Full Text of HB3830 99th General Assembly
HB3830ham001 99TH GENERAL ASSEMBLY | Rep. Will Guzzardi Filed: 4/20/2015
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| 1 | | AMENDMENT TO HOUSE BILL 3830
| 2 | | AMENDMENT NO. ______. Amend House Bill 3830 by inserting | 3 | | after the title the following: | 4 | | "WHEREAS, The purpose of this Act is to promote the growth | 5 | | and development of cooperative enterprises in the State of | 6 | | Illinois; and | 7 | | WHEREAS, The General Assembly acknowledges that such | 8 | | democratically owned and controlled enterprises are based on | 9 | | the values of self-help, self-responsibility, democracy, | 10 | | equality, equity, and solidarity, believes that those values | 11 | | deserve the support of our statutes, and therefore seeks to | 12 | | modernize the laws governing cooperatives so that enterprises | 13 | | operating in this manner may more easily form, expand, create | 14 | | jobs, and strengthen our economy; therefore"; and | 15 | | by replacing everything after the enacting clause with the | 16 | | following:
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| 1 | | "Section 1. Short title. This Act may be cited as the | 2 | | Illinois Cooperative Act. | 3 | | Section 5. Definitions. In this Act:
| 4 | | "Association" means any corporation organized under this | 5 | | Act. | 6 | | "Board" means the board of directors of an association. | 7 | | "Cooperative" means an association or a foreign | 8 | | association. | 9 | | "Entity", except as otherwise provided, means a foreign | 10 | | association, a foreign or domestic corporation other than a | 11 | | cooperative, or a foreign or domestic limited liability | 12 | | company. | 13 | | "Foreign association" means a corporation organized under | 14 | | the cooperative laws of another state or the District of | 15 | | Columbia or a foreign corporation that operates on a | 16 | | cooperative basis that is organized under the corporation laws | 17 | | of another state, the District of Columbia, or the United | 18 | | States. | 19 | | "Marketing agreement" means an agreement, contract, or | 20 | | other arrangement between a cooperative and a member in which | 21 | | the member agrees to market all or a part of the products or | 22 | | produce produced by the member, or agrees to purchase all or a | 23 | | part of the member's requirements for inputs, services, or | 24 | | supplies. | 25 | | "Member" means a patron of a cooperative who has been |
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| 1 | | qualified and accepted into membership in a cooperative. | 2 | | "Membership stock" means any class of stock or other equity | 3 | | interest in a cooperative, continuous ownership of which is | 4 | | required for membership in the cooperative. | 5 | | "Patron" means a person with whom a cooperative conducts | 6 | | business and has made an enforceable agreement to allocate and | 7 | | distribute a patronage dividend or per-unit retain allocation, | 8 | | in accordance with federal income tax law. | 9 | | "Patronage stock" means any stock or other equity interest | 10 | | in a cooperative that was originally issued by the cooperative | 11 | | with respect to patronage transactions. | 12 | | "Person" includes a natural person, partnership, | 13 | | corporation, cooperative, or other entity. | 14 | | "Producer" means a person engaged in the production of | 15 | | agricultural products for the market.
| 16 | | Section 10. Purposes. | 17 | | (a) An association may be organized under this Act for any | 18 | | lawful purpose permitted to corporations by the laws of this | 19 | | State, except any such purpose that is inconsistent with the | 20 | | provisions of this Act. This Section does not authorize any | 21 | | professional services otherwise prohibited by law. | 22 | | (b) Associations are organized for the primary purpose of | 23 | | providing services to their members, under such members' | 24 | | democratic ownership and control. | 25 | | (c) A municipal power agency organized under the Illinois |
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| 1 | | Municipal Code is not an association for the purposes of this | 2 | | Act. | 3 | | Section 15. Powers of an association.
An association | 4 | | incorporated under this Act shall have the following powers: | 5 | | (1) It may make contracts, incur liabilities, and | 6 | | borrow money; issue capital stock and other equity | 7 | | interests and issue certificates therefor; acquire | 8 | | property; and dispose of, mortgage, pledge, lease, or | 9 | | otherwise use in any manner, any of its property, or any | 10 | | interest in its property, wherever situated. | 11 | | (2) It may invest its funds, lend money for its | 12 | | purposes, and hold any property as security for repayment. | 13 | | (3) It may act as the agent or representative of any | 14 | | members or other patrons in any activities authorized by | 15 | | this Act. | 16 | | (4) It may conduct its business and affairs, have | 17 | | offices, and exercise its power in the United States or in | 18 | | any foreign country. | 19 | | (5) It may establish reserves and invest these funds. | 20 | | (6) It may buy, hold, and exercise all privileges of | 21 | | ownership over such real or personal property as is | 22 | | necessary, convenient, or incidental to the conduct of any | 23 | | authorized business of the association. | 24 | | (7) It may establish, secure, own, and develop patents, | 25 | | trademarks, copyrights, service marks, and other |
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| 1 | | intellectual property. | 2 | | (8) Notwithstanding the provisions of the Uniform | 3 | | Disposition of Unclaimed Property Act, it may effectuate | 4 | | the forfeiture of any unclaimed stock or other equity | 5 | | interests, dividends, and patronage allocations, for which | 6 | | the owner cannot be found after a period of 3 years. Notice | 7 | | of the existence of unclaimed stock or other equity | 8 | | interests and a request for written acknowledgment from the | 9 | | owner to the association shall be evidence of a bona fide | 10 | | attempt to deliver the unclaimed stock or other equity | 11 | | interests to the owner. If the notice is not acknowledged | 12 | | within 30 days after the notice is sent or within the | 13 | | period specified in the notice, if longer, all such | 14 | | unclaimed stock or other equity interests specified in the | 15 | | notice are forfeited and become the property of the | 16 | | association. | 17 | | (9) It may make donations for charitable, scientific, | 18 | | educational, community development, or religious purposes, | 19 | | and may use all or part of the funds forfeited to the | 20 | | association under item (8) for these purposes. | 21 | | (10) It may do everything necessary, suitable, or | 22 | | proper for the accomplishment of any of the purposes | 23 | | enumerated in this Section. | 24 | | In addition it may exercise and possess all powers, rights, | 25 | | and privileges necessary or incidental to the purposes for | 26 | | which the association is organized or to the activities in |
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| 1 | | which it is engaged, and any other powers, rights, and | 2 | | privileges granted to corporations by the laws of this State, | 3 | | except as are inconsistent with the provisions of this Act. | 4 | | Section 20. Use of words in name; prohibition.
| 5 | | (a) The name of any association organized under this Act | 6 | | shall include the word or abbreviation "cooperative," "coop," | 7 | | "co-operative", "co-op", "association", or "assn.". | 8 | | (b) No corporation or other person organized or applying to | 9 | | do business in this State shall use the word or abbreviation | 10 | | "cooperative," "coop," "co-operative," or "co-op" as a part of | 11 | | its corporate or other business name or title, unless at least | 12 | | one of the following applies: | 13 | | (1) It is organized under this Act or has converted to | 14 | | an association under this Act. | 15 | | (2) It is organized and operating on a cooperative | 16 | | basis under the General Not For Profit Corporation Act of | 17 | | 1986 or the Agricultural Co-Operative Act, or it is a | 18 | | corporation organized and operating under the Business | 19 | | Corporation Act of 1983 for the purpose of ownership or | 20 | | administration of residential property on a cooperative | 21 | | basis. | 22 | | (3) It is a foreign corporation that is organized and | 23 | | operating on a cooperative basis as permitted by the laws | 24 | | under which it is organized that has complied with the | 25 | | provisions of this Act. |
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| 1 | | (4) It is organized and operating in accordance with | 2 | | the cooperative laws of another state, the District of | 3 | | Columbia, or the United States and has complied with the | 4 | | provisions of this Act. | 5 | | (5) It is a state or federally chartered credit union.
| 6 | | Section 22. Powers of Secretary of State. The Secretary of | 7 | | State shall have the power and authority reasonably necessary | 8 | | to administer this Act efficiently and to perform the duties | 9 | | therein imposed. The Secretary of State shall have the power to | 10 | | promulgate, amend, or repeal rules and regulations deemed | 11 | | necessary to efficiently administer this Act. The rules adopted | 12 | | by the Secretary of State under this Act shall be effective in | 13 | | the manner provided for in the Illinois Administrative | 14 | | Procedure Act. | 15 | | Section 23. List of associations; exchange of information. | 16 | | The Secretary of State shall publish annual and daily lists of | 17 | | associations formed under this Act in the same manner as is | 18 | | provided in Section 1.25 of the Business Corporation Act of | 19 | | 1983. | 20 | | Section 25. Number of incorporators; registered agent. | 21 | | (a) Two or more individuals may form an association under | 22 | | this Act. | 23 | | (b) An association shall have and maintain a registered |
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| 1 | | agent upon whom any process, notice, or demand against the | 2 | | association may be served. The agent shall be one of the | 3 | | following: | 4 | | (1) A natural person who is a resident of this State. | 5 | | (2) A domestic or foreign corporation, limited | 6 | | liability company, limited partnership, limited liability | 7 | | partnership, or association that has a business address in | 8 | | this State and whose purpose permits it to act as a | 9 | | registered agent. The agent shall meet the requirements of | 10 | | Illinois law for an entity of the agent's type to transact | 11 | | business or exercise privileges in this State. | 12 | | Section 30. Articles of incorporation.
