Exhibit 3.2
THIRD AMENDED AND SUPERSEDING
BY-LAWS
OF
PENTAIR, INC.
ADOPTED ON AUGUST 23, 2000
Compiled Version As Amended May 1, 2002
ARTICLE I
Meetings of Shareholders
Section 1. Place and Time of Meetings. Except as otherwise provided by
Minnesota Statutes Chapter 302A, meetings of the shareholders may be held at any
place, within or without the State of Minnesota, as may from time to time be
designated by the Board of Directors and, in the absence of such designation,
shall be held at the registered office of the Corporation in the State of
Minnesota. The Board of Directors shall designate the time of day for each
meeting and, in the absence of such designation and except as otherwise provided
in these By-Laws, every meeting of shareholders shall be held at 10:00 a.m.
local time.
Section 2. Annual Meeting. The annual meeting of shareholders (the "Annual
Meeting") shall be held on such date after March 1 and prior to June 1 as the
Board of Directors shall select by appropriate resolution. In fixing a meeting
date for any Annual Meeting, the Board of Directors may consider such factors as
it deems relevant within the good faith exercise of its business judgment. The
Annual Meeting shall be the only regular meeting of the shareholders in any one
calendar year. At each Annual Meeting, the shareholders shall elect that number
of directors equal to the number of directors in the class whose term expires at
the time of such Annual Meeting. At any such Annual Meeting, only other business
properly brought before the Annual Meeting in accordance with Section 10 of this
Article I may be transacted.
Section 3. Special Meetings.
(a) A special meeting of the shareholders (a "Special Meeting") may be
called only by (i) the Chief Executive Officer, (ii) the Chief Financial
Officer, (iii) two or more members of the Board of Directors, (iv) the Chairman
of the Board or (v) a shareholder or shareholders holding ten percent (10%) or
more of the voting power of all shares entitled to vote on the matters to be
presented to the Special Meeting, except that a Special Meeting for the purpose
of considering any action to directly or indirectly facilitate or effect a
business combination, including any action to change or otherwise effect the
composition of the Board of Directors for that purpose, must be called by twenty
five percent (25%) or more of the voting power of all shares entitled to vote.
(b) In order for a shareholder or shareholders to demand a Special Meeting,
a written demand or demands for a Special Meeting by a shareholder or
shareholders holding the voting power specified in Section 3(a)(v) of this
Article I (the "Requisite Voting Power") must be delivered to the Corporation.
To be valid, each written demand by a shareholder for a Special Meeting shall
set forth the specific purpose or purposes for which the Special Meeting is to
be held, shall be signed by one or more persons who as of the date of such
written demand are shareholders of record (or their duly authorized proxies or
other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), shall set forth all information
about each such shareholder and beneficial owner or owners, if any, on whose
behalf the demand is made that would be required to be set forth in a
shareholder's notice described in paragraph (a)(ii) of Section 10 of this
Article I, and shall be sent to the Chief Executive Officer or Chief Financial
Officer of the Corporation by hand or by certified or registered mail, return
receipt requested. Within 30 days after the date that valid written demands for
such meeting by the shareholder or shareholders holding the Requisite Voting
Power are received by the Chief Executive Officer or Chief Financial Officer of
the Corporation (the "Delivery Date"), the Board of Directors shall cause a
Special Meeting to be called in accordance with this Section 3.
(c) Except as provided in the following sentence, any Special Meeting shall
be held at such hour and day as may be designated by whichever of the Chief
Executive Officer, the Chief Financial Officer, two or more members of the Board
of Directors or the Chairman of the Board shall have called such Special
Meeting. In the case of any Special Meeting
called by the Board of Directors upon the demand of a shareholder or
shareholders in accordance with this Section 3 (a "Demand Special Meeting"),
such Special Meeting shall be held at such hour and day as may be designated by
the Board of Directors; provided, however, that the date of any Demand Special
Meeting shall be not more than 90 days after the Delivery Date; and provided
further that in the event that the directors then in office fail to designate an
hour and date for a Demand Special Meeting within 30 days after the Delivery
Date, then such meeting shall be held at 2:00 p.m. local time on the 90th day
after the Delivery Date or, if such 90th day is not a Business Day (as defined
below), on the first preceding Business Day. In fixing a meeting date for any
Special Meeting, the Chief Executive Officer, the Chief Financial Officer, two
or more members of the Board of Directors, the Chairman of the Board or the
Board of Directors may consider such factors as it or he deems relevant within
the good faith exercise of its or his business judgment, including, without
limitation, the nature of the action proposed to be taken, the facts and
circumstances surrounding any demand for such meeting, and any plan of the Board
of Directors to call an Annual Meeting or a Special Meeting for the conduct of
related business.
(d) The Corporation may engage regionally or nationally recognized
independent inspectors of elections to act as an agent of the Corporation for
the purpose of promptly performing a ministerial review of the validity of any
purported written demand or demands for a Special Meeting received by the Chief
Executive Officer or Chief Financial Officer of the Corporation. For the purpose
of permitting the inspectors to perform such review, no purported demand shall
be deemed to have been delivered to the Corporation until the earlier of (i)
five Business Days following receipt by the Chief Executive Officer or Chief
Financial Officer of such purported demand and (ii) such date as the independent
inspectors certify to the Corporation that the valid demands received by the
Chief Executive Officer or Chief Financial Officer represent the Requisite
Voting Power. Nothing contained in this Section 3(d) shall in any way be
construed to suggest or imply that the Board of Directors or any shareholder
shall not be entitled to contest the validity of any demand, whether during or
after such five Business Day period, or to take any other action (including,
without limitation, the commencement, prosecution or defense of any litigation
with respect thereto).
