership vote is | ||||||
7 | satisfied based on the voting power of the members.
| ||||||
8 | Section 80. Members; meetings.
| ||||||
9 | (a) An association shall have 2 or more members. However, | ||||||
10 | an association may have one member if that member is a | ||||||
11 | cooperative that has 2 or more members. | ||||||
12 | (b) An association shall hold an annual meeting of its | ||||||
13 | members. The board may call a special meeting of the members at | ||||||
14 | any time. Any meeting of the members may be held at one time or | ||||||
15 | in a series of meetings at one or more locations. | ||||||
16 | (c) Twenty per cent of the members entitled to vote may | ||||||
17 | file with the board a petition stating any proper business to | ||||||
18 | be brought before the association and demanding a special | ||||||
19 | meeting at any time for consideration of such business. Upon | ||||||
20 | compliance with this Section, the meeting shall be called by | ||||||
21 | the board. | ||||||
22 | (d) Notice of every meeting, together with a statement of | ||||||
23 | the purpose of the meeting, shall be sent to each member who is | ||||||
24 | entitled to vote at the meeting and any affected stockholder at | ||||||
25 | the member's or stockholder's current address, as shown in the |
| |||||||
| |||||||
1 | records of the association, at least 10 days prior to the | ||||||
2 | meeting, in accordance with Section 85. The bylaws may provide | ||||||
3 | that the notice be given by publication in a newspaper or | ||||||
4 | newspapers of general circulation in the trade area of the | ||||||
5 | association if notice to individual members and affected | ||||||
6 | shareholders is impracticable.
| ||||||
7 | Section 85. Methods of giving notice; waiver.
| ||||||
8 | (a) Whenever notice is required by this Act to be given to | ||||||
9 | any person, the notice may be given personally, by mail, or by | ||||||
10 | electronic or telephonic transmittal. If mailed, the notice is | ||||||
11 | given when it is deposited in the United States mail, with | ||||||
12 | postage prepaid, addressed to the person at the person's | ||||||
13 | address as it appears on the records of the association. If | ||||||
14 | notice is sent by electronic or telephonic transmittal, notice | ||||||
15 | is given when an electronic or telephonic confirmation of | ||||||
16 | delivery is received by the association. | ||||||
17 | (b) A signed waiver is equivalent to personal notice to the | ||||||
18 | person signing. The waiver may be signed at any time.
| ||||||
19 | Section 90. Board of directors.
| ||||||
20 | (a) Except where this Act or an association's articles of | ||||||
21 | incorporation or bylaws require that action be otherwise | ||||||
22 | authorized or taken, all of the authority of an association | ||||||
23 | shall be exercised by or under the direction of the board. The | ||||||
24 | board shall consist of not less than 5 directors, elected by |
| |||||||
| |||||||
1 | and from the members, unless the number of members is less than | ||||||
2 | 5, in which case, the number of directors may equal the number | ||||||
3 | of members. | ||||||
4 | (b) The bylaws may provide that the membership of an | ||||||
5 | association be divided into districts or other groupings and | ||||||
6 | that the directors shall be elected according to such districts | ||||||
7 | or groupings. In that case, the bylaws shall specify the number | ||||||
8 | of directors to be elected and the manner of reapportioning or | ||||||
9 | redistricting the membership. | ||||||
10 | (c) The bylaws may provide that one or more directors may | ||||||
11 | be appointed by the other directors. The appointed directors | ||||||
12 | need not be members of the association, but shall have the same | ||||||
13 | powers, rights, and responsibilities as other directors. The | ||||||
14 | appointed directors shall not number more than 20% of the | ||||||
15 | entire number of directors. | ||||||
16 | (d) The bylaws may provide for an executive committee and | ||||||
17 | may allot to the executive committee any of the functions and | ||||||
18 | powers of the board, subject to the general direction and | ||||||
19 | control of the board. | ||||||
20 | (e) The association may provide a fair remuneration for the | ||||||
21 | time actually spent by its officers and directors in its | ||||||
22 | service, and for the services of the members of its executive | ||||||
23 | committee. | ||||||
24 | (f) Unless the bylaws provide otherwise, when a vacancy on | ||||||
25 | the board occurs other than by expiration of term, the | ||||||
26 | remaining directors on the board, by a majority vote, may elect |
| |||||||
| |||||||
1 | a director to fill the vacancy. If the bylaws provide for an | ||||||
2 | election of directors by the members in a district or other | ||||||
3 | grouping, the board may call a special meeting of the members | ||||||
4 | in that district or group to fill the vacancy.
| ||||||
5 | Section 95. Indemnification. | ||||||
6 | (a) Subject to subsections (b) and (c) of this Section, an | ||||||
7 | association may indemnify or agree to indemnify any person that | ||||||
8 | was or is a party, or is threatened to be made a party, to any | ||||||
9 | threatened, pending, or completed civil, criminal, | ||||||
10 | administrative, or investigative action, suit, or proceeding, | ||||||
11 | other than an action or suit by or in the right of the | ||||||
12 | association, because the person is or was a director, officer, | ||||||
13 | employee, agent, or volunteer of the association or is or was | ||||||
14 | serving at the request of the association as a trustee, | ||||||
15 | director, officer, employee, member, manager, agent, or | ||||||
16 | volunteer of another association, entity, partnership, joint | ||||||
17 | venture, trust, or other enterprise. The indemnification | ||||||
18 | described in this subsection shall be for expenses, including | ||||||
19 | attorney's fees, judgments, fines, and amounts paid in | ||||||
20 | settlement actually and reasonably incurred by the person in | ||||||
21 | connection with the action, suit, or proceeding described in | ||||||
22 | this subsection. | ||||||
23 | (b) With respect to any noncriminal action or proceeding, | ||||||
24 | the indemnification described in subsection (a) of this Section | ||||||
25 | shall only be made if the person acted in good faith and in a |
| |||||||
| |||||||
1 | manner the person reasonably believed to be in or not opposed | ||||||
2 | to the best interests of the association as described in | ||||||
3 | subsection (d) of Section 100. | ||||||
4 | (c) With respect to any criminal action or proceeding, the | ||||||
5 | indemnification described in subsection (a) of this Section | ||||||
6 | shall only be made if the person acted in good faith and in a | ||||||
7 | manner the person reasonably believed to be in or not opposed | ||||||
8 | to the best interests of the association as described in | ||||||
9 | subsection (d) of Section 100, and the person had no reasonable | ||||||
10 | cause to believe the conduct was unlawful. | ||||||
11 | (d) For purposes of subsections (b) and (c) of this | ||||||
12 | Section, the termination of any action, suit, or proceeding by | ||||||
13 | judgment, order, settlement, or conviction or a plea of nolo | ||||||
14 | contendere or its equivalent does not create, of itself, a | ||||||
15 | presumption that the person did not act in good faith and in a | ||||||
16 | manner the person reasonably believed to be in or not opposed | ||||||
17 | to the best interests of the association or that the person had | ||||||
18 | reasonable cause to believe that the conduct was unlawful. | ||||||
19 | (e) Subject to subsection (f) of this Section and provided | ||||||
20 | the person acted in good faith and in a manner the person | ||||||
21 | reasonably believed to be in or not opposed to the best | ||||||
22 | interests of the association, an association may indemnify or | ||||||
23 | agree to indemnify any person that was or is a party, or is | ||||||
24 | threatened to be made a party, to any threatened, pending, or | ||||||
25 | completed action or suit by or in the right of the association | ||||||
26 | to procure a judgment in its favor, because the person is or |
| |||||||
| |||||||
1 | was a director, officer, employee, agent, or volunteer of the | ||||||
2 | association or is or was serving at the request of the | ||||||
3 | association as a trustee, director, officer, employee, member, | ||||||
4 | manager, agent, or volunteer of another association, entity, | ||||||
5 | partnership, joint venture, trust, or other enterprise. The | ||||||
6 | indemnification described in this subsection shall be for | ||||||
7 | expenses, including attorney's fees, actually and reasonably | ||||||
8 | incurred by the person in connection with the defense or | ||||||
9 | settlement of an action or suit described in this subsection. | ||||||
10 | (f) If a person is adjudged to be liable for negligence or | ||||||
11 | misconduct in the performance of a duty to the association, the | ||||||
12 | indemnification described in subsection (e) of this Section | ||||||
13 | shall be made for any claim, issue, or matter only to the | ||||||
14 | extent that the court in which the action or suit was brought | ||||||
15 | determines, upon application, that despite the adjudication of | ||||||
16 | liability and in view of all the circumstances of the case, the | ||||||
17 | person fairly and reasonably is entitled to indemnity for | ||||||
18 | expenses that the court in which the action or suit was brought | ||||||
19 | considers proper. | ||||||
20 | (g) Notwithstanding subsections (a), (b), (c), (d), (e), | ||||||
21 | and (f) of this Section, unless limited in the articles of | ||||||
22 | incorporation, to the extent that a person has been successful | ||||||
23 | on the merits in defense of any action, suit, or proceeding | ||||||
24 | described in subsection (a), (b), (c), (d), (e), or (f) of this | ||||||
25 | Section, the person shall be indemnified against expenses, | ||||||
26 | including attorney's fees, actually and reasonably incurred in |
| |||||||
| |||||||
1 | connection with that action, suit, or proceeding. | ||||||
2 | (h) Unless ordered by a court or unless subsection (g) of | ||||||
3 | this Section applies, the association shall make any | ||||||
4 | indemnification under subsections (a), (b), (c), (d), (e), and | ||||||
5 | (f) of this Section only as authorized in the specific case, | ||||||
6 | upon a determination that indemnification of the person is | ||||||
7 | proper in the circumstances because the person has met the | ||||||
8 | applicable standard of conduct set forth in subsections (a), | ||||||
9 | (b), (c), (d), (e), and (f) of this Section. This determination | ||||||
10 | shall be made in any of the following manners: | ||||||
11 | (1) by a majority vote of a quorum consisting of | ||||||
12 | directors of the indemnifying association that were not and | ||||||
13 | are not parties to or threatened with the action, suit, or | ||||||
14 | proceeding described in subsections (a), (b), (c), (d), | ||||||
15 | (e), and (f) of this Section; | ||||||
16 | (2) whether or not a quorum as described in paragraph | ||||||
17 | (1) of this subsection is obtainable, and if a majority of | ||||||
18 | a quorum of disinterested directors so directs, in a | ||||||
19 | written opinion by independent legal counsel other than an | ||||||
20 | attorney or a firm of attorneys associated with that | ||||||
21 | attorney, that within the past 5 years has been retained by | ||||||
22 | or has performed services for the association or has | ||||||
23 | performed services for any person to be indemnified; or
| ||||||
24 | (3) by the members. | ||||||
25 | (i) The association shall pay the expenses, including | ||||||
26 | attorney's fees, incurred by the person in defending the |
| |||||||
| |||||||
1 | action, suit, or proceeding described in subsection (a), (b), | ||||||
2 | (c), (d), (e), or (f) of this Section, unless either of the | ||||||
3 | following applies: | ||||||
4 | (1) At the time of a person's act or omission that | ||||||
5 | is the subject of an action, suit, or proceeding | ||||||
6 | described in subsection (a), (b), (c), (d), (e), or (f) | ||||||
7 | of this Section, the articles or bylaws of the | ||||||
8 | association state, by specific reference to | ||||||
9 | subsections (a), (b), (c), (d), (e), and (f) of this | ||||||
10 | Section, that subsections (a), (b), (c), (d), (e), and | ||||||
11 | (f) of this Section do not apply to the association. | ||||||
12 | (2) The only liability asserted against a person in | ||||||
13 | an action, suit, or proceeding described in subsection | ||||||
14 | (a), (b), (c), (d), (e), or (f) of this Section is | ||||||
15 | pursuant to Section 110.