| 13 | | (a) The articles of incorporation of an association shall | 14 | | set forth all of the following: | 15 | | (1) The name of the association and the address of its | 16 | | principal place of business. | 17 | | (2) The association's purposes, as permitted by this | 18 | | Act. It is sufficient to state in the articles that the | 19 | | association may engage in any activity within the purposes | 20 | | for which associations may be organized under this Act. | 21 | | (3) The address, including street and number, of the | 22 | | association's initial registered office in this State and | 23 | | the name of its initial registered agent at that office. | 24 | | (4) The names and addresses of the incorporators. | 25 | | (5) The number of directors to be elected at the first |
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| 1 | | meeting of shareholders. | 2 | | (6) Whether the association is organized with or | 3 | | without capital stock and: | 4 | | (A) if the association is organized without | 5 | | capital stock, the articles shall set forth the rules | 6 | | by which the property rights and interests of each | 7 | | member are to be determined; and | 8 | | (B) if the association is organized with capital | 9 | | stock, the total amount of the stock which the | 10 | | association is authorized to issue, the number and par | 11 | | value of the shares, and dividend rights, if any;
if | 12 | | there is more than one class of stock, the articles | 13 | | shall set forth a statement of the number of shares in | 14 | | each class and a statement of the designations, | 15 | | preferences, qualifications, limitations, | 16 | | restrictions, and special or relative rights of the | 17 | | shares in each class. | 18 | | (7) If the association may issue shares of any | 19 | | preferred or special class in series, the designation of | 20 | | each series and a statement of the variations in the | 21 | | relative rights and preferences of the different series, if | 22 | | the same are fixed in the articles of incorporation, or a | 23 | | statement of the authority vested in the board of directors | 24 | | to establish series and determine the variations in the | 25 | | relative rights and preferences of the different series. | 26 | | (b) The articles may include additional provisions, |
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| 1 | | consistent with law, including provisions that are required or | 2 | | permitted to be set forth in the bylaws. The articles may also | 3 | | contain provisions relating to any Sections of this Act that | 4 | | give discretion to the association to modify default rules or | 5 | | to prohibit or permit certain actions, if and only if such | 6 | | provisions are included in the articles, including, but not | 7 | | limited to, subsection (e) of Section 40, subsection (g) of | 8 | | Section 95, paragraph (b)(2) of Section 170, and subsection (e) | 9 | | of Section 180. | 10 | | (c) The articles shall be signed by the incorporators and | 11 | | filed with the Secretary of State in accordance with Section | 12 | | 55. The legal existence of an association begins upon the | 13 | | filing of the articles and, unless the articles provide | 14 | | otherwise, its period of existence is perpetual. | 15 | | Section 35. Amendment or restatement of articles. | 16 | | (a) The articles of incorporation of an association may be | 17 | | altered or amended at any annual meeting of the association or | 18 | | at any special meeting called for that purpose, provided that | 19 | | the text of the proposed change, or a general description of | 20 | | the change, is contained in the notice of the meeting. An | 21 | | amendment shall first be approved by two-thirds of the | 22 | | directors and shall then be adopted by an affirmative vote of | 23 | | 60% of the member votes cast on the amendment or, if the | 24 | | articles or bylaws provide or permit, by the affirmative vote | 25 | | of a greater majority or by the affirmative vote of a simple |
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| 1 | | majority of all member votes eligible to be cast on the | 2 | | amendment. Any association controlled directly and equally by | 3 | | members, without a board of directors, shall vote as members | 4 | | and need not first vote as directors. | 5 | | (b) Amendments to the articles of incorporation, when so | 6 | | adopted, shall be filed in accordance with Section 55. | 7 | | (c) The board of an association may adopt a restatement of | 8 | | the articles without a member vote if the restatement merely | 9 | | incorporates amendments previously approved by the board and | 10 | | adopted by the members. An association may, by action taken in | 11 | | the manner required for an amendment, adopt restated articles | 12 | | that contain amendments made at the time of the restatement. | 13 | | Restated articles shall state that they are restated, or | 14 | | restated and amended, if amendments are adopted with the | 15 | | restatement, and shall supersede the existing articles and | 16 | | amendments. Restated articles shall meet the requirements of | 17 | | Section 30, except that the names and addresses of the | 18 | | incorporators and initial directors may be omitted. A | 19 | | restatement of the articles shall be filed in the manner | 20 | | prescribed for an amendment of the articles. | 21 | | (d) Except as provided in the articles of incorporation or | 22 | | bylaws, the board may adopt an amendment to the articles of | 23 | | incorporation without a member vote in any of the following | 24 | | cases: | 25 | | (1) to change the principal place of business of the | 26 | | association;
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| 1 | | (2) to designate and determine the rights and | 2 | | restrictions of a series within a class of capital stock, | 3 | | if permitted by the articles; | 4 | | (3) to reduce the authorized number of shares of any | 5 | | class or series of capital stock to any number down to and | 6 | | including the number of the shares issued and outstanding, | 7 | | and to assign the authorization for the number of shares so | 8 | | reduced to another class or classes of capital stock | 9 | | previously authorized; | 10 | | (4) after a merger, consolidation, conversion, | 11 | | division, or occurrence of any other contingent event | 12 | | referred to in the articles of incorporation, to eliminate | 13 | | from the articles any statement or provision pertaining | 14 | | exclusively to the merger, consolidation, conversion, | 15 | | division, or occurrence, and to make other changes required | 16 | | by such elimination, but only after the deleted item has | 17 | | been superseded in accordance with the articles of | 18 | | incorporation or otherwise is no longer in effect. | 19 | | Section 40. Voting on amendment. | 20 | | (a)(1) Unless the board provides that division (a)(3) of | 21 | | this Section applies to an amendment to the articles of | 22 | | incorporation, a holder of stock other than membership stock or | 23 | | patronage stock who is affected by a proposed amendment to the | 24 | | articles shall be entitled to cast one vote on the amendment | 25 | | regardless of the par or stated value of the stock, the number |
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| 1 | | of shares, or the number of affected classes of stock held. | 2 | | (2) A member holding stock affected by a proposed amendment | 3 | | may vote only as a member and shall not be entitled to vote or | 4 | | demand fair cash value as an affected stockholder. | 5 | | (3) The board may provide that a stockholder otherwise | 6 | | entitled to vote under division (a)(1) of this Section shall | 7 | | instead be entitled to payment of fair cash value of the | 8 | | affected stock held by such stockholder in accordance with | 9 | | Section 170. | 10 | | (b) For purposes of this Section, a holder of stock is | 11 | | affected as to any class of stock owned by the holder only if | 12 | | an amendment would expressly do any of the following: | 13 | | (1) decrease the dividends to which that class may be | 14 | | entitled or change the method by which the dividend rate on | 15 | | that class is fixed; | 16 | | (2) further restrict rights to transfer that class; | 17 | | (3) give to another existing or any new class of stock | 18 | | or equity interest not previously entitled thereto any | 19 | | preference, as to dividends or upon dissolution, that is | 20 | | higher than preferences of that class; | 21 | | (4) change the par value of shares of that class or of | 22 | | any other class having the same or higher preferences as to | 23 | | dividends or upon dissolution; | 24 | | (5) increase the number of authorized shares of any | 25 | | class having a higher preference as to dividends or upon | 26 | | dissolution; or |
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| 1 | | (6) require or permit an exchange of shares of any | 2 | | class with lower preferences as to dividends or upon | 3 | | dissolution for shares of any other class with higher | 4 | | preferences. | 5 | | (c) If any proposed amendment will alter or change the | 6 | | powers, preferences, or special rights of one or more series of | 7 | | any class so as to affect them adversely, but shall not so | 8 | | affect the entire class, then only the shares of the series so | 9 | | affected by the amendment shall be considered a separate class | 10 | | for the purposes of subsection (b) of this Section. | 11 | | (d) If stockholders are entitled to vote on an amendment, | 12 | | the amendment is adopted only if all of the following | 13 | | conditions are met: | 14 | | (1) notice of the meeting, an exact copy of the | 15 | | proposed amendment, and a ballot on the amendment have been | 16 | | sent to each affected stockholder; | 17 | | (2) approval by the members under Section 35; and | 18 | | (3) approval by a simple majority of the affected | 19 | | stockholders present and voting at a meeting of the | 20 | | stockholders. | 21 | | (e) This Section does not apply to stock issued prior to | 22 | | the effective date of this Act, unless the association adopts | 23 | | an amendment to its articles of incorporation making the stock | 24 | | subject to this Section. | 25 | | Section 45. Evidence of incorporation. |
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| 1 | | (a) A copy of the association's articles of incorporation | 2 | | or restated articles filed in the office of the Secretary of | 3 | | State, and certified by the Secretary of State, is conclusive | 4 | | evidence, except as against the State, that the association has | 5 | | been incorporated under the laws of this State; and a copy | 6 | | certified by the Secretary of State of any certificate of | 7 | | amendment or other certificate is prima-facie evidence of such | 8 | | amendment or of the facts stated in the certificate, and of the | 9 | | observance and performance of all antecedent conditions | 10 | | necessary to the action that the certificate purports to | 11 | | evidence. | 12 | | (b) A copy of restated articles filed in the office of the | 13 | | Secretary of State, and certified by the Secretary of State, | 14 | | shall be accepted in this State and other jurisdictions in lieu | 15 | | of the original articles, amendments to the articles, and prior | 16 | | amended articles. | 17 | | (c) The original or a copy of the record of minutes of the | 18 | | proceedings of the incorporators of an association, or of the | 19 | | proceedings or meetings of the members or any class of | 20 | | stockholders, or of the directors, or of any committee thereof, | 21 | | including any written consent, waiver, release, or agreement | 22 | | entered in such record or minutes, or the original or a copy of | 23 | | a statement that no specified proceeding was had or that no | 24 | | specified consent, waiver, release, or agreement exists, | 25 | | shall, when certified to be true by the secretary or an | 26 | | assistant secretary of an association, be received in the |
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| 1 | | courts as prima-facie evidence of the facts stated therein. | 2 | | Every meeting referred to in the certified original or copy is | 3 | | considered duly called and held, and all motions and | 4 | | resolutions adopted and proceedings had at the meeting are | 5 | | considered duly adopted and had, and all elections of directors | 6 | | and all elections or appointments of officers chosen at the | 7 | | meeting are considered valid, until the contrary is proved; and | 8 | | whenever a person who is not a member, patron, or stockholder | 9 | | of an association has acted in good faith in reliance upon any | 10 | | such certified original or copy, it is conclusive in that | 11 | | person's favor.
| 12 | | Section 50. Reinstatement of association.
| 13 | | (a) An association that has been dissolved in a manner | 14 | | other than for a voluntary dissolution as provided in Section | 15 | | 180, or a judicial dissolution, may be reinstated by filing, on | 16 | | a form prescribed by the Secretary of State for the | 17 | | administration of this Act, an application for reinstatement, | 18 | | including the name and address of the association's registered | 19 | | agent, and by filing all reports and paying all fees, franchise | 20 | | taxes, penalties, and interest then due and theretofore | 21 | | becoming due. | 22 | | (b) Upon reinstatement of an association's articles of | 23 | | incorporation, the rights, privileges, and franchises, | 24 | | including all real or personal property rights and credits and | 25 | | all contract and other rights, of the association existing at |
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| 1 | | the time that the dissolution became effective shall continue | 2 | | in effect as if the dissolution had not occurred; and the | 3 | | association shall again be entitled to exercise the rights, | 4 | | privileges, and franchises authorized by its articles.
| 5 | | Section 55. Filing articles; certificates of amendment; | 6 | | annual reports.
| 7 | | (a) For filing articles of incorporation or a certificate | 8 | | of amendment of articles or a certificate of merger, | 9 | | consolidation, division, dissolution, or reinstatement, an | 10 | | association organized under this Act shall pay to the Secretary | 11 | | of State the same fees required of corporations organized under | 12 | | the Business Corporation Act of 1983. In the case of a | 13 | | certificate of division, the filing fee shall be the same as | 14 | | for a certificate of merger or consolidation. | 15 | | (b) Associations shall file the same annual reports and pay | 16 | | the same fees, franchise taxes, penalties, and interest | 17 | | required of corporations under the Business Corporation Act of | 18 | | 1983, except that if the association is organized without | 19 | | capital stock, the association shall report its paid-in capital | 20 | | as the total of its membership interests. | 21 | | (c) When the articles of incorporation, or a certificate of | 22 | | amendment of articles, or a certificate of merger, | 23 | | consolidation, conversion, division, or dissolution is filed | 24 | | with the Secretary of State, the Secretary of State shall, if | 25 | | the articles or certificate complies with this Act, endorse |
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| 1 | | approval thereon, the date of filing, a file number, and make a | 2 | | legible copy thereof by any authorized method. | 3 | | (d) All persons shall have the opportunity to acquire a | 4 | | copy of the articles and other certificates filed in the office | 5 | | of the Secretary of State, but no person dealing with the | 6 | | association shall be charged with constructive notice of the | 7 | | contents of any such articles or certificates by reason of the | 8 | | filing. | 9 | | Section 60. Dividends; stock; security interest.
| 10 | | (a) An association may pay dividends annually on its | 11 | | capital stock at a rate not exceeding 8% of its par value for | 12 | | any year, but dividends may be cumulative. The realized net | 13 | | earnings of the cooperative, to the extent attributable to | 14 | | business done with or for its patrons, shall be allocated and | 15 | | distributed among patrons in proportion to their patronage and | 16 | | in such manner and at such time as to constitute patronage | 17 | | dividends or per-unit retain allocations within the meaning of | 18 | | federal income tax law. | 19 | | (b) Notwithstanding subsection (a), the articles or bylaws | 20 | | may provide for any of the following: | 21 | | (1) that eligibility for patronage dividends is | 22 | | limited to members or to members in good standing; | 23 | | (2) that the net earnings of the cooperative shall be | 24 | | retained for the capital and development needs of the | 25 | | cooperative and the improvement and extension of its |
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| 1 | | services; | 2 | | (3) that the number of allocation units of the | 3 | | cooperative shall be limited in any reasonable and | 4 | | equitable manner; or | 5 | | (4) that patronage-sourced net operating losses of the | 6 | | cooperative shall not be allocated to patrons but shall be | 7 | | carried forward to offset patronage-sourced net earnings | 8 | | of subsequent years. | 9 | | (c) An association, at any time, may purchase its own | 10 | | common stock at par or book value as determined by the board. | 11 | | (d) An association shall have a continued perfected | 12 | | security interest in its membership stock and patronage stock | 13 | | to secure payment of any indebtedness or other obligation of | 14 | | the holder or owner to the association. Notwithstanding | 15 | | Articles 8 and 9 of the Uniform Commercial Code, the security | 16 | | interest shall have priority over all other perfected security | 17 | | interests. Unless otherwise provided in the association's | 18 | | articles of incorporation or bylaws, or by contract, a member | 19 | | or other patron has no right to compel an association to offset | 20 | | its membership stock or patronage stock against any | 21 | | indebtedness or obligation owed to the association.
