<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 June 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 ________________
Commission File Number 1-6706
BADGER METER, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0143280
--------- ----------
(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
-------------------------------------------------------
(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 July 27, 1998
- ----------------------------- ----------------------------
Common Stock, $1.00 par value 2,514,904
Class B Common Stock, $.10 par value 1,119,268
<PAGE> 2
BADGER METER, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
Part I. Financial Information:
<S> <C> <C>
Item 1 Financial Statements:
Consolidated Condensed Balance Sheets - -
June 30, 1998 and December 31, 1997 3
Consolidated Condensed Statements of Operations - - Three and
Six Months Ended June 30, 1998 and 1997 4
Consolidated Condensed Statements of Cash Flows - -
Six Months Ended June 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 4 Submission of Matters to a Vote of Security Holders 9
Item 5 Market for Registrant's Common Equity and Related Matters 10
Item 6(a) Exhibits 10
Item 6(b) Reports on Form 8-K 10
Exhibit Index 12
</TABLE>
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<PAGE> 3
Part I - Financial Information
BADGER METER, INC.
Item 1 Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Assets
June 30, December 31,
1998 1997
---- ----
(Unaudited)
<S> <C> <C>
Current assets:
Cash $ 260 $ 1,055
Receivables 19,409 19,193
Inventories:
Finished goods 3,895 4,095
Work in process 10,143 10,871
Raw materials and purchased parts 6,656 6,632
----------- -----------
Total inventories 20,694 21,598
Prepaid expenses 689 693
----------- -----------
Total current assets 41,052 42,539
Property, plant and equipment, at cost 72,737 64,407
Less accumulated depreciation (41,625) (40,423)
------------ -----------
31,112 23,984
Intangible assets, at cost less accumulated amortization 1,551 650
Prepaid pension 6,461 6,751
Deferred income taxes 2,264 2,264
Deferred charges and other assets 3,860 6,109
----------- -----------
Total assets $ 86,300 $ 82,297
=========== ===========
</TABLE>
<TABLE>
Liabilities and Shareholders' Equity
<S> <C> <C>
Current liabilities:
Short-term debt $ 11,557 $ 11,245
Payables 7,136 7,196
Accrued compensation and employee benefits 4,962 5,339
Other accrued liabilities 4,077 3,630
Income and other taxes 715 1,259
----------- -----------
Total current liabilities 28,447 28,669
Accrued non-pension postretirement benefits 7,546 7,807
Other accrued employee benefits 3,764 3,426
Long-term debt 797 928
Shareholders' equity:
Common Stock 3,323 3,240
Class B Common Stock 112 112
Capital in excess of par value 10,247 8,315
Reinvested earnings 35,893 33,057
Less: Employee benefit stock (811) (917)
Treasury stock, at cost (3,018) (2,340)
----------- -----------
Total shareholders' equity 45,746 41,467
----------- -----------
Total liabilities and shareholders' equity $ 86,300 $ 82,297
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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<PAGE> 4
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 36,430 $ 34,104 $ 69,929 $ 65,806
Operating costs and expenses:
Cost of sales 22,163 21,480 42,219 41,704
Marketing and administrative 8,309 7,562 16,928 15,009
Research and engineering 2,221 1,949 4,308 3,800
----------- ----------- ----------- -----------
32,693 30,991 63,455 60,513
----------- ----------- ----------- -----------
Operating earnings 3,737 3,113 6,474 5,293
Interest expense 104 97 248 198
----------- ----------- ----------- -----------
Earnings before income taxes 3,633 3,016 6,226 5,095
Provision for income taxes 1,338 1,116 2,334 1,885
----------- ----------- ----------- -----------
Net earnings $ 2,295 $ 1,900 $ 3,892 $ 3,210
=========== =========== =========== ===========
Per share amounts: *
Net earnings:
Basic $ .63 $ .53 $ 1.07 $ .90
=========== =========== =========== ===========
Diluted $ .59 $ .50 $ 1.00 $ .85
=========== =========== =========== ===========
Dividends declared -
Common Stock $ .15 $ .12 $ .30 $ .23
=========== =========== =========== ===========
Dividends declared -
Class B Common Stock $ .14 $ .11 $ .27 $ .21
=========== =========== =========== ===========
Weighted-average shares
used in computation:
Basic 3,632,886 3,567,471 3,622,874 3,584,438
Impact of dilutive stock
options 269,990 227,387 278,057 214,511
----------- ----------- ----------- -----------
Diluted 3,902,876 3,794,858 3,900,931 3,798,949
=========== =========== =========== ===========
</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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<PAGE> 5
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------
1998 1997
---- ----
<S> <C> <C>
Operating activities:
Net earnings $ 3,892 $ 3,210
Adjustments to reconcile net
earnings to net cash provided
by (used for) operations:
Depreciation 2,609 1,993
Amortization 77 114
Noncurrent employee benefits 473 594
Changes in:
Receivables (216) (1,738)
Inventory 904 (1,643)
Current liabilities other than short-term debt (534) 1,533
Prepaid expenses and other 4 70
----------- -----------
Total adjustments 3,317 923
----------- -----------
Net cash provided by (used for) operations 7,209 4,133
----------- -----------
Investing activities:
Property, plant and equipment (9,737) (2,693)
Other - net 1,271 (761)
----------- -----------
Net cash provided by (used for) investing activities (8,466) (3,454)
----------- -----------
Financing activities:
Bank borrowings (repayments) 181 363
Dividends (1,056) (806)
Stock options and ESSOP 2,015 395
Treasury stock transactions (678) (1,285)
----------- -----------
Net cash provided by (used for)
financing activities 462 (1,333)
----------- -----------
Increase (decrease) in cash (795) (654)
Beginning of year 1,055 1,123
----------- -----------
End of period $ 260 $ 469
=========== ============
Supplemental disclosures of cash flow information:
Cash paid (refunded) during the period for:
Income taxes $ 2,178 $ 1,576
=========== ============
Interest $ 335 $ 192
=========== ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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<PAGE> 6
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 June 30, 1998 and the results of operations for the three and six-month
periods ended June 30, 1998 and 1997 and the cash flows for the six-month
periods ended June 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 six months ended June 30, 1998, the company repurchased 13,058
shares of common stock for an aggregate purchase price of $678,000.
