<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 1999
-----------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission file number 1-11084
--------
KOHL'S CORPORATION
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1630919
-------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051
-------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (262) 703-7000
---------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 Days.
Yes X No ______
-----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: December 6, 1999 Common Stock,
------------------------------
Par Value $.01 per Share, 163,025,086 shares Outstanding.
- --------------------------------------------------------
<PAGE>
KOHL'S CORPORATION
INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets at
October 30, 1999, January 30, 1999 and
October 31, 1998 3
Condensed Consolidated Statements of Income
for the Three Months and Nine Months Ended
October 30, 1999 and October 31, 1998 4
Condensed Consolidated Statement of Changes in
Shareholders' Equity for the Nine Months
Ended October 30, 1999 5
Condensed Consolidated Statements of
Cash Flows for the Nine Months Ended
October 30, 1999 and October 31, 1998 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-14
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
-2-
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 30, January 30, October 31,
1999 1999 1998
(Unaudited) (Audited) (Unaudited)
------------- ------------- -------------
(In thousands)
Assets
------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 16,066 $ 2,858 $ 2,757
Short-term investments 20,000 26,736 15,000
Accounts receivable trade, net 291,713 270,704 123,459
Merchandise inventories 1,010,965 617,362 832,338
Deferred income taxes 16,449 14,412 6,576
Other 12,476 7,366 5,180
------------- ------------- -------------
Total current assets 1,367,669 939,438 985,310
Property and equipment, net 1,226,584 933,011 883,602
Other assets 37,749 25,027 20,783
Favorable lease rights 140,202 13,681 14,153
Goodwill 21,038 24,938 26,238
------------- ------------- -------------
Total assets $2,793,242 $1,936,095 $1,930,086
============= ============= =============
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 466,013 $ 212,926 $ 315,770
Accrued liabilities 136,103 117,200 88,283
Income taxes payable 30,068 48,572 13,141
Current portion of long-term debt 11,578 1,533 1,559
------------- ------------- -------------
Total current liabilities 643,762 380,231 418,753
Long-term debt 495,416 310,912 379,076
Deferred income taxes 60,442 53,787 51,318
Other long-term liabilities 32,772 28,386 24,001
Shareholders' equity
Common stock-$.01 par value, 800,000,000 shares
authorized, 162,990,520, 158,394,735, and 158,202,170
issued at October 30, 1999, January 30, 1999 and
October 31, 1998, respectively. 1,630 1,584 1,582
Paid-in capital 764,734 504,275 492,498
Retained earnings 794,486 656,920 562,858
------------- ------------- -------------
Total shareholders' equity 1,560,850 1,162,779 1,056,938
------------- ------------- -------------
Total liabilities and shareholders' equity $2,793,242 $1,936,095 $1,930,086
============= ============= =============
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
3
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
3 Months 3 Months 9 Months 9 Months
(13 Weeks) (13 Weeks) (39 Weeks) (39 Weeks)
Ended Ended Ended Ended
October 30, October 31, October 30, October 31,
1999 1998 1999 1998
-------------------------------------------------------------------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $1,099,852 $888,897 $2,949,611 $2,392,215
Cost of merchandise sold 724,193 589,275 1,935,520 1,582,547
-------------- -------------- ------------- --------------
Gross margin 375,659 299,622 1,014,091 809,668
Operating expenses:
Selling, general, and administrative 246,751 202,156 681,653 565,280
Depreciation and amortization 22,060 16,839 60,382 47,483
Goodwill amortization 1,300 1,300 3,900 3,900
Preopening expenses 11,033 8,049 24,088 15,591
-------------- -------------- ------------- --------------
Operating income 94,515 71,278 244,068 177,414
Interest expense, net 8,033 5,367 19,653 15,627
-------------- -------------- ------------- --------------
Income before income taxes 86,482 65,911 224,415 161,787
Provision for income taxes 33,468 25,903 86,849 63,583
-------------- -------------- ------------- --------------
Net income $ 53,014 $ 40,008 $ 137,566 $ 98,204
============== ============== ============= ==============
Earnings per share:
Basic
Net income $ 0.33 $ 0.25 $ 0.85 $ 0.62
Average number of shares 162,953 158,132 162,073 158,007
Diluted
Net income $ 0.32 $ 0.25 $ 0.82 $ 0.60
Average number of shares 167,675 162,723 166,842 162,492
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
---------------------------------- Paid-In Retained
Shares Amount Capital Earnings Total
---------------- --------------- --------------- ---------------- ---------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Balance at January 30, 1999 158,395 $1,584 $504,275 $656,920 $1,162,779
Issuance of common shares 2,800 28 199,598 - 199,626
Exercise of stock options 1,796 18 15,955 - 15,973
Income tax benefit from stock options - - 44,906 - 44,906
Net income - - - 137,566 137,566
---------------- --------------- --------------- ---------------- ---------------
Balance at October 30, 1999 162,991 $1,630 $764,734 $794,486 $1,560,850
================ =============== =============== ================ ===============
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
5
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
9 Months 9 Months
(39 Weeks) (39 Weeks)
Ended Ended
October 30, 1999 October 31, 1998
--------------------------------------------
(In thousands)
<S> <C> <C>
Operating activities
Net income $ 137,566 $ 98,204
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 64,501 51,532
Deferred income taxes 4,618 6,253
Other noncash charges 2,291 1,573
Changes in operating assets and liabilities:
Accounts receivable (21,009) 116,158
Merchandise inventories (393,603) (316,548)
Other current assets (5,110) 79
Accounts payable 253,087 165,091
Accrued and other long-term liabilities 23,172 (4,677)
Income taxes (18,504) (25,341)
------------------ ------------------
Net cash provided by operating activities 47,009 92,324
Investing activities
Acquisition of property and equipment
and favorable lease rights, net (483,843) (183,784)
Proceeds from sale of assets 4,350 1,292
Sale (purchase) of short-term investments, net 6,736 (15,000)
Other (14,220) (9,562)
------------------ ------------------
Net cash used in investing activities (486,977) (207,054)
Financing activities
Net borrowings (repayments) under credit facilities (1,600) 69,500
Proceeds from debt offering, net 197,258 -
Net repayments of other long-term debt (1,147) (126)
Payment of financing fees on debt (1,840) -
Net proceeds from issuance of common shares 260,505 3,952
------------------ ------------------
Net cash provided by financing activities 453,176 73,326
------------------ ------------------
Net increase (decrease) in cash and cash equivalents 13,208 (41,404)
Cash and cash equivalents at beginning of period 2,858 44,161
------------------ ------------------
Cash and cash equivalents at end of period $ 16,066 $ 2,757
================== ==================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
6
<PAGE>
KOHL'S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. Basis of Presentation
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for fiscal year end financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Company's Form 10-K (Commission File No. 1-
11084) filed with the Securities and Exchange Commission.
Shareholders' equity, share and per share amounts for all periods presented
have been adjusted for the 2 for 1 stock split declared by the Company's Board
of Directors on March 9, 1998, effected in the form of a stock dividend.
Certain reclassifications have been made to the prior year financial
statements to conform to the fiscal 1999 presentation.
2. Merchandise Inventories
The Company uses the last-in, first out (LIFO) method of accounting for
merchandise inventory because it results in a better matching of cost and
revenues. The following information is provided to show the effects of the LIFO
provision on the quarter, as well as to provide users with the information to
compare to other companies not on LIFO.
<TABLE>
<CAPTION>
LIFO Expense
------------ 9 Months Ended
Quarter October 30, 1999 October 31, 1998
------- ---------------- ----------------
(In Thousands)
<S> <C> <C>
First $1,363 $1,861
Second 1,409 1,896
Third 1,651 1,900
------ ------
Total $4,423 $5,657
</TABLE>
Inventories would have been $6,344,000, $1,921,000 and $10,440,000 higher
at October 30, 1999, January 30, 1999 and October 31, 1998, respectively if they
had been valued using the first-in, first-out (FIFO) method.
-7-
<PAGE>
3. Contingencies
The Company is involved in various legal matters arising in the normal
course of business. In the opinion of management, the outcome of such
proceedings and litigation will not have a material adverse impact on the
Company's financial position or results of operations.
4. Net Income Per Share
The numerator for the calculation of basic and diluted net income per share
is net income. The denominator is summarized as follows (in thousands):
<TABLE>
<CAPTION>
3 Months Ended 9 Months Ended
October 30, October 31, October 30, October 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Denominator for basic
earnings per share
-weighted average
shares 162,953 158,132 162,073 158,007
Employee stock options 4,722 4,591 4,769 4,485
------- ------- ------- -------
Denominator for diluted
earnings per share 167,675 162,723 166,842 162,492
======= ======= ======= =======
</TABLE>
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
----------------------------------------------
THREE MONTHS AND NINE MONTHS ENDED October 30, 1999
---------------------------------------------------
Results of Operations
- ---------------------
At October 30, 1999, the Company operated 257 stores compared with 214
stores at the same time last year. During the quarter, the Company opened 26 new
stores and relocated one store. The new stores opened included the following: 6
in the St. Louis, MO market, 11 in the Dallas/Ft. Worth, TX market, stores in
Hickory, NC, and Lansing, MI, and additional stores in the Richmond, VA;
Washington, D.C.; Harrisburg, PA; Chicago, IL; Minneapolis, MN; Grand Rapids, MI
and Denver, CO markets. On November 5th, the Company opened two additional
stores in the Dallas/Ft. Worth, TX market, increasing the total number of new
store openings for 1999 to 46. To support the expansion in the St. Louis, Denver
and Dallas/Ft. Worth markets, the Company will open a distribution center in
Blue Springs, MO in December, 1999.
