SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-27854
BONE CARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 2830 39-1527471
(State of (Primary Standard Industry (IRS Employer
Incorporation) Classification Code Number Identification No.)
313 West Beltline Highway
Madison, Wisconsin 53713
608-274-2663
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes /X/ No / /
As of January 31, 1997, 4,353,691 shares of the registrant's Common Stock, no
par value, were outstanding.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
FORM 10-Q
For the quarterly period ended December 31, 1996
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
Item 1. Financial statements
Consolidated Balance Sheets
December 31, 1996, and June 30, 1996 . . . . . . . . . . . . . . . .3
Consolidated Statements of Operations
Three and Six Months Ended December 31, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Consolidated Statements of Cash Flows
Six Months Ended December 31, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Notes to Consolidated Financial Statements . . . . . . . . . . . . .7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .8
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . .9
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
December 31, June 30,
1996 1996
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $10,091,073 $11,060,843
Receivables 35,525 1,619
Other Current Assets 52,774 20,695
- --------------------------------------------------------------------------------
Total current assets 10,179,372 11,083,157
Plant and equipment--at cost:
Lab improvements 21,092 21,092
Furniture and fixtures 22,429 20,390
Machinery and other equipment 258,294 215,979
- --------------------------------------------------------------------------------
301,815 257,461
Less accumulated depreciation and amortization 206,597 192,677
- --------------------------------------------------------------------------------
95,218 64,784
Excess of cost over fair value of net assets
acquired, net of accumulated amortization
of $598,236 at December 31, 1996 and $553,512
at June 30, 1996 761,681 806,405
Patent fees, net of accumulated amortization
of $305,462 at December 31, 1996 and $251,462
at June 30, 1996 348,449 306,979
- --------------------------------------------------------------------------------
$11,384,720 $12,261,325
================================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
- --------------------------------------------------------------------------------
December 31, June 30,
1996 1996
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 269,189 $ 73,236
Accrued liabilities:
Compensation payable 4,924 4,133
Property, payroll, and other taxes 761 1,750
- --------------------------------------------------------------------------------
Total current liabilities 274,874 79,119
Shareholders' equity:
Preferred stock--authorized 1,000,000
shares of $.001 par value; none issued - -
Common stock--authorized 14,000,000 shares
of no par value; issued and outstanding
4,353,691 shares at December 31, 1996
and June 30, 1996 11,393,883 11,393,883
Additional paid-in capital 3,524,275 3,524,275
- --------------------------------------------------------------------------------
14,918,158 14,918,158
Accumulated deficit (3,808,312) (2,735,952)
- --------------------------------------------------------------------------------
11,109,846 12,182,206
- --------------------------------------------------------------------------------
$11,384,720 $12,261,325
================================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
- --------------------------------------------------------------------------------
Three months ended Six months ended
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
- --------------------------------------------------------------------------------
REVENUES $ 35,000 $ 6,514 $ 35,525 $ 6,514
- --------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of sales 30,947 5,335 34,732 5,335
Research and development 806,001 286,808 1,175,365 412,536
General and administrative 112,268 37,362 180,161 77,635
- --------------------------------------------------------------------------------
949,216 329,505 1,390,258 495,506
- --------------------------------------------------------------------------------
Loss from operations (914,216) (322,991) (1,354,733) (488,992)
- --------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest income 137,858 462 282,373 796
Interest expense - Lunar
Corporation - (3,156) - (13,495)
- --------------------------------------------------------------------------------
137,858 (2,694) 282,373 (12,699)
- --------------------------------------------------------------------------------
NET LOSS $ (776,358) $(325,685) $(1,072,360) $(501,691)
================================================================================
Net loss per common share $(0.18) $(0.12) $(0.25) $(0.29)
================================================================================
Weighted average number of
common shares 4,353,691 2,655,017 4,353,691 1,751,980
================================================================================
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
- --------------------------------------------------------------------------------
Six months ended
December 31, December 31,
1996 1995
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $(1,072,360) $(501,691)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 112,644 56,904
Changes in assets and liabilities:
Receivables (33,906) (69)
Other current assets (32,079) -
Accounts payable 195,953 186,997
Accrued liabilities (198) 13,810
- --------------------------------------------------------------------------------
Net cash used in operating activities (829,946) (244,049)
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Disposal of (additions to) plant
and equipment (44,354) 1,054
Patent fees (95,470) (27,381)
Continental Assays cash contribution - 6,832
- --------------------------------------------------------------------------------
Net cash used in investing activities $ (139,824) $ (19,495)
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from Lunar Corporation advances - 253,495
Proceeds from capital contributions - 1,285,291
- --------------------------------------------------------------------------------
Net cash provided by financing activities - 1,538,786
- --------------------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents (969,770) 1,275,242
Cash and cash equivalents at
beginning of period 11,060,843 22,595
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $10,091,073 $1,297,837
================================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The consolidated financial statements of Bone Care International, Inc.
(the "Company") presented herein, without audit except for balance sheet
information at June 30, 1996, have been prepared pursuant to the rules of the
Securities and Exchange Commission for quarterly reports on Form 10-Q and do
not include all of the information and note disclosures required by generally
accepted accounting principles. These statements should be read in
conjunction with the consolidated financial statements and notes thereto for
the year ended June 30, 1996, included in the Company's Form 10-K as filed
with the Securities and Exchange Commission on September 27, 1996.
The consolidated balance sheet as of December 31, 1996, the consolidated
statements of operations for the three and six months ended December 31, 1996
and 1995, and the consolidated statements of cash flows for the six months
ended December 31, 1996 and 1995 are unaudited but, in the opinion of
management, include all adjustments (consisting of normal, recurring
adjustments) necessary for a fair presentation of results for these interim
periods. The Company has reclassified the presentation of certain prior year
information to conform with the current presentation format.
The results of operations for the three and six months ended December 31,
1996, are not necessarily indicative of the results to be expected for the
entire fiscal year ending June 30, 1997.
Item 2. Management Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Revenue of $35,000 and $35,525 in the three and six months ended December
31, 1996, respectively, relate to contract services performed by Continental
Assays Corporation, a subsidiary of the Company.
Research and development expenses increased to $806,001 in the three
months ended December 31, 1996 from $286,808 in the three months ended
December 31, 1995, and to $1,175,365 in the six months ended December 31, 1996
from $412,535 in the six months ended December 31, 1995. These increases are
primarily attributable to higher expenditures for clinical trials of one-alpha
D2 for treating secondary hyperparathyroidism associated with end-stage renal
disease. These increases are also due in part to Bone Care assuming the
research and development expenses for Vitamin D analogs contributed by Lunar
Corporation in October 1995.
Interest income increased to $137,858 in the three months ended December
31, 1996 from $462 in the three months ended December 31, 1995 and to $282,373
in the six months ended December 31, 1996 from $796 in the six months ended
December 31, 1995. These increases are due to higher cash balances which
resulted from capital contributions made in fiscal 1996 by Lunar Corporation
("Lunar") and Draxis Health Care, Inc., the Company's shareholders at the time
of the contributions. On May 8, 1996, Lunar distributed its ownership of the
Company to its shareholders.
There was no interest expense in the six months ended December 31, 1996
compared to $13,495 in the six months ended December 31, 1995. Interest
expense during those periods related exclusively to loans made by Lunar to the
Company. Lunar cancelled outstanding loans in the amount of $634,683 in
October 1995 in exchange for additional shares of the Company's common stock.
Liquidity and Capital Resources
The Company has historically financed its operations through a
combination of capital contributions, license agreements and sales of contract
services. All third party collaborative research and licensing agreements
have either expired or terminated.
Cash and cash equivalents decreased $969,770 to $10,091,073 in the six
months ended December 31, 1996. The decrease is primarily due to increased
research and development activities, including clinical trials of one-alpha D2
as a therapy for secondary hyperparathyroidism in end-stage renal disease.
The Company currently estimates that approximately $5 million will be needed
to complete clinical trials and commence retail production of one-alpha D2 and
at least $1.5 million will be needed to fund corporate and administrative
expenses over the next two years.
Management believes current levels of cash and cash equivalents are
adequate to finance the Company's operations through the end of fiscal 1998.
The Company may require additional funds for research and development
activities after that time. Additional funds also could be required before
that time if the Company were to expand the scope of its activities. There is
no assurance additional financing will be available on acceptable terms.
PART II - OTHER INFORMATION
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The 1996 Annual Meeting of Shareholders ("Annual Meeting") of
the Company was held on November 14, 1996. The total number of
shares of the Company's common stock, no par value per share,
outstanding as of October 15, 1996, the record date of the Annual
Meeting, was 4,353,691. Management of the Company solicited proxies
pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended, and Regulation 14A promulgated thereunder for the Annual
Meeting. One director, Martin Barkin, M.D. was elected to serve
until the 1999 Annual Meeting of Shareholders. The directors were
elected by a vote of 3,715,896 votes "FOR" and 11,337 votes
"WITHHELD AUTHORITY." The selection of KPMG Peat Marwick LLP as the
Company's independent auditors was also approved. The selection was
approved by a vote of 3,725,408 votes "FOR," 185 votes "AGAINST,"
and 1,640 votes "ABSTAIN."
