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production of one or more of the agricultural products handled”
by MCP and includes lessors of land who receive crop shares as
rent. A member is any producer of agricultural products who is
eligible for membership in MCP and who has acquired a minimum of
5 shares of MCP’s common stock.
Under its bylaws in effect during 1994 and 1995, MCP was
authorized to terminate any membership if an existing member was
no longer eligible for membership, a member failed to patronize
MCP for 1 year or more, a member moved from the territory served
by MCP, or died, or ceased to be an agricultural producer, or a
member violated MCP’s bylaws, breached a contract with MCP, owed
MCP a delinquent debt, or willfully obstructed MCP’s purposes or
activities. In such an event, MCP’s board of directors had the
right, at its option, to purchase the member’s stock or to
require the member to convert his common stock to either
preferred stock or a nonvoting certificate of interest.
Petitioners became members of MCP in 1982. Mr. Bot
purchased 40 shares of common stock on August 26, 1982, and Mrs.
Bot purchased 15 shares on August 28, 1982. As members,
petitioners were also required to purchase units of equity
participation and to enter into a uniform marketing agreement
(UMA) with respect to each unit. The units of equity
participation and the UMAs collectively defined the scope of
petitioners’ obligation to patronize MCP. Each unit of equity
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Last modified: May 25, 2011