1.1                          A bill for an act 
  1.2             relating to cooperatives; authorizing businesses to 
  1.3             organize as cooperative associations; providing 
  1.4             penalties; amending Minnesota Statutes 2002, sections 
  1.5             80A.14, subdivision 17; 80A.15, subdivision 2; 
  1.6             proposing coding for new law as Minnesota Statutes, 
  1.7             chapter 308B. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9                              ARTICLE 1
  1.10               MINNESOTA COOPERATIVE ASSOCIATIONS ACT
  1.11     Section 1.  [308B.001] [CITATION.] 
  1.12     This chapter may be cited as the "Minnesota Cooperative 
  1.13  Associations Act." 
  1.14     Sec. 2.  [308B.005] [DEFINITIONS.] 
  1.15     Subdivision 1.  [SCOPE.] The definitions in this section 
  1.16  apply to this chapter. 
  1.17     Subd. 2.  [ADDRESS.] "Address" means mailing address, 
  1.18  including a zip code.  In the case of a registered address, the 
  1.19  term means the mailing address and the actual office location, 
  1.20  which may not be a post office box. 
  1.21     Subd. 3.  [ALTERNATIVE BALLOT.] "Alternative ballot" means 
  1.22  a method of voting on a candidate or issue prescribed by the 
  1.23  board of directors in advance of the vote, and may include 
  1.24  voting by electronic, telephonic, Internet, or other means that 
  1.25  reasonably allow members the opportunity to vote. 
  1.26     Subd. 4.  [ARTICLES.] "Articles" means the articles of 
  2.1   organization of a cooperative as originally filed and 
  2.2   subsequently amended. 
  2.3      Subd. 5.  [ASSOCIATION.] "Association" means an 
  2.4   organization conducting business on a cooperative plan under the 
  2.5   laws of this state or another state that is chartered to conduct 
  2.6   business under other laws of this state or another state. 
  2.7      Subd. 6.  [BOARD.] "Board" means the board of directors of 
  2.8   a cooperative. 
  2.9      Subd. 7.  [BUSINESS ENTITY.] "Business entity" means a 
  2.10  company, limited liability company, limited liability 
  2.11  partnership, or other legal entity, whether domestic or foreign, 
  2.12  association, or body vested with the power or function of a 
  2.13  legal entity. 
  2.14     Subd. 8.  [CHAPTER.] "Chapter" means sections 308B.001 to 
  2.15  308B.975. 
  2.16     Subd. 9.  [COOPERATIVE.] "Cooperative" means an association 
  2.17  organized under this chapter conducting business on a 
  2.18  cooperative plan as provided under this chapter. 
  2.19     Subd. 10.  [DOMESTIC BUSINESS ENTITY.] "Domestic business 
  2.20  entity" means a business entity organized under the laws of this 
  2.21  state. 
  2.22     Subd. 11.  [DOMESTIC COOPERATIVE.] "Domestic cooperative" 
  2.23  means a cooperative organized under this chapter or chapter 308A.
  2.24     Subd. 12.  [FILED WITH THE SECRETARY OF STATE.] "Filed with 
  2.25  the secretary of state" means that a document meeting the 
  2.26  applicable requirements of this chapter, signed and accompanied 
  2.27  by the required filing fee, has been delivered to the secretary 
  2.28  of state.  The secretary of state shall endorse on the document 
  2.29  the word "filed" or a similar word determined by the secretary 
  2.30  of state and the month, day, and year of filing, record the 
  2.31  document in the office of the secretary of state, and return a 
  2.32  document to the person or entity who delivered it for filing. 
  2.33     Subd. 13.  [FOREIGN BUSINESS ENTITY.] "Foreign business 
  2.34  entity" means a business entity that is not a domestic business 
  2.35  entity. 
  2.36     Subd. 14.  [FOREIGN COOPERATIVE.] "Foreign cooperative" 
  3.1   means a foreign business entity organized to conduct business on 
  3.2   a cooperative plan consistent with this chapter or chapter 308A. 
  3.3      Subd. 15.  [MEMBER.] "Member" means a person or entity 
  3.4   reflected on the books of the cooperative as the owner of 
  3.5   governance rights of a membership interest of the cooperative 
  3.6   and includes patron and nonpatron members. 
  3.7      Subd. 16.  [MEMBERSHIP INTEREST.] "Membership interest" 
  3.8   means a member's interest in a cooperative consisting of a 
  3.9   member's financial rights, a member's right to assign financial 
  3.10  rights, a member's governance rights, and a member's right to 
  3.11  assign governance rights.  Membership interest includes patron 
  3.12  membership interests and nonpatron membership interests. 
  3.13     Subd. 17.  [MEMBERS' MEETING.] "Members' meeting" means a 
  3.14  regular or special members' meeting. 
  3.15     Subd. 18.  [NONPATRON MEMBERSHIP INTEREST.] "Nonpatron 
  3.16  membership interest" means a membership interest that does not 
  3.17  require the holder to conduct patronage business for or with the 
  3.18  cooperative to receive financial rights or distributions. 
  3.19     Subd. 19.  [PATRON.] "Patron" means a person or entity who 
  3.20  conducts patronage business with the cooperative. 
  3.21     Subd. 20.  [PATRONAGE.] "Patronage" means business, 
  3.22  transactions, or services done for or with the cooperative as 
  3.23  defined by the cooperative. 
  3.24     Subd. 21.  [PATRON MEMBER.] "Patron member" means a member 
  3.25  holding a patron membership interest. 
  3.26     Subd. 22.  [PATRON MEMBERSHIP INTEREST.] "Patron membership 
  3.27  interest" means the membership interest requiring the holder to 
  3.28  conduct patronage business for or with the cooperative, as 
  3.29  specified by the cooperative to receive financial rights or 
  3.30  distributions. 
  3.31     Subd. 23.  [SIGNED.] "Signed" means that the signature of a 
  3.32  person has been written on a document, and with respect to a 
  3.33  document required by this chapter to be filed with the secretary 
  3.34  of state, means that the document has been signed by a person 
  3.35  authorized to do so by this chapter, the articles or bylaws, or 
  3.36  by a resolution approved by the directors or the members.  A 
  4.1   signature on a document may be a facsimile affixed, engraved, 
  4.2   printed, placed, stamped with indelible ink, transmitted by 
  4.3   facsimile or electronically, or in any other manner reproduced 
  4.4   on the document. 
  4.5                          GENERAL PROVISIONS
  4.6      Sec. 3.  [308B.101] [RESERVATION OF RIGHT.] 
  4.7      The state reserves the right to amend or repeal the 
  4.8   provisions of this chapter by law.  A cooperative organized or 
  4.9   governed by this chapter is subject to this reserved right. 
  4.10     Sec. 4.  [308B.111] [FILING FEES.] 
  4.11     Unless otherwise provided, the filing fee for documents 
  4.12  filed under this chapter with the secretary of state is $35. 
  4.13     Sec. 5.  [308B.115] [REGISTERED OFFICE AND AGENT.] 
  4.14     Subdivision 1.  [REGISTERED OFFICE AND AGENT.] A 
  4.15  cooperative must establish and continuously maintain in this 
  4.16  state: 
  4.17     (1) a registered office that may be, but need not be, the 
  4.18  same as its place of business; and 
  4.19     (2) a registered agent, which agent may be either an 
  4.20  individual resident in this state whose business office is 
  4.21  identical with the registered office, or a domestic business 
  4.22  entity, or a foreign business entity authorized to transact 
  4.23  business in this state, having an office identical with the 
  4.24  registered office. 
  4.25     Subd. 2.  [CHANGE OF OFFICE AND AGENT.] A cooperative may 
  4.26  designate or change its registered office or agent, or both, 
  4.27  upon filing in the office of the secretary of state a statement 
  4.28  setting forth: 
  4.29     (1) the name of the cooperative; 
  4.30     (2) the address of its then registered office; 
  4.31     (3) if the address of its registered office is to be 
  4.32  changed, the address to which the registered office is to be 
  4.33  changed; 
  4.34     (4) the name of its then registered agent; 
  4.35     (5) if its registered agent is to be changed, the name of 
  4.36  its successor registered agent; 
  5.1      (6) that the address of its registered office and the 
  5.2   address of the business office of its registered agent, as 
  5.3   changed, will be identical; and 
  5.4      (7) that the change was authorized by affirmative vote of a 
  5.5   majority of the board of the cooperative. 
  5.6      Subd. 3.  [FILING.] The statement shall be signed and 
  5.7   delivered to the secretary of state.  If the secretary of state 
  5.8   finds that the statement conforms to the provisions of this 
  5.9   section, the secretary of state shall file the statement, and 
  5.10  upon filing the change of address of the registered office or 
  5.11  the appointment of a new registered agent or both, as the case 
  5.12  may be, is effective. 
  5.13     Subd. 4.  [RESIGNATION OF AGENT.] Any registered agent of a 
  5.14  cooperative may resign as agent upon filing a written notice 
  5.15  resignation, signed with one original and one exact or conformed 
  5.16  copy, with the secretary of state, who shall mail a copy to the 
  5.17  cooperative at its principal mailing address as defined and 
  5.18  prescribed by the secretary of state.  The appointment of the 
  5.19  agent shall terminate upon the expiration of 30 days after 
  5.20  receipt of notice by the secretary of state. 
  5.21     Subd. 5.  [CHANGE OF ADDRESS OR NAME OF AGENT.] If the 
  5.22  address or name of a registered agent changes, the agent must 
  5.23  change the address of the registered office or the name of the 
  5.24  registered agent of the cooperative represented by the agent by 
  5.25  filing with the secretary of state the statement required in 
  5.26  subdivision 2, except that the statement need only be signed by 
  5.27  the registered agent, need not be responsive to subdivision 2, 
  5.28  clause (5), but must state that a copy of the statement has been 
  5.29  mailed to the cooperative or to the legal representative of the 
  5.30  cooperative. 
  5.31     Sec. 6.  [308B.121] [PERIODIC REGISTRATION.] 
  5.32     Subdivision 1.  [PERIODIC REGISTRATION IN CERTAIN 
  5.33  YEARS.] Each cooperative governed by this chapter and each 
  5.34  foreign cooperative registered under section 308B.151, must file 
  5.35  a periodic registration with the secretary of state with the 
  5.36  initial articles and any amendment of the articles in each 
  6.1   odd-numbered year.  In these years, the secretary of state must 
  6.2   mail by first class mail a registration form to the registered 
  6.3   office of each cooperative and registered foreign cooperative as 
  6.4   shown in the records of the secretary of state, or if no such 
  6.5   address is in the records, to the location of the principal 
  6.6   place of business shown in the records of the secretary of 
  6.7   state.  For a cooperative, the form must include the following 
  6.8   notice: 
  6.9      "NOTICE:  Failure to file this form by December 31 of this 
  6.10  year will result in the dissolution of this cooperative without 
  6.11  further notice from the secretary of state, under Minnesota 
  6.12  Statutes, section 308B.121, subdivision 4, paragraph (b)." 
  6.13     For a foreign cooperative, the form must contain the 
  6.14  following notice: 
  6.15     "NOTICE:  Failure to file this form by December 31 of this 
  6.16  year will result in the loss of good standing and the authority 
  6.17  to do business in Minnesota." 
  6.18     Subd. 2.  [REGISTRATION FORM.] In each calendar year in 
  6.19  which a registration is to be filed, a cooperative must file 
  6.20  with the secretary of state a registration by December 31 of 
  6.21  that calendar year containing: 
  6.22     (1) the name of the cooperative; 
  6.23     (2) the address of its registered office; 
  6.24     (3) the address of its principal place of business, if 
  6.25  different from the registered office address; and 
  6.26     (4) the name and business address of the officer or other 
  6.27  person exercising the principal functions of the chief executive 
  6.28  officer of the cooperative. 
  6.29     Subd. 3.  [INFORMATION PUBLIC.] The information required by 
  6.30  subdivision 2 is public data. 
  6.31     Subd. 4.  [PENALTY; DISSOLUTION.] (a) A cooperative that 
  6.32  has failed to file a registration under the requirements of this 
  6.33  section must be dissolved by the secretary of state as described 
  6.34  in paragraph (b). 
  6.35     (b) If the cooperative has not filed the registration by 
  6.36  December 31 of that calendar year, the secretary of state must 
  7.1   issue a certificate of involuntary dissolution and the 
  7.2   certificate must be filed in the office of the secretary of 
  7.3   state.  The secretary of state must annually inform the attorney 
  7.4   general and the commissioner of revenue of the methods by which 
  7.5   the names of cooperatives dissolved under this section during 
  7.6   the preceding year may be determined.  The secretary of state 
  7.7   must also make available in an electronic format the names of 
  7.8   the dissolved cooperatives.  A cooperative dissolved in this 
  7.9   manner is not entitled to the benefits of section 308B.971. 
  7.10     Subd. 5.  [REINSTATEMENT.] A cooperative may, within one 
  7.11  year of the date of dissolution under this section, 
  7.12  retroactively reinstate its existence by filing a single annual 
  7.13  registration and paying a $25 fee.  Filing the annual 
  7.14  registration with the secretary of state: 
  7.15     (1) returns the cooperative to active status as of the date 
  7.16  of the dissolution; 
  7.17     (2) validates contracts or other acts within the authority 
  7.18  of the articles and the cooperative is liable for those 
  7.19  contracts or acts; and 
  7.20     (3) restores to the cooperative all assets and rights of 
  7.21  the cooperative and its shareholders or members to the extent 
  7.22  they were held by the cooperative and its shareholders or 
  7.23  members before the dissolution occurred, except to the extent 
  7.24  that assets or rights were affected by acts occurring after the 
  7.25  dissolution or sold or otherwise distributed after that time. 
  7.26     Sec. 7.  [308B.125] [LEGAL RECOGNITION OF ELECTRONIC 
  7.27  RECORDS AND SIGNATURES.] 
  7.28     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  7.29  subdivision apply to this section. 
  7.30     (b) "Electronic" means relating to technology having 
  7.31  electrical, digital, magnetic, wireless, optical, 
  7.32  electromagnetic, or similar capabilities. 
  7.33     (c) "Electronic record" means a record created, generated, 
  7.34  sent, communicated, received, or stored by electronic means. 
  7.35     (d) "Electronic signature" means an electronic sound, 
  7.36  symbol, or process attached to or logically associated with a 
  8.1   record and executed or adopted by a person with the intent to 
  8.2   sign the record. 
  8.3      (e) "Record" means information that is inscribed on a 
  8.4   tangible medium or that is stored in an electronic or other 
  8.5   medium and is retrievable in perceivable form. 
  8.6      Subd. 2.  [ELECTRONIC RECORDS AND SIGNATURES.] For purposes 
  8.7   of this chapter: 
  8.8      (1) a record or signature may not be denied legal effect or 
  8.9   enforceability solely because it is in electronic form; 
  8.10     (2) a contract may not be denied legal effect or 
  8.11  enforceability solely because an electronic record was used in 
  8.12  its formation; 
  8.13     (3) if a provision requires a record to be in writing, an 
  8.14  electronic record satisfies the requirement; and 
  8.15     (4) if a provision requires a signature, an electronic 
  8.16  signature satisfies the requirement. 
  8.17     Sec. 8.  [308B.151] [FOREIGN COOPERATIVES.] 
  8.18     Subdivision 1.  [AUTHORITY.] (a) Subject to the 
  8.19  constitution of this state, the laws of the jurisdiction under 
  8.20  which a foreign cooperative is organized govern its organization 
  8.21  and internal affairs and the liability of its members.  A 
  8.22  foreign cooperative may not be denied a certificate of authority 
  8.23  to transact business in this state by reason of any difference 
  8.24  between those laws and the laws of this state. 
  8.25     (b) A foreign cooperative holding a valid certificate of 
  8.26  authority in this state has no greater rights and privileges 
  8.27  than a domestic cooperative.  The certificate of authority does 
  8.28  not authorize the foreign cooperative to exercise any of its 
  8.29  powers or purposes that a domestic cooperative is forbidden by 
  8.30  law to exercise in this state. 
  8.31     (c) A foreign cooperative may apply for a certificate of 
  8.32  authority under any name that would be available to a 
  8.33  cooperative, whether or not the name is the name under which it 
  8.34  is authorized in its jurisdiction of organization. 
  8.35     Subd. 2.  [CERTIFICATE OF AUTHORITY.] (a) Before 
  8.36  transacting business in this state, a foreign cooperative shall 
  9.1   obtain a certificate of authority.  An applicant for the 
  9.2   certificate shall file with the secretary of state a certificate 
  9.3   of status from the filing office in the jurisdiction in which 
  9.4   the business entity is organized and an application executed by 
  9.5   an authorized person and setting forth: 
  9.6      (1) the name of the foreign cooperative and, if different, 
  9.7   the name under which it proposes to transact business in this 
  9.8   state; 
  9.9      (2) the jurisdiction of its organization; 
  9.10     (3) the name and business address of the proposed 
  9.11  registered agent in this state, which agent shall be an 
  9.12  individual resident of this state, a domestic business entity, 
  9.13  or a foreign cooperative having a place of business in, and 
  9.14  authorized to do business in, this state; 
  9.15     (4) the address of the office required to be maintained in 
  9.16  the jurisdiction of its organization by the laws of that 
  9.17  jurisdiction or, if not so required, of the principal place of 
  9.18  business of the foreign cooperative; and 
  9.19     (5) the date the foreign cooperative expires in the 
  9.20  jurisdiction of its organization. 
  9.21     (b) The application must be accompanied by payment of $185, 
  9.22  which includes a $150 initial license fee in addition to the $35 
  9.23  filing fee required by section 308B.111. 
  9.24     (c) If the secretary of state finds that an application for 
  9.25  a certificate of authority conforms to law and all fees have 
  9.26  been paid, the secretary of state shall: 
  9.27     (1) endorse on the application the word "Filed" and the 
  9.28  date of filing the application; 
  9.29     (2) file the original application; and 
  9.30     (3) return the original application to the person who filed 
  9.31  it with a certificate of authority issued by the secretary of 
  9.32  state. 
  9.33     (d) A certificate of authority issued under this section is 
  9.34  effective from the date the application is filed with the 
  9.35  secretary of state accompanied by the payment of the requisite 
  9.36  fees. 
 10.1      (e) If any statement in the application for a certificate 
 10.2   of authority by a foreign cooperative was false when made or any 
 10.3   arrangements or other facts described have changed, making the 
 10.4   application inaccurate in any respect, the foreign cooperative 
 10.5   shall promptly file with the secretary of state: 
 10.6      (1) in the case of a change in its name, a termination, or 
 10.7   a merger, a certificate to that effect authenticated by the 
 10.8   proper officer of the state or country under the laws of which 
 10.9   the foreign cooperative is organized; or 
 10.10     (2) in the case of a change in the name or address of the 
 10.11  registered agent required to be maintained by section 308B.121, 
 10.12  an amendment to the certificate of authority signed by an 
 10.13  authorized person. 
 10.14     The fee for filing the document is the same as for filing 
 10.15  an amendment. 
 10.16     Subd. 3.  [REGISTERED AGENT AND CERTAIN REPORTS.] A foreign 
 10.17  cooperative authorized to transact business in this state shall: 
 10.18     (1) appoint and continuously maintain a registered agent in 
 10.19  the same manner as provided in section 308B.121; or 
 10.20     (2) file a report upon any change in the name or business 
 10.21  address of its registered agent in the same manner as provided 
 10.22  in section 308B.121. 
 10.23     Subd. 4.  [BIENNIAL REGISTRATION.] (a) A foreign 
 10.24  cooperative must file a periodic registration with the secretary 
 10.25  of state in each odd-numbered year containing: 
 10.26     (1) the name of the foreign cooperative; 
 10.27     (2) the alternate name, if any, the foreign cooperative has 
 10.28  adopted for use in this state; 
 10.29     (3) the address of its registered office; 
 10.30     (4) the name of its registered agent, if any; 
 10.31     (5) the jurisdiction in which the foreign cooperative is 
 10.32  organized; and 
 10.33     (6) the name and business address of the manager or other 
 10.34  person exercising the principal functions of the chief manager 
 10.35  of the foreign cooperative. 
 10.36     (b) The secretary of state shall mail a registration form 
 11.1   to each foreign cooperative not less than 90 days before the 
 11.2   registration is due.  The registration form must be sent to the 
 11.3   last registered office address filed with the secretary of 
 11.4   state.  A foreign cooperative that needs to amend its name, 
 11.5   registered office address, or registered agent may make these 
 11.6   amendments on the biennial registration form.  If an amendment 
 11.7   is made on the biennial registration form, it must be signed by 
 11.8   an authorized person.  The fee listed in section 308B.121 
 11.9   applies to these amendments. 
 11.10     (c) A foreign cooperative that fails to file a registration 
 11.11  under the requirements of this subdivision loses its good 
 11.12  standing in this state.  The business entity may regain its good 
 11.13  standing in this state by filing a registration and paying a $50 
 11.14  fee. 
 11.15     (d) If a foreign cooperative has not filed a registration 
 11.16  during a reporting period, the secretary of state shall notify 
 11.17  the business entity that its authority to do business in this 
 11.18  state will be revoked if the biennial registration is not filed 
 11.19  by the due date of the next registration.  This notice must be 
 11.20  sent to the foreign cooperative at its registered office address 
 11.21  of record as part of the registration form.  If the foreign 
 11.22  cooperative does not file the biennial registration by the due 
 11.23  date, the secretary of state shall revoke the authority of the 
 11.24  foreign cooperative to do business in this state.  The secretary 
 11.25  of state shall issue a certificate of revocation, which shall be 
 11.26  sent to the foreign cooperative at its registered office 
 11.27  address.  A copy of the certificate must be filed with the 
 11.28  secretary of state. 
 11.29     (e) If a foreign cooperative has its authority to do 
 11.30  business in this state revoked, it may retroactively reinstate 
 11.31  its authority to do business by filing a single biennial 
 11.32  registration and paying a $50 fee but only within one year of 
 11.33  the date of termination or revocation. 
 11.34     (f) A foreign cooperative filing the biennial registration 
 11.35  restores the foreign cooperative's ability to do business in 
 11.36  this state and the rights and privileges that accompany that 
 12.1   authority. 
 12.2      Subd. 5.  [CERTIFICATE OF WITHDRAWAL.] (a) A foreign 
 12.3   cooperative authorized to transact business in this state may 
 12.4   withdraw from this state upon procuring from the secretary of 
 12.5   state a certificate of withdrawal.  In order to procure the 
 12.6   certificate, the foreign cooperative shall file with the 
 12.7   secretary of state an application for withdrawal which must set 
 12.8   forth: 
 12.9      (1) the name of the foreign cooperative and the state or 
 12.10  country under the laws of which it is organized; 
 12.11     (2) that the foreign cooperative is not transacting 
 12.12  business in this state; 
 12.13     (3) that the foreign cooperative surrenders its authority 
 12.14  to transact business in this state; 
 12.15     (4) that the foreign cooperative revokes the authority of 
 12.16  its registered agent in this state to accept service of process 
 12.17  and consents to that service of process in any action, suit, or 
 12.18  proceeding based upon any cause of action arising in this state 
 12.19  during the time the business entity was authorized to transact 
 12.20  business in this state.  Service may be made on the business 
 12.21  entity by service upon the secretary of state; and 
 12.22     (5) a post office address to which a person may mail a copy 
 12.23  of any process against the business entity. 
 12.24     (b) The filing with the secretary of state of a certificate 
 12.25  of termination or a certificate of merger if the foreign 
 12.26  cooperative is not the surviving organization from the proper 
 12.27  officer of the state or country under the laws of which the 
 12.28  business entity is organized constitutes a valid application of 
 12.29  withdrawal and the authority of the business entity to transact 
 12.30  business in this state shall cease upon filing of the 
 12.31  certificate. 
 12.32     (c) The certificate of authority of a foreign cooperative 
 12.33  to transact business in this state may be revoked by the 
 12.34  secretary of state upon the occurrence of any of these events: 
 12.35     (1) the foreign cooperative has failed to appoint and 
 12.36  maintain a registered agent as required by this chapter, file a 
 13.1   report upon any change in the name or business address of the 
 13.2   registered agent, or file in the office of the secretary of 
 13.3   state any amendment to its application for a certificate of 
 13.4   authority as specified in section 308B.121; or 
 13.5      (2) a misrepresentation has been made of any material 
 13.6   matter in any application, report, affidavit, or other document 
 13.7   submitted by the foreign cooperative under this chapter. 
 13.8      (d) No certificate of authority of a foreign cooperative 
 13.9   shall be revoked by the secretary of state unless: 
 13.10     (1) the secretary of state has given the foreign 
 13.11  cooperative not less than 60 days' notice by mail addressed to 
 13.12  its registered office in this state or, if the foreign 
 13.13  cooperative fails to appoint and maintain a registered agent in 
 13.14  this state, addressed to the office address in the jurisdiction 
 13.15  of organization; and 
 13.16     (2) during the 60-day period, the foreign cooperative has 
 13.17  failed to file the report of change regarding the registered 
 13.18  agent, to file any amendment, or to correct the 
 13.19  misrepresentation. 
 13.20     (e) Sixty days after the mailing of the notice, the 
 13.21  authority of the foreign cooperative to transact business in 
 13.22  this state ceases.  The secretary of state shall issue a 
 13.23  certificate of revocation and shall mail the certificate to the 
 13.24  address of the principal place of business or the office 
 13.25  required to be maintained in the jurisdiction of organization of 
 13.26  the foreign cooperative. 
 13.27     Subd. 6.  [TRANSACTION OF BUSINESS WITHOUT CERTIFICATE OF 
 13.28  AUTHORITY.] (a) A foreign cooperative transacting business in 
 13.29  this state may not maintain any action, suit, or proceeding in 
 13.30  any court of this state until it possesses a certificate of 
 13.31  authority. 
 13.32     (b) The failure of a foreign cooperative to obtain a 
 13.33  certificate of authority does not impair the validity of any 
 13.34  contract or act of the foreign cooperative or prevent the 
 13.35  foreign cooperative from defending any action, suit, or 
 13.36  proceeding in any court of this state. 
 14.1      (c) A foreign cooperative, by transacting business in this 
 14.2   state without a certificate of authority, appoints the secretary 
 14.3   of state as its agent upon whom any notice, process, or demand 
 14.4   may be served. 
 14.5      (d) A foreign cooperative that transacts business in this 
 14.6   state without a valid certificate of authority is liable to the 
 14.7   state for the years or parts of years during which it transacted 
 14.8   business in this state without the certificate in any amount 
 14.9   equal to all fees that would have been imposed by this chapter 
 14.10  upon that business entity had it duly obtained the certificate, 
 14.11  filed all reports required by this chapter, and paid all 
 14.12  penalties imposed by this chapter.  The attorney general shall 
 14.13  bring proceedings to recover all amounts due this state under 
 14.14  the provisions of this section. 
 14.15     (e) A foreign cooperative that transacts business in this 
 14.16  state without a valid certificate of authority is subject to a 
 14.17  civil penalty, payable to the state, not to exceed $5,000.  Each 
 14.18  director or, in the absence of directors, each member or agent 
 14.19  who authorizes, directs, or participates in the transaction of 
 14.20  business in this state on behalf of a foreign cooperative that 
 14.21  does not have a certificate is subject to a civil penalty, 
 14.22  payable to the state, not to exceed $1,000. 
 14.23     (f) The civil penalties set forth in paragraph (e) may be 
 14.24  recovered in an action brought in the district court for Ramsey 
 14.25  county by the attorney general.  Upon a finding by the court 
 14.26  that a foreign cooperative or any of its members, directors, or 
 14.27  agents have transacted business in this state in violation of 
 14.28  this chapter, the court shall issue, in addition to the 
 14.29  imposition of a civil penalty, an injunction restraining the 
 14.30  further transaction of the business of the foreign cooperative 
 14.31  and the further exercise of any business entity's rights and 
 14.32  privileges in this state.  The foreign cooperation must be 
 14.33  enjoined from transacting business in this state until all civil 
 14.34  penalties plus any interest and court costs that the court may 
 14.35  assess have been paid and until the foreign cooperative has 
 14.36  otherwise complied with the provisions of this chapter. 
 15.1      (g) A member of a foreign cooperative is not liable for the 
 15.2   debts and obligations of the foreign cooperative solely by 
 15.3   reason of the business entity's having transacted business in 
 15.4   this state without a valid certificate of authority. 
 15.5      Subd. 7.  [TRANSACTIONS NOT CONSTITUTING TRANSACTING 
 15.6   BUSINESS.] (a) The following activities of a foreign 
 15.7   cooperative, among others, do not constitute transacting 
 15.8   business within the meaning of this section: 
 15.9      (1) maintaining, defending, or settling any proceeding; 
 15.10     (2) holding meetings of its members or carrying on any 
 15.11  other activities concerning its internal affairs; 
 15.12     (3) maintaining bank accounts; 
 15.13     (4) maintaining offices or agencies for the transfer, 
 15.14  exchange, and registration of the foreign cooperative's own 
 15.15  securities or maintaining trustees or depositories with respect 
 15.16  to those securities; 
 15.17     (5) selling through independent contractors; 
 15.18     (6) soliciting or obtaining orders, whether by mail or 
 15.19  through employees or agents or otherwise, if the orders require 
 15.20  acceptance outside this state before they become contracts; 
 15.21     (7) creating or acquiring indebtedness, mortgages, and 
 15.22  security interests in real or personal property; 
 15.23     (8) securing or collecting debts or enforcing mortgages, 
 15.24  and security interests in property securing the debts; 
 15.25     (9) holding, protecting, renting, maintaining, and 
 15.26  operating real or personal property in this state; 
 15.27     (10) selling or transferring title to property in this 
 15.28  state to any person; or 
 15.29     (11) conducting an isolated transaction that is completed 
 15.30  within 30 days and that is not one in the course of repeated 
 15.31  transactions of a like manner. 
 15.32     (b) The term "transacting business" as used in this section 
 15.33  has no effect on personal jurisdiction under section 543.19. 
 15.34     (c) For purposes of this section, any foreign cooperative 
 15.35  that owns income-producing real or tangible personal property in 
 15.36  this state, other than property exempted under paragraph (a), is 
 16.1   considered to be transacting business in this state. 
