HF 1802

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to business organizations; regulating the 
  1.3             organization, structure, and governance of business 
  1.4             corporations, nonprofit corporations, and limited 
  1.5             liability companies; amending Minnesota Statutes 2002, 
  1.6             sections 302A.011, subdivisions 21, 31, 49, 51, by 
  1.7             adding subdivisions; 302A.111, subdivision 2; 
  1.8             302A.137; 302A.215; 302A.231, subdivisions 4, 6; 
  1.9             302A.401, subdivision 3; 302A.402, subdivision 2; 
  1.10            302A.437, subdivision 1; 302A.441; 302A.471, 
  1.11            subdivisions 1, 3; 302A.473, subdivisions 3, 4; 
  1.12            302A.521, subdivision 1; 302A.651, subdivision 1; 
  1.13            302A.661, subdivision 2; 302A.723, subdivision 1; 
  1.14            317A.011, subdivision 14, by adding a subdivision; 
  1.15            317A.231, subdivisions 4, 5; 317A.447; 322B.03, 
  1.16            subdivisions 36a, 45a; 322B.115, subdivision 2; 
  1.17            322B.155; 322B.346, subdivision 1; 322B.383, 
  1.18            subdivision 1; 322B.386, subdivisions 3, 4; 322B.40, 
  1.19            subdivision 6; 322B.63; 322B.643, subdivisions 4, 6; 
  1.20            322B.77, subdivision 2; Minnesota Statutes 2003 
  1.21            Supplement, section 317A.443, subdivision 2; proposing 
  1.22            coding for new law in Minnesota Statutes, chapters 
  1.23            302A; 322B. 
  1.24  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.25     Section 1.  Minnesota Statutes 2002, section 302A.011, 
  1.26  subdivision 21, is amended to read: 
  1.27     Subd. 21.  [PARENT.] "Parent" of a specified corporation 
  1.28  means a corporation or a foreign corporation that directly, or 
  1.29  indirectly through related organizations, owns more than 50 
  1.30  percent of the voting power of the shares entitled to vote for 
  1.31  directors of the specified corporation.  
  1.32     Sec. 2.  Minnesota Statutes 2002, section 302A.011, 
  1.33  subdivision 31, is amended to read: 
  1.34     Subd. 31.  [SUBSIDIARY.] "Subsidiary" of a specified 
  2.1   corporation means a corporation or a foreign corporation having 
  2.2   more than 50 percent of the voting power of its shares entitled 
  2.3   to vote for directors owned directly, or indirectly through 
  2.4   related organizations, by the specified corporation. 
  2.5      Sec. 3.  Minnesota Statutes 2002, section 302A.011, 
  2.6   subdivision 49, is amended to read: 
  2.7      Subd. 49.  [INTERESTED SHAREHOLDER.] (a) "Interested 
  2.8   shareholder," when used in reference to any issuing public 
  2.9   corporation, means any person that is (1) the beneficial owner, 
  2.10  directly or indirectly, of ten percent or more of the voting 
  2.11  power of the outstanding shares entitled to vote of the issuing 
  2.12  public corporation or (2) an affiliate or associate of the 
  2.13  issuing public corporation and that, at any time within the 
  2.14  four-year period immediately before the date in question, was 
  2.15  the beneficial owner, directly or indirectly, of ten percent or 
  2.16  more of the voting power of the then outstanding shares entitled 
  2.17  to vote of the issuing public corporation.  Notwithstanding 
  2.18  anything stated in this subdivision, 
  2.19     (b) If a person who has not been a beneficial owner of ten 
  2.20  percent or more of the voting power of the outstanding shares 
  2.21  entitled to vote of the issuing public corporation immediately 
  2.22  prior to a repurchase of shares by, or recapitalization of, the 
  2.23  issuing public corporation or similar action shall become a 
  2.24  beneficial owner of ten percent or more of the voting power 
  2.25  solely as a result of the share repurchase, recapitalization, or 
  2.26  similar action, the person shall not be deemed to be the 
  2.27  beneficial owner of ten percent or more of the voting power for 
  2.28  purposes of paragraph (a), clause (1) or (2), unless: 
  2.29     (i) (1) the repurchase, recapitalization, conversion, or 
  2.30  similar action was proposed by or on behalf of, or pursuant to 
  2.31  any agreement, arrangement, relationship, understanding, or 
  2.32  otherwise (whether or not in writing) with, the person or any 
  2.33  affiliate or associate of the person; or 
  2.34     (ii) (2) the person thereafter acquires beneficial 
  2.35  ownership, directly or indirectly, of outstanding shares 
  2.36  entitled to vote of the issuing public corporation and, 
  3.1   immediately after the acquisition, is the beneficial owner, 
  3.2   directly or indirectly, of ten percent or more of the voting 
  3.3   power of the outstanding shares entitled to vote of the issuing 
  3.4   public corporation.  
  3.5      (b) (c) Interested shareholder does not include: 
  3.6      (1) the issuing public corporation or any of its 
  3.7   subsidiaries; or 
  3.8      (2) a savings, employee stock ownership, or other employee 
  3.9   benefit plan of the issuing public corporation or its 
  3.10  subsidiary, or a fiduciary of the plan when acting in a 
  3.11  fiduciary capacity pursuant to the plan.; or 
  3.12     (3) a licensed broker/dealer or licensed underwriter who: 
  3.13     (i) purchases shares of an issuing public corporation 
  3.14  solely for purposes of resale to the public; and 
  3.15     (ii) is not acting in concert with an interested 
  3.16  shareholder. 
  3.17     (d) For purposes of this subdivision, shares beneficially 
  3.18  owned by a plan described in paragraph (c), clause (2), or by a 
  3.19  fiduciary of a plan described in paragraph (c), clause (2), 
  3.20  pursuant to the plan, are not deemed to be beneficially owned by 
  3.21  a person who is a fiduciary of the plan. 
  3.22     Sec. 4.  Minnesota Statutes 2002, section 302A.011, 
  3.23  subdivision 51, is amended to read: 
  3.24     Subd. 51.  [SHARE ACQUISITION DATE.] "Share acquisition 
  3.25  date," with respect to any person and any issuing public 
  3.26  corporation, means the date that the person first becomes an 
  3.27  interested shareholder of the issuing public corporation; 
  3.28  provided, however, that in the event.  Notwithstanding the 
  3.29  foregoing provisions of this subdivision: 
  3.30     (a) if a person becomes, on one or more dates, an 
  3.31  interested shareholder of the issuing public corporation, but 
  3.32  thereafter ceases to be an interested shareholder of the issuing 
  3.33  public corporation, and subsequently again becomes an interested 
  3.34  shareholder, "share acquisition date," with respect to that 
  3.35  person means the date on which the person most recently became 
  3.36  an interested shareholder of the issuing public corporation.; 
  4.1   and 
  4.2      (b) if, on or after August 1, 2004, a person is the 
  4.3   beneficial owner, directly or indirectly, of ten percent or more 
  4.4   of the voting power of the outstanding shares entitled to vote 
  4.5   of the issuing public corporation at the time the issuing public 
  4.6   corporation becomes a publicly held corporation, "share 
  4.7   acquisition date," with respect to that person means the date on 
  4.8   which the person first became the beneficial owner, directly or 
  4.9   indirectly, of ten percent or more of the voting power of the 
  4.10  outstanding shares entitled to vote of the corporation. 
  4.11     Sec. 5.  Minnesota Statutes 2002, section 302A.011, is 
  4.12  amended by adding a subdivision to read: 
  4.13     Subd. 63.  [CONVERTED ORGANIZATION.] "Converted 
  4.14  organization" means the corporation or domestic limited 
  4.15  liability company resulting from a conversion under sections 
  4.16  302A.681 to 302A.691. 
  4.17     Sec. 6.  Minnesota Statutes 2002, section 302A.011, is 
  4.18  amended by adding a subdivision to read: 
  4.19     Subd. 64.  [CONVERTING ORGANIZATION.] "Converting 
  4.20  organization" means the corporation or domestic limited 
  4.21  liability company that effects a conversion under sections 
  4.22  302A.681 to 302A.691. 
