<PAGE> 1
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 September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-6706
BADGER METER, INC.
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(Exact name of registrant as specified in its charter)
Wisconsin 39-0143280
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4545 West Brown Deer Road, Milwaukee, Wisconsin 53223
- ----------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 355-0400
--------------
None
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(Former name, former address and former
fiscal year, if changed since last report.)
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.
Class Outstanding at October 16, 1998
- ----------------------------- -------------------------------
Common Stock, $1.00 par value 2,510,570
Class B Common Stock, $.10 par value 1,119,268
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BADGER METER, INC.
INDEX
Page No.
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Part I. Financial Information:
Item 1 Financial Statements:
Consolidated Condensed Balance Sheets - -
September 30, 1998 and December 31, 1997 3
Consolidated Condensed Statements of Operations - -
Three and Nine Months Ended September 30, 1998 and 1997 4
Consolidated Condensed Statements of Cash Flows - -
Nine Months Ended September 30, 1998 and 1997 5
Notes to Consolidated Condensed Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II. Other Information:
Item 6(a) Exhibits 9
Item 6(b) Reports on Form 8-K 9
Exhibit Index 11
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Part I - Financial Information
BADGER METER, INC.
Item 1 Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Assets September 30, December 31,
------ 1998 1997
---- ----
(Unaudited)
<S> <C> <C>
Current assets:
Cash $ 848 $ 1,055
Receivables 22,463 19,193
Inventories:
Finished goods 4,612 4,095
Work in process 10,197 10,871
Raw materials and purchased parts 7,080 6,632
----------- -----------
Total inventories 21,889 21,598
Prepaid expenses 702 693
----------- -----------
Total current assets 45,902 42,539
Property, plant and equipment, at cost 76,404 64,407
Less accumulated depreciation (42,040) (40,423)
----------- -----------
34,364 23,984
Intangible assets, at cost less accumulated amortization 1,502 650
Prepaid pension 6,316 6,751
Deferred income taxes 2,264 2,264
Deferred charges and other assets 3,357 6,109
----------- -----------
Total assets $ 93,705 $ 82,297
=========== ===========
Liabilities and Shareholders' Equity
-------------------------------------
Current liabilities:
Short-term debt $ 11,315 $ 11,245
Payables 11,978 7,196
Accrued compensation and employee benefits 5,457 5,339
Other accrued liabilities 4,460 3,630
Income and other taxes 1,034 1,259
----------- -----------
Total current liabilities 34,244 28,669
Accrued non-pension postretirement benefits 7,488 7,807
Other accrued employee benefits 3,945 3,426
Long-term debt 781 928
Shareholders' equity:
Common Stock 3,334 3,240
Class B Common Stock 112 112
Capital in excess of par value 10,371 8,315
Reinvested earnings 37,770 33,057
Less: Employee benefit stock (808) (917)
Treasury stock, at cost (3,532) (2,340)
----------- -----------
Total shareholders' equity 47,247 41,467
----------- -----------
Total liabilities and shareholders' equity $ 93,705 $ 82,297
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 39,370 $ 33,207 $ 109,299 $ 99,013
Operating costs and expenses:
Cost of sales 23,627 20,727 65,846 62,431
Selling, General and
Administration 11,754 9,516 32,990 28,325
----------- ----------- ----------- -----------
35,381 30,243 98,836 90,756
----------- ----------- ----------- -----------
Operating earnings 3,989 2,964 10,463 8,257
Interest expense 99 74 347 272
----------- ----------- ----------- -----------
Earnings before income taxes 3,890 2,890 10,116 7,985
Provision for income taxes 1,486 1,069 3,820 2,954
----------- ----------- ----------- -----------
Net earnings $ 2,404 $ 1,821 $ 6,296 $ 5,031
=========== =========== =========== ===========
Per share amounts: *
Net earnings:
Basic $ .66 $ .51 $ 1.74 $ 1.41
=========== =========== =========== ===========
Diluted $ .62 $ .46 $ 1.61 $ 1.28
=========== =========== =========== ===========
Dividends declared -
Common Stock $ .15 $ .12 $ .45 $ .36
=========== =========== =========== ===========
Dividends declared -
Class B Common Stock $ .14 $ .11 $ .41 $ .33
=========== =========== =========== ===========
Weighted-average shares
used in computation:
Basic 3,630,008 3,561,727 3,624,776 3,556,250
Impact of dilutive stock
options 246,364 372,928 277,620 360,338
----------- ----------- ----------- -----------
Diluted 3,876,372 3,934,655 3,902,396 3,916,588
=========== =========== =========== ===========
</TABLE>
* Earnings per share is computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share does not
necessarily equal the total for the year.
See accompanying notes to consolidated condensed financial statements.
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BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1998 1997
---- ----
<S> <C> <C>
Operating activities:
Net earnings $ 6,296 $ 5,031
Adjustments to reconcile net
earnings to net cash provided
by (used for) operations:
Depreciation 3,600 2,918
Amortization 126 171
Noncurrent employee benefits 744 818
Changes in:
Receivables (3,270) (3,124)
Inventory (291) (4,825)
Current liabilities other than short-term debt 5,505 4,384
Prepaid expenses and other (9) 135
----------- -----------
Total adjustments 6,405 477
----------- -----------
Net cash provided by (used for) operations 12,701 5,508
----------- -----------
Investing activities:
Property, plant and equipment (13,980) (4,895)
Other - net 1,774 (628)
----------- -----------
Net cash provided by (used for) investing activities (12,206) (5,523)
----------- -----------
Financing activities:
Bank borrowings (repayments) (77) 1,464
Dividends (1,583) (1,235)
Stock options and ESSOP 2,150 639
Treasury stock transactions (1,192) (1,669)
----------- -----------
Net cash provided by (used for)
financing activities (702) (801)
----------- -----------
Increase (decrease) in cash (207) (816)
Beginning of year 1,055 1,123
----------- -----------
End of period $ 848 $ 307
=========== ============
Supplemental disclosures of cash flow information:
Cash paid (refunded) during the period for:
Income taxes $ 4,433 $ 2,149
=========== ============
Interest (including $208,000 of interest
capitalized during facility construction for 1998) $ 520 $ 284
=========== ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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BADGER METER, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements of Badger Meter, Inc. ("the Company")
contain all adjustments (consisting only of normal recurring accruals)
necessary to present fairly the consolidated condensed financial position
at September 30, 1998 and the results of operations for the three and
nine-month periods ended September 30, 1998 and 1997 and the cash flows for
the nine-month periods ended September 30, 1998 and 1997. The results of
operations for any interim period are not necessarily indicative of the
results to be expected for the full year. Certain reclassifications have
been made to the 1997 data to conform with the 1998 presentation.
2. The consolidated condensed balance sheet at December 31, 1997, was derived
from amounts included in the Annual Report to Shareholders which was
incorporated by reference in the Company's annual report on Form 10-K for
the year ended December 31, 1997. Refer to the footnotes in those reports
for a description of the accounting policies, which have been continued
without change, and additional details of the Company's financial
condition. The details in those notes have not changed except as a result
of normal transactions in the interim.
3. During the nine months ended September 30, 1998, the Company repurchased
27,931 shares of common stock for an aggregate purchase price of
$1,192,000.
4. In February of 1998, the Company entered into an interest rate swap
agreement, which fixes the interest rate on $5 million of commercial paper
at 5.7% for three years.
5. The Company continues to address the year 2000 software issues as discussed
in the Company's Annual Report to Shareholders for the year ended December
31, 1997. All upgrades are expected to be completed by the second quarter
of 1999 and management does not expect to incur any significant costs in
excess of normal software upgrade costs. Testing will begin as soon as the
implementation is complete. If this issue is not properly addressed by the
Company and its vendors, the Company could incur additional transaction
processing costs and there could be interruptions in the Company's supply
chain, resulting in increased costs as the Company obtains alternate
vendors. However, the Company does not expect to have any significant
problems with its products, systems or vendors as a result of this issue.
