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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________ to__________
Commission file number 0-16255
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Exact name of Registrant as specified in its charter)
Wisconsin 39-1536083
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1326 Willow Road, Sturtevant, Wisconsin 53177
(Address of principal executive offices)
(414) 884-1500
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
As of April 30, 1999, 6,892,267 shares of Class A and 1,222,861 shares of Class
B common stock of the Registrant were outstanding.
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<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
Index Page No.
- --------------------------------------------------------------------------------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations - three
months and six months ended April 2, 1999 and
April 3, 1998 1
Consolidated Balance Sheets - April 2, 1999,
October 2, 1998 and April 3, 1998 2
Consolidated Statements of Cash Flows - six months
ended April 2, 1999 and April 3, 1998 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 11
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
- ----------------------------------------------------------------------------------------------------------------------------
April 2 April 3 April 2 April 3
(thousands, except per share data) 1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 104,210 $ 97,938 $ 164,210 $ 149,779
Cost of sales 62,014 58,210 100,280 90,857
- ----------------------------------------------------------------------------------------------------------------------------
Gross profit 42,196 39,728 63,930 58,922
- ----------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Marketing and selling 20,397 19,394 35,377 32,887
Finance, information systems and administrative
management 6,620 6,587 12,962 12,424
Research and development 1,943 1,806 3,887 3,349
Amortization of acquisition costs 1,025 943 2,050 1,855
Profit sharing 696 339 766 354
Nonrecurring charges 1,133 36 1,549 102
- ----------------------------------------------------------------------------------------------------------------------------
Total operating expenses 31,814 29,105 56,591 50,971
- ----------------------------------------------------------------------------------------------------------------------------
Operating profit 10,382 10,623 7,339 7,951
Interest income (59) (68) (163) (145)
Interest expense 2,648 2,539 4,931 4,733
Other expenses, net 99 142 94 72
- ----------------------------------------------------------------------------------------------------------------------------
Income before income taxes 7,694 8,010 2,477 3,292
Income tax expense 3,317 3,271 1,119 1,337
- ----------------------------------------------------------------------------------------------------------------------------
Net income $ 4,377 $ 4,739 $ 1,358 $ 1,955
============================================================================================================================
Basic earnings per common share $ 0.54 $ 0.59 $ 0.17 $ 0.24
============================================================================================================================
Diluted earnings per common share $ 0.54 $ 0.58 $ 0.17 $ 0.24
============================================================================================================================
The accompanying notes are an integral part of the
consolidated financial statements.
</TABLE>
-1-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
April 2 October 2 April 3
(thousands, except share data) 1999 1998 1998
- -------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
<S> <C> <C> <C>
Cash and temporary cash investments $ 3,467 $ 11,496 $ 4,724
Accounts receivable, less allowance for doubtful accounts of
$3,032, $2,570, and $2,536, respectively 94,768 53,421 85,451
Inventories 81,722 76,603 95,774
Deferred income taxes 5,574 6,067 7,755
Other current assets 7,570 6,933 8,446
- --------------------------------------------------------------------------------------------------------------------------
Total current assets 193,101 154,520 202,150
Property, plant and equipment 35,168 35,469 33,860
Deferred income taxes 15,663 15,435 10,441
Intangible assets 87,653 90,101 86,330
Other assets 1,602 492 533
- --------------------------------------------------------------------------------------------------------------------------
Total assets $ 333,187 $ 296,017 $ 333,314
=========================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt $ 92,892 $ 42,614 $ 80,917
Accounts payable 17,141 11,681 19,267
Accrued liabilities 24,106 30,724 27,022
- -------------------------------------------------------------------------------------------------------------------------
Total current liabilities 134,139 85,019 127,206
Long-term debt, less current maturities 74,010 82,066 87,921
Other liabilities 4,329 4,546 4,058
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities 212,478 171,631 219,185
- -------------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock: none issued -- -- --
Common stock:
Class A shares issued:
April 2, 1999, 6,910,577; October 2, 1998, 6,909,577;
April 3, 1998, 6,909,351 345 345 345
Class B shares issued (convertible into Class A):
April 2, 1999, 1,222,861; October 2, 1998, 1,223,861;
April 3, 1998, 1,224,087 61 61 61
Capital in excess of par value 44,157 44,205 44,193
Retained earnings 86,305 85,068 81,809
Contingent compensation (63) (27) (65)
Other comprehensive income - cumulative translation adjustment (9,811) (4,651) (11,599)
Treasury stock: Class A shares, at cost:
April 2, 1999, 18,310; October 2, 1998, 39,532;
April 3, 1998, 39,532 (285) (615) (615)
- -------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 120,709 124,386 114,129
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 333,187 $ 296,017 $ 333,314
=========================================================================================================================
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
-2-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Six Months Ended
- --------------------------------------------------------------------------------------------------------------------
April 2 April 3
(thousands) 1999 1998
- --------------------------------------------------------------------------------------------------------------------
CASH USED FOR OPERATIONS
<S> <C> <C>
Net income $ 1,358 $ 1,954
Noncash items:
Depreciation and amortization 7,554 6,882
Deferred income taxes 464 210
Change in assets and liabilities, net of effect of businesses acquired:
Accounts receivable, net (41,438) (35,390)
Inventories (7,378) (15,863)
Accounts payable and accrued liabilities 364 5,115
Other, net (926) (1,472)
- --------------------------------------------------------------------------------------------------------------------
(40,002) (38,564)
- --------------------------------------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES
Net assets of businesses acquired, net of cash (5,574) (12,418)
Net additions to property, plant and equipment (5,526) (5,613)
- --------------------------------------------------------------------------------------------------------------------
(11,100) (18,031)
- --------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES
Issuance of senior notes -- 25,000
Net change in short-term debt 43,408 29,869
Common stock transactions 94 (333)
- --------------------------------------------------------------------------------------------------------------------
43,502 54,536
Effect of foreign currency fluctuations on cash (429) (347)
- --------------------------------------------------------------------------------------------------------------------
Decrease in cash and temporary cash investments (8,029) (2,406)
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 11,496 7,130
- --------------------------------------------------------------------------------------------------------------------
End of period $ 3,467 $ 4,724
====================================================================================================================
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
-3-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1 Basis of Presentation
The consolidated financial statements included herein are unaudited. In
the opinion of management, these statements contain all adjustments
(consisting of only normal recurring items) necessary to present fairly
the financial position of Johnson Worldwide Associates, Inc. and
subsidiaries (the Company) as of April 2, 1999 and the results of
operations and cash flows for the three months and six months ended April
2, 1999. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's 1998 Annual Report.
Because of seasonal and other factors, the results of operations for the
three months and six months ended April 2, 1999 are not necessarily
indicative of the results to be expected for the full year.
All monetary amounts, other than share and per share amounts, are stated
in thousands.
Certain amounts as previously reported have been reclassified to conform
with the current period presentation.
2 Income Taxes
The provision for income taxes includes deferred taxes and is based upon
estimated annual effective tax rates in the tax jurisdictions in which
the Company operates.
3 Inventories
Inventories at the end of the respective periods consist of the
following:
--------------------------------------------------------------------------
April 2 October 2 April 3
1999 1998 1998
--------------------------------------------------------------------------
Raw materials $ 28,407 $ 27,834 $ 34,597
Work in process 3,442 4,753 6,818
Finished goods 55,413 49,875 61,765
--------------------------------------------------------------------------
87,262 82,462 103,180
Less reserves 5,540 5,859 7,406
--------------------------------------------------------------------------
$ 81,722 $ 76,603 $ 95,774
==========================================================================
-4-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
4 Earnings Per Share
The following table sets forth the computation of basic and diluted
earnings per common share:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
--------------------------------------------------------------------------------------------------------------
April 2 April 3 April 2 April 3
1999 1998 1999 1998
==============================================================================================================
<S> <C> <C> <C> <C>
Net income for basic and diluted earnings per
share $ 4,377 $ 4,739 $ 1,358 $ 1,954
--------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding
8,100,600 8,130,881 8,097,253 8,106,924
Less nonvested restricted stock 3,818 6,559 3,988 6,854
--------------------------------------------------------------------------------------------------------------
Basic average common shares 8,096,782 8,097,322 8,093,265 8,100,070
Dilutive stock options and restricted stock 2,207 30,199 1,914 31,329
--------------------------------------------------------------------------------------------------------------
Diluted average common shares 8,098,989 8,127,521 8,095,179 8,131,399
==============================================================================================================
Basic earnings per common share $ 0.54 $ 0.59 $ 0.17 $ 0.24
==============================================================================================================
Diluted earnings per common share $ 0.54 $ 0.58 $ 0.17 $ 0.24
==============================================================================================================
</TABLE>
5 Stock Ownership Plans
A summary of stock option activity related to the Company's plans is as
follows:
------------------------------------------------------------------------
Weighted Average
Shares Exercise Price
------------------------------------------------------------------------
Outstanding at October 2, 1998 602,061 $17.43
Granted 281,000 8.96
Cancelled (84,723) 15.10
------------------------------------------------------------------------
Outstanding at April 2, 1999 798,338 $14.70
========================================================================
Options to purchase 620,761 shares of common stock with a weighted average
exercise price of $17.45 per share were outstanding at April 3, 1998.
6 Acquisitions
In April 1999, subsequent to the end of the quarter, the Company
completed the acquisition of substantially all of the assets and the
assumption of certain liabilities of Escape Sailboat Company LLC, a
privately held manufacturer and marketer of recreational sailboats. The
initial purchase price, including direct expenses, for the acquisition
was approximately $4,800, of which approximately $3,100 was recorded as
intangible assets and is being amortized over 25 years. Additional
payments in 2000 and 2001 are dependent upon achievement of specified
levels of sales of the acquired business.
In December 1998, the Company completed the acquisition of substantially
all of the assets and the assumption of certain liabilities of True North
Paddle & Necky Kayaks Ltd., a privately held manufacturer and marketer of
Necky kayaks, and an affiliated entity. The purchase price, including
direct expenses, for the acquisition was approximately $5,700, of which
approximately $3,100 was recorded as intangible assets and is being
amortized over 25 years. Additional payments in the years
-5-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
1999 through 2003 are dependent upon the achievement of specified levels
of sales and profitability of the acquired business.
The acquisitions were accounted for using the purchase method and,
accordingly, the Consolidated Financial Statements include the results of
operations since the respective dates of acquisition. Additional
payments, if required, will increase intangible assets in future years.
7 Litigation
In 1998, certain businesses acquired by the Company became subject to
judgments in civil liability cases. In February 1999, these cases were
settled. Payments totaling $1,600 made by the Company as a result of
these judgments reduced payments otherwise due to selling shareholders of
the businesses acquired. Accordingly, these judgments did not impact the
operating results of the Company.
8 Comprehensive Income
The Company adopted Financial Accounting Standards Board Statement 130,
Reporting Comprehensive Income, in 1999. Comprehensive income includes
net income and changes in shareholders' equity from non-owner sources.
For the Company, the elements of comprehensive income excluded from net
income are represented primarily by the cumulative translation
adjustment.
Comprehensive income (loss) for the respective periods consists of the
following:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
----------------------------------------------------------------------------------------------
April 2 April 3 April 2 April 3
1999 1998 1999 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $ 4,377 $ 4,739 $ 1,358 $ 1,954
Translation adjustment (5,193) (2,539) (5,160) (5,243)
----------------------------------------------------------------------------------------------
Comprehensive income (loss) $ (816) $ 2,200 $ (3,802) $ (3,289)
==============================================================================================
</TABLE>
9 Segments of Business
The Company conducts its worldwide operations through five separate
global business units which represent major product lines. Operations are
conducted in the United States and various foreign countries, primarily
in Europe, Canada and the Pacific Basin.
Net sales and operating profit include both sales to customers, as
reported in the Company's consolidated statements of operations, and
interunit transfers, which are priced to recover cost plus an appropriate
profit margin. Identifiable assets represent assets that are used in the
Company's operations in each business unit at the end of the periods
presented.
