UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of report (Date of earliest event reported): December
4, 2014
ATRM
Holdings, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
| Minnesota |
|
0-22166 |
|
41-1439182 |
(State or other Jurisdiction of
Incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
| 2350 Helen Street, North St. Paul, Minnesota |
|
55109 |
| (Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s
telephone number, including area code: (651) 770-2000
| Aetrium Incorporated |
| (Former name or former address if changed
since last report) |
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the follow provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
3.03. Material Modification to Rights of Security Holders.
The
information set forth in Item 5.03 regarding the Protective Amendment (as defined below) is incorporated into this Item 3.03 by
reference.
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Name
Change to “ATRM Holdings, Inc.”
On
December 5, 2014, Aetrium Incorporated (the “Company”) filed a Certificate of Amendment (the “Name Change Amendment”)
to its Amended and Restated Articles of Incorporation, as amended (the “Existing Charter”), with the Office of the
Minnesota Secretary of State to amend the Existing Charter to change the Company’s name to “ATRM Holdings, Inc.”
The Name Change Amendment was effective on December 5, 2014. The Company’s common stock continues to trade on the NASDAQ
Capital Market under the symbol “ATRM.” The Company’s outstanding common stock certificates are not affected
and do not need to be exchanged as a result of the Name Change Amendment.
New
Charter Reflecting Name Change and Protective Amendment
On
December 5, 2014, the Company filed Amended and Restated Articles of Incorporation (the “New Charter”) with the Office
of the Minnesota Secretary of State to reflect the Name Change Amendment and to amend the Existing Charter to include a protective
amendment designed to protect the tax benefits of the Company’s net operating loss carryforwards (the “Protective
Amendment”). The Protective Amendment was approved by the Company’s shareholders at the Company’s 2014 Annual
Meeting of Shareholders held on December 4, 2014 (the “Annual Meeting”), as described in more detail below.
The
Protective Amendment restricts certain transfers of the Company’s common stock in order to protect the tax benefits of the
Company’s net operating loss carryforwards. The Protective Amendment’s transfer restrictions generally restrict any
direct or indirect transfers of the Company’s common stock that increase the direct or indirect ownership of the Company’s
common stock by any Person (as defined in the Protective Amendment) from less than 4.99% to 4.99% or more of the Company’s
common stock, or increase the percentage of the Company’s common stock owned directly or indirectly by a Person owning or
deemed to own 4.99% or more of the Company’s common stock. Further, any direct or indirect transfer attempted in violation
of the Protective Amendment will be void as of the date of the prohibited transfer as to the purported transferee. The foregoing
description of the New Charter does not purport to be complete and is qualified in its entirety by reference to the full text
of the New Charter, which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item
5.07. Submission of Matters to a Vote of Security Holders.
The
following matters were submitted to a vote of the Company’s shareholders at the Annual Meeting held on December 4, 2014:
(i) the election of six directors to serve until the Company’s 2015 Annual Meeting of Shareholders and until their successors
are duly elected and qualify; (ii) the ratification of the appointment of Boulay PLLP as the Company’s independent registered
public accounting firm for the fiscal year ending December 31, 2014; (iii) a non-binding advisory resolution to approve the compensation
of the Company’s named executive officers; (iv) the approval of the Protective Amendment; (v) the approval of the Company’s
Tax Benefit Preservation Plan (a shareholder rights plan) designed to protect the tax benefits of the Company’s net operating
loss carryforwards; and (vi) the approval of the Company’s 2014 Incentive Plan. The number of shares of the Company’s
common stock outstanding and eligible to vote as of October 14, 2014, the record date for the Annual Meeting, was 1,186,473.
Each
of the matters submitted to a vote of the Company’s shareholders at the Annual Meeting was approved by the requisite vote
of the Company’s shareholders. Set forth below is the number of votes cast for, against or withheld, as well as the number
of abstentions and broker non-votes, as to each such matter, including a separate tabulation with respect to each nominee for
director, as applicable:
| Director Nominees | |
For | | |
Withheld | | |
Broker
Non-Votes | |
| Jeffrey E. Eberwein | |
| 625,247 | | |
| 7,478 | | |
| 402,794 | |
| Paul H. Askegaard | |
| 627,971 | | |
| 4,754 | | |
| 402,794 | |
| Morgan P. Hanlon | |
| 628,114 | | |
| 4,611 | | |
| 402,794 | |
| Alfred John Knapp, Jr. | |
| 628,095 | | |
| 4,630 | | |
| 402,794 | |
| Daniel M. Koch | |
| 628,040 | | |
| 4,685 | | |
| 402,794 | |
| Galen Vetter | |
| 628,095 | | |
| 4,630 | | |
| 402,794 | |
| Proposal 2 | |
For | | |
Against | | |
Abstain | | |
Broker
Non-Votes | |
| Ratification of the appointment of Boulay PLLP | |
| 1,018,058 | | |
| 13,655 | | |
| 3,806 | | |
| - | |
| Proposal 3 | |
For | | |
Against | | |
Abstain | | |
Broker
Non-Votes | |
| Advisory vote on compensation of named executive officers | |
| 618,193 | | |
| 14,195 | | |
| 337 | | |
| 402,794 | |
| Proposal 4 | |
For | | |
Against | | |
Abstain | | |
Broker
Non-Votes | |
| Approval of the Protective Amendment | |
| 628,331 | | |
| 4,323 | | |
| 71 | | |
| 402,794 | |
| Proposal 5 | |
For | | |
Against | | |
Abstain | | |
Broker
Non-Votes | |
| Approval of the Tax Benefit Preservation Plan | |
| 627,646 | | |
| 4,448 | | |
| 631 | | |
| 402,794 | |
| Proposal 6 | |
For | | |
Against | | |
Abstain | | |
Broker
Non-Votes | |
| Approval of the 2014 Incentive Plan | |
| 607,492 | | |
| 24,867 | | |
| 366 | | |
| 402,794 | |
Item
8.01. Other Events.
KBS
Builders, Inc. (“KBS Builders”), a wholly-owned subsidiary of the Company, is the debtor under an unsecured promissory
note, dated April 2, 2014 and amended on September 18, 2014, in the original principal amount of $5.5 million (the “KBS
Note”). The KBS Note was issued as partial consideration for the acquisition by KBS Builders of assets related to the business
of manufacturing, selling, and distributing modular housing units for residential and commercial use, as originally disclosed
in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on
April 4, 2014. On September 18, 2014, the KBS Note was amended to extend its maturity date from October 1, 2014 to December 1,
2014, as disclosed in the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2014. The principal and
interest under the KBS Note was due on December 1, 2014, and KBS Builders has not made the required payment to date. The Company
is in discussions with the noteholder regarding an extension of the KBS Note and is pursuing new financing to replace the KBS
Note.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | |
Description |
| | |
|
| 3.1 | |
Amended and Restated Articles of Incorporation. |
Forward-Looking
Statements
This
Current Report on Form 8-K includes “forward-looking statements”, as such term is used within the meaning of the Private
Securities Litigation Reform Act of 1995. These “forward-looking statements” are not based on historical fact and
involve assessments of certain risks, developments, and uncertainties in the Company’s business looking to the future. Such
forward-looking statements can be identified by the use of terminology such as “may”, “will”, “should”,
“expect”, “anticipate”, “estimate”, “intend”, “continue”, or “believe”,
or the negatives or other variations of these terms or comparable terminology. Forward-looking statements may include projections,
forecasts, or estimates of future performance and developments. Forward-looking statements contained in this Current Report on
Form 8-K are based upon assumptions and assessments that the Company believes to be reasonable as of the date hereof. Whether
those assumptions and assessments will be realized will be determined by future factors, developments, and events, which are difficult
to predict and may be beyond the Company’s control. Actual results, factors, developments, and events may differ materially
from those the Company assumed and assessed. Risks, uncertainties, contingencies, and developments, including those discussed
in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and those identified
in “Risk Factors” in the Company’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2014 and June
30, 2014 and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, could cause the Company’s
future operating results to differ materially from those set forth in any forward-looking statement. There can be no assurance
that any such forward-looking statement, projection, forecast or estimate contained can be realized or that actual returns, results,
or business prospects will not differ materially from those set forth in any forward-looking statement. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to
update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained
herein to reflect future results, events or developments.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
| |
Aetrium Incorporated |
| |
|
|
| Dated: December 8, 2014 |
By: |
/s/ Paul H.
Askegaard |
| |
Name: |
Paul H. Askegaard |
| |
Title: |
Chief Financial Officer |
EXHIBIT
INDEX
| Exhibit No. |
|
Description |
| |
|
|
| 3.1 |
|
Amended and Restated Articles of Incorporation. |
Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ATRM HOLDINGS, INC.
The following is
the Amended and Restated Articles of Incorporation of ATRM Holdings, Inc. (formerly, Aetrium Incorporated and previously, Automated
Electronic Technology, Inc.), which supersede the Restated Articles of Incorporation filed with the State of Minnesota Department
of State on July 29, 1987 and all amendments thereto.
ARTICLE
1
NAME
1.1 The
name of the corporation shall be: ATRM Holdings, Inc. (the “Corporation”).
ARTICLE
2
PURPOSE
2.1 The
Corporation shall have general business purposes in accordance with the Minnesota Statutes, Chapter 302A (the “Act”).
ARTICLE
3
POWERS
3.1 The
Corporation shall have all the powers granted or available under the Act.
ARTICLE
4
DURATION
4.1 The
duration of the Corporation shall be perpetual.
ARTICLE
5
REGISTERED
OFFICE
5.1 The
registered office of the Corporation shall be located at 2350 Helen Street, North Saint Paul, Minnesota 55109.
