Minnesota Session Laws - 1993, Regular Session

  
    Laws of Minnesota 1993 

                         CHAPTER 17-H.F.No. 341 
           An act relating to business corporations; making 
          various technical changes; amending Minnesota Statutes 
          1992, sections 302A.011, subdivisions 26, 38, 53, and 
          by adding a subdivision; 302A.105; 302A.111, 
          subdivisions 3 and 4; 302A.115, subdivision 1; 
          302A.117, subdivision 1; 302A.123, subdivision 3; 
          302A.133; 302A.135, subdivisions 1 and 3; 302A.137; 
          302A.153; 302A.171, subdivision 2; 302A.231, 
          subdivision 3; 302A.233; 302A.237; 302A.241, 
          subdivision 1; 302A.255, subdivision 2; 302A.401, 
          subdivisions 1 and 3; 302A.402, subdivisions 1, 2, and 
          by adding a subdivision; 302A.403, subdivisions 2 and 
          4; 302A.413, subdivisions 4 and 9; 302A.423, 
          subdivision 2; 302A.435, subdivisions 1 and 3; 
          302A.437, subdivision 2; 302A.447, subdivisions 2 and 
          3; 302A.449, subdivision 1; 302A.461, subdivision 4; 
          302A.463; 302A.471, subdivision 3; 302A.473, 
          subdivisions 4 and 7; 302A.501, subdivision 1; 
          302A.521, subdivision 6; 302A.551, subdivision 1; 
          302A.553, subdivision 1; 302A.559, subdivision 1; 
          302A.613, subdivisions 2 and 3; 302A.621, subdivision 
          6; 302A.641, subdivision 1; 302A.671, subdivision 3; 
          302A.673, subdivisions 1 and 3; 302A.711, subdivisions 
          1 and 2; and 302A.901, by adding a subdivision. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 302A.011, 
subdivision 26, is amended to read: 
    Subd. 26.  [SECURITY.] "Security" has the meaning given it 
in section 80A.14, paragraph (q) subdivision 18.  
    Sec. 2.  Minnesota Statutes 1992, section 302A.011, 
subdivision 38, is amended to read: 
    Subd. 38.  [CONTROL SHARE ACQUISITION.] "Control share 
acquisition" means an acquisition, directly or indirectly, by an 
acquiring person of beneficial ownership of shares of an issuing 
public corporation that, except for section 302A.671, would, 
when added to all other shares of the issuing public corporation 
beneficially owned by the acquiring person, entitle the 
acquiring person, immediately after the acquisition, to exercise 
or direct the exercise of a new range of voting power within any 
of the ranges specified in section 302A.671, subdivision 2, 
paragraph (d), but does not include any of the following:  
     (a) an acquisition before, or pursuant to an agreement 
entered into before, August 1, 1984; 
     (b) an acquisition by a donee pursuant to an inter vivos 
gift not made to avoid section 302A.671 or by a distributee as 
defined in section 524.1-201, clause (10); 
     (c) an acquisition pursuant to a security agreement not 
created to avoid section 302A.671; 
     (d) an acquisition under sections 302A.601 to 302A.661, if 
the issuing public corporation is a party to the transaction; 
    (e) an acquisition from the issuing public corporation; 
    (f) an acquisition for the benefit of others by a person 
acting in good faith and not made to avoid section 302A.671, to 
the extent that the person may not exercise or direct the 
exercise of the voting power or disposition of the shares except 
upon the instruction of others; 
    (g) an acquisition pursuant to a savings, employee stock 
ownership, or other employee benefit plan of the issuing public 
corporation or any of its subsidiaries, or by a fiduciary of the 
plan acting in a fiduciary capacity pursuant to the plan; or 
    (h) an acquisition subsequent to January 1, 1991, pursuant 
to an offer to purchase for cash pursuant to a tender offer all 
shares of the voting stock of the issuing public corporation: 
    (i) which has been approved by a majority vote of the 
members of a committee comprised of the disinterested members of 
the board of the issuing public corporation formed pursuant to 
section 302A.673, subdivision 1, paragraph (d), before the 
commencement of, or the public announcement of the intent to 
commence, the tender offer; and 
    (ii) pursuant to which the acquiring person will become the 
owner of over 50 percent of the voting stock of the issuing 
public corporation outstanding at the time of the transaction. 
    For purposes of this subdivision, shares beneficially owned 
by a plan described in clause (g), or by a fiduciary of a plan 
described in clause (g) pursuant to the plan, are not deemed to 
be beneficially owned by a person who is a fiduciary of the 
plan.  All shares the beneficial ownership of which is acquired 
within a 120-day period, and all shares the beneficial ownership 
of which is acquired pursuant to a plan to make a control share 
acquisition, shall be deemed to have been acquired in the same 
acquisition.  
    Sec. 3.  Minnesota Statutes 1992, section 302A.011, 
subdivision 53, is amended to read: 
    Subd. 53.  [TAKEOVER OFFER.] (a) "Takeover offer" means an 
offer to acquire shares of an issuing public corporation from a 
shareholder pursuant to a tender offer or request or invitation 
for tenders, if, after the acquisition of all shares acquired 
pursuant to the offer: 
    (1) the offeror would be directly or indirectly a 
beneficial owner of more than ten percent of any class of the 
outstanding shares of the issuing public corporation and was 
directly or indirectly the beneficial owner of less than ten 
percent or less of any that class of the outstanding shares of 
the issuing public corporation before commencement of the offer; 
or 
    (2) the beneficial ownership by the offeror of any class of 
the outstanding shares of the issuing public corporation would 
be increased by more than ten percent of that class and the 
offeror was directly or indirectly the beneficial owner of ten 
percent or more of any class of the outstanding shares of the 
issuing public corporation before commencement of the offer.  
    (b) Takeover offer does not include: 
    (1) an offer in connection with the acquisition of a share 
which, together with all other acquisitions by the offeror of 
shares of the same class of shares of the issuer, would not 
result in the offeror having acquired more than two percent of 
this class during the preceding 12-month period; 
    (2) an offer by the issuer to acquire its own shares unless 
the offer is made during the pendency of a takeover offer by a 
person who is not an associate or affiliate of the issuer; 
     (3) an offer in which the issuing public corporation is an 
insurance company subject to regulation by the commissioner of 
commerce, a financial institution regulated by the commissioner, 
or a public service utility subject to regulation by the public 
utilities commission. 
    Sec. 4.  Minnesota Statutes 1992, section 302A.011, is 
amended by adding a subdivision to read: 
    Subd. 54.  [DIVISION OR COMBINATION.] "Division" or 
"combination" means dividing or combining shares of a class or 
series, whether issued or unissued, into a greater or lesser 
number of shares of the same class or series. 
    Sec. 5.  Minnesota Statutes 1992, section 302A.105, is 
amended to read: 
    302A.105 [INCORPORATORS.] 
    One or more natural persons of full at least 18 years of 
age may act as incorporators of a corporation by filing with the 
secretary of state articles of incorporation for the corporation.
    Sec. 6.  Minnesota Statutes 1992, section 302A.111, 
subdivision 3, is amended to read: 
    Subd. 3.  [STATUTORY PROVISIONS THAT MAY BE MODIFIED EITHER 
IN ARTICLES OR IN BYLAWS.] The following provisions govern a 
corporation unless modified either in the articles or in the 
bylaws:  
    (a) Directors serve for an indefinite term that expires at 
the next regular meeting of shareholders (section 302A.207); 
    (b) The compensation of directors is fixed by the board 
(section 302A.211); 
    (c) A certain method must be used for removal of directors 
(section 302A.223); 
    (d) A certain method must be used for filling board 
vacancies (section 302A.225); 
    (e) If the board fails to select a place for a board 
meeting, it must be held at the principal executive office 
(section 302A.231, subdivision 1); 
    (f) A director may call a board meeting, and The notice of 
the a board meeting need not state the purpose of the meeting 
(section 302A.231, subdivision 3); 
    (g) A majority of the board is a quorum for a board meeting 
(section 302A.235); 
    (h) 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 (section 302A.241, subdivision 
2); 
    (i) The board may establish a special litigation committee 
(section 302A.241); 
     (j) The chief executive officer and chief financial officer 
have specified duties, until the board determines otherwise 
(section 302A.305); 
     (k) Officers may delegate some or all of their duties and 
powers, if not prohibited by the board from doing so (section 
302A.351); 
     (l) The board may establish uncertificated shares (section 
302A.417, subdivision 7); 
     (m) Regular meetings of shareholders need not be held, 
unless demanded by a shareholder under certain conditions 
(section 302A.431); 
     (n) In all instances where a specific minimum notice period 
has not otherwise been fixed by law, not less than ten-days 
notice is required for a meeting of shareholders (section 
302A.435, subdivision 2); 
     (o) The number of shares required for a quorum at a 
shareholders' meeting is a majority of the voting power of the 
shares entitled to vote at the meeting (section 302A.443); 
     (p) The board may fix a date up to 60 days before the date 
of a shareholders' meeting as the date for the determination of 
the holders of shares entitled to notice of and entitled to vote 
at the meeting (section 302A.445, subdivision 1); 
     (q) Indemnification of certain persons is required (section 
302A.521); and 
      (r) The board may authorize, and the corporation may make, 
distributions not prohibited, limited, or restricted by an 
agreement (section 302A.551, subdivision 1).  
