2006 Oklahoma Code - Title 18. — Corporations
OKLAHOMA STATUTES
TITLE 18.
CORPORATIONS
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§18-803. Definitions.
A. As used herein, unless the context clearly indicates that a different meaning is intended:
1. "Associated act" means the Oklahoma General Corporation Act, Section 1001 et seq. of this title, in the case of a corporation; the Oklahoma Revised Uniform Limited Partnership Act, Section 301 et seq. of Title 54 of the Oklahoma Statutes, in the case of a limited partnership; or the Oklahoma Limited Liability Company Act, Section 2000 et seq. of this title, in the case of a limited liability company;
2. "Interest" means a share of stock in a corporation, a partnership interest in a limited partnership or a membership interest in a limited liability company;
3. "Owner" means a shareholder in the case of a corporation, a general or limited partner in the case of a limited partnership or a member in the case of a limited liability company;
4. "Manager" means a director or officer in the case of a corporation, a general partner in the case of a limited partnership or a manager in the case of a limited liability company;
5. "Professional entity" means a domestic corporation, limited partnership or limited liability company formed for the purpose of rendering professional service;
6. "Professional service" means the personal service rendered by:
a. a physician, surgeon or doctor of medicine pursuant to a license under Sections 481 through 524 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of medicine,
b. an osteopathic physician or surgeon pursuant to a license under Sections 620 through 645 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of osteopathy,
c. a chiropractic physician pursuant to a license under Sections 161.1 through 161.20 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of chiropractic,
d. a podiatric physician pursuant to a license under Sections 135.1 through 160.2 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of podiatric medicine,
e. an optometrist pursuant to a license under Sections 581 through 606 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of optometry,
f. a veterinarian pursuant to a license under Sections 698.1 through 698.18 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of veterinary medicine,
g. an architect pursuant to a license under Sections 46.1 through 46.37 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of architecture,
h. an attorney pursuant to his authority to practice law granted by the Supreme Court of the State of Oklahoma,
i. a dentist pursuant to a license under Sections 328.1 through 328.51a of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of dentistry,
j. a certified public accountant or a public accountant pursuant to his authority to practice accounting under Sections 15.1 through 15.35 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of public accountancy,
k. a psychologist pursuant to a license under Sections 1351 through 1376 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of psychology,
l. a physical therapist pursuant to a license under Sections 887.1 through 887.18 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of physical therapy,
m. a registered nurse pursuant to a license under Sections 567.1 through 567.16a of Title 59 of the Oklahoma Statutes, and any other subsequent laws regulating the practice of nursing,
n. a professional engineer pursuant to a license under Sections 475.1 through 475.22b of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of engineering,
o. a land surveyor pursuant to a license under Sections 475.1 through 475.22b of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of land surveying,
p. an occupational therapist pursuant to Sections 888.1 through 888.15 of Title 59 of the Oklahoma Statutes and any subsequent law regulating the practice of occupational therapy,
q. a speech pathologist or speech therapist pursuant to Sections 1601 through 1622 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of speech pathology,
r. an audiologist pursuant to Sections 1601 through 1622 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of audiology,
s. a registered pharmacist pursuant to Sections 353 through 366 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of pharmacy,
t. a licensed perfusionist pursuant to Sections 2051 through 2071 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of perfusionists,
u. a licensed professional counselor pursuant to Sections 1901 through 1920 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of professional counseling,
v. a licensed marital and family therapist pursuant to Sections 1925.1 through 1925.18 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of marital and family therapy, or
w. a dietitian licensed by the Licensed Dietitian Act and subsequent laws regulating the practice of dieticians;
7. "Related professional services" means those services which are combined for professional entity purposes as follows:
a. any combination of the following professionals:
(1) a physician, surgeon or doctor of medicine pursuant to a license under Sections 481 through 524 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of medicine,
(2) an osteopathic physician or surgeon pursuant to a license under Sections 620 through 645 of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of osteopathy,
(3) a dentist pursuant to a license under Sections 328.1 through 328.51a of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of dentistry,
(4) a chiropractic physician pursuant to a license under Sections 161.1 through 161.20 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of chiropractic,
(5) a psychologist pursuant to a license under Sections 1351 through 1376 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of psychology,
(6) an optometrist pursuant to a license under Sections 581 through 606 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of optometry,
(7) a podiatric physician pursuant to a license under Sections 135.1 through 160.2 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of podiatric medicine, or
(8) a dietitian licensed by the Licensed Dietitian Act and subsequent laws regulating the practice of dieticians, or
b. any combination of the following professions:
(1) an architect pursuant to a license under Sections 46.1 through 46.37 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of architecture,
(2) a professional engineer pursuant to a license under Sections 475.1 through 475.22b of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of engineering, or
(3) a land surveyor pursuant to a license under Sections 475.1 through 475.22b of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of land surveying;
8. "Regulating board" means the board which is charged with the licensing and regulation of the practice of the profession which the professional entity is organized to render;
9. "Individual", "incorporator" and "shareholder" each include the trustee of an express trust created by a person duly licensed to render a professional service who has the right to revoke said trust and who is serving as the trustee of said trust. Any certificate required by the Professional Entity Act to be issued to an individual incorporator or shareholder may be issued to the grantor on behalf of a trust. All references in the Professional Entity Act to death and incapacity of a shareholder shall include the death and incapacity of the grantor of a trust which own stock in a professional corporation;
10. "Incapacity" of a shareholder means a determination by a court of competent jurisdiction, or otherwise by two independent licensed physicians, that the share holder is fully incapacitated or is partially incapacitated to the extent that the shareholder is not capable of rendering the professional service for which the professional corporation was organized; and
11. "Other personal representative" includes the successor trustee of an express trust owning stock in a professional corporation, which trust was created by a person duly licensed to render the professional service for which the professional corporation was organized who has the right to revoke the trust and who is the original trustee of the trust.
B. The definitions of the applicable associated act shall apply to this act, unless the context clearly indicates that a different meaning is intended.
Added by Laws 1961, p. 204, § 3, emerg. eff. July 26, 1961. Amended by Laws 1963, c. 342, § 1, emerg. eff. June 24, 1963; Laws 1970, c. 95, § 1, emerg. eff. March 30, 1970; Laws 1971, c. 164, § 1, emerg. eff. May 25, 1971; Laws 1976, c. 27, § 1; Laws 1981, c. 312, § 1, eff. Oct. 1, 1981; Laws 1983, c. 4, § 1, eff. Nov. 1, 1983; Laws 1986, c. 292, § 147, eff. Nov. 1, 1986; Laws 1990, c. 328, § 1, eff. Sept. 1, 1990; Laws 1993, c. 345, § 1, eff. Sept. 1, 1993; Laws 1994, c. 216, § 1, emerg. eff. May 20, 1994; Laws 1995, c. 339, § 2, eff. Nov. 1, 1995; Laws 1996, c. 226, § 22, eff. July 1, 1996; Laws 1998, c. 25, § 1, eff. Nov. 1, 1998; Laws 2001, c. 307, § 1, eff. Nov. 1, 2001.
§18381.1. Short title.
Sections 381.1 through 381.78 of this title and Sections 6, 7, 8, 25, 26, 27, 32, 37, 38, 39, 46, 50, 51, and 80 through 87 of this act shall be known and may be cited as the "Oklahoma Savings and Loan Code".
Added by Laws 1970, c. 101, § 1, eff. June 1, 1970. Amended by Laws 1987, c. 61, § 1, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 1, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 1, eff. Nov. 1, 2000.
§18381.2. Definitions.
As used in the Oklahoma Savings and Loan Code:
1. "Act" or "this act" means the Oklahoma Savings and Loan Code;
2. "Association" means a savings and loan association or savings bank, including any association previously referred to as a building and loan association, incorporated and now existing under the laws of this state or hereafter incorporated under this act or which is otherwise authorized to transact savings and loan association or savings bank business under this act;
3. "Branch" means any place of business separated from the main office of an association at which deposits are received, checks paid, or money lent;
4. "Capital accounts" means permanent capital stock, undivided profits, surplus or reserves;
5. "Certificate of Authority" means a certificate issued by the Commissioner authorizing an association to transact association business;
6. "Commissioner" means the State Banking Commissioner, or the State Deputy Banking Commissioner when acting on behalf of the Commissioner pursuant to subsections C or E of Section 201 of Title 6 of the Oklahoma Statutes;
7. "Consumer banking electronic facility" means any electronic device owned, operated, leased by or on behalf of a bank, savings association, or credit union other than a telephone or modem operated by a customer of a depository institution, to which a person may initiate an electronic fund transfer. The term includes, without limitations, a point-of-sale terminal, automatic teller machine, automated loan machines, video banking centers, or any other similar electronic devices;
8. "Department" means the Oklahoma State Banking Department;
9. "Deposit account" means any form of deposit, share or other account maintained by a depositor at an association, including demand deposit accounts, whether evidenced by a passbook, certificate, or otherwise, and which does not represent permanent capital stock;
10. "Deposit association" means an association which is qualified to accept deposit accounts or which becomes so qualified pursuant to this act;
11. "Earnings" means the money payable or to be credited to holders of deposit accounts by an association as payment for the use of the funds which constitute such accounts. Earnings on deposit accounts in a deposit association may be designated as interest, and earnings on other deposit accounts may be designated as dividends;
12. "Existing mutual association" means a mutual association which was authorized to do business in Oklahoma on the effective date of this act;
13. "Federal association" means a savings and loan association or savings bank organized and existing under the laws of the United States;
14. "Foreign association" means any firm, company, association, partnership or corporation, by whatever name called, actually engaged in the savings association business, which is not organized under the laws of this state or of the United States;
15. "Insured association" means an association the deposit accounts of which are insured by the Federal Deposit Insurance Corporation to the extent provided by federal law;
16. "Main office" means the office location which has been designated by the Commissioner or the Office of Thrift Supervision as the main office of an association;
17. "Member" means the holder of a deposit account of a mutual association, and also includes the owner of real estate upon which the mutual association holds a mortgage or deed of trust;
18. "Mutual association" means an association which derives its principal capital from the deposit accounts of its members and whose members have the right to participate in the management of the association. The term includes any association organized or existing under prior laws of this state. A mutual association is not a deposit association unless and until it becomes qualified as such;
19. "Net worth" of a stock association shall mean the aggregate of the permanent capital stock account, paidin surplus, earned surplus, legal and federal insurance reserves and undivided profits;
20. "Permanent capital stock" means that part of the capital or liabilities of an association representing ownership of the association and which is not subject to being withdrawn or the value paid to the holder thereof unless and until all other liabilities of the association have been fully liquidated and paid;
21. "Shares" or "share accounts" means any deposit account issued by a mutual association in the form of installment shares, optional installment shares, full paid shares, prepaid shares, savings shares, or other shares by whatever name called, evidenced by passbook, certificate, or other evidence or holding;
22. "Stock association" means an association which issues permanent capital stock and which limits the right to participate in the management of the association to the holders of such permanent capital stock. Stock associations are also deposit associations;
23. "Stockholder" means the holder of permanent capital stock;
24. "Withdrawable account" means a deposit account of an association which does not represent permanent capital stock; and
25. "Withdrawal value" means the amount paid to an association on a deposit account plus earnings credited thereto, less lawful deductions therefrom.
Added by Laws 1970, c. 101, § 2, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 1, eff. July 1, 1979; Laws 1986, c. 219, § 4, emerg. eff. June 9, 1986; Laws 1988, c. 65, § 2, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 1, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 29, eff. July 1, 1993; Laws 2000, c. 81, § 2, eff. Nov. 1, 2000.
§18-381.2a. Successor agency to Federal Savings and Loan Insurance Corporation - Construction of terms.
Wherever the terms "Federal Savings and Loan Insurance Corporation" or "FSLIC" appear in the Oklahoma Statutes, such terms shall be deemed to refer to the successor agency to the Federal Savings and Loan Insurance Corporation established pursuant to federal law.
Added by Laws 1993, c. 183, § 30, eff. July 1, 1993.
§18381.3. Conformity of existing associations.
The certificate of incorporation and certificate of authority to transact business as an association, of every association heretofore organized under the laws of this state and existing as of January 1, 2000, shall continue in full force and effect, and the same shall be deemed as modified to conform with this act without the adoption of a new certificate of incorporation or issuance of a new certificate of authority. The contracts, obligations and liabilities of every such association, and the contracts, notes, mortgages, investments and other assets and rights of every kind and nature held by it, as well as its bylaws and resolutions, shall continue in full force and effect. Every such association and every association hereafter incorporated shall have perpetual existence, subject to merger, conversion or liquidation pursuant to the provisions of this act.
Added by Laws 1970, c. 101, § 3, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 3, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 3, eff. Nov. 1, 2000.
§18381.4. Existing capital accounts.
The shares of capital, savings share accounts or other capital accounts of every existing association, and the certificates and passbooks evidencing the same, in whatever form issued, shall continue in full force and effect with full deposit account holders' rights, including the right to withdraw, to vote and to share in distribution of assets upon liquidation of the association.
Added by Laws 1970, c. 101, § 4, eff. June 1, 1970. Amended by Laws 2000, c. 81, § 4, eff. Nov. 1, 2000.
§18381.5. Abolition of Oklahoma Savings and Loan Board - Transfer of power, duties and responsibilities to State Banking Commissioner.
A. The Oklahoma Savings and Loan Board is abolished. The power, duties and responsibilities exercised by the Oklahoma Savings and Loan Board shall be transferred to the State Banking Commissioner. All unexpended funds, property, records, personnel and outstanding financial obligations and encumbrances of the Oklahoma Savings and Loan Board are hereby transferred to the Oklahoma State Banking Department.
B. Any reference to the Oklahoma Savings and Loan Board in the Oklahoma Statutes or in rules promulgated pursuant to the Oklahoma Statutes shall mean the State Banking Commissioner.
C. The rules promulgated by the Oklahoma Savings and Loan Board shall continue in effect until such rules are amended or repealed by rule of the Commissioner promulgated pursuant to the provisions of Article I of the Administrative Procedures Act, Section 250.3 et seq. of Title 75 of the Oklahoma Statutes.
Added by Laws 1970, c. 101, § 5, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 4, emerg. eff. March 25, 1988; Laws 1993, c. 183, § 31, eff. July 1, 1993; Laws 2000, c. 81, § 5, eff. Nov. 1, 2000.
§18-381.5a. Savings and Loan Advisory Council.
A. There is hereby created the "Savings and Loan Advisory Council" which shall advise the State Banking Commissioner on matters relating to the regulation of savings and loan associations in this state. The Council shall consist of five (5) members, appointed by the Commissioner. At least three of the members shall have been actively engaged as officers in the management of a state-chartered savings and loan association. Members shall serve at the pleasure of the Commissioner.
B. The Council shall meet at the call of the Commissioner. Members shall select a chairman at their first meeting and annually thereafter. A majority of the Council shall constitute a quorum for the transaction of business.
Added by Laws 1993, c. 183, § 32, eff. July 1, 1993.
§18-381.6. Repealed by Laws 1993, c. 183, § 73, eff. July 1, 1993.
§18-381.6a. Records - Confidentiality.
A. The following records in the Oklahoma State Banking Department are designated as public records:
1. All applications for association charters and branches and supporting information with the exception of personal financial records of individual applicants;
2. All records introduced at public hearings on association charter and branch applications;
3. Information disclosing the failure of an association, a foreign association and their branches in this state and the reasons therefor;
4. Reports of completed investigations which uncover a shortage of funds in an association or an out-of-state association and branches of either, after the reporting of the shortage to proper authorities by the State Banking Commissioner;
5. Names of all stockholders and officers of associations, foreign associations, holding companies, and branches of foreign associations located in this state filed in the office of the Secretary of State; and
6. Regular financial call reports of associations.
B. All other records in the Department shall be confidential and not subject to public inspection. However, the Commissioner may, in the sole discretion of the Commissioner, divulge such confidential information after receipt of a written request which shall:
1. Specify the record or records to which access is requested; and
2. Give the reasons for the request.
Such records may also be produced pursuant to a valid judicial subpoena or other legal process requiring production, if the Commissioner determines that the records are relevant to the hearing or proceeding and that production is in the best interests of justice. The records may be disclosed only after a determination by the Commissioner that good cause exists for the disclosure. Either prior to or at the time of any disclosure, the Commissioner shall impose such terms and conditions as the Commissioner deems necessary to protect the confidential nature of the record, the financial integrity of any institution to which the record relates, and the legitimate privacy of any individual named in such records.
Added by Laws 2000, c. 81, § 6, eff. Nov. 1, 2000.
§18-381.7a. Examinations - Reports by associations - Penalty.
A. 1. The State Banking Commissioner shall, at least every eighteen (18) months or as often as the Commissioner deems advisable, examine every association, and for the purpose of making such examinations and special examinations, shall have full access to all books, papers, securities, records and other sources of information under the control of the association. The Commissioner shall make and file in the office of the Commissioner a report in detail disclosing the results of such examination. The Commissioner shall mail a copy of the report to the association examined. However, the Commissioner may accept, in lieu of any three consecutive association examinations, an examination of the association by the Office of Thrift Supervision, if conducted within a reasonable period of time, and if a copy of the examination is furnished to the Commissioner.
2. The Commissioner may also accept any other report relative to the condition of an association, which shall include joint or concurrent examinations that may be obtained by the authorities within a reasonable period, in lieu of such report authorized by the laws of this state to be required of such association by the Oklahoma State Banking Department, provided a copy of such report is furnished to the Commissioner.
3. The Commissioner may enter into cooperative, coordinating and information-sharing agreements with the Federal Deposit Insurance Corporation, the Federal Home Loan Bank Board, or the Office of Thrift Supervision with respect to the periodic examination or other supervision of any association.
4. When requested in writing upon authority of the board of directors or stockholders owning a majority of the capital stock of any association, the Commissioner shall, if in the opinion of the Commissioner such examination is desirable, make or cause to be made an examination into the affairs and conditions of such association. For such examination, the association shall pay the same fees as provided for in subsection D of Section 381.15 of this title.
B. Every association shall make two reports each year. Associations may be required to make more reports if called upon by the Commissioner. All reports shall be according to the form which may be prescribed by the Commissioner. The reports shall be verified by the oath or affirmation of the president, cashier or secretary of such association and attested by the signatures of at least two of the directors. Each report shall exhibit, in detail and under appropriate headings, the resources and liabilities of the association at the close of business on any last day specified by the Commissioner, shall be transmitted to the Commissioner within thirty (30) calendar days after the call date, and may, at the option of the association, be published at the expense of the association in the same form in which it is presented to the Commissioner. The Commissioner shall also have the power to request special reports from any association whenever, in the judgment of the Commissioner, such reports are necessary in order to gain a full and complete knowledge of its condition. However, the reports authorized and required by this section, to be requested by the Commissioner, shall relate to a date prior to the date of such request and such prior date shall be specified in the request. Additionally, the Commissioner may accept, in lieu of the reports referred to in this section, reports made by associations that are members of the Federal Home Loan Bank System on forms provided by the Federal Home Loan Bank System.
C. Every association which fails to make and transmit any report required pursuant to this section shall be subject to a penalty, at the discretion of the Commissioner, not to exceed Fifty Dollars ($50.00) for each day, after the specified period, that the association delays to make and transmit its report. Whenever any association delays or refuses to pay the penalty herein imposed for a failure to make and transmit a report, the Commissioner is hereby authorized to maintain an action in the name of the state against the delinquent association for the recovery of such penalty, and all sums collected by such action shall be paid into the State Treasury to be credited to the General Revenue Fund.
D. The Commissioner may provide a form for the examinations and reports set forth in this section. All examinations and reports received by the Commissioner shall be preserved in the office of the Commissioner for a period of not less than five (5) years. The preservation may be in an electronic format, and paper copies or originals need not be retained. Such examination, reports and all other records of operating associations in the Department are to be kept confidential, except as permitted by this act.
Added by Laws 2000, c. 81, § 7, eff. Nov. 1, 2000.
§18-381.8. Repealed by Laws 1993, c. 183, § 73, eff. July 1, 1993.
§18-381.8a. Preservation of documents - Electronically stored or imaged documents or reproductions.
All documents which the Oklahoma State Banking Department is required, by any provision of this act or by any other statute or rule of this state, to retain or preserve in its possession may be retained and preserved, in lieu of retention of the original records or copies, in an electronic format and stored by electronic imaging or otherwise so that the documents may be reproduced later. Any such electronically stored or imaged document or reproduction shall have the same force and effect as the original document and be admitted in evidence as if such document was the original.
Added by Laws 2000, c. 81, § 8, eff. Nov. 1, 2000.
§18-381.9. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18381.10. Certificate of authority.
No association or foreign association shall transact business or operate in this state without a certificate of authority issued by the State Banking Commissioner.
Laws 1970, c. 101, § 10, eff. June 1, 1970; Laws 1993, c. 183, § 34, eff. July 1, 1993.
§18381.11. Supervision by State Banking Commissioner - Additional powers - Orders - Notice and hearing - Temporary orders - Cooperative agreements - Opinions.
A. The State Banking Commissioner shall have general supervision of associations, in addition to the authority set forth in other sections of this act. In addition to other powers conferred by this act, the Commissioner shall have the power to order an association, a holding company of an association, shareholder, officer, director, or employee to:
1. Maintain an accounting system in accordance with such rules as may be prescribed by the Commissioner; provided, the accounting system required shall have due regard to the size of the association;
2. Observe methods and standards which the Commissioner may prescribe for determining the value of various types of assets;
3. Charge off the whole or part of an asset which at the time of the Commissioner's action could not lawfully be acquired;
4. Write down an asset to its market value;
5. Record liens and other interests in property;
6. Obtain a financial statement from a borrower to the extent the association can do so;
7. Obtain insurance against damage to real estate taken as security;
8. Search, or obtain insurance for, the title to real estate taken as security;
9. Maintain adequate insurance against such other risks as the Commissioner may determine to be necessary and appropriate for the protection of depositors and the public; and
10. Cease and desist from engaging in any act or transaction, or doing any act in furtherance thereof, which would constitute a violation of the provisions of this act, applicable federal laws, the applicable laws of another state, or a lawful regulation issued thereunder, or to cease and desist from engaging in any unsafe or unsound practice.
B. Before issuing an order provided for in subsection A of this section, the Commissioner shall give reasonable notice and opportunity for a hearing. However, if the Commissioner makes written findings of fact that the protection of depositors will be harmed by delay in issuing an order provided for in subsection A of this section, the Commissioner may issue a temporary order pending the hearing on the order provided for in subsection A of this section. The temporary order shall remain in effect until three (3) business days after the hearing on the order provided for in subsection A of this section and shall become final if the association subject to the order fails within fifteen (15) days after the receipt of the order to request a hearing to determine whether the temporary order should be modified, vacated, or become final. If a hearing on the temporary order is not held upon written request, the temporary order shall dissolve, and the order provided for in subsection A of this section shall not be issued except upon reasonable notice and opportunity for hearing.
C. The Commissioner may enter into cooperative, coordinating, and information-sharing agreements with any other supervisory agencies or any organization affiliated with or representing one or more supervisory agencies with respect to the periodic examination or other supervision of any association, bank holding company, or branch in this state or an out-of-state association, or any branch of an Oklahoma-chartered association in any other state, and the Commissioner may accept such reports of examination and reports of investigation in lieu of conducting the Commissioner's own examinations or investigations.
D. The Commissioner may enter into cooperative agreements with other regulatory agencies to facilitate the regulation of associations and holding companies doing business in this state. The Commissioner may accept reports of examinations and other records from such other agencies in lieu of the Oklahoma State Banking Department conducting the examinations of associations controlled by out-of-state holding companies. The Commissioner may take any action jointly with other regulatory agencies having concurrent jurisdiction over associations and holding companies or may take such actions independently in order to carry out the Commissioner's responsibilities.
E. 1. The Commissioner may issue interpretive statements containing matters of general policy for the guidance of associations subject to this act. The Commissioner may amend or repeal an interpretative statement by issuing an amended statement or notice of repeal of a statement and shall provide notice thereof and make it available upon request to all associations chartered under this act.
2. The Commissioner may issue opinions in response to specific requests from members of the public or the association industry directly or through the Deputy State Banking Commissioner or the attorneys of the Department. The Commissioner may amend or repeal an opinion by issuing an amended statement or notice of repeal of an opinion and shall provide notice thereof and make it available upon request to all associations chartered under this act. However, the requesting party may rely on the original opinion if:
a. all material facts were originally disclosed to the Commissioner,
b. considerations of safety and soundness of the affected association are not implicated with respect to further and prospective reliance on the original opinion, and
c. the text and interpretation of relevant governing provisions of this act have not been changed by legislative or judicial action.
3. An interpretive statement or opinion issued under this section does not have the force of law and is not a rule.
F. Upon failure of such association to comply with the order or requirements of the Commissioner, the Commissioner may suspend the certificate of authority to transact business of such association, or the Commissioner may place the association in receivership in the manner provided by this act.
Added by Laws 1970, c. 101, § 11, eff. June 1, 1970. Amended by Laws 1993, c. 183, § 35, eff. July 1, 1993; Laws 2000, c. 81, § 9, eff. Nov. 1, 2000.
§18-381.12. Repealed by Laws 1993, c. 183, § 73, eff. July 1, 1993.
§18381.13. Savings and loan administrator.
The State Banking Commissioner may appoint a savings and loan administrator with special duties and authority of conducting and supervising examinations of associations in addition to such other duties as the Commissioner may assign to the savings and loan administrator.
The bond of the savings and loan administrator shall be the same as that set for the Deputy State Banking Commissioner.
Added by Laws 1970, c. 101, § 13, eff. June 1, 1970. Amended by Laws 1979, c. 173, § 10; Laws 1988, c. 65, § 7, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 10, eff. Nov. 1, 2000.
§18381.14. Limitation of liability.
The State Banking Commissioner, or any member of his staff including any member of the Savings and Loan Advisory Council, shall not be liable in any civil action for damages for any act done or omitted in good faith in performing the functions of his office.
Laws 1970, c. 101, § 14, eff. June 1, 1970; Laws 1993, c. 183, § 36, eff. July 1, 1993.
§18-381.15. Examination and audit reports from Director of the Office of Thrift Supervision - Assessments and fees - Special examinations.
A. In the case of any insured association which is examined periodically by the Director of the Office of Thrift Supervision, and whose financial records are audited periodically in accordance with regulations of the Director of the Office of Thrift Supervision, the State Banking Commissioner may accept such examination and audit reports, and rely upon accuracy thereof, in lieu of examinations by the savings and loan administrator. It shall be the responsibility of each insured association to provide such reports to the Commissioner within ten (10) days of such time as such reports are received from the agency, person or firm preparing them. The Commissioner may require a special examination of any association to be made at any time when in the judgment of the Commissioner an examination may be necessary.
B. The Commissioner shall charge and collect assessments from each association chartered pursuant to this act on each One Thousand Dollars ($1,000.00) of assets, or major fraction thereof, at a rate established by the Commissioner. The Commissioner may charge and collect assessments on an annual basis and may, in addition to any annual assessment, charge and collect a special assessment from each association, at rates established by the Commissioner. Assessments shall be deposited in the Oklahoma State Banking Department revolving fund pursuant to Section 211.1 of Title 6 of the Oklahoma Statutes. Effective January 1, 2005, and each year thereafter, twenty percent (20%) of all assessments collected pursuant to this subsection shall be deposited to the General Revenue Fund of the State Treasury. The annual assessments shall be paid to the Oklahoma State Banking Department no later than the fifth day of February in each year.
C. The Commissioner shall charge and collect from each association under the supervision of the Commissioner an annual fee, in addition to the assessment set forth in subsection B of this section, of not more than Five Hundred Dollars ($500.00), which shall be deposited in the Oklahoma State Banking Department revolving fund as set forth in Section 211.1 of Title 6 of the Oklahoma Statutes.
D. Whenever it is deemed advisable by the Commissioner, a special examination of an association may be conducted. The expense of the Department necessarily incurred in the special examination shall be chargeable to the association at a rate not in excess of Fifty Dollars ($50.00) per examiner per hour plus travel expenses as provided by Section 201.1 of Title 6 of the Oklahoma Statutes for each examining person while engaged at such association.
E. Each foreign association doing business in this state under a certificate of authority shall furnish to the Commissioner, with each annual examination report, a statement showing the total amount of Oklahoma real estate loans and other loans made to Oklahoma residents. The annual supervisory fee of every such foreign association shall be computed and paid on the aggregate amount of such loans at the rate of twelve cents ($0.12) per One Thousand Dollars ($1,000.00) of such loans.
F. Except as otherwise provided by law, all fees set by the Commissioner or otherwise provided for in rules promulgated by the Commissioner shall be deposited in the Department revolving fund pursuant to Section 211.1 of Title 6 of the Oklahoma Statutes.
Added by Laws 1970, c. 101, § 15, eff. June 1, 1970. Amended by Laws 1975, c. 236, § 2, emerg. eff. May 30, 1975; Laws 1979, c. 173, § 11; Laws 1988, c. 65, § 8, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 2, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 37, eff. July 1, 1993; Laws 2000, c. 81, § 11, eff. Nov. 1, 2000; Laws 2003, c. 356, § 8, emerg. eff. June 3, 2003.
§18381.16. Filing requirements for new mutual and stock associations.
At any time hereafter when ten or more individuals, residents of this state, desire to form a mutual association, or one or more individuals, residents of this state, desire to form a stock association under the provisions of this act, such persons, hereinafter referred to as the incorporators, shall file with the State Banking Commissioner the following:
1. Four copies of the proposed certificate of incorporation, signed and acknowledged by all of the incorporators and addressed to the Secretary of State;
2. An original and three copies of an application for a certificate of authority to transact business as an association, addressed to the Commissioner;
3. Four copies of the proposed bylaws for the proposed association;
4. A remittance of Two Hundred Dollars ($200.00) payable to the Secretary of State of Oklahoma, as the incorporation fee in lieu of the fees prescribed by paragraph 9 of subsection A of Section 1142 of this title, which shall not be applicable to an association; and
5. A deposit of Two Thousand Dollars ($2,000.00) payable to the Commissioner to be used for the purpose of defraying expenses of an investigation and report of the feasibility of the proposed association and other expenses incidental to the consideration of the application.
Added by Laws 1970, c. 101, § 16, eff. June 1, 1970. Amended by Laws 1975, c. 236, § 3, emerg. eff. May 30, 1975; Laws 1984, c. 229, § 7, operative July 1, 1984; Laws 1988, c. 65, § 9, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 3, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 38, eff. July 1, 1993; Laws 2000, c. 81, § 12, eff. Nov. 1, 2000.
§18381.17. Contents of certificate of incorporation.
The certificate of incorporation shall set forth:
1. The name of the association;
2. That its term of existence is perpetual;
3. That the purpose for which it is formed is to engage in the business of an association pursuant to the Oklahoma Savings and Loan Code and the rules promulgated thereunder;
4. The place where it is to maintain the main office for the transaction of business;
5. The names and addresses of the incorporators, and the amounts of the deposit accounts or number of shares of stock subscribed by each of them;
6. If the association will be a stock association, the number of shares of stock of each class to be authorized and issued and the par value per share; and
7. Such other proper provisions to govern the business and affairs of the association as may be desired by the incorporators.
Added by Laws 1970, c. 101, § 17, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 10, emerg. eff. March 25, 1988; Laws 1993, c. 183, § 39, eff. July 1, 1993; Laws 2000, c. 81, § 13, eff. Nov. 1, 2000.
§18381.18. Application and supporting data.
The application for a certificate of authority to transact business as an association shall be accompanied by data concerning the community in which the proposed association is to be located, the occupations of the incorporators, and a plan for payment of expenses of the proposed association until it is incorporated and is granted a certificate of authority, in the case of a stock association, or until it becomes selfsustaining from its own operating income in the case of a mutual association.
Added by Laws 1970, c. 101, § 18, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 11, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 14, eff. Nov. 1, 2000.
§18381.19. Order - Certificate of authority.
The State Banking Commissioner shall act upon and issue an order granting or denying each application for a certificate of authority. If the Commissioner finds that the application should be granted, the Commissioner shall designate the amount of deposit accounts required and fix a reasonable time within which the funds subscribed may be placed in escrow in a bank or trust company approved by the Commissioner, to be delivered to the association after incorporation or returned to the subscribers if incorporation is not completed. The Commissioner may also require the incorporators to advance funds necessary to pay organizational expenses and other expenses for starting business, such advances to be repaid by the association after its incorporation and the granting of its certificate of authority, in the case of a stock association, or after its income is sufficient to meet reserve requirements, in the case of a mutual association, and further, in the case of a mutual association, to pay reasonable earnings on the deposit accounts of the association. If and when all requirements are met, a certificate of authority shall be issued by the Commissioner. The Secretary of State shall file the approved certificate of incorporation upon receipt of the incorporation fee. If the deposit accounts of the association are to be insured, approval shall be contingent upon the making, by the proposed association, of a bona fide application for insurance of accounts and deposits by the Federal Deposit Insurance Corporation and upon approval of such application by the Federal Deposit Insurance Corporation.
Added by Laws 1970, c. 101, § 19, eff. June 1, 1970. Amended by Laws 1975, c. 236, § 4, emerg. eff. May 30, 1975; Laws 1988, c. 65, § 12, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 4, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 40, eff. July 1, 1993; Laws 2000, c. 81, § 15, eff. Nov. 1, 2000.
§18381.20. Payment into escrow account - Required savings capital.
A. Before a certificate of authority is issued for a new mutual association, there shall be paid into the escrow fund as subscriptions to deposit accounts of the proposed association such aggregate amount as the State Banking Commissioner shall deem adequate, but, if insured, not less than an amount necessary to meet the requirements of the Federal Deposit Insurance Corporation. If the organizers intend to organize and operate the association without federal insurance on its deposit accounts, the amount paid into the escrow fund as subscriptions to deposit accounts of the proposed association shall be at the sole discretion of the Commissioner.
B. No permanent capital stock association may be organized hereafter unless, prior to the filing of its certificate of incorporation, such amounts of its permanent capital stock as the Commissioner shall deem adequate, but, if insured, not less than an amount necessary to meet the requirements of the Federal Deposit Insurance Corporation shall have been subscribed for and paid for in lawful money of the United States. If the organizers intend to organize and operate the association without federal insurance on its deposit accounts, the amount of permanent capital stock required shall be at the sole discretion of the Commissioner.
Added by Laws 1970, c. 101, § 20, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 2, eff. July 1, 1979; Laws 1987, c. 61, § 3, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 13, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 5, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 41, eff. July 1, 1993; Laws 2000, c. 81, § 16, eff. Nov. 1, 2000.
§18381.21. Corporate existence Organizational meeting.
The corporate existence of an association shall begin on the date of filing of the certificate of incorporation with the Secretary of State and within thirty (30) days thereafter an organizational meeting shall be held by the deposit account holders or permanent capital stock subscribers pursuant to notice mailed to each of them not less than seven (7) days before the date of the meeting. At such meeting, bylaws of the association shall be adopted and directors shall be elected.
Added by Laws 1970, c. 101, § 21, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 3, eff. July 1, 1979; Laws 1988, c. 65, § 14, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 17, eff. Nov. 1, 2000.
§18381.22. Corporate name.
The name of every association hereafter incorporated pursuant to this act, and of any existing association which hereafter changes its name, shall be approved by the State Banking Commissioner. The name shall not so nearly resemble the name of another association or federal association as to be likely to deceive the public. Associations may operate under trade names as approved by the Commissioner.
Added by Laws 1970, c. 101, § 22, eff. June 1, 1970. Amended by Laws 1987, c. 61, § 4, emerg. eff. May 4, 1987; Laws 1990, c. 118, § 6, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 42, eff. July 1, 1993; Laws 2000, c. 81, § 18, eff. Nov. 1, 2000.
§18381.23. Exclusiveness of name.
No person, firm, company, partnership or corporation, either domestic or foreign, unless lawfully authorized to do business in this state under the provisions of this act, shall do business in this state under any name or title which contains the terms "savings and loan", "building and loan", "savings association", "savings bank" or combination of such terms in any manner which indicates or reasonably implies that its business is of the character or kind carried on or transacted by an association, or that is likely to lead any person to believe that such business is that of an association. Upon application by the Commissioner, or any association, a court of competent jurisdiction may issue an injunction to restrain any such entity from violating or continuing to violate the provisions of this section.
Added by Laws 1970, c. 101, § 23, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 15, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 19, eff. Nov. 1, 2000.
§18381.24. Change of office location - Change of name.
No association shall move its main office or branch office, or change its name except with permission granted by order of the State Banking Commissioner. In the event permission is granted to move the main office to a town or city other than that named in the certificate of incorporation of the association, or to change the name, an amended certificate of incorporation shall be filed.
Added by Laws 1970, c. 101, § 24, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 16, emerg. eff. March 25, 1988; Laws 1990, c. 173, § 19, emerg. eff. May 3, 1990; Laws 1993, c. 183, § 43, eff. July 1, 1993; Laws 2000, c. 81, § 20, eff. Nov. 1, 2000.
§18-381.24a. Branch banking - Deposit limitation - Certificate - Penalty.
A. Beginning on the effective date of this act, upon approval of the State Banking Commissioner, any association shall be authorized to establish and operate in this state, on real property owned or leased by the association, an unlimited number of branches by acquisition, de novo, or otherwise. Such branches may be fixed or mobile, and any permissible function, business, power, or activity of any kind of the association may be performed or engaged in at such location. However, branches established by acquisition shall be subject to the limitations as set forth in subsection B of this section.
B. 1. It shall be unlawful for any association to acquire any other association, federal association or bank in this state or any portion of its assets if such acquisition would result in the association having direct or indirect ownership or control of more than fifteen percent (15%) of the aggregate deposits of all financial institutions located in this state which have deposits insured by the Federal Deposit Insurance Corporation as determined by the Commissioner on the basis of the most recent reports of such institutions to their supervisory authorities which are available at the time of the proposed acquisition.
2. The deposit limitation provided for in this subsection shall not apply to disallow an acquisition of a bank, association or federal association if control results only by reason of ownership or control of shares of such financial institution acquired directly or indirectly:
a. in a good faith fiduciary capacity, except when such shares are held for the benefit of the acquiring association's shareholders, or
b. by an association in the regular course of securing or collecting a debt previously contracted in good faith, or
c. at the request of or in connection with the exercise of regulatory authority for the purpose of preventing imminent failure of the bank, association or federal association or to protect the depositors thereof as determined by the principal supervisory agency in its sole discretion.
Provided, however, at the end of a period of five (5) years from the date of acquisition, for the circumstances set forth in subparagraphs b and c of this paragraph, the deposits of the acquired bank or association or federal association shall be included in computing the deposit limitation and if deposits are in excess, appropriate reductions and disposition shall be made within six (6) months to meet such limitations. Further, in the circumstances set forth in subparagraph c of this paragraph, the Commissioner and the Federal Deposit Insurance Corporation shall give priority in authorizing any such acquisition to any acquiring association whose total deposits do not exceed the deposit limitation.
C. 1. No association shall be permitted to establish or operate a branch except upon certificate issued by the Commissioner or Office of Thrift Supervision.
2. The application for a certificate to establish, operate, or relocate a branch of an association shall comply with the regulations of the Commissioner.
D. The provisions of this section shall not be construed in derogation or denial of the right to operate and maintain facilities as provided for in Sections 381.24b, 381.24c and 381.24d of this title.
E. A violation of any portion of this section, upon conviction, shall be a misdemeanor punishable by a fine not exceeding Five Hundred Dollars ($500.00). Each day's violation shall constitute a separate offense.
F. Nothing contained in this section shall be construed to limit the authority of federal savings associations to branch in accordance with federal law and regulations.
Added by Laws 1990, c. 173, § 20, emerg. eff. May 3, 1990. Amended by Laws 1992, c. 295, § 29, eff. July 1, 1992; Laws 1993, c. 183, § 44, eff. July 1, 1993; Laws 1994, c. 17, § 1, emerg. eff. April 4, 1994; Laws 1996, c. 48, § 1, emerg. eff. April 8, 1996; Laws 2000, c. 81, § 21, eff. Nov. 1, 2000; Laws 2000, c. 205, § 37, emerg. eff. May 17, 2000.
§18-381.24b. Detached facilities - Certificate - Making of loans prohibited - Penalty.
A. 1. Any association may maintain and operate, subject to the approval of the State Banking Commissioner as evidenced by the certificate of the Commissioner, outside attached facilities and detached facilities on real property owned or leased by the association having one or more tellers' windows for drive-in or walk-up service or both.
2. Any branch may maintain and operate outside attached facilities having one or more tellers' windows for drivein or walkup service or both on property owned or leased by the association.
B. 1. No association shall be permitted to maintain and operate such additional outside facilities except upon certificate issued by the Commissioner. The issuance of the certificates shall rest solely in the discretion of the Commissioner.
2. The application for a certificate to maintain and operate a detached facility shall comply with the rules of the Commissioner. An application fee shall be payable to the Oklahoma State Banking Department in an amount set by rule of the Commissioner.
3. Any association function may be performed at the facilities except that of making loans. Upon the recommendation of the Commissioner, the Attorney General shall bring an appropriate action to enjoin an association from conducting the making of loans at such facilities.
4. Any association validly operating a detached facility prior to May 3, 1990, shall be granted a certificate to continue its operation at such facility.
5. The provisions of this section shall not be construed in derogation or denial of the right to operate and maintain facilities as provided for in Sections 381.24c and 381.24d of this title.
C. A violation of any portion of this section shall be and constitute a misdemeanor punishable upon conviction by a fine not exceeding Five Hundred Dollars ($500.00). Each day's violation shall constitute a separate offense.
D. Nothing contained in this section shall be construed to limit the authority of federal savings associations to maintain and operate outside or detached facilities in accordance with federal law and regulations.
Added by Laws 1990, c. 173, § 21, emerg. eff. May 3, 1990. Amended by Laws 1993, c. 183, § 45, eff. July 1, 1993; Laws 2000, c. 81, § 22, eff. Nov. 1, 2000.
§18-381.24c. Military savings facilities - Certificate - Application - Functions permitted - Penalty.
A. Any association may, subject to the approval of the State Banking Commissioner as evidenced by its certificates, and subject to the approval of the military installation commander as evidenced by a letter of approval, maintain and operate a military savings facility on any military installation located in this state.
B. As used in this section, the term "military savings facility" shall mean a detached facility or branch maintained by an association upon a military installation within this state, provided such military savings facility must be within the confines of a military reservation and located upon property owned or leased by the United States government.
C. 1. No association shall be permitted to maintain and operate such military savings facility, except on certificate issued by the Commissioner. The issuance of such certificate shall rest solely in the discretion of the Commissioner.
2. The application for a certificate to maintain and operate a military savings facility shall comply with the regulations of the Commissioner. An application fee shall be payable to the Oklahoma State Banking Department in an amount set by rule of the Commissioner.
3. No association function shall be performed at the facility save that of accepting deposits, cashing checks, making change, selling drafts, cashier's checks, money orders, traveler's checks, etc., accepting payment for personal utility bills, redeeming and selling United States Savings Bonds, and such other services as the installation commander may request, in writing, of the association. Upon the recommendation of the Commissioner, the Attorney General shall bring an appropriate action to enjoin an association from conducting association functions at such facility other than those herein granted.
D. A violation of any portion of this section shall be and constitute a misdemeanor punishable upon conviction by a fine not exceeding Five Hundred Dollars ($500.00). Each day's violation shall constitute a separate offense.
Added by Laws 1990, c. 173, § 22, emerg. eff. May 3, 1990. Amended by Laws 1993, c. 183, § 46, eff. July 1, 1993; Laws 2000, c. 81, § 23, eff. Nov. 1, 2000.
§18-381.24d. Consumer banking electronic facilities - Assistance in operation of facility - Access - Authority of federal savings associations.
A. Any association may install, operate or utilize consumer banking electronic facilities, provided written notice is given to the State Banking Commissioner prior to the commencement of operations of each facility. Such notice shall contain any reasonable descriptive information pertaining to the facility as shall be required by the rules or regulations of the Commissioner.
B. A consumer banking electronic facility, when located other than at an association's main office or detached facility, may be operated exclusively by association customers or transactions may be performed through the assistance of any person provided that person is not employed, either directly or indirectly, by any association, association holding company or subsidiary thereof. Such assistance shall not be deemed to be engaging in association business. Persons assisting association customers at the site of a consumer banking electronic facility may be trained by association employees and nothing in this section shall be construed to prohibit periodic servicing of a consumer banking electronic facility by an association employee. Under no circumstances may an employee of an association, association holding company, affiliate or subsidiary thereof perform transactions for others at the consumer banking electronic facility. However, a consumer banking electronic facility located on the business premises of a person engaged in the sale of goods or services may be used to perform internal nonbanking functions for such persons.
C. Consumer banking electronic facility transactions shall be considered as the conduct of association transactions at the main office of the association for which the data is transmitted.
D. 1. An association or combination of associations or business entity or organization offering such services to an association which establishes or maintains a manned or unmanned consumer banking electronic facility or facilities shall make the use thereof available to associations located in this state on a fair and equitable basis of nondiscriminatory access and rates. Provided, that if a retailer does accept any credit or debit card or other system, nothing herein shall be construed to deprive such retailer of the right to accept or reject any other credit or debit card or other system offered by any other association or business entity.
2. An association or combination of associations which establishes and maintains a manned consumer banking electronic facility or facilities may make the use thereof available on a reciprocal basis to banks and credit unions located in this state on a fair and equitable basis of nondiscriminatory access and rates.
3. In the event of a dispute, the Commissioner shall have the jurisdiction to determine, after a hearing conducted upon notice and pursuant to regulations adopted by the Commissioner, what constitutes a fair and equitable basis of nondiscriminatory access and rates, based upon cost of installation and proportionate usage of the facility. A principal factor in any equitable formula of shared costs of installation and/or operation shall give weight to the number of transactions of each participating association.
4. Proceedings under this section shall be subject to Article II of the Administrative Procedures Act, Section 309 et seq. of Title 75 of the Oklahoma Statutes.
E. Nothing contained in this section shall be construed to limit the authority of federal savings associations to install, operate or utilize consumer banking electronic facilities in accordance with federal law and regulations.
Added by Laws 1990, c. 173, § 23, emerg. eff. May 3, 1990. Amended by Laws 1993, c. 183, § 47, eff. July 1, 1993; Laws 2000, c. 81, § 24, eff. Nov. 1, 2000.
§18-381.24e. Operations centers.
Upon written notice to the State Banking Commissioner, any association may establish one or more operations centers on property owned or leased by the association. For purposes of this section, "operations center" means an association facility separated from the main office of the association at which only the following association operations are conducted: computer processing, information systems, electronic communications, loan payment processing, bookkeeping, item processing, currency and coin processing and storage, data processing, and all support functions related thereto.
Added by Laws 2000, c. 81, § 25, eff. Nov. 1, 2000.
§18-381.24f. Origination of loans and deposit accounts at locations other than main or branch office.
Subject to rules as may be promulgated by the State Banking Commissioner, an association may utilize employees of the association to originate loans or originate deposit accounts, or both, at locations other than the main office or a branch office of such association, provided that the loan decision is made and the loan is funded at the main office or a branch office of the association and provided that no deposits shall be accepted or received at the deposit origination office.
Added by Laws 2000, c. 81, § 26, eff. Nov. 1, 2000.
§18-381.24g. Association subsidiary as agent of holding company.
A. Any association subsidiary of an association holding company may receive deposits, renew time deposits, close loans, service loans, and receive payments on loans and other obligations as an agent for any other bank or association owned or controlled by the same holding company.
B. Despite any other provision of law, an association as an agent in accordance with subsection A of this section for an affiliate shall not be considered a branch of the affiliate.
C. An agency relationship between subsidiary institutions pursuant to subsection A of this section shall be on terms that are consistent with safe and sound practices and all applicable regulations of any appropriate regulatory agency.
Added by Laws 2000, c. 81, § 27, eff. Nov. 1, 2000.
§18381.25. Amendment of certificate of incorporation.
An amended certificate of incorporation must be signed and acknowledged by all of the directors of the association, and shall conform with the requirements for the original certificate of incorporation except that the names and addresses of the directors shall be stated in lieu of names of the incorporators. An amended certificate of incorporation shall be submitted to the State Banking Commissioner for approval and shall be filed with the Secretary of State upon payment by the association of the statutory filing fees for filing an amended certificate of incorporation.
Added by Laws 1970, c. 101, § 25, eff. June 1, 1970. Amended by Laws 1987, c. 61, § 5, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 17, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 28, eff. Nov. 1, 2000.
§18381.26. Bylaws Resolutions of savings and loan associations Limiting director's liability.
A. The bylaws of every association shall prescribe the notice and the time and place of the annual meeting of members or stockholders; the requirements for holding special meetings of members or stockholders; and the manner of determining the number and terms of office of the directors.
B. 1. Provisions with respect to directors' meetings, the selection and duties of officers, making of loans, issuance of various classes of deposit accounts or permanent capital stock, distribution of earnings, amendments of the bylaws, rights and obligations of members or stockholders, and any other matters concerning operations of the association not in conflict with this act or rules of the State Banking Commissioner and not otherwise inconsistent with law or the certificate of incorporation of the association may be included in the bylaws.
2. The bylaws or a resolution of an association as adopted or amended by the members or stockholders may include a provision eliminating or limiting the personal liability of a director to the association or its holding company, or to the shareholders of either for any negligence in the performance of his duties but not for:
a. any breach of the director's duty of loyalty to the association or its holding company, or to the shareholders of either,
b. acts or omissions not in good faith or which involve intentional misconduct or a violation of law, or
c. any transaction from which the director derived an improper personal benefit.
C. All bylaws and amendments hereafter adopted shall be promptly submitted to the Commissioner for approval. Any decision of the Commissioner disapproving proposed amendments may be appealed pursuant to the provisions of Section 207 of Title 6 of the Oklahoma Statutes.
D. The bylaws of each association shall constitute laws of the association, subordinate to this act, to the rules of the Commissioner, and to applicable federal regulations.
E. The provisions of the Oklahoma General Corporation Act shall, insofar as the Oklahoma General Corporation Act is not inconsistent with this act, govern associations operating pursuant to the provisions of this act.
Added by Laws 1970, c. 101, § 26, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 4, eff. July 1, 1979; Laws 1987, c. 61, § 6, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 18, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 7, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 48, eff. July 1, 1993; Laws 2000, c. 81, § 29, eff. Nov. 1, 2000.
§18381.27. Membership and voting rights.
Every holder of a deposit account of a mutual association and every borrower on the security of a mortgage or acquiring ownership of property upon which a mortgage is held by the association shall be deemed a member of such association. In a mutual association, a holder of a deposit account shall be entitled to one vote for each One Hundred Dollars ($100.00) of the deposit account of the holder, and a mortgagor or owner of property on which the association holds a mortgage shall be entitled to one vote at all meetings of the members. Holders of the capital stock in a stock association shall have exclusive voting rights.
Added by Laws 1970, c. 101, § 27, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 5, eff. July 1, 1979; Laws 2000, c. 81, § 30, eff. Nov. 1, 2000.
§18381.28. Members meetings.
An annual meeting of the members or stockholders of each association shall be held to elect directors, and special meetings of the members or stockholders may be called and held pursuant to such notice as may be provided by the bylaws.
Amended by Laws 1988, c. 65, § 19, emerg. eff. March 25, 1988.
§18381.29. Voting by proxy.
At any meeting of the members or stockholders of an association or federal association voting may be in person or by proxy appointing a person or group to cast the votes of the member or stockholder, provided that no proxy shall be eligible to be voted at any meeting unless such proxy shall have been filed with the association at least five (5) days prior to the date of the meeting. Unless otherwise specified in the proxy, every proxy shall continue in force from year to year until revoked by a writing duly delivered to the secretary or until superseded by a subsequent proxy.
Laws 1970, c. 101, § 29, eff. June 1, 1970; Laws 1978, c. 168, § 7, eff. July 1, 1979.
§18381.30. Quorum.
At an annual meeting or at any special meeting of the members any number of members present in person or by proxy eligible to be voted constitutes a quorum. At an annual meeting or at any special meeting of a stock association, stockholders of a majority of the stock held shall be present in person or by proxy eligible to be voted to constitute a quorum. A majority of all votes cast at any meeting of members shall determine any questions unless this act specifically provides otherwise.
Laws 1970, c. 101, § 30, eff. June 1, 1970; Laws 1978, c. 168, § 8, eff. July 1, 1979.
§18381.31. Directors.
A. The operating and business policies of each association shall be directed by a board of directors of not less than five nor more than fifteen persons elected by a majority of the votes of the members or stockholders present in person or by proxy at the annual meeting. Directors need not be members or stockholders unless so required by the association's certificate of incorporation or bylaws. A majority of the directors shall be bona fide residents of this state. Directors may be elected for a longer term than one (1) year if the bylaws so provide, but no director may be elected for a term longer than three (3) years, and the terms of at least two directors shall expire each year.
B. If a vacancy occurs with respect to the board of directors, the remaining directors, though less than a quorum, may fill such vacancy by electing a director or directors to serve the remainder of the unexpired term for the class of directors in which such vacancies exist.
C. The board of directors shall meet each year, following the annual members' or stockholders' meeting, and shall elect the officers at such meeting. Such additional meetings of the board of directors shall or may be held as the bylaws shall require or permit. A majority of the directors, if present at any meeting, shall constitute a quorum unless the bylaws otherwise provide.
Added by Laws 1970, c. 101, § 31, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 9, eff. July 1, 1979; Laws 1986, c. 219, § 5, emerg. eff. June 9, 1986; Laws 1987, c. 61, § 7, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 20, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 31, eff. Nov. 1, 2000.
§18-381.31a. Examination of association affairs by board of directors.
The board of directors of every association shall examine, at least once in each calendar year at intervals of not more than fifteen (15) months, all the affairs of the association including the character and value of investments and loans, the efficiency of operating procedures, and such other matters as the Commissioner prescribes. A report of the examination shall be submitted promptly to the Commissioner and shall embody such information as the Commissioner requires. The board of directors may provide that such examination shall be conducted by a committee of not less than three directors, by certified public accountants, or by independent auditors responsible only to the board of directors. Such examination shall be made when practicable without the assistance of the executive officers of the bank or trust company. Such report of examination shall be reviewed by the directors at the next meeting of the board of directors.
Added by Laws 2000, c. 81, § 32, eff. Nov. 1, 2000.
§18381.32. Officers.
The officers of an association shall consist of a president to be chosen from among the directors, one or more vicepresidents, a secretary, a treasurer, and any other officers authorized by the bylaws or by the directors. Any number of offices may be held by the same person unless the certificate of incorporation or bylaws provide otherwise.
Amended by Laws 1988, c. 65, § 21, emerg. eff. March 25, 1988.
§18381.33. Indemnification Directors, officers, employees and agents.
Any association shall have power to indemnify any person who is or was an officer, director, employee or agent of the association, or who is or was serving at the request of the association as an officer, director, employee or agent of another corporation, partnership, joint venture, trust or other enterprise unless such person has violated paragraph 2 of subsection B of Section 381.26 of this title, in accordance with Section 1031 of this title.
Amended by Laws 1987, c. 61, § 8, emerg. eff. May 4, 1987.
§18381.34. Fidelity bonds Waiver.
Every association must protect itself against loss of money or property by or through any fraud, dishonesty, forgery or alteration, larceny, theft, embezzlement, or other criminal act of any director, officer, employee or agent, by a blanket bond covering all personnel and agents or by individual fidelity bonds, issued by a corporate surety. The amount and form of each such bond and sufficiency of the surety thereon shall be subject to review and disapproval by the State Banking Commissioner. The Commissioner may waive the bond requirement, in whole or in part, upon a showing by the association that such bonding is either unavailable, economically infeasible, or an imprudent business decision. Such waiver shall be for a period of time, to be stated in the Commissioner's order, not exceeding one (1) year, subject to extension upon further application. The order of the Commissioner waiving the bond requirement shall be conditioned on the association continuing to seek an available, economically feasible bond.
Added by Laws 1970, c. 101, § 34, eff. June 1, 1970. Amended by Laws 1987, c. 61, § 9, emerg. eff. May 4, 1987; Laws 2000, c. 81, § 33, eff. Nov. 1, 2000.
§18-381.35. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18381.36. Reserves and liquidity.
Every association shall set up and maintain reserves for the purpose of absorbing losses and shall maintain such portion of its assets in cash and other liquid assets as shall be required by regulations of the State Banking Commissioner and by other applicable federal regulations.
Added by Laws 1970, c. 101, § 36, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 22, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 8, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 49, eff. July 1, 1993; Laws 2000, c. 81, § 34, eff. Nov. 1, 2000.
§18381.37. Capital Deposit accounts Liability.
A. A mutual association may raise capital in the form of deposit accounts or shares for such fixed, minimum or indefinite periods of time as are authorized by its bylaws or by regulations of the State Banking Commissioner. Such deposit accounts shall all have equal priority upon liquidation. A mutual association may issue such passbooks, certificates, and other evidence of deposit accounts as are now or hereafter so authorized. With the exception of forms now in use by existing associations, all such forms evidencing deposit accounts shall be promptly submitted to the Commissioner, or to the Director of the Office of Thrift Supervision, and the issuance of any such form shall be immediately discontinued in the event of disapproval. Unless otherwise provided by its bylaws, the total amount of deposit account liability of a mutual association is unlimited.
B. A stock association may incur liabilities in the form of deposit accounts for such fixed, minimum or indefinite periods of time as are authorized by its bylaws or by regulations of the Commissioner. Such deposits shall all have equal priority upon liquidation. A stock association may issue such passbooks, certificates and other evidence of deposits as are now or may hereafter be authorized for deposit associations. New or proposed forms evidencing deposit accounts shall be promptly submitted to the Commissioner and to the Director of the Office of Thrift Supervision, and the issuance of any such form shall be immediately discontinued in the event of disapproval. In stock associations, holders of deposit accounts shall participate first in all assets upon liquidation, but only to the extent of their deposit accounts. Unless otherwise provided by its bylaws, the total amount of deposit account liability of a stock association is unlimited.
Added by Laws 1970, c. 101, § 37, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 11, eff. July 1, 1979; Laws 1988, c. 65, § 23, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 9, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 50, eff. July 1, 1993; Laws 2000, c. 81, § 35, eff. Nov. 1, 2000.
§18381.38. Classification of deposit accounts.
Any association may classify its deposit accounts according to the character, amount or duration thereof, or regularity of additions thereto, and may pay additional or higher rates of earnings on accounts based on such classifications than is paid on regular deposit accounts, provided that any such higher rate, or bonus, to be paid on any class of accounts shall not exceed the limitations prescribed by the State Banking Commissioner or by applicable federal regulations. A mutual association may also classify its accounts according to type of account, such as full paid, single payment, installment, optional installment, bonus or other types of accounts designated by the bylaws and permitted by the Commissioner.
Added by Laws 1970, c. 101, § 38, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 12, eff. July 1, 1979; Laws 1990, c. 118, § 10, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 51, eff. July 1, 1993; Laws 2000, c. 81, § 36, eff. Nov. 1, 2000.
§18-381.39. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.39a. Joint accounts - P.O.D. accounts - Designation of beneficiaries - Payment.
A. When a deposit has been made or shall hereafter be made in any association in the names of two or more persons, payable to any of them or payable to any of them or their survivor, such deposit, or any part thereof, or any interest thereon, may be paid to either of the persons, whether one of such persons shall be a minor or not, and whether the other be living or not. The receipt or acquittance of the person so paid shall be valid and sufficient release and discharge to the association for any payment so made.
B. 1. When a deposit has been made or shall hereafter be made in any association using the terms "Payable on Death" or "P.O.D.", such deposits shall be payable on the designated person's death to a trust designated in the deposit account agreement as the P.O.D. beneficiary, or to an individual or individuals named beneficiary, if living, and if not, to the named beneficiary's estate, notwithstanding any provision to the contrary contained in Sections 41 through 57 of Title 84 of the Oklahoma Statutes. Such deposit shall constitute a contract between the depositor and the association that upon the death of the named owner of the account the association will hold the funds for or pay them to the named beneficiary or the estate of the named beneficiary.
2. In order to designate multiple payable-on-death beneficiaries for a deposit account, the account should be styled as follows: "(Name of Account Owner), payable on death (or P.O.D.) to (Name of Beneficiary), (Name of Beneficiary), and (Name of Beneficiary), in equal shares".
3. Adjustments may be made in the styling, depending upon the number of beneficiaries. It is to be understood that each beneficiary is entitled to a proportionate share of the account proceeds upon the owner's death. In the event of the death of a beneficiary prior to the death of the owner, the beneficiary's share shall go to the beneficiary's estate. It is not permissible for an account to designate unequal shares for different payable-on-death beneficiaries.
4. An association may require the owner of an account to provide an address for any payable-on-death beneficiary. If the P.O.D. account is an interest-bearing account and the funds are not claimed by the payable-on-death beneficiary or beneficiaries within sixty (60) days after the death of the account holder, or after the association has notice of the account holder's death, whichever is later, the association has the right to convert the account to a noninterest-bearing account.
5. No change in the designation of a named beneficiary shall be valid unless executed by the owner of the fund and in the form and manner prescribed by the association; however, this section shall be subject to the provisions of Section 178 of Title 15 of the Oklahoma Statutes.
6. The receipt or acquittance of the named beneficiary so paid or the legal representative of such named beneficiary's estate, if deceased, shall be valid and sufficient release and discharge to the association for any payment so made, unless, prior to such payment, the association receives notice in the form and manner required in Section 905 of Title 6 of the Oklahoma Statutes.
C. The provisions of this section shall apply to all forms of deposit accounts, including, but not limited to, transaction accounts, savings accounts, certificates of deposits, negotiable order of withdrawal (N.O.W.) accounts, and money market deposit accounts (M.M.D.A.).
Added by Laws 2000, c. 81, § 37, eff. Nov. 1, 2000.
§18-381.40. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.40a. Totten Trusts - Express trusts - Payment.
A. Whenever any deposit shall be made in an association by any person which is in the form of a trust for another, and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to the association, in the event of the death of the trustee, the same, or any part thereof, together with the interest thereon, may be paid to the person or persons for whom the deposit was made. A deposit held in this form shall be deemed to constitute a Totten Trust. A revocation of such trust may only be made in writing to the association, and the association shall not suffer any liability for payment of funds pursuant to the trust unless and until it receives written notice of revocation.
B. 1. If a deposit account is opened with an association by one or more persons expressly as a trustee for one or more other named persons and further notice of the existence and terms of a legal and valid trust is not given in writing to the association, the association may accept and administer the account as set forth in subsection A of this section.
2. If a deposit account is opened with an association by one or more persons expressly as a trustee for one or more other named persons pursuant to or purporting to be pursuant to a written trust agreement, the trustee may provide the association with a certificate of trust to evidence the trust relationship. The certificate shall be an affidavit of the trustee and must include the effective date of the trust, the name of the trustee, the name or method for choosing successor trustees, the name and address of each beneficiary, the authority granted to the trustee, the disposition of the account on the death of the trustee or the survivor of two or more trustees, other information required by the association, and an indemnification of the association. The association may accept and administer the account, subject to the provisions of Title 58 of the Oklahoma Statutes, in accordance with the certificate of trust without requiring a copy of the trust agreement. The association is not liable for administering the account as provided by the certificate of trust, even if the certificate of trust is contrary to the terms of the trust agreement, unless the association has actual knowledge of the terms of the trust agreement.
3. On the death of the trustee or the survivor of two or more trustees, the association may pay all or part of the withdrawal value of the account with interest as provided by the certificate of trust. If the trustee did not deliver a certificate of trust, the association's right to treat the account as owned by a trustee ceases on the death of the trustee. On the death of the trustee or the survivor of two or more trustees, the association shall, unless the certificate of trust provides otherwise, pay the withdrawal value of the account, with interest, in equal shares to the persons who survived the trustee, are named as beneficiaries in the certificate of trust, and can be located by the association from its own records. If there is not a certificate of trust, payment of the withdrawal value and interest shall be made as provided by Title 58 of the Oklahoma Statutes. Any payment made under this section for all or part of the withdrawal value and interest discharges any liability of the association to the extent of the payment. The association may pay all or part of the withdrawal value and interest in the manner provided by this section, regardless of whether it has knowledge of a competing claim, unless the association receives actual knowledge that payment has been restrained by order of a court of competent jurisdiction.
4. This section does not obligate an association to accept a deposit account from a trustee who does not furnish a copy of the trust agreement or to search beyond its own records for the location of a named beneficiary.
5. This section does not affect a contractual provision to the contrary that otherwise complies with the laws of this state.
Added by Laws 2000, c. 81, § 38, eff. Nov. 1, 2000.
§18-381.41. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.41a. Deposit accounts with minors - Authority to control - Loans to minors prohibited.
A. Except as otherwise provided by this section, an association lawfully doing business in this state may enter into a deposit account with a minor as the sole and absolute owner of the account and may pay checks and withdrawals and otherwise act with respect to the account on the order of the minor. A payment or delivery of rights to a minor who holds a deposit account evidenced by a receipt or acquittance signed by the minor discharges the association to the extent of the payment made or rights delivered.
B. If the minor is the sole and absolute owner of the deposit account, the disabilities of minority are removed for the limited purposes of enabling:
1. The minor to enter into a depository contract with the association; and
2. The association to enforce the contract against the minor, including collection of overdrafts and account fees and submission of account history to account reporting agencies and credit reporting bureaus.
C. A parent or legal guardian of a minor may deny the minor's authority to control, transfer, draft on, or make withdrawals from the minor's deposit account by notifying the association in writing. On receipt of the notice by the association, the minor may not control, transfer, draft on, or make withdrawals from the account during minority except with the joinder of a parent or legal guardian of the minor.
D. If a minor with a deposit account dies, the receipt or acquittance of the minor's parent or legal guardian discharges the liability of the association to the extent of the receipt of acquittance, except that the aggregate discharges under this subsection may not exceed Three Thousand Dollars ($3,000.00).
E. Subsection A of this section does not authorize a loan to the minor by the bank, whether on pledge of the savings account of the minor or otherwise, or bind the minor to repay a loan made except as provided by subsection B of this section or other law, unless the depository institution has obtained the express consent and joinder of a parent or legal guardian of the minor. This subsection does not apply to an inadvertent extension of credit because of an overdraft from insufficient funds, returned checks or deposits, or other shortages in a depository account resulting from normal banking operations.
Added by Laws 2000, c. 81, § 39, eff. Nov. 1, 2000.
§18381.42. Deposit accounts of incompetents.
When a deposit account is held in any association or federal association by a person who becomes incompetent and an adjudication of incompetency has been made by a court of competent jurisdiction, such an association may pay or deliver the withdrawal value of such deposit account and any earnings that may have accrued thereon to the guardian or conservator for such person upon proof of the appointment and qualification of such guardian or conservator. However, if such association has received no written notice and is not on actual notice that such deposit account holder has been adjudicated incompetent, it may pay such funds to such holder or transfer the deposit account on the order of the deposit account holder, and such payment or transfer shall be a valid and sufficient release and discharge of the association for the payment or transfer so made.
Added by Laws 1970, c. 101, § 42, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 16, eff. July 1, 1979; Laws 2000, c. 81, § 40, eff. Nov. 1, 2000.
§18381.43. Deposit accounts of administrators, executors, conservators, guardians, trustees or other fiduciaries.
Any association or federal association may accept deposit accounts in the name of any administrator, executor, conservator, guardian, trustee, or other fiduciary for a named beneficiary or beneficiaries. Any such fiduciary shall have power to vote as a member of a mutual association as if the membership were held absolutely, to open and to make additions to, and to withdraw such deposit account in whole or in part. The withdrawal value of any such deposit account, and earnings thereon, or other rights relating thereto may be paid or delivered, in whole or in part, to such fiduciary without regard to any notice to the contrary as long as such fiduciary is living. The payment or delivery to any such fiduciary or a receipt or acquittance signed by any such fiduciary to whom any such payment or any such delivery of rights is made shall be a valid and sufficient release and discharge of an association for the payment or delivery so made. Whenever a deposit account shall be opened by any person who designates himself or herself or another as trustee by written declaration of trust, which provides that the trust shall terminate upon the death of such person, then, in the event of the death of the person so described as trustee, the withdrawal value of such deposit account or any part thereof, together with the earnings thereon, may be paid to the person for whom the deposit account was thus described to have been opened. The payment or delivery to any such beneficiary, beneficiaries or designated person for any such payment or delivery shall be a valid and sufficient release and discharge of an association for the payment or delivery so made.
Added by Laws 1970, c. 101, § 43, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 17, eff. July 1, 1979; Laws 1988, c. 65, § 24, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 41, eff. Nov. 1, 2000.
§18381.44. Payment to administrator or executor of deceased nonresident.
When a deposit account is held in any association or federal association by a person residing in another state or country, the deposit account, together with additions thereto and earnings thereon, or any part thereof, may be paid to the administrator or executor appointed in the state or country where the account or deposit holder resided at the time of death. Such payment shall be a valid and sufficient release and discharge of the association for the payment so made unless the association has received written notice and is on actual notice of the appointment of an executor or administrator by an Oklahoma court of probate jurisdiction.
Added by Laws 1970, c. 101, § 44, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 18, eff. July 1, 1979; Laws 2000, c. 81, § 42, eff. Nov. 1, 2000.
§18381.45. Power of attorney Revocation.
Any association or federal association may continue to recognize the authority of an attorneyinfact authorized in writing to manage or to make withdrawals either in whole or in part from a deposit account, whether of a minor or adult, until it receives written notice or is on actual notice of the revocation of such authority. For the purposes of this section, written notice of the death or adjudication of incompetency of such deposit account holder shall constitute written notice of revocation of the authority of the attorney.
Added by Laws 1970, c. 101, § 45, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 19, eff. July 1, 1979; Laws 2000, c. 81, § 43, eff. Nov. 1, 2000.
§18381.46. Right to withdraw.
The holder of a deposit account in an association shall have the right to withdraw all or any part of the deposit account, subject to the right of the association and authority of the State Banking Commissioner or the Director of the Office of Thrift Supervision, to impose limitations upon the right of withdrawal from a deposit account for a fixed or minimum term with respect to which deposit account the applicable fixed or minimum term has not expired. With respect to deposit accounts which consist solely of funds in which the entire beneficial interest is held by one or more individuals or by an organization which is operated primarily for religious, philanthropic, charitable, educational, political, or other similar purposes and which is not operated for profit, and with respect to deposits of public funds by an officer, employee or agent of the United States, any state, county, municipality, or political subdivision thereof, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any territory or possession of the United States, or any political subdivision thereof, such deposit accounts may be subject to check or to transfer or withdrawal on negotiable order or authorization to the association, and deposit account holders may make withdrawals or transfers from such accounts upon nontransferable order or authorization. An association may offer money market deposit accounts, as defined by federal regulations, and may permit withdrawals or transfers from such accounts to the same extent permitted by federal regulations, but subject to all of the limitations contained therein.
Added by Laws 1970, c. 101, § 46, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 20, eff. July 1, 1979; Laws 1981, c. 114, § 1, emerg. eff. April 28, 1981; Laws 1990, c. 118, § 11, emerg. eff. April 23, 1990; Laws 2000, c. 81, § 44, eff. Nov. 1, 2000.
§18381.47. Notice and payment of withdrawals.
With respect to deposit accounts, an association may require such minimum advance notice of withdrawal as is specified by federal regulations or such longer advance notice period of not more than thirty (30) days as its bylaws may provide. The payment of withdrawals from deposit accounts, in the event an association does not have funds available to pay all withdrawals when due, shall be subject to such rules and procedures as may be prescribed by the State Banking Commissioner, but any association which, except as authorized in writing by the Commissioner, fails to make full payment of any withdrawal when due shall be deemed to be in an unsafe or unsound condition to transact business within the meaning of Section 381.74 of this title.
Added by Laws 1970, c. 101, § 47, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 21, eff. July 1, 1979; Laws 1990, c. 118, § 12, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 52, eff. July 1, 1993; Laws 2000, c. 81, § 45, eff. Nov. 1, 2000.
§18-381.48a. Sole owner accounts without payable-on-death beneficiary - Transfer of deposits to known heirs - Affidavit.
A. When a deposit has been made in an association in the name of a sole individual without designation of a payable-on-death beneficiary, upon the death of the sole owner of the deposit account, if the amount of the aggregate deposits held in single ownership accounts in the name of the deceased individual is Five Thousand Dollars ($5,000.00) or less, the association may transfer the funds to the known heirs of the deceased upon receipt of an affidavit sworn to by the known heirs of the deceased which establishes jurisdiction and relationship and states that the owner of the deposit account left no will. The affidavit shall be sworn to and signed by the known heirs of the deceased and same shall swear that the facts set forth in the affidavit establishing jurisdiction, heirship and intestacy are true and correct.
B. Receipt by the association of the affidavit described in subsection A of this section shall be a valid and sufficient release and discharge to the association for any transfer of deposits made pursuant thereto and shall set to discharge the association from liability as to any other party, including any heir, legatee, devisee, creditor or other person having rights or claims to funds or property of the decedent, and include a discharge of the association from liability for any estate, inheritance or other taxes which may be due the state from the estate or as a result of the transfer.
C. Any person who knowingly submits and signs a false affidavit as provided in this section shall be fined not more than Three Thousand Dollars ($3,000.00) or imprisoned for not more than six (6) months, or both. Restitution of the amount fraudulently attained shall be made to the rightful beneficiary by the guilty person.
Added by Laws 2000, c. 81, § 46, eff. Nov. 1, 2000.
§18381.49. Earnings on deposit accounts.
With the exception of interest at a rate fixed, or negotiated on an individual basis, by a deposit association prior to the acceptance of the deposit, an association shall determine the rates of earnings to be paid on all classes of deposit accounts, the times and manner of crediting, distributing and paying of such earnings, and the qualifications and limitations applicable to each class of deposit accounts for which a rate higher than regular rate is provided.
Added by Laws 1970, c. 101, § 49, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 22, eff. July 1, 1979; Laws 2000, c. 81, § 47, eff. Nov. 1, 2000.
§18381.50. Requirements to become deposittype association or stock association.
A. Any mutual association may become a deposittype association and any mutual association may become a stock association by adoption of a resolution by a majority of the votes cast in person or by proxy specially executed for that meeting within ninety (90) days prior to the meeting at an annual meeting or at any special meeting of its members, and by adoption of an appropriate amended certificate of incorporation and bylaw provisions consistent with this act, and in the case of conversions from mutual to stock form, upon approval of the conversion by the State Banking Commissioner, and if applicable, the Director of the Office of Thrift Supervision. Copies of the resolution to become a deposit association and/or stock association pursuant to this act and of the amended certificate of incorporation and bylaw amendments, certified by the secretary or president of the association, shall be filed with the Commissioner. Upon approval by the Commissioner, the Commissioner shall file a copy of such approved resolution with the Secretary of State, and the association shall be qualified to accept deposit accounts and issue permanent capital stock in accordance with this act from and after the effective date stated in the resolution. In no case of conversion of a mutual to a stock association shall any reserves existing at the time of such conversion ever inure to the benefit of the permanent capital stock, but shall be maintained as reserves in accordance with directions of the Commissioner.
B. At the meeting at which conversion to a stock association is voted upon, the members of the mutual association shall also vote upon the directors who shall be the directors of the stock association after conversion takes effect. The directors shall execute and file with the Commissioner an amended certificate of incorporation as provided for in Section 381.17 of this title, together with an application for conversion, a fee to be set by the Commissioner, and if the association intends to be an insured association, a firm commitment for, or evidence of, insurance of its deposit accounts by the Federal Deposit Insurance Corporation. The Commissioner may refuse to approve the application and decline to issue a charter and file the amended certificate of incorporation if there is reason to believe that the plan of conversion is not fair and equitable to all the members and that sufficient provision is not made to protect the interests of the depositors of the prospective capital stock association. Upon the approval by the Commissioner of the application for conversion and the amended certificate of incorporation and the issuance of a charter, the association shall cease to be a mutual association. Upon the conversion of a mutual association, the legal existence of the association shall not terminate but the stock association shall be a continuation of the entity of the mutual association and all property of the mutual association, including its rights, titles and interests in and to all property of whatever kind, whether real, personal or mixed, and things in action, and every right, privilege, interest and asset of every conceivable value or benefit then existing or pertaining to it, or which would inure to it, immediately by act of law and without any conveyance or transfer and without any further act or deed shall remain and vest in the stock association into which the mutual association has converted itself. The stock association shall have, hold and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the mutual association. The stock association as of the time and the taking effect of the conversion shall continue to have and succeed to all the rights, obligations and relations of the mutual association. All pending actions and other judicial proceedings to which the mutual association is a party shall not be abated or discontinued by reason of the conversion but may be prosecuted to final judgment, order or decree in the same manner as if the conversion had not been made and the stock association resulting from the conversion may continue the actions in its corporate name. Any judgment, order or decree may be rendered for or against it which might have been rendered for or against the mutual association theretofore involved in the judicial proceedings.
C. If the association will be an insured association, approval by the Commissioner shall be contingent upon the converting association either having insurance of its deposit accounts by the Federal Deposit Insurance Corporation, or by the association making a bona fide application for insurance of deposit accounts, and upon acceptance and approval of such application by the corporation.
D. The conversion of a state mutual association into a stock association shall be effected in accordance with a plan of conversion adopted by the members as provided in this section and consistent with the other provisions of this title. The plan shall provide that:
1. Each deposit account holder in the mutual association shall receive a withdrawable account in the stock association equal in amount to the withdrawable account of the deposit account holder in the mutual association;
2. A record date for determining deposit account holders entitled to purchase stock shall be established which is not less than ninety (90) days prior to the date of adoption of the plan of conversion by the board of directors of the association;
3. Officers, directors and employees of the association and their associates shall forego any participation in the initial distribution of permanent capital stock to the extent that any such person increased the account of such person by more than Twenty Thousand Dollars ($20,000.00) during the six (6) months preceding the record date established pursuant to this section. The term "associate" of a person shall mean parents, spouse, sisters, brothers, children or anyone married to one of the foregoing persons, any corporation of which the person is an officer, director or owner of more than ten percent (10%) of the outstanding voting securities, any trust of which such person is a trustee or substantial beneficiary, and any partnership of which such person is a general or limited partner;
4. The amount of stock to which a member is entitled shall be determined on the basis of the ratio of deposits of such member with the association on the record date to the total deposits of the association on the record date, as applied to the initial issuance of permanent capital stock. Each deposit account holder as of the record date may receive warrants authorizing the purchase of shares of permanent capital stock at a price determined by the board of directors of the institution and approved by the Commissioner and by the Director of the Office of Thrift Supervision, and scrip denoting fractional stock interests of less than one share, provided, however, that no deposit account holder shall be entitled to scrip representing fractional interests of less than onefifth share of stock; and
5. In connection with a conversion, deposit account holders shall have a preemptive right to purchase such permanent capital stock for a period of not less than fourteen (14) days from the date the offer to sell permanent capital stock is made.
E. If the association is an insured association, the reserves of a stock association resulting from the conversion of a mutual association shall be not less than the amount necessary to meet the requirements of the Federal Deposit Insurance Corporation.
Added by Laws 1970, c. 101, § 50, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 23, eff. July 1, 1979; Laws 1980, c. 103, § 1, eff. Oct. 1, 1980; Laws 1988, c. 65, § 25, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 13, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 53, eff. July 1, 1993; Laws 2000, c. 81, § 48, eff. Nov. 1, 2000.
§18381.51. Deposits authorized.
An association may accept deposits for fixed, minimum or indefinite periods of time, including accounts bearing a fixed rate of interest, as may be authorized by its directors, subject to the provisions of its bylaws and the authority of the State Banking Commissioner and, if applicable, the Director of the Office of Thrift Supervision to disapprove of such a rate.
Added by Laws 1970, c. 101, § 51, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 24, eff. July 1, 1979; Laws 1990, c. 118, § 14, emerg. eff. April 23, 1990; Laws 2000, c. 81, § 49, eff. Nov. 1, 2000.
§18-381.52a. Additional association powers and authorities - Special or fiduciary duties or obligations.
In addition to other provisions of this act relating to deposit accounts, an association may exercise the powers and authorities applicable under the provisions of Article IX of the Oklahoma Banking Code, Sections 901 through 907 of Title 6 of the Oklahoma Statutes. An association may also exercise the powers and authorities applicable under the provisions of Article XIII of the Oklahoma Banking Code, Section 1301 et seq. of Title 6 of the Oklahoma Statutes, as amended from time to time. Further, unless an association shall have expressly agreed in writing to assume special or fiduciary duties or obligations, no such duties or obligations will be imposed on the association with respect to a depositor of the association or a borrower, guarantor or surety, and no special or fiduciary relationship shall be deemed to exist.
Added by Laws 2000, c. 81, § 50, eff. Nov. 1, 2000.
§18-381.52b. Deposit accounts that may be provided.
An association may provide all types of deposit accounts unless otherwise provided by rule of the State Banking Commissioner or applicable federal law.
Added by Laws 2000, c. 81, § 51, eff. Nov. 1, 2000.
§18-381.53. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18381.53a. Permanent capital stock Treasury stock Redemption Paidin surplus Dividends Minimum capital requirements.
A. Permanent capital stock shall consist of common stock, which shall have full voting rights, and may also include preferred stock. Such stock shall have a par value of not less than one cent ($0.01) per share, and the proceeds thereof, to the extent of such par value, shall be set apart and be nonwithdrawable, and shall be a reserve to absorb losses after all surplus, undivided profits, and other reserves available for losses have been depleted.
B. 1. With the approval of the State Banking Commissioner and subject to the conditions as the Commissioner may prescribe, a bank may purchase its own stock as treasury stock.
2. Preferred stock shall not be issued for a limited term, nor shall it be redeemable at the option of the holders. An association shall not bind itself by contract to redeem its preferred stock upon the happening of certain events, other than dissolution. However, preferred stock shall be subject to redemption at any time at the option of the association, with the prior approval of the Commissioner and only if, subsequent to the redemption, the association would meet its minimum capital requirements as imposed by applicable federal law.
C. Any paidin surplus with respect to common stock may be made available for payment of organization and initial operating expenses or may be credited to surplus, or the contingent reserve, or the federal insurance reserve, or be transferred to common or preferred stock as a stock dividend, prorated to the holders of common stock. An association shall not issue permanent capital stock for a consideration other than cash or for a price less than par value thereof, except that, with the approval of the Commissioner, stock may be issued for a consideration other than cash in connection with mergers, consolidations or transfers and, when fully paid, the stock shall be kept unimpaired to the extent of its par value.
D. A stock association may declare and distribute cash dividends from net earnings, surplus or undivided profits. With the prior consent of the Commissioner, the stock of an association may be reduced by resolution of the board of directors approved by vote or written consent of the holders of a majority of the outstanding stock of such association to such amount as the Commissioner shall approve, and any such reduction shall be credited to the contingent reserve account and shall not be available for dividends to common stockholders; provided, any reduction in the amount of permanent capital stock is subject to the provisions of this section and Section 381.20 of this title, fixing minimum permanent capital stock requirements.
E. No cash dividends shall be declared on common stock unless, subsequent to the dividends, the association would continue to meet its minimum capital requirements as imposed by the Commissioner or the Director of the Office of Thrift Supervision. Subject to the provisions of this act, permanent capital stock shall be entitled to such rate of dividends, if earned, as declared by the board of directors.
Added by Laws 1978, c. 168, § 31, eff. July 1, 1979. Amended by Laws 1987, c. 61, § 10, emerg. eff. May 4, 1987; Laws 1990, c. 118, § 15, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 55, eff. July 1, 1993; Laws 2000, c. 81, § 52, eff. Nov. 1, 2000.
§18381.53b. Impairment of permanent capital stock Notice Appraisals Assessments.
A. If the State Banking Commissioner, as a result of any examination or from any report made to the Commissioner, finds that the permanent capital stock of any association is impaired, the Commissioner shall notify the association that such impairment exists and require the association to immediately make good such impairment. After such notice has been given to an association and until the impairment has been made good, that association may not issue or renew any time instrument if that instrument, when aggregated with any other funds of the same depositor in the same capacity, would equal or exceed One Hundred Thousand Dollars ($100,000.00) unless such time instrument earns an annual rate of interest less than four percent (4%). In the event the amount of the impairment as determined by the Commissioner is questioned by the association, then upon application, which shall be filed within ten (10) days, the value of the assets in question shall be determined by appraisals made by independent appraisers acceptable to the Commissioner and the association.
B. The directors of the association, upon which such notice has been made, shall levy a pro rata assessment upon the permanent capital stock thereof to make good such impairment and shall cause notice of such request of the Commissioner and such levy to be given in writing to each stockholder of such association and the amount of assessment which the stockholder must pay for the purpose of making such assessment.
Added by Laws 1978, c. 168, § 32, eff. July 1, 1979. Amended by Laws 1988, c. 65, § 26, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 53, eff. Nov. 1, 2000.
§18381.53c. Refusal or neglect to pay assessment Sale of stock Payment of assessment.
A. If any stockholder shall refuse or neglect to pay the assessment specified in such notice within sixty (60) days from the date of mailing, the directors of such association shall have the right to sell to the highest bidder at public auction any part or all of the stock necessary to pay the assessment of such stockholder, after giving the notice of such sale for ten (10) days in a newspaper of general circulation published in the county where the main office of such association in this state is located, and a copy of such notice of sale shall also be served on such stockholder by mailing a copy of such notice to his lastknown address ten (10) days before the day fixed for such sale, or such stock may be sold at a private sale and without public notice. However, before making such private sale thereof, an offer in writing shall first be obtained and a copy thereof served upon the owner of record of the stock to be sold, by mailing a copy of such offer to the lastknown address of such owner, and if after service of such offer such owner shall still refuse or neglect to pay such assessment within thirty (30) days from the time of the service of such offer, the directors may accept such offer and sell such stock to the person making such offer, or to any other person or persons making a larger offer than the amount named in the offer submitted to the stockholder, but such stock, in no event, shall be sold for less than the amount of such assessment so called for and the expense of the sale.
B. Out of the proceeds of the stock so sold, the directors shall pay the amount of assessment levied thereon and the necessary cost of sale, and the balance, if any, shall be paid to the person or persons whose stock has thus been sold. A sale of stock as herein provided shall effect an absolute cancellation of the outstanding certificate or certificates evidencing the stock so sold, and shall make the same null and void and a new certificate shall be issued by the association to the purchaser thereof.
Added by Laws 1978, c. 168, § 33, eff. July 1, 1979. Amended by Laws 2000, c. 81, § 54, eff. Nov. 1, 2000.
§18381.53d. Proceeds from assessment Disposition.
The proceeds from any assessment, less the cost of any sales and any forfeiture of delinquent stock, shall be credited to the contingent reserve account.
Laws 1978, c. 168, § 34, eff. July 1, 1979.
§18381.53e. Permits to sell stock Application Issue of permit Conditions Amendment, alteration or revocation.
No association shall sell, offer for sale, negotiate for the sale of or take subscriptions for, or issue any of its permanent capital stock until it shall have first applied for and secured from the State Banking Commissioner a permit authorizing it to do so. Such application shall be in writing, be verified and be filed with the Commissioner. In such application the association shall set forth the names and addresses of its officers, the location of its main office and branch offices, an itemized account of its financial condition, the amount and character of its stock and shares, a copy of any prospectus or advertisement or other description of its stock to be distributed or published, a copy of all minutes of any proceedings of its directors, members or stockholders relating to or affecting the issue of such stock and such additional information concerning the association, its condition and affairs as the Commissioner may require. Upon the filing of such application it shall be the duty of the Commissioner to examine it and the other papers and documents filed therewith. If the Commissioner finds that the proposed issue is such as will not mislead the public as to the nature of the investment or will not work a fraud upon the purchaser thereof, the Commissioner shall issue to the association a permit authorizing it to issue and dispose of its stock in such amounts as the Commissioner may in such permit provide. Otherwise, the Commissioner shall deny the application and notify the association in writing of the decision. Every permit shall recite in bold type that the issuance thereof is permissive only and does not constitute a recommendation or endorsement of the stock permitted to be issued. The Commissioner may impose conditions requiring the impoundment of the proceeds from the sale of such stock, limiting the expense in connection with the sale thereof, and such other conditions as the Commissioner may deem reasonable and necessary or advisable to insure the disposition of the proceeds from the sale of such stock in the manner and for the purposes provided in such permit. The Commissioner may, from time to time, amend, alter or revoke any permit issued by the Commissioner or temporarily suspend the rights of such association under such permit. The Commissioner shall have the power to establish such rules as may be reasonable or necessary to carry out the purposes and provisions of this section.
Added by Laws 1978, c. 168, § 35, eff. July 1, 1979. Amended by Laws 2000, c. 81, § 55, eff. Nov. 1, 2000.
§18381.53f. Insurance.
All insured associations shall keep in force, at all times, insurance covering their deposit accounts to the extent provided by federal law.
Added by Laws 1978, c. 168, § 36, eff. July 1, 1979. Amended by Laws 1990, c. 118, § 16, emerg. eff. April 23, 1990; Laws 2000, c. 81, § 56, eff. Nov. 1, 2000.
§18381.54. General powers.
Associations shall have the powers enumerated, authorized and permitted by this act and such other rights and powers as may be incidental to or reasonably necessary or appropriate for the accomplishment of the objects and purposes of the association. Among others, and except as otherwise limited herein, every association shall have the following general powers:
1. To have perpetual existence; to adopt and use a corporate seal; to adopt, amend and repeal bylaws; and to sue and be sued, complain and defend in any court having jurisdiction;
2. To own or rent such equipment, fixtures, furnishings and other personal property as may be deemed expedient for the transaction of the business of the association; and to acquire personal property in satisfaction of indebtedness owed to the association;
3. To sell, exchange and dispose of and convey real and personal property acquired pursuant to this act, and to mortgage, pledge, lease or otherwise contract with respect to such property;
4. If and when an association is not a member of a Federal Home Loan Bank, to borrow not more than an aggregate amount equal to onefourth (1/4) of its savings or deposits liability on the date of borrowing and such additional sums as the State Banking Commissioner may approve. If and when an association is a member of a Federal Home Loan Bank, to secure advances of not more than an aggregate amount equal to onehalf (1/2) of its savings or deposits liability; within such amount equal to onehalf (1/2) of its savings or deposits liability, the association may borrow from sources, individual or corporate, other than such Federal Home Loan Bank, an aggregate amount not in excess of the amount permitted by the Federal Home Loan Bank Board. A subsequent reduction of savings or deposits liability shall not affect in any way outstanding obligations for borrowed money. All such loans and advances may be secured by property of the association. Insured associations may also issue and market such bonds, debentures, obligations and like securities as the Commissioner and the Director of the Office of Thrift Supervision may authorize;
5. To sell and assign without recourse any loan, including any participating interests therein held by an association; provided that the Commissioner may by regulation limit the total dollar volume of loans sold in any calendar year to a designated percentage of total loans held by the association;
6. To qualify as and become a member of a Federal Home Loan Bank;
7. To obtain and maintain insurance of the deposit accounts of its members by the Federal Deposit Insurance Corporation;
8. To appoint and compensate such officers, agents and employees as its business shall require; to provide for reasonable life, health and medical insurance for its personnel; to adopt and operate reasonable bonus plans and retirement benefits for its officers and employees; to pay reasonable fees to its directors for their services; and to provide for indemnification of its officers, employees and directors as permitted by this act whether by insurance or otherwise;
9. To become a member of and make reasonable payments or contributions to any organization to the extent that such organization assists in furthering or facilitating the association's purposes or its community responsibilities;
10. If and when an association is a member of a Federal Home Loan Bank, to act as fiscal agent of the United States and, when so designated by the Secretary of the Treasury, to perform all reasonable duties as fiscal agent of the United States as the Secretary of the Treasury may require; and to act as agent for any instrumentality of the United States and as agent of this state or any instrumentality thereof;
11. To act as agent for others in servicing loans and making collections thereon; and to act as agent for others in any transaction incidental to the operation of its business;
12. To act as trustee of any trust created or organized in the United States and forming part of a stock bonus, pension, or profitsharing plan qualifying for specific tax treatment under Section 401(d) of the Internal Revenue Code of 1986; as trustee or custodian of an individual retirement account within the meaning of Section 408(a) of the Internal Revenue Code of 1986; or as trustee with no active fiduciary duties, provided, that the association shall invest the funds of the trust or account only in the association's own accounts, deposits, obligations, or securities or, upon the condition that the association does not exercise any investment discretion or directly or indirectly provide any investment advice with respect to the trust or account assets, in such other assets as the customer may direct. The association shall observe principles of sound trust administration, including those relating to recordkeeping and segregation of assets, and may receive reasonable compensation for acting in any trust capacity authorized by this paragraph;
13. To acquire savings of the public and pay earnings thereon, and to lend and invest its funds as provided in this act;
14. To conduct a safe deposit business in compliance with the requirements of applicable federal law and Sections 1301 through 1313 of Title 6 of the Oklahoma Statutes;
15. To organize a finance subsidiary;
16. To own capital stock of an operating subsidiary; and
17. To have and to exercise all such incidental powers as shall be necessary to carry on the association business including, but not limited to, all such powers as may now or hereafter be conferred upon federal associations by federal laws and the regulations and policies of the Office of Thrift Supervision, unless otherwise prohibited or limited by the Commissioner.
Added by Laws 1970, c. 101, § 54, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 27, eff. July 1, 1979; Laws 1987, c. 61, § 11, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 27, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 17, emerg. eff. April 23, 1990; Laws 2000, c. 81, § 57, eff. Nov. 1, 2000.
§18381.55. Investment in real property.
In addition to any powers of investment permitted pursuant to paragraph 17 of Section 381.54 of this title, every association shall have power to invest in real property as follows:
1. Such real property or interests therein as the directors may deem necessary or convenient for the conduct of the business of the association, which for the purposes of this act shall be deemed to include the ownership of stock of a wholly owned subsidiary corporation having as its exclusive activity the ownership and management of such property or interests, but the amount so invested shall not exceed the sum of the reserves and undivided profits of the association, unless the State Banking Commissioner authorizes a greater amount to be so invested;
2. An amount not exceeding the lesser of:
a. the sum of its reserves and undivided profits, or
b. ten percent (10%) of its assets as reported in its most recent quarterly thrift financial report or other statement of condition submitted to the Oklahoma State Banking Department, in the purchase of real estate for the purpose of producing income or for inventory or sale or for development and improvement, including the erection of buildings thereon, for sale or rental purposes;
3. Such real property as may be acquired in satisfaction or partial satisfaction of indebtedness owed to the association, by deed, sheriff's deed, trustee's deed or otherwise.
