EXHIBIT (3.1)
RESTATED BY-LAWS
OF
BADGER METER, INC.
(AS AMENDED FEBRUARY 14, 2003)
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.
(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
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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
(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
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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, (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.
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SECTION 6. SHAREHOLDERS' LIST FOR MEETINGS. After a Meeting Record
Date has been fixed, the Corporation shall prepare a list of the names of all of
the shareholders entitled to notice of the meeting. The list shall be arranged
by class or series of shares, if any, and show the address of and number of
shares held by each shareholder. Such list shall be available for inspection by
any shareholder, beginning two business days after notice of the meeting is
given for which the list was prepared and continuing to the date of the meeting,
at the Corporation's principal office or at a place identified in the meeting
notice in the city where the meeting will be held. A shareholder or his or her
agent may, on written demand, inspect and, subject to the limitations imposed by
the WBCL, copy the list, during regular business hours and at his or her
expense, during the period that it is available for inspection pursuant to this
Section 6. The Corporation shall make the shareholders' list available at the
meeting and any shareholder or his or her agent or attorney may inspect the list
at any time during the meeting or any adjournment thereof. Refusal or failure to
prepare or make available the shareholders' list shall not affect the validity
of any action taken at a meeting of shareholders.
SECTION 7. QUORUM AND VOTING REQUIREMENTS; POSTPONEMENTS;
ADJOURNMENTS.
(a) Shares entitled to vote as a separate voting group may take action
on a matter at any Annual Meeting or Special Meeting only if a quorum of those
shares exists with respect to that matter. If the Corporation has only one class
of stock outstanding, such class shall constitute a separate voting group for
purposes of this Section 7. Except as otherwise provided in the Articles of
Incorporation or the WBCL, a majority of the votes entitled to be cast on the
matter shall constitute a quorum of the voting group for action on that matter.
Once a share is represented for any purpose at any Annual Meeting or Special
Meeting, other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes of
determining whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new Meeting Record Date is or must be set
for the adjourned meeting. If a quorum exists, except in the case of the
election of directors, action on a matter shall be approved if the votes cast
within the voting group favoring the action exceed the votes cast opposing the
action, unless the Articles of Incorporation or the WBCL requires a greater
number of affirmative votes. 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:
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(a) The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the shareholder
and, if the Corporation requests, evidence of fiduciary status acceptable to the
Corporation is presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the Corporation requests, evidence of this
status acceptable to the Corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the Corporation requests,
evidence acceptable to the Corporation of the signatory's authority to sign for
the shareholder is presented with respect to the vote, consent, waiver or proxy
appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
The Corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the Corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
SECTION 11. WAIVER OF NOTICE. A shareholder may waive any notice
required by the WBCL, the Articles of Incorporation or these By-laws before or
after the date and time stated in the notice. The waiver shall be in writing and
signed by the shareholder entitled to the notice, contain the same information
that would have been required in the notice under applicable provisions of the
WBCL (except that the time and place of meeting need not be stated) and be
delivered to the Corporation for inclusion in the corporate records. A
shareholder's attendance at any Annual Meeting or Special Meeting, in person or
by proxy, waives objection to all of the following: (a) lack of notice or
defective notice of the meeting, unless the shareholder at the beginning of the
meeting or promptly upon arrival objects to holding the meeting or transacting
business at the meeting; and (b) consideration of a particular matter at the
meeting that is not within the purpose described in the meeting notice, unless
the shareholder objects to considering the matter when it is presented.
SECTION 12. NOTICE OF SHAREHOLDER BUSINESS AND NOMINATION OF
DIRECTORS.
(a) ANNUAL MEETINGS.
(i) Nominations of persons for election to the Board of Directors
of the Corporation and the proposal of business to be considered by the
shareholders may be made at an Annual Meeting (A) pursuant to the
Corporation's notice of meeting, (B) by or at the direction of the Board of
Directors or (C) by any shareholder of the Corporation who is a shareholder
of record at the time of giving of notice provided for in this By-law and
who is entitled to vote at the meeting and complies with the notice
procedures set forth in this Section 12.