    Sec. 7.  Minnesota Statutes 1992, section 302A.111, 
subdivision 4, is amended to read: 
    Subd. 4.  [OPTIONAL PROVISIONS; SPECIFIC SUBJECTS.] The 
following provisions relating to the management of the business 
or the regulation of the affairs of a corporation may be 
included either in the articles or, except for naming members of 
the first board, fixing a greater than majority director or 
shareholder vote, or giving or prescribing the manner of giving 
voting rights to persons other than shareholders otherwise than 
pursuant to the articles, or eliminating or limiting a 
director's personal liability, in the bylaws: 
     (a) The members of the first board may be named in the 
articles (section 302A.201, subdivision 1); 
     (b) A manner for increasing or decreasing the number of 
directors may be provided (section 302A.203); 
     (c) Additional qualifications for directors may be imposed 
(section 302A.205); 
     (d) Directors may be classified (section 302A.213); 
     (e) The day or date, time, and place of board meetings may 
be fixed (section 302A.231, subdivision 1); 
     (f) Absent directors may be permitted to give written 
consent or opposition to a proposal (section 302A.233); 
     (g) A larger than majority vote may be required for board 
action (section 302A.237); 
     (h) Authority to sign and deliver certain documents may be 
delegated to an officer or agent of the corporation other than 
the chief executive officer (section 302A.305, subdivision 2); 
    (i) Additional officers may be designated (section 
302A.311); 
    (j) Additional powers, rights, duties, and responsibilities 
may be given to officers (section 302A.315 302A.311); 
    (k) A method for filling vacant offices may be specified 
(section 302A.341, subdivision 3); 
    (l) A certain officer or agent may be authorized to sign 
share certificates (section 302A.417, subdivision 2); 
    (m) The transfer or registration of transfer of securities 
may be restricted (section 302A.429); 
    (n) The day or date, time, and place of regular shareholder 
meetings may be fixed (section 302A.431, subdivision 3); 
    (o) Certain persons may be authorized to call special 
meetings of shareholders (section 302A.433, subdivision 1); 
    (p) Notices of shareholder meetings may be required to 
contain certain information (section 302A.435, subdivision 3); 
    (q) A larger than majority vote may be required for 
shareholder action (section 302A.437); 
    (r) Voting rights may be granted in or pursuant to the 
articles to persons who are not shareholders (section 302A.445, 
subdivision 4); 
    (s) Corporate actions giving rise to dissenter rights may 
be designated (section 302A.471, subdivision 1, clause (e)); 
    (t) The rights and priorities of persons to receive 
distributions may be established (section 302A.551); and 
     (u) A director's personal liability to the corporation or 
its shareholders for monetary damages for breach of fiduciary 
duty as a director may be eliminated or limited in the articles 
(section 302A.251, subdivision 4). 
    Sec. 8.  Minnesota Statutes 1992, section 302A.115, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REQUIREMENTS; PROHIBITIONS.] The corporate 
name:  
    (a) Shall be in the English language or in any other 
language expressed in English letters or characters; 
    (b) Shall contain the word "corporation," "incorporated," 
or "limited," or shall contain an abbreviation of one or more of 
these words, or the word "company" or the abbreviation "Co." if 
that word or abbreviation is not immediately preceded by the 
word "and" or the character "&"; 
    (c) Shall not contain a word or phrase that indicates or 
implies that it is incorporated for a purpose other than a legal 
business purpose; 
    (d) Shall be distinguishable upon the records in the office 
of the secretary of state from the name of a each domestic 
corporation or, limited partnership, and limited liability 
company, whether profit or nonprofit, or a limited liability 
company, whether domestic or foreign, or a and each foreign 
corporation or, limited partnership, and limited liability 
company authorized or registered to do business in this state, 
whether profit or nonprofit, or a and each name the right to 
which is, at the time of incorporation, reserved or as provided 
for in sections 302A.117, 322A.03, 322B.125, or 333.001 to 
333.54, unless there is filed with the articles one of the 
following:  
    (1) The written consent of the domestic corporation or, 
limited partnership, or limited liability company, or the 
foreign corporation or, limited partnership, or limited 
liability company authorized or registered to do business in 
this state or the holder of a reserved name or a name filed by 
or registered with the secretary of state under sections 333.001 
to 333.54 having a name that is not distinguishable; 
    (2) A certified copy of a final decree of a court in this 
state establishing the prior right of the applicant to the use 
of the name in this state; or 
    (3) The applicant's affidavit that the corporation or, 
limited partnership, or limited liability company with the name 
that is not distinguishable has been incorporated or on file in 
this state for at least three years prior to the affidavit, if 
it is a domestic corporation or, limited partnership, or limited 
liability company, or has been authorized or registered to do 
business in this state for at least three years prior to the 
affidavit, if it is a foreign corporation or, limited 
partnership, or limited liability company, or that the holder of 
a name filed or registered with the secretary of state under 
sections 333.001 to 333.54 filed or registered that name at 
least three years prior to the affidavit, and; that the 
corporation, limited partnership, or limited liability company 
or holder has not during the three-year period filed any 
document with the secretary of state; that the applicant has 
mailed written notice to the corporation or, limited partnership 
, or limited liability company or the holder of a name filed or 
registered with the secretary of state under sections 333.001 to 
333.54 by certified mail, return receipt requested, properly 
addressed to the registered office of the corporation or in care 
of the agent of the limited partnership, or the address of the 
holder of a name filed or registered with the secretary of state 
under sections 333.001 to 333.54, shown in the records of the 
secretary of state, stating that the applicant intends to use a 
name that is not distinguishable and the notice has been 
returned to the applicant as undeliverable to the addressee 
corporation or, limited partnership, limited liability company, 
or holder of a name filed or registered with the secretary of 
state under sections 333.001 to 333.54; that the applicant, 
after diligent inquiry, has been unable to find any telephone 
listing for the corporation or, limited partnership, or limited 
liability company with the name that is not distinguishable in 
the county in which is located the registered office of the 
corporation, limited partnership, or limited liability company 
shown in the records of the secretary of state or has been 
unable to find any telephone listing for the holder of a name 
filed or registered with the secretary of state under sections 
333.001 to 333.54 in the county in which is located the address 
of the holder shown in the records of the secretary of state; 
and that the applicant has no knowledge that the corporation or, 
limited partnership, limited liability company, or holder of a 
name filed or registered with the secretary of state under 
sections 333.001 to 333.54 is currently engaged in business in 
this state.  
    Sec. 9.  Minnesota Statutes 1992, section 302A.117, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WHO MAY RESERVE.] The exclusive right to 
the use of a corporate name otherwise permitted by section 
302A.115 may be reserved by:  
    (a) a person doing business in this state under that name; 
    (b) a person intending to incorporate under this chapter; 
    (c) a domestic corporation intending to change its name; 
    (d) a foreign corporation intending to make application for 
a certificate of authority to transact business in this state; 
    (e) a foreign corporation authorized to transact business 
in this state and intending to change its name; 
    (f) a person intending to incorporate a foreign corporation 
and intending to have the foreign corporation make application 
for a certificate of authority to transact business in this 
state; or 
    (g) a foreign corporation doing business under that name or 
a name deceptively similar to not distinguishable from that name 
in one or more states other than this state and not described in 
clause (d), (e), or (f).  
    Sec. 10.  Minnesota Statutes 1992, section 302A.123, 
subdivision 3, is amended to read: 
    Subd. 3.  [CHANGE OF BUSINESS ADDRESS OR NAME OF AGENT.] If 
the business address or name of a registered agent changes, the 
agent shall change the address of the registered office or the 
name of the registered agent, as the case may be, of each 
corporation represented by that agent by filing with the 
secretary of state a statement as required in subdivision 1, 
except that it need be signed only by the registered agent, need 
not be responsive to clause (e) or (h) (f), and must state that 
a copy of the statement has been mailed to each of those 
corporations or to the legal representative of each of those 
corporations.  
