UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-18643
LUNAR CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 3845 39-1200501
(State of (Primary Standard Industry (IRS Employer
Incorporation) Classification Code Number) Identification No.)
313 West Beltline Highway
Madison, Wisconsin 53713
608-274-2663
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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 January 31, 1997, 8,677,195 shares of the registrant's Common Stock,
$0.01 par value, were outstanding.
LUNAR CORPORATION AND SUBSIDIARIES
FORM 10-Q
For the quarterly period ended December 31, 1996
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
Item 1. Financial statements
Consolidated Balance Sheets
December 31, 1996, and June 30, 1996 . . . . . . . . . . . . . . . .3
Consolidated Statements of Income
Three and Six Months Ended December 31, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Consolidated Statements of Cash Flows
Six Months Ended December 31, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Notes to Consolidated Financial Statements . . . . . . . . . . . . .7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .9
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
December 31, June 30,
1996 1996
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $25,301,635 $ 8,001,582
Marketable securities 2,480,694 2,347,400
Accounts receivable:
Trade, less allowance for doubtful accounts
of $2,580,000 at December 31, 1996
and $2,235,000 at June 30, 1996 23,864,707 27,966,620
Other 201,408 328,662
- --------------------------------------------------------------------------------
24,066,115 28,295,282
Inventories 9,835,927 8,675,487
Deferred income taxes 2,257,000 1,984,000
Other 369,977 161,829
- --------------------------------------------------------------------------------
Total current assets 64,311,348 49,465,580
Property, plant and equipment--at cost:
Buildings and improvements 2,203,036 2,203,036
Furniture and fixtures 700,897 669,284
Machinery and other equipment 4,385,314 3,554,535
- --------------------------------------------------------------------------------
7,289,247 6,426,855
Less accumulated depreciation and amortization 3,461,724 2,977,468
- --------------------------------------------------------------------------------
3,827,523 3,449,387
Land 138,858 138,858
- --------------------------------------------------------------------------------
3,966,381 3,588,245
Long-term trade accounts receivable 3,194,435 7,658,079
Long-term marketable securities 1,023,156 1,028,088
Patent fees and other intangibles, net of
accumulated amortization of $1,009,093 at
December 31, 1996 and $832,573 at June 30, 1996 882,192 990,382
Other 137,809 141,556
- --------------------------------------------------------------------------------
$73,515,321 $62,871,930
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
- --------------------------------------------------------------------------------
December 31, June 30,
1996 1996
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 4,180,505 $ 3,508,804
Customer advances and deferred income 578,114 565,364
Income taxes payable 1,722,472 551,852
Accrued liabilities:
Commission payable 2,053,177 2,502,323
Compensation payable 334,260 205,236
Property, payroll, and other taxes 234,175 331,139
Accrued warranty and installation expenses 2,894,000 2,570,000
Other 271,280 231,809
- --------------------------------------------------------------------------------
Total current liabilities 12,267,983 10,466,527
Shareholders' equity:
Common stock--authorized 25,000,000 shares
of $.01 par value; issued and outstanding
8,586,865 shares at December 31, 1996 and
8,486,250 at June 30, 1996 85,869 84,863
Capital in excess of par value 24,233,890 22,802,103
- --------------------------------------------------------------------------------
24,319,759 22,886,966
Retained earnings 36,866,764 29,420,314
Unrealized appreciation in
marketable securities 15,694 29,122
Cumulative translation adjustment 45,121 69,001
- --------------------------------------------------------------------------------
61,247,338 52,405,403
- --------------------------------------------------------------------------------
$73,515,321 $62,871,930
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
- --------------------------------------------------------------------------------
Three months ended Six months ended
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
- --------------------------------------------------------------------------------
REVENUES $20,516,096 $16,934,285 $39,430,735 $29,294,274
- --------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of sales 9,031,731 7,677,353 17,409,209 13,052,066
Research and development 1,424,599 1,564,806 2,584,877 2,871,432
Selling and marketing 4,405,687 3,559,406 8,374,020 6,338,899
General and administrative 1,106,264 1,380,357 2,487,763 2,881,572
- --------------------------------------------------------------------------------
15,968,281 14,181,922 30,855,869 25,143,969
- --------------------------------------------------------------------------------
Earnings from operations 4,547,815 2,752,363 8,574,866 4,150,305
- --------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest income 365,026 385,023 707,847 784,250
Settlement of lawsuit 1,828,905 - 1,828,905 -
Other 150,742 (76,815) 214,832 (87,869)
- --------------------------------------------------------------------------------
2,344,673 308,208 2,751,584 696,381
- --------------------------------------------------------------------------------
Earnings before provision
for income taxes 6,892,488 3,060,571 11,326,450 4,846,686
Provision for income taxes 2,347,000 816,783 3,880,000 1,275,156
- --------------------------------------------------------------------------------
NET INCOME $ 4,545,488 $ 2,243,788 $ 7,446,450 $ 3,571,530
================================================================================
Net income per common and
common-equivalent share $0.50 $0.25 $0.82
$0.41
================================================================================
Weighted average number of
common and common-equivalent
shares 9,076,316 8,841,284 9,073,781 8,783,034
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
- --------------------------------------------------------------------------------
Six months ended
December 31, December 31,
1996 1995
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $7,446,450 $3,571,530
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 667,386 754,925
Minority interest in subsidiary - 60,752
Changes in assets and liabilities:
Receivables 8,696,558 (4,131,405)
Inventories (1,160,440) (1,820,359)
Prepaid expenses (208,148) (54,220)
Deferred income taxes (273,000) (267,000)
Accounts payable 647,821 610,986
Customer advances and deferred income 12,750 52,815
Accrued liabilities (53,615) 811,529
Income taxes payable 1,170,620 (672,102)
- --------------------------------------------------------------------------------
Net cash provided by (used in) operating activities
16,946,382 (1,082,549)
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of marketable securities (1,000,000) -
Maturities of marketable securities 851,600 3,539,600
Additions to property, plant and equipment (862,392) (491,245)
Patent fees (68,330) (168,597)
- --------------------------------------------------------------------------------
Net cash provided by (used in) investing activities
(1,079,122) 2,879,758
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from exercise of stock options 375,316 678,860
Income tax benefit from stock option exercises 1,057,477 1,306,133
- --------------------------------------------------------------------------------
Net cash provided by financing activities 1,432,793 1,984,993
- --------------------------------------------------------------------------------
Net increase in cash and cash equivalents 17,300,053 3,782,202
Cash and cash equivalents at beginning of period 8,001,582 2,577,655
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $25,301,635 $ 6,359,857
================================================================================
Supplemental disclosure of cash flow information:
Income taxes paid $ 2,170,000 $ 907,450
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The consolidated financial statements of Lunar Corporation (the
"Company") presented herein, without audit except for balance sheet
information at June 30, 1996, have been prepared pursuant to the rules of the
Securities and Exchange Commission for quarterly reports on Form 10-Q and do
not include all of the information and note disclosures required by generally
accepted accounting principles. These statements should be read in
conjunction with the consolidated financial statements and notes thereto for
the year ended June 30, 1996, included in the Company's Form 10-K as filed
with the Securities and Exchange Commission on September 27, 1996.
The consolidated balance sheet as of December 31, 1996, the consolidated
statements of income for the three and six months ended December 31, 1996 and
1995, and the consolidated statements of cash flows for the six months ended
December 31, 1996 and 1995 are unaudited but, in the opinion of management,
include all adjustments (consisting of normal, recurring adjustments)
necessary for a fair presentation of results for these interim periods.
The results of operations for the three and six months ended December 31,
1996, are not necessarily indicative of the results to be expected for the
entire fiscal year ending June 30, 1997.
(2) INVENTORIES
Inventories are stated at the lower of cost or market; cost is determined
principally by the first-in, first-out method. Inventories are broken down as
follows:
- --------------------------------------------------------------------------------
December 31, June 30,
1996 1996
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Finished goods and work in progress $4,548,115 $3,920,431
Materials and purchased parts 5,287,812 4,755,056
---------- ----------
$9,835,927 $8,675,487
========== ==========
(3) STOCK DIVIDEND
The Company distributed a 3-for-2 stock split in the form of a stock
dividend on December 21, 1995. All share and per-share data has been adjusted
to reflect the stock dividend.
(4) TECHNOLOGY TRANSFER AND SPIN-OFF OF SUBSIDIARY
In October 1995, the Company contributed its ownership of Continental
Assays Corporation and certain assets with a book value of $175,867 for
1,698,674 shares of common stock of Bone Care International, Inc. ("Bone
Care"), a subsidiary of the Company. In October 1995, the Company also
exchanged $634,683 of loans receivable from Bone Care for 107,401 shares of
Bone Care common stock. These transactions created a single vitamin D
development business owned by Bone Care.
On April 18, 1996, the Board of Directors of the Company declared a
dividend, payable to holders of record of its common stock at the close of
business on April 24, 1996 (the "record date"), of one share of Bone Care
common stock for every two shares of the Company's common stock. The
distribution occurred on May 8, 1996 (the "distribution date"). Prior to the
distribution, the Company made a capital contribution of $10,725,000 in
exchange for additional common stock of Bone Care and to pay for federal
income tax benefits received from Bone Care. As a result of the distribution,
the Company's 97.3% ownership of Bone Care's common stock was distributed to
holders of the Company's common stock as of the record date. Bone Care's
total assets as of the distribution date were approximately $12,650,000.
