ORIGINAL HOUSE                                   ENGROSSED

BILL   NO.  0021

 

ENROLLED ACT NO. 83,  HOUSE OF REPRESENTATIVES

 

FIFTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING

2001 GENERAL SESSION

 

 

 

 

AN ACT relating to agriculture; providing for processing
cooperative marketing associations; providing certain
requirements for the organization, administration and
operation of cooperative marketing associations as
specified; providing definitions; making conforming
amendments; and providing for an effective date.

 

Be It Enacted by the Legislature of the State of Wyoming:

 

Section 1.  W.S. 17-10-126 is created to read:

 

17-10-126.  Agricultural product marketing contract.

 

A cooperative organized under the provisions of this
article and its patron members or patrons may make and
execute a marketing contract under W.S. 17-10-214.

 

Section 2.  W.S. 17-10-201 through 17-10-253 are
created to read:

 

ARTICLE 2

PROCESSING COOPERATIVE

 

17-10-201.  Title.

 

This act may be cited as the "Wyoming Processing
Cooperative law."

 

17-10-202.  Definitions.

 

(a)  As used in this article:

 

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(i)  "Address" means mailing address, including a
zip code. In the case of a registered address, the term
means the mailing address and the actual office location,
which may not be a post office box;

 

(ii)  "Articles" means the articles of
organization of a cooperative as originally filed and
subsequently amended;

 

(iii)  "Association" means an  organization
conducting business on a cooperative plan under the laws of
this state or another state that is chartered to conduct
business under other laws of this state or another state;

 

(iv)  "Board" means the board of directors of a
cooperative;

 

(v)  "Business entity" means a company, limited
liability company, limited liability partnership or other
legal entity, whether domestic or foreign, association or
body vested with the power or function of a legal entity;

 

(vi)  "Cooperative" means an association
organized under this article conducting business on a
cooperative plan as provided under this article;

 

(vii)  "Domestic business entity" means a
business entity organized under the laws of this state;

 

(viii)  "Filed with the secretary of state" means
that a document meeting the applicable requirements of this
article, signed and accompanied by the required filing fee,
has been delivered to the secretary of state of this state. 
The secretary of state shall endorse on the document the
word "Filed" or a similar word determined by the secretary

 

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of state and the month, day, and year of filing, record the
document in the office of the secretary of state, and
return a document to the person or entity who delivered it
for filing;

 

(ix)  "Foreign business entity" means a business
entity that is not a domestic business entity;

 

(x)  "Member" means a person or entity reflected
on the books of the cooperative as the owner of governance
rights of a membership interest of the cooperative and
includes patron and nonpatron members;

 

(xi)  "Membership interest" means a member's
interest in a cooperative consisting of a member's
financial rights, a member's right to assign financial
rights, a member's governance rights and a member's right
to assign governance rights. Membership interest includes
patron membership interests and nonpatron membership
interests;

 

(xii)  "Members' meeting" means a regular or
special members' meeting;

 

(xiii)  "Nonpatron membership interest" means a
membership interest that does not require the holder to
conduct patronage business for or with the cooperative to
receive financial rights or distributions;

 

(xiv)  "Patron" means a person or entity who
conducts patronage business with the cooperative;

 

(xv)  "Patronage" means business, transactions,
or services done for or with the cooperative as defined by
the cooperative;

 

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(xvi)  "Patron member" means a member holding a
patron membership interest;

 

(xvii)  "Patron membership interest" means the
membership interest requiring the holder to conduct
patronage business for or with the cooperative, as
specified by the cooperative to receive financial rights or
distributions;

 

(xviii)  "Signed" means that the signature of a
person has been written on a document, and, with respect to
a document required by this article to be filed with the
secretary of state, means that the document has been signed
by a person authorized to do so by this article, the
articles or bylaws, or by a resolution approved by the
directors or the members.  A signature on a document may be
a facsimile affixed, engraved, printed, placed, stamped
with indelible ink, transmitted by facsimile or
electronically or in any other manner reproduced on the
document;

 

(xix)  "The act" means W.S. 17-10-201 through
17-10-253.

 

17-10-203.  Filing fee; rules and regulations; annual
reports and license taxes.

 

(a)  Unless otherwise provided, the filing fee for
documents filed under this article with the secretary of
state shall be subject to the provisions of W.S. 17-16-122.
The secretary of state shall promulgate rules and
regulations necessary to implement the provisions of this
article.

 

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(b)  The provisions of W.S. 17-16-1630 regarding the
filing of reports, license taxes and records shall apply to
cooperatives formed under this article.

 

17-10-204.  Registered agent; change of registered
office or registered agent.

 

(a)  Each cooperative shall have and continuously
maintain in this state:

 

(i)  A registered office which may be, but need
not be, the same as its place of business;

 

(ii)  A registered agent, which agent may be
either an individual resident in this state whose business
office is identical with such registered office, or a
domestic corporation, or a foreign corporation authorized
to transact business in this state, having a business
office identical with such registered office.

 

(b)  A cooperative may change its registered office or
agent, or both, upon filing in the office of the secretary
of state a statement setting forth:

 

(i)  The name of the cooperative;

 

(ii)  The address of its then registered office;

 

(iii)  If the address of its registered office be
changed, the address to which the registered office is to
be changed;

 

(iv)  The name of its then registered agent;

 

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(v)  If its registered agent be changed, the name
of its successor registered agent;

 

(vi)  That the address of its registered office
and the address of the business office of its registered
agent, as changed, will be identical;

 

(vii)  That the change was authorized by
affirmative vote of a majority of the board of directors of
the cooperative.

 

(c)  The statement shall be signed and delivered to
the secretary of state. If the secretary of state finds
that the statement conforms to the provisions of this act,
he shall file the statement in his office, and upon filing
the change of address of the registered office or the
appointment of a new registered agent or both, as the case
may be is effective.

 

(d)  Any registered agent of a cooperative may resign
as agent upon filing a written notice thereof, signed with
one (1) original and one (1) exact or conformed copy, with
the secretary of state, who shall forthwith mail a copy
thereof to the cooperative at its principal mailing address
as defined and prescribed by the secretary of state. The
appointment of the agent shall terminate upon the
expiration of thirty (30) days after receipt of notice by
the secretary of state.

 

(e)  If any cooperative has failed for thirty (30)
days to appoint and maintain a registered agent in this
state, or has failed for thirty (30) days after change of
its registered office or registered agent to file in the
office of the secretary of state a statement of the change
it shall be deemed to be transacting business within this

 

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state without authority and to have forfeited any
franchises, rights or privileges acquired under the laws
thereof and the forfeiture shall be made effective in the
following manner. The secretary of state shall mail by
certified mail a notice of its failure to comply with
aforesaid provisions. Unless compliance is made within
thirty (30) days of the delivery of notice, the cooperative
shall be deemed defunct and to have forfeited its
certificate of organization acquired under the laws of this
state. Provided, that any defunct cooperative may at any
time within two (2) years after the forfeiture of its
certificate, in the manner herein provided, be revived and
reinstated, by filing the necessary statement under this
act and paying a reinstatement fee established by the
secretary of state by rule, together with a penalty of one
hundred dollars ($100.00). The reinstatement fee shall not
exceed the costs of providing the reinstatement service.
The cooperative shall retain its registered name during the
two (2) year reinstatement period under this section.

 

17-10-205.  Organizational purpose.

 

A cooperative may be formed and organized on a cooperative
plan as provided under this article to market, process, or
otherwise change the form or marketability of crops,
livestock and other agricultural products, including
manufacturing and further processing of those products and
other purposes that are necessary or convenient to
facilitate the production or marketing of agricultural
products by patron members and other purposes that are
related to the business of the cooperative.

 

17-10-206.  Organizers.

 

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A cooperative may be organized by one (1) or more
organizers who shall be adult natural persons, who may act
for themselves as individuals or as the agents of other
entities. The organizers forming the cooperative need not
be members of the cooperative.

 

17-10-207.  Cooperative name.

 

(a)  The name of a cooperative shall distinguish the
cooperative upon the records in the office of the secretary
of state from the name of a domestic business entity or a
foreign business entity, authorized or registered to do
business in this state or a name the right to which is, at
the time of organization, reserved or provided for by law.

