UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
/ / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
-------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
From the transition period from to
----------- -------------
Commission File Number: 0-27854
BONE CARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1527471
(State of (IRS Employer
Incorporation) Identification No.)
One Science Court
Madison, Wisconsin 53711
(Address, including zip code of
Registrant's principal executive offices)
608-236-2500
(Registrants telephone number, including area code)
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 October 29, 1999, 11,402,454 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 September 30, 1999
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION Page
----
Item 1 Financial statements
Consolidated Balance Sheets
September 30, 1999, and June 30, 1999. . . . . . . . . . . . . 3
Consolidated Statements of Operations
Three Months Ended September 30, 1999
and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows
Three Months Ended September 30, 1999
and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . . . 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . 8
Item 3 Quantitative and Qualitative Disclosures About Market Risk . . 9
PART II - OTHER INFORMATION
Item 1 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 10
Item 2 Changes in Securities and Use of Proceeds. . . . . . . . . . . 10
Item 3 Defaults Upon Senior Securities. . . . . . . . . . . . . . . . 10
Item 4 Submission of Matters to a Vote of Security Holders. . . . . . 10
Item 5 Other Information. . . . . . . . . . . . . . . . . . . . . . . 10
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Balance Sheets
- -------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------
September 30, June 30,
1999 1999
- -------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 5,722,579 $ 7,313,551
Inventory 1,252,454 1,119,262
Other current assets 266,882 110,017
- -------------------------------------------------------------------------------
Total current assets 7,241,915 8,542,830
Property, plant and equipment--at cost:
Leasehold improvements 97,319 97,319
Furniture and fixtures 103,851 101,144
Machinery and other equipment 596,876 579,008
- -------------------------------------------------------------------------------
798,046 777,471
Less accumulated depreciation 504,044 467,879
- -------------------------------------------------------------------------------
294,002 309,592
Patent fees, net of accumulated amortization
of $693,013 at September 30, 1999, and $645,013
at June 30, 1999 989,593 862,645
Excess of cost over fair value of net assets
acquired, net of accumulated amortization
of $844,218 at September 30, 1999, and
$821,856 at June 30, 1999 515,699 538,061
Other non-current assets 87,564 50,133
- -------------------------------------------------------------------------------
$ 9,128,773 $10,303,261
===============================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Balance Sheets
- -------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
- -------------------------------------------------------------------------------
September 30, June 30,
1999 1999
- -------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 801,726 $ 202,686
Accrued liabilities:
Accrued clinical study and
research costs 251,852 171,988
Compensation payable 96,524 43,311
Other 119,852 43,477
Deferred Revenue 125,000 125,000
- -------------------------------------------------------------------------------
Total current liabilities 1,394,954 586,462
Shareholders' equity:
Preferred stock--authorized 2,000,000
shares of $.001 par value; none issued - -
Common stock--authorized 28,000,000 shares
of no par value; issued and outstanding
10,173,396 shares at September 30, 1999
and June 30, 1999 11,393,883 11,393,883
Additional paid-in capital 14,119,761 14,119,761
Accumulated deficit (17,779,825) (15,796,845)
- -------------------------------------------------------------------------------
7,733,819 9,716,799
- -------------------------------------------------------------------------------
$ 9,128,773 $10,303,261
===============================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
- -------------------------------------------------------------------------------
Three months ended
September 30, September 30,
1999 1998
- -------------------------------------------------------------------------------
Revenues $ --- $ ---
- -------------------------------------------------------------------------------
Operating Expens
Cost of sales --- ---
Research and development 993,008 885,707
Sales and marketing 780,338 367,916
General and administrative 298,808 353,621
- -------------------------------------------------------------------------------
2,072,154 1,607,244
Loss from operations (2,072,154) (1,607,244)
- -------------------------------------------------------------------------------
Interest income 89,174 185,789
- -------------------------------------------------------------------------------
Net Loss $(1,982,980) $(1,421,455)
===============================================================================
Net loss per common share - basic $ (0.19) $ (0.15)
===============================================================================
Weighted average number of
common shares 10,173,396 9,789,826
===============================================================================
See accompanying notes to consolidated financial statements.
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
- -------------------------------------------------------------------------------
Three months ended
September 30, September 30,
1999 1998
- -------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $(1,982,980) $ (1,421,455)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 106,527 106,812
Changes in assets and liabilities:
Inventory (133,192) (316,792)
Other current assets (156,865) (118,013)
Accounts payable 599,040 530,081
Accrued liabilities 209,452 (19,214)
Other (37,431) 9,408
- -------------------------------------------------------------------------------
Net cash used in operating activities (1,395,449) (1,229,173)
- -------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property,
plant and equipment (20,575) (50,972)
Patent fees (174,948) (55,441)
- -------------------------------------------------------------------------------
Net cash used in investing activities $(195,523) $ (106,413)
- -------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from exercise of stock options --- 4,175
Net proceeds from issuance of common stock --- 10,567,504
- -------------------------------------------------------------------------------
Net cash provided by financing activities --- 10,571,679
- -------------------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents (1,590,972) 9,236,093
Cash and cash equivalents at
beginning of period 7,313,551 3,484,374
- -------------------------------------------------------------------------------
Cash and cash equivalents at end of period $5,722,579 $12,720,467
===============================================================================
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 in this report have been prepared
by Bone Care International, Inc. without audit, except for balance sheet
information at June 30, 1999, 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 for annual financial statements. These financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto for the year ended June 30, 1999, included in the
Company's Form 10-K as filed with the Securities and Exchange Commission on
September 20, 1999.
The consolidated balance sheet as of September 30, 1999, the
consolidated statements of operations for the three months ended September 30,
1999 and 1998, and the consolidated statements of cash flows for the three
months ended September 30, 1999 and 1998 are unaudited. In the opinion of
management, these unaudited financial statements include all adjustments,
consisting of normal, recurring adjustments, necessary for a fair presentation
of results for these interim periods.
The results of operations for the three months ended September 30,
1999, are not necessarily indicative of the results to be expected for the
entire fiscal year ending June 30, 2000.
(2) COMMON STOCK
In July 1998, Bone Care completed a directed public offering of
1,326,000 shares of common stock at a price of $8.00 per share. Proceeds of
$10,269,934, net of offering costs, were received from the sale. Certain
directors of the Company purchased 276,000 of the shares sold.
(3) NET LOSS PER SHARE
Net loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the period. Diluted
per share data is not presented as the effect of potentially issuable common
shares would be antidilutive.
(4) SUBSEQUENT EVENT
In October 1999, Bone Care completed a directed public offering of
1,229,058 shares of common stock at a price of $9.02 per share. Proceeds of
approximately $10,900,000, net of offering costs, were received from the sale.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
- ---------------------
Research and development expenses increased to $993,008 in the three
months ended September 30, 1999, from $885,707 in the three months ended
September 30, 1998. The increase was due to a shift in Bone Care's research and
development expenditures from concluded clinical studies to development of
manufacturing capabilities for Hectorol(Registered Trademark)Capsules and
expanded regulatory efforts.
Sales and marketing expenses increased $412,422 to $780,338 in the three
months ended September 30, 1999, from $367,916 in the three months ended
September 30, 1998. The increase was attributable to pre-marketing activities
relating to the October 1999 U.S. launch of Hectorol Capsules.
General and administrative expenses decreased $54,813 to $298,808 in the
three months ended September 30, 1999, from $353,621 in the three months ended
September 30, 1998. The three months ended September 30, 1998 included
expenditures relating to advisory services not incurred during the three months
ended September 30, 1999.