  4.23     Sec. 7.  Minnesota Statutes 2002, section 302A.111, 
  4.24  subdivision 2, is amended to read: 
  4.25     Subd. 2.  [STATUTORY PROVISIONS THAT MAY BE MODIFIED ONLY 
  4.26  IN ARTICLES.] The following provisions govern a corporation 
  4.27  unless modified in the articles:  
  4.28     (a) a corporation has general business purposes (section 
  4.29  302A.101); 
  4.30     (b) a corporation has perpetual existence and certain 
  4.31  powers (section 302A.161); 
  4.32     (c) the power to adopt, amend, or repeal the bylaws is 
  4.33  vested in the board (section 302A.181); 
  4.34     (d) a corporation must allow cumulative voting for 
  4.35  directors (section 302A.215, subdivision 2); 
  4.36     (e) the affirmative vote of a majority of directors present 
  5.1   is required for an action of the board (section 302A.237); 
  5.2      (f) a written action by the board taken without a meeting 
  5.3   must be signed by all directors (section 302A.239); 
  5.4      (g) the board may authorize the issuance of securities and 
  5.5   rights to purchase securities (section 302A.401, subdivision 1); 
  5.6      (h) all shares are common shares entitled to vote and are 
  5.7   of one class and one series (section 302A.401, subdivision 2, 
  5.8   clauses (a) and (b)); 
  5.9      (i) all shares have equal rights and preferences in all 
  5.10  matters not otherwise provided for by the board (section 
  5.11  302A.401, subdivision 2, clause (b)); 
  5.12     (j) the par value of shares is fixed at one cent per share 
  5.13  for certain purposes and may be fixed by the board for certain 
  5.14  other purposes (section 302A.401, subdivision 2, clause (c)); 
  5.15     (k) the board or the shareholders may issue shares for any 
  5.16  consideration or for no consideration to effectuate share 
  5.17  dividends, divisions, or combinations, and determine the value 
  5.18  of nonmonetary consideration (section 302A.405, subdivision 1); 
  5.19     (l) shares of a class or series must not be issued to 
  5.20  holders of shares of another class or series to effectuate share 
  5.21  dividends, divisions, or combinations, unless authorized by a 
  5.22  majority of the voting power of the shares of the same class or 
  5.23  series as the shares to be issued (section 302A.405, subdivision 
  5.24  1); 
  5.25     (m) a corporation may issue rights to purchase securities 
  5.26  whose terms, provisions, and conditions are fixed by the board 
  5.27  (section 302A.409); 
  5.28     (n) a shareholder has certain preemptive rights, unless 
  5.29  otherwise provided by the board (section 302A.413); 
  5.30     (o) the affirmative vote of the holders of a majority of 
  5.31  the voting power of the shares present and entitled to vote at a 
  5.32  duly held meeting is required for an action of the shareholders, 
  5.33  except where this chapter requires the affirmative vote of a 
  5.34  plurality of the votes cast (section 302A.215, subdivision 1) or 
  5.35  a majority of the voting power of all shares entitled to vote 
  5.36  (section 302A.437, subdivision 1); 
  6.1      (p) shares of a corporation acquired by the corporation may 
  6.2   be reissued (section 302A.553, subdivision 1); 
  6.3      (q) each share has one vote unless otherwise provided in 
  6.4   the terms of the share (section 302A.445, subdivision 3); 
  6.5      (r) a corporation may issue shares for a consideration less 
  6.6   than the par value, if any, of the shares (section 302A.405, 
  6.7   subdivision 2); and 
  6.8      (s) the board may effect share dividends, divisions, and 
  6.9   combinations under certain circumstances without shareholder 
  6.10  approval (section 302A.402); and 
  6.11     (t) a written action of shareholders must be signed by all 
  6.12  shareholders (section 302A.441).  
  6.13     Sec. 8.  Minnesota Statutes 2002, section 302A.137, is 
  6.14  amended to read: 
  6.15     302A.137 [CLASS OR SERIES VOTING ON AMENDMENTS.] 
  6.16     The holders of the outstanding shares of a class or series 
  6.17  are entitled to vote as a class or series upon a proposed 
  6.18  amendment, whether or not entitled to vote thereon by the 
  6.19  provisions of the articles, if the amendment would:  
  6.20     (a) Increase or decrease the aggregate number of authorized 
  6.21  shares of the class or series; 
  6.22     (b) effect an exchange, reclassification, or cancellation 
  6.23  of all or part of the shares of the class or series, or effect a 
  6.24  combination of outstanding shares of a class or series into a 
  6.25  lesser number of shares of the class or series where each other 
  6.26  class and series is not subject to a similar combination; 
  6.27     (c) (b) effect an exchange, or create a right of exchange, 
  6.28  of all or any part of the shares of another class or series for 
  6.29  the shares of the class or series; 
  6.30     (d) (c) change the rights or preferences of the shares of 
  6.31  the class or series; 
  6.32     (e) Change the shares of the class or series, whether with 
  6.33  or without par value, into the same or a different number of 
  6.34  shares, either with or without par value, of another class or 
  6.35  series; 
  6.36     (f) (d) create a new class or series of shares having 
  7.1   rights and preferences prior and superior to the shares of that 
  7.2   class or series, or increase the rights and preferences or the 
  7.3   number of authorized shares, of a class or series having rights 
  7.4   and preferences prior or superior to the shares of that class or 
  7.5   series; 
  7.6      (g) (e) divide the shares of the class into series and 
  7.7   determine the designation of each series and the variations in 
  7.8   the relative rights and preferences between the shares of each 
  7.9   series, or authorize the board to do so; 
  7.10     (h) (f) limit or deny any existing preemptive rights of the 
  7.11  shares of the class or series; or 
  7.12     (i) (g) cancel or otherwise affect distributions on the 
  7.13  shares of the class or series that have accrued but have not 
  7.14  been declared.  
  7.15     Sec. 9.  Minnesota Statutes 2002, section 302A.215, is 
  7.16  amended to read: 
  7.17     302A.215 [CUMULATIVE VOTING FOR DIRECTORS; CUMULATIVE 
  7.18  VOTING.] 
  7.19     Subdivision 1.  [REQUIRED VOTE.] Unless otherwise provided 
  7.20  in the articles, directors are elected by a plurality of the 
  7.21  voting power of the shares present and entitled to vote on the 
  7.22  election of directors at a meeting at which a quorum is present. 
  7.23     Subd. 2.  [CUMULATIVE VOTING RIGHTS.] Unless the articles 
  7.24  provide that there shall be no cumulative voting, and except as 
  7.25  provided in section 302A.223, subdivision 5, each shareholder 
  7.26  entitled to vote for directors has the right to cumulate those 
  7.27  votes in the election of directors by giving written notice of 
  7.28  intent to cumulate those votes to any officer of the corporation 
  7.29  before the meeting, or to the presiding officer at the meeting 
  7.30  at which the election is to occur at any time before the 
  7.31  election of directors at the meeting, in which case:  
  7.32     (a) The presiding officer at the meeting shall announce, 
  7.33  before the election of directors, that shareholders shall 
  7.34  cumulate their votes; and 
  7.35     (b) Each shareholder shall cumulate those votes either by 
  7.36  casting for one candidate the number of votes equal to the 
  8.1   number of directors to be elected multiplied by the number of 
  8.2   votes represented by the shares, or by distributing all of those 
  8.3   votes on the same principle among any number of candidates.  
  8.4      Subd. 2. 3.  [MODIFICATIONS OF CUMULATIVE VOTING.] No 
  8.5   amendment to the articles or bylaws which that has the effect of 
  8.6   denying, limiting, or modifying the right to cumulative voting 
  8.7   for directors provided in this section shall be adopted if the 
  8.8   votes of a proportion of the voting power sufficient to elect a 
  8.9   director at an election of the entire board under cumulative 
  8.10  voting are cast against the amendment.  
  8.11     Sec. 10.  Minnesota Statutes 2002, section 302A.231, 
  8.12  subdivision 4, is amended to read: 
  8.13     Subd. 4.  [CALLING MEETINGS; NOTICE.] (a) Unless the 
  8.14  articles or bylaws provide for a different time period, a 
  8.15  director may call a board meeting by giving at least ten days' 
  8.16  notice or, in the case of organizational meetings pursuant to 
  8.17  section 302A.171, subdivision 2, at least three days' notice, to 
  8.18  all directors of the date, time, and place of the meeting.  The 
  8.19  notice need not state the purpose of the meeting unless the 
  8.20  articles or bylaws require it.  
  8.21     (b) Any notice to a director given under any provision of 
  8.22  this chapter, the articles, or the bylaws by a form of 
  8.23  electronic communication consented to by the director to whom 
  8.24  the notice is given is effective when given.  The notice is 
  8.25  deemed given if by: 
  8.26     (1) facsimile communication, when directed to a telephone 
  8.27  number at which the director has consented to receive notice; 
  8.28     (2) electronic mail, when directed to an electronic mail 
  8.29  address at which the director has consented to receive notice; 
  8.30  and 
  8.31     (3) any other form of electronic communication by which the 
  8.32  director has consented to receive notice, when directed to the 
  8.33  director. 
  8.34     (c) Consent by a director to notice given by electronic 
  8.35  communication may be given in writing or by authenticated 
  8.36  electronic communication.  Any consent so given may be relied 
  9.1   upon until revoked by the director, provided that no revocation 
  9.2   affects the validity of any notice given before receipt of 
  9.3   revocation of the consent. 
  9.4      Sec. 11.  Minnesota Statutes 2002, section 302A.231, 
  9.5   subdivision 6, is amended to read: 
  9.6      Subd. 6.  [WAIVER OF NOTICE.] A director may waive notice 
  9.7   of a meeting of the board.  A waiver of notice by a director 
  9.8   entitled to notice is effective whether given before, at, or 
  9.9   after the meeting, and whether given in writing, orally, by 
  9.10  authenticated electronic communication, or by attendance.  
  9.11  Attendance by a director at a meeting is a waiver of notice of 
  9.12  that meeting, except where the director objects at the beginning 
  9.13  of the meeting to the transaction of business because the 
  9.14  meeting is not lawfully called or convened and does not 
  9.15  participate thereafter in the meeting.  
  9.16     Sec. 12.  Minnesota Statutes 2002, section 302A.401, 
  9.17  subdivision 3, is amended to read: 
  9.18     Subd. 3.  [PROCEDURE FOR FIXING TERMS.] (a) Subject to any 
  9.19  restrictions in the articles, the power granted in subdivision 2 
  9.20  may be exercised by a resolution or resolutions approved by the 
  9.21  affirmative vote of the directors required by section 302A.237 
  9.22  establishing a class or series, setting forth the designation of 
  9.23  the class or series, and fixing the relative rights and 
  9.24  preferences of the class or series.  Any of the rights and 
  9.25  preferences of a class or series established in the articles or 
  9.26  by resolution of the directors:  
  9.27     (1) may be made dependent upon facts ascertainable outside 
  9.28  the articles, or outside the resolution or resolutions 
  9.29  establishing the class or series, provided that the manner in 
  9.30  which the facts operate upon the rights and preferences of the 
  9.31  class or series is clearly and expressly set forth in the 
  9.32  articles or in the resolution or resolutions establishing the 
  9.33  class or series; and 
  9.34     (2) may incorporate by reference some or all of the terms 
  9.35  of any agreements, contracts, or other arrangements entered into 
  9.36  by the issuing corporation in connection with the establishment 
 10.1   of the class or series if the corporation retains at its 
 10.2   principal executive office a copy of the agreements, contracts, 
 10.3   or other arrangements or the portions incorporated by reference. 
