SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
Form 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the Quarterly Period Ended: March 28, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _____________
to __________.
Commission File Number 1-2725
HEIN-WERNER CORPORATION
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0340430
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
2120 Pewaukee Road, Waukesha, Wisconsin 53188-2404
(Address of principal executive offices) (Zip Code)
(414) 542-6611
(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 [ ]
Number of shares of $1 par value common stock issued and outstanding at
May 12, 1998 was 2,918,899.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - Unaudited
(Amounts in thousands, except share data)
March 28, December 31,
1998 1997
ASSETS
CURRENT ASSETS:
Cash $ 8,514 $ 9,696
Accounts receivable 12,505 13,750
Less allowance for losses 1,569 1,570
-------- --------
10,936 12,180
Inventories 10,128 9,876
Prepaid expenses and other 1,685 1,634
-------- --------
TOTAL CURRENT ASSETS 31,263 33,386
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Buildings 1,191 1,191
Machinery and equipment 6,533 6,338
-------- --------
7,724 7,529
Less accumulated depreciation 4,814 4,729
-------- --------
NET PROPERTY, PLANT AND EQUIPMENT 2,910 2,800
OTHER ASSETS:
Patents and trademarks 1,033 1,033
Goodwill 141 141
-------- --------
1,174 1,174
Less accumulated amortization 732 720
-------- --------
Net intangibles 442 454
Noncurrent notes receivable 793 850
Less allowance for uncollectible notes 473 473
-------- --------
Net receivables 320 377
Other 332 331
-------- --------
TOTAL OTHER ASSETS 1,094 1,162
-------- --------
$ 35,267 $ 37,348
======== ========
See accompanying notes to interim consolidated financial statements.
<PAGE>
Consolidated Balance Sheets - Unaudited
(Amounts in thousands, except share data)
March 28, December 31,
1998 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 2,478 $ 2,674
Current installments of long-term debt 89 91
Accounts payable 2,969 4,530
Accrued payroll and related expenses 1,554 1,684
Accrued commissions 433 876
Accrued income taxes 1,004 999
Other accrued expenses 2,177 2,031
-------- --------
TOTAL CURRENT LIABILITIES 10,704 12,885
Long-term debt, excluding
current installments 267 310
Other long-term liabilities 2,042 2,051
-------- --------
TOTAL LIABILITIES 13,013 15,246
STOCKHOLDERS' EQUITY:
Common stock of $1 par value per share
Authorized: 20,000,000 shares;
Issued: 2,908,899 shares at March 28,
1998 and 2,770,630 at December 31,
1997 2,909 2,771
Capital in excess of par value 12,651 11,769
Retained earnings 7,511 8,312
Accumulated other comprehensive income (817) (750)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 22,254 22,102
-------- --------
$ 35,267 $ 37,348
======== ========
See accompanying notes to interim consolidated financial statements.
<PAGE>
Consolidated Statements of Operations
(Amounts in thousands, except per share data) - Unaudited
Three months ended
March 28, March 29,
1998 1997
Net sales $ 8,873 $ 9,599
Cost of sales 4,510 5,165
-------- --------
Gross profit 4,363 4,434
Selling, general and administrative
expenses 4,003 3,930
-------- --------
Operating profit 360 504
Interest (income) expense - net (29) 83
Other (income) expense - net 48 11
-------- --------
Income from continuing operations, 341 410
before income taxes
Income tax expense 120 59
-------- --------
Net income from continuing operations $ 221 $ 351
Income (loss) from operations of 0 (81)
discontinued businesses, net of related
income tax
NET INCOME $ 221 $ 270
======== ========
Earnings per share from continuing $ 0.08 $ 0.12
operations - basic
Earnings (loss) per share from
discontinued operations - basic 0.00 (0.03)
-------- --------
Earnings per share - basic $ 0.08 $ 0.09
======== ========
Earnings per share from continuing $ 0.08 $ 0.11
operations - diluted
Earnings (loss) per share from
discontinued operations - diluted 0.00 (0.02)
-------- --------
Earnings per share - diluted $ 0.08 $ 0.09
======== ========
See accompanying notes to interim consolidated financial statements.
<PAGE>
Consolidated Statements of Cash Flows - Unaudited
(Amounts in thousands)
Three months ended
March 28, March 29,
1998 1997
CASH FROM OPERATING ACTIVITIES:
Net income $ 221 $ 270
Adjustments to net income for expenses
(gains) not affecting cash:
Depreciation and amortization 205 310
Bad debt expenses 0 14
Increase (decrease) in cash due to changes
in:
Accounts receivable 1,244 1,411
Inventories (252) 1,018
Prepaid expenses and other assets 5 452
Accounts payable (561) (1,110)
Accrued expenses and other liabilities (431) (776)
-------- --------
Cash provided by (used in)
operating activities................... 431 1,589
CASH USED IN INVESTING ACTIVITIES:
Capital expenditures..................... (305) (501)
CASH FROM FINANCING ACTIVITIES:
Decrease in notes payable (196) (663)
Repayment of long-term debt (45) 312
Warrant repurchase (1,000) 0
-------- --------
Cash provided by (used in)
financing activities..................... (1,241) (351)
Cumulative translation adjustments......... (67) (737)
-------- --------
TOTAL CASH PROVIDED (USED) (1,182) 0
CASH - BEGINNING OF THE PERIOD 9,696 0
-------- --------
CASH - END OF THE PERIOD $ 8,514 $ 0
======== ========
See accompanying notes to interim consolidated financial statements.
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES:
The financial statements reflect all adjustments which are, in the opinion
of management, necessary for a fair statement of the results of the
interim periods presented. All adjustments are normal and recurring. All
items stated herein are subject to year-end audit.
INVENTORY:
===================================================================
(Amounts in thousands)
3/28/98 12/31/97
-------------------------------------------------------------------
Raw Material $ 2,052 $ 2,065
Work-in-Process 322 958
Finished Goods 7,754 6,853
-------------------------------------------------------------------
$ 10,128 $ 9,876
===================================================================
DISCONTINUED OPERATIONS:
Effective May 29, 1997, the Company sold for cash substantially all of the
business and assets, and transferred certain of the liabilities, of its
Great Bend Industries fluid power division. The fluid power division
designed, manufactured, and supplied high performance single-acting,
double-acting, and telescopic hydraulic cylinders and related hydraulic
components to original equipment manufacturers in the construction,
transportation, solid waste, utility, and energy industries.
Effective August 28, 1997, the Company sold for cash substantially all of
the business, including certain assets and liabilities, of its Winona Van
Norman engine rebuilding division. The engine rebuilding division
designed, manufactured, and supplied advanced machinery for the automotive
aftermarket, primarily for automotive, truck, diesel, and high-performance
engine rebuilding. The division also manufactured brake lathes and
related equipment, as well as provided contract machining services.
Net sales of the fluid power divisions and the engine rebuilding division
for the first quarter of 1997 were $4.3 million and $2.2 million
respectively. Interest has been allocated to the discontinued operations
based on the ratio of the net assets to be sold to the sum of total assets
of the net consolidated entity plus consolidated debt other than (a) debt
of the discontinued operations that was assumed by the buyer and (b) debt
that can be directly attributable to other operations of the enterprise.
Income tax expense related to the operation of the discontinued businesses
for the first quarter of 1997 was $70,000.
MATERIAL CONTINGENCIES:
A) Financial Instruments with Off-Balance-Sheet Risk.
To meet the financing needs of consumers of its collision repair and
engine rebuilding products, the Company is, in the normal course of
business, a party to financial instruments with off-balance-sheet risk.
The instruments are guarantees of notes payable to financing institutions
arranged by the Company. The Company performs credit reviews on all such
guarantees. These guarantees extend for periods of up to six years and
expire in decreasing amounts through 2000. The amount guaranteed to each
institution is contractually limited to a portion of the amount financed
in a given year. The notes are collateralized by the equipment financed.
Proceeds from the resale of recovered equipment have generally been 80% to
90% of repurchased notes.
The maximum credit risk to the Company at March 28, 1998 was approximately
$1,051,000.
B) Litigation
The Company is involved in legal proceedings, claims and administrative
actions arising in the normal course of business. In the opinion of
management, the Company's liability, if any, under any pending litigation
or administrative proceeding would not materially affect its financial
condition or operations.
C) Environmental Claims
From time to time the Company is identified as a potentially responsible
party in environmental matters, primarily related to waste disposal sites,
which contain residuals from the manufacturing process that were
previously disposed of by the Company in accordance with applicable
regulations in effect at the time of disposal. Materials generated by the
Company at these sites have been small and claims against the Company have
been handled on a de minimis basis. In addition, the Company has
indemnified purchasers of property previously sold by the Company against
any environmental damage which may have existed at the time of the sale.
In the opinion of management, the Company's liability, if any, under any
pending administrative proceeding, claim, or investigation, would not
materially affect its financial condition or operations.
COMPREHENSIVE INCOME:
Three months ended
March 28, March 29,
1998 1997
Net income 221 270
Other comprehensive income (loss)-
Cumulative translation adjustments (67) (863)
----- -----
Comprehensive income (loss) 154 (593)
===== =====
Income taxes have not been provided on cumulative translation adjustments
since foreign earnings have been and will continue to be reinvested.
SUBSEQUENT EVENT:
On April 28, 1998, the Company announced that it had entered into a
definitive merger agreement with Snap-on Incorporated pursuant to which
Snap-on will acquire all of the outstanding common stock of the Company at
a price of $12.60 per share in cash, representing a transaction value of
approximately $36 million. The transaction has been approved unanimously
by the Boards of Directors of both companies.
Under the terms of the merger agreement, a subsidiary of Snap-on will
promptly commence a tender offer for all outstanding shares of the
Company's stock. This subsidiary also entered into an option to purchase
from the Company newly issued shares at the offer price in an amount that,
together with the shares owned by Snap-on and its affiliates immediately
after the tender offer, represents at least 90 percent of the outstanding
shares of the Company on a fully diluted basis. The option becomes
exercisable upon the closing of the tender offer. Any shares not
purchased pursuant to the tender offer or such option will be acquired in
a subsequent merger at a price of $12.60 per share in cash as soon as
practicable after completion of the tender offer.
Completion of the tender offer is subject to customary conditions,
including the acquisition by Snap-on of 66-2/3rds percent of the Company
common shares on a fully-diluted basis (without giving effect to the
option agreement described above), receipt of necessary governmental
approvals and the expiration of applicable waiting periods under the Hart-
Scott-Rodino Act. The merger agreement is not subject to financing.
In the second quarter, the Company will recognize expenses related to the
above transaction. These include expenses of approximately $154,000
related to due diligence for an acquisition that will no longer be
pursued. The Company will also incur certain expenses that are contingent
upon closing of the transaction including transaction and consulting fees
of approximately $3,600,000. In addition, the Company will recognize a
change of control price adjustment for options repurchased pursuant to an
agreement dated December 30, 1997 in the amount of $3,981,000.
ITEM 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion includes forward-looking statements that reflect
management's current assumption and estimates concerning the Company's
performance and financial results. Each forward-looking statement
contained herein is either preceded by or contained in a paragraph
beginning with the phrase, "management expects" or words of similar
import. A variety of factors could cause the Company's actual results to
differ materially from the anticipated results. These factors include,
but are not limited to, increased competition; unfavorable fluctuation of
currency exchange rates; rising interest rates; instability of foreign
governments; and the escalation of raw material prices, primarily steel.
Results of Operations
Net sales for the first quarter of 1998 were $8.9 million, compared with
$9.6 million for the same period in 1997. Sales originating in North
America were $4.4 million for the first quarter of 1998 compared to $4.6
million in the same period a year earlier. European sales for the first
quarter of 1998 were $4.5 million versus the $5.0 million recorded in the
first quarter of 1997.
Gross profit margins in North America were 48.2% for the first quarter of
1998 and for the same period in 1997. Margins in Europe were 50.1% for
the first quarter of 1998 compared to 44.4% for the same period in 1997.
European margins are up due to increased productivity in our manufacturing
facilities and higher margins in select international markets.
