UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 26, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-12604
THE MARCUS CORPORATION
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1139844
- ---------------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.
250 East Wisconsin Avenue, Suite 1700
Milwaukee, Wisconsin 53202
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 905-1000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 12, 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 filing
requirements for the past 90 days.
Yes X No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK OUTSTANDING AT JANUARY 7, 1999 - 18,553,158
CLASS B COMMON STOCK OUTSTANDING AT JANUARY 7, 1999 - 12,636,355
<PAGE>
THE MARCUS CORPORATION
INDEX
PART I - FINANCIAL INFORMATION Page
Item 1. Consolidated Financial Statements:
Balance Sheets
(November 26, 1998 and May 28, 1998).............................. 3
Statements of Earnings
(Thirteen and twenty-six weeks ended November 26, 1998,
twelve and twenty-four weeks ended November 13, 1997
(as reported) and thirteen and twenty-six weeks ended
November 27, 1997 (pro forma)..................................... 5
Statements of Cash Flows
(Twenty-six weeks ended November 26, 1998 and twenty-
four weeks ended November 13, 1997)............................... 6
Condensed Notes to Financial Statements........................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................... 8
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders............... 14
Item 5. Other Information................................................. 15
Item 6. Exhibits and Reports on Form 8-K.................................. 16
Signatures........................................................ 17
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE MARCUS CORPORATION
Consolidated Balance Sheets
(Unaudited) (Audited)
November 26, May 28,
1998 1998
---- ----
(in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $1,435 $4,678
Accounts and notes receivable 15,144 14,294
Receivables from joint ventures 1,444 1,288
Refundable income taxes 221 4,385
Other current assets 5,477 3,773
------ -----
Total current assets 23,721 28,418
Property and equipment:
Land and improvements 89,294 85,282
Buildings and improvements 469,951 440,737
Leasehold improvements 9,374 9,355
Furniture, fixtures and equipment 197,157 187,341
Construction in progress 25,286 27,510
------- ------
Total property and equipment 791,062 750,225
Less accumulated depreciation and amortization 202,028 190,229
-------- -------
Net property and equipment 589,034 559,996
Other assets:
Investments in joint ventures 1,625 1,496
Other 19,132 18,594
------- ------
Total other assets 20,757 20,090
------- ------
TOTAL ASSETS $633,512 $608,504
========= ========
See accompanying notes to consolidated financial statements.
3
<PAGE>
THE MARCUS CORPORATION
Consolidated Balance Sheets
(Unaudited) (Audited)
November 26, May 28,
1998 1998
---- ----
(in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $4,785 $5,255
Accounts payable 12,770 26,385
Taxes other than income taxes 10,807 11,404
Accrued compensation 2,531 2,643
Other accrued liabilities 13,224 10,072
Current maturities on long-term
debt 10,196 10,277
------- ------
Total current liabilities 54,313 66,036
Long-term debt 227,421 205,632
Deferred income taxes 28,462 26,479
Deferred compensation and other 8,786 7,826
Shareholders' equity:
Preferred Stock, $1 par;
authorized 1,000,000 shares;
none issued
Common Stock, $1 par; authorized
50,000,000 shares; issued
18,520,585 shares at November
26, 1998, 18,511,866 shares at
May 28, 1998 18,521 18,512
Class B Common Stock, $1 par;
authorized 33,000,000 shares;
issued and outstanding
12,668,928 at November 26,
1998, 12,677,656 at May 28, 1998 12,669 12,678
Capital in excess of par 40,472 40,265
Retained earnings 252,430 235,708
-------- -------
324,092 307,163
Less cost of Common Stock in treasury
(1,232,612 shares at November 26,
1998 and 944,544 shares at May 28,
1998) 9,562 4,632
------ ------
Total shareholders' equity 314,530 302,531
-------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $633,512 $608,504
========= ========
See accompanying notes to consolidated financial statements.
4
<PAGE>
THE MARCUS CORPORATION
Consolidated Statements of Earnings (Unaudited)
<TABLE>
<CAPTION>
(As reported) (Pro forma)(1)
November 26, 1998 November 13, 1997 November 27, 1997
----------------- ----------------- -----------------
13 Weeks 26 Weeks 12 Weeks 24 Weeks 13 Weeks 26 Weeks
-------- -------- -------- -------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Rooms and telephone $ 43,475 $ 95,524 $ 39,847 $ 86,895 $ 41,708 $ 92,129
Theatre operations 22,678 55,857 14,299 37,879 16,519 41,224
Food and beverage 12,927 26,797 11,193 23,739 11,946 25,459
Other income 8,914 17,176 5,845 12,724 5,878 13,350
--------- --------- --------- --------- --------- ---------
Total revenues 87,994 195,354 71,184 161,237 76,051 172,162
Costs and expenses:
Rooms and telephone 18,843 37,493 15,288 31,029 16,761 33,940
Theatre operations 13,383 32,757 8,392 22,675 9,540 24,542
Food and beverage 9,317 18,586 7,708 16,088 8,240 17,249
Advertising and marketing 6,923 13,438 5,328 10,743 6,147 12,038
Administrative 9,198 18,951 7,041 14,877 7,356 15,770
Depreciation and amortization 9,869 19,114 7,347 14,573 7,993 15,875
Rent 606 1,644 479 1,548 520 1,623
Property taxes 3,489 6,963 2,726 5,439 2,776 5,644
Other operating expenses 3,655 7,599 3,201 6,386 3,195 6,514
--------- --------- --------- --------- --------- ---------
Total costs and expenses 75,283 156,545 57,510 123,358 62,528 133,195
--------- --------- --------- --------- --------- ---------
Operating income 12,711 38,809 13,674 37,879 13,523 38,967
Other income (expense):
Investment income 147 323 477 826 488 876
Interest expense (3,552) (7,568) (2,872) (5,637) (3,081) (6,118)
Gain on disposition of property
and equipment 531 1,918 243 242 249 250
--------- --------- --------- --------- --------- ---------
(2,874) (5,327) (2,152) (4,569) (2,344) (4,992)
--------- --------- --------- --------- --------- ---------
Earnings before income taxes 9,837 33,482 11,522 33,310 11,179 33,975
Income taxes 3,948 13,402 4,605 13,328 4,472 13,599
--------- --------- --------- --------- --------- ---------
Net earnings $ 5,889 $ 20,080 $ 6,917 $ 19,982 $ 6,707 $ 20,376
========= ========= ========= ========= ========= =========
Net earnings per share (2):
Basic $ 0.20 $ 0.67 $ 0.23 $ 0.67 $ 0.22 $ 0.68
Diluted $ 0.20 $ 0.66 $ 0.23 $ 0.67 $ 0.22 $ 0.68
Weighted Average Shares
Outstanding (2):
Basic 29,968 30,084 30,071 29,867 30,031 29,817
Diluted 30,072 30,217 30,231 30,027 30,313 30,069
</TABLE>
(1) Pro forma information is presented as if the prior year had been reported
on the new 13-week basis.
(2) All per share and shares outstanding data have been adjusted to reflect the
50% stock dividend distributed on December 5, 1997.
See accompanying notes to consolidated financial statements.
<PAGE>
THE MARCUS CORPORATION
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
26 Weeks 24 Weeks
Ended Ended
Nov. 26, 1998 Nov. 13, 1997
------------- -------------
OPERATING ACTIVITIES:
Net earnings $20,080 $19,982
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Earnings on investments in joint
ventures, net of distributions (129) (23)
Gain on disposition of property
and equipment (1,918) (242)
Depreciation and amortization 19,114 14,573
Deferred income taxes 1,983 500
Deferred compensation and other 960 1,309
Changes in assets and liabilities:
Accounts and notes receivable (850) (5,064)
Other current assets (1,704) (517)
Accounts payable (13,615) 1,318
Income taxes 4,164 4,015
Taxes other than income taxes (597) 1,736
Accrued compensation (112) 1,639
Other accrued liabilities 3,152 (670)
------ -----
Total adjustments 10,448 18,574
------ ------
Net cash provided by operating activities 30,528 38,556
INVESTING ACTIVITIES:
Capital expenditures, including business
acquisitions (51,264) (41,310)
Net proceeds from disposals of property,
equipment and other assets 5,276 318
Cash acquired pursuant to GHI acquistion - 2,589
Increase in other assets (956) (820)
Cash advanced to joint ventures (156) (151)
----- -----
Net cash used in investing activities (47,100) (39,374)
FINANCING ACTIVITIES:
Debt transactions:
Net proceeds from issuance of notes
payable and long-term debt 33,675 7,000
Principal payments on notes payable
and long-term debt (12,437) (5,818)
Equity transactions:
Treasury stock transactions, except
for stock options (5,182) (376)
Exercise of stock options 461 973
Dividends paid (3,188) (1,516)
------ ------
Net cash provided by financing activities 13,329 263
------ ---
Net decrease in cash and cash equivalents (3,243) (555)
Cash and cash equivalents at beginning of year 4,678 7,991
------ -----
Cash and cash equivalents at end of period $1,435 $7,436
====== ======
See accompanying notes to consolidated financial statements.
6
<PAGE>
THE MARCUS CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS FOR THE
THIRTEEN AND TWENTY-SIX WEEKS ENDED
NOVEMBER 26, 1998
(Unaudited)
A. Refer to the Company's audited financial statements (including footnotes)
for the fiscal year ended May 28, 1998, contained in the Company's Form
10-K Annual Report for such fiscal year, for a description of the Company's
accounting policies.
B. Beginning in fiscal 1999, the Company is dividing its fiscal year into
three 13-week quarters and a final quarter consisting of 13 or 14 weeks.
Previously, the Company's fiscal year consisted of three 12-week quarters
and a fourth quarter of 16 or 17 weeks. Comparative results for the second
quarter and first half of fiscal 1998 are presented on a pro forma basis,
as if the periods had been reported on the new basis.
C. The consolidated financial statements for the thirteen and twenty-six weeks
ended November 26, 1998, twelve and twenty-four weeks ended November 13,
1997 and pro forma thirteen and twenty-six weeks ended November 27, 1997
have been prepared by the Company without audit. In the opinion of
management, all adjustments consisting only of normal recurring accruals
necessary to present fairly the unaudited interim financial information at
November 26, 1998, and for all periods presented, have been made.
D. The Company's Board of Directors declared a three-for-two stock split,
effected in the form of a 50% stock dividend, distributed on December 5,
1997, to all holders of Common Stock and Class B Common Stock. All per
share and weighted average shares outstanding data prior to December 5,
1997, have been adjusted to reflect this dividend.
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Special Note Regarding Forward-Looking Statements
Certain matters discussed in this Management's Discussion and Analysis of
Results of Operations and Financial Condition are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements may generally be identified as such because the context of such
statements will include words such as the Company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe the
Company's future plans, objectives or goals are also forward-looking statements.
Such forward-looking statements are subject to certain risks and uncertainties,
including, but not limited to, the following: (i) the Company's ability to
identify properties to acquire, develop and/or manage and continuing
availability of funds for such development; (ii) the limited-service lodging
division's ability to attract and retain quality franchise operators and to
effectively execute its Baymont name change strategy; (iii) continuing consumer
demand as a result of general economic conditions with respect to the hotels and
resorts and limited-service lodging divisions; (iv) continuing availability, in
terms of both quality and quantity, of films for the theatre division; (v)
absence of significant increases in costs of obtaining food for the restaurant
division; and (vi) competitive conditions in the markets served by the Company.
Shareholders, potential investors and other readers are urged to consider these
factors carefully in evaluating the forward-looking statements and are cautioned
not to place undue reliance on such forward-looking statements. The
forward-looking statements made herein are made only as of the date of this Form
10-Q and the Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
RESULTS OF OPERATIONS
General
The Marcus Corporation and its four divisions report their consolidated
and individual segment results of operations on a 52-or 53-week fiscal year
ending on the last Thursday in May. Fiscal 1999 will be a 52-week year for the
Company and each of its divisions. Fiscal 1998 was a 53-week fiscal year for the
Company's restaurant division, while the Company and its other remaining
divisions reported a 52-week year in fiscal 1998.
Historically, the Company's fiscal year has been divided into three
12-week quarters and a final quarter consisting of 16 or 17 weeks. Beginning in
fiscal 1999, the Company is dividing its fiscal year into three 13-week quarters
and a final quarter consisting of 13 or 14 weeks. The Company has made this
change in order to simplify its reporting process and provide greater
consistency between quarters. To facilitate comparisons with fiscal 1999
results, comparative results for the second quarter and first half of fiscal
1998 are presented on a pro forma basis, as if the periods had been reported on
the new basis.
8
<PAGE>
Revenues for the second quarter of fiscal 1999 ended November 26,
1998, totaled $88.0 million, an increase of $11.9 million, or 15.7%, from pro
forma revenues of $76.1 million for the second quarter of fiscal 1998. Revenues
reported for the 12-week quarter ended November 13, 1997 totaled $71.2 million.
All four operating segments contributed to the increase in revenues for the
fiscal 1999 second quarter, with the theatre division contributing the largest
increase over the prior year. For the first half of fiscal 1999, revenues were
$195.4 million, an increase of $23.2 million, or 13.5%, from pro forma revenues
of $172.2 million during the first half of fiscal 1998.
Net earnings for the second quarter of fiscal 1999 were $5.9 million,
or $.20 per share, down 12.2% and 9.1%, respectively, from pro forma net
earnings of $6.7 million, or $.22 per share, for the same quarter during the
prior year. Net earnings reported for the 12-week quarter ended November 13,
1997 were $6.9 million, or $.23 per share. For the first half of fiscal 1999,
net earnings were $20.1 million, or $.66 per share. This represented a
respective 1.5% and 2.9% decrease from pro forma net earnings of $20.4 million,
or $.68 per share, for the first half of fiscal 1998. All earnings per share
data have been adjusted to reflect the three-for-two stock split effected in the
form of a 50% stock dividend on December 5, 1997. The Company adopted SFAS No.
128, "Earnings Per Share," in fiscal 1998. Prior period amounts have been
restated under the new standard. All per share data presented herein is on a
diluted basis.
Operating income (earnings before other income/expense and income
taxes) totaled $12.7 million during the second quarter of fiscal 1999, a
decrease of $800,000, or 6.0%, compared to the pro forma prior year same period.
For the first half of fiscal 1999, operating income was $38.8 million, a
decrease of $200,000, or 0.4%, from pro forma operating income of $39.0 million
for the first half of fiscal 1998. The Company's interest expense, net of
investment income, totaled $3.4 million and $7.2 million for the second quarter
and first half of fiscal 1999, respectively, compared to $2.6 million and $5.2
million during the same periods last year on a pro forma basis. This increase
was the result of increased long-term debt levels necessary to help finance the
Company's capital program, combined with reduced investment income and
capitalized interest.
The Company is conducting a review of its computer systems to identify
those areas that may be affected by the Year 2000 issue and is developing an
implementation plan to resolve the issue. The Company expects the project to be
substantially complete by early 1999 and does not, at this time, expect this
project to have a significant effect on the business, results of operations or
financial condition of the Company. The Company began converting critical
accounting and data processing systems in fiscal 1998 in the normal course of
business and expects that the new systems will provide business benefits in
addition to being ready for the Year 2000. The Company is also assessing the
impact of this issue with its key vendors and suppliers.