Upon receipt of a request from | ||||||
16 | a person, the association may pay expenses, including | ||||||
17 | attorney's fees, incurred by a person in defending any | ||||||
18 | action, suit, or proceeding described in subsection | ||||||
19 | (a), (b), (c), (d), (e), or (f) of this Section as the | ||||||
20 | expenses are incurred in advance of the final | ||||||
21 | disposition of the action, suit, or proceeding, if the | ||||||
22 | board authorizes this payment in the specific case and | ||||||
23 | upon receipt of an undertaking by or on behalf of the | ||||||
24 | person to repay the amount if it ultimately is | ||||||
25 | determined that the person is not entitled to be | ||||||
26 | indemnified by the association. |
| |||||||
| |||||||
1 | (j) Both of the following apply to the indemnification | ||||||
2 | authorized by this Section: | ||||||
3 | (1) It is not exclusive of and is in addition to any | ||||||
4 | other rights granted to a person seeking indemnification | ||||||
5 | pursuant to the articles or bylaws of the association, any | ||||||
6 | agreement, a vote of members or disinterested directors of | ||||||
7 | the association, or otherwise, for action taken in the | ||||||
8 | person's official capacity and action taken in another | ||||||
9 | capacity while holding their office or position. | ||||||
10 | (2) It continues as to a person that has ceased to be a | ||||||
11 | director, officer, employee, member, manager, agent, or | ||||||
12 | volunteer and inures to the benefit of the heirs, | ||||||
13 | executors, and administrators of that person. | ||||||
14 | (k) As used in this Section, "association" includes all | ||||||
15 | constituent associations and entities in a consolidation or | ||||||
16 | merger and the new or surviving association or entity. Any | ||||||
17 | person that is or was a director, officer, employee, agent, or | ||||||
18 | volunteer of a constituent association or is or was serving at | ||||||
19 | the request of a constituent association as a trustee, | ||||||
20 | director, officer, employee, member, manager, agent, or | ||||||
21 | volunteer of another association, entity, partnership, joint | ||||||
22 | venture, trust, or other enterprise stands in the same position | ||||||
23 | under this Section with respect to the new or surviving | ||||||
24 | association or entity as the person would if the person had | ||||||
25 | served the new or surviving association or entity in the same | ||||||
26 | capacity. |
| |||||||
| |||||||
1 | (l) An association may purchase and maintain insurance or | ||||||
2 | furnish similar protection, including, but not limited to, | ||||||
3 | trust funds, letters of credit, or self-insurance, for or on | ||||||
4 | behalf of any person that is or was a director, officer, | ||||||
5 | employee, agent, or volunteer of the association or is or was | ||||||
6 | serving at the request of the association as a trustee, | ||||||
7 | director, officer, employee, member, manager, agent, or | ||||||
8 | volunteer of another association, entity, partnership, joint | ||||||
9 | venture, trust, or other enterprise. The insurance or similar | ||||||
10 | protection described in this subsection shall be against any | ||||||
11 | liability asserted against the person and incurred by the | ||||||
12 | person in any such capacity, whether or not the association | ||||||
13 | would have the power to indemnify the person against that | ||||||
14 | liability under this Section. | ||||||
15 | Insurance described in this subsection may be purchased | ||||||
16 | from or maintained with a person in which the association has a | ||||||
17 | financial interest.
| ||||||
18 | Section 100. Standard of care for directors. | ||||||
19 | (a) A director shall perform the duties of a director, | ||||||
20 | including duties as a member of any committee of the directors | ||||||
21 | upon which the director serves, in good faith, in a manner the | ||||||
22 | director reasonably believes to be in or not opposed to the | ||||||
23 | best interests of the association, and with the care that an | ||||||
24 | ordinarily prudent person in a like position would use under | ||||||
25 | similar circumstances. In performing these duties, a director |
| |||||||
| |||||||
1 | is entitled to rely on information, opinions, reports, or | ||||||
2 | statements, including financial statements and other financial | ||||||
3 | data, that are prepared or presented by any of the following: | ||||||
4 | (1) One or more directors, officers, or employees of | ||||||
5 | the association whom the director reasonably believes are | ||||||
6 | reliable and competent in the matters prepared or | ||||||
7 | presented; | ||||||
8 | (2) Counsel, public accountants, or other persons as to | ||||||
9 | matters that the director reasonably believes are within | ||||||
10 | the person's professional or expert competence; | ||||||
11 | (3) A committee of the directors upon which the | ||||||
12 | director does not serve, established in accordance with the | ||||||
13 | association's articles of incorporation or bylaws, as to | ||||||
14 | matters within its designated authority, provided the | ||||||
15 | director reasonably believes the committee merits | ||||||
16 | confidence. | ||||||
17 | (b) For purposes of subsection (a) of this Section: | ||||||
18 | (1) A director shall not be found to have failed to | ||||||
19 | perform the duties in accordance with subsection (a) of | ||||||
20 | this Section, unless it is proved, by clear and convincing | ||||||
21 | evidence, in an action brought against the director that | ||||||
22 | the director has not acted in good faith, in a manner | ||||||
23 | reasonably believed to be in or not opposed to the best | ||||||
24 | interests of the association, or with the care that an | ||||||
25 | ordinarily prudent person in a like position would use | ||||||
26 | under similar circumstances. Such an action includes, but |
| |||||||
| |||||||
1 | is not limited to, an action that involves or affects any | ||||||
2 | of the following: | ||||||
3 | (A) A change or potential change in control of the | ||||||
4 | association; | ||||||
5 | (B) A termination or potential termination of the | ||||||
6 | director's service to the association as a director; | ||||||
7 | (C) Service in any other position or relationship | ||||||
8 | with the association. | ||||||
9 | (2) A director shall not be considered to be acting in | ||||||
10 | good faith if the director has knowledge concerning the | ||||||
11 | matter in question that would cause reliance on | ||||||
12 | information, opinions, reports, or statements that are | ||||||
13 | prepared or presented by the persons described in | ||||||
14 | subsections (a)(1) through (a)(3) of this Section to be | ||||||
15 | unwarranted. | ||||||
16 | (3) Subsection (b) of this Section does not limit | ||||||
17 | relief available under Section 105. | ||||||
18 | (c) (1) Subject to subsections (c)(2) and (c)(3) of this | ||||||
19 | Section, a director is liable in damages for any act that the | ||||||
20 | director takes or fails to take as director only if it is | ||||||
21 | proved, by clear and convincing evidence, in an action brought | ||||||
22 | against the director that the act or omission of the director | ||||||
23 | was undertaken with a deliberate intent to cause injury to the | ||||||
24 | association or was undertaken with a reckless disregard for the | ||||||
25 | best interests of the association. | ||||||
26 | (2) Subsection (c)(1) of this Section does not affect the |
| |||||||
| |||||||
1 | liability of a director under Section 110. | ||||||
2 | (3) Subject to subsection (c)(2) of this Section, | ||||||
3 | subsection (c)(1) of this Section does not apply if, and only | ||||||
4 | to the extent that, at the time of an act or omission of the | ||||||
5 | director, the association's articles of incorporation or | ||||||
6 | bylaws state, by specific reference to subsection (c)(1) of | ||||||
7 | this Section, that its provisions do not apply to the | ||||||
8 | association. | ||||||
9 | (d) For purposes of this Section and Section 95, in | ||||||
10 | determining what is reasonably believed to be in or not opposed | ||||||
11 | to the best interests of the association, a director shall | ||||||
12 | consider the purposes of the association and may consider any | ||||||
13 | of the following: | ||||||
14 | (1) the interests of the employees, suppliers, | ||||||
15 | creditors, and customers of the association; | ||||||
16 | (2) the economy of this State and of the United States; | ||||||
17 | (3) community, and societal, and environmental | ||||||
18 | matters; | ||||||
19 | (4) the long-term and short-term best interests of the | ||||||
20 | association; | ||||||
21 | (5) the interests of the members as patrons of the | ||||||
22 | association. | ||||||
23 | (e) Subsections (b) and (c) of this Section do not affect | ||||||
24 | the duties of a director who acts in any capacity other than as | ||||||
25 | a director.
|
| |||||||
| |||||||
1 | Section 105. Effect of self-dealing.
