Document:

exv10w1

 

EXHIBIT 10.1

FORM OF DIRECTOR’S

RESTRICTED STOCK UNIT AWARD AGREEMENT

     THIS AGREEMENT,
dated as of ____________, 20___, is between ATS MEDICAL, INC., a Minnesota
corporation (the “Company”), and ____________, an individual resident of the State of
____________(“Director”).

RECITALS

     A. Pursuant to Section 7 of the ATS Medical, Inc. 2000 Stock Incentive Plan, the Company is
required to grant to Director, effective as of the date of this Agreement, an award of restricted
stock units of the Company’s common stock, par value $.01 per share (the “Common Stock”), on the
terms and subject to the conditions set forth in this Agreement and the ATS Medical, Inc. 2000
Stock Incentive Plan.

     B. Director desires to accept such grant.

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
parties hereto hereby agree as follows:

     1. Definitions. As used in this Agreement, the following terms have the meanings set
forth below:

     “Award” has the meaning ascribed to such term in Section 2 hereof.

     “Board” means the Board of Directors of the Company.

     A “Change in Control” of the Company shall be deemed to have occurred if (a) a change in
control occurs of a nature that would be required to be reported in response to item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended,
whether or not the Company is then subject to such reporting requirement; (b) more than 35 percent
of the then outstanding shares of Common Stock is acquired by any person or group; or (c)
individuals who at the date hereof constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof (unless the election or the nomination for
election of each new director was approved by a vote of at least two-thirds of directors then still
in office who were directors at the beginning of the period and/or their successor directors who
were recommended or elected to succeed a beginning director by at least two-thirds of the directors
who were directors at the beginning of the period).

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Common Stock” has the meaning specified in Recital A hereof.

     “Person” means an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.

 

 

     “Plan” means the ATS Medical, Inc. 2000 Stock Incentive Plan, as amended from time to time.

     “Restricted Stock Units” means the right to receive Vested Shares upon their vesting in
accordance with Section 3 below.

     “Shares” means, collectively, the shares of Common Stock subject to the Award, whether or not
such shares are Vested Shares.

     “Vested Shares” means the Shares with respect to which the Restricted Stock Units have vested
at any particular time.

     2. Award. The Company, effective as of the date of this Agreement, hereby grants to
Director ____________Restricted Stock Units (the “Award”) representing the right to receive
____________Vested Shares, subject to the terms and conditions set forth herein and in the Plan.

     3. Vesting.

     (a) Subject to the terms and conditions of this Agreement, the Restricted Stock Units awarded
hereunder to Director shall vest and become the right to receive Vested Shares in accordance with
the following schedule:

     [Initial Grants — Use this vesting table]

	 	 	 
	 	 	Percentage or Number
	On the Following Date	 	of Shares that Vest
	[Insert second anniversary of date 

of grant]
	 	100%

     [Annual Grants — Use this vesting table]

	 	 	 
	On Earlier of the	 	Percentage or Number
	Following Dates	 	of Shares that Vest
	Immediately prior to Second 

Annual Meeting following Date 

of Grant
	 	100%
	 	 	 
	 
	OR	 
	 	 	 
	June 30, 20___[insert second 

year following year of grant]
	 	100%

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     (b) Notwithstanding the vesting provisions contained in Section 3(a) above, but subject to the
other terms and conditions set forth herein, if Director has continuously served as a director of
the Company until the date of a Change In Control of the Company, all of the Restricted Stock Units
shall immediately vest on the date of such Change In Control.

     (c) In the event of the disability (within the meaning of Section 22(e)(3) of the Code) or
death of Director, if Director has continuously served as a director of the Company until the date
of such disability or death, Director or his estate shall become immediately vested, as of the date
of such disability or death, in all of the Restricted Stock Units subject to the Award.