 16.2      (d) The list of activities in paragraph (a) is not 
 16.3   exhaustive.  This subdivision does not apply in determining the 
 16.4   contracts or activities that may subject a foreign cooperative 
 16.5   to service of process or taxation in this state or to regulation 
 16.6   under any other law of this state. 
 16.7      Subd. 8.  [ACTION TO RESTRAIN FOREIGN COOPERATIVE.] The 
 16.8   attorney general may bring an action to restrain a foreign 
 16.9   cooperative from transacting business in this state in violation 
 16.10  of this chapter, chapter 308A, or other laws of this state. 
 16.11     Subd 9.  [SERVICE OF PROCESS.] Service of process on a 
 16.12  foreign cooperative must be as provided under section 5.25. 
 16.13                            ORGANIZATION
 16.14     Sec. 9.  [308B.201] [ORGANIZATIONAL PURPOSE.] 
 16.15     A cooperative may be formed and organized on a cooperative 
 16.16  plan for any lawful purpose, including: 
 16.17     (1) to market, process, or otherwise change the form or 
 16.18  marketability of products, including crops, livestock, and other 
 16.19  agricultural products, the manufacturing and further processing 
 16.20  of those products, other purposes that are necessary or 
 16.21  convenient to facilitate the production or marketing of products 
 16.22  by patron members and others, and other purposes that are 
 16.23  related to the business of the cooperative; 
 16.24     (2) to provide products, supplies, and services to its 
 16.25  members; and 
 16.26     (3) for any other purposes that cooperatives are authorized 
 16.27  by law. 
 16.28     Sec. 10.  [308B.205] [ORGANIZERS.] 
 16.29     Subdivision 1.  [QUALIFICATION.] A cooperative may be 
 16.30  organized by one or more organizers who shall be adult natural 
 16.31  persons, and who may act for themselves as individuals or as the 
 16.32  agents of other entities.  The organizers forming the 
 16.33  cooperative need not be members of the cooperative. 
 16.34     Subd. 2.  [ROLE OF ORGANIZERS.] If the first board is not 
 16.35  named in the articles of organization, the organizers may elect 
 16.36  the first board or may act as directors with all of the powers, 
 17.1   rights, duties, and liabilities of directors, until directors 
 17.2   are elected or until a contribution is accepted, whichever 
 17.3   occurs first. 
 17.4      Subd. 3.  [MEETING.] After the filing of articles of 
 17.5   organization, the organizers or the directors named in the 
 17.6   articles of organization shall either hold an organizational 
 17.7   meeting at the call of a majority of the organizers or of the 
 17.8   directors named in the articles, or take written action for the 
 17.9   purposes of transacting business and taking actions necessary or 
 17.10  appropriate to complete the organization of the cooperative, 
 17.11  including, without limitations, amending the articles, electing 
 17.12  directors; adopting bylaws, adopting banking resolutions, 
 17.13  authorizing or ratifying the purchase, lease, or other 
 17.14  acquisition of suitable space, furniture, furnishings, supplies, 
 17.15  and materials; adopting a fiscal year for the cooperative; 
 17.16  contracting to receive and accept contributions; and making any 
 17.17  appropriate tax elections.  If a meeting is held, the person or 
 17.18  persons calling the meeting shall give at least three days' 
 17.19  notice of the meeting to each organizer or director named, 
 17.20  stating the date, time, and place of the meeting.  Organizers 
 17.21  and directors may waive notice of an organizational meeting in 
 17.22  the same manner that a director may waive notice of meetings of 
 17.23  the board. 
 17.24     Sec. 11.  [308B.211] [COOPERATIVE NAME.] 
 17.25     Subdivision 1.  [DISTINGUISHED NAME.] The name of a 
 17.26  cooperative shall distinguish the cooperative upon the records 
 17.27  in the office of the secretary of state from the name of a 
 17.28  domestic business entity or a foreign business entity, 
 17.29  authorized or registered to do business in this state, or a name 
 17.30  the right to which is, at the time of organization, reserved or 
 17.31  provided for by law. 
 17.32     Subd. 2.  [RESERVATION; CONTEST OF NAME.] The cooperative 
 17.33  name shall be reserved for the cooperative during its 
 17.34  existence.  A person doing business in this state may contest 
 17.35  the registration of a name with the secretary of state under 
 17.36  section 5.22. 
 18.1      Sec. 12.  [308B.215] [ARTICLES OF ORGANIZATION.] 
 18.2      Subdivision 1.  [REQUIREMENTS.] (a) The articles of the 
 18.3   cooperative shall include: 
 18.4      (1) the name of the cooperative; 
 18.5      (2) the purpose of the cooperative; 
 18.6      (3) the name and address of each organizer; and 
 18.7      (4) the period of duration for the cooperative, if the 
 18.8   duration is not to be perpetual. 
 18.9      (b) The articles may contain any other lawful provision. 
 18.10     (c) The articles shall be signed by the organizers. 
 18.11     Subd. 2.  [FILING.] The original articles and a designation 
 18.12  of the cooperative's registered office and agent, including a 
 18.13  registration form under section 308B.121, shall be filed with 
 18.14  the secretary of state.  The fee for filing the articles with 
 18.15  the secretary of state is $60. 
 18.16     Subd. 3.  [EFFECT OF FILING.] When the articles, the 
 18.17  registration form under section 308B.121, and the designation of 
 18.18  the cooperative's registered office and agent have been filed 
 18.19  with the secretary of state and the required fee has been paid 
 18.20  to the secretary of state, it shall be presumed that: 
 18.21     (1) all conditions precedent that are required to be 
 18.22  performed by the organizers have been complied with; 
 18.23     (2) the organization of the cooperative has been chartered 
 18.24  by the state as a separate legal entity; and 
 18.25     (3) the secretary of state shall issue a certificate of 
 18.26  organization to the cooperative. 
 18.27     Sec. 13.  [308B.221] [AMENDMENT OF ARTICLES.] 
 18.28     Subdivision 1.  [PROCEDURE.] (a) The articles of a 
 18.29  cooperative shall be amended as follows: 
 18.30     (1) the board, by majority vote, shall pass a resolution 
 18.31  stating the text of the proposed amendment.  The text of the 
 18.32  proposed amendment and an attached mail or alternative ballot, 
 18.33  if the board has provided for a mail or alternative ballot in 
 18.34  the resolution or alternative method approved by the board and 
 18.35  stated in the resolution, shall be mailed or otherwise 
 18.36  distributed with a regular or special meeting notice to each 
 19.1   member.  The notice shall designate the time and place of the 
 19.2   meeting for the proposed amendment to be considered and voted 
 19.3   on; 
 19.4      (2) if a quorum of the members is registered as being 
 19.5   present or represented by alternative vote at the meeting, the 
 19.6   proposed amendment is adopted: 
 19.7      (i) if approved by a majority of the votes cast; or 
 19.8      (ii) for a cooperative with articles or bylaws requiring 
 19.9   more than majority approval or other conditions for approval, 
 19.10  the amendment is approved by a proportion of the votes cast or a 
 19.11  number of total members as required by the articles or bylaws 
 19.12  and the conditions for approval in the articles or bylaws have 
 19.13  been satisfied. 
 19.14     (b) After an amendment has been adopted by the members, the 
 19.15  amendment shall be signed by the chair, vice chair, records 
 19.16  officer, or assistant records officer and a copy of the 
 19.17  amendment filed in the office of the secretary of state. 
 19.18     Subd. 2.  [CERTIFICATE.] (a) A certificate shall be 
 19.19  prepared stating: 
 19.20     (1) the vote and meeting of the board adopting a resolution 
 19.21  of the proposed amendment; 
 19.22     (2) the notice given to members of the meeting at which the 
 19.23  amendment was adopted; 
 19.24     (3) the quorum registered at the meeting; and 
 19.25     (4) the vote cast adopting the amendment. 
 19.26     (b) The certificate shall be signed by the chair, vice 
 19.27  chair, records officer, or financial officer and filed with the 
 19.28  records of the cooperative. 
 19.29     Subd. 3.  [AMENDMENT BY DIRECTORS.] A majority of directors 
 19.30  may amend the articles if the cooperative does not have any 
 19.31  members with voting rights. 
 19.32     Subd. 4.  [FILING.] An amendment of the articles shall be 
 19.33  filed with the secretary of state with a registration statement 
 19.34  under section 308B.121, and the amendment is effective upon 
 19.35  filing or the date specified in the resolution adopting the 
 19.36  amendment. 
 20.1      Sec. 14.  [308B.225] [AMENDMENT OF ORGANIZATIONAL DOCUMENTS 
 20.2   TO BE GOVERNED BY THIS CHAPTER.] 
 20.3      Subdivision 1.  [AUTHORITY.] A cooperative organized under 
 20.4   chapter 308A may become subject to this chapter by amending its 
 20.5   organizational documents to conform to the requirements of this 
 20.6   chapter.  A cooperative organized under chapter 308A that 
 20.7   becomes subject to this chapter must provide its members with a 
 20.8   disclosure statement of the rights and obligations of the 
 20.9   members and the capital structure of the cooperative before 
 20.10  becoming subject to this chapter. 
 20.11     Subd. 2.  [COOPERATIVES IN THIS STATE.] A cooperative 
 20.12  organized under chapter 308A may amend its articles in the 
 20.13  manner provided under chapter 308A to comply with the provisions 
 20.14  of this article and file the amended articles with the secretary 
 20.15  of state to be a cooperative governed under this chapter.  The 
 20.16  separate existence of the cooperative organized under chapter 
 20.17  308A ceases with the filing of articles to be governed under 
 20.18  this chapter. 
 20.19     Sec. 15.  [308B.231] [CURATIVE FILING.] 
 20.20     If the secretary of state determines that a filing has been 
 20.21  made in error by the cooperative, the secretary of state may 
 20.22  revoke and expunge the erroneous filing and authorize a curative 
 20.23  document to be filed.  A filing fee of $500 shall be charged for 
 20.24  any such revocation or expungement and subsequent curative 
 20.25  filing. 
 20.26     Sec. 16.  [308B.235] [EXISTENCE.] 
 20.27     Subdivision 1.  [COMMENCEMENT UPON FILING.] The existence 
 20.28  of a cooperative shall commence when the articles are filed with 
 20.29  the secretary of state. 
 20.30     Subd. 2.  [DURATION.] A cooperative shall have a perpetual 
 20.31  duration unless the cooperative provides for a limited period of 
 20.32  duration in the articles. 
 20.33     Sec. 17.  [308B.241] [BYLAWS.] 
 20.34     Subdivision 1.  [REQUIRED.] A cooperative shall have bylaws 
 20.35  governing the cooperative's business affairs, structure, the 
 20.36  qualifications, classification, rights and obligations of 
 21.1   members, and the classifications, allocations, and distributions 
 21.2   of membership interests, which are not otherwise provided in the 
 21.3   articles or by this chapter. 
 21.4      Subd. 2.  [CONTENTS.] (a) If not stated in the articles, 
 21.5   the bylaws must state: 
 21.6      (1) the purpose of the cooperative; 
 21.7      (2) the capital structure of the cooperative to the extent 
 21.8   not stated in the articles, including a statement of the classes 
 21.9   and relative rights, preferences, and restrictions granted to or 
 21.10  imposed upon each class of member interests, the rights to share 
 21.11  in profits or distributions of the cooperative, and the 
 21.12  authority to issue membership interests, which may be designated 
 21.13  to be determined by the board; 
 21.14     (3) a provision designating the voting and governance 
 21.15  rights, to the extent not stated in the articles, including 
 21.16  which membership interests have voting power and any limitations 
 21.17  or restrictions on the voting power, which shall be in 
 21.18  accordance with the provisions of this chapter; 
 21.19     (4) a statement that patron membership interests with 
 21.20  voting power shall be restricted to one vote for each member 
 21.21  regardless of the amount of patron membership interests held in 
 21.22  the affairs of the cooperative or a statement describing the 
 21.23  allocation of voting power allocated as prescribed in this 
 21.24  chapter; 
 21.25     (5) a statement that membership interests held by a member 
 21.26  are transferable only with the approval of the board or as 
 21.27  provided in the bylaws; and 
 21.28     (6) if nonpatron membership interests are authorized, a 
 21.29  statement as to how profits and losses will be allocated and 
 21.30  cash will be distributed between patron membership interests 
 21.31  collectively and nonpatron membership interests collectively to 
 21.32  the extent not stated in the articles, a statement that net 
 21.33  income allocated to a patron membership interest as determined 
 21.34  by the board in excess of dividends and additions to reserves 
 21.35  shall be distributed on the basis of patronage, and a statement 
 21.36  that the records of the cooperative shall include patron 
 22.1   membership interests and, if authorized, nonpatron membership 
 22.2   interests, which may be further described in the bylaws of any 
 22.3   classes and in the reserves. 
 22.4      (b) The bylaws may contain any provision relating to the 
 22.5   management or regulation of the affairs of the cooperative that 
 22.6   are not inconsistent with law or the articles, and shall include 
 22.7   the following: 
 22.8      (1) the number of directors and the qualifications, manner 
 22.9   of election, powers, duties, and compensation, if any, of 
 22.10  directors; 
 22.11     (2) the qualifications of members and any limitations on 
 22.12  their number; 
 22.13     (3) the manner of admission, withdrawal, suspensions, and 
 22.14  expulsion of members; 
 22.15     (4) generally, the governance rights, financial rights, 
 22.16  assignability of governance and financial rights, and other 
 22.17  rights, privileges, and obligations of members and their 
 22.18  membership interests, which may be further described in member 
 22.19  control agreements; and 
 22.20     (5) any provisions required by the articles to be in the 
 22.21  bylaws. 
 22.22     Subd. 3.  [ADOPTION.] (a) Bylaws shall be adopted before 
 22.23  any distributions to members, but if the articles or bylaws 
 22.24  provide that rights of contributors to a class of membership 
 22.25  interest will be determined in the bylaws, then the bylaws must 
 22.26  be adopted before the acceptance of any contributions to that 
 22.27  class. 
 22.28     (b) Subject to subdivisions 4, 5, and 6, the bylaws of a 
 22.29  cooperative may be adopted or amended by the directors, or the 
 22.30  members may adopt or amend bylaws at a regular or special 
 22.31  members' meeting if: 
 22.32     (1) the notice of the regular or special meeting contains a 
 22.33  statement that the bylaws or restated bylaws will be voted upon 
 22.34  and copies are included with the notice, or copies are available 
 22.35  upon request from the cooperative and summary statement of the 
 22.36  proposed bylaws or amendment is included with the notice; 
 23.1      (2) a quorum is registered as being present or represented 
 23.2   by mail or alternative voting method if the mail or alternative 
 23.3   voting method is authorized by the board; and 
 23.4      (3) the bylaws or amendment is approved by a majority vote 
 23.5   cast, or for a cooperative with articles or bylaws requiring 
 23.6   more than majority approval or other conditions for approval, 
 23.7   the bylaws or amendment is approved by a proportion of the vote 
 23.8   cast or a number of the total members are required by the 
 23.9   articles or bylaws and the conditions for approval in the 
 23.10  articles or bylaws have been satisfied. 
 23.11     (c) Until the next annual or special members' meeting, the 
 23.12  majority of directors may adopt and amend bylaws for the 
 23.13  cooperative that are consistent with subdivisions 4 to 6, which 
 23.14  may be further amended or repealed by the members at an annual 
 23.15  or special members' meeting. 
 23.16     Subd. 4.  [AMENDMENT OF BYLAWS BY BOARD OR MEMBERS.] (a) 
 23.17  The board may amend the bylaws at any time to add, change, or 
 23.18  delete a provision, unless: 
 23.19     (1) this chapter, the articles, or the bylaws reserve the 
 23.20  power exclusively to the members in whole or in part; or 
 23.21     (2) a particular bylaw expressly prohibits the board from 
 23.22  doing so. 
 23.23     (b) Any amendment of the bylaws by the board must be 
 23.24  distributed to the members no later than ten days after adoption 
 23.25  and the notice of the annual meeting of the members must contain 
 23.26  a notice and summary or the actual amendments to the bylaws 
 23.27  adopted by the board. 
 23.28     (c) The members may amend the bylaws even though the bylaws 
 23.29  may also be amended by the board. 
 23.30     Subd. 5.  [BYLAW CHANGING QUORUM OR VOTING REQUIREMENT FOR 
 23.31  MEMBERS.] (a) The members may amend the bylaws to fix a greater 
 23.32  quorum or voting requirement for members, or voting groups of 
 23.33  members, than is required under this chapter.  An amendment to 
 23.34  the bylaws to add, change, or delete a greater quorum or voting 
 23.35  requirement for members shall meet the same quorum requirement 
 23.36  and be adopted by the same vote and voting groups required to 
 24.1   take action under the quorum and voting requirements then in 
 24.2   effect or proposed to be adopted, whichever is greater. 
 24.3      (b) A bylaw that fixes a greater quorum or voting 
 24.4   requirement for members under paragraph (a) may not be adopted 
 24.5   and shall not be amended by the board. 
 24.6      Subd. 6.  [BYLAW CHANGING QUORUM OR VOTING REQUIREMENT FOR 
 24.7   DIRECTORS.] (a) A bylaw that fixes a greater quorum or voting 
 24.8   requirement for the board may be amended: 
 24.9      (1) if adopted by the members, only by the members; or 
 24.10     (2) if adopted by the board, either by the members or by 
 24.11  the board. 
 24.12     (b) A bylaw adopted or amended by the members that fixes a 
 24.13  greater quorum or voting requirement for the board may provide 
 24.14  that it may be amended only by a specified vote of either the 
 24.15  members or the board, but if the bylaw is to be amended by a 
 24.16  specified vote of the members, the bylaw must be adopted by the 
 24.17  same specified vote of the members. 
 24.18     (c) Action by the board under paragraph (a), clause (2), to 
 24.19  adopt or amend a bylaw that changes the quorum or voting 
 24.20  requirement for the board shall meet the same quorum requirement 
 24.21  and be adopted by the same vote required to take action under 
 24.22  the quorum and voting requirement then in effect or proposed to 
 24.23  be adopted, whichever is greater. 
 24.24     Subd. 7.  [EMERGENCY BYLAWS.] (a) Unless otherwise provided 
 24.25  in the articles or bylaws, the board may adopt bylaws to be 
 24.26  effective only in an emergency as defined in paragraph (d).  The 
 24.27  emergency bylaws, which are subject to amendment or repeal by 
 24.28  the members, may include all provisions necessary for managing 
 24.29  the cooperative during the emergency, including: 
 24.30     (1) procedures for calling a meeting of the board; 
 24.31     (2) quorum requirements for the meeting; and 
 24.32     (3) designation of additional or substitute directors. 
 24.33     (b) All provisions of the regular bylaws consistent with 
 24.34  the emergency bylaws shall remain in effect during the 
 24.35  emergency.  The emergency bylaws shall not be effective after 
 24.36  the emergency ends. 
 25.1      (c) Action taken in good faith in accordance with the 
 25.2   emergency bylaws: 
 25.3      (1) binds the cooperative; and 
 25.4      (2) may not be the basis for imposition of liability on any 
 25.5   director, officer, employee, or agent of the cooperative on the 
 25.6   grounds that the action was not authorized cooperative action. 
 25.7      (d) An emergency exists for the purposes of this section, 
 25.8   if a quorum of the directors cannot readily be obtained because 
 25.9   of some catastrophic event. 
 25.10     Sec. 18.  [308B.245] [COOPERATIVE RECORDS.] 
 25.11     (a) A cooperative shall keep as permanent records minutes 
 25.12  of all meetings of its members and of the board, a record of all 
 25.13  actions taken by the members or the board without a meeting by a 
 25.14  written unanimous consent in lieu of a meeting, and a record of 
 25.15  all waivers of notices of meetings of the members and of the 
 25.16  board. 
 25.17     (b) A cooperative shall maintain appropriate accounting 
 25.18  records. 
 25.19     (c) A cooperative shall maintain its records in written 
 25.20  form or in another form capable of conversion into written form 
 25.21  within a reasonable time. 
 25.22     (d) A cooperative shall keep a copy of each of the 
 25.23  following records at its principal office: 
 25.24     (1) its articles and other governing instruments; 
 25.25     (2) its bylaws or other similar instruments; 
 25.26     (3) a record of the names and addresses of its members, in 
 25.27  a form that allows preparation of an alphabetical list of 
 25.28  members with each member's address; 
 25.29     (4) the minutes of members' meetings, and records of all 
 25.30  actions taken by members without a meeting by unanimous written 
 25.31  consent in lieu of a meeting, for the past three years; 
 25.32     (5) all written communications within the past three years 
 25.33  to members as a group or to any class of members as a group; 
 25.34     (6) a list of the names and business addresses of its 
 25.35  current board members and officers; 
 25.36     (7) a copy of its most recent periodic registration 
 26.1   delivered to the secretary of state under section 308B.121; and 
 26.2      (8) all financial statements prepared for periods ending 
 26.3   during the last fiscal year.  
 26.4      (e) Except as otherwise limited by this chapter, the board 
 26.5   of a cooperative shall have discretion to determine what records 
 26.6   are appropriate for the purposes of the cooperative, the length 
 26.7   of time records are to be retained, and policies relating to the 
 26.8   confidentiality, disclosure, inspection, and copying of the 
 26.9   records of the cooperative.  
 26.10     Sec. 19.  [308B.301] [POWERS.] 
 26.11     Subdivision 1.  [GENERALLY.] (a) In addition to other 
 26.12  powers, a cooperative as an agent or otherwise: 
 26.13     (1) may perform every act necessary or proper to the 
 26.14  conduct of the cooperative's business or the accomplishment of 
 26.15  the purposes of the cooperative; 
 26.16     (2) has other rights, powers, or privileges granted by the 
 26.17  laws of this state to other cooperatives, except those that are 
 26.18  inconsistent with the express provisions of this chapter; and 
 26.19     (3) has the powers given in section 308A.201 and in this 
 26.20  section.  
 26.21     (b) This section does not give a cooperative the power or 
 26.22  authority to exercise the powers of a credit union under chapter 
 26.23  52, a bank under chapter 48, or a savings association under 
 26.24  chapter 51A. 
 26.25     Subd. 2.  [DEALING IN PRODUCTS.] A cooperative may buy, 
 26.26  sell, or deal in its own products; the products of its 
 26.27  individual members, patrons, or nonmembers; the products of 
 26.28  another cooperative association or of its members or patrons; or 
 26.29  the products of another person or entity.  A cooperative may 
 26.30  negotiate the price at which its products may be sold.  
 26.31     Subd. 3.  [CONTRACTS WITH MEMBERS.] A cooperative may enter 
 26.32  into or become a party to a contract or agreement for the 
 26.33  cooperative or for the cooperative's individual members or 
 26.34  patrons or between the cooperative and its members.  
 26.35     Subd. 4.  [HOLDING AND TRANSACTIONS OF REAL AND PERSONAL 
 26.36  PROPERTY.] (a) A cooperative may purchase and hold, lease, 
 27.1   mortgage, encumber, sell, exchange, and convey as a legal entity 
 27.2   real, personal, and intellectual property, including real 
 27.3   estate, buildings, personal property, patents, and copyrights as 
 27.4   the business of the cooperative may require, including the sale 
 27.5   or other disposition of assets required by the business of the 
 27.6   cooperative as determined by the board. 
 27.7      (b) A cooperative may take, receive, and hold real and 
 27.8   personal property, including the principal and interest of money 
 27.9   or other funds and rights in a contract, in trust for any 
 27.10  purpose not inconsistent with the purposes of the cooperative in 
 27.11  its articles or bylaws and may exercise fiduciary powers in 
 27.12  relation to taking, receiving, and holding the real and personal 
 27.13  property.  
 27.14     Subd. 5.  [BUILDINGS.] A cooperative may erect buildings or 
 27.15  other structures or facilities on the cooperative's owned or 
 27.16  leased property or on a right-of-way legally acquired by the 
 27.17  cooperative.  
 27.18     Subd. 6.  [DEBT INSTRUMENTS.] A cooperative may issue 
 27.19  bonds, debentures, or other evidence of indebtedness and may 
 27.20  borrow money, may secure any of its obligations by mortgage of 
 27.21  or creation of a security interest in or other encumbrances or 
 27.22  assignment of all or any of its property, franchises, or income, 
 27.23  and may issue guarantees for any legal purpose.  The cooperative 
 27.24  may form special purpose business entities to secure assets of 
 27.25  the cooperative.  
 27.26     Subd. 7.  [ADVANCES TO PATRONS.] A cooperative may make 
 27.27  advances to its members or patrons on products delivered by the 
 27.28  members or patrons to the cooperative.  
 27.29     Subd. 8.  [DEPOSITS.] A cooperative may accept donations or 
 27.30  deposits of money or real personal property from other 
 27.31  cooperatives or associations from which it is constituted.  
 27.32     Subd. 9.  [LENDING, BORROWING, INVESTING.] A cooperative 
 27.33  may loan or borrow money to or from individual members, 
 27.34  cooperatives, or associations from which it is constituted with 
 27.35  security that it considers sufficient.  A cooperative may invest 
 27.36  and reinvest its funds. 
 28.1      Subd. 10.  [PENSIONS AND BENEFITS.] A cooperative may pay 
 28.2   pensions, retirement allowances, and compensation for past 
 28.3   services to and for the benefit of; and establish, maintain, 
 28.4   continue, and carry out, wholly or partially at the expense of 
 28.5   the cooperative, employee or incentive benefit plans, trust, and 
 28.6   provisions to or for the benefit of any or all of its and its 
 28.7   related organizations' officers, managers, directors, governors, 
 28.8   employees, and agents; and in the case of a related organization 
 28.9   that is a cooperative, members who provide services to the 
 28.10  cooperative, and any of their families, dependents, and 
 28.11  beneficiaries.  It may indemnify and purchase and maintain 
 28.12  insurance for and on behalf of a fiduciary of any of these 
 28.13  employee benefit and incentive plans, trusts, and provisions.  
 28.14     Subd. 11.  [INSURANCE.] A cooperative may provide for its 
 28.15  benefit life insurance and other insurance with respect to the 
 28.16  services of any or all of its members, managers, directors, 
 28.17  employees, and agents, or on the life of a member for the 
 28.18  purpose of acquiring at the death of the member any or all 
 28.19  membership interests in the cooperative owned by the member.  
 28.20     Subd. 12.  [OWNERSHIP INTERESTS IN OTHER ENTITIES.] (a) A 
 28.21  cooperative may purchase, acquire, hold, or dispose of the 
 28.22  ownership interests of another business entity or organize 
 28.23  business entities whether organized under the laws of this state 
 28.24  or another state or the United States and assume all rights, 
 28.25  interests, privileges, responsibilities, and obligations arising 
 28.26  out of the ownership interests, including a business entity 
 28.27  organized: 
 28.28     (1) as a federation of associations; 
 28.29     (2) for the purpose of forming a district, state, or 
 28.30  national marketing sales or service agency; or 
 28.31     (3) for the purpose of acquiring marketing facilities at 
 28.32  terminal or other markets in this state or other states.  
 28.33     (b) A cooperative may purchase, own, and hold ownership 
 28.34  interests, including stock and other equity interests, 
 28.35  memberships, interests in nonstock capital, and evidences of 
 28.36  indebtedness of any domestic business entity or foreign business 
 29.1   entity. 
 29.2      Subd. 13.  [FIDUCIARY POWERS.] A cooperative may exercise 
 29.3   any and all fiduciary powers in relations with members, 
 29.4   cooperatives, associations, or business entities from which it 
 29.5   is constituted.  
 29.6      Sec. 20.  [308B.305] [EMERGENCY POWERS.] 
 29.7      (a) In anticipation of or during an emergency defined in 
 29.8   paragraph (d), the board may: 
 29.9      (1) modify lines of succession to accommodate the 
 29.10  incapacity of any director, officer, employee, or agent; and 
 29.11     (2) relocate the principal office, designate alternative 
 29.12  principal offices or regional offices, or authorize the officers 
 29.13  to do so.  
 29.14     (b) During an emergency as contemplated in paragraph (d), 
 29.15  unless emergency bylaws provide otherwise: 
 29.16     (1) notice of a meeting of the board need be given only to 
 29.17  those directors to whom it is practicable to reach and may be 
 29.18  given in any practicable manner, including by publication or 
 29.19  radio; and 
 29.20     (2) one of more officers of the cooperative present at a 
 29.21  meeting of the board may be deemed to be directors for the 
 29.22  meeting, in order of rank and within the same rank in order of 
 29.23  seniority, as necessary to achieve a quorum. 
 29.24     (c) Cooperative action taken in good faith during an 
 29.25  emergency under this section to further the ordinary business 
 29.26  affairs of the cooperative: 
 29.27     (1) binds the cooperative; and 
 29.28     (2) may not be the basis for the imposition of liability on 
 29.29  any director, officer, employee, or agent of the cooperative on 
 29.30  the grounds that the action was not an authorized cooperative 
 29.31  action. 
 29.32     (d) An emergency exists for purposes of this section if a 
 29.33  quorum of the directors cannot readily be obtained because of a 
 29.34  catastrophic event.  
 29.35     Sec. 21.  [308B.311] [AGRICULTURAL PRODUCT MARKETING 
 29.36  CONTRACTS.] 
 30.1      Subdivision 1.  [AUTHORITY.] A cooperative and its patron 
 30.2   member or patron may make and execute a marketing contract, 
 30.3   requiring the patron member or patron to sell a specified 
 30.4   portion of the patron member's or patron's agricultural product 
 30.5   or specified commodity produced from a certain area exclusively 
 30.6   to or through the cooperative or facility established by the 
 30.7   cooperative.  
 30.8      Subd. 2.  [TITLE TO PRODUCTS.] If a sale is contracted to 
 30.9   the cooperative, the sale shall transfer title to the product 
 30.10  absolutely, except for a recorded lien or security interest 
 30.11  against the agricultural products of the patron member or patron 
 30.12  in the state central notification system and liens granted 
 30.13  against farm products under federal law, to the cooperative on 
 30.14  delivery of the product or at another specified time if 
 30.15  expressly provided in the contract.  The contract may allow the 
 30.16  cooperative to sell or resell the product of its patron member 
 30.17  or patron with or without taking title to the product, and pay 
 30.18  the resale price to the patron member or patron, after deducting 
 30.19  all necessary selling, overhead, and other costs and expenses, 
 30.20  including other proper reserves and interest.  
