UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 3, 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 0-2648
HON INDUSTRIES Inc.
(Exact name of Registrant as specified in its charter)
Iowa 42-0617510
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 1109, 414 East Third Street, Muscatine, Iowa 52761-7109
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 319/264-7400
Indicate by check mark whether the registrant (1) has filed all
required reports to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Indicate the number of share outstanding of each of the issuer's
classes of commons tock, as of the latest practical date.
Class Outstanding at October 3, 1998
Common Shares, $1 Par Value 61,739,052 shares
Exhibit Index is on page 19.
<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -
October 3, 1998, and January 3, 1998 3-4
Condensed Consolidated Statements of Income -
Three Months Ended October 3, 1998, and October 4, 1997 5
Condensed Consolidated Statements of Income -
Nine Months Ended October 3, 1998, and October 4, 1997 6
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended October 3, 1998, and October 4, 1997 7
Notes to Condensed Consolidated Financial Statements 8-11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12-16
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
EXHIBIT INDEX 19
(3i) Articles of Incorporation of the Registrant,
as amended and restated, on August 10, 1998
(3ii) By-Laws of the Registrant, as amended and
restated, on July 29, 1998
(27) Financial Data Schedule
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 3,
1998 January 3,
(Unaudited) 1998
ASSETS (In thousands)
CURRENT ASSETS
Cash and cash equivalents $ 31,410 $ 46,080
Short-term investments 167 260
Receivables 197,024 158,408
Inventories (Note B) 69,359 60,182
Deferred income taxes 15,055 14,391
Prepaid expenses and other current assets 8,720 15,829
Total Current Assets 321,735 295,150
PROPERTY, PLANT, AND EQUIPMENT, at cost
Land and land improvements 11,569 10,059
Buildings 134,713 111,387
Machinery and equipment 384,628 333,216
Construction in progress 99,260 60,832
630,170 515,494
Less accumulated depreciation 198,665 174,464
Net Property, Plant, and Equipment 431,505 341,030
GOODWILL 109,327 98,720
OTHER ASSETS 21,948 19,773
Total Assets $884,515 $754,673
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 3,
1998 January 3,
(Unaudited) 1998
LIABILITIES AND SHAREHOLDERS' EQUITY (In thousands)
CURRENT LIABILITIES
Accounts payable and accrued expenses $200,237 $183,738
Income taxes 10,855 8,133
Note payable and current maturities
of long-term debt 14,496 2,545
Current maturities of other long-term
obligations 5,579 6,343
Total Current Liabilities 231,167 200,759
LONG-TERM DEBT 153,173 123,487
CAPITAL LEASE OBLIGATIONS 9,102 11,024
OTHER LONG-TERM LIABILITIES 19,391 18,601
DEFERRED INCOME TAXES 24,797 19,140
SHAREHOLDERS' EQUITY (Note C)
Capital Stock:
Preferred, $1 par value; authorized
1,000,000 shares; no shares outstanding - -
Common, $1 par value; authorized
100,000,000 shares; outstanding - 61,739 61,659
1998 - 61,739,052 shares;
1997 - 61,659,316 shares
Paid-in capital 57,928 55,906
Retained earnings 327,136 265,203
Accumulated other comprehensive income
(Note F) 1,181 (7)
Receivable from HON Member Company
Ownership Plan (1,099) (1,099)
Total Shareholders' Equity $446,885 381,662
Total Liabilities and Shareholders'
Equity $884,515 $754,673
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
October 3, October 4,
1998 1997
(In thousands, except
per share data)
Net sales $448,679 $391,348
Cost of products sold 309,080 268,147
Gross Profit 139,599 123,201
Selling and administrative expenses 88,162 80,641
Operating Income 51,437 42,560
Interest income 585 601
Interest expense 2,610 2,810
Income Before Income Taxes 49,412 40,351
Income taxes 18,530 15,132
Net Income $ 30,882 $ 25,219
Net income per common share (Note C) $ 0.50 $ 0.43
Average number of common shares
outstanding 61,691,164 59,355,904
Cash dividends per common share $ 0.08 $ 0.07
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Nine Months Ended
October 3, October 4,
1998 1997
(In thousands, except
per share data)
Net sales $1,268,359 $970,774
Cost of products sold 878,758 663,310
Gross Profit 389,601 307,464
Selling and administrative expenses 259,938 205,397
Operating Income 129,663 102,067
Interest income 1,233 1,453
Interest expense 8,121 5,945
Income Before Income Taxes 122,775 97,575
Income taxes 46,041 36,591
Net Income $ 76,734 $ 60,984
Net income per common share (Note C) $ 1.24 $ 1.03
Average number of common shares
outstanding 61,667,458 59,379,358
Cash dividends per common share $ 0.24 $ 0.21
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
October 3, October 4,
1998 1997
(In thousands)
Net Cash Flows From (To) Operating
Activities:
Net income $ 76,734 $ 60,984
Noncash items included in net income:
Depreciation and amortization 38,039 25,334
Other postretirement and postemployment
benefits 1,167 1,041
Deferred income taxes 4,993 1,851
Other - net 3 20
Net increase (decrease) in noncash
operating assets and liabilities (24,610) (15,651)
Increase (decrease) in other liabilities (1,549) (571)
Net cash flows from operating activities 94,777 73,008
Net Cash Flows From (To) Investing Activities:
Capital expenditures - net (123,324) (56,898)
Acquisition spending, net of cash acquired (11,310) (67,025)
Short-term investments - net 93 444
Long-term investments (35) 1,045
Other - net 132 (164)
Net cash flows (to) investing activities (134,444) (122,598)
Net Cash Flows From (To) Financing Activities:
Purchase of HON INDUSTRIES common stock (1,573) (3,714)
Proceeds from long-term debt 66,287 100,000
Payments of note and long-term debt (27,635) (48,106)
Proceeds from sales of HON INDUSTRIES
common stock to members and stock-based
compensation 2,723 1,930
Dividends paid (14,805) (12,468)
Net cash flows from (to) financing
activities 24,997 37,642
Net increase (decrease) in cash and
cash equivalents (14,670) (11,948)
Cash and cash equivalents at beginning
of period 46,080 31,196
Cash and cash equivalents at end of period $ 31,410 $ 19,248
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
October 3, 1998
Note A. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the nine-month period
ended October 3, 1998, are not necessarily indicative of the
results that may be expected for the year ending January 2, 1999.
For further information, refer to the consolidated financial
statements and footnotes included in the Company's annual report
on form 10-K for the year ended January 3, 1998.
Note B.
Inventories of the Company and its subsidiaries are summarized as
follows:
October 3, January 3,
($000) 1998 1998
(Unaudited)
Finished products $27,308 $26,352
Materials and work in process 55,062 48,186
LIFO Allowance (13,011) (14,356)
$69,359 $60,182
Note C. Shareholders' Equity
The Board of Directors approved a two-for-one common stock split
in the form of a 100 percent stock dividend, paid on March 27,
1998, to shareholders of record on March 6, 1998. All reported
net income per share and share outstanding amounts have been
adjusted to retroactively reflect the split.
Note D. Business Combinations
During June 1998, the Company finalized its purchase price
allocation for the stock purchase of Allsteel Inc.
The final purchase price and allocation for the Allsteel Inc.
acquisition is shown below:
(In Millions)
Purchase Price $66.0
Final Allocation of Purchase Price:
Working capital, other than cash 24.3
Property, plant, and equipment 38.4
Goodwill 9.9
Other liabilities 6.6
The Company acquired Aladdin Steel Products Inc. on February 20,
1998. The transaction has been accounted for under the purchase
method. The cash purchase price and preliminary allocation is
shown below:
(In Millions)
Purchase Price $10.2
Preliminary Allocation of Purchase Price:
Working capital, other than cash .3
Property, plant, and equipment 1.8
Goodwill 8.1
Assuming the acquisition of Allsteel Inc., Bevis Custom Furniture
Inc., Panel Concepts Inc., and Aladdin Steel Products Inc.
occurred on December 29, 1996, the beginning of the Company's
1997 fiscal year, instead of June 17, 1997, November 13, 1997,
December 1, 1997, and February 20, 1998, when they actually
occurred, the Company's pro forma consolidated net sales for the
third quarter ended October 4, 1997, would have been
approximately $414.8 million instead of the reported $391.3
million. Pro forma consolidated net sales for the nine months
ended October 4, 1997, would have been approximately $1,103.9
million instead of the reported $970.8 million. Pro forma
consolidated net income and net income per share for the third
quarter and first nine months of 1997 would not have been
materially different from the reported amounts.
Note E. New Accounting Standards
The Company adopted Statement of Financial Accounting Standards
(SFAS) No. 128, Earnings Per Share and SFAS No. 129, Disclosure
of Information about Capital Structure, as of January 3, 1998,
year-end 1997. Their adoption had no material effect on
financial condition or results of operations.
Note F. Comprehensive Income
The Company adopted Statement of Financial Accounting standards
(SFAS) No. 130, Reporting Comprehensive Income, as of January 4,
1998, the beginning of its 1998 fiscal year. For the three- and
nine-month periods ended October 3, 1998, comprehensive income is
approximately ($1,294,000) and $1,188,000, respectively.
The Company's comprehensive income consists of an unrealized
holding gain on equity securities available-for-sale under SFAS
No. 115, Accounting for Certain Investments in Debt and Equity
Securities, and nominal foreign currency adjustments.
Note G. Reclassifications
Certain prior year information has been reclassified to conform
to the current year presentation.
Note H. Business Segment Information
The Company adopted Statement of Financial Accounting Standards
(SFAS) No. 131, Disclosures about Segments of an Enterprise and
Related Information, effective with its 1998 fiscal year
beginning January 4, 1998. This segment disclosure is
essentially unchanged from the format used by the Company
historically in complying with SFAS No. 14, Financial Reporting
for Segments of a Business Enterprise, and No. 30, Disclosures of
Information about Major Customers. That is, management views the
Company as being in two business segments: office furniture and
hearth products with the former being the principal business
segment.
The office furniture segment manufactures and markets a broad
line of metal and wood commercial and home office furniture which
includes file cabinets, desks, credenzas, chairs, storage
cabinets, tables, bookcases, freestanding office partitions and
panel systems, and other related products. The hearth products
segment manufactures and markets a broad line of manufactured
gas-, pellet-, and wood-burning fireplaces and stoves, fireplace
inserts, and chimney systems principally for the home.
For purposes of segment reporting, intercompany sales transfers
between segments are not material and operating profit is income
before income taxes exclusive of certain unallocated corporate
expenses. These unallocated corporate expenses include the net
costs of the Company's corporate operations, interest income, and
interest expense. Management views interest income and expense
as corporate financing costs and not as a business segment cost.
In addition, management applies one effective income tax rate to
its consolidated income before income taxes so income taxes are
not reported or viewed internally on a segment basis.
No geographic information for revenues from external customers or
for long-lived assets is disclosed inasmuch as the Company's
primary market and capital investments are concentrated in the
United States.
Reportable segment data reconciled to the consolidated financial
statements for the three month and nine month period ended
October 3, 1998, and October 4, 1997, is as follows:
Note H. Business Segment Information
Three Months Ended Nine Months Ended
Oct. 3, Oct. 4, Oct. 3, Oct. 4,
1998 1997 1998 1997
(In thousands)
Net Sales:
Office furniture $383,409 $334,159 $1,093,738 $818,522
Hearth products 65,270 57,189 174,621 152,252
$448,679 $391,348 $1,268,359 $970,774
Operation Profit:
Office furniture $ 52,844 $ 42,695 $128,802 $100,906
Hearth products 9,835 8,066 19,491 16,724
Total operating profit 62,679 50,761 148,293 117,630
Unallocated corporate expense (13,267) (10,410) (25,518) (20,055)
Income before income taxes $ 49,412 $ 40,351 $122,775 $ 97,575
Identifiable Assets:
Office furniture $661,760 $473,453
Hearth products 161,155 138,553
General corporate 61,600 59,798
$884,515 $671,804
Depreciation & Amortization
Expense
Office furniture $ 10,757 $ 8,046 $30,500 $ 19,365
Hearth products 2,296 1,859 6,556 4,938
General corporate 336 345 983 1,031
$ 13,389 $ 10,250 $38,039 $ 25,334
Capital Expenditure, Net:
Office furniture $ 37,817 $ 19,076 $107,569 $ 45,742
Hearth products 4,246 3,232 13,187 10,491
General corporate 1,245 368 2,568 665
$ 43,308 $ 22,676 $123,324 $ 56,898
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
A summary of the period-to-period changes in the principal items
included in the Condensed Consolidate Statements of Income is
shown below:
Comparison of
Increases (Decreases) Three Months Nine Months Three Months
Ended Ended Ended
Dollars in Thousand Oct. 3, 1998 & Oct. 3, 1998 & Oct. 3, 1998 &
Oct. 4, 1997 Oct. 4, 1997 Jul. 4, 1998
Net sales $57,331 14.6% $297,585 30.7% $47,262 11.8%
Cost of products sold 40,933 15.3 215,448 32.5 30,973 11.1
Selling & Administrative
expenses 7,521 9.3 54,541 26.6 4,949 5.9
Interest income (16) (2.7) (220) (15.1) 372 174.6
Interest expense (200) (7.1) 2,176 36.6 (294) (10.1)
Income taxes 3,398 22.5 9,450 25.8 4,503 32.1
Net income 5,663 22.5 15,750 25.8 7,503 32.1
All per share information in this report reflects a two-for-one
stock split in the form of a 100% stock dividend effective March
27, 1998.