Added by Laws 1970, c. 101, § 55, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 28, emerg. eff. March 25, 1988; Laws 1993, c. 183, § 56, eff. July 1, 1993; Laws 2000, c. 81, § 58, eff. Nov. 1, 2000.
§18381.56. Investment in securities.
In addition to any powers of investment permitted pursuant to paragraph 17 of Section 381.54 of this title, associations shall have power to invest in securities as follows:
1. In obligations of, or obligations which are fully guaranteed as to principal and interest by, the United States or this state; in stock or obligations of any Federal Home Loan Bank or Banks; in stock or obligations of the Federal Deposit Insurance Corporation; and in stock or obligations of the Federal National Mortgage Association or any successor or successors thereto;
2. In time deposits, certificates, accounts, or other obligations of banks or other financial institutions, the accounts of which are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration;
3. Not in excess of five percent (5%) of its assets, as reported in its most recent quarterly thrift financial report or other statement of condition submitted to the Oklahoma State Banking Department, in bonds, notes or other evidences of indebtedness which are a general obligation of, or guaranteed as to principal and interest by, any agency or instrumentality of the United States not specified in paragraph 1 of this section, or of any city, county or school district in this state; and
4. Not in excess of ten percent (10%) of its assets in the capital stock, obligations or other securities of service organizations substantially all of the activities of which consist of originating, purchasing, selling and servicing loans upon real estate and participating interests therein, or clerical, bookkeeping, accounting, statistical or similar functions performed primarily for financial institutions plus such other activities as the State Banking Commissioner may approve.
Added by Laws 1970, c. 101, § 56, eff. June 1, 1970. Amended by Laws 1983, c. 26, § 1, emerg. eff. April 18, 1983; Laws 1987, c. 61, § 12, emerg. eff. May 4, 1987; Laws 1990, c. 118, § 18, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 57, eff. July 1, 1993; Laws 2000, c. 81, § 59, eff. Nov. 1, 2000.
§18381.57. Loans.
Associations shall have power to invest, sell, or otherwise deal in loans or other investments to the same extent permitted for federal associations, except as otherwise provided by the rules of the State Banking Commissioner.
Added by Laws 1970, c. 101, § 57, eff. June 1, 1970. Amended by Laws 1975, c. 236, § 5, emerg. eff. May 30, 1975; Laws 1978, c. 168, § 28, eff. July 1, 1979; Laws 1981, c. 135, § 1, emerg. eff. May 5, 1981; Laws 1988, c. 65, § 29, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 19, emerg. eff. April 23, 1990; Laws 2000, c. 81, § 60, eff. Nov. 1, 2000.
NOTE: Laws 1981, c. 118, § 1 repealed by Laws 1988, c. 65, § 36, emerg. eff. March 25, 1988.
§18381.58. Loan rates of interest.
All contracts of an association for the loan of money shall be subject to the laws of this state with respect to maximum interest rates which may be charged and to the penalties for violation thereof.
Added by Laws 1970, c. 101, § 58, eff. June 1, 1970. Amended by Laws 2000, c. 81, § 61, eff. Nov. 1, 2000.
§18381.59. Conversion into federal association.
At an annual meeting or at any special meeting of the members or stockholders called to consider such action, any association may convert itself into a federal association pursuant to the laws of the United States, as now or hereafter amended, upon a majority vote of the outstanding stock entitled to vote thereon or upon a majority vote of the total number of votes of the members present in person or by proxy. There shall be filed with the State Banking Commissioner a copy of the charter issued to such federal association by the Director of the Office of Thrift Supervision or a certificate showing the organization of such association as a federal association, certified by the Director of the Office of Thrift Supervision. Upon the grant to any association of a charter by the Director of the Office of Thrift Supervision, the association receiving such charter shall cease to be an association incorporated by this state. Upon conversion of any association into a federal association, such federal association shall be deemed to be a continuation of the entity of the association so converted and all property of the converted association, including its rights, titles, and interests in and to all property of whatever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing or pertaining to it, or which would inure to it, shall immediately by operation of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue and be the property of such federal association into which the state association has converted itself, and such federal association shall have, hold and enjoy the same in its own right as fully and to the same extent as the same was possessed, held, and enjoyed by the converting association, and such federal association as of the time of the taking effect of such conversion shall continue to have and succeed to all the rights, obligations and relations of the converting association. All pending actions and other judicial proceedings to which the converting state association is a party shall not be deemed to have abated or to have discontinued by reason of such conversion, but may be prosecuted to final judgment, order, or decree in the same manner as if such conversion into such federal association had not been made and such federal association resulting from such conversion may continue such action in its corporate name as a federal association, and any judgment, order or decree may be rendered for or against it which might have been rendered for or against the converting state association theretofore involved in such judicial proceedings.
Added by Laws 1970, c. 101, § 59, eff. June 1, 1970. Amended by Laws 1987, c. 61, § 13, emerg. eff. May 4, 1987; Laws 1990, c. 118, § 20, emerg. eff. April 23, 1990; Laws 2000, c. 81, § 62, eff. Nov. 1, 2000.
§18381.60. Conversion into statechartered association.
At an annual meeting or at any special meeting of the members or stockholders called to consider such action, any federal association may convert itself into an association under this act upon a majority vote of the outstanding stock entitled to vote thereon or upon a majority vote of the total number of votes of the members of such federal association eligible to be cast. Copies of the minutes of the proceedings of such meetings of members or stockholders, verified by the affidavit of the secretary or an assistant secretary, and verified copies of the plan of conversion shall be filed for approval with the State Banking Commissioner. At the meeting at which conversion is voted upon, the members or stockholders shall also vote upon the directors who shall be the directors of the statechartered association after conversion takes effect. Such directors then shall execute and file a certificate of incorporation and proposed bylaws, and the Commissioner shall file a certificate of authority upon approval by the Commissioner, all as provided in this act. The association shall include in the certificate of incorporation, the following: "This association is incorporated by conversion from a federal association." All of the directors who are chosen for the association shall sign and acknowledge the certificate of incorporation as the subscribers. The Commissioner may provide, by regulation, for any additional procedure to be followed, and application fee to be paid, by any such federal association converting into an association under this act. All the provisions regarding property and other rights and liabilities contained in Section 381.59 of this title shall apply, in reverse order, to the conversion of a federal association into an association incorporated under this act, so that the statechartered association shall be a continuation of the corporate entity of the converting federal association.
Added by Laws 1970, c. 101, § 60, eff. June 1, 1970. Amended by Laws 1987, c. 61, § 14, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 30, emerg. eff. March 25, 1988; Laws 1993, c. 183, § 58, eff. July 1, 1993; Laws 2000, c. 81, § 63, eff. Nov. 1, 2000.
§18381.61. Merger or consolidation.
Pursuant to a plan agreed upon by at least twothirds of the members of the board of directors as being equitable to the members or stockholders of the association and as not impairing other associations, foreign associations, and federal associations, an association may merge or consolidate with another association, foreign association, or federal association, provided that the plan of such merger or consolidation shall be approved at an annual meeting or at any special meeting of the members or stockholders called to consider such action by a majority vote of the outstanding stock entitled to vote thereon or upon a majority vote of the total number of votes of the members present in person or by proxy. An application to merge or consolidate shall be filed with the State Banking Commissioner and the same shall be the subject of an individual proceeding pursuant to Article II of the Administrative Procedures Act, Section 309 et seq. of Title 75 of the Oklahoma Statutes. If the merger or consolidation is approved by the Commissioner, a copy of the order of approval shall be filed with the Secretary of State who shall then issue a certificate of merger. In all cases of merger or consolidation, the corporate continuity of the resulting corporation shall have the same incidents, rights and liabilities as that of an association which has converted pursuant to this act. The Commissioner may provide, by rule, for any additional procedure to be followed, and application fee to be paid, by any associations merging or consolidating pursuant to this act.
Added by Laws 1970, c. 101, § 61, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 29, eff. July 1, 1979; Laws 1987, c. 61, § 15, emerg. eff. May 4, 1987; Laws 1993, c. 183, § 59, eff. July 1, 1993; Laws 2000, c. 81, § 64, eff. Nov. 1, 2000.
§18381.62. Voluntary liquidation.
A. With the approval of the State Banking Commissioner, an association may liquidate and dissolve. The Commissioner may grant such approval upon an application by an association after the proposal to liquidate and dissolve has been approved by a vote of a majority of the outstanding voting stock, in the case of a stock association, or by a majority vote of the total number of votes of the members present in person or by proxy, in the case of a mutual association, at a meeting called for that purpose, and that after giving effect to any proposed purchase of the assets of the association and assumption of its liabilities as provided for in Section 381.63a of this title the association will be solvent and will have sufficient liquid assets to pay off any remaining depositors and creditors immediately.
B. 1. Upon approval by the Commissioner, the association shall immediately cease to do business, shall have only the powers necessary to effect an orderly liquidation and shall proceed to pay its depositors and creditors and to wind up its affairs.
2. Within thirty (30) days of the approval, the association shall send a notice of liquidation by mail to each depositor, creditor, person interested in funds held as a fiduciary, lessee of a safe deposit box and a bailor of property at the address of such person as shown on the books of the association. However, in the case of all depositors, creditors, loan customers or lessees of safe deposit boxes whose deposits, accounts or other contractual arrangements with the association have been purchased or assumed as provided for in Section 381.63a of this title, a notice of purchase and assumption shall be sent by the purchaser in lieu of a notice of liquidation by the liquidating association. The notice prepared by the association shall be posted conspicuously on the premises of the association and shall be given such publication as the Commissioner may require. The purchaser or the liquidating association, as applicable, shall send with each notice a statement of the amount shown on the books to be the claim or liability of the depositor, creditor or other customer. Each such notice shall demand that claims of depositors and creditors, or corrected statements of amounts owed by the customer, if the amount claimed or owed differs from that stated in the notice, be filed with the notifying institution before a specified date not earlier than sixty (60) days thereafter in accordance with the procedure prescribed in the notice. The notice prepared by the liquidating association shall also demand that property held by the association as bailee or in a safe deposit box not taken over by a purchaser be withdrawn by the person entitled thereto.
3. As soon after approval as may be practicable the association shall resign all fiduciary positions and take such action as may be necessary to settle its fiduciary accounts, and the manner of succession of trust powers and successor trustees shall follow the same procedure as set out in Section 1018 of Title 6 of the Oklahoma Statutes.
4. Any safe deposit boxes which have not been taken over by a purchaser, and the contents of which have not been removed within thirty (30) days after demand, shall be opened. Sealed packages containing the contents of such box, with a certificate of inventory of contents, together with any other unclaimed property held by the association as bailee and certified inventories thereof, shall be transferred to the Commissioner who shall administer the property in accordance with the provisions of the Uniform Unclaimed Property Act.
5. The approval of an application for liquidation shall not impair the right of a depositor or creditor whose account has not been unconditionally assumed by a purchaser to be paid in full by the liquidating association, and all lawful claims of remaining creditors and depositors of the liquidating association shall promptly be paid. The unearned portion of the rental of a safe deposit box not taken over by a purchaser shall be returned to the lessee.
6. Any assets remaining after the discharge of or adequate provision for all obligations shall be distributed to the stockholders or members in accordance with a plan of voluntary liquidation filed with and approved by the Commissioner. No such distribution shall be made before all claims of depositors and creditors have been:
a. assumed as provided for in Section 381.63a of this title,
b. provided for by the establishment of a reserve fund in an amount approved by the Commissioner,
c. paid by the liquidating association, or
d. in the case of any disputed claim, provided for by transmittal to the Commissioner of a sum adequate to meet any liability that may be judicially determined.
C. Any unclaimed distribution to a stockholder, member or depositor shall be held until ninety (90) days after the final distribution and then transmitted to the Commissioner. Such unclaimed funds shall be held by the Commissioner and administered in accordance with the provisions of the Uniform Unclaimed Property Act.
D. If the Commissioner finds that assets will be insufficient for the full discharge of all obligations or that completion of the liquidation has been unduly delayed, the Commissioner may take possession and complete the liquidation in the manner provided in this act for involuntary liquidations.
E. The Commissioner may require reports of the progress of liquidation. Whenever the Commissioner is satisfied that the liquidation has been properly completed the Commissioner shall enter an order of dissolution and recommend to the Secretary of State that the association's certificate of incorporation be canceled, upon receipt of which the Secretary of State shall cancel such certificate.
Added by Laws 1970, c. 101, § 62, eff. June 1, 1970. Amended by Laws 1978, c. 168, § 30, eff. July 1, 1979; Laws 1988, c. 65, § 31, emerg. eff. March 25, 1988; Laws 1991, c. 331, § 49, eff. Sept. 1, 1991; Laws 1993, c. 183, § 60, eff. July 1, 1993; Laws 2000, c. 81, § 65, eff. Nov. 1, 2000.
§18381.63a. Purchase and sale of assets and business of association Authorization and approval Assumption of certificates of deposit Transfer of fiduciary positions.
A. Any association may sell to any other association, federal association, national banking association or Oklahoma-chartered bank all, or substantially all, of the selling association's assets and business, or all, or substantially all, of the assets and business of any department or branch of the selling association.
B. Any association, upon assuming the liabilities relating thereto, may purchase all, or substantially all, of the assets and business of another association, federal association, national banking association or Oklahoma-chartered bank, or all, or substantially all, of the assets and business of any department or branch of the selling institution.
C. The agreement of purchase and sale shall be authorized and approved by the boards of directors of the purchasing and selling institutions, and authorized and approved by the vote of a majority of the stockholders of the purchasing and selling institutions, or by a majority vote of the total number of votes of the members present in person or by proxy, in the case of mutual associations or mutual federal associations, at meetings called for the purpose and shall be filed with the State Banking Commissioner accompanied by evidence of such stockholders' or members' approval in like manner as plans of merger are filed. Copies of the agreement of purchase and sale shall be filed with and subject to the approval of the Commissioner, together with a fee for review of the transaction as required by rule of the Commissioner, and shall be accompanied by evidence of approval of such stockholders or members thereof in like manner as agreements of merger are filed. After such approval is given by the stockholders or members, a notice of such sale shall be published once a week for two (2) successive weeks in a newspaper of general circulation in the county in which the selling institution has its main office. Proof of such publication shall be filed with the Commissioner. The Commissioner may permit the requirement for publication of notice to be satisfied after the purchase and sale becomes effective if the Commissioner determines that:
1. The selling institution is solvent, but either is close to insolvency or is experiencing a run on deposits;
2. The terms of the agreement of purchase and sale are essentially fair to the selling institution; and
3. The selling institution will remain solvent after the purchase and sale.
D. Any deposit account which is unconditionally assumed by the purchasing association pursuant to an agreement approved by the Commissioner, and which, after a depositor's preexisting accounts at the purchasing institution are added to the accounts assumed from the selling institution, is fully covered by the Federal Deposit Insurance Corporation insurance limits at the purchasing institution, shall cease to be an obligation of the selling institution after the purchase and sale becomes effective. Notwithstanding any term of the purchase and sale agreement or of the contract of deposit, a deposit account or other creditor's account shall be deemed to be only conditionally assumed by the purchasing institution if:
1. The amount of preexisting deposit accounts of a depositor at the purchasing institution, together with accounts of that depositor which are assumed from the selling institution, would exceed the Federal Deposit Insurance Corporation insurance limits of such purchasing institution; or
2. Claims of a depositor or other creditor against a selling institution and loans of a depositor from the selling institution are not simultaneously assumed by the purchasing institution so as to preserve a right of setoff. Any depositor or creditor of the selling institution whose business is conditionally sold has the right, after such sale:
a. upon payment of any indebtedness owing by the depositor to the selling institution, to withdraw the deposit in full from the selling institution on demand, unless by dealing with the purchasing institution with knowledge of the purchase the depositor ratifies the transfer, or
b. to exercise the right to setoff of the depositor, unless by dealing with the purchasing institution with knowledge of the purchase the depositor ratifies the transfer.
E. The agreement of sale may provide for the transfer to the purchasing institution of all fiduciary positions held by the selling institution subject to the right of the district court of the county in which the selling institution is situated, on petition of any interested party, to appoint another or succeeding fiduciary to the positions so transferred. However, the provisions of the instrument creating the fiduciary position shall control such succession, if it so provides therein. Until such court appoints another or succeeding fiduciary, the purchasing institution shall, if it has qualified, exercise any fiduciary function vested in the selling institution and the manner of succession of trust powers and successor trustees shall follow the same procedure as set out in subsection F of Section 1109 of Title 6 of the Oklahoma Statutes.
F. Except as provided for in subsection D of this section, no right against or obligation of the selling institution in respect of the assets or business sold shall be released or impaired by the sale until one (1) year from the last date of publication of the notice pursuant to subsection C of this section, but after the expiration of such year no action can be brought against the selling institution on account of any deposit, obligation, trust or asset transferred to or liability assumed by the purchasing association.
Added by Laws 1988, c. 65, § 32, emerg. eff. March 25, 1988. Amended by Laws 1990, c. 173, § 28, emerg. eff. May 3, 1990; Laws 2000, c. 81, § 66, eff. Nov. 1, 2000.
NOTE: Laws 1990, c. 118, § 21 repealed by Laws 1990, c. 337, § 26.
§18381.64. Authorized foreign associations.
Except as this act otherwise provides, no foreign association shall be granted permission by the State Banking Commissioner or the Secretary of State to do business within this state and each foreign association now holding a certificate of authority issued by the Commissioner may continue to do business through its duly appointed agent but only in the county where it is now operating. Each such foreign association shall remain subject to supervision, and to examination as deemed necessary, by the Commissioner and to the rules of the Commissioner and shall make no loans in this state and accept no deposit accounts in this state other than loans and deposit accounts of a class which are authorized for Oklahoma chartered associations. In the event an authorized foreign association fails to comply with the provisions of this act or with the requirements of the Commissioner, or to keep on file with the Commissioner and the Secretary of State a written appointment of its resident agent upon whom service of summons and all other legal process may be had, or to pay the supervisory fees provided by this act, the Commissioner may revoke the certificate of authority of such association and invoke other remedies as provided by law. In the event of such revocation, the Secretary of State shall revoke and cancel the certificate of domestication of such association.
Added by Laws 1970, c. 101, § 64, eff. June 1, 1970. Amended by Laws 1986, c. 219, § 6, emerg. eff. June 9, 1986; Laws 1987, c. 61, § 16, emerg. eff. May 4, 1987; Laws 1993, c. 183, § 61, eff. July 1, 1993; Laws 2000, c. 81, § 67, eff. Nov. 1, 2000.
§18381.65. Limited certificate of authority Activities of unauthorized associations.
A. A federal association not having its main office or any branches in this state or any foreign association may apply to the State Banking Commissioner for a limited certificate of authority to transact business in this state. The application shall explicitly limit the purposes which the federal association not having its main office or any branches in this state or foreign association may pursue in this state. Such entity may apply to engage in any activity reasonably necessary or desirable in order to deal with loans originated by it in interstate commerce or acquired by it by assignment from an originating lender qualified or otherwise permitted to do business in this state, or any collateral securing such loans, as well as any property, real or personal, acquired by it by foreclosure or otherwise in satisfaction of debt held by it. Without limitation, a limited certificate of authority shall:
1. Permit a federal association not having its main office or any branches in this state or a foreign association to have full access to the courts of this state;
2. Allow it to refinance, renew, extend or work out loans which it has originated in interstate commerce or which it has acquired by assignment;
3. Allow it to take all steps reasonably necessary to monitor collateral and the credit quality of its debtors; and
4. Allow it to manage, rent, sell or finance any property acquired by it by foreclosure or otherwise in satisfaction of debt held by it.
The Commissioner shall have authority to approve under a limited certificate of authority other specific purposes that such entity applies to engage in, provided that those purposes are incidental to or reasonably necessary in connection with the purposes more specifically permitted by this subsection. A federal association not having its main office or any branches in this state, or a foreign association, as part of its application for a limited certificate of authority shall commit that it will not originate loans or solicit or accept applications for loans at any place within this state, nor shall it, directly or indirectly, receive applications for or payments or deposits to deposit accounts or investment securities of any kind at any place within this state. Such entity shall commit in its application that when doing business in this state it shall use a specified fictitious name not containing any of the terms forbidden by Section 381.23 of this title and, without limitation, it shall not use such terms on any office, advertising, telephone listing or other medium of holding itself out to the public within this state. However, in executing any legal documents or participating in court proceedings, the federal association not having its main office or any branches in this state or foreign association shall use its actual name. The Commissioner shall establish a list of items of information required to be contained in or submitted with an application for a limited certificate of authority, and shall fix a reasonable filing fee to defray the cost of processing such applications. The Commissioner shall act upon and issue an order granting or denying each application for a limited certificate of authority. If and when all requirements of the Commissioner are met, a limited certificate of authority shall be issued and the applying entity shall comply with all steps necessary in order to qualify to do business in this state in accordance with the provisions of Section 1130 of this title. The Secretary of State shall not allow such entity to qualify to do business until it furnishes proof that it holds a limited certificate of authority issued by the Commissioner.
B. A federal association not having its main office or any branches in this state or a foreign association shall not be determined to be transacting or engaging in business in this state, either for the purposes of this act or for the purposes of Sections 1130 and 1131 of this title, solely by reason of the activities of its majorityowned subsidiary which is incorporated or qualified to do business within this state. The provisions of this subsection shall have no application to the question of whether the majorityowned subsidiary's parent company is:
1. Subject to service of process and suit in this state pursuant to the laws of this state; or
2. Subject to the taxation laws of this state.
C. A foreign association which does not have a certificate of authority or limited certificate of authority from the Commissioner, or a federal association which does not have permission from the Director of the Office of Thrift Supervision to operate its main office or any branches in this state, shall not be deemed to be transacting or engaging in business in this state, for the purposes of this act, by reason of the purchase or acquisition, holding or sale of loans secured by mortgages on Oklahoma real estate, or participating interests therein, or the foreclosure thereof and acquiring of title to such mortgaged real estate in satisfaction of the mortgage indebtedness.
D. If a certificate of authority or limited certificate of authority to transact business has not been issued by the Commissioner to a federal association not having permission from the Director of the Office of Thrift Supervision to operate its main office or any branches in this state, or to a foreign association, then such unauthorized entity shall not maintain any office in this state and shall not directly or indirectly through brokers, agents or others:
1. Receive applications for or payments or deposits to deposit accounts or investment securities of any kind at any place within this state;
2. Assert or imply directly or by means of the mail, radio, television, newspapers, magazines or other media originating from any place within this state that it has agents or representatives in this state with whom its deposit accounts and investments may be discussed;
3. Distribute any of its advertising material from any place within this state;
4. Display its name by signs or other wording on windows, doors or placards, or otherwise represent that it does business within this state or is represented for transaction of business at any location in this state; or
5. Hold assets in this state other than those permitted by subsection C of this section.
E. The Commissioner may obtain an injunction or take any other action necessary to prevent any federal association not having its main office or any branches in this state or any foreign association from violating any provision of this act or the rules of the Commissioner. Any such entity which violates any provision of this act and any agent or representative who transacts or solicits business for such entity which is acting in violation of this act shall forfeit and pay to the State of Oklahoma, to be recovered in a civil action in the name of the State of Oklahoma, the sum of Five Thousand Dollars ($5,000.00).
Added by Laws 1970, c. 101, § 65, eff. June 1, 1970. Amended by Laws 1988, c. 65, § 33, emerg. eff. March 25, 1988; Laws 1990, c. 118, § 22, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 62, eff. July 1, 1993; Laws 2000, c. 81, § 68, eff. Nov. 1, 2000.
§18381.66. Federal associations.
Federal associations are not deemed to be foreign associations. Unless federal laws or regulations provide otherwise, federal associations, which have their main office in this state, and members thereof shall possess all of the rights, powers, privileges, benefits, immunities and exemptions which are provided by this act or which are now or may be hereafter provided by laws of this state for associations organized under the laws of this state and for the members thereof. This provision is additional and supplemental to any section of this act or other law, which by specific reference is applicable to federal associations and the members thereof.
Added by Laws 1970, c. 101, § 66, eff. June 1, 1970. Amended by Laws 2000, c. 81, § 69, eff. Nov. 1, 2000.
§18-381.66a. Conversion into national banking association or Oklahoma-chartered bank - Vesting of property rights - Pending actions - Conversion of mutual associations - Disposition of preexisting reserves.
A. At an annual meeting or at any special meeting of the members or stockholders called to consider such action, any association may convert itself into a national banking association pursuant to federal laws, or may convert itself into an Oklahoma-chartered bank pursuant to the Oklahoma Banking Code, upon a majority vote of the outstanding stock entitled to vote thereon or upon a majority of the total number of votes of the members present in person or by proxy. An association converting to a state-chartered bank shall file with the State Banking Commissioner an application which shall be the application prescribed in Section 305 of Title 6 of the Oklahoma Statutes. However, the applicant shall not be required to provide evidence of need of granting authority to convert. The applicant association shall follow the publication requirements of Section 306.1 of Title 6 of the Oklahoma Statutes. Issuance of a state bank charter to the converting association by the Oklahoma Banking Board shall follow the prescribed procedure of the Oklahoma Banking Code. There shall be filed with the Commissioner a copy of the charter issued to such national banking association by the Office of the Comptroller of the Currency or of the certificate of authority issued to such Oklahoma-chartered bank by the Oklahoma Banking Board. Upon the grant to any association of a charter by the Office of the Comptroller of the Currency or of a certificate of authority by the Oklahoma Banking Board, the association receiving such charter or certificate of authority shall cease to be an association incorporated by this state. Upon conversion of any association into a national banking association or Oklahoma-chartered bank, such national banking association or Oklahoma-chartered bank shall be deemed to be a continuation of the entity of the association so converted. All property of the converted association, including its rights, titles and interests in and to all property of whatever kind, whether real, personal or mixed, and things in action, and every right, privilege, interest and asset of any conceivable value or benefit then existing or pertaining to it, or which would inure to it, shall immediately by operation of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue and be the property of such national banking association or Oklahoma-chartered bank into which the association has converted itself. Such national banking association or Oklahoma-chartered bank shall have, hold and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the converting association, and such national banking association or Oklahoma-chartered bank as of the time of the taking effect of such conversion shall continue to have and succeed to all the rights, obligations and relations of the converting association. All pending actions and other judicial proceedings to which the converting association is a party shall not be deemed to have abated or to have discontinued by reason of such conversion. Such pending actions and other judicial proceedings may be prosecuted to final judgment, order or decree in the same manner as if such conversion into such national banking association or Oklahoma-chartered bank had not been made. The national banking association or Oklahoma-chartered bank resulting from such conversion may continue such action in its corporate name as a national banking association or Oklahoma-chartered bank, and any judgment, order or decree may be rendered for or against it which might have been rendered for or against the converting association theretofore involved in such judicial proceedings.
B. In the case of a conversion of a mutual association to a national banking association or Oklahoma-chartered bank, the members of the mutual association, at the meeting at which conversion to a national banking association or Oklahoma-chartered bank is voted upon, shall also vote upon the directors who shall be the directors of the national banking association or Oklahoma-chartered bank after the conversion takes place. The directors shall file with the Commissioner an application for conversion and a firm commitment for, or evidence of, insurance of deposits and other accounts of a withdrawable type by the Federal Deposit Insurance Corporation. The Commissioner may refuse to approve the application if it has reason to believe that the plan of conversion is not fair and equitable to all of the members and that sufficient provision is not made to protect the interests of the depositors of the prospective national banking association or Oklahoma-chartered bank. Upon the approval by the Commissioner and by the Office of the Comptroller of the Currency or the Oklahoma Banking Board, the association shall cease to be a mutual association.
C. The conversion of a mutual association into a national banking association or Oklahoma-chartered bank shall be effected in accordance with a plan of conversion adopted by the members as provided in this section and consistent with the other provisions of this title. The plan shall provide that:
1. Each deposit account holder in the converting mutual association shall receive a deposit account in the converted national banking association or Oklahoma-chartered bank equal in amount to the deposit account of such holder in the mutual association;
2. A record date for determining deposit account holders entitled to purchase stock shall be established which is not less than ninety (90) days prior to the date of adoption of the plan of conversion by the board of directors of such association;
3. Officers, directors and employees of the association and their associates shall forego any participation in the initial distribution of permanent capital stock to the extent that any such person increased the account of such person by more than Twenty Thousand Dollars ($20,000.00) during the six (6) months preceding the record date established pursuant to this section. For this purpose the term "associate" shall have the same meaning as in Section 381.50 of this title;
4. The amount of stock of the converted national banking association or Oklahoma-chartered bank to which a member is entitled to subscribe shall be determined on the basis of the ratio of the deposits of the member with the association on the record date to the total deposits of the association on the record date, as applied to the initial issuance of permanent capital stock. Each deposit account holder as of the record date may receive warrants authorizing the purchase of shares of permanent capital stock of the converted national banking association or Oklahoma-chartered bank at a price determined by the board of directors of the institution and approved by the Commissioner or the Director of the Office of Thrift Supervision, and scrip denoting fractional stock interests of less than one share. However, no deposit account holder shall be entitled to scrip representing fractional interests of less than one-fifth (1/5) share of stock; and
5. In connection with a conversion, deposit account holders shall have a preemptive right to purchase such permanent capital stock for a period of not less than fourteen (14) days from the date the offer to sell permanent capital stock is made.
D. In no case of conversion of a mutual association to a national banking association or Oklahoma-chartered bank shall any reserves existing at the time of such conversion ever inure to the benefit of the permanent capital stock, but shall be maintained as reserves in accordance with directions of the Commissioner. The reserves of the converted national banking association or Oklahoma-chartered bank resulting from the conversion of a mutual association shall be not less than the amount necessary to meet the requirements of the Office of the Comptroller of the Currency or of the Federal Deposit Insurance Corporation, respectively.
Added by Laws 1990, c. 173, § 24, emerg. eff. May 3, 1990. Amended by Laws 1993, c. 183, § 63, eff. July 1, 1993; Laws 2000, c. 81, § 70, eff. Nov. 1, 2000.
§18-381.66b. Conversion of national banking association or Oklahoma-chartered bank into stock association.
A. At an annual meeting or at any special meeting of the stockholders called to consider such action, any national banking association or Oklahoma-chartered bank may convert itself into a stock association pursuant to this act upon a majority vote of the outstanding stock entitled to vote thereon, and in compliance with any federal laws, or provisions of the Oklahoma Banking Code, applicable to such a transaction by the converting national banking association or Oklahoma-chartered bank. Copies of the minutes of the proceedings of such meeting of stockholders, verified by the affidavit of the secretary or an assistant secretary, and verified copies of the plan of conversion shall be filed for approval with the State Banking Commissioner. At the meeting at which conversion is voted upon, the stockholders shall also vote upon the directors who shall be the directors of the state-chartered association after conversion takes effect. Such directors then shall execute and file an application for conversion, a proposed certificate of incorporation and proposed bylaws, and the Commissioner shall, upon approval, issue a certificate of authority, all as provided in this act. The Commissioner shall approve the application for conversion and issue a certificate of authority if it appears that:
1. The resulting stock association meets all of the requirements of this act as to the formation of a new stock association; and
2. The resulting stock association will have an adequate capital structure including surplus. The association shall include in the certificate of incorporation the following, as applicable: "This association is incorporated by conversion from a national banking association/Oklahoma-chartered bank." All of the directors who are chosen for the association shall sign and acknowledge the certificate of incorporation as the subscribers. The Commissioner may provide, by regulation, for any additional procedure to be followed by any such national banking association or Oklahoma-chartered bank converting into an association under this act, including the amount of the application fee to be paid to the Oklahoma State Banking Department. All the provisions regarding property and other rights and liabilities contained in Section 381.66a of this title shall apply, in reverse order, to the conversion of a national banking association or Oklahoma-chartered bank into an association incorporated under this act, so that the state-chartered association shall be a continuation of the corporate entity of the converting national banking association or Oklahoma-chartered bank.
B. In connection with the review of the application for conversion, the Commissioner may conduct an examination of the converting institution, and such examination shall be paid for by the converting institution according to the fees prescribed in subsection D of Section 381.15 of this title for special examinations. The deposit payable by the converting institution pursuant to paragraph 5 of Section 381.16 of this title shall not be a limitation on the examination fee payable by the converting institution.
C. If a converting national banking association or Oklahoma-chartered bank has assets which do not conform to the requirements of state law for the converted state association, or there are business activities which are not permitted for the converted state association, the Commissioner may permit a reasonable time to conform with state law.
Added by Laws 1990, c. 173, § 25, emerg. eff. May 3, 1990. Amended by Laws 1993, c. 183, § 64, eff. July 1, 1993; Laws 2000, c. 81, § 71, eff. Nov. 1, 2000.
§18-381.66c. Merger of national banking associations or Oklahoma-chartered banks into stock association - Approval by boards of directors - Terms of agreement - Approval by Board - Approval by stockholders.
A. Upon approval of the State Banking Commissioner, one or more national banking associations or Oklahoma-chartered banks may be merged with and into a stock association as hereafter prescribed, except that the action by a constituent national banking association shall be taken in the manner prescribed by and shall be subject to any limitation or requirements imposed by any law of the United States which shall govern the rights of its dissenting shareholders.
B. The board of directors of each constituent institution shall, by a majority of the entire board, approve a merger agreement which shall contain:
1. The name of each constituent institution and the location of each office;
2. With respect to the resulting stock association the name and the location of each proposed office, the name and residence of each director to serve until the next annual meeting of the stockholders, the name and residence of each officer, the amount of capital, the number of shares and the par value of each share, whether preferred stock is to be issued and the amount, terms and preferences and the amendments to the certificate of incorporation and bylaws;
3. The terms for the exchange of shares of the constituent institutions for the shares or other consideration of the resulting stock association;
4. A statement that the merger and the merger agreement is subject to approval by the Commissioner and by the stockholders of each constituent institution;
5. Provisions governing the manner of disposing of the shares of the resulting stock association not taken by dissenting stockholders of the constituent institutions; and
6. Such other provisions as the Commissioner requires to enable it to discharge its duties with respect to the merger.
C. After approval by the board of directors of each constituent institution, the merger agreement shall be submitted to the Commissioner for approval, together with a fee for review of the merger as required by rule of the Commissioner which shall be deposited in the Oklahoma State Banking Department revolving fund pursuant to Section 211.1 of Title 6 of the Oklahoma Statutes, certified copies of the authorizing resolutions of the several boards of directors showing approval by a majority of the entire board and evidence of proper action by the board of directors of any constituent national banking association.
D. Without approval by the Commissioner, no asset shall be carried on the books of the resulting stock association at a valuation higher than that on the books of the constituent bank at the time of the last examination by a state or national bank examiner before the effective date of the merger.
E. Within thirty (30) days after receipt by the Commissioner of the papers specified in subsection C of this section, the Commissioner shall approve or disapprove the merger agreement. The Commissioner shall approve the agreement if it appears that:
1. The resulting stock association meets all of the requirements of this act as to the formation of a new stock association;
2. The agreement provides an adequate capital structure including surplus;
3. The agreement is fair; and
4. The merger is not contrary to the public interest. If the Commissioner disapproves an agreement, the Commissioner shall state all objections and give an opportunity to the constituent institutions to amend the merger agreement to obviate such objection.
F. Where the resulting stock association is not to exercise trust powers, the Commissioner shall not approve a merger until satisfied that adequate provision has been made for successors to fiduciary positions held by constituent banks, and the manner of succession of trust powers and successor trustees shall follow the same procedure as set out in Section 1018 of Title 6 of the Oklahoma Statutes.
G. To be effective, a merger must be approved by the stockholders of each constituent institution by a majority vote of the outstanding voting stock at a meeting called to consider such action, which vote shall constitute the adoption of the certificate of incorporation and bylaws of the resulting stock association, including the amendments set forth in the merger agreement.
H. The notice of the meeting of stockholders shall be given by publication in a newspaper of general circulation in the place where the main office of each constituent institution is located, at least once a week for four (4) successive weeks, and by mail, at least fifteen (15) days before the date of the meeting, to each stockholder of record of each constituent institution at the address of such stockholder on the books of the institution, who has not waived such notice in writing. No notice by publication need be given if written waivers are received from the holders of a majority of the outstanding shares of each class of voting stock.
I. At the effective time of the merger the charters of the constituent institutions other than the resulting stock association shall be deemed to be surrendered.
J. The resulting stock association shall be considered the same business and corporate entity as each constituent bank with all of the rights, powers, and duties of each constituent bank, except as limited by the certificate of incorporation and bylaws of the resulting stock association.
K. Any reference to any constituent bank in any writing, whether executed or taking effect before or after the merger, shall be deemed a reference to the resulting stock association if not inconsistent with the other provisions of such writing.
L. If a constituent bank has assets which do not conform to the requirements of state law for the resulting stock association, or if there are business activities which are not permitted for the resulting stock association, the Commissioner may permit a reasonable time to conform with state law.
M. Rights of dissenting stockholders of a constituent bank shall be those described in Section 1104 of Title 6 of the Oklahoma Statutes.
Added by Laws 1990, c. 173, § 26, emerg. eff. May 3, 1990. Amended by Laws 1993, c. 183, § 65, eff. July 1, 1993; Laws 2000, c. 81, § 72, eff. Nov. 1, 2000.
§18-381.66d. Merger of stock association into national banking association - Rights and liabilities of association and stockholders - Applicable law.
Nothing in the law of this state shall restrict the right of a stock association to merge with and into a national banking association. The action to be taken by a constituent stock association and its rights and liabilities and those of its stockholders shall be the same as those prescribed for national banking associations at the time of the action by the applicable laws of the United States and not by the laws of this state. Upon the completion of the merger with and into a national banking association, the certificate of authority and the certificate of incorporation of any merging stock association shall automatically terminate.
Added by Laws 1990, c. 173, § 27, emerg. eff. May 3, 1990.
§18381.71. Definitions.
As used in this section and Sections 381.72 and 381.73 of this title:
1. "Acquire" means:
a. the merger or consolidation of an outofstate savings institution with or into an instate savings institution,
b. the acquisition by an outofstate savings institution of direct or indirect ownership or control of voting shares or, in the case of a mutual savings institution, voting rights of an instate savings institution if, after such acquisition, such outofstate savings institution directly or indirectly owns or controls twentyfive percent (25%) or more of any class of voting shares or voting rights of such instate savings institution, excluding shares or rights owned or held by the United States or by any organization wholly owned by the United States,
c. the acquisition by an outofstate savings institution of the direct or indirect ownership of all or substantially all of the assets, including, if agreed, the assets of any branches and facilities, of an instate savings institution, or
d. any other action that would result in the direct or indirect ownership or control by an outofstate savings institution of an instate savings institution;
2. "Control" means direct or indirect ownership of or holding with the power to vote twentyfive percent (25%) or more of the voting shares, or in the case of a mutual savings institution, the voting rights, excluding shares or rights owned or held by the United States or by any organization wholly owned by the United States, or the power in any manner to elect a majority of the directors or directly or indirectly to exercise a controlling influence, as determined by the State Banking Commissioner after notice and an opportunity for hearing, on the management or policies of a company;
3. "Holding company" means a company which owns or controls one or more savings institutions organized under the laws of any state or the laws of the United States;
4. "Main office" means the office of a savings institution designated by the Commissioner or the Office of Thrift Supervision as the main office of the institution and located within the United States;
5. "Instate savings institution" means a savings institution organized under the laws of this state or the laws of the United States whose main office is located in Oklahoma;
6. "Oklahoma holding company" means a holding company organized under the laws of this state;
7. "Outofstate savings institution" means any savings institution organized under the laws of another state or the laws of the United States whose main office is located in another state;
8. "Savings institution" means any association or federal association, or as the context requires, any holding company or subsidiary of such savings institution; and
9. "Subsidiary" means a company which is owned or controlled by a savings institution.
Added by Laws 1986, c. 219, § 1, emerg. eff. June 9, 1986. Amended by Laws 1987, c. 61, § 17, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 34, emerg. eff. March 25, 1988; Laws 1993, c. 183, § 66, eff. July 1, 1993; Laws 2000, c. 81, § 73, eff. Nov. 1, 2000.
§18-381.72. Repealed by Laws 1990, c. 118, § 26, emerg eff. April 23, 1990.
§18381.73. Acquisition of control Prohibited transactions Approval of acquisition Branching, acquisition and conversion by subsidiaries - Limitations and restrictions - Applicable law Penalties.
A. An outofstate savings institution, upon approval by the State Banking Commissioner, may acquire direct or indirect control of an unlimited number of instate savings associations for operation as in-state savings institutions, and may acquire any such institutions' parent Oklahoma holding company. Any acquisition made pursuant to the provisions of this section may include assets and liabilities of the in-state savings institution or its parent Oklahoma holding company and all branches and facilities thereof.
B. 1. No instate savings institution which becomes a subsidiary of an outofstate savings institution under any extraordinary acquisition provisions of federal law, or which is otherwise controlled by an outofstate savings institution, shall be permitted to acquire direct or indirect ownership or control of, or to convert to a branch, any additional instate savings institution or to establish additional branches or facilities, except as otherwise provided for in this section.
2. No outofstate savings institution may directly or indirectly acquire control of an instate savings institution or its parent Oklahoma holding company except as otherwise permitted by this section.
C. No acquisition provided for in this section shall be permitted unless the approval of the Commissioner required pursuant to subsection A of this section:
1. Includes, for all acquisitions, a finding that:
a. the instate savings institution sought to be acquired or all of the savings institution subsidiaries of the parent Oklahoma holding company sought to be acquired have either been in existence and continuous operation for more than five (5) years, and
b. notice of intent to acquire has been published in a newspaper of general paid circulation in the county or counties where the instate savings institution to be acquired is located and that a notice of intent to acquire has been mailed by certified mail with return receipt requested to each person owning stock in the instate savings institution to be acquired or in its parent Oklahoma holding company or, if the instate savings institution to be acquired is a mutual association, notice has been given as in the case of a proceeding under Section 381.61 of this title;
2. Includes, for any acquisition of a majority of the voting shares of a stock association or of its parent Oklahoma holding company, or for any acquisition of a mutual association by merger or purchase and assumption transaction with another in-state savings association, a finding that the acquisition has been approved by the board of directors and a majority of the stockholders of or holders of voting rights in the instate savings institution or of its parent Oklahoma holding company, as applicable;
3. Subjects the acquisition to any conditions, restrictions, and requirements that would be applicable to such an acquisition by an instate savings institution of an outofstate savings institution in the state where the outofstate savings institution has its main office, if such state has enacted and implemented legislation authorizing the acquisition by an instate savings institution of outofstate savings institutions located in that state, but that would not be applicable to acquisitions in that state by an outofstate savings institution all of whose savings institution subsidiaries are located in that state; and
4. Except when the additional acquisition is of an instate savings institution whose stock is held as stock acquired in the course of realizing upon a security interest which secured a debt previously contracted in good faith prior to the original acquisition by the outofstate savings institution, prohibits additional branching and further acquisitions by an instate savings institution which is a subsidiary of an outofstate savings institution unless and until the earlier of:
a. such time as the Commissioner determines that the state in which the outofstate savings institution has its main office has enacted and implemented legislation authorizing instate savings institutions to acquire savings institutions in that state on a reciprocal basis, or
b. the expiration of a fouryear period commencing on the date of acquisition by the outofstate savings institution.
D. Any in-state savings institution or its parent Oklahoma holding company which becomes a subsidiary of an out-of-state financial institution under the extraordinary acquisition provisions of federal law, or which is otherwise deemed to be controlled by an out-of-state financial institution, may acquire direct or indirect ownership or control of any additional in-state financial institution or its parent Oklahoma holding company, establish additional branches or facilities, or convert the existing controlled in-state savings institution to branches of another in-state savings institution:
1. If the Commissioner has determined that the principal place of business of the out-of-state savings institution has enacted and implemented reciprocal acquisition legislation within the purview of this section; or
2. Upon the expiration of a four-year period commencing on the date of acquisition by the out-of-state savings institution.
E. All limitations and restrictions of this act applicable to instate savings institutions shall apply to an instate savings institution which becomes a direct or indirect subsidiary of an outofstate savings institution and to the outofstate savings institution. The provisions of this subsection shall not be construed to prohibit the acquisition by an outofstate savings institution of all or substantially all of the shares of an instate savings institution organized solely for the purpose of facilitating the acquisition of a savings institution which has been in existence and continuous operation as a savings institution for more than five (5) years, if the acquisition has otherwise been approved pursuant to this subsection. Nor shall the provisions of this subsection be construed to prohibit an outofstate savings institution which acquires an instate savings institution under this section from additional acquisitions under this section, if such acquisition would otherwise be permitted.
F. Any outofstate savings institution which controls an instate savings institution shall be subject to the laws of this state and the rules of its agencies relating to the acquisition, ownership, and operation of instate savings institutions. The Commissioner shall make such rules including the imposition of reasonable application and administration fees as it finds necessary to implement the provisions of this act.
G. The Commissioner may enter into cooperative agreements with other regulatory agencies to facilitate the regulation of savings institutions doing business in this state. If such agreements result in the payment of fees, however calculated, by any other regulatory agency to the Oklahoma State Banking Department for examination activities conducted by Department personnel, whether such examination activity is conducted inside or outside this state, such fees shall be deposited in the Bank Examination Revolving Fund established in Section 211.2 of Title 6 of the Oklahoma Statutes. If such agreements result in the payment of fees, however calculated, by the Department to any other bank supervisory agency for examination activities conducted by such other regulatory agency, whether such examination activity is conducted inside or outside this state, such fees shall be paid by the Department from the Bank Examination Revolving Fund established by Section 211.2 of Title 6 of the Oklahoma Statutes. The Commissioner may accept reports of examinations and other records from such other agencies in lieu of the Commissioner conducting examinations of instate savings institutions controlled by outofstate savings institutions. The Commissioner may take any action jointly with other regulatory agencies having concurrent jurisdiction over savings institutions doing business in this state or may take such actions independently in order to carry out its responsibilities.
H. The Commissioner shall have the power to enforce the prohibitions provided for in subsection B of this section by requiring divestiture and through the imposition of fines and penalties, the issuance of cease and desist orders, and such other remedies as are provided by law.
I. Any organization which intentionally and willfully violates any provision of this section, upon conviction, shall be fined not less than Five Hundred Dollars ($500.00) nor more than Five Thousand Dollars ($5,000.00) for each day during which the violation continues. Any individual who intentionally and willfully participates in a violation of any provision of this section, upon conviction, shall be fined not more than Ten Thousand Dollars ($10,000.00) or imprisoned not more than one (1) year, or both such fine and imprisonment.
J. Any final order of the Commissioner pursuant to this section shall be appealable pursuant to Section 207 of Title 6 of the Oklahoma Statutes.
Added by Laws 1986, c. 219, § 3, operative July 1, 1987. Amended by Laws 1989, c. 292, § 1, operative July 1, 1989; Laws 1990, c. 118, § 23, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 67, eff. July 1, 1993; Laws 2000, c. 81, § 74, eff. Nov. 1, 2000.
§18381.74. Taking possession by Commissioner.
A. Except as otherwise provided in this act, the State Banking Commissioner may take possession of a statechartered savings and loan association, if the Commissioner determines that:
1. The business of the association is being conducted in an unlawful or unsound manner;
2. The association does not have funds available to pay all withdrawals of savings deposits when due or is otherwise unable to continue normal operations;
3. The examination of the association has been obstructed or impeded; or
4. The association is operating in violation of provisions of this act despite written notice to discontinue such violation.
B. 1. The Commissioner may take possession of any statechartered savings association by posting upon the premises of such association a notice reciting that possession is being assumed pursuant to the provisions of this section and stating when possession shall be deemed effective. Possession may become effective no earlier than the posting of the notice. A copy of the notice shall be filed in the district court of the county where the association is located. The Commissioner shall notify, if applicable, the appropriate district offices of the Director of the Office of Thrift Supervision and the Federal Deposit Insurance Corporation of taking possession of the association.
2. a. Once possession is effective the Commissioner shall be vested with the full and exclusive power of management and control, including the power to:
(1) continue or discontinue the business of the association,
(2) stop or limit the payment of the obligations of the association,
(3) employ any necessary assistants, including legal counsel,
(4) execute any instrument in the name of the association as Commissioner in charge of liquidation,
- commence, defend or conduct in the name of the association any action or proceeding to which it may be a party,
(6) enforce the liabilities of stockholders, officers and directors of the association,
(7) terminate possession by restoring the assets of the association to its board of directors, and
(8) reorganize or liquidate the association in accordance with this act.
b. As soon as practicable after taking possession the Commissioner shall make an inventory of the assets of the association and file a copy thereof with the district court where the notice of possession was filed.
3. While the Commissioner is in possession there shall be a postponement of six (6) months after the effective date of possession, of the date upon which any period of limitation fixed by statute or agreement would otherwise expire on a claim or right of action of the association, or upon which a review must be taken or a pleading or other document must be filed by the association in any pending action or proceeding.
4. a. The Commissioner, within two (2) days after taking possession of a stock association, shall call a special meeting of the stockholders to allow the stockholders to retain the incumbent board of directors or to elect a newly constituted board of directors, who may represent the stockholders in the liquidation proceedings and observe, assist and protect the interests of the stockholders.
b. The board of directors of the association is authorized to bring all necessary legal actions for and on behalf of the stockholders and to pay attorney's fees in a reasonable amount, if such action benefits the liquidating account of the failed association.
c. The board of directors, as authorized by the stockholders, shall represent the stockholders in the district court in which the notice of possession was filed by the Commissioner, as to all matters affecting the association.
5. The association shall continue to exist as a body corporate for all purposes, except for the purpose of continuing the business for which the association was organized, and may function to assist the Commissioner or to protect the stockholders' interests in the assets of the liquidating account.
C. 1. If the Commissioner determines that an emergency exists which may result in serious losses to the depositors of an association, he may take possession of the association without a prior hearing. Within ten (10) days after the Commissioner has taken possession any interested person may appeal such action pursuant to the provisions of Section 207 of Title 6 of the Oklahoma Statutes.
2. If the Commissioner determines that liquidation of the association is warranted, notice of such determination shall be given to such directors, stockholders, depositors and creditors of the association as the Commissioner may prescribe. The notice shall be by restricted delivery to the directors and stockholders at their lastknown address as shown on the records of the association, and notice to the depositors and creditors shall be published in a newspaper of general circulation in the county where the main office of such association is located. Any objection to such determination by a person directly affected thereby shall be appealed pursuant to the provisions of Section 207 of Title 6 of the Oklahoma Statutes. Unless within ten (10) days after the date of publication an order is issued staying the liquidation or unless the Commissioner tenders to the Federal Deposit Insurance Corporation the appointment as liquidator pursuant to Section 381.77 of this title, the Commissioner shall liquidate the association after providing a bond executed by a surety company authorized to do business in this state, for the benefit of the people of this state, for the faithful discharge of the duties of the Commissioner in connection with such liquidation and the accounting for all monies coming into the possession of the Commissioner. The cost of such bond shall be paid from the assets of the association. Suit may be maintained on such bond by any person injured by a breach of the conditions thereof.
3. After the Commissioner takes possession of an association pursuant to the provisions of this section, the stockholders thereof may repair its credit, restore or substitute its reserves, and otherwise improve its condition so that it is qualified to do a general savings and loan business as provided for by law. Such association shall not reopen its business until the Commissioner issues written permission therefor after an investigation of the affairs of the association and a determination that the board of directors of the association has complied with all applicable laws, that the association's credit and funds are in all respects repaired, and its reserves restored or sufficiently substituted, and that it again should be permitted to reopen for business. Written permission to reopen to do a general savings and loan business shall be issued in the same manner as is provided by law for granting permission to do business after incorporation.
4. If the Commissioner determines that reorganization of the association is warranted or if the Supreme Court, after staying the liquidation of the association, orders such reorganization, the Commissioner, after according a hearing to all interested persons, shall enter an order proposing a reorganization plan. A copy of the plan shall be sent to each depositor and creditor who will not receive full payment of their claim under the plan, together with notice that, unless the plan is disapproved, within fifteen (15) days after the date of the mailing of the plan, in writing by persons holding onethird (1/3) or more of the aggregate amount of such claims, the Commissioner shall proceed to effect the reorganization. A department, agency, or political subdivision of this state holding a claim which will not be paid in full is authorized to participate in the reorganization as any other creditor.
5. a. Notwithstanding any other provision to the contrary, the Commissioner, upon taking possession of an association, may immediately liquidate said association without giving prior notice to the directors, stockholders, depositors and creditors of such association, if it is determined by order of the district court where notice of possession was filed that the immediate liquidation of the association is necessary to protect the interests of the depositors of the association and is otherwise in the public interest.
b. In proceeding with the immediate liquidation of the association, the Commissioner, in order to facilitate the assumption of the deposit liabilities of the closed insured association by another association, may borrow monies from the Federal Deposit Insurance Corporation and pledge some or all of the assets of the closed insured association as security for such borrowing or may sell some or all of the assets of the closed insured association to the Federal Deposit Insurance Corporation.
6. Once the Commissioner takes possession of an association for purposes of liquidation, neither the tenday periods provided by subsection C of this section nor the pendency of any proceeding for review of the action of the Commissioner shall operate to defer, delay, impede or prevent the payment by the Federal Deposit Insurance Corporation of the insured deposits of an insured association.
7. The Commissioner shall make available to the Federal Deposit Insurance Corporation such facilities in or of an insured association and such books, records and other relevant data of the insured association as may be necessary or appropriate to enable the Federal Deposit Insurance Corporation to pay the insured deposits in the insured association as provided in this subsection. The Federal Deposit Insurance Corporation, its directors, officers, agents, and employees, and the Commissioner, and the agents and employees of the Commissioner, shall be free from any liability to the insured association, its directors, stockholders, and creditors, for any action relating to the payment of insured deposits.
D. No judgment, lien, or attachment shall be executed upon any asset of the association while it is in the possession of the Commissioner. The Commissioner, in connection with a liquidation or reorganization may:
1. Vacate and void any lien or attachment, other than an attorney's or mechanic's lien, obtained upon any asset of the association during the Commissioner's possession or within four (4) months prior to commencement thereof, except liens created by the Commissioner while in possession; and
2. Void any transfer of an asset of the association made after or in contemplation of its insolvency with intent to effect a preference.
E. The Commissioner may borrow money in the name of the association and may pledge its assets as security for a loan.
F. All necessary and reasonable expenses of the Commissioner relating to the possession of an association and of its reorganization or liquidation shall be defrayed from the assets of the association. Compensation to liquidating agents and employees shall not be in excess of amounts which such individuals would be entitled to in their regular employment or for like services rendered within the area of the insolvent association, and in no event shall a liquidating agent be paid a monthly salary or wage from the assets of the association in excess of the amount of the monthly salary of the highest paid official of the insolvent association. Any attorney's fee allowed to an attorney representing the liquidating agent shall not exceed the reasonable amount charged by other attorneys of similar competence for like services in regular employment of an attorney in the area of the association.
Added by Laws 1987, c. 61, § 21, emerg. eff. May 4, 1987. Amended by Laws 1990, c. 118, § 24, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 68, eff. July 1, 1993; Laws 2000, c. 81, § 75, eff. Nov. 1, 2000.
§18381.75. Reorganization plan.
A. A plan of reorganization shall not be acceptable unless:
1. Such plan is feasible and fair to all classes of depositors, creditors and stockholders;
2. The aggregate face amount of the interest accorded to any class of depositors, creditors or stockholders under the plan does not exceed the value of the assets upon liquidation less the full amount of the claims of all prior classes, subject, however, to any fair adjustment for new capital that any class will pay in under the plan;
3. Such plan provides for the issuance of capital stock and, if necessary, debentures in an amount that will provide an adequate ratio to deposits;
4. Any exchange of new common stock for obligations or stock of the association will be effected in inverse order to the priorities in liquidation of the classes that will retain an interest in the association and upon terms that fairly adjust any change in the relative interests of the respective classes that will be produced by the exchange;
5. The plan assures the removal of any director, officer or employee responsible for any unsound or unlawful practice or the existence of an unsound condition; and
6. Any merger or consolidation provided by the plan conforms to the requirements of this act.
B. Whenever, in the course of reorganization, supervening conditions render the plan unfair or its execution impractical, the State Banking Commissioner may modify the plan or liquidate the association. Any such action shall be taken by order of the Commissioner upon appropriate notice.
Added by Laws 1987, c. 61, § 22, emerg. eff. May 4, 1987. Amended by Laws 1993, c. 183, § 69, eff. July 1, 1993; Laws 2000, c. 81, § 76, eff. Nov. 1, 2000.
§18381.76. Liquidation by Commissioner.
A. In liquidating an association, the State Banking Commissioner may exercise any power of such association, but shall not, without the approval of the district court where notice of possession was filed:
1. Sell any asset of the association having a value in excess of Five Hundred Dollars ($500.00) or such larger sum as may be determined by the court, but not exceeding One Hundred Thousand Dollars ($100,000.00);
2. Compromise or release any claim exceeding Five Hundred Dollars ($500.00), exclusive of interest or such larger sum as may be determined by the court, but not exceeding One Hundred Thousand Dollars ($100,000.00); or
3. Make any payment on any claim, other than a claim upon an obligation incurred by the Commissioner, before preparing and filing a schedule of determinations in accordance with subsection H of this section.
B. 1. The Commissioner may lease for oil and/or gas purposes any land vested in the Commissioner as assets of an insolvent association.
2. In making or executing any such lease the Commissioner shall retain and reserve a royalty of not less than oneeighth (1/8) of the oil and/or gas produced from said land. Said lease shall be made in the same manner as provided for by law for the sale of other assets of statechartered associations in the possession of the Commissioner.
C. Within six (6) months after the commencement of liquidation proceedings, the Commissioner may terminate any executory contract, including but not limited to contracts for services or advertising, to which the association is a party or any obligation of the association as a lessee. A lessor who receives at least sixty (60) days' notice of the Commissioner's decision to terminate the lease shall not be entitled to a claim for rent other than rent accrued to the date of termination nor for damages for such termination, except that on building or association premises the lessor may receive damages not exceeding one (1) year's rent as provided in such lease.
D. As soon after the commencement of liquidation as is practicable, the Commissioner shall take the necessary steps to terminate all fiduciary positions held by the association and take such action as may be necessary to surrender all property held by the association as a fiduciary and to settle its fiduciary accounts. The Commissioner may transfer such fiduciary accounts to another qualified corporate fiduciary in the same community without assent of the parties. Notice of such transfer shall be given by registered mail to the parties, and the manner of succession of trust powers and successor trustees shall be in accordance with the procedure provided in Section 1018 of Title 6 of the Oklahoma Statutes.
E. The right of any agency of the United States insuring deposits to be subrogated to the rights of depositors upon payment of their claims shall not be less extensive than what the law of the United States requires as a condition of the authority to issue such insurance or make such payments to depositors of federal associations.
F. Within ten (10) days after taking possession, the Commissioner shall send notice of the liquidation to each known depositor, creditor, lessee of a safe deposit box, and bailor of property held by the association, at the address shown on the books of the association. The notice shall also be published in a newspaper of general circulation in the county in which the main office of the association is located once a week for three (3) successive weeks. The Commissioner shall send with each notice a statement of the amount shown on the books of the association to be the claim of the depositor or creditor, with all setoffs and any amounts due to the association. The notice shall demand that property held by the association as bailee or in a safe deposit box be withdrawn by the person entitled thereto and, if the amount claimed differs from that stated in the statement to be due, that the depositor or creditor file a claim with the Commissioner within sixty (60) days from the date of the first publication of the notice of the liquidation given by the Commissioner, in accordance with the procedure prescribed in the notice. The failure of any depositor, creditor or claimant to receive a notice, or observe the published notice of the liquidation by the Commissioner, shall not relieve such claimant of the obligation to file a claim, if the amount thereof differs from the amount found by the Commissioner. If no claim is filed by the claimant within the time specified, then the determination of the Commissioner shall be final and shall constitute the claim of that claimant.
G. Safe deposit boxes, the contents of which have not been removed within sixty (60) days from the date of first publication of the notice of liquidation, shall be opened by the Commissioner. Sealed packages containing the contents of such box, with a certificate of inventory of contents, together with any unclaimed property held by the association as bailee and certified inventories thereof, shall be held by the Commissioner and administered in accordance with the provisions of the Uniform Unclaimed Property Act.
H. The Commissioner shall:
1. Notify each person whose claim has not been allowed in full, by mailing to the lastknown address of such person, as shown on the records of the association, a notice of the time when and the place where the schedule of determinations will be available for inspection and the date when the Commissioner shall file the schedule in court;
2. As soon as practical and within one hundred twenty (120) days from the date of first publication of the notice of liquidation, determine the amount, if any, owing to each known creditor or depositor and the priority class of such claim under subsection K of this section, and file such determination in the district court where notice of possession was filed; and
3. As soon as practical and within sixty (60) days from the date of filing, reject any claim if the Commissioner doubts the validity thereof.
I. Within twenty (20) days after the filing of the schedule of determinations, any creditor, depositor or stockholder may file an objection to any determination which adversely affects such creditor, depositor or stockholder. Objections so filed shall be heard and determined by the court. The clerk of such district court shall enter the objection upon the court docket under the case number assigned to the liquidation proceedings. The Commissioner and interested claimants as the court determines shall be notified of such objection not less than ten (10) days prior to the hearing on such objection. The matter shall be tried de novo. No person having a claim against an insolvent association shall maintain action thereon except as herein provided.
J. After filing the schedule of determinations and establishing proper reserves for the payment of costs, expenses of liquidation and disputed claims, the Commissioner shall pay to any agency of the United States insuring deposits in the insolvent association such sum as may be then available but not exceeding the amount paid out by such agency as such an insurer of deposits and accounts. The Commissioner from time to time may also make partial distribution to the holders of claims which are undisputed or which have been allowed by the district court, in the order of their priority as provided in subsection K of this section. The district court supervising the liquidation, as soon as practicable after the establishment of an adequate and proper reserve for payment of disputed claims, costs and expenses of liquidation, shall direct the Commissioner to make a substantial partial pro rata distribution that will not interfere with orderly liquidation, to the holders of undisputed claims and those allowed by the court in the order of their priority, to the extent that there remains only the determination and settlement of disputed claims and the procedures of the final accounting and final distribution to be made by the Commissioner as provided in this section.
K. 1. The following claims shall have priority in the order specified:
a. obligations incurred by the Commissioner, fees and assessments due to the Oklahoma State Banking Department, and all expenses of liquidation, all of which may be covered by a proper reserve of funds,
b. approved claims of depositors against the general liquidating account of the association,
c. approved claims of general creditors against the general liquidating account of the association,
d. claims otherwise proper which were not filed within the time prescribed by subsection F of this section, and
e. claims of stockholders of the association.
2. No claim shall be entitled to interest thereon if it is paid within six (6) months after the first publication of notice of the liquidation by the Commissioner. If the claim is paid after such period, then the unpaid balance of the claim shall be credited with interest at the rate of six percent (6%) per annum for the expiration of the six (6) months until paid or finally canceled by exhaustion of all assets.
3. All distribution declared in accordance with subsection J of this section, which shall not be claimed within one (1) year, shall be canceled upon the order of the district court having jurisdiction of the liquidation of such insolvent association, and the proceeds thereof returned to the general liquidating account of the insolvent association. Provided, that notice of the application of the Commissioner to the district court for permission to cancel such unclaimed distributions shall be given by publication for two (2) successive weeks in a newspaper of general circulation in the county where the main office of the insolvent association is located. The notice shall describe the unclaimed distributions sought to be canceled, giving the name and location of the insolvent association, the name of the payee and the amount and shall recite the Commissioner has filed an application in the designated district court for cancellation of such distributions and shall refer to the application for further particulars.
4. Any assets remaining after all partial distributions, after all claims have been paid, or ample provisions for reserves are made for payment thereof by the court, shall be distributed to the stockholders in accordance with their respective interests.
L. Unclaimed funds, other than unclaimed distributions, remaining after completion of the liquidation shall be retained by the Commissioner and administered in accordance with the Uniform Unclaimed Property Act.
M. 1. During the liquidation procedure, the Commissioner and the agents and employees of the Commissioner shall prepare an annual report that details all receipts and disbursements made from assets in the possession of the Commissioner. A copy of the annual report shall be filed with the district court of the county where the notice of taking possession was filed and a hearing shall be held thereon. Interested parties and the board of directors of the insolvent association shall be given such notice of the hearing as the court directs and shall make such objections as they shall desire to the account. The failure to object at a hearing shall not prejudice the right of any claimant or interested party to object to items of expense and proceedings in the liquidation upon the final account.
2. When the assets have been distributed in accordance with this section, except unclaimed funds and contents of safe deposit boxes held by the Commissioner, the Commissioner shall file a final account with the court. Notice of hearing upon the final account shall be given, of not less than ten (10) days nor more than thirty (30) days prior to the date of the hearing, by registered or certified mail, to all interested persons and to the board of directors of the insolvent association and the notice shall be published for two (2) successive weeks in some newspaper of general circulation published in the county where the association is located, showing the nature of the hearing, the date and time of the hearing and that such account is for final settlement of the liquidating account of such insolvent association.
3. The final account shall reflect all the acts of the Commissioner as supported by annual reports and such necessary items to support the account, including distribution of such remaining cash to the stockholders in accordance with their interests and all other assets to the board of directors of the association as liquidating agents for the stockholders under the Oklahoma General Corporation Act.
4. The court shall hear all matters relating to the final account; allow, reduce or reject any item of expense; and determine all matters before it. Any person aggrieved by the judgment of the court may appeal as in any other civil action.
5. Upon approval of the final account by the court, the Commissioner shall be relieved of liability in connection with the liquidation and shall cancel the charter upon the records of the Department.
Added by Laws 1987, c. 61, § 23, emerg. eff. May 4, 1987. Amended by Laws 1991, c. 331, § 50, eff. Sept. 1, 1991; Laws 2000, c. 81, § 77, eff. Nov. 1, 2000.
§18381.77. Liquidation by Federal Deposit Insurance Corporation.
A. The Federal Deposit Insurance Corporation (FDIC) may act without bond as the liquidating agent of any insured association closed by the State Banking Commissioner.
B. The Commissioner, upon closing an insured association, may tender to the FDIC the appointment as liquidator of such association.
C. Upon being notified in writing of the acceptance of such an appointment, the Commissioner shall immediately file in the office of the county clerk of the county where the main office of the insured association is situated a certificate evidencing the appointment of the FDIC as liquidator. Upon the filing of the certificate the possession of all the assets, business and property of such association of every kind and nature, wheresoever situated, shall be deemed transferred from such association and the Commissioner to the FDIC. Without the execution of any instruments of conveyance, assignment, transfer or endorsement, the title to all such assets and property shall be vested in the FDIC and the Commissioner thereafter shall be forever relieved from any and all responsibility and liability with respect to the liquidation of such association. With respect to a federal association, it shall be sufficient to file a certified copy of the resolution of the Director of the Office of Thrift Supervision appointing a receiver.
D. When the Director of the Office of Thrift Supervision or FDIC transfers all real property, interests in real property, and liens on real property of a closed insured association or federal association, collectively referred to for the purpose of this subsection as the "transferred property", to a single existing association, federal association or bank or a newly chartered federal association, the Director of the Office of Thrift Supervision or FDIC shall file a memorandum of transfer or a memorandum of assignment so stating in the office of the county clerk of the county where real property records must be recorded with respect to the transferred property. The memorandum shall be executed by an authorized special representative of the Director of the Office of Thrift Supervision or of the FDIC and shall have attached to it certified copies of the resolutions of the Director of the Office of Thrift Supervision or of the FDIC appointing and authorizing the special representative and authorizing the transfer. In that event, regardless of whether the date of closing predates this statute, it shall not be necessary for the memorandum to describe the transferred property with specificity, nor shall it be necessary for any of the transferred property to be separately conveyed to the transferee association, federal association or bank by an additional instrument. Thereafter, when the transferee association, federal association or bank conveys, assigns, or releases any of the transferred property, such conveyances, assignments, and releases shall recite that the transferee association, federal association or bank is successor in title to the closed association as evidenced by the memorandum of transfer or the memorandum of assignment and shall further recite the date and county of filing and the book and page of recording the memorandum.
E. If the FDIC accepts the appointment as liquidator, it shall have and possess all the powers and privileges provided by the laws of this state with respect to the liquidation of an insured association and with respect to the depositors and other creditors of such an association and shall proceed in liquidation as if it were the Commissioner, and shall have the right and power, upon the order of a court of record of competent jurisdiction, to enforce the individual liability of the directors of any such association.
F. To the extent that any action is required or permitted to be taken by the FDIC or the Director of the Office of Thrift Supervision pursuant to the terms of this section, any similar action taken by the Federal Savings and Loan Insurance Corporation or the Federal Home Loan Bank Board as predecessor federal agencies, either prior to or subsequent to the effective date of this section, shall be equally legal and effective as if such action were taken by the FDIC or the Director of the Office of Thrift Supervision pursuant to the authorization granted herein.
Added by Laws 1987, c. 61, § 24, emerg. eff. May 4, 1987. Amended by Laws 1989, c. 292, § 2, operative July 1, 1989; Laws 1990, c. 118, § 25, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 70, eff. July 1, 1993; Laws 2000, c. 81, § 78, eff. Nov. 1, 2000.
§18381.78. Removal of officer, director or employee by Commissioner.
Any officer, director or employee of an association found by the State Banking Commissioner to be dishonest, reckless, unfit to participate in the conduct of the affairs of the association, or to have engaged or participated in any unsafe or unsound practice in connection with an association, or to be practicing a continuing disregard or violation of laws, rules, regulations or orders which are likely to cause substantial loss to the association or likely to seriously weaken the condition of the association shall be removed immediately from office by the board of directors of the association of which such person is an officer, director or employee on the written order of the Commissioner. The association or officer, employee or director thereof, within ten (10) days of the date of the written order directing removal, may appeal such removal pursuant to the provisions of Section 207 of Title 6 of the Oklahoma Statutes. As soon as possible thereafter the Supreme Court shall review the order of the Commissioner and make such findings as it deems proper. During the pendency of the review of the protest against removal, the officer, employee or director shall not perform any of the duties of such office.
Added by Laws 1987, c. 61, § 25, emerg. eff. May 4, 1987. Amended by Laws 1993, c. 183, § 71, eff. July 1, 1993; Laws 2000, c. 81, § 79, eff. Nov. 1, 2000.
§18-381.79. Appeal of orders.
Any final order of the Commissioner issued under this act or rules promulgated under this act shall be appealable pursuant to the provisions and requirements of Section 207 of Title 6 of the Oklahoma Statutes.
Added by Laws 2000, c. 81, § 80, eff. Nov. 1, 2000.
§18-381.80. Criminal offenses - Penalties.
A. Any person responsible for an act or omission or a criminal offense expressly declared to be unlawful by this act or rules promulgated under this act shall be guilty:
1. Of a misdemeanor punishable by imprisonment for a term not exceeding one (1) year or a fine not exceeding Fifty Thousand Dollars ($50,000.00), or both; and
2. If the act or omission was intended to defraud, of a felony punishable by imprisonment not exceeding five (5) years or a fine not exceeding One Hundred Thousand Dollars ($100,000.00), or both.
B. An officer, director, employee, agent or attorney of an association shall be responsible for an act or omission of the institution declared to be a criminal offense against this act whenever, knowing that such act or omission is unlawful, such person participates in authorizing, executing, ratifying or concealing such act, or in authorizing or ratifying such omission or, having a duty to take the required action, omits to do so. A director shall be deemed to participate in any action, of which the director has or should have had knowledge, taken or omitted to be taken by the board of which the director is a member unless the director dissents therefrom in writing and promptly notifies the Commissioner of such dissent.
C. It shall be a criminal offense against this act to violate any lawful order of the Commissioner. The Commissioner may refer evidence concerning violations of this act or of any rule or order hereunder to the Attorney General of the State of Oklahoma or to the district attorney for the county where a violation occurred in order that an information or indictment for such violations may be filed. The Attorney General or district attorney may designate and appoint a lawyer of the Oklahoma State Banking Department as special assistant, if available, for the purpose of assisting in or conducting criminal prosecutions arising because of the proceedings provided for in this section.
D. Unless otherwise provided in this act, it shall be no defense to a criminal prosecution under this act that the defendant did not know the facts establishing the criminal character of the act or omission charged if the defendant could and should have known such facts in the proper performance of such duty.
E. This section shall not apply to specific offenses for which criminal sanctions have been imposed in other sections of this act.
Added by Laws 2000, c. 81, § 81, eff. Nov. 1, 2000.
§18-381.81. Payment or reimbursement by association for fine, penalty or judgment upon another person.
It shall be unlawful for an association to pay a fine or penalty imposed by law upon any other person or any judgment against such person or to reimburse directly or indirectly any person by whom such fine, penalty or judgment has been paid, except as otherwise provided in Section 1411 of Title 6 of the Oklahoma Statutes.
Added by Laws 2000, c. 81, § 82, eff. Nov. 1, 2000.
§18-381.82. Receipt of deposit after notification of insolvency.
It shall be unlawful for an association to receive any deposit after it has been notified by its primary regulator that it is insolvent or for an officer, director or employee who knows or, in the proper performance of such duty should know of the notification of such insolvency, to receive or authorize the receipt of such deposit, if such deposit, when aggregated together with other funds held by the depositor in the same right and capacity, would exceed the limit of any federal deposit insurance coverage.
Added by Laws 2000, c. 81, § 83, eff. Nov. 1, 2000.
§18-381.83. Certain persons prohibited from serving as officer or director.
It shall be unlawful for any person to serve as an officer or director of an association who:
1. Has been convicted of an offense constituting, in the jurisdiction in which the conviction was rendered, a violation of the banking, savings institution or credit union laws or other felony involving dishonesty or a breach of trust; and
2. Is indebted to the bank for more than thirty (30) days based on a judgment that has become final.
Added by Laws 2000, c. 81, § 84, eff. Nov. 1, 2000.
§18-381.84. Criminal embezzlement, abstraction, or misapplication of association funds.
It shall be a criminal offense for any officer, director, shareholder or employee of any association to directly or indirectly embezzle, abstract, or misapply, or cause to be embezzled, abstracted or misapplied any of the funds or securities or other property of or under the control of the association with intent to deceive, injure, cheat, wrong, or defraud any person or entity.
Added by Laws 2000, c. 81, § 85, eff. Nov. 1, 2000.
§18-381.85. Publishing, uttering, or circulating false statement or representation.
It shall be unlawful for any person to publish, utter, or circulate any false, malicious, or unprivileged statement or representation for the purpose of injuring any association chartered, existing and doing business within the State of Oklahoma, under and by virtue of the laws of this state, or under and by virtue of the laws of the United States of America.
Added by Laws 2000, c. 81, § 86, eff. Nov. 1, 2000.
§18-381.86. Injunctions - Enforcement of orders.
A. Whenever a violation of this act by an association or any officer, director or employee thereof is threatened or impending and will cause substantial injury to the institution or to the depositors, creditors, or stockholders thereof, the district court of the county in which the association is located shall, upon the suit of the State Banking Commissioner, issue an injunction restraining such violation.
B. Whenever any corporation, not authorized to carry on association business under this act, shall falsely act as an association, or shall use an artificial or corporate name implying it is a trust company, the district court of the county in which lawful service is obtained shall, upon suit of the Commissioner, issue an injunction restraining such act.
C. All orders of the Commissioner shall be enforced by the district court of the district of domicile of the person or persons to whom the order is directed.
Added by Laws 2000, c. 81, § 87, eff. Nov. 1, 2000.
§18411. Reports Misapplication of funds solicited.
Thirty (30) days after the passage and approval of this bill, all chambers of commerce, commercial clubs, or any such associations organized and doing business in this state as is commonly done by such associations shall make a report to their entire membership, setting forth and itemizing their receipts and disbursements for the year ending at the date of the passage and approval of this bill, and shall thereafter make a like report each year ending June 30th.
Every committee or individual who solicits or receives any funds from the public for such associations herein named shall make a full itemized report of all receipts and disbursements thereof. The report shall be filed with the city clerk where the committee or person soliciting such fund resides, or where the funds were collected; provided, that any person or committee who diverts the funds so collected from the purposes for which they were solicited or collected shall be guilty of a felony and on conviction therefor shall be punished by confinement in the State Penitentiary for a term of not less than one (1) year nor more than five (5) years.
Added by Laws 1919, c. 260, p. 370, § 1. Amended by Laws 1997, c. 133, § 140, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 66, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 140 from July 1, 1998, to July 1, 1999.
§18421. Corporations authorized Formation Purposes.
Ten or more persons may form a corporation for the purpose of conducting an agricultural, dairy, livestock, irrigation, horticultural, mercantile, mining, manufacturing, mechanical, or industrial business upon a cooperative plan, and with their associates, successors and assigns may become and be a body politic and corporate by complying with the provisions of this act.
Laws 1919, c. 147, p. 211, § 1; Laws 1923, c. 167, p. 269, § 1.
§18422. Articles of incorporation.
The incorporators shall sign and acknowledge, in the manner required for the signing and acknowledgment of deeds, a certificate of incorporation showing the following facts:
(1) The corporate name.
(2) The purpose of corporation.
(3) The amount of capital stock.
(4) The number of shares, and the par value of the shares into which the capital stock is divided.
(5) The term of the corporate existence.
(6) The number of directors, not less than five and the names and addresses of the incorporating directors who shall manage the concerns of the corporation for the first corporate year.
(7) The name of the town or post office and the county where the principal office or place of business of the corporation shall be located.
(8) Any further provision, not inconsistent with law, which the incorporators may deem expedient to be embodied in such certificate. Laws 1919, c. 147, p. 211, § 2.
§18423. Filing of articles Certificate Election by existing corporations.
The articles of incorporation shall be filed with the Secretary of State whereupon he shall issue to the corporation over the Great Seal of the State of Oklahoma, a certificate that the articles containing the required statement of facts have been filed in his office, and thereupon the persons signing the articles and their associates, successors and assigns shall be a body politic and corporate by the name and for the purposes stated in said article. Provided, that any corporation doing business as mentioned in Section One, now operating in the State of Oklahoma, may, at regular or special meeting of the shareholders called for such purpose, by a majority vote elect to operate under the provisions of this act, after the action taken at such meeting shall be properly certified by the secretary of such corporation to the Secretary of State.
Laws 1919, c. 147, p. 212, § 3.
§18424. Amendment of articles.
The articles of incorporation may be amended at any time, or from time to time, by the affirmative vote of twothirds of the members present at any annual meeting of the stockholders, if notice of the proposed amendment shall have been given in the call for such meeting. Such amendments shall be put into effect by the directors, who shall sign and acknowledge and file, as above provided, new or revised articles containing such amendments and superseding the original articles.
Laws 1919, c. 147, p. 212, § 4.
§18425. Powers.
Each corporation formed under the provisions of this act shall have power:
(1) To have succession by its corporate name for the period limited in its certificate.
(2) To sue and be sued, complain and defend in any court.
(3) To establish and use a common seal and alter the same.
(4) To hold, purchase and convey such real and personal property as the purpose of the corporation may require, including stock in subsidiary or allied cooperative corporations within or without the state.
(5) To appoint such officers and agents as the business may require, including in every case a president and secretary, and to fix their compensation.
(6) To make bylaws not inconsistent with law for the management of its property, the regulation of its business and the transfer of its stock.
(7) To exercise all other lawful powers necessary or proper for the exercise of the powers herein conferred.
Laws 1919, c. 147, p. 212, § 5.
§18426. Stock.
The stock of such corporation shall not be sold at less than its par value. Twenty percent (20%) of the par value of the stock subscribed for shall be paid in before the corporation shall commence business, and the remainder of such subscriptions shall be paid from time to time upon call of the directors. No certificate of stock shall be issued to any person until the full amount of the subscription therefor shall have been paid. No person shall become a shareholder except by consent of the board of directors. Not more than ten percent (10%) of the stock outstanding at any time, and not more than Three Thousand Dollars ($3,000.00) in par value, shall be held by or for one person, firm or corporation.
Laws 1919, c. 147, p. 212, § 6; Laws 1969, c. 226, § 1.
§18427. Voting rights.
Each shareholder or subscriber shall be entitled to one vote, and no more, irrespective of the number of shares owned, at any meeting of the stockholders. Voting by proxies or absentee voting may be permitted and regulated by the bylaws. In the absence of such provision in the bylaws, no voting by proxies or absentees shall be allowed.
Laws 1919, c. 147, p. 213, § 7.
§18428. Liability of subscribers and shareholders.
All subscribers or shareholders shall be severally and individually liable to the creditors of the corporation, to the amount of the unpaid capital stock subscribed for, or held by them, respectively and to no other or further amount.
Laws 1919, c. 147, p. 213, § 8; Laws 1923, c. 167, p. 269, § 2.
§18429. Directors Selection and term Quorum.
The stock, property and affairs, of such corporation shall be managed by the board of directors, which shall consist of five (5) members, all of whom must be stockholders, and who shall be elected at the annual meeting of the stockholders. At the first meeting of the stockholders, there shall be elected five directors, one of whom shall serve one (1) year, two of whom shall serve two (2) years, and the remaining two of whom shall serve three (3) years. As the term of office of each of these directors expires a successor shall be elected, who shall serve for three (3) years, unless sooner removed, or until his successor is elected and qualified.
Notice of the time and place of holding such election shall be published not less than two (2) weeks previous thereto in the newspaper printed nearest to the place where the principal office or place of business of the corporation is located. A quorum shall consist of at least ten percent (10%) in number of all the stockholders or subscribers for stock who are entitled to vote.
Laws 1919, c. 147, p. 213, § 9; Laws 1923, c. 167, p. 270, § 3; Laws 1941, p. 58, § 1.
§18430. Removal of director or officer Vacancies.
Any director or officer of such corporation may be removed by a majority vote of the stockholders at any regular or special stockholders' meeting lawfully called, and the vacancy may be filled at such meeting or by the remaining directors at any regular or special meeting thereafter.
Laws 1919, c. 147, p. 213, § 10.
§18431. Liability of directors.
If the indebtedness of such corporation shall at any time exceed the amount of its subscribed capital stock and surplus the directors assenting thereto shall be personally and individually liable for such excess to the creditors. Except any indebtedness created in favor of the State warehouse revolving fund.
Laws 1919, c. 147, p. 231, § 11; Laws 1923, c. 167, p. 270, § 4.
§18432. Dividends and profits Reserve fund.
The directors, subject to revision by the stockholders, at any general or special meeting lawfully called, shall apportion the net earnings and profits thereof from time to time at least once in each year in the following manner:
(1) Not less than ten percent (10%) thereof accruing since the last apportionment shall be set aside in a surplus or reserve fund until such fund shall equal at least fifty percent (50%) of the paid up capital stock.
(2) Dividends at a rate not to exceed eight percent (8%) per annum, may, in the discretion of the directors, be declared upon the paid up capital stock. Five percent (5%) may be set aside for educational purposes.
(3) The remainder of such net earnings and profits shall be apportioned and paid to its members ratably upon the amounts of the products sold to the corporation by its members, and the amounts of the purchases of members from the corporation: provided, that if the bylaws of the corporation shall so provide the directors may apportion such earnings and profits in part to nonmembers upon the amounts of their purchases and sales from or to the corporation.
Laws 1919, c. 147, p. 213, § 12.
§18433. Illegal dividends Liability of directors.
If the directors of such corporation shall declare and pay any dividend or apportionment of earnings, or profits to members or nonmembers when the corporation is insolvent or when it would be rendered insolvent by such payment, such directors shall be jointly and severally liable for all debts of the corporation then existing and for all such debts as shall be thereafter incurred while they shall respectively continue in office. Any director may relieve himself from such liability at any time before the time fixed for the payment of such dividend or apportionment by filing a certificate in writing of his objection with the secretary of the corporation, and with the county clerk of the county in which the principal office is located.
Laws 1919, c. 147, p. 214, § 13.
§18434. Financial statements.
At the time of each dividend or apportionment of profits and at least once in every year, the directors shall cause to be prepared a statement showing the financial condition of the corporation at the end of the period to which such dividend or apportionment relates, in such form as shall fully exhibit the assets and liabilities of the corporation; its earnings and profits, purchases and sales, expenses and outlays, for the period covered by such dividend or apportionment, in such manner that a good understanding of the condition of the company, may be obtained from such statement, and shall cause such statement to be kept on file with the secretary where the same may be examined by any member of the corporation at all reasonable times.
Laws 1919, c. 147, p. 214, § 14.
§18435. Use of word "cooperative".
No person, firm or association, nor any corporation other than such as shall be organized under this act, shall make use of the word "Cooperative", in the name under which its or their business is carried on. Whoever shall violate the provisions of this act shall be punishable by fine of not exceeding One Hundred Dollars ($100.00) for each offense. The violation of this section may furthermore be enjoined at the suit of any citizen of the state.
Laws 1919, c. 147, p. 214, § 15.
§18436. Forfeiture of charter.
Any corporation organized under this act, which fails to comply with all the provisions of this act, shall thereby forfeit its charter, and the Secretary of State is hereby authorized and directed to recall the charter of any such corporation.
Laws 1919, c. 147, p. 214, § 16.
§18437. Short title.
This act may be cited as the "Rural Electric Cooperative Act".
Laws 1939, p. 256, § 1.
§18437.1. Rural electric cooperatives authorized.
Cooperative, nonprofit, membership corporations may be organized under this act for the purpose of supplying electric energy and promoting and extending the use thereof in rural areas. Corporations organized under this act and corporations which become subject to this act in the manner hereinafter provided are hereinafter referred to as "cooperatives".
Laws 1939, p. 256, § 2.
§18-437.2. Powers.
A cooperative shall have power:
(a) To sue and be sued, in its corporate name;
(b) To have a perpetual existence unless a limited period of duration is stated in its charter;
(c) To adopt a corporate seal and alter the same at pleasure;
(d) To generate, manufacture, purchase, acquire, accumulate and transmit electric energy, and to distribute, sell, supply and dispose of electric energy in rural areas to its members, to governmental agencies and political subdivisions, and to other persons not in excess of ten percent (10%) of the number of its members;
(e) To make loans to persons to whom electric energy is or will be supplied by the cooperative for the purpose of, and otherwise to assist such persons in wiring their premises and installing therein electric and plumbing fixtures, appliances, apparatus and equipment of any and all kinds of character, and to accept and otherwise acquire, and to sell, assign, transfer, endorse, pledge, hypothecate and otherwise dispose of notes, bonds, and other evidences of indebtedness and any and all types of security therefor;
(f) To make loans to persons to whom electric energy is or will be supplied by the cooperative for the purpose of, and otherwise to assist such persons in constructing, maintaining and operating electric refrigeration plants;
(g) To become a member in one or more other cooperatives or corporations or to own stock therein;
(h) To construct, purchase, take, receive, lease as lessee, or otherwise acquire, and to own, hold, use, equip, maintain, and operate and to sell, assign, transfer, convey, exchange, lease as lessor, mortgage, pledge, or otherwise dispose of or encumber, electric transmission and distribution lines or systems, electric generating plants, electric refrigeration plants, lands, buildings, structures, dams, plants, and equipment, and any and all kinds and classes of real or personal property whatsoever, which shall be deemed necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized; provided, that any and all such electrical construction and maintenance shall conform to the requirements and regulations of the National Electrical Safety Code;
(i) To purchase or otherwise acquire, and to own, hold, use and exercise and to sell, assign, transfer, convey, mortgage, pledge, hypothecate, or otherwise dispose of or encumber, franchises, rights, privileges, licenses, rightsofway and easements;
(j) To borrow money and otherwise contract indebtedness therefor and to secure the payment thereof by mortgage, pledge, deed or trust, or any other encumbrance upon any or all of its then owned or after acquired real or personal property, assets, franchises, revenues or income;
(k) To construct, maintain and operate electric transmission and distribution lines along, upon, under and across all public thoroughfares, including without limitation, all roads, highways, streets, alleys and bridges, and upon, under and across all publicly owned lands, subject, however, to the requirements in respect of the use of such thoroughfares and lands that are imposed by the respective authorities having jurisdiction thereof upon corporations, constructing or operating electric transmission and distribution lines or systems; provided that in case an area has been or shall be included, as a result of incorporation, annexation, population growth, or otherwise, within the boundaries of a city, town or village, a cooperative which was furnishing electric energy, or was constructing or operating electric facilities, in such area, prior to such inclusion, shall be entitled to construct, maintain and operate electric transmission and distribution lines and related facilities along, upon, under and across all existing and future public thoroughfares, and to continue and extend the furnishing of electric energy or the construction and operation of electric facilities in such area without obtaining the consent, franchise, license, permit or other authority of such city, town or village, subject, however, to compliance with the lawful safety requirements of such city, town or village as to the manner of constructing and maintaining facilities on such thoroughfares, and subject to payment of taxes of such city, town or village that may be levied and assessed as provided in Section 1201 of Title 68 of the Oklahoma Statutes; and provided further that if such city, town or village in which an area has been or shall be included, as aforesaid, owns and operates a system for the furnishing of electric energy to its inhabitants, the cooperative furnishing electric energy in such area shall transfer to such city, town or village, upon its request, the cooperative's electric distribution facilities used in furnishing electric energy in said area, other than facilities used in furnishing electric energy for resale or to premises of the cooperative, subject, however, to the following requirement: The city, town or village shall pay to the cooperative an amount to compensate the cooperative for the fair value of the cooperative's facilities to be acquired by the city, town or village. If such cooperative and city, town or village cannot agree upon the amount to be paid to the cooperative, the city, town or village is authorized to file a proceeding in the district court of the county in which such city, town or village, or any part thereof, is located, for the acquisition of the cooperative's electric distribution facilities used in furnishing electric energy in said area, other than facilities used in furnishing electric energy for resale or to premises of the cooperative, and the procedure followed and the method of ascertaining just compensation to be paid the cooperative will be as provided in Article 2, Section 24, of the Oklahoma Constitution and Sections 53 to 58, inclusive, of Title 66 of the Oklahoma Statutes.
(l) To conduct its business and exercise any or all of its powers within or without this state;
(m) To adopt, amend and repeal bylaws; and
(n) To do and perform any and other acts and things, and to have and exercise any and all other powers which may be necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized;
(o) To have and exercise the right of eminent domain in the same manner and by like proceedings as provided for railroad corporations under the laws of this state.
(p) To participate with, jointly own or operate or enter into loans with any person, firm, corporation, limited liability company or any other kind of business entity including, but not limited to, privately owned electric utilities for the construction, operation or maintenance of electric generation, transmission or distribution facilities.
Added by Laws 1939, p. 256, § 3, emerg. eff. April 14, 1939. Amended by Laws 1939, p. 271, § 1, emerg. eff. May 12, 1939; Laws 1949, p. 128, § 1, emerg. eff. March 25, 1949; Laws 1961, p. 200, § 1; Laws 1988, c. 323, § 1, eff. Nov. 1, 1988; Laws 2002, c. 32, § 1, emerg. eff. April 10, 2002.
§18437.3. Name.
The name of each cooperative shall include the words "electric" and "cooperative", provided, however, such limitation shall not apply if, in an affidavit made by the president or vice president of a cooperative and filed with the Secretary of State, it shall appear that the cooperative desires to transact business in another state and is precluded therefrom by reason of its name. The name of a cooperative shall distinguish it from the name of any other corporation organized under the laws of, or authorized to transact business in, this state. The words "electric" and "cooperative" shall not both be used in the name of any corporation organized under the laws of, or authorized to transact business in, this state, except a cooperative or a corporation transacting business in this state pursuant to the provisions of this act.
Laws 1939, p. 258, § 4.
§18437.4. Incorporators.
Five or more natural persons, or two or more cooperatives, may organize a cooperative in the manner hereinafter provided.
Laws 1939, p. 258, § 5.
§18437.5. Articles of incorporation.
(a) The articles of incorporation of a cooperative shall recite in the caption that they are executed pursuant to this act, shall be signed and acknowledged by each of the incorporators, and shall state: (1) The name of the cooperative; (2) The address of its principal office; (3) The names and addresses of the incorporators; (4) The names and addresses of the persons who shall constitute its first board of trustees; and (5) Any provisions not inconsistent with this act deemed necessary or advisable for the conduct of its business and affairs.
(b) Such articles of incorporation shall be submitted to the Secretary of State for filing as provided in this act.
(c) It shall not be necessary to set forth in the articles of incorporation of a cooperative the purpose for which it is organized or any of the corporate powers vested in a cooperative under this act.
Laws 1939, p. 258, § 6.
§18437.6. Bylaws.
The original bylaws of a cooperative shall be adopted by its board of trustees. Thereafter bylaws shall be adopted, amended or repealed by its members. The bylaws shall set forth the rights and duties of members and trustees and may contain other provisions for the regulation and management of the affairs of the cooperative not inconsistent with this act or with its articles of incorporation.
Laws 1939, p. 259, § 7.
§18437.7. Members.
(a) No person who is not an incorporator shall become a member of a cooperative unless such person shall agree to use electric energy furnished by the cooperative when such electric energy shall be available through its facilities. The bylaws of a cooperative may provide that any person, including a corporation, shall cease to be a member thereof if he shall fail or refuse to use electric energy made available by the cooperative or if electric energy shall not be made available to such person by the cooperative within a specified time after such person shall have become a member thereof. Membership in the cooperative shall not be transferable, except as provided in the bylaws. The bylaws may prescribe additional qualifications and limitations in respect to membership.
(b) An annual meeting of the members shall be held at such time as shall be provided in the bylaws.
(c) Special meetings of the members may be called by the board of trustees, by any three trustees, by not less than ten percent (10%) of the members, or by the president.
(d) Meetings of members shall be held at such place as may be provided in the bylaws. In the absence of any such provision, all meetings shall be held in the city or town in which the principal office of the cooperative is located.
(e) Except as hereinafter otherwise provided, written or printed notice stating the time and place of each meeting of members and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each member, either personally or by mail, not less than ten (10) nor more than twentyfive (25) days before the date of the meeting.
(f) Five percent (5%) of all members, present in person, shall constitute a quorum for the transaction of business at all meetings of the members, unless the bylaws prescribe the presence of a greater percentage of the members for a quorum. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice.