 30.21     Subd. 3.  [TERM OF CONTRACT.] A single term of a marketing 
 30.22  contract shall not exceed ten years, but a marketing contract 
 30.23  may be made self-renewing for periods not exceeding five years 
 30.24  each, subject to the right of either party to terminate by 
 30.25  giving written notice of the termination during a period of the 
 30.26  current term as specified in the contract.  
 30.27     Subd. 4.  [DAMAGES FOR BREACH OF CONTRACT.] The bylaws or 
 30.28  the marketing contract, or both, may set a specific sum as 
 30.29  liquidated damages to be paid by the patron member or patron to 
 30.30  the cooperative for breach of any provision of the marketing 
 30.31  contract regarding the sale or delivery or withholding of a 
 30.32  product and may provide that the member or patron shall pay the 
 30.33  costs, premiums for bonds, expenses, and fees if an action is 
 30.34  brought on the contract by the cooperative.  The remedies for 
 30.35  breach of contract are valid and enforceable in the courts of 
 30.36  this state.  The provisions shall be enforced as liquidated 
 31.1   damages and are not considered a penalty.  
 31.2      Subd. 5.  [INJUNCTION AGAINST BREACH OF CONTRACT.] If there 
 31.3   is a breach or threatened breach of a marketing contract by a 
 31.4   patron member or patron, the cooperative is entitled to an 
 31.5   injunction to prevent the further breach of the contract and to 
 31.6   a decree of specific performance of the contract.  Pending the 
 31.7   adjudication of the action after filing a complaint showing the 
 31.8   breach or threatened breach and filing a sufficient bond, the 
 31.9   cooperative is entitled to a temporary restraining order and 
 31.10  preliminary injunction against the patron member or patron.  
 31.11     Subd. 6.  [PENALTIES FOR CONTRACT INTERFERENCE AND FALSE 
 31.12  REPORTS.] Any person who knowingly induces or attempts to induce 
 31.13  any member or patron of a cooperative organized under this 
 31.14  chapter to breach a marketing contract with the cooperative, or 
 31.15  who maliciously and knowingly spreads false reports about the 
 31.16  cooperative's finances or management, is guilty of a misdemeanor 
 31.17  and subject to a fine of not less than $100, and not more than 
 31.18  $1,000, for each such offense.  
 31.19     Subd. 7.  [CIVIL DAMAGES FOR CONTRACT INTERFERENCE AND 
 31.20  FALSE REPORTS.] In addition to the penalty provided in 
 31.21  subdivision 6, the person may be liable to the cooperative for 
 31.22  civil damages for any violation of subdivision 6.  Each 
 31.23  violation shall constitute a separate offense.  
 31.24                       DIRECTORS AND OFFICERS
 31.25     Sec. 22.  [308B.401] [BOARD GOVERNS COOPERATIVE.] 
 31.26     A cooperative shall be governed by its board, which shall 
 31.27  take all action for and on behalf of the cooperative, except 
 31.28  those actions reserved or granted to members.  Board action 
 31.29  shall be by the affirmative vote of a majority of the directors 
 31.30  voting at a duly called meeting unless a greater majority is 
 31.31  required by the articles or bylaws.  A director individually or 
 31.32  collectively with other directors does not have authority to act 
 31.33  for or on behalf of the cooperative unless authorized by the 
 31.34  board.  A director may advocate interests of members or member 
 31.35  groups to the board, but the fiduciary duty of each director is 
 31.36  to represent the best interests of the cooperative and all 
 32.1   members collectively.  
 32.2      Sec. 23.  [308B.405] [NUMBER OF DIRECTORS.] 
 32.3      The board shall not have less than five directors, except 
 32.4   that a cooperative with 50 or fewer members may have three or 
 32.5   more directors as prescribed in the articles or bylaws.  
 32.6      Sec. 24.  [308B.411] [ELECTION OF DIRECTORS.] 
 32.7      Subdivision 1.  [FIRST BOARD.] The organizers shall elect 
 32.8   and obtain the acknowledgment of the first board to serve until 
 32.9   directors are elected by members.  Until election by members, 
 32.10  the first board shall appoint directors to fill any vacancies.  
 32.11     Subd. 2.  [GENERALLY.] (a) Directors shall be elected for 
 32.12  the term, at the time, and in the manner provided in this 
 32.13  section and the bylaws.  
 32.14     (b) A majority of the directors shall be members and a 
 32.15  majority of the directors shall be elected exclusively by the 
 32.16  members holding patron membership interests unless otherwise 
 32.17  provided in the articles or bylaws. 
 32.18     (c) The voting authority of the directors may be allocated 
 32.19  according to allocation units or equity classifications of the 
 32.20  cooperative provided that at least one-half of the voting power 
 32.21  on general matters of the cooperative shall be allocated to the 
 32.22  directors elected by members holding patron membership 
 32.23  interests, or in the alternative, the directors elected by the 
 32.24  members holding patron membership interests shall have an equal 
 32.25  or shall not have a minority voting power on general matters of 
 32.26  the cooperative. 
 32.27     (d) A director holds office for the term the director was 
 32.28  elected and until a successor is elected and has qualified, or 
 32.29  until the earlier death, resignation, removal, or 
 32.30  disqualification of the director.  
 32.31     (e) The expiration of a director's term with or without 
 32.32  election of a qualified successor does not make the prior or 
 32.33  subsequent acts of the director or the board void or voidable.  
 32.34     (f) Subject to any limitation in the articles or bylaws, 
 32.35  the board may set the compensation of directors.  
 32.36     (g) Directors may be divided into or designated and elected 
 33.1   by class or other distinction as provided in the articles or 
 33.2   bylaws. 
 33.3      (h) A director may resign by giving written notice to the 
 33.4   chair of the board or the board.  The resignation is effective 
 33.5   without acceptance when the notice is given to the chair of the 
 33.6   board or the board unless a later effective time is specified in 
 33.7   the notice.  
 33.8      Subd. 3.  [ELECTION AT REGULAR MEETING.] Directors shall be 
 33.9   elected at the regular members' meeting for the terms of office 
 33.10  prescribed in the bylaws.  Except for directors elected at 
 33.11  district meetings or special meetings to replace a vacancy, all 
 33.12  directors shall be elected at the regular members' meeting.  
 33.13  There shall be no cumulative voting for directors except as 
 33.14  provided in this chapter and the articles or bylaws.  
 33.15     Subd. 4.  [DISTRICT OR LOCAL UNIT ELECTION OF 
 33.16  DIRECTORS.] For a cooperative with districts or other units, 
 33.17  members may elect directors on a district or unit basis if 
 33.18  provided in the bylaws.  The directors may be nominated or 
 33.19  elected at district meetings if provided in the bylaws.  
 33.20  Directors who are nominated at district meetings shall be 
 33.21  elected at the annual regular members' meeting by vote of the 
 33.22  entire membership, unless the bylaws provide that directors who 
 33.23  are nominated at district meetings are to be elected by vote of 
 33.24  the members of the district, at the district meeting, or the 
 33.25  annual regular members' meeting.  
 33.26     Subd. 5.  [VOTE BY MAIL OR ALTERNATIVE BALLOT.] The 
 33.27  following shall apply to voting by mail or alternative ballot 
 33.28  voting: 
 33.29     (1) a member may not vote for a director other than by 
 33.30  being present at a meeting or by mail ballot or alternative 
 33.31  ballot authorized by the board; 
 33.32     (2) the ballot shall be in a form prescribed by the board; 
 33.33     (3) the member shall mark the ballot for the candidate 
 33.34  chosen and mail the ballot to the cooperative in a sealed plain 
 33.35  envelope inside another envelope bearing the member's name, or 
 33.36  shall vote designating the candidate chosen by alternative 
 34.1   ballot in the manner prescribed by the board; and 
 34.2      (4) if the ballot of the member is received by the 
 34.3   cooperative on or before the date of the regular members' 
 34.4   meeting or as otherwise prescribed for alternative ballots, the 
 34.5   ballot shall be accepted and counted as the vote of the absent 
 34.6   member.  
 34.7      Subd. 6.  [BUSINESS ENTITY MEMBERS MAY NOMINATE PERSONS FOR 
 34.8   DIRECTOR.] If a member of a cooperative is not a natural person, 
 34.9   and the bylaws do not provide otherwise, the member may appoint 
 34.10  or elect one or more natural persons to be eligible for election 
 34.11  as a director.  
 34.12     Subd. 7.  [TERM.] A director holds office for the term the 
 34.13  director was elected and until a successor is elected and has 
 34.14  qualified, or the earlier death, resignation, removal, or 
 34.15  disqualification of the director. 
 34.16     Subd. 8.  [ACTS NOT VOID OR VOIDABLE.] The expiration of a 
 34.17  director's term with or without the election of a qualified 
 34.18  successor does not make prior or subsequent acts of the director 
 34.19  void or voidable.  
 34.20     Subd. 9.  [COMPENSATION.] Subject to any limitation in the 
 34.21  articles or bylaws, the board may fix the compensation of the 
 34.22  directors.  
 34.23     Subd. 10.  [CLASSIFICATION.] Directors may be divided into 
 34.24  classes as provided in the articles or bylaws.  
 34.25     Sec. 25.  [308B.415] [FILLING VACANCIES.] 
 34.26     Subdivision 1.  [PATRON DIRECTORS.] If a patron member 
 34.27  director's position becomes vacant or a new director position is 
 34.28  created for a director that was or is to be elected by patron 
 34.29  members, the board, in consultation with the directors elected 
 34.30  by patron members, shall appoint a patron member of the 
 34.31  cooperative to fill the director's position until the next 
 34.32  regular or special members' meeting.  If there are no directors 
 34.33  elected by patron members on the board at the time of the 
 34.34  vacancy, a special patron members' meeting shall be called to 
 34.35  fill the patron member director vacancy.  
 34.36     Subd. 2.  [NONPATRON DIRECTORS.] If the vacating director 
 35.1   was not elected by the patron members or a new director position 
 35.2   is created, unless otherwise provided in the articles or bylaws, 
 35.3   the board shall appoint a director to fill the vacant position 
 35.4   by majority vote of the remaining or then serving directors even 
 35.5   though less than a quorum.  At the next regular or special 
 35.6   members' meeting, the members or patron members shall elect a 
 35.7   director to fill the unexpired term of the vacant director's 
 35.8   position. 
 35.9      Sec. 26.  [308B.421] [REMOVAL OF DIRECTORS.] 
 35.10     Subdivision 1.  [MODIFICATION.] The provisions of this 
 35.11  section apply unless modified by the articles or the bylaws.  
 35.12     Subd. 2.  [REMOVAL OF DIRECTORS.] A director may be removed 
 35.13  at any time, with or without cause, if: 
 35.14     (1) the director was named by the board to fill a vacancy; 
 35.15     (2) the members have not elected directors in the interval 
 35.16  between the time of the appointment to fill a vacancy and the 
 35.17  time of the removal; and 
 35.18     (3) a majority of the remaining directors present 
 35.19  affirmatively vote to remove the director.  
 35.20     Subd. 3.  [REMOVAL BY MEMBERS.] Any one or all of the 
 35.21  directors may be removed at any time, with or without cause, by 
 35.22  the affirmative vote of the holders of a majority of the voting 
 35.23  power of membership interests entitled to vote at an election of 
 35.24  directors; provided that if a director has been elected solely 
 35.25  by the patron members or the holders of a class or series of 
 35.26  membership interests as stated in the articles or bylaws, then 
 35.27  that director may be removed only by the affirmative vote of the 
 35.28  holders of a majority of the voting power of the patron members 
 35.29  for a director elected by the patron members or of all 
 35.30  membership interests of that class or series entitled to vote at 
 35.31  an election of that director.  
 35.32     Subd. 4.  [ELECTION OF REPLACEMENTS.] New directors may be 
 35.33  elected at a meeting at which directors are removed.  
 35.34     Sec. 27.  [308B.425] [BOARD OF DIRECTORS' MEETINGS.] 
 35.35     Subdivision 1.  [TIME AND PLACE.] Meetings of the board may 
 35.36  be held from time to time as provided in the articles or bylaws 
 36.1   at any place within or without the state that the board may 
 36.2   select or by any means described in subdivision 2.  If the board 
 36.3   fails to select a place for a meeting, the meeting must be held 
 36.4   at the principal executive office, unless the articles or bylaws 
 36.5   provide otherwise.  
 36.6      Subd. 2.  [ELECTRONIC COMMUNICATIONS.] (a) A conference 
 36.7   among directors by any means of communication through which the 
 36.8   directors may simultaneously hear each other during the 
 36.9   conference constitutes a board meeting, if the same notice is 
 36.10  given of the conference as would be required by subdivision 3 
 36.11  for a meeting, and if the number of directors participating in 
 36.12  the conference would be sufficient to constitute a quorum at a 
 36.13  meeting.  Participation in a meeting by that means constitutes 
 36.14  presence in person at the meeting.  
 36.15     (b) A director may participate in a board meeting not 
 36.16  described in paragraph (a) by any means of communication through 
 36.17  which the director, other directors so participating, and all 
 36.18  directors physically present at the meeting may simultaneously 
 36.19  hear each other during the meeting.  Participation in a meeting 
 36.20  by that means constitutes presence in person at the meeting.  
 36.21     Subd. 3.  [CALLING MEETINGS AND NOTICE.] Unless the 
 36.22  articles or bylaws provide for a different time period, a 
 36.23  director may call a board meeting by giving at least ten days' 
 36.24  notice or, in the case of organizational meetings, at least 
 36.25  three days' notice to all directors of the date, time, and place 
 36.26  of the meeting.  The notice need not state the purpose of the 
 36.27  meeting unless this chapter, the articles, or the bylaws require 
 36.28  it.  
 36.29     Subd. 4.  [PREVIOUSLY SCHEDULED MEETINGS.] If the day or 
 36.30  date, time, and place of a board meeting have been provided in 
 36.31  the articles or bylaws, or announced at a previous meeting of 
 36.32  the board, no notice is required.  Notice of an adjourned 
 36.33  meeting need not be given other than by announcement at the 
 36.34  meeting at which adjournment is taken.  
 36.35     Subd. 5.  [WAIVER OF NOTICE.] A director may waive notice 
 36.36  of a meeting of the board.  A waiver of notice by a director 
 37.1   entitled to notice is effective whether given before, at, or 
 37.2   after the meeting, and whether given in writing, orally, or by 
 37.3   attendance.  Attendance by a director at a meeting is a waiver 
 37.4   of notice of that meeting, except where the director objects at 
 37.5   the beginning of the meeting to the transaction of business 
 37.6   because the meeting is not lawfully called or convened and does 
 37.7   not participate in the meeting after the objection.  
 37.8      Subd. 6.  [ABSENT DIRECTORS.] If the articles or bylaws so 
 37.9   provide, a director may give advance written consent or 
 37.10  opposition to a proposal to be acted on at a board meeting.  If 
 37.11  the director is not present at the meeting, consent or 
 37.12  opposition to a proposal does not constitute presence for 
 37.13  purposes of determining the existence of a quorum, but consent 
 37.14  or opposition must be counted as the vote of a director present 
 37.15  at the meeting in favor of or against the proposal and must be 
 37.16  entered in the minutes or other record of action at the meeting, 
 37.17  if the proposal acted on at the meeting is substantially the 
 37.18  same or has substantially the same effect as the proposal to 
 37.19  which the director has consented or objected.  
 37.20     Sec. 28.  [308B.431] [QUORUM.] 
 37.21     A majority, or a larger or smaller portion or number 
 37.22  provided in the articles or bylaws, of the directors currently 
 37.23  holding office is a quorum for the transaction of business.  In 
 37.24  the absence of a quorum, a majority of the directors present may 
 37.25  adjourn a meeting from time to time until a quorum is present.  
 37.26  If a quorum is present when a duly called or held meeting is 
 37.27  convened, the directors present may continue to transact 
 37.28  business until adjournment, even though the withdrawal of a 
 37.29  number of directors originally present leaves less than the 
 37.30  proportion of number otherwise required for a quorum.  
 37.31     Sec. 29. [308B.435] [ACT OF BOARD OF DIRECTORS.] 
 37.32     The board shall take action by the affirmative vote of the 
 37.33  greater of (1) a majority of directors present at a duly held 
 37.34  meeting at the time the action is taken, or (2) a majority of 
 37.35  the minimum proportion or number of directors that would 
 37.36  constitute a quorum for the transaction of business at the 
 38.1   meeting, except where this chapter, the articles, or bylaws 
 38.2   require the affirmative vote of a larger proportion or number.  
 38.3   If the articles or bylaws require a larger proportion or number 
 38.4   than is required by this chapter for a particular action, the 
 38.5   articles or bylaws control.  
 38.6      Sec. 30.  [308B.441] [ACTION WITHOUT A MEETING.] 
 38.7      Subdivision 1.  [METHOD.] An action required or permitted 
 38.8   to be taken at a board meeting may be taken by written action 
 38.9   signed by all of the directors.  If the articles or bylaws so 
 38.10  provide, any action, other than an action requiring member 
 38.11  approval, may be taken by written action signed by the number of 
 38.12  directors that would be required to take the same action at a 
 38.13  meeting of the board at which all directors were present.  
 38.14     Subd. 2.  [EFFECTIVE TIME.] The written action is effective 
 38.15  when signed by the required number of directors, unless a 
 38.16  different effective time is provided in the written action. 
 38.17     Subd. 3.  [NOTICE AND LIABILITY.] When written action is 
 38.18  permitted to be taken by less than all directors, all directors 
 38.19  must be notified immediately of its text and effective date.  
 38.20  Failure to provide the notice does not invalidate the written 
 38.21  action.  A director who does not sign or consent to the written 
 38.22  action has no liability for the action or actions taken by the 
 38.23  written action.  
 38.24     Sec. 31.  [308B.445] [AUDIT COMMITTEE.] 
 38.25     The board shall establish an audit committee to review the 
 38.26  financial information and accounting report of the cooperative.  
 38.27  The cooperative shall have the financial information audited for 
 38.28  presentation to the members unless the bylaws allow financial 
 38.29  statements that are not audited and the financial statements 
 38.30  clearly state that they are not audited and the difference 
 38.31  between the financial statements and audited financial 
 38.32  statements that are prepared according to generally accepted 
 38.33  accounting procedures.  The directors shall elect members to the 
 38.34  audit committee.  The audit committee shall ensure an 
 38.35  independent review of the cooperative's finances and audit.  
 38.36     Sec. 32.  [308B.451] [COMMITTEES.] 
 39.1      Subdivision 1.  [GENERALLY.] A resolution approved by the 
 39.2   affirmative vote of a majority of the board may establish 
 39.3   committees having the authority of the board in the management 
 39.4   of the business of the cooperative only to the extent provided 
 39.5   in the resolution.  Committees may include a special litigation 
 39.6   committee consisting of one or more independent directors or 
 39.7   other independent persons to consider legal rights or remedies 
 39.8   of the cooperative and whether those rights and remedies should 
 39.9   be pursued.  Committees other than special litigation committees 
 39.10  are subject at all times to the direction and control of the 
 39.11  board.  
 39.12     Subd. 2.  [MEMBERSHIP.] Committee members must be natural 
 39.13  persons.  Unless the articles or bylaws provide for a different 
 39.14  membership or manner of appointment, a committee consists of one 
 39.15  or more persons, who need not be directors, appointed by 
 39.16  affirmative vote of a majority of the directors present.  
 39.17     Subd. 3.  [PROCEDURE.] The procedures for meetings of the 
 39.18  board apply to committees and members of committees to the same 
 39.19  extent as those sections apply to the board and individual 
 39.20  directors.  
 39.21     Subd. 4.  [MINUTES.] Minutes, if any, of committee meetings 
 39.22  must be made available upon request to members of the committee 
 39.23  and to any director.  
 39.24     Subd. 5.  [STANDARD OF CONDUCT.] The establishment of, 
 39.25  delegation of authority to, and action by a committee does not 
 39.26  alone constitute compliance by a director with the standard of 
 39.27  conduct set forth in section 308B.455.  
 39.28     Subd. 6.  [COMMITTEE MEMBERS CONSIDERED 
 39.29  DIRECTORS.] Committee members are considered to be directors for 
 39.30  purposes of sections 308B.455, 308B.461, and 308B.471.  
 39.31     Sec. 33.  [308B.455] [STANDARD OF CONDUCT.] 
 39.32     Subdivision 1.  [STANDARD AND LIABILITY.] A director shall 
 39.33  discharge the duties of the position of director in good faith, 
 39.34  in a manner the director reasonably believes to be in the best 
 39.35  interests of the cooperative, and with the care an ordinarily 
 39.36  prudent person in a like position would exercise under similar 
 40.1   circumstances.  A person who so performs those duties is not 
 40.2   liable by reason of being or having been a director of the 
 40.3   cooperative.  
 40.4      Subd. 2.  [RELIANCE.] (a) A director is entitled to rely on 
 40.5   information, opinions, reports, or statements, including 
 40.6   financial statements and other financial data, in each case 
 40.7   prepared or presented by: 
 40.8      (1) one or more officers or employees of the cooperative 
 40.9   who the director reasonably believes to be liable and competent 
 40.10  in the matters presented; 
 40.11     (2) counsel, public accountants, or other persons as to 
 40.12  matters that the director reasonably believes are within the 
 40.13  person's professional or expert competence; or 
 40.14     (3) a committee of the board upon which the director does 
 40.15  not serve, duly established by the board, as to matters within 
 40.16  its designated authority, if the director reasonably believes 
 40.17  the committee to merit confidence.  
 40.18     (b) Paragraph (a) does not apply to a director who has 
 40.19  knowledge concerning the matter in question that makes the 
 40.20  reliance otherwise permitted by paragraph (a) unwarranted.  
 40.21     Subd. 3.  [PRESUMPTION OF ASSENT AND DISSENT.] A director 
 40.22  who is present at a meeting of the board when an action is 
 40.23  approved by the affirmative vote of a majority of the directors 
 40.24  present is presumed to have assented to the action approved, 
 40.25  unless the director:  
 40.26     (1) objects at the beginning of the meeting to the 
 40.27  transaction of business because the meeting is not lawfully 
 40.28  called or convened and does not participate in the meeting after 
 40.29  the objection, in which case the director is not considered to 
 40.30  be present at the meeting for any purpose of this chapter; 
 40.31     (2) votes against the action at the meeting; or 
 40.32     (3) is prohibited by a conflict of interest from voting on 
 40.33  the action.  
 40.34     Subd. 4.  [CONSIDERATIONS.] In discharging the duties of 
 40.35  the position of director, a director may, in considering the 
 40.36  best interests of the cooperative, consider the interests of the 
 41.1   cooperative's employees, customers, suppliers, and creditors, 
 41.2   the economy of the state, and long-term as well as short-term 
 41.3   interests of the cooperative and its patron members, including 
 41.4   the possibility that these interests may be best served by the 
 41.5   continued independence of the cooperative.  
 41.6      Sec. 34.  [308B.461] [DIRECTOR CONFLICTS OF INTEREST.] 
 41.7      Subdivision 1.  [CONFLICT AND PROCEDURE WHEN CONFLICT 
 41.8   ARISES.] (a) A contract or other transaction between a 
 41.9   cooperative and one or more of its directors, or between a 
 41.10  cooperative and a business entity in or of which one or more of 
 41.11  its directors are governors, directors, managers, officers, or 
 41.12  legal representatives or have a material financial interest, is 
 41.13  not void or voidable because the director or directors or the 
 41.14  other business entities are parties or because the director or 
 41.15  directors are present at the meeting of the members or the board 
 41.16  or a committee at which the contract or transaction is 
 41.17  authorized, approved, or ratified, if: 
 41.18     (1) the contract or transaction was, and the person 
 41.19  asserting the validity of the contract or transaction sustains 
 41.20  the burden of establishing that the contract or transaction was, 
 41.21  fair and reasonable as to the cooperative at the time it was 
 41.22  authorized, approved, or ratified and: 
 41.23     (i) the material facts as to the contract or transaction 
 41.24  and as to the director's or directors' interest are disclosed or 
 41.25  known to the members; and 
 41.26     (ii) the material facts as to the contract or transaction 
 41.27  and as to the director's or directors' interest are fully 
 41.28  disclosed or known to the board or a committee, and the board or 
 41.29  committee authorizes, approves, or ratifies the contract or 
 41.30  transaction in good faith by a majority of the board or 
 41.31  committee, but the interested director or directors are not 
 41.32  counted in determining the presence of a quorum and must not 
 41.33  vote; or 
 41.34     (2) the contract or transaction is a distribution, 
 41.35  contract, or transaction that is made available to all members 
 41.36  or patron members as part of the cooperative's business.  
 42.1      (b) If a committee is elected or appointed to authorize, 
 42.2   ratify, or approve a contract or transaction under this section, 
 42.3   the members of the committee must not have a conflict of 
 42.4   interest and be charged with representing the best interests of 
 42.5   the cooperative.  
 42.6      Subd. 2.  [MATERIAL FINANCIAL INTEREST.] For purposes of 
 42.7   this section: 
 42.8      (1) a resolution fixing the compensation of a director or 
 42.9   fixing the compensation of another director as a director, 
 42.10  officer, employee, or agent of the cooperative, is not void or 
 42.11  voidable or considered to be a contract or other transaction 
 42.12  between a cooperative and one or more of its directors for 
 42.13  purposes of this section even though the director receiving the 
 42.14  compensation fixed by the resolution is present and voting at 
 42.15  the meeting of the board or a committee at which the resolution 
 42.16  is authorized, approved, or ratified or even though other 
 42.17  directors voting upon the resolution are also receiving 
 42.18  compensation from the cooperative; and 
 42.19     (2) a director has a material financial interest in each 
 42.20  organization in which the director or the spouse; parents; 
 42.21  children and spouses of children; brothers and sisters and 
 42.22  spouses of brothers and sisters; and the brothers and sisters of 
 42.23  the spouse of the director or any combination of them have a 
 42.24  material financial interest.  For purposes of this section, a 
 42.25  contract or other transaction between a cooperative and the 
 42.26  spouse; parents; children and spouses of children; brothers and 
 42.27  sisters and spouses of brothers and sisters; and the brothers 
 42.28  and sisters of the spouse of a director or any combination of 
 42.29  them, is considered to be a transaction between the cooperative 
 42.30  and the director. 
 42.31     Sec. 35.  [308B.465] [LIMITATION OF DIRECTOR'S LIABILITY.] 
 42.32     Subdivision 1.  [ARTICLES MAY LIMIT LIABILITY.] A 
 42.33  director's personal liability to the cooperative or members for 
 42.34  monetary damages for breach of fiduciary duty as a director may 
 42.35  be eliminated or limited in the articles or bylaws except as 
 42.36  provided in subdivision 2. 
 43.1      Subd. 2.  [RESTRICTIONS ON LIABILITY LIMITATION.] The 
 43.2   articles or bylaws may not eliminate or limit the liability of a 
 43.3   director: 
 43.4      (1) for a breach of the director's duty of loyalty to the 
 43.5   cooperative or its members; 
 43.6      (2) for acts or omissions that are not in good faith or 
 43.7   involve intentional misconduct or a knowing violation of law; 
 43.8      (3) for knowing violations of securities laws under section 
 43.9   80A.23 or for illegal distributions; 
 43.10     (4) for a transaction from which the director derived an 
 43.11  improper personal benefit; or 
 43.12     (5) for an act or omission occurring before the date when 
 43.13  the provision in the articles or bylaws eliminating or limiting 
 43.14  liability becomes effective. 
 43.15     Sec. 36.  [308B.471] [INDEMNIFICATION.] 
 43.16     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
 43.17  subdivision apply to this section. 
 43.18     (b) "Cooperative" includes a domestic or foreign 
 43.19  cooperative that was the predecessor of the cooperative referred 
 43.20  to in this section in a merger or other transaction in which the 
 43.21  predecessor's existence ceased upon consummation of the 
 43.22  transaction. 
 43.23     (c) "Official capacity" means: 
 43.24     (1) with respect to a director, the position of director in 
 43.25  a cooperative; 
 43.26     (2) with respect to a person other than a director, the 
 43.27  elective or appointive office or position held by the person, 
 43.28  member of a committee of the board, the employment relationship 
 43.29  undertaken by an employee of the cooperative, or the scope of 
 43.30  the services provided by members of the cooperative who provide 
 43.31  services to the cooperative; and 
 43.32     (3) with respect to a director, chief executive officer, 
 43.33  member, or employee of the cooperative who, while a member, 
 43.34  director, chief executive officer, or employee of the 
 43.35  cooperative, is or was serving at the request of the cooperative 
 43.36  or whose duties in that position involve or involved service as 
 44.1   a governor, director, manager, officer, member, partner, 
 44.2   trustee, employee, or agent of another organization or employee 
 44.3   benefit plan, the position of that person as a governor, 
 44.4   director, manager, officer, member, partner, trustee, employee, 
 44.5   or agent, as the case may be, of the other organization or 
 44.6   employee benefit plan. 
 44.7      (d) "Proceeding" means a threatened, pending, or completed 
 44.8   civil, criminal, administrative, arbitration, or investigative 
 44.9   proceeding, including a proceeding by or in the right of the 
 44.10  cooperative. 
 44.11     (e) "Special legal counsel" means counsel who has not 
 44.12  represented the cooperative or a related organization, or a 
 44.13  director, manager, member of a committee of the board, or 
 44.14  employee whose indemnification is in issue. 
