-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LdCMdsDExd6U4KIOEKcnUYAqPxFFlDn5E4MFWFFjLzUYQYyF7EfNP8tOFITNKtKc j5CjWaPqHlIPcHef98dw3A== 0000897069-99-000429.txt : 19990819 0000897069-99-000429.hdr.sgml : 19990819 ACCESSION NUMBER: 0000897069-99-000429 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 DATE AS OF CHANGE: 19990818 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERIOR SERVICES INC CENTRAL INDEX KEY: 0001005751 STANDARD INDUSTRIAL CLASSIFICATION: 4955 IRS NUMBER: 391733405 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-27508 FILM NUMBER: 99694241 BUSINESS ADDRESS: STREET 1: ONE HONEY CREEK COPORATE CENTER STREET 2: 125 SOUTH 84TH STREET SUITE 200 CITY: MILWAUKEE STATE: WI ZIP: 53214 BUSINESS PHONE: 4144797800 MAIL ADDRESS: STREET 1: ONE HONEY CREEK CORPORATE CENTER STREET 2: 125 SOUTH 84TH STREET SUITE 200 CITY: MILWAUKEE STATE: WI ZIP: 53214 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [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 0-27508 SUPERIOR SERVICES, INC. (exact name of Registrant as specified in its charter) Wisconsin 39-1733405 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 125 South 84th Street, Suite 200, Milwaukee, Wisconsin 53214 (Address of principal executive offices) (zip code) Registrant's telephone number, including area code (414) 479-7800 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 and 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 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes_X__ No___ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. The number of shares of Common Stock of the registrant, par value $.01 per share, outstanding on August 9, 1999 was 32,461,756. SUPERIOR SERVICES, INC. FORM 10-Q INDEX For the Quarter Ended June 30, 1999 Page Number ----------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets.........................3 Condensed Consolidated Income Statements......................4 Condensed Consolidated Statements of Shareholders' Investment....................................................5 Condensed Consolidated Statements of Cash Flows...............6 Notes to Condensed Consolidated Financial Statements.......7-12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...........................13-19 PART II. OTHER INFORMATION Item 1. Legal Proceedings................................................20 Item 2. Changes in Securities and Use of Proceeds........................20 Item 4. Submission of Matters to a Vote of Securities Holders............20 Item 6. Exhibits and Reports on Form 8-K.................................21 SIGNATURES....................................................................22 EXHIBIT INDEX.................................................................23 -2- Superior Services, Inc. Condensed Consolidated Balance Sheets (In Thousands)
December 31, June 30, 1998 1999 ------------ ----------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 9,715 $ 4,447 Trade accounts receivable 58,122 75,073 Prepaid expenses and other current assets 5,607 7,255 ------------ ----------- Total current assets 73,444 86,775 Property and equipment, net 312,497 338,321 Restricted funds held in trust 1,149 1,317 Other assets 5,529 7,887 Intangible assets, net 134,223 185,189 ------------ ----------- Total assets $ 526,842 $ 619,489 ============ =========== LIABILITIES AND SHAREHOLDERS' INVESTMENT Current liabilities: Current maturities of long-term debt $ 5,194 $ 2,938 Trade accounts payable 18,069 19,522 Accrued payroll and related expenses 4,584 4,953 Other accrued expenses 31,838 37,074 ------------ ----------- Total current liabilities 59,685 64,487 Long-term debt, net of current maturities 66,284 132,836 Disposal site closure and long-term care obligations 48,289 50,230 Deferred income taxes 23,865 24,008 Other liabilities 11,977 13,044 Commitments and contingencies Shareholders' Investment: Common stock 322 325 Additional paid-in capital 249,023 249,744 Retained earnings 67,397 84,815 ------------ ----------- Total shareholders' investment 316,742 334,884 ------------ ----------- Total liabilities and shareholders' investment $ 526,842 $ 619,489 ============ ===========
The accompanying notes are an integral part of these financial statements. -3- Superior Services, Inc. Condensed Consolidated Income Statements (In Thousands, Except Share and Per Share amounts) (Unaudited)
Three months ended June 30, Six months ended June 30, --------------------------- ------------------------- 1998 1999 1998 1999 ---- ---- ---- ---- (Restated) (Restated) Revenues $ 81,462 $ 98,995 $ 149,625 $ 179,003 Expenses: Cost of operations 46,825 55,724 86,704 102,119 Selling, general and administrative costs 9,602 11,453 19,536 21,751 Merger costs 315 - 1,858 - Depreciation and amortization expenses 9,955 12,814 19,271 23,780 ---------- ---------- ---------- ---------- 66,697 79,991 127,369 147,650 ---------- ---------- ---------- ---------- Operating income 14,765 19,004 22,256 31,353 Other income (expense): Interest expense (902) (1,479) (1,925) (2,429) Other income 460 136 998 724 ---------- ---------- ---------- ---------- Income before income taxes 14,323 17,661 21,329 29,648 Provision for income taxes 5,676 7,285 9,363 12,230 ---------- ---------- ---------- ---------- Net income $ 8,647 $ 10,376 $ 11,966 $ 