<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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------ ------------------
Commission File Number 1-6706
--------
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 16, 1999
- ----------------------------- ----------------------------
Common Stock, $1.00 par value 2,575,741
Class B Common Stock, $.10 par value 1,072,086
<PAGE> 2
BADGER METER, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Item 1 Financial Statements:
Consolidated Condensed Balance Sheets --
June 30, 1999 and December 31, 1998 3
Consolidated Condensed Statements of Operations --
Three and Six Months Ended June 30, 1999 and 1998 4
Consolidated Condensed Statements of Cash Flows --
Six Months Ended June 30, 1999 and 1998 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
Stockholder Matters 10
Item 6(a) Exhibits 10
Item 6(b) Reports on Form 8-K 10
Exhibit Index 12
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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,
1999 1998
-------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash $ 712 $ 2,371
Receivables 20,972 19,814
Inventories:
Finished goods 4,585 5,270
Work in process 9,183 10,089
Raw materials and purchased parts 7,484 7,044
-------- --------
Total inventories 21,252 22,403
Prepaid expenses 1,033 1,064
-------- --------
Total current assets 43,969 45,652
Property, plant and equipment, at cost 85,599 79,934
Less accumulated depreciation (45,130) (42,523)
-------- --------
40,469 37,411
Intangible assets, at cost less accumulated amortization 1,354 1,452
Prepaid pension 6,010 6,262
Deferred income taxes 2,938 2,930
Other assets 3,619 3,238
-------- --------
Total assets $ 98,359 $ 96,945
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $ 11,902 $ 14,315
Payables 9,653 10,174
Accrued compensation and employee benefits 5,212 5,521
Other accrued liabilities 4,703 4,386
Income and other taxes 1,450 480
-------- --------
Total current liabilities 32,920 34,876
Accrued non-pension postretirement benefits 7,173 7,459
Other accrued employee benefits 4,389 4,162
Long-term debt 2,844 2,600
Shareholders' equity:
Common Stock 3,432 3,392
Class B Common Stock 107 111
Capital in excess of par value 13,301 12,732
Reinvested earnings 42,945 39,198
Less: Employee benefit stock (2,595) (2,606)
Treasury stock, at cost (6,157) (4,979)
-------- --------
Total shareholders' equity 51,033 47,848
-------- --------
Total liabilities and shareholders' equity $ 98,359 $ 96,945
======== ========
</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,
------------------ -----------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 38,512 $ 36,430 $ 76,909 $ 69,929
Cost of sales 23,042 22,163 46,665 42,219
----------- ----------- ----------- -----------
Gross margin 15,470 14,267 30,244 27,710
Selling, engineering and
administration 10,635 10,530 21,651 21,236
----------- ----------- ----------- -----------
Operating earnings 4,835 3,737 8,593 6,474
Interest expense 228 104 488 248
----------- ----------- ----------- -----------
Earnings before income taxes 4,607 3,633 8,105 6,226
Provision for income taxes 1,773 1,338 3,120 2,334
----------- ----------- ----------- -----------
Net earnings $ 2,834 $ 2,295 $ 4,985 $ 3,892
=========== =========== =========== ===========
Per share amounts: *
Earnings per share:
Basic $ .77 $ .63 $ 1.35 $ 1.07
=========== =========== =========== ===========
Diluted $ .73 $ .59 $ 1.27 $ 1.00
=========== =========== =========== ===========
Dividends declared -
Common Stock $ .18 $ .15 $ .36 $ .30
=========== =========== =========== ===========
Dividends declared -
Class B Common Stock $ .16 $ .14 $ .32 $ .27
=========== =========== =========== ===========
Shares used in computation of:
Basic 3,663,794 3,632,886 3,684,441 3,622,874
Impact of dilutive stock
options 237,881 269,990 238,234 278,057
----------- ----------- ----------- -----------
Diluted 3,901,675 3,902,876 3,922,675 3,900,931
=========== =========== =========== ===========
</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,
----------------
1999 1998
----------- -----------
<S> <C> <C>
Operating activities:
Net earnings $ 4,985 $ 3,892
Adjustments to reconcile net
earnings to net cash provided
by (used for) operations:
Depreciation 3,044 2,609
Amortization 98 77
Noncurrent employee benefits 204 473
Changes in:
Receivables (1,158) (216)
Inventory 1,151 904
Current liabilities other than short-term debt 457 (534)
Prepaid expenses and other 23 4
----------- ------------
Total adjustments 3,819 3,317
----------- ------------
Net cash provided by (used for) operations 8,804 7,209
----------- ------------
Investing activities:
Property, plant and equipment (6,102) (9,737)
Other - net (381) 1,271
----------- ------------
Net cash provided by (used for) investing activities (6,483) (8,466)
----------- ------------
Financing activities:
Bank borrowings (repayments) (2,169) 181
Dividends (1,238) (1,056)
Stock options and ESSOP 642 2,015
Treasury stock transactions (1,215) (678)
----------- ------------
Net cash provided by (used for)
financing activities (3,980) 462
----------- ------------
Increase (decrease) in cash (1,659) (795)
Beginning of year 2,371 1,055
----------- ------------
End of period $ 712 $ 260
=========== ============
Supplemental disclosures of cash flow information:
Cash paid (refunded) during the period for:
Income taxes $ 1,974 $ 2,178
=========== ============
Interest $ 517 $ 335
=========== ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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BADGER METER, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements of Badger Meter, Inc. (the "Company")
contain all adjustments (consisting only of normal recurring accruals)
necessary to present fairly the consolidated condensed financial position
at June 30, 1999 and the results of operations for the three and six-month
periods ended June 30, 1999 and 1998 and the cash flows for the six-month
periods ended June 30, 1999 and 1998. 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 1998
data to conform to the 1999 presentation.
2. The consolidated condensed balance sheet at December 31, 1998, 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, 1998. 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, 1999, the Company repurchased 35,436
shares of common stock for an aggregate purchase price of $1,215,000.