     (d) Except as provided in Section 3(c), if Director ceases to be a director for any reason
prior to the vesting of the Restricted Stock Units pursuant to Sections 3(a) or 3(b) hereof,
Director’s rights to all of the Restricted Stock Units (and the Shares subject to the Award) not
vested on the date that Director ceases to be a director shall be immediately and irrevocably
forfeited and the Director will retain no rights with respect to the forfeited units.

     4. Additional Restriction on Transfer of Restricted Stock Units.

     The Restricted Stock Units cannot be sold, assigned, transferred, gifted, pledged,
hypothecated, or in any manner encumbered or disposed of at any time prior to delivery of the
Shares underlying the Restricted Stock Units after the Restricted Stock Units have vested pursuant
to Section 3 above.

     5. Issuance and Custody of Certificate; Representations of Director.

           (a) Subject to the restrictions in this Section 5, upon vesting of the Restricted Stock Units
and following payment of any applicable taxes pursuant to section 8 of this Agreement, the Company
shall promptly cause to be issued and delivered to Director a certificate or certificates
evidencing such Vested Shares, free of any restrictive legends and registered in the name of
Director or in the name of Director’s legal representatives, beneficiaries or heirs, as the case
may be, and shall cause such certificate or certificates to be delivered to Director or Director’s
legal representatives, beneficiaries or heirs.

           (b) The issuance of any Common Stock in accordance with this Award shall only be effective at
such time that the sale or issuance of Common Stock pursuant to this Agreement will not violate any
state or federal securities or other laws.

           (c) At any time after the vesting of the Restricted Stock Units and prior to the issuance of
the Vested Shares, if the issuance of the Vested Shares to the Director is prohibited due to
limitations under this Section 5, the Company shall use its reasonable best efforts to remove such
limitations, unless such limitations relate solely to Director’s personal situation. If such
limitations relate solely to Director’s personal situation, the Company will use its reasonable
best efforts to cooperate with the Director in resolving such limitation.

     6. Rights as Shareholder. Prior to the Restricted Stock Units vesting and Director
receiving his shares of Common Stock underlying the Restricted Stock Units pursuant to Section 5
above, Director shall not have ownership or rights of ownership of any Common Stock

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underlying the Restricted Stock Units awarded hereunder. However, Director shall be entitled
to receive dividend equivalents on the Restricted Stock Units awarded, whether vested or unvested,
when and if dividends are declared by the Board on the Common Stock, in an amount of cash per share
equal to and on the same payment dates as dividends paid to other common stockholders of the
Company. Dividend equivalents paid before delivery of the Vested Shares will be treated as
compensation income for tax purposes by the Company.

     7. Distributions and Adjustments. In accordance with Section 4(c) of the Plan, the
Award shall be subject to adjustment in the event that any distribution, recapitalization,
reorganization, merger or other event covered by Section 4(c) of the Plan shall occur.

     8. Taxes. In order to provide the Company with the opportunity to claim the benefit
of any income tax deduction which may be available to it in connection with this restricted stock
unit award, and in order to comply with all applicable federal or state tax laws or regulations,
the Company may take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state income and social security taxes are collected from Director.

     9. Director’s Service. Nothing in this Agreement shall confer upon Director any right
to continue to serve as a director of the Company or interfere with the right of the Company to
terminate Director’s service as a director or to increase or decrease Director’s compensation at
any time.

     10. Notices. All notices, claims, certificates, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been duly given and
delivered if personally delivered or if sent by nationally recognized overnight courier, by
facsimile or by registered or certified mail, return receipt requested and postage prepaid,
addressed as follows:

           (a) If to the Company, to it at:

	 	 	 	ATS Medical, Inc.

3905 Annapolis Lane, Suite 105

Minneapolis, MN 55447

Attention:       Corporate Secretary

Facsimile:       (763) 553-0052

           (b) If to Director, to him at such Director’s address as most recently supplied to the Company
and set forth in the Company’s records; or

           (c) to such other address as the party to whom notice is to be given may have furnished to the
other party in writing in accordance herewith.