The Company plans to open 55-60 new stores in the year 2000. Approximately
38 are planned to open in the first half of the year: 32 stores in New York, New
Jersey and Connecticut previously operated by Caldor and additional stores in
the Dallas/Ft. Worth, TX, St. Louis, MO, Baltimore, MD and Rochester, MN
markets.
Net sales increased $211.0 million or 23.7% to $1,099.9 million for the
three months ended October 30, 1999 from $888.9 million for the three months
ended October 31, 1998. Of the increase, $152.2 million is attributable to the
inclusion of 17 new stores opened in 1998 and 44 new stores opened in 1999. The
remaining $58.8 million is attributable to comparable store sales growth of
6.9%.
Net sales increased $557.4 million or 23.3% to $2,949.6 million for the
nine months ended October 30, 1999 from $2,392.2 million for the nine months
ended October 31, 1998. Of the increase, $365.9 million is attributable to the
inclusion of 32 new stores opened in 1998 and 44 new stores opened in 1999. The
remaining $191.5 million is attributable to comparable stores sales growth of
8.6%.
Gross margin for the three months ended October 30, 1999 was 34.2% compared
to 33.7% for the three months ended October 31, 1998. Gross margin for the nine
months ended October 30, 1999 was 34.4% compared to 33.8% for the nine months
ended October 31, 1998. These increases are primarily attributable to a change
in merchandise mix and improvements related to inventory management.
-9-
<PAGE>
Effective January 30, 1999, the Company implemented SOP 98-5, "Reporting on
the Costs of Start-Up Activities", which requires preopening costs to be
expensed as incurred. For the 46 new stores opened during fiscal 1999,
approximately $1 million in preopening costs was expensed in fiscal 1998 and
$23.5 million was expensed during the nine months ended October 30, 1999 for a
total average cost per store of $0.5 million. In addition, the Company incurred
approximately $0.6 million in preopening costs for stores to be opened in fiscal
2000. The expenses relate to the cost associated with new store openings,
including advertising, hiring and training costs for new employees, and
processing and transporting initial merchandise.
Operating income for the three months ended October 30, 1999, increased
$23.2 million or 32.6% over the three months ended October 31, 1998. Operating
income for the nine months ended October 30, 1999 increased $66.7 million or
37.6% over the nine months ended October 31, 1998. These increases resulted from
increased sales, improved gross margin and the Company's ability to leverage its
selling, general and administrative expenses as net sales increased. Selling,
general and administrative expenses declined to 22.4% of net sales for the three
months ended October 30, 1999 from 22.7% of net sales for the three months ended
October 31, 1998. Selling, general and administrative expenses declined to 23.1%
of net sales for the nine months ended October 30, 1999 from 23.6% of the net
sales for the nine months ended October 31, 1998.
Net interest expense for the three months ended October 30, 1999 increased
$2.7 million from the three months ended October 31, 1998. Net interest expense
for the nine months ended October 30, 1999 increased $4.0 million from the nine
months ended October 31, 1998. The increase was primarily attributed to the $200
million 7.25% unsecured debentures issued in June 1999.
For the three months ended October 30, 1999, net income increased 32.5% to
$53.0 million from $40.0 million in the three months ended October 31, 1998.
Earnings were $.32 per diluted share for the three months ended October 30, 1999
compared to $.25 per diluted share for the three months ended October 31, 1998.
Net income for the nine months ended October 30, 1999 increased 40.1% to $137.6
million or $.82 per diluted share from $98.2 million or $.60 per diluted share
in the nine months ended October 31, 1998.
-10-
<PAGE>
Seasonality & Inflation
- -----------------------
The Company's business, like that of most retailers, is subject to seasonal
influences, with the major portion of sales and income realized during the last
half of each fiscal year, which includes the back-to-school and holiday seasons.
Approximately 17% and 30% of sales occur during the back-to-school and holiday
seasons, respectively. Because of the seasonality of the Company's business,
results for any quarter are not necessarily indicative of the results that may
be achieved for a full fiscal year. In addition, quarterly results of
operations depend significantly upon the timing and amount of revenues and costs
associated with the opening of new stores.
The Company does not believe that inflation has had a material effect on
the results during the periods presented. However, there can be no assurance
that the Company's business will not be affected in the future.
Impact of Year 2000
- -------------------
The Company currently has a Year 2000 Readiness Plan implemented. Detailed
in the plan are compliance definitions and testing guidelines for in-house
developed applications and computer hardware platforms. The plan defines a
methodology for assessing in-house developed applications and provides a means
for documentation. Team members and their responsibilities are defined
including senior executives that participate on the Year 2000 steering
committee. The plan includes three phases to address the Year 2000 issue and a
status of these key milestones is summarized below:
Year 2000 Readiness Plan Phases Current Status
- -------------------------------- --------------
Assessment Complete
Remediation Complete
Verification
. Replacement code systems Complete
. Packaged financial systems Complete
. Non-IS systems (including Complete
merchandise vendor EDI
transactions)
. Contingency Planning Complete
The phases of the Year 2000 Readiness Plan are defined below:
. The Assessment phase involved the inventory of all in-house developed
applications, purchased software and hardware, merchandise vendors, non-IT
systems, utilities and service providers. The Assessment phase also
included developing a plan for addressing each item and/or vendor to ensure
Year 2000 compliance.
-11-
<PAGE>
. The Remediation phase involved implementing the changes required to reach
compliance and unit testing. This included correspondence with vendors that
have products or services that impact the Company's ability to continue
normal business operations.
. The Verification phase was system testing the changes in similar
environments. This included testing with vendors and service provider
organizations.
. The Contingency Planning Phase was undertaken to prepare for potential Year
2000 disruptions. This phase involved developing and implementing Company
wide initiatives in order to effectively respond to Year 2000 disruptions.
In that regard, the Company continues to refine its contingency plans and
is enhancing and adding to the plans for each business area. A plan for the
night of December 31, 1999 and days to follow has been developed. The
staffing portion of the plan includes on-site coverage by the Company's
associates.
The Company had formal communications with all significant suppliers
to determine the extent to which the Company's interface systems are vulnerable
to those parties' failure to remediate their own Year 2000 issues. Depending on
the circumstances, formal certifications of Year 2000 compliance have been
requested and received. The Company has no knowledge of any primary or critical
supplier with potential Year 2000 issues that may have a material adverse effect
on the Company's performance.
The total cost of the Year 2000 project was $8.4 million and was
funded through operating cash flows. Of the total project cost, $7.1 million was
attributable to the purchase of new software and hardware and related
development costs that was capitalized. The remaining $1.3 million of
programming and testing costs was expensed as incurred and did not have a
material effect on the results of the operations. Of the capitalized portion,
approximately $5 million was for the purchase and installation of new financial
systems. The new financial systems were previously planned projects that support
the Company's growth, provide significant business enablement and eliminate a
substantial Year 2000 effort.
The Company believes that Year 2000 issues will not have a material
adverse impact on the Company's performance. However, there can be no guarantee
that Year 2000 issues will not impact the Company's business due to the
Company's reliance on certain third parties to remediate their own Year 2000
issues and the Company's ability to locate and correct all relevant computer
codes should a Year 2000 issue arise.
-12-
<PAGE>
Financial Condition and Liquidity
- ---------------------------------
The Company's primary ongoing cash requirements are for inventory
purchases, capital expenditures in connection with the Company's expansion and
remodeling programs and pre-opening expenses. The Company's primary sources of
funds for its business activities are cash flow from operations, sales of its
proprietary accounts receivable, borrowings under its revolving credit facility
and short-term trade credit. Short-term trade credit, in the form of extended
payment terms for inventory purchases or third party factor financing,
represents a significant source of financing for merchandise inventories. The
Company's working capital and inventory levels typically build throughout the
fall, peaking during the holiday selling season.
At October 30, 1999, the Company's merchandise inventories had increased
$393.6 million over the January 30, 1999 balance and $178.6 million over the
October 31, 1998 balance. These increases reflect the purchase of fall
inventory as well as inventory for new stores. The Company's working capital
increased to $723.9 million at October 30, 1999 from $559.2 million at January
30, 1999 and increased from $566.6 million at October 31, 1998. Of the $157.3
million increase from October 31, 1998, $168.3 million is attributable to higher
credit card receivables as the Company sold a lower percentage of receivables.
The remaining variance was primarily the result of higher merchandise inventory
levels required to support existing stores and incremental new store locations
offset in part by increased accounts payable.
Cash provided by operating activities was $47.0 million for the nine months
ended October 30, 1999 compared to $92.3 million for the nine months ended
October 31, 1998. Excluding changes in operating assets and liabilities, cash
provided by operating activities was $209.0 million for the nine months ended
October 30, 1999 compared to $157.6 million for the nine months ended October
31, 1998.
Capital expenditures for the nine months ended October 30, 1999 were $483.8
million compared to $183.8 million for the same period a year ago. The increase
in expenditures in 1999 is primarily attributable to the March 1999 acquisition
of the rights to occupy 33 stores previously operated by Caldor Corporation and
the related expenditures to renovate and refixture these locations. The
remaining increase is attributed to the Company's new store spending and the
construction of a fourth distribution center. Total capital expenditures for
fiscal 1999 are currently expected to range between $575-$600 million. The
actual amount of the Company's future annual capital expenditures will depend
primarily on the number of new stores opened, whether such stores are owned or
leased by the Company and the number of existing stores remodeled or
refurbished.
-13-
<PAGE>
To fund the renovation and refixturing of the Caldor stores, the Company
issued 2,800,000 shares of its common stock to the public in March 1999 for net
proceeds of approximately $200 million.