(e) For purposes of these By-Laws, "Business Day" shall mean any day other
than a Saturday, a Sunday or a day on which banking institutions in the State of
Minnesota are authorized or obligated by law or executive order to close.
Section 4. Notice of Meetings. There shall be mailed to each shareholder,
shown by the books of the Corporation to be a holder of record of voting shares,
at his or her address as shown by the books of the Corporation, a notice setting
out the time and place of each Annual Meeting and each Special Meeting, except
where the meeting is an adjourned meeting and the date, time and place of the
meeting were announced at the time of adjournment, which notice shall be mailed
not less than 10 days nor more than 60 days prior thereto, except that notice of
a meeting at which an agreement of merger or exchange is to be considered shall
be mailed to all shareholders of record, whether entitled to vote or not, at
least fourteen days prior thereto. In the event of any Demand Special Meeting,
such notice shall be sent not more than 45 days after the Delivery Date. In the
case of any Special Meeting, (a) the notice of meeting shall describe any
business that the Board of Directors shall have theretofore determined to bring
before the Special Meeting and (b) in the case of a Demand Special Meeting, the
notice of meeting (i) shall describe any business set forth in the statement of
purpose of the demands received by the corporation in accordance with Section 3
of this Article I and (ii) shall contain all of the information required in the
notice received by the Corporation in accordance with Section 10(b) of this
Article I. The business transacted at all Special Meetings shall be confined to
the purpose or purposes stated in the notice. The written notice of any meeting
at which a plan of merger or exchange is to be considered shall so state such as
a purpose of the meeting. A copy or short description of the plan of merger or
exchange shall be included in or enclosed with such notice.
Section 5. Waiver of Notice. Notice of any Annual Meeting or Special
Meeting may be waived by any shareholder either before, at or after such meeting
orally or in a writing signed by such shareholder or a representative entitled
to vote the shares of such shareholder. A shareholder, by his or her attendance
at any meeting of shareholders, shall be deemed to have waived notice of such
meeting, except where the shareholder objects at the beginning of the meeting to
the transaction of business because the item may not lawfully be considered at
that meeting and does not participate in the consideration of the item at that
meeting.
Section 6. Voting. At each meeting of the shareholders every shareholder
having the right to vote shall be entitled to vote either in person or by proxy.
Each shareholder, unless the Articles of Incorporation or statute provide
otherwise, shall have one vote for each share having voting power registered in
such shareholder's name on the books of the Corporation. Jointly owned shares
may be voted by any joint owner unless the Corporation receives written notice
from any
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one of them denying the authority of that person to vote those shares. Upon the
demand of any shareholder, the vote upon any question before the meeting shall
be by ballot. All questions shall be decided by a majority vote of the number of
shares entitled to vote and represented at the meeting at the time of the vote
except if otherwise required by statute, the Articles of Incorporation, or these
By-Laws.
Section 7. Record Date. The Board of Directors may fix a time, not
exceeding 60 days preceding the date of any meeting of shareholders, as a record
date for the determination of the shareholders entitled to notice of, and to
vote at, such meeting ("Meeting Record Date"), notwithstanding any transfer of
shares on the books of the Corporation after any record date so fixed. If the
Board of Directors fails to fix a Meeting Record Date, then the Meeting Record
Date shall be the 20th day preceding the date of such meeting. Notwithstanding
the foregoing, in the case of any Demand Special Meeting, (a) the Meeting Record
Date shall not be later than the 30th day after the Delivery Date and (b) if the
Board of Directors fails to fix the Meeting Record Date within 30 days after the
Delivery Date, then the close of business on such 30th day shall be the Meeting
Record Date.
Section 8. Quorum, Adjourned Meetings. The presence, in person or by proxy,
of the holders of a majority of the shares entitled to vote at the meeting shall
constitute a quorum for the transaction of business. In case a quorum shall not
be present at a meeting, those present may adjourn to such day as they shall, by
majority vote, agree upon, and a notice of such adjournment shall be mailed to
each shareholder entitled to vote at least five days before such adjourned
meeting. If a quorum is present, a meeting may be adjourned without notice other
than announcement at the meeting (a) at any time upon a resolution of
shareholders by majority vote or (b) at any time prior the transaction of any
business at such meeting, by the Chairman of the Board of Directors or pursuant
to a resolution of the Board of Directors. At adjourned meetings at which a
quorum is present, any business may be transacted which might have been
transacted at the meeting as originally noticed. If a quorum is present, the
shareholders may continue to transact business until adjournment notwithstanding
the withdrawal of enough shareholders to leave less than a quorum.
Section 9. Written Action. Any action which might be taken at a meeting of
the shareholders may be taken without a meeting if done in writing and signed by
all of the shareholders entitled to vote on that action.