 10.4      (b) A statement setting forth the name of the corporation 
 10.5   and the text of the resolution and certifying the adoption of 
 10.6   the resolution and the date of adoption shall be filed with the 
 10.7   secretary of state before the issuance of any shares for which 
 10.8   the resolution creates rights or preferences not set forth in 
 10.9   the articles; provided, however, where the shareholders have 
 10.10  received notice of the creation of shares with rights or 
 10.11  preferences not set forth in the articles before the issuance of 
 10.12  the shares, the statement may be filed any time within one year 
 10.13  after the issuance of the shares.  The resolution is effective 
 10.14  when the statement has been filed with the secretary of state; 
 10.15  or, if it is not required to be filed with the secretary of 
 10.16  state before the issuance of shares, on the date of its adoption 
 10.17  by the directors. 
 10.18     (c) Filing a statement filed with the secretary of state in 
 10.19  accordance with paragraph (b) is not considered an amendment of 
 10.20  the articles for purposes of sections 302A.135, 302A.137, and 
 10.21  302A.471.  Filing an amendment of such a statement with the 
 10.22  secretary of state is considered an amendment of the articles 
 10.23  for purposes of sections 302A.135, 302A.137, and 302A.471. 
 10.24     Sec. 13.  Minnesota Statutes 2002, section 302A.402, 
 10.25  subdivision 2, is amended to read: 
 10.26     Subd. 2.  [WHEN SHAREHOLDER APPROVAL REQUIRED; FILING OF 
 10.27  ARTICLES OF AMENDMENT.] (a) Articles of amendment must be 
 10.28  adopted by the board and the shareholders under sections section 
 10.29  302A.135 and, if required, section 302A.137 to effect a division 
 10.30  or combination if, as a result of the proposed division or 
 10.31  combination: 
 10.32     (1) the rights or preferences of the holders of outstanding 
 10.33  shares of any class or series will be adversely affected; or 
 10.34     (2) the percentage of authorized shares of any class or 
 10.35  series remaining unissued after the division or combination will 
 10.36  exceed the percentage of authorized shares of that class or 
 11.1   series that were unissued before the division or combination. 
 11.2      (b) If a division or combination is effected under this 
 11.3   subdivision, articles of amendment must be prepared that contain 
 11.4   the information required by section 302A.139. 
 11.5      Sec. 14.  Minnesota Statutes 2002, section 302A.437, 
 11.6   subdivision 1, is amended to read: 
 11.7      Subdivision 1.  [MAJORITY REQUIRED.] Except for the 
 11.8   election of directors, which is governed by section 302A.215, 
 11.9   the shareholders shall take action by the affirmative vote of 
 11.10  the holders of the greater of (1) a majority of the voting power 
 11.11  of the shares present and entitled to vote on that item of 
 11.12  business, or (2) a majority of the voting power of the minimum 
 11.13  number of the shares entitled to vote that would constitute a 
 11.14  quorum for the transaction of business at the meeting, except 
 11.15  where this chapter or the articles require a larger proportion 
 11.16  or number.  If the articles require a larger proportion or 
 11.17  number than is required by this chapter for a particular action, 
 11.18  the articles control. 
 11.19     Sec. 15.  Minnesota Statutes 2002, section 302A.441, is 
 11.20  amended to read: 
 11.21     302A.441 [ACTION WITHOUT A MEETING.] 
 11.22     Subdivision 1.  [METHOD.] An action required or permitted 
 11.23  to be taken at a meeting of the shareholders may be taken 
 11.24  without a meeting by written action signed, or consented to by 
 11.25  authenticated electronic communication, by all of the 
 11.26  shareholders entitled to vote on that action.  The articles of a 
 11.27  corporation that is not a publicly held corporation may provide 
 11.28  that any action may be taken by written action signed, or 
 11.29  consented to by authenticated electronic communication, by 
 11.30  shareholders having voting power equal to the voting power that 
 11.31  would be required to take the same action at a meeting of the 
 11.32  shareholders at which all shareholders were present.  After the 
 11.33  adoption of the initial articles, an amendment to the articles 
 11.34  to permit written action to be taken by less than all 
 11.35  shareholders requires the approval of all of the shareholders 
 11.36  entitled to vote on the amendment. 
 12.1      Subd. 2.  [EFFECTIVE TIME.] The written action is effective 
 12.2   when it has been signed, or consented to by authenticated 
 12.3   electronic communication, by all of those the required 
 12.4   shareholders, unless a different effective time is provided in 
 12.5   the written action.  
 12.6      Subd. 3.  [NOTICE AND LIABILITY.] When written action is 
 12.7   permitted to be taken by less than all shareholders, all 
 12.8   shareholders must be notified of its text and effective time no 
 12.9   later than five days after the effective time of the action.  
 12.10  Failure to provide the notice does not invalidate the written 
 12.11  action.  A shareholder who does not sign or consent to the 
 12.12  written action has no liability for any action authorized by the 
 12.13  written action. 
 12.14     Sec. 16.  Minnesota Statutes 2002, section 302A.471, 
 12.15  subdivision 1, is amended to read: 
 12.16     Subdivision 1.  [ACTIONS CREATING RIGHTS.] A shareholder of 
 12.17  a corporation may dissent from, and obtain payment for the fair 
 12.18  value of the shareholder's shares in the event of, any of the 
 12.19  following corporate actions:  
 12.20     (a) unless otherwise provided in the articles, an amendment 
 12.21  of the articles that materially and adversely affects the rights 
 12.22  or preferences of the shares of the dissenting shareholder in 
 12.23  that it:  
 12.24     (1) alters or abolishes a preferential right of the shares; 
 12.25     (2) creates, alters, or abolishes a right in respect of the 
 12.26  redemption of the shares, including a provision respecting a 
 12.27  sinking fund for the redemption or repurchase of the shares; 
 12.28     (3) alters or abolishes a preemptive right of the holder of 
 12.29  the shares to acquire shares, securities other than shares, or 
 12.30  rights to purchase shares or securities other than shares; 
 12.31     (4) excludes or limits the right of a shareholder to vote 
 12.32  on a matter, or to cumulate votes, except as the right may be 
 12.33  excluded or limited through the authorization or issuance of 
 12.34  securities of an existing or new class or series with similar or 
 12.35  different voting rights; except that an amendment to the 
 12.36  articles of an issuing public corporation that provides that 
 13.1   section 302A.671 does not apply to a control share acquisition 
 13.2   does not give rise to the right to obtain payment under this 
 13.3   section; or 
 13.4      (5) eliminates the right to obtain payment under this 
 13.5   subdivision; 
 13.6      (b) a sale, lease, transfer, or other disposition of all or 
 13.7   substantially all of the property and assets of the corporation, 
 13.8   but not including a transaction permitted without shareholder 
 13.9   approval in that requires shareholder approval under section 
 13.10  302A.661, subdivision 1, or 2, but not including a disposition 
 13.11  in dissolution described in section 302A.725, subdivision 2, or 
 13.12  a disposition pursuant to an order of a court, or a disposition 
 13.13  for cash on terms requiring that all or substantially all of the 
 13.14  net proceeds of disposition be distributed to the shareholders 
 13.15  in accordance with their respective interests within one year 
 13.16  after the date of disposition; 
 13.17     (c) a plan of merger, whether under this chapter or under 
 13.18  chapter 322B, to which the corporation is a constituent 
 13.19  organization, except as provided in subdivision 3, and except 
 13.20  for a plan of merger adopted under section 302A.626; 
 13.21     (d) a plan of exchange, whether under this chapter or under 
 13.22  chapter 322B, to which the corporation is a party as the 
 13.23  corporation whose shares will be acquired by the acquiring 
 13.24  corporation, except as provided in subdivision 3; or 
 13.25     (e) a plan of conversion adopted by the corporation; or 
 13.26     (f) any other corporate action taken pursuant to a 
 13.27  shareholder vote with respect to which the articles, the bylaws, 
 13.28  or a resolution approved by the board directs that dissenting 
 13.29  shareholders may obtain payment for their shares. 
 13.30     Sec. 17.  Minnesota Statutes 2002, section 302A.471, 
 13.31  subdivision 3, is amended to read: 
 13.32     Subd. 3.  [RIGHTS NOT TO APPLY.] (a) Unless the articles, 
 13.33  the bylaws, or a resolution approved by the board otherwise 
 13.34  provide, the right to obtain payment under this section does not 
 13.35  apply to a shareholder of (1) the surviving corporation in a 
 13.36  merger with respect to shares of the shareholder that are not 
 14.1   entitled to be voted on the merger and are not canceled or 
 14.2   exchanged in the merger or (2) the corporation whose shares will 
 14.3   be acquired by the acquiring corporation in a plan of exchange 
 14.4   with respect to shares of the shareholder that are not entitled 
 14.5   to be voted on the plan of exchange and are not exchanged in the 
 14.6   plan of exchange. 
 14.7      (b) If a date is fixed according to section 302A.445, 
 14.8   subdivision 1, for the determination of shareholders entitled to 
 14.9   receive notice of and to vote on an action described in 
 14.10  subdivision 1, only shareholders as of the date fixed, and 
 14.11  beneficial owners as of the date fixed who hold through 
 14.12  shareholders, as provided in subdivision 2, may exercise 
 14.13  dissenters' rights. 