| 22 | | Section 62. Membership stock certificates; disclosure | 23 | | document. | 24 | | (a) An association may issue, but is not required to issue, | 25 | | membership stock certificates, if it is organized with |
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| 1 | | membership stock. In the event that such certificates are | 2 | | issued, the certificates shall state the information required | 3 | | to be contained in the disclosure document described in | 4 | | subsection (c). | 5 | | (b) If an association does not issue certificates, it shall | 6 | | issue a receipt or written advice of purchase to anyone | 7 | | purchasing a membership or membership share, or receiving a | 8 | | patronage share. No disclosure document need be provided to an | 9 | | existing member prior to the purchase of additional memberships | 10 | | or membership shares, or to a patron receiving patronage | 11 | | shares, if that member or patron has previously been provided | 12 | | with a disclosure document which is accurate and correct as of | 13 | | the date of the membership or share transaction. | 14 | | (c) Except as provided in subsection (e), prior to issuing | 15 | | a membership or membership stock, an association shall provide | 16 | | the purchaser with a disclosure document. The disclosure | 17 | | document may be a prospectus, offering circular, brochure, | 18 | | specimen copy of the membership certificate, or similar | 19 | | document. The disclosure document shall contain the following | 20 | | information: | 21 | | (1) A statement that the association is a cooperative | 22 | | corporation. | 23 | | (2) A statement that a copy of the association's | 24 | | articles and bylaws are available at a specified internet | 25 | | website, if the association has made them electronically | 26 | | available, and that such documents will be furnished |
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| 1 | | without charge to a member or prospective member upon | 2 | | written request, and the address to which such a written | 3 | | request is to be directed. | 4 | | (3) A statement of the purchase price of a membership | 5 | | or membership share, and if such purchase price is subject | 6 | | to change, a statement of the process for making such | 7 | | change. | 8 | | (4) If there are restrictions imposed by the | 9 | | association upon the transfer of membership, a statement to | 10 | | that effect and the restrictions imposed on transfer. | 11 | | (5) If the association may levy dues, assessments, | 12 | | additional share purchases, or membership or transfer | 13 | | fees, a statement to that effect and the conditions under | 14 | | which the association may make such a levy. | 15 | | (6) If the member is required to contribute services to | 16 | | the association, a statement to that effect and the amount | 17 | | and nature of the services to be contributed to the | 18 | | association. | 19 | | (7) Whether the membership is redeemable and the | 20 | | conditions under which the membership may be redeemed at | 21 | | the option of the association or the member. | 22 | | (8) If the voting power or the proprietary interests of | 23 | | the members is unequal, a statement to that effect and the | 24 | | rule or rules by which the voting power and proprietary | 25 | | rights are to be determined. | 26 | | (9) In lieu of specifying verbatim in the disclosure |
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| 1 | | document the restrictions on the transfer of a membership, | 2 | | conditions of levy, amount and nature of services to be | 3 | | contributed, conditions under which memberships are | 4 | | redeemable, or the rules by which the voting power and | 5 | | proprietary rights of members are to be determined, the | 6 | | disclosure document may contain a statement that such | 7 | | information will be provided free of charge to a member or | 8 | | prospective member who requests it in writing. If the | 9 | | disclosure document contains such a statement it shall also | 10 | | set forth the address to which such a request is to be | 11 | | directed. | 12 | | (d) If the articles or bylaws are amended so that any | 13 | | statement required by subsection (a) on outstanding membership | 14 | | stock certificates is no longer accurate, the board may cancel | 15 | | the outstanding certificates and issue in their place new | 16 | | certificates conforming to the articles or bylaws as amended. | 17 | | (e) When new membership stock certificates are issued in | 18 | | accordance with subsection (d), the board may order holders of | 19 | | outstanding certificates to surrender and exchange them for new | 20 | | certificates within a reasonable time fixed by the board. The | 21 | | board may further provide that the holder of the certificate to | 22 | | be surrendered shall not be entitled to exercise any of the | 23 | | rights of membership until the certificate is surrendered, but | 24 | | such rights shall be suspended only after notice of the order | 25 | | is given to the holder of the certificate and only until the | 26 | | certificate is surrendered. |
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| 1 | | (f) If a transferee of a membership stock certificate has | 2 | | not previously been provided with a disclosure statement which | 3 | | is accurate and correct as of the date of registration of the | 4 | | transfer, then the association shall provide a disclosure | 5 | | document to the transferee upon registration with the | 6 | | association of the transfer of the certificate. | 7 | | Section 65. Bylaws. An association shall adopt bylaws that | 8 | | are not inconsistent with this Act or the association's | 9 | | articles of incorporation. The bylaws may provide for any of | 10 | | the following: | 11 | | (1) The time, place, and manner of calling and | 12 | | conducting the association's meetings. | 13 | | (2) The number of members constituting a quorum. If | 14 | | voting by any method other than personal appearance is | 15 | | used, members represented by a ballot may be counted in | 16 | | computing a quorum only on those matters for which the | 17 | | ballots were submitted. | 18 | | (3) The right of members to vote by ballot delivered in | 19 | | person, by mail, by electronic or telephonic transmittal, | 20 | | or any combination of these, and the conditions, manner, | 21 | | form, and effect of such votes. | 22 | | (4) Subject to the provisions of Section 75, a method | 23 | | of voting by members or delegates, and any limitations on | 24 | | voting rights of any group or class of members or | 25 | | delegates. |
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| 1 | | (5) The number of directors constituting a quorum. | 2 | | (6) The number, qualifications, compensation, duties, | 3 | | and terms of office of directors and officers, and the time | 4 | | of their election and the manner of giving notice of the | 5 | | election. | 6 | | (7) Penalties for violation of the bylaws. | 7 | | (8) The amounts of entrance, organization, and | 8 | | membership fees, if any, the manner of collecting them, and | 9 | | the purposes for which they may be used, or the par value | 10 | | and number of shares required for membership, if any. | 11 | | (9) Any amount that each member is required to pay | 12 | | annually or from time to time to carry on the business of | 13 | | the association; any charge to be paid by each member for | 14 | | services rendered by the association, and the time of | 15 | | payment and the manner of collection of such charge; and | 16 | | any marketing contract between the association and its | 17 | | members that members may be required to sign. | 18 | | (10) The number and qualifications of members of the | 19 | | association and the conditions of membership or for | 20 | | ownership of membership stock in the association. | 21 | | (11) The time and manner of permitting members to | 22 | | withdraw or the holders of membership stock to transfer | 23 | | their stock; and the manner of assignment and transfer of | 24 | | membership stock. | 25 | | (12) The conditions upon which, and the time when, the | 26 | | membership of any member ceases; and the suspension of the |
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| 1 | | rights of a member who ceases to be eligible for membership | 2 | | in the association. | 3 | | (13) The manner and effect of the expulsion of a | 4 | | member. | 5 | | (14) In the event of the death or withdrawal of a | 6 | | member or upon the expulsion of a member or the forfeiture | 7 | | of membership, any of the following: | 8 | | (A) the manner of determining the value of a | 9 | | member's interest; | 10 | | (B) provision for the purchase of a member's | 11 | | interest by the association; or | 12 | | (C) at the option of the association, provision for | 13 | | such purchase at a price fixed by appraisal by the | 14 | | board of directors of the association. | 15 | | (15) Any other provision for any matter relative to the | 16 | | control, regulation, operation, management, or government | 17 | | of the association. | 18 | | Section 70. Adoption, amendment, or repeal of bylaws.
| 19 | | (a) The initial bylaws may be adopted by the association's | 20 | | directors who are to serve until the first member meeting. | 21 | | After the initial bylaws are adopted, bylaws may be adopted and | 22 | | amended only by the members unless the articles or bylaws | 23 | | provide that the board, by a two-thirds vote of the entire | 24 | | board, may adopt or amend the bylaws or any specified bylaw. | 25 | | (b) Any bylaw adopted or amended by the board shall be |
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| 1 | | reported at the next member meeting. Any bylaw adopted or | 2 | | amended by the board shall not conflict with the association's | 3 | | articles of incorporation or with this Act. Any bylaw is | 4 | | subject to amendment or repeal by the members at any time. | 5 | | (c) Unless the bylaws provide otherwise, any bylaw may be | 6 | | adopted, amended, or repealed by a majority of the member votes | 7 | | cast on the adoption, amendment, or repeal.
| 8 | | Section 75. Members or delegates entitled to vote.
| 9 | | (a) A member entitled to vote shall have one vote, except | 10 | | that the articles or bylaws of the association may permit the | 11 | | following: | 12 | | (1) voting by members in accordance with the amount of | 13 | | business done with or through the association; | 14 | | (2) voting by delegates, including a voting system that | 15 | | provides any one or a combination of the following: | 16 | | (A) that a delegate may cast only one vote; | 17 | | (B) that a delegate may cast one vote for each | 18 | | member represented by the delegate; or | 19 | | (C) that another form of delegate voting may be | 20 | | used.
| 21 | | (3) Voting by delegates or certain members on matters | 22 | | that are to be submitted to a member vote. | 23 | | (4) Voting by any combination of the methods set forth | 24 | | in this subsection or any other method of voting set forth | 25 | | in the bylaws, provided the association is controlled by |
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| 1 | | the members. | 2 | | (b) If the articles or bylaws provide that only delegates | 3 | | or certain members are entitled to vote on matters to be | 4 | | submitted to a member vote, "member" or "members", as used in | 5 | | this Act with respect to the right of a member to vote, voting | 6 | | procedure, the required proportion of member votes, actions | 7 | | that are required or permitted to be taken by members, and the | 8 | | number of members required for a quorum, means the delegates or | 9 | | other members entitled to vote. When voting is based on the | 10 | | amount of business done, provisions of this Act requiring a | 11 | | vote of the members are met if the required membership vote is | 12 | | satisfied based on the voting power of the members.
| 13 | | Section 80. Members; meetings.
| 14 | | (a) An association shall have 2 or more members. However, | 15 | | an association may have one member if that member is a | 16 | | cooperative that has 2 or more members. | 17 | | (b) An association shall hold an annual meeting of its | 18 | | members. The board may call a special meeting of the members at | 19 | | any time. Any meeting of the members may be held at one time or | 20 | | in a series of meetings at one or more locations. | 21 | | (c) Twenty per cent of the members entitled to vote may | 22 | | file with the board a petition stating any proper business to | 23 | | be brought before the association and demanding a special | 24 | | meeting at any time for consideration of such business. Upon | 25 | | compliance with this Section, the meeting shall be called by |
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| 1 | | the board. | 2 | | (d) Notice of every meeting, together with a statement of | 3 | | the purpose of the meeting, shall be sent to each member who is | 4 | | entitled to vote at the meeting and any affected stockholder at | 5 | | the member's or stockholder's current address, as shown in the | 6 | | records of the association, at least 10 days prior to the | 7 | | meeting, in accordance with Section 85. The bylaws may provide | 8 | | that the notice be given by publication in a newspaper or | 9 | | newspapers of general circulation in the trade area of the | 10 | | association if notice to individual members and affected | 11 | | shareholders is impracticable.
| 12 | | Section 85. Methods of giving notice; waiver.
| 13 | | (a) Whenever notice is required by this Act to be given to | 14 | | any person, the notice may be given personally, by mail, or by | 15 | | electronic or telephonic transmittal. If mailed, the notice is | 16 | | given when it is deposited in the United States mail, with | 17 | | postage prepaid, addressed to the person at the person's | 18 | | address as it appears on the records of the association. If | 19 | | notice is sent by electronic or telephonic transmittal, notice | 20 | | is given when an electronic or telephonic confirmation of | 21 | | delivery is received by the association. | 22 | | (b) A signed waiver is equivalent to personal notice to the | 23 | | person signing. The waiver may be signed at any time. | 24 | | Section 90. Board of directors.
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| 1 | | (a) Except where this Act or an association's articles of | 2 | | incorporation or bylaws require that action be otherwise | 3 | | authorized or taken, all of the authority of an association | 4 | | shall be exercised by or under the direction of the board. The | 5 | | board shall consist of not less than 5 directors, elected by | 6 | | and from the members, unless (i) the number of members is less | 7 | | than 5, in which case, the number of directors may equal the | 8 | | number of members or (ii) the articles provide that members | 9 | | directly and equally control the association and that all | 10 | | director rights, responsibilities, and other requirements | 11 | | under this Act are assigned to each member, in which case there | 12 | | may be no elected board and all references to a board or | 13 | | directors in this Act apply instead to all members. | 14 | | (b) The bylaws may provide that the membership of an | 15 | | association be divided into districts or other groupings and | 16 | | that the directors shall be elected according to such districts | 17 | | or groupings. In that case, the bylaws shall specify the number | 18 | | of directors to be elected and the manner of reapportioning or | 19 | | redistricting the membership. | 20 | | (c) The bylaws may provide that one or more directors may | 21 | | be appointed by the other directors. The appointed directors | 22 | | need not be members of the association, but shall have the same | 23 | | powers, rights, and responsibilities as other directors. The | 24 | | appointed directors shall not number more than 20% of the | 25 | | entire number of directors. | 26 | | (d) The bylaws may provide for an executive committee and |
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| 1 | | may allot to the executive committee any of the functions and | 2 | | powers of the board, subject to the general direction and | 3 | | control of the board. | 4 | | (e) The association may provide a fair remuneration for the | 5 | | time actually spent by its officers and directors in its | 6 | | service, and for the services of the members of its executive | 7 | | committee. | 8 | | (f) Unless the bylaws provide otherwise, when a vacancy on | 9 | | the board occurs other than by expiration of term, the | 10 | | remaining directors on the board, by a majority vote, may elect | 11 | | a director to fill the vacancy. If the bylaws provide for an | 12 | | election of directors by the members in a district or other | 13 | | grouping, the board may call a special meeting of the members | 14 | | in that district or group to fill the vacancy.
| 15 | | (g) A director may resign at any time by giving written | 16 | | notice to the board of directors, its chairman, or to the | 17 | | president or secretary of the association. A resignation is | 18 | | effective when the notice is given unless the notice specifies | 19 | | a future date. The pending vacancy may be filled before the | 20 | | effective date, but the successor shall not take office until | 21 | | the effective date. | 22 | | Section 92. 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 |
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| 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 93. Removal of officers or directors.
