A telephone cooperative may sell its assets as follows:

(A) A sale (which term includes a sale, lease, exchange, or other disposition of assets, except a mortgage of or other security interest in the assets) of all, or substantially all, the property and assets, with or without the goodwill, of a telephone cooperative may be made upon such terms and conditions and for such consideration (which may consist in whole or in part of money or property, real or personal, including shares of any other corporation, domestic or foreign) as is authorized in the following manner:

(1) The board of directors shall adopt a resolution recommending such sale and directing the submission thereof to a vote at a meeting of members, which may be either an annual or a special meeting.

(2) Written or printed notice must be given to each member of record entitled to vote at such meeting within the time and in the manner provided for the giving of notice of meetings of members. The notice shall state whether the meeting is an annual or a special meeting and shall state that the purpose, or one of the purposes, of the meeting is to consider the proposed sale.

(3) At such meeting, the members may authorize such sale and may fix or may authorize the board of directors to fix any or all of the terms and conditions thereof, including the consideration to be received by the telephone cooperative. Each member of the telephone cooperative is entitled to vote thereon. Such authorization requires the affirmative vote of at least two-thirds of all the members of the telephone cooperative.

(B) The articles of incorporation or bylaws of any telephone cooperative may contain a provision prescribing for approval of any sale of assets by a vote greater than, but in no event less than, two-thirds of all members.

(C) After such authorization by a vote of the membership, the board of directors, in its discretion, may abandon such sale of assets, subject to the rights of third parties under any contract relating thereto, without further action or approval by members.

(D) A sale (which term includes a sale, lease, exchange, or any other disposition of assets, except a mortgage of or other security interest in the assets) of less than all or substantially all of the property and assets of the cooperative may be undertaken without following the procedures of this section upon determination of the board of directors that such sale will not affect the quality of service provided by the cooperative or the economic stability of the cooperative. After the board of directors makes this finding, the assets may be sold upon such terms and conditions and for such consideration as determined by the board, provided that two-thirds of the directors vote to approve the terms, conditions, and price and thereafter two-thirds of the board approves the sale.

HISTORY: 1994 Act No. 392, Section 1.