-6-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
<TABLE>
<CAPTION>
A summary of the Company's operations by business unit is presented below:
--------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
--------------------------------------------------------------------------------------------------------------
April 2 April 3 April 2 April 3
1999 1998 1999 1998
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales:
Diving:
Unaffiliated customers $ 19,914 $ 21,466 $ 37,559 $ 40,896
Interunit transfers 6 (108) 9 --
Outdoor equipment:
Unaffiliated customers 26,136 22,513 41,136 34,905
Interunit transfers 19 -- 30 1
Fishing:
Unaffiliated customers 19,566 20,899 31,422 30,168
Interunit transfers 201 218 324 405
Motors:
Unaffiliated customers 22,402 20,380 31,427 26,270
Interunit transfers 645 703 984 1,108
Watercraft:
Unaffiliated customers 15,873 12,356 21,655 16,583
Interunit transfers 168 120 180 120
Other 319 324 1,011 957
Eliminations (1,039) (933) (1,527) (1,634)
--------------------------------------------------------------------------------------------------------------
$ 104,210 $ 97,938 $ 164,210 $ 149,779
==============================================================================================================
Operating profit (loss):
Diving $ 765 $ 3,617 $ 196 $ 5,223
Outdoor equipment 1,829 1,783 883 1,096
Fishing 2,093 1,415 2,172 (246)
Motors 3,554 2,864 2,612 1,320
Watercraft 3,172 2,539 3,322 2,676
Other (1,031) (1,595) (1,846) (2,118)
--------------------------------------------------------------------------------------------------------------
$ 10,382 $ 10,623 $ 7,339 $ 7,951
==============================================================================================================
--------------------------------------------------------------------------------------------------------------
April 2 October 2 April 3
1999 1998 1998
--------------------------------------------------------------------------------------------------------------
Identifiable assets:
Diving $ 97,507 $ 104,344 $ 100,926
Outdoor equipment 53,849 49,090 58,884
Fishing 72,746 62,099 78,525
Motors 34,878 22,905 36,317
Watercraft 49,886 29,340 36,667
Other 24,321 28,239 21,995
--------------------------------------------------------------------------------------------------------------
$ 333,187 $ 296,017 $ 333,314
==============================================================================================================
</TABLE>
-7-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion includes comments and analysis relating to the
Company's results of operations and financial condition for the three months and
six months ended April 2, 1999 and April 3, 1998. This discussion should be read
in conjunction with the consolidated financial statements and related notes that
immediately precede this section, as well as the Company's 1998 Annual Report.
Forward Looking Statements
Certain matters discussed in this Form 10-Q 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 can generally be identified as such because the context of the
statement includes phrases such as the Company "expects," "believes" or other
words of similar meaning. 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 which
could cause actual results or outcomes to differ materially from those currently
anticipated. Factors that could affect actual results or outcomes include
changes in consumer spending patterns, the success of the Company's EVA(R)
program, actions of companies that compete with JWA, the Company's success in
managing inventory, movements in foreign currencies or interest rates, the
success of suppliers, customers and others regarding compliance with year 2000
issues, and adverse weather conditions. Shareholders, potential investors and
other readers are urged to consider these factors in evaluating the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included herein are
only made as of the date of this Form 10-Q and the Company undertakes no
obligations to publicly update such forward-looking statements to reflect
subsequent events or circumstances.
Results of Operations
Net sales for the three months ended April 2, 1999 totaled $104.2 million,
compared to $97.9 million in the three months ended April 3, 1998. Net sales for
the six months ended April 2, 1999 totaled $164.2 million, an increase of 10%,
or $14.4 million, over the six months ended April 3, 1998. Sales of all
businesses except Diving and Fishing exhibited strong growth. The Diving
business was adversely impacted by the integration of acquired businesses into
its operations. The Fishing business had high levels of sales of excess product
at nominal margins in the prior year, causing an unfavorable comparison with
regard to sales.
Relative to the U.S. dollar, the average values of most currencies of the
countries in which the Company has operations were higher for the six months
ended April 2, 1999 as compared to the corresponding period of the prior year.
Excluding the impact of foreign currencies, net sales increased 5% and 8% for
the three and six months ended April 2, 1999, respectively.
Gross profit as a percentage of sales was 40.5% for the three months ended April
2, 1999 compared to 40.6% in the corresponding period in the prior year. Gross
profit for the six months ended April 2, 1999 decreased to 38.9% from 39.3% in
the prior year. The decline in higher margin Diving sales relative to total
sales contributed to the decrease, more than offsetting strong gains in the
Fishing and Motors businesses.
The Company recognized an operating profit of $10.4 million for the three months
ended April 2, 1999, compared to an operating profit of $10.6 million for the
corresponding period of the prior year. For the six months ended April 2, 1999,
operating profit decreased to $7.4 million, from $8.0 million in the prior year.
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<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
Seasonal losses of the Leisure Life watercraft business, which the Company
acquired in February 1998 and, accordingly, did not impact prior year results,
contributed to the decrease from the prior year. Increased nonrecurring charges
from integration of acquired businesses also contributed to the decrease. The
combination of these two factors more than offset the positive impact of
increased sales on operating margins and the favorable impact of the Necky
acquisition.
Interest expense totaled $4.9 million for the six months ended April 2, 1999
compared to $4.7 million for the corresponding period of the prior year.
Increased debt levels due to acquisitions consummated in 1999 and 1998, more
than offset improved management of working capital and a favorable interest rate
environment, accounting for the change. The Company's effective tax rate
increased due to a change in the amount and mix of profits in foreign
jurisdictions.
The Company recognized net income of $4.4 million in the three months ended
April 2, 1999 compared to net income of $4.7 million in the corresponding period
of the prior year. Diluted earnings per common share totaled $0.54 for the three
months ended April 2, 1999 compared to $0.58 in the prior year. The Company
recognized net income of $1.4 million in the six months ended April 2, 1999
compared to net income of $2.0 million in the corresponding period of the prior
year. Year to date diluted earnings per common share decreased to $0.17 from
$0.24 in the prior year.
Financial Condition
The following discusses changes in the Company's liquidity and capital
resources.
Operations
Cash flows used for operations totaled $40.0 million for the six months ended
April 2, 1999 and $38.6 million for the corresponding period of the prior year.
Accounts receivable seasonally increased $41.4 million for the six months ended
April 2, 1999 and $35.4 million for the corresponding period of the prior year.
Seasonal growth in inventories of $7.4 million for the six months ended April 2,
1999 and $15.9 million for the corresponding period of the prior year also
accounted for a portion of the net usage of funds. Inventory turns increased for
the six month period ended April 2, 1999 compared to the corresponding period of
the prior year.
Accounts payable and accrued liabilities increased $0.4 million for the six
months ended April 2, 1999 and $5.1 million for the corresponding period of the
prior year, decreasing the net outflow of cash from operations.
Depreciation and amortization charges were $7.6 million for the six months ended
April 2, 1999 and $6.9 million for the corresponding period of the prior year.
The increase was due primarily to increased amortization of intangible assets
from businesses acquired in 1999 and 1998.
Investing Activities
Expenditures for property, plant and equipment were $5.5 million for the six
months ended April 2, 1999 and $5.6 million for the corresponding period of the
prior year. The Company's recurring investments are made primarily for tooling
for new products and enhancements. In 1999, capitalized expenditures are
anticipated to total approximately $12 million. These expenditures are expected
to be funded by working capital or existing credit facilities.
The Company completed the acquisition of one business in the first six months of
the current year and three businesses in the prior year, which increased
tangible and intangible assets by $5.6 million and $12.4 million, respectively,
net of cash and liabilities assumed.
-9-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
Financing Activities
Cash flows from financing activities totaled $43.5 million for the six months
ended April 2, 1999 and $54.5 million for the corresponding period of the prior
year. In October 1997, the Company consummated a private placement of long-term
debt totaling $25 million. Payments on long-term debt required to be made in
1999 total $7.8 million.
Market Risk Management
The Company is exposed to market risk stemming from changes in foreign exchange
rates, interest rates and, to a lesser extent, commodity prices. Changes in
these factors could cause fluctuations in earnings and cash flows. In the normal
course of business, exposure to certain of these market risks is managed by
entering into hedging transactions authorized under Company policies that place
controls on these activities. Hedging transactions involve the use of a variety
of derivative financial instruments. Derivatives are used only where there is an
underlying exposure: not for trading or speculative purposes.
Foreign Operations
The Company has significant foreign operations, for which the functional
currencies are denominated primarily in Swiss and French francs, German marks,
Italian lire, Japanese yen and Canadian dollars. As the values of the currencies
of the foreign countries in which the Company has operations increase or
decrease relative to the U.S. dollar, the sales, expenses, profits, assets and
liabilities of the Company's foreign operations, as reported in the Company's
Consolidated Financial Statements, increase or decrease, accordingly. The
Company mitigates a portion of the fluctuations in certain foreign currencies
through the purchase of foreign currency swaps, forward contracts and options to
hedge known commitments, primarily for purchases of inventory and other assets
denominated in foreign currencies.
Interest Rates
The Company's debt structure and interest rate risk are managed through the use
of fixed and floating rate debt. The Company's primary exposure is to United
States interest rates. The Company also periodically enters into interest rate
swaps, caps or collars to hedge its exposure and lower financing costs.
Commodities
Certain components used in the Company's products are exposed to commodity price
changes. The Company manages this risk through instruments such as purchase
orders and non-cancelable supply contracts. Primary commodity price exposures
are metals and packaging materials.
Sensitivity to Changes in Value
The estimates that follow are intended to measure the maximum potential fair
value or earnings the Company could lose in one year from adverse changes in
foreign exchange rates or market interest rates under normal market conditions.
The calculations are not intended to represent actual losses in fair value or
earnings that the Company expects to incur. The estimates do not consider
favorable changes in market rates. Further, since the hedging instrument (the
derivative) inversely correlates with the underlying exposure, any loss or gain
in the fair value of derivatives would be generally offset by an increase or
decrease in the fair value of the underlying exposures. The positions included
in the calculations are foreign exchange forwards, currency swaps and fixed rate
debt. Certain instruments are included in both categories of risk exposure
calculated below. The calculations do not include the underlying foreign
exchange positions that are hedged by these market risk sensitive instruments.
The
-10-
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
table below presents the estimated maximum potential one year loss in fair value
and earnings before income taxes from a 10% movement in foreign currencies and a
100 basis point movement in interest rate market risk sensitive instruments
outstanding at April 2, 1999:
- --------------------------------------------------------------------------------
Estimated Impact on
- --------------------------------------------------------------------------------
Earnings Before Income
(millions) Fair Value Taxes
- --------------------------------------------------------------------------------
Foreign exchange rate instruments $2.8 $0.3
Interest rate instruments 3.9 0.8
================================================================================
Other Factors
The Company has not been significantly impacted by inflationary pressures over
the last several years. The Company anticipates that changing costs of basic raw
materials may impact future operating costs and, accordingly, the prices of its
products. The Company is involved in continuing programs to mitigate the impact
of cost increases through changes in product design and identification of
sourcing and manufacturing efficiencies. Price increases and, in certain
situations, price decreases are implemented for individual products, when
appropriate.
Year 2000
The year 2000 issue is the result of computer programs using two digits (rather
than four) to define years. Computers or other equipment with date sensitive
software may recognize "00" as the year 1900 rather than 2000. This could result
in system failures or miscalculations. If the Company or its significant
customers or suppliers fail to correct year 2000 issues, the Company's ability
to operate could be materially affected.
The Company has assessed the impact of year 2000 issues on the processing of
date-related information for all of its information systems infrastructure and
non-technical assets, such as production equipment. All systems and
non-technical assets are in the process of being inventoried and classified as
to their compliance with year 2000 data processing. Any systems found year 2000
deficient will be modified, upgraded or replaced. Project plans anticipate all
existing, critical information systems infrastructure and non-technical assets
to be year 2000 compliant before failure to comply would significantly disrupt
the Company's operations. Contingency plans are being developed to address any
failures resulting from relationships with customers, suppliers or other third
parties. The Company has made inquiries of its suppliers, customers and other
organizations which impact the Company's business, but cannot guarantee that
circumstances beyond its control will not have an adverse impact on its
operations.
Since 1993, the Company has invested more than $10 million in information
systems improvements and has been migrating its businesses to systems that are
year 2000 compliant. Based on assessments and testing to date, the financial
impact of addressing any potential remaining internal system issues should not
be material to the Company's financial position, results of operations or cash
flows.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information with respect to this item is included in Management's Discussion and
Analysis of Financial Condition and Results of Operations under the heading
"Market Risk Management."