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. The company does not
expect to have any problems with its products as a result of this issue.
6. During the past three and a half calendar years, the various trust
beneficiaries 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 10,950
through June 30, 1998. The WFVT has indicated that its beneficiaries
presently intend to continue diversifying in the future. The company does
not have a commitment to purchase any of these shares.
7. In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards Number 133 "Accounting for Derivative
Instruments and Hedging Activities", which is required to be adopted in
years beginning after June 15, 1999. Because of the company's minimal use
of derivatives, management does not anticipate that the adoption of the
new Statement will have a significant effect on earnings or the financial
position of the company.
8. On May 15, 1998, the Board of Directors of the company adopted a
Shareholder Rights Plan declaring a dividend of one right for each share
of the company's common stock outstanding on or after June 1, 1998. In the
event a person or group acquires or seeks to acquire 20% or more of the
outstanding common stock of the company, the rights may be exercised
(except by the acquiring person whose rights are canceled). Upon exercise,
each right entitles the holder to purchase from the company one share of
common stock at an initial exercise price of $140 (subject to adjustment)
or, upon the occurrence of certain events, common stock of the company or
the acquiring company having a market value equivalent to two times the
exercise price. Subject to certain conditions, the rights are redeemable
by the Board of Directors for $.01 per right and are exchangeable for
shares of common stock. The rights have no voting power and expire on May
26, 2008.
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<PAGE> 7
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition
Receivables increased 1.1%, or $216,000, from the December 31, 1997 balance due
to increased sales. Inventories decreased 4.2%, or $904,000, as increased
production requirements were offset by efficient inventory management.
Intangible assets increased $901,000 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 $8,330,000 due to
regular payments in connection with the Milwaukee facility expansion plus other
equipment purchases.
Prepaid pension decreased $290,000 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 $2,249,000, 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 remained relatively stable since December 31, 1997. Accrued
compensation and employee benefits decreased 7%, or $377,000, due primarily to
payments of 1997 incentive compensation during the first quarter of 1998. Other
accrued liabilities increased 12.3%, or $447,000, due primarily to additional
reserves for after-sale costs. Income and other taxes payable decreased
$544,000 due to the timing of estimated tax payments. Accrued non-pension
postretirement benefits decreased $261,000 since December 31, 1997, and other
accrued employee benefits increased $338,000 due to timing of benefit payments.
Long-term debt decreased $131,000 due primarily to a $100,000 regular payment
made on the debt related to the Employee Savings and Stock Ownership Plan ("The
ESSOP").
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 $312,000 since December 31, 1997, as cash required
for fixed asset additions (primarily the facility expansion) exceeded cash
generated by net earnings.
As of June 30, 1998, the company had approximately $38,000,000 of credit lines
with domestic and foreign banks of which $11,557,000 was in use. This compares
to $2,967,000 in use at June 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 second quarter of 1998 of $36,430,000 reflect a 6.8% increase
over sales of $34,104,000 for the same period in 1997. Likewise, net sales for
the first six months of 1998 increased 6.3% or $4,123,000 over the same period
in 1997. These increases were primarily related to higher unit sales of
lubrication meters and residential 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 37.0% in the second quarter of 1997 to
39.2% in the second quarter of 1998. For the six month periods, gross profit
margins increased from 36.6% in 1997 to 39.6% in 1998. These increases were
primarily due to efficiencies generated by increased manufacturing capacity
utilization related to residential water meters.
-7-
<PAGE> 8
Marketing and administrative costs increased 9.9% for the quarter and 12.8% for
the six-month period ended June 30, 1998, as compared to the same periods of
1997 due to general wage and cost increases, plus additional staffing to
support increased sales. Research and engineering expenses increased 14% for
the quarter and 13.4% for the six-month period ended June 30, 1998, as compared
to the same periods of 1997 due to increased staffing and other costs
associated with continued product development initiatives. Interest expense
increased between the periods due to higher debt balances.
The effective tax rate for the first six months of 1998 was estimated to be
37.5%, which is slightly higher than the 37.0% for the first six months of 1997
due to reduced tax benefits on lower international sales and other changes in
tax credit estimates.
Earnings for the second quarter of 1998 were $2,295,000, an increase of 20.8%
over second quarter 1997 earnings of $1,900,000. The 1998 year-to-date earnings
of $3,892,000 increased 21.2% over the same period of 1997 earnings of
$3,210,000. These increases were due primarily to higher sales and improved
margins. The percentage increases in earnings per share were lower for both
periods due to the impact of dilutive options and increased shares outstanding.
