2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 16 - Conversion and Merger › § 1603. Action on plan of conversion by converting mutual benefit enterprise

§ 1603. Action on plan of conversion by converting mutual benefit enterprise
(a) For a mutual benefit enterprise to convert to another entity, a plan of conversion shall be approved by a majority of the board of directors, or a greater percentage if required by the organic rules, and the board of directors shall call a members’ meeting to consider the plan of conversion, hold the meeting not later than 90 days after approval of the plan by the board, and mail or otherwise transmit or deliver in a record to each member:
(1) the plan, or a summary of the plan and a statement of the manner in which a copy of the plan in a record may be reasonably obtained by a member;
(2) a recommendation that the members approve the plan of conversion, or if the board determines that because of a conflict of interest or other circumstances it should not make a favorable recommendation, the basis for that determination;
(3) a statement of any condition of the board’s submission of the plan of conversion to the members; and
(4) notice of the meeting at which the plan of conversion will be considered, which shall be given in the same manner as notice of a special meeting of members.
(b) Subject to subsections (c) and (d) of this section, a plan of conversion shall be approved by:
(1) at least two-thirds of the voting power of members present at a members’ meeting called under subsection (a) of this section; and
(2) if the mutual benefit enterprise has investor members, at least a majority of the votes cast by patron members, unless the organic rules require a greater percentage vote by patron members.
(c) The organic rules may require that the percentage of votes under subdivision (b)(1) of this section is:
(1) a different percentage that is not less than a majority of members voting at the meeting;
(2) measured against the voting power of all members; or
(3) a combination of subdivisions (1) and (2) of this subsection.
(d) The vote required to approve a plan of conversion may not be less than the vote required for the members of the mutual benefit enterprise to amend the articles of organization.
(e) Consent in a record to a plan of conversion by a member shall be delivered to the mutual benefit enterprise before delivery of articles of conversion for filing if as a result of the conversion, the member will have:
(1) personal liability for an obligation of the enterprise; or
(2) an obligation or liability for an additional contribution.
(f) Subject to subsection (e) of this section and any contractual rights, after a conversion is approved and at any time before the effective date of the conversion, a converting mutual benefit enterprise may amend a plan of conversion or abandon the planned conversion:
(1) as provided in the plan; and
(2) except as prohibited by the plan, by the same affirmative vote of the board of directors and of the members as was required to approve the plan.
(g) The voting requirements for districts, classes, or voting groups under section 404 of this title apply to approval of a conversion under this article. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)