-11-
<PAGE>
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting on January 26, 1999, the shareholders voted on
three management proposals and to elect the following individuals as Directors
for terms that expire at the next annual meeting:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Votes Cast For Votes Cast Votes Broker
Against Withheld Abstentions Non-Votes
- --------------------------------------------------------------------------------------------------------------------
Class A Directors:
<S> <C> <C> <C> <C> <C>
Thomas F. Pyle, Jr. 5,420,265 0 698,190 0 0
Glenn N. Rupp 5,419,275 0 699,180 0 0
Class B Directors:
Samuel C. Johnson 1,218,377 0 0 0 0
Helen P. Johnson-Leipold 1,218,377 0 0 0 0
Gregory E. Lawton 1,218,377 0 0 0 0
Ronald C. Whitaker 1,218,377 0 0 0 0
Proposal 1 regarding the amendment
to the 1994 Long-Term Stock
Incentive Plan to increase the
number of shares authorized for
issuance 16,132,501 2,027,828 0 141,896 0
Proposal 2 regarding the amendment
to the 1994 Long-Term Stock
Incentive Plan to change the
individual limit on share awards 16,065,030 1,445,603 0 791,592 0
Proposal 3 regarding the amendment
to the 1994 Non-Employee Director
Stock Ownership Plan to increase
the number of shares authorized for
issuance 17,473,218 45,491 0 783,516 0
Votes cast for or against and abstentions with respect to Proposals 1, 2 and 3
reflect that holders of Class B shares are entitled to 10 votes per share for
matters other than the election of Directors.
</TABLE>
-12-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of this Form 10-Q
Exhibit 3.1 Amendments to Bylaws of the Company dated as of
March 9, 1999.
Exhibit 3.2 Bylaws of the Company as amended through March 9,
1999.
Exhibit 10.1 Separation agreement, dated March 9, 1999, between
the Company and R. C. Whitaker.
Exhibit 27: Financial Data Schedule
(b) There were no reports on Form 8-K filed for the three months ended
April 2, 1999.
-13-
<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.
JOHNSON WORLDWIDE ASSOCIATES, INC.
Date: May 17, 1999
/s/ Carl G. Schmidt
--------------------------------------------------
Carl G. Schmidt
Senior Vice President and Chief Financial Officer,
Secretary and Treasurer
(Principal Financial and Accounting Officer)
-14-
<PAGE>
JOHNSON WORLDWIDE INDEX
Page
Exhibit Description Number
- --------------------------------------------------------------------------------
3.1 Amendments to Bylaws of the Company dated as of
March 9, 1999. -
3.2 Bylaws of the Company as amended through March 9,
1999. -
10.1 Separation agreement, dated March 9, 1999, between the
Company and R. C. Whitaker. -
27. Financial Data Schedule -
EXHIBIT 3.1
AMENDMENTS TO THE BY-LAWS
OF JOHNSON WORLDWIDE ASSOCIATES, INC.
(Amended as of March 9, 1999)
The following sections were amended and restated as follows:
ARTICLE TWO
* * *
2.02. Special Meetings.
(a) Special meetings of the shareholders, for any purpose or purposed,
unless otherwise prescribed by statute, may be called by the Chairman of the
Board, if any, or the Board of Directors of the corporation. The Chairman of the
Board, if any, Chief Executive Officer or the President shall call a special
meeting of the shareholders upon demand, in accordance with this Section 2.02,
of the holders of at least ten percent (10%) of all of the votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting.
(e) Except as provided in the following sentence, any special meeting
shall be held at such hour and day as may be designated by which ever of the
Chairman of the Board, if any, the President or the board of Directors shall
have called such meeting. In the case of any special meeting called by the
chairman of the Board, if any, or 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 70 days after the record date
for the meeting (as established in Section 2.05 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 10 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, if any, 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.
* * *
2.03. Place of Meeting. The Board of Directors or the Chairman of the
Board, if any, may designate any place, either within or without the State of
Wisconsin, as the place of meeting for any annual or special meeting of the
shareholders. If no designation is made, the place of meeting shall be the
principal business office of the
<PAGE>
corporation in the State of Wisconsin. Any meeting may be adjourned to reconvene
at any place designated by the Board of Directors or the Chairman of the Board,
if any.
* * *
2.07. Quorum and Voting Requirements; Postponements; Adjournments.
(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 of 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 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 such adjourned meeting at
which a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally notified, provided
that no business shall be transacted at such adjourned meeting on which any
class of stock is entitled to be voted which class shall not have been permitted
to participate in the vote to adjourn the meeting.
* * *
2.09. Conduct of Meetings. The Chairman of the Board shall call the
meeting of the shareholders to order, shall act as chairman of the meeting and
shall otherwise preside at the meeting. In the absence of the Chairman of the
Board, a person designated by the Board of Directors shall preside. The person
presiding at any meeting of the shareholders shall have the power to determine
(i) whether and to what extent proxies presented at the meeting shall be
recognized as valid, (ii) the procedure for tabulating votes at such meeting,
(iii) procedures for the conduct of such meeting, and (iv) any questions which
may be raised at such meeting. The persons presiding at any meeting of the
shareholders shall have the right to delegate any of the powers contemplated by
this Section 2.09 to such other person or persons as the person presiding deems
desirable. The Secretary of the corporation shall act as secretary of all
meetings of shareholders, but, in the absence of the Secretary, the presiding
person may appoint any other person to act as secretary of the meeting.
ARTICLE THREE
Directors
* * *
-2-
<PAGE>
3.02. Number of Directorship Position; Chairman of the Board.
(d) Chairman of the Board. The Board of Directors may elect a director as
the Chairman of the Board. The Chairman of the Board shall, when present,
preside at all meetings of the shareholders and of the Board of Directors, may
call meetings of the shareholders and the Board of Directors, shall advise and
counsel with the management of the Company, and shall perform such other duties
as set forth in these bylaws and as determined by the Board of Directors. Except
as provided in this paragraph (d), the Chairman shall be neither an officer nor
an employee of the corporation by virtue of his or her election and service as
Chairman of the Board, provided however, the Chairman may be an officer of the
corporation. The Chairman may use the title Chairman or Chairman of the Board
interchangeably. During the absence or disability of the Chief Executive
Officer, or while that office is vacant, the Chairman shall exercise all of the
powers and discharge all of the duties of the Chief Executive Officer.
(e) Vice Chairman of the Board. The Board of Directors may elect a
director as Vice Chairman of the Board. Whenever the Chairman is unable to
perform his or her duties for whatever reason, or whenever the Chairman requests
that the Vice Chairman perform such duties on behalf of the Chairman, the Vice
Chairman shall have full authority to preside at all meetings of the
shareholders and of the Board of Directors, call meetings of the shareholders
and the Board of Directors, advise and counsel the management of the Company,
and assume such other duties as the Chairman is responsible to perform or as may
be assigned to the Vice Chairman by the Chairman or the Board of Directors. The
Vice Chairman shall be neither an officer nor an employee of the corporation (by
virtue of his election and service as Vice Chairman of the Board) and may use
the title Vice Chairman or Vice Chairman of the Board interchangeably.
* * *
3.05. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board, if any, or any three
directors. The Chairman of the Board, if any, or the Chief Executive Officer at
the direction of the Directors may fix the time, date and place, either within
or without the State of Wisconsin, 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 business office of the corporation in the State of Wisconsin.
* * *
3.13. Conduct of Meetings. The Chairman of the Board, if any and in his
or her absence, any director chosen by the directors present, shall call
meetings of the Board of Directors to order, shall act as chairman of the
meeting and shall otherwise preside at 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 person may appoint any other
person present to act as secretary of the meeting. Minutes of
-3-
<PAGE>
any regular or special meeting of the Board of Directors shall be prepared and
distributed to each directors.
ARTICLE FOUR
Committees
4.02. Executive Committee. The corporation shall have an Executive
Committee. The Executive Committee shall be a Board Committee and shall be
subject to the provisions of Section 4.01 of these bylaws. The Executive
Committee shall assist the Board of Directors in developing and evaluating
general corporate policies and objectives. The Executive Committee shall perform
such specific assignments as shall be expressly delegated to it from time to
time by the Board of Directors and shall (subject to the limitations specified
in Section 4.01(d) of these bylaws or imposed by the Wisconsin Business
Corporation Law) have the power to exercise, when the Board of Directors is not
in session, the powers of the Board of Directors except to the extent expressly
limited or precluded from exercising such powers in resolutions from time to
time adopted by the Board of Directors. Meetings of the Executive Committee may
be called at any time by any two members of the Committee. The time and place
for each meeting shall be established by the members calling the meeting. The
Board of Directors shall elect a director as the Chairman of the Executive
Committee. The Chairman of the Executive Committee, when present, shall preside
at all meetings of the Executive Committee.
* * *
ARTICLE FIVE
Officers
5.01. Number. The principal officers of the corporation shall be
appointed by the Board of Directors and shall consist of a Chief Executive
Officer, President, Chief Operating Officer, one or more Vice Presidents, a
Secretary and a Treasurer. Such other officers and assistant officers as may be
deemed necessary or desirable may be appointed by the Board of Directors. The
Chief Executive Officer must be a member of the Board of Directors, but no other
officer need be a member of the Board of Directors. Any two or more officers may
be held by the same person. In its discretion, the Board of Directors may choose
not to fill any office for any period as it may deem advisable, except the
principal offices of Chief Executive Officer, President, Vice President,
Treasurer and Secretary. The Board of Directors may authorize any officer to
appoint one or more officers or assistant officers.
* * *
5.06. General Powers of Officers. For purposes of these bylaws, the
corporation's Chief Executive Officer, President and each Vice President shall
be deemed to be a "senior officer." Whenever any resolution adopted by the
corporation's shareholders, Board of Directors or Board Committee shall
authorize the "proper" or "appropriate" officers
-4-
<PAGE>
of the corporation to execute any note, contract or other document or to take
any other action or shall generally authorize any action without specifying the
officer or officers authorized to take such action, any senior officer acting
alone and without countersignatures may take such action on behalf of the
corporation. Any officer of the corporation may on behalf of the corporation
sign contracts, reports to governmental agencies, or other instruments which are
in the regular course of business, except where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
bylaws to some other officer or agent of the corporation, or shall be required
by the Wisconsin Business Corporation Law or other applicable law to be
otherwise signed or executed.
5.07. Chief Executive Officer. The Chief Executive Officer shall be the
chief executive officer of the corporation and, subject to the control of the
Board of the Directors, shall in general supervise and control all of the
business and affairs of the corporation. In general, he or she shall perform all
duties incident to the office of chief executive officer and such other duties
as may be prescribed by the Board of Directors from time to time.
5.08. The President. The President shall be the Chief Operating Officer
of the corporation. He or she shall have such duties as may, from time to time,
be prescribed by the Board of Directors or be delegated by the Chief Executive
Officer. In the absence of the Chairman of the Board, the Vice Chairman of the
Board, or the Chief Executive Officer, the President shall preside at all
meetings of the shareholders. During the absence or disability of the Chief
Executive Officer, or while that office is vacant, the President shall exercise
all the powers and discharge all of the duties of the Chief Executive Officer.
During the absence or disability of the Chief Executive Officer and the
President, or while those offices are vacant, the Chairman of the Board shall
exercise all of the powers and discharge all of the duties of the Chief
Executive Officer and the President. The Board of Directors may authorize the
Chairman of the Board to appoint one or more officers or assistant officers to
perform the duties of the Chief Executive Officer and President during the
absence or disability of the Chief Executive Officer and President, or while
those offices are vacant.
5.09. Chief Operating Officer. The Chief Operating Officer shall be the
President. He or she shall be responsible for the daily operations of the
corporation's business and shall have such other authority and duties as the
Board of Directors or the Chief Executive Officer may prescribe. He or she shall
report to the Chief Executive Officer if the Chief Executive Officer is not also
serving as the Chief Operating Officer.
* * *
Previous Sections 5.08 - 5.12 shall be renumbered 5.10 - 5.14,
respectively.
* * *
-5-
<PAGE>
ARTICLE SIX
Contracts, Loans, Checks and Deposits
6.01 Contracts. The Board of Directors may authorize any officer or
officers, agents 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, President or one of the Vice Presidents and by
the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer;
the Secretary or an Assistant Secretary, when necessary or required, shall affix
the corporate seal thereto; and when so executed no other party to such
instrument or any third party shall be required to make any inquiry into the
authority of the signing officer or officers.
