SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): SEPTEMBER 25, 1998
AMERICAN MEDICAL SECURITY GROUP, INC.
(Exact name of Registrant as specified in its charter)
WISCONSIN 1-13154 39-1431799
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
3100 AMS BOULEVARD, GREEN BAY, WISCONSIN 54313
(Address of principal executive offices) (Zip Code)
(920) 661-1111
(Registrant's telephone number, including area code)
United Wisconsin Services, Inc.
401 West Michigan Street, Milwaukee, Wisconsin 53203-2896
(Former name and former address)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
THE DISTRIBUTION
On September 25, 1998 (the "Distribution Date"), the Registrant effected
the distribution (the "Distribution") of shares of common stock, no par value
per share (the "Distributed Shares" or the "Newco Common Stock"), of its wholly
owned subsidiary Newco/UWS, Inc. ("Newco"), a Wisconsin corporation, to the
Registrant's shareholders. Each shareholder was entitled to receive one share of
Newco Common Stock for each share of common stock of the Registrant ("Registrant
Common Stock") owned at the close of business on September 11, 1998 (the "Record
Date"). The Distribution resulted in all of the issued and outstanding shares of
Newco Common Stock being distributed to holders of shares of Registrant Common
Stock on a pro rata basis. On or about the Distribution Date, the Company began
to mail certificates evidencing shares of Newco Common Stock to holders of
shares of Registrant Common Stock. No consideration is required of holders of
shares of Registrant Common Stock in return for the Distributed Shares. The
Registrant has received a ruling from the Internal Revenue Service to the effect
that the Distribution will qualify as a tax-free distribution to the Registrant,
Newco and the Registrant's shareholders for federal income tax purposes.
In connection with the Distribution, the Registrant's name was changed from
United Wisconsin Services, Inc. to American Medical Security Group, Inc. ("AMSG"
or the "Company"), and Newco was renamed United Wisconsin Services, Inc.
("UWS"). Newco is a newly formed corporation which, as a result of the
transactions entered into in connection with the Distribution, now owns the
businesses and assets of, and is responsible for the liabilities associated
with, the health maintenance organization (HMO) managed care and specialty
products businesses and management business formerly conducted by the
Registrant. AMSG continues to own the businesses and assets of, and is
responsible for the liabilities associated with, the Registrant's small group
business described in the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997.
Following the Distribution, AMSG does not own any shares of Newco Common
Stock, and Newco does not own any shares of AMSG Common Stock. Immediately after
the Distribution, Blue Cross & Blue Shield United of Wisconsin ("Blue Cross")
owned 38.1% of the outstanding shares of AMSG Common Stock and 38.1% of the
outstanding shares of Newco Common Stock. The shares of Newco (now named UWS)
Common Stock are listed on the New York Stock Exchange ("NYSE") under the symbol
"UWZ." The shares of Registrant (now named AMSG) Common Stock continue to be
listed on the NYSE, but are now listed under the symbol "AMZ."
BUSINESS OF THE COMPANY
AMSG, based in Green Bay, Wisconsin, intends to concentrate its efforts on
continuing to develop, market and administer small group medical and specialty
insurance products and administrative services for small groups. The Company
offers a wide variety of health care insurance products including medical,
dental, prescription drug, life insurance and disability. The Company's products
are sold through approximately 38,000 independent licensed agents in 33 states
and the District of Columbia. More than 145 Company sales managers located at 70
offices throughout the U.S. support the agents. As of June 30, 1998, the Company
served approximately 578,000 medical members.
The Company specializes in providing health-care benefits and other
insurance products designed to maximize choice and control costs in a
compassionate environment. The Company principally markets health benefit
products that provide discounts to insureds that utilize preferred provider
organizations (PPOs). PPO plans differ from HMO plans in that they typically
provide a wider choice of health professionals, fewer benefit restrictions and
increased access to specialists at a somewhat higher price. AMSG owns two
preferred provider networks through which approximately 22% of its business was
conducted as of June 30, 1998. It also contracts with more than 65 other
networks to ensure cost-effective health care choices for its customers.
The Company's health benefit products are targeted to groups of two to 99
employees. The Company can customize employee benefit packages for businesses
and individuals by providing benefit options which allow businesses to offer
employees multiple medical plans in a single package. In addition, the Company
offers a wide range of voluntary benefits providing protection beyond medical
coverage. These voluntary benefits include group life, dental and short-term
disability. Optional services available include a workplace wellness incentive
program, administrative services for groups subject to COBRA regulation, and
Section 125 plans that allows employees to set aside funds on a pretax basis for
unreimbursed medical and dependent care expenses. Self-funded plans that provide
employers with the opportunity to customize benefits for their employees, are
offered to groups of 25 to 99 employees. The Company also provides coverage for
individuals and families that can be customized to fit various lifestyles and
budgets.
BUSINESS STRATEGY
The Company believes that the heart of the national health care debate is
consumer demand for broader choices and increased access to health care
providers. As a specialist in providing and underwriting PPO products, the
Company believes that it can capitalize on the growing demand for these
products. According to recent reports of the U.S. Department of Census, the
small business market in which the Company markets its products is the fastest
growing segment of the U.S. economy. While the small business market is a
rapidly growing market, the Company also believes that the primary factors
affecting the Company's profitability are the management of medical expenses and
the control of its expense ratio through scale and operational efficiency. To
achieve its goal of becoming a multi-billion dollar company and the nation's
foremost small group, managed care company, AMSG has developed the following
business strategies:
- DEVELOP INTERNAL GROWTH. Through its independent agents, the
Company will continue to offer a wide range of competitively
priced products emphasizing choice and flexible benefits, with
excellent customer service support 24 hours per day, 365 days per
year.
- CONTAIN MEDICAL LOSS RATIO. The Company plans to contain its
medical loss ratio through pricing and product design reflective
of ultimate claims costs. Actions taken to support this strategy
include exiting certain unprofitable markets in states where
regulations preclude meeting this standard, terminating
unprofitable business, and implementing appropriate rate
increases.
- LEVERAGE EXPENSE RATIO. The Company intends to leverage its
expense ratio by increasing its business in force at its existing
facility in Green Bay, Wisconsin and by increasing productivity
through process re-engineering and automation efforts.
- GROW THROUGH ACQUISITIONS. Growth through acquisitions will
continue as a core strategy. The Company plans to continue to
leverage its expense ratio advantage and its expertise in the
small group segment to acquire books of business during a period
of industry consolidation. In 1997, the Company acquired the small
group business of Pan-American Life Insurance Company. It acquired
the balance of Pan-American's domestic health benefit business in
July 1998.
MANAGEMENT
AMSG will be managed by substantially the same senior management that
managed American Medical Security Holdings, Inc. ("AMS"), a wholly owned
subsidiary of the Registrant, prior to the Distribution. After the Distribution
Date, the Company's Board of Directors consists of three continuing directors,
two of whom were also directors of AMS and six new directors, five of whom were
also directors of AMS.
Subsequent to the Distribution, the executive officers of the Company
are as follows:
SAMUEL V. MILLER, CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER. Mr. Miller joined the Company in 1995 as an Executive Vice President.
He became a Director, President and CEO of AMS in 1996 and was elected Chairman
of AMS earlier this year. From 1994 to 1996, Mr. Miller was a member of the
executive staff planning group with the Travelers Group, serving as Chairman and
Group Chief Executive of National Benefit Insurance Company and Primerica
Financial Services Ltd. of Canada. Prior to 1994, Mr. Miller spent 10 years as
President and CEO of American Express Life Assurance Company. From 1976 to 1984
Mr. Miller served as Senior Vice President of Sales and Marketing at Employers
Health Insurance Company, now the small group business of Humana, Inc. He was
one of the builders of Employers Health Insurance Company where he later took on
additional responsibility as chief operating officer and led Employers Health
Insurance Company's sale to American Express.
EDWARD R. SKOLDBERG, EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER.
Mr. Skoldberg joined AMS in 1996 in his present capacity. He has 25 years of
financial, technical and operational experience, the last 10 years in the health
insurance industry. Prior to joining AMS, Mr. Skoldberg held management
positions with Time Insurance, Empire Blue Cross Blue Shield, City Federal
Savings & Loan, and Howard Savings Bank.
GARY D. GUENGERICH, EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
TREASURER. Mr. Guengerich joined AMS in 1997 in his present capacity. He has
more than 23 years of financial management experience in the insurance industry.
Before joining AMS, Mr. Guengerich held senior management positions with First
Colony Life Insurance Company, American Life Insurance Company and Colonial Penn
Group.
TIMOTHY J. MOORE, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE
SECRETARY. Mr. Moore joined AMS in 1997 in his present capacity. He has 25 years
of insurance experience and is admitted to practice law in Wisconsin and
Illinois. Prior to joining AMS, he was a partner in the Chicago law firm of
Katten, Muchin & Zavis. He has also held positions with Insurance Company of
Illinois, Underwriters Adjusting Company and Southwestern Adjusting Company.
CLIFFORD A. BOWERS, VICE PRESIDENT, CORPORATE COMMUNICATIONS. Before
joining AMS in 1997 in his present capacity, Mr. Bowers held senior
communications positions with Fort Howard, Tenneco, Manville and Brunswick
Corporations.
SCOTT B. WESTPHAL, VICE PRESIDENT AND CHIEF ACTUARY. Mr. Westphal has held
various management positions with AMS since its inception in 1988, and has 15
years of experience as an actuary. Before joining AMS, he worked for Employers
Health Insurance Company.
JOHN R. WIRCH, VICE PRESIDENT HUMAN RESOURCES AND CORPORATE SERVICES. Mr.
Wirch joined AMS in 1996 in his present capacity. Prior to joining AMS, he spent
18 years in various human resources management positions with Little Rapids
Corporation, Presto Products and Universal Foundry.
Subsequent to the Distribution, the Directors of the Company are as
follows:
CLASS I - TERM EXPIRING AT ANNUAL MEETING OF SHAREHOLDERS IN 1999
ROGER H. BALLOU. Mr. Ballou has been the Chairman and CEO of Global
Vacation Group since March 1998. Immediately prior to that time, Mr. Ballou
served as a senior advisor to Thayer Capital Partners. Between May 1995 and
September 1997, Mr. Ballou served as Vice Chairman and Chief Marketing Officer
and then as President and Chief Operating Officer of Alamo Rent-a-Car. For more
than 16 years prior to joining Alamo, Mr. Ballou held several executive
positions with American Express Travel, serving most recently as President -
Travel Services Group.
W. FRANCIS BRENNAN. Mr. Brennan is a retired Executive Vice President of
UNUM Corporation, an insurance holding company, where he served on the boards of
UNUM's insurance affiliates in the United States, Canada, the United Kingdom and
Japan. Before joining UNUM in 1984, he spent 21 years in a variety of senior
management positions with CIGNA Corporation and Connecticut General Life
Insurance Company. He is a Director of Margent Group, Inc., a reinsurance
holding company with operations in the United States, the United Kingdom and
Bermuda.
J. GUS SWOBODA. Mr. Swoboda is a retired Senior Vice President of Human and
Corporate Development of Wisconsin Public Service Corporation where he also held
various other senior management positions in his long career with Wisconsin
Public Service. He is a Director of First Northern Capital Corp., a publicly
traded financial institution operating in Northeast Wisconsin.
