State Codes and Statutes
Statutes > Utah > Title-03 > Chapter-01 > 3-1-113-1-11. Certificates of and termination of membership -- Dividends anddistribution of reserves -- Preferred stock -- Certificates of interest -- Unclaimed credits.
(1) No certificate for membership or stock shall be issued until fully paid for, but bylawsmay provide that a member may vote and hold office prior to payment in full for his membershipor stock.
(2) Dividends in excess of eight per centum per annum on the actual cash value of theconsideration received by the association may not be paid on common stock or membershipcapital, but dividends may be cumulative if so provided in the articles or bylaws.
(3) (a) Savings in excess of dividends and additions to reserves and surplus shall bedistributed on the basis of patronage.
(b) The bylaws may provide that any distribution to a nonmember, who is eligible formembership, may be credited to that nonmember until the amount of the distribution equals thevalue of a membership certificate, or a share of the association's common stock.
(c) The distribution credited to the account of the nonmember may be transferred to themembership fund at the option of the board, if, after two years, the amount is less than the valueof the membership certificate or a share of common stock.
(4) (a) The bylaws shall provide the time and manner of settlement of membershipinterests with members who withdraw from the association or whose membership is otherwiseterminated.
(b) Provisions for forfeiture of membership interests may be made in the bylaws.
(c) After the termination of the membership, for whatever cause, the withdrawingmember shall exercise no further control over the facilities, assets, or activities of the association. The withdrawing member may not claim or receive any assets of the association except asfollows:
(i) undistributed patronage allocated to the withdrawing member may be paid to thewithdrawing member pursuant to the association's bylaws;
(ii) the withdrawing member may be reimbursed for the par value of membership orstock in the association pursuant to the association's articles, bylaws, and membership agreement;and
(iii) the withdrawing member shall receive any distributions to which the member isentitled pursuant to Subsection 3-1-20(3)(d).
(5) (a) An association may issue preferred stock to members and nonmembers.
(b) Preferred stock may be redeemed or retired by the association on the terms andconditions as are provided in the articles or bylaws and printed on the stock certificates.
(c) Preferred stockholders may not vote, but no change in their priority or preferencerights shall be effective until the written consent of the holders of a majority of the preferredstock has been obtained.
(d) Payment for preferred stock may be made in cash, services, or property on the basisof the fair value of the stock, services, and property, as determined by the board.
(6) (a) The association may issue to each member a certificate of interest evidencing themember's interest in any fund, capital investment, or other assets of the association.
(b) Those certificates may be transferred only to the association, or to other purchasers,as approved by the board of directors, under the terms and conditions provided for in the bylaws.
(7) (a) As used in this Subsection (7), "reasonable effort" means:
(i) a letter to a member's or former member's last-known address, a listing of unclaimed
credits in an association publication, and the posting of a list of unclaimed credits at theassociation's principal place of business; and
(ii) publishing a list of the unclaimed credits exceeding $25 each, or greater, in anewspaper of general circulation in the area where the association's principal offices are located.
(b) The association may retain revolving certificates of interest described in thisSubsection (7) as an exception to the provisions of Title 67, Chapter 4a, Unclaimed Property Act,if:
(i) the board of directors of the association determines to revolve the certificates and thecertificates remain unclaimed by the association's members or former members for five yearsafter the credit is declared;
(ii) the association is authorized to retain those credits by its bylaws;
(iii) the board of directors of the association approves the retention; and
(iv) before retaining the credits, the association makes a reasonable effort to locate andcommunicate the issuance of the credits to the members or former members.
(c) (i) The board of directors may either add the unclaimed credits as a contribution tothe capital fund, or use them to establish an agricultural educational program as described inSubsection (7)(c)(ii).
(ii) If the board of directors chooses to use the unclaimed credits to establish anagricultural educational program, it shall establish an agricultural educational program to:
(A) provide scholarships for low income and worthy students to colleges anduniversities;
(B) provide funding for director training and education;
(C) provide funds for cooperative education programs in secondary or higher educationinstitutions; or
(D) provide other educational opportunities.
(iii) The board of directors may not distribute unclaimed credits to current patrons of theassociation.
(iv) Upon dissolution of an association, the board of directors shall report and remitunclaimed credits to the Division of Unclaimed Property.
(d) (i) Each association that applies credits under Subsection (7)(c) during a calendaryear shall file an annual report with the State Treasurer by April 15 of the following year.
(ii) The report shall specify:
(A) the dollar amount of credits applied during the year;
(B) the dollar amount of credit paid to claimants during the year; and
(C) the aggregate dollar amount of credits applied since January 1, 1996.
(e) At any time after the association retains credits under this Subsection (7), theassociation shall pay the members, former members, or their successors in interest, the value ofthe credit, without interest, if the members, former members, or their successors in interest:
(i) file a written claim for payment with the association; and
(ii) surrender the certificate issued by the association that evidences the credit.
Amended by Chapter 378, 2010 General Session