Section 10. Notice of Shareholder Business and Nomination of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by the
shareholders may be made at an Annual Meeting (A) pursuant to the
Corporation's notice of meeting, (B) by or at the direction of the Board of
Directors or (C) by any shareholder of the Corporation who is a shareholder
of record at the time of giving of notice provided for in this By-Law and
who is entitled to vote at the meeting and complies with the notice
procedures set forth in this Section 10.
(ii) For nominations or other business to be properly brought before
an Annual Meeting by a shareholder pursuant to clause (C) of paragraph
(a)(i) of this Section 10, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice shall be received by the Secretary of the Corporation
at the principal offices of the Corporation not less than 45 days nor more
than 70 days prior to the first annual anniversary of the date set forth in
the Corporation's proxy statement for the immediately preceding Annual
Meeting as the date on which the Corporation first mailed definitive proxy
materials for the immediately preceding Annual Meeting (the "Anniversary
Date"); provided, however, that in the event that the date for which the
Annual Meeting is called is advanced by more than 30 days or delayed by
more than 30 days from the first annual anniversary of the immediately
preceding Annual Meeting, notice by the shareholder to be timely must be so
delivered not earlier than the close of business on the 100th day prior to
the date of such Annual Meeting and not later than the later of (A) the
75th day prior to the date of such Annual Meeting or (B) the 10th day
following the day on which public announcement of the date of such Annual
Meeting is first made. In no event shall the announcement of an adjournment
of an Annual Meeting commence a new time period for the giving of a
shareholder notice as described above. Such shareholder's notice shall be
signed by the shareholder of record who intends to make the nomination or
introduce the other business (or his duly authorized proxy or other
representative), shall bear the date of signature of such shareholder (or
proxy or other representative) and shall set
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forth: (A) the name and address, as they appear on the Corporation's books,
of such shareholder and the beneficial owner or owners, if any, on whose
behalf the nomination or proposal is made; (B) the class and number of
shares of the Corporation which are beneficially owned by such shareholder
or beneficial owner or owners; (C) a representation that such shareholder
is a holder of record of shares of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to make
the nomination or introduce the other business specified in the notice; (D)
in the case of any proposed nomination for election or re-election as a
director, (I) the name and residence address of the person or persons to be
nominated, (II) a description of all arrangements or understandings between
such shareholder or beneficial owner or owners and each nominee and any
other person or persons (naming such person or persons) pursuant to which
the nomination is to be made by such shareholder, (III) such other
information regarding each nominee proposed by such shareholder as would be
required to be disclosed in solicitations of proxies for elections of
directors, or would be otherwise required to be disclosed, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any information that would be
required to be included in a proxy statement filed pursuant to Regulation
14A had the nominee been nominated by the Board of Directors and (IV) the
written consent of each nominee to be named in a proxy statement and to
serve as a director of the Corporation if so elected; and (E) in the case
of any other business that such shareholder proposes to bring before the
meeting, (I) a brief description of the business desired to be brought
before the meeting and, if such business includes a proposal to amend these
By-Laws, the language of the proposed amendment, (II) such shareholder's
and beneficial owner's or owners' reasons for conducting such business at
the meeting and (III) any material interest in such business of such
shareholder and beneficial owner or owners.
(iii) Notwithstanding anything in the second sentence of paragraph
(a)(ii) of this Section 10 to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement naming all of the nominees
for director or specifying the size of the increased Board of Directors
made by the Corporation at least 45 days prior to the Anniversary Date, a
shareholder's notice required by this Section 10 shall also be considered
timely, but only with respect to nominees for any new positions created by
such increase, if it shall be received by the Secretary at the principal
offices of the Corporation not later than the close of business on the 10th
day following the day on which such public announcement is first made by
the Corporation.
(b) Special Meetings. The business transacted at a Special Meeting shall be
limited to the purposes stated in the notice of the Special Meeting sent to
shareholders pursuant to Section 4 of this Article I. Nominations of persons for
election to the Board of Directors may be made at a Special Meeting at which
directors are to be elected pursuant to such notice of meeting (i) by or at the
direction of the Board of Directors or (ii) by any shareholder of the
Corporation who (A) is a shareholder of record at the time of giving of such
notice of meeting, (B) is entitled to vote at the meeting and (C) complies with
the notice procedures set forth in this Section 10. Any shareholder desiring to
nominate persons for election to the Board of Directors at such a Special
Meeting shall cause a written notice to be received by the Secretary of the
Corporation at the principal offices of the Corporation not earlier than 90 days
prior to such Special Meeting and not later than the close of business on the
later of (x) the 60th day prior to such Special Meeting and (y) the 10th day
following the day on which public announcement is first made of the date of such
Special Meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. Such written notice shall be signed by the shareholder
of record who intends to make the nomination (or his duly authorized proxy or
other representative), shall bear the date of signature of such shareholder (or
proxy or other representative) and shall set forth: (A) the name and address, as
they appear on the Corporation's books, of such shareholder and the beneficial
owner or owners, if any, on whose behalf the nomination is made; (B) the class
and number of shares of the Corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that such
shareholder is a holder of record of shares of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
make the nomination specified in the notice; (D) the name and residence address
of the person or persons to be nominated; (E) a description of all arrangements
or understandings between such shareholder or beneficial owner or owners and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination is to be made by such shareholder; (F) such
other information regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for elections of
directors, or would be otherwise required to be disclosed, in each case pursuant
to Regulation 14A under the Exchange Act, including any information that would
be required to be included in a proxy statement filed pursuant to Regulation 14A
had the nominee been nominated by the Board of Directors; and (G) the written
consent of each nominee to be named in a proxy statement and to serve as a
director of the Corporation if so elected.