CLASS II - TERM EXPIRING AT ANNUAL MEETING OF SHAREHOLDERS IN 2000
JAMES C. HICKMAN. Mr. Hickman has been a Director of the Company since
1991. He is also currently a Director of Blue Cross and Century Investment
Management Company. In addition, Mr. Hickman has been an Emeritus Professor and
Emeritus Dean of the School of Business at the University of Wisconsin-Madison
("UW School of Business") since July 1993. He was a Professor in the UW School
of Business from 1990 to 1993, and was Dean of the UW School of Business from
1985 to 1990.
WILLIAM R. JOHNSON. Mr. Johnson has been a Director of the Company since
1993. In addition, he has been Chairman of Johansen Capital Investment and
Financial Consulting since 1986, and President of Johansen Capital Associates,
Inc., a financial and investment consultant to corporations and individuals
since 1984. He was also Chairman, President and Chief Executive Officer of
National Investment Services of America, Inc., an investment manager of pension,
profit sharing, and other funds, from 1968 to 1984.
FRANK SKILLERN. Mr. Skillern has been Chief Executive Officer of American
Express Centurion Bank, a consumer bank located in Salt Lake City, Utah, since
1995. From 1993 to 1995 he was President, Consumer Card Group, USA, American
Express Travel Related Services Company ("TRS"), having served as an Executive
Vice President of TRS for the prior two years. Mr. Skillern was general counsel
of American Express Financial Advisors (then IDS Financial Services) from 1983
to 1991. Prior to that time, he practiced law with several prominent laws firms
and spent time as general counsel of the Federal Depository Insurance
Corporation.
CLASS III - TERM EXPIRING AT ANNUAL MEETING OF SHAREHOLDERS IN 2001
EUGENE A. MENDEN. Mr. Menden has been a Director of the Company since 1991.
He was a Director of Blue Cross from January 1987 until 1992. Prior to
retirement, he was a Director of International Finance for Marquette Medical
Systems, Inc. (formerly Marquette Electronics, Inc.), a manufacturer of medical
electronic products. He also served as Vice President of Finance for Marquette
Electronics, Inc. from 1970 to 1991, as Treasurer from 1970 to 1989, and as a
director from 1972 until June 1996.
SAMUEL V. MILLER. See officer description above.
MICHAEL T. RIORDAN. Mr. Riordan was President and Chief Operating Officer
of Fort James Corporation, Deerfield, Illinois from 1997 to 1998. Prior to that
time, he was Chairman, President and CEO of Fort Howard Corporation which merged
with James River Corporation in 1997 to become Fort James Corporation. Mr.
Riordan held various senior management positions with Fort Howard since 1983. He
is also a director of the Dial Corporation.
After the Distribution, the Company and Newco will have three common
directors, Messrs. Menden, Hickman and Johnson. Messrs. Menden, Hickman and
Johnson, as well as certain other officers and directors of the Company and
Newco, also will own shares in both companies following the Distribution.
DIVIDEND POLICY
The Company does not expect to pay any cash dividends in the foreseeable
future following the Distribution. The Company intends to employ its earnings in
the continued development of its business. The future dividend policy will
depend on the Company's earnings, capital requirements, financial condition and
other factors considered relevant by the Board of Directors.
ADDITIONAL INFORMATION
Further information concerning the Distribution and related matters is
contained in the Registration Statement on Form 10, as amended (the
"Registration Statement"), filed with the Securities and Exchange Commission and
the NYSE by Newco to register the Newco Common Stock pursuant to Section 12(b)
of the Securities Exchange Act of 1934, as amended, and in the Information
Statement of Newco, dated September 11, 1998, filed with and incorporated by
reference in the Registration Statement. The Distribution and Indemnity
Agreement entered into by Newco and the Registrant in connection with the
Distribution, a Tax Allocation Agreement, Employee Benefits Agreement and
various other agreements with respect to employee benefits, management and
corporate and administrative services, reinsurance arrangements and intellectual
property transfers, for the purpose of giving effect to the Distribution and
related matters, are described in and/or filed as exhibits to the Registration
Statement.
FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements with respect to the
financial condition, results of operations and business of the Company. The
terms "anticipate", "believe", "estimate", "expert", "objective", "plan",
"project" and similar expressions are intended to identify forward-looking
statements. Such forward-looking statements are subject to inherent risks and
uncertainties that may cause actual results or events to differ materially from
those contemplated by such forward-looking statements. In addition to the
assumptions and other factors referred to specifically in connection with such
statements, factors that may cause actual results or events to differ materially
from those contemplated by such forward-looking statements include, among
others, rising health care costs, business conditions and competition in the
managed care industry, developments in health care reform and other regulatory
issues, and other factors that may be referred to in the Company's reports filed
with the Securities and Exchange Commission from time to time.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) PRO FORMA FINANCIAL INFORMATION:
The following unaudited pro forma consolidated financial statements of
AMSG and subsidiaries, reflecting the Distribution, are filed herewith:
Pro Forma Consolidated Balance Sheet as of June 30, 1998
Pro Forma Consolidated Statements of Income for the Six Months Ended
June 30, 1998 and the Year Ended December 31, 1997
Notes to the Pro Forma Consolidated Financial Information
(c) EXHIBITS:
See the Exhibit Index following the Signature page of this report,
which is incorporated herein by reference.
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AMERICAN MEDICAL SECURITY GROUP, INC.
PRO FORMA
CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
The following unaudited pro forma consolidated financial information is
based on the historical consolidated financial statements of American Medical
Security Group, Inc., formerly United Wisconsin Services, Inc. (the "Company")
and gives effect to the distribution of Newco/UWS, Inc. to the shareholders of
the Company.
The unaudited Pro Forma Consolidated Balance Sheet as of June 30, 1998
presents the financial position of the Company assuming the distribution of
Newco/UWS, Inc. had been completed as of that date. The unaudited Pro Forma
Consolidated Statements of Income for the six month period ended June 30, 1998
and the year ended December 31, 1997 present the results of operations of the
Company assuming that the distribution had been completed on January 1 of the
respective period. In the opinion of management, the unaudited pro forma
financial information includes all material adjustments necessary to restate the
Company's historical results. The adjustments required to reflect such
assumptions are described in Note 2 of the Notes to the Pro Forma Consolidated
Financial Information.
The unaudited pro forma consolidated financial information should be read
in conjunction with the historical consolidated financial statements and notes
thereto in the Company's 1997 Annual Report. The pro forma information presented
is for information purposes only and may not necessarily reflect future results
of operations or financial position or what the results of operations or
financial position would have been had the distribution actually taken place at
the beginning of the period or as of the dates specified.
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AMERICAN MEDICAL SECURITY GROUP, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION>
June 30, 1998
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Pro Forma
Historical Adjustments Pro Forma
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(000'S OMITTED)
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ASSETS
Investments:
Securities available for sale, at fair value:
Fixed maturities................................................. $275,949 $- $275,949
Equity securities - common....................................... 15,728 - 15,728
Equity securities - preferred.................................... 2,515 - 2,515
Fixed maturity securities held to maturity, at amortized cost....... 3,928 - 3,928
------------ ------------ ------------
Total investments.............................................. 298,120 - 298,120
Cash and cash equivalents................................................ 7,078 - 7,078
Other assets:
Property and equipment, net......................................... 36,839 - 36,839
Goodwill and other intangibles, net................................. 134,557 - 134,557
Other assets........................................................ 25,412 - 25,412
------------ ------------ ------------
Total other assets............................................. 196,808 - 196,808
Net assets of discontinued operations.................................... 126,194 (126,194) -
------------ ------------ ------------
TOTAL ASSETS............................................................. $628,200 $(126,194) $502,006
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Medical and other benefits payable.................................. $102,422 $- $102,422
Advance premiums.................................................... 20,038 - 20,038
Payables and accrued expenses....................................... 20,401 - 20,401
Notes payable....................................................... 126,013 (70,000) 56,013
Other liabilities................................................... 30,157 - 30,157
------------ ------------ ------------
Total liabilities.............................................. 299,031 (70,000) 229,031
Shareholders' equity:
Common stock........................................................ 16,570 - 16,570
Paid-in capital..................................................... 188,428 - 188,428
Retained earnings................................................... 121,021 (54,947) 66,074
Unrealized gain on investments...................................... 3,150 (1,247) 1,903
------------ ------------ ------------
Total shareholders' equity..................................... 329,169 (56,194) 272,975
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............................... $628,200 $(126,194) $502,006
============ ============ ============
See Notes to the Pro Forma Consolidated Financial Information
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AMERICAN MEDICAL SECURITY GROUP, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Six months ended Twelve months ended
June 30, 1998 December 31, 1997
--------------------------------------- ---------------------------------------
Pro Forma Pro Forma
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
--------------------------------------- ---------------------------------------
(000'S OMITTED, EXCEPT PER SHARE DATA)
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Revenues:
Insurance premiums........................ $461,915 $- $461,915 $1,518,886 $(561,682) $957,204
Net investment results.................... 11,804 - 11,804 46,308 (22,237) 24,071
Other revenue............................. 9,475 - 9,475 50,088 (25,839) 24,249
----------- ----------- ----------- ----------- ----------- -----------
Total Revenues......................... 483,194 - 483,194 1,615,282 (609,758) 1,005,524
Expenses:
Medical and other benefits................ 353,610 - 353,610 1,220,052 (486,561) 733,491
Selling, general and administrative....... 116,735 - 116,735 344,650 (92,490) 252,160
Profit sharing on joint ventures.......... - - - 3,381 (3,381) -
Interest expense.......................... 4,707 (2,433) 2,274 9,311 (4,892) 4,419
Amortization of goodwill and intangibles.. 4,435 4,435 8,793 (818) 7,975
----------- ----------- ----------- ----------- ----------- -----------
Total Expenses......................... 479,487 (2,433) 477,054 1,586,187 (588,142) 998,045
----------- ----------- ----------- ----------- ----------- -----------
Income From Continuing Operations
Before Income Taxes....................... 3,707 2,433 6,140 29,095 (21,616) 7,479
Income Tax Expense............................. 1,764 852 2,616 10,945 (8,201) 2,744
----------- ----------- ----------- ----------- ----------- -----------
Net Income From Continuing Operations.......... $1,943 $1,581 $3,524 $18,150 $(13,415) $4,735
=========== =========== =========== =========== =========== ===========
Net Income From Continuing Operations
Per Common Share:
Basic..................................... $0.12 $0.21 $1.11 $0.29
Diluted................................... $0.12 $0.21 $1.10 $0.29
See Notes to the Pro Forma Consolidated Financial Information
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AMERICAN MEDICAL SECURITY GROUP, INC
NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
NOTE 1.
The accompanying unaudited Pro Forma Consolidated Financial Information
reflects all adjustments which, in the opinion of management, are necessary for
fair presentation of the company's financial position and results of operations.
This information does not include certain disclosures required under generally
accepted accounting principles and, therefore, should be read in conjunction
with the Company's historical financial statements and notes thereto.
NOTE 2.
The pro forma adjustments to the accompanying financial information as of
and for the six months ended June 30, 1998 are as follows:
To record the distribution of $70 million in long term debt to
Newco/UWS, Inc., the debt and related interest expense has been
eliminated. The income tax impact for this adjustment is estimated at
a rate of 35%.
To reflect the distribution of net assets of Newco/UWS, Inc. to
the Company's shareholders, "Net assets of discontinued operations"
has been eliminated. This amount, less the long term debt assumed by
Newco/UWS, Inc. (as described above), has been reflected as a
reduction of retained earnings and unrealized gains on investments.
The pro forma adjustments to the accompanying financial information for the
year ended December 31, 1997 are described as follows:
Adjustments to remove results of operations of Newco/UWS, Inc.
from the Company's historical statement of income.
Interest expense on long term debt distributed to Newco/UWS, Inc.