    Sec. 11.  Minnesota Statutes 1992, section 302A.133, is 
amended to read: 
    302A.133 [PROCEDURE FOR AMENDMENT BEFORE ISSUANCE OF SHARES 
WHEN NO SHARES ARE OUTSTANDING.] 
    Before the issuance of shares by a corporation, the 
articles may be amended pursuant to section 302A.171 by the 
incorporators or by the board.  The articles may also be amended 
by the board to change or cancel a statement pursuant to section 
302A.401, subdivision 3, establishing or fixing the rights and 
preferences of a class or series of shares before the issuance 
of any shares of that class or series. or at any subsequent time 
that no shares of that class or series are outstanding by filing 
articles of amendment or a statement of cancellation, as 
appropriate, with the secretary of state.  If a statement filed 
pursuant to section 302A.401, subdivision 3, is canceled, the 
shares of the class and series originally covered by the 
statement have the status of authorized but unissued, 
undesignated shares, unless the articles otherwise provide.  If 
the articles provide that the canceled shares may not be 
reissued, the statement of cancellation must include the 
information specified by section 302A.553, subdivision 2. 
    Sec. 12.  Minnesota Statutes 1992, section 302A.135, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MANNER OF AMENDMENT.] Except as otherwise 
set forth in section 302A.133, after the issuance of shares by 
the corporation, the articles may be amended in the manner set 
forth in this section.  
    Sec. 13.  Minnesota Statutes 1992, section 302A.135, 
subdivision 3, is amended to read: 
    Subd. 3.  [NOTICE.] Written notice of the shareholders' 
meeting setting forth the substance of the proposed amendment 
shall be given to each shareholder entitled to vote in the 
manner provided in section 302A.435 for the giving of notice of 
meetings of shareholders.  
    Sec. 14.  Minnesota Statutes 1992, section 302A.137, is 
amended to read: 
    302A.137 [CLASS OR SERIES VOTING ON AMENDMENTS.] 
    The holders of the outstanding shares of a class or series 
are entitled to vote as a class or series upon a proposed 
amendment, whether or not entitled to vote thereon by the 
provisions of the articles, if the amendment would:  
    (a) Increase or decrease the aggregate number of authorized 
shares of the class or series; 
    (b) Effect an exchange, reclassification, or cancellation 
of all or part of the shares of the class or series; 
    (c) Effect an exchange, or create a right of exchange, of 
all or any part of the shares of another class or series for the 
shares of the class or series; 
    (d) Change the rights or preferences of the shares of the 
class or series; 
    (e) Change the shares of the class or series, whether with 
or without par value, into the same or a different number of 
shares, either with or without par value, of the same or another 
class or series; 
    (f) Create a new class or series of shares having rights 
and preferences prior and superior to the shares of that class 
or series, or increase the rights and preferences or the number 
of authorized shares, of a class or series having rights and 
preferences prior or superior to the shares of that class or 
series; 
    (g) Divide the shares of the class into series and 
determine the designation of each series and the variations in 
the relative rights and preferences between the shares of each 
series, or authorize the board to do so; 
     (h) Limit or deny any existing preemptive rights of the 
shares of the class or series; or 
     (i) Cancel or otherwise affect distributions on the shares 
of the class or series that have accrued but have not been 
declared.  
    Sec. 15.  Minnesota Statutes 1992, section 302A.153, is 
amended to read: 
    302A.153 [EFFECTIVE DATE OF ARTICLES.] 
    Articles of incorporation are effective and corporate 
existence begins when the articles of incorporation are filed 
with the secretary of state accompanied by a payment of $135, 
which includes a $100 incorporation fee in addition to the $35 
filing fee required by section 302A.011, subdivision 11.  
Articles of amendment and articles of merger are effective when 
filed with the secretary of state or at another time within 30 
days after filing if the articles of amendment so provide.  
Articles of merger must be accompanied by a fee of $60, which 
includes a $25 merger fee in addition to the $35 filing fee 
required by section 302A.011, subdivision 11. 
    Sec. 16.  Minnesota Statutes 1992, section 302A.171, 
subdivision 2, is amended to read: 
    Subd. 2.  [MEETING.] After the issuance of the 
certificate filing of articles of incorporation, the 
incorporators or the directors named in the articles shall 
either hold an organizational meeting at the call of a majority 
of the incorporators or of the directors named in the articles, 
or take written action, for the purposes of transacting business 
and taking actions necessary or appropriate to complete the 
organization of the corporation, including, without limitation, 
amending the articles, electing directors, adopting bylaws, 
electing officers, adopting banking resolutions, authorizing or 
ratifying the purchase, lease, or other acquisition of suitable 
space, furniture, furnishings, supplies, and materials, 
approving a corporate seal, approving forms of certificates or 
transaction statements for shares of the corporation, adopting a 
fiscal year for the corporation, accepting subscriptions for and 
issuing shares of the corporation, and making any appropriate 
tax elections.  If a meeting is held, the person or persons 
calling the meeting shall give at least three days notice of the 
meeting to each incorporator or director named, stating the 
date, time, and place of the meeting.  Incorporators and 
directors may waive notice of an organizational meeting in the 
same manner that a director may waive notice of meetings of the 
board pursuant to section 302A.231, subdivision 5. 
    Sec. 17.  Minnesota Statutes 1992, section 302A.231, 
subdivision 3, is amended to read: 
    Subd. 3.  [CALLING MEETINGS; NOTICE.] Unless the articles 
or bylaws provide for a different time period, a director may 
call a board meeting by giving at least ten days notice or, in 
the case of organizational meetings pursuant to section 
302A.171, subdivision 2, at least three days notice, to all 
directors of the date, time, and place of the meeting.  The 
notice need not state the purpose of the meeting unless the 
articles or bylaws require it.  
    Sec. 18.  Minnesota Statutes 1992, section 302A.233, is 
amended to read: 
    302A.233 [ABSENT DIRECTORS.] 
    If the articles or bylaws so provide, a director may give 
advance written consent or opposition to a proposal to be acted 
on at a board meeting.  If the 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 the vote of a 
director present at the meeting 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. 
    Sec. 19.  Minnesota Statutes 1992, section 302A.237, is 
amended to read: 
    302A.237 [ACT OF THE BOARD.] 
    The board shall take action by the affirmative vote of the 
greater of (1) a majority of directors present at a duly held 
meeting at the time the action is taken, or (2) a majority of 
the minimum proportion or number of directors that would 
constitute a quorum for the transaction of business at the 
meeting, except where this chapter or the articles require the 
affirmative vote of a larger proportion or number.  If the 
articles require a larger proportion or number than is required 
by this chapter for a particular action, the articles shall 
control.  
    Sec. 20.  Minnesota Statutes 1992, section 302A.241, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] A resolution approved by the 
affirmative vote of a majority of the board may establish 
committees having the authority of the board in the management 
of the business of the corporation only to the extent provided 
in the resolution.  Committees may include a special litigation 
committee consisting of one or more independent directors or 
other independent persons to consider legal rights or remedies 
of the corporation and whether those rights and remedies should 
be pursued.  Committees other than special litigation committees 
and committees formed pursuant to section 302A.673, subdivision 
1, paragraph (d), are subject at all times to the direction and 
control of the board. 
    Sec. 21.  Minnesota Statutes 1992, section 302A.255, 
subdivision 2, is amended to read: 
    Subd. 2.  [MATERIAL FINANCIAL INTEREST.] For purposes of 
this section:  
    (a) A director does not have a material financial interest 
in A resolution fixing the compensation of the a director or 
fixing the compensation of another director as a director, 
officer, employee, or agent of the corporation, even though the 
first director is also receiving compensation from the 
corporation is not void or voidable or considered to be a 
contract or other transaction between a corporation and one or 
more of its directors for purposes of this section even though 
the director receiving the compensation fixed by the resolution 
is present and voting at the meeting of the board or a committee 
at which the resolution is authorized, approved, or ratified or 
even though other directors voting upon the resolution are also 
receiving compensation from the corporation; and 
    (b) A director has a material financial interest in each 
organization in which the director, or the spouse, parents, 
children and spouses of children, brothers and sisters and 
spouses of brothers and sisters, and the brothers and sisters of 
the spouse of the director, or any combination of them have a 
material financial interest.  For purposes of this section, a 
contract or other transaction between a corporation and the 
spouse, parents, children and spouses of children, brothers and 
sisters, spouses of brothers and sisters, and the brothers and 
sisters of the spouse of a director, or any combination of them, 
is considered to be a transaction between the corporation and 
the director. 
