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Bylaws

ARTICLE 1: PURPOSES AND POWERS

This Corporation is organized and shall be operated exclusively for the purposes set forth in Article V of the Articles of Incorporation of this Corporation. All of the purposes and powers of this Corporation shall be exercised only so that this Corporation's operations shall be exclusively within the contemplation of Section 501(c)(6) of the Internal Revenue Code of 1986.

ARTICLE 2: REGISTERED OFFICE

The registered office of this Corporation, at which the general business of this Corporation shall be transacted and where the records of this Corporation shall be kept, shall be at such place in the State of Minnesota as shall be fixed from time to time by duly adopted resolutions of the Board of Directors. Until otherwise fixed by the Board of Directors, the registered office shall be at 5250 West 73rd Street, Edina, Minnesota 55439.

ARTICLE 3: MEMBERSHIP

Section 3.1 Classes

There shall be two classes of members, (A) Distributor Members, and (B) Associate Members.

Distributor Members

Distributor Members shall be business entities (such as corporations, partnerships, or sole proprietorships) that meet all the following criteria:

  • Are primarily engaged in the distribution of fluid sealing products and/or fluid sealing services to industry, institutions, end users, and/or original equipment manufacturers, and who have engaged in such business for a period of at least two years prior to application for membership in this Corporation; and Are independent distributors and not subsidiaries or affiliates of any manufacturer; and Act as distributors for products manufactured by one or more manufacturers of fluid sealing products; and Maintain their own inventory of at least $35,000 at cost of fluid sealing products. Fluid sealing products are defined as mechanical or hydraulic seals, packings or gaskets; and Maintain minimum annual gross sales of at least $200,000 of fluid sealing products and/or fluid sealing services, or maintain a minimum of twenty-five percent of annual gross sales of products purchased complete for resale from a sealing product manufacturer.
Associate Members

Associate Members shall be business entities (such as corporations, partnerships and sole proprietorships, but not to include manufacturers' representatives) that sell fluid sealing products or have a department or division that sells fluid sealing products, primarily through distributors.

Section 3.2 Voting Members

Only Distributor Members of this Corporation shall have voting rights, with one vote per Distributor Member. Associate Members shall have no voting rights. The application for membership shall designate the natural person who shall exercise the voting rights for each Distributor Member. The Distributor Member may change the designated natural person who may exercise such voting rights on behalf of the Distributor Member by filing with the Secretary of this Corporation a Change of Designation form, which form shall be available at the registered office of the Corporation. The Change of Designation form must be on file with the Secretary of this Corporation prior to the exercise of any voting rights by the person designated on the form.

Section 3.3 Admission of Members

Any business entity that meets the membership criteria set forth in Article 3, Section 3.1 A or B may apply for membership in the Corporation by completing an Application form, which form shall be available at the registered office of the Corporation. The completed Application form, together with the applicable Application Fee (as set forth on the then-current fee schedule for this Corporation) shall be submitted to the Chairman of the Membership Committee. The Corporation's Membership Committee will promptly review the Application form to ensure compliance with the membership criteria set forth in these Bylaws. Upon acceptance of the applicant by the Corporation's Membership Committee and upon payment of the applicable Annual Membership Dues (as set forth on the then-current fee schedule for this Corporation), the applicant shall be duly admitted as a member of this Corporation.

Section 3.4 Application Fee and Annual Membership Dues

The Board of Directors shall have the authority to determine the applicable Application Fee, the applicable Annual Membership Dues and any other payments to be made by the members of this Corporation from time to time. The membership year for the members of this Corporation shall be the same as the fiscal year (December 31) of this Corporation.

Section 3.5 Honorary Members

The Board of Directors may confer honorary membership on any business entity or individual based upon such criteria, and with such voting rights, as the Board of Directors shall from time to time determine.

Section 3.6 Interest in Property

The members of this Corporation shall not have any right, title or interest in the real or personal property of this Corporation.

Section 3.7 Resignation

Any member may resign its membership at any time by giving written notice to the Secretary of the Corporation. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any member who resigns its membership shall pay any delinquent Application Fee, Membership Dues or other payments due this Corporation, and shall not be entitled to a refund of any fee, dues or other payments made to this Corporation.