(as described above) and the related income tax impact at 35% has been
eliminated.
NOTE 3.
Basic and diluted per share information is based upon historical weighted
average common shares outstanding for the six months ended June 30, 1998 and the
year ended December 31, 1997, respectively. Diluted per share information
differs from basic per share data due to potentially dilutive common stock
options held by officers and employees of both Newco/UWS, Inc. and the Company
and other parties. The number of shares under option and their exercise prices
of each companies' common stock subsequent to the distribution date is based
upon the market value of each company's shares immediately following the
distribution as described in the Newco/UWS, Inc. Registration Statement on Form
10, as amended. The number of common shares and potentially dilutive shares used
to compute earnings per share after the distribution is not known at this time
and may vary from the historical reported earnings per share.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN MEDICAL SECURITY GROUP, INC.
Dated: September 30, 1998 /s/ Timothy J. Moore
------------------ --------------------
Timothy J. Moore
Senior Vice President
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AMERICAN MEDICAL SECURITY GROUP, INC.
(F/K/A UNITED WISCONSIN SERVICES, INC.)
(COMMISSION FILE NO. 1-13154)
<CAPTION>
EXHIBIT INDEX
TO
FORM 8-K CURRENT REPORT
Date of Report: September 25, 1998
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INCORPORATED HEREIN FILED
EXHIBIT NO. DESCRIPTION BY REFERENCE TO HEREWITH
2.1 Distribution and Indemnity Agreement Exhibit 2.1 to Newco/UWS, Inc.'s
between United Wisconsin Services, Registration Statement on Form 10,
Inc. and Newco/UWS, Inc., dated as as amended (the "Registration
of September 11, 1998 Statement") (File No. 1-14177)
2.2 Employee Benefits Agreement, dated Exhibit 10.1 to the Registration
as of September 11, 1998, by and Statement
between United Wisconsin Services,
Inc. and Newco/UWS, Inc.
2.3 Tax Allocation Agreement, entered Exhibit 10.2 to the Registration
into as of September 11, 1998, by Statement
and between United Wisconsin
Services, Inc. and Newco/UWS, Inc.
3.1 Restated and Amended Articles of X
Incorporation of American Medical
Security Group, Inc. (f/k/a United
Wisconsin Services, Inc.), as
amended through September 28, 1998
3.2 Bylaws of American Medical Security X
Group, Inc. (f/k/a United Wisconsin
Services, Inc.), as amended and
restated through September 25, 1998
99.1 Information Statement of Newco/UWS, Exhibit 99 to the Registration
Inc., dated September 11, 1998 Statement.
99.2 Press Release dated September 29, X
1998
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EXHIBIT 3.1
COMPOSITE COPY
RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF
AMERICAN MEDICAL SECURITY GROUP, INC.
(AS AMENDED THROUGH SEPTEMBER 28, 1998)
These Articles of Incorporation are executed by the undersigned for the
purpose of amending and superseding the corporate charter of a Wisconsin
corporation authorized pursuant to Chapter 180 of the Wisconsin Statutes.
ARTICLE I - NAME AND PRINCIPAL OFFICE
The name of the corporation shall be AMERICAN MEDICAL SECURITY GROUP, INC.
ARTICLE II - PURPOSES
The purposes of this Corporation are to engage in any lawful activity
within the purposes for which corporations may be organized under the Wisconsin
Business Corporation Law, Chapter 180 of the Wisconsin Statutes.
ARTICLE III - CAPITAL STOCK
a. The aggregate number of authorized shares of Common Stock of the
Corporation shall be Fifty Million (50,000,000) shares, designed as "Common
Stock", and having no par value per share.
b. The aggregate number of authorized shares of Preferred Stock of the
Corporation shall be Five Hundred Thousand (500,000) shares, designed as
"Preferred Stock", and having no par value per share. Authority is hereby vested
in the Board of Directors from time to time to issue the Preferred Stock as
Preferred Stock in one or more series of any number of shares and, in connection
with the creation of each such series, to fix, by resolution providing for the
issue of shares thereof, the voting rights, if any; the designations,
preferences, limitations and relative rights of such series in respect to the
rate of dividend, the price, the terms and conditions of redemption; the amounts
payable upon such series in the event of voluntary or involuntary liquidation;
sinking fund provisions for the redemption or purchase of such series of shares;
and, if the shares of any series are issued with the privilege of conversion,
the terms and conditions on which such series of shares may be converted. In
addition to the foregoing, to the full extent now or hereafter permitted by
Wisconsin law, in connection with each issue thereof, the Board of Directors may
at its discretion assign to any series of the Preferred Stock such other terms,
conditions, restrictions, limitations, rights and privileges as it may deem
appropriate. The aggregate number of preferred shares issued and not canceled of
any and all preferred series shall not exceed the total number of shares of
Preferred Stock hereinabove authorized. Each series of Preferred Stock shall be
distinctively designated by letter or descriptive words or both.
Pursuant to the authority expressly granted and vested in the Board of
Directors of the Corporation and in accordance with the provisions of the
Restated and Amended Articles of Incorporation, as amended as of July 31, 1991,
the Board of Directors hereby designates 25,000 shares of the Corporation's
authorized and unissued Preferred Stock, no par value per share, as Series A
Adjustable Rate Nonconvertible Preferred Stock, $1,000 stated value per share,
which shall have the following powers, designations, preferences and relative
participating, optional or other special rights and qualifications, limitations
or restrictions:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as the "Series A Adjustable Rate Nonconvertible Preferred Stock" and
the number of shares constituting such series shall be Twenty Five Thousand
(25,000), which number, subject to the Restated and Amended Articles of
Incorporation, may be increased or decreased by the Board of Directors without a
vote of the shareholders; PROVIDED, HOWEVER, such number may not be decreased
below the number of the then currently outstanding shares of Series A Adjustable
Rate Nonconvertible Preferred Stock plus the number of shares that may be
reserved for issuance upon the exercise of any options, warrants, or rights or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Adjustable Rate Nonconvertible Preferred Stock. Upon
the issuance of any shares of Series A Adjustable Rate Nonconvertible Preferred
Stock, an amount equal to the aggregate stated value of the shares so issued
will be assigned to the capital of the Corporation representing such shares.
SECTION 2. FRACTIONAL SHARES. The Corporation may issue fractions and
certificates representing fractions of a share of Series A Adjustable Rate
Nonconvertible Preferred Stock in integral multiples of one one-thousandth
(1/1000) of a share of Series A Adjustable Rate Nonconvertible Preferred Stock.
In the event that fractional shares of Series A Adjustable Rate Nonconvertible
Preferred Stock are issued, the holders thereof shall have all the rights
provided herein for holders of full shares of Series A Adjustable Rate
Nonconvertible Preferred Stock in the proportion which such fraction bears to a
full share.
SECTION 3. VOTING RIGHTS. Except as required by law, holders of shares of
Series A Adjustable Rate Nonconvertible Preferred Stock shall have no right to
vote.
SECTION 4. CONVERSION OR EXCHANGE. The holders of shares of Series A
Adjustable Rate Nonconvertible Preferred Stock shall not have any right to
convert such shares into or exchange such shares for shares of any other class
or classes or any other series of any class or classes of capital stock of the
Corporation.
SECTION 5. DIVIDENDS.
A. When and as declared by the Board of Directors, the Corporation
shall pay, out of any funds legally available for the payment of dividends,
cumulative cash dividends to the holders of the shares of Series A
Adjustable Rate Nonconvertible Preferred Stock from the date of issuance as
provided in this paragraph. The dividend rate on the shares of Series A
Adjustable Rate Nonconvertible Preferred Stock shall be fixed on a yearly
basis ("Yearly Dividend Period") and shall be payable quarterly, out of any
funds legally available for the payment of dividends, in cash on March 31,
June 30, September 30 and December 31 in each year ("Quarterly Dividend
Period"). The dividend rate for each Yearly Dividend Period, payable each
Quarterly Dividend Period in that year, shall be at a rate per annum equal
to the Applicable Rate (as defined in Section 5(B)). Such dividends shall
be cumulative from the date of original issuance of such shares of Series A
Adjustable Rate Nonconvertible Preferred Stock and shall be payable out of
funds legally available therefor, when and as declared by the Board of
Directors in March, June, September and December of each year. Such
dividends will accrue whether or not they have been declared and whether or
not there are funds of the Corporation legally available for the payment of
dividends. Each of such dividends shall be paid to the holders of record of
shares of Series A Adjustable Rate Nonconvertible Preferred Stock as they
appear on the stock register of the Corporation on such record date as
shall be fixed by the Board of Directors or a committee of the Board of
Directors duly authorized to fix such date. Dividends on account of arrears
(accrued but not declared) for any past Quarterly Dividend Period may be
declared and paid at any time, without reference to any regular dividend
payment date, to holders of record on such date as may be fixed by the
Board of Directors or a committee of the Board of Directors duly authorized
to fix such date. If at any time the Corporation pays less than the total
amount of dividends then accrued with respect to the shares of Series A
Adjustable Rate Nonconvertible Preferred Stock, such payment shall be
distributed ratably among the holders of Series A Adjustable Rate
Nonconvertible Preferred Stock based upon the aggregate accrued but unpaid
dividends on the shares held by each such holder.
B. The "Applicable Rate" for any Yearly Dividend Period shall be the
Treasury Bill Rate plus 150 basis points. The "Treasury Bill Rate" for each
Yearly Dividend Period shall be the weekly per annum market discount rate
for one-year U.S. Treasury bills, as published weekly by the Federal
Reserve Board, during the last full week in the month of September in the
year prior to the Yearly Dividend Period for which the Applicable Rate is
being determined. In the event the Federal Reserve Board does not publish
such a weekly per annum market discount rate for one-year U.S. Treasury
bills during the last full week in the month of September in the year prior
to the Yearly Dividend Period for which the Applicable Rate is being
determined, then the Applicable Rate shall mean the weekly per annum market
discount rate for one-year U.S. Treasury bills as published weekly by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation, during the last full week in the month of
September in the year prior to the Yearly Dividend Period for which the
Applicable Rate is being determined. In the event the Corporation
determines in good faith that for any reason no such U.S. Treasury bill
rates are published as provided above during the last full week in the
month of September in the year prior to the Yearly Dividend Period for
which the Applicable Rate is being determined, then the Applicable Rate
shall be the average weekly per annum market discount rate for one-year
U.S. Treasury bills, as quoted to the Corporation by a recognized U.S.
Government securities dealer selected by the Corporation. Anything herein
to the contrary notwithstanding, the Applicable Rate for any Yearly
Dividend Period shall in no event be less than 7.00% or greater than 10.00%
per annum.
C. The Applicable Rate shall be rounded to the nearest one thousandth
(1/1000) of a percentage point.
D. Dividends payable on the Series A Adjustable Rate Nonconvertible
Preferred Stock for each full Quarterly Dividend Period shall be computed
by annualizing the Applicable Rate and dividing by four and multiplying the
quotient so obtained by the stated value per share of the Series A
Adjustable Rate Nonconvertible Preferred Stock. Dividends payable on the
Series A Adjustable Rate Nonconvertible Preferred Stock for any period less
than a full Quarterly Dividend Period shall be computed on the basis of a
360-day year of 30-day months and the actual number of days elapsed in the
period for which dividends are payable.
E. Holders of shares of Series A Adjustable Rate Nonconvertible
Preferred Stock shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of full cumulative dividends on the
Series A Adjustable Rate Nonconvertible Preferred Stock as provided in this
Section 5. Accrued but unpaid dividends shall not bear interest, and no
interest, or sum of money in lieu of interest, shall be payable in respect
of any dividend payment or payments on the Series A Adjustable Rate
Nonconvertible Preferred Stock which may be in arrears.
