FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31,1994
Commission file number 0-1051
CONSOLIDATED PAPERS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of incorporation or organization)
39-0223100
(I.R.S. Employer Identification No.)
Wisconsin Rapids, WI 54495
(Address of principal executive offices)
(Zip Code)
715 422-3111
(Registrant's 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock par value $1.00 outstanding April 30, 1994 44,060,750 shares
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CONSOLIDATED PAPERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<CAPTION>
As Of
March 31 March 31
1994 1993 December 31
(Unaudited) (Unaudited) 1993
ASSETS
<S> <C> <C> <C>
Current Assets
Cash & cash equivalents $ 1,990 $ 2,151 $ 2,123
Receivables (net of reserves of
$3,673 as of March 31, 1994,
$3,421 as of March 31, 1993,
and $3,558 as of December 31,
1993) 75,321 78,764 61,321
Inventories
Finished stock 33,295 37,461 39,549
Unfinished stock 4,078 4,345 4,932
Raw materials and supplies 59,068 60,068 55,806
Total inventories 96,441 101,874 100,287
Prepaid expenses 15,783 11,898 17,859
Total current assets 189,535 194,687 181,590
Investments and other assets 62,262 60,332 62,222
Plant and Equipment
Buildings, machinery and equipment 1,843,425 1,771,283 1,833,919
Less: Accumulated depreciation 701,000 611,999 680,767
1,142,425 1,159,284 1,153,152
Land and timberlands 28,398 27,438 28,315
Capital additions in process 51,930 49,937 41,788
Total plant and equipment 1,222,753 1,236,659 1,223,255
$ 1,474,550 $ 1,491,678 $ 1,467,067
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C> <C>
Current Liabilities
Current maturities of
long-term debt $ 50,000 $ 68,000 $ 50,000
Accounts payable 37,623 38,447 33,352
Other 71,327 73,240 62,333
Total current liabilities 158,950 179,687 145,685
Long-term debt 107,000 143,000 121,000
Deferred income taxes 161,548 137,371 158,448
Postretirement benefits 101,120 101,405 98,776
Other noncurrent liabilities 4,466 3,742 4,110
Shareholders' Investment
Preferred stock, authorized and
unissued 15,000,000 shares - - -
Common stock: shares issued,
44,056,842 as of March 31, 1994,
43,857,618 as of March 31, 1993
and 44,014,385 as of December 31,
1993 44,057 43,858 44,014
Capital in excess of par value 50,414 41,578 48,770
Cumulative translation adjustment (2,095) (1,995) (2,047)
ESOP loan guarantee - ( 750) -
Unrealized net loss on investment
securities ( 419) - -
Reinvested earnings 849,509 843,782 848,311
Total shareholders' investment 941,466 926,473 939,048
$ 1,474,550 $ 1,491,678 $ 1,467,067
CONSOLIDATED PAPERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA - UNAUDITED)
Three Months Ended
March 31 December 31
1994 1993 1993
<S> <C> <C> <C>
Net sales $ 232,191 $ 241,596 $ 216,662
Cost of goods sold 191,510 197,216 177,624
Gross profit 40,681 44,380 39,038
Selling, general
and administrative expenses 15,662 15,434 16,216
Income from operations 25,019 28,946 22,822
Interest expense ( 1,120) ( 2,266) ( 1,807)
Interest income 5 2 10
Miscellaneous, net 1,161 1,405 1,959
Total other income
(expense), net 46 ( 859) 162
Income before provision for
income taxes 25,065 28,087 22,984
Provision for income taxes 9,775 10,614 9,099
Net Income $ 15,290 $ 17,473 $ 13,885
Net income per share $ 0.35 $ 0.40 $ 0.31
Average number of
common shares outstanding 44,048,078 43,823,079 44,002,711
CONSOLIDATED STATEMENTS OF REINVESTED EARNINGS
(DOLLARS IN THOUSANDS - UNAUDITED)
Three Months Ended
March 31 December 31
1994 1993 1993
<S> <C> <C> <C>
Balance beginning of period $ 848,311 $ 840,332 $ 848,505
Add: Net income 15,290 17,473 13,885
Deduct: Cash dividends (14,092) (14,023) (14,079)
Balance end of period $ 849,509 $ 843,782 $ 848,311
CONSOLIDATED PAPERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS - UNAUDITED)
Three Months Ended
March 31
1994 1993
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 15,290 $ 17,473
Depreciation and depletion 21,226 25,872
Deferred income taxes 3,100 3,973
Earnings of affiliates ( 853) ( 858)
(Increase) decrease in current assets,
other than cash and cash equivalents ( 8,078) ( 9,925)
Increase (decrease) in current
liabilities other than current
maturities of long-term debt 13,265 3,754
Increase (decrease) in postretirement
benefits 2,344 1,830
Increase (decrease) in other noncurrent
liabilities 356 534
Net cash provided by operating activities 46,650 42,653
Cash Flows from Investing Activities:
Capital expenditures (20,724) (19,042)
(Increase) decrease in investments
and other assets 346 ( 563)
Net cash used in investing activities (20,378) (19,605)
Cash Flows From Financing Activities:
Cash dividends (14,092) (14,023)
Increase (decrease) in long-term debt (14,000) (10,000)
Other 1,687 1,161
Net cash used in financing activities (26,405) (22,862)
Net increase (decrease) in cash and cash
equivalents ( 133) 186
Cash and cash equivalents -
beginning of period 2,123 1,965
Cash and cash equivalents - end of period $ 1,990 $ 2,151
Cash paid during the year for:
Interest $ 1,371 $ 2,372
Income taxes 101 8,188
<FN>
Notes to Financial Statements:
1. Reference is made to the Notes to Financial Statements which appear in the 1993
Annual Report on Form 10-K. The basic principles of those notes are pertinent to
these statements.
2. Results for the first quarter 1994 reflect the lengthening of estimated useful lives
of machinery and equipment used in the pulp and papermaking process to a 20-year
period versus the Company's former 16-year period. The effect of the change
increased after-tax income by $3.5 million, or 8 cents per share.
* * * * *
The financial information furnished is unaudited. It reflects all adjustments which
are, in the opinion of management, necessary to a fair statement of the results.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents held steady during the first quarter. Working capital decreased
by $5 million primarily due to a $14 million increase in receivables offset by a $4 million
decrease in inventories, a $4 million increase in accounts payable and a $9 million
increase in other liabilities. The increase in receivables is due to higher sales in the
first quarter 1994 versus the fourth quarter 1993. Lower inventories are the result of
inventory control projects. The increase in accounts payable and other liabilities is
timings related. The ratio of current assets to current liabilities was 1.1:2 for both the
first quarter 1994 and fourth quarter 1993.
Capital expenditures totaled $21 million compared to $19 million during the same period in
1993. The principal first quarter 1994 major expenditures included $6 million of a $20
million quality rebuild and speed-up of a lightweight coated paper machine and $4 million
of a $30 million grinder room replacement, both at the Wisconsin River Division.
The 1994 capital spending program is currently projected to be $100 million. A combination
of internally generated funds and external financing is expected to provide adequate
capital to fund the projects. Funded debt was reduced by $14 million in the first quarter.
Depending on business conditions and future capital spending plans, it is expected that
current debt will be repaid by the end of 1997.
OPERATING RESULTS
FIRST QUARTER, 1994-1993 COMPARISON
Sales and earnings decreased in the first quarter 1994 compared to the same period in 1993.
Net Sales decreased $9 million or 3.9%. In the lightweight coated paper segment,
discounting from published prices continued at a heightened pace. Earnings, after the $3.5
million after tax favorable impact of the asset life extension, decreased $2 million
compared to the first quarter in 1993. The decrease in earnings resulted from reduced
selling prices and product mix - $3.5 million and lower unit volume - $1.0 million,
partially offset by the change in depreciable lives of pulp and papermaking equipment -
$3.5 million and lower pulp prices - $2.0 million.
During the first quarter 1994 the coated paper mills operated at 86.0% of available
capacity compared to 94.1% for the same quarter 1993. The two lightweight coated
groundwood mills ran at 89.0% of available capacity due to lack of orders in the first
quarter 1994 compared to 99.3% in 1993. One lightweight coated paper machine was off-line
37 days for a quality rebuild and a speed-up. Had this machine been available to produce
during the first quarter, available capacity utilization would have been 80.6%. The
groundwood-free mill ran at 81.7% of available capacity due to lack of orders in 1994
compared to 85.7% in 1993. Total shipments of groundwood-free grades increased over 1993.