Item 5. Other Information
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: Certain statements in this filing, and
elsewhere (such as in other filings by the Company with the
Securities and Exchange Commission, press releases, presentations by
the Company or its management and oral statements) constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties, and other
factors which may cause the actual results, performance, or
achievements of the Company to be materially different from any
future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among other
things, no assurance of successful product development,
technological risks, uncertainty of regulatory approvals, regulatory
policies in the United States and other countries, availability of
additional financing, reimbursement policies of public and private
health care payors, developments in patents and other proprietary
rights, competition from existing therapies and from new therapies,
and market and general economic factors.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits furnished:
(3.2) By-Laws of Registrant
(10.1) Bone Care International, Inc. 1996 Stock Option Plan
(11) Statement Re: Computation of Loss Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended December 31, 1996.
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 thereunto duly authorized.
BONE CARE INTERNATIONAL, INC.
(Registrant)
Date: February 14, 1997 /s/ Charles W. Bishop
Charles W. Bishop
President
(Principal Executive Officer)
Date: February 14, 1997 /s/ Dale W. Gutman
Dale W. Gutman
Vice President of Finance
(Principal Financial and
Accounting Officer)
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Exhibit Index
For the Quarterly Period Ended March 31, 1996
No. Description Page
3.2 By-Laws of Registrant. . . . . . . . . . . . . . . . . . . . . .12
10.1 Bone Care International, Inc., 1996 Stock Option Plan . . . . .32
11 Statement Regarding Computation of Loss Per Share. . . . . . . 36
27 Financial Data Schedule. . . . . . . . . . . . . . . . . . . . 37
EXHIBIT 3.2
BONE CARE INTERNATIONAL, INC.
BY-LAWS
OF
BONE CARE INTERNATIONAL, INC.
(a Wisconsin corporation)
BY-LAWS
OF
BONE CARE INTERNATIONAL, INC.
(a Wisconsin Corporation)
Introduction - Variable References
0.01. Required notice of shareholders' meeting (See Section 2.04): not
less than 10 days.
0.02. Authorized number of Directors (See Section 3.01): 5.
0.03. Required notice of Directors' meeting (See Section 3.05):
(a) not less than 72 hours if by mail, and
(b) not less than 36 hours if by telegram or personal
delivery.
0.04. Authorized number of Vice Presidents (See Section 4.01): 4.
TABLE OF CONTENTS
ARTICLE I. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.01 Principal and Business Offices. . . . . . . . . . . . . . . . . .1
1.02 Registered Office . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II. SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . .1
2.01 Annual Meeting. . . . . . . . . . . . . . . . . . . . . . . . . .1
2.02 Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . .2
2.03 Place of Meeting. . . . . . . . . . . . . . . . . . . . . . . . .3
2.04 Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . .3
2.05 Closing of Transfer Books or Fixing of Record Date. . . . . . . .3
2.06 Voting Record . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.07 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.08 Conduct of Meetings . . . . . . . . . . . . . . . . . . . . . . .5
2.09 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.10 Voting of Shares. . . . . . . . . . . . . . . . . . . . . . . . .5
2.11 Voting of Shares by Certain Holders . . . . . . . . . . . . . . .5
(a) Other Corporations. . . . . . . . . . . . . . . . . . . . .5
(b) Legal Representatives and Fiduciaries . . . . . . . . . . .5
(c) Pledgees. . . . . . . . . . . . . . . . . . . . . . . . . .6
(d) Treasury Stock and Subsidiaries . . . . . . . . . . . . . .6
(e) Minors. . . . . . . . . . . . . . . . . . . . . . . . . . .6
(f) Incompetents and Spendthrifts . . . . . . . . . . . . . . .6
(g) Joint Tenants . . . . . . . . . . . . . . . . . . . . . . .6
2.12 Waiver of Notice by Shareholders. . . . . . . . . . . . . . . . .7
2.13 Unanimous Consent Without Meeting . . . . . . . . . . . . . . . .7
ARTICLE III. BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . .7
3.01 General Powers and Number . . . . . . . . . . . . . . . . . . . .7
3.02 Tenure and Qualifications . . . . . . . . . . . . . . . . . . . .8
3.03 Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . . .9
3.04 Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . .9
3.05 Notice; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . .9
3.06 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.07 Manner of Acting. . . . . . . . . . . . . . . . . . . . . . . . 10
3.08 Conduct of Meetings . . . . . . . . . . . . . . . . . . . . . . 10
3.09 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.10 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . 11
3.12 Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.13 Unanimous Consent Without Meeting . . . . . . . . . . . . . . . 11
3.14 Meetings By Telephone Or By Other Communication Technology. . . 11
ARTICLE IV. OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . 12
4.01 Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.02 Election and Term of Office . . . . . . . . . . . . . . . . . . 12
4.03 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.04 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.05 Chairman of the Board . . . . . . . . . . . . . . . . . . . . . 12
4.06 President . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.07 The Executive Vice President. . . . . . . . . . . . . . . . . . 13
4.08 The Vice Presidents.. . . . . . . . . . . . . . . . . . . . . . 13
4.09 The Secretary.. . . . . . . . . . . . . . . . . . . . . . . . . 14
4.10 The Treasurer.. . . . . . . . . . . . . . . . . . . . . . . . . 14
4.11 Assistant Secretaries and Assistant
Treasurers. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.12 Other Assistants and Acting Officers. . . . . . . . . . . . . . 15
4.13 Salaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS: SPECIAL CORPORATE
ACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.01 Contracts.. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.02 Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.03 Checks, Drafts, etc.. . . . . . . . . . . . . . . . . . . . . . 16
5.04 Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.05 Voting of Securities Owned by this
Corporation.. . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER. . . . . . . . 17
6.01 Certificates for Shares . . . . . . . . . . . . . . . . . . . . 17
6.02 Facsimile Signatures and Seal.. . . . . . . . . . . . . . . . . 17
6.03 Signature by Former Officers. . . . . . . . . . . . . . . . . . 17
6.04 Transfer of Shares. . . . . . . . . . . . . . . . . . . . . . . 17
6.05 Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . 18
6.06 Lost, Destroyed or Stolen Certificates. . . . . . . . . . . . . 18
6.07 Consideration for Shares. . . . . . . . . . . . . . . . . . . . 18
6.08 Stock Regulations.. . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII. WAIVER OF NOTICE. . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VIII. UNANIMOUS CONSENT WITHOUT A MEETING . . . . . . . . . . . 19
ARTICLE IX. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 19
9.01 Indemnification for Successful Defense. . . . . . . . . . . . . 19
9.02 Other Indemnification.. . . . . . . . . . . . . . . . . . . . . 19
9.03 Written Request.. . . . . . . . . . . . . . . . . . . . . . . . 20
9.04 Nonduplication. . . . . . . . . . . . . . . . . . . . . . . . . 20
9.05 Determination of Right to Indemnification.. . . . . . . . . . . 20
9.06 Advance Expenses. . . . . . . . . . . . . . . . . . . . . . . . 21
9.07 Nonexclusivity. . . . . . . . . . . . . . . . . . . . . . . . . 22
9.08 Court-Ordered Indemnification.. . . . . . . . . . . . . . . . . 22
9.09 Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.10 Securities Law Claims.. . . . . . . . . . . . . . . . . . . . . 23
9.11 Liberal Construction. . . . . . . . . . . . . . . . . . . . . . 24
9.12 Definitions Applicable to This Article. . . . . . . . . . . . . 24
ARTICLE X. SEAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE XI. AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . 25
11.01 By Shareholders.. . . . . . . . . . . . . . . . . . . . . 25
11.02 By Directors. . . . . . . . . . . . . . . . . . . . . . . 25
11.03 Implied Amendments. . . . . . . . . . . . . . . . . . . . 25
ARTICLE I. OFFICES
1.01 Principal and Business Offices. The Corporation may have
such principal and other business offices, either within or without the State
of Wisconsin, as the Board of Directors may designate or as the business of
the Corporation may require from time to time.
1.02 Registered Office. The registered office of the Corporation
required by the Wisconsin Business Corporation Law to be maintained in the
State of Wisconsin may be, but need not be, identical with the principal
office in the State of Wisconsin, and the address of the registered office may
be changed from time to time by the Board of Directors or by the registered
agent. The business office of the registered agent of the Corporation shall
be identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01 Annual Meeting. (a) An annual meeting of shareholders shall
be held for the election of directors at such date, time and place as may be
fixed by resolution of the Board of Directors from time to time. Subject to
paragraph (b) of this Section 1.1, any other proper business may be transacted
at an annual meeting.
