PROPOSED REVISED AND AMENDED BYLAWS OF MIDWEST HARDWARE ASSOCIATION, INC.

PROPOSED REVISED AND AMENDED BYLAWS OF MIDWEST HARDWARE ASSOCIATION, INC. 1

TABLE OF CONTENTS PAGE ARTICLE I. Membership... 4 Section 1.1 Active Members... 4 Section 1.2 Honorary Members... 4 Section 1.3 Junior Members... 4 Section 1.4 Associate Members... 4 Section 1.5 Membership Approval... 4 ARTICLE II. Membership Dues... 5 Section 2.1 Annual Dues... 5 Section 2.2 Payment of Membership Dues... 5 Section 2.3 Separate Location Membership Dues... 5 ARTICLE III. Voting by Members... 5 Section 3.1 Number of Votes... 5 Section 3.2 Authority to Vote... 5 ARTICLE IV. Membership Meetings... 6 Section 4.1 Annual Meeting... 6 Section 4.2 Place of Meeting... 6 Section 4.3 Special Meetings... 6 Section 4.4 Notice... 6 Section 4.5 Notice by Publication... 6 Section 4.6 Quorum... 7 Section 4.7 Adjourned Meetings... 7 Section 4.8 Failure to Hold Meeting... 7 ARTICLE V. Board of Directors... 7 Section 5.1 General Powers... 7 Section 5.2 Number of Directors... 7 Section 5.3 Qualifications... 8 Section 5.4 Election... 8 Section 5.5 Term... 8 Section 5.6 Annual Meeting... 8 Section 5.7 Additional Meetings... 9 Section 5.8 Notice... 9 Section 5.9 Quorum and Voting... 9 Section 5.10 Meetings by Electronic Means of Communication... 9 Section 5.11 Removal of Director/Vacancies... 9 Section 5.12 Committees... 10 ARTICLE VI. Officers... 11 Section 6.1 Number, Titles, and Qualifications... 11 Section 6.2 President... 11 Section 6.3 Vice President... 11 Section 6.4 Secretary-Treasurer... 11 Section 6.5 Additional Officers... 11 2

Section 6.6 Exception to Qualifications... 12 ARTICLE VII. Compensation of Officers and Directors... 12 ARTICLE VIII. Managing Director... 12 ARTICLE IX. NRHA Representative and Delegates... 12 Section 9.1 NRHA Membership... 12 Section 9.2 NRHA Representative... 12 Section 9.3 Official Delegates... 12 Section 9.4 Additional Delegates... 13 Section 9.5 Limitations of NRHA... 13 ARTICLE X. Nonprofit Purposes... 13 ARTICLE XI. Waivers of Notice... 13 ARTICLE XII. Amendment of Bylaws... 13 3

ARTICLE I. Membership Section 1.1 Active Members. (a) Any person, partnership, corporation, limited liability company or association engaged in the retail hardware business may become an active member of the Corporation. A retail hardware business is hereby defined as follows: an established place of business engaged in the retailing of hardware, stoves, housewares, sporting goods, furnaces, plumbing supplies, implements, building materials, and such other merchandise, including specialty lines as are usually sold in retail hardware stores. (b) Any person, partnership, corporation, limited liability company or association operating a retail store which includes a retail hardware department sufficiently complete to serve the hardware needs of the community in which such store is located, may become an active member. Section 1.2 Honorary Members. Any natural person who has retired from the retail hardware business and was previously an active member or a general partner or shareholder of an active member may become an honorary member. Honorary members shall have no vote at any meeting of the Corporation, but shall be entitled to such privileges as the Board of Directors may from time to time determine. Section 1.3 Junior Members. Employees of members may become junior members. Junior members shall have no vote at any meeting of the Corporation, but shall be entitled to such privileges as the Board of Directors may from time to time determine. Section 1.4 Associate Members. Any person, partnership, corporation or association who or which would not otherwise qualify for membership may become an associate member if it furnishes goods and/or services to the retail hardware industry. Associate members shall have no vote at any meeting of the Corporation, but shall be entitled to such privileges as the Board of Directors may from time to time determine. Section 1.5 Membership Approval. The Board of Directors may establish procedures for the acceptance of the members of the Corporation and may delegate to officers of the Corporation the authority to implement such procedures and approve the admission of the members. 4