17,418 ========== ========== ========== ========== Earnings per share - basic $ 0.27 $ 0.32 $ 0.38 $ 0.54 ========== ========== ========== ========== Earnings per share - diluted $ 0.26 $ 0.32 $ 0.37 $ 0.53 ========== ========== ========== ========== Pro forma adjustments (note 3): Net income, as reported $ 8,647 $ 10,376 $ 11,966 $ 17,418 Adjustment for income taxes (265) - (600) - ---------- ---------- ---------- ---------- Net income, as adjusted $ 8,382 $ 10,376 $ 11,366 $ 17,418 ========== ========== ========== ========== Earnings per share as adjusted - basic $ 0.26 $ 0.32 $ 0.36 $ 0.54 ========== ========== ========== ========== Earnings per share as adjusted -diluted $ 0.26 $ 0.32 $ 0.35 $ 0.53 ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. -4- Superior Services, Inc. Condensed Consolidated Statements of Shareholders' Investment (In Thousands, Except Share Amounts) (Unaudited)
Common Additional Stock Paid-In Retained Shares Amount Capital Earnings Total ------ ------ ------- -------- ----- Balance at December 31, 1998 32,202,297 $322 $249,023 $67,397 $316,742 Net income - - - 17,418 17,418 Issuance of common stock: Exercise of stock options and warrants 179,345 2 677 - 679 Other 77,727 1 44 - 45 ---------- ---- -------- ------- -------- Balance at June 30, 1999 32,459,369 $325 $249,744 $84,815 $334,884 ========== ==== ======== ======= ========
The accompanying notes are an integral part of these financial statements. -5- Superior Services, Inc. Condensed Consolidated Statements of Cash Flows (Dollars in Thousands) (Unaudited)
For the six months ended June 30 ------- 1998 1999 ----- ---- OPERATING ACTIVITIES Net income $11,966 $17,418 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,271 23,780 Deferred income taxes 1,137 143 (Gain) loss on sale of assets (97) 598 Changes in operating assets and liabilities, net of effects of acquired businesses: Accounts receivable (9,019) (13,775) Prepaid expenses and other current assets (404) (707) Accounts payable and accrued expenses (2,696) (5,479) Disposal site closure and long-term care obligation 1,847 1,941 Other 916 (627) ------- ------- Net cash provided by operating activities 22,921 23,292 INVESTING ACTIVITIES Acquisition of businesses, net of cash acquired (27,370) (61,174) Purchases of property and equipment (20,352) (32,440) Proceeds from sale of property and equipment 1,283 247 Increase in restricted funds held in trust (516) (168) ------- ------- Net cash used in investing activities (46,955) (93,535) FINANCING ACTIVITIES Net decrease in short-term borrowings (2,259) (2,256) Proceeds from long-term debt 4,805 77,263 Payments of long-term debt (10,713) (10,712) Issuance of common stock 1,533 680 Subchapter S distributions to former shareholders (1,411) - ------- ------- Net cash provided by (used in) financing activities (8,045) 64,975 ------- ------- Net decrease in cash and cash equivalents (32,079) (5,268) Cash and cash equivalents at beginning of period 44,955 9,715 ------- ------- Cash and cash equivalents at end of period $12,876 $ 4,447 ======= =======
The accompanying notes are an integral part of these financial statements. -6- Superior Services, Inc. Notes to Condensed Consolidated Financial Statements June 30, 1999 1. Organization and Basis of Presentation Superior Services, Inc. ("Superior" or the "Company") is an integrated solid waste services company providing a range of collection, transfer, transportation, disposal and recycling services to generators of solid waste and special waste. The condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). As applicable under such regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the presentations and disclosures in the financial statements included herein are adequate to make the information not misleading. The financial statements reflect all elimination entries and normal adjustments that are necessary for a fair statement of the results for the interim periods presented. During 1998, the Company acquired Alabama Waste Systems, Inc. and Acmar Regional Landfill, Inc. (collectively "AWS"); Gopher Disposal, Inc., Eagle Environmental, Inc., Materials Recovery, Ltd. and Watson's Rochester Disposal, Inc. (collectively "Gopher"); PenPac, Inc., Heritage Recycling, Inc., Iorio Carting, Inc., ACS Services, Inc., Recycling Techniques, Inc., Advanced Waste Technologies, Inc., Baray, Inc., and Nicholas Enterprises, Inc. (collectively "PenPac"); all accounted for using the pooling of interests method. Prior to their merger, AWS, a substantial number of companies comprising Gopher and PenPac had each selected S Corporation status for income tax purposes. As a result of their merger, AWS, Gopher and PenPac terminated their S Corporation elections. Pro forma provisions for income taxes are presented for the six months ended June 30, 1998 and have been computed as if AWS, Gopher and PenPac had been "C" Corporations during the period. Operating results for interim periods are not necessarily indicative of the results for full years or other interim periods. It is suggested that the condensed consolidated financial statements included herein be read in conjunction with the consolidated financial statements of Superior for the year ended December 31, 1998 and the related notes thereto (the "Financial Statements") included in the Company's Form 10-K for the year ended December 31, 1998. The accompanying condensed consolidated financial statements include the accounts of Superior and its subsidiaries. All significant intercompany transactions and balances have been eliminated. Certain reclassifications have been made to the 1998 financial statements to conform to the 1999 presentation. -7- 2. Significant Accounting Policies and Use of Estimates There have been no significant additions to or changes in accounting policies of the Company since December 31, 1998. For a description of these policies, see Note 2 of Notes to Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 1998. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. Acquisitions In the first six months of 1999, the Company acquired 17 waste businesses that were accounted for as purchases. Aggregate consideration for these acquisitions was approximately $60.5 million in cash. The final determination of cost, and allocations thereof, of certain of the Company's acquisitions is subject to resolution of certain contingencies. Once such contingencies are resolved, the purchase price is adjusted. Future payments are contingent based on working capital adjustments, debt adjustments and contingent liabilities and are recorded at the time of acquisition if the contingent payment can be reasonably estimated. These acquisitions have been accounted for as purchases and, accordingly, the results of their operations have been included in the Company's financial statements from their respective dates of acquisition. During the first six months of 1999, 77,727 shares were issued and $1.5 million of cash was paid in settlement of final valuation computations on certain acquisitions that occurred in 1998. The unaudited pro forma results of operations below assume that 1998 and 1999 acquisitions accounted for as purchases occurred at the beginning of 1998. In addition to combining the historical results of all such acquired entities, the pro forma calculations include adjustments for amortization of various intangibles acquired in conjunction with the acquisitions. However, no adjustments have been reflected for nonrecurring expenses as a result of the acquisition of the entities.
Six months ended June 30, 1998 1999 ---- ---- (Unaudited and in thousands, except per share amounts) Total net revenue $187,895 $192,998 Net income $ 12,260 $ 17,571 Earnings per share - basic and diluted $ 0.38 $ 0.54
The pro forma financial information does not purport to be indicative of the result which would actually have been recognized had the purchase transactions been completed on January 1, 1998 or which may be realized in the future. -8- 4. Shareholders' Investment On January 18, 1999, February 10, 1999, February 23, 1999 and March 24, 1999 the Company granted employee incentive stock options exercisable for 8,000, 2,000, 470,531, and 30,000 shares of Common Stock at exercise prices of $17.50, $16.8125, $19.6875, and $19.875 per share, respectively. The exercise prices were all fair market value on the grant date. The options become exercisable 25% after one year and an additional 6.25% for each quarter thereafter. On May 11,1999, the Company granted non-qualified common stock options for 10,000 shares at an exercise price of $23.625 per share to independent directors serving the Company's Board of Directors. These options vest ratably over an approximate three-year period. Prior to its merger with the Company, GeoWaste Incorporated issued warrants to an investment banker for investment advisory services rendered. The warrants allowed the holders to acquire up to 192,800 shares of the Company's common stock at $6.33 per share. On February 1, 1999, the holders of the warrants converted the warrants into 119,417 shares of the Company's common stock, following the cash-free exercise conversion rights contained in the warrant agreement. 5. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands):
Three Months Ended Six Months Ended ------------------ ---------------- June 30, June 30, -------- -------- 1998 1999 1998 1999 ---- ---- ---- ---- Numerator Income from continuing operations used in computing basic and diluted earnings per share $ 8,647 $ 10,376 $ 11,966 $ 17,418 ========== ========== ======= ======= Denominator Denominator for basic earnings per share - weighted average common shares 32,003,714 32,448,196 31,863,541 32,401,017 Effect of dilutive securities - employee stock options 705,111 317,319 471,978 247,800 ---------- ---------- ---------- ---------- Denominator for diluted warnings per share - adjusted weighted average common shares 32,708,825 32,765,515 32,335,519 32,648,817 ========== ========== ========== ==========
