SECOND
RESTATED BYLAWS
OF
SELECT COMFORT CORPORATION
ARTICLE I
Offices
SECTION 1. REGISTERED OFFICE. The registered office of the Corporation
required by Chapter 302A of the Minnesota Statutes to be maintained in the State
of Minnesota is as designated in the Articles of Incorporation. The Board of
Directors of the Corporation may, from time to time, change the location of the
registered office. On or before the day that such change is to become
effective, a certificate of such change and of the new address of the new
registered office shall be filed with the Secretary of State of the State of
Minnesota.
SECTION 2. OTHER OFFICES. The Corporation may establish and maintain such
other offices, within or without the State of Minnesota, as are from time to
time authorized by the Board of Directors.
ARTICLE II
Meetings of Shareholders
SECTION 1. PLACE OF MEETING. All meetings of the shareholders shall be held
at the registered office of the Corporation in the State of Minnesota or at such
place within or without the state as may be fixed from time to time by the Board
of Directors, provided that a meeting called by or at the demand of a
shareholder shall be held in the county where the principal executive office of
the Corporation is located.
SECTION 2. DATE OF MEETING. A regular meeting of shareholders may be held
for the purpose of electing directors or for the transaction of any other
business as may come before the meeting. It shall be the duty of the President
or Treasurer, upon demand of any shareholder holding three percent (3%) or more
of the voting power of all shares entitled to vote to call such meeting if a
regular meeting of shareholders has not been held during the immediately
preceding fifteen (15) months. If said officers fail to call and hold such
meeting within ninety (90) days after receipt of the demand, the shareholder
making the demand shall have the right and power to call such meeting.
SECTION 3. NOTICE OF REGULAR MEETINGS. Written notice of the time and place
of each regular shareholder meeting shall be mailed, postage prepaid, at least
ten (10) business days but not more than sixty (60) days before such meeting, to
each shareholder entitled to vote thereat at his address as the same appears
upon the books of the Corporation.
SECTION 4. SPECIAL MEETINGS. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation, may be called by the President or Treasurer and shall be
called by the President or Treasurer at the request in writing of two or more
members of the Board of Directors, or at the request in writing of shareholders
owning ten percent (10%) or more of the voting power of all shares entitled to
vote. Such request, which shall be by registered mail or delivered in person to
the President or Treasurer, shall state the purpose or purposes of the proposed
meeting.
SECTION 5. NOTICE OF SPECIAL MEETINGS. Written notice of the time, place
and purpose or purposes of a special meeting shall be mailed, postage prepaid,
at least five (5) business but not more than sixty (60) days before such
meeting, to each shareholder entitled to vote at such meeting at his address as
the same appears upon the books of the Corporation.
SECTION 6. BUSINESS TO BE TRANSACTED. (A) The proposal of business, except
nominations of persons for election to the Board of Directors of the
Corporation, to be considered by the shareholders at a regular or annual meeting
of shareholders may be made by any shareholder of the Corporation who is
entitled to vote at the meeting and who complies with the notice procedures set
forth in this Section 6(A) and who was a shareholder of record at the time such
notice is delivered to the Secretary of the Corporation. For business, except
nominations of persons for election to the Board of Directors of the
Corporation, to be properly brought before a regular or annual meeting by a
shareholder, 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
delivered to the Secretary at the principal executive office of the Corporation
not less than one hundred twenty (120) days prior to the first anniversary of
the date that the Corporation first released or mailed its proxy statement to
shareholders in connection with the preceding year's regular or annual meeting;
provided, however, that in the event that the date of the regular or annual
meeting is advanced by more than thirty (30) days or delayed by more than sixty
(60) days from the anniversary of the preceding year's regular or annual meeting
date, notice by the shareholder to be timely must be so delivered not later than
the close of business on the later of the one hundred twentieth (120th) day
prior to such regular or annual meeting or the tenth (10th) day following the
day on which public announcement of the date of such meeting is first made. Such
shareholder's notice shall set forth (a) as to any business, except for
nominations of persons for election to the Board of Directors of the
Corporation, that the shareholder proposes to bring before the meeting, a brief
description of the business desires to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made and (b) as to the shareholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such shareholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of the Corporation which are owned beneficially and of record by such
shareholder and such beneficial owner.