Item 2. Management Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Revenues increased 21% to $20,516,000 in the three months ended December
31, 1996 from $16,934,000 in the three months ended December 31, 1995. For
the six months ended December 31, 1996, revenues increased 35% to $39,431,000
from $29,294,000 in the six months ended December 31, 1995. Sales by product
line are summarized as follows:
Revenues by Product
(in thousands)
Three Months Ended Six Months Ended
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
---------- ---------- --------- ---------
DPX $16,080 $ 8,548 $30,545 $15,842
EXPERT 822 4,052 1,642 5,709
Achilles 1,597 1,244 2,786 3,000
Artoscan 1,035 2,105 2,126 2,998
Other 982 985 2,332 1,745
---------- ---------- --------- ---------
$20,516 $16,934 $39,431 $29,294
========== ========== ========= =========
The increase in DPX sales in the current fiscal year is primarily
attributable to increased shipments in the United States, which the Company
believes are related to the introduction of several new drug therapies during
the last 12 months. The reduction of sales of EXPERT systems resulted from
unusually high sales during the period of October 1995 to April 1996. During
that period, a significant backlog was fulfilled when difficulties with a
component part availability were resolved.
Cost of sales as a percentage of equipment sales averaged approximately
44% in the three and six month periods ended December 31, 1996, compared to
45% and 46% in the three and six month periods ended December 31, 1995.
Research and development expenditures decreased to $1,425,000 in the
three months ended December 31, 1996 from $1,565,000 in the three months ended
December 31, 1995, and decreased to $2,585,000 in the six months ended
December 31, 1996 from $2,871,000 in the six months ended December 31, 1995.
The Company spun-off Bone Care to its shareholders on May 8, 1996 in a
transaction intended to qualify as a tax-free distribution. The costs of
clinical trials and any other costs related to the research and development of
vitamin D compounds are no longer included in the Company's consolidated net
income. Vitamin D-related expenses were $259,000 and $544,000 in the three
and six months ended December 31, 1995, respectively.
Sales and marketing expenses were $4,406,000 in the three months ended
December 31, 1996 and $3,559,000 in the three months ended December 31, 1995,
representing 21% as a percentage of equipment sales for both time periods.
For the six months ended December 31, 1996, sales and marketing expenses were
$8,374,000 compared to $6,339,000 for the six months ended December 31, 1995,
representing a decrease to 21% from 22% as a percentage of equipment sales.
General and administrative expenses decreased to $1,106,000 in the three
months ended December 31, 1996 from $1,380,000 in the three months ended
December 31, 1995, and decreased to $2,488,000 in the six months ended
December 31, 1996 from $2,882,000 in the six months ended December 31, 1995.
The decreases are primarily attributable to lower legal expenses. Lunar had
been involved in several patent lawsuits initiated in September 1994 with
Hologic, Inc., a Massachusetts-based competitor, related to x-ray and
ultrasound densitometers. These lawsuits were settled on November 22, 1995.
Interest income was $365,000 and $708,000 in the three and six months
ended December 31, 1996, respectively, compared to $385,000 and $784,000 in
the three and six months ended December 31, 1995, respectively. These
decreases are primarily the result of decreased cash balances during most of
the current fiscal year partially offset by increases in the amount of
financed receivables in December 1996. The Company had contributed
$10,725,000 to Bone Care prior to the spinoff of Bone Care in May 1996.
In December 1996, a court awarded the Company and the University of
Alabama-Birmingham (the co-plaintiffs) $4,200,000 in a patent infringement
case against EG&G Astrophysics (EG&G). The co-plaintiffs split the award
after deducting legal expenses. The Company's resulting $1,829,000 share of
the award is reflected in other income. The co-plaintiffs entered into a
Settlement and License Agreement with EG&G providing for future royalty
payments based on the volume of EG&G equipment sales utilizing the technology
subject to the license.
The effective tax rate averaged 34% in the three and six month periods
ended December 31, 1996 compared to 27% and 26% in the three and six month
periods ended December 31, 1995, respectively. The effective tax rate has
been trending higher in the current fiscal year due to increased profits from
sales within the United States, which do not benefit from the Company's
foreign sales corporation, Lunar FSC, Inc., and the patent infringement
settlement. The rate for the three month period ended December 30, 1995 is
below the 34% federal statutory rate as a result of the tax benefit from
foreign sales corporation treatment and tax-exempt interest income, but offset
by the provision for state income taxes.
Liquidity and Capital Resources
Cash and cash equivalents increased $17,300,000 to $25,302,000 in the six
months ended December 31, 1996. The Company also has a laddered portfolio of
high-grade municipal bonds with various maturities not exceeding 48 months.
The Company owned approximately $3,504,000 in municipal securities as of
December 31, 1996, which are readily marketable.
The Company's accounts receivable decreased $8,697,000 to $27,256,000 at
December 31, 1996 from $35,953,000 at June 30, 1996. This decrease is
attributable to the sale of approximately $7,300,000 of accounts receivable
from selected customers in Latin America to a leasing company on December 31,
1996. The Company continues to have recourse of approximately 10% of the
sales price in the event non-payment of the underlying accounts receivable
should occur.
Inventories increased 13% to $9,836,000 at December 31, 1996 from
$8,675,000 at June 30, 1996. The increase in finished goods and work in
progress is primarily attributable to increases in Artoscan MRI units. The
increase in materials and purchased parts is primarily due to an increase in
production of DPX systems. The Company does not have any pending material
commitments for capital expenditures.
Management believes the current level of cash and short-term investments
is adequate to finance the Company's operations for the foreseeable future.
PART II - OTHER INFORMATION
LUNAR CORPORATION AND SUBSIDIARIES
Item 1. Legal Proceedings
Patent Litigation: On March 5, 1996, the Company and
University of Alabama - Birmingham Research Foundation (UAB)
(collectively the co-plaintiffs) sued EG&G Astrophysics (EG&G) of
Long Beach, California, in the United States District Court for the
Western District of Wisconsin for infringement of U.S. Patent
4,626,688 (the '688 Patent) by EG&G's dual-energy baggage scanners.
A trial of the matter in December of 1996 concluded with a verdict
in favor of the co-plaintiffs. The Company and UAB were awarded
$4.2 million in damages which was divided between the co-plaintiffs
after deducting legal expenses. The co-plaintiffs also entered into
a Settlement and License Agreement with EG&G whereby EG&G was
licensed under the '688 patent and a related U.S. patent. The
license agreement provides for payment of royalties to the co-plaintiffs
on EG&G's dual-energy baggage scanners manufactured or
sold in the United States. The license agreement ends on December
2, 2003.
During fiscal 1995 and part of fiscal year 1996, the Company
was involved in patent litigation with Hologic, Inc., a
Massachusetts-based competitor. On November 22, 1995, the Company
announced the signing of a definitive agreement with Hologic
settling all disputes between the parties. The agreement provides
for certain continuing payments between the companies related to
future sales, the net effect of which Lunar does not believe will be
material to its revenues or earnings. The agreement also provides
that the companies will not engage each other in patent litigation
in the area of x-ray and ultrasound densitometry for a ten-year
period.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The 1995 Annual Meeting of Shareholders ("Annual Meeting") of
the Company was held on November 21, 1996. The total number of
shares of the Company's common stock, $.01 par value per share,
outstanding as of October 11, 1996, the record date of the Annual
Meeting, was 8,536,665. Management of the Company solicited proxies
pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended, and Regulation 14A promulgated thereunder for the Annual
Meeting. Two (2) directors, John W. Brown and Reed Coleman, were
elected to serve until the 1999 Annual Meeting of Shareholders. The
directors were elected by a vote of 7,746,947 votes "FOR" and 3,750
votes "WITHHELD AUTHORITY." The selection of KPMG Peat Marwick LLP
as the Company's independent auditors was also approved. The
selection was approved by a vote of 7,747,852 votes "FOR," 1,490
votes "AGAINST," and 1,355 votes "ABSTAIN."
Item 5. Other Information
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: Certain statements in this filing, and
elsewhere (such as in other filings by the Company with the
Securities and Exchange Commission, press releases, presentations by
the Company or its management, and oral statements) constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties, and other
factors which may cause the actual results, performance, or
achievements of the Company to be materially different from any
future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among other
things, regulation, technical risks associated with the development
of new products, regulatory policies in the United States and other
countries, reimbursement policies of public and private health care
payors, introduction and acceptance of new drug therapies,
competition from existing products and from new products or
technologies, and market and general economic factors.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits furnished:
(3.2) By-laws of Registrant
(10.1) Lunar Corporation Amended and Restated Stock Option Plan
(11) Statement Re: Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended December 31, 1996.
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.
LUNAR CORPORATION
(Registrant)
Date: February 14, 1997 /s/ Richard B. Mazess
Richard B. Mazess
President
(Principal Executive Officer)
Date: February 14, 1997 /s/ Robert A. Beckman
Robert A. Beckman
Vice President of Finance
and Treasurer
(Principal Financial and
Accounting Officer)
LUNAR CORPORATION AND SUBSIDIARIES
Exhibit Index
For the Quarterly Period Ended December 31, 1996
No. Description Page
3.2 By-Laws of Registrant . . . . . . . . . . . . . . . . . . . . 15
10.1 Lunar Corporation Amended and Restated Stock Option Plan. . . 35
11 Statement Regarding Computation of Earnings Per Share . . . . 39
27 Financial Data Schedule . . . . . . . . . . . . . . . . . . . 40
EXHIBIT 3.2
LUNAR CORPORATION AND SUBSIDIARIES
BY-LAWS
OF
LUNAR CORPORATION
(A Wisconsin Corporation)
BY-LAWS
OF
LUNAR CORPORATION
(A Wisconsin Corporation)
Introduction - Variable References
0.01. Date of annual shareholders' meeting (See Section 2.01):
1:00 p.m. First Saturday February 1991
(HOUR) (WEEK) (DAY) (MONTH) (FIRST YEAR)
0.02. Required notice of shareholders' meeting (See Section 2.04):
not less than 10 days.