Consolidated gross profit margins were 49.2% for the first quarter of 1998
compared with 46.2% for the same period in 1997.
Consolidated operating expenses as a percent of net sales increased to
45.1% for the first quarter of 1998 from 40.9% for the same quarter in
1997 mainly due to the decline in net sales, as operating expenses in
dollar terms increased less than 2%.
The Company earned interest income of $29,000 in the first quarter of 1998
versus paying $83,000 in interest expense for the same period in 1997.
This change was due to applying the proceeds from the prior year's sale of
two segments to reduce debt. The balance of the proceeds has been
conservatively invested.
For the three months ended March 28, 1998, the Company experienced a net
cash decrease of $1.2 million, compared with breaking even in the first
quarter of 1997. The Company repurchased approximately 750,000
outstanding warrants for $1.0 million, which was paid in January, 1998.
This repurchase was related to agreement the Company entered into late in
1997 with Massachusetts Mutual Life Insurance Company to repurchase
certain warrants to purchase Company common stock that arose from
convertible subordinated debt which was repaid during 1996 and 1997.
Income tax expense as a percent of pretax net income increased to 35.2%
from 14.4% for the first quarter of 1998 compared to the first quarter of
1997. This was mainly due to the use of loss carryforwards in prior years
with no federal carryforwards left in the United States for 1998.
Financial Condition
Improvements in cost control and balance sheet management receive
continued emphasis. Management expects its liquidity requirements will be
met by cash generated from operations and from its credit facilities.
Short-term credit facilities in Europe are considered sufficient to
supplement cash from operating activities to satisfy liquidity
requirements there. Changes in short-term borrowings are primarily due to
seasonal cash usage patterns.
On April 28, 1998, the Company announced that it had entered into a
definitive merger agreement with Snap-on Incorporated pursuant to which
Snap-on will acquire all of the outstanding common stock of the Company at
a price of $12.60 per share in cash, representing a transaction value of
approximately $36 million. The transaction has been approved unanimously
by the Boards of Directors of both companies. See Notes to Interim
Consolidated Financial Statements.
ITEM 3: Quantitative and Qualitative Disclosures About
Market Risk
Not applicable.
PART II - OTHER INFORMATION
ITEM 6: (a) Exhibits
(2.1) Agreement and Plan of Merger, dated as of April 27, 1998,
by and among Snap-on Incorporated, Snap-on Pace Company
and Hein-Werner Corporation (incorporated by reference to
Exhibit 1 to Hein-Werner Corporation's Schedule 14D-9
filed with the Securities and Exchange Commission on May
4, 1998).
(2.2) Stock Option Agreement, dated as of April 27, 1998, by
and among Snap-on Incorporated, Snap-on Pace Company and
Hein-Werner Corporation (incorporated by reference to
Exhibit 2 to Hein-Werner Corporation's Schedule 14D-9
filed with the Securities and Exchange Commission on May
4, 1998).
(2.3) Employment and Consulting Agreement, dated April 27,
1998, by and between Snap-on Incorporated, Hein-Werner
Corporation and Joseph L. Dindorf (incorporated by
reference to Exhibit 3 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(3.1) Amendments to the By-Laws of Hein-Werner Corporation.
(3.2) By-Laws of Hein-Werner Corporation, as amended.
(10.1) Amendment No. 1, dated April 27, 1998, to the Change of
Control Agreement, dated January 27, 1984, between Hein-
Werner Corporation and Joseph L. Dindorf (incorporated by
reference to Exhibit 8 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(10.2) Trust Agreement, dated as of April 29, 1998, by and
between Hein-Werner Corporation and Firstar Trust Company
(incorporated by reference to Exhibit 9 to Hein-Werner
Corporation's Schedule 14D-9 filed with the Securities
and Exchange Commission on May 4, 1998).
(10.3) Key Executive Employment and Severance Agreement, dated
as of April 15, 1998, by and between Hein-Werner
Corporation and Thomas F. Andreoli (incorporated by
reference to Exhibit 10 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(10.4) Key Executive Employment and Severance Agreement, dated
as of April 15, 1998, by and between Hein-Werner
Corporation and Jean-Paul Barthelme (incorporated by
reference to Exhibit 11 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(10.5) Key Executive Employment and Severance Agreement, dated
as of April 15, 1998, by and between Hein-Werner
Corporation and Mary L. Kielich (incorporated by
reference to Exhibit 12 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(10.6) Key Executive Employment and Severance Agreement, dated
as of April 15, 1998, by and between Hein-Werner
Corporation and Michael J. Koons (incorporated by
reference to Exhibit 13 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(10.7) Key Executive Employment and Severance Agreement, dated
as of April 15, 1998, by and between Hein-Werner
Corporation and Reinald D. Liegel (incorporated by
reference to Exhibit 14 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(10.8) Key Executive Employment and Severance Agreement, dated
as of April 15, 1998, by and between Hein-Werner
Corporation and Jeffrey V. Russell (incorporated by
reference to Exhibit 15 to Hein-Werner Corporation's
Schedule 14D-9 filed with the Securities and Exchange
Commission on May 4, 1998).
(10.9) Key Executive Employment and Severance Agreement, dated
as of April 15, 1998, by and between Hein-Werner
Corporation and James A. Wilke (incorporated by reference
to Exhibit 16 to Hein-Werner Corporation's Schedule 14D-9
filed with the Securities and Exchange Commission on May
4, 1998).
(10.10) First Amendment to Rights Agreement, dated April 27,
1998, by and between Hein-Werner Corporation and Firstar
Trust Company (incorporated by reference to Exhibit 18 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(11) Computation of Earnings Per Share
(27.1) Financial Data Schedule
(27.2) Restated Financial Data Schedule for the First Quarter
1997
(b) Form 8-K
There were no reports on Form 8-K filed for the three months
ended March 28, 1998.
<PAGE>
SIGNATURE
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.
HEIN-WERNER CORPORATION
("Registrant")
/s/Mary L. Kielich
Corporate Controller
Assistant Treasurer
(Principal Financial Officer)
May 12, 1997
Date
<PAGE>
Index of Exhibits
Exhibit No. Description
(2.1) Agreement and Plan of Merger, dated as of April 27, 1998, by
and among Snap-on Incorporated, Snap-on Pace Company and Hein-
Werner Corporation (incorporated by reference to Exhibit 1 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(2.2) Stock Option Agreement, dated as of April 27, 1998, by and
among Snap-on Incorporated, Snap-on Pace Company and Hein-
Werner Corporation (incorporated by reference to Exhibit 2 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(2.3) Employment and Consulting Agreement, dated April 27, 1998, by
and between Snap-on Incorporated, Hein-Werner Corporation and
Joseph L. Dindorf (incorporated by reference to Exhibit 3 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(3.1) Amendments to the By-Laws of Hein-Werner Corporation.
(3.2) By-Laws of Hein-Werner Corporation, as amended.
(10.1) Amendment No. 1, dated April 27, 1998, to the Change of
Control Agreement, dated January 27, 1984, between Hein-Werner
Corporation and Joseph L. Dindorf (incorporated by reference
to Exhibit 8 to Hein-Werner Corporation's Schedule 14D-9 filed
with the Securities and Exchange Commission on May 4, 1998).
(10.2) Trust Agreement, dated as of April 29, 1998, by and between
Hein-Werner Corporation and Firstar Trust Company
(incorporated by reference to Exhibit 9 to Hein-Werner
Corporation's Schedule 14D-9 filed with the Securities and
Exchange Commission on May 4, 1998).
(10.3) Key Executive Employment and Severance Agreement, dated as of
April 15, 1998, by and between Hein-Werner Corporation and
Thomas F. Andreoli (incorporated by reference to Exhibit 10 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(10.4) Key Executive Employment and Severance Agreement, dated as of
April 15, 1998, by and between Hein-Werner Corporation and
Jean-Paul Barthelme (incorporated by reference to Exhibit 11
to Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(10.5) Key Executive Employment and Severance Agreement, dated as of
April 15, 1998, by and between Hein-Werner Corporation and
Mary L. Kielich (incorporated by reference to Exhibit 12 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(10.6) Key Executive Employment and Severance Agreement, dated as of
April 15, 1998, by and between Hein-Werner Corporation and
Michael J. Koons (incorporated by reference to Exhibit 13 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(10.7) Key Executive Employment and Severance Agreement, dated as of
April 15, 1998, by and between Hein-Werner Corporation and
Reinald D. Liegel (incorporated by reference to Exhibit 14 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(10.8) Key Executive Employment and Severance Agreement, dated as of
April 15, 1998, by and between Hein-Werner Corporation and
Jeffrey V. Russell (incorporated by reference to Exhibit 15 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(10.9) Key Executive Employment and Severance Agreement, dated as of
April 15, 1998, by and between Hein-Werner Corporation and
James A. Wilke (incorporated by reference to Exhibit 16 to
Hein-Werner Corporation's Schedule 14D-9 filed with the
Securities and Exchange Commission on May 4, 1998).
(10.10) First Amendment to Rights Agreement, dated April 27, 1998, by
and between Hein-Werner Corporation and Firstar Trust Company
(incorporated by reference to Exhibit 18 to Hein-Werner
Corporation's Schedule 14D-9 filed with the Securities and
Exchange Commission on May 4, 1998).
(11) Computation of Earnings Per Share
(27.1) Financial Data Schedule
(27.2) Restated Financial Data Schedule for the First Quarter 1997
Exhibit 3.1
Amendments to the By-Laws of the Company
1. Pursuant to a resolution of the Board of Directors, the By-Laws of
the Company were amended by changing the first sentence of Section 3.05 to
read in its entirety as follows:
Notice of each meeting of the Board of Directors (unless otherwise
provided in or pursuant to Section 3.03) shall be given to each director
not less than 24 hours prior to the meeting by giving oral, telephone or
written notice to a director in person, or by telegram, or not less than
four days prior to a meeting by delivering or mailing written notice to
the business address or such other address as a director shall have
designated in writing filed with the Secretary.
2. Pursuant to a resolution of the Board of Directors, the By-Laws of
the Company were amended by changing Article II to read in its entirety as
follows:
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders (the
"Annual Meeting") shall be held on the second Thursday in April of each
year at 2:00 P.M., or at such other time and date as may be fixed by
resolution of the Board of Directors. In fixing a meeting date for any
Annual Meeting, the Board of Directors may consider such factors as it
deems relevant within the good faith exercise of its business judgment.
At each Annual Meeting, the shareholders shall elect that number of
directors equal to the number of directors in the class whose term expires
at the time of such meeting. At any such Annual Meeting, only other
business properly brought before the meeting in accordance with Section
2.14 of these By-laws may be transacted. If the election of directors
shall not be held on the date designated herein, or fixed as herein
provided, for any Annual Meeting, or any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of
shareholders (a "Special Meeting") as soon thereafter as is practicable.
2.02. Special Meetings.
(a) A Special Meeting may be called only by (i) the President, (ii)
the Secretary or (iii) the Board of Directors and shall be called by the
President upon the demand, in accordance with this Section 2.02, of the
holders of record of shares representing at least 10% of all the votes
entitled to be cast on any issue proposed to be considered at the Special
Meeting.
(b) In order that the corporation may determine the shareholders
entitled to demand a Special Meeting, the Board of Directors may fix a
record date to determine the shareholders entitled to make such a demand
(the "Demand Record Date"). The Demand Record Date shall not precede the
date upon which the resolution fixing the Demand Record Date is adopted by
the Board of Directors and shall not be more than ten days after the date
upon which the resolution fixing the Demand Record Date is adopted by the
Board of Directors. Any shareholder of record seeking to have shareholders
demand a Special Meeting shall, by sending written notice to the Secretary
of the corporation by hand or by certified or registered mail, return
receipt requested, request the Board of Directors to fix a Demand Record
Date. The Board of Directors shall promptly, but in all events within ten
days after the date on which a valid request to fix a Demand Record Date
is received, adopt a resolution fixing the Demand Record Date and shall
make a public announcement of such Demand Record Date. If no Demand
Record Date has been fixed by the Board of Directors within ten days after
the date on which such request is received by the Secretary, the Demand
Record Date shall be the 10th day after the first date on which a valid
written request to set a Demand Record Date is received by the Secretary.