Section 3.8 Termination

Any member may be terminated for failure to meet the membership criteria hereinbefore specified, for failure to pay Annual Membership Dues or other amounts assessed against members for a period of sixty days following the due date, or for conduct by a member which is detrimental to the purposes and policies of this Corporation. The termination decision shall be made by a majority vote of a quorum of the Board of Directors and, in that event, the member shall be provided with not less than sixty days prior written notice of the proposed termination, the reasons for it, and the procedure for appealing the proposed termination. The member shall have an opportunity to be heard by a quorum of the Membership Committee, orally or in writing, not less than thirty days prior to the effective date of the proposed termination. If the member avails itself of the opportunity to be heard by the Membership Committee, the Membership Committee shall review the termination decision and, by a majority of the quorum of the Membership Committee, shall either confirm the termination as of the effective date or bring the matter before the Board of Directors for reconsideration. The termination shall not take effect until confirmed by a majority vote of a quorum of the Membership Committee or by a majority vote of a quorum of the Board of Directors after reconsideration.
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ARTICLE 4: MEETINGS OF MEMBERS

Section 4.1 Annual Meeting

The annual meeting of the members of this Corporation for the election of directors, the presentation of reports on the activities and financial condition of this Corporation, and the transaction of such other business as may properly come before the meeting, shall be held at such time in the fall of each year as may be designated from time to time by the Board of Directors and at the place, within or without the State of Minnesota, designated from time to time by the Board of Directors.

Section 4.2 Special Meetings

Special meetings of the members of this Corporation may be called at any time (a) by the President, (b) by the Board of Directors, or (c) upon written request of at least ten percent of the members of this Corporation. Any party entitled to call a special meeting of the members may make written request to the Secretary to call the meeting, and the Secretary shall then give written notice of the meeting, setting forth the time, place and purpose thereof, to be held no later than sixty days after receiving the request. If the Secretary fails to give notice of the meeting within thirty days from the date on which the request is received by the Secretary, the person or persons who requested the meeting may fix the time and place of the meeting and give written notice thereof in the manner provided in Section 4.3 of these Bylaws. If notice of a special meeting is given by the members, the meeting shall be held in the county where the registered office of the Corporation is located. The business transacted at a special meeting is limited to the purposes stated in the notice of the meeting.

Section 4.3 Notice

Written notice of each meeting of the members, stating the time, place and purpose thereof, shall be mailed, postage prepaid, not less than fifteen nor more than sixty days before the meeting, excluding the day of the meeting, to each member of this Corporation at its last known address. Notice of any meeting at which members may vote by proxy shall so inform the members and shall describe the procedure for appointing proxies. Any member may waive notice of a meeting before, at or after the meeting, orally, in writing, or by attendance. Attendance at a meeting is deemed a waiver unless the member objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened, or objects before a vote on an item of business because the item may not lawfully be considered at that meeting and the member does not participate in the consideration of the item at that meeting.

Section 4.4 Members List for Meeting

The Board of Directors shall fix a date not more than sixty days before the date of a meeting of the members as the date for determination of the members entitled to notice of and entitled to vote at the meeting. If the Board of Directors fails to set such a date, the date shall be the sixtieth day before the date of the meeting. After fixing a record date for a meeting, the Secretary shall prepare a list of the names (in alphabetical order) and the addresses of each member entitled to vote at the meeting. Beginning two business days after notice of the meeting is given, the list shall be available at the principal office of this Corporation for inspection and copying on written demand by any member (or the agent or attorney of any member), at the member's expense, for the sole purpose of communication with other members concerning the meeting. Fourteen days prior to the date of the meeting, the Secretary shall revise the list of members entitled to vote to include the names and addresses of all new members who are entitled to vote. Only members who are Distributor Members (and Honorary Members entitled to vote) on the date fourteen days prior to the date of the meeting are entitled to vote at that meeting of members. The list (as revised) shall be made available through the date of the meeting and at the end of the meeting.

Section 4.5 Voting Quorum

At all meetings of the members, each member with voting rights shall be entitled to cast one vote on any question coming before the meeting. Voting members may vote by proxy. Cumulative voting for the election of directors or otherwise is prohibited. The presence of ten percent of the members entitled to vote in person or by proxy shall constitute a quorum at any meeting thereof. The members present and entitled to vote at any meeting, although less than a quorum, may adjourn the meeting from time to time. A majority vote of the members present and entitled to vote at any meeting at which a quorum is present shall be sufficient to transact any business. When any meeting of the members is adjourned to another time and place, notice of the adjourned meeting need not be given other than by announcement at the meeting at which adjournment is taken.

Section 4.6 Written Action

Any action that may be taken at a meeting of the members may be taken without a meeting by written ballot in accordance with the procedure set forth in Minnesota Statutes, section 317A.447.
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ARTICLE 5: DIRECTORS

Section 5.1 Number and Method of Election

The Board of Directors shall consist of no less than three and no more than nine natural persons, in addition to three Officers who will serve as voting, ex-officio members of the Board. Only the natural person entitled to vote for a Distributor Member or a natural person who is either an Honorary Member entitled to vote or the natural person entitled to vote for an Honorary Member may be a director of this Corporation. The members of the Board of Directors, not to include the three officers, shall be elected by the members entitled to vote at each annual meeting.