 

(b)  The cooperative name shall be reserved for the
cooperative during its existence.

 

17-10-208.  Articles of organization.

 

(a)  The organizers shall prepare the articles, which
shall include:

 

(i)  The name of the cooperative;

 

(ii)  The purpose of the cooperative;

 

(iii)  The principal place of business for the
cooperative and the name and address of its registered
agent in this state;

 

(iv)  The period of duration for the cooperative,
if the duration is not to be perpetual;

 

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(v)  The capital structure of the cooperative
including a statement of the classes and relative rights,
preferences, and restrictions granted to or imposed upon
each class of member interests, the rights to share in
profits or distributions of the cooperative, and the
authority to issue member interests, which may be
designated to be determined by the board;

 

(vi)  A provision designating the voting and
governance rights, including which membership interests
have voting power and any limitations or restrictions on
the voting power, which shall be in accordance with the
provisions of this article;

 

(vii)  A statement that patron membership
interests with voting power shall be restricted to one (1)
vote for each member regardless of the amount of patron
membership interests held in the affairs of the cooperative
or a statement describing the allocation of voting power
allocated as prescribed in this article;

 

(viii)  A statement that membership interests
held by a member are transferable only with the approval of
the board or as provided in the bylaws;

 

(ix)  The names, post office addresses, and terms
of office of the directors of the first board;

 

(x)  A statement as to how profits and losses
will be allocated and cash will be distributed between
patron membership interests collectively and nonpatron
membership interests collectively, a statement that net
income allocated to a patron membership interests as
determined by the board in excess of dividends and
additions to reserves shall be distributed on the basis of

 

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patronage, and that the records of the cooperative shall
include the interests of patron membership interests and
nonpatron membership interests which may be further
described in the bylaws, of any classes, and in the
reserves; and

 

(xi)  The registered address of the cooperative.

 

(b)  The articles shall contain the provisions in
subsection (a) of this section, except that the names, post
office addresses of the directors of the first board may be
omitted after their successors have been elected by the
members or the articles are amended in their entirety.

 

(c)  The articles may contain any other lawful
provision.

 

(d)  The articles shall be signed by the organizers.

 

(e)  The original articles shall be filed with the
secretary of state. The fee for filing the articles with
the secretary of state shall be subject to the provisions
of W.S. 17-16-122.

 

(f)  When the articles of organization have been filed
with the secretary of state and the required fee has been
paid to the secretary of state, it shall be presumed that:

 

(i)  All conditions precedent that are required
to be performed by the organizers have been complied with;

 

(ii)  The organization of the cooperative has
been chartered by the state as a separate legal entity; and

 

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(iii)  The secretary of state shall issue a
certificate of organization to the cooperative.

 

17-10-209.  Amendment of articles.

 

(a)  The articles of a cooperative shall be amended as
follows:

 

(i)  The board by majority vote shall pass a
resolution stating the text of the proposed amendment. The
text of the proposed amendment and an attached mail ballot,
if the board has provided for a mail ballot in the
resolution or alternative method approved by the board and
stated in the resolution, shall be mailed or distributed
with a regular or special meeting notice to each member.
The notice shall designate the time and place of the
meeting for the proposed amendment to be considered and
voted on;

 

(ii)  If a quorum of the members is registered as
being present or represented by alternative vote at the
meeting, the proposed amendment is adopted:

 

(A)  If approved by a majority of the votes
cast; or

 

(B)  For a cooperative with articles or
bylaws requiring more than majority approval or other
conditions for approval, the amendment is approved by a
proportion of the votes cast or a number of total members
as required by the articles or bylaws and the conditions
for approval in the articles or bylaws have been satisfied.

 

(b)  After an amendment has been adopted by the
members, the amendment shall be signed by the chair,

 

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vice-chair, records officer, or assistant records officer
and a copy of the amendment filed in the office of the
secretary of state.

 

(c)  A certificate shall be prepared stating:

 

(i)  The vote and meeting of the board adopting a
resolution of the proposed amendment;

 

(ii)  The notice given to members of the meeting
at which the amendment was adopted;

 

(iii)  The quorum registered at the meeting; and

 

(iv)  The vote cast adopting the amendment.

 

(d)  The certificate shall be signed by the chair,
vice-chair, records officer or financial officer and filed
with the records of the cooperative.

 

(e)  A majority of directors may amend the articles if
the cooperative does not have any members with voting
rights.

 

17-10-210.  Amendment of organizational documents to
be governed by this article.

 

(a)  A business entity organized and doing business
under other statutes of this state or under the laws of
other states that has or will conduct business as a
cooperative may become subject to this article by amending
its organizational documents to conform to the requirements
of articles of organization under this article.

 

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(b)  A business entity organized under other statutes
of this state may amend its articles in the manner provided
under the statute that it is governed by for the adoption
of amendments to comply with the provisions of this article
and file the amended articles with the secretary of state
to be a cooperative governed under this article. The status
of the business entity under the other statutes terminates
with the filing of articles to be governed under this
article.

 

(c)  A business entity organized under laws of other
states shall amend its organizational documents in the
manner required by the laws of the state where it was
organized to comply with the provisions of this article.
After the organizational documents are amended, the
business entity shall file a certified copy of the
organizational documents as amended with the secretary of
state to comply with the provisions of this article with
the fees and requirements prescribed for filing articles.
After filing, the business entity is a cooperative in this
state organized under and subject to the provisions of this
article.

 

17-10-211.  Existence.

 

(a)  The existence of a cooperative shall begin when
the articles are filed with the secretary of state.

 

(b)  A cooperative shall have a perpetual duration
unless the cooperative provides for a limited period of
duration in the articles of organization.

 

17-10-212.  Bylaws.

 

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(a)  A cooperative shall have bylaws governing the
cooperative's business affairs, structure, the
qualifications, classification, rights and obligations of
members, and the classifications, allocations and
distributions of membership interests.

 

(b)  The bylaws of a cooperative may be adopted or
amended by the directors as provided in subsection (c) of
this section, or at a regular or special members' meeting
if:

 

(i)  The notice of the meeting contains a
statement that the bylaws or restated bylaws will be voted
upon and copies are included with the notice, or copies are
available upon request from the cooperative and summary
statement of the proposed bylaws or amendment is included
with the notice;

 

(ii)  A quorum is registered as being present or
represented by mail or alternative voting method if the
mail or alternative voting method is authorized by the
board; and

 

(iii)  The bylaws or amendment is approved by a
majority vote cast, or for a cooperative with articles or
bylaws requiring more than majority approval or other
conditions for approval, the bylaws or amendment is
approved by a proportion of the vote cast or a number of
the total members as required by the articles or bylaws and
the conditions for approval in the articles or bylaws have
been satisfied.

 

(c)  Until the next annual or special members'
meeting, the majority of directors may adopt and amend
bylaws for the cooperative that are consistent with

 

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subsection (d) of this section which may be further amended
or repealed by the members at an annual or special members'
meeting.

 

(d)  Bylaws may contain any provision relating to the
management or regulation of the affairs of the cooperative
that are not inconsistent with law or the articles, and
shall include the following:

 

(i)  The number of directors, and the
qualifications, manner of election, powers, duties, and
compensation, if any, of directors;

 

(ii)  The qualifications of members and any
limitations on their number;

 

(iii)  The manner of admission, withdrawal,
suspensions, and expulsion of members;

 

(iv)  Generally the governance rights, financial
rights, assignability of governance and financial rights,
and other rights, privileges and obligations of members and
their membership interests, which may be further described
in member control agreements.

 

17-10-213.  Powers.

 

(a)  In addition to other powers, a cooperative as an
agent or otherwise:

 

(i)  May perform every act and thing necessary or
proper to the conduct of the cooperative's business or the
accomplishment of the purposes of the cooperative;

 

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(ii)  Has other rights, powers, or privileges
granted by the laws of this state to other cooperatives,
except those that are inconsistent with the express
provisions of this article; and

 

(iii)  Has the powers given in this section.

 

(b)  A cooperative may buy, sell, or deal in its own
products, the products of the cooperative's individual
members, patrons or nonmembers, the products of another
cooperative association, or of its members or patrons, or
the products of another person or entity. A cooperative may
negotiate the price at which the products the cooperative
is selling may be sold.