(b) Only such business shall be conducted at an annual meeting of
shareholders as shall have been properly brought before the meeting. For
business to be properly brought before the meeting, it must be: (I) authorized
by the Board of Directors and specified in the notice, or a supplemental
notice, of the meeting, (ii) otherwise brought before the meeting by or at the
direction of the Board of Directors or the chairman of the meeting, or
(iii) otherwise properly brought before the meeting by a shareholder. For
business to be properly brought before an annual meeting by a shareholder, the
shareholder must have given written notice thereof to the Secretary, delivered
or mailed to and received at the principal executive offices of the
Corporation (x) not less than 60 days nor more than 90 days prior to the
meeting, or (y) if less than 70 days' notice of the meeting or prior public
disclosure of the date of the meeting is given or made to shareholders, not
later than the close of business on the tenth day following the day on which
the notice of the meeting was mailed or, if earlier, the day on which such
public disclosure was made. A shareholder's notice to the Secretary shall set
forth as to each item of business the shareholder proposes to bring before the
meeting (1) a brief description of such item and the reasons for conducting
such business at the meeting, (2) the name and address, as they appear on the
Corporation's records, of the shareholder proposing such business, (3) the
class and number of shares of stock of the Corporation which are beneficially
owned by the shareholder (for purposes of the regulations under Sections 13
and 14 of the Securities Exchange Act of 1934, as amended), and (4) any
material interest of the shareholder in such business. No business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this paragraph (b). The chairman of the meeting at which any
business is proposed by a shareholder shall, if the facts warrant, determine
and declare to the meeting that such business was not properly brought before
the meeting in accordance with the provisions of this paragraph (b), and, in
such event, the business not properly before the meeting shall not be
transacted.
2.02 Special Meeting. (a) Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute, may be
called by the Chairman of the Board (if one be designated), or the President
or the Board of Directors or by the person designated in the written request
of the holders of not less than one-tenth of all shares of the Corporation
entitled to vote at the meeting.
(b) Only such business shall be conducted at a special meeting of
shareholders as shall have been properly brought before the meeting. For
business to be properly brought before the meeting, it must be: (I) authorized
by the Board of Directors and specified in the notice, or a supplemental
notice, of the meeting, (ii) otherwise brought before the meeting by or at the
direction of the Board of Directors or the chairman of the meeting, or
(iii) otherwise properly brought before the meeting by a shareholder. For
business to be properly brought before a special meeting by a shareholder, the
shareholder must have given written notice thereof to the Secretary, delivered
or mailed to and received at the principal executive offices of the
Corporation (x) not less than 60 days nor more than 90 days prior to the
meeting, or (y) if less than 70 days' notice of the meeting or prior public
disclosure of the date of the meeting is given or made to shareholders, not
later than the close of business on the tenth day following the day on which
the notice of the meeting was mailed or, if earlier, the day on which such
public disclosure was made. A shareholder's notice to the Secretary shall set
forth as to each item of business the shareholder proposes to bring before the
meeting (1) a brief description of such item and the reasons for conducting
such business at the meeting, (2) the name and address, as they appear on the
Corporation's records, of the shareholder proposing such business, (3) the
class and number of shares of stock of the Corporation which are beneficially
owned by the shareholder (for purposes of the regulations under Sections 13
and 14 of the Securities Exchange Act of 1934, as amended), and (4) any
material interest of the shareholder in such business. No business shall be
conducted at any special meeting except in accordance with the procedures set
forth in this paragraph (b). The chairman of the meeting at which any
business is proposed by a shareholder shall, if the facts warrant, determine
and declare to the meeting that such business was not properly brought before
the meeting in accordance with the provisions of this paragraph (b), and, in
such event, the business not properly before the meeting shall not be
transacted.
2.03 Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Wisconsin, as the place of
meeting for any annual meeting or for any special meeting called by the Board
of Directors. A waiver of notice signed by all shareholders entitled to vote
at a meeting may designate any place, either within or without the State of
Wisconsin, as the place for the holding of such meeting. If no designation is
made, or if a special meeting be otherwise called, the place of meeting shall
be the principal business office of the Corporation in the State of Wisconsin
or such other suitable place in the county of such principal office as may be
designated by the person calling such meeting, but any meeting may be
adjourned to reconvene at any place designated by vote of a majority of the
shares represented thereat.
2.04 Notice of Meeting. Except as otherwise provided by law, the
Articles of Incorporation or these by-laws, written notice stating the place,
day and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than the
number of days set forth in Section 0.01 (unless a longer period is required
by law or the articles of incorporation) nor more than sixty days before the
date of the meeting, either personally or by mail, by or at the direction of
the Chairman of the Board (if one be designated), or the President, or the
Secretary, or other Officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears on the stock
record books of the Corporation, with postage thereon prepaid.
2.05 Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case seventy days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting. In
lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than seventy days and, in case of a
meeting of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders, is to be
taken. If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the close of business on the date on which notice of the meeting is
mailed or on the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record
date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall be applied to any
adjournment thereof except where the determination has been made through the
closing of the stock transfer books and the stated period of closing has
expired.
2.06 Voting Record. The Officer or agent having charge of the
stock transfer books for shares of the Corporation shall, before each meeting
of shareholders, make a complete list of the shareholders entitled to vote at
such meeting, or any adjournment thereof, with the address of and the number
of shares held by each. Such record shall be produced and kept open at the
time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the purposes of the
meeting. The original stock transfer books shall be prima facie evidence as
to who are the shareholders entitled to examine such record or transfer books
or to vote at any meeting of shareholders. Failure to comply with the
requirements of this section shall not affect the validity of any action taken
at such meeting.
2.07 Quorum and Voting Requirements. Except as otherwise provided
in the articles of incorporation or the Wisconsin Business Corporation Law, a
majority of the votes entitled to be cast on a matter, represented in person
or by proxy, shall constitute a quorum for action on that matter. Once a
share is represented for any purpose at a meeting, other than for the purpose
of objecting to holding the meeting or transacting business at the meeting, it
is considered present for purposes of determining whether a quorum exists for
the remainder of the meeting and for any adjournment of that meeting unless a
new record date is or must be set for that adjourned meeting. If a quorum is
present, action on a matter, other than the election of directors, is approved
if the votes cast favoring the action exceed the votes cast opposing the
action. Directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present.
In the preceding sentence, "plurality" means that the individuals with the
largest number of votes are elected as directors up to the maximum number of
directors to be chosen at the election. Though less than a quorum of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the meeting
as originally notified.
2.08 Conduct of Meetings. The Chairman of the Board (if one be
designated), or in the Chairman's absence, the President, or in the
President's absence, the Executive Vice President (if one be designated), or
in the Executive Vice President's absence, a Vice President in the order
provided under Section 4.08, and in their absence, any person chosen by the
shareholders present shall call the meeting of the shareholders to order and
shall act as chairman of the meeting, and the Secretary of the Corporation
shall act as Secretary of all meetings of the shareholders, but, in the
absence of the Secretary, the presiding Officer may appoint any other person
to act as Secretary of the meeting.
2.09 Proxies. At all meetings of shareholders, a shareholder
entitled to vote may vote in person or by proxy appointed in writing by the
shareholder or by his or her duly authorized attorney-in-fact. Such proxy
shall be filed with the Secretary of the Corporation before or at the time of
the meeting. Unless otherwise provided in the proxy, a proxy may be revoked
at any time before it is voted, either by written notice filed with the
Secretary or the acting Secretary of the meeting or by oral notice given by
the shareholder to the presiding officer during the meeting. The presence of
a shareholder who has filed his or her proxy shall not of itself constitute a
revocation. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy. The Board of Directors
shall have the power and authority to make rules establishing presumptions as
to the validity and sufficiency of proxies.
2.10 Voting of Shares. Each outstanding share shall be entitled
to one vote upon each matter submitted to a vote at a meeting of shareholders,
except to the extent that the voting rights of the shares of any class or
classes are enlarged, limited or denied by the articles of incorporation.
2.11 Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the name of
another corporation may be voted either in person or by proxy, by the
president of such corporation or any other officer appointed by such
president. A proxy executed by any principal officer of such other
corporation or assistant thereto shall be conclusive evidence of the signer's
authority to act, in the absence of express notice to this Corporation, given
in writing to the Secretary of this Corporation, or the designation of some
other person by the Board of Directors or by the by-laws of such other
corporation.
(b) Legal Representatives and Fiduciaries. Shares held by
an administrator, executor, guardian, conservator, trustee in bankruptcy,
receiver or assignee for creditors may be voted by him or her, either in
person or by proxy, without a transfer of such shares into his or her name,
provided that there is filed with the Secretary before or at the time of
meeting proper evidence of his or her incumbency and the number of shares held
by him or her. Shares standing in the name of a fiduciary may be voted by him
or her, either in person or by proxy. A proxy executed by a fiduciary shall
be conclusive evidence of the signer's authority to act, in the absence of
express notice to this Corporation, given in writing to the Secretary of this
Corporation, that such manner of voting is expressly prohibited or otherwise
directed by the document creating the fiduciary relationship.
(c) Pledgees. A shareholder whose shares are pledged shall
be entitled to vote such shares until the shares have been transferred into
the name of the pledgee, and thereafter the pledgee shall be entitled to vote
the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury
shares, nor shares held by another corporation if a majority of the shares
entitled to vote for the election of Directors of such other corporation is
held by this Corporation, shall be voted at any meeting or counted in
determining the total number of outstanding shares entitled to vote, but
shares of its own issue held by this Corporation in a fiduciary capacity, or
held by such other corporation in a fiduciary capacity, may be voted and shall
be counted in determining the total number of outstanding shares entitled to
vote.