0.03. Authorized number of Directors (see Section 3.01): 9.
0.04. Required notice of Directors' meeting (see Section 3.05):
(a) Not less than 72 hours if by mail, and
(b) Not less than 36 hours if by telegram or personal delivery.
0.05. Authorized number of Vice Presidents (see Section 4.01): 4.
TABLE OF CONTENTS
ARTICLE I. OFFICES
1.01 Principal and Business Offices. . . . . . . . . . . . . . . . . 1
1.02 Registered Office . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. SHAREHOLDERS
2.01 Annual Meeting. . . . . . . . . . . . . . . . . . . . . . . . . 1
2.02 Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . 1
2.03 Place of Meeting. . . . . . . . . . . . . . . . . . . . . . . . 1
2.04 Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . 2
2.05 Closing of Transfer Books or Fixing of Record Date. . . . . . . 2
2.06 Voting Records. . . . . . . . . . . . . . . . . . . . . . . . . 2
2.07 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.08 Conduct of Meetings . . . . . . . . . . . . . . . . . . . . . . 3
2.09 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 Voting of Shares. . . . . . . . . . . . . . . . . . . . . . . . 3
2.11 Voting of Shares by Certain Holders . . . . . . . . . . . . . . 3
(a) Other Corporations. . . . . . . . . . . . . . . . . . . . . . . 3
(b) Legal Representatives and Fiduciaries . . . . . . . . . . . . . 4
(c) Pledgees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) Treasury Stock and Subsidiaries . . . . . . . . . . . . . . . . 4
(e) Minors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) Incompetents and Spendthrifts . . . . . . . . . . . . . . . . . 4
(g) Joint Tenants . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 Waiver of Notice by Shareholders. . . . . . . . . . . . . . . . 5
2.13 Unanimous Consent Without Meeting . . . . . . . . . . . . . . . 5
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Number . . . . . . . . . . . . . . . . . . . 5
3.02 Tenure and Qualifications . . . . . . . . . . . . . . . . . . . 5
3.03 Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . . 6
3.04 Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . 6
3.05 Notice; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . 6
3.06 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.07 Manner of Acting. . . . . . . . . . . . . . . . . . . . . . . . 6
3.08 Conduct of Meetings . . . . . . . . . . . . . . . . . . . . . . 7
3.09 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.10 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.11 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . 7
3.12 Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.13 Unanimous Consent Without Meeting . . . . . . . . . . . . . . . 8
3.14 Meetings by Telephone or by Other Communication Technology. . . 8
ARTICLE IV. OFFICERS
4.01 Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.02 Election and Term of Office . . . . . . . . . . . . . . . . . . 8
4.03 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.04 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.05 Chairman of the Board . . . . . . . . . . . . . . . . . . . . . 9
4.06 President . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.07 The Executive Vice President. . . . . . . . . . . . . . . . . . 9
4.08 The Vice Presidents . . . . . . . . . . . . . . . . . . . . . . 9
4.09 The Secretary . . . . . . . . . . . . . . . . . . . . . . . . .10
4.10 The Treasurer . . . . . . . . . . . . . . . . . . . . . . . . .10
4.11 Assistant Secretaries and Assistant Treasurers. . . . . . . . .10
4.12 Other Assistants and Acting Officers. . . . . . . . . . . . . .10
4.13 Salaries. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.01 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .11
5.02 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
5.03 Checks, Drafts, etc.. . . . . . . . . . . . . . . . . . . . . .11
5.04 Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
5.05 Voting of Securities Owned by this Corporation. . . . . . . . .12
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01 Certificates for Shares . . . . . . . . . . . . . . . . . . . .12
6.02 Facsimile Signatures and Seal . . . . . . . . . . . . . . . . .12
6.03 Signature by Former Officers. . . . . . . . . . . . . . . . . .12
6.04 Transfer of Shares. . . . . . . . . . . . . . . . . . . . . . .13
6.05 Restrictions on Transfer. . . . . . . . . . . . . . . . . . . .13
6.06 Lost, Destroyed or Stolen Certificates. . . . . . . . . . . . .13
6.07 Consideration for Shares. . . . . . . . . . . . . . . . . . . .13
6.08 Stock Regulations . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE VII. WAIVER OF NOTICE
ARTICLE VIII. UNANIMOUS CONSENT WITHOUT A MEETING
ARTICLE IX. INDEMNIFICATION
9.01 Indemnification for Successful Defense. . . . . . . . . . . . .14
9.02 Other Indemnification . . . . . . . . . . . . . . . . . . . . .14
9.03 Written Request . . . . . . . . . . . . . . . . . . . . . . . .15
9.04 Nonduplication. . . . . . . . . . . . . . . . . . . . . . . . .15
9.05 Determination of Right to Indemnification . . . . . . . . . . .15
9.06 Advance Expenses. . . . . . . . . . . . . . . . . . . . . . . .16
9.07 Nonexclusivity. . . . . . . . . . . . . . . . . . . . . . . . .16
9.08 Court-Ordered Indemnification . . . . . . . . . . . . . . . . .17
9.09 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .18
9.10 Securities Law Claim. . . . . . . . . . . . . . . . . . . . . .18
9.11 Liberal Construction. . . . . . . . . . . . . . . . . . . . . .18
9.12 Definitions Applicable to This Article. . . . . . . . . . . . .18
ARTICLE X. SEAL
ARTICLE XI. AMENDMENTS
11.01 By Shareholders . . . . . . . . . . . . . . . . . . . . . . . .20
11.02 By Directors. . . . . . . . . . . . . . . . . . . . . . . . . .20
11.03 Implied Amendments. . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE I. OFFICES
1.01 Principal and Business Offices. The Corporation may have
such principal and other business offices, either within or without the
State of Wisconsin, as the Board of Directors may designate or as the
business of the Corporation may require from time to time.
1.02 Registered Office. The registered office of the Corporation
required by the Wisconsin Business Corporation Law to be maintained in
the State of Wisconsin may be, but need not be, identical with the
principal office in the State of Wisconsin, and the address of the
registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the Corporation shall be identical to such
registered office.
ARTICLE II. SHAREHOLDERS
2.01 Annual Meeting. The annual meeting of the shareholders
shall be held at the date and hour in each year set forth in Section
0.01, or at such other time and date within thirty days before or after
said date as may be fixed by or under the authority of the Board of
Directors, for the purpose of electing Directors and for the
transaction of such other business as may come before the meeting. If
the day fixed for the annual meeting shall be a legal holiday in the
State of Wisconsin, such meeting shall be held on the next succeeding
business day. If the election of Directors shall not be held on the
day designated herein, or fixed as herein provided, for any annual
meeting of the shareholders, or at any adjournment thereof, the Board
of Directors shall cause the election to be held at a special meeting
of the shareholders as soon thereafter as conveniently may be.
2.02 Special Meeting. 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 one be designated), or the
President or the Board of Directors or by the person designated in the
written request of the holders of not less than one-tenth of all shares
of the Corporation entitled to vote at the meeting.
2.03 Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Wisconsin, as the place of
meeting for any annual meeting or for any special meeting called by the
Board of Directors. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place, either within or
without the State of Wisconsin, as the place for the holding of such
meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal business
office of the Corporation in the State of Wisconsin or such other
suitable place in the county of such principal office as may be
designated by the person calling such meeting, but any meeting may be
adjourned to reconvene at any place designated by vote of a majority of
the shares represented thereat.
2.04 Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, in case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not
less than the number of days set forth in Section 0.02 (unless a longer
period is required by law or the articles of incorporation) nor more
than fifty days before the date of the meeting, either personally or by
mail, by or at the direction of the Chairman of the Board (if one be
designated), or the President, or the Secretary, or other Officer or
persons calling the meeting, to each shareholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the
shareholder at his address as it appears on the stock record books of
the Corporation, with postage thereon prepaid.
2.05 Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at
any meeting of shareholders or any payment of any dividend, or in order
to make a determination of shareholders for any other proper purpose,
the Board of Directors may provide that the stock transfer books shall
be closed for a stated period but not to exceed, in any case seventy
days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting
of shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in
any case to be not more than seventy days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders, is to
be taken. If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to notice
of or to vote at a meeting of shareholders, or shareholders entitled to
receive payment of a dividend, the close of business on the date on
which notice of the meeting is mailed or on the date on which the
resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall be applied to any
adjournment thereof except where the determination has been made
through the closing of the stock transfer books and the stated period
of closing has expired.
2.06 Voting Record. The Officer or agent having charge of the
stock transfer books for shares of the Corporation shall, before each
meeting of shareholders, make a complete list of the shareholders
entitled to vote at such meeting, or any adjournment thereof, with the
address of and the number of shares held by each. Such record shall be
produced and kept open at the time and place of the meeting and shall
be subject to the inspection of any shareholder during the whole time
of the meeting for the purposes of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such record or transfer books or to
vote at any meeting of shareholders. Failure to comply with the
requirements of this section shall not affect the validity of any
action taken at such meeting.