 44.15     Subd. 2.  [INDEMNIFICATION.] (a) Subject to the provisions 
 44.16  of subdivision 4, a cooperative shall indemnify a person made or 
 44.17  threatened to be made a party to a proceeding by reason of the 
 44.18  former or present official capacity of the person against 
 44.19  judgments, penalties, fines, including, without limitation, 
 44.20  excise taxes assessed against the person with respect to an 
 44.21  employee benefit plan, settlements, and reasonable expenses, 
 44.22  including attorney fees and disbursements incurred by the person 
 44.23  in connection with the proceeding, if, with respect to the acts 
 44.24  or omissions of the person complained of in the proceeding, the 
 44.25  person: 
 44.26     (1) has not been indemnified by another organization or 
 44.27  employee benefit plan for the same judgments, penalties, fines, 
 44.28  including, without limitation, excise taxes assessed against the 
 44.29  person with respect to an employee benefit plan, settlements, 
 44.30  and reasonable expenses, including attorney fees and 
 44.31  disbursements incurred by the person in connection with the 
 44.32  proceeding with respect to the same acts or omissions; 
 44.33     (2) acted in good faith; 
 44.34     (3) received no improper personal benefit and the person 
 44.35  has not committed an act for which liability cannot be 
 44.36  eliminated or limited under section 308B.465, subdivision 2; 
 45.1      (4) in the case of a criminal proceeding, had no reasonable 
 45.2   cause to believe the conduct was unlawful; and 
 45.3      (5) in the case of acts or omissions occurring in the 
 45.4   official capacity described in subdivision 1, paragraph (c), 
 45.5   clause (1) or (2), reasonably believed that the conduct was in 
 45.6   the best interests of the cooperative, or in the case of acts or 
 45.7   omissions occurring in the official capacity described in 
 45.8   subdivision 1, paragraph (c), clause (3), reasonably believed 
 45.9   that the conduct was not opposed to the best interests of the 
 45.10  cooperative.  If the person's acts or omissions complained of in 
 45.11  the proceeding relate to conduct at a director, officer, 
 45.12  trustee, employee, or agent of an employee benefit plan, the 
 45.13  conduct is not considered to be opposed to the best interests of 
 45.14  the cooperative if the person reasonably believed that the 
 45.15  conduct was in the best interests of the participants or 
 45.16  beneficiaries of the employee benefit plan. 
 45.17     (b) The termination of a proceeding by judgment, order, 
 45.18  settlement, conviction, or upon a plea of nolo contendere or its 
 45.19  equivalent does not, of itself, establish that the person did 
 45.20  not meet the criteria set forth in this subdivision. 
 45.21     Subd. 3.  [ADVANCES.] Subject to the provisions of 
 45.22  subdivision 4, if a person is made or threatened to be made a 
 45.23  party to a proceeding, the person is entitled, upon written 
 45.24  request to the cooperative, to payment or reimbursement by the 
 45.25  cooperative of reasonable expenses, including attorney fees and 
 45.26  disbursements incurred by the person in advance of the final 
 45.27  disposition of the proceeding: 
 45.28     (1) upon receipt by the cooperative of a written 
 45.29  affirmation by the person of a good faith belief that the 
 45.30  criteria for indemnification set forth in subdivision 2 have 
 45.31  been satisfied, and a written undertaking by the person to repay 
 45.32  all amounts paid or reimbursed by the cooperative, if it is 
 45.33  ultimately determined that the criteria for indemnification have 
 45.34  not been satisfied; and 
 45.35     (2) after a determination that the facts then known to 
 45.36  those making the determination would not preclude 
 46.1   indemnification under this section. 
 46.2      The written undertaking required by clause (1) is an 
 46.3   unlimited general obligation of the person making it, but need 
 46.4   not be secured and shall be accepted without reference to 
 46.5   financial ability to make the repayment. 
 46.6      Subd. 4.  [PROHIBITION OR LIMIT ON INDEMNIFICATION OR 
 46.7   ADVANCES.] The articles or bylaws either may prohibit 
 46.8   indemnification or advances of expenses otherwise required by 
 46.9   this section or may impose conditions on indemnification or 
 46.10  advances of expenses in addition to the conditions contained in 
 46.11  subdivisions 2 and 3, including, without limitation, monetary 
 46.12  limits on indemnification or advances of expenses if the 
 46.13  conditions apply equally to all persons or to all persons within 
 46.14  a given class.  A prohibition or limit on indemnification or 
 46.15  advances of expenses may not apply to or affect the right of a 
 46.16  person to indemnification or advances of expenses with respect 
 46.17  to any acts or omissions of the person occurring before the 
 46.18  effective date of a provision in the articles or the date of 
 46.19  adoption of a provision in the bylaws establishing the 
 46.20  prohibition or limit on indemnification or advances of expenses. 
 46.21     Subd. 5.  [REIMBURSEMENT TO WITNESSES.] This section does 
 46.22  not require, or limit the ability of a cooperative to reimburse 
 46.23  expenses, including attorney fees and disbursements incurred by 
 46.24  a person in connection with an appearance as a witness in a 
 46.25  proceeding at a time when the person has not been made or 
 46.26  threatened to be made a party to a proceeding. 
 46.27     Subd. 6.  [DETERMINATION OF ELIGIBILITY.] (a) All 
 46.28  determinations whether indemnification of a person is required 
 46.29  because the criteria set forth in subdivision 2 have been 
 46.30  satisfied and whether a person is entitled to payment or 
 46.31  reimbursement of expenses in advance of the final disposition of 
 46.32  a proceeding as provided in subdivision 3 must be made: 
 46.33     (1) by the board by a majority of a quorum, if the 
 46.34  directors who are, at the time, parties to the proceeding are 
 46.35  not counted for determining either a majority or the presence of 
 46.36  a quorum; 
 47.1      (2) if a quorum under clause (1) cannot be obtained by a 
 47.2   majority of a committee of the board consisting solely of two or 
 47.3   more directors not at the time parties to the proceeding duly 
 47.4   designated to act in the matter by a majority of the full board, 
 47.5   including directors who are parties; 
 47.6      (3) if a determination is not made under clause (1) or (2) 
 47.7   by special legal counsel selected either by a majority of the 
 47.8   board or a committee by vote under clause (1) or (2) or if the 
 47.9   requisite quorum of the full board cannot be obtained and the 
 47.10  committee cannot be established by a majority of the full board, 
 47.11  including directors who are parties; 
 47.12     (4) if a determination is not made under clauses (1) to (3) 
 47.13  by the affirmative vote of the members, but the membership 
 47.14  interests held by parties to the proceeding must not be counted 
 47.15  in determining the presence of a quorum, and are not considered 
 47.16  to be present and entitled to vote on the determination; or 
 47.17     (5) if an adverse determination is made under clauses (1) 
 47.18  to (4) or paragraph (b), or if no determination is made under 
 47.19  clauses (1) to (4) or paragraph (b) within 60 days after (i) the 
 47.20  later to occur of the termination of a proceeding or a written 
 47.21  request for indemnification to the cooperative, or (ii) a 
 47.22  written request for an advance of expenses, as the case may be, 
 47.23  by a court in this state, which may be the same court in which 
 47.24  the proceeding involving the person's liability took place upon 
 47.25  application of the person and any notice the court requires.  
 47.26  The person seeking indemnification or payment or reimbursement 
 47.27  of expenses under this clause has the burden of establishing 
 47.28  that the person is entitled to indemnification or payment or 
 47.29  reimbursement of expenses.  
 47.30     (b) With respect to a person who is not, and was not at the 
 47.31  time of the acts or omissions complained of in the proceedings, 
 47.32  a director, chief executive officer, or person possessing, 
 47.33  directly or indirectly, the power to direct or cause the 
 47.34  direction of the management or policies of the cooperative, the 
 47.35  determination whether indemnification of this person is required 
 47.36  because the criteria set forth in subdivision 2 have been 
 48.1   satisfied and whether this person is entitled to payment or 
 48.2   reimbursement of expenses in advance of the final disposition of 
 48.3   a proceeding as provided in subdivision 3 may be made by an 
 48.4   annually appointed committee of the board, having at least one 
 48.5   member who is a director.  The committee shall report at least 
 48.6   annually to the board concerning its actions.  
 48.7      Subd. 7.  [INSURANCE.] A cooperative may purchase and 
 48.8   maintain insurance on behalf of a person in that person's 
 48.9   official capacity against any liability asserted against and 
 48.10  incurred by the person in or arising from that capacity, whether 
 48.11  or not the cooperative would have been required to indemnify the 
 48.12  person against the liability under the provisions of this 
 48.13  section.  
 48.14     Subd. 8.  [DISCLOSURE.] A cooperative that indemnifies or 
 48.15  advances expenses to a person in accordance with this section in 
 48.16  connection with a proceeding by or on behalf of the cooperative 
 48.17  shall report to the members in writing the amount of the 
 48.18  indemnification or advance and to whom and on whose behalf it 
 48.19  was paid not later than the next meeting of members.  
 48.20     Subd. 9.  [INDEMNIFICATION OF OTHER PERSONS.] Nothing in 
 48.21  this section must be construed to limit the power of the 
 48.22  cooperative to indemnify persons other than a director, chief 
 48.23  executive officer, member, employee, or member of a committee of 
 48.24  the board of the cooperative by contract or otherwise.  
 48.25     Sec. 37.  [308B.475] [OFFICERS.] 
 48.26     Subdivision 1.  [REQUIRED OFFICERS.] (a) The board shall 
 48.27  elect:  
 48.28     (1) a chair; and 
 48.29     (2) one or more vice chairs.  
 48.30     (b) The board shall elect or appoint: 
 48.31     (1) a records officer; and 
 48.32     (2) a financial officer.  
 48.33     (c) The officers, other than the chief executive officer, 
 48.34  shall not have the authority to bind the cooperative except as 
 48.35  authorized by the board.  
 48.36     Subd. 2.  [ADDITIONAL OFFICERS.] The board may elect 
 49.1   additional officers as the articles or bylaws authorize or 
 49.2   require.  
 49.3      Subd. 3.  [RECORDS OFFICER AND FINANCIAL OFFICER MAY BE 
 49.4   COMBINED.] The offices of records officer and financial officer 
 49.5   may be combined.  
 49.6      Subd. 4.  [OFFICERS THAT MUST BE MEMBERS.] The chair and 
 49.7   first vice chair shall be directors and members.  The financial 
 49.8   officer, records officer, and additional officers need not be 
 49.9   directors or members.  
 49.10     Subd. 5.  [CHIEF EXECUTIVE OFFICER.] The board may employ a 
 49.11  chief executive officer to manage the day-to-day affairs and 
 49.12  business of the cooperative, and if a chief executive officer is 
 49.13  employed, the chief executive officer shall have the authority 
 49.14  to implement the functions, duties, and obligations of the 
 49.15  cooperative except as restricted by the board.  The chief 
 49.16  executive officer shall not exercise authority reserved to the 
 49.17  board or the members under this chapter, the articles, or the 
 49.18  bylaws. 
 49.19                              MEMBERS
 49.20     Sec. 38.  [308B.501] [MEMBERS.] 
 49.21     Subdivision 1.  [REQUIREMENT.] A cooperative shall have one 
 49.22  or more members. 
 49.23     Subd. 2.  [GROUPING OF MEMBERS.] (a) A cooperative may 
 49.24  group members and patron members in districts, units, or on 
 49.25  another basis if and as authorized in its articles or bylaws.  
 49.26  The articles or bylaws may include authorization for the board 
 49.27  to determine the groupings. 
 49.28     (b) The board may implement the use of districts or units, 
 49.29  including setting the time and place and prescribing the rules 
 49.30  of conduct for holding meetings by districts or units to elect 
 49.31  delegates to members' meetings. 
 49.32     Subd. 3.  [MEMBER VIOLATIONS.] (a) A member who knowingly, 
 49.33  intentionally, or repeatedly violates a provision of the 
 49.34  articles, bylaws, member control agreement, or marketing 
 49.35  contract with the cooperative may be required by the board to 
 49.36  surrender the member's voting power or the financial rights of 
 50.1   membership interest of any class owned by the member, or both. 
 50.2      (b) The cooperative shall refund to the member for the 
 50.3   surrendered financial rights of membership interest the lesser 
 50.4   of the book value or market value of the financial right of the 
 50.5   membership interest payable in not more than seven years from 
 50.6   the date of surrender or the board may transfer all of any 
 50.7   patron member's financial rights to a class of financial rights 
 50.8   held by members who are not patron members, or to a certificate 
 50.9   of interest, which carries liquidation rights on par with 
 50.10  membership interests and is redeemed within seven years after 
 50.11  the transfer as provided in the certificate. 
 50.12     (c) Membership interests required to be surrendered may be 
 50.13  reissued or be retired and canceled by the board. 
 50.14     Subd. 4.  [INSPECTION OF COOPERATIVE RECORDS BY 
 50.15  MEMBER.] (a) A member is entitled to inspect and copy, at the 
 50.16  member's expense, during regular business hours at a reasonable 
 50.17  location specified by the cooperative, any of the records 
 50.18  described in section 308B.245 if the member meets the 
 50.19  requirements of paragraph (b) and gives the cooperative written 
 50.20  demand at least five business days before the date on which the 
 50.21  member wishes to inspect and copy the records.  Notwithstanding 
 50.22  the provisions of this subdivision or any provisions of section 
 50.23  308B.245, no member shall have the right to inspect or copy any 
 50.24  records of the cooperative relating to the amount of equity 
 50.25  capital in the cooperative held by any person or any accounts 
 50.26  receivable or other amounts due the cooperative from any person, 
 50.27  or any personnel records or employment records of any employee. 
 50.28     (b) To be entitled to inspect and copy permitted records, 
 50.29  the member shall meet the following requirements: 
 50.30     (1) the member has been a member for at least one year 
 50.31  immediately preceding the demand to inspect or copy or is a 
 50.32  member holding at least five percent of all of the outstanding 
 50.33  equity interests in the cooperative as of the date the demand is 
 50.34  made; 
 50.35     (2) the demand is made in good faith and for a proper 
 50.36  cooperative business purpose; 
 51.1      (3) the member describes with reasonable particularity the 
 51.2   purpose and the records the member desires to inspect; and 
 51.3      (4) the records are directly connected with the described 
 51.4   purpose. 
 51.5      (c) The right of inspection granted by this subdivision 
 51.6   shall not be abolished or limited by the articles, bylaws, or 
 51.7   any actions of the board or the members. 
 51.8      (d) This subdivision does not affect: 
 51.9      (1) the right of a member to inspect records to the same 
 51.10  extent as any other litigant if the member is in litigation with 
 51.11  the cooperative; or 
 51.12     (2) the power of a court to compel the production of the 
 51.13  cooperative's records for examination. 
 51.14     (e) Notwithstanding any other provision in this 
 51.15  subdivision, if the records to be inspected or copied are in 
 51.16  active use or storage and, therefore, not available at the time 
 51.17  otherwise provided for inspection or copying, the cooperative 
 51.18  shall notify the member and shall set a date and hour within 
 51.19  three business days of the date otherwise set in this 
 51.20  subdivision for the inspection or copying. 
 51.21     (f) A member's agent or attorney has the same inspection 
 51.22  and copying rights as the member.  The right to copy records 
 51.23  under this subdivision includes, if reasonable, the right to 
 51.24  receive copies made by photographic copying, xerographic 
 51.25  copying, or other means.  The cooperative may impose a 
 51.26  reasonable charge, covering the costs of labor and material, for 
 51.27  copies of any documents provided to the member.  The charge may 
 51.28  not exceed the estimated cost of production and reproduction of 
 51.29  the records. 
 51.30     (g) If a cooperative refuses to allow a member, or the 
 51.31  member's agent or attorney, who complies with this subdivision 
 51.32  to inspect or copy any records that the member is entitled to 
 51.33  inspect or copy within a prescribed time limit or, if none, 
 51.34  within a reasonable time, the district court of the county in 
 51.35  this state where the cooperative's principal office is located 
 51.36  or, if it has no principal office in this state, the district 
 52.1   court of the county in which its registered office is located 
 52.2   may, on application of the member, summarily order the 
 52.3   inspection or copying of the records demanded at the 
 52.4   cooperative's expense. 
 52.5      (h) If a court orders inspection or copying of the records 
 52.6   demanded, unless the cooperative proves that it refused 
 52.7   inspection or copying in good faith because it had a reasonable 
 52.8   basis for doubt about the right of the member or the member's 
 52.9   agent or attorney to inspect or copy the records demanded: 
 52.10     (1) the court may order the losing party to pay the 
 52.11  prevailing party's reasonable costs, including reasonable 
 52.12  attorney fees; 
 52.13     (2) the court may order the losing party to pay the 
 52.14  prevailing party for any damages the prevailing party shall have 
 52.15  incurred by reason of the subject matter of the litigation; 
 52.16     (3) if inspection or copying is ordered under this 
 52.17  paragraph, the court may order the cooperative to pay the 
 52.18  member's inspection and copying expenses; 
 52.19     (4) the court may grant either party any other remedy 
 52.20  provided by law; and 
 52.21     (5) the court may impose reasonable restrictions on the use 
 52.22  or distribution of the records by the demanding member. 
 52.23     Sec. 39.  [308B.505] [MEMBER NOT LIABLE FOR COOPERATIVE 
 52.24  DEBTS.] 
 52.25     A member is not, merely on the account of that status, 
 52.26  personally liable for the acts, debts, liabilities, or 
 52.27  obligations of a cooperative.  A member is liable for any unpaid 
 52.28  subscription for the membership interest, unpaid membership 
 52.29  fees, or a debt for which the member has separately contracted 
 52.30  with the cooperative. 
 52.31     Sec. 40.  [308B.511] [REGULAR MEMBERS' MEETINGS.] 
 52.32     Subdivision 1.  [ANNUAL MEETING.] Regular members' meetings 
 52.33  shall be held annually at a time determined by the board, unless 
 52.34  otherwise provided for in the bylaws. 
 52.35     Subd. 2.  [LOCATION.] The regular members' meeting shall be 
 52.36  held at the principal place of business of the cooperative or at 
 53.1   another conveniently located place as determined by the bylaws 
 53.2   or the board. 
 53.3      Subd. 3.  [BUSINESS AND FISCAL REPORTS.] The officers shall 
 53.4   submit reports to the members at the regular members' meeting 
 53.5   covering the business of the cooperative for the previous fiscal 
 53.6   year that show the condition of the cooperative at the close of 
 53.7   the fiscal year. 
 53.8      Subd. 4.  [ELECTION OF DIRECTORS.] All directors shall be 
 53.9   elected at the regular members' meeting for the terms of office 
 53.10  prescribed in the bylaws, except for directors elected at 
 53.11  district or unit meetings. 
 53.12     Subd. 5.  [NOTICE.] (a) The cooperative shall give notice 
 53.13  of regular members' meetings by mailing the regular members' 
 53.14  meeting notice to each member at the members' last known post 
 53.15  office address or by other notification approved by the board 
 53.16  and agreed to by the members.  The regular members' meeting 
 53.17  notice shall be published or otherwise given by approved method 
 53.18  at least two weeks before the date of the meeting or mailed at 
 53.19  least 15 days before the date of the meeting. 
 53.20     (b) The notice shall contain a summary of any bylaw 
 53.21  amendments adopted by the board since the last annual meeting. 
 53.22     Subd. 6.  [WAIVER AND OBJECTIONS.] A member may waive 
 53.23  notice of a meeting of members.  A waiver of notice by a member 
 53.24  entitled to notice is effective whether given before, at, or 
 53.25  after the meeting, and whether given in writing, orally, or by 
 53.26  attendance.  Attendance by a member at a meeting is a waiver of 
 53.27  notice of that meeting, except where the member objects at the 
 53.28  beginning of the meeting to the transaction of business because 
 53.29  the meeting is not lawfully called or convened, or objects 
 53.30  before a vote on an item of business because the item may not 
 53.31  lawfully be considered at that meeting and does not participate 
 53.32  in the consideration of the item at that meeting. 
 53.33     Sec. 41.  [308B.515] [SPECIAL MEMBERS' MEETINGS.] 
 53.34     Subdivision 1.  [CALLING MEETING.] Special members' 
 53.35  meetings of the members may be called by: 
 53.36     (1) a majority vote of the board; or 
 54.1      (2) the written petition of at least 20 percent of the 
 54.2   patron members and, if authorized, 20 percent of the nonpatron 
 54.3   members, 20 percent of all members, or members representing 20 
 54.4   percent of the membership interests collectively are submitted 
 54.5   to the chair. 
 54.6      Subd. 2.  [NOTICE.] The cooperative shall give notice of a 
 54.7   special members' meeting by mailing the special members' meeting 
 54.8   notice to each member personally at the person's last known post 
 54.9   office address or an alternative method approved by the board 
 54.10  and the member individually or the members generally.  For a 
 54.11  member that is an entity, notice mailed or delivered by an 
 54.12  alternative method shall be to an officer of the entity.  The 
 54.13  special members' meeting notice shall state the time, place, and 
 54.14  purpose of the special members' meeting.  The special members' 
 54.15  meeting notice shall be issued within ten days from and after 
 54.16  the date of the presentation of a members' petition, and the 
 54.17  special members' meeting shall be held within 30 days after the 
 54.18  date of the presentation of the members' petition. 
 54.19     Subd. 3.  [WAIVER AND OBJECTIONS.] A member may waive 
 54.20  notice of a meeting of members.  A waiver of notice by a member 
 54.21  entitled to notice is effective whether given before, at, or 
 54.22  after the meeting, and whether given in writing, orally, or by 
 54.23  attendance.  Attendance by a member at a meeting is a waiver of 
 54.24  notice of that meeting, except where the member objects at the 
 54.25  beginning of the meeting to the transaction of business because 
 54.26  the meeting is not lawfully called or convened, or objects 
 54.27  before a vote on an item of business because the item may not 
 54.28  lawfully be considered at that meeting and does not participate 
 54.29  in the consideration of the item at that meeting. 
 54.30     Sec. 42.  [308B.521] [CERTIFICATION OF MEETING NOTICE.] 
 54.31     Subdivision 1.  [CERTIFICATE OF MAILING.] After mailing 
 54.32  special or regular members' meeting notices or otherwise 
 54.33  delivering the notices, the cooperative shall execute a 
 54.34  certificate containing the date of mailing or delivery of the 
 54.35  notice and a statement that the special or regular members' 
 54.36  meeting notices were mailed or delivered as prescribed by law. 
 55.1      Subd. 2.  [MATTER OF RECORD.] The certificate shall be made 
 55.2   a part of the record of the meeting. 
 55.3      Subd. 3.  [FAILURE TO RECEIVE MEETING NOTICE.] Failure of a 
 55.4   member to receive a special or regular members' meeting notice 
 55.5   does not invalidate an action taken by the members at a members' 
 55.6   meeting. 
 55.7      Sec. 43.  [308B.525] [QUORUM.] 
 55.8      Subdivision 1.  [QUORUM.] The quorum for a members' meeting 
 55.9   to transact business shall be: 
 55.10     (1) ten percent of the total number of members for a 
 55.11  cooperative with 500 or fewer members; or 
 55.12     (2) 50 members for cooperatives with more than 500 members. 
 55.13     Subd. 2.  [QUORUM FOR VOTING BY MAIL.] In determining a 
 55.14  quorum at a meeting, on a question submitted to a vote by mail 
 55.15  or an alternative method, members present in person or 
 55.16  represented by mail vote or the alternative voting method shall 
 55.17  be counted.  The attendance of a sufficient number of members to 
 55.18  constitute a quorum shall be established by a registration of 
 55.19  the members of the cooperative present at the meeting.  The 
 55.20  registration shall be verified by the chair or the records 
 55.21  officer of the cooperative and shall be reported in the minutes 
 55.22  of the meeting. 
 55.23     Subd. 3.  [MEETING ACTION INVALID WITHOUT QUORUM.] An 
 55.24  action by a cooperative is not valid or legal in the absence of 
 55.25  a quorum at the meeting at which the action was taken. 
 55.26     Sec. 44.  [308B.531] [REMOTE COMMUNICATIONS FOR MEMBER 
 55.27  MEETINGS.] 
 55.28     Subdivision 1.  [CONSTRUCTION AND APPLICATION.] This 
 55.29  section shall be construed and applied to: 
 55.30     (1) facilitate remote communication consistent with other 
 55.31  applicable law; and 
 55.32     (2) be consistent with reasonable practices concerning 
 55.33  remote communication and with the continued expansion of those 
 55.34  practices. 
 55.35     Subd. 2.  [MEMBER MEETINGS HELD SOLELY BY MEANS OF REMOTE 
 55.36  COMMUNICATION.] To the extent authorized in the articles, a 
 56.1   member control agreement, or the bylaws and determined by the 
 56.2   board, a regular or special meeting of members may be held 
 56.3   solely by any combination of means of remote communication 
 56.4   through which the members may participate in the meeting, if 
 56.5   notice of the meeting is given to every owner of membership 
 56.6   interests entitled to vote as would be required by this chapter 
 56.7   for a meeting, and if the membership interests held by the 
 56.8   members participating in the meeting would be sufficient to 
 56.9   constitute a quorum at a meeting.  Participation by a member by 
 56.10  that means constitutes presence at the meeting in person or by 
 56.11  proxy if all the other requirements of this chapter for the 
 56.12  meeting are met. 
 56.13     Subd. 3.  [PARTICIPATION IN MEMBER MEETINGS BY MEANS OF 
 56.14  REMOTE COMMUNICATION.] To the extent authorized in the articles 
 56.15  or the bylaws and determined by the board, a member not 
 56.16  physically present in person or by proxy at a regular or special 
 56.17  meeting of members may, by means of remote communication, 
 56.18  participate in a meeting of members held at a designated place.  
 56.19  Participation by a member by that means constitutes presence at 
 56.20  the meeting in person or by proxy if all the other requirements 
 56.21  of this chapter for the meeting are met. 
 56.22     Subd. 4.  [REQUIREMENTS FOR MEETINGS HELD SOLELY BY MEANS 
 56.23  OF REMOTE COMMUNICATION AND FOR PARTICIPATION BY MEANS OF REMOTE 
 56.24  COMMUNICATION.] In any meeting of members held solely by means 
 56.25  of remote communication under subdivision 2 or in any meeting of 
 56.26  members held at a designated place in which one or more members 
 56.27  participate by means of remote communication under subdivision 3:
 56.28     (1) the cooperative shall implement reasonable measures to 
 56.29  verify that each person deemed present and entitled to vote at 
 56.30  the meeting by means of remote communication is a member; and 
 56.31     (2) the cooperative shall implement reasonable measures to 
 56.32  provide each member participating by means of remote 
 56.33  communication with a reasonable opportunity to participate in 
 56.34  the meeting, including an opportunity to: 
 56.35     (i) read or hear the proceedings of the meeting 
 56.36  substantially concurrently with those proceedings; 
 57.1      (ii) if allowed by the procedures governing the meeting, 
 57.2   have the member's remarks heard or read by other participants in 
 57.3   the meeting substantially concurrently with the making of those 
 57.4   remarks; and 
 57.5      (iii) if otherwise entitled, vote on matters submitted to 
 57.6   the members. 
 57.7      Subd. 5.  [NOTICE TO MEMBERS.] (a) Any notice to members 
 57.8   given by the cooperative under any provision of this chapter, 
 57.9   the articles, or the bylaws by a form of electronic 
 57.10  communication consented to by the member to whom the notice is 
 57.11  given, is effective when given.  The notice is deemed given: 
 57.12     (1) if by facsimile communication, when directed to a 
 57.13  telephone number at which the member has consented to receive 
 57.14  notice; 
 57.15     (2) if by electronic mail, when directed to an electronic 
 57.16  mail address at which the member has consented to receive 
 57.17  notice; 
 57.18     (3) if by a posting on an electronic network on which the 
 57.19  member has consented to receive notice, together with separate 
 57.20  notice to the member of the specific posting, upon the later of: 
 57.21     (i) the posting; and 
 57.22     (ii) the giving of the separate notice; and 
 57.23     (4) if by any other form of electronic communication by 
 57.24  which the member has consented to receive notice, when directed 
 57.25  to the member. 
 57.26     (b) An affidavit of the secretary, other authorized 
 57.27  officer, or authorized agent of the cooperative that the notice 
 57.28  has been given by a form of electronic communication is, in the 
 57.29  absence of fraud, prima facie evidence of the facts stated in 
 57.30  the affidavit. 
 57.31     (c) Consent by a member to notice given by electronic 
 57.32  communication may be given in writing or by authenticated 
 57.33  electronic communication.  The cooperative is entitled to rely 
 57.34  on any consent so given until revoked by the member, provided 
 57.35  that no revocation affects the validity of any notice given 
 57.36  before receipt by the cooperative of revocation of the consent. 
 58.1      Subd. 6.  [REVOCATION.] Any ballot, vote, authorization, or 
 58.2   consent submitted by electronic communication under this chapter 
 58.3   may be revoked by the member submitting the ballot, vote, 
 58.4   authorization, or consent so long as the revocation is received 
 58.5   by a director or the chief executive officer of the cooperative 
 58.6   at or before the meeting or before an action without a meeting 
 58.7   is effective. 
 58.8      Subd. 7.  [WAIVER.] Waiver of notice by a member of a 
 58.9   meeting by means of authenticated electronic communication may 
 58.10  be given in the manner provided for the regular or special 
 58.11  meeting.  Participation in a meeting by means of remote 
 58.12  communication described in subdivisions 2 and 3 is a waiver of 
 58.13  notice of that meeting, except where the member objects at the 
 58.14  beginning of the meeting to the transaction of business because 
 58.15  the meeting is not lawfully called or convened, or objects 
 58.16  before a vote on an item of business because the item may not 
 58.17  lawfully be considered at the meeting and does not participate 
 58.18  in the consideration of the item at that meeting. 
 58.19     Sec. 45.  [308B.535] [ACT OF MEMBERS.] 
 58.20     Subdivision 1.  [ACTION BY AFFIRMATIVE VOTE OF MEMBERS.] (a)
 58.21  The members shall take action by the affirmative vote of the 
 58.22  members of the greater of: 
 58.23     (1) a majority of the voting power of the membership 
 58.24  interests present and entitled to vote on that item of business; 
 58.25  or 
 58.26     (2) a majority of the voting power that would constitute a 
 58.27  quorum for the transaction of business at the meeting, except 
 58.28  where this chapter, the articles or bylaws, or a member control 
 58.29  agreement require a larger proportion. 
 58.30     (b) If the articles, bylaws, or a member control agreement 
 58.31  require a larger proportion than is required by this chapter for 
 58.32  a particular action, the articles, bylaws, or the member control 
 58.33  agreement shall have control over the provisions of this chapter.