| ||||||
2 | (a) Unless otherwise provided in an association's articles | ||||||
3 | of incorporation or bylaws: | ||||||
4 | (1) no contract or transaction between an association | ||||||
5 | and one or more of its directors or officers, or between | ||||||
6 | the association and any other person in which one or more | ||||||
7 | of the association's directors or officers are directors or | ||||||
8 | officers, or have a financial or personal interest, shall | ||||||
9 | be void or voidable solely for this reason, or solely | ||||||
10 | because the director or officer is present at or | ||||||
11 | participates in the meeting of the board or committee that | ||||||
12 | authorizes the contract or transaction, or solely because | ||||||
13 | the director's or officer's votes are counted for such | ||||||
14 | purpose, if the contract or transaction is fair to the | ||||||
15 | association at the time it is authorized or approved, and | ||||||
16 | such authorization or approval is granted in either of the | ||||||
17 | following manners: | ||||||
18 | (A) the material facts as to the relationship or | ||||||
19 | interest and as to the contract or transaction are | ||||||
20 | disclosed or are known to the board or the committee, | ||||||
21 | and the board or committee in good faith authorizes the | ||||||
22 | contract or transaction by the affirmative vote of a | ||||||
23 | majority of the disinterested directors, even if the | ||||||
24 | disinterested directors constitute less than a quorum | ||||||
25 | of the board or the committee; or | ||||||
26 | (B) the material facts as to the relationship or |
| |||||||
| |||||||
1 | interest and as to the contract or transaction are | ||||||
2 | disclosed or are known to the members entitled to vote | ||||||
3 | on the contract or transaction, and the contract or | ||||||
4 | transaction is specifically approved at a meeting of | ||||||
5 | the members. | ||||||
6 | (2) Common or interested directors may be counted in | ||||||
7 | determining the presence of a quorum at a meeting of the | ||||||
8 | board, or of a committee that authorizes the contract or | ||||||
9 | transaction. | ||||||
10 | (b) Items (1) and (2) of subsection (a) do not limit or | ||||||
11 | otherwise affect the liability of directors under Section 110. | ||||||
12 | (c) For purposes of subsection (a), a director is not an | ||||||
13 | interested director solely because the subject of a contract or | ||||||
14 | transaction may involve or effect a change in control of the | ||||||
15 | association or continuation in office as a director of the | ||||||
16 | association.
| ||||||
17 | Section 110. Liability of members, directors, and | ||||||
18 | officers.
| ||||||
19 | (a) No member, director, or officer of an association shall | ||||||
20 | be personally liable for any obligation of the association to | ||||||
21 | an amount exceeding the sum remaining unpaid on his membership | ||||||
22 | fee or his subscription to the capital stock, including any | ||||||
23 | unpaid balance on any promissory notes given in payment | ||||||
24 | thereof. | ||||||
25 | (b) Directors who vote for or assent to any of the |
| |||||||
| |||||||
1 | following are jointly and severally liable to the association | ||||||
2 | in accordance with this subsection: | ||||||
3 | (1) a distribution of assets to members, stockholders, | ||||||
4 | or patrons contrary to law, the association's articles of | ||||||
5 | incorporation, or bylaws; | ||||||
6 | (2) a distribution of assets to persons other than | ||||||
7 | creditors during the winding up of the affairs of the | ||||||
8 | association, on dissolution or otherwise, without the | ||||||
9 | payment of all known obligations of the association, or | ||||||
10 | without making adequate provision for the payment of the | ||||||
11 | obligations; or | ||||||
12 | (3) the making of loans, other than in the usual | ||||||
13 | conduct of the association's affairs or in accordance with | ||||||
14 | the association's articles or bylaws, to an officer, | ||||||
15 | director, or member of the association. | ||||||
16 | In cases under item (1) of this subsection, directors are | ||||||
17 | liable up to the amount of the distribution in excess of the | ||||||
18 | amount that could have been distributed without violation of | ||||||
19 | law, the articles of incorporation, or bylaws, but not in | ||||||
20 | excess of the amount that would inure to the benefit of the | ||||||
21 | creditors of the association if it was insolvent at the time of | ||||||
22 | the distribution or there was reasonable ground to believe that | ||||||
23 | by such vote or assent it would be rendered insolvent, or to | ||||||
24 | the benefit of the members or stockholders other than members | ||||||
25 | or stockholders of the class in respect of which the | ||||||
26 | distribution was made. |
| |||||||
| |||||||
1 | In cases under item (2) of this subsection, directors are | ||||||
2 | liable to the extent that the obligations, not otherwise barred | ||||||
3 | by statute, are not paid, or for the payment of which adequate | ||||||
4 | provision has not been made. | ||||||
5 | In cases under item (3) of this subsection, directors are | ||||||
6 | liable for the amount of the loan with interest thereon at the | ||||||
7 | rate of 6% per year until the amount has been paid. | ||||||
8 | A director is not liable under item (1) or (2) of this | ||||||
9 | subsection if, in determining the amount available for any such | ||||||
10 | distribution, the director in good faith relied on a financial | ||||||
11 | statement of the association prepared by an officer or employee | ||||||
12 | of the association in charge of its accounts or by a certified | ||||||
13 | public accountant or firm of certified public accountants, or | ||||||
14 | in good faith considered the assets to be of their book value, | ||||||
15 | or followed what the director believed to be sound accounting | ||||||
16 | and business practice. | ||||||
17 | (c) A director who is present at a meeting of the board or | ||||||
18 | a committee of the board at which action on any matter is | ||||||
19 | authorized or taken and who has not voted for or against such | ||||||
20 | action shall be presumed to have voted for the action unless | ||||||
21 | the director dissents from the action during the meeting and | ||||||
22 | the dissent is noted in the minutes of the proceedings of the | ||||||
23 | meeting, or a written dissent is filed either during the | ||||||
24 | meeting or within a reasonable time after the adjournment of | ||||||
25 | the meeting. | ||||||
26 | (d) A member, stockholder, or patron who receives any |
| |||||||
| |||||||
1 | distribution made contrary to law, the association's articles | ||||||
2 | of incorporation, or bylaws is liable to the association for | ||||||
3 | the amount received that is in excess of the amount that could | ||||||
4 | have been distributed. | ||||||
5 | (e) A director against whom a claim is asserted under or | ||||||
6 | pursuant to this Section and who is held liable on the claim is | ||||||
7 | entitled to contribution, on equitable principles, from other | ||||||
8 | directors who also are liable. In addition, any director | ||||||
9 | against whom a claim is asserted under or pursuant to this | ||||||
10 | Section, or who is held liable, has a right of contribution | ||||||
11 | from the member, stockholder, or patron who received any | ||||||
12 | distribution made contrary to law, the articles of | ||||||
13 | incorporation, or bylaws, and such persons as among themselves | ||||||
14 | also are entitled to contribution in proportion to the amounts | ||||||
15 | received by them respectively. | ||||||
16 | (f) No action shall be brought by or on behalf of an | ||||||
17 | association, upon any cause of action arising under item (1) or | ||||||
18 | (2) of subsection (b), at any time after 2 years from the day | ||||||
19 | on which the violation occurs; provided that no such action is | ||||||
20 | barred by this subsection if it is commenced prior to the | ||||||
21 | effective date of this Act.
| ||||||
22 | Section 115. Officers.
| ||||||
23 | (a) The officers of an association shall consist of a | ||||||
24 | president, a secretary, a treasurer, and, if desired, a | ||||||
25 | chairperson and one or more vice-chairpersons of the board, one |
| |||||||
| |||||||
1 | or more vice-presidents, and other officers and assistant | ||||||
2 | officers as necessary. The officers shall be elected by the | ||||||
3 | board. The chairperson and any vice-chairperson of the board | ||||||
4 | shall be a director. Unless the association's articles of | ||||||
5 | incorporation or bylaws provide otherwise, none of the other | ||||||
6 | officers need be a director. Any 2 or more offices may be held | ||||||
7 | by the same person, but no officer shall execute, acknowledge, | ||||||
8 | or verify any instrument in more than one capacity if the | ||||||
9 | instrument is required by law or by the articles or bylaws to | ||||||
10 | be executed, acknowledged, or verified by 2 or more officers. | ||||||
11 | Unless the articles or the bylaws provide otherwise, all | ||||||
12 | officers shall be elected annually. | ||||||
13 | (b) All officers have the authority to perform, and shall | ||||||
14 | perform, the duties as the bylaws provide, or as the board may | ||||||
15 | determine in accordance with the bylaws.
| ||||||
16 | Section 120. Surety bonds. If required by the association's | ||||||
17 | bylaws, every officer, employee, and agent handling funds, | ||||||
18 | negotiable instruments, or other property of or for an | ||||||
19 | association shall execute and deliver adequate bonds for the | ||||||
20 | faithful performance of the officer's, employee's, or agent's | ||||||
21 | duties and obligations.
| ||||||
22 | Section 125. Removal of officers or directors.
| ||||||
23 | (a) Unless the bylaws provide otherwise, a director may be | ||||||
24 | removed, with or without cause, by a majority vote of all |
| |||||||
| |||||||
1 | members at an annual or special meeting. | ||||||
2 | (b) If the bylaws provide for election of directors by the | ||||||
3 | members in a district or other grouping, then the members | ||||||
4 | residing in that district or belonging to the group may, by a | ||||||
5 | majority vote at an annual or special meeting, remove the | ||||||
6 | director representing such district or group. | ||||||
7 | (c) Any director or officer facing possible removal shall | ||||||
8 | be given fair notice of the proposed action in writing prior to | ||||||
9 | a meeting and shall have an opportunity at the meeting to be | ||||||
10 | heard in person or in writing.
| ||||||
11 | Section 130. Books and records; examination by member.
| ||||||
12 | (a) An association shall keep correct and complete books | ||||||
13 | and records of account, and shall also keep minutes of the | ||||||
14 | proceedings of meetings of its members, board, and delegates. | ||||||
15 | The association shall keep at its principal office records of | ||||||
16 | the names and addresses of all members and stockholders with | ||||||
17 | the amount of ownership interests and stock held by each. | ||||||
18 | (b) At any reasonable time, any member, upon written notice | ||||||
19 | that states, with specificity, a proper purpose for an | ||||||
20 | examination of books and records and that is delivered or sent | ||||||
21 | to the association at least one week in advance, may examine | ||||||
22 | those books and records pertinent to the purpose in the notice. | ||||||
23 | The board may deny a request of a member to examine the books | ||||||
24 | and records if the purpose is not proper because the purpose is | ||||||
25 | not directly related to the person's interest as a member and |
| |||||||
| |||||||
1 | is contrary to the best interests of the association.