F. Anything herein to the contrary notwithstanding, dividends may be
declared and paid upon any of the equity securities of the Corporation even
if all accrued dividends on the Series A Adjustable Rate Nonconvertible
Preferred Stock have not yet been declared and/or paid in full.
SECTION 6. LIQUIDATION. Upon any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of the Series A
Adjustable Rate Nonconvertible Preferred Stock will be entitled to be paid,
whether from capital or surplus, before any distribution or payment is made upon
the then outstanding shares of Common Stock or any other class of stock of the
Corporation ranking junior to the Series A Adjustable Rate Nonconvertible
Preferred Stock upon liquidation, an amount in cash equal to the stated value
of, together with all accrued but unpaid dividends on, the Series A Adjustable
Rate Nonconvertible Preferred Stock (the "Liquidation Price"). To the extent any
accrued dividends have not been paid by the Corporation as of the date the
Corporation pays to the holders of the shares of Series A Adjustable Rate
Nonconvertible Preferred Stock the Liquidation Price hereunder, and to the
extent the Corporation has at that time funds legally available for the payment
of dividends, the Board of Directors shall, prior to the payment of the
Liquidation Price, declare and cause such dividends to be paid. If upon any such
liquidation, dissolution, or winding up of the Corporation, the Corporation's
assets to be distributed among the holders of the shares of Series A Adjustable
Rate Nonconvertible Preferred Stock are insufficient to permit payment to such
holders of the aggregate amount which they are entitled to be paid, then the
entire assets to be distributed will be distributed ratably among such holders
based upon the aggregate Liquidation Price of the shares of Series A Adjustable
Rate Nonconvertible Preferred Stock held by each such holder. Upon receipt of
the aggregate Liquidation Price for each share of Series A Adjustable Rate
Nonconvertible Preferred Stock, holders of shares of Series A Adjustable Rate
Nonconvertible Preferred Stock shall have no further rights to participate in
any liquidation, dissolution or winding up of the Corporation.
SECTION 7. RANKING OF CLASSES OF STOCK. The Series A Adjustable Rate
Nonconvertible Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets in liquidation, unless the terms of any such series shall
provide otherwise. Nothing contained herein shall be deemed to restrict the
ability of the Corporation to create and issue additional classes or series of
its Preferred Stock or other capital stock ranking senior or junior to, or on a
parity with, the Series A Adjustable Rate Nonconvertible Preferred Stock as to
the payment of dividends or the distribution of assets upon liquidation, or
both. Specifically, any stock of any class or classes of the Corporation shall
be deemed to rank:
i. prior to the shares of Series A Adjustable Rate Nonconvertible
Preferred Stock, either as to dividends or upon liquidation, if the
holders of such class or classes shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution, liquidation or
winding up of the Corporation, as the case may be, in preference of or
in priority to the holders of shares of Series A Adjustable Rate
Nonconvertible Preferred Stock;
ii. on a parity with shares of Series A Adjustable Rate
Nonconvertible Preferred Stock, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend payment rates
or redemption or liquidation prices per share or sinking fund
provisions, if any, are different from those of the Series A
Adjustable Rate Nonconvertible Preferred Stock, if the holders of such
stock shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in proportion to their respective
dividend rates or liquidation prices, without preference or priority,
one over the other, as between the holders of such stock and the
holders of shares of Series A Adjustable Rate Nonconvertible Preferred
Stock; and
iii. junior to shares of Series A Adjustable Rate Nonconvertible
Preferred Stock, either as to dividends or upon liquidation, if such
class shall be Common Stock or if the holders of shares of Series A
Adjustable Rate Nonconvertible Preferred Stock shall be entitled to
receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in
preference of or priority to the holders of shares of such class or
classes.
SECTION 8. REDEMPTION OF SHARES.
A. The shares of Series A Adjustable Rate Nonconvertible Preferred
Stock shall be subject to the following redemption rights:
i. At any time or from time to time following issuance, the
Corporation, at its option, may redeem shares of Series A Adjustable
Rate Nonconvertible Preferred Stock in whole or in part. The
redemption price per share in such event shall be paid in cash and
shall be equal to the greater of the following: (aa) $1,000, plus in
each case an amount equal to accrued (whether or not declared) and
unpaid dividends to the redemption date (out of funds legally
available therefor); or (bb) the fair market value per share as of the
end of the quarter preceding the quarter during which the redemption
is to occur, as determined in good faith by the Board of Directors in
accordance with a written appraisal which is prepared by an
independent appraiser selected by the Board and which meets the
requirements of applicable law. Upon the date of notice to the holder
of shares of Series A Adjustable Rate Nonconvertible Preferred Stock
of the Corporation's election to redeem shares, notwithstanding that
any certificates for such shares have not been surrendered for
cancellation, the shares of Series A Adjustable Rate Nonconvertible
Preferred Stock represented thereby shall no longer be deemed
outstanding, the rights to receive dividends thereon shall cease to
accrue from and after the date of notice and all rights of the holder
of shares so redeemed shall cease and terminate, excepting only the
right to receive the redemption price therefor; and
ii. The Corporation shall redeem shares of Series A Adjustable
Rate Nonconvertible Preferred Stock which are beneficially owned by
any of its employees, or employees of any of the Corporation's
Affiliates, pursuant to the Corporation's or any of its Affiliates'
employees pre-tax savings plans (the "401(k) Plans"), immediately
prior to any distribution or withdrawal of shares of Series A
Adjustable Rate Nonconvertible Preferred Stock from any of the 401(k)
Plans for any reason. For purposes of this Section 8, an "Affiliate"
of the Corporation means a "person" that directly, or through one or
more intermediaries, controls, or is controlled by, or is under common
control with, the Corporation, and a "person" means an individual, a
corporation, a partnership, an associate, a joint-stock company, a
business trust or an unincorporated organization. The redemption price
per share in such event shall be paid in cash and shall be equal to
the greater of the following: (aa) $1,000, plus in each case an amount
equal to accrued (whether or not declared) and unpaid dividends to the
redemption date (out of funds legally available therefor); or (bb) the
fair market value per share as of the end of the quarter preceding the
quarter during which the redemption is to occur, as determined in good
faith by the Board of Directors in accordance with a written appraisal
which is prepared by an independent appraiser selected by the Board
and which meets the requirements of applicable law. Upon such
attempted withdrawal, notwithstanding that any certificates for such
shares have not been surrendered for cancellation, the shares of
Series A Adjustable Rate Nonconvertible Preferred Stock represented
thereby shall no longer be deemed outstanding, the rights to receive
dividends thereon shall cease to accrue from and after the date of
attempted withdrawal and all rights of the employee as a holder shall
cease and terminate, excepting only the right to receive the
redemption price therefor. In the event the Corporation is unable to
redeem all such shares of Series A Adjustable Rate Nonconvertible
Preferred Stock upon the occurrence of such an attempted withdrawal,
the obligation of the Corporation to so redeem pursuant to this
subparagraph (ii) shall continue and funds legally available therefor
shall be applied for such purpose until such obligation is discharged.
B. Anything herein to the contrary notwithstanding, in accordance with
Section 180.0640 of the Wisconsin Business Corporation Law, the Corporation
may not redeem shares of Series A Adjustable Rate Nonconvertible Preferred
Stock pursuant to Section 8(A) (i) or (ii) if, after giving effect to the
redemption, either of the following would occur:
i. The Corporation would not be able to pay its debts as they
become due in the usual course of business; or
ii. The Corporation's total assets would be less than the sum of
its total liabilities plus the amount that would be needed, if the
Corporation were to be dissolved at the time of the redemption, to
satisfy the preferential rights upon dissolution to shareholders whose
preferential rights are superior to those of the holders of the Series
A Adjustable Rate Nonconvertible Preferred Stock.
SECTION 9. REACQUIRED SHARES. Any shares of Series A Adjustable Rate
Nonconvertible Preferred Stock redeemed or otherwise acquired by the Corporation
in any manner whatsoever shall be retained and canceled promptly after the
redemption or acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock which may be created by resolutions of
the Board of Directors.
SECTION 10. NO SINKING FUND. The shares of Series A Adjustable Rate
Nonconvertible Preferred Stock are not subject or entitled to the operation of a
retirement or sinking fund.
ARTICLE IV - REGISTERED OFFICE AND REGISTERED AGENT
The registered office is 3100 AMS Boulevard, Green Bay, Wisconsin, 54313,
and the registered agent at such address is Timothy J. Moore.
ARTICLE V - BOARD OF DIRECTORS
a. The number of directors of the Corporation shall be as is provided in
the bylaws. The general powers, number, classification, and requirements for
nomination of directors shall be as set forth in Articles II and III of the
bylaws of the Corporation (and as such sections shall exist from time to time).
The Board of Directors of the Corporation shall be divided into three (3)
classes of not less than three (3) nor more than five (5) directors each. The
term of office of the first class of directors shall expire at the first annual
meeting after their initial election under the provisions of this Article V, the
term of office of the second class shall expire at the second annual meeting
after their initial election under the provisions of this Article V, and the
term of office of the third class shall expire at the third annual meeting after
their initial election under the provisions of this Article V. At each annual
meeting after the initial classification of the Board of Directors under this
Article V, 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.
b. A director may be removed from office only by affirmative vote of at
least 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 at least 80% of such shares.
c. Notwithstanding any other provision of these Restated Articles of
Incorporation (and notwithstanding the fact that a lesser affirmative vote may
be specified by law), the affirmative vote of shareholders possessing at least
75 % of the voting power of the then outstanding shares of all classes of stock
of the Corporation generally possessing voting rights in elections of directors,
considered for this purpose as one class, shall be required to amend, alter,
change or repeal, or adopt any provision inconsistent with, the provisions of
this Article V.
d. Notwithstanding the foregoing and provisions in the bylaws of the
Corporation, whenever the holders of any one or more series of Preferred Stock
issued by the Corporation pursuant to Article III hereof have the right, voting
separately as a class or by series, to elect directors at an annual or special
meeting of shareholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms of the
series of Preferred Stock applicable thereto, and such directors so elected
shall not be divided into classes unless expressly provided by the terms of the
applicable series.
ARTICLE VI - AMENDMENTS
These articles may be amended in the manner provided by law at the time of
adoption of the amendment.
EXHIBIT 3.2
BYLAWS OF
AMERICAN MEDICAL SECURITY GROUP, INC.
(AS AMENDED AND RESTATED SEPTEMBER 25, 1998)
ARTICLE I. OFFICES
SECTION 1. 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.
SECTION 2. 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 to 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 the
registered office.
ARTICLE II. SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The Annual Meeting of the Shareholders shall be
held at the principal office of the Corporation in the City of Green Bay, Brown
County, Wisconsin, unless the Board of Directors shall designate another
location either within or without the State of Wisconsin. The Annual Meeting
shall take place on the last Thursday of May each year or at such other time and
date as may be fixed by or under the authority of the Board of Directors. 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. At
such meeting the Shareholders shall elect directors and transact such other
business as shall lawfully come before them.
A. ELECTIONS AND OTHER BUSINESS. Nominations of persons for election
to the Board of Directors of the Corporation and the proposal of business
to be considered by the Shareholders may be made at the Annual Meeting:
1. Pursuant to the Corporation's notice of meeting;
2. By or at the direction of the Board of Directors; or
3. By any Shareholder of the Corporation who is a shareholder of
record at the time of the giving of the notice provided for in these
Bylaws and who is entitled to vote at the meeting and complies with
the notice procedures set forth below.