Bone Care expects total costs and expenses to continue increasing in the
future due to commercialization activities associated with Hectorol Capsules,
expansion of Hectorol Capsules into new indications, and development and
ultimate launch of the injectable formulation of Hectorol.
Interest income decreased $96,615 to $89,174 in the three months ended
September 30, 1999, from $185,789 in the three months ended September 30, 1998.
The decrease was due to net lower average cash balances during the three months
ended September 30, 1999.
Liquidity and Capital Resources
- -------------------------------
During the three months ended September 30, 1999, cash and cash
equivalents decreased $1,590,972 to $5,722,579. During the three months ended
September 30, 1998, cash and cash equivalents increased $9,236,093 to
$12,720,467. The increase in the period ended September 30, 1998 was primarily
due to the receipt of net proceeds from the July 1998 common stock offering of
1,326,000 shares of common stock at a price of $8.00 per share. During the
three months ended September 30, 1998, Bone Care received net proceeds of
approximately $10,568,000 from the sale after deducting offering costs. During
the three months ended September 30, 1999 and 1998, cash used in operating and
investing activities aggregated $1,590,972 and $1,335,586, respectively. The
increase in the use of cash of $255,386 was due primarily to pre-marketing
activities associated with the introduction of Hectorol Capsules.
In October 1999, a directed public offering of 1,229,058 shares of common
stock was completed at a price of $9.02 per share. Proceeds of approximately
$10,900,000, net of offering costs, were received from the sale.
We do not anticipate generating sufficient positive cash flows to fund our
operations until we achieve significant revenues from the sale of Hectorol
Capsules and, if approved by the FDA, the injectable formulation of Hectorol.
We have expended, and expect to continue to expend in the future, substantial
funds for our research and development programs; preclinical and clinical
testing; regulatory processes, including of completion of FDA post-approval
Phase 4 commitments for Hectorol Capsules and pursing FDA approval of the
injectable formulation of Hectorol; manufacturing expenses; product launch and
marketing programs; and other operating expenses.
Bone Care's capital requirements will depend on numerous factors,
including the progress of its research and development programs; the progress
of preclinical and clinical testing; the time and cost involved in obtaining
regulatory approvals; the cost of filing, prosecuting, defending and enforcing
any patent claims and other intellectual property rights; competing
technological and market developments; changes and developments in Bone Care's
existing licensing relationships and the terms of any new collaborative,
licensing, co-promotion or distribution arrangements that Bone Care may
establish; the progress of commercialization and marketing activities; the cost
of manufacturing preclinical and clinical products; and other factors not
within our control. Bone Care believes that the current level of cash and cash
equivalents should be sufficient to fund its operations through at least
December 2000.
Year 2000 Compliance
- --------------------
Many currently installed computer systems and software products are coded
to accept only two digit entries in the date code field. To distinguish 21st
century from 20th century dates, these date code fields must be able to accept
four-digit entries.
We have reviewed our existing financial and other business information
systems and believe that our computer systems will be able to manage and
manipulate all material data involving the transition from 1999 to 2000 without
functional or data abnormality and without inaccurate results related to such
data.
It is possible that third parties, such as suppliers or contract research
institutions, may have noncompliant computer systems or programs which may not
interface properly with Bone Care's computer systems or which may otherwise
result in a disruption of Bone Care's operations.
We currently anticipate that the expenses and capital expenditures
associated with our year 2000 compliance program will not have a material
effect on our financial position or results of operations. Although we believe
that we will be able to achieve year 2000 compliance through our efforts, there
can be no assurance that these efforts will be successful. We could be
adversely affected if we or third parties fail to successfully achieve year
2000 compliance. In particular, a disruption of our commercialization efforts
for Hectorol Capsules could have a material effect on our financial position
and results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our sales from inception to date have been made to U.S. customers and, as
a result, we have not had any exposure to factors such as changes in foreign
currency exchange rates or weak economic conditions in foreign markets.
However, in future periods, we expect to sell in foreign markets, including
Europe and Asia. As our sales are made in U.S. dollars, a strengthening of the
U.S. dollar could make our products less competitive in foreign markets. At
September 30, 1999, we did not hold any short- or long-term investments other
than short-term investment grade municipal securities and, therefore, did not
have any market risk exposure related to changes in interest rates. Therefore,
no quantitative tabular disclosures are required.
PART II - OTHER INFORMATION
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Item 1. Legal Proceedings
Bone Care may be a defendant from time to time in actions
arising out of our ordinary course of business operations. In the
opinion of management, the outcome of pending claims is not likely
to have a material adverse effect on our financial position or
results of operations.
Item 2. Changes in Securities and Use of Proceeds
In connection with a directed public offering of 1,326,000
shares of common stock in 1998, Bone Care filed a Registration
Statement on Form S-1, SEC File No. 333-43923 ("Registration
Statement"), which was declared effective by the Commission on July
22, 1998. Net proceeds of $10,269,934, after deducting offering
costs, were received from the sale.
Through September 30, 1999, Bone Care has used approximately
$5,000,000 of the net proceeds from the offering. All unused net
proceeds have been invested in short-term, investment grade,interest-
bearing financial instruments. The use of proceeds from the offering
does not represent a material change in the use of proceeds described
in the prospectus which is part of the Registration Statement.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
In addition to the historical information included in this
Quarterly Report on Form 10-Q, the Quarterly Report contains
"forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933. These
statements are based on management's beliefs as well as assumptions
made by and information currently available to management. Such
forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of Bone Care to be materially different
from any future results, performance, or achievements expressed or
implied by such forward-looking statements. Such factors include,
among others, our early stage of development, our dependence on our
ability to obtain regulatory approvals of intravenous Hectorol, the
uncertainty of our future profitability, the uncertainty of
regulatory approvals of any drugs developed by Bone Care, uncertainty
regarding ongoing governmental regulation, our ability to obtain
regulatory approvals in foreign countries, the uncertainty of our
ability to protect our intellectual property, our ability to avoid
infringing upon the intellectual property of third parties, the
uncertainty related to pricing and reimbursement of our products,
healthcare reform and changes in the health care industry, the
intense competition in the pharmaceutical and biotechnology
industries, our potential need for additional partners or
collaborators, our future capital needs and uncertainty of additional
financing, our lack of manufacturing capabilities and limited sales
and marketing experience, product liability risks, and our ability to
retain and attract personnel. Readers should also carefully review
the risk factors set forth in other reports or documents Bone Care
has filed from time to time with the Securities and Exchange
Commission. Given these uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. We disclaim
any obligation to update any such factors or to publicly announce any
revisions to any of the forward-looking statements contained herein
to reflect future events or developments.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits furnished:
(3.2) By-Laws of Registrant
(10.1) Incentive Stock Option Plan (as amended)
(10.2) 1996 Stock Option Plan (as amended)
(10.6) Agreement, effective October 11, 1999, by and
between The State of Wisconsin Investment
Board and Bone Care
(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 September 30, 1999.
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: November 15, 1999 /s/ Charles W. Bishop
- ------------------------ -------------------------
Charles W. Bishop
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 15, 1999 /s/ Dale W. Gutman
- ------------------------ --------------------
Dale W. Gutman
Vice President - Finance
(Principal Financial and
Accounting Officer)
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Exhibit Index
For the Quarterly Period Ended September 30, 1999
No. Description
- --- -----------
3.2 By-Laws of Registrant
10.1 Incentive Stock Option Plan (as amended)
10.2 1996 Stock Option Plan (as amended)
10.6 Agreement, effective October 11, 1999, by and between The State
of Wisconsin Investment Board and Bone Care
11 Statement Regarding Computation of Loss Per Share
27 Financial Data Schedule
Exhibit 3.2
BONE CARE INTERNATIONAL, INC.