ARTICLE II. Membership Dues Section 2.1 Annual Dues. The annual dues of each respective class of members of the Corporation shall be such as may be fixed from time to time by the Board of Directors at any regular or special meeting thereof. Section 2.2 Payment of Membership Dues. Membership dues of continuing members of all classes shall be due and payable on January 1 st of each year, or at such other time or times as the Board of Directors may determine. A member s failure to pay such dues within three (3) months shall terminate his, her, or its membership in the Corporation unless the Board of Directors, in its discretion, extends the time of payment. Acceptance of new members is conditioned upon their payment of membership dues pursuant to acceptance procedures established by the Board of Directors pursuant to Section 1.5 thereof. Section 2.3 Separate Location Membership Dues. Any active member who engages in a retail hardware business at more than one separate location shall pay separate membership dues for each location which the member wishes to be eligible to receive services provided by the Corporation. Services of the Corporation will not be made available for any location for which separate membership dues have not been paid. No member may submit membership dues for more locations than the number at which he, she, or it engages in a bona fide retail hardware business. ARTICLE III. Voting by Members Section 3.1 Number of Votes. Each active member in good standing appearing in person or by proxy at any regular or special meeting of the members shall have one vote for each of its separate locations for which membership dues have been paid for the current year. At any meeting at which a quorum is present, a majority vote of the members present shall decide all questions unless otherwise provided by the Articles of Incorporation or Bylaws. Only active members may vote. Section 3.2 Authority to Vote. The votes of any member which is not a natural person may be voted, in person or by proxy, (a) in the case of a member which is a partnership, corporation, limited liability company, or association, by such member s president or any other officer or proxy appointed by the president, in the absence of express notice of the designation of some other person by the Board of Directors or Bylaws of the member's corporation or association, (b) in the case of a member which is a partnership, by any general partner, or (c) in the case of a member which is a limited liability company, by any member of the 5

limited liability company. A written proxy executed by any person authorized above to vote for a member which is a partnership, corporation, limited liability company, or association shall be conclusive evidence of the authority of the holder of such proxy. ACTICLE IV. Membership Meetings Section 4.1 Annual Meeting. The annual meeting of the members shall be held on June 1 of each year at 10:00 a.m., beginning in the year 2010, or at such other date and time within ninety (90) days before or after this date as may be fixed by or under the authority of the Board of Directors, for the purpose of electing Directors and transacting such other business as may come before the meeting. If the day fixed for the annual meeting is a legal holiday in the State of Wisconsin or the State of Illinois, the meeting shall be held on the next succeeding business day. Section 4.2 Place of Meeting. The annual meeting of the members shall be held at such place as the Board of Directors shall have designated at least fifteen (15) days in advance of the date fixed for such annual meeting. Section 4.3 Special Meetings. Special meetings of the members may be held at such place and at such time as may be designated in the call therefore, whenever called by the President, and the President shall only call a special meeting whenever the Board of Directors shall so order or whenever not less than twenty percent (20%) of the active members shall in writing so demand. An order of the Board of Directors or a demand of the active members for any special meeting, shall specify the purpose or purposes of such special meeting, and the special meeting shall be called by the President for the purpose or purposes so ordered or demanded. Section 4.4 Notice. Only active members shall be entitled to notice of any annual or special meeting of the Corporation and notice shall be given in writing not more than fifty (50) nor less than fifteen (15) days prior to any such meeting. Such notice shall be given to the members by the Secretary-Treasurer (or in case of absence or disability or vacancy in the office of the Secretary-Treasurer, by the President of the Corporation), either personally, by the United States mail, by e-mail, or by facsimile transmission addressed to their last known mailing address, e-mail address, or facsimile telephone number as shown on the records of the Corporation. Any notice of a special meeting shall also state the purpose or purposes for which the meeting is called. Section 4.5 Notice by Publication. Any notice, whether for annual or special meetings, may be given to the members by publication in ASSOCIATION HELPS or such other pamphlet, 6