 58.34     Subd. 2.  [CLASS OR SERIES OF MEMBERSHIP INTERESTS.] In any 
 58.35  case where a class or series of membership interests is entitled 
 58.36  by this chapter, the articles, bylaws, a member control 
 59.1   agreement, or the terms of the membership interests to vote as a 
 59.2   class or series, the matter being voted upon must also receive 
 59.3   the affirmative vote of the owners of the same proportion of the 
 59.4   membership interests present of that class or series; or of the 
 59.5   total outstanding membership interests of that class or series, 
 59.6   as the proportion required under subdivision 1, unless the 
 59.7   articles, bylaws, or the member control agreement require a 
 59.8   larger proportion.  Unless otherwise stated in the articles, 
 59.9   bylaws, or a member control agreement, in the case of voting as 
 59.10  a class or series, the minimum percentage of the total voting 
 59.11  power of membership interests of the class or series that must 
 59.12  be present is equal to the minimum percentage of all membership 
 59.13  interests entitled to vote required to be present under section 
 59.14  308B.525. 
 59.15     Subd. 3.  [GREATER QUORUM OR VOTING REQUIREMENTS.] (a) The 
 59.16  articles or bylaws adopted by the members may provide for a 
 59.17  greater quorum or voting requirement for members or voting 
 59.18  groups than is provided for by this chapter. 
 59.19     (b) An amendment to the articles or bylaws that adds, 
 59.20  changes, or deletes a greater quorum or voting requirement shall 
 59.21  meet the same quorum requirement and be adopted by the same vote 
 59.22  and voting groups required to take action under the quorum and 
 59.23  voting requirements then in effect or proposed to be adopted, 
 59.24  whichever is greater. 
 59.25     Sec. 46.  [308B.541] [ACTION WITHOUT A MEETING.] 
 59.26     Subdivision 1.  [METHOD.] An action required or permitted 
 59.27  to be taken at a meeting of the members may be taken by written 
 59.28  action signed, or consented to by authenticated electronic 
 59.29  communication, by all of the members.  If the articles, bylaws, 
 59.30  or a member control agreement so provide, any action may be 
 59.31  taken by written action signed, or consented to by authenticated 
 59.32  electronic communication, by the members who own voting power 
 59.33  equal to the voting power that would be required to take the 
 59.34  same action at a meeting of the members at which all members 
 59.35  were present. 
 59.36     Subd. 2.  [EFFECTIVE TIME.] The written action is effective 
 60.1   when signed or consented to by authenticated electronic 
 60.2   communication by the required members, unless a different 
 60.3   effective time is provided in the written action. 
 60.4      Subd. 3.  [NOTICE AND LIABILITY.] When written action is 
 60.5   permitted to be taken by less than all members, all members must 
 60.6   be notified immediately of its text and effective date.  Failure 
 60.7   to provide the notice does not invalidate the written action.  A 
 60.8   member who does not sign or consent to the written action has no 
 60.9   liability for the action or actions taken by the written action. 
 60.10     Sec. 47.  [308B.545] [MEMBER VOTING RIGHTS.] 
 60.11     Subdivision 1.  [MEMBER HAS ONE VOTE; OR PATRONAGE VOTING.] 
 60.12  A patron member of a cooperative is only entitled to one vote on 
 60.13  an issue to be voted upon by members holding patron membership 
 60.14  interests, except that if authorized in the articles or bylaws a 
 60.15  patron member may be entitled to additional votes based on 
 60.16  patronage criteria in section 308B.551.  On any matter of the 
 60.17  cooperative, the entire patron members voting power shall be 
 60.18  voted collectively based upon the vote of the majority of patron 
 60.19  members voting on the issue and the collective vote of the 
 60.20  patron members shall be a majority of the vote cast unless 
 60.21  otherwise provided in the bylaws.  The bylaws may not reduce the 
 60.22  collective patron member vote to less than 15 percent of the 
 60.23  total vote on matters of the cooperative.  A nonpatron member 
 60.24  has the voting rights in accordance to his nonpatron membership 
 60.25  interests as granted in the bylaws, subject to the provisions of 
 60.26  this chapter. 
 60.27     Subd. 2.  [RIGHT TO VOTE AT MEETING.] A member or delegate 
 60.28  may exercise voting rights on any matter that is before the 
 60.29  members as prescribed in the articles or bylaws at a members' 
 60.30  meeting from the time the member or delegate arrives at the 
 60.31  members' meeting, unless the articles or bylaws specify an 
 60.32  earlier and specific time for closing the right to vote. 
 60.33     Subd. 3.  [VOTING METHOD.] A member's vote at a members' 
 60.34  meeting shall be in person or by mail if a mail vote is 
 60.35  authorized by the board or by alternative method if authorized 
 60.36  by the board and not by proxy, except as provided in subdivision 
 61.1   4. 
 61.2      Subd. 4.  [MEMBERS REPRESENTED BY DELEGATES.] (a) The 
 61.3   provisions of this subdivision apply to members represented by 
 61.4   delegates. 
 61.5      (b) A cooperative may provide in the articles or bylaws 
 61.6   that units or districts of members are entitled to be 
 61.7   represented at members' meetings by delegates chosen by the 
 61.8   members of the unit or district.  The delegates may vote on 
 61.9   matters at the members' meeting in the same manner as a member.  
 61.10  The delegates may only exercise the voting rights on a basis and 
 61.11  with the number of votes as prescribed in the articles or bylaws.
 61.12     (c) If the approval of a certain portion of the members is 
 61.13  required for adoption of amendments, a dissolution, a merger, a 
 61.14  consolidation, or a sale of assets, the votes of delegates shall 
 61.15  be counted as votes by the members represented by the delegate. 
 61.16     (d) Patron members may be represented by the proxy of other 
 61.17  patron members. 
 61.18     (e) Nonpatron members may be represented by proxy if 
 61.19  authorized in the bylaws. 
 61.20     Subd. 5.  [ABSENTEE BALLOTS.] (a) The provisions of this 
 61.21  subdivision apply to absentee ballots. 
 61.22     (b) A member who is or will be absent from a members' 
 61.23  meeting may vote by mail or by an approved alternative method on 
 61.24  the ballot prescribed in this subdivision on any motion, 
 61.25  resolution, or amendment that the board submits for vote by mail 
 61.26  or alternative method to the members. 
 61.27     (c) The ballot shall be in the form prescribed by the board 
 61.28  and contain: 
 61.29     (1) the exact text of the proposed motion, resolution, or 
 61.30  amendment to be acted on at the meeting; and 
 61.31     (2) the text of the motion, resolution, or amendment for 
 61.32  which the member may indicate an affirmative or negative vote. 
 61.33     (d) The member shall express a choice by marking an 
 61.34  appropriate choice on the ballot and mail, deliver, or otherwise 
 61.35  submit the ballot to the cooperative in a plain, sealed envelope 
 61.36  inside another envelope bearing the member's name or by an 
 62.1   alternative method approved by the board. 
 62.2      (e) A properly executed ballot shall be accepted by the 
 62.3   board and counted as the vote of the absent member at the 
 62.4   meeting. 
 62.5      Sec. 48.  [308B.551] [PATRON MEMBER VOTING BASED ON 
 62.6   PATRONAGE.] 
 62.7      Subdivision 1.  [PATRON MEMBERS TO HAVE AN ADDITIONAL 
 62.8   VOTE.] A cooperative may authorize by the articles or the bylaws 
 62.9   for patron members to have an additional vote for: 
 62.10     (1) a stipulated amount of business transacted between the 
 62.11  patron member and cooperative; 
 62.12     (2) a stipulated number of patron members in a member 
 62.13  cooperative; 
 62.14     (3) a certain stipulated amount of equity allocated to or 
 62.15  held by a patron member cooperative in the cooperative's central 
 62.16  organization; or 
 62.17     (4) a combination of methods in clauses (1) to (3). 
 62.18     Subd. 2.  [DELEGATES ELECTED BY PATRONS TO HAVE AN 
 62.19  ADDITIONAL VOTE.] A cooperative that is organized into units or 
 62.20  districts of patron members may, by the articles or the bylaws, 
 62.21  authorize the delegates elected by its patron members or have an 
 62.22  additional vote for: 
 62.23     (1) a stipulated amount of business transacted between the 
 62.24  patron members in the units or districts and the cooperative; 
 62.25     (2) a certain stipulated amount of equity allocated to or 
 62.26  held by the patron members of the units or districts of the 
 62.27  cooperative; or 
 62.28     (3) a combination of methods in clauses (1) and (2). 
 62.29     Sec. 49.  [308B.555] [VOTING RIGHTS.] 
 62.30     Subdivision 1.  [DETERMINATION.] The board may fix a date 
 62.31  not more than 60 days, or a shorter time period provided in the 
 62.32  articles or bylaws, before the date of a meeting of members as 
 62.33  the date for the determination of the owners of membership 
 62.34  interests entitled to notice of and entitled to vote at the 
 62.35  meeting.  When a date is so fixed, only members on that date are 
 62.36  entitled to notice of and permitted to vote at that meeting of 
 63.1   members. 
 63.2      Subd. 2.  [VOTING POWER.] Unless otherwise provided in the 
 63.3   articles, bylaws, or a member control agreement, members have 
 63.4   voting power as provided in section 308B.545. 
 63.5      Subd. 3.  [NONMEMBERS.] The articles or bylaws may give or 
 63.6   prescribe the manner of giving a creditor, security holder, or 
 63.7   other person a right to vote on patron membership interests 
 63.8   under this section. 
 63.9      Subd. 4.  [JOINTLY OWNED MEMBERSHIP INTERESTS.] Membership 
 63.10  interests owned by two or more members may be voted by any one 
 63.11  of them unless the cooperative receives written notice from any 
 63.12  one of them denying the authority of that person to vote those 
 63.13  membership interests. 
 63.14     Subd. 5.  [MANNER OF VOTING AND PRESUMPTION.] Except as 
 63.15  provided in subdivision 4, an owner of a nonpatron membership 
 63.16  interest or a patron membership interest with more than one vote 
 63.17  that is entitled to vote may vote any portion of the membership 
 63.18  interest in any way the member chooses.  If a member votes 
 63.19  without designating the proportion voted in a particular way, 
 63.20  the member is considered to have voted all of the membership 
 63.21  interest in that way. 
 63.22     Sec. 50.  [308B.561] [VOTING BY ORGANIZATIONS AND LEGAL 
 63.23  REPRESENTATIVES.] 
 63.24     Subdivision 1.  [MEMBERSHIP INTERESTS HELD BY ANOTHER 
 63.25  ORGANIZATION.] Membership interests of a cooperative reflected 
 63.26  in the required records as being owned by another domestic or 
 63.27  foreign business entity may be voted by the chair, chief 
 63.28  executive officer, or another legal representative of that 
 63.29  organization. 
 63.30     Subd. 2.  [MEMBERSHIP INTERESTS HELD BY SUBSIDIARY.] Except 
 63.31  as provided in subdivision 3, membership interests of a 
 63.32  cooperative reflected in the required records as being owned by 
 63.33  a subsidiary are not entitled to be voted on any matter. 
 63.34     Subd. 3.  [MEMBERSHIP INTERESTS CONTROLLED IN A FIDUCIARY 
 63.35  CAPACITY.] Membership interests of a cooperative in the name of, 
 63.36  or under the control of, the cooperative or a subsidiary in a 
 64.1   fiduciary capacity are not entitled to be voted on any matter, 
 64.2   except to the extent that the settlor or beneficiary possesses 
 64.3   and exercises a right to vote or gives the cooperative or, with 
 64.4   respect to membership interests in the name of or under control 
 64.5   of a subsidiary, the subsidiary, binding instructions on how to 
 64.6   vote the membership interests. 
 64.7      Subd. 4.  [VOTING BY CERTAIN REPRESENTATIVES.] Subject to 
 64.8   section 308B.545, membership interests under the control of a 
 64.9   person in a capacity as a personal representative, an 
 64.10  administrator, executor, guardian, conservator, or the like may 
 64.11  be voted by the person, either in person or by proxy, without 
 64.12  reflecting in the required records those membership interests in 
 64.13  the name of the person. 
 64.14     Subd. 5.  [VOTING BY TRUSTEES IN BANKRUPTCY OR 
 64.15  RECEIVER.] Membership interests reflected in the required 
 64.16  records in the name of a trustee in bankruptcy or a receiver may 
 64.17  be voted by the trustee or receiver either in person or by 
 64.18  proxy.  Membership interests under the control of a trustee in 
 64.19  bankruptcy or a receiver may be voted by the trustee or receiver 
 64.20  without reflecting in the required records the name of the 
 64.21  trustee or receiver, if authority to do so is contained in an 
 64.22  appropriate order of the court by which the trustee or receiver 
 64.23  was appointed.  The right to vote of trustees in bankruptcy and 
 64.24  receivers is subject to section 308B.545. 
 64.25     Subd. 6.  [MEMBERSHIP INTERESTS HELD BY OTHER 
 64.26  ORGANIZATIONS.] Membership interests reflected in the required 
 64.27  records in the name of a business entity not described in 
 64.28  subdivisions 1 to 5 may be voted either in person or by proxy by 
 64.29  the legal representative of that business entity. 
 64.30     Subd. 7.  [GRANT OF SECURITY INTEREST.] The grant of a 
 64.31  security interest in a membership interest does not entitle the 
 64.32  holders of the security interest to vote. 
 64.33     Sec. 51.  [308B.565] [PROXIES.] 
 64.34     Subdivision 1.  [AUTHORIZATION.] (a) A patron member may 
 64.35  only grant a proxy to vote to another patron member. 
 64.36     (b) A member may cast or authorize the casting of a vote by:
 65.1      (1) filing a written appointment of a proxy with the board 
 65.2   at or before the meeting at which the appointment is to be 
 65.3   effective; or 
 65.4      (2) telephonic transmission or authenticated electronic 
 65.5   communication, whether or not accompanied by written 
 65.6   instructions of the member, of an appointment of a proxy with 
 65.7   the cooperative or the cooperative's duly authorized agent at or 
 65.8   before the meeting at which the appointment is to be effective. 
 65.9      (c) The telephonic transmission or authenticated electronic 
 65.10  communication must set forth or be submitted with information 
 65.11  from which it can be determined that the appointment was 
 65.12  authorized by the member.  If it is reasonably concluded that 
 65.13  the telephonic transmission or authenticated electronic 
 65.14  communication is valid, the inspectors of election or, if there 
 65.15  are not inspectors, the other persons making that determination 
 65.16  shall specify the information upon which they relied to make 
 65.17  that determination.  A proxy so appointed may vote on behalf of 
 65.18  the member, or otherwise participate, in a meeting by remote 
 65.19  communication under section 308B.531, to the extent the member 
 65.20  appointing the proxy would have been entitled to participate by 
 65.21  remote communication if the member did not appoint the proxy. 
 65.22     (d) A copy, facsimile, telecommunication, or other 
 65.23  reproduction of the original writing or transmission may be 
 65.24  substituted or used in lieu of the original writing or 
 65.25  transmission for any purpose for which the original transmission 
 65.26  could be used, if the copy, facsimile, telecommunication, or 
 65.27  other reproduction is a complete and legible reproduction of the 
 65.28  entire original writing or transmission. 
 65.29     (e) An appointment of a proxy for membership interests 
 65.30  owned jointly by two or more members is valid if signed or 
 65.31  consented to by authenticated electronic communication, by any 
 65.32  one of them, unless the cooperative receives from any one of 
 65.33  those members written notice or an authenticated electronic 
 65.34  communication either denying the authority of that person to 
 65.35  appoint a proxy or appointing a different proxy. 
 65.36     Subd. 2.  [DURATION.] The appointment of a proxy is valid 
 66.1   for 11 months unless a longer period is expressly provided in 
 66.2   the appointment.  No appointment is irrevocable unless the 
 66.3   appointment is coupled with an interest in the membership 
 66.4   interests or the cooperative. 
 66.5      Subd. 3.  [TERMINATION.] An appointment may be terminated 
 66.6   at will unless the appointment is coupled with an interest, in 
 66.7   which case it shall not be terminated except in accordance with 
 66.8   the terms of an agreement, if any, between the parties to the 
 66.9   appointment.  Termination may be made by filing written notice 
 66.10  of the termination of the appointment with a manager of the 
 66.11  cooperative or by filing a new written appointment of a proxy 
 66.12  with a manager of the cooperative.  Termination in either manner 
 66.13  revokes all prior proxy appointments and is effective when filed 
 66.14  with a manager of the cooperative. 
 66.15     Subd. 4.  [REVOCATION BY DEATH OR INCAPACITY.] The death or 
 66.16  incapacity of a person appointing a proxy does not revoke the 
 66.17  authority of the proxy, unless written notice of the death or 
 66.18  incapacity is received by a manager of the cooperative before 
 66.19  the proxy exercises the authority under that appointment. 
 66.20     Subd. 5.  [MULTIPLE PROXIES.] Unless the appointment 
 66.21  specifically provides otherwise, if two or more persons are 
 66.22  appointed as proxies for a member: 
 66.23     (1) any one of them may vote the membership interests on 
 66.24  each item of business in accordance with specific instructions 
 66.25  contained in the appointment; and 
 66.26     (2) if no specific instructions are contained in the 
 66.27  appointment with respect to voting the membership interests on a 
 66.28  particular item of business, the membership interests must be 
 66.29  voted as a majority of the proxies determine.  If the proxies 
 66.30  are equally divided, the membership interests must not be voted. 
 66.31     Subd. 6.  [VOTE OF PROXY ACCEPTED AND LIABILITY.] Unless 
 66.32  the appointment of a proxy contains a restriction, limitation, 
 66.33  or specific reservation of authority, the cooperative may accept 
 66.34  a vote or action taken by a person named in the appointment.  
 66.35  The vote of a proxy is final, binding, and not subject to 
 66.36  challenge, but the proxy is liable to the member for damages 
 67.1   resulting from a failure to exercise the proxy or from an 
 67.2   exercise of the proxy in violation of the authority granted in 
 67.3   the appointment. 
 67.4      Subd. 7.  [LIMITED AUTHORITY.] If a proxy is given 
 67.5   authority by a member to vote on less than all items of business 
 67.6   considered at a meeting of members, the member is considered to 
 67.7   be present and entitled to vote by the proxy only with respect 
 67.8   to those items of business for which the proxy has authority to 
 67.9   vote.  A proxy who is given authority by a member who abstains 
 67.10  with respect to an item of business is considered to have 
 67.11  authority to vote on the item of business for purposes of this 
 67.12  subdivision. 
 67.13     Sec. 52.  [308B.571] [SALE OF PROPERTY AND ASSETS.] 
 67.14     Subdivision 1.  [MEMBER APPROVAL NOT REQUIRED.] A 
 67.15  cooperative may, by affirmative vote of a majority of the board 
 67.16  present, upon those terms and conditions and for those 
 67.17  considerations, which may be money, securities, or other 
 67.18  instruments for the payment of money or other property, as the 
 67.19  board considers expedient and without member approval: 
 67.20     (1) sell, lease, transfer, or otherwise dispose of all or 
 67.21  substantially all of its property and assets in the usual and 
 67.22  regular course of its business; 
 67.23     (2) sell, lease, transfer, or otherwise dispose of all or 
 67.24  substantially all of its property and assets not in the usual 
 67.25  and regular course of its business if: 
 67.26     (i) the cooperative's accountant has given an opinion that 
 67.27  the cooperative cannot continue as an ongoing business and the 
 67.28  cooperative is under financial duress; 
 67.29     (ii) the cooperative has given notice to the members of the 
 67.30  impending or potential disposition prior to the disposition; and 
 67.31     (iii) the board has determined that failure to proceed with 
 67.32  the disposition would be adverse to the interests of the members 
 67.33  and the cooperative; 
 67.34     (3) grant a security interest in all or substantially all 
 67.35  of its property and assets whether or not in the usual and 
 67.36  regular course of its business; 
 68.1      (4) transfer any or all of its property to a business 
 68.2   entity all the ownership interests of which are owned by the 
 68.3   cooperative; or 
 68.4      (5) for purposes of debt financing, transfer any or all of 
 68.5   its property to a special purpose entity owned or controlled by 
 68.6   the cooperative for an asset securitization. 
 68.7      Subd. 2.  [MEMBER APPROVAL REQUIRED.] Except as provided in 
 68.8   subdivision 1, a cooperative, by affirmative vote of a majority 
 68.9   of the board present, may sell, lease, transfer, or otherwise 
 68.10  dispose of all or substantially all of its property and assets, 
 68.11  including its good will, not in the usual and regular course of 
 68.12  its business, upon those terms and conditions and for those 
 68.13  considerations, which may be money, securities, or other 
 68.14  instruments for the payment of money or other property, as the 
 68.15  board considers expedient, when approved at a regular or special 
 68.16  meeting of the members by the affirmative vote of the owners of 
 68.17  a majority of the voting power of the interests entitled to 
 68.18  vote.  Written notice of the meeting must be given to all 
 68.19  members whether or not they are entitled to vote at the 
 68.20  meeting.  The written notice must state that a purpose of the 
 68.21  meeting is to consider the sale, lease, transfer, or other 
 68.22  disposition of all or substantially all of the property and 
 68.23  assets of the cooperative. 
 68.24     Subd. 3.  [CONFIRMATORY DOCUMENTS.] Confirmatory deeds, 
 68.25  assignments, or similar instruments to evidence a sale, lease, 
 68.26  transfer, or other disposition may be signed and delivered at 
 68.27  any time in the name of the transferor by its current chair of 
 68.28  the board or authorized agents. 
 68.29     Subd. 4.  [LIABILITY OF TRANSFEREE.] The transferee is 
 68.30  liable for the debts, obligations, and liabilities of the 
 68.31  transferor only to the extent provided in the contract or 
 68.32  agreement between the transferee and the transferor or to the 
 68.33  extent provided by law. 
 68.34     Sec. 53.  [308B.575] [VOTE OF OWNERSHIP INTERESTS HELD BY 
 68.35  COOPERATIVE.] 
 68.36     A cooperative that holds ownership interests of another 
 69.1   business entity may, by direction of the cooperative's board, 
 69.2   elect or appoint a person to represent the cooperative at a 
 69.3   meeting of the business entity.  The representative has 
 69.4   authority to represent the cooperative and may cast the 
 69.5   cooperative's vote at the business entity's meeting. 
 69.6                         MEMBERSHIP INTERESTS
 69.7      Sec. 54.  [308B.601] [MEMBERSHIP INTERESTS.] 
 69.8      Subdivision 1.  [AMOUNTS AND DIVISIONS OF MEMBERSHIP 
 69.9   INTERESTS.] The authorized amount and divisions of patron 
 69.10  membership interests and, if authorized, nonpatron membership 
 69.11  interests may be increased, decreased, established, or altered, 
 69.12  in accordance with the restrictions in this chapter by amending 
 69.13  the articles or bylaws at a regular members' meeting or at a 
 69.14  special members' meeting called for the purpose of the amendment.
 69.15     Subd. 2.  [ISSUANCE OF MEMBERSHIP INTERESTS.] Authorized 
 69.16  membership interests may be issued on terms and conditions 
 69.17  prescribed in the articles, bylaws, or if authorized in the 
 69.18  articles or bylaws as determined by the board.  The cooperative 
 69.19  shall disclose to any person or entity acquiring membership 
 69.20  interests to be issued by the cooperative, the organization, 
 69.21  capital structure, and known business prospects and risks of the 
 69.22  cooperative, the nature of the governance and financial rights 
 69.23  of the membership interest being acquired and of other classes 
 69.24  of membership and membership interests.  The cooperative shall 
 69.25  notify all members of the membership interests being issued by 
 69.26  the cooperative.  A membership interest may not be issued until 
 69.27  the subscription price of the membership interest has been paid 
 69.28  for in money or property with the value of the property to be 
 69.29  contributed approved by the board. 
 69.30     Subd. 3.  [PATRON MEMBERSHIP INTERESTS.] The patron 
 69.31  membership interests collectively shall have not less than 50 
 69.32  percent of the cooperative's financial rights to profit 
 69.33  allocations and distributions.  If authorized in the original 
 69.34  articles as filed, or articles or bylaws adopted by an 
 69.35  affirmative vote of the patron members, or the articles or 
 69.36  bylaws are amended by the affirmative vote of patron members, 
 70.1   then the cooperative's financial rights to profit allocations 
 70.2   and distributions to patron members collectively may be not less 
 70.3   than 15 percent. 
 70.4      Subd. 4.  [TRANSFERRING OR SELLING MEMBERSHIP 
 70.5   INTERESTS.] After issuance by the cooperative, membership 
 70.6   interests in a cooperative may only be sold or transferred with 
 70.7   the approval of the board.  The board may adopt resolutions 
 70.8   prescribing procedures to prospectively approve transfers. 
 70.9      Subd. 5.  [NONPATRON MEMBERSHIP INTERESTS.] If authorized 
 70.10  by the articles, the cooperative may solicit and issue nonpatron 
 70.11  membership interests on terms and conditions determined by the 
 70.12  board and disclosed in the articles, bylaws, or by separate 
 70.13  disclosure to the members.  Each member acquiring nonpatron 
 70.14  membership interests shall sign a member control agreement or 
 70.15  agree to the conditions of the bylaws, either of which shall 
 70.16  describe the rights and obligations of the member as it relates 
 70.17  to the nonpatron membership interests, the financial and 
 70.18  governance rights, the transferability of the nonpatron 
 70.19  membership interests, the division and allocations of profits 
 70.20  and losses among the membership interests and membership 
 70.21  classes, and financial rights upon liquidation.  If the articles 
 70.22  or bylaws do not otherwise provide for the allocation of the 
 70.23  profits and losses between patron membership interests and 
 70.24  nonpatron membership interests, then the allocation of profits 
 70.25  and losses among nonpatron membership interests individually and 
 70.26  patron membership interests collectively shall be allocated on 
 70.27  the basis of the value of contributions to capital made 
 70.28  according to the patron membership interests collectively and 
 70.29  the nonpatron membership interests individually to the extent 
 70.30  the contributions have been accepted by the cooperative.  
 70.31  Distributions of cash or other assets of the cooperative shall 
 70.32  be allocated among the membership interests as provided in the 
 70.33  articles and bylaws, subject to the provisions of this chapter.  
 70.34  If not otherwise provided in the articles or bylaws, 
 70.35  distributions shall be made on the basis of value of the capital 
 70.36  contributions of the patron membership interests collectively 
 71.1   and the nonpatron membership interests to the extent the 
 71.2   contributions have been accepted by the cooperative. 
 71.3      Subd. 6.  [COOPERATIVE FIRST RIGHT TO PURCHASE MEMBERSHIP 
 71.4   INTERESTS.] The articles or bylaws may provide that the 
 71.5   cooperative or the patron members, individually or collectively, 
 71.6   have the first privilege of purchasing the membership interests 
 71.7   of any class of membership interests offered for sale.  The 
 71.8   first privilege to purchase membership interests may be 
 71.9   satisfied by notice to other members that the membership 
 71.10  interests are for sale and a procedure by which members may 
 71.11  proceed to attempt to purchase and acquire the membership 
 71.12  interests.  A membership interest acquired by the cooperative 
 71.13  may be held to be reissued or may be retired and canceled. 
 71.14     Subd. 7.  [PAYMENT FOR NONPATRON MEMBERSHIP 
 71.15  INTERESTS.] Subject to the provisions in the articles and 
 71.16  bylaws, a member may dissent from and obtain payment for the 
 71.17  fair value of the member's nonpatron membership interests in the 
 71.18  cooperative if the articles or bylaws are amended in a manner 
 71.19  that materially and adversely affects the rights and preferences 
 71.20  of the nonpatron membership interests of the dissenting member.  
 71.21  The dissenting member shall file a notice of intent to demand 
 71.22  fair value of the membership interest with the records officer 
 71.23  of the cooperative within 30 days after the amendment of the 
 71.24  bylaws and notice of the amendment to members, otherwise the 
 71.25  right of the dissenting member to demand payment of fair value 
 71.26  for the membership interest is waived.  If a proposed amendment 
 71.27  of the articles or bylaws must be approved by the members, a 
 71.28  member who is entitled to dissent and who wishes to exercise 
 71.29  dissenter's rights shall file a notice to demand fair value of 
 71.30  the membership interest with the records officer of the 
 71.31  cooperative before the vote on the proposed action and shall not 
 71.32  vote in favor of the proposed action, otherwise the right to 
 71.33  demand fair value for the membership interest by the dissenting 
 71.34  member is waived.  After receipt of the dissenting member's 
 71.35  demand notice and approval of the amendment, the cooperative has 
 71.36  60 days to rescind the amendment or otherwise the cooperative 
 72.1   shall remit the fair value for the member's interest to the 
 72.2   dissenting member by 180 days after receipt of the notice.  Upon 
 72.3   receipt of the fair value for the membership interest, the 
 72.4   member has no further member rights in the cooperative. 
 72.5      Sec. 55.  [308B.605] [ASSIGNMENT OF FINANCIAL RIGHTS.] 
 72.6      Subdivision 1.  [ASSIGNMENT OF FINANCIAL RIGHTS PERMITTED.] 
 72.7   Except as provided in subdivision 3, a member's financial rights 
 72.8   are transferable in whole or in part. 
 72.9      Subd. 2.  [EFFECT OF ASSIGNMENT OF FINANCIAL RIGHTS.] An 
 72.10  assignment of a member's financial rights entitles the assignee 
 72.11  to receive, to the extent assigned, only the share of profits 
 72.12  and losses and the distributions to which the assignor would 
 72.13  otherwise be entitled.  An assignment of a member's financial 
 72.14  rights does not dissolve the cooperative and does not entitle or 
 72.15  empower the assignee to become a member, to exercise any 
 72.16  governance rights, to receive any notices from the cooperative, 
 72.17  or to cause dissolution.  The assignment shall not allow the 
 72.18  assignee to control the member's exercise of governance or 
 72.19  voting rights. 