To be valid, such written request shall set forth the purpose or purposes
for which the Special Meeting is to be held, shall be signed by one or
more shareholders of record (or their duly authorized proxies or other
representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative) and shall set forth all
information about each such shareholder and about the beneficial owner or
owners, if any, on whose behalf the request is made that would be required
to be set forth in a shareholder's notice described in paragraph (a) (ii)
of Section 2.14 of these By-laws.
(c) In order for a shareholder or shareholders to demand a Special
Meeting, a written demand or demands for a Special Meeting by the holders
of record as of the Demand Record Date of shares representing at least 10%
of all the votes entitled to be cast on any issue proposed to be
considered at the Special Meeting must be delivered to the corporation.
To be valid, each written demand by a shareholder for a Special Meeting
shall set forth the specific purpose or purposes for which the Special
Meeting is to be held (which purpose or purposes shall be limited to the
purpose or purposes set forth in the written request to set a Demand
Record Date received by the corporation pursuant to paragraph (b) of this
Section 2.02), shall be signed by one or more persons who as of the Demand
Record Date are shareholders of record (or their duly authorized proxies
or other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), and shall set forth the
name and address, as they appear in the corporation's books, of each
shareholder signing such demand and the class and number of shares of the
corporation which are owned of record and beneficially by each such
shareholder, shall be sent to the Secretary by hand or by certified or
registered mail, return receipt requested, and shall be received by the
Secretary within seventy days after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting
upon shareholder demand unless, in addition to the documents required by
paragraph (c) of this Section 2.02, the Secretary receives a written
agreement signed by each Soliciting Shareholder (as defined below),
pursuant to which each Soliciting Shareholder, jointly and severally,
agrees to pay the corporation's costs of holding the Special Meeting,
including the costs of preparing and mailing proxy materials for the
corporation's own solicitation, provided that if each of the resolutions
introduced by any Soliciting Shareholder at such meeting is adopted, and
each of the individuals nominated by or on behalf of any Soliciting
Shareholder for election as a director at such meeting is elected, then
the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the
meanings set forth below:
(i) "Affiliate" of any Person (as defined herein) shall mean
any Person controlling, controlled by or under common control with such
first Person.
(ii) "Participant" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term in
Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such term
in Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to
any Special Meeting demanded by a shareholder or shareholders, any of
the following Persons:
(A) if the number of shareholders signing the demand or
demands of meeting delivered to the corporation pursuant to
paragraph (c) of this Section 2.02 is ten or fewer, each
shareholder signing any such demand;
(B) if the number of shareholders signing the demand or
demands of meeting delivered to the corporation pursuant to
paragraph (c) of this Section 2.02 is more than ten, each Person
who either (I) was a Participant in any Solicitation of such
demand or demands or (II) at the time of the delivery to the
corporation of the documents described in paragraph (c) of this
Section 2.02 had engaged or intended to engage in any
Solicitation of Proxies for use at such Special Meeting (other
than a Solicitation of Proxies on behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if a
majority of the directors then in office determine, reasonably
and in good faith, that such Affiliate should be required to sign
the written notice described in paragraph (c) of this Section
2.02 and/or the written agreement described in this paragraph (d)
in order to prevent the purposes of this Section 2.02 from being
evaded.
(e) Except as provided in the following sentence, any Special
Meeting shall be held at such hour and day as may be designated by
whichever of the President, the Secretary or the Board of Directors shall
have called such meeting. In the case of any Special Meeting called by
the President upon the demand of shareholders (a "Demand Special
Meeting"), such meeting shall be held at such hour and day as may be
designated by the Board of Directors; provided, however, that the date of
any Demand Special Meeting shall be not more than seventy days after the
Meeting Record Date (as defined in Section 2.06 hereof); and provided
further that in the event that the directors then in office fail to
designate an hour and date for a Demand Special Meeting within ten days
after the date that valid written demands for such meeting by the holders
of record as of the Demand Record Date of shares representing at least 10%
of all the votes entitled to be cast on each issue proposed to be
considered at the Special Meeting are delivered to the corporation (the
"Delivery Date"), then such meeting shall be held at 2:00 P.M. local time
on the 100th day after the Delivery Date or, if such 100th day is not a
Business Day (as defined below), on the first preceding Business Day. In
fixing a meeting date for any Special Meeting, the President, the
Secretary or the Board of Directors may consider such factors as he or it
deems relevant within the good faith exercise of his or its business
judgment, including, without limitation, the nature of the action proposed
to be taken, the facts and circumstances surrounding any demand for such
meeting, and any plan of the Board of Directors to call an Annual Meeting
or a Special Meeting for the conduct of related business.
(f) The corporation may engage regionally or nationally recognized
independent inspectors of elections to act as an agent of the corporation
for the purpose of promptly performing a ministerial review of the
validity of any purported written demand or demands for a Special Meeting
received by the Secretary. For the purpose of permitting the inspectors
to perform such review, no purported demand shall be deemed to have been
delivered to the corporation until the earlier of (i) five Business Days
following receipt by the Secretary of such purported demand and (ii) such
date as the independent inspectors certify to the corporation that the
valid demands received by the Secretary represent at least 10% of all the
votes entitled to be cast on each issue proposed to be considered at the
Special Meeting. Nothing contained in this paragraph (f) shall in any way
be construed to suggest or imply that the Board of Directors or any
shareholder shall not be entitled to contest the validity of any demand,
whether during or after such five Business Day period, or to take any
other action (including, without limitation, the commencement, prosecution
or defense of any litigation with respect thereto).
(g) For purposes of these By-laws, "Business Day" shall mean any
day other than a Saturday, a Sunday or a day on which banking institutions
in the State of Wisconsin are authorized or obligated by law or executive
order to close.
2.03. Place of Meeting. The Board of Directors, the President or
the Secretary may designate any place, either within or without the State
of Wisconsin, as the place of meeting for an Annual Meeting or Special
Meeting. If no designation is made, the place of meeting shall be the
principal office of the corporation. Any meeting may be adjourned to
reconvene at any place designated by vote of the Board of Directors or by
the President or the Secretary.
2.04. Notice of Meeting. Written notice stating the date, time
and place of any meeting of shareholders shall be delivered not less than
ten days nor more than sixty days before the date of the meeting (unless a
different time period is provided by the Wisconsin Business Corporation
Law or the Restated Articles of Incorporation), either personally or by
mail, by or at the direction of the President or the Secretary, to each
shareholder of record entitled to vote at such meeting and to such other
persons as required by the Wisconsin Business Corporation Law. In the
event of any Demand Special Meeting, such notice of meeting shall be sent
not more than thirty days after the Delivery Date. If mailed, notice
pursuant to this Section 2.04 shall be deemed to be effective when
deposited in the United States mail, addressed to the shareholder at his
or her address as it appears on the stock record books of the corporation,
with postage thereon prepaid. Unless otherwise required by the Wisconsin
Business Corporation Law or the Restated Articles of Incorporation of the
corporation, a notice of an Annual Meeting need not include a description
of the purpose for which the meeting is called. In the case of any
Special Meeting, (a) the notice of meeting shall describe any business
that the Board of Directors shall have theretofore determined to bring
before the meeting and (b) in the case of a Demand Special Meeting, the
notice of meeting (i) shall describe any business set forth in the
statement of purpose of the demands received by the corporation in
accordance with Section 2.02 of these By-laws and (ii) shall contain all
of the information required in the notice received by the corporation in
accordance with Section 2.14(b) of these By-laws. If an Annual Meeting or
Special Meeting is adjourned to a different date, time or place, the
corporation shall not be required to give notice of the new date, time or
place if the new date, time or place is announced at the meeting before
adjournment; provided, however, that if a new Meeting Record Date for an
adjourned meeting is or must be fixed, the corporation shall give notice
of the adjourned meeting to persons who are shareholders as of the new
Meeting Record Date.
2.05. Waiver of Notice. A shareholder may waive any notice
required by the Wisconsin Business Corporation Law, the Restated Articles
of Incorporation or these By-laws 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, contain the same information that
would have been required in the notice under applicable provisions of the
Wisconsin Business Corporation Law (except that the time and place of
meeting need not be stated) and be delivered to the corporation for
inclusion in the corporate records. A shareholder's attendance at any
Annual Meeting or Special Meeting, in person or by proxy, waives objection
to all of the following: (a) lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting or
promptly upon arrival objects to holding the meeting or transacting
business at the meeting; and (b) consideration of a particular matter at
the meeting that is not within the purpose described in the meeting
notice, unless the shareholder objects to considering the matter when it
is presented.
2.06. Fixing of Record Date. The Board of Directors may fix in
advance a date not less than ten days and not more than seventy days prior
to the date of an Annual Meeting or Special Meeting as the record date for
the determination of shareholders entitled to notice of, or to vote at,
such meeting (the "Meeting Record Date"). In the case of any Demand
Special Meeting, (i) the Meeting Record Date shall be not later than the
30th day after the Delivery Date and (ii) if the Board of Directors fails
to fix the Meeting Record Date within thirty days after the Delivery Date,
then the close of business on such 30th day shall be the Meeting Record
Date. The shareholders of record on the Meeting Record Date shall be the
shareholders entitled to notice of and to vote at the meeting. Except as
provided by the Wisconsin Business Corporation Law for a court-ordered
adjournment, a determination of shareholders entitled to notice of and to
vote at an Annual Meeting or Special Meeting is effective for any
adjournment of such meeting unless the Board of Directors fixes a new
Meeting 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.
The Board of Directors may also fix in advance a date as the record date
for the purpose of determining shareholders entitled to take any other
action or determining shareholders for any other purpose. Such record
date shall be not more than seventy days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. The record date for determining shareholders entitled to a
distribution (other than a distribution involving a purchase, redemption
or other acquisition of the corporation's shares) or a share dividend is
the date on which the Board of Directors authorizes the distribution or
share dividend, as the case may be, unless the Board of Directors fixes a
different record date.
2.07. Shareholders' List for Meetings. After a Meeting Record
Date has been fixed, the corporation shall prepare a list of the names of
all of the shareholders entitled to notice of the meeting. The list shall
be arranged by class or series of shares, if any, and show the address of
and number of shares held by each shareholder. Such list shall be
available for inspection by any shareholder, beginning two business days
after 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 may, on
written demand, inspect and, subject to the limitations imposed by the
Wisconsin Business Corporation Law, copy the list, during regular business
hours and at his or her expense, during the period that it is available
for inspection pursuant to this Section 2.07. 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. Refusal or failure to prepare or make
available the shareholders' list shall not affect the validity of any
action taken at a meeting of shareholders.
2.08. Quorum and Voting Requirements; Postponements; Adjournments.
(a) Shares entitled to vote as a separate voting group may take
action on a matter at any Annual Meeting or Special Meeting only if a
quorum of those shares exists with respect to that matter. If the
corporation has only one class of stock outstanding, such class shall
constitute a separate voting group for purposes of this Section 2.08.
Except as otherwise provided in the Restated Articles of Incorporation or
the Wisconsin Business Corporation Law, a majority of the votes entitled
to be cast on the matter shall constitute a quorum of the voting group for
action on that matter. Once a share is represented for any purpose at any
Annual Meeting or Special 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 Meeting Record Date is or must be set for the adjourned
meeting. If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the
action, unless the Restated Articles of Incorporation or the Wisconsin
Business Corporation Law requires a greater number of affirmative votes.
Unless otherwise provided in the Restated Articles of Incorporation, each
director to be elected shall be elected by a plurality of the votes cast
by the shares entitled to vote in the election of directors at an Annual
Meeting or Special Meeting at which a quorum is present.