| ||||||
2 | (c) At any reasonable time, a stockholder who is not a | ||||||
3 | member, upon written notice that states, with specificity, a | ||||||
4 | proper purpose for an examination of books and records and that | ||||||
5 | is delivered or sent to the association at least one week in | ||||||
6 | advance, may examine those books and records that are pertinent | ||||||
7 | to the purpose in the notice. The board may deny a request of a | ||||||
8 | stockholder to examine the books and records if the purpose is | ||||||
9 | not proper because the purpose is not directly related to the | ||||||
10 | person's interest as a stockholder and is contrary to the best | ||||||
11 | interest of the association.
| ||||||
12 | Section 135. Merger or consolidation with associations. | ||||||
13 | (a) An association may merge or consolidate with one or | ||||||
14 | more associations under this Act. Before an association may | ||||||
15 | merge or consolidate with any other association, a written | ||||||
16 | agreement of merger or consolidation shall be approved by the | ||||||
17 | board of each constituent association and by the members of | ||||||
18 | each constituent association. The agreement shall set forth the | ||||||
19 | terms of the merger or consolidation, including any provisions | ||||||
20 | for amendment or abandonment of the agreement. In the case of a | ||||||
21 | consolidation, the agreement also shall contain the articles of | ||||||
22 | incorporation of the new association.
| ||||||
23 | (b) If the agreement of merger or consolidation provides | ||||||
24 | that a holder of stock other than membership stock or patronage | ||||||
25 | stock in a constituent association will be affected, all of the |
| |||||||
| |||||||
1 | following apply:
| ||||||
2 | (1) Unless the board of the constituent association | ||||||
3 | provides that item (2) of this subsection applies, the | ||||||
4 | affected stockholder shall be entitled to cast one vote on | ||||||
5 | the agreement regardless of the par or stated value, the | ||||||
6 | number of shares, or the number of affected classes of the | ||||||
7 | stock held.
| ||||||
8 | (2) The board of a constituent association may provide | ||||||
9 | that a stockholder otherwise entitled to vote under item | ||||||
10 | (1) of this subsection shall instead be entitled to payment | ||||||
11 | of fair cash value of the affected stock held by the | ||||||
12 | stockholder in accordance with Section 170.
| ||||||
13 | (3) A member holding stock affected by a proposed | ||||||
14 | agreement of merger or consolidation may vote only as a | ||||||
15 | member and shall not be entitled to vote or demand fair | ||||||
16 | cash value as an affected stockholder.
| ||||||
17 | (c) For purposes of this Section, a holder of stock is | ||||||
18 | affected as to any class of stock owned by the holder only if | ||||||
19 | the agreement of merger or consolidation does any of the | ||||||
20 | following:
| ||||||
21 | (1) decreases the dividends to which that class may be | ||||||
22 | entitled or changes the method by which the dividend rate | ||||||
23 | on that class is fixed;
| ||||||
24 | (2) provides for additional restriction of rights to | ||||||
25 | transfer shares of that class;
| ||||||
26 | (3) gives to another existing or any new class of stock |
| |||||||
| |||||||
1 | or equity interest not previously entitled thereto any | ||||||
2 | preference, as to dividends or upon dissolution, that is | ||||||
3 | higher than preferences of that class;
| ||||||
4 | (4) changes the par value of shares of that class or of | ||||||
5 | any other class having the same or higher preferences as to | ||||||
6 | dividends or upon dissolution;
| ||||||
7 | (5) increases the number of authorized shares of any | ||||||
8 | other class having the same or higher preferences as to | ||||||
9 | dividends or upon dissolution beyond the aggregate | ||||||
10 | authorizations for such classes in the constituent | ||||||
11 | associations;
or | ||||||
12 | (6) requires or permits an exchange of shares of any | ||||||
13 | class with lower preferences as to dividends or upon | ||||||
14 | dissolution for shares of any other class with higher | ||||||
15 | preferences.
| ||||||
16 | (d) The agreement is approved if both of the following | ||||||
17 | conditions are met with respect to each constituent | ||||||
18 | association: | ||||||
19 | (1) Notice of the meeting to vote on the agreement, the | ||||||
20 | agreement, and a description of the method of voting have | ||||||
21 | been sent to all members, and to all affected stockholders | ||||||
22 | entitled either to vote on the agreement or to receive | ||||||
23 | payment of fair cash value under subsection (b);
| ||||||
24 | (2) 60% of the member votes cast approve the agreement, | ||||||
25 | and a simple majority of the votes cast by the affected | ||||||
26 | stockholders entitled to vote under subsection (b) approve |
| |||||||
| |||||||
1 | the agreement. | ||||||
2 |
(e) Notwithstanding subsection (d), no vote of the members | ||||||
3 | or stockholders of a constituent association shall be necessary | ||||||
4 | to approve a merger of a wholly owned subsidiary association | ||||||
5 | with and into its parent cooperative or a merger or a | ||||||
6 | consolidation of 2 or more subsidiary associations that are | ||||||
7 | wholly owned by a cooperative.
| ||||||
8 | (f) After approval of an agreement under this Section, but | ||||||
9 | before the merger or consolidation is effective, the agreement | ||||||
10 | may be amended in accordance with any provision for amendment | ||||||
11 | set forth in the agreement, provided that an amendment made | ||||||
12 | subsequent to adoption of the agreement by the members of any | ||||||
13 | constituent association shall not do any of the following:
| ||||||
14 | (1) change the membership rights, or the amount or kind | ||||||
15 | of stock, securities, cash, property, or other rights to be | ||||||
16 | received, exchanged, or converted in the merger or | ||||||
17 | consolidation; | ||||||
18 | (2) change the articles of incorporation or bylaws of | ||||||
19 | the surviving or new association as provided for in the | ||||||
20 | agreement;
| ||||||
21 | (3) change any provision of the agreement with respect | ||||||
22 | to the rights of members or the manner of voting in the | ||||||
23 | surviving or new association.
| ||||||
24 | (g) After approval of an agreement under this Section, but | ||||||
25 | before the merger or consolidation is effective, the merger or
| ||||||
26 | consolidation may be abandoned in accordance with any provision |
| |||||||
| |||||||
1 | for abandonment set forth in the agreement.
| ||||||
2 | (h) The merger or consolidation shall take effect in | ||||||
3 | accordance with Sections 145 and 150.
| ||||||
4 | Section 140. Association may merge or consolidate with | ||||||
5 | other entities.
| ||||||
6 | (a) An association may merge or consolidate with one or | ||||||
7 | more entities, if such merger or consolidation is permitted by | ||||||
8 | the laws under which each constituent entity exists and the | ||||||
9 | association complies with this Section.
| ||||||
10 | (b) Each constituent association shall comply with Section | ||||||
11 | 135 with respect to form and approval of an agreement of merger | ||||||
12 | or consolidation, and each constituent entity shall comply with | ||||||
13 | the applicable provisions of the laws under which it exists, | ||||||
14 | except that the agreement of merger or consolidation, by | ||||||
15 | whatever name designated, shall comply with subsections (c) and | ||||||
16 | (d) of this Section.
| ||||||
17 | (c) The agreement of merger or consolidation shall set | ||||||
18 | forth all of the following:
| ||||||
19 | (1) The names of the states and the laws under which | ||||||
20 | each constituent entity exists.
| ||||||
21 | (2) All statements and matters required to be set forth | ||||||
22 | in agreements of merger or consolidation by the laws under | ||||||
23 | which any constituent entity exists.
| ||||||
24 | (3) A statement that the surviving or new entity is to | ||||||
25 | be an association, a foreign association, a corporation |
| |||||||
| |||||||
1 | other than a cooperative, or a limited liability company.
| ||||||
2 | (4) If the surviving or new entity is to be a foreign | ||||||
3 | entity:
| ||||||
4 | (A) the place where the principal office of the | ||||||
5 | surviving or new entity is to be located in the state | ||||||
6 | in which the surviving or new entity is to exist;
| ||||||
7 | (B) the consent by the surviving or new entity that | ||||||
8 | it may be sued and served with process in this State in | ||||||
9 | any proceeding for the enforcement of any obligation of | ||||||
10 | any constituent association or domestic entity;
| ||||||
11 | (C) the consent by the surviving or new entity that | ||||||
12 | it shall be subject to the applicable provisions of the | ||||||
13 | Business Corporation Act of 1983 if it is a foreign | ||||||
14 | corporation or foreign association or to the Limited | ||||||
15 | Liability Company Act if it is a foreign limited | ||||||
16 | liability company; and
| ||||||
17 | (D) if it is desired that the surviving or new | ||||||
18 | entity exercise its corporate privileges in this State | ||||||
19 | as a foreign entity. | ||||||
20 | (d) The agreement also may set forth other provisions | ||||||
21 | permitted by the laws of any state in which any constituent | ||||||
22 | entity exists.
| ||||||
23 | (e) If the surviving or new entity is an association, the | ||||||
24 | merger or consolidation shall take effect in accordance with | ||||||
25 | Sections 145 and 150.
| ||||||
26 | (f) If the surviving or new entity is an entity other than |
| |||||||
| |||||||
1 | an association, the merger or consolidation shall take effect | ||||||
2 | in accordance with the applicable provisions of the laws under | ||||||
3 | which it exists.
| ||||||
4 | Section 145. Effective date of merger or consolidation.
| ||||||
5 | (a) Unless a later date is specified in the agreement, a | ||||||
6 | merger or consolidation under Sections 135 and 140 is effective | ||||||
7 | when the certificate of merger or consolidation is filed in | ||||||
8 | accordance with Section 150. If, after filing the certificate | ||||||
9 | but before the merger or consolidation is effective, the merger | ||||||
10 | or consolidation is amended or abandoned, as provided in | ||||||
11 | subsections (f) and (g) of Section 135, an authorized officer | ||||||
12 | of each constituent association shall sign a certificate of | ||||||
13 | amendment or abandonment stating that the agreement of merger | ||||||
14 | or consolidation has been amended or abandoned and the date of | ||||||
15 | such action, and shall file the certificate in the same manner | ||||||
16 | as the certificate of merger or consolidation. Any certificate | ||||||
17 | of amendment or abandonment shall be filed prior to the date | ||||||
18 | the merger or consolidation would otherwise be effective.