 72.20     Subd. 3.  [RESTRICTIONS OF ASSIGNMENT OF FINANCIAL 
 72.21  RIGHTS.] (a) A restriction on the assignment of financial rights 
 72.22  may be imposed in the articles, in the bylaws, in a member 
 72.23  control agreement, by a resolution adopted by the members, by an 
 72.24  agreement among or other written action by the members, or by an 
 72.25  agreement among or other written action by the members and the 
 72.26  cooperative.  A restriction is not binding with respect to 
 72.27  financial rights reflected in the required records before the 
 72.28  adoption of the restriction, unless the owners of those 
 72.29  financial rights are parties to the agreement or voted in favor 
 72.30  of the restriction. 
 72.31     (b) Subject to paragraph (c), a written restriction on the 
 72.32  assignment of financial rights that is not manifestly 
 72.33  unreasonable under the circumstances and is noted conspicuously 
 72.34  in the required records may be enforced against the owner of the 
 72.35  restricted financial rights or a successor or transferee of the 
 72.36  owner, including a pledgee or a legal representative.  Unless 
 73.1   noted conspicuously in the required records, a restriction, even 
 73.2   though permitted by this section, is ineffective against a 
 73.3   person without knowledge of the restriction. 
 73.4      (c) With regard to restrictions on the assignment of 
 73.5   financial rights, a would-be assignee of financial rights is 
 73.6   entitled to rely on a statement of membership interest issued by 
 73.7   the cooperative under section 308B.611.  A restriction on the 
 73.8   assignment of financial rights, which is otherwise valid and in 
 73.9   effect at the time of the issuance of a statement of membership 
 73.10  interest but which is not reflected in that statement, is 
 73.11  ineffective against an assignee who takes an assignment in 
 73.12  reliance on the statement. 
 73.13     (d) Notwithstanding any provision of law, articles, bylaws, 
 73.14  member control agreement, other agreement, resolution, or action 
 73.15  to the contrary, a security interest in a member's financial 
 73.16  rights may be foreclosed and otherwise enforced, and a secured 
 73.17  party may assign a member's financial rights in accordance with 
 73.18  chapter 336, without the consent or approval of the member whose 
 73.19  financial rights are subject to the security interest. 
 73.20     Sec. 56.  [308B.611] [NATURE OF A MEMBERSHIP INTEREST AND 
 73.21  STATEMENT OF INTEREST OWNED.] 
 73.22     Subdivision 1.  [GENERALLY.] A membership interest is 
 73.23  personal property.  A member has no interest in specific 
 73.24  cooperative property.  All property of the cooperative is 
 73.25  property of the cooperative itself. 
 73.26     Subd. 2.  [STATEMENT OF MEMBERSHIP INTEREST.] At the 
 73.27  request of any member, the cooperative shall state in writing 
 73.28  the particular membership interest owned by that member as of 
 73.29  the date the cooperative makes the statement.  The statement 
 73.30  must describe the member's rights to vote, if any, to share in 
 73.31  profits and losses, and to share in distributions, restrictions 
 73.32  on assignments of financial rights under section 308B.605, 
 73.33  subdivision 3, or voting rights under section 308B.555 then in 
 73.34  effect, as well as any assignment of the member's rights then in 
 73.35  effect other than a security interest. 
 73.36     Subd. 3.  [TERMS OF MEMBERSHIP INTERESTS.] All the 
 74.1   membership interests of a cooperative must: 
 74.2      (1) be of one class, without series, unless the articles or 
 74.3   bylaws establish or authorize the board to establish more than 
 74.4   one class or series within classes; 
 74.5      (2) be ordinary patron membership interests and if 
 74.6   authorized nonpatron membership interest subject to this chapter 
 74.7   entitled to vote as provided in section 308B.555, and have equal 
 74.8   rights and preferences in all matters not otherwise provided for 
 74.9   by the board and to the extent that the articles or bylaws have 
 74.10  fixed the relative rights and preferences of different classes 
 74.11  and series; and 
 74.12     (3) share profits and losses and are entitled to 
 74.13  distributions as provided in sections 308B.721 and 308B.725. 
 74.14     Subd. 4.  [RIGHTS OF JUDGMENT CREDITOR.] On application to 
 74.15  a court of competent jurisdiction by any judgment creditor of a 
 74.16  member, the court may charge a member's or an assignee's 
 74.17  financial rights with payment of the unsatisfied amount of the 
 74.18  judgment with interest.  To the extent so charged, the judgment 
 74.19  creditor has only the rights of an assignee of a member's 
 74.20  financial rights under section 308B.605.  This chapter does not 
 74.21  deprive any member or assignee of financial rights of the 
 74.22  benefit of any exemption laws applicable to the membership 
 74.23  interest.  This section is the sole and exclusive remedy of a 
 74.24  judgment creditor with respect to the judgment debtor's 
 74.25  membership interest. 
 74.26     Subd. 5.  [PROCEDURE FOR FIXING TERMS.] (a) Subject to any 
 74.27  restrictions in the articles or bylaws, the power granted in 
 74.28  this subdivision may be exercised by a resolution or resolutions 
 74.29  establishing a class or series, setting forth the designation of 
 74.30  the class or series, and fixing the relative rights and 
 74.31  preferences of the class or series.  Any of the rights and 
 74.32  preferences of a class or series established in the articles, 
 74.33  bylaws, or by resolution of the board: 
 74.34     (1) may be made dependent upon facts ascertainable outside 
 74.35  the articles or bylaws or outside the resolution or resolutions 
 74.36  establishing the class or series, if the manner in which the 
 75.1   facts operate upon the rights and preferences of the class or 
 75.2   series is clearly and expressly set forth in the articles or 
 75.3   bylaws or in the resolution or resolutions establishing the 
 75.4   class or series; and 
 75.5      (2) may include by reference some or all of the terms of 
 75.6   any agreements, contracts, or other arrangements entered into by 
 75.7   the cooperative in connection with the establishment of the 
 75.8   class or series if the cooperative retains at its principal 
 75.9   executive office a copy of the agreements, contracts, or other 
 75.10  arrangements or the portions will be included by reference. 
 75.11     (b) A statement setting forth the name of the cooperative 
 75.12  and the text of the resolution and certifying the adoption of 
 75.13  the resolution and the date of adoption must be given to the 
 75.14  members before the acceptance of any contributions for which the 
 75.15  resolution creates rights or preferences not set forth in the 
 75.16  articles or bylaws.  Where the members have received notice of 
 75.17  the creation of membership interests with rights or preferences 
 75.18  not set forth in the articles or bylaws before the acceptance of 
 75.19  the contributions with respect to the membership interests, the 
 75.20  statement may be filed any time within one year after the 
 75.21  acceptance of the contributions.  The resolution is effective 
 75.22  three days after delivery to the members is deemed effective by 
 75.23  the board, or, if the statement is not required to be given to 
 75.24  the members before the acceptance of contributions, on the date 
 75.25  of its adoption by the directors. 
 75.26     Subd. 6.  [SPECIFIC TERMS.] Without limiting the authority 
 75.27  granted in this section, a cooperative may have membership 
 75.28  interests of a class or series: 
 75.29     (1) subject to the right of the cooperative to redeem any 
 75.30  of those membership interests at the price fixed for their 
 75.31  redemption by the articles or bylaws or by the board; 
 75.32     (2) entitling the members to cumulative, partially 
 75.33  cumulative, or noncumulative distributions; 
 75.34     (3) having preference over any class or series of 
 75.35  membership interests for the payment of distributions of any or 
 75.36  all kinds; 
 76.1      (4) convertible into membership interests of any other 
 76.2   class or any series of the same or another class; or 
 76.3      (5) having full, partial, or no voting rights, except as 
 76.4   provided in section 308B.555. 
 76.5      Subd. 7.  [GRANT OF A SECURITY INTEREST.] For the purpose 
 76.6   of any law relating to security interests, membership interests, 
 76.7   governance or voting rights, and financial rights are each to be 
 76.8   characterized as provided in section 336.8-103, paragraph (c). 
 76.9      Subd. 8.  [POWERS OF ESTATE OF A DECEASED OR INCOMPETENT 
 76.10  MEMBER.] (a) If a member who is an individual dies or a court of 
 76.11  competent jurisdiction adjudges the member to be incompetent to 
 76.12  manage the member's person or property, or an order for relief 
 76.13  under the bankruptcy code is entered with respect to the member, 
 76.14  the member's executor, administrator, guardian, conservator, 
 76.15  trustee, or other legal representative may exercise all of the 
 76.16  member's rights for the purpose of settling the estate or 
 76.17  administering the member's property.  If a member is a business 
 76.18  entity, trust, or other entity and is dissolved, terminated, or 
 76.19  placed by a court in receivership or bankruptcy, the powers of 
 76.20  that member may be exercised by its legal representative or 
 76.21  successor. 
 76.22     (b) If an event referred to in paragraph (a) causes the 
 76.23  termination of a member's membership interest and the 
 76.24  termination does not result in dissolution, then subject to the 
 76.25  articles and bylaws: 
 76.26     (1) as provided in section 308B.605, the terminated 
 76.27  member's interest will be considered to be merely that of an 
 76.28  assignee of the financial rights owned before the termination of 
 76.29  membership; and 
 76.30     (2) the rights to be exercised by the legal representative 
 76.31  of the terminated member will be limited accordingly. 
 76.32     Subd. 9.  [LIABILITY OF SUBSCRIBERS AND MEMBERS WITH 
 76.33  RESPECT TO MEMBERSHIP INTERESTS.] A subscriber for membership 
 76.34  interests or a member of a cooperative is under no obligation to 
 76.35  the cooperative or its creditors with respect to the membership 
 76.36  interests subscribed for or owned, except to pay to the 
 77.1   cooperative the full consideration for which the membership 
 77.2   interests are issued or to be issued. 
 77.3      Sec. 57.  [308B.615] [CERTIFICATED MEMBERSHIP INTERESTS.] 
 77.4      Subdivision 1.  [CERTIFICATED; UNCERTIFICATED.] The 
 77.5   membership interests of a cooperative shall be either 
 77.6   certificated or uncertificated.  Each holder of certificated 
 77.7   membership interests issued is entitled to a certificate of 
 77.8   membership interest.  
 77.9      Subd. 2.  [SIGNATURE REQUIRED.] Certificates shall be 
 77.10  signed by an agent or officer authorized in the articles or 
 77.11  bylaws to sign share certificates or, in the absence of an 
 77.12  authorization, by the chair or records officer of the 
 77.13  cooperative.  
 77.14     Subd. 3.  [SIGNATURE VALID.] If a person signs or has a 
 77.15  facsimile signature placed upon a certificate while the chair, 
 77.16  an officer, transfer agent, or records officer of a cooperative, 
 77.17  the certificate may be issued by the cooperative, even if the 
 77.18  person has ceased to have that capacity before the certificate 
 77.19  is issued, with the same effect as if the person had that 
 77.20  capacity at the date of its issue.  
 77.21     Subd. 4.  [FORM OF CERTIFICATE.] A certificate representing 
 77.22  membership interests of a cooperative shall contain on its face: 
 77.23     (1) the name of the cooperative; 
 77.24     (2) a statement that the cooperative is organized under the 
 77.25  laws of this state and this chapter; 
 77.26     (3) the name of the person to whom the certificate is 
 77.27  issued; 
 77.28     (4) the number and class of membership interests, and the 
 77.29  designation of the series, if any, that the certificate 
 77.30  represents; 
 77.31     (5) a statement that the membership interests in the 
 77.32  cooperative are subject to the articles and bylaws of the 
 77.33  cooperative; and 
 77.34     (6) any restrictions on transfer, including approval of the 
 77.35  board, if applicable, first rights of purchase by the 
 77.36  cooperative, and other restrictions on transfer, which may be 
 78.1   stated by reference to the back of the certificate or to another 
 78.2   document.  
 78.3      Subd. 5.  [LIMITATIONS SET FORTH.] A certificate 
 78.4   representing membership interest issued by a cooperative 
 78.5   authorized to issue membership interests of more than one class 
 78.6   or series shall set forth upon the face or back of the 
 78.7   certificate, or shall state that the cooperative will furnish to 
 78.8   any member upon request and without charge, a full statement of 
 78.9   the designations, preferences, limitations, and relative rights 
 78.10  of the membership interests of each class or series authorized 
 78.11  to be issued, so far as they have been determined, and the 
 78.12  authority of the board to determine the relative rights and 
 78.13  preferences of subsequent classes or series.  
 78.14     Subd. 6.  [PRIMA FACIE EVIDENCE.] A certificate signed as 
 78.15  provided in subdivision 2 is prima facie evidence of the 
 78.16  ownership of the membership interests referred to in the 
 78.17  certificate.  
 78.18     Subd. 7.  [UNCERTIFICATED MEMBERSHIP INTERESTS.] Unless 
 78.19  uncertificated membership interests are prohibited by the 
 78.20  articles or bylaws, a resolution approved by the affirmative 
 78.21  vote of a majority of the directors present may provide that 
 78.22  some or all of any or all classes and series of its membership 
 78.23  interests will be uncertificated membership interests.  The 
 78.24  resolution does not apply to membership interests represented by 
 78.25  a certificate until the certificate is surrendered to the 
 78.26  cooperative.  Within a reasonable time after the issuance or 
 78.27  transfer of uncertificated membership interests, the cooperative 
 78.28  shall send to the new member the information required by this 
 78.29  section to be stated on certificates.  This information is not 
 78.30  required to be sent to the new holder by a publicly held 
 78.31  cooperative that has adopted a system of issuance, recordation, 
 78.32  and transfer of its membership interests by electronic or other 
 78.33  means not involving an issuance of certificates if the system 
 78.34  complies with section 17A of the Securities Exchange Act of 
 78.35  1934.  Except as otherwise expressly provided by statute, the 
 78.36  rights and obligations of the holders of certificated and 
 79.1   uncertificated membership interests of the same class and series 
 79.2   are identical.  
 79.3      Sec. 58.  [308B.621] [LOST CERTIFICATES; REPLACEMENT.] 
 79.4      Subdivision 1.  [ISSUANCE.] A new membership interest 
 79.5   certificate may be issued under section 336.8-405 in place of 
 79.6   one that is alleged to have been lost, stolen, or destroyed.  
 79.7      Subd. 2.  [NOT OVERISSUE.] The issuance of a new 
 79.8   certificate under this section does not constitute an overissue 
 79.9   of the membership interests it represents.  
 79.10     Sec. 59.  [308B.625] [RESTRICTION ON TRANSFER OR 
 79.11  REGISTRATION OF MEMBERSHIP INTERESTS.] 
 79.12     Subdivision 1.  [HOW IMPOSED.] A restriction on the 
 79.13  transfer or registration of transfer of membership interests of 
 79.14  a cooperative may be imposed in the articles, in the bylaws, by 
 79.15  a resolution adopted by the members, or by an agreement among or 
 79.16  other written action by a number of members or holders of other 
 79.17  membership interests or among them and the cooperative.  A 
 79.18  restriction is not binding with respect to membership interests 
 79.19  issued prior to the adoption of the restriction, unless the 
 79.20  holders of those membership interests are parties to the 
 79.21  agreement or voted in favor of the restriction.  
 79.22     Subd. 2.  [RESTRICTIONS PERMITTED.] A written restriction 
 79.23  on the transfer or registration of transfer of membership 
 79.24  interests of a cooperative that is not manifestly unreasonable 
 79.25  under the circumstances may be enforced against the holder of 
 79.26  the restricted membership interests or a successor or transferee 
 79.27  of the holder, including a pledgee or a legal representative, if 
 79.28  the restriction is either: 
 79.29     (1) noted conspicuously on the face or back of the 
 79.30  certificate; 
 79.31     (2) included in this chapter or the articles or bylaws; or 
 79.32     (3) included in information sent to the holders of 
 79.33  uncertificated membership interests.  
 79.34  Unless a restriction is in this chapter, the articles, bylaws, 
 79.35  noted conspicuously on the face or back of the certificate, or 
 79.36  included in information sent to the holders of uncertificated 
 80.1   membership interests, a restriction, even though permitted by 
 80.2   this section, is ineffective against a person without knowledge 
 80.3   of the restriction.  A restriction under this section is deemed 
 80.4   to be noted conspicuously and is effective if the existence of 
 80.5   the restriction is stated on the certificate and reference is 
 80.6   made to a separate document creating or describing the 
 80.7   restriction.  
 80.8            CONTRIBUTIONS, ALLOCATIONS, AND DISTRIBUTIONS
 80.9      Sec. 60.  [308B.701] [AUTHORIZATION, FORM, AND ACCEPTANCE 
 80.10  OF CONTRIBUTIONS.] 
 80.11     Subdivision 1.  [BOARD OF DIRECTORS MAY AUTHORIZE.] Subject 
 80.12  to any restrictions in this chapter regarding patron and 
 80.13  nonpatron membership interests or in the articles or bylaws, and 
 80.14  only when authorized by the board, a cooperative may accept 
 80.15  contributions, which may be patron or nonpatron membership 
 80.16  contributions as determined by the board under subdivisions 2 
 80.17  and 3, make contribution agreements under section 308B.711, and 
 80.18  make contribution allowance agreements under section 308B.715. 
 80.19     Subd. 2.  [PERMISSIBLE FORMS.] A person may make a 
 80.20  contribution to a cooperative: 
 80.21     (1) by paying money or transferring the ownership of an 
 80.22  interest in property to the cooperative or rendering services to 
 80.23  or for the benefit of the cooperative; or 
 80.24     (2) through a written obligation signed by the person to 
 80.25  pay money or transfer ownership of an interest in property to 
 80.26  the cooperative or to perform services to or for the benefit of 
 80.27  the cooperative.  
 80.28     Subd. 3.  [ACCEPTANCE OF CONTRIBUTIONS.] No purported 
 80.29  contribution is to be treated or considered as a contribution, 
 80.30  unless: 
 80.31     (1) the board accepts the contribution on behalf of the 
 80.32  cooperative and in that acceptance describes the contribution, 
 80.33  including terms of future performance, if any, and states the 
 80.34  value being accorded to the contribution; and 
 80.35     (2) the fact of contribution and the contribution's 
 80.36  accorded value are both reflected in the required records of the 
 81.1   cooperative.  
 81.2      Subd. 4.  [VALUATION.] The determinations of the board as 
 81.3   to the amount or fair value or the fairness to the cooperative 
 81.4   of the contribution accepted or to be accepted by the 
 81.5   cooperative or the terms of payment or performance, including 
 81.6   under a contribution agreement in section 308B.711, and a 
 81.7   contribution allowance agreement in section 308B.715, are 
 81.8   presumed to be proper if they are made in good faith and on the 
 81.9   basis of accounting methods, or a fair valuation or other 
 81.10  method, reasonable in the circumstances.  Directors who are 
 81.11  present and entitled to vote, and who, intentionally or without 
 81.12  reasonable investigation, fail to vote against approving a 
 81.13  consideration that is unfair to the cooperative, or overvalue 
 81.14  property or services received or to be received by the 
 81.15  cooperative as a contribution, are jointly and severally liable 
 81.16  to the cooperative for the benefit of the then members who did 
 81.17  not consent to and are damaged by the action, to the extent of 
 81.18  the damages of those members.  A director against whom a claim 
 81.19  is asserted under this subdivision, except in case of knowing 
 81.20  participation in a deliberate fraud, is entitled to contribution 
 81.21  on an equitable basis from other directors who are liable under 
 81.22  this subdivision.  
 81.23     Sec. 61.  [308B.705] [RESTATEMENT OF VALUE OF PREVIOUS 
 81.24  CONTRIBUTIONS.] 
 81.25     Subdivision 1.  [DEFINITION.] As used in this section, an 
 81.26  "old contribution" is a contribution reflected in the required 
 81.27  records of a cooperative before the time the cooperative accepts 
 81.28  a new contribution.  
 81.29     Subd. 2.  [RESTATEMENT REQUIRED.] Whenever a cooperative 
 81.30  accepts a new contribution, the board shall restate, as required 
 81.31  by this section, the value of all old contributions.  
 81.32     Subd. 3.  [RESTATEMENT AS TO PARTICULAR SERIES OR CLASS TO 
 81.33  WHICH NEW CONTRIBUTION PERTAINS.] (a) Unless otherwise provided 
 81.34  in the articles or bylaws, this subdivision sets forth the 
 81.35  method of restating the value of old contributions that pertain 
 81.36  to the same series or class to which the new contribution 
 82.1   pertains.  To restate the value:  
 82.2      (1) state the value the cooperative has accorded to the new 
 82.3   contribution under section 308B.701, subdivision 3, clause (1); 
 82.4      (2) determine what percentage the value stated under clause 
 82.5   (1) will constitute, after the restatement required by this 
 82.6   subdivision, of the total value of all contributions that 
 82.7   pertain to the particular series or class to which the new 
 82.8   contribution pertains; 
 82.9      (3) divide the value stated under clause (1) by the 
 82.10  percentage determined under clause (2), yielding the total 
 82.11  value, after the restatement required by this subdivision, of 
 82.12  all contributions pertaining to the particular series or class; 
 82.13     (4) subtract the value stated under clause (1) from the 
 82.14  value determined under clause (3), yielding the total value, 
 82.15  after the restatement required by this subdivision, of all the 
 82.16  old contributions pertaining to the particular series or class; 
 82.17     (5) subtract the value, as reflected in the required 
 82.18  records before the restatement required by this subdivision, of 
 82.19  the old contributions from the value determined under clause 
 82.20  (4), yielding the value to be allocated among and added to the 
 82.21  old contributions pertaining to the particular series or class; 
 82.22  and 
 82.23     (6) allocate the value determined under clause (5) 
 82.24  proportionally among the old contributions pertaining to the 
 82.25  particular series or class, add the allocated values to those 
 82.26  old contributions, and change the required records accordingly.  
 82.27     (b) The values determined under clause (5) and allocated 
 82.28  and added under clause (6) may be positive, negative, or zero.  
 82.29     Subd. 4.  [RESTATEMENT METHOD FOR OTHER SERIES OR CLASS.] 
 82.30  Unless otherwise provided in the articles or bylaws, this 
 82.31  subdivision sets forth the method of restating the value of old 
 82.32  contributions that do not pertain to the same series or class to 
 82.33  which the new contribution pertains.  To restate the value:  
 82.34     (1) determine the percentage by which the restatement under 
 82.35  subdivision 3 has changed the total contribution value reflected 
 82.36  in the required records for the series or class to which the new 
 83.1   contribution pertains; and 
 83.2      (2) as to each old contribution that does not pertain to 
 83.3   the same series or class to which the new contribution pertains, 
 83.4   change the value reflected in the required records by the 
 83.5   percentage determined under clause (1).  The percentage 
 83.6   determined under clause (1) may be positive, negative, or zero.  
 83.7      Subd. 5.  [NEW CONTRIBUTIONS MAY BE AGGREGATED.] If a 
 83.8   cooperative accepts more than one contribution pertaining to the 
 83.9   same series or class at the same time, then for the purpose of 
 83.10  the restatement required by this section, the cooperative may 
 83.11  consider all the new contributions a single contribution.  
 83.12     Sec. 62.  [308B.711] [CONTRIBUTION AGREEMENTS.] 
 83.13     Subdivision 1.  [SIGNED WRITING.] A contribution agreement, 
 83.14  whether made before or after the formation of the cooperative, 
 83.15  is not enforceable against the would-be contributor unless it is 
 83.16  in writing and signed by the would-be contributor.  
 83.17     Subd. 2.  [IRREVOCABLE PERIOD.] Unless otherwise provided 
 83.18  in the contribution agreement, or unless all of the would-be 
 83.19  contributors and, if in existence, the cooperative, consent to a 
 83.20  shorter or longer period, a contribution agreement is 
 83.21  irrevocable for a period of six months.  
 83.22     Subd. 3.  [CURRENT AND DEFERRED PAYMENT.] A contribution 
 83.23  agreement, whether made before or after the formation of a 
 83.24  cooperative, must be paid or performed in full at the time or 
 83.25  times, or in the installments, if any, specified in the 
 83.26  contribution agreement.  In the absence of a provision in the 
 83.27  contribution agreement specifying the time at which the 
 83.28  contribution is to be paid or performed, the contribution must 
 83.29  be paid or performed at the time or times determined by the 
 83.30  board, but a call made by the board for payment or performance 
 83.31  on contributions must be uniform for all membership interests of 
 83.32  the same class or for all membership interests of the same 
 83.33  series.  
 83.34     Subd. 4.  [FAILURE TO PAY REMEDIES.] (a) Unless otherwise 
 83.35  provided in the contribution agreement, in the event of default 
 83.36  in the payment or performance of an installment or call when 
 84.1   due, the cooperative may proceed to collect the amount due in 
 84.2   the same manner as a debt due the cooperative.  If a would-be 
 84.3   contributor does not make a required contribution of property or 
 84.4   services, the cooperative shall require the would-be contributor 
 84.5   to contribute cash equal to that portion of the value, as stated 
 84.6   in the cooperative required records, of the contribution that 
 84.7   has not been made.  
 84.8      (b) If the amount due under a contribution agreement 
 84.9   remains unpaid for a period of 20 days after written notice of 
 84.10  demand for payment has been given to the delinquent would-be 
 84.11  contributor, the membership interests that were subject to the 
 84.12  contribution agreement may be offered for sale by the 
 84.13  cooperative for a price in money equaling or exceeding the sum 
 84.14  of the full balance owed by the delinquent would-be contributor 
 84.15  plus the expenses incidental to the sale.  
 84.16     If the membership interests that were subject to the 
 84.17  contribution agreement are sold according to this paragraph, the 
 84.18  cooperative shall pay to the delinquent would-be contributor or 
 84.19  to the delinquent would-be contributor's legal representative 
 84.20  the lesser of:  
 84.21     (1) the excess of net proceeds realized by the cooperative 
 84.22  over the sum of the amount owed by the delinquent would-be 
 84.23  contributor plus the expenses incidental to the sale, less any 
 84.24  penalty stated in the contribution agreement, which may include 
 84.25  forfeiture of the partial contribution; and 
 84.26     (2) the amount actually paid by the delinquent would-be 
 84.27  contributor.  
 84.28  If the membership interests that were subject to the 
 84.29  contribution agreement are not sold according to this paragraph, 
 84.30  the cooperative may collect the amount due in the same manner as 
 84.31  a debt due the cooperative or cancel the contribution agreement 
 84.32  according to paragraph (c).  
 84.33     (c) If the amount due under a contribution agreement 
 84.34  remains unpaid for a period of 20 days after written notice of 
 84.35  demand for payment has been given to the delinquent would-be 
 84.36  contributor and the membership interests that were subject to 
 85.1   the defaulted contribution agreement have not been sold 
 85.2   according to paragraph (b), the cooperative may cancel the 
 85.3   contribution agreement, the cooperative may retain any portion 
 85.4   of the contribution agreement price actually paid as provided in 
 85.5   the contribution agreement, and the cooperative shall refund to 
 85.6   the delinquent would-be contributor or the delinquent would-be 
 85.7   contributor's legal representatives any portion of the 
 85.8   contribution agreement price as provided in the contribution 
 85.9   agreement.  
 85.10     Subd. 5.  [RESTRICTIONS ON ASSIGNMENT.] Unless otherwise 
 85.11  provided in the articles or bylaws, a would-be contributor's 
 85.12  rights under a contribution agreement may not be assigned, in 
 85.13  whole or in part, to a person who was not a member at the time 
 85.14  of the assignment, unless all the members approve the assignment 
 85.15  by unanimous written consent.  
 85.16     Sec. 63.  [308B.715] [CONTRIBUTION RIGHTS AGREEMENTS.] 
 85.17     Subdivision 1.  [AGREEMENTS PERMITTED.] Subject to any 
 85.18  restrictions in the articles or bylaws, a cooperative may enter 
 85.19  into contribution rights agreements under the terms, provisions, 
 85.20  and conditions fixed by the board.  
 85.21     Subd. 2.  [WRITING REQUIRED AND TERMS TO BE STATED.] Any 
 85.22  contribution rights agreement must be in writing and the writing 
 85.23  must state in full, summarize, or include by reference all the 
 85.24  agreement's terms, provisions, and conditions of the rights to 
 85.25  make contributions.  
 85.26     Subd. 3.  [RESTRICTIONS ON ASSIGNMENT.] Unless otherwise 
 85.27  provided in the articles or bylaws, a would-be contributor's 
 85.28  rights under a contribution rights agreement may not be 
 85.29  assigned, in whole or in part, to a person who was not a member 
 85.30  at the time of the assignment, unless all the members approve 
 85.31  the assignment by unanimous written consent.  
 85.32     Sec. 64.  [308B.721] [ALLOCATIONS AND DISTRIBUTIONS TO 
 85.33  MEMBERS.] 
 85.34     Subdivision 1.  [ALLOCATION OF PROFITS AND LOSSES.] The 
 85.35  bylaws shall prescribe the allocation of profits and losses 
 85.36  between patron membership interests collectively and any other 
 86.1   membership interests.  If the bylaws do not otherwise provide, 
 86.2   the profits and losses between patron membership interests 
 86.3   collectively and other membership interests shall be allocated 
 86.4   on the basis of the value of contributions to capital made by 
 86.5   the patron membership interests collectively and other 
 86.6   membership interests and accepted by the cooperative.  The 
 86.7   allocation of profits to the patron membership interests 
 86.8   collectively shall not be less than 50 percent of the total 
 86.9   profits in any fiscal year, except that if authorized in the 
 86.10  original articles as filed or in articles or bylaws that are 
 86.11  adopted by an affirmative vote of the patron members or the 
 86.12  articles or bylaws are amended by the affirmative vote of the 
 86.13  patron members, the allocation of profits to the patron 
 86.14  membership interests collectively may not be less than 15 
 86.15  percent of the total profits in any fiscal year.  
 86.16     Subd. 2.  [DISTRIBUTION OF CASH OR OTHER ASSETS.] The 
 86.17  bylaws shall prescribe the distribution of cash or other assets 
 86.18  of the cooperative among the membership interests of the 
 86.19  cooperative.  If not otherwise provided in the bylaws, 
 86.20  distribution shall be made to the patron membership interests 
 86.21  collectively and other members on the basis of the value of 
 86.22  contributions to capital made and accepted by the cooperative, 
 86.23  by the patron membership interests collectively, and other 
 86.24  membership interests.  The distributions to patron membership 
 86.25  interests collectively shall not be less than 50 percent of the 
 86.26  total distributions in any fiscal year, except that if 
 86.27  authorized in the articles or bylaws adopted by the affirmative 
 86.28  vote of the patron members, or the articles or bylaws are 
 86.29  amended by the affirmative vote of the patron members, the 
 86.30  distributions to patron membership interests collectively shall 
 86.31  not be less than 15 percent of the total distributions in any 
 86.32  year.  