The No. 16 paper machine, which started up in March, 1992, continued to improve in both
quality and productivity. Coated specialty paper sales volume increased 15% resulting in
the division operating at 100% of capacity during the first quarter of 1994 compared to
96.7% of capacity for the same period in 1993. While paperboard products shipments
declined and corrugated products shipments held steady, earnings declined slightly due to
unfavorable product mix. Both operations continue their emphasis on producing higher value
added products.
Gross profit margins as a percent of net sales decreased to 17.5% from 18.4% in the first
quarter 1994 compared to 1993. Reduced volume, steeper selling price concessions and
unfavorable sales mix, partially offset by changes in depreciation lives and lower pulp
prices, accounted for the decrease in gross profit margin.
Selling, general and administration expenses held steady when compared to last year's first
quarter.
Other income (expense) net decreased by $1 million primarily due to lower interest expense
resulting from reduced debt at lower interest rates.
The effective tax rate was 39.0% in 1994 compared to 37.8% for the first quarter 1993. The
higher 1994 tax rate results from the increase in the Federal tax rate retroactively
implemented in the third quarter 1993, when legislation was approved.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Schmalz Dump Superfund Site. The Company is a defendant in a Superfund action brought in
the federal district court for the Eastern District of Wisconsin, involving a site in
Harrison, Wisconsin. Together with another defendant, the Company has agreed to settle the
litigation with the Environmental Protection Agency for an aggregate contribution of
approximately $2.6 million, of which approximately $1.47 million will be paid by the
Company. The Company and the other settling defendant settled contribution actions against
several other parties involved at the site in the first quarter, 1994. The Company has
also concluded an agreement with several of its insurers with respect to coverage for these
claims.
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Shareholders was held on April 25, 1994. At the meeting, the
shareholders elected eleven directors to hold office until the next annual meeting of
shareholders, and approved an amendment to the Company's 1989 Stock Option Plan. Total
shares represented in person or by proxy were 38,373,148, which was 87.09 percent of the
44,056,666 shares outstanding. The shares represented at the meeting were voted as
follows:
Election of directors.
Shares Voted
For
R.B. Barker 38,020,501
J.R. Bostic 37,978,630
P.F. Brennan 38,021,786
W.N. Caldwell 38,020,438
S.M. Hands 38,011,347
B.S. Kubale 38,020,399
D.R. Mead, Jr. 38,009,430
G.W. Mead 38,020,491
G.D. Mead 38,021,780
L.R. Nash 38,016,208
G.N. Rupp 37,978,197
Withheld authority
for all directors 351,362
Withheld authority
on some directors 43,589
Amendment to the Company's 1989 Stock Option Plan.
Shares Voted
For 35,830,226
Against 1,225,606
Withheld 634,990
Nonvotes 682,326
Item 6. Exhibits and Reports on Form 8-K.
(a) Furnish the exhibits required by Item 601 of Regulation S-K.
3.b. Bylaws of Consolidated Papers, Inc. dated April 25, 1994.
10.a. Consolidated Papers, Inc. 1989 Stock Option Plan as amended through April 25,
1994.
(b) Reports on Form 8-K.
There were no reports filed on Form 8-K during the quarter ended March 31, 1994.
Items 2, 3, and 5 are not applicable and have been omitted.
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.
CONSOLIDATED PAPERS, INC.
Date May 11, 1994
/s/ Richard J. Kenney
By: Richard J. Kenney, Vice President, Finance
Principal Financial Officer
Date May 11, 1994
/s/ Carl R. Lemke
By: Carl R. Lemke
Assistant Secretary
Exhibit 3.b. To Form 10-Q For
Consolidated Papers, Inc. For
The Quarter Ended March 31, 1994
BYLAWS OF CONSOLIDATED PAPERS, INC.
APRIL 25, 1994
Article I. Offices; Records
1.1. 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.
1.2. 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. The address of the registered office may be changed from time to time
by the Board of Directors or by the registered agent. The office of the
registered agent of the Corporation shall be identical to the registered office.
Article II. Shareholders
2.1. Annual Meeting. The Annual Meeting of Shareholders shall be held on the
fourth Monday of April of each year at 2:00 p.m. local time, or at such other
time and date as may be fixed by or under the authority of the Board of
Directors, for the purpose of electing directors and for the transaction of such
other business as may come before the meeting. If the day fixed for the Annual
Meeting of Shareholders is a legal holiday in the State of Wisconsin, the meeting
shall be held on the next succeeding business day.
2.2. Business Conducted at Meetings. At a meeting of the shareholders, the only
business which may be conducted is business which has been properly brought
before the meeting. To be properly brought before a special meeting, business
must be specified in the notice of the meeting (or any supplement thereto) given
pursuant to Section 2.5 of this Article II. To be properly brought before the
Annual Meeting of Shareholders, the business must be (i) specified in the notice
of the meeting (or any supplement thereto) given by or at the direction of the
Board of Directors, (ii) otherwise brought before the meeting by or at the
direction of the Board of Directors, or (iii) properly brought before the meeting
by a shareholder.
(a) Advance Notice by Shareholder. For business to be properly brought
before a meeting by a shareholder, the shareholder must have given
timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive office of the Corporation not
less than sixty (60) days nor more than ninety (90) days prior to the
meeting; provided, however, that in the event that less than seventy
(70) days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder
to be timely must be so received not later than the close of business
on the tenth day following the day on which the notice of the date of
the meeting was mailed or public disclosure of the date was made.
(b) Shareholder Nominations to the Board. In the case of the shareholder
nominations for election to the Board of Directors, the notice shall
set forth (i) the name, age, business address and, if known,
residence address of each nominee proposed in the notice, (ii) the
principal occupations or employment of each nominee for the past five
(5) years, (iii) the number of shares of the Corporation which are
beneficially owned by each nominee, (iv) other directorships held by
each nominee, (v) the names of business entities of which each
nominee owns a ten percent (10%) or more beneficial interest and (vi)
all other information with respect to each nominee required by the
Federal proxy rules in effect at the time the notice is submitted.
In addition, the notice shall be accompanied by a statement, over the
signature of each proposed nominee, that (1) he consents to being a
nominee, (2) if elected he intends to serve as a director, and (3)
confirming the information with respect to him set forth in the
notice.
(c) Other Shareholder Proposals. In the case of shareholder proposals,
the notice shall set forth (i) a brief description of the business to
be brought before the meeting, (ii) the name, age, business and
residence address of the shareholder submitting the proposal, (iii)
the principal occupation or employment of such shareholder, (iv) the
number of shares of the Corporation which are beneficially owned by
such shareholder and (v) any interest of the shareholder in the
business of the Corporation other than as a shareholder.
(d) Compliance with Procedures. The chairman of the meeting may, if the
facts warrant, determine and declare to the meeting that a
shareholder nomination or proposal was not made in accordance with
the foregoing procedure and the defective nomination or proposal
shall be disregarded.
2.3. Special Meetings. Special meetings of the shareholders, for any purpose or
purposes unless otherwise prescribed by statute, may be called by the Chairman of
the Board, the President and Chief Executive Officer or the Secretary at the
request of any two members of the Board of Directors and shall be called by the
Chairman of the Board or the President and Chief Executive Officer upon written
demand by holders of shares with at least 10% of the votes entitled to be cast on
any issue proposed to be considered at the meeting, such written demand
describing one or more purposes for which the special meeting is to be held. The
purpose or purposes of any special meeting shall be described in the notice
required by Section 2.5 of this Article II.
2.4. 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
or special meeting of the shareholders. If no designation is made, the place of
meeting shall be the principal office of the Corporation in the City of Wisconsin
Rapids, Wisconsin.
2.5. (a) Notice of Meetings. 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 10 nor more than 50 days
before the date of the meeting (unless a different time is provided by the
Wisconsin Business Corporation Law), or, in the case of a special meeting called
by the holders of not less than one-tenth of the outstanding shares entitled to
vote at the meeting, not less than 45 days nor more than 50 days before the date
of the meeting, by or at the direction of the Chairman of the Board, the
President and Chief Executive Officer, the Secretary, or the person calling the
meeting to each shareholder of record entitled to vote at such meeting and to
such other persons as required by the Wisconsin Business Corporation Law.
Service of written notice upon any shareholder may be delivered by Appropriate
Communications Technology (as defined in Section 3.6 of these By-laws)at the
shareholder's last known address as it appears on the books and records of the
Company. The certificates of the Chairman of the Board, the President and Chief
Executive Officer or of the Secretary or of the Transfer Agent of the delivery
shall be conclusive as to the fact of service of notice on the shareholder.