| ||||||
19 | (b) In the case of a merger, the surviving association or | ||||||
20 | entity is the one designated in the agreement. In the case of a | ||||||
21 | consolidation, the new association or entity is the one | ||||||
22 | designated in the agreement. The separate existence of all | ||||||
23 | constituent associations or entities in the agreement, except | ||||||
24 | the surviving or new association or entity, ceases upon the | ||||||
25 | effective date of the merger or consolidation.
|
| |||||||
| |||||||
1 | (c) The surviving or new association or entity possesses | ||||||
2 | all the rights and all the property of each constituent | ||||||
3 | association or entity, and is responsible for all their | ||||||
4 | obligations. Title to any property is vested in the surviving | ||||||
5 | or new association or entity with no reversion or impairment of | ||||||
6 | the property caused by the merger or consolidation. A merger or | ||||||
7 | consolidation shall not be considered an assignment. No right | ||||||
8 | of any creditor shall be impaired by the merger or | ||||||
9 | consolidation without the creditor's consent.
| ||||||
10 | (d) If the surviving organization is an association, the | ||||||
11 | articles of incorporation are amended to the extent provided in | ||||||
12 | the agreement of merger.
| ||||||
13 | Section 150. Certificate of merger or consolidation; | ||||||
14 | filing; recording.
| ||||||
15 | (a) Upon adoption of an agreement of merger or | ||||||
16 | consolidation under Section 135 or 140, a certificate, signed | ||||||
17 | by any authorized officer or representative of each constituent | ||||||
18 | association or entity, shall be filed with the Secretary of | ||||||
19 | State on a form prescribed by the Secretary of State that sets | ||||||
20 | forth the following:
| ||||||
21 | (1) the name and form of each constituent association | ||||||
22 | or entity and the State law under which each constituent | ||||||
23 | entity exists;
| ||||||
24 | (2) a statement that each constituent association or | ||||||
25 | entity has adopted the agreement of merger or |
| |||||||
| |||||||
1 | consolidation, the manner of adoption, and that the | ||||||
2 | agreement was adopted in compliance with the laws | ||||||
3 | applicable to each constituent association or entity;
| ||||||
4 | (3) the effective date of the merger or consolidation, | ||||||
5 | which date may be on or after the date of filing of the | ||||||
6 | certificate;
| ||||||
7 | (4) in the case of a merger, a statement that one or | ||||||
8 | more specified constituent associations or entities will | ||||||
9 | be merged into a specified surviving association or entity | ||||||
10 | or, in the case of a consolidation, a statement that the | ||||||
11 | constituent associations or entities will be consolidated | ||||||
12 | into a new association or entity; and
| ||||||
13 | (5) the name and address of the statutory agent upon | ||||||
14 | whom any process, notice, or demand against any constituent | ||||||
15 | association or entity, or the surviving or new association | ||||||
16 | or entity, may be served.
| ||||||
17 | In the case of a merger into an association or domestic | ||||||
18 | entity, any amendments to the articles of incorporation or the | ||||||
19 | articles of organization of the surviving association or entity | ||||||
20 | shall be filed with the certificate. | ||||||
21 | In the case of a consolidation to form a new domestic | ||||||
22 | association or entity, the articles of incorporation or the | ||||||
23 | articles of organization of the new association or entity shall | ||||||
24 | be filed with the certificate. | ||||||
25 | If the surviving or new entity is a foreign entity that | ||||||
26 | desires to transact business in this State as a foreign entity, |
| |||||||
| |||||||
1 | the certificate shall be accompanied by the information | ||||||
2 | required for qualification of a foreign entity in this State by | ||||||
3 | the Business Corporation Act of 1983 in the case of a foreign | ||||||
4 | corporation or foreign cooperative, or by the Limited Liability | ||||||
5 | Company Act in the case of a foreign limited liability company. | ||||||
6 | (b) A copy of the certificate of merger or consolidation, | ||||||
7 | certified by the Secretary of State, may be filed for record in | ||||||
8 | the office of the county recorder of any county in this State. | ||||||
9 | For such recording, the county recorder shall charge and | ||||||
10 | collect the same fee as in the case of deeds. The certified | ||||||
11 | copy of the certificate of merger or consolidation shall be | ||||||
12 | recorded in the official records of the county recorder.
| ||||||
13 | (c) For purposes of this Section, "domestic entity" means a | ||||||
14 | corporation other than an association or a limited liability | ||||||
15 | company organized under the laws of this State.
| ||||||
16 | Section 155. Plan of division.
| ||||||
17 | (a) An association may divide itself into 2 or more | ||||||
18 | associations. A written plan of division shall be approved by | ||||||
19 | the association's board. Such plan shall set forth all the | ||||||
20 | terms of the division and the proposed effect of the division | ||||||
21 | on all members and stockholders of the association. The plan | ||||||
22 | also shall contain the articles of incorporation and bylaws of | ||||||
23 | each association resulting from the division, which articles | ||||||
24 | and bylaws shall conform to the requirements for associations | ||||||
25 | organized under this Act.
|
| |||||||
| |||||||
1 | (b) If the plan of division provides that a holder of stock | ||||||
2 | other than membership stock or patronage stock will be | ||||||
3 | affected, the following apply:
| ||||||
4 | (1) Unless the board provides that item (2) of this | ||||||
5 | subsection applies, the affected stockholder shall be | ||||||
6 | entitled to cast one vote on the plan of division | ||||||
7 | regardless of the par or stated value, the number of | ||||||
8 | shares, or the number of affected classes of the stock | ||||||
9 | held.
| ||||||
10 | (2) The board may provide that a stockholder otherwise | ||||||
11 | entitled to vote under item (1) of this subsection shall | ||||||
12 | instead be entitled to payment of fair cash value of the | ||||||
13 | affected stock held by the stockholder in accordance with | ||||||
14 | Section 170.
| ||||||
15 | (3) A member holding stock affected by a proposed plan | ||||||
16 | of division may vote only as a member and shall not be | ||||||
17 | entitled to vote or demand fair cash value as an affected | ||||||
18 | stockholder. | ||||||
19 | (c) For purposes of this Section, a holder of stock is | ||||||
20 | affected as to any class of stock owned by the holder only if | ||||||
21 | the plan of division does any of the following: | ||||||
22 | (1) Decreases the dividends to which that class may be | ||||||
23 | entitled or changes the method by which the dividend rate | ||||||
24 | on that class is fixed.
| ||||||
25 | (2) Provides any additional restriction on rights to | ||||||
26 | transfer shares of that class.
|
| |||||||
| |||||||
1 | (3) Gives to another existing or any new class of stock | ||||||
2 | or equity interest not previously entitled thereto any | ||||||
3 | preference, as to dividends or upon dissolution, that is | ||||||
4 | higher than preferences of that class in a resulting | ||||||
5 | association.
| ||||||
6 | (4) Changes the par value of shares of that class or of | ||||||
7 | any other class having the same or higher preferences as to | ||||||
8 | dividends or upon dissolution.
| ||||||
9 | (5) Increases the aggregate number of authorized | ||||||
10 | shares of any other class having the same or higher | ||||||
11 | preferences as to dividends or upon dissolution in the | ||||||
12 | resulting associations beyond the authorization for such | ||||||
13 | classes in the original association.
| ||||||
14 | (6) Requires or permits an exchange of shares of any | ||||||
15 | class with lower preferences as to dividends or upon | ||||||
16 | dissolution in the original association for shares of any | ||||||
17 | other class with higher preferences in a resulting | ||||||
18 | association.
| ||||||
19 | (d) The plan of division is approved if both of the | ||||||
20 | following conditions are met:
| ||||||
21 | (1) Notice of the meeting to vote on the plan, the plan | ||||||
22 | of division, and a description of the method of voting have | ||||||
23 | been sent to all members and to all affected stockholders | ||||||
24 | entitled either to vote on the plan or to receive payment | ||||||
25 | of fair cash value under subsection (b);
| ||||||
26 | (2) 60% of the member votes cast approve the plan, and |
| |||||||
| |||||||
1 | a simple majority of the votes cast by the affected | ||||||
2 | stockholders entitled to vote under subsection (b) approve | ||||||
3 | the plan. | ||||||
4 | (e) After approval of a plan of division under this | ||||||
5 | Section, but before the division is effective, the plan may be | ||||||
6 | amended or abandoned in accordance with a provision for | ||||||
7 | amendment or abandonment set forth in the plan, provided that | ||||||
8 | an amendment made subsequent to approval of the plan by the | ||||||
9 | members shall not do any of the following:
| ||||||
10 | (1) Change the membership rights, or the amount or kind | ||||||
11 | of stock, securities, cash, property, or other rights to be | ||||||
12 | received, exchanged, or converted in the division.
| ||||||
13 | (2) Change the articles of incorporation or bylaws of | ||||||
14 | the resulting associations as provided for in the plan.
| ||||||
15 | (3) Change any provision of the plan with respect to | ||||||
16 | the rights of members or the manner of voting in the | ||||||
17 | resulting associations.
| ||||||
18 | (f) Upon approval of a plan of division, a certificate, | ||||||
19 | signed by any authorized officer of the original association, | ||||||
20 | shall be filed with the Secretary of State on a form prescribed | ||||||
21 | by the Secretary of State setting forth the following:
| ||||||
22 | (1) The name of the original association and the name | ||||||
23 | of each resulting association.
| ||||||
24 | (2) A statement that the original association has | ||||||
25 | adopted the plan of division, the manner of adoption, and | ||||||
26 | that the plan was adopted in compliance with this Section;
|
| |||||||
| |||||||
1 | (3) The effective date of the division, which date may | ||||||
2 | be on or after the date of filing of the certificate.