 86.33     Sec. 65.  [308B.725] [ALLOCATIONS AND DISTRIBUTIONS TO 
 86.34  PATRON MEMBERS.] 
 86.35     Subdivision 1.  [DISTRIBUTION OF NET INCOME.] A cooperative 
 86.36  may set aside a portion of net income allocated to the patron 
 87.1   membership interests as the board determines advisable to create 
 87.2   or maintain a capital reserve.  
 87.3      Subd. 2.  [RESERVES.] In addition to a capital reserve, the 
 87.4   board may, for patron membership interests:  
 87.5      (1) set aside an amount not to exceed five percent of the 
 87.6   annual net income of the cooperative for promoting and 
 87.7   encouraging cooperative organization; and 
 87.8      (2) establish and accumulate reserves for new buildings, 
 87.9   machinery and equipment, depreciation, losses, and other proper 
 87.10  purposes.  
 87.11     Subd. 3.  [PATRONAGE DISTRIBUTIONS.] Net income allocated 
 87.12  to patron members in excess of dividends on equity and additions 
 87.13  to reserves shall be distributed to patron members on the basis 
 87.14  of patronage.  A cooperative may establish allocation units, 
 87.15  whether the units are functional, divisional, departmental, 
 87.16  geographic, or otherwise and pooling arrangements and may 
 87.17  account for and distribute net income to patrons on the basis of 
 87.18  allocation units and pooling arrangements.  A cooperative may 
 87.19  offset the net loss of an allocation unit or pooling arrangement 
 87.20  against the net income of other allocation units or pooling 
 87.21  arrangements.  
 87.22     Subd. 4.  [FREQUENCY OF DISTRIBUTION.] Distribution of net 
 87.23  income shall be made at least annually.  The board shall present 
 87.24  to the members at their annual meeting a report covering the 
 87.25  operations of the cooperative during the preceding fiscal year.  
 87.26     Subd. 5.  [FORM OF DISTRIBUTION.] A cooperative may 
 87.27  distribute net income to patron members in cash, capital 
 87.28  credits, allocated patronage equities, revolving fund 
 87.29  certificates, or its own or other securities.  
 87.30     Subd. 6.  [ELIGIBLE NONMEMBER PATRONS.] The cooperative may 
 87.31  provide in the bylaws that nonmember patrons are allowed to 
 87.32  participate in the distribution of net income payable to patron 
 87.33  members on equal terms with patron members.  
 87.34     Subd. 7.  [PATRONAGE CREDITS FOR INELIGIBLE MEMBERS.] If a 
 87.35  nonmember patron with patronage credits is not qualified or 
 87.36  eligible for membership, a refund due may be credited to the 
 88.1   patron's individual account.  The board may issue a certificate 
 88.2   of interest to reflect the credited amount.  After the patron is 
 88.3   issued a certificate of interest, the patron may participate in 
 88.4   the distribution of income on the same basis as a patron member. 
 88.5      Sec. 66.  [308B.731] [MEMBER CONTROL AGREEMENTS.] 
 88.6      Subdivision 1.  [AUTHORIZATION.] A written agreement among 
 88.7   persons who are then members, including a sole member, or who 
 88.8   have signed subscription or contribution agreements, relating to 
 88.9   the control of any phase of the business and affairs of the 
 88.10  cooperative, its liquidation, dissolution and termination, or 
 88.11  the relations among members or persons who have signed 
 88.12  subscription or contribution agreements is valid as provided in 
 88.13  subdivision 2.  Wherever this chapter provides that a particular 
 88.14  result may or must be obtained through a provision in the 
 88.15  articles or bylaws, the same result can be accomplished through 
 88.16  a member control agreement valid under this section or through a 
 88.17  procedure established by a member control agreement valid under 
 88.18  this section.  
 88.19     Subd. 2.  [VALID EXECUTION.] Other than patron member 
 88.20  voting control under section 308B.545 and patron member 
 88.21  allocation and distribution provisions under sections 308B.721 
 88.22  and 308B.725, a written agreement among persons described in 
 88.23  subdivision 1 that relates to the control of or the liquidation, 
 88.24  dissolution, and termination of the cooperative; the relations 
 88.25  among them; or any phase of the business and affairs of the 
 88.26  cooperative, including, without limitation, the management of 
 88.27  its business; the declaration and payment of distributions; the 
 88.28  sharing of profits and losses; the election of directors; the 
 88.29  employment of members by the cooperative; or the arbitration of 
 88.30  disputes, is valid, if the agreement is signed by all persons 
 88.31  who are then the members of the cooperative, whether or not the 
 88.32  members all have voting power, and all those who have signed 
 88.33  contribution agreements, regardless of whether those signatories 
 88.34  will, when members, have voting power.  
 88.35     Subd. 3.  [OTHER AGREEMENTS NOT AFFECTED.] This section 
 88.36  does not apply to, limit, or restrict agreements otherwise 
 89.1   valid, nor is the procedure set forth in this section the 
 89.2   exclusive method of agreement among members or between the 
 89.3   members and the cooperative with respect to any of the matters 
 89.4   described.  
 89.5      Sec. 67.  [308B.735] [DISTRIBUTION OF UNCLAIMED PROPERTY.] 
 89.6      Subdivision 1.  [ALTERNATE PROCEDURE TO DISBURSE PROPERTY.] 
 89.7   A cooperative may, in lieu of paying or delivering to the state 
 89.8   the unclaimed property specified in its report of unclaimed 
 89.9   property, distribute the unclaimed property to a business entity 
 89.10  or organization that is exempt from taxation.  A cooperative 
 89.11  making the election to distribute unclaimed property shall file 
 89.12  with the secretary of state:  
 89.13     (1) a verified written explanation of the proof of claim of 
 89.14  an owner establishing a right to receive the abandoned property; 
 89.15     (2) any error in the presumption of abandonment; 
 89.16     (3) the name, address, and exemption number of the business 
 89.17  entity or organization to which the property was or is to be 
 89.18  distributed; and 
 89.19     (4) the approximate date of distribution.  
 89.20     Subd. 2.  [REPORTING AND CLAIMING PROCEDURE NOT 
 89.21  AFFECTED.] This subdivision does not alter the procedure 
 89.22  provided by law for cooperatives to report unclaimed property to 
 89.23  the state and the requirement that claims of owners are made to 
 89.24  the cooperatives for a period following the publication of lists 
 89.25  of abandoned property.  
 89.26     Subd. 3.  [OWNER'S RIGHT EXTINGUISHED ON DISBURSEMENT.] The 
 89.27  right of an owner to unclaimed property held by a cooperative is 
 89.28  extinguished when the property is disbursed by the cooperative 
 89.29  to a tax exempt organization in accordance with this section.  
 89.30                               MERGER  
 89.31     Sec. 68.  [308B.801] [MERGER AND CONSOLIDATION.] 
 89.32     Subdivision 1.  [AUTHORIZATION.] Unless otherwise 
 89.33  prohibited, cooperatives organized under the laws of this state, 
 89.34  including cooperatives organized under this chapter or chapter 
 89.35  308A, may merge or consolidate with each other or other business 
 89.36  entities organized under the laws of another state by complying 
 90.1   with the provisions of this section and the law of the state 
 90.2   where the surviving or new business entity will exist.  A 
 90.3   cooperative may not merge or consolidate with a business entity 
 90.4   organized under the laws of this state, other than a cooperative 
 90.5   organized under chapter 308A, unless the law governing the 
 90.6   business entity expressly authorizes merger or consolidation 
 90.7   with a cooperative.  This subdivision does not authorize a 
 90.8   foreign business entity to do any act not authorized by the law 
 90.9   governing the foreign business entity. 
 90.10     Subd. 2.  [PLAN.] To initiate a merger or consolidation of 
 90.11  a cooperative, a written plan of merger or consolidation shall 
 90.12  be prepared by the board or by a committee selected by the board 
 90.13  to prepare a plan.  The plan shall state: 
 90.14     (1) the names of the constituent domestic cooperatives and 
 90.15  any foreign business entities; 
 90.16     (2) the name of the surviving or new domestic cooperative 
 90.17  or foreign business entity; 
 90.18     (3) the manner and basis of converting membership or 
 90.19  ownership interests of the constituent domestic cooperatives or 
 90.20  foreign business entities into membership or ownership interests 
 90.21  in the surviving or new domestic cooperative or foreign business 
 90.22  entity; 
 90.23     (4) the terms of the merger or consolidation; 
 90.24     (5) the proposed effect of the consolidation or merger on 
 90.25  the members and patron members of each constituent domestic 
 90.26  cooperative; and 
 90.27     (6) for a consolidation, the plan shall contain the 
 90.28  articles of the domestic cooperative or foreign business entity 
 90.29  or organizational documents to be filed with the state in which 
 90.30  the foreign business entity is organized.  
 90.31     Subd. 3.  [NOTICE.] The following shall apply to notice: 
 90.32     (1) the board shall mail or otherwise transmit or deliver 
 90.33  notice of the merger or consolidation to each member.  The 
 90.34  notice shall contain the full text of the plan, and the time and 
 90.35  place of the meeting at which the plan will be considered; and 
 90.36     (2) a cooperative with more than 200 members may provide 
 91.1   the notice in the same manner as a regular members' meeting 
 91.2   notice.  
 91.3      Subd. 4.  [ADOPTION OF PLAN.] (a) A plan of merger or 
 91.4   consolidation shall be adopted by a domestic cooperative as 
 91.5   provided in this subdivision. 
 91.6      (b) A plan of merger or consolidation is adopted if: 
 91.7      (1) a quorum of the members eligible to vote is registered 
 91.8   as being present or represented by mail vote or alternative 
 91.9   ballot at the meeting; and 
 91.10     (2) the plan is approved by the patron members, or if 
 91.11  otherwise provided in the articles or bylaws is approved by a 
 91.12  majority of the votes cast in each class of votes cast, or for a 
 91.13  domestic cooperative with articles or bylaws requiring more than 
 91.14  a majority of the votes cast or other conditions for approval, 
 91.15  the plan is approved by a proportion of the votes cast or a 
 91.16  number of total members as required by the articles or bylaws 
 91.17  and the conditions for approval in the articles or bylaws have 
 91.18  been satisfied.  
 91.19     (c) After the plan has been adopted, articles of merger or 
 91.20  consolidation stating the plan and that the plan was adopted 
 91.21  according to this subdivision shall be signed by the chair, vice 
 91.22  chair, records officer, or documents officer of each domestic 
 91.23  cooperative merging or consolidating.  
 91.24     (d) The articles of merger or consolidation shall be filed 
 91.25  in the office of the secretary of state.  
 91.26     (e) For a merger, the articles of the surviving domestic 
 91.27  cooperative subject to this chapter are deemed amended to the 
 91.28  extent provided in the articles of merger.  
 91.29     (f) Unless a later date is provided in the plan, the merger 
 91.30  or consolidation is effective when the articles of merger or 
 91.31  consolidation are filed in the office of the secretary of state 
 91.32  of this state or appropriate office of another jurisdiction. 
 91.33     (g) The secretary of state shall issue a certificate of 
 91.34  organization of the merged or consolidated cooperative.  
 91.35     Subd. 5.  [EFFECT OF MERGER.] The following shall apply to 
 91.36  the effect of a merger: 
 92.1      (a) After the effective date, the domestic cooperatives and 
 92.2   any foreign business entities that are parties to the plan 
 92.3   become a single entity.  For a merger, the surviving business 
 92.4   entity is the business entity designated in the plan.  For a 
 92.5   consolidation, the new domestic cooperative or any foreign 
 92.6   business entity is the business entity provided for in the 
 92.7   plan.  Except for the surviving or new domestic cooperative or 
 92.8   foreign business entity, the separate existence of all business 
 92.9   entities that are parties to the plan cease on the effective 
 92.10  date of the merger or consolidation. 
 92.11     (b) The surviving or new domestic cooperative or foreign 
 92.12  business entity possesses all of the rights and property of each 
 92.13  of the merged or consolidated business entities and is 
 92.14  responsible for all their obligations.  The title to property of 
 92.15  each merged or consolidated domestic cooperative or foreign 
 92.16  business entity is vested in the surviving or new domestic 
 92.17  cooperative or foreign business entity without reversion or 
 92.18  impairment of the title caused by the merger or consolidation. 
 92.19     Sec. 69.  [308B.805] [MERGER OF SUBSIDIARY.] 
 92.20     Subdivision 1.  [WHEN AUTHORIZED; CONTENTS OF PLAN.] (a) A 
 92.21  parent domestic cooperative or a subsidiary that is a domestic 
 92.22  cooperative may complete the merger of a subsidiary as provided 
 92.23  in this section, provided however, if either the parent or the 
 92.24  subsidiary is a business entity organized under the laws of this 
 92.25  state, the merger of the subsidiary is not authorized under this 
 92.26  section unless the law governing the business entity expressly 
 92.27  authorizes merger with a cooperative.  For purposes of this 
 92.28  section, "subsidiary" means a domestic cooperative or foreign 
 92.29  business entity and the term "cooperative" means a domestic 
 92.30  cooperative.  A parent cooperative owning at least 90 percent of 
 92.31  the outstanding ownership interests of each class and series of 
 92.32  a subsidiary directly, or indirectly through related 
 92.33  organizations, other than classes or series that, absent this 
 92.34  section, would otherwise not be entitled to vote on the merger, 
 92.35  may merge the subsidiary into itself or into any other 
 92.36  subsidiary at least 90 percent of the outstanding ownership 
 93.1   interests of each class and series of which is owned by the 
 93.2   parent cooperative directly, or indirectly through related 
 93.3   organizations, other than classes or series that, absent this 
 93.4   section, would otherwise not be entitled to vote on the merger, 
 93.5   without a vote of the members of itself or any subsidiary or may 
 93.6   merge itself, or itself and one or more of the subsidiaries, 
 93.7   into one of the subsidiaries under this section.  A resolution 
 93.8   approved by the affirmative vote of a majority of the directors 
 93.9   of the parent cooperative present shall set forth a plan of 
 93.10  merger that contains: 
 93.11     (1) the name of the subsidiary or subsidiaries, the name of 
 93.12  the parent, and the name of the surviving cooperative; 
 93.13     (2) the manner and basis of converting the membership 
 93.14  interests of the subsidiary or subsidiaries or parent into 
 93.15  securities of the parent, subsidiary, or of another cooperative 
 93.16  or, in the whole or in part, into money or other property; 
 93.17     (3) if the parent is a constituent cooperative but is not 
 93.18  the surviving cooperative in the merger, a provision for the pro 
 93.19  rata issuance of membership interests of the surviving 
 93.20  cooperative to the holders of membership interests of the parent 
 93.21  on surrender of any certificates for shares of the parent; and 
 93.22     (4) if the surviving cooperative is a subsidiary, a 
 93.23  statement of any amendments to the articles of the surviving 
 93.24  cooperative that will be part of the merger.  
 93.25     (b) If the parent is a constituent cooperative and the 
 93.26  surviving cooperative in the merger, it may change its 
 93.27  cooperative name, without a vote of its members, by the 
 93.28  inclusion of a provision to that effect in the resolution of 
 93.29  merger setting forth the plan of merger that is approved by the 
 93.30  affirmative vote of a majority of the directors of the parent 
 93.31  present.  Upon the effective date of the merger, the name of the 
 93.32  parent shall be changed.  
 93.33     (c) If the parent is a constituent cooperative but is not 
 93.34  the surviving cooperative in the merger, the resolution is not 
 93.35  effective unless it is also approved by the affirmative vote of 
 93.36  the holders of a majority of the voting power of all membership 
 94.1   interests of the parent entitled to vote at a regular or special 
 94.2   meeting if the parent is a cooperative, or in accordance with 
 94.3   the laws under which it is organized if the parent is a foreign 
 94.4   business entity or cooperative.  
 94.5      Subd. 2.  [NOTICE TO MEMBERS OF SUBSIDIARY.] Notice of the 
 94.6   action, including a copy of the plan of merger, shall be given 
 94.7   to each member, other than the parent and any subsidiary of each 
 94.8   subsidiary that is a constituent cooperative in the merger 
 94.9   before, or within ten days after, the effective date of the 
 94.10  merger. 
 94.11     Subd. 3.  [ARTICLES OF MERGER; CONTENTS OF 
 94.12  ARTICLES.] Articles of merger shall be prepared that contain: 
 94.13     (1) the plan of merger; 
 94.14     (2) the number of outstanding membership interests of each 
 94.15  series and class of each subsidiary that is a constituent 
 94.16  cooperative in the merger, other than the series or classes 
 94.17  that, absent this section, would otherwise not be entitled to 
 94.18  vote on the merger, and the number of membership interests of 
 94.19  each series and class of the subsidiary or subsidiaries, other 
 94.20  than series or classes that, absent this section, would 
 94.21  otherwise not be entitled to vote on the merger, owned by the 
 94.22  parent directly, or indirectly through related organizations; 
 94.23  and 
 94.24     (3) a statement that the plan of merger has been approved 
 94.25  by the parent under this section.  
 94.26     Subd. 4.  [ARTICLES SIGNED, FILED.] The articles of merger 
 94.27  shall be signed on behalf of the parent and filed with the 
 94.28  secretary of state.  
 94.29     Subd. 5.  [CERTIFICATE.] The secretary of state shall issue 
 94.30  a certificate of merger to the parent or its legal 
 94.31  representative or, if the parent is a constituent cooperative 
 94.32  but is not the surviving cooperative in the merger, to the 
 94.33  surviving cooperative or its legal representative.  
 94.34     Subd. 6.  [NONEXCLUSIVITY.] A merger among a parent and one 
 94.35  or more subsidiaries or among two or more subsidiaries of a 
 94.36  parent may be accomplished under section 308B.801 instead of 
 95.1   this section, in which case this section does not apply.  
 95.2      Sec. 70.  [308B.811] [ABANDONMENT.] 
 95.3      Subdivision 1.  [ABANDONMENT BY MEMBERS OR PLAN.] After a 
 95.4   plan of merger has been approved by the members entitled to vote 
 95.5   on the approval of the plan and before the effective date of the 
 95.6   plan, the plan may be abandoned by the same vote that approved 
 95.7   the plan. 
 95.8      Subd. 2.  [ABANDONMENT OF MERGER.] (a) A merger may be 
 95.9   abandoned: 
 95.10     (1) if the members of each of the constituent domestic 
 95.11  cooperatives entitled to vote on the approval of the plan have 
 95.12  approved the abandonment at a meeting by the affirmative vote of 
 95.13  the holders of a majority of the voting power of the membership 
 95.14  interests entitled to vote; if the merger is with a domestic 
 95.15  cooperative or foreign business entity, the abandonment is 
 95.16  approved in such manner as may be required by the laws of the 
 95.17  state under which the foreign business entity is organized; and 
 95.18  if the members of a constituent domestic cooperative are not 
 95.19  entitled to vote on the approval of the plan, the board of the 
 95.20  constituent domestic cooperative has approved the abandonment by 
 95.21  the affirmative vote of a majority of the directors present; 
 95.22     (2) if the plan itself provides for abandonment and all 
 95.23  conditions for abandonment set forth in the plan are met; or 
 95.24     (3) under paragraph (b). 
 95.25     (b) A plan of merger may be abandoned before the effective 
 95.26  date of the plan by a resolution of the board of any constituent 
 95.27  domestic cooperative abandoning the plan of merger approved by 
 95.28  the affirmative vote of a majority of the directors present, 
 95.29  subject to the contract rights of any other person under the 
 95.30  plan.  If a plan of merger is with a foreign business entity, 
 95.31  the plan of merger may be abandoned before the effective date of 
 95.32  the plan by a resolution of the foreign business entity adopted 
 95.33  according to the laws of the state under which the foreign 
 95.34  business entity is organized, subject to the contract rights of 
 95.35  any other person under the plan. 
 95.36     (c) If articles of merger have been filed with the 
 96.1   secretary of state, but have not yet become effective, the 
 96.2   constituent organizations, in the case of abandonment under 
 96.3   paragraph (a), clause (1), the constituent organizations or any 
 96.4   one of them, in the case of abandonment under paragraph (a), 
 96.5   clause (2), or the abandoning organization in the case of 
 96.6   abandonment under paragraph (b), shall file with the secretary 
 96.7   of state articles of abandonment that contain: 
 96.8      (1) the names of the constituent organizations; 
 96.9      (2) the provisions of this section under which the plan is 
 96.10  abandoned; and 
 96.11     (3) if the plan is abandoned under paragraph (b), the text 
 96.12  of the resolution abandoning the plan. 
 96.13                            DISSOLUTION
 96.14     Sec. 71.  [308B.901] [METHODS OF DISSOLUTION.] 
 96.15     A cooperative may be dissolved by the members or by order 
 96.16  of the court. 
 96.17     Sec. 72.  [308B.905] [WINDING UP.] 
 96.18     Subdivision 1.  [COLLECTION AND PAYMENT OF DEBTS.] After 
 96.19  the notice of intent to dissolve has been filed with the 
 96.20  secretary of state, the board, or the officers acting under the 
 96.21  direction of the board shall proceed as soon as possible: 
 96.22     (1) to collect or make provision for the collection of all 
 96.23  debts due or owing to the cooperative, including unpaid 
 96.24  subscriptions for shares; and 
 96.25     (2) to pay or make provision for the payment of all debts, 
 96.26  obligations, and liabilities of the cooperative according to 
 96.27  their priorities. 
 96.28     Subd. 2.  [TRANSFER OF ASSETS.] After the notice of intent 
 96.29  to dissolve has been filed with the secretary of state, the 
 96.30  board may sell, lease, transfer, or otherwise dispose of all or 
 96.31  substantially all of the property and assets of the dissolving 
 96.32  cooperative without a vote of the members. 
 96.33     Subd. 3.  [DISTRIBUTION TO MEMBERS.] Tangible and 
 96.34  intangible property, including money, remaining after the 
 96.35  discharge of the debts, obligations, and liabilities of the 
 96.36  cooperative shall be distributed to the members and former 
 97.1   members as provided in the articles or bylaws, unless otherwise 
 97.2   provided by law.  If previously authorized by the members, the 
 97.3   tangible and intangible property of the cooperative may be 
 97.4   liquidated and disposed of at the discretion of the board. 
 97.5      Sec. 73.  [308B.911] [REVOCATION OF DISSOLUTION 
 97.6   PROCEEDINGS.] 
 97.7      Subdivision 1.  [AUTHORITY TO REVOKE.] Dissolution 
 97.8   proceedings may be revoked before the articles of dissolution 
 97.9   are filed with the secretary of state. 
 97.10     Subd. 2.  [REVOCATION BY MEMBERS.] The chair may call a 
 97.11  members' meeting to consider the advisability of revoking the 
 97.12  dissolution proceedings.  The question of the proposed 
 97.13  revocation shall be submitted to the members at the members' 
 97.14  meeting called to consider the revocation.  The dissolution 
 97.15  proceedings are revoked if the proposed revocation is approved 
 97.16  at the members' meeting by a majority of the members of the 
 97.17  cooperative or for a cooperative with articles or bylaws 
 97.18  requiring a greater number of members, the number of members 
 97.19  required by the articles or bylaws. 
 97.20     Subd. 3.  [FILING WITH THE SECRETARY OF STATE.] Revocation 
 97.21  of dissolution proceedings is effective when a notice of 
 97.22  revocation is filed with the secretary of state.  After the 
 97.23  notice is filed, the cooperative may resume business. 
 97.24     Sec. 74.  [308B.915] [STATUTE OF LIMITATIONS.] 
 97.25     The claim of a creditor or claimant against a dissolving 
 97.26  cooperative is barred if the claim has not been enforced by 
 97.27  initiating legal, administrative, or arbitration proceedings 
 97.28  concerning the claim by two years after the date the notice of 
 97.29  intent to dissolve is filed with the secretary of state. 
 97.30     Sec. 75.  [308B.921] [ARTICLES OF DISSOLUTION.] 
 97.31     Subdivision 1.  [CONDITIONS TO FILE.] Articles of 
 97.32  dissolution of a cooperative shall be filed with the secretary 
 97.33  of state after payment of the claims of all known creditors and 
 97.34  claimants has been made or provided for and the remaining 
 97.35  property has been distributed by the board.  The articles of 
 97.36  dissolution shall state: 
 98.1      (1) that all debts, obligations, and liabilities of the 
 98.2   cooperative have been paid or discharged or adequate provisions 
 98.3   have been made for them or time periods allowing claims have run 
 98.4   and other claims are not outstanding; 
 98.5      (2) that the remaining property, assets, and claims of the 
 98.6   cooperative have been distributed among the members or under a 
 98.7   liquidation authorized by the members; and 
 98.8      (3) that legal, administrative, or arbitration proceedings 
 98.9   by or against the cooperative are not pending or adequate 
 98.10  provision has been made for the satisfaction of a judgment, 
 98.11  order, or decree that may be entered against the cooperative in 
 98.12  a pending proceeding. 
 98.13     Subd. 2.  [DISSOLUTION EFFECTIVE ON FILING.] The 
 98.14  cooperative is dissolved when the articles of dissolution have 
 98.15  been filed with the secretary of state. 
 98.16     Subd. 3.  [CERTIFICATE.] The secretary of state shall issue 
 98.17  to the dissolved cooperative or its legal representative a 
 98.18  certificate of dissolution that contains: 
 98.19     (1) the name of the dissolved cooperative; 
 98.20     (2) the date the articles of dissolution were filed with 
 98.21  the secretary of state; and 
 98.22     (3) a statement that the cooperative is dissolved. 
 98.23     Sec. 76.  [308B.925] [APPLICATION FOR COURT-SUPERVISED 
 98.24  VOLUNTARY DISSOLUTION.] 
 98.25     After a notice of intent to dissolve has been filed with 
 98.26  the secretary of state and before a certificate of dissolution 
 98.27  has been issued, the cooperative or, for good cause shown, a 
 98.28  member or creditor may apply to a court within the county where 
 98.29  the registered address is located to have the dissolution 
 98.30  conducted or continued under the supervision of the court. 
 98.31     Sec. 77.  [308B.931] [COURT-ORDERED REMEDIES OR 
 98.32  DISSOLUTION.] 
 98.33     Subdivision 1.  [CONDITIONS FOR RELIEF.] A court may grant 
 98.34  equitable relief that it deems just and reasonable in the 
 98.35  circumstances or may dissolve a cooperative and liquidate its 
 98.36  assets and business: 
 99.1      (1) in a supervised voluntary dissolution that is applied 
 99.2   for by the cooperative; 
 99.3      (2) in an action by a member when it is established that: 
 99.4      (i) the directors or the persons having the authority 
 99.5   otherwise vested in the board are deadlocked in the management 
 99.6   of the cooperative's affairs and the members are unable to break 
 99.7   the deadlock; 
 99.8      (ii) the directors or those in control of the cooperative 
 99.9   have acted fraudulently, illegally, or in a manner unfairly 
 99.10  prejudicial toward one or more members in their capacities as 
 99.11  members, directors, or officers; 
 99.12     (iii) the members of the cooperative are so divided in 
 99.13  voting power that, for a period that includes the time when two 
 99.14  consecutive regular members' meetings were held, they have 
 99.15  failed to elect successors to directors whose terms have expired 
 99.16  or would have expired upon the election and qualification of 
 99.17  their successors; 
 99.18     (iv) the cooperative assets are being misapplied or wasted; 
 99.19  or 
 99.20     (v) the period of duration as provided in the articles has 
 99.21  expired and has not been extended as provided in this chapter; 
 99.22  and 
 99.23     (3) in an action by a creditor when: 
 99.24     (i) the claim of the creditor against the cooperative has 
 99.25  been reduced to judgment and an execution on the judgment has 
 99.26  been returned unsatisfied; 
 99.27     (ii) the cooperative has admitted in writing that the claim 
 99.28  of the creditor against the cooperative is due and owing and it 
 99.29  is established that the cooperative is unable to pay its debts 
 99.30  in the ordinary course of business; or 
 99.31     (iii) in an action by the attorney general to dissolve the 
 99.32  cooperative in accordance with this chapter when it is 
 99.33  established that a decree of dissolution is appropriate. 
 99.34     Subd. 2.  [CONDITION OF COOPERATIVE OR ASSOCIATION.] In 
 99.35  determining whether to order equitable relief or dissolution, 
 99.36  the court shall take into consideration the financial condition 
100.1   of the cooperative but may not refuse to order equitable relief 
100.2   or dissolution solely on the grounds that the cooperative has 
100.3   accumulated operating net income or current operating net income.
100.4      Subd. 3.  [DISSOLUTION AS REMEDY.] In deciding whether to 
100.5   order dissolution of the cooperative, the court shall consider 
100.6   whether lesser relief suggested by one or more parties, such as 
100.7   a form of equitable relief or a partial liquidation, would be 
100.8   adequate to permanently relieve the circumstances established 
100.9   under subdivision 1, clause (2), item (ii) or (iii).  Lesser 
100.10  relief may be ordered if it would be appropriate under the facts 
100.11  and circumstances of the case. 
100.12     Subd. 4.  [EXPENSES.] If the court finds that a party to a 
100.13  proceeding brought under this section has acted arbitrarily, 
100.14  vexatiously, or otherwise not in good faith, the court may in 
100.15  its discretion award reasonable expenses, including attorney 
100.16  fees and disbursements to any of the other parties. 
100.17     Subd. 5.  [VENUE.] Proceedings under this section shall be 
100.18  brought in a court within the county where the registered 
100.19  address of the cooperative is located. 
100.20     Subd. 6.  [PARTIES.] It is not necessary to make members 
100.21  parties to the action or proceeding unless relief is sought 
100.22  against them personally. 