BY-LAWS
OF
BONE CARE INTERNATIONAL, INC.
(a Wisconsin corporation)
(As Amended and Restated as of November 1, 1999)
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
2.06 Voting Record . . . . . . . . . . . . . . . . . . . . . . 3
2.07 Quorum and Voting Requirements. . . . . . . . . . . . . . 3
2.08 Conduct of Meetings . . . . . . . . . . . . . . . . . . . 4
2.09 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.10 Voting of Shares. . . . . . . . . . . . . . . . . . . . . 4
2.11 Voting of Shares by Certain Holders . . . . . . . . . . . 4
(a) Other Corporations. . . . . . . . . . . . . . . . . 4
(b) Legal Representatives and Fiduciaries . . . . . . . 4
(c) Pledgees. . . . . . . . . . . . . . . . . . . . . . 5
(d) Treasury Stock and Subsidiaries . . . . . . . . . . 5
(e) Minors. . . . . . . . . . . . . . . . . . . . . . . 5
(f) Incompetents and Spendthrifts . . . . . . . . . . . 5
(g) Joint Tenants . . . . . . . . . . . . . . . . . . . 5
2.12 Waiver of Notice by Shareholders. . . . . . . . . . . . . 5
2.13 Unanimous Consent Without Meeting . . . . . . . . . . . . 5
ARTICLE III. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . 5
3.01 General Powers and Number . . . . . . . . . . . . . . . . 5
3.02 Tenure and Qualifications . . . . . . . . . . . . . . . . 6
3.03 Regular Meetings. . . . . . . . . . . . . . . . . . . . . 6
3.04 Special Meetings. . . . . . . . . . . . . . . . . . . . . 7
3.05 Notice; Waiver. . . . . . . . . . . . . . . . . . . . . . 7
3.06 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.07 Manner of Acting. . . . . . . . . . . . . . . . . . . . . 7
3.08 Conduct of Meetings . . . . . . . . . . . . . . . . . . . 7
3.09 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . 7
3.10 Compensation. . . . . . . . . . . . . . . . . . . . . . . 7
3.11 Presumption of Assent . . . . . . . . . . . . . . . . . . 8
3.12 Committees. . . . . . . . . . . . . . . . . . . . . . . . 8
3.13 Unanimous Consent Without Meeting . . . . . . . . . . . . 8
3.14 Meetings By Telephone Or By Other Communication
Technology. . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV. OFFICERS. . . . . . . . . . . . . . . . . . . . . . . 8
4.01 Number. . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.02 Election and Term of Office . . . . . . . . . . . . . . . 8
4.03 Removal . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.04 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . 9
4.05 Chairman of the Board . . . . . . . . . . . . . . . . . . 9
4.06 President . . . . . . . . . . . . . . . . . . . . . . . . 9
4.07 The Executive Vice President. . . . . . . . . . . . . . . 9
4.08 The Vice Presidents.. . . . . . . . . . . . 9
4.09 The Secretary.. . . . . . . . . . . . . . . . . . . . . . 9
4.10 The Treasurer.. . . . . . . . . . . . . . . . . . . . . .10
4.11 Assistant Secretaries and Assistant Treasurers. . . . . .10
4.12 Other Assistants and Acting Officers. . . . . . . . . . .10
4.13 Salaries. . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS: SPECIAL CORPORATE ACTS . . . . . . . . . . . . .10
5.01 Contracts.. . . . . . . . . . . . . . . . . . . . . . . .10
5.02 Loans.. . . . . . . . . . . . . . . . . . . . . . . . . .11
5.03 Checks, Drafts, etc.. . . . . . . . . . . . . . . . . . .11
5.04 Deposits. . . . . . . . . . . . . . . . . . . . . . . . .11
5.05 Voting of Securities Owned by this Corporation. . . . . .11
ARTICLE VI. CERTIFICATES FOR
SHARES AND THEIR TRANSFER . . . . . . . . . . . . . . . . . . .12
6.01 Certificates for Shares . . . . . . . . . . . . . . . . .12
6.02 Facsimile Signatures and Seal.. . . . . . . . . . . . . .12
6.03 Signature by Former Officers. . . . . . . . . . . . . . .12
6.04 Transfer of Shares. . . . . . . . . . . . . . . . . . . .12
6.05 Restrictions on Transfer. . . . . . . . . . . . . . . . .12
6.06 Lost, Destroyed or Stolen Certificates. . . . . . . . . .12
6.07 Consideration for Shares. . . . . . . . . . . . . . . . .12
6.08 Stock Regulations.. . . . . . . . . . . . . . . . . . . .13
ARTICLE VII. WAIVER OF NOTICE . . . . . . . . . . . . . . . . . .13
ARTICLE VIII. UNANIMOUS CONSENT
WITHOUT A MEETING . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE IX. INDEMNIFICATION . . . . . . . . . . . . . . . . . . .13
9.01 Indemnification for Successful Defense. . . . . . . . . .13
9.02 Other Indemnification.. . . . . . . . . . . . . . . . . .13
9.03 Written Request.. . . . . . . . . . . . . . . . . . . . .14
9.04 Nonduplication. . . . . . . . . . . . . . . . . . . . . .14
9.05 Determination of Right to Indemnification.. . . . . . . .14
9.06 Advance Expenses. . . . . . . . . . . . . . . . . . . . .15
9.07 Nonexclusivity. . . . . . . . . . . . . . . . . . . . . .15
9.08 Court-Ordered Indemnification.. . . . . . . . . . . . . .16
9.09 Insurance.. . . . . . . . . . . . . . . . . . . . . . . .16
9.10 Securities Law Claims.. . . . . . . . . . . . . . . . . .16
9.11 Liberal Construction. . . . . . . . . . . . . . . . . . .16
9.12 Definitions Applicable to This Article. . . . . . . . . .16
ARTICLE X. SEAL
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE XI. AMENDMENTS. . . . . . . . . . . . . . . . . . . . . .17
11.01 By Shareholders. . . . . . . . . . . . . . . . . . . . .17
11.02 By Directors.. . . . . . . . . . . . . . . . . . . . . .17
11.03 Implied Amendments.. . . . . . . . . . . . . . . . . . .18
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
2.01, 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 and in the absence of the Chairman, 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.
5.06 Stock Options. Except for appropriate adjustments
made to give effect to any stock splits, stock dividends or other
relevant changes in the capitalization of the Corporation, the
Corporation shall not, without the approval of the holders of a
majority of the shares present and entitled to vote at a meeting of
shareholders, grant any stock options with an exercise price less than
100% of the fair market value (as determined by the Board of Directors
or a committee of the Board of Directors) of a share of common stock
on the date of grant or reduce the exercise price of any stock option
which was granted under any of the Corporation's existing or future
stock option plans; provided, however, that the foregoing shall not
preclude the Corporation from issuing new stock options with a lower
exercise price granted under a stock option plan to persons holding
stock options from such plan with a higher exercise price; provided,
that if such new stock options with a lower exercise price were
granted in replacement or cancellation of, or in exchange for, such
stock options with a higher exercise price, the stock options with a
higher exercise price would be canceled or surrendered and the shares
underlying such stock options would not be available for re-grant
under such stock option plan.
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 be 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; provided,
however, that 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; and, provided further, that Section 5.06
hereof shall not be altered, amended or repealed by the Board of
Directors.
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
---------------------------
INCENTIVE STOCK OPTION PLAN
BONE CARE INTERNATIONAL,INC.