ARTICLE
6
CAPITAL
STOCK
6.1 Authorized
Shares. The aggregate number of shares which the Corporation shall have authority to issue shall be Three Million Two Hundred
Thousand (3,200,000), $0.001 par value per share, of which Three Million (3,000,000) shall be common voting shares and Two Hundred
Thousand (200,000) shall be undesignated shares. The Board of Directors shall have the authority to issue any or all such shares
and rights to shares in accordance with the Act. The common voting shares shall be of the same class and series with equal rights
and preferences unless the Board of Directors shall establish one or more separate classes or series. The undesignated shares shall
be issued in such classes or series and shall have such voting rights and preferences or restrictions, including without limitation,
rights, preferences and restrictions as to redemption, distributions and conversion, as the Board of Directors may establish.
6.2 Distribution
of Class/Series. The Board of Directors shall have the authority to issue shares of a class or series to holders of shares
of another class or series to effectuate share dividends, splits or conversion of its outstanding shares.
6.3 Voting
Rights. Each share of the Corporation shall be entitled to one (1) vote unless otherwise provided in the terms of the share.
Cumulative voting for members of the Board of Directors shall not be allowed.
6.4 Preemptive
Rights. The shareholders of the Corporation shall not have preemptive rights.
ARTICLE
7
BYLAWS
7.1 Bylaws.
The Board of Directors shall have the authority to adopt, amend , or repeal the Bylaws of the Corporation subject to the power
of the shareholders to adopt, amend or repeal such Bylaws.
ARTICLE
8
VOLUNTARY
TRANSFER OF CORPORATE ASSETS/MERGER OR EXCHANGE
8.1 Shareholder
Vote Requirement. A majority of all shareholders entitled to vote at any duly constituted meeting of the shareholders shall
have the power to authorize the Board of Directors (1) to sell, lease, exchange or otherwise dispose of all or substantially all
of the property and assets of the Corporation, including its good will, upon such terms and conditions and for such consideration
as the Board of Directors deems advisable or (2) to adopt or reject an agreement of a merger or exchange.
ARTICLE
9
AMENDMENT
TO ARTICLES
9.1 Shareholder
Vote Requirement. A majority of all shareholders entitled to vote at any duly constituted meeting of the shareholders shall
have the power to amend, alter or repeal these Amended and Restated Articles of Incorporation to the extent and the manner prescribed
by the laws of the State of Minnesota.
ARTICLE
10
INDEMNIFICATION
10.1 Indemnification.
The Corporation shall indemnify to the fullest extent authorized or permitted by law (as now or hereafter in effect) any person
made or threatened to be made a party to or witness in any threatened, pending, or completed civil, criminal, administrative, arbitration,
or investigative proceeding, including a proceeding by or in the right of the Corporation, by reason of the fact that he, his testator
or intestate is or was a director, officer or employee of the Corporation, or by reason of the fact that such director, officer
or employee, while a director, officer or employee of the Corporation, is or was serving at the request of the Corporation, or
whose duties as a director, officer or employee involve or involved service, as a director, officer, partner, trustee or agent
of another organization or employee benefit plan, against all judgments, penalties, fines, including, without limitation, excise
taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys’
fees and disbursements. The Corporation may but shall not be required to indemnify agents of the Corporation other than directors,
officers and employees to the fullest extent permitted by law as determined by the Board of Directors from time to time. Any repeal
or modification of this Article 10 shall be prospective only, and shall not adversely affect any right to indemnification or protection
of a director, officer or employee of the Corporation existing at the time of such repeal or modification.
ARTICLE
11
LIMITATION
ON LIABILITY
11.1 Limitation
on Liability of Directors. No director of the Corporation shall be personally liable to the Corporation or its shareholders
for monetary damages for breach of fiduciary duty by such director as a director; provided however, that this Article 11 shall
not eliminate or limit the liability of a director to the extent provided by applicable law (i) for any breach of the director’s
duty of loyalty to the Corporation or its shareholders, (ii) for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law, (iii) based upon the payment of an improper dividend or an improper acquisition of the
Corporation’s share under Section 302A.559 of the Act or upon violations of the state securities laws under Section 80A.23
of the Minnesota Statues, or (iv) for any transaction from which the director derived an improper personal benefit. If the Act
is amended after approval by the shareholders of this Article to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal
liability provided herein, shall be eliminated or limited to the fullest extent permitted by the Act, as so amended. Any repeal
or modification of this Article by the shareholders of the Corporation shall be prospective only, and shall not adversely affect
any right or protection of a director of the Corporation existing at the time of such repeal or modification.
ARTICLE
12
PROTECTION
OF TAX BENEFITS
12.1 Definitions.
As used in this Article 12, the following capitalized terms have the following meanings when used herein with initial capital letters
(and any references to any portions of Treas. Reg. § 1.382-2T shall include any successor provisions):
(i) “4.99-percent
Transaction” means any Transfer described in clause (i) or (ii) of Section 12.2 of this Article 12.
