Proposed Amended & Restated Articles of Incorporation of Finland Cooperative Company
Proposed June 2017
ARTICLE I. NAME
The name of the cooperative shall be Finland Cooperative Company (the “Cooperative”). It is a cooperative organized under Minnesota Cooperative Law, Minnesota Statutes Chapter 308A.
ARTICLE II. PURPOSE
The purpose of the Cooperative shall be to engage, in a cooperative basis, in a mercantile and marketing business to supply and furnish to its owners and patrons such goods and services as the owners may require or engage in any lawful business as the owners shall authorize.
For these purposes it shall have power to:
a) Borrow money from its owners and others upon adequate security; to issue bonds, debentures, notes and other obligations and to secure the same by pledge, mortgage, or trust deed on any property of the Cooperative; draw, make, accept, endorse, guarantee, execute and issue promissory notes, bills of exchange, drafts, warrants, warehouse receipts, certificates and other obligations and negotiable or transferable instruments for any purpose deemed necessary to further the objects for which the Cooperative is formed.
b) Acquire, purchase, hold, lease, encumber, sell, exchange and convey such real estate, buildings and personal property as the business of the Cooperative may require.
c) Purchase, sell, transfer and own capital stock, bonds, and obligations of other corporations.
d) Join with other cooperative corporations or associations to form district, state, national or international purchasing, marketing and service organizations; and to purchase, acquire, and hold capital stock, notes, bonds, and other obligations of such organizations.
e) Do and perform every act and thing necessary and proper to the conduct of its business for the accomplishment of the purposes set forth herein or permitted by the laws of Minnesota applicable to the association, and to have and exercise all of the powers conferred upon the association by the laws of Minnesota under which it was organized, and acts amendatory thereof and supplemental thereto.
ARTICLE III. PLACE OF BUSINESS.
The principal place of business of the association shall be 6648 Highway 1, Finland MN 55603, in the Township of Crystal Bay, County of Lake, State of Minnesota.
ARTICLE IV. DURATION.
The existence of the Cooperative shall be perpetual.
ARTICLE V. CAPITAL.
Section 1. The amount of authorized capital stock of the Cooperative shall be sixty thousand (60,000) shares and shall be divided into three classes of stock. Class A Stock shall consist of **[twenty-two thousand five hundred (22,500)] shares of voting stock with a par value of ten dollars ($10.00) per share. Class B Stock shall consist of twenty five thousand (25,000) shares of non-voting stock with a par value of ten dollars ($10.00) per share. Class C Stock shall consist of **[twelve thousand five hundred
(12,500)] shares of non-voting stock with a par value of **[five hundred dollars ($500.00)]
per share. **[Notes to Finland: Review authorized shares and adjust amounts as
necessary. Discuss appropriate par value for preferred shares.]
Section 2. Class A Stock shall be issued only in payment of patronage refunds except that one share thereof may be issued for cash to any natural person, household, cooperative, corporation or other entity to qualify him, her, or it as an owner if he, she, or it is eligible therefor. Only holders of Class A Stock shall be deemed to be owners of the Cooperative. Class A Stock owners shall have voting power, and shall be entitled to only one vote regardless of the numbers of shares owned. Voting by proxy shall not be allowed. No dividends shall be paid on Class A Stock.
Section 3. Class B Stock may be issued for cash, in payment of patronage refunds or in exchange for outstanding Class A Stock. Class B Stock shall have no voting power and no dividends shall be paid thereon.
Section 4. Class C Stock may be issued to holders of Class A Stock in separate series of
one or more shares as designated by the Board of Directors. Class C Stock shall have no
voting power. When the Board of Directors designates a series of Preferred stock, the
Board of Directors must establish dividend rights, if any, for the series. Dividends on any
series of Preferred stock may be non-cumulative or cumulative, as determined by the
Board at the time the dividend is declared or in a resolution establishing a series of Class
C Stock. Any series of Class C Stock may contain other terms and conditions set forth in
a resolution of the Board establishing the series of Class C Stock.