     Any such notice or communication shall be deemed to have been received (i) in the case of
personal delivery, on the date of such delivery (or if such date is not a business day, on the next
business day), (ii) in the case of nationally-recognized overnight courier, on the next business
day after the date sent, (iii) in the case of facsimile transmission, when received (or if not sent
on a business day, on the next business day after the date sent), and (iv) in the case of

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mailing, on the third business day following the date on which the piece of mail containing
such communication is posted.

     11. Waiver of Breach. The waiver by either party of a breach of any provision of this
Agreement must be in writing and shall not operate or be construed as a waiver of any other or
subsequent breach.

     12. Undertaking. Both parties hereby agree to take whatever additional actions and
execute whatever additional documents either party may in their reasonable judgment deem necessary
or advisable in order to carry out or effect one or more of the obligations or restrictions imposed
on the other party under the provisions of this Agreement.

     13. Plan Provisions Control. The Award is made subject to the terms and provisions of
the Plan. In the event that any provision of the Agreement conflicts with or is inconsistent in any
respect with the terms of the Plan, the terms of the Plan shall control.

     14. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Minnesota (without giving effect to principles of conflicts of
laws).

     15. Counterparts. This Agreement may be executed in one or more counterparts, and
each such counterpart shall be deemed to be an original, but all such counterparts together shall
constitute but one agreement.

     16. Entire Agreement. This Agreement (and the other writings incorporated by
reference herein, including the Plan) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior or contemporaneous written or oral
negotiations, commitments, representations, and agreements with respect thereto.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.

	 	 	 	 	 
	 	ATS MEDICAL, INC,

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	DIRECTOR

 	 
	 	  	 	 
	 	 	Name:  	 	 
	 	 	 	 
	 

5exv10w2

 

Exhibit 10.2

BYLAWS

OF

ATS MEDICAL, INC.

(as amended February 13, 2007)

ARTICLE I.

OFFICES, CORPORATE SEAL

     Section 1.01. Registered Office. The registered office of the corporation in
Minnesota shall be that set forth in the Articles of Incorporation or in the most recent amendment
of the Articles of Incorporation or resolution of the directors filed with the Secretary of State
of Minnesota changing the registered office.

     Section 1.02. Other Offices. The corporation may have such other offices, within or
without the State of Minnesota, as the directors shall, from time to time, determine.

     Section 1.02. Corporate Seal. The corporation shall have no seal.

ARTICLE II.

MEETINGS OF SHAREHOLDERS

     Section 2.01. Place and Time of Meetings. Except as provided otherwise 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 directors and, in the absence of
such designation, shall be held at the registered office of the corporation in the State of
Minnesota. The directors shall designate the time of day for each meeting and, in the absence of
such designation, every meeting of shareholders shall be held at ten o’clock a.m.

     Section 2.02. Regular Meetings.

     (a) A regular meeting of the shareholders shall be held on such date as the Board of Directors
shall by resolution establish.

     (b) At a regular meeting the shareholders, voting as provided in the Articles of Incorporation
and these Bylaws, shall designate the number of directors to constitute the Board of Directors
(subject to the authority of the Board of Directors thereafter to increase or decrease the number
of directors as permitted by law), shall elect qualified successors for directors who serve for an
indefinite term or whose terms have expired or are due to expire within six months after the date
of the meeting and shall transact such other business as may properly come before them.

 

 

     Section 2.03. Special Meetings. Special meetings of the shareholders may be held at
any time and for any purpose and may be called by the President, Treasurer, any two or more
directors, or by one or more shareholders holding 10% or more of the shares entitled to vote on the
matters to be presented to the meeting.