4. 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, 1998. Many systems have already been updated while other systems are in
process. All remaining upgrades are expected to be completed during the
third quarter of 1999 and management does not expect to incur any
significant costs in excess of normal software upgrade costs. Testing has
begun and will continue until the implementation is complete. If the
Company and its vendors do not properly address this issue, the Company
could incur additional transaction processing costs and there could be
interruptions in the Company's supply chain, resulting in increased costs
as the Company obtains alternate vendors. However, the Company does not
expect to have any significant problems with its products, systems or
vendors as a result of this issue.
5. The various trusts of the Wright Family Voting Trust ("WFVT") continue to
sell Company common stock for diversification purposes. The WFVT released
for sale 34,984 shares in 1995, 38,850 shares in 1996, 21,400 shares in
1997, 49,450 shares in 1998 and 30,494 shares through the period ended June
30, 1999. The WFVT has indicated that these trusts presently intend to
continue diversifying in the future. The Company does not have a commitment
to purchase any of these shares.
6. In the ordinary course of business, the Company enters into various
material purchase agreements with its vendors, some of which contain
minimum purchase quantity commitments extending beyond one year. Future
purchase commitments are not expected to exceed normal usage requirements.
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<PAGE> 7
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition
Receivables as of June 30, 1999 increased 5.8%, or $1,158,000, from the December
31, 1998 balance primarily due to the increased sales. Inventories decreased
5.1% as efficient inventory management offset increased production requirements.
Property, plant and equipment (at cost) increased $5,665,000 in connection with
completion of the Milwaukee facility expansion and remodeling plus other
equipment purchases. Prepaid pension decreased $252,000 since December 31, 1998,
due to the recording of normal pension expense with no funding payments required
due to the overfunded status of the plan.
Payables decreased $521,000 since December 31, 1998 due to timing of payments.
Income and other taxes payable increased $970,000 due to the timing of estimated
tax payments and a higher tax rate for 1999 compared to 1998. Changes in accrued
non-pension postretirement benefits and other accrued employee benefits since
December 31, 1998, were primarily due to the timing of benefit payments.
Long-term debt increased $244,000 due to the addition of a capital lease during
the second quarter of 1999.
Since December 31, 1998, 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.
The Company paid down short-term debt by $2,413,000 since December 31, 1998 as
cash generated by operations exceeded cash requirements for fixed asset
additions, dividends and stock repurchases.
As of June 30, 1999, the Company had approximately $39,300,000 of credit lines
with domestic and foreign banks of which $11,902,000 was in use. This compares
to $11,557,000 in use at June 30, 1998 and $14,315,000 at December 31, 1998. 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 1999 of $38,512,000 reflect a 5.7% increase
over the second quarter of 1998. For the six-month period ended June 30, 1999,
sales of $76,909,000 represented a 10% increase over the first six months of
1998. These increases were primarily due to higher unit sales of both
residential and commercial/industrial water meters, which offset lower sales of
valves and automotive fluid meters. The increases also represent higher
international sales of water meters, primarily into Mexico.
Gross margins increased from 39.2% in the second quarter of 1998 to 40.2% in the
second quarter of 1999 due to favorable pricing and product mix offsetting
higher manufacturing capacity costs. The six-month margins for 1999 were 39.3%,
down from 39.6% for the first six months of 1998 due to the higher manufacturing
capacity costs in the first quarter of 1999.
Selling, engineering and administrative costs increased only 1.0% for the second
quarter of 1999 compared to the same quarter in 1998, and 2.0% for the six-month
period, due to cost controls offsetting normal personnel and expense increases.
Interest expense increased between the periods due to higher debt balances,
including debt associated with the increased ESSOP loan. Also, interest related
to the Milwaukee facility expansion was capitalized during 1998, but no such
offset was made in 1999 due to completion of the expansion.
The effective tax rates for both the quarter and six-month periods of 1999 were
estimated to be 38.5%, which is higher than the 1998 rates due to favorable tax
credits in 1998 and impacts of foreign tax rates.
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<PAGE> 8
Earnings for the second quarter of 1999 were $2,834,000, an increase of 23.5%
over second quarter 1998 earnings of $2,295,000. This increase was primarily due
to the increases in sales and improved margins, while the Company's selling,
engineering and administration expenses increased only 1%. For the six-month
periods, the 28.1% increase in net earnings was primarily due to the 10%
increase in sales, while selling, engineering and administration expenses only
increased 2%.
Other Matters
The Company is subject to contingencies relative to environmental laws and
regulations. Currently, the Company is in the process of resolving issues
relative to two landfill sites and litigation filed by the owner of property
near one of the Company's plants, which alleges damage to property value by
virtue of alleged spillage from past Company operations. Also, the Company is in
the process of settling a suit alleging violation of Proposition 65,
California's environmental regulation. 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 all
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 23, 1999.
(b) 1. 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>
DIRECTORS ELECTED TO THREE-YEAR
TERMS EXPIRING AT 2002 ANNUAL MEETING
James L. Forbes 12,628,832 11,834 766,518
Charles F. James, Jr. 12,628,950 11,716 766,518
John J. Stollenwerk 12,629,240 11,426 766,518
James O. Wright, Jr. 12,629,351 11,315 766,518
DIRECTOR ELECTED TO A TWO-YEAR TERM EXPRING AT THE 2001
ANNUAL MEETING
Robert D. Belan 12,627,998 12,668 766,518
</TABLE>
2. DIRECTORS CONTINUING IN OFFICE WITH TERMS EXPIRING AT THE 2000
ANNUAL MEETING
James O. Wright
Robert M. Hoffer
Andrew J. Policano
3. DIRECTORS CONTINUING IN OFFICE WITH TERMS EXPIRING AT THE 2001
ANNUAL MEETING
Kenneth P. Manning
Donald J. Schuenke
Pamela B. Strobel
(c) 1. Proxies were solicited to restate the Restated Articles of
Incorporation to (i) provide that all outstanding shares of Class
B Common Stock will automatically be converted into shares of
Common Stock on a share-for-share basis upon the closing of a
public offering of Common Stock with gross proceeds to the Company
of not less than $20,000,000 (a "Qualified Public Offering"); (ii)
provide that Section 180.1150 of the Wisconsin Business
Corporation Law will become applicable to the Company upon the
closing of a Qualified Public Offering; and (iii) eliminate
certain provisions of the Restated Articles relating to the
initial issuance of the Class B Common Stock in 1986 that are no
longer relevant. There was no solicitation in opposition to these
amendments. The restating of the Restated Articles required the
affirmative vote of a majority of the votes entitled to be cast at
the meeting by the holders of Common Stock and holders of Class B
Common Stock, each voting separately as a class, as well as the
affirmative vote of a majority of the votes entitled to be cast at
the meeting by all shareholders voting together as a single class.