    Sec. 22.  Minnesota Statutes 1992, section 302A.401, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BOARD OR SHAREHOLDER MAY AUTHORIZE.] 
Subject to any restrictions in the articles, a corporation may 
issue securities and rights to purchase securities only when 
authorized by the board or by the shareholders.  
    Sec. 23.  Minnesota Statutes 1992, section 302A.401, 
subdivision 3, is amended to read: 
    Subd. 3.  [PROCEDURE FOR FIXING TERMS.] (a) Subject to any 
restrictions in the articles, the power granted in subdivision 2 
may be exercised by a resolution or resolutions approved by the 
affirmative vote of a majority of the directors present 
establishing a class or series, setting forth the designation of 
the class or series, and fixing the relative rights and 
preferences of the class or series.  Any of the rights and 
preferences of a class or series established in the articles or 
by resolution of the directors:  
    (1) may be made dependent upon facts ascertainable outside 
the articles, or outside the resolution or resolutions 
establishing the class or series, provided that the manner in 
which the facts operate upon the rights and preferences of the 
class or series is clearly and expressly set forth in the 
articles or in the resolution or resolutions establishing the 
class or series; and 
    (2) may incorporate by reference some or all of the terms 
of any agreements, contracts, or other arrangements entered into 
by the issuing corporation in connection with the establishment 
of the class or series if the corporation retains at its 
principal executive office a copy of the agreements, contracts, 
or other arrangements or the portions incorporated by reference. 
    (b) A statement setting forth the name of the corporation 
and the text of the resolution and certifying the adoption of 
the resolution and the date of adoption shall be filed with the 
secretary of state before the issuance of any shares for which 
the resolution creates rights or preferences not set forth in 
the articles; provided, however, where the shareholders have 
received notice of the creation of shares with rights or 
preferences not set forth in the articles before the issuance of 
the shares, the statement may be filed any time within one year 
after the issuance of the shares.  The resolution is effective 
when the statement has been filed with the secretary of state; 
or, if it is not required to be filed with the secretary of 
state before the issuance of shares, on the date of its adoption 
by the directors. 
     (c) A statement filed with the secretary of state in 
accordance with paragraph (b) is not considered an amendment of 
the articles for purposes of sections 302A.137 and 302A.471. 
    Sec. 24.  Minnesota Statutes 1992, section 302A.402, 
subdivision 1, is amended to read: 
    Subdivision 1.  [POWER TO EFFECT.] A corporation may effect 
a share dividend or a division or combination of its shares as 
provided in this section.  As used in this section, the terms 
"division" and "combination" mean dividing or combining shares 
of any class or series, whether issued or unissued, into a 
greater or lesser number of shares of the same class or series. 
    Sec. 25.  Minnesota Statutes 1992, section 302A.402, 
subdivision 2, is amended to read: 
    Subd. 2.  [WHEN SHAREHOLDER APPROVAL REQUIRED; FILING OF 
ARTICLES OF AMENDMENT.] (a) Articles of amendment must be 
adopted by the board and the shareholders under sections 
302A.135 and 302A.137 to effect a division or combination if, as 
a result of the proposed division or combination: 
    (1) the rights or preferences of the holders of outstanding 
shares of any class or series will be adversely affected; or 
    (2) the percentage of authorized shares of any class or 
series remaining unissued after the division or combination will 
exceed the percentage of authorized shares of that class or 
series that were unissued before the division or combination. 
    For purposes of this section, an increase or decrease in 
the relative voting rights of the shares that are the subject of 
the division or combination that arises solely from the increase 
or decrease in the number of the shares outstanding is not an 
adverse effect on the outstanding shares of any class or series 
and any increase in the percentage of authorized shares 
remaining unissued arising solely from the elimination of 
fractional shares under section 302A.423 must be disregarded. 
    (b) If a division or combination is effected under this 
subdivision, articles of amendment must be prepared that contain 
the information required by section 302A.139. 
    Sec. 26.  Minnesota Statutes 1992, section 302A.402, is 
amended by adding a subdivision to read: 
    Subd. 4.  [CHANGES IN VOTING RIGHTS; FRACTIONAL 
SHARES.] For purposes of this section, an increase or decrease 
in the relative voting rights of the shares that are the subject 
of the division or combination that arises solely from the 
increase or decrease in the number of shares outstanding is not 
an adverse effect on the outstanding shares of any class or 
series and any increase in the percentage of authorized shares 
remaining unissued arising solely from the elimination of 
fractional shares under section 302A.423 must be disregarded. 
    Sec. 27.  Minnesota Statutes 1992, section 302A.403, 
subdivision 2, is amended to read: 
    Subd. 2.  [IRREVOCABLE PERIOD.] Unless otherwise provided 
in the subscription agreement, or unless all of the subscribers 
and, if in existence, the corporation consent to a shorter or 
longer period, a subscription for shares is irrevocable for a 
period of six months, unless the subscription agreement provides 
for, or unless all of the subscribers consent to, an earlier 
revocation. 
    Sec. 28.  Minnesota Statutes 1992, section 302A.403, 
subdivision 4, is amended to read: 
    Subd. 4.  [METHOD OF COLLECTION; FORFEITURE; CANCELLATION 
OR SALE FOR ACCOUNT OF SUBSCRIBER.] (a) Unless otherwise 
provided in the subscription agreement, in the event of default 
in the payment of an installment or call when due, the 
corporation may proceed to collect the amount due in the same 
manner as a debt due the corporation, or, if the amount due 
remains unpaid for a period of 20 days after written notice of 
demand for payment has been given to the delinquent subscriber, 
the board may declare a forfeiture of the subscription or cancel 
it in accordance with this subdivision.  
    (b) Upon forfeiture of a subscription If the amount due on 
a subscription for shares remains unpaid for a period of 20 days 
after written notice of demand for payment has been given to the 
delinquent subscriber, the shares subscribed for may be offered 
for sale by the corporation for a price in money equaling or 
exceeding the sum of the full balance owed by the delinquent 
subscriber plus the expenses incidental to the sale.  The excess 
of net proceeds realized by the corporation over the sum of the 
amount owed by the delinquent subscriber plus the expenses 
incidental to the sale shall be paid If the shares subscribed 
for are sold pursuant to this paragraph, the corporation shall 
pay to the delinquent subscriber or to a the delinquent 
subscriber's legal representative.  The payment shall not exceed 
the lesser of (i) the excess of net proceeds realized by the 
corporation over the sum of the amount owed by the delinquent 
subscriber plus the expenses incidental to the sale, and (ii) 
the amount actually paid by the delinquent subscriber.  If the 
shares subscribed for are not sold pursuant to this paragraph, 
the corporation may collect the amount due in the same manner as 
a debt due the corporation or cancel the subscription in 
accordance with paragraph (c). 
    (c) If, within 20 days after the corporation offers to sell 
If the amount due on a subscription for shares remains unpaid 
for a period of 20 days after written notice of demand for 
payment has been given to the delinquent subscriber and the 
shares subscribed for by the delinquent subscriber, no 
prospective purchaser offers to purchase the shares for a money 
price sufficient to pay the sum of the full balance owed by the 
delinquent subscriber plus the expenses incidental to the sale, 
or if the corporation has refunded to the subscriber or a legal 
representative a have not been sold pursuant to paragraph (b), 
the corporation may cancel the subscription, in which event the 
shares subscribed for must be restored to the status of 
authorized but unissued shares, the corporation may retain the 
portion of the subscription price actually paid, the 
subscription may be canceled, the shares subscribed for may be 
restored to the status of authorized but unissued shares that 
does not exceed ten percent of the subscription price, and the 
corporation may retain the shall refund to the delinquent 
subscriber or the delinquent subscriber's legal representative 
that portion of the subscription price actually paid that does 
not exceed which exceeds ten percent of the subscription price.  