     Section 2.04. Quorum, Adjourned Meetings. The holders of a majority of the shares
entitled to vote shall constitute a quorum for the transaction of business at any regular or
special meeting. In case a quorum shall not be present at a meeting, those present may adjourn the
meeting to such day as they shall, by majority vote, agree upon, and a notice of such adjournment
and the date and time at which such meeting shall be reconvened shall be mailed to each
shareholders entitled to vote at least 5 days before such reconvened meeting. If a quorum is
present, a meeting may be adjourned from time to time without notice other than announcement at the
meeting. 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 of the withdrawal
of enough shareholders to leave less than a quorum.

     Section 2.05. 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 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 Bylaws.

     Section 2.06. Closing of Books. 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, notwithstanding any
transfer of 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 the transfer of shares during the whole or
any part of such period. If the Board of Directors fails to fix a record date for determination of
the shareholders entitled to notice of, and to vote at, any meeting of shareholders, the record
date shall be the 20th day of preceding the date of such meeting.

     Section 2.07. 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 address as shown
by the books of the corporation, a notice setting out the time and place of each regular 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 to all
shareholders of record, whether entitled to vote or not, at least fourteen days prior thereto.
Every notice of any special meeting called pursuant to Section 2.03 hereof shall state the purpose
or purposes for which the meeting has been called, and the business transacted at all special
meetings shall be confined to the purpose stated in the notice.

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     Section 2.08. Waiver of Notice. Notice of any regular or special meeting may be
waived by any shareholder either before, at or after such meeting orally or in writing signed by
such shareholder or a representative entitled to vote the shares of such shareholder. A
shareholder, by his 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 time may not lawfully be considered at that meeting and does
not participate in the consideration of the item at that meeting.

     Section 2.09. 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.

ARTICLE III.

DIRECTORS

     Section 3.01. General Powers. The business and affairs of the corporation shall be
managed by or under the authority of the Board of Directors, except as otherwise permitted by
statute.

     Section 3.02. Number, Qualification and Term of Office. Until the first meeting of
shareholders, the number of directors shall be the number named in the Articles of Incorporation
or, if no such number is named therein, the number elected by the incorporator. Thereafter, the
number of directors shall be established by resolution of the shareholders (subject to the
authority of the Board of Directors to increase or decrease the number of directors as permitted by
law). In the absence of such shareholder resolution, the number of directors shall be the number
last fixed by the shareholders, the Board of Directors, the incorporator or the Articles of
Incorporation. Directors need not be shareholders. Each of the directors shall hold office until
the regular meeting of shareholders next held after such director’s election and until such
director’s successor shall have been elected and shall qualify, or until the earlier death,
resignation, removal, or disqualification of such director; provided, however, that no director
shall be elected to a term in excess of five years.

     Section 3.03. 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 3.04. Calling Meetings; Notice. Meetings of the Board of Directors may be
called by the Chairman of the Board by giving at least twenty-four hours’ notice, or by any other
director by giving at least five days’ notice, of the date, time and place thereof to each director
by mail, telephone, telegram or in person.

     Section 3.05. 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 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.

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     Section 3.06. Quorum. 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.

     Section 3.07. 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 3.08. Conference 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 3.08 shall be deemed present in person at the meeting; and
the place of the meeting shall be the place of origination of the conference telephone conversation
or other comparable communication technique.

     Section 3.09. Vacancies; Newly Created Directorships. Vacancies in the Board of
Directors of this corporation occurring by reason of death, or resignation, removal or
disqualification shall be filled for the unexpired term by a majority of the remaining directors of
the Board although less than a quorum; newly created directorships resulting from an increase in
the authorized number of directors by action of the Board of Directors as permitted by Section 3.02
may be filled by a majority vote of the directors serving at the time of such increase; and each
director elected pursuant to this Section 3.09 shall be a director until such director’s successor
is elected by the shareholders at their next regular or special meeting.