The Company reported all-time record quarterly sales and
earnings, marking the eleventh consecutive quarter of record
results. Consolidated net sales for the third quarter ended
October 3, 1998, were $448.7 million, up 14.6%, compared to
$391.3 million for the same quarter a year ago. For third
quarter 1998, net income increased 22.5% to $30.9 million,
compared to $25.2 million in 1997. Net income per share for the
quarter rose to $0.50 per diluted share, an increase of 16.3%
from $0.43 per diluted share earning in third quarter 1997.
For the nine months ended October 3, 1998, consolidated net sales
were $1.27 billion, up 30.7% from $970.8 million for the year-ago
period. Net income for the nine months of 1998 was $76.7
million, or $1.24 per diluted share, an increase of 25.8%,
compared to $61.0 million, or $1.03 per diluted share for the
comparable period in 1997.
Results of operations for both the third quarter and the nine-
month period ended October 4, 1997, included one extra week of
business activity compared to the same periods in 1998. This
extra week occurs every five or six years as a result of the leap
year effect on the Company's fiscal year calendar. Adjusting for
an extra week in third quarter 1997, net sales, on a comparative
basis, actually increased approximately 24% with proportionate
impact on earnings.
<PAGE>
Third quarter 1998 office furniture net sales represented 85% of
total consolidated quarterly net sales and contributed 84% of
consolidated operating profit before unallocated corporate
expenses. Hearth product sales made up the balance of
consolidated net sales and operating profit.
Strong industry economics in both business segments coupled with
the dedication of the Company's member-owners to provide superior
customer service, rapidly introduce new innovative products, and
achieve operational excellence through a Rapid Continuous
Improvement Program (RCI) contributed to the Company's record
sales and earnings.
Consolidated gross profit margins improved from 30.7% in the
first quarter of 1998 to 31.1% in the third quarter, which is
consistent with the Company's goal of maintaining consolidated
gross profit margins in the 31-32% range. Margins have been
reduced in the short-term as acquisitions, in various stages of
integration, become fully operationally integrated. Full
integration is typically an eighteen- to twenty-four month
process with larger acquisitions.
Selling and administrative expenses for the third quarter of 1998
were 19.6% of net sales compared to 20.6% in the comparable
quarter of 1997. On a nine-month basis, they were 20.5% in 1998
versus 21.2% in 1997. Management places major emphasis on
controlling and reducing selling and administrative expenses as a
percent of net sales. The Company's selling and administrative
expenses also include freight and distribution expenses incurred
to get the product to the customer.
Liquidity and Capital Resources
As of October 3, 1998, cash and short-term investments decreased
to $31.4 million compared to a $46.1 million balance at year-end
1997. The decrease is principally due to capital expenditures.
Net cash flows from operations was strong at $94.8 million for
the first nine months, an improvement of 29.8% for the same
period a year ago. Cash flow and working capital management are
major focuses of management to ensure the Company is poised for
continued future growth.
Net capital expenditures for the third quarter and nine-month
period in 1998 continue at an accelerated level. Net
expenditures for the first nine months of 1998 were $123.3
million. These expenditures are supporting new products,
construction of new facility capacity, and cost reduction
initiatives through the purchase and customization of production-
related machinery and equipment. These investments were funded
by a combination of cash reserves, cash from operations, and a
revolving credit agreement.
<PAGE>
On February 20, 1998, the Company completed an acquisition of the
assets of Aladdin Steel Products Inc. located in Colville,
Washington. Aladdin is a manufacturer of wood-, pellet-, and gas-
burning stoves and inserts under the Quadra-Fire brand name with
annual sales of approximately $16 million. A new division,
Aladdin Hearth Products, has been formed under the Hearth
Technologies Inc. operating company to manufacture and market the
Company's Quadra-Fire, Arrow, and Dovre brand stoves. Please
refer to Note D. Business Combinations for related information.
On March 27, 1998, the Company paid a two-for-one stock split, in
the form of a 100% stock dividend, to shareholders of record on
March 6, 1998. Shareholders received one share of common stock
for each share held on the record date.
Effective July 2, 1998, HON INDUSTRIES common stock began trading
on the New York Stock Exchange (NYSE) under the ticker symbol
HNI. The Company's common stock was previously traded on the
NASDAQ National Market System under the symbol HONI. The move to
the NYSE was initiated in the interest of the anticipated longer-
term benefits to the Company's shareholders. Effective June 26,
1998, Harris Trust and Savings Bank, Chicago, Illinois, began
serving as the Company's transfer agent and registrar of its
common stock. The transfer function was previously performed by
the Company.
On August 14, 1998, the Company filed a Form 8-A to register its
new share purchase rights plan with the U. S. Securities and
Exchange Commission and subsequently amended this filing on
September 14, 1998. The new plan replaced an existing rights plan
that expired on August 12, 1998. Also, on August 14, 1998, the
Company filed a Form 8-K Current Report to acknowledge the Board
of Directors dividend declaration of one right for each share of
common stock outstanding.
The Board of Directors declared a regularly quarterly cash
dividend of $0.08 per share on its common stock on August 10,
1998, to shareholders' of record at the close of business on
August 20. It was paid on September 1, 1998, and represented the
174th consecutive quarterly dividend paid by the Company since
its first shareholder dividend in 1955.
For the nine months ended October 3, 1998, the Company
repurchased 50,605 post-split shares of its common stock at a
cost of approximately $1.6 million or an average price of $30.82
per share. As of October 3, approximately $3.1 million of the
Board's current repurchase authorization remained unspent.
On November 9, 1998, the Board of Directors declared another
regular quarterly dividend of $0.08 per share on its common stock
payable December 1, 1998, to shareholders of record at the close
of business on November 19, 1998. On November 12, 1998, the
Board of Directors authorized an additional $70.0 million for the
HON INDUSTIRES' share repurchase program. This authorization is
in addition to the approximately $3.1 million unspent of the
Board's prior repurchase authorization. The new authorization
supports the Company's commitment to enhance shareholder value.
<PAGE>
Year 2000
The Company has a two-phase Y2K assessment, remediation, testing,
and implementation program underway that encompasses its computer
business information systems, operating equipment that uses date
sensitive computer chips, and key suppliers, service providers
and customers. Phase I of the program is an internally developed
program which focuses principally on the Company's computer
business information systems and was launched in 1997 and is
expected to be completed in the first quarter of 1999. Phase II
uses as a guideline a comprehensive externally licensed
assessment and remediation program that is focused principally on
operating equipment and third-party supplier and customer
relationships. Phase II was launched in September 1998 and is
targeted for completion in mid-1999. As the final step in each
phase, the Company will develop contingency plans as deemed
appropriate.
The Company's Y2K program is directed and monitored by designated
members of executive management working with a variety of
technical and management personnel, and program progress is
routinely reported to the Board of Directors.
The costs associated with addressing the Company's Y2K issues
will be expensed or capitalized in the period incurred.
Remediation costs incurred to date have been immaterial and were
expensed as incurred. The Company currently estimates its cost
to perform and complete its Y2K assessment and remediation
program to be in the range of $1 million, including some costs
which, because of their nature, will be capitalized. The Company
expects to have any Y2K issues resolved prior to them having an
adverse impact on its operations. However, given the pervasive
nature of Y2K and especially noncontrollable third-party
relationship exposures, the Company cannot avoid assuming some
measure of business risk. These business risks range from
inconsequential errors or failures to potentially more serious
risks. Management believes the primary business risks may
include, but not be limited to, higher than expected remediation
costs, business interruption risks, insurers may require
exclusions for losses/damages attributable to Year 2000, and
litigation risk.
<PAGE>
Looking Ahead
Management feels that the softening of the world economy may
eventually slow the sales momentum, but feel the Company is
prepared, as a low-cost, flexible manufacturer, to outperform the
industries in which they compete. Management's financial goals
for fiscal year 1998 continue to be to achieve double-digit
growth in both sales and earnings.
Except for the historical information contained herein, the
matters discussed in this Form 10-Q are forward-looking
statements. Such forward-looking statements involve risks and
uncertainties which could cause actual results or outcomes to
differ materially from those discussed in the forward-looking
statements including but not limited to: competitive conditions,
pricing trends in the office furniture and hearth products
markets, acceptance of the Company's new product introductions,
the overall growth rate of the office furniture and hearth
products industries, the achievement of cost reductions and
productivity in the Company's operations, the Company's ability
to improve margins of acquired businesses, impact of future
acquisitions, the Company's ability to identify and correct or
implement contingency plans to deal with the Y2K issues, as well
as the risks, uncertainties, and other factors described from
time to time in the Company's SEC filings and reports.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. See Exhibit Index.
(b) Reports on Form 8-K. On August 14, 1998, the Company filed a
Form 8-K to acknowledge the Board of Directors dividend
declaration of one share purchase right for each share of HON
INDUSTRIES common stock outstanding.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Dated: November 17, 1998 HON INDUSTRIES Inc.
By /s/ David C. Stuebe
David C. Stuebe
Vice President and
Chief Financial Officer
By /s/ Melvin L. McMains
Melvin L. McMains
Vice President and
Controller
<PAGE>
PART II. EXHIBITS
EXHIBIT INDEX
(3i) Articles of Incorporation of the Registrant, as amended
and restated, on August 10, 1998
(3ii)By-Laws of the Registrant, as amended and
restated, on July 29, 1998
(27) Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000048287
<NAME> HON INDUSTRIES INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-2-1999
<PERIOD-START> JAN-4-1998
<PERIOD-END> OCT-3-1998
<CASH> 31,410
<SECURITIES> 167
<RECEIVABLES> 200,912
<ALLOWANCES> (3,888)
<INVENTORY> 69,359
<CURRENT-ASSETS> 321,735
<PP&E> 630,170
<DEPRECIATION> 198,665
<TOTAL-ASSETS> 884,515
<CURRENT-LIABILITIES> 231,167
<BONDS> 153,173
0
0
<COMMON> 61,739
<OTHER-SE> 385,146
<TOTAL-LIABILITY-AND-EQUITY> 884,515
<SALES> 1,268,359
<TOTAL-REVENUES> 1,268,359
<CGS> 878,758
<TOTAL-COSTS> 878,758
<OTHER-EXPENSES> 259,938
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<INCOME-TAX> 46,041
<INCOME-CONTINUING> 76,734
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</TABLE>
Exhibit 3(i)
ARTICLES OF INCORPORATION
OF
HON INDUSTRIES Inc.
Amended and restated on May 5, 1987.
Amended on May 3, 1988, July 7, 1988, May 12, 1998,
and August 10, 1998.
ARTICLE 1.
Section 1.01. Name. The name of the Corporation is HON
INDUSTRIES Inc.
Section 1.02. Law Under Which Incorporated. The
Corporation was incorporated under Chapter 384 of the Code of
Iowa (1939), and has voluntarily adopted the provisions of the
Iowa Business Corporation Act, Chapter 496A of the Code of Iowa.
ARTICLE 2.
Section 2.01. Duration. The Corporation shall have
perpetual duration.
ARTICLE 3.
Section 3.01. Purposes and Powers. The Corporation shall
have unlimited power to engage in, and to do any lawful act
concerning, any or all lawful businesses for which corporations
may be organized under the Iowa Business Corporation Act.
ARTICLE 4.
Section 4.01. Authorized Shares. The aggregate number of
shares which the Corporation shall authority to issue is
201,000,000 shares, consisting of 1,000,000 shares designated as
"preferred stock" or "preferred shares," with a par value of
$1.00 per share, and 200,000,000 shares designated as "common
stock" or "common shares," with a par value of $1.00 per share.
(Amended 5/12/98.)