(g) Each member shall be entitled to one vote on each matter submitted to a vote at a meeting. Voting shall be in person, but, if the bylaws so provide, may also be by proxy or by mail, or both. If the bylaws provide for voting by proxy or by mail, they shall also prescribe the conditions under which proxy or mail voting shall be exercised. In any event, no person shall vote a proxy for more than three members at any meeting of the members.
Laws 1939, p. 259, § 8.
§18437.8. Board of trustees.
(a) The business and affairs of a cooperative shall be managed by a board of not less than five (5) trustees, each of whom shall be a member of the cooperative or of another cooperative which shall be a member thereof. The bylaws shall prescribe the number of trustees, their qualifications, other than those provided for in this act, the manner of holding meetings of the board of trustees and of the election of successors to trustees who shall resign, die, or otherwise be incapable of acting. The bylaws may also provide for the removal of trustees from office and for the election of their successors. Without approval of the members, trustees shall not receive any salaries for their services as trustees. The bylaws may, however, provide that a fixed fee and expenses of attendance, if any, may be allowed to each trustee for attendance at each meeting of the board of trustees and such other meetings, seminars, workshops, conferences or for other business purposes authorized by the board of trustees.
(b) The trustees of a cooperative named in any articles of incorporation, consolidation, merger or conversion, as the case may be, shall hold office until the next following annual meeting of the members or until their successors shall have been elected and qualified. At each annual meeting or, in case of failure to hold the annual meeting as specified in the bylaws, at a special meeting called for that purpose, the members shall elect trustees to hold office until the next following annual meeting of the members, except as hereinafter otherwise provided. Each trustee shall hold office for the term for which he is elected or until his successor shall have been elected and qualified.
(c) The officers of a cooperative shall consist of a president, secretary and treasurer, who shall be elected annually by and from the board of trustees. No person shall continue to hold any of the above offices after he shall have ceased to be a trustee. The offices of secretary and/or treasurer may be held by the same person. The board of trustees may also elect or appoint a chief executive or operating officer or such other officers, agents, or employees, whether or not such persons are trustees of the cooperative, as it shall deem necessary or advisable and shall prescribe the powers and duties thereof. Any officer may be removed from office and his successor elected in the manner prescribed in the bylaws. Vacancies in office may be filled by the board of trustees.
(d) The bylaws may provide that, in lieu of electing the whole number of trustees annually, the trustees shall be divided into three classes at the first or any subsequent annual meeting, each class to be as nearly equal in number as possible, with the term of office of the trustees of the first class to expire at the next succeeding annual meeting and the term of the second class to expire at the second succeeding annual meeting, and the term of the third class to expire at the third succeeding annual meeting. At each annual meeting after such classification a number of trustees equal to the number of the class whose term expires at the time of such meeting shall be elected to hold office until the third succeeding annual meeting.
(e) A majority of the board of trustees shall constitute a quorum.
(f) If a husband and wife hold a joint membership in a cooperative, either one, but not both, may be elected a trustee.
(g) The board of trustees may exercise all of the powers of a cooperative except such as are conferred upon the members by this act, or its articles of incorporation or bylaws.
Laws 1939, p. 260, § 9; Laws 1955, p. 151, § 1. Amended by Laws 1990, c. 202, § 1, emerg. eff. May 10, 1990.
§18437.9. Voting districts.
Notwithstanding any other provision of this act, the bylaws may provide that the territory in which a cooperative supplies electric energy to its members shall be divided into two or more voting districts and that, in respect of each such voting district, (1) a designated number of trustees shall be elected by the members residing therein, or (2) a designated number of delegates shall be elected by such members, or (3) both such trustees and delegates shall be elected by such members. In any such case the bylaws shall prescribe the manner in which such voting districts and the members thereof, and the delegates and trustees, if any, elected therefrom shall function and the powers of the delegates, which may include the power to elect trustees. No member at any voting district meeting and no delegate at any meeting shall vote by proxy or by mail.
Laws 1939, p. 261, § 10.
§18437.10. Officers.
The officers of a cooperative shall consist of a president, vice president, secretary and treasurer, who shall be elected annually by and from the board of trustees. No person shall continue to hold any of the above offices after he shall have ceased to be a trustee. The offices of secretary and of treasurer may be held by the same person. The board of trustees may also elect or appoint such other officers, agents, or employees as it shall deem necessary or advisable and shall prescribe the powers and duties thereof. Any officer may be removed from office and his successor elected in the manner prescribed in the bylaws. Vacancies in office may be filed by the board of trustees.
Laws 1953, p. 486, § 10.
§18437.11. Amendment of articles of incorporation Change of location without amending articles.
(a) A cooperative may amend its articles of incorporation by complying with the following requirements:
(1) The proposed amendment shall be first approved by the board of trustees and shall then be submitted to a vote of the members at any annual or special meeting thereof, the notice of which shall set forth the proposed amendment. The proposed amendment, with such changes as the members shall choose to make therein, shall be deemed to be approved on the affirmative vote of not less than twothirds of those members voting thereon at such meeting; and
(2) Upon such approval by the members, articles of amendment shall be executed and acknowledged on behalf of the cooperative by its president or vice president and its corporate seal shall be affixed thereto and attested by its secretary. The articles of amendment shall recite in the caption that they are executed pursuant to this act and shall state: (a) the name of the cooperative; (b) the address of its principal office; (c) the date of the filing of its articles of incorporation in the office of the Secretary of State; and (d) the amendment to its articles of incorporation. The president or vice president executing such articles of amendment shall also make and annex thereto an affidavit stating that the provisions of this section were duly complied with. Such articles of amendment and affidavit shall be submitted to the Secretary of State for filing as provided in this act.
(b) A cooperative may, without amending its articles of incorporation, upon authorization of its board of trustees, change the location of its principal office by filing a certificate of change of principal office, executed and acknowledged by its president or vice president under its seal attested by its secretary, in the office of the Secretary of State and also in each county office in which its articles of incorporation or any prior certificate of change of principal office of such cooperative has been filed. Such cooperative shall also, within thirty (30) days after the filing of such certificate of change of principal office in any county office, file therein certified copies of its articles of incorporation and all amendments thereto, if the same are not already on file therein.
Laws 1939, p. 261, § 12.
§18437.12. Consolidation.
Any two or more cooperatives, each of which is hereinafter designated a "consolidating cooperative", may consolidate into a new cooperative, hereinafter designated the "new cooperative", by complying with the following requirements:
(a) The proposition for the consolidation of the consolidating cooperatives into the new cooperative and proposed articles of consolidation to give effect thereto shall be first approved by the board of trustees of each consolidating cooperative. The proposed articles of consolidation shall recite in the caption that they are executed pursuant to this act and shall state: (1) The name of each consolidating cooperative, the address of its principal office, and the date of the filing of its articles of incorporation in the office of the Secretary of State; (2) the name of the new cooperative and the address of its principal office; (3) the names and addresses of the persons who shall constitute the first board of trustees of the new cooperative; (4) the terms and conditions of the consolidation and the mode of carrying the same into effect, including the manner and basis of converting memberships in each consolidating cooperative into memberships in the new cooperative and the issuance of certificates of membership in respect of such converted memberships; and (5) any provisions not inconsistent with this act deemed necessary or advisable for the conduct of the business and affairs of the new cooperative;
(b) The proposition for the consolidation of the consolidating cooperatives into the new cooperative and the proposed articles of consolidation approved by the board of trustees of each consolidating cooperative shall then be submitted to a vote of the members thereof at any annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed consolidation. The proposed consolidation and the proposed articles of consolidation shall be deemed to be approved upon the affirmative vote of not less than twothirds of those members of each consolidating cooperative voting thereon at such meeting; and
(c) Upon such approval by the members of the respective consolidation cooperatives, articles of consolidation in the form approved shall be executed and acknowledged on behalf of each consolidating cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The president or vice president of each consolidating cooperative executing such articles of consolidation shall also make and annex thereto an affidavit stating that the provisions of this section were duly complied with by such cooperative. Such articles of consolidation and affidavits shall be submitted to the Secretary of State for filing as provided in this act.
Laws 1939, p. 262, § 13.
§18437.13. Merger.
Any one or more cooperatives, each of which is hereinafter designated a "merging cooperative", may merge into another cooperative, hereinafter designated the "surviving cooperative", by complying with the following requirements:
(a) The proposition for the merger of the merging cooperatives into the surviving cooperative and proposed articles of merger to give effect thereto shall be first approved by the board of trustees of each merging cooperative and by the board of trustees of the surviving cooperative. The proposed articles of merger shall recite in the caption that they are executed pursuant to this act and shall state: (1) the name of each merging cooperative, the address of its principal office, and the date of the filing of its articles of incorporation in the office of the Secretary of State; (2) the name of the surviving cooperative and the address of its principal office; (3) a statement that the merging cooperatives elect to be merged into the surviving cooperative; (4) the terms and conditions of the merger and the mode of carrying the same into effect, including the manner and basis of converting the memberships in the merging cooperative or cooperatives into memberships in the surviving cooperative and the issuance of certificates of membership in respect of such converted memberships; and (6) any provisions not inconsistent with this act deemed necessary or advisable for the conduct of the business and affairs of the surviving cooperative;
(b) The proposition for the merger of the merging cooperatives into the surviving cooperative and the proposed articles of merger approved by the board of trustees of the respective cooperatives, parties to the proposed merger, shall then be submitted to a vote of the members of each such cooperative at any annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed merger. The proposed merger and the proposed articles of merger shall be deemed to be approved upon the affirmative vote of not less than twothirds of those members of each cooperative voting thereon at such meeting; and
(c) Upon such approval by the members of the respective cooperatives, parties to the proposed merger, articles of merger in form approved shall be executed and acknowledged on behalf of each such cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The president or vice president of each cooperative executing such articles of merger shall also make and annex thereto an affidavit stating that the provisions of this section were duly complied with by such cooperative. Such articles of merger and affidavits shall be submitted to the Secretary of State for filing as provided in this act.
Laws 1939, p. 263, § 14.
§18437.14. Effect of consolidation or merger.
The effect of consolidation or merger shall be as follows:
(a) The several cooperatives, parties to the consolidation or merger, shall be a single cooperative, which, in the case of a consolidation, shall be the new cooperative provided for in the articles of consolidation, and, in the case of a merger, shall be that cooperative designated in the articles of merger as the surviving cooperative, and the separate existence of all cooperatives, parties to the consolidation or merger, except the new or surviving cooperative, shall cease;
(b) Such new or surviving cooperative shall have all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a cooperative organized under the provisions of this act, and shall possess all the rights, privileges, immunities, and franchises, as well of a public as of a private nature, and all property, real and personal, applications for membership, all debts due on whatever account, and all other choses in action, of each of the consolidating or merging cooperatives, and furthermore all and every interest of, or belonging or due to, each of the cooperatives so consolidated or merged, shall be taken and deemed to be transferred to and vested in such new or surviving cooperative without further act or deed; and the title to any real estate, or any interest therein, under the laws of this state vested in any such cooperatives shall not revert or be in any way impaired by reason of such consolidation or merger; (c) Such new or surviving cooperative shall thenceforth be responsible and liable for all of the liabilities and obligations of each of the cooperatives so consolidated or merged, and any claim existing, or action or proceeding pending, by or against any of such cooperatives may be prosecuted as if such consolidation or merger had not taken place, but such new or surviving cooperative may be substituted in its place;
(d) Neither the rights of creditors nor any liens upon the property of any of such cooperatives shall be impaired by such consolidation or merger; and
(e) In the case of a consolidation, the articles of consolidation shall be deemed to be the articles of incorporation of the new cooperative; and in the case of a merger, the articles of incorporation of the surviving cooperative shall be deemed to be amended to the extent, if any, that changes therein are provided for in the articles of merger.
Laws 1939, p. 264, § 15.
§18437.15. Conversion of existing corporations.
Any corporation organized under the laws of this state for the purpose, among others, of supplying electric energy in rural areas may be converted into a cooperative and become subject to this act with the same effect as if originally organized under this act by complying with the following requirements:
(a) The proposition for the conversion of such corporation into a cooperative and proposed articles of conversion to give effect thereto shall be first approved by the board of trustees or the board of directors, as the case may be, of such corporation. The proposed articles of conversion shall recite in the caption that they are executed pursuant to this act and shall state: (1) the name of the corporation prior to its conversion into a cooperative; (2) the address of the principal office of such corporation; (3) the date of the filing of the articles of incorporation of such corporation in the office of the Secretary of State; (4) the statute or statutes under which such corporation was organized; (5) the name assumed by such corporation; (6) a statement that such corporation elects to become a cooperative, nonprofit, membership corporation subject to this act; (7) the manner and basis of converting either memberships in or shares of stock of such corporation into memberships therein after completion of the conversion; and (8) any provisions not inconsistent with this Act deemed necessary or advisable for the conduct of the business and affairs of such corporation;
(b) The proposition for the conversion of such corporation into a cooperative and the proposed articles of conversion approved by the board of trustees or board of directors, as the case may be, of such corporation shall then be submitted to a vote of the members or stockholders, as the case may be, of such corporation at any duly held annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed conversion. The proposition for the conversion of such corporation into a cooperative and the proposed articles of conversion, with such amendments thereto as the members or stockholders of such corporation shall choose to make, shall be deemed to be approved upon the affirmative vote of not less than twothirds of those members of such corporation voting thereon at such meeting, or, if such corporation is a stock corporation, upon the affirmative vote of the holders of not less than twothirds of the capital stock of such corporation represented at such meeting;
(c) Upon such approval by the members or stockholders of such corporation, articles of conversion in the form approved by such members or stockholders shall be executed and acknowledged on behalf of such corporation by its president or vice president and its corporate seal shall be affixed thereto and attested by its secretary. The president or vice president executing such articles of conversion on behalf of such corporation shall also make and annex thereto an affidavit stating that the provisions of this section with respect to the approval of its trustees or directors and its members or stockholders, of the proposition for the conversion of such corporation into a cooperative and such articles of conversion were duly complied with. Such articles of conversion and affidavit shall be submitted to the Secretary of State for filing as provided in this act. The term "articles of incorporation" as used in this act shall be deemed to include the articles of conversion of a converted corporation.
Laws 1939, p. 265, § 16.
§18437.16. Initiative by members.
Not withstanding any other provision of this act, any proposition embodied in a petition signed by not less than ten percent (10%) of the members of a cooperative, together with any document submitted with such petition to give effect to the proposition, shall be submitted to the members of a cooperative, either at a special meeting of the members held within fortyfive (45) days after the presentation of such petition or, if the date of the next annual meeting of members falls within ninety (90) days after such presentation or if the petition so requests, at such annual meeting. The approval of the board of trustees shall not be required in respect of any proposition or document submitted to the members pursuant to this section and approved by them, but such proposition or document shall be subject to all other applicable provisions of this act. Any affidavit or affidavits required to be filed with any such document pursuant to applicable provisions of this act shall, in such case, be modified to show compliance with the provisions of this section.
Laws 1939, p. 266, § 17.
§18437.17. Dissolution.
A cooperative may dissolve in the manner provided by law for the dissolution of private corporations.
Laws 1939, p. 267, § 18.
§18437.18. Filing of articles Certificate of incorporation Filing.
Articles of incorporation, amendment, consolidation, merger or conversion, as the case may be, when executed and acknowledged and accompanied by such affidavits as may be required by applicable provisions of this act, shall be presented to the Secretary of State for filing in the records of his office. If the Secretary of State shall find that the articles presented conform to the requirements of this act, he shall, upon the payment of the fees as in this act provided, file the articles so presented in the records of his office and shall issue over the Great Seal of the state an appropriate certificate of incorporation, amendment, consolidation, merger or conversion, as the case may be, and thereupon the incorporation, amendment, consolidation, merger or conversion provided for therein shall be in effect.
Laws 1939, p. 267, § 19; Laws 1979, c. 259, § 3.
§18437.19. Refunds to members.
Revenues of a cooperative for any fiscal year in excess of the amount thereof necessary:
(a) To defray expenses of the cooperative and of the operation and maintenance of its facilities during such fiscal year;
(b) To pay interest and principal obligations of the cooperative coming due in such fiscal year;
(c) To finance, or to provide a reserve for the financing of, the construction or acquisition by the cooperative of additional facilities to the extent determined by the board of trustees;
(d) To provide a reasonable reserve for working capital;
(e) To provide a reserve for the payment of indebtedness of the cooperative maturing more than one (1) year after the date of the incurrence of such indebtedness in an amount not less than the total of the interest and principal payments in respect thereof required to be made during the next following fiscal year; and
(f) To provide a fund for education in cooperation and for the dissemination of information concerning the effective use of electric energy and other services made available by the cooperative, shall, unless otherwise determined by a vote of the members, be distributed by the cooperative to its members as patronage refunds prorated in accordance with the patronage of the cooperative by the respective members paid for during such fiscal year. Nothing herein contained shall be construed to prohibit the payment by a cooperative of all or any part of its indebtedness prior to the date when the same shall become due.
Laws 1939, p. 267, § 20.
§18-437.20. Disposition of property.
A cooperative may not sell, mortgage, lease or otherwise dispose of or encumber all or any substantial portion of its property unless such sale, mortgage, lease, or other disposition or encumbrance is authorized at a duly held meeting of the members thereof by the affirmative vote of not less than twothirds of all of the members of the cooperative, and unless the notice of such proposed sale, mortgage, lease, or other disposition or encumbrance shall have been contained in the notice of the meeting; provided, however, that notwithstanding anything herein contained, or any other provisions of law, the board of trustees of a cooperative, without authorization by the members thereof, shall have full power and authority upon an affirmative vote of not less than two-thirds (2/3) of the board of trustees to authorize the execution and delivery of a lease and leaseback transaction only where the board of trustees determines that such transaction will not impair the ability of the cooperative to use the assets as needed to serve the members; provided, however, that such transactions shall apply only to the physical assets of a cooperative and shall not be used to effect a sale or other disposition of the cooperative business entity itself; and further, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust upon, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the board of trustees shall determine, to secure any indebtedness of the cooperative to the United States of America or any instrumentality or agency thereof or to any corporation or financial institution authorized to assist in the credit and financial needs of rural electric cooperatives.
Added by Laws 1939, p. 268, § 21, emerg. eff. April 14, 1939. Amended by Laws 1969, c. 53, § 1; Laws 2002, c. 25, § 1, emerg. eff. April 5, 2002.
§18437.21. Nonliability of members, trustees and officers for debts of cooperative.
No member, trustee or officer of the cooperative shall be liable or responsible individually for any debts of the cooperative.
Laws 1939, p. 268, § 22.
§18437.22. Waiver of notice.
Whenever any notice is required to be given under the provisions of this act or under the provisions of the articles of incorporation or bylaws of a cooperative, waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time fixed for the giving of such notice, shall be deemed equivalent to such notice. If a person or persons entitled to notice of a meeting shall attend such meeting, such attendance shall constitute a waiver of notice of the meeting, except in case the attendance is for the express purpose of objecting to the transaction of any business because the meeting shall not have been lawfully called or convened.
Laws 1939, p. 269, § 23.
§18437.23. Foreign corporation.
Any corporation organized on a nonprofit or a cooperative basis for the purpose of supplying electric energy in rural areas and owning and operating electric transmission or distribution lines in a state adjacent to this state may file in the office of the Secretary of State a certified copy of its charter or articles of incorporation which shall be recorded in a book to be kept by the Secretary of State for that purpose, and thereupon, upon payment of the fees required of a cooperative for the filing of articles of incorporation, and the appointment of a service agent as provided by law, such foreign corporation shall be authorized to transact business in this state and shall have all the rights, powers and privileges conferred upon a cooperative under this act.
Laws 1939, p. 269, § 24.
§18437.24. Fees.
The Secretary of State shall have charge and collect for:
(a) Filing articles of incorporation, Twentyfive Dollars ($25.00);
(b) Filing articles of amendment, Ten Dollars ($10.00);
(c) Filing articles of consolidation or merger, Twentyfive Dollars ($25.00);
(d) Filing articles of conversion, Twentyfive Dollars ($25.00);
(e) Filing certificate of change of principal office, Ten Dollars ($10.00);
(f) Issuing certificate of incorporation, amendment, consolidation, merger or conversion, or any certified copy thereof, Five Dollars ($5.00).
Amended by Laws 1984, c. 229, § 8, operative July 1, 1984.
§18437.25. Exemption from excise and income taxes License fee.
Each cooperative and each foreign corporation transacting business in this state pursuant to this act shall pay annually, on or before the thirtyfirst day of August, to the Oklahoma Tax Commission, a fee of One Dollar ($1.00) for each one hundred persons or fraction thereof to whom electricity is supplied within the state by it, as of June thirtieth preceding, but shall be exempt from all other excise and income taxes whatsoever.
Laws 1939, p. 270, § 26.
§18437.27. Securities Act exemption.
The provisions of the Securities Act, Article 23 of Chapter 24, Oklahoma Statutes 1931, as amended, shall not apply to any note, bond or other evidence of indebtedness issued by any cooperative or foreign corporation transacting business in this state pursuant to this act, to the United States of America or any agency or instrumentality thereof, or to any mortgage or deed of trust executed to secure the same. The provisions of said Securities Act shall not apply to the issuance of membership certificates by any cooperative or any such foreign corporation.
Laws 1939, p. 270, § 28.
§18437.28. Definitions.
In this act, unless the context otherwise requires;
(a) "Rural area" means any area not included within the boundaries of any incorporated or unincorporated city, town or village, having a population in excess of one thousand five hundred (1,500) persons, and any area included within the boundaries of any such city, town or village as a result of incorporation, annexation, population growth, or otherwise, in which area a cooperative commenced or commences the construction or operation of electric facilities or the furnishing of electric energy prior to such incorporation, annexation or population growth.
(b) "Person" includes any natural person, firm, association, corporation, business trust, partnership, federal agency, state or political subdivision or agency thereof, or any body politic; and
(c) "Member" means each incorporator of a cooperative and each person admitted to and retaining membership therein, and shall include a husband and wife admitted to joint membership.
Laws 1939, p. 270, § 29; Laws 1961, p. 201, § 2.
§18437.29. Construction of act.
This act shall be construed liberally. The enumeration of any object, purpose, power, manner, method, or thing shall not be deemed to exclude like or similar object, purposes, powers, manner, methods or things.
Laws 1939, p. 270, § 30.
§18438.1. Short title of act.
This act may be cited as the "Telephone Cooperative Corporations Act".
Laws 1953, p. 484, § 1; Laws 1991, c. 135, § 1, eff. Sept. 1, 1991.
§18438.2. Organization authorized Purpose.
Cooperative, nonprofit corporations may be organized under this act for the purpose of furnishing communication services to the widest practicable number of users of such service.
Laws 1953, p. 484, § 2; Laws 1991, c. 135, § 2, eff. Sept. 1, 1991.
§18438.3. Definitions.
As used in this act:
1. "Cooperative" means any corporation organized pursuant to or which becomes subject to the provisions of the Telephone Cooperative Corporations Act;
2. "Person" means any natural person, firm, association, corporation, business trust, or partnership;
3. "Telephone company" means any natural person, firm, association, corporation, or partnership, other than a cooperative or mutual telephone company, owning, leasing, or operating any line, facility, or system used in furnishing telephone service within this state;
4. "Communication services" means the transmitting, receiving, or both, of information, signals or messages by wire, radio, cellular radio, microwave, fiber optics or any other means, and includes, but is not limited to, the providing of lines, facilities and systems used in providing the services;
5. "Member" means the incorporators of a cooperative and each person thereafter lawfully admitted to membership therein pursuant to the provisions contained in the bylaws; and
6. "Patron" means a member of the cooperative who is eligible to receive patronage dividends or to earn capital credits as a result of the purchase of certain services from the cooperative, as provided by subsection D of Section 438.9 of this title.
Amended by Laws 1983, c. 3, § 1, emerg. eff. Feb. 21, 1983; Laws 1991, c. 135, § 3, eff. Sept. 1, 1991.
§18438.4. Powers of cooperative.
A cooperative shall have power:
1. To sue and be sued in its corporate name;
2. To have a perpetual existence unless a limited period of duration is stated in its articles of incorporation;
3. To adopt a corporate seal and alter the same;
4. To furnish, improve and expand any or all communications services to its members, to other persons, and through interconnection of facilities to any number of subscribers of other communications systems, and through pay stations to any number of users; provided, however, that no such regulated communications services, as determined by the Oklahoma Corporation Commission, shall be furnished to persons located within the certified territory of another local exchange telephone company; and provided further that a cooperative which acquires existing communications facilities, systems or territories may continue service to persons who are already receiving service from such facilities and systems or who are located or who become located within the acquired territories. Such persons may become members as provided in the bylaws;
5. To construct, purchase, lease as lessee, or otherwise acquire, and to improve, expand, install, equip, maintain, and operate, and to sell, assign, convey, lease as lessor, mortgage, pledge, or otherwise dispose of or encumber, communication lines, facilities or systems, lands, buildings, structures, plants and equipment, exchanges, and any other real or personal property, tangible or intangible, which shall be deemed necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized; provided, however, that a cooperative shall not duplicate existing telephone lines, facilities or systems providing reasonably adequate service;
6. To connect and interconnect its communication lines, facilities or systems with other communication lines, facilities or systems; provided that any such connection or interconnection shall be in such manner and according to such specifications as will avoid interference with or hazards to existing communication lines, facilities or systems;
7. To make its facilities available to persons furnishing communication services within or without this state;
8. To purchase, lease as lessee, or otherwise acquire, and to use and exercise and to sell, assign, convey, mortgage, pledge or otherwise dispose of or encumber, franchises, rights, privileges, licenses and easements;
9. To issue membership certificates and nonvoting shares of stock as hereinafter provided;
10. To borrow money and otherwise contract indebtedness, and to issue or guarantee notes, bonds, and other evidences of indebtedness, and to secure the payment thereof by mortgage, pledge, or deed of trust of, or any other encumbrance upon, any or all of its thenowned or afteracquired real or personal property, assets, franchises, or revenues;
11. To construct, maintain and operate communication lines and facilities along, upon, under and across publicly owned lands and public thoroughfares, including, without limitation, all roads, highways, streets, alleys, bridges and causeways; subject, however, to the same requirements and limitations with respect to the use or occupancy of such thoroughfares and lands as are now or hereafter imposed by the laws of this state;
12. To exercise the power of eminent domain in the manner provided by the laws of this state for the exercise of such power by other corporations constructing or operating telephone lines, facilities or systems;
13. To become a member of other cooperatives, joint ventures, partnerships, corporations or other legal entities or to own stock therein;
14. To conduct its business and exercise its powers within or without this state;
15. To adopt, amend and repeal bylaws;
16. To make any and all legal contracts necessary, convenient or appropriate for the full exercise of the powers herein granted; and
17. To do and perform any other acts and things, and to have and exercise any other powers which may be necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized.
Amended by Laws 1988, c. 323, § 2, eff. Nov. 1, 1988; Laws 1991, c. 135, § 4, eff. Sept. 1, 1991.
§18438.5. Name.
The name of a cooperative shall include the words "telephone" and "cooperative", and the abbreviation "Inc.", unless, in an affidavit made by its president or vice president, and filed with the Secretary of State, or in an affidavit made by a person signing articles of incorporation, consolidation, merger or conversion, which relate to such cooperative, and filed, together with any such articles, with the Secretary of State, it shall appear that the cooperative desires to do business in another state and is or would be precluded therefrom by reason of the inclusion of such words or either thereof in its name. The name of a cooperative shall be distinct from the name of any other cooperative or corporation organized under the laws of, or authorized to do business in, this state. This section shall not apply to any corporation which becomes subject to this act by complying with the provisions of Section 20 of this act, or which does business in this state pursuant to Section 29 of this act and which elects to retain a corporate name which does not comply with this section.
Laws 1953, p. 485, § 5.
§18438.6. Incorporators.
Five or more natural persons who are residents of the areas in which the principal operations of the cooperative are to be conducted may organize a cooperative in the manner hereinafter provided.
Laws 1953, p. 486, § 6.
§18438.7. Articles of incorporation.
Articles of incorporation of a cooperative shall recite that they are executed pursuant to this act and shall state: (1) the name of the cooperative; (2) the address of its principal office; (3) the names and addresses of the incorporators; (4) the names and addresses of its trustees; (5) the purpose for which the cooperative is formed; and (6) the period of its existence and may contain any provisions not inconsistent with this act deemed necessary or advisable for the conduct of its business, including provisions for the issuance of nonvoting shares of stock as hereinafter provided. Such articles shall be signed by each incorporator and acknowledged by at least two of the incorporators, or on their behalf, if they are cooperatives. If a cooperative desires to issue nonvoting shares of stock, its articles of incorporation shall state: (1) the total number of such shares of stock which may be issued and the par value of each share; (2) the fixed or maximum rate of dividends on the par value of such shares of stock, in either case not exceeding four percent (4%) per annum, and whether dividends shall be cumulative or noncumulative; (3) whether such shares of stock may be issued to members only or to members and nonmembers; (4) the maximum number of such shares of stock which may be owned by any person; and (5) the terms and conditions on which such shares of stock may be transferred, redeemed and retired.
Laws 1953, p. 486, § 7.
§18438.8. Bylaws.
The board of trustees shall adopt the first bylaws of a cooperative to be adopted following an incorporation, conversion, combined consolidation and conversion, merger or consolidation. Thereafter the members shall adopt, amend or repeal the bylaws by the affirmative vote of a majority of those members voting thereon at a meeting of the members. The bylaws shall set forth the rights and duties of members, trustees and shareholders, if any, and may contain other provisions for the regulation and management of the affairs of the cooperative not inconsistent with this act or with its articles of incorporation.
Laws 1953, p. 486, § 8.
§18438.9. Membership Shares of stock - Qualification as patron.
A. Each incorporator of a cooperative shall be a member thereof but no other person may become a member thereof unless such other person agrees to use communication services furnished by the cooperative when it is made available through its facilities, except as otherwise provided in the bylaws. Membership in a cooperative may be evidenced by a certificate of membership which shall not be transferable, except as provided by the bylaws. The bylaws may prescribe additional qualifications and limitations in respect of membership, provided that ownership of shares of stock, if any are authorized, shall not be a condition of membership in the cooperative.
B. In case the issuance of shares of stock is provided for in the articles of incorporation, ownership thereof shall be evidenced by share certificates. No share of stock shall be issued except for cash, or for property at its fair value, in an amount equal to the par value of such share of stock.
C. Membership and share certificates shall contain such provisions, consistent with this act and the articles of incorporation of the cooperative, as shall be prescribed by its bylaws.
D. Each member who purchases communication services in the ordinary course of business of the cooperative is a patron of the cooperative, except the use of inter-exchange access, payment of inter-exchange access fares or settlements, or the purchase of equipment does not qualify a member or other person as a patron. The bylaws of the cooperative may provide other circumstances where a member or other person will not qualify to be a patron.
Laws 1953, p. 486, § 9; Laws 1991, c. 135, § 5, eff. Sept. 1, 1991.
§18438.10. Meetings of members.
A. An annual meeting of the members of a cooperative shall be held at such time and place as shall be provided in the bylaws.
B. Special meetings of the members may be called by the president, by the board of trustees, by any three trustees, or by not less than two hundred members or ten percent (10%) of all members, whichever shall be the lesser.
C. Except as otherwise provided in this act, written or printed notice stating the time and place of each meeting of the members and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each member, either personally or by mail, not less than ten (10) days nor more than twentyfive (25) days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail with postage prepaid, addressed to the member at his address as it appears on the records of the cooperative.
D. Unless the bylaws prescribe the presence of a greater percentage or number of the members for a quorum, a quorum for the transaction of business at all meetings of the members of a cooperative having not more than five hundred members, shall be ten percent (10%) of all members, present in person, and of a cooperative having more than five hundred members, shall be fifty members or two percent (2%) of all members, whichever is greater, present in person. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice.
E. Each member shall be entitled to one vote on each matter submitted to a vote at a meeting of the members. Voting shall be in person, but, if the bylaws so provide, may also be by mail.
Laws 1953, p. 486, § 10; Laws 1991, c. 135, § 6, eff. Sept. 1, 1991.
§18438.11. Waiver of notice of meeting.
Any person entitled to notice of a meeting may waive such notice in writing either before or after such meeting. If any such person shall attend such meeting, such attendance shall constitute a waiver of notice of such meeting, unless such person participates therein solely to object to the transaction of any business because the meeting has not been legally called or convened.
Laws 1953, p. 487, § 11.
§18438.12. Board of trustees.
A. The business of a cooperative shall be managed by a board of not less than five (5) trustees, each of whom shall be a member of the cooperative. The bylaws shall prescribe the number of trustees, their qualifications, other than those prescribed in this act, the manner of holding meetings of the board of trustees and of electing successors to trustees who shall resign, die, or otherwise be incapable of acting. The bylaws may also provide for the removal of trustees from office and for the election of their successors. Trustees shall not receive any salaries for their services as trustees and, except in emergencies, shall not receive any salaries for their services in any other capacity without the approval of the members. The cooperative may provide liability, accident, life and health insurance coverage for trustees choosing to have that coverage. The bylaws may also prescribe a fixed fee for attendance at each meeting of the board of trustees and may provide for reimbursement of actual expenses of attendance.
B. The trustees of a cooperative named in any articles of incorporation, consolidation, merger, conversion, or combined consolidation and conversion shall hold office until the next annual meeting of the members and until their successors are elected and qualify. At each annual meeting or, in case of failure to hold the annual meeting as specified in the bylaws, at a special meeting called for that purpose, the members shall elect trustees to hold office until the next annual meeting of the members, except as otherwise provided in this act or the bylaws. Each trustee shall hold office for the term for which he is elected and until his successor is elected and qualifies. Vacancies shall be filled in accordance with provisions of the bylaws.
C. The bylaws may provide that:
1. In lieu of electing the whole number of trustees annually, the trustees shall be divided into three classes at the first or any subsequent annual meeting, each class to be as nearly equal in number as possible, with the term of office of the trustees of the first class to expire at the next succeeding annual meeting, the term of the second class to expire at the second succeeding annual meeting, and the term of the third class to expire at the third succeeding annual meeting; and
2. At each annual meeting or at district meetings, after such classification, a number of trustees equal to the number of the class whose term expires at the time of such meeting shall be elected to hold office until the third succeeding annual or district meeting.
D. A majority of the board of trustees, as determined by the bylaws, shall constitute a quorum.
E. The board of trustees may exercise all of the powers of a cooperative conferred upon the members by this act, or its articles of incorporation or bylaws.
Laws 1953, p. 487, § 12; Laws 1961, p. 202, § 1; Laws 1991, c. 135, § 7, eff. Sept. 1, 1991.
§18438.13. Division of territory into districts.
The bylaws may provide for the division of the territory served or to be served by a cooperative into two or more districts for the nomination and election of trustees and the election and functioning of district delegates. Such delegates, who shall be members, may nominate and elect trustees. The bylaws shall prescribe the boundaries of the districts, or the manner of establishing such boundaries, and the manner of changing such boundaries, and the manner in which such districts shall function. No member at any district meeting and no district delegate at any meeting shall vote by proxy or by mail.
Laws 1953, p. 488, § 13.
§18438.14. Officers.
The officers of a cooperative shall consist of a president, vice president, secretary and treasurer, who shall be elected annually by and from the board of trustees. When a person holding any such office ceases to be a trustee he shall cease to hold such office. The offices of secretary and of treasurer may be held by the same person. The board of trustees may also elect or appoint such other officers, agents, or employees as it deems necessary or advisable and shall prescribe their powers and duties. Any officer may be removed from office and his successor elected in the manner prescribed in the bylaws.
Laws 1953, p. 488, § 14.
§18438.15. Amendment of articles of incorporation.
A cooperative may amend its articles of incorporation by complying with the following requirements, provided, however, that a change of location of principal office may be effected in the manner set forth in Section 16 of this act: The proposed amendment shall be presented to a meeting of the members, the notice of which shall set forth or have attached thereto the proposed amendment. If the proposed amendment, with any changes, is approved by the affirmative vote of not less than two thirds of those members voting thereon at such meeting, articles of amendment shall be executed and acknowledged on behalf of the cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of amendment shall recite that they are executed pursuant to this act and shall state: (1) the name of the cooperative; (2) the address of its principal office; and (3) the amendment to its articles of incorporation. The president or vice president executing such articles of amendment shall make and annex thereto an affidavit stating that the provisions of this section in respect of the amendment set forth in such articles were duly complied with.
Laws 1953, p. 488, § 15.
§18438.16. Change of location of principal office.
A cooperative may, upon authorization of its board of trustees or its members, change the location of its principal office in this state by filing a certificate reciting such change of principal office, executed and acknowledged by its president or vice president under its seal attested by its Secretary, in the office of the Secretary of State.
Laws 1953, p. 488, § 16.
§18438.17. Consolidation of cooperatives.
Any two or more cooperatives (each of which is hereinafter designated a "consolidating cooperative"), may consolidate into a new cooperative (hereinafter designated the "new cooperative"), by complying with the following requirements:
(a) The proposition for the consolidation of the consolidating cooperatives into the new cooperative and proposed articles of consolidation to give effect thereto shall be submitted to a meeting of the members of each consolidating cooperative, the notice of which shall have attached thereto a copy of the proposed articles of consolidation;
(b) If the proposed consolidation and the proposed articles of consolidation, with any amendments, are approved by the affirmative vote of not less than two thirds of those members of each consolidating cooperative voting thereon at each such meeting, articles of consolidation in the form approved shall be executed and acknowledged on behalf of each consolidating cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of consolidation shall recite that they are executed pursuant to this act and shall state: (1) the name of each consolidating cooperative and the address of its principal office; (2) the name of the new cooperative and the address of its principal office; (3) a statement that each consolidating cooperative agrees to the consolidation; (4) the names and addresses of the trustees of the new cooperative; (5) the terms and conditions of the consolidation and the mode of carrying the same into effect, including the manner in which members and shareholders, if any, of the consolidating cooperatives may or shall become members and shareholders, respectively, of the new cooperative; (6) the purpose for which the cooperative is formed; (7) the period of existence of the new cooperative, and may contain any provisions not inconsistent with this act deemed necessary or advisable for the conduct of the business of the new cooperative. The president or vice president of each consolidating cooperative executing such articles of consolidation shall make and annex thereto an affidavit stating that the provisions of this section in respect of such articles were duly complied with by such cooperative.
Laws 1953, p. 488, § 17.
§18438.18. Merger of cooperatives.
Any one or more cooperatives (each of which is hereinafter designated a "merging cooperative") may merge into another cooperative (hereinafter designated the "surviving cooperative"), by complying with the following requirements:
(a) The proposition for the merger of the merging cooperative into the surviving cooperative and proposed articles of merger to give effect thereto shall be submitted to a meeting of the members of each merging cooperative and of the surviving cooperative, the notice of which shall have attached thereto a copy of the proposed articles of merger;
(b) If the proposed merger and the proposed articles of merger, with any amendments, are approved by the affirmative vote of not less than two thirds of those members of each cooperative voting thereon at each such meeting, articles of merger in the form approved shall be executed and acknowledged on behalf of each such cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of merger shall recite that they are executed pursuant to this act and shall state: (1) the name of each merging cooperative and the address of its principal office; (2) the name of the surviving cooperative and the address of its principal office; (3) a statement that each merging cooperative and the surviving cooperative agree to the merger; (4) the names and addresses of the trustees of the surviving cooperative; and (5) the terms and conditions of the merger and the mode of carrying the same into effect, including the manner in which members and shareholders, if any, of the merging cooperatives may or shall become members and shareholders, respectively, of the surviving cooperative; (6) the period of existence of the new cooperative; and (7) the purpose for which the cooperative is formed; and may contain any provisions not inconsistent with this act deemed necessary or advisable for the conduct of the business of the surviving cooperative. The president or vice president of each cooperative executing such articles of merger shall make and annex thereto an affidavit stating that the provisions of this section in respect of such articles were duly complied with by such cooperative.
Laws 1953, p. 489, § 18.
§18438.19. Effect of consolidation or merger.
(a) In the case of a consolidation the existence of the consolidating cooperative shall cease and the articles of consolidation shall be deemed to be the articles of incorporation of the new cooperative; and in the case of a merger the separate existence of the merging cooperatives shall cease and the articles of incorporation of the surviving cooperative shall be deemed to be amended to the extent, if any, that changes therein are provided for in the articles of merger;
(b) All the rights, privileges, immunities and franchises and all property, real and personal, including without limitation applications for membership, all debts due on whatever account and all other choses in action, of each of the consolidating or merging cooperatives shall be deemed to be transferred to and vested in the new or surviving cooperative without further act or deed;
(c) The new or surviving cooperative shall be responsible and liable for all the liabilities and obligations of each of the consolidating or merging cooperatives and any claim existing or action or proceeding pending by or against any of the consolidating or merging cooperatives may be prosecuted as if the consolidation or merger had not taken place, but the new or surviving cooperative may be substituted in its place; and
(d) Neither the rights of creditors nor any liens upon the property of any of such cooperatives shall be impaired by such consolidation or merger.
Laws 1953, p. 489, § 19.
§18438.20. Conversion of other corporations into cooperatives.
A. Any corporation organized under the laws of this state and furnishing or having the corporative power to furnish communication services may be converted into a cooperative by complying with the following requirements and shall thereupon become subject to this act with the same effect as if originally organized under this act:
1. The proposition for the conversion of such corporation into a cooperative and proposed articles of conversion to give effect thereto shall be submitted to a meeting of the members or stockholders of such corporation, or in case of a corporation having no members or stockholders, to a meeting of the incorporators of such corporation, the notice of which shall have attached thereto a copy of the proposed articles of conversion; and
2. If the proposition for the conversion of such corporation into a cooperative and the proposed articles of conversion, with any amendments, are approved by the affirmative vote of not less than two-thirds (2/3) of those members of such corporation voting thereon at such meeting, or, if such corporation is a stock corporation, by the affirmative vote of the holders of not less than two-thirds (2/3) of those shares of the capital stock of such corporation represented at such meeting and voting thereon, or, in the case of a corporation having no members and no shares of its capital stock outstanding, by the affirmative vote of not less than two-thirds (2/3) of its incorporators; articles of conversion in the form approved shall be executed and acknowledged on behalf of such corporation by its president or vice-president and its seal shall be affixed thereto and attested by its secretary. The articles of conversion shall recite that they are executed pursuant to this act and shall state:
a. the name of the corporation and the address of its principal office prior to its conversion into a cooperative,
b. the statute or statutes under which it was organized,
c. a statement that such corporation elects to become a cooperative, nonprofit corporation subject to this act,
d. its name as a cooperative,
e. the address of the principal office of the cooperative,
f. the names and addresses of the trustees of the cooperative,
g. the manner in which members, stockholders or incorporators of such corporation may or shall become members of the cooperative,
h. the period of existence of the new cooperative, and
i. the purpose for which the cooperative is formed;
and may contain any provisions not inconsistent with this act deemed necessary or advisable for the conduct of the business of the cooperative, including provisions for the issuance of nonvoting shares of stock as provided for in Section 348.7 of this title. If the articles of conversion shall make provision for the issuance of such shares of stock, they shall also state the manner in which members, stockholders or incorporators of such corporation may or shall become shareholders of the cooperative. The president or vice-president executing such articles of conversion shall make and annex thereto an affidavit stating that the provisions of this section were duly complied with in respect of such articles. The articles of conversion shall be deemed to be the articles of incorporation of the cooperative.
B. Any two or more corporations organized under the laws of this state and furnishing or having the corporate power to furnish communication services may, if otherwise permitted to consolidate by the laws of this state, consolidate into a cooperative subject to this act, with the same effect as if originally organized under this act, by complying with the following requirements:
1. The proposition for the consolidation into a cooperative and the proposed articles of consolidation and conversion, with any amendments, shall be approved by each consolidating corporation in accordance with the statute or statutes under which it was organized and the provisions of subsection A of this section;
2. The articles of consolidation and conversion in the form approved shall be executed, acknowledged and sealed in the manner prescribed in subsection A of this section and in the statute or statutes under which the consolidating corporations were organized. The articles of consolidation and conversion shall state that they are executed pursuant to this act and such statute or statutes, that each consolidating corporation elects that the new corporation shall be a cooperative, and in addition shall contain all other information required by such statute or statutes and by paragraph 2 of subsection A of this section; and may contain any provisions not inconsistent with this act deemed necessary or advisable for the conduct of the business of the cooperative. The president or vice-president executing such articles of consolidation and conversion shall make and annex thereto an affidavit stating that the provisions of this section and of the statute or statutes under which the consolidating corporations were organized were duly complied with in respect of such articles. The articles of consolidation and conversion shall be deemed to be the articles of incorporation of the cooperative and shall be filed both in accordance with the provisions of this act and of the statute or statutes under which the consolidating corporations were organized.
Laws 1953, p. 490, § 20; Laws 1991, c. 135, § 8, eff. Sept. 1, 1991.
§18438.21. Dissolution.
A. A cooperative which has not commenced business may be dissolved by delivering to the Secretary of State articles of dissolution which shall be executed and acknowledged on behalf of the cooperative by a majority of the incorporators and which shall state:
1. The name of the cooperative;
2. The address of its principal office;
3. That the cooperative has not commenced business;
4. That any sums received by the cooperative, less any part thereof disbursed for expenses of the cooperative, have been returned or paid to those entitled thereto;
5. That no debt of the cooperative is unpaid; and
6. That a majority of the incorporators elect that the cooperative be dissolved.
B. 1. A cooperative which has commenced business may be dissolved in the following manner: The proposition to dissolve shall be submitted to the members of the cooperative at any annual or special meeting, the notice of which shall set forth such proposition. The members at any such meeting shall approve, by the affirmative vote of not less than a majority of all members of the cooperative, the proposition that the cooperative be dissolved. Upon such approval, a certificate of election to dissolve (hereinafter designated the "certificate"), executed and acknowledged on behalf of the cooperative by its president or vice-president under its seal, attested by its secretary, and stating:
(a) the name of the cooperative,
(b) the address of its principal office, and
(c) that the members of the cooperative have duly voted that the cooperative be dissolved, shall, together with an affidavit made by its president or vice-president executing the certificate, stating that the statements in the certificate are true, be submitted to the Secretary of State for filing.
2. Upon the filing of the certificate and affidavit with the Secretary of State, the cooperative shall cease to carry on its business except to the extent necessary for the winding up thereof, but its corporate existence shall continue until articles of dissolution have been filed with the Secretary of State. The board of trustees shall immediately cause notice of the dissolution proceedings to be mailed to each known creditor of and claimant against the cooperative and to be published once a week for two (2) successive weeks in a newspaper of general circulation in the county in which the principal office of the cooperative is located. The board of trustees shall wind up and settle the affairs of the cooperative, collect sums owing to it, liquidate its property and assets, pay and discharge its debts, obligations and liabilities, other than those to patrons arising by reason of their patronage, and do all other things required to wind up its business, and after paying or discharging or adequately providing for the payment or discharge of all its debts, obligations and liabilities, other than those to patrons arising by reason of their patronage, shall distribute any remaining sums: first, to shareholders, if any, for the pro rata return of the par value of their shares, together with any accrued dividends; second, to patrons for the pro rata return of all amounts standing to their credit by reason of their patronage; and third, to members for the pro rata repayment of membership fees. Any sums then remaining shall be distributed among its members and former members in proportion to their patronage. The board of trustees shall thereupon authorize the execution of articles of dissolution, which shall be executed and acknowledged on behalf of the cooperative by its president or vice-president, and its seal shall be affixed thereto and attested by its secretary. The articles of dissolution shall recite that they are executed pursuant to this act and shall state:
a. the name of the cooperative,
b. the address of its principal office,
c. the date on which the certificate of election to dissolve was filed with the Secretary of State,
d. that there are no actions or suits pending against the cooperative,
e. that all debts, obligations and liabilities of the cooperative have been paid and discharged or that adequate provision has been made therefor, and
f. that the preceding provisions of this subsection have been duly complied with. The president or vice-president executing the articles of dissolution shall make and annex thereto an affidavit stating that the statements made therein are true.
Laws 1953, p. 491, § 21; Laws 1991, c. 135, § 9, eff. Sept. 1, 1991.
§18438.22. Presentation and filing of papers with Secretary of State.
Articles of incorporation, amendment, consolidation, merger, conversion, combined consolidation and conversion, or dissolution, when executed and acknowledged and accompanied by such affidavits as may be required by applicable provisions of this act, shall be presented to the Secretary of State for filing in the records of his office. If the Secretary of State shall find that the articles presented conform to the requirements of this act, he shall, upon the payment of the fees as in this act provided, file such articles in the records of his office and upon such filing the incorporation, amendment, consolidation, merger, conversion, combined consolidation and conversion, or dissolution provided for therein shall be in effect. The provisions of this section shall also apply to certificates of election to dissolve and affidavits executed in connection therewith pursuant to subsection (b) of Section 21 of this act.
Laws 1953, p. 492, § 22.
§18438.23. Operation for mutual benefit Disposition of receipts and revenues.
A cooperative shall be operated on a nonprofit basis for the mutual benefit of its members and patrons. The bylaws of a cooperative or its contracts with members and patrons shall contain such provisions relative to the disposition of revenues and receipts as may be necessary and appropriate to establish and maintain its nonprofit and cooperative character. In the case of a cooperative authorized to issue shares of stock, such bylaws or contracts shall provide that no monies shall be paid or credits given on the basis of patronage except after the declaration or payment of dividends on the outstanding shares of stock in accordance with the articles of incorporation of the cooperative, and such bylaws or contracts shall otherwise be consistent with the cooperative's obligations in respect of such shares of stock.
Laws 1953, p. 492, § 23.
§18438.24. Mortgages, deeds of trust or pledges Sale, lease, etc.
A. The board of trustees of a cooperative shall have full power and authority, without authorization by the members thereof, to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues therefrom, all upon such terms and conditions as the board of trustees shall determine, to secure any indebtedness of the cooperative to United States of America or any agency or instrumentality thereof or to any corporation or financial institution permitted to assist in the credit and financial needs of rural telephone cooperative corporations.
B. A cooperative may not otherwise sell, mortgage, lease or otherwise dispose of or encumber all or a substantial portion of its property unless such sale, mortgage, lease or other disposition or encumbrance is authorized by the affirmative vote of not less than two thirds (2/3) of all the members of the cooperative; provided, however, that notwithstanding any other provision of Section 438.1 et seq. of this title, or any other provision of law, the board of trustees may, upon the authorization of a majority of those members of the cooperative present at a meeting of the members thereof, the notice of which shall have set forth the proposed action, sell, lease or otherwise dispose of all or a substantial portion of its property to another cooperative pursuant to this act or to the holder or holders of any notes, bonds or other evidences of indebtedness to United States of America or any agency or instrumentality thereof or to any corporation or financial institution permitted to assist in the credit and financial needs of rural telephone cooperative corporations.
Amended by Laws 1987, c. 57, § 1, emerg. eff. April 30, 1987.
§18438.25. Members and shareholders not liable for debts.
No member or shareholder shall be liable or responsible for any debts of the cooperative and the property of the members and shareholders shall not be subject to execution therefor.
Laws 1953, p. 493, § 25.
§18438.26. Recording instruments Lien.
Any mortgage, deed of trust or other instrument executed by a cooperative or foreign corporation doing business in this state pursuant to this act, which affects real and personal property and which is recorded in the real property records in any county in which such property is located or is to be located, shall have the same force and effect as if the mortgage, deed of trust or other instrument were also recorded, filed or indexed as provided by law in the proper office in such county as a mortgage of personal property. The lien upon real or personal property of any such mortgage, deed of trust or other instrument shall, after recordation thereof, continue in existence and of record for the period of time specified therein without the refiling thereof of the filing or any renewal certificate, affidavit, or other supplemental information required by the laws relating to the renewal, maintenance or extension of liens upon real or personal property.
Laws 1953, p. 493, § 26; Laws 1991, c. 135, § 10, eff. Sept. 1, 1991.
§18438.27. Safety standards.
Construction of communication lines and facilities by a cooperative shall, as a minimum requirement, comply with the standards of the National Electrical Safety Code in effect at the time of such construction, and shall be in such manner and according to such specifications as will avoid interference with or hazards to existing communication lines, facilities or systems.
Laws 1953, p. 493, § 27; Laws 1991, c. 135, § 11, eff. Sept. 1, 1991.
§18438.28. Acknowledgment of instruments.
No person who is authorized to take acknowledgments under the laws of this state shall be disqualified from taking acknowledgments of instruments executed in favor of a cooperative or to which it is a party, by reason of being an officer, trustee, member, or shareholder of such cooperative.
Laws 1953, p. 493, § 28.
§18438.29. Foreign nonprofit or cooperative corporation Extensions of lines into state.
Any foreign nonprofit or cooperative corporation furnishing or authorized to furnish communication services and owning or operating communication lines or facilities in an adjacent state may construct or acquire extensions of such lines in this state and operate such extensions by complying with the statutes of this state pertaining to the qualifications of foreign corporations for the doing of business in this state. Thereafter, such corporation shall have all the rights, powers, privileges and immunities of a cooperative organized under this act.
Laws 1953, p. 493, § 29; Laws 1991, c. 135, § 12, eff. Sept. 1, 1991.
§18438.30. Connections with other lines.
Any cooperative or foreign corporation doing business in this state pursuant to this act (such cooperative or corporation being designated in this section as "applicant") shall have the right to require any person furnishing telephone service to the public in this state (such person being designated in this section as "company") to interconnect the company's lines, facilities or systems with, or otherwise make available such lines, facilities or systems to the applicant's telephone lines, facilities or systems, in order to provide a continuous line of communication for the applicant's subscribers. In the event the connecting company and the applicant shall be unable to agree upon the terms and conditions of such interconnection, including compensation therefor, within thirty (30) days after request by the applicant, the Corporation Commission shall by order direct that such interconnection be made and shall prescribe the terms and conditions thereof, which shall be reasonable and nondiscriminatory. Nothing in this section shall be deemed to subject a cooperative to the jurisdiction of the Corporation Commission except and only to the extent required to carry out the provisions hereof.
Laws 1953, p. 493, § 30.
§18438.31. Rates.
The Corporation Commission shall have the power and authority to prescribe and enforce rates for regulated communication services under this act as may be found to be reasonable and just after due notice and hearing, provided that said commission shall make final determination of rates within ninety (90) days after the request has been received by the Commission. In the event that said Commission fails to act within the period prescribed above, the rate requested by the applicant in said application shall immediately become effective. From any action of the Commission prescribing rates and charges under this act, any party aggrieved may appeal to the Supreme Court in the manner now provided by law for appealing cases from the Corporation Commission to the Supreme Court. Nothing in this section shall be deemed to subject a cooperative to the jurisdiction of the Corporation Commission except and only to the extent required to carry out the provisions thereof.
Laws 1953, p. 494, § 31; Laws 1991, c. 135, § 13, eff. Sept. 1, 1991.
§18438.32. Approval of Corporation Commission Orders Certificate not required.
A. Subject to paragraph 4 of Section 438.4 of this title, any cooperative may furnish communication services in any territory not already being furnished communication services by a telephone company or another cooperative without approval of the Corporation Commission of this state.
B. In any matter before the Corporation Commission, to which any cooperative is a party, the Commission shall issue its order determining such matter within ninety (90) days after the application therein has been filed.
C. Under this act, no certificate of convenience and necessity, as provided in Sections 131 through 133 of Title 17 of the Oklahoma Statutes inclusive, shall be required by the Corporation Commission for a cooperative organized hereunder.
Laws 1953, p. 494, § 32; Laws 1991, c. 135, § 14, eff. Sept. 1, 1991.
§18438.33. Cooperatives, nonprofit and mutual corporations and associations subject to act - Corrected articles of incorporation.
A. Existing domestic and domesticated cooperatives, nonprofit and mutual corporations and associations formed to engage in or engaging in the business, undertaking or activity described in or contemplated hereby, shall be deemed, ipso facto, to come under the provisions of this act as of the date this act becomes effective and all provisions hereof shall thereafter fully apply thereto and every such corporation and association shall have the same rights, privileges, powers and immunities as it would possess if respectively created or domesticated hereunder and shall be subject to the same obligations, duties and jurisdictions as cooperatives organized under this act.
B. In the event any cooperative has filed defective articles of incorporation or has failed to do all things necessary to perfect its corporate organization, it may, nevertheless, file corrected articles of incorporation or amend the original articles and do and perform all acts and things necessary in the premises for the correction of such defects.
Laws 1953, p. 494, § 33; Laws 1991, c. 135, § 15, eff. Sept. 1, 1991.
§18438.34. Partial invalidity.
If any provision of this act, or the application of such provision to any person or circumstance is held invalid, the remainder of the act and the application of such provisions to other persons or circumstances shall not be affected thereby.
Laws 1953, p. 494, § 34.
§18439.1. Conversion of grain elevator corporations to cooperatives Procedure.
Any corporation organized under the laws of this state for the purpose, among others, of conducting a grain elevator business, may be converted into a cooperative and become subject to this act with the same effect as if originally organized under this act by complying with the following requirements:
1. The proposition for the conversion of such corporation into a cooperative and proposed articles of conversion to give effect thereto shall be first approved by the board of trustees or the board of directors of the corporation. The proposed articles of conversion shall state:
a. the name of the corporation prior to its conversion into a cooperative,
b. the address of the principal officer of the corporation,
c. the date of the filing of the articles of incorporation of the corporation in the Office of the Secretary of State,
d. the name assumed by the cooperative,
e. a statement that the corporation elects to become a cooperative, nonprofit, membership corporation subject to this act,
f. the manner and basis of converting either memberships in or shares of stock of the corporation into memberships of the cooperative, and
g. any provisions not inconsistent with this act deemed necessary or advisable for the conduct of the business and affairs of the corporation;
2. The proposition for the conversion of the corporation into a cooperative and the proposed articles of conversion approved by the board of trustees or the board of directors of such corporation shall then be submitted to a vote of the members or stockholders of the corporation at any duly held annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed conversion. The proposition for the conversion of the corporation into a cooperative and the proposed articles of conversion, with any amendments thereto as the members or stockholders of the corporation shall choose to make, shall be deemed to be approved upon the affirmative vote of a majority of those members of the corporation voting thereon at such meeting, or, if the corporation is a stock corporation, upon the affirmative vote of the holders of a majority of the capital stock of the corporation represented at such meeting;
3. Upon approval by the members or stockholders of the corporation, articles of conversion in the form approved by such members or stockholders shall be executed and acknowledged on behalf of the corporation by its president or vicepresident and its corporate seal shall be affixed thereto and attested by its secretary. The president or vicepresident executing such articles of conversion on behalf of the corporation shall also make and annex thereto an affidavit stating that the provisions of this section with respect to the approval of its trustees or directors and its members or stockholders, of the proposition for the conversion of the corporation into a cooperative and such articles of conversion were duly complied with. Such articles of conversion and affidavit shall be submitted to the Secretary of State for filing as provided in this act. The term "articles of incorporation", as used in Chapter 10 of Title 18, of the Oklahoma Statutes, shall be deemed to include the articles of conversion of a converted corporation; and
4. The value of shares in the corporation shall be converted to the value of shares in the cooperative, on a dollarfordollar basis. Any dividends payable on shares of stock in the cooperative shall be paid on preferred stock before dividends are paid on common stock.
Added by Laws 1983, c. 15, § 2, emerg. eff. March 25, 1983.
§18439.2. Filing articles of conversion with Secretary of State Issuance of certificate of conversion.
Articles of conversion, when executed and acknowledged and accompanied by such affidavits as may be required by applicable provisions of this act, shall be presented to the Secretary of State for filing in the records of his office. If the Secretary of State shall find that the articles conform to the requirements of this act, he shall, upon the payment of the fees specified by him file the articles so presented in the records of his office and shall issue over the Great Seal of the State an appropriate certificate of conversion, and thereupon the conversion provided for therein shall be in effect.
Added by Laws 1983, c. 15, § 3, emerg. eff. March 25, 1983.
§18471. Venue of actions.
Any foreign corporation, doing business in the State of Oklahoma, and any person now or hereafter having any cause of action against such corporation, arising on contract, tort, or otherwise, may file suit in any county in the State of Oklahoma where the plaintiff resides or where said corporation has its principal place of business, or has property, or in any county where said corporation has an agent appointed upon whom service of summons or other process may be had.
Laws 191011, c. 26, p. 46, § 1.
§18-476. Repealed by Laws 1998, c. 104, § 40, eff. Nov. 1, 1998.
§18-477. Repealed by Laws 1998, c. 104, § 40, eff. Nov. 1, 1998.
§18-478. Repealed by Laws 1998, c. 104, § 40, eff. Nov. 1, 1998.
§18481. Corporation surety authorized.
Whenever any recognizance, stipulation, bond, or undertaking conditioned for the faithful performance of any duty or for the doing or refraining from doing anything in such recognizances, stipulation, bond or undertaking specified, is by law of the State of Oklahoma required or permitted to be given with one surety, or with two or more sureties, the execution of the same or the guaranteeing of the performance of the conditions thereof shall be sufficient when executed or guaranteed solely by a corporation incorporated under the laws of the United States, or of any state, having power to guarantee the fidelity of persons holding positions of public or private trust, and to execute and guarantee bonds and undertakings in judicial proceedings: Provided, that such recognizance, stipulation, bond or undertaking be approved by the head of department, court, judge, officer, board or body executive, legislative or judicial, required to approve or execute the same.
R.L.1910, § 1344.
§18482. Permission to do business Statements Deposit.
Every company, before transacting any business in the State of Oklahoma, under Section 481 et seq. of this title, shall deposit with the Insurance Commissioner of the state a copy of its charter or articles of incorporation and a statement signed and sworn to by its president and secretary, showing the assets and liabilities. If said Insurance Commissioner shall be satisfied that such company has authority under its charter to do the business provided for in this article, and that it has a paidup capital of not less than Five Hundred Thousand Dollars ($500,000.00) in cash or its equivalent, and is able tokeep and perform its contracts and has a good reputation for the prompt and equitable settlement and adjustment of liabilities accruing upon its undertakings, he shall grant authority in writing to such company to do business in this state, but before granting such authority the said corporations shall also be required to comply with the requirements of Section 613 of Title 36 of the Oklahoma Statutes, relating to insurers issuing policies of surety insurance. Provided however, the deposit requirements of subsection A of Section 613 of Title 36 of the Oklahoma Statutes shall not apply to companies that solely write bonds that cover grain warehouse storage.
Amended by Laws 1986, c. 129, § 1, emerg. eff. April 14, 1986; Laws 1988, c. 291, § 1, eff. Nov. 1, 1988.
§18483. Surety contracts, liberal construction of.
The rule of the common law requiring a strict construction of the obligations of a surety shall have no application to the obligations of a surety or guarantor or indemnitor for hire, but all such obligations shall be liberally construed in accordance with the rules of the general law applicable to policies of insurance.
R.L.1910, § 1346.
§18484. Quarterly reports Revocation of authority Inquiry into solvency Additional security.
Every such corporation shall, in the months of January, April, July and October of each year, file with the Insurance Commissioner of the state a statement signed and sworn to by its president and secretary, showing its assets and liabilities as required by Section 1345. And the Insurance Commissioner shall have the power, and it shall be his duty, to revoke the authority of any such company to transact any business under this article whenever, in his judgment, said company is not solvent, or is conducting its business in violation of this article. He may institute inquiry, at any time, into the solvency of such company, and may require that additional security be given, at any time, upon any obligation to the state when he deems such company no longer sufficient security.
R.L.1910, § 1347.
§18485. Actions Venue Bond considered made where.
Any surety company doing business under the provisions of this article, may be sued in respect thereof, in any court of the United States or the State of Oklahoma, which has jurisdiction of actions on suits upon such recognizances, stipulations, bond, or undertaking, was made or guaranteed. And for the purpose of this article, such recognizance, stipulation, bond, or undertaking, shall be treated as made or guaranteed in the county in which the office is located, to which it is returnable, or in which it is filed, or in the county in which the principal of such recognizance, stipulation, bond or undertaking, resided when it was made or guaranteed.
R.L.1910, § 1348.
§18486. Failure to pay judgment.
If any such company shall neglect or refuse to pay any final judgment or decree rendered against it, upon any such recognizance, stipulation, bond, or undertaking made or guaranteed by it under the provisions of this article, from which no appeal, writ of error or supersedeas has been taken for sixty (60) days after the rendition of such judgment or decree, it shall forfeit all right to do business under this act.
R.L.1910, § 1349.
§18487. Estopped to deny liability.
Any company which shall execute or guarantee any recognizance, stipulation, bond, or undertaking under the provisions of this article, shall be estopped in any such proceeding to deny the liability which it shall have assumed to incur, or to deny its corporate power to execute or guarantee any such instrument, or assume such liability.
R.L.1910, § 1350.
§18488. Penalty for failure to comply.
Any company doing business under the provisions of this article, which shall fail to comply with any of its provisions, shall forfeit to the State of Oklahoma for every such failure not less than Five Hundred Dollars ($500.00) nor more than Five Thousand Dollars ($5,000.00) to be recovered by suit in the name of the State of Oklahoma, in the same court in which suit may be brought against such company under the provisions of this article, and such failure shall not affect the validity of any contract entered into by such company.
R.L.1910, § 1351.
§18489. Fiduciaries Cost of bond as lawful expense Amount of bond.
That any receiver, assignee, guardian, trustee, executor, administrator or other fiduciary, required by law or the order of any court or judge, to give a bond or other obligations as such, may include as a part of the lawful expense of executing his trust, such reasonable sum paid a company authorized under the laws of this state so to do, for becoming his surety on such bond as may be allowed by the court in which or a judge before whom, he is required to account, and when any such bond is signed by a surety company as surety, the penalty must not be in excess of the value of the personal property and the probable value of the annual rents, profits and issues of real property, which are likely to come into the hands of such receiver, assignee, guardian, trustee, executor, administrator or other fiduciary. But when real estate is to be sold an additional bond shall be required in amount equal to the probable value of such real estate.
R.L.1910, § 1352; Laws 1913, c. 86, p. 139, § 1.
§18490. Cancellation of bond Grounds Notice.
Where any surety company bond is required to be executed by any county, district, or state officer or his deputy or by any county employee who has in his custody any money or property belonging to the county for the purposes of his employment, whether said bond is required by law or by the board of county commissioners or by the principal officer, such surety or sureties may, if they deem themselves unsafe or insecure, upon thirty (30) days written notice given to the Secretary of State as to state and district officers and as to county officers the board of county commissioners, withdraw and cancel their obligations as surety or sureties on said bond; provided that such cancellation shall not relieve the surety company from any liability previously incurred, and said pro rata share of the unearned premium shall be returned.
Laws 1957, p. 450, § 1.
§18491. Agreement between principal and surety for deposit of monies and assets.
It shall be lawful for any party of whom a bond, undertaking or other obligation is required, to agree with his surety or sureties for the deposit of any or all monies and assets for which he and his surety or sureties are or may be held responsible, with a bank, savings bank, safedeposit or trust company, authorized by law to do business as such, or with other depository approved by a court or a judge thereof, if such deposit is otherwise proper, for the safekeeping thereof, and in such manner as to prevent the withdrawal of such money or assets or any part thereof, without the written consent of such surety or sureties, or an order of court, or a judge thereof made on such notice to such surety or sureties as such court or judge may direct; provided, however, that such agreement shall not in any manner release from or change the liability of the principal or sureties as established by the terms of the said bond.
Laws 1959, p. 81, § 1.
§18543. Right to hold real property limited.
All corporations organized for religious, charitable, educational or scientific purposes may hold all the property of the association owned prior to incorporation, as well as that acquired thereafter in any manner and transact all business relative thereto; but no such corporation shall own or hold more real property than may be reasonably necessary for the business and objects of the said association.
Amended by Laws 1986, c. 292, § 146, eff. Nov. 1, 1986.
§18549. Charitable and educational corporations may engage in business.
Any corporation heretofore or hereafter organized under the laws of the State of Oklahoma for charitable or educational purposes may maintain and carry on any and all kinds of business enterprises that an individual or corporation may lawfully carry on under the laws of the State of Oklahoma as auxiliary enterprises and may do so either directly or through any other corporation or corporations, a majority of whose stock it lawfully owns, in order that additional funds may be obtained with which to carry out only the charitable or educational purposes of such corporation.
Amended by Laws 1983, c. 100, § 8, emerg. eff. May 9, 1983.
§18550. Power to borrow money and incur indebtedness Mortgage or pledge of property Liability of property to taxation.
Any such charitable or educational corporation may borrow money and incur debts either for its principal purposes, or for the furtherance of any or all its business enterprises or both. In case money is borrowed to aid any corporation, a majority of whose stock is lawfully owned by such charitable or educational corporation, it may loan or advance the same to such controlled corporation on such terms as may seem advisable to its trustees. Any such charitable or educational corporation so borrowing money to aid any other corporation as aforesaid, may evidence its indebtedness by notes or bonds and secure their payment by mortgaging and pledging all or any part of its property, real, personal and mixed, except the real estate, buildings and personal property consisting of household goods, farm implements and domestic animals used for the ordinary conduct and operation of the institution of such corporations, which lastnamed property shall never be liable, or in any manner taken for indebtedness, charge or lien of any nature whatsoever contracted by such corporation, to aid another corporation as aforesaid, provided that if any charitable or educational corporation shall maintain or carry on any auxiliary business under the terms of Section 549 of this title, either directly or through any other corporation or corporations, such fact shall be held to be an agreement on its part and on the part of such other corporation or corporations that all property owned by, devoted to, or used in such auxiliary business hereunder, shall be subject to taxation for all purposes in the same manner as taxable property generally and that such property shall not be exempt from taxation by reason of the fact that the revenues or profits or a portion thereof, are used or intended to be used as additional funds for carrying out the charitable or educational purposes of such corporation or for reinvestment by or in behalf of such charitable or educational corporation; and it is hereby declared that no such property shall be exempt from taxation; and provided, further, that the real estate, buildings, and personal property consisting of household goods, farming implements and domestic animals necessary for the ordinary conduct and operation of such charitable or educational corporations, shall be exempt from taxation.
Amended by Laws 1983, c. 100, § 9, emerg. eff. May 9, 1983.
§18552.1. Citation.
This act may be cited as the Oklahoma Solicitation of Charitable Contributions Act.
Laws 1959, p. 88, § 1.
§18-552.2. Definitions.
As used in this act:
1. "Person" means any individual, organization, group, association, partnership or corporation;
2. "Charitable organization" means any philanthropic, patriotic, eleemosynary, educational, social, civic, recreational, religious or any other person performing or purporting to perform acts beneficial to the public;
3. "Contribution" means the promise or grant of any money or property of any kind or value;
4. "Professional fund raiser" means any person who for compensation or other consideration plans, conducts or manages in this state the solicitation of contributions for or on behalf of any charitable organization or any other person, or who engages in the business of or holds himself out to persons in this state as independently engaged in the business of soliciting contributions for such purpose;
5. "Professional solicitor" means any person who is employed or retained for compensation or other consideration of any kind whatsoever by a professional fund raiser to solicit contributions in this state for or on behalf of any charitable organization or any other person; and
6. "Professional fund raising counsel" means an entity that, alone or through its employees and agents, provides services for compensation to a charitable organization in the solicitation of contributions, including, but not limited to, planning, managing, or preparing materials to be used in conjunction with any solicitation; provided, that the entity does not:
a. directly or indirectly solicit contributions alone or through its employees and agents, or
b. receive, have access to, or control any contribution generated by the solicitation activity.
Amended by Laws 1983, c. 100, § 10, emerg. eff. May 9, 1983; Laws 1999, c. 421, § 1, eff. Nov. 1, 1999.
§18-552.3. Registration - Fee - Information to be filed - Out-of-state organizations.
A. No charitable organization, except those specifically exempt under Section 552.4 of this title, shall solicit or accept contributions from any person in this state by any means whatsoever until the charitable organization shall have registered with the Office of the Secretary of State and filed information, as required by this act, on forms approved by that office. At the time of registration, each charitable organization shall pay a fee of Fifteen Dollars ($15.00), which shall be deposited to the General Revenue Fund of the State Treasury. Registration shall be valid for a period of one (1) year from the date of filing with the Secretary of State, and shall be subject to annual renewal. This registration shall not be deemed to constitute endorsement by the state or by the Secretary of State of the charitable organizations so registered. The information so filed shall be available to the general public as a matter of public record. The forms containing the information shall be signed and acknowledged by a party duly authorized to sign on behalf of the charitable organization and shall include the following:
1. The legal name of the charitable organization, any other name the organization may be identified as or known as, and any distinctive names the organization uses for purposes of public solicitation;
2. The street address and the mailing address, if different, of the charitable organization;
3. The name and street address of:
a. each officer, including each principal salaried executive staff officer,
b. each director,
c. each trustee,
d. each person who will have custody of the contributions, and
e. each person responsible for the distribution of funds collected;
4. The purposes for which the contributions solicited or accepted are to be used; provided, however, no contribution or any portion thereof shall inure to the private benefit of any voluntary solicitor;
5. A copy of Internal Revenue Form 990 as filed by the charitable organization for the most recently completed fiscal year; or, for the initial registration of a newly formed organization, a copy of a letter from the Internal Revenue Service, or other evidence, showing the tax exempt status of the charitable organization;
6. The period of time during which the solicitation is to be conducted;
7. A description of the specific method or methods of solicitation;
8. Whether the solicitation is to be conducted by voluntary unpaid solicitors, by paid solicitors, or both;
9. If in whole or in part by paid solicitors, the name and address of each professional fund-raiser supplying the solicitors, which includes any professional fund-raising counsel who is acting or has agreed to act on behalf of the organization; the basis of payment and the nature of the arrangement, including a copy of the contract or other agreement between the charitable organization and the professional fund-raiser or fund-raising counsel relating to financial compensation or profit to be derived by the fund-raisers or fund-raising counsel, the specific amount or percentage of compensation, or property of any kind or value to be paid or paid to the professional fund-raiser, the percentage value of compensation as compared:
a. to the total contributions received, and
b. to the net amount of the total contributions received; and
10. Additional information as may be deemed necessary and appropriate by the Secretary of State in the public interest or for the specific protection of contributors.
B. Any fraternal or membership organization not based in Oklahoma which solicits contributions from any person of this state by telephone, or contracts with professional fund-raisers to solicit such contributions, shall be required to have at least one member or employee of the fraternal or membership organization residing within the county where the call is received.
Added by Laws 1959, p. 88, § 3, emerg. eff. May 8, 1959. Amended by Laws 1976, c. 200, § 1, emerg. eff. June 4, 1976; Laws 1978, c. 244, § 2, eff. July 1, 1978; Laws 1980, c. 364, § 1, eff. Oct. 1, 1980; Laws 1984, c. 79, § 1, emerg. eff. April 3, 1984; Laws 1991, c. 320, § 1, eff. Sept. 1, 1991; Laws 1994, c. 235, § 9, eff. Sept. 1, 1994; Laws 1997, c. 334, § 1, eff. July 1, 1997; Laws 1999, c. 421, § 2, eff. Nov. 1, 1999; Laws 2000, c. 6, § 2, emerg. eff. March 20, 2000; Laws 2005, c. 366, § 1, emerg. eff. June 6, 2005.
NOTE: Laws 1999, c. 377, § 2 repealed by Laws 2000, c. 6, § 33, emerg. eff. March 20, 2000.
§18-552.3a. Execution and acknowledgement of registration.
Every registration instrument required to be filed with the Secretary of State pursuant to the Oklahoma Solicitation of Charitable Contributions Act shall be executed and acknowledged as follows:
1. By formal acknowledgment of the person or persons signing the instrument that it is that person's act and deed or the act and deed of the organization, and that the facts stated therein are true. The acknowledgment shall be made before a person who is authorized by the law of the place of execution to take acknowledgments of deeds and if that person has a seal of office, that person shall affix it to the instrument; or
2. By signature, without more, of the person or persons signing the instrument, in which case the signature or signatures shall constitute the affirmation or acknowledgment of the signatory, under penalties of perjury, that the instrument is that person's act and deed or the act and deed of the organization, and that the facts stated therein are true.
Added by Laws 1999, c. 421, § 3, eff. Nov. 1, 1999.
§18552.4. Persons and organizations exempt.
Except as otherwise specifically provided in this act, the provisions of Sections 552.3 and 552.5 of this title shall not apply to the following persons:
(1) Organizations incorporated for religious purposes and actually engaged in bona fide religious programs, and other organizations directly operated, supervised, or controlled by a religious organization;
(2) Educational institutions which have a faculty, regularly enrolled students and offer courses of study leading to the granting of recognized degrees when solicitations of contributions are confined to its student body and their families, alumni, faculty and trustees;
(3) Fraternal organizations, when soliciting from their own members, and patriotic and civic organizations, when solicitation of contributions is confined to the membership of said organizations, and the solicitation is managed by their own membership without paid solicitors;
(4) Persons soliciting contributions for a named individual person, when such individual person is specified by name at the time of solicitation, the purpose for such contribution is clearly stated, and if the gross contributions collected, without any deductions whatsoever for the benefit of the solicitor or any other person, be deposited directly to an account in the name of the beneficiary established for that purpose at a licensed local bank, and if such contributions are used for the direct benefit of the named individual person as beneficiary; and
(5) Any organization which collects from charitable solicitations less than Ten Thousand Dollars ($10,000.00) per year.
Laws 1959, p. 89, § 4; Laws 1974, c. 70, § 1; Laws 1980, c. 364, § 2, eff. Oct. 1, 1980.
§18-552.5. Financial statement - Initial registration and annual renewals - Name and address changes.
A. Every charitable organization subject to the provisions of Section 552.1 et seq. of this title which has received contributions during the previous calendar year shall file a statement with the Secretary of State, executed and signed by a party duly authorized to act on behalf of the charitable organization, which contains the most recent information, as follows:
1. The name, street address, and telephone number of the charitable organization;
2. The gross amount of the contributions pledged or collected;
3. The gross amount given or to be given to the charitable purpose represented;
4. The aggregate amount paid and to be paid for the expenses of solicitation; and
5. The aggregate amount paid to and to be paid to professional fund raisers and solicitors.
B. The financial statement prescribed in subsection A of this section shall be submitted with the initial registration, and with each annual renewal, thereafter.
C. Every charitable organization registered with the Secretary of State to solicit contributions in the State of Oklahoma which shall change its name or the mailing address of its principal office, prior to its annual renewal date shall file with the Secretary of State a statement executed by an authorized officer of the organization setting forth its new name and/or mailing address and pay a filing fee of Fifteen Dollars ($15.00).
Added by Laws 1959, p. 89, § 5, emerg. eff. May 8, 1959. Amended by Laws 1978, c. 244, § 3, eff. July 1, 1978; Laws 1984, c. 79, § 2, emerg. eff. April 3, 1984; Laws 1994, c. 235, § 10, eff. Sept. 1, 1994; Laws 1997, c. 334, § 2, eff. July 1, 1997; Laws 1999, c. 421, § 4, eff. Nov. 1, 1999; Laws 2001, c. 406, § 6, emerg. eff. June 4, 2001.
§18-552.6. Records - Inspection.
Every charitable organization shall keep a full and true record in such form as will enable such charitable organization to accurately provide the information required herein. All records required hereunder shall be open to inspection at all times by the Office of the Secretary of State and its employees, and upon demand shall be presented to that office for inspection.
Added by Laws 1959, p. 89, § 6, emerg. eff. May 8, 1959. Amended by Laws 1978, c. 244, § 4, eff. July 1, 1978; Laws 1984, c. 79, § 3, emerg. eff. April 3, 1984; Laws 1994, c. 235, § 11, eff. Sept. 1, 1994; Laws 1997, c. 334, § 3, eff. July 1, 1997.
§18-552.7. Professional fund raisers - Registration - Fees - Bond - Name and address changes.
A. No person shall act as a professional fund-raiser for any charitable organization, including those organizations listed under Section 552.4 of this title, until the person has first registered with the Office of the Secretary of State. Applications for registrations, signed and acknowledged by a party duly authorized to act on behalf of the fund-raiser, shall state the full, legal name of the professional fund-raiser, the street address of the principal place of business of the fund-raiser, the full, legal names and street addresses of the charitable organizations with which it has entered into contracts or agreements, and shall be accompanied by an annual fee in the sum of Fifty Dollars ($50.00), to be deposited to the General Revenue Fund of the State Treasury. The applicant shall, at the time of making application, file with the Secretary of State a bond in which the applicant shall be the principal obligor, in the sum of Two Thousand Five Hundred Dollars ($2,500.00), with one or more sureties whose liability in the aggregate as sureties shall at least equal that sum. The bond shall run to the Secretary of State for the use of the state and to any person, including a charitable organization, who may have a cause of action against the obligor of the bond for any malfeasance or misfeasance of the obligor or any professional solicitor employed by him or her in the conduct of the solicitation. Registration shall be valid for a period of one (1) year from the date of filing with the Secretary of State, and may be renewed annually upon the filing of a renewal application accompanied by the bond and fee prescribed herein.
B. No professional fund-raiser or solicitor shall engage in fund-raising activities for a charitable organization which is not registered with the Secretary of State unless the organization is exempt from registration.
C. Every professional fund-raiser registered with the Secretary of State which shall change its name or the mailing address of its principal office, prior to its annual renewal date shall file with the Secretary of State a statement executed by an authorized officer of the organization setting forth its new name or mailing address and pay a filing fee of Twenty-five Dollars ($25.00).
Added by Laws 1959, p. 90, § 7, emerg. eff. May 8, 1959. Amended by Laws 1978, c. 244, § 5, eff. July 1, 1978; Laws 1984, c. 79, § 4, emerg. eff. April 3, 1984; Laws 1994, c. 235, § 12, eff. Sept. 1, 1994; Laws 1997, c. 334, § 4, eff. July 1, 1997; Laws 1999, c. 421, § 5, eff. Nov. 1, 1999; Laws 2000, c. 6, § 3, emerg. eff. March 20, 2000; Laws 2001, c. 406, § 7, emerg. eff. June 4, 2001.
NOTE: Laws 1999, c. 325, § 7 and Laws 1999, c. 377, § 3 repealed by Laws 2000, c. 6, § 33, emerg. eff. March 20, 2000.
§18-552.8. Contracts.
All contracts or other agreements entered into by professional fund raisers and charitable organizations shall be in writing and true and correct copies thereof shall be kept on file in the offices of the charitable organization and the professional fund raiser for a period of three (3) years from the date of solicitation of contributions provided for therein actually commences. These contracts shall be available for inspection and examination by the Office of the Secretary of State and other authorized agencies. At least one copy of every contract or other agreement shall be on file at all times in that office and shall be available to the general public as a matter of public record.
Added by Laws 1959, p. 90, § 8, emerg. eff. May 8, 1959. Amended by Laws 1978, c. 244, § 6, eff. July 1, 1978; Laws 1984, c. 79, § 5, emerg. eff. April 3, 1984; Laws 1994, c. 235, § 13, eff. Sept. 1, 1994; Laws 1997, c. 334, § 5, eff. July 1, 1997; Laws 1999, c. 421, § 6, eff. Nov. 1, 1999.
§18-552.9. Professional solicitors - Registration - Fees.
Every professional solicitor employed or retained by a professional fund raiser required to register shall, before accepting employment by the professional fund raiser, register with the Office of the Secretary of State. An application for registration, signed by the solicitor and acknowledged, shall state the full, legal name and street address of the professional fund raiser that employs the solicitor and shall be accompanied by a fee in the sum of Ten Dollars ($10.00), to be deposited to the General Revenue Fund of the State Treasury. Registration shall be for a period of one (1) year from the date of filing by the Secretary of State, and may be renewed annually upon the filing of a renewal application accompanied by a payment of the fee prescribed herein.
Added by Laws 1959, p. 90, § 9, emerg. eff. May 8, 1959. Amended by Laws 1978, c. 244, § 7, eff. July 1, 1978; Laws 1984, c. 79, § 6, emerg. eff. April 3, 1984; Laws 1994, c. 235, § 14, eff. Sept. 1, 1994; Laws 1997, c. 334, § 6, eff. July 1, 1997; Laws 1999, c. 421, § 7, eff. Nov. 1, 1999; Laws 2000, c. 6, § 4, emerg. eff. March 20, 2000.
NOTE: Laws 1999, c. 377, § 4 repealed by Laws 2000, c. 6, § 33, emerg. eff. March 20, 2000.
§18552.10. Duplicate receipts.
Every person soliciting or accepting funds for charitable purposes shall issue a receipt in duplicate when the amount of such contribution exceeds the sum of Two Dollars ($2.00). The original receipt shall be given to the donor and the copy shall be forwarded to the charitable organization and retained for a period of three (3) years.
Laws 1959, p. 90, § 10.
§18552.11. Use of names without consent Similar names prohibited Penalties.
A. 1. No charitable organization, professional fund raiser, or professional solicitor seeking to raise funds for charitable purposes shall use the name of any other person (except that of an officer, director or trustee of the charitable organization by or for which contributions are solicited) for the purpose of soliciting contributions in this state without the written consent of such other person. Nothing herein contained shall prevent the publication of names of contributors, without their written consent, in an annual or other periodic report issued by a charitable organization for the purpose of reporting to its membership or for the purpose of reporting contributions to contributors.
2. No charitable organization soliciting or accepting contributions shall use a name so closely related or similar to other charitable organizations or governmental agencies or subdivisions that the use thereof would tend to confuse or mislead the public.
B. Any person who uses the name of or a name deceptively similar to any other person, charitable organization, professional fund raiser, professional solicitor or governmental agency or subdivision to solicit or accept contributions, money or property under false pretense, representation or promise, upon conviction, shall be guilty of a felony and punished by a fine not more than Ten Thousand Dollars ($10,000.00) or by imprisonment for not more than five (5) years, or by both such fine and imprisonment.
Added by Laws 1959, p. 90, § 11, emerg. eff. May 8, 1959. Amended by Laws 1986, c. 88, § 1, eff. Nov. 1, 1986; Laws 1997, c. 133, § 141, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 67, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 141 from July 1, 1998, to July 1, 1999.
§18552.12. Use of names on stationery, advertisements, etc.
It shall be deemed to be a violation of this act to use the name of any person (except that of an officer, director, or trustee of the charitable organization by or for which contributions are solicited) for the purpose of soliciting contributions if such person's name is listed on any stationery, advertisement, brochure or correspondence in or by which a contribution is solicited by or on behalf of a charitable organization or his name is listed or referred to in connection with a request for a contribution as one who has contributed to, sponsored, or endorsed the charitable organization or its activities.
Laws 1959, p. 91, § 12.
§18-552.13. Reciprocal agreements with other states.
The Secretary of State may enter into reciprocal agreements with a like authority of any other state or states for the purpose of exchanging information made available to the Secretary of State. Pursuant to such agreements the Secretary of State may accept information filed by a charitable organization with another state in lieu of the information required to be filed by a charitable organization in accordance with the provisions of Section 552.3 of this title, if such information is substantially similar to the information required to be filed under Section 552.3 of this title.
Added by Laws 1959, p. 91, § 13, emerg. eff. May 8, 1959. Amended by Laws 1978, c. 244, § 8, eff. July 1, 1978; Laws 1984, c. 79, § 7, emerg. eff. April 3, 1984; Laws 1994, c. 235, § 15, eff. Sept. 1, 1994; Laws 1997, c. 334, § 7, eff. July 1, 1997.
§18-552.14. Prosecutions - Injunctions.
A. An action for violation of this act may be prosecuted by any district attorney of this state or by the Attorney General.
Whenever a district attorney or the Attorney General of this state shall have reason to believe that any person, charitable organization, professional fund raiser or professional solicitor is operating in violation of these provisions or there is employed or is about to be employed in any solicitation or collection of contributions for a charitable organization any device, scheme or artifice to defraud or for obtaining money or property by means of any false pretense, representation or promise, in addition to any other action authorized by law, he or she shall institute in any district court of this state an injunctive action in the name and on behalf of the people of the state against such person or charitable organization and any other person who has participated or is about to participate in such solicitation or collection by employing such device, scheme, artifice, false representation or promise. Said action shall be for the purpose of enjoining such person or charitable organization or other participant from continuing such solicitation or collecting or engaging therein or doing any acts in furtherance thereof, or to cancel any registration statement previously filed with the Office of the Secretary of State.
B. Any district attorney or the Attorney General shall exercise the authority granted in this section against any charitable organization which operates under the guise or pretense of being an organization exempted by the provisions of Section 552.4 of this title and is not in fact an organization entitled to such exemption.
Added by Laws 1959, p. 91, § 14, emerg. eff. May 8, 1959. Amended by Laws 1978, c. 244, § 9, eff. July 1, 1978; Laws 1984, c. 79, § 8, emerg. eff. April 3, 1984; Laws 1986, c. 88, § 2, eff. Nov. 1, 1986; Laws 1994, c. 235, § 16, eff. Sept. 1, 1994; Laws 1997, c. 334, § 8, eff. July 1, 1997.
§18552.15. Service of process upon Secretary of State.
Any charitable organization, professional fund raiser or professional solicitor, resident or having his or its principal place of business without the State of Oklahoma or organized under and by virtue of the laws of a foreign state who or which shall solicit contributions from people in this state, shall be deemed to have irrevocably appointed the Secretary of State as his or its agent upon whom may be served any summons, subpoena, subpoena duces tecum or other process directed to such charitable organization, or any partner, principal, officer, or director thereof or to such professional solicitor, in any action or proceeding brought by the Attorney General under the provisions of this act. Service of such process upon the Secretary of State shall be made by personally delivering to and leaving with him or an assistant Secretary of State a copy thereof at the office of the Secretary of State in the city of Oklahoma City, and such service shall be sufficient service provided that notice of such service and a copy of such process are forthwith sent by the Attorney General to such charitable organization, professional fund raiser or professional solicitor by registered mail with return receipt requested, at his or its office as set forth in the registration form required to be filed by this act or, in default of the filing of such form, at the last address known to the Attorney General. Service of such process shall be complete ten (10) days after the receipt by the Attorney General of a return receipt purporting to be signed by the addressee or a person qualified to receive his or its registered mail, in accordance with the rules and customs of the post office department, or, if acceptance was refused by the addressee or his or its agent, ten (10) days after the return to the Attorney General of the original envelope bearing a notation by the postal authorities that receipt thereof was refused.
Laws 1959, p. 91, § 15.
§18552.16. Powers and duties not restricted.
This act shall not be construed to limit or to restrict the exercise of the powers or the performance of the duties of the Attorney General or of any county attorney of this state which they otherwise are authorized to exercise or perform under any other provision of law.
Laws 1959, p. 92, § 16.
§18552.17. Nonexemption from ordinances and restrictions of political subdivisions.
The provisions of this act shall not exempt any person from any ordinances and restrictions of political subdivisions of this state regulating solicitations for charitable purposes.
Laws 1959, p. 92, § 17.
§18552.18. Penalties.
Any person who solicits or attempts to solicit any contribution as a charitable organization or for a charitable purpose by means of knowingly false or misleading representation, advertisement or promise or any person violating the provisions of this act, including the filing of false information hereunder, shall lose its status as a taxexempt organization, and shall be taxed in the same manner and at the same rate as any other corporation, and shall upon conviction be guilty of a felony punishable by a fine not to exceed One Thousand Dollars ($1,000.00) or by imprisonment in the State Penitentiary for not more than two (2) years, or by both such fine and imprisonment, and every officer or agent of a charitable organization who authorizes or conducts illegal solicitations shall be jointly and severally liable for such fine.
Added by Laws 1959, p. 92, § 18. Amended by Laws 1976, c. 200, § 2, emerg. eff. June 4, 1976; Laws 1980, c. 364, § 3, eff. Oct. 1, 1980; Laws 1997, c. 133, § 142, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 68, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 142 from July 1, 1998, to July 1, 1999.
§18553.1. Solicitation under certain promises prohibited.
It shall be unlawful for any person, organization, group, association, partnership, corporation, or combination thereof, to conduct or carry on any drive for, or to solicit or invite, contributions of funds for the purpose of or under the guise or representation or promise of being able to secure old age or other assistance for any person, under any state or federal law, or of securing for such person or persons higher or additional assistance.
Laws 1959, p. 220, § 1; Laws 1978, c. 244, § 10, eff. July 1, 1978.
§18553.2. Solicitations by regulated organizations not prohibited.
Provided that nothing in this act shall be construed to prohibit solicitations or other activity by any organization whose activities are regulated by any law or laws of the federal government or any professional organization of the State of Oklahoma.
Laws 1959, p. 221, § 2.
§18553.3. Penalties.
Any violation of the provisions of Sections 553.1 and 553.2 of this title shall constitute a felony and any person guilty thereof shall, upon conviction, be fined not more than Ten Thousand Dollars ($10,000.00) and may be confined in the State Penitentiary for a period of not to exceed ten (10) years, or by both such fine and imprisonment. Any such prohibited communication by any agent or servant of a corporation shall subject such corporation to the fine above specified in addition to whatever penalty is imposed upon such agent or servant. Any corporation may be enjoined in the manner provided in Section 12, Chapter 70, Title 21, Page 193, Oklahoma Session Laws 1955, when any of the conditions herein set forth are found to exist with respect to a violation of this act, or it may be subject to the cancellation therein specified.
Added by Laws 1959, p. 221, § 3. Amended by Laws 1997, c. 133, § 143, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 69, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 143 from July 1, 1998, to July 1, 1999.
§18561. Trustees of religious corporations, selection.
The board of trustees, or other officers of any religious corporation, may be chosen at such times and in such manner as may be in conformity to the rules, usage or general discipline of such corporation.
R.L.1910, § 1467.
§18-562. Alternative articles for religious association - Recording - Powers.
The members of any church or religious society, not less than three, who by its rules, usage and general discipline, or otherwise, do not desire to organize and become incorporated under the foregoing provisions relating to corporations may organize and become corporate, capable of suing and being sued, holding, purchasing and receiving title to real estate and other property by devise, gift, grant or other conveyance, with power to mortgage, sell or convey the same or any part, parcel or portion thereof, by adopting and signing articles containing:
First. The name of the church, society, association or corporation, its general purpose and plan of operation and its place of location.
Second. The terms of admission and qualifications of membership, and the selection of officers and the filling of vacancies, and the manner in which the same is to be governed and managed. Such articles shall be filed in the office of the Secretary of State and a filing fee of Twenty-five Dollars ($25.00) shall be paid to the Secretary of State. The articles shall also be filed in the office of the register of deeds of the county in which such church, society, association or corporation is located; and thereupon such church, society, association or corporation shall have all the powers hereinbefore provided, and may adopt and establish bylaws and make all rules and regulations deemed necessary and expedient for the management of its affairs in accordance with law.