* * *
6.05 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 Chief Executive Officer of this corporation, if he or she be
present, or in his or her absence by the President or any Vice President of this
corporation who may be present, and (b) whenever, in the judgment of the Chief
Executive Officer, or in his or her absence, of the President or Vice President,
it is desirable for this corporation to execute a proxy or written consent in
respect to any share 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 Chief Executive Officer or 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.
* * *
6.07 Performance Bonds. The Chief Executive Officer and the Treasurer of
the corporation, and any one of them, shall have the continuing authority to
take all actions and to execute and deliver any and all documents or instruments
(including, without limitation, reimbursement agreements and agreements of
indemnity) in favor of such parties, in such amounts and on such terms and
conditions as may be necessary or useful for the corporation or any of its
direct or indirect subsidiaries to obtain performance bonds, surety bonds,
completion bonds, guarantees, indemnities or similar assurances (collectively
referred to as "Performance Bonds") from third parties as such officer shall, in
his sole discretion, deem necessary or useful to facilitate and promote the
business of the corporation or any of its
-6-
<PAGE>
subsidiaries; provided, however, that the contingent liability of the
corporation with respect to Performance Bonds for the corporation's subsidiaries
shall not exceed $200,000 in any single transaction or $1 million in the
aggregate without the specific authorization of the Board of Directors. Any
action taken or document or instrument executed and delivered by any such
officer after December 31, 1993, that is within the scope of the authority
granted in this Section 6.07 is hereby ratified, approved and confirmed. If any
party shall require resolutions of the Board of Directors with respect to the
approval of any actions of any officer of the corporation or documents or
instruments related to the Performance Bonds and within the scope of and
generally consistent with this Section 6.07, such resolutions shall be deemed to
have been duly approved and adopted by the Board of Directors, and may be
certified by the Secretary whenever approved by the Chief Executive Officer,
President or the Treasurer, in his sole discretion, and a copy thereof has been
inserted in the minute book of the corporation.
* * *
-7-
Exhibit 3.2
BYLAWS
OF
JOHNSON WORLDWIDE ASSOCIATES, INC.
(A Wisconsin Corporation)
(As amended through March 9, 1999)
ARTICLE ONE
Offices
1.01. Principal and Business Office. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may from time to time determine 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
<PAGE>
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 TWO
Meetings of the Shareholders
2.01. Annual Meetings. An annual meeting of the shareholders shall be
held at such time and date as may be fixed by or under the authority of the
Board of Directors and as designated in the notice thereof, for the purpose of
electing directors and for the transaction of such other business as may come
before the meeting.
2.02. Special Meetings.
(a) Special meetings of the shareholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the Chairman of the
Board, if any, or the Board of Directors of the corporation. The Chairman of the
Board, if any, Chief Executive Officer or the President shall call a special
meeting of the shareholders upon demand, in accordance with this Section 2.02,
of the holders of at least ten percent (10%) of all of the votes entitled to be
cast on any issue proposed to be considered at the proposed 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 10 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 10 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 10 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
<PAGE>
in paragraph (a) (ii) of Section 2.12 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 70 days
after the Demand Record Date.
(d) The corporation shall not be required to call a special meeting upon
shareholder demand unless, in addition to the documents required by paragraph
(c) of this Section 2.02, the Secretary receives a written agreement signed by
each Soliciting Shareholder (as defined below), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the corporation's
costs of holding the special meeting, including the costs of preparing and
mailing proxy materials for the corporation's own solicitation, provided that if
each of the resolutions introduced by any Soliciting Shareholder at such meeting
is adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is elected,
then the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the meanings set
forth below:
(i) "Affiliate" of any Person (as defined herein) shall mean any
Person controlling, controlled by or under common control with such first
Person.
(ii) "Participant" shall have the meaning assigned to such term in
Rule 14a-11 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term in Rule
14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such term in
Rule 14a-11 promulgated under the Exchange Act.
<PAGE>
(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 10 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 10, each Person
who either (I) was a Participant in any Solicitation of such
demand or demands or (II) at the time of the delivery to the
corporation of the documents described in paragraph (c) of this
Section 2.02 had engaged or intended to engage in any Solicitation
of Proxies for use at such Special Meeting (other than a
Solicitation of Proxies on behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if a
majority of the directors then in office determine, reasonably and
in good faith, that such Affiliate should be required to sign the
written notice described in paragraph (c) of this Section 2.02
and/or the written agreement described in this paragraph (d) in
order to prevent the purposes of this Section 2.02 from being
evaded.
(e) Except as provided in the following sentence, any special meeting
shall be held at such hour and day as may be designated by whichever of the
Chairman of the Board, if any, the President or the Board of Directors shall
have called such meeting. In the case of any special meeting called by the
Chairman of the Board, if any, or 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 70 days after the record date
for the meeting (as established in Section 2.05 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 10 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, if any, 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.
<PAGE>
(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) 5 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 5 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 Board of Directors or the Chairman of the
Board, if any, may designate any place, either within or without the State of
Wisconsin, as the place of meeting for any annual or special meeting of the
shareholders. If no designation is made, the place of meeting shall be the
principal business office of the corporation in the State of Wisconsin. Any
meeting may be adjourned to reconvene at any place designated by the Board of
Directors, the Chairman of the Board, if any.
2.04. Notice. Written or printed notice of every annual or special
meeting of the shareholders, stating the place, date and time of such meeting
shall be delivered not less than ten nor more than sixty days before the date of
the meeting (unless a different period is required by the Wisconsin Business
Corporation Law or the Articles of Incorporation), either personally or by mail,
by or at the direction of the Board of Directors, the Chairman of the Board, if
any, the President or Secretary, to each shareholder of record entitled to vote
at such meeting and to other shareholders as may be 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 30 days after the Delivery Date.
Notices which are mailed shall be deemed to be delivered when deposited in the
United States mail addressed to the shareholder at his or her address as it
appears on the stock 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
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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 2.12(b) of these bylaws. If an annual or
special meeting of the shareholders is adjourned to a different place, date or
time, the corporation shall not be required to give notice of the new place,
date or time if the new place, date or time is announced at the meeting before
adjournment; provided, however, that if a new 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 record date.
2.05. 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
any annual or special meeting of the shareholders as the record date for the
purpose of determining shareholders entitled to notice of and to vote at such
meeting. 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 30 days after the
Delivery Date, then the close of business on such 30th day shall be the meeting
record date. If no record date is fixed by the Board of Directors or by the
Wisconsin Business Corporation Law for the determination of the shareholders
entitled to notice of and to vote at a meeting of shareholders, the record date
shall be the close of business on the day before the first notice is given to
shareholders. The Board of Directors may also fix in advance a date as the
record date for the purpose of determining shareholders entitled to demand a
special meeting as contemplated by Section 2.02 of these bylaws, shareholders to
take any other action or shareholders for any other purposes. 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. If no
record date is fixed by the Board of Directors or by the Wisconsin Business
Corporation Law for the determination of shareholders entitled to demand a
special meeting as contemplated in Section 2.02 of these bylaws, the record date
shall be the date that the first shareholder signs the demand. 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. 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 a meeting of
the shareholders is effective for any adjournment of such meeting unless the
Board of Directors fixes a new record date, which it shall do if the meeting is
adjourned to a date more than 120 days after the date fixed for the original
meeting.
2.06. Shareholder Lists. After a record date for a special or annual
meeting of the shareholders 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,
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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 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 2.06. 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 the shareholders.
2.07. Quorum and Voting Requirements; Postponements; Adjournments.
(a) Shares entitled to vote as a separate voting group may take action on
a matter at a meeting only if a quorum of those shares exists with respect to
that matter. If at any time the corporation has only one class of common stock
outstanding, such class shall constitute a separate voting group for purposes of
this Section 2.07. Except as otherwise provided in the Articles of
Incorporation, any bylaw adopted under authority granted in the Articles of
Incorporation or by 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
a meeting, other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes of
determining whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for the
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 within the voting group
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 within the voting group entitled to vote in the
election of such directors at a meeting at which a quorum is present. For
purposes of this Section 2.08, "plurality" means that the individuals who
receive the largest number of votes cast, within the voting group entitled to
vote in the election of such directors, are elected as directors up to the
maximum number of directors to be chosen at the meeting by such voting group.
(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
<PAGE>
special meeting may be adjourned from time to time, whether or not there is a
quorum, (i) at any time, upon a resolution of 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 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 such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified, provided that no business shall be transacted at such
adjourned meeting on which any class of stock is entitled to be voted which
class shall not have been permitted to participate in the vote to adjourn the
meeting.
2.08. Proxies. At all meetings of the shareholders, a shareholder
entitled to vote may vote either in person or by proxy. A shareholder may
appoint a proxy to vote or otherwise act for the shareholder by signing an
appointment form, either personally or by his or her attorney-in-fact. An
appointment of a proxy is effective when received by the Secretary or other
officer or agent of the corporation authorized to tabulate votes. An appointment
is valid for eleven months from the date of its signing unless a different
period is expressly provided in the appointment form. Unless otherwise
conspicuously stated on the appointment form, a proxy may be revoked at any time
before it is voted, either by written notice delivered to the Secretary or other
officer or agent of the corporation authorized to tabulate votes or by oral
notice given by the shareholder to the presiding person during the meeting. The
Board of Directors shall have the power and authority to make rules establishing
presumptions as to the validity and sufficiency of proxies.
2.09. Conduct of Meetings. The Chairman of the Board shall call the
meeting of the shareholders to order, shall act as chairman of the meeting and
shall otherwise preside at the meeting. In the absence of the Chairman of the
Board, a person designated by the Board of Directors shall preside. The person
presiding at any meeting of the shareholders shall have the power to determine
(i) whether and to what extent proxies presented at the meeting shall be
recognized as valid, (ii) the procedure for tabulating votes at such meeting,
(iii) procedures for the conduct of such meeting, and (iv) any questions which
may be raised at such meeting. The person presiding at any meeting of the
shareholders shall have the right to delegate any of the powers contemplated by
this Section 2.09 to such other person or persons as the person presiding deems
desirable. The Secretary of the corporation shall act as secretary of all
meetings of shareholders, but, in the absence of the Secretary, the presiding
person may appoint any other person to act as secretary of the meeting.
2.10. Acceptance of Instruments Showing Shareholder Action. If the name
signed on a vote, consent, waiver or proxy appointment
<PAGE>
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.
2.11. Waiver of Notice by Shareholders. 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 the meeting need not be stated) and be
delivered to the corporation for inclusion in the corporate records. A
shareholder's attendance at a 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 on arrival
objects to holding the meeting or transaction 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
<PAGE>
considering the matter when it is presented.
2.12. Notice of Shareholder Business and Nomination of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of Directors
of the corporation and the proposal of business to be considered by the
shareholders may be made at an annual meeting (A) pursuant to the
corporation's notice of meeting, (B) by or at the direction of the Board
of Directors or (C) by any shareholder of the corporation who is a
shareholder of record at the time of giving of notice provided for in
this by-law and who is entitled to vote at the meeting and complies with
the notice procedures set forth in this Section 2.12.
(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 2.12, 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 earlier
than the 90th day prior to the date of such annual meeting and not later
than the close of business on the later of (x) the 60th day prior to such
annual meeting and (y) the 10th day following the day on which public
announcement of the date of such meeting is first made. Such
shareholder's notice shall be signed by the shareholder of record who
intends to make the nomination or introduce the other business (or his
duly authorized proxy or other representative), shall bear the date of
signature of such shareholder (or proxy or other representative) and
shall set forth: (A) the name and address, as they appear on this
corporation's books, of such shareholder and the beneficial owner or
owners, if any, on whose behalf the nomination or proposal is made; (B)
the class and number of shares of the corporation which are beneficially
owned by such shareholder or beneficial owner or owners; (C) a
representation that such shareholder is a holder of record of shares of
the corporation entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to make the nomination or introduce the
other business specified in the notice; (D) in the case of any proposed
nomination for election or re-election as a director, (I) the name and
residence address of the person or persons to be nominated, (II) a
description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination is to be made by such shareholder, (III) such other
information regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for elections of
directors, or would be otherwise required to be disclosed, in each case
pursuant to Regulation 14A under the Exchange Act, including any
information that would be required to be included in a proxy statement
filed pursuant to Regulation 14A had the nominee been nominated by the
Board of Directors and (IV) the written consent
<PAGE>
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 2.12 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 60 days prior to the
annual meeting, a shareholder's notice required by this Section 2.12
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 2.12. 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 90 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
<PAGE>
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 2.12 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 2.12. 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 2.12 and, if any proposed nomination or business is not in
compliance with this Section 2.12, to declare that such defective
proposal shall be disregarded.