6. During the past three and a half calendar years, the various trusts of the
Wright Family Voting Trust ("WFVT") have sold the Company common stock for
diversification purposes. These sales totaled 34,984 shares in 1995, 38,850
shares in 1996, 21,400 in 1997 and 15,450 through September 30, 1998. The
WFVT has indicated that these trusts presently intend to continue
diversifying in the future. The Company does not have a commitment to
purchase any of these shares.
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<PAGE> 7
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition
With the Company's record sales for the third quarter of 1998, receivables as of
September 30, 1998 increased 17.0%, or $3,270,000, from the December 31, 1997
balance due primarily to these increased sales. Inventories remained relatively
stable, with a 1.3%, or $291,000, increase as the production requirements were
offset by efficient inventory management. Intangible assets increased $852,000
due to goodwill and other intangible assets recorded in connection with the
acquisition of a fire service product line. Property, plant and equipment (at
cost) increased $11,997,000 in connection with the Milwaukee facility expansion
plus other equipment purchases.
Prepaid pension decreased $435,000 due to the recording of normal pension
expense with no funding payments required due to the overfunded status of the
plan. Deferred charges and other assets decreased $2,752,000, due primarily to
the completion of the acquisition of the fire service product line. Funds paid
into escrow in 1997 were recorded as deferred charges until the second quarter
of 1998, at which time the purchase price was allocated to the appropriate
inventory, equipment and intangibles accounts.
Payables have increased $4,782,000 since December 31, 1997 due to increased
expenditures in connection with higher levels of business activity. Accrued
compensation and employee benefits increased $118,000, due primarily to
incentive compensation accruals. Other accrued liabilities increased 22.9%, or
$830,000, due primarily to additional reserves for after-sale costs. Income and
other taxes payable decreased $225,000 due to the timing of estimated tax
payments. Accrued non-pension postretirement benefits decreased $319,000 since
December 31, 1997 and other accrued employee benefits increased $519,000 due to
higher benefit expenses and the timing of benefit payments. Long-term debt
decreased $147,000 due primarily to a $100,000 scheduled payment made on the
debt related to the Employee Savings and Stock Ownership Plan ("the ESSOP") plus
other payments.
Since December 31, 1997, common stock and capital in excess of par value both
increased due to new shares issued in connection with stock options exercised
and ESSOP purchases. Treasury stock increased due to shares repurchased by the
Company.
Short-term debt increased $70,000 since December 31, 1997 as cash required for
fixed asset additions (primarily the facility expansion) exceeded cash generated
by operations.
As of September 30, 1998, the Company had approximately $38,000,000 of credit
lines with domestic and foreign banks of which $11,315,000 was in use. This
compares to $4,143,000 in use at September 30, 1997 and $11,245,000 at December
31, 1997. The Company believes that the present lines of credit are adequate to
meet operating requirements.
Results of Operations
Net sales for the third quarter of 1998 of $39,370,000 reflect an 18.6% increase
over sales of $33,207,000 for the same period in 1997. Likewise, net sales for
the first nine months of 1998 increased 10.4% over the same period in 1997.
These increases were primarily related to higher sales of water meters,
including shipments in connection with the City of Philadelphia project. These
and other domestic sales offset decreases in international water meter sales
during 1998 as compared to the same periods in 1997.
Gross profit margins increased from 37.6% in the third quarter of 1997 to 40.0%
in the third quarter of 1998. For the nine month periods, gross profit margins
increased from 36.9% in 1997 to 39.8% in 1998. These increases were primarily
due to efficiencies generated by increased manufacturing capacity utilization
related to residential water meters.
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<PAGE> 8
Selling, general and administrative costs increased 23.5% for the quarter and
16.5% for the nine-month period ended September 30, 1998 as compared to the same
periods of 1997 due to general wage and cost increases, plus additional staffing
to support increased sales and continued product development initiatives.
Interest expense increased between the periods due to higher debt balances,
partially offset by interest capitalized during facility construction.
The effective tax rate for the first nine months of 1998 was estimated to be
37.8%, which is slightly higher than the 37.0% for the first nine months of 1997
due to reduced tax benefits on lower international sales and other changes in
tax credit estimates.
Earnings for the third quarter of 1998 were $2,404,000, an increase of 32.0%
over third quarter 1997 earnings of $1,821,000. The 1998 year-to-date earnings
of $6,296,000 increased 25.1% over the same period of 1997 earnings of
$5,031,000. These increases were due primarily to higher sales and improved
margins. The percentage increases in basic earnings per share were lower for
both periods due to increased shares outstanding. However, the percentage
increases in diluted earnings per share were slightly higher for both periods
due to a reduced dilutive impact of outstanding stock options caused by a lower
stock price.
Other Matters
The Company is subject to contingencies relative to environmental laws and
regulations. Currently, the Company is in the process of resolving an issue
relative to a landfill site and a suit alleging violation of California's
Proposition 65. The Company does not believe the ultimate resolution of these
claims will have a material adverse effect on the Company's financial position
or results of operations. Provision has been made for known settlement costs. No
other risks or uncertainties were identified that could have a material impact
on operations and no long-lived assets have become permanently impaired in
value.
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Part II - Other Information
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits:
( 3.0)(ii) By-laws
(27.0) Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the three months ended
September 30, 1998.
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<PAGE> 10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BADGER METER, INC.
Dated: October 22, 1998 By /S/ Richard A. Meeusen
-----------------------
Richard A. Meeusen
Vice President - Finance and Treasurer
Chief Financial Officer
By /S/ Beverly L.P. Smiley
------------------------
Beverly L.P. Smiley
Corporate Controller
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<PAGE> 11
EXHIBIT INDEX
Page Number
( 3.0)(ii) By-laws 12
(27.0) Financial Data Schedule
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<PAGE> 1
EXHIBIT(3.0)(ii)
RESTATED BY-LAWS
OF
BADGER METER, INC.
(AS AMENDED AUGUST 14, 1998)
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders (the
"Annual Meeting") shall be held on the second Saturday in April of each year, or
at such other time and date as may be fixed by resolution of the Board of
Directors. In fixing a meeting date for any Annual Meeting, the Board of
Directors may consider such factors as it deems relevant within the good faith
exercise of its business judgment. At each Annual Meeting, the shareholders
shall elect that number of directors equal to the number of directors in the
class whose term expires at the time of such meeting. At any such Annual
Meeting, only other business properly brought before the meeting in accordance
with Section 12 of Article I of these By-laws may be transacted. If the election
of directors shall not be held on the date designated herein, or fixed as herein
provided, for any Annual Meeting, or any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of
shareholders (a "Special Meeting") as soon thereafter as is practicable.
Section 2. Special Meetings.
(a) A Special Meeting may be called only by (i) the Chairman , (ii) the
President or (iii) the Board of Directors and shall be called by the President
upon the demand, in accordance with this Section 2, of the holders of record of
shares representing at least 10% of all the votes entitled to be cast on any
issue proposed to be considered at the Special Meeting.