 

(c)  A cooperative may enter into or become a party to
a contract or agreement for the cooperative or for the
cooperative's individual members or patrons or between the
cooperative and its members.

 

(d)  A cooperative may purchase and hold, lease,
mortgage, encumber, sell, exchange and convey as a legal
entity real estate, buildings and personal property as the
business of the cooperative may require including the sale
or other disposition of assets required by the business of
the cooperative as determined by the board.

 

(e)  A cooperative may erect buildings or other
structures or facilities on the cooperative's owned or
leased property or on a right-of-way legally acquired by
the cooperative.

 

(f)  A cooperative may issue bonds or other evidence
of indebtedness and may borrow money to finance the
business of the cooperative.

 

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(g)  A cooperative may make advances to the
cooperative's members or patrons on products delivered by
the members or patrons to the cooperative.

 

(h)  A cooperative may accept deposits of money from
other cooperatives, associations or members from which it
is constituted.

 

(j)  A cooperative may loan or borrow money to or from
individual members, cooperatives or associations from which
it is constituted with security that it considers
sufficient in dealing with the members, cooperatives, or
associations.

 

(k)  A cooperative may purchase, acquire, hold, or
dispose of the ownership interests of another business
entity whether organized under the laws of this state or
another state and assume all rights, interests, privileges,
responsibilities and obligations arising out of the
ownership interests.

 

(m)  A cooperative may acquire and hold ownership
interests in another business entity organized under the
laws of this state or another state of the United States,
including a business entity organized:

 

(i)  As a federation of associations;

 

(ii)  For the purpose of forming a district,
state, or national marketing, sales or service agency; or

 

(iii)  For the purpose of acquiring marketing
facilities at terminal or other markets in this state or
other states.

 

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(n)  A cooperative may purchase, own, and hold
ownership interests, memberships, interests in nonstock
capital, evidences of indebtedness of any domestic business
entity or foreign business entity when reasonably necessary
or incidental to accomplish the purposes stated in the
articles.

 

(o)  A cooperative may exercise any and all fiduciary
powers in relations with members, cooperatives,
associations or business entities from which it is
constituted.

 

(p)  A cooperative may take, receive, and hold real
and personal property, including the principal and interest
of money or other funds and rights in a contract, in trust
for any purpose not inconsistent with the purposes of the
cooperative in its articles and may exercise fiduciary
powers in relation to taking, receiving, and holding the
real and personal property.

 

17-10-214.  Agricultural product marketing contracts.

 

(a)  A cooperative and its patron member or patron may
make and execute a marketing contract, requiring the patron
member or patron to sell a specified portion of his
agricultural product or specified commodity produced from a
certain area exclusively to or through the cooperative or
facility established by the cooperative.

 

(b)  If a sale is contracted to the cooperative, the
sale shall transfer title to the product absolutely, except
for a recorded lien or security interest, to the
cooperative on delivery of the product or at another
specified time if expressly provided in the contract. The

 

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contract may allow the cooperative to sell or resell the
product of its patron member or patron with or without
taking title to the product, and pay the resale price to
the patron member or patron, after deducting all necessary
selling, overhead and other costs and expenses, including
other proper reserves and interest.

 

(c)  A single term of a marketing contract shall not
exceed ten (10) years, but a marketing contract may be made
self-renewing for periods not exceeding five (5) years
each, subject to the right of either party to terminate by
giving written notice of the termination during a period of
the current term as specified in the contract.

 

(d)  The bylaws or the marketing contract, or both,
may set a specific sum as liquidated damages to be paid by
the patron member or patron to the cooperative for breach
of any provision of the marketing contract regarding the
sale or delivery or withholding of a product and may
provide that the member or patron shall pay the costs,
premiums for bonds, expenses and fees if an action is
brought on the contract by the cooperative. The remedies
for breach of contract are valid and enforceable in the
courts of this state. The provisions shall be enforced as
liquidated damages and are not to be considered or regarded
as a penalty.

 

(e)  If there is a breach or threatened breach of a
marketing contract by a patron member or patron, the
cooperative is entitled to an injunction to prevent the
further breach of the contract and to a decree of specific
performance of the contract. Pending the adjudication of
the action after filing a certified complaint showing the
breach or threatened breach and filing a sufficient bond,
the cooperative is entitled to a temporary restraining

 

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order and preliminary injunction against the patron member
or patron.

 

(f)  Any person who knowingly induces or attempts to
induce any member or patrons of a cooperative organized
under this article to breach his marketing contract with
the cooperative, or who maliciously and knowingly spreads
false reports about the finances or management thereof,
shall be guilty of a misdemeanor and subject to a fine of
not less than one hundred dollars ($100.00), and not more
than one thousand dollars ($1,000.00), for each such
offense; provided, that this section shall not apply to a
bona fide creditor of such cooperative, or the agent or
attorney of any such bona fide creditor, endeavoring to
make collections of the indebtedness.

 

(g)  In addition to the penalty provided in subsection
(f) of this section, the person, corporation or other
entity may be liable to the cooperative for civil damages
for any violation of the provisions of subsection (f) of
this section. Each violation shall constitute a separate
offense and is subject to the penalties in this subsection
and subsection (f) of this section.

 

17-10-215.  Board governs cooperative.

 

A cooperative shall be governed by its board.

 

17-10-216.  Number of directors.

 

The board shall have not less than three (3) directors.

 

17-10-217.  Election of directors.

 

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(a)  Directors shall be elected for the term, at the
time, and in the manner provided in this section and the
bylaws. A majority of the directors shall be members and at
least one (1) director shall be elected exclusively by the
members holding patron membership interests. The voting
authority of the directors may be allocated according to
allocation units or equity classifications of the
cooperative provided that at least one-half (1/2) of the
voting power on general matters of the cooperative shall be
allocated to one (1) or more directors elected by members
holding patron membership interests or in the alternative
the one (1) or more directors elected by the members
holding patron membership interests shall have an equal or
shall not have a minority voting power on general matters
of the cooperative.

 

(b)  Directors shall be elected at the regular
members' meeting for the terms of office prescribed in the
bylaws. Except for directors elected at district meetings,
all directors shall be elected at the regular members'
meeting.

 

(c)  For a cooperative with districts or other units,
members may elect directors on a district or unit basis if
provided in the bylaws. The directors may be nominated or
elected at district meetings if provided in the bylaws.
Directors who are nominated at district meetings shall be
elected at the annual regular members' meeting by vote of
the entire membership, unless the bylaws provide that
directors who are nominated at district meetings are to be
elected by vote of the members of the district at the
annual regular members' meeting.

 

(d)  The following shall apply to alternative voting:

 

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(i)  A member may not vote other than by their
presence at a meeting for a director unless alternative
voting is authorized for election of directors by the
articles or bylaws;

 

(ii)  The ballot shall be in a form prescribed by
the board;

 

(iii)  The member shall mark the ballot for the
candidate chosen and mail the ballot to the cooperative in
a sealed plain envelope inside another envelope bearing the
member's name, or shall vote in the alternative manner
prescribed by the board;

 

(iv)  If the ballot of the member is received by
the cooperative on or before the date of the regular
members' meeting, the ballot shall be accepted and counted
as the vote of the absent member.

 

(e)  If a member of a cooperative is not a natural
person, and the bylaws do not provide otherwise, the member
may appoint or elect one (1) or more natural persons to be
eligible for election as a director to the board.

 

17-10-218.  Filling vacancies.

 

If a patron member director's position becomes vacant for a
director that was elected by patron members, the board
shall appoint a patron member of the cooperative to fill
the director's position until the next regular or special
members' meeting. If the vacating director was not a patron
member, the board shall appoint a patron member to fill the
vacant position. At the next regular or special members'
meeting, the members or patron members shall elect a

 

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director to fill the unexpired term of the vacant
director's position.

 

17-10-219.  Removal of directors.

 

The members electing a director may remove the director at
a members' meeting for cause related to the duties of the
position of director and fill the vacancy caused by the
removal.

 

17-10-220.  Limitation of director's liability.

 

(a)  A director's personal liability to the
cooperative or members for monetary damages for breach of
fiduciary duty as a director may be eliminated or limited
in the articles except as provided in subsection (b) of
this section.

