FIRST AMENDED AND RESTATED ARTICLES OF INCORPORATION OF THE CLEVELAND SOLAR COOPERATIVE
Article 1. Name
The name of the cooperative association is Cleveland Solar Cooperative (the “Cooperative”).Article 2. Principal Place of Business
The principal place of business of the Cooperative shall be in the City of Cleveland, Cuyahoga County, Ohio, or such other place as the Board of Directors of the Cooperative (the “Board of Directors”) may from time to time determine.Article 3. Purposes
3.1 The Cooperative shall operate on a cooperative basis for the mutual benefit of its Members for the following purposes:a. To provide centralized purchasing and financing services relating to solar energy, energy efficiency, and sustainable products and services for its Members;
b. To facilitate the process of identifying and implementing solar energy and energy efficient and sustainable projects and services that are located in the communities of and/or are available to its Members;
c. To build community financial power through Member investment and aggregated buying power;
d. To connect communities and build power through the proliferation of energy democracy; and
e. To engage in any other activity for which a cooperative association may be organized under Ohio Revised Code Chapter 1729 (the “Act”).
Article 4. Powers.
The Cooperative is a cooperative association organized under the Act. It has all powers and rights conferred on cooperative associations by the Act. These powers include, without limitation, the power to form, acquire or hold an interest in any corporation or other entity and the power to enter into partnerships, joint ventures, and other business relationships.Article 5. Membership and Voting
5.1 Member. Membership in the Cooperative is restricted to any person or entity who has been admitted as a Member to the Cooperative. Each Member admitted to the Cooperative must purchase one and only one share of Membership Stock at its stated value. The qualifications for Cooperative membership are set forth in the Cooperative’s Bylaws (the “Bylaws”). The Board of Directors has the authority to establish such additional terms and conditions, qualifications, methods of acceptance, duties, rights, and privileges of Cooperative Membership as it may from time to time deem advisable. The Board of Directors may refuse membership at its sole discretion.5.2 Member Classes. The Cooperative is a membership cooperative that shall have at least one class of Members. The Board of Directors is granted the authority, at its discretion, to establish new classes of Members from time to time by written resolution which shall fix the qualifications and privileges of any new membership class.
5.3 Voting. Only Cooperative Members who hold Membership Stock have voting rights in the Cooperative, except that certain affected stockholders who do not hold Membership Stock may be entitled to notice and participation in matters to be decided by the Members only as provided for in ORC §1729.09. Each Membership Stockholder is entitled to one vote on any matter submitted to a vote of the Members. Cumulative voting and voting by proxy are not permitted.
Article 6. Capital
6.1 Authorized Capital Stock. The Cooperative authorizes capital stock divided into shares and classes as follows:a. Membership Stock
i. 2,000 shares of Membership Stock with par value of $20 per share.
b. Preferred Stock
i. A Preferred: 2,000 shares of A Preferred with a par value of $50 per share.
ii. B Preferred: 20,000 shares of B Preferred with a par value of $50 per share.
Except as may be limited by applicable law, these Articles of Incorporation (the “Articles”), or the “Bylaws,” the Cooperative’s Board of Directors has the authority and power to establish and issue one or more additional series of stock within a class, to set forth the designation of such stock, to fix the respective rights, preferences, privileges, and limitations of each such series of stock; and to establish and maintain such capital reserve and nonstock revolving capital, unit retains, and other types of Equity Credits as further provided in these Articles and the Bylaws.
6.2 Membership Stock (also referred to as “Common Stock”)
Membership Stockholder. Membership Stock may be issued to any person or entity who has been admitted as a Member of the Cooperative.
Transfer. No holder of Membership Stock may transfer any portion of their Membership Stock. Any purported transfer in violation of these Articles or the Bylaws shall be null and void and of no force or effect.
Ineligible Membership Stockholder. If a person or entity who is not a Cooperative Member acquires Membership Stock, or a holder of Membership Stock becomes ineligible for Cooperative membership, the holder (“Ineligible Stockholder”) will have no vote in the affairs of the Cooperative. The Cooperative may redeem Membership Stock from an Ineligible Stockholder only as provided in the Bylaws.
Dividends. No dividends will be paid on Membership Stock.
6.3 Preferred Stock
Preferred Stockholder. Preferred stock may be issued to any person or entity.
Non-Voting. Preferred Stock is non-voting stock. Preferred Stock does not bestow on its holder any voting rights in the Cooperative except for those specifically provided for in §1729.09 of the Act.
Transfer: Shares of Preferred Stock may only be issued, transferred, or sold according to the terms and conditions of these Articles and the Cooperative’s Bylaws and only by approval of the Board of Directors.
Preferred Stock in Series. Preferred Stock may be issued in one or more separate series of one or more shares as designated by the Board of Directors.
Dividends on Preferred Stock:
A Preferred: The Cooperative may pay non-cumulative dividends of not more than five percent (5%) annually on the value of the consideration for which the stock was issued when and in the manner and amount as the Board of Directors determines. Shares of A Preferred shall not be redeemed within six years of the stock being issued.
B Preferred: When the Board of Directors designates a series of B Preferred Stock, the Board of Directors must establish dividend rights, if any, for the series. Subject to the provisions of Sections 6.3(a-d), 6.5, and 6.7 of these Articles, the Board of Directors may determine, among other things: dividend or distribution rights which may be cumulative or noncumulative, at a specified rate, amount, or proportion (not to exceed five percent (5%) annually on the value of the consideration for which the stock was issued); liquidation rights, preferences, and price; redemption rights and price; restrictions on the issuance of shares; and the authorized number of shares of each series.
The right to payment of dividends on each series of Preferred Stock must have equal priority and preference with the right to payment of dividends on any other series of Preferred Stock.