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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<PAGE> 9
Part II - Other Information
Item 4 Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders was held April 24, 1998.
(b) 1. Proxies were solicited for the amendment of Article Fifth of the
Restated Articles of Incorporation to classify the Board of Directors,
make the removal of directors possible only for cause, and permit the
future amendments of Article Fifth only with a supermajority. There was
no solicitation in opposition to these amendments, and all passed with
at least 94.3% votes in favor of the amendment. As of the record date,
February 27, 1998, the total number of votes represented by shares of
Common Stock and Class B Common Stock was 13,758,082.
2. Proxies were solicited for the election of ten directors, divided into
three classes. There was no solicitation in opposition to management's
nominees and all nominees were re-elected with at least 99% of the
votes cast.
3. Proxies were solicited for the amendment of the Restated Articles of
Incorporation to increase the authorized shares of Common Stock from
5,000,000 to 20,000,000 and Class B Common Stock from 5,000,000 to
20,000,000. 98.5% of the votes were cast in favor of the amendment.
<TABLE>
<CAPTION>
Votes Votes Votes Broker
(c) 1. Amendments to Article Fifth: FOR AGAINST ABSTAIN Non-Votes
--- ------- ------- ---------
<S> <C> <C> <C> <C>
Classified Board 11,523,501 642,919 15,602 430,139
Director Removal for Cause 11,515,415 636,472 30,135 430,139
Supermajority to Amend Article 11,488,034 661,437 32,551 430,139
</TABLE>
2. The following table represents the aggregate votes related to the
election of directors:
<TABLE>
<CAPTION>
Votes Votes
NAME FOR WITHHELD Not Voted
---- ----- -------- ---------
<S> <C> <C> <C>
CLASS ONE - ONE-YEAR TERM
James L. Forbes 12,607,041 5,120 1,145,921
Charles F. James, Jr. 12,607,041 5,120 1,145,921
John J. Stollenwerk 12,607,081 5,080 1,145,921
James O. Wright, Jr. 12,606,436 5,725 1,145,921
CLASS TWO - TWO-YEAR TERM
James O. Wright 12,606,216 5,945 1,145,921
Robert M. Hoffer 12,606,941 5,220 1,145,921
Andrew J. Policano 12,607,041 5,120 1,145,921
CLASS THREE - THREE-YEAR TERM
Kenneth P. Manning 12,607,041 5,120 1,145,921
Donald J. Schuenke 12,606,921 5,240 1,145,921
Pamela B. Strobel 12,604,427 7,734 1,145,921
</TABLE>
-9-
<PAGE> 10
<TABLE>
<CAPTION>
Votes Votes Votes
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
3. Amendment to Increase Number of
Authorized Shares 12,418,863 172,778 20,520
</TABLE>
(d) Not applicable.
Item 5 Market for Registrant's Common Equity and Related Stockholder Matters
A shareholder wishing to include a proposal pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended ("Rule 14a-8"), in the proxy
statement for the 1999 Annual Meeting of Shareholders must forward the proposal
to the company by November 24, 1998. After February 10, 1999, notice to the
company of a shareholder proposal submitted other than pursuant to Rule 14a-8
will be considered untimely, and the persons named in the proxies solicited by
the Board of Directors for the 1999 Annual Meeting of Shareholders may exercise
discretionary voting power with respect to any such proposal as to which the
company does not receive timely notice.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits:
( 3.0) (i) Articles of Incorporation
( 3.0) (ii) By-laws
( 4.0) Rights Agreement, dated as of May 26, 1998, between Badger
Meter, Inc. and Firstar Trust Company. [Incorporated by
reference to Exhibit (4.1) to the Registration Statement on
Form 8-A of Badger Meter, Inc., dated as of May 26, 1998
(Commission File No. 1-67706)].
(27.0) Financial Data Schedule
(b) Reports on Form 8-K:
A current report on Form 8-K, dated May 26, 1998, reporting under Item 5
"Other Events" the adoption of a Shareholder Rights Plan was filed with the
Securities and Exchange Commission.
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<PAGE> 11
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: July 29, 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> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C> <C>
( 3.0) (i) Articles of Incorporation 13
( 3.0) (ii) By-laws 19
( 4.0) Rights Agreement, dated as of May 26, 1998, between Badger Meter,
Inc. and Firstar Trust Company. [Incorporated by reference to
Exhibit (4.1) to the Registration Statement on Form 8-A of Badger
Meter, Inc., dated as of May 26, 1998 (Commission File No.
1-6706)].
(27.0) Financial Data Schedule
</TABLE>
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<PAGE> 1
EXHIBIT (3.0) (I)
RESTATED
ARTICLES OF INCORPORATION
OF
BADGER METER, INC.
The following Restated Articles of Incorporation duly adopted
pursuant to the authority and provisions of Chapter 180 of the Wisconsin
Statutes supersede and take the place of the existing articles of incorporation
and amendments thereto:
ARTICLE FIRST
The name of this corporation is "BADGER METER, INC."
ARTICLE SECOND
The Corporation may engage in any lawful activity within the
purposes for which corporations may be organized under the Wisconsin Business
Corporation Law.