---------------------------
BONE CARE INTERNATIONAL, INC.
a Wisconsin Corporation
INCENTIVE STOCK OPTION PLAN
- ---------------------------
This Incentive Stock Option Plan (the "Plan") of BONE CARE
INTERNATIONAL, INC., a Wisconsin corporation (the "Company"), is
effective as of the 1st day of January, 1989, and provides for
options, as defined in Section 422A of the Internal Revenue Code of
1986 ("Option" or "Options") for the purchase of Company common stock,
no par value per share, subject to the limitations, provisions and
requirements herein.
SECTION 1. Purpose of the Plan.
-------------------
The Company believes that it is desirable and in its best
interest to adopt an incentive stock option plan to aid in attracting,
developing and retaining key employees and management capable of
contributing to the future growth and operations of the Company, its
parent corporation and subsidiary corporations. The purpose of the
Plan also is to provide a means whereby key employees of the Company
can acquire a proprietary interest in the Company.
SECTION 2. Administration of the Plan.
--------------------------
The Board of Directors of the Company shall constitute a
Committee (the "Plan Committee"), which shall administer the Plan.
The Plan Committee shall construe and interpret the Plan, establish
such rules as it deems necessary for the proper administration of the
Plan and make such determinations and take such other action in
connection with the Plan as it deems necessary and advisable. Subject
to the terms of the Plan, the Plan Committee shall decide the
individuals to whom and the time or times at which Options shall be
granted, the number of shares to be subject to each Option, the
duration of Options and the Option price. Except for such shorter
exercise period hereinafter set forth for 10% Employees (hereinafter
defined), any Options to be granted under the Plan must be granted
within ten years from the effective date of the Plan.
Actions by a majority of the Plan Committee at a meeting at
which a quorum is present shall be the valid acts of the Plan
Committee. No member of the Plan Committee shall be liable for any
action or determination made in good faith with respect to the Plan
or any Option granted under it.
SECTION 3. Maximum Number of Shares Subject to the 1988 Plan.
-------------------------------------------------
The shares to be offered under the Plan shall be the
authorized by unissued shares of common stock, no par value, of the
Company, or issued shares of such common stock which shall have been
reacquired by the Company. The maximum aggregate number of shares of
common stock to be delivered upon exercise of all Options granted
under the Plan shall not exceed One Hundred Twenty-Five (125) shares
(as adjusted for any stock split, stock dividend, or share
reclassification). If any Option granted hereunder shall expire or
terminate for any reason without having been exercised in full, the
unpurchased shares with respect thereto shall again be available for
other Options to be granted under the Plan unless the Plan shall have
been terminated. Notwithstanding the foregoing, except for
appropriate adjustments made to give effect to any stock splits, stock
dividends or other relevant changes in the capitalization of the
Corporation, without the approval by a majority vote of the
shareholders, shares subject to an outstanding stock option that is
replaced, canceled or exchanged for a newly granted stock option with
an option price per share lower than the option price per share of the
outstanding stock option shall not be available for future grants of
Options.
SECTION 4. Selection of Option Holders.
---------------------------
The Plan Committee, from time to time, subject to the terms
and provisions of the Plan, may grant Options to such present and
future key employees of the Company and of its parent and present or
future subsidiaries as the Plan Committee shall determine. In
determining the persons to whom Options shall be granted and the
number of shares to be covered by each Option, the Plan Committee may
take into account the nature of the services rendered by such persons,
their present and potential contributions to the success and growth
of the Company, its parent and subsidiaries, and such other factors
as the Plan Committee, in its discretion, shall deem relevant.
SECTION 5. Option Price.
------------
The purchase price for the shares covered by each Option
granted shall be the fair market value of the shares on the date of
the grant of the Option. However, in the case of any Option granted
to an Employee owning stock possessing more than ten percent (10%) of
the total combined voting power of the Company, or its parent or
subsidiary corporations (a "10% Employee") the purchase price at the
time such Option is granted shall be one hundred ten percent (110%)
of the fair market value of the shares subject to the Option.
Until such time as the Company effects a public offering of
its stock, the fair market value of the shares shall be determined by
the Plan Committee from time to time as Options are granted under the
Plan. The Plan Committee shall use its best efforts in making a good
faith attempt to accurately value the Company's stock in determining
such fair market value. In determining the value of the common stock,
the Plan Committee shall consider recent sales of stock, book value,
earnings and all other relevant factors. After the Company effects
a public offering of its stock, the fair market value shall be equal
to the mean of the high and low prices at which its common stock is
traded on a national exchange or the NASDAQ over the counter market
on the date of the grant. In the event that the Company stock is not
being traded on either a national exchange or NASDAQ, then the Plan
Committee shall value the Company's stock in determining such fair
market value.
SECTION 6. Option Requirements.
-------------------
The Options granted pursuant to the Plan shall be authorized
by the Plan Committee and shall be evidenced in writing in a form
approved by the Plan Committee and shall include the following terms
and conditions:
(a) Option Holder. Each Option shall state the name of the
Option Holder.
(b) Number of Shares. Each Option shall state the number
of shares to which that Option pertains.
(c) Purchase Price. Each Option shall state the Option,
price, which shall be not less than that described in Section 5
hereof.
(d) Payment. Each Option shall state that the Option price
shall be payable upon the exercise of the Option and shall be paid in
cash or by check in United States Dollars.
(e) Length of Option. Each Option to be granted may be
exercised within such period as may be determined by the Plan
Committee but in no event to exceed more than 10 years, except for
Options granted to any 10% Employee which by their terms will not be
exercisable after the expiration of five (5) years from the date such
Options are granted. However, subject to Sections 9 and 12, each
Option shall be exercisable only during such portion of its term as
the Plan Committee shall determine, and only if the Option Holder is
employed by the Company, its parent or a subsidiary of the Company at
the time of such exercise.
(f) Vesting Provisions. Each Option shall state any
conditions or limitations to the exercise of the Option, or part
thereof, including, without limitation, provisions specifying a
vesting schedule for any Option so granted.
(g) Exercise of Option. Each Option Holder shall have the
right to exercise his Option in the manner specified in the agreement
evidencing the granting of such Option. Notwithstanding the preceding
sentence, in the event the employment of an Option Holder terminates
for any reason, including death or retirement, to the extent that the
Option has become vested and otherwise exercisable, the Option Holder
or his estate my exercise any rights the Option Holder would otherwise
have at such date for a period of three (3) months. Any rights not
exercised within said three (3) months from the date of the
terminating event shall be forfeited.
(h) Method of Exercise. Each Option shall be exercised
pursuant to the terms of such Option and pursuant to the terms of the
Plan by giving written notice to the Company at its principal place
of business, accompanied by cash or check in payment of the Option
price for the number of shares specified and paid for. Each Option
shall be exercisable in whole or in part, but not for a fraction of
a share unless the Option is originally granted with respect to a
fraction of a share. The Company shall make delivery of such shares
as soon as possible; provided, however, that if any law or regulation
requires the Company to take action with respect to the shares
specified in such notice before issuance thereof, the date of delivery
of such shares shall then be extended for the period necessary to take
such action.
(i) Employment Requirement. An Option may be exercised by
the Option Holder (1) while he is, and has been continually since the
date of the grant of the Option, an employee of the Company, its
parent or subsidiaries, or (2) within three (3) months after the date
of termination of employment, as provided in Sections 6(q) or (3)
within three (3) months after the Option Holder's death, as provided
in Section 12.