-9- 6. Landfill costs Landfill costs include land held for development which is not being amortized. In order to develop and operate a landfill, the Company typically must go through several governmental review processes and obtain one or more permits and often zoning or other land use approvals. Engineering and legal fees paid to third parties incurred to obtain a disposal facility permit are capitalized as landfill costs and amortized over the estimated related airspace capacity. These costs are not amortized until the permit is obtained and operations have commenced. If the Company determines that the facility cannot be developed, these costs are charged to expense. 7. Commitments and Contingencies In connection with the formation of the Company in 1993 through the consolidation of three groups of independent waste services companies, certain potential environmental liabilities associated with the previously filled portion of the Superior Valley Meadows landfill were identified. The range of possible loss has been estimated not to exceed $1.3 million. At the time of the consolidation of these companies into the Company, a contingent liability escrow was established to cover the highest estimated costs of redemption and monitoring with respect to the contingent liabilities. To indemnify the Company against these contingent liabilities, $1,308,000 is being held in an escrow account. The Company believes that the entire amount of such environmental liabilities will either be covered by the foregoing indemnification arrangement or otherwise is not expected to have a material adverse effect on the Company's results of operations or financial condition. The Company or its subsidiaries have been notified that they are potentially responsible parties ("PRPs") in connection with two sites listed on the National Priorities List ("NPL"). When the Company concludes that it is probable that a liability has been incurred with respect to a site, provision will be made in the Company's financial statements reflecting its best estimate of the liability based on management's judgment and experience, information available from regulatory agencies and the number, financial resources and relative degree of responsibility of other potentially responsible parties who are jointly and severally liable for remediation of the site as well as the typical allocation of costs among such parties. If a range of possible outcomes is estimated and no amount within the range appears to be a better estimate than any other, then the Company will provide for the minimum amount within the range, in accordance with generally accepted accounting principles. One NPL location is a landfill owned by the Company for which the range of total costs for remaining remediation is estimated to be between $688,000 and $2.3 million. The Company has an accrued liability of approximately $2.3 million relating to this matter. As the timing of payments is uncertain, the accrual was not measured on a discounted basis. The reasonably possible loss for this site is not expected to exceed the amounts accrued by the Company for the selected remedial action. The Company has entered into settlement agreements with certain of the generator PRPs, in which the generator PRPs agree to contribute a total of approximately 62% of future remediation costs and the annual operating, maintenance, and monitoring costs. The former owner of the location agreed to indemnify the Company up to $2.8 million for any site liabilities the Company may incur as a PRP. The Company has been paid approximately $500,000 by the former owner. The Company and the former owner are in dispute regarding the cost of a likely remediation plan. An engineer selected by the former -10- owner has estimated the total remediation costs to be $688,000. This dispute is now before an arbitrator. The Company has recorded as an asset approximately $2.3 million that is deemed probable of recovery from the generator PRPs and through indemnification from the former owner. The Company believes its existing financial reserves, together with the amounts paid and remaining payable by the former owner and the contribution obligations of the generator PRPs, are adequate to cover the currently anticipated remediation costs. The Company acquired Nicholas Enterprises, Inc. ("Nicholas") as part of the PenPac acquisition on September 30, 1998. Prior to the Company's acquisition of PenPac, Nicholas was named as a defendant in litigation pursuant to the New Jersey Spill Compensation and Control Act at Sharkey's Landfill, a site in New Jersey. During 1998, Nicholas was released from its liability pertaining to the site in exchange for remitting $300,000 of insurance proceeds and other additional assessments up to $50,000. Further, prior to the acquisition by the Company, Nicholas was named as a PRP at the Cortese Landfill, a NPL site in New York, pursuant to the Comprehensive Response, Compensation and Control Act. During 1994, Nicholas agreed to pay approximately $200,000 to the State of New York in final settlement of its share of past costs at the site. This amount has been paid. Nicholas has requested, but not yet received, release of liability for any subsequent costs related to this site. Although the Company has not been informed of any additional liability related to these sites, under the terms of the acquisition agreement for Nicholas, its former shareholders have agreed to indemnify the Company, to the extent not covered by insurance, for all claims arising from these sites. As is the case with all sites, the performance of the elected remedies will be subject to periodic review by regulatory agencies. In the event the selected remedies do not perform adequately to meet applicable state and federal standards, additional remedial measures beyond those currently anticipated could be required by regulatory agencies. Implementation of