(e) Minors. Shares held by a minor may be voted by such
minor in person or by proxy and no such vote shall be subject to disaffirmance
or avoidance, unless prior to such vote the Secretary of the Corporation has
received written notice or has actual knowledge that such shareholder is a
minor.
(f) Incompetents and Spendthrifts. Shares held by an
incompetent or spendthrift may be voted by such incompetent or spendthrift in
person or by proxy and no such vote shall be subject to disaffirmance or
avoidance, unless prior to such vote the Secretary of the Corporation has
actual knowledge that such shareholder has been adjudicated an incompetent or
spendthrift or actual knowledge of filing of judicial proceedings for
appointment of a guardian.
(g) Joint Tenants. Shares registered in the names of two
or more individuals who are named in the registration as joint tenants may be
voted in person or by proxy signed by any one or more of such individuals if
either (i) no other such individual or his or her legal representative is
present and claims the right to participate in the voting of such shares or
prior to the vote files with the Secretary of the Corporation a contrary
written voting authorization or direction or written denial or authority of
the individual present or signing the proxy proposed to be voted or (ii) all
such other individuals are deceased and the Secretary of the Corporation has
no actual knowledge that the survivor has been adjudicated not to be the
successor to the interests of those deceased.
2.12 Waiver of Notice by Shareholders. Whenever any notice
whatever is required to be given to any shareholder of the Corporation under
the articles of incorporation or by-laws or any provision of law, a waiver
thereof in writing, signed at any time, whether before or after the time of
meeting, by the shareholder entitled to such notice, shall be deemed
equivalent to the giving of such notice; provided that such waiver in respect
to any matter of which notice is required under any provision of the Wisconsin
Business Corporation Law, shall contain the same information as would have
been required to be included in such notice, except the time and place of
meeting.
2.13 Unanimous Consent Without Meeting. Any action required or
permitted by the articles of incorporation or by-laws or any provision of law
to be taken at a meeting of the shareholders, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the shareholders entitled to vote with respect to the subject matter
thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Number. (a) The business and affairs of
the Corporation shall be managed by its Board of Directors. The number of
Directors of the Corporation shall be as provided in Section 0.02, but shall
be not less than five (5) nor more than twelve (12).
The Board of Directors of the corporation shall be divided into
three (3) classes of not less than one (1) nor more than four (4) Directors
each. The term of office of the first class of Directors shall expire at the
first annual meeting after their initial election, the term of office of the
second class shall expire at the second annual meeting after their initial
election, and the term of office of the third class shall expire at the third
annual meeting after the initial election. At each annual meeting after the
initial classification of the Board of Directors, the class of Directors whose
term expires at the time of such election shall be elected to hold office
until the third succeeding annual meeting.
(b) Only persons who are nominated in accordance with the
procedures set forth in this paragraph (b) shall be eligible for election as
directors of the Corporation. Nominations of persons for election to the
Board of Directors may be made at a meeting of shareholders by the Board of
Directors or by any shareholder of the Corporation entitled to vote in the
election of directors at the meeting who complies with the notice procedures
set forth in this paragraph (b). Any nomination by a shareholder must be made
by written notice to the Secretary delivered or mailed to and received at the
principal executive offices of the Corporation (I) not less than 60 days nor
more than 90 days prior to the meeting, or (ii) if less than 70 days' notice
of the meeting or prior public disclosure of the date of the meeting is given
or made to shareholders, not later than the close of business on the tenth day
following the day on which the notice of the meeting was mailed or, if
earlier, the day on which such public disclosure was made. A shareholder's
notice to the Secretary shall set forth (x) as to each person whom the
shareholder proposes to nominate for election or re-election as a director:
(1) the name, age, business address and residence address of such person,
(2) the principal occupation or employment of such person, (3) the class and
number of shares of stock of the Corporation which are beneficially owned by
such person (for the purposes of the regulations under Sections 13 and 14 of
the Securities Exchange Act of 1934, as amended), and (4) any other
information relating to such person that would be required to be disclosed in
solicitations of proxies for the election of such person as a director of the
Corporation pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended, and such person's written consent to being named in any
proxy statement as a nominee and to serving as a director if elected; and
(y) as to the shareholder giving notice (5) the name and address, as they
appear on the Corporation's records, of such shareholder and (6) the class and
number of shares of stock of the Corporation which are beneficially owned by
such shareholder (determined as provided in clause (x)(3) above). At the
request of the Board of Directors any person nominated by the Board of
Directors for election as a director shall furnish to the Secretary that
information required to be set forth in a shareholder's notice of nomination
which pertains to the nominee. The chairman of the meeting at which a
shareholder nomination is presented shall, if the facts warrant, determine and
declare to the meeting that such nomination was not made in accordance with
the procedures prescribed by this paragraph (b), and, in such event, the
defective nomination shall be disregarded.
3.02 Tenure and Qualifications. Each Director shall hold office
until the next annual meeting of shareholders in the year in which such
Director's term expires and until his successor shall have been elected, or
until his prior death, resignation or removal. A Director may be removed from
office by affirmative vote of 80% of the outstanding shares entitled to vote
for the election of such Director, taken at an annual meeting or a special
meeting of shareholders called for that purpose, and any vacancy so created
may be filled by the affirmative vote of 80% of such shares. A Director may
resign at any time by filing his written resignation with the Secretary of the
Corporation. Directors need not be residents of the State of Wisconsin or
shareholders of the Corporation.
3.03 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law immediately
after the annual meeting of shareholders, and each adjourned session thereof.
The place of such regular meeting shall be the same as the place of the
meeting of shareholders which precedes it, or such other suitable place as may
be announced at such meeting of shareholders. The Board of Directors may
provide, by resolution, the time and place, either within or without the State
of Wisconsin, for the holding of additional regular meetings without other
notice than such resolution.
3.04 Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President, Secretary or any two
Directors. The President or Secretary calling any special meeting of the
Board of Directors may fix any place, either within or without the State of
Wisconsin, as the place for holding any special meeting of the Board of
Directors called by them, and if no other place is fixed, the place of meeting
shall be the principal business office of the Corporation in the State of
Wisconsin.
3.05 Notice; Waiver. Notice of each meeting of the Board of
Directors (unless otherwise provided in or pursuant to Section 3.03) shall be
given by written notice delivered personally or mailed or given by telegram to
each Director at his or her business address or at such other address as such
Director shall have designated in writing filed with the Secretary, in each
case not less than that number of hours prior thereto as set forth in Section
0.03. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail so addressed, with postage thereon prepaid. If
notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegraph company. Whenever any notice
whatever is required to be given to any Director of the Corporation under the
articles of incorporation or by-laws or any provision of law, a waiver thereof
in writing, signed at any time, whether before or after the time of meeting,
by the Director entitled to such notice, shall be deemed equivalent to the
giving of such notice. The attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting, except where a Director attends
a meeting and objects thereat to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.
3.06 Quorum. Except as otherwise provided by law or by the
articles of incorporation or these by-laws, a majority of the number of
Directors as provided in Section 0.03 shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but a
majority of the Directors present (though less than such quorum) may adjourn
the meeting from time to time without further notice.
3.07 Manner of Acting. The act of the majority of the 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 number is required by law or
by the articles of incorporation or these by-laws.
3.08 Conduct of Meetings. The Chairman of the Board (if one be
designated), or in the Chairman's absence, the President, or in the
President's absence, the Executive Vice President (if one be designated), or
in the Executive Vice President's absence, a Vice President in the order
provided under Section 4.06, and in their absence, any Director chosen by the
Directors present, shall call meetings of the Board of Directors to order and
shall act as chairman of the meeting. The Secretary of the Corporation shall
act as Secretary of all meetings of the Board of Directors, but in the absence
of the Secretary, the presiding Officer may appoint any Assistant Secretary or
any Director or other person present to act as Secretary of the meeting.
3.09 Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of Directors, may be
filled until the next succeeding annual election by the affirmative vote of a
majority of the Directors then in office, though less than a quorum of the
Board of Directors; provided, that in case of a vacancy created by the removal
of a Director by vote of the shareholders, the shareholders shall have the
right to fill such vacancy at the same meeting or any adjournment thereof by
the affirmative vote of 80% of the outstanding shares entitled to vote for the
election of such Directors.
3.10 Compensation. The Board of Directors, by affirmative vote of
a majority of the Directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
Directors for services to the Corporation as Directors, Officers or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or to delegate authority to
an appropriate committee to provide for reasonable pensions, disability or
death benefits, and other benefits of payments, to Directors, Officers and
employees and to their estates, families, dependents or beneficiaries on
account of prior services rendered by such Directors, Officers and employees
to the Corporation.
3.11 Presumption of Assent. A Director of the Corporation who is
present at a meeting of the Board of Directors or a committee thereof of which
he or she is a member, at which action on any corporate matter is taken, shall
be presumed to have assented to the action taken unless his or her dissent
shall be entered in the minutes of the meeting or unless he or she shall file
his or her written dissent to such action with the person acting as the
Secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the Corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply
to a Director who voted in favor of such action.