| 17 | | (a) Unless the bylaws provide otherwise, a director may be | 18 | | removed, with or without cause, by a majority vote of all | 19 | | members at an annual or special meeting. | 20 | | (b) If the bylaws provide for election of directors by the | 21 | | members in a district or other grouping, then the members | 22 | | residing in that district or belonging to the group may, by a | 23 | | majority vote at an annual or special meeting, remove the | 24 | | director representing such district or group. | 25 | | (c) Any director or officer facing possible removal shall |
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| 1 | | be given fair notice of the proposed action in writing prior to | 2 | | a meeting and shall have an opportunity at the meeting to be | 3 | | heard in person or in writing.
| 4 | | Section 95. Indemnification. | 5 | | (a) Subject to subsections (b) and (c) of this Section, an | 6 | | association may indemnify or agree to indemnify any person that | 7 | | was or is a party, or is threatened to be made a party, to any | 8 | | threatened, pending, or completed civil, criminal, | 9 | | administrative, or investigative action, suit, or proceeding, | 10 | | other than an action or suit by or in the right of the | 11 | | association, because the person is or was a director, officer, | 12 | | employee, agent, or volunteer of the association or is or was | 13 | | serving at the request of the association as a trustee, | 14 | | director, officer, employee, member, manager, agent, or | 15 | | volunteer of another association, entity, partnership, joint | 16 | | venture, trust, or other enterprise. The indemnification | 17 | | described in this subsection shall be for expenses, including | 18 | | attorney's fees, judgments, fines, and amounts paid in | 19 | | settlement actually and reasonably incurred by the person in | 20 | | connection with the action, suit, or proceeding described in | 21 | | this subsection. | 22 | | (b) With respect to any noncriminal action or proceeding, | 23 | | the indemnification described in subsection (a) of this Section | 24 | | shall only be made if the person acted in good faith and in a | 25 | | manner the person reasonably believed to be in or not opposed |
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| 1 | | to the best interests of the association as described in | 2 | | subsection (d) of Section 100. | 3 | | (c) With respect to any criminal action or proceeding, the | 4 | | indemnification described in subsection (a) of this Section | 5 | | shall only be made if the person acted in good faith and in a | 6 | | manner the person reasonably believed to be in or not opposed | 7 | | to the best interests of the association as described in | 8 | | subsection (d) of Section 100, and the person had no reasonable | 9 | | cause to believe the conduct was unlawful. | 10 | | (d) For purposes of subsections (b) and (c) of this | 11 | | Section, the termination of any action, suit, or proceeding by | 12 | | judgment, order, settlement, or conviction or a plea of nolo | 13 | | contendere or its equivalent does not create, of itself, a | 14 | | presumption that the person did not act in good faith and in a | 15 | | manner the person reasonably believed to be in or not opposed | 16 | | to the best interests of the association or that the person had | 17 | | reasonable cause to believe that the conduct was unlawful. | 18 | | (e) Subject to subsection (f) of this Section and provided | 19 | | the person acted in good faith and in a manner the person | 20 | | reasonably believed to be in or not opposed to the best | 21 | | interests of the association, an association may indemnify or | 22 | | agree to indemnify any person that was or is a party, or is | 23 | | threatened to be made a party, to any threatened, pending, or | 24 | | completed action or suit by or in the right of the association | 25 | | to procure a judgment in its favor, because the person is or | 26 | | was a director, officer, employee, agent, or volunteer of the |
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| 1 | | association or is or was serving at the request of the | 2 | | association as a trustee, director, officer, employee, member, | 3 | | manager, agent, or volunteer of another association, entity, | 4 | | partnership, joint venture, trust, or other enterprise. The | 5 | | indemnification described in this subsection shall be for | 6 | | expenses, including attorney's fees, actually and reasonably | 7 | | incurred by the person in connection with the defense or | 8 | | settlement of an action or suit described in this subsection. | 9 | | (f) If a person is adjudged to be liable for negligence or | 10 | | misconduct in the performance of a duty to the association, the | 11 | | indemnification described in subsection (e) of this Section | 12 | | shall not exceed, for any claim, issue, or matter, the amount | 13 | | that the court in which the action or suit was brought | 14 | | determines, upon application, that despite the adjudication of | 15 | | liability and in view of all the circumstances of the case, the | 16 | | person fairly and reasonably is entitled to indemnity for | 17 | | expenses that the court in which the action or suit was brought | 18 | | considers proper. | 19 | | (g) Notwithstanding subsections (a), (b), (c), (d), (e), | 20 | | and (f) of this Section, unless limited in the articles of | 21 | | incorporation, to the extent that a person has been successful | 22 | | on the merits in defense of any action, suit, or proceeding | 23 | | described in subsection (a), (b), (c), (d), (e), or (f) of this | 24 | | Section, the person shall be indemnified against expenses, | 25 | | including attorney's fees, actually and reasonably incurred in | 26 | | connection with that action, suit, or proceeding. |
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| 1 | | (h) Unless ordered by a court or unless subsection (g) of | 2 | | this Section applies, the association shall make any | 3 | | indemnification under subsections (a), (b), (c), (d), (e), and | 4 | | (f) of this Section only as authorized in the specific case, | 5 | | upon a determination that indemnification of the person is | 6 | | proper in the circumstances because the person has met the | 7 | | applicable standard of conduct set forth in subsections (a), | 8 | | (b), (c), (d), (e), and (f) of this Section. This determination | 9 | | shall be made in any of the following manners: | 10 | | (1) by a majority vote of a quorum consisting of | 11 | | directors of the indemnifying association that were not and | 12 | | are not parties to or threatened with the action, suit, or | 13 | | proceeding described in subsections (a), (b), (c), (d), | 14 | | (e), and (f) of this Section; | 15 | | (2) whether or not a quorum as described in paragraph | 16 | | (1) of this subsection is obtainable, and if a majority of | 17 | | a quorum of disinterested directors so directs, in a | 18 | | written opinion by independent legal counsel other than an | 19 | | attorney or a firm of attorneys associated with that | 20 | | attorney, that within the past 5 years has been retained by | 21 | | or has performed services for the association or has | 22 | | performed services for any person to be indemnified; or
| 23 | | (3) by the members. | 24 | | (i) The association shall pay the expenses, including | 25 | | attorney's fees, incurred by the person in defending the | 26 | | action, suit, or proceeding described in subsection (a), (b), |
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| 1 | | (c), (d), (e), or (f) of this Section, unless either of the | 2 | | following applies: | 3 | | (1) At the time of a person's act or omission that is | 4 | | the subject of an action, suit, or proceeding described in | 5 | | subsection (a), (b), (c), (d), (e), or (f) of this Section, | 6 | | the articles or bylaws of the association state, by | 7 | | specific reference to subsections (a), (b), (c), (d), (e), | 8 | | and (f) of this Section, that subsections (a), (b), (c), | 9 | | (d), (e), and (f) of this Section do not apply to the | 10 | | association. | 11 | | (2) The only liability asserted against a person in an | 12 | | action, suit, or proceeding described in subsection (a), | 13 | | (b), (c), (d), (e), or (f) of this Section is pursuant to | 14 | | Section 110.
Upon receipt of a request from a person, the | 15 | | association may pay expenses, including attorney's fees, | 16 | | incurred by a person in defending any action, suit, or | 17 | | proceeding described in subsection (a), (b), (c), (d), (e), | 18 | | or (f) of this Section as the expenses are incurred in | 19 | | advance of the final disposition of the action, suit, or | 20 | | proceeding, if the board authorizes this payment in the | 21 | | specific case and upon receipt of an undertaking by or on | 22 | | behalf of the person to repay the amount if it ultimately | 23 | | is determined that the person is not entitled to be | 24 | | indemnified by the association. | 25 | | (j) Both of the following apply to the indemnification | 26 | | authorized by this Section: |
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| 1 | | (1) It is not exclusive of and is in addition to any | 2 | | other rights granted to a person seeking indemnification | 3 | | pursuant to the articles or bylaws of the association, any | 4 | | agreement, a vote of members or disinterested directors of | 5 | | the association, or otherwise, for action taken in the | 6 | | person's official capacity and action taken in another | 7 | | capacity while holding their office or position. | 8 | | (2) It continues as to a person that has ceased to be a | 9 | | director, officer, employee, member, manager, agent, or | 10 | | volunteer and inures to the benefit of the heirs, | 11 | | executors, and administrators of that person. | 12 | | (k) As used in this Section, "association" includes all | 13 | | constituent associations and entities in a consolidation or | 14 | | merger and the new or surviving association or entity. Any | 15 | | person that is or was a director, officer, employee, agent, or | 16 | | volunteer of a constituent association or is or was serving at | 17 | | the request of a constituent association as a trustee, | 18 | | director, officer, employee, member, manager, agent, or | 19 | | volunteer of another association, entity, partnership, joint | 20 | | venture, trust, or other enterprise stands in the same position | 21 | | under this Section with respect to the new or surviving | 22 | | association or entity as the person would if the person had | 23 | | served the new or surviving association or entity in the same | 24 | | capacity. | 25 | | (l) An association may purchase and maintain insurance or | 26 | | furnish similar protection, including, but not limited to, |
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| 1 | | trust funds, letters of credit, or self-insurance, for or on | 2 | | behalf of any person that is or was a director, officer, | 3 | | employee, agent, or volunteer of the association or is or was | 4 | | serving at the request of the association as a trustee, | 5 | | director, officer, employee, member, manager, agent, or | 6 | | volunteer of another association, entity, partnership, joint | 7 | | venture, trust, or other enterprise. The insurance or similar | 8 | | protection described in this subsection shall be against any | 9 | | liability asserted against the person and incurred by the | 10 | | person in any such capacity, whether or not the association | 11 | | would have the power to indemnify the person against that | 12 | | liability under this Section. | 13 | | Insurance described in this subsection may be purchased | 14 | | from or maintained with a person in which the association has a | 15 | | financial interest.
| 16 | | Section 100. Standard of care for directors. | 17 | | (a) A director shall perform the duties of a director, | 18 | | including duties as a member of any committee of the directors | 19 | | upon which the director serves, in good faith, in a manner the | 20 | | director reasonably believes to be in or not opposed to the | 21 | | best interests of the association, and with the care that an | 22 | | ordinarily prudent person in a like position would use under | 23 | | similar circumstances. In performing these duties, a director | 24 | | is entitled to rely on information, opinions, reports, or | 25 | | statements, including financial statements and other financial |
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| 1 | | data, that are prepared or presented by any of the following: | 2 | | (1) one or more directors, officers, or employees of | 3 | | the association whom the director reasonably believes are | 4 | | reliable and competent in the matters prepared or | 5 | | presented; | 6 | | (2) counsel, public accountants, or other persons as to | 7 | | matters that the director reasonably believes are within | 8 | | the person's professional or expert competence; | 9 | | (3) a committee of the directors upon which the | 10 | | director does not serve, established in accordance with the | 11 | | association's articles of incorporation or bylaws, as to | 12 | | matters within its designated authority, provided the | 13 | | director reasonably believes the committee merits | 14 | | confidence. | 15 | | (b) For purposes of subsection (a) of this Section: | 16 | | (1) A director shall not be found to have failed to | 17 | | perform the duties in accordance with subsection (a) of | 18 | | this Section, unless it is proved, by clear and convincing | 19 | | evidence, in an action brought against the director that | 20 | | the director has not acted in good faith, in a manner | 21 | | reasonably believed to be in or not opposed to the best | 22 | | interests of the association, or with the care that an | 23 | | ordinarily prudent person in a like position would use | 24 | | under similar circumstances. Such an action includes, but | 25 | | is not limited to, an action that involves or affects any | 26 | | of the following: |
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| 1 | | (A) a change or potential change in control of the | 2 | | association; | 3 | | (B) a termination or potential termination of the | 4 | | director's service to the association as a director; | 5 | | (C) service in any other position or relationship | 6 | | with the association. | 7 | | (2) A director shall not be considered to be acting in | 8 | | good faith if the director has knowledge concerning the | 9 | | matter in question that would cause reliance on | 10 | | information, opinions, reports, or statements that are | 11 | | prepared or presented by the persons described in | 12 | | subsections (a)(1) through (a)(3) of this Section to be | 13 | | unwarranted. | 14 | | (c)(1) Subject to subsections (c)(2) and (c)(3) of this | 15 | | Section, a director is liable in damages for any act that the | 16 | | director takes or fails to take as director only if it is | 17 | | proved, by clear and convincing evidence, in an action brought | 18 | | against the director that the act or omission of the director | 19 | | was undertaken with a deliberate intent to cause injury to the | 20 | | association or was undertaken with a reckless disregard for the | 21 | | best interests of the association. | 22 | | (2) Subsection (c)(1) of this Section does not affect the | 23 | | liability of a director under Section 110. | 24 | | (3) Subject to subsection (c)(2) of this Section, | 25 | | subsection (c)(1) of this Section does not apply if, and only | 26 | | to the extent that, at the time of an act or omission of the |
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| 1 | | director, the association's articles of incorporation or | 2 | | bylaws state, by specific reference to subsection (c)(1) of | 3 | | this Section, that its provisions do not apply to the | 4 | | association. | 5 | | (d) For purposes of this Section and Section 95, in | 6 | | determining what is reasonably believed to be in or not opposed | 7 | | to the best interests of the association, a director shall | 8 | | consider the purposes of the association and may consider any | 9 | | of the following: | 10 | | (1) the interests of the employees, suppliers, | 11 | | creditors, and customers of the association; | 12 | | (2) the economy of this State and of the United States; | 13 | | (3) community, and societal, and environmental | 14 | | matters; | 15 | | (4) the long-term and short-term best interests of the | 16 | | association; | 17 | | (5) the interests of the members as patrons of the | 18 | | association. | 19 | | (e) Subsections (b) and (c) of this Section do not affect | 20 | | the duties of a director who acts in any capacity other than as | 21 | | a director. | 22 | | Section 105. Effect of self-dealing.