B. NOMINATIONS AND SUBMISSION OF BUSINESS MATTERS. For nominations or
other business to be properly brought before an Annual Meeting by a
Shareholder, the Shareholder must have given timely notice thereof in
writing to the Secretary of the Corporation. Timely notice is that notice
which is received by the Secretary at the Corporation's principal office
not less than 60 days nor more than 90 days prior to the date on which the
Corporation first mailed its proxy materials for the prior year's Annual
Meeting, provided, however, that in the event the date of the Annual
Meeting is advanced by more than 30 days or delayed by more than 60 days
from the last Thursday in May, notice by the Shareholder, to be timely,
must be received as provided above not earlier than the 90th day prior to
the date of such Annual Meeting and not later than the close of business on
the later of (x) the 60th day prior to such Annual Meeting, or (y) the 10th
day on which public announcement of the date of such a meeting is first
made. Such Shareholder's notice shall be signed by the Shareholder of
record who intends to make the nomination or introduce the other business
(or his or her duly authorized proxy or other representative), shall bear
the date of signature of such Shareholder or representative, and shall set
forth:
1. The name and address, as they appear on the Corporation's
books, of such Shareholder and the beneficial owner(s), if any, on
whose behalf the nomination or proposal is made;
2. The class and number of shares of the Corporation which are
beneficially owned by such Shareholder or beneficial owner(s);
3. A representation that such Shareholder is a holder of record
of shares entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to make the nomination or introduce
the other business specified in the notice;
4. In the case of any proposed nomination for election or
reelection as a director:
(a) the name and residence address of the nominee;
(b) a description of all arrangements or understandings
between such Shareholder or beneficial owner(s) and each nominee
and any other person(s) (naming such person(s)) pursuant to which
the nomination is to be made by the Shareholder;
(c) such other information regarding each nominee proposed
by such Shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be
otherwise required to be disclosed, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as
amended, including any information that would be required to be
included in a proxy statement filed pursuant to Regulation 14A
had the nominee been nominated by the Board of Directors; and
(d) the written consent of each nominee to be named in a
proxy statement and to serve as a director of the Corporation if
so elected; and
5. In the case of any other business that such Shareholder
proposes to bring before the meeting,
(a) a brief description of the business desired to be
brought before the meeting, and, if the business includes a
proposal to amend these Bylaws, the language of the proposed
amendment;
(b) such Shareholder's and beneficial owner's(s') reasons
for conducting such business at such time; and
(c) any material interest in such business of such
Shareholder or beneficial owners(s).
Notwithstanding anything in the above paragraph to the
contrary, in the event that the number of directors to be elected
to the Board of Directors of this Corporation is increased and
there is no public announcement naming all of the nominees for
director or specifying the size of the increased Board of
Directors made by the Corporation at least 70 days prior to the
last Wednesday in May, a Shareholder's notice required by this
Section shall also be considered timely, but only with respect to
nominees for new positions created by such increase, if it is
received by the Secretary at the Corporation's principal office
not later than the close of business on the 10th day following
the day on which such public announcement is first made by the
Corporation.
SECTION 2. SPECIAL MEETINGS. Special meetings of the Shareholders may be
called by the Chairman of the Board, and shall be called by the Secretary on
written request of a majority of members of the Board of Directors, or on
written request of the holders of at least 10 percent of the Corporation's
shares entitled to vote on a matter. The request shall be signed, dated and
delivered to the Secretary describing one or more purposes for which the meeting
is to be held. The Board of Directors shall set the place of the meeting. If no
such designation is made, the place of the meeting shall be the principal
business office of the Corporation in the State of Wisconsin, but any meeting
may be adjourned to reconvene at any place designated by a vote of a majority of
the shares represented thereat.
A. ELECTIONS AND OTHER BUSINESS. Nominations of persons for election
to the Board of Directors may be made at a Special Meeting at which
directors are to be elected pursuant to such notice of meeting:
1. By or at the direction of the Board of Directors; or
2. By any Shareholder of the Corporation who:
(a) is a Shareholder of record at the time of giving notice
of the meeting,
(b) is entitled to vote at the meeting, and
(c) complies with the notice procedures set forth below.
B. NOMINATIONS AND SUBMISSION OF BUSINESS MATTERS. Only such business
as shall have been described in such notice shall be conducted at the
Special Meeting. Any Shareholder desiring to nominate persons for election
to the Board of Directors at a Special Meeting shall cause written notice
to be received by the Secretary of the Corporation at its principal office
not earlier than 90 days prior to such Special Meeting and not later than
the close of business on the later of (x) the 60th day prior to such
Special Meeting or (y) the 10th day following the day on which public
announcement is first made of the date of such Special Meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
Such written notice shall be signed by the Shareholder of record who
intends to make the nomination (or his or her duly authorized proxy or
other representative), shall bear the date of signature of such Shareholder
or other representative, and shall set forth:
1. The name and address, as they appear on the Corporation's
books, of such Shareholder and the beneficial owner(s), if any, on
whose behalf the nomination is made;
2. The class and number of shares of the Corporation which are
beneficially owned by such Shareholder or beneficial owner(s);
3. A representation that such Shareholder is a holder of record
of shares of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to make the
nomination specified in the notice;
4. The name and residence address of the person(s) to be
nominated;
5. A description of all arrangements or understandings between
such Shareholder or beneficial owner(s) and each nominee and any other
person(s) (naming such person(s)) pursuant to which the nomination is
to be made by such Shareholder;
6. Such other information regarding each nominee proposed by such
Shareholder as would be required to be disclosed in solicitations of
proxies for elections of directors, or would be otherwise required to
be disclosed, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended, including any information
that would be required to be included in a proxy statement filed
pursuant to Regulation 14A had the nominee been nominated by the Board
of Directors; and
7. The written consent of each nominee to be named in a proxy
statement and to serve as a director of the Corporation if so elected.
SECTION 3. NOTICE OF ANNUAL OR SPECIAL MEETING. Notice may be communicated
by telegraph, teletype, facsimile or other form of wire or wireless
communication, or by mail or private carrier, and, if these forms of personal
notice are impracticable, notice may be communicated by public announcement.
Such notice stating the place, day and hour of the meeting and, in case of a
special meeting, a description of each purpose for which the meeting is called,
shall be communicated or sent not less than 10 days nor more than 60 days before
the date of the meeting, by or at the direction of the Chairman of the Board or
the Secretary, or other Officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. Written notice by the
Corporation to its shareholders is effective when mailed and may be addressed to
the shareholder's address shown in the Corporation's current record of
shareholders.
SECTION 4. UNANIMOUS CONSENT WITHOUT MEETING. Any action that may 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.
SECTION 5. CLOSING OF STOCK TRANSFER BOOKS OR FIXING OF RECORD DATE. A
"Shareholder" of the Corporation shall mean the person in whose name shares are
registered in the stock transfer books of the Corporation or the beneficial
owner of shares to the extent of the rights granted by a nominee certificate on
file with the Corporation. Such nominee certificates, if any, shall be reflected
in the stock transfer books of the Corporation. For the purpose of determining
Shareholders entitled to notice of or to vote at any meeting of Shareholders or
any adjournment thereof, or Shareholders entitled to receive payment of any
dividend, or in order to make a determination of Shareholders for any other
proper purpose, the Board of Directors may provide that the stock transfer books
shall be closed for a stated period but not to exceed, in any case, 70 days. If
the stock transfer books shall be closed for the purpose of determining
Shareholders entitled to the notice of or to vote at a meeting of Shareholders,
such books shall be closed for at least 10 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 70 days and, in case of
a meeting of Shareholders, not less than 10 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.
SECTION 6. VOTING RECORD. The Secretary 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.
SECTION 7. QUORUM. Shares entitled to vote as a separate voting group as
defined in the Wisconsin Business Corporation Law may take action on a matter at
a meeting only if a quorum of those shares exists with respect to that matter.
Unless the Articles of Incorporation or the Wisconsin Business Corporation Law
provide otherwise, a majority of the votes entitled to be cast on the matter by
a voting group constitutes a quorum of that voting group for action on that
matter.
Once a share is represented for any purposes 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 exists, action on a matter by a voting group is approved if the
votes cast within the voting group favoring the action exceed the votes cast
opposing the action, unless the Articles of Incorporation or the Wisconsin
Business Corporation Law require a greater number of affirmative votes.
"Voting group" means any of the following:
A. All shares of one or more classes or series that under the Articles
of Incorporation or the Wisconsin Business Corporation Law are entitled to
vote and be counted together collectively on a matter at a meeting of
Shareholders.
B. All shares that under the Articles of Incorporation or the
Wisconsin Business Corporation Law are entitled to vote generally on a
matter.
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.
SECTION 8. PROXIES. At all meetings of Shareholders, a Shareholder entitled
to vote may vote in person or by proxy. A Shareholder may appoint a proxy to
vote or otherwise act for the Shareholder by signing an appointment form, either
personally or by his or her attorney-in-fact. Such proxy appointment is
effective when received by the Secretary of the Corporation before or at the
time of the meeting. Unless otherwise provided in the appointment form of proxy,
a proxy appointment 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
appointment shall not of itself constitute a revocation. No proxy appointment
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the appointment form of proxy. The Board of Directors
shall have the power and authority to make rules establishing presumptions as to
the validity and sufficiency of proxy appointments.
SECTION 9. 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 voting group or
groups are enlarged, limited or denied by the Articles of Incorporation.
SECTION 10. 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. An
appointment form of 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 Bylaws
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 by
him, either in person or by proxy. An appointment form of 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, 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; provided, however, a pledgee shall be entitled to
vote shares held of record by the pledgor if the Corporation receives
acceptable evidence of the pledgee's authority to sign.
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. Shares held by a minor may be voted by a personal representative,
administrator, executor, guardian or conservator representing the minor if
evidence of such fiduciary status, acceptable to the Corporation, is
presented.
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 judicial proceedings for appointment of
a guardian. Shares held by an incompetent or spendthrift may be voted by a
personal representative, administrator, executor, guardian or conservator
representing the minor if evidence of such fiduciary status, acceptable to
the Corporation, is presented.
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 of authority of
the individual present or signing the appointment form of 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.
SECTION 11. CONDUCT OF MEETINGS. The Chairman of the Board, or in the
Chairman's absence, the President, or, in their absence such Vice President as
is designated by the Board of Directors, shall call the meeting to order and act
as Chairperson of the meeting. Only persons nominated in accordance with the
procedures set forth in Article II, Sections 1 and 2, shall be eligible to serve
as Directors. Only such business as shall have been brought before a meeting in
accordance with the procedures set forth in Article II, Sections 1 and 2, shall
be eligible to be conducted. The Chairperson of the meeting shall have the power
and duty to determine whether any nomination or any business proposed to be
brought before the meeting was made in accordance with the procedures set forth
in Article II, Sections 1 and 2, and, if any proposed nomination or business is
not in compliance therewith, to declare that such defective proposal shall be
disregarded.
SECTION 12. PUBLIC ANNOUNCEMENT. For purposes of Article II, Sections 1 and
2, "public announcement" shall mean disclosure in a press release reported by
the Dow Jones News Service, Associated Press, or comparable national news
service or in a document publicly filed by the Corporation with the Securities
and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Securities
Exchange Act of 1934, as amended.