(b) Adjourned Meeting. Except as provided in the next sentence, if any
shareholder meeting is adjourned to a different date, time, or place,
notice need not be given of the new date, time, and place if the new
date, time, and place are announced at the meeting before
adjournment. If a new record date for the adjourned meeting is or
must be fixed, then notice must be given pursuant to the requirements
of paragraph (a) of this Section 2.5, to those persons who are
shareholders as of the new record date.
(c) Waiver of Notice. A shareholder may waive notice in accordance with
Article VII of these Bylaws.
2.6. Fixing of Record Date. The Board of Directors may fix in advance a date as
the record date for any determination of shareholders entitled to notice of a
shareholder's meeting, to demand a special meeting, to vote or to take any other
action, such date in any case to be not more than fifty (50) days and not less
than ten (10) days prior to the meeting or action requiring such determination of
shareholders, and may fix the record date for determining shareholders entitled
to a share dividend or distribution, which date shall be not more than fifty (50)
and not less than ten (10) days prior to the dividend or distribution.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at the Annual Meeting of Shareholders, the close of business
on the second Tuesday in the month of March in each year shall be the record date
for the determination of shareholders.
If no record date is fixed for the determination of shareholders entitled to
demand a shareholder meeting or to notice of or to vote at a special meeting of
shareholders, (a) the close of business on the date that the first shareholder
signs the written demand for a shareholder meeting, or (b) the close of business
on the third business day before the first notice of the special meeting is
mailed or otherwise delivered to shareholders, as the case may be, shall be the
record date for the determination of shareholders.
Except as provided by the Wisconsin Business Corporation Law for a court ordered
adjournment, a determination of shareholders entitled to notice and to vote of a
meeting of shareholders is effective for any adjournment of a meeting unless the
Board of Directors fixes a new record date, which it shall do if the meeting is
adjourned to a date more than 120 days after the date fixed for the original
meeting.
2.7. Shareholder List. 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 record of the shareholders entitled to notice of the meeting,
arranged by class or series of shares, if any, and showing the address of and the
number of shares held by each shareholder.
The shareholder list shall be available for inspection by any shareholder,
beginning two (2) business days after the notice of the meeting is given for
which the list was prepared and continuing to the date of the meeting, at the
Corporation's principal office or at a place identified in the meeting notice in
the city where the meeting will be held.
A shareholder or his or her agent or attorney may, on written demand, inspect
and, subject to the limitations imposed by the Wisconsin Business Corporation
Law, copy the shareholder list, during regular business hours and at his or her
expense, during the period that it is available for inspection hereunder. The
Corporation shall make the shareholders' list available at the meeting and any
shareholder or his or her agent or attorney may inspect the list at any time
during the meeting or any adjournment thereof.
The original stock transfer books and nominee certificates on file with the
Corporation (if any) shall be prima facie evidence as to who are the shareholders
entitled to inspect the shareholder list 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 the meeting.
2.8. Quorum and Voting Requirements. Shares entitled to vote may take action on
a matter at a meeting only if a quorum of those shares exists with respect to
that matter. Unless otherwise provided in the Articles of Incorporation or in
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 the matter at a meeting of shareholders. 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 the meeting. If a quorum exists, except in the case of the
election of directors, action on the matters shall be approved if the votes cast
favoring the action exceed the votes cast opposing the action, unless the
Articles of Incorporation, these Bylaws or the Wisconsin Business Corporation Law
requires a greater number of affirmative votes. Unless otherwise provided in the
Articles of Incorporation, directors shall be elected by a plurality of the votes
cast by the shares entitled to vote in the election of directors at a meeting at
which a quorum is present.
For purposes of this Section 2.8, "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 meeting. Though less than a quorum of the
outstanding votes are represented at a meeting, a majority of the votes
represented at the meeting may adjourn the meeting from time to time without
further notice. At an adjourned meeting at which a quorum is present or
represented, any business may be transacted which might have been transacted at
the meeting which was adjourned.
2.9. Conduct of Meetings. The Chairman of the Board or, in his or her absence,
the President and Chief Executive Officer, and, in the President and Chief
Executive Officer's absence, any officer or director chosen by the shareholders
present or represented by proxy shall call the meeting of the shareholders to
order and shall act as chairman of the meeting, and the Secretary 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.
2.10. Proxies. At all meetings of shareholders, a shareholder may vote his or
her shares in person or by proxy. A shareholder may appoint a proxy to vote or
otherwise act for the shareholder by signing an appointment form, either
personally or by his or her attorney-in-fact. An appointment of a proxy is
effective when filed with the Secretary or other officer or agent of the
Corporation authorized to tabulate votes. An appointment is valid for eleven
months from the date of its execution, unless otherwise expressly provided in the
appointment form.
2.11. Voting of Shares. Each outstanding share shall be entitled to one (1)
vote on each matter submitted to a vote at a meeting of shareholders, except to
the extent that the voting rights of the shares are enlarged, limited or denied
by the Articles of Incorporation or the Wisconsin Business Corporation Law.
2.12. Acceptance of Instruments. If the name signed on a vote, consent, waiver
or proxy appointment corresponds to the name of a shareholder, the Corporation
may accept the vote, consent, waiver or proxy appointment and give it effect as
the act of a shareholder. If the name signed on a vote, consent, waiver or proxy
appointment does not correspond to the name of a shareholder on the Corporation's
records, the Corporation may accept the vote, consent, waiver or proxy
appointment and give it effect as the act of the shareholder if any of the
following apply:
(a) The shareholder is an entity and the name signed purports to be that
of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the
shareholder and, if the corporation requests, evidence of fiduciary
status acceptable to the Corporation is presented with respect to the
vote, consent, waiver or proxy appointment.
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the Corporation requests,
evidence of this status acceptable to the Corporation is presented
with respect to the vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial owner,
or attorney-in-fact of the shareholder and, if the Corporation
requests, evidence acceptable to the Corporation of the signatory's
authority to sign for the shareholder is presented with respect to
the vote, consent, waiver or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or fiduciaries
and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of
all co-owners.
The Corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the Corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
Article III. Board of Directors
3.1. General Powers. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be managed
under the direction of, its Board of Directors.
3.2. Number, Tenure, Qualifications, Removal and Resignation.
(a) Number, Tenure and Qualifications. The number of directors
constituting the Board of Directors shall be nine (9) or such other
number as is fixed from time to time by a majority vote of the
directors then in office. Each director shall hold office until the
next annual meeting of shareholders and until his or her successor
shall have been elected and, if necessary, qualified or until there
is a decrease in the number of directors which takes effect at the
expiration of his or her term, or until his or her prior death,
resignation or removal. Directors need not be residents of the State
of Wisconsin or shareholders of the Corporation.
(b) Removal. A director may be removed only by the shareholders and then
only at a special meeting called for the purpose of removing the
director. A director may be removed from office but only for cause
(as defined herein) if the number of votes cast at the shareholder
meeting to remove the director exceeds the number of votes cast not
to remove the director, provided, however, that, if the Board of
Directors, by resolution, shall have recommended removal of a
director, then the shareholders may remove such director without
cause by the vote referred to above. As used herein, "cause" shall
exist only if the director whose removal is proposed has been
convicted of a felony by a court of competent jurisdiction, where the
conviction is no longer subject to direct appeal, or has been
adjudged liable for actions or omissions in the performance of his or
her duty to the Corporation in a matter which has had a materially
adverse effect on the business of the Corporation, where the
adjudication is no longer subject to appeal.
(c) Resignations. A director may resign at any time by delivering
written notice which complies with the Wisconsin Business Corporation
Law to the Board of Directors, to the Chairman of the Board, or to
the Corporation. A director's resignation is effective when notice
is delivered unless the notice specifies a later effective date.
3.3. Regular Meetings. A regular meeting of the Board of Directors shall be
held, without other notice than this Bylaw, immediately after and at the same
place as the Annual Meeting of Shareholders. Regular meetings shall also be
held, without other notice than this Bylaw, on the second Tuesday after the tenth
day of February, July and October at the principal office of the Corporation in
the City of Wisconsin Rapids, Wisconsin unless the directors are notified ten
(10) or more days prior to the date of the meeting personally or by telephone, or
by written notice delivered by Appropriate Communications Technology (as defined
in Section 3.6 of these By-Laws) at his or her address by the Chairman of Board,
President and Chief Executive Officer or Secretary of a different place of
meeting which may be within or without the State of Wisconsin.
3.4. Special Meetings. Special meetings of the Board of Directors may be called
by or at the request of the Chairman of the Board, the President and Chief
Executive Officer or the Secretary at the request of any two (2) directors.
Special meetings of any committee may be called by or at the request of the
foregoing persons or the chairman of the committee. The persons calling any
special meeting of the Board of Directors or committee may fix any place, either
within or without the State of Wisconsin, as the place for holding any special
meeting called by them, and if no other place is fixed the place of meeting shall
be the principal office of the Corporation in the State of Wisconsin.