| 23 | | (a) Unless otherwise provided in an association's articles | 24 | | of incorporation or bylaws: | 25 | | (1) No contract or transaction between an association |
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| 1 | | and one or more of its directors or officers, or between | 2 | | the association and any other person in which one or more | 3 | | of the association's directors or officers are directors or | 4 | | officers, or have a financial or personal interest, shall | 5 | | be void or voidable solely for this reason, or solely | 6 | | because the director or officer is present at or | 7 | | participates in the meeting of the board or committee that | 8 | | authorizes the contract or transaction, or solely because | 9 | | the director's or officer's votes are counted for such | 10 | | purpose, if the contract or transaction is fair to the | 11 | | association at the time it is authorized or approved, and | 12 | | such authorization or approval is granted in either of the | 13 | | following manners: | 14 | | (A) the material facts as to the relationship or | 15 | | interest and as to the contract or transaction are | 16 | | disclosed or are known to the board or the committee, | 17 | | and the board or committee in good faith authorizes the | 18 | | contract or transaction by the affirmative vote of a | 19 | | majority of the disinterested directors, even if the | 20 | | disinterested directors constitute less than a quorum | 21 | | of the board or the committee; or | 22 | | (B) the material facts as to the relationship or | 23 | | interest and as to the contract or transaction are | 24 | | disclosed or are known to the members entitled to vote | 25 | | on the contract or transaction, and the contract or | 26 | | transaction is specifically approved at a meeting of |
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| 1 | | the members. | 2 | | (2) Common or interested directors may be counted in | 3 | | determining the presence of a quorum at a meeting of the | 4 | | board, or of a committee that authorizes the contract or | 5 | | transaction. | 6 | | (b) Items (1) and (2) of subsection (a) do not limit or | 7 | | otherwise affect the liability of directors under Section 110. | 8 | | (c) For purposes of subsection (a), a director is not an | 9 | | interested director solely because the subject of a contract or | 10 | | transaction may involve or effect a change in control of the | 11 | | association or continuation in office as a director of the | 12 | | association. | 13 | | Section 110. Liability of members, directors, and | 14 | | officers.
| 15 | | (a) No member, director, or officer of an association shall | 16 | | be personally liable for any obligation of the association to | 17 | | an amount exceeding the sum remaining unpaid on his membership | 18 | | fee or his subscription to the capital stock, including any | 19 | | unpaid balance on any promissory notes given in payment | 20 | | thereof. | 21 | | (b) Directors who vote for or assent to any of the | 22 | | following are jointly and severally liable to the association | 23 | | in accordance with this subsection: | 24 | | (1) a distribution of assets to members, stockholders, | 25 | | or patrons contrary to law, the association's articles of |
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| 1 | | incorporation, or bylaws; | 2 | | (2) a distribution of assets to persons other than | 3 | | creditors during the winding up of the affairs of the | 4 | | association, on dissolution or otherwise, without the | 5 | | payment of all known obligations of the association, or | 6 | | without making adequate provision for the payment of the | 7 | | obligations; or | 8 | | (3) the making of loans, other than in the usual | 9 | | conduct of the association's affairs or in accordance with | 10 | | the association's articles or bylaws, to an officer, | 11 | | director, or member of the association. | 12 | | In cases under item (1) of this subsection, directors are | 13 | | liable up to the amount of the distribution in excess of the | 14 | | amount that could have been distributed without violation of | 15 | | law, the articles of incorporation, or bylaws, but not in | 16 | | excess of the amount that would inure to the benefit of the | 17 | | creditors of the association if it was insolvent at the time of | 18 | | the distribution or there was reasonable ground to believe that | 19 | | by such vote or assent it would be rendered insolvent, or to | 20 | | the benefit of the members or stockholders other than members | 21 | | or stockholders of the class in respect of which the | 22 | | distribution was made. | 23 | | In cases under item (2) of this subsection, directors are | 24 | | liable to the extent that the obligations, not otherwise barred | 25 | | by statute, are not paid, or for the payment of which adequate | 26 | | provision has not been made. |
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| 1 | | In cases under item (3) of this subsection, directors are | 2 | | liable for the amount of the loan with interest thereon at the | 3 | | rate of 6% per year until the amount has been paid. | 4 | | A director is not liable under item (1) or (2) of this | 5 | | subsection if, in determining the amount available for any such | 6 | | distribution, the director in good faith relied on a financial | 7 | | statement of the association prepared by an officer or employee | 8 | | of the association in charge of its accounts or by a certified | 9 | | public accountant or firm of certified public accountants, or | 10 | | in good faith considered the assets to be of their book value, | 11 | | or followed what the director believed to be sound accounting | 12 | | and business practice. | 13 | | (c) A director who is present at a meeting of the board or | 14 | | a committee of the board at which action on any matter is | 15 | | authorized or taken and who has not voted for or against such | 16 | | action shall be presumed to have voted for the action unless | 17 | | the director dissents from the action during the meeting and | 18 | | the dissent is noted in the minutes of the proceedings of the | 19 | | meeting, or a written dissent is filed either during the | 20 | | meeting or within a reasonable time after the adjournment of | 21 | | the meeting. | 22 | | (d) A member, stockholder, or patron who receives any | 23 | | distribution made contrary to law, the association's articles | 24 | | of incorporation, or bylaws is liable to the association for | 25 | | the amount received that is in excess of the amount that could | 26 | | have been distributed. |
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| 1 | | (e) A director against whom a claim is asserted under or | 2 | | pursuant to this Section and who is held liable on the claim is | 3 | | entitled to contribution, on equitable principles, from other | 4 | | directors who also are liable. In addition, any director | 5 | | against whom a claim is asserted under or pursuant to this | 6 | | Section, or who is held liable, has a right of contribution | 7 | | from the member, stockholder, or patron who received any | 8 | | distribution made contrary to law, the articles of | 9 | | incorporation, or bylaws, and such persons as among themselves | 10 | | also are entitled to contribution in proportion to the amounts | 11 | | received by them respectively. | 12 | | (f) No action shall be brought by or on behalf of an | 13 | | association, upon any cause of action arising under item (1) or | 14 | | (2) of subsection (b), at any time after 2 years from the day | 15 | | on which the violation occurs; provided that no such action is | 16 | | barred by this subsection if it is commenced prior to the | 17 | | effective date of this Act. | 18 | | Section 120. Surety bonds. If required by the | 19 | | association's bylaws, every officer, employee, and agent | 20 | | handling funds, negotiable instruments, or other property of or | 21 | | for an association shall execute and deliver adequate bonds for | 22 | | the faithful performance of the officer's, employee's, or | 23 | | agent's duties and obligations.
| 24 | | Section 130. Books and records; examination by member.
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| 1 | | (a) An association shall keep correct and complete books | 2 | | and records of account, and shall also keep minutes of the | 3 | | proceedings of meetings of its members, board, and delegates. | 4 | | The association shall keep at its principal office records of | 5 | | the names and addresses of all members and stockholders with | 6 | | the amount of ownership interests and stock held by each. | 7 | | (b) At any reasonable time, any member, upon written notice | 8 | | that states, with specificity, a proper purpose for an | 9 | | examination of books and records and that is delivered or sent | 10 | | to the association at least one week in advance, may examine | 11 | | those books and records pertinent to the purpose in the notice. | 12 | | The board may deny a request of a member to examine the books | 13 | | and records if the purpose is not proper because the purpose is | 14 | | not directly related to the person's interest as a member and | 15 | | is contrary to the best interests of the association.
| 16 | | (c) At any reasonable time, a stockholder who is not a | 17 | | member, upon written notice that states, with specificity, a | 18 | | proper purpose for an examination of books and records and that | 19 | | is delivered or sent to the association at least one week in | 20 | | advance, may examine those books and records that are pertinent | 21 | | to the purpose in the notice. The board may deny a request of a | 22 | | stockholder to examine the books and records if the purpose is | 23 | | not proper because the purpose is not directly related to the | 24 | | person's interest as a stockholder and is contrary to the best | 25 | | interest of the association.
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| 1 | | Section 132. Interrogatories to be propounded by Secretary | 2 | | of State. The Secretary of State may propound to any | 3 | | association subject to the provisions of this Act, and to any | 4 | | officer or director thereof, such interrogatories as may be | 5 | | reasonably necessary and proper to enable the Secretary to | 6 | | ascertain whether such association has complied with all the | 7 | | provisions of this Act applicable to such association. Such | 8 | | interrogatories shall be answered within 30 days after the | 9 | | mailing thereof, or within such additional time as shall be | 10 | | fixed by the Secretary of State, and the answers thereto shall | 11 | | be full and complete and shall be made in writing and under | 12 | | oath. If such interrogatories be directed to an individual they | 13 | | shall be answered by him or her, and if directed to an | 14 | | association they shall be answered by the president, | 15 | | vice-president, or secretary thereof. The Secretary of State | 16 | | need not file any document to which such interrogatories relate | 17 | | until such interrogatories be answered as herein provided, and | 18 | | not then if the answers thereto disclose that such document is | 19 | | not in conformity with the provisions of this Act. The | 20 | | Secretary of State shall certify to the Attorney General, for | 21 | | such action as the Attorney General may deem appropriate, all | 22 | | interrogatories and answers thereto which disclose a violation | 23 | | of any of the provisions of this Act. | 24 | | Section 133. Information disclosed by interrogatories. | 25 | | Interrogatories propounded by the Secretary of State and the |
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| 1 | | answers thereto shall not be open to public inspection nor | 2 | | shall the Secretary of State disclose any facts or information | 3 | | obtained therefrom except insofar as official duty may require | 4 | | the same to be made public or in the event such interrogatories | 5 | | or the answers thereto are required for evidence in any | 6 | | criminal proceeding or in any other action by the State. | 7 | | Section 135. Merger or consolidation with associations. | 8 | | (a) An association may merge or consolidate with one or | 9 | | more associations under this Act. Before an association may | 10 | | merge or consolidate with any other association, a written plan | 11 | | of merger or consolidation shall be approved by the board of | 12 | | each constituent association and by the members of each | 13 | | constituent association. The plan shall set forth the terms of | 14 | | the merger or consolidation, including any provisions for | 15 | | amendment or abandonment of the plan. In the case of a | 16 | | consolidation, the plan also shall contain the articles of | 17 | | incorporation of the new association.
| 18 | | (b) If the plan of merger or consolidation provides that a | 19 | | holder of stock other than membership stock or patronage stock | 20 | | in a constituent association will be affected, all of the | 21 | | following apply:
| 22 | | (1) Unless the board of the constituent association | 23 | | provides that item (2) of this subsection applies, the | 24 | | affected stockholder shall be entitled to cast one vote on | 25 | | the plan regardless of the par or stated value, the number |
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| 1 | | of shares, or the number of affected classes of the stock | 2 | | held.
| 3 | | (2) The board of a constituent association may provide | 4 | | that a stockholder otherwise entitled to vote under item | 5 | | (1) of this subsection shall instead be entitled to payment | 6 | | of fair cash value of the affected stock held by the | 7 | | stockholder in accordance with Section 170.
| 8 | | (3) A member holding stock affected by a proposed plan | 9 | | of merger or consolidation may vote only as a member and | 10 | | shall not be entitled to vote or demand fair cash value as | 11 | | an affected stockholder.