(b) In order that the Corporation may determine the shareholders entitled
to demand a Special Meeting, the Board of Directors may fix a record date to
determine the shareholders entitled to make such a demand (the "Demand Record
Date"). The Demand Record Date shall not precede the date upon which the
resolution fixing the Demand Record Date is adopted by the Board of Directors
and shall not be more than ten days after the date upon which the resolution
fixing the Demand Record Date is adopted by the Board of Directors. Any
shareholder of record seeking to have shareholders demand a Special Meeting
shall, by sending written notice to the Secretary of the Corporation by hand or
by certified or registered mail, return receipt requested, request the Board of
Directors to fix a Demand Record Date. The Board of Directors shall promptly,
but in all events within ten days after the date on which a valid request to fix
a Demand Record Date is received, adopt a resolution fixing the Demand Record
Date and shall make a public announcement of such Demand Record Date. If no
Demand Record Date has been fixed by the Board of Directors within ten days
after the date on which such request is received by the Secretary, the Demand
Record Date shall be the 10th day after the first date on which a valid written
request to set a Demand Record Date is received by the Secretary. To be valid,
such written request shall set forth the purpose or purposes for which the
Special Meeting is to be held, shall be signed by one or more shareholders of
record (or their duly authorized proxies or other representatives), shall bear
the date of signature of each such shareholder (or proxy or other
representative) and shall set forth all information about each such shareholder
and about the beneficial owner or owners, if any, on whose behalf the request is
made that would be required to be set forth in a shareholder's notice described
in paragraph (a) (ii) of Section 12 of Article I of these By-laws.
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<PAGE> 2
(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), shall be signed by one or more persons who as of the Demand
Record Date are shareholders of record (or their duly authorized proxies or
other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), and shall set forth the name and
address, as they appear in the Corporation's books, of each shareholder signing
such demand and the class and number of shares of the Corporation which are
owned of record and beneficially by each such shareholder, shall be sent to the
Secretary by hand or by certified or registered mail, return receipt requested,
and shall be received by the Secretary within seventy days after the Demand
Record Date.
(d) The Corporation shall not be required to call a Special Meeting upon
shareholder demand unless, in addition to the documents required by paragraph
(c) of this Section 2, the Secretary receives a written agreement signed by each
Soliciting Shareholder (as defined below), pursuant to which each Soliciting
Shareholder, jointly and severally, agrees to pay the Corporation's costs of
holding the Special Meeting, including the costs of preparing and mailing proxy
materials for the Corporation's own solicitation, provided that if each of the
resolutions introduced by any Soliciting Shareholder at such meeting is adopted,
and each of the individuals nominated by or on behalf of any Soliciting
Shareholder for election as a director at such meeting is elected, then the
Soliciting Shareholders shall not be required to pay such costs. For purposes of
this paragraph (d), the following terms shall have the meanings set forth below:
(i) "Affiliate" of any Person (as defined herein) shall mean any
Person controlling, controlled by or under common control with such first
Person.
(ii) "Participant" shall have the meaning assigned to such term in
Rule 14a-11 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated organization
or other entity.
(iv) "Proxy" shall have the meaning assigned to such term in Rule
14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such term in
Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to any Special
Meeting demanded by a shareholder or shareholders, any of the following
Persons:
(A) if the number of shareholders signing the demand or demands
of meeting delivered to the Corporation pursuant to paragraph (c) of
this Section 2 is ten or fewer, each shareholder signing any such
demand;
(B) if the number of shareholders signing the demand or demands
of meeting delivered to the Corporation pursuant to paragraph (c) of
this Section 2 is more than ten, each Person who either (I) was a
Participant in any Solicitation of such demand or demands or (II) at
the time of the delivery to the Corporation of the documents described
in paragraph (c) of this Section 2 had engaged or intended to engage
in any Solicitation of Proxies for use at such Special Meeting (other
than a Solicitation of Proxies on behalf of the Corporation); or
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<PAGE> 3
(C) any Affiliate of a Soliciting Shareholder, if a majority
of the directors then in office determine, reasonably and in good
faith, that such Affiliate should be required to sign the written
notice described in paragraph (c) of this Section 2 and/or the written
agreement described in this paragraph (d) in order to prevent the
purposes of this Section 2 from being evaded.
(e) Except as provided in the following sentence, any Special Meeting
shall be held at such hour and day as may be designated by whichever of the
President, the Secretary or the Board of Directors shall have called such
meeting. In the case of any Special Meeting called by the President upon
the demand of shareholders (a "Demand Special Meeting"), such meeting shall
be held at such hour and day as may be designated by the Board of
Directors; provided, however, that the date of any Demand Special Meeting
shall be not more than seventy days after the Meeting Record Date (as
defined in Section 5 of Article I of these By-laws); and provided further
that in the event that the directors then in office fail to designate an
hour and date for a Demand Special Meeting within ten days after the date
that valid written demands for such meeting by the holders of record as of
the Demand Record Date of shares representing at least 10% of all the votes
entitled to be cast on each issue proposed to be considered at the Special
Meeting are delivered to the Corporation (the "Delivery Date"), then such
meeting shall be held at 2:00 P.M. local time on the 100th day after the
Delivery Date or, if such 100th day is not a Business Day (as defined
below), on the first preceding Business Day. In fixing a meeting date for
any Special Meeting, the President, the Secretary or the Board of Directors
may consider such factors as he or it deems relevant within the good faith
exercise of his or its business judgment, including, without limitation,
the nature of the action proposed to be taken, the facts and circumstances
surrounding any demand for such meeting, and any plan of the Board of
Directors to call an Annual Meeting or a Special Meeting for the conduct of
related business.
(f) The Corporation may engage regionally or nationally recognized
independent inspectors of elections to act as an agent of the Corporation
for the purpose of promptly performing a ministerial review of the validity
of any purported written demand or demands for a Special Meeting received
by the Secretary. For the purpose of permitting the inspectors to perform
such review, no purported demand shall be deemed to have been delivered to
the Corporation until the earlier of (i) five Business Days following
receipt by the Secretary of such purported demand and (ii) such date as the
independent inspectors certify to the Corporation that the valid demands
received by the Secretary represent at least 10% of all the votes entitled
to be cast on each issue proposed to be considered at the Special Meeting.
Nothing contained in this paragraph (f) shall in any way be construed to
suggest or imply that the Board of Directors or any shareholder shall not
be entitled to contest the validity of any demand, whether during or after
such five Business Day period, or to take any other action (including,
without limitation, the commencement, prosecution or defense of any
litigation with respect thereto).
(g) For purposes of these By-laws, "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.
Section 3. Place of Meeting. The Chairman, the President, the Board of
Directors or the Secretary may designate any place, either within or
without the State of Wisconsin, as the place of meeting for an Annual
Meeting or Special Meeting. If no designation is made, the place of meeting
shall be the principal office of the Corporation. Any meeting may be
adjourned to reconvene at any place designated by vote of the Board of
Directors or by the President or the Secretary.
Section 4. Notice of Meeting. Written notice stating the date, time
and place of any meeting of shareholders shall be delivered not less than
ten days nor more than sixty days before the date of the meeting (unless a
different time period is provided by the Wisconsin Business Corporation Law
(the "WBCL") or the Articles of Incorporation), either personally or by
mail, by or at the direction of the Chairman, the President or the
Secretary, to each shareholder of record entitled to vote at such meeting
and to such other persons as required by the WBCL. In the event of any
Demand Special Meeting, such notice of meeting shall be sent not more than
thirty days after the Delivery Date. If mailed, notice pursuant to this
Section 4 shall be deemed to be effective when deposited in the United
States mail, addressed to the shareholder at his or her address as it
appears on the stock record books of the Corporation, with postage thereon
prepaid. Unless otherwise required by the WBCL or the Articles of
Incorporation, a notice of an Annual Meeting need not include a description
of the purpose for which the meeting is called. In the case of any Special
Meeting,
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<PAGE> 4
(a) the notice of meeting shall describe any business that the Board of
Directors shall have theretofore determined to bring before the meeting and (b)
in the case of a Demand Special Meeting, the notice of meeting (i) shall
describe any business set forth in the statement of purpose of the demands
received by the Corporation in accordance with Section 2 of Article I of these
By-laws and (ii) shall contain all of the information required in the notice
received by the Corporation in accordance with Section 12(b) of Article I of
these By-laws. If an Annual Meeting or Special Meeting is adjourned to a
different date, time or place, the Corporation shall not be required to give
notice of the new date, time or place if the new date, time or place is
announced at the meeting before adjournment; provided, however, that if a new
Meeting Record Date for an adjourned meeting is or must be fixed, the
Corporation shall give notice of the adjourned meeting to persons who are
shareholders as of the new Meeting Record Date.