any such additional remedial measures may involve substantial additional costs beyond those currently anticipated. In the normal course of its business and as a result of the extensive government regulation of the solid waste industry, the Company periodically may become subject to various judicial and administrative proceedings and investigations involving federal, state or local agencies. To date, the Company has not been required to pay any material fine or judgment for violation of an environmental law. The Company is involved in various environmental matters and governmental proceedings, including original or renewal permit filings in connection with the establishment, operation, expansion, closure and post closure activities of certain landfills. There can be no assurance that such permits shall be granted or such proceedings resolved in a manner favorable to the Company. From time to time, the Company also may be subjected to actions brought by citizen's groups in connection with the permitting of landfills or transfer stations, or alleging violations of the permits pursuant to which the Company operates. The Company is also subject from time to time to claims for personal injury or property damage arising out of accidents involving its vehicles. The Company believes that the ultimate resolution of these other matters will not have a material adverse effect on the Company's financial condition or results of operations. The Company carries a range of insurance, including a commercial general liability policy and a property damage policy. The Company maintains a limited environmental impairment liability policy on its landfills and transfer stations that provides coverage, on a "claims made" basis, against certain -11- third-party off-site environmental damage. There can be no assurance that the limited environmental impairment policy will remain in place or provide sufficient coverage for existing, but not yet known, third-party, off-site environmental liabilities. Subsequent Event - Pending Merger with Vivendi OnJune 11, 1999 the Company and Vivendi, a societe anonyme organized under the laws of France ("Parent"), entered into an Agreement and Plan of Merger ("Merger Agreement") to acquire the Company in a two-step tender offer/merger transaction. The first step of the transaction was a cash tender offer by Onyx Solid Waste Acquisition Corp., a Wisconsin corporation and wholly-owned subsidiary of Parent ("Purchaser"), to acquire all of the Company's outstanding Common Stock, including the associated Common Stock Purchase Rights issued pursuant to the Rights Agreement, dated as of February 21, 1997, as amended, between the Company and LaSalle Bank National Association (f/k/a LaSalle National Bank), as Rights Agent (the "Rights" and, together with the Common Stock, the "Shares"), at $27.00 per Share, net to the seller in cash (the "Offer"). The Offer was completed on July 16, 1999 and Purchaser purchased approximately 30.3 million Shares, or approximately 93% of the issued and outstanding Shares, pursuant to the Offer. The merger of Purchaser with and into the Company (the "Merger"), in which the Company will be the surviving corporation, is the second and final step in the acquisition of the Company by Parent and is conditioned, among other things, principally upon the receipt of all necessary solid waste regulatory approvals in the states in which the Company operates. As a result of the Merger, the Company will become an indirect wholly-owned subsidiary of Parent. In the Merger, each outstanding Share (other than Shares owned by Parent, Purchaser or any other subsidiary of Parent, held in the treasury of the Company or owned by any wholly-owned subsidiary of the Company, and other than Shares as to which the holder has properly exercised dissenters' rights) will be converted into the right to receive $27.00 in cash, without interest thereon. The Merger Agreement provides that the Company will take, consistent with applicable law and its Restated Articles of Incorporation and By-Laws, all actions necessary to convene a meeting of holders of Shares as promptly as practicable to consider and vote upon the approval of the Merger Agreement. At such meeting of the Company's shareholders, all of the Shares then owned by Parent, Purchaser and any other subsidiary of Parent will be voted in favor of the Merger Agreement. As a result of the consummation of the Offer, Purchaser owns approximately 93% of the outstanding Shares, or approximately 80% of the aggregate voting power of the issued and outstanding Shares. Accordingly, the approval of the Merger Agreement at such special meeting of the Company's shareholders is assured without the affirmative vote of any other shareholder. -12- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. General The Company provides solid waste collection, transfer, transportation, recycling and disposal services to over 800,000 residential, commercial and industrial customers in Alabama, Florida, Georgia, Illinois, Michigan, Minnesota, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Wisconsin. The Company also provides other integrated waste services, most of which are project-based and many of that provide additional waste volumes to the Company's landfills and recycling facilities. As of June 30, 1999, solid waste operations consisted of 19 Company-owned solid waste landfills, four managed third party landfills, 49 solid waste collection operations, 18 recycling facilities and 22 solid waste transfer stations. As described more fully below, revenues for the periods presented were comprised of fees received for the following services:
Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1998 1999 1998 1999 ----- ---- ---- ---- Collection 62% 61% 63% 62% Third party disposal 19% 20% 18% 18% Recycling 7% 6% 8% 6% Other integrated waste services 12% 13% 11% 14% --- --- --- --- 100% 100% 100% 100% ==== ==== ==== ====
Results of Operations Overview The information presented below reflects the pro forma net income exclusive of merger costs incurred in connection with acquisitions during 1998 which were accounted for as poolings of interest. Pro forma net income includes federal and state income tax provisions for 1998 as if AWS, Gopher and PenPac had been taxable entities, and excludes the cumulative deferred tax provision for AWS which was a Subchapter S Corporation prior to its acquisition. -13-
Summary Financial Data (in thousands, except per share data) Three months ended June 30, ----------------------------------------------------------------- Per Per 1998 Share 1999 Share ---- ----- ---- ----- (restated) Revenue $81,462 - $98,995 - Net income, as reported $8,647 $0.26 $10,376 $0.32 Pro forma adjustments: Adjustment for income taxes (265) - - - ------- ----- ------- ----- Pro forma net income 8,382 0.26 10,376 0.32 Adjustments: Merger costs, net of tax 170 - - - ------- ----- ------- ----- Adjusted net income, exclusive of merger costs and cumulative deferred tax provisions $ 8,552 $0.26 $10,376 $0.32 ======== ===== ======= ===== Summary Financial Data (in thousands, except per share data) Three months ended June 30, ----------------------------------------------------------------- Per Per 1998 Share 1999 Share ---- ----- ---- ----- (restated) Revenue $149,625 - $179,003 - Net Income, as reported $ 11,966 $0.37 $ 17,418 $0.53 Pro forma adjustments: Adjustment for income taxes 600 (0.02) - - -------- ----- -------- ----- Pro forma net income 11,366 0.35 17,418 0.53 Adjustments: Deferred income taxes 771 0.02 - - Merger costs, net of tax 1,456 0.05 - - -------- ----- -------- ----- Adjusted net income, exclusive of merger costs and cumulative deferred tax provisions $ 13,593 $0.42 $ 17,418 $0.53 ======== ===== ======== =====
Revenues in the 1999 second quarter of $99.0 million increased 21.5% over the comparable period in the prior year primarily due to businesses acquired which were accounted for under the purchase method of accounting. Pro forma earnings per share, exclusive of one-time merger costs, increased 23.1% to $0.32 per share from $0.26 per share for the second quarter of 1998, as restated. Net income, exclusive of one-time merger costs, increased 21.3% to $10.4 million in the 1999 second quarter, from $8.6 million in the same period of 1998. The weighted average of common and common equivalent shares outstanding was 32.8 million for the second quarter of 1999 and 32.7 million for the second quarter of 1998, as restated. -14- For the first six months of 1999, revenues increased 19.6% to $179.0 million compared to $149.6 million for the same period in the prior year, primarily due to businesses acquired which were accounted for under the purchase method of accounting. Net income, excluding one-time merger costs and the cumulative deferred tax provision in 1998 for AWS which was a "S" Corporation prior to its acquisition, increased 28.1% to $17.4 million in the first half of 1999, from $13.6 million in the first half of 1998. Pro forma earnings per share, excluding one-time merger costs and the cumulative deferred tax provision for AWS in 1998, increased 26.2% to $0.53 per share from $0.42 per share for the second half of 1998, as restated. The weighted average of common and common equivalent shares outstanding was 32.6 million for the first half of 1999 and 32.3 million for the first half of 1998, as restated. The following table sets forth for the periods indicated the percentage of revenues represented by the individual line items reflected in the Company's condensed consolidated statements of operations:
Three months ended June 30, Six months ended June 30, 1998 1999 1998 1999 ---- ---- ---- ---- (restated) (restated) Revenues 100.0% 100.0% 100.0% 100.0% Cost of Operations 57.5 56.3 57.9 57.0 Selling, general and administrative expenses 11.8 11.6 13.1 12.2 Merger costs 0.4 - 1.2 - Depreciation and amortization 12.2 12.9 12.9 13.3 ----- ----- ----- ----- Operating income 18.1 19.2 14.9 17.5 Interest expense 1.1 1.5 1.3 1.4 Other (income) expense (0.6) (0.1) (0.7) (0.4) ----- ----- ----- ----- Income before income taxes 17.6 17.8 14.3 16.5 Income taxes 7.0 7.3 6.3 6.8 ----- ----- ----- ----- Net income 10.6% 10.5% 8.0% 9.7% ===== ===== ====== =====