The proposal passed with 75% of the votes of holders of Common
Stock, 95.4% of the votes of holders of Class B shares, and a
combined vote of 91.4% of the total votes entitled to be cast at
the meeting. As of the record date, February 26, 1999, the total
number of votes represented by shares of Common Stock and Class B
Common Stock was 13,405,624. The following table represents the
aggregate votes cast on the restatement proposal:
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<PAGE> 10
<TABLE>
<CAPTION>
Votes Votes Votes Broker
FOR AGAINST ABSTAIN NON-VOTES
----- ------- ------- ---------
<S> <C> <C> <C> <C>
Common Stock 1,941,173 18,643 27,617 335,273
Class B Common Stock 10,317,960 0 0 0
Common and Class B
Voting as a Single Class 12,259,133 18,643 27,617 335,273
</TABLE>
2. Proxies were solicited for the adoption of the Badger Meter,
Inc. 1999 Stock Option Plan. There were no solicitations in
opposition to the proposed adoption of the plan, and the plan
was adopted with 98.8% votes in favor of its adoption. The
following table represents the aggregate votes related to the
adoption of the stock option plan:
<TABLE>
<CAPTION>
Votes Votes Votes
FOR AGAINST ABSTAIN
----- ------- -------
<S> <C> <C>
12,468,263 112,953 31,618
</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 2000 Annual Meeting of Shareholders must forward the proposal
to the company by November 23,1999. In addition, a shareholder who otherwise
intends to present business at the 2000 Annual Meeting (including nominating
persons for election as directors) must comply with the requirements set forth
in the Company's Restated By-laws. Among other things, to bring business before
an annual meeting, a shareholder must give written notice thereof, complying
with the Restated By-laws, to the Secretary of the Company not less than 60 days
and not more than 90 days prior to the second Saturday in the month of April
(subject to certain exceptions if the annual meeting is advanced or delayed a
certain number of days). Accordingly, if the Company does not receive notice of
a shareholder proposal submitted otherwise than pursuant to Rule 14a-8 prior to
February 8, 2000, then the notice will be considered untimely and the Company
will not be required to present such proposal at the 2000 Annual Meeting. If the
Board of Directors chooses to present such proposal at the 2000 Annual Meeting,
then the persons named in the proxy solicited by the Board of Directors for the
2000 Annual Meeting may exercise discretionary voting power with respect to such
proposal.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits:
(3.0) (i) Articles of Incorporation
(3.0) (ii) By-laws
(27.0) Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the three months ended June
30, 1999.
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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 27, 1999 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
Page Number
(3.0) (i) Articles of Incorporation 13
(3.0) (ii) By-laws 20
(27.0) Financial Data Schedule
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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
Until such time as no shares of Class B Common Stock are
issued and outstanding, Sections (B1) through (B8) of this Article Third shall
govern and be applicable. From and after such time as no shares of Class B
Common Stock are issued and outstanding, Sections (A1) through (A5) of this
Article Third shall govern and be applicable.
At such time as Sections (B1) through (B8) of this Article
Third shall no longer govern and apply, the appropriate officers of the
corporation shall promptly (i) cause to be prepared and duly filed with the
Wisconsin Department of Financial Institutions such documents as are necessary
to restate these Restated Articles of Incorporation to eliminate Sections (B1)
through (B8) of this Article Third and any other words, sentences, clauses or
paragraphs contained in these Restated Articles of Incorporation providing for
or relating to Class B Common Stock and/or the conversion of shares of Class B
Common Stock into shares of Common Stock and (ii) cause to be prepared and sent
to registered holders of Common Stock a notice, which may be included in another
communication to shareholders generally, to the effect that such action has been
taken.
(A1) Stock.
(a) 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 a single class designated "Common Stock" having a par
value of one dollar ($1.00) per share.
(b) Any and all such shares of 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.
(A2) Voting Rights and Powers.
With respect to all matters upon which shareholders are
entitled to vote or to which shareholders are entitled to give consent, 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.
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<PAGE> 2
(A3) Dividends and Distributions.
The holders of Common Stock shall be entitled to receive
dividends when and if declared by the Board of Directors out of any funds
legally available for the payment of such dividends.
(A4) No Preemptive Rights.
No holder of shares of stock or other 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.
(B1) Stock.
(a) 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.
(b) 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.
(B2) Voting Rights and Powers.
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. All Directors shall be elected by holders of Common
Stock and Class B Common Stock voting as a single class.
(B3) 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
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<PAGE> 3
considered to be cash dividends for the purposes of this Section (B3).
(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,
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.
(B4) 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 Section (B4) 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.
(b) For purposes of this Section (B4), 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 bona fide 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 Section (B4). 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.
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(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 Section (B4).
(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.
(B5) 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 nonassessable 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 (e) of this Section (B5).
(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 (a) of this Section (B5), and the payment in cash
of any amount required by the provisions of Paragraphs (a) and (e) of this
Section (B5), 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.