2.07 Quorum and Voting Requirements. Except as otherwise provided
in the articles of incorporation or the Wisconsin Business Corporation
Law, a majority of the votes entitled to be cast on a matter,
represented in person or by proxy, shall constitute a quorum for action
on 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 that adjourned meeting. If a quorum is
present, action on a matter, other than the election of directors, is
approved if the votes cast favoring the action exceed the votes cast
opposing the action. Directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election at a meeting at
which a quorum is present. In the preceding sentence, "plurality"
means that the individuals with the largest number of votes are elected
as directors up to the maximum number of directors to be chosen at the
election. Though less than a quorum of the outstanding shares are
represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. 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.
2.08 Conduct of Meetings. The Chairman of the Board (if one be
designated), or in the Chairman's absence, the President, or in the
President's absence, the Executive Vice President (if one be
designated), or in the Executive Vice President's absence, a Vice
President in the order provided under Section 4.08, and in their
absence, any person chosen by the shareholders present shall call the
meeting of the shareholders to order and shall act as chairman of the
meeting, and the Secretary of the Corporation shall act as Secretary of
all meetings of the shareholders, but, in the absence of the Secretary,
the presiding Officer may appoint any other person to act as Secretary
of the meeting.
2.09 Proxies. At all meetings of shareholders, a shareholder
entitled to vote may vote in person or by proxy appointed in writing by
the shareholder or by his or her duly authorized attorney-in-fact.
Such proxy shall be filed with the Secretary of the Corporation before
or at the time of the meeting. Unless otherwise provided in the proxy,
a proxy may be revoked at any time before it is voted, either by
written notice filed with the Secretary or the acting Secretary of the
meeting or by oral notice given by the shareholder to the presiding
officer during the meeting. The presence of a shareholder who has
filed his or her proxy shall not of itself constitute a revocation. No
proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy. The Board of
Directors shall have the power and authority to make rules establishing
presumptions as to the validity and sufficiency of proxies.
2.10 Voting of Shares. Each outstanding share shall be entitled
to one vote upon each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of the shares
of any class or classes are enlarged, limited or denied by the articles
of incorporation.
2.11 Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the name of
another corporation may be voted either in person or by proxy, by the
president of such corporation or any other officer appointed by such
president. A proxy executed by any principal officer of such other
corporation or assistant thereto shall be conclusive evidence of the
signer's authority to act, in the absence of express notice to this
Corporation, given in writing to the Secretary of this Corporation, or
the designation of some other person by the Board of Directors or by
the by-laws of such other corporation.
(b) Legal Representatives and Fiduciaries. Shares held by
an administrator, executor, guardian, conservator, trustee in
bankruptcy, receiver or assignee for creditors may be voted by him,
either in person or by proxy, without a transfer of such shares into
his or her name, provided that there is filed with the Secretary before
or at the time of meeting proper evidence of his or her incumbency and
the number of shares held or her. Shares standing in the name of a
fiduciary may be voted by him, either in person or by proxy. A proxy
executed by a fiduciary shall be conclusive evidence of the signer's
authority to act, in the absence of express notice to this Corporation,
given in writing to the Secretary of this Corporation, that such manner
of voting is expressly prohibited or otherwise directed by the document
creating the fiduciary relationship.
(c) Pledgees. A shareholder whose shares are pledged shall
be entitled to vote such shares until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury
shares, nor shares held by another corporation if a majority of the
shares entitled to vote for the election of Directors of such other
corporation is held by this Corporation, shall be voted at any meeting
or counted in determining the total number of outstanding shares
entitled to vote, but shares of its own issue held by this Corporation
in a fiduciary capacity, or held by such other corporation in a
fiduciary capacity, may be voted and shall be counted in determining
the total number of outstanding shares entitled to vote.
(e) Minors. Shares held by a minor may be voted by such
minor in person or by proxy and no such vote shall be subject to
disaffirmance or avoidance, unless prior to such vote the Secretary of
the Corporation has received written notice or has actual knowledge
that such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held by an
incompetent or spendthrift may be voted by such incompetent or
spendthrift in person or by proxy and no such vote shall be subject to
disaffirmance or avoidance, unless prior to such vote the Secretary of
the Corporation has actual knowledge that such shareholder has been
adjudicated an incompetent or spendthrift or actual knowledge of filing
of judicial proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the names of two or
more individuals who are named in the registration as joint tenants may
be voted in person or by proxy signed by any one or more of such
individuals if either (I) no other such individual or his or her legal
representative is present and claims the right to participate in the
voting of such shares or prior to the vote files with the Secretary of
the Corporation a contrary written voting authorization or direction or
written denial or authority of the individual present or signing the
proxy proposed to be voted or (ii) all such other individuals are
deceased and the Secretary of the Corporation has no actual knowledge
that the survivor has been adjudicated not to be the successor to the
interests of those deceased.
2.12 Waiver of Notice by Shareholders. Whenever any notice
whatever is required to be given to any shareholder of the Corporation
under the articles of incorporation or by-laws or any provision of law,
a waiver thereof in writing, signed at any time, whether before or
after the time of meeting, by the shareholder entitled to such notice,
shall be deemed equivalent to the giving of such notice; provided that
such waiver in respect to any matter of which notice is required under
any provision of the Wisconsin Business Corporation Law, shall contain
the same information as would have been required to be included in such
notice, except the time and place of meeting.
2.13 Unanimous Consent Without Meeting. Any action required or
permitted by the articles of incorporation or by-laws or any provision
of law to be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote with
respect to the subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Number. The business and affairs of the
Corporation shall be managed by its Board of Directors. The number of
Directors of the Corporation shall be as provided in Section 0.03, but
shall not be less than six (6), nor more than twelve (12).
The Board of Directors shall be divided into three (3) classes of
not less than two (2) nor more than four (4) Directors each. The term
of office of the first class of Directors shall expire at the first
annual meeting after their initial election and until their successors
are elected and qualified, the term of office of the second class shall
expire at the second annual meeting after their initial election and
until their successors are elected and qualified, and the term of
office of the third class shall expire at the third annual meeting
after the initial election and until their successors are elected and
qualified. At each annual meeting after the initial classification of
the Board of Directors, the class of Directors whose term expires at
the time of such election shall be elected to hold office until the
third succeeding annual meeting and until their successors are elected
and qualified.
3.02 Tenure and Qualifications. Each Director shall hold office
until the next annual meeting of shareholders in the year in which such
Director's term expires and until his successor shall have been
elected, or until his prior death, resignation or removal. A Director
may be removed from office by affirmative vote of 80% of the
outstanding shares entitled to vote for the election of such Director,
taken at an annual meeting or a special meeting of shareholders called
for that purpose, and any vacancy so created may be filled by the
affirmative vote of 80% of such shares. A Director may resign at any
time by filing his written resignation with the Secretary of the
Corporation. Directors need not be residents of the State of Wisconsin
or shareholders of the Corporation.
3.03 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law
immediately after the annual meeting of shareholders, and each
adjourned session thereof. The place of such regular meeting shall be
the same as the place of the meeting of shareholders which precedes it,
or such other suitable place as may be announced at such meeting of
shareholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Wisconsin, for
the holding of additional regular meetings without other notice than
such resolution.
3.04 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President,
Secretary or any two Directors. The President or Secretary calling any
special meeting of the Board of Directors may fix any place, either
within or without the State of Wisconsin, as the place for holding any
special meeting of the Board of Directors called by them, and if no
other place is fixed, the place of meeting shall be the principal
business office of the Corporation in the State of Wisconsin.
3.05 Notice; Waiver. Notice of each meeting of the Board of
Directors (unless otherwise provided in or pursuant to Section 3.03)
shall be given by written notice delivered personally or mailed or
given by telegram to each Director at his or her business address or at
such other address as such Director shall have designated in writing
filed with the Secretary, in each case not less than that number of
hours prior thereto as set forth in Section 0.04. If mailed, such
notice shall be deemed to be delivered when deposited in the United
States mail so addressed, with postage thereon prepaid. If notice be
given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Whenever any notice
whatever is required to be given to any Director of the Corporation
under the articles of incorporation or by-laws or any provision of law,
a waiver thereof in writing, signed at any time, whether before or
after the time of meeting, by the Director entitled to such notice,
shall be deemed equivalent to the giving of such notice. The
attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting, except where a Director attends a meeting and
objects thereat to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of
the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
3.06 Quorum. Except as otherwise provided by law or by the
articles of incorporation or these by-laws, a majority of the number of
Directors as provided in Section 0.03 shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, by a
majority of the Directors present (though less than such quorum) may
adjourn the meeting from time to time without further notice.
3.07 Manner of Acting. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of
the Board of Directors, unless the act of a greater number is required
by law or by the articles of incorporation of these by-laws.
3.08 Conduct of Meetings. The Chairman of the Board (if one be
designated), or in the Chairman's absence, the President, or in the
President's absence, the Executive Vice President (if one be
designated), or in the Executive Vice President's absence, a Vice
President in the order provided under Section 4.06, and in their
absence, any Director chosen by the Directors present, shall call
meetings of the Board of Directors to order and shall act as chairman
of the meeting. The Secretary of the Corporation shall act as
Secretary of all meetings of the Board of Directors, but in the absence
of the Secretary, the presiding Officer may appoint any Assistant
Secretary or any Director or other person present to act as Secretary
of the meeting.