Section 5. Fixing of Record Date. The Board of Directors may fix in advance
a date not less than ten days and not more than seventy days prior to the date
of an Annual Meeting or Special Meeting as the record date for the determination
of shareholders entitled to notice of, or to vote at, such meeting (the "Meeting
Record Date"). In the case of any Demand Special Meeting, (i) the Meeting Record
Date shall be not later than the 30th day after the Delivery Date and (ii) if
the Board of Directors fails to fix the Meeting Record Date within thirty days
after the Delivery Date, then the close of business on such 30th day shall be
the Meeting Record Date. The shareholders of record on the Meeting Record Date
shall be the shareholders entitled to notice of and to vote at the meeting.
Except as provided by the WBCL for a court-ordered adjournment, a determination
of shareholders entitled to notice of and to vote at an Annual Meeting or
Special Meeting is effective for any adjournment of such meeting unless the
Board of Directors fixes a new Meeting Record Date, which it shall do if the
meeting is adjourned to a date more than 120 days after the date fixed for the
original meeting. The Board of Directors may also fix in advance a date as the
record date for the purpose of determining shareholders entitled to take any
other action or determining shareholders for any other purpose. Such record date
shall be not more than seventy days prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken. The record
date for determining shareholders entitled to a distribution (other than a
distribution involving a purchase, redemption or other acquisition of the
Corporation's shares) or a share dividend is the date on which the Board of
Directors authorizes the distribution or share dividend, as the case may be,
unless the Board of Directors fixes a different record date.
Section 6. Shareholders' List for Meetings. After a Meeting Record Date has
been fixed, the Corporation shall prepare a list of the names of all of the
shareholders entitled to notice of the meeting. The list shall be arranged by
class or series of shares, if any, and show the address of and number of shares
held by each shareholder. Such list shall be available for inspection by any
shareholder, beginning two business days after notice of the meeting is given
for which the list was prepared and continuing to the date of the meeting, at
the Corporation's principal office or at a place identified in the meeting
notice in the city where the meeting will be held. A shareholder or his or her
agent may, on written demand, inspect and, subject to the limitations imposed by
the WBCL, copy the list, during regular business hours and at his or her
expense, during the period that it is available for inspection pursuant to this
Section 6. The Corporation shall make the shareholders' list available at the
meeting and any shareholder or his or her agent or attorney may inspect the list
at any time during the meeting or any adjournment thereof. Refusal or failure to
prepare or make available the shareholders' list shall not affect the validity
of any action taken at a meeting of shareholders.
Section 7. Quorum and Voting Requirements; Postponements; Adjournments.
(a) Shares entitled to vote as a separate voting group may take action on a
matter at any Annual Meeting or Special Meeting only if a quorum of those shares
exists with respect to that matter. If the Corporation has only one class of
stock outstanding, such class shall constitute a separate voting group for
purposes of this Section 7. Except as otherwise provided in the Articles of
Incorporation or the WBCL, a majority of the votes entitled to be cast on the
matter shall constitute a quorum of the voting group for action on that matter.
Once a share is represented for any purpose at any Annual Meeting or Special
Meeting, other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes of
determining whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new Meeting Record Date is or must be set
for the adjourned meeting. If a quorum exists, except in the case of the
election of directors, action on a matter shall be approved if the votes cast
within the voting group favoring the action exceed the votes cast opposing the
action, unless the Articles of Incorporation or the WBCL requires a greater
number of affirmative votes.
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Unless otherwise provided in the Articles of Incorporation, each director to be
elected shall be elected by a plurality of the votes cast by the shares entitled
to vote in the election of directors at an Annual Meeting or Special Meeting at
which a quorum is present.
(b) The Board of Directors acting by resolution may postpone and reschedule
any previously scheduled Annual Meeting or Special Meeting; provided, however,
that a Demand Special Meeting shall not be postponed beyond the 100th day
following the Delivery Date. Any Annual Meeting or Special Meeting may be
adjourned from time to time, whether or not there is a quorum, (i) at any time,
upon a resolution by shareholders if the votes cast in favor of such resolution
by the holders of shares of each voting group entitled to vote on any matter
theretofore properly brought before the meeting exceed the number of votes cast
against such resolution by the holders of shares of each such voting group or
(ii) at any time prior to the transaction of any business at such meeting, by
the President or pursuant to a resolution of the Board of Directors. No notice
of the time and place of adjourned meetings need be given except as required by
the WBCL. At any adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 8. Voting of Shares. Each outstanding share shall be entitled to
one vote upon each matter submitted to a vote at an Annual Meeting or Special
Meeting, except to the extent that the voting rights of the shares of any class
or classes are enlarged, limited or denied by the WBCL or the Articles of
Incorporation.
Section 9. Proxies. At any Annual Meeting or Special Meeting, a shareholder
may vote his or her shares in person or by proxy. A shareholder may appoint a
proxy to vote or otherwise act for the shareholder by signing an appointment
form, either personally or by his or her attorney-in-fact. An appointment of a
proxy is effective when received by the Secretary or other officer or agent of
the Corporation authorized to tabulate votes. An appointment is valid for eleven
months from the date of its signing unless a different period is expressly
provided in the appointment form. Unless otherwise provided, a proxy may be
revoked at any time before it is voted, either by written notice filed with the
Secretary or the acting secretary of the meeting or by oral notice given by the
shareholder to the presiding officer during the meeting. The presence of a
shareholder who has filed his or her appointment of proxy shall not itself
constitute a revocation. The Board of Directors shall have the power and
authority to make rules establishing presumptions as to the validity and
sufficiently of proxies.
Section 10. Acceptance of Instruments Showing Shareholder Action. If the
name signed on a vote, consent, waiver or proxy appointment corresponds to the
name of a shareholder, the Corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act of a
shareholder. If the name signed on a vote, consent, waiver or proxy appointment
does not correspond to the name of a shareholder, the Corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment and give
it effect as the act of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports to be that of
an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the shareholder
and, if the Corporation requests, evidence of fiduciary status acceptable to the
Corporation is presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the Corporation requests, evidence of this
status acceptable to the Corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial owner, or
attorney-in-fact of the shareholder and, if the Corporation requests, evidence
acceptable to the Corporation of the signatory's authority to sign for the
shareholder is presented with respect to the vote, consent, waiver or proxy
appointment.
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(e) Two or more persons are the shareholders as co-tenants or fiduciaries
and the name signed purports to be the name of at least one of the co-owners and
the person signing appears to be acting on behalf of all co-owners.
The Corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the Corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
Section 11. Waiver of Notice. A shareholder may waive any notice required
by the WBCL, the Articles of Incorporation or these By-laws before or after the
date and time stated in the notice. The waiver shall be in writing and signed by
the shareholder entitled to the notice, contain the same information that would
have been required in the notice under applicable provisions of the WBCL (except
that the time and place of meeting need not be stated) and be delivered to the
Corporation for inclusion in the corporate records. A shareholder's attendance
at any Annual Meeting or Special Meeting, in person or by proxy, waives
objection to all of the following: (a) lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting or promptly upon
arrival objects to holding the meeting or transacting business at the meeting;
and (b) consideration of a particular matter at the meeting that is not within
the purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
Section 12. Notice of Shareholder Business and Nomination of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by the
shareholders may be made at an Annual Meeting (A) pursuant to the
Corporation's notice of meeting, (B) by or at the direction of the Board of
Directors or (C) by any shareholder of the Corporation who is a shareholder
of record at the time of giving of notice provided for in this By-law and
who is entitled to vote at the meeting and complies with the notice
procedures set forth in this Section 12.