(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 of Class B Common Stock 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 in the amount declared per share of Class B Common
Stock 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.
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(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 nonassessable 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) Upon the earlier to occur of (i) a Qualified Public
Offering (as defined below) or (ii) the date on which 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. "Qualified Public Offering" shall mean
the closing of a firm commitment underwritten public offering of Common Stock
pursuant to an effective registration statement (other than a registration
statement relating to an offer and sale of Common Stock to employees of, or
other persons providing services to, the Corporation pursuant to an employee
benefit plan, registered on Form S-8 or a successor form) under the Securities
Act of 1933, as amended, with gross proceeds from the sale of such Common Stock
by the Corporation of not less than $20 million. If a share of Class B Common
Stock shall be converted into Common Stock pursuant to this Paragraph (f)
subsequent to the record date for the determination of shareholders entitled to
vote at a meeting of shareholders or upon a matter otherwise presented for a
shareholder vote, but prior to such meeting or vote, then the registered holder
of each share of Common Stock and Class B Common Stock at the close of business
on such record date shall be entitled to one (1) vote for each share at such
meeting or for such vote on each matter presented for a vote by the holders of
Common Stock and/or Class B Common Stock.
(B6) Issuance of the Class B Common Stock.
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 Section (B6), the
Corporation shall not issue additional shares of Class B Common Stock, 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 Section (B2) of this
Article Third.
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(B7) No Preemptive Rights.
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.
(B8) Wisconsin Control Share Statute.
Outstanding shares of any class of capital stock of the
Corporation shall not be subject to the limited voting provisions of Section
180.1150 of the Wisconsin Business Corporation Law. On and after the date of a
Qualified Public Offering (as defined above), this Section (B8) shall be null
and void and without legal effect.
ARTICLE FOURTH
(1) Number, Classification and Tenure of Directors.
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 directorship
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.
(2) 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.
(3) Amendments.
Notwithstanding any other provision of these Restated Articles
of Incorporation, the provisions of this Article Fourth 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.
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ARTICLE FIFTH
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 Restated Articles of Incorporation 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 SIXTH
The address of the registered office of the corporation at the
time of adoption of these 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 23, 1999)
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the
shareholders (the "Annual Meeting") shall be held on the second Saturday in
April of each year, or at such other time and date as may be fixed by resolution
of the Board of Directors. In fixing a meeting date for any Annual Meeting, the
Board of Directors may consider such factors as it deems relevant within the
good faith exercise of its business judgment. At each Annual Meeting, the
shareholders shall elect that number of directors equal to the number of
directors in the class whose term expires at the time of such meeting. At any
such Annual Meeting, only other business properly brought before the meeting in
accordance with Section 12 of Article I of these By-laws may be transacted. If
the election of directors shall not be held on the date designated herein, or
fixed as herein provided, for any Annual Meeting, or any adjournment thereof,
the Board of Directors shall cause the election to be held at a special meeting
of shareholders (a "Special Meeting") as soon thereafter as is practicable.
Section 2. Special Meetings.
(a) A Special Meeting may be called only by (i) the Chairman ,
(ii) the Chief Executive Officer or (iii) the Board of Directors and shall be
called by the Chief Executive Officer upon the demand, in accordance with this
Section 2, of the holders of record of shares representing at least 10% of all
the votes entitled to be cast on any issue proposed to be considered at the
Special Meeting.
(b) In order that the Corporation may determine the
shareholders entitled to demand a Special Meeting, the Board of Directors may
fix a record date to determine the shareholders entitled to make such a demand
(the "Demand Record Date"). The Demand Record Date shall not precede the date
upon which the resolution fixing the Demand Record Date is adopted by the Board
of Directors and shall not be more than ten days after the date upon which the
resolution fixing the Demand Record Date is adopted by the Board of Directors.
Any shareholder of record seeking to have shareholders demand a Special Meeting
shall, by sending written notice to the Secretary of the Corporation by hand or
by certified or registered mail, return receipt requested, request the Board of
Directors to fix a Demand Record Date. The Board of Directors shall promptly,
but in all events within ten days after the date on which a valid request to fix
a Demand Record Date is received, adopt a resolution fixing the Demand Record
Date and shall make a public announcement of such Demand Record Date. If no
Demand Record Date has been fixed by the Board of Directors within ten days
after the date on which such request is received by the Secretary, the Demand
Record Date shall be the 10th day after the first date on which a valid written
request to set a Demand Record Date is received by the Secretary. To be valid,
such written request shall set forth the purpose or purposes for which the
Special Meeting is to be held, shall be signed by one or more shareholders of
record (or their duly authorized proxies or other representatives), shall bear
the date of signature of each such shareholder (or proxy or other
representative) and shall set forth all information about each such shareholder
and about the beneficial owner or owners, if any, on whose behalf the request is
made that would be required to be set forth in a shareholder's notice described
in paragraph (a) (ii) of Section 12 of Article I of these By-laws.
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(c) In order for a shareholder or shareholders to demand a
Special Meeting, a written demand or demands for a Special Meeting by the
holders of record as of the Demand Record Date of shares representing at least
10% of all the votes entitled to be cast on any issue proposed to be considered
at the Special Meeting must be delivered to the Corporation. To be valid, each
written demand by a shareholder for a Special Meeting shall set forth the
specific purpose or purposes for which the Special Meeting is to be held (which
purpose or purposes shall be limited to the purpose or purposes set forth in the
written request to set a Demand Record Date received by the Corporation pursuant
to paragraph (b) of this Section 2), shall be signed by one or more persons who
as of the Demand Record Date are shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of signature
of each such shareholder (or proxy or other representative), and shall set forth
the name and address, as they appear in the Corporation's books, of each
shareholder signing such demand and the class and number of shares of the
Corporation which are owned of record and beneficially by each such shareholder,
shall be sent to the Secretary by hand or by certified or registered mail,
return receipt requested, and shall be received by the Secretary within seventy
days after the Demand Record Date.