R.L. 1910, § 1468. Amended by Laws 1996, c. 69, § 1, eff. Nov. 1, 1996.
§18563. Title vests in successors in trust.
All grants or deeds from private individuals, or acts of legislative bodies, transferring, conveying or granting real estate in this state to any bishop, dean, rector, vestryman, deacon, director, minister or any other officer or officers of any church or organized religious society in trust for the use and benefit of such society of which they are such officer or officers, which have been or may be made, done or executed, shall vest in their successor or successors in office, or other officer which such society may at any time designate, all the legal or other title, to the same extent and in all respects the same, as trustee of such trust, for the use and benefit of such society, which such bishop, dean, rector, vestryman, deacon, director, minister or other officer or officers, had under such grant, deed or act; and all transfers or sales made by such officer or officers so acquiring title by virtue of this article, by succession in office shall have all the validity, force and effect that it would have had had it been made by such bishop, dean, rector, vestryman, deacon, director, minister or other officer or officers, while holding under and by virtue of such grant, deed or act of such legislative body.
R.L.1910, § 1469.
§18564.1. Extinct church, religious corporation, etc. Preservation and protection of property.
The property, both real and personal, belonging to or held in trust by or for any church, religious corporation, association, organization, or society, that has or shall become extinct, or that has or shall cease to function and use its property, shall be preserved and protected from waste and dilapidation.
Laws 1943, p. 39, § 1.
§18564.2. Association, etc. of same denomination or creed to have jurisdiction.
If there is no superior body, presbytery, synod, conference, diocese, convention, or other ecclesiastical body having jurisdiction to take charge of, protect and preserve such property, then, any statewide religious association, organization, society, or corporation of the same or similar denomination, faith, creed, practice or doctrine, shall have and is hereby given jurisdiction to take charge of and preserve such property.
Laws 1943, p. 39, § 2.
§18564.3. Petition to district court Final order Transfer of title and possession.
When the condition of being extinct or of ceasing to function and use its property has existed for two (2) years or longer, and there is no superior body having jurisdiction, the district court of any county where any such property is located, upon petition therefor, after the notice hereinafter provided, and, after hearing and inquiry into the merits, shall make a final order, declaring such church or society extinct and dissolving the same; and shall make a final order transferring the title and possession of all property which may belong to such church or society or which may be held in trust for such church or society to a statewide religious association, organization, society, or corporation of the same or similar denomination, faith, creed, practice, or doctrine.
Laws 1943, p. 39, § 3.
§18564.4. Notice of hearing.
Notice of hearing of said petition shall be given by publication in a newspaper published in the town or city where the church or religious organization was located if there be one, and if there be none, then in a newspaper at the county seat of the county, for two (2) consecutive weekly issues, the first publication being at least fifteen (15) days prior to the day of the hearing.
Laws 1943, p. 39, § 4.
§18564.5. Lien or reversionary interest not affected.
This act shall not affect or impair any valid lien or any reversionary interest.
Laws 1943, p. 39, § 5.
§18571. School property How held.
Any corporation formed for the purpose of establishing an institution of learning shall hold the property of the institution solely for the purpose of education, and not for the individual benefit of itself or any contributor to the endowment thereof.
R.L.1910, § 1470.
§18572. Objects of expenditure.
The trustees or directors of any such corporation shall faithfully apply all the funds collected, or the proceeds of the property belonging to the institution, according to their best judgment, in erecting, completing or repairing suitable buildings, in supporting necessary officers, instructors, agents and employees, and in procuring books, maps, charts, globes and philosophical, chemical and other apparatus or cabinets, necessary to the objects and success of the institution; and all donations, devises or bequests made to it for particular purposes when accepted, shall be applied in conformity with the express condition of the donor or devisor.
R.L.1910, § 1471.
§18573. Powers of corporation.
Such corporation has power to appoint a president or principal for the institution, and such professors, tutors and other agents and officers, as may be necessary, and to displace any of them as the interests of the institutions may require; to fill vacancies, to prescribe and direct the course of studies and the discipline to be pursued and observed in the institution, and the rates of tuition in the same; and the president and professors shall constitute the faculty of such institution; and they have power to enforce the rules and regulations enacted for the government and discipline of the students, and to suspend and expel offenders, as may be deemed expedient.
R.L.1910, § 1472.
§18574. Degrees conferred.
Every such corporation having the rank of a college or university, has power to confer, on the recommendation of the faculty, all such degrees or honors as are usually conferred by colleges and universities in the United States, and such others, having reference to the course of studies and the worth and accomplishment of the student, as may be deemed proper.
R.L.1910, § 1473.
§18575. Mechanics and agriculture.
Such corporation may connect with its institution, to be used as a part of its course of education, any mechanical shops or machinery, or lands for agricultural purposes, not exceeding three hundred and twenty (320) acres, to which may be attached all necessary buildings for carrying on the mechanical and agricultural purposes of such institution.
R.L.1910, § 1474.
§18581. Benevolent and charitable corporations Purposes.
The following associations for charitable purposes may become incorporated, as provided in this article, as follows:
1. To establish and maintain hospitals and infirmaries for the cure of the sick and support of the aged and indigent, and asylums for orphans;
2. For the mutual assistance of the members in time of sickness or necessity, and to provide a fund for this purpose by contributions of the members thereof from time to time, and for the like incidental charitable purposes;
3. To establish and maintain lodges, chapters and encampments, of fraternities or associations commonly known as Free Masons, the Independent Order of Odd Fellows, Good Templars, Sons of Temperance, and other like charitable orders or societies;
4. To establish and maintain fire companies in any incorporated city or town; and
5. To establish and maintain youth organizations to promote the ideals of good sportsmanship, honesty, loyalty, courage and reverence by providing supervised competitive athletic games.
Amended by Laws 1983, c. 100, § 11, emerg. eff. May 9, 1983.
§18582. Transfer of membership.
Any regularly incorporated fraternal beneficiary society shall, on application of its governing body, be permitted to transfer its membership to any other society doing business in this state, and such membership may be accepted without restriction, upon age limit and without new medical examination on the part of the membership so transferred where the entrance age limit of fiftyfive (55) years and a medical examination was required and made by the society so transferring its membership.
R.L.1910, § 1476.
§18583. Fraternal beneficiary societies Change of name.
Any fraternal beneficiary society incorporated under the laws of this state may change its corporate name on application by its governing body to the Insurance Commissioner of the state. The name selected shall not be such as will appear to be so near the name of any other association or society now doing business in this state as to cause confusion in the minds of the people, or to interfere with the corporate name of such existing association or corporation. On the approval of the Insurance Commissioner the Secretary of State shall cause an amended charter to issue, signed by the Governor and attested by the seal of state, changing the name of such beneficiary society in accordance with the recommendation of the Insurance Commissioner, and such change of name shall have the same effect as if originally set forth in the original articles of incorporation.
R.L.1910, § 1477.
§18584. Use of society name exclusive.
No person, society, association or corporation shall assume, adopt or use the name of a humane, fraternal or charitable organization, incorporated under the laws of this or of any other state of the United States, or a name so nearly resembling the name of such incorporated organization as to be a colorable imitation thereof, or calculated to deceive persons not members, with respect to such corporation. In all cases where two or more of such societies, associations or corporations claim the right to the same name, or to names substantially similar as above provided, the organization which was first organized and used the name, and first became incorporated under the laws of the United States or of any state of the Union, shall be entitled in this state to the prior and exclusive use of such name, and the rights of such societies, associations or corporations, and of their individual members shall be fixed and determined accordingly.
Amended by Laws 1983, c. 100, § 12, emerg. eff. May 9, 1983.
§18585. Persons not entitled to wear insignia, use name or claim membership.
No person shall wear or exhibit the badge, button, emblem, decoration, insignia or charm or shall assume or use the name of any humane, fraternal or charitable corporation, incorporated under the laws of this or any other state or of the United States or shall assume or claim to be a member thereof, or of a humane, fraternal or charitable corporation, the name of which shall so nearly resemble the name of any other corporation existing prior to the organization of the corporation or association of which such person may claim to be a member, the name whereof may be calculated to deceive the people with respect to any such prior corporation, unless he shall be authorized under the laws, statutes, rules, regulations and bylaws of such former corporation, to wear such badge, button, emblem, decoration, insignia or charm, or to use and assume such name as a member thereof.
Amended by Laws 1983, c. 100, § 13, emerg. eff. May 9, 1983.
§18586. Violation enjoined.
Whenever there shall be an actual or threatened violation of Sections 584 and 585 of this title, an application may be made to the court or judge having jurisdiction, to issue an injunction upon notice to the defendant of not less than five (5) days, for an injunction so restraining such actual or threatened violation, or if it shall appear to such court or justice that the defendant is in fact using the name of a humane, fraternal or charitable corporation, incorporated as aforesaid, or a name so nearly resembling it as to be calculated to deceive the public, or is wearing or exhibiting the badge, insignia or emblem of such corporation without authority thereof, and in violation of Sections 584 and 585 of this title, an injunction may be issued by said court or justice, enjoining or restraining such actual or threatened violation, without requiring proof that any person has in fact been misled or deceived thereby.
Amended by Laws 1983, c. 100, § 14, emerg. eff. May 9, 1983.
§18587. Penalty.
Any person violating the provisions of Sections 1478 and 1479 of this article, shall be deemed guilty of a misdemeanor, and upon upon conviction thereof, shall be fined not exceeding Fifty Dollars ($50.00), or imprisoned in the county jail not exceeding thirty (30) days, or may be punished by both such fine and imprisonment.
R.L. 1910, § 1481.
§18588. Benevolent corporations may own real or personal property.
Any charitable corporation, including chartered fraternal, grand and subordinate lodges and societies, are hereby empowered to receive, either by way of gift, purchase, grant, devise or by will, real or personal property, and to hold the same, and to dispose of the same in the carrying out of the purposes of the corporation, society or lodge.
Amended by Laws 1983, c. 100, § 15, emerg. eff. May 9, 1983.
§18589. Charter as benevolent corporation Trustees Bylaws.
Before being competent to so receive such property, such society shall obtain a charter as a charitable corporation in the manner provided by law from the Secretary of State, and elect trustees, who may be the same trustees already elected under their fraternal rules, and whose bylaws may, so far as they do not contravene the statute laws of the state, be substituted for the bylaws required to be adopted upon obtaining a charter.
Amended by Laws 1983, c. 100, § 16, emerg. eff. May 9, 1983.
§18590. Community fund or chest corporations Notice of meetings Quorum.
Any corporation organized under the laws of this state as a community fund or community chest, or that may hereafter be so organized, may give notice of the time and place of any regular or special meeting of its members by publication for not less than two (2) weeks previous thereto in a newspaper of general circulation in the city or town where the principal office or place of business of the corporation is located. At any such regular or special meeting, the members present in person shall constitute a quorum, and a vote of a majority of such quorum shall be sufficient to transact any or all business properly before such meeting, including the adoption or amendment of bylaws.
Laws 1945, p. 48, § 1.
§18591. Community fund or chest corporations Amendment of articles of incorporation.
Any community fund or community chest corporation organized under the laws of this state for which a charter has been issued may amend its articles of incorporation in any particular competent to have been embodied or inserted in the original articles of incorporation of such company, including any provision authorized by this act. In order to amend its articles of incorporation, it shall be necessary for such amendment to have been authorized at any regular meeting of its members, or at a special meeting of such members called for the purpose of making such amendment. When so authorized, new articles signed by the president and secretary of the corporation and entitled "Amended Articles of Incorporation" shall be filed with the Secretary of State, who upon the payment of the fees provided by Section 541, of Title 18, O.S. 1951, shall cause an amended charter to issue, signed by him as Secretary of State and attested by the seal of the state, for which date the amendment shall relate back and be considered a part of the original articles of incorporation to the same effect as if originally set forth therein.
Laws 1945, p. 48, § 2.
§18592. Fire departments for unincorporated areas Incorporation.
The authority of persons associated together to become incorporated as a charitable corporation for the purpose of providing either a volunteer or fulltime fire department for an unincorporated area or place is hereby ratified and confirmed. Such a corporate fire department shall have authority to provide fire protective service both to its members and to nonmembers, either within or without the unincorporated area wherein it is situated.
Amended by Laws 1983, c. 100, § 17, emerg. eff. May 9, 1983.
§18593. Fire departments for unincorporated areas Service fees Insurance.
A. Any charitable corporation formed for the purpose of providing either a volunteer or a fulltime fire department, pursuant to Section 592 of this title, shall have authority to establish a reasonable schedule of fees to be charged for its services in extinguishing fires of its members and nonmembers who utilize such fire department to extinguish or control a fire either within or without the unincorporated area wherein it is situated. Such schedule of fees may contain one fee for members and another fee for nonmembers, except that no fee shall be established in excess of the approximate cost of providing the service. Any member or nonmember utilizing the services of such a fire department to extinguish or control a fire shall be liable to said corporation in the amount of the established fee. However, no fee shall be charged by a fire department for merely appearing at the scene of a controlled fire unless called by the person setting the fire or at such person's request. If it is necessary for suit to be brought for collection of such amount due, such liability shall include costs of suit and a reasonable attorney's fee.
B. If insurance coverage is provided for the fee specified in subsection A of this section or for the cost of providing the service rendered by the fire department and an insurer makes payment for the service it shall be the duty of the insured party or the responding fire department to notify the insurer of services rendered. The instrument of payment for the services of the fire department shall be made to the order of the responding fire department and the insured.
Added by Laws 1957, p. 143, § 2. Amended by Laws 1983, c. 100, § 18, emerg. eff. May 9, 1983; Laws 1989, c. 172, § 1, emerg. eff. May 8, 1989; Laws 1993, c. 8, § 1, eff. Sept. 1, 1993.
§18594. Fire departments for unincorporated areas Status as state agency Nonliability for tort.
Any charitable corporation formed in an unincorporated area for the purpose of providing either a volunteer or a fulltime fire department, such as is mentioned in Section 592 of this title, shall be considered an agency of the State of Oklahoma while actually performing the function of providing fire protective services either within or without the unincorporated area wherein it is situated, and while so engaged such corporation shall not be liable in tort for the acts of its members or its firemen.
Amended by Laws 1983, c. 100, § 19, emerg. eff. May 9, 1983.
§18601. Right of way Use of public ground, streets and highways Use of railroad property Interstate highway system.
(a) There is hereby granted to the owners of any telegraph or telephone lines operated in this state the rightofway over lands and real property in this state, and the right to use public grounds, streets, alleys and highways in this state, subject to control of the proper municipal authorities as to what grounds, streets, alleys or highways said lines shall run over or across, and the place the poles to support the wires are located; also the right to condemn and cross over or under, or build their lines along any railroad property or rightofway, subject to the necessary use of such property or rightofway by the railroad company; the rightofway over real property granted in this section may be acquired in the same manner and by like proceedings as provided for railroad corporations.
(b) Provided, however, the State Highway Commission, in the exercise of reasonable discretion, may prevent the installation of such facilities upon limited access highways which are a part of the National System of Interstate and Defense Highways, or such Commission may permit the installation of such facilities on such portion of Interstate and Defense Highways under such reasonable regulations as it may prescribe. Provided, further, nothing herein contained shall affect the right of the owners of telephone and telegraph lines to cross such Interstate and Defense Highways and to build their lines either aerial or underground along and upon any extension of said interstate and defense highways within urban areas in accordance with Federal Aid Regulations.
§18671. Sharepurchase options or warrants and shares issued pursuant thereto.
Any option or warrant for the purchase of shares of any domestic corporation heretofore issued by such corporation, although not issued in connection with the allotment of shares or the issuance of bonds or other securities, and any share issued by such corporation pursuant to the exercise of such option or warrant is hereby validated if the issuance of such warrant or option was heretofore expressly authorized, or hereafter is ratified, by the holders of a majority of the shares of such corporation having voting power with respect thereto.
Laws 1961, p. 199, § 1.
§18-801. Short title.
This act is known and may be cited as the "Professional Entity Act".
Added by Laws 1961, p. 204, § 1, emerg. eff. July 26, 1961. Amended by Laws 1995, c. 339, § 1, eff. Nov. 1, 1995.
§18802. Statutory policy.
This act shall be so construed as to effectuate its general purpose of making available to professional persons the benefits of the corporate form for the business aspects of their practices while preserving the established professional aspects of the personal relationship between the professional person and those he serves.
Laws 1961, p. 204, § 2.
§18-803. Definitions.
A. As used herein, unless the context clearly indicates that a different meaning is intended:
1. "Associated act" means the Oklahoma General Corporation Act, in the case of a corporation; the Oklahoma Revised Uniform Limited Partnership Act, in the case of a limited partnership; or the Oklahoma Limited Liability Company Act, in the case of a limited liability company;
2. "Interest" means a share of stock in a corporation, a partnership interest in a limited partnership or a membership interest in a limited liability company;
3. "Owner" means a shareholder in the case of a corporation, a general or limited partner in the case of a limited partnership or a member in the case of a limited liability company;
4. "Manager" means a director or officer in the case of a corporation, a general partner in the case of a limited partnership or a manager in the case of a limited liability company;
5. "Professional entity" means a domestic corporation, limited partnership or limited liability company formed for the purpose of rendering professional service;
6. "Professional service" means the personal service rendered by:
a. a physician, surgeon or doctor of medicine pursuant to a license under Sections 481 through 524 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of medicine,
b. an osteopathic physician or surgeon pursuant to a license under Sections 620 through 645 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of osteopathy,
c. a chiropractic physician pursuant to a license under Sections 161.1 through 161.20 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of chiropractic,
d. a podiatric physician pursuant to a license under Sections 135.1 through 160.2 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of podiatric medicine,
e. an optometrist pursuant to a license under Sections 581 through 606 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of optometry,
f. a veterinarian pursuant to a license under Sections 698.1 through 698.18 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of veterinary medicine,
g. an architect pursuant to a license under Sections 46.1 through 46.37 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of architecture,
h. an attorney pursuant to his authority to practice law granted by the Supreme Court of the State of Oklahoma,
i. a dentist pursuant to a license under Sections 328.1 through 328.51a of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of dentistry,
j. a certified public accountant or a public accountant pursuant to his or her authority to practice accounting under Sections 15.1 through 15.35 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of public accountancy,
k. a psychologist pursuant to a license under Sections 1351 through 1376 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of psychology,
l. a physical therapist pursuant to a license under Sections 887.1 through 887.18 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of physical therapy,
m. a registered nurse pursuant to a license under Sections 567.1 through 567.16a of Title 59 of the Oklahoma Statutes, and any other subsequent laws regulating the practice of nursing,
n. a professional engineer pursuant to a license under Sections 475.1 through 475.22a of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of engineering,
o. a land surveyor pursuant to a license under Sections 475.1 through 475.22a of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of land surveying,
p. an occupational therapist pursuant to Sections 888.1 through 888.15 of Title 59 of the Oklahoma Statutes and any subsequent law regulating the practice of occupational therapy,
q. a speech pathologist or speech therapist pursuant to Sections 1601 through 1622 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of speech pathology,
r. an audiologist pursuant to Sections 1601 through 1622 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of audiology,
s. a registered pharmacist pursuant to Sections 353 through 366 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of pharmacy,
t. a licensed perfusionist pursuant to Sections 2051 through 2071 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of perfusionists,
u. a licensed professional counselor pursuant to Sections 1901 through 1920 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of professional counseling,
v. a licensed marital and family therapist pursuant to Sections 1925.1 through 1925.18 of Title 59 of the Oklahoma Statutes, and any subsequent law regulating the practice of marital and family therapy,
w. a dietitian licensed pursuant to Sections 1721 through 1739 of Title 59 of the Oklahoma Statutes and any subsequent laws regulating the practice of dietitians, or
x. a social worker licensed pursuant to Sections 1250 through 1273 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of social work;
7. "Related professional services" means those services which are combined for professional entity purposes as follows:
a. any combination of the following professionals:
(1) a physician, surgeon or doctor of medicine pursuant to a license under Sections 481 through 524 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of medicine,
(2) an osteopathic physician or surgeon pursuant to a license under Sections 620 through 645 of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of osteopathy,
(3) a dentist pursuant to a license under Sections 328.1 through 328.51a of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of dentistry,
(4) a chiropractic physician pursuant to a license under Sections 161.1 through 161.20 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of chiropractic,
(5) a psychologist pursuant to a license under Sections 1351 through 1376 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of psychology,
(6) an optometrist pursuant to a license under Sections 581 through 606 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of optometry,
(7) a podiatric physician pursuant to a license under Sections 135.1 through 160.2 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of podiatric medicine, or
(8) a dietitian licensed pursuant to Sections 1721 through 1739 of Title 59 of the Oklahoma Statutes and subsequent laws regulating the practice of dietitians, or
b. any combination of the following professions:
(1) an architect pursuant to a license under Sections 46.1 through 46.37 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of architecture,
(2) a professional engineer pursuant to a license under Sections 475.1 through 475.22a of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of engineering, or
(3) a land surveyor pursuant to a license under Sections 475.1 through 475.22a of Title 59 of the Oklahoma Statutes, and any subsequent laws relating to the practice of land surveying;
8. "Regulating board" means the board which is charged with the licensing and regulation of the practice of the profession which the professional entity is organized to render;
9. "Individual", "incorporator" and "shareholder" each include the trustee of an express trust created by a person duly licensed to render a professional service who has the right to revoke said trust and who is serving as the trustee of said trust. Any certificate required by the Professional Entity Act to be issued to an individual incorporator or shareholder may be issued to the grantor on behalf of a trust. All references in the Professional Entity Act to death and incapacity of a shareholder shall include the death and incapacity of the grantor of a trust which own stock in a professional corporation;
10. "Incapacity" of a shareholder means a determination by a court of competent jurisdiction, or otherwise by two independent licensed physicians, that the share holder is fully incapacitated or is partially incapacitated to the extent that the shareholder is not capable of rendering the professional service for which the professional corporation was organized; and
11. "Other personal representative" includes the successor trustee of an express trust owning stock in a professional corporation, which trust was created by a person duly licensed to render the professional service for which the professional corporation was organized who has the right to revoke the trust and who is the original trustee of the trust.
B. The definitions of the applicable associated act shall apply to this act, unless the context clearly indicates that a different meaning is intended.
Added by Laws 1961, p. 204, § 3, emerg. eff. July 26, 1961. Amended by Laws 1963, c. 342, § 1, emerg. eff. June 24, 1963; Laws 1970, c. 95, § 1, emerg. eff. March 30, 1970; Laws 1971, c. 164, § 1, emerg. eff. May 25, 1971; Laws 1976, c. 27, § 1; Laws 1981, c. 312, § 1, eff. Oct. 1, 1981; Laws 1983, c. 4, § 1, eff. Nov. 1, 1983; Laws 1986, c. 292, § 147, eff. Nov. 1, 1986; Laws 1990, c. 328, § 1, eff. Sept. 1, 1990; Laws 1993, c. 345, § 1, eff. Sept. 1, 1993; Laws 1994, c. 216, § 1, emerg. eff. May 20, 1994; Laws 1995, c. 339, § 2, eff. Nov. 1, 1995; Laws 1996, c. 226, § 22, eff. July 1, 1996; Laws 1998, c. 25, § 1, eff. Nov. 1, 1998; Laws 2001, c. 307, § 1, eff. Nov. 1, 2001; Laws 2003, c. 151, § 1, eff. Nov. 1, 2003.
§18-804. Formation of professional entity.
A professional entity may be formed by filing the appropriate instrument required by the associated act with the Secretary of State. The individual or individuals forming the professional entity shall be duly licensed in accordance with the provisions of this state's licensing laws for the profession and in good standing within the profession to be practiced through the professional entity. Such instrument shall meet the requirements of the applicable associated act and shall also contain the following:
1. The profession or related professions to be practiced through the professional entity; and
2. A certificate by the regulating board of the profession or related professions involved that each of the persons who are to become owners or managers of the professional entity and who are to engage in the practice of the profession or related profession is duly licensed in accordance with the provisions of this state's licensing laws for the profession or related profession to practice such profession.
Added by Laws 1961, p. 205, § 4, emerg. eff. July 26, 1961. Amended by Laws 1981, c. 312, § 2, eff. Oct. 1, 1981; Laws 1986, c. 292, § 148, eff. Nov. 1, 1986; Laws 1995, c. 339, § 3, eff. Nov. 1, 1995.
§18-805. Applicability of associated acts.
The respective associated act shall be applicable to each professional entity, and each professional entity shall enjoy the powers and privileges and be subject to the duties, restrictions, and liabilities of other similarly situated business entities, except where inconsistent with this act. This act shall take precedence in the event of any conflict with provisions of the applicable associated act or other laws.
Added by Laws 1961, p. 205, § 5, emerg. eff. July 26, 1961. Amended by Laws 1986, c. 292, § 149, eff. Nov. 1, 1986; Laws 1995, c. 339, § 4, eff. Nov. 1, 1995.
§18-806. Purpose of formation of professional entity.
A professional entity may be formed for the purpose of rendering one specific type of professional service or related professional services and services ancillary thereto and shall not engage in any business other than rendering the professional service or services which it was organized to render and services ancillary thereto; provided, however, that a professional entity may own real and personal property necessary or appropriate for rendering the type of professional services it was organized to render and may invest its funds in real estate, mortgages, stocks, bonds and any other type of investments.
Added by Laws 1961, p. 205, § 6, emerg. eff. July 26, 1961. Amended by Laws 1981, c. 312, § 3, eff. Oct. 1, 1981; Laws 1995, c. 339, § 5, eff. Nov. 1, 1995.
§18-807. Name of professional entity.
The name of every professional entity shall end with one or more of the words or abbreviations permitted in the applicable associated acts; provided, that such words or abbreviations shall be modified by the word "professional" or some abbreviation of the combination, with or without punctuation, including, without limitation: "P.C.", "P.L.P." or "P.L.L.C.". Provided further, each of the regulating boards may by rule adopt further requirements as to the names of professional entities organized to render professional services within the jurisdiction of such regulating board.
Added by Laws 1961, p. 205, § 7, emerg. eff. July 26, 1961. Amended by Laws 1981, c. 312, § 4, eff. Oct. 1, 1981; Laws 1995, c. 339, § 6, eff. Nov. 1, 1995; Laws 1996, c. 69, § 2, eff. Nov. 1, 1996; Laws 2001, c. 406, § 8, emerg. eff. June 4, 2001.
§18-808. Office.
The principal office of the professional business entity shall be designated by street address in the formation instrument and shall not be changed without amendment of the formation instrument.
Added by Laws 1961, p. 205, § 8, emerg. eff. July 26, 1961. Amended by Laws 1970, c. 95, § 2, emerg. eff. March 30, 1970; Laws 1986, c. 292, § 150, eff. Nov. 1, 1986; Laws 2001, c. 406, § 9, emerg. eff. June 4, 2001.
§18-809. License requirement.
Except as provided in Section 815 of this title, no person shall hold an interest in a professional entity who is not duly licensed in accordance with the provisions of this state's licensing laws for the profession or related profession to render the same professional services or related professional services as those for which the entity is organized.
Added by Laws 1961, p. 206, § 9, emerg. eff. July 26, 1961. Amended by Laws 1981, c. 312, § 5, eff. Oct. 1, 1981; Laws 1993, c. 345, § 2, eff. Sept. 1, 1993; Laws 1995, c. 339, § 7, eff. Nov. 1, 1995.
§18-810. Managers and stockholders.
No person may be a manager of a professional entity who is not a person duly licensed in accordance with the provisions of this state's licensing laws for the profession or related profession to render the same professional services or related professional services as those for which the entity is formed. No person may be a shareholder of a professional corporation who is not an individual duly licensed to render the same professional services or related professional services as those for which the corporation is organized.
Added by Laws 1961, p. 206, § 10, emerg. eff. July 26, 1961. Amended by Laws 1963, c. 281, § 1; Laws 1971, c. 30, § 1, emerg. eff. March 22, 1971; Laws 1979, c. 6, § 1; Laws 1981, c. 312, § 6, eff. Oct. 1, 1981; Laws 1993, c. 345, § 3, eff. Sept. 1, 1993; Laws 1995, c. 339, § 8, eff. Nov. 1, 1995.
§18-811. Professional services through owners, managers, employees and agents.
A professional entity may render professional services only through its owners, managers, employees and agents who are duly licensed in accordance with the provisions of this state's licensing laws to render professional services; provided, however, this provision shall not be interpreted to include in the term "employee", as used herein, clerks, secretaries, bookkeepers, technicians and other assistants who are not usually and ordinarily considered by custom and practice to be rendering professional services to the public for which a license is required.
Added by Laws 1961, p. 206, § 11, emerg. eff. July 26, 1961. Amended by Laws 1981, c. 312, § 7, eff. Oct. 1, 1981; Laws 1995, c. 339, § 9, eff. Nov. 1, 1995.
§18812. Professional relationship preserved.
This act does not alter any law applicable to the relationship between a person rendering professional services and a person receiving such services, including liability arising out of such professional services.
Laws 1961, p. 206, § 12.
§18813. Professional regulation.
Subject to the provisions of Section 819 of this title, nothing in this act shall restrict or limit in any manner the authority and duty of the regulating boards for the licensing of individual persons rendering professional services or the practice of the profession which is within the jurisdiction of such regulating board, notwithstanding that such person is an owner, manager or employee of a professional entity and rendering such professional services or engaging in the practice of such profession through such professional entity.
Added by Laws 1961, p. 206, § 13, emerg. eff. July 26, 1961. Amended by Laws 1995, c. 339, § 10, eff. Nov. 1, 1995.
§18814. Prohibited acts.
No professional entity may do any act which is prohibited to be done by individual persons licensed to practice a profession which the professional entity is organized to render.
Added by Laws 1961, p. 206, § 14, emerg. eff. July 26, 1961. Amended by Laws 1981, c. 312, § 8, eff. Oct. 1, 1981; Laws 1995, c. 339, § 11, eff. Nov. 1, 1995.
§18-815. Death or disqualification of shareholders - Sole shareholder - Withdrawal.
A. 1. If the professional entity is a corporation, the certificate of incorporation, bylaws or other agreement may provide for the purchase or redemption of the shares of any shareholder upon the death, incapacity, disqualification or ending of employment of such shareholder. In the absence of a provision in the certificate of incorporation, or the bylaws, or other agreement, the professional corporation shall purchase the shares of a deceased shareholder, a shareholder who is incapacitated or who is no longer qualified to own shares in such corporation or a shareholder whose employment has ended, within ninety (90) days after such shareholder's death, incapacity or disqualification or ending of employment, as the case may be.
2. The price for such shares shall be the book value as of the end of the month immediately preceding such shareholder's death, incapacity, disqualification or ending of employment of the shareholder. Book value shall be determined from the books and records of the professional corporation in accordance with the regular method of accounting used by the corporation. If the corporation shall fail to purchase the shares by the end of the ninety day period, then the executor or administrator or other personal representative of the deceased, incapacitated or disqualified shareholder may bring an action in the district court of the county in which the principal office or place of practice of the professional corporation is located for the enforcement of this provision. If the plaintiff is successful in such action, he shall be entitled to recover the book value of the shares involved, a reasonable attorney's fee and costs. The professional corporation shall repurchase such shares without regard to restrictions upon the repurchase of shares provided for in the Oklahoma General Corporation Act.
3. If there is only one shareholder of a professional corporation, and the shareholder dies or becomes incapacitated, the executor or administrator or other personal representative of the shareholder shall have the authority to sell the shares of capital stock owned by the shareholder to a qualified purchaser, or to cause a dissolution of the professional corporation as provided by law. The vesting of ownership of shares of stock in a professional corporation in the executor or administrator or other personal representative shall be solely for the purposes set forth above and shall not be deemed to contravene any other provisions of this act.
B. If the professional entity is a limited partnership or a limited liability company, an owner's disqualification shall be deemed a withdrawal, and the professional entity shall respond to the disqualification as it would any other withdrawal.
Added by Laws 1961, p. 206, § 15, emerg. eff. July 26, 1961. Amended by Laws 1974, c. 52, § 1; Laws 1986, c. 292, § 151, eff. Nov. 1, 1986; Laws 1993, c. 345, § 4, eff. Sept. 1, 1993; Laws 1995, c. 339, § 12, eff. Nov. 1, 1995.
§18817. Prior corporation.
This act shall not apply to any persons within this state who prior to the passage of this act were permitted to organize a corporation and perform professional services by the means of such corporation, and this act shall not apply to any corporation organized by such persons prior to the passage of this act; provided, however, any such persons or any such corporation may bring themselves and such corporation within the provisions of this act by amending the certificate of incorporation in such a manner so as to be consistent with all of the provisions of this act and by affirmatively stating in the amended certificate of incorporation that the shareholders have elected to bring the corporation within the provisions of this act.
Amended by Laws 1986, c. 292, § 152, eff. Nov. 1, 1986.
§18818. Certificates.
The regulating boards of the respective professions described in Section 803 of this title are hereby authorized and directed to issue the certificates required by Section 804 of this title upon receipt of an affidavit or other instrument reciting the names and addresses of the prospective owners and managers. The regulating boards may charge and collect a reasonable fee for such issuance. The fee shall be deposited and expended as provided by law for other fees collected by each respective regulating board.
Added by Laws 1961, p. 207, § 18, emerg. eff. July 26, 1961. Amended by Laws 1988, c. 323, § 3, eff. Nov. 1, 1988; Laws 1995, c. 339, § 13, eff. Nov. 1, 1995.
§18-819. Inapplicability of conflicting laws and rules.
All laws and rules and parts of laws and rules in conflict with any of the provisions of this act or otherwise restricting the forms of organization available to persons providing professional services shall be inapplicable to professional entities formed under this act; provided, however, that nothing in this act shall be construed to supersede the provisions of 59 O.S. 1951, Sections 581 through 592, both inclusive, Sections 601 through 606, both inclusive, or Sections 941 through 947, of Title 59 of the Oklahoma Statutes, both inclusive, as amended. In the event of the conflict of any of the provisions of this act with any of the above cited sections, then cited sections shall take precedence over this act and this act shall be construed accordingly.
Added by Laws 1961, p. 207, § 20, emerg. eff. July 26, 1961. Amended by Laws 1995, c. 339, § 14, eff. Nov. 1, 1995.
§18863. Nonprofit corporations for creating rural water and sewer districts Exemption from taxation and assessments.
A corporation organized not for profit pursuant to the provisions of the Oklahoma General Corporation Act for the purpose of developing and providing rural water supply and sewage disposal facilities to serve rural residents shall be exempt from all excise taxes of whatsoever nature, and shall be exempt from payment of assessments in any general or special taxing district levied upon the property of said corporation, whether real, personal or mixed; such exemption shall include, but not be limited to, franchise taxes, assessments or fees levied by any county or municipality for inspections of the facilities of the corporation which were not requested by the corporation. Said corporations shall have the right of eminent domain in the same manner and according to the procedures provided for in Sections 51 through 65 of Title 66 of the Oklahoma Statutes, provided, that the use of said eminent domain provisions shall be restricted to the purpose of developing and providing rural gas distribution, water supply and sewage disposal facilities. Provided, however, no personal or real property, easement or rightofway of any utility may be acquired by eminent domain.
Added by Laws 1970, c. 328, § 1, emerg. eff. April 28, 1970. Amended by Laws 1986, c. 53, § 1, eff. Nov. 1, 1986; Laws 1986, c. 292, § 153, eff. Nov. 1, 1986; Laws 1987, c. 124, § 1; Laws 1998, c. 283, § 1, emerg. eff. May 27, 1998.
§18865. Liability of directors Findings of Legislature.
The Legislature finds that nonprofit corporations serve important functions in providing services and assistance to persons in the state and that in order for these nonprofit corporations to function effectively, persons serving on the board of directors should not be subject to vicarious liability for the negligence of corporate employees or other directors. The Legislature finds that potential exposure to vicarious liability has a detrimental effect on the participation of persons as directors of nonprofit corporations and that providing immunity to directors of such corporations for certain types of liability will promote the general health, safety and welfare of citizens in the state.
Added by Laws 1986, c. 195, § 1, eff. Nov. 1, 1986.
§18-866. Immunity of directors - Scope and extent.
A. Except as otherwise provided by this section, no member of the board of directors of a nonprofit corporation that holds a valid exemption from federal income taxation issued pursuant to Section 501(a) of the Internal Revenue Code (26 U.S.C. Section 501(a)) or Section 528 of the Internal Revenue Code (26 U.S.C. Section 528) and is listed as an exempt organization in Section 501(c) of the Internal Revenue Code (26 U.S.C. Section 501(c)) or files as such pursuant to Section 528 of the Internal Revenue Code shall be held personally liable for damages resulting from:
1. any negligent act or omission of an employee of the nonprofit corporation; or
2. any negligent act or omission of another director.
B. The immunity provided by subsection A of this section shall not extend to intentional torts or grossly negligent acts or omissions personal to any director of the nonprofit corporation.
C. If a nonprofit corporation transfers assets to a member of the board of directors of such corporation or to another nonprofit corporation in order to avoid claims against corporate assets resulting from a judgment rendered as a result of a suit to recover damages for the negligence of the corporation, a corporate employee or a director, the director to whom the asset is transferred or any director of the corporation from which assets are transferred to avoid such claims may be held personally liable for any such judgment rendered and the immunity provided by this section shall be of no force or effect.
D. The provisions of this section shall only apply to suits for recovery of damages based upon causes of action that accrue on or after the effective date of this act.
Added by Laws 1986, c. 195, § 2, eff. Nov. 1, 1986. Amended by Laws 1988, c. 125, § 1, emerg. eff. April 8, 1988; Laws 2004, c. 255, § 1, eff. Nov. 1, 2004.
§18867. Director Breach of fiduciary duty Liability.
In addition to the immunity provisions of Section 866 of Title 18 of the Oklahoma Statutes, no member of the board of directors of a nonprofit corporation shall be personally liable to the corporation, or members thereof, for monetary damages for breach of fiduciary duty as a director, provided that such immunity from liability shall not extend to:
1. any breach of the director's duty of loyalty to the corporation; or
2. any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; or
3. any transaction from which the director derived an improper personal benefit.
Added by Laws 1987, c. 166, § 1, eff. Nov. 1, 1987.
§18-868. Nonprofit corporations for benefit of towns, cities and counties - Issuance of indebtedness - Exemption from taxation.
A. A corporation organized not for profit pursuant to the provisions of the Oklahoma General Corporation Act and that holds a valid exemption from federal income taxation issued pursuant to Section 501(a) of the Internal Revenue Code (26 U.S.C. Section 501(a)) and is listed as an exempt organization in Section 501(c) of the Internal Revenue Code (26 U.S.C. Section 501(c)) is hereby authorized to issue indebtedness for the purpose of providing funds for the benefit of and on behalf of Oklahoma educational institutions, towns, cities and counties and their citizens throughout the state and to issue such indebtedness on a tax-exempt or taxable basis, as applicable under the Internal Revenue Code (26 U.S.C. Section 1, et seq.) as amended. Such not for profit corporations shall not be subject to the provisions of Sections 695.7, 695.8 and 695.9 of Title 62 of the Oklahoma Statutes, or similar laws thereto.
B. The interest on any indebtedness or obligations issued by any public trust or other entity authorized to issue obligations on which the interest thereon is exempt from federal income taxation and whose purpose includes providing safe, decent and affordable single family or multifamily housing, shall not be subject to taxation by the State of Oklahoma or by any county, municipality, or political subdivision therein when such indebtedness or obligation is issued to provide decent and affordable single family or multifamily housing.
Added by Laws 1998, c. 283, § 2, emerg. eff. May 27, 1998. Amended by Laws 1998, c. 400, § 6, emerg. eff. June 10, 1998; Laws 2000, c. 351, § 13, eff. July 1, 2001.
§18901. Short title.
This act shall be known and may be cited as the "Oklahoma Business Development Corporation Act".
Laws 1970, c. 187, § 1, emerg. eff. April 13, 1970.
§18902. Definitions.
As used in this act, unless a different meaning is required by the context, the following words and phrases shall have the following meanings:
(1) "Corporation" means the Oklahoma Business Development Corporation created under the provisions of this act.
(2) "Financial institution" means any bank, trust company, savings and loan association, insurance company, or other institution engaged in lending or investing funds.
(3) "Member" means any financial institution which shall undertake to lend money to a corporation created under the provisions of this act.
(4) "Board of directors" means the board of directors of a corporation created under this act.
(5) "Loan limit" for any member means the maximum amount permitted to be outstanding at one time on loans made by such member to a corporation as determined under the provisions of this act.
(6) "Shareholder" means the holder of record of shares in the corporation.
Laws 1970, c. 187, § 2, emerg. eff. April 13, 1970.
§18903. Organization Purpose.
A business development corporation may be incorporated in this state pursuant to the provisions of this act and all the provisions of the Oklahoma General Corporation Act not in conflict with or inconsistent with the provisions of this act shall apply to such corporation except as hereinafter otherwise provided.
Ten or more persons, a majority of whom shall be residents of this state, who desire to create a business development corporation under the provisions of this act, shall by certificate of incorporation filed with the Secretary of State, under their hands and seal, set forth:
(1) The name of the corporation, which shall include the words "Oklahoma Business Development Corporation".
(2) The location of the principal office of the corporation, but such corporation may have offices in such other places within the state as may be fixed by the board of directors.
(3) The purpose for which the corporation is founded, which shall include the following:
The purposes of the corporation shall be to promote, stimulate, develop and advance to business prosperity and economic welfare of the State of Oklahoma and its citizens; to encourage and assist through loans, investments or other business transactions in the location of new business and industry in this state and to improve and assist existing business and industry, and so to stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of this state and provide maximum opportunities for employment; to cooperate and act in conjunction with other organizations, public or private, in the promotion and advancement of industrial, commercial, agricultural and recreational developments in this state; and to provide financing for the promotion, development, and conduct of all kinds of business activity in this state.
Amended by Laws 1986, c. 292, § 154, eff. Nov. 1, 1986.
§18904. Powers.
To accomplish its purposes, the corporation shall, subject to the restrictions and limitations herein contained, have the following powers:
(1) To elect, appoint, and employ officers, agents and employees and to make contracts and incur liabilities for any of the purposes of the corporation.
(2) To borrow money from its members, any agency or governmental entity of the Federal Government or the State of Oklahoma or any agency or department thereof or any other corporation or person, for any of the purposes of the corporation; to issue therefor its bonds, debentures, notes or other evidence of indebtedness, whether secured or unsecured, and to secure the same by mortgage, pledge, deed of trust or other lien on its property, franchises, rights, and privileges of every kind and nature, or any part thereof or interest therein, without securing stockholder or member approval.
(3) To make loans to any person, firm, corporation, association or trust, and to establish and regulate the terms and conditions with respect to any such loans, provided however, that the corporation shall not approve any application for a loan unless and until the person applying for said loan shall show that he has applied for the loan through ordinary banking channels and that the loan has been refused by at least one bank or other financial institution.
(4) To mortgage, hold, pledge or otherwise dispose of the stock, shares, bonds, debentures, notes or other securities and evidences of interest in, or indebtedness of, any person, firm, corporation, jointstock company, association or trust, and allow the owner or holder thereof to exercise all the rights, powers and privileges of ownership, including the right to vote thereon. In the event of default, the Business Development Corporation must divest itself of the acquired assets within a reasonable period of time.
(5) To cooperate with and avail itself of the facilities of the United States Department of Commerce, the Oklahoma Parks and Industries Board and any other similar state or federal governmental agency; and to cooperate with and assist, and otherwise encourage organizations in the various communities of the state in the promotion, assistance and development of the business prosperity and economic welfare of such communities or of this state or of any part thereof.
(6) To do all acts and things necessary or convenient to carry out the powers expressly granted in this act.
Laws 1970, c. 187, § 4, emerg. eff. April 13, 1970.
§18905. Limitation on amount of capital stock acquired by member Minimum capital stock.
(1) Notwithstanding any other provision of law, any person, corporation, public utility, financial institution, or labor union, may acquire, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds, notes, debentures, securities, or other evidences of indebtedness, or the shares of capital stock of a corporation created hereunder; provided that the amount of capital stock which may be acquired by any member of such corporation shall not exceed ten percent (10%) of the loan limit of such member.
(2) The capital stock of any such corporation shall be not less than Two Hundred Fifty Thousand Dollars ($250,000.00) to be evidenced by two thousand five hundred (2,500) shares, having a par value of One Hundred Dollars ($100.00) each, at least ten percent (10%) of the capital stock of any such corporation shall be paid into the treasury before it is authorized to transact any business other than such as relates to its organization.
Laws 1970, c. 187, § 5, emerg. eff. April 13, 1970.
§18906. Members Acceptance of loans.
(1) All financial institutions as defined herein are hereby authorized to become members of the corporation and to make loans to the corporation as provided herein.
(2) Any financial institution may request membership in the coporation by making application to the board of directors on such form and in such manner as said board of directors may require, and membership shall become effective upon acceptance of such application by the board.
(3) Each member of the corporation shall make loans to the corporation as and when called upon by it to do so on such terms and other conditions as shall be approved from time to time by the board of directors, subject to the following conditions:
(a) All loan limits shall be established at the thousanddollar amount nearest to the amount computed in accordance with the provisions of this section.
(b) No loan to the corporation shall be made if immediately thereafter the total amount of the obligations of the corporation would exceed ten times the amount then paid in an outstanding capital stock, reserves or earned surplus of the corporation.
(c) The total amount outstanding at any one time on loans to a development corporation made by any member shall not exceed: (i) twenty percent (20%) of the total amount then outstanding on loans to such development corporation by all members thereof, (ii) the following limit, to be determined as of the time such member becomes a member, on the basis of figures contained in the most recent yearend statement prior to its application for membership; three percent (3%) of the capital and permanent surplus of banks, trust companies; three percent (3%) of the total reserve and surplus accounts of a savings and loan association; one percent (1%) of the capital and unassigned surplus of stock insurance companies, except fire insurance companies; one percent (1%) of the unassigned surplus of mutual insurance companies, except fire insurance companies; onetenth of one percent (1/10 of 1%) of the assets of fire insurance companies; comparable limits for other financial institutions as established by the board of directors of the development corporation. All loan limits shall be recomputed as of the first day of January of each evennumbered year, but no member's loan limit shall be increased as the result of such recomputation without the consent of such member.
(d) Each call made by the corporation shall be prorated among the members of the corporation in substantially the same proportion that the adjusted loan limit of each member bears to the aggregate of the adjusted loan limits of all members. The adjusted loan limit of a member shall be the amount of such member's loan limit, reduced by the balance of outstanding loans made by such member to the corporation and the investment in capital stock of the corporation held by such member at the time of such call.
(e) All loans to the corporation by members shall be evidenced by bonds, debentures, notes, or other evidence of indebtedness of the corporation, which shall be freely negotiable at all times, and which shall bear interest at a rate of not less than onehalf of one percent (1/2 of 1%) in excess of the rate of interest determined by the board of directors at the date of issuance to be the prime rate prevailing on unsecured commercial loans.
(f) Membership in the corporation shall be for the duration of the corporation provided that: (i) upon written notice given to the corporation one (1) year in advance, a member may withdraw from membership in the corporation at the expiration date of such notice, (ii) a member shall not be obligated to make any loans to the corporation pursuant to calls made subsequent to the receipt of notice of the withdrawal of said member.
Laws 1970, c. 187, § 6, emerg. eff. April 13, 1970.
§18907. Board of directors.
The business and affairs of a corporation shall be conducted by a board of directors. The number of directors shall be a multiple of three with a minimum of fifteen and a maximum of twentyone. Twothirds of the directors shall be elected by the members, and onethird shall be elected by the stockholders. Onethird of the original board shall be elected for a term of one (1) year, onethird for a term of two (2) years, and onethird for a term of three (3) years; all directors subsequently elected shall serve for a term of three (3) years. Any vacancy in the office of a director elected by the members shall be filled by the directors elected by the members, and any vacancy in the office of a director elected by the stockholders shall be filled by the directors elected by the stockholders.
Laws 1970, c. 187, § 7, emerg. eff. April 13, 1970.
§18908. Voting rights.
Each stockholder shall be entitled to one vote, in person or by proxy, for each share of capital stock held, and each member shall be entitled to one vote, in person or by proxy, for each One Thousand Dollars ($1,000.00) of the outstanding loan limit of each member.
Laws 1970, c. 187, § 8, emerg. eff. April 13, 1970.
§18909. Retention of certain earnings.
Each year the corporation shall set apart as earned surplus not less than ten percent (10%) of its net earnings for the preceding fiscal year until such surplus shall be equal in value to onehalf of the amount paid in on the capital stock then outstanding. Whenever the amount of surplus so established shall become impaired, it shall be built up again to the required amount in the manner provided for its original accumulation.
Laws 1970, c. 187, § 9, emerg. eff. April 13, 1970.
§18910. Deposit of funds.
No corporation organized under the provisions of this act shall at any time be authorized to receive money on deposit. The corporation shall not deposit any of its funds in any banking institution unless such institution has been designated as a depository by a vote of a majority of the directors present at an authorized meeting of the board of directors, exclusive of any director who is an officer or director of the depository so designated.
Laws 1970, c. 187, § 10, emerg. eff. April 13, 1970.
§18911. Amendment of articles of incorporation.
No amendment to the certificate of incorporation shall be made which increases the obligation of a member to make loans to the corporation or which makes any change in the principal amount, interest rate, maturity date, or in the security or credit position of any outstanding loan made by a member to the corporation or which affects the right of a member to withdraw from membership or the voting rights of such member, without the consent of each member who would be affected by such amendment.
Amended by Laws 1986, c. 292, § 155, eff. Nov. 1, 1986.
§18912. Audits and reports.
Such corporation shall be subject to an annual examination and audit by one or more certified public accountants to be selected by the board of directors, sufficient to reflect the result of the operations during and the condition of the corporation at the end of the fiscal year. A report of such examination, audit and condition of such corporation shall be made in writing to each of the members and stockholders of such corporation on or before the one hundred twentieth day of each succeeding fiscal year of said corporation.
Laws 1970, c. 187, § 12, emerg. eff. April 13, 1970.
§18951. Prohibition on forming Exceptions.
A. It is hereby declared to be the public policy of this state and shall be the prohibition of this act that, notwithstanding the provisions of Section 5 of this act, no foreign corporation shall be formed or licensed under the Oklahoma General Corporation Act for the purpose of engaging in farming or ranching or for the purpose of owning or leasing any interest in land to be used in the business of farming or ranching. A domestic corporation may, however, be formed under the Oklahoma General Corporation Act to engage in such activity if the following requirements are met by that domestic corporation:
1. There shall be no shareholders other than (a) natural persons; (b) estates; (c) trustees of trusts for the benefit of natural persons, if such trustees are either (i) natural persons or (ii) banks or trust companies which either have their principal place of business in Oklahoma or are organized under the laws of the State of Oklahoma; or (d) corporations owned by no shareholders other than those described in paragraph 1 (a), (b) or (c) of this section and meeting the requirements of paragraph 3 of this section.
2. Not more than thirtyfive percent (35%) of the corporation's annual gross receipts shall be from any source other than (a) farming or ranching or both, as the case may be, or (b) allowing others to extract from the corporate lands any minerals underlying the same, including, but not limited to, oil and gas. Provided, however, in the event a corporation does not comply with the thirtyfive percent (35%) annual gross receipt test, then, in that event the corporation may furnish records of its gross receipts for each of the previous five (5) years, or for each year that it has been in existence if less than five (5) years, and the average of said annual gross receipts shall be used in lieu of the corporation's annual gross receipts for purposes of complying with this section.
3. Except as otherwise provided in this paragraph, there shall not be more than ten shareholders unless said shareholders in excess of ten are related as lineal descendants or are or have been related by marriage to lineal descendants or persons related to lineal descendants by adoption or any combination of same. For a corporation incorporated for the purpose of breeding horses, there shall not be more than twenty-five shareholders.
4. Certificates of incorporation for domestic corporations which intend to engage in farming or ranching or owning or leasing any interest in land to be used in the business of farming or ranching shall initially be approved by the State Board of Agriculture concerning the purpose prior to filing in the office of the Secretary of State. No stated purpose is to be disapproved by the Board of Agriculture unless such stated purpose violates existing civil or criminal code.
B. The Secretary of State shall provide the State Department of Agriculture a list of corporations registering in the state that list farming or ranching or owning or leasing any interest in land to be used in the business of farming or ranching at least weekly.
Amended by Laws 1986, c. 292, § 156, eff. Nov. 1, 1986; Laws 1991, c. 38, § 2, emerg. eff. April 3, 1991.
§18952. Revocation of license Vacation of franchise Penalties.
A. Any license issued after June 1, 1971, under the Oklahoma Business Corporation Act to a foreign corporation for the purpose of engaging in farming or ranching or for the purpose of owning or leasing any interest in land to be used in the business of farming or ranching shall be revoked within five (5) years of the effective date of this act.
B. The corporate franchise of any existing domestic corporation formed under the Oklahoma Business Corporation Act after June 1, 1971, for the purpose of engaging in farming or ranching or for the purpose of owning or leasing any interest in land to be used in the business of farming or ranching shall be vacated within five (5) years of the effective date of this act unless its articles of incorporation comply with Section 951 of this title.
C. The corporate franchise of any domestic corporation governed by the Oklahoma General Corporation Act formed for the purpose of farming or ranching or for the purpose of owning or leasing any interest in land to be used in the business of farming or ranching and permitted to engage in such activity under this act shall be vacated promptly in the manner prescribed by Section 104 of this act, if the corporation has persistently violated the provisions of subsection A of Section 951 of this title.
D. The State Board of Agriculture shall initiate and prosecute civil or criminal actions and proceedings when deemed necessary to enforce or carry out any of the provisions of this code.
E. This act shall not require any foreign or domestic corporation to dispose of any property acquired on or before June 1, 1971.
F. Any farming or ranching corporation which violates the provisions of Section 951 of this title shall be fined an amount not to exceed Five Hundred Dollars ($500.00). Any other person, corporation or entity who knowingly violates such section shall be deemed guilty of a misdemeanor.
Amended by Laws 1986, c. 292, § 157, eff. Nov. 1, 1986.
§18-953. Actions for divestment of interest in land held by corporation - Exemptions - Dissolution of corporation.
A. No corporation organized for a purpose other than farming or ranching shall own, lease or hold, directly or indirectly, agricultural lands in excess of that amount reasonably necessary to carry out its business purpose.
B. Any resident of the county in which the land is situated, who is of legal age, may initiate an action for the divestment of an interest in land held by a corporation in violation of the provisions of Sections 951 through 954 of this title, in the county in which the land is situated. If such action is successful all costs of the action shall be assessed against the defendant corporation, and a reasonable attorney's fee shall be allowed the plaintiff. Should judgment be rendered for the defendant, such costs and a reasonable attorney's fee for the defendant shall be paid by the plaintiff.
C. In the event an action for the divestment of an interest in land held by a corporation in violation of the provisions of Sections 951 through 954 of this title is successful against said corporation, said corporation shall be required to dispose of said land within such reasonable period of time as may be ordered by the court, subject to the corporation's right of appeal. Except as otherwise provided by Section 954 of this title, the provisions of Sections 951 through 954 of this title shall not apply to corporations engaging in food canning operations, food processing or frozen food processing insofar as such corporations engage in the raising of food products for aforesaid purposes.
D. Upon the petition to a court of competent jurisdiction by shareholders holding twenty-five percent (25%) or more of the shares in a farming or ranching business corporation the court in its discretion, for good cause shown, may order the corporation dissolved and the assets of such corporation divided in kind pro rata to the shareholders or liquidated and the proceeds of such liquidation divided pro rata to the shareholders all according to the procedures specified for the dissolution and liquidation of business corporations under the Oklahoma General Corporation Act.
Laws 1971, c. 310, § 3, emerg. eff. June 24, 1971; Laws 1978, c. 101, § 1, emerg. eff. March 29, 1978; Laws 1986, c. 292, § 158, eff. Nov. 1, 1986; Laws 1994, c. 61, § 1, emerg. eff. April 15, 1994.
§18-954. Exemptions.
The provisions of Section 951 et seq. of this title shall not apply where a corporation, either domestic or foreign:
1. Engages in research and/or feeding arrangements or operations concerned with the feeding of livestock or poultry, but only to the extent of such research and/or feeding arrangements or such livestock or poultry operations;
2. Engages in operations concerned with the production and raising of livestock or poultry for sale or use as breeding stock and including only directly related operations, such as breeding or feeding livestock or poultry which are not selected or sold as breeding stock;
3. Engages in swine operations, including only directly related operations, such as facilities for the production of breeding stock, feed mills, processing facilities, and providing supervisory, technical and other assistance to any other persons performing such services on behalf of the corporation;
4. Engages in poultry operations, including only directly related operations, such as operating hatcheries, facilities for the production of breeding stock, feed mills, processing facilities, and providing supervisory, technical and other assistance to any other persons performing such services on behalf of the corporation to the extent of such operations in this state by the corporation on the effective date of this act;
5. Engages in forestry as defined by Section 14 of Title 2 of the Oklahoma Statutes;
6. Whose corporate purpose is charitable or eleemosynary; or
7. Presently engages in fluid milk processing within the State of Oklahoma or leases to a fluid milk processor so engaged; provided, this exception is limited to such dairy operations as are necessary to meet such processor's needs.
Added by Laws 1971, c. 310, § 4, emerg. eff. June 24, 1971. Amended by Laws 1988, c. 323, § 32, eff. Nov. 1, 1988; Laws 1991, c. 38, § 1, emerg. eff. April 3, 1991; Laws 1994, c. 61, § 2, emerg. eff. April 15, 1994; Laws 2002, c. 94, § 1, emerg. eff. April 17, 2002.
§18-954.1. Application of Sections 951 through 956 - Production of nursery stock.
The provisions of Sections 951 through 956 of Title 18 of the Oklahoma Statutes shall not apply if a corporation, partnership, limited liability company, or other legal entity, either domestic or foreign engages in the production of nursery stock, as defined in Section 3-11 of Title 2 of the Oklahoma Statutes.
Added by Laws 2000, c. 196, § 1, eff. Nov. 1, 2000.
§18955. Limitations on ownership Exceptions.
A. No person, corporation, association or any other entity shall engage in farming or ranching, or own or lease any interest in land to be used in the business of farming or ranching, except the following:
1. Natural persons and the estates of such persons;
2. Trustees of trusts; provided that:
a. each beneficiary shall be a person or entity enumerated in paragraphs 1 through 5 of this subsection, and
b. there shall not be more than ten beneficiaries unless the beneficiaries in excess of ten are related as lineal descendants or are or have been related by marriage or adoption to lineal descendants, and
c. at least sixtyfive percent (65%) of the trust's annual gross receipts shall be derived from farming or ranching, or from allowing others to extract minerals underlying lands held by the trust. If the trust cannot comply with the annual gross receipts test, the trust may furnish records of its gross receipts for each of the previous five (5) years, or for each year that it has been in existence if less than five (5) years, and the average of such annual gross receipts may be used for purposes of complying with this section;
3. Corporations, as provided for in Sections 951 through 954 of this title, or as otherwise permitted by law;
4. Partnerships and limited partnerships; provided that:
a. each partner shall be a person or entity enumerated in paragraphs 1 through 5 of this subsection, and
b. there shall not be more than ten partners unless said partners in excess of ten are related as lineal descendants or are or have been related by marriage or adoption to lineal descendants, and
c. at least sixtyfive percent (65%) of the partnership's annual gross receipts shall be derived from farming or ranching, or from allowing others to extract minerals underlying lands held by the partnership. If the partnership cannot comply with the annual gross receipts test, the partnership may furnish records of its gross receipts for each of the previous five (5) years, or for each year that it has been in existence if less than five (5) years, and the average of such annual gross receipts may be used for purposes of complying with this section;
5. Limited liability companies formed pursuant to the Oklahoma Limited Liability Company Act; provided that:
a. each member shall be a person or entity enumerated in paragraphs 1 through 5 of this subsection, and
b. there shall not be more than thirty members unless said members in excess of thirty are related as lineal descendants or are or have been related by marriage or adoption to lineal descendants, and
c. at least sixty-five percent (65%) of the limited liability company's annual gross receipts shall be derived from farming or ranching, or from allowing others to extract minerals underlying lands held by the limited liability company. If the limited liability company cannot comply with the annual gross receipts test, the limited liability company may furnish records of its gross receipts for each of the previous five (5) years, or for each year that it has been in existence if less than five (5) years, and the average of such annual gross receipts may be used for purposes of complying with this section.
B. Any farming or ranching corporation, trust, partnership, limited partnership, limited liability company or other entity which violates any provisions of this section shall be fined an amount not to exceed Five Hundred Dollars ($500.00). Any other person or entity who knowingly violates this section shall be deemed guilty of a misdemeanor.
C. The provisions of this act shall not apply to interests in land acquired prior to June 1, 1978.
Added by Laws 1978, c. 169, § 1, emerg. eff. April 10, 1978. Amended by Laws 1993, c. 366, § 1, eff. Sept. 1, 1993; Laws 1994, c. 2, § 6, emerg. eff. March 2, 1994; Laws 2001, c. 208, § 6, emerg. eff. May 14, 2001.
NOTE: Laws 1993, c. 37, § 1 repealed by Laws 1994, c. 2, § 34, emerg. eff. March 2, 1994.
§18956. Action for divestment Cost Attorney fees.
A. Any resident of the county in which the land is situated, who is of legal age, may initiate an action in the district court in the county wherein the land is situated for the divestment of an interest in land held in violation of Section 1 of this act. If such action is successful, all costs of the action shall be assessed against the defendant and a reasonable attorney fee shall be allowed the plaintiff, and, should judgment be rendered for the defendant, such costs and a reasonable attorney fee for the defendant shall be paid by the plaintiff.
B. In the event an action for the divestment of an interest in land held in violation of Section 1 of this act is successful, the defendant shall be required to dispose of said land within such reasonable period of time as may be ordered by the court, subject to the right of appeal of said defendant.
Laws 1978, c. 169, § 2, emerg. eff. April 10, 1978.
§181001. Short title.
SHORT TITLE
Sections 1001 through 1144 of this title and Sections 18 and 25 through 27 of this act shall be known and may be cited as the "Oklahoma General Corporation Act". Section captions are part of the Oklahoma General Corporation Act.
Added by Laws 1986, c. 292, § 1, eff. Nov. 1, 1986. Amended by Laws 1987, c. 31, § 1, eff. Nov. 1, 1987; Laws 1988, c. 323, § 4, eff. Nov. 1, 1988.
§181002. Scope of Act.
SCOPE OF ACT
A. The provisions of the Oklahoma General Corporation Act shall be applicable to every corporation, whether profit or not for profit, stock or nonstock, existing as of the effective date of this act or thereafter formed or qualified to transact business in this state, and to all securities thereof, except to the extent that:
1. any such corporation is expressly excluded from the operation of the Oklahoma General Corporation Act or portions thereof; or
2. special provisions concerning any such corporation conflict with the provisions of the Oklahoma General Corporation Act, in which case such special provisions shall govern.
B. Any conflicts with the provisions of the Oklahoma General Corporation Act and any tax or unclaimed property laws of this state shall be governed by the tax or unclaimed property provisions, including those provisions relating to personal liability of corporate officers and directors.
C. The provisions of the Oklahoma General Corporation Act concerning qualification of foreign corporations and providing requirements and duties relating to such corporations shall not apply to insurance companies subject to the jurisdiction of the Insurance Commissioner or to foreign transportation companies subject to the jurisdiction of the Corporation Commission, existing as of the effective date of this act or thereafter qualified to transact business in this state.
Added by Laws 1986, c. 292, § 2, eff. Nov. 1, 1986.
§18-1003. Repealed by Laws 1997, c. 418, § 126, eff. Nov. 1, 1997.
§181004. Reserved Power of State to Amend or Repeal Oklahoma General Corporation Act Part of Corporation's Chapter or Certificate of Incorporation.
RESERVED POWER OF STATE TO AMEND OR REPEAL;
OKLAHOMA GENERAL CORPORATION ACT PART OF CORPORATION'S
CHARTER OR CERTIFICATE OF INCORPORATION
The Oklahoma General Corporation Act may be amended or repealed at the pleasure of the Legislature, but any amendment or repeal shall not take away or impair any remedy available pursuant to the provisions of the Oklahoma General Corporation Act against any corporation or its officers for any liability which shall have been previously incurred. The Oklahoma General Corporation Act and any amendments thereto shall be a part of the charter or certificate of incorporation of every corporation except so far as the same are inapplicable and inappropriate to the objects of the corporation. The provisions of this section shall not affect or impair as to any corporation any rights protected or guaranteed by the Constitution of this state or of the United States.
Added by Laws 1986, c. 292, § 4, eff. Nov. 1, 1986.
§181005. Incorporators How Corporation Formed Purposes.
INCORPORATORS; HOW CORPORATION FORMED; PURPOSES
A. Any person, partnership, association or corporation, singly or jointly with others, and without regard to his or their residence, domicile or state of incorporation, may incorporate or organize a corporation pursuant to the provisions of the Oklahoma General Corporation Act by filing with the Secretary of State a certificate of incorporation which shall be executed, acknowledged and filed in accordance with the provisions of Section 7 of this act; provided, however, at least three (3) persons, partnerships, associations, or corporations, or any combination thereof, shall be required to incorporate as a not for profit corporation pursuant to the provisions of the Oklahoma General Corporation Act.
B. A corporation may be incorporated or organized pursuant to the provisions of the Oklahoma General Corporation Act to conduct or promote any lawful business or purposes, except as may otherwise be provided by the Constitution or other law of this state.
C. Corporations for constructing, maintaining and operating public utilities, whether in or outside of this state, may be organized pursuant to the provisions of the Oklahoma General Corporation Act, but corporations for constructing, maintaining and operating public utilities within this state shall be subject to, in addition to the provisions of the Oklahoma General Corporation Act, the special provisions and requirements of Title 17 of the Oklahoma Statutes applicable to such corporations.
Added by Laws 1986, c. 292, § 5, eff. Nov. 1, 1986.
§18-1006. Certificate of incorporation - Contents.
CERTIFICATE OF INCORPORATION; CONTENTS
A. The certificate of incorporation shall set forth:
1. The name of the corporation which shall contain one of the words "association", "company", "corporation", "club", "foundation", "fund", "incorporated", "institute", "society", "union", "syndicate", or "limited" or abbreviations thereof, with or without punctuation, or words or abbreviations thereof, with or without punctuation, of like import of foreign countries or jurisdictions; provided that such abbreviations are written in Roman characters or letters, and which shall be such as to distinguish it upon the records in the Office of the Secretary of State from:
a. names of other corporations, whether domestic or foreign, then existing or which existed at any time during the preceding three (3) years,
b. names of partnerships whether general or limited, or domestic or foreign, then existing or which existed at any time during the preceding three (3) years,
c. names of limited liability companies, whether domestic or foreign, then existing or which existed at any time during the preceding three (3) years,
d. trade names or fictitious names filed with the Secretary of State, or
e. corporate, limited liability company or limited partnership names reserved with the Secretary of State;
2. The address, including the street, number, city and county, of the corporation's registered office in this state, and the name of the corporation's registered agent at such address;
3. The nature of the business or purposes to be conducted or promoted. It shall be sufficient to state, either alone or with other businesses or purposes, that the purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the general corporation law of Oklahoma, and by such statement all lawful acts and activities shall be within the purposes of the corporation, except for express limitations, if any;
4. If the corporation is to be authorized to issue only one class of stock, the total number of shares of stock which the corporation shall have authority to issue and the par value of each of such shares, or a statement that all such shares are to be without par value. If the corporation is to be authorized to issue more than one class of stock, the certificate of incorporation shall set forth the total number of shares of all classes of stock which the corporation shall have authority to issue and the number of shares of each class, and shall specify each class the shares of which are to be without par value and each class the shares of which are to have par value and the par value of the shares of each such class. The provisions of this paragraph shall not apply to corporations which are not organized for profit and which are not to have authority to issue capital stock. In the case of such corporations, the fact that they are not to have authority to issue capital stock shall be stated in the certificate of incorporation;
5. The name and mailing address of the incorporator or incorporators;
6. If the powers of the incorporator or incorporators are to terminate upon the filing of the certificate of incorporation, the names and mailing addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and qualify; and
7. If the corporation is not for profit:
a. that the corporation does not afford pecuniary gain, incidentally or otherwise, to its members as such,
b. the name and mailing address of each trustee or director,
c. the number of trustees or directors to be elected at the first meeting, and
d. in the event the corporation is a church, the street address of the location of the church.
The restriction on affording pecuniary gain to members shall not prevent a not-for-profit corporation operating as a cooperative from rebating excess revenues to patrons who may also be members.
B. In addition to the matters required to be set forth in the certificate of incorporation pursuant to the provisions of subsection A of this section, the certificate of incorporation may also contain any or all of the following matters:
1. Any provision for the management of the business and for the conduct of the affairs of the corporation, and any provision creating, defining, limiting and regulating the powers of the corporation, the directors, and the shareholders, or any class of the shareholders, or the members of a nonstock corporation, if such provisions are not contrary to the laws of this state. Any provision which is required or permitted by any provision of the Oklahoma General Corporation Act to be stated in the bylaws may instead be stated in the certificate of incorporation;
2. The following provisions, in substantially the following form: "Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its shareholders or any class of them, any court of equitable jurisdiction within the State of Oklahoma, on the application in a summary way of this corporation or of any creditor or shareholder thereof or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 1106 of this title or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 1100 of this title, may order a meeting of the creditors or class of creditors, and/or of the shareholders or class of shareholders of this corporation, as the case may be, to be summoned in such manner as the court directs. If a majority in number representing three-fourths (3/4) in value of the creditors or class of creditors, and/or of the shareholders or class of shareholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as a consequence of such compromise or arrangement, the compromise or arrangement and the reorganization, if sanctioned by the court to which the application has been made, shall be binding on all the creditors or class of creditors, and/or on all the shareholders or class of shareholders, of this corporation, as the case may be, and also on this corporation.";
3. Such provisions as may be desired granting to the holders of the stock of the corporation, or the holders of any class or series of a class thereof, the preemptive right to subscribe to any or all additional issues of stock of the corporation of any or all classes or series thereof, or to any securities of the corporation convertible into such stock. No shareholder shall have any preemptive right to subscribe to an additional issue of stock or to any security convertible into such stock unless, and except to the extent that, such right is expressly granted to him in the certificate of incorporation. Preemptive rights, if granted, shall not extend to fractional shares;
4. Provisions requiring, for any corporate action, the vote of a larger portion of the stock or of any class or series thereof, or of any other securities having voting power, or a larger number of the directors, than is required by the provisions of this act;
5. A provision limiting the duration of the corporation's existence to a specified date; otherwise, the corporation shall have perpetual existence;
6. A provision imposing personal liability for the debts of the corporation on its shareholders or members to a specified extent and upon specified conditions; otherwise, the shareholders or members of a corporation shall not be personally liable for the payment of the corporation's debts, except as they may be liable by reason of their own conduct or acts;
7. A provision eliminating or limiting the personal liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director:
a. for any breach of the director's duty of loyalty to the corporation or its shareholders,
b. for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law,
c. under Section 1053 of this title, or
d. for any transaction from which the director derived an improper personal benefit.
No such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective.
C. It shall not be necessary to set forth in the certificate of incorporation any of the powers conferred on corporations by the provisions of this act.
Added by Laws 1986, c. 292, § 6, eff. Nov. 1, 1986. Amended by Laws 1987, c. 183, § 1, eff. Nov. 1, 1987; Laws 1988, c. 323, § 5, eff. Nov. 1, 1988; Laws 1992, c. 99, § 1, eff. Sept. 1, 1992; Laws 1996, c. 69, § 3, eff. Nov. 1, 1996; Laws 2001, c. 405, § 2, eff. Nov. 1, 2001; Laws 2004, c. 255, § 2, eff. Nov. 1, 2004.
§18-1007. Execution, acknowledgment, filing and effective date of original certificate of incorporation and other instruments - Exceptions.
EXECUTION, ACKNOWLEDGMENT, FILING AND EFFECTIVE
DATE OF ORIGINAL CERTIFICATE OF INCORPORATION
AND OTHER INSTRUMENTS; EXCEPTIONS
A. Whenever any provision of the Oklahoma General Corporation Act requires any instrument to be filed in accordance with the provisions of this section or with the provisions of this act, the instrument shall be executed as follows:
1. The certificate of incorporation and any other instrument to be filed before the election of the initial board of directors, if the initial directors were not named in the certificate of incorporation, shall be signed by the incorporator or incorporators, or in case of any other instrument, the incorporator's or incorporators' successors and assigns. If any incorporator is not available by reason of death, incapacity, unknown address, or refusal or neglect to act, then any other instrument may be signed, with the same effect as if the incorporator had signed it, by any person for whom or on whose behalf the incorporator, in executing the certificate of incorporation, was acting directly or indirectly as employee or agent; provided that the other instrument shall state that the incorporator is not available and the reason therefor, that the incorporator in executing the certificate of incorporation was acting directly or indirectly as employee or agent for or on behalf of the person, and that the person's signature on the instrument is otherwise authorized and not wrongful;
2. All other instruments shall be executed:
a. by the chair or vice-chair of the board of directors, or by the president, or by a vicepresident, and attested by the secretary or an assistant secretary; or by officers as may be duly authorized to exercise the duties, respectively, ordinarily exercised by the president or vicepresident and by the secretary or an assistant secretary of a corporation,
b. if it appears from the instrument that there are no such officers, then by a majority of the directors or by those directors designated by the board,
c. if it appears from the instrument that there are no such officers or directors, then by the holders of record, or those designated by the holders of record, of a majority of all outstanding shares of stock, or
d. by the holders of record of all outstanding shares of stock.
B. Whenever any provision of this act requires any instrument to be acknowledged, that requirement is satisfied by either:
1. The formal acknowledgment by the person or one of the persons signing the instrument that it is his or her act and deed or the act and deed of the corporation, as the case may be, and that the facts stated therein are true. The acknowledgment shall be made before a person who is authorized by the law of the place of execution to take acknowledgments of deeds and who shall affix a seal of office, if any, to the instrument; or
2. The signature, without more, of the person or persons signing the instrument, in which case the signature or signatures shall constitute the affirmation or acknowledgment of the signatory, under penalty of perjury, that the instrument is his or her act and deed or the act and deed of the corporation, as the case may be, and that the facts stated therein are true.
C. Whenever any provision of this act requires any instrument to be filed in accordance with the provisions of this section or with the provisions of this act, the requirement means that:
1. Two signed instruments, one of which may be a conformed copy, shall be delivered to the Office of the Secretary of State;
2. All delinquent franchise taxes authorized by law to be collected by the Oklahoma Tax Commission shall be tendered to the Oklahoma Tax Commission as prescribed by Sections 1201 through 1214 of Title 68 of the Oklahoma Statutes;
3. All fees authorized by law to be collected by the Secretary of State in connection with the filing of the instrument shall be tendered to the Secretary of State; and
4. Upon delivery of the instrument, and upon tender of the required taxes and fees, the Secretary of State shall certify that the instrument has been filed in the Secretary of State's office by endorsing upon the signed instrument the word "Filed", and the date of its filing. This endorsement is the "filing date" of the instrument, and is conclusive of the date of its filing in the absence of actual fraud. Upon request, the Secretary of State shall also endorse the hour that the instrument was filed, which endorsement shall be conclusive of the hour of its filing in the absence of actual fraud. The Secretary of State shall thereupon file and index the endorsed instrument.
D. Any instrument filed in accordance with the provisions of subsection C of this section shall be effective upon its filing date. Any instrument may provide that it is not to become effective until a specified time subsequent to the time it is filed, but that date shall not be later than a time on the ninetieth day after the date of its filing. If any instrument filed in accordance with subsection C of this section provides for a future effective date or time and if the transaction is terminated or its terms are amended to change the future effective date or time prior to the future effective date or time, the instrument shall be terminated or amended by the filing, prior to the future effective date or time set forth in the instrument, of a certificate of termination or amendment of the original instrument, executed in accordance with subsection A of this section, which shall identify the instrument which has been terminated or amended and shall state that the instrument has been terminated or the manner in which it has been amended.
E. If another section of this act specifically prescribes a manner of executing, acknowledging, or filing a specified instrument or a time when an instrument shall become effective which differs from the corresponding provisions of this section, then the provisions of the other section shall govern.
F. Whenever any instrument authorized to be filed with the Secretary of State under any provision of this title has been so filed and is an inaccurate record of the corporate action therein referred to, or was defectively or erroneously executed, sealed, or acknowledged, the instrument may be corrected by filing with the Secretary of State a certificate of correction of the instrument which shall be executed, acknowledged and filed in accordance with the provisions of this section. The certificate of correction shall specify the inaccuracy or defect to be corrected and shall set forth the portion of the instrument in corrected form. The corrected instrument shall be effective as of the date the original instrument was filed, except as to those persons who are substantially and adversely affected by the correction and as to those persons the corrected instrument shall be effective from the filing date of the corrected instrument.
G. If any instrument authorized to be filed with the Secretary of State pursuant to any provision of this title is filed inaccurately or defectively, or is erroneously executed, sealed, or acknowledged, or is otherwise defective in any respect, the Secretary of State shall have no liability to any person for the preclearance for filing, the acceptance for filing, or the filing and indexing of such instrument.
H. When authorized by the rules of the Secretary of State, any signature on any instrument authorized to be filed with the Secretary of State under any provision of this title may be a facsimile signature, a conformed signature, or an electronically transmitted signature.
I. 1. If:
a. (1) together with the actual delivery of an instrument and tender of the required taxes and fees, there is delivered to the Secretary of State a separate affidavit, which in its heading shall be designated as an affidavit of extraordinary condition, attesting, on the basis of personal knowledge of the affiant or a reliable source of knowledge identified in the affidavit, that an earlier effort to deliver the instrument and tender taxes and fees was made in good faith, specifying the nature, date and time of the good faith effort and requesting that the Secretary of State establish the date and time as the filing date of the instrument, or
(2) upon the actual delivery of an instrument and tender of the required taxes and fees, the Secretary of State in his or her discretion provides a written waiver of the requirement for an affidavit stating that it appears to the Secretary of State that an earlier effort to deliver the instrument and tender the taxes and fees was made in good faith and specifying the date and time of the effort, and
b. the Secretary of State determines that an extraordinary condition existed at that date and time, that the earlier effort was unsuccessful as a result of the existence of an extraordinary condition, and that the actual delivery and tender were made within a reasonable period, not to exceed two (2) business days, after the cessation of the extraordinary condition,
then the Secretary of State may establish the date and time as the filing date of the instrument. No fee shall be paid to the Secretary of State for receiving an affidavit of extraordinary condition.
2. For purposes of this subsection, an extraordinary condition means: any emergency resulting from an attack on, invasion or occupation by foreign military forces of, or disaster, catastrophe, war or other armed conflict, revolution or insurrection, or rioting or civil commotion in, the United States or a locality in which the Secretary of State conducts its business or in which the good faith effort to deliver the instrument and tender the required taxes and fees is made, or the immediate threat of any of the foregoing; or any malfunction or outage of the electrical or telephone service to the Secretary of State's office, or weather or other condition in or about a locality in which the Secretary of State conducts its business, as a result of which the Secretary of State's office is not open for the purpose of the filing of instruments under this act or the filing cannot be effected without extraordinary effort. The Secretary of State may require such proof as it deems necessary to make the determination required under subparagraph b of paragraph 1 of this subsection, and any determination shall be conclusive in the absence of actual fraud.
3. If the Secretary of State establishes the filing date of an instrument pursuant to this subsection, the date and time of delivery of the affidavit of extraordinary condition or the date and time of the Secretary of State's written waiver of the affidavit shall be endorsed on the affidavit or waiver and the affidavit or waiver, so endorsed, shall be attached to the filed instrument to which it relates. The filed instrument shall be effective as of the date and time established as the filing date by the Secretary of State pursuant to this subsection, except as to those persons who are substantially and adversely affected by the establishment and, as to those persons, the instrument shall be effective from the date and time endorsed on the affidavit of extraordinary condition or written waiver attached thereto.
Added by Laws 1986, c. 292, § 7, eff. Nov. 1, 1986. Amended by Laws 1990, c. 328, § 2, eff. Sept. 1, 1990; Laws 1991, c. 331, § 54, eff. Sept. 1, 1991; Laws 1998, c. 422, § 1, eff. Nov. 1, 1998; Laws 2001, c. 405, § 3, eff. Nov. 1, 2001; Laws 2004, c. 255, § 3, eff. Nov. 1, 2004.
§181008. Certificate of Incorporation Definition.
CERTIFICATE OF INCORPORATION; DEFINITION
The term "certificate of incorporation", as used in the Oklahoma General Corporation Act, unless the context requires otherwise, includes not only the original certificate of incorporation filed to create a corporation but also all other certificates, agreements of merger or consolidation, plans of reorganization, or other instruments, howsoever designated, which are filed pursuant to the provisions of Sections 6, 23 through 26, 32, 76 through 80, 81 through 87, or 118 of this act, or any other section of Title 18 of the Oklahoma Statutes, and which have the effect of amending or supplementing in some respect a corporation's original certificate of incorporation.
Added by Laws 1986, c. 292, § 8, eff. Nov. 1, 1986.
§181009. Certificate of Incorporation and Other Certificates Evidence.
CERTIFICATE OF INCORPORATION AND OTHER CERTIFICATES; EVIDENCE
A copy of a certificate of incorporation, or of a restated certificate of incorporation, or of any other certificate which has been filed in the Office of the Secretary of State as required by any provision of Title 18 of the Oklahoma Statutes, when duly certified by the Secretary of State, shall be received in all courts, public offices, and official bodies as prima facie evidence of:
1. Due execution, acknowledgment and filing of the instrument;
2. Observance and performance of all acts and conditions necessary to have been observed and performed precedent to the instrument becoming effective; and
3. Of any other facts required or permitted by law to be stated in the instrument.
Added by Laws 1986, c. 292, § 9, eff. Nov. 1, 1986.
§181010. Commencement of Corporate Existence.
COMMENCEMENT OF CORPORATE EXISTENCE
Upon the filing with the Secretary of State of the certificate of incorporation, executed and acknowledged in accordance with the provisions of Section 7 of this act, the incorporator or incorporators who signed the certificate, and his or their successors and assigns, from the date of such filing, shall be and constitute a body corporate by the name set forth in the certificate, subject to the provisions of subsection D of Section 7 of this act and subject to dissolution or other termination of its existence as provided for in the Oklahoma General Corporation Act.
Added by Laws 1986, c. 292, § 10, eff. Nov. 1, 1986.
§181011. Powers of Incorporators.
POWERS OF INCORPORATORS
If the persons who are to serve as directors until the first annual meeting of shareholders have not been named in the certificate of incorporation, the incorporator or incorporators, until the directors are elected, shall manage the affairs of the corporation and may do whatever is necessary and proper to perfect the organization of the corporation, including the adoption of the original bylaws of the corporation and the election of directors.
Added by Laws 1986, c. 292, § 11, eff. Nov. 1, 1986.
§181012. Organization Meeting of Incorporators or Directors Named in Certificate of Incorporation.
ORGANIZATION MEETING OF INCORPORATORS OR DIRECTORS NAMED
IN CERTIFICATE OF INCORPORATION
A. After the filing of the certificate of incorporation, an organization meeting of the incorporator or incorporators, or of the board of directors if the initial directors were named in the certificate of incorporation, shall be held either within or without this state at the call of a majority of the incorporators or directors, as the case may be, for the purposes of adopting bylaws, electing directors if the meeting is of the incorporators, to serve or hold office until the first annual meeting of shareholders or until their successors are elected and qualify, electing officers if the meeting is of the directors, doing any other or further acts to perfect the organization of the corporation, and transacting such other business as may come before the meeting.
B. The persons calling the meeting shall give to each other incorporator or director, as the case may be, at least two (2) days' written notice thereof by any usual means of communication, which notice shall state the time, place and purposes of the meeting as fixed by the persons calling it. Notice of the meeting need not be given to anyone who attends the meeting or who signs a waiver of notice either before or after the meeting.
C. Any action permitted to be taken at the organization meeting of the incorporators or directors, as the case may be, may be taken without a meeting if each incorporator or director, where there is more than one, or the sole incorporator or director where there is only one, signs an instrument which states the action so taken.
Added by Laws 1986, c. 292, § 12, eff. Nov. 1, 1986.
§18-1013. Bylaws.
BYLAWS
A. The original or other bylaws of a corporation may be adopted, amended or repealed by the incorporators, by the initial directors if they were named in the certificate of incorporation, or, before a corporation has received any payment for any of its stock, by its board of directors. After a corporation has received any payment for any of its stock, except as otherwise provided in its certificate of incorporation, the power to adopt, amend or repeal bylaws shall be in the board of directors, or, in the case of a nonstock corporation, in its governing body.
B. The bylaws may contain any provision, not inconsistent with law or with the certificate of incorporation, relating to the business of the corporation, the conduct of its affairs, and its rights or powers or the rights or powers of its shareholders, directors, officers or employees.
Added by Laws 1986, c. 292, § 13, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 5, eff. Nov. 1, 2001; Laws 2004, c. 255, § 4, eff. Nov. 1, 2004.
§18-1014. Emergency bylaws and other powers in emergency.
EMERGENCY BYLAWS AND OTHER POWERS IN EMERGENCY
A. The board of directors of any corporation may adopt emergency bylaws which, notwithstanding any different provision in the Oklahoma General Corporation Act, in the certificate of incorporation, or bylaws, shall be operative during any emergency resulting from an attack on the United States or on a locality in which the corporation conducts its business or customarily holds meetings of its board of directors or its shareholders, or during any nuclear or atomic disaster, or during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the board of directors or a standing committee thereof cannot readily be convened for action. The emergency bylaws may make any provision that may be practical and necessary for the circumstances of the emergency, including provisions that:
1. A meeting of the board of directors or a committee thereof may be called by an officer or director in such manner and under such conditions as shall be prescribed in the emergency bylaws;
2. The director or directors in attendance at the meeting, or any greater number fixed by the emergency bylaws, shall constitute a quorum; and
3. The officers or other persons designated on a list approved by the board of directors before the emergency, all in such order of priority and subject to such conditions and for such period of time, not longer than reasonably necessary after the termination of the emergency, as may be provided in the emergency bylaws or in the resolution approving the list, shall, to the extent required to provide a quorum at any meeting of the board of directors, be deemed directors for such meeting.
B. The board of directors, either before or during any such emergency, may provide, and from time to time modify, lines of succession in the event that during such emergency any or all officers or agents of the corporation shall for any reason be rendered incapable of discharging their duties.
C. The board of directors, either before or during any such emergency, may, effective in the emergency, change the head office or designate several alternative head offices or regional offices, or authorize the officers to do so.
D. No officer, director or employee acting in accordance with any emergency bylaws shall be liable except for willful misconduct.
E. To the extent not inconsistent with any emergency bylaws so adopted, the bylaws of the corporation shall remain in effect during any emergency and upon its termination the emergency bylaws shall cease to be operative.
F. Unless otherwise provided in emergency bylaws, notice of any meeting of the board of directors during such an emergency may be given only to such of the directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication or radio.
G. To the extent required to constitute a quorum at any meeting of the board of directors during such an emergency, the officers of the corporation who are present shall, unless otherwise provided in emergency bylaws, be deemed, in order of rank and within the same rank in order of seniority, directors for such meeting.
H. Nothing contained in this section shall be deemed exclusive of any other provisions for emergency powers consistent with other sections of this act which have been or may be adopted by corporations created pursuant to the provisions of this act.
Added by Laws 1986, c. 292, § 14, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 5, eff. Nov. 1, 2001.
§18-1014.1. Interpretation and enforcement of the certificate of
incorporation and bylaws.
INTERPRETATION AND ENFORCEMENT OF THE
CERTIFICATE OF INCORPORATION AND BYLAWS
Any shareholder, member or director may bring an action to interpret, apply or enforce the provisions of the certificate of incorporation or the bylaws of a domestic corporation in the district court.
Added by Laws 2001, c. 405, § 6, eff. Nov. 1, 2001.
§181015. General Powers.
GENERAL POWERS
In addition to the powers enumerated in Section 16 of this act, every corporation, its officers, directors and shareholders shall possess and may exercise all the powers and privileges granted by the provisions of the Oklahoma General Corporation Act or by any other law or by its certificate of incorporation, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business or purposes set forth in its certificate of incorporation.
Added by Laws 1986, c. 292, § 15, eff. Nov. 1, 1986.
§18-1016. Specific powers.
SPECIFIC POWERS
Every corporation created pursuant to the provisions of the Oklahoma General Corporation Act shall have power to:
1. Have perpetual succession by its corporate name, unless a limited period of duration is stated in its certificate of incorporation;
2. Sue and be sued in all courts and participate, as a party or otherwise, in any judicial, administrative, arbitrative or other proceeding, in its corporate name;
3. Have a corporate seal, which may be altered at pleasure, and use the same by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced;
4. Purchase, receive, take by grant, gift, devise, bequest or otherwise, lease or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with real or personal property, or any interest therein, wherever situated and to sell, convey, lease, exchange, transfer or otherwise dispose of, or mortgage or pledge, all or any of its property and assets, or any interest therein, wherever situated, subject to the limitations prescribed by Section 2 of Article XXII of the Oklahoma Constitution and Section 1020 of this title;
5. Appoint or elect such officers and agents as the business of the corporation requires and to pay or otherwise provide for them suitable compensation;
6. Adopt, amend and repeal bylaws;
7. Wind up and dissolve itself in the manner provided for in this act;
8. Conduct its business, carry on its operations, and have offices and exercise its powers within or without this state;
9. Make donations for the public welfare or for charitable, scientific or educational purposes, and in time of war or other national emergency in aid thereof;
10. Be an incorporator, promoter or manager of other corporations of any type or kind;
11. Participate with others in any corporation, partnership, limited partnership, joint venture or other association of any kind, or in any transaction, undertaking or arrangement which the participating corporation would have power to conduct by itself, whether or not such participation involves sharing or delegation of control with or to others;
12. Transact any lawful business which the corporation's board of directors shall find to be in aid of governmental authority;
13. Make contracts, including contracts of guaranty and suretyship, incur liabilities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds and other obligations, and secure any of its obligations by mortgage, pledge or other encumbrance of all or any of its property, franchises and income, and make contracts of guaranty and suretyship which are necessary or convenient to the conduct, promotion or attainment of the business of:
a. a corporation, all of the outstanding stock of which is owned, directly or indirectly, by the contracting corporation,
b. a corporation which owns, directly or indirectly, all of the outstanding stock of the contracting corporation, or
c. a corporation, all of the outstanding stock of which is owned, directly or indirectly, by a corporation which owns, directly or indirectly, all of the outstanding stock of the contracting corporation, which contracts of guaranty and suretyship shall be deemed to be necessary or convenient to the conduct, promotion or attainment of the business of the contracting corporation, and to make other contracts of guaranty and suretyship which are necessary or convenient to the conduct, promotion or attainment of the business of the contracting corporation;
14. Lend money for its corporate purposes, invest and reinvest its funds, and take, hold and deal with real and personal property as security for the payment of funds so loaned or invested;
15. Pay pensions and establish and carry out pension, profit sharing, stock option, stock purchase, stock bonus, retirement, benefit, incentive and compensation plans, trusts and provisions for any or all of its directors, officers, and employees, and for any or all of the directors, officers, and employees of its subsidiaries;
16. Provide insurance for its benefit on the life of any of its directors, officers, or employees, or on the life of any shareholder for the purpose of acquiring at his death shares of its stock owned by such shareholder; and
17. Renounce in its certificate of incorporation or by action of its board of directors any interest or expectancy of the corporation in, or in being offered an opportunity to participate in, specified business opportunities or specified classes or categories of business opportunities that are presented to the corporation or one or more of its officers, directors or shareholders.
Added by Laws 1986, c. 292, § 16, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 7, eff. Nov. 1, 2001.
§181017. Powers respecting securities of other corporations or entities.
POWERS RESPECTING SECURITIES OF
OTHER CORPORATIONS OR ENTITIES
Any corporation organized under the laws of this state may guarantee, purchase, take, receive, subscribe for or otherwise acquire; own, hold, use or otherwise employ; sell, lease, exchange, transfer, or otherwise dispose of; mortgage, lend, pledge or otherwise deal in and with, bonds and other obligations of, or shares or other securities or interests in, or issued by, any other domestic or foreign corporation, partnership, association, or individual, or by any government or agency or instrumentality thereof, subject to the limitation prescribed by Section 41 of Article IX of the Oklahoma Constitution. A corporation while the owner of any such securities may exercise all the rights, powers and privileges of ownership, including the right to vote.
Added by Laws 1986, c. 292, § 17, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 1, operative Nov. 1, 1987.
§181018. Lack of Corporate Capacity or Power, Effect Ultra Vires.
LACK OF CORPORATE CAPACITY OR POWER, EFFECT; ULTRA VIRES
No act of a corporation and no conveyance or transfer of real or personal property to or by a corporation shall be invalid by reason of the fact that the corporation was without capacity or power to do such act or to make or receive such conveyance or transfer, but such lack of capacity or power may be asserted:
1. In a proceeding by a shareholder against the corporation to enjoin the doing of any act or acts or the transfer of real or personal property by or to the corporation. If the unauthorized acts or transfer sought to be enjoined are being, or are to be, performed or made pursuant to any contract to which the corporation is a party, the court, if all of the parties to the contract are parties to the proceeding and if it deems the same to be equitable, may set aside and enjoin the performance of such contract, and in so doing, may allow to the corporation or to the other parties to the contract, as the case may be, such compensation as may be equitable for the loss or damage sustained by any of them which may result from the action of the court in setting aside and enjoining the performance of such contract. Anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained;
2. In a proceeding by the corporation, whether acting directly or through a receiver, trustee, or other legal representative, or through shareholders in a representative suit, against an incumbent or former officer or director of the corporation for loss or damage due to his unauthorized act; or
3. In a proceeding by the Attorney General to dissolve the corporation, or to enjoin the corporation from the transaction of unauthorized business.
Added by Laws 1986, c. 292, § 18, eff. Nov. 1, 1986.
§181019. Private foundations; powers and duties.