| 12 | | (c) For purposes of this Section, a holder of stock is | 13 | | affected as to any class of stock owned by the holder only if | 14 | | the agreement of merger or consolidation does any of the | 15 | | following:
| 16 | | (1) decreases the dividends to which that class may be | 17 | | entitled or changes the method by which the dividend rate | 18 | | on that class is fixed;
| 19 | | (2) provides for additional restriction of rights to | 20 | | transfer shares of that class;
| 21 | | (3) gives to another existing or any new class of stock | 22 | | or equity interest not previously entitled thereto any | 23 | | preference, as to dividends or upon dissolution, that is | 24 | | higher than preferences of that class;
| 25 | | (4) changes the par value of shares of that class or of | 26 | | any other class having the same or higher preferences as to |
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| 1 | | dividends or upon dissolution;
| 2 | | (5) increases the number of authorized shares of any | 3 | | other class having the same or higher preferences as to | 4 | | dividends or upon dissolution beyond the aggregate | 5 | | authorizations for such classes in the constituent | 6 | | associations;
or | 7 | | (6) requires or permits an exchange of shares of any | 8 | | class with lower preferences as to dividends or upon | 9 | | dissolution for shares of any other class with higher | 10 | | preferences.
| 11 | | (d) The plan is approved if both of the following | 12 | | conditions are met with respect to each constituent | 13 | | association: | 14 | | (1) notice of the meeting to vote on the plan, the plan | 15 | | of merger or consolidation, and a description of the method | 16 | | of voting have been sent to all members, and to all | 17 | | affected stockholders entitled either to vote on the plan | 18 | | or to receive payment of fair cash value under subsection | 19 | | (b);
| 20 | | (2) 60% of the member votes cast approve the plan, and | 21 | | a simple majority of the votes cast by the affected | 22 | | stockholders entitled to vote under subsection (b) approve | 23 | | the plan. | 24 | |
(e) Notwithstanding subsection (d), no vote of the members | 25 | | or stockholders of a constituent association shall be necessary | 26 | | to approve a merger of a wholly owned subsidiary association |
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| 1 | | with and into its parent cooperative or a merger or a | 2 | | consolidation of 2 or more subsidiary associations that are | 3 | | wholly owned by a cooperative.
| 4 | | (f) After approval of a plan under this Section, but before | 5 | | the merger or consolidation is effective, the plan may be | 6 | | amended in accordance with any provision for amendment set | 7 | | forth in the plan, provided that an amendment made subsequent | 8 | | to adoption of the plan by the members of any constituent | 9 | | association 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 merger or | 13 | | consolidation; | 14 | | (2) change the articles of incorporation or bylaws of | 15 | | the surviving or new association as provided for in the | 16 | | plan;
| 17 | | (3) change any provision of the plan with respect to | 18 | | the rights of members or the manner of voting in the | 19 | | surviving or new association.
| 20 | | (g) After approval of a plan under this Section, but before | 21 | | the merger or consolidation is filed with the Secretary of | 22 | | State, the merger or
consolidation may be abandoned in | 23 | | accordance with any provision for abandonment set forth in the | 24 | | plan.
| 25 | | (h) The merger or consolidation shall take effect in | 26 | | accordance with Sections 145 and 150.
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| 1 | | Section 140. Association; merger or consolidation with | 2 | | foreign associations.
| 3 | | (a) An association may merge or consolidate with one or | 4 | | more foreign associations, if such merger or consolidation is | 5 | | permitted by the laws under which each constituent cooperative | 6 | | exists and the association complies with this Section.
| 7 | | (b) Each constituent association shall comply with Section | 8 | | 135 with respect to form and approval of a plan of merger or | 9 | | consolidation, and each constituent foreign association shall | 10 | | comply with the applicable provisions of the laws under which | 11 | | it exists, except that the plan of merger or consolidation, by | 12 | | whatever name designated, shall comply with subsections (c) and | 13 | | (d) of this Section.
| 14 | | (c) The plan of merger or consolidation shall set forth all | 15 | | of the following:
| 16 | | (1) The names of the states and the laws under which | 17 | | each constituent cooperative exists.
| 18 | | (2) All statements and matters required to be set forth | 19 | | in plans or agreements of merger or consolidation by the | 20 | | laws under which any constituent cooperative exists.
| 21 | | (3) A statement as to whether the surviving or new | 22 | | cooperative is to be an association or a foreign | 23 | | association.
| 24 | | (4) If the surviving or new cooperative is to be a | 25 | | foreign association:
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| 1 | | (A) the place where the principal office of the | 2 | | surviving or new foreign association is to be located | 3 | | in the state in which the surviving or new foreign | 4 | | association is to exist;
| 5 | | (B) the consent by the surviving or new foreign | 6 | | association that it may be sued and served with process | 7 | | in this State in any proceeding for the enforcement of | 8 | | any obligation of any constituent association;
| 9 | | (C) the consent by the surviving or new foreign | 10 | | association that it shall be subject to the provisions | 11 | | applicable to foreign corporations under the Business | 12 | | Corporation Act of 1983, substituting the word | 13 | | "association" for "corporation", and, with respect to | 14 | | the name of a foreign association, substituting | 15 | | references to Section 20 of this Act for references to | 16 | | Section 4.05 of the Business Corporation Act of 1983; | 17 | | and
| 18 | | (D) if it is desired that the surviving or new | 19 | | foreign association exercise its corporate privileges | 20 | | in this State as a foreign entity. | 21 | | (d) The plan also may set forth other provisions permitted | 22 | | by the laws of any state in which any constituent cooperative | 23 | | exists.
| 24 | | (e) If the surviving or new cooperative is an association, | 25 | | the merger or consolidation shall take effect in accordance | 26 | | with Sections 145 and 150.
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| 1 | | (f) If the surviving or new cooperative is a foreign | 2 | | association, the merger or consolidation shall take effect in | 3 | | accordance with the applicable provisions of the laws under | 4 | | which it exists and in accordance with Section 150.
| 5 | | Section 145. Effective date of merger or consolidation.
| 6 | | (a) Unless a later date, which may not be more than 30 days | 7 | | after the date of filing, is specified in the plan, a merger or | 8 | | consolidation under Section 135 is effective when the articles | 9 | | of merger or consolidation and plan of merger or consolidation | 10 | | are filed in accordance with Section 150. | 11 | | (b) In the case of a merger, the surviving association is | 12 | | the one designated in the plan. In the case of a consolidation, | 13 | | the new association is the one designated in the plan. The | 14 | | separate existence of all constituent associations in the | 15 | | agreement, except the surviving or new association, ceases upon | 16 | | the effective date of the merger or consolidation.
| 17 | | (c) The surviving or new association possesses all the | 18 | | rights and all the property of each constituent association, | 19 | | and is responsible for all their obligations. Title to any | 20 | | property is vested in the surviving or new association with no | 21 | | reversion or impairment of the property caused by the merger or | 22 | | consolidation. A merger or consolidation shall not be | 23 | | considered an assignment. No right of any creditor shall be | 24 | | impaired by the merger or consolidation without the creditor's | 25 | | consent.
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| 1 | | Section 150. Articles of merger or consolidation; filing. | 2 | | Upon adoption of a plan of merger or consolidation under | 3 | | Section 135, articles of merger, signed by any authorized | 4 | | officer or representative of each constituent association, | 5 | | shall, along with a copy of the plan of merger or | 6 | | consolidation, be filed with the Secretary of State on a form | 7 | | prescribed by the Secretary of State that sets forth the | 8 | | following:
| 9 | | (1) the name and form of each constituent association | 10 | | and the State law under which each constituent association | 11 | | exists;
| 12 | | (2) a statement that each constituent association has | 13 | | adopted the plan of merger or consolidation, the manner of | 14 | | adoption, and that the plan was adopted in compliance with | 15 | | the laws applicable to each constituent association;
| 16 | | (3) the effective date of the merger or consolidation, | 17 | | which date may be on or after the date of filing of the | 18 | | certificate;
| 19 | | (4) in the case of a merger, a statement that one or | 20 | | more specified constituent associations will be merged | 21 | | into a specified surviving association or, in the case of a | 22 | | consolidation, a statement that the constituent | 23 | | associations will be consolidated into a new association; | 24 | | and
| 25 | | (5) the name and address of the registered agent upon |
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| 1 | | whom any process, notice, or demand against any constituent | 2 | | association, or the surviving or new association, may be | 3 | | served.
| 4 | | In the case of a merger into an association, any amendments | 5 | | to the articles of incorporation or the articles of | 6 | | organization of the surviving association shall be filed with | 7 | | the articles of merger. | 8 | | In the case of a consolidation to form a new domestic | 9 | | association, the articles of incorporation of the new | 10 | | association shall be filed with the articles of merger. | 11 | | If the surviving or new cooperative is a foreign | 12 | | association that desires to transact business in this State as | 13 | | a foreign association, the certificate shall be accompanied by | 14 | | an application for authority to transact business in this | 15 | | 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.
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| 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.
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| 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 |
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| 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, articles of | 19 | | division along with the plan of division, but not including the | 20 | | association's bylaws, signed by any authorized officer of the | 21 | | original association, shall be filed with the Secretary of | 22 | | State on a form prescribed by the Secretary of State setting | 23 | | forth the following:
| 24 | | (1) The name of the original association and the name | 25 | | of each resulting association.
| 26 | | (2) A statement that the original association has |
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| 1 | | adopted the plan of division, the manner of adoption, and | 2 | | that the plan was adopted in compliance with this Section. | 3 | | (3) The effective date of the division, which date may | 4 | | be on or up to 30 days after the date of filing of the | 5 | | certificate.
| 6 | | (4) A statement that the original association will be | 7 | | divided into specified resulting associations.
| 8 | | (5) The name and address of the registered agent upon | 9 | | whom any process, notice, or demand against the original | 10 | | association may be served, and the name and address of a | 11 | | registered agent for each resulting association upon whom | 12 | | process, notice, or demand against that resulting | 13 | | association may be served.
| 14 | | (g) The articles of incorporation of each of the resulting | 15 | | associations shall be filed with the certificate.
| 16 | | Section 160. Conversions.
| 17 | | (a) A domestic corporation that is not an association may | 18 | | convert itself into an association by adopting an amendment to | 19 | | its articles of incorporation in which it elects to become | 20 | | subject to this Act, together with any changes in its articles | 21 | | of incorporation and bylaws required by this Act and any other | 22 | | desirable changes permitted by this Act. The amendment shall be | 23 | | adopted and filed in the manner provided by the law under which | 24 | | the corporation exists.
| 25 | | (b) An association may convert itself to a domestic |
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| 1 | | corporation by complying with the provisions of subsection (d) | 2 | | of Section 1.70 of the Business Corporation Act of 1983. | 3 | | Section 165. Setting aside reorganizations. An action, | 4 | | other than an action initiated by the State, or any other state | 5 | | or federal governmental agency, to set aside a merger, | 6 | | consolidation, division, or conversion of an association, on | 7 | | the ground that any law has not been complied with, shall be | 8 | | brought within 90 days after the effective date of the merger, | 9 | | consolidation, division, or conversion, or such action shall be | 10 | | forever barred unless it is initiated by a state or federal | 11 | | governmental agency. | 12 | | Section 170. Written demand for payment of fair cash value | 13 | | of stock.
| 14 | | (a) In order to obtain payment of the fair cash value, a | 15 | | stockholder entitled to payment of the fair cash value of stock | 16 | | under Section 40, 135, 140, or 155 shall deliver a written | 17 | | demand for payment of the fair cash value of the stock to the | 18 | | association no later than 15 days after notice is sent to | 19 | | members and stockholders in accordance with Section 40, 135, | 20 | | 140, or 155, as the case may be. The written demand shall state | 21 | | the name and address of the stockholder, the number and class | 22 | | of the stock for which fair cash value is demanded, and the | 23 | | amount claimed by the stockholder to be the fair cash value of | 24 | | the stock. Delivery of written demand for payment of fair cash |
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| 1 | | value of stock in accordance with this Section is sufficient if | 2 | | delivered to the association or to the surviving or new | 3 | | association or entity resulting from the merger, | 4 | | consolidation, division, or conversion, whether the demand is | 5 | | delivered before, on, or after the effective date of the | 6 | | action. If written demand is not timely delivered in conformity | 7 | | with this Section, the stockholder's right to payment of fair | 8 | | cash value with respect to the amendment to the articles of | 9 | | incorporation, agreement of merger or consolidation, plan of | 10 | | division, or conversion shall be barred.
| 11 | | (b) If a timely demand is delivered in accordance with this | 12 | | Section, fair cash value of the stock shall be determined and | 13 | | paid to the stockholder in accordance with the following | 14 | | procedures:
| 15 | | (1) The association or the surviving, new, or resulting | 16 | | association or entity shall send a written acknowledgment | 17 | | of receipt of the demand for fair cash value to the address | 18 | | specified in the demand no later than 15 days after receipt | 19 | | of the demand. If the board of the association or the | 20 | | surviving, new, or resulting association or entity | 21 | | believes that the demand has failed to comply with the | 22 | | requirements of this Section, the acknowledgment shall | 23 | | state any such defects. The acknowledgment also shall state | 24 | | what the board believes to be the fair cash value of the | 25 | | stock that is the subject of the demand. If the articles of | 26 | | incorporation of the constituent or original association |
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| 1 | | provide a value for the stock upon redemption, the fair | 2 | | cash value of the stock presumptively shall be the lesser | 3 | | of the redemption value or the fair market value of the | 4 | | stock immediately prior to the merger, consolidation, | 5 | | division, or conversion.