(d) The Corporation shall not be required to call a Special
Meeting upon shareholder demand unless, in addition to the documents required by
paragraph (c) of this Section 2, the Secretary receives a written agreement
signed by each Soliciting Shareholder (as defined below), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the Corporation's
costs of holding the Special Meeting, including the costs of preparing and
mailing proxy materials for the Corporation's own solicitation, provided that if
each of the resolutions introduced by any Soliciting Shareholder at such meeting
is adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is elected,
then the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the meanings set
forth below:
(i) "Affiliate" of any Person (as defined herein) shall
mean any Person controlling, controlled by or under common control
with such first Person.
(ii) "Participant" shall have the meaning assigned to
such term in Rule 14a-11 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm,
corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term
in Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to
such term in Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to
any Special Meeting demanded by a shareholder or shareholders, any of
the following Persons:
(A) if the number of shareholders signing the demand
or demands of meeting delivered to the Corporation pursuant to
paragraph (c) of this Section 2 is ten or fewer, each
shareholder signing any such demand;
(B) if the number of shareholders signing the demand
or demands of meeting delivered to the Corporation pursuant to
paragraph (c) of this Section 2 is more than ten, each Person
who either (I) was a Participant in any Solicitation of such
demand or demands or (II) at the time of the delivery to the
Corporation of the documents described in paragraph (c) of
this Section 2 had engaged or intended to engage in any
Solicitation of Proxies for use at such Special Meeting (other
than a Solicitation of Proxies on behalf of the Corporation);
or
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(C) any Affiliate of a Soliciting Shareholder, if a
majority of the directors then in office determine, reasonably
and in good faith, that such Affiliate should be required to
sign the written notice described in paragraph (c) of this
Section 2 and/or the written agreement described in this
paragraph (d) in order to prevent the purposes of this Section
2 from being evaded.
(e) Except as provided in the following sentence, any Special
Meeting shall be held at such hour and day as may be designated by whichever of
the Chief Executive Officer, the Secretary or the Board of Directors shall have
called such meeting. In the case of any Special Meeting called by the Chief
Executive Officer upon the demand of shareholders (a "Demand Special Meeting"),
such meeting shall be held at such hour and day as may be designated by the
Board of Directors; provided, however, that the date of any Demand Special
Meeting shall be not more than seventy days after the Meeting Record Date (as
defined in Section 5 of Article I of these By-laws); and provided further that
in the event that the directors then in office fail to designate an hour and
date for a Demand Special Meeting within ten days after the date that valid
written demands for such meeting by the holders of record as of the Demand
Record Date of shares representing at least 10% of all the votes entitled to be
cast on each issue proposed to be considered at the Special Meeting are
delivered to the Corporation (the "Delivery Date"), then such meeting shall be
held at 2:00 P.M. local time on the 100th day after the Delivery Date or, if
such 100th day is not a Business Day (as defined below), on the first preceding
Business Day. In fixing a meeting date for any Special Meeting, the Chief
Executive Officer, the Secretary or the Board of Directors may consider such
factors as he or it deems relevant within the good faith exercise of his or its
business judgment, including, without limitation, the nature of the action
proposed to be taken, the facts and circumstances surrounding any demand for
such meeting, and any plan of the Board of Directors to call an Annual Meeting
or a Special Meeting for the conduct of related business.
(f) The Corporation may engage regionally or nationally
recognized independent inspectors of elections to act as an agent of the
Corporation for the purpose of promptly performing a ministerial review of the
validity of any purported written demand or demands for a Special Meeting
received by the Secretary. For the purpose of permitting the inspectors to
perform such review, no purported demand shall be deemed to have been delivered
to the Corporation until the earlier of (i) five Business Days following receipt
by the Secretary of such purported demand and (ii) such date as the independent
inspectors certify to the Corporation that the valid demands received by the
Secretary represent at least 10% of all the votes entitled to be cast on each
issue proposed to be considered at the Special Meeting. Nothing contained in
this paragraph (f) shall in any way be construed to suggest or imply that the
Board of Directors or any shareholder shall not be entitled to contest the
validity of any demand, whether during or after such five Business Day period,
or to take any other action (including, without limitation, the commencement,
prosecution or defense of any litigation with respect thereto).
(g) For purposes of these By-laws, "Business Day" shall mean
any day other than a Saturday, a Sunday or a day on which banking institutions
in the State of Wisconsin are authorized or obligated by law or executive order
to close.
Section 3. Place of Meeting. The Chairman, the Chief Executive
Officer, the Board of Directors or the Secretary may designate any place, either
within or without the State of Wisconsin, as the place of meeting for an Annual
Meeting or Special Meeting. If no designation is made, the place of meeting
shall be the principal office of the Corporation. Any meeting may be adjourned
to reconvene at any place designated by vote of the Board of Directors or by the
Chief Executive Officer or the Secretary.
Section 4. Notice of Meeting. Written notice stating the date,
time and place of any meeting of shareholders shall be delivered not less than
ten days nor more than sixty days before the date of the meeting (unless a
different time period is provided by the Wisconsin Business Corporation Law (the
"WBCL") or the Articles of Incorporation), either personally or by mail, by or
at the direction of the Chairman, the President or the Secretary, to each
shareholder of record entitled to vote at such meeting and to such other persons
as required by the WBCL. In the event of any Demand Special Meeting, such notice
of meeting shall be sent not more than thirty days after the Delivery Date. If
mailed, notice pursuant to this Section 4 shall be deemed to be effective when
deposited in the United States mail, addressed to the shareholder at his or her
address as it appears on the stock record books of the Corporation, with postage
thereon prepaid. Unless otherwise required by the WBCL or the Articles of
Incorporation, a notice of an Annual Meeting need not include a description of
the purpose for which the meeting is called. In the case of any Special Meeting,
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(a) the notice of meeting shall describe any business that the Board of
Directors shall have theretofore determined to bring before the meeting and (b)
in the case of a Demand Special Meeting, the notice of meeting (i) shall
describe any business set forth in the statement of purpose of the demands
received by the Corporation in accordance with Section 2 of Article I of these
By-laws and (ii) shall contain all of the information required in the notice
received by the Corporation in accordance with Section 12(b) of Article I of
these By-laws. If an Annual Meeting or Special Meeting is adjourned to a
different date, time or place, the Corporation shall not be required to give
notice of the new date, time or place if the new date, time or place is
announced at the meeting before adjournment; provided, however, that if a new
Meeting Record Date for an adjourned meeting is or must be fixed, the
Corporation shall give notice of the adjourned meeting to persons who are
shareholders as of the new Meeting Record Date.