PRIVATE FOUNDATIONS; POWERS AND DUTIES
A corporation of this state which is a private foundation under the United States internal revenue laws and whose certificate of incorporation does not expressly provide that this section shall not apply to it is required to act or to refrain from acting so as not to subject itself to the taxes imposed by Sections 4941, relating to taxes on selfdealing, 4942, relating to taxes on failure to distribute income, 4943, relating to taxes on excess business holdings, 4944, relating to taxes on investments which jeopardize charitable purpose, or 4945, relating to taxable expenditures, of the Internal Revenue Code of 1954, as amended, or corresponding provisions of any subsequent United States internal revenue law.
Added by Laws 1986, c. 292, § 19, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 2, operative Nov. 1, 1987.
§181020. Limitations Upon Real Estate Ownership.
LIMITATIONS UPON REAL ESTATE OWNERSHIP
A. No corporation of any sort, whether coming within the general scope of the Oklahoma General Corporation Act or not, except as provided for in this section, shall own, hold, or take any real estate located in this state outside of any incorporated city or town, or any addition thereto.
B. The provisions of the Oklahoma General Corporation Act shall not be construed to prohibit the owning, holding or taking of: 1. Such real estate as is necessary and proper for carrying on the business for which any corporation has been lawfully formed or domesticated in this state;
2. Naked title to real estate by any trust company, as trustee, to be held solely as security for indebtedness pursuant to such trust or as trustee of an express or testamentary trust for the benefit of natural persons;
3. Any real estate mortgage held by any corporation to secure any loan or debt; 4. Any real estate acquired by any corporation upon the foreclosure of any real estate mortgage held by such corporation or acquired in the collection of any loan or debt due such corporation, except as provided for in subsection C of this section; or
5. Any real estate acquired by any corporation for lease or sale to any other corporation, if such latter corporation could have legally acquired the same in the first instance.
C. Any real estate located in this state outside of any incorporated city or town, or any addition thereto, acquired by any corporation by mortgage foreclosure or in collection of debt as provided for in paragraph 4 of subsection B of this section, shall be sold and disposed of within seven (7) years from such acquisition.
D. The provisions of subsections A through C of this section shall not apply to religious, educational, charitable or scientific corporations, owning or holding taxable property.
E. 1. Any person who takes or holds any real estate for the use or benefit of any corporation with the intent of evading the provisions of this section, shall, upon conviction, be deemed guilty of a misdemeanor and punished by a fine of not less than Fifty Dollars ($50.00) nor more than Five Hundred Dollars ($500.00) or by imprisonment in the county jail for a term not less than thirty (30) days nor more than six (6) months, or by both such fine and imprisonment.
2. Any corporation that fails or refuses to file a statement as required by the provisions of subsection F of this section shall, upon conviction, be deemed guilty of a misdemeanor and punished by a fine not exceeding One Thousand Dollars ($1,000.00).
F. 1. On or before the first day of April of each year, every corporation holding any real estate in contravention of the provisions of this section shall file in the office of the county clerk of each county where such real estate is located, a statement in duplicate containing the legal description of each tract, piece, or parcel of real estate so owned or acquired, the date of the acquisition of each tract, piece, or parcel, the amount of the last preceding assessed valuation thereof and the purpose and method of the acquisition thereof. The statement shall be verified by the oath of an officer or duly appointed agent of the corporation.
2. The county clerk shall keep a permanent index and record of each statement filed by corporations pursuant to the provisions of this subsection in a permanent record book, which shall be in the form prescribed by the State Auditor and Inspector. One copy of each statement so filed shall be retained as a part of the permanent records of the office of the county clerk.
3. Within thirty (30) days after the statement provided for in paragraph 1 of this subsection is filed, the county clerk shall deliver the other duplicate to the district attorney of such county. G. 1. Any corporation owning or holding any real estate in violation of the provisions of subsections A through E of this section, in addition to other penalties provided for in the Oklahoma General Corporation Act, shall be required to pay, for each year, or fraction thereof, during which such title or interest is thus unlawfully owned or held, the following penalties:
a. For the first year, one percent (1%) of the assessed value of such real estate unlawfully owned or held;
b. For the second year, two percent (2%) thereof;
c. For the third year, three percent (3%) thereof;
d. For the fourth year, four percent (4%) thereof;
e. For the fifth year, five percent (5%) thereof;
f. For the sixth year, six percent (6%) thereof; and
g. For each year thereafter, six percent (6%) thereof.
2. Provided, however, that no corporation shall be subject to more than one penalty, for each calendar year, for each tract, piece or parcel of real estate thus held in violation of the provisions of this section, but the penalties provided for in paragraph 1 of this subsection shall be cumulative.
3. In determining the penalty under this subsection, the assessed value of the real estate fixed for the purpose of levying ad valorem taxes, which last shall have become due and payable preceding the date of the accrual of such penalty, shall be taken.
4. The penalties, upon collection, shall be immediately paid over to the Commissioners of the Land Office for credit to the permanent school fund of this state created pursuant to Section 2 of Article XI of the Oklahoma Constitution.
5. The state shall have a lien against any piece, parcel or tract of real estate to secure the payment of all penalties, interest, and fees accruing from such unlawful owning or holding of any such real estate; provided, that such lien shall not attach thereto, or in any way affect the title thereof, until an action to subject such real estate to such lien and a foreclosure thereof has been instituted in the district court of the county where such real estate is located. Filing of such action shall be notice lis pendens and anyone thereafter acquiring any such real estate shall take it subject to such lien.
H. 1. Whenever the district attorney of any county has reason to believe that any real estate located in such county is owned or held by a corporation in violation of the provisions of this section, the district attorney shall give written notice to such corporation that:
a. it is subject to the penalties provided for in this section;
b. such penalties must be paid to the district attorney within thirty (30) days from the date of such notice; and
c. there is additionally due and payable to the district attorney a collection fee equal to fifteen percent (15%) of the total penalties collected as to any tract, piece or parcel of real estate which is unlawfully owned or held. If the institution of an action is necessary to procure a judgment for the collection of such penalties, the collection fee shall be increased to twentyfive percent (25%) of the penalty recovered, and in no event less than One Hundred Dollars ($100.00). Such fee shall be retained by the district attorney as remuneration for services rendered in collecting such penalties, which shall be in addition to any compensation otherwise provided for by law.
2. In the event such penalty shall not be paid within thirty (30) days from the date of such notice, the district attorney shall institute an action in the name of the state in the district court of the county where such real estate is located for the recovery of the penalties, together with interest thereon at the rate of ten percent (10%) per annum from the date of such notice, the collection fee provided for in paragraph 1 of this subsection, all costs of the action, and for a further judgment establishing and foreclosing any lien created pursuant to the provisions of paragraph 5 of subsection G of this section, unless the real estate which is alleged to have been unlawfully owned or held, is disposed of prior to the commencement of the action.
a. The petition in such case shall set forth:
(1) a description of the real estate which is alleged to have been unlawfully owned or held;
(2) the names, as defendants, of the corporation and all persons alleged to be unlawfully holding the real estate;
(3) if the establishment and foreclosure of a lien upon such real estate is sought in the action, the names as defendants, of all persons claiming real estate, including all tenants and persons in actual possession thereof; and
(4) the facts and circumstances in consequence of which it is alleged that such real estate is owned or held in violation of the provisions of this section.
b. The filing of such petition, and all other procedures relating thereto, in all respects shall be governed by and subject to the same laws as in other civil actions.
c. If the state recovers a judgment against such corporation in such action, the judgment shall include and be entered for:
(1) the amount of the penalties for which the corporation is found liable pursuant to the provisions of this section;
(2) interest on such penalties at the rate of ten percent (10%) per annum from the date such penalties become due and receivable pursuant to the written notice provided for in paragraph 1 of this subsection;
(3) a collection fee of twentyfive percent (25%) of such penalties recovered, which fee shall not be less than One Hundred Dollars ($100.00);
(4) the entire costs of the action; and
(5) if the establishment and foreclosure of a lien upon the real estate is prayed for in the petition, a decree establishing such lien upon such real estate and an order of foreclosure.
d. Upon the judgment becoming final, an execution shall issue for the collection thereof.
Added by Laws 1986, c. 292, § 20, eff. Nov. 1, 1986.
§181021. Registered Office in State Principal Office or Place of Business In State.
REGISTERED OFFICE IN STATE; PRINCIPAL OFFICE
OR PLACE OF BUSINESS IN STATE
A. Every corporation shall have and maintain in this state a registered office which may, but need not be, the same as its place of business.
B. Whenever the term "corporation's principal office or place of business in this state" or "principal office or place of business of the corporation in this state", or other term of like import, is or has been used in a corporation's certificate of incorporation, or in any other document, or in any statute, it shall be deemed to mean and refer to, unless the context indicates otherwise, the corporation's registered office required by this section. It shall not be necessary for any corporation to amend its certificate of incorporation or any other document to comply with the provisions of this section.
Added by Laws 1986, c. 292, § 21, eff. Nov. 1, 1986.
§18-1022. Registered Agent in State - Resident Agent.
REGISTERED AGENT IN STATE; RESIDENT AGENT
A. Every domestic corporation shall have and maintain in this state a registered agent, which agent may be either:
1. The domestic corporation itself;
2. An individual resident of this state; or
3. A domestic or qualified foreign corporation, limited liability company, limited liability partnership, or limited partnership. Each registered agent shall maintain a business office identical with the registered office which is open during regular business hours to accept service of process and otherwise perform the functions of a registered agent.
B. Every foreign corporation transacting business in this state shall have and maintain the Secretary of State as its registered agent in this state. In addition, such foreign corporation may have and maintain in this state a registered agent, which agent may be either:
1. An individual resident of this state; or
2. A domestic or qualified foreign corporation, limited liability company, limited liability partnership, or limited partnership. Each registered agent shall maintain a business office identical with the registered office which is open during regular business hours to accept service of process and otherwise perform the functions of a registered agent. If such additional registered agent is designated, service of process shall be on such agent and not on the Secretary of State.
C. Whenever the term "resident agent" or "resident agent in charge of a corporation's principal office or place of business in this state", or other term of like import which refers to a corporation's agent required by statute to be located in this state, is or has been used in a corporation's certificate of incorporation, or in any other document, or in any statute, it shall be deemed to mean and refer to, unless the context indicates otherwise, the corporation's registered agent required by this section. It shall not be necessary for any corporation to amend its certificate of incorporation or any other document to comply with the provisions of this section.
Added by Laws 1986, c. 292, § 22, eff. Nov. 1, 1986. Amended by Laws 1998, c. 422, § 2, eff. Nov. 1, 1998; Laws 2004, c. 255, § 5, eff. Nov. 1, 2004.
§181023. Change of location of registered office; change of registered agent.
CHANGE OF LOCATION OF REGISTERED OFFICE;
CHANGE OF REGISTERED AGENT
Any corporation, by resolution of its board of directors, may change the location of its registered office in this state to any other place in this state. By like resolution, the registered agent of a corporation may be changed to any other person or corporation, including itself. In either such case, the resolution shall be as detailed in its statement as is required by the provisions of paragraph 2 of subsection A of Section 1006 of this title. Upon the adoption of such a resolution, a certificate certifying the change shall be executed, acknowledged and filed in accordance with the provisions of Section 1007 of this title.
Added by Laws 1986, c. 292, § 23, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 3, operative Nov. 1, 1987; Laws 1990, c. 328, § 3, eff. Sept. 1, 1990.
§181024. Change of Address or Name of Registered Agent.
CHANGE OF ADDRESS OR NAME OF REGISTERED AGENT
A. A registered agent may change the address of the registered office of the corporation or corporations for which he or she is the registered agent to another address in this state by filing with the Secretary of State a certificate in the name of each affected corporation, executed and acknowledged by the registered agent, setting forth the name of the corporation represented by the registered agent, the new address to which the registered office will be changed at which the registered agent will maintain the registered office for the corporation recited in the certificate.
B. In the event of a change of name of any person or corporation acting as registered agent in this state, the registered agent shall file with the Secretary of State a certificate in the name of each affected corporation, executed and acknowledged by the registered agent, setting forth the new name of the registered agent, the name of the registered agent before it was changed, the name of the corporation represented by the registered agent, and the address of the registered office for the corporation.
Added by Laws 1986, c. 292, § 24, eff. Nov. 1, 1986. Amended by Laws 1999, c. 421, § 8, eff. Nov. 1, 1999.
§18-1025. Resignation of Registered Agent Coupled with Appointment of Successor.
RESIGNATION OF REGISTERED AGENT COUPLED
WITH APPOINTMENT OF SUCCESSOR
The registered agent of one or more corporations may resign and appoint a successor registered agent by filing in the name of each affected corporation a certificate with the Secretary of State stating the name and address of the successor agent, in accordance with the provisions of paragraph 2 of subsection A of Section 1006 of this title. There shall be attached to the certificate a statement of the affected corporation ratifying and approving such change of registered agent. The statement shall be executed and acknowledged in accordance with the provisions of Section 1007 of this title. Upon the filing, the successor registered agent becomes the registered agent of each corporation that has ratified and approved each substitution and the successor registered agent's address, as stated in each certificate, becomes the address of each such corporation's registered office in this state. The Secretary of State shall then issue his or her certificate that the successor registered agent has become the registered agent of the corporations so ratifying and approving the change, and setting out the names of such corporations.
Added by Laws 1986, c. 292, § 25, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 6, eff. Nov. 1, 2004.
§181026. Resignation of registered agent not coupled with appointment of successor; absence of registered agent.
RESIGNATION OF REGISTERED AGENT NOT COUPLED
WITH APPOINTMENT OF SUCCESSOR; ABSENCE OF REGISTERED AGENT
A. The registered agent of one or more corporations may resign without appointing a successor by filing in the name of each affected corporation a certificate of resignation with the Secretary of State; but a resignation shall not become effective until thirty (30) days after each certificate is filed. The certificate shall:
1. Be acknowledged by the registered agent;
2. Contain a statement that written notice of resignation was given to the corporation at least thirty (30) days prior to the filing of the certificate by mailing or delivering the notice to the corporation at its address last known to the registered agent and specify such address therein; and
3. Set forth the date the notice was mailed.
B. 1. After receipt of the notice of the resignation of its registered agent provided for in subsection A of this section, the corporation for which the registered agent was acting may obtain and designate a new registered agent in the same manner as provided for in Section 1023 of this title for a change of registered agent.
2. If a domestic corporation fails to obtain and designate a new registered agent prior to the expiration of the period of thirty (30) days after the filing by the registered agent of the certificate of resignation, the Secretary of State shall be deemed to be the registered agent of such corporation until a new registered agent is designated. The Office of the Secretary of State shall charge the fee prescribed by Section 1142 of this title for acting as registered agent.
C. After the resignation of a registered agent has become effective, if no new registered agent has been obtained and designated in the time and manner required, service of legal process against the corporation for which the resigned registered agent had been acting shall be upon the Secretary of State as provided in Section 2004 of Title 12 of the Oklahoma Statutes.
Added by Laws 1986, c. 292, § 26, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 6, eff. Nov. 1, 1988; Laws 1991, c. 331, § 55, eff. Sept. 1, 1991; Laws 1998, c. 422, § 3, eff. Nov. 1, 1998.
§18-1027. Board of directors - Powers - Number - Qualifications - Terms and quorum - Committees - Classes of directors - Not for profit corporations - Reliance upon books - Action without meeting - Etc.
BOARD OF DIRECTORS; POWERS; NUMBER; QUALIFICATIONS; TERMS
AND QUORUM; COMMITTEES; CLASSES OF DIRECTORS; NOT FOR PROFIT
CORPORATIONS; RELIANCE UPON BOOKS; ACTION WITHOUT MEETING; ETC.
A. The business and affairs of every corporation organized in accordance with the provisions of the Oklahoma General Corporation Act shall be managed by or under the direction of a board of directors, except as may be otherwise provided for in this act or in the corporation's certificate of incorporation. If any provision is made in the certificate of incorporation, the powers and duties conferred or imposed upon the board of directors by the provisions of this act shall be exercised or performed to the extent and by the person or persons stated in the certificate of incorporation.
B. The board of directors of a corporation shall consist of one or more members, each of whom shall be a natural person. The number of directors shall be fixed by or in the manner provided for in the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number of directors shall be made only by amendment of the certificate. Directors need not be shareholders unless so required by the certificate of incorporation or the bylaws. The certificate of incorporation or bylaws may prescribe other qualifications for directors. Each director shall hold office until a successor is elected and qualified or until his or her earlier resignation or removal. Any director may resign at any time upon notice given in writing or by electronic transmission to the corporation. A majority of the total number of directors shall constitute a quorum for the transaction of business unless the certificate of incorporation or the bylaws require a greater number. Except as provided in subsection G of this section, neither the certificate of incorporation nor the bylaws may provide that a quorum may be less than onethird (1/3) of the total number of directors. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless the certificate of incorporation or the bylaws shall require a vote of a greater number.
C. 1. The board of directors may designate one or more committees consisting of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. The bylaws may provide that in the absence or disqualification of a member of a committee, the member or members present at a meeting and not disqualified from voting, whether or not the member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent provided in the resolution of the board of directors, or in the bylaws of the corporation, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no committee shall have the power or authority to:
a. approve, adopt, or recommend to the shareholders any action or matter expressly required by this act to be submitted to shareholders for approval, or
b. adopt, amend, or repeal any bylaw of the corporation.
2. Unless otherwise provided in the certificate of incorporation, the bylaws or the resolution of the board of directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
D. The directors of any corporation organized in accordance with the provisions of this act, by the certificate of incorporation or by an initial bylaw, or by a bylaw adopted by the board of directors and approved by a vote of the shareholders, may be divided into one, two, or three classes; the term of office of those of the first class to expire at the annual meeting next ensuing; of the second class one (1) year thereafter; of the third class two (2) years thereafter; and at each annual election held after classification and election, directors shall be chosen for a full term, as the case may be, to succeed those whose terms expire. The certificate of incorporation may confer upon holders of any class or series of stock the right to elect one or more directors who shall serve for the term, and have voting powers as shall be stated in the certificate of incorporation. The terms of office and voting powers of the directors elected in the manner so provided in the certificate of incorporation may be greater than or less than those of any other director or class of directors. If the certificate of incorporation provides that directors elected by the holders of a class or series of stock shall have more or less than one vote per director on any matter, every reference in this act to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of the directors.
E. A member of the board of directors, or a member of any committee designated by the board of directors, in the performance of the member's duties, shall be fully protected in relying in good faith upon the records of the corporation and upon information, opinions, reports, or statements presented to the corporation by any of the corporation's officers or employees, or committees of the board of directors, or by any other person as to matters the member reasonably believes are within the officer's, employee's, committee's or other person's competence and who have been selected with reasonable care by or on behalf of the corporation.
F. Unless otherwise restricted by the certificate of incorporation or bylaws:
1. Any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee; and the filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form;
2. The board of directors of any corporation organized in accordance with the provisions of this act may hold its meetings, and have an office or offices, outside of this state;
3. The board of directors shall have the authority to fix the compensation of directors; and
4. Members of the board of directors of any corporation, or any committee designated by the board, may participate in a meeting of the board or committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear or otherwise communicate with each other. Participation in a meeting pursuant to the provisions of this subsection shall constitute presence in person at the meeting.
G. 1. The certificate of incorporation of any corporation organized in accordance with the provisions of this act which is not authorized to issue capital stock may provide that less than onethird (1/3) of the members of the governing body may constitute a quorum thereof and may otherwise provide that the business and affairs of the corporation shall be managed in a manner different from that provided for in this section.
2. Except as may be otherwise provided by the certificate of incorporation, the provisions of this section shall apply to such a corporation, and when so applied, all references to the board of directors, to members thereof, and to shareholders shall be deemed to refer to the governing body of the corporation, the members thereof and the members of the corporation, respectively.
H. 1. Any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except as follows:
a. unless the certificate of incorporation otherwise provides, in the case of a corporation whose board is classified as provided for in subsection D of this section, shareholders may effect such removal only for cause, or
b. in the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against the director's removal would be sufficient to elect the director if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which the director is a part.
2. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the certificate of incorporation, the provisions of this subsection shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole.
I. A corporation may agree to submit a matter to a vote of its shareholders regardless of whether the board of directors determines at any time subsequent to approving the matter that the matter is no longer advisable and recommends that the shareholders reject or vote against the matter.
Added by Laws 1986, c. 292, § 27, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 7, eff. Nov. 1, 1988; Laws 1998, c. 422, § 4, eff. Nov. 1, 1998; Laws 2001, c. 405, § 8, eff. Nov. 1, 2001; Laws 2004, c. 255, § 7, eff. Nov. 1, 2004.
§181028. Officers Titles, Duties, Selection, Term Failure to Elect Vacancies.
OFFICERS; TITLES, DUTIES, SELECTION, TERM;
FAILURE TO ELECT; VACANCIES
A. Every corporation organized in accordance with the provisions of the Oklahoma General Corporation Act shall have such officers with such titles and duties as shall be stated in the bylaws or in a resolution of the board of directors which is not inconsistent with the bylaws and as may be necessary to enable it to sign instruments and stock certificates which comply with the provisions of paragraph 2 of subsection A of Section 7 and Section 39 of this act. One of the officers shall have the duty to record the proceedings of the meetings of the shareholders and directors in a book to be kept for that purpose. Any number of offices may be held by the same person unless the certificate of incorporation or bylaws provide otherwise.
B. Officers shall be chosen in such manner and shall hold their offices for such terms as are prescribed by the bylaws or determined by the board of directors or other governing body. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. Any officer may resign at any time upon written notice to the corporation.
C. The corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.
D. A failure to elect officers shall not dissolve or otherwise affect the corporation.
E. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise, shall be filled as the bylaws provide. In the absence of such provision, the vacancy shall be filled by the board of directors or other governing body.
Added by Laws 1986, c. 292, § 28, eff. Nov. 1, 1986.
§181029. Loans to Employees and Officers Guaranty of Obligations of Employees and Officers.
LOANS TO EMPLOYEES AND OFFICERS; GUARANTY OF OBLIGATIONS
OF EMPLOYEES AND OFFICERS
Any corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing contained in this section shall be construed to deny, limit or restrict the powers of guaranty or warranty of any corporation at common law or under any statute.
Added by Laws 1986, c. 292, § 29, eff. Nov. 1, 1986.
§181030. Interested Directors Quorum.
INTERESTED DIRECTORS; QUORUM
A. No contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if:
1. The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum;
2. The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or
3. The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee thereof, or the shareholders.
B. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction.
Added by Laws 1986, c. 292, § 30, eff. Nov. 1, 1986.
§181031. Indemnification of officers, directors, employees and agents; insurance.
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE
A. A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit, or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the conduct was unlawful.
B. A corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses, including attorneys' fees, actually and reasonably incurred by the person in connection with the defense or settlement of an action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue, or matter as to which the person shall have been adjudged to be liable to the corporation unless and only to the extent that the court in which the action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses which the court shall deem proper.
C. To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in subsection A or B of this section, or in defense of any claim, issue, or matter therein, the person shall be indemnified against expenses, including attorneys' fees, actually and reasonably incurred by the person in connection therewith.
D. Any indemnification under the provisions of subsection A or B of this section, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsection A or B of this section. This determination shall be made, with respect to a person who is a director or officer at the time of the determination:
1. By a majority vote of the directors who are not parties to the action, suit, or proceeding, even though less than a quorum;
2. By a committee of directors designated by a majority vote of directors, even though less than a quorum;
3. If there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or
4. By the shareholders.
E. Expenses incurred by an officer or director in defending a civil or criminal action, suit, or proceeding may be paid by the corporation in advance of the final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it shall ultimately be determined that the person is not entitled to be indemnified by the corporation as authorized by the provisions of this section. Expenses incurred by former directors or officers or other employees and agents may be paid upon the terms and conditions, if any, as the corporation deems appropriate.
F. The indemnification and advancement of expenses provided by or granted pursuant to the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding an office.
G. A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the corporation would have the power to indemnify the person against liability under the provisions of this section.
H. For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation, including any constituent of a constituent, absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees, or agents, so that any person who is or was a director, officer, employee, or agent of a constituent corporation, or is or was serving at the request of a constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would have with respect to the constituent corporation if its separate existence had continued.
I. For purposes of this section, references to "other enterprises" shall include, but are not limited to, employee benefit plans; references to "fines" shall include, but are not limited to, any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include, but are not limited to, any service as a director, officer, employee, or agent of the corporation which imposes duties on, or involves services, by the director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner the person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section.
J. The indemnification and advancement of expenses provided by or granted pursuant to this section, unless otherwise provided when authorized or ratified, shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of the person.
K. The district court is vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise. The court may summarily determine a corporation's obligation to advance expenses including attorneys' fees.
Added by Laws 1986, c. 292, § 31, eff. Nov. 1, 1986. Amended by Laws 1987, c. 183, § 2, eff. Nov. 1, 1987; Laws 1998, c. 422, § 5, eff. Nov. 1, 1998; Laws 1998, c. 422, § 5, eff. Nov. 1, 1998.
§18-1032. Classes and series of stock; rights, etc.
CLASSES AND SERIES OF STOCK; RIGHTS, ETC.
A. Every corporation may issue one or more classes of stock or one or more series of stock within any class thereof, any or all of which classes may be of stock with par value or stock without par value and which classes or series may have voting powers, full or limited, or no voting powers, and designations, preferences and relative, participating, optional, or other special rights, and qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the certificate of incorporation or of any amendment thereto, or in the resolution or resolutions providing for the issue of the stock adopted by the board of directors pursuant to authority expressly vested in it by the provisions of its certificate of incorporation. Any of the voting powers, designations, preferences, rights, and qualifications, limitations or restrictions of any class or series of stock may be made dependent upon facts ascertainable outside the certificate of incorporation or of any amendment thereto, or outside the resolution or resolutions providing for the issue of the stock adopted by the board of directors pursuant to authority expressly vested in it by the provisions of its certificate of incorporation; provided, that the manner in which the facts shall operate upon the voting powers, designations, preferences, rights, and qualifications, limitations, or restrictions of the class or series of stock is clearly and expressly set forth in the certificate of incorporation or in the resolution or resolutions providing for the issue of the stock adopted by the board of directors. The power to increase or decrease or otherwise adjust the capital stock as provided for in the Oklahoma General Corporation Act shall apply to all or any such classes of stock. The term "facts", as used in this subsection, includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
B. Any stock of any class or series may be made subject to redemption by the corporation at its option or at the option of the holders of the stock or upon the happening of a specified event; provided however, immediately following any redemption, the corporation shall have outstanding one or more shares or one or more classes or series of stock, which share, or shares together, shall have full voting powers. Notwithstanding the limitation stated in the foregoing proviso:
1. Any stock of a regulated investment company registered under the Investment Company Act of 1940, as heretofore or hereafter amended, may be made subject to redemption by the corporation at its option or at the option of the holders of the stock.
2. Any stock of a corporation which directly or indirectly holds a license or franchise from a governmental agency to conduct its business or is a member of a national securities exchange, which license, franchise, or membership is conditioned upon some or all of the holders of its stock possessing prescribed qualifications, may be made subject to redemption by the corporation to the extent necessary to prevent the loss of the license, franchise, or membership or to reinstate it. Any stock which may be made redeemable under this section may be redeemed for cash, property, or rights, including securities of the same or another corporation, at such time or times, price or prices, or rate or rates, and with any adjustments, as shall be stated in the certificate of incorporation or in the resolution or resolutions providing for the issue of the stock adopted by the board of directors as provided for in subsection A of this section.
C. The holders of preferred or special stock of any class or of any series thereof shall be entitled to receive dividends at such rates, conditions, and times as shall be stated in the certificate of incorporation or in the resolution or resolutions providing for the issue of the stock adopted by the board of directors as provided for in subsection A of this section, payable in preference to, or in relation to, the dividends payable on any other class or classes or of any other series of stock, and cumulative or noncumulative as shall be so stated and expressed. When dividends upon the preferred and special stocks, if any, to the extent of the preference to which the stocks are entitled, shall have been paid or declared and set apart for payment, a dividend on the remaining class or classes or series of stock may then be paid out of the remaining assets of the corporation available for dividends as otherwise provided for in the Oklahoma General Corporation Act.
D. The holders of the preferred or special stock of any class or of any series thereof shall be entitled to the rights upon the dissolution of, or upon any distribution of the assets of, the corporation as shall be stated in the certificate of incorporation or in the resolution or resolutions providing for the issue of the stock adopted by the board of directors as provided for in subsection A of this section.
E. Any stock of any class or of any series thereof may be made convertible into, or exchangeable for, at the option of either the holder or the corporation or upon the happening of a specified event, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation, at the price or prices or at the rate or rates of exchange, and with adjustments as shall be stated in the certificate of incorporation or in the resolution or resolutions providing for the issue of the stock adopted by the board of directors as provided for in subsection A of this section.
F. If any corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences, and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations, or restrictions of such preferences or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent the class or series of stock; provided that, except as otherwise provided for in Section 1055 of this title, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent the class or series of stock, a statement that the corporation will furnish without charge to each shareholder who so requests the powers, designations, preferences, and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations, or restrictions of the preferences or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to this section or Section 1037, subsection A of Section 1055 or subsection A of Section 1063 of this title, or with respect to this section a statement that the corporation will furnish without charge to each shareholder who so requests the powers, designations, preferences, and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations, or restrictions of the preferences or rights. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated stock and the rights and obligations of the holder of certificates representing stock of the same class and series shall be identical.
G. 1. When any corporation desires to issue any shares of stock of any class or of any series of any class of which the powers, designations, preferences, and relative, participating, optional, or other rights, if any, or the qualifications, limitations, or restrictions thereof, if any, shall not have been set forth in the certificate of incorporation or in any amendment thereto but shall be provided for in a resolution or resolutions adopted by the board of directors pursuant to authority expressly vested in it by the provisions of the certificate of incorporation or any amendment thereto, a certificate of designations setting forth a copy of the resolution or resolutions and the number of shares of stock of the class or series to which the resolution or resolutions apply shall be executed, acknowledged, and filed, and shall become effective, in accordance with the provisions of Section 1007 of this title. Unless otherwise provided in any resolution or resolutions, the number of shares of stock of any series to which the resolution or resolutions apply may be increased, but not above the total number of authorized shares of the class, or decreased, but not below the number of shares thereof then outstanding, by a certificate likewise executed, acknowledged, and filed setting forth a statement that a specified increase or decrease therein had been authorized and directed by a resolution or resolutions likewise adopted by the board of directors. In case the number of the shares shall be decreased, the number of shares so specified in the certificate shall resume the status which they had prior to the adoption of the first resolution or resolutions. Unless otherwise provided in the certificate of incorporation, if no shares of stock have been issued of a class or series of stock established by a resolution of the board of directors, the voting powers, designations, preferences, and relative, participating, optional, or other rights, if any, or the qualifications, limitations, or restrictions thereof, may be amended by a resolution or resolutions adopted by the board of directors. A certificate which states that no shares of the class or series have been issued, sets forth a copy of the resolution or resolutions, and, if the designation of the class or series is being changed, indicates the original designation and the new designation, shall be executed, acknowledged, and filed, and shall become effective, in accordance with the provisions of Section 1007 of this title. When no shares of any class or series are outstanding, either because none were issued or because no issued shares of any class or series remain outstanding, a certificate setting forth a resolution or resolutions adopted by the board of directors that none of the authorized shares of the class or series are outstanding, and that none will be issued subject to the certificate of designations previously filed with respect to the class or series, may be executed, acknowledged, and filed in accordance with the provisions of Section 1007 of this title and, when the certificate becomes effective, it shall have the effect of eliminating from the certificate of incorporation all matters set forth in the certificate of designations with respect to the class or series of stock.
2. When any certificate filed pursuant to the provisions of this subsection becomes effective, it shall have the effect of amending the certificate of incorporation; except that neither the filing of the certificate nor the filing of a restated certificate of incorporation pursuant to Section 1080 of this title shall prohibit the board of directors from subsequently adopting resolutions as authorized by this subsection.
Added by Laws 1986, c. 292, § 32, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 8, eff. Nov. 1, 1988; Laws 1998, c. 422, § 6, eff. Nov. 1, 1998; Laws 1999, c. 421, § 9, eff. Nov. 1, 1999.
§181033. Issuance of Stock, Lawful Consideration Fully Paid Stock.
ISSUANCE OF STOCK, LAWFUL CONSIDERATION; FULLY PAID STOCK
A. The consideration, as determined pursuant to the provisions of subsections A and B of Section 34 of this act, for subscriptions to, or the purchase of, the capital stock to be issued by a corporation shall be paid in such form and in such manner as the board of directors shall determine. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration shall be conclusive. The capital stock so issued shall be deemed to be fully paid and nonassessable stock, if:
1. the entire amount of such consideration has been received by the corporation in the form of cash, services rendered, personal property, real property, leases of real property, or a combination thereof; or
2. not less than the amount of the consideration determined to be capital pursuant to the provisions of Section 35 of this act has been received by the corporation in such form and the corporation has received a binding obligation of the subscriber or purchaser to pay the balance of the subscription or purchase price.
B. The provisions of subsection A of this section shall not be construed to prevent the board of directors from issuing partly paid shares in accordance with the provisions of Section 37 of this act.
Added by Laws 1986, c. 292, § 33, eff. Nov. 1, 1986.
§181034. Consideration for Stock.
CONSIDERATION FOR STOCK
A. Shares of stock with par value may be issued for such consideration, having a value not less than the par value thereof, as is determined from time to time by the board of directors, or by the shareholders if the certificate of incorporation so provides.
B. Shares of stock without par value may be issued for such consideration as is determined from time to time by the board of directors, or by the shareholders if the certificate of incorporation so provides.
C. Treasury shares may be disposed of by the corporation for such consideration as may be determined from time to time by the board of directors, or by the shareholders if the certificate of incorporation so provides.
D. If the certificate of incorporation reserves to the shareholders the right to determine the consideration for the issue of any shares, the shareholders, unless the certificate requires a greater vote, shall do so by a vote of a majority of the outstanding stock entitled to vote thereon.
Added by Laws 1986, c. 292, § 34, eff. Nov. 1, 1986.
§181035. Determination of Amount of Capital Capital, Surplus and Net Assets Defined.
DETERMINATION OF AMOUNT OF CAPITAL; CAPITAL,
SURPLUS AND NET ASSETS DEFINED
Any corporation, by resolution of its board of directors, may determine that only a part of the consideration which shall be received by the corporation for any of the shares of its capital stock which it shall issue from time to time shall be capital; but, in case any of the shares issued shall be shares having a par value, the amount of the part of such consideration so determined to be capital shall be in excess of the aggregate par value of the shares issued for such consideration having a par value, unless all the shares issued shall be shares having a par value, in which case the amount of the part of such consideration so determined to be capital need be only equal to the aggregate par value of such shares. In each such case the board of directors shall specify in dollars the part of such consideration which shall be capital. If the board of directors shall not have determined, at the time of issue of any shares of the capital stock of the corporation issued for cash or within sixty (60) days after the issue of any shares of the capital stock of the corporation issued for property other than cash, what part of the consideration for such shares shall be capital, the capital of the corporation in respect of such shares shall be an amount equal to the aggregate par value of such shares having a par value, plus the amount of the consideration for such shares without par value. The amount of the consideration so determined to be capital in respect of any shares without par value shall be the stated capital of such shares. The capital of the corporation may be increased from time to time by resolution of the board of directors directing that a portion of the net assets of the corporation in excess of the amount so determined to be capital be transferred to the capital account. The board of directors may direct that the portion of such net assets so transferred shall be treated as capital in respect of any shares of the corporation of any designated class or classes. The excess, if any, at any given time, of the net assets of the corporation over the amount so determined to be capital shall be surplus. "Net assets" means the amount by which total assets exceed total liabilities. Capital and surplus are not liabilities for this purpose.
Added by Laws 1986, c. 292, § 35, eff. Nov. 1, 1986.
§181036. Fractions of Shares.
FRACTIONS OF SHARES
A corporation may, but shall not be required to, issue fractions of a share. If it does not issue fractions of a share, it shall:
1. arrange for the disposition of fractional interests by those entitled thereto; or
2. pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined; or
3. issue scrip or warrants in registered form (either represented by a certificate or be uncertificated) or in bearer form (represented by a certificate) which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip or warrants aggregating a full share.
A certificate for a fractional share or an uncertificated fractional share shall, but scrip or warrants shall not unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the corporation in the event of liquidation. The board of directors may cause scrip or warrants to be issued subject to the conditions that they shall become void if not exchanged for certificates representing the full shares or uncertificated full shares before a specified date, or subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the board of directors may impose.
Added by Laws 1986, c. 292, § 36, eff. Nov. 1, 1986.
§18-1037. Partly paid shares.
PARTLY PAID SHARES
Any corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any partly paid shares, or upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated and the corporation shall comply with applicable provisions of Section 8-209 of Title 12A of the Oklahoma Statutes. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
Added by Laws 1986, c. 292, § 37, eff. Nov. 1, 1986. Amended by Laws 1999, c. 141, § 3, eff. Nov. 1, 1999.
§18-1038. Rights and Options Respecting Stock.
RIGHTS AND OPTIONS RESPECTING STOCK
A. Subject to any provisions in the certificate of incorporation, every corporation may create and issue, whether or not in connection with the issue and sale of any shares of stock or other securities of the corporation, rights or options entitling the holders thereof to purchase from the corporation any shares of its capital stock of any class or classes, such rights or options to be evidenced by or in such instrument or instruments as shall be approved by the board of directors.
B. The terms upon which, including the time or times, which may be limited or unlimited in duration, at or within which, and the price or prices, including any formula by which such price or prices may be determined, at which any such shares may be purchased from the corporation upon the exercise of any such right or option, shall be such as shall be stated in the certificate of incorporation, or in a resolution adopted by the board of directors providing for the creation and issue of such rights or options, and, in every case, shall be set forth or incorporated by reference in the instrument or instruments evidencing such rights or options. In the absence of actual fraud in the transaction, the judgment of the directors as to the consideration for the issuance of such rights or options and the sufficiency thereof shall be conclusive.
C. The board of directors may, by a resolution adopted by the board, authorize one or more officers of the corporation to do one or both of the following:
1. Designate officers and employees of the corporation or of any of its subsidiaries to be recipients of such rights or options created by the corporation; and
2. Determine the number of such rights or options to be received by such officers and employees;
provided, however, that the resolution so authorizing such officer or officers shall specify the total number of rights or options such officer or officers may so award. The board of directors may not authorize an officer to designate himself or herself as a recipient of any such rights or options.
D. In case the shares of stock of the corporation to be issued upon the exercise of such rights or options shall be shares having a par value, the price or prices so to be received therefor shall not be less than the par value thereof. In case the shares of stock so to be issued shall be shares of stock without par value, the consideration therefor shall be determined in the manner provided for in Section 1034 of this title.
Added by Laws 1986, c. 292, § 38, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 8, eff. Nov. 1, 2004.
§18-1039. Stock Certificates, Uncertificated Shares.
STOCK CERTIFICATES, UNCERTIFICATED SHARES
The shares of a corporation shall be represented by certificates, provided that the board of directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Notwithstanding the adoption of any such resolution, shares represented by a certificate shall not become uncertificated shares until such certificate is surrendered to the corporation. Every holder of stock in a corporation shall be entitled to have a certificate signed by, or in the name of, the corporation by the chairman or vicechairman of the board of directors, or the president or vicepresident, and by the treasurer or an assistant treasurer or the secretary or an assistant secretary of such corporation certifying and representing the number of shares owned by him in such corporation. Subject to applicable provisions of the Uniform Commercial Code Investment Securities, such entitlement shall apply equally to a holder of uncertificated shares, notwithstanding the adoption of a resolution by the board of directors providing for the issuance of uncertificated shares, who makes written request of the corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. A corporation shall not have the power to issue a certificate in bearer form.
Added by Laws 1986, c. 292, § 39, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 9, eff. Nov. 1, 2004.
§181040. Shares of Stock Personal Property, Transfer and Taxation.
SHARES OF STOCK; PERSONAL PROPERTY, TRANSFER AND TAXATION
The shares of stock in every corporation shall be deemed personal property and transferable as provided for in the Uniform Commercial Code Investment Securities. No stock or bonds issued by any corporation organized in accordance with the provisions of the Oklahoma General Corporation Act shall be taxed by this state when the same shall be owned by nonresidents of this state or by foreign corporations.
Added by Laws 1986, c. 292, § 40, eff. Nov. 1, 1986.
§181041. Corporation's Powers Respecting Ownership, Voting, etc. of Its Own Stock Rights of Stock Called for Redemption.
CORPORATION'S POWERS RESPECTING OWNERSHIP, VOTING, ETC. OF ITS
OWN STOCK; RIGHTS OF STOCK CALLED FOR REDEMPTION
A. Every corporation may purchase, redeem, receive, take, or otherwise acquire, own, hold, sell, lend, exchange, transfer, or otherwise dispose of, pledge, use and otherwise deal in and with its own shares; provided, however, that no corporation shall:
1. Purchase or redeem its own shares of capital stock for cash or other property when the capital of the corporation is impaired or when the purchase or redemption would cause any impairment of the capital of the corporation, except that a corporation may purchase or redeem out of capital any of its own shares which are entitled upon any distribution of its assets, whether by dividend or in liquidation, to a preference over another class or series of its stock, or, if no shares entitled to a preference are outstanding, any of its own shares if such shares will be retired upon their acquisition and the capital of the corporation reduced in accordance with the provisions of Sections 1078 and 1079 of this title. Nothing in this subsection shall invalidate or otherwise affect a note, debenture, or other obligation of a corporation given by it as consideration for its acquisition by purchase, redemption, or the exchange of its shares of stock if at the time such note, debenture, or obligation was delivered by the corporation its capital was not then impaired or did not thereby become impaired;
2. Purchase, for more than the price at which they may then be redeemed, any of its shares which are redeemable at the option of the corporation; or
3. Redeem any of its shares unless their redemption is authorized by subsection B of Section 1032 of this title and then only in accordance with the provisions of that section and the certificate of incorporation.
B. Nothing in this section shall be construed to limit or affect a corporation's right to resell any of its shares theretofore purchased or redeemed out of surplus and which have not been retired, for consideration fixed by the board of directors or by the shareholders if the certificate of incorporation so provides.
C. Shares of its own capital stock belonging to the corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of the other corporation is held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for quorum purposes. Nothing in this section shall be construed as limiting the right of any corporation to vote stock, including, but not limited to, its own stock, held by it in a fiduciary capacity.
D. Shares which have been called for redemption shall not be deemed to be outstanding shares for the purpose of voting or determining the total number of shares entitled to vote on any matter on and after the date on which written notice of redemption has been sent to holders thereof and a sum sufficient to redeem those shares has been irrevocably deposited or set aside to pay the redemption price to the holders of the shares upon surrender of the certificates.
Added by Laws 1986, c. 292, § 41, eff. Nov. 1, 1986. Amended by Laws 1998, c. 422, § 7, eff. Nov. 1, 1998.
§181042. Issuance of Additional Stock When and by Whom.
ISSUANCE OF ADDITIONAL STOCK; WHEN AND BY WHOM
The directors, at any time and from time to time, if all of the shares of capital stock which the corporation is authorized by its certificate of incorporation to issue have not been issued, subscribed for, or otherwise committed to be issued, may issue or take subscriptions for additional shares of its capital stock up to the amount authorized in its certificate of incorporation.
Added by Laws 1986, c. 292, § 42, eff. Nov. 1, 1986.
§181043. Liability of Shareholder or Subscriber for Stock not Paid in Full.
LIABILITY OF SHAREHOLDER OR SUBSCRIBER
FOR STOCK NOT PAID IN FULL
A. When the whole of the consideration payable for shares of a corporation has not been paid in, and the assets shall be insufficient to satisfy the claims of its creditors, each holder of or subscriber for such shares shall be bound to pay on each share held or subscribed for by him the sum necessary to complete the amount of the unpaid balance of the consideration for which such shares were issued or to be issued by the corporation.
B. The amounts which shall be payable as provided in subsection A of this section may be recovered as provided for in Section 124 of this act, after a writ of execution against the corporation has been returned unsatisfied as provided for in that section.
C. Any person becoming an assignee or transferee of shares or of a subscription for shares in good faith and without knowledge or notice that the full consideration therefor has not been paid shall not be personally liable for any unpaid portion of such consideration, but the transferor shall remain liable therefor.
D. No person holding shares in any corporation as collateral security shall be personally liable as a shareholder but the person pledging such shares shall be considered the holder thereof and shall be so liable. No executor, administrator, guardian, trustee or other fiduciary shall be personally liable as a shareholder, but the estate or funds held by such executor, administrator, guardian, trustee or other fiduciary in such fiduciary capacity shall be liable.
E. No liability under the provisions of this section or under the provisions of Section 124 of this act shall be asserted more than six (6) years after the issuance of the stock or the date of the subscription upon which the assessment is sought.
F. In any action by a receiver or trustee of an insolvent corporation or by a judgment creditor to obtain an assessment under the provisions of this section, any shareholder or subscriber for stock of the insolvent corporation may appear and contest the claim or claims of such receiver or trustee.
Added by Laws 1986, c. 292, § 43, eff. Nov. 1, 1986.
§181044. Payment for Stock Not Paid in Full.
PAYMENT FOR STOCK NOT PAID IN FULL
The capital stock of a corporation shall be paid for in such amounts and at such times as the directors may require. The directors, from time to time, may demand payment, in respect of each share of stock not fully paid, of such sum of money as the necessities of the business, in the judgment of the board of directors, may require, not exceeding in the whole the balance remaining unpaid on such stock, and such sum so demanded shall be paid to the corporation at such times and by such installments as the directors shall direct. The directors shall give written notice of the time and place of such payments, which notice shall be mailed at least thirty (30) days before the time for such payment, to each holder of or subscriber for stock which is not fully paid at his lastknown post office address.
Added by Laws 1986, c. 292, § 44, eff. Nov. 1, 1986.
§181045. Failure to Pay for Stock Remedies.
FAILURE TO PAY FOR STOCK; REMEDIES
When any shareholder fails to pay any installment or call upon his stock which may have been properly demanded by the directors, at the time when such payment is due, the directors may collect the amount of any such installment or call or any balance thereof remaining unpaid, from the said shareholder by an action at law, or they shall sell at public sale such part of the shares of such delinquent shareholder as will pay all demands then due from him with interest and all incidental expenses, and shall transfer the shares so sold to the purchaser, who shall be entitled to a certificate therefor. Notice of the time and place of such sale and of the sum due on each share shall be given by advertisement at least one (1) week before the sale, in a newspaper of the county in this state where such corporation's registered office is located, and such notice shall be mailed by the corporation to such delinquent shareholder at his lastknown post office address, at least twenty (20) days before such sale. If no bidder can be had to pay the amount due on the stock, and if the amount is not collected by an action at law, which may be brought within the county where the corporation has its registered office, within one (1) year from the date of the bringing of such action at law, said stock and the amount previously paid in by the delinquent shareholder on the stock shall be forfeited to the corporation.
Added by Laws 1986, c. 292, § 45, eff. Nov. 1, 1986.
§181046. Revocability of Pre-Incorporation Subscriptions.
REVOCABILITY OF PRE-INCORPORATION SUBSCRIPTIONS
Unless otherwise provided for by the terms of the subscription, a subscription for stock of a corporation to be formed shall be irrevocable, except with the consent of all other subscribers or the corporation, for a period of six (6) months from its date.
Added by Laws 1986, c. 292, § 46, eff. Nov. 1, 1986.
§181047. Formalities Required of Stock Subscriptions.
FORMALITIES REQUIRED OF STOCK SUBSCRIPTIONS
A subscription for stock of a corporation, whether made before or after the formation of a corporation, shall not be enforceable against a subscriber, unless in writing and signed by the subscriber or by his agent.
Added by Laws 1986, c. 292, § 47, eff. Nov. 1, 1986.
§181048. Situs of Ownership of Stock.
SITUS OF OWNERSHIP OF STOCK
For all purposes of title, action, attachment, garnishment and jurisdiction of all courts held in this state, but not for the purpose of taxation, the situs of the ownership of the capital stock of all corporations existing under the laws of this state, whether organized in accordance with the provisions of the Oklahoma General Corporation Act or otherwise, shall be regarded as in this state.
Added by Laws 1986, c. 292, § 48, eff. Nov. 1, 1986.
§18-1049. Dividends - Payment - Wasting Asset Corporations.
DIVIDENDS; PAYMENT; WASTING ASSET CORPORATIONS
A. The directors of every corporation, subject to any restrictions contained in its certificate of incorporation, may declare and pay dividends upon the shares of its capital stock, or to its members if the corporation is a nonstock corporation, either out of its surplus, as defined in and computed in accordance with the provisions of Sections 1035 and 1079 of this title, or in case there is no surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year. If the capital of the corporation, computed in accordance with the provisions of Sections 1035 and 1079 of this title, shall have been diminished by depreciation in the value of its property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, the directors of the corporation shall not declare and pay out of the net profits any dividends upon any shares of any classes of its capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired. Nothing in this subsection shall invalidate or otherwise affect a note, debenture, or other obligation of the corporation paid by it as a dividend on shares of its stock, or any payment made thereon, if at the time the note, debenture, or obligation was delivered by the corporation, the corporation had either surplus or net profits as provided in this subsection from which the dividend could lawfully have been paid.
B. Subject to any restrictions contained in its certificate of incorporation, the directors of any corporation engaged in the exploitation of wasting assets including, but not limited to, a corporation engaged in the exploitation of natural resources or other wasting assets, including patents, or engaged primarily in the liquidation of specific assets, may determine the net profits derived from the exploitation of wasting assets or the net proceeds derived from liquidation without taking into consideration the depletion of such assets resulting from lapse of time, consumption, liquidation, or exploitation.
Added by Laws 1986, c. 292, § 49, eff. Nov. 1, 1986. Amended by Laws 1998, c. 422, § 8, eff. Nov. 1, 1998; Laws 2001, c. 405, § 9, eff. Nov. 1, 2001.
§181050. Special Purpose Reserves.
SPECIAL PURPOSE RESERVES
The directors of a corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
Added by Laws 1986, c. 292, § 50, eff. Nov. 1, 1986.
§181051. Liability of directors as to dividends or stock redemption.
LIABILITY OF DIRECTORS AS TO DIVIDENDS OR STOCK REDEMPTION
A member of the board of directors, or a member of any committee designated by the board of directors, shall be fully protected in relying in good faith upon the records of the corporation and upon such information, opinions, reports or statements presented to the corporation by any of its officers or employees, or committees of the board of directors, or by any other person as to matters the director reasonably believes are within such officer's, employee's, committee's or other person's competence and who have been selected with reasonable care by or on behalf of the corporation, as to the value and amount of the assets, liabilities and/or net profits of the corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid, or with which the corporation's stock might properly be purchased or redeemed.
Added by Laws 1986, c. 292, § 51, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 9, eff. Nov. 1, 1988.
§181052. Declaration and Payment of Dividends.
DECLARATION AND PAYMENT OF DIVIDENDS
No corporation shall pay dividends except in accordance with the provisions of the Oklahoma General Corporation Act. Dividends may be paid in cash, in property, or in shares of the corporation's capital stock. If the dividend is to be paid in shares of the corporation's theretofore unissued capital stock, the board of directors, by resolution, shall direct that there be designated as capital in respect of such shares an amount which is not less than the aggregate par value of par value shares being declared as a dividend and, in the case of shares without par value being declared as a dividend, such amount as shall be determined by the board of directors. No such designation as capital shall be necessary if shares are being distributed by a corporation pursuant to a splitup or division of its stock rather than as payment of a dividend declared payable in stock of the corporation.
Added by Laws 1986, c. 292, § 52, eff. Nov. 1, 1986.
§181053. Liability of Directors for Unlawful Payment of Dividend or Unlawful Stock Purchase or Redemption Exoneration from Liability Contribution among Directors Subrogation.
LIABILITY OF DIRECTORS FOR UNLAWFUL PAYMENT OF DIVIDEND OR UNLAWFUL
STOCK PURCHASE OR REDEMPTION; EXONERATION FROM LIABILITY;
CONTRIBUTION AMONG DIRECTORS; SUBROGATION
A. In case of any willful or negligent violation of the provisions of Sections 41 and 52 of this act, the directors under whose administration the same may happen shall be jointly and severally liable, at any time within six (6) years after paying any unlawful dividend or after any unlawful stock purchase or redemption, to the corporation, and to its creditors in the event of its dissolution or insolvency, to the full amount of the dividend unlawfully paid, or to the full amount unlawfully paid for the purchase or redemption of the corporation's stock, with interest from the time such liability accrued. Any director who may have been absent when the same was done, or who may have dissented from the act or resolution by which the same was done, may exonerate himself from such liability by causing his dissent to be entered on the books containing the minutes of the proceedings of the directors at the time the same was done, or immediately after he has notice of the same.
B. Any director against whom a claim is successfully asserted under the provisions of this section shall be entitled to contribution from the other directors who voted for or concurred in the unlawful dividend, stock purchase or stock redemption.
C. Any director against whom a claim is successfully asserted under this section shall be entitled, to the extent of the amount paid by him as a result of such claim, to be subrogated to the rights of the corporation against shareholders who received the dividend on, or assets for the sale or redemption of, their stock with knowledge of facts indicating that such dividend, stock purchase or redemption was unlawful pursuant to the provisions of the Oklahoma General Corporation Act, in proportion to the amounts received by such shareholders respectively.
Added by Laws 1986, c. 292, § 53, eff. Nov. 1, 1986.
§181054. Transfer of Stock, Stock Certificates and Uncertificated Stock.
TRANSFER OF STOCK, STOCK CERTIFICATES AND UNCERTIFICATED STOCK
Except as otherwise provided for in the Oklahoma General Corporation Act, the transfer of stock and the certificates of stock which represent the stock or uncertificated stock shall be governed by the Uniform Commercial Code Investment Securities. To the extent that any provision of the Oklahoma General Corporation Act is inconsistent with any provision of the Uniform Commercial Code Investment Securities, the provisions of the Uniform Commercial Code Investment Securities shall be controlling.
Added by Laws 1986, c. 292, § 54, eff. Nov. 1, 1986.
§18-1055. Restriction on transfer of securities.
RESTRICTION ON TRANSFER OF SECURITIES
A. A written restriction or restrictions on the transfer or registration of transfer of a security of a corporation, or on the amount of a corporation's securities that may be owned by any person or group of persons, if permitted by this section and noted conspicuously on the certificate or certificates representing the security or securities so restricted or, in the case of uncertificated shares, contained in the notice or notices sent pursuant to the provisions of subsection F of Section 1032 of this title, may be enforced against the holder of the restricted security or securities or any successor or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder. Unless noted conspicuously on the certificate or certificates representing the security or securities so restricted or, in the case of uncertificated shares, contained in the notice or notices sent pursuant to the provisions of subsection F of Section 1032 of this title, a restriction, even though permitted by this section, is ineffective except against a person with actual knowledge of the restriction.
B. A restriction on the transfer or registration of transfer of securities of a corporation, or on the amount of a corporation's securities that may be owned by any person or group of persons, may be imposed either by the certificate of incorporation or by the bylaws or by an agreement among any number of security holders or among such holders and the corporation. No restriction so imposed shall be binding with respect to securities issued prior to the adoption of the restriction unless the holders of the securities are parties to an agreement or voted in favor of the restriction.
C. A restriction on the transfer or registration of transfer of securities of a corporation or on the amount of a corporation's securities that may be owned by any person or group of persons is permitted by the provisions of this section if it:
1. Obligates the holder of the restricted securities to offer to the corporation or to any other holders of securities of the corporation or to any other person or to any combination of the foregoing, a prior opportunity, to be exercised within a reasonable time, to acquire the restricted securities;
2. Obligates the corporation or any holder of securities of the corporation or any other person or any combination of the foregoing, to purchase the securities which are the subject of an agreement respecting the purchase and sale of the restricted securities;
3. Requires the corporation or the holders of any class of securities of the corporation to consent to any proposed transfer of the restricted securities or to approve the proposed transferee of the restricted securities or to approve the amount of securities of the corporation that may be owned by any person or group of persons;
4. Obligates the holder of the restricted securities to sell or transfer an amount of restricted securities to the corporation or to any other holders of securities of the corporation or to any other person or to any combination of the foregoing, or causes or results in the automatic sale or transfer of an amount of restricted securities to the corporation or to any other holders of securities of the corporation or to any other person or to any combination of the foregoing; or
5. Prohibits or restricts the transfer of the restricted securities to, or the ownership of restricted securities by, designated persons or classes of persons or groups of persons, and such designation is not manifestly unreasonable.
D. Any restriction on the transfer or the registration of transfer of the securities of a corporation, or on the amount of securities of a corporation that may be owned by a person or group of persons, shall be conclusively presumed to be for a reasonable purpose for any of the following purposes:
1. Maintaining any local, state, federal or foreign tax advantage to the corporation or its shareholders, including without limitation:
a. maintaining the corporation's status as an electing small business corporation under Subchapter S of the United States Internal Revenue Code,
b. maintaining or preserving any tax attribute, including, without limitation, net operating losses, or
c. qualifying or maintaining the qualification of the corporation as a real estate investment trust pursuant to the United States Internal Revenue Code or regulations adopted pursuant to the United States Internal Revenue Code; or
2. Maintaining any statutory or regulatory advantage or complying with any statutory or regulatory requirements under applicable local, state, federal, or foreign law.
E. Any other lawful restriction on transfer or registration of transfer of securities, or on the amount of securities that may be owned by any person or group of persons, is permitted by the provisions of this section.
Added by Laws 1986, c. 292, § 55, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 10, eff. Nov. 1, 2001.
§18-1056. Meetings of shareholders.
MEETINGS OF SHAREHOLDERS
A. 1. Meetings of shareholders may be held at such place, either within or without this state, as may be designated by or in the manner provided in the certificate of incorporation or bylaws or, if not so designated, as determined by the board of directors. If, pursuant to this paragraph or the certificate of incorporation or the bylaws of the corporation, the board of directors is authorized to determine the place of a meeting of shareholders, the board of directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized by paragraph 2 of this subsection.
2. If authorized by the board of directors in its sole discretion, and subject to such guidelines and procedures as the board of directors may adopt, shareholders and proxyholders not physically present at a meeting of shareholders may, by means of remote communication:
a. participate in a meeting of shareholders, and
b. be deemed present in person and vote at a meeting of shareholders whether the meeting is to be held at a designated place or solely by means of remote communication, provided that:
(1) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a shareholder or proxyholder,
(2) the corporation shall implement reasonable measures to provide such shareholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with the proceedings, and
(3) if any shareholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of the vote or other action shall be maintained by the corporation.
B. 1. Unless directors are elected by written consent in lieu of an annual meeting as permitted by this subsection, an annual meeting of shareholders shall be held for the election of directors on a date and at a time designated by or in the manner provided for in the bylaws. Shareholders may, unless the certificate of incorporation otherwise provides, act by written consent to elect directors; provided, however, that if the consent is less than unanimous, the action by written consent may be in lieu of holding an annual meeting only if all of the directorships to which directors could be elected at an annual meeting held at the effective time of the action are vacant and are filled by the action.
2. Any other proper business may be transacted at the annual meeting.
C. A failure to hold the annual meeting at the designated time or to elect a sufficient number of directors to conduct the business of the corporation shall not affect otherwise valid corporate acts or work a forfeiture or dissolution of the corporation except as may be otherwise specifically provided for in this act. If the annual meeting for election of directors is not held on the date designated therefor or action by written consent to elect directors in lieu of an annual meeting has not been taken, the directors shall cause the meeting to be held as soon as is convenient. If there is a failure to hold the annual meeting or action by written consent to elect directors in lieu of an annual meeting for a period of thirty (30) days after the date designated for the annual meeting, or if no date has been designated, for a period of thirteen (13) months after the latest to occur of the organization of the corporation, its last annual meeting, or the last action by written consent to elect directors in lieu of an annual meeting, the district court may summarily order a meeting to be held upon the application of any shareholder or director. The shares of stock represented at the meeting, either in person or by proxy, and entitled to vote thereat, shall constitute a quorum for the purpose of the meeting, notwithstanding any provision of the certificate of incorporation or bylaws to the contrary. The district court may issue orders as may be appropriate, including, without limitation, orders designating the time and place of the meeting, the record date for determination of shareholders entitled to vote, and the form of notice of the meeting.
D. Special meetings of the shareholders may be called by the board of directors or by the person or persons as may be authorized by the certificate of incorporation or by the bylaws.
E. All elections of directors shall be by written ballot, unless otherwise provided for in the certificate of incorporation; if authorized by the board of directors, the requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission; provided that the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the shareholder or proxyholder.
Added by Laws 1986, c. 292, § 56, eff. Nov. 1, 1986. Amended by Laws 1998, c. 422, § 9, eff. Nov. 1, 1998; Laws 2001, c. 405, § 11, eff. Nov. 1, 2001.
§18-1057. Voting Rights of Shareholders - Proxies - Limitations.
VOTING RIGHTS OF SHAREHOLDERS; PROXIES; LIMITATIONS
A. Unless otherwise provided for in the certificate of incorporation and subject to the provisions of Section 1058 of this title, each shareholder shall be entitled to one vote for each share of capital stock held by the shareholder. If the certificate of incorporation provides for more or less than one vote for any share on any matter, every reference in this act to a majority or other proportion of stock, voting stock or shares shall refer to such majority or other proportion of the votes of such stock, voting stock or shares.
B. Each shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for the shareholder by proxy, but no proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period.
C. Without limiting the manner in which a shareholder may authorize another person or persons to act as a proxy pursuant to subsection B of this section, the following shall constitute a valid means by which a shareholder may grant such authority:
1. A shareholder may execute a writing authorizing another person or persons to act for him or her as proxy. Execution may be accomplished by the shareholder or the shareholder's authorized officer, director, employee, or agent signing the writing or causing his or her signature to be affixed to the writing by any reasonable means including, but not limited to, by facsimile signature.
2. A shareholder may authorize another person or persons to act for him or her as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization, or like agent duly authorized by the person who will be the holder of the proxy to receive the transmission; provided, that any telegram, cablegram, or other means of electronic transmission must either set forth, or be submitted with information from which it can be determined, that the telegram, cablegram, or other electronic transmission was authorized by the shareholder. If it is determined that telegrams, cablegrams, or other electronic transmissions are valid, the inspectors or, if there are no inspectors, any other person making that determination shall specify the information upon which they relied.
D. Any copy, facsimile telecommunication, or other reliable reproduction of the writing or transmission created pursuant to subsection C of this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided, that the copy, facsimile telecommunication, or other reproduction shall be a complete reproduction of the entire original writing or transmission.
E. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.
Added by Laws 1986, c. 292, § 57, eff. Nov. 1, 1986. Amended by Laws 1998, c. 422, § 10, eff. Nov. 1, 1998; Laws 2004, c. 255, § 10, eff. Nov. 1, 2004.
§181058. Fixing date for determination of shareholders of record.
FIXING DATE FOR DETERMINATION OF SHAREHOLDERS OF RECORD
A. In order that the corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.
B. 1. In order that the corporation may determine the shareholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by the Oklahoma General Corporation Act, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by the Oklahoma General Corporation Act, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.
2. The provisions of this subsection shall be effective with respect to corporate actions taken by written consent, and to such written consent or consents, as to which the first written consent is executed or solicited after November 1, 1988.
C. In order that the corporation may determine the shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the shareholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining shareholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.
Added by Laws 1986, c. 292, § 58, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 10, eff. Nov. 1, 1988.
§181059. Cumulative Voting.
CUMULATIVE VOTING
The certificate of incorporation of any corporation may provide that at all elections of directors of the corporation, or at elections held under specified circumstances, each holder of stock or of any class or classes or of a series or series thereof shall be entitled to as many votes as shall equal the number of votes which, except for such provision as to cumulative voting, he would be entitled to cast for the election of directors with respect to his shares of stock multiplied by the number of directors to be elected by him, and that he may cast all of such votes for a single director or may distribute them among the number to be voted for, or for any two (2) or more of them as he may see fit.
Added by Laws 1986, c. 292, § 59, eff. Nov. 1, 1986.
§18-1060. Voting Rights of Members of Nonstock Corporations - Quorum - Proxies.
VOTING RIGHTS OF MEMBERS OF NONSTOCK
CORPORATIONS; QUORUM; PROXIES
A. The provisions of Sections 1056 through 1059 and 1061 of this title shall not apply to corporations not authorized to issue stock, except that subsection A of Section 1056 and subsections C and D of Section 1057 of this title shall apply to nonstock corporations, and, when so applied, all references therein to shareholders and to the board of directors shall be deemed to refer to the members and the governing body of a nonstock corporation, respectively.
B. Unless otherwise provided for in the certificate of incorporation of a nonstock corporation, each member shall be entitled at every meeting of members to one vote in person or by proxy, but no proxy shall be voted on after three (3) years from its date, unless the proxy provides for a longer period.
C. Unless otherwise provided for in the Oklahoma General Corporation Act, the certificate of incorporation or bylaws of a nonstock corporation may specify the number of members having voting power who shall be present or represented by proxy at any meeting in order to constitute a quorum for, and the votes that shall be necessary for, the transaction of any business. In the absence of such specification in the certificate of incorporation or bylaws of a nonstock corporation:
1. One-third (1/3) of the members of the corporation shall constitute a quorum at a meeting of the members;
2. In all matters other than the election of the governing body of the corporation, the affirmative vote of a majority of the members present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the members, unless the vote of a greater number is required by the provisions of the Oklahoma General Corporation Act, the certificate of incorporation or bylaws; and
3. Members of the governing body shall be elected by a plurality of the votes of the members of the corporation present in person or represented by proxy at the meeting and entitled to vote.
D. If the election of the governing body of any nonstock corporation shall not be held on the day designated by the bylaws, the governing body shall cause the election to be held as soon thereafter as convenient. The failure to hold such an election at the designated time shall not work any forfeiture or dissolution of the corporation, but the district court may summarily order such an election to be held upon the application of any member of the corporation. At any election pursuant to such order the persons entitled to vote in such election who shall be present at such meeting, either in person or by proxy, shall constitute a quorum for such meeting, notwithstanding any provision of the certificate of incorporation or the bylaws of the corporation to the contrary.
E. If authorized by the governing body, any requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that the electronic transmission shall either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the member or proxy holder.
Added by Laws 1986, c. 292, § 60, eff. Nov. 1, 1986. Amended by Laws 1999, c. 421, § 10, eff. Nov. 1, 1999; Laws 2004, c. 255, § 11, eff. Nov. 1, 2004.
§181061. Quorum and required vote for stock corporations.
QUORUM AND REQUIRED VOTE FOR STOCK CORPORATIONS
Subject to the provisions of the Oklahoma General Corporation Act, in respect of the vote that shall be required for a specified action, the certificate of incorporation or bylaws of any corporation authorized to issue stock may specify the number of shares and/or the amount of other securities having voting power the holders of which shall be present or represented by proxy at any meeting in order to constitute a quorum for, and the votes that shall be necessary for, the transaction of any business, but in no event shall a quorum consist of less than one-third (1/3) of the shares entitled to vote at the meeting, except that, where a separate vote by a class or series or classes or series is required, a quorum shall consist of no less than one-third (1/3) of the share of that class or series or classes or series. In the absence of such specification in the certificate of incorporation or bylaws of the corporation:
1. A majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of shareholders;
2. In all matters other than the election of directors, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the shareholders;
3. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors; and
4. Where a separate vote by a class or series or classes or series is required, a majority of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter and the affirmative vote of the majority of shares of such class or series or classes or series present in person or represented by proxy at the meeting shall be the act of such class or series or classes or series.
Added by Laws 1986, c. 292, § 61, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 11, eff. Nov. 1, 1988; Laws 1999, c. 421, § 11, eff. Nov. 1, 1999.
§181062. Voting Rights of Fiduciaries, Pledgors and Joint Owners of Stock.
VOTING RIGHTS OF FIDUCIARIES, PLEDGORS
AND JOINT OWNERS OF STOCK
A. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the corporation he has expressly empowered the pledgee, to vote thereon, in which case only the pledgee, or his proxy may represent such stock and vote thereon.
B. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the secretary of the corporation is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect:
1. If only one (1) vote, his act binds all; or
2. If more than one (1) vote, the act of the majority so voting binds all; or
3. If more than one (1) vote, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or any person voting the shares, or a beneficiary, if any, may apply to the district court to appoint an additional person to act with the persons so voting the shares, which shall then be voted as determined by a majority of such persons and the person appointed by such court. If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or evensplit for the purpose of this subsection shall be a majority or evensplit in interest.
Added by Laws 1986, c. 292, § 62, eff. Nov. 1, 1986.
§18-1063. Voting trusts and other voting agreements.
VOTING TRUSTS AND OTHER VOTING AGREEMENTS
A. One (1) or more shareholders, by agreement in writing, may deposit capital stock of an original issue with or transfer capital stock to any person or persons, or entity or entities, authorized to act as trustee, for the purpose of vesting in the person or persons, or entity or entities, who may be designated voting trustee, or voting trustees, the right to vote thereon for any period of time determined by the agreement upon the terms and conditions stated in the agreement. The agreement may contain any other lawful provisions not inconsistent with its purpose. After the filing of a copy of the agreement in the registered office of the corporation in this state, which copy shall be open to the inspection of any shareholder of the corporation or any beneficiary of the trust under the agreement daily during business hours, certificates of stock or uncertificated stock shall be issued to the voting trustee or trustees to represent any stock of an original issue so deposited with the trustee or trustees, and any certificates of stock or uncertificated stock so transferred to the voting trustee or trustees shall be surrendered and canceled and new certificates or uncertificated stock shall be issued therefor to the voting trustee or trustees. In the certificate so issued, if any, it shall be stated that it is issued pursuant to the agreement and that fact shall also be stated in the stock ledger of the corporation. The voting trustee or trustees may vote the stock so issued or transferred during the period specified in the agreement. Stock standing in the name of the voting trustee or trustees may be voted either in person or by proxy. In voting the stock, the voting trustee or trustees shall incur no responsibility as shareholder, trustee, or otherwise, except for the trustee's or trustees' own individual malfeasance. In any case where two (2) or more persons or entities are designated as voting trustees, and the right and method of voting any stock standing in their names at any meeting of the corporation are not fixed by the agreement appointing the trustees, the right to vote the stock and the manner of voting it at the meeting shall be determined by a majority of the trustees, or if they be equally divided or the right and manner of voting the stock in any particular case, the vote of the stock shall be divided equally among the trustees.
B. Any amendment to a voting trust agreement shall be made by a written agreement, a copy of which shall be filed in the registered office of the corporation in this state.
C. An agreement between two (2) or more shareholders, if in writing and signed by the parties thereto, may provide that in exercising any voting rights, the shares held by them shall be voted as provided by the agreement, or as the parties may agree, or as determined in accordance with a procedure agreed upon by them.
D. This section shall not be construed to invalidate any voting or other agreement among shareholders or any irrevocable proxy which is not otherwise illegal.
Added by Laws 1986, c. 292, § 63, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 4, emerg. eff. June 24, 1987; Laws 1998, c. 422, § 11, eff. Nov. 1, 1998; Laws 2004, c. 255, § 12, eff. Nov. 1, 2004.
§18-1064. List of shareholders entitled to vote - Penalty for refusal to produce - Stock ledger.
LIST OF SHAREHOLDERS ENTITLED TO VOTE;
PENALTY FOR REFUSAL TO PRODUCE STOCK LEDGER
A. The officer who has charge of the stock ledger of a corporation shall prepare and make, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Nothing contained in this section shall require the corporation to include electronic mail addresses or other electronic contact information on the list. The list shall be open to the examination of any shareholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting:
1. On a reasonably accessible electronic network; provided that the information required to gain access to the list is provided with the notice of the meeting; or
2. During ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that the information is available only to shareholders of the corporation. If the meeting is to be held at a place, then the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any shareholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access the list shall be provided with the notice of the meeting.
B. Upon the willful neglect or refusal of the directors to produce such a list at any meeting for the election of directors held at a place, or to open such a list to examination on a reasonably accessible electronic network during any meeting for the election of directors held solely by means of remote communication, they shall be ineligible for election to any office at the meeting.
C. The stock ledger shall be the only evidence as to who are the shareholders entitled by this section to examine the list required by this section or to vote in person or by proxy at any meeting of shareholders.
Added by Laws 1986, c. 292, § 64, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 12, eff. Nov. 1, 2001; Laws 2004, c. 255, § 13, eff. Nov. 1, 2004.
§18-1065. Inspection of Books and Records.
INSPECTION OF BOOKS AND RECORDS
A. As used in this section:
1. "Shareholder" means:
a. a shareholder of record in a stock corporation, or a person who is the beneficial owner of shares of stock held either in a voting trust or by a nominee on behalf of a person, and
b. a member of a nonstock corporation as reflected on the records of the nonstock corporation;
2. "List of shareholders" includes a list of members in a nonstock corporation;
3. "Under oath" includes statements the declarant affirms to be true under penalty of perjury under the laws of the United States or any state; and
4. "Subsidiary" means any entity directly or indirectly owned, in whole or in part, by the corporation of which the shareholder is a shareholder and over the affairs of which the corporation directly or indirectly exercises control, and includes but is not limited to corporations, partnerships, limited partnerships, limited liability partnerships, limited liability companies, statutory trusts and joint ventures.
B. Any shareholder, in person or by attorney or other agent, upon written demand under oath stating the purpose thereof, shall have the right during the usual hours for business to inspect for any proper purpose, and to make copies and extracts from:
1. The corporation's stock ledger, a list of shareholders, and its other books and records; and
2. A subsidiary's books and records, to the extent that:
a. the corporation has actual possession and control of the records of the subsidiary, or
b. the corporation could obtain the records through the exercise of control over the subsidiary,
provided that as of the date of the making of the demand:
(1) shareholder inspection of the books and records of the subsidiary would not constitute a breach of an agreement between the corporation or the subsidiary and a person or person not affiliated with the corporation, and
(2) the subsidiary would not have the right under the law applicable to it to deny the corporation access to the books and records upon demand by the corporation.
In every instance where the shareholder is other than a records holder of stock in a stock corporation or a member of a nonstock corporation, the demand under oath shall state the person's status as a shareholder or member, be accompanied by documentary evidence of beneficial ownership of the stock or beneficial membership, and state that the documentary evidence is a true and correct copy of what it purports to be. A proper purpose shall mean a purpose reasonably related to a person's interest as a shareholder or member. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or other writing which authorizes the attorney or other agent to so act on behalf of the shareholder. The demand under oath shall be directed to the corporation at its registered office in this state or at its principal place of business.
C. 1. If the corporation or an officer or agent thereof refuses to permit an inspection sought by a shareholder or attorney or other agent acting for the shareholder pursuant to the provisions of subsection B of this section or does not reply to the demand within five (5) business days after the demand has been made, the shareholder may apply to the district court for an order to compel an inspection. The court may summarily order the corporation to permit the shareholder to inspect the corporation's stock ledger, an existing list of shareholders, and its other books and records, and to make copies or extracts therefrom; or the court may order the corporation to furnish to the shareholder a list of its shareholders as of a specific date on condition that the shareholder first pay to the corporation the reasonable cost of obtaining and furnishing the list and on other conditions as the court deems appropriate.
2. Where the shareholder seeks to inspect the corporation's books and records, other than its stock ledger or list of shareholders, the shareholder shall first establish that:
a. the shareholder is a shareholder,
b. the shareholder has complied with the provisions of this section respecting the form and manner of making demand for inspection of the documents, and
c. the inspection the shareholder seeks is for a proper purpose.
3. Where the shareholder seeks to inspect the corporation's stock ledger or list of shareholders and has complied with the provisions of this section respecting the form and manner of making demand for inspection of the documents, the burden of proof shall be upon the corporation to establish that the inspection the shareholder seeks is for an improper purpose. The court may, in its discretion, prescribe any limitations or conditions upon the inspection, or award other or further relief as the court may deem just and proper. The court may order books, documents, and records, pertinent extracts therefrom, or duly authenticated copies thereof, to be brought within this state and kept in this state upon such terms and conditions as the order may prescribe.
D. Any director, including a member of the governing body of a nonstock corporation, shall have the right to examine the corporation's stock ledger, a list of its shareholders, and its other books and records for a purpose reasonably related to his or her position as a director. The district court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the list of shareholders and to make copies or extracts therefrom. The court, in its discretion, may prescribe any limitations or conditions with reference to the inspection, or award other or further relief as the court may deem just and proper. The burden of proof shall be upon the corporation to establish that the inspection the director seeks is for an improper purpose.
Added by Laws 1986, c. 292, § 65, eff. Nov. 1, 1986. Amended by Laws 1998, c. 422, § 12, eff. Nov. 1, 1998; Laws 2004, c. 255, § 14, eff. Nov. 1, 2004.
§181066. Voting, Inspection and Other Rights of Bondholders and Debenture Holders.
VOTING, INSPECTION AND OTHER RIGHTS OF
BONDHOLDERS AND DEBENTURE HOLDERS
Every corporation, in its certificate of incorporation, may confer upon the holders of any bonds, debentures or other obligations issued or to be issued by the corporation the power to vote in respect to the corporate affairs and management of the corporation to the extent and in the manner provided in the certificate of incorporation, and may confer upon such holders of bonds, debentures or other obligations the same right of inspection of its books, accounts and other records, and also any other rights, which the shareholders of the corporation have or may have by reason of the provisions of the Oklahoma General Corporation Act or of its certificate of incorporation. If the certificate of incorporation so provides, such holders of bonds, debentures or other obligations shall be deemed to be shareholders, and their bonds, debentures or other obligations shall be deemed to be shares of stock, for the purpose of any provision of the Oklahoma General Corporation Act which requires the vote of shareholders as a prerequisite to any corporate action and the certificate of incorporation may divest the holders of capital stock, in whole or in part, of their right to vote on any corporate matter whatsoever, except as set forth in paragraph 2 of subsection B of Section 77 of this act.
Added by Laws 1986, c. 292, § 66, eff. Nov. 1, 1986.
§18-1067. Notice of meetings and adjourned meetings.
NOTICE OF MEETINGS AND ADJOURNED MEETINGS
A. Whenever shareholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which shareholders and proxyholders may be deemed to be present in person and vote at the meetings and, in the case of a special meeting, the purpose or purposes for which the meeting is called.
B. Unless otherwise provided for in the Oklahoma General Corporation Act, the written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each shareholder entitled to vote at such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the shareholder at his address as it appears on the records of the corporation. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given, in the absence of fraud, shall be prima facie evidence of the facts stated therein.
C. When a meeting is adjourned to another time or place, unless the bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which shareholders and proxyholders may be deemed to be present in person and vote at the adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.
Added by Laws 1986, c. 292, § 67, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 13, eff. Nov. 1, 2001.
§18-1068. Vacancies and Newly Created Directorships.
VACANCIES AND NEWLY CREATED DIRECTORSHIPS
A. 1. Unless otherwise provided in the certificate of incorporation or bylaws:
a. Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the shareholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director; and
b. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one (1) or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.
2. If at any time, by reason of death or resignation or other cause, a corporation should have no directors in office, then any officer or any shareholder or an executor, administrator, trustee or guardian of a shareholder, or other fiduciary entrusted with like responsibility for the person or estate of a shareholder, may call a special meeting of shareholders in accordance with the provisions of the certificate of incorporation or the bylaws, or may apply to the district court for a decree summarily ordering an election as provided for in Section 1056 of this title.
B. In the case of a corporation the directors of which are divided into classes, any directors chosen under subsection A of this section shall hold office until the next election of the class for which such directors shall have been chosen, and until their successors shall be elected and qualified.
C. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board, as constituted immediately prior to any such increase, the district court, upon application of any shareholder or shareholders holding at least ten percent (10%) of the voting stock at the time outstanding having the right to vote for such directors, may summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office, which election shall be governed by the provisions of Section 1056 of this title as far as applicable.
D. Unless otherwise provided in the certificate of incorporation or bylaws, when one or more directors shall resign from the board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided for in this section in the filling of other vacancies.
Added by Laws 1986, c. 292, § 68, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 15, eff. Nov. 1, 2004.
§18-1069. Form of records.
FORM OF RECORDS
Any records maintained by a corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. Any corporation shall so convert any records so kept upon the request of any person entitled to inspect the records pursuant to any provision of the Oklahoma General Corporation Act. Where records are kept in the manner, a clearly legible paper form produced from or by means of the information storage device or method shall be admissible in evidence and shall be accepted for all other purposes, to the same extent as an original paper record of the same information would have been, when the paper form accurately portrays the record.
Added by Laws 1986, c. 292, § 69, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 14, eff. Nov. 1, 2001.
§18-1070. Contested Election of Directors - Proceedings to Determine Validity.
CONTESTED ELECTION OF DIRECTORS;
PROCEEDINGS TO DETERMINE VALIDITY
A. Upon application of any shareholder or director, or any officer whose title to office is contested, or any member of a corporation without capital stock, the district court may hear and determine the validity of any election, appointment, removal or resignation of any director, member of the governing body, or officer of any corporation, and the right of any person to hold, or continue to hold, such office, and, in case any such office is claimed by more than one person, may determine the person entitled thereto; and to that end make such order or decree in any such case as may be just and proper, with power to enforce the production of any books, papers and records of the corporation relating to the issue. In case it should be determined that no valid election has been held, the district court may order an election to be held in accordance with the provisions of Section 1056 or 1060 of this title. In any such application, service of copies of the application upon the registered agent of the corporation shall be deemed to be service upon the corporation and upon the person whose title to office is contested and upon the person, if any, claiming such office; and the registered agent shall forward immediately a copy of the application to the corporation and to the person whose title to office is contested and to the person, if any, claiming such office, in a postpaid, sealed, registered letter addressed to such corporation and such person at their post office addresses last known to the registered agent or furnished to the registered agent by the applicant shareholder. The court may make such order respecting further or other notice of such application as it deems proper under the circumstances.
B. Upon application of any shareholder or any member of a corporation without capital stock, the district court may hear and determine the result of any vote of shareholders or members, as the case may be, upon matters other than the election of directors, officers or members of the governing body. Service of the application upon the registered agent of the corporation shall be deemed to be service upon the corporation, and no other party need be joined in order for the court to adjudicate the result of the vote. The court may make such order respecting notice of the application as it deems proper under the circumstances.
Added by Laws 1986, c. 292, § 70, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 16, eff. Nov. 1, 2004.
§181071. Appointment of custodian or receiver of corporation on deadlock or for other cause.
APPOINTMENT OF CUSTODIAN OR RECEIVER OF CORPORATION
ON DEADLOCK OR FOR OTHER CAUSE
A. The district court, upon application of any shareholder, may appoint one or more persons to be custodians, and, if the corporation is insolvent, to be receivers, of and for any corporation when:
1. at any meeting held for the election of directors the shareholders are so divided that they have failed to elect successors to directors whose terms have expired or would have expired upon qualification of their successors; or
2. the business of the corporation is suffering or is threatened with irreparable injury because the directors are so divided respecting the management of the affairs of the corporation that the required vote for action by the board of directors cannot be obtained and the shareholders are unable to terminate this division; or
3. the corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets.
B. A custodian appointed pursuant to the provisions of this section shall have all the powers and title of a receiver appointed by the court under applicable law, but the authority of the custodian is to continue the business of the corporation and not to liquidate its affairs and distribute its assets, except when the court shall otherwise order and except in cases arising pursuant to paragraph 3 of subsection A of this section.
Added by Laws 1986, c. 292, § 71, eff. Nov. 1, 1986.
§181072. Powers of Court in Elections of Directors.
POWERS OF COURT IN ELECTIONS OF DIRECTORS
A. The district court, in any proceeding instituted pursuant to the provisions of Section 56, 60 or 70 of this act, may determine the right and power of persons claiming to own stock, or in the case of a corporation without capital stock, of the persons claiming to be members, to vote at any meeting of the shareholders or members.
B. The district court may appoint a master to hold any election provided for in Section 56, 60 or 70 of this act under such orders and powers as it deems proper; and it may punish any officer or director for contempt in case of disobedience of any order made by the court; and, in case of disobedience by a corporation of any order made by the court, may enter a decree against such corporation for a penalty of not more than Five Thousand Dollars ($5,000.00).
Added by Laws 1986, c. 292, § 72, eff. Nov. 1, 1986.
§18-1073. Consent of shareholders in lieu of meeting.
CONSENT OF SHAREHOLDERS IN LIEU OF MEETING
A. Except as provided in subsection B of this section or unless otherwise provided for in the certificate of incorporation, any action required by the provisions of the Oklahoma General Corporation Act to be taken at any annual or special meeting of shareholders of a corporation or any action which may be taken at any annual or special meeting of shareholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested.
B. With respect to a domestic corporation with a class of voting stock listed or traded on a national securities exchange or registered under Section 12(g) of the Securities Exchange Act of 1934, 15 U.S.C. Section 78a et seq., as amended, which has one thousand or more shareholders of record, unless otherwise provided for in the certificate of incorporation, any action required by the provisions of this act to be taken at any annual or special meeting of shareholders of the corporation or any action which may be taken at any annual or special meeting of shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action taken, shall be signed by the holders of all outstanding stock entitled to vote thereon and shall be delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. The provisions of this subsection shall be effective with respect to corporate actions by written consent, and to written consent or consents, as to which the first written consent is executed or solicited after September 1, 1991.
C. Unless otherwise provided for in the certificate of incorporation, any action required by the provisions of this act to be taken at a meeting of the members of a nonstock corporation, or any action which may be taken at any meeting of the members of a nonstock corporation, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action taken, shall be signed by members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all members having a right to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested.
D. 1. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a shareholder, member or proxyholder, or by a person or persons authorized to act for a shareholder, member or proxyholder, shall be deemed to be written, signed and dated for the purposes of this section; provided that any telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the corporation can determine:
a. that the telegram, cablegram or other electronic transmission was transmitted by the shareholder, member or proxyholder or by a person or persons authorized to act for the shareholder, member or proxyholder, and
b. the date on which the shareholder, member or proxyholder or authorized person or persons transmitted the telegram, cablegram or electronic transmission.
The date on which the telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which the consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until the consent is reproduced in paper form and until the paper form shall be delivered to the corporation by delivery to its registered office in this state, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders or members are recorded. Delivery made to a corporation's registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders or members are recorded if, to the extent and in the manner provided by resolution of the board of directors or governing body of the corporation.
2. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used; provided that the copy, facsimile or other reliable reproduction shall be a complete reproduction of the entire original writing.
E. Every written consent shall bear the date of signature of each shareholder or member who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this section to the corporation, written consents signed by a sufficient number of holders or members to take action are delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested.
F. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those shareholders or members, as the case may be, who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for the meeting had been the date that written consents signed by a sufficient number of shareholders or members to take the action were delivered to the corporation as provided in subsection C of this section. In the event that the action for which consent is given is an action that would have required the filing of a certificate under any other section of this title if the action had been voted on by shareholders or by members at a meeting thereof the certificate filed under the other section shall state, in lieu of any statement required by the section concerning any vote of shareholders or members, that written consent has been given in accordance with the provisions of this section.
Added by Laws 1986, c. 292, § 73, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 12, eff. Nov. 1, 1988; Laws 1991, c. 53, § 1, eff. Sept. 1, 1991; Laws 1998, c. 422, § 13, eff. Nov. 1, 1998; Laws 2001, c. 405, § 15, eff. Nov. 1, 2001; Laws 2004, c. 255, § 17, eff. Nov. 1, 2004.
§18-1074. Waiver of notice.
WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the Oklahoma General Corporation Act or of the certificate of incorporation or bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the shareholders, directors, or members of a committee of directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or the bylaws.
Added by Laws 1986, c. 292, § 74, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 16, eff. Nov. 1, 2001.
§18-1075. Exception to requirements of notice.
EXCEPTION TO REQUIREMENTS OF NOTICE
A. Whenever notice is required to be given, pursuant to any provision of this title or of the certificate of incorporation or bylaws of any corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any of the other sections of this title, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
B. Whenever notice is required to be given pursuant to any provision of the Oklahoma General Corporation Act or the certificate of incorporation or bylaws of any corporation, to any shareholder or, if the corporation is a nonstock corporation, to any member to whom:
1. Notice of two consecutive annual meetings and all notices of meetings or of the taking of action by written consent without a meeting to such person during the period between such two consecutive annual meetings; or
2. All, and at least two, payments, if sent by firstclass mail, of dividends or interest on securities during a twelvemonth period,
have been mailed addressed to such person at the person's address as shown on the records of the corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall be taken or held without notice to such person shall have the same force and effect as if such notice had been duly given. If any such person shall deliver to the corporation a written notice setting forth the person's then current address, the requirement that notice be given to such person shall be reinstated. In the event that the action taken by the corporation is such as to require the filing of a certificate under any of the other sections of this act, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to the provisions of this subsection.
C. The exception in paragraph 1 of subsection B to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.
Added by Laws 1986, c. 292, § 75, eff. Nov. 1, 1986. Amended by Laws 2001, c. 405, § 17, eff. Nov. 1, 2001.
§18-1075.1. Voting procedures and inspectors of elections.
VOTING PROCEDURES AND INSPECTORS OF ELECTIONS
A. The corporation shall, in advance of any meeting of shareholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of shareholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector's ability.
B. The inspectors shall:
1. Ascertain the number of shares outstanding and the voting power of each;
2. Determine the shares represented at a meeting and the validity of proxies and ballots;
3. Count all votes and ballots;
4. Determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and
5. Certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots.
The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.
C. The date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the district court upon application by a shareholder shall determine otherwise.
D. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with subsection E of Section 1056 or paragraph 2 of subsection C of Section 1057 of this title, or any information provided pursuant to divisions (1) or (3) of subparagraph b of paragraph 2 of subsection A of Section 1056 of this title, ballots and the regular books and records of the corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the shareholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to paragraph 5 of subsection B of this section shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that the information is accurate and reliable.
E. Unless otherwise provided in the certificate of incorporation or bylaws, this section shall not apply to a corporation that does not have a class of voting stock that is:
1. Listed on a national securities exchange;
2. Authorized for quotation on an interdealer quotation system of a registered national securities association; or
3. Held of record by more than 2,000 shareholders.
Added by Laws 2001, c. 405, § 18, eff. Nov. 1, 2001.
§18-1075.2. Electronic notice - Effectiveness - Revocation of consent.
ELECTRONIC NOTICE; EFFECTIVENESS; REVOCATION OF CONSENT
A. Without limiting the manner of which notice otherwise may be given effectively to shareholders, any notice to shareholders given by the corporation under any provision of this act, the certificate of incorporation, or the bylaws shall be effective if given by a form of electronic transmission consented to by the shareholder to whom the notice is given. The consent shall be revocable by the shareholder by written notice to the corporation. The consent shall be deemed revoked if:
1. The corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with the consent; and
2. The inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat the inability as a revocation shall not invalidate any meeting or other action.
B. Notice given pursuant to subsection A of this section shall be deemed given if by:
1. Facsimile telecommunication, when directed to a number at which the shareholder has consented to receive notice;
2. Electronic mail, when directed to an electronic mail address at which the shareholder has consented to receive notice;
3. A posting on an electronic network together with separate notice to the shareholder of the specific posting, upon the later of:
a. the posting, and
b. the giving of the separate notice; and
4. Any other form of electronic transmission, when directed to the shareholder in accordance with the shareholder's consent.
An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
C. For purposes of this act, "electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
D. This section shall apply to a domestic corporation that is not authorized to issue capital stock, and when so applied, all references to shareholders shall be deemed to refer to members of such a corporation.
E. This section shall not apply to Sections 1045 or 1111 of this title.
Added by Laws 2001, c. 405, § 19, eff. Nov. 1, 2001.
§18-1075.3. Single written notice to shareholders sharing an address.
A. Without limiting the manner by which notice otherwise may be given effectively to shareholders, any notice to shareholders given by the corporation under any provision of this act, the certificate of incorporation, or the bylaws shall be effective if given by a single written notice to shareholders who share an address if consented to by the shareholders at that address to whom such notice is given. Any such consent shall be revocable by the shareholder by written notice to the corporation.
B. Any shareholder who fails to object in writing to the corporation, within sixty (60) days of having been given written notice by the corporation of its intention to send the single notice permitted under subsection A of this section, shall be deemed to have consented to receiving such single written notice.
C. This section shall apply to a corporation organized under this act that is not authorized to issue capital stock, and when so applied, all references to shareholders shall be deemed to refer to members of such a corporation.
D. This section shall not apply to Section 1045, 1111, 1119 or 1120 of Title 18 of the Oklahoma Statutes.
Added by Laws 2004, c. 255, § 18, eff. Nov. 1, 2004.
§181076. Amendment of Certificate of Incorporation before Receipt of Payment for Stock.
AMENDMENT OF CERTIFICATE OF INCORPORATION BEFORE RECEIPT
OF PAYMENT FOR STOCK
A. Before a corporation has received any payment for any of its stock, it may amend its certificate of incorporation at any time or times, in any and as many respects as may be desired, so long as its certificate of incorporation as amended would contain only such provisions as it would be lawful and proper to insert in an original certificate of incorporation filed at the time of filing the amendment.
B. The amendment of certificate of incorporation authorized by the provisions of this section shall be adopted by a majority of the incorporators, if directors were not named in the original certificate of incorporation or have not yet been elected, or, if directors were named in the original certificate of incorporation or have been elected and have qualified, by a majority of the directors. A certificate setting forth the amendment and certifying that the corporation has not received any payment for any of its stock and that the amendment has been duly adopted in accordance with the provisions of this section shall be executed, acknowledged and filed in accordance with the provisions of Section 7 of this act. Upon such filing, the corporation's certificate of incorporation shall be deemed to be amended accordingly as of the date on which the original certificate of incorporation became effective, except as to those persons who are substantially and adversely affected by the amendment and as to those persons the amendment shall be effective from the filing date.
Added by Laws 1986, c. 292, § 76, eff. Nov. 1, 1986.
§18-1077. Amendment of certificate of incorporation after receipt of payment for stock - Nonstock corporations.