(ii) “4.99-percent
Shareholder” means a Person or group of Persons that is a “5-percent shareholder” of the corporation pursuant
to Treas. Reg. § 1.382-2T(g), as applied by replacing “5-percent” with “4.99-percent” and “five
percent” with “4.99 percent,” where applicable.
(iii) “Agent”
has the meaning set forth in Section 12.5 of this Article 12.
(iv) “Board
of Directors” means the board of directors of the Corporation.
(v) “Code”
means the United States Internal Revenue Code of 1986, as amended from time to time.
(vi) “Corporation
Security” or “Corporation Securities” means (i) any Stock, (ii) shares of preferred stock issued by the Corporation
(other than preferred stock described in § 1504(a)(4) of the Code), and (iii) warrants, rights, or options (including options
within the meaning of Treas. Reg. § 1.382-2T(h)(4)(v) or Treas. Reg. § 1.382-4(d)(9)) to purchase securities of the Corporation.
(vii) “Effective
Date” means the date of filing of these Amended and Restated Articles of Incorporation of the Corporation with the Office
of the Minnesota Secretary of State.
(viii) “Excess
Securities” has the meaning set forth in Section 12.4 of this Article 12.
(ix) “Expiration
Date” means the earliest of (i) the close of business on the date that is the third anniversary of the Effective Date, (ii)
the repeal of Section 382 of the Code or any successor statute if the Board of Directors determines that this Article 12 is no
longer necessary or desirable for the preservation of Tax Benefits, (iii) the close of business on the first day of a taxable year
of the Corporation as to which the Board of Directors determines that no Tax Benefits may be carried forward or (iv) such date
as the Board of Directors shall fix in accordance with paragraph (l) of this Article 12.
(x) “Percentage
Stock Ownership” means the percentage Stock Ownership interest of any Person or group (as the context may require) for purposes
of Section 382 of the Code as determined in accordance with Treas. Reg. § 1.382-2T(g), (h), (j) and (k) and Treas. Reg. §
1.382-4, or any successor provisions and other pertinent Internal Revenue Service guidance.
(xi) “Person”
means any individual, partnership, joint venture, limited liability company, firm, corporation, unincorporated association or organization,
trust or other entity or any group of such “Persons” having a formal or informal understanding among themselves to
make a “coordinated acquisition” of shares within the meaning of Treas. Reg. § 1.382-3(a)(1) or who are otherwise
treated as an “entity” within the meaning of Treas. Reg. § 1.382-3(a)(1), and shall include any successor (by
merger or otherwise) of any such entity or group.
(xii) “Prohibited
Distributions” means any and all dividends or other distributions paid by the Corporation with respect to any Excess Securities
received by a Purported Transferee.
(xiii) “Prohibited
Transfer” means any Transfer or purported Transfer of Corporation Securities to the extent that such Transfer is prohibited
and/or void under this Article 12.
(xiv) “Public
Group” has the meaning set forth in Treas. Reg. § 1.382-2T(f)(13).
(xv) “Purported
Transferee” has the meaning set forth in Section 12.4 of this Article 12.
(xvi) “Remedial
Holder” has the meaning set forth in Section 12.7 of this Article 12.
(xvii) “Stock”
means any interest that would be treated as “stock” of the Corporation pursuant to Treas. Reg. § 1.382-2T(f)(18).
(xviii) “Stock
Ownership” means any direct or indirect ownership of Stock, including any ownership by virtue of application of constructive
ownership rules, with such direct, indirect and constructive ownership determined under the provisions of Section 382 of the Code
and the Treasury Regulations thereunder, including, for the avoidance of doubt, any ownership whereby a Person owns Stock pursuant
to a “coordinated acquisition” treated as a single “entity” as defined in Treas. Reg. § 1.382-3(a)(1),
or such Stock is otherwise aggregated with Stock owned by such Person pursuant to the provisions of Section 382 of the Code and
the Treasury Regulations thereunder.
(xix) “Tax
Benefits” means the net operating loss carryforwards, capital loss carryforwards, general business credit carryforwards,
alternative minimum tax credit carryforwards and foreign tax credit carryforwards, as well as any loss or deduction attributable
to a “net unrealized built-in loss” of the Corporation or any direct or indirect subsidiary thereof, within the meaning
of Section 382 of the Code.
(xx) “Transfer”
means, any direct or indirect sale, transfer, assignment, conveyance, pledge or other disposition, event or occurrence or other
action taken by a Person, other than the Corporation, that alters the Percentage Stock Ownership of any Person or group. A Transfer
also shall include the creation or grant of an option (including an option within the meaning of Treas. Reg. § 1.382-4(d)).
For the avoidance of doubt, a Transfer shall not include the creation or grant of an option by the Corporation, nor shall a Transfer
include the issuance of Stock by the Corporation.
(xxi) “Transferee”
means any Person to whom Corporation Securities are Transferred.