| 6 | | (2) The stockholder shall not transfer, encumber, | 7 | | pledge, or otherwise dispose of the stock that is the | 8 | | subject of the demand for fair cash value, or any | 9 | | certificate representing the stock, until the demand is | 10 | | finally resolved by agreement, withdrawal, or final | 11 | | judicial determination.
| 12 | | (3) If the association's articles of incorporation or | 13 | | bylaws provide a reasonable basis for determining and | 14 | | paying the fair cash value of the stock that is the subject | 15 | | of the demand for fair cash value, or if the association or | 16 | | the surviving, new, or resulting cooperative and the | 17 | | demanding stockholder reach an agreement on the fair cash | 18 | | value of the stock within 3 months after delivery of the | 19 | | demand for fair cash value, the fair cash value of the | 20 | | stock shall be determined in accordance with the | 21 | | constituent or original association's articles of | 22 | | incorporation or bylaws or as agreed upon, as the case may | 23 | | be. The association shall thereupon tender payment of the | 24 | | fair cash value so determined to the stockholder within 30 | 25 | | days of delivery of any certificates representing the stock | 26 | | or the stockholder's written waiver and release of claim to |
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| 1 | | all rights to the stock to the association or the | 2 | | surviving, new, or resulting cooperative. Without | 3 | | precluding other possible reasonable bases for determining | 4 | | fair cash value of stock under this Section, a provision in | 5 | | the constituent or original association's articles of | 6 | | incorporation or bylaws that fair cash value shall be | 7 | | determined by mediation or final and binding arbitration, | 8 | | or that fair cash value shall be the lesser of par value, | 9 | | book value, or fair market value, shall be considered a | 10 | | reasonable basis for determining and paying the fair cash | 11 | | value of stock.
| 12 | | (c) The right of a demanding stockholder to receive the | 13 | | fair cash value of stock as to which the stockholder seeks | 14 | | relief and the obligation of the association or the surviving, | 15 | | new, or resulting cooperative to furnish the fair cash value | 16 | | for those interests terminate if any of the following applies: | 17 | | (1) The demanding stockholder fails to comply with this | 18 | | Section.
| 19 | | (2) The association abandons the amendment of | 20 | | articles, merger, consolidation, division, or conversion | 21 | | or is finally enjoined or prevented from taking such | 22 | | action.
| 23 | | (3) The demanding stockholder withdraws the demand for | 24 | | fair cash value with consent of the association.
| 25 | | (4) The demanding stockholder attempts to sell, | 26 | | transfer, or encumber the stock which is the subject of the |
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| 1 | | demand prior to final determination of its fair cash value | 2 | | under this Section or a final judicial determination. | 3 | | (5) All of the following apply:
| 4 | | (A) the articles of incorporation or bylaws of the | 5 | | association do not provide a reasonable basis for | 6 | | determining and paying fair cash value to an affected | 7 | | stockholder;
| 8 | | (B) the association and the affected stockholder | 9 | | have not agreed upon the fair cash value of the stock | 10 | | which is the subject of the demand;
| 11 | | (C) the affected stockholder does not file a timely | 12 | | complaint for judicial determination.
| 13 | | (d) The fair cash value that is agreed upon by the affected | 14 | | stockholder and the association, or determined using a | 15 | | reasonable basis for determining and paying fair cash value in | 16 | | the association's articles of incorporation or bylaws, or fixed | 17 | | by a court shall be paid within 30 days as follows:
| 18 | | (1) immediately to the holder of uncertificated stock; | 19 | | or
| 20 | | (2) upon and simultaneously with the surrender of | 21 | | certificates representing certificated stock.
| 22 | | Section 175. Disposing of assets of association.
| 23 | | (a) As used in this Section, "substantially all" means more | 24 | | than two-thirds of the association's assets, measured, in the | 25 | | board's discretion, either by value as recorded in the books |
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| 1 | | and records of the association or by fair market value.
| 2 | | (b) Unless the articles of incorporation or the bylaws of | 3 | | an association otherwise provide, a lease, sale, exchange, | 4 | | transfer, or other disposition of any assets of an association | 5 | | may be made upon terms and for consideration which may consist, | 6 | | in whole or in part, of money or other property, including | 7 | | shares or other securities or promissory obligations of any | 8 | | association or entity, as may be authorized by the board. If a | 9 | | lease, sale, exchange, transfer, or other disposition, or a | 10 | | series of such transactions, would dispose of all or | 11 | | substantially all of the assets of the association, then the | 12 | | disposition may be made only upon a written plan of disposition | 13 | | prepared by the board or by a committee selected by the board | 14 | | for that purpose, and adopted in the same manner as provided | 15 | | for the adoption of a resolution of dissolution in Section 180. | 16 | | A plan of disposition shall set forth a general description or | 17 | | summary of the assets subject to disposition; the method of | 18 | | disposition; the intended transferee of the assets, if known to | 19 | | the board; and a general description of any material effect the | 20 | | board believes the disposition will have on the interests of | 21 | | the members and stockholders. Notice of a meeting of the | 22 | | members at which a plan of disposition will be voted on shall | 23 | | be given to all members, whether or not entitled to vote at the | 24 | | meeting. The notice shall be accompanied by a copy or summary | 25 | | of the plan of disposition and a ballot for those members | 26 | | entitled to vote on the plan. |
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| 1 | | (c) The association, by its board, may abandon a plan of | 2 | | disposition, subject to the contract rights of other persons, | 3 | | if the power of abandonment is conferred upon the board either | 4 | | by the terms of the transaction or in the plan of disposition.
| 5 | | (d) An action to set aside a disposition of assets by an | 6 | | association, on the ground that any law applicable to the | 7 | | lease, sale, exchange, transfer, or other disposition of all or | 8 | | substantially all the assets of the association has not been | 9 | | complied with, shall be brought within 90 days after such | 10 | | transaction, or the action is forever barred.
| 11 | | Section 176. Grounds for administrative dissolution. The | 12 | | Secretary of State may dissolve any association | 13 | | administratively if: | 14 | | (1) it has failed to file its annual report as required | 15 | | by this Act; | 16 | | (2) it has failed to file in the office of the | 17 | | Secretary of State any report after the expiration of the | 18 | | period prescribed in this Act for filing such report; | 19 | | (3) it has failed to pay any fees, taxes, or charges | 20 | | prescribed by this Act; | 21 | | (4) it has misrepresented any material matter in any | 22 | | application, report, affidavit, or other document filed by | 23 | | the association pursuant to this Act; | 24 | | (5) it has failed to appoint and maintain a registered | 25 | | agent in this State; |
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| 1 | | (6) it has tendered payment to the Secretary of State | 2 | | which is returned due to insufficient funds, a closed | 3 | | account, or for any other reason, and acceptable payment | 4 | | has not been subsequently tendered; | 5 | | (7) upon the failure of an officer or director to whom | 6 | | interrogatories have been propounded by the Secretary of | 7 | | State as provided in this Act, to answer the same fully and | 8 | | to file such answer in the office of the Secretary of | 9 | | State; or | 10 | | (8) if the answer to such interrogatories discloses, or | 11 | | if the fact is otherwise ascertained, that the proportion | 12 | | of the sum of the paid-in capital of such association | 13 | | represented in this State is greater than the amount on | 14 | | which such association has theretofore paid fees and | 15 | | franchise taxes, and the deficiency therein is not paid. | 16 | | Section 177. Procedure for administrative dissolution. | 17 | | (a) After the Secretary of State determines that one or | 18 | | more grounds exist under Section 176 for the administrative | 19 | | dissolution of an association, he or she shall send by regular | 20 | | mail to each delinquent association a Notice of Delinquency to | 21 | | its registered office, or, if the association has failed to | 22 | | maintain a registered office, then to the president or other | 23 | | principal officer at the last known address of said officer. | 24 | | (b) If the association does not correct the default | 25 | | described in paragraphs (1) through (5) of Section 176 within |
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| 1 | | 90 days following such notice, the Secretary of State shall | 2 | | thereupon dissolve the association by issuing a certificate of | 3 | | dissolution that recites the ground or grounds for dissolution | 4 | | and its effective date. If the association does not correct the | 5 | | default described in paragraphs (6) through (8) of Section 176 | 6 | | within 30 days following such notice, the Secretary of State | 7 | | shall thereupon dissolve the association by issuing a | 8 | | certificate of dissolution as herein prescribed. The Secretary | 9 | | of State shall file the original of the certificate in his or | 10 | | her office and mail one copy to the association at its | 11 | | registered office or, if the association has failed to maintain | 12 | | a registered office, then to the president or other principal | 13 | | officer at the last known address of said officer. | 14 | | (c) The administrative dissolution of an association | 15 | | terminates its corporate existence and such a dissolved | 16 | | association shall not thereafter carry on any business; | 17 | | however, such a dissolved association may take all action | 18 | | authorized under Section 190 that is necessary or appropriate | 19 | | to wind up and liquidate its business and affairs. | 20 | | Section 178. Administrative dissolution; association name. | 21 | | The Secretary of State shall not allow another association to | 22 | | use the name of an association that has been administratively | 23 | | dissolved until 3 years have elapsed following the date of | 24 | | issuance of the certificate of dissolution. If the association | 25 | | that has been administratively dissolved is reinstated within 3 |
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| 1 | | years after the date of issuance of the certificate of | 2 | | dissolution, the association shall continue under its previous | 3 | | name without impacting its continuous legal status, unless the | 4 | | association petitions to change its name upon reinstatement. | 5 | | Section 180. Voluntary dissolution.
| 6 | | (a) An association may be dissolved voluntarily in the | 7 | | manner provided in this Section.
| 8 | | (b) A resolution of dissolution for an association shall | 9 | | state both of the following:
| 10 | | (1) that the association elects to be dissolved; and
| 11 | | (2) any additional provision considered necessary with | 12 | | respect to the proposed dissolution and winding up.
| 13 | | (c) Before subscriptions for membership and any stock or | 14 | | other ownership interest have been received, the incorporators | 15 | | or a majority of the incorporators may adopt, by a writing | 16 | | signed by them, a resolution of dissolution.
| 17 | | (d) The directors may adopt a resolution of dissolution in | 18 | | the following cases:
| 19 | | (1) when the association has been adjudged bankrupt or | 20 | | has made a general assignment for the benefit of creditors;
| 21 | | (2) by leave of the court, when a receiver has been | 22 | | appointed in a general creditors' suit or in any suit in | 23 | | which the affairs of the association are to be wound up;
| 24 | | (3) when substantially all of the assets have been sold | 25 | | at judicial sale or otherwise; or
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| 1 | | (4) when the period of existence of the association | 2 | | specified in its articles has expired.
| 3 | | (e) At a meeting held for such purpose, the members may | 4 | | adopt a resolution of dissolution by the affirmative vote of | 5 | | 60% of the member votes cast on the proposal or, if the | 6 | | articles provide or permit, by the affirmative vote of a | 7 | | greater or lesser proportion though not less than a majority, | 8 | | of the voting power, of any particular class as is required by | 9 | | the articles of incorporation. Notice of the meeting of the | 10 | | members shall be given to all members and stockholders whether | 11 | | or not entitled to vote.
| 12 | | (f) Upon the adoption of a resolution of dissolution, | 13 | | articles of dissolution shall be filed with the Secretary of | 14 | | State, on a form prescribed by the Secretary of State. | 15 | | (g) The articles of dissolution described in subsection (f) | 16 | | of this Section shall be signed as follows:
| 17 | | (1) when the resolution of dissolution is adopted by | 18 | | the directors, the certificate shall be signed by not less | 19 | | than a majority of the directors; | 20 | | (2) when the resolution is adopted by the directors or | 21 | | by the members, the certificate shall be signed by any | 22 | | authorized officer. | 23 | | (h) Upon the filing of articles of dissolution, the | 24 | | association shall be dissolved.
| 25 | | Section 185. Public notice of voluntary dissolution. |
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| 1 | | Following the filing of the articles of dissolution, the | 2 | | directors, members, or incorporators who filed the articles of | 3 | | dissolution, as the case may be, shall cause a notice of | 4 | | voluntary dissolution to be published once a week on the same | 5 | | day of each week for 2 successive weeks, in a newspaper | 6 | | published and of general circulation in the county in which the | 7 | | principal place of business of the association was to be or is | 8 | | located and shall cause written notice of dissolution to be | 9 | | given to all known creditors of, and to all known claimants | 10 | | against, the dissolved association. | 11 | | Section 190. Action to wind up affairs or obtain | 12 | | reinstatement of articles.
| 13 | | (a) When an association is dissolved administratively or | 14 | | voluntarily, when a final order of a court is made dissolving | 15 | | an association under Section 195, or when the period of | 16 | | existence of the association specified in its articles of | 17 | | incorporation has expired, the association shall cease to carry | 18 | | on business and shall do only such acts as are required to wind | 19 | | up its affairs or to obtain reinstatement if permitted under, | 20 | | and in accordance with, Section 50.