AMENDMENT OF CERTIFICATE OF INCORPORATION AFTER RECEIPT
OF PAYMENT FOR STOCK; NONSTOCK CORPORATIONS
A. 1. After a corporation has received payment for any of its capital stock, it may amend its certificate of incorporation, from time to time, in any and as many respects as may be desired, so long as its certificate of incorporation as amended would contain only provisions as it would be lawful and proper to insert in an original certificate of incorporation filed at the time of the filing of the amendment; and if a change in stock or the rights of shareholders, or an exchange, reclassification, subdivision, combination, or cancellation of stock or rights of shareholders is to be made, provisions as may be necessary to effect the change, exchange, reclassification, subdivision, combination, or cancellation. In particular, and without limitation upon the general power of amendment, a corporation may amend its certificate of incorporation, from time to time, so as:
a. to change its corporate name,
b. to change, substitute, enlarge, or diminish the nature of its business or its corporate powers and purposes,
c. to increase or decrease its authorized capital stock or to reclassify the same, by changing the number, par value, designations, preferences, or relative, participating, optional, or other special rights of the shares, or the qualifications, limitations, or restrictions of such rights, or by changing shares with par value into shares without par value, or shares without par value into shares with par value either with or without increasing or decreasing the number of shares or by subdividing or combining the outstanding shares of any class or series of a class of shares into a greater or lesser number of outstanding shares,
d. to cancel or otherwise affect the right of the holders of the shares of any class to receive dividends which have accrued but have not been declared,
e. to create new classes of stock having rights and preferences either prior and superior or subordinate and inferior to the stock of any class then authorized, whether issued or unissued, or
f. to change the period of its duration.
2. Any or all changes or alterations provided for in paragraph 1 of this subsection may be effected by one certificate of amendment.
B. Every amendment authorized by the provisions of subsection A of this section shall be made and effected in the following manner:
1. If the corporation has capital stock, its board of directors shall adopt a resolution setting forth the amendment proposed, declaring its advisability, and either calling a special meeting of the shareholders entitled to vote in respect thereof for the consideration of the amendment or directing that the amendment proposed be considered at the next annual meeting of shareholders. The special or annual meeting shall be called and held upon notice in accordance with the provisions of Section 1067 of this title. The notice shall set forth the amendment in full or a brief summary of the changes to be effected thereby, as the directors shall deem advisable. At the meeting, a vote of the shareholders entitled to vote thereon shall be taken for and against the proposed amendment. If a majority of the outstanding stock entitled to vote thereon, and a majority of the outstanding stock of each class entitled to vote thereon as a class, has been voted in favor of the amendment, a certificate setting forth the amendment and certifying that the amendment has been duly adopted in accordance with the provisions of this section shall be executed, acknowledged, and filed and shall become effective in accordance with the provisions of Section 1007 of this title.
2. The holders of the outstanding shares of a class shall be entitled to vote as a class upon a proposed amendment, whether or not entitled to vote thereon by the provisions of the certificate of incorporation, if the amendment would increase or decrease the aggregate number of authorized shares of the class, increase or decrease the par value of the shares of the class, or alter or change the powers, preferences, or special rights of the shares of the class so as to affect them adversely. If any proposed amendment would alter or change the powers, preferences, or special rights of one or more series of any class so as to affect them adversely, but shall not so affect the entire class, then only the shares of the series so affected by the amendment shall be considered a separate class for the purposes of this paragraph. The number of authorized shares of any such class or classes of stock may be increased or decreased, but not below the number of shares thereof then outstanding, by the affirmative vote of the holders of a majority of the stock of the corporation entitled to vote irrespective of the provisions of this paragraph, if so provided in the original certificate of incorporation, in any amendment thereto which created the class or classes of stock or which was adopted prior to the issuance of any shares of the class or classes of stock, or in any amendment thereto which was authorized by a resolution or resolutions adopted by the affirmative vote of the holders of a majority of the class or classes of stock.
3. If the corporation has no capital stock, then the governing body thereof shall adopt a resolution setting forth the amendment proposed and declaring its advisability. If a majority of all the members of the governing body shall vote in favor of the amendment, a certificate thereof shall be executed, acknowledged, and filed and shall become effective in accordance with the provisions of Section 1007 of this title. The certificate of incorporation of a corporation without capital stock may contain a provision requiring an amendment thereto to be approved by a specified number or percentage of the members or of any specified class of members of the corporation in which event the proposed amendment shall be submitted to the members or to any specified class of members of the corporation without capital stock in the same manner, so far as applicable, as is provided for in this section for an amendment to the certificate of incorporation of a stock corporation; and in the event of the adoption thereof by the members, a certificate evidencing the amendment shall be executed, acknowledged, and filed and shall become effective in accordance with the provisions of Section 1007 of this title.
4. Whenever the certificate of incorporation shall require action by the board of directors, by the holders of any class or series of shares, or by the holders of any other securities having voting power, the vote of a greater number or proportion than is required by the provisions of the Oklahoma General Corporation Act, the provision of the certificate of incorporation requiring a greater vote shall not be altered, amended, or repealed except by a greater vote.
C. The resolution authorizing a proposed amendment to the certificate of incorporation may provide that at any time prior to the effectiveness of the filing of the amendment with the Secretary of State, notwithstanding authorization of the proposed amendment by the shareholders of the corporation or by the members of a nonstock corporation, the board of directors or governing body may abandon the proposed amendment without further action by the shareholders or members.
Added by Laws 1986, c. 292, § 77, eff. Nov. 1, 1986. Amended by Laws 1996, c. 69, § 4, eff. Nov. 1, 1996; Laws 1998, c. 422, § 14, eff. Nov. 1, 1998; Laws 1999, c. 421, § 12, eff. Nov. 1, 1999; Laws 2001, c. 405, § 20, eff. Nov. 1, 2001.
§181078. Retirement of stock.
RETIREMENT OF STOCK
A. A corporation, by resolution of its board of directors, may retire any shares of its capital stock that are issued but are not outstanding.
B. Whenever any shares of the capital stock of a corporation are retired, they shall resume the status of authorized and unissued shares of the class or series to which they belong unless the certificate of incorporation otherwise provides. If the certificate of incorporation prohibits the reissuance of such shares, or prohibits the reissuance of such shares as a part of a specific series only, a certificate stating that reissuance of the shares, as part of the class or series, is prohibited identifying the shares and reciting their retirement shall be executed, acknowledged and filed and shall become effective in accordance with the provisions of Section 1007 of this title. When such certificate becomes effective, it shall have the effect of amending the certificate of incorporation so as to reduce accordingly the number of authorized shares of the class or series to which such shares belong or, if such retired shares constitute all of the authorized shares of the class or series to which they belong, of eliminating from the certificate of incorporation all reference to such class or series of stock.
C. If the capital of the corporation will be reduced by or in connection with the retirement of shares, the reduction of capital shall be effected pursuant to the provisions of Section 1079 of this title.
Added by Laws 1986, c. 292, § 78, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 5, operative Nov. 1, 1987; Laws 1988, c. 323, § 13, eff. Nov. 1, 1988.
§181079. Reduction of Capital.
REDUCTION OF CAPITAL
A. A corporation, by resolution of its board of directors, may reduce its capital in any of the following ways:
1. By reducing or eliminating the capital represented by shares of capital stock which have been retired; or
2. By applying to an otherwise authorized purchase or redemption of outstanding shares of its capital stock some or all of the capital represented by the shares being purchased or redeemed, or any capital that has not been allocated to any particular class of its capital stock; or
3. By applying to an otherwise authorized conversion or exchange of outstanding shares of its capital stock some or all of the capital represented by the shares being converted or exchanged, or some or all of any capital that has not been allocated to any particular class of its capital stock, or both, to the extent that such capital in the aggregate exceeds the total aggregate par value or the stated capital of any previously unissued shares issuable upon such conversion or exchange; or
4. By transferring to surplus:
a. some or all of the capital not represented by any particular class of its capital stock; or
b. some or all of the capital represented by issued shares of its par value capital stock, which capital is in excess of the aggregate par value of such shares; or
c. some of the capital represented by issued shares of its capital stock without par value.
B. Notwithstanding the other provisions of this section, no reduction of capital shall be made or effected unless the assets of the corporation remaining after such reduction shall be sufficient to pay any debts of the corporation for which payment has not been otherwise provided. No reduction of capital shall release any liability of any shareholder whose shares have not been fully paid.
Added by Laws 1986, c. 292, § 79, eff. Nov. 1, 1986.
§18-1080. Restated certificate of incorporation.
RESTATED CERTIFICATE OF INCORPORATION
A. A corporation, whenever desired, may integrate into a single instrument all of the provisions of its certificate of incorporation which are then in effect and operative as a result of there having up to that time been filed with the Secretary of State one or more certificates or other instruments pursuant to any of the sections referred to in Section 1008 of this title, and it may at the same time also further amend its certificate of incorporation by adopting a restated certificate of incorporation.
B. If the restated certificate of incorporation merely restates and integrates but does not further amend the certificate of incorporation, as up to that time amended or supplemented by any instrument that was filed pursuant to any of the sections mentioned in Section 1008 of this title, it may be adopted by the board of directors without a vote of the shareholders, or it may be proposed by the directors and submitted by them to the shareholders for adoption, in which case the procedure and vote required by Section 1077 of this title for amendment of the certificate of incorporation shall be applicable. If the restated certificate of incorporation restates and integrates and also further amends in any respect the certificate of incorporation, as up to that time amended or supplemented, it shall be proposed by the directors and adopted by the shareholders in the manner and by the vote prescribed by Section 1077 of this title or, if the corporation has not received any payment for any of its stock, in the manner and by the vote prescribed by Section 1076 of this title.
C. A restated certificate of incorporation shall be specifically designated as such in its heading. It shall state, either in its heading or in an introductory paragraph, the corporation's present name, and, if it has been changed, the name under which it was originally incorporated, and the date of filing of its original certificate of incorporation with the Secretary of State. If it was adopted by the board of directors without a vote of the shareholders, unless it was adopted pursuant to the provisions of Section 1076 of this title, it shall state that it only restates and integrates and does not further amend the provisions of the corporation's certificate of incorporation as up to that time amended or supplemented, and that there is no discrepancy between those provisions and the provisions of the restated certificate. A restated certificate of incorporation may omit:
1. Such provisions of the original certificate of incorporation which named the incorporator or incorporators, the initial board of directors, and the original subscribers for shares; and
2. Such provisions contained in any amendment to the certificate of incorporation as were necessary to effect a change, exchange, reclassification, subdivision, combination or cancellation of stock, if such change, exchange, reclassification, subdivision, combination or cancellation has become effective.
Any such omissions shall not be deemed a further amendment.
D. A restated certificate of incorporation shall be executed, acknowledged and filed in accordance with the provisions of Section 1007 of this title. Upon its filing with the Secretary of State, the original certificate of incorporation, as up to that time amended or supplemented, shall be superseded. From that time forward, the restated certificate of incorporation, including any further amendments or changes made thereby, shall be the certificate of incorporation of the corporation, but the original date of incorporation shall remain unchanged.
E. Any amendment or change effected in connection with the restatement and integration of the certificate of incorporation shall be subject to any other provision of the Oklahoma General Corporation Act, not inconsistent with the provisions of this section, which would apply if a separate certificate of amendment were filed to effect such amendment or change.
Added by Laws 1986, c. 292, § 80, eff. Nov. 1, 1986. Amended by Laws 1996, c. 69, § 5, eff. Nov. 1, 1996; Laws 2004, c. 255, § 19, eff. Nov. 1, 2004.
§18-1081. Merger or consolidation of domestic corporations.
MERGER OR CONSOLIDATION OF DOMESTIC CORPORATIONS
A. Any two or more corporations existing under the laws of this state may merge into a single corporation, which may be any one of the constituent corporations or may consolidate into a new corporation formed by the consolidation, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with the provisions of this section.
B. The board of directors of each corporation which desires to merge or consolidate shall adopt a resolution approving an agreement of merger or consolidation and declaring its advisability. The agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the same into effect;
3. In the case of a merger, the amendments or changes in the certificate of incorporation of the surviving corporation as are desired to be effected by the merger, or, if no amendments or changes are desired, a statement that the certificate of incorporation of the surviving corporation shall be its certificate of incorporation of the surviving or resulting corporation;
4. In the case of a consolidation, that the certificate of incorporation of the resulting corporation shall be as is set forth in an attachment to the agreement;
5. The manner, if any, of converting the shares of each of the constituent corporations into shares or other securities of the corporation surviving or resulting from the merger or consolidation, or of canceling some or all of the shares, and, if any shares of any of the constituent corporations are not to remain outstanding, to be converted solely into shares or other securities of the surviving or resulting corporation or to be canceled, the cash, property, rights, or securities of any other corporation or entity which the holders of the shares are to receive in exchange for or upon conversion of the shares and the surrender of any certificates evidencing them, which cash, property, rights, or securities of any other corporation or entity may be in addition to or in lieu of shares or other securities of the surviving or resulting corporation; and
6. Other details or provisions as are deemed desirable, including without limiting the generality of the foregoing, a provision for the payment of cash in lieu of the issuance or recognition of fractional shares, interests or rights, or for any other arrangement with respect thereto, consistent with the provisions of Section 1036 of this title. The agreement so adopted shall be executed and acknowledged in accordance with the provisions of Section 1007 of this title. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of the agreement; provided, that the manner in which these facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation. The term "facts" as used in this paragraph, includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
C. The agreement required by the provisions of subsection B of this section shall be submitted to the shareholders of each constituent corporation at an annual or special meeting thereof for the purpose of acting on the agreement. Due notice of the time, place, and purpose of the meeting shall be mailed to each holder of stock whether voting or nonvoting, of the corporation at the address which appears on the records of the corporation, at least twenty (20) days prior to the date of the meeting. The notice shall contain a copy of the agreement or a brief summary thereof, as the directors shall deem advisable; provided, however, the notice shall be effective only with respect to mergers or consolidations for which the notice of the shareholders meeting to vote thereon has been mailed after November 1, 1988. At the meeting the agreement shall be considered and a vote taken for its adoption or rejection. If a majority of the outstanding stock of the corporation entitled to vote thereon shall be voted for the adoption of the agreement, that fact shall be certified on the agreement by the secretary or the assistant secretary of the corporation. If the agreement shall be so adopted and certified by each constituent corporation, it shall then be filed and shall become effective in accordance with the provisions of Section 1007 of this title. In lieu of filing an agreement of merger or consolidation required by this section, the surviving or resulting corporation may file a certificate of merger or consolidation executed in accordance with the provisions of Section 1007 of this title and which states:
1. The name and state of incorporation of each of the constituent corporations;
2. That an agreement of merger or consolidation has been approved, adopted, certified, executed, and acknowledged by each of the constituent corporations in accordance with the provisions of this section;
3. The name of the surviving or resulting corporation;
4. In the case of a merger, the amendments or changes in the certificate of incorporation of the surviving corporation as are desired to be effected by the merger, or, if no amendments or changes are desired, a statement that the certificate of incorporation of the surviving corporation shall be its certificate of incorporation;
5. In the case of a consolidation, that the certificate of incorporation of the resulting corporation shall be as is set forth in an attachment to the certificate;
6. That the executed agreement of consolidation or merger is on file at the principal place of business of the surviving corporation, stating the address thereof; and
7. That a copy of the agreement of consolidation or merger will be furnished by the surviving corporation, on request and without cost, to any shareholder of any constituent corporation. For purposes of Sections 1084 and 1086 of this title, the term "shareholder" shall be deemed to include "member".
D. Any agreement of merger or consolidation may contain a provision that at any time prior to the time that the agreement, or a certificate filed with the Secretary of State in lieu thereof, becomes effective in accordance with Section 1007 of this title, the agreement may be terminated by the board of directors of any constituent corporation notwithstanding approval of the agreement by the shareholders of all or any of the constituent corporations; provided, if the agreement of merger or consolidation is terminated after the filing of the agreement, or a certificate filed with the Secretary of State in lieu thereof, but before the agreement or certificate has become effective, a certificate of termination of merger or consolidation shall be filed in accordance with Section 1007 of this title. Any agreement of merger or consolidation may contain a provision that the boards of directors of the constituent corporations may amend the agreement at any time prior to the time that the agreement, or a certificate filed with the Secretary of State in lieu thereof, becomes effective in accordance with Section 1007 of this title; provided, that an amendment made subsequent to the adoption of the agreement by the shareholders of any constituent corporation shall not:
1. Alter or change the amount or kind of shares, securities, cash, property, or rights to be received in exchange for or on conversion of all or any of the shares of any class or series thereof of the constituent corporation;
2. Alter or change any term of the certificate of incorporation of the surviving corporation to be effected by the merger or consolidation; or
3. Alter or change any of the terms and conditions of the agreement if an alteration or change would adversely affect the holders of any class or series thereof of the constituent corporation.
If the agreement of merger or consolidation is amended after the filing of the agreement, or a certificate in lieu thereof, with the Secretary of State, but before the agreement or certificate has become effective, a certificate of amendment of merger or consolidation shall be filed in accordance with Section 1007 of this title.
E. In the case of a merger, the certificate of incorporation of the surviving corporation shall automatically be amended to the extent, if any, that changes in the certificate of incorporation are set forth in the certificate of merger.
F. Notwithstanding the requirements of subsection C of this section, unless required by its certificate of incorporation, no vote of shareholders of a constituent corporation surviving a merger shall be necessary to authorize a merger if:
1. The agreement of merger does not amend in any respect the certificate of incorporation of the constituent corporation;
2. Each share of stock of the constituent corporation outstanding immediately prior to the effective date of the merger is to be an identical outstanding or treasury share of the surviving corporation after the effective date of the merger; and
3. Either no shares of common stock of the surviving corporation and no shares, securities, or obligations convertible into such stock are to be issued or delivered under the plan of merger, or the authorized unissued shares or the treasury shares of common stock of the surviving corporation to be issued or delivered under the plan of merger plus those initially issuable upon conversion of any other shares, securities, or obligations to be issued or delivered under the plan do not exceed twenty percent (20%) of the shares of common stock of the constituent corporation outstanding immediately prior to the effective date of the merger. No vote of shareholders of a constituent corporation shall be necessary to authorize a merger or consolidation if no shares of the stock of the corporation shall have been issued prior to the adoption by the board of directors of the resolution approving the agreement of merger or consolidation. If an agreement of merger is adopted by the constituent corporation surviving the merger, by action of its board of directors and without any vote of its shareholders pursuant to the provisions of this subsection, the secretary or assistant secretary of that corporation shall certify on the agreement that the agreement has been adopted pursuant to the provisions of this subsection and:
a. if it has been adopted pursuant to paragraph 1 of this subsection, that the conditions specified have been satisfied, or
b. if it has been adopted pursuant to paragraph 2 of this subsection, that no shares of stock of the corporation were issued prior to the adoption by the board of directors of the resolution approving the agreement of merger or consolidation.
The agreement so adopted and certified shall then be filed and shall become effective in accordance with the provisions of Section 1007 of this title. Filing shall constitute a representation by the person who executes the certificate that the facts stated in the certificate remain true immediately prior to filing.
G. 1. Notwithstanding the requirements of subsection C of this section, unless expressly required by its certificate of incorporation, no vote of shareholders of a constituent corporation shall be necessary to authorize a merger with or into a single direct or indirect wholly owned subsidiary of the constituent corporation if:
a. the constituent corporation and the direct or indirect wholly owned subsidiary of the constituent corporation are the only constituent entities to the merger,
b. each share or fraction of a share of the capital stock of the constituent corporation outstanding immediately prior to the effective time of the merger is converted in the merger into a share or equal fraction of share of capital stock of a holding company having the same designations, rights, powers, and preferences, and the qualifications, limitations, and restrictions thereof, as the share of stock of the constituent corporation being converted in the merger,
c. the holding company and the constituent corporation are corporations of this state and the direct or indirect wholly owned subsidiary that is the other constituent entity to the merger is a corporation or limited liability company of this state,
d. the certificate of incorporation and bylaws of the holding company immediately following the effective time of the merger contain provisions identical to the certificate of incorporation and bylaws of the constituent corporation immediately prior to the effective time of the merger, other than provisions, if any, regarding the incorporator or incorporators, the corporate name, the registered office and agent, the initial board of directors, and the initial subscribers of shares and provisions contained in any amendment to the certificate of incorporation as were necessary to effect a change, exchange, reclassification, subdivision, combination or cancellation of stock, if a change, exchange, reclassification, or cancellation has become effective,
e. as a result of the merger, the constituent corporation or its successor corporation becomes or remains a direct or indirect wholly owned subsidiary of the holding company,
f. the directors of the constituent corporation become or remain the directors of the holding company upon the effective time of the merger,
g. the organizational documents of the surviving entity immediately following the effective time of the merger contain provisions identical to the certificate of incorporation of the constituent corporation immediately prior to the effective time of the merger, other than provisions, if any, regarding the incorporator or incorporators, the corporate or entity name, the registered office and agent, the initial board of directors and the initial subscribers for shares, references to members rather than shareholders or shareholders, references to interests, units or the like rather than stock or shares, references to managers, managing members or other members of the governing body rather than directors and such provisions contained in any amendment to the certificate of incorporation as were necessary to effect a change, exchange, reclassification, subdivision, combination or cancellation of stock, if such change, exchange, reclassification, subdivision, combination or cancellation has become effective; provided, however, that:
(1) if the organizational documents of the surviving entity do not contain the following provisions, they shall be amended in the merger to contain provisions requiring that:
(a) any act or transaction by or involving the surviving entity, other than the election or removal of directors or managers, managing members or other members of the governing body of the surviving entity, that requires for its adoption under this act or its organizational documents the approval of the shareholders or members of the surviving entity shall, by specific reference to this subsection, require, in addition, the approval of the shareholders of the holding company (or any successor by merger), by the same vote as is required by this act and/or by the organizational documents of the surviving entity; provided, however, that for purposes of this subdivision, any surviving entity that is not a corporation shall include in such amendment a requirement that the approval of the shareholders of the holding company be obtained for any act or transaction by or involving the surviving entity, other than the election or removal of directors or managers, managing members or other members of the governing body of the surviving entity, which would require the approval of the shareholders of the surviving entity if the surviving entity were a corporation subject to this act,
(b) any amendment of the organizational documents of a surviving entity that is not a corporation, which amendment would, if adopted by a corporation subject to this act, be required to be included in the certificate of incorporation of such corporation, shall, by specific reference to this subsection, require, in addition, the approval of the shareholders of the holding company, or any successor by merger, by the same vote as is required by this act and/or by the organizational documents of the surviving entity, and
(c) the business and affairs of a surviving entity that is not a corporation shall be managed by or under the direction of a board of directors, board of managers or other governing body consisting of individuals who are subject to the same fiduciary duties applicable to, and who are liable for breach of such duties to the same extent as, directors of a corporation subject to this act, and
(2) the organizational documents of the surviving entity may be amended in the merger to reduce the number of classes and shares of capital stock or other equity interests or units that the surviving entity is authorized to issue, and
h. the shareholders of the constituent corporation do not recognize gain or loss for federal income tax purposes as determined by the board of directors of the constituent corporation.
Neither division (1) of subparagraph g of paragraph 1 of this subsection nor any provision of a surviving entity's organizational documents required by division (1) of subparagraph g of paragraph 1 of this subsection shall be deemed or construed to require approval of the shareholders of the holding company to elect or remove directors or managers, managing members or other members of the governing body of the surviving entity.
2. As used in this subsection, the term "holding company" means a corporation which, from its incorporation until consummation of a merger governed by this subsection, was at all times a direct or indirect wholly owned subsidiary of the constituent corporation and whose capital stock is issued in a merger.
3. As used in this subsection, the term "organizational documents" means, when used in reference to a corporation, the certificate of incorporation of the corporation and, when used in reference to a limited liability company, the articles of organization and the operating agreement of the limited liability company.
4. From and after the effective time of a merger adopted by a constituent corporation by action of its board of directors and without any vote of shareholders pursuant to this subsection:
a. to the extent the restriction of Section 1090.3 of this title applied to the constituent corporation and its shareholders at the effective time of the merger, restrictions shall apply to the holding company and its shareholders immediately after the effective time of the merger as though it were the constituent corporation, and all shareholders of stock of the holding company acquired in the merger shall for purposes of Section 1090.3 of this title be deemed to have been acquired at the time that the shares of stock of the constituent corporation converted in the merger were acquired; provided, that any shareholder who immediately prior to the effective time of the merger was not an interested shareholder within the meaning of Section 1090.3 of this title shall not solely by reason of the merger become an interested shareholder of the holding company,
b. if the corporate name of the holding company immediately following the effective time of the merger is the same as the corporate name of the constituent corporation immediately prior to the effective time of the merger, the shares of capital stock of the holding company into which the shares of capital stock of the constituent corporation are converted in the merger shall be represented by the stock certificates that previously represented the shares of capital stock of the constituent corporation, and
c. to the extent a shareholder of the constituent corporation immediately prior to the merger had standing to institute or maintain derivative litigation on behalf of the constituent corporation, nothing in this section shall be deemed to limit or extinguish such standing.
5. If any agreement of merger is adopted by a constituent corporation by action of its board of directors and without any vote of shareholders pursuant to this subsection, the secretary or assistant secretary of the constituent corporation shall certify on the agreement that the agreement has been adopted pursuant to this subsection and that the conditions specified in paragraph 1 of this subsection have been satisfied. The agreement so adopted and certified shall then be filed and become effective in accordance with Section 1007 of this title. Filing shall constitute a representation by the person who executes the agreement that the facts stated in the certificate remain true immediately prior to the filing.
Added by Laws 1986, c. 292, § 81, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 14, eff. Nov. 1, 1988; Laws 1998, c. 422, § 15, eff. Nov. 1, 1998; Laws 1999, c. 421, § 13, eff. Nov. 1, 1999; Laws 2001, c. 405, § 21, eff. Nov. 1, 2001; Laws 2004, c. 255, § 20, eff. Nov. 1, 2004.
§18-1082. Merger or consolidation of domestic and foreign corporations; service of process upon surviving or resulting corporation.
MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS;
SERVICE OF PROCESS UPON SURVIVING OR RESULTING CORPORATION
A. Any one or more corporations of this state may merge or consolidate with one or more other corporations of any other state or states of the United States, or of the District of Columbia, if the laws of the other state or states or of the District permit a corporation of the jurisdiction to merge or consolidate with a corporation of another jurisdiction. The constituent corporations may merge into a single corporation, which may be any one of the constituent corporations, or they may consolidate into a new corporation formed by the consolidation, which may be a corporation of the state of incorporation of any one of the constituent corporations, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with the provisions of this section. In addition, any one or more corporations organized under the laws of any jurisdiction other than one of the United States may merge or consolidate with one or more corporations existing under the laws of this state if the surviving or resulting corporation will be a corporation of this state, and if the laws under which the other corporation or corporations are formed permit a corporation of that jurisdiction to merge or consolidate with a corporation of another jurisdiction.
B. All the constituent corporations shall enter into an agreement of merger or consolidation. The agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the same into effect;
3. The manner, if any, of converting the shares of each of the constituent corporations into shares or other securities of the corporation surviving or resulting from the merger or consolidation, or of canceling some or all of the shares, and, if any shares of any of the constituent corporations are not to remain outstanding, to be converted solely into shares or other securities of the surviving or resulting corporation or to be canceled, the cash, property, rights, or securities of any other corporation or entity which the holder of the shares are to receive in exchange for, or upon conversion of, the shares and the surrender of any certificates evidencing them, which cash, property, rights, or securities of any other corporation or entity may be in addition to or in lieu of the shares or other securities of the surviving or resulting corporation;
4. Other details or provisions as are deemed desirable, including, without limiting the generality of the foregoing, a provision for the payment of cash in lieu of the issuance or recognition of fractional shares of the surviving or resulting corporation or of any other corporation the securities of which are to be received in the merger or consolidation, or for some other arrangement with respect thereto consistent with the provisions of Section 1036 of this title; and
5. Other provisions or facts as shall be required to be set forth in the certificate of incorporation by the laws of the state which are stated in the agreement to be the laws that shall govern the surviving or resulting corporation and that can be stated in the case of a merger or consolidation. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of the agreement; provided, that the manner in which the facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation. The term "facts" as used in this paragraph, includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
C. The agreement shall be adopted, approved, executed, and acknowledged by each of the constituent corporations in accordance with the laws under which it is formed, and, in the case of an Oklahoma corporation, in the same manner as is provided for in Section 1081 of this title. The agreement shall be filed and shall become effective for all purposes of the laws of this state when and as provided for in Section 1081 of this title with respect to the merger or consolidation of corporations of this state. In lieu of filing the agreement of merger or consolidation, the surviving or resulting corporation may file a certificate of merger or consolidation executed in accordance with the provisions of Section 1007 of this title, which states:
1. The name and state of incorporation of each of the constituent corporations;
2. That an agreement of merger or consolidation has been approved, adopted, executed, and acknowledged by each of the constituent corporations in accordance with the provisions of this subsection;
3. The name of the surviving or resulting corporation;
4. In the case of a merger, the amendments or changes in the certificate of incorporation of the surviving corporation which are effected by the merger, or, if no amendments or changes are desired, a statement that the certificate of incorporation of the surviving corporation shall be its certificate of incorporation;
5. In the case of a consolidation, that the certificate of incorporation of the resulting corporation shall be as is set forth in an attachment to the certificate;
6. That the executed agreement of consolidation or merger is on file at the principal place of business of the surviving corporation, and the address thereof;
7. That a copy of the agreement of consolidation or merger will be furnished by the surviving corporation, on request and without cost, to any shareholder of any constituent corporation;
8. If the corporation surviving or resulting from the merger or consolidation is to be a corporation of this state, the authorized capital stock of each constituent corporation which is not a corporation of this state; and
9. The agreement, if any, required by the provisions of subsection D of this section. For purposes of Section 1085 of this title, the term "shareholder" in subsection D of this section shall be deemed to include "member".
D. If the corporation surviving or resulting from the merger or consolidation is to be governed by the laws of the District of Columbia or any state other than this state, it shall agree that it may be served with process in this state in any proceeding for enforcement of any obligation of any constituent corporation of this state, as well as for enforcement of any obligation of the surviving or resulting corporation arising from the merger or consolidation, including any suit or other proceeding to enforce the right of any shareholders as determined in appraisal proceedings pursuant to the provisions of Section 1091 of this title, and shall irrevocably appoint the Secretary of State as its agent to accept service of process in any suit or other proceedings and shall specify the address to which a copy of process shall be mailed by the Secretary of State. In the event of service upon the Secretary of State in accordance with the provisions of this subsection, the Secretary of State shall immediately notify the surviving or resulting corporation thereof by letter, certified mail, return receipt requested, directed to the surviving or resulting corporation at the address specified unless the surviving or resulting corporation shall have designated in writing to the Secretary of State a different address for this purpose, in which case it shall be mailed to the last address so designated. The notice shall include a copy of the process and any other papers served on the Secretary of State pursuant to the provisions of this subsection. It shall be the duty of the plaintiff in the event of such service to serve process and any other papers in duplicate, to notify the Secretary of State that service is being effected pursuant to the provisions of this subsection, and to pay the Secretary of State the fee provided for in paragraph 7 of Section 1142 of this title, which fee shall be taxed as part of the costs in the proceeding. The Secretary of State shall maintain an alphabetical record of any such service setting forth the name of the plaintiff and the defendant, the title, docket number, and nature of the proceeding in which process has been served upon the Secretary of State, the fact that service has been effected pursuant to the provisions of this subsection, the return date thereof, and the date service was made. The Secretary of State shall not be required to retain such information longer than five (5) years from receipt of the service of process by the Secretary of State.
E. The provisions of subsections C and D of Section 1081 of this title shall apply to any merger or consolidation pursuant to the provisions of this section. The provisions of subsection E of Section 1081 of this title shall apply to a merger pursuant to the provisions of this section in which the surviving corporation is a corporation of this state. The provisions of subsection F of Section 1081 of this title shall apply to any merger pursuant to the provisions of this section.
Added by Laws 1986, c. 292, § 82, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 6, operative Nov. 1, 1987; Laws 1988, c. 323, § 15, eff. Nov. 1, 1988; Laws 1998, c. 422, § 16, eff. Nov. 1, 1998; Laws 1999, c. 421, § 14, eff. Nov. 1, 1999; Laws 2004, c. 255, § 21, eff. Nov. 1, 2004.
§18-1083. Merger of parent corporation and subsidiary or subsidiaries.
MERGER OF PARENT CORPORATION AND SUBSIDIARY OR SUBSIDIARIES
A. In any case in which at least ninety percent (90%) of the outstanding shares of each class of stock of a corporation or corporations, other than a corporation which has in its certificate of incorporation the provision required by division (1) of subparagraph g of paragraph 1 of subsection G of Section 1081 of this title of which class there are outstanding shares that, absent this subsection, would be entitled to vote on such merger, is owned by another corporation and one of the corporations is a corporation of this state and the other or others are corporations of this state or of any other state or states or of the District of Columbia, and the laws of the other state or states or of the District of Columbia permit a corporation of that jurisdiction to merge with a corporation of another jurisdiction, the corporation having such stock ownership may either merge the other corporation or corporations into itself and assume all of its or their obligations, or merge itself, or itself and one or more of the other corporations, into one of the other corporations by executing, acknowledging, and filing, in accordance with the provisions of Section 1007 of this title, a certificate of ownership and merger setting forth a copy of the resolution of its board of directors to merge and the date of its adoption; provided, however, that in case the parent corporation shall not own all the outstanding stock of all the subsidiary corporations which are parties to the merger, the resolution of the board of directors of the parent corporation shall state the terms and conditions of the merger, including the securities, cash, property, or rights to be issued, paid, delivered, or granted by the surviving corporation upon surrender of each share of the subsidiary corporation or corporations not owned by the parent corporation or the cancellation of some or all of the shares. Any of the terms of the resolution of the board of directors to so merge may be made dependent upon facts ascertainable outside of such resolution, provided that the manner in which such facts shall operate upon the terms of the resolution is clearly and expressly set forth in the resolution. The term "facts", as used in the preceding sentence, includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation. If the parent corporation is not the surviving corporation, the resolution shall include provision for the pro rata issuance of stock of the surviving corporation to the holders of the stock of the parent corporation on surrender of any certificates therefor, and the certificate of ownership and merger shall state that the proposed merger has been approved by a majority of the outstanding stock of the parent corporation entitled to vote thereon at a meeting thereof duly called and held after twenty (20) days' notice of the purpose of the meeting is mailed to each shareholder at the shareholder's address as it appears on the records of the corporation if the parent corporation is a corporation of this state or state that the proposed merger has been adopted, approved, certified, executed, and acknowledged by the parent corporation in accordance with the laws under which it is organized if the parent corporation is not a corporation of this state. If the surviving corporation exists under the laws of the District of Columbia or any state other than this state, the provisions of subsection D of Section 1082 of this title shall also apply to a merger pursuant to the provisions of this section.
B. Subject to the provisions of paragraph 1 of subsection A of Section 1006 of this title, if the surviving corporation is an Oklahoma corporation, it may change its corporate name by the inclusion of a provision to that effect in the resolution of merger adopted by the directors of the parent corporation and set forth in the certificate of ownership and merger, and upon the effective date of the merger, the name of the corporation shall be changed.
C. The provisions of subsection D of Section 1081 of this title shall apply to a merger pursuant to the provisions of this section, and the provisions of subsection E of Section 1081 of this title shall apply to a merger pursuant to the provisions of this section in which the surviving corporation is the subsidiary corporation and is a corporation of this state. For purposes of this subsection, references to "agreement of merger" in subsections D and E of Section 1081 of this title shall mean the resolution of merger adopted by the board of directors of the parent corporation. Any merger which effects any changes other than those authorized by the provisions of this section or made applicable by this subsection shall be accomplished in accordance with the provisions of Section 1081 or 1082 of this title. The provisions of Section 1091 of this title shall not apply to any merger effected pursuant to the provisions of this section, except as provided for in subsection D of this section.
D. In the event all of the stock of a subsidiary Oklahoma corporation party to a merger effected pursuant to the provisions of this section is not owned by the parent corporation immediately prior to the merger, the shareholders of the subsidiary Oklahoma corporation party to the merger shall have appraisal rights as set forth in Section 1091 of this title.
E. A merger may be effected pursuant to the provisions of this section although one or more of the corporate parties to the merger is a corporation organized under the laws of a jurisdiction other than one of the United States; provided, that the laws of that jurisdiction permit a corporation of that jurisdiction to merge with a corporation of another jurisdiction.
Added by Laws 1986, c. 292, § 83, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 16, eff. Nov. 1, 1988; Laws 1998, c. 422, § 17, eff. Nov. 1, 1998; Laws 2001, c. 405, § 22, eff. Nov. 1, 2001; Laws 2004, c. 255, § 22, eff. Nov. 1, 2004.
§18-1084. Merger or consolidation of domestic nonstock, not for profit corporations.
MERGER OR CONSOLIDATION OF DOMESTIC NONSTOCK,
NOT FOR PROFIT CORPORATIONS
A. Any two or more nonstock corporations of this state, whether or not organized for profit, may merge into a single corporation, which may be any one of the constituent corporations, or they may consolidate into a new nonstock corporation, whether or not organized for profit, formed by the consolidation, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with the provisions of this section.
B. 1. The governing body of each corporation which desires to merge or consolidate shall adopt a resolution approving an agreement of merger or consolidation. The agreement shall state:
a. the terms and conditions of the merger or consolidation,
b. the mode of carrying the same into effect,
c. other provisions or facts required or permitted by this act to be stated in a certificate of incorporation for nonstock corporations as can be stated in the case of a merger or consolidation, stated in an altered form as the circumstances of the case require,
d. the manner, if any, of converting the memberships of each of the constituent corporations into memberships of the corporation surviving or resulting from the merger or consolidation, or of canceling some or all of the memberships, and
e. other details or provisions as are deemed desirable.
2. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of the agreement; provided, that the manner in which the facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation. The term "facts" as used in this paragraph, includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
C. The agreement shall be submitted to the members of each constituent corporation who have the right to vote for the election of the members of the governing body of their corporation, at an annual or special meeting for the purpose of acting on the agreement. Notice of the time, place, and purpose of the meeting shall be mailed to each member of each corporation who has the right to vote for the election of the members of the governing body of the corporation, at the member's address as it appears on the records of the corporation at least twenty (20) days prior to the date of the meeting. The notice shall contain a copy of the agreement or a brief summary thereof, as the governing body shall deem advisable. At the meeting, the agreement shall be considered and a vote by ballot, in person or by proxy, taken for the adoption or rejection of the agreement. If a majority of the voting power of voting members of each corporation shall be for the adoption of the agreement, that fact shall be certified on the agreement by the officer performing the duties ordinarily performed by the secretary or assistant secretary of a corporation. The agreement shall be executed, acknowledged and filed, and shall become effective, in accordance with the provisions of Section 1007 of this title. The provisions of paragraphs 1 through 6 of subsection C of Section 1081 of this title shall apply to a merger or consolidation under this section.
D. If, under the provisions of the certificate of incorporation of any one or more of the constituent corporations, there shall be no members who have the right to vote for the election of the members of the governing body of the corporation other than the members of that body themselves, the agreement duly entered into as provided for in subsection B of this section shall be submitted to the members of the governing body of the corporation or corporations at a meeting thereof. Notice of the meeting shall be mailed to the members of the governing body in the same manner as is provided in the case of a meeting of the members of a corporation. If at the meeting two-thirds (2/3) of the total number of members of the governing body shall vote by ballot, in person, for the adoption of the agreement, that fact shall be certified on the agreement in the same manner as is provided in the case of the adoption of the agreement by the vote of the members of a corporation and thereafter the same procedure shall be followed to consummate the merger or consolidation.
E. The provisions of subsection E of Section 1081 of this title shall apply to a merger pursuant to the provisions of this section.
F. Nothing in this section shall be construed to authorize the merger of a charitable nonstock corporation into a nonstock corporation if the charitable nonstock corporation would thereby have its charitable status lost or impaired; but a nonstock corporation may be merged into a charitable nonstock corporation which shall continue as the surviving corporation.
Added by Laws 1986, c. 292, § 84, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 17, eff. Nov. 1, 1988; Laws 1998, c. 422, § 18, eff. Nov. 1, 1998; Laws 2001, c. 405, § 23, eff. Nov. 1, 2001; Laws 2004, c. 255, § 23, eff. Nov. 1, 2004.
§18-1085. Merger or Consolidation of Domestic and Foreign Nonstock, Not for Profit Corporations - Service of Process Upon Surviving or Resulting Corporation.
MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN NONSTOCK,
NOT FOR PROFIT CORPORATIONS; SERVICE OF PROCESS UPON
SURVIVING OR RESULTING CORPORATION
A. Any one or more nonstock, not for profit corporations of this state may merge or consolidate with one or more other nonstock, not for profit corporations of any other state or states of the United States or of the District of Columbia, if the laws of such other state or states or of the District of Columbia permit a corporation of such jurisdiction to merge with a corporation of another jurisdiction. The constituent corporations may merge into a single corporation, which may be any one of the constituent corporations, or they may consolidate into a new nonstock, not for profit corporation formed by the consolidation, which may be a corporation of the state of incorporation of any one of the constituent corporations, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with the provisions of this section. In addition, any one or more nonstock, not for profit corporations organized under the laws of any jurisdiction other than one of the United States may merge or consolidate with one or more nonstock, not for profit corporations of this state if the surviving or resulting corporation will be a corporation of this state, and if the laws under which the other corporation or corporations are formed permit a corporation of such jurisdiction to merge with a corporation of another jurisdiction.
B. 1. All the constituent corporations shall enter into an agreement of merger or consolidation. The agreement shall state:
a. the terms and conditions of the merger or consolidation,
b. the mode of carrying the same into effect,
c. the manner, if any, of converting the memberships of each of the constituent corporations into members of the corporation surviving or resulting from such merger or consolidation, or of canceling some or all of the memberships,
d. such other details and provisions as shall be deemed desirable, and
e. such other provisions or facts as shall then be required to be stated in a certificate of incorporation by the laws of the state which are stated in the agreement to be the laws that shall govern the surviving or resulting corporation and that can be stated in the case of a merger or consolidation.
2. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement, provided that the manner in which such facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation.
C. The agreement shall be adopted, approved, certified, executed and acknowledged by each of the constituent corporations in accordance with the laws under which it is formed and, in the case of an Oklahoma corporation, in the same manner as is provided for in Section 1084 of this title. The agreement shall be filed and shall become effective for all purposes of the laws of this state when and as provided for in Section 1084 of this title with respect to the merger of nonstock, not for profit corporations of this state. Insofar as they may be applicable, the provisions of paragraphs 1 through 9 of subsection C of Section 1082 of this title shall apply to a merger under this section.
D. If the corporation surviving or resulting from the merger or consolidation is to be governed by the laws of any state other than this state, it shall agree that it may be served with process in this state in any proceeding for enforcement of any obligation of any constituent corporation of this state, as well as for enforcement of any obligation of the surviving or resulting corporation arising from the merger or consolidation and shall irrevocably appoint the Secretary of State as its agent to accept service of process in any suit or other proceedings and shall specify the address to which a copy of such process shall be mailed by the Secretary of State. In the event of such service upon the Secretary of State in accordance with the provisions of this subsection, the Secretary of State shall immediately notify such surviving or resulting corporation thereof by letter, certified mail, return receipt requested, directed to such corporation at its address so specified, unless such surviving or resulting corporation shall have designated in writing to the Secretary of State a different address for such purpose, in which case it shall be mailed to the last address so designated. Such letter shall enclose a copy of the process and any other papers served upon the Secretary of State. It shall be the duty of the plaintiff in the event of such service to serve process and any other papers in duplicate, to notify the Secretary of State that service is being made pursuant to the provisions of this subsection, and to pay the Secretary of State the fee prescribed by paragraph 7 of Section 1142 of this title, which fee shall be taxed as part of the costs in the proceeding if the plaintiff shall prevail therein. The Secretary of State shall maintain an alphabetical record of any such service setting forth the name of the plaintiff and defendant, the title, docket number and nature of the proceeding in which process has been served upon him, the fact that service has been effected pursuant to the provisions of this subsection, the return date thereof, and the date when the service was made. The Secretary of State shall not be required to retain such information for a period longer than five (5) years from his receipt of service of process.
E. The provisions of subsection E of Section 1081 of this title shall apply to a merger pursuant to the provisions of this section if the corporation surviving the merger is a corporation of this state.
Added by Laws 1986, c. 292, § 85, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 24, eff. Nov. 1, 2004.
§18-1086. Merger or Consolidation of Domestic Stock and Nonstock Corporations.
MERGER OR CONSOLIDATION OF DOMESTIC STOCK AND
NONSTOCK CORPORATIONS
A. Any one or more nonstock corporations of this state, whether or not organized for profit, may merge or consolidate with one or more stock corporations of this state, whether or not organized for profit. The constituent corporations may merge into a single corporation, which may be any one of the constituent corporations, or they may consolidate into a new corporation formed by the consolidation, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with the provisions of this section. The surviving constituent corporation or a new corporation may be organized for profit or not organized for profit and may be a stock corporation or a nonstock corporation.
B. The board of directors of each stock corporation which desires to merge or consolidate and the governing body of each nonstock corporation which desires to merge or consolidate shall adopt a resolution approving an agreement of merger or consolidation. The agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode carrying the same into effect;
3. Such other provisions or facts required or permitted by this act to be stated in the certificate of incorporation as can be stated in the case of a merger or consolidation, stated in such altered form as the circumstances of the case require;
4. The manner, if any, of converting the shares of stock of a stock corporation and the interests of the members of nonstock corporation into shares or other securities of a stock corporation or membership interests of a nonstock corporation surviving or resulting from such merger or consolidation, or of canceling some or all of the shares or interests, and if any shares of any such stock corporation or membership interests of any such nonstock corporation are not to remain outstanding, to be converted solely into shares or other securities of the stock corporation or membership interests of the nonstock corporation surviving or resulting from such merger or consolidation, or to be canceled, the cash, property, rights or securities of any other corporation or entity which the holders of shares of any such stock corporation or membership interests of any such nonstock corporation are to receive in exchange for, or upon conversion of such shares or membership interests, and the surrender of any certificates evidencing them, which cash, property, rights or securities of any other corporation or entity may be in addition to or in lieu of shares or other securities of any stock corporation or membership interests of any nonstock corporation surviving or resulting from such merger or consolidation; and
5. Such other details or provisions as are deemed desirable.
C. In a merger or consolidation provided for in this section, the interests of members of a constituent nonstock corporation may be treated in various ways so as to convert such interests into interests of value, other than shares of stock, in the surviving or resulting stock corporation or into shares of stock in the surviving or resulting stock corporation, voting or nonvoting, or into creditor interests or any other interests of value equivalent to their membership interests in their nonstock corporation. The voting rights of members of a constituent nonstock corporation need not be considered an element of value in measuring the reasonable equivalence of the value of the interests received in the surviving or resulting stock corporation by members of a constituent nonstock corporation, nor need the voting rights of shares of stock in a constituent stock corporation be considered as an element of value in measuring the reasonable equivalence of the value of the interests in the surviving or resulting nonstock corporations received by shareholders of a constituent stock corporation, and the voting or nonvoting shares of a stock corporation may be converted into voting or nonvoting regular, life, general, special or other type of membership, however designated, creditor interests or participating interests, in the nonstock corporation surviving or resulting from such merger or consolidation of a stock corporation and a nonstock corporation. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement, provided that the manner in which such facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation.
D. The agreement, required by subsection B of this section in the case of each constituent stock corporation, shall be adopted, approved, certified, executed and acknowledged by each constituent corporation in the same manner as is provided for in Section 1081 of this title and, in the case of each constituent nonstock corporation, shall be adopted, approved, certified, executed and acknowledged by each of said constituent corporations in the same manner as is provided for in Section 1084 of this title. The agreement shall be filed and shall become effective for all purposes of the laws of this state when and as provided for in Section 1081 of this title with respect to the merger of stock corporations of this state. Insofar as they may be applicable, the provisions of paragraphs 1 through 7 of subsection C of Section 1081 of this title shall apply to a merger under this section.
E. The provisions of subsection E of Section 1081 of this title shall apply to a merger pursuant to the provisions of this section, if the surviving corporation is a corporation of this state. The provisions of subsections C and D of Section 1081 of this title shall apply to any constituent stock corporation participating in a merger or consolidation pursuant to the provisions of this section. The provisions of subsection F of Section 1081 of this title shall apply to any constituent stock corporation participating in a merger pursuant to the provisions of this section.
F. Nothing in this section shall be construed to authorize the merger of a charitable nonstock corporation into a stock corporation, if the charitable status of such nonstock corporation would thereby be lost or impaired; but a stock corporation may be merged into a charitable nonstock corporation which shall continue as the surviving corporation.
Added by Laws 1986, c. 292, § 86, eff. Nov. 1, 1986. Amended by Laws 1990, c. 328, § 4, eff. Sept. 1, 1990; Laws 1999, c. 421, § 15, eff. Nov. 1, 1999; Laws 2004, c. 255, § 25, eff. Nov. 1, 2004.
§181087. Merger or Consolidation of Domestic and Foreign Stock and Nonstock Corporations.
MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN STOCK
AND NONSTOCK CORPORATIONS
A. Any one or more corporations of this state, whether stock or nonstock corporations and whether or not organized for profit, may merge or consolidate with one or more other corporations of any other state or states of the United States or of the District of Columbia, whether stock or nonstock corporations and whether or not organized for profit, if the laws under which the other corporation or corporations are formed shall permit a corporation of such jurisdiction to merge with a corporation of another jurisdiction. The constituent corporations may merge into a single corporation, which may be any one of the constituent corporations, or they may consolidate into a new corporation formed by the consolidation, which may be a corporation of the place of incorporation of any one of the constituent corporations, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with the provisions of this section. The surviving or new corporation may be either a stock corporation or a membership corporation, as shall be specified in the agreement of merger required by the provisions of subsection B of this section.
B. The method and procedure to be followed by the constituent corporations so merging or consolidating shall be as prescribed in Section 86 of this act in the case of Oklahoma corporations. The agreement of merger or consolidation shall also set forth such other matters or provisions as shall then be required to be set forth in certificates of incorporation by the laws of the state which are stated in the agreement to be the laws which shall govern the surviving or resulting corporation and that can be stated in the case of a merger or consolidation. The agreement, in the case of foreign corporations, shall be adopted, approved, executed and acknowledged by each of the constituent foreign corporations in accordance with the laws under which each is formed.
C. The requirements of the provisions of subsection D of Section 82 of this act as to the appointment of the Secretary of State to receive process and the manner of serving the same in the event the surviving or new corporation is to be governed by the laws of any other state shall also apply to mergers or consolidations effected pursuant to the provisions of this section. The provisions of subsection E of Section 81 of this act shall apply to mergers effected pursuant to the provisions of this section if the surviving corporation is a corporation of this state. The provisions of subsection D of Section 81 of this act shall apply to any constituent stock corporation participating in a merger of consolidation pursuant to the provisions of this section. The provisions of subsection F of Section 81 of this act shall apply to any constituent stock corporation participating in a merger pursuant to the provisions of this section.
D. Nothing in this section shall be construed to authorize the merger of a charitable nonstock corporation into a stock corporation, if the charitable status of such nonstock corporation would thereby be lost or impaired but a stock corporation may be merged into a charitable nonstock corporation which shall continue as the surviving corporation.
Added by Laws 1986, c. 292, § 87, eff. Nov. 1, 1986.
§181088. Status, Rights, Liabilities, etc. of Constituent and Surviving or Resulting Corporations Following Merger or Consolidation.
STATUS, RIGHTS, LIABILITIES, ETC. OF CONSTITUENT AND SURVIVING
OR RESULTING CORPORATIONS FOLLOWING MERGER OR CONSOLIDATION
When any merger or consolidation shall have become effective pursuant to the provisions of the Oklahoma General Corporation Act, for all purposes of the laws of this state the separate existence of all the constituent corporations, or of all such constituent corporations except the one into which the other or others of such constituent corporations have been merged, as the case may be, shall cease and the constituent corporations shall become a new corporation, or be merged into one of such corporations, as the case may be, possessing all the rights, privileges, powers and franchises as well of public as of a private nature, and being subject to all the restrictions, disabilities and duties of each of such corporations so merged or consolidated; and all and singular, the rights, privileges, powers and franchises of each of said corporations, and all property, real, personal and mixed, and all debts due to any of said constituent corporations on whatever account, as well for stock subscriptions as all other things in action or belonging to each of such corporations shall be vested in the corporation surviving or resulting from such merger or consolidation; and all property, rights, privileges, powers and franchises, and all and every other interest shall be thereafter as effectually the property of the surviving or resulting corporation as they were of the several and respective constituent corporations, and the title to any real estate vested by deed or otherwise, under the laws of this state, in any of such constituent corporations, shall not revert or be in any way impaired by reason of the provisions of the Oklahoma General Corporation Act; but all rights of creditors and all liens upon any property of any of said constituent corporations shall be preserved unimpaired, and all debts, liabilities and duties of the respective constituent corporations, from that time forward, shall attach to said surviving or resulting corporation, and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it.
Added by Laws 1986, c. 292, § 88, eff. Nov. 1, 1986.
§181089. Powers of Corporation Surviving or Resulting from Merger or Consolidation Issuance of Stock, Bonds or Other Indebtedness.
POWERS OF CORPORATION SURVIVING OR RESULTING FROM MERGER
OR CONSOLIDATION; ISSUANCE OF STOCK, BONDS OR OTHER INDEBTEDNESS
When two or more corporations are merged or consolidated, the corporation surviving or resulting from the merger may issue bonds or other obligations, negotiable or otherwise, and with or without coupons or interest certificates thereto attached, to an amount sufficient with its capital stock to provide for all payments it will be required to make, or obligations it will be required to assume, in order to effect the merger or consolidation. For the purpose of securing the payment of any such bonds and obligations, it shall be lawful for the surviving or resulting corporation to mortgage its corporate franchise, rights, privileges and property, real, personal or mixed. The surviving or resulting corporation may issue certificates of its capital stock or uncertificated stock if authorized to do so and other securities to the shareholders of the constituent corporations in exchange or payment for the original shares, in such amount as shall be necessary in accordance with the terms of the agreement of merger or consolidation in order to effect such merger or consolidation in the manner and on the terms specified in the agreement.
Added by Laws 1986, c. 292, § 89, eff. Nov. 1, 1986.
§181090. Effect of Merger Upon Pending Actions.
EFFECT OF MERGER UPON PENDING ACTIONS
Any action or proceeding, whether civil, criminal or administrative, pending by or against any corporation which is a party to a merger or consolidation shall be prosecuted as if such merger or consolidation had not taken place, or the corporation surviving or resulting from such merger or consolidation may be substituted in such action or proceeding.
Added by Laws 1986, c. 292, § 90, eff. Nov. 1, 1986.
§181090.1. Share acquisitions.
SHARE ACQUISITIONS
A. One or more corporations may acquire all or part of the outstanding shares of one or more other corporations, if the board of directors of each corporation adopts and its shareholders approve, if required by subsection C of this section, the agreement of acquisition.
B. The agreement of acquisition shall set forth:
1. the name or names of the corporation or corporations whose shares will be acquired and the name or names of the acquiring corporation or corporations;
2. the terms and conditions of the acquisitions;
3. the manner and basis of exchanging the shares to be acquired for the consideration proffered;
4. any amendments or changes in the certificate of incorporation of a corporation which is a party to the agreement; and
5. such other provisions as the directors shall deem advisable.
C. After adopting an agreement of acquisition, the board of directors of each corporation whose shares are to be acquired, in whole or in part, or whose certificate of incorporation is to be amended, shall submit the agreement of acquisition for approval by the shareholders entitled to vote thereon. Due notice of the meeting shall be mailed to each holder of stock, whether voting or nonvoting, of the corporation at his address as it appears on the records of the corporation, at least twenty (20) days prior to the meeting. The notice shall contain a copy of the agreement or a brief summary thereof, as the directors shall deem advisable. At the meeting, the agreement shall be considered and a vote taken for its adoption or rejection. If a majority of the outstanding stock of the corporation entitled to vote thereon shall be voted for the adoption of the agreement, that fact shall be certified on the agreement by the secretary or assistant secretary of the corporation. If the agreement shall be adopted and approved in accordance with the provisions of this section, it shall then be filed and shall become effective in accordance with the provisions of Section 1007 of this title. In lieu of filing an agreement of acquisition required by this section, the acquiring corporation may file a certificate of acquisition, executed in accordance with the provisions of Section 1007 of this title, which states:
1. the name and jurisdiction of incorporation of each corporation which is a party to the agreement;
2. that the agreement of acquisition has been adopted, approved, certified, executed, and acknowledged in accordance with the provisions of this section;
3. whether the corporation is an acquiring corporation or a corporation whose shares are to be acquired;
4. the amendments or changes, if any, in the certificate of incorporation that are to be effected by the agreement of acquisition;
5. that the executed agreement of acquisition is on file at the principal place of business of each corporation, stating the address thereof; and
6. that a copy of the agreement of acquisition will be furnished by each corporation, on request and without cost, to any of its shareholders.
D. Any agreement of acquisition may contain a provision that at any time prior to the filing of the agreement with the Secretary of State, the agreement may be terminated by the board of directors of any affected corporation notwithstanding approval of the agreement by the shareholders of one or more of the affected corporations. Any agreement of acquisition may contain a provision that the board of directors of the affected corporations may amend the agreement at any time prior to the filing of the agreement, or a certificate in lieu thereof, with the Secretary of State, provided that an amendment made subsequent to the adoption of the agreement by the shareholders of any affected corporation shall not:
a. alter or change the amount or kind of consideration to be received in exchange for or on conversion of all or part of the shares to be acquired;
b. alter or change any term of the certificate of incorporation of the affected corporations; or
c. alter or change any of the terms and consideration of the agreement if such alteration or change would adversely affect the holders of any class or series of a corporation whose shares are to be acquired.
E. The holders of the outstanding shares of a class shall be entitled to vote as a class upon an agreement of acquisition, whether or not entitled to vote thereon by the provisions of the certificate of incorporation, if the agreement provides for the acquisition of all or part of the shares of the class.
F. This section shall not limit the power of a corporation to acquire all or part of the shares of one or more classes or series of another corporation through a voluntary exchange or otherwise.
G. Any shareholder whose shares are to be acquired pursuant to an agreement of acquisition adopted and approved in accordance with this section and who has complied with the procedural steps specified in subsection D of Section 1091 of this title for mergers and consolidations and who has neither voted in favor of the share acquisition nor consented thereto in writing shall be entitled to an appraisal by the district court of the fair value of his shares in compliance with the same provisions and procedures and with the same rights and limitations as set out in subsections E through K of Section 1091 of this title.
H. If the entity acquiring shares pursuant to this section is governed by the laws of the District of Columbia or any state other than this state, the entity shall agree that it may be served with process in this state in any proceeding for enforcement of any obligation of the acquiring corporation arising from the share acquisition, including any suit or other proceeding to enforce the right of any shareholders as determined in appraisal proceedings pursuant to the provisions of Section 1091 of this title, and shall irrevocably appoint the Secretary of State as its agent to accept service of process in any such suit or other proceedings and shall specify the address to which a copy of such process shall be mailed by the Secretary of State. In the event of such service upon the Secretary of State in accordance with this subsection, the Secretary of State shall forthwith notify such acquiring corporation thereof by letter sent by certified mail, with return receipt requested, directed to such acquiring corporation at its address so specified, unless such acquiring corporation shall have designated in writing to the Secretary of State a different address for such purpose, in which case it shall be mailed to the last address so designated. Such letter shall enclose a copy of the process and any other papers served on the Secretary of State pursuant to this subsection. It shall be the duty of the plaintiff in the event of such service to serve process and any other papers in duplicate, to notify the Secretary of State that service is being effected pursuant to this subsection and to pay the Secretary of State the fee provided for in paragraph 7 of Section 1142 of this title, which fee shall be taxed as part of the costs in the proceeding, if the plaintiff shall prevail therein. The Secretary of State shall maintain an alphabetical record of any such service setting forth the name of the plaintiff and the defendant, the title, docket number and nature of the proceeding in which process has been served upon the Secretary of State, the fact that service has been served upon the Secretary of State, the fact that service has been effected pursuant to this subsection, the return date thereof, and the date service was made. The Secretary of State shall not be required to retain such information longer than five (5) years from receipt of the service of process by the Secretary of State.
Added by Laws 1988, c. 323, § 18, eff. Nov. 1, 1988. Amended by Laws 1990, c. 328, § 5, eff. Sept. 1, 1990.
§18-1090.2. Merger or consolidation of domestic corporation and business entity.
ERGER OR CONSOLIDATION OF
DOMESTIC CORPORATION AND BUSINESS ENTITY
A. Any one or more corporations of this state may merge or consolidate with one or more business entities, of this state or of any other state or states of the United States, or of the District of Columbia, unless the laws of the other state or states or the District of Columbia forbid the merger or consolidation. A corporation or corporations and one or more business entities may merge with or into a corporation, which may be any one of the corporations, or they may merge with or into a business entity, which may be any one of the business entities, or they may consolidate into a new corporation or business entity formed by the consolidation, which shall be a corporation or business entity of this state or any other state of the United States, or the District of Columbia, which permits the merger or consolidation, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with this section. In addition, any one or more business entities formed under the laws of any jurisdiction other than one of the United States may merge or consolidate with one or more corporations existing under the laws of this state if the surviving or resulting corporation will be a corporation of this state and the laws under which the business entity or entities are formed permit a business entity of such jurisdiction to merge or consolidate with a corporation of another jurisdiction. As used in this section, "business entity" means a domestic or foreign partnership whether general or limited, limited liability company, business trust, common law trust, or other unincorporated business.
B. Each corporation and business entity merging or consolidating shall enter into a written agreement of merger or consolidation. The agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the consolidation into effect;
3. The manner, if any, of converting the shares of stock of each such corporation and the ownership interests of each business entity into shares, ownership interests, or other securities of the entity surviving or resulting from the merger or consolidation, or of canceling some or all of the shares or interests, and if any shares of any corporation or any ownership interests of any business entity are not to remain outstanding, to be converted solely into shares, ownership interests, or other securities of the entity surviving or resulting from the merger or consolidation or to be canceled, the cash, property, rights, or securities of any other rights or securities of any other corporation or entity which the holders of such shares or ownership interests are to receive in exchange for, or upon conversion of, the shares or ownership interests and the surrender of any certificates evidencing them, which cash, property, rights, or securities of any other corporation or entity may be in addition to or in lieu of shares, ownership interests or other securities of the entity surviving or resulting from the merger or consolidation; and
4. Other details or provisions as are deemed desirable including, but not limited to, a provision for the payment of cash in lieu of the issuance of fractional shares or interests of the surviving or resulting corporation or business entity. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of the agreement; provided, that the manner in which such facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation. The term "facts" as used in this paragraph, includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
C. The agreement required by subsection B of this section shall be adopted, approved, certified, executed, and acknowledged by each of the corporations in the same manner as is provided in Section 1081 of this title and, in the case of the business entities, in accordance with their constituent agreements and in accordance with the laws of the jurisdiction under which they are formed, as the case may be; provided that no holder of securities or an interest in a constituent entity who has not voted for or consented to the merger or consolidation shall be required to accept an interest in the surviving or resulting business entity if acceptance would expose the holder to personal liability for the debts of the surviving business entity. The agreement shall be filed and recorded and shall become effective for all purposes of the laws of this state when and as provided in Section 1081 of this title with respect to the merger or consolidation of corporations of this state. In lieu of filing and recording the agreement of merger or consolidation, the surviving or resulting corporation or business entity may file a certificate of merger or consolidation, executed in accordance with Section 1007 of this title if the surviving or resulting entity is a corporation, or by a person authorized to act for the business entity, if the surviving or resulting entity is a business entity, which states:
1. The name and jurisdiction of formation of each of the constituent entities;
2. That an agreement of merger or consolidation has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities in accordance with this subsection;
3. The name of the surviving or resulting corporation or business entity;
4. In the case of a merger in which a corporation is the surviving entity, any amendments or changes in the certificate of incorporation of the surviving corporation as are desired to be effected by the merger, or, if no amendments or changes are desired, a statement that the certificate of incorporation of the surviving corporation shall be its certificate of incorporation;
5. In the case of a consolidation in which a corporation is the resulting entity, that the certificate of incorporation of the resulting corporation shall be as set forth in an attachment to the certificate;
6. In the case of a consolidation in which a business entity other than a corporation is the resulting entity, that the charter of the resulting entity shall be as set forth in an attachment to the certificate;
7. That the executed agreement of consolidation or merger is on file at the principal place of business of the surviving corporation or business entity and the address thereof;
8. That a copy of the agreement of consolidation or merger shall be furnished by the surviving or resulting entity, on request and without cost, to any shareholder of any constituent corporation or any partner of any constituent business entity; and
9. The agreement, if any, required by subsection D of this section.
D. If the entity surviving or resulting from the merger or consolidation is to be governed by the laws of the District of Columbia or any state other than this state, the entity shall agree that it may be served with process in this state in any proceeding for enforcement of any obligation of any constituent corporation or business entity of this state, as well as for enforcement of any obligation of the surviving or resulting corporation or business entity arising from the merger or consolidation, including any suit or other proceeding to enforce the right of any shareholders as determined in appraisal proceedings pursuant to the provisions of Section 1091 of this title, and shall irrevocably appoint the Secretary of State as its agent to accept service of process in any such suit or other proceedings and shall specify the address to which a copy of any process shall be mailed by the Secretary of State. In the event of service upon the Secretary of State pursuant to this subsection, the Secretary of State shall forthwith notify the surviving or resulting corporation or business entity by a letter, sent by certified mail with return receipt requested, directed to the surviving or resulting corporation or business entity at its specified address, unless the surviving or resulting corporation or business entity shall have designated in writing to the Secretary of State a different address for that purpose, in which case it shall be mailed to the last address designated. Such letter shall enclose a copy of the process and any other papers served on the Secretary of State pursuant to this subsection. It shall be the duty of the plaintiff in the event of any service to serve process and any other papers in duplicate, to notify the Secretary of State that service is being effected pursuant to this subsection and to pay the Secretary of State the fee provided for in paragraph 7 of subsection A of Section 1142 of this title, which fee shall be taxed as part of the costs in the proceeding, if the plaintiff shall prevail therein. The Secretary of State shall maintain an alphabetical record of any such service, setting forth the name of the plaintiff and the defendant, the title, docket number, and nature of the proceeding in which process has been served upon the Secretary of State, the fact that service has been served upon the Secretary of State, the fact that service has been effected pursuant to this subsection, the return date thereof, and the date service was made. The Secretary of State shall not be required to retain this information longer than five (5) years from the date of receipt of the service of process by the Secretary of State.
E. Subsections C, D, E, F and G of Section 1081 of this title and Sections 1088 through 1090 and 1127 of this title, insofar as they are applicable, shall apply to mergers or consolidations between corporations and business entities.
Added by Laws 1990, c. 328, § 12, eff. Sept. 1, 1990. Amended by Laws 1998, c. 422, § 19, eff. Nov. 1, 1998; Laws 1999, c. 421, § 16, eff. Nov. 1, 1999; Laws 2001, c. 405, § 24, eff. Nov. 1, 2001; Laws 2004, c. 255, § 26, eff. Nov. 1, 2004.
§18-1090.3. Business combinations with interested shareholders.
USINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
A. Notwithstanding any other provisions of this title, a corporation shall not engage in any business combination with any interested shareholder for a period of three (3) years following the time that the person became an interested shareholder, unless:
1. Prior to that time, the board of directors of the corporation approved either the business combination or the transaction which resulted in the person becoming an interested shareholder;
2. Upon consummation of the transaction which resulted in the person becoming an interested shareholder, the interested shareholder owned at least eighty-five percent (85%) of the outstanding voting stock of the corporation at the time the transaction commenced, excluding for purposes of determining the outstanding voting stock, but not the outstanding voting stock owned by the interested shareholder, those shares owned by:
a. persons who are directors and also officers, and
b. employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
3. At or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least two-thirds (2/3) of the outstanding voting stock which is not owned by the interested shareholder.
B. The restrictions contained in this section shall not apply if:
1. The corporation's original certificate of incorporation contains a provision expressly electing not to be governed by this section;
2. The corporation, by action of its board of directors, adopted an amendment to its bylaws by November 30, 1991, expressly electing not to be governed by this section, which amendment shall not be further amended by the board of directors;
3. a. The corporation, with the approval of its shareholders, adopts an amendment to its certificate of incorporation or bylaws expressly electing not to be governed by this section; provided that, in addition to any other vote required by law, an amendment to the certificate of incorporation or bylaws must be approved by the affirmative vote of a majority of the outstanding voting stock of the corporation.
b. An amendment adopted pursuant to this paragraph shall be effective immediately in the case of a corporation that both:
(1) has never had a class of voting stock that falls within any of the three categories set out in paragraph 4 of this subsection, and
(2) has not elected by a provision in its original certificate of incorporation or any amendment thereto to be governed by this section.
c. In all other cases, an amendment adopted pursuant to this paragraph shall not be effective until twelve (12) months after the adoption of the amendment and shall not apply to any business combination between a corporation and any person who became an interested shareholder of the corporation on or prior to the adoption. A bylaw amendment adopted pursuant to this paragraph shall not be further amended by the board of directors;
4. The corporation does not have a class of voting stock that is:
a. listed on a national securities exchange,
b. authorized for quotation on the NASDAQ Stock Market, or
c. held of record by one thousand or more shareholders, unless any of the foregoing results from action taken, directly or indirectly, by an interested shareholder or from a transaction in which a person becomes an interested shareholder;
5. A person becomes an interested shareholder inadvertently and:
a. as soon as practicable divests itself of ownership of sufficient shares so that the person ceases to be an interested shareholder, and
b. would not, at any time within the three-year period immediately prior to a business combination between the corporation and the person, have been an interested shareholder but for the inadvertent acquisition;
6. a. The business combination is proposed prior to the consummation or abandonment of, and subsequent to the earlier of the public announcement or the notice required hereunder of, a proposed transaction which:
(1) constitutes one of the transactions described in subparagraph b of this paragraph,
(2) is with or by a person who:
(a) was not an interested shareholder during the previous three (3) years, or
(b) became an interested shareholder with the approval of the corporation's board of directors or during the period described in paragraph 7 of this subsection, and
(3) is approved or not opposed by a majority of the members of the board of directors then in office, but not less than one, who were directors prior to any person becoming an interested shareholder during the previous three (3) years or were recommended for election or elected to succeed the directors by a majority of the directors.
b. The proposed transactions referred to in subparagraph a of this paragraph are limited to:
(1) a share acquisition pursuant to Section 1090.1 of this title, or a merger or consolidation of the corporation, except for a merger in respect of which, pursuant to subsection F or G of Section 1081 of this title, no vote of the shareholders of the corporation is required,
(2) a sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, whether as part of a dissolution or otherwise, of assets of the corporation or of any direct or indirect majority-owned subsidiary of the corporation, other than to any direct or indirect wholly owned subsidiary or to the corporation, having an aggregate market value equal to fifty percent (50%) or more of either the aggregate market value of all of the assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the corporation, or
(3) a proposed tender or exchange offer for outstanding stock of the corporation which represents fifty percent (50%) or more of the outstanding voting stock of the corporation. The corporation shall give not less than twenty (20) days' notice to all interested shareholders prior to the consummation of any of the transactions described in divisions (1) or (2) of this subparagraph; or
7. The business combination is with an interested shareholder who became an interested shareholder at a time when the restriction contained in this section did not apply by reason of any of paragraphs 1 through 4 of this subsection; provided, however, that this paragraph shall not apply if, at the time the interested shareholder became an interested shareholder, the corporation's certificate of incorporation contained a provision authorized by subsection C of this section.
C. Notwithstanding paragraphs 1, 2, 3, and 4 of subsection B of this section, a corporation may elect by a provision of its original certificate of incorporation or any amendment thereto to be governed by this section; provided, that any amendment to the certificate of incorporation shall not apply to restrict a business combination between the corporation and an interested shareholder of the corporation if the interested shareholder became an interested shareholder prior to the effective date of the amendment.
D. As used in this section:
1. "Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person;
2. "Associate", when used to indicate a relationship with any person, means:
a. any corporation, partnership, unincorporated association, or other entity of which the person is a director, officer, or partner or is the owner of twenty percent (20%) or more of any class of voting stock ,
b. any trust or other estate in which the person has at least a twenty-percent beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and
c. any relative or spouse of the person, or any relative of the spouse, who has the same residence as the person;
3. "Business combination", when used in reference to any corporation and any interested shareholder of the corporation, means:
a. any merger or consolidation of the corporation or any direct or indirect majority-owned subsidiary of the corporation with:
(1) the interested shareholder, or
(2) any other corporation, partnership, unincorporated association, or other entity if the merger or consolidation is caused by the interested shareholder and, as a result of the merger or consolidation subsection A of this section is not applicable to the surviving entity,
b. any sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, except proportionately as a shareholder of the corporation, to or with the interested shareholder, whether as part of a dissolution or otherwise, of assets of the corporation or of any direct or indirect majority-owned subsidiary of the corporation which assets have an aggregate market value equal to ten percent (10%) or more of either the aggregate market value of all the assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the corporation,
c. any transaction which results in the issuance or transfer by the corporation or by any direct or indirect majority-owned subsidiary of the corporation of any stock of the corporation or of the subsidiary to the interested shareholder, except:
(1) pursuant to the exercise, exchange, or conversion of securities exercisable for, exchangeable for, or convertible into stock of the corporation or any subsidiary which securities were outstanding prior to the time that the interested shareholder became an interested shareholder,
(2) pursuant to a merger under subsection G of Section 1081 of this title,
(3) pursuant to a dividend or distribution paid or made, or the exercise, exchange, or conversion of securities exercisable for, exchangeable for, or convertible into stock of the corporation or any subsidiary which security is distributed, pro rata, to all holders of a class or series of stock of the corporation subsequent to the time the interested shareholder became an interested shareholder,
(4) pursuant to an exchange offer by the corporation to purchase stock made on the same terms to all holders of the stock, or
(5) any issuance or transfer of stock by the corporation; provided, however, that in no case under divisions (3) through (5) of this subparagraph shall there be an increase in the interested shareholder's proportionate share of the stock of any class or series of the corporation or of the voting stock of the corporation,
d. any transaction involving the corporation or any direct or indirect majority-owned subsidiary of the corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, or the outstanding voting stock, of the corporation or of any subsidiary which is owned by the interested shareholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested shareholder,
e. any receipt by the interested shareholder of the benefit, directly or indirectly, except proportionately as a shareholder of the corporation, of any loans, advances, guarantees, pledges, or other financial benefits, other than those expressly permitted in subparagraphs a through d of this paragraph, provided by or through the corporation or any direct or indirect majority-owned subsidiary, or
f. any share acquisition by the interested shareholder from the corporation or any direct or indirect majority-owned subsidiary of the corporation pursuant to Section 1090.1 of this title;
4. "Control", including the terms "controlling", "controlled by" and "under common control with", means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of twenty percent (20%) or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of the entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where the person holds stock, in good faith and not for the purpose of circumventing this section, as an agent, bank, broker, nominee, custodian, or trustee for one or more owners who do not individually or as a group have control of the entity;
5. a. "Interested shareholder" means:
(1) any person, other than the corporation and any direct or indirect majority-owned subsidiary of the corporation, that:
(a) is the owner of fifteen percent (15%) or more of the outstanding voting stock of the corporation, or
(b) is an affiliate or associate of the corporation and was the owner of fifteen percent (15%) or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether the person is an interested shareholder, and
(2) the affiliates and associates of the person.
b. "Interested shareholder" shall not mean:
(1) any person who:
(a) owned shares in excess of the fifteen percent (15%) limitation set forth herein as of, or acquired such shares pursuant to a tender offer commenced prior to, September 1, 1991, or pursuant to an exchange offer announced prior to September 1, 1991, and commenced within ninety (90) days thereafter and either:
i. continued to own shares in excess of the fifteen percent (15%) limitation or would have but for action by the corporation, or
ii. is an affiliate or associate of the corporation and so continued, or so would have continued but for action by the corporation, to be the owner of fifteen percent (15%) or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether the person is an interested shareholder, or
(b) acquired the shares from a person described in subdivision (a) of this division by gift, inheritance, or in a transaction in which no consideration was exchanged, or
(2) any person whose ownership of shares in excess of the fifteen percent (15%) limitation set forth herein is the result of action taken solely by the corporation; provided, that the person shall be an interested shareholder if thereafter the person acquires additional shares of voting stock of the corporation, except as a result of further corporate action not caused, directly or indirectly, by the person.
c. For the purpose of determining whether a person is an interested shareholder, the stock of the corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of paragraph 9 of this subsection, but shall not include any other unissued stock of the corporation which may be issuable pursuant to any agreement, arrangement, or understanding, or upon exercise of conversion rights, warrants, or options, or otherwise;
6. "Person" means any individual, corporation, partnership, unincorporated association, any other entity, any group and any member of a group;
7. "Stock" means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest;
8. "Voting stock" means, with respect to any corporation, stock of any class or series entitled to vote generally in the election of directors and, with respect to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of the entity. Every reference to a percentage of voting stock refers to the percentage of the votes of the voting stock; and
9. "Owner", including the terms "own" and "owned", when used with respect to any stock, means a person who individually or with or through any of its affiliates or associates:
a. beneficially owns the stock, directly or indirectly, or
b. has:
(1) the right to acquire the stock, whether the right is exercisable immediately or only after the passage of time, pursuant to any agreement, arrangement, or understanding, or upon the exercise of conversion rights, exchange rights, warrants, or options, or otherwise; provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by the person or any of the person's affiliates or associates until the tendered stock is accepted for purchase or exchange, or
(2) the right to vote the stock pursuant to any agreement, arrangement, or understanding; provided, however, that a person shall not be deemed the owner of any stock because of the person's right to vote the stock if the agreement, arrangement, or understanding to vote the stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more persons, or
c. has any agreement, arrangement, or understanding for the purpose of acquiring, holding, or voting, except voting pursuant to a revocable proxy or consent as described in division (2) of subparagraph b of this paragraph, or disposing of the stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, the stock.
E. No provisions of a certificate of incorporation or bylaw shall require, for any vote of shareholders required by this section, a greater vote of shareholders than that specified in this section.
Added by Laws 1991, c. 53, § 2, eff. Sept. 1, 1991. Amended by Laws 1998, c. 422, § 20, eff. Nov. 1, 1998; Laws 1999, c. 421, § 17, eff. Nov. 1, 1999; Laws 2001, c. 405, § 25, eff. Nov. 1, 2001; Laws 2004, c. 255, § 27, eff. Nov. 1, 2004.
§18-1090.4. Conversion of a domestic business entity to a
domestic corporation.
CONVERSION OF A DOMESTIC BUSINESS
ENTITY TO A DOMESTIC CORPORATION
A. As used in this section, the term "business entity" means a domestic partnership, whether general or limited, limited liability company, business trust, common law trust, or other unincorporated association.
B. Any business entity may convert to a corporation incorporated under the laws of this state by complying with subsection G of this section and filing in the office of the Secretary of State a certificate of conversion that has been executed in accordance with subsection H of this section and filed in accordance with Section 1007 of this title, to which shall be attached, a certificate of incorporation that has been prepared, executed and acknowledged in accordance with Section 1007 of this title.
C. The certificate of conversion shall state:
1. The date on which the business entity was first formed;
2. The name of the business entity immediately prior to the filing of the certificate of conversion;
3. The name of the corporation as set forth in its certificate of incorporation filed in accordance with subsection B of this section; and
4. The future effective date or time, which shall be a date or time certain, of the conversion to a corporation if the conversion is not to be effective upon the filing of the certificate of conversion and the certificate of incorporation provides for the same future effective date as authorized in subsection D of Section 1007 of this title.
D. Upon the effective time of the certificate of conversion and the certificate of incorporation, the business entity shall be converted into a corporation of this state and the corporation shall thereafter be subject to all of the provisions of this title, except that notwithstanding Section 1007 of this title, the existence of the corporation shall be deemed to have commenced on the date the business entity commenced its existence.
E. The conversion of any business entity into a corporation of this state shall not be deemed to affect any obligations or liabilities of the business entity incurred prior to its conversion to a corporation of this state or the personal liability of any person incurred prior to such conversion.
F. Unless otherwise agreed or otherwise provided by any laws of this state applicable to the converting business entity, the converting business entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of such business entity and shall constitute a continuation of the existence of the converting business entity in the form of a corporation of this state.
G. Prior to filing a certificate of conversion with the Secretary of State, the conversion shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the business entity and the conduct of its business or by applicable law, as appropriate, and a certificate of incorporation shall be approved by the same authorization required to approve the conversion.
H. The certificate of conversion shall be signed by an officer, director, trustee, manager, partner, or other person performing functions equivalent to those of an officer or director of a corporation of this state, however named or described, and who is authorized to sign the certificate of conversion on behalf of the business entity.
Added by Laws 2001, c. 405, § 26, eff. Nov. 1, 2001.
§18-1090.5. Conversion of domestic corporation to a domestic business entity.
CONVERSION OF DOMESTIC CORPORATION
TO A DOMESTIC BUSINESS ENTITY
A. A corporation of this state may, upon the authorization of such conversion in accordance with this section, convert to a business entity. As used in this section, the term "business entity" means a domestic partnership, whether general or limited, limited liability company, business trust, common law trust, or other unincorporated association.
B. The board of directors of the corporation which desires to convert under this section shall adopt a resolution approving such conversion, specifying the type of business entity into which the corporation shall be converted and recommending the approval of the conversion by the shareholders of the corporation. The resolution shall be submitted to the shareholders of the corporation at an annual or special meeting. Due notice of the time, and purpose of the meeting shall be mailed to each holder of shares, whether voting or nonvoting, of the corporation at the address of the shareholder as it appears on the records of the corporation, at least twenty (20) days prior to the date of the meeting. At the meeting, the resolution shall be considered and a vote taken for its adoption or rejection. The corporation adopts the conversion if all outstanding shares of stock of the corporation, whether voting or nonvoting, are voted for the resolution.
C. If the governing act of the domestic business entity into which the corporation is converting does not provide for the filing of a conversion notice with the Secretary of State, the corporation shall file with the Secretary of State a certificate of conversion executed in accordance with Section 1007 of this title which certifies:
1. The name of the corporation, and if it has been changed, the name under which it was originally incorporated;
2. The date of filing of its original certificate of incorporation with the Secretary of State;
3. The name of the business entity into which the corporation shall be converted;
4. That the conversion has been approved in accordance with the provisions of this section; and
5. If the business entity into which the corporation is converting was required to make a filing with the Secretary of State as a condition of its information, the type and date of such filing.
D. Upon the filing of a conversion notice with the Secretary of State, whether under subsection C of this section or under the governing act of the domestic business entity into which the corporation is converting, the filing of any formation document required by the governing act of the domestic entity into which the corporation is converting, and payment to the Secretary of State of all prescribed fees, the Secretary of State shall certify that the corporation has filed all documents and paid all required fees, and thereupon the corporation shall cease to exist as a corporation of this state at the time the certificate of conversion becomes effective in accordance with Section 1007 of this title. The certificate of the Secretary of State shall be prima facie evidence of the conversion by the corporation.
E. The conversion of a corporation pursuant to a certificate of conversion under this section shall not be deemed to affect any obligations or liabilities of the corporation incurred prior to such conversion or the personal liability of any person incurred prior to the conversion.
F. After the time the certificate of conversion becomes effective the corporation shall continue to exist as a business entity of this state, and the laws of this state shall apply to the entity to the same extent as prior to the time.
G. Unless otherwise provided in a resolution of conversion adopted in accordance with this section, the converting corporation shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not constitute a dissolution of such corporation and shall constitute a continuation of the existence of the converting corporation in the form of the applicable business entity of this state.
Added by Laws 2001, c. 405, § 27, eff. Nov. 1, 2001. Amended by Laws 2004, c. 255, § 28, eff. Nov. 1, 2004.
§18-1091. Appraisal rights.
APPRAISAL RIGHTS
A. Any shareholder of a corporation of this state who holds shares of stock on the date of the making of a demand pursuant to the provisions of subsection D of this section with respect to the shares, who continuously holds the shares through the effective date of the merger or consolidation, who has otherwise complied with the provisions of subsection D of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to the provisions of Section 1073 of this title shall be entitled to an appraisal by the district court of the fair value of the shares of stock under the circumstances described in subsections B and C of this section. As used in this section, the word "shareholder" means a holder of record of stock in a stock corporation and also a member of record of a nonstock corporation; the words "stock" and "share" mean and include what is ordinarily meant by those words and also membership or membership interest of a member of a nonstock corporation; and "depository receipt" means an instrument issued by a depository representing an interest in one or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository. The provisions of this subsection shall be effective only with respect to mergers or consolidations consummated pursuant to an agreement of merger or consolidation entered into after November 1, 1988.
B. 1. Except as otherwise provided for in this subsection, appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation, or of the acquired corporation in a share acquisition, to be effected pursuant to the provisions of Section 1081, other than a merger effected pursuant to subsection G of Section 1081, and Section 1082, 1086, 1087, 1090.1 or 1090.2 of this title.
2. a. No appraisal rights under this section shall be available for the shares of any class or series of stock which stock, or depository receipts in respect thereof, at the record date fixed to determine the shareholders entitled to receive notice of and to vote at the meeting of shareholders to act upon the agreement of merger or consolidation, were either:
(1) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.; or
(2) held of record by more than two thousand holders.
No appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the shareholders of the surviving corporation as provided in subsection G of Section 1081 of this title.
b. In addition, no appraisal rights shall be available for any shares of stock, or depository receipts in respect thereof, of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the shareholders of the surviving corporation as provided for in subsection F of Section 1081 of this title.
3. Notwithstanding the provisions of paragraph 2 of this subsection, appraisal rights provided for in this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to the provisions of Section 1081, 1082, 1086, 1087, 1090.1 or 1090.2 of this title to accept for the stock anything except:
a. shares of stock of the corporation surviving or resulting from the merger or consolidation or depository receipts thereof, or
b. shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than two thousand holders, or
c. cash in lieu of fractional shares or fractional depository receipts described in subparagraphs a and b of this paragraph, or
d. any combination of the shares of stock, depository receipts, and cash in lieu of the fractional shares or depository receipts described in subparagraphs a, b, and c of this paragraph.
4. In the event all of the stock of a subsidiary Oklahoma corporation party to a merger effected pursuant to the provisions of Section 1083 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Oklahoma corporation.
C. Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections D and E of this section, shall apply as nearly as is practicable.
D. Appraisal rights shall be perfected as follows:
1. If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of shareholders, the corporation, not less than twenty (20) days prior to the meeting, shall notify each of its shareholders entitled to appraisal rights that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in the notice a copy of this section. Each shareholder electing to demand the appraisal of the shares of the shareholder shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of the shares of the shareholder. The demand will be sufficient if it reasonably informs the corporation of the identity of the shareholder and that the shareholder intends thereby to demand the appraisal of the shares of the shareholder. A proxy or vote against the merger or consolidation shall not constitute such a demand. A shareholder electing to take such action must do so by a separate written demand as herein provided. Within ten (10) days after the effective date of the merger or consolidation, the surviving or resulting corporation shall notify each shareholder of each constituent corporation who has complied with the provisions of this subsection and has not voted in favor of or consented to the merger or consolidation as of the date that the merger or consolidation has become effective; or
2. If the merger or consolidation is approved pursuant to the provisions of Section 1073 or 1083 of this title, either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within ten (10) days thereafter shall notify each of the holders of any class or series of stock of the constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of the constituent corporation, and shall include in the notice a copy of this section. The notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify the shareholders of the effective date of the merger or consolidation. Any shareholder entitled to appraisal rights may, within twenty (20) days after the date of mailing of the notice, demand in writing from the surviving or resulting corporation the appraisal of the holder's shares. The demand will be sufficient if it reasonably informs the corporation of the identity of the shareholder and that the shareholder intends to demand the appraisal of the holder's shares. If the notice does not notify shareholders of the effective date of the merger or consolidation either:
a. each constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of the constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation, or
b. the surviving or resulting corporation shall send a second notice to all holders on or within ten (10) days after the effective date of the merger or consolidation; provided, however, that if the second notice is sent more than twenty (20) days following the mailing of the first notice, the second notice need only be sent to each shareholder who is entitled to appraisal rights and who has demanded appraisal of the holder's shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the shareholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than ten (10) days prior to the date the notice is given; provided, if the notice is given on or after the effective date of the merger or consolidation, the record date shall be the effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.
E. Within one hundred twenty (120) days after the effective date of the merger or consolidation, the surviving or resulting corporation or any shareholder who has complied with the provisions of subsections A and D of this section and who is otherwise entitled to appraisal rights, may file a petition in district court demanding a determination of the value of the stock of all such shareholders; provided, however, at any time within sixty (60) days after the effective date of the merger or consolidation, any shareholder shall have the right to withdraw the demand of the shareholder for appraisal and to accept the terms offered upon the merger or consolidation. Within one hundred twenty (120) days after the effective date of the merger or consolidation, any shareholder who has complied with the requirements of subsections A and D of this section, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of the shares. The written statement shall be mailed to the shareholder within ten (10) days after the shareholder's written request for a statement is received by the surviving or resulting corporation or within ten (10) days after expiration of the period for delivery of demands for appraisal pursuant to the provisions of subsection D of this section, whichever is later.
F. Upon the filing of any such petition by a shareholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which, within twenty (20) days after service, shall file, in the office of the court clerk of the district court in which the petition was filed, a duly verified list containing the names and addresses of all shareholders who have demanded payment for their shares and with whom agreements regarding the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such duly verified list. The court clerk, if so ordered by the court, shall give notice of the time and place fixed for the hearing on the petition by registered or certified mail to the surviving or resulting corporation and to the shareholders shown on the list at the addresses therein stated. Notice shall also be given by one or more publications at least one (1) week before the day of the hearing, in a newspaper of general circulation published in the City of Oklahoma City, Oklahoma, or other publication as the court deems advisable. The forms of the notices by mail and by publication shall be approved by the court, and the costs thereof shall be borne by the surviving or resulting corporation.
G. At the hearing on the petition, the court shall determine the shareholders who have complied with the provisions of this section and who have become entitled to appraisal rights. The court may require the shareholders who have demanded an appraisal of their shares and who hold stock represented by certificates to submit their certificates of stock to the court clerk for notation thereon of the pendency of the appraisal proceedings; and if any shareholder fails to comply with this direction, the court may dismiss the proceedings as to that shareholder.
H. After determining the shareholders entitled to an appraisal, the court shall appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. In determining the fair value, the court shall take into account all relevant factors. In determining the fair rate of interest, the court may consider all relevant factors, including the rate of interest which the surviving or resulting corporation would have to pay to borrow money during the pendency of the proceeding. Upon application by the surviving or resulting corporation or by any shareholder entitled to participate in the appraisal proceeding, the court may, in its discretion, permit discovery or other pretrial proceedings and may proceed to trial upon the appraisal prior to the final determination of the shareholder entitled to an appraisal. Any shareholder whose name appears on the list filed by the surviving or resulting corporation pursuant to the provisions of subsection F of this section and who has submitted the certificates of stock of the shareholder to the court clerk, if required, may participate fully in all proceedings until it is finally determined that the shareholder is not entitled to appraisal rights pursuant to the provisions of this section.
I. The court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the shareholders entitled thereto. Interest may be simple or compound, as the court may direct. Payment shall be made to each shareholder, in the case of holders of uncertificated stock immediately, and in the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing the stock. The court's decree may be enforced as other decrees in the district court may be enforced, whether the surviving or resulting corporation be a corporation of this state or of any other state.
J. The costs of the proceeding may be determined by the court and taxed upon the parties as the court deems equitable in the circumstances. Upon application of a shareholder, the court may order all or a portion of the expenses incurred by any shareholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney's fees and the fees and expenses of experts, to be charged pro rata against the value of all of the shares entitled to an appraisal.
K. From and after the effective date of the merger or consolidation, no shareholder who has demanded appraisal rights as provided for in subsection D of this section shall be entitled to vote the stock for any purpose or to receive payment of dividends or other distributions on the stock, except dividends or other distributions payable to shareholders of record at a date which is prior to the effective date of the merger or consolidation; provided, however, that if no petition for an appraisal shall be filed within the time provided for in subsection E of this section, or if the shareholder shall deliver to the surviving or resulting corporation a written withdrawal of the shareholder's demand for an appraisal and an acceptance of the merger or consolidation, either within sixty (60) days after the effective date of the merger or consolidation as provided for in subsection E of this section or thereafter with the written approval of the corporation, then the right of the shareholder to an appraisal shall cease; provided further, no appraisal proceeding in the district court shall be dismissed as to any shareholder without the approval of the court, and approval may be conditioned upon terms as the court deems just.
L. The shares of the surviving or resulting corporation into which the shares of any objecting shareholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
Added by Laws 1986, c. 292, § 91, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 7, operative Nov. 1, 1987; Laws 1988, c. 323, § 19, eff. Nov. 1, 1988; Laws 1990, c. 328, § 6, eff. Sept. 1, 1990; Laws 1998, c. 422, § 21, eff. Nov. 1, 1998; Laws 2004, c. 255, § 29, eff. Nov. 1, 2004.
§181092. Sale, Lease or Exchange of Assets Consideration Procedure.
SALE, LEASE OR EXCHANGE OF ASSETS; CONSIDERATION; PROCEDURE
A. Every corporation, at any meeting of its board of directors or governing body, may sell, lease, or exchange all or substantially all of its property and assets, including its goodwill and its corporate franchises, upon such terms and conditions and for such consideration, which may consist in whole or in part of money or other property, including shares of stock in, and/or other securities of, any other corporation or corporations, as its board of directors or governing body deems expedient and for the best interests of the corporation, when and as authorized by a resolution adopted by the holders of a majority of the outstanding stock of the corporation entitled to vote thereon or, if the corporation is a nonstock corporation, by a majority of the members having the right to vote for the election of the members of the governing body, at a meeting duly called upon at least twenty (20) days' notice. The notice of the meeting shall state that such a resolution will be considered.
B. Notwithstanding authorization or consent to a proposed sale, lease or exchange of a corporation's property and assets by the shareholders or members, the board of directors or governing body may abandon such proposed sale, lease or exchange without further action by the shareholders or members, subject to the rights, if any, of third parties under any contract relating thereto.