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(c) General.
(i) Only persons who are nominated in accordance with the procedures
set forth in this Section 10 shall be eligible to serve as directors. The
Board of Directors, or a nominating committee duly appointed by the Board
of Directors, shall have the sole authority to designate candidates to be
nominated by management for election as directors of the Corporation. Only
such business shall be conducted at an Annual Meeting or Special Meeting as
shall have been brought before such meeting in accordance with the
procedures set forth in this Section 10. The chairman of the meeting shall
have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made in accordance with the
procedures set forth in this Section 10 and, if any proposed nomination or
business is not in compliance with this Section 10, to declare that such
defective proposal shall be disregarded.
(ii) For purposes of this Section 10, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this Section 10, a
shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 10. Nothing in this Section 10 shall be
deemed to limit the Corporation's obligation to include shareholder
proposals in its proxy statement if such inclusion is required by Rule
14a-8 under the Exchange Act.
ARTICLE II
Directors
Section 1. General Powers; Number of Directors; Classification. The
business and affairs of the Corporation shall be managed by or under the
direction of a Board of Directors, except as otherwise permitted by statute. The
Board of Directors shall consist of ten (10) directors, who need not be
shareholders of the Corporation. The Board of Directors has been divided into
three classes, as nearly equal in number as may be, with the terms of office for
each class staggered so that the term for only one class expires each year.
Section 2. Tenure. At each Annual Meeting, the shareholders shall elect
directors to fill the vacancies of such directors whose terms have expired. Each
newly elected director shall hold office for a term expiring at the third
succeeding Annual Meeting or until his successor is elected and qualifies.
Section 3. Vacancies. Any vacancy occurring in the Board of Directors may
be filled by the affirmative vote of a majority of the remaining directors or by
election at a meeting of shareholders. Any director who is elected to fill a
vacancy by the remaining directors shall be required to stand for election at
the next Annual Meeting or Special Meeting, regardless of whether the class of
directors into which such director has been placed will otherwise be elected at
such meeting.
Section 4. Board Meetings. Meetings of the Board of Directors may be held
from time to time at such time and place within or without the State of
Minnesota as may be designated in the notice of such meeting.
Section 5. Notice. The Board of Directors shall meet each year immediately
after the Annual Meeting, at the same place as the Annual Meeting. No notice of
any kind to either old or new members shall be necessary for such annual meeting
or for any regular meeting of the directors fixed from time to time by
resolution of a majority of the Board of Directors. Other meetings of the Board
of Directors may be held upon 48 hours' written notice of the date, time and
place of the meeting upon the call of the Chairman of the Board, Chief Executive
Officer, President or any director. Neither the business to be transacted at,
nor the purpose of, any meeting need be specified in the notice of such meeting.
Notice of an adjourned meeting of the Board of Directors need not be given other
than by announcement at the meeting at which adjournment is taken.
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Section 6. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived by any director either before, at, or after such meeting
orally or in a writing signed by such director. A director, by his or her
attendance at any meeting of the Board of Directors, shall be deemed to have
waived notice of such meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting is
not lawfully called or convened and does not participate thereafter in the
meeting.
Section 7. Quorum; Act of the Board. A majority of the directors holding
office immediately prior to a meeting of the Board of Directors shall constitute
a quorum for the transaction of business at such meeting; provided, however,
that if any vacancies exist for any reason, the remaining directors shall
constitute a quorum for the filling of such vacancies. Except as otherwise
provided in these By-Laws, the acts of a majority of the directors present at a
meeting at which a quorum is present shall be the acts of the Board of
Directors.
Section 8. Absent Directors. A director may give advance written consent or
opposition to a proposal to be acted on at a meeting of the Board of Directors.
If such director is not present at the meeting, consent or opposition to a
proposal does not constitute presence for purposes of determining the existence
of a quorum, but consent or opposition shall be counted as a vote in favor of or
against the proposal and shall be entered in the minutes or other record of
action at the meeting, if the proposal acted on at the meeting is substantially
the same or has substantially the same effect as the proposal to which the
director has consented or objected.
Section 9. Electronic Communications. Any or all directors may participate
in any meeting of the Board of Directors, or of any duly constituted committee
thereof, by any means of communication through which the directors may
simultaneously hear each other during such meeting. For the purposes of
establishing a quorum and taking any action at the meeting, such directors
participating pursuant to this Section 9 shall be deemed present in person at
the meeting, and the place of the meeting shall be the place of origination of
the conference communication.
Section 10. Removal of Directors.
(a) A director may be removed by the Board of Directors at any time, but
only with good cause shown therefor, if (i) the director was appointed by the
Board of Directors to fill a vacancy and shareholders have not since such
appointment elected directors in such director's class; and (ii) a majority of
the other directors present affirmatively vote to remove the director.
(b) Any one or all of the directors may be removed with good cause shown
therefor, at any meeting of the shareholders called for that purpose, by the
affirmative vote of 60% of the voting power of the shares entitled to vote
provided that removal is not opposed by more than 25% of the voting power of the
shares entitled to vote.