    Sec. 29.  Minnesota Statutes 1992, section 302A.413, 
subdivision 4, is amended to read: 
    Subd. 4.  [EXEMPTIONS.] Unless otherwise provided in the 
articles, a shareholder does not have a preemptive 
right pursuant to this section to acquire securities or rights 
to purchase securities that are: 
    (a) Issued for a consideration other than money; 
    (b) Issued pursuant to a plan of merger or exchange; 
    (c) Issued pursuant to an employee or incentive benefit 
plan approved at a meeting by the affirmative vote of the 
holders of a majority of the voting power of all shares entitled 
to vote; 
    (d) Issued upon exercise of previously issued rights to 
purchase securities of the corporation; 
    (e) Issued pursuant to a public offering of the 
corporation's securities or rights to purchase securities.  For 
purposes of this clause, "public offering" means an offering of 
the corporation's securities or rights to purchase securities if 
the resale or other distribution of those securities or rights 
to purchase securities is not restricted by either state or 
federal securities laws; or 
    (f) Issued pursuant to a plan of reorganization approved by 
a court of competent jurisdiction pursuant to a statute of this 
state or of the United States. 
    Sec. 30.  Minnesota Statutes 1992, section 302A.413, 
subdivision 9, is amended to read: 
    Subd. 9.  [MODIFICATION.] If the shareholders of a 
corporation are entitled to cumulative voting in the election of 
directors, no amendment to the articles which has the effect of 
denying, limiting, or modifying the preemptive rights provided 
in this section shall be adopted if the votes of a proportion of 
the voting power sufficient to elect a director at an election 
of the entire board under cumulative voting are cast against the 
amendment.  
    Sec. 31.  Minnesota Statutes 1992, section 302A.423, 
subdivision 2, is amended to read: 
    Subd. 2.  [RESTRICTIONS; RIGHTS.] A corporation shall not 
pay money for fractional shares if that action would result in 
the cancellation of more than 20 percent of the outstanding 
shares of a class or series.  A determination by the board of 
the fair value of fractions of a share is conclusive in the 
absence of fraud.  A certificate or a transaction statement for 
a fractional share does, but scrip or warrants do not unless 
they provide otherwise, entitle the shareholder to exercise 
voting rights or to receive distributions.  The board may cause 
scrip or warrants to be issued subject to the condition that 
they become void if not exchanged for full shares before a 
specified date, or that the shares for which scrip or warrants 
are exchangeable may be sold by the corporation and the proceeds 
distributed to the holder of the scrip or warrants, or to any 
other condition or set of conditions the board may impose.  
    Sec. 32.  Minnesota Statutes 1992, section 302A.435, 
subdivision 1, is amended to read: 
    Subdivision 1.  [TO WHOM GIVEN.] Except as otherwise 
provided in this chapter, notice of all meetings of shareholders 
shall be given to every holder of shares entitled to vote, 
except unless: 
    (1) the meeting is an adjourned meeting and the date, time, 
and place of the meeting were announced at the time of 
adjournment; or 
    (2) the following have been mailed by first class mail to a 
shareholder at the address in the corporate records and returned 
undeliverable: 
    (i) two consecutive annual meeting notices and notices of 
any special meetings held during the period between the two 
annual meetings; or 
    (ii) all payments of dividends sent during a 12-month 
period, provided there are at least two sent during a the 
12-month period. 
    An action or meeting that is taken or held without notice 
under clause (2) has the same force and effect as if notice was 
given.  If the shareholder delivers a written notice of the 
shareholder's current address to the corporation, the notice 
requirement is reinstated. 
    Sec. 33.  Minnesota Statutes 1992, section 302A.435, 
subdivision 3, is amended to read: 
    Subd. 3.  [CONTENTS.] The notice shall contain the date, 
time, and place of the meeting, the information with respect to 
dissenters' rights required by section 302A.473, subdivision 2, 
if applicable, and any other information required by this 
chapter.  In the case of a special meeting, the notice shall 
contain a statement of the purposes of the meeting.  The notice 
may also contain any other information required by the articles 
or bylaws or deemed necessary or desirable by the board or by 
any other person or persons calling the meeting.  
    Sec. 34.  Minnesota Statutes 1992, section 302A.437, 
subdivision 2, is amended to read: 
    Subd. 2.  [VOTING BY CLASS OR SERIES.] In any case where a 
class or series of shares is entitled by this chapter, the 
articles, the bylaws, or the terms of the shares to vote as a 
class or series, the matter being voted upon must also receive 
the affirmative vote of the holders of the same proportion of 
the shares present of that class or series, or of the total 
outstanding shares of that class or series, as the proportion 
required pursuant to subdivision 1, unless the articles require 
a larger proportion.  Unless otherwise stated in the articles or 
bylaws in the case of voting as a class or series, the minimum 
percentage of the total number of shares of the class or series 
which must be present shall be equal to the minimum percentage 
of all outstanding shares entitled to vote required to be 
present under section 302A.443.  
    Sec. 35.  Minnesota Statutes 1992, section 302A.447, 
subdivision 2, is amended to read: 
    Subd. 2.  [SHARES HELD BY SUBSIDIARY.] Except as provided 
in subdivision 3, shares of a corporation registered in the name 
of a subsidiary are not entitled to vote be voted on any matter. 
    Sec. 36.  Minnesota Statutes 1992, section 302A.447, 
subdivision 3, is amended to read: 
    Subd. 3.  [SHARES CONTROLLED IN FIDUCIARY CAPACITY.] Shares 
of a corporation in the name of or under the control of the 
corporation or a subsidiary in a fiduciary capacity are not 
entitled to vote be voted on any matter, except to the extent 
that the settlor or beneficial owner possesses and exercises a 
right to vote or gives the corporation or, with respect to 
shares in the name of or under control of a subsidiary, the 
subsidiary, binding instructions on how to vote the shares.  
    Sec. 37.  Minnesota Statutes 1992, section 302A.449, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AUTHORIZATION.] A shareholder may cast or 
authorize the casting of a vote by filing a written appointment 
of a proxy with an officer of the corporation at or before the 
meeting at which the appointment is to be effective.  A written 
appointment of a proxy may be signed by the shareholder or 
authorized by the shareholder by transmission of a telegram, 
cablegram, or other means of electronic transmission, provided 
that the telegram, cablegram, or other means of electronic 
transmission must set forth or be submitted with information 
from which it can be determined corporation has no reason to 
believe that the telegram, cablegram, or other electronic 
transmission was not authorized by the shareholder.  Any 
reproduction of the writing or transmission may be substituted 
or used in lieu of the original writing or transmission for any 
purpose for which the original transmission could be used, 
provided that the copy, facsimile telecommunication, or other 
reproduction is a complete and legible reproduction of the 
entire original writing or transmission.  An appointment of a 
proxy for shares held jointly by two or more shareholders is 
valid if signed or otherwise authorized by any one of them, 
unless the corporation receives from any one of those 
shareholders written notice either denying the authority of that 
person to appoint a proxy or appointing a different proxy.  
    Sec. 38.  Minnesota Statutes 1992, section 302A.461, 
subdivision 4, is amended to read: 
    Subd. 4.  [RIGHT TO INSPECT.] (a) A shareholder, beneficial 
owner, or a holder of a voting trust certificate of a 
corporation that is not a publicly held corporation has an 
absolute right, upon written demand, to examine and copy, in 
person or by a legal representative, at any reasonable time, and 
the corporation shall make available within ten days after 
receipt by an officer of the corporation of the written demand: 
    (1) the share register; and 
    (2) all documents referred to in subdivision 2.  
    (b) A shareholder, beneficial owner, or a holder of a 
voting trust certificate of a corporation that is not a publicly 
held corporation has a right, upon written demand, to examine 
and copy, in person or by a legal representative, other 
corporate records at any reasonable time only if the 
shareholder, beneficial owner, or holder of a voting trust 
certificate demonstrates a proper purpose for the examination.  
    (c) A shareholder, beneficial owner, or a holder of a 
voting trust certificate of a publicly held corporation has, 
upon written demand stating the purpose and acknowledged or 
verified in the manner provided in chapter 358, a right at any 
reasonable time to examine and copy the corporation's share 
register and other corporate records reasonably related to the 
stated purpose and described with reasonable particularity in 
the written demand upon demonstrating the stated purpose to be a 
proper purpose.  The acknowledged or verified demand must be 
directed to the corporation at its registered office in this 
state or at its principal place of business. 
     (d) For purposes of this section, a "proper purpose" is one 
reasonably related to the person's interest as a shareholder, 
beneficial owner, or holder of a voting trust certificate of the 
corporation. 
    Sec. 39.  Minnesota Statutes 1992, section 302A.463, is 
amended to read: 
    302A.463 [FINANCIAL STATEMENTS.] 