Section 5.2 Terms

Except as otherwise provided in Section 5.1, each director of this Corporation shall be elected to serve for a term of three years. The members of the Board of Directors shall be divided into three classes, equal in number, so that the terms of office of three of the members of the Board of Directors shall expire each year. A director shall hold office for the term for which he was elected and until the end of the meeting at which his successor has been elected and until such successor has qualified, or until the director's prior death, resignation, removal or election to other officership. Any director may at any time be removed with or without cause by the voting members. Any vacancy occurring because of the death, resignation, removal or election to other officership of a director may be filled by the Board of Directors for the unexpired term of such director. Any vacancy occurring because of an increase in the number of members of the Board of Directors shall be filled by the voting members.

Section 5.3 Honorary Directors

The Board of Directors may, from time to time elect one or more honorary directors of this Corporation who shall be advisory members of the Board of Directors of this Corporation. Any such election shall be for such term and based on such criteria as the Board of Directors from time to time deems appropriate. All honorary directors shall be nonvoting directors of this Corporation.
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ARTICLE 6: MEETINGS OF THE BOARD OF DIRECTORS

Section 6.1 Annual Meetings

The annual meeting of the Board of Directors for the purpose of electing officers and transacting such other business as may properly come before the meeting shall be held immediately prior to the annual meeting of the members of this Corporation at the time and place, within or without the State of Minnesota, designated from time to time by the Board of Directors.

Section 6.2 Other Meetings

Other meetings of the Board of Directors may be held at such time and place as are announced at a previous meeting of the Board Of Directors. Meetings of the Board of Directors may also be called at any time (a) by the President, (b) by the Board of Directors, and (c) upon the written request of three or more members of the Board of Directors. Anyone entitled to call a meeting of the Board of Directors may make a written request to the Secretary to call the meeting, and the Secretary shall give notice of the meeting, setting forth the time, place and purpose thereof, to be held between five and thirty days after receiving the request. If the Secretary fails to give notice of the meeting within seven days from the day on which the request was made, the person or persons who requested the meeting may fix the time and place of the meeting and give notice in the manner hereinafter provided.

Section 6.3 Notice of Meeting

Written notice of each meeting of the Board of Directors for which written notice is required, and of each annual meeting, stating the time, place, and purpose thereof shall be mailed, postage prepaid, not less than five nor more than thirty days before the meeting, excluding the day of the meeting, to each director at his address according to the last available records of this Corporation. Any director may waive notice of a meeting before, at or after the meeting, orally, in writing, or by attendance. Attendance at a meeting is deemed a waiver unless the director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and the director does not participate in the meeting.

Section 6.4 Quorum and Voting

The presence of a majority of the members of the Board of Directors shall constitute a quorum at any meeting thereof, but the directors present at any meeting, although less than a quorum, may adjourn the meeting from time to time. At all meetings of the Board of Directors, each director shall be entitled to cast one vote on any question coming before the meeting. A majority vote of the directors present at any meeting, if there is a quorum, shall be sufficient to transact any business, unless a greater number of votes is required by law or these Bylaws. A director shall not appoint a proxy for himself or vote by proxy at a meeting of the Board of Directors. A director who is present at a meeting of the Board of Directors when an action is taken is presumed to have assented to the action unless the director votes against the action or is prohibited from voting on the action.

Section 6.5 Adjourned Meeting

When a meeting of the Board of Directors is adjourned to another time or place, notice of the adjourned meeting need not be given other than by announcement at the meeting at which adjournment is taken.

Section 6.6 Written Action

Any action that could be taken at a meeting of the Board of Directors may be taken by written action signed by all of the directors.

Section 6.7 Director Conflicts of Interest

This Corporation shall not enter into any contract or transaction with (a) one or more of its directors, (b) a director of a related organization (within the meaning of Minnesota Statutes, section 317A.011, subd. 18), or (c) an organization in or of which a director is a director, officer or legal representative or has a material financial interest; unless the material facts as to the contract or transaction and as to the director's interest are fully disclosed or known to the Board of Directors, and the Board of Directors authorizes, approves, or ratifies the contract or transaction in good faith by the affirmative vote of a majority of the directors (without counting the interested director), at a meeting at which there is a quorum without counting the interested director. Failure to comply with the provisions of this Section 6.7 shall not invalidate any contract or transaction to which this Corporation is a party.
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ARTICLE 7: OFFICERS

Section 7.1 Tenure of Office

The officers of this Corporation shall be a President, a Vice President and a Treasurer, and such other officers as the Board of Directors may from time to time designate. Officers shall be elected by the Board of Directors from the group of existing directors to serve for terms of one year and until their respective successors are chosen and have qualified. Any officer may at any time be removed by the Board of Directors with or without cause. Only the natural persons designated to vote for the Distributor Members of this Corporation may be officers of the Corporation.