 

(b)  The articles may not eliminate or limit the
liability of a director:

 

(i)  For a breach of the director's duty of
loyalty to the cooperative or its members;

 

(ii)  For acts or omissions that are not in good
faith or involve intentional misconduct or a knowing
violation of law;

 

(iii)  For a transaction from which the director
derived an improper personal benefit; or

 

(iv)  For an act or omission occurring before the
date when the provision in the articles eliminating or
limiting liability becomes effective.

 

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17-10-221.  Officers.

 

(a)  The board shall elect:

 

(i)  A chair; and

 

(ii)  One (1) or more vice-chairs.

 

(b)  The board shall elect or appoint:

 

(i)  A records officer; and

 

(ii)  A financial officer.

 

(c)  The board may elect additional officers as the
articles or bylaws authorize or require.

 

(d)  The offices of records officer and financial
officer may be combined.

 

(e)  The chair and first vice-chair shall be directors
and members.  The financial officer, records officer, and
additional officers need not be directors or members.

 

(f)  The board may employ a chief executive officer to
manage the day-to-day affairs and business of the
cooperative.

 

(g)  Other than the chief executive officer, members
may remove an officer at a members' meeting for cause
related to the duties of the position of the officer and
fill the vacancy caused by the removal.

 

17-10-222.  Membership interests.

 

Page 24

 

 

 

(a)  The authorized amount and divisions of patron
membership interests and nonpatron membership interests may
be increased or decreased or established or altered, in
accordance with the restrictions in this article by
amending the articles at a regular members' meeting or at a
special members' meeting called for the purpose of the
amendment.

 

(b)  Authorized membership interests may be issued on
terms and conditions prescribed in the articles, bylaws, or
as determined by the board. The cooperative shall disclose
to any person or entity acquiring membership interests to
be issued by the cooperative, the organization, capital
structure and business prospects and risks of the
cooperative, the nature of the governance and financial
rights of the membership interest being acquired and of
other classes of membership and membership interests. The
cooperative shall notify all members of the membership
interests being offered by the cooperative. A membership
interest may not be issued until the subscription price of
the membership interest has been paid for in cash or a cash
equivalent or property with the agreed upon value of the
property to be contributed.

 

(c)  The patron membership interests collectively
shall have not less than fifteen percent (15%) of the
cooperative's financial rights to profit allocations and
distributions.

 

(d)  After issuance by the cooperative, membership
interests in a cooperative may only be sold or transferred
with the approval of the board.

 

(e)  The cooperative may solicit and issue nonpatron
membership interests on terms and conditions determined by

 

Page 25

 

 

 

the board and disclosed in the articles, bylaws or by
separate disclosure to the members. Each member acquiring
nonpatron membership interests shall sign a member control
agreement which shall describe the rights and obligations
of the member as it relates to the nonpatron membership
interests, the financial and governance rights, the
transferability of the nonpatron membership interests, the
division and allocations of profits and losses among the
membership interests and membership classes, and financial
rights upon liquidation. If the bylaws do not otherwise
provide for the allocation of the profits and losses
between patron membership interests and nonpatron
membership interests, then the allocation of profits and
losses among nonpatron membership interests individually
and patron membership interests collectively shall be
allocated on the basis of the value of contributions to
capital made according to the patron membership interests
collectively and the nonpatron membership interests
individually to the extent the contributions have been
accepted by the cooperative. Distributions of cash or other
assets of the cooperative shall be allocated among the
membership interests as provided in the articles and
bylaws, subject to the provisions of this article. If not
otherwise provided, distributions shall be made on the
basis of value of the capital contributions of the patron
membership interests collectively and the nonpatron
membership interests to the extent the contributions have
been accepted by the cooperative.

 

(f)  The bylaws may provide that the cooperative or
the patron members, individually or collectively, have the
first privilege of purchasing the membership interests of
any class of patron member's membership interests offered
for sale. The first privilege to purchase patron membership
interests may be satisfied by notice to other patron

 

Page 26

 

 

 

members that the patron membership interests are for sale
and a procedure by which patron members may proceed to
attempt to purchase and acquire the patron membership
interests. A patron membership interest acquired by the
cooperative may be held to be reissued or may be retired
and cancelled.

 

(g)  Subject to the provisions in the bylaws, a member
may dissent from and obtain payment for the fair value of
the member's nonpatron membership interests in the
cooperative if the articles or bylaws are amended in a
manner that materially and adversely affects the rights and
preferences of the nonpatron membership interests of the
dissenting member. The dissenting member shall file a
notice of intent to demand fair value of the membership
interest with the records officer of the cooperative within
thirty (30) days after the amendment of the bylaws and
notice of the amendment to members, otherwise the right of
the dissenting member to demand payment of fair value for
the membership interest is deemed to be waived. If a
proposed amendment of the articles or bylaws shall be
approved by the members, a member who is entitled to
dissent and who wishes to exercise dissenter's rights shall
file a notice to demand fair value of the membership
interest with the records officer of the cooperative before
the vote on the proposed action and shall not vote in favor
of the proposed action, otherwise the right to demand fair
value for the membership interest by the dissenting member
is deemed waived. After receipt of the dissenting member's
demand notice and approval of the amendment, the
cooperative has sixty (60) days to rescind the amendment or
otherwise the cooperative shall remit the fair value for
the one (1) member's interest to the dissenting member by
one hundred eighty (180) days after receipt of the notice.

 

Page 27

 

 

 

Upon receipt of the fair value for the membership interest,
the member has no further member rights in the cooperative.

 

17-10-223.  Grouping of members.

 

(a)  A cooperative may group members and patron
members in districts, units or another basis if and as
authorized in its articles and bylaws which may include
authorization for the board to determine the groupings.

 

(b)  The board may do things necessary to implement
the use of districts or units including setting the time
and place and prescribing the rules of conduct for holding
meetings by districts or units to elect delegates to
members' meetings.

 

17-10-224.  Member violations; liability for
cooperative debts.

 

(a)  A member who knowingly, intentionally, or
repeatedly violates a provision of the articles, bylaws,
member control agreement or marketing contract with the
cooperative, may be required by the board to surrender the
financial rights of membership interest of any class owned
by the member.

 

(b)  The cooperative shall refund to the member for
the surrendered financial rights of membership interest the
lesser of the book value or market value of the financial
right of the membership interest payable in not more than
seven (7) years from the date of surrender or the board may
transfer all of any patron member's financial rights to a
class of financial rights held by members who are not
patron members, or to a certificate of interest which
carries liquidation rights on par with membership interests

 

Page 28

 

 

 

and is redeemed within seven (7) years after the transfer
as provided in the certificate.

 

(c)  Membership interests required to be surrendered
may be reissued or be retired and cancelled by the board.

 

(d)  A member who knowingly, intentionally or
repeatedly violates a provision of the articles, bylaws,
member control agreement, or a marketing contract, may be
required by the board to surrender voting power in the
cooperative.

 

(e)  A member is not, merely on the account of that
status, personally liable for the acts, debts, liabilities,
or obligations of a cooperative. A member is liable for any
unpaid subscription for the membership interest, unpaid
membership fees, or a debt for which the member has
separately contracted with the cooperative.

 

17-10-225.  Regular members' meetings.

 

(a)  Regular members' meetings shall be held annually
at a time determined by the board, unless otherwise
provided for in the bylaws.

 

(b)  The regular members' meeting shall be held at the
principal place of business of the cooperative or at
another conveniently located place as determined by the
bylaws or the board.

 

(c)  The officers shall submit reports to the members
at the regular members' meeting covering the business of
the cooperative for the previous fiscal year that show the
condition of the cooperative at the close of the fiscal
year.

 

Page 29

 

 

 

(d)  All directors shall be elected at the regular
members' meeting for the terms of office prescribed in the
bylaws, except for directors elected at district or unit
meetings.

 

(e)  The cooperative shall give notice of regular
members' meetings by mailing the regular members' meeting
notice to each member at the member's last known post
office address or by other notification approved by the
board and agreed to by the members. The regular members'
meeting notice shall be published or otherwise given by
approved method at least two (2) weeks before the date of
the meeting or mailed at least fifteen (15) days before the
date of the meeting.

 

17-10-226.  Special members' meetings.