     Section 3.10. Removal. Any or all of the directors may be removed from office at any
time, with or without cause, by the affirmative vote of the shareholders holding a majority of the
shares entitled to vote at an election of directors except, as otherwise provided by Minnesota
Statutes Section 302A.223, as amended, when the shareholders have the right to cumulate their
votes. A director named by the Board of Directors to fill a vacancy may be removed from office at
any time, with or without cause, by the affirmative vote of the remaining directors if the
shareholders have not elected directors in the interim between the time of the appointment to fill
such vacancy and the time of the removal. In the event that the entire Board or any one or more
directors be so removed, new directors shall be elected at the same meeting.

     In addition to the foregoing, any director may be removed at any time by the affirmative vote
of a majority of the remaining directors if the remaining directors determine that the director to
be removed is engaged in an activity that is competitive with any business of the Company. A
director may be determined to be engaged in an activity if he or she is an employee, director,
partner, consultant, owner, representative, agent or shareholder (other than a shareholder
beneficially owning less than 1% of the outstanding stock) of a company, partnership, sole
proprietorship or other organization. An activity may be deemed to be competitive with the Company
if the product or service created by the activity is the same as or an alternative to any

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of the products or services of the Company. The Board of Directors shall determine whether a
director is engaged in a competitive activity utilizing the guidelines described in the previous
two sentences as well as any other guidelines it determines to be relevant. The Board’s decision
shall not be overturned by any court unless the decision is shown to be clearly erroneous.

     Section 3.11. Committees. 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. 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. Committees are subject to the direction and control
of, and vacancies in the membership thereof shall be filled by, the Board of Directors, except as
provided by Minnesota Statutes Section 302A.243.

     A majority of the members of the committee present at a meeting is a quorum for the
transaction of business, unless a larger or small proportion or number is provided in a resolution
approved by the affirmative vote of a majority of the directors present.

     Section 3.12. 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 all of the directors or committee members, unless the Articles
provide otherwise and the action need not be approved by the shareholders.

     Section 3.13. Compensation. Directors who are not salaried officers of this
corporation shall receive such fixed sum per meeting attended or such fixed annual sum as shall be
determined, from time to time, by resolution of the Board of Directors. The Board of Directors
may, by resolution, provide that all directors shall receive their expenses, if any, of attendance
at meetings of the Board of Directors or any committee thereof. Nothing herein contained shall be
construed to preclude any director from serving this corporation in any other capacity and
receiving proper compensation therefor.

ARTICLE IV.

OFFICERS

     Section 4.01. Number. The officers of the corporation shall consist of a Chairman of
the Board (if one is elected by the Board), the President, one or more Vice Presidents (if desired
by the Board), a Treasurer, a Secretary (if one is elected by the Board) and such other officers
and agents as may, from time to time be elected by the Board of Directors. Any number of offices
may be held by the same person.

     Section 4.02. Election Term of Office and Qualifications. 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 President, Treasurer and such other
officers as may be deemed advisable, each of whom shall have the powers, rights, duties,
responsibilities, and terms in office provided for in these Bylaws or a resolution of the Board of
Directors not inconsistent therewith. The President and all other officers who may be directors
shall continue to hold office until the election and qualification of their successors,
notwithstanding an earlier termination of their directorship.

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     Section 4.03. Removal and Vacancies. Any officer may be removed from his 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 person 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 4.04. Chairman of the Board. The Chairman of the Board, if one is elected,
shall preside at all meetings of the shareholders and directors and shall have such other duties as
may be prescribed, from time to time, by the Board of Directors.

     Section 4.05. President. The President shall be the chief executive officer and
shall have general active management of the business of the corporation. In the absence of the
Chairman of the Board, he shall preside at all meetings of the shareholders and directors. He
shall see that all orders and resolutions of the Board of Directors are carried into effect. He
shall execute and deliver, in the name of the corporation, any deeds, mortgages, bonds, contracts
or other instruments pertaining to the business of the corporation unless the authority to execute
and deliver is required by law to be exercised by another person or is expressly delegated by the
Articles or Bylaws or by the Board of Directors to some other officer or agent of the corporation.
He shall maintain records of and, whenever necessary, certify all proceedings of the Board of
Directors and the shareholders, and in general, shall perform all duties usually incident to the
office of the President. He shall have such other duties as may, from time to time, be prescribed
by the Board of Directors.