Section 7.2 Succession of Officers

At the annual meeting of the Board of Directors, the Board will elect members from their ranks to be Treasurer, Vice President, and President for the following year. Terms are for one year, but may be renewed for one additional year at the discretion of the Board.  The outgoing President will become the Immediate Past President, and will hold a non-voting position as an honorary member of the Board. If an officer vacancy develops, the Board will call a special vote of the Board to elect a new Officer to fill the vacated position.

Section 7.3 President

The President shall be the chief executive officer of this Corporation. He shall preside at all meetings of the Board of Directors. He shall be responsible for the general supervision, direction and management of the affairs of this Corporation. He may execute on behalf of this Corporation all contracts, deeds, conveyances and other instruments in writing which may be required or authorized by the Board of Directors for the proper and necessary transaction of the business of this Corporation.

Section 7.4 Vice President

The Vice President shall perform the duties of the President in case of the latter's absence or disability. Provided that the President has delegated specific authority to the Vice President, the execution by the Vice President on the behalf of this Corporation of any instrument shall have the same force and effect as if it were executed on behalf of this Corporation by the President.

Section 7.5 Treasurer

The Treasurer shall be responsible for maintaining accurate financial records for this Corporation and safeguarding the assets of this Corporation. He shall present a report of this Corporation's financial transactions and status to the Board of Directors at its annual meeting, and shall from time to time make such other reports to the Board of Directors as it may require. The Treasurer shall perform such other duties as may be assigned to him from time to time by the Board of Directors.

Section 7.6 Executive Director

The Executive Director shall perform such duties and have such powers as shall be specified, from time to time, by Resolution of the Board of Directors, which may include, but not be limited to, attending all meetings of the Board of Directors and all meetings of the Members, recording all the proceedings of such meetings of the Board to be kept for that purpose, having custody of the Association funds and securities donated to the Association, keeping full and accurate accounts of receipts and disbursements and books belonging to the Association, depositing all monies and other valuable effects in the name and to the credit of the Association in such depositories as may be designated by the Board of Directors, disbursing the funds of the Association subject to the approval of the Treasurer and as may be ordered by the Board of Directors, taking proper vouchers for such disbursements and rendering to the President and the Board of Directors an account of all such transactions of the financial condition of the Association when so requested by the Board.

The Executive Director shall serve as the Secretary of the Association for all purposes set forth under the laws of the State of Minnesota.

The Executive Director shall be appointed by the Board of Directors, and shall serve at the pleasure of the Board, and will serve as an ex officio, non-voting member of the Association Board of Directors.

Section 7.7 Additional Powers

Any officer of this Corporation, in addition to the powers conferred upon him by these Bylaws, shall have such powers and perform such additional duties as may be prescribed from time to time by the Board of Directors.
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ARTICLE 8: COMMITTEES

Section 8.1 Membership Committee

The Board of Directors shall designate a Membership Committee composed of at least three natural persons who are not directors of the Corporation. The Board of Directors shall also appoint a chairman of the Membership Committee who is a director of the Corporation. The chairman shall be entitled to participate in all meetings of the Membership Committee and vote upon all issues which concern the Membership Committee, with the exception of a member's appeal of the Board of Directors decision to terminate the member. The presence of a majority of the persons on the Membership Committee entitled to vote shall constitute a quorum at any meeting thereof. The Membership Committee (but excluding the chairman) shall also consider a member's appeal of the Board of Directors decision to terminate the member, and a majority vote of a quorum of the Membership Committee has the authority to confirm the termination decision or bring the matter before the Board of Directors for reconsideration. The Membership Committee shall advise the Board of Directors, the Officers and the members of the Corporation on all issues pertaining to membership in this Corporation.

Section 8.2 Authority

The Board of Directors may act by and through such other committees as may be specified in resolutions adopted by a majority of the members of the Board of Directors. Each such committee shall have such duties and responsibilities as are granted to it from time to time by the Board of Directors. Each such committee shall at all times be subject to the control and direction of the Board of Directors. Committee members, other than members of the Executive Committee, need not be Directors.

Section 8.3 Executive Committee

The Board of Directors may designate an Executive Committee composed of at least three directors designated by the Board of Directors. The Executive Committee shall have the authority of the Board of Directors in the management of the business of this Corporation in the interval between meetings of the Board of Directors, and the Executive Committee shall at all times be subject to the control and direction of the Board of Directors.