(ii) For nominations or other business to be properly brought before an
Annual Meeting by a shareholder pursuant to clause (C) of paragraph (a)(i) of
this Section 12, the shareholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a shareholder's
notice shall be received by the Secretary of the Corporation at the principal
offices of the Corporation not less than sixty days nor more than ninety days
prior to the second Saturday in the month of April; provided, however, that in
the event that the date of the Annual Meeting is advanced by more than thirty
days or delayed by more than sixty days from the second Saturday in the month
of April, notice by the shareholder to be timely must be so received not
earlier than the 90th day prior to the date of such Annual Meeting and not
later than the close of business on the later of (x) the 60th day prior to
such Annual Meeting and (y) the 10th day following the day on which public
announcement of the date of such meeting is first made. Such shareholder's
notice shall be signed by the shareholder of record who intends to make the
nomination or introduce the other business (or his duly authorized proxy or
other representative), shall bear the date of signature of such shareholder
(or proxy or other representative) and shall set forth: (A) the name and
address, as they appear on this corporation's books, of such shareholder and
the beneficial owner or owners, if any, on whose behalf the nomination or
proposal is made; (B) the class and number of shares of the Corporation which
are beneficially owned by such shareholder or beneficial owner or owners; (C)
a representation that such shareholder is a holder of record of shares of the
Corporation entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to make the nomination or introduce the other
business specified in the notice; (D) in the case of any proposed nomination
for election or re-election as a director, (I) the name and residence address
of the person or persons to be nominated, (II) a description of all
arrangements or understandings between such shareholder or beneficial owner or
owners and each nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination is to be made by such shareholder,
(III) such other information regarding each nominee proposed by such
shareholder as would be required to be disclosed in solicitations of proxies
for elections of directors,
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or would be otherwise required to be disclosed, in each case pursuant to
Regulation 14A under the Exchange Act, including any information that would
be required to be included in a proxy statement filed pursuant to Regulation
14A had the nominee been nominated by the Board of Directors and (IV) the
written consent of each nominee to be named in a proxy statement and to serve
as a director of the Corporation if so elected; and (E) in the case of any
other business that such shareholder proposes to bring before the meeting,
(I) a brief description of the business desired to be brought before the
meeting and, if such business includes a proposal to amend these By-laws, the
language of the proposed amendment, (II) such shareholder's and beneficial
owner's or owners' reasons for conducting such business at the meeting and
(III) any material interest in such business of such shareholder and
beneficial owner or owners.
(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 12 to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement naming all of
the nominees for director or specifying the size of the increased Board of
Directors made by the Corporation at least seventy days prior to the second
Saturday in the month of April, a shareholder's notice required by this
Section 12 shall also be considered timely, but only with respect to nominees
for any new positions created by such increase, if it shall be received by
the Secretary at the principal offices of the Corporation not later than the
close of business on the 10th day following the day on which such public
announcement is first made by the Corporation.
(b) Special Meetings. Only such business shall be conducted at
a Special Meeting as shall have been described in the notice of meeting sent to
shareholders pursuant to Section 4 of Article I of these By-laws. Nominations of
persons for election to the Board of Directors may be made at a Special Meeting
at which directors are to be elected pursuant to such notice of meeting (i) by
or at the direction of the Board of Directors or (ii) by any shareholder of the
Corporation who (A) is a shareholder of record at the time of giving of such
notice of meeting, (B) is entitled to vote at the meeting and (C) complies with
the notice procedures set forth in this Section 12. Any shareholder desiring to
nominate persons for election to the Board of Directors at such a Special
Meeting shall cause a written notice to be received by the Secretary of the
Corporation at the principal offices of the Corporation not earlier than ninety
days prior to such Special Meeting and not later than the close of business on
the later of (x) the 60th day prior to such Special Meeting and (y) the 10th day
following the day on which public announcement is first made of the date of such
Special Meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. Such written notice shall be signed by the shareholder
of record who intends to make the nomination (or his duly authorized proxy or
other representative), shall bear the date of signature of such shareholder (or
proxy or other representative) and shall set forth: (A) the name and address, as
they appear on the Corporation's books, of such shareholder and the beneficial
owner or owners, if any, on whose behalf the nomination is made; (B) the class
and number of shares of the Corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that such
shareholder is a holder of record of shares of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
make the nomination specified in the notice; (D) the name and residence address
of the person or persons to be nominated; (E) a description of all arrangements
or understandings between such shareholder or beneficial owner or owners and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination is to be made by such shareholder; (F) such
other information regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for elections of
directors, or would be otherwise required to be disclosed, in each case pursuant
to Regulation 14A under the Exchange Act, including any information that would
be required to be included in a proxy statement filed pursuant to Regulation 14A
had the nominee been nominated by the Board of Directors; and (G) the written
consent of each nominee to be named in a proxy statement and to serve as a
director of the Corporation if so elected.
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(c) General.
(i) Only persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to
serve as directors. Only such business shall be conducted at an Annual
Meeting or Special Meeting as shall have been brought before such
meeting in accordance with the procedures set forth in this Section 12.
The chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in this
Section 12 and, if any proposed nomination or business is not in
compliance with this Section 12, to declare that such defective
proposal shall be disregarded.
(ii) For purposes of this Section 12, "public
announcement" shall mean disclosure in a press release reported by the
Dow Jones News Service, Associated Press or comparable national news
service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d)
of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of
this Section 12, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section 12.
Nothing in this Section 12 shall be deemed to limit the Corporation's
obligation to include shareholder proposals in its proxy statement if
such inclusion is required by Rule 14a-8 under the Exchange Act.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers and Number. All corporate powers of the
Corporation shall be exercised by or under the authority of, and the business
and affairs of the Corporation managed under, the direction of its Board of
Directors, which shall consist of ten (10) directors. The Board of Directors
shall elect one of its members as Chairman, who, when present, shall preside at
all meetings of the shareholders and Board of Directors.
Section 2. Tenure and Qualifications. Each director shall hold office
until the annual meeting of shareholders at which his term expires and until his
successor shall have been elected, or until his prior death, resignation or
removal. A director shall not be eligible to stand for re-election at any annual
meeting of shareholders following his 70th birthday, except that any directors
who are over 70 years old and hold office before February 19, 1993, may be
entitled to be re-elected without limitation and to hold office until death,
resignation or removal. A director may resign at any time by delivering written
notice which complies with the Wisconsin Business Corporation Law to the Board
of Directors, to the Chairman of the Board, if any, or to the Corporation. A
director's resignation is effective when such notice is delivered unless the
notice specifies a later date. Directors need not be residents of the State of
Wisconsin or shareholders of the Corporation.
Section 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-law immediately after,
and at the same place as, the annual meeting of shareholders, and each adjourned
session thereof. The Board of Directors may provide, by resolution, the time and
place, either within or without the State of Wisconsin, for the holding of
additional regular meetings without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman, the President, Secretary or
any two directors. The person or persons calling any special meeting of the
Board of Directors may fix any place, either within or without the State of
Wisconsin, as the place for holding any special meeting of the Board of
Directors called by them, and if no other place is fixed, the place of meeting
shall be the principal business office of the Corporation in the State of
Wisconsin.
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Section 5. Notice; waiver. Notice of each meeting of the Board of
Directors (unless otherwise provided in or pursuant to Section 4, Article II)
shall be given by written notice delivered personally or given by telegram,
teletype, facsimile or other form of wire or wireless communication not less
than twenty-four (24) hours prior to the meeting or mailed or delivered by
private carrier not less than forty-eight (48) hours prior to the meeting to
each director at his business address or at such other address as such director
shall have designated in writing filed with the Secretary. If mailed or
delivered by a private carrier, such notice shall be deemed to be delivered when
deposited in the United States mail or delivered to the private carrier so
addressed, with postage or delivery cost thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. If notice be given by teletype, facsimile or
other form of wire or wireless communication, such notice shall be deemed to be
delivered when evidence of its transmittal is received. Whenever any notice
whatever is required to be given to any director of the Corporation under the
Articles of Incorporation or By-laws or any provision of law, a waiver thereof
in writing, signed at any time, whether before or after the time of meeting, by
the director entitled to such notice, shall be deemed equivalent to the giving
of such notice. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting and
objects thereat to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.