(xxii) “Treasury
Regulations” or “Treas. Reg.” means the regulations, including temporary regulations or any successor regulations,
promulgated under the Code, as amended from time to time.
12.2 Transfer
and Ownership Restrictions. In order to preserve the Tax Benefits, from and after the Effective Date of this Article 12 any
attempted Transfer of Corporation Securities prior to the Expiration Date and any attempted Transfer of Corporation Securities
pursuant to an agreement entered into prior to the Expiration Date shall be prohibited and void ab initio to the extent
that, as a result of such Transfer (or any series of Transfers of which such Transfer is a part), either (i) any Person or Persons
would become a 4.99-percent Shareholder or (ii) the Percentage Stock Ownership in the Corporation of any 4.99-percent Shareholder
would be increased. The prior sentence is not intended to prevent Corporation Securities from being DTC-eligible and shall not
preclude the settlement of any transaction in Corporation Securities entered into through the facilities of a national securities
exchange; provided, however, that the Corporation Securities and parties involved in such transaction shall remain
subject to the provisions of this Article 12 in respect of such transaction.
12.3 Exceptions.
(i) Notwithstanding
anything to the contrary herein, Transfers to a Public Group (including a new Public Group created under Treas. Reg. § 1.382-2T(j)(3)(i))
shall be permitted.
(ii) The
restrictions set forth in Section 12.2 of this Article 12 shall not apply to an attempted Transfer that is a 4.99-percent Transaction
if the transferor or the Transferee obtains the written approval of the Board of Directors or a duly authorized committee thereof.
As a condition to granting its approval pursuant to this Section 12.3 of this Article 12, the Board of Directors may, in its discretion,
require (at the expense of the transferor and/or Transferee) an opinion of counsel selected by the Board of Directors that the
Transfer shall not result in a limitation on the use of the Tax Benefits as a result of the application of Section 382 of the Code;
provided that the Board of Directors may grant such approval notwithstanding the effect of such approval on the Tax Benefits
if it determines that the approval is in the best interests of the Corporation. The Board of Directors may grant its approval in
whole or in part with respect to such Transfer and may impose any conditions that it deems reasonable and appropriate in connection
with such approval, including, without limitation, restrictions on the ability of any Transferee to Transfer Stock acquired through
a Transfer. Approvals of the Board of Directors hereunder may be given prospectively or retroactively. The Board of Directors,
to the fullest extent permitted by law, may exercise the authority granted by this Article 12 through duly authorized officers
or agents of the Corporation. Nothing in this Section 12.3 of this Article 12 shall be construed to limit or restrict the Board
of Directors in the exercise of its fiduciary duties under applicable law.
12.4 Excess
Securities.
(i) No
employee or agent of the Corporation shall record any Prohibited Transfer, and the purported transferee of such a Prohibited Transfer
(the “Purported Transferee”) shall not be recognized as a shareholder of the Corporation for any purpose whatsoever
in respect of the Corporation Securities which are the subject of the Prohibited Transfer (the “Excess Securities”).
The Purported Transferee shall not be entitled, with respect to such Excess Securities, to any rights of shareholders of the Corporation,
including, without limitation, the right to vote such Excess Securities and to receive dividends or distributions, whether liquidating
or otherwise, in respect thereof, if any, and the Excess Securities shall be deemed to remain with the transferor unless and until
the Excess Securities are transferred to the Agent pursuant to Section 12.5 of this Article 12 or until an approval is obtained
under Section 12.3 of this Article 12. After the Excess Securities have been acquired in a Transfer that is not a Prohibited Transfer,
the Corporation Securities shall cease to be Excess Securities. For this purpose, any Transfer of Excess Securities not in accordance
with the provisions of this Section 12.4 or Section 12.5 of this Article 12 shall also be a Prohibited Transfer.
(ii) The
Corporation may require as a condition to the registration of the Transfer of any Corporation Securities or the payment of any
distribution on any Corporation Securities that the proposed Transferee or payee furnish to the Corporation all information reasonably
requested by the Corporation with respect to its direct or indirect ownership interests in such Corporation Securities. The Corporation
may make such arrangements or issue such instructions to its stock transfer agent as may be determined by the Board of Directors
to be necessary or advisable to implement this Article 12, including, without limitation, authorizing such transfer agent to require
an affidavit from a Purported Transferee regarding such Person’s actual and constructive ownership of Stock and other evidence
that a Transfer will not be prohibited by this Article 12 as a condition to registering any transfer.