6.4 Equity Credits. The Cooperative may issue credits Equity Credits that represent ownership of a stated portion ("Stated Value") of the Cooperative’s capital. Equity Credits may be issued as evidence of Patronage Refunds as defined and provided for in the Bylaws or any other purpose for which an equity interest in the Cooperative may be issued. Equity Credits have no preference over other Equity Credits. Equity Credits will not be issued for less consideration than their Stated Value. Equity Credits are not transferable and do not bestow on their holder any voting rights in the Cooperative. Equity Credits may be subject to charges for net losses of the Cooperative as provided in the Bylaws. No dividends will be paid on Equity Credits.
6.5 Redemption of Capital Stock. Shares of capital stock and Equity Credits issued by the Cooperative may be redeemed only at the time, in the manner, and in the order determined by the Board of Directors in its sole discretion and in accordance with the provisions of these Articles and the Bylaws; provided, however, that capital stock and Equity Credits shall never be redeemed for more than the value of the consideration for which the stock was issued (Stated Value in the case of equity credits), unless otherwise provided in a written subscription for the capital stock or Equity Credits. The Board of Directors has the authority to establish a redemption policy on terms and conditions it deems advisable in its sole discretion.
6.6 Patronage Refunds. The Cooperative’s Net Income from Patronage Business (as defined in the Bylaws) shall be allocated and distributed annually to the Cooperative’s Patrons as Patronage Refunds (as defined in the Bylaws). The calculation, allocation, and distribution of Patronage Refunds are further described and defined in the Bylaws.
6.7 Preference upon Dissolution. If the Cooperative dissolves, liquidates, or winds up its affairs, whether voluntarily or involuntarily, any property belonging to the Cooperative shall be distributed as follows:
First, to costs and expenses of liquidation;
Second, to the payment of debts and liabilities of the Cooperative, including any loans or advances to the Cooperative by any Member;
Third, to the establishment of such reserves as the liquidator deems necessary or advisable;
Fourth, to the holders of shares of Preferred Stock, in equal preference, the value of the consideration for which the shares of Preferred Stock were issued, and on a pro rata basis within a series if necessary;
Fifth, to the holders of Membership Stock and Equity Credits, in equal preference, the value of the consideration for which the stock was issued (Stated Value in the case of Equity Credits);
Then, the remaining assets shall be donated to one or more 501(c)(3) charitable nonprofit organizations working to advance a just transition to a clean energy economy.
6.8 Condition of Forfeiture. It is a condition of all Patronage Refunds, capital stock, dividends on capital stock, and Equity Credits allocated, declared or issued by the Cooperative that the Cooperative may effect forfeiture to the Cooperative of these interests that are issued or allocated to a Person whose current address and status cannot be confirmed by the Cooperative, as provided and permitted in the Act and the Bylaws.
6.9 Lien and Right of Offset. The Cooperative has a first lien and security interest in all capital stock, dividends on capital stock, Patronage Refunds, and Equity Credits that it issues or allocates for all debts or other obligations of the holder or owner to the Cooperative. At the option of the Board of Directors, the Cooperative may offset the amount of any dividends and the present value (based on the Cooperative’s history of equity redemption) of capital stock, Patronage Refunds, and Equity Credits against the indebtedness; but nothing contained herein gives the holder or owner any right to require an offset.
Article 7. Board of Directors
Government of the Cooperative and the management of its affairs are vested in the Board of Directors as provided in these Articles and the Bylaws. The Bylaws shall prescribe the number, terms, and manner of selection of Directors.Article 8. Merger, Consolidation, and Dissolution
Events and proceedings in connection with the merger, consolidation, or dissolution of the Cooperative shall be carried out as set forth in these Articles and the Bylaws.Article 9. Restriction on the Sale of Cooperative Assets to a For-Profit Enterprise
9.1 Any voluntary lease, sale, exchange, transfer, or other disposition, or a series of such transactions, of more than two-thirds (2/3) of the Cooperative’s assets to a for-profit enterprise must be approved by the adoption of a written resolution by the affirmative vote of at least three-fourths (3/4) of Members votes cast on the resolution.9.2 Notice of the meeting at which such a resolution will be voted on shall be given to all Cooperative Members and stockholders, whether or not entitled to vote on the resolution.
9.3 This restriction does not apply to the voluntary lease, sale, exchange, or transfer of Cooperative assets to organizations or entities structured for public benefit such as 501(c)(3) public charities or 504(c)(4) social welfare organizations, or those structured for the mutual benefit of members (such as an Ohio cooperative association or other entity operating on a cooperative basis), subject to the requirements of the Act.
Article 10. Amendment of Articles of Incorporation
10.1 Except as provided in Sections 1729.08(C) and 1729.08(D) of the Act, any amendment of these Articles shall first be approved by two thirds (2/3) of the Directors then-serving on the Board of Directors and then shall be adopted by an affirmative vote of three fifths (3/5) of the Member votes cast on the amendment; provided, however, that:Any amendment of these Articles that would affect any holder of stock in a manner set forth in Section 1729.09(B) of the Act (“Affected Stockholder”) must be approved by an affirmative vote of the three-fifths (3/5) of the votes entitled to be cast by the Members on the amendment, and (ii) an affirmative vote of three fifths (3/5) of the votes entitled to be cast by the Affected Stockholders, voting as a class subject to Section 1729.09(C) of the Act.
Notice of any proposal to amend these Articles of Incorporation must include the text of the proposed amendment.
These Amended and Restated Articles of Incorporation supersede and replace all prior Articles of Incorporation of the Cleveland Solar Cooperative as approved by the Board of Directors and adopted by the Cooperative’s Members.
Cleveland Solar Cooperative