3.09 Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of Directors,
may be filled until the next succeeding annual election by the
affirmative vote of a majority of the Directors then in office, though
less than a quorum of the Board of Directors, provided that in case of
a vacancy created by the removal of a Director by vote of the
shareholders, the shareholders shall have the right to fill such
vacancy at the same meeting or any adjournment thereof by the
affirmative vote of 80% of the outstanding shares entitled to vote for
the election of such Directors.
3.10 Compensation. The Board of Directors, by affirmative vote
of a majority of the Directors then in office, and irrespective of any
personal interest of any of its members, may establish reasonable
compensation of all Directors for services to the Corporation as
Directors, Officers or otherwise, or may delegate such authority to an
appropriate committee. The Board of Directors also shall have
authority to provide for or to delegate authority to an appropriate
committee to provide for reasonable pensions, disability or death
benefits, and other benefits of payments, to Directors, Officers and
employees and to their estates, families, dependents or beneficiaries
on account of prior services rendered by such Directors, Officers and
employees to the Corporation.
3.11 Presumption of Assent. A Director of the Corporation who is
present at a meeting of the Board of Directors or a committee thereof
of which he or she is a member, at which action on any corporate matter
is taken, shall be presumed to have assented to the action taken unless
his or her dissent shall be entered in to the minutes of the meeting or
unless he or she shall file his or her written dissent to such action
with the person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to
the Secretary of the Corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a Director who
voted in favor of such action.
3.12 Committees. The Board of Directors, by resolution adopted
by the affirmative vote of a majority of the number of Directors as
provided in Section 0.03, may designate one or more committees, each
committee to consist of three or more Directors elected by the Board of
Directors, which to the extent provided in said resolution as initially
adopted, and as thereafter supplemented or amended by further
resolution adopted by a like vote, shall have and may exercise, when
the Board of Directors is not in session, the powers of the Board of
Directors in the management of the business and affairs of the
corporation, except action in respect to dividends to shareholders,
election of the principal officers or the filling of vacancies in the
Board of Directors or committees created pursuant to this section. The
Board of Directors may elect one or more of its members as alternate
members of any such committee who may take the place of any absent
member or members at any meeting of such committee, upon request by the
President or upon request by the chairman of such meeting. Each such
committee shall fix its own rules governing the conduct of its
activities and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request.
3.13 Unanimous Consent Without Meeting. Any action required or
permitted by the articles of incorporation or by-laws or any provision
of law to be taken by the Board of Directors at a meeting or by
resolution may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the
Directors then in office.
3.14 Meetings by Telephone or by Other Communication Technology.
Meetings of the Board of Directors or committees may be conducted by
telephone or by other communication technology in accordance with
Section 180.0820 of the Wisconsin Business Corporation Law. At any
such meeting, all participating directors shall be informed that a
meeting is taking place at which official business may be transacted.
ARTICLE IV. OFFICERS
4.01 Number. The principal Officers of the Corporation shall be
a President, the number of Vice Presidents as provided in Section 0.05,
a Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other Officers and Assistant Officers as may
be deemed necessary may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person,
except the offices of President and Secretary and the offices of
President and Vice President.
4.02 Election and Term of Office. The Officers of the
Corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the
election of Officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be. Each Officer
shall hold office until his or her successor shall have been duly
elected or until his or her prior to death, resignation or removal.
4.03 Removal. Any Officer or agent may be removed by the Board
of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment shall not of itself create contract rights.
4.04 Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification, or otherwise shall be
filled by the Board of Directors for the unexpired portion of the term.
4.05 Chairman of the Board. The Board of Directors may at their
discretion elect a Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the shareholders and Board of
Directors, and shall carry out such other duties and have such
responsibilities as may be specified by the Board of Directors.
4.06 President. The President shall be the Chief Executive
Officer of the Corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business
and affairs of the Corporation. He or she shall, when present, preside
at all meetings of the shareholders and of the Board of Directors. He
or she shall have authority, subject to such rules as may be prescribed
by the Board of Directors, to appoint such agents and employees of the
Corporation as he or she shall deem necessary, to prescribe their
powers, duties and compensation, and to delegate authority to them.
Such agents and employees shall hold office at the discretion of the
President. He or she shall have authority to sign, execute and
acknowledge, on behalf of the Corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents
or instruments necessary r proper to be executed in the course of the
Corporation's regular business, or which shall be authorized by
resolution of the Board of Directors; and, except as otherwise provided
by law or the Board of Directors, he or she may authorize any Vice
President or other Officer or agent of the Corporation to sign, execute
and acknowledge such documents or instruments in his or her place and
stead. In general, he or she shall perform all duties incident to the
office of Chief Executive Officer and such other duties as may be
prescribed by the Board of Directors from time to time.
4.07 The Executive Vice President. The Executive Vice President,
if one be designated, shall assist the President in the discharge of
supervisory, managerial and executive duties and functions. In the
absence of the President or in the event of his or her death, inability
or refusal to act, the Executive Vice President shall perform the
duties of the President, and when so acting shall have all the powers
and duties of the President. He or she shall perform such other duties
as from time to time may be assigned to him or her by the Board of
Directors or the President.
4.08 The Vice Presidents. In the absence of the President and
the Executive Vice President or in the event of their death, inability
or refusal to act, or in the event for any reason it shall be
impracticable for them to act personally, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the
order designated by the Board of Directors, or in the absence of any
designation, then in the order of their election) shall perform the
duties of the President, and when so acting, shall have all the powers
of and be subject to all the restrictions upon the President. Any Vice
President may sign, with the Secretary or Assistant Secretary,
certificates for shares of the Corporation; and shall perform such
other duties and have such authority as from time to time may be
delegated or assigned to him or her by the President, the Executive
Vice President or by the Board of Directors. The execution of any
instrument of the Corporation by any Vice President shall be conclusive
evidence, as to third parties, of his or her authority to act in the
stead of the President.
4.09 The Secretary. The Secretary shall: (a) keep the minutes
of the meetings of the shareholders and of the Board of Directors in
one or more books provided for that purpose; (b) see that all notices
are duly given in accordance with the provisions of these by-laws or as
required by law; (c) be custodian of the corporate records and of the
seal of the Corporation and see that the seal of the Corporation is
affixed to all documents, the execution of which on behalf of the
Corporation under its seal is duly authorized; (d) keep or arrange for
the keeping of a register of the post office address of each
shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President, or a Vice President,
certificates for shares of the Corporation, the issuance of which shall
have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation; and (g)
in general, perform all duties incident to the office of Secretary and
have such other duties and exercise such authority as from time to time
may be delegated or assigned to him or her by the President or by the
Board of Directors.
4.10 The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
Corporation; (b) receive and give receipts for moneys due and payable
to the Corporation from any source whatsoever, and deposit all such
moneys in the name of the Corporation in such banks, trust companies or
other depositories as shall be selected in accordance with the
provisions of Section 5.04; and (c) in general, perform all of the
duties incident to the office of Treasurer and have such other duties
and exercise such other authority as from time to time may be delegated
or assigned to him or her by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer shall
give a bond for the faithful discharge of his duties in such sum and
with such surety or sureties as the Board of Directors shall determine.
4.11 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 of
the Treasurer, respectively, or by the President or the Board of
Directors.
4.12 Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint any person to act as
assistant to any Officer, or as agent for the Corporation in his 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 shall have the power to perform all the duties of the office
to which he or she is so appointed to be 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.
4.13 Salaries. The salaries of the principal Officers shall be
fixed from time to time by the Board of Directors or by a duly
authorized committee thereof, and no Officer shall be prevented from
receiving such salary by reason of the fact that he or she is also a
Director of the Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS:
SPECIAL CORPORATE ACTS
5.01 Contracts. The Board of Directors may authorize any Officer
or Officers, agent or agents, to enter into any contract or execute or
deliver any instrument in the name of and on behalf of the Corporation,
and such authorization may be general or confined in specific
instances. No contract or other transaction between the Corporation
and one or more of its Directors of any other corporation, firm,
association, or entity in which one or more of its Directors of
Officers are financially interested, shall be either void or voidable
because of such relationship or interest or because such Director or
Directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract
or transaction or because his, or her, or their votes are counted for
such purpose, if (a) the fact of such relationship or interest is
disclosed or known to the Board of Directors or committee which
authorizes, approves or ratifies the contract or transaction by a vote
or consent sufficient for the purpose without counting the votes or
consents of such interested Directors; or (b) the fact of such
relationship or interest is disclosed or known to the shareholders
entitled to vote and they authorize, approve or ratify such contract or
transaction by vote or written consent; or (c) the contract or
transaction is fair and reasonable to the Corporation. Common or
interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or a committee thereof
which authorizes, approves or ratifies such contract or transactions.
5.02 Loans. No indebtedness for borrowed money shall be
contracted on behalf of the Corporation and no evidences of such
indebtedness shall be issued in its name unless authorized by or under
the authority of a resolution of the Board of Directors. Such
authorization may be general or confined to specific instances.
5.03 Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued
in the name of the Corporation shall be signed by such Officer or
Officers, agent or agents of the Corporation and in such manner as
shall from time to time be determined by or under the authority of a
resolution of the Board of Directors.
5.04 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as may
be selected by or under the authority of a resolution of the Board of
Directors.