2
(B) Only such business shall be conducted as a special meeting of shareholders
as shall have been brought before the meeting pursuant to the Corporation's
notice of meeting pursuant to Section 5 of these Bylaws.
(C) Only such business shall be conducted at a meeting of shareholders as shall
have been brought before the meeting in accordance with the procedures set forth
in this Section 6. Except as otherwise provided by law, the Articles of
Incorporation or these Bylaws, the chairman of the meeting shall have the power
and duty to determine whether any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in this Section 6,
and, if any proposed business is not in compliance with this Section 6, to
declare that such defective proposal shall be disregarded.
SECTION 7. WAIVER OF NOTICE. A shareholder may waive notice of a meeting of
shareholders. A waiver of notice by a shareholder entitled to notice is
effective whether given before, at, or after the meeting, and whether given in
writing, orally, or by attendance. Attendance by a shareholder at a meeting is
a waiver of notice of that meeting, except where the shareholder objects at the
beginning of the meeting to the transaction of business because the meeting is
not lawfully called or convened, or objects before a vote on an item 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 8. QUORUM AND ADJOURNMENT. The holders of a majority of the voting
power of the shares entitled to vote at a meeting shall constitute a quorum at
all meetings of the shareholders for the transaction of business, except as
otherwise provided by statute or by the Articles of Incorporation. If, however,
such quorum shall not be present or represented at any meeting of the
shareholders, the holders of a majority of the voting power of the shares
entitled to vote thereat, and present in person or represented by proxy, shall
have the power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally noticed. The shareholders present at a duly called or
held meeting at which a quorum is present may continue to transact business
until adjournment, even though the withdrawal of a number of shareholders
originally present leaves less than the proportion or number otherwise required
for a quorum.
SECTION 9. VOTING RIGHTS. A shareholder may cast his vote in person or by
proxy. When a quorum is present at the time a meeting is convened, the vote of
the holders of a majority of the shares entitled to vote on any question present
in person or by proxy shall decide such question unless the question is one upon
which, by express provision of the applicable statute or the Articles of
Incorporation, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
3
SECTION 10. MANNER OF VOTING. Each shareholder shall at every meeting of the
shareholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such shareholder; provided, however,
that (i) no proxy shall be valid after eleven (11) months from its date unless
the proxy expressly provides for a longer period, and (ii) except where the
transfer books of the Corporation have been closed or a date has been fixed as a
record date for the determination of its shareholders entitled to vote, no share
of stock that has been transferred on the books of the Corporation within twenty
(20) days next preceding any election of directors shall be voted at such
election for directors.
SECTION 11. RECORD DATE. The Board of Directors may fix a date, not
exceeding sixty (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, and in such case only shareholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the Corporation after any record date so fixed. The Board of Directors
may close the books of the Corporation against transfers of shares during the
whole or any part of such period.
SECTION 12. ORGANIZATION OF MEETINGS. The President shall preside at all
meetings of the shareholders, and in his or her absence the Treasurer shall act
as Chairman. The Secretary shall act as secretary of all meetings of the
shareholders, or in his or her absence any person appointed by the Chairman
shall act as secretary.
SECTION 13. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at a shareholders' meeting may be taken without a meeting if authorized by
a writing or writings signed by all of the holders of shares who would be
entitled to vote on that action. Such action shall be effective at the time the
last signature is placed on such writing or writings, unless a different
effective time is provided in the written action. If any action so taken
requires a certificate to be filed in the office of the Secretary of State, the
officer signing such certificate shall state therein that the action was
effected in the manner aforesaid.