3.12 Committees. The Board of Directors, by resolution adopted by
the affirmative vote of a majority of the number of Directors as provided in
Section 0.03, may designate one or more committees, each committee to consist
of two or more Directors elected by the Board of Directors, which to the
extent provided in said resolution as initially adopted, and as thereafter
supplemented or amended by further resolution adopted by a like vote, shall
have and may exercise, when the Board of Directors is not in session, the
powers of the Board of Directors in the management of the business and affairs
of the Corporation, except action in respect to dividends to shareholders,
election of the principal officers or the filling of vacancies in the Board of
Directors or committees created pursuant to this section. The Board of
Directors may elect one or more of its members as alternate members of any
such committee who may take the place of any absent member or members at any
meeting of such committee, upon request by the President or upon request by
the chairman of such meeting. Each such committee shall fix its own rules
governing the conduct of its activities and shall make such reports to the
Board of Directors of its activities as the Board of Directors may request.
3.13 Unanimous Consent Without Meeting. Any action required or
permitted by the articles of incorporation or by-laws or any provision of law
to be taken by the Board of Directors at a meeting or by resolution may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the Directors then in office.
3.14 Meetings By Telephone Or By Other Communication Technology.
Meetings of the Board of Directors or committee may be conducted by telephone
or by other communication technology in accordance with Section 180.0820 of
the Wisconsin Business Corporation Law. At any such meeting, all participating
directors shall be informed that a meeting is taking place at which official
business may be transacted.
ARTICLE IV. OFFICERS
4.01 Number. The principal Officers of the Corporation shall be a
President, the number of Vice Presidents as provided in Section 0.04, a
Secretary, and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other Officers and assistant officers as may be deemed
necessary may be elected or appointed by the Board of Directors. Any two or
more offices may be held by the same person, except the offices of President
and Secretary and the offices of President and Vice President.
4.02 Election and Term of Office. The Officers of the Corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of Officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each Officer shall hold office until his or her
successor shall have been duly elected or until his or her prior death,
resignation or removal.
4.03 Removal. Any Officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the Corporation will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment shall not
of itself create contract rights.
4.04 Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be filled by
the Board of Directors for the unexpired portion of the term.
4.05 Chairman of the Board. The Board of Directors may at their
discretion elect a Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the shareholders and Board of Directors, and shall
carry out such other duties and have such responsibilities as may be specified
by the Board of Directors.
4.06 President. The President shall be the chief executive
officer of the Corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the Corporation. He or she shall, when present, preside at all
meetings of the shareholders and of the Board of Directors. He or she shall
have authority, subject to such rules as may be prescribed by the Board of
Directors, to appoint such agents and employees of the Corporation as he or
she shall deem necessary, to prescribe their powers, duties and compensation,
and to delegate authority to them. Such agents and employees shall hold
office at the discretion of the President. He or she shall have authority to
sign, execute and acknowledge, on behalf of the Corporation, all deeds,
mortgages, bonds, stock certificates, contracts, leases, reports and all other
documents or instruments necessary or proper to be executed in the course of
the Corporation's regular business, or which shall be authorized by resolution
of the Board of Directors; and, except as otherwise provided by law or the
Board of Directors, he or she may authorize any Vice President or other
Officer or agent of the Corporation to sign, execute and acknowledge such
documents or instruments in his or her place and stead. In general, he or she
shall perform all duties incident to the office of chief executive officer and
such other duties as may be prescribed by the Board of Directors from time to
time.
4.07 The Executive Vice President. The Executive Vice President,
if one be designated, shall assist the President in the discharge of
supervisory, managerial and executive duties and functions. In the absence of
the President or in the event of his or her death, inability or refusal to
act, the Executive Vice President shall perform the duties of the President
and when so acting shall have all the powers and duties of the President. He
or she shall perform such other duties as from time to time may be assigned to
him or her by the Board of Directors or the President.
4.08 The Vice Presidents. In the absence of the President and the
Executive Vice President or in the event of their death, inability or refusal
to act, or in the event for any reason it shall be impracticable for them to
act personally, the Vice President (or in the event there be more than one
Vice President, the Vice Presidents in the order designated by the Board of
Directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Any Vice President may sign, with the Secretary or Assistant
Secretary, certificates for shares of the Corporation; and shall perform such
other duties and have such authority as from time to time may be delegated or
assigned to him or her by the President, the Executive Vice President or by
the Board of Directors. The execution of any instrument of the Corporation by
any Vice President shall be conclusive evidence, as to third parties, of his
or her authority to act in the stead of the President.
4.09 The Secretary. The Secretary shall: (A) keep the minutes of
the meetings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents, the execution of
which on behalf of the Corporation under its seal is duly authorized; (d) keep
or arrange for the keeping of a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President, or a Vice President, certificates for shares of the
Corporation, the issuance of which shall have been authorized by resolution of
the Board of Directors; (f) have general charge of the stock transfer books of
the Corporation; and (g) in general, perform all duties incident to the office
of Secretary and have such other duties and exercise such authority as from
time to time may be delegated or assigned to him or her by the President or by
the Board of Directors.
4.10 The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the Corporation;
(b) receive and give receipts for moneys due and payable to the Corporation
from any source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of Section 5.04; and (c) in
general, perform all of the duties incident to the office of Treasurer and
have such other duties and exercise such other authority as from time to time
may be delegated or assigned to him or her by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer shall give a
bond for the faithful discharge of his duties in such sum and with such surety
or sureties as the Board of Directors shall determine.
4.11 Assistant Secretaries and Assistant Treasurers. There shall
be such number of Assistant Secretaries and Assistant Treasurers as the Board
of Directors may from time to time authorize. The Assistant Secretaries may
sign with the President or a Vice President certificates for shares of the
Corporation, the issuance of which shall have been authorized by a resolution
of the Board of Directors. The Assistant Secretaries shall, respectively, if
required by the Board of Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the Board of Directors
shall determine. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties and have such authority as shall from time
to time be delegated or assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors.
4.12 Other Assistants and Acting Officers. The Board of Directors
shall have the power to appoint any person to act as assistant to any Officer,
or as agent for the Corporation in his or her stead, or to perform the duties
of such Officer whenever for any reason it is impracticable for such Officer
to act personally and such assistant or acting Officer or other agent so
appointed by the Board of Directors shall have the power to perform all the
duties of the office to which he or she is so appointed to be assistant, or as
to which he or she is so appointed to act, except as such power may be
otherwise defined or restricted by the Board of Directors.
4.13 Salaries. The salaries of the principal Officers shall be
fixed from time to time by the Board of Directors or by a duly authorized
committee thereof, and no Officer shall be prevented from receiving such
salary by reason of the fact that he or she is also a Director of the
Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS: SPECIAL CORPORATE ACTS
5.01 Contracts. The Board of Directors may authorize any Officer
or Officers, agent or agents, to enter into any contract or execute or deliver
any instrument in the name of and on behalf of the Corporation, and such
authorization may be general or confined to specific instances. No contract
or other transaction between the Corporation and one or more of its Directors
or any other corporation, firm, association, or entity in which one or more of
its Directors or Officers are financially interested, shall be either void or
voidable because of such relationship or interest or because such Director or
Directors are present at the meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction or
because his, or her, or their votes are counted for such purpose, if (a) the
fact of such relationship or interest is disclosed or known to the Board of
Directors or committee which authorizes, approves or ratifies the contract or
transaction by a vote or consent sufficient for the purpose without counting
the votes or consents of such interested Directors; or (b) the fact of such
relationship or interest is disclosed or known to the shareholders entitled to
vote and they authorize, approve or ratify such contract or transaction by
vote or written consent; or (c) the contract or transaction is fair and
reasonable to the Corporation. Common or interested Directors may be counted
in determining the presence of a quorum at a meeting of the Board of Directors
or a committee thereof which authorizes, approves or ratifies such contract or
transactions.
5.02 Loans. No indebtedness for borrowed money shall be
contracted on behalf of the Corporation and no evidences of such indebtedness
shall be issued in its name unless authorized by or under the authority of a
resolution of the Board of Directors. Such authorization may be general or
confined to specific instances.
5.03 Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation, shall be signed by such Officer or Officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board of
Directors.
5.04 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as may be selected by or
under the authority of a resolution of the Board of Directors.
5.05 Voting of Securities Owned by this Corporation. Subject
always to the specific directions of the Board of Directors, (a) any shares or
other securities issued by any other corporation and owned or controlled by
this corporation may be voted at any meeting of security holders of such other
corporation by the President of this Corporation if he or she be present, or
in the President's absence by the Executive Vice President, (if one be
designated), or in the Executive Vice President's absence, by any Vice
President of his Corporation who may be present, and (b) whenever, in the
judgment of the President, or in his absence, of the Executive Vice President
(if one be designated), or in the Executive Vice President's absence, of any
Vice President, it is desirable for this Corporation to execute a proxy or
written consent in respect to any shares or other securities issued by any
other corporation and owned by this Corporation, such proxy or consent shall
be executed in the name of this Corporation by the President, Executive Vice
President or one of the Vice Presidents of this Corporation in the order as
provided in clause (a) of this Section, without necessity of any authorization
by the Board of Directors, affixation of corporate seal or countersignature or
attestation by another officer. Any person or persons designated in the
manner above stated as the proxy or proxies of this Corporation shall have
full right, power and authority to vote the shares or other securities issued
by such other corporation and owned by this Corporation the same as such
shares or other securities might be voted by this Corporation.