5.05 Voting of Securities Owned by this Corporation. Subject
always to the specific directions of the Board of Directors, (a) any
shares or other securities issued by any other corporation and owned or
controlled by this Corporation may be voted at any meeting of security
holders of such other corporation by the President of this Corporation
if he or she be present, or in the President's absence by the Executive
Vice President (if one be designated), or in the Executive Vice
President's absence, by any Vice President of this Corporation who may
be present, and (b) whenever, in the judgment of the President, or in
his absence, of the Executive Vice President (if one be designated), or
in the Executive Vice President's absence, of any Vice President, it is
desirable for this Corporation to execute a proxy or written consent in
respect to any shares or other securities issued by any other
corporation and owned by this Corporation, such proxy or consent shall
be executed in the name of this Corporation by the President, Executive
Vice President or one of the Vice Presidents of this Corporation in the
order as provided in clause (a) of this Section, without necessity of
any authorization by the Board of Directors, affixation of corporate
seal or countersignature or attestation by another officer. Any person
or persons designated in the manner above stated as the proxy or
proxies of this Corporation shall have full right, power and authority
to vote the shares or other securities issued by such other corporation
and owned by this Corporation the same as such shares or other
securities might be voted by this Corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND
THEIR TRANSFER
6.01 Certificates for Shares. Certificates representing shares
of the Corporation shall be in such form, consistent with law, as shall
be determined by the Board of Directors. Such Certificates shall be
signed by the President or a Vice President and by the Secretary or an
Assistant Secretary. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address
of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the stock
transfer books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificate for a like number of shares
shall have been surrendered and canceled, except as provided in Section
6.06.
6.02 Facsimile Signatures and Seals. The seal of the
Corporation, if the Corporation has elected to have a seal, on any
certificates for shares may be a facsimile. The signatures of the
President or Vice President and the Secretary or Assistant Secretary
upon a certificate may be facsimiles if the certificate is manually
signed on behalf of a transfer agent, or a registrar, other than the
Corporation itself or an employee of the Corporation.
6.03 Signature by Former Officers. In case any Officer, who has
signed or whose facsimile signature has been placed upon, any
certificate for shares, shall have ceased to be such Officer before
such certificate is issued, it may be issued by the Corporation with
the same effect as if he or she were such Officer at the date of its
issue.
6.04 Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer, the Corporation
may treat the registered owner of such shares as the person exclusively
entitled to vote, to receive notifications and otherwise to have and
exercise all the rights and powers of an owner. Where a certificate
for shares is presented to the Corporation with a request to register
for transfer, the Corporation shall not be liable to the owner or any
other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the necessary
endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The Corporation may
require reasonable assurance that said endorsements are genuine and
effective and in compliance with such other regulations as may be
prescribed by or under the authority of the Board of Directors.
6.05 Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of
any restriction imposed by the Corporation upon the transfer of such
shares.
6.06 Lost, Destroyed or Stolen Certificates. Where the owner
claims that his or her certificate for shares has been lost, destroyed
or wrongfully taken, a new certificate shall be issued in place thereof
if the owner (a) so requests before the Corporation has notice that
such shares have been acquired by a bona fide purchaser, and (b) files
with the Corporation a sufficient indemnity bond, and (c) satisfies
such other reasonable requirements as may be prescribed by or under the
authority of the Board of Directors.
6.07 Consideration for Shares. The shares of the Corporation may
be issued for such consideration as shall be fixed from time to time by
the Board of Directors, provided that any shares having a par value
shall not be issued for a consideration less than the par value
thereof. The consideration to be paid for shares may be paid in whole
or in part, in money, in other property, tangible or intangible, or in
labor or services actually performed for the Corporation. When payment
of the consideration for which shares are to be issued shall have been
received by the Corporation, such shares shall be deemed to be fully
paid and nonassessable by the Corporation. No certificate shall be
issued for any share until such share is fully paid.
6.08 Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may deem
expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation.
ARTICLE VII. WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of the Wisconsin Business Corporation Law or under the
provisions of the articles of incorporation or by-laws a waiver thereof
in writing signed at any time, whether before or after the time of the
meeting, by the person or persons entitled to such notice shall be
deemed equivalent to the giving of such notice. Such waiver by a
shareholder in respect of any matter of which notice is required under
any provision of the Wisconsin Business Corporation Law shall contain
the same information as would have been required to be included in such
notice under any applicable provisions of said Law, except that the
time and place of meeting need not be stated.
ARTICLE VIII. UNANIMOUS CONSENT WITHOUT A MEETING
Any action required by the articles of incorporation or by-laws or
any provision of the Wisconsin Business Corporation Law to be taken at
a meeting or any other action which may be taken at a meeting may be
taken without a meeting if a consent in writing setting forth the
action so taken shall be signed by all of the shareholders, Directors
or members of a committee thereof entitled to vote with respect to the
subject matter thereof and such consent shall have the same force and
effect as a unanimous vote.
ARTICLE IX. INDEMNIFICATION
9.01 Indemnification for Successful Defense. Within 20 days
after receipt of a written request pursuant to Section 9.03, the
Corporation shall indemnify a Director, Officer, Employee or Agent, to
the extent he or she has been successful on the merits or otherwise in
the defense of a proceeding, for all reasonable expenses incurred in
the proceeding if the Director, Officer, Employee or Agent was a party
because he or she is a Director, Officer, Employee or Agent of the
Corporation.
9.02 Other Indemnification. (a) In cases not included under
Section 9.01, the Corporation shall indemnify a Director, Officer,
Employee or Agent against all liabilities and expenses incurred by the
Director, Officer, Employee or Agent in a proceeding to which the
Director, Officer, Employee or Agent was a party because he or she is a
Director, Officer, Employee, or Agent of the Corporation, unless
liability was incurred because the Director, Officer, Employee or Agent
breached or failed to perform a duty he or she owes to the Corporation
and the breach or failure to perform constitutes any of the following:
(1) A willful failure to deal fairly with the Corporation or
its shareholders in connection with a matter in which the
Director, Officer, Employee or Agent has a material conflict of
interest.
(2) A violation of criminal law, unless the Director,
Officer, Employee or Agent had reasonable cause to believe his or
her conduct was lawful or no reasonable cause to believe his or
her conduct was unlawful.
(3) A transaction from which the Director, Officer, Employee
or Agent derived an improper personal profit.
(4) Willful misconduct.
(b) Determination of whether indemnification is required under
this Section shall be made pursuant to Section 9.05.
(c) The termination of a proceeding by judgment, order,
settlement or conviction, or upon a plea of no contest or an equivalent
plea, does not, by itself, create a presumption that indemnification of
the Director, Officer, Employee or Agent is not required under this
Section.
9.03 Written Request. A Director, Officer, Employee or Agent who
seeks indemnification under Sections 9.01 or 9.02 shall make a written
request to the Corporation.
9.04 Nonduplication. The Corporation shall not indemnify a
Director, Officer, Employee or Agent under Sections 9.01 or 9.02 if the
Director, Officer, Employee or Agent has previously received
indemnification or allowance of expenses from any person, including the
Corporation, in connection with the same proceeding. However, the
Director, Officer, Employee or Agent has no affirmative duty to look to
any other person for indemnification nor to first exhaust his remedies
to seek indemnification from such other person.
9.05 Determination of Right to Indemnification.
(a) Unless otherwise provided by the articles of incorporation or
by written agreement between the Director, Officer, Employee or Agent,
and the Corporation, the Director, Officer, Employee or Agent seeking
indemnification under Section 9.02 shall select one of the following
means for determining his or her right to indemnification:
(1) By a majority vote of a quorum of the Board of Directors
consisting of Directors not at the time parties to the same or
related proceedings. If a quorum of disinterested Directors
cannot be obtained, by majority vote of a committee duly appointed
by the Board of Directors and consisting solely of 2 or more
Directors not at the time parties to the same or related
proceedings. Directors who are parties to the same or related
proceedings may participate in the designation of members of the
committee.
(2) By independent legal counsel selected by a quorum of the
Board of Directors or its committee in the manner prescribed in
sub. (1) or, if unable to obtain such a quorum or committee, by a
majority vote of the full Board of Directors, including Directors
who are parties to the same or related proceedings.
(3) By a panel of 3 arbitrators consisting of one arbitrator
selected by those Directors entitled under sub. (2) to select
independent legal counsel, one arbitrator selected by the Director
or Officer seeking indemnification and one arbitrator selected by
the 2 arbitrators previously selected.
(4) By an affirmative vote of the majority of shares
represented at a meeting of shareholders at which a quorum is
present. Shares owned by, or voted under the control of, persons
who are at the time parties to the same or related proceedings,
whether as plaintiffs or defendants or in any other capacity, may
not be voted in making the determination.
(5) By a court under Section 9.08.
(6) By any other method provided for in any additional right
to indemnification permitted under Section 9.07.
(b) In any determination under (a), the burden of proof is on the
Corporation to prove by clear and convincing evidence that
indemnification under Section 9.02 should not be allowed.
(c) A written determination as to a Director, Officer, Employee
or Agent's indemnification under Section 9.02 shall be submitted to
both the Corporation and the Director, Officer, Employee or Agent
within 60 days of the selection made under (a).
(d) If it is determined that indemnification is required under
Section 9.02, the Corporation shall pay all liabilities and expenses
not prohibited by Section 9.04 within 10 days after receipt of the
written determination under (c). The Corporation shall also pay all
expenses incurred by the Director, Officer, Employee or Agent, in the
determination process under (a).
9.06 Advance Expenses. Within 10 days after receipt of a written
request by a Director, Officer, Employee or Agent who is a party to a
proceeding, the Corporation shall pay or reimburse his or her
reasonable expenses as incurred if the Director, Officer, Employee or
Agent provides the Corporation with all of the following:
(1) A written affirmation of his or her good faith belief
that he or she has not breached or failed to perform his or her
duties to the Corporation.