ARTICLE THIRD
The total number of shares of all classes of capital stock which
the Corporation shall have authority to issue is forty (40) million shares,
consisting of twenty (20) million shares of a class designated "Common Stock"
having a par value of one dollar ($1.00) per share, and twenty (20) million
shares of a class designated "Class B Common Stock" of a par value of ten cents
($.10) per share. All issued shares of Common Stock, including shares held in
the treasury of the Corporation, shall continue to be designated Common Stock.
Any and all such shares of Common Stock and Class B Common Stock
may be issued for such consideration, not less than the par value thereof, as
shall be fixed from time to time by the Board of Directors. Any and all such
shares so issued, the full consideration for which has been paid or delivered,
shall be deemed fully paid stock and shall not be liable to any further call or
assessment thereon, and the holders of such shares shall not be liable for any
further payments except as otherwise provided by applicable Wisconsin law. The
powers, preferences, limitations and relative rights of the Common Stock and
the Class B Common Stock shall be as follows:
(1) Voting Rights and Powers.
(a) With respect to all matters upon which shareholders are
entitled to vote or to which shareholders are entitled to give consent, the
holders of the outstanding shares of Common Stock and the holders of the
outstanding shares of Class B Common Stock shall vote together as a single
class, and every holder of any outstanding shares of Common Stock shall be
entitled to cast thereon one (1) vote in person or by proxy for each share of
Common Stock standing in his name on the stock transfer records of the
Corporation, and every holder of any outstanding shares of Class B Common Stock
shall be entitled to cast thereon ten (10) votes in person or by proxy for each
share of Class B Common Stock standing in his name on the stock transfer
records of the Corporation; provided that, with respect to any proposed
amendment to these Restated Articles of Incorporation which would increase or
decrease the number of authorized shares of either the Common Stock or the
Class B Common Stock, increase or decrease the par value of the shares of the
Common Stock or the Class B Common Stock, or alter or change the powers,
preferences, relative voting power or special rights of the shares of the
Common Stock or the Class B Common Stock so as to affect them adversely, the
approval of a majority of the votes entitled to be cast by the holders of the
class affected by the proposed amendment, voting separately as a class, shall
be obtained in addition to the approval of a majority of the votes entitled to
be cast by the holders of the Common Stock and the Class B Common Stock voting
together as a single class as herein before provided.
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<PAGE> 2
(b) Notwithstanding the foregoing, with respect to the election
of directors at the annual meeting of shareholders to be held in 1987, holders
of Common Stock, voting as a separate class shall be entitled to elect the
number of directors which constitutes 25% of the authorized number of members
of the Board of Directors. If such number is not a whole number, then holders
of Common Stock shall be entitled to elect the number of directors which
constitutes the nearest whole number greater than 25% of such membership.
Holders of Common Stock and Class B Common Stock, voting as a single class,
shall be entitled to elect the remaining directors. After the 1987 annual
meeting of shareholders, all directors shall be elected by holders of Common
Stock and Class B Common Stock voting as a single class.
(2) Dividends and Distributions.
(a) Cash Dividends. As and when cash dividends may be declared
from time to time by the Board of Directors, the cash dividend payable with
respect to each share of the Common Stock shall in all cases be in an amount
equal to one hundred ten percent (110%) of the amount of the cash dividend
payable with respect to each share of the Class B Common Stock. Cash dividends
may be declared and payable with respect to the Common Stock without a
concurrent cash dividend declared and payable with respect to the Class B
Common Stock. Distributions declared by the Board of Directors to be in
connection with the partial or complete liquidation of the Corporation or any
of its subsidiaries shall not be considered to be cash dividends for the
purposes of this Paragraph (2).
(b) Other Dividends and Distributions. Each share of Common Stock
and Class B Common Stock shall be equal in respect of rights to dividends
(other than those payable in cash) and distributions (including distributions
declared by the Board of Directors to be in connection with the partial or
complete liquidation of the Corporation or any of its subsidiaries) when and as
declared, in the form of stock or other property of the Corporation, except
that in the case of dividends or other distributions payable in stock of the
Corporation, including distributions pursuant to stock split-ups or divisions,
which occur after the expiration of the period during which shares of the Class
B Common Stock are first issued by the Corporation, only shares of Common Stock
shall be distributed with respect to the Common Stock and only shares of Class
B Common Stock shall be distributed with respect to the Class B Common Stock.
(3) Restrictions on Transfer of the Class B Common Stock.