(j) Securities Law Requirements. As further provided in
Section 10, no Option granted under the Plan may be exercised unless
at the time of exercise the common stock to be issued qualifies for
exemption from, or is registered pursuant to, applicable federal and
state securities laws. In the event there shall not then be on file
with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, an effective registration statement, including
a prospectus relating to the optioned shares, the Option Holder will
execute and deliver to the Company prior to receipt by him of any such
shares under this Plan, an investment letter in form and substance
satisfactory to the Plan Committee.
SECTION 7. Limits on Options.
-----------------
The aggregate fair market value (determined at the time an
Option is granted) of stock with respect to which an Option is
exercisable for the first time by such Option Holder during any
calendar year (under all stock option plans of the Company and its
parent and subsidiary corporations) shall not exceed $100,000.
SECTION 8. Termination of Employment.
-------------------------
Termination of employment shall occur on the first date
written notice of termination is given by either the employee or the
Company, without regard to the actual last day of performance of
services. A leave of absence approved in writing by the Board of
Directors shall not be termination of employment for purposes of the
Plan, but Options may not be exercised during any such leave of
absence.
SECTION 9. Exercise Restrictions; Vesting of Options.
-----------------------------------------
The Plan Committee may determine whether to impose, with
respect to any Option granted pursuant to this Plan, conditions or
limitations upon the exercise of the Option so granted including,
without limitation, provisions specifying a vesting scheduled for the
Option so granted.
SECTION 10. Legality.
--------
Anything in the Plan to the contrary notwithstanding, the
Option Holder agrees that he will not exercise the Option and that the
Company will not be obligated to issue any shares pursuant to the Plan
if exercise of the Option or issuance of such shares will constitute
a violation of any law or regulation of a governmental authority
applicable to the Company. Any determination by the Plan Committee
of the Company in this connection shall be binding and conclusive.
The Company shall not be obligated to take affirmative action to cause
exercise of the Option or the issuance of shares pursuant thereto to
comply with such law or regulation.
The Option Holder, and each person who succeeds to the
rights hereunder, agrees that he will not dispose of any of the shares
issued to him pursuant to the exercise of the Option so as to involve
the Company in a violation of the Securities Act of 1933, as amended,
and that in the event there shall not then be on file with the
Securities and Exchange Commission under the Securities Act of 1933,
as amended, an effective registration statement, including a
prospectus, relating to the optioned shares, he will execute and
deliver to the Company, upon receipt by him of any such shares, an
investment letter, in form and substance satisfactory to the Plan
Committee, to the following effect: (a) it is the Option Holder's
intention to acquire and hold such shares for investment and not for
the distribution thereof; (b) he does not have any then present
intention of selling or otherwise disposing of such shares; (c) he
will indemnify the Company for any liability (including all
reasonable costs, expenses and attorneys fees incident thereto) which
it may sustain by reason of any violation of the Securities Act of
1933, as amended, occasioned by any act on the part of the Option
Holder with respect to such shares; and (d) containing such provisions
as the Company reasonably may request. The certificate or
certificates evidencing the optioned shares shall contain the
following legend:
"This stock is subject to restrictions pursuant
to the terms of the Incentive Stock Option Plan
of Bone Care International, Inc. The stock
represented by this certificate has not been
registered under the Securities Act of 1933.
This stock has been acquired for investment and
not with a view to distribution and may not be
mortgaged, pledged, hypothecated, or otherwise
transferred without a registration under the
Securities Act of 1933, or an opinion of counsel
reasonably satisfactory to the Company that such
registration is not required. The corporation
will mail to the Shareholder a copy of the
Incentive Stock Option Plan, without charge,
within five days after a written request
therefor."
Further, these Options cannot be exercised except for common
stock which is exempt, is the subject matter of an exempt transaction,
is registered by description, by coordination, or by qualification,
or at such time is the subject matter of a transaction which has been
registered by description under the Wisconsin Securities Law.
SECTION 11. Non-Transferability of Options.
------------------------------
During the Option Holder's lifetime, the Options shall be
exercisable only by him. The Options shall not be transferable and
shall terminate as provided in this Plan.
SECTION 12. Exercise Upon Death.
-------------------
In the even an Option Holder dies while employed by the
Company or its parent or subsidiary, Options (provided the same are
vested and then otherwise exercisable) may be transferred by operation
of the Option Holder's Will or the laws of descent and distribution,
but the transferee of such Option shall have the only right to
exercise any Options which are vested and then otherwise exercisable,
for a period of three (3) months after the date of the Option Holder's
death.
SECTION 13. Status as Shareholder.
---------------------
Neither the Option Holder nor his executor, administrator,
heirs, or legatees, shall be or have any rights or privileges of a
shareholder of the Company in respect to the shares transferable upon
exercise of any Option, unless and until certificates representing
such shares shall have been endorsed, transferred and delivered and
the transferee has caused his name to be entered as the shareholder
of record on the books of the Company.
SECTION 14. Action by Company.
-----------------
Existence of Options shall not impair the right of the
Company or its stockholders to make or effect any adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds., debentures, preferred or prior
preference stocks ahead of or affecting the Company's common stock or
the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding whether of a similar
character or otherwise.
SECTION 15. Termination and Amendment.
-------------------------
The Board of Directors of the Company may at any time
suspend or terminate the Plan. The Board of Directors of the Company
may also at any time amend or revise the terms and provisions of the
Plan, except that no amendment may be made without shareholder
approval if such amendment would amend Section 3 to permit shares
subject to an outstanding stock option that is replaced, canceled or
exchanged for a newly granted stock option with an option price per
share lower than the option price per share of the outstanding stock
option to become available for future grants. No termination,
suspension or modification of the Plan may, without the consent of the
person to whom any Option shall theretofore have been granted,
adversely affect the rights of such person under such Option.
SECTION 16. Granting of Options.
-------------------
Nothing contained in the Plan or any resolution adopted or
to be adopted by the Board of Directors of the Company shall
constitute the granting of any Option hereunder. The granting of an
Option pursuant to the Plan shall take place only when a written
Option Agreement shall have been duly executed and delivery made by
or on behalf of the Company to the person to whom such Option is
granted.
SECTION 17. Adjustment of Options.
---------------------
In the event of any stock split, stock dividend, or any
other share reclassification which would affect any outstanding
Option, the number of shares covered by such outstanding Option or
Options shall be similarly increased or decreased, as deemed
appropriate in the good faith discretion of the Plan Committee.
SECTION 18. Effective Date of Plan.
----------------------
The Plan is effective upon approval by the Board of
Directors of the Company by resolution, and shall remain in effect
subject to the provisions of Section 19 below, until terminated by the
Board of Directors of the Company, or until all shares to be delivered
pursuant to the Plan have been purchased.
SECTION 19. Interpretation.
--------------
The Plan Committee shall interpret the Plan and shall
prescribe such rules and regulations in connection with the operation
of the Plan as it shall determine to be necessary or advisable for the
administration of the Plan consistent with the provisions hereof.
SECTION 20. Restriction on Transfer of Shares.
---------------------------------
In addition to the provisions of Section 10 of the Plan,
shares of common stock issued by the Company pursuant to exercise of
an Option shall be subject to the terms of that certain Shareholder
Agreement, to be dated on or about January 27, 1989, by and among the
Company, Lunar Radiation Corp. and certain others (the "Shareholder
Agreement"). As an express condition to receiving any Option, each
Option Holder, by acceptance of the Option, agrees that he and his
spouse will execute whatever documents the Plan Committee requires so
as to bind the Option Holder and his spouse, and shares of common
stock issuable upon exercise of the Option, to the terms of said
Shareholder Agreement.