Limited-Service Lodging
Total revenues for the second quarter of fiscal 1999 for the
limited-service lodging division were $37.7 million, an increase of $2.4
million, or 6.8%, compared to pro forma
9
<PAGE>
revenues of $35.3 million during the same period in fiscal 1998. Total revenues
for the first half of fiscal 1999 for the limited-service lodging division were
$79.6 million, an increase of $2.6 million, or 3.4%, compared to pro forma
revenues of $77.0 million for the first half of fiscal 1998. The limited-service
lodging division's operating income for the fiscal 1999 second quarter totaled
$7.2 million, a decrease of $900,000, or 11.1%, from pro forma operating income
of $8.1 million during the same period of fiscal 1998. For the first half of
fiscal 1999, the limited-service lodging division's operating income totaled
$20.1 million, a $1.9 million decrease, or 8.6%, from pro forma operating income
of $22.0 million for the first half of fiscal 1998. The division reported
revenues of $33.4 million and operating income of $8.4 million for the 12-week
second quarter ended November 13, 1997.
Compared to the end of the second quarter of fiscal 1998, one new
Company-owned and 14 new franchised Budgetel/Baymont Inns were in operation at
the end of the fiscal 1999 second quarter. One Company-owned Budgetel Inn was
sold during the quarter. The Company's newly opened Budgetel Inns contributed
additional revenues of $1.0 million to the division's fiscal 1999 first half
revenues. The Company experienced lower occupancy rates and higher average daily
room rates for comparable Budgetel Inns during the second quarter of fiscal
1999, compared to the same quarter last year. The result of the occupancy
decline and average daily rate increases was a 0.9% decrease in the division's
revenue per available room, or RevPAR, for comparable Budgetel Inns during the
fiscal 1999 second quarter. For the first half of fiscal 1999, RevPAR for
comparable Budgetel Inns is unchanged from the same period last year.
The limited-service lodging division's results continue to be impacted
by the increased limited-service segment room supply, resulting in minimal
RevPAR growth and pressure on the division's operating margin. Reduced occupancy
percentages, combined with increased payroll costs in a tight labor market, have
contributed to the lower operating margins. In addition, administrative costs
have increased due to recent investments in information technology and
personnel, including sales staff, in preparation for the upcoming Baymont name
change. Offsetting these negative trends this quarter were increased revenue and
operating income from the division's franchising department and Woodfield Suites
properties.
During the second quarter of fiscal 1999, the Company was completing
preparations for its previously announced name change of its Budgetel Inns to
Baymont Inns and Baymont Inns & Suites. Signage is being replaced during the
third quarter and the Company plans to officially introduce Baymont Inns and
Suites with a significant advertising campaign beginning in mid-January 1999.
The Company does not expect the Baymont introduction to immediately alter the
current trends occurring in the limited-service segment of the lodging industry,
and recognizes that a potential short-term decline in occupancy during the name
change transition could occur. The Company believes that the long-term benefits
of the name change should include expanding the Company's customer base,
increasing RevPAR and increasing development opportunities.
At the end of the fiscal 1999 second quarter, the Company owned or
operated 105 Budgetel/Baymont Inns and franchised an additional 56 Inns,
bringing the total number of Budgetel/Baymont Inns in operation to 161. In
addition, there are currently 23 franchised locations under construction or in
development, all of which are scheduled to open in fiscal
10
<PAGE>
1999 or shortly thereafter. The Company also owns and operates five Woodfield
Suites all-suite motels. Two Company-owned Woodfield Suites are currently under
construction.
Theatres
The theatre division's fiscal 1999 second quarter revenues were $22.8
million, an increase of $6.2 million, or 37.6%, over pro forma revenues of $16.6
million during the same fiscal 1998 period. Operating income for the second
quarter of fiscal 1999 totaled $3.6 million, an increase of $600,000, or 19.7%,
over pro forma operating income of $3.0 million during the same period last
year. The division reported revenues of $14.5 million and operating income of
$2.5 million for the 12-week second quarter ended November 13, 1997. The theatre
division's fiscal 1999 first half revenues were $56.1 million, an increase of
$14.7 million, or 35.5%, over pro forma revenues of $41.4 million during the
first half of fiscal 1998. Operating income for the first half of fiscal 1999
was $11.7 million, an increase of $3.1 million, or 36.0%, over $8.6 million of
pro forma operating income during the first half of fiscal 1998. Consistent with
the seasonality of the motion picture exhibition industry, the second quarter of
the Company's fiscal year is typically the slowest period for its theatre
division.
Total box office receipts for the fiscal 1999 second quarter were
$15.2 million, an increase of $4.3 million, or 38.9%, over pro forma box office
receipts of $10.9 million during the same period last year. The increase in box
office receipts for the second quarter of fiscal 1999 compared to the same
period during the prior year was due to 91 additional screens, a good fall
season of movies and continued popularity of stadium seating. Total box office
receipts for the fiscal 1999 first half were $37.5 million, an increase of $10.0
million, or 36.5%, over pro forma box office receipts of $27.5 million during
the same period last year. The theatre division's average ticket price for the
first half of fiscal 1999 has increased 2.1% over the same period last year.
Vending revenues for the fiscal 1999 second quarter totaled $6.9
million, an increase of $2.1 million, or 42.1%, over pro forma vending revenues
of $4.8 million during the same quarter last year. Vending revenues for the
fiscal 1999 first half were $17.1 million, an increase of $4.8 million, or
39.0%, over pro forma vending revenues of $12.3 million during the fiscal 1998
first half. The increase in vending revenues was due to increased theatre
attendance and a 3.9% increase in average concession sales per person during the
fiscal 1999 first half compared to the same period last year.
Total theatre attendance for the second quarter and first half of
fiscal 1999 increased 38.7% and 33.7%, respectively, over pro forma total
attendance during the same periods last year. Attendance at the Company's
comparable locations has increased 8.4% during the first half of fiscal 1999,
compared to the prior year same period. Revenues for the theatre business and
the motion picture industry in general are heavily dependent upon the general
audience appeal of available films, together with studio marketing, advertising
and support campaigns, factors over which the Company has no control.
11
<PAGE>
During the second quarter of fiscal 1999, the Company opened a new
17-screen ultraplex, including its first IMAX(R) theatre, in suburban Columbus,
Ohio and closed three screens. The Company ended the second quarter with a total
of 388 total screens in 45 theatres compared to 297 screens in 40 theatres at
the end of the same period last year. Early in the third quarter of fiscal 1999,
the Company acquired a 10-screen theatre in Milwaukee, bringing its current
screen total to 398 screens and its screens per location average to 8.7. The
Company currently has 14 additional screens at existing locations under
construction, including its second IMAX(R) theatre at the 20-screen Marcus
Cinemas of Addison, Illinois, and another 31 screens under development,
including a new 15-screen ultraplex in the Minneapolis metropolitan area. The
Company is also pursuing additional acquisition opportunities. During the second
quarter of fiscal 1999, the Company also continued to retrofit existing theatres
with stadium seating. The Company currently has stadium seating in 54% of its
total screens and the Company's goal is to have stadium seating in over 80% of
its first-run screens by the end of fiscal 2000.
Hotels and Resorts
Total revenues from the hotels and resorts division during the second
quarter of fiscal 1999 increased by $3.1 million, or 18.1%, to $20.2 million,
compared to pro forma revenues of $17.1 million in the previous year's
comparable period. Operating income decreased by $200,000, or 7.2%, to $2.2
million during the fiscal 1999 second quarter, compared to pro forma operating
income of $2.4 million during the second quarter of fiscal 1998. The division
reported revenues of $16.6 million and operating income of $2.8 million for the
12-week quarter ended November 13, 1997. Total revenues from the hotels and
resorts division during the first half of fiscal 1999 totaled $44.3 million, an
increase of $5.4 million, or 14.0%, over pro forma first half revenues of $38.9
million during fiscal 1998. Operating income decreased by $1.2 million, or
13.8%, during the first half of fiscal 1999 to $7.5 million, compared to pro
forma operating income of $8.7 million during the same period last year.
Revenues from the Company's new Miramonte Resort in Indian Wells,
California and improved RevPAR at all three of the Company=s comparable owned
hotels contributed to the revenue increases in the fiscal 1999 periods compared
to the prior year's same periods. The division's total RevPAR for comparable
properties increased 6.6% during fiscal 1999's second quarter compared to the
same quarter last year and has increased 8.0% for the first half of fiscal 1999
compared to the same period last year. Operating income for the first half of
fiscal 1999 has increased at all three comparable owned properties as well.
Total division operating income was negatively impacted during the second
quarter and first half of fiscal 1999 by approximately $300,000 and $600,000,
respectively, of pre-opening cost amortization at the Miramonte, in addition to
anticipated start-up operating losses at this new property. The Company expects
the Miramonte to continue to have a negative impact on division operating income
during the third quarter of fiscal 1999, after which pre-opening costs will be
fully amortized. Second quarter division operating income was favorably impacted
by good weather, which extended the golf season at the Grand Geneva Resort &
Spa.
12
<PAGE>
The Company began construction early in the second quarter of fiscal
1999 on a 250-room expansion of the Milwaukee Hilton, which will be connected to
Milwaukee's newly opened Midwest Express Convention Center and will create the
largest hotel in Wisconsin. The addition is currently scheduled to open in 2000.
Development continues on the division's new Company-owned Monona Terrace Hilton
in Madison, Wisconsin. Projected completion of the property, which will be
connected to the city's new Monona Terrace Convention Center, is late in the
year 2000. The Company is also moving forward on development plans for
timesharing at the Grand Geneva. Sales efforts on the initial timeshare units
may begin in the summer of 1999.
Restaurants
Restaurant division revenues totaled $7.2 million for the second
quarter of fiscal 1999, an increase of $200,000, or 2.1%, over fiscal 1998 pro
forma second quarter revenues of $7.0 million. The division's operating income
for the fiscal 1999 second quarter totaled $1.0 million, an increase of
$100,000, or 9.5%, over pro forma operating income of $900,000 during the second
quarter of fiscal 1998. The division reported revenues of $6.6 million and
operating income of $800,000 for the 12-week quarter ended November 13, 1997.
Restaurant division revenues totaled $14.9 million for the first half of fiscal
1999, an increase of $200,000, or 1.7%, over pro forma first half fiscal 1998
revenues of $14.7 million. The division's operating income totaled $2.0 million
for the first half of fiscal 1999 and fiscal 1998.
The Company's KFC restaurants reported increases in revenue and
operating income during the periods reported due in part to expanded lunch and
snack business and the continuing success of the division's first 2-in-1
KFC/Taco Bell restaurant in Milwaukee. Total division operating income did not
increase during the fiscal 1999 first half compared to the prior year's same
period due to a one-time insurance adjustment from a prior claim that was
settled during the first quarter. A second 2-in-1 combination restaurant
conversion opened early in the third quarter of fiscal 1999 and another
conversion is scheduled to open later in the quarter. The Company sold a KFC
restaurant during the second quarter, bringing the total number of restaurants
operating in this division to 30 at the end of the quarter.
FINANCIAL CONDITION
The Company's lodging, movie theatre and restaurant businesses each
generate significant and consistent daily amounts of cash because each segment=s
revenue is derived predominantly from consumer cash purchases. The Company
believes that these consistent and predictable cash sources, together with the
availability to the Company of $39 million of unused credit lines, should be
adequate to support the ongoing operational liquidity needs of the Company's
businesses.
Net cash provided by operating activities decreased by $8.1 million
during the 26-week first half of fiscal 1999 to $30.5 million, compared to $38.6
million during the prior year's 24-week first half. The decrease compared to the
same period last year was primarily the result of timing differences in payments
of accounts payable, offset by timing differences in receipts
13
<PAGE>
of accounts and notes receivable and increased depreciation and amortization (a
non-cash expense) as a result of the Company's increased capital spending
program.
Net cash used in investing activities during the fiscal 1999 first half
totaled $47.1 million, compared to $39.4 million during the fiscal 1998 24-week
first half. Capital expenditures, including business acquisitions, to support
the Company's continuing expansion program totaled $51.3 million during the
first half of fiscal 1999 compared to $41.3 million during the prior year's
reported first half. Nearly two-thirds of the capital expenditures during the
fiscal 1999 first half were incurred in the theatre division to fund new
theatres, screen additions to existing theatres, stadium seating retrofits and
construction of the Company's first IMAX(R) theatre.
Net cash provided by financing activities during the first half of
fiscal 1999 totaled $13.3 million, compared to $300,000 during the 24-week first
half of fiscal 1998. During the fiscal 1999 first half, the Company received
$33.7 million of net proceeds from the issuance of notes payable and long-term
debt, compared to $7.0 million during the 24-week first half of fiscal 1998. The
Company issued additional long-term debt to help fund the Company's ongoing
expansion plans in fiscal 1999. The Company has the ability to issue up to $85
million of additional senior notes under a private placement program and expects
to issue additional notes early in calendar 1999. Proceeds from the issuance of
additional senior notes would be used to pay off existing debt and fund the
Company's capital program.
During the fiscal 1999 first half, the Company repurchased 355,000 of
its common shares in the open market pursuant to a long-standing existing
repurchase program and a recently announced new repurchase program. The Company
announced in the second quarter of fiscal 1999 that its Board of Directors had
authorized the repurchase of up to 1 million additional shares of the Company's
outstanding common stock. The repurchases are expected to be executed on the
open market or in privately negotiated transactions depending upon a number of
factors, including prevailing market conditions.
The actual timing and extent of the implementation of the Company's
current expansion plans will depend in large part on continuing favorable
industry and general economic conditions, the competitive environment, evolving
customer needs and trends and the availability of attractive opportunities. It
is likely that the Company's current expansion goals will continue to evolve and
change in response to these and other factors.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's 1998 annual meeting of shareholders was held on Monday,
September 28, 1998 ("Annual Meeting"). At the Annual Meeting, the following
matters were voted on in person or by proxy, and approved by the Company's
shareholders:
1. The shareholders voted to elect Stephen H. Marcus, Diane
Marcus Gershowitz, Daniel F. McKeithan, Jr., Allan H. Selig,
Timothy E. Hoeksema, Bruce J. Olson and Philip L. Milstein
to the Company's Board of Directors for one-year terms to
expire at the Company's 1999
14
<PAGE>
annual meeting of shareholders and until their successors
are duly qualified and elected.
As of the August 7, 1998 record date for the Annual Meeting ("Record
Date"), 18,517,345 shares of Common Stock and 8,504,252 shares of Class B Common
Stock were outstanding and eligible to vote, with the Common Stock entitled to
one vote per share and the Class B Common Stock entitled to ten votes per share.