Section 6. Quorum. A majority of the directors shall constitute a
quorum for the transaction of business; and, except as otherwise provided by law
or by the Articles of Incorporation or these By-laws, a majority of the votes
cast at any meeting of the Board of Directors at which a quorum is present shall
be decisive of any action. A majority of the directors present at a meeting,
though less than quorum, may adjourn the meeting from time to time without
further notice.
Section 7. Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled until the next succeeding annual election by the affirmative vote of a
majority of the directors then in office, though less than a quorum of the Board
of Directors; provided, that in case of a vacancy created by the removal of a
director by vote of the shareholders, the shareholders shall have the right to
fill such vacancy at the same meeting or any adjournment thereof.
Section 8. Compensation. The Board of Directors, by affirmative vote of
a majority of the directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the Corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or to delegate authority to
an appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and employees
and to their estates, families, dependents or beneficiaries on account of prior
services rendered by such directors, officers and employees to the Corporation.
Section 9. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors or a committee thereof of which
he is a member at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the Secretary of the Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
Section 10. Committees. The Board of Directors by resolution adopted by
the affirmative vote of a majority of the number of directors set forth in
Section 1 of this Article II may designate one or more committees, each
committee to consist of three or more directors elected by the Board of
Directors, which shall have and may exercise, when the Board of Directors is not
in session, the powers of the Board of Directors in the management of the
business and affairs of the Corporation, in the committee's designated area of
responsibility, except action in respect to dividends to shareholders, election
of the principal officers or the filling of vacancies on the Board of Directors
or committees created pursuant to this section, with respect to the approval or
proposal of actions that the law requires to be approved by the shareholders,
amendment of the Articles of Incorporation, the adoption, amendment or repeal of
the
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By-laws, the approval of a plan of merger not requiring shareholder approval,
the authorization or approval of the re-acquisition of shares other than
according to a method prescribed by the Board of Directors, and the
authorization for approval of the issuance or sale or contract for sale of
shares, or the determination of the designation and relative rights, preferences
and limitations of a class or series of shares, unless authorized to do so by
the Board of Directors within prescribed limits. 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 or upon request by the chairman of such
meeting. Each such committee shall fix its own rules governing the conduct of
its activities and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request.
Section 11. Unanimous Consent Without Meeting. Any action required or
permitted by the Articles of Incorporation or By-laws or any provision of law to
be taken by the Board of Directors at a meeting or by resolution may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors then in office.
Section 12. Telephonic Meetings. Notwithstanding any place set forth in
the notice of the meeting or these By-laws, members of the Board of Directors
may participate in regular or special meetings of the Board of Directors and all
Committees of the Board of Directors by or through the use of any means of
communication by which all directors participating may simultaneously hear each
other, such as by conference telephone; provided, however, that the Chairman of
the Board or the chairman of the respective Committee and the Board or other
person or persons calling a meeting may determine that the directors cannot
participate by such means, in which case the notice of the meeting, or other
notice to directors given prior to the meeting, shall state that each director's
physical presence shall be required. If a meeting is conducted through the use
of such means of communication, then at the commencement of such meeting 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 such means shall be deemed present in person at such meeting.
ARTICLE III
OFFICERS
Section 1. General Officers. The general officers of the Corporation
shall be the President, one or more Vice Presidents, a Secretary, a Treasurer, a
Controller, and one or more Assistant Secretaries and one or more Assistant
Treasurers, each of whom shall be elected annually by the Board of Directors and
shall hold office until his or her successor shall have been duly elected and
qualified. The President shall be chief executive officer of the Corporation and
shall exercise general supervision of the business and affairs of the
Corporation subject to the directives of the Board of Directors. Further, each
general officer shall have such powers and duties as generally pertain to his or
her respective office; provided, that such powers and duties may from time to
time be modified, enlarged, restricted or augmented by the Board of Directors.
Section 2. Additional Officers. The Board of Directors may appoint such
additional corporate officers as it may deem necessary, each of whom shall have
such powers and duties as from time to time may be conferred by the Board of
Directors, and shall serve for such terms as the Board may fix.
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment, the best interests of the Corporation will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed.
Section 4. Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be filled by
the Board of Directors for the unexpired portion of the term. The resignation of
an officer by the delivery of written notice to the President or Secretary of
the Corporation is effective upon delivery of the notice, unless the notice
specifies a later date and the Corporation accepts the later date.
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ARTICLE IV
SPECIAL CORPORATE ACTS
Section 1. Voting of Securities Owned by This Corporation. Subject
always to the specific directions of the Board of Directors, (a) any shares or
other securities issued by any other corporation and owned or controlled by this
Corporation may be voted at any meeting of security holders of such other
corporation by the Chairman of this Corporation if he be present, or in his
absence by the President or any Vice President of this Corporation who may be
present, and (b) whenever, in the judgment of the Chairman, or in his absence,
of the President or any Vice President, it is desirable for this Corporation to
execute a proxy or give a shareholder's consent in respect to any shares or
other securities issued by any other corporation and owned by this Corporation,
such proxy or consent shall be executed in the name of this Corporation by the
Chairman, or the President or one of the Vice Presidents of this Corporation
without necessity of any authorization by the Board of Directors, affixation of
corporate seal or countersignature or attestation by another officer. Any person
or persons designated in the manner above stated as the proxy or proxies of this
Corporation shall have full right, power and authority to vote the share or
shares of stock issued by such other corporation and owned by this Corporation
the same as such share or shares might be voted by this Corporation.
Section 2. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute or deliver
any instrument in the name of and on behalf of the Corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages, and instruments of assignment or
pledge made by the Corporation shall be executed in the name of the Corporation
by the Chairman or the President or one of the Vice Presidents and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer; the
Secretary or an Assistant Secretary, when necessary or required, shall affix the
corporate seal thereto; and when so executed no other party to such instrument
or any third party shall be required to make any inquiry into the authority of
the signing officer or officers.
ARTICLE V
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of
the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the Chairman or the President or
a Vice President and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
stock transfer books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and canceled, except as provided in Section 6 of this Article V.
Section 2. Facsimile Signatures and Seal. The seal of the corporation
on any certificates for shares may be a facsimile. The signatures of the
Chairman or President or Vice President and the Secretary or Assistant Secretary
upon a certificate may be facsimiles if the certificate is countersigned by a
transfer agent, or registered by a registrar, other than the Corporation itself
or an employee of the Corporation.
Section 3. Signature by Former Officers. In case any officer, who has
signed or whose facsimile signature has been placed upon any certificate for
shares, shall have ceased to be such officer before such certificate is issued,
it may be issued by the Corporation with the same effect as if he were such
officer at the date of its issue.
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<PAGE> 12
Section 4. Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer the Corporation may treat
the registered owner of such shares as the person exclusively entitled to vote,
to receive notifications and otherwise to exercise all the rights and powers of
an owner. Where a certificate for shares is presented to the Corporation with a
request to register for transfer, the Corporation shall not be liable to the
owner or any other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the necessary
endorsements, and (b) the Corporation had no duty to inquire into adverse claims
or has discharged any such duty. The Corporation may require reasonable
assurance that said endorsements are genuine and effective and in compliance
with such other regulations as may be prescribed under the authority of the
Board of Directors.
Section 5. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the Corporation upon the transfer of such shares.