In June 1999, the Company issued $200 million redeemable 7.25% unsecured
debentures. The debentures mature on June 1, 2029. The proceeds are being used
for general corporate purposes and continued store growth.
The Company anticipates that it will be able to satisfy its current
operating needs, planned capital expenditures and debt service requirements with
current working capital, cash flows from operations, seasonal borrowings under
its $300 million revolving credit facility, short-term trade credit and other
sources of financing.
Information in this document contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995, such as
statements relating to debt service requirements and planned capital
expenditures. Forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects", "may", "will",
"should" or "anticipates" or the negative thereof or other variations thereon.
No assurance can be given that the future results covered by the forward-looking
statements will be achieved.
-14-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
3.1 Bylaws of the Company, as amended.
12.1 Statement regarding calculation of ratio of earnings to
fixed charges.
27.1 Financial Data Schedule - Article 5 of Regulation S-X, nine
months ended October 30, 1999.
27.2 Financial Data Schedule - Article 5 of Regulation S-X, nine
months ended October 31, 1998 (restated).
b) Reports on Form 8-K
There were no reports on Form 8-K filed for three months ended
October 30, 1999.
-15-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Kohl's Corporation
(Registrant)
Date: December 14, 1999 /s/ R. Lawrence Montgomery
----------------------------
R. Lawrence Montgomery
Vice Chairman -
Chief Executive Officer
Date: December 14, 1999 /s/ Arlene Meier
----------------------------
Arlene Meier
Executive Vice President - Finance
Chief Financial Officer
-16-
<PAGE>
Exhibit 3.1
BYLAWS
OF
KOHL'S CORPORATION
TABLE OF CONTENTS
ARTICLE I.
OFFICES; RECORDS
Page
----
1.01 Principal and Business Offices................................... 1
1.02 Registered Office................................................ 1
1.03 Corporate Records................................................ 1
ARTICLE II.
SHAREHOLDERS
2.01 Annual Meeting................................................... 1
2.02 Special Meetings................................................. 2
2.03 Place of Meeting................................................. 5
2.04 Notices to Shareholders.......................................... 5
(a) Required Notice............................................. 5
(b) Adjourned Meeting........................................... 5
(c) Waiver of Notice............................................ 5
(d) Contents of Notice.......................................... 5
(e) Fundamental Transactions.................................... 5
2.05 Fixing of Record Date............................................ 5
(a) Meetings..................................................... 5
(b) Distributions................................................ 6
2.06 Shareholder List................................................. 6
2.07 Quorum........................................................... 6
2.08 Conduct of Meetings.............................................. 6
2.09 Proxies.......................................................... 6
2.10 Voting of Shares................................................. 6
2.11 No Nominee Procedures............................................ 7
ARTICLE III.
BOARD OF DIRECTORS
3.01 General Powers................................................... 7
3.02 Resignations and Qualifications.................................. 7
3.03 Regular Meetings................................................. 7
3.04 Special Meetings................................................. 7
3.05 Meetings By Telephone or Other Communication Technology.......... 7
3.06 Notice of Meetings............................................... 7
3.07 Quorum........................................................... 8
3.08 Manner of Acting................................................. 8
3.09 Conduct of Meetings.............................................. 8
i
<PAGE>
3.10 Vacancies........................................................... 8
3.11 Compensation........................................................ 8
3.12 Presumption of Assent............................................... 8
3.13 Committees.......................................................... 8
ARTICLE IV.
OFFICERS
4.01 Appointment.......................................................... 9
4.02 Resignation and Removal.............................................. 9
4.03 Chairman of the Board................................................ 9
4.04 Vice Chairman........................................................ 9
4.05 Chief Executive Officer.............................................. 9
4.06 President............................................................ 9
4.07 Chief Operating Officer.............................................. 9
4.08 Shared Duties of Chairman of the Board, Vice Chairman,
Chief Executive Officer and President............................... 10
4.09 Vice Presidents..................................................... 10
4.10 Secretary........................................................... 10
4.11 Treasurer........................................................... 10
4.12 Assistants and Acting Officers...................................... 10
4.13 Salaries............................................................ 11
ARTICLE V.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
5.01 Certificates for Shares............................................. 11
5.02 Signature by Former Officer, Transfer Agent or Registrar............ 11
5.03 Transfer of Shares.................................................. 11
5.04 Restrictions on Transfer............................................ 11
5.05 Lost, Destroyed or Stolen Certificates.............................. 11
5.06 Consideration for Shares............................................ 11
5.07 Stock Regulations................................................... 11
ARTICLE VI.
WAIVER OF NOTICE
6.01 Shareholder Written Waiver.......................................... 12
6.02 Shareholder Waiver by Attendance.................................... 12
6.03 Director Written Waiver............................................. 12
6.04 Director Waiver by Attendance....................................... 12
ARTICLE VII.
ACTION WITHOUT MEETINGS
7.01 Director Action Without Meeting..................................... 12
ARTICLE VIII.
INDEMNIFICATION
8.01 Indemnification for Successful Defense.............................. 12
8.02 Other Indemnification............................................... 12
8.03 Written Request..................................................... 13
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8.04 Nonduplication...................................................... 13
8.05 Determination of Right to Indemnification........................... 13
8.06 Advance of Expenses................................................. 14
8.07 Nonexclusivity...................................................... 14
8.08 Court-Ordered Indemnification....................................... 15
8.09 Indemnification and Allowance of Expenses of Employees and Agents... 15
8.10 Insurance........................................................... 15
8.11 Securities Law Claims............................................... 15
8.12 Liberal Construction................................................ 15
8.13 Definitions Applicable to this Article.............................. 15
ARTICLE IX.
SEAL
9.01 Seal................................................................ 16
ARTICLE X.
AMENDMENTS
10.01 By Shareholders..................................................... 16
10.02 By Directors........................................................ 16
10.03 Implied Amendments.................................................. 17
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BYLAWS
OF
KOHL'S CORPORATION
ARTICLE I.
OFFICES; RECORDS
1.01. Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation required
by the Wisconsin Business Corporation Law to be maintained in the State of
Wisconsin may be, but need not be, identical with the principal office in the
State of Wisconsin. The address of the registered office may be changed from
time to time by any officer or by the registered agent. The office of the
registered agent of the corporation shall be identical to such registered
office.
1.03. Corporate Records. The following documents and records shall be kept
at the corporation's principal office or at such other reasonable location as
may be specified by the corporation:
(a) Minutes of shareholders' and Board of Directors' meetings and
any written notices thereof.
(b) Records of actions taken by the shareholders or directors
without a meeting.
(c) Records of actions taken by committees of the Board of
Directors.
(d) Accounting records.
(e) Records of its shareholders.
(f) Current Bylaws.
(g) Written waivers of notice by shareholders or directors (if
any).
(h) Written consents by shareholders or directors for actions
without a meeting (if any).
(i) Voting trust agreements (if any).
(j) Stock transfer agreements to which the corporation is a party
or of which it has notice (if any).
ARTICLE II.
SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders shall be held
on such date and at such time as may be fixed by or under the authority of the
Board of Directors, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the
election of directors is not held on the day fixed as herein provided for any
annual meeting of the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a meeting of the shareholders
as soon thereafter as may be convenient.
At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be (a) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors; (b) otherwise brought before the meeting by or at the direction of
the Board of Directors; or (c) brought before the meeting by a shareholder
pursuant to this Section 2.01. Any business brought by a shareholder must be a
proper subject for action by shareholders under Wisconsin law.
Only persons who are nominated in accordance with the procedures set forth
in this Section 2.01 shall be eligible for election as directors, except as may
otherwise be provided by the terms of the corporation's Articles of
Incorporation with respect to the rights of holders of any series of Preferred
Stock to elect directors. Nominations of persons for election to the Board of
Directors of the corporation may be made at a meeting of shareholders by or at
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the direction of the Board of Directors or by any shareholder of the corporation
entitled to vote for the election of directors at the meeting who complies with
the procedures set forth in this bylaw.
For business to be properly brought before an annual meeting by a
shareholder, and for nominations by shareholders for the election of directors,
the shareholder must have given timely notice thereof in writing to the
Secretary of the corporation. All notices given pursuant to this Section shall
be in writing and must be received by the Secretary of the corporation not later
than 120 days prior to the anniversary date of the annual meeting of
shareholders in the immediately preceding year; provided, however, that if
during the prior year the corporation did not hold an annual meeting or if the
date of the annual meeting has changed more than 30 days from the prior year,
then notice must be received by the later of (i) the date 90 days prior to the
date of the annual meeting for which such proposal or nomination is made and
(ii) the date 10 Business Days after the first public announcement of the date
of the annual meeting for which such proposal or nomination is made.
Notwithstanding the foregoing, that to be timely for the 2000 Annual Meeting, a
shareholder's notice must be received by the Secretary of the Corporation not
later than February 25, 2000. All such notices shall include (i) a
representation that the person sending the notice is a shareholder of record and
will remain such through the Meeting Record Date (defined in Section 2.05); (ii)
the name and address, as they appear on the corporation's books, of such
shareholder and the beneficial owner or owners, if any, on whose behalf the
proposal is made; (iii) the class and number of the corporation's shares which
are owned beneficially and of record by such shareholder and any such beneficial
owner or owners; and (iv) a representation that such shareholder intends to
appear in person or by proxy at such meeting to make the nomination or move the
consideration of other business set forth in the notice. Notice as to proposals
with respect to any business to be brought before the meeting other than
election of directors shall also set forth the text of the proposal and may set
forth any statement in support thereof that the shareholder wishes to bring to
the attention of the corporation, and shall specify any material interest of
such shareholder in such business. The person providing the notice shall also be
required to provide such further information as may be requested by the
corporation to comply with federal securities laws, rules and regulations.