(2) A written undertaking, executed personally or on his or
her behalf, to repay the allowance (together with reasonable
interest thereon) to the extent that it is ultimately determined
under Section 9.05 that indemnification under Section 9.02 is not
required and that indemnification is not ordered by a court under
Section 9.08(b)(2). The undertaking under this subsection shall
be an unlimited general obligation of the Director, Officer,
Employee or Agent, and may be accepted without reference to his or
her ability to repay the allowance. The undertaking may be
secured or unsecured.
9.07 Nonexclusivity.
(a) Except as provided in (b), Sections 9.01, 9.02 and 9.06 do
not preclude any additional right to indemnification or allowance of
expenses that a Director, Officer, Employee or Agent may have under any
of the following:
(1) The articles of incorporation.
(2) A written agreement between the Director, Officer,
Employee or Agent, and the Corporation.
(3) A resolution of the Board of Directors.
(4) A resolution, after notice, adopted by a majority vote
of all of the Corporation's voting shares then issued and
outstanding.
(b) Regardless of the existence of an additional right under (a),
the Corporation shall not indemnify a Director, Officer, Employee or
Agent, or permit a Director, Officer, Employee or Agent to retain any
allowance of expenses, unless it is determined by or on behalf of the
Corporation that the Director, Officer, Employee or Agent did not
breach or fail to perform a duty he or she owes to the Corporation
which constitutes conduct under Section 9.02(a)(1), (2), (3) or (4). A
Director, Officer, Employee or Agent who is a party to the same or
related proceeding for which indemnification or an allowance of
expenses is sought may not participate in a determination under this
subsection.
(c) Sections 9.01 to 9.12 do not affect the Corporation's power
to pay or reimburse expenses incurred by a Director, Officer, Employee
or Agent in any of the following circumstances:
(1) As a witness in a proceeding to which he or she is not a
party.
(2) As a plaintiff or petitioner in a proceeding because he
or she is or was a Director, Officer, Employee or Agent of the
Corporation.
9.08 Court-Ordered Indemnification.
(a) Except as provided otherwise by written agreement between the
Director, Officer, Employee, or Agent and the Corporation, a Director,
Officer, Employee, or Agent who is a party to a proceeding may apply
for indemnification to the court conducting the proceeding or to
another court of competent jurisdiction. Application may be made for
an initial determination by the court under Section 9.05(a)(5) or for
review by the court of an adverse determination under Section 9.05(a)
(1), (2), (3), (4) or (6). After receipt of an application, the court
shall give any notice it considers necessary.
(b) The court shall order indemnification if it determines any of
the following:
(1) That the Director, Officer, Employee or Agent is
entitled to indemnification under Sections 9.01 or 9.02.
(2) That the Director, Officer, Employee or Agent is fairly
and reasonably entitled to indemnification in view of all the
relevant circumstances, regardless of whether indemnification is
required under Section 9.02.
(c) If the court determines under (b) that the Director, Officer,
Employee or Agent is entitled to indemnification, the Corporation shall
pay the Director, Officer, Employee or Agent's expenses incurred to
obtain the court-ordered indemnification.
9.09 Insurance. The Corporation may purchase and maintain
insurance on behalf of an individual who is a Director, Officer,
Employee or Agent of the Corporation against liability asserted against
or incurred by the individual in his or her capacity as a Director,
Officer, Employee or Agent, regardless of whether the Corporation is
required or authorized to indemnify or allow expenses to the individual
against the same liability under Sections 9.01, 9.02, or 9.06.
9.10 Securities Law Claims.
(a) Pursuant to the public policy of the State of Wisconsin, the
Corporation shall provide indemnification, allowance of expenses and
insurance for any liability incurred in connection with a proceeding
involving securities regulation described under (b) to the extent
required or permitted under Sections 9.01 to 9.09.
(b) Sections 9.01 to 9.09 apply, to the extent applicable to any
other proceeding, to any proceeding involving a federal or state
statute, rule or regulation regulating the offer, sale or purchase of
securities, securities brokers or dealers, or investment companies or
investment advisers.
9.11 Liberal Construction. In order for the corporation to
obtain and retain qualified Directors, Officers, Employees, and Agents,
the foregoing provisions shall be liberally administered in order to
afford maximum indemnification of Directors, Officers, Employees, or
Agents, and accordingly, the indemnification above provided for shall
be granted in all cases unless to do so would clearly contravene
applicable law, controlling precedent or public policy.
9.12 Definitions Applicable to This Article.
(a) "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with, the Corporation.
(b) "Corporation" means this Corporation and any domestic or
foreign predecessor of this Corporation where the predecessor
corporation's existence ceased upon the consummation of a merger or
other transaction.
(c) "Director, Officer, Employee or Agent" means any of the
following:
(1) A natural person who is or was a director, officer,
employee or agent (including attorneys) of this Corporation,
provided, however, that no attorney of the Corporation shall be
considered an agent with respect to those actions taken by such
attorney solely in his capacity as an independent contractor to
the Corporation.
(2) A natural person who, while a Director, Officer,
Employee or Agent, of this Corporation, is or was serving at the
Corporation's request as a Director, Officer, Employee, Agent,
Partner, trustee, member of any governing or decision-making
committee of another Corporation or foreign corporation,
partnership, joint venture, trust or other enterprise.
(3) A natural person who, while a Director, Officer,
Employee or Agent of this Corporation, is or was serving an
employee benefit plan because his or her duties to the Corporation
also impose duties on, or otherwise involve services by, the
person to the plan or to participants or beneficiaries of the
plan.
(4) Unless the context requires otherwise, the estate or
personal representative of a Director, Officer, Employee or Agent.
For purposes of this Article, it shall be conclusively presumed
that any Director, Officer, Employee or Agent serving as a Director,
Officer, Employee, Agent, partner, trustee, member of any governing or
decision-making committee of an affiliate shall be so serving at the
request of the Corporation.
(d) "Expenses" include fees, costs, charges, disbursements,
attorney fees and other expenses incurred in connection with a
proceeding.
(e) "Liability" includes the obligation to pay a judgment,
settlement, penalty, assessment, forfeiture or fine, including an
excise tax assessed with respect to an employee benefit plan, and
reasonable expenses.
(f) "Party" includes a natural person who was or is, or who is
threatened to be made, a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending or completed
civil, criminal, administrative or investigative action, suit,
arbitration or other proceeding, whether formal or informal, which
involves foreign, federal, state or local law and which is brought by
or in the right of the Corporation or by any other person.
ARTICLE X. SEAL
There shall be no corporate seal.
ARTICLE XI. AMENDMENTS
11.01 By Shareholders. These by-laws may be altered, amended or
repealed and new by-laws may be adopted by the shareholders by
affirmative vote of not less than a majority of the shares present or
represented at an annual or special meeting of the shareholders at
which a quorum is in attendance.
11.02. By Directors. These by-laws may also be altered, amended
or repealed and new by-laws may be adopted by the board of Directors by
affirmative vote of a majority of the number of Directors present at
any meeting at which a quorum is in attendance, but no by-law adopted
by the shareholders or subscribers shall be amended or repealed by the
Board of Directors if the by-law so adopted so provides.
11.03 Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent
with the by-laws then in effect but is taken or authorized by
affirmative vote of not less than the number of shares or the number of
Directors required to amend the by-laws so that the by-laws would be
consistent with such action, shall be given the same effect as though
the by-laws had been temporarily amended or suspended so far, but only
so far, as is necessary to permit the specific action so taken or
authorized.
EXHIBIT 10.1
LUNAR CORPORATION
AMENDED AND RESTATED
STOCK OPTION PLAN
1. Plan. To provide incentives to officers, key employees and
consultants of Lunar Corporation (the "Company"), its subsidiaries, and
any other entity (collectively "subsidiaries") designated by the Board
of Directors of the Company (the "Board"), and members of the Board to
contribute to the success and prosperity of the Company, based upon the
ownership of the common stock, par value $.01, of the Company ("Common
Stock"), the Committee hereinafter designated, may grant nonqualified
stock options to officers, key employees, consultants and eligible
members of the Board on the terms and subject to the conditions stated
in this Plan.
2. Eligibility. Officers, key employees and consultants of the
Company and its subsidiaries and members of the Board who are not
employees of the Company ("non-employee directors") shall be eligible,
upon selection by the Committee, to receive stock options as the
Committee, in its discretion, shall determine.
3. Shares Issuable. The maximum number of shares of Common Stock
to be issued after the effective date of this Plan pursuant to all
grants of stock options hereunder shall be 1,000,000, subject to
adjustment in accordance with Section 5. Shares of Common Stock
subject to a stock option granted hereunder, which are not issued by
reason of the expiration, cancellation or other termination of such
stock option, shall again be available for future grants of stock
options under this Plan.
Shares of Common Stock to be issued may be authorized and unissued
shares of Common Stock, treasury stock, or a combination thereof.
To the extent required by Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the rules and regulations
thereunder, the maximum number of shares of Common Stock with respect
to which options may be granted during any calendar year to any person
shall be 100,000, subject to adjustment as provided in Section 5.
4. Administration of the Plan. This Plan shall be administered
by a committee designated by the Board (the "Committee") consisting of
two or more members of the Board, each of whom shall be a "Non-Employee
Director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and an "outside
director" within the meaning of Section 162(m) of the Code.