Section 5. Fixing of Record Date. The Board of Directors may
fix in advance a date not less than ten days and not more than seventy days
prior to the date of an Annual Meeting or Special Meeting as the record date for
the determination of shareholders entitled to notice of, or to vote at, such
meeting (the "Meeting Record Date"). In the case of any Demand Special Meeting,
(i) the Meeting Record Date shall be not later than the 30th day after the
Delivery Date and (ii) if the Board of Directors fails to fix the Meeting Record
Date within thirty days after the Delivery Date, then the close of business on
such 30th day shall be the Meeting Record Date. The shareholders of record on
the Meeting Record Date shall be the shareholders entitled to notice of and to
vote at the meeting. Except as provided by the WBCL for a court-ordered
adjournment, a determination of shareholders entitled to notice of and to vote
at an Annual Meeting or Special Meeting is effective for any adjournment of such
meeting unless the Board of Directors fixes a new Meeting Record Date, which it
shall do if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting. The Board of Directors may also fix in advance a
date as the record date for the purpose of determining shareholders entitled to
take any other action or determining shareholders for any other purpose. Such
record date shall be not more than seventy days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken.
The record date for determining shareholders entitled to a distribution (other
than a distribution involving a purchase, redemption or other acquisition of the
Corporation's shares) or a share dividend is the date on which the Board of
Directors authorizes the distribution or share dividend, as the case may be,
unless the Board of Directors fixes a different record date.
Section 6. Shareholders' List for Meetings. After a Meeting
Record Date has been fixed, the Corporation shall prepare a list of the names of
all of the shareholders entitled to notice of the meeting. The list shall be
arranged by class or series of shares, if any, and show the address of and
number of shares held by each shareholder. Such list shall be available for
inspection by any shareholder, beginning two business days after notice of the
meeting is given for which the list was prepared and continuing to the date of
the meeting, at the Corporation's principal office or at a place identified in
the meeting notice in the city where the meeting will be held. A shareholder or
his or her agent may, on written demand, inspect and, subject to the limitations
imposed by the WBCL, copy the list, during regular business hours and at his or
her expense, during the period that it is available for inspection pursuant to
this Section 6. The Corporation shall make the shareholders' list available at
the meeting and any shareholder or his or her agent or attorney may inspect the
list at any time during the meeting or any adjournment thereof. Refusal or
failure to prepare or make available the shareholders' list shall not affect the
validity of any action taken at a meeting of shareholders.
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Section 7. Quorum and Voting Requirements; Postponements;
Adjournments.
(a) Shares entitled to vote as a separate voting group may
take action on a matter at any Annual Meeting or Special Meeting only if a
quorum of those shares exists with respect to that matter. If the Corporation
has only one class of stock outstanding, such class shall constitute a separate
voting group for purposes of this Section 7. Except as otherwise provided in the
Articles of Incorporation or the WBCL, a majority of the votes entitled to be
cast on the matter shall constitute a quorum of the voting group for action on
that matter. Once a share is represented for any purpose at any Annual Meeting
or Special Meeting, other than for the purpose of objecting to holding the
meeting or transacting business at the meeting, it is considered present for
purposes of determining whether a quorum exists for the remainder of the meeting
and for any adjournment of that meeting unless a new Meeting Record Date is or
must be set for the adjourned meeting. If a quorum exists, except in the case of
the election of directors, action on a matter shall be approved if the votes
cast within the voting group favoring the action exceed the votes cast opposing
the action, unless the Articles of Incorporation or the WBCL requires a greater
number of affirmative votes. Unless otherwise provided in the Articles of
Incorporation, each director to be elected shall be elected by a plurality of
the votes cast by the shares entitled to vote in the election of directors at an
Annual Meeting or Special Meeting at which a quorum is present.
(b) The Board of Directors acting by resolution may postpone
and reschedule any previously scheduled Annual Meeting or Special Meeting;
provided, however, that a Demand Special Meeting shall not be postponed beyond
the 100th day following the Delivery Date. Any Annual Meeting or Special Meeting
may be adjourned from time to time, whether or not there is a quorum, (i) at any
time, upon a resolution by shareholders if the votes cast in favor of such
resolution by the holders of shares of each voting group entitled to vote on any
matter theretofore properly brought before the meeting exceed the number of
votes cast against such resolution by the holders of shares of each such voting
group or (ii) at any time prior to the transaction of any business at such
meeting, by the President or pursuant to a resolution of the Board of Directors.
No notice of the time and place of adjourned meetings need be given except as
required by the WBCL. At any adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 8. Voting of Shares. Each outstanding share shall be
entitled to one vote upon each matter submitted to a vote at an Annual Meeting
or Special Meeting, except to the extent that the voting rights of the shares of
any class or classes are enlarged, limited or denied by the WBCL or the Articles
of Incorporation.