SECTION 14. SHAREHOLDER NOMINATIONS OF DIRECTORS. Any shareholder that
intends to make a nomination of one or more persons for election to the Board of
Directors of the Corporation shall have given timely notice thereof in writing
to the Secretary of the Corporation. To be timely, a shareholder's notice shall
be delivered to the Secretary at the principal executive office of the
Corporation not less than one hundred twenty (120) days prior to the first
anniversary of the date that the Corporation first released or mailed its proxy
statement to shareholders in connection with the preceding year's regular or
annual meeting; provided, however, that in the event that the date of the
regular or annual meeting is advanced by more than thirty (30) days or delayed
by more than sixty (60) days from the anniversary of the preceding year's
regular or annual meeting date, notice by the shareholder to be timely must be
so delivered not later than the close of business on the later of the one
hundred twentieth (120th) day prior to such regular or annual
4
meeting or the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made. Such shareholder's notice shall set
forth (a) as to each nominee whom the shareholder proposes to nominate for
election or reelection as a director, (i) the name, age, business address and
residence address of the nominee, (ii) the principal occupation or employment of
the nominee, (iii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the nominee, and (iv) any other
information concerning the nominee that would be required under the rules of the
Securities and Exchange Commission in a proxy statement soliciting proxies of
the election of such nominee; and (b) as to the shareholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination is made, (i)
the name and address of such shareholder, as they appear on the Corporation's
books, and of such beneficial owner and (ii) the class and number of shares of
the Corporation which are owned beneficially and of record by such shareholder
and such beneficial owner. Such notice shall include a signed consent to serve
as a director of the Corporation, if elected, of each such nominee. The
Corporation may require any proposed nominee to furnish such other information
as may reasonably be required by the Corporation to determine the eligibility of
such proposed nominee to serve as a director of the Corporation.
ARTICLE III
Board of Directors
SECTION 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed by or under its Board of Directors which may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these Bylaws required to be
exercised or done by the shareholders.
SECTION 2. NUMBER AND TERM OF OFFICE. The number of directors which shall
constitute the entire Board of Directors shall not be less than one (1) nor more
than nine (9), which number shall be determined from time to time by the Board
of Directors. The Directors shall be divided into three (3) classes, as nearly
equal in number as possible. The term of office of the first class shall expire
at the 1999 annual meeting of the shareholders of the Corporation; the term of
office of the second class shall expire at the 2000 annual meeting of the
shareholders of the Corporation; and the term of office of the third class shall
expire at the 2001 annual meeting of the shareholders of the Corporation. At
each annual meeting of the shareholders after such classification, the number of
directors equal to the number of the class whose term expires on the day of such
meeting shall be elected for a term of three (3) years. Directors shall hold
office until expiration of the terms for which they were elected and qualified.
SECTION 3. RESIGNATION AND REMOVAL. Any director may resign at any time by
giving written notice to the Corporation. Such resignation shall take effect on
the date of the receipt of such notice, or at any later time specified therein,
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective. Any director may be removed from
office as a director at any time by the
5
shareholders, but only for cause, and only by the affirmative vote of a majority
of the outstanding voting power entitled to elect such director.
SECTION 4. VACANCIES. If the office of any director becomes vacant by
reason of death, resignation, retirement, disqualification, removal from office,
increase in the number of directors or otherwise, a majority of the remaining
directors, although less than a quorum, at a meeting called for that purpose,
may choose a successor, who, unless removed for cause as set forth in Section 3
above, shall hold office until the expiration of the term of the class for which
appointed or until a successor shall be elected and qualified.
SECTION 5. MEETINGS OF DIRECTORS. The Board of Directors of the Corporation
may hold meetings, from time to time, either within or without the State of
Minnesota, at such place as a majority of the members of the Board of Directors
may from time to time appoint. If the Board of Directors fails to select a
place for the meeting, the meeting shall be held at the principal executive
office of the Corporation.