Notice as to nominations shall set forth the name(s) of the nominee(s), address
and principal occupation or employment of each, a description of all
arrangements or understandings between the shareholder and each nominee and any
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder, the written consent
of each nominee to serve as a director if so elected and such other information
as would be required to be included in a proxy statement soliciting proxies for
the election of the nominee(s) of such shareholder.
The chairman of the meeting shall refuse to acknowledge the nomination of
any person or the consideration of any business not made in compliance with the
foregoing procedures.
For purposes of these Bylaws, "public announcement" shall mean disclosure
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 (the "Exchange Act"), or in a press release reported by the Dow
Jones News Service, Reuters Economic Services, Associated Press or comparable
national news service. Notwithstanding the foregoing provisions of this Section
2.01, a shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder with respect
to the matters set forth in this Section 2.01. Nothing in this Section 2.01
shall be deemed to expand or limit the corporation's obligations under Rule 14a-
8 under the Exchange Act.
2.02. Special Meetings. (a) A special meeting of shareholders (a "Special
Meeting") may be called only by the Board of Directors pursuant to a resolution
adopted by the Board of Directors and shall be called by the Board of Directors
upon the demand, in accordance with this Section 2.02, of the holders of record
of shares representing at least 10% of all the votes entitled to be cast on any
issue proposed to be considered at the Special Meeting.
(b) In order that the corporation may determine the shareholders entitled
to demand a Special Meeting, the Board of Directors may fix a record date to
determine the shareholders entitled to make such a demand (the "Demand Record
Date"). The Demand Record Date shall not precede the date upon which the
resolution fixing the Demand Record Date is adopted by the Board of Directors
and shall not be more than 10 days after the date upon which the resolution
fixing the Demand Record Date is adopted by the Board of Directors. Any
shareholder of record seeking to have shareholders demand a Special Meeting
shall, by sending written notice to the Secretary of the corporation by
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hand or by certified or registered mail, return receipt requested, request the
Board of Directors to fix a Demand Record Date. The Board of Directors shall
promptly, but in all events within 30 days after the date on which a valid
request to fix a Demand Record Date is received, adopt a resolution fixing the
Demand Record Date and shall make a public announcement of such Demand Record
Date. If no Demand Record Date has been fixed by the Board of Directors within
30 days after the date on which such request is received by the Secretary, the
Demand Record Date shall be the 30th day after the first day on which a valid
written request to set a Demand Record Date is received by the Secretary. To be
valid, such written request shall set forth the purpose or purposes for which
the Special Meeting is to be held, shall be signed by one or more shareholders
of record (or their duly authorized proxies or other representatives), shall
bear the date of signature of each such shareholder (or proxy or other
representative) and shall set forth all information about each such shareholder
and about the beneficial owner or owners, if any, on whose behalf the request is
made that would be required to be set forth in a shareholder's notice described
in Section 2.01. Any business proposed to be brought before the meeting must be
a subject for which a special meeting must be called under Wisconsin law upon
the demand of a 10% shareholder.
(c) In order for a shareholder or shareholders to demand a Special
Meeting, a written demand or demands for a Special Meeting by the holders of
record as of the Demand Record Date of shares representing at least 10% of all
the votes entitled to be cast on any issue proposed to be considered at the
Special Meeting must be delivered to the corporation. To be valid, each written
demand by a shareholder for a Special Meeting shall set forth the specific
purpose or purposes for which the Special Meeting is to be held (which purpose
or purposes shall be limited to the purpose or purposes set forth in the written
request to set a Demand Record Date received by the corporation pursuant to
paragraph (b) of this Section 2.02), shall be signed by one or more persons who
as of the Demand Record Date are shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of signature
of each such shareholder (or proxy or other representative), shall set forth the
name and address, as they appear in the corporation's books, of each shareholder
signing such demand and the class or series and number of shares of the
corporation which are owned of record and beneficially by each such shareholder,
shall be sent to the Secretary by hand or by certified or registered mail,
return receipt requested, and shall be received by the Secretary not before and
within 70 days after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting upon
shareholder demand unless, in addition to the documents required by paragraph
(c) of this Section 2.02, the Secretary receives a written agreement signed by
each Soliciting Shareholder (as defined herein), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the corporation's
costs of holding the Special Meeting, including the costs of preparing and
mailing proxy materials for the corporation's own solicitation, provided that if
each of the resolutions introduced by any Soliciting Shareholder at such meeting
is adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as director at such meeting is elected, then
the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the meanings set
forth below:
(i) "Affiliate" shall have the meaning assigned to such term in Rule
12b-2 promulgated under the Exchange Act.
(ii) "Participant" shall have the meaning assigned to such term in Item
4 of Schedule 14A promulgated under the Exchange Act.
(iii) "Person" shall mean any individual, firm, corporation, partnership,
joint venture, association, trust, unincorporated organization or other
entity.
(iv) "Proxy" shall have the meaning assigned to such term in Rule 14a-1
promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such term in Rule
14a-1 promulgated under the Exchange Act.
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(vi) "Soliciting Shareholder" shall mean, with respect to any Special
Meeting demanded by a shareholder or shareholders, any of the following
Persons:
(A) if the number of shareholders signing the demand or demands
for a meeting delivered to the corporation pursuant to paragraph (c)
of this Section 2.02 is 10 or fewer, each shareholder signing any such
demand;
(B) if the number of shareholders signing the demand or demands
for a meeting delivered to the corporation pursuant to paragraph (c)
of this Section 2.02 is more than 10, each Person who is or intends to
be a Participant in a Solicitation in connection with the Special
Meeting (other than a Solicitation of Proxies on behalf of the
corporation); or
(C) any Affiliate of a Soliciting Shareholder, if a majority of
the directors then in office determine, in good faith, that such
Affiliate should be required to sign the written notice described in
paragraph (c) of this Section 2.02 and/or the written agreement
described in this paragraph (d) in order to prevent the purposes of
this Section 2.02 from being evaded.
(e) Except as provided in the following sentence, any Special Meeting
shall be held at such hour and day as may be designated by the Board of
Directors. In the case of any Special Meeting called by the Board of Directors
upon the demand of shareholders (a "Demand Special Meeting"), the date of the
Demand Special Meeting shall be not more than 70 days after the Meeting Record
Date (as defined in Section 2.05 of these Bylaws); provided that in the event
that the directors then in office fail to designate an hour and date for a
Demand Special Meeting within 30 days after the date that valid written demands
for such meeting by the holders of record as of the Demand Record Date of shares
representing at least 10% of all the votes entitled to be cast on any issue
proposed to be considered at the Special Meeting, as well as the agreement
described in paragraph (d), are delivered to the corporation (the "Delivery
Date"), then such meeting shall be held at 2:00 p.m. (local time) on the 100th
day after the Delivery Date or, if such 100th day is not a Business Day (as
defined below), on the first preceding Business Day. In fixing a meeting date
for any Special Meeting, the Board of Directors may consider such factors as it
deems relevant within the good faith exercise of its business judgment,
including, without limitation, the nature of the action proposed to be taken,
the facts and circumstances surrounding any demand for such meeting, and any
plan of the Board of Directors to call an Annual Meeting or a Special Meeting.
(f) The corporation may engage independent inspectors of elections to act
as an agent of the corporation for the purpose of promptly performing a
ministerial review of the validity of any purported written demand or demands
for a Special Meeting received by the Secretary. For the purpose of permitting
the inspectors to perform such review, no purported demand shall be deemed to
have been delivered to the corporation until the earlier of (i) 5 Business Days
following receipt by the Secretary of such purported demand and (ii) such date
as the independent inspectors certify to the corporation that the valid demands
received by the Secretary represent at least 10% of all the votes entitled to be
cast on each issue proposed to be considered at the Special Meeting. Nothing
contained in this paragraph shall in any way be construed to limit the ability
of the Board of Directors or any shareholder to contest the validity of any
demand, whether during or after such 5 Business Day period, or to take any other
action (including, without limitation, the commencement, prosecution or defense
of any litigation with respect thereto).
(g) Only business within the purpose described in the meeting notice given
in accordance with Section 2.04 of these Bylaws may be conducted at a Special
Meeting.
(h) Only such business shall be conducted at a Special Meeting as shall
have been brought before such meeting in accordance with the procedures set
forth in this Section 2.02. If the chairman of the meeting shall determine that
any business proposed to be brought before the Special Meeting was not properly
brought in accordance with the procedures set forth in this Section 2.02, then
the chairman shall so declare to the meeting and such business shall not be
considered.
(i) Notwithstanding the foregoing provisions of this Section 2.02, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations promulgated thereunder with respect to the
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matters set forth in this Section 2.02. Nothing in this Section 2.02 shall be
deemed to expand or limit the corporation's obligations under Rule 14a-8 under
the Exchange Act.
(j) For purposes of these Bylaws, "Business Day" shall mean any day other
than a Saturday, a Sunday or a day on which banking institutions in the State of
Wisconsin are authorized or obligated by law or executive order to close.
2.03. Place of Meeting. The Board of Directors may designate any place,
either within or without the State of Wisconsin, as the place of meeting for any
annual meeting or any special meeting. If no designation is made, the place of
meeting shall be the principal office of the corporation. Any meeting may be
adjourned to reconvene at any place designated by vote of the Board of
Directors.