 14.14     (c) Notwithstanding subdivision 1, the right to obtain 
 14.15  payment under this section, other than in connection with a plan 
 14.16  of merger adopted under section 302A.621, is limited in 
 14.17  accordance with the following provisions: 
 14.18     (1) The right to obtain payment under this section is not 
 14.19  available for the holders of shares of any class or series of 
 14.20  shares that is listed on the New York Stock Exchange or the 
 14.21  American Stock Exchange or designated as a national market 
 14.22  system security on an interdealer quotation system by the 
 14.23  National Association of Securities Dealers, Inc. 
 14.24     (2) The applicability of clause (1) is determined as of: 
 14.25     (i) the record date fixed to determine the shareholders 
 14.26  entitled to receive notice of, and to vote at, the meeting of 
 14.27  shareholders to act upon the corporate action described in 
 14.28  subdivision 1; or 
 14.29     (ii) the day before the effective date of corporate action 
 14.30  described in subdivision 1 if there is no meeting of 
 14.31  shareholders. 
 14.32     (3) Clause (1) is not applicable, and the right to obtain 
 14.33  payment under this section is available pursuant to subdivision 
 14.34  1, for the holders of any class or series of shares who are 
 14.35  required by the terms of the corporate action described in 
 14.36  subdivision 1 to accept for such shares anything other than 
 15.1   shares, or cash in lieu of fractional shares, of any class or 
 15.2   any series of shares of the corporation, or any other 
 15.3   proprietary interest of any other entity, that satisfies the 
 15.4   standards set forth in clause (1) at the time the corporate 
 15.5   action becomes effective. 
 15.6      Sec. 18.  Minnesota Statutes 2002, section 302A.473, 
 15.7   subdivision 3, is amended to read: 
 15.8      Subd. 3.  [NOTICE OF DISSENT.] If the proposed action must 
 15.9   be approved by the shareholders and the corporation holds a 
 15.10  shareholder meeting, a shareholder who is entitled to dissent 
 15.11  under section 302A.471 and who wishes to exercise dissenters' 
 15.12  rights must file with the corporation before the vote on the 
 15.13  proposed action a written notice of intent to demand the fair 
 15.14  value of the shares owned by the shareholder and must not vote 
 15.15  the shares in favor of the proposed action.  
 15.16     Sec. 19.  Minnesota Statutes 2002, section 302A.473, 
 15.17  subdivision 4, is amended to read: 
 15.18     Subd. 4.  [NOTICE OF PROCEDURE; DEPOSIT OF SHARES.] (a) 
 15.19  After the proposed action has been approved by the board and, if 
 15.20  necessary, the shareholders, the corporation shall send to (i) 
 15.21  all shareholders who have complied with subdivision 3, (ii) all 
 15.22  shareholders who did not sign or consent to a written action 
 15.23  that gave effect to the action creating the right to obtain 
 15.24  payment under section 302A.471, and to (iii) all shareholders 
 15.25  entitled to dissent if no shareholder vote was required, a 
 15.26  notice that contains:  
 15.27     (1) the address to which a demand for payment and 
 15.28  certificates of certificated shares must be sent in order to 
 15.29  obtain payment and the date by which they must be received; 
 15.30     (2) any restrictions on transfer of uncertificated shares 
 15.31  that will apply after the demand for payment is received; 
 15.32     (3) a form to be used to certify the date on which the 
 15.33  shareholder, or the beneficial owner on whose behalf the 
 15.34  shareholder dissents, acquired the shares or an interest in them 
 15.35  and to demand payment; and 
 15.36     (4) a copy of section 302A.471 and this section and a brief 
 16.1   description of the procedures to be followed under these 
 16.2   sections.  
 16.3      (b) In order to receive the fair value of the shares, a 
 16.4   dissenting shareholder must demand payment and deposit 
 16.5   certificated shares or comply with any restrictions on transfer 
 16.6   of uncertificated shares within 30 days after the notice 
 16.7   required by paragraph (a) was given, but the dissenter retains 
 16.8   all other rights of a shareholder until the proposed action 
 16.9   takes effect.  
 16.10     Sec. 20.  Minnesota Statutes 2002, section 302A.521, 
 16.11  subdivision 1, is amended to read: 
 16.12     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 16.13  section, the terms defined in this subdivision have the meanings 
 16.14  given them.  
 16.15     (b) "Corporation" includes a domestic or foreign 
 16.16  corporation that was the predecessor of the corporation referred 
 16.17  to in this section in a merger or other transaction in which the 
 16.18  predecessor's existence ceased upon consummation of the 
 16.19  transaction.  
 16.20     (c) "Official capacity" means (1) with respect to a 
 16.21  director, the position of director in a corporation, (2) with 
 16.22  respect to a person other than a director, the elective or 
 16.23  appointive office or position held by an officer, member of a 
 16.24  committee of the board, or the employment relationship 
 16.25  undertaken by an employee of the corporation, and (3) with 
 16.26  respect to a director, officer, or employee of the corporation 
 16.27  who, while a director, officer, or employee of the corporation, 
 16.28  is or was serving at the request of the corporation or whose 
 16.29  duties in that position involve or involved service as a 
 16.30  director, officer, partner, trustee, governor, manager, 
 16.31  employee, or agent of another organization or employee benefit 
 16.32  plan, the position of that person as a director, officer, 
 16.33  partner, trustee, governor, manager, employee, or agent, as the 
 16.34  case may be, of the other organization or employee benefit plan. 
 16.35     (d) "Proceeding" means a threatened, pending, or completed 
 16.36  civil, criminal, administrative, arbitration, or investigative 
 17.1   proceeding, including a proceeding by or in the right of the 
 17.2   corporation.  
 17.3      (e) "Special legal counsel" means counsel who has not 
 17.4   represented the corporation or a related organization, or a 
 17.5   director, officer, member of a committee of the board, or 
 17.6   employee, whose indemnification is in issue.  
 17.7      Sec. 21.  Minnesota Statutes 2002, section 302A.651, 
 17.8   subdivision 1, is amended to read: 
 17.9      Subdivision 1.  [WHEN PERMITTED.] A domestic corporation 
 17.10  may merge with, including a merger pursuant to section 302A.621, 
 17.11  or participate in an exchange with a foreign corporation or 
 17.12  limited liability company by following the procedures set forth 
 17.13  in this section, if: 
 17.14     (1) with respect to a merger, the merger is permitted by 
 17.15  the laws of the jurisdiction under which the foreign corporation 
 17.16  or limited liability company is incorporated or organized; and 
 17.17     (2) with respect to an exchange, the corporation whose 
 17.18  shares will be acquired is a domestic corporation, whether or 
 17.19  not the exchange is permitted by the laws of the jurisdiction 
 17.20  under which the foreign corporation or limited liability company 
 17.21  is incorporated or organized. 
 17.22     Sec. 22.  Minnesota Statutes 2002, section 302A.661, 
 17.23  subdivision 2, is amended to read: 
 17.24     Subd. 2.  [SHAREHOLDER APPROVAL; WHEN REQUIRED.] (a) A 
 17.25  corporation, by affirmative vote of a majority of the directors 
 17.26  present, may sell, lease, transfer, or otherwise dispose of all 
 17.27  or substantially all of its property and assets, including its 
 17.28  good will, not in the usual and regular course of its business, 
 17.29  upon those terms and conditions and for those considerations, 
 17.30  which may be money, securities, or other instruments for the 
 17.31  payment of money or other property, as the board deems 
 17.32  expedient, when approved at a regular or special meeting of the 
 17.33  shareholders by the affirmative vote of the holders of a 
 17.34  majority of the voting power of the shares entitled to vote.  
 17.35  Written notice of the meeting shall be given to all shareholders 
 17.36  whether or not they are entitled to vote at the meeting.  The 
 18.1   written notice shall state that a purpose of the meeting is to 
 18.2   consider the sale, lease, transfer, or other disposition of all 
 18.3   or substantially all of the property and assets of the 
 18.4   corporation.  
 18.5      (b) Shareholder approval is not required under paragraph 
 18.6   (a) if, following the sale, lease, transfer, or other 
 18.7   disposition of its property and assets, the corporation retains 
 18.8   a significant continuing business activity.  If a corporation 
 18.9   retains a business activity that represented at least (1) 25 
 18.10  percent of the corporation's total assets at the end of the most 
 18.11  recently completed fiscal year and (2) 25 percent of either 
 18.12  income from continuing operations before taxes or revenues from 
 18.13  continuing operations for that fiscal year, measured on a 
 18.14  consolidated basis with its subsidiaries for each of clauses (1) 
 18.15  and (2), then the corporation will conclusively be deemed to 
 18.16  have retained a significant continuing business activity. 
 18.17     Sec. 23.  [302A.681] [CONVERSION OF CORPORATIONS AND 
 18.18  LIMITED LIABILITY COMPANIES.] 
 18.19     Subdivision 1.  [CONVERSIONS AUTHORIZED.] A corporation may 
 18.20  become a domestic limited liability company, and a domestic 
 18.21  limited liability company may become a corporation, in each case 
 18.22  pursuant to a plan of conversion. 
 18.23     Subd. 2.  [CERTAIN DEFINITIONS.] (a) For purposes of 
 18.24  sections 302A.681 to 302A.691, the words, terms, and phrases in 
 18.25  paragraphs (b) to (h) have the meanings given them. 
 18.26     (b) "Articles of organization" has the same meaning as it 
 18.27  does under section 322B.03, subdivision 6. 
 18.28     (c) "Board of governors" has the same meaning as it does 
 18.29  under section 322B.03, subdivision 7. 
 18.30     (d) "Class," when used with reference to membership 
 18.31  interests, has the same meaning as it does under section 
 18.32  322B.03, subdivision 10. 
 18.33     (e) "Governor" has the same meaning as it does under 
 18.34  section 322B.03, subdivision 24. 
 18.35     (f) "Member" has the same meaning as it does under section 
 18.36  322B.03, subdivision 30. 