Added by Laws 1986, c. 292, § 92, eff. Nov. 1, 1986.
§181093. Mortgage or Pledge of Assets.
MORTGAGE OR PLEDGE OF ASSETS
The authorization or consent of shareholders to the mortgage or pledge of a corporation's property and assets shall not be necessary, except to the extent that the certificate of incorporation otherwise provides.
Added by Laws 1986, c. 292, § 93, eff. Nov. 1, 1986.
§18-1094. Dissolution of Joint Venture Corporation Having Two Shareholders.
DISSOLUTION OF JOINT VENTURE CORPORATION HAVING TWO SHAREHOLDERS
A. If the shareholders of a corporation of this state, having only two shareholders each of which owns fifty percent (50%) of the stock therein, shall be engaged in the prosecution of a joint venture and if the shareholders shall be unable to agree upon the desirability of discontinuing the joint venture and disposing of the assets used in the venture, either shareholder may, unless otherwise provided in the certificate of incorporation of the corporation or in a written agreement between the shareholders, file with the district court a petition stating that it desires to discontinue the joint venture and to dispose of the assets used in the venture in accordance with a plan to be agreed upon by both shareholders or that, if no plan shall be agreed upon by both shareholders, the corporation be dissolved. The petition shall have attached thereto a copy of the proposed plan of discontinuance and distribution and a certificate stating that copies of the petition and plan have been transmitted in writing to the other shareholder and to the directors and officers of the corporation. The petition and certificate shall be executed and acknowledged in accordance with the provisions of Section 1007 of this title.
B. 1. Unless both shareholders file with the district court, the district court may dissolve the corporation and may by appointment of one or more trustees or receivers with all the powers and title of a trustee or receiver appointed pursuant to the provisions of Section 1100 of this title, administer and wind up its affairs:
a. within three (3) months of the date of the filing of the petition, a certificate similarly executed and acknowledged stating that they have agreed on the plan, or a modification thereof, and
b. within one (1) year from the date of the filing of the petition, a certificate similarly executed and acknowledged stating that the distribution provided by the plan has been completed.
2. Either or both of the periods provided for in paragraph 1 of this subsection may be extended by agreement of the shareholders, evidenced by a certificate similarly executed, acknowledged and filed with the district court prior to the expiration of the period.
Added by Laws 1986, c. 292, § 94, eff. Nov. 1, 1986. Amended by Laws 1998, c. 422, § 22, eff. Nov. 1, 1998.
§181095. Dissolution before the issuance of shares or beginning business; procedure.
DISSOLUTION BEFORE THE ISSUANCE OF
SHARES OR BEGINNING BUSINESS; PROCEDURE
If a corporation has not issued shares or has not commenced the business for which the corporation was organized, a majority of the incorporators, or, if directors were named in the certificate of incorporation or have been elected, a majority of the directors, may surrender all of the corporation's rights and franchises by filing in the Office of the Secretary of State a certificate, executed and acknowledged by a majority of the incorporators or directors, stating that no shares of stock have been issued or that the business of activity for which the corporation was organized has not begun; that no part of the capital of the corporation has been paid, or, if some capital has been paid, that the amount actually paid in for the corporation's shares, less any part thereof disbursed for necessary expenses, has been returned to those entitled thereto; that if the corporation has begun business but it has not issued shares, all debts of the corporation have been paid; that if the corporation has not begun business but has issued stock certificates all issued stock certificates, if any, have been surrendered and canceled; and that all rights and franchises of the corporation are surrendered. Upon such certificate becoming effective in accordance with the provisions of Section 1007 of this title, the corporation shall be dissolved.
Added by Laws 1986, c. 292, § 95, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 20, eff. Nov. 1, 1988.
§181096. Dissolution; procedure.
DISSOLUTION; PROCEDURE
A. If it should be deemed advisable in the judgment of the board of directors of any corporation that it should be dissolved, the board, after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, shall cause notice to be mailed to each shareholder entitled to vote thereon of the adoption of the resolution and of a meeting of shareholders to take action upon the resolution.
B. At the meeting a vote shall be taken upon the proposed dissolution. If a majority of the outstanding stock of the corporation entitled to vote thereon shall vote for the proposed dissolution, a certificate of dissolution shall be filed with the Secretary of State pursuant to subsection D of this section.
C. Dissolution of a corporation may also be authorized without action of the directors if all the shareholders entitled to vote thereon shall consent in writing and a certificate of dissolution shall be filed with the Secretary of State pursuant to subsection D of this section.
D. If dissolution is authorized in accordance with this section, a certificate of dissolution shall be executed, acknowledged and filed, and shall become effective, in accordance with Section 1007 of this title. Such certificate of dissolution shall set forth:
1. the name of the corporation;
2. the date dissolution was authorized;
3. that the dissolution has been authorized by the board of directors and shareholders of the corporation, in accordance with subsections A and B of this section, or that the dissolution has been authorized by all of the shareholders of the corporation entitled to vote on a dissolution, in accordance with subsection C of this section; and
4. the names and addresses of the directors and officers of the corporation.
E. The resolution authorizing a proposed dissolution may provide that notwithstanding authorization or consent to the proposed dissolution by the shareholders, or the members of a nonstock corporation pursuant to Section 1097 of this title, the board of directors or governing body may abandon such proposed dissolution without further action by the shareholders or members.
F. Upon a certificate of dissolution becoming effective in accordance with Section 1007 of this title, the corporation shall be dissolved.
Added by Laws 1986, c. 292, § 96, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 21, eff. Nov. 1, 1988.
§18-1097. Dissolution of nonstock corporation; procedure.
DISSOLUTION OF NONSTOCK CORPORATION; PROCEDURE
A. Whenever it shall be desired to dissolve any corporation having no capital stock, the governing body shall perform all the acts necessary for dissolution which are required by the provisions of Section 1096 of this title to be performed by the board of directors of a corporation having capital stock. If the members of a corporation having no capital stock are entitled to vote for the election of members of its governing body, they shall perform all the acts necessary for dissolution which are required by the provisions of Section 1096 of this title to be performed by the shareholders of a corporation having capital stock. If there is no member entitled to vote thereon, the dissolution of the corporation shall be authorized at a meeting of the governing body, upon the adoption of a resolution to dissolve by the vote of a majority of members of its governing body then in office. In the event of the dissolution of a not for profit corporation, a notice of dissolution shall be published one (1) time in a newspaper having general circulation in the county in which the principal place of business of such corporation is located. In all other respects, the method and proceedings for the dissolution of a corporation having no capital stock shall conform as nearly as may be to the proceedings prescribed by the provisions of Section 1096 of this title for the dissolution of corporations having capital stock.
B. If a corporation having no capital stock has not commenced the business for which the corporation was organized, a majority of the governing body or, if none, a majority of the incorporators may surrender all of the corporation rights and franchises by filing in the Office of the Secretary of State a certificate, executed and acknowledged by a majority of the incorporators or governing body, conforming as nearly as may be to the certificate prescribed by Section 1095 of this title.
Added by Laws 1986, c. 292, § 97, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 22, eff. Nov. 1, 1988; Laws 1999, c. 421, § 18, eff. Nov. 1, 1999.
§18-1098. Repealed by Laws 1998, c. 432, § 39, eff. Nov. 1, 1998.
§181099. Continuation of corporation after dissolution for purposes of suit and winding up affairs.
CONTINUATION OF CORPORATION AFTER DISSOLUTION FOR PURPOSES
OF SUIT AND WINDING UP AFFAIRS
All corporations, whether they expire by their own limitation or are otherwise dissolved, nevertheless shall be continued, for the term of three (3) years from such expiration or dissolution or for such longer period as the district court shall in its discretion direct, bodies corporate for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, to discharge their liabilities, and to distribute to their shareholders any remaining assets, but not for the purpose of continuing the business for which the corporation was organized. With respect to any action, suit, or proceeding begun by or against the corporation either prior to or within three (3) years after the date of its expiration or dissolution, the action shall not abate by reason of the expiration or dissolution of the corporation. The corporation, solely for the purpose of such action, suit or proceeding, shall be continued as a body corporate beyond the threeyear period and until any judgments, orders or decrees therein shall be fully executed, without the necessity for any special direction to that effect by the district court.
Added by Laws 1986, c. 292, § 99, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 23, eff. Nov
. 1, 1988.
§181100. Trustees or receivers for dissolved corporations; appointment; powers; duties.
TRUSTEES OR RECEIVERS FOR DISSOLVED CORPORATIONS;
APPOINTMENT; POWERS; DUTIES
When any corporation organized in accordance with the provisions of the Oklahoma General Corporation Act shall be dissolved in any manner whatever, the district court, on application of any creditor, shareholder or director of the corporation, or any other person who shows good cause therefor, at any time, may either appoint one or more of the directors of the corporation to be trustees, or appoint one or more persons to be receivers, of and for the corporation, to take charge of the corporation's property, and to collect the debts and property due and belonging to the corporation, with power to prosecute and defend, in the name of the corporation, or otherwise, all such suits as may be necessary or proper for the purposes aforesaid, and to appoint an agent or agents under them, and to do all other acts which might be done by the corporation, if in being, that may be necessary for the final settlement of the unfinished business of the corporation. The powers of the trustees or receivers may be continued as long as the district court shall think necessary for the purposes provided for in this section.
Added by Laws 1986, c. 292, § 100, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 24, eff. Nov. 1, 1988.
§181100.1. Notice to claimants; filing of claims.
NOTICE TO CLAIMANTS; FILING OF CLAIMS
A. 1. After a corporation has been dissolved in accordance with the procedures set forth in the Oklahoma General Corporation Act, the corporation or any successor entity may give notice of the dissolution requiring all persons having a claim against the corporation other than a claim against the corporation in a pending action, suit, or proceeding to which the corporation is a party to present their claims against the corporation in accordance with the notice. The notice shall state:
a. that all such claims must be presented in writing and must contain sufficient information reasonably to inform the corporation or successor entity of the identity of the claimant and the substance of the claim,
b. the mailing address to which a claim must be sent,
c. the date by which a claim must be received by the corporation or successor entity, which date shall be no earlier than sixty (60) days from the date of the notice,
d. that the claim will be barred if not received by the date referred to in subparagraph c of this paragraph,
e. that the corporation or a successor entity may make distributions to other claimants and the corporation's shareholders or persons interested as having been such without further notice to the claimant, and
f. the aggregate amount, on an annual basis, of all distributions made by the corporation to its shareholders for each of the three (3) years prior to the date the corporation dissolved.
2. The notice shall also be published at least once a week for two (2) consecutive weeks in a newspaper of general circulation in the county in which the office of the corporation's last registered agent in this state is located and in the corporation's principal place of business and, in the case of a corporation having Ten Million Dollars ($10,000,000.00) or more in total assets at the time of its dissolution, at least once in an Oklahoma newspaper having a circulation of at least two hundred fifty thousand (250,000). On or before the date of the first publication of the notice, the corporation or successor entity shall mail a copy of the notice by certified or registered mail, return receipt requested, to each known claimant of the corporation, including persons with claims asserted against the corporation in a pending action, suit, or proceeding to which the corporation is a party.
3. Any claim against the corporation required to be presented pursuant to this subsection is barred if a claimant who was given actual notice under this subsection does not present the claim to the dissolved corporation or successor entity by the date referred to in subparagraph c of paragraph 1 of this subsection.
4. A corporation or successor entity may reject, in whole or in part, any claim made by a claimant pursuant to this subsection by mailing notice of rejection by certified or registered mail return receipt requested to the claimant within ninety (90) days after receipt of the claim and, in all events, at least one hundred fifty (150) days before the expiration of the period described in Section 1099 of Title 18 of the Oklahoma Statutes; provided, however, that in the case of a claim filed pursuant to Section 1110 of this title against a corporation or successor entity for which a receiver or trustee has been appointed by the district court, the time period shall be as provided in Section 1111 of this title, and the thirty-day appeal period provided for in Section 1111 of this title shall be applicable. A notice sent by a corporation or successor entity pursuant to this subsection shall state that any claim rejected will be barred if an action, suit, or proceeding with respect to the claim is not commenced within one hundred twenty (120) days of the date thereof, and shall be accompanied by a copy of Sections 1099 through 1100.3 of this title, and, in the case of a notice sent by a court-appointed receiver or trustee for a claim filed pursuant to Section 1110 of this title, the notice shall be accompanied by copies of Sections 1110 and 1111 of this title.
5. A claim against a corporation is barred if a claimant whose claim is rejected pursuant to paragraph 4 of this subsection does not commence an action, suit, or proceeding with respect to the claim within one hundred twenty (120) days after the mailing of the rejection notice.
B. 1. A corporation or successor entity electing to follow the procedures described in subsection A of this section shall also give notice of the dissolution of the corporation to persons with contractual claims contingent upon the occurrence or nonoccurrence of future events or otherwise conditional or unmatured, and request that those persons present their claims in accordance with the terms of the notice. As used in this section and Section 1100.2 of this title, the term "contractual claims" shall not include any implied warranty as to any product manufactured, sold, distributed, or handled by the dissolved corporation. The notice shall be in substantially the form, and sent and published in the same manner, as described in paragraph 1 of subsection A of this section.
2. The corporation or successor entity shall offer any claimant on a contract whose claim is contingent, conditional, or unmatured, the security that the corporation or successor entity determines is sufficient to provide compensation to the claimant if the claim matures. The corporation or successor entity shall mail the offer to the claimant by certified or registered mail, return receipt requested, within ninety (90) days of receipt of the claim and, in all events, at least one hundred fifty (150) days before the expiration of the period described in Section 1099 of this title. If the claimant offered the security does not deliver in writing to the corporation or successor entity a notice rejecting the offer within one hundred twenty (120) days after receipt of the offer for security, the claimant shall be deemed to have accepted the security as the sole source from which to satisfy his or her claim against the corporation.
C. 1. A corporation or successor entity which has given notice in accordance with subsection A of this section shall petition the district court to determine the amount and form of security that will be reasonable likely to be sufficient to provide compensation for any claim against the corporation which is the subject of a pending action, suit, or proceeding to which the corporation is a party other than a claim barred pursuant to subsection A of this section.
2. A corporation or successor entity which has given notice in accordance with subsections A and B of this section shall petition the district court to determine the amount and form of security that will be sufficient to provide compensation to any claimant who has rejected the offer for security made pursuant to paragraph 2 of subsection B of this section.
3. A corporation or successor entity which has given notice in accordance with subsection A of this section shall petition the district court to determine the amount and form of security which will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or that have not arisen but that, based on facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity within five (5) years after the date of dissolution or a longer period of time as the district court may determine not to exceed ten (10) years after the date of dissolution. The district court may appoint a guardian ad litem in respect of any such proceeding brought under this subsection. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the petitioner in the proceeding.
D. The giving of any notice or making of any offer pursuant to the provisions of this section shall not revive any claim then barred or constitute acknowledgment by the corporation or successor entity that any person to whom the notice is sent is a proper claimant and shall not operate as a waiver of any defense or counterclaim in respect of any claim asserted by any person to whom the notice is sent.
E. As used in this section, the term "successor entity" shall include any trust, receivership, or other legal entity governed by the laws of this state to which the remaining assets and liabilities of a dissolved corporation are transferred and which exists solely for the purposes of prosecuting and defending suits, by or against the dissolved corporation, enabling the dissolved corporation to settle and close the business of the dissolved corporation, to dispose of and convey the property of the dissolved corporation, to discharge the liabilities of the dissolved corporation, and to distribute to the dissolved corporation's shareholders any remaining assets, but not for the purpose of continuing the business for which the dissolved corporation was organized.
Added by Laws 1988, c. 323, § 25, eff. Nov. 1, 1988. Amended by Laws 1998, c. 422, § 23, eff. Nov. 1, 1998.
§18-1100.2. Payment and distribution to claimants and shareholders.
PAYMENT AND DISTRIBUTION TO CLAIMANTS AND SHAREHOLDERS
A. 1. A dissolved corporation or successor entity which has followed the procedures described in Section 1100.1 of this title shall:
a. pay the claims made and not rejected in accordance with subsection A of Section 1100.1 of this title;
b. post the security offered and not rejected pursuant to paragraph 2 of subsection B of Section 1100.1 of this title;
c. post any security ordered by the district court in any proceeding under subsection C of Section 1100.1 of this title; and
d. pay or make provision for all other claims that are mature, known, and uncontested or that have been finally determined to be owing by the corporation or successor entity.
2. Claims or obligations shall be paid in full and any provision for payment shall be made in full if there are sufficient assets. If there are insufficient assets, the claims and obligations shall be paid or provided for according to their priority, and, among claims of equal priority, ratably to the extent of assets legally available therefor. Any remaining assets shall be distributed to the shareholders of the dissolved corporation; provided, however, that distribution shall not be made before the expiration of one hundred fifty (150) days from the date of the last notice of rejections given pursuant to paragraph 3 of subsection A of Section 1100.1 of this title. In the absence of actual fraud, the judgment of the directors of the dissolved corporation or the governing persons of the successor entity as to the provision made for the payment of all obligations under paragraph 4 of this subsection shall be conclusive.
B. A dissolved corporation or successor entity which has not followed the procedures described in Section 1100.1 of this title shall, prior to the expiration of the period described in Section 1099 of this title, adopt a plan of distribution pursuant to which the dissolved corporation or successor entity:
1. Shall pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional, or unmatured contractual claims known to the corporation or the successor entity;
2. Shall make provision as will be reasonably likely to be sufficient to provide compensation for any claim against the corporation which is the subject of a pending action, suit, or proceeding to which the corporation is a party; and
3. Shall make provision as will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or successor entity or that have not arisen but that, based on facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity within ten (10) years after the date of dissolution. The plan of distribution shall provide that the claims shall be paid in full and any provision for payment made shall be made in full if there are sufficient assets. If there are insufficient assets, the plan shall provide that the claims and obligations shall be paid or provided for according to their priority and, among claims of equal priority, ratably to the extent of assets legally available therefor. Any remaining assets shall be distributed to the shareholders of the dissolved corporation.
C. Directors of a dissolved corporation or governing persons of a successor entity which has complied with subsection A or B of this section shall not be personally liable to the claimants of the dissolved corporation.
D. As used in this section, the term "successor entity" has the meaning set forth in subsection E of Section 1100.1 of this title.
E. As used in this section, the term "priority" does not refer either to the order of payments set forth in paragraphs 1 through 4 of subsection A of this section or to the relative times at which any claims mature or are reduced to judgment.
Added by Laws 1988, c. 323, § 26, eff. Nov. 1, 1988. Amended by Laws 1998, c. 422, § 24, eff. Nov. 1, 1998; Laws 1999, c. 421, § 19, eff. Nov. 1, 1999.
§181100.3. Foreign corporations; definition; qualification to do business in state; procedure.
LIABILITY OF SHAREHOLDERS OF DISSOLVED CORPORATIONS
A. A shareholder of a dissolved corporation the assets of which were distributed pursuant to subsection A or B of Section 1100.2 of this title shall not be liable for any claim against the corporation in an amount in excess of the shareholder's pro rata share of the claim or the amount distributed to the shareholder, whichever is less.
B. A shareholder of a dissolved corporation the assets of which were distributed pursuant to subsection A of Section 1100.2 of this title shall not be liable for any claim against the corporation on which an action, suit, or proceeding is not begun prior to the expiration of the period described in Section 1099 of this title.
C. The aggregate liability of any shareholder of a dissolved corporation for claims against the dissolved corporation shall not exceed the amount distributed to the shareholder in dissolution.
Added by Laws 1986, c. 292, § 130, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 9, operative Nov. 1, 1987; Laws 1991, c. 331, § 56, eff. Sept. 1, 1991; Laws 1998, c. 422, § 25, eff. Nov. 1, 1998.
§181101. Jurisdiction of Court.
JURISDICTION OF COURT
The district court shall have jurisdiction of the application prescribed in Section 100 of this act and of all questions arising in the proceedings thereon, and may make such orders and decrees and issue injunctions therein as justice and equity shall require.
Added by Laws 1986, c. 292, § 101, eff. Nov. 1, 1986.
§181104. Revocation or forfeiture of charter proceedings.
REVOCATION OR FORFEITURE OF CHARTER; PROCEEDINGS
A. The district court shall have jurisdiction to revoke or forfeit the charter of any corporation for abuse, misuse or nonuse of its corporate powers, privileges or franchises. The Attorney General, upon his own motion or upon the relation of a proper party, shall proceed for this purpose by complaint in the county in which the registered office of the corporation is located.
B. The district court shall have power, by appointment of receivers or otherwise, to administer and wind up the affairs of any corporation whose charter shall be revoked or forfeited by any court pursuant to the provisions of the Oklahoma General Corporation Act or otherwise, and to make such orders and decrees with respect thereto as shall be just and equitable respecting its affairs and assets and the rights of its shareholders and creditors.
C. No proceeding shall be instituted pursuant to the provisions of this section for nonuse of any corporation's powers, privileges or franchises during the first two (2) years after its incorporation.
Added by Laws 1986, c. 292, § 104, eff. Nov. 1, 1986.
§181105. Dissolution or Forfeiture of Charter by Decree of Court Filing.
DISSOLUTION OR FORFEITURE OF CHARTER BY DECREE OF COURT; FILING
Whenever any corporation is dissolved or its charter forfeited by decree or judgment of the district court, the decree or judgment shall be immediately filed by the clerk in the court of the county in which the decree or judgment was entered, in the Office of the Secretary of State, and a note thereof shall be made by the Secretary of State on the corporation's charter or certificate of incorporation and on the index thereof.
Added by Laws 1986, c. 292, § 105, eff. Nov. 1, 1986.
§181106. Receivers for insolvent corporations Appointment and powers.
RECEIVERS FOR INSOLVENT CORPORATIONS; APPOINTMENT AND POWERS
Whenever a corporation shall be insolvent, the district court of the county in which the registered office is located may at any time upon the application of a shareholder or shareholders, severally or jointly, who have been registered owners for a period of not less than six (6) months, of not less than ten percent (10%) of the entire outstanding stock of the corporation or a creditor whose claim has been reduced to judgment and execution thereon has been issued, appoint one or more persons to be receivers of and for the corporation, to take charge of its assets, estate, effects, business and affairs, and to collect the outstanding debts, claims, and property due and belonging to the corporation, with power to prosecute and defend, in the name of the corporation or otherwise, all claims or suits, to appoint an agent or agents under them, and to do all other acts which might be done by the corporation and which may be necessary or proper. The powers of the receivers shall be such and shall continue so long as the court shall deem necessary.
Added by Laws 1986, c. 292, § 106, eff. Nov. 1, 1986.
§181107. Title to Property Filing Order of Appointment Exception.
TITLE TO PROPERTY; FILING ORDER OF APPOINTMENT; EXCEPTION
A. Trustees of or receivers for any corporation, appointed by the district court, and their respective survivors and successors, upon their appointment and qualification or upon the death, resignation or discharge of any cotrustee or coreceiver, shall be vested by operation of law and without any act or deed, with the title of the corporation to all of its property, real, personal, or mixed of whatsoever nature, kind, class or description, and wheresoever situated, except real estate situated outside this state.
B. Trustees or receivers appointed by the district court, within twenty (20) days from the date of their qualification, shall file in the office of the county clerk in each county in this state in which any real estate belonging to the corporation may be situated, a certified copy of the order of their appointment and evidence of their qualification.
C. This section shall not apply to receivers appointed pendente lite.
Added by Laws 1986, c. 292, § 107, eff. Nov. 1, 1986.
§181108. Notices to Shareholders and Creditors.
NOTICES TO SHAREHOLDERS AND CREDITORS
All notices required to be given to shareholders and creditors in any action in which a receiver or trustee for a corporation was appointed shall be given by the district court, unless otherwise ordered by the court.
Added by Laws 1986, c. 292, § 108, eff. Nov. 1, 1986.
§181109. Receivers or Trustees Inventory List of Debts and Reports.
RECEIVERS OR TRUSTEES; INVENTORY; LIST OF DEBTS AND REPORTS
Trustees or receivers, as soon as convenient, shall file in the district court of the county in which the proceeding is pending, a full and complete itemized inventory of all the assets of the corporation which shall show their nature and probable value, and an account of all debts due from and to it, as nearly as the same can be ascertained. Trustees or receivers shall make a report to the district court of their proceedings, whenever and as often as the court shall direct.
Added by Laws 1986, c. 292, § 109, eff. Nov. 1, 1986.
§181110. Creditors' Proofs of Claims When Barred Notice.
CREDITORS' PROOFS OF CLAIMS; WHEN BARRED; NOTICE
All creditors shall make proof under oath of their respective claims against the corporation, and cause the same to be filed in the district court of the county in which the proceeding is pending within the time fixed by the order of the district court. All creditors and claimants failing to do so, within the time limited by the provisions of this section, or the time prescribed by the order of the district court, by direction of the district court, may be barred from participating in the distribution of the assets of the corporation. The district court may also prescribe what notice, by publication or otherwise, shall be given to the creditors of the time fixed for the filing and making proof of claims.
Added by Laws 1986, c. 292, § 110, eff. Nov. 1, 1986.
§181111. Adjudication of Claims Appeal.
ADJUDICATION OF CLAIMS; APPEAL
A. The district court immediately upon the expiration of the time fixed for the filing of claims, in compliance with the provisions of Section 110 of this act, shall notify the trustee or receiver of the filing of the claims, and the trustee or receiver, within thirty (30) days after receiving the notice, shall inspect the claims, and if the trustee or receiver or any creditor shall not be satisfied with the validity or correctness of the same, or any of them, the trustee or receiver shall immediately notify the creditors whose claims are disputed of his decision. The trustee or receiver shall require all creditors whose claims are disputed to submit themselves to such examination in relation to their claims as the trustee or receiver shall direct, and the creditors shall produce such books and papers relating to their claims as shall be required. The trustee or receiver shall have power to examine, under oath or affirmation, all witnesses produced before him touching the claims, and shall pass upon and allow or disallow the claims, or any part thereof, and notify the claimants of his determination.
B. Every creditor or claimant who shall have received notice from the receiver or trustee that his claim has been disallowed in whole or in part may appeal to the district court within thirty (30) days thereafter. The district court, after hearing, shall determine the rights of the parties.
Added by Laws 1986, c. 292, § 111, eff. Nov. 1, 1986.
§181112. Sale of Perishable or Deteriorating Property.
SALE OF PERISHABLE OR DETERIORATING PROPERTY
Whenever the property of a corporation is at the time of the appointment of a receiver or trustee encumbered with liens of any character, and the validity, extent or legality of any lien is disputed or brought in question, and the property of the corporation is of a character which will deteriorate in value pending the litigation respecting the lien, the district court may order the receiver or trustee to sell the property of the corporation, clear of all encumbrances, at public or private sale, for the best price that can be obtained therefor, and pay the net proceeds arising from the sale thereof after deducting the costs of the sale into the district court, there to remain subject to the order of the district court, and to be disposed of as the district court shall direct.
Added by Laws 1986, c. 292, § 112, eff. Nov. 1, 1986.
§181113. Compensation, Costs and Expenses of Receiver or Trustee.
COMPENSATION, COSTS AND EXPENSES OF RECEIVER OR TRUSTEE
The district court, before making distribution of the assets of a corporation among the creditors or shareholders thereof, shall allow a reasonable compensation to the receiver or trustee for his services, and the costs and expenses incurred in and about the execution of his trust, and the costs of the proceedings in the district court, to be first paid out of the assets.
Added by Laws 1986, c. 292, § 113, eff. Nov. 1, 1986.
§181114. Substitution of Trustee or Receiver as Party Abatement of Actions.
SUBSTITUTION OF TRUSTEE OR RECEIVER
AS PARTY; ABATEMENT OF ACTIONS
A trustee or receiver, upon application by him in the court in which any suit is pending, shall be substituted as party plaintiff in the place of the corporation in any suit or proceeding which was so pending at the time of his appointment. No action against a trustee or receiver of a corporation shall abate by reason of his death, but, upon suggestion of the facts of the record, shall be continued against his successor or against the corporation in case no new trustee or receiver is appointed.
Added by Laws 1986, c. 292, § 114, eff. Nov. 1, 1986.
§181115. Liens for Wages or Products When Corporation is Insolvent.
LIENS FOR WAGES OR PRODUCTS WHEN CORPORATION IS INSOLVENT
A. Whenever any corporation of this state, or any foreign corporation doing business in this state, shall become insolvent, the employees performing labor or services of whatever character in the regular employ of the corporation, and the producers of agricultural and dairy products, including cooperative marketing associations of such producers, shall have a lien upon the assets of such corporation for the amount of the wages or payments for agricultural and dairy products due to them, not exceeding four months' wages or payments for such products which shall have accrued prior to the adjudication of the insolvency of such corporation, which lien shall be paid prior to any other debts, charges or claims against said corporation, except taxes due the United States government or the State of Oklahoma. The word "employee" shall not be construed to include any of the officers of the corporation.
B. The lien provided for in this section shall be enforced in the manner provided for by law for the enforcement of other liens for labor.
Added by Laws 1986, c. 292, § 115, eff. Nov. 1, 1986.
§181116. Discontinuance of Liquidation.
DISCONTINUANCE OF LIQUIDATION
The liquidation of the assets and business of an insolvent corporation may be discontinued at any time during the liquidation proceedings when it is established that cause for liquidation no longer exists. In such event the district court in its discretion, and subject to such condition as it may deem appropriate, may dismiss the proceedings and direct the receiver or trustee to redeliver to the corporation all of its remaining property and assets.
Added by Laws 1986, c. 292, § 116, eff. Nov. 1, 1986.
§181117. Compromise or arrangement between corporation and creditors or shareholders.
COMPROMISE OR ARRANGEMENT BETWEEN CORPORATION AND CREDITORS
OR SHAREHOLDERS
A. Whenever the provision provided for in paragraph 2 of subsection B of Section 1006 of this title is included in the original certificate of incorporation of any corporation, all persons who become creditors or shareholders thereof shall be deemed to have become such creditors or shareholders subject in all respects to that provision and the same shall be absolutely binding upon them. Whenever that provision is inserted in the certificate of incorporation of any such corporation by an amendment of its certificate all persons who become creditors or shareholders of such corporation after such amendment shall be deemed to have become such creditors or shareholders subject in all respects to that provision and the same shall be absolutely binding upon them.
B. The district court may administer and enforce any compromise or arrangement made pursuant to the provision provided for in paragraph 2 of subsection B of Section 1006 of this title and may restrain, pendente lite, all actions and proceedings against any corporation with respect to which the district court shall have begun the administration and enforcement of that provision and may appoint a temporary receiver for such corporation and may grant the receiver such powers as it deems proper, and may make and enforce such rules as it deems necessary for the exercise of such jurisdiction.
Added by Laws 1986, c. 292, § 117, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 8, operative Nov. 1, 1987.
§181118. Bankruptcy Proceedings Under a Statute of the United States Effectuation.
BANKRUPTCY PROCEEDINGS UNDER A STATUTE
OF THE UNITED STATES; EFFECTUATION
A. Any corporation of this state, a plan of reorganization of which, pursuant to the provisions of any applicable statute of the United States relating to the bankruptcy of corporations, has been or shall be confirmed by the decree or order of a court of competent jurisdiction, may put into effect and carry out the plan and the decrees and orders of the court or judge relative thereto and may take any proceedings and do any act provided in the plan or directed by such decrees and orders, without further action by its directors or shareholders. Such power and authority may be exercised, and such proceedings and acts may be taken, as may be directed by such decrees or orders, by the trustee or trustees of such corporation appointed in the bankruptcy proceedings, or a majority thereof, or if none be appointed and acting, by designated officers of the corporation, or by a master or other representative appointed by the court or judge, with like effect as if exercised and taken by unanimous action of the directors and shareholders of the corporation.
B. Such corporation, in the manner provided for in subsection A of this section, but without limiting the generality or effect of the foregoing, may alter, amend, or repeal its bylaws; constitute or reconstitute and classify or reclassify its board of directors, and name, constitute or appoint directors and officers in place of or in addition to all or some of the directors or officers then in office; amend its certificate of incorporation, and make any change in its capital or capital stock, or any other amendment, change, or alteration, or provision, authorized by the provisions of the Oklahoma General Corporation Act; be dissolved, transfer all or part of its assets, merge or consolidate as permitted by the provisions of the Oklahoma General Corporation Act, in which case, however, no shareholder shall have any statutory right of appraisal of his stock; change the location of its registered office, change its registered agent, and remove or appoint any agent to receive service of process; authorize and fix the terms, manner and conditions of, the issuance of bonds, debentures or other obligations, whether or not convertible into stock of any class, or bearing warrants or other evidences of optional rights to purchase or subscribe for stock of any class; or lease its property and franchises to any corporation, if permitted by law.
C. A certificate of any amendment, change or alteration, or of dissolution, or any agreement of merger or consolidation, made by such corporation pursuant to the provisions of this section, shall be filed with the Secretary of State in accordance with the provisions of Section 7 of this act, and, subject to the provisions of subsection D of Section 7 of this act, shall thereupon become effective in accordance with its terms and the provisions of this section. Such certificate, agreement of merger or other instrument shall be made, executed and acknowledged, as may be directed by such decrees or orders, by the trustee or trustees appointed in the reorganization or debtor in possession in the bankruptcy proceedings, or a majority thereof, or, if none be appointed and acting, by the officers of the corporation, or by a master or other representative appointed by the court or judge, and shall certify that provision for the making of such certificate, agreement or instrument is contained in a decree or order of a court or judge having jurisdiction of a proceeding under such applicable statute of the United States for the reorganization of such corporation.
D. The provisions of this section shall cease to apply to such corporation upon consummation of a plan of reorganization or the entry of a final decree in the bankruptcy proceedings closing the case and discharging the trustee, if any, or the debtor in possession.
E. On filing any certificate, agreement, report or other paper made or executed pursuant to the provisions of this section, there shall be paid to the Secretary of State, for the use of the state, the same fees as are payable by corporations not in bankruptcy proceedings upon the filing of like certificates, agreements, reports or other papers.
Added by Laws 1986, c. 292, § 118, eff. Nov. 1, 1986.
§18-1119. Revocation of Voluntary Dissolution.
REVOCATION OF VOLUNTARY DISSOLUTION
A. At any time prior to the expiration of three (3) years following the dissolution of a corporation pursuant to the provisions of Section 1096 of this title, or, at any time prior to the expiration of such longer period as the district court may have directed pursuant to the provisions of Section 1099 of this title, a corporation may revoke the dissolution up to that time effected by it in the following manner:
1. For purposes of this section, "shareholders" means the shareholders of record on the date the dissolution becomes effective;
2. The board of directors shall adopt a resolution recommending that the dissolution be revoked and directing that the question of the revocation be submitted to a vote at a special meeting of shareholders;
3. Notice of the special meeting of shareholders shall be given in accordance with the provisions of Section 1067 of this title to each of the shareholders; and
4. At the meeting a vote of the shareholders shall be taken on a resolution to revoke the dissolution. If a majority of the stock of the corporation which was outstanding and entitled to vote upon a dissolution at the time of its dissolution shall be voted for the resolution, a certificate of revocation of dissolution shall be executed and acknowledged in accordance with the provisions of Section 1007 of this title which shall state:
a. the name of the corporation;
b. the names and respective addresses of its officers;
c. the names and respective addresses of its directors; and
d. that a majority of the stock of the corporation which was outstanding and entitled to vote upon a dissolution at the time of its dissolution have voted in favor of a resolution to revoke the dissolution; or, if it be the fact, that, in lieu of a meeting and vote of shareholders, the shareholders have given their written consent to the revocation in accordance with the provisions of Section 1073 of this title.
B. Upon the filing in the Office of the Secretary of State of the certificate of revocation of dissolution, the Secretary of State, upon being satisfied that the requirements of this section have been complied with, shall issue his certificate that the dissolution has been revoked. Upon the issuance of such certificate by the Secretary of State, the revocation of the dissolution shall become effective and the corporation may again carry on its business.
C. Upon the issuance of the certificate by the Secretary of State to which subsection B of this section refers, the provisions of Section 1056 of this title shall govern, and the period of time the corporation was in dissolution shall be included within the calculation of the thirty-day and thirteen-month periods to which subsection C of Section 1056 of this title refers. An election of directors, however, may be held at the special meeting of shareholders to which subsection A of this section refers, and in that event, that meeting of shareholders shall be deemed an annual meeting of shareholders for purposes of subsection C of Section 1056 of this title.
D. If, after three (3) years from the date upon which the dissolution became effective, the name of the corporation is unavailable upon the records of the Secretary of State, then, in such case, the corporation shall not be reinstated under the same name which it bore when its dissolution became effective, but shall adopt and be reinstated under some other name, and in such case the certificate to be filed pursuant to the provisions of this section shall set forth the name borne by the corporation at the time its dissolution became effective and the new name under which the corporation is to be reinstated.
E. Nothing in this section shall be construed to affect the jurisdiction or power of the district court pursuant to the provisions of Section 1100 or 1101 of this title.
Added by Laws 1986, c. 292, § 119, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 30, eff. Nov. 1, 2004.
§18-1120. Renewal, Revival, Extension and Restoration of Certificate of Incorporation.
RENEWAL, REVIVAL, EXTENSION AND RESTORATION
OF CERTIFICATE OF INCORPORATION
A. As used in this section, the term certificate of incorporation includes the charter of a corporation organized pursuant to the provisions of any law of this state.
B. Any corporation, at any time before the expiration of the time limited for its existence and any corporation whose certificate of incorporation has become forfeited by law for nonpayment of taxes and any corporation whose certificate of incorporation has expired by reason of failure to renew it or whose certificate of incorporation has been renewed, but, through failure to comply strictly with the provisions of the Oklahoma General Corporation Act, the validity of whose renewal has been brought into question, may at any time procure an extension, restoration, renewal or revival of its certificate of incorporation, together with all the rights, franchises, privileges and immunities and subject to all of its duties, debts and liabilities which had been secured or imposed by its original certificate of incorporation and all amendments thereto.
C. The extension, restoration, renewal or revival of the certificate of incorporation may be procured by executing, acknowledging and filing a certificate in accordance with the provisions of Section 1007 of this title.
D. The certificate required by the provisions of subsection C of this section shall state:
1. The name of the corporation, which shall be the existing name of the corporation or the name it bore when its certificate of incorporation expired, except as provided for in subsection F of this section;
2. The address, including the street, city and county, of the corporation's registered office in this state and the name of its registered agent at such address;
3. Whether or not the renewal, restoration or revival is to be perpetual and if not perpetual the time for which the renewal, restoration or revival is to continue and, in case of renewal before the expiration of the time limited for its existence, the date when the renewal is to commence, which shall be prior to the date of the expiration of the old certificate of incorporation which it is desired to renew;
4. That the corporation desiring to be renewed or revived and so renewing or reviving its certificate of incorporation was organized pursuant to the laws of this state;
5. The date when the certificate of incorporation would expire, if such is the case, or such other facts as may show that the certificate of incorporation has become forfeited or that the validity of any renewal has been brought into question; and
6. That the certificate for renewal or revival is filed by authority of those who were directors or members of the governing body of the corporation at the time its certificate of incorporation expired or who were elected directors or members of the governing body of the corporation as provided for in subsection H of this section.
E. Upon the filing of the certificate in accordance with the provisions of Section 1007 of this title, the corporation shall be renewed and revived with the same force and effect as if its certificate of incorporation had not become forfeited, or had not expired by limitation. Such reinstatement shall validate all contracts, acts, matters and things made, done and performed within the scope of its certificate of incorporation by the corporation, its officers and agents during the time when its certificate of incorporation was forfeited or after its expiration by limitation, with the same force and effect and to all intents and purposes as if the certificate of incorporation had at all times remained in full force and effect. All real and personal property, rights and credits, which belonged to the corporation at the time its certificate of incorporation became forfeited, or expired by limitation and which were not disposed of prior to the time of its revival or renewal shall be vested in the corporation after the renewal or revival, as fully and amply as they were held by the corporation at and before the time its certificate of incorporation became forfeited, or expired by limitation, and the corporation after its renewal and revival shall be as exclusively liable for all contracts, acts, matters and things made, done or performed in its name and on its behalf by its officers and agents prior to its reinstatement, as if its certificate of incorporation had at all times remained in full force and effect.
F. If, after three (3) years from the date upon which the certificate of incorporation became forfeited for nonpayment of taxes, or expired by limitation, the name of the corporation is unavailable upon the records of the Secretary of State, then in such case the corporation to be renewed or revived shall not be renewed under the same name which it bore when its certificate of incorporation became forfeited, or expired but shall adopt or be renewed under some other name and in such case the certificate to be filed under the provisions of this section shall set forth the name borne by the corporation at the time its certificate of incorporation became forfeited, or expired and the new name under which the corporation is to be renewed or revived.
G. Any corporation that renews or revives its certificate of incorporation pursuant to the provisions of this section shall pay to this state the amounts provided in Sections 1201 through 1214 of Title 68 of the Oklahoma Statutes. No payment made pursuant to this subsection shall reduce the amount of franchise tax due pursuant to the provisions of Sections 1201 through 1214 of Title 68 of the Oklahoma Statutes for the year in which the renewal or revival is effected.
H. If a sufficient number of the last acting officers of any corporation desiring to renew or revive its certificate of incorporation are not available by reason of death, unknown address or refusal or neglect to act, the directors of the corporation or those remaining on the board, even if only one, may elect successors to such officers. In any case where there shall be no directors of the corporation available to renew or revive the certificate of incorporation of the corporation, the shareholders may elect a full board of directors, as provided by the bylaws of the corporation, and the board shall then elect such officers as are provided by law, by the certificate of incorporation or by the bylaws to carry on the business and affairs of the corporation. A special meeting of the shareholders for the purposes of electing directors may be called by any officer, director or shareholder upon notice given in accordance with the provisions of Section 1067 of this title.
I. After a renewal or revival of the certificate of incorporation of the corporation shall have been effected, the provisions of subsection C of Section 1056 of this title shall govern and the period of time the certificate of incorporation of the corporation was forfeited or expired shall be included within the calculation of the thirty-day and thirteen-month periods to which subsection C of Section 1056 of this title refers. A special meeting of shareholders held in accordance with subsection H of this section shall be deemed an annual meeting of shareholders for purposes of subsection C of Section 1056 of this title.
J. Whenever it shall be desired to renew or revive the certificate of incorporation of any corporation organized pursuant to the provisions of the Oklahoma General Corporation Act not for profit and having no capital stock, the governing body shall perform all the acts necessary for the renewal or revival of the charter of the corporation which are performed by the board of directors in the case of a corporation having capital stock. The members of any corporation not for profit and having no capital stock who are entitled to vote for the election of members of its governing body, shall perform all the acts necessary for the renewal or revival of the certificate of incorporation of the corporation which are performed by the shareholders in the case of a corporation having capital stock. In all other respects, the procedure for the renewal or revival of the certificate of incorporation of a corporation not for profit or having no capital stock shall conform, as nearly as may be applicable, to the procedure prescribed in this section for the renewal or revival of the certificate of incorporation of a corporation having capital stock.
Added by Laws 1986, c. 292, § 120, eff. Nov. 1, 1986. Amended by Laws 2004, c. 255, § 31, eff. Nov. 1, 2004.
§181121. Status of Corporation.
STATUS OF CORPORATION
Any corporation desiring to renew, extend and continue its corporate existence, upon complying with the provisions of Section 120 of this act, shall be and continue for the time stated in its certificate of renewal, a corporation and, in addition to the rights, privileges and immunities conferred by its charter, shall possess and enjoy all the benefits of the provisions of the Oklahoma General Corporation Act, which are applicable to the nature of its business, and shall be subject to the restrictions and liabilities prescribed by the provisions of the Oklahoma General Corporation Act imposed on such corporations.
Added by Laws 1986, c. 292, § 121, eff. Nov. 1, 1986.
§181122. Failure of Corporation to Obey Order of Court Appointment of Receiver.
FAILURE OF CORPORATION TO OBEY ORDER OF COURT;
APPOINTMENT OF RECEIVER
Whenever any corporation shall refuse, fail or neglect to obey any order or decree of any court of this state within the time fixed by the court for its observance, such refusal, failure or neglect shall be a sufficient ground for the appointment of a receiver of the corporation by a court of competent jurisdiction. If the corporation is a foreign corporation, such refusal, failure, or neglect shall be a sufficient ground for the appointment of a receiver of the assets of the corporation within this state.
Added by Laws 1986, c. 292, § 122, eff. Nov. 1, 1986.
§181123. Failure of Corporation to Obey Writ of Mandamus Quo Warranto Proceedings for Forfeiture of Charter.
FAILURE OF CORPORATION TO OBEY WRIT OF MANDAMUS; QUO WARRANTO
PROCEEDINGS FOR FORFEITURE OF CHARTER
If any corporation fails to obey the mandate of any peremptory writ of mandamus issued by a court of competent jurisdiction of this state for a period of thirty (30) days after the serving of the writ upon the corporation in any manner as provided by the laws of this state for the service of writs, any party in interest in the proceeding in which the writ of mandamus issued, either himself or through his or its attorney, may file a statement of such fact with the Attorney General of this state, and it shall thereupon be the duty of the Attorney General to immediately commence proceedings in the nature of quo warranto against the corporation in a court of competent jurisdiction, and the court, upon competent proof of such state of facts and proper proceedings had in such proceeding in the nature of quo warranto, shall decree the charter of the corporation forfeited.
Added by Laws 1986, c. 292, § 123, eff. Nov. 1, 1986.
§181124. Actions Against Officers, Directors or Shareholders to Enforce Liability of Corporation Unsatisfied Judgment Against Corporation.
ACTIONS AGAINST OFFICERS, DIRECTORS OR SHAREHOLDERS TO ENFORCE
LIABILITY OF CORPORATION; UNSATISFIED JUDGMENT AGAINST CORPORATION
A. When the officers, directors or shareholders of any corporation shall be liable by the provisions of the Oklahoma General Corporation Act to pay the debts of the corporation, or any part thereof, any person to whom they are liable may have an action, at law or in equity, against any one or more of them, and the petition shall state the claim against the corporation, and the ground on which the plaintiff expects to charge the defendants personally.
B. No suit shall be brought against any officer, director or shareholder for any debt of a corporation of which he is an officer, director or shareholder, until judgment is obtained therefor against the corporation and execution thereon returned unsatisfied.
Added by Laws 1986, c. 292, § 124, eff. Nov. 1, 1986.
§181125. Action by Officer, Director or Shareholder Against Corporation for Corporate Debt Paid.
ACTION BY OFFICER, DIRECTOR OR SHAREHOLDER AGAINST
CORPORATION FOR CORPORATE DEBT PAID
When any officer, director or shareholder shall pay any debt of a corporation for which he is made liable by the provisions of the Oklahoma General Corporation Act, he may recover the amount so paid in an action against the corporation for money paid for its use, and in such action only the property of a corporation shall be liable to be taken, and not the property of any shareholder.
Added by Laws 1986, c. 292, § 124, eff. Nov. 1, 1986.
§181126. Shareholder's Derivative Action Allegation of Stock Ownership.
SHAREHOLDER'S DERIVATIVE ACTION; ALLEGATION OF STOCK OWNERSHIP
In any derivative suit instituted by a shareholder of a corporation, it shall be averred in the petition that the plaintiff was a shareholder of the corporation at the time of the transaction of which he complains or that his stock thereafter devolved upon him by operation of law.
Added by Laws 1986, c. 292, § 126, eff. Nov. 1, 1986.
§181127. Liability of corporation, etc. Impairment by certain transactions.
LIABILITY OF CORPORATION, ETC.;
IMPAIRMENT BY CERTAIN TRANSACTIONS
The liability of a corporation of this state, or of the shareholders, directors or officers thereof, or the rights or remedies of the creditors thereof, or persons doing or transacting business with the corporation, shall not in any way be lessened or impaired by the sale of its assets, or by the increase or decrease in the capital stock of the corporation, or by its merger or consolidation with one or more corporations or by any change or amendment in its certificates of incorporation.
Added by Laws 1986, c. 292, § 127, eff. Nov. 1, 1986.
§181128. Defective Organization of Corporation as Defense.
DEFECTIVE ORGANIZATION OF CORPORATION AS DEFENSE
A. No corporation of this state and no person sued by any such organization shall be permitted to assert the want of legal organization as a defense to any claim.
B. This section shall not be construed to prevent judicial inquiry into the regularity or validity of the organization of a corporation, or its lawful possession of any corporate power it may assert in any other suit or proceeding where its corporate existence or the power to exercise the corporate rights it asserts is challenged, and evidence tending to sustain the challenge shall be admissible in any such suit or proceeding.
Added by Laws 1986, c. 292, § 128, eff. Nov. 1, 1986.
§181129. Usury Pleading by Corporation.
USURY; PLEADING BY CORPORATION
No corporation shall plead any statute against usury in any court of law or equity in any suit instituted to enforce the payment of any bond, note or other evidence of indebtedness issued or assumed by it.
Added by Laws 1986, c. 292, § 129, eff. Nov. 1, 1986.
§18-1130. Foreign corporations; definition; qualification to do business in state; procedure.
FOREIGN CORPORATIONS; DEFINITION; QUALIFICATION
TO DO BUSINESS IN STATE; PROCEDURE
A. As used in the Oklahoma General Corporation Act, the words "foreign corporation" mean a corporation organized pursuant to the laws of any jurisdiction other than this state.
B. No foreign corporation shall do any business in this state, through or by branch offices, agents or representatives located in this state, until it shall have paid to the Secretary of State of this state the fees prescribed in Section 1142 of this title and shall have filed with the Secretary of State:
1. A certificate issued by an authorized officer of the jurisdiction of its incorporation evidencing its corporate existence. If such certificate is in a foreign language, a translation thereof, under oath of the translator, shall be attached thereto;
2. A statement executed by an authorized officer of the corporation and acknowledged in accordance with the provisions of Section 1007 of this title, setting forth:
a. the mailing address of the corporation's principal place of business, wherever located,
b. the name and street address of its additional registered agent in this state, if any, which agent shall be either an individual resident in this state when appointed or another corporation, limited liability company, or limited partnership authorized to transact business in this state,
c. the aggregate number of its authorized shares itemized by classes, par value of shares, shares without par value, and series, if any, within any classes authorized, unless it has no authorized capital,
d. a statement, as of a date not earlier than six (6) months prior to the filing date, of the assets and liabilities of the corporation,
e. the business it proposes to do in this state and a statement that it is authorized to do that business in the jurisdiction of its incorporation, and
f. a statement of the maximum amount of capital such corporation intends and expects to invest in the state at any time during the current fiscal year. "Invested capital" is defined as the value of the maximum amount of funds, credits, securities and property of whatever kind existing at any time during the fiscal year in the State of Oklahoma and used or employed by such corporation in its business carried on in this state.
C. The Secretary of State, upon payment to the Secretary of State of the fees prescribed in Section 1142 of this title, shall issue a sufficient number of certificates under the hand and official seal of the Secretary of State, evidencing the filing of the statement required by the provisions of subsection B of this section. The certificate of the Secretary of State shall be prima facie evidence of the right of the corporation to do business in this state; provided that the Secretary of State shall not issue such certificate unless the name of the corporation is such as to distinguish it upon the records of the Office of the Secretary of State in accordance with the provisions of Section 1141 of this title.
D. A foreign corporation, upon receiving a certificate from the Secretary of State, shall enjoy the same rights and privileges as, but not greater than, a corporation organized under the laws of this state for the purposes set forth in the statement filed by the corporation with the Secretary of State pursuant to which such certificate is issued and, except as otherwise provided in the Oklahoma General Corporation Act, shall be subject to the same duties, restrictions, penalties and liabilities now or hereafter imposed upon a corporation organized under the laws of this state with like purpose and of like character.
Added by Laws 1986, c. 292, § 130, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 9, operative Nov. 1, 1987; Laws 1991, c. 331, § 56, eff. Sept. 1, 1991; Laws 1998, c. 422, § 26, eff. Nov. 1, 1998; Laws 1999, c. 421, § 20, eff. Nov. 1, 1999.
§18-1131. Additional requirements in case of change of name, mailing address, authorized capital or business purpose, or merger, consolidation or conversion.
ADDITIONAL REQUIREMENTS IN CASE OF CHANGE OF NAME, MAILING
ADDRESS, AUTHORIZED CAPITAL OR BUSINESS PURPOSE,
OR MERGER, CONSOLIDATION OR CONVERSION
A. Every foreign corporation admitted to do business in this state which shall change its corporate name, the mailing address of its principal office, or its authorized capital, or shall enlarge, limit or otherwise change the business which it proposes to do in this state, within thirty (30) days after the time the change becomes effective, shall file with the Secretary of State a statement executed by an authorized officer of the corporation and acknowledged in accordance with the provisions of Section 1007 of this title, setting forth:
1. The name of the foreign corporation as it appears on the records of the Secretary of State of this state;
2. The jurisdiction of its incorporation;
3. The date it was authorized to do business in this state;
4. If the name of the foreign corporation has been changed, a statement of the name relinquished, a statement of the new name and a statement that the change of name has been effected pursuant to the laws of the jurisdiction of its incorporation and the date the change was effected;
5. If the mailing address of its principal office has been changed, a statement of the mailing address relinquished and a statement of the new mailing address;
6. If the authorized capital of the corporation has been changed, a restatement of the corporate article which states its amended capitalization, a statement that the change has been effected pursuant to the laws of the jurisdiction of its incorporation and the date the change was effected;
7. If the business it proposes to do in this state is to be enlarged, limited or otherwise changed, a statement reflecting such change and a statement that it is authorized to do such business in the jurisdiction of its incorporation; and
8. If the name and/or address of the additional agent has changed, a statement of the new name and address.
B. Whenever a foreign corporation authorized to transact business in this state shall merge with, consolidate into or convert to another corporation or business entity, within thirty (30) days after the merger, consolidation or conversion becomes effective, it shall file a certificate, issued by the proper officer of the state or country of its incorporation, attesting to the occurrence of the event. If the merger, consolidation or conversion has changed the corporate name, mailing address, or authorized capital of the foreign corporation or has enlarged, limited or otherwise changed the business it proposes to do in this state, it shall also comply with the provisions of subsection A of this section.
C. Whenever a foreign corporation authorized to transact business in this state ceases to do business in this state because of a merger, consolidation or conversion, it shall comply with the provisions of Section 1135 of this title.
D. The Secretary of State shall be paid the fee prescribed in Section 1142 of this title for filing and indexing each statement or certificate required by the provisions of subsection A or B of this section.
Added by Laws 1986, c. 292, § 131, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 10, emerg. eff. June 24, 1987; Laws 1996, c. 69, § 6, eff. Nov. 1, 1996; Laws 2004, c. 255, § 32, eff. Nov. 1, 2004.
§181132. Exceptions to Requirements.
EXCEPTIONS TO REQUIREMENTS
A. No foreign corporation shall be required to comply with the provisions of Sections 130 and 131 of this act, if:
1. it is the mail order or a similar business, merely receiving orders by mail or otherwise in pursuance of letters, circulars, catalogs, or other forms of advertising, or solicitation, accepting the orders outside this state, and filing them with goods shipped into this state; or
2. it employs salesmen, either resident or traveling, to solicit orders in this state, either by display of samples or otherwise, whether or not maintaining sales offices in this state, all orders being subject to approval at the offices of the corporation without this state, and all goods applicable to the orders being shipped in pursuance thereof from without this state to the vendee or to the seller or his agent for delivery to the vendee, and if any samples kept within this state are for display or advertising purposes only, and no sales, repairs, or replacements are made from stock on hand in this state; or
3. it sells, by contract consummated outside this state, and agrees by the contract, to deliver into this state, machinery, plants or equipment, the construction, erection or installation of which within this state requires the supervision of technical engineers or skilled employees performing services not generally available, and as a part of the contract of sale agrees to furnish such services, and such services only, to the vendee at the time of construction, erection or installation; or
4. its business operations within this state are wholly interstate in character; or
5. it is an insurance company doing business in this state; or 6. it creates, as borrower or lender, or acquires, evidences of debt, mortgages or liens on real or personal property; or
7. it secures or collects debts or enforces any rights in property securing the same.
B. The provisions of this section shall have no application to the question of whether any foreign corporation is:
1. subject to service of process and suit in this state pursuant to the provisions of Section 136 of this act or any other law of this state; or
2. subject to the taxation laws of this state.
Added by Laws 1986, c. 292, § 132, eff. Nov. 1, 1986.
§18-1133. Change of registered agent upon whom process may be served.
CHANGE OF REGISTERED AGENT UPON WHOM PROCESS MAY BE SERVED
A. 1. Any foreign corporation which has qualified to do business in this state may change its registered agent and substitute therefor another registered agent by filing a certificate with the Secretary of State, acknowledged in accordance with the provisions of Section 1007 of this title, setting forth:
a. the name and street address of its registered agent designated in this state upon whom process directed to the corporation may be served, and
b. a revocation of all previous appointments of agent for such purposes.
2. The registered agent shall be either an individual residing in this state when appointed or a corporation, limited liability company, or limited partnership authorized to transact business in this state.
B. Any individual or corporation designated by a foreign corporation as its registered agent for service of process may resign by filing with the Secretary of State a signed statement that the agent is unwilling to continue to act as the registered agent of the corporation for service of process, including in the statement the post office address of the main or headquarters office of the foreign corporation, but the resignation shall not become effective until thirty (30) days after the statement is filed. The statement shall be acknowledged by the registered agent and shall contain a representation that written notice of resignation was given to the corporation at least thirty (30) days prior to the filing of the statement by mailing or delivering the notice to the corporation at its address given in the statement.
C. If any agent designated and certified as required by the provisions of Section 1130 of this title shall die, remove himself from this state or resign, then the foreign corporation for which the agent had been so designated and certified, within ten (10) days after the death, removal or resignation of its agent, shall substitute, designate and certify to the Secretary of State, the name of another registered agent for the purposes of the Oklahoma General Corporation Act, and all process, orders, rules and notices may be served on or given to the substituted agent with like effect.
Added by Laws 1986, c. 292, § 133, eff. Nov. 1, 1986. Amended by Laws 1996, c. 69, § 7, eff. Nov. 1, 1996; Laws 1998, c. 422, § 27, eff. Nov. 1, 1998; Laws 1999, c. 421, § 21, eff. Nov. 1, 1999.
§181134. Violations and penalties.
VIOLATIONS AND PENALTIES
A. Any foreign corporation doing business of any kind in this state without first having complied with any provision of the Oklahoma General Corporation Act applicable to it, shall be fined not less than Two Hundred Dollars ($200.00) nor more than Five Hundred Dollars ($500.00) for each such offense. Any agent of any foreign corporation that shall do any business in this state for any foreign corporation before the foreign corporation has complied with any provision of the Oklahoma General Corporation Act applicable to it, shall be fined not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00) for each such offense.
B. If any foreign corporation fails to file or cause to be filed a certificate as provided for in paragraphs 11 and 13 of subsection A of Section 1142 of this title or fails to pay to the Secretary of State any additional fees shown to be due by the certificate provided for in paragraph 13 of subsection A of Section 1142 of this title, the corporation:
1. may be ousted from this state by the Secretary of State and its certificate of authority to do business in this state revoked and canceled. Before such revocation the Secretary of State shall give not less than thirty (30) days' notice sent by mail duly addressed to such corporation at its principal place of business or last address shown on the records of the Secretary of State of the Secretary of State's intent to revoke the corporation's authority to transact business in this state; and
2. after notice required in paragraph 1 above, shall be subject to a penalty and shall forfeit to the state for each day it fails to comply with the provisions of this subsection, the sum of Twentyfive Dollars ($25.00) per day but not more than Five Hundred Dollars ($500.00) for each such offense.
C. All fines and penalties provided for by this section may be recovered in a suit brought therefor by the Attorney General, in the name of the state, against the corporation, in any district court of the state. Fines and penalties received or collected pursuant to this section by the Attorney General as a result of an action brought in the name of the state by the Attorney General, shall be paid into the State Treasury provided that twentyfive percent (25%) thereof shall be deposited in the Attorney General's Evidence Fund. Such fines and penalties shall be properly accounted for and paid monthly by the Secretary of State to the State Treasurer for deposit into the General Revenue Fund.
Added by Laws 1986, c. 292, § 134, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 11, emerg. eff. June 24, 1987; Laws 1989, c. 169, § 1, eff. Nov. 1, 1989; Laws 1991, c. 331, § 57, eff. Sept. 1, 1991.
§18-1135. Withdrawal of foreign corporation from state; Procedure; Service of process on Secretary of State.
WITHDRAWAL OF FOREIGN CORPORATION FROM STATE;
PROCEDURE; SERVICE OF PROCESS ON SECRETARY OF STATE
A. Any foreign corporation which shall have qualified to do business in this state pursuant to the provisions of Section 1130 of this title, may surrender its authority to do business in this state and may withdraw therefrom by filing with the Secretary of State:
1. A certificate, executed by an authorized officer of the corporation and acknowledged in accordance with the provisions of Section 1007 of this title, stating that it surrenders its authority to transact business in Oklahoma and withdraws therefrom; and stating the address to which the Secretary of State may mail any process against the corporation that may be served upon the Secretary of State; or
2. A copy of a certificate of dissolution issued by the proper official of the state or other jurisdiction of its incorporation, together with a certificate, which shall be executed in accordance with the provisions of paragraph 1 of this subsection, stating the address to which the Secretary of State may mail any process against the corporation that may be served upon the Secretary of State; or
3. A copy of an order or decree of dissolution made by any court of competent jurisdiction or other competent authority of the state or other jurisdiction of its incorporation, certified to be a true copy under the hand of the clerk of the court or other official body, and the official seal of the court or official body or clerk thereof, together with a certificate executed in accordance with the provisions of paragraph 1 of this subsection, stating the address to which the Secretary of State may mail any process against the corporation that may be served upon the Secretary of State.
B. The Secretary of State, upon payment to the Secretary of State of the fees prescribed in Section 1142 of this title, shall issue a sufficient number of certificates, under the hand and official seal of the Secretary of State, evidencing the surrender of the authority of the corporation to do business in this state and its withdrawal therefrom.
C. Upon the issuance of the certificates by the Secretary of State, the appointment of the registered agent of the corporation in this state, upon whom process against the corporation may be served, shall be revoked, and service on the corporation may be made by serving the Secretary of State as its agent as provided in Section 2004 of Title 12 of the Oklahoma Statutes.
Added by Laws 1986, c. 292, § 135, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 12, operative Nov. 1, 1987; Laws 1988, c. 323, § 28, eff. Nov. 1, 1988; Laws 1996, c. 69, § 8, eff. Nov. 1, 1996.
§181136. Service of process on nonqualifying foreign corporations.
SERVICE OF PROCESS ON NONQUALIFYING FOREIGN CORPORATIONS
A. If any foreign corporation shall transact business in this state without having qualified to do business in accordance with the provisions of Section 1130 of this title, service on the corporation may be made by serving the Secretary of State as its agent as provided in Section 2004 of Title 12 of the Oklahoma Statutes.
B. The provisions of Section 1132 of this title shall not apply in determining whether any foreign corporation is transacting business in this state within the meaning of this section; and "the transaction of business" or "business transacted in this state", by any such foreign corporation, whenever those words are used in this section, shall mean the course or practice of carrying on any business activities in this state, including, without limiting the generality of the foregoing, the solicitation of business or orders in this state. The provisions of this section shall not apply to any insurance company doing business in this state.
Added by Laws 1986, c. 292, § 136, eff. Nov. 1, 1986. Amended by Laws 1988, c. 323, § 29, eff. Nov. 1, 1988.
§181137. Actions By and Against Unqualified Foreign Corporations.
ACTIONS BY AND AGAINST UNQUALIFIED FOREIGN CORPORATIONS
A. A foreign corporation which is required to comply with the provisions of Sections 130 and 131 of this act and which has done business in this state without authority shall not maintain any action or special proceeding in this state unless and until such corporation has been authorized to do business in this state and has paid to the state all fees, penalties and franchise taxes for the years or parts thereof during which it did business in this state without authority. This prohibition shall not apply to any successor in interest of such foreign corporation.
B. The failure of a foreign corporation to obtain authority to do business in this state shall not impair the validity of any contract or act of the foreign corporation or the right of any other party to the contract to maintain any action or special proceeding thereon, and shall not prevent the foreign corporation from defending any action or special proceeding in this state.
Added by Laws 1986, c. 292, § 137, eff. Nov. 1, 1986.
§181138. Foreign Corporations Doing Business Without Having Qualified Injunctions.
FOREIGN CORPORATIONS DOING BUSINESS
WITHOUT HAVING QUALIFIED; INJUNCTIONS
The district court shall have jurisdiction to enjoin any foreign corporation, or any agent thereof, from transacting any business in this state if such corporation has failed to comply with any provision of the Oklahoma General Corporation Act applicable to it or if such corporation has secured a certificate of the Secretary of State pursuant to the provisions of Section 130 of this act on the basis of false or misleading representations. The Attorney General, upon his own motion or upon the relation of proper parties, shall proceed for this purpose by petition in any county in which such corporation is doing business.
Added by Laws 1986, c. 292, § 138, eff. Nov. 1, 1986.
§181139. Reservation of Corporate Name.
RESERVATION OF CORPORATE NAME
A. The exclusive right to the use of a corporate name, in good faith, may be reserved by:
1. Any person intending to form a corporation under Title 18 of the Oklahoma Statutes; or
2. Any corporation organized under the laws of this state intending to change its name; or
3. Any foreign corporation intending to qualify to transact business in this state under Title 18 of the Oklahoma Statutes; or
4. Any foreign corporation qualified to transact business in this state intending to change its name; or
5. Any person intending to organize a foreign corporation and intending to have such corporation qualified to transact business in this state under the laws of this state; or
6. Any corporation whose charter has expired or has been forfeited intending to renew or revive the corporation under Title 18 of the Oklahoma Statutes.
B. Such reservation shall be made by filing in the Office of the Secretary of State an application to reserve a specified corporate name. If the Secretary of State finds that such name is available for corporate use, he shall reserve the same for the exclusive use of such applicant for a period of sixty (60) days.
C. The right to the exclusive use of a specified corporate name so reserved may be transferred to any other person by filing in the Office of the Secretary of State a notice of such transfer, executed by the person for whom such name was reserved and specifying the name and address of the transferee.
Added by Laws 1986, c. 292, § 139, eff. Nov. 1, 1986.
§18-1140. Trade names.
TRADE NAMES
A. A corporation or other business entity doing business in this state under any name other than its legal name shall file a report with the Secretary of State setting forth the legal name of the corporation or business entity, the jurisdiction of organization of the corporation or business entity, the trade name under which the business is carried on, a brief description of the kind of business transacted under the name, and the address wherein the business is to be carried on. The report shall be executed by a representative of the business entity authorized to sign on its behalf. In the case of a corporation, the report shall be signed and filed in accordance with Section 1007 of this title. The trade name adopted shall be such as to be distinguishable upon the records in the Office of the Secretary of State from:
1. Names of other business entities organized under the laws of this state and filed with the Secretary of State then existing or which existed at any time during the preceding three (3) years; or
2. Names of foreign business entities qualified to do business in this state and filed with the Secretary of State then existing or which existed at any time during the preceding three (3) years; or
3. Trade names or fictitious names filed with the Secretary of State; or
4. Names reserved with the Secretary of State.
B. As used in this section, "business entity" means a corporation, a business trust, a common law trust, a limited liability company, or any unincorporated business, including any form of partnership.
Added by Laws 1986, c. 292, § 140, eff. Nov. 1, 1986. Amended by Laws 1995, c. 339, § 15, eff. Nov. 1, 1995; Laws 1996, c. 69, § 9, eff. Nov. 1, 1996; Laws 1999, c. 421, § 22, eff. Nov. 1, 1999.
§18-1140.1. Withdrawal of trade name.
WITHDRAWAL OF TRADE NAME
In the event a corporation or other business entity elects to cease doing business in this state under a trade name, it shall file a report, in duplicate, with the Secretary of State withdrawing such trade name. The report shall be executed by a party duly authorized to sign on behalf of the corporation or other business entity. In the case of a corporation, the report shall be acknowledged and filed in accordance with Section 1007 of this title.
Added by Laws 1996, c. 69, § 10, eff. Nov. 1, 1996.
§18-1140.2. Transfer of trade name.
TRANSFER OF TRADE NAME
In the event a corporation or other business entity elects to transfer ownership of a trade name to another corporation or business entity, it shall file a report, in duplicate, with the Secretary of State, specifying such transfer. The report shall be executed by a party duly authorized to sign on behalf of the corporation or other business entity. In the case of a corporation, the report shall be acknowledged and filed in accordance with Section 1007 of this title. The report shall contain the name of the corporation to which the trade name is being transferred, and the address wherein such business is to be carried on.
Added by Laws 1996, c. 69, § 11, eff. Nov. 1, 1996.
§18-1140.3. Amendment of trade name report.
AMENDMENT OF TRADE NAME REPORT
A. A trade name report shall be amended when:
1. There is a false or erroneous statement in the trade name report;
2. There is a change in the kind of business transacted under the trade name; or
3. There is a change in or an additional address where the business is to be carried on under the trade name.
B. An amended trade name report shall set forth the trade name and specify the amendment therein. The report shall be executed by a party duly authorized to sign on behalf of the corporation or other business entity. In the case of a corporation, the report shall be acknowledged and filed in accordance with Section 1007 of Title 18 of the Oklahoma Statutes.
Added by Laws 1999, c. 421, § 23, eff. Nov. 1, 1999.
§18-1141. Prohibition on use of same or indistinguishable names; Exceptions.
PROHIBITION ON USE OF SAME OR INDISTINGUISHABLE NAMES; EXCEPTIONS
The Secretary of State shall not accept for reservation or filing a statement or certificate containing a name which is the same as or indistinguishable from the name of any business entity, as defined in Section 15 of this act, trade name, fictitious name, or reserved name filed with the Secretary of State unless one of the following is filed with the Secretary of State:
1. The written consent of the business entity or holder of the trade name, fictitious name, or reserved name to use the same or indistinguishable name with the addition of one or more words to make that name distinguishable upon the records of the Secretary of State, except that the addition of words to make the name distinguishable shall not be required where the written consent states that the consenting entity is about to change its name, cease to do business, withdraw from the state, or be wound up;
2. A certified copy of a final decree of a court of competent jurisdiction establishing the prior right of the business entity or holder of a reserved name, trade name, or fictitious name to the use of the name in this state;
3. In the case of any foreign business entity having a name prohibited by this section which intends to qualify to transact business within this state, a resolution adopting a fictitious name not prohibited by this section, which shall be used to the exclusion of its true name when transacting business within this state. Such resolution shall be executed by a representative or representatives of the business entity duly authorized to sign on its behalf.
Added by Laws 1986, c. 292, § 141, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 13, operative Nov. 1, 1987; Laws 1995, c. 339, § 16, eff. Nov. 1, 1995; Laws 1996, c. 69, § 12, eff. Nov. 1, 1996.
§18-1142. Filing and other service fees.
FILING AND OTHER SERVICE FEES
A. The Secretary of State, for services performed in the Office of the Secretary of State and for expense of mailing, shall charge and collect the following fees:
1. For any report, document, or other paper required to be filed in the Office of the Secretary of State, a fee of Twenty-five Dollars ($25.00);
2. For reservation of corporate name, a fee of Ten Dollars ($10.00);
3. For issuing extra copies of any certificate not requiring any extra filing of papers or documents of any kind, a fee of Ten Dollars ($10.00);
4. For issuing any other certificate, a fee of Ten Dollars ($10.00);
5. For receiving a filing or indexing the annual certificate of a foreign corporation doing business in this state, or both when filed together, a fee of Ten Dollars ($10.00);
6. For preclearance of any document for filing, a fee of Fifty Dollars ($50.00);
7. For each service of process made upon and accepted by the Secretary of State, a fee of Twenty-five Dollars ($25.00);
8. For preparing and providing a report of a record search, a fee of Five Dollars ($5.00);
9. For filing and issuing certificates of incorporation, the fee shall be onetenth of one percent (1/10 of 1%) of the authorized capital stock of such corporation; provided, that the minimum fee for any such service shall be Fifty Dollars ($50.00); provided further, that not for profit corporations shall only be required to pay a fee of Twentyfive Dollars ($25.00);
10. For filing and issuing amended certificates of incorporation or certificates of restatement, reorganization, revival, extension or dissolution, the fee shall be Fifty Dollars ($50.00); provided, however, not for profit corporations shall only be required to pay a fee of Twentyfive Dollars ($25.00). If an amendment shall provide for an increase in authorized capital in excess of Fifty Thousand Dollars ($50,000.00), the filing fee shall be an amount equal to onetenth of one percent (1/10 of 1%) of such increase;
11. For filing and issuing certificates of consolidation, if the resulting corporation is a domestic corporation, or merger, if the surviving corporation is a domestic corporation, the fee shall be One Hundred Dollars ($100.00); provided, however, not-for-profit corporations shall only be required to pay a fee of Twenty-five Dollars ($25.00). If the merger or consolidation shall increase the authorized capital of the surviving or resulting corporation in excess of Fifty Thousand Dollars ($50,000.00), the filing fee shall be an amount equal to one-tenth of one percent (1/10 of 1%) of such increase;
12. For filing and issuing a certificate of conversion, whenever the resulting corporation is a domestic corporation, the minimum fee shall be One Hundred Dollars ($100.00); provided, however, if the certificate of incorporation of the resulting corporation authorizes capital stock in excess of Fifty Thousand Dollars ($50,000.00), the filing fee shall be an amount equal to one-tenth of one percent (1/10 of 1%) of such authorized capital. If the resulting domestic corporation is not for profit, it shall only be required to pay a fee of Fifty Dollars ($50.00);
13. For issuing a certificate to a foreign corporation to do business in this state, and filing a certificate and statement of such corporation required pursuant to the provisions of Section 1130 of this title, the fee shall be onetenth of one percent (1/10 of 1%) of the maximum amount of capital invested by such corporation in the state at any time during the fiscal year such certificate is issued to any such foreign corporation; provided, that the minimum fee for any such service shall be Three Hundred Dollars ($300.00); provided further, that no such corporation shall be required to pay a fee on an amount in excess of its authorized capital;
14. For amended certificate of qualification of a foreign corporation, a fee of Two Hundred Dollars ($200.00); provided, however, for a certificate solely reflecting a change of mailing address, a fee of Ten Dollars ($10.00);
15. For filing a certificate of consolidation, if the resulting corporation is a foreign corporation, or merger, if the surviving corporation is a foreign corporation, the fee shall be One Hundred Dollars ($100.00);
16. For filing a certificate of withdrawal of a foreign corporation doing business in this state, a fee of One Hundred Dollars ($100.00);
17. Every foreign corporation on the anniversary of its qualification in this state each year, shall cause to be filed with the Secretary of State a certificate of its president, vicepresident or other managing officers, in which shall be stated and shown the maximum amount of capital the corporation had invested in the state at any time subsequent to the issuance to it of a certificate to do business in this state and the amount of capital previously paid upon. If the amount of capital so invested as shown by said certificate exceeds the amount formerly paid upon, the corporation, at the time of filing said certificate, shall pay to the Secretary of State an additional fee equal to onetenth of one percent (1/10 of 1%) of the amount of such excess capital so invested by the corporation in the state; provided, that no such corporation shall be required to pay a filing fee on an amount in excess of its authorized capital, or to file the certificate provided for in this paragraph after it shall have paid a filing fee on its total authorized capitalization;
18. For acting as the registered agent, a fee of One Hundred Dollars ($100.00) payable on the first day of July each year, and if not paid before the next ensuing September 1st, the Oklahoma Tax Commission shall suspend and forfeit the charter of the delinquent corporation pursuant to the procedures prescribed in Section 1212 of Title 68 of the Oklahoma Statutes. The Oklahoma Tax Commission shall collect and audit the registered agent fee authorized pursuant to this paragraph in conjunction with the collection and audit of franchise taxes as provided for in Sections 1201 through 1214 of Title 68 of the Oklahoma Statutes. All monies received by the Oklahoma Tax Commission pursuant to the provisions of this paragraph shall be paid to the State Treasurer for deposit in the General Revenue Fund; and
19. For any response by means of telecommunications to inquiries regarding information required to be maintained by the Secretary of State, a fee of Five Dollars ($5.00), unless otherwise provided. Fees collected pursuant to this paragraph shall be deposited in the Revolving Fund for the Office of the Secretary of State.
B. Except as otherwise provided by law, fees paid to the Secretary of State in accordance with the provisions of the Oklahoma General Corporation Act shall be properly accounted for and shall be paid monthly to the State Treasurer for deposit in the General Revenue Fund.
C. For any certificate supplied by the county clerk, such clerk shall receive a fee of One Dollar ($1.00). Such fees shall be properly accounted for and shall be paid into the county treasury in the same manner as other fees collected by the county clerk for the filing and recording of mortgages and deeds.
D. In any court proceeding pursuant to the provisions of the Oklahoma General Corporation Act requiring the filing of any decree, order, report or other document in the Office of the Secretary of State or in the office of any county clerk, in addition to the usual court costs and the costs for filing in the office of the clerk of the court, fees equal to the amounts provided for in this section for such required filing shall be collected as costs in such proceedings and such amount shall be forwarded to the Secretary of State and the county clerk with the papers to be filed.
E. The provisions contained in this section relating to the payment of incorporation fees by foreign corporations are not intended and shall not be construed to relieve such corporations, where applicable, of the payment of the annual corporate franchise tax to the Oklahoma Tax Commission.
F. For the purposes of computing the fees to be collected by the Secretary of State pursuant to the provisions of this section, each share without par value shall be treated the same as a share with a par value of Fifty Dollars ($50.00), and the fees thereon shall be collected accordingly.
G. Payments for any required fees except as otherwise provided by law may be made as follows:
1. By the applicant's personal or company check, cash, or money order; or
2. By a nationally recognized credit card issued to the applicant. The Secretary of State may add a convenience fee, not to exceed four percent (4%) of the amount of such payment for services provided through telephonic or electronic media. For purposes of this paragraph, "nationally recognized credit card" means any instrument or device, whether known as a credit card, credit plate, charge plate, or by any other name, issued with or without fee by an issuer for the use of the cardholder in obtaining goods, services, or anything else of value on credit which is accepted by over one thousand merchants in this state. The Secretary of State shall determine which nationally recognized credit cards will be accepted; provided, however, the Secretary of State must ensure that no loss of state revenue will occur by the use of such card. The convenience fee collected pursuant to this paragraph shall be credited to the Revolving Fund for the Office of the Secretary of State, as established in Section 276.1 of Title 62 of the Oklahoma Statutes.
Added by Laws 1986, c. 292, § 142, eff. Nov. 1, 1986. Amended by Laws 1987, c. 146, § 14, operative Nov. 1, 1987; Laws 1988, c. 323, § 30, eff. Nov. 1, 1988; Laws 1989, c. 169, § 2, eff. Nov. 1, 1990; Laws 1990, c. 264, § 92, eff. Nov. 1, 1990; Laws 1991, c. 331, § 58, eff. Sept. 1, 1991; Laws 1993, c. 273, § 10, emerg. eff. May 27, 1993; Laws 1994, c. 267, § 1, eff. July 1, 1994; Laws 2001, c. 406, § 5, emerg. eff. June 4, 2001.
§18-1142.1. Fees for telephone assistance.
FEES FOR TELEPHONE ASSISTANCE
The Secretary of State is authorized to charge fees as provided by law for a telephone assistance service to provide information concerning records retained by the Secretary of State.
Added by Laws 1990, c. 264, § 95, operative July 1, 1990.
§181143. Duplication of Oklahoma General Corporation Act by Secretary of State Distribution.
DUPLICATION OF OKLAHOMA GENERAL CORPORATION ACT BY
SECRETARY OF STATE; DISTRIBUTION
The Secretary of State may have printed, from time to time as he deems necessary, pamphlet copies of the Oklahoma General Corporation Act for distribution to persons and corporations desiring the same for a sum not exceeding the cost of printing. The money received from the sale of the copies shall be disposed of as are other fees of the Office of the Secretary of State. Nothing in this section shall be construed to prevent the free distribution of single pamphlet copies of the Oklahoma General Corporation Act by the Secretary of State.
Added by Laws 1986, c. 292, § 143, eff. Nov. 1, 1986.
§181144. Required filing with the county clerk following a merger or consolidation, or a change of corporate name.
REQUIRED FILING WITH THE COUNTY CLERK
FOLLOWING A MERGER OR CONSOLIDATION,
OR A CHANGE OF CORPORATE NAME
A. A certified copy of the following documents, as applicable, shall be filed with the county clerk of each county in which a surviving or resulting corporation to a merger or consolidation, or a corporation whose name was changed, has a recorded interest in real property:
1. a certificate or agreement of merger or consolidation filed with the Secretary of State in accordance with the provisions of Section 1081, 1082, 1084, 1085, 1086 or 1087 of Title 18 of the Oklahoma Statutes;
2. a certificate of ownership and merger filed with the Secretary of State as provided in Section 1083 of Title 18 of the Oklahoma Statutes;
3. an amendment to the certificate of incorporation effecting a change of name pursuant to Section 1076, 1077 or 1131 of Title 18 of the Oklahoma Statutes.
B. The provisions of this section shall have prospective application only.
Added by Laws 1987, c. 31, § 2, eff. Nov. 1, 1987.
§181145. Control shares - definition.
CONTROL SHARES; DEFINITION
As used in Sections 1145 through 1155 of this title, "control shares" means issued and outstanding shares of an issuing public corporation that, except for Sections 1145 through 1155 of this title, would have voting power, when added to all other shares of the issuing public corporation owned of record or beneficially by an acquiring person or in respect to which that acquiring person may exercise or direct the exercise of voting power, that would entitle the acquiring person, immediately after acquisition of the shares, directly or indirectly, to exercise or direct the exercise of the voting power of the issuing public corporation in the election of directors within any of the following ranges of voting power:
1. Onefifth (1/5) or more but less than onethird (1/3) of all voting power;
2. Onethird (1/3) or more but less than a majority of all voting power; or
3. A majority or more of all voting power.
Added by Laws 1987, c. 146, § 15, emerg. eff. June 24, 1987. Amended by Laws 1991, c. 53, § 3, eff. Sept. 1, 1991.
§181146. Control share acquisition - definition.
CONTROL SHARE ACQUISITION; DEFINITION
A. As used in Sections 1145 through 1155 of this title, "control share acquisition" means acquisition by any person of ownership of, or the power to direct the exercise of voting power with respect to, control shares.
B. A person who acquires shares in the ordinary course of business for the benefit of others in good faith and not for the purpose of circumventing Sections 1145 through 1155 of this title has not made a control share acquisition of shares in respect of which that person is able to exercise or direct the exercise of votes only after requesting further instruction from others.
C. The acquisition of any control shares does not constitute a control share acquisition if the acquisition is made in good faith and not for the purpose of circumventing Sections 1145 through 1155 of this title in any of the following circumstances:
1. At a time when the corporation was not subject to Sections 1145 through 1155 of this title;
2. Pursuant to a contract entered into at a time when the corporation was not subject to Sections 1145 through 1155 of this title;
3. Pursuant to the laws of descent and distribution;
4. Pursuant to the satisfaction of a pledge or other security interest;
5. Pursuant to a merger, consolidation, or share acquisition effected in compliance with Section 1081, 1082, 1083, 1090.1 or 1090.2 of this title, if the issuing public corporation is a party to the agreement of merger, consolidation, or share acquisition;
6. By a donee receiving the shares pursuant to an inter vivos gift;
7. By a person of additional shares within the range of voting power for which such person has received approval pursuant to Section 1153 of this title or within the range of voting power resulting from shares acquired in a transaction described in this subsection;
8. An increase in voting power resulting from any action taken by the issuing public corporation, provided the person whose voting power is thereby affected is not an affiliate of the corporation;
9. Pursuant to the solicitation of proxies subject to Regulation 14A under the Securities Exchange Act of 1934, 15 U.S.C. Section 78a et seq., as amended, or in the case of an issuing public corporation which is not subject to such Regulation 14A, the solicitation of proxies in accordance with the laws of the State of Oklahoma;
10. Pursuant to a transfer between or among immediate family members, or between or among persons under direct common control. An "immediate family member" is any relative or spouse of a person, or any relative of such spouse, who has the same home as such person; or
11. From any person whose previous acquisition of shares would have constituted a control share acquisition but for paragraphs 1 through 10 of this subsection, provided the acquisition does not result in the acquiring person holding voting power within a higher range of voting power than that of the person from whom the control shares were acquired.
Added by Laws 1987, c. 146, § 16, emerg. eff. June 24, 1987. Amended by Laws 1990, c. 328, § 7, eff. Sept. 1, 1990; Laws 1991, c. 53, § 4, eff. Sept. 1, 1991.
§181147. Interested shares Definition.
INTERESTED SHARES; DEFINITION
As used in Sections 1145 through 1155 of this title "interested shares" means the shares of an issuing public corporation in respect of which any of the following persons may exercise or direct the exercise, as of the applicable record date, of the voting power of the corporation in the election of directors other than solely by the authority of a revocable proxy:
1. The acquiring person;
2. Any officer of the issuing public corporation; or
3. Any employee of the issuing public corporation who is also a director of the corporation.
Added by Laws 1987, c. 146, § 17, emerg. eff. June 24, 1987. Amended by Laws 1990, c. 328, § 8, eff. Sept. 1, 1990; Laws 1991, c. 53, § 5, eff. Sept. 1, 1991.
§181148. Issuing public corporation - definition.
ISSUING PUBLIC CORPORATION; DEFINITION
A. As used in Sections 1145 through 1155 of this title, "issuing public corporation" means a domestic corporation that has:
1. Any class of securities registered pursuant to Section 12 or is subject to Section 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. Section 78a et seq., as amended;
2. One thousand (1,000) or more shareholders; and
3. Either:
a. more than ten percent (10%) of its shareholders resident in Oklahoma,
b. more than ten percent (10%) of its shares owned by Oklahoma residents, or
c. ten thousand (10,000) shareholders resident in Oklahoma.
B. The residence of a shareholder is presumed to be the address appearing in the records of the corporation.
C. Shares held by banks except as trustee or guardian, brokers or nominees shall be disregarded for purposes of calculating the percentages or numbers described in this section.
D. A domestic corporation that is not an issuing public corporation but that has one hundred (100) or more shareholders of record and meets one of the requirements set forth in subsection A of this section, or an issuing public corporation to which Sections 1145 through 1155 of this title do not apply, may elect to be subject to Sections 1145 through 1155 of this title as an issuing public corporation by amending its certificate of incorporation to provide that Sections 1145 through 1155 of this title shall apply to the corporation as of a specified date and filing the amendment with the Secretary of State on or before such date.
E. A corporation which would be an issuing public corporation under subsection A of this section may elect not to be subject to Sections 1145 through 1155 of this title before a control share acquisition occurs or an acquiring person statement is delivered:
1. By amending its certificate of incorporation to provide that Sections 1145 through 1155 of this title shall not apply to the corporation as of a specified date and filing the amendment with the Secretary of State before such date; or
2. By action of its board of directors adopting an amendment to its bylaws within ninety (90) days of the effective date of this act expressly providing that Sections 1145 through 1155 of this title shall not apply to the corporation, which amendment shall not be further amended by the board of directors.
Added by Laws 1987, c. 146, § 18, emerg. eff. June 24, 1987. Amended by Laws 1988, c. 323, § 31, eff. Nov. 1, 1988; Laws 1990, c. 328, § 9, eff. Sept. 1, 1990; Laws 1991, c. 53, § 6, eff. Sept. 1, 1991.
§18-1148A. Other definitions.
OTHER DEFINITIONS
As used in Sections 1145 through 1155 of Title 18 of the Oklahoma Statutes:
1. "Acquiring person" means a person who makes or proposes to make, or persons acting as a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, 15 U.S.C. Section 78a et seq., as amended, who make or propose to make, a control share acquisition; provided, "acquiring person" does not include the issuing public corporation;
2. "Affiliate" means a person who directly or indirectly controls the corporation. For the purpose of this paragraph, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract, or otherwise. A person's beneficial ownership of ten percent (10%) or more of all voting power of a corporation, except a person holding voting power in good faith as an agent, bank, broker, nominee, custodian or trustee for one or more beneficial owners who do not individually or as a group control the corporation, creates a presumption that the person controls the corporation;
3. "All voting power" means the aggregate voting power that the shareholders of an issuing public corporation would have in the election of directors generally, except for Sections 1145 through 1155 of Title 18 of the Oklahoma Statutes;
4. "Beneficial ownership" shall have the same meaning ascribed to such term by Rule 13d-3 under the Securities Exchange Act of 1934, 15 U.S.C., Section 78a et seq., as amended; and
5. "Person" means any individual, corporation, partnership, unincorporated association or other entity.
Added by Laws 1991, c. 53, § 7, eff. Sept. 1, 1991.
§181149. Law governing control share voting rights.
LAW GOVERNING CONTROL SHARE VOTING RIGHTS
After a control share acquisition occurs, control shares of the acquiring person have only such voting rights as are conferred by this section.
1. Subject to the provisions of paragraphs 2 through 4 of this section, the voting power of control shares having voting power of one-fifth (1/5) or more of all voting power is reduced to zero unless the shareholders of the issuing public corporation approve a resolution pursuant to the procedure set forth in Section 1153 of this title according the shares the same voting rights as they had before they became control shares.
2. Except as provided in subsection A of Section 1153 of this title, the voting power of control shares representing voting power of less than one-fifth (1/5) of all voting power is not affected by Sections 1145 through 1155 of this title.
3. If control shares of the acquiring person previously have been accorded, pursuant to the procedure set forth in Section 1153 of this title, the same voting rights they had before they became control shares, or if such control shares were acquired in a transaction excluded from the definition of "control share acquisition", then only the voting power of control shares acquired in a subsequent control share acquisition by such acquiring person within a higher range of voting power shall be reduced to zero.
4. The voting rights of control shares are restored to those accorded such shares prior to the control share acquisition in any of the following circumstances:
(a) if, by reason of subsequent issuances of shares or other transactions by the issuing public corporation, the voting power of those control shares is reduced to a range of voting power for which approval has been granted or is not required; or
(b) upon transfer to a person other than an acquiring person; or
(c) the expiration of three (3) years after the date of a vote of shareholders, pursuant to Section 1153 of this title, failing to approve the resolution according voting rights to those control shares.
Added by Laws 1987, c. 146, § 19, emerg. eff. June 24, 1987. Amended by Laws 1990, c. 328, § 10, eff. Sept. 1, 1990; Laws 1991, c. 53, § 8, eff. Sept. 1, 1991.
§181150. Notice of control share acquisition.
NOTICE OF CONTROL SHARE ACQUISITION
Any acquiring person who proposes to make a control share acquisition may, at the person's election, and any acquiring person who has made a control share acquisition shall, deliver an acquiring person statement to the issuing public corporation at the issuing public corporation's principal office. The acquiring person statement must set forth all of the following:
1. The identity of the acquiring person;
2. A statement that the acquiring person statement is given pursuant to Sections 1145 through 1155 of this title;
3. The number of shares of the issuing public corporation owned, directly or indirectly, by the acquiring person, the acquisition date and the prices at which such shares were acquired;
4. The voting power to which the acquiring person, except for Section 1149 of this title, would be entitled;
5. A form of resolution to be considered by the shareholders pursuant to Section 1153 of this title; and
6. If the control share acquisition has not yet occurred:
a. a description in reasonable detail of the terms of the proposed control share acquisition, and
b. representations of the acquiring person, together with a statement in reasonable detail of the facts upon which they are based, that the proposed control share acquisition, if consummated, will not be contrary to law, and that the acquiring person has the financial capacity to make the proposed control share acquisition.
Added by Laws 1987, c. 146, § 20, emerg. eff. June 24, 1987. Amended by Laws 1991, c. 53, § 9, eff. Sept. 1, 1991.
§181151. Shareholder meeting to determine control share voting rights.
SHAREHOLDER MEETING TO DETERMINE CONTROL
SHARE VOTING RIGHTS
A. If, at the time of delivery of an acquiring person statement, the acquiring person requests a special meeting and gives an undertaking to pay the corporation's expenses of the special meeting, within ten (10) days thereafter, the directors of the issuing public corporation shall call a special meeting of shareholders of the issuing public corporation for the purpose of considering the voting rights to be accorded the shares acquired or to be acquired in the control share acquisition.
B. Unless the acquiring person agrees in writing to another date, the special meeting of shareholders shall be held within fifty (50) days after receipt by the issuing public corporation of the request.
C. If no request is made, the voting rights to be accorded the shares acquired in the control share acquisition shall be presented to the next special or annual meeting of shareholders.
D. If the acquiring person so requests in writing at the time of delivery of the acquiring person statement, the special meeting shall not be held sooner than thirty (30) days after receipt by the issuing public corporation of the acquiring person statement.
Added by Laws 1987, c. 146, § 21, emerg. eff. June 24, 1987.
§181152. Notice of shareholder meeting.
NOTICE OF SHAREHOLDER MEETING
A. If a special meeting is requested as provided in Section 21 of this act, notice of the special meeting of shareholders shall be given as promptly as reasonably practicable by the issuing public corporation to all shareholders of record as of the record date set for the meeting, whether or not entitled to vote at the meeting.
B. Notice of the special or annual shareholder meeting at which the voting rights are to be considered must include or be accompanied by both of the following:
1. A copy of the acquiring person statement delivered to the issuing public corporation pursuant to Section 21 of this act; and
2. A statement by the board of directors of the corporation, authorized by its directors, of its position or recommendation, or that it is taking no position or making no recommendation, with respect to the proposed control share acquisition.
Added by Laws 1987, c. 146, § 22, emerg. eff. June 24, 1987.
§181153. Resolution granting control share voting rights.
RESOLUTION GRANTING CONTROL SHARE VOTING RIGHTS
A. All votes cast at the meeting for or against the resolution contained in the acquiring person statement must be identified as noninterested shares. To be approved, the resolution shall receive the affirmative votes of a majority of all voting power, excluding all interested shares. If the resolution is not approved, the acquiring person, not sooner than six (6) months after disapproval of the resolution, may present a new resolution for a vote of shareholders in accordance with this section at any subsequent shareholders meeting.
B. A proxy relating to a meeting of shareholders to be held pursuant to Section 1151 of this title shall be solicited separately from the offer to purchase or solicitation of an offer to sell shares of the issuing public corporation.