The Committee shall, subject to the terms of this Plan, establish
eligibility guidelines, select officers, key employees, consultants and
non-employee directors for participation in this Plan and determine the
number of shares of Common Stock subject to a stock option granted
hereunder, the exercise price for such shares of Common Stock, the time
and conditions of vesting or exercise and all other terms and
conditions of the stock option, including, without limitation, the form
of the option agreement. The Committee may establish rules and
regulations for the administration of the Plan, interpret the Plan and
impose, incidental to the grant of a stock option, conditions with
respect to the grant or award of stock options or competitive
employment or other activities not inconsistent with or conflicting
with this Plan. All such rules, regulations and interpretations
relating to this Plan adopted by the Committee shall be conclusive and
binding on all parties. All grants of stock options under this Plan
shall be evidenced by written agreements between the Company and the
optionees, and no such grant shall be valid until so evidenced.
5. Changes in Capitalization. Appropriate adjustments shall be
made by the Committee in the maximum number of shares to be issued
under the Plan and the maximum number of shares which are subject to
any stock option granted hereunder, and the exercise price therefor, to
give effect to any stock splits, stock dividends and other relevant
changes in the capitalization of the Company occurring after the
effective date of this Plan (which shall not include the sale by the
Company of shares of Common Stock or securities convertible into shares
of Common Stock).
6. Effective Date and Term of Plan. This Plan shall be submitted
to the shareholders of the Company for approval and, if approved, shall
become effective on the date thereof. This Plan shall terminate ten
years after it becomes effective unless terminated prior thereto by
action of the Board. No further grants shall be made under this Plan
after termination, but termination shall not affect the rights of any
optionee under any grants made prior to termination.
7. Amendments. This Plan may be amended by the Board in any
respect, except that no amendment may be made without shareholder
approval if such amendment would (a) increase the maximum number of
shares of Common Stock available for issuance under this Plan (other
than as provided in Section 5) or (b) otherwise require shareholder
approval.
8. Existing Stock Options. Stock options granted by the Company
prior to the date of shareholder approval of this Plan shall continue
in effect in accordance with their terms.
9. Grants of Stock Options. Options to purchase shares of Common
Stock may be granted hereunder to such eligible officers, key
employees, consultants, and non-employee directors as may be selected
by the Committee.
10. Option Price. The option price per share of Common Stock
purchasable upon exercise of an option granted hereunder shall be
determined by the Committee; provided, however, that the option price
per share of Common Stock purchasable upon exercise of an option
granted under this Plan shall be 100% of the fair market value of a
share of Common Stock on the date of grant of such option. For
purposes hereof, "fair market value" shall be determined by the
Committee.
11. Stock Option Period. Each stock option granted hereunder may
be granted at any time on or after the effective date, and prior to the
termination, of this Plan. The Committee shall determine whether such
stock option shall become exercisable in cumulative or non-cumulative
installments or in full at any time. An exercisable stock option may
be exercised in whole or in part with respect to whole shares of Common
Stock only. The period for the exercise of each stock option shall be
determined by the Committee.
12. Exercise of Stock Options. (a) Upon exercise, the option
price may be paid in cash, in shares of Common Stock having a fair
market value on the date of exercise equal to the option price, or in a
combination thereof. The Company may arrange or approve of a cashless
option exercise procedure which complies with the provisions of Section
16 of the Exchange Act and the rules and regulations thereunder.
(b) An option may be exercised during an optionee's continued
employment with the Company or one of its subsidiaries, or service on
the Board, as the case may be, and, except in the event of such
optionee's death, within a period of 30 days following termination of
such employment or service, but only to the extent exercisable and
within the term of such option at the time of the termination of such
employment or service; provided, however, that if employment of the
optionee by the Company or one of its subsidiaries or service on the
Board shall have terminated by reason of retirement after age 60, then
the option may be exercised within a period not in excess of one year
following such termination of employment or service on the Board, but
only to the extent exercisable and within the term of such option at
the time of such termination of employment or service.
(c) No option shall be transferable except that in the event of
the death of an optionee (i) during employment or service on the Board,
as the case may be, (ii) within a period of one year after termination
of employment or service on the Board, as the case may be, by reason of
retirement after age 60 at a time when the option is otherwise
exercisable or (iii) within 30 days after termination of employment or
service on the Board, as the case may be, for any other reason,
outstanding stock options may be exercised, but only to the extent
exercisable and within the term of such option prior to the application
of this Section 12, by the executor, administrator or personal
representative of such deceased optionee within one year of the death
of such optionee in the case of clauses (i) and (ii) or within 90 days
of the death of such optionee in the case of clause (iii).
13. Acceleration of Options upon a Change in Control. The
following provisions shall apply in the event of a "Change in Control":
(a) In the event of a Change in Control, any stock options not
previously exercisable in full shall become fully exercisable.
(b) For purposes hereof, "Change in Control" means:
(1) The acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
50% or more of the then outstanding shares of Common Stock (the
"Outstanding Common Stock"); provided, however, that the following
acquisitions shall not constitute a Change in Control: (A) any
acquisition by the Company, (B) any acquisition by an employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (C) any acquisition by an
underwriter or underwriters as part of a bona fide public distribution
of securities of the Company or (D) any acquisition by any Person which
beneficially owned as of the effective date of this Plan, 30% or more
of the outstanding Common Stock; and provided further that, for
purposes of clause (A), if any Person (other than the Company or any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company) shall become the
beneficial owner of 50% or more of the outstanding Common Stock by
reason of an acquisition by the Company and such Person shall, after
such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Common Stock and such beneficial
ownership is publicly announced, such additional beneficial ownership
shall constitute a Change in Control;
(2) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided, however, that any individual who
becomes a director of the Company subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed to have been a member of
the Incumbent Board; and provided further, that no individual who was
initially elected as a director of the Company as a result of an actual
or threatened election contest, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall be deemed to have been
a member of the Incumbent Board;
(3) Approval by the shareholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i)
more than 50% of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation
and more than 50% of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals or entities
who were the beneficial owners, respectively, of the Outstanding Common
Stock immediately prior to such reorganization, merger or consolidation
and in substantially the same proportions relative to each other as
their ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Common Stock, (ii) no Person (other
than the Company, any employee plan (or related trust) sponsored or
maintained by the Company or the corporation resulting from such
reorganization, merger or consolidation (or any corporation controlled
by the Company) and any Person which beneficially owned, immediately
prior to such reorganization, merger or consolidation, directly or
indirectly, 30% or more of the Outstanding Common Stock) beneficially
owns, directly or indirectly, 50% or more of the then outstanding
shares of common stock of such corporation or 50% or more of the
combined voting power of the then outstanding securities of such
corporation entitled to vote generally in the election of directors and
(iii) at least a majority of the members of the Board of directors of
the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for
such reorganization, merger or consolidation; or
(4) Approval by the shareholders of the Company of (i) a plan of
complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the
Company other than to a corporation with respect to which, immediately
after such sale or other disposition, (A) more than 50% of the then
outstanding shares of common stock thereof and more than 50% of the
combined voting power of the then outstanding securities thereof
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock immediately prior to such
sale or other disposition and in substantially the same proportions
relative to each other as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Common Stock, (B) no
Person (other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or such corporation (or
any corporation controlled by the Company) and any Person which
beneficially owned, immediately prior to such sale or other
disposition, directly or indirectly, 30% or more of the Outstanding
Company Common Stock) beneficially owns, directly or indirectly, 50% or
more of the then outstanding shares of common stock thereof or 50% or
more of the combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors and (C)
at least a majority of the members of the Board of directors thereof
were members of the Incumbent Board at the time of the execution of the
initial agreement or action of the Board providing for such sale or
other disposition.
Exhibit 11
LUNAR CORPORATION AND SUBSIDIARIES
Statement Regarding Computation of Earnings Per Share
(Unaudited)
Three months ended Six months ended
December 31,December 31, December 31,December 31,
1996 1995 1996 1995
---------- ---------- ---------- ----------
Net income $4,545,488 $2,243,788 $7,446,450 $3,571,530
========== ========== ========== ==========
Weighted average shares outstanding
8,555,430 8,093,978 8,534,661 8,046,246
Stock options calculated according
to the treasury stock method
520,886 747,306 539,120 736,788
---------- ---------- ---------- ----------
Weighted average number of common
and common-equivalent shares
outstanding 9,076,316 8,841,284 9,073,781 8,783,034
========== ========== ========== ==========
Net income per common and
common-equivalent shares $0.50 $0.25 $0.82 $0.41
===== ===== ===== =====
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from Form 10-Q for the three months ended
December 31, 1996, and is qualified in its entirety by
reference to such financial statements.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 25,302
<SECURITIES> 3,504
<RECEIVABLES> 29,836
<ALLOWANCES> 2,580
<INVENTORY> 9,836
<CURRENT-ASSETS> 64,311
<PP&E> 7,428
<DEPRECIATION> 3,462
<TOTAL-ASSETS> 73,515
<CURRENT-LIABILITIES> 12,268
<BONDS> 0
<COMMON> 86
0
0
<OTHER-SE> 61,161
<TOTAL-LIABILITY-AND-EQUITY> 73,515
<SALES> 39,431
<TOTAL-REVENUES> 39,431
<CGS> 17,409
<TOTAL-COSTS> 30,856
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 11,326
<INCOME-TAX> 3,880
<INCOME-CONTINUING> 7,446
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,446
<EPS-PRIMARY> .82
<EPS-DILUTED> .82
</TABLE>