 

(a)  Special members' meetings of the members may be
called by:

 

(i)  A majority vote of the board; or

 

(ii)  The written petition of at least twenty
percent (20%) of the patron members, twenty percent (20%)
of the nonpatron members or twenty percent (20%) of all
members collectively are submitted to the chair.

 

(b)  The cooperative shall give notice of a special
members' meeting by mailing the special members' meeting
notice to each member personally at the person's last known
post office address or an alternative method approved by
the board and the member individually or the members
generally. For a member that is an entity, notice mailed or
delivered by an alternative method shall be to an officer

 

Page 30

 

 

 

of the entity. The special members' meeting notice shall
state the time, place, and purpose of the special members'
meeting. The special members' meeting notice shall be
issued within ten (10) days from and after the date of the
presentation of a members' petition, and the special
members' meeting shall be held within thirty (30) days
after the date of the presentation of the members'
petition.

 

17-10-227.  Certification of meeting notice.

 

(a)  After mailing special or regular members' meeting
notices or otherwise delivering the notices, the
cooperative shall execute a certificate containing the date
of mailing or delivery of the notice and a statement that
the special or regular members' meeting notices were mailed
or delivered as prescribed by law.

 

(b)  The certificate shall be made a part of the
record of the meeting.

 

17-10-228.  Failure to receive meeting notice.

 

Failure of a member to receive a special or regular
members' meeting notice does not invalidate an action that
is taken by the members at a members' meeting.

 

17-10-229.  Quorum.

 

(a)  The quorum for a members' meeting to transact
business shall be:

 

(i)  Ten percent (10%) of the total number of
members for a cooperative with five hundred (500) or less
members; or

 

Page 31

 

 

 

(ii)  Fifty (50) members for cooperatives with
more than five hundred (500) members.

 

(b)  In determining a quorum at a meeting, on a
question submitted to a vote by mail or an alternative
method, members present in person or represented by mail
vote or the alternative voting method shall be counted. The
attendance of a sufficient number of members to constitute
a quorum shall be established by a registration of the
members of the cooperative present at the meeting. The
registration shall be verified by the chair or the records
officer of the cooperative and shall be reported in the
minutes of the meeting.

 

(c)  An action by a cooperative is not valid or legal
in the absence of a quorum at the meeting at which the
action was taken.

 

17-10-230.  Member voting rights.

 

(a)  A patron member of a cooperative is only entitled
to one (1) vote on an issue to be voted upon by members
holding patron membership interests, except that a patron
member of a cooperative described in W.S. 17-10-231 may be
entitled to more than one (1) vote as provided in that
section. On any matter of the cooperative, the entire
patron members voting power shall be voted collectively
based upon the vote of the majority of patron members
voting on the issue. A nonpatron member has the voting
rights in accordance to his nonpatron membership interests
as granted in the bylaws, subject to the provisions of this
article.

 

Page 32

 

 

 

(b)  A member or delegate may exercise voting rights
on any matter that is before the members as prescribed in
the articles or bylaws at a members' meeting from the time
the member or delegate arrives at the members' meeting,
unless the articles or bylaws specify an earlier and
specific time for closing the right to vote.

 

(c)  A member's vote at a members' meeting shall be in
person or by mail if a mail vote is authorized by the board
or by alternative method if authorized by the board, and
not by proxy except as provided in subsection (d) of this
section.

 

(d)  The following shall apply to members represented
by delegates:

 

(i)  A cooperative may provide in the articles or
bylaws that units or districts of members are entitled to
be represented at members' meetings by delegates chosen by
the members of the unit or district. The delegates may vote
on matters at the members' meeting in the same manner as a
member. The delegates may only exercise the voting rights
on a basis and with the number of votes as prescribed in
the articles or bylaws;

 

(ii)  If the approval of a certain portion of the
members is required for adoption of amendments, a
dissolution, a merger, a consolidation, or a sale of
assets, the votes of delegates shall be counted as votes by
the members represented by the delegate;

 

(iii)  Patron members may be represented by the
proxy of other patron members;

 

Page 33

 

 

 

(iv)  Nonpatron members may be represented by
proxy if authorized in the bylaws.

 

(e)  The following shall apply to absentee ballots:

 

(i)  A member who is or will be absent from a
members' meeting may vote by mail or by an approved
alternative method on the ballot prescribed in this
subsection on any motion, resolution or amendment that the
board submits for vote by mail or alternative method to the
members;

 

(ii)  The ballot shall be in the form prescribed
by the board and contain:

 

(A)  The exact text of the proposed motion,
resolution or amendment to be acted on at the meeting; and

 

(B)  The text of the motion, resolution or
amendment for which the member may indicate an affirmative
or negative vote.

 

(iii)  The member shall express a choice by
marking an appropriate choice on the ballot and mail,
deliver or otherwise submit the ballot to the cooperative
in a plain, sealed envelope inside another envelope bearing
the member's name or by an alternative method approved by
the board;

 

(iv)  A properly executed ballot shall be
accepted by the board and counted as the vote of the absent
member at the meeting.

 

Page 34

 

 

 

17-10-231.  Patron member voting in cooperatives
constituted entirely or partially of other cooperatives or
associations.

 

(a)  A cooperative that is constituted entirely or
partially of other cooperatives or associations may
authorize by the articles or the bylaws for affiliated
cooperative patron members to have an additional vote for:

 

(i)  A stipulated amount of business transacted
between the patron member cooperative and the central
cooperative organization;

 

(ii)  A stipulated number of patron members in
the member cooperative;

 

(iii)  A certain stipulated amount of equity
allocated to or held by the patron member cooperative in
the cooperative central organization; or

 

(iv)  A combination of methods in paragraphs (i)
through (iii) of this subsection.

 

(b)  A cooperative that is organized into units or
districts of patron members, may, by the articles or the
bylaws, authorize the delegates elected by its patron
members or, have an additional vote for:

 

(i)  A stipulated amount of business transacted
between the patron members in the units or districts and
the cooperative;

 

(ii)  A certain stipulated amount of equity
allocated to or held by the patron members of the units or
districts of the cooperative; or

 

Page 35

 

 

 

(iii)  A combination of methods in paragraphs (i)
and (ii) of this subsection.

 

17-10-232.  Vote of ownership interests held by
cooperative.

 

A cooperative that holds ownership interests of another
business entity may, by direction of the cooperative's
board, elect or appoint a person to represent the
cooperative at a meeting of the business entity. The
representative has authority to represent the cooperative
and may cast the cooperative's vote at the business
entity's meeting.

 

17-10-233.  Allocations and distributions to members.

 

(a)  The bylaws shall prescribe the allocation of
profits and losses between patron membership interests
collectively and other membership interests.  If the bylaws
do not otherwise provide, the profits and losses between
patron membership interests collectively and other
membership interests shall be allocated on the basis of the
value of contributions to capital made by the patron
membership interests collectively and other membership
interests and accepted by the cooperative. The allocation
of profits to the patron membership interests collectively
shall not be less than fifteen percent (15%) of the total
profits in any fiscal year.

 

(b)  The bylaws shall prescribe the distribution of
cash or other assets of the cooperative among the
membership interests of the cooperative. If not otherwise
provided in the bylaws, distribution shall be made to the
patron membership interests collectively and other members

 

Page 36

 

 

 

on the basis of the value of contributions to capital made
and accepted by the cooperative by the patron membership
interests collectively and other membership interests. The
distributions to patron membership interests collectively
shall not be less than fifteen percent (15%) of the total
distributions in any fiscal year.

 

17-10-234.  Allocations and distributions to patron
members.

 

(a)  A cooperative may set aside a portion of net
income allocated to the patron membership interests as the
board determines advisable to create or maintain a capital
reserve.

 

(b)  In addition to a capital reserve, the board may,
for patron membership interests:

 

(i)  Set aside an amount not to exceed five
percent (5%) of the annual net income of the cooperative
for promoting and encouraging cooperative organization; and

 

(ii)  Establish and accumulate reserves for new
buildings, machinery and equipment, depreciation, losses,
and other proper purposes.

 

(c)  Net income allocated to patron members in excess
of dividends on equity and additions to reserves shall be
distributed to patron members on the basis of patronage. A
cooperative may establish allocation units, whether the
units are functional, divisional, departmental, geographic,
or otherwise and pooling arrangements and may account for
and distribute net income to patrons on the basis of
allocation units and pooling arrangements. A cooperative
may offset the net loss of an allocation unit or pooling

 

Page 37

 

 

 

arrangement against the net income of other allocation
units or pooling arrangements.