| 21 | | (b) Any claim existing or action or proceeding pending by | 22 | | or against the association or which would have accrued against | 23 | | it may be prosecuted to judgment, with right of appeal as in | 24 | | other cases, but any proceeding, execution, or process, or the | 25 | | satisfaction or performance of any order, judgment, or decree, |
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| 1 | | may be stayed as provided in Section 195.
| 2 | | (c) Any process, notice, or demand against the association | 3 | | may be served by delivering a copy to an officer, director, | 4 | | liquidator, or person having charge of its assets or, if no | 5 | | such person can be found, to the registered agent.
| 6 | | (d) The directors of the association or their successors | 7 | | shall act as the board of directors in accordance with the | 8 | | articles of incorporation and bylaws until the affairs of the | 9 | | association are completely wound up. Subject to the orders of | 10 | | courts of this State having jurisdiction over the association, | 11 | | the directors shall proceed as speedily as is practicable to a | 12 | | complete winding up of the affairs of the association and, to | 13 | | the extent necessary or expedient to that end, shall exercise | 14 | | all the authority of the association. Without limiting the | 15 | | generality of such authority, the directors may fill vacancies; | 16 | | elect officers; carry out contracts of the association; make | 17 | | new contracts; borrow money; mortgage or pledge the property of | 18 | | the association as security; sell its assets at public or | 19 | | private sale; make conveyances in the association's name; lease | 20 | | real estate for any term, including 99 years renewable forever; | 21 | | settle or compromise claims in favor of or against the | 22 | | association; appoint or employ one or more persons as | 23 | | liquidators to wind up the affairs of the association with | 24 | | authority as the directors see fit to grant; cause the title to | 25 | | any of the assets of the association to be conveyed to such | 26 | | liquidators for that purpose; apply assets to the payment of |
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| 1 | | obligations; and, after paying or adequately providing for the | 2 | | payment of all known obligations of the association, distribute | 3 | | the remainder of the assets either in cash or in kind among the | 4 | | members, patrons, and stockholders according to their | 5 | | respective rights and interests. In addition, the directors may | 6 | | perform all other acts necessary or expedient to the winding up | 7 | | of the affairs of the association.
| 8 | | (e) The directors, or any liquidator to whom the directors | 9 | | grant such authority, in the course of winding up the | 10 | | association's affairs, shall apply the assets of the | 11 | | association in the following order:
| 12 | | (1) to expenses incidental to winding up the | 13 | | association's affairs;
| 14 | | (2) to all legally enforceable liabilities and | 15 | | obligations of the association due claimants and | 16 | | creditors;
| 17 | | (3) to the stockholders, members, and patrons of the | 18 | | association as provided in the association's articles of | 19 | | incorporation or bylaws.
| 20 | | (f) Without limiting the authority of the directors, any | 21 | | action within the purview of this Section that is authorized or | 22 | | approved at a meeting of the members by 60% of the member votes | 23 | | cast thereon shall be conclusive for all purposes upon all | 24 | | members, patrons, and stockholders of the association.
| 25 | | (g) All deeds and other instruments of the association | 26 | | shall be in the name of the association and shall be executed, |
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| 1 | | acknowledged, and delivered by the officers appointed by the | 2 | | directors.
| 3 | | (h) At any time during the winding up of its affairs, the | 4 | | association by its directors may make application to the court | 5 | | of the county in this State in which the principal place of | 6 | | business of the association is located to have the winding up | 7 | | continued under supervision of the court, as provided in | 8 | | Section 195. However, if the association has no principal place | 9 | | of business in this State, the application described in this | 10 | | Section may be made to a court in the county in this State | 11 | | where the registered agent resides.
| 12 | | Section 195. Judicial liquidations. | 13 | | (a) Without limiting the generality of its authority and | 14 | | subject to subsection (b), the court of the county in this | 15 | | State in which is located the principal place of business of a | 16 | | voluntarily dissolved association or whose period of existence | 17 | | has expired, upon the complaint of the association, or a | 18 | | majority of the directors, or 10% of the members or 20 members, | 19 | | whichever is less, and upon such notice to all the directors | 20 | | and other persons interested as the court considers proper, at | 21 | | any time may order and adjudge any of the following matters:
| 22 | | (1) The presentation and proof of all claims and | 23 | | demands against the association and of all rights, | 24 | | interests, or liens in or on any of its property; the | 25 | | fixing of the time and the manner in which such proof shall |
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| 1 | | be made and the person to whom presentation shall be made; | 2 | | and the barring from participation in any distribution of | 3 | | assets of all persons failing to make and present proofs as | 4 | | required by the order of the court.
| 5 | | (2) The stay of the prosecution of any proceeding | 6 | | against the association or involving any of its property; | 7 | | the requirement that the parties to the proceeding present | 8 | | and prove their claims, demands, rights, interests, or | 9 | | liens at the time and in the manner required of creditors | 10 | | or others; or the grant of leave to bring or maintain an | 11 | | independent proceeding to enforce liens.
| 12 | | (3) The settlement or determination of all claims of | 13 | | every nature against the association or any of its | 14 | | property; the determination of the assets required to be | 15 | | retained to pay or provide for the payment of such claims | 16 | | or any claim; the determination of the assets available for | 17 | | distribution among and rights of members, patrons, and | 18 | | stockholders; and the making of new parties to the | 19 | | proceeding so far as the court considers proper for the | 20 | | determination of all matters.
| 21 | | (4) The presentation and filing of intermediate and | 22 | | final accounts of the directors or of the liquidators and | 23 | | hearings on them; the allowance, disallowance, or | 24 | | settlement of the accounts; and the discharge of the | 25 | | directors, the liquidators, or any of them from their | 26 | | duties and liabilities. |
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| 1 | | (5) The appointment of a special master commissioner to | 2 | | hear and determine any matters with authority as the court | 3 | | considers proper.
| 4 | | (6) The filling of any vacancies in the number of | 5 | | directors or liquidators when the directors are unable to | 6 | | act on the vacancies for want of a quorum or for any other | 7 | | reason.
| 8 | | (7) The appointment of a receiver, in accordance with | 9 | | the usage of a court in equitable matters, to wind up the | 10 | | affairs of the association, to take custody of any of its | 11 | | property, or for any other purpose.
| 12 | | (8) The issuance or entry of any injunction or any | 13 | | other order that the court considers proper in the | 14 | | administration of the trust involved in the winding up of | 15 | | the affairs of the association and the giving of notice of | 16 | | the entry of injunction or order.
| 17 | | (9) The allowance and payment of compensation to the | 18 | | directors or any of them, to liquidators, to a receiver, to | 19 | | the attorney for the complainant, or to any person properly | 20 | | rendering services beneficial to the association or to | 21 | | those interested in it.
| 22 | | (10) The entry of a judgment or decree that, if it so | 23 | | provides, may operate as the deed or other instrument | 24 | | ordered to be executed, or the appointment of a master to | 25 | | execute such deed or instrument in the name of the | 26 | | association with the same effect as if executed by an |
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| 1 | | authorized officer pursuant to authority conferred by the | 2 | | directors or the members, patrons, and stockholders of the | 3 | | association, whenever there is no officer or agent | 4 | | competent to execute such deed or instrument, whenever the | 5 | | association or its officers do not perform or comply with a | 6 | | judgment or decree of court, or whenever the court | 7 | | considers it proper.
| 8 | | (b) If the association has no principal place of business | 9 | | in this State, without limiting the generality of its | 10 | | authority, the court in the county in this State where the | 11 | | registered agent resides may order and adjudge the matters | 12 | | described in subsection (a).
| 13 | | (c) A judicial proceeding under this Section concerning the | 14 | | winding up of the affairs of an association is a special | 15 | | proceeding, and final orders in the proceeding may be vacated, | 16 | | modified, or reversed on appeal pursuant to the Code of Civil | 17 | | Procedure.
| 18 | | Section 200. Receiver; winding up affairs of association. | 19 | | (a) Whenever, after an association is dissolved | 20 | | voluntarily or the period of existence of an association has | 21 | | expired, a receiver is appointed to wind up the affairs of the | 22 | | association, all the claims, demands, rights, interests, or | 23 | | liens of creditors, claimants, members, patrons, and | 24 | | stockholders shall be determined as of the day on which the | 25 | | receiver was appointed. Unless it is otherwise ordered, such |
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| 1 | | appointment vests in the receiver and successors of the | 2 | | receiver the right to the immediate possession of all the | 3 | | property of the association, which shall, if so ordered, | 4 | | execute and deliver conveyances of such property to the | 5 | | receiver.
| 6 | | (b) Any officer, director, member, or other person, whether | 7 | | a resident of the state or a nonresident and however | 8 | | interested, may be appointed as receiver.
| 9 | | (c) The receiver shall have all the authority vested in the | 10 | | directors and officers of the association, shall exercise such | 11 | | authority subject to such orders as are made by the court, and | 12 | | may be required to qualify by giving bond to the State in such | 13 | | amount as the court fixes, with surety to the satisfaction of | 14 | | the clerk of the court, conditioned for the faithful discharge | 15 | | of duties and for a due accounting for all money or property | 16 | | received.
| 17 | | Section 205. Marketing agreements.
| 18 | | (a) A cooperative and any member may make marketing | 19 | | agreements, whether written separately or contained in the | 20 | | bylaws, in which the member agrees to do any of the following:
| 21 | | (1) sell, market, or deliver all or any specified part | 22 | | of products produced or to be produced either by the member | 23 | | or under the member's control, to or through the | 24 | | cooperative or any facilities furnished by it;
| 25 | | (2) authorize the cooperative or any facilities |
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| 1 | | furnished by it to act for the member in any manner with | 2 | | respect to all or any specified part of products produced | 3 | | or to be produced either by the member or under the | 4 | | member's control and any services to be furnished by the | 5 | | member;
| 6 | | (3) buy or procure all or a specified part of goods or | 7 | | services from or through the cooperative or any facilities | 8 | | furnished by it; or
| 9 | | (4) authorize the cooperative or any facilities | 10 | | furnished by it to act for the member in any manner in the | 11 | | procurement of goods or services for the member.
| 12 | | (b) The term of marketing agreements may not exceed 10 | 13 | | years.
| 14 | | (c) A marketing agreement authorized by subsection (a) may | 15 | | require that liquidated damages be paid by the member in the | 16 | | event of a breach of the marketing agreement. Liquidated | 17 | | damages shall be specific, reasonable sums. Any provisions for | 18 | | liquidated damages shall be enforceable and not regarded as | 19 | | penalties. | 20 | | (d) If a member breaches or threatens to breach a marketing | 21 | | agreement authorized by this Section, the cooperative shall be | 22 | | entitled to an injunction to prevent the breach or any further | 23 | | breach, and to a decree of specific performance, unless the | 24 | | marketing agreement provides an alternative remedy or damages | 25 | | are more practicable than specific performance under the | 26 | | circumstances.
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| 1 | | Section 210. Foreign association. Any foreign association | 2 | | may carry on any proper activities in this State upon | 3 | | compliance with the provisions applicable to foreign | 4 | | corporations under the Business Corporation Act of 1983, | 5 | | substituting the word "association" for "corporation", and, | 6 | | with respect to the name of a foreign association, substituting | 7 | | references to Section 20 of this Act for references to Section | 8 | | 4.05 of the Business Corporation Act of 1983. Foreign | 9 | | associations desiring to sell memberships or membership stock | 10 | | to residents of this State shall comply with the disclosure | 11 | | requirements under Section 62. All contracts that could be made | 12 | | by any association incorporated under this Act and that are | 13 | | made by or with such foreign associations, shall be enforceable | 14 | | in this State with all of the remedies available at law or in | 15 | | equity. | 16 | | Section 215. Membership in other organizations. An | 17 | | association may organize, form, operate, own, control, have an | 18 | | interest in, own stock of, or be a member of any other | 19 | | cooperative, corporation, or other form of organization. | 20 | | Section 220. Cooperatives organized under the Co-operative | 21 | | Act. A cooperative organized under the Co-operative Act and | 22 | | existing on the effective date of this Act is deemed to be in | 23 | | compliance with this Act with respect to the cooperative's |
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| 1 | | organization. On and after the effective date of this Act, such | 2 | | a cooperative shall comply with all other provisions of this | 3 | | Act. | 4 | | Section 225. Application of laws.
| 5 | | (a) Except as otherwise provided in this Act, this Act | 6 | | applies to all associations, whether organized under this Act | 7 | | prior to the effective date of this Act or on or after that | 8 | | date.
| 9 | | (b) Any law that is in conflict with this Act shall be | 10 | | construed as not applying to associations provided for in this | 11 | | Act.
| 12 | | (805 ILCS 310/Act rep.) | 13 | | Section 900. The Co-operative Act is repealed.".
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