§ 17-10-222 — Membership interests

(a) The authorized amount and divisions of patron
membership interests and nonpatron membership interests may be
increased or decreased or established or altered, in accordance
with the restrictions in this article by amending the articles
at a regular members' meeting or at a special members' meeting
called for the purpose of the amendment.
(b) Authorized membership interests may be issued on terms
and conditions prescribed in the articles, bylaws, or as
determined by the board. The cooperative shall disclose to any
person or entity acquiring membership interests to be issued by
the cooperative, the organization, capital structure and
business prospects and risks of the cooperative, the nature of
the governance and financial rights of the membership interest
being acquired and of other classes of membership and membership
interests. The cooperative shall notify all members of the
membership interests being offered by the cooperative. A
membership interest may not be issued until the subscription
price of the membership interest has been paid for in cash or a
cash equivalent or property with the agreed upon value of the
property to be contributed.
(c) The patron membership interests collectively shall
have not less than fifteen percent (15%) of the cooperative's
financial rights to profit allocations and distributions.
(d) After issuance by the cooperative, membership
interests in a cooperative may only be sold or transferred with
the approval of the board.
(e) The cooperative may solicit and issue nonpatron
membership interests on terms and conditions determined by the
board and disclosed in the articles, bylaws or by separate
disclosure to the members. Each member acquiring nonpatron
membership interests shall sign a member control agreement which
shall describe the rights and obligations of the member as it
relates to the nonpatron membership interests, the financial and
governance rights, the transferability of the nonpatron
membership interests, the division and allocations of profits
and losses among the membership interests and membership
classes, and financial rights upon liquidation. If the bylaws do
not otherwise provide for the allocation of the profits and
losses between patron membership interests and nonpatron
membership interests, then the allocation of profits and losses
among nonpatron membership interests individually and patron
membership interests collectively shall be allocated on the
basis of the value of contributions to capital made according to
the patron membership interests collectively and the nonpatron
membership interests individually to the extent the
contributions have been accepted by the cooperative.
Distributions of cash or other assets of the cooperative shall
be allocated among the membership interests as provided in the
articles and bylaws, subject to the provisions of this article.
If not otherwise provided, distributions shall be made on the
basis of value of the capital contributions of the patron
membership interests collectively and the nonpatron membership
interests to the extent the contributions have been accepted by
the cooperative.
(f) The bylaws may provide that the cooperative or the
patron members, individually or collectively, have the first
privilege of purchasing the membership interests of any class of
patron member's membership interests offered for sale. The first
privilege to purchase patron membership interests may be
satisfied by notice to other patron members that the patron
membership interests are for sale and a procedure by which
patron members may proceed to attempt to purchase and acquire
the patron membership interests. A patron membership interest
acquired by the cooperative may be held to be reissued or may be
retired and cancelled.
(g) Subject to the provisions in the bylaws, a member may
dissent from and obtain payment for the fair value of the
member's nonpatron membership interests in the cooperative if
the articles or bylaws are amended in a manner that materially
and adversely affects the rights and preferences of the
nonpatron membership interests of the dissenting member. The
dissenting member shall file a notice of intent to demand fair
value of the membership interest with the records officer of the
cooperative within thirty (30) days after the amendment of the
bylaws and notice of the amendment to members, otherwise the
right of the dissenting member to demand payment of fair value
for the membership interest is deemed to be waived. If a
proposed amendment of the articles or bylaws shall be approved
by the members, a member who is entitled to dissent and who
wishes to exercise dissenter's rights shall file a notice to
demand fair value of the membership interest with the records
officer of the cooperative before the vote on the proposed
action and shall not vote in favor of the proposed action,
otherwise the right to demand fair value for the membership
interest by the dissenting member is deemed waived. After
receipt of the dissenting member's demand notice and approval of
the amendment, the cooperative has sixty (60) days to rescind
the amendment or otherwise the cooperative shall remit the fair
value for the one (1) member's interest to the dissenting member
by one hundred eighty (180) days after receipt of the notice.
Upon receipt of the fair value for the membership interest, the
member has no further member rights in the cooperative.