| ||||||
3 | (4) A statement that the original association will be | ||||||
4 | divided into specified resulting associations.
| ||||||
5 | (5) The name and address of the statutory agent upon | ||||||
6 | whom any process, notice, or demand against the original | ||||||
7 | association may be served, and the name and address of a | ||||||
8 | statutory agent for each resulting association upon whom | ||||||
9 | process, notice, or demand against that resulting | ||||||
10 | association may be served.
| ||||||
11 | (g) The articles of incorporation of each of the resulting | ||||||
12 | associations shall be filed with the certificate.
| ||||||
13 | Section 160. Conversions.
| ||||||
14 | (a) A domestic corporation that is not an association may | ||||||
15 | convert itself into an association by adopting an amendment to | ||||||
16 | its articles of incorporation in which it elects to become | ||||||
17 | subject to this Act, together with any changes in its articles | ||||||
18 | of incorporation and bylaws required by this Act and any other | ||||||
19 | desirable changes permitted by this Act. The amendment shall be | ||||||
20 | adopted, filed, and recorded in the manner provided by the law | ||||||
21 | under which the corporation exists.
| ||||||
22 | (b) An association may convert itself to a domestic | ||||||
23 | corporation that is not an association by adopting an amendment | ||||||
24 | to its articles of incorporation in which it elects to become | ||||||
25 | subject to the Business Corporation Act of 1983, if so |
| |||||||
| |||||||
1 | permitted by such Act, together with any changes in its | ||||||
2 | articles of incorporation and bylaws required by such Act and | ||||||
3 | any other desirable changes permitted by such Act. The | ||||||
4 | amendment shall be adopted, filed, and recorded under this Act | ||||||
5 | in the same manner as an amendment of the articles of | ||||||
6 | incorporation under Sections 35 and 40.
| ||||||
7 | Section 165. Setting aside reorganizations. An action to | ||||||
8 | set aside a merger, consolidation, division, or conversion of | ||||||
9 | an association, on the ground that any law has not been | ||||||
10 | complied with, shall be brought within 90 days after the | ||||||
11 | effective date of the merger, consolidation, division, or | ||||||
12 | conversion, or such action shall be forever barred.
| ||||||
13 | Section 170. Written demand for payment of fair cash value | ||||||
14 | of stock.
| ||||||
15 | (a) In order to obtain payment of the fair cash value, a | ||||||
16 | stockholder entitled to payment of the fair cash value of stock | ||||||
17 | under Section 40, 135, 140, or 155 shall deliver a written | ||||||
18 | demand for payment of the fair cash value of the stock to the | ||||||
19 | association no later than 15 days after notice is sent to | ||||||
20 | members and stockholders in accordance with Section 40, 135, | ||||||
21 | 140, or 155, as the case may be. The written demand shall state | ||||||
22 | the name and address of the stockholder, the number and class | ||||||
23 | of the stock for which fair cash value is demanded, and the | ||||||
24 | amount claimed by the stockholder to be the fair cash value of |
| |||||||
| |||||||
1 | the stock. Delivery of written demand for payment of fair cash | ||||||
2 | value of stock in accordance with this Section is sufficient if | ||||||
3 | delivered to the association or to the surviving or new | ||||||
4 | association or entity resulting from the merger, | ||||||
5 | consolidation, division, or conversion, whether the demand is | ||||||
6 | delivered before, on, or after the effective date of the | ||||||
7 | action. If written demand is not timely delivered in conformity | ||||||
8 | with this Section, the stockholder's right to payment of fair | ||||||
9 | cash value with respect to the amendment to the articles of | ||||||
10 | incorporation, agreement of merger or consolidation, plan of | ||||||
11 | division, or conversion shall be barred.
| ||||||
12 | (b) If a timely demand is delivered in accordance with this | ||||||
13 | Section, fair cash value of the stock shall be determined and | ||||||
14 | paid to the stockholder in accordance with the following | ||||||
15 | procedures:
| ||||||
16 | (1) The association or the surviving, new, or resulting | ||||||
17 | association or entity shall send a written acknowledgment | ||||||
18 | of receipt of the demand for fair cash value to the address | ||||||
19 | specified in the demand no later than 15 days after receipt | ||||||
20 | of the demand. If the board of the association or the | ||||||
21 | surviving, new, or resulting association or entity | ||||||
22 | believes that the demand has failed to comply with the | ||||||
23 | requirements of this Section, the acknowledgment shall | ||||||
24 | state any such defects. The acknowledgment also shall state | ||||||
25 | what the board believes to be the fair cash value of the | ||||||
26 | stock that is the subject of the demand. If the articles of |
| |||||||
| |||||||
1 | incorporation of the constituent or original association | ||||||
2 | provide a value for the stock upon redemption, the fair | ||||||
3 | cash value of the stock presumptively shall be the lesser | ||||||
4 | of the redemption value or the fair market value of the | ||||||
5 | stock immediately prior to the merger, consolidation, | ||||||
6 | division, or conversion.
| ||||||
7 | (2) The stockholder shall not transfer, encumber, | ||||||
8 | pledge, or otherwise dispose of the stock that is the | ||||||
9 | subject of the demand for fair cash value, or any | ||||||
10 | certificate representing the stock, until the demand is | ||||||
11 | finally resolved by agreement, withdrawal, or final | ||||||
12 | judicial determination.
| ||||||
13 | (3) If the association's articles of incorporation or | ||||||
14 | bylaws provide a reasonable basis for determining and | ||||||
15 | paying the fair cash value of the stock that is the subject | ||||||
16 | of the demand for fair cash value, or if the association or | ||||||
17 | the surviving, new, or resulting association or entity and | ||||||
18 | the demanding stockholder reach an agreement on the fair | ||||||
19 | cash value of the stock within 3 months after delivery of | ||||||
20 | the demand for fair cash value, the fair cash value of the | ||||||
21 | stock shall be determined in accordance with the | ||||||
22 | constituent or original association's articles of | ||||||
23 | incorporation or bylaws or as agreed upon, as the case may | ||||||
24 | be. The association shall thereupon tender payment of the | ||||||
25 | fair cash value so determined to the stockholder within 30 | ||||||
26 | days of delivery of any certificates representing the stock |
| |||||||
| |||||||
1 | or the stockholder's written waiver and release of claim to | ||||||
2 | all rights to the stock to the association or the | ||||||
3 | surviving, new, or resulting association or entity. | ||||||
4 | Without precluding other possible reasonable bases for | ||||||
5 | determining fair cash value of stock under this Section, a | ||||||
6 | provision in the constituent or original association's | ||||||
7 | articles of incorporation or bylaws that fair cash value | ||||||
8 | shall be determined by mediation or final and binding | ||||||
9 | arbitration, or that fair cash value shall be the lesser of | ||||||
10 | par value, book value, or fair market value, shall be | ||||||
11 | considered a reasonable basis for determining and paying | ||||||
12 | the fair cash value of stock.
| ||||||
13 | (c) The right of a demanding stockholder to receive the | ||||||
14 | fair cash value of stock as to which the stockholder seeks | ||||||
15 | relief and the obligation of the association or the surviving, | ||||||
16 | new, or resulting association or entity to furnish the fair | ||||||
17 | cash value for those interests terminate if any of the | ||||||
18 | following applies: | ||||||
19 | (1) The demanding stockholder fails to comply with this | ||||||
20 | Section.
| ||||||
21 | (2) The association abandons the amendment of | ||||||
22 | articles, merger, consolidation, division, or conversion | ||||||
23 | or is finally enjoined or prevented from taking such | ||||||
24 | action.
| ||||||
25 | (3) The demanding stockholder withdraws the demand for | ||||||
26 | fair cash value with consent of the association.
|
| |||||||
| |||||||
1 | (4) The demanding stockholder attempts to sell, | ||||||
2 | transfer, or encumber the stock which is the subject of the | ||||||
3 | demand prior to final determination of its fair cash value | ||||||
4 | under this Section or a final judicial determination. | ||||||
5 | (5) All of the following apply:
| ||||||
6 | (A) the articles of incorporation or bylaws of the | ||||||
7 | association do not provide a reasonable basis for | ||||||
8 | determining and paying fair cash value to an affected | ||||||
9 | stockholder;
| ||||||
10 | (B) the association and the affected stockholder | ||||||
11 | have not agreed upon the fair cash value of the stock | ||||||
12 | which is the subject of the demand;
| ||||||
13 | (C) the affected stockholder does not file a timely | ||||||
14 | complaint for judicial determination.
| ||||||
15 | (d) The fair cash value that is agreed upon by the affected | ||||||
16 | stockholder and the association, or determined using a | ||||||
17 | reasonable basis for determining and paying fair cash value in | ||||||
18 | the association's articles of incorporation or bylaws, or fixed | ||||||
19 | by a court shall be paid within 30 days as follows:
| ||||||
20 | (1) immediately to the holder of uncertificated stock; | ||||||
21 | or
| ||||||
22 | (2) upon and simultaneously with the surrender of | ||||||
23 | certificates representing certificated stock.
| ||||||
24 | Section 175. Disposing of assets of association.
| ||||||
25 | (a) As used in this Section, "substantially all" means more |
| |||||||
| |||||||
1 | than two-thirds of the association's assets, measured, in the | ||||||
2 | board's discretion, either by value as recorded in the books | ||||||
3 | and records of the association or by fair market value.