 

(d)  Distribution of net income shall be made at least
annually. The board shall present to the members at their
annual meeting a report covering the operations of the
cooperative during the preceding fiscal year.

 

(e)  A cooperative may distribute net income to patron
members in cash, capital credits, allocated patronage
equities, revolving fund certificates, or its own or other
securities.

 

(f)  The cooperative may provide in the bylaws that
nonmember patrons are allowed to participate in the
distribution of net income payable to patron members on
equal terms with patron members.

 

(g)  If a nonmember patron with patronage credits is
not qualified or eligible for membership, a refund due may
be credited to the patron's individual account. The board
may issue a certificate of interest to reflect the credited
amount. After the patron is issued a certificate of
interest, the patron may participate in the distribution of
income on the same basis as a patron member.

 

17-10-235.  Distribution of unclaimed property.

 

(a)  A cooperative may, in lieu of paying or
delivering to the state the unclaimed property specified in
its report of unclaimed property, distribute the unclaimed
property to a corporation or organization that is exempt
from taxation. A cooperative making the election to
distribute unclaimed property shall file with the secretary
of state:

 

Page 38

 

 

 

(i)  A verified written explanation of the proof
of claim of an owner establishing a right to receive the
abandoned property;

 

(ii)  Any error in the presumption of
abandonment;

 

(iii)  The name, address, and exemption number of
the corporation or organization to which the property was
or is to be distributed; and

 

(iv)  The approximate date of distribution.

 

(b)  This subsection does not alter the procedure
provided by law for cooperatives to report unclaimed
property to the state and the requirement that claims of
owners are made to the cooperatives for a period following
the publication of lists of abandoned property.

 

(c)  The right of an owner to unclaimed property held
by a cooperative is extinguished when the property is
disbursed by the cooperative to a tax exempt organization
in accordance with this section.

 

17-10-236.  Merger and consolidation.

 

(a)  Unless otherwise prohibited, cooperatives
organized under the laws of this state may merge or
consolidate with each other or other business entities
organized under the laws of this state or another state by
complying with the provisions of this section or the law of
the state where the surviving or new business entity will
exist.

 

Page 39

 

 

 

(b)  To initiate a merger or consolidation of a
cooperative, a written plan of merger or consolidation
shall be prepared by the board or by a committee selected
by the board to prepare a plan. The plan shall state:

 

(i)  The names of the constituent cooperatives
and other business entities;

 

(ii)  The name of the surviving or new
cooperative or other business entity;

 

(iii)  The manner and basis of converting
membership or ownership interests of the constituent
cooperatives or business entities into membership or
ownership interests in the surviving or new cooperative or
business entity;

 

(iv)  The terms of the merger or consolidation;

 

(v)  The proposed effect of the consolidation or
merger on the members and patron members of the
cooperative; and

 

(vi)  For a consolidation, the plan shall contain
the articles of the entity or organizational documents to
be filed with the state in which the entity is organized.

 

(c)  The following shall apply to notice:

 

(i)  The board shall mail a merger or
consolidation or otherwise transmit or deliver notice to
each member. The notice shall contain:

 

(A)  The full text of the plan; and

 

Page 40

 

 

 

(B)  The time and place of the meeting at
which the plan will be considered.

 

(ii)  A cooperative with more than two hundred
(200) members may provide the merger or consolidation
notice in the same manner as a regular members' meeting
notice.

 

(d)  The following shall apply to the adoption of a
plan or merger or consolidation:

 

(i)  A plan of merger or consolidation is adopted
if:

 

(A)  A quorum of the members is registered
as being present or represented by mail vote at the
meeting; and

 

(B)  The plan is approved by two-thirds
(2/3) of the votes cast, or for a cooperative with articles
or bylaws requiring more than two-thirds (2/3) of the votes
cast or other conditions for approval, the plan is approved
by a proportion of the votes cast or a number of total
members as required by the articles or bylaws and the
conditions for approval in the articles or bylaws have been
satisfied.

 

(ii)  After the plan has been adopted, articles
of merger or consolidation stating the plan and that the
plan was adopted according to this article shall be signed
by the chair, vice-chair, records officer or documents
officer of each cooperative merging or consolidating;

 

(iii)  The articles of merger or consolidation
shall be filed in the office of the secretary of state;

 

Page 41

 

 

 

(iv)  For a merger, the articles of the surviving
cooperative subject to this article are deemed amended to
the extent provided in the articles of merger;

 

(v)  Unless a later date is provided in the plan,
the merger or consolidation is effective when the articles
of merger or consolidation are filed in the office of the
secretary of state;

 

(vi)  The secretary of state shall issue a
certificate of organization of the merged or consolidated
cooperative.

 

(e)  The following shall apply to the effect of a
merger:

 

(i)  After the effective date, the cooperatives
or other business entities that are parties to the plan
become a single entity. For a merger, the surviving
business entity is the business entity designated in the
plan. For a consolidation, the new cooperative or other
business entity is the business entity provided for in the
plan. Except for the surviving or new business entity, the
separate existence of all business entities that are
parties to the plan cease on the effective date of the
merger or consolidation;

 

(ii)  The surviving or new business entity
possesses all of the rights and property of each of the
merged or consolidated business entities and is responsible
for all their obligations. The title to property of the
merged or consolidated business entity is vested in the
surviving or new business entity without reversion or

 

Page 42

 

 

 

impairment of the title caused by the merger or
consolidation;

 

(iii)  The right of a creditor may not be
impaired by the merger or consolidation without the
creditor's consent.

 

(f)  The fee to be paid to the secretary of state for
filing articles of merger or consolidation shall conform
with the provisions of W.S. 17-16-122.

 

17-10-237.  Liquidation.

 

(a)  A cooperative shall be liquidated as provided in
the articles in a manner consistent with other business
entities organized in this state or if not provided, may be
liquidated in the same manner as a limited liability
company organized in this state or the members may
authorize a liquidation by adopting a resolution at a
members' meeting. The notice of the members' meeting shall
include a statement that the disposition of all of the
assets of the cooperative will be considered at the
meeting. If a quorum is present in person, by mail ballot,
or alternative method approved by the board at the members'
meeting, the resolution approving of the liquidation is
adopted if:

 

(i)  Approved by two-thirds (2/3) of the votes
cast; or

 

(ii)  For a cooperative with articles or bylaws
requiring more than two-thirds (2/3) for approval or other
conditions for approval, the resolution is approved by the
proportion of the votes cast or a number of total members

 

Page 43

 

 

 

as required by the articles or bylaws and the conditions
for approval in the articles or bylaws have been satisfied.

 

(b)  The board of directors by resolution may
liquidate a cooperative if the board obtains an opinion of
an accountant that the cooperative is unlikely to continue
as a business based on its current finances.

 

17-10-238.  Methods of dissolution.

 

A cooperative may be dissolved by the members or by order
of the court.

 

17-10-239.  Winding up.

 

(a)  After the notice of intent to dissolve has been
filed with the secretary of state, the board, or the
officers acting under the direction of the board, shall
proceed as soon as possible:

 

(i)  To collect or make provision for the
collection of all debts due or owing to the cooperative,
including unpaid subscriptions for shares; and

 

(ii)  To pay or make provision for the payment of
all debts, obligations and liabilities of the cooperative
according to their priorities.

 

(b)  After the notice of intent to dissolve has been
filed with the secretary of state, the board may sell,
lease, transfer or otherwise dispose of all or
substantially all of the property and assets of the
dissolving cooperative without a vote of the members.

 

Page 44

 

 

 

(c)  Tangible and intangible property, including
money, remaining after the discharge of the debts,
obligations and liabilities of the cooperative may be
distributed to the members and former members as provided
in the bylaws. If previously authorized by the members, the
tangible and intangible property of the cooperative may be
liquidated and disposed of at the discretion of the board.

 

17-10-240.  Revocation of dissolution proceedings.

 

(a)  Dissolution proceedings may be revoked before the
articles of dissolution are filed with the secretary of
state.