Revenues Revenues increased $17.5 million, or 21.5%, and 29.4 million, or 19.6%, for the three-and six-month periods, respectively, ended June 30, 1999 compared with the same periods in 1998. These increases for each 1999 period were primarily due to the impact operations acquired which were accounted for under the purchase method of accounting. Revenues for each 1999 period compared to the same periods in 1998 increased $13.5 million and $23.3 million, respectively, from the impact of operations acquired. The increase in revenue was also due, to a much lesser extent, to increases in volumes of wastes collected and disposed at the Company's landfills and to price increases enacted late in the first quarter of 1999. -15- Cost of Operations Cost of operations increased $8.9 million, or 19.0%, and $15.4 million, or 17.8%, for the three-and six-month periods ended June 30, 1999, respectively, compared to the same periods in 1998. However, as a percentage of revenues, cost of operations decreased from 57.5% in the second quarter of 1998 to 56.3% in the second quarter of 1999, and from 57.9% in the first six months of 1998 to 57.0% in the first six months of 1999. During the second quarter of 1999, the Company internalized 63% of the waste it collected to its own disposal sites. The increase in the dollar amount of cost of operations in both the three-and six-months ended June 30, 1999 over the comparable periods in 1998 was primarily attributable to the costs of collecting and disposing of the increased volumes of wastes received from services provided to new customers, including the operation of new businesses acquired. Selling, General and Administrative Expense ("SG&A") SG&A increased $1.9 million, or 19.3%, and $2.2 million, or 11.3%, for the three-and six-month periods ended June 30, 1999, respectively, compared to the same periods in 1998. As a percentage of revenues, SG&A decreased to 11.6% in the second quarter of 1999 compared to 11.8% in the second quarter of 1998, and to 12.2% in the first six months of 1999 compared to 13.1% in the first six months of 1998. SG&A decreased as a percentage of revenue due primarily to the impact of spreading corporate SG&A costs over a larger revenue base as the Company integrates acquisitions and continues to pursue its acquisition growth strategy. The actual dollar amount of SG&A increased primarily due to increased costs for personnel necessary to service new customers, including those associated with the operations acquired. Merger Costs The Company incurred no nonrecurring merger costs during the first six months of 1999 compared to $1.9 million in the first six months of 1998 because there were no mergers completed during 1999 which were accounted for using the pooling of interests method. The one-time merger costs in the first half of 1998 included severance and bonuses, professional fees, and other related merger costs. Depreciation and Amortization Depreciation and amortization increased $2.9 million, or 28.7%, and $4.5 million, or 23.4%, for the three- and six-month periods ended June 30, 1999, respectively, compared to the same periods in 1998 due to increased depreciation costs for the additional assets and operations acquired. As a percentage of revenues, depreciation and amortization increased to 12.9% in the second quarter of 1999 compared to 12.2% in the second quarter of 1998, and to 13.3% in the first six months of 1999 compared to 12.9% in the first six months of 1998. Liquidity and Capital Resources The Company's balance sheet at June 30, 1999 reflected approximately $4.4 million in cash and cash equivalents compared to $9.7 million at December 31, 1998. The decrease in cash and cash equivalents was primarily due to the use of cash to acquire solid waste companies during the first six months of 1999. -16- At June 30, 1999, the Company had $129.3 million of outstanding borrowings, and approximately $3.9 million in letters of credit outstanding under its revolving credit facility. Total long-term debt at June 30, 1999 was $132.8 million. At June 30, 1999, the ratio of the Company's long-term debt to total capitalization was 28.4% compared to 17.3% at December 31, 1998. This increase was attributable to the increase in the use of debt during the first half of 1999 to fund the Company's growth through acquisitions. Capital expenditures for the six months ended June 30, 1999 were $32.4 million compared to $20.4 million for the six months ended June 30, 1998, primarily due to increased spending for landfill expansions. Net cash provided by operations for the six months ended June 30, 1999 increased to $23.3 million from $22.9 million in the six months ended June 30, 1998. The increase was primarily due to the increase in net income of $5.5 million and to an increase in depreciation and amortization, a non-cash expense, of $4.5 million between the first six months of 1998 and the first six months of 1999. The increase in cash provided was mostly offset by the change in operating assets and liabilities of $9.3 million between the first six months of 1998 and the first six months of 1999. Net cash used in investing activities for the six months ended June 30, 1999 increased to $93.5 million from $47.0 million in the six months ended June 30, 1998. The increase was primarily due to the Company's $62.2 million of net cash payments for operations acquired in the six months ended June 30, 1999 compared to the $27.4 million of net cash payments in the six months ended June 30, 1998. Net cash provided by financing activities in the six months ended June 30, 1999 totaled $65.0 million, compared to $8.0 million of cash used in the six months ended June 30, 1998, reflecting