 19.1      (g) "Membership interest" has the same meaning as it does 
 19.2   under section 322B.03, subdivision 31. 
 19.3      (h) "Series," when used with reference to membership 
 19.4   interests, has the same meaning as it does under section 
 19.5   322B.03, subdivision 44. 
 19.6      Sec. 24.  [302A.683] [PLAN OF CONVERSION.] 
 19.7      A plan of conversion must contain: 
 19.8      (1) the name of the converting organization; 
 19.9      (2) the name of the converted organization; 
 19.10     (3) whether the converted organization is a corporation or 
 19.11  a limited liability company; 
 19.12     (4) the terms and conditions of the proposed conversion; 
 19.13     (5) the manner and basis of converting each ownership 
 19.14  interest in the converting organization into ownership interests 
 19.15  in the converted organization or, in whole or in part, into 
 19.16  money or other property; 
 19.17     (6) a copy of the proposed articles of incorporation or 
 19.18  articles of organization of the converted organization; and 
 19.19     (7) any other provisions with respect to the proposed 
 19.20  conversion that are deemed necessary or desirable. 
 19.21     Sec. 25.  [302A.685] [PLAN APPROVAL.] 
 19.22     Subdivision 1.  [BOARD APPROVAL; NOTICE TO OWNERS.] A 
 19.23  resolution containing the plan of conversion must be approved by 
 19.24  the affirmative vote of a majority of the directors or governors 
 19.25  present at a meeting of the board of directors or the board of 
 19.26  governors of the converting organization and must then be 
 19.27  submitted at a regular or a special meeting to the owners of the 
 19.28  converting organization.  Written notice must be given to every 
 19.29  owner of the converting organization, whether or not entitled to 
 19.30  vote at the meeting, not less than 14 days nor more than 60 days 
 19.31  before the meeting, in the manner provided in section 302A.435 
 19.32  for notice of a meeting of shareholders or in the manner 
 19.33  provided in section 322B.34 for notice of a meeting of members.  
 19.34  The written notice must state that a purpose of the meeting is 
 19.35  to consider the proposed plan of conversion.  A copy or short 
 19.36  description of the plan of conversion must be included in or 
 20.1   enclosed with the notice. 
 20.2      Subd. 2.  [APPROVAL BY OWNERS.] At the meeting, a vote of 
 20.3   the owners must be taken on the proposed plan.  The plan of 
 20.4   conversion is adopted when approved by the affirmative vote of 
 20.5   the holders of a majority of the voting power of all shares or 
 20.6   membership interests entitled to vote.  A class or series of 
 20.7   shares or membership interests is entitled to vote as a class or 
 20.8   series on the approval of the plan. 
 20.9      Sec. 26.  [302A.687] [ARTICLES OF CONVERSION.] 
 20.10     Subdivision 1.  [CONTENTS OF ARTICLES.] Upon receiving the 
 20.11  approval required by section 302A.685, articles of conversion 
 20.12  must be prepared that contain: 
 20.13     (1) the plan of conversion; 
 20.14     (2) the name of the converting organization immediately 
 20.15  before the filing of the articles of conversion and the name to 
 20.16  which the name of the converting organization is to be changed, 
 20.17  which shall be a name that satisfies the laws applicable to the 
 20.18  converted organization; 
 20.19     (3) the type of organization that the converted 
 20.20  organization will be; 
 20.21     (4) a statement that the plan of conversion has been 
 20.22  approved by the converting organization under section 302A.685; 
 20.23  and 
 20.24     (5) a copy of the articles of incorporation or the articles 
 20.25  of organization of the converted organization. 
 20.26     Subd. 2.  [ARTICLES SIGNED, FILED.] The articles of 
 20.27  conversion must be signed on behalf of the converting 
 20.28  organization and filed with the secretary of state.  Filing of 
 20.29  the articles of conversion is also deemed to be a filing with 
 20.30  the secretary of state of the articles of incorporation or the 
 20.31  articles of organization of the converted organization. 
 20.32     Subd. 3.  [CERTIFICATE.] The secretary of state shall issue 
 20.33  a certificate of conversion and a certificate of incorporation 
 20.34  or a certificate of organization to the converted organization 
 20.35  or its legal representative. 
 20.36     Sec. 27.  [302A.689] [ABANDONMENT OF CONVERSION.] 
 21.1      Subdivision 1.  [BY SHAREHOLDERS OR PLAN.] After a plan of 
 21.2   conversion has been approved by the owners entitled to vote on 
 21.3   the approval of the plan as provided in section 302A.685, and 
 21.4   before the effective date of the plan, it may be abandoned: 
 21.5      (1) if the owners of the converting organization entitled 
 21.6   to vote on the approval of the plan as provided in section 
 21.7   302A.685 have approved the abandonment at a meeting by the 
 21.8   affirmative vote of the holders of a majority of the voting 
 21.9   power of the shares or membership interests entitled to vote; 
 21.10     (2) if the plan itself provides for abandonment and all 
 21.11  conditions for abandonment set forth in the plan are met; or 
 21.12     (3) pursuant to subdivision 2. 
 21.13     Subd. 2.  [BY BOARD.] A plan of conversion may be 
 21.14  abandoned, before the effective date of the plan, by a 
 21.15  resolution of the board of directors or the board of governors 
 21.16  of the converting organization abandoning the plan of conversion 
 21.17  approved by the affirmative vote of a majority of the directors 
 21.18  or governors present. 
 21.19     Subd. 3.  [FILING OF ARTICLES.] If articles of conversion 
 21.20  have been filed with the secretary of state, but have not yet 
 21.21  become effective, the converting organization shall file with 
 21.22  the secretary of state articles of abandonment that contain: 
 21.23     (1) the name of the converting organization; 
 21.24     (2) the provision of this section under which the plan is 
 21.25  abandoned; and 
 21.26     (3) if the plan is abandoned under subdivision 2, the text 
 21.27  of the resolution abandoning the plan. 
 21.28     Sec. 28.  [302A.691] [EFFECTIVE DATE OR TIME OF CONVERSION; 
 21.29  EFFECT.] 
 21.30     Subdivision 1.  [EFFECTIVE DATE OR TIME.] A conversion is 
 21.31  effective when the articles of conversion are filed with the 
 21.32  secretary of state or on a later date or at a later time 
 21.33  specified in the articles of conversion. 
 21.34     Subd. 2.  [EFFECT ON ORGANIZATION.] (a) A converted 
 21.35  organization is for all purposes the same organization as the 
 21.36  converting organization, having been incorporated or organized 
 22.1   on the date that the converting organization was originally 
 22.2   incorporated or organized. 
 22.3      (b) When a conversion becomes effective: 
 22.4      (1) if the converted organization is a corporation, the 
 22.5   converted organization has all the rights, privileges, 
 22.6   immunities, and powers, and is subject to all the duties and 
 22.7   liabilities, of a corporation incorporated under this chapter; 
 22.8      (2) if the converted organization is a limited liability 
 22.9   company, the converted organization has all the rights, 
 22.10  privileges, immunities, and powers, and is subject to all the 
 22.11  duties and liabilities, of a limited liability company organized 
 22.12  under chapter 322B; 
 22.13     (3) all property owned by the converting organization 
 22.14  remains vested in the converted organization; 
 22.15     (4) all debts, liabilities, and other obligations of the 
 22.16  converting organization continue as obligations of the converted 
 22.17  organization; 
 22.18     (5) an action or proceeding pending by or against the 
 22.19  converting organization may be continued as if the conversion 
 22.20  had not occurred; and 
 22.21     (6) all rights, privileges, immunities, and powers of the 
 22.22  converting organization remain vested in the converted 
 22.23  organization. 
 22.24     Subd. 3.  [EFFECT ON SHAREHOLDERS OR MEMBERS.] When a 
 22.25  conversion becomes effective, each share or membership interest 
 22.26  in the converting organization is deemed to be converted into 
 22.27  shares or membership interests in the converted organization or, 
 22.28  in whole or in part, into money or other property to be received 
 22.29  under the plan by the shareholders or the members, subject to 
 22.30  any dissenters' rights under section 302A.471, in the case of 
 22.31  shareholders of the converting organization, or section 
 22.32  322B.383, in the case of members of the converting organization. 
 22.33     Sec. 29.  Minnesota Statutes 2002, section 302A.723, 
 22.34  subdivision 1, is amended to read: 
 22.35     Subdivision 1.  [CONTENTS.] If dissolution of the 
 22.36  corporation is approved pursuant to section 302A.721, 
 23.1   subdivision 2, the corporation shall file with the secretary of 
 23.2   state a notice of intent to dissolve.  The notice shall contain: 
 23.3      (a) the name of the corporation; 
 23.4      (b) the date and place of the meeting at which the 
 23.5   resolution was approved pursuant to section 302A.721, 
 23.6   subdivision 2; and 
 23.7      (c) a statement that the requisite vote of the shareholders 
 23.8   was received, or that all the requisite shareholders entitled to 
 23.9   vote signed a written action. 
 23.10     Sec. 30.  Minnesota Statutes 2002, section 317A.011, is 
 23.11  amended by adding a subdivision to read: 
 23.12     Subd. 3b.  [BALLOT.] "Ballot" means a written ballot or a 
 23.13  ballot transmitted by electronic communication. 
 23.14     Sec. 31.  Minnesota Statutes 2002, section 317A.011, 
 23.15  subdivision 14, is amended to read: 
 23.16     Subd. 14.  [NOTICE.] (a) "Notice" is given by a member of a 
 23.17  corporation to the corporation or an officer of the corporation 
 23.18  when in writing and mailed or delivered to the corporation or 
 23.19  the officer at the registered office of the corporation. 