ARTICLE VI. CERTIFICATES FOR
SHARES AND THEIR TRANSFER
6.01 Certificates for Shares. Certificates representing shares of
the Corporation shall be in such form, consistent with law, as shall be
determined by the Board of Directors. Such Certificates shall be signed by
the President or a Vice President and by the Secretary or an Assistant
Secretary. All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be cancelled
and no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered and canceled, except as provided
in Section 6.06.
6.02 Facsimile Signatures and Seal. The seal of the Corporation,
if the Corporation has elected to have a seal, on any certificates for shares
may be a facsimile. The signatures of the President or Vice President and the
Secretary or Assistant Secretary upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent, or a registrar,
other than the Corporation itself or an employee of the Corporation.
6.03 Signature by Former Officers. In case any Officer, who has
signed or whose facsimile signature has been placed upon, any certificate for
shares, shall have ceased to be such Officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he or
she were such Officer at the date of its issue.
6.04 Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer, the Corporation may treat
the registered owner of such shares as the person exclusively entitled to
vote, to receive notifications and otherwise to have and exercise all the
rights and powers of an owner. Where a certificate for shares is presented to
the Corporation with a request to register for transfer, the Corporation shall
not be liable to the owner or any other person suffering loss as a result of
such registration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The Corporation may require
reasonable assurance that said endorsements are genuine and effective and in
compliance with such other regulations as may be prescribed by or under the
authority of the Board of Directors.
6.05 Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the Corporation upon the transfer of such shares.
6.06 Lost, Destroyed or Stolen Certificates. Where the owner
claims that his or her certificate for shares has been lost, destroyed or
wrongfully taken, a new certificate shall be issued in place thereof if the
owner (a) so requests before the Corporation has notice that such shares have
been acquired by a bona fide purchaser, and (b) files with the Corporation a
sufficient indemnity bond, and (c) satisfies such other reasonable
requirements as may be prescribed by or under the authority of the Board of
Directors.
6.07 Consideration for Shares. The shares of the Corporation may
be issued for such consideration as shall be fixed from time to time by the
Board of Directors, provided that any shares having a par value shall not be
issued for a consideration less than the par value thereof. The consideration
to be paid for shares may be paid in whole or in part, in money, in other
property, tangible or intangible, or in labor or services actually performed
for the Corporation. When payment of the consideration for which shares are
to be issued shall have been received by the Corporation, such shares shall be
deemed to be fully paid and nonassessable by the Corporation. No certificate
shall be issued for any share until such share is fully paid.
6.08 Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the Corporation.
ARTICLE VII. WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of the Wisconsin Business Corporation Law or under the provisions
of the articles of incorporation or by-laws a waiver thereof in writing signed
at any time, whether before or after the time of the meeting, by the person or
persons entitled to such notice shall be deemed equivalent to the giving of
such notice. Such waiver by a shareholder in respect of any matter for which
notice is required under any provision of the Wisconsin Business Corporation
Law shall contain the same information as would have been required to be
included in such notice under any applicable provisions of said Law, except
that the time and place of meeting need not be stated.
ARTICLE VIII. UNANIMOUS CONSENT
WITHOUT A MEETING
Any action required by the articles of incorporation or by-laws or
any provision of the Wisconsin Business Corporation Law to be taken at a
meeting or any other action which may be taken at a meeting may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by all of the shareholders, Directors or members of a
committee thereof entitled to vote with respect to the subject matter thereof
and such consent shall have the same force and effect as a unanimous vote.
ARTICLE IX. INDEMNIFICATION
9.01 Indemnification for Successful Defense. Within 20 days after
receipt of a written request pursuant to Section 9.03, the Corporation shall
indemnify a Director, Officer, Employee or Agent, to the extent he or she has
been successful on the merits or otherwise in the defense of a proceeding, for
all reasonable expenses incurred in the proceeding if the Director, Officer,
Employee or Agent was a party because he or she is a Director, Officer,
Employee or Agent of the Corporation.
9.02 Other Indemnification. (a) In cases not included under
Section 9.01, the Corporation shall indemnify a Director, Officer, Employee or
Agent against all liabilities and expenses incurred by the Director, Officer,
Employee or Agent in a proceeding to which the Director, Officer, Employee or
Agent was a party because he or she is a Director, Officer, Employee or Agent
of the Corporation, unless liability was incurred because the Director,
Officer, Employee or Agent breached or failed to perform a duty he or she owes
to the Corporation and the breach or failure to perform constitutes any of the
following:
(1) A willful failure to deal fairly with the Corporation or
its shareholders in connection with a matter in which the Director,
Officer, Employee or Agent has a material conflict of interest.
(2) A violation of criminal law, unless the Director,
Officer, Employee or Agent had reasonable cause to believe his or
her conduct was lawful or no reasonable cause to believe his or her
conduct was unlawful.
(3) A transaction from which the Director, Officer, Employee
or Agent derived an improper personal profit.
(4) Willful misconduct.
(b) Determination of whether indemnification is required under this
Section shall be made pursuant to Section 9.05.
(c) The termination of a proceeding by judgment, order, settlement
or conviction, or upon a plea of no contest or an equivalent plea, does not,
by itself, crate a presumption that indemnification of the Director, Officer,
Employee or Agent is not required under this Section.
9.03 Written Request. A Director, Officer, Employee or Agent who
seeks indemnification under Sections 9.01 or 9.02 shall make a written request
to the Corporation.
9.04 Nonduplication. The Corporation shall not indemnify a
Director, Officer, Employee or Agent under Sections 9.01 or 9.02 if the
Director, Officer, Employee or Agent has previously received indemnification
or allowance of expenses from any person, including the Corporation, in
connection with the same proceeding. However, the Director, Officer, Employee
or Agent has no affirmative duty to look to any other person for
indemnification from such other person.
9.05 Determination of Right to Indemnification.
(a) Unless otherwise provided by the articles of incorporation or
by written agreement between the Director, Officer, Employee or Agent, and the
Corporation, the Director, Officer, Employee or Agent seeking indemnification
under Section 9.02 shall select one of the following means for determining his
or her right to indemnification:
(1) By a majority vote of a quorum of the Board of Directors
consisting of Directors not at the time parties to the same or
related proceedings. If a quorum of disinterested Directors cannot
be obtained, by majority vote of a committee duly appointed by the
Board of Directors and consisting solely of two or more Directors
not at the time parties to the same or related proceedings.
Directors who are parties to the same or related proceedings may
participate in the designation of members of the committee.
(2) By independent legal counsel selected by a quorum of the
Board of Directors or its committee in the manner prescribed in sub.
(1) or, if unable to obtain such a quorum or committed, by a
majority vote of the full Board of Directors, including Directors
who are parties to the same or related proceedings.
(3) By a panel of three arbitrators consisting of one
arbitrator selected by those Directors entitled under sub. (2) to
select independent legal counsel, one arbitrator selected by the
Director or Officer seeking indemnification and one arbitrator
selected by the two arbitrators previously selected.
(4) By an affirmative vote of the majority of shares
represented at a meeting of shareholders at which a quorum is
present. Shares owned by, or voted under the control of, persons
who are at the time parties to the same or related proceedings,
whether as plaintiffs or defendants or in any other capacity, may
not be voted in making the determination.
(5) By a court under Section 9.08.
(6) By any other method provided for in any additional right
to indemnification permitted under Section 9.07.
(b) In any determination under (a), the burden of proof is on the
Corporation to prove by clear and convincing evidence that indemnification
under Section 9.02 should not be allowed.
(c) A written determination as to a Director, Officer, Employee or
Agent's indemnification under Section 9.02 shall be submitted to both the
Corporation and the Director, Officer, Employee or Agent within 60 days of the
selection made under (a).
(d) If it is determined that indemnification is required under
Section 9.02, the Corporation shall pay all liabilities and expenses not
prohibited by Section 9.04 within 10 days after receipt of the written
determination under (c). The Corporation shall also pay all expenses incurred
by the Director, Officer, Employee or Agent, in the determination process
under (a).
9.06 Advance Expenses. Within 10 days after receipt of a written
request by a Director, Officer, Employee or Agent who is a party to a
proceeding, the Corporation shall pay or reimburse his or her reasonable
expenses as incurred if the Director, Officer, Employee or Agent provides the
Corporation with all of the following:
(1) A written affirmation of his or her good faith belief
that he or she has not breached or failed to perform his or her
duties to the Corporation.
(2) A written undertaking, executed personally or on his or
her behalf, to repay the allowance (together with reasonable
interest thereon) to the extent that it is ultimately determined
under Section 9.05 that indemnification under Section 9.02 is not
required and that indemnification is not ordered by a court under
Section 9.08(b)(2). The undertaking under this subsection shall be
an unlimited general obligation of the Director, Officer, Employee
or Agent, and may be accepted without reference to his or her
ability to repay the allowance. The undertaking may be secured or
unsecured.