(a) No beneficial owner (as hereinafter defined) of shares of
Class B Common Stock (hereinafter referred to as a "Class B Shareholder") may
transfer, and the Corporation shall not register the transfer of, shares of
Class B Common Stock, whether by sale, assignment, gift, bequest, appointment
or otherwise, except to a Permitted Transferee of such Class B Shareholder. A
"Permitted Transferee" shall be defined as (i) the Class B Shareholder and any
other Class B Shareholder; (ii) the spouse of the Class B Shareholder; (iii)
any parent and any lineal descendant (including any adopted child) of any
parent of the Class B Shareholder or of the Class B Shareholder's spouse; (iv)
any trustee, guardian or custodian for, or any executor, administrator or other
legal representative of the estate of, any of the foregoing Permitted
Transferees; (v) the trustee of a trust (including a voting trust) for the
benefit of such Class B Shareholder and/or any of his or her Permitted
Transferees; (vi) any corporation, partnership or other entity if a majority of
the beneficial ownership thereof is held by the Class B Shareholder and/or any
of his or her Permitted Transferees; (vii) any director of the Corporation; and
(viii) any officer of the Corporation elected or appointed by the Corporation's
Board of Directors and (ix) any trustee of a trust created or organized in the
United States and forming part of a stock bonus, pension or profit sharing plan
of the Company for the exclusive benefit of the employees or their
beneficiaries. If a Class B shareholder and all of his or her Permitted
Transferees cease, for whatever reason, to hold a majority of the beneficial
ownership of any corporation, partnership or other entity specified in clause
(vi) above, then any and all shares of Class B Common Stock held by such
corporation, partnership or other entity will automatically, without further
deed or action, be converted into a like number of shares of Common Stock. For
the purpose of this Paragraph (3) the term "beneficial owner(s)" of any shares
of Class B Common Stock shall mean a person or persons who, or entity or
entities which, have or share the power, either singly or jointly, to direct
the voting or disposition of such shares.
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(b) For purposes of this Paragraph (3), a transfer shall not
include (i) a distribution by a corporation to its shareholders pursuant to a
dissolution, liquidation, dividend or similar distribution, (ii) a distribution
to partners of a partnership in proportion to their partnership interests or
(iii) a disposition of a trust to any beneficiaries of such trust pursuant to
the terms of such trust.
(c) Notwithstanding anything to the contrary set forth herein,
any Class B Shareholder may pledge his shares of Class B Common Stock to a
pledgee pursuant to a bonafide pledge of such shares as collateral security for
indebtedness due to the pledgee, provided that such shares shall not be
transferred to or registered in the name of the pledgee and shall remain
subject to the provisions of this Paragraph (3). In the event of foreclosure or
other similar action by the pledgee, such pledged shares of Class B Common
Stock may only be transferred to a Permitted Transferee of the pledgor or
converted into shares of Common Stock, as the pledgee may elect.
(d) Any purported transfer of shares of Class B Common Stock not
permitted hereunder shall be void and of no effect. The purported transferee
shall have no rights as a shareholder of the Corporation and no other rights
against, or with respect to, the Corporation, except the right to receive
shares of Common Stock upon the conversion of his shares of Class B Common
Stock into shares of Common Stock. The Corporation may, as a condition to the
transfer or the registration of a transfer of shares of Class B Common Stock to
a purported Permitted Transferee, require the furnishing of such affidavits or
other proof as it deems necessary to establish that such transferee is a
Permitted Transferee.
(e) The Corporation shall note on the certificates for shares of
Class B Common Stock the restrictions on transfer and registration of transfer
imposed by this Paragraph (3).
(f) Shares of Class B Common Stock shall be registered in the
name(s) of the beneficial owner(s) thereof and not in "street" or nominee name.
(4) Conversion of the Class B Common Stock.
(a) Each share of Class B Common Stock may at any time or from
time to time, at the option of the respective holder thereof, be converted into
one (1) fully paid and non assessable share of Common Stock. Such conversion
right shall be exercised by the surrender of the certificate representing such
share of Class B Common Stock to be converted to the Corporation at any time
during normal business hours at the principal executive offices of the
Corporation (to the attention of the Secretary of the Corporation), or if an
agent for the registration or transfer of shares of Class B Common Stock is
then duly appointed and acting (said agent being referred to in this Article
Third as the "Transfer Agent") then at the office of the Transfer Agent,
accompanied by a written notice of the election by the holder thereof to
convert and (if so required by the Corporation or the Transfer Agent) by
instruments of transfer, in form satisfactory to the Corporation and to the
Transfer Agent, duly executed by such holder or his duly authorized attorney,
and transfer tax stamps or funds therefor, if required pursuant to Paragraph
(4)(e), below.
(b) As promptly as practicable after the surrender for conversion
of a certificate representing shares of Class B Common Stock in the manner
provided in Paragraph (4)(a), above, and the payment in cash of any amount
required by the provisions of Paragraphs (4)(a) and (4)(e), the Corporation
will deliver or cause to be delivered at the office of the Transfer Agent to,
or upon the written order of, the holder of such certificate, a certificate or
certificates representing the number of full shares of Common Stock issuable
upon such conversion, issued in such name or names as such holder may direct.
Such conversion shall be deemed to have been made immediately prior to the
close of business on the date of the surrender of the certificate representing
shares of Class B Common Stock, and all rights of the holder of such shares as
such holder shall cease at such time and the person or persons in whose name or
names the certificate or certificates representing the shares of Common Stock
are to be issued shall be treated for all purposes as having become the record
holder or holders of such shares of Common Stock at such time; provided,
however, that any such surrender and payment on any date when the stock
transfer records of the Corporation shall be closed shall constitute the person
or persons in whose name or names the certificate or certificates representing
shares of Common Stock are to be issued as the record holder or holders thereof
for all purposes immediately prior to the close of business on the next
succeeding day on which such stock transfer records are open.
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(c) No adjustments in respect of dividends shall be made upon the
conversion of any share of Class B Common Stock; provided, however, that if a
share shall be converted subsequent to the record date for the payment of a
dividend or other distribution on shares of Class B Common Stock but prior to
such payment, the registered holder of such share at the close of business on
such record date shall be entitled to receive the dividend or other
distribution payable on such share on the date set for payment of such dividend
or other distribution notwithstanding the conversion thereof or the
Corporation's default in payment of the dividend or distribution due on such
date.