12.5 Transfer
to Agent. If the Board of Directors determines that a Transfer of Corporation Securities constitutes a Prohibited Transfer,
then, upon written demand by the Corporation sent within thirty days of the date on which the Board of Directors determines that
the attempted Transfer would result in Excess Securities, the Purported Transferee shall transfer or cause to be transferred any
certificate or other evidence of ownership of the Excess Securities within the Purported Transferee’s possession or control,
together with any Prohibited Distributions, to an agent designated by the Board of Directors (the “Agent”). The Agent
shall thereupon sell to a buyer or buyers, which may include the Corporation, the Excess Securities transferred to it in one or
more arm’s-length transactions (on the public securities market on which such Excess Securities are traded, if possible,
or otherwise privately); provided, however, that any such sale must not constitute a Prohibited Transfer and provided,
further, that the Agent shall effect such sale or sales in an orderly fashion and shall not be required to effect any such
sale within any specific time frame if, in the Agent’s discretion, such sale or sales would disrupt the market for the Corporation
Securities or otherwise would adversely affect the value of the Corporation Securities. If the Purported Transferee has resold
the Excess Securities before receiving the Corporation’s demand to surrender Excess Securities to the Agent, the Purported
Transferee shall be deemed to have sold the Excess Securities for the Agent, and shall be required to transfer to the Agent any
Prohibited Distributions and proceeds of such sale, except to the extent that the Corporation grants written permission to the
Purported Transferee to retain a portion of such sale proceeds not exceeding the amount that the Purported Transferee would have
received from the Agent pursuant to Section 12.6 of this Article 12 if the Agent rather than the Purported Transferee had resold
the Excess Securities.
12.6 Application
of Proceeds and Prohibited Distributions. The Agent shall apply any proceeds of a sale by it of Excess Securities and, if the
Purported Transferee has previously resold the Excess Securities, any amounts received by it from a Purported Transferee, together,
in either case, with any Prohibited Distributions, as follows: (i) first, such amounts shall be paid to the Agent to the extent
necessary to cover its costs and expenses incurred in connection with its duties hereunder; (ii) second, any remaining amounts
shall be paid to the Purported Transferee, up to the amount paid by the Purported Transferee for the Excess Securities (or the
fair market value at the time of the Transfer, in the event the purported Transfer of the Excess Securities was, in whole or in
part, a gift, inheritance or similar Transfer) which amount (or fair market value) shall be determined at the discretion of the
Board of Directors; and (iii) third, any remaining amounts shall be paid to one or more organizations selected by the Board of
Directors which is described under Section 501(c)(3) of the Code (or any comparable successor provision) and contributions to which
are eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2552 of the Code. The Purported Transferee of Excess Securities
shall have no claim, cause of action or any other recourse whatsoever against any transferor of Excess Securities. The Purported
Transferee’s sole right with respect to such shares shall be limited to the amount payable to the Purported Transferee pursuant
to this Section 12.6 of this Article 12. In no event shall the proceeds of any sale of Excess Securities pursuant to this Section
12.6 of this Article 12 inure to the benefit of the Corporation or the Agent, except to the extent used to cover costs and expenses
incurred by Agent in performing its duties hereunder.
12.7 Modification
of Remedies for Certain Indirect Transfers. In the event of any Transfer which does not involve a transfer of Corporation Securities
within the meaning of Minnesota law but which would cause a 4.99-percent Shareholder to violate a restriction on Transfers provided
for in this Article 12, the application of Sections 12.5 and 12.6 of this Article 12 shall be modified as described in this Section
12.7 of this Article 12. In such case, no such 4.99-percent Shareholder shall be required to dispose of any interest that is not
a Corporation Security, but such 4.99-percent Shareholder and/or any Person whose ownership of Corporation Securities is attributed
to such 4.99-percent Shareholder (such 4.99-percent Shareholder or other Person, a “Remedial Holder”) shall be deemed
to have disposed of and shall be required to dispose of sufficient Corporation Securities (which Corporation Securities shall be
disposed of in the inverse order in which they were acquired) to cause such 4.99-percent Shareholder, following such disposition,
not to be in violation of this Article 12. Such disposition shall be deemed to occur simultaneously with the Transfer giving rise
to the application of this provision, and such number of Corporation Securities that are deemed to be disposed of shall be considered
Excess Securities and shall be disposed of through the Agent as provided in Sections 12.5 and 12.6 of this Article 12, except that
the maximum aggregate amount payable to a Remedial Holder in connection with such sale shall be the fair market value of such Excess
Securities at the time of the purported Transfer. A Remedial Holder shall not be entitled, with respect to such Excess Securities,
to any rights of shareholders of the Corporation, including, without limitation, the right to vote such Excess Securities and to
receive dividends or distributions, whether liquidating or otherwise, in respect thereof, if any, following the time of the purported
Transfer. All expenses incurred by the Agent in disposing of such Excess Stock shall be paid out of any amounts due such 4.99-percent
Shareholder or such other Person. The purpose of this Section 12.7 of this Article 12 is to extend the restrictions in Sections
12.2 and 12.5 of this Article 12 to situations in which there is a 4.99-percent Transaction without a direct Transfer of Corporation
Securities, and this Section 12.7 of this Article 12, along with the other provisions of this Article 12, shall be interpreted
to produce the same results, with differences as the context requires, as a direct Transfer of Corporation Securities.