(c) "Good cause" for the purpose of this Section 10 shall mean (i)
conviction of a crime involving moral turpitude, (ii) dishonesty in dealings
with the Corporation or with respect to its assets or (iii) engaging in
competition, directly or indirectly, with the Corporation, usurping any
corporate opportunity or advantage or knowingly violating Section 302A.255 of
Minnesota Statutes, as amended, with respect to director conflicts of interest,
without the prior consent of the Board of Directors after complete disclosure of
all material facts with respect thereto.
(d) This Section 10 may be amended or repealed at any Annual Meeting or
Special Meeting by the affirmative vote of the holders of 60% of the voting
power of all shareholders entitled to vote, provided such amendment or repeal
shall not receive the negative vote of the holders of more than 25% of the
voting power of all shareholders entitled to vote.
Section 11. Committees.
(a) A resolution approved by the affirmative vote of a majority of the
Board of Directors may establish committees having the authority of the Board in
the management of the business of the Corporation to the extent provided in the
resolution. Except as otherwise provided in these By-Laws, a committee shall
consist of one or more persons, who need not be directors, appointed by
affirmative vote of a majority of the directors present. Except as otherwise
provided in these By-Laws, committees are subject to the direction and control
of, and vacancies in the membership thereof shall be filled by, the Board of
Directors.
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(b) Except as otherwise provided in these By-Laws, a majority of the
members of the committee present at a meeting is a quorum for the transaction of
business, unless a larger or smaller proportion or number is provided in a
resolution approved by the affirmative vote of a majority of the directors
present.
Section 12. Committee of Disinterested Persons.
(a) The Board of Directors may establish a committee composed of two or
more disinterested directors or other disinterested persons to determine whether
it is in the best interests of the Corporation to pursue a particular legal
right or remedy of the Corporation and whether to cause the dismissal or
discontinuance of a particular proceeding that seeks to assert a right or remedy
on behalf of the Corporation.
(b) For purposes of this Section 12, a director or other person is
"disinterested" if the director is not the owner of more than one percent of the
outstanding shares of, or a present or former officer, employee or agent of, the
Corporation or of a related corporation and has not been made or threatened to
be made a party to the proceeding in question.
(c) The committee, once established, is not subject to direction, control,
or termination by the Board of Directors. A vacancy on the committee may be
filled by a majority vote of the remaining members. The good faith
determinations of the committee are binding upon the Corporation and its
directors, officers and shareholders. The committee's existence shall terminate
upon issuance of the final written report of its determinations.
(d) A disinterested person appointed to a committee so established is
deemed to be a director for the period of existence of the committee but has no
power to act as a director except in conjunction with the activities of the
committee.
Section 13. Executive Committee. The Board of Directors may by resolution
or resolutions, passed by a majority of the total number of directors, designate
an Executive Committee of three or more directors, one of whom shall be the
Chief Executive Officer of the Corporation and at least one of whom shall be
independent of management. In the event of an emergency, if one or more of the
members is absent, any of the remaining independent directors shall be an
alternative member for each member so absent, chosen by the length of service on
the Board of Directors. The Board of Directors shall designate one member of the
Executive Committee as Chairman. The Executive Committee shall exercise all
other powers of the Board of Directors between the meetings of the Board of
Directors; provided, however, that the Executive Committee shall not have the
power to fill vacancies in the Board of Directors and in its own membership;
provided further, that the Executive Committee shall not have authority to alter
or amend these By-Laws. The Board of Directors shall have the power at any time
to change the membership of or to dissolve the Executive Committee. The
Executive Committee shall take no action except by unanimous approval of all its
members. The Executive Committee shall meet at the request of the Chairman or
any member with proper notice. In an emergency, any member of the Board of
Directors or any officer of the Corporation may call a meeting of the Executive
Committee. Regular minutes will be kept of Executive Committee proceedings and
shall be reported at the next following meeting of the Board of Directors; such
report shall become a part of the record to which such report is presented.
Section 14. Written Action. Any action which might be taken at a meeting of
the Board of Directors, or any duly constituted committee thereof, may be taken
without a meeting if done in writing and signed by a majority of the directors
or committee members, unless the Articles of Incorporation provide otherwise and
the action need not be approved by the shareholders.
Section 15. Compensation. The Board of Directors, by the affirmative vote
of a majority of the directors then in office, and irrespective of any personal
interest of any of its members shall have authority to establish reasonable
compensation of all directors for service to the Corporation as directors,
officers or otherwise.
ARTICLE III
Officers
Section 1. Number of Officers. The officers of the Corporation shall
consist of a Chairman of the Board, Chief Executive Officer, President, Chief
Financial Officer, Secretary, Treasurer, and such other officers and assistant
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officers and agents as may be elected or appointed by the Board of Directors
from time to time. Any number of offices may be held by the same person.
Section 2. Election and Term of Office. At the first meeting of the Board
of Directors held after each Annual Meeting, the Board of Directors shall elect
or appoint, by resolution approved by the affirmative vote of a majority of the
directors present, from within or without their number, the Chairman of the
Board, Chief Executive Officer, President and Chief Financial Officer and such
other officers as may be deemed advisable, each of whom shall have the powers,
rights, duties and responsibilities provided for in these By-Laws or a
resolutions of the Board of Directors not inconsistent therewith. In the absence
of an election or appointment of a Chief Executive Officer or Chief Financial
Officer by the Board of Directors, the person or persons exercising the
principal functions of those offices are respectively deemed to have been
elected to those offices. Each officer shall hold office until his successor
shall have been duly elected or appointed or until his prior death, resignation
or removal.