Section 4.02. Series of Preferred Shares. Authority is
hereby vested in the Board of Directors to divide the preferred
shares into series and, within the limitations set forth in the
Iowa Business Corporation Act and in these Articles of
Incorporation, to fix and determine the relative rights and
preferences of the shares of any series so established. In order
to establish such series, the Board of Directors and the
Corporation shall comply with the procedure therefor as provided
in the Iowa Business Corporation Act. Upon such compliance, the
resolution of the Board of Directors establishing and designating
the series and fixing and determining the relative rights and
preferences thereof shall become effective and shall constitute
an amendment of these Articles of Incorporation.
Series A Junior Participating Preferred Stock (As adopted
7/7/88 and amended 8/10/98):
1. Designation and Amount. The shares of this series
shall be designated as "Series A Junior Participating
Preferred Stock" (the "Series A Preferred Stock"), and the
number of shares constituting the Series A Preferred Stock
shall be 1,000,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares
of Series A Preferred Stock to a number less than the number
of shares then outstanding plus the number of shares
reserved for issuance on the exercise of outstanding
options, rights, or warrants or on the conversion of any
outstanding securities issued by the Corporation convertible
into Series A Preferred Stock.
2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common
Stock, par value $1.00 per share (the "Common Stock"), of
the Corporation and of any other junior stock, shall be
entitled to receive, when, as, and if declared by the Board
of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of
March, June, September, and December in each year (each such
date being identified as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock. Such dividends shall be
in an amount per share (rounded to the nearest cent) equal
to the greater of (1) $1 or (2) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share
of Series A Preferred Stock. If the Corporation at any time
declares or pays any dividend on the Common Stock payable in
shares of Common Stock or effects a subdivision or
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, in each
such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such
event under clause (2) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (a) of this Section immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that,
if no dividend or distribution has been declared on the
Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1 per share on the
Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless (1) the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or (2) the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for
the payment thereof.
3. Voting Rights. Except as required by law, holders
of Series A Preferred Stock shall have no voting rights and
their consent shall not be required for taking any corporate
action.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock
outstanding have been paid in full, the Corporation shall
not:
(1) declare or pay dividends or make any other
distributions on any shares of stock ranking junior
(either as to dividends or on liquidation, dissolution,
or winding up) to the Series A Preferred Stock;
(2) declare or pay dividends or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or on liquidation,
dissolution, or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or on liquidation, dissolution,
or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem,
purchase, or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or
on liquidation, dissolution, or winding up) to the
Series A Preferred Stock; or
(4) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock or
any shares of stock ranking or a parity with the Series
A Preferred Stock except in accordance with a purchase
offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such
shares on such terms as the Board of Directors, after
consideration of the respective annual dividend rates
and other relative rights and preferences of the
respective series and classes, determines in good faith
will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (a) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such
shares shall, on cancellation, become authorized but
unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in
the Articles of Incorporation, or in any other Statement of
Resolution creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
6. Liquidation, Dissolution or Winding Up. On any
liquidation, dissolution, or winding up of the Corporation,
no distribution shall be made (a) to the holders of shares
of stock ranking junior (either as to dividends or on
liquidation, dissolution, or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock have received $100 per share,
plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date
of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of
shares of Common Stock, or (B) to the holders of shares of
stock ranking on a parity (either as to dividends or on
liquidation, dissolution, or winding up) with the Series A
Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all
such shares are entitled on such liquidation, dissolution,
or winding up. If the Corporation at any time declares or
pays any dividend on the Common Stock payable in shares of
Common Stock or effects a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, in each such case the aggregate
amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under
the proviso in clause (a) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
7. Consolidation, Merger, etc. If the Corporation
enters into any consolidation, merger, combination, or other
transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities,
cash, or any other property, each share of Series A
Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to
the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash,
or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is
changed or exchanged. If the Corporation at any time
declares or pays any dividend on the Common Stock payable in
shares of Common Stock, or effects a subdivision or
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, in each
such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the
distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
Section 4.03. Relative Rights and Preferences of Each
Series. All preferred shares shall be identical, except as to
the relative rights and preferences as to which the Iowa Business
Corporation Act permits variations between different series.
Section 4.04. Pre-Emptive Rights Denied. No holder of
shares of any class shall have any pre-emptive right to acquire,
subscribe for, or purchase any shares of any class (whether such
shares shall be authorized by these Articles of Incorporation or
authorized hereafter), treasury shares, or securities of the
Corporation. Any and all pre-emptive rights which might
otherwise exist are expressly denied.
Section 4.05. Voting Rights. The preferred shareholders
shall have no voting rights, and the vote or consent of the
preferred shareholders shall not be required with respect to any
matter, except that the preferred shareholders shall have the
right to vote on any matter as to which the Iowa Business
Corporation Act expressly requires that they be permitted to vote
notwithstanding any contrary provisions of the Articles of
Incorporation.
Cumulative voting shall not be permitted or be effective at any
meeting of shareholders.
Section 4.06. Vote Required for Action; General Rule.
Except as otherwise provided in Sections 4.07, 4.08, 4.09, and
4.10, the affirmative vote of the holders of two-thirds of the
total outstanding shares of common stock entitled to vote shall
be required and shall be sufficient to adopt any motion or
resolution or to take any action at any meeting of the
shareholders (including, without limitation, the election or
removal of Directors, any amendment to these Articles of
Incorporation, any action with respect to which the Iowa Business
Corporation Act requires the vote or concurrence of a greater or
lesser proportion of the shares, and any matter which is
submitted to a vote at a meeting of shareholders, whether or not
such submission is required by law, by action of the Board of
Directors, or by agreement).
However, notwithstanding this Section, the By-laws may provide
that action may be taken on any or all of the following matters
by the vote of a lesser proportion of the common stock, even if
less than a quorum: election or appointment of a temporary
presiding officer or a temporary secretary for a meeting of
shareholders, or adjournment or recess of a meeting of
shareholders.
Section 4.07. Majority Vote Sufficient for Certain Actions.
(a) Notwithstanding Section 4.06, the affirmative vote of
the holders of a majority of the total outstanding shares of
common stock of the Corporation entitled to vote shall be
required and shall be sufficient to take any of the following
actions or to authorize, adopt, approve, or ratify any of the
following which is submitted to a vote at a meeting of
shareholders (whether or not such submission is required by law,
by action of the Board of Directors, or by agreement):
(1) Any amendment to these Articles of Incorporation
which has been approved or recommended by the Board of Directors
of the Corporation. However, this Subsection shall not apply to
any amendment which would amend, limit, or conflict with Sections
4.06, 4.07, 4.08, 4.09, 4.10, 5.01, 5.02, or 5.03.
(2) The election of a class of Directors at any annual
meeting of the shareholders if both the following events have
occurred: (i) at the annual meeting of the shareholders in the
third preceding year, an election of such class of Directors was
held or attempted, but no Director of such class was elected at
such meeting because no candidate received the two-thirds
majority vote required by Section 4.06; (ii) the term of such
class of Directors was extended as provided in Subsection 5.03(b)
for an additional term of three years, ending when Directors are
elected at the annual meeting to which this Subsection applies.
This Subsection shall apply severally to each class of Directors
and the reduced voting requirements under this Subsection shall
apply only to the election of the particular class of Directors
referred to in this Subsection.
(3) Any other motion, resolution, or action which has
been approved or recommended by the Board of Directors of the
Corporation. However, this Subsection shall not apply to any
motion, resolution, or action regarding the election or removal
of Directors, any amendment to these Articles of Incorporation,
any Corporate Combination (as defined in Section 4.10), any
partial or complete liquidation of the Corporation, any
liquidating dividend or distribution, or any dissolution of the
Corporation.
(b) Sections 4.06 and 4.07 shall not be construed to
require that any matter or action be (1) submitted to a vote at
any meeting of the shareholders; or (2) authorized, adopted,
approved, or ratified by the shareholders, if such submission,
vote, authorization, adoption, approval, or ratification would
not be required in the absence of such Sections.
Section 4.08. Vote Required for Action When Class Voting
Required. On any matter with respect to which the preferred
shareholders have the right to vote as a class (as provided in
Section 4.05), the affirmative vote of (a) the holders of the
required majority of the total outstanding common shares entitled
to vote as provided in Section 4.06 and 4.07 (whichever would be
applicable in the absence of preferred shareholders' voting
rights), and (b) the holders of a majority of the total
outstanding preferred shares entitled to vote, and (c) the
holders of a majority of the total outstanding shares entitled to
vote, shall be required and shall be sufficient to take action,
notwithstanding any provision of the Iowa Business Corporation
Act which requires the vote or concurrence of a greater or lesser
proportion of the total outstanding shares or of the shares of
any or each class. However, on any matter with respect to which
only the only the preferred shareholders have the right to vote,
as provided in Section 4.05, the affirmative vote of the holders
of a majority of the total outstanding preferred shares entitled
to vote shall be required and shall be sufficient to take action.
Section 4.09. Vote Required for Action When Preferred
Shareholders Have Voting Rights But Class Voting Not Required.
On any matter with respect to which the preferred shareholders
have the right to vote but do not have the right to vote as a
class (as provided in Section 4.05), the affirmative vote of the
holders of two-thirds of the total outstanding shares entitled to
vote shall be required and shall be sufficient to take action,
notwithstanding any provision of the Iowa Business Corporation
Act which requires the vote or concurrence of a greater or lesser
proportion of the total outstanding shares. However, if Section
4.07 would be applicable to such matter and Section 4.06 would
not be applicable to such matter in the absence of preferred
shareholders, voting rights, the affirmative vote of the holders
of a majority of the total outstanding shares entitled to vote
shall be required and shall be sufficient to take action on such
matter.
Section 4.10. Vote Required for Action Relating to a
Corporate Combination.
(a) Notwithstanding Section 4.06, the affirmative vote of
the holders of that fraction of the total outstanding shares of
common stock of the Corporation entitled to vote, but not less
than two-thirds, determined by using as the numerator a number
equal to the sum of (1) the outstanding shares of common stock of
the Corporation entitled to vote which are owned or controlled by
a Related Person, plus (2) two-thirds of the remaining number of
outstanding shares of common stock of the Corporation entitled to
vote, and using as the denominator a number equal to the total
number of outstanding shares of common stock of the Corporation
entitled to vote, shall be required for any act of the
shareholders relating to adoption and authorization of a
Corporate Combination or any amendment of this Section 4.10.
(b) Notwithstanding Subsection 4.10(a), the affirmative
vote of two-thirds of the outstanding shares of common stock of
the Corporation entitled to vote shall be sufficient for the
adoption and authorization of a Corporate Combination when:
(1) The Corporate Combination will result in an
involuntary sale, redemption, cancellation, or other termination
of ownership of all shares of common stock of the Corporation
owned by shareholders who do not vote in favor of or consent in
writing to the Corporate Combination;
(2) The cash or fair market value (as determined in
good faith by the Board of Directors) of other readily marketable
consideration to be received by all holders of common stock for
their shares will be: (i) at least equal to the Minimum Price Per
Share, and (ii) in cash or in the same form as the Transaction
Person has previously paid for shares of common stock of the
Corporation. If the Transaction Person has paid for shares of
common stock of the Corporation with varying forms of
consideration, the form of consideration for such common stock
shall be either cash or the form used to acquire the largest
number of shares of such class of stock of the Corporation
previously acquired by it;
(3) During the period from the earlier of the date
that a person becomes a Transaction Person or a Transaction
Person becomes a Related Person until the date of consummation of
such Corporate Combination:
(i) There shall have been no failure to declare
and pay at the regular date therefor any full dividends,
whether or not cumulative, on any outstanding preferred
stock of the Corporation;
(ii) There shall have been: (a) no reduction in
the annual rate of dividends paid on the common stock of the
Corporation, except as necessary to reflect any subdivision
of such stock, and (b) all increases in such annual rate of
dividends necessary to reflect any reclassification,
including any reverse stock split, recapitalization,
reorganization, or any similar transaction which has the
effect of reducing the number of outstanding shares of the
common stock of the Corporation;
(iii) The Transaction Person shall not have become
the beneficial owner of any additional shares of stock of
the Corporation except as part of the transaction which
results in the Transaction Person's becoming a Related
Person; and
(iv) The Transaction Person shall not have
received the benefit, directly or indirectly, except
proportionately as a shareholder, of any loans, advances,
guaranties, pledges, other financial assistance, tax
credits, or tax advantages provided by the Corporation,
whether in anticipation of or in connection with such
Corporate Combination or otherwise; and
(4) A proxy statement responsive to the requirements
of the Securities Exchange Act of 1934 shall be mailed to the
shareholders of the Corporation at least 30 days prior to the
proposed consummation of a Corporate Combination (whether or not
such proxy statement is required to be mailed pursuant to such
Act or subsequent provisions) for the purpose of soliciting
shareholder approval of the proposed Corporate Combination.