bulletin, publication, or electronic newsletter as may be designated by the Board of Directors from time to time as the official publication of the Corporation, provided such publication is delivered to members by e-mail, addressed to their last known e-mail address as shown on the records of the Corporation. Section 4.6 Quorum. Ten (10) active members shall constitute a quorum for the transaction of business at any annual or special meeting of the members. If the number of active members necessary to constitute a quorum shall fail to attend in person or by proxy at the time and place fixed for any particular meeting, a majority of the active members present in person or by proxy, may adjourn such meeting from time to time, without notice other than by announcement at the meeting, until the number of active members requisite to constitute a quorum shall attend. Any business that might have been transacted at the meeting as originally scheduled may be transacted at the adjourned meeting at which a quorum of active members is present. Section 4.7 Adjourned Meetings. Any annual or special meeting of the members may be adjourned from time to time to such place as may be determined by the majority vote of the members present at the time and place of the meeting, whether in person or by proxy, even though the number of members so present be less than the quorum otherwise necessary to transact the business of the meeting. Section 4.8 Failure to Hold Meeting. In the event the annual meeting for any year shall not be duly called or held, the President shall call a special meeting to be held in lieu of and for the purpose of such annual meeting, and all proceedings of such special meeting shall have the same force and effect as if taken at the regular annual meeting. ARTICLE V. Board of Directors Section 5.1 General Powers. The Corporation s powers shall be exercised by or under the authority of, and its business and affairs shall be managed under the direction of, its Board of Directors, subject to any limitation set forth in its Articles of Incorporation. Section 5.2 Number of Directors. The number of voting Directors serving on the Corporation s Board of Directors shall consist of no less than seven (7) and no more than nine (9) Directors; provided that the Board of Directors shall have no fewer than two (2) representatives from members located in each of the following regions: 1-Wisconsin 2-Illinois 7

3-Minnesota/Dakotas Section 5.3 Qualifications. Directors must be natural persons. In addition a Director must be a principal owner, shareholder, officer, partner, or member of an entity which is a member in good standing of the Corporation. Section 5.4 Election. At each annual meeting of the members of the Corporation, elections shall be held to fill the positions of the voting Directors whose terms expire as of the date of such meeting. Only active members will be entitled to vote for Directors. Candidates for each Director position open for election shall be voted upon by the membership at large. Each Director position shall be voted upon separately, and the candidate receiving a plurality of the votes cast for such position shall become the Director holding such position. Election by a plurality shall mean a candidate has received more votes for the position to be filled than any other candidate for that position. A separate vote for the election of each Director shall not be required, however, if at a meeting held for the purpose of electing Directors, the active members affirmatively elect, by a majority of the votes represented at the meeting, a predesignated group of candidates meeting the qualifications set forth in section 5.3 to fill all the Director positions for which elections were to be held. Active members may vote for Directors in person or by proxy. Section 5.5 Term. (a) Each voting Director shall hold office for an approximate three (3) year term commencing upon his or her election at an annual meeting of the members, and terminating upon the election of his or her successor at the third annual meeting of the members thereafter, or until his or her earlier death, resignation, or removal. The term of any voting Director appointed to fill a vacancy shall be determined pursuant to section 5.11 herein. (b) No Director may serve as a voting Director for more than three (3) successive terms. (c) A voting Director may be removed from office by a majority of the votes of the active members of the Corporation present in person or by proxy at any meeting called for that purpose, provided a quorum is present. Section 5.6 Annual Meeting. The Board of Directors shall meet no less than once annually. At such annual meeting, the Board of Directors shall appoint all officers of the Corporation and shall transact such other business as it may determine. 8