     Section 4.06. Vice President. Each Vice President, if one or more are elected, shall
have such powers and shall perform such duties as prescribed by the Board of Directors or by the
President. In the event of the absence or disability of the President, the Vice President(s) shall
succeed to his power and duties in the order designed by the Board of Directors.

     Section 4.07. Secretary. The Secretary, if one is elected, shall be secretary of and
shall attend all meetings of the shareholders and Board of Directors and shall record all
proceedings of such meetings in the minute book of the corporation. He shall give proper notice of
meetings of shareholders and directors. He shall perform such other duties as may, from time to
time, be prescribed by the Board of Directors or by the President.

     Section 4.08. Treasurer. The Treasurer shall be the chief financial officer and
shall keep accurate financial records for the corporation. He shall deposit all moneys, drafts and
checks in the name of, and to the credit of, the corporation in such banks and depositaries as the
Board of Directors shall, from time to time, designate. He shall have power to endorse, for
deposit, all notes, checks and drafts received by the corporation. He shall disburse the funds of
the corporation, as ordered by the Board of Directors, making proper vouchers therefor. He shall
render to the President and the directors, whenever requested, an account of all his transactions
as Treasurer and of the financial condition of the corporation, and shall perform such other duties
as may, from time to time, be prescribed by the Board of Directors or by the President.

     Section 4.09. Compensation. The officers of this corporation shall receive such
compensation for their services as may be determined, from time to time, by resolution of the Board
of Directors.

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ARTICLE V.

SHARES AND THEIR TRANSFER

     Section 5.01. Certificates for Shares. The shares of the corporation may be either
certificated shares or uncertificated shares or a combination thereof. A resolution approved by a
majority of the directors may provide that some or all of any or all classes and series of the
shares of the corporation will be uncertificated shares. Every owner of certificated 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 President and by the Secretary or an
Assistant Secretary or by such officers as the Board of Directors may designate. If a 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 5.04.

     Section 5.02 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 state 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 5.03 Transfer of Shares. The transfer of shares on the stock transfer books
of the corporation may be authorized only by the shareholder of record thereof, or by such
shareholder’s legal representative, who shall furnish proper evidence of authority to transfer, or
by such shareholder’s duly authorized attorney-in-fact, and, in the case of certificated shares,
upon surrender of the certificate or the certificates for such shares to the corporation or its
transfer agent duly endorsed. 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 5.04. 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 of 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.

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ARTICLE VI.

DIVIDENDS, RECORD DATE

     Section 6.01. Dividends. Subject to the provisions of the Articles of Incorporation,
of these Bylaws, and of law, the Board of Directors may declare dividends whenever, and in such
amounts as, in its opinion, are deemed advisable.

     Section 6.02 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 VII .

BOOKS AND RECORDS, FISCAL YEAR

     Section 7.01. Share Register. The Board of Directors of the corporation shall cause
to be kept at its principal executive office, or at another place or places within the United
States determined by the board:

	 	(1)	 	a share register not more than one year old, containing the names and addresses
of the shareholders and the number and classes of shares held by each shareholder; and
	 
	 	(2)	 	a record of the dates on which certificates or transaction statements
representing shares were issued.

     Section 7.02. Other Books and Records. The Board of Directors shall cause to be kept
at its principal executive office, or, if its principal executive office is not in Minnesota, shall
make available at its registered office within ten days after receipt by an officer of the
corporation of a written demand for them made by a shareholder or other person authorized by
Minnesota Statutes Section 302A.461, originals or copies of:

	 	(1)	 	records of all proceedings of shareholders for the last three years;
	 
	 	(2)	 	records of all proceedings of the board for the last three years;
	 
	 	(3)	 	its articles and all amendments currently in effect;
	 