3.5. Meetings By Telephone or Other Communication Technology.
(a) Any or all directors may participate in a regular or special meeting
or in a committee meeting of the Board of Directors by, or conduct
the meeting through the use of, telephone or any other means of
communication by which either: (i) all participating directors may
simultaneously hear each other during the meeting or (ii) all
communication during the meeting is immediately transmitted to each
participating director, and each participant director is able to
immediately send messages to all other participating directors.
(b) If a meeting will be conducted through the use of any means described
in paragraph (a), all participating directors shall be informed that
a meeting is taking place at which official business may be
transacted. A director participating in a meeting by any means
described in paragraph (a) is deemed to be present in person at the
meeting.
3.6. Notice. Notice of each special meeting of the Board of Directors shall be
given by written notice delivered in person, by telegraph, teletype, facsimile or
other form of wire or wireless communication, or by mail or private carrier
(collectively, "Appropriate Communications Technology"), 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 (the "Address"), in each case not
less than forty-eight (48) hours prior to the meeting. The notice need not
describe the purpose of the meeting of the Board of Directors or the business to
be transacted at such meeting. If mailed, the notice shall be deemed to be
effective when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice is given by telegram, the notice shall be deemed to
be effective when the telegram is delivered to the telegraph company. If notice
is given by private carrier, the notice shall be deemed to be effective when
delivered to the private carrier.
3.7. Quorum. Except as otherwise provided by the Wisconsin Business Corporation
Law, the Articles of Incorporation or these Bylaws, a majority of the number of
directors prescribed by resolution (or if no number is prescribed, the number in
office immediately before the meeting begins), shall constitute a quorum of the
Board of Directors. Except as otherwise provided by the Wisconsin Business
Corporation Law, the Articles of Incorporation or these Bylaws, a majority of the
number of directors appointed to serve on a committee shall constitute a quorum
of the committee. A majority of the directors present (though less than a
quorum) may adjourn any meeting of the Board of Directors or any committee
thereof.
3.8. Manner of Acting. Except as otherwise provided by the Wisconsin Business
Corporation Law or the Articles of Incorporation or these Bylaws, the affirmative
vote of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors or any committee thereof.
3.9. Conduct of Meetings. The Chairman of the Board, or in the Chairman's
absence, the President and Chief Executive Officer, and in the President and
Chief Executive Officer's absence, any director chosen by the directors present,
shall call meetings of the Board of Directors to order and shall chair 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. Minutes of any regular or special
meeting of the Board of Directors shall be prepared and distributed to each
director.
3.10. Vacancies. Except as provided below, any vacancy occurring in the Board
of Directors, including a vacancy resulting from an increase in the number of
directors, may be filled by any of the following: (a) the shareholders; (b) the
Board of Directors; or (c) if the directors remaining in office constitute fewer
than a quorum of the Board of Directors, the directors, by the affirmative vote
of a majority of all directors remaining in office. A vacancy that will occur at
a specific later date, because of a resignation effective at a later date or
otherwise, may be filled before the vacancy occurs, but the new director may not
take office until the vacancy occurs.
3.11. Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the Corporation as directors or may delegate such
authority to an appropriate committee.
The Board of Directors also shall have authority to provide for or delegate
authority to an appropriate committee to provide for reasonable pensions,
disability or death benefits, and other benefits or 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.
3.12. Presumption of Assent. A director who is present and is announced as
present at a meeting of the Board of Directors or a committee thereof at which
action on any corporate matter is taken shall be presumed to have assented to the
action taken unless (i) the director objects at the beginning of the meeting or
promptly upon his or her arrival to holding the meeting or transacting business
at the meeting, or (ii) the director's dissent or abstention from the action
taken is entered in the minutes of the meeting, or (iii) the director delivers
his or her written dissent or abstention to the presiding officer of the meeting
before the adjournment thereof or to the Corporation immediately after the
adjournment of the meeting or (iv) where minutes of a meeting are prepared that
fail to show a director's dissent or abstention, the director delivers to the
Corporation a written notice of that failure promptly after receiving the
minutes. Such right to dissent or abstain shall not apply to a director who
voted in favor of such action.
3.13. Committees.
(a) Unless the Articles of Incorporation otherwise provide, the Board of
Directors, by resolution adopted by the affirmative vote of a
majority of all the directors then in office, may create one (1) or
more committees, each committee to consist of two (2) or more
directors as members, which to the extent provided in the resolution
as initially adopted, and as thereafter supplemented or amended by
further resolution adopted by a like vote, may exercise the authority
of the Board of Directors, except that no committee may: (a)
authorize distributions; (b) approve or propose to shareholders
action that the Wisconsin Business Corporation Law requires be
approved by shareholders; (c) fill vacancies on the Board of
Directors or any of its committees, except that the Board of
Directors may provide by resolution that any vacancies on a committee
shall be filled by the affirmative vote of a majority of the
remaining committee members; (d) amend the Articles of Incorporation;
(e) adopt, amend or repeal Bylaws; (f) approve a plan of merger not
requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method
prescribed by the Board of Directors; or (h) authorize or approve the
issuance or sale or contract for sale of shares, or determine the
designation and relative rights, preferences and limitations of a
class or series of shares, except within limits prescribed by the
Board of Directors.
The Board of Directors may elect one or more of its members as
alternate members of any committee who may take the place of any
absent member or members at any meeting of such committee, upon
request by the Chairman of the Board, the President and Chief
Executive Officer or upon request by the chairman of the meeting.
Each committee shall fix its own rules (consistent with the Wisconsin
Business Corporation Law, the Articles of Incorporation and these
Bylaws) 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. Unless otherwise provided by the Board of
Directors in creating a committee, a committee may employ counsel,
accountants and other consultants to assist it in the exercise of
authority. The creation of a committee, delegation of authority to a
committee or action by a committee does not relieve the Board of
Directors or any of its members of any responsibility imposed on the
Board of Directors or its members by law.
Specifically, in addition to other committees established from time
to time by the Board, the Board shall have each of the following
committees: a Compensation Committee, a Retirement and Benefit Plan
Committee, an Audit Committee, a Nominating Committee, and a
Management Succession Committee. (As amended April 25, 1994.)
(b) The Compensation Committee. The Compensation Committee shall have
the following responsibilities:
(1) To recommend to the Board of Directors the compensation of the
Chairman of the Board and the President and Chief Executive
Officer, including direct regular compensation, stock options or
other appropriate incentive plans, and perquisites, if any.
(2) To review all other exempt salaries at the levels deemed
appropriate by the committee and to recommend to the Board
of Directors direct regular compensation, stock options or
other appropriate incentive plans, and perquisites, if any.
(3) To administer the 1989 Stock Option Plan (the "Plan").
(4) To fulfill the purposes of the Plan, including, without
limitation, through the conditional grant of options and
other benefits under the Plan.
(5) To recommend to the Board of Directors any revisions or
additions to the Plan.
(6) To review and report to the Board of Directors, when so
requested, on any compensation matter.
(c) The Retirement and Benefit Plan Committee. The Retirement and
Benefit Plan Committee shall have the following responsibilities:
(1) To set, review, and modify the investment policies or
philosophies for the various retirement and benefit plan
funds. The investment policies shall be a guide for the
Corporation's officers and plans' trustee(s) in
administering and directing the investment of said funds.
(2) To recommend or approve the hiring of portfolio managers to
implement the investment policies and to recommend or
approve the dismissal of portfolio managers when it is
appropriate to do so.
(3) To review and monitor the investment performance of the portfolio
managers retained by the Corporation to invest the various funds
for the Corporation's retirement and benefit plans.
(4) To recommend or approve the hiring of the trustee(s) to maintain
and distribute the assets of the various funds according to the
terms of the plans and to recommend or approve the dismissal of
the trustee(s) when it is appropriate to do so.
(5) To oversee the activities of the Corporation's officers and
the plans' trustees in accumulating, maintaining, and
distributing the funds in accordance with the terms of the
plans, in implementing and adhering to the guidelines of
the investment policies, and in administering the plans in
accordance with the various applicable laws, including the
Employee Retirement Income Security Act of 1974, as
amended.
(6) To report periodically to the Board of Directors on the status of
the various funds for the Corporation's retirement and benefit
plans and to review the Committee's activities with the Board
when so requested. (As amended April 25, 1994.)
(d) The Audit Committee. The Audit Committee shall have the following
responsibilities:
(1) To review the scope, cost, and results of the independent
audit of the Corporation's books and records, including the
annual financial statements, through conferences and direct
communication with the independent auditors.