2.04. Notices to Shareholders.
(a) Required Notice. The corporation shall provide written notice stating
the place, day and hour of the meeting and, in case of a Special Meeting, the
purpose or purposes for which the meeting is called, not less than ten (10) days
nor more than seventy (70) days before the date of the meeting (unless a
different time is provided by law or the Articles of Incorporation), to each
shareholder entitled to vote at such meeting or, for the fundamental
transactions described in subsections (e)(l) to (4) below (for which the
Wisconsin Business Corporation Law requires that notice be given to shareholders
not entitled to vote), to all shareholders. If mailed, such notice is effective
when deposited in the United States mail, and shall be addressed to the
shareholder's address shown in the current record of shareholders of the
corporation, with postage thereon prepaid. At least twenty (20) days' notice
shall be provided if the purpose, or one of the purposes, of the meeting is to
consider a plan of merger or share exchange for which shareholder approval is
required by law, or the sale, lease, exchange or other disposition of all or
substantially all of the corporation's property, with or without goodwill,
otherwise than in the usual and regular course of business.
(b) Adjourned Meeting. Except as provided in the next sentence, if any
shareholder meeting is adjourned to a different date, time, or place, notice
need not be given of the new date, time, and place, if the new date, time, and
place is announced at the meeting before adjournment. If a new record date for
the adjourned meeting is or must be fixed, then notice must be given pursuant to
the requirements of paragraph (a) of this Section 2.04, to those persons who are
shareholders as of the new record date.
(c) Waiver of Notice. A shareholder may waive notice in accordance with
Article VI of these Bylaws.
(d) Contents of Notice. The notice of each Special Meeting shall include a
description of the purpose or purposes for which the meeting is called. Except
as otherwise provided in these Bylaws, in the Articles of Incorporation, or in
the Wisconsin Business Corporation Law, the notice of an annual shareholder
meeting need not include a description of the purpose or purposes for which the
meeting is called.
(e) Fundamental Transactions. If a purpose of any shareholder meeting is
to consider either: (1) a proposed amendment to the Articles of Incorporation
(including any restated articles); (2) a plan of merger or share exchange for
which shareholder approval is required by law; (3) the sale, lease, exchange or
other disposition of all or substantially all of the corporation's property,
with or without goodwill, otherwise than in the usual and regular course of
business; (4) the dissolution of the corporation; or (5) the removal of a
director, the notice must so state and in cases (1), (2) and (3) above must be
accompanied by, respectively, a copy or summary of the: (1) proposed articles of
amendment or a copy of the restated articles that identifies any amendment or
other change; (2) proposed plan of merger or share exchange; or (3) proposed
transaction for disposition of all or substantially all of the corporation's
property. If the proposed corporate action creates dissenters' rights, the
notice must state that shareholders and beneficial shareholders are or may be
entitled to assert dissenters' rights, and must be accompanied by a copy of
Sections 180.1301 to 180.1331 of the Wisconsin Business Corporation Law.
2.05. Fixing of Record Date. (a) Meetings. The Board of Directors may fix
in advance a date as the record date for any determination of shareholders
entitled to notice of, and to vote at, a shareholders' meeting, such date in any
case to be not more than seventy (70) days prior to the meeting (the "Meeting
Record Date"). In the case
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of any Demand Special Meeting, (i) the Meeting Record Date shall be not later
than the 30th day after the Delivery Date and (ii) if the Board of Directors
fails to fix the Meeting Record Date within 30 days after the Delivery Date,
then the close of business on such 30th day shall be the Meeting Record Date.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in these Bylaws, such determination shall
be applied to any adjournment thereof unless the Board of Directors fixes a new
record date and except as otherwise required by law. A new record date must be
set if a meeting is adjourned to a date more than 120 days after the date fixed
for the original meeting.
(b) Distributions. The Board may also fix in advance a date as the record
date for determining shareholders entitled to receive a dividend or
distribution. If no record date is fixed for the determination of shareholders
entitled to receive a share dividend or distribution (other than a distribution
involving a purchase, redemption or other acquisition of the corporation's
shares), the close of business on the day on which the resolution of the Board
of Directors is adopted declaring the dividend or distribution shall be the
record date.
2.06. Shareholder List. The officer or agent having charge of the stock
transfer books for shares of the corporation shall, before each meeting of
shareholders, make a complete record of the shareholders entitled to notice of
such meeting, arranged by class or series of shares and showing the address of
and the number of shares held by each shareholder. The shareholder list shall be
available at the meeting and may be inspected by any shareholder or his or her
agent or attorney at any time during the meeting or any adjournment. Any
shareholder or his or her agent or attorney may inspect the shareholder list
beginning two (2) business days after the notice of the meeting is given and
continuing to the date of the meeting, at the corporation's principal office or
at a place identified in the meeting notice in the city where the meeting will
be held and, subject to Section 180.1602(2)(b) 3 to 5 of the Wisconsin Business
Corporation Law, may copy the list, during regular business hours and at his or
her expense, during the period that it is available for inspection hereunder.
The original stock transfer books and nominee certificates on file with the
corporation (if any) shall be prima facie evidence as to who are the
shareholders entitled to inspect the shareholder list or to vote at any meeting
of shareholders. Failure to comply with the requirements of this section shall
not affect the validity of any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the Articles of
Incorporation or in the Wisconsin Business Corporation Law, a majority of the
votes entitled to be cast by shares entitled to vote as a separate voting group
on a matter, represented in person or by proxy, shall constitute a quorum of
that voting group for action on that matter at a meeting of shareholders. Once a
share is represented for any purpose at a meeting, other than for the purpose of
objecting to holding the meeting or transacting business at the meeting, it is
considered present for purposes of determining whether a quorum exists for the
remainder of the meeting and for any adjournment of that meeting unless a new
record date is or must be set for that meeting.
2.08. Conduct of Meetings. The Chairman of the Board or, in his or her
absence, any Officer or Director chosen by the Board of Directors shall call the
meeting of the shareholders to order and shall act as Chairman of the meeting,
and the Secretary shall act as secretary of all meetings of the shareholders,
but, in the absence of the Secretary, the presiding officer may appoint any
other person to act as secretary of the meeting.
2.09. Proxies. At all meetings of shareholders, a shareholder entitled to
vote may vote in person or by proxy appointed in writing by the shareholder or
by his or her duly authorized attorney-in-fact. All proxy appointment forms
shall be filed with the Secretary or other officer or agent of the corporation
authorized to tabulate votes before or at the time of the meeting. Unless the
appointment form conspicuously states that it is irrevocable and the appointment
is coupled with an interest, a proxy appointment may be revoked at any time. The
presence of a shareholder who has filed a 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 expressly provided in the
appointment form. The Board of Directors shall have the power and authority to
make rules that are not inconsistent with the Wisconsin Business Corporation Law
as to the validity and sufficiency of proxy appointments.
2.10. Voting of Shares. Each outstanding share shall be entitled to one
(1) vote on each matter submitted to a vote at a meeting of shareholders, except
to the extent that the voting rights of the shares are enlarged, limited or
denied by the Articles of Incorporation or the Wisconsin Business Corporation
Law. Shares of this corporation
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owned directly or indirectly by another corporation are not entitled to vote if
this corporation owns, directly or indirectly, sufficient shares to elect a
majority of the directors of such other corporation. However, the prior sentence
shall not limit the power of the corporation to vote any shares, including its
own shares, held by it in a fiduciary capacity.
2.11. No Nominee Procedures. The corporation has not established, and
nothing in these Bylaws shall be deemed to establish, any procedure by which a
beneficial owner of the corporation's shares that are registered in the name of
a nominee is recognized by the corporation as the shareholder under Section
180.0723 of the Wisconsin Business Corporation Law.
ARTICLE III.
BOARD OF DIRECTORS
3.01. General Powers. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its Board of Directors.
3.02. Resignations and Qualifications. A director may resign at any time
by delivering a written resignation to the Board of Directors, to the Chairman
of the Board, or to the corporation through the Secretary or otherwise.
Directors need not be residents of the State of Wisconsin or shareholders of the
corporation.
3.03. Regular Meetings. The Board of Directors may provide, by resolution,
the time and place, either within or without the State of Wisconsin, for the
holding of regular meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board or any two (2)
directors. Special meetings of any committee may be called by or at the request
of the foregoing persons or the Chairman of the committee. The persons calling
any special meeting of the Board of Directors or committee may fix any place,
either within or without the State of Wisconsin, as the place for holding any
special meeting called by them, and if no other place is fixed the place of
meeting shall be the principal office of the corporation in the State of
Wisconsin.
3.05. Meetings By Telephone or Other Communication Technology. (a) Any or
all directors may participate in a regular or special meeting or in a committee
meeting of the Board of Directors by, or conduct the meeting through the use of,
telephone or any other means of communication by which either: (i) all
participating directors may simultaneously hear each other during the meeting or
(ii) all communication during the meeting is immediately transmitted to each
participating director, and each participating director is able to immediately
send messages to all other participating directors.
(b) If a meeting will be conducted through the use of any means described
in paragraph (a), all participating directors shall be informed that a meeting
is taking place at which official business may be transacted. A director
participating in a meeting by any means described in paragraph (a) is deemed to
be present in person at the meeting.
3.06. Notice of Meetings. Except as otherwise provided in the Articles of
Incorporation or the Wisconsin Business Corporation Law, notice of the date,
time and place of any special meeting of the Board of Directors and of any
special meeting of a committee of the Board shall be given orally or in writing
to each director or committee member at least by the calendar day prior to the
meeting. The notice need not describe the purpose of the meeting. Notice may be
communicated in person, by telephone, telegraph, facsimile or other form of wire
or wireless communication, or by mail or private carrier. Oral notice is
effective when communicated to the director or to any person answering the
director's business or home telephone, or when left on the director's answering
machine or voice-mail system at home or place of business. Written notice is
effective at the earliest of the following: (a) when received; (b) five days
after its deposit in the U.S. Mail, if mailed postpaid and correctly addressed;
(c) on the date shown on the return receipt, if sent by registered or certified
mail, return receipt requested, and the receipt is signed
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by or on behalf of the addressee; (d) at the time a facsimile transmission is
completed, if sent by facsimile to the director's home or place of business.