(d) The Corporation covenants that it will at all times reserve
and keep available, solely for the purpose of issuance upon conversion of the
outstanding shares of Class B Common Stock, such number of shares of Common
Stock as shall be issuable upon the conversion of all such outstanding shares;
provided, that nothing contained herein shall be construed to preclude the
Corporation from satisfying its obligations in respect of the conversion of the
outstanding shares of Class B Common Stock by delivery of purchased shares of
Common Stock which are held in the treasury of the Corporation. The Corporation
covenants that if any shares of Common Stock required to be reserved for
purposes of conversion hereunder, require registration with or approval of any
governmental authority under any federal or state law before such shares of
Common Stock may be issued upon conversion, the Corporation will cause such
shares to be duly registered or approved, as the case may be. The Corporation
will endeavor to list the shares of Common Stock required to be delivered upon
conversion prior to such delivery upon each national securities exchange, if
any, upon which the outstanding Common Stock is listed at the time of such
delivery. The Corporation covenants that all shares of Common Stock which shall
be issued upon conversion of the shares of Class B Common Stock, will, upon
issue, be fully paid and non assessable and not subject to any preemptive
rights.
(e) The issuance of certificates for shares of Common Stock upon
conversion of shares of Class B Common Stock shall be made without charge for
any stamp or other similar tax in respect of such issuance. However, if any
such certificate is to be issued in a name other than that of the holder of the
share or shares of Class B Common Stock converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the amount of any
tax which may be payable in respect of any transfer involved in such issuance
or shall establish to the satisfaction of the Corporation that such tax has
been paid.
(f) When the number of outstanding shares of Class B Common Stock
falls below two percent (2%) of the aggregate number of shares of Common Stock
and Class B Common Stock then outstanding, the outstanding shares of Class B
Common Stock shall be deemed without further act on anyone's part to be
immediately and automatically converted into shares of Common Stock, and stock
certificates formerly representing outstanding shares of Class B Common Stock
shall thereupon and thereafter be deemed to represent a like number of shares
of Common Stock.
(5) Issuance of the Class B Common Stock.
(a) Initial Issuance. On and subject to the terms and conditions
of this Paragraph (5), on or before 5:00 p.m. Milwaukee, Wisconsin time ("close
of business") on December 31, 1986, or such later date and time as the Board of
Directors may, prior to December 31, 1986, determine, each outstanding share of
Common Stock shall be convertible by the holder thereof, into one share of
Class B Common Stock. Any such conversion shall be deemed to be effective as of
the date of receipt by the Corporation or the Transfer Agent of the following
documents: (i) a proper written notice of conversion by the holder of shares of
Common Stock, addressed to the Transfer Agent, designating the number of shares
of Common Stock to be converted into shares of Class B Common Stock, and (ii)
the stock certificate or certificates representing the number of shares of
Common Stock to be so converted into shares of Class B Common Stock, duly
endorsed for transfer or accompanied by appropriate stock powers, with
signatures guaranteed by a national banking association or a member firm of The
New York Stock Exchange, Inc. or the American Stock Exchange, Inc. Upon the
effective date of any such conversion, all shares of Common Stock so converted
shall be deemed to be issued and held in the treasury of the Corporation. The
issuance of a certificate or certificates for shares of the Class B Common
Stock shall be made without charge for any stamp or other similar tax in
respect of such issuance. However, if any such certificate or certificates is
or are to be issued in a name other than that of the holder of the share or
shares of Common Stock converted, the person or persons requesting the issuance
thereof shall pay to the Transfer Agent or to the Corporation the amount of any
tax which may be payable in respect to any such transfer.
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Notwithstanding the foregoing, any shareholder who holds shares of Common Stock
in "street" or nominee name must have such shares re-registered in such
shareholder's own name before converting such shares to Class B Common Stock
and such Class B Common Stock certificate or certificates may only be issued in
the name of the registered holder of the converted shares of Common Stock, or
his Permitted Transferee. Subject to the foregoing, as promptly as practicable
after the surrender for conversion of a certificate or certificates
representing shares of the Common Stock and payment of any tax as herein before
provided, the Corporation will deliver or cause to be delivered at the office
of the Transfer Agent to, or upon the written order of, the holder of such
certificate or certificates, a certificate or certificates representing the
number of shares of Class B Common Stock issuable upon such conversion. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of the surrender of the certificate or certificates
representing shares of the Common Stock (if on such date the transfer records
of the Corporation shall be closed, then immediately prior to the close of
business on the first date thereafter that said records shall be open), and all
rights of such holder arising from ownership of the shares of Common Stock
shall cease at that time, and the person or persons in whose name or names the
certificate or certificates representing shares of the Class B Common Stock are
to be issued shall be treated for all purposes as having become the record
holder or holders of such shares of Class B Common Stock at such time and shall
have and may exercise all the rights and powers appertaining thereto. No
adjustments in respect of past cash dividends shall be made upon the conversion
of any share of the Common Stock; provided, however, that if any shares of the
Common Stock shall be converted subsequent to the record date for the payment
of a cash or stock dividend or other distribution on shares of the Common
Stock, but prior to such payment, the registered holder of such shares of
Common Stock at the close of business on such record date shall nonetheless be
entitled to receive that cash or stock dividend or other distribution. The
Corporation shall reserve and keep available, solely for the purpose of issue
upon conversion of outstanding shares of the Common Stock, such number of
shares of the Class B Common Stock as may be issuable upon the conversion of
all such outstanding shares of the Common Stock. All shares of the Class B
Common Stock which may be issued upon conversion of shares of the Common Stock
will, upon issuance, be fully paid and non assessable.