9.07 Nonexclusivity. (a) Except as provided in (b), Sections
9.01, 9.02 and 9.06 do not preclude any additional right to indemnification or
allowance of expenses that a Director, Officer, Employee or Agent may have
under any of the following:
(1) The articles of incorporation.
(2) A written agreement between the Director, Officer,
Employee or Agent, and the Corporation.
(3) A resolution of the Board of Directors.
(4) A resolution, after notice, adopted by a majority vote
of all of the Corporation's voting shares then issued and
outstanding.
(b) Regardless of the existence of an additional right under (a),
the Corporation shall not indemnify a Director, Officer, Employee or Agent, or
permit a Director, Officer, Employee or Agent to retain any allowance of
expenses, unless it is determined by or on behalf of the Corporation that the
Director, Officer, Employee or Agent did not breach or fail to perform a duty
he or she owes to the Corporation which constitutes conduct under Section
9.02(a)(1), (2), (3) or (4). A Director, Officer, Employee or Agent who is a
party to the same or related proceeding for which indemnification or an
allowance of expenses is sought may not participate in a determination under
this subsection.
(c) Sections 9.01 to 9.12 do not affect the Corporation's power to
pay or reimburse expenses incurred by a Director, Officer, Employee or Agent
in any of the following circumstances.
(1) As a witness in a proceeding to which he or she is not a
party.
(2) As a plaintiff or petitioner in a proceeding because he
or she is or was a Director, Officer, Employee or Agent of the
Corporation.
9.08 Court-Ordered Indemnification. (a) Except as provided
otherwise by written agreement between the Director, Officer, Employee or
Agent, and the Corporation, a Director, Officer, Employee or Agent who is a
party to a proceeding may apply for indemnification to the court conducting
the proceeding or to another court of competent jurisdiction. Application may
be made for an initial determination by the court under Section 9.05(a)(5) or
for review by the court of an adverse determination under Section 9.05(a)(1),
(2), (3), (4) or (6). After receipt of an application, the court shall give
any notice it considers necessary.
(b) The court shall order indemnification if it determines any of
the following:
(1) That the Director, Officer, Employee or Agent is
entitled to indemnification under Section 9.01 or 9.02.
(2) That the Director, Officer, Employee or Agent is fairly
and reasonably entitled to indemnification in view of all the
relevant circumstances, regardless of whether indemnification is
required under Section 9.02.
(c) If the court determines under (b) that the Director, Officer,
Employee or Agent is entitled to indemnification, the Corporation shall pay
the Director, Officer, Employee or Agent's expenses incurred to obtain the
court-ordered indemnification.
9.09 Insurance. The Corporation may purchase and maintain
insurance on behalf of an individual who is a Director, Officer, Employee or
Agent of the Corporation against liability asserted against or incurred by the
individual in his or her capacity as a Director, Officer, Employee or Agent,
regardless of whether the Corporation is required or authorized to indemnify
or allow expenses to the individual against the same liability under Section
9.01, 9.02, or 9.06.
9.10 Securities Law Claims. (a) Pursuant to the public policy of
the State of Wisconsin, the Corporation shall provide indemnification,
allowance of expenses and insurance for any liability incurred in connection
with a proceeding involving securities regulation described under (b) to the
extent required or permitted under Sections 9.01 to 9.09.
(b) Sections 9.01 to 9.09 apply, to the extent applicable to any
other proceeding, to any proceeding involving a federal or state statute, rule
or regulation regulating the offer, sale or purchase of securities, securities
brokers or dealers, or investment companies or investment advisers.
9.11 Liberal Construction. In order for the corporation to obtain
and retain qualified Directors, Officers, Employees and Agents, the foregoing
provisions shall be liberally administered in order to afford maximum
indemnification of Directors, Officers, Employees or Agents and, accordingly,
the indemnification above provided for shall be granted in all cases unless to
do so would clearly contravene applicable law, controlling precedent or public
policy.
9.12 Definitions Applicable to This Article.
(a) "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise
that directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Corporation.
(b) "Corporation" means this Corporation and any domestic or
foreign predecessor of this Corporation where the predecessor corporation's
existence ceased upon the consummation of a merger or other transaction.
(c) "Director, Officer, Employee or Agent" means any of the
following:
(1) A natural person who is or was a director, officer,
employee or agent (including attorneys) of this Corporation;
provided, however, that no attorney of the Corporation shall be
considered an agent with respect to those actions taken by such
attorney solely in his capacity as an independent contractor to the
Corporation.
(2) A natural person who, while a director, officer,
employee or agent, of this Corporation, is or was serving at the
Corporation's request as a director, officer, employee, agent,
partner, trustee, member of any governing or decision making
committee, of another Corporation or foreign corporation,
partnership, joint venture, trust or other enterprise.
(3) A natural person who, while a director, officer,
employee or agent of this Corporation, is or was serving an employee
benefit plan because his or her duties to the Corporation also
impose duties on, or otherwise involve services by, the person to
the plan or to participants or beneficiaries of the plan.
(4) Unless the context requires otherwise, the estate or
personal representative of a Director, Officer, Employee or Agent.
For purposes of this Article, it shall be conclusively presumed that any
Director, Officer, Employee or Agent serving as a director, officer employee,
agent, partner, trustee, member of any governing or decision making committee
of an Affiliate shall be so serving at the request of the Corporation.
(d) "Expenses" include fees, costs, charges, disbursements,
attorney fees and other expenses incurred in connection with a proceeding.
(e) "Liability" includes the obligation to pay a judgment,
settlement, penalty, assessment, forfeiture or fine, including an excise tax
assessed with respect to an employee benefit plan, and reasonable expenses.
(f) "Party" includes a natural person who was or is, or who is
threatened to be made, a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending or completed civil,
criminal, administrative or investigative action, suit, arbitration or other
proceeding, whether formal or informal, which involves foreign, federal, state
or local law and which is brought by or in the right of the Corporation or by
any other person.
ARTICLE X. SEAL
There shall be no corporate seal.
ARTICLE XI. AMENDMENTS
11.01 By Shareholders. These by-laws may be altered, amended or
repealed and new by-laws may be adopted by the shareholders by affirmative
vote of not less than a majority of the shares preset or represented at an
annual or special meeting of the shareholders at which a quorum is in
attendance.
11.02 By Directors. These by-laws may also be altered, amended or
repealed and new by-laws may be adopted by the Board of Directors by
affirmative vote of a majority of the number of Directors present at any
meeting at which a quorum is in attendance; but no by-law adopted by the
shareholders or subscribers shall be amended or repealed by the Board of
Directors if the by-law so adopted so provides.
11.03 Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with
the by-laws then in effect but is taken or authorized by affirmative vote of
not less than the number of shares or the number of Directors required to
amend the by-laws so that the by-laws would be consistent with such action,
shall be given the same effect as though the by-laws had been temporarily
amended or suspended so far, but only so far, as is necessary to permit the
specific action so taken or authorized.
EXHIBIT 10.1
BONE CARE INTERNATIONAL, INC.
1996 STOCK OPTION PLAN
1. Plan. To provide incentives to officers, key employees and
consultants of Bone Care International, Inc. (the "Company") and its
subsidiaries from time to time, and members of the Board of Directors of the
Company (the "Board") to contribute to the success and prosperity of the
Company, based upon the ownership of the common stock, no par value, of the
Company ("Common Stock"), the Committee hereinafter designated, may grant
nonqualified stock options to officers, key employees, consultants and
eligible members of the Board on the terms and subject to the conditions
stated in this Plan.
2. Eligibility. Officers, key employees and consultants of the Company
and its subsidiaries and members of the Board who are not employees of the
Company ("non-employee directors") shall be eligible, upon selection by the
Committee, to receive stock options as the Committee, in its discretion, shall
determine.
3. Shares Issuable. The maximum number of shares of Common Stock to be
available under this Plan pursuant to all grants of stock options hereunder
shall be 500,000, subject to adjustment in accordance with Section 5. Shares
of Common Stock subject to a stock option granted hereunder, which are not
issued by reason of the expiration, cancellation or other termination of such
stock option, shall again be available for future grants of stock options
under this Plan.
Shares of Common Stock to be issued may be authorized and unissued shares
of Common Stock, treasury stock, or a combination thereof.
To the extent required by Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and the rules and regulations thereunder, the
maximum number of shares of Common Stock with respect to which options may be
granted during any calendar year to any person shall be 100,000, subject to
adjustment as provided in Section 5.
4. Administration of the Plan. This Plan shall be administered by a
committee designated by the Board (the "Committee") consisting of two or more
members of the Board, each of whom shall be a "Non-Employee Director," within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and an "outside director" within the meaning of
Section 162(m) under the Code.