3.07. Quorum. Except as otherwise provided by the Wisconsin Business
Corporation Law, a majority of the number of directors specified in accordance
with the Articles of Incorporation shall constitute a quorum of the Board of
Directors. Except as otherwise provided by the Wisconsin Business Corporation
Law, a majority of the number of directors appointed to serve on a committee
shall constitute a quorum of the committee.
3.08. Manner of Acting. Except as otherwise provided by the Wisconsin
Business Corporation Law or the Articles of Incorporation, the affirmative vote
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors or any committee thereof.
3.09. Conduct of Meetings. The Chairman of the Board, or in his or her
absence, any director chosen by the directors present, shall call meetings of
the Board of Directors to order and shall chair the meeting. The Secretary of
the corporation shall act as secretary of all meetings of the Board of
Directors, but in the absence of the Secretary, the presiding officer may
appoint any assistant secretary or any director or other person present to act
as secretary of the meeting.
3.10. Vacancies. Any vacancy occurring in the Board of Directors shall be
filled in the manner provided in the Articles of Incorporation.
3.11. Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may fix the compensation of directors.
3.12. Presumption of Assent. A director who is present and is announced as
present at a meeting of the Board of Directors or a committee thereof at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless otherwise specified in Section 180.0824(4) of the
Wisconsin Business Corporation Law. Such right to dissent or abstain shall not
apply to a director who voted in favor of such action.
3.13. Committees. Unless the Articles of Incorporation otherwise provide,
the Board of Directors, by resolution adopted by the affirmative vote of a
majority of all the directors then in office, may create one (1) or more
committees, each committee to consist of two (2) or more directors as members,
which to the extent provided in the resolution as initially adopted, and as
thereafter supplemented or amended by further resolution adopted by a like vote,
may exercise the authority of the Board of Directors, except that no committee
may: (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 any of its
committees, except that the Board of Directors may provide by resolution that
any vacancies on a committee shall be filled by the affirmative vote of a
majority of the remaining committee members; (d) amend the Articles of
Incorporation; (e) adopt, amend or repeal Bylaws; (f) approve a plan of merger
not requiring shareholder approval; (g) authorize or approve reacquisition of
shares, except according to a formula or method prescribed by the Board of
Directors; 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 within limits prescribed by
the Board of Directors. The Board of Directors may elect one or more of its
members as alternate members of any such committee who may take the place of any
absent member or members at any meeting of such committee, upon request by the
Chairman of the Board or the Chairman of such meeting. Each such committee shall
fix its own rules (consistent with the Wisconsin Business Corporation Law, the
Articles of Incorporation and these Bylaws) governing the conduct of its
activities and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request. Unless otherwise provided by
the Board of Directors in creating a committee, a committee may employ counsel,
accountants and other consultants to assist it in the exercise of authority.
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ARTICLE IV.
OFFICERS
4.01. Appointment. The principal officers may include a Chairman of the
Board, a Vice Chairman, a Chief Executive Officer, a President, a Chief
Operating Officer, a Secretary, a Treasurer and such other officers if any, as
may be deemed necessary by the Board of Directors, each of whom shall be
appointed by the Board of Directors. The officers may also include one or more
Vice Presidents who may be appointed and have such designations as are
determined by or at the direction of the Board of Directors or the Chairman of
the Board, Vice Chairman, Chief Executive Officer, President or Chief Operating
Officer. Any two or more offices may be held by the same person.
4.02. Resignation and Removal. An officer shall hold office until he or
she resigns, dies, is removed hereunder, or a different person is appointed to
the office. An officer may resign at any time by delivering an appropriate
written notice to the corporation. The resignation is effective when the notice
is delivered, unless the notice specifies a later effective date and the
corporation accepts the later effective date. Any officer may be removed by the
Board of Directors with or without cause and notwithstanding the contract
rights, if any, of the person removed. The Chairman of the Board, Vice Chairman,
Chief Executive Officer, President or Chief Operating Officer may also remove
any of the other officers with or without cause and notwithstanding the contract
rights, if any, of the person removed. Except as provided in the preceding
sentence, the resignation or removal is subject to any remedies provided by any
contract between the officer and the corporation or otherwise provided by law.
Appointment shall not of itself create contract rights.
4.03. Chairman of the Board. The Chairman of the Board shall preside at
all annual and special meetings of shareholders and all regular and special
meetings of the Board of Directors, shall advise and counsel with the Chief
Executive Officer and shall be responsible for the administration and management
of the areas of the business and affairs of the corporation assigned to him or
her from time to time by the Board of Directors.
4.04. Vice Chairman. The Vice Chairman shall advise and counsel with the
Chief Executive Officer and shall be responsible for the administration and
management of the areas of the business and affairs of the corporation assigned
to him or her from time to time by the Board of Directors.
4.05. Chief Executive Officer. The Chief Executive Officer shall be the
principal executive officer of the corporation and, subject to the control of
the Board of Directors, shall have general supervision and control of the
business and affairs of the corporation and its officers. The Chief Executive
Officer shall have the authority, subject to such rules as may be prescribed by
the Board of Directors, to appoint such agents and employees of the corporation
as the Chief Executive Officer deems necessary, prescribe their powers, duties
and compensation, and delegate authority to them. Such agents and employees
shall hold offices at the discretion of the Chief Executive Officer. In general,
the Chief Executive Officer shall have all authority and perform all duties
incident to the office of the chief executive officer and such other duties as
may be prescribed by the Board of Directors, Chairman of the Board or Vice
Chairman from time to time.
4.06. President. In the absence of the Chief Executive Officer or in the
event of his death, inability or refusal to act, the President shall perform the
duties of the Chief Executive Officer, and when so acting shall have all the
powers and duties of the Chief Executive Officer. In addition, the President
shall be responsible for the administration and management of the areas of the
business and affairs of the Corporation assigned to him from to time by the
Board of Directors or the Chief Executive Officer.
4.07. Chief Operating Officer The Chief Operating Officer shall be the
chief operating officer of the corporation. He shall supervise the day to day
operations of the corporation's business, manage the administrative and
operating affairs of the corporation, and direct and assign duties to those
officers and agents of the corporation who are engaged in the administrative and
operating affairs of the corporation. He shall have the authority, subject to
such rules, directions or orders as may be prescribed by the Chief Executive
Officer or the Board of Directors, to appoint and terminate the appointment of
such agents and employees of the corporation as he shall deem necessary, to
prescribe their power, duties and compensation and to delegate authority to
them. The Chief Operating Officer shall
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perform such other duties as may be prescribed from time to time by the Chief
Executive Officer or the Board of Directors.
4.08. Shared Duties of Chairman of the Board, Vice Chairman, Chief
Executive Officer, President and Chief Operating Officer. The Chairman of the
Board, Vice Chairman, Chief Executive Officer, President and Chief Operating
Officer are each severally authorized to sign, execute and acknowledge, on
behalf of the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases, reports and all other documents or instruments necessary or
proper to be executed in the course of the corporation's regular business, or
which shall be authorized by resolution of the Board of Directors; and, except
as otherwise provided by law or directed by the Board of Directors, the Chairman
of the Board, Vice Chairman, Chief Executive Officer, President and Chief
Operating Officer may authorize any Vice President or other officer or agent of
the corporation to sign, execute and acknowledge such documents or instruments
in his or her place and stead.
4.09. Vice Presidents. One or more of the Vice Presidents may be
designated as Executive Vice President or Senior Vice President. In the absence
of the President or in the event of his death, inability or refusal to act, the
Vice Presidents in the order designated at the time of their election, shall
perform the duties of the President and when so acting shall have all the powers
of and be subject to all the restrictions upon the President. Any Vice President
may sign with the Secretary or Assistant Secretary certificates for shares of
the corporation. Any Vice President shall have charge of such divisions or
departments of the corporation and perform such other duties and have such
authority as are incident to the office of Vice President or as may be delegated
or assigned from time to time by the Board of Directors, the Chairman of the
Board, the Vice Chairman, the Chief Executive Officer, the President or the
Chief Operating Officer. The execution of any instrument of the corporation by
any Vice President shall be conclusive evidence, as to third parties, of the
Vice President's authority to act and to execute such instrument.
4.10. Secretary. The Secretary shall: (a) keep (or cause to be kept)
regular minutes of all meetings of the shareholders, the Board of Directors and
any committees of the Board of Directors in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation, if any, and see that the
seal of the corporation, if any, is affixed to all documents which are
authorized to be executed on behalf of the corporation under its seal; (d) keep
or arrange for the keeping of a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign certificates for shares of the corporation, the issuance of which shall
have been authorized by resolution of the Board of Directors; (f) have general
charge of the stock transfer books of the corporation; and (g) in general
perform all duties incident to the office of Secretary and have such other
duties and exercise such authority as from time to time may be delegated or
assigned to him or her by the Chairman of the Board, the Vice Chairman, the
Chief Executive Officer, the President, the Chief Operating Officer or the Board
of Directors.
4.11. Treasurer. The Treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation; (b) receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected by the
corporation; and (c) in general perform all of the duties incident to the office
of Treasurer and have such other duties and exercise such other authority as
from time to time may be delegated or assigned to him or her by the Chairman of
the Board, the Vice Chairman, the Chief Executive Officer, the President, the
Chief Operating Officer or the Board of Directors.