C. 1. For purposes of this subsection, "competing control share acquisition" means a control share acquisition or proposed control share acquisition that is the subject of an acquiring person statement delivered to the issuing public corporation pursuant to Section 1150 of this title not less than twenty-five (25) days prior to the scheduled annual or special meeting date which has been or is required to be established pursuant to Section 1151 of this title with respect to a pending control share acquisition.
2. In the event that a competing control share acquisition is made or proposed, the issuing public corporation shall, at the option of the acquiring person making the competing control share acquisition, call for a vote of shareholders to consider the resolution relating to the voting rights of the competing control share acquisition at the same meeting that has been or is to be called to consider the voting rights of the pending control share acquisition. In the event the acquiring person making the competing control share acquisition does not elect in writing to have the resolution relating to the voting rights of the competing control share acquisition considered at the same meeting, any vote shall be held as provided in Section 1153 of this title, except that in such case no vote shall be called on the competing control share acquisition prior to the earlier of the vote on the resolution relating to voting rights of the pending control share acquisition or fifty-one (51) days after receipt by the issuing public corporation of the request for a meeting by the acquiring person making the pending control share acquisition.
3. If more than one resolution relating to a control share acquisition is to be considered at any meeting or at meetings scheduled for or occurring on the same day, all such resolutions relating to the voting rights of acquiring persons shall be considered by shareholders in the order in which the initial acquiring person statements relating to such control share acquisitions were delivered to the issuing public corporation. However, no resolution approved by shareholders shall become effective until midnight of the date on which the respective shareholder approval occurs.
4. If resolutions relating to two (2) or more control share acquisitions are subject to shareholder vote pursuant to Section 1153 of this title, shares held by an acquiring person are considered interested shares only for purposes of a vote on a resolution relating to a control share acquisition by that same acquiring person.
Added by Laws 1987, c. 146, § 23, emerg. eff. June 24, 1987. Amended by Laws 1990, c. 328, § 11, eff. Sept. 1, 1990; Laws 1991, c. 53, § 10, eff. Sept. 1, 1991.
§181154. Redemption of control shares.
REDEMPTION OF CONTROL SHARES
A. If authorized in a corporation's certificate of incorporation or bylaws before a control share acquisition has occurred, control shares acquired in a control share acquisition with respect to which no acquiring person statement has been filed with the issuing public corporation may, at any time during the period ending sixty (60) days after the last acquisition of control shares by the acquiring person, be subject to redemption by the corporation at the fair value thereof pursuant to the procedures adopted by the corporation.
B. Control shares acquired in a control share acquisition are not subject to redemption after an acquiring person statement has been filed unless the shares are not accorded full voting rights by the shareholders as provided in Section 23 of this act.
Added by Laws 1987, c. 146, § 24, emerg. eff. June 24, 1987.
§181155. Rights of dissenting shareholders.
RIGHTS OF DISSENTING SHAREHOLDERS
A. Unless otherwise provided in a corporation's certificate of incorporation or bylaws before a control share acquisition has occurred, in the event control shares acquired in a control share acquisition are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of all voting power, all shareholders of the issuing public corporation have dissenters' rights.
B. As soon as practicable after such events have occurred, the board of directors shall cause a notice to be sent to all shareholders of the corporation advising them of the facts and that they have dissenters' rights to receive the fair value of their shares pursuant to Section 1091 of Title 18 of the Oklahoma Statutes.
C. As used in this section, "fair value" means a value not less than the highest price paid per share by the acquiring person in the control share acquisition.
Added by Laws 1987, c. 146, § 25, emerg. eff. June 24, 1987.
§18-2000. Short title.
This act shall be known and may be cited as the "Oklahoma Limited Liability Company Act".
Added by Laws 1992, c. 148, § 1, eff. Sept. 1, 1992.
§18-2001. Definitions.
As used in this act, unless the context otherwise requires:
1. "Articles of organization" means documents filed under Section 2019 of this title for the purpose of forming a limited liability company;
2. "Bankrupt" means bankrupt under the United States Bankruptcy Code, as amended, or insolvent under any state insolvency act;
3. "Business" means any trade, occupation, profession or other activity regardless of whether engaged in for gain, profit or livelihood;
4. "Capital contribution" means anything of value that a person contributes to the limited liability company as a prerequisite for, or in connection with, membership, including cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services;
5. "Capital interest" means the fair market value as of the date contributed of a member's capital contribution as adjusted for any additional capital contributions or withdrawals;
6. "Corporation" means a corporation formed under the laws of this state or a foreign corporation as defined in this section;
7. "Court" includes every court and judge having jurisdiction in the case;
8. "Foreign corporation" means a corporation formed under the laws of any state other than this state, or under the laws of the District of Columbia or any foreign country;
9. "Foreign limited liability company" means an entity that is:
a. an unincorporated association,
b. organized under the laws of a state other than the laws of this state or organized under the laws of any foreign country,
c. organized under a statute pursuant to which an association may be formed that affords to each of its members limited liability with respect to the liabilities of the entity, and
d. not required to be registered or organized under any statute of this state other than this act;
10. "Foreign limited partnership" means a limited partnership formed under the laws of any state other than this state, or under the laws of the District of Columbia or any foreign country;
11. "Limited liability company" or "domestic limited liability company" means an entity that is an unincorporated association or proprietorship having one or more members that is organized and existing under the laws of this state;
12. "Limited partnership" means a limited partnership formed under the laws of this state or a foreign limited partnership as defined in this section;
13. "Manager" or "managers" means a person or persons designated by the members of a limited liability company to manage the limited liability company as provided in the articles of organization or an operating agreement;
14. "Member" means a person with an ownership interest in a limited liability company, with the rights and obligations specified under this act;
15. "Membership interest" or "interest" means a member's rights in the limited liability company, collectively, including the member's share of the profits and losses of the limited liability company, the right to receive distributions of the limited liability company's assets, and any right to vote or participate in management;
16. "Operating agreement" means any agreement of the members as to the affairs of a limited liability company and the conduct of its business;
17. "Person" means an individual, a general partnership, a limited partnership, a limited liability company, a trust, an estate, an association, a corporation or any other legal or commercial entity; and
18. "State" means a state, territory or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.
Added by Laws 1992, c. 148, § 2, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 2, eff. Sept. 1, 1993; Laws 1997, c. 145, § 1, eff. Nov. 1, 1997.
§18-2002. Purposes for formation.
A limited liability company may be organized under the Oklahoma General Corporation Act for the purpose of carrying on any lawful business, purpose or activity, whether or not for profit, except that a limited liability company may not conduct business as a domestic insurer.
Added by Laws 1992, c. 148, § 3, eff. Sept. 1, 1992. Amended by Laws 1997, c. 418, § 1, eff. Nov. 1, 1997; Laws 2001, c. 405, § 28, eff. Nov. 1, 2001; Laws 2003, c. 180, § 10, eff. Nov. 1, 2003.
§18-2003. Powers and authority.
Each limited liability company may:
1. Sue, be sued, complain and defend in all courts;
2. Transact its business, carry on its operations and have and exercise the powers granted by this section in any state, territory, district or possession of the United States, and in any foreign country;
3. Make contracts and guarantees, incur liabilities, and borrow money;
4. Sell, convey, lease, exchange, transfer, mortgage, pledge, and otherwise dispose of all or any part of its property and assets;
5. Acquire by purchase or in any other manner, take, receive, own, hold, improve, and otherwise deal with any interest in real or personal property, wherever located;
6. Issue notes, bonds and other obligations and secure any of them by mortgage or deed of trust or security interest of any or all of its assets;
7. Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, loan, pledge or otherwise dispose of and otherwise use and deal in and with stock or other interests in and obligations of domestic and foreign corporations, associations, general or limited partnerships, limited liability companies, business trusts, and individuals;
8. Invest its surplus funds, lend money from time to time in any manner which may be appropriate to enable it to carry on the operations or fulfill the purposes set forth in its articles of organization, and take and hold real property and personal property as security for the payment of funds so loaned or invested;
9. Elect or appoint agents and define their duties and fix their compensation;
10. Be a promoter, stockholder, partner, member, associate, or agent of any corporation, partnership, limited liability company, joint venture, trust or other enterprise;
11. Indemnify and hold harmless any member, agent, or employee from and against any and all claims and demands whatsoever, except in the case of action or failure to act by the member, agent, or employee which constitutes willful misconduct or recklessness, and subject to the standards and restrictions, if any, set forth in the articles of organization or operating agreement;
12. Make and alter operating agreements, not inconsistent with its articles of organization or with the laws of this state, for the administration and regulation of the affairs of the limited liability company;
13. Cease its activities and dissolve; and
14. Do every other act not inconsistent with law which is appropriate to promote and attain the purposes set forth in its articles of organization.
Added by Laws 1992, c. 148, § 4, eff. Sept. 1, 1992.
§18-2004. Articles of organization - Filing.
A. One or more persons may form a limited liability company upon the filing of executed articles of organization with the Office of the Secretary of State.
B. 1. When the articles of organization become effective, the proposed organization becomes a limited liability company under the name and subject to the purposes, conditions, and provisions stated in the articles. A limited liability company formed under this act is a separate legal entity, the existence of which as a separate legal entity continues until cancellation of the limited liability company's articles of organization.
2. Filing of the articles by the Office of the Secretary of State is conclusive evidence of the formation of the limited liability company.
Added by Laws 1992, c. 148, § 5, eff. Sept. 1, 1992. Amended by Laws 1997, c. 145, § 2, eff. Nov. 1, 1997; Laws 2004, c. 255, § 33, eff. Nov. 1, 2004.
§18-2005. Articles of organization - Contents.
A. The articles of organization shall set forth:
1. The name of the limited liability company;
2. The term of the existence of the limited liability company which may be perpetual; and
3. The street address of its principal place of business, wherever located, and the name and street address of its resident agent which shall be identical to its registered office in this state.
B. If the limited liability company is to establish two or more series of members, managers or membership interests having separate rights, powers or duties as provided under Section 50 of this act and the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to a particular series are to be enforceable against the assets of the series only, the articles of organization shall set forth a notice of the limitation on liabilities of the series.
C. The articles of organization may set forth any other matters the members determine to include. It is not necessary to set out in the articles of organization any of the powers enumerated in this act.
Added by Laws 1992, c. 148, § 6, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 3, eff. Sept. 1, 1993; Laws 1997, c. 145, § 3, eff. Nov. 1, 1997; Laws 1999, c. 421, § 24, eff. Nov. 1, 1999; Laws 2004, c. 255, § 35, eff. Nov. 1, 2004.
§18-2006. Execution of articles - Evidence of authority - Signatures.
A. Articles required by this act to be filed with the Office of the Secretary of State shall be executed in the following manner:
1. Articles of organization must be signed by at least one person who need not be a member of the limited liability company; and
2. Articles of amendment, merger, consolidation, conversion or dissolution must be signed by a manager.
B. Any person may sign any articles by an attorney in fact. A person who executes articles as an attorney-in-fact, agent or fiduciary is not required to exhibit evidence of his or her authority as a prerequisite to filing.
C. The execution of any articles under this act constitutes an affirmation under the penalties of perjury that the facts stated therein are true.
D. Any signature on articles or any other instrument authorized by this act may be a facsimile signature, a conformed signature or an electronically transmitted signature.
Added by Laws 1992, c. 148, § 7, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 4, eff. Sept. 1, 1993; Laws 1996, c. 69, § 13, eff. Nov. 1, 1996; Laws 2004, c. 255, § 35, eff. Nov. 1, 2004.
§18-2007. Delivery of articles to Secretary of State - Filing - Time when effective.
A. One signed copy of the articles of organization or any other articles authorized by this act shall be delivered to the Secretary of State. Unless the Secretary of State finds that any articles do not conform to law, upon receipt of all filing and other fees required by law, he or she shall:
1. Endorse on each copy the word "filed" and the day, month and year, and the time, if applicable, of the filing thereof;
2. File one copy in his or her office; and
3. Return the other copy to the person who filed it or his or her representative.
B. Unless a later effective date or time, which shall be a specified date or time not later than a time on the nineteenth day after the filing, is provided in the articles, articles of organization are effective, and the limited liability company is formed, at the time of the filing of the articles of organization with the Secretary of State.
C. Unless a later effective date or time, which shall be a specified date or time not later than a time on the nineteenth day after the filing, is provided in the articles, articles of amendment, merger, consolidation, conversion or dissolution are effective at the time of their filing with the Secretary of State.
Added by Laws 1992, c. 148, § 8, eff. Sept. 1, 1992. Amended by Laws 2004, c. 255, § 36, eff. Nov. 1, 2004.
§18-2008. Name of company - Restrictions.
The name of each limited liability company as set forth in its articles of organization:
1. Shall contain either the words "limited liability company" or "limited company" or the abbreviations "LLC", "LC", "L.L.C.", or "L.C." The word "limited" may be abbreviated as "LTD." and the word "Company" may be abbreviated as "CO."; and
2. a. May not be the same as or indistinguishable from:
(1) names upon the records in the Office of the Secretary of State of then existing limited liability companies whether organized pursuant to the laws of this state or licensed or registered as foreign limited liability companies, or
(2) names upon the records in the Office of the Secretary of State of corporations organized under the laws of this state or of foreign corporations registered in accordance with the laws of this state then existing or which existed at any time during the preceding three (3) years, or
(3) names upon the records in the Office of the Secretary of State of limited partnerships formed under the laws of this state or of foreign limited partnerships registered in accordance with the laws of this state, or
(4) trade names, fictitious names, or other names reserved with the Secretary of State.
b. The provisions of subparagraph a of this paragraph shall not apply if one of the following is filed with the Secretary of State:
(1) the written consent of the other limited liability company, corporation, limited partnership, or holder of the trade name, fictitious name or other reserved name to use the same or indistinguishable name with the addition of one or more words, numerals, numbers or letters to make that name distinguishable upon the records of the Secretary of State, except that the addition of words, numerals, numbers or letters to make the name distinguishable shall not be required where such written consent states that the consenting entity is about to change its name, cease to do business, withdraw from the state or be wound up, or
(2) a certified copy of a final decree of a court of competent jurisdiction establishing the prior right of such limited liability company or holder of a limited liability company name to the use of such name in this state.
Added by Laws 1992, c. 148, § 9, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 5, eff. Sept. 1, 1993; Laws 1999, c. 421, § 25, eff. Nov. 1, 1999.
§18-2009. Reservation and transfer of company name.
A. The exclusive right to use a specified name for a domestic or foreign limited liability company, in good faith, may be reserved by:
1. A person who intends to organize a domestic limited liability company or a foreign limited liability company to be registered in this state and to adopt that name;
2. A domestic limited liability company or a foreign limited liability company registered in this state which proposes to adopt that name; or
3. A foreign limited liability company which intends to register in this state and adopt that name.
B. A person seeking to reserve a specified name shall file an application executed by the applicant with the Secretary of State and pay the filing fee required by law. If the Secretary of State finds that the name is available for use by a domestic or foreign limited liability company, he shall reserve the name for the exclusive use of the applicant for a period of sixty (60) days.
C. The right to the exclusive use of a reserved name may be transferred to any other person by filing in the Office of the Secretary of State a notice of the transfer, executed by the applicant for whom the name was reserved and specifying the name and address of the transferee.
Added by Laws 1992, c. 148, § 10, eff. Sept. 1, 1992.
§18-2010. Registered office and agent.
A. Every domestic limited liability company shall continuously maintain in this state:
1. A registered office which may be, but need not be, the same as its principal place of business; and
2. A resident agent for service of process on the limited liability company that may be the domestic limited liability company itself, an individual resident of this state, or a domestic or qualified foreign corporation, limited liability company, or limited partnership. Each registered agent shall maintain a business office identical with the registered office which is open during regular business hours to accept service of process and otherwise perform the functions of a registered agent.
B. 1. A limited liability company may designate or change its resident agent, registered office, or principal office by filing with the Office of the Secretary of State a statement authorizing the designation or change and signed by any manager.
2. A limited liability company may change the street address of its registered office by filing with the Office of the Secretary of State a statement of the change signed by any manager.
3. A designation or change of a principal office or resident agent or street address of the registered office for a limited liability company under this subsection is effective when the Office of the Secretary of State files the statement, unless a later effective date or time, which shall be a specified date or time not later than a time on the nineteenth day after the filing, is provided in the statement.
C. 1. A resident agent who changes his or her street address in the state may notify the Office of the Secretary of State of the change by filing with the Office of the Secretary of State a statement of the change signed by the agent or on the agent's behalf.
2. The statement shall include:
a. the name of the limited liability company for which the change is effective,
b. the new street address of the resident agent, and
c. the date on which the change is effective, if to be effective after the filing date.
3. If the new address of the resident agent is the same as the new address of the principal office of the limited liability company, the statement may include a change of address of the principal office if:
a. the resident agent notifies the limited liability company of the change in writing, and
b. the statement recites that the resident agent has done so.
4. The change of address of the resident agent or principal office is effective when the Office of the Secretary of State files the statement, unless a later effective date or time, which shall be a specified date or time not later than a time on the nineteenth day after the filing, is provided in the statement.
D. 1. A resident agent may resign by filing with the Office of the Secretary of State a copy of the resignation, signed and acknowledged by the registered agent, which contains a statement that notice of the resignation was given to the limited liability company at least thirty (30) days prior to the filing of the resignation by mailing or delivering the notice to the limited liability company at its address last known to the registered agent and specifying the address therein.
2. The resignation is effective thirty (30) days after it is filed, unless a later effective date or time, which shall be a specified date or time not later than a time on the nineteenth day after the filing, is provided in the resignation.
3. If a domestic limited liability company fails to obtain and designate a new registered agent before the resignation is effective, the Secretary of State shall be deemed to be the registered agent of the limited liability company until a new registered agent is designated.
E. If a limited liability company has no registered agent or the registered agent cannot be found, then service of process on the limited liability company may be made by serving the Secretary of State as its agent as provided in Section 2004 of Title 12 of the Oklahoma Statutes.
Added by Laws 1992, c. 148, § 11, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 6, eff. Sept. 1, 1993; Laws 1999, c. 421, § 26, eff. Nov. 1, 1999; Laws 2001, c. 406, § 11, emerg. eff. June 4, 2001; Laws 2004, c. 255, § 37, eff. Nov. 1, 2004.
§18-2011. Articles of organization - Amendment.
A. The articles of organization shall be amended when:
1. There is a change in the name of the limited liability company;
2. There is a false or erroneous statement in the articles of organization;
3. There is a change in the time as stated in the articles of organization for the cancellation of the limited liability company; or
4. The members desire to restate the articles of organization in their entirety or to make a change in any other statement or to add a statement in the articles of organization in order to accurately represent their agreement.
B. An amendment to the articles of organization of a limited liability company shall set forth:
1. The name of the limited liability company;
2. The date of filing the articles of organization; and
3. The amendment to the articles of organization.
Added by Laws 1992, c. 148, § 12, eff. Sept. 1, 1992.
§18-2012. Articles of correction.
A. If any document filed with the Office of the Secretary of State under this act contains any typographical error, error of transcription, or other technical error or has been defectively executed, the document may be corrected by the filing of articles of correction.
B. Articles of correction shall set forth:
1. The title of the document being corrected;
2. The date that the document being corrected was filed; and
3. The provision in the document as previously filed and as corrected and, if execution of the document was defective, the manner in which it was defective.
C. Articles of correction may not make any other change or amendment which would not have complied in all respects with the requirements of this act at the time the document being corrected was filed.
D. Articles of correction shall be executed in the same manner in which the document being corrected was required to be executed.
E. Articles of correction may not:
1. Change the effective date of the document being corrected; or
2. Affect any right or liability accrued or incurred before its filing, except that any right or liability accrued or incurred by reason of the error or defect being corrected shall be extinguished by the filing if the person having the right has not detrimentally relied on the original document.
F. Notwithstanding that any instrument authorized to be filed with the Secretary of State pursuant to the provisions of this act is, when filed inaccurately, defectively, or erroneously executed, sealed or acknowledged, or otherwise defective in any respect, the Secretary of State shall not be liable to any person for the preclearance for filing, or the filing and indexing of the instrument by the Secretary of State.
Added by Laws 1992, c. 148, § 13, eff. Sept. 1, 1992. Amended by Laws 1999, c. 421, § 27, eff. Nov. 1, 1999.
§18-2012.1. Cancellation of articles of organization.
CANCELLATION OF ARTICLES OF ORGANIZATION
A. The articles of organization shall be canceled upon the dissolution and the completion of winding up of a limited liability company, or as provided in subsection B of this section, or upon the filing of a certificate of merger or consolidation if the limited liability company is not the surviving or resulting entity in a merger or consolidation, or upon the conversion of a domestic limited liability company approved in accordance with Section 2054.2 of this title.
B. The articles of organization of a domestic limited liability company shall be deemed to be canceled if the domestic limited liability company shall fail to pay the annual fee provided in Section 2055.2 of this title or a registered agent fee to the Secretary of State due under Section 2055 of this title for a period of three (3) years from the date it is due, the cancellation to be effective on the third anniversary of the due date.
C. On or before October 31 of each calendar year, the Secretary of State shall publish a list of those domestic limited liability companies whose articles of organization were canceled on July 1 of the calendar year pursuant to this section. The Secretary of State may publish the list either once in at least one newspaper of general circulation of this state or on its website for at least thirty (30) days or both. If the Secretary of State publishes the list on its web site, the list shall be accessible without charge.
Added by Laws 2001, c. 405, § 29, eff. Nov. 1, 2001. Amended by Laws 2004, c. 255, § 38, eff. Nov. 1, 2004.
§18-2013. Managers - Qualifications - Powers.
A. Except as otherwise provided in the articles of organization, operating agreement, or this act, a limited liability company shall be managed by or under the authority of one or more managers who may but need not be members.
B. The articles of organization or operating agreement may prescribe qualifications for managers.
C. The number of managers shall be specified in or fixed in accordance with the articles of organization or operating agreement.
D. The articles of organization or operating agreement of a limited liability company may authorize the manager or managers of the limited liability company to adopt, amend, and repeal bylaws, or regulations, not inconsistent with the articles of organization and the operating agreement, to govern the affairs of the limited liability company. Unless otherwise provided in the articles of organization, operating agreement or enabling resolutions, bylaws, or regulations from the managers shall be considered a part of the operating agreement.
Added by Laws 1992, c. 148, § 14, eff. Sept. 1, 1992. Amended by Laws 2004, c. 255, § 39, eff. Nov. 1, 2004.
§18-2014. Managers - Election - Removal - Resignation.
MANAGERS - ELECTION - REMOVAL - RESIGNATION
Unless otherwise provided in the articles of organization or operating agreement:
1. The election of managers shall be by majority vote of the members;
2. Any or all managers may be removed, with or without cause, by the written consent of the members; and
3. A manager may resign in accordance with the operating agreement or, if the operating agreement does not provide for the manager's resignation, upon notice to the limited liability company.
Added by Laws 1992, c. 148, § 15, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 7, eff. Sept. 1, 1993; Laws 2001, c. 405, § 30, eff. Nov. 1, 2001.
§18-2015. Management of company without designated managers.
MANAGEMENT OF COMPANY WITHOUT DESIGNATED
MANAGERS; RESIGNATION OF MEMBER
A. The articles of organization or operating agreement may provide that the business of the limited liability company shall be managed without designated managers. So long as such provision continues in effect:
1. The members shall be deemed to be managers for purposes of applying provisions of the Oklahoma General Corporation Act, unless the context clearly requires otherwise;
2. The members shall have and be subject to all duties and liabilities of managers; and
3. A member signing on behalf of the limited liability company shall sign as a manager.
B. A member of a member-managed limited liability company may resign as a member in accordance with the operating agreement or, if the operating agreement does not provide for the member's resignation, upon notice to the limited liability company. When a member of a member-managed limited liability company resigns, the member shall cease to have the rights and duties of a member and shall become an assignee; provided that the profits and losses of the limited liability company shall continue to be allocated to the member and any binding commitments for contributions shall continue as if the member had not resigned. If the resignation violates the operating agreement, in addition to any remedies otherwise available under applicable law, a limited liability company may recover from the resigning member damages for breach of the operating agreement and offset the damages against the amount otherwise distributable to the resigning member. The member's resignation shall not constitute a withdrawal from the limited liability company.
Added by Laws 1992, c. 148, § 16, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 8, eff. Sept. 1, 1993; Laws 2001, c. 405, § 31, eff. Nov. 1, 2001.
§18-2016. Managers - Duties - Good faith - Liability.
managers - duties - good faith - liability
Subject to the provisions of Section 2017 of this title:
1. A manager shall discharge the duties as a manager in good faith, with the care an ordinary prudent person in a like position could exercise under similar circumstances, and in the manner the manager reasonably believes to be in the best interests of the limited liability company;
2. In discharging the duties, a manager may rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by:
a. one or more employees of the limited liability company whom the manager reasonably believes to be reliable and competent in the matters presented,
b. legal counsel, public accountants, or other persons as to matters the manager reasonably believes are within the person's professional or expert competence, or
c. a committee of managers of which the manager is not a member if the manager reasonably believes the committee merits confidence;
A manager is not acting in good faith if the manager has knowledge concerning the matter in question that makes reliance otherwise permitted by this paragraph unwarranted;
3. Unless otherwise provided in the operating agreement, a manager has the power and authority to delegate to one or more other persons the manager's rights and powers to manage and control the business and affairs of the limited liability company, including to delegate to the agents, officers and employees of a manager to the limited liability company, and to delegate by a management agreement or another agreement with, or otherwise to, other persons. The delegation by a manager shall not cause the manager to cease to be a manager of the limited liability company;
4. A manager is not liable for any action taken as a manager, or any failure to take any action, if the manager performed the duties of the office in compliance with the business judgment rule as applied to directors and officers of a corporation; and
5. Except as otherwise provided in the articles of organization or operating agreement, every manager must account to the limited liability company and hold as trustee for it any profit or benefit derived by the manager without the informed consent of the members from any transaction connected with the conduct or winding up of the limited liability company or from any personal use by the manager of its property.
Added by Laws 1992, c. 148, § 17, eff. Sept. 1, 1992. Amended by Laws 2001, c. 405, § 32, eff. Nov. 1, 2001.
§18-2017. Member or manager - Limitation or elimination of liability - Indemnification - Creation of series or groups.
MEMBER OR MANAGER - LIMITATION OR ELIMINATION
OF LIABILITY - INDEMNIFICATION -
CREATION OF SERIES OR GROUPS
A. Subject to subsection B of this section, the articles of organization or operating agreement may:
1. Eliminate or limit the personal liability of a member or manager for monetary damages for breach of any duty provided for in Section 2016 of this title; and
2. Provide for indemnification of a member or manager for judgments, settlements, penalties, fines or expenses incurred in any proceeding because the person is or was a member or manager.
B. No provision permitted under subsection A of this section shall limit or eliminate the liability of a manager for:
1. Any breach of the manager's duty of loyalty to the limited liability company or its members;
2. Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or
3. Any transaction from which the manager derived an improper personal benefit.
C. The articles of organization or operating agreement may define the scope of any duties owned by the members or managers to the limited liability company, if not manifestly unreasonable. A definition shall not eliminate the duty of loyalty or the obligation of good faith and fair dealing.
D. An operating agreement may provide for classes or groups of members or managers or both having such relative rights, powers and duties as the operating agreement may provide, and may provide for the creation in the manner provided in the operating agreement of additional classes or groups of members or managers or both having such relative rights, powers and duties as may from time to time be established, including rights, powers and duties senior to existing classes and groups of members or managers. An operating agreement may provide for the taking of an action, including the amendment of the operating agreement, without the vote or approval of any member or manager or class or group of members or managers, including an action to create under the operating agreement a class or group of membership interests that was not previously outstanding. An operating agreement may provide that any member or class or group of members shall have no voting rights.
Added by Laws 1992, c. 148, § 18, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 9, eff. Sept. 1, 1993; Laws 2001, c. 405, § 33, eff. Nov. 1, 2001; Laws 2004, c. 255, § 40, eff. Nov. 1, 2004.
§18-2018. Managers - Majority vote required.
Voting by managers may be on a per capita, number, financial interest, class, group or any other basis. Unless otherwise provided in the articles of organization or operating agreement, if the limited liability company has more than one manager, all decisions of the managers shall be made by majority vote of the managers on a per capita basis. An operating agreement may grant to all or certain identified managers or a specified class or group of the managers the right to vote, separately or with all or any class or group of managers or members, on any matter.
Added by Laws 1992, c. 148, § 19, eff. Sept. 1, 1992. Amended by Laws 2004, c. 255, § 41, eff. Nov. 1, 2004.
§18-2019. Manager as agent of limited liability company - Unauthorized acts - Property transactions.
A. Every manager is an agent of the limited liability company for the purpose of its business, and the act of every manager, including the execution in the limited liability company name of any instrument for apparently carrying on the business of the limited liability company of which he is a manager, binds the limited liability company, unless the manager so acting lacks the authority to act for the limited liability company in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority. The unauthorized acts of the manager shall bind the limited liability company as to persons acting in good faith who have no knowledge of the fact that the manager had no such authority.
B. Subject to the provisions of subsection A of this section and Section 30 of this act, instruments and documents providing for the acquisition, mortgage, or disposition of real or personal property of the limited liability company shall be valid and binding upon the limited liability company if executed by one or more of its managers.
Added by Laws 1992, c. 148, § 20, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 10, eff. Sept. 1, 1993.
§18-2019.1. Title to property - Transfer.
A. Title to property of the limited liability company that is held in the name of the limited liability company may be transferred by an instrument of transfer executed by any manager in the name of the limited liability company.
B. Title to property of the limited liability company that is held in the name of one or more members or managers with an indication in the instrument transferring title to the property to them of their capacity as members or managers of a limited liability company or of the existence of a limited liability company, even if the name of the limited liability company is not indicated, may be transferred by an instrument of transfer executed by the persons in whose name title is held.
C. Property transferred under subsections A or B of this section may be recovered by the limited liability company if it proves that the act of the person executing the instrument of transfer did not bind the limited liability company under Section 2019 of Title 18 of the Oklahoma Statutes, unless the property has been transferred by the initial transferee or a person claiming through the initial transferee to a subsequent transferee who gives value without having notice that the person who executed the instrument of initial transfer lacked authority to bind the limited liability company.
D. Title to property of the limited liability company that is held in the name of one or more persons other than the limited liability company without an indication in the instrument transferring title to the property to them of their capacity as members or managers of a limited liability company or of the existence of a limited liability company, may be transferred free of any claims of the limited liability company or the members by the person in whose name title is held to a transferee who gives value without having notice that it is property of a limited liability company.
Added by Laws 1993, c. 366, § 11, eff. Sept. 1, 1993.
§18-2020. Members - Voting rights.
A. Voting by members may be on a per capita, number, financial interest, class, group or any other basis. Unless otherwise provided in the articles of organization or operating agreement, the members of a limited liability company vote in proportion to their respective capital interests. Except as otherwise provided in subsection D of this section or unless the context otherwise requires, references in this act to a vote or the consent of the members mean a vote or consent of the members holding a majority of the capital interests. The vote or consent may be evidenced in the minutes of a meeting of the members or by a written consent in lieu of a meeting.
B. Except as otherwise provided in subsection D of this section or in the articles of organization or operating agreement, a majority vote of the members shall be required to approve the following matters:
1. The sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited liability company;
2. Merger of the limited liability company with another limited liability company or other business entity; and
3. An amendment to the articles of organization or operating agreement.
C. The articles of organization or operating agreement may alter the above voting rights and provide for any other voting rights of members.
D. Unless otherwise provided in the articles of organization or a written operating agreement, the unanimous vote or consent of the members shall be required to approve the following matters:
1. The dissolution of the limited liability company pursuant to paragraph 3 of Section 2037 of this title; or
2. An amendment to the articles of organization or an amendment to a written operating agreement:
a. which reduces the term of the existence of the limited liability company,
b. which reduces the required vote of members to approve a dissolution, merger or sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited liability company,
c. which permits a member to voluntarily withdraw from the limited liability company, or
d. which reduces the required vote of members to approve an amendment to the articles of organization or written operating agreement reducing the vote previously required on the matters described in this paragraph.
E. An operating agreement may grant to all or certain identified members or a specified class or group of the members the right to vote separately or with all or any class or group of the members or managers, on any matter.
Added by Laws 1992, c. 148, § 21, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 12, eff. Sept. 1, 1993; Laws 1996, c. 226, § 23, eff. July 1, 1996; Laws 1998, c. 422, § 28, eff. Nov. 1, 1998; Laws 2004, c. 255, § 42, eff. Nov. 1, 2004.
§18-2021. Records required to be kept - Member access to information - Managers may inspect and copy records.
A. Unless otherwise provided in a written operating agreement, a limited liability company shall keep at its principal place of business the following:
1. A current and a past list of the full name and last-known mailing address of each member and manager;
2. Copies of records that would enable a member to determine the relative voting rights of the members;
3. A copy of the articles of organization, together with any amendments thereto;
4. Copies of the limited liability company's federal, state and local income tax returns and financial statements, if any, for the three most recent years or, if such returns and statements were not prepared for any reason, copies of the information and statements provided to, or which should have been provided to, the members to enable them to prepare their federal state and local tax returns for such period;
5. Copies of any effective written operating agreements and all amendments thereto and copies of any written operating agreements no longer in effect; and
6. Unless provided in writing in an operating agreement, a writing setting out:
a. the amount of cash and a statement of the agreed value of other property or services contributed by each member and the times at which or events upon the happening of which any additional contributions agreed to be made by each member are to be made, and
b. the events upon the happening of which the limited liability company is to be dissolved and its affairs wound up, and
c. any other information prepared pursuant to a requirement in an operating agreement.
B. A member, for any purpose reasonably related to the member's interest, may:
1. At the member's own expense, inspect and copy any limited liability company record upon reasonable request during ordinary business hours;
2. Obtain from time to time upon reasonable demand:
a. true and complete information regarding the state of the business and financial condition of the limited liability company,
b. promptly after becoming available, a copy of the limited liability company's state and local income tax returns for each year, and
c. other information regarding the affairs of the limited liability company as is just and reasonable; and
3. Have a formal accounting of the limited liability company's affairs whenever circumstances render it just and reasonable.
C. A manager, for any purpose reasonably related to his position, may inspect and copy any limited liability company records upon reasonable request during ordinary business hours.
D. Failure of the limited liability company to keep or maintain any of the records or information required pursuant to this section shall not be grounds for imposing liability on any person for the debts and obligations of the limited liability company.
Added by Laws 1992, c. 148, § 22, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 13, eff. Sept. 1, 1993.
§18-2022. Liability solely as manager or member.
A person who is a member or manager, or both, of a limited liability company is not liable for the obligations of a limited liability company solely by reason of being such member or manager or both.
Added by Laws 1992, c. 148, § 23, eff. Sept. 1, 1992.
§18-2023. Contribution of member - Form.
The contribution of a member to a limited liability company may be in cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services. A person may be admitted to a limited liability company as a member of the limited liability company and may receive a membership interest in the limited liability company without making a contribution or being obligated to make a contribution to the limited liability company. Unless otherwise provided in the operating agreement, a person may be admitted to a limited liability company as a member of the limited liability company without acquiring a membership interest in the limited liability company. Unless otherwise provided in the operating agreement, a person may be admitted as the sole member of a limited liability company without making a contribution or being obligated to make a contribution to the limited liability company or without acquiring a membership interest in the limited liability company.
Added by Laws 1992, c. 148, § 24, eff. Sept. 1, 1992. Amended by Laws 2004, c. 255, § 43, eff. Nov. 1, 2004.
§18-2024. Performance of obligations - Compromise - Remedies for failure to perform.
A. 1. Except as otherwise provided in the articles of organization or the operating agreement, a member is obligated to the limited liability company to perform any written promise to contribute cash or property or to perform services, even if he is unable to perform because of death, disability or other reason.
2. If a member does not make the required contribution of property or services, he is obligated, at the option of the limited liability company, to contribute cash equal to that portion of value, as stated in the operating agreement, of the stated contribution that has not been made.
B. 1. The obligation of a member to make a contribution or return money or other property paid or distributed in violation of this act may be compromised only upon compliance with the operating agreement, or, if the operating agreement does not so provide, with the unanimous consent of the members.
2. A compromise shall not impair the right of any creditor to enforce the obligation or to require the obligation to be enforced if:
a. such creditor relied upon the obligation and the absence in the operating agreement of the limited liability company's authority to compromise the obligation, or
b. a duty to the creditor was breached in the making of the compromise.
C. An operating agreement may provide that the capital interest of a member who fails to make any contribution or other payment that the member is required to make shall be subject to specified remedies for, or specified consequences of, the failure. The remedy or consequence may take the form of reducing the defaulting member's capital interest in the limited liability company, subordinating the defaulting member's capital interest in the limited liability company to that of the nondefaulting members, a forced sale of the capital interest in the limited liability company, forfeiture of the capital interest in the limited liability company, the lending by the nondefaulting members of the amount necessary to meet the commitment, a fixing of the value of the member's capital interest in the limited liability company by appraisal or by formula and redemption and sale of the member's capital interest in the limited liability company at that value, or other remedy or consequences.
Added by Laws 1992, c. 148, § 25, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 14, eff. Sept. 1, 1993.
§18-2025. Allocation of profits and losses - Distributions.
Except as otherwise provided in the operating agreement:
1. The profits and losses of a limited liability company shall be allocated among the members, and among classes or groups of members, in proportion to their respective capital interests; and
2. Distributions of the limited liability company shall be made to the members, and among classes or groups of members, in proportion to their right to share in the profits of the limited liability company.
Added by Laws 1992, c. 148, § 26, eff. Sept. 1, 1992. Amended by Laws 2004, c. 255, § 44, eff. Nov. 1, 2004.
§18-2026. Distributions - Time.
Except as otherwise provided in this act, a member is entitled to receive distributions from a limited liability company before the dissolution and winding up of the limited liability company to the extent and at the times upon which the members agree or as provided in the operating agreement.
Added by Laws 1992, c. 148, § 27, eff. Sept. 1, 1992. Amended by Laws 1997, c. 145, § 4, eff. Nov. 1, 1997.
§18-2027. Repealed by Laws 1997, c. 145, § 9, eff. Nov. 1, 1997.
§18-2028. Distribution - Cash - Asset in kind.
Except as otherwise provided in the operating agreement:
1. A member, regardless of the nature of the member's contribution, has no right to demand and receive any distribution from a limited liability company in any form other than cash; and
2. No member may be compelled to accept from a limited liability company a distribution of any asset in kind to the extent that the percentage of the asset distributed to the member exceeds the percentage which the member's interest in the limited liability company is of all of the interests in the limited liability company.
Added by Laws 1992, c. 148, § 29, eff. Sept. 1, 1992.
§18-2029. Distribution - Status and rights of member.
At the time a member becomes entitled to receive a distribution, the member has the status of and is entitled to all remedies available to a creditor of the limited liability company with respect to the distribution.
Added by Laws 1992, c. 148, § 30, eff. Sept. 1, 1992.
§18-2030. Distribution - Restrictions - Effect on indebtedness.
A. A distribution may not be made if, after giving effect to the distribution:
1. The limited liability company would not be able to pay its debts as they become due in the usual course of business; or
2. The limited liability company's total assets would be less than the sum of its total liabilities plus, unless the operating agreement permits otherwise, the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of members whose preferential rights are superior to the rights of members receiving the distribution.
B. The limited liability company may base a determination that a distribution is not prohibited under subsection A of this section on:
1. Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or
2. A fair valuation or other method that is reasonable in the circumstances.
C. Except as provided in subsection E of this section, the effect of a distribution under subsection A of this section is measured as of:
1. The date the distribution is authorized, if the payment occurs within one hundred twenty (120) days after the date of authorization; or
2. The date the payment is made if it occurs more than one hundred twenty (120) days after the date of authorization.
D. A limited liability company's indebtedness to a member, incurred by reason of a distribution made in accordance with this section, is at parity with the limited liability company's indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.
E. 1. If the terms of the indebtedness provide that payment of principal and interest is to be made only if, and to the extent that, payment of a distribution to members could then be made under this section, indebtedness of a limited liability company, including indebtedness issued as a distribution, is not a liability for purposes of determinations made under subsection B of this section; and
2. If the indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is actually made.
Added by Laws 1992, c. 148, § 31, eff. Sept. 1, 1992.
§18-2031. Wrongful distribution - Liability of member - Action for recovery.
If a member has received a distribution in violation of the operating agreement or Section 2030 of this title, the member shall be liable to the limited liability company for the amount of the distribution wrongfully made. An action for the recovery of any wrongful distribution to a member must be brought within three (3) years from the date of the distribution.
Added by Laws 1992, c. 148, § 32, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 16, eff. Sept. 1, 1993.
§18-2032. Membership interest - Status.
A membership interest is personal property. A member has no interest in specific limited liability company property.
Added by Laws 1992, c. 148, § 33, eff. Sept. 1, 1992.
§18-2033. Assignment of membership interest.
A. Unless otherwise provided in an operating agreement:
1. A membership interest is not transferable; provided, however, that a member may assign the economic rights associated with a membership interest in whole or in part;
2. An assignment of the economic rights associated with a membership interest does not entitle the assignee to participate in the management and affairs of the limited liability company or to become or to exercise any rights or powers of a member;
3. An assignment entitles the assignee to share in profits and losses, to receive any distribution or distributions and to receive the allocation of income, gain, loss, deduction, or credit or similar item to which the assignor was entitled to the extent assigned;
4. Unless the assignee of an interest in a limited liability company becomes a member by virtue of that interest, the assignor continues to be a member and to have the power to exercise any rights of a member, unless the assignor is removed as a member either in accordance with the operating agreement or, after having assigned all of the membership interest, by an affirmative vote of the members who have not assigned their interests. The removal of an assignor shall not, by itself, cause the assignee to become a member;
5. Until an assignee of a membership interest becomes a member, the assignee has no liability as a member solely as a result of the assignment; and
6. The assignor of a membership interest is not released from liability as a member solely as a result of the assignment.
B. The operating agreement may provide that a member's interest in a limited liability company may be evidenced by a certificate of membership interest issued by the limited liability company and also may provide for the assignment or transfer of any membership interest represented by such a certificate and may make other provisions with respect to such certificates.
C. Unless otherwise provided in the operating agreement, the pledge of, or granting of a security interest, lien, or other encumbrance in or against any or all of the membership interest of a member is not an assignment and shall not cause the member to cease to be a member or cease to have the power to exercise any rights or powers of a member.
Added by Laws 1992, c. 148, § 34, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 17, eff. Sept. 1, 1993; Laws 1996, c. 226, § 24, eff. July 1, 1996; Laws 1997, c. 145, § 5, eff. Nov. 1, 1997; Laws 2004, c. 255, § 45, eff. Nov. 1, 2004.
§18-2034. Judgment creditor - Rights and interests.
On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the membership interest of the member with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the membership interest. A charging order entered by a court pursuant to this section shall in no event be convertible into a membership interest through foreclosure or other action. This act does not deprive any member of the benefit of any exemption laws applicable to his or her membership interest. This section shall be the sole and exclusive remedy of a judgment creditor with respect to the judgment debtor's membership interest.
Added by Laws 1992, c. 148, § 35, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 18, eff. Sept. 1, 1993; Laws 2004, c. 255, § 46, eff. Nov. 1, 2004.
§18-2035. Assignee of interest in limited liability company - Membership rights, powers, restrictions and liabilities - Rights and liability of assignor - Admission to membership directly in limited liability company.
A. An assignee of an interest in a limited liability company may become a member if and to the extent that:
1. The operating agreement provides; or
2. The members representing a majority of the capital interests which are not the subject of the assignment consent in writing.
B. An assignee who becomes a member, to the extent assigned, has the rights and powers, and is subject to the restrictions and liabilities, of a member under the operating agreement and this act, Section 2000 et seq. of this title; however, unless otherwise provided in writing in the operating agreement or other written agreement, an assignee who becomes a member also is liable for any obligations of the assignor to make contributions as provided in Section 2024 of this title, but shall not be liable for the obligations of the assignor under Section 2031 of this title; however, the assignee is not obligated for liabilities of which the assignee had no knowledge at the time the assignee became a member and which could not be ascertained from a written operating agreement.
C. Regardless of whether an assignee of an interest becomes a member, the assignor is not released from liability to the limited liability company under Sections 2024, 2031, and 2033 of this title.
D. Except as otherwise provided in writing in the operating agreement, a member who assigns the member's entire interest in the limited liability company ceases to be a member or to have the power to exercise any rights of a member when any assignee of the interest becomes a member with respect to the assigned interest.
E. Subject to subsection F of this section, a person acquiring a limited liability company interest directly from the limited liability company may become a member in a limited liability company upon compliance with the operating agreement or, if the operating agreement does not so provide in writing, upon the written consent of the members.
F. The effective time of admission of a member to a limited liability company shall be the later of:
1. The date the limited liability company is formed; or
2. The time provided in the operating agreement, or if no such time is provided therein, then when the person's admission is reflected in the records of the limited liability company.
Added by Laws 1992, c. 148, § 36, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 19, eff. Sept. 1, 1993; Laws 1996, c. 226, § 25, eff. July 1, 1996.
§18-2036. Withdrawal as member - Rights of legal representative of deceased or incompetent member - Expulsion of member.
A. Unless the operating agreement specifically permits in writing the power to withdraw voluntarily, a member may not withdraw at any time. If the operating agreement specifically provides in writing the power to withdraw voluntarily, but the withdrawal occurs as a result of wrongful conduct of the member, a member's voluntary withdrawal shall constitute a breach of the operating agreement and the limited liability company may recover from the withdrawing member damages, including the reasonable cost of replacing the services that the withdrawn member was obligated to perform. The limited liability company may offset its damages against the amount otherwise distributable to the member, in addition to pursuing any remedies provided for in the operating agreement or otherwise available under applicable law. The limited liability company shall not, however, be entitled to any equitable remedy that would prevent a member from exercising the power to withdraw if such power is permitted in the operating agreement.
B. If a member who is an individual dies or a court of competent jurisdiction adjudges the member to be incompetent to manage the member's person or property, the member's personal representative shall have all of the rights of an assignee of the member's interest. If a member is a corporation, trust or other entity and is dissolved or terminated, the powers of that member may be exercised by its personal representative.
C. If the sole member of a limited liability company dies or dissolves, or a court of competent jurisdiction adjudges the member to be incompetent or otherwise lacking legal capacity, the member's personal representative accedes to the membership interest and possesses all rights, powers and duties associated with the interest for the benefit of the incompetent member or the deceased member's estate.
D. The operating agreement may provide for the expulsion of a member, with or without cause, which shall include reasonable provision for the distributable interest.
Added by Laws 1992, c. 148, § 37, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 20, eff. Sept. 1, 1993; Laws 1996, c. 226, § 26, eff. July 1, 1996; Laws 1997, c. 145, § 6, eff. Nov. 1, 1997; Laws 2004, c. 255, § 47, eff. Nov. 1, 2004.
§18-2037. Dissolution and winding up of affairs - Causes.
A limited liability company is dissolved and its affairs shall be wound up upon the earlier of:
1. The occurrence of the latest date on which the limited liability company is to dissolve set forth in the articles of organization;
2. The occurrence of events specified in writing in the operating agreement;
3. The written consent of all of the members or, if there is more than one class or group of members, then by the written consent of all of the members of each class or group;
4. At any time there are no members; provided, that the limited liability company is not dissolved and is not required to be wound up if:
a. unless otherwise provided in an operating agreement, within ninety (90) days or such other period as is provided for in the operating agreement after the occurrence of the event that terminated the continued membership of the last remaining member, the personal representative of the last remaining member agrees in writing to continue the limited liability company and to the admission of the personal representative of the member or its nominee or designee to the limited liability company as a member, effective as of the occurrence of the event that terminated the continued membership of the last remaining member; provided, that an operating agreement may provide that the personal representative of the last remaining member shall be obligated to agree in writing to continue the limited liability company and to the admission of the personal representative of the member or its nominee or designee to the limited liability company as a member, effective as of the occurrence of the event that terminated the continued membership of the last remaining member, or
b. a member is admitted to the limited liability company in the manner provided for in the operating agreement, effective as of the occurrence of the event that terminated the continued membership of the last remaining member, within ninety (90) days or such other period as is provided for in the operating agreement after the occurrence of the event that terminated the continued membership of the last remaining member, pursuant to a provision of the operating agreement that specifically provides for the admission of a member to the limited liability company after there is no longer a remaining member of the limited liability company; or
5. Entry of a decree of judicial dissolution under Section 2038 of this title.
Added by Laws 1992, c. 148, § 38, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 21, eff. Sept. 1, 1993; Laws 1996, c. 226, § 27, eff. July 1, 1996; Laws 1997, c. 145, § 7, eff. Nov. 1, 1997; Laws 2004, c. 255, § 48, eff. Nov. 1, 2004.
§18-2038. Decree of dissolution.
On application by or for a member, the district court may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.
Added by Laws 1992, c. 148, § 39, eff. Sept. 1, 1992.
§18-2039. Winding up business or affairs - Ways - Acts and transactions of member or manager - Presumptive notice.
A. Except as otherwise provided in the articles of organization or operating agreement:
1. The business or affairs of the limited liability company may be wound up in one of the following ways:
a. by the managers, or
b. if one or more of the members or managers have engaged in conduct that casts reasonable doubt on their ability to wind up the business or affairs of the limited liability company, or upon other cause shown, by the district court on application of any member, his legal representative, or assignee; and
2. The persons winding up the business or affairs of the limited liability company may, in the name of, and for and on behalf of, the limited liability company:
a. prosecute and defend suits,
b. settle and close the business of the limited liability company,
c. dispose of and transfer the property of the limited liability company,
d. discharge the liabilities of the limited liability company, and
e. distribute to the members any remaining assets of the limited liability company.
B. Except as provided in subsections D and E of this section, after an event causing dissolution of the limited liability company any manager can bind the limited liability company:
1. By any act appropriate for winding up the limited liability company's affairs or completing transactions unfinished at dissolution; and
2. By any transaction that would have bound the limited liability company if it had not been dissolved, if the other party to the transaction does not have notice of the dissolution.
C. The filing of the articles of dissolution shall be presumed to constitute notice of dissolution for purposes of paragraph 2 of subsection B of this section.
D. An act of a manager or member that is not binding on the limited liability company pursuant to subsection B of this section is binding if it is otherwise authorized by the limited liability company.
E. An act of a manager or member that would be binding under subsection B or would be otherwise authorized but that is in contravention of a restriction on authority shall not bind the limited liability company to persons having knowledge of the restriction.
Added by Laws 1992, c. 148, § 40, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 22, eff. Sept. 1, 1993.
§18-2040. Winding up of affairs - Distribution of assets - Liability.
A. Upon the winding up of a limited liability company, the assets shall be distributed as follows:
1. Payment, or adequate provision for payment, shall be made to creditors, including to the extent permitted by law, members who are creditors, in satisfaction of liabilities of the limited liability company;
2. Except as provided in writing in the articles of organization or operating agreement, to members or former members in satisfaction of liabilities for distributions under Sections 2026 and 2027 of this title; and
3. Except as provided in writing in the articles of organization or operating agreement, to members and former members first for the return of their contributions and second respecting their membership interests, in proportions in which the members share in distributions.
B. A member who receives a distribution in violation of subsection A of this section, and who knew or should have known at the time of the distribution that the distribution violated subsection A of this section, shall be liable to a limited liability company for the amount of the distribution. A member who receives a distribution in violation of subsection A of this section, and who did not know and had no reason to know at the time of the distribution that the distribution violated subsection A of this section, shall not be liable for the amount of the distribution. Subject to subsection C of this section, this subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for a distribution.
C. Unless otherwise agreed, a member who receives a distribution from a limited liability company shall have no liability under this act or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution unless an action to recover the distribution from the member is commenced before the expiration of the three-year period and an adjudication of liability against the member is made in the action.
Added by Laws 1992, c. 148, § 41, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 23, eff. Sept. 1, 1993; Laws 2004, c. 255, § 49, eff. Nov. 1, 2004.
§18-2041. Articles of dissolution.
After the dissolution of the limited liability company, pursuant to Section 2037 of this title, the limited liability company shall file articles of dissolution in the Office of the Secretary of State upon payment of the filing fee required by Section 2055 of this title, the articles of dissolution shall set forth:
1. The name of the limited liability company;
2. The date of filing of its articles of organization;
3. The reason for filing the articles of dissolution;
4. The effective date of the articles of dissolution if they are not to be effective upon the filing; and
5. Any other information the members or managers filing the certificate determine.
Added by Laws 1992, c. 148, § 42, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 24, eff. Sept. 1, 1993.
§18-2042. Foreign limited liability company - Laws governing - Powers, rights and privileges.
A. Subject to the Constitution of this state:
1. The laws of the state or other jurisdiction under which a foreign limited liability company is organized shall govern its organization and internal affairs and the liability of its managers and members; and
2. A foreign limited liability company may not be denied registration by reason of any difference between those laws and the laws of this state.
B. A foreign limited liability company holding a valid registration in this state shall have no greater rights and privileges than a domestic limited liability company. The registration shall not be deemed to authorize the foreign limited liability company to exercise any of its powers or purposes that a domestic limited liability company is forbidden by law to exercise in this state.
Added by Laws 1992, c. 148, § 43, eff. Sept. 1, 1992.
§18-2043. Foreign limited liability company - Registration procedure.
Before transacting business in this state, a foreign limited liability company shall register with the Office of the Secretary of State. In order to register, a foreign limited liability company shall:
1. Pay to the Secretary of State a registration fee required by Section 56 of this act;
2. Provide the Secretary of State with an original certificate from the certifying officer of the jurisdiction of the foreign limited liability company's organization attesting to the foreign limited liability company's organization under the laws of such jurisdiction; and
3. Submit to the Office of the Secretary of State an application in duplicate for registration as a foreign limited liability company, signed by a manager, member, or other person, and setting forth:
a. the name of the foreign limited liability company and, if different, the name under which it proposes to transact business in this state,
b. the state or other jurisdiction and date of its organization,
c. the name and street address of a registered agent in this state which agent shall be an individual resident of this state, or a domestic or qualified foreign corporation, limited liability company, or limited partnership. Each registered agent shall maintain a business office identical with the registered office which is open during regular business hours to accept service of process and otherwise perform the functions of a registered agent. If an additional registered agent is designated, service of process shall be on that agent and not on the Secretary of State,
d. a statement that the Office of the Secretary of State is appointed the agent of the foreign limited liability company for service of process if no agent has been appointed under subparagraph c of this paragraph, or if appointed, the agent's authority has been revoked or if the agent cannot be found or served with the exercise of reasonable diligence,
e. the address of the office required to be maintained in the state of its organization by the laws of that state or, if not so required, of the principal office of the foreign limited liability company, and
f. such additional information as may be necessary or appropriate in order to enable the Office of the Secretary of State to determine whether such limited liability company is entitled to transact business in this state.
Added by Laws 1992, c. 148, § 44, eff. Sept. 1, 1992. Amended by Laws 1999, c. 421, § 28, eff. Nov. 1, 1999.
§18-2044. Foreign limited liability company - Duties of Secretary of State.
If the Office of the Secretary of State finds that an application for registration conforms to the provisions of this act and all requisite fees have been paid, it shall:
1. Endorse on the applications the word "filed", and the month, day, and year of the filing;
2. File in its office one copy of the application;
3. Issue a certificate of registration to transact business in this state; and
4. Return the certificate of registration, together with a copy of the application to the person who filed the application or his representative.
Added by Laws 1992, c. 148, § 45, eff. Sept. 1, 1992.
§18-2045. Foreign limited liability company - Name.
Subject to the provisions of Section 2008 of this title, a foreign limited liability company may register with the Secretary of State under the name which it is registered in its jurisdiction of organization and that could be registered by a domestic limited liability company. If the name of a foreign limited liability company does not satisfy the requirements of Section 2008 of this title, the foreign limited liability company may file with the Secretary of State a statement by its manager duly adopting a fictitious name that is available, and which satisfies the requirements of Section 2008 of this title, which shall be used to the exclusion of its true name when transacting business within this state.
Added by Laws 1992, c. 148, § 46, eff. Sept. 1, 1992. Amended by Laws 1996, c. 69, § 14, eff. Nov. 1, 1996; Laws 1999, c. 421, § 29, eff. Nov. 1, 1999.
§18-2046. Foreign limited liability company - Correction certificate - Recording changes.
A. If any statement in the application for registration of a foreign limited liability company was false when made or any arrangements or other facts described have changed, making the application inaccurate in any respect, the foreign limited liability company shall promptly file in the Office of the Secretary of State a certificate, signed by a manager, member, or other person, correcting the statement and pay the fee provided for in Section 2055 of this title.
B. A registered foreign limited liability company shall record any changes in its principal office, its registered agent, or the registered agent's address, by filing with the Office of the Secretary of State a statement of the change and paying the fee provided for in Section 2055 of this title.
C. A foreign limited liability company authorized to transact business in this state shall promptly file a certificate, issued by the proper officer of the state or jurisdiction of its organization, attesting to the occurrence of a merger, in the Office of the Secretary of State and pay the fee provided for in Section 2055 of this title, whenever it is the surviving limited liability company and the merger:
1. Changes any statement in the application of registration of the foreign limited liability company; or
2. Involves any other foreign business entity authorized to transact business in this state.
D. If the merger changes any arrangements or other facts described in the application for registration of the surviving foreign limited liability company, it shall also comply with the provisions of this section; provided that it will not be required to pay an additional fee.
E. Whenever a foreign limited liability company authorized to transact business in this state ceases to exist because of a statutory merger or consolidation with a foreign business entity not qualified to transact business in this state, it shall comply with the provisions of Section 2047 of this title.
F. A registered agent of a foreign limited liability company may resign by filing with the Office of the Secretary of State a copy of the resignation, signed and acknowledged by the agent, which contains a statement that notice of the resignation was given to the limited liability company at least thirty (30) days prior to the filing of the resignation by mailing or delivering the notice to the limited liability company at its address last known to the registered agent and specifying such address therein.
1. Unless a later time is specified in the resignation, it is effective thirty (30) days after it is filed.
2. If a foreign limited liability company fails to obtain and designate a new registered agent prior to the expiration of the thirty (30) days after the filing by the registered agent of a resignation statement, the Secretary of State shall be deemed to be the registered agent of such limited liability company.
G. If a limited liability company has no registered agent or the registered agent cannot be found, then service of process on the limited liability company may be made by serving the Secretary of State as its agent as provided in Section 2004 of Title 12 of the Oklahoma Statutes.
Added by Laws 1992, c. 148, § 47, eff. Sept. 1, 1992. Amended by Laws 1999, c. 421, § 30, eff. Nov. 1, 1999; Laws 2001, c. 406, § 12, emerg. eff. June 4, 2001.
§18-2047. Foreign limited liability company - Certificate of withdrawal.
A. A foreign limited liability company authorized to transact business in this state may withdraw from the state upon procuring from the Office of the Secretary of State a certificate of withdrawal. In order to procure such certificate, the foreign limited liability company shall file with the Office of the Secretary of State an application for withdrawal and pay the fee provided for in Section 56 of this act. The application for withdrawal shall set forth:
1. The name of the foreign limited liability company and the state or other jurisdiction under the laws of which it is organized;
2. That the foreign limited liability company is not transacting business in this state;
3. That the foreign limited liability company surrenders its certificate of registration to transact business in this state;
4. That the foreign limited liability company revokes the authority of its registered agent for service of process in this state and consents that service of process in any action, suit, or proceeding based upon any cause of action arising in this state during the time the foreign limited liability company was authorized to transact business in this state may thereafter be made on such foreign limited liability company by service thereof upon the Office of the Secretary of State; and
5. An address to which a person may mail a copy of any process against the foreign limited liability company.
B. The application for withdrawal shall be executed by the foreign limited liability company by one of its managers, members, or other persons, or, if the foreign limited liability company is in the hands of a receiver or trustee, by such receiver or trustee on behalf of the foreign limited liability company.
Added by Laws 1992, c. 148, § 48, eff. Sept. 1, 1992.
§18-2048. Foreign limited liability company - Necessity of registration to transact business in state.
A. A foreign limited liability company transacting business in this state may not maintain an action, suit, or proceeding in a court of this state until it has registered in this state as provided in this act.
B. The failure of a foreign limited liability company to register in this state does not impair the validity of any contract or act of the foreign limited liability company or prevent the foreign limited liability company from defending any action, suit, or proceeding in any court of this state.
C. A foreign limited liability company, by transacting business in this state without registration, appoints the Office of the Secretary of State as its agent for service of process with respect to a cause of action arising out of the transaction of business in this state.
D. A member of a foreign limited liability company is not liable for the debts and obligations of the limited liability company solely by reason of such company's having transacted business in this state without a valid certificate of registration.
Added by Laws 1992, c. 148, § 49, eff. Sept. 1, 1992.
§18-2049. Foreign limited liability company - Acts not constituting transacting business in state.
foreign limited liability company - acts not
constituting transacting business in state
A. The following activities of a foreign limited liability company, among others, do not constitute transacting business within the meaning of this act:
1. Maintaining, defending, or settling any proceeding;
2. Holding meetings of its members or carrying on any other activities concerning its internal affairs;
3. Maintaining bank accounts;
4. Maintaining offices or agencies for the transfer, exchange and registration of the foreign limited liability company's own securities or maintaining trustees or depositaries with respect to those securities;
5. Selling through independent contractors;
6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;
7. Creating or acquiring indebtedness, mortgages and security interests in real or personal property;
8. Securing or collecting debts or enforcing mortgages and security interest in property securing the debts, including the holding, protecting, renting, maintaining and operating real or personal property in this state so acquired;
9. Transacting business wholly in interstate commerce;
10. Selling or transferring title to property in this state to any person;
11. Conducting an isolated transaction that is completed within thirty (30) days and that is not one in the course of repeated transactions of a like nature; or
12. Investing in or acquiring royalties or other non-operating mineral or leasehold interests and the execution of division orders, contracts for sale, leases and other instruments incidental to the ownership of the nonoperating interests.
B. For the purposes of this section, any foreign limited liability company which owns income-producing real or tangible personal property in this state, other than property exempted by subsection A of this section, will be considered transacting business in this state.
C. A person shall not be deemed to be doing business in this state solely by reason of being a member or manager of a domestic limited liability company or a foreign limited liability company.
D. This section does not apply in determining the contracts or activities that may subject a foreign limited liability company to service of process or taxation in this state or to regulation under any other law of this state.
Added by Laws 1992, c. 148, § 50, eff. Sept. 1, 1992. Amended by Laws 2001, c. 405, § 34, eff. Nov. 1, 2001; Laws 2004, c. 255, § 50, eff. Nov. 1, 2004.
§18-2050. Foreign limited liability company - Action to restrain transacting business in state.
The Attorney General may maintain an action to restrain a foreign limited liability company from transacting business in this state in violation of this act.
Added by Laws 1992, c. 148, § 51, eff. Sept. 1, 1992.
§18-2051. Action to recover judgment - Conditions.
A member may bring an action in the right of the limited liability company to recover a judgment in its favor if all of the following conditions are met:
1. Either:
a. management of the limited liability company is vested in a manager or managers who have the sole authority to cause the limited liability company to sue in its own right, or
b. management of the limited liability company is reserved to the members but the plaintiff does not have the authority to cause the limited liability company to sue in its own right under the provisions of an operating agreement; and
2. The plaintiff has made demand on those managers or those members with such authority requesting that such managers or such members cause the limited liability company to sue in its own right; and
3. The members or managers with such authority have wrongfully refused in the exercise of their business judgment to bring the action or, after adequate time to consider the demand, have failed to respond to such demand; and
4. The plaintiff:
a. is a member of the limited liability company at the time of bringing the action, and
b. was a member of the limited liability company at the time of the transaction of which he complains, or his status as a member of the limited liability company thereafter developed upon him pursuant to the terms of the operating agreement from a person who was a member at such time; and
5. The plaintiff fairly and adequately represents the interests of the members in enforcing the rights of the limited liability company.
Added by Laws 1992, c. 148, § 52, eff. Sept. 1, 1992.
§18-2052. Derivative action - Complaint.
In a derivative action, the complaint shall set forth with particularity the effort of the plaintiff to secure initiation of the action by the managers or the members who would otherwise have the authority to cause the limited liability company to sue in its own right.
Added by Laws 1992, c. 148, § 53, eff. Sept. 1, 1992.
§18-2053. Derivative action - Expenses - Disposition of proceeds.
A. If a derivative action is successful, in whole or in part, or if anything is received by the plaintiff as a result of a judgment, compromise or settlement of an action or claim, the court may award the plaintiff reasonable expenses, including reasonable attorneys' fees, and shall direct him to remit to the limited liability company the remainder of those proceeds received by him.
B. In any action hereafter instituted in the right of any domestic or foreign limited liability company by a member or members thereof, the court having jurisdiction, upon final judgment and a finding that the action was brought without reasonable cause, may require the plaintiff or plaintiffs to pay to the parties named as defendants the reasonable expenses, including attorneys' fees, incurred by them in the defense of such action.
Added by Laws 1992, c. 148, § 54, eff. Sept. 1, 1992.
§18-2054. Merger or consolidation.
A. Pursuant to an agreement of merger or consolidation, a domestic limited liability company may merge or consolidate with or into one or more domestic or foreign limited liability companies or other business entities. As used in this section, "business entity" means a domestic or foreign corporation, business trust, common law trust, or unincorporated business including a partnership, whether general or limited.
B. Unless otherwise provided in the articles of organization or the operating agreement, a merger or consolidation shall be approved by each domestic limited liability company which is to merge or consolidate by a majority of the membership interest or, if there is more than one class or group of members, then by a majority of the membership interest of each class or group. In connection with a merger or consolidation hereunder, rights or securities of, or interests in, a domestic limited liability company or other business entity which is a constituent party to the merger or consolidation may be exchanged for or converted into cash, property, rights or securities of, or interests in, the surviving or resulting domestic limited liability company or other business entity or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities of, or interests in, a domestic limited liability company or other business entity which is not the surviving or resulting limited liability company or other business entity in the merger or consolidation. Notwithstanding prior approval, an agreement of merger or consolidation may be terminated or amended pursuant to a provision for such termination or amendment contained in the agreement of merger or consolidation.
C. If a domestic limited liability company is merging or consolidating pursuant to this section, the domestic limited liability company or other business entity surviving or resulting in or from the merger or consolidation shall file articles of merger or consolidation with the Office of the Secretary of State. The articles of merger or consolidation shall state:
1. The name and jurisdiction of formation or organization of each of the limited liability companies or other business entities which are to merge or consolidate;
2. That an agreement of merger or consolidation has been approved and executed by each of the domestic limited liability companies or other business entities which is to merge or consolidate;
3. The name of the surviving or resulting domestic limited liability company or other business entity;
4. The future effective date or time, which shall be a specific date or time not later than a time on the nineteenth day after the filing, of the merger or consolidation if it is not to be effective upon the filing of the articles of merger or consolidation;
5. That the agreement of merger or consolidation is on file at a place of business of the surviving or resulting domestic limited liability company or other business entity, and shall state the address thereof;
6. That a copy of the agreement of merger or consolidation shall be furnished by the surviving or resulting domestic limited liability company or other business entity, upon request and without cost, to any member of any domestic limited liability company or any person holding an interest in any other business entity which is to merge or consolidate;
7. In the case of a merger, any amendments or changes in the articles of organization of the surviving domestic limited liability company that are to be effected by the merger;
8. In the case of a consolidation, that the articles of organization of the resulting domestic limited liability company shall be as set forth in an attachment to the articles of consolidation; and
9. If the surviving or resulting entity is not a domestic limited liability company or business entity formed or organized pursuant to the laws of this state, a statement that the surviving or resulting other business entity agrees to be served with process in this state in any action, suit, or proceeding for the enforcement of any obligation of any domestic limited liability company which is to merge or consolidate; irrevocably appoints the Secretary of State as its agent to accept service of process in any action, suit, or proceeding; and specifies the address to which process shall be mailed to the entity by the Secretary of State.
D. Any failure to file the articles of merger or consolidation in connection with a merger or consolidation which was effective prior to September 1, 1992, shall not affect the validity or effectiveness of any such merger or consolidation.
E. A merger or consolidation shall be effective upon the filing with the Secretary of State of articles of merger or consolidation, unless a future effective date or time is provided in the articles of merger or consolidation.
F. Articles of merger or consolidation terminate the separate existence of a domestic limited liability company which is not the surviving or resulting entity in the merger or consolidation.
G. Once any merger or consolidation is effective pursuant to this section, for all purposes of the laws of this state, all of the rights, privileges, and powers of each of the domestic limited liability companies and other business entities that have merged or consolidated and all property, real, personal, and mixed, and all debts due to each domestic limited liability company or other business entity, as well as all other things and causes of action belonging to each domestic limited liability company or other business entity shall be vested in the surviving or resulting domestic limited liability company or other business entity, and shall thereafter be the property of the surviving or resulting domestic limited liability company or other business entity as they were of each domestic limited liability company or other business entity that has merged or consolidated, and the title to any real property vested by deed or otherwise, under the laws of this state, in any domestic limited liability company or other business entity shall not revert or be in any way impaired by reason of this section, but all rights of creditors and all liens upon any property of each domestic limited liability company or other business entity shall be preserved unimpaired. All debts, liabilities and duties of each domestic limited liability company or other business entity that has merged or consolidated shall thereafter attach to the surviving or resulting domestic limited liability company or other business entity, and may be enforced against the surviving or resulting limited liability company or other entity to the same extent as if the debts, liabilities, and duties had been incurred or contracted by the surviving or resulting limited liability company or other entity. Unless otherwise agreed, a merger or consolidation of a domestic limited liability company, including a domestic limited liability company which is not the surviving or resulting entity in the merger or consolidation, shall not require the domestic limited liability company to wind up its affairs or pay its liabilities and distribute its assets.
Added by Laws 1992, c. 148, § 55, eff. Sept. 1, 1992. Amended by Laws 1997, c. 145, § 8, eff. Nov. 1, 1997; Laws 2004, c. 255, § 51, eff. Nov. 1, 2004.
§18-2054.1. Conversion of certain entities to a limited liability company.
ONVERSION OF CERTAIN ENTITIES
TO A LIMITED LIABILITY COMPANY
A. As used in this section, the term "business entity" means a domestic corporation, partnership, whether general or limited, business trust, common law trust, or other unincorporated association.
B. Any business entity may convert to a domestic limited liability company by complying with subsection H of this section and filing with the Secretary of State in accordance with Section 2007 of this title articles of conversion to a limited liability company that have been executed in accordance with Section 2006 of this title, to which shall be attached articles of organization that comply with Sections 2005 and 2008 of this title and have been executed by one or more authorized persons in accordance with Section 2006 of this title.
C. The articles of conversion to a limited liability company shall state:
1. The date on which the business entity was first formed;
2. The name of the business entity immediately prior to the filing of the articles of conversion to limited liability company;
3. The name of the limited liability company as set forth in its articles of organization filed in accordance with subsection B of this section; and
4. The future effective date or time, which shall be a specified date or time not later than a time on the nineteenth day after the filing, of the conversion to a limited liability company if it is not to be effective upon the filing of the articles of conversion to a limited liability company and the articles of organization.
D. Upon the filing in the Office of the Secretary of State of the articles of conversion to a limited liability company and the articles of organization or upon the future effective date or time of the articles of conversion to limited liability company and the articles of organization, the business entity shall be converted into a domestic limited liability company and the limited liability company shall thereafter be subject to all of the provisions of this act, except that notwithstanding Section 2004 of this title, the existence of the limited liability company shall be deemed to have commenced on the date the business entity was formed.
E. The conversion of any business entity into a domestic limited liability company shall not be deemed to affect any obligations or liabilities of the business entity incurred prior to its conversion to a domestic limited liability company or the personal liability of any person incurred prior to the conversion.
F. When any conversion shall have become effective under this section, for all purposes of the laws of this state, all of the rights, privileges and powers of the business entity that has converted, and all property, real, personal and mixed, and all debts due to the business entity, as well as all other things and causes of action belonging to the business entity, shall be vested in the domestic limited liability company and shall thereafter be the property of the domestic limited liability company as they were of the business entity that has converted, and the title to any real property vested by deed or otherwise in the business entity shall not revert or be in any way impaired by reason of this act, but all rights of creditors and all liens upon any property of the business entity shall be preserved unimpaired, and all debts, liabilities and duties of the business entity that has converted shall thenceforth attach to the domestic limited liability company and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.
G. Unless otherwise agreed or otherwise provided by any laws of this state applicable to the converting business entity, the converting business entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the business entity and shall constitute a continuation of the existence of the converting business entity in the form of a domestic limited liability company. When a business entity has been converted to a limited liability company pursuant to this section, the limited liability company shall, for all purposes of the laws of this state, be deemed to be a continuation of the converting business entity.
H. Before filing the articles of conversion of a business entity to a limited liability company with the Office of the Secretary of State, the conversion shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the business entity and the conduct of its business or by applicable law, as appropriate, and an operating agreement shall be approved by the same authorization required to approve the conversion.
I. In connection with a conversion hereunder, rights or securities of or interests in the business entity that is to be converted to a domestic limited liability company may be exchanged for or converted into cash, property, or rights or securities of or interests in the domestic limited liability company or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another domestic limited liability company or other business entity.
J. The provisions of this section shall not be construed to limit the accomplishment of a change in the law governing, or the domicile of, a business entity to this state by any other means provided for in an operating agreement or other agreement or as otherwise permitted by law, including by the amendment of an operating agreement or other agreement.
Added by Laws 2001, c. 405, § 35, eff. Nov. 1, 2001. Amended by Laws 2004, c. 255, § 52, eff. Nov. 1, 2004.
§18-2054.2. Approval of conversion of a limited liability company.
PPROVAL OF CONVERSION OF
A LIMITED LIABILITY COMPANY
A. A domestic limited liability company may convert to a business entity upon the authorization of such conversion in accordance with this section. As used in this section, the term "business entity" means a domestic corporation, partnership, whether general or limited, business trust, common law trust, or other unincorporated association.
B. If the operating agreement specifies the manner of authorizing a conversion of the limited liability company, the conversion shall be authorized as specified in the operating agreement.
C. If the operating agreement does not specify the manner of authorizing a conversion of the limited liability company and does not prohibit a conversion of the limited liability company, the conversion shall be authorized in the same manner as is specified in the operating agreement for authorizing a merger or consolidation that involves the limited liability company as a constituent party to a merger or consolidation.
D. If the operating agreement does not specify the manner of authorizing a conversion of the limited liability company or a merger or consolidation that involves the limited liability company as a constituent party and does not prohibit a conversion of the limited liability company, the conversion shall be authorized by the approval of a majority of the membership interest or, if there is more than one class or group of members, then by a majority of the membership interest in each class or group of members. Notwithstanding the foregoing, in addition to any other authorization required by this section, if the business entity into which the limited liability company is to convert does not afford all of its interest holders protection against personal liability for the debts of the business entity, the conversion must be authorized by any and all members who would be exposed to personal liability.
E. Unless otherwise agreed, the conversion of a domestic limited liability company to another business entity pursuant to this section shall not require the limited liability company to wind up its affairs or pay its liabilities and distribute its assets.
F. In connection with a conversion of a domestic limited liability company to another business entity pursuant to this section, rights or securities of or interests in the domestic limited liability company which are to be converted may be exchanged for or converted into cash, property, rights or securities of or interests in the business entity into which the domestic limited liability company is being converted or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities of or interests in another business entity.
G. If the governing act of the domestic business entity into which the limited liability company is converting does not provide for the filing of a conversion notice with the Secretary of State, articles of conversion executed in accordance with Section 2006 of this title, shall be filed in the office of the Secretary of State in accordance with Section 2007 of this title. The articles of conversion shall state:
1. The name of the limited liability company and, if it has been changed, the name under which its articles of organization were originally filed;
2. The date of filing of its original articles of organization with the Secretary of State;
3. The future effective date or time, which shall be a date or time not later than the nineteenth day after the time of the filing, of the conversion if it is not to be effective upon the filing of the articles of conversion; and
4. That the conversion has been approved in accordance with this section.
H. Upon the filing of a conversion notice with the Secretary of State, whether under subsection G of this section or under the governing act of the domestic business entity into which the limited liability company is converting, the filing of any formation document required by the governing act of the domestic entity into which the limited liability company is converting, and payment to the Secretary of State of all prescribed fees, the Secretary of State shall certify that the limited liability company has filed all documents and paid all required fees, and thereupon the limited liability company shall cease to exist as a limited liability company of this state. The Secretary of State's certificate shall be prima facie evidence of the conversion by the limited liability company.
Added by Laws 2001, c. 405, § 36, eff. Nov. 1, 2001. Amended by Laws 2004, c. 255, § 53, eff. Nov. 1, 2004.
§18-2054.3. Appraisal rights.
An operating agreement or other agreement may provide that contractual appraisal rights with respect to a membership interest or another interest in a limited liability company shall be available for any class or group of members or membership interests in connection with any amendment of an operating agreement, any merger or consolidation to which the limited liability company is a constituent party, any conversion of the limited liability company to another business entity, any transfer to or domestication in any jurisdiction by the limited liability company, or the sale of all or substantially all of the limited liability company's assets. The district court shall have jurisdiction to hear and determine any matter relating to any such appraisal rights.
Added by Laws 2004, c. 255, § 54, eff. Nov. 1, 2004.
§18-2054.4. Establishment of one or more series of members, managers or membership interests - Enforceability of debts, liabilities, obligations and expenses - Powers and duties - Voting rights - Management of series - Distributions - Termination of series - Registration of foreign company.
A. An operating agreement may establish or provide for the establishment of one or more designated series of members, managers or membership interests having separate rights, powers or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations, and any such series may have a separate business purpose or investment objective.
B. Notwithstanding anything to the contrary set forth in this act or under other applicable law, if an operating agreement establishes or provides for the establishment of one or more series, and if separate and distinct records are maintained for any such series and the assets associated with any such series are held, directly or indirectly, including through a nominee or otherwise, and accounted for separately from the other assets of the limited liability company, or any other series thereof, and if the operating agreement so provides, and if notice of the limitation on liabilities of a series as referenced in this subsection is set forth in the articles of organization of the limited liability company, then the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and not against the assets of the limited liability company generally or any other series thereof, and, unless otherwise provided in the operating agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the limited liability company generally or any other series thereof shall be enforceable against the assets of the series. Notice in articles of organization of the limitation on liabilities of a series as referenced in this subsection shall be sufficient for all purposes regardless of whether the limited liability company has established any series when the notice is included in the articles of organization, and there shall be no requirement that any specific series of the limited liability company be referenced in the notice. The fact that articles of organization containing the foregoing notice of the limitation on liabilities of a series are on file in the office of the Secretary of State shall constitute notice of the limitation on liabilities of a series.
C. Notwithstanding Section 2022 of this title, under an operating agreement or under another agreement, a member or manager may agree to be obligated personally for any or all of the debts, obligations and liabilities of one or more series.
D. An operating agreement may provide for classes or groups of members or managers associated with a series having such relative rights, powers and duties as the operating agreement may provide, and may make provision for the future creation in the manner provided in the operating agreement of additional classes or groups of members or managers associated with the series having such relative rights, powers and duties as may from time to time be established, including rights, powers and duties senior to existing classes and groups of members or managers associated with the series. An operating agreement may provide for the taking of an action, including the amendment of the operating agreement, without the vote or approval of any member or manager or class or group of members or managers, including an action to create under the provisions of the operating agreement a class or group of the series of membership interests that was not previously outstanding. An operating agreement may provide that any member or class or group of members associated with a series shall have no voting rights.
E. An operating agreement may grant to all or certain identified members or managers or a specified class or group of the members or managers associated with a series the right to vote separately or with all or any class or group of the members or managers associated with the series, on any matter. Voting by members or managers associated with a series may be on a per capita, number, financial interest, class, group or any other basis.
F. Unless otherwise provided in an operating agreement, the management of a series shall be vested in the members associated with the series in proportion to their membership interest, with the decision of members owning a majority of the membership interest controlling; provided, however, that if an operating agreement provides for the management of the series, in whole or in part, by a manager, the management of the series, to the extent so provided, shall be vested in the manager who shall be chosen in the manner provided in the operating agreement. The manager of the series shall also hold the offices and have the responsibilities accorded to the manager as set forth in an operating agreement. A series may have more than one manager. Subject to paragraph 3 of Section 2014 of this title, a manager shall cease to be a manager with respect to a series as provided in an operating agreement. Except as otherwise provided in an operating agreement, any event under this chapter or in an operating agreement that causes a manager to cease to be a manager with respect to a series shall not, in itself, cause the manager to cease to be a manager of the limited liability company or with respect to any other series thereof.
G. Subject to subsections H and K of this section, and unless otherwise provided in an operating agreement, at the time a member associated with a series that has been established in accordance with subsection B of this section becomes entitled to receive a distribution with respect to the series, the member has the status of, and is entitled to all remedies available to, a creditor of the series, with respect to the distribution. An operating agreement may provide for the establishment of a record date with respect to allocations and distributions with respect to a series.
H. Notwithstanding Section 2040 of this title, a limited liability company may make a distribution with respect to a series that has been established in accordance with subsection B of this section. A limited liability company shall not make a distribution with respect to a series that has been established in accordance with subsection B of this section to a member to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the series, other than liabilities to members on account of their membership interests with respect to the series and liabilities for which the recourse of creditors is limited to specified property of the series, exceed the fair value of the assets associated with the series, except that the fair value of property of the series that is subject to a liability for which the recourse of creditors is limited shall be included in the assets associated with the series only to the extent that the fair value of that property exceeds that liability. For purposes of the immediately preceding sentence, the term "distribution" shall not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program. A member who receives a distribution in violation of this subsection, and who knew or should have known at the time of the distribution that the distribution violated this subsection, shall be liable to a series for the amount of the distribution. A member who receives a distribution in violation of this subsection, and who did not know and had no reason to know at the time of the distribution that the distribution violated this subsection, shall not be liable for the amount of the distribution. Subject to subsection C of Section 2040 of this title, which shall apply to any distribution made with respect to a series under this subsection, this subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution.
I. Unless otherwise provided in the operating agreement, a member shall cease to be associated with a series and to have the power to exercise any rights or powers of a member with respect to the series upon the assignment of all of the member's membership interest with respect to the series. Except as otherwise provided in an operating agreement, any event under this chapter or an operating agreement that causes a member to cease to be associated with a series shall not, in itself, cause the member to cease to be associated with any other series or terminate the continued membership of a member in the limited liability company or cause the termination of the series, regardless of whether the member was the last remaining member associated with the series.
J. Subject to Section 2037 of this title, except to the extent otherwise provided in the operating agreement, a series may be terminated and its affairs wound up without causing the dissolution of the limited liability company. The termination of a series established in accordance with subsection B of this section shall not affect the limitation on liabilities of the series provided by subsection B of this section. A series is terminated and its affairs shall be wound up upon the dissolution of the limited liability company under Section 2037 of this title or otherwise upon the first to occur of the following:
1. At the time specified in the operating agreement;
2. Upon the happening of events specified in the operating agreement;
3. Unless otherwise provided in the operating agreement, upon the affirmative vote or written consent of the members of the limited liability company associated with the series or, if there is more than one class or group of members associated with the series, then by each class or group of members associated with the series, in either case, by members associated with the series who own more than two-thirds of the then-current membership interest owned by all of the members associated with the series or by the members in each class or group of the series, as appropriate; or
4. The termination of the series under subsection L of this section.
K. Unless otherwise provided in the operating agreement, a manager associated with a series who has not wrongfully terminated the series or, if none, the members associated with the series or a person approved by the members associated with the series or, if there is more than one class or group of members associated with the series, then by each class or group of members associated with the series, in either case, by a majority of the membership interest owned by all of the members associated with the series or by the members in each class or group associated with the series, as appropriate, may wind up the affairs of the series; but, if the series has been established in accordance with subsection B of this section, the district court, upon cause shown, may wind up the affairs of the series upon application of any member associated with the series, the member's personal representative or assignee, and in connection therewith, may appoint a liquidating trustee. The persons winding up the affairs of a series may, in the name of the limited liability company and for and on behalf of the limited liability company and the series, take all actions with respect to the series as are permitted under subsection A of Section 2039 of this title. The persons winding up the affairs of a series shall provide for the claims and obligations of the series and distribute the assets of the series as provided in Section 2040 of this title, which section shall apply to the winding up and distribution of assets of a series. Actions taken in accordance with this subsection shall not affect the liability of members and shall not impose liability on a liquidating trustee.
L. On application by or for a member or manager associated with a series established in accordance with subsection B of this section, the district court may decree termination of the series whenever it is not reasonably practicable to carry on the business of the series in conformity with an operating agreement.
M. If a foreign limited liability company that is registering to do business in this state in accordance with Section 2043 of this title is governed by an operating agreement that establishes or provides for the establishment of designated series of members, managers or membership interests having separate rights, powers or duties with respect to specified property or obligations of the foreign limited liability company or profits and losses associated with specified property or obligations, that fact shall be so stated on the application for registration as a foreign limited liability company. In addition, the foreign limited liability company shall state on the application whether the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to a particular series, if any, shall be enforceable against the assets of the series only, and not against the assets of the foreign limited liability company generally or any other series thereof, and, unless otherwise provided in the operating agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the foreign limited liability company generally or any other series thereof shall be enforceable against the assets of the series.
Added by Laws 2004, c. 255, § 55, eff. Nov. 1, 2004.
§18-2055. Fees.
The Secretary of State shall charge and collect the following fees:
1. For filing the original articles of organization, a fee of One Hundred Dollars ($100.00);
2. For filing amended, corrected or restated articles of organization, a fee of Fifty Dollars ($50.00);
3. For filing articles of merger or consolidation and issuing a certificate of merger or consolidation or filing articles of conversion, a fee of One Hundred Dollars ($100.00);
4. For filing articles of dissolution and issuing a certificate of cancellation, a fee of Fifty Dollars ($50.00);
5. For filing a certificate of correction of statements in an application for registration of a foreign limited liability company, a fee of One Hundred Dollars ($100.00);
6. For issuing a certificate for any purpose whatsoever, a fee of Ten Dollars ($10.00);
7. For filing an application for reservation of a name, or for filing a notice of the transfer or cancellation of any name reservation, a fee of Ten Dollars ($10.00);
8. For filing a statement of change of address of the principal office or resident agent, or both, or the resignation of a resident agent, a fee of Twenty-five Dollars ($25.00);
9. For filing an application for registration as a foreign limited liability company, a fee of Three Hundred Dollars ($300.00);
10. For filing an application of withdrawal as provided in Section 2047 of this title, a fee of One Hundred Dollars ($100.00);
11. For any service of notice, demand, or process upon the Secretary of State as resident agent of a limited liability company, a fee of Twenty-five Dollars ($25.00), which amount may be recovered as taxable costs by the party to be sued, action, or proceeding causing such service to be made if such party prevails therein; and
12. For acting as the registered agent, a fee of Forty Dollars ($40.00) shall be paid on July 1 each year to the Office of the Secretary of State.
All fees shall be properly accounted for and shall be paid into the State Treasury monthly. All fees received by the Secretary of State pursuant to the provisions of this section shall be paid to the credit of the Revolving Fund for the Office of the Secretary of State created pursuant to Section 276.1 of Title 62 of the Oklahoma Statutes.
Added by Laws 1992, c. 148, § 56, eff. Sept. 1, 1992. Amended by Laws 1993, c. 366, § 25, eff. Sept. 1, 1993; Laws 1994, c. 382, § 19, eff. Sept. 1, 1994; Laws 2001, c. 406, § 13, emerg. eff. June 4, 2001; Laws 2002, c. 22, § 3, emerg. eff. March 8, 2002.
NOTE: Laws 2001, c. 405, § 37 repealed by Laws 2002, c. 22, § 34, emerg. eff. March 8, 2002.
§18-2055.1. Failure to pay registered agent fees.
FAILURE TO PAY REGISTERED AGENT FEES
A domestic or foreign limited liability company for which the Secretary of State acts as the registered agent that fails to pay the registered agent fee by the due date as provided in paragraph 12 of Section 2055 of this title shall be subject to the provisions of Sections 29 and 39 of this act.
Added by Laws 1996, c. 69, § 15, eff. Nov. 1, 1996. Amended by Laws 2001, c. 405, § 38, eff. Nov. 1, 2001.
§18-2055.2. Annual certificate for domestic limited liability company and foreign limited liability company.
ANNUAL CERTIFICATE FOR DOMESTIC LIMITED LIABILITY
COMPANY AND FOREIGN LIMITED LIABILITY COMPANY
A. Every domestic limited liability company and every foreign limited liability company registered to do business in this state shall file a certificate each year in the Office of the Secretary of State which shall confirm it is an active business and include its principal place of business address.
B. The annual certificate shall be due on July 1 following the close of the calendar year until the dissolution of the articles of organization or the withdrawal of the foreign limited liability company has been filed with the Secretary of State.
C. The Secretary of State shall, at least sixty (60) days prior to July 1 of each year, cause to be mailed a notice of the annual certificate to each domestic limited liability company and each foreign limited liability company required to comply with the provisions of this section in care of its registered agent; or, if there is no agent listed upon the records of the Secretary of State, the last known principal place of business address of the limited liability company.
D. A domestic limited liability company or foreign limited liability company that neglects, refuses or fails to file the annual certificate within sixty (60) days after the date due shall cease to be in good standing as a domestic limited liability company or registered as a foreign limited liability company in this state.
E. Until dissolution or withdrawal, a domestic limited liability company that has ceased to be in good standing or a foreign limited liability company that has ceased to be registered by reason of the failure to file the annual certificate with the Secretary of State may be restored to and have the status of a domestic limited liability company in good standing or a foreign limited liability company that is registered in this state upon the filing of the annual certificate for each year for which the domestic limited liability company or foreign limited liability company neglected, refused or failed to file the annual certificate within three (3) years from the date it is due.
F. A domestic limited liability company that has ceased to be in good standing by reason of its neglect, refusal or failure to file an annual certificate with the Secretary of State or pay the registered agent fee to the Secretary of State shall remain a domestic limited liability company formed under this act until dissolution of its articles of organization. The Secretary of State shall not accept for filing any certificate or articles, except a resignation of a registered agent when a successor registered agent is not being appointed, required or permitted by this act to be filed in respect to any domestic limited liability company or foreign limited liability company which has neglected, refused or failed to file an annual certificate, and shall not issue any certificate of good standing with respect to the domestic limited liability company or foreign limited liability company, unless or until the domestic limited liability company or foreign limited liability company shall have been restored to and have the status of a domestic limited liability company in good standing or a foreign limited liability company duly registered in this state.
G. A domestic limited liability company that has ceased to be in good standing or a foreign limited liability company that has ceased to be registered in this state by reason of its neglect, refusal or failure to file an annual certificate or pay an annual registered agent fee to the Secretary of State may not maintain any action, suit or proceeding in any court of this state until such domestic limited liability company or foreign limited liability company has been restored to and has the status of a domestic limited liability company or foreign limited liability company in good standing or duly registered in this state. An action, suit or proceeding may not be maintained in any court of this state by any successor or assignee of the domestic limited liability company or foreign limited liability company on any right, claim or demand arising out of the transaction of business by the domestic limited liability company after it has ceased to be in good standing or a foreign limited liability company that has ceased to be registered in this state until the domestic limited liability company or foreign limited liability company, or any person that has acquired all or substantially all of its assets, has filed its annual certificate with the Secretary of State or paid its registered agent fee to the Secretary of State then due and payable, together with penalties.
H. The neglect, refusal or failure of a domestic limited liability company or foreign limited liability company to file an annual certificate or pay a registered agent fee to the Secretary of State shall not impair the validity on any contract, deed, mortgage, security interest, lien or act of the domestic limited liability company or foreign limited liability company or prevent the domestic limited liability company or foreign limited liability company from defending any action, suit or proceeding with any court of this state.
I. A member or manager of a domestic limited liability company or foreign limited liability company is not liable for the debts, obligations or liabilities of the domestic limited liability company or foreign limited liability company solely by reason of the neglect, refusal or failure of the domestic limited liability company or foreign limited liability company to file an annual certificate or pay a registered agent fee to the Secretary of State or by reason of the domestic limited liability company or foreign limited liability company ceasing to be in good standing or duly registered.
Added by Laws 2001, c. 405, § 39, eff. Nov. 1, 2001.
§18-2056. Action to compel execution or filing of articles or other documents.
Any person who is adversely affected by the failure or refusal of any person to execute and file any articles or other document to be filed under this act may petition the district court in the county where the registered office of the limited liability company is located or, if no such address is on file with the Secretary of State, in Oklahoma County, to direct the execution and filing of the articles or other document. If the court finds that it is proper for the articles or other document to be executed and filed and that there has been failure or refusal to execute and file such document, it shall order the Secretary of State to file the appropriate articles or other document.
Added by Laws 1992, c. 148, § 57, eff. Sept. 1, 1992.
§18-2057. Application of act to foreign and interstate commerce.
The provisions of this act shall apply to commerce with foreign nations and among the several states only as permitted by law.
Added by Laws 1992, c. 148, § 58, eff. Sept. 1, 1992.
§18-2058. Rules of construction of act.
RULES OF CONSTRUCTION OF ACT
A. The rules that statutes in derogation of the common law are to be strictly construed shall have no application to the Oklahoma General Corporation Act.
B. The law of estoppel shall apply to this act.
C. The law of agency shall apply under this act.
D. It is the policy of this act to give the maximum effect to the principle of freedom of contract and to the enforceability of operating agreements.
E. This act shall not be construed so as to impair the obligations of any contract existing when the act goes into effect, nor to affect any action or proceedings begun or right accrued before this act takes effect.
Added by Laws 1992, c. 148, § 59, eff. Sept. 1, 1992. Amended by Laws 2001, c. 405, § 40, eff. Nov. 1, 2001.
§18-2059. District court - Jurisdiction.
The district court shall have jurisdiction to enforce the provisions of this act.
Added by Laws 1992, c. 148, § 60, eff. Sept. 1, 1992.
§18-2060. Cases not covered by this act.
In any case not provided for in this act, the rules of law and equity, including the law merchant, shall govern.
Added by Laws 1992, c. 148, § 61, eff. Sept. 1, 1992.
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