 23.20     (b) Notice is given by the corporation to a director, 
 23.21  officer, member, or other person: 
 23.22     (1) when mailed to the person at an address designated by 
 23.23  the person, at the last known address of the person or, in the 
 23.24  case of a director, officer, or member, at the address of the 
 23.25  person in the corporate records; 
 23.26     (2) when communicated to the person orally; 
 23.27     (3) when handed to the person; 
 23.28     (4) when left at the office of the person with a clerk or 
 23.29  other person in charge of the office, or if there is no one in 
 23.30  charge, when left in a conspicuous place in the office; 
 23.31     (5) if the person's office is closed or the person to be 
 23.32  notified has no office, when left at the dwelling or usual place 
 23.33  of abode of the person with a person of suitable age and 
 23.34  discretion residing in the house; or 
 23.35     (6) when provided to the person by means of electronic 
 23.36  communication as provided under section 317A.231 or 317A.450; or 
 24.1      (7) when the method is fair and reasonable when all the 
 24.2   circumstances are considered.  
 24.3      (c) Notice by mail is given when deposited in the United 
 24.4   States mail with sufficient postage.  Notice is considered 
 24.5   received when it is given. 
 24.6      Sec. 32.  Minnesota Statutes 2002, section 317A.231, 
 24.7   subdivision 4, is amended to read: 
 24.8      Subd. 4.  [CALLING MEETINGS; NOTICE.] (a) Unless the 
 24.9   articles or bylaws provide otherwise, a director may call a 
 24.10  board meeting by giving five days' notice to all directors of 
 24.11  the date, time, and place of the meeting.  The notice need not 
 24.12  state the purpose of the meeting unless the articles or bylaws 
 24.13  require it.  
 24.14     (b) If the day or date, time, and place of a board meeting 
 24.15  have been provided in the articles or bylaws, or announced at a 
 24.16  previous meeting of the board, notice is not required.  Notice 
 24.17  of an adjourned meeting need not be given other than by 
 24.18  announcement at the meeting at which adjournment is taken.  
 24.19     (c) Any notice to a director given under any provision of 
 24.20  this chapter, the articles, or the bylaws by a form of 
 24.21  electronic communication consented to by the director to whom 
 24.22  the notice is given is effective when given.  The notice is 
 24.23  deemed given if by: 
 24.24     (1) facsimile communication, when directed to a telephone 
 24.25  number at which the director has consented to receive notice; 
 24.26     (2) electronic mail, when directed to an electronic mail 
 24.27  address at which the director has consented to receive notice; 
 24.28     (3) a posting on an electronic network on which the 
 24.29  director has consented to receive notice, together with a 
 24.30  separate notice to the director of the specific posting, upon 
 24.31  the later of: 
 24.32     (i) the posting; or 
 24.33     (ii) the giving of the separate notice; and 
 24.34     (4) any other form of electronic communication by which the 
 24.35  director has consented to receive notice, when directed to the 
 24.36  director. 
 25.1   An affidavit of the secretary, other authorized officer, or 
 25.2   authorized agent of the corporation, that the notice has been 
 25.3   given by a form of electronic communication is, in the absence 
 25.4   of fraud, prima facie evidence of the facts stated in the 
 25.5   affidavit. 
 25.6      (d) Consent by a director to notice given by electronic 
 25.7   communication may be given in writing or by authenticated 
 25.8   electronic communication.  Any consent so given may be relied 
 25.9   upon until revoked by the director, provided that no revocation 
 25.10  affects the validity of any notice given before receipt of 
 25.11  revocation of the consent. 
 25.12     Sec. 33.  Minnesota Statutes 2002, section 317A.231, 
 25.13  subdivision 5, is amended to read: 
 25.14     Subd. 5.  [WAIVER OF NOTICE.] A director may waive notice 
 25.15  of a meeting of the board.  A waiver of notice by a director 
 25.16  entitled to notice is effective whether given before, at, or 
 25.17  after the meeting, and whether given in writing, orally, by 
 25.18  authenticated electronic communication, or by attendance.  
 25.19  Attendance by a director at a meeting is a waiver of notice of 
 25.20  that meeting, unless the director objects at the beginning of 
 25.21  the meeting to the transaction of business because the meeting 
 25.22  is not lawfully called or convened and does not participate in 
 25.23  the meeting.  
 25.24     Sec. 34.  Minnesota Statutes 2003 Supplement, section 
 25.25  317A.443, subdivision 2, is amended to read: 
 25.26     Subd. 2.  [METHODS.] Unless otherwise provided in the 
 25.27  articles or bylaws, members may take action at a meeting by 
 25.28  voice or ballot, by unanimous action without a meeting under 
 25.29  section 317A.445, by written ballot under section 317A.447, or 
 25.30  by electronic remote communication under section 317A.450. 
 25.31     Sec. 35.  Minnesota Statutes 2002, section 317A.447, is 
 25.32  amended to read: 
 25.33     317A.447 [ACTION BY WRITTEN BALLOT.] 
 25.34     (a) Except as provided in paragraph (e) and unless 
 25.35  prohibited or limited by the articles or bylaws, an action that 
 25.36  may be taken at a regular or special meeting of members may be 
 26.1   taken without a meeting if the corporation mails or otherwise 
 26.2   delivers a written ballot to every member entitled to vote on 
 26.3   the matter.  A corporation may deliver a ballot by electronic 
 26.4   communication only if the corporation complies with section 
 26.5   317A.450, subdivision 5, as if the ballot were a notice.  
 26.6   Consent by a member to receive notice by electronic 
 26.7   communication in a certain manner constitutes consent to receive 
 26.8   a ballot by electronic communication in the same manner. 
 26.9      (b) A written ballot must: 
 26.10     (1) set forth each proposed action; and 
 26.11     (2) provide an opportunity to vote for or against each 
 26.12  proposed action. 
 26.13     (c) Approval by written ballot under this section is valid 
 26.14  only if the number of votes cast by ballot equals or exceeds the 
 26.15  quorum required to be present at a meeting authorizing the 
 26.16  action, and the number of approvals equals or exceeds the number 
 26.17  of votes that would be required to approve the matter at a 
 26.18  meeting at which the total number of votes cast was the same as 
 26.19  the number of votes cast by ballot.  
 26.20     (d) Solicitations for votes by written ballot must: 
 26.21     (1) indicate the number of responses needed to meet the 
 26.22  quorum requirements; 
 26.23     (2) state the percentage of approvals necessary to approve 
 26.24  each matter other than election of directors; and 
 26.25     (3) specify the time by which a ballot must be received by 
 26.26  the corporation in order to be counted.  
 26.27     (e) Except as otherwise provided in the articles or bylaws, 
 26.28  a written ballot may not be revoked.  
 26.29     (f) A ballot delivered to the corporation by electronic 
 26.30  communication is valid only if authenticated as provided in 
 26.31  section 317A.011, subdivision 3a. 
 26.32     Sec. 36.  Minnesota Statutes 2002, section 322B.03, 
 26.33  subdivision 36a, is amended to read: 
 26.34     Subd. 36a.  [PARENT.] "Parent" of a specified limited 
 26.35  liability company means a limited liability company or a foreign 
 26.36  limited liability company that directly or indirectly through 
 27.1   related organizations owns more than 50 percent of the voting 
 27.2   power of the membership interests entitled to vote for governors 
 27.3   of the specified limited liability company. 
 27.4      Sec. 37.  Minnesota Statutes 2002, section 322B.03, 
 27.5   subdivision 45a, is amended to read: 
 27.6      Subd. 45a.  [SUBSIDIARY.] "Subsidiary" of a specified 
 27.7   limited liability company means a limited liability company or a 
 27.8   foreign limited liability company having more than 50 percent of 
 27.9   the voting power of its membership interests entitled to vote 
 27.10  for governors owned directly or indirectly through related 
 27.11  organizations by the specified limited liability company.  
 27.12     Sec. 38.  Minnesota Statutes 2002, section 322B.115, 
 27.13  subdivision 2, is amended to read: 
 27.14     Subd. 2.  [STATUTORY PROVISIONS THAT MAY BE MODIFIED ONLY 
 27.15  IN ARTICLES OF ORGANIZATION OR A MEMBER CONTROL AGREEMENT.] The 
 27.16  following provisions govern a limited liability company unless 
 27.17  modified in the articles of organization or a member control 
 27.18  agreement under section 322B.37: 
 27.19     (1) a limited liability company has general business 
 27.20  purposes (section 322B.10); 
 27.21     (2) a limited liability company has certain powers (section 
 27.22  322B.20); 
 27.23     (3) the power to adopt, amend, or repeal the bylaws is 
 27.24  vested in the board of governors (section 322B.603); 
 27.25     (4) a limited liability company must allow cumulative 
 27.26  voting for governors (section 322B.63, subdivision 2); 
 27.27     (5) the affirmative vote of a majority of governors present 
 27.28  is required for an action of the board of governors (section 
 27.29  322B.653); 
 27.30     (6) a written action by the board of governors taken 
 27.31  without a meeting must be signed by all governors (section 
 27.32  322B.656); 
 27.33     (7) the board may accept contributions, make contribution 
 27.34  agreements, and make contribution allowance agreements (sections 
 27.35  322B.40, subdivision 1; 322B.42; and 322B.43); 
 27.36     (8) all membership interests are ordinary membership 
 28.1   interests entitled to vote and are of one class with no series 
 28.2   (section 322B.40, subdivision 5, clauses (1) and (2)); 
 28.3      (9) all membership interests have equal rights and 
 28.4   preferences in all matters not otherwise provided for by the 
 28.5   board of governors (section 322B.40, subdivision 5, clause (2)); 
 28.6      (10) the value of previous contributions is to be restated 
 28.7   when a new contribution is accepted (section 322B.41); 
 28.8      (11) a member has certain preemptive rights, unless 
 28.9   otherwise provided by the board of governors (section 322B.33); 
 28.10     (12) the affirmative vote of the owners of a majority of 
 28.11  the voting power of the membership interests present and 
 28.12  entitled to vote at a duly held meeting is required for an 
 28.13  action of the members, except where this chapter requires the 
 28.14  affirmative vote of a plurality of the votes cast (section 
 28.15  322B.63, subdivision 1) or a majority of the voting power of all 
 28.16  membership interests entitled to vote (section 322B.35, 
 28.17  subdivision 1); 
 28.18     (13) the voting power of each membership interest is in 
 28.19  proportion to the value reflected in the required records of the 
 28.20  contributions of the members (section 322B.356); 
 28.21     (14) members share in distributions in proportion to the 
 28.22  value reflected in the required records of the contributions of 
 28.23  members (section 322B.50); 
 28.24     (15) members share profits and losses in proportion to the 
 28.25  value reflected in the required records of the contributions of 
 28.26  members (section 322B.326); 
 28.27     (16) a written action by the members taken without a 
 28.28  meeting must be signed by all members (section 322B.35); 
 28.29     (17) members have no right to receive distributions in kind 
 28.30  and the limited liability company has only limited rights to 
 28.31  make distributions in kind (section 322B.52); 
 28.32     (18) a member is not subject to expulsion (section 
 28.33  322B.306, subdivision 2); 
 28.34     (19) unanimous consent is required for the transfer of 
 28.35  governance rights to a person not already a member (section 
 28.36  322B.313, subdivision 2); 
 29.1      (20) for limited liability companies whose existence begins 
 29.2   before August 1, 1999, unanimous consent is required to avoid 
 29.3   dissolution (section 322B.80, subdivision 1, clause (5)(i)); 
 29.4      (21) the termination of a person's membership interest has 
 29.5   specified consequences (section 322B.306); and 
 29.6      (22) restrictions apply to the assignment of governance 
 29.7   rights (section 322B.313). 