| ||||||
4 | (b) Unless the articles of incorporation or the bylaws of | ||||||
5 | an association otherwise provide, a lease, sale, exchange, | ||||||
6 | transfer, or other disposition of any assets of an association | ||||||
7 | may be made upon terms and for consideration which may consist, | ||||||
8 | in whole or in part, of money or other property, including | ||||||
9 | shares or other securities or promissory obligations of any | ||||||
10 | association or entity, as may be authorized by the board. If a | ||||||
11 | lease, sale, exchange, transfer, or other disposition, or a | ||||||
12 | series of such transactions, would dispose of all or | ||||||
13 | substantially all of the assets of the association, then the | ||||||
14 | disposition may be made only upon a written plan of disposition | ||||||
15 | prepared by the board or by a committee selected by the board | ||||||
16 | for that purpose, and adopted in the same manner as provided | ||||||
17 | for the adoption of a resolution of dissolution in Section 180. | ||||||
18 | A plan of disposition shall set forth a general description or | ||||||
19 | summary of the assets subject to disposition; the method of | ||||||
20 | disposition; the intended transferee of the assets, if known to | ||||||
21 | the board; and a general description of any material effect the | ||||||
22 | board believes the disposition will have on the interests of | ||||||
23 | the members and stockholders. Notice of a meeting of the | ||||||
24 | members at which a plan of disposition will be voted on shall | ||||||
25 | be given to all members, whether or not entitled to vote at the | ||||||
26 | meeting. The notice shall be accompanied by a copy or summary |
| |||||||
| |||||||
1 | of the plan of disposition and a ballot for those members | ||||||
2 | entitled to vote on the plan. | ||||||
3 | (c) The association, by its board, may abandon a plan of | ||||||
4 | disposition, subject to the contract rights of other persons, | ||||||
5 | if the power of abandonment is conferred upon the board either | ||||||
6 | by the terms of the transaction or in the plan of disposition.
| ||||||
7 | (d) An action to set aside a disposition of assets by an | ||||||
8 | association, on the ground that any law applicable to the | ||||||
9 | lease, sale, exchange, transfer, or other disposition of all or | ||||||
10 | substantially all the assets of the association has not been | ||||||
11 | complied with, shall be brought within 90 days after such | ||||||
12 | transaction, or the action is forever barred.
| ||||||
13 | Section 180. Voluntary dissolution.
| ||||||
14 | (a) An association may be dissolved voluntarily in the | ||||||
15 | manner provided in this Section.
| ||||||
16 | (b) A resolution of dissolution for an association shall | ||||||
17 | state both of the following:
| ||||||
18 | (1) that the association elects to be dissolved; and
| ||||||
19 | (2) any additional provision considered necessary with | ||||||
20 | respect to the proposed dissolution and winding up.
| ||||||
21 | (c) Before subscriptions for membership and any stock or | ||||||
22 | other ownership interest have been received, the incorporators | ||||||
23 | or a majority of the incorporators may adopt, by a writing | ||||||
24 | signed by them, a resolution of dissolution.
| ||||||
25 | (d) The directors may adopt a resolution of dissolution in |
| |||||||
| |||||||
1 | the following cases:
| ||||||
2 | (1) when the association has been adjudged bankrupt or | ||||||
3 | has made a general assignment for the benefit of creditors;
| ||||||
4 | (2) by leave of the court, when a receiver has been | ||||||
5 | appointed in a general creditors' suit or in any suit in | ||||||
6 | which the affairs of the association are to be wound up;
| ||||||
7 | (3) when substantially all of the assets have been sold | ||||||
8 | at judicial sale or otherwise; or
| ||||||
9 | (4) when the period of existence of the association | ||||||
10 | specified in its articles has expired.
| ||||||
11 | (e) At a meeting held for such purpose, the members may | ||||||
12 | adopt a resolution of dissolution by the affirmative vote of | ||||||
13 | 60% of the member votes cast on the proposal or, if the | ||||||
14 | articles provide or permit, by the affirmative vote of a | ||||||
15 | greater or lesser proportion though not less than a majority, | ||||||
16 | of the voting power, of any particular class as is required by | ||||||
17 | the articles of incorporation. Notice of the meeting of the | ||||||
18 | members shall be given to all members and stockholders whether | ||||||
19 | or not entitled to vote.
| ||||||
20 | (f) Upon the adoption of a resolution of dissolution, a | ||||||
21 | certificate shall be filed with the Secretary of State, on a | ||||||
22 | form prescribed by the Secretary of State. | ||||||
23 | (g) The certificate described in subsection (f) of this | ||||||
24 | Section shall be signed as follows:
| ||||||
25 | (1) when the resolution of dissolution is adopted by | ||||||
26 | the incorporators, the certificate shall be signed by not |
| |||||||
| |||||||
1 | less than a majority of the incorporators; | ||||||
2 | (2) when the resolution is adopted by the directors or | ||||||
3 | by the members, the certificate shall be signed by any | ||||||
4 | authorized officer. However, if no authorized officer | ||||||
5 | executes and files the certificate within 30 days after the | ||||||
6 | adoption of the resolution or upon any date specified in | ||||||
7 | the resolution as the date upon which the certificate is to | ||||||
8 | be filed or upon the expiration of any period specified in | ||||||
9 | the resolution as the period within which the certificate | ||||||
10 | is to be filed, whichever is latest, the certificate of | ||||||
11 | dissolution may be signed by any 3 members, or if there are | ||||||
12 | fewer than 3 members, by all of the members, and shall set | ||||||
13 | forth a statement that the persons signing the certificate | ||||||
14 | are members and are filing the certificate because of the | ||||||
15 | failure of an authorized officer to do so.
| ||||||
16 | (h) Upon the filing of a certificate of dissolution, the | ||||||
17 | association shall be dissolved.
| ||||||
18 | Section 185. Public notice of voluntary dissolution. | ||||||
19 | Following the filing of the certificate of dissolution, the | ||||||
20 | directors, members, or incorporators who filed the | ||||||
21 | certificate, as the case may be, shall cause a notice of | ||||||
22 | voluntary dissolution to be published once a week on the same | ||||||
23 | day of each week for 2 successive weeks, in a newspaper | ||||||
24 | published and of general circulation in the county in which the | ||||||
25 | principal place of business of the association was to be or is |
| |||||||
| |||||||
1 | located and shall cause written notice of dissolution to be | ||||||
2 | given to all known creditors of, and to all known claimants | ||||||
3 | against, the dissolved association.
| ||||||
4 | Section 190. Action to wind up affairs or obtain | ||||||
5 | restatement of articles.
| ||||||
6 | (a) When an association is dissolved voluntarily, when the | ||||||
7 | articles of incorporation of an association have been canceled, | ||||||
8 | when a final order of a court is made dissolving an association | ||||||
9 | under Section 195, or when the period of existence of the | ||||||
10 | association specified in its articles of incorporation has | ||||||
11 | expired, the association shall cease to carry on business and | ||||||
12 | shall do only such acts as are required to wind up its affairs | ||||||
13 | or to obtain reinstatement of the articles in accordance with | ||||||
14 | Section 50.
| ||||||
15 | (b) Any claim existing or action or proceeding pending by | ||||||
16 | or against the association or which would have accrued against | ||||||
17 | it may be prosecuted to judgment, with right of appeal as in | ||||||
18 | other cases, but any proceeding, execution, or process, or the | ||||||
19 | satisfaction or performance of any order, judgment, or decree, | ||||||
20 | may be stayed as provided in Section 195.
| ||||||
21 | (c) Any process, notice, or demand against the association | ||||||
22 | may be served by delivering a copy to an officer, director, | ||||||
23 | liquidator, or person having charge of its assets or, if no | ||||||
24 | such person can be found, to the statutory agent.
| ||||||
25 | (d) The directors of the association or their successors |
| |||||||
| |||||||
1 | shall act as the board of directors in accordance with the | ||||||
2 | articles of incorporation and bylaws until the affairs of the | ||||||
3 | association are completely wound up. Subject to the orders of | ||||||
4 | courts of this State having jurisdiction over the association, | ||||||
5 | the directors shall proceed as speedily as is practicable to a | ||||||
6 | complete winding up of the affairs of the association and, to | ||||||
7 | the extent necessary or expedient to that end, shall exercise | ||||||
8 | all the authority of the association. Without limiting the | ||||||
9 | generality of such authority, the directors may fill vacancies; | ||||||
10 | elect officers; carry out contracts of the association; make | ||||||
11 | new contracts; borrow money; mortgage or pledge the property of | ||||||
12 | the association as security; sell its assets at public or | ||||||
13 | private sale; make conveyances in the association's name; lease | ||||||
14 | real estate for any term, including 99 years renewable forever; | ||||||
15 | settle or compromise claims in favor of or against the | ||||||
16 | association; appoint or employ one or more persons as | ||||||
17 | liquidators to wind up the affairs of the association with | ||||||
18 | authority as the directors see fit to grant; cause the title to | ||||||
19 | any of the assets of the association to be conveyed to such | ||||||
20 | liquidators for that purpose; apply assets to the payment of | ||||||
21 | obligations; and, after paying or adequately providing for the | ||||||
22 | payment of all known obligations of the association, distribute | ||||||
23 | the remainder of the assets either in cash or in kind among the | ||||||
24 | members, patrons, and stockholders according to their | ||||||
25 | respective rights and interests. In addition, the directors may | ||||||
26 | perform all other acts necessary or expedient to the winding up |
| |||||||
| |||||||
1 | of the affairs of the association.
| ||||||
2 | (e) The directors, or any liquidator to whom the directors | ||||||
3 | grant such authority, in the course of winding up the | ||||||
4 | association's affairs, shall apply the assets of the | ||||||
5 | association in the following order:
| ||||||
6 | (1) to expenses incidental to winding up the | ||||||
7 | association's affairs;
| ||||||
8 | (2) to all legally enforceable liabilities and | ||||||
9 | obligations of the association due claimants and | ||||||
10 | creditors;
| ||||||
11 | (3) to the stockholders, members, and patrons of the | ||||||
12 | association as provided in the association's articles of | ||||||
13 | incorporation or bylaws.
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14 | (f) Without limiting the authority of the directors, any | ||||||
15 | action within the purview of this Section that is authorized or | ||||||
16 | approved at a meeting of the members by 60% of the member votes | ||||||
17 | cast thereon shall be conclusive for all purposes upon all | ||||||
18 | members, patrons, and stockholders of the association.
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19 | (g) All deeds and other instruments of the association | ||||||
20 | shall be in the name of the association and shall be executed, | ||||||
21 | acknowledged, and delivered by the officers appointed by the | ||||||
22 | directors.