	 	(4)	 	its bylaws and all amendments currently in effect;
	 
	 	(5)	 	financial statements required by Minnesota Statutes Section 302A.463 and the
financial statements for the most recent interim period prepared in the course of the
operation of the corporation for distribution to the shareholders or to a governmental
agency as a matter of public records;

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	 	(6)	 	reports made to shareholders generally within the last three years;
	 
	 	(7)	 	a statement of the names and usual business addresses of its directors and
principal officers;
	 
	 	(8)	 	any shareholder voting or control agreements of which the corporation is aware;
and
	 
	 	(9)	 	such other records and books of account as shall be necessary and appropriate
to the conduct of the corporate business.

     Section 7.03. Fiscal Year. The fiscal year of the corporation shall be determined by
the Board of Directors.

ARTICLE VIII.

LOANS, GUARANTEES, SURETYSHIP

     Section 8.01. The corporation may lend money to, guarantee an obligation of, become a surety
for, or otherwise financially assist a person if the transaction, or a class of transactions to
which the transaction belongs, is approved by the affirmative vote of a majority of the directors
present, and:

	 	(1)	 	is in the usual and regular course of business of the corporation;
	 
	 	(2)	 	is with, or for the benefit of, a related corporation, and organization in
which the corporation has a financial interest, an organization with which the
corporation has a business relationship, or an organization to which the corporation
has the power to make donations;
	 
	 	(3)	 	is with, or for the benefit of, an officer or other employee of the corporation
or a subsidiary, including an officer or employee who is a director of the corporation
or a subsidiary, and may reasonably be expected, in the judgment of the board, to
benefit the corporation; or
	 
	 	(4)	 	has been approved by the affirmative vote of the holders of two-thirds of the
outstanding shares.

     The loan, guarantee, surety contract or other financial assistance may be with or without interest,
and may be unsecured, or may be secured in the manner as a majority of the directors approve,
including, without limitation, a pledge of or other security interest in shares of the corporation.
Nothing in this section shall be deemed to deny, limit or restrict the power of guaranty or
warranty of the corporation at common law or under a statute of the State of Minnesota.

ARTICLE IX.

INDEMNIFICATION OF CERTAIN PERSONS

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     Section 9.01. 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.

ARTICLE X.

AMENDMENTS

     Section 10.01. These Bylaws may be amended or altered by a vote of the majority of the whole
Board of Directors at any meeting, provided that notice of such proposed amendment shall have been
given in the notice given to the directors of such meeting. Such authority in the Board of
Directors is subject to the power of the shareholders to change or repeal such Bylaws by a majority
vote of the shareholders present or represented at any regular or special meeting of shareholders
called for such purpose, and the Board of Directors shall not make or alter any Bylaws 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 any Bylaw
to increase their number.

ARTICLE XI.

SECURITIES OF OTHER CORPORATIONS

     Section 11.01. Voting Securities Held by the Corporation. Unless otherwise ordered
by the Board of Directors, the President shall have full power and authority on behalf of the
corporation (a) to attend any meeting of security holders of other corporations in which the
corporation may hold securities and to vote such securities on behalf of this corporation; (b) to
execute any proxy for such meeting on behalf of the corporation; or (c) to execute a written action
in lieu of a meeting of such other corporation on behalf of this corporation. At such meeting, the
president shall possess and may exercise any and all rights and power incident to the ownership of
such securities that the corporation possesses. The Board of Directors may, from time to time,
grant such power and authority to one or more other persons and may remove such power and authority
from the President or from any such other person or persons.

     Section 11.02. Purchase and Sale of Securities. Unless otherwise ordered by the
Board of Directors, the President shall have full power and authority on behalf of the corporation
to purchase, sell, transfer or encumber any and all securities of any other corporation owned by
the corporation, and may execute and deliver such documents as may be necessary to effectuate such
purchase, sale, transfer or encumbrance. The Board of Directors may, from time to time, confer
like powers upon any other person or persons.

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