Section 6. Lost, Destroyed or Stolen Certificates. Where the owner
claims that his certificate for shares has been lost, destroyed or wrongfully
taken, then a new certificate shall be issued in place thereof if the owner (a)
so requests before the Corporation has notice that such shares have been
acquired by a bona fide purchaser, and (b) files with the Corporation a
sufficient indemnity bond, and (c) satisfied such other reasonable requirements
as the Board of Directors may prescribe.
Section 7. Consideration for Shares. The shares of the Corporation may
be issued for such consideration as shall be fixed from time to time by the
Board of Directors, provided that any shares having a par value shall not be
issued for a consideration less than the par value thereof. The consideration to
be paid for shares may be paid in whole or in part, in money, in other property,
tangible or intangible, or in labor or services actually performed for the
Corporation. When payment of the consideration for which shares are to be issued
shall have been received by the Corporation, such shares shall be deemed to be
fully paid and nonassessable by the Corporation. No certificate shall be issued
for any share until such share is fully paid.
Section 8. Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the Corporation.
ARTICLE VI
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the state of incorporation and the words, "Corporate Seal".
ARTICLE VII
AMENDMENTS
Section 1. By Shareholders. These By-laws may be altered, amended,
repealed, augmented and new By-laws may be adopted by the shareholders by
affirmative vote of not less than a majority of the votes represented by the
shares present or represented at any annual or special meeting of the
shareholders at which a quorum is in attendance.
Section 2. By Directors. These By-laws may also be altered, amended,
repealed, augmented and new By-laws may be adopted by the Board of Directors by
affirmative vote of a majority of the number of directors present at any meeting
at which a quorum is in attendance; but no By-law adopted by the shareholders
shall be amended or repealed by the Board of Directors if the By-law so adopted
so provides.
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<PAGE> 13
Section 3. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
By-laws then in effect but is taken or authorized by affirmative vote of not
less than the number of shares or the number of directors required to amend the
By-laws so that the By-laws would be consistent with such action, shall be given
the same effect as though the By-laws had been temporarily amended or suspended
so far, but only so far, as is necessary to permit the specific action so taken
or authorized.
ARTICLE VIII
INDEMNIFICATION
Section 1.01. Certain Definitions. All capitalized terms used in this
Article VIII and not otherwise hereinafter defined in this Section 1.01 shall
have the meaning set forth in Section 180.0850 of the Statute (as hereinafter
defined). The following capitalized terms (including any plural forms thereof)
used in this Article VIII shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise that directly or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the Corporation.
(b) "Authority" shall mean the entity selected by the Director
or Officer to determine his or her right to indemnification pursuant to Section
1.04 of this Article.
(c) "Board" shall mean the entire then elected and serving
board of directors of the Corporation, including all members thereof who are
Parties to the subject Proceeding or any related Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer
breached or failed to perform his or her duties to the Corporation and his or
her breach of or failure to perform those duties is determined, in accordance
with Section 1.04 of this Article, to constitute misconduct under Section
180.0851 (2) (a) 1, 2, 3 or 4 of the Statute.
(e) "Corporation," as used herein and as defined in the
Statute and incorporated by reference into the definitions of certain
capitalized terms used herein, shall mean this Corporation, including, without
limitation, any successor corporation or entity to the Corporation by way of
merger, consolidation or acquisition of all or substantially all of the capital
stock or assets of this Corporation.
(f) "Director or Officer" shall have the meaning set forth in
the Statute; provided, that, for purposes of this Article, it shall be
conclusively presumed that any Director or Officer serving as a director,
officer, partner, trustee, member of any governing or decision-making committee,
employee or agent of an Affiliate shall be so serving at the request of the
Corporation.
(g) "Disinterested Quorum" shall mean a quorum of the Board
who are not Parties to the subject Proceeding or any related Proceeding.
(h) "Party" shall have the meaning set forth in the Statute;
provided, that, for purposes of this Article, the term "Party" shall also
include any Director, Officer or employee who is or was a witness in a
Proceeding at a time when he or she has not otherwise been formally named a
Party thereto.
(i) "Proceeding" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article, "Proceeding" shall
include all Proceedings (i) brought under (in whole or in part) the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, their
respective state counterparts, and/or any rule or regulation promulgated under
any of the foregoing; (ii) brought before an Authority or otherwise to enforce
rights hereunder; (iii) any appeal from a Proceeding; and (iv) any Proceeding in
which the Director or Officer is a plaintiff or petitioner because he or she is
a Director or Officer, provided, however, that such Proceeding is authorized by
a majority vote of a Disinterested Quorum.
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<PAGE> 14
(j) "Statute" shall mean Sections 180.0850 through 180.0859,
inclusive, of the Wisconsin Business Corporation Law, Chapter 180 of the
Wisconsin Statutes, including any amendments thereto, but, in the case of any
such amendment, only to the extent such amendment permits or requires the
Corporation to provide broader indemnification rights than the Statute permitted
or required the Corporation to provide prior to such amendment.
Section 1.02. Mandatory Indemnification. To the fullest extent
permitted or required by the Statute, the Corporation shall indemnify a Director
or Officer against all Liabilities incurred by or on behalf of such Director or
Officer in connection with a Proceeding in which the Director or Officer is a
Party because he or she is a Director or Officer.
Section 1.03. Procedural Requirements.
(a) A Director or Officer who seeks indemnification under Section 1.02
of this Article shall make a written request therefor to the Corporation.
Subject to Section 1.03 (b) of this Article, within sixty days of the
Corporation's receipt of such request, the Corporation shall pay or reimburse
the Director or Officer for the entire amount of Liabilities incurred by the
Director or Officer in connection with the subject Proceeding (net of any
Expenses previously advanced pursuant to Section 1.05 of this Article).
(b) No indemnification shall be required to be paid by the Corporation
pursuant to Section 1.03 (a) of this Article if, within such sixty-day period:
(i) a Disinterested Quorum, by a majority vote thereof, determines that the
Director or Officer requesting indemnification engaged in misconduct
constituting a Breach of Duty; or (ii) a Disinterested Quorum cannot be
obtained.
(c) In either case of nonpayment pursuant to Section 1.03 (b) of this
Article, the Board shall immediately authorize by resolution that an Authority,
as provided in Section 1.04 of this Article, determine whether the Director's or
Officer's conduct constituted a Breach of Duty and, therefore, whether
indemnification should be denied hereunder.
(d) (i) If the Board does not authorize an Authority to determine the
Director's or Officer's right to indemnification hereunder within such sixty-day
period and/or (ii) if indemnification of the requested amount of Liabilities is
paid by the Corporation, then it shall be conclusively presumed for all purposes
that a Disinterested Quorum has determined that the Director or Officer did not
engage in misconduct constituting a Breach of Duty and, in the case of
subsection (i) above (but not subsection (ii)), indemnification by the
Corporation of the requested amount of Liabilities shall be paid to the Officer
or Director immediately.
Section 1.04. Determination of Indemnification.
(a) When the Board authorized an Authority to determine a Director's or
Officer's right to indemnification pursuant to Section 1.03 of this Article,
then the Director or Officer requesting indemnification shall have the absolute
discretionary authority to select one of the following as such Authority:
(i) An independent legal counsel; provided, that such counsel
shall be mutually selected by such Director or Officer and by a majority vote of
a Disinterested Quorum or, if a Disinterested Quorum cannot be obtained, then by
a majority vote of the Board;
(ii) A panel of three arbitrators selected from the panels of
arbitrators of the American Arbitration Association in Milwaukee, Wisconsin;
provided, that (A) one arbitrator shall be selected by such Director or Officer,
the second arbitrator shall be selected by a majority vote of a Disinterested
Quorum or, if a Disinterested Quorum cannot be obtained, then by a majority vote
of the Board, and the third arbitrator shall be selected by the two previously
selected arbitrators; and (B) in all other respects, such panel shall be
governed by the American Arbitration Association's then existing Commercial
Arbitration Rules; or
(iii) A court pursuant to and in accordance with Section 180.0854
of the Statute.