(2) To review the results of the independent audit and the
annual financial statements with management and the
internal auditors.
(3) To review the adequacy of the Corporation's accounting,
financial, and operating controls, and the recommendations
of the independent auditors related thereto, through
conferences and direct communication with the internal
auditors and other responsible corporate executives.
(4) To recommend annually to the Board of Directors the
selection of the independent auditors.
(5) To approve the appointment or removal of the internal audit
manager.
(6) To consider proposals made by the Corporation's independent
auditors for consulting work other than normal auditing and
to judge whether or not such work could result in a loss of
"independence."
(7) To review and report to the Board of Directors, when so
requested, on any accounting or financial matters.
(e) The Nominating Committee. The Nominating Committee shall have the
following responsibilities:
(1) To review qualifications of candidates for Board of
Directors membership from whatever source received.
(2) To recommend to the Board of Directors candidates to fill
vacancies on the Board which occur between annual meetings
of shareholders.
(3) To recommend to the Board of Directors the slate of
director candidates to be proposed for election by
shareholders at the annual meeting.
(4) To recommend to the Board of Directors criteria relating to
tenure as a director, such as retirement age, limitations
on the number of times a director may stand for re-
election, and the continuation of directors in an honorary
or similar capacity.
(5) To recommend to the Board of Directors the specific amounts
of directors' retainers and meeting fees and also committee
fees for committee chairmen and members.
(6) To recommend to the Board of Directors the selection of
committee chairmen.
(7) To recommend to the Board of Directors the actual
assignments of individual directors (by name) to Board
committees.
(8) To recommend to the Board of Directors general criteria
regarding the composition of Board committees, such as
size, employee and nonemployee director membership thereon,
and the periodic rotation of committee assignments.
(9) To recommend to the Board of Directors the types and
functions of Board committees.
(f) The Management Succession Committee. The Management Succession
Committee shall have the following responsibilities:
(1) To monitor the development and performance of existing executive
officers.
(2) To review qualifications of and to recommend candidates for
executive offices, both as successors to existing executive
offices and as officers filling newly-created executive offices.
(3) To monitor plans, programs and policies for training and
preparing candidates for executive offices, so as to ensure that
there are persons qualified to succeed to all executive offices
as they become vacant or are created. (As amended April 25,
1994.)
Article IV. Officers
4.1. Election. The principal officers shall include a Chairman of the Board, a
President and Chief Executive Officer, one or more Vice Presidents (the number
and designations to be determined by the Board of Directors), a Controller, a
Secretary, a Treasurer and such other officers, if any, as may be deemed
necessary by the Board of Directors, each of whom shall be elected by the Board
of Directors. The Chairman of the Board shall be chosen from among the Board of
Directors. The Board of Directors may also authorize any duly elected officer to
appoint one or more officers or assistant officers. Any two or more offices may
be held by the same person except the offices of Chairman of the Board and
President and Chief Executive Officer; Chairman of the Board and Secretary,
Chairman of the Board and Vice President, President and Chief Executive Officer
and Secretary and President and Chief Executive Officer and Vice President.
4.2. 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 is not held at that meeting, their
election shall be held as soon thereafter as is practicable. 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.
4.3. Removal. The Board of Directors may remove any officer and, unless
restricted by the Board of Directors or these Bylaws, an officer may remove any
officer or assistant officer appointed by that officer, at any time, with or
without cause and notwithstanding the contract rights, if any, of the officer
removed. The appointment of an officer does not of itself create contract
rights.
4.4. Resignation. An officer may resign at any time by delivering notice to the
Corporation that complies with Wisconsin Business Corporation Law. The
resignation shall be effective when the notice is delivered, unless the notice
specifies a later effective date and the Corporation accepts the later effective
date.
4.5. Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors. If a resignation is effective at a later date, the Board of
Directors may fill the vacancy before the effective date if the Board of
Directors provides that the successor may not take office until the effective
date.
4.6. Chairman of the Board. The Chairman of the Board shall preside when
present at all meetings of the Board of Directors and the shareholders. He may
sign and execute in the name of the Corporation all bonds, deeds, mortgages,
contracts, notes, checks and other obligations in the ordinary scope of the
business of the Corporation or as may be specifically authorized by the Board of
Directors. The Chairman of the Board shall report to the Board of Directors and
shall from time to time report to the Board of Directors all matters within his
or her knowledge which the interests of the Corporation may require to be brought
to its notice and shall perform such other duties as may be prescribed by the
Board of Directors from time to time.
4.7. President and Chief Executive Officer. The President and Chief Executive
Officer shall be the chief executive officer of the Corporation. The President
and Chief Executive Officer shall report to the Board of Directors and shall have
general supervision of the business and affairs of the Corporation and over all
other officers, employees and agents of the Corporation except the Chairman of
the Board, if he or she is an employee, and shall perform such other duties as
may be prescribed by the Board of Directors from time to time. As chief
executive officer, the President and Chief Executive Officer may delegate such
duties as may be deemed advisable to the other officers of the Corporation. The
President and Chief Executive Officer shall carry into effect all resolutions and
orders of the Board of Directors and shall also have the general administrative
powers and duties usually vested in the office of a president and chief executive
officer of a corporation. In the absence or disability of the Chairman of the
Board, the President and Chief Executive Officer shall generally have the powers
and duties of the Chairman of the Board. The President and Chief Executive
Officer may sign and execute in the name of the Corporation all bonds, deeds,
mortgages, contracts, notes, checks and other obligations in the ordinary scope
of the business of the Corporation or as may be specifically authorized by the
Board of Directors.
4.8. Vice Presidents. In the absence of the President and Chief Executive
Officer, or in the event of the President and Chief Executive Officer's death,
inability or refusal to act, or in the event for any reason it shall be
impracticable for the President and Chief Executive Officer to act personally,
the Vice President (or if there be more than one, in the order designated by the
Board of Directors, or in the absence of designation, in the order of election)
shall perform the duties of the President and Chief Executive Officer, and when
so acting shall have all the powers of and be subject to all of the restrictions
on the President and Chief Executive Officer. Any Vice President may sign, with
the 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 and Chief Executive Officer or 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 the Vice
President's authority to act in the stead of the President and Chief Executive
Officer.
4.9. Secretary. The Secretary shall: (a) keep (or cause to be kept) regular
minutes of all meetings of the shareholders, the Board of Directors and any
committees of the Board of Directors; (b) see that all notices are duly given in
accordance with the provisions of these Bylaws 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 which are authorized
to be executed on behalf of the Corporation under its seal; (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 and Chief Executive Officer or any 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
and Chief Executive Officer or by the Board of Directors.
4.10. 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 moneys in the name of the Corporation in banks, trust
companies or other depositories selected by the Corporation; 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 and Chief Executive Officer, the Vice
President, Finance or the Board of Directors.
4.11. Controller. The Controller shall: (a) maintain proper audit control over
the operations of the Corporation and be generally responsible for the accounting
system employed by the Corporation and the accounting practices adopted by the
various departments; (b) direct the budgetary control, general accounting, cost
accounting and statistical activities of the Corporation; and (c) supervise
activities in connection with credits and collections, taxes and physical
inventories. The Controller shall prepare and furnish such reports and
statements showing the financial condition of the Corporation as shall be
required of him or her by the President and Chief Executive Officer, the Vice
President, Finance or the Board of Directors, and in general perform all of the
duties incident to the office of Controller 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 and Chief Executive Officer, the Vice President,
Finance or the Board of Directors.
4.12. Assistants and Acting Officers. The Board of Directors and the President
and Chief Executive Officer shall have the power to appoint any person to act as
assistant to any officer, or as agent for the Corporation in the officer's stead,
or to perform the duties of the officer whenever for any reason it is
impracticable for the officer to act personally, and the assistant or acting
officer or other agent appointed by the Board of Directors or President and Chief
Executive Officer shall have the power to perform all the duties of the office to
which that person is appointed to be assistant, or as to which he or she is
appointed to act, except as such power may be otherwise defined or restricted by
the Board of Directors or President and Chief Executive Officer.
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 a salary by reason of the fact that
the officer is also a director of the Corporation.
Article V. Contracts, Loans, Checks
and Deposits; Special Corporate Acts
5.1. 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. In the absence of other designation,
all deeds, mortgages and instruments of assignment or pledge made by the
Corporation shall be executed in the name of the Corporation by the President and
Chief Executive Officer or one of the Vice Presidents and by the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer; the Secretary or an
Assistant Secretary, when necessary or required, shall affix the corporate seal,
if any, thereto; and when so executed no other party to such instrument or any
third party shall be required to make any inquiry into the authority of the
signing officer or officers.