Following are the final votes on the matters presented for shareholder approval
of the Annual Meeting:
Election of Directors
For Withheld
------------------------- -----------------------
Name Votes Percentage(1) Votes Percentage(1)
----------- ------------- -------- --------------
Stephen H. Marcus 132,065,843 99.89 140,217 0.11%
Diane Marcus Gershowitz 132,064,318 99.89 141,742 0.11%
Daniel F. McKeithan, Jr 132,061,409 99.89 144,651 0.11%
Allan H. Selig 132,054,238 99.89 151,822 0.11%
Timothy E. Hoeksema 132,065,618 99.89 140,442 0.11%
Bruce J. Olson 132,064,871 99.89 141,189 0.11%
Philip L. Milstein 132,065,715 99.89 140,345 0.11%
- -------
(1) Based on a total of 132,206,060 votes represented by shares of Common Stock
and Class B Common Stock actually voted in person or by proxy at the Annual
Meeting.
No other matters were brought before the Annual Meeting for a
shareholder vote.
Item 5. Other Information
A shareholder wishing to include a proposal in the Company's proxy
statement for its 1999 annual meeting of shareholders pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended, must forward the proposal
to the Company by April 30, 1999. In addition, a shareholder who otherwise
intends to present business at the 1999 annual meeting of shareholders
(including, nominating persons for election as directors) must comply with the
requirements set forth in the Company's Bylaws. Among other things, to bring
business before an annual meeting, a shareholder must give written notice
thereof, complying with the Bylaws, to the Secretary of the Company not later
than 45 days prior to the date in the current year corresponding to the date on
which the Company first mailed its proxy materials for the prior year's annual
meeting. Accordingly, if the Company does not receive notice of a shareholder
proposal submitted otherwise than pursuant to Rule 14a-8 prior to July 14, 1999,
then the notice will be considered untimely and the Company will not be required
to present such proposal at the 1999 annual meeting of shareholders. If the
Board of Directors chooses to present such proposal at the 1999 annual meeting
of shareholders, then the persons
15
<PAGE>
named in proxies solicited by the Board of Directors for the 1999 annual meeting
of shareholders may exercise discretionary voting power with respect to such
proposal.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
No Form 8-K was filed by the Company during the quarter to
which this Form 10-Q relates.
16
<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.
THE MARCUS CORPORATION
(Registrant)
DATE: January 8, 1999 By: /s/ Stephen H. Marcus
--------------------------------------------------
Stephen H. Marcus,
Chairman of the Board, President and
Chief Executive Officer
DATE: January 8, 1999 By: /s/ Douglas A. Neis
--------------------------------------------------
Douglas A. Neis
Chief Financial Officer and Treasurer
17
<PAGE>
THE MARCUS CORPORATION
FORM 10-Q
FOR
26 WEEKS ENDED NOVEMBER 26, 1998
EXHIBIT INDEX
Exhibit Description
3.1 Form of Amendment to the Bylaws of The Marcus Corporation
3.2 Bylaws of The Marcus Corporation, effective December 17, 1998
27 Financial Data Schedule
18
Exhibit (3.1)
AMENDMENTS TO THE BYLAWS
OF THE MARCUS CORPORATION
Article II of the current Bylaws of The Marcus Corporation shall be
deleted in its entirety and the following substituted in lieu thereof:
ARTICLE II. SHAREHOLDERS
2.01 Annual Meeting. The annual meeting of the shareholders (the "Annual
Meeting") shall be held on such day in September or October of each year as may
be designated by or under the authority of the Board of Directors, or at such
other time and date as may be fixed by resolution of the Board of Directors. In
fixing a meeting date for any Annual Meeting, the Board of Directors may
consider such factors as it deems relevant within the good faith exercise of its
business judgment. At each Annual Meeting, the shareholders shall elect that
number of directors equal to the number of directors whose term expires at the
time of such meeting. At any such meeting, only other business properly brought
before the meeting in accordance with Section 2.14 of these bylaws may be
transacted. If the election of directors shall not be held on the date
designated herein, or fixed as herein provided, for any Annual Meeting, or any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of shareholders (a "Special Meeting") as soon thereafter as
is practicable.
2.02 Special Meetings.
(a) A Special Meeting may be called only by (i) Chairman of the Board,
(ii) the President or (iii) the Board of Directors and shall be called by the
President upon the demand, in accordance with this Section 2.02, of the holders
of record of shares representing at least 10% of all the votes entitled to be
cast on any issue proposed to be considered at the Special Meeting.
(b) In order that the corporation may determine the shareholders
entitled to demand a Special Meeting, the Board of Directors may fix a record
date to determine the shareholders entitled to make such a demand (the "Demand
Record Date"). The Demand Record Date shall not precede the date upon which the
resolution fixing the Demand Record Date is adopted by the Board of Directors
and shall not be more than ten days after the date upon which the resolution
fixing the Demand Record Date is adopted by the Board of Directors. Any
shareholder of record seeking to have shareholders demand a Special Meeting
shall, by sending written notice to the Secretary of the corporation by hand or
by certified or registered mail, return receipt requested, request the Board of
Directors to fix a Demand Record Date. The Board of Directors shall promptly,
but in all events within ten days after the date on which a valid request to fix
a Demand Record Date is received, adopt a resolution fixing the Demand Record
Date and shall make a public announcement of such Demand Record Date. If no
Demand Record Date has been fixed by the Board of Directors within ten
<PAGE>
days after the date on which such request is received by the Secretary, the
Demand Record Date shall be the 10th day after the first date on which a valid
written request to set a Demand Record Date is received by the Secretary. To be
valid, such written request shall set forth the purpose or purposes for which
the Special Meeting is to be held, shall be signed by one or more shareholders
of record (or their duly authorized proxies or other representatives), shall
bear the date of signature of each such shareholder (or proxy or other
representative) and shall set forth all information about each such shareholder
and about the beneficial owner or owners, if any, on whose behalf the request is
made that would be required to be set forth in a shareholder's notice described
in paragraph (a) (ii) of Section 2.14 of these bylaws.
(c) In order for a shareholder or shareholders to demand a Special
Meeting, a written demand or demands for a Special Meeting by the holders of
record as of the Demand Record Date of shares representing at least 10% of all
the votes entitled to be cast on any issue proposed to be considered at the
Special Meeting must be delivered to the corporation. To be valid, each written
demand by a shareholder for a Special Meeting shall set forth the specific
purpose or purposes for which the Special Meeting is to be held (which purpose
or purposes shall be limited to the purpose or purposes set forth in the written
request to set a Demand Record Date received by the corporation pursuant to
paragraph (b) of this Section 2.02), shall be signed by one or more persons who
as of the Demand Record Date are shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of signature
of each such shareholder (or proxy or other representative), and shall set forth
the name and address, as they appear in the corporation's books, of each
shareholder signing such demand and the class and number of shares of the
corporation which are owned of record and beneficially by each such shareholder,
shall be sent to the Secretary by hand or by certified or registered mail,
return receipt requested, and shall be received by the Secretary within seventy
days after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting
upon shareholder demand unless, in addition to the documents required by
paragraph (c) of this Section 2.02, the Secretary receives a written agreement
signed by each Soliciting Shareholder (as defined below), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the corporation's
costs of holding the Special Meeting, including the costs of preparing and
mailing proxy materials for the corporation's own solicitation, provided that if
each of the resolutions introduced by any Soliciting Shareholder at such meeting
is adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is elected,
then the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the meanings set
forth below:
(i) "Affiliate" of any Person (as defined herein) shall mean
any Person controlling, controlled by or under common control with
such first Person.
(ii) "Participant" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
-2-
<PAGE>
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term in
Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to
any Special Meeting demanded by a shareholder or shareholders, any of
the following Persons:
(A) if the number of shareholders signing the
demand or demands of meeting delivered to the corporation
pursuant to paragraph (c) of this Section 2.02 is ten or
fewer, each shareholder signing any such demand;
(B) if the number of shareholders signing the
demand or demands of meeting delivered to the corporation
pursuant to paragraph (c) of this Section 2.02 is more than
ten, each Person who either (I) was a Participant in any
Solicitation of such demand or demands or (II) at the time
of the delivery to the corporation of the documents
described in paragraph (c) of this Section 2.02 had engaged
or intends to engage in any Solicitation of Proxies for use
at such Special Meeting (other than a Solicitation of
Proxies on behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if
a majority of the directors then in office determine,
reasonably and in good faith, that such Affiliate should be
required to sign the written notice described in paragraph
(c) of this Section 2.02 and/or the written agreement
described in this paragraph (d) in order to prevent the
purposes of this Section 2.02 from being evaded.
(e) Except as provided in the following sentence, any Special Meeting
shall be held at such hour and day as may be designated by whichever of the
Chairman of the Board, the President or the Board of Directors shall have called
such meeting. In the case of any Special Meeting called by the President upon
the demand of shareholders (a "Demand Special Meeting"), such meeting shall be
held at such hour and day as may be designated by the Board of Directors;
provided, however, that the date of any Demand Special Meeting shall be not more
than seventy days after the Meeting Record Date (as defined in Section 2.06
hereof); and provided further that in the event that the directors then in
office fail to designate an hour and date for a Demand Special Meeting within
ten days after the date that valid written demands for such meeting by the
holders of record as of the Demand Record Date of shares representing at least
10% of all the votes entitled to be cast on each issue proposed to be considered
at the
-3-
<PAGE>
Special Meeting are delivered to the corporation (the "Delivery Date"), then
such meeting shall be held at 2:00 P.M. local time on the 100th day after the
Delivery Date or, if such 100th day is not a Business Day (as defined below), on
the first preceding Business Day. In fixing a meeting date for any Special
Meeting, the Chairman of the Board, the President or the Board of Directors may
consider such factors as he or it deems relevant within the good faith exercise
of his or its business judgment, including, without limitation, the nature of
the action proposed to be taken, the facts and circumstances surrounding any
demand for such meeting, and any plan of the Board of Directors to call an
Annual Meeting or a Special Meeting for the conduct of related business.
(f) The corporation may engage regionally or nationally recognized
independent inspectors of elections to act as an agent of the corporation for
the purpose of promptly performing a ministerial review of the validity of any
purported written demand or demands for a Special Meeting received by the
Secretary. For the purpose of permitting the inspectors to perform such review,
no purported demand shall be deemed to have been delivered to the corporation
until the earlier of (i) five Business Days following receipt by the Secretary
of such purported demand and (ii) such date as the independent inspectors
certify to the corporation that the valid demands received by the Secretary
represent at least 10% of all the votes entitled to be cast on each issue
proposed to be considered at the Special Meeting. Nothing contained in this
paragraph (f) shall in any way be construed to suggest or imply that the Board
of Directors or any shareholder shall not be entitled to contest the validity of
any demand, whether during or after such five Business Day period, or to take
any other action (including, without limitation, the commencement, prosecution
or defense of any litigation with respect thereto).
(g) For purposes of these bylaws, "Business Day" shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of Wisconsin are authorized or obligated by law or executive order to
close.
2.03 Place of Meeting. The Chairman of the Board, the President or the
Board of Directors may designate any place, either within or without the State
of Wisconsin, as the place of meeting for any Annual Meeting or Special Meeting.
If no designation is made, the place of meeting shall be the principal office of
the corporation. Any meeting may be adjourned to reconvene at any place
designated by vote of the Board of Directors or by the Chairman of the Board or
the President.
2.04 Notice of Meeting. Written notice stating the date, time and place of
any meeting of shareholders shall be delivered not less than ten days nor more
than sixty days before the date of the meeting (unless a different time is
provided by the Wisconsin Business Corporation Law or the articles of
incorporation), either personally or by mail, by or at the direction of the
President or the Secretary, to each shareholder of record entitled to vote at
such meeting and to such other persons as required by the Wisconsin Business
Corporation Law. In the event of any Demand Special Meeting, such notice of
meeting shall be sent not more than thirty days after the Delivery Date. If
mailed, notice pursuant to this Section 2.04 shall be deemed to be effective
when deposited in the United States mail, addressed to the
-4-
<PAGE>
shareholder at his or her address as it appears on the stock record books of the
corporation, with postage thereon prepaid. Unless otherwise required by the
Wisconsin Business Corporation Law or the articles of incorporation of the
corporation, a notice of an Annual Meeting need not include a description of the
purpose for which the meeting is called. In the case of any Special Meeting, (a)
the notice of meeting shall describe any business that the Board of Directors
shall have theretofore determined to bring before the meeting and (b) in the
case of a Demand Special Meeting, the notice of meeting (i) shall describe any
business set forth in the statement of purpose of the demands received by the
corporation in accordance with Section 2.02 of these bylaws and (ii) shall
contain all of the information required in the notice received by the
corporation in accordance with Section 2.14(b) of these bylaws. If an Annual
Meeting or Special Meeting is adjourned to a different date, time or place, the
corporation shall not be required to give notice of the new date, time or place
if the new date, time or place is announced at the meeting before adjournment;
provided, however, that if a new Meeting Record Date for an adjourned meeting is
or must be fixed, the corporation shall give notice of the adjourned meeting to
persons who are shareholders as of the new Meeting Record Date.
2.05 Waiver of Notice. A shareholder may waive any notice required by the
Wisconsin Business Corporation Law, the articles of incorporation or these
bylaws before or after the date and time stated in the notice. The waiver shall
be in writing and signed by the shareholder entitled to the notice, contain the
same information that would have been required in the notice under applicable
provisions of the Wisconsin Business Corporation Law (except that the time and
place of meeting need not be stated) and be delivered to the corporation for
inclusion in the corporate records. A shareholder's attendance at any Annual
Meeting or Special Meeting, in person or by proxy, waives objection to all of
the following: (a) lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting or promptly upon arrival objects to
holding the meeting or transacting business at the meeting; and (b)
consideration of a particular matter at the meeting that is not within the
purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
2.06 Fixing of Record Date. The Board of Directors may fix in advance a
date not less than ten days and not more than seventy days prior to the date of
an Annual Meeting or Special Meeting as the record date for the determination of
shareholders entitled to notice of, or to vote at, such meeting (the "Meeting
Record Date"). In the case of any Demand Special Meeting, (i) the Meeting Record
Date shall be not later than the 30th day after the Delivery Date and (ii) if
the Board of Directors fails to fix the Meeting Record Date within thirty days
after the Delivery Date, then the close of business on such 30th day shall be
the Meeting Record Date. The shareholders of record on the Meeting Record Date
shall be the shareholders entitled to notice of and to vote at the meeting.
Except as provided by the Wisconsin Business Corporation Law for a court-ordered
adjournment, a determination of shareholders entitled to notice of and to vote
at an Annual Meting or Special Meeting its effective for any adjournment of such
meeting unless the Board of Directors fixes a new Meeting Record Date, which it
shall do if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting. The Board of Directors may also fix in
-5-
<PAGE>
advance a date as the record date for the purpose of determining shareholders
entitled to take any other action or determining shareholders for any other
purpose. Such record date shall not be more than seventy days prior to the date
on which the particular action, requiring such determination of shareholders, is
to be taken. The record date for determining shareholders entitled to a
distribution (other than a distribution involving a purchase, redemption or
other acquisition of the corporation's shares) or a share dividend is the date
on which the Board of Directors authorized the distribution or share dividend,
as the case may be, unless the Board of Directors fixes a different record date.