(b) The Board of Directors acting by resolution may postpone and
reschedule any previously scheduled Annual Meeting or Special Meeting;
provided, however, that a Demand Special Meeting shall not be postponed
beyond the 100th day following the Delivery Date. Any Annual Meeting or
Special Meeting may be adjourned from time to time, whether or not there
is a quorum, (i) at any time, upon a resolution by shareholders if the
votes cast in favor of such resolution by the holders of shares of each
voting group entitled to vote on any matter theretofore properly brought
before the meeting exceed the number of votes cast against such resolution
by the holders of shares of each such voting group or (ii) at any time
prior to the transaction of any business at such meeting, by the President
or pursuant to a resolution of the Board of Directors. No notice of the
time and place of adjourned meetings need be given except as required by
the Wisconsin Business Corporation Law. At any adjourned meeting at which
a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally notified.
2.09. Conduct of Meeting. The President, and in his or her
absence, a Vice President in the order provided under Section 4.06 of
these By-laws, and in their absence, any person chosen by the shareholders
present shall call any Annual Meeting or Special Meeting to order and
shall act as chairperson of the meeting, and the Secretary of the
corporation shall act as secretary of all meetings of the shareholders,
but, in the absence of the Secretary, the presiding officer may appoint
any other person to act as secretary of the meeting.
2.10. Proxies. At any Annual Meeting or Special Meeting, 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
received by 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 signing unless a different period is expressly
provided in the appointment form. Unless otherwise provided, a proxy may
be revoked at any time before it is voted, either by written notice filed
with the Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during the
meeting. The presence of a shareholder who has filed his or her
appointment of proxy shall not itself constitute a revocation. The Board
of Directors shall have the power and authority to make rules establishing
presumptions as to the validity and sufficiently of proxies.
2.11. Voting of Shares.
(a) Each outstanding share shall be entitled to one vote upon each
matter submitted to a vote at an Annual Meeting or Special Meeting, except
to the extent that the voting rights of the shares of any class or classes
are enlarged, limited or denied by the Wisconsin Business Corporation Law
or the Restated Articles of Incorporation of the corporation.
(b) Shares held by another corporation, if a sufficient number of
shares entitled to elect a majority of the directors of such other
corporation is held directly or indirectly by this corporation, shall not
be entitled to vote at an Annual Meeting or Special Meeting, but shares
held in a fiduciary capacity may be voted.
2.12. Action without Meeting. Any action required or permitted by
the Restated Articles of Incorporation or these By-laws or any provision
of the Wisconsin Business Corporation Law to be taken at an Annual Meeting
or Special Meeting may be taken without a meeting if a written consent or
consents, describing the action so taken, is signed by all of the
shareholders entitled to vote with respect to the subject matter thereof
and delivered to the corporation for inclusion in the corporate records.
2.13. Acceptance of Instruments Showing Shareholder Action. If
the name signed on a vote, consent, waiver or proxy appointment
corresponds to the name of a shareholder, the corporation, if acting in
good faith, 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, the corporation, if acting in good faith, 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.
2.14. Notice of Shareholder Business and Nomination of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be
considered by the shareholders may be made at an Annual Meeting (A)
pursuant to the corporation's notice of meeting, (B) by or at the
direction of the Board of Directors or (C) by any shareholder of the
corporation who is a shareholder of record at the time of giving of
notice provided for in this By-law and who is entitled to vote at the
meeting and complies with the notice procedures set forth in this
Section 2.14.
(ii) For nominations or other business to be properly
brought before an Annual Meeting by a shareholder pursuant to clause (C)
of paragraph (a)(i) of this Section 2.14, the shareholder must have
given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a shareholder's notice shall be received by
the Secretary of the corporation at the principal offices of the
corporation not less than sixty days nor more than ninety days prior to
the second Thursday in the month of April; provided, however, that in
the event that the date of the Annual Meeting is advanced by more than
thirty days or delayed by more than sixty days from the second Thursday
in the month of April, notice by the shareholder to be timely must be so
received not earlier than the 90th day prior to the date of such Annual
Meeting and not later than the close of business on the later of (x) the
60th day prior to such Annual Meeting and (y) the 10th day following the
day on which public announcement of the date of such meeting is first
made. Such shareholder's notice shall be signed by the shareholder of
record who intends to make the nomination or introduce the other
business (or his duly authorized proxy or other representative), shall
bear the date of signature of such shareholder (or proxy or other
representative) and shall set forth: (A) the name and address, as they
appear on this corporation's books, of such shareholder and the
beneficial owner or owners, if any, on whose behalf the nomination or
proposal is made; (B) the class and number of shares of the corporation
which are beneficially owned by such shareholder or beneficial owner or
owners; (C) a representation that such shareholder is a holder of record
of shares of the corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to make the
nomination or introduce the other business specified in the notice; (D)
in the case of any proposed nomination for election or re-election as a
director, (I) the name and residence address of the person or persons to
be nominated, (II) a description of all arrangements or understandings
between such shareholder or beneficial owner or owners and each nominee
and any other person or persons (naming such person or persons) pursuant
to which the nomination is to be made by such shareholder, (III) such
other information regarding each nominee proposed by such shareholder as
would be required to be disclosed in solicitations of proxies for
elections of directors, or would be otherwise required to be disclosed,
in each case pursuant to Regulation 14A under the Exchange Act,
including any information that would be required to be included in a
proxy statement filed pursuant to Regulation 14A had the nominee been
nominated by the Board of Directors and (IV) the written consent of each
nominee to be named in a proxy statement and to serve as a director of
the corporation if so elected; and (E) in the case of any other business
that such shareholder proposes to bring before the meeting, (I) a brief
description of the business desired to be brought before the meeting
and, if such business includes a proposal to amend these By-laws, the
language of the proposed amendment, (II) such shareholder's and
beneficial owner's or owners' reasons for conducting such business at
the meeting and (III) any material interest in such business of such
shareholder and beneficial owner or owners.
(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 2.14 to the contrary, in the event
that the number of directors to be elected to the Board of Directors of
the corporation is increased and there is no public announcement naming
all of the nominees for director or specifying the size of the increased
Board of Directors made by the corporation at least seventy days prior
to the second Wednesday in the month of April, a shareholder's notice
required by this Section 2.14 shall also be considered timely, but only
with respect to nominees for any new positions created by such increase,
if it shall be received by the Secretary at the principal offices of the
corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
corporation.
(b) Special Meetings. Only such business shall be conducted at a
Special Meeting as shall have been described in the notice of meeting sent
to shareholders pursuant to Section 2.04 of these By-laws. Nominations of
persons for election to the Board of Directors may be made at a Special
Meeting at which directors are to be elected pursuant to such notice of
meeting (i) by or at the direction of the Board of Directors or (ii) by
any shareholder of the corporation who (A) is a shareholder of record at
the time of giving of such notice of meeting, (B) is entitled to vote at
the meeting and (C) complies with the notice procedures set forth in this
Section 2.14. Any shareholder desiring to nominate persons for election
to the Board of Directors at such a Special Meeting shall cause a written
notice to be received by the Secretary of the corporation at the principal
offices of the corporation not earlier than ninety days prior to such
Special Meeting and not later than the close of business on the later of
(x) the 60th day prior to such Special Meeting and (y) the 10th day
following the day on which public announcement is first made of the date
of such Special Meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. Such written notice shall be
signed by the shareholder of record who intends to make the nomination (or
his duly authorized proxy or other representative), shall bear the date of
signature of such shareholder (or proxy or other representative) and shall
set forth: (A) the name and address, as they appear on the corporation's
books, of such shareholder and the beneficial owner or owners, if any, on
whose behalf the nomination is made; (B) the class and number of shares of
the corporation which are beneficially owned by such shareholder or
beneficial owner or owners; (C) a representation that such shareholder is
a holder of record of shares of the corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to make
the nomination specified in the notice; (D) the name and residence address
of the person or persons to be nominated; (E) a description of all
arrangements or understandings between such shareholder or beneficial
owner or owners and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination is to be made by
such shareholder; (F) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be otherwise
required to be disclosed, in each case pursuant to Regulation 14A under
the Exchange Act, including any information that would be required to be
included in a proxy statement filed pursuant to Regulation 14A had the
nominee been nominated by the Board of Directors; and (G) the written
consent of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected.
(c) General.
(i) Only persons who are nominated in accordance with the
procedures set forth in this Section 2.14 shall be eligible to serve as
directors. Only such business shall be conducted at an Annual Meeting
or Special Meeting as shall have been brought before such meeting in
accordance with the procedures set forth in this Section 2.14. The
chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in this
Section 2.14 and, if any proposed nomination or business is not in
compliance with this Section 2.14, to declare that such defective
proposal shall be disregarded.
(ii) For purposes of this Section 2.14, "public
announcement" shall mean disclosure in a press release reported by the
Dow Jones News Service, Associated Press or comparable national news
service or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d)
of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this
Section 2.14, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section 2.14.
Nothing in this Section 2.14 shall be deemed to limit the corporation's
obligation to include shareholder proposals in its proxy statement if
such inclusion is required by Rule 14a-8 under the Exchange Act.
Exhibit 3.2
BY-LAWS
OF
HEIN-WERNER CORPORATION
(a Wisconsin corporation)
As amended through April 15, 1998
<PAGE>
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The principal office of the
corporation shall be located in Waukesha, Wisconsin. The corporation may
have such other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of
the corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation
required by the Wisconsin Business Corporation Law to be maintained in the
State of Wisconsin may be, but need not be, identical with the principal
office in the State of Wisconsin, and the address of the registered office
may be changed from time to time by the Board of Directors or by the
registered agent. The business office of the registered agent of the
corporation shall be identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders (the
"Annual Meeting") shall be held on the second Thursday in April of each
year at 2:00 P.M., or at such other time and date as may be fixed by
resolution of the Board of Directors. In fixing a meeting date for any
Annual Meeting, the Board of Directors may consider such factors as it
deems relevant within the good faith exercise of its business judgment.
At each Annual Meeting, the shareholders shall elect that number of
directors equal to the number of directors in the class whose term expires
at the time of such meeting. At any such Annual Meeting, only other
business properly brought before the meeting in accordance with Section
2.14 of these By-laws may be transacted. If the election of directors
shall not be held on the date designated herein, or fixed as herein
provided, for any Annual Meeting, or any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of
shareholders (a "Special Meeting") as soon thereafter as is practicable.
2.02. Special Meetings.
(a) A Special Meeting may be called only by (i) the President, (ii) the
Secretary or (iii) the Board of Directors and shall be called by the
President upon the demand, in accordance with this Section 2.02, of the
holders of record of shares representing at least 10% of all the votes
entitled to be cast on any issue proposed to be considered at the Special
Meeting.
(b) In order that the corporation may determine the shareholders
entitled to demand a Special Meeting, the Board of Directors may fix a
record date to determine the shareholders entitled to make such a demand
(the "Demand Record Date"). The Demand Record Date shall not precede the
date upon which the resolution fixing the Demand Record Date is adopted by
the Board of Directors and shall not be more than ten days after the date
upon which the resolution fixing the Demand Record Date is adopted by the
Board of Directors. Any shareholder of record seeking to have shareholders
demand a Special Meeting shall, by sending written notice to the Secretary
of the corporation by hand or by certified or registered mail, return
receipt requested, request the Board of Directors to fix a Demand Record
Date. The Board of Directors shall promptly, but in all events within ten
days after the date on which a valid request to fix a Demand Record Date
is received, adopt a resolution fixing the Demand Record Date and shall
make a public announcement of such Demand Record Date. If no Demand
Record Date has been fixed by the Board of Directors within ten days after
the date on which such request is received by the Secretary, the Demand
Record Date shall be the 10th day after the first date on which a valid
written request to set a Demand Record Date is received by the Secretary.
To be valid, such written request shall set forth the purpose or purposes
for which the Special Meeting is to be held, shall be signed by one or
more shareholders of record (or their duly authorized proxies or other
representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative) and shall set forth all
information about each such shareholder and about the beneficial owner or
owners, if any, on whose behalf the request is made that would be required
to be set forth in a shareholder's notice described in paragraph (a) (ii)
of Section 2.14 of these By-laws.
(c) In order for a shareholder or shareholders to demand a Special
Meeting, a written demand or demands for a Special Meeting by the holders
of record as of the Demand Record Date of shares representing at least 10%
of all the votes entitled to be cast on any issue proposed to be
considered at the Special Meeting must be delivered to the corporation.