Section 3. Removal and Vacancies. Any officer may be removed from his or
her office by the Board of Directors at any time, with or without cause. Such
removal, however, shall be without prejudice to the contract rights of the
officer so removed. If there be a vacancy among the officers of the Corporation
by reason of death, resignation or otherwise, such vacancy shall be filled for
the unexpired term by the Board of Directors.
Section 4. Chairman of the Board. The Chairman of the Board of Directors
shall preside at all meetings of shareholders and directors and shall perform
such other duties as may be prescribed from time to time by the Board of
Directors.
Section 5. Chief Executive Officer. The Chief Executive Officer shall:
(a) Have general active management of the business of the Corporation;
(b) In the absence of the Chairman of the Board, preside at all meetings of
the Board of Directors and the shareholders;
(c) See that all orders and resolutions of the Board of Directors are
carried into effect;
(d) Perform such duties as may be prescribed, from time to time, by the
Board of Directors; and
(e) Render to the Board of Directors, whenever requested, an account of all
transactions by the Chief Executive Officer.
Section 6. President. The President shall:
(a) Perform such duties as may be prescribed, from time to time, by the
Board of Directors or by the Chief Executive Officer; and
(b) Render to the Chief Executive Officer or the Board of Directors,
whenever requested, an account of all transactions by the President.
Section 7. Chief Financial Officer. The Chief Financial Officer shall:
(a) Keep accurate financial records for the Corporation;
(b) Deposit all money, drafts, and checks in the name of and to the credit
of the Corporation in the banks and depositories designated by the Board of
Directors;
(c) Endorse for deposit all notes, checks, and drafts received by the
Corporation as ordered by the Board of Directors, making proper vouchers
therefor;
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(d) Disburse corporate funds and issue checks and drafts in the name of the
Corporation, as ordered by the Board of Directors;
(e) Perform such duties as may be prescribed, from time to time, by the
Board of Directors or by the Chief Executive Officer; and
(f) Render to the Chief Executive Officer or the Board of Directors,
whenever requested, an account of all transactions by the Chief Financial
Officer and of the financial condition of the Corporation.
Section 8. Treasurer. The Treasurer shall:
(a) Perform such duties as may be prescribed, from time to time, by the
Board of Directors, the Chief Executive Officer or the Chief Financial Officer;
and
(b) Render to the Chief Financial Officer, the Chief Executive Officer or
the Board of Directors, whenever requested, an account of all transactions by
the Treasurer.
Section 9. Vice President. Each Vice President shall perform such duties as
may be prescribed, from time to time, by the Board of Directors or the Chief
Executive Officer.
Section 10. Secretary. The Secretary shall give proper notice of meetings
of shareholders and Board of Directors and other notices required by law or by
these By-Laws. He shall attend all meetings of the shareholders and Board of
Directors and shall maintain records of, and, whenever necessary, certify all
proceedings of the shareholders and Board of Directors. He shall also perform
such duties as may be prescribed, from time to time, by the Board of Directors
or the Chief Executive Officer.
Section 11. Contracts. All contracts, deeds, mortgages, bonds, notes,
checks, conveyances and other instruments shall be executed on behalf of the
Corporation by the Chairman of the Board, any Vice Chairman of the Board, the
Chief Executive Officer, the President, any Chief Operating Officer, the Chief
Financial Officer or any Vice President, or by such other persons as may be
designated or authorized, from time to time, by the Board of Directors or the
Chief Executive Officer.
Section 12. Compensation. The officers of this Corporation shall receive
such compensation for their services as may be determined, from time to time, by
a resolution of the Board of Directors.
ARTICLE IV
Capital Stock
Section 1. Certificates for Shares. All shares of the Corporation shall be
certificated shares. Every owner of shares of the Corporation shall be entitled
to a certificate, to be in such form as shall be prescribed by the Board of
Directors, certifying the number of shares of the Corporation owned by such
shareholder. The certificates for such shares shall be numbered in the order in
which they shall be issued and shall be signed, in the name of the Corporation,
by the Chairman, Chief Executive Officer or President and by the Chief Financial
Officer, Treasurer or Secretary of the Corporation or by such officers as the
Board of Directors may designate. If the certificate is signed by a transfer
agent or registrar, such signatures of the corporate officers may be by
facsimile if authorized by the Board of Directors. Every certificate surrendered
to the Corporation for exchange or transfer shall be canceled, and no new
certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so canceled, except
in cases provided for in Section 4 of this Article IV.
Section 2. Issuance of Shares. The Board of Directors is authorized to
cause to be issued shares of the Corporation up to the full amount authorized by
the Articles of Incorporation in such amounts as may be determined by the Board
of Directors and as may be permitted by law. No shares shall be allotted except
in consideration of cash or other property, tangible or intangible, received or
to be received by the Corporation under a written agreement, of services
rendered or to be rendered to the Corporation under a written agreement, or of
an amount transferred from surplus to stated
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capital upon a share dividend. At the time of such allotment of shares, the
Board of Directors making such allotments shall state, by resolution, their
determination of the fair value to the Corporation in monetary terms of any
consideration other than cash for which shares are allotted.