SECTION 21. Captions.
--------
The captions of the several sections hereof are not a part
of the Plan, but are merely guides or labels to assist in locating and
reading the several sections hereof.
SECTION 22. Governing Law.
-------------
The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of Wisconsin and
construed accordingly.
Exhibit 10.2
BONE CARE INTERNATIONAL, INC.
1996 STOCK OPTION PLAN
(As Amended Through November 1, 1999 and Reflecting the 2-for-1 Stock Split
Distributed November 14, 1997)
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 1,000,000, 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 expiration,
cancellation or other termination of such stock option, shall again be
available for future grants of stock options under this Plan; PROVIDED,
HOWEVER, that except for appropriate adjustments made to give effect to any
stock splits, stock dividends or other relevant changes in the capitalization
of the Corporation, without the approval by a majority vote of the
shareholders, shares subject to an outstanding stock option that is replaced,
canceled or exchanged for a newly granted stock option with an option price per
share lower than the option price per share of the outstanding stock option
shall not be available for future grants.
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 200,000, subject to adjustment as provided in Section 5.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by a committee designated by the Board, which may be the whole Board
(the "Committee"), or may consist of two or more members of the Board,
each of whom may 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), (b) amend the first paragraph of
Section 3 to permit shares subject to an outstanding stock option that
is replaced, canceled or exchanged for a newly granted stock option
with an option price per share lower than the option price per share
of the outstanding stock option to become available for future grants,
or (c) 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. 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) Unless otherwise specified in the agreement relating to an
option, 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, within the 30-day period 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,
unless otherwise specified in the agreement relating to an option, if
employment of the optionee by the Company or one of its subsidiaries
or service on the Board shall have terminated by reason of death or
retirement after age 60, then the option may be exercised within the
one-year period following such termination of employment or service
on the Board by the optionee or the executor, administrator, personal
representative, beneficiary or heir of the optionee, but only to the
extent exercisable and within the term of such option at the time of
such termination of employment or service.
(c) Unless otherwise specified in the agreement relating to an
option, if an optionee dies during the 30-day period or one-year
period set forth in Section 11(b) (or other period set forth in the
agreement relating to an option), each option held by the optionee
shall be exercisable only to the extent exercisable and within the
term of such option at the date of the optionee's death and may
thereafter be exercised by the executor, administrator, personal
representative, beneficiary or heir of the optionee within the one-
year period following the date of the optionee's death.
(d) Unless otherwise specified in the agreement relating to an
option, no option shall be transferable other than by will or the laws
of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted
by the foregoing sentence, each option may be exercised during the
optionee's lifetime only by the optionee or the optionee's legal
representative or similar person. Except as permitted by the second
preceding sentence, no option hereunder shall be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of
(whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer,
assign, pledge, hypothecate, encumber or otherwise dispose of any
option hereunder, such option and all rights thereunder shall
immediately become null and void.
12. ACCELERATION OF OPTIONS UPON A CHANGE IN CONTOL. 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 10.6
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (the "AGREEMENT"), dated
as of October 11, 1999 is entered into by and between The State of
Wisconsin Investment Board, an independent state agency organized
under the laws of Wisconsin, with an address at 121 East Wilson
Street, 2nd Floor, Madison, Wisconsin 53707-7842, Attn: Investment
Director, Small Cap Stocks (the "PURCHASER") and Bone Care
International, Inc., a Wisconsin corporation with an address of One
Science Court, Madison Wisconsin 53711 (the "COMPANY").
The Company is offering for sale, to the Purchaser and to
certain other parties (the "OTHER PURCHASERS"), and the Purchaser and
the Other Purchasers have agreed to purchase, on substantially the
same price terms as contained herein, in the aggregate, not more than
(1,385,000) shares of the Company's common stock, no par value per
share (the "COMMON STOCK"). The Company has offered for sale, and the
Purchaser has agreed to purchase 1,052,058 shares (the "SHARES") of
fully registered Common Stock on the terms and conditions herein
provided. In connection herewith, the Company and the Purchaser
hereby agree as follows:
1. PURCHASE AND SALE OF SHARES. Upon the basis of the
representations and warranties and subject to the terms and conditions
set forth herein, the Company agrees to issue and sell the Shares to
the Purchaser on the Closing Date (as herein defined) at a per share
purchase price equal to $9.02 (the "PER SHARE PURCHASE PRICE," and the
aggregate purchase price of all of the Shares being referred to herein
as the "PURCHASE PRICE") and, upon the basis of representations and
warranties and subject to the terms and conditions set forth herein,
the Purchaser agrees to purchase the Shares from the Company on the
Closing Date at the Purchase Price.
Notwithstanding the foregoing, in the event that the Company
sells any shares (or securities that may be converted into or
exchanged for shares) of Common Stock in an original issuance (not
shares traded on the Nasdaq National Market in the aftermarket) for
less per share than the Per Share Purchase Price at any time during
the sixty day period commencing on the Closing Date (except for shares
issued pursuant to stock options), the Company shall have the
obligation to promptly notify and pay the Purchaser: (x) the
aggregate difference between (i) the Per Share Price of the Shares and
(ii) the per share price of such additional shares of the Company's
Common Stock (or securities that may be converted into or exchanged
for shares of Common Stock) so sold, MULTIPLIED by (y) the number of
Shares purchased hereunder, payable, at the Company's option, in
either cash or additional shares of the Company's Common Stock. If
the Company elects to pay in Common Stock, the Common Stock shall be
valued at the price at which the Company sells any such shares (or
securities that may be converted into or exchanged for shares) of
Common Stock and will be payable within five (5) days of such other
sale.
2. CLOSING. The closing of the purchase and sale of the Shares
(the "OFFERING") shall take place, on the first business day following
the satisfaction of the conditions set forth in Paragraph 6 below, as
coordinated by the parties, or on such other date or at such other
time and place as the Company and the Purchaser may agree upon (such
time and date of the closing being referred to herein as the "CLOSING
DATE"). Upon payment of the Purchase Price in full in immediately
available funds by or on behalf of the Purchaser to the Company by
wire transfer to an account specified by the Company to the Purchaser
prior to the Closing Date, the Company will promptly cause its
transfer agent to deliver to the Purchaser certificates representing
the shares of Common Stock in such denominations and registered in
such names as the Purchaser shall have requested prior to the Closing
Date. The Company shall provide facsimile copies of the certificates
to the Purchaser on the Closing Date.
3. REPRESENTAIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants, as of the date hereof and as of the Closing
Date, as follows:
(a) no consent, approval, authorization or order of any
court, governmental agency or body or arbitrator having
jurisdiction over the Company or any of the Company's affiliates
is required for the execution of this Agreement or the sale of
the Shares to the Purchaser, except as required by the Nasdaq
Stock Market;
(b) neither the sale of the Shares nor the performance of
the Company's other obligations pursuant to this Agreement will
violate, conflict with, result in a breach of, or constitute a
default (or an event that, with the giving of notice or the
lapse of time or both, would constitute a default or trigger any
right of a third party to acquire equity interests in the
Company or cause mandatory adjustment of the price at which an
outstanding security of the Company is convertible into Common
Stock) under (i) the Articles of Incorporation or the bylaws of
the Company, (ii) any decree, judgment, order or determination
of any court, governmental agency or body, or arbitrator having
jurisdiction over the Company or any of the Company's properties
or assets, (iii) any law, treaty, rule or regulation applicable
to the Company (other than the federal securities laws,
representations and warranties with respect to which are made by
the Company, or the requirements of the Nasdaq Stock Market),
(iv) the terms of any bond, debenture, note or other evidence of
indebtedness, or any agreement, stock option or similar plan by
which the Company is bound or to which any property of the
Company is subject, in any event above, which violation,
conflict or breach would have a material adverse effect on the
Company.