(ii) For nominations or other business to be properly brought
before an Annual Meeting by a shareholder pursuant to clause (C) of
paragraph (a)(i) of this Section 12, the shareholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice shall be received by the Secretary of the
Corporation at the principal offices of the Corporation not less than sixty
days nor more than ninety days prior to the second Saturday in the month of
April; provided, however, that in the event that the date of the Annual
Meeting is advanced by more than thirty days or delayed by more than sixty
days from the second Saturday in the month of April, notice by the
shareholder to be timely must be so received not earlier than the 90th day
prior to the date of such Annual Meeting and not later than the close of
business on the later of (x) the 60th day prior to such Annual Meeting and
(y) the 10th day following the day on which public announcement of the date
of such meeting is first made. Such shareholder's notice shall be signed by
the shareholder of record who intends to make the nomination or introduce
the other business (or his duly authorized proxy or other representative),
shall bear the date of signature of such shareholder (or proxy or other
representative) and shall set forth: (A) the name and address, as they
appear on this corporation's books, of such shareholder and the beneficial
owner or owners, if any, on whose behalf the nomination or proposal is
made; (B) the class and number of shares of the Corporation which are
beneficially owned by such shareholder or beneficial owner or owners; (C) a
representation that such shareholder is a holder of record of shares of the
Corporation entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to make the nomination or introduce the
other business specified in the notice; (D) in the case of any proposed
nomination for election or re-election as a director, (I) the name and
residence address of the person or
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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 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
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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 eight (8) 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 on or before November 1, 1999, may be appointed as
director emeritus to serve until he resigns or his appointment is terminated by
resolution of the Board of Directors, and shall serve in an advisory capacity to
the Board of Directors, shall be entitled to attend meetings of the Board and
its committees, shall be reimbursed for his expense in attending meetings, and
shall receive the same fees and compensation paid to directors, but shall have
no vote and shall not be considered as a director under the Articles of
Incorporation or By-laws of the Corporation except for purposes of officers' and
directors' liability insurance. A director may resign at any time by delivering
written notice which complies with the Wisconsin Business Corporation Law to the
Board of Directors, to the Chairman of the Board, if any, or to the Corporation.
A director's resignation is effective when such notice is delivered unless the
notice specifies a later date. Directors need not be residents of the State of
Wisconsin or shareholders of the Corporation.
SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held without other notice than this By-law immediately after, and at
the same place as, the annual meeting of shareholders, and each adjourned
session thereof. The Board of Directors may provide, by resolution, the time and
place, either within or without the State of Wisconsin, for the holding of
additional regular meetings without other notice than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the Chairman, the 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
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meeting, except where a director attends a meeting and objects thereat to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
SECTION 6. QUORUM. A majority of the directors shall constitute a quorum
for the transaction of business; and, except as otherwise provided by law or by
the Articles of Incorporation or these By-laws, a majority of the votes cast at
any meeting of the Board of Directors at which a quorum is present shall be
decisive of any action. A majority of the directors present at a meeting, though
less than quorum, may adjourn the meeting from time to time without further
notice.
SECTION 7. VACANCIES. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled until the next succeeding annual election by the affirmative vote of a
majority of the directors then in office, though less than a quorum of the Board
of Directors; provided, that in case of a vacancy created by the removal of a
director by vote of the shareholders, the shareholders shall have the right to
fill such vacancy at the same meeting or any adjournment thereof.
SECTION 8. COMPENSATION. The Board of Directors, by affirmative vote
of a majority of the directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the Corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or to delegate authority to
an appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and employees
and to their estates, families, dependents or beneficiaries on account of prior
services rendered by such directors, officers and employees to the Corporation.
SECTION 9. PRESUMPTION OF ASSENT. A director of the Corporation who
is present at a meeting of the Board of Directors or a committee thereof of
which he is a member at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the Secretary of the Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
SECTION 10. COMMITTEES. The Board of Directors by resolution adopted by the
affirmative vote of a majority of the number of directors set forth in Section 1
of this Article II may designate one or more committees, each committee to
consist of three or more directors elected by the Board of Directors, which
shall have and may exercise, when the Board of Directors is not in session, the
powers of the Board of Directors in the management of the business and affairs
of the Corporation, in the committee's designated area of responsibility, except
action in respect to dividends to shareholders, election of the principal
officers or the filling of vacancies on the Board of Directors or committees
created pursuant to this section, with respect to the approval or proposal of
actions that the law requires to be approved by the shareholders, amendment of
the Articles of Incorporation, the adoption, amendment or repeal of the by-laws,
the approval of a plan of merger not requiring shareholder approval, the
authorization or approval of the re-acquisition of shares other than according
to a method prescribed by the Board of Directors, and the authorization for
approval of the issuance or sale or contract for sale of shares, or the
determination of the designation and relative rights, preferences and
limitations of a class or series of shares, unless authorized to do so by the
Board of Directors within prescribed limits. The Board of Directors may elect
one or more of its members as alternate members of any such committee who may
take the place of any absent member or members at any meeting of such committee,
upon request by the Chairman or upon request by the chairman of such meeting.