Section 3. Transfer of Shares. Transfer of shares on the books of the
Corporation may be authorized only by the shareholder named in the certificate,
or the shareholder's legal representative, or the shareholder s duly authorized
attorney-in-fact, and upon surrender of the certificate or the certificates for
such shares. The Corporation may treat as the absolute owner of shares of the
Corporation, the person or persons in whose name shares are registered on the
books of the Corporation.
Section 4. Loss of Certificates. Except as otherwise provided by Minnesota
Statutes Section 302A.419, any shareholder claiming a certificate for shares to
be lost, stolen or destroyed shall make an affidavit or that fact in such form
as the Board of Directors shall require and shall, if the Board of Directors so
requires, give the Corporation a bond of indemnity in form, in an amount, and
with one or more sureties satisfactory to the Board of Directors, to indemnify
the Corporation against any claim which may be made against it on account of the
reissue of such certificate, whereupon a new certificate may be issued in the
same tenor and for the same number of shares as the one alleged to have been
lost, stolen or destroyed.
Section 5. Stock Regulations. The Board of Directors shall have the power
and authority to make all such further rules and regulations not inconsistent
with the Minnesota Statutes as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation.
Section 6. [Intentionally omitted.]
Section 7. Definitions. (Adopted on October 18, 1985.) The following
definitions shall apply herein:
(a) "Acquiring person" means a person, corporation or other entity
proposing to make a control share acquisition, but does not include a licensed
broker/dealer or underwriter who (i) purchases shares of the Corporation solely
for purposes of resale to the public, and (ii) is not acting in concert with an
acquiring person.
(b) "Beneficial owner" includes, but is not limited to, any person who
directly or indirectly through any contract, arrangement, understanding,
relationship, or otherwise has or shares the power to vote or direct the voting
of any shares of the Corporation and the power to dispose of, or direct the
disposition of, such shares. "Beneficial ownership" includes, but is not limited
to, the right, exercisable within 60 days, to acquire securities through the
exercise of options, warrants, or rights or the conversion of convertible
securities, or otherwise. The shares subject to these options, warrants, rights,
or conversion privileges held by a person shall be deemed to be outstanding for
the purpose of computing the percentage of outstanding securities of the class
owned by this person, but shall not be deemed to be outstanding for the purpose
of computing the percentage of the class owned by any other person. A person is
the beneficial owner of securities beneficially owned by any relative or spouse
or relative of the spouse residing in the home of this person, any trust or
estate in which this person owns ten percent or more of the total beneficial
interest or serves as trustee or executor, any corporation or entity in which
this person owns ten percent or more of the equity, and any affiliate or
associate of this person.
(c) "Control share acquisition" means an acquisition of shares of the
Corporation resulting in beneficial ownership by an acquiring person of a new
range of voting power specified in Section 8(d), but does not include any of the
following:
(1) an acquisition before, or pursuant to an agreement entered into
before, the date of adoption of this section of Article IV of the
By-Laws;
(2) an acquisition by a donee pursuant to an inter vivos gift not
made to avoid the provisions of Sections 7 through 14 of Article
IV or by a distributee as defined in Minn. Stat. Section
524.2-201, clause (10);
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(3) an acquisition pursuant to a security agreement not created to
avoid the provisions of Sections 7 through 14 of Article IV;
(4) an acquisition of shares of the Corporation pursuant to a merger
or exchange of shares, if the Corporation is a party to the
transaction; or
(5) an acquisition of shares from the Corporation.
Section 8. Information Statement. (Adopted on October 18, 1985.) An
acquiring person shall deliver to the Corporation at its principal executive
office an information statement containing all of the following:
(a) The identity of the acquiring person;
(b) a reference that the statement is made under this section of the
By-Laws;
(c) the number of shares of the Corporation beneficially owned by the
acquiring person;
(d) a specification of which of the following ranges of voting power in the
election of directors would result from consummation of the control share
acquisition:
(1) at least 20 percent but less than 33-1/3 percent;
(2) at least 33-1/3 percent but not more than 50 percent; and
(3) over 50 percent.
(e) the terms of the proposed control share acquisition, including, but not
limited to, the source of funds or other consideration and the material terms of
the financial arrangements for the control share acquisition, plans or proposals
of the acquiring person to liquidate the Corporation, to sell all or
substantially all of its assets, or merge it or exchange its shares with any
other person, to change the location of its principal executive office or of a
material portion of its business activities, to change materially its management
or policies of employment, to alter materially its relationship with suppliers
or customers or the communities in which it operates, or make any other material
change in its business, corporate structure, management or personnel, and such
other objective facts as would be substantially likely to affect the decision of
a shareholder with respect to voting on the proposed control share acquisition.
Section 9. Special Meeting. (Adopted on October 18, 1985.) Within 5 days
after receipt of an information statement pursuant to Section 8, the Corporation
shall call a special meeting of the shareholders to vote on the proposed control
share acquisition. The meeting shall be held no later than 55 days after receipt
by the Corporation of the information statement, unless the acquiring person
agrees to a later date, and no sooner than 30 days after receipt of the
information statement, if the acquiring person so requests in writing when
delivering the information statement. The notice of the meeting shall be, at a
minimum, accompanied by a copy of the information statement and a statement
disclosing that the Board of Directors of the Corporation (i) recommends
acceptance of, (ii) expresses no opinion and is remaining neutral toward, (iii)
recommends rejection of, or (iv) is unable to take a position with respect to,
the proposed control share acquisition. The notice of meeting shall be given
within 20 days after receipt of the information statement.