SECTION 6. CALLING MEETINGS. Meetings of the Board of Directors may be
called by (i) the President on five (5) business days' notice or (ii) any
director on ten (10) business days' notice, to each director, either personally,
by telephone or by mail or telegram. Every such notice shall state the date,
time and place of the meeting. Notice of a meeting called by a person other
than the President shall state the purpose of the meeting.
SECTION 7. PARTICIPATION BY CONFERENCE TELEPHONE. Directors of the
Corporation may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by that means shall constitute presence in person at the meeting.
SECTION 8. WAIVER OF NOTICE. A director may waive notice of a meeting of
the Board of Directors. A waiver of notice by a director entitled to notice is
effective whether given before, at, or after the meeting, and whether given in
writing, orally, or by attendance. Attendance by a director at a meeting is a
waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.
SECTION 9. 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
by actual delivery prior to the meeting of such advance written consent or
opposition to the President or Treasurer or a director who is present at the
meeting. If the director is not present at the meeting, advance written consent
or opposition to a proposal shall 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.
6
SECTION 10. QUORUM. At all meetings of the Board of Directors a majority of
the directors shall constitute a quorum for the transaction of business, and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the Board of Directors, except as may be otherwise
specifically provided by applicable statute or by the Articles of Incorporation.
If a quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present. If a
quorum is present at the call of a meeting, the directors may continue to
transact business until adjournment notwithstanding the withdrawal of enough
directors to leave less than a quorum.
SECTION 11. ORGANIZATION OF MEETINGS. The President shall preside at all
meetings of the Board of Directors, and in his or her absence the Treasurer
shall act as Chairman. The Secretary shall act as secretary of all meetings of
the Board of Directors, and in his or her absence any person appointed by the
Chairman shall act as secretary.
SECTION 12. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of
Directors and such written consent is filed with the minutes of proceedings of
the Board of Directors. If the proposed action need not be approved by the
shareholders and the Articles of Incorporation so provide, action may be taken
by written consent signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present. Such action shall be effective on the date on which the
last signature is placed on such writing or writings, or such other effective
date as is set forth therein.
SECTION 13. COMPENSATION OF DIRECTORS. By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of attendance
at each meeting of the Board of Directors, and may be paid a stated amount as a
director or a fixed sum for attendance at each meeting of the Board of
Directors, or both. No such payment shall preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
Officers
SECTION 1. NUMBER. The officers of the Corporation shall be chosen by the
Board of Directors and shall include a President, a Secretary, and a Treasurer.
The Board of Directors may also choose one or more Vice Presidents, and one or
more Assistant Secretaries and Assistant Treasurers. Any number of offices or
functions of those offices may be held or exercised by the same person.
7
SECTION 2. ELECTION. The Board of Directors at its first meeting after each
regular meeting of shareholders shall choose a President, a Secretary and a
Treasurer.
SECTION 3. OTHER OFFICERS AND AGENTS. The Board of Directors may appoint
such other officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 4. SALARIES. The salaries of all officers of the Corporation shall
be fixed by the Board of Directors.
SECTION 5. TERM OF OFFICE. The officers of the Corporation shall hold
office until their successors are chosen and qualify. Any officer elected or
appointed by the Board of Directors may be removed with or without cause at any
time by the affirmative vote of a majority of the Board of Directors. Any
officer may resign at any time by giving written notice to the President or the
Secretary of the Corporation. Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors.
SECTION 6. THE PRESIDENT. POWERS AND DUTIES. The President shall be the
chief executive officer of the Corporation, shall preside at all meetings of the
Board of Directors and the shareholders, shall have general active management of
the business of the Corporation, shall see that all orders and resolutions of
the Board of Directors are carried into effect, and shall perform such other
duties prescribed by the Board of Directors. He or she shall execute bonds,
mortgages, and other contracts of the Corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation, and shall maintain
records of and, whenever necessary, certify all proceedings of the Board of
Directors and the shareholders. Except as otherwise prescribed by these Bylaws
or the Board of Directors, he or she shall prescribe duties of other officers.