    (a) A corporation shall, upon written request by a 
shareholder, furnish annual financial statements, 
including prepare annual financial statements within 180 days 
after the close of the corporation's fiscal year.  The financial 
statement shall include at least a balance sheet as of the end 
of each fiscal year and a statement of income for the fiscal 
year, which shall be prepared on the basis of accounting methods 
reasonable in the circumstances and may be consolidated 
statements of the corporation and one or more of its 
subsidiaries.  In the case of statements audited by a public 
accountant, each copy shall be accompanied by a report setting 
forth the opinion of the accountant on the statements; in other 
cases, each copy shall be accompanied by a statement of the 
chief financial officer or other person in charge of the 
corporation's financial records stating the reasonable belief of 
the person that the financial statements were prepared in 
accordance with accounting methods reasonable in the 
circumstances, describing the basis of presentation, and 
describing any respects in which the financial statements were 
not prepared on a basis consistent with those prepared for the 
previous year.  
    (b) Upon written request by a shareholder, a corporation 
shall furnish its most recent annual financial statements as 
required under paragraph (a) no later than ten business days 
after receipt of a shareholder's written request.  "Furnish" for 
purposes of this paragraph means that the corporation shall 
deliver or mail, postage prepaid, the financial statements to 
the address specified by the requesting shareholder. 
    Sec. 40.  Minnesota Statutes 1992, section 302A.471, 
subdivision 3, is amended to read: 
    Subd. 3.  [RIGHTS NOT TO APPLY.] Unless the articles, the 
bylaws, or a resolution approved by the board otherwise provide, 
the right to obtain payment under this section does not apply to 
a shareholder of the surviving corporation in a merger, if the 
shares of the shareholder are not entitled to be voted on the 
merger. 
    Sec. 41.  Minnesota Statutes 1992, section 302A.473, 
subdivision 4, is amended to read: 
    Subd. 4.  [NOTICE OF PROCEDURE; DEPOSIT OF SHARES.] (a) 
After the proposed action has been approved by the board and, if 
necessary, the shareholders, the corporation shall send to all 
shareholders who have complied with subdivision 3 and to all 
shareholders entitled to dissent if no shareholder vote was 
required, a notice that contains:  
    (1) The address to which a demand for payment and 
certificates of certificated shares must be sent in order to 
obtain payment and the date by which they must be received; 
    (2) Any restrictions on transfer of uncertificated shares 
that will apply after the demand for payment is received; 
    (3) A form to be used to certify the date on which the 
shareholder, or the beneficial owner on whose behalf the 
shareholder dissents, acquired the shares or an interest in them 
and to demand payment; and 
    (4) A copy of section 302A.471 and this section and a brief 
description of the procedures to be followed under these 
sections.  
    (b) In order to receive the fair value of the shares, a 
dissenting shareholder must demand payment and deposit 
certificated shares or comply with any restrictions on transfer 
of uncertificated shares within 30 days after the 
notice required by paragraph (a) was given, but the dissenter 
retains all other rights of a shareholder until the proposed 
action takes effect.  
    Sec. 42.  Minnesota Statutes 1992, section 302A.473, 
subdivision 7, is amended to read: 
    Subd. 7.  [PETITION; DETERMINATION.] If the corporation 
receives a demand under subdivision 6, it shall, within 60 days 
after receiving the demand, either pay to the dissenter the 
amount demanded or agreed to by the dissenter after discussion 
with the corporation or file in court a petition requesting that 
the court determine the fair value of the shares, plus 
interest.  The petition shall be filed in the county in which 
the registered office of the corporation is located, except that 
a surviving foreign corporation that receives a demand relating 
to the shares of a constituent domestic corporation shall file 
the petition in the county in this state in which the last 
registered office of the constituent corporation was located.  
The petition shall name as parties all dissenters who have 
demanded payment under subdivision 6 and who have not reached 
agreement with the corporation.  The corporation shall, after 
filing the petition, serve all parties with a summons and copy 
of the petition under the rules of civil procedure.  
Nonresidents of this state may be served by registered or 
certified mail or by publication as provided by law.  Except as 
otherwise provided, the rules of civil procedure apply to this 
proceeding.  The jurisdiction of the court is plenary and 
exclusive.  The court may appoint appraisers, with powers and 
authorities the court deems proper, to receive evidence on and 
recommend the amount of the fair value of the shares.  The court 
shall determine whether the shareholder or shareholders in 
question have fully complied with the requirements of this 
section, and shall determine the fair value of the shares, 
taking into account any and all factors the court finds 
relevant, computed by any method or combination of methods that 
the court, in its discretion, sees fit to use, whether or not 
used by the corporation or by a dissenter.  The fair value of 
the shares as determined by the court is binding on all 
shareholders, wherever located.  A dissenter is entitled to 
judgment in cash for the amount by which the fair value of the 
shares as determined by the court, plus interest, exceeds the 
amount, if any, remitted under subdivision 5, but shall not be 
liable to the corporation for the amount, if any, by which the 
amount, if any, remitted to the dissenter under subdivision 5 
exceeds the fair value of the shares as determined by the court, 
plus interest.  
    Sec. 43.  Minnesota Statutes 1992, section 302A.501, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PREREQUISITES.] A 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:  
    (a) Is in the usual and regular course of business of the 
corporation; 
    (b) Is with, or for the benefit of, a related corporation, 
an 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, any of which 
relationships constitute consideration sufficient to make the 
loan, guarantee, suretyship, or other financial assistance so 
approved enforceable against the corporation; 
    (c) 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 
    (d) Whether or not any separate consideration has been paid 
or promised to the corporation, has been approved by (1) the 
holders of two-thirds of the voting power of the shares entitled 
to vote which are owned by persons other than the interested 
person or persons, or (2) the unanimous affirmative vote of the 
holders of all outstanding shares, whether or not entitled to 
vote.  
    Sec. 44.  Minnesota Statutes 1992, section 302A.521, 
subdivision 6, is amended to read: 
    Subd. 6.  [DETERMINATION OF ELIGIBILITY.] (a) All 
determinations whether indemnification of a person is required 
because the criteria set forth in subdivision 2 have been 
satisfied and whether a person is entitled to payment or 
reimbursement of expenses in advance of the final disposition of 
a proceeding as provided in subdivision 3 shall be made:  
    (1) By the board by a majority of a quorum.  Directors, if 
the directors who are at the time parties to the 
proceeding shall are not be counted for determining either a 
majority or the presence of a quorum; 
    (2) If a quorum under clause (1) cannot be obtained, by a 
majority of a committee of the board, consisting solely of two 
or more directors not at the time parties to the proceeding, 
duly designated to act in the matter by a majority of the full 
board including directors who are parties; 
    (3) If a determination is not made under clause (1) or (2), 
by special legal counsel, selected either by a majority of the 
board or a committee by vote pursuant to clause (1) or (2) or, 
if the requisite quorum of the full board cannot be obtained and 
the committee cannot be established, by a majority of the full 
board including directors who are parties; 
    (4) If a determination is not made under clauses (1) to 
(3), by the shareholders, excluding the votes of but the shares 
held by parties to the proceeding must not be counted in 
determining the presence of a quorum and are not considered to 
be present and entitled to vote on the determination; or 
    (5) If an adverse determination is made under clauses (1) 
to (4) or under paragraph (b), or if no determination is made 
under clauses (1) to (4) or under paragraph (b) within 60 days 
after (i) the later to occur of the termination of a proceeding 
or a written request for indemnification to the corporation or 
after a (ii) a written request for an advance of expenses, as 
the case may be, by a court in this state, which may be the same 
court in which the proceeding involving the person's liability 
took place, upon application of the person and any notice the 
court requires.  The person seeking indemnification or payment 
or reimbursement of expenses pursuant to this clause has the 
burden of establishing that the person is entitled to 
indemnification or payment or reimbursement of expenses.  
    (b) With respect to a person who is not, and was not at the 
time of the acts or omissions complained of in the proceedings, 
a director, officer, or person possessing, directly or 
indirectly, the power to direct or cause the direction of the 
management or policies of the corporation, the determination 
whether indemnification of this person is required because the 
criteria set forth in subdivision 2 have been satisfied and 
whether this person is entitled to payment or reimbursement of 
expenses in advance of the final disposition of a proceeding as 
provided in subdivision 3 may be made by an annually appointed 
committee of the board, having at least one member who is a 
director.  The committee shall report at least annually to the 
board concerning its actions.  