5.2. Loans. No indebtedness for borrowed money shall be contracted on behalf of
the Corporation and no evidences of 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.
5.3. 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 an 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.
5.4. 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 depositaries as may be selected by or under the authority of a
resolution of the Board of Directors.
5.5. Voting of Securities Owned by the 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 the Corporation may be
voted at any meeting of security holders of the other corporation by the
President and Chief Executive Officer if he or she be present, or in his or her
absence by any Vice President of this Corporation who may be present, and (b)
whenever, in the judgment of the President and Chief Executive Officer, or in his
or her absence, of any Vice President, it is desirable for the 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, the proxy or
consent shall be executed in the name of the Corporation by the President and
Chief Executive Officer or one of the Vice Presidents of the Corporation, without
necessity of any authorization by the Board of Directors, affixation of corporate
seal, if any, or countersignature or attestation by any other officer.
Article VI. Certificates for Shares; Transfers of Shares
6.1. Certificates for Shares. Certificates representing shares of the
Corporation shall be in such form, consistent with the Wisconsin Business
Corporation Law, as shall be determined by the Board of Directors. The
certificates shall be signed by the President and Chief Executive Officer 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 canceled 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 6.6.
6.2. Facsimile Signatures and Seal. The seal of the Corporation, if any, on any
certificates for shares may be a facsimile. The signature of the President and
Chief Executive Officer 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.
6.3. Signature by Former Officers. The validity of a share certificate is not
affected if a person who signed the certificate (either manually or in facsimile)
no longer holds office when the certificate is issued.
6.4. 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 power 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 such endorsements
are genuine and effective and compliance with such other regulations as may be
prescribed by or under the authority of the Board of Directors.
6.5. Restrictions on Transfer. The face or reverse side of each certificate
representing shares shall bear a conspicuous notation of any restriction upon the
transfer of such shares.
6.6. Lost, Destroyed or Stolen Certificates. Where the owner claims that
certificates for shares have 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, (b) files with the Corporation a sufficient indemnity bond if required
by the Board of Directors or any principal officer, and (c) satisfies such other
reasonable requirements as may be prescribed by or under the authority of the
Board of Directors.
6.7. Consideration for Shares. The Board of Directors may authorize shares to
be issued for consideration consisting of any tangible or intangible property or
benefit to the Corporation, including cash, promissory notes, services performed,
contracts for services to be performed or other securities of the Corporation.
Before the Corporation issues shares, the Board of Directors shall determine that
the consideration received or to be received for the shares to be issued is
adequate. The determination of the Board of Directors is conclusive insofar as
the adequacy of consideration for the issuance of shares relates to whether the
shares are validly issued, fully paid and nonassessable. The Corporation may
place in escrow shares issued in whole or in part for a contract for future
services or benefits, a promissory note, or other property to be issued in the
future, or make other arrangements to restrict the transfer of the shares, and
may credit distributions in respect of the shares against their purchase price,
until the services are performed, the benefits or property are received or the
promissory note is paid. If the services are not performed, the benefits or
property are not received or the promissory note is not paid, the Corporation may
cancel, in whole or in part, the shares escrowed or restricted and the
distributions credited.
6.8. Stock Regulations. The Board of Directors shall have the power and
authority to make all further rules and regulations not inconsistent with law as
it may deem expedient concerning the issue, transfer and registration of shares
of the Corporation.
Article VII. Waiver of Notice
7.1. Shareholder Written Waiver. A shareholder may waive any notice required by
the Wisconsin Business Corporation Law, the Articles of Incorporation or these
Bylaws before or after the date and time stated in the notice. The waiver shall
be in writing and signed by the shareholder entitled to the notice, shall contain
the same information that would have been required in the notice under the
Wisconsin Business Corporation Law except that the time and place of meeting need
not be stated, and shall be delivered to the Corporation for inclusion in the
corporate records.
7.2. Director Written Waiver. A director may waive any notice required by the
Wisconsin Business Corporation Law, the Articles of Incorporation or these Bylaws
before or after the date and time stated in the notice. The waiver shall be in
writing, signed by the director entitled to the notice and retained by the
Corporation.
Article VIII. Action Without Meetings
8.1. Director Action Without Meeting. Unless the Articles of Incorporation
provide otherwise, action required or permitted by the Wisconsin Business
Corporation Law to be taken at a meeting of the Board of Directors or committee
meeting may be taken without a meeting if the action is taken by all members of
the Board or committee. The action shall be evidenced by one or more written
consents describing the action taken, signed by each director and retained by the
Corporation. Action taken hereunder is effective when the last director signs
the consent, unless the consent specifies a different effective date.
Article IX. Indemnification
9.1. Certain Definitions. All capitalized terms used in this Article IX not
otherwise hereinafter defined, including specifically Corporation, Director or
Officer, Expenses, Liability, Party and Proceeding (which term for purposes of
this Article IX shall be deemed to include an appeal from any proceeding), shall
have the meanings set forth in Section 180.0850 of the Statute. As used in this
Article IX, Statute shall mean Sections 180.0850 through 180.0859, inclusive, of
the Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin Statutes, as
the same shall then be in effect, including any amendments thereto, but, in the
case of any amendment, only to the extent that the amendment permits or requires
the Corporation to provide broader indemnification rights than the Statute
permitted or required the Corporation to provide prior to the amendment.
9.2. Right to Indemnification. Each Director and Officer who is a Party to any
Proceeding because he or she is a Director or an Officer of the Corporation shall
be indemnified by the Corporation to the fullest extent permitted by the laws of
Wisconsin against any and all Liabilities incurred or suffered by the Director or
Officer in connection with any Proceeding.
9.3. Nonduplication. The Corporation shall not indemnify any Director or
Officer for any amount if the Director or Officer has previously received
indemnification or allowance of Expenses for such amount from any person
including the Corporation in connection with the same Proceeding; however, the
Director or Officer has no duty to look to any other person for indemnification.
9.4. Procedure for Indemnification.
(a) Any person claiming the right to indemnification under this Article
IX shall submit a written request for indemnification to the
Secretary of the Corporation, setting forth in reasonable detail the
nature of the claim and the Liability incurred.
(b) Unless otherwise provided by the Articles of Incorporation or by
written agreement between the Director or Officer and the
Corporation, the Director or Officer seeking indemnification under
this Article IX shall select one of the following means for
determining his or her right to indemnification hereunder:
(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 ("Disinterested Directors"). If a quorum of
Disinterested Directors cannot be obtained, by a majority vote of
a committee duly appointed by the Board of Directors and
consisting solely of two (2) or more Disinterested Directors.
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 Section
9.4(b)(1) of this Article IX or, if such a quorum or committee is
not available, 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 (3) arbitrators consisting of one arbitrator
selected by those directors entitled under Section 9.4(b)(2) of
this Article IX to select independent legal counsel, one
arbitrator selected by the Director or Officer seeking
indemnification and one arbitrator selected by the two (2)
arbitrators previously selected.
(4) By an affirmative vote of shares represented at a meeting
of shareholders at which a quorum of the voting group
entitled to vote thereon 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 pursuant to and in accordance with Section
180.0854 of the Statute.
(6) By any other method provided for in any additional right to
indemnification permitted under Section 9.10 of this
Article IX hereof.
(c) In any determination under subsection (b) of this Section 9.4, the
burden of proof is on the Corporation to prove by clear and
convincing evidence that indemnification should not be allowed.
(d) A written determination as to a Director's or Officer's right to
indemnification shall be submitted simultaneously to both the
Corporation and the Director or Officer within sixty (60) days of the
selection of the method of determining the right to indemnification
made under subsection (b) of this Section 9.4.
(e) If it is determined that indemnification is required, the Corporation
shall pay all permitted Liabilities and Expenses (net of Expenses
previously advanced pursuant to Section 9.6 hereof) within ten (10)
days after receipt of the written determination under subsection (d)
of this Section 9.4; provided, that, if it is determined that a
Director or Officer is entitled to indemnification against
Liabilities incurred in connection with some claims, issues or
matters, but not as to other claims, issues or matters, involved in
the subject Proceeding, the Corporation shall be required to pay (in
the manner set forth above) only the amount of such Liabilities as
shall be deemed appropriate by the determining body in light of all
of the circumstances of such Proceeding. In the event the Director
or Officer is entitled to indemnification hereunder, the Corporation
shall also pay all Expenses incurred by the Director or Officer in
the determination process under subsection (b) of this Section 9.4.
9.5. Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any person indemnified under this Article against any Expense,
Liability or loss, whether or not the Corporation would have the obligation to
indemnify the person under Wisconsin law.