The Committee shall, subject to the terms of this Plan, establish
eligibility guidelines, select officers, key employees, consultants and
non-employee directors for participation in this Plan and determine the number
of
shares of Common Stock subject to a stock option granted hereunder, the
exercise price for such shares of Common Stock, the time and conditions of
vesting or exercise and all other terms and conditions of the stock option,
including, without limitation, the form of the option agreement. The
Committee may establish rules and regulations for the administration of the
Plan, interpret the Plan and impose, incidental to the grant of a stock
option, conditions with respect to the grant or award of stock options or
competitive employment or other activities not inconsistent with or
conflicting with this Plan. All such rules, regulations and interpretations
relating to this Plan adopted by the Committee shall be conclusive and binding
on all parties. All grants of stock options under this Plan shall be
evidenced by written agreements between the Company and the optionees, and no
such grant shall be valid until so evidenced.
5. Changes in Capitalization. Appropriate adjustments shall be made by
the Committee in the maximum number of shares to be issued under the Plan and
the maximum number of shares which are subject to any stock option granted
hereunder, and the exercise price therefor, to give effect to any stock
splits, stock dividends and other relevant changes in the capitalization of
the Company occurring after the effective date of this Plan (which shall not
include the sale by the Company of shares of Common Stock or securities
convertible into shares of Common Stock).
6. Effective Date and Term of Plan. This Plan shall be submitted to the
shareholders of the Company for approval and, if approved, shall become
effective on the date thereof; provided, however, that this Plan and any
options granted hereunder shall be null and void in the event the Company's
registration statement under Section 12 of the Exchange Act does not become
effective on or prior to December 31, 1996. This Plan shall terminate ten
years after it becomes effective unless terminated prior thereto by action of
the Board. No further grants shall be made under this Plan after termination,
but termination shall not affect the rights of any optionee under any grants
made prior to termination.
7. Amendments. This Plan may be amended by the Board in any respect,
except that no amendment may be made without shareholder approval if such
amendment would (a) increase the maximum number of shares of Common Stock
available for issuance under this Plan (other than as provided in Section 5)
or (b) otherwise require shareholder approval.
8. Grants of Stock Options. Options to purchase shares of Common Stock
may be granted hereunder to such eligible officers, key employees,
consultants, and non-employee directors as may be selected by the Committee.
9. Option Price. The option price per share of Common Stock purchasable
upon exercise of an option granted hereunder shall be determined by the
Committee; provided, however, that the option price per share of Common Stock
purchasable upon exercise of an option grant under this Plan shall be 100% of
the fair market value of a share of Common Stock on the date of grant of such
option. For purposes hereof, "fair market value" shall be determined by the
Committee.
10. Stock Option Period. Each stock option granted hereunder may be
granted at any time on or after the effective date, and prior to the
termination, of this Plan. Except as set forth in Section 8(b), the Committee
shall determine whether such stock option shall become exercisable in
cumulative or non-cumulative installments or in full at any time. An
exercisable stock option may be exercised in whole or in part with respect to
whole shares of Common Stock only. The period for the exercise of each stock
option shall be determined by the Committee.
11. Exercise of Stock Options. (a) Upon exercise, the option price may
be paid in cash, in previously owned shares of Common Stock (which the
optionee has held for at least six months or acquired on the open market and
which the optionee owns free and clear from all encumbrances) having a fair
market value on the date of exercise equal to the option price, or in a
combination thereof. The Company may arrange or approve of a cashless option
exercise procedure which complies with the provisions of Section 16 of the
Exchange Act and the rules and regulations thereunder.
(b) An option may be exercised during an optionee's continued employment
with the Company or one of its subsidiaries, or service on the Board, as the
case may be, and, except in the event of such optionee's death, within a
period of 30 days following termination of such employment or service, but
only to the extent exercisable and within the term of such option at the time
of the termination of such employment or service; provided, however, that if
employment of the optionee by the Company or one of its subsidiaries or
service on the Board shall have terminated by reason of retirement after age
60, then the option may be exercised within a period not in excess of one year
following such termination of employment or service on the Board, but only to
the extent exercisable and within the term of such option at the time of such
termination of employment or service.
(c) No option shall be transferable except that in the event of the death
of an optionee (i) during employment or service on the Board, as the case may
be, (ii) within a period of one year after termination of employment or
service on the Board, as the case may be, by reason of retirement after age 60
at a time when the option is otherwise exercisable or (iii) within 30 days
after termination of employment or service on the Board, as the case may be,
for any other reason, outstanding stock options may be exercised, but only to
the extent exercisable and within the term of such option prior to the
application of the Section 11, by the executor, administrator or personal
representative of such deceased optionee within one year of the death of such
optionee in the case of clauses (i) and (ii) or within 90 days of the death of
such optionee in the case of clause (iii).
12. Acceleration of Options upon a Change in Control. The following
provisions shall apply in the event of a "Change in Control":
(a) In the event of a Change in Control, any stock options not
previously exercisable in full shall become fully exercisable.
(b) For purposes hereof, "Change in Control" means:
(1) The acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 50% or more of the then outstanding
shares of Common Stock (the "Outstanding Common Stock"); provided, however,
that the following acquisitions shall not constitute a Change in Control: (A)
any acquisition by the Company, (B) any acquisition by an employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (C) any acquisition by an underwriter
or underwriters as part of a bona fide public distribution of securities of
the Company or (D) any acquisition by any Person which beneficially owned as
of the effective date of this Plan, 30% or more of the outstanding Common
Stock; and provided further that, for purposes of clause (A), if any Person
(other than the Company or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company) shall become the beneficial owner of 50% or more of the outstanding
Common Stock by reason of an acquisition by the Company and such Person shall,
after such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Common Stock and such beneficial
ownership is publicly announced, such additional beneficial ownership shall
constitute a Change in Control;
(2) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; provided, however, that any individual who becomes a director of
the Company subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed
to have been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a result
of an actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on behalf of
any Person other than the Board shall be deemed to have been a member of the
Incumbent Board;
(3) Approval by the shareholders of the Company of a reorganization,
merger or consolidation unless, in any such case, immediately after such
reorganization, merger or consolidation, (i) more than 50% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 50% of the combined
voting power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals or
entities who were the beneficial owners, respectively, of the Outstanding
Common Stock immediately prior to such reorganization, merger or consolidation
and in substantially the same proportions relative to each other as their
ownership, immediately prior to such reorganization, merger or consolidation,
of the Outstanding Common Stock, (ii) no Person (other than the Company, any
employee plan (or related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or consolidation (or
any corporation controlled by the Company) and any Person which beneficially
owned, immediately prior to such reorganization, merger or consolidation,
directly or indirectly, 30% or more of the Outstanding Common Stock)
beneficially owns, directly or indirectly, 50% or more of the then outstanding
shares of common stock of such corporation or 50% or more of the combined
voting power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors and (iii) at least a majority
of the members of the board of directors of the corporation resulting from
such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement or action of the
Board providing for such reorganization, merger or consolidation; or
(4) Approval by the shareholders of the Company of (i) a plan of complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company other
than to a corporation with respect to which, immediately after such sale or
other disposition, (A) more than 50% of the then outstanding shares of common
stock thereof and more than 50% of the combined voting power of the then
outstanding securities thereof entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common Stock immediately prior to
such sale or other disposition and in substantially the same proportions
relative to each other as their ownership, immediately prior to such sale or
other disposition, of the Outstanding Common Stock, (B) no Person (other than
the Company, any employee benefit plan (or related trust) sponsored or
maintained by the Company or such corporation (or any corporation controlled
by the Company) and any Person which beneficially owned, immediately prior to
such sale or other disposition, directly or indirectly, 30% or more of the
Outstanding Common Stock) beneficially owns, directly or indirectly, 50% or
more of the then outstanding shares of common stock thereof or 50% or more of
the combined voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors and (C) at least a majority of
the members of the board of directors thereof were members of the Incumbent
Board at the time of the execution of the initial agreement or action of the
Board providing for such sale or other disposition.
Exhibit 11
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Statement Regarding Computation of Loss Per Share
(Unaudited)
Three months ended Six months ended
December 31,December 31, December 31,December 31,
1996 1995 1996 1995
---------- ----------- ------------ -----------
Net loss $ (776,358) $ (325,685) $(1,072,360) $ (501,691)
========== =========== ============ ===========
Weighted average number of common
shares 4,353,691 2,655,017 4,353,691 1,751,980
========== =========== ============ ===========
Net loss per common share $(0.18) $(0.12) $(0.25) (0.29)
========== =========== =========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from Form 10-Q for the nine months ended
September 30, 1996, and is qualified in its entirety by
reference to such financial statements.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 10,091
<SECURITIES> 0
<RECEIVABLES> 36
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,179
<PP&E> 302
<DEPRECIATION> 207
<TOTAL-ASSETS> 11,385
<CURRENT-LIABILITIES> 275
<BONDS> 0
<COMMON> 11,394
0
0
<OTHER-SE> 3,524
<TOTAL-LIABILITY-AND-EQUITY> 11,385
<SALES> 36
<TOTAL-REVENUES> 36
<CGS> 35
<TOTAL-COSTS> 1,390
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,072)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,072)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,072)
<EPS-PRIMARY> (0.25)
<EPS-DILUTED> (0.25)
</TABLE>