(c) For all purposes under this Section 4.10:
(1) An "Affiliate" of a person is any other person
which directly or indirectly (through one or more intermediaries,
or otherwise) controls, is controlled by, or is under common
control with such person.
(2) An "Associate" of a person is any officer,
Director, partner, or employee of such person (or of an Affiliate
of such person); any person which owns ten percent or more of any
class of Equity Securities of such person (or of any Affiliate of
such person); any corporation or other person of which such
person is an officer, Director, or a partner; any corporation or
other person of which such person is the owner of ten percent or
more of any class of Equity Securities; any trust or estate in
which such person has a substantial beneficial interest or as to
which such person serves as trustee or in a fiduciary capacity;
and.any person acting under the direction of such person in
connection with the matter in question.
(3) "Control" (including "controls" and "controlled
by") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of
a person, whether through the ownership of securities, by
agreement, or otherwise.
(4) "Corporate Combination" means:
(i) Any merger or consolidation of the
Corporation or any subsidiary with (a) any Related Person
other than a subsidiary, or (b) any other corporation, other
than a Subsidiary (whether or not itself a Related Person)
which is, or after such merger or consolidation would be, an
Affiliate of a Related Person;
(ii) Any sale, lease, exchange, mortgage, pledge,
transfer, or other disposition in one transaction or a
series of transactions to or with any Transaction Person of
any assets of the Corporation or any Subsidiary having an
aggregate fair market value of $1,000,000 or more;
(iii) The issuance or transfer by the Corporation
or any Subsidiary in one transaction or a series of
transactions of any securities of the Corporation or any
Subsidiary to any Transaction Person in exchange for cash,
securities, other property, or a combination thereof, having
an aggregate fair market value of $1,000,000 or more;
(iv) The adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or
on behalf of a Related Person or any Affiliate of any
Related Person;
(v) Any reclassification of securities, including
any reverse stock split or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries, or any other
transaction (whether or not with, into, or otherwise
involving a Related Person) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of Equity Securities or
convertible securities of the Corporation or any subsidiary
which is directly or indirectly owned by any Related Person
or any Affiliate of any Related Person.
(5) "Equity Securities" means any shares of capital
stock and any securities which are convertible (with or without
consideration) into shares of capital stock or into other
securities convertible into shares of capital stock.
(6) "Owns," "owned," and "owner" mean direct or
indirect ownership, either of record or beneficial. Any person
is conclusively deemed to be the beneficial owner of any Equity
Securities (of the Corporation or any other person) if (i) such
person has the right to acquire such Equity Securities pursuant
to any agreement or upon exercise of conversion rights, warrants,
options, or otherwise; (ii) such person has the right to vote or
direct the voting of such Equity Securities (either generally or
with respect to the matter in question), whether by agreement,
arrangement, understanding, or otherwise; or (iii) such Equity
Securities are owned by the spouse, parent, child, or grandchild
of such person.
(7) "Minimum Price Per Share" means the amount of cash
or fair market value of other readily marketable consideration to
be received by shareholders in a Corporate Combination which
amount is at least equal to the highest gross price per share
(including brokerage commissions, transfer taxes, and soliciting
dealers, fees) paid or agreed to be paid to acquire any shares of
common stock of the Corporation by any Related Person, provided
such payment or agreement to make payment was made within two
years immediately prior to the record date set to determine the
shareholders entitled to vote or consent to the Corporate
Combination in question.
(8) "Person" means any corporation, partnership,
association, trust, fiduciary, individual, or other entity.
(9) "Related Person" means any person which, together
with its Affiliates, its Associates, and the Associates of its
Affiliates, owns ten percent or more of the outstanding common
stock of the Corporation.
(10)"Subsidiary" means a corporation of which a
majority of any class of Equity Securities is owned directly or
indirectly by the Corporation.
(11)"Transaction Person" means:
(i) Any person who would become a Related Person
as the result of any proposed Corporate Combination;
(ii) Any Related Person that proposes, initiates,
or facilitates any Corporate Combination;
(iii)Any Affiliate, Associate, or Associate of an
Affiliate of a person described in (i) or (ii) of this
Subparagraph (11).
(d) When evaluating any offer to make a tender or exchange
offer for any Equity Securities of the Corporation or any offer
to effect any Corporate Combination, it is appropriate for the
Board of Directors, in the exercise of its judgment in
determining what is in the best near-term and long-range
interests of the shareholders of the Corporation, to give
consideration to all relevant factors, including, without
limitation, the economic and social effects on the employees,
customers, and other constituents of the Corporation and its
subsidiaries and on the communities in which the Corporation and
its subsidiaries operate or are located.
ARTICLE 5.
Section 5.01. Directors: Number, Terms, Classification.
The number of Directors shall be fixed by the By-laws. The
Directors shall be divided into three classes, each of which
shall be as nearly equal in number as possible. The term of
office of one class shall expire in each year. At each annual
meeting of the shareholders, a number of Directors equal to the
number of the class whose term expires at the annual meeting
shall be elected for a term ending when Directors are elected at
the third succeeding annual meeting. This Section is subject to
Section 5.03.
Section 5.02. Removal of Directors. At any meeting of
shareholders, it the notice of the meeting includes a statement
to the effect that the purpose or one of the purposes for which
the meeting is called is to remove one or more named Directors,
the common shareholders may remove any or all of such named
Directors, with or without cause, by the affirmative vote of the
holders of two-thirds of the total outstanding common shares
entitled to vote. At such meeting, the common shareholders may
elect a new Director or Directors to fill the vacancy or
vacancies in the Board of Directors caused by such removal; but
any such vacancy or vacancies not so filled by the common
shareholders shall be filled as provided by law or the By-laws.
Section 5.03. Failure to Elect Directors.
(a) Failure in any one or more years to elect one or more
Directors or to elect any class of Directors shall not: (1) end
the term of any Director or class of Directors (except as
otherwise provided in Subsection 5.03(c)); (2) cause any vacancy
or vacancies in the Board of Directors (except as otherwise
provided in Subsection S.03(c)); (3) constitute a reason for
liquidation of the Corporation or its assets or business; or (4)
affect the existence or powers of (or the validity of any act of)
the Corporation or the Board of Directors.
(b) This Subsection shall apply if and whenever an entire
class of Directors is not elected in the year when the election
should have taken place. The term of each Director of the class
whose term would have expired at the annual meeting of the
shareholders if Directors of such class had been elected, shall
be extended for an additional term of three years, ending when
Directors are elected at the third succeeding annual meeting.
(c) This Subsection shall apply if and whenever one or more
Directors are elected at an annual meeting of the shareholders,
but the number of Directors elected is less than the number of
the class of Directors which should be elected at such annual
meeting. The term of each Director of such class shall end when
one or more Directors are elected at such annual meeting. The
remaining Directorship or Directorships not filled by election at
such annual meeting shall be vacant. The vacancy or vacancies
shall be filled by the affirmative vote of a majority of the
Directors in office after such annual meeting, even if less than
a quorum.
Each Director elected to fill such a vacancy shall be elected for
the full term of such class of Directors.
Section 5.04. Limitation of Director's Personal Liability.
No person who is or was a Director of the Corporation or who,
while a Director of the Corporation, is or was serving at the
request of the Corporation as a Director, officer, partner,
trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise,
or employee benefit plan (including such person's heirs and
personal representatives) shall be personally liable to the
Corporation or to its shareholders for monetary damages for
breach of fiduciary duty as a Director, provided that any such
person's liability shall not be eliminated or limited for:
(a) A breach of the Director's duty of loyalty to the
Corporation or its shareholders;
(b) Acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of the
law;
(c) A transaction from which the Director derives an
improper personal benefit; or
(d) An improper act prohibited in Iowa Code Section
496A.44, as amended from time to time.
No amendment to or repeal of this Section shall apply to or have
any effect on the liability or alleged liability of any person
for or with respect to any acts or omissions of such person
occurring prior to such amendment or repeal. (Adopted 5/3/88.)
ARTICLE 6.
Section 6.01. By-laws. The power to amend the By-laws is
vested in the Board of Directors. Wherever used in these
Articles of Incorporation with respect to the By-laws, the word
"amendment" or "amend" includes and shall apply to the amendment,
alteration, or repeal of any or all provisions of the By-laws or
the adoption of new By-laws.
Section 6.02. Effect of Articles of Incorporation and By-
laws. Each shareholder, by the act of becoming or remaining a
shareholder of the Corporation, shall be deemed to have accepted
and agreed to all provisions of these Articles of Incorporation
and the By-laws, as amended from time to time. All provisions of
the By-laws which (or the substance of which) at any time shall
have been adopted, approved, or ratified by the affirmative vote
of the holders of a majority of the outstanding common shares
entitled to vote shall have the same force and effect as if such
provisions were included in full in these Articles of
Incorporation. No such provision of the By-laws shall be
construed as having any lesser force or effect by reason of being
included in the By-laws rather than in the Articles of
Incorporation. This Section shall not be construed to require
that any provision or amendment of the By-laws be adopted,
approved, or ratified by the shareholders. Any shareholder,
regardless of the period of time during which he has been a
shareholder, shall have the right to examine the By-laws of the
Corporation in person or by agent or attorney at any reasonable
time or times and to make extracts therefrom. Upon the written
request of any shareholder, the Corporation shall mail to such
shareholder within a reasonable time a copy of the By-laws.
Section 6.03. Amendment of Articles of Incorporation. The
Corporation and the shareholders expressly reserve the right from
time to time to amend these Articles of Incorporation, in the
manner now or hereafter permitted by the Iowa Business
Corporation Act or other applicable law, whether or not such
amendment shall constitute or result in a fundamental change in
the purposes or structure of the Corporation or in the rights or
privileges of shareholders or others or in any or all of the
foregoing. All rights and privileges of shareholders or others
shall be subject to this reservation. Wherever used in these
Articles of Incorporation with respect to the Articles of
Incorporation, the word "amendment" or "amend" includes and shall
apply to the amendment, alteration, or repeal of any or all
provisions of the Articles of Incorporation or the adoption of
new or restated Articles of Incorporation.
Exhibit 3(ii)
BY-LAWS
OF
HON INDUSTRIES Inc.
Adopted on September 7, 1960. Amended on
April 23, 1964, April 28, 1966, August 13, 1969,
April 15, 1970, February 12, 1976, July 23, 1976,
January 11, 1977, February 13, 1977, April 18, 1977,
July 28, 1977, July 29, 1977, October 27, 1977,
February 27, 1978, February 19, 1979, August 1, 1979,
March 3, 1980, April 30, 1980, October 29, 1980,
August 3, 1982, January 31, 1983, October 31, 1983,
October 30, 1984, February 5, 1985, May 6, 1985,
February 4, 1986, August 5, 1986, February 15, 1988,
July 7, 1988, March 13, 1990, February 11, 1991,
April 29, 1991, July 29, 1991, May 5, 1992, November 2,
1992, May 11, 1993, February 14, 1994, May 10, 1994,
November 13, 1995, May 14, 1996, May 12, 1997, March 4,
1998 and July 29, 1998.
ARTICLE 1. OFFICES AND PLACES OF BUSINESS
Section 1.01. Principal Place of Business. The principal
place of business of the Corporation shall be located in such
place, within or without the State of Iowa, as shall be fixed by
or pursuant to authority granted by the Board of Directors from
time to time.
Section 1.02. Registered Office. The registered office of
the Corporation required by the Iowa Business Corporation Act to
be maintained in the State of Iowa may be, but need not be, the
same as its principal place of business. The registered office
may be changed from time to time by the Board of Directors as
provided by law.
Section 1.03. Other Places. The Corporation may conduct
its business, carry on its operations, have offices, carry out
any or all of its purposes, and exercise any or all of its powers
anywhere in the world, within or without the State of Iowa
ARTICLE 2. SHAREHOLDERS
Section 2.01. Annual Meeting. The annual meeting of the
shareholders shall be held in each year at such time and place as
shall be fixed by the Board of Directors or by the Chairman of
the Board of Directors; provided, however, that the annual
meeting shall not be scheduled on a legal holiday in the state
where held. Any previously scheduled annual meeting may be
postponed by resolution of the Board of Directors and on public
notice given prior to the date previously scheduled for such
annual meeting. At the annual meeting, the shareholders shall
elect Directors as provided in Section 3.02 and may conduct any
other business properly brought before the meeting. (As amended
4/23/64, 8/1/79, 10/31/83, and 4/29/91.)