12.8 Legal
Proceedings; Prompt Enforcement. If the Purported Transferee fails to surrender the Excess Securities or the proceeds of a
sale thereof to the Agent within thirty days from the date on which the Corporation makes a written demand pursuant to Section
12.5 of this Article 12 (whether or not made within the time specified in Section 12.5 of this Article 12), then the Corporation
may take such actions as it deems appropriate to enforce the provisions hereof, including the institution of legal proceedings
to compel the surrender. Nothing in this Section 12.8 of this Article 12 shall (i) be deemed inconsistent with any Transfer of
the Excess Securities provided in this Article 12 being void ab initio, (ii) preclude the Corporation in its discretion
from immediately bringing legal proceedings without a prior demand or (iii) cause any failure of the Corporation to act within
the time periods set forth in Section 12.5 of this Article 12 to constitute a waiver or loss of any right of the Corporation under
this Article 12. The Board of Directors may authorize such additional actions as it deems advisable to give effect to the provisions
of this Article 12.
12.9 Liability.
To the fullest extent permitted by law, any shareholder subject to the provisions of this Article 12 who knowingly violates the
provisions of this Article 12 and any Persons controlling, controlled by or under common control with such shareholder shall be
jointly and severally liable to the Corporation for, and shall indemnify and hold the Corporation harmless against, any and all
damages suffered as a result of such violation, including but not limited to damages resulting from a reduction in, or elimination
of, the Corporation’s ability to utilize its Tax Benefits, and attorneys’ and auditors’ fees incurred in connection
with such violation.
12.10 Obligation
to Provide Information. As a condition to the registration of the Transfer of any Stock, any Person who is a beneficial, legal
or record holder of Stock, and any proposed Transferee and any Person controlling, controlled by or under common control with the
proposed Transferee, shall provide such information as the Corporation may request from time to time in order to determine compliance
with this Article 12 or the status of the Tax Benefits of the Corporation.
12.11 Legends.
The Board of Directors may require that any certificates issued by the Corporation evidencing ownership of shares of Stock that
are subject to the restrictions on transfer and ownership contained in this Article 12 bear the following legend:
“THE AMENDED AND RESTATED ARTICLES
OF INCORPORATION (THE “ARTICLES OF INCORPORATION”) OF THE CORPORATION CONTAIN RESTRICTIONS PROHIBITING THE TRANSFER
(AS DEFINED IN THE ARTICLES OF INCORPORATION) OF STOCK OF THE CORPORATION (INCLUDING THE CREATION OR GRANT OF CERTAIN OPTIONS,
RIGHTS AND WARRANTS) WITHOUT THE PRIOR AUTHORIZATION OF THE BOARD OF DIRECTORS OF THE CORPORATION (THE “BOARD OF DIRECTORS”)
IF SUCH TRANSFER AFFECTS THE PERCENTAGE OF STOCK OF THE CORPORATION (WITHIN THE MEANING OF SECTION 382 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE “CODE”) AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER) THAT IS TREATED AS OWNED
BY A 4.99-PERCENT SHAREHOLDER (AS DEFINED IN THE ARTICLES OF INCORPORATION). IF THE TRANSFER RESTRICTIONS ARE VIOLATED, THEN THE
TRANSFER WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEREE OF THE STOCK WILL BE REQUIRED TO TRANSFER EXCESS SECURITIES (AS DEFINED
IN THE ARTICLES OF INCORPORATION) TO THE CORPORATION’S AGENT. IN THE EVENT OF A TRANSFER WHICH DOES NOT INVOLVE SECURITIES
OF THE CORPORATION WITHIN THE MEANING OF THE Minnesota Business Corporation Act
(“SECURITIES”) BUT WHICH WOULD VIOLATE THE TRANSFER RESTRICTIONS, THE PURPORTED TRANSFEREE (OR THE RECORD OWNER) OF
THE SECURITIES THAT VIOLATE THE TRANSFER RESTRICTIONS WILL BE REQUIRED TO TRANSFER SUFFICIENT SECURITIES PURSUANT TO THE TERMS
PROVIDED FOR IN THE ARTICLES OF INCORPORATION TO CAUSE THE 4.99-PERCENT SHAREHOLDER TO NO LONGER BE IN VIOLATION OF THE TRANSFER
RESTRICTIONS. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS CERTIFICATE A COPY OF THE ARTICLES OF
INCORPORATION CONTAINING THE ABOVE-REFERENCED TRANSFER RESTRICTIONS UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE
OF BUSINESS.”
The Board of Directors may also require that any certificates
issued by the Corporation evidencing ownership of shares of Stock that are subject to conditions imposed by the Board of Directors
under Section 12.3 of this Article 12 also bear a conspicuous legend referencing the applicable restrictions.
12.12 Authority
of Board of Directors.