Section 5. No share or stock shall be issued for less than its par value, nor until the same has been paid for in cash or its equivalent, and each share of stock shall be paid for at such time and in such manner as the Board of Directors of the Cooperative shall require; however, Class B stock issued as non-cash patronage refunds may be issued as partial shares in the amount of the non-cash patronage dividend. The Cooperative shall have a prior lien on the outstanding stock for any indebtedness due it. Stock shall not be sold or transferred except back to the Cooperative with the consent and approval of the Board of Directors; provided, however, that the Board of Directors may, at its discretion, approve the transfer of the stock of a deceased owner to his or her heir, upon the written request of the heir. The capital stock of the Cooperative is not transferable in any other event. Capital stock shall be subject to redemption as provided by law and by the Bylaws of the Cooperative or, in the case of Class C stock, as provided in a resolution establishing the series of Class C stock. Capital stock of the Cooperative shall be non-assessable.
Section 6. When the Board of Directors determines that the Cooperative has sufficient working capital, Class B Stock and Class C Stock may be called for payment at par. Stock shall be called for payment as provided in the Bylaws or, in the case of Class C stock, as provided in a resolution establishing the series of Class C stock. Any redemption of stock is subject to the requirement that at the time of redemption the total amount of stock and any patronage equity allocated to owners remaining outstanding after deduction of the amount of stock redeemed, plus the permanent reserve of the Cooperative, shall at least equal the total liabilities of the Cooperative.
ARTICLE VI. ALLOCATIONS TO OWNERS.
Section 1. All or any part of the patronage refund declared by the Cooperative at any time may be paid in Class B Stock or equity accounts as permitted by law and the bylaws.
Section 2. All of the annual net income from patronage with owners available for distribution as determined by the bylaws shall belong to the owners of the Cooperative and shall be allocated to them on the basis of patronage as defined in the bylaws.
Section 3. Upon dissolution or liquidation of the Cooperative, the debts and liabilities of the Cooperative shall first be paid according to their respective priorities. Owners shall then be paid the par value of their shares, and there shall be given a preference to holders of (a) Class C Stock then (b) together as a group on a pro rata basis, Class A Stock and Class B Stock and any patronage equities. Any additional property remaining after owners have been paid shall be distributed to another association doing business on a cooperative basis or a nonprofit organization exempt from taxes under Section 501(c) of the Internal Revenue Code, as shall be determined by the Board of Directors and as consistent with applicable law.
ARTICLE VII. LIMITATION OF DIRECTOR LIABILITY
Section 1. No director of the Cooperative shall be personally liable to the cooperative or its owners for monetary damages for breach of fiduciary duty as a director, except for liability:
a) for a breach of the director’s duty of loyalty to the Cooperative or its owners; for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
b) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
c) for a transaction from which the director derived an improper personal benefit; or
d) for an act or omission occurring prior to the date when the provisions of this Article VII (or predecessor thereto) became effective.Section 2. It is the intention of the owners of the Cooperative to eliminate or limit the personal liability of the directors of the cooperative to the greatest extent permitted
Section 2. It is the intention of the owners of the Cooperative to eliminate or limit the personal liability of the directors of the cooperative to the greatest extent permitted under Minnesota law. If amendments to the Minnesota Statutes are passed after the effective date of this Article VII which authorize cooperatives to act to further limit or eliminate the personal liability of directors, then the liability of the directors of the cooperative shall be limited or eliminated to the greatest extent permitted by the Minnesota Statutes, as so amended. Any repeal or modification of this Article VII by the owners of the Cooperative shall not adversely affect any right of or any protection available to a director of the Cooperative which is in existence at the time of such repeal or modification.
ARTICLE VIII. DISSOLUTION, AMENDMENTS AND SEVERABILITY.
Section 1. The Cooperative may be dissolved in the manner as provided by law and as more particularly provided in the bylaws.
Section 2. These Articles of Incorporation may be amended as provided by law.
Section 3. In the event that any provision of these Articles of Incorporation is determined to be invalid or unenforceable under any statute or rule of law, then such provision shall be deemed inoperative to such extent and shall be deemed modified to conform with such statute or rule of law without affecting the validity or enforceability of any other provision of these Articles.