 

(b)  The chair may call a members' meeting to consider
the advisability of revoking the dissolution proceedings.
The question of the proposed revocation shall be submitted
to the members at the members' meeting called to consider
the revocation. The dissolution proceedings are revoked if
the proposed revocation is approved at the members' meeting
by a majority of the members of the cooperative or for a
cooperative with articles or bylaws requiring a greater
number of members, the number of members required by the
articles or bylaws.

 

(c)  Revocation of dissolution proceedings is
effective when a notice of revocation is filed with the
secretary of state. After the notice is filed, the
cooperative may resume business.

 

17-10-241.  Statute of limitations.

 

The claim of a creditor or claimant against a dissolving
cooperative is barred if the claim has not been enforced by
initiating legal, administrative or arbitration proceedings

 

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concerning the claim by two (2) years after the date the
notice of intent to dissolve is filed with the secretary of
state.

 

17-10-242.  Articles of dissolution.

 

(a)  Articles of dissolution of a cooperative shall be
filed with the secretary of state after payment of the
claims of all known creditors and claimants has been made
or provided for and the remaining property has been
distributed by the board. The articles of dissolution shall
state:

 

(i)  That all debts, obligations, and liabilities
of the cooperative have been paid or discharged or adequate
provisions have been made for them or time periods allowing
claims have run and other claims are not outstanding;

 

(ii)  That the remaining property, assets, and
claims of the cooperative have been distributed among the
members or pursuant to a liquidation authorized by the
members; and

 

(iii)  That legal, administrative, or arbitration
proceedings by or against the cooperative are not pending
or adequate provision has been made for the satisfaction of
a judgment, order or decree that may be entered against the
cooperative in a pending proceeding.

 

(b)  The cooperative is dissolved when the articles of
dissolution have been filed with the secretary of state.

 

(c)  The secretary of state shall issue to the
dissolved cooperative or its legal representative a
certificate of dissolution that contains:

 

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(i)  The name of the dissolved cooperative;

 

(ii)  The date the articles of dissolution were
filed with the secretary of state; and

 

(iii)  A statement that the cooperative is
dissolved.

 

17-10-243.  Application for court-supervised voluntary
dissolution.

 

After a notice of intent to dissolve has been filed with
the secretary of state and before a certificate of
dissolution has been issued, the cooperative or, for good
cause shown, a member or creditor may apply to a court
within the county where the registered address is located
to have the dissolution conducted or continued under the
supervision of the court as provided in W.S. 17-10-250.

 

17-10-244.  Court-ordered remedies or dissolution.

 

(a)  A court may grant equitable relief that it deems
just and reasonable in the circumstances or may dissolve a
cooperative and liquidate its assets and business:

 

(i)  In a supervised voluntary dissolution that
is applied for by the cooperative;

 

(ii)  In an action by a member when it is
established that:

 

(A)  The directors or the persons having the
authority otherwise vested in the board are deadlocked in

 

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the management of the cooperative's affairs and the members
are unable to break the deadlock;

 

(B)  The directors or those in control of
the cooperative have acted fraudulently, illegally or in a
manner unfairly prejudicial toward one (1) or more members
in their capacities as members, directors or officers;

 

(C)  The members of the cooperative are so
divided in voting power that, for a period that includes
the time when two (2) consecutive regular members' meetings
were held, they have failed to elect successors to
directors whose terms have expired or would have expired
upon the election and qualification of their successors;

 

(D)  The cooperative assets are being
misapplied or wasted; or

 

(E)  The period of duration as provided in
the articles has expired and has not been extended as
provided in this article.

 

(iii)  In an action by a creditor when:

 

(A)  The claim of the creditor against the
cooperative has been reduced to judgment and an execution
on the judgment has been returned unsatisfied; or

 

(B)  The cooperative has admitted in writing
that the claim of the creditor against the cooperative is
due and owing and it is established that the cooperative is
unable to pay its debts in the ordinary course of business;
or

 

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(iv)  In an action by the attorney general to
dissolve the cooperative in accordance with this article
when it is established that a decree of dissolution is
appropriate.

 

(b)  In determining whether to order equitable relief
or dissolution, the court shall take into consideration the
financial condition of the cooperative but may not refuse
to order equitable relief or dissolution solely on the
ground that the cooperative has accumulated operating net
income or current operating net income.

 

(c)  In deciding whether to order dissolution of the
cooperative, the court shall consider whether lesser relief
suggested by one (1) or more parties, such as a form of
equitable relief or a partial liquidation, would be
adequate to permanently relieve the circumstances
established under subparagraph (a)(ii)(B) or (C) of this
section. Lesser relief may be ordered if it would be
appropriate under the facts and circumstances of the case.

 

(d)  If the court finds that a party to a proceeding
brought under this section has acted arbitrarily,
vexatiously, or otherwise not in good faith, the court may
in its discretion award reasonable expenses, including
attorneys' fees and disbursements, to any of the other
parties.

 

(e)  Proceedings under this section shall be brought
in a court within the county where the registered address
of the cooperative is located.

 

(f)  It is not necessary to make members parties to
the action or proceeding unless relief is sought against
them personally.

 

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17-10-245.  Procedure in involuntary or
court-supervised voluntary dissolution.

 

(a)  In dissolution proceedings before a hearing can
be completed the court may:

 

(i)  Issue injunctions;

 

(ii)  Appoint receivers with all powers and
duties that the court directs;

 

(iii)  Take actions required to preserve the
cooperative's assets wherever located; and

 

(iv)  Carry on the business of the cooperative.

 

(b)  After a hearing is completed, on notice the court
directs to be given to parties to the proceedings and to
other parties in interest designated by the court, the
court may appoint a receiver to collect the cooperative's
assets, including amounts owing to the cooperative by
subscribers on account of an unpaid portion of the
consideration for the issuance of shares. A receiver has
authority, subject to the order of the court, to continue
the business of the cooperative and to sell, lease,
transfer, or otherwise dispose of the property and assets
of the cooperative either at public or private sale.

 

(c)  The assets of the cooperative or the proceeds
resulting from a sale, lease, transfer, or other
disposition shall be applied in the following order of
priority:

 

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(i)  The costs and expenses of the proceedings,
including attorneys' fees and disbursements;

 

(ii)  Debts, taxes and assessments due the United
States, this state and other states in that order;

 

(iii)  Claims duly proved and allowed to
employees under the provisions of the workers' compensation
act except that claims under this clause may not be allowed
if the cooperative has carried workers' compensation
insurance, as provided by law, at the time the injury was
sustained;

 

(iv)  Claims, including the value of all
compensation paid in a medium other than money, proved and
allowed to employees for services performed within three
(3) months preceding the appointment of the receiver, if
any; and

 

(v)  Other claims proved and allowed.

 

(d)  After payment of the expenses of receivership and
claims of creditors are proved, the remaining assets, if
any, may be distributed to the members or distributed
pursuant to an approved liquidation plan.

 

17-10-246.  Receiver qualifications and powers.

 

(a)  A receiver shall be a natural person or a
domestic corporation or a foreign corporation authorized to
transact business in this state. A receiver shall give a
bond as directed by the court with the sureties required by
the court.

 

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(b)  A receiver may sue and defend in all courts as
receiver of the cooperative. The court appointing the
receiver has exclusive jurisdiction of the cooperative and
its property.

 

17-10-247.  Dissolution action by attorney general;
administrative dissolution.

 

(a)  A cooperative may be dissolved involuntarily by a
decree of a court in this state in an action filed by the
attorney general if it is established that:

 

(i)  The articles and certificate of organization
were procured through fraud;

 

(ii)  The cooperative was organized for a purpose
not permitted by this article or prohibited by state law;

 

(iii)  The cooperative has flagrantly violated a
provision of this article, has violated a provision of this
article more than once or has violated more than one (1)
provision of this article; or

 

(iv)  The cooperative has acted, or failed to
act, in a manner that constitutes surrender or abandonment
of the cooperative's franchise, privileges, or enterprise.

 

(b)  An action may not be commenced under subsection
(a) of this section until thirty (30) days after notice to
the cooperative by the attorney general of the reason for
the filing of the action. If the reason for filing the
action is an act that the cooperative has done, or omitted
to do, and the act or omission may be corrected by an
amendment of the articles or bylaws or by performance of or
abstention from the act, the attorney general shall give

 

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the cooperative thirty (30) additional days to make the
correction before filing the action.