To be valid, each written demand by a shareholder for a Special Meeting
shall set forth the specific purpose or purposes for which the Special
Meeting is to be held (which purpose or purposes shall be limited to the
purpose or purposes set forth in the written request to set a Demand
Record Date received by the corporation pursuant to paragraph (b) of this
Section 2.02), shall be signed by one or more persons who as of the Demand
Record Date are shareholders of record (or their duly authorized proxies
or other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), and shall set forth the
name and address, as they appear in the corporation's books, of each
shareholder signing such demand and the class and number of shares of the
corporation which are owned of record and beneficially by each such
shareholder, shall be sent to the Secretary by hand or by certified or
registered mail, return receipt requested, and shall be received by the
Secretary within seventy days after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting
upon shareholder demand unless, in addition to the documents required by
paragraph (c) of this Section 2.02, the Secretary receives a written
agreement signed by each Soliciting Shareholder (as defined below),
pursuant to which each Soliciting Shareholder, jointly and severally,
agrees to pay the corporation's costs of holding the Special Meeting,
including the costs of preparing and mailing proxy materials for the
corporation's own solicitation, provided that if each of the resolutions
introduced by any Soliciting Shareholder at such meeting is adopted, and
each of the individuals nominated by or on behalf of any Soliciting
Shareholder for election as a director at such meeting is elected, then
the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the
meanings set forth below:
(i) "Affiliate" of any Person (as defined herein) shall mean any
Person controlling, controlled by or under common control with such
first Person.
(ii) "Participant" shall have the meaning assigned to such term
in Rule 14a-11 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term in
Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such term in
Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to any
Special Meeting demanded by a shareholder or shareholders, any of the
following Persons:
(A) if the number of shareholders signing the demand or
demands of meeting delivered to the corporation pursuant to
paragraph (c) of this Section 2.02 is ten or fewer, each
shareholder signing any such demand;
(B) if the number of shareholders signing the demand or
demands of meeting delivered to the corporation pursuant to
paragraph (c) of this Section 2.02 is more than ten, each Person
who either (I) was a Participant in any Solicitation of such
demand or demands or (II) at the time of the delivery to the
corporation of the documents described in paragraph (c) of this
Section 2.02 had engaged or intended to engage in any
Solicitation of Proxies for use at such Special Meeting (other
than a Solicitation of Proxies on behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if a majority
of the directors then in office determine, reasonably and in good
faith, that such Affiliate should be required to sign the written
notice described in paragraph (c) of this Section 2.02 and/or the
written agreement described in this paragraph (d) in order to
prevent the purposes of this Section 2.02 from being evaded.
(e) Except as provided in the following sentence, any Special Meeting
shall be held at such hour and day as may be designated by whichever of
the President, the Secretary or the Board of Directors shall have called
such meeting. In the case of any Special Meeting called by the President
upon the demand of shareholders (a "Demand Special Meeting"), such meeting
shall be held at such hour and day as may be designated by the Board of
Directors; provided, however, that the date of any Demand Special Meeting
shall be not more than seventy days after the Meeting Record Date (as
defined in Section 2.06 hereof); and provided further that in the event
that the directors then in office fail to designate an hour and date for a
Demand Special Meeting within ten days after the date that valid written
demands for such meeting by the holders of record as of the Demand Record
Date of shares representing at least 10% of all the votes entitled to be
cast on each issue proposed to be considered at the Special Meeting are
delivered to the corporation (the "Delivery Date"), then such meeting
shall be held at 2:00 P.M. local time on the 100th day after the Delivery
Date or, if such 100th day is not a Business Day (as defined below), on
the first preceding Business Day. In fixing a meeting date for any
Special Meeting, the President, the Secretary or the Board of Directors
may consider such factors as he or it deems relevant within the good faith
exercise of his or its business judgment, including, without limitation,
the nature of the action proposed to be taken, the facts and circumstances
surrounding any demand for such meeting, and any plan of the Board of
Directors to call an Annual Meeting or a Special Meeting for the conduct
of related business.
(f) The corporation may engage regionally or nationally recognized
independent inspectors of elections to act as an agent of the corporation
for the purpose of promptly performing a ministerial review of the
validity of any purported written demand or demands for a Special Meeting
received by the Secretary. For the purpose of permitting the inspectors
to perform such review, no purported demand shall be deemed to have been
delivered to the corporation until the earlier of (i) five Business Days
following receipt by the Secretary of such purported demand and (ii) such
date as the independent inspectors certify to the corporation that the
valid demands received by the Secretary represent at least 10% of all the
votes entitled to be cast on each issue proposed to be considered at the
Special Meeting. Nothing contained in this paragraph (f) shall in any way
be construed to suggest or imply that the Board of Directors or any
shareholder shall not be entitled to contest the validity of any demand,
whether during or after such five Business Day period, or to take any
other action (including, without limitation, the commencement, prosecution
or defense of any litigation with respect thereto).
(g) For purposes of these By-laws, "Business Day" shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in
the State of Wisconsin are authorized or obligated by law or executive
order to close.
2.03. Place of Meeting. The Board of Directors, the President or the
Secretary may designate any place, either within or without the State of
Wisconsin, as the place of meeting for an Annual Meeting or Special
Meeting. If no designation is made, the place of meeting shall be the
principal office of the corporation. Any meeting may be adjourned to
reconvene at any place designated by vote of the Board of Directors or by
the President or the Secretary.
2.04. Notice of Meeting. Written notice stating the date, time and
place of any meeting of shareholders shall be delivered not less than ten
days nor more than sixty days before the date of the meeting (unless a
different time period is provided by the Wisconsin Business Corporation
Law or the Restated Articles of Incorporation), either personally or by
mail, by or at the direction of the President or the Secretary, to each
shareholder of record entitled to vote at such meeting and to such other
persons as required by the Wisconsin Business Corporation Law. In the
event of any Demand Special Meeting, such notice of meeting shall be sent
not more than thirty days after the Delivery Date. If mailed, notice
pursuant to this Section 2.04 shall be deemed to be effective when
deposited in the United States mail, addressed to the shareholder at his
or her address as it appears on the stock record books of the corporation,
with postage thereon prepaid. Unless otherwise required by the Wisconsin
Business Corporation Law or the Restated Articles of Incorporation of the
corporation, a notice of an Annual Meeting need not include a description
of the purpose for which the meeting is called. In the case of any
Special Meeting, (a) the notice of meeting shall describe any business
that the Board of Directors shall have theretofore determined to bring
before the meeting and (b) in the case of a Demand Special Meeting, the
notice of meeting (i) shall describe any business set forth in the
statement of purpose of the demands received by the corporation in
accordance with Section 2.02 of these By-laws and (ii) shall contain all
of the information required in the notice received by the corporation in
accordance with Section 2.14(b) of these By-laws. If an Annual Meeting or
Special Meeting is adjourned to a different date, time or place, the
corporation shall not be required to give notice of the new date, time or
place if the new date, time or place is announced at the meeting before
adjournment; provided, however, that if a new Meeting Record Date for an
adjourned meeting is or must be fixed, the corporation shall give notice
of the adjourned meeting to persons who are shareholders as of the new
Meeting Record Date.
2.05. Waiver of Notice. A shareholder may waive any notice required
by the Wisconsin Business Corporation Law, the Restated Articles of
Incorporation or these By-laws 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, contain the same information that would have been
required in the notice under applicable provisions of the Wisconsin
Business Corporation Law (except that the time and place of meeting need
not be stated) and be delivered to the corporation for inclusion in the
corporate records. A shareholder's attendance at any Annual Meeting or
Special Meeting, in person or by proxy, waives objection to all of the
following: (a) lack of notice or defective notice of the meeting, unless
the shareholder at the beginning of the meeting or promptly upon arrival
objects to holding the meeting or transacting business at the meeting; and
(b) consideration of a particular matter at the meeting that is not within
the purpose described in the meeting notice, unless the shareholder
objects to considering the matter when it is presented.
2.06. Fixing of Record Date. The Board of Directors may fix in
advance a date not less than ten days and not more than seventy days prior
to the date of an Annual Meeting or Special Meeting as the record date for
the determination of shareholders entitled to notice of, or to vote at,
such meeting (the "Meeting Record Date"). In the case of any Demand
Special Meeting, (i) the Meeting Record Date shall be not later than the
30th day after the Delivery Date and (ii) if the Board of Directors fails
to fix the Meeting Record Date within thirty days after the Delivery Date,
then the close of business on such 30th day shall be the Meeting Record
Date. The shareholders of record on the Meeting Record Date shall be the
shareholders entitled to notice of and to vote at the meeting. Except as
provided by the Wisconsin Business Corporation Law for a court-ordered
adjournment, a determination of shareholders entitled to notice of and to
vote at an Annual Meeting or Special Meeting is effective for any
adjournment of such meeting unless the Board of Directors fixes a new
Meeting 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.
The Board of Directors may also fix in advance a date as the record date
for the purpose of determining shareholders entitled to take any other
action or determining shareholders for any other purpose. Such record
date shall be not more than seventy days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. The record date for determining shareholders entitled to a
distribution (other than a distribution involving a purchase, redemption
or other acquisition of the corporation's shares) or a share dividend is
the date on which the Board of Directors authorizes the distribution or
share dividend, as the case may be, unless the Board of Directors fixes a
different record date.
2.07. Shareholders' List for Meetings. After a Meeting Record Date
has been fixed, the corporation shall prepare a list of the names of all
of the shareholders entitled to notice of the meeting. The list shall be
arranged by class or series of shares, if any, and show the address of and
number of shares held by each shareholder. Such list shall be available
for inspection by any shareholder, beginning two business days after
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 may, on
written demand, inspect and, subject to the limitations imposed by the
Wisconsin Business Corporation Law, copy the list, during regular business
hours and at his or her expense, during the period that it is available
for inspection pursuant to this Section 2.07. 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. Refusal or failure to prepare or make
available the shareholders' list shall not affect the validity of any
action taken at a meeting of shareholders.
2.08. Quorum and Voting Requirements; Postponements; Adjournments.
(a) Shares entitled to vote as a separate voting group may take action
on a matter at any Annual Meeting or Special Meeting only if a quorum of
those shares exists with respect to that matter. If the corporation has
only one class of stock outstanding, such class shall constitute a
separate voting group for purposes of this Section 2.08. Except as
otherwise provided in the Restated Articles of Incorporation or the
Wisconsin Business Corporation Law, a majority of the votes entitled to be
cast on the matter shall constitute a quorum of the voting group for
action on that matter. Once a share is represented for any purpose at any
Annual Meeting or Special 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 Meeting Record Date is or must be set for the adjourned
meeting. If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the
action, unless the Restated Articles of Incorporation or the Wisconsin
Business Corporation Law requires a greater number of affirmative votes.
Unless otherwise provided in the Restated Articles of Incorporation, each
director to be elected shall be elected by a plurality of the votes cast
by the shares entitled to vote in the election of directors at an Annual
Meeting or Special Meeting at which a quorum is present.
(b) The Board of Directors acting by resolution may postpone and
reschedule any previously scheduled Annual Meeting or Special Meeting;
provided, however, that a Demand Special Meeting shall not be postponed
beyond the 100th day following the Delivery Date. Any Annual Meeting or
Special Meeting may be adjourned from time to time, whether or not there
is a quorum, (i) at any time, upon a resolution by shareholders if the
votes cast in favor of such resolution by the holders of shares of each
voting group entitled to vote on any matter theretofore properly brought
before the meeting exceed the number of votes cast against such resolution
by the holders of shares of each such voting group or (ii) at any time
prior to the transaction of any business at such meeting, by the President
or pursuant to a resolution of the Board of Directors. No notice of the
time and place of adjourned meetings need be given except as required by
the Wisconsin Business Corporation Law. At any adjourned meeting at which
a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally notified.