SECTION 7. THE VICE PRESIDENT. POWERS AND DUTIES. The Vice President, if
any, or if there shall be more than one, the Vice Presidents in the order
determined by the Board of Directors, shall, in the absence or disability of the
President, perform the duties and exercise the powers of the President and shall
perform such other duties and have such other powers as the Board of Directors
or the President may from time to time prescribe.
SECTION 8. THE SECRETARY. POWERS AND DUTIES. The Secretary shall attend
all meetings of the Board of Directors and all meetings of the shareholders and
record all the proceedings of the meetings of the Corporation and of the Board
of Directors in a book to be kept for that purpose. He or she shall give, or
cause to be given, notice of all meetings of the shareholders and special
meetings of the Board of Directors, and shall perform such other duties as may
be prescribed by the Board of Directors or President, under whose supervision he
or she shall be.
8
SECTION 9. ASSISTANT SECRETARY. The Assistant Secretary or, if there be
more than one, the Assistant Secretaries, in the order determined by the Board
of Directors, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors or the President may
from time to time prescribe.
SECTION 10. THE TREASURER. POWERS AND DUTIES. The Treasurer shall be the
chief financial officer, shall have custody of the Corporation's funds and
securities, shall keep full and accurate accounts of receipts and disbursements
in books belonging to the Corporation, shall deposit all monies and other
valuable effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors, and shall perform
such other duties prescribed by the Board of Directors or by the President.
SECTION 11. TREASURER'S ACCOUNTING. He or she shall disburse such funds of
the Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the President and the Board
of Directors, at its regular meetings, or when the Board of Directors so
requires, an account of all his or her transactions as Treasurer and of the
financial condition of the Corporation.
SECTION 12. TREASURER'S BOND. If required by the Board of Directors, he or
she shall give the Corporation a bond (which shall be renewed every six (6)
years) in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his or her
office and for the restoration to the Corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his or her possession or under his
or her control belonging to the Corporation.
SECTION 13. ASSISTANT TREASURER. The Assistant Treasurer or, if there shall
be more than one, the Assistant Treasurers, in the order determined by the Board
of Directors, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board of Directors or the President may
from time to time prescribe.
ARTICLE V
Certificates of Stock
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in the Corporation
shall be entitled to have a certificate, signed by the President and the
Secretary or an Assistant Secretary of the Corporation, if there be one,
certifying the number of shares owned by him or her in the Corporation. The
certificates of stock of each class shall be numbered in the order of their
issue.
SECTION 2. FACSIMILE SIGNATURES. Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent, or (2) by a transfer clerk acting
on behalf of the Corporation and a registrar, the signature of any such
President, Secretary or Assistant Secretary may
9
be facsimile. In case any officer or officers who have signed, or whose
facsimile signature or signatures have been used on any such certificate or
certificates shall cease to be such officer or officers of the Corporation
before such certificate or certificates have been delivered by the Corporation,
such certificate or certificates may nevertheless be adopted by the Corporation
and be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the Corporation.
SECTION 3. LOST OR DESTROYED CERTIFICATES. The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner as it shall require and/or to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed.
SECTION 4. TRANSFERS OF STOCK. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
SECTION 5. REGISTERED SHAREHOLDERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall be entitled
to hold liable for calls and assessments a person so registered on its books as
the owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by applicable statute.
ARTICLE VI
General Provisions
SECTION 1. DIVIDENDS. Subject to the provisions of the applicable statute
and the Articles of Incorporation, dividends upon the capital stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock.
SECTION 2. RESERVES. Before payment of any dividend, there may be set aside
out of any funds of the Corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to
10
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purposes as the directors
shall think conducive to the interest of the Corporation, and the directors may
modify or abolish any such reserve in the manner in which it was created.