Section 8.4 Meetings and Voting

Meetings of each committee may be held at such time and place as are announced at a previous meeting of the committee. Meetings of any committee may also be called at any time by the chairperson of the committee or by the President, on at least five days' notice by mail, or two days' oral notice by telephone or in person. Appearance at a meeting is deemed to be a waiver of notice unless the committee member objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and the committee member does not participate in the meeting. At all meetings of a committee of this Corporation each member thereof shall be entitled to cast one vote on any question coming before such meeting. The presence of a majority of the membership of any committee of this Corporation shall constitute a quorum at any meeting thereof, but the members of a committee present at any such meeting, although less than a quorum, may adjourn the meeting from time to time. A majority vote of the members of a committee of this Corporation present at any meeting thereof, if there be a quorum, shall be sufficient for the transaction of the business of such committee. Any action that could be taken at a committee meeting may be taken by written action signed by all members of the committee..
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ARTICLE 9: INDEMNIFICATION

To the full extent permitted by any applicable law, this Corporation shall indemnify each person made or threatened to be made a party to any threatened, pending or completed civil, criminal, administrative, arbitration, or investigative proceeding, including a proceeding by or in the right of this Corporation, by reason of the former or present capacity of the person as:

  • A director, officer, employee or member of a committee of this Corporation or,
  • A director, officer, partner, trustee, employee or agent of another organization or employee benefit plan, who while a director, officer, or employee of this Corporation, is or was serving the other Corporation at the request of this Corporation or whose duties as a director, officer or employee of this Corporation involve or involved such service to the other Corporation, against judgments, penalties, fines (including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan), settlements, and reasonable attorney's fees and disbursements, incurred by the person in connection with the proceeding.

Indemnification provided by this section shall continue as to a person who has ceased to be a director, officer, employee or committee member, shall inure to the benefit of the heirs, executors and administrators of such person and shall apply whether or not the claim against such person arises out of the matters occurring before the adoption of this section. Any indemnification realized other than under this section shall apply as a credit against any indemnification provided by this section.

This Corporation may, to the full extent permitted by applicable law from time to time in effect, purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or a member of a committee of this Corporation against any liability asserted against such person as incurred by such person in any such capacity.
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ARTICLE 10: MISCELLANEOUS

Section 10.1 Fiscal Year

Unless otherwise fixed by the Board of Directors, the fiscal year of this Corporation shall begin on January 1 and end on the succeeding December 31.

Section 10.2 Corporate Seal

This Corporation shall have no seal.

Section 10.3 Electronic Communications.

A member, director or committee member may participate in a meeting by any means of communication through which such person, other persons so participating, and all persons physically present at the meeting may simultaneously hear each other during the meeting. Participation in a meeting by that means constitutes presence in person at the meeting. A conference among members, directors, or committee members by any means of communication through which such persons may simultaneously hear each other during the conference is a meeting of the members, Board of Directors or committee, as the case may be, if the same notice is given of the conference as would be required for a meeting, and if the number of persons participating in the conference would be sufficient in a meeting by that means constitutes presence in person at the meeting.

Section 10.4 Amendments

Both the Board of Directors and the members entitled to vote shall have the power to amend these Bylaws. The power of the Board of Directors shall be subject to the powers of the voting members. The Board of Directors may amend the Bylaws by adopting a resolution setting forth the amendment. The Board of Directors may not adopt, amend, or repeal a bylaw fixing voting rights of members, fixing a quorum for meetings of members, prescribing procedures for removing directors or filling vacancies in the Board of Directors, or fixing the number of directors or their classifications, qualifications, or terms of office. An amendment for adoption by the members entitled to vote must be proposed by at least fifty voting members or ten percent of the voting members, whichever is less. The membership entitled to vote may amend the Bylaws by adopting a resolution setting forth the amendments.

Section 10.5 Authority to Borrow, Encumber Assets

No director, officer, agent or employee of this Corporation shall have any power or authority to borrow money on its behalf, to pledge its credit or to mortgage or pledge its real or personal property, except within the scope and to the extent of the authority delegated by resolutions adopted from time to time by the Board of Directors. Authority may be given by the Board of Directors for any of the above purposes and may be general or limited to specific instances.

Section 10.6 Deposit of Funds

All funds of this Corporation shall be deposited from time to time to the credit of this Corporation in such banks, trust companies or other depositories as the Board of Directors may approve or designate, and all such funds shall be withdrawn only in the manner or manners authorized by the Board of Directors from time to time.
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