2.09. Conduct of Meeting. The President, and in his or her absence,
a Vice President in the order provided under Section 4.06 of these By-
laws, and in their absence, any person chosen by the shareholders present
shall call any Annual Meeting or Special Meeting to order and shall act as
chairperson of the meeting, and the Secretary of the corporation shall act
as secretary of all meetings of the shareholders, but, in the absence of
the Secretary, the presiding officer may appoint any other person to act
as secretary of the meeting.
2.10. Proxies. At any Annual Meeting or Special Meeting, 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
received by 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 signing unless a different period is expressly
provided in the appointment form. Unless otherwise provided, a proxy may
be revoked at any time before it is voted, either by written notice filed
with the Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during the
meeting. The presence of a shareholder who has filed his or her
appointment of proxy shall not itself constitute a revocation. The Board
of Directors shall have the power and authority to make rules establishing
presumptions as to the validity and sufficiently of proxies.
2.11. Voting of Shares.
(a) Each outstanding share shall be entitled to one vote upon each
matter submitted to a vote at an Annual Meeting or Special Meeting, except
to the extent that the voting rights of the shares of any class or classes
are enlarged, limited or denied by the Wisconsin Business Corporation Law
or the Restated Articles of Incorporation of the corporation.
(b) Shares held by another corporation, if a sufficient number of
shares entitled to elect a majority of the directors of such other
corporation is held directly or indirectly by this corporation, shall not
be entitled to vote at an Annual Meeting or Special Meeting, but shares
held in a fiduciary capacity may be voted.
2.12. Action without Meeting. Any action required or permitted by
the Restated Articles of Incorporation or these By-laws or any provision
of the Wisconsin Business Corporation Law to be taken at an Annual Meeting
or Special Meeting may be taken without a meeting if a written consent or
consents, describing the action so taken, is signed by all of the
shareholders entitled to vote with respect to the subject matter thereof
and delivered to the corporation for inclusion in the corporate records.
2.13. Acceptance of Instruments Showing Shareholder Action. If the
name signed on a vote, consent, waiver or proxy appointment corresponds to
the name of a shareholder, the corporation, if acting in good faith, 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, the corporation, if acting in good faith, 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.
2.14. Notice of Shareholder Business and Nomination of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of Directors
of the corporation and the proposal of business to be considered by the
shareholders may be made at an Annual Meeting (A) pursuant to the
corporation's notice of meeting, (B) by or at the direction of the Board
of Directors or (C) by any shareholder of the corporation who is a
shareholder of record at the time of giving of notice provided for in
this By-law and who is entitled to vote at the meeting and complies with
the notice procedures set forth in this Section 2.14.
(ii) For nominations or other business to be properly brought
before an Annual Meeting by a shareholder pursuant to clause (C) of
paragraph (a)(i) of this Section 2.14, the shareholder must have given
timely notice thereof in writing to the Secretary of the corporation.
To be timely, a shareholder's notice shall be received by the Secretary
of the corporation at the principal offices of the corporation not less
than sixty days nor more than ninety days prior to the second Thursday
in the month of April; provided, however, that in the event that the
date of the Annual Meeting is advanced by more than thirty days or
delayed by more than sixty days from the second Thursday in the month of
April, notice by the shareholder to be timely must be so received not
earlier than the 90th day prior to the date of such Annual Meeting and
not later than the close of business on the later of (x) the 60th day
prior to such Annual Meeting and (y) the 10th day following the day on
which public announcement of the date of such meeting is first made.
Such shareholder's notice shall be signed by the shareholder of record
who intends to make the nomination or introduce the other business (or
his duly authorized proxy or other representative), shall bear the date
of signature of such shareholder (or proxy or other representative) and
shall set forth: (A) the name and address, as they appear on this
corporation's books, of such shareholder and the beneficial owner or
owners, if any, on whose behalf the nomination or proposal is made; (B)
the class and number of shares of the corporation which are beneficially
owned by such shareholder or beneficial owner or owners; (C) a
representation that such shareholder is a holder of record of shares of
the corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to make the nomination or introduce
the other business specified in the notice; (D) in the case of any
proposed nomination for election or re-election as a director, (I) the
name and residence address of the person or persons to be nominated,
(II) a description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination is to be made by such shareholder, (III) such other
information regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for elections of
directors, or would be otherwise required to be disclosed, in each case
pursuant to Regulation 14A under the Exchange Act, including any
information that would be required to be included in a proxy statement
filed pursuant to Regulation 14A had the nominee been nominated by the
Board of Directors and (IV) the written consent of each nominee to be
named in a proxy statement and to serve as a director of the corporation
if so elected; and (E) in the case of any other business that such
shareholder proposes to bring before the meeting, (I) a brief
description of the business desired to be brought before the meeting
and, if such business includes a proposal to amend these By-laws, the
language of the proposed amendment, (II) such shareholder's and
beneficial owner's or owners' reasons for conducting such business at
the meeting and (III) any material interest in such business of such
shareholder and beneficial owner or owners.
(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 2.14 to the contrary, in the event
that the number of directors to be elected to the Board of Directors of
the corporation is increased and there is no public announcement naming
all of the nominees for director or specifying the size of the increased
Board of Directors made by the corporation at least seventy days prior
to the second Wednesday in the month of April, a shareholder's notice
required by this Section 2.14 shall also be considered timely, but only
with respect to nominees for any new positions created by such increase,
if it shall be received by the Secretary at the principal offices of the
corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
corporation.
(b) Special Meetings. Only such business shall be conducted at a
Special Meeting as shall have been described in the notice of meeting sent
to shareholders pursuant to Section 2.04 of these By-laws. Nominations of
persons for election to the Board of Directors may be made at a Special
Meeting at which directors are to be elected pursuant to such notice of
meeting (i) by or at the direction of the Board of Directors or (ii) by
any shareholder of the corporation who (A) is a shareholder of record at
the time of giving of such notice of meeting, (B) is entitled to vote at
the meeting and (C) complies with the notice procedures set forth in this
Section 2.14. Any shareholder desiring to nominate persons for election
to the Board of Directors at such a Special Meeting shall cause a written
notice to be received by the Secretary of the corporation at the principal
offices of the corporation not earlier than ninety days prior to such
Special Meeting and not later than the close of business on the later of
(x) the 60th day prior to such Special Meeting and (y) the 10th day
following the day on which public announcement is first made of the date
of such Special Meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. Such written notice shall be
signed by the shareholder of record who intends to make the nomination (or
his duly authorized proxy or other representative), shall bear the date of
signature of such shareholder (or proxy or other representative) and shall
set forth: (A) the name and address, as they appear on the corporation's
books, of such shareholder and the beneficial owner or owners, if any, on
whose behalf the nomination is made; (B) the class and number of shares of
the corporation which are beneficially owned by such shareholder or
beneficial owner or owners; (C) a representation that such shareholder is
a holder of record of shares of the corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to make
the nomination specified in the notice; (D) the name and residence address
of the person or persons to be nominated; (E) a description of all
arrangements or understandings between such shareholder or beneficial
owner or owners and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination is to be made by
such shareholder; (F) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be otherwise
required to be disclosed, in each case pursuant to Regulation 14A under
the Exchange Act, including any information that would be required to be
included in a proxy statement filed pursuant to Regulation 14A had the
nominee been nominated by the Board of Directors; and (G) the written
consent of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected.
(c) General.
(i) Only persons who are nominated in accordance with the
procedures set forth in this Section 2.14 shall be eligible to serve as
directors. Only such business shall be conducted at an Annual Meeting
or Special Meeting as shall have been brought before such meeting in
accordance with the procedures set forth in this Section 2.14. The
chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in this
Section 2.14 and, if any proposed nomination or business is not in
compliance with this Section 2.14, to declare that such defective
proposal shall be disregarded.
(ii) For purposes of this Section 2.14, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a
document publicly filed by the corporation with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(iii) Notwithstanding the foregoing provisions of this Section
2.14, a shareholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 2.14. Nothing in this
Section 2.14 shall be deemed to limit the corporation's obligation to
include shareholder proposals in its proxy statement if such inclusion
is required by Rule 14a-8 under the Exchange Act.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers, Classification and Number. The business and
affairs of the corporation shall be managed by its Board of Directors.
The number of directors of the corporation shall be six.
At the 1978 annual meeting of shareholders, the directors of the first
class shall be elected for a term to expire at the first annual meeting of
shareholders after their election, the directors of the second class shall
be elected for a term to expire at the second annual meeting of
shareholders after their election, and the directors of the third class
shall be elected for a term to expire at the third annual meeting of
shareholders after their election. At each annual meeting of shareholders
the successors to the class of directors whose terms shall expire at the
time of such annual meeting shall be elected to hold office until the
third succeeding annual meeting of shareholders.
Each director shall hold office for the term for which he is elected and
until his successor is elected and qualified or until his prior death,
resignation or removal. A director may resign at any time by filing his
written resignation with the Secretary of the corporation.
3.02. Tenure and Qualifications. Directors shall be shareholders of
the corporation. No director will stand for re-election as a director who
has attained age 72 on or before the annual meeting of shareholders. A
director who is an officer of the corporation and who shall retire or
otherwise terminate employment as such officer shall automatically be
retired as a director of the corporation and thereafter shall not be
eligible for reelection as a director, unless his continued service as a
director is approved by the number of directors specified in Article IX of
the Restated Articles of Incorporation.
3.03. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this By-Law immediately after the
annual meeting of share-holders, and each adjourned session thereof. The
place of such regular meeting shall be the same as the place of the
meeting of shareholders which precedes it, or such other suitable place as
may be announced at such meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without
the State of Wisconsin, for the holding of additional regular meetings
without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President, Secretary or any two
directors. The person or persons calling any special meeting of the Board
of Directors may fix any place, either within or without the State of
Wisconsin, as the place for holding any special meeting of the Board of
Directors called by them, and if no other place is fixed the place of
meeting shall be the principal business office of the corporation in the
State of Wisconsin.
3.05. Notice: Waiver. Notice of each meeting of the Board of
Directors (unless otherwise provided in or pursuant to Section 3.03) shall
be given to each director not less than 24 hours prior to the meeting by
giving oral, telephone or written notice to a director in person, or by
telegram, or not less than four days prior to a meeting by delivering or
mailing written notice to the business address or such other address as a
director shall have designated in writing filed with the Secretary. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Whenever any notice
whatever is required to be given to any director of the corporation under
the Restated Articles of Incorporation or By-laws or any provision of law,
a waiver thereof in writing, signed at any time, whether before or after
the time of meeting, by the director entitled to such notice, shall be
deemed equivalent to the giving of such notice. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting and objects thereat to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the Board of Directors need be specified
in the notice of waiver of notice of such meeting.
3.06. Quorum. Except as otherwise provided by law or by the Restated
Articles of Incorporation or these By-laws, a majority of the number of
directors as provided in Section 3.01 shall constitute a quorum for the
transaction of business at any Meeting of the Board of Directors, but a
majority of the directors present (though less than such quorum) may
adjourn the meeting from time to time without further notice.
3.07. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors, unless the act of a greater number is required by law
or by the Restated Articles of Incorporation or these By-laws.
3.08. Conduct of Meetings. The President, and in his absence, a
Vice-President in the order provided under Section 4.06, and in their
absence, any director chosen by the directors present, shall call meetings
of the Board of Directors to order and shall act as chairman of the
meeting. The Secretary of the Board of Directors, but in the absence of
the Secretary, the presiding officer may appoint any Assistant Secretary
or any director or other person present to act as secretary of the
meeting.
3.09. Vacancies. If the office of any director or directors becomes
vacant for any reason, the vacancy shall be filled as provided for in the
Restated Articles of Incorporation.
3.10. Compensation. The Board of Directors, by affirmative vote of a
majority of the directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of
all directors for services to the corporation as directors, or may
delegate such authority to an appropriate committee. The Board of
Directors shall establish the compensation of the President, who shall
have the authority under Section 4.05 to establish the compensation,
exclusive of the benefits hereinafter referred to in this Section 3.10, of
the other officers, employees and agents of the corporation. The Board of
Directors also shall have authority to provide for or to delegate
authority to an appropriate committee to provide for reasonable pensions,
disability or death benefits, and other benefits 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.