SECTION 13. INVALIDITY. The Chairperson, upon recommendation of the
Secretary, may reject a vote, consent, waiver, or proxy appointment, if the
Secretary or other officer or agent of the Corporation who is authorized to
tabulate votes, acting in good faith, has reasonable doubt about the validity of
the signature on it or about the signatory's authority to sign for the
Shareholder. The Corporation and its officer or agent who accepts or rejects a
vote, consent, waiver or proxy appointment in good faith and in accordance with
the Wisconsin Business Corporation Law shall not be liable for damages to the
Shareholders for consequences of the acceptance or rejection.
SECTION 14. WAIVER OF NOTICE. A Shareholder may waive any notice required
by the Wisconsin Business Corporation Law, the Articles of Incorporation, or
these Bylaws before or after the date and time stated in the notice. The waiver
shall be in writing and signed by the Shareholder entitled to the notice,
contain the same information that would have been required in the notice under
the Wisconsin Business Corporation Law (except that the time and place of
meeting need not be stated), and be delivered to the Corporation for inclusion
in the corporate records. A Shareholder's attendance at any Annual Meeting or
Special Meeting, in person or by proxy, waives objection to all of the
following: (a) lack of notice or defective notice of the meeting, unless the
Shareholder promptly upon arrival or at the beginning of the meeting objects to
holding, or transacting business at, the meeting; and (b) consideration of a
particular matter at the meeting that is not within the purpose described in the
meeting notice, unless the Shareholder objects to considering the matter when it
is presented.
ARTICLE III. BOARD OF DIRECTORS
SECTION 1. NUMBER OF DIRECTORS. Within the limits established in the
Articles of Incorporation, the number of Directors of the Corporation shall be
such number as shall be determined by the Board of Directors from time to time.
SECTION 2. TERM OF OFFICE. Elected Directors shall hold office for a term
of three (3) years and until their successors are elected and qualified, except
as otherwise provided in this Section or until their death, resignation or
removal. The Board of Directors shall be divided into three (3) classes of three
(3) or more directors each, with, as nearly as possible, an equal number of
Directors in each class. The term of office of the first class of Directors
shall expire at the first annual meeting after their initial election and when
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
when their successors are elected and qualified, and the terms of office of the
third class shall expire at the third annual meeting after their initial
election and when 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.
SECTION 3. NOMINATIONS. Nominations for the election of directors shall be
made in accordance with the provisions of Article II, Sections 1 and 2 hereof,
which requirements are hereby incorporated by reference in this Article III,
Section 3.
SECTION 4. REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after, and at the
same place as, the Annual Meeting of Shareholders, for election of corporate
officers and transaction of other business. The Board of Directors may provide
by resolution the time and place for holding additional meetings without other
notice than such resolution.
SECTION 5. SPECIAL MEETINGS. Special Meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board or the Secretary upon
written request of any three Directors. The Secretary shall give sufficient
notice of such meeting, to be not less than two (2) days, in person or by mail
or by telephone, telegraph, teletype, facsimile or other form of wire or
wireless communication as to enable the Directors so notified to attend such
meeting. The Chairman or Secretary who calls the meeting may fix any place,
within or without the State of Wisconsin, as the place for holding any Special
Meeting of the Board of Directors.
SECTION 6. WAIVER OF NOTICE. Whenever any notice whatsoever is required to
be given to any Director of the Corporation under the Articles of Incorporation
or Bylaws or any provisions 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, and the
Corporation shall retain copies of such waivers in its corporate records. A
director's attendance at or participation in a meeting waives any required
notice to him or her of the meeting unless the Director at the beginning of the
meeting or promptly upon his or her arrival objects to holding the meeting and
does not thereafter vote for or assent to action taken at the meeting. 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.
SECTION 7. QUORUM. A majority of the Directors in office for the time
being, and convened according to these Bylaws, shall constitute a quorum for the
transaction of business, but a majority of the directors present or
participating (though less than a quorum) may adjourn the meeting from time to
time without further notice.
SECTION 8. VACANCIES. Vacancies, including those created by an increase in
the number of directors in the Board of Directors, may be filled by the
remaining Directors. A Director elected to fill a vacancy shall serve for the
unexpired term of his or her predecessor. In the absence of action by the
remaining Directors, the Shareholders may fill such vacancy at a Special Meeting
in accordance with the Articles of Incorporation, or by unanimous consent
according to these Bylaws.
SECTION 9. REMOVAL. The Shareholders may remove one or more directors, with
or without cause, at a meeting called for that purpose, the notice of which
reflects that purpose, in accordance with the Articles of Incorporation of this
Corporation.
SECTION 10. COMPENSATION. A director may receive such compensation for
services as is determined by resolution of the Board irrespective of any
personal interest of its members. A director also may serve the Corporation in
any other capacity and receive compensation therefore. The Board of Directors
also shall have authority to provide for or to delegate authority to an
appropriate committee to provide for reasonable pensions, disability or death
benefits and other benefits or payments, to Directors, Officers and employees
and to their estates, families, dependents or beneficiaries on account of prior
services rendered to the Corporation by such Directors, Officers and employees.
SECTION 11. GENERAL POWERS. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the Corporation shall be
managed under the direction of, the Board of Directors, subject to any
limitation set forth in these Bylaws or the Articles of Incorporation.
SECTION 12. CONDUCT OF MEETINGS. The Chairman of the Board, or in the
Chairman's absence the President, or in their absence such Vice President as is
designated by the Board of Directors, shall call meetings of the Board of
Directors to order and shall act as Chairperson of the meeting. The Secretary of
the Corporation shall act as Secretary of all meetings of the Board of
Directors, but in the absence of the Secretary, the presiding Officer may
appoint an Assistant Secretary or any Director or other person present or
participating to act as Secretary of the meeting.
SECTION 13. MANNER OF ACTING. If a quorum is present or participating when
a vote is taken, the affirmative vote of a majority of directors present or
participating is the act of the Board of Directors or a committee of the Board
of Directors, unless the Wisconsin Business Corporation Law or the Articles of
Incorporation or these Bylaws require the vote of a greater number of directors.
SECTION 14. PRESUMPTION OF ASSENT. A Director of the Corporation who is
present at or participates in a meeting of the Board of Directors or a committee
thereof 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 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.
SECTION 15. UNANIMOUS CONSENT WITHOUT MEETING. Any action required or
permitted by the Articles of Incorporation or Bylaws 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.
SECTION 16. MEETING 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.
SECTION 17. COMMITTEES.
A. REGULAR COMMITTEES.
1. GENERAL DESCRIPTION. In order to facilitate the work of the
Board of Directors of this Corporation, the following regular
committees shall be elected from the membership of the Board of
Directors at the regular meeting held in May of each year (or at such
other time as the Board of Directors may determine):
Executive Committee
Finance Committee
Compensation Committee
Audit Committee
Each committee shall consist of such number of members, not less
than three (3), as shall be determined by the Board of Directors. The
Chairman of the Board of Directors, and in the Chairman's absence the
President, and in their absence, such Vice President as is designated
by the Board of Directors, shall submit nominations for such committee
memberships. Committee members shall hold office until the next board
meeting at which Committee elections are conducted in accordance with
these Bylaws, and until their successors are elected and qualified.
Each Regular Committee of the Board of Directors may exercise the
authority of the full Board within the scope of the duties and powers
delegated to it in these Bylaws, except that no committee of this
Board shall do any of the following:
(a) Authorize distributions;
(b) Approve or propose to shareholders action that the
Wisconsin Business Corporation Law requires be approved by
shareholders;
(c) Fill vacancies on the board of directors or, except as
provided herein, on any of its committees;
(d) Amend the Articles of Incorporation;
(e) Adopt, amend or repeal the Bylaws;
(f) Approve a plan of merger not requiring shareholder
approval;
(g) Authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the full Board; or
(h) Authorize or approve the issuance or sale or contract
for sale of shares or determine the designation and relative
rights, preferences and limitations of a class or series of
shares, except that the Board of Directors may authorize a
committee or a senior executive officer of the Corporation to do
so within limits prescribed by the Board of Directors.
2. THE EXECUTIVE COMMITTEE. When the Board of Directors is not in
session, the Executive Committee shall have and may exercise all of
the powers of the full Board solely with regard to those matters which
are within the scope of the Executive Committee's designated duties,
as provided herein. The Chairman of the Board of Directors shall be a
member of the Executive Committee.
The Executive Committee shall:
(a) Approve long range corporate and strategic plans,
including plans for any major borrowing or capital raising
programs;
(b) Advise and consult with management on corporate policies
regarding reserving, reinsurance and other liabilities;
(c) Approve the annual operating plan;
(d) Approve major changes in policy affecting new services
and programs; and
(e) Carry out such special assignments as the Board of
Directors may, from time to time, give to the Executive
Committee.
3. THE FINANCE COMMITTEE. When the Board of Directors is not in
session, the Finance Committee shall have and may exercise all of the
powers of the full Board solely with regard to those matters which are
within the scope of the Finance Committee's designated duties, as provided
herein. The Chairman of the Board of Directors shall be a member of the
Finance Committee.
The Finance Committee shall:
(a) Approve investment policies and plans;
(b) Authorize and approve the investment of funds of the
Corporation;
(c) Consult with management regarding real estate, accounts
receivable and other assets;
(d) Determine the amount and types of all insurance that
should be carried by this Corporation and authorize the purchase
thereof;
(e) Advise and consult with the operating management in the
selection of the carriers of such insurance;
(f) Advise and consult with management on corporate tax
policy; and
(g) Carry out such special assignments as the Board of
Directors may, from time to time, give to the Finance Committee.
4. THE COMPENSATION COMMITTEE. When the Board of Directors is not in
session, the Compensation Committee shall have and may exercise all of the
powers of the full Board solely with regard to those matters which are
within the scope of the Compensation Committee's designated duties, as
provided herein.
The Compensation Committee shall:
(a) Evaluate Senior Management (corporate officers)
performance against objectives;
(b) Approve Senior Management development programs;
(c) Approve the corporate compensation policy, including
making recommendations and decisions on any bonuses or incentive
plans, and establish the annual compensation for the Chairman of
the Board of Directors;
(d) Act as the Nominating Committee for officers and
directors and make recommendations to the Board for types,
methods and levels of directors' compensation;
(e) Administer the compensation plans for the officers,
directors, and key employees; and
(f) Carry out such special assignments as the Board of
Directors may, from time to time, give to the Compensation
Committee.
5. THE AUDIT COMMITTEE. When the Board of Directors is not in
session, the Audit Committee shall have and may exercise all of the
powers of the full Board solely with regard to those matters which are
within the scope of the Audit Committee's designated duties, as
provided herein.
The Audit Committee shall:
(a) Select and engage the independent certified public
accountants to audit the books, records and financial
transactions of the Corporation;
(b) Review with the independent accountants the scope of
their examination, with particular emphasis on the areas to which
either the committee or the independent accountants believe
special attention should be directed. The Audit Committee may
have the independent accountants perform such additional
procedures as the Committee or the auditors deem necessary;
(c) Review and approve the annual plan for the financial
audit (internal audit) department;
(d) Review with the independent accountants the financial
statements and auditors' reports thereon;
(e) Review the management letter of the independent
accountants, and audit reports by the Corporation's internal
auditors to assure that appropriate action has been taken by
Senior Management as to each item recommended;
(f) Encourage the independent accountants and the internal
auditors to communicate directly with the Chairman of the Board
and President or, if necessary, the Chairman of the Audit
Committee whenever any significant recommendation has not been
satisfactorily resolved at the Senior Management level;
(g) Review the Conflict of Interest statements to assure the
Board of Directors that any conflict of interest has been duly
reported to and reviewed by Audit Committee;
(h) Review and approve all related party transactions; and
(i) Carry out such special assignments as the Board of
Directors may, from time to time, give to the Audit
Committee.