Section 10. Consummation of Acquisition. (Adopted on October 18, 1985.) The
acquiring person may consummate the proposed control share acquisition if and
only if both of the following occur:
(a) the proposed control share acquisition is approved by the affirmative
vote of the holders of a majority of the voting power of all shares entitled to
vote under applicable Minnesota law; and
(b) the proposed control share acquisition is consummated within 180 days
after shareholder approval.
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Section 11. Failure to Comply. (Adopted on October 18, 1985.) All shares of
the Corporation acquired by an acquiring person in violation of Section 10 shall
be: (a) denied voting rights for one year after acquisition; (b) nontransferable
on the books of the Corporation for one year after acquisition; and (c) subject
to the Corporation's option, during such one-year period, to call the shares for
redemption at the price at which the shares were acquired. Such redemption shall
occur on the date set in the call notice, which shall not be later than 60 days
after the call notice is given.
Section 12. Proxy Solicitation. (Adopted on October 18, 1985.)
Notwithstanding any contrary provision of these By-Laws, a proxy relating to a
meeting of shareholders required under Section 9 of this Article IV must be
solicited separately from the offer to purchase or solicitation of an offer to
sell shares of the Corporation. Except for irrevocable proxies appointed in the
regular course of business and not in connection with a control share
acquisition, all proxies appointed for or in connection with the shareholder
authorization of a control share acquisition pursuant Sections 7 through 14 of
Article IV shall be at all times terminable at will prior to the obtaining of
the shareholder authorization, whether or not the proxy is coupled with an
interest. Without affecting any vote previously taken, the proxy may be
terminated in any manner permitted by Minnesota statutes or by giving oral
notice of the termination in the open meeting of shareholders held pursuant to
Section 9 hereof. The presence at a meeting of the person appointing a proxy
does not revoke the appointment.
Section 13. Amendments or Repeal. (Adopted on October 18, 1985.)
Notwithstanding any contrary provision of these By-Laws, the provisions of
Sections 7 through 14 of this Article may be amended or repealed by the
shareholders only by the affirmative vote of the holders of 85% of each class of
shares of the Corporation entitled to exercise the voting power of the
Corporation; provided, however, that if no person holds more than twenty percent
(20%) of the Voting Shares and there is no control share acquisition of which
the Board of Directors has credible notice, the necessary vote for amendment or
repeal may be reduced by the Board of Directors to not less than a majority of
the outstanding shares in each class; and provided further that no amendment or
repeal of Sections 7 through 14 of this Article adopted after the notice to
shareholders referred to in Section 9 herein is given shall affect the rights of
any shareholder under said Sections 7 through 14.
Section 14. Dissenting Shareholders. (Adopted on October 18, 1985.)
Shareholders dissenting from a control share acquisition for which approval of
shareholders is sought shall have the right to obtain fair value of their
shares, pursuant to the provisions of Minnesota Statutes 302A.473 (1985), as
amended.
ARTICLE V
Dividends
Section 1. Dividends. Subject to the provisions of the Articles of
Incorporation, of these By-Laws, and of law, the Board of Directors may declare
dividends whenever, and in such amounts as, in its opinion, are deemed
advisable.
Section 2. Record Date. Subject to any provisions of the Articles of
Incorporation, the Board of Directors may fix a date not exceeding 120 days
preceding the date fixed for the payment of any dividend as the record date for
the determination of the shareholders entitled to receive payment of the
dividend and, in such case, only shareholders of record on the date so fixed
shall be entitled to receive payment of such dividend notwithstanding any
transfer of shares on the books of the Corporation after the record date. The
Board of Directors may close the books of the Corporation against the transfer
of shares during the whole or any part of such period.
ARTICLE VI
Miscellaneous
Section 1. Seal. The corporate seal, if any, shall be circular in form and
have inscribed thereon the name of the Corporation, the State in which it is
incorporated and the words "corporate seal."
Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed
by the Board of Directors.
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ARTICLE VII
Indemnification of Certain Persons
Section 1. General. The Corporation shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to such
extent as permitted by Minnesota Statutes Section 302A.521, as now enacted or
hereafter amended.
Section 2. Insurance. The Corporation may purchase and maintain insurance
on behalf of any person in such person's official capacity against any liability
asserted against and incurred by such person in or arising from that capacity,
whether or not the Corporation would otherwise be required to indemnify the
person against the liability.
ARTICLE VIII
Amendments
These By-Laws may be altered, amended or repealed by a vote of the majority
of the whole Board of Directors at any meeting. Such authority of the Board of
Directors is subject to the power of the shareholders to change or repeal such
By-Laws by a majority vote of the shareholders present or represented at any
Annual Meeting or Special Meeting called for such purpose. The Board of
Directors shall not adopt, amend or repeal any By-Law fixing a quorum for
meetings of shareholders, prescribing procedures for removing directors or
filling vacancies in the Board of Directors, or fixing the number of directors
or their classifications, qualifications, or terms of office, except that the
Board of Directors may adopt or amend by unanimous action any By-Law to increase
the number of directors.
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