9.6. Mandatory Allowance of Expenses Incurred. Within ten (10) days after
receipt of a written request by Director or Officer who is a Party to a
Proceeding (which requests may be submitted by the Director or Officer from time
to time or at any time during the course of the Proceeding), the Corporation
shall pay or reimburse his or her reasonable Expenses incurred to the date of
such request, if the Director or Officer provides the Corporation with all of the
following:
(a) 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 in the manner described in Section 180.0851(2)(a) of the
Statute; and
(b) A written undertaking to repay the allowance in the event that
it is ultimately determined that indemnification under Section
9.2 of this Article IX is not required and indemnification is
not ordered by a court as provided for under Section 180.0854
of the Statute.
If the Director of Officer must repay any previously advanced Expenses pursuant
to this Section 9.6, such Director or Officer shall not be required to pay
interest on such amounts.
9.7. Indemnification and Allowance of Expenses of Employees and Others. The
Corporation shall indemnify any employee who is not a Director or Officer to the
extent that he or she has been successful on the merits or otherwise in defending
a Proceeding, for all reasonable Expenses incurred in the Proceeding, if the
employee was a Party because he or she was an employee of the Corporation. In
addition, the Corporation (to the extent not otherwise provided for in this
Section 9.7) may indemnify against Liabilities and allow reasonable Expenses of
an employee, agent or other person who is not a Director or Officer of the
Corporation to the extent provided by general or specific action of the Board of
Directors or by contract.
9.8. Securities Law Claims. Pursuant to the public policy of the State of
Wisconsin, the Corporation shall provide for indemnification against Liabilities
and allowance of Expenses and may insure for any Liability incurred in connection
with a Proceeding involving a federal or state statute, rule or regulation
regulating the offer, sale or purchase of securities, brokers or dealers or
investment companies or investment advisors to the extent otherwise required or
permitted under this Article IX.
9.9. Severability. If any provision of this Article IX shall be deemed invalid
or inoperative or if a court determines that any provision contravenes public
policy, this Article shall be construed so that the remaining provisions shall
remain in full force and effect, and any provisions which are invalid or
inoperative or which contravene public policy shall be deemed, without further
action to be modified, amended and/or limited, but only to the extent necessary
to render them valid and enforceable; it being understood that it is the
Corporation's intention to provide the Directors and Officers with the broadest
possible protection against personal liability allowable under the Statute.
9.10. Non-Exclusivity. The rights of any person to indemnification under this
Article IX shall not limit or be deemed exclusive of any other rights to
indemnification which may be provided in accordance with Section 180.0858 of the
Statute.
9.11. Contractual Nature of Article IX. This Article IX shall be deemed to be a
contract between the Corporation and each Director, Officer and employee of the
Corporation and any repeal or other limitation of this Article IX or of the
Statute or any other applicable law shall not limit any rights of indemnification
existing or arising out of events, acts or omissions occurring prior to the
repeal or limitation, including, without limitation, the right to indemnification
against Liability or allowance of Expenses for Proceedings commenced after the
repeal or limitation with regard to acts, omissions or events arising prior to
the repeal or limitation.
Article X. Seal
The corporate seal of the Corporation shall be a circular impression having on
the margin of the outer circle thereof "CONSOLIDATED PAPERS, INC." and on the
margin of the inner circle in small print "CORPORATE" and "WISCONSIN RAPIDS,
WIS." and in the center of this impression the word "SEAL".
Article XI. Amendments
11.1. By Shareholders. These Bylaws may be amended or repealed and new Bylaws
may be adopted by the shareholders at any annual or special meeting of the
shareholders at which a quorum is in attendance.
11.2. By Directors. Except as otherwise provided in the Wisconsin Business
Corporation Law or the Articles of Incorporation, these Bylaws may also be
amended or repealed and new Bylaws may be adopted by the Board of Directors by
the affirmative vote of a majority of the directors fixed by or in accordance
with these bylaws; provided, however, that the shareholders in adopting, amending
or repealing a particular bylaw may provide therein that the Board of Directors
may not amend, repeal or readopt the bylaw or set specific voting requirements
for the Board of Directors to amend, repeal or readopt the bylaw.
11.3 Implied Amendments. Any action taken or authorized by the shareholders or
by the Board of Directors, which would be inconsistent with the Bylaws then in
effect but is taken or authorized by a vote that would be sufficient to amend the
Bylaws so that the Bylaws would be consistent with the action, shall be given the
same effect as through the Bylaws 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.a. To Form 10-Q For
Consolidated Papers, Inc. For
The Quarter Ended March 31, 1994
CONSOLIDATED PAPERS, INC.
1989 STOCK OPTION PLAN
(AS AMENDED THROUGH APRIL 25, 1994)
1. Purpose. The purposes of the Consolidated Papers, Inc. 1989 Stock Option
Plan (the "Plan") are (i) to encourage outstanding individuals to accept or
continue employment with Consolidated Papers, Inc. (the "Corporation") and
its subsidiaries or to serve as directors of the Corporation, and (ii) to
furnish maximum incentive to those persons to improve operations and
increase profits by providing them the opportunity to acquire Common Stock
of the Corporation ("Common Stock").
2. Administration. The Plan will be administered by a committee (the
"Committee") of the Board of Directors of the Corporation consisting of
three or more nonemployee Directors as the board may designate from time to
time, none of whom have been eligible to receive a benefit under this Plan
(except as set forth in Section 8 of this Plan) or under any other stock
option plan of the Corporation for a period of at least one year prior to
appointment. The determinations of the Committee shall be made in
accordance with their judgment as to the best interests of the Corporation
and its shareholders and in accordance with the purposes of the Plan. A
majority of members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of its members.
Any determination of the Committee under the Plan may be made without notice
or meeting of the Committee, in writing signed by all the Committee members.
3. Participants. Participants will initially consist of all nonemployee
directors of the Corporation in accordance with the provisions of Section 8
of this Plan and all nonunion employees of the Corporation and its
subsidiaries. Designation of an employee participant in any year shall not
require the Committee to designate that person to receive a benefit in any
other year or to receive the same type or amount of benefit as granted to
the participant in any other year or as granted to any other participant in
any year. The Committee shall consider all factors which it deems relevant
in selecting employee participants and in determining the type and amount of
their respective benefits.
4. Types of Benefits. Benefits under the Plan shall consist of Incentive Stock
Options and Nonqualified Stock Options, as hereinafter described. Grants of
stock options under this Plan may provide for partial exercise, in the
discretion of the Committee.
Notwithstanding Section 6(c) or Section 7(c) of this Plan, the Compensation
Committee of the Board of Directors may, in its discretion, grant
nonqualified options under this Plan which may be exercised for up to five
years following a participant's termination of employment by retirement.
The Compensation Committee may also modify outstanding options to extend
permitted exercise dates for up to five years after the holder's retirement
(but in no event more than ten years from the date of the original grant).
In addition, subject to the adjustment provisions of Section 9 hereof, the
maximum number of shares of Common Stock available for awards under this
Plan to any participant in any fiscal year of the Company shall not exceed
100,000 shares. (Section added effective April 25, 1994.)
5. Shares Reserved Under the Plan. There is hereby reserved for issuance under
the Plan an aggregate of 2,500,000 shares of Common Stock of the
Corporation, which may be newly issued or treasury shares. All of the
shares may, but need not, be issued pursuant to the exercise of Incentive
Stock Options. If there is a lapse, expiration, termination, or
cancellation of any Incentive Stock Options or Nonqualified Stock Option
prior to the issuance of shares thereunder, or if shares are issued under a
stock option and thereafter are reacquired by the Corporation, those shares
may again be used for new benefits under this Plan.
6. Incentive Stock Options. Incentive Stock Options shall consist of stock
options to purchase shares of Common Stock at purchase prices equal to 100%
of the fair market value of the shares on the date the option is granted.
The purchase price may be paid by check or, in the discretion of the
Committee, by the delivery of shares of Common Stock of the Corporation then
owned by the participant. Incentive Stock Option will be exercisable not
earlier than six months and not later than ten years after the date they are
granted and will terminate (a) immediately upon termination of employment by
the Corporation for cause, (b) three months after termination of employment
by reason of a participant's voluntary termination, (c) six months after
termination of employment by the Corporation without cause or by retirement,
and (d) twelve months after death or permanent disability. For purposes of
this Section and Section 7 hereof, "cause" shall mean a participant's
continued, unexcused failure to perform his duties or conduct detrimental to
the interests of the Corporation. A termination of employment for cause
shall be deemed to occur as of the close of business on the day immediately
prior to the day on which corporate action to effect the termination is
taken. The aggregate fair market value (determined as of the time the
option is granted) of the shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a participant
during any calendar year (under all option plans of the Corporation and its
subsidiary corporations)shall not exceed $100,000.