2.07 Shareholders' List for Meetings. After a Meeting Record Date has been
fixed, the corporation shall prepare a list of the names of all of the
shareholders entitled to notice of the meeting. The list shall be arranged by
class or series of shares, if any, and show the address of and number of shares
held by each shareholder. Such list shall be available for inspection by any
shareholder, beginning two business days after notice of the meeting is given
for which the list was prepared and continuing to the date of the meeting, at
the corporation's principal office or at a place identified in the meeting
notice in the city where the meeting will be held. A shareholder or his or her
agent may, on written demand, inspect and, subject to the limitations imposed by
the Wisconsin Business Corporation Law, copy the list, during regular business
hours and at his or her expense, during the period that it is available for
inspection pursuant to this Section 2.07. The corporation shall make the
shareholders' list available at the meeting and any shareholder or his or her
agent or attorney may inspect the list at any time during the meeting or any
adjournment thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken at a
meeting of shareholders.
2.08 Quorum and Voting Requirements.
(a) Shares entitled to vote as a separate voting group may take action
on a matter at any Annual Meeting or Special Meeting only if a quorum of those
shares exists with respect to that matter. If the corporation has only one class
of stock outstanding, such class shall constitute a separate voting group for
purposes of this Section 2.08. Except as otherwise provided in the articles of
incorporation, any bylaw adopted under authority granted in the articles of
incorporation, or the Wisconsin Business Corporation Law, a majority of the
votes entitled to be cast on the matter shall constitute a quorum of the voting
group for action on that matter. Once a share is represented for any purpose at
any Annual Meeting or Special Meeting, other than for the purpose of objecting
to holding the meeting or transacting business at the meeting, it is considered
present for purposes of determining whether a quorum exists for the remainder of
the meeting and for any adjournment of that meeting unless a new Meeting Record
Date is or must be set for the adjourned meeting. If a quorum exists, except in
the case of the election of directors, action on a matter shall be approved if
the votes cast within the voting group favoring the action exceed the votes cast
opposing the action, unless the articles of incorporation, any bylaw adopted
under authority granted in the articles of incorporation, or the Wisconsin
Business Corporation Law requires a greater number of affirmative votes. Unless
otherwise provided in the articles of incorporation, directors shall be elected
by a plurality of the votes cast by the shares entitled to vote in the election
of directors
-6-
<PAGE>
at any Annual Meeting or Special Meeting at which a quorum is present. For
purposes of this Section 2.08, "plurality" means that the individuals with the
largest number of votes are elected as directors up to the maximum number of
directors to be chosen at the meeting.
(b) The Board of Directors acting by resolution may postpone and
reschedule any previously scheduled Annual Meeting or Special Meeting; provided,
however, that a Demand Special Meeting shall not be postponed beyond the 100th
day following the Delivery Date. Any Annual Meeting or Special Meeting may be
adjourned from time to time, whether or not there is a quorum, (i) at any time,
upon a resolution by shareholders if the votes cast in favor of such resolution
by the holders of shares of each voting group entitled to vote on any matter
theretofore properly brought before the meeting exceed the number of votes cast
against such resolution by the holders of shares of each such voting group or
(ii) at any time prior to the transaction of any business at such meeting, by
the Chairman of the Board or the President or pursuant to a resolution of the
Board of Directors. No notice of the time and place of adjourned meetings need
be given except as required by the Wisconsin Business Corporation Law. At any
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
2.09 Conduct of Meeting. The Chief Executive Officer, and in his or her
absence, the Chairman of the Board or the President, as the case may be, and in
their absence, a Vice President in the order provided under Section 4.09 hereof,
and in their absence, any person chosen by the shareholders represented at the
meeting in person or by proxy shall call any Annual Meeting or Special Meeting
to order and shall act as chairperson of the meeting, and the Secretary of the
corporation shall act as secretary of all meetings of the shareholders, but, in
the absence of the Secretary, the presiding officer may appoint any other person
to act as secretary of the meeting.
2.10 Proxies. At any Annual Meeting or Special Meeting, a shareholder may
vote his or her shares in person or by proxy. A shareholder may appoint a proxy
to vote or otherwise act for the shareholder by signing an appointment form,
either personally or by his or her attorney-in-fact. An appointment of a proxy
is effective when received by the Secretary or other officer or agent of the
corporation authorized to tabulate votes. An appointment is valid for eleven
months from the date of its signing unless a different period is expressly
provided in the appointment form.
2.11 Voting of Shares. Except as provided in the articles of incorporation
or in the Wisconsin Business Corporation Law, each outstanding share of Common
Stock is entitled to one (1) vote, and each outstanding share of Class B Common
Stock shall be entitled to ten (10) votes, upon each matter voted on at an
Annual Meeting or Special Meeting.
2.12 Action without Meeting. Any action required or permitted by the
articles of incorporation or these bylaws or any provision of the Wisconsin
Business Corporation Law to be taken at an Annual Meeting or Special Meeting may
be taken without a meeting of Directors if a written consent or consents,
describing the action so taken, is signed by all of the
-7-
<PAGE>
shareholders entitled to vote with respect to the subject matter thereof and
delivered to the corporation for inclusion in the corporate records.
2.13 Acceptance of Instruments Showing Shareholder Action. If the name
signed on a vote, consent, waiver or proxy appointment corresponds to the name
of a shareholder, the corporation, if acting in good faith, may accept the vote,
consent, waiver or proxy appointment and give it effect as the act of a
shareholder. If the name signed on a vote, consent, waiver or proxy appointment
does not correspond to the name of a shareholder, the corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment and give
it effect as the act of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the shareholder
and, if the corporation requests, evidence of fiduciary status acceptable to the
corporation is presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence of this
status acceptable to the corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the signatory's authority to sign for
the shareholder is presented with respect to the vote, consent, waiver or proxy
appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
The corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
2.14 Notice of Shareholder Business and Nomination of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be
considered by the shareholders may be made at an Annual Meeting (A)
pursuant to the corporation's notice of meeting, (B) by or at the
direction of the Board of Directors or (C) by any shareholder of the
-8-
<PAGE>
corporation who is a shareholder of record at the time of giving of
notice provided for in this bylaw and who is entitled to vote at the
meeting and complies with the notice procedures set forth in this
Section 2.14.
(ii) For nominations or other business to be properly
brought before an Annual Meeting by a shareholder pursuant to clause
(C) of paragraph (a)(i) of this Section 2.14, the shareholder must
have given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a shareholder's notice shall be received by
the Secretary of the corporation at the principal offices of the
corporation not later than the earlier of (A) 45 days in advance of
the first annual anniversary (the "Anniversary Date") of the date set
forth in the corporation's proxy statement for the prior year's Annual
Meeting as the date on which the corporation first mailed definitive
proxy materials for the prior year's Annual Meeting and (B) the later
of (x) the 70th day prior to such Annual Meeting and (y) the 10th day
following the day on which public announcement of the date of such
meeting is first made. Such shareholder's notice shall be signed by
the shareholder of record who intends to make the nomination or
introduce the other business (or his duly authorized proxy or other
representative), shall bear the date of signature of such shareholder
(or proxy or other representative) and shall set forth: (A) the name
and address, as they appear on this corporation's books, of such
shareholder and the beneficial owner or owners, if any, on whose
behalf the nomination or proposal is made; (B) the class and number of
shares of the corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that
such shareholder is a holder of record of shares of the corporation
entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to make the nomination or introduce the other
business specified in the notice; (D) in the case of any proposed
nomination for election or re-election as a director, (I) the name and
residence address of the person or persons to be nominated, (II) a
description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and any
other person or persons (naming such person or persons) pursuant to
which the nomination is to be made by such shareholder, (III) such
other information regarding each nominee proposed by such shareholder
as would be required to be disclosed in solicitations of proxies for
elections of directors, or would be otherwise required to be
disclosed, in each case pursuant to Regulation 14A under the Exchange
Act, including any information that would be required to be included
in a proxy statement filed pursuant to Regulation 14A had the nominee
been nominated by the Board of Directors and (IV) the written consent
of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected; and (E) in the case of any
other business that such shareholder proposes to bring before the
meeting, (I) a brief description of the business desired to be brought
before the meeting and, if such business includes a proposal to amend
these bylaws, the language of the proposed amendment, (II) such
shareholder's and beneficial owner's or owners' reasons for conducting
such business at the meeting and (III) any material interest in such
business of such shareholder and beneficial owner or owners.
-9-
<PAGE>
(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 2.14 to the contrary, in the event
that the number of directors to be elected to the Board of Directors
of the corporation is increased and there is no public announcement
naming all of the nominees for director or specifying the size of the
increased Board of Directors made by the corporation at least 45 days
prior to the Anniversary Date, a shareholder's notice required by this
Section 2.14 shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall
be received by the Secretary at the principal offices of the
corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by
the corporation.
(b) Special Meetings. Only such business shall be conducted at a
Special Meeting as shall have been described in the notice of meeting sent to
shareholders pursuant to Section 2.04 of these bylaws. Nominations of persons
for election to the Board of Directors may be made at a Special Meeting at which
directors are to be elected pursuant to such notice of meeting (i) by or at the
direction of the Board of Directors or (ii) by any shareholder of the
corporation who (A) is a shareholder of record at the time of giving of such
notice of meeting, (B) is entitled to vote at the meeting and (C) complies with
the notice procedures set forth in this Section 2.14. Any shareholder desiring
to nominate persons for election to the Board of Directors at such a Special
Meeting shall cause a written notice to be received by the Secretary of the
corporation at the principal offices of the corporation not earlier than ninety
days prior to such Special Meeting and not later than the close of business on
the later of (x) the 60th day prior to such Special Meeting and (y) the 10th day
following the day on which public announcement is first made of the date of such
Special Meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. Such written notice shall be signed by the shareholder
of record who intends to make the nomination (or his duly authorized proxy or
other representative), shall bear the date of signature of such shareholder (or
proxy or other representative) and shall set forth: (A) the name and address, as
they appear on the corporation's books, of such shareholder and the beneficial
owner or owners, if any, on whose behalf the nomination is made; (B) the class
and number of shares of the corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that such
shareholder is a holder of record of shares of the corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
make the nomination specified in the notice; (D) the name and residence address
of the person or persons to be nominated; (E) a description of all arrangements
or understandings between such shareholder or beneficial owner or owners and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination is to be made by such shareholder; (F) such
other information regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for elections of
directors, or would be otherwise required to be disclosed, in each case pursuant
to Regulation 14A under the Exchange Act, including any information that would
be required to be included in a proxy statement filed pursuant to Regulation 14A
had the nominee been nominated by the Board of Directors; and (G) the written
consent of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected.
-10-
<PAGE>
(c) General.
(i) Only persons who are nominated in accordance with the procedures
set forth in this Section 2.14 shall be eligible to serve as directors. Only
such business shall be conducted at an Annual Meeting or Special Meeting as
shall have been brought before such meeting in accordance with the procedures
set forth in this Section 2.14. The chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made in accordance with the procedures set forth
in this Section 2.14 and, if any proposed nomination or business is not in
compliance with this Section 2.14, to declare that such defective proposal shall
be disregarded.
(ii) For purposes of this Section 2.14, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this Section 2.14, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 2.14. Nothing in this Section 2.14 shall be deemed to
limit the corporation's obligation to include shareholder proposals in its proxy
statement if such inclusion is required by Rule 14a-8 under the Exchange Act.
-11-
Exhibit (3.2)
BY-LAWS
OF
THE MARCUS CORPORATION
(a Wisconsin corporation)
Amended 3/23/95 (Section 3.01)
Amended 9/28/95 (Sections 3.02 and new Section 3.015)
Amended 12/17/98 (Article II)
<PAGE>
BY-LAWS
OF
THE MARCUS CORPORATION
(a Wisconsin corporation)
ARTICLE I. OFFICES
1.01 Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02 Registered Office. The registered office of the corporation required
by the Wisconsin Business Corporation Law to be maintained in the State of
Wisconsin may be, but need not be, identical with the principal office in the
State of Wisconsin, and the address of the registered office may be changed from
time to time by the Board of Directors or by the registered agent. The business
office of the registered agent of the corporation shall be identical to such
registered office.
ARTICLE II. SHAREHOLDERS
2.01 Annual Meeting. The annual meeting of the shareholders (the "Annual
Meeting") shall be held on such day in September or October of each year as may
be designated by or under the authority of the Board of Directors, or at such
other time and date as may be fixed by resolution of the Board of Directors. In
fixing a meeting date for any Annual Meeting, the Board of Directors may
consider such factors as it deems relevant within the good faith exercise of its
business judgment. At each Annual Meeting, the shareholders shall elect that
number of directors equal to the number of directors whose term expires at the
time of such meeting. At any such meeting, only other business properly brought
before the meeting in accordance with Section 2.14 of these bylaws may be
transacted. If the election of directors shall not be held on the date
designated herein, or fixed as herein provided, for any Annual Meeting, or any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of shareholders (a "Special Meeting") as soon thereafter as
is practicable.
2.02 Special Meetings.
(a) A Special Meeting may be called only by (i) Chairman of the Board,
(ii) the President or (iii) the Board of Directors and shall be called by the
President upon the demand, in accordance with this Section 2.02, of the holders
of record of shares representing at least 10% of all the votes entitled to be
cast on any issue proposed to be considered at the Special Meeting.
(b) In order that the corporation may determine the shareholders
entitled to demand a Special Meeting, the Board of Directors may fix a record
date to determine the shareholders entitled to make such a demand (the "Demand
Record Date"). The Demand Record Date shall not precede the date upon which the
resolution fixing the Demand Record Date
<PAGE>
is adopted by the Board of Directors and shall not be more than ten days after
the date upon which the resolution fixing the Demand Record Date is adopted by
the Board of Directors. Any shareholder of record seeking to have shareholders
demand a Special Meeting shall, by sending written notice to the Secretary of
the corporation by hand or by certified or registered mail, return receipt
requested, request the Board of Directors to fix a Demand Record Date. The Board
of Directors shall promptly, but in all events within ten days after the date on
which a valid request to fix a Demand Record Date is received, adopt a
resolution fixing the Demand Record Date and shall make a public announcement of
such Demand Record Date. If no Demand Record Date has been fixed by the Board of
Directors within ten days after the date on which such request is received by
the Secretary, the Demand Record Date shall be the 10th day after the first date
on which a valid written request to set a Demand Record Date is received by the
Secretary. To be valid, such written request shall set forth the purpose or
purposes for which the Special Meeting is to be held, shall be signed by one or
more shareholders of record (or their duly authorized proxies or other
representatives), shall bear the date of signature of each such shareholder (or
proxy or other representative) and shall set forth all information about each
such shareholder and about the beneficial owner or owners, if any, on whose
behalf the request is made that would be required to be set forth in a
shareholder's notice described in paragraph (a) (ii) of Section 2.14 of these
bylaws.
