This chapter shall be known and may be cited as the Employee Cooperative Corporations Act.

(a) Any employee cooperative may establish through its articles of incorporation or bylaws a system of internal capital accounts, to reflect the book value and to determine the redemption price of membership shares, capital stock, and written notices of allocation.

(b) The articles of incorporation or bylaws of an employee cooperative may permit the periodic redemption of written notices of allocation and capital stock, and shall provide for recall and redemption of the membership share upon termination of membership in the cooperative. No redemption shall be made if such redemption would result in the liability of any director or officer of the employee cooperative.

(c) The articles of incorporation or bylaws may provide for the employee cooperative to pay or credit interest on the balance in each member's internal capital account.

(d) The articles of incorporation or bylaws may authorize assignment of a portion of retained net earnings and net losses to a collective reserve account. Earnings assigned to the collective reserve account may be used for any and all corporate purposes as determined by the board of directors.

(a) An internal capital account cooperative is a worker cooperative whose entire net book value is reflected in internal capital accounts, one for each member, and a collective reserve account, and in which no persons other than members own capital stock. In an internal capital account cooperative, each member shall have one and only one vote in any matter requiring voting by stockholders.

(b) An internal capital account cooperative shall credit the paid-in membership fee and additional paid-in capital of a member to the member's internal capital account and shall also record the apportionment of retained net earnings or net losses to the members in accordance with patronage by appropriately crediting or debiting the internal capital accounts of members. The collective reserve account in an internal capital account cooperative shall reflect any paid-in capital, net losses, and retained net earnings not allocated to individual members.

(c) In an internal capital account cooperative, the balance in all the individual internal accounts and collective reserve account, if any, shall be adjusted at the end of each accounting period so that the sum of the balances is equal to the net book value of the employee cooperative.

(a) When an employee cooperative revokes its election in accordance with Section 10-14-4, the articles of amendment shall provide for conversion of membership shares and internal capital accounts or their conversion to securities or other property in a manner consistent with Chapter 2B of this title.

(b) An employee cooperative which has not revoked its election under this chapter may not consolidate or merge with another corporation other than an employee cooperative. Two or more employee cooperatives may consolidate or merge in accordance with Article 11 of Chapter 2B of this title.

As used in this chapter, the following words shall have the following meanings:

(1) COLLECTIVE RESERVE ACCOUNT. An internal capital account that represents the portion of the net book value of the corporation attributable to the cooperative.

(2) EMPLOYEE COOPERATIVE. A corporation which has elected to be governed by this chapter.

(3) INTERNAL CAPITAL ACCOUNTS. A system of accounts on the books of an employee cooperative that reflects the book value of the corporation.

(4) INTERNAL CAPITAL ACCOUNT COOPERATIVE. An employee cooperative governed in accordance with Section 10-14-11.

(5) MEMBER. A natural person who has been accepted for membership in and owns a membership share issued by an employee cooperative.

(6) MEMBERSHIP FEE. The consideration paid for a membership share.

(7) MEMBERSHIP SHARE. A single share of voting stock issued to each member of a worker cooperative as evidence of membership.

(8) PATRONAGE. The amount of work performed as a member of an employee cooperative, measured in accordance with the articles of incorporation or bylaws.

(9) WRITTEN NOTICE OF ALLOCATION. A written statement which discloses to a member the stated dollar amount of such member's patronage allocation and the terms for payment of that amount by the employee cooperative.

Any corporation organized under Chapter 2B of this title may elect to be governed as an employee cooperative under this chapter, by so stating in its articles of incorporation or articles of amendment filed in accordance with Chapter 2B of this title.

An employee cooperative may revoke its election under this chapter by a vote of two-thirds of the members and through articles of amendment filed in accordance with Chapter 2B of this title.

An employee cooperative may include the word "cooperative" or "co-op" in its corporate name, provided, however, that such name shall not include the words "electric" or "power".

(a) The articles of incorporation or the bylaws shall establish qualifications and the method of acceptance and termination of members. No person may be accepted as a member unless employed by the employee cooperative on a full-time or part-time basis. In order to qualify for membership, part-time employment shall be at least half-time.

(b) An employee cooperative shall issue a class of voting stock designated as "membership shares." Each member shall own only one such membership share, and only members may own such shares.

(c) Membership shares shall be issued for a fee as shall be determined by the directors. An employee cooperative may allow for payment of such fee by payroll deduction, installments, or similar methods. A membership share may be issued to a person upon acceptance for membership regardless of whether the membership fee is fully paid.

(d) Members of an employee cooperative shall have all the rights and responsibilities of stockholders of a corporation organized under Chapter 2B of this title, except as otherwise provided in this chapter.

(a) The bylaws of an employee cooperative shall provide for the election, terms, classification, if any, and removal of directors and officers.

(b) Nonmembers may serve as directors or officers of an employee cooperative but at no time shall the number of nonmember directors or officers exceed 25 percent of the total number of directors or officers.

(c) Vacancies in director positions resulting from death, resignation, or removal shall be filled by vote of the member directors or by vote of the members.

(a) No capital stock other than membership shares shall be given voting power in an employee cooperative, except as otherwise provided in this chapter.

(b) Notwithstanding any other provision of law, the power to amend or repeal bylaws of an employee cooperative shall be vested in the members only.

(c) Amendments adversely affecting the rights of members may not be adopted without the vote of the members, except that the protection of this subsection may be extended to stockholders in the case of employee cooperative corporations that have not elected to operate as an internal capital account cooperative.

(a) The net earnings or losses of an employee cooperative shall be apportioned and distributed at such times and in such manner as the articles of incorporation or bylaws specify. Net earnings declared as patronage allocations with respect to a period of time, and paid or credited to members, shall be apportioned among the members in accordance with the ratio which each member's patronage during the period involved bears to total patronage by all members during that period.

(b) The apportionment, distribution, and payment of net earnings required by subsection (a) may be in cash, credits, written notices of allocation, or capital stock issued by the employee cooperative.