(ii) For purposes of this Section 2.12, "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
2.12, 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 2.12. Nothing in this Section 2.12
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 THREE
Directors
3.01. General Powers. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the corporation shall be
managed under the direction of, the corporation's Board of Directors. In
addition to the powers and authorities expressly conferred upon it by these
bylaws, the Board of Directors may do all such
<PAGE>
lawful acts and things as are not by the Wisconsin Business Corporation Law, the
Articles of Incorporation or these bylaws directed or required to be exercised
or done by the shareholders.
3.02. Number of Directorship Positions; Chairman of the Board.
(a) Number of Directors. Except as otherwise provided in paragraph (c) of
this Section 3.02, the number of directors of the corporation shall be six (6),
or such other specific number as from time to time by resolution of the Board of
Directors.
(b) Board of Directors' Power to Alter the Number of Directors. The Board
of Directors shall have the power (subject to any limitations prescribed by the
Articles of Incorporation) by a resolution adopted by not less than a majority
of all directors serving on the Board of Directors at the time of such adoption
to alter at any time and from time to time the number of total directorship
positions on the Board of Directors. Upon the adoption of any resolution in the
manner provided in the preceding sentence, the total number of directorship
positions on the Board of Directors shall be equal to the number specified in
such resolution. If the Board of Directors shall determine to reduce the number
of directorship positions, then the term of each incumbent member shall end upon
the election of directors at the next annual meeting of shareholders of the
corporation and the persons elected to fill such reduced number of directorship
positions shall be deemed to be the successors to all persons who shall have
previously held such directorship positions.
(c) Default. In the event that the corporation is in Default (as defined
in the Articles of Incorporation) in payment of dividends on the 13% Senior
Preferred Stock, $1.00 par value per share, of the corporation (the "Senior
Preferred Stock") or any stock on a parity with the Senior Preferred Stock as to
dividends and the holders of such stock become entitled to elect two directors
pursuant to Article Five, paragraph A(2)(a)(iii) of the Articles of
Incorporation, the number of total directorship positions on the Board of
Directors shall increase by two effective as of the time that the holders of
such stock elect two directors pursuant to Article Five, paragraph A(2)(a)(iii)
of the Articles of Incorporation. When the Default is "cured" (as defined in the
Articles of Incorporation) or there is no longer any Senior Preferred Stock or
any stock on a parity with the Senior Preferred Stock outstanding, whichever
occurs earlier, the two directors elected pursuant to Article Five, paragraph
A(2)(a)(iii) of the Articles of Incorporation shall resign and the total number
of directorship positions shall be decreased by two effective as of the date of
the last such resignation.
(d) Chairman of the Board. The Board of Directors may elect a director as
the Chairman of the Board. The Chairman of the Board shall, when present,
preside at all meetings of the shareholders and of the Board of Directors, may
call meetings of the shareholders and the Board of Directors, shall advise and
counsel with the management of the Company, and shall perform such other duties
as set forth in these bylaws and as determined by the Board of Directors. Except
as provided in this paragraph (d), the Chairman shall be neither an
<PAGE>
officer nor an employee of the corporation by virtue of his or her election and
service as Chairman of the Board, provided, however, the Chairman may be an
officer of the corporation. The Chairman may use the title Chairman or Chairman
of the Board interchangeably. During the absence or disability of the Chief
Executive Officer, or while that office is vacant, the Chairman shall exercise
all of the powers and discharge all of the duties of the Chief Executive
Officer.
(e) Vice Chairman of the Board. The Board of Directors may elect a
director as Vice Chairman of the Board. Whenever the Chairman is unable to
perform his duties for whatever reason, or whenever the Chairman requests that
the Vice Chairman perform such duties on behalf of the Chairman, the Vice
Chairman shall have full authority to preside at all meetings of the
shareholders and of the Board of Directors, call meetings of the shareholders
and the Board of Directors, advise and counsel the management of the Company,
and assume such other duties as the Chairman is responsible to perform or as may
be assigned to the Vice Chairman by the Chairman or the Board of Directors. The
Vice Chairman shall be neither an officer nor an employee of the corporation (by
virtue of his election and service as Vice Chairman of the Board) and may use
the title Vice Chairman or Vice Chairman of the Board interchangeably.
3.03. Tenure and Qualifications. Each director shall hold office until
the next annual meeting of the shareholders and until his successor shall have
been elected and, if necessary, qualified, or until his prior death, resignation
or removal. A director may be removed by the shareholders only at a meeting of
the shareholders 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 the removal of the director. A director may be removed from office
with or without cause only by the voting group entitled to vote in the election
of such director. A director shall be removed 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 Chairman of the Board, if any, 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.
3.04. Regular Meetings. The Board of Directors shall provide, by
resolution, the date, time and place, either within or without the State of
Wisconsin, for the holding of regular meetings of the Board of Directors without
other notice than such resolution.
3.05. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board, if any, or any three
directors. The Chairman of the Board, if any, or the Chief Executive Officer at
the direction of the Directors may fix the time, date and place, either within
or without the State of Wisconsin, 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 business office of the corporation in the State of Wisconsin.
<PAGE>
3.06. Notice; Waiver. Notice of each special meeting of the Board of
Directors shall be given (a) by oral notice delivered or communicated to the
director by telephone or in person not less than twenty-four hours prior to the
meeting or (b) by written notice delivered to the director in person, by
telegram, 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 the person sending such notice shall reasonably believe
appropriate, in each case not less than forty-eight hours prior to the meeting.
The notice need not prescribe the purpose of the special meeting of the Board of
Directors or the business to be transacted at such meeting. If given by
telegram, such notice shall be deemed to be effective when the telegram is
delivered to the telegraph company. If given by teletype, facsimile or other
wire or wireless communication, such notice shall be deemed to be effective when
transmitted. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon prepaid.
If 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 timely 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.
3.07. Quorum. Except as otherwise provided in the Articles of
Incorporation or these bylaws or by the Wisconsin Business Corporation Law,
directors holding a majority of the positions on the Board of Directors
established pursuant to Section 3.02 of these bylaws shall constitute a quorum
for transaction of business at any meeting of the Board of Directors. A majority
of the directors present (though less than a quorum) may adjourn any meeting of
the Board of Directors from time to time without further notice.
3.08. Manner of Acting. The affirmative vote of a majority of the
directors present at a meeting of the Board of Directors at which a quorum is
present shall be the act of the Board of Directors unless the Wisconsin Business
Corporation Law, the Articles of Incorporation or these bylaws require the vote
of a greater number of directors.
3.09. 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 Article IV of these bylaws, when corporate action is
taken on a particular matter, 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
<PAGE>
meeting are prepared that show the 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 from the
action taken on the particular matter to the presiding person 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
on the particular matter.
3.10. Action by Directors Without a Meeting. Any action required or
permitted by the Articles of Incorporation, these bylaws or the Wisconsin
Business Corporation Law to be taken at any meeting of the Board of Directors or
any committee thereof created pursuant to Article IV of these bylaws may be
taken without a meeting if the action is taken by all members of the Board of
Directors or such committee, as the case may be. The action shall be evidenced
by one or more written consents describing the action taken, signed by each
director or committee member, as the case may be, and retained by the
corporation. In the event one or more positions on the Board of Directors or any
committee thereof shall be vacant at the time of the execution of any such
consent, such consent shall nevertheless be effective if it shall be signed by
all persons serving as members of the Board of Directors or of such committee,
as the case may be, at such time and if the persons signing the consent would be
able to take the action called for by the consent at a properly constituted
meeting of the Board of Directors or such committee, as the case may be.
3.11. Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the corporation as directors or may delegate such
authority to an appropriate committee of the Board of Directors. The Board of
Directors also shall have authority to provide for or delegate authority to an
appropriate committee of the Board of Directors to provide for reasonable
pensions, disability or death benefits, and other benefits or payments, to
directors, officers and employees and to their estates, families, dependents or
beneficiaries on account of prior services rendered by such directors, officers
and employees to the corporation.
3.12. 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 Article IV
hereof) may participate in regular or special meetings by, or through the use
of, any means of communication by which (a) all participants may simultaneously
hear each other, such as by conference telephone, or (b) all communication is
immediately transmitted to each participant, and each participant can
immediately send messages to all other participants. If a meeting is conducted
by such means, then at the commencement of such meeting the presiding person
shall inform the
<PAGE>
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 person 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.
3.13. Conduct of Meetings. The Chairman of the Board, if any, and in his
or her absence, any director chosen by the directors present, shall call
meetings of the Board of Directors to order, shall act as chairman of the
meeting and shall otherwise preside at 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 person 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.
ARTICLE FOUR
Committees of the Board of Directors
4.01. General.
(a) Establishment. The Board of Directors by resolution adopted by the
affirmative vote of a majority of all of the directors then in office pursuant
to Section 3.02 of these bylaws may establish one or more committees, each
committee to consist of two or more directors of this corporation elected by the
Board of Directors. The term "Board Committee" as used in these bylaws means any
committee comprised exclusively of directors of the corporation which is
identified as a "Board Committee" either in these bylaws or in any resolutions
adopted by the Board of Directors.
(b) Membership. The Board of Directors by resolution adopted by the
affirmative vote of a majority of all directors then in office shall have the
power to: (i) establish the number of membership positions on each Board
Committee from time to time and change the number of membership positions on
such Committee from time to time; provided each Board Committee shall consist of
at least two members; (ii) appoint any director to membership on any Board
Committee who shall be willing to serve on such Committee; (iii) remove any
person from membership on any Board Committee with or without cause; and (iv)
appoint any director to membership on any Board Committee as an alternate
member. A person's membership on any Board Committee shall automatically
terminate when such person ceases to be a director of the corporation.
(c) Powers. Except as otherwise provided in Section 4.01(d) of these
bylaws, each Board Committee shall have and may exercise all the powers and
authority of the Board of Directors, when the Board of Directors is not in
session, in the management of the business and affairs
<PAGE>
of the corporation to the extent (but only to the extent) such powers shall be
expressly delegated to it by the Board of Directors or by these bylaws. 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.
(d) Reserved Powers. No Board Committee shall have the right or power to
do any of the following: (i) authorize distributions; (ii) approve or propose to
shareholders action that the Wisconsin Business Corporation Law requires to be
approved by shareholders; (iii) 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 a majority of the remaining
committee members, on any Board Committee; (iv) amend the Articles of
Incorporation; (v) adopt, amend or repeal these bylaws; (vi) approve a plan of
merger not requiring shareholder approval; (vii) authorize or approve
reacquisition of shares, except according to a formula or method prescribed by
the Board of Directors; and (viii) 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.
(e) Vote Required. Except as provided by the Wisconsin Business
Corporation Law or in the Articles of Incorporation or these bylaws, the members
holding at least a majority of the membership positions on any Board Committee
shall constitute a quorum for purposes of any meeting of such committee. The
affirmative vote of the majority of the members of a Board Committee present at
any meeting of the Board Committee at which a quorum is present shall be
necessary and sufficient to approve any action within the Board Committee's
power, and any action so approved by such a majority shall be deemed to have
been taken by the Board Committee and to be the act of such Board Committee.
(f) Governance. The Board of Directors may designate the person who is to
serve as chairman of and preside over any Board Committee, and in the absence of
any such designation by the Board of Directors, the members of the Board
Committee may either designate one member of the Board Committee as its chairman
to preside at any meeting or elect to operate without a chairman, except as
otherwise required by these bylaws. Each Board Committee may appoint a secretary
who need not be a member of the Committee or a member of the Board of Directors.
Each Board Committee shall have the right to establish such rules and procedures
governing its meetings and operations as such committee shall deem desirable
provided such rules and procedures shall not be inconsistent with the Articles
of Incorporation, these bylaws, or any direction to such committee issued by the
Board of Directors.