(c) In order for a shareholder or shareholders to demand a Special
Meeting, a written demand or demands for a Special Meeting by the holders of
record as of the Demand Record Date of shares representing at least 10% of all
the votes entitled to be cast on any issue proposed to be considered at the
Special Meeting must be delivered to the corporation. To be valid, each written
demand by a shareholder for a Special Meeting shall set forth the specific
purpose or purposes for which the Special Meeting is to be held (which purpose
or purposes shall be limited to the purpose or purposes set forth in the written
request to set a Demand Record Date received by the corporation pursuant to
paragraph (b) of this Section 2.02), shall be signed by one or more persons who
as of the Demand Record Date are shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of signature
of each such shareholder (or proxy or other representative), and shall set forth
the name and address, as they appear in the corporation's books, of each
shareholder signing such demand and the class and number of shares of the
corporation which are owned of record and beneficially by each such shareholder,
shall be sent to the Secretary by hand or by certified or registered mail,
return receipt requested, and shall be received by the Secretary within seventy
days after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting
upon shareholder demand unless, in addition to the documents required by
paragraph (c) of this Section 2.02, the Secretary receives a written agreement
signed by each Soliciting Shareholder (as defined below), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the corporation's
costs of holding the Special Meeting, including the costs of preparing and
mailing proxy materials for the corporation's own solicitation, provided that if
each of the resolutions introduced by any Soliciting Shareholder at such meeting
is adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is elected,
then the Soliciting Shareholders shall not be required to pay
2
<PAGE>
such costs. For purposes of this paragraph (d), the following terms shall have
the meanings set forth below:
(i) "Affiliate" of any Person (as defined herein) shall mean
any Person controlling, controlled by or under common control with
such first Person.
(ii) "Participant" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term in
Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to
any Special Meeting demanded by a shareholder or shareholders, any of
the following Persons:
(A) if the number of shareholders signing the
demand or demands of meeting delivered to the corporation
pursuant to paragraph (c) of this Section 2.02 is ten or
fewer, each shareholder signing any such demand;
(B) if the number of shareholders signing the
demand or demands of meeting delivered to the corporation
pursuant to paragraph (c) of this Section 2.02 is more than
ten, each Person who either (I) was a Participant in any
Solicitation of such demand or demands or (II) at the time
of the delivery to the corporation of the documents
described in paragraph (c) of this Section 2.02 had engaged
or intends to engage in any Solicitation of Proxies for use
at such Special Meeting (other than a Solicitation of
Proxies on behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if
a majority of the directors then in office determine,
reasonably and in good faith, that such Affiliate should be
required to sign the written notice described in paragraph
(c) of this Section 2.02 and/or the written agreement
described in this paragraph (d) in order to prevent the
purposes of this Section 2.02 from being evaded.
3
<PAGE>
(e) Except as provided in the following sentence, any Special Meeting
shall be held at such hour and day as may be designated by whichever of the
Chairman of the Board, the President or the Board of Directors shall have called
such meeting. In the case of any Special Meeting called by the President upon
the demand of shareholders (a "Demand Special Meeting"), such meeting shall be
held at such hour and day as may be designated by the Board of Directors;
provided, however, that the date of any Demand Special Meeting shall be not more
than seventy days after the Meeting Record Date (as defined in Section 2.06
hereof); and provided further that in the event that the directors then in
office fail to designate an hour and date for a Demand Special Meeting within
ten days after the date that valid written demands for such meeting by the
holders of record as of the Demand Record Date of shares representing at least
10% of all the votes entitled to be cast on each issue proposed to be considered
at the Special Meeting are delivered to the corporation (the "Delivery Date"),
then such meeting shall be held at 2:00 P.M. local time on the 100th day after
the Delivery Date or, if such 100th day is not a Business Day (as defined
below), on the first preceding Business Day. In fixing a meeting date for any
Special Meeting, the Chairman of the Board, the President or the Board of
Directors may consider such factors as he or it deems relevant within the good
faith exercise of his or its business judgment, including, without limitation,
the nature of the action proposed to be taken, the facts and circumstances
surrounding any demand for such meeting, and any plan of the Board of Directors
to call an Annual Meeting or a Special Meeting for the conduct of related
business.
(f) The corporation may engage regionally or nationally recognized
independent inspectors of elections to act as an agent of the corporation for
the purpose of promptly performing a ministerial review of the validity of any
purported written demand or demands for a Special Meeting received by the
Secretary. For the purpose of permitting the inspectors to perform such review,
no purported demand shall be deemed to have been delivered to the corporation
until the earlier of (i) five Business Days following receipt by the Secretary
of such purported demand and (ii) such date as the independent inspectors
certify to the corporation that the valid demands received by the Secretary
represent at least 10% of all the votes entitled to be cast on each issue
proposed to be considered at the Special Meeting. Nothing contained in this
paragraph (f) shall in any way be construed to suggest or imply that the Board
of Directors or any shareholder shall not be entitled to contest the validity of
any demand, whether during or after such five Business Day period, or to take
any other action (including, without limitation, the commencement, prosecution
or defense of any litigation with respect thereto).
(g) For purposes of these bylaws, "Business Day" shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of Wisconsin are authorized or obligated by law or executive order to
close.
2.03 Place of Meeting. The Chairman of the Board, the President or the
Board of Directors may designate any place, either within or without the State
of Wisconsin, as the place of meeting for any Annual Meeting or Special Meeting.
If no designation is made, the place of meeting shall be the principal office of
the corporation. Any meeting may be
4
<PAGE>
adjourned to reconvene at any place designated by vote of the Board of Directors
or by the Chairman of the Board or the President.
2.04 Notice of Meeting. Written notice stating the date, time and place of
any meeting of shareholders shall be delivered not less than ten days nor more
than sixty days before the date of the meeting (unless a different time is
provided by the Wisconsin Business Corporation Law or the articles of
incorporation), either personally or by mail, by or at the direction of the
President or the Secretary, to each shareholder of record entitled to vote at
such meeting and to such other persons as required by the Wisconsin Business
Corporation Law. In the event of any Demand Special Meeting, such notice of
meeting shall be sent not more than thirty days after the Delivery Date. If
mailed, notice pursuant to this Section 2.04 shall be deemed to be effective
when deposited in the United States mail, addressed to the shareholder at his or
her address as it appears on the stock record books of the corporation, with
postage thereon prepaid. Unless otherwise required by the Wisconsin Business
Corporation Law or the articles of incorporation of the corporation, a notice of
an Annual Meeting need not include a description of the purpose for which the
meeting is called. In the case of any Special Meeting, (a) the notice of meeting
shall describe any business that the Board of Directors shall have theretofore
determined to bring before the meeting and (b) in the case of a Demand Special
Meeting, the notice of meeting (i) shall describe any business set forth in the
statement of purpose of the demands received by the corporation in accordance
with Section 2.02 of these bylaws and (ii) shall contain all of the information
required in the notice received by the corporation in accordance with Section
2.14(b) of these bylaws. If an Annual Meeting or Special Meeting is adjourned to
a different date, time or place, the corporation shall not be required to give
notice of the new date, time or place if the new date, time or place is
announced at the meeting before adjournment; provided, however, that if a new
Meeting Record Date for an adjourned meeting is or must be fixed, the
corporation shall give notice of the adjourned meeting to persons who are
shareholders as of the new Meeting Record Date.
2.05 Waiver of Notice. A shareholder may waive any notice required by the
Wisconsin Business Corporation Law, the articles of incorporation or these
bylaws before or after the date and time stated in the notice. The waiver shall
be in writing and signed by the shareholder entitled to the notice, contain the
same information that would have been required in the notice under applicable
provisions of the Wisconsin Business Corporation Law (except that the time and
place of meeting need not be stated) and be delivered to the corporation for
inclusion in the corporate records. A shareholder's attendance at any Annual
Meeting or Special Meeting, in person or by proxy, waives objection to all of
the following: (a) lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting or promptly upon arrival objects to
holding the meeting or transacting business at the meeting; and (b)
consideration of a particular matter at the meeting that is not within the
purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
2.06 Fixing of Record Date. The Board of Directors may fix in advance a
date not less than ten days and not more than seventy days prior to the date of
an Annual Meeting or
5
<PAGE>
Special Meeting as the record date for the determination of shareholders
entitled to notice of, or to vote at, such meeting (the "Meeting Record Date").
In the case of any Demand Special Meeting, (i) the Meeting Record Date shall be
not later than the 30th day after the Delivery Date and (ii) if the Board of
Directors fails to fix the Meeting Record Date within thirty days after the
Delivery Date, then the close of business on such 30th day shall be the Meeting
Record Date. The shareholders of record on the Meeting Record Date shall be the
shareholders entitled to notice of and to vote at the meeting. Except as
provided by the Wisconsin Business Corporation Law for a court-ordered
adjournment, a determination of shareholders entitled to notice of and to vote
at an Annual Meting or Special Meeting its effective for any adjournment of such
meeting unless the Board of Directors fixes a new Meeting Record Date, which it
shall do if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting. The Board of Directors may also fix in advance a
date as the record date for the purpose of determining shareholders entitled to
take any other action or determining shareholders for any other purpose. Such
record date shall not be more than seventy days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken.
The record date for determining shareholders entitled to a distribution (other
than a distribution involving a purchase, redemption or other acquisition of the
corporation's shares) or a share dividend is the date on which the Board of
Directors authorized the distribution or share dividend, as the case may be,
unless the Board of Directors fixes a different record date.
2.07 Shareholders' List for Meetings. After a Meeting Record Date has been
fixed, the corporation shall prepare a list of the names of all of the
shareholders entitled to notice of the meeting. The list shall be arranged by
class or series of shares, if any, and show the address of and number of shares
held by each shareholder. Such list shall be available for inspection by any
shareholder, beginning two business days after notice of the meeting is given
for which the list was prepared and continuing to the date of the meeting, at
the corporation's principal office or at a place identified in the meeting
notice in the city where the meeting will be held. A shareholder or his or her
agent may, on written demand, inspect and, subject to the limitations imposed by
the Wisconsin Business Corporation Law, copy the list, during regular business
hours and at his or her expense, during the period that it is available for
inspection pursuant to this Section 2.07. The corporation shall make the
shareholders' list available at the meeting and any shareholder or his or her
agent or attorney may inspect the list at any time during the meeting or any
adjournment thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken at a
meeting of shareholders.
2.08 Quorum and Voting Requirements.
(a) Shares entitled to vote as a separate voting group may take action on a
matter at any Annual Meeting or Special Meeting only if a quorum of those shares
exists with respect to that matter. If the corporation has only one class of
stock outstanding, such class shall constitute a separate voting group for
purposes of this Section 2.08. Except as otherwise provided in the articles of
incorporation, any bylaw adopted under authority granted in the articles of
incorporation, or the Wisconsin Business Corporation Law, a majority of the
votes
6
<PAGE>
entitled to be cast on the matter shall constitute a quorum of the voting group
for action on that matter. Once a share is represented for any purpose at any
Annual Meeting or Special Meeting, other than for the purpose of objecting to
holding the meeting or transacting business at the meeting, it is considered
present for purposes of determining whether a quorum exists for the remainder of
the meeting and for any adjournment of that meeting unless a new Meeting Record
Date is or must be set for the adjourned meeting. If a quorum exists, except in
the case of the election of directors, action on a matter shall be approved if
the votes cast within the voting group favoring the action exceed the votes cast
opposing the action, unless the articles of incorporation, any bylaw adopted
under authority granted in the articles of incorporation, or the Wisconsin
Business Corporation Law requires a greater number of affirmative votes. Unless
otherwise provided in the articles of incorporation, directors shall be elected
by a plurality of the votes cast by the shares entitled to vote in the election
of directors at any Annual Meeting or Special Meeting at which a quorum is
present. For purposes of this Section 2.08, "plurality" means that the
individuals with the largest number of votes are elected as directors up to the
maximum number of directors to be chosen at the meeting.
(b) The Board of Directors acting by resolution may postpone and
reschedule any previously scheduled Annual Meeting or Special Meeting; provided,
however, that a Demand Special Meeting shall not be postponed beyond the 100th
day following the Delivery Date. Any Annual Meeting or Special Meeting may be
adjourned from time to time, whether or not there is a quorum, (i) at any time,
upon a resolution by shareholders if the votes cast in favor of such resolution
by the holders of shares of each voting group entitled to vote on any matter
theretofore properly brought before the meeting exceed the number of votes cast
against such resolution by the holders of shares of each such voting group or
(ii) at any time prior to the transaction of any business at such meeting, by
the Chairman of the Board or the President or pursuant to a resolution of the
Board of Directors. No notice of the time and place of adjourned meetings need
be given except as required by the Wisconsin Business Corporation Law. At any
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
2.09. Conduct of Meeting. The Chief Executive Officer, and in his or her
absence, the Chairman of the Board or the President, as the case may be, and in
their absence, a Vice President in the order provided under Section 4.09 hereof,
and in their absence, any person chosen by the shareholders represented at the
meeting in person or by proxy shall call any Annual Meeting or Special Meeting
to order and shall act as chairperson of the meeting, and the Secretary of the
corporation shall act as secretary of all meetings of the shareholders, but, in
the absence of the Secretary, the presiding officer may appoint any other person
to act as secretary of the meeting.
2.10 Proxies. At any Annual Meeting or Special Meeting, a shareholder may
vote his or her shares in person or by proxy. A shareholder may appoint a proxy
to vote or otherwise act for the shareholder by signing an appointment form,
either personally or by his or her attorney-in-fact. An appointment of a proxy
is effective when received by the Secretary or other officer or agent of the
corporation authorized to tabulate votes. An appointment is
7
<PAGE>
valid for eleven months from the date of its signing unless a different period
is expressly provided in the appointment form.
2.11 Voting of Shares. Except as provided in the articles of incorporation
or in the Wisconsin Business Corporation Law, each outstanding share of Common
Stock is entitled to one (1) vote, and each outstanding share of Class B Common
Stock shall be entitled to ten (10) votes, upon each matter voted on at an
Annual Meeting or Special Meeting.
2.12 Action without Meeting. Any action required or permitted by the
articles of incorporation or these bylaws or any provision of the Wisconsin
Business Corporation Law to be taken at an Annual Meeting or Special Meeting may
be taken without a meeting of Directors if a written consent or consents,
describing the action so taken, is signed by all of the shareholders entitled to
vote with respect to the subject matter thereof and delivered to the corporation
for inclusion in the corporate records.
2.13 Acceptance of Instruments Showing Shareholder Action. If the name
signed on a vote, consent, waiver or proxy appointment corresponds to the name
of a shareholder, the corporation, if acting in good faith, may accept the vote,
consent, waiver or proxy appointment and give it effect as the act of a
shareholder. If the name signed on a vote, consent, waiver or proxy appointment
does not correspond to the name of a shareholder, the corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment and give
it effect as the act of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the shareholder
and, if the corporation requests, evidence of fiduciary status acceptable to the
corporation is presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence of this
status acceptable to the corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the signatory's authority to sign for
the shareholder is presented with respect to the vote, consent, waiver or proxy
appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
8
<PAGE>
The corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
2.14 Notice of Shareholder Business and Nomination of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be
considered by the shareholders may be made at an Annual Meeting (A)
pursuant to the corporation's notice of meeting, (B) by or at the
direction of the Board of Directors or (C) by any shareholder of the
corporation who is a shareholder of record at the time of giving of
notice provided for in this bylaw and who is entitled to vote at the
meeting and complies with the notice procedures set forth in this
Section 2.14.