(i) The
Board of Directors shall have the power to determine all matters necessary for assessing compliance with this Article 12, including,
without limitation, (1) the identification of 4.99-percent Shareholders, (2) whether a Transfer is a 4.99-percent Transaction or
a Prohibited Transfer, (3) the Percentage Stock Ownership in the Corporation of any 4.99-percent Shareholder, (4) whether an instrument
constitutes a Corporation Security, (5) the amount (or fair market value) due to a Purported Transferee pursuant to Section 12.6
of this Article 12, and (6) any other matters which the Board of Directors determines to be relevant; and the good faith determination
of the Board of Directors on such matters shall be conclusive and binding for all the purposes of this Article 12. In addition,
the Board of Directors may, to the extent permitted by law, from time to time establish, modify, amend or rescind by-laws, regulations
and procedures of the Corporation not inconsistent with the provisions of this Article 12 for purposes of determining whether any
Transfer of Corporation Securities would jeopardize or endanger the Corporation’s ability to preserve and use the Tax Benefits
and for the orderly application, administration and implementation of this Article 12.
(ii) Nothing
contained in this Article 12 shall limit the authority of the Board of Directors to take such other action to the extent permitted
by law as it deems necessary or advisable to protect the Corporation and its shareholders in preserving the Tax Benefits. Without
limiting the generality of the foregoing, in the event of a change in law making one or more of the following actions necessary
or desirable, the Board of Directors may, by adopting a written resolution, (1) accelerate the Expiration Date, (2) modify the
ownership interest percentage in the Corporation or the Persons or groups covered by this Article 12, (3) modify the definitions
of any terms set forth in this Article 12 or (4) modify the terms of this Article 12 as appropriate, in each case, in order to
prevent an ownership change for purposes of Section 382 of the Code as a result of any changes in applicable Treasury Regulations
or otherwise; provided, however, that the Board of Directors shall not cause there to be such acceleration or modification
unless it determines, by adopting a written resolution, that such action is reasonably necessary or advisable to preserve the Tax
Benefits or that the continuation of these restrictions is no longer reasonably necessary for the preservation of the Tax Benefits.
Shareholders of the Corporation shall be notified of such determination through a filing with the Securities and Exchange Commission
or such other method of notice as the Secretary of the Corporation shall deem appropriate.
(iii) In
the case of an ambiguity in the application of any of the provisions of this Article 12, including any definition used herein,
the Board of Directors shall have the power to determine the application of such provisions with respect to any situation based
on its reasonable belief, understanding or knowledge of the circumstances. In the event this Article 12 requires an action by the
Board of Directors but fails to provide specific guidance with respect to such action, the Board of Directors shall have the power
to determine the action to be taken so long as such action is not contrary to the provisions of this Article 12. All such actions,
calculations, interpretations and determinations which are done or made by the Board of Directors in good faith shall be conclusive
and binding on the Corporation, the Agent, and all other parties for all other purposes of this Article 12. The Board of Directors
may delegate all or any portion of its duties and powers under this Article 12 to a committee of the Board of Directors as it deems
necessary or advisable and, to the fullest extent permitted by law, may exercise the authority granted by this Article 12 through
duly authorized officers or agents of the Corporation. Nothing in this Article 12 shall be construed to limit or restrict the Board
of Directors in its exercise of its fiduciary duties under applicable law.
12.13 Reliance.
To the fullest extent permitted by law, the Corporation and the members of the Board of Directors shall be fully protected in relying
in good faith upon the information, opinions, reports or statements of the chief executive officer, the chief financial officer,
the chief accounting officer or the corporate controller of the Corporation and the Corporation’s legal counsel, independent
auditors, transfer agent, investment bankers or other employees and agents in making the determinations and findings contemplated
by this Article 12. The members of the Board of Directors shall not be responsible for any good faith errors made in connection
therewith. For purposes of determining the existence and identity of, and the amount of any Corporation Securities owned by, any
shareholder, the Corporation is entitled to rely on the existence and absence of filings of Schedule 13D or 13G under the Securities
and Exchange Act of 1934, as amended (or similar filings), as of any date, subject to its actual knowledge of the ownership of
Corporation Securities.
12.14 Benefits
of this Article 12. Nothing in this Article 12 shall be construed to give to any Person other than the Corporation or the Agent
any legal or equitable right, remedy or claim under this Article 12. This Article 12 shall be for the sole and exclusive benefit
of the Corporation and the Agent.
12.15 Severability.
The purpose of this Article 12 is to facilitate the Corporation’s ability to maintain or preserve its Tax Benefits. If any
provision of this Article 12 or the application of any such provision to any Person or under any circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Article 12.
12.16 Waiver.
With regard to any power, remedy or right provided herein or otherwise available to the Corporation or the Agent under this Article
12, (i) no waiver will be effective unless expressly contained in a writing signed by the waiving party and (ii) no alteration,
modification or impairment will be implied by reason of any previous waiver, extension of time, delay or omission in exercise or
other indulgence.