3.11. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors or committee thereof of
which he is a member at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as the secretary of
the meeting before the adjournment thereof or shall forward such dissent
by registered mail to the Secretary of the corporation immediately after
the adjournment of the meeting. Such right to dissent shall not apply to
a director who voted in favor of such action.
3.12. Committees. The Board of Directors by resolution adopted by
the affirmative vote of a majority of the number of directors as provided
in Section 3.01 may designate one or more committees, each committee to
consist of three or more directors elected by the Board of Directors,
which to the extent provided in said resolution as initially adopted, and
as thereafter supplemented or amended by further resolution adopted by a
like vote, shall have and may exercise, when the Board of Directors is not
in session, the powers of the Board of Directors in the management of the
business and affairs of the corporation, except action in respect to
dividends to shareholders, election of the principal officers or the
filing of vacancies in the Board of Directors or committees created
pursuant to this section. The Board of Directors may elect one or more of
its members as alternate members of any such committee who may take the
place of any absent member or members at any meeting of such committee,
upon request by the President or upon request by the chairman of such
meeting. Each such committee shall fix its own rules governing the
conduct of its activities and shall make such reports to the Board of
Directors of its activities as the Board of Directors may request.
3.13. Unanimous Consent Without Meeting. Any action required or
permitted by the Restated Articles of Incorporation or By-laws or any
provision of law to be taken by the Board of Directors at a meeting or by
resolution may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the directors then in
office.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall be a
President, Vice-Presidents, a Secretary, and a Treasurer, each of whom
shall be elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed
by the Board of Directors. Any two or more offices may be held by the
same person, except the offices of President and Secretary and the offices
of President and Vice President.
4.02. Election and Term of Office. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the
Board of Directors at the first meeting of the Board of Directors held
after each annual meeting of the shareholders. If the election of
officers shall not be held at such meeting, such election shall be held as
soon thereafter as conveniently may be. Each officer shall hold office
until his successor shall have been duly elected or until his prior death,
resignation or removal.
4.03. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or
appointment shall not of itself create contract rights.
4.04. Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, shall be filled by
the Board of Directors for the unexpired portion of the term.
4.05. President. The President shall be the principal executive
offIcer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all
meetings of the shareholders and of the Board of Directors. He shall have
authority, subject to such rules as may be prescribed by the Board of
Directors, to appoint such employees and agents of the corporation as he
shall deem necessary, to prescribe their powers, and duties and to
delegate authority to them. The President shall establish the
compensation, exclusive of certain benefits provided by the Board of
Directors under Section 3.10, of the other officers, employees and agents
of the corporation. Such employees and agents shall hold office at the
discretion of the President. He shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by resolution
of the Board of Directors; and, except as otherwise provided by law or the
Board of Directors, he may authorize any Vice President or other officer
or agent of the corporation to assign, execute and acknowledge such
documents or instruments in his place and stead. In general he shall
perform all duties incident to the office of president and such other
duties as may be prescribed by the Board of Directors from time to time.
4.06. The Vice Presidents. In the absence of the President or in the
event of his death, inability or refusal to act, or in the event for any
reason it shall be impracticable for the President to act personally, the
Vice-President (or in the event there be more than one Vice-President, the
Vice-Presidents in the order designated by the Board of Directors, or in
the absence of any designation, then in the order of their election) shall
perform the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President.
Any Vice-President may sign, with the Secretary or Assistant Secretary,
certificates for shares of the corporation; and shall perform such other
duties and have such authority as from time to time may be delegated or
assigned to him by the President or by the Board of Directors. The
execution of any instrument of the corporation by any Vice-President shall
be conclusive evidence, as to third parties, of his authority to act in
the stead of the President.
4.07. The Secretary. The Secretary shall: (a) keep the minutes of
the meetings of the shareholders and of the Board of Directors in one or
more books provided for that purpose; (b) see that all notices are duly
given in accordance with the provisions of these By-laws or as required by
law; (c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all
documents the execution of which on behalf of the corporation under its
seal is duly authorized; (d) keep or arrange for the keeping of a register
of the post office address of each shareholder which shall be furnished to
the Secretary by such shareholder; (e) sign with the President, or a Vice
President, certificates for shares of the corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors;
(f) have general charge of the stock transfer books of the corporation;
and (g) in general perform all duties incident to the office of Secretary
and have such other duties and exercise such authority as from time to
time may be delegated or assigned to him by the President or by the Board
of Directors.
4.08. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) receive and give receipts for moneys due and payable to
the corporation from any source whatsoever, and deposit all such moneys in
the name of the corporation in such banks, trust companies or other
depositaries as shall be selected in accordance with the provisions of
Section 5.04; and (c) in general perform all of the duties incident to the
office of Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned to him by the
President or by the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of
his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
4.09. Assistant Secretaries and Assistant Treasurers. There shall be
such number of Assistant Secretaries and Assistant Treasurers as the Board
of Directors may from time to time authorize. The Assistant Secretaries
may sign with the President or a Vice-President certificates for shares of
the corporation the issuance of which shall have been authorized by-a
resolution of the Board of Directors. The Assistant Treasurers shall
respectively, if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such sureties as
the Board of Directors shall determine. The Assistant Secretaries and
Assistant Treasurers, in general, shall perform such duties and have such
authority as shall from time to time be delegated or assigned to them by
the Secretary or the Treasurer, respectively, or by the President or the
Board of Directors.
4.10. Other Assistants and Acting Officers. The Board of Directors
shall have the power to appoint any person to act as assistant to any
officer, or as agent for the corporation in his stead, or to perform the
duties of such officer whenever for any reason it is impracticable for
such officer to act personally, and such assistant or acting officer or
other agent so appointed by the Board of Directors shall have the power to
Perform all the duties of the office to which he is so appointed to be
assistant, or as to which he is so appointed to act, except as such power
may be otherwise defined or restricted by the Board of Directors.
ARTICLE V. CONTRACTS, LOANS, CHECKS AID DEPOSITS;
SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or
deliver any instrument in the name of and on behalf of the corporation,
and such authorization may be general or confined to specific instances.
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 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 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.
5.02. Loans. No indebtedness for borrowed money shall be contracted
on behalf of the corporation and no evidences of such indebtedness shall.
be issued in its name unless authorized by or under the authority or a
resolution of the Board of Directors. Such authorization may be general
or confined to specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in
the name of the corporation, shall be signed by such officer or officers,
agent or agents of the corporation and in such manner as shall from time
to time be determined by or under the authority of a resolution of the
Board of Directors.
5.04. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in
such banks, trust companies or other depositaries as may be selected by or
under the authority of a resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation. Subject always
to the specific directions of the Board Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he be present, or in
his absence by any Vice President of this corporation who may be present,
and (b) whenever, in the judgment of the President, or on his absence by
any Vice President, it is desirable for this corporation to execute a
proxy or written consent in respect to any shares or other securities
issued by any other corporation and owned by this corporation, such proxy
or consent shall be executed in the name of this corporation by the
President or one of the Vice Presidents of this corporation without
necessity of any authorization by the Board of Directors, affixation of
corporate seal or countersignature or attestation by another officer. Any
person or persons designated in the manner above stated as the proxy or
proxies of this corporation shall have full right, power and authority to
vote the shares or other securities issued by such other corporation and
owned by this corporation the same as such shares or other securities
might be voted by this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form, consistent with law, as shall be
determined by the Board of Directors. Such certificates shall be signed
by the President or a Vice-President and by the Secretary or an Assistant
Secretary. All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom the
shares represented thereby are issued, with the number of shares and date
of issue, shall be entered on the stock transfer books of the corporation.
All certificates surrendered to the corporation for transfer shall be
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 6.06.
6.02. Facsimile Signatures and Seal. The seal of the corporation on
any certificate for snares may be a facsimile. The signatures of the
President or Vice President and the Secretary or Assistant Secretary upon
a certificate may be facsimiles if the certificate is manually signed on
behalf of a transfer agent, or a registrar, other than the corporation
itself or an employee of the corporation.
6.03. Signature by Former Officers. In case any officer, who has
signed or whose facsimile signature has been placed upon any certificate
for shares, shall have ceased to be such officer before such certificate
is issued, it may be issued by the corporation with the same effect as if
he were such officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of a certificate
for shares for registration of transfer the corporation may treat the
registered owner of such shares as the person exclusively entitled to
vote, to receive notifications and otherwise to have and exercise all the
rights and 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 said
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.
6.05. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the owner claims
that his certificate for shares has been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner (a)
so requests before the corporation has notice that such shares have been
acquired by a bona fide purchaser, and (b) files with the corporation a
sufficient indemnity bond, and (c) satisfies such other reasonable
requirements as may be prescribed by or under the authority of the Board
of Directors.
6.07. Consideration for Shares. The shares of the corporation may be
issued for such consideration as shall be fixed from time to time by the
Board of Directors, provided that any shares having a par value shall not
be issued for a consideration less than the par value thereof. The
consideration to be paid for shares may be paid in whole or in part, in
money, in other property, tangible or intangible, or in labor or services
actually performed for the corporation. When payment of the consideration
for which shares are to be issued shall have been received by the
corporation, such shares shall be deemed to be fully paid and
nonassessable by the corporation. No certificate shall be issued for any
share until such share is fully paid.
6.08. Stock Regulations. The Board of Directors shall have the power
and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the name of the
corporation and the state of incorporation and the words, "Corporate
Seal".
ARTICLE VIII. INDEMNIFICATION
8.01. Certain Definitions. All capitalized terms used in this
Article VIII and not otherwise hereinafter defined in this Section 8.01
shall have the meaning set forth in Section 180.042 of the Statute. The
following capitalized terms (including any plural forms thereof) used in
this Article VIII shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust or other
enterprise that directly or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the
corporation.
(b) "Authority" shall mean the entity selected by the Director or
Officer to determine his or her right to indemnification pursuant to
Section 8.04.
(c) "Board" shall mean the entire then elected and serving board of
directors of the corporation, including all members thereof who are
parties to the subject proceeding or any related proceeding.
(d) "Breach of Duty" shall mean the Director or Officer breached or
failed to perform his or her duties to the corporation and his or her
breach of or failure to perform those duties is determined, in accordance
with Section 8.04, to constitute misconduct under Section 180.044(2) (a)
l, 2, 3 or 4 of this Statute.
(e) "Corporation," as used herein and as defined in the Statute and
incorporated by reference into the definitions of certain other
capitalized terms used herein, shall mean this corporation, including,
without limitation, any successor corporation or entity to this
corporation by way of merger, consolidation or acquisition of all or
substantially all of the capital stock or assets of this corporation.
(f) "Director or Officer" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article VIII, it shall be
conclusively presumed that any Director or Officer serving as a director,
officer, partner, trustee, member of any governing or decision-making
committee, employee or agent of an Affiliate shall be so serving to the
request of the corporation.
(g) "Disinterested Quorum" shall mean a quorum of the Board who are not
parties to the subject proceeding or any related proceeding.
(h) "Party" shall have the meaning set forth in the Statute; provided,
that, for purposes of this Article VIII the term "Party" shall also
include any Director or Officer who is or was witness in a proceeding at a
time when he or she has not otherwise been formally named a party thereto.
(i) "Proceeding" shall have the meaning set forth in the Statute;
provided, that, for purposes of this Article VIII, the term "Proceeding"
shall also include all Proceedings (i) brought under (in whole or in part)
the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, their respective state counterparts, and/or any rule or
regulation promulgated under any of the foregoing; (ii) brought before an
Authority or otherwise to enforce rights hereunder; (iii) any appeal from
a Proceeding; and (iv) any Proceeding in which the Director or Officer is
a plaintiff or petitioner because he or she is a Director or Officer;
provided, however, that such Proceeding is authorized by a majority vote
of a Disinterested Quorum.
(j) "Statute" shall mean Sections 180.042 through 180.059, 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 such amendment, only to the extent such
amendment permits or requires the corporation to provide broader
indemnification rights than the Statute permitted or required the
corporation to provide prior to such amendment.