(c) the Company has taken all corporate action required to
authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder and will use the
proceeds of sale as described in the Registration Statement;
(d) the Company has duly authorized the issuance of the
Shares and, when issued and delivered to and paid for by the
Purchaser in accordance with the terms hereof, the Common Stock
will be duly and validly issued, fully paid and non-assessable
(except to the extent that such Shares are assessable as
provided in Section 180.0622 of the Wisconsin Business
Corporation Law) and will not constitute "restricted securities"
within the meaning of Rule 144(a)(3) promulgated under the
Securities Act of 1933, as amended (the "ACT");
(e) the Company's Prospectus dated October 6, 1999
included in the Company's Registration Statement, the Company's
Form 10 (File No. 0-27854), as amended and the Company's Annual
Report on Form 10-K for its Fiscal Year ended June 30, 1999
(collectively, the "DISCLOSURE DOCUMENTS") have been delivered
or been made available to Purchaser and, as of the date of each
such respective document included therein and when considered as
of today together and with this Agreement, such Disclosure
Documents do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in
light of the circumstances in which they were made with respect
to the Company;
(f) the Company's financial statements for the year ended
June 30, 1999, included in the Disclosure Documents comply in
all material respects with the applicable requirements of the
Securities Exchange Act of 1934, as amended, and have been
prepared, and fairly present in all material respects the
consolidated financial condition, results of operations and cash
flows of the Company and its subsidiaries at the respective
dates and for the respective periods indicated, in accordance
with generally accepted accounting principles consistently
applied throughout such periods (except as noted therein);
(g) except as set forth in the Disclosure Documents or
pursuant to this Agreement, since June 30, 1999 (i) the Company
has not incurred any material liabilities, direct or contingent,
except in the ordinary course of business, and (ii) there has
been no material adverse change in the properties, business,
results of operations of financial condition of the Company;
the Company's Registration Statement on Form S-1 (No. 333-
87789), as amended, has been declared effective by the
Securities and Exchange Commission ("COMMISION") (including all
exhibits thereto and all information and documents incorporated
by reference therein, the "REGISTRATION STATEMENT") and includes
the registration of the original issuance of the Shares
purchased by the Purchaser pursuant to this Agreement;
the Company has all necessary patent and other license
rights to conduct its business as it is now being conducted and
as described in the Company's Prospectus. The Company has no
knowledge of any material infringement by it of patent or other
licensing rights of others or of any claim made or threatened
against the Company in regard to patent or other licensing
rights; and
(j) as of August 31, 1999 (and without giving effect to
the sale of Shares of Common Stock hereunder), the Company had
a total of 10,173,396 shares of Common Stock issued and
outstanding, approximately 548,638 shares of Common Stock were
subject to outstanding options granted under the Company's 1996
Stock Option Plan or Incentive Stock Option Plan; approximately
437,850 shares of Common Stock were reserved for future grant
under the Company's 1996 Stock Option Plan; and there will be no
changes in these numbers prior to the Closing Date except as a
result of shares issued in connection with the conversion or
exchange of any securities of the Company or stock options
granted under or shares issued under any existing stock option
plan or other existing employee bonus or existing incentive plan
of the Company, or shares issued to Other Purchasers as
contemplated by the Registration Statement.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser represents and warrants, as of the date hereof and as of the
Closing Date, as follows:
(a) no consent, approval, authorization or order of any
court, governmental agency or body or arbitrator having
jurisdiction over the Purchaser is required for the execution of
this Agreement or the purchase of the Shares by the Purchaser;
(b) neither the purchase of the Shares nor the performance
of the Purchaser's other obligations pursuant to this Agreement
will violate, conflict with, result in a breach of, or
constitute a default under (i) the charter documents of the
Purchaser; (ii) any decree, judgment, order or determination of
any court, governmental agency or body, or arbitrator having
jurisdiction over the Purchaser or any of the Purchaser's
properties or assets; (iii) any law, treaty, rule or regulation
applicable to the Purchaser; or (iv) the terms of any bond,
debenture, note or other evidence of indebtedness, or any
agreement, stock option or similar plan by which the Purchaser
is bound or to which any property of the Purchaser is subject,
in any event above, which violation, conflict or breach would
have a material adverse effect on the Purchaser;
(c) the Purchaser has taken all corporate action required
to authorize the execution and delivery of this Agreement and
the performance of its obligations hereunder; and
(d) as of the date hereof, the Purchaser beneficially owns
800,000 shares of Common Stock.
5. STOCK OPTIONS. The Board of Directors has approved the
Company entering into this Agreement. The Company agrees to take
action not later than November 17, 1999, an amendment to its bylaws,
to provide that the Company, without the approval of the owners of a
majority of the Common Stock, shall not grant any stock options at
less than the closing market price on the date of grant or reduce the
price of any options which were granted as a non-qualified stock
option under any of the Company's existing or future stock option
plans, PROVIDED, HOWEVER, that the foregoing would not preclude the
Company from issuing new, lower priced options issued from a stock
option plan to persons holding higher priced options from such plan;
PROVIDED, that if such new lower priced options were granted in
exchange for such higher priced options, the higher priced options
would be canceled or surrendered and not available for re-grant under
such stock option plan.
6. ONDITIONS OF CLOSING. The obligations of each party
hereunder shall be subject to:
(a) The accuracy in all material respects of the
representations and warranties of the other party hereto as of
the date hereof and as of the Closing Date, as if such
representations and warranties had been made again on and as of
the Closing Date;
(b) The performance in all material respects by the other
party of its obligations hereunder which must be performed prior
to the Closing Date;
(c) the Registration Statement shall have been declared
effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued;
(d) The Purchaser shall have received a legal opinion of
counsel to the Company substantially in the form attached hereto
as EXHIBIT A.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Purchaser, each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Act and each officer,
director, employee and agent of the Purchaser and of any such
controlling person against any and all liabilities, claims,
damages or expenses whatsoever, as incurred arising out of or
resulting from any breach (or, in the case of a third person
claim, any alleged breach) or other violation of any
representation, warranty, covenant, or undertaking by the
Company contained in this Agreement, and the Company will
reimburse the Purchaser for its reasonable legal and other
expenses (including the reasonable cost of any investigation and
preparation, and including the reasonable fees and expenses of
counsel) incurred in connection therewith.
(b) The Purchaser agrees to indemnify and hold harmless
the Company, each person, if any, who controls the Company
within the meaning of Section 15 of the Act and each officer,
director, employee and agent of the Company and of any such
controlling person against any and all liabilities, claims,
damages or expenses whatsoever, as incurred arising out of or
resulting from any breach (or, in the case of a third person
claim, any alleged breach) or other violation of any
representation, warranty, covenant, or undertaking by the
Purchaser contained in this Agreement, and the Purchaser will
reimburse the Company for its reasonable legal and other
expenses (including the reasonable cost of any investigation and
preparation, and including the reasonable fees and expenses of
counsel) incurred in connection therewith.
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
agreements, representations, warranties, indemnities and other
statements made by or on behalf of each party hereto pursuant to this
Agreement, as of the date they were made, shall, unless otherwise
specified, survive until the third anniversary of the Closing Date and
shall expire thereafter.
8. MISCELLANEOUS.
(a) This Agreement may be executed in one or more
counterparts and such counterparts shall constitute but one and
the same agreement and authorized signatures may be evidenced to
the other party by facsimile copies thereof, provided that the
originally signed signature page of any party is provided to the
other party within two business days after the original
execution.