    Sec. 45.  Minnesota Statutes 1992, section 302A.551, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WHEN PERMITTED.] (a) The board may 
authorize and cause the corporation to make a distribution only 
if the board determines, in accordance with subdivision 2, that 
the corporation will be able to pay its debts in the ordinary 
course of business after making the distribution and the board 
does not know before the distribution is made that the 
determination was or has become erroneous, and.  
    (b) The corporation may make the distribution if it is able 
to pay its debts in the ordinary course of business after making 
the distribution.  
    (c) The effect of a distribution on the ability of the 
corporation to pay its debts in the ordinary course of business 
after making the distribution shall be measured in accordance 
with subdivision 3.  
    (d) The right of the board to authorize, and the 
corporation to make, distributions may be prohibited, limited, 
or restricted by, or the rights and priorities of persons to 
receive distributions may be established by, the articles or 
bylaws or an agreement. 
    Sec. 46.  Minnesota Statutes 1992, section 302A.553, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WHEN PERMITTED; STATUS OF SHARES.] (a) A 
corporation may acquire its own shares, subject to section 
302A.551 and subdivision 3.  If the corporation pledges the 
shares to secure payment of the redemption price thereof, then 
the corporation shall not be deemed to have acquired the shares 
for the purposes of this subdivision until the pledge is 
released.  Shares acquired by a corporation 
    (b) If a corporation acquires its own shares, then any of 
the acquired shares that are not pledged by the corporation as 
security for the future payment of some or all of the purchase 
price for the shares constitute authorized but unissued shares 
of the corporation, unless the articles provide that they shall 
not be reissued, in which case.  If the articles prohibit 
reissue, the number of authorized shares is reduced by the 
number of shares acquired. 
    (c) If a corporation pledges acquired shares as security 
for future payment of all or part of the purchase price for the 
shares and reissues the pledged shares in its own name; then 
    (1) the shares must continue to be issued and outstanding 
except for voting and determination of a quorum, and the shares 
are not considered to be present and entitled to vote at any 
meeting of shareholders; 
    (2) the corporation may not vote or exercise any other 
rights of a shareholder with respect to the pledged shares, but 
the pledgee shall have any rights, other than the right to vote, 
with respect to the shares to which the pledgee is entitled to 
contract; 
    (3) if the pledge is foreclosed, the corporation shall 
reissue and deliver the pledged shares to or at the direction of 
the pledgee; and 
    (4) shares which are released from a pledge have the status 
specified in paragraph (b). 
    Sec. 47.  Minnesota Statutes 1992, section 302A.559, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LIABILITY.] In addition to any other 
liabilities, a director who is present at a meeting and fails to 
vote against, or who consents in writing to, a distribution made 
in violation of section 302A.551, subdivision 1, paragraph (a), 
or 4, or a restriction contained in the articles or bylaws or an 
agreement, and who fails to comply with the standard of conduct 
provided in section 302A.251, is liable to the corporation, its 
receiver or any other person winding up its affairs jointly and 
severally with all other directors so liable and to other 
directors under subdivision 3, but only to the extent that the 
distribution exceeded the amount that properly could have been 
paid under section 302A.551. 
    Sec. 48.  Minnesota Statutes 1992, section 302A.613, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPROVAL BY SHAREHOLDERS.] (a) At the meeting a 
vote of the shareholders shall be taken on the proposed plan.  
The plan of merger or exchange is adopted when approved by the 
affirmative vote of the holders of a majority of the voting 
power of all shares entitled to vote.  Except as provided in 
paragraph (b), a class or series of shares of the corporation is 
entitled to vote as a class or series if any provision of the 
plan would, if contained in a proposed amendment to the 
articles, entitle the class or series of shares to vote as a 
class or series and, in the case of an exchange, if the class or 
series is included in the exchange. 
    (b) A class or series of shares of the corporation is not 
entitled to vote as a class or series solely because the plan of 
merger or exchange effects a cancellation of the shares of the 
class or series if the plan of merger or exchange effects a 
cancellation of all shares of the corporation of all classes and 
series that are outstanding immediately prior to the merger or 
exchange and shareholders of shares of that class or series are 
entitled to obtain payment for the fair value of their shares 
under section 302A.471 in the event of the merger or exchange. 
    Sec. 49.  Minnesota Statutes 1992, section 302A.613, 
subdivision 3, is amended to read: 
    Subd. 3.  [WHEN APPROVAL BY SHAREHOLDERS NOT REQUIRED.] 
Notwithstanding the provisions of subdivisions 1 and 2, 
submission of a plan of merger to a vote at a meeting of 
shareholders of a surviving corporation is not required if:  
    (a) The articles of the corporation will not be amended in 
the transaction; 
    (b) Each holder of shares of the corporation that were 
outstanding immediately before the effective date time of the 
transaction will hold the same number of shares with identical 
rights immediately thereafter; 
    (c) The number of voting power of the outstanding shares of 
the corporation entitled to vote immediately after the merger, 
plus the number of voting power of the shares of the corporation 
entitled to vote issuable on conversion of securities other than 
shares, or on the exercise of rights to purchase, securities 
issued by virtue of the terms of in the transaction, will not 
exceed by more than 20 percent, the number of voting power of 
the outstanding shares of the corporation entitled to vote 
immediately before the transaction; and 
    (d) The number of participating shares of the corporation 
immediately after the merger, plus the number of participating 
shares of the corporation issuable on conversion of, or on the 
exercise of rights to purchase, securities issued in the 
transaction, will not exceed by more than 20 percent, the number 
of participating shares of the corporation immediately before 
the transaction.  "Participating shares" are outstanding shares 
of the corporation that entitle their holders to participate 
without limitation in distributions by the corporation.  
    Sec. 50.  Minnesota Statutes 1992, section 302A.621, 
subdivision 6, is amended to read: 
    Subd. 6.  [RIGHTS OF DISSENTING SHAREHOLDERS.] In the event 
all of the stock of one or more domestic subsidiaries of the 
parent that is a constituent party to a merger under this 
section is not owned by the parent directly, or indirectly 
through related corporations, immediately prior to the merger, 
the shareholders of each domestic subsidiary have dissenters' 
rights under section 302A.471, without regard to sections 
302A.471, subdivision 3, and 302A.473.  If the parent is a 
constituent corporation but is not the surviving corporation in 
the merger, and the articles of incorporation of the surviving 
corporation immediately after the merger differ from the 
articles of incorporation of the parent immediately prior to the 
merger in a manner that would entitle a shareholder of the 
parent to dissenters' rights under section 302A.471, subdivision 
1, paragraph (a), if the articles of incorporation of the 
surviving corporation constituted an amendment to the articles 
of incorporation of the parent, that shareholder of the parent 
has dissenters' rights as provided under sections 302A.471 and 
302A.473.  Except as provided in this subdivision, sections 
302A.471 and 302A.473 do not apply to any merger effected under 
this section. 
    Sec. 51.  Minnesota Statutes 1992, section 302A.641, 
subdivision 1, is amended to read: 
    Subdivision 1.  [EFFECTIVE DATE OR TIME.] A merger or 
exchange is effective when the articles of merger or exchange 
are filed with the secretary of state or on a later date or at a 
later time specified in the articles of merger or exchange. 
    Sec. 52.  Minnesota Statutes 1992, section 302A.671, 
subdivision 3, is amended to read: 
    Subd. 3.  [MEETING OF SHAREHOLDERS.] If the acquiring 
person so requests in writing at the time of delivery of an 
information statement pursuant to subdivision 2, and has made, 
or has made a bona fide written offer to make, a control share 
acquisition and gives a written undertaking to pay or reimburse 
the issuing public corporation's expenses of a special meeting, 
except the expenses of the issuing public corporation in 
opposing according voting rights with respect to shares acquired 
or to be acquired in the control share acquisition, within ten 
days after receipt by the issuing public corporation of the 
information statement, a special meeting of the shareholders of 
the issuing public corporation shall be called pursuant to 
section 302A.433, subdivision 1, for the sole purpose of 
considering the voting rights to be accorded to shares referred 
to in subdivision 1, paragraph (b), acquired or to be acquired 
pursuant to the control share acquisition.  The special meeting 
shall be held no later than 55 days after receipt of the 
information statement and written undertaking to pay or 
reimburse the issuing public corporation's expenses of the 
special meeting, unless the acquiring person agrees to a later 
date.  If the acquiring person so requests in writing at the 
time of delivery of the information statement, (1) the special 
meeting shall not be held sooner than 30 days after receipt by 
the issuing public corporation of the information statement. and 
(2) the record date for the meeting must be at least 30 days 
prior to the date of the meeting.  If no request for a special 
meeting is made, consideration of the voting rights to be 
accorded to shares referred to in subdivision 1, paragraph (b), 
acquired or to be acquired pursuant to the control share 
acquisition shall be presented at the next special or annual 
meeting of the shareholders, unless prior thereto the matter of 
the voting rights becomes moot.  The notice of the meeting shall 
at a minimum be accompanied by a copy of the information 
statement (and a copy of any amendment to the information 
statement previously delivered to the issuing public 
corporation) and a statement disclosing that the board of the 
issuing public corporation recommends approval of, expresses no 
opinion and is remaining neutral toward, recommends rejection 
of, or is unable to take a position with respect to according 
voting rights to shares referred to in subdivision 1, paragraph 
(b), acquired or to be acquired in the control share 
acquisition.  The notice of meeting shall be given at least ten 
days prior to the meeting.  Any amendments to the information 
statement received after mailing of the notice of the meeting 
must be mailed promptly to the shareholders by the issuing 
public corporation. 