Section 5.7 Additional Meetings. The Board of Directors shall also hold at least one other regular meeting during each year and such meeting shall be called by the President. Additional meetings of the Board of Directors shall be held whenever called in writing by the President, who shall call such meetings at such times as he determines appropriate, or upon the written request of at least three (3) Directors. Section 5.8 Notice. The Secretary-Treasurer of the Corporation shall give written notice of any regular or special meeting to each Director by personal service, United States mail, or electronic means of communication, not less than forty-eight (48) hours before the meeting; and in the absence, or during disability or in case of vacancy in the office of the Secretary- Treasurer, the President of the Corporation shall give such written notice to each Director by personal service, United States mail, or electronic means of communication not less than forty-eight (48) hours before the meeting. Section 5.9 Quorum and Voting. A majority in number of the voting Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. If, at any meeting of the Board of Directors, there be present less than a quorum, a majority of those present may adjourn the meeting from time to time and no other or further notice of such adjournment need be given. The act of the majority of the voting Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater proportion is required by law. Section 5.10 Meetings by Electronic Means of Communication. The Board of Directors, or any committee of the Board, may, in addition to conducting meetings in which each Director participates in person, and notwithstanding any place set forth in the notice of the meeting or these Bylaws, conduct any regular or special meeting by the use of any electronic means of communication, provided (a) all participating Directors may simultaneously hear each other during the meeting, or (b) all communication during the meeting is immediately transmitted to each participating Director, and each participating Director is able to immediately send messages to all other participating Directors. Before the commencement of any business at a meeting at which any Directors do not participate in person, all participating Directors shall be informed that a meeting is taking place at which official business may be transacted. Section 5.11 Removal of Director/Vacancies. (a) The Board of Directors may, by the vote of no less than three-fourths (3/4) majority of the Directors present at a meeting at which a quorum is present, remove any Director for any 9

reason or reasons the Board of Directors deems in its sole discretion to be sufficient. (b) Any vacancy occurring on the Board of Directors may be filled by a majority of the Directors present at a meeting at which a quorum is present, or, if the Directors remaining in office constitute fewer than a quorum of the Board, by the affirmative vote of a majority of all the Directors remaining in office. The vacancy shall be filled by an individual meeting the qualifications for the position vacated and for a term consisting of the remainder of the fiscal year in which the Director was elected and two additional fiscal years. Section 5.12 Committees. The Board of Directors may, by resolution adopted by a majority of the Directors, create and appoint Directors to one or more advisory committees. Each committee shall consist of no less than three (3) Directors. In addition, there shall be the following standing advisory committees of the Board of Directors, consisting of no less than three (3) Directors appointed by the Board, having the functions set forth as follows and as further directed by the Board: (a) A legislative committee, shall include in its membership, in addition to Directors, persons who are not Directors, but who are qualified to be Directors. The legislative committee shall meet annually and at other times as warranted with regard to formulating and proposing positions which the Corporation may take concerning legislative issues. (b) An audit committee, which will be co-chaired by the Corporation s two Vice Presidents. The audit committee will review and approve the annual financial statements of the Corporation. (c) An evaluation committee comprised of the Corporation s President, two Vice Presidents, and, if willing and able to serve, the Immediate Past President. The evaluation committee will meet annually in the spring to review the performance of the Corporation s Managing Director and make recommendations to the Board of Directors as to the Managing Director s employment. (d) A nominating committee having the same composition as the evaluation committee, whose function will be to recommend to the Board of Directors candidates for election to the Director positions. 10

ARTICLE VI. Officers Section 6.1 Number, Titles, And Qualifications. The Corporation s principal officers shall be the President, the Vice President, and the Secretary-Treasurer. The President and Vice President shall be appointed by the Board of Directors from among the voting Directors. The Secretary-Treasurer shall be the same individual selected by the Board of Directors and employed as the Corporation s Managing Director. In order to be qualified to serve as Vice President, such officer shall, at the time his or her appointment to such office becomes effective, (a) have been elected to a full or partial term as voting Director and (b) have at least two years remaining on such term. In order to be qualified to serve as President, such officer shall, at the time his or her appointment to such office becomes effective, (a) have been elected to full or partial term as a voting Director and (b) have at least one year remaining on such term. Section 6.2 President. The principal duties of the President shall be to preside at the meetings of the Board of Directors and of the members of the Corporation, and to generally supervise the affairs of the Corporation. Section 6.3 Vice President. The principal duties of the Vice President shall be to discharge the duties of the President in the event of the absence or disability, for any cause, of the latter. Section 6.4 Secretary-Treasurer. The principal duties of the Secretary-Treasurer shall be to countersign all deeds, leases, and conveyances executed by the Corporation; to affix the seal of the Corporation thereto and to such other papers as shall be required or directed to be sealed; to keep a record of the proceedings of the Board of Directors; to safely and systematically keep all books, papers, records, and documents belonging to the Corporation: to receive, take charge of, and account for all monies, credits, and property of every nature of the Corporation that shall come to his or her hands: to keep an accurate account of all monies received and disbursed, and of money and property on hand: and to supervise all activities and services of the Corporation as shall be directed and required by the Board of Directors. The Secretary-Treasurer shall furnish such surety bond as the Directors may require, the premium to be paid by the Corporation. Section 6.5 Additional Officers. The Board of Directors may provide for the appointment of such additional officers as it deems to be in the best interests of the Corporation. The said officers shall perform such additional or different duties as shall from time to time be imposed by any public law or 11