(g) Alternate Committee Members. The Board of Directors may designate one
or more directors as alternate members of any Board Committee, and any such
director may replace any regular member of such Board Committee who for any
reason is absent from a meeting of such Board Committee or is otherwise
disqualified from serving on such Board Committee.
<PAGE>
4.02. Executive Committee. The corporation shall have an Executive
Committee. The Executive Committee shall be a Board Committee and shall be
subject to the provisions of Section 4.01 of these bylaws. The Executive
Committee shall assist the Board of Directors in developing and evaluating
general corporate policies and objectives. The Executive Committee shall perform
such specific assignments as shall be expressly delegated to it from time to
time by the Board of Directors and shall (subject to the limitations specified
in Section 4.01(d) of these bylaws or imposed by the Wisconsin Business
Corporation Law) have the power to exercise, when the Board of Directors is not
in session, the powers of the Board of Directors except to the extent expressly
limited or precluded from exercising such powers in resolutions from time to
time adopted by the Board of Directors. Meetings of the Executive Committee may
be called at any time by any two members of the Committee. The time and place
for each meeting shall be established by the members calling the meeting. The
Board of Directors shall elect a director as the Chairman of the Executive
Committee. The Chairman of the Executive Committee, when present, shall preside
at all meetings of the Executive Committee.
4.03. Audit Committee. The corporation shall have an Audit Committee. The
Audit Committee shall be a Board Committee and shall be subject to the
provisions of Section 4.01 of these bylaws. The Audit Committee shall: (a)
recommend to the Board of Directors annually a firm of independent public
accountants to act as auditors of the corporation; (b) review with the auditors
in advance the scope of their annual audit; (c) review with the auditors and the
management, from time to time, the corporation's accounting principles, policies
and practices and its reporting policies and practices; (d) review with the
auditors annually the results of their audit; (e) review from time to time with
the auditors and the corporation's financial personnel the adequacy of the
corporation's accounting, financial and operating controls; (f) review
transactions between the corporation or any subsidiary of the corporation and
any shareholder who holds at least fifty percent of the total number of shares
outstanding of the corporation's Class A Common Stock or Class B Common Stock (a
"Controlling Shareholder") or any subsidiary of a Controlling Shareholder in
accordance with policies adopted by the Board of Directors; and (g) perform such
other duties as shall from time to time be delegated to the Committee by the
Board of Directors. The membership of the Audit Committee shall always be such
that a majority of the members of the Audit Committee shall not be full-time
employees of any Controlling Shareholder, the corporation or any of their
respective subsidiaries. Within the limitations prescribed in the preceding
sentence, the membership on the Audit Committee shall be determined by the Board
of Directors as provided in Section 4.01 of these bylaws.
4.04. Compensation Committee. The corporation shall have a Compensation
Committee. The Compensation Committee shall be a Board Committee and shall be
subject to the provisions of Section 4.01 of these bylaws. The Compensation
Committee shall have the authority to establish the compensation and benefits
for directors, officers and, at the option of the Compensation Committee, other
managerial personnel of the corporation and its subsidiaries, including, without
limitation, fixing the cash compensation of such persons, establishing and
<PAGE>
administering compensation and benefit plans for such persons and determining
awards thereunder, and entering into (or amending existing) employment and
compensation agreements with any such persons. The Compensation Committee may
also recommend persons to be elected as officers of the corporation or any of
its subsidiaries to the Board of Directors. The Compensation Committee shall
perform such other duties as shall from time to time be delegated to the
Compensation Committee by the Board of Directors. The authority of the
Compensation Committee shall be subject to such limitations and restrictions as
may be imposed by the Board of Directors, which may delegate the authority to
establish or administer specific employee compensation or benefit plans to one
or more other Board Committees or one or more persons designated by the Board of
Directors. The Compensation Committee shall consist solely of members of the
Board of Directors who are not officers of the corporation. The membership of
the Compensation Committee shall be determined by the Board of Directors as
provided in Section 4.01 of these bylaws.
ARTICLE FIVE
Officers
5.01. Number. The principal officers of the corporation shall be
appointed by the Board of Directors and shall consist of a Chief Executive
Officer, President, Chief Operating Officer, one or more Vice Presidents, a
Secretary and a Treasurer. Such other officers and assistant officers as may be
deemed necessary or desirable may be appointed by the Board of Directors. The
Chief Executive Officer must be a member of the Board of Directors, but no other
officer need be a member of the Board of Directors. Any two or more offices may
be held by the same person. In its discretion, the Board of Directors may choose
not to fill any office for any period as it may deem advisable, except the
principal offices of Chief Executive Officer, President, Vice President,
Treasurer and Secretary. The Board of Directors may authorize any officer to
appoint one or more officers or assistant officers.
5.02. Appointment and Term of Office. The officers of the corporation to
be appointed by the Board of Directors shall be appointed annually by the Board
of Directors at its first meeting following the annual meeting of shareholders.
If the appointment of officers shall not occur at such meeting, such appointment
shall occur as soon thereafter as conveniently may be. Each officer shall hold
office until the earlier of: (a) the time at which a successor is duly appointed
and, if necessary, qualified, or (b) his or her death, resignation or removal as
hereinafter provided. The Board of Directors shall have the right to enter into
employment contracts providing for the employment of any officer for a term
longer than one year, but no such contract shall preclude the Board of Directors
from removing any person from any position with the corporation whenever in the
judgment of the Board of Directors the best interests of the corporation would
be served thereby.
5.03. Removal. The Board of Directors may remove any officer and, unless
restricted by the Board of Directors or these bylaws, an officer may remove any
officer 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.
<PAGE>
5.04. 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.
5.05. 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 5.04 of these
bylaws, 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.
5.06. General Powers of Officers. For purposes of these bylaws, the
corporation's Chief Executive Officer,President and each Vice President shall be
deemed to be a "senior officer". Whenever any resolution adopted by the
corporation's shareholders, Board of Directors or Board Committee shall
authorize the "proper" or "appropriate" officers of the corporation to execute
any note, contract or other document or to take any other action or shall
generally authorize any action without specifying the officer or officers
authorized to take such action, any senior officer acting alone and without
countersignatures may take such action on behalf of the corporation. Any officer
of the corporation may on behalf of the corporation sign contracts, reports to
governmental agencies, or other instruments which are in the regular course of
business, except where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by these bylaws to some other officer or
agent of the corporation, or shall be required by the Wisconsin Business
Corporation Law or other applicable law to be otherwise signed or executed.
5.07. Chief Executive Officer. The Chief Executive Officer shall be the
chief executive officer of the corporation and, subject to the control of the
Board of the Directors, shall in general supervise and control all of the
business and affairs of the corporation. In general, he or she shall perform all
duties incident to the office of chief executive officer and such other duties
as may be prescribed by the Board of Directors from time to time.
5.08. The President. The President shall be the Chief Operating Officer
of the corporation. He or she shall have such duties as may, from time to time,
be prescribed by the Board of Directors or be delegated by the Chief Executive
Officer. In the absence of the Chairman of the Board, the Vice Chairman of the
Board or the Chief Executive Officer, the President shall preside at all
meetings of the shareholders. During the absence or disability of the Chief
Executive Officer, or while that office is vacant, the President shall exercise
all the powers and discharge all of the duties of the Chief Executive Officer.
During the absence or disability of the Chief Executive Officer and the
President, or while those offices are vacant, the Chairman of the Board shall
exercise all of the powers and discharge all of the duties of the Chief
Executive Officer and the President. The Board of Directors may authorize the
Chairman of the Board to appoint one or more officers or assistant officers to
perform the duties of the Chief Executive Officer and the President during the
absence or disability of the Chief Executive Officer and the President, or while
those offices are vacant.
5.09. Chief Operating Officer. The Chief Operating Officer shall be the
President. He or she shall be responsible for the daily operations of the
corporation's business and shall have such other authority and duties as the
Board of Directors or the Chief Executive Officer may prescribe. He or she shall
report to the Chief Executive Officer if the Chief Executive Officer is not also
serving as the Chief Operating Officer.
5.10. Vice Presidents. Each Vice President shall perform such duties and
have such powers as the Board of Directors may from time to time prescribe. The
Board of Directors may designate any Vice President as being senior in rank or
degree of responsibility and may accord such a Vice President an appropriate
title designating his senior rank such as "Executive Vice President" or "Senior
Vice President" or "Group Vice President". The Board of Directors may assign a
certain Vice President responsibility for a designated group, division or
function of the
<PAGE>
corporation's business and add an appropriate descriptive designation to his
title.
5.11. Secretary. The Secretary shall (subject to the control of the Board
of Directors): (a) keep the minutes of the shareholders' and the Board of
Directors' meetings in one or more books provided for that purpose (including
records of actions taken 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
address of all shareholders by class or series of shares and showing the number
and class or series of shares held by each shareholder; (e) have general charge
of the stock transfer books of the corporation; (f) supply in such circumstances
as the Secretary deems appropriate to any governmental agency or other person a
copy of any resolution adopted by the corporation's shareholders, Board of
Directors or Board Committee, any corporate record or document, or other
information concerning the corporation and its officers and certify on behalf of
the corporation as to the accuracy and completeness of the resolution, record,
document or information supplied; and (g) in general, perform all duties
incident to the office of Secretary and perform such other duties and have such
other powers as the Board of Directors or the President may from time to time
prescribe.
5.12. 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 monies due and
payable to the corporation from any source whatsoever, and deposit all such
monies in the name of the corporation in such banks, trust companies or other
depositories as shall be selected by or under authority of the Board of
Directors; and (d) in general, perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to him
by the President. The Treasurer shall give a bond if required by the Board of
Directors for the faithful discharge of his duties in a sum and with one or more
sureties satisfactory to the Board of Directors.
5.13. Assistant Secretaries and Assistant Treasurers. There shall be such
number of Assistant Secretaries and Assistant Treasurers as the Board of
Directors may from time to time authorize. The Assistant Secretaries may sign
with the President or a Vice-President certificates for shares of the
corporation, the issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by the
President or the Board of Directors.
<PAGE>
5.14. Other Assistants and Acting Officers. The Board of Directors 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 an authorized 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.
ARTICLE SIX
Contracts, Loans, Checks and Deposits
6.01. 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, President or one of the Vice Presidents and by
the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer;
the Secretary or an Assistant Secretary, when necessary or required, shall affix
the corporate seal thereto; and when so executed no other party to such
instrument or any third party shall be required to make any inquiry into the
authority of the signing officer or officers.
6.02. 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.
6.03. 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.
6.04. 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.
6.05. 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
<PAGE>
controlled by this corporation may be voted at any meeting of security holders
of such other corporation by the Chief Executive Officer 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 Chief
Executive Officer, or in his or her absence, of the President or Vice President,
it is desirable for this corporation to execute a proxy or written consent in
respect to any share 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 Chief Executive Officer or 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.
6.06. No Nominee Procedures. The corporation has not established, and
nothing in these bylaws shall be deemed to establish, any procedure by which a
beneficial owner of the corporation's shares that are registered in the name of
a nominee is recognized by the corporation as the shareholder under Section
180.0723 of the Wisconsin Business Corporation Law.
6.07. Performance Bonds. The Chief Executive Officer and the Treasurer of
the corporation, and either one of them, shall have the continuing authority to
take all actions and to execute and deliver any and all documents or instruments
(including, without limitation, reimbursement agreements and agreements of
indemnity) in favor of such parties, in such amounts and on such terms and
conditions as may be necessary or useful for the corporation or any of its
direct or indirect subsidiaries to obtain performance bonds, surety bonds,
completion bonds, guarantees, indemnities or similar assurances (collectively
referred to as "Performance Bonds") from third parties as such officer shall, in
his sole discretion, deem necessary or useful to facilitate and promote the
business of the corporation or any of its subsidiaries; provided, however, that
the contingent liability of the corporation with respect to Performance Bonds
for the corporation's subsidiaries shall not exceed $200,000 in any single
transaction or $1 million in the aggregate without the specific authorization of
the Board of Directors. Any action taken or document or instrument executed and
delivered by any such officer after December 31, 1993, that is within the scope
of the authority granted in this Section 6.07 is hereby ratified, approved and
confirmed. If any party shall require resolutions of the Board of Directors with
respect to the approval of any actions of any officer of the corporation or
documents or instruments related to the Performance Bonds and within the scope
of and generally consistent with this Section 6.07, such resolutions shall be
deemed to have been duly approved and adopted by the Board of Directors, and may
be certified by the Secretary whenever approved by the Chief Executive Officer,
President or the Treasurer, in his sole discretion, and a copy thereof has been
inserted in the minute book of the corporation.