Section 2.02. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, may be called, and the
time and place thereof fixed by the Board of Directors or by the
holders of not less than one-tenth of the outstanding shares
entitled to vote at the meeting. Business conducted at any
special meeting of shareholders shall be limited to the purposes
stated in the notice of the meeting. Any previously scheduled
special meeting of shareholders may be postponed by resolution of
the Board of Directors and public notice given prior to the date
previously scheduled for such special meeting of shareholders.
(As amended 4/23/64, 8/1/79, and 4/29/91.)
Section 2.03. Place of Shareholders' Meetings. Any annual
meeting or special meeting of shareholders may be held at any
place, either within or without the State of Iowa. The place of
each meeting of shareholders shall be fixed as provided in these
By-laws, or by a waiver or waivers of notice fixing the place of
such meeting and signed by all shareholders entitled to vote at
such meeting. If no designation is made of the place of a
meeting of shareholders, the place of meeting shall be the
registered office of the Corporation in the State
of Iowa.
Section 2.04. Notice of Shareholders' Meetings. Written or
printed notice stating the place, day, and hour of the meeting
and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten
days (unless a longer period shall be required by law) nor more
than sixty days before the date of the meeting, either personally
or by mail, by or at the direction of the President, the
Secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder
at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid. (As amended 4/29/91.)
Section 2.05. Closing of Transfer Books; Fixing of Record
Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case,
seventy days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or
to vote at a meeting of shareholders, such books shall be closed
for at least fifteen days immediately preceding such meeting. In
lieu of closing the stock transfer books, the Board of Directors
may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not
more than seventy days and, in case of a meeting of shareholders,
not less than fifteen days prior to the date on which the
particular action, requiring such determination of shareholders,
is to be taken. If the Board of Directors does not provide that
the stock transfer books shall be closed and does not fix a
record date for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, or share-
holders entitled to receive payment of a dividend, the record
date for such determination of shareholders shall be seventy days
prior to the date fixed for such meeting or seventy days prior to
the date of payment of such dividend, as the case may be. When
any record date is fixed for any determination of shareholders
such determination of shareholders shall be made as of the close
of business on the record date. When a determination of
shareholders entitled to vote at any meeting of shareholders has
been made as provided in this Section, such determination shall
apply to any adjournment thereof. (As amended 4/30/80, 8/3/82
and 4/29/91.)
Section 2.06. Voting List. The officer or agent having
charge of the stock transfer books for shares of the Corporation
shall make, at least ten days before each meeting of
shareholders, a complete list of the shareholders entitled to
vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares
held by each, which list, for a period of ten days prior to such
meeting shall be kept on file at the registered office of the
Corporation and shall be subject to inspection by any shareholder
at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the
whole time of the meeting. The original stock transfer books
shall be prima facie evidence as to who are the shareholders
entitled to examine such list or transfer books or to vote at any
meeting of shareholders. Failure to comply with the requirements
of this Section shall not affect the validity of any action taken
at such meeting. (As amended 4/29/91.)
Section 2.07. Quorum of Shareholders. Except as otherwise
expressly provided by the Articles of Incorporation or these
By-laws, a majority of the outstanding common shares entitled to
vote, represented in person or by proxy, shall constitute a
quorum at any meeting of shareholders.
Section 2.08. Adjourned Meetings. Any meeting of
shareholders may be adjourned from time to time and to any place,
without further notice, by the chairman of the meeting or by the
affirmative vote of the holders of a majority of the outstanding
common shares entitled to vote and represented at the meeting,
even if less than a quorum. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified.
(As amended 4/29/91.)
Section 2.09. Vote Required for Action. The vote required
for the adoption of any motion or resolution or the taking of any
action at any meeting of shareholders shall be as provided in the
Articles of Incorporation. However, action may be taken on the
following procedural matters by the affirmative vote of the
holders of a majority of the outstanding common shares entitled
to vote and represented at the meeting, even if less than a
quorum: election or appointment of a Chairman or temporary
Secretary of the meeting (if necessary), or adoption of any
motion to adjourn or recess the meeting or any proper amendment
of any such motion. Whenever the minutes of any meeting of
shareholders shall state that any motion or resolution was
adopted or that any action was taken at such meeting of
shareholders, such minutes shall be prima facie evidence that
such motion or resolution was duly adopted or that such action
was duly taken by the required vote, and such minutes need not
state the number of shares voted for and against such motion,
resolution, or action.
Section 2.10. Proxies. At all meetings of shareholders, a
shareholder entitled to vote may vote either in person or by
proxy executed in writing by the shareholder or by his duly
authorized attorney in fact. Each such proxy shall be filed with
the Secretary of the Corporation or the person acting as
Secretary of the meeting, before or during the meeting. No proxy
shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
Section 2.11. Shareholders' Voting Rights. Each
outstanding share entitled to vote shall be entitled to one vote
on each matter submitted to a vote at a meeting of shareholders,
except as otherwise provided in the Articles of Incorporation.
Voting rights for the election of Directors shall be as provided
in Section 3.02 and in the Articles of Incorporation. (As
amended 2/12/76.)
Section 2.12. Voting of Shares by Certain Holders. Shares
standing in the name of another corporation, domestic or foreign,
may be voted by such officer, agent, or proxy as the By-laws of
such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such corporation may
determine.
Shares held by an administrator, executor, guardian, or
conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person or
by proxy, but no trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into
his name if authority to do so be contained in an appropriate
order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name
of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares so transferred.
Treasury shares shall not be voted at any meeting or counted in
determining the total number of outstanding shares at any given
time.
Section 2.13. Organization. The Chairman of the Board of
Directors or the Vice-Chairman or the President or a
Vice-President, as provided in these By-laws, shall preside at
each meeting of shareholders; but if the Chairman of the Board of
Directors, the Vice-Chairman, the President, and each
Vice-President shall be absent or refuse to act, the shareholders
may elect or appoint a Chairman to preside at the meeting. The
Secretary or an Assistant Secretary, as provided in these
By-laws, shall act as Secretary of each meeting of shareholders;
but if the Secretary and each Assistant Secretary shall be absent
or refuse to act, the shareholders may elect or appoint a
temporary Secretary to act as Secretary of the meeting.
(As amended 4/23/64 and 8/1/79.)
Section 2.14. Waiver of Notice by Shareholders. Whenever
any notice whatsoever is required to be given to any shareholder
of the Corporation under any provision of law or the Articles of
Incorporation or these By-laws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether
signed before or after the time of the meeting or event of which
notice is required, shall be deemed equivalent to the giving of
such notice. Neither the business to be conducted at, nor the
purpose of, any annual or special meeting of shareholders need be
specified in any waiver of notice of such meeting. The
attendance of any shareholder, in person or by proxy, at any
meeting of shareholders shall constitute a waiver by such
shareholder of any notice of such meeting to which such
shareholder would otherwise be entitled, and shall constitute
consent by such shareholder to the place, day, and hour of such
meeting and all business which may be conducted at such meeting,
unless such shareholder attends such meeting and objects at such
meeting to any business conducted because the meeting is not
lawfully called or convened. (As amended 4/29/91.)
Section 2.15. Postponement of Shareholders' Meetings. Any
meeting of the shareholders may be postponed prior to the record
date by the Board of Directors or by the Chairman. Written or
printed notice of the postponement shall be delivered not less
than 10 days nor more than 60 days before the date set for the
meeting, either personally or by mail to each shareholder of
record entitled to vote. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail,
addressed to the shareholder at his or her address as it appears
on the stock transfer books of the Corporation, with postage
thereon prepaid. (As adopted 2/11/91.)
Section 2.16. Notice of Shareholder Business and
Nominations.
(a) Annual Meeting of Shareholders.
(1) 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 of shareholders (i) pursuant to the Corporation's notice
of meeting, (ii) by or at the direction of the Board of
Directors, or (iii) by any shareholder of the Corporation who was
a shareholder of record at the time of giving of notice provided
for in this By-law, who is entitled to vote at the meeting and
who complies with the notice procedures set forth in this By-law.
(2) For nominations or other business to be properly
brought before an annual meeting by a shareholder pursuant to
Subsection 2.15(a)(1)(iii), 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
delivered to the Secretary at the principal executive offices of
the Corporation not less than sixty days nor more than ninety
days prior to the first anniversary of the preceding year's
annual meeting of shareholders; provided, however, that, if the
date of the annual meeting is advanced by more than thirty days
or delayed by more than sixty days from such anniversary date,
notice by the shareholder, to be timely, must be so delivered not
earlier than ninety days prior to such annual meeting and not
later than the close of business on the later of the sixtieth day
prior to such annual meeting or the tenth day following the date
on which public announcement of the date of such meeting is first
made. Such shareholder's notice shall set forth:
(i) as to each person whom the shareholder
proposes to nominate for election or reelection as a Director,
all information relating to such person that is required to be
disclosed in solicitations of proxies for election of Directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including such person's written consent to being
named in the proxy statement as a nominee and to serving as a
Director if elected;
(ii) as to any other business that the
shareholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting,
and any material interest of such shareholder in such business
and the beneficial owner, if any, on whose behalf the proposal is
made; and
(iii) as to the shareholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or
proposal is made, the name and address of such shareholder and of
such beneficial owner as they appear on the Corporation's books,
and the class and number of shares of the Corporation which are
owned beneficially and of record by such shareholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of
Subsection 2.15(a)(2) to the contrary, if the number of Directors
to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement by the Corporation
naming all the nominees for Director or specifying the size of
the increased Board of Directors at least seventy days prior to
the first anniversary of the preceding year's annual meeting of
shareholders, a shareholder's notice required by this By-law
shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it is
delivered to the Secretary at the principal executive offices of
the Corporation not later than the close of business on the tenth
day following the date on which such public announcement is first
made by the Corporation.
(b) Special Meetings of Shareholders. Nominations of
persons for election to the Board of Directors may be made at a
special meeting of shareholders at which Directors are to be
elected pursuant to the Corporation's notice of meeting (1) by or
at the direction of the Board of Directors or (2) by any
shareholder of the Corporation who was a shareholder of record at
the time of giving of notice provided for in this By-law, who is
entitled to vote at the meeting, and who complies with the notice
procedures set forth in this By-law. Nominations by shareholders
of persons for election to the Board of Directors may be made at
such a special meeting of shareholders if the shareholder's
notice required by Subsection 2.15(a)(2) is delivered to the
Secretary at the principal executive offices of the Corporation
no earlier than ninety days prior to such special meeting and not
later than the close of business on the later of the sixtieth day
prior to such special meeting or the tenth day following the date
on which public announcement is first made of the date of the
special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting.
(c) General.
(1) Only persons who are nominated in accordance with
the procedures set forth in this By-law shall be eligible to
serve as Directors, and only such business shall be conducted at
a meeting of shareholders as shall have been brought before the
meeting in accordance with the procedures set forth in these By-
laws. Except as otherwise provided by law, the Articles of
Incorporation, or the By-laws of the Corporation, 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
these By-laws and, if any proposed nomination or business is not
in compliance with these By-laws, to declare that such defective
proposal or nomination shall be disregarded.
(2) For purposes of this By-law, "public announcement"
means 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.
(3) Notwithstanding the foregoing provisions of this
By-law, 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 By-law.
Nothing in this By-law shall be deemed to affect any rights of
shareholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act. (As adopted 4/19/91.
ARTICLE 3. BOARD OF DIRECTORS
Section 3.01. General Powers. The business and affairs of
the Corporation shall be managed by its Board of Directors. The
Board of Directors may exercise all such powers of the
Corporation and may do all such lawful acts and things as are not
by law or the Articles of Incorporation or these By-laws
expressly required to be exercised or done by the shareholders.
Section 3.02. Election of Directors. Subject to the
Articles of Incorporation, the common shareholders shall elect
one class of Directors at each annual meeting of shareholders.
At each election of Directors, each common shareholder entitled
to vote shall have the right to vote, in person or by proxy, the
number of common shares owned by him and entitled to vote, for as
many persons as the number of the class to be elected.
Cumulative voting shall not be permitted. The election of
Directors may be conducted by written ballot, but need not be
conducted by written ballot unless required by a rule or motion
adopted by the shareholders. (As amended 2/12/76.)