(ii) For nominations or other business to be properly
brought before an Annual Meeting by a shareholder pursuant to clause
(C) of paragraph (a)(i) of this Section 2.14, the shareholder must
have given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a shareholder's notice shall be received by
the Secretary of the corporation at the principal offices of the
corporation not later than the earlier of (A) 45 days in advance of
the first annual anniversary (the "Anniversary Date") of the date set
forth in the corporation's proxy statement for the prior year's Annual
Meeting as the date on which the corporation first mailed definitive
proxy materials for the prior year's Annual Meeting and (B) the later
of (x) the 70th day prior to such Annual Meeting and (y) the 10th day
following the day on which public announcement of the date of such
meeting is first made. Such shareholder's notice shall be signed by
the shareholder of record who intends to make the nomination or
introduce the other business (or his duly authorized proxy or other
representative), shall bear the date of signature of such shareholder
(or proxy or other representative) and shall set forth: (A) the name
and address, as they appear on this corporation's books, of such
shareholder and the beneficial owner or owners, if any, on whose
behalf the nomination or proposal is made; (B) the class and number of
shares of the corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that
such shareholder is a holder of record of shares of the corporation
entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to make the nomination or introduce the other
business specified in the notice; (D) in the case of any proposed
nomination for election or re-election as a director, (I) the name and
residence address of the person or persons to be nominated, (II) a
description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and any
other person or persons (naming such person or persons) pursuant to
which the nomination is to be made by such shareholder, (III) such
other information regarding each nominee proposed by such shareholder
as would be required to be disclosed in solicitations of proxies for
elections
9
<PAGE>
of directors, or would be otherwise required to be disclosed, in each
case pursuant to Regulation 14A under the Exchange Act, including any
information that would be required to be included in a proxy statement
filed pursuant to Regulation 14A had the nominee been nominated by the
Board of Directors and (IV) the written consent of each nominee to be
named in a proxy statement and to serve as a director of the
corporation if so elected; and (E) in the case of any other business
that such shareholder proposes to bring before the meeting, (I) a
brief description of the business desired to be brought before the
meeting and, if such business includes a proposal to amend these
bylaws, the language of the proposed amendment, (II) such
shareholder's and beneficial owner's or owners' reasons for conducting
such business at the meeting and (III) any material interest in such
business of such shareholder and beneficial owner or owners.
(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 2.14 to the contrary, in the event
that the number of directors to be elected to the Board of Directors
of the corporation is increased and there is no public announcement
naming all of the nominees for director or specifying the size of the
increased Board of Directors made by the corporation at least 45 days
prior to the Anniversary Date, a shareholder's notice required by this
Section 2.14 shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall
be received by the Secretary at the principal offices of the
corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by
the corporation.
(b) Special Meetings. Only such business shall be conducted at a
Special Meeting as shall have been described in the notice of meeting sent to
shareholders pursuant to Section 2.04 of these bylaws. Nominations of persons
for election to the Board of Directors may be made at a Special Meeting at which
directors are to be elected pursuant to such notice of meeting (i) by or at the
direction of the Board of Directors or (ii) by any shareholder of the
corporation who (A) is a shareholder of record at the time of giving of such
notice of meeting, (B) is entitled to vote at the meeting and (C) complies with
the notice procedures set forth in this Section 2.14. Any shareholder desiring
to nominate persons for election to the Board of Directors at such a Special
Meeting shall cause a written notice to be received by the Secretary of the
corporation at the principal offices of the corporation not earlier than ninety
days prior to such Special Meeting and not later than the close of business on
the later of (x) the 60th day prior to such Special Meeting and (y) the 10th day
following the day on which public announcement is first made of the date of such
Special Meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. Such written notice shall be signed by the shareholder
of record who intends to make the nomination (or his duly authorized proxy or
other representative), shall bear the date of signature of such shareholder (or
proxy or other representative) and shall set forth: (A) the name and address, as
they appear on the corporation's books, of such shareholder and the beneficial
owner or owners, if any, on whose behalf the nomination is made; (B) the class
and number of shares of the corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that such
shareholder is a holder of record of shares of the corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
make the nomination
10
<PAGE>
specified in the notice; (D) the name and residence address of the person or
persons to be nominated; (E) a description of all arrangements or understandings
between such shareholder or beneficial owner or owners and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination is to be made by such shareholder; (F) such other information
regarding each nominee proposed by such shareholder as would be required to be
disclosed in solicitations of proxies for elections of directors, or would be
otherwise required to be disclosed, in each case pursuant to Regulation 14A
under the Exchange Act, including any information that would be required to be
included in a proxy statement filed pursuant to Regulation 14A had the nominee
been nominated by the Board of Directors; and (G) the written consent of each
nominee to be named in a proxy statement and to serve as a director of the
corporation if so elected.
(c) General.
(i) Only persons who are nominated in accordance with the
procedures set forth in this Section 2.14 shall be eligible to serve
as directors. Only such business shall be conducted at an Annual
Meeting or Special Meeting as shall have been brought before such
meeting in accordance with the procedures set forth in this Section
2.14. The chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the procedures set
forth in this Section 2.14 and, if any proposed nomination or business
is not in compliance with this Section 2.14, to declare that such
defective proposal shall be disregarded.
(ii) For purposes of this Section 2.14, "public
announcement" shall mean disclosure in a press release reported by the
Dow Jones News Service, Associated Press or comparable national news
service or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d)
of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this
Section 2.14, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section 2.14.
Nothing in this Section 2.14 shall be deemed to limit the
corporation's obligation to include shareholder proposals in its proxy
statement if such inclusion is required by Rule 14a-8 under the
Exchange Act.
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Number. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the corporation
managed under the direction of, the Board of Directors. The number of directors
constituting the Board of Directors of the corporation shall initially be seven
(7) and thereafter such number as is fixed from time to time by a majority vote
of the Board of Directors then in office.
11
<PAGE>
3.015. Directors Emeritus. Any person who has reached sixty-five (65) years
of age and has served as a director of the corporation, including service as a
director of any corporation with which the corporation is affiliated through
common stock ownership, for at least ten years, or as an officer and director of
the corporation for at least ten years, may, after retirement or resignation
from the Board of Directors, be appointed by the Board of Directors as a
Director Emeritus to serve until he or she resigns or his or her appointment is
terminated by resolution adopted by a majority of the entire Board of Directors.
Directors Emeritus shall serve in an advisory capacity to the Board of
Directors, shall be entitled to attend meetings of the Board of Directors, shall
be reimbursed for their expenses in attending meetings of the Board of
Directors, and shall receive the same fees and compensation paid to directors.
Directors Emeritus shall have no vote on matters brought before the Board of
Directors and shall not be considered as directors under the Articles of
Incorporation or Bylaws of the corporation; provided, however, that Directors
Emeritus shall be entitled to the liability limitations accorded directors set
forth in Section 180.0828 of the Wisconsin Business Corporation Law and the
indemnification and expense reimbursement provisions accorded directors under
Article VIII of these bylaws, as if such Directors Emeritus were, for such
purposes only, directors of the corporation.
3.02 Tenure and Qualifications. Each director shall hold office until the
next annual meeting of shareholders and until his or her successor shall have
been elected and, if necessary, qualified, or until there is a decrease in the
number of directors which takes effect after the expiration of his or her term,
or until his or her prior death, resignation or removal. A director may be
removed by the shareholders only at a meeting called for the purpose of removing
the director, and the meeting notice shall state that the purpose, or one of the
purposes, of the meeting is removal of the director. A director may be removed
from office with or without cause if the number of votes cast to remove the
director exceeds the number of votes cast not to remove such director. A
director may resign at any time by delivering written notice which complies with
the Wisconsin Business Corporation Law to the Board of Directors, to the
President (in his or her capacity as chairperson of the board of directors) or
to the corporation. A director's resignation is effective when the notice is
delivered unless the notice specifies a later effective date. Directors need not
be residents of the State of Wisconsin or shareholders of the corporation. The
mandatory retirement of a director, who is not otherwise also serving as an
officer of the corporation, from the Board of Directors shall take effect at the
conclusion of the annual meeting of the shareholders next following the date on
which said director attains the age of seventy (70) years. No person, other than
a person who is then serving as an officer of the corporation, shall be eligible
for election to the office of director after he or she shall have attained the
age of seventy (70) years. In either case above, with respect to existing
directors of the corporation as of September 28, 1995, the foregoing two
sentences shall not take effect until immediately prior to the corporation's
1997 annual meeting of shareholders, unless any such director voluntarily
retires from the Board of Directors prior to such time.
3.03 Regular Meetings. A regular meeting of the Board of Directors shall be
held without other notice than this bylaw immediately after the annual meeting
of shareholders and each adjourned session thereof. The place of such regular
meeting shall be the same as the
12
<PAGE>
place of the meeting of shareholders which precedes it, or such other suitable
place as may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the date, time and place, either within or
without the State of Wisconsin, for the holding of additional regular meetings
of the Board of Directors without other notice than such resolution.
3.04 Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chief Executive Officer, the Chairman of the
Board, the President, the Secretary or any two directors. The President or
Secretary may fix any place, either within or without the State of Wisconsin, as
the place for holding any special meeting of the Board of Directors, and if no
other place is fixed the place of the meeting shall be the principal office of
the corporation in the State of Wisconsin.
3.05 Notice; Waiver. Notice of each meeting of the Board of Directors
(unless otherwise provided in or pursuant to Section 3.03) shall be given by
written notice delivered in person, by telegraph, teletype, facsimile or other
form of wire or wireless communication, or by mail or private carrier, to each
director at his business address or at such other address as such director shall
have designated in writing filed with the Secretary, in each case not less than
forty-eight (48) hours prior to the meeting. The notice need not describe the
purpose of the meeting of the Board of Directors or the business to be
transacted at such meeting. If mailed, such notice shall be deemed to be
effective when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice is given by telegram, such notice shall be deemed to
be effective when the telegram is delivered to the telegraph company. If notice
is given by private carrier, such notice shall be deemed to be effective when
delivered to the private carrier. Whenever any notice whatever is required to be
given to any director of the corporation under the articles of incorporation or
these bylaws or any provision of the Wisconsin Business Corporation Law, a
waiver thereof in writing, signed at any time, whether before or after the date
and time of meeting, by the director entitled to such notice shall be deemed
equivalent to the giving of such notice. The corporation shall retain any such
waiver as part of the permanent corporate records. A director's attendance at or
participation in a meeting waives any required notice to him or her of the
meeting unless the director at the beginning of the meeting or promptly upon his
or her arrival objects to holding the meeting or transacting business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting.
3.06 Quorum. Except as otherwise provided by the Wisconsin Business
Corporation Law or by the articles of incorporation or these bylaws, a majority
of the number of directors specified in Section 3.01 of these bylaws shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors. Except as otherwise provided by the Wisconsin Business Corporation
Law or by the articles of incorporation or by these bylaws, a quorum of any
committee of the Board of Directors created pursuant to Section 3.12 hereof
shall consist of a majority of the number of directors appointed to serve on the
committee. A majority of the directors present (though less than such quorum)
may adjourn any meeting of the Board of Directors or any committee thereof, as
the case may be, from time to time without further notice.
13
<PAGE>
3.07. Manner of Acting. The affirmative vote of a majority of the directors
present at a meeting of the Board of Directors or a committee thereof at which a
quorum is present shall be the act of the Board of Directors or such committee,
as the case may be, unless the Wisconsin Business Corporation Law, the articles
of incorporation or these bylaws require the vote of a greater number of
directors.
3.08. Conduct of Meetings. The Chief Executive Officer, and in his or her
absence, the Chairman of the Board or the President, as the case may be, and in
their absence, a Vice President, in the order provided under Section 4.09, and
in their absence, any director chosen by the directors present, shall call
meetings of the Board of Directors to order and shall act as chairperson of the
meeting. The Secretary of the corporation shall act as secretary of all meetings
of the Board of Directors but in the absence of the Secretary, the presiding
officer may appoint any other person present to act as secretary of the meeting.
Minutes of any regular or special meeting of the Board of Directors shall be
prepared and distributed to each director.
3.09 Vacancies. Except as provided below, any vacancy occurring in the
Board of Directors, including a vacancy resulting from an increase in the number
of directors, may be filled by any of the following: (a) the shareholders; (b)
the Board of Directors; or (c) if the directors remaining in office constitute
fewer than a quorum of the Board of Directors, the directors, by the affirmative
vote of a majority of all directors remaining in office. In the case of a
vacancy created by the removal of a director by vote of the shareholders, the
shareholders shall have the right to fill such vacancy at the same meeting or
any adjournment thereof. If the vacant office was held by a director elected by
a voting group of shareholders, only the holders of shares of that voting group
may vote to fill the vacancy if it is filled by the shareholders, and only the
remaining directors elected by that voting group may vote to fill the vacancy if
it is filled by the directors. A vacancy that will occur at a specific later
date, because of a resignation effective at a later date or otherwise, may be
filled before the vacancy occurs, but the new director may not take office until
the vacancy occurs.
3.10 Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the corporation as directors or may delegate such
authority to an appropriate committee. The Board of Directors also shall have
authority to provide for or delegate authority to an appropriate committee to
provide for reasonable pensions, disability or death benefits, and other
benefits or payments, to directors, officers and employees and to their estates,
families, dependents or beneficiaries on account of prior services rendered by
such directors, officers and employees to the corporation.
3.11 Presumption of Assent. A director who is present and is announced as
present at a meeting of the Board of Directors or any committee thereof created
in accordance with Section 3.12 hereof, when corporate action is taken, assents
to the action taken unless any of the following occurs: (a) the director objects
at the beginning of the meeting or promptly upon his or her arrival to holding
the meeting or transacting business at the meeting; (b) the director dissents or
abstains from an action taken and minutes of the meeting are prepared that show
the
14
<PAGE>
director's dissent or abstention from the action taken; (c) the director
delivers written notice that complies with the Wisconsin Business Corporation
Law of his or her dissent or abstention to the presiding officer of the meeting
before its adjournment or to the corporation immediately after adjournment of
the meeting; or (d) the director dissents or abstains from an action taken,
minutes of the meeting are prepared that fail to show the director's dissent or
abstention from the action taken, and the director delivers to the corporation a
written notice of that failure that complies with the Wisconsin Business
Corporation Law promptly after receiving the minutes. Such right of dissent or
abstention shall not apply to a director who votes in favor of the action taken.