<PAGE>
ARTICLE SEVEN
Corporate Stock
7.01. Certificates for Shares. Certificates representing shares of any
class of stock issued by 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 and shall be sealed
with the seal, or a facsimile of the seal, of the corporation. If a certificate
is countersigned by a transfer agent or registrar, other than the corporation
itself or its employees, any other signature or countersignature on the
certificate may be a facsimile. In case any officer of the corporation, or any
officer or employee of the transfer agent or registrar who has signed or whose
facsimile signature has been placed upon such certificate ceases to be an
officer of the corporation, or an officer or employee of the transfer agent or
registrar before such certificate is issued, the certificate may be issued by
the corporation with the same effect as if the officer of the corporation, or
the officer or employee of the transfer agent or registrar had not ceased to be
such at the date of its issue. All certificates for shares shall be
consecutively numbered or otherwise identified. The name 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 books of the corporation. All certificates
surrendered to the corporation for transfer shall be canceled, and no new
certificate shall be issued in replacement until the former certificate for a
like number of shares shall have been surrendered and canceled, except as
otherwise provided in Section 7.04 of these bylaws with respect to lost, stolen
or destroyed certificates.
7.02. Transfer Agent and Registrar. The Board of Directors may from time
to time with respect to each class of stock issuable by the corporation appoint
such transfer agents and registrars in such locations as it shall determine, and
may, in its discretion, appoint a single entity to act in the capacity of both
transfer agent and a registrar in any one location.
7.03. Transfers of Shares. Transfers of shares shall be made only on the
books maintained by the corporation or a transfer agent appointed as
contemplated by Section 7.02 of these bylaws at the request of the holder of
record thereof or of his attorney, lawfully constituted in writing, and on
surrender for cancellation of the certificate for such shares. Prior to due
presentment of a certificate for shares for registration of transfer, the
corporation may (but shall not be required to) treat the person in whose name
corporate shares stand on the books of the corporation as the only person having
any interest in such shares and as the only person having the right to receive
dividends on and to vote such shares, and the corporation shall not be bound to
recognize any equitable or other claim to or interest in such shares on the part
of the other person, whether or not it shall have express or other notice
thereof. Where a certificate for shares is presented to the corporation or a
transfer agent with a request to register for transfer, the corporation or the
transfer agent, as the case may be, shall not be liable to the owner or any
other person suffering loss as a result of such
<PAGE>
registration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation or the transfer agent had no
duty to inquire into adverse claims or has discharged any such duty. The
corporation or transfer agent 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.
7.04. Lost, Stolen or Destroyed Certificates. The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the person requesting such new certificate or
certificates, or his or her legal representative, to give the corporation a bond
in such sum as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
7.05. 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.
7.06. 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 otherwise for
property to be received in the future, or make other arrangements to restrict
the transfer of the shares, and may credit distributions in respect of the
shares against their purchase price, until the services are performed, the
benefits or property are received or the promissory note is paid. If the
services are not performed, the benefits or property are not received or the
promissory note is not paid, the corporation may cancel, in whole or in part,
the shares escrowed or restricted and the distributions credited.
7.07 Stock Regulations. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
the Wisconsin Business Corporation Law as it may deem expedient concerning the
issue, transfer and registration of certificates representing shares of the
corporation.
<PAGE>
ARTICLE EIGHT
General Provisions
8.01. Fiscal Year. The fiscal year of the corporation shall begin and end
on such dates as the Board of Directors shall determine by resolution.
8.02. Seal. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Wisconsin." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE NINE
Amendments
9.01. By Directors. Except as otherwise provided by the Wisconsin
Business Corporation Law or the Articles of Incorporation, these bylaws may be
amended or repealed and new bylaws may be adopted by the Board of Directors 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.
9.02. By Shareholders. Except as otherwise provided in the Articles of
Incorporation, these bylaws may also 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.
9.03. 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 is taken or authorized by affirmative vote of not less
than the number of votes 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.
ARTICLE TEN
Indemnification
10.01. Certain Definitions. All capitalized terms used in this Article X
and not otherwise hereinafter defined in this Section 10.01 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 X 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
<PAGE>
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 10.04.
(c) "Board" shall mean the entire then elected and serving Board
of Directors of the Corporation, including all members thereof who are
Parties to the subject Proceeding or any related Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer breached
or failed to perform his or her duties to the Corporation and his or her
breach of or failure to perform those duties is determined, in accordance
with Section 10.04, to constitute misconduct under Section 180.0851(2)(a)
1, 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 capitalized
terms used herein, shall mean this Corporation, including, without
limitation, any successor corporation or entity to the Corporation by way
of merger, consolidation or acquisition of all or substantially all of
the capital stock or assets of this Corporation.
(f) "Director or Officer" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article X, 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 X, the term "Party" shall
also include any Director, Officer or employee 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, for purposes of this Article X, "Proceeding" shall
include all Proceedings (i) brought under (in whole or in part) the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, their respective state counterparts, and/or any rule or
regulation promulgated under any of the foregoing; (ii) brought before an
Authority or otherwise to enforce rights hereunder; (iii) any appeal from
a Proceeding; and (iv) any Proceeding in which the Director or Officer is
a plaintiff or petitioner because he or she is a Director or Officer;
provided, however, that such Proceeding is
<PAGE>
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, 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.
10.02. Mandatory Indemnification. To the fullest extent permitted or
required by the Statute, the Corporation shall indemnify a Director or Officer
against all Liabilities incurred by or on behalf of such Director or Officer in
connection with a Proceeding in which the Director or Officer is a Party because
he or she is a Director or Officer.
10.03. Procedural Requirements.
(a) A Director or Officer who seeks indemnification under Section 10.02
shall make a written request therefor to the Corporation. Subject to Section
10.03(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
10.05).
(b) No indemnification shall be required to be paid by the Corporation
pursuant to Section 10.02 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 10.03(b), the Board
shall immediately authorize by resolution that an Authority, as provided in
Section 10.04, 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 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 Officer
or Director immediately.
10.04. Determination of Indemnification.
(a) If the Board authorizes an Authority to determine a
<PAGE>
Director's or Officer's right to indemnification pursuant to Section 10.03, then
the Director or Officer requesting indemnification shall have the absolute
discretionary authority to select one of the following as such Authority:
(i) An independent legal counsel; provided, that such counsel
shall be mutually selected by such Director or Officer and by a majority
vote of a Disinterested Quorum or, if a Disinterested Quorum cannot be
obtained, then by a majority vote of the Board;
(ii) A panel of three arbitrators selected from the panels of
arbitrators of the American Arbitration Association in Milwaukee,
Wisconsin; provided, that (A) one arbitrator shall be selected by such
Director or Officer, the second arbitrator shall be selected by a
majority vote of a Disinterested Quorum or, if a Disinterested Quorum
cannot be obtained, 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, 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 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 10.05), including
interest thereon at a reasonable rate, as determined by the Authority, within
ten days of receipt of the Authority's opinion; provided, that, if it is
determined by the Authority that a Director or Officer is entitled to
indemnification as to some claims, issues or matters, but not as to other
claims, issues or matters, involved in the subject Proceeding, the Corporation
shall be required to pay (as set forth above) only the amount of such requested
Liabilities 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
<PAGE>
prior determination that the Director or Officer engaged in a Breach of Duty.
(f) All Expenses incurred in the determination process under this Section
10.04 by either the Corporation or the Director or Officer, including, without
limitation, all Expenses of the selected Authority, shall be paid by the
Corporation.
10.05. Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse, within ten days after the
receipt of the Director's or Officer's written request therefor, the reasonable
Expenses of the Director or Officer as such Expenses are incurred, provided the
following conditions are satisfied:
(i) The Director or Officer furnishes to the Corporation an
executed written certificate affirming his or her good faith belief that
he or she has not engaged in misconduct which constitutes a Breach of
Duty; and
(ii) The Director or Officer furnishes to the Corporation an
unsecured executed written agreement to repay any advances made under
this Section 10.05 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 10.04.
(b) If the Director or Officer must repay any previously advanced
Expenses pursuant to this Section 10.05, such Director or Officer shall not be
required to pay interest on such amounts.
10.06. Indemnification and Allowance of Expenses of Certain Others.
(a) The Corporation shall indemnify a director or officer of an Affiliate
(who is not otherwise serving as a Director or Officer) against all Liabilities,
and shall advance the reasonable Expenses, incurred by such director or officer
in a Proceeding to the same extent hereunder as if such director or officer
incurred such Liabilities because he or she was a Director or Officer, if such
director or officer is a Party thereto because he or she is or was a director or
officer of the Affiliate.
(b) The Corporation shall indemnify an employee who is not a Director or
Officer, to the extent that 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 10.06(b)) against Liabilities incurred by, and/or
provide for the allowance of reasonable Expenses of, an authorized employee or
agent of the Corporation acting within the scope of his or her duties as such
and who is not otherwise a Director or Officer.
<PAGE>
10.07. Insurance. The Corporation may purchase and maintain insurance on
behalf of a Director or Officer or any individual who is or was an authorized
employee or agent of the Corporation against any Liability asserted against or
incurred by such individual in his or her capacity as such or arising from his
or her status as such, regardless of whether the Corporation is required or
permitted to indemnify against any such Liability under this Article X.
10.08. 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 and Officers only, by
an Authority).
10.09. Severability. If any provision of this Article X shall be deemed
invalid or inoperative, or if a court of competent jurisdiction determines that
any of the provisions of this Article X contravene public policy, this Article X
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.
10.10. Nonexclusivity of Article X. The rights of a Director, Officer or
employee (or any other person) granted under this Article X shall not be deemed
exclusive of any other rights to indemnification against Liabilities or
advancement 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 X shall be deemed to limit
the Corporation's obligations to indemnify a Director, Officer or employee under
the Statute.
10.11. Contractual Nature of Article X; Repeal or Limitation of Rights.
This Article X 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 X 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 of indemnification against Liabilities or
allowance or Expenses for Proceedings commenced after such repeal or limitation
to enforce this Article X with regard to acts, omissions or events arising prior
to such repeal or limitation.
Exhibit 10.1
Johnson Worldwide Associates
March 9, 1999
Mr. Ron Whitaker
1917 Second Place
Kenosha, WI 53140
Dear Ron:
This letter will serve as our formal agreement with respect to your
resignation from employment with Johnson Worldwide Associates, Inc. ("JWA"). In
return for your compliance with all of the terms of this letter JWA will provide
the separation arrangements set forth in this letter.
1. Resignation from Employment. You hereby resign your employment with
JWA, including your duties as an Executive Officer, effective March 9, 1999.
Your resignation from all positions with JWA, and each of its divisions and
subsidiaries, including positions as an officer and director, and as a member of
any committee or administrative body relating to JWA and its businesses, is
effective as of such date. You will provide JWA with such written resignations
as JWA may request.
Compensation Following Termination Date. 2. Commencing as of the eighth
day after your execution of this letter agreement, provided there is no
intervening revocation of the release given in paragraph 6 (referred to in this
letter agreement as the "Effective Date"), JWA will pay to you monthly
separation payments in the amount of Forty-three Thousand Eight Hundred
Thirty-three Dollars and 33/100s ($43,833.33), reduced by applicable payroll and
withholding taxes, for twelve (12) consecutive monthly pay periods. The period
from the Effective Date to the end of the twelfth consecutive pay period
thereafter is referred to in this letter agreement as the "Severance Payment
Period." The aggregate gross amount of all such payments shall be Five Hundred
Twenty-six Thousand Dollars ($526,000.00). JWA will initiate separation payments
within five (5) business days of the beginning of the Severance Payment Period.
(b) JWA shall make outplacement services available, without charge to
you, through Right/Jannotta Bray during the Severance Payment Period.
3. Benefit Benefits. (a) Your group employee medical coverage may
continue during the Severance Payment Period provided you make a timely coverage
continuation election pursuant to Internal Revenue Code Section 4980B and
Sections 601-
<PAGE>
Mr. Ron Whitaker
March 9, 1999
Page 2
608 of the Employee Retirement Income Security Act of 1974 as amended ("COBRA
continuation rights") following your resignation. You must pay active employee
costs for any continued medical benefits during the Severance Payment Period and
full COBRA continuation rights costs thereafter while medical benefits are
continued pursuant to your COBRA continuation rights election. Your group life
and disability benefits will end on your resignation date, and conversion
rights, if any, under those programs are then available for the periods
prescribed under each program.