B. SPECIAL COMMITTEES. In addition to the foregoing Regular
Committees, the Board of Directors may, from time to time, establish
Special Committees and specify the composition, functions and authority of
any such Special Committee.
C. VACANCIES; TEMPORARY APPOINTMENTS. When, for any cause a vacancy
occurs in any Regular Committee, the remaining committee members, by
majority vote, may fill such vacancy by a temporary appointment of a
director on the Board not on the subject committee to fill the vacancy
until the next Board Meeting, at which time the full Board shall fill the
vacancy.
D. COMMITTEE MINUTES AND REPORTS. All of the foregoing committees
shall keep minutes and records of all of their meetings and activities and
shall report the same to the Board of Directors at its next regular
meeting. Such minutes and records shall be available for inspection by the
Directors at all times.
ARTICLE IV. OFFICERS
SECTION 1. GENERALLY. The principal Officers of the Corporation shall be a
Chairman of the Board (Chief Executive Officer), a President, one or more Vice
Presidents, a Secretary and a Treasurer. The Board of Directors shall elect the
principal officers annually at the Annual Meeting. All officers shall hold
office for a period of one year and until their successors are duly elected and
qualified, or until their prior death, resignation or removal.
SECTION 2. REMOVAL. Any officer or agent may be removed by the Board of
Directors with or without cause whenever in its judgment the best interests of
the Corporation would 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.
SECTION 3. VACANCIES. A vacancy in any principal office because of death,
resignation, removal, or otherwise, shall be filled by the Board of Directors
for the unexpired portion of the term. The Board of Directors may, from time to
time, omit to elect one or more officers, or may omit to fill a vacancy, and in
such case, the designated duties of such officer, unless otherwise provided in
these Bylaws, shall be discharged by the Chairman of the Board or such other
officers as he or she may designate.
SECTION 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, who shall also
be the Chief Executive Officer, shall preside at all meetings of the
Shareholders and of the Directors and shall do and perform such other duties as
from time to time may be assigned to that office by the Board of Directors.
SECTION 5. PRESIDENT. The President shall have general supervision of the
business and affairs of the Corporation. The President may sign and execute all
authorized bonds, notes, checks, contracts, or other obligations in the name of
the Corporation. The President shall perform such other duties as from time to
time may be assigned to him or her by the Board of Directors.
SECTION 6. VICE PRESIDENTS. Should the Chairman or the President be absent
or unable to act, the Board of Directors shall designate a Vice President or
other Officer to discharge the duties of the vacant office with the same power
and authority as is vested in that office. The Vice Presidents shall perform
such other duties as from time to time may be assigned to them by the President
or the Board of Directors.
SECTION 7. SECRETARY. The Secretary shall keep a record of the minutes of
the meetings of the Shareholders and of the Board of Directors. He or she shall
countersign all instruments and documents executed by the Corporation; affix to
instruments and documents the seal of the Corporation; keep in books therefore
the transactions of the Corporation; see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law; and
perform such other duties as usually are incident to such office or may be
assigned by the Chairman of the Board, the President or the Board of Directors.
SECTION 8. TREASURER. The Treasurer, subject to the control of the Board of
Directors, shall collect, receive, and safely keep all monies, funds and
securities of the Corporation, and attend to all its pecuniary affairs. He or
she shall keep full and complete accounts and records of all its transactions,
of sums owing to or by the Corporation, and all rents and profits in its behalf.
SECTION 9. ASSISTANTS AND ACTING OFFICERS. The Chairman of the Board, the
President and 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 the
officer's stead, or to perform the duties of such officer whenever for any
reason it is impracticable for the officer to act personally, and the assistant
or acting officer or other agent so appointed by the Chairman of the Board, the
President or 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 otherwise may be
defined or restricted by the Chairman of the Board, the President or the Board
of Directors.
SECTION 10. 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. FUNDS OF THE CORPORATION
SECTION 1. FUNDS. All funds of the Corporation shall be deposited or
invested in such depositories or in such securities as may be authorized from
time to time by the Board of Directors or appropriate committee under
authorization of the Board of Directors.
SECTION 2. NAME. All investments and deposits of funds of the Corporation
shall be made and held in its corporate name, except that securities kept under
a custodial agreement or trust arrangement with a bank or banking and trust
company may be issued in the name of a nominee of such bank or banking and trust
company and except that securities may be acquired and held in bearer form.
SECTION 3. LOANS. All loans contracted on behalf of the Corporation and all
evidences of indebtedness that are issued in the name of the Corporation shall
be under the authority of a resolution of the Board of Directors. Such
authorization may be general or specific.
SECTION 4. CONTRACTS. The Board of Directors may authorize one or more
officers, or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation. Such authorization
may be general or specific. In the absence of other designation, all deeds,
mortgages and instruments of assignment or pledge made by the Corporation shall
be executed in the name of the Corporation by the Chairman of the Board, the
President or one of the Vice Presidents and by the Secretary or Treasurer; the
Secretary, when necessary or required, shall affix the corporate seal thereto;
and when so executed no other party to such instrument or any third party shall
be required to make any inquiry into the authority of the signing officer or
officers.
SECTION 5. DISBURSEMENTS. All monies of the Corporation shall be disbursed
by check, draft, or written order only, and all checks and orders for the
payment of money shall be signed by such Officer or Officers as may be
designated by the Board of Directors. The Officers and employees of the
Corporation handling funds and securities of the corporation shall give surety
bonds in such sums as the Board of Directors or appropriate committee may
require.
SECTION 6. PROHIBITED TRANSACTIONS. No directors or Officer of the
Corporation shall borrow money from the Corporation, or receive any compensation
for selling, aiding in the sale, or negotiating for the sale of any property
belonging to the Corporation, or for negotiating any loan for or by the
Corporation.
SECTION 7. 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 Chairman of the Board,
the President or in their absence any Vice President of this Corporation
who may be present and designated by the Board of Directors; and
B. Whenever, in the judgment of the Chairman of the Board, the
President, or in their absence, a designated 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 Chairman of the Board, the President,
or a designated Vice President 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
SECTION 1. 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 Chairman of
the Board, the President, or a Vice President, and the Secretary, or by another
officer designated by the Chairman of the Board, the President or the Board of
Directors. 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 of this Article VI.
SECTION 2. FACSIMILE SIGNATURES AND SEAL. The seal of the Corporation on
any certificates for shares may be a facsimile. The signature of the Chairman of
the Board, the President or other authorized officer upon a certificate may be a
facsimile 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.
SECTION 3. SIGNATURE BY FORMER OFFICER. 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.
SECTION 4. TRANSFER OF SHARES. Prior to due presentment of a certificate
for shares for registration of transfer, the Corporation may treat the
shareholder 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:
SECTION 5. 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.
SECTION 6. 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;
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.
SECTION 7. 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
received for shares may consist of any tangible or intangible property or
benefit to the Corporation, including cash, promissory notes, services
performed, contracts for services to be performed or other securities of the
Corporation. When the Corporation receives the consideration for which the Board
of Directors authorized the issuance of shares, the shares issued for that
consideration are fully paid and nonassessable, except as provided by Section
180.0622 of the Wisconsin Business Corporation Law which may require further
assessment for unpaid wages to employees under certain circumstances. The
Corporation may place in escrow shares issued for a contract for future services
or benefits or a promissory note, or make other arrangements to restrict the
transfer of the shares, and may credit distributions in respect of the shares
against their purchase price, until the services are performed, the benefits are
received or the note is paid. If the services are not performed, the benefits
are not received or the note is not paid, the Corporation may cancel, in whole
or in part, the shares escrowed or restricted and the distributions credited.
SECTION 8. UNCERTIFICATED SHARES. In accordance with Section 180.0626 of
the Wisconsin Business Corporation Law, the Board of Directors may issue any
shares of any of its classes or series without certificates. The authorization
does not affect shares already represented by certificates until the
certificates are surrendered to the Corporation. Within a reasonable time after
the issuance or transfer of shares without certificates, the Corporation shall
send the Shareholder a written statement of the information required on share
certificates by Sections 180.0625 and 180.0627, if applicable, of the Wisconsin
Business Corporation Law, and by the Bylaws of the Corporation.
The Corporation shall maintain at its offices, or at the office of its
transfer agent, an original or duplicate stock transfer book containing the
names and addresses of all Shareholders and the number of shares held by each
Shareholder. If the shares are uncertificated, the Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as such, as
the owner of shares for all purposes, and shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Wisconsin.
SECTION 9. TRANSFER AGENT AND REGISTRAR. The Corporation may maintain one
or more transfer offices or agencies, each in charge of a transfer agent
designated by the Board of Directors, where the shares of stock of the
Corporation shall be transferable. The Corporation also may maintain one or more
registry offices, each in charge of a registrar designated by the Board of
Directors, where such shares of stock shall be registered. The same person or
entity may be both a transfer agent and registrar.
SECTION 10. STOCK REGULATIONS. The Board of Directors shall have the power
and authority to make all such further rules and regulations not inconsistent
with the laws 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. INDEMNIFICATION AND LIABILITY OF
OFFICERS AND DIRECTORS
SECTION 1. INDEMNIFICATION.
A. Any person, or such person's estate or personal representative,
made or threatened with being made a party to any action, suit,
arbitration, or proceeding (civil, criminal, administrative, or
investigative, whether formal or informal), which involves foreign,
federal, state or local law, by reason of the fact that such person is or
was a Director or Officer of this Corporation or of any corporation or
other enterprise for which he or she served at this Corporation's request
as a director, officer, partner, trustee, member of any decision-making
committee, employee, or agent, shall be indemnified by this Corporation for
all reasonable expenses incurred in the proceeding to the extent he or she
has been successful on the merits or otherwise.
B. In cases where a person described in subsection A. is not
successful on the merits or otherwise, this Corporation shall indemnify
such person against liability and reasonable expenses incurred by him or
her in any such proceeding, unless liability was incurred because the
person breached or failed to perform a duty he or she owed to the
Corporation and the breach or failure to perform constituted 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 or
Officer had a material conflict of interest;
2. A violation of criminal law, unless the Director or Officer
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 or Officer derived an
improper personal profit; or
4. Willful misconduct.
C. The determination whether indemnification shall be required under
subsection B. shall be made, at the selection of the Director or Officer,
according to one of the following methods:
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 two 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; or
3. By the court conducting the proceedings or another court of
competent jurisdiction, either on application by the Director or
Officer for an initial determination or on application for review of
an adverse determination under 1. or 2. above.
D. 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 or
Officer is not required.
E. A Director or Officer who seeks indemnification under this Section
shall make a written request to the Corporation.
F. Upon written request by a Director or Officer who is a party to a
proceeding described in subsection A., this Corporation may pay or
reimburse his or her reasonable expenses as incurred if the Director or
Officer 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; and
2. A written undertaking, executed personally or on his or her
behalf, to repay the allowance, and reasonable interest thereon, to
the extent that it is ultimately determined under subsections C. 1. or
C. 2., above, that indemnification is not required or to the extent
that indemnification is not ordered by a court under subsection C. 3.,
above. The undertaking under this subsection shall be an unlimited
general obligation of the Director or Officer, may be accepted without
reference to his or her ability to repay the allowance, and may be
secured or unsecured.