(b) Subsequent Issuance. Following the expiration of the period
for initial issuance, the Board of Directors may only issue shares of the Class
B Common Stock in the form of a distribution or distributions pursuant to a
stock dividend on or split-up of the shares of the Class B Common Stock and
only to the then holders of the outstanding shares of the Class B Common Stock
in conjunction with and in the same ratio as a stock dividend on or split-up of
the shares of the Common Stock. Except as provided in this subparagraph (b),
the Corporation shall not issue additional shares of Class B Common Stock after
expiration of the period during which shares of Class B Common Stock are first
issued by the Corporation, and all shares of Class B Common Stock surrendered
for conversion shall be retired, unless otherwise approved by the affirmative
vote of the holders of a majority of the outstanding shares of the Common Stock
and Class B Common Stock entitled to vote, voting together as a single class,
as provided in Paragraph (1) of this Article Third.
No holder of shares of any class of stock or any other class of
securities of the Corporation shall be entitled as a matter of right to
subscribe for, purchase or receive any part of any issue of stock of the
Corporation of any class either at present authorized or of any future increase
or creation, including without limitation, any securities convertible into
stock of any class, except as the Corporation in the discretion of the board of
directors may elect or contract to extend such right.
ARTICLE FOURTH
Outstanding shares of any class of capital stock of the
Corporation shall not be subject to the limited voting provisions of Section
180.25(9)(a) of the Wisconsin Statutes.
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ARTICLE FIFTH
1(a). There shall be a Board of Directors which shall consist of
such number of Directors as shall from time-to-time be specified in the Bylaws
but which shall not be less than three (3). The Directors shall be divided into
three classes, designated Class I, Class II, and Class III, and all classes
shall be as nearly equal in number as possible.
The terms of office of the Directors initially classified shall be as follows:
at the 1998 Annual Meeting of Shareholders, Class I Directors shall be elected
for a one-year term expiring at the next Annual Meeting of Shareholders, Class
II Directors shall be elected for a two-year term expiring at the second
succeeding Annual Meeting of Shareholders, and Class III Directors shall be
elected for a three-year term expiring at the third succeeding Annual Meeting
of Shareholders. At each Annual Meeting of Shareholders after such initial
classification, Directors to replace those whose terms expire at such Annual
Meeting shall be elected to hold office until the third succeeding Annual
Meeting. Each Director shall hold office until the expiration of his term and
until his successor is elected and qualified or until his earlier death,
resignation or removal. If the number of Directors is changed, (a) any newly
created directorships or any decrease in directorships shall be so portioned
among the classes as to make all classes as nearly as equal as possible, and
(b) when the number of Directors is increased by the Board of Directors and any
newly created directorships are filled by the Board of Directors, there shall
be no classification of the additional Directors until, and the terms of the
additional Directors shall expire at, the next Annual Meeting of Shareholders.
1(b). Removal of Directors. A Director may be removed only for
cause and only by the shareholders by the affirmative votes of a majority of
the votes entitled to be cast upon removing him at a meeting called for the
purpose of removing him, and the meeting notice must state that the purpose, or
one of the purposes, of the meeting is removal of the Director and must state
the reason or reasons why the Director is subject to removal.
1(c). Amendments. Notwithstanding any other provision of these
Restated Articles of Incorporation, the provisions of this Article Fifth shall
be amended, altered, changed or repealed only by the affirmative vote of
shareholders holding at least seventy percent (70%) of the voting power of the
then outstanding shares of all classes of capital stock of the Company,
considered for this purpose as a single class.
ARTICLE SIXTH
The majority affirmative voting requirements of Section 180.25(2)
of the Wisconsin Statutes are hereby expressly elected and deemed applicable to
this Corporation as if this Corporation had been organized after January 1,
1973. These articles may be amended by resolution setting forth such amendment
or amendments adopted at any meeting of the shareholders of the Corporation by
a vote of at least a majority of the votes represented by shares of all of the
Common Stock and Class B Common Stock of the corporation then outstanding,
except as set forth herein or as restricted by the statutes of the State of
Wisconsin.
ARTICLE SEVENTH
The address of the registered office of the corporation at the
time of adoption of these amended and restated Articles of Incorporation is
4545 West Brown Deer Road, Brown Deer, Wisconsin (P.O. address: Milwaukee,
Wisconsin 53223); and the name of the registered agent at such address is
Deirdre C. Elliott.
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EXHIBIT (3.0) (II)
RESTATED BY-LAWS
OF
BADGER METER, INC.
(AS AMENDED APRIL 24, 1998)
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of shareholders of the
Corporation shall be held on the second Saturday in April of each year, at the
registered office of the Corporation in Brown Deer, Wisconsin, or at such other
time or place as may be designated by the directors, for the purpose of
electing directors and for the transaction of such other business as may be
brought before the meeting.