(b) Your participation in the Flexible Perquisite Spending Account
program will terminate on your resignation date. You will be reimbursed for
qualified expenses incurred as of your resignation date.
(c) This letter agreement does not affect your rights to vested benefits
under JWA's 401(k)/deferred profit sharing plan. You are, however, not eligible
for any deferred profit sharing (retirement contribution) that will be paid to
JWA employees for the fiscal year ending in 1999. In lieu of the amount that
would otherwise have been contributed to your account for such fiscal year JWA
will pay to you additional severance compensation equal to such amount in the
month following the month such amount is finally determined. This payment of
additional severance compensation is specifically identified as consideration
for the release provided by you under paragraph 6.
4. JWA Restricted Stock and Stock Options. (a) You are now vested in One
Thousand Six Hundred Sixty-seven (1,667) shares of the Two Thousand Five Hundred
(2,500) shares of restricted stock granted to you on January 1, 1997.
Immediately following the Effective Date JWA will arrange for the transfer agent
to issue to you a certificate without the restrictive legend for such shares.
You shall also be deemed to be fully vested in the remaining Eight Hundred
Thirty-three (833) shares of that restricted stock grant on the Effective Date.
JWA will, immediately following such date, arrange for the transfer agent to
issue to you a certificate for such shares without the restrictive legend. You
are responsible for compliance with all securities laws, including those
regarding insider trading, with regard to any JWA stock transactions.
(b) You are two-thirds (2/3) vested in Seventy-five Thousand (75,000)
shares of the stock option grant awarded to you under the 1994 Long-Term
Incentive Plan on December 21, 1996, which plan is incorporated herein by this
reference; you are one-third (1/3) vested in Twenty-five Thousand (25,000)
shares of the stock option grant awarded to you under that plan on December 18,
1997; and you are not vested in any of the Fifteen Thousand (15,000) shares of
the stock option grant awarded to you under that plan on December 16, 1998. Your
vested stock options are exercisable in accordance with the terms of the
Long-Term Incentive Plan and must be exercised no later than the close of
business on the thirtieth day following your resignation date. Your nonvested
stock options are forfeited and canceled as of your resignation date.
<PAGE>
Mr. Ron Whitaker
March 9, 1999
Page 3
5. Noncompetition, Confidentiality, Etc. (a) The Management Employee
Agreement entered into between you and JWA is incorporated herein by this
reference as a part of this letter agreement and shall remain in effect
according to its terms and conditions, subject to the following regarding its
restrictions against competition with JWA. It is mutually agreed between you and
JWA that the term "JWA Competitor," as used in your Management Employee
Agreement, means businesses that manufacture and/or distribute wholesale small
motor or non-motor personal water craft and leisure boats, electric motors for
water craft, personal or commercial tents, personal scuba diving equipment,
fishing rods, reels, and line, and camping equipment in North America, Europe,
Asia, or Australia.
(b) You further agree to reasonably cooperate with JWA, its financial and
legal advisors and/or government officials, in any claims, investigations,
administrative proceedings including without limitation environmental
proceedings, lawsuits, and other legal, internal or business matters, as
reasonably requested by JWA during the Restricted Period and for two (2) years
thereafter. You will be paid One Thousand Dollars ($1,000) (in addition to any
other amounts to which you may be entitled hereunder) for each day on which such
service is performed at the request of JWA and, to the extent you incur travel
or other expenses with respect to such activities, JWA will reimburse you for
such reasonable expenses when submitted according to regular corporate
procedures.
6. Release and Covenants. (a) In consideration of the payments and
benefits provided hereunder, particularly the additional compensation described
in paragraphs 2 and 3, you, on behalf of yourself, your spouse, heirs,
executors, administrators, agents, successors, assigns and representatives of
any kind (hereinafter collectively referred to as the "Releasors") confirm that
Releasors have released JWA, and each of its subsidiaries, affiliates, their
employees, successors, assigns, executors, trustees, directors, advisors, agents
and representatives, and all their respective predecessors and successors
(hereinafter collectively referred to as the "Releasees"), from any and all
actions, causes of actions, charges, debts, liabilities, accounts, demands,
damages and claims of any kind whatsoever including, but not limited to, those
arising under any labor, employment discrimination (including, without
limitation, the Age Discrimination in Employment Act of 1967, as amended, Title
VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities
Act, the Wisconsin Fair Employment Act, as amended), contract or tort laws,
equity or public policy, or negligence standard, whether certain or speculative,
which against any of the Releasees, any of the Releasors ever had, now has, or
hereafter shall have or can have. You further covenant that you will not
initiate any action, claim or proceeding against any of the Releasees for any of
the foregoing, nor will you participate, assist, or cooperate in any such
action, claim, or proceeding unless required to do so by law.
(b) Notwithstanding the foregoing, this letter agreement does not waive
rights, if any, you or your successors and assigns may have under or pursuant
to, or release any member of Releasees from obligations, if any, it may have to
you or to your successors
<PAGE>
Mr. Ron Whitaker
March 9, 1999
Page 4
and assigns on claims arising out of, related to or asserted under or pursuant
to, this letter agreement or any indemnity agreement or obligation contained in
or adopted or acquired pursuant to any provision of the charter or by-laws of
JWA or its subsidiaries or affiliates or in any applicable insurance policy
carried by JWA or its affiliates for any matter which arises or may arise in the
future in connection with your employment with JWA.
(c) You hereby acknowledge that you have at least twenty-one (21) days to
review this letter agreement from the date you first receive it and you have
been advised to review it with an attorney of your choice. You further
understand that the twenty-one (21) day review period ends when you sign this
agreement. You also have seven (7) days after your signing of this agreement to
revoke the grant of this release by so notifying JWA in writing. Any revocation
by you under this paragraph 6(c), however, is not effective with regard to
paragraph 1 hereof and your termination of employment with JWA shall remain in
effect as set forth therein. You further acknowledge that you have carefully
read this letter agreement, know and understand the contents thereof and its
binding legal effect. You sign the same of your own free will and act, and it is
your intention that you be legally bound thereby.
(d) You agree to keep this letter agreement confidential and not to
reveal its contents to anyone other than your attorney, financial consultant,
tax auditor, and immediate family members. The provisions of this paragraph 6(d)
shall not apply to any truthful statement required to be made by you in any
legal proceeding or government or regulatory investigation, provided, however,
that prior to making such statement you will give JWA reasonable notice and, to
the extent you are legally entitled to do so, afford JWA the ability to seek a
confidentiality order.
7. Noncompliance. The additional payments and benefits provided to you
pursuant to paragraphs 2, 3(c), and 4(a) are conditioned upon your compliance
with all of the terms and conditions of this letter agreement, particularly
paragraphs 4, 5, and 6. Each of the aforementioned provisions are material terms
of this letter agreement, and in the event of any violation of any such
provision of this letter agreement by you or anyone acting at your direction or
in the event you or anyone acting at your direction at any time shall
substantially denigrate any of the Releasees, including without limitation by
way of news media or the expression to news media of personal views, opinions or
judgments, JWA shall be entitled to withhold and terminate all aforementioned
payments provided or to be provided in paragraphs 2, 3(c), and 4(a), and you
agree to repay to JWA all payments paid to you pursuant to such paragraphs
and/or JWA shall be entitled to recover any of the amounts paid to you pursuant
to such paragraphs without waiving the right to pursue any other available legal
or equitable remedies.
8. Tax Payments, Withholding and Reporting. You recognize that the
payments and benefits provided under this letter agreement including without
limitation those provided pursuant to paragraphs 2 and 3(c) may result in
taxable income to you which JWA and its affiliates will report to their
appropriate taxing authorities. JWA and its affiliates
<PAGE>
Mr. Ron Whitaker
March 9, 1999
Page 5
shall have the right to deduct from any payment made under this letter agreement
to you any federal, state, local or other income, employment or other taxes it
determines are required by law to be withheld with respect to such payments or
benefits provided hereunder or to require payment from you which you agree to
pay upon demand, for the purpose of satisfying any such withholding requirement.
9. Severability In the event any one or more of the provisions of this
letter agreement (or any part thereof) shall for any reason be held to be
invalid, illegal or unenforceable, the remaining provisions of this letter
agreement (or part thereof) shall be unimpaired, and the invalid, illegal or
unenforceable provision (or part thereof) shall be replaced by a provision (or
part thereof), which, being valid, legal and enforceable, comes closest to the
intention of the parties underlying the invalid, illegal or unenforceable
provisions. However, in the event that any such provision of this letter
agreement (or part thereof) is adjudged by a court of competent jurisdiction to
be invalid, illegal or unenforceable, but that the other provisions (or part
thereof) are adjudged to be valid, legal and enforceable if such invalid,
illegal or unenforceable provision (or part thereof) were deleted or modified,
then this letter agreement shall apply with only such deletions or
modifications, or both, as the case may be, as are necessary to permit the
remaining separate provisions (or part thereof) to be valid, legal and
enforceable.
10. Indemnification. JWA shall indemnify you and your successors and
assigns against all Liabilities (as now defined in JWA's bylaws) incurred by you
or on your behalf in connection with any Proceeding (as now defined in JWA's
bylaws) in which you are a Party (as now defined in JWA's bylaws) because you
were a director or officer of JWA, to the fullest extent permitted or required
by the Wisconsin Business Corporation Law, notwithstanding any amendment that
may hereafter be made to the charter or bylaws of JWA.
11. Other Provisions. All the terms of our agreement are embodied in this
letter agreement, which incorporates by reference your Management Employee
Agreement and the Johnson Worldwide Associates, Inc. 1994 Long-Term Stock
Incentive Plan, and it fully supersedes any and all prior agreements or
understandings between you and any Releasee. This letter agreement shall be
governed by the substantive laws of the State of Wisconsin without regard to its
conflict of laws provisions. The parties agree that any proceeding to resolve
any dispute arising hereunder will be brought only in the courts of the State of
Wisconsin or in the courts of the United States of America for the Eastern
District of Wisconsin, and that each party irrevocably submits to such
jurisdiction, and hereby waives any and all objections as to venue, inconvenient
forum and the like. It is the intention of the parties hereto, however, that to
the extent practicable, the parties will endeavor to settle any dispute arising
hereunder first through the process of non-binding mediation to be conducted in
Milwaukee, Wisconsin. This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
<PAGE>
Mr. Ron Whitaker
March 9, 1999
Page 6
If you find that the foregoing satisfactorily states our mutual
understanding, please sign and date the enclosed copy of this letter agreement
in the spaces indicated below and return it to me.
Sincerely yours,
JOHNSON WORLDWIDE ASSOCIATES, INC.
By /s/ Thomas F. Pyle, Jr.
Thomas F. Pyle, Jr., Compensation
Committee Chairman
Agreed and Accepted this 9th day of March, 1999.
/s/ Ronald C. Whitaker
Ronald C. Whitaker
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF JOHNSON WORLDWIDE ASSOCIATES, INC. AS OF
AND FOR THE SIX MONTHS ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-01-1999
<PERIOD-START> JAN-02-1999
<PERIOD-END> APR-02-1999
<CASH> 3,467
<SECURITIES> 0
<RECEIVABLES> 97,800
<ALLOWANCES> (3,032)
<INVENTORY> 81,722
<CURRENT-ASSETS> 193,101
<PP&E> 99,560
<DEPRECIATION> (64,392)
<TOTAL-ASSETS> 333,187
<CURRENT-LIABILITIES> 134,139
<BONDS> 74,010
0
0
<COMMON> 407
<OTHER-SE> 120,302
<TOTAL-LIABILITY-AND-EQUITY> 333,187
<SALES> 163,967
<TOTAL-REVENUES> 164,210
<CGS> 100,280
<TOTAL-COSTS> 100,280
<OTHER-EXPENSES> 55,619
<LOSS-PROVISION> 903
<INTEREST-EXPENSE> 4,931
<INCOME-PRETAX> 2,477
<INCOME-TAX> 1,119
<INCOME-CONTINUING> 1,358
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,358
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17
</TABLE>