G. This Article VII, Section 1 subsections A.-F., shall also apply
where a person, or such person's estate or personal representative, is made
or threatened with being made a party to any proceeding described in
subsection A. by reason of the fact that such person is or was an Employee
of the Corporation, except that in addition to the categories of conduct
set forth in subsection B. in relation to which the Corporation has no duty
to indemnify, the Corporation also shall have no duty to indemnify the
Employee against liability and reasonable expenses incurred by him or her
in any such proceeding if liability was incurred because the person
breached or failed to perform a duty he or she owed to the Corporation and
the breach or failure to perform constituted material negligence or
material misconduct in performance of the Employee's duties to the
Corporation.
H. Unless a Director or Officer of this Corporation has knowledge that
makes reliance unwarranted, a Director or Officer, in discharging his or
her duties to the Corporation, may rely on information, opinions, reports
or statements, any of which may be written or oral, formal or informal,
including financial statements and other financial data, if prepared or
presented by any of the following:
1. An officer or employee of the Corporation whom the Director or
Officer believes in good faith to be reliable and competent in the
matters presented;
2. Legal counsel, public accountants or other persons as to
matters the Director or Officer believes in good faith are within the
person's professional or expert competence; or
3. In the case of reliance by a Director, a committee of the
Board of Directors of which the Director is not a member if the
Director believes in good faith that the committee merits confidence.
This subsection does not apply to the liability of a Director for
improper declaration of dividends, distribution of assets, corporate
purchase of its own shares, or distribution of assets to shareholders
during liquidation, or for corporate loans made to an Officer or
Director, under Wisconsin Business Corporation Law Section
180.0832(1), or the reliance of a Director on financial information
represented as correct by corporate officers or independent or
certified public accountants under Wisconsin Business Corporation Law
Section 180.0826.
I. In discharging his or her duties to the Corporation and in
determining what he or she believes to be in the best interest of the
Corporation, a Director or Officer may, in addition to considering the
effects of any action on Shareholders, consider the following:
1. The effects of the action on employees, suppliers and
customers of the Corporation;
2. The effects of the action on communities in which the
Corporation operates; or
3. Any other factor the Director or Officer considers pertinent.
SECTION 2. LIMITED LIABILITY OF DIRECTORS AND OFFICERS TO CORPORATION AND
SHAREHOLDERS.
A. Except as provided in subsection B. of this Section 2, a Director
or Officer is not liable to this Corporation, its Shareholders, or any
person asserting rights on behalf of the Corporation or its Shareholders,
for damages, settlements, fees, fines, penalties or other monetary
liabilities arising from a breach of, or failure to perform, any duty
resulting solely from his or her status as a Director, unless the person
asserting liability proves that the breach or failure to perform
constitutes any of the following:
1. A willful failure to deal with the Corporation or its
Shareholders in connection with a matter in which the Director had a
material conflict of interest;
2. A violation of criminal law, unless the Director or Officer
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 derived an improper
personal profit; or
4. Willful misconduct.
B. This Section 2 does not apply to the liability of a Director or
Officer for improper declaration of dividends, distribution of assets,
corporate purchase of its own shares, or distribution of assets to
shareholders during liquidation, or for corporate loans made to an Officer
or Director, under Wisconsin Business Corporation Law Section 180.0832(1).
SECTION 3. CODE OF ETHICS.
A. Directors, Officers and management employees shall exercise the
utmost good faith in all transactions touching upon their duties to the
Corporation and its property. In their dealings with and on behalf of the
Corporation they are held to a strict rule of honesty and fair dealing
between themselves and the Corporation. They shall not use their positions,
or knowledge gained therefrom, so that a conflict may arise between the
Corporation's interest and that of the individual.
A "conflict of interest" transaction means a transaction with the
Corporation in which a Director of the Corporation has a direct or indirect
interest. The circumstances in which a Director of the Corporation has an
indirect interest in a transaction include but are not limited to a
transaction under any of the following circumstances:
1. Another entity in which the Director has a material financial
interest or in which the Director is a general partner is a party to
the transaction; or
2. Another entity of which the Director is a director, officer or
trustee is a party to the transaction and the transaction is, or
because of its significance to the Corporation should be, considered
material by the Board of Directors of the Corporation. A conflict of
interest transaction is not voidable by the Corporation solely because
of the Director's interest in the transaction if any of the
circumstances set forth in Section 180.0831 of the Wisconsin Business
Corporation Law are true or occur.
B. All acts of Directors, Officers and management employees shall be
for the sole benefit of the Corporation in any dealing which may affect it
adversely.
C. No Director, Officer or management employee shall accept any favor
which might influence his official act or which might reflect upon his
business conduct.
D. Officers and management employees shall avoid outside employment or
activity which involves obligations which may compete with or be in
conflict with the interests of the Corporation.
E. A full disclosure of all facts of any transaction which is subject
to any doubt shall be made to the Chairman of the Board or the President of
the Corporation before consummating the same.
F. A copy of this Article VII, Section 3, annually shall be delivered
to all Directors, Officers and management employees, each of whom shall
acknowledge receipt thereof to the Secretary of the Corporation.
ARTICLE VIII. CORPORATE DIVIDENDS
The Board of Directors may from time to time declare dividends on its
outstanding shares in the manner and upon the terms and conditions provided by
law and its Articles of Incorporation.
ARTICLE IX. CORPORATE SEAL
The Board of Directors may provide a corporate seal which may be circular
in form and may have inscribed thereon the name of the Corporation and the state
of incorporation and the words "Corporate Seal."
ARTICLE X. FISCAL YEAR
The fiscal year shall be set by the Board of Directors.
ARTICLE XI. AMENDMENTS
SECTION 1. BY SHAREHOLDERS. These Bylaws may be altered, amended or
repealed and new Bylaws 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.
SECTION 2. BY DIRECTORS. These Bylaws may also be altered, amended or
repealed and new Bylaws may be adopted by the Board of Directors by affirmative
vote of a majority of the number of Directors present at or participating in any
meeting at which a quorum is in attendance; but no bylaw adopted by the
Shareholders shall be amended or repealed by the Board of Directors if the bylaw
so adopted so provides.
SECTION 3. IMPLIED AMENDMENTS. Any action taken or authorized by the
Shareholders or by the Board of Directors, which would be inconsistent with the
Bylaws then in effect but is taken or authorized by affirmative vote of not less
than the number of shares or the number of Directors required to amend the
Bylaws so that the Bylaws would be consistent with such action, shall be given
the same effect as though the Bylaws had been temporarily amended or suspended
so far, but only so far, as is necessary to permit the specific action so taken
or authorized.
EXHIBIT 99.2
[Letterhead]
NEWS RELEASE
For Immediate Release
For more information contact:
Cliff Bowers
Vice-President
Corporate Communications
(920)661-2766
NEW YORK STOCK EXCHANGE TRADING BEGINS
ON SHARES OF AMERICAN MEDICAL SECURITY GROUP
GREEN BAY, Wis. -- Sept. 29, 1998 -- Shares of the reconstituted American
Medical Security Group, Inc. (ticker AMZ), were officially traded for the first
time yesterday on the New York Stock Exchange.
The beginning of trading in American Medical Security Group (AMSG) common
shares follows the completion last week of the company's spinoff of United
Wisconsin Services, Inc.
AMS BACKGROUND
The continuing operations of AMSG consist of the individual and small
employer group health business of American Medical Security Holdings, Inc., and
its operating subsidiaries (AMS). AMS health care benefit policies are sold by
independent agents in 33 states and the District of Columbia. Approximately
578,000 individuals in the U.S. are covered by the company's policies.
The Green Bay, Wis.-based company specializes in providing cost-effective
managed care for the small business market. AMS, with 1997 revenues of
approximately $1 billion, offers a full complement of health care services:
medical, dental, prescription drug, life insurance and disability.
- Ad One -
According to the U.S. Department of Census, the small business market where
AMS has significant expertise is the fastest-growing segment of the U.S.
economy. The segment currently accounts for 21 million businesses, 68 percent of
all new U.S. jobs and 57 percent of the nation's private workforce.
Most AMS health care benefits are provided through PPO (Preferred Provider
Organization) plans. PPO plans differ from HMO plans in that they often provide
a wider choice of health professionals, fewer benefit restrictions and increased
access to specialists at a somewhat higher price than HMOs. Medical plan
enrollment has grown faster in PPOs than in HMOs in recent years. At the end of
1997, 35 percent of the nation's employees was covered by PPO health plans and
30 percent was enrolled in HMO plans.
In addition to its nearly 578,000 medical members, AMS has approximately
411,000 dental members
2,000 employees
70 U.S. sales offices
38,000 independent agents
AMS owns two provider networks through which nearly a quarter of its
business is conducted. It also leases networks to ensure cost efficient health
care choices for its customers. Other alliances include:
7,000 hospitals
400,000 medical providers
50,000 pharmacies
AMS HISTORY
AMS was founded in 1988 as a joint venture between United Wisconsin
Services and two health care industry entrepreneurs. AMS grew rapidly until 1995
and 1996 when it experienced significant operating losses. In 1996, UWS
exercised its option to purchase the remainder of AMS. At that time, Samuel V.
Miller was named President & Chief Operating Officer.
- Ad Two -
Miller initiated a far-reaching turnaround strategy that returned AMS to
profitability in 1997. Improved health-loss and health-expense ratios, a
restructured sales and marketing strategy, and a new senior management team were
central components of the turnaround.
CURRENT AMS MANAGEMENT
SAMUEL V. MILLER -- CHAIRMAN, PRESIDENT & CHIEF EXECUTIVE OFFICER
Prior to joining AMS, Miller was a member of the Executive Staff Planning
Group with Travelers Group in New York. In that capacity he served as Chairman
and Group Chief Executive of National Benefit Life Insurance Company and
Primerica Financial Services Ltd. of Canada.
He was also one of the builders of Employers Health, now the small group
business of Humana, where he worked as Senior Vice President of Sales &
Marketing. He later took on additional responsibility as Chief Operating Officer
and led the company's sale to American Express in 1982.
Miller moved to American Express Life in 1984 and presided over the
building of the largest long-term-care business in America. He was also a member
of the Senior Management Committee at American Express in New York and was
President & CEO of American Express Life.
Within the first 12 months of becoming President & CEO of AMS, Miller
assembled a new team of executive officers with significant professional and
industry experience. Those executives include Edward R. Skoldberg, Executive
Vice President & Chief Operating Officer; Gary D. Guengerich, Executive Vice
President & Chief Financial Officer; and Timothy J. Moore, Senior Vice
President, General Counsel and Corporate Secretary.
Last week the AMSG board of directors elected Miller Chairman, President &
CEO of the company. Skoldberg, Guengerich and Moore have been elected to the
same offices with AMSG they previously held with AMS.
- Ad Three -
OVERALL STRATEGY
The central company objective is to build a multi-billion dollar
corporation that is the nation's foremost small group, managed care
organization. It will do so by expanding sales through independent agents and by
continuing to reduce loss and expense ratios.
In addition, AMSG will continue to leverage its expense ratio advantage and
its expertise in the small group segment to acquire books of business during a
period of industry consolidation. In September 1997, AMS purchased the
individual and small group business of Pan-American Life Insurance Company. It
acquired much of Pan-American's remaining domestic health benefit business in
July 1998.
# # # # #
CAUTIONARY STATEMENT: This release contains forward-looking statements with
respect to the financial condition, results of operations and business of
American Medical Security Group, Inc. Such forward-looking statements are
subject to inherent risks and uncertainties that may cause actual results or
events to differ materially from those contemplated by such forward-looking
statements. Factors that may cause actual results or events to differ materially
from those contemplated include rising health care costs, business conditions
and competition in the managed care industry, developments in health care reform
and other regulatory issues and other factors that may be referred to in the
Company's reports filed with the Securities and Exchange Commission from time to
time.