4.12. Assistants and Acting Officers. The Board of Directors and the Chief
Executive Officer, President and Chief Operating Officer shall each 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 such officer to act personally,
and such assistant or acting officer or other agent so appointed shall have the
power to perform all the duties of the office to which that person is so
appointed to be assistant, or as to which he or she is so appointed to act,
except as such power may be otherwise defined or restricted by the Board of
Directors, Chief Executive Officer, President or Chief Operating Officer.
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4.13. Salaries. The salaries of the 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 such officer is also a director of the corporation or a member of such
committee.
ARTICLE V.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
5.01. Certificates for Shares. All shares of this corporation shall be
represented by certificates. 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, either manually
or in facsimile, by any one or more of the Chairman of the Board, the Vice
Chairman, the Chief Executive Officer, the President, the Chief Operating
Officer or a Vice President. 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 5.05.
5.02. Signature by Former Officer, Transfer Agent or Registrar. In case
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon any certificate for shares has ceased to be such
officer, transfer agent or registrar before such certificate is issued, the
certificate may be issued by the corporation with the same effect as if that
person were still an officer, transfer agent or registrar at the date of its
issue.
5.03. Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer, and unless the corporation has established
a procedure by which a beneficial owner of shares held by a nominee is to be
recognized by the corporation as the shareholder, the corporation may treat the
registered owner of such shares as the person exclusively entitled to vote, to
receive notifications and otherwise to have and exercise all the rights and
power of an owner. The corporation may require reasonable assurance that all
transfer endorsements are genuine and effective and in compliance with all
regulations prescribed by or under the authority of the Board of Directors.
5.04. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction upon the transfer of such shares imposed by the corporation.
5.05. Lost, Destroyed or Stolen Certificates. Where the owner claims
that his or her certificate for shares has been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner (a) so
requests before the corporation has notice that such shares have been acquired
by a bona fide purchaser; and (b) if required by the corporation, 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.
5.06. Consideration for Shares. The shares of the corporation may be
issued for such consideration as shall be fixed from time to time and determined
to be adequate 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 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, such shares shall be deemed to be fully paid
and nonassessable.
5.07. Stock Regulations. The Board of Directors shall have the power
and authority to make all such rules and regulations not inconsistent with the
statutes of the State of Wisconsin as it may deem expedient concerning the
issue, transfer and registration of certificates representing shares of the
corporation, including the appointment or designation of one or more stock
transfer agents and one or more registrars.
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ARTICLE VI.
WAIVER OF NOTICE
6.01. Shareholder Written Waiver. 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, shall 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 shall be delivered to the
corporation for inclusion in the corporate records.
6.02. Shareholder Waiver by Attendance. A shareholder's attendance at a
meeting, in person or by proxy, waives objection to both of the following:
(a) Lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting or promptly upon arrival
objects to holding the meeting or transacting business at the meeting.
(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.
6.03. Director Written Waiver. A director 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, signed by the director entitled to the notice and retained
by the corporation.
6.04. Director Waiver by Attendance. A director's attendance at or
participation in a meeting of the Board of Directors or any committee thereof
waives any required notice to him or her of the meeting unless the director at
the beginning of the meeting or promptly upon his or her arrival objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
ARTICLE VII.
ACTION WITHOUT MEETINGS
7.01. Director Action Without Meeting. Unless the Articles of
Incorporation provide otherwise, action required or permitted by the Wisconsin
Business Corporation Law to be taken at a Board of Directors meeting or
committee meeting may be taken without a meeting if the action is taken by all
members of the Board or committee. The action shall be evidenced by one or more
written consents describing the action taken, signed by each director and
retained by the corporation. Action taken hereunder is effective when the last
director signs the consent, unless the consent specifies a different effective
date. A consent signed hereunder has the effect of a unanimous vote taken at a
meeting at which all directors or committee members were present, and may be
described as such in any document.
ARTICLE VIII.
INDEMNIFICATION
8.01. Indemnification for Successful Defense. Within twenty (20) days
after receipt of a written request pursuant to Section 8.03, the corporation
shall indemnify a director or officer, to the extent he or she has been
successful on the merits or otherwise in the defense of a proceeding, for all
reasonable expenses incurred in the proceeding if the director or officer was a
party because he or she is a director or officer of the corporation.
8.02. Other Indemnification. (a) In cases not included under Section
8.01, the corporation shall indemnify a director or officer against all
liabilities and expenses incurred by the director or officer in a proceeding to
which the director or officer was a party because he or she is a director or
officer of the corporation, unless liability
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was incurred because the director or officer breached or failed to perform a
duty he or she owes to the corporation and the breach or failure to perform
constitutes any of the following:
(1) A willful failure to deal fairly with the corporation or its
shareholders in connection with a matter in which the director or officer
has a material conflict of interest.
(2) A violation of criminal law, unless the director or officer had
reasonable cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was unlawful.
(3) A transaction from which the director or officer derived an
improper personal profit.
(4) Willful misconduct.
(b) Determination of whether indemnification is required under this
Section shall be made pursuant to Section 8.05.
(c) The termination of a proceeding by judgment, order, settlement or
conviction, or upon a plea of no contest or an equivalent plea, does not, by
itself, create a presumption that indemnification of the director or officer is
not required under this Section.
8.03. Written Request. A director or officer who seeks indemnification
under Sections 8.01 or 8.02 shall make a written request to the corporation.
8.04. Nonduplication. The corporation shall not indemnify a director or
officer under Sections 8.01 or 8.02 if the director or officer has previously
received indemnification or allowance of expenses from any person, including the
corporation, in connection with the same proceeding. However, the director or
officer has no duty to look to any other person for indemnification.
8.05. Determination of Right to Indemnification. (a) Unless otherwise
provided by the Articles of Incorporation or by written agreement between the
director or officer and the corporation, the director or officer seeking
indemnification under Section 8.02 shall select one of the following means for
determining his or her right to indemnification:
(1) By a majority vote of a quorum of the Board of Directors
consisting of directors not at the time parties to the same or related
proceedings. If a quorum of disinterested directors cannot be obtained, by
majority vote of a committee duly appointed by the Board of Directors and
consisting solely of two (2) or more directors who are not at the time
parties to the same or related proceedings. Directors who are parties to
the same or related proceedings may participate in the designation of
members of the committee.
(2) By independent legal counsel selected by a quorum of the Board of
Directors or its committee in the manner prescribed in sub. (1) or, if
unable to obtain such a quorum or committee, by a majority vote of the full
Board of Directors, including directors who are parties to the same or
related proceedings.
(3) By a panel of three (3) arbitrators consisting of one arbitrator
selected by those directors entitled under sub. (2) to select independent
legal counsel, one arbitrator selected by the director or officer seeking
indemnification and one arbitrator selected by the two (2) arbitrators
previously selected.
(4) By an affirmative vote of shares represented at a meeting of
shareholders at which a quorum of the voting group entitled to vote thereon
is present. Shares owned by, or voted under the control of, persons who
are at the time parties to the same or related proceedings, whether as
plaintiffs or defendants or in any other capacity, may not be voted in
making the determination.
(5) By a court under Section 8.08.
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(6) By any other method provided for in any additional right to
indemnification permitted under Section 8.07.
(b) In any determination under (a), the burden of proof is on the
corporation to prove by clear and convincing evidence that indemnification under
Section 8.02 should not be allowed.
(c) A written determination as to a director's or officer's
indemnification under Section 8.02 shall be submitted to both the corporation
and the director or officer within 60 days of the selection made under (a).
(d) If it is determined that indemnification is required under Section
8.02, the corporation shall pay all liabilities and expenses not prohibited by
Section 8.04 within ten (10) days after receipt of the written determination
under (c). The corporation shall also pay all expenses incurred by the director
or officer in the determination process under (a).
8.06. Advance of Expenses. Within ten (10) days after receipt of a
written request by a director or officer who is a party to a proceeding, the
corporation shall 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.
(2) A written undertaking, executed personally or on his or her
behalf, to repay the allowance to the extent that it is ultimately
determined under Section 8.05 that indemnification under Section 8.02 is
not required and that indemnification is not ordered by a court. The
undertaking under this subsection shall be an unlimited general obligation
of the director or officer and may be accepted without reference to his or
her ability to repay the allowance. The undertaking may be unsecured.
8.07. Nonexclusivity. (a) Except as provided in (b), Sections 8.01,
8.02 and 8.06 do not preclude any additional right to indemnification or
allowance of expenses that a director or officer may have under any of the
following:
(1) The Articles of Incorporation.
(2) A written agreement between the director or officer and the
corporation.
(3) A resolution of the Board of Directors.
(4) A resolution, after notice, adopted by a majority vote of all of
the corporation's voting shares then issued and outstanding.
(b) Regardless of the existence of an additional right under (a), the
corporation shall not indemnify a director or officer, or permit a director or
officer to retain any allowance of expenses unless it is determined by or on
behalf of the corporation that the director or officer did not breach or fail to
perform a duty he or she owes to the corporation which constitutes conduct under
Section 8.02(a)(1), (2), (3) or (4). A director or officer who is a party to
the same or related proceedings for which indemnification or an allowance of
expenses is sought may not participate in a determination under this subsection.
(c) Sections 8.01 to 8.14 do not affect the corporation's power to pay or
reimburse expenses incurred by a director or officer in any of the following
circumstances.
(1) As a witness in a proceeding to which he or she is not a party.
(2) As a plaintiff or petitioner in a proceeding because he or she is
or was an employee, agent, director or officer of the corporation.