100.23     Sec. 78.  [308B.935] [PROCEDURE IN INVOLUNTARY OR 
100.24  COURT-SUPERVISED VOLUNTARY DISSOLUTION.] 
100.25     Subdivision 1.  [ACTION BEFORE HEARING.] In dissolution 
100.26  proceedings before a hearing can be completed the court may: 
100.27     (1) issue injunctions; 
100.28     (2) appoint receivers with all powers and duties that the 
100.29  court directs; 
100.30     (3) take actions required to preserve the cooperative's 
100.31  assets wherever located; and 
100.32     (4) carry on the business of the cooperative. 
100.33     Subd. 2.  [ACTION AFTER HEARING.] After a hearing is 
100.34  completed, upon notice to parties to the proceedings and to 
100.35  other parties in interest designated by the court, the court may 
100.36  appoint a receiver to collect the cooperative's assets, 
101.1   including amounts owing to the cooperative by subscribers on 
101.2   account of an unpaid portion of the consideration for the 
101.3   issuance of shares.  A receiver has authority, subject to the 
101.4   order of the court, to continue the business of the cooperative 
101.5   and to sell, lease, transfer, or otherwise dispose of the 
101.6   property and assets of the cooperative either at public or 
101.7   private sale. 
101.8      Subd. 3.  [DISCHARGE OF OBLIGATIONS.] The assets of the 
101.9   cooperative or the proceeds resulting from a sale, lease, 
101.10  transfer, or other disposition shall be applied in the following 
101.11  order of priority: 
101.12     (1) the costs and expense of the proceedings, including 
101.13  attorney fees and disbursements; 
101.14     (2) debts, taxes, and assessments due the United States, 
101.15  this state, and other states in that order; 
101.16     (3) claims duly proved and allowed to employees under the 
101.17  provisions of the Workers' Compensation Act except that claims 
101.18  under this clause may not be allowed if the cooperative carried 
101.19  workers' compensation insurance, as provided by law, at the time 
101.20  the injury was sustained; 
101.21     (4) claims, including the value of all compensation paid in 
101.22  a medium other than money, proved and allowed to employees for 
101.23  services performed within three months preceding the appointment 
101.24  of the receiver, if any; and 
101.25     (5) other claims proved and allowed. 
101.26     Subd. 4.  [REMAINDER TO MEMBERS.] After payment of the 
101.27  expenses of receivership and claims of creditors are proved, the 
101.28  remaining assets, if any, may be distributed to the members or 
101.29  distributed under an approved liquidation plan. 
101.30     Sec. 79.  [308B.941] [RECEIVER QUALIFICATIONS AND POWERS.] 
101.31     Subdivision 1.  [QUALIFICATIONS.] A receiver shall be a 
101.32  natural person or a domestic business entity or a foreign 
101.33  business entity authorized to transact business in this state.  
101.34  A receiver shall give a bond as directed by the court with the 
101.35  sureties required by the court. 
101.36     Subd. 2.  [POWERS.] A receiver may sue and defend in all 
102.1   courts as receiver of the cooperative.  The court appointing the 
102.2   receiver has exclusive jurisdiction of the cooperative and its 
102.3   property. 
102.4      Sec. 80.  [308B.945] [DISSOLUTION ACTION BY ATTORNEY 
102.5   GENERAL; ADMINISTRATIVE DISSOLUTION.] 
102.6      Subdivision 1.  [CONDITIONS TO BEGIN ACTION.] A cooperative 
102.7   may be dissolved involuntarily by a decree of a court in this 
102.8   state in an action filed by the attorney general it if is 
102.9   established that: 
102.10     (1) the articles and certificate of organization were 
102.11  procured through fraud; 
102.12     (2) the cooperative was organized for a purpose not 
102.13  permitted by this chapter or prohibited by state law; 
102.14     (3) the cooperative has flagrantly violated a provision of 
102.15  this chapter, has violated a provision of this chapter more than 
102.16  once, or has violated more than one provision of this chapter; 
102.17  or 
102.18     (4) the cooperative has acted, or failed to act, in a 
102.19  manner that constitutes surrender or abandonment of the 
102.20  cooperative's franchise, privileges, or enterprise. 
102.21     Subd. 2.  [NOTICE TO COOPERATIVE.] An action may not be 
102.22  commenced under subdivision 1 until 30 days after notice to the 
102.23  cooperative by the attorney general of the reason for the filing 
102.24  of the action.  If the reason for filing the action is an act 
102.25  that the cooperative has done, or omitted to do, and the act or 
102.26  omission may be corrected by an amendment of the articles or 
102.27  bylaws or by performance of or abstention from the act, the 
102.28  attorney general shall give the cooperative 30 additional days 
102.29  to make the correction before filing the action. 
102.30     Sec. 81.  [308B.951] [FILING CLAIMS IN COURT-SUPERVISED 
102.31  DISSOLUTION PROCEEDINGS.] 
102.32     Subdivision 1.  [FILING UNDER OATH.] In proceedings to 
102.33  dissolve a cooperative, the court may require all creditors and 
102.34  claimants of the cooperative to file their claims under oath 
102.35  with the court administrator or with the receiver in a form 
102.36  prescribed by the court. 
103.1      Subd. 2.  [DATE TO FILE A CLAIM.] If the court requires the 
103.2   filing of claims, the court shall: 
103.3      (1) set a date, by order, at least 120 days after the date 
103.4   the order is filed as the last day for the filing of claims; and 
103.5      (2) prescribe the notice of the fixed date that shall be 
103.6   given to creditors and claimants. 
103.7      Subd. 3.  [FIXED DATE OR EXTENSION FOR FILING.] Before the 
103.8   fixed date, the court may extend the time for filing claims.  
103.9   Creditors and claimants failing to file claims on or before the 
103.10  fixed date may be barred, by order of court, from claiming an 
103.11  interest in or receiving payment out of the property or assets 
103.12  of the cooperative. 
103.13     Sec. 82.  [308B.955] [DISCONTINUANCE OF COURT-SUPERVISED 
103.14  DISSOLUTION PROCEEDINGS.] 
103.15     The involuntary or supervised voluntary dissolution of a 
103.16  cooperative may be discontinued at any time during the 
103.17  dissolution proceedings if it is established that cause for 
103.18  dissolution does not exist.  The court shall dismiss the 
103.19  proceedings and direct the receiver, if any, to redeliver to the 
103.20  cooperative its remaining property and assets. 
103.21     Sec. 83.  [308B.961] [COURT-SUPERVISED DISSOLUTION ORDER.] 
103.22     Subdivision 1.  [CONDITIONS FOR DISSOLUTION ORDER.] In an 
103.23  involuntary or supervised voluntary dissolution after the costs 
103.24  and expenses of the proceedings and all debts, obligations, and 
103.25  liabilities of the cooperative have been paid or discharged and 
103.26  the remaining property and assets have been distributed to its 
103.27  members or, if its property and assets are not sufficient to 
103.28  satisfy and discharge the costs, expenses, debts, obligations, 
103.29  and liabilities, when all the property and assets have been 
103.30  applied so far as they will go to their payment according to 
103.31  their priorities, the court shall enter an order dissolving the 
103.32  cooperative. 
103.33     Subd. 2.  [DISSOLUTION EFFECTIVE ON FILING ORDER.] When the 
103.34  order dissolving the cooperative or association has been 
103.35  entered, the cooperative or association is dissolved. 
103.36     Sec. 84.  [308B.965] [FILING COURT'S DISSOLUTION ORDER.] 
104.1      After the court enters an order dissolving a cooperative, 
104.2   the court administrator shall cause a certified copy of the 
104.3   dissolution order to be filed with the secretary of state.  The 
104.4   secretary of state may not charge a fee for filing the 
104.5   dissolution order. 
104.6      Sec. 85.  [308B.971] [BARRING OF CLAIMS.] 
104.7      Subdivision 1.  [CLAIMS BARRED.] A person who is or becomes 
104.8   a creditor or claimant before, during, or following the 
104.9   conclusion of dissolution proceedings, who does not file a claim 
104.10  or pursue a remedy in a legal, administrative, or arbitration 
104.11  proceeding during the pendency of the dissolution proceeding or 
104.12  has not initiated a legal, administrative, or arbitration 
104.13  proceeding before the commencement of the dissolution 
104.14  proceedings and all those claiming through or under the creditor 
104.15  or claimant, are forever barred from suing on that claim or 
104.16  otherwise realizing upon or enforcing it, except as provided in 
104.17  this section. 
104.18     Subd. 2.  [CERTAIN UNFILED CLAIMS ALLOWED.] Within one year 
104.19  after articles of dissolution have been filed with the secretary 
104.20  of state under this chapter or a dissolution order has been 
104.21  entered, a creditor or claimant who shows good cause for not 
104.22  having previously filed the claim may apply to a court in this 
104.23  state to allow a claim: 
104.24     (1) against the cooperative to the extent of undistributed 
104.25  assets; or 
104.26     (2) if the undistributed assets are not sufficient to 
104.27  satisfy the claim, the claim may be allowed against a member to 
104.28  the extent of the distributions to members in dissolution 
104.29  received by the member. 
104.30     Subd. 3.  [OMITTED CLAIMS ALLOWED.] Debts, obligations, and 
104.31  liabilities incurred during dissolution proceedings shall be 
104.32  paid or provided for by the cooperative before the distribution 
104.33  of assets to a member.  A person to whom this kind of debt, 
104.34  obligation, or liability is owed but is not paid may pursue any 
104.35  remedy against the offenders, directors, or members of the 
104.36  cooperative before the expiration of the applicable statute of 
105.1   limitations.  This subdivision does not apply to dissolution 
105.2   under the supervision or order of a court. 
105.3      Sec. 86.  [308B.975] [RIGHT TO SUE OR DEFEND AFTER 
105.4   DISSOLUTION.] 
105.5      After a cooperative has been dissolved, any of its former 
105.6   officers, directors, or members may assert or defend, in the 
105.7   name of the cooperative, a claim by or against the cooperative. 
105.8                              ARTICLE 2
105.9                     SECURITIES; CROSS-REFERENCES
105.10     Section 1.  Minnesota Statutes 2002, section 80A.14, 
105.11  subdivision 17, is amended to read: 
105.12     Subd. 17.  [SALE, SELL.] (1) "Sale" or "sell" includes 
105.13  every contract of sale of, contract to sell, or disposition of, 
105.14  a security or interest in a security for value. 
105.15     (2) "Offer" or "offer to sell" includes every attempt or 
105.16  offer to dispose of, or solicitation of an offer to buy, a 
105.17  security or interest in a security for value. 
105.18     (3) Any security given or delivered with, or as a bonus on 
105.19  account of, any purchase of securities or any other thing is 
105.20  considered to constitute part of the subject of the purchase and 
105.21  to have been offered and sold for value. 
105.22     (4) A purported gift of assessable stock is considered to 
105.23  involve an offer and sale. 
105.24     (5) Every sale or offer of a warrant or right to purchase 
105.25  or subscribe to another security of the same or another issuer, 
105.26  as well as every sale or offer of a security which gives the 
105.27  holder a present or future right or privilege to convert into 
105.28  another security of the same or another issuer, is considered to 
105.29  include an offer of the other security. 
105.30     (6) The terms defined in this subdivision do not include 
105.31  (i) any bona fide pledge or loans; (ii) any stock dividend, 
105.32  whether the corporation or other entity distributing the 
105.33  dividend is the issuer of the stock or not; or (iii) a dividend 
105.34  on equity distributed by a cooperative organized under chapter 
105.35  308B; or (iv) the offer or issuance of any securities as a 
105.36  result of a conversion of a cooperative conducted in accordance 
106.1   with section 308B.825, or the domestication of a cooperative 
106.2   under section 308B.831. 
106.3      Sec. 2.  Minnesota Statutes 2002, section 80A.15, 
106.4   subdivision 2, is amended to read: 
106.5      Subd. 2.  [TRANSACTIONS EXEMPTED.] The following 
106.6   transactions are exempted from sections 80A.08 and 80A.16: 
106.7      (a) Any sales, whether or not effected through a 
106.8   broker-dealer, provided that: 
106.9      (1) no person shall make more than ten sales of securities 
106.10  in Minnesota of the same issuer pursuant to this exemption, 
106.11  exclusive of sales according to clause (2), during any period of 
106.12  12 consecutive months; provided further, that in the case of 
106.13  sales by an issuer, except sales of securities registered under 
106.14  the Securities Act of 1933 or exempted by section 3(b) of that 
106.15  act, (i) the seller reasonably believes that all buyers are 
106.16  purchasing for investment, and (ii) the securities are not 
106.17  advertised for sale to the general public in newspapers or other 
106.18  publications of general circulation or otherwise, or by radio, 
106.19  television, electronic means or similar communications media, or 
106.20  through a program of general solicitation by means of mail or 
106.21  telephone; or 
106.22     (2) no issuer shall make more than 25 sales of its 
106.23  securities in Minnesota according to this exemption, exclusive 
106.24  of sales pursuant to clause (1), during any period of 12 
106.25  consecutive months; provided further, that the issuer meets the 
106.26  conditions in clause (1) and, in addition meets the following 
106.27  additional conditions:  (i) files with the commissioner, ten 
106.28  days before a sale according to this clause, a statement of 
106.29  issuer on a form prescribed by the commissioner; and (ii) no 
106.30  commission or other remuneration is paid or given directly or 
106.31  indirectly for soliciting any prospective buyers in this state 
106.32  in connection with a sale according to this clause except 
106.33  reasonable and customary commissions paid by the issuer to a 
106.34  broker-dealer licensed under this chapter. 
106.35     (b) Any nonissuer distribution of an outstanding security 
106.36  if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
107.1   Manuals, or other recognized manuals approved by the 
107.2   commissioner contains the names of the issuer's officers and 
107.3   directors, a balance sheet of the issuer as of a date not more 
107.4   than 18 months prior to the date of the sale, and a profit and 
107.5   loss statement for the fiscal year preceding the date of the 
107.6   balance sheet, and (2) the issuer or its predecessor has been in 
107.7   active, continuous business operation for the five-year period 
107.8   next preceding the date of sale, and (3) if the security has a 
107.9   fixed maturity or fixed interest or dividend provision, the 
107.10  issuer has not, within the three preceding fiscal years, 
107.11  defaulted in payment of principal, interest, or dividends on the 
107.12  securities. 
107.13     (c) The execution of any orders by a licensed broker-dealer 
107.14  for the purchase or sale of any security, pursuant to an 
107.15  unsolicited offer to purchase or sell; provided that the 
107.16  broker-dealer acts as agent for the purchaser or seller, and has 
107.17  no direct material interest in the sale or distribution of the 
107.18  security, receives no commission, profit, or other compensation 
107.19  from any source other than the purchaser and seller and delivers 
107.20  to the purchaser and seller written confirmation of the 
107.21  transaction which clearly itemizes the commission, or other 
107.22  compensation. 
107.23     (d) Any nonissuer sale of notes or bonds secured by a 
107.24  mortgage lien if the entire mortgage, together with all notes or 
107.25  bonds secured thereby, is sold to a single purchaser at a single 
107.26  sale. 
107.27     (e) Any judicial sale, exchange, or issuance of securities 
107.28  made pursuant to an order of a court of competent jurisdiction. 
107.29     (f) The sale, by a pledge holder, of a security pledged in 
107.30  good faith as collateral for a bona fide debt. 
107.31     (g) Any offer or sale to a bank, savings institution, trust 
107.32  company, insurance company, investment company as defined in the 
107.33  Investment Company Act of 1940, or other financial institution 
107.34  or institutional buyer, or to a broker-dealer, whether the 
107.35  purchaser is acting for itself or in some fiduciary capacity. 
107.36     (h) An offer or sale of securities by an issuer made in 
108.1   reliance on the exemptions provided by Rule 505 or 506 of 
108.2   Regulation D promulgated by the Securities and Exchange 
108.3   Commission, Code of Federal Regulations, title 17, sections 
108.4   230.501 to 230.508, subject to the conditions and definitions 
108.5   provided by Rules 501 to 503 of Regulation D, if the offer and 
108.6   sale also satisfies the conditions and limitations in clauses 
108.7   (1) to (10). 
108.8      (1) The exemption under this paragraph is not available for 
108.9   the securities of an issuer if any of the persons described in 
108.10  Rule 252(c) to (f) of Regulation A promulgated by the Securities 
108.11  and Exchange Commission, Code of Federal Regulations, title 17, 
108.12  sections 230.251 to 230.263:  
108.13     (i) has filed a registration statement that is the subject 
108.14  of a currently effective order entered against the issuer, its 
108.15  officers, directors, general partners, controlling persons, or 
108.16  affiliates, according to any state's law within five years 
108.17  before the filing of the notice required under clause (5), 
108.18  denying effectiveness to, or suspending or revoking the 
108.19  effectiveness of, the registration statement; 
108.20     (ii) has been convicted, within five years before the 
108.21  filing of the notice required under clause (5), of a felony or 
108.22  misdemeanor in connection with the offer, sale, or purchase of a 
108.23  security or franchise, or a felony involving fraud or deceit, 
108.24  including but not limited to forgery, embezzlement, obtaining 
108.25  money under false pretenses, larceny, or conspiracy to defraud; 
108.26     (iii) is subject to an effective administrative order or 
108.27  judgment entered by a state securities administrator within five 
108.28  years before the filing of the notice required under clause (5), 
108.29  that prohibits, denies, or revokes the use of an exemption from 
108.30  securities registration, that prohibits the transaction of 
108.31  business by the person as a broker-dealer or agent, that is 
108.32  based on fraud, deceit, an untrue statement of a material fact, 
108.33  or an omission to state a material fact; or 
108.34     (iv) is subject to an order, judgment, or decree of a court 
108.35  entered within five years before the filing of the notice 
108.36  required under clause (5), temporarily, preliminarily, or 
109.1   permanently restraining or enjoining the person from engaging in 
109.2   or continuing any conduct or practice in connection with the 
109.3   offer, sale, or purchase of a security, or the making of a false 
109.4   filing with a state. 
109.5      A disqualification under paragraph (h) involving a 
109.6   broker-dealer or agent is waived if the broker-dealer or agent 
109.7   is or continues to be licensed in the state in which the 
109.8   administrative order or judgment was entered against the person 
109.9   or if the broker-dealer or agent is or continues to be licensed 
109.10  in this state as a broker-dealer or agent after notifying the 
109.11  commissioner of the act or event causing disqualification. 
109.12     The commissioner may waive a disqualification under 
109.13  paragraph (h) upon a showing of good cause that it is not 
109.14  necessary under the circumstances that use of the exemption be 
109.15  denied. 
109.16     A disqualification under paragraph (h) may be waived if the 
109.17  state securities administrator or agency of the state that 
109.18  created the basis for disqualification has determined, upon a 
109.19  showing of good cause, that it is not necessary under the 
109.20  circumstances that an exemption from registration of securities 
109.21  under the state's laws be denied. 
109.22     It is a defense to a violation of paragraph (h) based upon 
109.23  a disqualification if the issuer sustains the burden of proof to 
109.24  establish that the issuer did not know, and in the exercise of 
109.25  reasonable care could not have known, that a disqualification 
109.26  under paragraph (h) existed. 
109.27     (2) This exemption must not be available to an issuer with 
109.28  respect to a transaction that, although in technical compliance 
109.29  with this exemption, is part of a plan or scheme to evade 
109.30  registration or the conditions or limitations explicitly stated 
109.31  in paragraph (h). 
109.32     (3) No commission, finder's fee, or other remuneration 
109.33  shall be paid or given, directly or indirectly, for soliciting a 
109.34  prospective purchaser, unless the recipient is appropriately 
109.35  licensed, or exempt from licensure, in this state as a 
109.36  broker-dealer. 
110.1      (4) Nothing in this exemption is intended to or should be 
110.2   in any way construed as relieving issuers or persons acting on 
110.3   behalf of issuers from providing disclosure to prospective 
110.4   investors adequate to satisfy the antifraud provisions of the 
110.5   securities law of Minnesota.  
110.6      (5) The issuer shall file with the commissioner a notice on 
110.7   form D as adopted by the Securities and Exchange Commission 
110.8   according to Regulation D, Code of Federal Regulations, title 
110.9   17, section 230.502.  The notice must be filed not later than 15 
110.10  days after the first sale in this state of securities in an 
110.11  offering under this exemption.  Every notice on form D must be 
110.12  manually signed by a person duly authorized by the issuer and 
110.13  must be accompanied by a consent to service of process on a form 
110.14  prescribed by the commissioner.  
110.15     (6) A failure to comply with a term, condition, or 
110.16  requirement of paragraph (h) will not result in loss of the 
110.17  exemption for an offer or sale to a particular individual or 
110.18  entity if the person relying on the exemption shows that:  (i) 
110.19  the failure to comply did not pertain to a term, condition, or 
110.20  requirement directly intended to protect that particular 
110.21  individual or entity, and the failure to comply was 
110.22  insignificant with respect to the offering as a whole; and (ii) 
110.23  a good faith and reasonable attempt was made to comply with all 
110.24  applicable terms, conditions, and requirements of paragraph (h), 
110.25  except that, where an exemption is established only through 
110.26  reliance upon this provision, the failure to comply shall 
110.27  nonetheless constitute a violation of section 80A.08 and be 
110.28  actionable by the commissioner.  
110.29     (7) The issuer, upon request by the commissioner, shall, 
110.30  within ten days of the request, furnish to the commissioner a 
110.31  copy of any and all information, documents, or materials 
110.32  furnished to investors or offerees in connection with the offer 
110.33  and sale according to paragraph (h).  
110.34     (8) Neither compliance nor attempted compliance with the 
110.35  exemption provided by paragraph (h), nor the absence of an 
110.36  objection or order by the commissioner with respect to an offer 
111.1   or sale of securities undertaken according to this exemption, 
111.2   shall be considered to be a waiver of a condition of the 
111.3   exemption or considered to be a confirmation by the commissioner 
111.4   of the availability of this exemption.  
111.5      (9) The commissioner may, by rule or order, increase the 
111.6   number of purchasers or waive any other condition of this 
111.7   exemption.  
111.8      (10) The determination whether offers and sales made in 
111.9   reliance on the exemption set forth in paragraph (h) shall be 
111.10  integrated with offers and sales according to other paragraphs 
111.11  of this subdivision shall be made according to the integration 
111.12  standard set forth in Rule 502 of Regulation D promulgated by 
111.13  the Securities and Exchange Commission, Code of Federal 
111.14  Regulations, title 17, section 230.502.  If not subject to 
111.15  integration according to that rule, offers and sales according 
111.16  to paragraph (h) shall not otherwise be integrated with offers 
111.17  and sales according to other exemptions set forth in this 
111.18  subdivision. 
111.19     (i) Any offer (but not a sale) of a security for which a 
111.20  registration statement has been filed under sections 80A.01 to 
111.21  80A.31, if no stop order or refusal order is in effect and no 
111.22  public proceeding or examination looking toward an order is 
111.23  pending; and any offer of a security if the sale of the security 
111.24  is or would be exempt under this section.  The commissioner may 
111.25  by rule exempt offers (but not sales) of securities for which a 
111.26  registration statement has been filed as the commissioner deems 
111.27  appropriate, consistent with the purposes of sections 80A.01 to 
111.28  80A.31. 
111.29     (j) The offer and sale by a cooperative organized under 
111.30  chapter 308A or under the laws of another state, of its 
111.31  securities when the securities are offered and sold only to its 
111.32  members, or when the purchase of the securities is necessary or 
111.33  incidental to establishing membership in the cooperative, or 
111.34  when such securities are issued as patronage dividends.  This 
111.35  paragraph applies to a cooperative organized under the laws of 
111.36  another state only if the cooperative has filed with the 
112.1   commissioner a consent to service of process under section 
112.2   80A.27, subdivision 7, and has, not less than ten days prior to 
112.3   the issuance or delivery, furnished the commissioner with a 
112.4   written general description of the transaction and any other 
112.5   information that the commissioner requires by rule or otherwise. 
112.6      (l) The issuance and delivery of any securities of one 
112.7   corporation to another corporation or its security holders in 
112.8   connection with a merger, exchange of shares, or transfer of 
112.9   assets whereby the approval of stockholders of the other 
112.10  corporation is required to be obtained, provided, that the 
112.11  commissioner has been furnished with a general description of 
112.12  the transaction and with other information as the commissioner 
112.13  by rule prescribes not less than ten days prior to the issuance 
112.14  and delivery.  For purposes of this paragraph, a corporation 
112.15  includes a cooperative organized under chapter 308B, and the 
112.16  approval of stockholders applies to members of such a 
112.17  cooperative. 
112.18     (m) Any transaction between the issuer or other person on 
112.19  whose behalf the offering is made and an underwriter or among 
112.20  underwriters. 
112.21     (n) The distribution by a corporation of its or other 
112.22  securities to its own security holders as a stock dividend or as 
112.23  a dividend from earnings or surplus or as a liquidating 
112.24  distribution; or upon conversion of an outstanding convertible 
112.25  security; or pursuant to a stock split or reverse stock 
112.26  split.  For purposes of this paragraph, a corporation includes a 
112.27  cooperative organized under chapter 308B, and the term "stock" 
112.28  applies to interests in such a cooperative. 
112.29     (o) Any offer or sale of securities by an affiliate of the 
112.30  issuer thereof if:  (1) a registration statement is in effect 
112.31  with respect to securities of the same class of the issuer and 
112.32  (2) the offer or sale has been exempted from registration by 
112.33  rule or order of the commissioner.  
112.34     (p) Any transaction pursuant to an offer to existing 
112.35  security holders of the issuer, including persons who at the 
112.36  time of the transaction are holders of convertible securities, 
113.1   nontransferable warrants, or transferable warrants exercisable 
113.2   within not more than 90 days of their issuance, if:  (1) no 
113.3   commission or other remuneration (other than a standby 
113.4   commission) is paid or given directly or indirectly for 
113.5   soliciting any security holder in this state; and (2) the 
113.6   commissioner has been furnished with a general description of 
113.7   the transaction and with other information as the commissioner 
113.8   may by rule prescribe no less than ten days prior to the 
113.9   transaction. 
113.10     (q) Any nonissuer sales of any security, including a 
113.11  revenue obligation, issued by the state of Minnesota or any of 
113.12  its political or governmental subdivisions, municipalities, 
113.13  governmental agencies, or instrumentalities. 
113.14     (r) Any transaction as to which the commissioner by rule or 
113.15  order finds that registration is not necessary in the public 
113.16  interest and for the protection of investors. 
113.17     (s) An offer or sale of a security issued in connection 
113.18  with an employee's stock purchase, savings, option, profit 
113.19  sharing, pension, or similar employee benefit plan, if the 
113.20  following conditions are met:  
113.21     (1) the issuer, its parent corporation or any of its 
113.22  majority-owned subsidiaries offers or sells the security 
113.23  according to a written benefit plan or written contract relating 
113.24  to the compensation of the purchaser; and 
113.25     (2) the class of securities offered according to the plan 
113.26  or contract, or if an option or right to purchase a security, 
113.27  the class of securities to be issued upon the exercise of the 
113.28  option or right, is registered under section 12 of the 
113.29  Securities Exchange Act of 1934, or is a class of securities 
113.30  with respect to which the issuer files reports according to 
113.31  section 15(d) of the Securities Exchange Act of 1934; or 
113.32     (3) the issuer fully complies with the provisions of Rule 
113.33  701 as adopted by the Securities and Exchange Commission, Code 
113.34  of Federal Regulations, title 12, section 230.701. 
113.35     The issuer shall file not less than ten days before the 
113.36  transaction, a general description of the transaction and any 
114.1   other information that the commissioner requires by rule or 
114.2   otherwise or, if applicable, a Securities and Exchange Form S-8. 
114.3   Annually, within 90 days after the end of the issuer's fiscal 
114.4   year, the issuer shall file a notice as provided with the 
114.5   commissioner. 
114.6      (t) Any sale of a security of an issuer that is a pooled 
114.7   income fund, a charitable remainder trust, or a charitable lead 
114.8   trust that has a qualified charity as the only charitable 
114.9   beneficiary. 
114.10     (u) Any sale by a qualified charity of a security that is a 
114.11  charitable gift annuity if the issuer has a net worth, otherwise 
114.12  defined as unrestricted fund balance, of not less than $300,000 
114.13  and either:  (1) has been in continuous operation for not less 
114.14  than three years; or (2) is a successor or affiliate of a 
114.15  qualified charity that has been in continuous operation for not 
114.16  less than three years.  
114.17     (v) The offer and sale by a cooperative organized under 
114.18  chapter 308B of its securities when the securities are offered 
114.19  and sold only to its existing members or when the purchase of 
114.20  the securities is necessary or incidental to establishing patron 
114.21  membership in the cooperative, or when such securities are 
114.22  issued as patronage dividends.  This paragraph applies when 
114.23  securities are issued as patronage dividends or otherwise only 
114.24  when: 
114.25     (1) the issuer, prior to the completion of the sale of such 
114.26  securities, provides each offeree or purchaser disclosure 
114.27  materials, which to the extent material to an understanding of 
114.28  the issuer, its business, and the securities being offered 
114.29  substantially meet the disclosure conditions and limitations 
114.30  found in rule 502(b) of regulation d promulgated by the 
114.31  Securities and Exchange Commission, Code of Federal Regulations, 
114.32  title 17, section 230.502; and 
114.33     (2) within 15 days after the completion of the first sale 
114.34  in each offering completed in reliance upon this exemption, the 
114.35  cooperative has filed with the commissioner a consent to service 
114.36  of process under section 80A.27, subdivision 7, and has 
115.1   furnished the commissioner with a written general description of 
115.2   the transaction and any other information that the commissioner 
115.3   requires by rule or otherwise. 
115.4   A cooperative may, at or about the same time as offers or sales 
115.5   are being completed in reliance upon this exemption from 
115.6   registration and as part of a common plan of financing, offer or 
115.7   sell its securities in reliance upon any other exemption from 
115.8   registration available under this chapter.  The offer or sale of 
115.9   securities in reliance upon this paragraph shall not be 
115.10  considered or deemed a part of or be integrated with any offer 
115.11  or sale of securities conducted by the cooperative in reliance 
115.12  upon any other exemption from registration available under this 
115.13  chapter, nor shall offers or sales of securities by the 
115.14  cooperative in reliance upon any other exemption from 
115.15  registration available under this chapter be considered or 
115.16  deemed a part of or be integrated with any offer or sale 
115.17  conducted by the cooperative in reliance upon this paragraph.