Section 3.03. Number, Terms, Classification, and
Qualifications. Subject to the Articles of Incorporation:
(a) The number of Directors shall be eleven. (As
amended 10/29/80, 1/31/83, 2/5/85, 8/5/86, 3/13/90, 5/5/92,
11/2/92, 5/11/93, 2/14/94, 5/10/94, 11/13/95, 5/14/96, 3/4/98 and
7/29/98.)
(b) The Directors shall be divided into three classes,
each of which shall be as nearly equal in number as possible.
The term of office of one class shall expire in each year. At
each annual meeting of the shareholders a number of Directors
equal to the number of the class whose term expires at the annual
meeting shall be elected for a term ending when Directors are
elected at the third succeeding annual meeting. Section 6.03 of
the Articles of Incorporation shall apply if there is a failure
in any one or more years to elect one or more Directors or to
elect any class of Directors. (As Amended 2/4/86.)
(c) The number of Directors may be increased or
decreased from time to time by amendment of this Section, but no
decrease shall have the effect of shortening the term of any
incumbent Director. Any new Directorships shall be assigned to
classes, and any decrease in the number of Directors shall be
scheduled, in such a manner that the three classes of Directors
shall be as nearly equal in number as possible.
(d) The term of each Director shall begin at the time
of his election. Unless sooner removed as provided in the
Articles of Incorporation or elected to fill a vacancy with a
shorter unexpired term pursuant to Section 3.04, each Director
shall serve for a term ending when Directors are elected at the
third succeeding annual meeting of shareholders.
However, any Director may resign at any time by delivering his
written resignation to the Chairman, Vice-Chairman, President, or
Secretary of the Corporation. The resignation shall take effect
immediately upon delivery, unless it states a later effective
date. (As amended 8/1/79.)
(e) Directors need not be residents of the State of
Iowa or shareholders of the Corporation.
(As amended 4/23/64, 4/15/70, 2/12/76, 7/23/76, 1/11/77, 4/18/77,
7/28/77, 7/29/77, 2/27/78, and 2/4/86.)
Section 3.04. Vacancies in Board. Any vacancy occurring in
the Board of Directors for any reason, and any Directorship to be
filled by reason of an increase in the number of Directors, may
be filled by the affirmative vote of a majority of the Directors
then in office even if less than a quorum (notwithstanding
Sections 3.09 and 3.11). Except as otherwise provided in Section
6.03 of the Articles of Incorporation, a Director elected as
provided in this Section shall be elected for the unexpired term
of his predecessor in office or the unexpired term of the class
of Directors to which his new Directorship is assigned. However,
if a Director is elected to fill a vacancy caused by the
resignation of a predecessor whose resignation has not yet become
effective, the new Director's term shall begin when his
predecessor's resignation becomes effective. (As amended 4/23/64
and 2/12/76.)
Section 3.05. Regular Meetings. A regular meeting of the
Board of Directors may be held without notice other than this
Section, promptly after and at the same place as each annual
meeting of shareholders. Other regular meetings of the Board of
Directors may be held at such time and at such places as shall be
fixed by (or pursuant to authority granted by) resolution or
motion adopted by the Board of Directors from time to time,
without notice other than such resolution or motion. However,
unless both the time and place of a regular meeting shall
be fixed by the Board of Directors, notice of such meeting shall
be given as provided in Section 3.08.
Section 3.06. Special Meetings. Special meetings of the
Board of Directors may be called, and the time and place thereof
fixed, by the Chairman of the Board of Directors or the
Vice-Chairman or the President or the Secretary or by a majority
of the Directors then in office. (As amended 4/23/64 and
8/1/79.)
Section 3.07. Place of Meetings. Any regular meeting or
special meeting of the Board of Directors may be held at any
place, either within or without the State of Iowa. The place of
each meeting of the Board of Directors shall be fixed as provided
in these By-laws, or by waiver or waivers of notice fixing the
place of such meeting and signed by all Directors then in office.
If no designation is made of the place of a meeting of the Board
of Directors, the place of meeting shall be the registered office
of the Corporation in the State of Iowa.
Section 3.08. Notice of Special Meetings. Written or
printed notice stating the place, day, and hour of a special
meeting of the Board of Directors shall be delivered before the
time of the meeting, either personally or by mail or by telegram,
by or at the direction of the President, the Secretary, or the
officer or persons calling the meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United
States mail addressed to the Director at his address as it
appears on the records of the Corporation, with postage thereon
prepaid. If given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph
company, addressed to the Director at his address as it appears
on the records of the Corporation. Neither the business to be
transacted at, nor the purpose of, any meeting of the Board of
Directors need be specified in the notice of such meeting. (As
amended 7/7/88.)
Section 3.09. Quorum. Except as otherwise expressly
provided by the Articles of Incorporation or these By-laws, a
majority of the number of Directors fixed by these By-laws shall
constitute a quorum at any meeting of the Board of Directors.
Section 3.10. Adjourned Meetings. Any meeting of the Board
of Directors may be adjourned from time to time and to any place,
without further notice, by the affirmative vote of a majority of
the Directors present at the meeting, even if less than a quorum.
At any adjourned meeting at which a quorum shall be present, any
business may be conducted which might have been transacted at the
meeting as originally notified. (As amended 4/29/91.)
Section 3.11. Vote Required for Action. Except as
otherwise provided in these By-laws, the affirmative vote of a
majority of the number of Directors fixed by these By-laws shall
be required for and shall be sufficient for the adoption of any
motion or resolution or the taking of any action at any meeting
of the Board of Directors. However, the following actions may be
taken by the affirmative vote of a majority of the Directors
present at the meeting, even if less than a quorum: election or
appointment of a Chairman or temporary Secretary of the meeting
(if necessary), or adoption of any motion to adjourn or
recess the meeting or any proper amendment of any such motion.
Whenever the minutes of any meeting of the Board of Directors
shall state that any motion or resolution was adopted or that any
action was taken at such meeting of the Board of Directors, such
minutes shall be prima facie evidence that such motion or
resolution was duly adopted or that such action was duly taken by
the required vote, and such minutes need not state the number of
Directors voting for and against such motion, resolution, or
action.
Section 3.12. Voting. Each Director (including, without
limiting the generality of the foregoing, any Director who is
also an officer of the Corporation and any Director presiding at
a meeting) may vote on any question at any meeting of the Board
of Directors, except as otherwise expressly provided in these
By-laws. (As amended 4/23/64.)
Section 3.13. Organization. The Chairman of the Board of
Directors or the Vice-Chairman or the President or a
Vice-President, as provided in these By-laws, shall preside at
each meeting of the Board of Directors; but if the Chairman of
the Board of Directors, the Vice-Chairman, the President, and
each Vice-President shall be absent or refuse to act, the Board
of Directors may elect or appoint a Chairman to preside at the
meeting. The Secretary or an Assistant Secretary, as provided in
these By-laws, shall act as Secretary of each meeting of the
Board of Directors; but if the Secretary and each Assistant
Secretary shall be absent or refuse to act, the Board of
Directors may elect or appoint a temporary Secretary to act as
Secretary of the meeting. (As amended 4/23/64 and 8/1/79.)
Section 3.14. Rules and Order of Business. The Board of
Directors may adopt such rules and regulations, not inconsistent
with applicable law or the Articles of Incorporation or these
By-laws, as the Board of Directors deems advisable for the
conduct of its meetings. Except as otherwise expressly required
by law or the Articles of Incorporation or these By-laws or such
rules or regulations, meetings of the Board of Directors shall be
conducted in accordance with Robert's Rules of Order, Revised (as
further revised from time to time). Unless otherwise
determined by the Board of Directors, the order of business at
the first meeting of the Board of Directors held after each
annual meeting of shareholders, and at other meetings of the
Board of Directors to the extent applicable, shall be as follows:
(1) Roll call or other determination of attendance and
quorum.
(2) Proof of notice of meeting.
(3) Reading and action upon minutes of preceding
meeting and any other unapproved minutes.
(4) Report of President.
(5) Reports of other officers and committees.
(6) Election of officers.
(7) Unfinished business.
(8) New business.
(9) Adjournment.
Failure to comply with the requirements of this Section shall not
affect the validity of any action taken at any meeting unless (a)
specific and timely objection is made at the meeting and (b) the
person complaining thereto sustains direct and material damage by
reason of such failure.
Section 3.15. Presumption of Assent. A Director of the
Corporation who is present at a meeting of the Board of Directors
or a committee thereof at which action on any corporate matter is
taken, shall be presumed to have assented to the action taken
unless 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
or certified 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.
Section 3.16. Waiver of Notice by Directors. Whenever any
notice whatsoever is required to be given to any Director of the
Corporation under any provision of law or the Articles of
Incorporation or these By-laws, a waiver thereof in writing
signed by the Director or Directors entitled to such notice,
whether signed before or after the time of the meeting or event
of which notice is required, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at,
nor the purpose of, any meeting of the Board of Directors need be
specified in any waiver of notice of such meeting. The
attendance of any Director at any meeting of the Board of
Directors shall constitute a waiver by such Director of any
notice of such meeting to which such Director would otherwise be
entitled, and shall constitute consent by such Director to the
place, day, and hour of such meeting and all business which may
be conducted at such meeting, unless such Director attends such
meeting and objects at such meeting to any business conducted
because the meeting is not lawfully called or convened. (As
amended 4/29/91.)
Section 3.17. Informal Action by Directors. Any action
required by law or the Articles of Incorporation or these By-laws
to be taken by vote of or at a meeting of the Board of Directors,
or any action which may or could be taken at a meeting of the
Board of Directors (or of a committee of Directors), 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 (or all of the members of such committee, as the case may
be). Such consent shall have the same force and effect as
unanimous vote. The signing by each such Director (or by each
member of such committee) of any one of several duplicate
originals or copies of the instrument evidencing such consent
shall be sufficient. The written instrument or instruments
evidencing such consent shall be filed with the Secretary, and
shall be kept by the Secretary as part of the minutes of the
Corporation. Such action shall be deemed taken on the date of
such written instrument or instruments as stated therein, or on
the date of such filing with the Secretary, whichever of such two
dates occurs first. (As amended 4/23/64.)
Section 3.18. Committees. The Board of Directors, by
resolution adopted by the affirmative vote of a majority of the
number of Directors fixed by Section 3.03, may designate one or
more committees (including, without limiting the generality of
the foregoing, an Executive Committee). Each committee shall
consist of two or more Directors elected or appointed by the
Board of Directors. To the extent provided in such resolution as
initially adopted and as thereafter supplemented or amended by
further resolution adopted by a like vote, any such committee
shall have and may exercise, when the Board of Directors is not
in session, all the authority and powers of the Board of
Directors. However, no committee shall have or exercise any
authority prohibited by law.
No member of any committee shall continue to be a member thereof
after he ceases to be a Director of the Corporation.
Unless otherwise ordered by the Board of Directors, the
affirmative vote or consent in writing of all members of a
committee shall be required for the adoption of any motion or
resolution or the taking of any action by any such committee,
except that an alternate member may take the place of any absent
member to the extent hereinafter provided.
The Board of Directors may elect or appoint one or more Directors
as alternate members of any such committee. Any such alternate
member may take the place of any absent member, upon request by
the Chairman of the Board of Directors or the Vice-Chairman or
the President or the Chairman of such committee. The vote or
consent in writing of such alternate member in the absence of
such member shall have the same effect as the vote or consent in
writing of such member. (As amended 8/1/79.)
The Board of Directors may at any time increase or decrease the
number of members of any committee, fill vacancies therein,
remove any member thereof, adopt rules and regulations therefor,
or change the functions or terminate the existence thereof. The
designation of any committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors or
any Director of any responsibility imposed by law. (As amended
4/23/64.)
Section 3.19. Compensation. The Board of Directors may fix
or provide for reasonable compensation of any or all Directors
for services rendered to the Corporation as Directors, officers,
or otherwise, including, without limiting the generality of the
foregoing, payment of expenses of attendance at meetings of the
Board of Directors or committees, payment of a fixed sum for
attendance at each meeting of the Board of Directors or a
committee, salaries, bonuses, pensions, pension plans, pension
trusts, profit-sharing plans, stock bonus plans, stock option
plans (subject to approval of the shareholders if required by
law), and other incentive, insurance, and welfare plans, whether
or not on account of prior services rendered to the Corporation.
No such compensation shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation
therefor.
ARTICLE 4. OFFICERS
Section 4.01. Number and Designation. The officers of the
Corporation shall be a Chairman of the Board of Directors, a
Vice-Chairman, a President, one or more Vice-Presidents, a
Secretary, a Treasurer, one or more Assistant Secretaries, one or
more Assistant Treasurers, and such other officers as the Board
of Directors deems advisable. (As amended 4/23/64 and 8/1/79.)