    Sec. 53.  Minnesota Statutes 1992, section 302A.673, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BUSINESS COMBINATION WITH INTERESTED 
SHAREHOLDER; APPROVAL BY DIRECTORS.] (a) Notwithstanding 
anything to the contrary contained in this chapter (except the 
provisions of subdivision 3), an issuing public corporation may 
not engage in any business combination, or vote, consent, or 
otherwise act to authorize a subsidiary of the issuing public 
corporation to engage in any business combination, with, with 
respect to, proposed by or on behalf of, or pursuant to any 
written or oral agreement, arrangement, relationship, 
understanding, or otherwise with, any interested shareholder of 
the issuing public corporation or any affiliate or associate of 
the interested shareholder for a period of four years following 
the interested shareholder's share acquisition date unless the 
business combination or the acquisition of shares made by the 
interested shareholder on the interested shareholder's share 
acquisition date is approved before the interested shareholder's 
share acquisition date, or on the share acquisition date but 
prior to the interested shareholder's becoming an interested 
shareholder on the share acquisition date, by a committee of the 
board of the issuing public corporation formed in accordance 
with paragraph (d). 
    (b) If a good faith definitive proposal regarding a 
business combination is made in writing to the board of the 
issuing public corporation, a committee of the board formed in 
accordance with paragraph (d) shall consider and take action on 
the proposal and respond in writing within 30 days after receipt 
of the proposal by the issuing public corporation, setting forth 
its decision regarding the proposal. 
      (c) If a good faith definitive proposal to acquire shares 
is made in writing to the board of the issuing public 
corporation, a committee of the board formed in accordance with 
paragraph (d), shall consider and take action on the proposal 
and respond in writing within 30 days after receipt of the 
proposal by the issuing public corporation, setting forth its 
decision regarding the proposal.  
      (d)(1) When a business combination or acquisition of shares 
is proposed pursuant to this subdivision, the board shall 
promptly form a committee composed of all of the board's 
disinterested directors.  The committee shall take action on the 
proposal by the affirmative vote of a majority of committee 
members.  No larger proportion or number of votes shall be 
required.  Notwithstanding the provisions of section 302A.241, 
subdivision 1, the committee shall not be subject to any 
direction or control by the board with respect to the 
committee's consideration of, or any action concerning, a 
business combination or acquisition of shares pursuant to this 
section. 
      (2) A committee formed pursuant to this subdivision shall 
be composed of one or more members.  Only disinterested 
directors may be members of a committee formed pursuant to this 
subdivision.  However, if the board has no disinterested 
directors, the board shall select three or more disinterested 
persons to be committee members.  Committee members are deemed 
to be directors for purposes of sections 302A.251, 302A.255, and 
302A.521. 
      (3) For purposes of this subdivision, a director or person 
is "disinterested" if the director or person is neither an 
officer nor an employee, nor has been an officer or employee 
within five years preceding the formation of the committee 
pursuant to this section, of the issuing public corporation, or 
of a related corporation. 
    Sec. 54.  Minnesota Statutes 1992, section 302A.673, 
subdivision 3, is amended to read: 
    Subd. 3.  [APPLICATION.] (a) Unless by express provision 
electing to be subject to this section contained in the articles 
or in bylaws approved by the shareholders of an issuing public 
corporation, this section does not apply to any business 
combination of an issuing public corporation, that is not, at 
any time during the period from June 1, 1987, until adoption of 
the article or bylaw provision, a publicly held corporation.  If 
the article or bylaw provision electing to be subject to this 
section expressly so provides, This section shall not apply to 
any business combination with an interested shareholder whose 
share acquisition date is either before the effective date of 
the article or bylaw provision or on the effective date, but 
prior to the effective time of the article or bylaw provision.  
    (b) Except as provided in paragraph (c), this section does 
not apply to any business combination of an issuing public 
corporation: 
    (1) if, prior to the time the issuing public corporation 
becomes a publicly held corporation or becomes subject to this 
section by virtue of an election under paragraph (a), including 
any time prior to the time that the corporation becomes an 
issuing public corporation, articles or bylaws of the 
corporation contain a provision expressly electing not to be 
subject to this section; 
    (2) if the board of the issuing public corporation adopts, 
prior to September 1, 1987, an amendment to the issuing public 
corporation's bylaws expressly electing not to be subject to 
this section; 
     (3) if an amendment to the articles or bylaws of the 
issuing public corporation is approved by the shareholders, 
other than interested shareholders and their affiliates and 
associates, holding a majority of the outstanding voting power 
of all shares entitled to vote, excluding the shares of 
interested shareholders and their affiliates and associates, 
expressly electing not to be subject to this section and the 
amendment provides that it is not to be effective until 18 
months after the vote of shareholders and provides that, except 
as provided in paragraph (c), it does not apply to any business 
combination of the issuing public corporation with an interested 
shareholder whose share acquisition date is on or before the 
effective date of the amendment; or 
     (4) if the business combination was consummated before, or 
if a binding agreement for the business combination was entered 
into before, the day following June 1, 1987.  
     (c) This section does not apply to any business combination 
of an issuing public corporation with respect to, proposed by or 
on behalf of, or pursuant to any written or oral agreement, 
arrangement, relationship, understanding, or otherwise with any 
person that would have been an interested shareholder on June 1, 
1987, had this section been in effect on this date and had the 
issuing public corporation been an issuing public corporation on 
this date. 
    This section applies to any business combination of an 
issuing public corporation to which it previously did not apply 
because of provisions in articles or bylaws adopted or approved 
under paragraph (b), clause (1), (2), or (3), upon an amendment 
to the articles or bylaws approved by shareholders holding a 
majority of the outstanding voting power of all shares entitled 
to vote expressly electing to be subject to this section 
becoming effective.  This section does not apply to any business 
combination of the corporation with, with respect to, proposed 
by or on behalf of, or pursuant to any written or oral 
agreement, arrangement, relationship, understanding, or 
otherwise with any person that would have been an interested 
shareholder on at the effective date time of the amendment if 
this section had been applicable. 
    Sec. 55.  Minnesota Statutes 1992, section 302A.711, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MANNER.] A corporation that has not issued 
shares may be dissolved by the incorporators or directors in the 
manner set forth in this section.  
    Sec. 56.  Minnesota Statutes 1992, section 302A.711, 
subdivision 2, is amended to read: 
    Subd. 2.  [ARTICLES OF DISSOLUTION.] (a) A majority of the 
incorporators or directors shall sign articles of dissolution 
containing: 
    (1) The name of the corporation; 
    (2) The date of incorporation; 
    (3) A statement that shares have not been issued; 
    (4) A statement that all consideration received from 
subscribers for shares to be issued, less expenses incurred in 
the organization of the corporation, has been returned to the 
subscribers; and 
    (5) A statement that no debts remain unpaid.  
    (b) The articles of dissolution shall be filed with the 
secretary of state.  
    Sec. 57.  Minnesota Statutes 1992, section 302A.901, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [SERVICE ON DISSOLVED CORPORATIONS.] Process, 
notice, or demand may be served on a dissolved corporation as 
provided in this subdivision.  The court shall determine if 
service is proper. 
    (a) If a corporation has voluntarily dissolved or a court 
has entered a decree of dissolution, service may be made 
according to subdivision 1 so long as claims are not finally 
barred under section 302A.781. 
    (b) If a corporation has been involuntarily dissolved 
pursuant to section 302A.821, service may be made according to 
subdivision 1. 
    Presented to the governor April 7, 1993 
    Signed by the governor April 7, 1993, 3:22 p.m.