Section 9. Proxies. At any Annual Meeting or Special Meeting,
a shareholder may vote his or her shares in person or by proxy. A shareholder
may appoint a proxy to vote or otherwise act for the shareholder by signing an
appointment form, either personally or by his or her attorney-in-fact. An
appointment of a proxy is effective when received by the Secretary or other
officer or agent of the Corporation authorized to tabulate votes. An appointment
is valid for eleven months from the date of its signing unless a different
period is expressly provided in the appointment form. Unless otherwise provided,
a proxy may be revoked at any time before it is voted, either by written notice
filed with the Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during the meeting. The
presence of a shareholder who has filed his or her appointment of proxy shall
not itself constitute a revocation. The Board of Directors shall have the power
and authority to make rules establishing presumptions as to the validity and
sufficiently of proxies.
Section 10. Acceptance of Instruments Showing Shareholder
Action. If the name signed on a vote, consent, waiver or proxy appointment
corresponds to the name of a shareholder, the Corporation, if acting in good
faith, may accept the vote, consent, waiver or proxy appointment and give it
effect as the act of a shareholder. If the name signed on a vote, consent,
waiver or proxy appointment does not correspond to the name of a shareholder,
the Corporation, if acting in good faith, may accept the vote, consent, waiver
or proxy appointment and give it effect as the act of the shareholder if any of
the following apply:
(a) The shareholder is an entity and the name signed purports
to be that of an officer or agent of the entity.
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(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the shareholder
and, if the Corporation requests, evidence of fiduciary status acceptable to the
Corporation is presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the Corporation requests,
evidence of this status acceptable to the Corporation is presented with respect
to the vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if the Corporation
requests, evidence acceptable to the Corporation of the signatory's authority to
sign for the shareholder is presented with respect to the vote, consent, waiver
or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
The Corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the Corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
Section 11. Waiver of Notice. A shareholder may waive any
notice required by the WBCL, the Articles of Incorporation or these By-laws
before or after the date and time stated in the notice. The waiver shall be in
writing and signed by the shareholder entitled to the notice, contain the same
information that would have been required in the notice under applicable
provisions of the WBCL (except that the time and place of meeting need not be
stated) and be delivered to the Corporation for inclusion in the corporate
records. A shareholder's attendance at any Annual Meeting or Special Meeting, in
person or by proxy, waives objection to all of the following: (a) lack of notice
or defective notice of the meeting, unless the shareholder at the beginning of
the meeting or promptly upon arrival objects to holding the meeting or
transacting business at the meeting; and (b) consideration of a particular
matter at the meeting that is not within the purpose described in the meeting
notice, unless the shareholder objects to considering the matter when it is
presented.
Section 12. Notice of Shareholder Business and Nomination of
Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board
of Directors of the Corporation and the proposal of business
to be considered by the shareholders may be made at an Annual
Meeting (A) pursuant to the Corporation's notice of meeting,
(B) by or at the direction of the Board of Directors or (C) by
any shareholder of the Corporation who is a shareholder of
record at the time of giving of notice provided for in this
By-law and who is entitled to vote at the meeting and complies
with the notice procedures set forth in this Section 12.
(ii) For nominations or other business to be properly
brought before an Annual Meeting by a shareholder pursuant to
clause (C) of paragraph (a)(i) of this Section 12, the
shareholder must have given timely notice thereof in writing
to the Secretary of the Corporation. To be timely, a
shareholder's notice shall be received by the Secretary of the
Corporation at the principal offices of the Corporation not
less than sixty days nor more than ninety days prior to the
second Saturday in the month of April; provided, however, that
in the event that the date of the Annual Meeting is advanced
by more than thirty days or delayed by more than sixty days
from the second Saturday in the month of April, notice by the
shareholder to be timely must be so received not earlier than
the 90th day prior to the date of such Annual Meeting and not
later than the close of business on the later of (x) the 60th
day prior to such Annual Meeting and (y) the 10th day
following the day on which public announcement of the date of
such meeting is first made. Such shareholder's notice shall be
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signed by the shareholder of record who intends to make the
nomination or introduce the other business (or his duly
authorized proxy or other representative), shall bear the date
of signature of such shareholder (or proxy or other
representative) and shall set forth: (A) the name and address,
as they appear on this corporation's books, of such
shareholder and the beneficial owner or owners, if any, on
whose behalf the nomination or proposal is made; (B) the class
and number of shares of the Corporation which are beneficially
owned by such shareholder or beneficial owner or owners; (C) a
representation that such shareholder is a holder of record of
shares of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to make
the nomination or introduce the other business specified in
the notice; (D) in the case of any proposed nomination for
election or re-election as a director, (I) the name and
residence address of the person or persons to be nominated,
(II) a description of all arrangements or understandings
between such shareholder or beneficial owner or owners and
each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination is to be
made by such shareholder, (III) such other information
regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for
elections of directors, or would be otherwise required to be
disclosed, in each case pursuant to Regulation 14A under the
Exchange Act, including any information that would be required
to be included in a proxy statement filed pursuant to
Regulation 14A had the nominee been nominated by the Board of
Directors and (IV) the written consent of each nominee to be
named in a proxy statement and to serve as a director of the
Corporation if so elected; and (E) in the case of any other
business that such shareholder proposes to bring before the
meeting, (I) a brief description of the business desired to be
brought before the meeting and, if such business includes a
proposal to amend these By-laws, the language of the proposed
amendment, (II) such shareholder's and beneficial owner's or
owners' reasons for conducting such business at the meeting
and (III) any material interest in such business of such
shareholder and beneficial owner or owners.
(iii) Notwithstanding anything in the second sentence
of paragraph (a)(ii) of this Section 12 to the contrary, in
the event that the number of directors to be elected to the
Board of Directors of the Corporation is increased and there
is no public announcement naming all of the nominees for
director or specifying the size of the increased Board of
Directors made by the Corporation at least seventy days prior
to the second Saturday in the month of April, a shareholder's
notice required by this Section 12 shall also be considered
timely, but only with respect to nominees for any new
positions created by such increase, if it shall be received by
the Secretary at the principal offices of the Corporation not
later than the close of business on the 10th day following the
day on which such public announcement is first made by the
Corporation.
