Effect of Organic Rules

(a)The relations between a limited cooperative association and its members are consensual. Unless required, limited, or prohibited by this Act, the organic rules may provide for any matter concerning the relations among the members of the association and between the members and the association, the activities of the association, and the conduct of its activities.

(b)The matters referred to in Paragraphs

(1)through

(9)or

(11)of this Subsection shall be varied only in the articles of organization. The articles shall: CH. 17 THE GUAM UNIFORM LIMITED COOPERATIVE ASSOCIATION ACT

(1)state a term of existence for the association under § 17104(c);

(2)limit or eliminate the acceptance of new or additional members by the initial board of directors under § 17302(b);

(3)specify the limitations on the obligations and liability of members for association obligations under § 17504;

(4)require a notice of an annual members meeting to state a purpose of the meeting under § 17508(b);

(5)specify the board of directors meeting quorum under § 17815(a);

(6)specify the matters the board of directors may consider in making a decision under § 17820;

(7)specify causes of dissolution under § 171202(1);

(8)delegate amendment of the bylaws to the board of directors pursuant to § 17405(f);

(9)provide for member approval of asset dispositions under § 171401;

(10)subject to § 17820, provide for the elimination or limitation of liability of a director to the association or its members for money damages consistent with § 17818;

(11)provide for permitting or making obligatory indemnification under § 17901(a); and

(12)provide for any matters that may be contained in the organic rules, including those under Subsection

(c)of this Section.

(c)The matters referred to in Paragraphs

(1)through

(25)of this Subsection may be varied only in the organic rules. The organic rules may:

(1)require more information to be maintained under § 17110 or provided to members under § 17505(j);

(2)provide restrictions on transactions between a member and an association under § 17111;

(3)provide for the percentage and manner of voting on amendments to the organic rules by district, class, or voting group under § 17404(a);

(4)provide for the percentage vote required to amend the bylaws concerning the admission of new members under § 17405(e)(5);

(5)provide for terms and conditions to become a member under §§ 17502;

(6)restrict the manner of conducting members meetings under §§ 17506(c) and 17507(e);

(7)designate the presiding officer of members meetings under §§ 17506(e) and 17507(g);

(8)require a statement of purposes in the annual meeting notice under § 17508(b);

(9)increase quorum requirements for members’ meetings under § 17510 and board of directors’ meetings under § 17815;

(10)allocate voting power among members, including patron members and investor members, and provide for the manner of member voting and action as permitted by §§ 17511 through 17517;

(11)authorize investor members and expand or restrict the transferability of members’ interests to the extent provided in §§ 17602 through 17604;

(12)provide for enforcement of a marketing contract under § 17704(a); CH. 17 THE GUAM UNIFORM LIMITED COOPERATIVE ASSOCIATION ACT

(13)provide for qualification, election, terms, removal, filling vacancies, and member approval for compensation of directors in accordance with §§ 17803 through 17805, 17807, 17809, and 17810;

(14)restrict the manner of conducting board meetings and taking action without a meeting under §§ 17811 and 17812;

(15)provide for frequency, location, notice and waivers of notice for board meetings under §§ 17813 and 17814;

(16)increase the percentage of votes necessary for board action under § 17816(b);

(17)provide for the creation of committees of the board of directors and matters related to the committees in accordance with § 17817;

(18)provide for officers and their appointment, designation, and authority under § 17822;

(19)provide for forms and values of contributions under § 171002;

(20)provide for remedies for failure to make a contribution under § 171003(b);

(21)provide for the allocation of profits and losses of the association, distributions, and the redemption or repurchase of distributed property other than money in accordance with §§ 171004 through 171007;

(22)specify when a member’s dissociation is wrongful and the liability incurred by the dissociating member for damage to the association under § 171101(b) and (c);

(23)provide the personal representative, or other legal representative of, a deceased member or a member adjudged incompetent with additional rights under § 171103;

(24)increase the percentage of votes required for board of director approval of:

(A)a resolution to dissolve under § 171205(a)(1);

(B)a proposed amendment to the organic rules under § 17402(a)(1);

(C)a proposed disposition of assets under § 171403(1); and

(25)vary the percentage of votes required for members approval of:

(A)a resolution to dissolve under § 171205;

(B)an amendment to the organic rules under § 17405;

(C)a disposition of assets under § 171404.

(d)The organic rules must address members’ contributions pursuant to § 171001.

(e)The organic rules shall provide that investor members shall not hold more than twenty percent (20%) of the total governance rights, regardless of capital contributions, and that no investor member, individually or collectively, may take control or exert significant influence over the decision-making process of the association.