 29.8      Sec. 39.  Minnesota Statutes 2002, section 322B.155, is 
 29.9   amended to read: 
 29.10     322B.155 [CLASS OR SERIES VOTING ON AMENDMENTS.] 
 29.11     The owners of the outstanding membership interests of a 
 29.12  class or series are entitled to vote as a class or series upon a 
 29.13  proposed amendment to the articles of organization, whether or 
 29.14  not entitled to vote on the amendment by the provisions of the 
 29.15  articles of organization, if the amendment would: 
 29.16     (1) effect an exchange, reclassification, or cancellation 
 29.17  of all or part of the membership interests of the class or 
 29.18  series, or effect a combination of outstanding membership 
 29.19  interests of a class or series into a lesser number of 
 29.20  membership interests of the class or series where each other 
 29.21  class or series is not subject to a similar combination; 
 29.22     (2) effect an exchange, or create a right of exchange, of 
 29.23  all or any part of the membership interests of another class or 
 29.24  series for the membership interests of the class or series; 
 29.25     (3) change the rights or preferences of the membership 
 29.26  interests of the class or series; 
 29.27     (4) change the membership interests of the class or series 
 29.28  into the same or a different number of membership interests of 
 29.29  another class or series; 
 29.30     (5) create a new class or series of membership interests 
 29.31  having rights and preferences prior and superior to the 
 29.32  membership interests of that class or series, or increase the 
 29.33  rights and preferences or the number of membership interests, of 
 29.34  a class or series having rights and preferences prior or 
 29.35  superior to the membership interests of that class or series; 
 29.36     (6) (5) divide the membership interests of the class into 
 30.1   series and determine the designation of each series and the 
 30.2   variations in the relative rights and preferences between the 
 30.3   membership interests of each series or authorize the board of 
 30.4   governors to do so; 
 30.5      (7) (6) limit or deny any existing preemptive rights of the 
 30.6   membership interests of the class or series; or 
 30.7      (8) (7) cancel or otherwise affect distributions on the 
 30.8   membership interests of the class or series. 
 30.9      Sec. 40.  Minnesota Statutes 2002, section 322B.346, 
 30.10  subdivision 1, is amended to read: 
 30.11     Subdivision 1.  [MAJORITY REQUIRED.] Except for the 
 30.12  election of governors, which is governed by section 322B.63, the 
 30.13  members shall take action by the affirmative vote of the owners 
 30.14  of the greater of:  (1) a majority of the voting power of the 
 30.15  membership interests present and entitled to vote on that item 
 30.16  of business; or (2) a majority of the voting power that would 
 30.17  constitute a quorum for the transaction of business at the 
 30.18  meeting, except where this chapter, the articles of 
 30.19  organization, or a member control agreement, require a larger 
 30.20  proportion.  If the articles or a member control agreement 
 30.21  require a larger proportion than is required by this chapter for 
 30.22  a particular action, the articles or the member control 
 30.23  agreement control.  
 30.24     Sec. 41.  Minnesota Statutes 2002, section 322B.383, 
 30.25  subdivision 1, is amended to read: 
 30.26     Subdivision 1.  [ACTIONS CREATING DISSENTERS' RIGHTS.] 
 30.27  Subject to a member control agreement under section 322B.37, a 
 30.28  member of a limited liability company may dissent from, and 
 30.29  obtain payment for the fair value of the member's membership 
 30.30  interests in the event of, any of the following limited 
 30.31  liability company actions:  
 30.32     (1) unless otherwise provided in the articles, an amendment 
 30.33  of the articles of organization, but not an amendment to a 
 30.34  member control agreement, which materially and adversely affects 
 30.35  the rights or preferences of the membership interests of the 
 30.36  dissenting member in that it:  
 31.1      (i) alters or abolishes a preferential right of the 
 31.2   membership interests; 
 31.3      (ii) creates, alters, or abolishes a right in respect of 
 31.4   the redemption of the membership interests, including a 
 31.5   provision respecting a sinking fund for the redemption or 
 31.6   repurchase of the membership interests; 
 31.7      (iii) alters or abolishes a preemptive right of the owner 
 31.8   of the membership interests to make a contribution; 
 31.9      (iv) excludes or limits the right of a member to vote on a 
 31.10  matter, or to cumulate votes, except as the right may be 
 31.11  excluded or limited through the acceptance of contributions or 
 31.12  the making of contribution agreements pertaining to membership 
 31.13  interests with similar or different voting rights; 
 31.14     (v) changes a member's right to resign or retire; 
 31.15     (vi) establishes or changes the conditions for or 
 31.16  consequences of expulsion; or 
 31.17     (vii) eliminates the right to obtain payment under clause 
 31.18  (1); 
 31.19     (2) a sale, lease, transfer, or other disposition of all or 
 31.20  substantially all of the property and assets of the limited 
 31.21  liability company, but not including a transaction permitted 
 31.22  without that requires member approval in under section 322B.77, 
 31.23  subdivision 1 2, or but not including a disposition in 
 31.24  dissolution described in section 322B.813, subdivision 4, or a 
 31.25  disposition pursuant to an order of a court, or a disposition 
 31.26  for cash on terms requiring that all or substantially all of the 
 31.27  net proceeds of disposition be distributed to the members in 
 31.28  accordance with their respective membership interests within one 
 31.29  year after the date of disposition; 
 31.30     (3) a plan of merger to which the limited liability company 
 31.31  is a constituent organization; 
 31.32     (4) a plan of exchange to which the limited liability 
 31.33  company is a party as the organization whose ownership interests 
 31.34  will be acquired by the acquiring organization, if the 
 31.35  membership interests being acquired are entitled to be voted on 
 31.36  the plan; or 
 32.1      (5) a plan of conversion under section 302A.683; or 
 32.2      (6) any other limited liability company action taken 
 32.3   pursuant to a member vote with respect to which the articles of 
 32.4   organization, a member control agreement, the bylaws, or a 
 32.5   resolution approved by the board of governors directs that 
 32.6   dissenting members may obtain payment for their membership 
 32.7   interests. 
 32.8      Sec. 42.  Minnesota Statutes 2002, section 322B.386, 
 32.9   subdivision 3, is amended to read: 
 32.10     Subd. 3.  [NOTICE OF DISSENT.] If the proposed action must 
 32.11  be approved by the members and the limited liability company 
 32.12  holds a meeting of members, a member who is entitled to dissent 
 32.13  under section 322B.383 and who wishes to exercise dissenters' 
 32.14  rights must file with the limited liability company before the 
 32.15  vote on the proposed action a written notice of intent to demand 
 32.16  the fair value of the membership interests owned by the member 
 32.17  and must not vote the membership interests in favor of the 
 32.18  proposed action. 
 32.19     Sec. 43.  Minnesota Statutes 2002, section 322B.386, 
 32.20  subdivision 4, is amended to read: 
 32.21     Subd. 4.  [NOTICE OF PROCEDURE.] (a) After the proposed 
 32.22  action has been approved by the board of governors and, if 
 32.23  necessary, the members, the limited liability company shall send 
 32.24  to (i) all members who have complied with subdivision 3, (ii) 
 32.25  all members who did not sign or consent to a written action that 
 32.26  gave effect to the action creating the right to obtain payment 
 32.27  under section 322B.383, and to (iii) all members entitled to 
 32.28  dissent if no member vote was required, a notice that contains: 
 32.29     (1) the address to which a demand for payment must be sent 
 32.30  in order to obtain payment and the date by which the demand must 
 32.31  be received; 
 32.32     (2) a form to be used to certify the date on which the 
 32.33  member acquired the membership interests and to demand payment; 
 32.34  and 
 32.35     (3) a copy of section 322B.383 and this section and a brief 
 32.36  description of the procedures to be followed under these 
 33.1   sections.  