(b) Special Meetings. Only such business shall be
conducted at a Special Meeting as shall have been described in the notice of
meeting sent to shareholders pursuant to Section 4 of Article I of these
By-laws. Nominations of persons for election to the Board of Directors may be
made at a Special Meeting at which directors are to be elected pursuant to such
notice of meeting (i) by or at the direction of the Board of Directors or (ii)
by any shareholder of the Corporation who (A) is a shareholder of record at the
time of giving of such notice of meeting, (B) is entitled to vote at the meeting
and (C) complies with the notice procedures set forth in this Section 12. Any
shareholder desiring to nominate persons for election to the Board of Directors
at such a Special Meeting shall cause a written notice to be received by the
Secretary of the Corporation at the principal offices of the Corporation not
earlier than ninety days prior to such Special Meeting and not later than the
close of business on the later of (x) the 60th day prior to such Special Meeting
and (y) the 10th day following the day on which public announcement is first
made of the date of such Special Meeting and of the nominees proposed by the
Board of Directors to be elected at such meeting. Such written notice shall be
signed by the shareholder of record who intends to make the nomination (or his
duly authorized proxy or other representative), shall bear the date of signature
of such shareholder (or proxy or other representative) and shall set forth: (A)
the name and address, as they appear on the Corporation's books, of such
shareholder and the beneficial owner or owners, if any, on whose behalf the
nomination is made; (B) the class and number of shares of the Corporation which
are beneficially owned by such shareholder or beneficial owner or owners; (C) a
representation that such shareholder is a holder of record
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of shares of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to make the nomination specified in
the notice; (D) the name and residence address of the person or persons to be
nominated; (E) a description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination is
to be made by such shareholder; (F) such other information regarding each
nominee proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be otherwise
required to be disclosed, in each case pursuant to Regulation 14A under the
Exchange Act, including any information that would be required to be included in
a proxy statement filed pursuant to Regulation 14A had the nominee been
nominated by the Board of Directors; and (G) the written consent of each nominee
to be named in a proxy statement and to serve as a director of the Corporation
if so elected.
(c) General.
(i) Only persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to
serve as directors. Only such business shall be conducted at an Annual
Meeting or Special Meeting as shall have been brought before such
meeting in accordance with the procedures set forth in this Section 12.
The chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in this
Section 12 and, if any proposed nomination or business is not in
compliance with this Section 12, to declare that such defective
proposal shall be disregarded.
(ii) For purposes of this Section 12, "public
announcement" shall mean disclosure in a press release reported by the
Dow Jones News Service, Associated Press or comparable national news
service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d)
of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of
this Section 12, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section 12.
Nothing in this Section 12 shall be deemed to limit the Corporation's
obligation to include shareholder proposals in its proxy statement if
such inclusion is required by Rule 14a-8 under the Exchange Act.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers and Number. All corporate powers of the
Corporation shall be exercised by or under the authority of, and the business
and affairs of the Corporation managed under, the direction of its Board of
Directors, which shall consist of eleven (11) 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.
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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 Chief Executive Officer,
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. 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.
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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.
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.
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ARTICLE III
OFFICERS
Section 1. General Officers. The general officers of the Corporation
shall be the Chief Executive Officer, 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 Chief Executive
Officer of the Corporation 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 Chief Executive Officer 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.
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.
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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. 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.
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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
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.
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(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.
(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.
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(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.
(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:
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(i) The Director or Officer furnishes to the Corporation an
executed written certificate affirming his or her good faith belief that he or
she has not engaged in misconduct which constitutes a Breach of Duty; and
(ii) The Director or Officer furnishes to the Corporation an
unsecured executed written agreement to repay any advances made under this
Section 1.05 if it is ultimately determined by an Authority that he or she is
not entitled to be indemnified by the Corporation for such Expenses pursuant to
Section 1.04 of this Article.
(b) If the Director or Officer must repay any previously advanced
Expenses pursuant to this Section 1.05, such Director or Officer shall not be
required to pay interest on such amounts.
Section 1.06. Indemnification and Allowance of Expenses of Certain
Others.
(a) The Corporation shall indemnify a director or officer of an
Affiliate (who is not otherwise serving as a Director or Officer) against all
Liabilities, and shall advance the reasonable Expenses, incurred by such
director or officer in a Proceeding to the same extent hereunder as if such
director or officer incurred such Liabilities because he or she was a Director
or Officer, if such director or officer is a Party thereto because he or she is
or was a director or officer of the Affiliate.
(b) Except as hereinafter provided, the Corporation shall indemnify
each employee of the Corporation or an Affiliate of the Corporation acting
within the scope of his or her duties as such, against all Liabilities, and
shall advance Reasonable Expenses, incurred by or on behalf of such employee in
connection with a Proceeding in which he or she is a Party by virtue of being an
employee of the Corporation or an Affiliate of the Corporation, to the same
extent and in the same manner as a Director or Officer hereunder. The foregoing
provision shall not apply, and the Corporation shall not indemnify any 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.
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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.
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<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 1c.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 712
<SECURITIES> 0
<RECEIVABLES> 20,972
<ALLOWANCES> 0
<INVENTORY> 21,252
<CURRENT-ASSETS> 43,969
<PP&E> 85,599
<DEPRECIATION> (45,130)
<TOTAL-ASSETS> 98,359
<CURRENT-LIABILITIES> 32,920
<BONDS> 0
0
0
<COMMON> 3,539
<OTHER-SE> 47,494
<TOTAL-LIABILITY-AND-EQUITY> 98,359
<SALES> 76,909
<TOTAL-REVENUES> 76,909
<CGS> 46,665
<TOTAL-COSTS> 68,316
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 488
<INCOME-PRETAX> 8,105
<INCOME-TAX> 3,120
<INCOME-CONTINUING> 4,985
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,985
<EPS-BASIC> 1.35
<EPS-DILUTED> 1.27
</TABLE>