8.02. Mandatory Indemnification. To the fullest extent permitted or
required by the Statute, the corporation shall indemnify a Director or
Officer against all liabilities incurred by or on behalf of such Director
or Officer in connection with a proceeding in which the Director or
Officer is a party because he or she is a Director or Officer.
8.03. Procedure Requirements.
(a) A Director or Officer who seeks indemnification under Section 8.02
shall make a written request therefor to the corporation. Subject to
Section 8.03(b), within sixty days of the corporation's receipt of such
request, the corporation shall pay or reimburse the Director or Officer
for the entire amount of liabilities incurred by the Director or Officer
in connection with the subject proceeding (net of any expenses previously
advanced pursuant to Section 8.05).
(b) No indemnification shall be required to be paid by the corporation
pursuant to Section 8.02 if, within such sixty-day period: (i) a
Disinterested Quorum, by a majority vote thereof, determines that the
Director or Officer requesting indemnification engaged in misconduct
constituting a Breach of Duty; or (ii) a Disinterested Quorum cannot be
obtained.
(c) In either case of nonpayment pursuant to Section 8.03(b), the Board
shall immediately authorize by resolution that an Authority, as provided
in Section 8.04, determine whether the Director's or Officer's conduct
constituted a Breach of Duty and, therefore, whether indemnification
should be denied hereunder.
(d) If the Board does not authorize an Authority to determine the
Director's or Officer's right to indemnification hereunder within such
sixty-day period and/or if indemnification of the requested amount of
Liabilities is paid by the Corporation, then it shall be conclusively
presumed for all purposes that a Disinterested Quorum has determined that
the Director or Officer did not engage in misconduct constituting a Breach
of Duty.
8.04. Determination of Indemnification.
(a) If the Board authorizes an Authority to determine a Director's or
Officer's right to indemnification pursuant to Section 8.03, then the
Director or Officer requesting indemnification shall have the absolute
discretionary authority to select one of the following as such Authority.
(i) An independent legal counsel; provided, that such counsel shall
be mutually selected by such Director or Officer and by a majority vote of
a Disinterested Quorum or, if a Disinterested Quorum cannot be obtained,
then by a majority vote of the Board.
(ii) A panel of three arbitrators selected from the panels of
arbitrators of the American Arbitration Association in Milwaukee
Wisconsin; provided, that (A) one arbitrator shall be selected by such
Director or Officer, the second arbitrator shall be selected by a majority
vote of a Disinterested Quorum or, if a Disinterested Quorum cannot be
obtained, than by a majority vote of the Board, and the third arbitrator
shall be selected by the two previously selected arbitrators; and (B) in
all other respects, such panel shall be governed by the American
Arbitration Association's then existing. Commercial Arbitration Rules; or
(iii) A court pursuant to and in accordance with Section 180.051
of the Statute.
(b) In any such determination by the selected Authority there shall
exist a rebuttable presumption that the Director's or Officer's conduct
did not constitute a Breach of Duty and that indemnification against the
requested amount of Liabilities is required. The burden of rebutting such
a presumption by clear and convincing evidence shall be on the Corporation
or such other party asserting that such indemnification should not be
allowed.
(c) The Authority shall make its determination within sixty days of
being selected and shall submit a written opinion of its conclusion
simultaneously to both the corporation and the Director or Officer.
(d) If the Authority determines that indemnification is required
hereunder, the corporation shall pay the entire requested amount of
Liabilities (net of any Expenses previously advanced pursuant to Section
8.05), including interest thereon at a reasonable rate, as determined by
the Authority, within ten days of receipt of the Authority's opinion;
provided, that, if it is determined by the Authority that a Director or
Officer is entitled to indemnification as to 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 (as set forth
above) only the amount of such requested Liabilities ask the authority
shall deem appropriate in light of all of the circumstances of such
Proceeding.
(e) The determination by the Authority that indemnification is required
hereunder shall be binding upon the corporation regardless of any prior
determination that the Director or Officer engaged in a Breach of Duty.
(f) All Expenses incurred in the determination process under this
Section 8.04 by either the corporation or the Director or Officer,
including, without limitation, all Expenses of the selected Authority,
shall be paid by the corporation.
8.05. Mandatory Allowance of Expense.
(a) The corporation shall pay or reimburse, within ten days after the
receipt of the Director's or Officer's written request therefor, the
reasonable Expenses of the Director or Officer as such Expenses are
incurred, provided the following conditions are satisfied:
(i) The Director or Officer furnishes to the corporation an
executed written certificate affirming his or her good faith belief that
he or she has not engaged in misconduct which constitutes a Breach of
Duty; and
(ii) The Director or Officer furnishes to the corporation an
unsecured executed written agreement to repay any advances made under this
Section 8.05 if it is ultimately determined by an Authority that he or she
is not entitled to be indemnified by the corporation for such Expenses
pursuant to this Section 8.04.
(b) If the Director or Officer must repay any previously advanced
Expenses pursuant to this Section 8.05, such Director or Officer shall not
be required to pay interest on such amounts.
8.06. Indemnification and Allowance of Expenses of Certain Others.
(a) The corporation shall indemnify a director or officer of an
Affiliate (who is not otherwise serving as a Director or Officer) against
all Liabilities, and shall advance the reasonable Expenses, incurred by
such director or officer in a Proceeding to the same extent hereunder as
if such director or officer incurred such Liabilities because he or she
was a Director or Officer, if such director or officer is a Party thereto
because he or she is or was a director or officer of the Affiliate.
(b) The Board may, in its sole and absolute discretion as it deems
appropriate, pursuant to a majority vote thereof, indemnify against
Liabilities incurred by, and/or provide for the allowance of reasonable
Expenses of, an authorized employee or agent of the corporation acting
within the scope of his or her duties as such and who is not otherwise a
Director or Officer.
8.07. Insurance. The corporation may purchase and maintain insurance
on behalf of a Director or Officer or any individual who is or was an
authorized employee or agent of the corporation against any Liability
asserted against or incurred by such individual in his or her capacity as
such or arising from his or her status as such, regardless of whether the
corporation is required or permitted to indemnify against any such
Liability under this Article VIII.
8.08. Notice to the Corporation. A Director or Officer shall
promptly notify the corporation in writing when he or she has actual
knowledge of a Proceeding which may result in a claim of indemnification
against Liabilities or allowance of Expenses hereunder, but the failure to
do so shall not relieve the corporation of any liability to the Director
or Officer hereunder unless the corporation shall have been irreparably
prejudiced by such failure (as determined by an Authority).
8.09. Severability. If any provision of this Article VIII shall be
deemed invalid or inoperative, or if a court of competent jurisdiction
determines that any of the provisions of this Article VIII contravene
public policy, this Article VIII shall be construed so that the remaining
provisions shall not be affected, but shall remain in full force and
effect and any such provisions which are invalid or inoperative or which
contravene public policy shall be deemed, without further action or deed
by or on behalf of the corporation, to be modified, amended and/or
limited, but only to the extent necessary to render the same valid and
enforceable.
8.10. Nonexclusivity, of Article VIII. The rights of a Director or
Officer (or any other person) granted under this Article VIII shall not be
deemed exclusive of any other rights to indemnification against
Liabilities or advancement of Expenses which the Director or Officer (or
such other person) may be entitled to under any written agreement, Board
resoLution, vote of shareholders of the corporation or otherwise,
including, without limitation, under the Statute. Nothing contained in
this Article VIII shall be deemed to limit the corporation's obligations
to indemnify a Director or Officer under the Statute.
8.11. ContractuaL Nature of Article VIII: Repeal or Limitation of
Rights. This Article VIII shall be deemed to be a contract between the
corporation and each Director and Officer and any repeal or other
limitation of this Article VIII or any repeal or limitation of the Statute
or any other applicable law shall not limit any rights of indemnification
against Liabilities or allowance of Expenses then existing or arising out
of events, acts or omissions occurring prior to such repeal or limitation,
including, without limitation, the right to indemnification against
Liabilities or allowance of Expenses for Proceedings commenced after such
repeal or limitation to enforce this Article VIII with regard to acts,
omissions or events arising prior to such repeal or limitation.
ARTICLE IX. AMENDMENTS
9.01. Except as otherwise provided in the Restated Articles of
Incorporation, these By-laws may be altered, amended or repealed and new
By-laws may be adopted by the shareholders by the affirmative vote of a
majority of the shares present or represented at any annual or special
meeting of the shareholders or by the affirmative vote of a majority of
the entire number of directors authorized, at any general or special
meeting of such Board of Directors.
Exhibit 11
Computation of Earnings per Share
($000 except per share data)
Three months ended
March 28, 1998 March 29, 1997
Per Per
Income Shares Share Income Shares Share
Basic EPS:
Net income from continuing
operations 221 2,909 0.08 351 2,895 0.12
Earnings (loss) from
discontinued operations 0 2,909 0.00 (81) 2,895 (0.03)
Net income applicable to
common shares 221 2,909 0.08 270 2,895 0.09
Effect of Dilutive
Securities
Convertible debentures -
Continuing 0 0 21 404
Convertible debentures -
Discontinued 0 0 28 404
Warrants - Continuing 0 0 0 135
Warrants - Discontinued 0 0 0 135
Employee stock options -
Continuing 0 41 0 89
Employee stock options -
Discontinued 0 41 0 89
Diluted EPS:
Net income from continuing
operations 221 2,950 0.08 372 3,523 0.11
Earnings (loss) from
discontinued operations 0 2,950 0.00 (53) 3,523 (0.02)
Net income applicable to
common shares 221 2,950 0.08 319 3,523 0.09
___________________________________
Common shares have been adjusted to give effect to the 5% stock dividend
paid January 23, 1998.
The $3,375,000 Convertible Subordinated Debentures at March 29, 1997, were
convertible to common shares at a price of $5.98 per share after giving
effect to the stock dividend paid January 24, 1997. The Debentures were
repaid on May 29, 1997 and warrants were issued concurrently to the holder
of the Debentures. The warrants were repurchased effective December 30,
1997.
Basic EPS was computed by dividing the net income by the weighted average
number of shares of common stock outstanding during the period. Diluted
EPS was determined by assuming that at the beginning of the period,
convertible debentures were converted at the price per share in effect at
that time and common share warrants and employee stock options were
exercised. As to the warrants and options, incremental shares would be
calculated using the treasury stock method, assuming common share
purchases at the average market price of the common shares for the period.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED FINANCIAL STATEMENTS OF HEIN-WERNER CORPORATION
AND THE COMPUTATION OF EARNINGS PER SHARE (EXHIBIT 11) AS OF AND
FOR THE THREE MONTHS ENDED MARCH 28, 1998, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND COMPUTATION.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-28-1998
<CASH> 8,514
<SECURITIES> 0
<RECEIVABLES> 12,505
<ALLOWANCES> 1,569
<INVENTORY> 10,128
<CURRENT-ASSETS> 31,263
<PP&E> 7,724
<DEPRECIATION> 4,814
<TOTAL-ASSETS> 35,267
<CURRENT-LIABILITIES> 10,704
<BONDS> 0
0
0
<COMMON> 2,909
<OTHER-SE> 19,345
<TOTAL-LIABILITY-AND-EQUITY> 35,267
<SALES> 8,873
<TOTAL-REVENUES> 8,873
<CGS> 4,510
<TOTAL-COSTS> 8,513
<OTHER-EXPENSES> 48
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (29)
<INCOME-PRETAX> 341
<INCOME-TAX> 120
<INCOME-CONTINUING> 221
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 221
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED FINANCIAL STATEMENTS OF HEIN-WERNER CORPORATION
AND THE COMPUTATION OF EARNINGS PER SHARE (EXHIBIT 11) AS OF AND
FOR THE THREE MONTHS ENDED MARCH 27, 1997, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND COMPUTATION.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-29-1997
<CASH> 0
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<ALLOWANCES> 1,627
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<TOTAL-COSTS> 9,095
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<INTEREST-EXPENSE> 83
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<DISCONTINUED> (81)
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<EPS-PRIMARY> 0.09
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</TABLE>