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8.08. Court-Ordered Indemnification. (a) Except as provided otherwise
by written agreement between the director or officer and the corporation, a
director or officer who is a party to a proceeding may apply for indemnification
to the court conducting the proceeding or to another court of competent
jurisdiction. Application shall be made for an initial determination by the
court under Section 8.05(a)(5) or for review by the court of an adverse
determination under Section 8.05(a)(l), (2), (3), (4) or (6).
(b) If the court determines that the director or officer is entitled to
indemnification, the corporation shall pay the director's or officer's expenses
incurred to obtain the court-ordered indemnification.
8.09. Indemnification and Allowance of Expenses of Employees and Agents .
The corporation shall indemnify an employee of the corporation who is not a
director or officer of the corporation, to the extent that he or she has been
successful on the merits or otherwise in defense of a proceeding, for all
reasonable expenses incurred in the proceeding if the employee was a party
because he or she was an employee of the corporation. In addition, the
corporation may indemnify and allow reasonable expenses of an employee or agent
who is not a director or officer of the corporation to the extent provided by
the Articles of Incorporation or these Bylaws, by general or specific action of
the Board of Directors or by contract.
8.10. Insurance. The corporation may purchase and maintain insurance on
behalf of an individual who is an employee, agent, director or officer of the
corporation against liability asserted against or incurred by the individual in
his or her capacity as an employee, agent, director or officer, regardless of
whether the corporation is required or authorized to indemnify or allow expenses
to the individual against the same liability under Sections 8.01, 8.02, 8.06,
8.07 and 8.09.
8.11. Securities Law Claims.
(a) Pursuant to the public policy of the State of Wisconsin, the
corporation shall provide indemnification and allowance of expenses and may
insure for any liability incurred in connection with a proceeding involving
securities regulation described under (b) to the extent required or permitted
under Sections 8.01 to 8.10.
(b) Sections 8.01 to 8.10 apply, to the extent applicable to any other
proceeding, to any proceeding involving a federal or state statute, rule or
regulation regulating the offer, sale or purchase of securities, securities
brokers or dealers, or investment companies or investment advisers.
8.12. Liberal Construction. In order for the corporation to obtain and
retain qualified directors, officers and employees, the foregoing provisions
shall be liberally administered in order to afford maximum indemnification of
directors, officers and, where Section 8.09 of these Bylaws applies, employees.
The indemnification above provided for shall be granted in all applicable cases
unless to do so would clearly contravene law, controlling precedent or public
policy.
8.13. Definitions Applicable to this Article. For purposes of this
Article:
(a) "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise
that directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the corporation.
(b) "Corporation" means this corporation and any domestic or foreign
predecessor of this corporation where the predecessor corporation's existence
ceased upon the consummation of a merger or other transaction.
(c) "Director or officer" means any of the following:
(1) An individual who is or was a director or officer of this
corporation.
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(2) An individual who, while a director or officer of this
corporation, is or was serving at the corporation's request as a director,
officer, partner, trustee, member of any governing or decision-making
committee, employee or agent of another corporation or foreign corporation,
partnership, joint venture, trust or other enterprise.
(3) An individual who, while a director or officer of this
corporation, is or was serving an employee benefit plan because his or her
duties to the corporation also impose duties on, or otherwise involve
services by, the person to the plan or to participants in or beneficiaries
of the plan.
(4) Unless the context requires otherwise, the estate or personal
representative of a director or officer.
For purposes of this Article, it shall be conclusively presumed that any
director or officer serving as a director, officer, partner, trustee, member of
any governing or decision-making committee, employee or agent of an affiliate
shall be so serving at the request of the corporation.
(d) "Expenses" include fees, costs, charges, disbursements, attorney fees
and other expenses incurred in connection with a proceeding.
(e) "Liability" includes the obligation to pay a judgment, settlement,
penalty, assessment, forfeiture or fine, including an excise tax assessed with
respect to an employee benefit plan, and reasonable expenses.
(f) "Party" includes an individual who was or is, or who is threatened to
be made, a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending or completed civil,
criminal, administrative or investigative action, suit, arbitration or other
proceeding, whether formal or informal, which involves foreign, federal, state
or local law and which is brought by or in the right of the corporation or by
any other person.
ARTICLE IX.
SEAL
9.01. Seal. The Board of Directors may provide a corporate seal which
may be circular in form and have inscribed thereon the name of the corporation
and the state of incorporation and the words "Corporate Seal."
ARTICLE X.
AMENDMENTS
10.01. By Shareholders. These Bylaws may be amended or repealed and new
Bylaws may be adopted by the shareholders.
10.02. By Directors. Except as the Articles of Incorporation may
otherwise provide, these Bylaws may also be amended or repealed and new Bylaws
may be adopted by the Board of Directors by the vote provided in Section 3.08,
but (a) no Bylaw adopted by the shareholders shall be amended, repealed or
readopted by the Board of Directors if the Bylaw so adopted so provides and (b)
a Bylaw adopted or amended by the shareholders that fixes a greater or lower
quorum requirement or a greater voting requirement for the Board of Directors
than otherwise is provided in the Wisconsin Business Corporation Law may not be
amended or repealed by the Board of Directors unless the Bylaw expressly
provides that it may be amended or repealed by a specified vote of the Board of
Directors. Action by the Board of Directors to adopt or amend a Bylaw that
changes the quorum or voting requirement for the Board of Directors must meet
the same quorum requirement and be adopted by the same vote required to take
action under the quorum and voting requirement then in effect, unless a
different voting requirement is specified as provided by the preceding sentence.
A Bylaw that fixes a greater or lower quorum requirement or a greater voting
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requirement for shareholders or voting groups of shareholders than otherwise is
provided in the Wisconsin Business Corporation Law may not be adopted, amended
or repealed by the Board of Directors.
10.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
Bylaws then in effect but is taken or authorized by a vote that would be
sufficient 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.
17
<PAGE>
Exhibit 12.1
Kohl's Corporation
Ratio of Earnings to Fixed Charges
($000s)
<TABLE>
<CAPTION>
39 Weeks Ended
-------------- Fiscal Year (1)
Oct 30, Oct 31, ---------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
- --------
Income before income taxes and
extraordinary items $ 224,415 $ 161,787 $ 316,749 $ 235,063 $ 171,368 $ 122,729 $ 117,451
Fixed charges (3) 59,672 46,049 63,135 57,446 42,806 30,649 19,758
Less interest capitalized
during period (2,651) (1,215) (1,878) (2,043) (2,829) (1,287) (603)
--------- --------- --------- --------- --------- --------- ---------
$ 281,436 $ 206,621 $ 378,006 $ 290,466 $ 211,345 $ 152,091 $ 136,606
========= ========= ========= ========= ========= ========= =========
Fixed Charges
- -------------
Interest (expensed or
capitalized) (3) $ 24,044 $ 18,196 $ 24,550 $ 26,304 $ 20,574 $ 14,774 $ 7,911
Portion of rent expense
representative of interest 35,447 27,704 38,385 30,798 22,031 15,798 11,777
Amortization of deferred
financing fees 181 149 200 344 201 77 70
--------- --------- --------- --------- --------- --------- ---------
$ 59,672 $ 46,049 $ 63,135 $ 57,446 $ 42,806 $ 30,649 $ 19,758
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges 4.72 4.49 5.99 5.06 4.94 4.96 (2) 6.91
========= ========= ========= ========= ========= ========= =========
</TABLE>
(1) Fiscal 1998, 1997, 1996 and 1994 are 52 week years and fiscal 1995 is a 53
week year.
(2) Excluding the credit operations non-recurring expense of $14,052, the ratio
of earnings to fixed charges would be 5.40.
(3) Interest expense for fiscal 1997, 1996, and 1995 has been restated to
properly reflect interest expense included on the Condensed Consolidated
Statements of Income.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> OCT-30-1999
<CASH> 16,066
<SECURITIES> 20,000
<RECEIVABLES> 296,044
<ALLOWANCES> 4,331
<INVENTORY> 1,010,965
<CURRENT-ASSETS> 1,367,669
<PP&E> 1,485,871
<DEPRECIATION> 259,287
<TOTAL-ASSETS> 2,793,242
<CURRENT-LIABILITIES> 643,762
<BONDS> 495,416
0
0
<COMMON> 1,630
<OTHER-SE> 1,559,220
<TOTAL-LIABILITY-AND-EQUITY> 2,793,242
<SALES> 2,949,611
<TOTAL-REVENUES> 2,949,611
<CGS> 1,935,520
<TOTAL-COSTS> 2,705,543
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,653
<INCOME-PRETAX> 224,415
<INCOME-TAX> 86,849
<INCOME-CONTINUING> 137,566
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 137,566
<EPS-BASIC> .85
<EPS-DILUTED> .82
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> OCT-31-1998
<CASH> 2,757
<SECURITIES> 15,000
<RECEIVABLES> 125,349
<ALLOWANCES> 1,890
<INVENTORY> 832,338
<CURRENT-ASSETS> 985,310
<PP&E> 1,075,652
<DEPRECIATION> 192,050
<TOTAL-ASSETS> 1,930,086
<CURRENT-LIABILITIES> 418,753
<BONDS> 379,076
0
0
<COMMON> 1,582
<OTHER-SE> 1,055,356
<TOTAL-LIABILITY-AND-EQUITY> 1,930,086
<SALES> 2,392,215
<TOTAL-REVENUES> 2,392,215
<CGS> 1,582,547
<TOTAL-COSTS> 2,214,801
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,627
<INCOME-PRETAX> 161,787
<INCOME-TAX> 63,583
<INCOME-CONTINUING> 98,204
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 98,204
<EPS-BASIC> .62
<EPS-DILUTED> .60
</TABLE>