(b) This Agreement shall inure to the benefit of and be
binding upon the parties hereto. This Agreement shall not be
assignable by any party hereto without the prior written consent
of the other party hereto and no other person shall have any
right or obligation hereunder. Without limiting the foregoing,
the rights of Purchaser set forth in Paragraph 1 shall not be
transferable to subsequent purchasers of the Shares. Any
assignment contrary to the terms hereof shall be null and void
and of no force or effect.
(c) This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and
supersedes any prior agreements or understandings, whether
written or oral, between the parties respecting such subject
matter.
(d) If within 60 days of the Closing Date hereof the
Company enters into or is a party to any agreement to issue
additional equity securities (or securities convertible or
exchangeable therefor), the Company shall promptly provide
notice of such agreement to the Purchaser, together with a copy
of such agreement, except for any grant of options to purchase
Common Stock pursuant to the Company's 1996 Stock Option Plan.
10. GOVERNING LAW. This Agreement shall be governed by the
internal laws of the State of Wisconsin.
IN WITNESS WHEREOF, the parties have entered into this Agreement
as of the date first set forth above.
BONE CARE INTERNATIONAL INC.
By: /s/ Charles W. Bishop
-----------------------------------
Name: Charles W. Bishop, Ph.D.
Title: President and Chief Executive Officer
THE STATE OF WISCONSIN INVESTMENT BOARD
By: /s/ John F. Nelson
-----------------------------------
Name: John F. Nelson,
Title: Investment Director
Exhibit A
October 12, 1999
State of Wisconsin Investment Board
Lake Terrace
121 East Wilson
Madison, Wisconsin 53707
Re: Bone Care International, Inc.
1,052,058 Shares of Common Stock
Ladies and Gentlemen:
We address this opinion to you as the purchaser (the
"Purchaser") from Bone Care International, Inc., a Wisconsin
corporation (the "Company"), of 1,052,058 shares (the "Shares") of
common stock, without par value (the "Common Stock"), of the Company.
As counsel for the Company, we have, among other things,
participated with officers and other representatives of the Company,
including its independent public accountants, in the preparation of
the Company's Registration Statement on Form S-1 (Registration No.
333-87789) and Amendment No. 1 thereto, filed on September 24, 1999
and October 8, 1999, respectively, with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"), which registration statement became effective
on October 6, 1999. Such registration statement, as so amended
(including the information contained in the form of prospectus filed
with the SEC pursuant to Rule 424(b) under the Securities Act which
is deemed by Rule 430A under the Securities Act to be a part of such
registration statement as of the time it was declared effective), is
hereinafter called the "Registration Statement." The Company's
Prospectus dated October 6, 1999, as filed with the SEC on October 12,
1998 pursuant to Rule 424(b) under the Securities Act, is hereinafter
called the "Prospectus."
This will advise you that in the opinion of the undersigned:
1. The Registration Statement has been declared effective by
the SEC under the Securities Act. To our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Securities Act and no proceedings for such purpose
have been instituted or are being threatened by the SEC. The
Prospectus has been filed with the SEC pursuant to Rule 424(b) under
the Securities Act within the time period required by such Rule.
2. The Shares will not constitute "restricted securities" within the
meaning of Rule 144(a)(3) promulgated under the Securities Act.
3. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority
or agency is required for the Company's issuance and sale of the
Shares, except as required under the Securities Act, applicable state
securities or Blue Sky laws or by The Nasdaq Stock Market.
For the purpose of rendering the foregoing opinions, we have
relied, as to various questions of fact material to such opinions,
upon certificates of officers of the Company. We also have examined
originals, or copies of originals certified to our satisfaction, of
such agreements, documents, certificates and other statements of
governmental officials and other instruments, have examined such
questions of law and have satisfied ourselves as to such matters of
fact as we have considered relevant and necessary as a basis for the
foregoing opinions. We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures, the
legal capacity of all natural persons and the conformity with the
original documents of any copies thereof submitted to us for our
examination.
Any opinion or statement herein which is expressed to be "to
our knowledge" or is otherwise qualified by words of like import means
that the lawyers currently practicing law with this Firm who have had
an active involvement in the preparation of the Registration Statement
or the Prospectus, or who have had a significant ongoing
responsibility in representing the Company during the last 12 months,
have no current conscious awareness of any facts or information
contrary to such opinion or statement.
This opinion letter is limited to the federal laws of the
United States of America. We express no opinion as to matters
relating to state securities or Blue Sky laws. We assume no
obligation to update or supplement this opinion letter to reflect any
facts or circumstances which may hereafter come to our attention with
respect to the opinions and statements expressed above, including any
changes in applicable law which may hereafter occur.
This opinion letter is being delivered solely for the
benefit of the person to whom it is addressed; accordingly, it may not
be quoted, filed with any governmental authority or other regulatory
agency or otherwise circulated or utilized for any other purpose
without our prior written consent.
Very truly yours,
September 24, 1999
Bone Care International, Inc.
One Science Court
Madison, Wisconsin 53711
Ladies and Gentlemen:
We have acted as special Wisconsin counsel to Bone Care
International, Inc., a Wisconsin corporation (the "Company"), in
connection with the Registration Statement on Form S-1 (the
"Registration Statement") filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
relative to the registration of up to 1,500,000 shares of Common
Stock, no par value (the "Shares"), of the Company to be offered by
the Company.
We are familiar with the Articles of Amendment and Restated
Articles of Incorporation, as amended, and the By-Laws of the Company
and the proceedings to date with respect to the proposed offering and
sale of the Shares. In this connection, we have examined originals
or copies of originals certified to our satisfaction, of such
documents, certificates and records, have examined such questions of
law and have satisfied ourselves as to such matters of fact as we have
considered relevant and necessary as a basis for the opinions set
forth herein. We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures, the
legal capacity of all natural persons and the conformity with the
original documents of any copies thereof submitted to us for our
examination.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing under
the laws of the State of Wisconsin.
2. The Shares will, when certificates representing the Shares
shall have been duly executed, countersigned and registered
and delivered against receipt by the Company of the
consideration therefor as set forth in resolutions of the
Board of Directors of the Company adopted June 24, 1999, be
legally issued, fully paid and nonassessable, except to the
extent that such Shares are assessable as provided in
Section 180.0622 of the Wisconsin Business Corporation Law
and judicial interpretations thereof.
We hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement and to all references to our firm included
in or made a part of the Registration Statement.
Very truly yours,
Michael Best & Friedrich LLP
Exhibit 11
BONE CARE INTERNATIONAL, INC., AND SUBSIDIARY
Statement Regarding Computation of Loss Per Share
Three months ended
September 30, September 30,
1999 1998
------------ ------------
Net loss $ (1,982,980) $ (1,421,455)
============= =============
Weighted average number of
common shares 10,173,396 9,789,826
============= =============
Net loss per common share - basic $ (0.19) $ (0.15)
============= =============
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from Form 10-Q for the three months ended
September 30, 1999, and is qualified in its entirety
by reference to such financial statements.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 5,723
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1,252
<CURRENT-ASSETS> 7,242
<PP&E> 798
<DEPRECIATION> 504
<TOTAL-ASSETS> 9,129
<CURRENT-LIABILITIES> 1,395
<BONDS> 0
<COMMON> 11,394
0
0
<OTHER-SE> 3,660
<TOTAL-LIABILITY-AND-EQUITY> 9,129
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 2,072
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,983)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,983)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,983)
<EPS-BASIC> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