Section 4.02. Election or Appointment of Officers. At the
first meeting of the Board of Directors held after each annual
meeting of shareholders, the Board of Directors shall elect the
officers specifically referred to in Section 4.01, shall appoint
certified public accountants to perform the annual audit, and
shall elect or appoint such other officers and agents as the
Board deems advisable. If in any year the election of officers
does not take place at such meeting, such election shall be held
as soon thereafter as may be convenient. In addition, the Board
of Directors may from time to time elect, appoint, or authorize
any officer to appoint such other officers and agents as the
Board deems advisable. Any election may be conducted by ballot,
but need not be conducted by ballot unless required by a rule,
regulation, or motion adopted by the Board of Directors. (As
amended 3/3/80.)
Section 4.03. Tenure and Qualifications. Each officer,
unless sooner removed as provided in Section 4.04, shall hold
office until his successor shall be elected or appointed and
shall qualify. However, any officer may resign at any time by
filing his written resignation with the President or Secretary of
the Corporation; and such resignation shall take effect
immediately upon such filing, unless a later effective date is
stated therein. Officers need not be residents of the
State of Iowa or Directors or shareholders of the Corporation.
Any two or more offices may be held by the same person.
Section 4.04. Removal. Any officer or agent of the
Corporation 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 of an officer or agent shall not of itself create
contract rights.
Section 4.05. Vacancies. Any vacancy occurring in any
office for any reason may be filled by the Board of of Directors.
Section 4.06. Duties and Powers of Officers. Except as
otherwise expressly provided by law or the Articles of
Incorporation or these By-laws, the duties and powers of all
officers and agents of the Corporation shall be determined and
defined from time to time by the Board of Directors. Unless
otherwise determined by the Board of Directors, the officers
referred to in the following Sections shall have the duties and
powers set forth in the following Sections, in addition to all
duties and powers of such officers prescribed by law or by the
Articles of Incorporation or other provisions of these By-laws.
However, the Board of Directors may from time to time alter, add
to, limit, transfer to another officer or agent, or abolish any
or all of the duties and powers of any officer or agent of the
Corporation (including, without limiting the generality of the
foregoing, the duties and powers set forth in the following
Sections and in other provisions of these By-laws). Any person
who holds two or more offices at the same time may perform or
exercise any or all of the duties and powers of either or both of
such offices in either or both of such capacities.
Section 4.07. Chairman of the Board of Directors; Vice-
Chairman; President.
(a) The Chairman of the Board of Directors shall
preside at all meetings of shareholders and of the Board of
Directors. He shall be responsible for making recommendations
concerning Board policies and committees, shall maintain Board
liaison with the President, and, when required, because of the
inability of the President to act or otherwise, shall have the
same powers as the President on behalf of the Corporation. He
may from time to time, unless otherwise ordered by the Board,
authorize or direct the Vice-Chairman or President to perform any
of the duties or exercise any of the powers of the Chairman. (As
amended 10/27/77, 10/30/84, 2/15/88, and 7/29/91.)
(b) The Vice-Chairman shall preside at meetings of the
shareholders or of the Board in the absence of the Chairman. He
shall also perform such other duties as the Chairman may autho-
rize or direct. (As amended 7/29/91.)
(c) The President shall be the chief executive officer
of the Corporation and, subject to the control of the Board,
shall supervise, control, and manage all of the business affairs
of the Corporation. He shall report to the Chairman when the
Board is not in session. In the absence of the Chairman and
Vice-Chairman, the President shall preside at meetings of share-
holders and of the Board. Unless otherwise ordered by the Board,
the President (1) may employ, appoint and discharge such employ-
ees, agents, attorneys and accountants (except the certified
public accountants appointed by the Board pursuant to Section
4.02) for the Corporation as he deems necessary or advisable, and
shall prescribe their authority, duties, powers, and compensa-
tion, including, if appropriate, the authority to perform some or
all of the duties or exercise some or all of the powers of the
President; (2) may make and enter into on behalf of the Corpora-
tion all deeds, conveyances, mortgages, leases, contracts,
agreements, bonds, reports, releases, and other documents or
instruments which may in his judgment be necessary or advisable
in the ordinary course of the Corporation's business or which
shall be authorized by the Board; (3) shall see that all Corpora-
tion policies and all orders and resolutions of the Board are
carried into effect; and (4) shall have all the usual duties and
powers of the President of a corporation and such other duties
and powers as may be prescribed from time to time by the Board.
(As amended 7/29/91.)
Section 4.08. Vice-Presidents. Each Vice-President shall
have such duties and powers as may be prescribed from time to
time by the President or the Board of Directors. (As amended
4/23/64 and 10/27/77.)
Section 4.09. Secretary. The Secretary:
(a) shall, when present, act as Secretary of each
meeting of the shareholders and of the Board of Directors;
(b) shall keep the minutes of the meetings of the
shareholders and the Board of Directors in one or more books
provided for that purpose;
(c) shall see that all notices are duly given and that
lists of shareholders are made and filed as required by law or
the Articles of Incorporation or these By-laws;
(d) shall be custodian of the corporate records and
the seal of the Corporation and shall, when duly authorized, see
that the seal is affixed to any instrument requiring it;
(e) shall keep a record of the Directors, giving the
names and addresses of all Directors; and (As amended 4/23/64 and
2/19/79.)
(f) shall have all the usual duties and powers of the
Secretary of a corporation and such duties and powers as may be
prescribed from time to time by the President or the Board of
Directors. (As amended 2/19/79.)
Section 4.10. Treasurer. The Treasurer:
(a) shall have charge and custody of and be
responsible for all funds, securities, and evidences of
indebtedness belonging to the Corporation;
(b) shall receive and give receipts for moneys due and
payable to the Corporation from any source whatever;
(c) shall see that all such moneys are deposited in
the name of and to the credit of the Corporation in such
depositories as shall be designated by or pursuant to authority
granted by the Board of Directors;
(d) shall cause the funds of the Corporation to be
disbursed when and as duly authorized to do so;
(e) shall see that correct and complete books of
account and financial statements are kept and prepared in
accordance with generally accepted accounting principles except
to the extent such duties are assigned by the President to other
officers or employees of the Corporation; (As amended 2/13/77.)
(f) shall have all the usual duties and powers of the
Treasurer of a corporation and such duties and powers as may be
prescribed from time to time by the President or the Board of
Directors; (As amended 2/13/77.)
(g) shall keep at the registered office or principal
place of business of the Corporation a record of its shareholders
(which shall be part of the stock transfer books of the
Corporation), giving the names and addresses of all shareholders
and the number and class of the shares held by each; and (As
amended 2/19/79.)
(h) shall have charge of the stock transfer books of
the Corporation, and shall record the issuance and transfer of
shares, except to the extent that such duties shall be delegated
by the Board of Directors to a transfer agent or registrar. (As
amended 2/19/79.)
Section 4.11. Assistant Secretaries. In the absence of the
Secretary or in the event of his death or inability or refusal to
act, the Assistant Secretary (or, if there shall be more than
one, the Assistant Secretaries in the order designated by the
Board of Directors from time to time, or, in the absence of any
such designation, in the order in which their names shall appear
in the minutes showing their election) shall perform the duties
and exercise the powers of the Secretary. Each Assistant
Secretary shall also have such duties and powers as may be
prescribed from time to time by the Secretary or the President or
the Board of Directors. (As amended 4/23/64.)
Section 4.12. Assistant Treasurers. In the absence of the
Treasurer or in the event of his death or inability or refusal to
act, the Assistant Treasurer (or, if there shall be more than
one, the Assistant Treasurers in the order designated by the
Board of Directors from time to time, or, in the absence of any
such designation, in the order in which their names shall appear
in the minutes showing their election) shall perform the duties
and exercise the powers of the Treasurer. Each Assistant
Treasurer shall also have such duties and powers as may be
prescribed from time to time by the Treasurer or the
President or the Board of Directors. (As amended 4/23/64.)
Section 4.13. Compensation. The Board of Directors may fix
or provide for, or may authorize any officer to fix or provide
for, reasonable compensation of any or all of the officers and
agents of the Corporation, including, without limiting the
generality of the foregoing, salaries, bonuses, payment of
expenses, pensions, pension plans, pension trusts, profit-sharing
plans, stock bonus plans, stock option plans (subject to approval
of the shareholders if required by law), and other incentive,
insurance, and welfare plans, whether or not on account of prior
services rendered to the Corporation. (As amended 4/23/64.)
Section 4.14. Bond. The Board of Directors may require an
officer or agent to give a bond for the faithful performance of
his duties, in such amount and with such surety or sureties as
the Board of Directors deems advisable.
ARTICLE 5. SHARES AND CERTIFICATES
Section 5.01. Issuance of and Consideration for Shares.
Shares and securities convertible into shares of the Corporation
may be issued for such consideration as shall be fixed from time
to time by the Board of Directors, and may be issued to such
persons as may be designated from time to time by or pursuant to
authority granted by the Board of Directors, except as otherwise
required by law or the Articles of Incorporation or these By-
laws. (As amended 5/12/97.)
Section 5.02. Restrictions on Issuance of Shares and
Certificates. No share of the Corporation shall be issued until
such share is fully paid as provided by law. (As amended
5/12/97.)
No fractional share or certificate representing any fractional
share shall be issued unless expressly authorized by the Board of
Directors.
No new certificate shall be issued in place of any certificate
until the old certificate for a like number of shares shall have
been surrendered and cancelled, except as otherwise provided in
Section 5.04.
Section 5.03. Certificates Representing Shares. Each
shareholder shall be entitled to a certificate or certificates
representing the shares of the Corporation owned by him.
Certificates representing shares of the Corporation shall be in
such form as shall be determined by or pursuant to authority
granted by the Board of Directors. Each certificate shall be
signed by the President or a Vice-President and by the Secretary
or an Assistant Secretary, and the corporate seal may be affixed
thereto. All certificates shall be consecutively numbered
or otherwise identified. The name and address of the person to
whom the shares represented thereby are issued, and the number
and class of shares and date of issuance, shall be entered on the
stock transfer books of the Corporation.
Section 5.04. Lost, Destroyed, Stolen, or Mutilated
Certificates. The Board of Directors may authorize a new
certificate to be issued in place of any certificate alleged to
have been lost, destroyed, or stolen, or which shall have been
mutilated, upon production of such evidence and upon compliance
with such conditions as the Board of
Directors may prescribe.
Section 5.05. Transfer of Shares. Shares of the
Corporation shall be transferable only on the stock transfer
books of the Corporation, by the holder of record thereof or by
his duly authorized attorney or legal representative (who shall
furnish such evidence of authority to transfer as the Corporation
or its agent may reasonably require), upon surrender to the
Corporation for cancellation of the certificate representing such
shares, duly endorsed or with a proper written assignment or
power of attorney duly executed and attached thereto, and with
such proof of the authenticity of signatures as the Corporation
or its agent may reasonably require. The Corporation shall
cancel the old certificate, issue a new certificate to the person
entitled thereto, and record the transaction on its stock
transfer books. However, if the applicable law permits shares to
be transferred in a different manner, then to the extent required
to comply with such law all references in this Section to
"shares" shall mean the rights against the Corporation inherent
in or arising out of such shares.
Section 5.06. Shareholders of Record; Change of Name or
Address. The Corporation shall be entitled to recognize the
exclusive right of a person shown on its stock transfer books as
the holder of shares to receive notices and dividends, to vote as
such holder, and to have and exercise all other rights deriving
from such shares, and shall not be bound to recognize any
equitable or other claim to or interest in such shares on the
part of any other person, whether or not it shall have actual or
constructive notice thereof. Unless the context or another
provision of these By-laws clearly indicates otherwise, all
references in these By-laws to "shareholders" and "holders" shall
mean the shareholders of record as shown on the stock transfer
books of the Corporation.
Each shareholder and each Director shall promptly notify the
Secretary in writing of his correct address and any change in his
name or address from time to time. If any shareholder or
Director fails to give such notice, neither the Corporation nor
any of its Directors, officers, agents, or employees shall be
liable or responsible to such shareholder or Director for any
error or loss which might have been prevented if such notice had
been given. (As amended 4/23/64.)
Section 5.07. Regulations. The Board of Directors may
adopt such rules and regulations, not inconsistent with
applicable law or the Articles of Incorporation or these By-laws,
as it deems advisable concerning the issuance, transfer,
conversion, and registration of certificates representing shares
of the Corporation.