3.12 Committees. The Board of Directors by resolution adopted by the
affirmative vote of a majority of all of the directors then in office may create
one or more committees, appoint members of the Board of Directors to serve on
the committees and designate other members of the Board of Directors to serve as
alternates. Each committee shall have two or more members who shall, unless
otherwise provided by the Board of Directors, serve at the pleasure of the Board
of Directors. A committee may be authorized to exercise the authority of the
Board of Directors, except that a committee may not do any of the following: (a)
authorize distributions; (b) approve or propose to shareholders action that the
Wisconsin Business Corporation Law requires to be approved by shareholders; (c)
fill vacancies on the Board of Directors or, unless the Board of Directors
provides by resolution that vacancies on a committee shall be filled by the
affirmative vote of the remaining committee members, on any Board committee; (d)
amend the corporation's articles of incorporation; (e) adopt, amend or repeal
bylaws; (f) approve a plan of merger not requiring shareholder approval; (g)
authorize or approve reacquisition of shares, except according to a formula or
method prescribed by the Board of Directors; and (h) authorize or approve the
issuance or sale or contract for sale of shares, or determine the designation
and relative rights, preferences and limitations of a class or series of shares,
except that the Board of Directors may authorize a committee to do so within
limits prescribed by the Board of Directors. Unless otherwise provided by the
Board of Directors in creating the committee, a committee may employ counsel,
accountants and other consultants to assist it in the exercise of its authority.
3.13 Telephonic Meetings. Except as herein provided and notwithstanding any
place set forth in the notice of the meeting or these bylaws, members of the
Board of Directors (and any committees thereof created pursuant to Section 3.12
hereof) may participate in regular or special meetings by, or through the use
of, any means of communication by which all participants may simultaneously hear
each other, such as by conference telephone. If a meeting is conducted by such
means, then at the commencement of such meeting the presiding officer shall
inform the participating directors that a meeting is taking place at which
official business may be transacted. Any participant in a meeting by such means
shall be deemed present in person at such meeting. Notwithstanding the
foregoing, no action may be taken at any meeting held by such means on any
particular matter which the presiding officer determines, in his or her sole
discretion, to be inappropriate under the circumstances for action at a meeting
held by such means. Such determination shall be made and announced in advance of
such meeting.
15
<PAGE>
3.14 Action Without Meeting. Any action required or permitted by the
Wisconsin Business Corporation Law to be taken at a meeting of the Board of
Directors or a committee thereof created pursuant to Section 3.12 hereof may be
taken without a meeting if the action is taken by all members of the Board or of
the committee. The action shall be evidenced by one or more written consents
describing the action taken, signed by each director or committee member and
retained by the corporation. Such action shall be effective when the last
director or committee member signs the consent, unless the consent specifies a
different effective date.
ARTICLE IV. OFFICERS
4.01 Number. The principal officers of the corporation shall be a
President, a Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors. A Chairman of the Board, any number of Vice Presidents,
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the Board of Directors. The Board of Directors may also
authorize any duly appointed officer to appoint one or more officers or
assistant officers. The Chief Executive Officer, designated in accordance with
Section 4.06 of these By-laws, may from time to time appoint any number of Vice
Presidents as he shall determine necessary who shall hold their offices for such
terms and shall exercise such powers and perform such duties as the Chief
Executive Officer shall from time to time determine. Any two or more offices may
be held by the same person.
4.02 Election and Term of Office. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as is practicable.
Each officer shall hold office until his or her successor shall have been duly
elected or until his or her prior death, resignation or removal.
4.03 Removal. The Board of Directors may remove any officer and, unless
restricted by the Board of Directors or these By-laws, an officer may remove any
officer or assistant officer appointed by that officer, at any time, with or
without cause and notwithstanding the contract rights, if any, of the officer
removed. The appointment of an officer does not of itself create contract
rights.
4.04 Resignation. An officer may resign at any time by delivering notice to
the corporation that complies with the Wisconsin Business Corporation Law. The
resignation shall be effective when the notice is delivered, unless the notice
specifies a later effective date and the corporation accepts the later effective
date.
4.05 Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, shall be filled by the
Board of Directors for the unexpired portion of the term. If a resignation of an
officer is effective at a later date as contemplated by Section 4.04 hereof, the
Board of Directors may fill the pending vacancy before the effective date if the
Board provides that the successor may not take office until the effective date.
16
<PAGE>
4.06 Chief Executive Officer. The Board of Directors shall from time to
time designate the Chairman of the Board, if any, or the President of the
corporation as the Chief Executive Officer of the corporation. The President
shall be the Chief Executive Officer whenever the office of Chairman of the
Board of the corporation is vacant. Subject to the control of the Board of
Directors, the Chief Executive Officer shall in general supervise and control
all of the business and affairs of the corporation. He shall preside at all
meetings of the shareholders and of the Board of Directors. He shall have
authority, subject to such rules as may be prescribed by the Board of Directors,
to appoint and remove such agents and employees of the corporation as he shall
deem necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. He shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, securities,
contracts, leases, reports, and all other documents or other instruments
necessary or proper to be executed in the course of the corporation's regular
business, or which shall be authorized by resolution of the Board of Directors;
and, except as otherwise provided by law or the Board of Directors, he may
authorize any elected Vice President or other officer or agent of the
corporation to sign, execute and acknowledge such documents or instruments in
his place and stead. In general, he shall perform all duties incident to the
office of Chief Executive Officer of the corporation and such other duties as
may be prescribed by the Board of Directors from time to time.
4.07 Chairman of the Board. The Chairman of the Board, if one be chosen by
the Board of Directors, when present, and in the absence of the Chief Executive
Officer if the President is designated as the Chief Executive Officer, shall
preside at all meetings of the Board of Directors and of the shareholders and
shall perform all duties incident to the office of Chairman of the Board of the
corporation and such other duties as may be prescribed by the Board of Directors
from time to time.
4.08 President. The President shall be the principal executive officer of
the corporation and, subject to the direction of the Board of Directors, shall
in general supervise and control all of the business and affairs of the
corporation; provided, however, that should the Board of Directors elect a
Chairman of the Board, any or all of the powers customarily incidental to the
office of President may be assigned by the Board of Directors to the Chairman of
the Board. If the Chairman of the Board is designated as the Chief Executive
Officer, the President shall be the chief operating officer of the corporation.
Unless the Board of Directors otherwise provides, in the absence of the Chairman
of the Board or in the event of his inability or refusal to act, or in the event
of a vacancy in the office of the Chairman of the Board, the President shall
perform the duties of the Chairman of the Board, and when so acting shall have
all the powers of and be subject to all the restrictions upon the Chairman of
the Board. The President shall, when present, preside at all meetings of the
shareholders and of the Board of Directors. He or she shall have authority,
subject to such rules as may be prescribed by the Board of Directors, to appoint
such agents and employees of the corporation as he or she shall deem necessary,
to prescribe their powers, duties and compensation, and to delegate authority to
them. Such agents and employees shall hold office at the discretion of the
President. He or she shall have authority to sign, execute and acknowledge, on
behalf of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases, reports and all other documents or instruments necessary or
proper to be executed in the course of the corporation's regular
17
<PAGE>
business, or which shall be authorized by resolution of the Board of Directors;
and, except as otherwise provided by law or the Board of Directors, he or she
may authorize any Vice President or other officer or agent of the corporation to
sign, execute and acknowledge such documents or instruments in his or her place
and stead. In general he or she shall perform all duties incident to the office
of President and such other duties as may be prescribed by the Board of
Directors from time to time.
4.09 The Vice Presidents. In the absence of the Chairman of the Board, if
any, and the President or in the event of their death, inability or refusal to
act, or in the event for any reason it shall be impracticable for the Chairman
of the Board and the President to act personally, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated by the Board of Directors or the Chief Executive Officer, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the Chairman of the Board and/or the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chairman of the Board and/or the President. Any Vice President may sign,
with the Secretary or Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties and have such authority as from
time to time may be delegated or assigned to him or her by the Chief Executive
Officer, the President or the Board of Directors. The execution of any
instrument of the corporation by any Vice President shall be conclusive
evidence, as to third parties, of his or her authority to act in the stead of
the Chairman of the Board and/or the President.
4.10 The Secretary. The Secretary shall: (a) keep minutes of the meetings
of the shareholders and of the Board of Directors (and of committees thereof) in
one or more books provided for that purpose (including records of actions taken
by the shareholders or the Board of Directors (or committees thereof) without a
meeting); (b) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by the Wisconsin Business Corporation
Law; (c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all documents
the execution of which on behalf of the corporation under its seal is duly
authorized; (d) maintain a record of the shareholders of the corporation, in a
form that permits preparation of a list of the names and addresses of all
shareholders, by class or series of shares and showing the number and class or
series of shares held by each shareholder; (e) sign with the President, or a
Vice President, certificates for shares of the corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the corporation; and (g) in
general perform all duties incident to the office of Secretary and have such
other duties and exercise such authority as from time to time may be delegated
or assigned by the Chief Executive Officer, the President or by the Board of
Directors.
4.11 The Treasurer. The Treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation; (b) maintain
appropriate accounting records; (c) receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, and deposit all such
moneys in the name of the corporation in such banks, trust companies or other
depositaries as shall be selected in accordance with the provisions of Section
5.04; and (d) in general perform all of the duties incident to the office of
Treasurer and
18
<PAGE>
have such other duties and exercise such other authority as from time to time
may be delegated or assigned by the Chief Executive Officer or by the Board of
Directors. If required by the Board of Directors, the Treasurer shall give a
bond for the faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
4.12 Assistant Secretaries and Assistant Treasurers. There shall be such
number of Assistant Secretaries and Assistant Treasurers as the Board of
Directors or the Chief Executive Officer may from time to time authorize. The
Assistant Secretaries may sign with the President or a Vice President
certificates for shares of the corporation the issuance of which shall have been
authorized by a resolution of the Board of Directors. The Assistant Treasurers
shall respectively, if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such sureties as the
Board of Directors shall determine. The Assistant Secretaries and Assistant
Treasurers, in general, shall perform such duties and have such authority as
shall from time to time be delegated or assigned to them by the Secretary or the
Treasurer, respectively, or by the Chief Executive Officer, the President or the
Board of Directors.
4.13 Other Assistants and Acting Officers. The Board of Directors and the
Chief Executive Officer shall have the power to appoint, or to authorize any
duly appointed officer of the corporation to appoint, any person to act as
assistant to any officer, or as agent for the corporation in his or her stead,
or to perform the duties of such officer whenever for any reason it is
impracticable for such officer to act personally, and such assistant or acting
officer or other agent so appointed by the Board of Directors or the Chief
Executive Officer shall have the power to perform all the duties of the office
to which he or she is so appointed to be an assistant, or as to which he or she
is so appointed to act, except as such power may be otherwise defined or
restricted by the Board of Directors or the appointing officer.
4.14 Salaries. The salaries of the principal officers shall be fixed from
time to time by the Board of Directors or by a duly authorized committee
thereof, and no officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a director of the corporation.
ARTICLE V. CONTRACTS, LOANS,
CHECKS AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01 Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages and instruments of assignment or
pledge made by the corporation shall be executed in the name of the corporation
by the Chief Executive Officer, the President or one of the Vice Presidents and
by the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer; the Secretary or an Assistant Secretary, when necessary or required,
shall affix the corporate seal, if any, thereto; and when so executed no other
party to such instrument or any third party shall be required to make any
inquiry into the authority of the signing officer or officers.
19
<PAGE>
5.02 Loans. No indebtedness for borrowed money shall be contracted on
behalf of the corporation and no evidences of such indebtedness shall be issued
in its name unless authorized by or under the authority of a resolution of the
Board of Directors. Such authorization may be general or confined to specific
instances.
5.03 Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation, shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
or under the authority of a resolution of the Board of Directors.
5.04 Deposits. All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositaries as may be selected by or under the
authority of a resolution of the Board of Directors.
5.05 Voting of Securities Owned by this Corporation. Subject always to the
specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he or she be present, or in
his or her absence by any Vice President of this corporation who may be present,
and (b) whenever, in the judgment of the President, or in his or her absence, of
any Vice President, it is desirable for this corporation to execute a proxy or
written consent in respect to any shares or other securities issued by any other
corporation and owned by this corporation, such proxy or consent shall be
executed in the name of this corporation by the President or one of the Vice
Presidents of this corporation, without necessity of any authorization by the
Board of Directors, affixation of corporate seal, if any, or countersignature or
attestation by another officer. Any person or persons designated in the manner
above stated as the proxy or proxies of this corporation shall have full right,
power and authority to vote the shares or other securities issued by such other
corporation and owned by this corporation the same as such shares or other
securities might be voted by this corporation.
ARTICEL VI. CERTIFICATES FOR SHARES; TRANSFER OF SHARES
6.01 Certificates for Shares. Certificates representing shares of the
corporation shall be in such form, consistent with the Wisconsin Business
Corporation Law, as shall be determined by the Board of Directors. Such
certificates shall be signed by the President or a Vice President and by the
Secretary or an Assistant Secretary. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for transfer shall
be cancelled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and cancelled, except as
provided in Section 6.06 hereof.
20
<PAGE>
6.02 Facsimile Signatures and Seal. The seal of the corporation, if any, on
any certificates for shares may be a facsimile. The signature of the President
or Vice President and the Secretary or Assistant Secretary upon a certificate
may be facsimiles if the certificate is manually signed on behalf of a transfer
agent, or a registrar, other than the corporation itself or an employee of the
corporation.
6.03 Signature by Former Officers. The validity of a share certificate is
not affected if a person who signed the certificate (either manually or in
facsimile) no longer holds office when the certificate is issued.
6.04 Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer the corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications and otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the corporation with a
request to register for transfer, the corporation shall not be liable to the
owner or any other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the necessary
endorsements, and (b) the corporation had no duty to inquire into adverse claims
or has discharged any such duty. The corporation may require reasonable
assurance that such endorsements are genuine and effective and compliance with
such other regulations as may be prescribed by or under the authority of the
Board of Directors.
6.05 Restrictions on Transfer. The face or reverse side of each certificate
representing shares shall bear a conspicuous notation of any restriction imposed
by the corporation upon the transfer of such shares.
6.06 Lost, Destroyed or Stolen Certificates. Where the owner claims that
certificates for shares have been lost, destroyed or wrongfully taken, a new
certificate shall be issued in place thereof if the owner (a) so requests before
the corporation has notice that such shares have been acquired by a bona fide
purchaser, (b) files with the corporation a sufficient indemnity bond if
required by the Board of Directors or any principal officer, and (c) satisfies
such other reasonable requirements as may be prescribed by or under the
authority of the Board of Directors.