7. Nonqualified Stock Options. Nonqualified Stock Options shall consist of
stock options to purchase shares of Common Stock at purchase prices equal to
100% of the fair market value of the shares on the date the option is
granted. The purchase price may be paid by check or, in the discretion of
the Committee, by the delivery of shares of Common Stock of the Corporation
then owned by the participant. Except as provided in Section 8,
Nonqualified Stock Options will be exercisable not earlier than six months
and not later than ten years after the date they are granted and will
terminate (a) immediately upon termination of employment by the Corporation
for cause, (b) three months after termination of employment by reason of a
participant's voluntary termination, (c) six months after termination of
employment by the Corporation without cause or by retirement, and (d) twelve
months after death or permanent disability.
8. Nonemployee Directors. Each director of the Corporation who is not also an
employee of the Corporation (including members of the Committee) and who is
a director on the date of the adoption of this Plan and on the date of the
annual meeting of shareholders of the Corporation in 1989, 1990, and 1991
shall automatically receive on each of the three meeting dates a
Nonqualified Stock Option for the purchase of 1,000 shares of the
Corporation's Common Stock at a purchase price equal to 100% of the fair
market value of the shares on the date each option is granted. Each
director of the Corporation who is not also an employee of the Corporation
(including members of the Committee) and who is initially elected subsequent
to the date of the adoption of this Plan shall automatically receive on the
date of the first three annual meetings of shareholders to be held after the
director has completed one year of service on the Board during the term of
this Plan a Nonqualified Stock Option for the purchase of 1,000 shares of
the Corporation's Common Stock at a purchase price equal to 100% of the fair
market value of the shares on the date each option is granted. Nonqualified
Stock Options issued to nonemployee directors shall expire ten years from
the date of grant, whether or not the director continues to serve the
Corporation in that capacity. In no event shall any nonemployee director
receive options under this Plan for more than 3,000 shares of the
Corporation's Common Stock or receive an option when the director is no
longer on the Board. Nonemployee directors shall not be eligible for any
other benefit under the Plan.
Effective February 10, 1994, Section 8 is amended to provide that directors
who are eligible to receive options under Section 8 may not receive options
under this Plan for more than 5,000 shares of the Company's Common Stock.
Awards for the purchase of 1,000 shares of Common Stock shall be made
automatically on the date of the first five annual meetings of shareholders
held after the director has completed one year of service on the board
during the term of the Plan; or, if a director has received options to
purchase 3,000 shares of Common Stock prior to February 10, 1994, awards for
the purchase of 1,000 shares of Common Stock shall be made automatically on
the date of the first two annual meetings of shareholders held after
February 10, 1994. (Section added effective April 25, 1994.)
9. Adjustment Provisions.
(a) If the Corporation shall at any time change the number of issued shares
of Common Stock without new consideration to the Corporation (such as by
stock dividends or stock splits), the total number of shares reserved
for issuance under this Plan and the number of shares covered by each
outstanding benefit shall be adjusted so that the aggregate
consideration payable to the Corporation, shall not be changed.
(b) Notwithstanding any other provision of this Plan, without affecting the
number of shares reserved or available hereunder, the Board of Directors
may authorize the issuance or assumption of benefits in connection with
any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem
appropriate.
(c) In the case of any merger, consolidation or combination of the
Corporation with or into another corporation, other than a merger,
consolidation or combination in which the Corporation is the continuing
corporation and which does not result in the outstanding Common Stock
being converted into or exchanged for different securities, cash or
other property, or any combination thereof (an "Acquisition") any
participant to whom a stock option has been granted under the Plan shall
have the right (subject to the provisions of the Plan and any limitation
applicable to the option) thereafter and during the term of the option,
to receive upon exercise thereof of the Acquisition Consideration (as
defined below) receivable upon the Acquisition by a holder of the number
of shares of Common Stock which might have been obtained upon exercise
of the option or portion thereof, as the case may be, immediately prior
to the Acquisition.
The term "Acquisition Consideration" shall mean the kind and amount of
shares of the surviving or new corporation, cash, securities, evidence
of indebtedness, other property or any combination thereof receivable in
respect of one share of Common Stock of the Corporation upon
consummation of an Acquisition.
10. Nontransferability. Each benefit granted under the Plan shall not be
transferable otherwise than by will or the laws of descent and distribution,
and shall be exercisable, during the participant's lifetime, only by the
participant, or, in the event of his disability, by his personal
representative. In the event of the death of a participant, exercise or
payment shall be made only by or to the executor or administrator of the
estate of the deceased participant or the person or persons to whom the
deceased participant's rights under the benefit shall pass by will or the
laws of descent and distribution.
11. Other Provisions. The award of any benefit under the Plan may also be
subject to any other provisions (whether or not applicable to the benefit
awarded to any other participant) which the Committee determines
appropriate, including without limitation, provisions for the installment
purchase of Common Stock under Stock Options, provisions to assist the
participant in financing the acquisition of Common Stock, restrictions on
resale or other disposition, provisions for the acceleration of
exercisability of benefits and/or for the payment of the value of benefits
to participants in the event of a change of control of the Corporation,
provisions to comply with federal and state securities laws, or
understandings or conditions as to the participant's employment in addition
to those specifically provided for under the Plan. In the discretion of the
Committee, payment for any shares subject to an option may also be made by
delivering a properly executed exercise notice to the Corporation together
with a copy of irrevocable instructions to a broker to deliver promptly to
the Corporation the amount of sale or loan proceeds to pay the purchase
price. To facilitate the foregoing, the Corporation may enter into
agreement for coordinated procedures with one or more brokerage firms.
12. Taxes. The Corporation shall be entitled to withhold the amount of any tax
attributable to any shares deliverable under the Plan after giving the
person entitled to receive the shares notice as far in advance as
practicable, and the Corporation may defer making delivery as to any benefit
if any tax is payable until indemnified to its satisfaction. The Committee
may, in its discretion and subject to rules which it may adopt, permit a
participant to pay all or a portion of all taxes arising in connection with
(a) the exercise of a Nonqualified Stock Option, or (b) a disqualifying
disposition of Common Stock received upon the exercise of an Incentive Stock
Option, by electing to (i) have the Corporation withhold shares of Common
Stock, (ii) tender back shares of Common Stock received in connection with
the benefit or (iii) deliver other previously owned shares of Common Stock,
having a fair market value equal to the amount to be withheld; provided,
however, that the amount to be withheld shall not exceed the participant's
estimated total federal, state, and local tax obligations associated with
the transaction. The fair market value of the shares used to pay
withholding taxes is the average of the high and low price of the Common
Stock on the date as of which the amount of tax to be withheld is
determined. The fair market value of the fractional shares remaining after
payment of the withholding taxes shall be paid to the participant in cash.
13. Tenure. A participant's right, if any, to continue to serve the Corporation
and its subsidiaries as an officer, employee, or otherwise, shall not be
enlarged or otherwise affected by his or her designation as a participant
under the Plan.
14. Duration, Amendment, and Termination. No stock option shall be granted more
than ten years after the date of adoption of this Plan; provided, however,
that the terms and conditions applicable to any option granted within such
period may thereafter be amended or modified by mutual agreement between the
Corporation and the participant or such other persons as may then have an
interest therein. Also, by mutual agreement between the Corporation and a
participant hereunder or under any other stock option plan of the
Corporation, options may be granted to the participant in substitution and
exchange for, and in cancellation of, any benefits previously granted to the
participant under this Plan or any other stock option plan of the
Corporation. The Board of Directors may amend the Plan from time to time or
terminate the Plan at any time. However, no action authorized by this
paragraph shall reduce the amount of any existing benefit or change the
terms and conditions thereof without the participant's consent. No
amendment of the Plan shall, without approval of the shareholders of the
Corporation, (a) materially increase the total number of shares which may be
issued under the Plan; (b) materially reduce the minimum purchase price of
shares of Common Stock which may be made subject to benefits under the Plan;
(c) materially modify the requirements as to eligibility for benefits under
the Plan; or (d) result in any participant in the Plan losing his status as
a "disinterested administrator" under Securities and Exchange Commission
Rule 16b-3 with respect to this Plan or any other employee benefit plan of
the Corporation or its subsidiaries.
15. Shareholder Approval. The Plan was adopted by the Board of Directors on
February 10, 1989 subject to shareholder approval. The Plan and any
benefits granted thereunder shall be null and void if shareholder approval
is not obtained within twelve months of the adoption of the Plan by the
Board of Directors.
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