ARTICLE 6. GENERAL PROVISIONS
Section 6.01. Seal. The corporate seal shall be circular
in form and shall have inscribed thereon the name of the
Corporation and the words "Corporate Seal" and "Iowa". The seal
may be affixed by causing it or a facsimile thereof to be
impressed or reproduced or otherwise.
Section 6.02. Fiscal Year. The fiscal year of the
Corporation shall be fixed by the Board of Directors from time to
time.
Section 6.03. Dividends. The Board of Directors may from
time to time declare, and the Corporation may pay, dividends on
the outstanding shares in the manner and upon the terms and
conditions provided by law and the Articles of Incorporation.
Section 6.04. Execution of Documents and Instruments. All
deeds and conveyances of real estate, mortgages of real estate,
and leases of real estate (for an initial term of five years or
more) to be executed by the Corporation shall be signed in the
name of the Corporation by the Chairman of the Board of Directors
or the Vice-Chairman or the President or a Vice-President and
signed or attested by the Secretary or an Assistant Secretary,
and the corporate seal shall be affixed thereto.
All other documents or instruments to be executed by the
Corporation (including, without limiting the generality of the
foregoing, contracts, agreements, bonds, reports, notices,
releases, promissory notes, and evidences of indebtedness; and
deeds, conveyances, mortgages, and leases other than those
referred to in the preceding sentence) shall be signed in the
name of the Corporation by any one or more of the officers of the
Corporation, with or without the corporate seal.
However, from time to time the Board of Directors or the Chairman
of the Board of Directors or the Vice-Chairman or the President
may alter, add to, limit, transfer to another officer or agent,
or abolish the authority of any officer or officers to sign any
or all documents or instruments, or may authorize the execution
of any document or instrument by any person or persons, with or
without the corporate seal, and such action may be either general
or confined to specific instances. (As amended 4/23/64 and
8/1/79.)
Section 6.05. Loans. No loans shall be contracted on
behalf of the Corporation and no evidences of indebtedness shall
be issued in its name unless authorized by or pursuant to
authority granted by the Board of Directors. Such authorization
may be either general or confined to specific instances.
Section 6.06. Checks and Drafts. All checks and drafts
issued in the name of the Corporation shall be signed by such
person or persons and in such manner as shall be authorized by or
pursuant to authority granted by the Board of Directors.
Section 6.07. Voting of Shares Owned by Corporation. Any
shares or securities of any other corporation or company owned by
this Corporation may be voted at any meeting of shareholders or
security holders of such other corporation or company by the
Chairman of the Board of Directors of this Corporation. Whenever
in the judgment of the Chairman of the Board of Directors it
shall be advisable for the Corporation to execute a proxy or
waiver of notice or to give a consent with respect to any shares
or securities of any other corporation or company owned by this
Corporation, such proxy, waiver, or consent shall be executed in
the name of this Corporation, as directed by the Chairman of the
Board of Directors, without necessity of any authorization by the
Board of Directors. Any person or persons so designated as the
proxy or proxies of this Corporation shall have full right,
power, and authority to vote such shares or securities on behalf
of this Corporation. In the absence of the Chairman of the Board
of Directors or in the event of his death or inability to act,
the Vice-Chairman may perform the duties and exercise the powers
of the Chairman of the Board of Directors under this Section.
The provisions of this Section shall be subject to any specific
directions by the Board of Directors. (As amended 4/23/64 and
8/1/79.)
Section 6.08. Interest of Directors in Transactions. In
the absence of fraud, any contract or other transaction between
the Corporation and any or all of its Directors (including,
without limiting the generality of the foregoing, any
authorization of or payment of compensation to any Director or
officer of the Corporation), or between the Corporation and any
person or party in which any or all of the Directors of the
Corporation are interested or with which they are connected
(whether as shareholders, directors, officers, owners, partners,
members, employees, or otherwise) shall be valid for all
purposes, notwithstanding the presence of such Director or
Directors at the meeting of the Board of Directors which shall
act upon or with respect to such contract or transaction, and
notwithstanding his or their participation in and vote upon such
action, if the fact of such interest shall be disclosed or
otherwise known to the Board of Directors prior to or at the time
of the taking of such action. Such interested Director or
Directors are hereby expressly authorized to vote upon any action
of the Board of Directors upon or with respect to such contract
or transaction; may be counted in determining whether a quorum is
present; and may be included in the majority necessary to take
such action. Each Director of the Corporation is hereby
expressly relieved, in the absence of fraud, from any liability
which might otherwise exist or arise from contracting with the
Corporation for the benefit of himself or any person or party in
which he may be in any way interested or with which he may be in
any way connected.
Any contract, transaction, or action of the Corporation or of the
Board of Directors which shall be ratified at any meeting of
shareholders by the affirmative vote of the holders of a majority
of the outstanding common shares entitled to vote, shall be as
valid and as binding as though expressly authorized in writing by
every shareholder of the Corporation. However, any failure of
the shareholders to approve or ratify such contract, transaction,
or action, when and if submitted, shall not be deemed in any way
to render the same invalid or to deprive the Directors or
officers of authority to proceed with such contract,
transaction, or action.
This Section shall not be construed to invalidate any contract or
transaction which would otherwise be valid, nor as a limitation
upon the powers of the Directors or officers, nor as a
requirement that any contract or transaction of the Corporation
be approved or ratified by the shareholders.
Section 6.09. Limitation of Personal Liability. The
limitation of liability of Directors and officers shall be
limited as follows:
(a) No Director of the Corporation shall be liable to the
Corporation or to any shareholder or shareholders except as
provided in the Articles of Incorporation or applicable law. The
liability of Directors shall be limited or removed to the maximum
extent provided either by the Articles of Incorporation or by
applicable law, and these provisions shall be liberally construed
to carry out this purpose. For purposes of this Section,
"Director" means any person who is or was a Director of the
Corporation and any person who, while a Director of the
Corporation, is or was serving at the request of the Corporation
as a Director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan.
Heirs, beneficiaries, and personal representatives of the
Director are included.
(b) No officer of the Corporation shall be liable to the
Corporation or to any shareholder or shareholders for any act,
omission, or negligence, except for loss directly resulting from
his or her willful or reckless misconduct. This Section is in
addition to all other limitations of liability contained in
applicable law, the Articles of Incorporation, or other
provisions of these By-laws. The liability of officers shall be
limited or removed to the maximum extent provided by this
Section, other provisions of these By-laws, the Articles of
Incorporation, or applicable laws, and these By-laws shall be
liberally construed to carry out this purpose. (As amended
5/12/97.)
Section 6.10. Indemnification. The Corporation may advance
expenses and indemnify any Qualified Person. For purposes of
this Section, "Qualified Person" means any person who was or is
a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding (whether civil,
criminal, administrative, or investigative including, without
limitation, an action or suit by or in the right of the
Corporation) (collectively, "Action") by reason of the fact
that he or she is or was a Director, officer, employee, or agent
of the Corporation, or is or was serving at the request of the
Corporation, as a Director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation, partnership,
joint venture, trust, other enterprise, or employee benefit plan.
The indemnification may be against expenses (including attorneys'
fees), judgments, fines, and amounts paid or incurred in
settlement which the Qualified Person actually and reasonably
incurred in connection with the Action, in the manner and to the
extent provided in this Section.
(a) Indemnification may be made in the following
independent and alternative methods:
(1) In the manner and to the extent provided by Iowa
law;
(2) If and to the extent that the Board of Directors
determines that the person acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best
interests of the Corporation. This determination may be made
(notwithstanding Sections 3.09 and 3.11) by: (i) a majority vote
of a quorum consisting of Directors who are not at the time
parties to the Action; (ii) if a quorum cannot be obtained under
(i), a majority vote of a committee duly designated by the Board
of Directors, in which designation Directors who are parties may
participate, consisting solely of two or more Directors not at
the time parties to the proceeding; (iii) special legal counsel,
selected by the Board of Directors by a majority vote of a quorum
consisting of Directors who are not parties at the time to the
Action or, if the requisite quorum of the full Board cannot be
obtained, by a majority vote of the full Board, in which
Directors who are parties may participate; or (iv) the
shareholders.
(3) In accordance with any agreement authorized by the
Board of Directors before the commencement of the Action;
(4) If and to the extent authorized by action of the
shareholders; or
(5) In any other manner not prohibited by Iowa law.
(b) Restrictions and presumptions required by law with
regard to indemnification referred to in Subsection (a)(1) shall
not apply to indemnification under Subsections (a)(2), (3), (4),
or (5); provided, however, that indemnification shall not be
provided in any case for:
(1) A breach of a person's duty of loyalty to the
Corporation or its shareholders;
(2) Acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of the law;
(3) A transaction from which the person derives an
improper personal benefit; or
(4) Acts arising under Iowa Code Section 490.858, as
amended from time to time.
(c) To the extent that a Qualified Person has been
successful on the merits or otherwise in defense of any Action,
or in defense of any claim, issue, or material therein, he or she
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection with
such Action.
(d) Any indemnification of a Qualified Person may be both
as to action in his or her official capacity and as to action in
another capacity while holding such official capacity; shall
continue as to a Qualified Person who has ceased to be a
Director, officer, employee, or agent; and shall inure to the
benefit of the heirs, beneficiaries, and personal representatives
of the Qualified Person.
(e) Indemnification may be made either by direct payment by
the Corporation or by reimbursement to the Qualified Person. (As
amended 2/15/88 and 5/12/97.)
Section 6.11. Reliance on Documents. Each Director and
officer shall, in the performance of his duties, be fully
protected in relying and acting in good faith upon the books of
account or other records of the Corporation, or reports made or
financial statements presented by any officer of the Corporation
or by an independent public or certified public accountant or
firm of such accountants or by an appraiser selected with
reasonable care by the Board of Directors or by any committee
thereof; and each Director and officer is hereby expressly
relieved from any liability which might otherwise exist or arise
from or in connection with any such action.
Section 6.12. Effect of Partial Invalidity. If a court of
competent jurisdiction shall adjudge to be invalid any clause,
sentence, paragraph, section, or part of the Articles of
Incorporation or these By-laws, such judgment or decree shall not
affect, impair, invalidate, or nullify the remainder of the
Articles of Incorporation or these By-laws, but the effect
thereof shall be confined to the clause, sentence, paragraph,
section, or part so adjudged to be invalid.
Section 6.13. Definitions. Any word or term which is
defined in the Iowa Business Corporation Act shall have the same
meaning wherever used in the Articles of Incorporation or in
these By-laws, unless the context or another provision of the
Articles of Incorporation or these By-laws clearly indicates
otherwise. Wherever used in the Articles of Incorporation or in
these By-laws, unless the context or another provision of the
Articles of Incorporation or these By-laws clearly indicates
otherwise, the use of the singular shall include the plural, and
vice versa; and the use of any gender shall be applicable to
any other gender. Wherever used in the Articles of Incorporation
or in these By-laws, the word "written" shall mean written,
typed, printed, duplicated, or reproduced by any process. (As
amended 4/23/64.)
Section 6.14. Authority to Carry Out Resolutions and
Motions. Each resolution or motion adopted by the shareholders
or by the Board of Directors shall be deemed to include the
following provision, unless the resolution or motion expressly
negates this provision: The officers of the Corporation are
severally authorized on behalf of the Corporation to do all acts
and things which may be necessary or convenient to carry out this
resolution (motion), including, without limitation, the authority
to make, execute, seal, deliver, file, and perform all
appropriate contracts, agreements, certificates, documents, and
instruments.
The foregoing provision shall automatically be a part of the
resolution or motion even though not stated in the minutes; and
any officer may state or certify that the foregoing provision is
included in the resolution or motion. (Added entire section
8/3/82.)
ARTICLE 7. AMENDMENTS
Section 7.01. Reservation of Right to Amend. The
Corporation expressly reserves the right from time to time to
amend these By-laws, in the manner now or hereafter permitted by
the provisions of the Articles of Incorporation and these
By-laws, whether or not such amendment shall constitute or result
in a fundamental change in the purposes or structures of the
Corporation or in the rights or privileges of shareholders or
others or in any or all of the foregoing. All rights and
privileges of shareholders or others shall be subject to
this reservation. Wherever used in these By-laws with respect to
the By-laws, the word "amend," "amended," or "amendment" includes
and applies to the amendment, alteration, or repeal of any or all
provisions of the By-laws or the adoption of new By-laws. (As
amended 4/28/66.)
Section 7.02. Procedure to Amend. Any amendment to these
By-laws may be adopted at any meeting of the Board of Directors
by the affirmative vote of a majority of the number of Directors
fixed by Section 3.03. No notice of any proposed amendment to
the By-laws shall be required. (As amended 4/28/66.)