6.07 Consideration for Shares. The Board of Directors may authorize shares
to be issued for consideration consisting of any tangible or intangible property
or benefit to the corporation, including cash, promissory notes, services
performed, contracts for services to be performed or other securities of the
corporation. Before the corporation issues shares, the Board of Directors shall
determine that the consideration received or to be received for the shares to be
issued is adequate. The determination of the Board of Directors is conclusive
insofar as the adequacy of consideration for the issuance of shares relates to
whether the shares are validly issued, fully paid and nonassessable. The
corporation may place in escrow shares issued in whole or in part for a contract
for future services or benefits, a promissory note, or other property to be
issued in the future, or make other arrangements to restrict the transfer of the
shares, and may credit distributions in respect of the shares against their
purchase price,
21
<PAGE>
until the services are performed, the benefits or property are received or the
promissory note is paid. If the services are not performed, the benefits or
property are not received or the promissory note is not paid, the corporation
may cancel, in whole or in part, the shares escrowed or restricted and the
distributions credited.
6.08 Stock Regulations. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
law as it may deem expedient concerning the issue, transfer and registration of
shares of the corporation.
ARTICLE VII SEAL
7.01 The Board of Directors may provide for a corporate seal for the
corporation.
ARTICLE VIII INDEMNIFICATION
8.01 Certain Definitions. All capitalized terms used in this Article VIII
and not otherwise hereinafter defined in this Section 8.01 shall have the
meaning set forth in Section 180.0850 of the Statute. The following capitalized
terms (including any plural forms thereof) used in this Article VIII shall be
defined as follows:
(a) "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise
that directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Corporation.
(b) "Authority" shall mean the entity selected by the Director or
Officer to determine his or her right to indemnification pursuant to Section
8.04.
(c) "Board" shall mean the entire elected and serving Board of
Directors of the corporation, including all Directors Emeritus and all members
of the Board of Directors of the corporation and Directors Emeritus who are
Parties to the subject Proceeding or any related Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer breached or
failed to perform his or her duties to the Corporation and his or her breach of
or failure to perform those duties is determined, in accordance with Section
8.04, to constitute misconduct under Section 180.0851(2)(a) l, 2, 3 or 4 of the
Statute.
(e) "Corporation," as used herein and as defined in the Statute and
incorporated by reference into the definitions of certain other capitalized
terms used herein, shall mean this Corporation, including, without limitation,
any successor corporation or entity to this Corporation by way of merger,
consolidation or acquisition of all or substantially all of the capital stock or
assets of this Corporation.
(f) "Director" or "Officer" shall have the meaning set forth in the
Statute and shall also include all Directors Emeritus for purposes of the
definition of `Director' under
22
<PAGE>
this Article VIII; provided, that, for purposes of this Article VIII, it shall
be conclusively presumed that any Director or Officer serving as a director,
officer, partner, trustee, member of any governing or decision-making committee,
employee or agent of an Affiliate shall be so serving at the request of the
corporation."
(g) "Disinterested Quorum" shall mean a quorum of the Board who are
not Parties to the subject Proceeding or any related Proceeding.
(h) "Party" shall have the meaning set forth in the Statute; provided,
that, for purposes of this Article VIII, the term "Party" shall also include any
Director or Officer or employee of the Corporation who is or was a witness in a
Proceeding at a time when he or she has not otherwise been formally named a
Party thereto.
(i) "Proceeding" shall have the meaning set forth in the Statute;
provided, that, in accordance with Section 180.0859 of the Statute and for
purposes of this Article VIII, the term "Proceeding" shall also include all
Proceedings (i) brought under (in whole or in part) the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, their respective
state counterparts, and/or any rule or regulation promulgated under any of the
foregoing; (ii) brought before an Authority or otherwise to enforce rights
hereunder; (iii) any appeal from a Proceeding; and (iv) any Proceeding in which
the Director or Officer is a plaintiff or petitioner because he or she is a
Director or Officer; provided, however, that any such Proceeding under this
subsection (iv) must be authorized by a majority vote of a Disinterested Quorum.
(j) "Statute" shall mean Sections 180.0850 through 180.0859,
inclusive, of the Wisconsin Business Corporation Law, Chapter 180 of the
Wisconsin Statutes, as the same shall then be in effect, including any
amendments thereto, but, in the case of any such amendment, only to the extent
such amendment permits or requires the Corporation to provide broader
indemnification rights than the Statute permitted or required the Corporation to
provide prior to such amendment.
8.02 Mandatory Indemnification of Directors and Officers. To the fullest
extent permitted or required by the Statute, the Corporation shall indemnify a
Director or Officer against all Liabilities incurred by or on behalf of such
Director or Officer in connection with a Proceeding in which the Director or
Officer is a Party because he or she is a Director or Officer.
8.03 Procedural Requirements.
(a) A Director or Officer who seeks indemnification under Section 8.02
shall make a written request therefor to the Corporation. Subject to Section
8.03(b), within sixty days of the Corporation's receipt of such request, the
Corporation shall pay or reimburse the Director or Officer for the entire amount
of Liabilities incurred by the Director or Officer in connection with the
subject Proceeding (net of any Expenses previously advanced pursuant to Section
8.05).
23
<PAGE>
(b) No indemnification shall be required to be paid by the Corporation
pursuant to Section 8.02 if, within such sixty-day period, (i) a Disinterested
Quorum, by a majority vote thereof, determines that the Director or Officer
requesting indemnification engaged in misconduct constituting a Breach of Duty
or (ii) a Disinterested Quorum cannot be obtained.
(c) In either case of nonpayment pursuant to Section 8.03(b), the
Board shall immediately authorize by resolution that an Authority, as provided
in Section 8.04, determine whether the Director's or Officer's conduct
constituted a Breach of Duty and, therefore, whether indemnification should be
denied hereunder.
(d) (i) If the Board does not authorize an Authority to determine the
Director's or Officer's right to indemnification hereunder within such sixty-day
period and/or (ii) if indemnification of the requested amount of Liabilities is
paid by the Corporation, then it shall be conclusively presumed for all purposes
that a Disinterested Quorum has affirmatively determined that the Director or
Officer did not engage in misconduct constituting a Breach of Duty and, in the
case of subsection (i) above (but not subsection (ii)), indemnification by the
Corporation of the requested amount of Liabilities shall be paid to the Director
or Officer immediately.
8.04 Determination of Indemnification.
(a) If the Board authorizes an Authority to determine a Director's or
Officer's right to indemnification pursuant to Section 8.03, then the Director
or Officer requesting indemnification shall have the absolute discretionary
authority to select one of the following as such Authority:
(i) An independent legal counsel; provided, that such
counsel shall be mutually selected by such Director or Officer and by
a majority vote of a Disinterested Quorum or, if a Disinterested
Quorum cannot be obtained, then by a majority vote of the Board;
(ii) A panel of three arbitrators selected from the panels
of arbitrators of the American Arbitration Association in Wisconsin;
provided, that (A) one arbitrator shall be selected by such Director
or Officer, the second arbitrator shall be selected by a majority vote
of a Disinterested Quorum or, if a Disinterested Quorum cannot be
obtained, then by a majority vote of the Board, and the third
arbitrator shall be selected by the two previously selected
arbitrators, and (B) in all other respects (other than this Article
VIII), such panel shall be governed by the American Arbitration
Association's then existing Commercial Arbitration Rules; or
(iii) A court pursuant to and in accordance with Section
180.0854 of the Statute.
(b) In any such determination by the selected Authority there shall
exist a rebuttable presumption that the Director's or Officer's conduct did not
constitute a Breach of
24
<PAGE>
Duty and that indemnification against the requested amount of Liabilities is
required. The burden of rebutting such a presumption by clear and convincing
evidence shall be on the Corporation or such other party asserting that such
indemnification should not be allowed.
(c) The Authority shall make its determination within sixty days of
being selected and shall submit a written opinion of its conclusion
simultaneously to both the Corporation and the Director or Officer.
(d) If the Authority determines that indemnification is required
hereunder, the Corporation shall pay the entire requested amount of Liabilities
(net of any Expenses previously advanced pursuant to Section 8.05), including
interest thereon at a reasonable rate, as determined by the Authority, within
ten days of receipt of the Authority's opinion; provided, that, if it is
determined by the Authority that a Director or Officer is entitled to
indemnification against Liabilities' incurred in connection with some claims,
issues or matters, but not as to other claims, issues or matters, involved in
the subject Proceeding, the Corporation shall be required to pay (as set forth
above) only the amount of such requested Liabilities as the Authority shall deem
appropriate in light of all of the circumstances of such Proceeding.
(e) The determination by the Authority that indemnification is
required hereunder shall be binding upon the Corporation regardless of any prior
determination that the Director or Officer engaged in a Breach of Duty.
(f) All Expenses incurred in the determination process under this
Section 8.04 by either the Corporation or the Director or Officer, including,
without limitation, all Expenses of the selected Authority, shall be paid by the
Corporation.
8.05 Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse from time to time or at any
time, within ten days after the receipt of the Director's or Officer's written
request therefor, the reasonable Expenses of the Director or Officer as such
Expenses are incurred; provided, the following conditions are satisfied:
(i) The Director or Officer furnishes to the Corporation an
executed written certificate affirming his or her good faith belief
that he or she has not engaged in misconduct which constitutes a
Breach of Duty; and
(ii) The Director or Officer furnishes to the Corporation an
unsecured executed written agreement to repay any advances made under
this Section 8.05 if it is ultimately determined by an Authority that
he or she is not entitled to be indemnified by the Corporation for
such Expenses pursuant to Section 8.04.
(b) If the Director or Officer must repay any previously advanced
Expenses pursuant to this Section 8.05, such Director or Officer shall not be
required to pay interest on such amounts.
25
<PAGE>
8.06 Indemnification and Allowance of Expenses of Certain Others.
(a) The Board may, in its sole and absolute discretion as it deems
appropriate, pursuant to a majority vote thereof, indemnify a director or
officer of an Affiliate (who is not otherwise serving as a Director or Officer)
against all Liabilities, and shall advance the reasonable Expenses, incurred by
such director or officer in a Proceeding to the same extent hereunder as if such
director or officer incurred such Liabilities because he or she was a Director
or Officer, if such director or officer is a Party thereto because he or she is
or was a director or officer of the Affiliate.
(b) The Corporation shall indemnify an employee who is not a Director
or Officer, to the extent he or she has been successful on the merits or
otherwise in defense of a Proceeding, for all reasonable Expenses incurred in
the Proceeding if the employee was a Party because he or she was an employee of
the Corporation.
(c) The Board may, in its sole and absolute discretion as it deems
appropriate, pursuant to a majority vote thereof, indemnify (to the extent not
otherwise provided in Section 8.06(b) hereof) against Liabilities incurred by,
and/or provide for the allowance of reasonable Expenses of, an employee or
authorized agent of the Corporation acting within the scope of his or her duties
as such and who is not otherwise a Director or Officer.
8.07 Insurance. The Corporation may purchase and maintain insurance on
behalf of a Director or Officer or any individual who is or was an employee or
authorized agent of the Corporation against any Liability asserted against or
incurred by such individual in his or her capacity as such or arising from his
or her status as such, regardless of whether the Corporation is required or
permitted to indemnify against any such Liability under this Article VIII.
8.08 Notice to the Corporation. A Director, Officer or employee shall
promptly notify the Corporation in writing when he or she has actual knowledge
of a Proceeding which may result in a claim of indemnification against
Liabilities or allowance of Expenses hereunder, but the failure to do so shall
not relieve the Corporation of any liability to the Director, Officer or
employee hereunder unless the Corporation shall have been irreparably prejudiced
by such failure (as determined, in the case of Directors or Officers only, by an
Authority selected pursuant to Section 8.04(a)).
8.09 Severability. If any provision of this Article VIII shall be deemed
invalid or inoperative, or if a court of competent jurisdiction determines that
any of the provisions of this Article VIII contravene public policy, this
Article VIII shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such provisions
which are invalid or inoperative or which contravene public policy shall be
deemed, without further action or deed by or on behalf of the Corporation, to be
modified, amended and/or limited, but only to the extent necessary to render the
same valid and enforceable; it being understood that it is the Corporation's
intention to provide the Directors and Officers with the broadest possible
protection against personal liability allowable under the Statute.
26
<PAGE>
8.10 Nonexclusivity of Article VIII. The rights of a Director, Officer or
employee (or any other person) granted under this Article VIII shall not be
deemed exclusive of any other rights to indemnification against Liabilities or
allowance of Expenses which the Director, Officer or employee (or such other
person) may be entitled to under any written agreement, Board resolution, vote
of shareholders of the Corporation or otherwise, including, without limitation,
under the Statute. Nothing contained in this Article VIII shall be deemed to
limit the Corporation's obligations to indemnify against Liabilities or allow
Expenses to a Director, Officer or employee under the Statute.
8.11 Contractual Nature of Article VIII; Repeal or Limitation of Rights.
This Article VIII shall be deemed to be a contract between the Corporation and
each Director, Officer and employee of the Corporation and any repeal or other
limitation of this Article VIII or any repeal or limitation of the Statute or
any other applicable law shall not limit any rights of indemnification against
Liabilities or allowance of Expenses then existing or arising out of events,
acts or omissions occurring prior to such repeal or limitation, including,
without limitation, the right to indemnification against Liabilities or
allowance of Expenses for Proceedings commenced after such repeal or limitation
to enforce this Article VIII with regard to acts, omissions or events arising
prior to such repeal or limitation.
ARTICLE IX. AMENDMENTS
9.01 By Shareholders. These bylaws may be amended or repealed and new
bylaws may be adopted by the shareholders at any annual or special meeting of
the shareholders at which a quorum is in attendance.
9.02 By Directors. Except as otherwise provided by the Wisconsin Business
Corporation Law or the articles of incorporation, these bylaws may also be
amended or repealed and new bylaws may be adopted by the Board of Directors by
affirmative vote of a majority of the number of directors present at any meeting
at which a quorum is in attendance; provided, however, that the shareholders in
adopting, amending or repealing a particular bylaw may provide therein that the
Board of Directors may not amend, repeal or readopt that bylaw.
9.03 Implied Amendments. Any action taken or authorized by the shareholders
or by the Board of Directors which would be inconsistent with the bylaws then in
effect but which is taken or authorized by affirmative vote of not less than the
number of shares or the number of directors required to amend the bylaws so that
the bylaws would be consistent with such action shall be given the same effect
as though the bylaws had been temporarily amended or suspended so far, but only
so far, as is necessary to permit the specific action so taken or authorized.
27
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCUS
CORPORATION'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-27-1999
<PERIOD-START> MAY-29-1998
<PERIOD-END> NOV-26-1998
<CASH> 1,435
<SECURITIES> 0
<RECEIVABLES> 16,588
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,721
<PP&E> 791,062
<DEPRECIATION> 202,028
<TOTAL-ASSETS> 633,512
<CURRENT-LIABILITIES> 54,313
<BONDS> 227,421
0
0
<COMMON> 31,190
<OTHER-SE> 283,340
<TOTAL-LIABILITY-AND-EQUITY> 633,512
<SALES> 178,178
<TOTAL-REVENUES> 195,354
<CGS> 88,836
<TOTAL-COSTS> 156,545
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,568
<INCOME-PRETAX> 33,482
<INCOME-TAX> 13,402
<INCOME-CONTINUING> 20,080
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,080
<EPS-PRIMARY> .67
<EPS-DILUTED> .66
</TABLE>