Each such committee shall fix its own rules governing the conduct of its
activities and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request.
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
47
determine that the directors cannot participate by such means, in which case the
notice of the meeting, or other notice to directors given prior to the meeting,
shall state that each director's physical presence shall be required. If a
meeting is conducted through the use of such means of communication, then at the
commencement of such meeting all participating directors shall be informed that
a meeting is taking place at which official business may be transacted. A
director participating in a meeting by such means shall be deemed present in
person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. GENERAL OFFICERS. The general officers of the Corporation shall
be the 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
48
thereto; and when so executed no other party to such instrument or any third
party shall be required to make any inquiry into the authority of the signing
officer or officers.
ARTICLE V
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of the
Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the Chairman or the President or
a Vice President and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
stock transfer books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and canceled, except as provided in Section 6 of this Article V.
SECTION 2. FACSIMILE SIGNATURES AND SEAL. The seal of the corporation on
any certificates for shares may be a facsimile. The signatures of the Chairman
or President or Vice President and the Secretary or Assistant Secretary upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the Corporation itself or an
employee of the Corporation.
SECTION 3. SIGNATURE BY FORMER OFFICERS. In case any officer, who
has signed or whose facsimile signature has been placed upon any certificate for
shares, shall have ceased to be such officer before such certificate is issued,
it may be issued by the Corporation with the same effect as if he were such
officer at the date of its issue.
SECTION 4. TRANSFER OF SHARES. Prior to due presentment of a certificate
for shares for registration of transfer the Corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications and otherwise to exercise all the rights and powers of an owner.
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
49
issue, transfer and registration of certificates representing shares of the
Corporation.
ARTICLE VI
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the state of incorporation and the words, "Corporate Seal".
ARTICLE VII
AMENDMENTS
SECTION 1. BY SHAREHOLDERS. These By-laws may be altered, amended,
repealed, augmented and new By-laws may be adopted by the shareholders by
affirmative vote of not less than a majority of the votes represented by the
shares present or represented at any annual or special meeting of the
shareholders at which a quorum is in attendance.
SECTION 2. BY DIRECTORS. These By-laws may also be altered, amended,
repealed, augmented and new By-laws may be adopted by the Board of Directors by
affirmative vote of a majority of the number of directors present at any meeting
at which a quorum is in attendance; but no By-law adopted by the shareholders
shall be amended or repealed by the Board of Directors if the By-law so adopted
so provides.
SECTION 3. IMPLIED AMENDMENTS. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
By-laws then in effect but is taken or authorized by affirmative vote of not
less than the number of shares or the number of directors required to amend the
By-laws so that the By-laws would be consistent with such action, shall be given
the same effect as though the By-laws had been temporarily amended or suspended
so far, but only so far, as is necessary to permit the specific action so taken
or authorized.
ARTICLE VIII
INDEMNIFICATION
SECTION 1.01. CERTAIN DEFINITIONS. All capitalized terms used in this
Article VIII and not otherwise hereinafter defined in this Section 1.01 shall
have the meaning set forth in Section 180.0850 of the Statute (as hereinafter
defined). The following capitalized terms (including any plural forms thereof)
used in this Article VIII shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise
that directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Corporation.
(b) "Authority" shall mean the entity selected by the Director or
Officer to determine his or her right to indemnification pursuant to Section
1.04 of this Article.
(c) "Board" shall mean the entire then elected and serving board of
directors of the Corporation, including all members thereof who are Parties to
the subject Proceeding or any related Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer breached or
failed to perform his or her duties to the Corporation and his or her breach of
or failure to perform those duties is determined, in accordance with Section
1.04 of this Article, to constitute misconduct under Section 180.0851 (2) (a) 1,
2, 3 or 4 of the Statute.
(e) "Corporation, " as used herein and as defined in the Statute and
incorporated by reference into the definitions of certain capitalized terms used
herein, shall mean this Corporation, including, without limitation, any
successor corporation or entity to the Corporation by way of merger,
consolidation or acquisition of all or substantially all of the capital stock or
assets of this Corporation.
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(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.
(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.
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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:
(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.
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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.
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
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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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