 

(c)  The provisions of W.S. 17-16-1420 through
17-16-1423 shall apply to the administrative dissolution of
any domestic cooperative and the provisions of W.S.
17-16-1530 through 17-16-1532 shall apply to the
administrative dissolution of any foreign cooperative.

 

17-10-248.  Filing claims in court-supervised
dissolution proceedings.

 

(a)  In proceedings to dissolve a cooperative, the
court may require all creditors and claimants of the
cooperative to file their claims under oath with the court
administrator or with the receiver in a form prescribed by
the court.

 

(b)  If the court requires the filing of claims, the
court shall:

 

(i)  Set a date, by order, at least one hundred
twenty (120) days after the date the order is filed, as the
last day for the filing of claims; and

 

(ii)  Prescribe the notice of the fixed date that
shall be given to creditors and claimants.

 

(c)  Before the fixed date, the court may extend the
time for filing claims. Creditors and claimants failing to
file claims on or before the fixed date may be barred, by
order of court, from claiming an interest in or receiving
payment out of the property or assets of the cooperative.

 

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17-10-249.  Discontinuance of court-supervised
dissolution proceedings.

 

The involuntary or supervised voluntary dissolution of a
cooperative may be discontinued at any time during the
dissolution proceedings if it is established that cause for
dissolution does not exist. The court shall dismiss the
proceedings and direct the receiver, if any, to redeliver
to the cooperative its remaining property and assets.

 

17-10-250.  Court-supervised dissolution order.

 

(a)  In an involuntary or supervised voluntary
dissolution after the costs and expenses of the proceedings
and all debts, obligations and liabilities of the
cooperative have been paid or discharged and the remaining
property and assets have been distributed to its members
or, if its property and assets are not sufficient to
satisfy and discharge the costs, expenses, debts,
obligations and liabilities, when all the property and
assets have been applied so far as they will go to their
payment according to their priorities, the court shall
enter an order dissolving the cooperative.

 

(b)  When the order dissolving the cooperative or
association has been entered, the cooperative or
association is dissolved.

 

17-10-251.  Filing court's dissolution order.

 

After the court enters an order dissolving a cooperative,
the court administrator shall cause a certified copy of the
dissolution order to be filed with the secretary of state.
The secretary of state may not charge a fee for filing the
dissolution order.

 

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17-10-252.  Barring of claims.

 

(a)  A person who is or becomes a creditor or claimant
before, during, or following the conclusion of dissolution
proceedings, who does not file a claim or pursue a remedy
in a legal, administrative or arbitration proceeding during
the pendency of the dissolution proceeding or has not
initiated a legal, administrative, or arbitration
proceeding before the commencement of the dissolution
proceedings and all those claiming through or under the
creditor or claimant, are forever barred from suing on that
claim or otherwise realizing upon or enforcing it, except
as provided in this section.

 

(b)  Within one (1) year after articles of dissolution
have been filed with the secretary of state pursuant to
this article or a dissolution order has been entered, a
creditor or claimant who shows good cause for not having
previously filed the claim may apply to a court in this
state to allow a claim:

 

(i)  Against the cooperative to the extent of
undistributed assets; or

 

(ii)  If the undistributed assets are not
sufficient to satisfy the claim, the claim may be allowed
against a member to the extent of the distributions to
members in dissolution received by the member.

 

(c)  Debts, obligations, and liabilities incurred
during dissolution proceedings shall be paid or provided
for by the cooperative before the distribution of assets to
a member. A person to whom this kind of debt, obligation,
or liability is owed but is not paid may pursue any remedy

 

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against the officers, directors or members of the
cooperative before the expiration of the applicable statute
of limitations. This subsection does not apply to
dissolution under the supervision or order of a court.

 

17-10-253.  Right to sue or defend after dissolution.

 

After a cooperative has been dissolved, any of its former
officers, directors or members may assert or defend, in the
name of the cooperative, a claim by or against the
cooperative.

 

Section 3.  W.S. 17-10-102(c), 17-10-105(a)(i), (ii)
and (iv), 17-10-106, 17-10-109(a)(intro) and 17-10-115(a)
are amended to read:

 

17-10-102.  Definitions; associations deemed
nonprofit; short title.

 

(c)  The term "association" or "cooperative" means any
corporation organized under this act.

 

17-10-105.  Certificate of incorporation; execution
and contents.

 

(a)  The incorporators shall sign and acknowledge, in
the manner required for the signing and acknowledgment of
deeds, a certificate of incorporation showing the following
facts:

 

(i)  The corporate name of the cooperative;

 

(ii)  The purpose of the corporation cooperative;

 

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(iv)  The term of the corporate existence not to
exceed fifty (50) years period of duration for the
cooperative, if the duration is not to be perpetual;

 

 

17-10-106.  Certificate of incorporation; filing;
fees; commencement of corporate existence.

 

The certificate of incorporation shall be filed in the
office of the secretary of state., and a certified copy
thereof or a duplicate certificate shall be filed and
recorded in the office of the county clerk of each county
in which it is proposed to carry on business. The fees for
filing or recording such certificate shall be the same as
in the case of corporations formed under the general
corporation laws. The corporation shall come into existence
upon the filing of its certificate in the office of the
secretary of state.

 

17-10-109.  Powers.

 

(a)  Each corporation cooperative formed under the
provisions of this chapter article shall have power:

 

17-10-115.  Apportionment of net profits by directors
of corporation with capital stock.

 

(a)  The directors in any cooperative association
organized with capital stock shall annually apportion the
net profits, if any, by first setting aside ten percent
(10%) thereof for a reserve fund until such a fund equals
thirty percent (30%) of the paid-up capital stock; and
thereafter the directors under this article may set aside
such an amount for a portion of net income to create or
maintain a capital reserve fund as they see fit or may set

 

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aside none, in their discretion. The directors may then set
aside out of the net profits such sums as they deem
desirable for capital expenditure, subject to the approval
of the stockholders, as provided in subsection (b) of this
section. The directors shall then declare a dividend upon
the paid-up capital stock at a rate per annum not to exceed
six percent (6%); provided that no such dividend on common
stock shall be cumulative. The directors may then set aside
not to exceed five percent (5%) of the remaining net
profits as an educational fund to be used in teaching
cooperation. The directors may then grant a bonus to
employees who are in the employ of the association at the
time of the apportionment of profits, which bonus shall be
based in amount upon the amount of compensation received by
said employees during the year at a rate not to exceed the
rate of patronage dividends hereinafter described. The
directors shall distribute all remaining net profits by
uniform dividend to members of the association, based in
amount upon the volume of business conducted by such member
with the association; provided, that the association may
distribute to patrons of the association who are not
members bonuses based in amount upon the volume of business
transacted by such nonmembers respectively with the
association at a rate not to exceed the rate of patronage
dividends herein referred to; provided further that any
such bonus to a nonstockholder shall be declared in the
form of capital stock, until the amount of such dividends
equals the par value of one (1) share of the association's
stock dividends thereafter to such patron being paid in the
same manner as dividends to all stockholders, provided
further, that such a bonus to a nonstockholder, if it is
less than the par value of one (1) share, shall be credited
to the nonstockholder's capital stock account during the
first year and the second year, but shall revert to the
reserve fund, if, after two (2) years, an amount less than

 

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the par value of one (1) share has accumulated. In addition
to a capital reserve, the board may:

 

(i)  Set aside an amount not to exceed five
percent (5%) of the annual net income of the cooperative
association for:

 

(A)  Promoting and encouraging cooperative
organization;

 

(B)  Promotion, education or research
activities which are beneficial to the cooperative, its
members and products; and

 

(C)  Any other endeavor or effort which the
board deems is in the best interests of the cooperative or
its members.

 

(ii)  Establish and accumulate reserves for new
buildings, machinery and equipment depreciation, losses and
other purposes.

 

Section 4.  W.S. 17-10-115(b) and 17-10-116 are
repealed.

 

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Section 5.  This act is effective July 1, 2001.

 

(END)

 

 

 

 

                                     

Speaker of the House                  President of the Senate

 

                                              

                 Governor                     

                                              

                 TIME APPROVED: _________     

                 DATE APPROVED: _________     

 

I hereby certify that this act originated in the House.

 

 

Chief Clerk

 

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