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23 | (h) At any time during the winding up of its affairs, the | ||||||
24 | association by its directors may make application to the court | ||||||
25 | of the county in this State in which the principal place of | ||||||
26 | business of the association is located to have the winding up |
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1 | continued under supervision of the court, as provided in | ||||||
2 | Section 195. However, if the association has no principal place | ||||||
3 | of business in this State, the application described in this | ||||||
4 | Section may be made to a court in the county in this State | ||||||
5 | where the statutory agent resides.
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6 | Section 195. Judicial liquidations. | ||||||
7 |
(a) Without limiting the generality of its authority and | ||||||
8 | subject to subsection (b), the court of the county in this | ||||||
9 | State in which is located the principal place of business of a | ||||||
10 | voluntarily dissolved association or of an association whose | ||||||
11 | articles have been canceled or whose period of existence has | ||||||
12 | expired, upon the complaint of the association, or a majority | ||||||
13 | of the directors, or 10% of the members or 20 members, | ||||||
14 | whichever is less, and upon such notice to all the directors | ||||||
15 | and other persons interested as the court considers proper, at | ||||||
16 | any time may order and adjudge any of the following matters:
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17 | (1) The presentation and proof of all claims and | ||||||
18 | demands against the association and of all rights, | ||||||
19 | interests, or liens in or on any of its property; the | ||||||
20 | fixing of the time and the manner in which such proof shall | ||||||
21 | be made and the person to whom presentation shall be made; | ||||||
22 | and the barring from participation in any distribution of | ||||||
23 | assets of all persons failing to make and present proofs as | ||||||
24 | required by the order of the court.
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25 | (2) The stay of the prosecution of any proceeding |
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1 | against the association or involving any of its property; | ||||||
2 | the requirement that the parties to the proceeding present | ||||||
3 | and prove their claims, demands, rights, interests, or | ||||||
4 | liens at the time and in the manner required of creditors | ||||||
5 | or others; or the grant of leave to bring or maintain an | ||||||
6 | independent proceeding to enforce liens.
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7 | (3) The settlement or determination of all claims of | ||||||
8 | every nature against the association or any of its | ||||||
9 | property; the determination of the assets required to be | ||||||
10 | retained to pay or provide for the payment of such claims | ||||||
11 | or any claim; the determination of the assets available for | ||||||
12 | distribution among and rights of members, patrons, and | ||||||
13 | stockholders; and the making of new parties to the | ||||||
14 | proceeding so far as the court considers proper for the | ||||||
15 | determination of all matters.
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16 | (4) The presentation and filing of intermediate and | ||||||
17 | final accounts of the directors or of the liquidators and | ||||||
18 | hearings on them; the allowance, disallowance, or | ||||||
19 | settlement of the accounts; and the discharge of the | ||||||
20 | directors, the liquidators, or any of them from their | ||||||
21 | duties and liabilities. | ||||||
22 | (5) The appointment of a special master commissioner to | ||||||
23 | hear and determine any matters with authority as the court | ||||||
24 | considers proper.
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25 | (6) The filling of any vacancies in the number of | ||||||
26 | directors or liquidators when the directors are unable to |
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1 | act on the vacancies for want of a quorum or for any other | ||||||
2 | reason.
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3 | (7) The appointment of a receiver, in accordance with | ||||||
4 | the usage of a court in equitable matters, to wind up the | ||||||
5 | affairs of the association, to take custody of any of its | ||||||
6 | property, or for any other purpose.
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7 | (8) The issuance or entry of any injunction or any | ||||||
8 | other order that the court considers proper in the | ||||||
9 | administration of the trust involved in the winding up of | ||||||
10 | the affairs of the association and the giving of notice of | ||||||
11 | the entry of injunction or order.
| ||||||
12 | (9) The allowance and payment of compensation to the | ||||||
13 | directors or any of them, to liquidators, to a receiver, to | ||||||
14 | the attorney for the complainant, or to any person properly | ||||||
15 | rendering services beneficial to the association or to | ||||||
16 | those interested in it.
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17 | (10) The entry of a judgment or decree that, if it so | ||||||
18 | provides, may operate as the deed or other instrument | ||||||
19 | ordered to be executed, or the appointment of a master to | ||||||
20 | execute such deed or instrument in the name of the | ||||||
21 | association with the same effect as if executed by an | ||||||
22 | authorized officer pursuant to authority conferred by the | ||||||
23 | directors or the members, patrons, and stockholders of the | ||||||
24 | association, whenever there is no officer or agent | ||||||
25 | competent to execute such deed or instrument, whenever the | ||||||
26 | association or its officers do not perform or comply with a |
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1 | judgment or decree of court, or whenever the court | ||||||
2 | considers it proper.
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3 | (b) If the association has no principal place of business | ||||||
4 | in this State, without limiting the generality of its | ||||||
5 | authority, the court in the county in this State where the | ||||||
6 | statutory agent resides may order and adjudge the matters | ||||||
7 | described in subsection (a).
| ||||||
8 | (c) A judicial proceeding under this Section concerning the | ||||||
9 | winding up of the affairs of an association is a special | ||||||
10 | proceeding, and final orders in the proceeding may be vacated, | ||||||
11 | modified, or reversed on appeal pursuant to the Code of Civil | ||||||
12 | Procedure.
| ||||||
13 | Section 200. Receiver; winding up affairs of association. | ||||||
14 | (a) Whenever, after an association is dissolved | ||||||
15 | voluntarily, the articles of an association have been canceled, | ||||||
16 | or the period of existence of an association has expired, a | ||||||
17 | receiver is appointed to wind up the affairs of the | ||||||
18 | association, all the claims, demands, rights, interests, or | ||||||
19 | liens of creditors, claimants, members, patrons, and | ||||||
20 | stockholders shall be determined as of the day on which the | ||||||
21 | receiver was appointed. Unless it is otherwise ordered, such | ||||||
22 | appointment vests in the receiver and successors of the | ||||||
23 | receiver the right to the immediate possession of all the | ||||||
24 | property of the association, which shall, if so ordered, | ||||||
25 | execute and deliver conveyances of such property to the |
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| |||||||
1 | receiver.
| ||||||
2 | (b) Any officer, director, member, or other person, whether | ||||||
3 | a resident of the state or a nonresident and however | ||||||
4 | interested, may be appointed as receiver.
| ||||||
5 | (c) The receiver shall have all the authority vested in the | ||||||
6 | directors and officers of the association, shall exercise such | ||||||
7 | authority subject to such orders as are made by the court, and | ||||||
8 | may be required to qualify by giving bond to the State in such | ||||||
9 | amount as the court fixes, with surety to the satisfaction of | ||||||
10 | the clerk of the court, conditioned for the faithful discharge | ||||||
11 | of duties and for a due accounting for all money or property | ||||||
12 | received.
| ||||||
13 | Section 205. Marketing agreements.
| ||||||
14 | (a) A cooperative and any member may make marketing | ||||||
15 | agreements, whether written separately or contained in the | ||||||
16 | bylaws, in which the member agrees to do any of the following:
| ||||||
17 | (1) sell, market, or deliver all or any specified part | ||||||
18 | of products produced or to be produced either by the member | ||||||
19 | or under the member's control, to or through the | ||||||
20 | cooperative or any facilities furnished by it;
| ||||||
21 | (2) authorize the cooperative or any facilities | ||||||
22 | furnished by it to act for the member in any manner with | ||||||
23 | respect to all or any specified part of products produced | ||||||
24 | or to be produced either by the member or under the | ||||||
25 | member's control and any services to be furnished by the |
| |||||||
| |||||||
1 | member;
| ||||||
2 | (3) buy or procure all or a specified part of goods or | ||||||
3 | services from or through the cooperative or any facilities | ||||||
4 | furnished by it; or
| ||||||
5 | (4) authorize the cooperative or any facilities | ||||||
6 | furnished by it to act for the member in any manner in the | ||||||
7 | procurement of goods or services for the member.
| ||||||
8 | (b) The term of marketing agreements may not exceed 10 | ||||||
9 | years.
| ||||||
10 | (c) A marketing agreement authorized by subsection (a) may | ||||||
11 | require that liquidated damages be paid by the member in the | ||||||
12 | event of a breach of the marketing agreement. Liquidated | ||||||
13 | damages shall be specific, reasonable sums. Any provisions for | ||||||
14 | liquidated damages shall be enforceable and not regarded as | ||||||
15 | penalties. | ||||||
16 | (d) If a member breaches or threatens to breach a marketing | ||||||
17 | agreement authorized by this Section, the cooperative shall be | ||||||
18 | entitled to an injunction to prevent the breach or any further | ||||||
19 | breach, and to a decree of specific performance, unless the | ||||||
20 | marketing agreement provides an alternative remedy or damages | ||||||
21 | are more practicable than specific performance under the | ||||||
22 | circumstances.
| ||||||
23 | Section 210. Foreign association. Any foreign association | ||||||
24 | may carry on any proper activities in this State upon | ||||||
25 | compliance with the general regulations applicable to foreign |
| |||||||
| |||||||
1 | corporations desiring to do business in this State. All | ||||||
2 | contracts that could be made by any association incorporated | ||||||
3 | under this Act and that are made by or with such foreign | ||||||
4 | associations, shall be enforceable in this State with all of | ||||||
5 | the remedies set forth in this Act.
| ||||||
6 | Section 215. Membership in other organizations. An | ||||||
7 | association may organize, form, operate, own, control, have an | ||||||
8 | interest in, own stock of, or be a member of any other | ||||||
9 | cooperative, corporation, or other form of organization.
| ||||||
10 | Section 220. Stock not considered securities. Membership | ||||||
11 | stock and patronage stock of a cooperative are not to be | ||||||
12 | considered securities under the Illinois Securities Law of | ||||||
13 | 1953.
| ||||||
14 | Section 225. Application of laws.
| ||||||
15 | (a) Except as otherwise provided in this Act, this Act | ||||||
16 | applies to all associations, whether organized under this Act | ||||||
17 | prior to the effective date of this Act or on or after that | ||||||
18 | date.
| ||||||
19 | (b) Any law that is in conflict with this Act shall be | ||||||
20 | construed as not applying to associations provided for in this | ||||||
21 | Act.
| ||||||
22 | (805 ILCS 310/Act rep.) |
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| |||||||
1 | Section 999. The Co-operative Act is repealed.
|