SECTION 3. CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
SECTION 4. FISCAL YEAR. The fiscal year of the Corporation shall be fixed
by resolution of the Board of Directors.
SECTION 5. SEAL. The Corporation shall not have a corporate seal.
ARTICLE VII
Amendments
SECTION 1. AMENDMENTS. The power to make, alter, amend or rescind these
Bylaws is vested in the Board of Directors, subject to the power of the
shareholders to adopt, amend or repeal these Bylaws, as permitted by applicable
statute.
ARTICLE VIII
Indemnification
SECTION 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a party
or is threatened to be made a party to or is involved in or called as a witness
in any Proceeding because he or she is an Indemnified Person, shall be
indemnified and held harmless by the corporation to the fullest extent permitted
under the Minnesota Statutes (the "Statutes"), as the same now exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than the Statutes permitted the corporation to provide prior to such
amendment). Such indemnification shall cover all expenses incurred by an
Indemnified Person (including, but not limited to, attorneys' fees and other
expenses of litigation) and all liabilities and losses (including, but not
limited to, judgments, fines, ERISA or other excise taxes or penalties and
amounts paid or to be paid in settlement) incurred by such person in connection
therewith.
Notwithstanding the foregoing, except with respect to indemnification specified
in section 3 of this Article, the corporation shall indemnify an Indemnified
Person in connection with a Proceeding (or part thereof) initiated by such
person only if such Proceeding (or part thereof) was authorized by the board of
directors of the corporation.
For purposes of this Article:
(a) a "Proceeding" is an action, suit or proceeding, whether civil, criminal,
administrative or investigative, and any appeal therefrom;
11
(b) an "Indemnified Person" is a person who is, was or had agreed to become a
director or an officer or a Delegate, as defined herein, of the corporation or
the legal representative of any of the foregoing; and
(c) a "Delegate" is a person serving at the request of the corporation or a
subsidiary of the corporation as a director, trustee, fiduciary, or officer of
such subsidiary or of another corporation, partnership, joint venture, trust or
other enterprise.
SECTION 2. EXPENSES. Expenses, including attorneys' fees, incurred by a
person indemnified pursuant to section 1 of this Article in defending or
otherwise being involved in a Proceeding shall be paid by the corporation in
advance of the final disposition of such Proceeding, including any appeal
therefrom, upon receipt of an undertaking (the "Undertaking") by or on behalf of
such person to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation; provided, that in
connection with a Proceeding (or part thereof) initiated by such person, except
a Proceeding authorized by section 3 of this Article, the corporation shall pay
said expenses in advance of final disposition only if such Proceeding (or part
thereof) was authorized by the board of directors. A person to whom expenses
are advanced pursuant hereto shall not be obligated to repay pursuant to the
Undertaking until the final determination of any pending Proceeding in a court
of competent jurisdiction concerning the right of such person to be indemnified
or the obligation of such person to repay pursuant to the Undertaking.
SECTION 3. PROTECTION OF RIGHTS. If a claim under section 1 of this Article
is not promptly paid in full by the corporation after a written claim has been
received by the corporation or if expenses pursuant to section 2 of this Article
have not been promptly advanced after a written request for such advancement
accompanied by the Undertaking has been received by the corporation, the
claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim or the advancement of expenses. If
successful, in whole or in part, in such suit, such claimant shall also be
entitled to be paid the reasonable expense thereof. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any Proceeding in advance of its final disposition where
the required Undertaking has been tendered to the corporation) that
indemnification of the claimant is prohibited by law, but the burden of proving
such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, independent legal counsel, or its
stockholders) to have made a determination, if required, prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances, nor an actual determination by the corporation (including its
board of directors, independent legal counsel, or its stockholders) that
indemnification of the claimant is prohibited, shall be a defense to the action
or create a presumption that indemnification of the claimant is prohibited.
12