 33.2      (b) In order to receive the fair value of the membership 
 33.3   interests, a dissenting member must demand payment within 30 
 33.4   days after the notice required by paragraph (a) was given, but 
 33.5   the dissenter retains all other rights of a member until the 
 33.6   proposed action takes effect. 
 33.7      Sec. 44.  Minnesota Statutes 2002, section 322B.40, 
 33.8   subdivision 6, is amended to read: 
 33.9      Subd. 6.  [PROCEDURE FOR FIXING TERMS.] (a) Subject to any 
 33.10  restrictions in the articles of organization or a member control 
 33.11  agreement, the power granted in subdivision 5 may be exercised 
 33.12  by a resolution or resolutions establishing a class or series, 
 33.13  setting forth the designation of the class or series, and fixing 
 33.14  the relative rights and preferences of the class or series.  Any 
 33.15  of the rights and preferences of a class or series established 
 33.16  in the articles of organization, in a member control agreement, 
 33.17  or by resolution of the board of governors:  
 33.18     (1) may be made dependent upon facts ascertainable outside 
 33.19  the articles of organization, or outside the resolution or 
 33.20  resolutions establishing the class or series, if the manner in 
 33.21  which the facts operate upon the rights and preferences of the 
 33.22  class or series is clearly and expressly set forth in the 
 33.23  articles of organization or in the resolution or resolutions 
 33.24  establishing the class or series; and 
 33.25     (2) may incorporate by reference some or all of the terms 
 33.26  of any agreements, contracts, or other arrangements entered into 
 33.27  by the limited liability company in connection with the 
 33.28  establishment of the class or series if the limited liability 
 33.29  company retains at its principal executive office a copy of the 
 33.30  agreements, contracts, or other arrangements or the portions 
 33.31  incorporated by reference.  
 33.32     (b) A statement setting forth the name of the limited 
 33.33  liability company and the text of the resolution and certifying 
 33.34  the adoption of the resolution and the date of adoption must be 
 33.35  filed with the secretary of state before the acceptance of any 
 33.36  contributions for which the resolution creates rights or 
 34.1   preferences not set forth in the articles of organization or a 
 34.2   member control agreement.  However, where the members have 
 34.3   received notice of the creation of membership interests with 
 34.4   rights or preferences not set forth in the articles of 
 34.5   organization or a member control agreement before the acceptance 
 34.6   of the contributions with respect to the membership interests, 
 34.7   the statement may be filed any time within one year after the 
 34.8   acceptance of contributions.  The resolution is effective when 
 34.9   the statement has been filed with the secretary of state; or, if 
 34.10  it is not required to be filed with the secretary of state 
 34.11  before the acceptance of contributions, on the date of its 
 34.12  adoption by the governors.  
 34.13     (c) Filing a statement filed with the secretary of state in 
 34.14  accordance with paragraph (b) is not considered an amendment of 
 34.15  the articles of organization for purposes of sections 322B.15, 
 34.16  322B.155, and 322B.383.  Filing an amendment of such a statement 
 34.17  with the secretary of state is considered an amendment of the 
 34.18  articles for purposes of sections 322B.15, 322B.155, and 
 34.19  322B.383.  
 34.20     Sec. 45.  Minnesota Statutes 2002, section 322B.63, is 
 34.21  amended to read: 
 34.22     322B.63 [CUMULATIVE VOTING FOR GOVERNORS; CUMULATIVE 
 34.23  VOTING.] 
 34.24     Subdivision 1.  [REQUIRED VOTE.] Unless otherwise provided 
 34.25  in the articles, governors are elected by a plurality of the 
 34.26  voting power of the membership interests present and entitled to 
 34.27  vote on the election of governors at a meeting at which a quorum 
 34.28  is present. 
 34.29     Subd. 2.  [CUMULATIVE VOTING RIGHTS.] Unless the articles 
 34.30  of organization or a member control agreement provide that there 
 34.31  is no cumulative voting, and except as provided in section 
 34.32  322B.636, subdivision 5, each member entitled to vote for 
 34.33  governors has the right to cumulate voting power in the election 
 34.34  of governors by giving written notice of intent to cumulate 
 34.35  voting power to any manager of the limited liability company 
 34.36  before the meeting, or to the presiding manager at the meeting 
 35.1   at which the election is to occur at any time before the 
 35.2   election of governors at the meeting, in which case: 
 35.3      (1) the presiding manager at the meeting shall announce, 
 35.4   before the election of governors, that members shall cumulate 
 35.5   their voting power; and 
 35.6      (2) each member shall cumulate that voting power either by 
 35.7   casting for one candidate the amount of voting power equal to 
 35.8   the number of governors to be elected multiplied by the voting 
 35.9   power represented by the membership interests owned by that 
 35.10  member, or by distributing all of that voting power on the same 
 35.11  principle among any number of candidates.  
 35.12     Subd. 2 3.  [MODIFICATIONS OF CUMULATIVE VOTING.] No 
 35.13  amendment to the articles or bylaws that has the effect of 
 35.14  denying, limiting, or modifying the right to cumulative voting 
 35.15  for members provided in this section may be adopted if the votes 
 35.16  of a proportion of the voting power sufficient to elect a 
 35.17  governor at an election of the entire board of governors under 
 35.18  cumulative voting are cast against the amendment. 
 35.19     Sec. 46.  Minnesota Statutes 2002, section 322B.643, 
 35.20  subdivision 4, is amended to read: 
 35.21     Subd. 4.  [CALLING MEETINGS AND NOTICE.] (a) Unless the 
 35.22  articles of organization, a member control agreement, or bylaws 
 35.23  provide for a different time period, a governor may call a board 
 35.24  meeting by giving at least ten days' notice or, in the case of 
 35.25  organizational meetings under section 322B.60, subdivision 2, at 
 35.26  least three days' notice to all governors of the date, time, and 
 35.27  place of the meeting.  The notice need not state the purpose of 
 35.28  the meeting unless the articles, a member control agreement, or 
 35.29  bylaws require it.  
 35.30     (b) Any notice to a governor given under any provision of 
 35.31  this chapter, the articles, a member control agreement, or the 
 35.32  bylaws by a form of electronic communication consented to by the 
 35.33  governor to whom the notice is given is effective when given.  
 35.34  The notice is deemed given if by: 
 35.35     (1) facsimile communication, when directed to a telephone 
 35.36  number at which the governor has consented to receive notice; 
 36.1      (2) electronic mail, when directed to an electronic mail 
 36.2   address at which the governor has consented to receive notice; 
 36.3   and 
 36.4      (3) any other form of electronic communication by which the 
 36.5   governor has consented to receive notice, when directed to the 
 36.6   governor. 
 36.7      (c) Consent by a governor to notice given by electronic 
 36.8   communication may be given in writing or by authenticated 
 36.9   electronic communication.  Any consent so given may be relied 
 36.10  upon until revoked by the governor, provided that no revocation 
 36.11  affects the validity of any notice given before receipt of 
 36.12  revocation of the consent. 
 36.13     Sec. 47.  Minnesota Statutes 2002, section 322B.643, 
 36.14  subdivision 6, is amended to read: 
 36.15     Subd. 6.  [WAIVER OF NOTICE.] A governor may waive notice 
 36.16  of a meeting of the board of governors.  A waiver of notice by a 
 36.17  governor entitled to notice is effective whether given before, 
 36.18  at, or after the meeting, and whether given in writing, 
 36.19  orally, by authenticated electronic communication, or by 
 36.20  attendance.  Attendance by a governor at a meeting is a waiver 
 36.21  of notice of that meeting, except where the governor objects at 
 36.22  the beginning of the meeting to the transaction of business 
 36.23  because the meeting is not lawfully called or convened and does 
 36.24  not participate in the meeting after the objection.  
 36.25     Sec. 48.  Minnesota Statutes 2002, section 322B.77, 
 36.26  subdivision 2, is amended to read: 
 36.27     Subd. 2.  [MEMBER APPROVAL AND WHEN REQUIRED.] (a) A 
 36.28  limited liability company, by affirmative vote of a majority of 
 36.29  the governors present, may sell, lease, transfer, or otherwise 
 36.30  dispose of all or substantially all of its property and assets, 
 36.31  including its good will, not in the usual and regular course of 
 36.32  its business, upon those terms and conditions and for those 
 36.33  considerations, which may be money, securities, or other 
 36.34  instruments for the payment of money or other property, as the 
 36.35  board of governors considers expedient, when approved at a 
 36.36  regular or special meeting of the members by the affirmative 
 37.1   vote of the owners of a majority of the voting power of the 
 37.2   interests entitled to vote.  Written notice of the meeting must 
 37.3   be given to all members whether or not they are entitled to vote 
 37.4   at the meeting.  The written notice must state that a purpose of 
 37.5   the meeting is to consider the sale, lease, transfer, or other 
 37.6   disposition of all or substantially all of the property and 
 37.7   assets of the limited liability company.  
 37.8      (b) Member approval is not required under paragraph (a) if, 
 37.9   following the sale, lease, transfer, or other disposition of its 
 37.10  property and assets, the limited liability company retains a 
 37.11  significant continuing business activity.  If a limited 
 37.12  liability company retains a business activity that represented 
 37.13  at least (i) 25 percent of the limited liability company's total 
 37.14  assets at the end of the most recently completed fiscal year and 
 37.15  (ii) 25 percent of either income from continuing operations 
 37.16  before taxes or revenues from continuing operations for that 
 37.17  fiscal year, measured on a consolidated basis with its 
 37.18  subsidiaries for each of clauses (i) and (ii), then the limited 
 37.19  liability company will conclusively be deemed to have retained a 
 37.20  significant continuing business activity. 
 37.21     Sec. 49.  [322B.78] [CONVERSION.] 
 37.22     A domestic limited liability company may convert to a 
 37.23  domestic corporation pursuant to sections 302A.681 to 302A.691.