Section 2. Special Meetings. Special meetings of the shareholders of
the Corporation may be called by the Chairman, the President or the Board of
Directors, and shall be called by the Secretary on a written request to him
signed by the holders of record of one-tenth of all the outstanding shares
entitled to vote at the meeting. In the event a meeting is called on request of
shareholders as aforesaid, the Secretary shall designate a date not more than
fifteen (15) days following the receipt by him of such written request as the
date of the meeting. Special meetings shall be held at such place in Brown
Deer, Wisconsin or elsewhere, and at such time as the Chairman, the President
or Board of Directors may designate; and in case the Chairman, the President or
Board of Directors shall fail or neglect to make such designation, the
Secretary shall designate the time and place of such meeting.
Section 3. Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
(10) days nor more than fifty (50) days before the date of the meeting, either
personally or by mail, by or at the direction of the Chairman, the President,
or the Secretary, or other officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting unless a different
period is required by law or the Articles of Incorporation. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears on the stock
record books of the Corporation with postage thereon prepaid.
Section 4. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors shall fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than seventy (70) days and not less then
ten (10) days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall be applied to any
adjournment thereof except that no such adjourned meeting shall be held more
than seventy (70) days after the date fixed for such determination of
shareholders.
Section 5. Voting Lists. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make a complete list
of the shareholders entitled to vote at such meeting, or any adjournment
thereof, with the address of and the number of shares held by each, which list
shall be produced and kept open at the offices of the Corporation and shall be
subject to the inspection of any shareholder during the period beginning two
(2) business days after notice of the meeting for which the list was prepared
was given and continuing to the date of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the shareholders
entitled to examine such list or transfer books or to vote at any meeting of
shareholders. Failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
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Section 6. Quorum. Except as otherwise provided in the Articles of
Incorporation, a majority of votes represented by shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Once a share is represented for any purpose at the 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 set or must be set for
the adjourned meeting. If a quorum is present, the affirmative vote of the
majority of the votes represented by shares at the meeting and entitled to vote
on the subject matter shall be the act of the shareholders unless the vote of a
greater number or voting by classes is required by law or the Articles of
Incorporation. Though less than a quorum of the outstanding shares are
represented at a meeting, a majority of the votes represented by the shares so
represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the meeting
as originally notified.
Section 7. Voting of Shares. Each outstanding share shall be entitled
to one vote upon each matter submitted to a vote at a meeting of shareholders,
except to the extent that the voting rights of the shares of any class or
classes are enlarged, limited or denied by the Articles of Incorporation.
Section 8. 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 duly authorized attorney in fact. Such proxy shall be
filed with the Secretary of the Corporation before or at the time of the
meeting. Unless otherwise provided in the proxy, a proxy may be revoked at any
time before it is voted, either by written notice filed with the Secretary or
the acting secretary of the meeting or by oral notice given by the shareholder
to the presiding officer during the meeting. The presence of a shareholder who
has filed his proxy shall not of itself constitute a revocation. No proxy shall
be valid after eleven months from the date of its execution, unless otherwise
provided in the proxy. The Board of Directors shall have the power and
authority to make rules establishing presumptions as to the validity and
sufficiency of proxies.
Section 9. 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 receivor or
trustee in bankruptcy of the shareholder and, if the corporation requests,
evidence of the status acceptable to the corporation is presented with respect
to the vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if the
corporation requests, evidence acceptable to the corporation of the signatory's
authority to sign for the shareholder is presented with respect to the vote,
consent, waiver or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
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The corporation may reject a vote, consent, waiver or proxy
appointment if the Secretary or other officer or agent of the Corporation
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 10. Waiver of Notice by Shareholders. Whenever any notice
whatever is required to be given to any shareholder of the Corporation under
the Articles of Incorporation or By-laws or any provision of law, a waiver
thereof in writing, signed at any time, whether before or after the time of
meeting, by the shareholder entitled to such notice, shall be deemed equivalent
to the giving of such notice; provided that such waiver in respect to any
matter of which notice is required under any provisions of the Wisconsin
Business Corporation Law, shall contain the same information as would have been
required to be included in such notice, except the time and place of meeting.
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.
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.
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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 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.
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<PAGE> 5
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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<PAGE> 6
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.
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.
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<PAGE> 7
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.
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
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<PAGE> 8
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.
-26-
<PAGE> 9
(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> 10
(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.
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<PAGE> 11
The foregoing provision shall not apply, and the Corporation shall not
indemnify any 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.
-29-
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 260
<SECURITIES> 0
<RECEIVABLES> 19,409
<ALLOWANCES> 0
<INVENTORY> 20,694
<CURRENT-ASSETS> 41,052
<PP&E> 72,737
<DEPRECIATION> (41,625)
<TOTAL-ASSETS> 86,300
<CURRENT-LIABILITIES> 28,447
<BONDS> 0
0
0
<COMMON> 3,435
<OTHER-SE> 42,311
<TOTAL-LIABILITY-AND-EQUITY> 86,300
<SALES> 69,929
<TOTAL-REVENUES> 69,929
<CGS> 42,219
<TOTAL-COSTS> 63,455
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 248
<INCOME-PRETAX> 6,226
<INCOME-TAX> 2,334
<INCOME-CONTINUING> 3,892
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,892
<EPS-PRIMARY> 1.07
<EPS-DILUTED> 1.00
</TABLE>