prescribed by the Bylaws of the Corporation, or required by the Board of Directors thereof. Section 6.6 Exception to Qualifications. In the event that there is no member of the Corporation s Board of Directors who is able to meet, at the time his or her appointment to the position of President or Vice President would become effective, the qualifications for serving in such office, the qualification requirements shall be waived. ARTICLE VII. Compensation of Officers and Directors The Secretary-Treasurer and Managing Director shall be paid such salary as may be determined by the Board of Directors and shall be reimbursed for all reasonable expenses incurred on behalf of the Corporation. No other officers shall be entitled to a salary, wages, or compensation for their services. The Directors shall be entitled to a reasonable fee for attendance at Board of Directors meetings in an amount determined by a two thirds (2/3) majority of the Board of Directions. ARTICLE VIII. Managing Director The Board of Directors shall select an individual to be employed in a full-time capacity as the Corporation s Managing Director. The Managing Director shall, in addition to also serving as the Corporation s Secretary-Treasurer, manage the day-to-day operations of the Corporation under the direction of the Board of Directors. The Managing Director s salary shall be set by the Board of Directors. The Managing Director will also be a nonvoting member of the Corporation s Board of Directors. ARTICLE IX. NRHA Representative and Delegates Section 9.1 NRHA Membership. The Corporation may be a member of the North American Retail Hardware Association ( NRHA ). Section 9.2 NRHA Representative. Whenever the Corporation is a member of the NRHA, the Corporation will annually elect (or reelect) a member to serve as its voting representative to the NRHA Board of Directors. The term of such representative will be subject to any limitations imposed by the NRHA. Such representative will also be a nonvoting member of the Corporation s Board of Directors, and may be removed at any time in the same manner as a Director of the Corporation. Section 9.3 Official Delegates. The President and Secretary- Treasurer shall, by virtue of their office, be official delegates to the annual convention of the NRHA. 12

Section 9.4 Additional Delegates. The Board of Directors shall determine if and when delegates, in addition to those designated by Section 9.2, shall represent the Corporation at the annual convention of the NRHA, and the number of such additional delegates, and shall designate those who shall so function. Section 9.5 Limitations of NRHA. The total number of delegates to the annual convention of the NRHA shall in no event be greater than the number provided for in the Bylaws of the NRHA. ARTICLE X. Nonprofit Purposes All the assets and earnings of the Corporation shall be used exclusively for nonprofit purposes, and no part of the net earnings of the Corporation shall inure to the benefit of, or be distributed to, its members, Directors, officers, or other private persons, except that the Corporation shall be authorized and empowered to make expenditures for expenses and disbursements in conformance with the Corporation s nonprofit purposes, and to pay reasonable compensation for services rendered. ARTICLE XI. Waivers of Notice Any member, officer or Director may at any time waive any notice required to be given under these Bylaws. The presence of a member in person or by proxy, at any annual or special meeting of members, or the presence of a Director in person at any Directors meeting, shall be deemed such a waiver. ARTICLE XII. Amendment of Bylaws These Bylaws may be amended or repealed only by two-thirds (2/3) majority of the votes of active members voting at any annual or special meeting of the Corporation at which a quorum is present, except that any portion of Articles VI, VII, or VIII may be amended by the vote of two-thirds (2/3) of the voting Directors on the Corporation s Board of Directors. 13