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<PAGE> 15
(b) In any such determination by the selected Authority there shall
exist a rebuttable presumption that the Director's or Officer's conduct did not
constitute a Breach of Duty and that indemnification against the requested
amount of Liabilities is required. The burden of rebutting such a presumption by
clear and convincing evidence shall be on the Corporation or such other party
asserting that such indemnification should not be allowed.
(c) The Authority shall make its determination within sixty days of
being selected and shall submit a written opinion of its conclusion
simultaneously to both the Corporation and the Director or Officer.
(d) If the Authority determines that indemnification is required
hereunder, the Corporation shall pay the entire requested amount of Liabilities
(net of any Expenses previously advanced pursuant to Section 1.05 of this
Article), including interest thereon at a reasonable rate, as determined by the
Authority, within ten days of receipt of the Authority's opinion; provided,
that, if it is determined by the Authority that a Director or Officer is
entitled to indemnification as to some claims, issues or matters, but not as to
other claims, issues or matters, involved in the subject Proceeding, the
Corporation shall be required to pay (as set forth above) only the amount of
such requested Liabilities as the Authority shall deem appropriate in light of
all of the circumstances of such Proceeding.
(e) The determination by the Authority that indemnification is required
hereunder shall be binding upon the Corporation regardless of any prior
determination that the Director or Officer engaged in a Breach of Duty.
(f) All Expenses incurred in the determination process under this
Section 1.04 by either the Corporation or the Director or Officer, including,
without limitation, all Expenses of the selected Authority, shall be paid by the
Corporation.
Section 1.05. Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse, within ten days after the
receipt of the Director's or Officer's written request therefor, the reasonable
Expenses of the Director or Officer as such Expenses are incurred, provided the
following conditions are satisfied:
(i) The Director or Officer furnishes to the Corporation an
executed written certificate affirming his or her good faith belief
that he or she has not engaged in misconduct which constitutes a Breach
of Duty; and
(ii) The Director or Officer furnishes to the Corporation an
unsecured executed written agreement to repay any advances made under
this Section 1.05 if it is ultimately determined by an Authority that
he or she is not entitled to be indemnified by the Corporation for such
Expenses pursuant to Section 1.04 of this Article.
(b) If the Director or Officer must repay any previously advanced
Expenses pursuant to this Section 1.05, such Director or Officer shall not be
required to pay interest on such amounts.
Section 1.06. Indemnification and Allowance of Expenses of Certain
Others.
(a) The Corporation shall indemnify a director or officer of an
Affiliate (who is not otherwise serving as a Director or Officer) against all
Liabilities, and shall advance the reasonable Expenses, incurred by such
director or officer in a Proceeding to the same extent hereunder as if such
director or officer incurred such Liabilities because he or she was a Director
or Officer, if such director or officer is a Party thereto because he or she is
or was a director or officer of the Affiliate.
(b) Except as hereinafter provided, the Corporation shall indemnify
each employee of the Corporation or an Affiliate of the Corporation acting
within the scope of his or her duties as such, against all Liabilities, and
shall advance Reasonable Expenses, incurred by or on behalf of such employee in
connection with a Proceeding in which he or she is a Party by virtue of being an
employee of the Corporation or an Affiliate of the Corporation, to the same
extent and in the same manner as a Director or Officer hereunder. The foregoing
provision shall not apply, and the Corporation shall not indemnify any
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<PAGE> 16
employee, with respect to any Liability to the extent covered by insurance
maintained by or on behalf of such employee (other than insurance maintained by
the Corporation or an Affiliate of the Corporation).
(c) The Board may, in its sole and absolute discretion as it deems
appropriate, pursuant to a majority vote thereof, indemnify against Liabilities
incurred by, and/or provide for the allowance of reasonable Expenses of, an
authorized agent of the Corporation acting within the scope of his or her duties
as such and who is not otherwise a Director or Officer.
Section 1.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of a Director, Officer and/or any individual who is or was
an authorized employee or agent of the Corporation against any Liability
asserted against or incurred by such individual in his or her capacity as such
or arising from his or her status as such, regardless of whether the Corporation
is required or permitted to indemnify against any such Liability under this
Article.
Section 1.08. Notice to the Corporation. A Director, Officer or
employee shall promptly notify the Corporation in writing when he or she has
actual knowledge of a Proceeding which may result in a claim or indemnification
against Liabilities or allowance of Expenses hereunder, but the failure to do so
shall not relieve the Corporation of any liability to the Director, Officer or
employee hereunder unless the Corporation shall have been irreparably prejudiced
by such failure (as determined by an Authority).
Section 1.09. Report to Shareholders. In the event that the Corporation
indemnifies or advances expenses to a Director or Officer in connection with a
proceeding brought in the right of the Corporation, the Corporation shall report
the indemnification or advance in writing to shareholders with or before the
notice of the next meeting of shareholders. The report shall be delivered to
shareholders who are entitled to receive notice of the next meeting of
shareholders.
Section 1.10. Severability. If any provision of this Article shall be
deemed invalid or inoperative, or if a court of competent jurisdiction
determines that any of the provisions of this Article contravene public policy,
this Article shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such provisions
which are invalid or inoperative or which contravene public policy shall be
deemed, without further action or deed by or on behalf of the Corporation, to be
modified, amended and/or limited, but only to the extent necessary to render the
same valid and enforceable.
Section 1.11. Nonexclusivity of this Article. The rights of a Director,
Officer or employee (or any other person) granted under this Article shall not
be deemed exclusive of any other rights to indemnification against Liabilities
or advancement of Expenses which the Director, Officer or employee (or such
other person) may be entitled to under any written agreement, Board resolution,
vote of shareholders of the Corporation or otherwise, including without
limitation under the Statute. Nothing contained in this Article shall be deemed
to limit the Corporation's obligations to indemnify a Director, Officer or
employee under the Statute.
Section 1.12. Contractual Nature of this Article; Repeal or Limitation
of Rights. This Article shall be deemed to be a contract between the Corporation
and each Director, Officer and employee and any repeal or other limitation of
this Article or any repeal or limitation of the Statute or any other applicable
law shall not limit any rights of indemnification against Liabilities or
allowance of Expenses then existing or arising out of events, acts or omissions
occurring prior to such repeal or limitation, including, without limitation, the
right of indemnification against Liabilities or allowance of Expenses for
Proceedings commenced after such repeal or limitation to enforce this Article
with regard to acts, omissions or events arising prior to such repeal or
limitation.
Section 1.13. Subrogation Rights. Notwithstanding any provision to the
contrary set forth herein, the Corporation's obligations hereunder are not
intended to constitute, and shall not constitute, a waiver of any right to
subrogation which the Corporation may have against any person or entity.
-27-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from the Company's
Quarterly report on Form 10-Q and is qualified in its entirety by reference to
such 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 848
<SECURITIES> 0
<RECEIVABLES> 22,463
<ALLOWANCES> 0
<INVENTORY> 21,889
<CURRENT-ASSETS> 45,902
<PP&E> 76,404
<DEPRECIATION> (42,040)
<TOTAL-ASSETS> 93,705
<CURRENT-LIABILITIES> 34,244
<BONDS> 0
0
0
<COMMON> 3,446
<OTHER-SE> 43,801
<TOTAL-LIABILITY-AND-EQUITY> 93,705
<SALES> 109,299
<TOTAL-REVENUES> 109,299
<CGS> 65,846
<TOTAL-COSTS> 98,836
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 347
<INCOME-PRETAX> 10,116
<INCOME-TAX> 3,820
<INCOME-CONTINUING> 6,296
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,296
<EPS-PRIMARY> 1.74
<EPS-DILUTED> 1.61
</TABLE>