the proceeds from long-term debt of $77.3 million during the first half of 1999 compared to only $4.8 million in the first half of 1998. As a result of the consummation of the Offer, on July 20, 1999 Parent repaid in full all outstanding indebtedness to the Company's syndicate of banks. Parent intends to directly or indirectly fund the Company's future borrowing needs. Seasonality The Company's historical results of operations have tended to vary seasonally, with the first quarter of the year typically generating the least amount of revenues, and with revenues higher in the second and third quarters, followed by a decline in the fourth quarter. This seasonality reflects the lower volume of waste, as well as decreased revenues from project-based and other integrated waste services during the fall and winter months, as well as the operating difficulties experienced during the protracted periods of cold and inclement weather typically experienced during the winter in the Upper Midwest. Also, certain operating and other fixed costs remain relatively constant throughout the calendar year, resulting in a similar seasonality of operating income. -17- Year 2000 Initiative The Company is conducting a comprehensive review to ensure that all internal computer systems and equipment are, or prior to the end of 1999 will be, Year 2000 compliant. The Company's Year 2000 readiness plan includes the following phases: (i) conducting an inventory of the Company's internal systems, including information technology systems and non-information technology systems (which include office and facilities' environment related systems) and the systems acquired or to be acquired by the Company from third parties; (ii) assessing and prioritizing any required remediation; (iii) remediating any problems by repairing or, if appropriate, replacing the non-compliant systems; (iv) testing of all remediated systems for Year 2000 compliance; and (v) developing contingency plans that may be employed in the event that any system used by the Company is unexpectedly affected by an unanticipated Year 2000 problem. The Company has completed its inventory phase of this plan and is actively engaged in completing the remaining phases. The Company currently expects to complete all phases of this plan and that all computer systems will be Year 2000 compliant before October 31, 1999. In addition to assessing its own systems, the Company has initiated communication with all of its vendors, service providers and third party business partners to assess their Year 2000 readiness. The Company plans to continue assessment of its vendors, service suppliers and third party business partners to ensure Year 2000 readiness. Despite the Company's diligence, there can be no guarantee that the non-compliant systems of other entities which the Company relies upon in its day to day operations will not have a material adverse impact on the Company. The actual impact on the Company resulting from non- compliance of these entities cannot be determined at this time. The Company has limited the scope of its risk assessment to those factors which it can reasonably be expected to influence. The Company has made the assumption that government agencies, utility companies and national telecommunication providers will continue to operate without interruption. The lack of such services could have a material impact on the Company's ability to operate, but the Company has little, if any, ability to influence such results, or to make alternative arrangements in advance for such services if they are unavailable. Additionally, the Company believes that disruptions in the economy generally resulting from Year 2000 issues could have a material adverse impact on the Company. The Company could be subject to litigation for computer system failures such as equipment shutdown or failure to properly update business records. Other potential consequences include the inability to accurately and timely update customers' accounts, process financial transactions, bill customers, report accurate data to management, shareholders, customers, and others as well as business interruptions and financial losses. The amount of potential liability or loss of revenue to the Company cannot be reasonably estimated at this time. The Company is currently developing contingency plans to address Year 2000 problems. The Company believes that this is an appropriate time frame for developing these contingency plans. While the Company believes its planning efforts should be adequate to address its Year 2000 concerns, there can be no guarantee that the systems of other companies on which the Company's systems and operations rely will be converted on a timely basis and will not have a material effect on the Company. The Company currently estimates that it will cost approximately $250,000 to fully execute its Year 2000 initiative. Through June 30, 1999, the Company has spent approximately -18- $140,000 in connection with Year 2000 issues. All Year 2000 expenditures are made from the information systems department budget and are expensed against earnings. The percentage of the information systems department budget during 1999 expected to be used for Year 2000 remediation is less than 10%. No information systems projects have been deferred due to Year 2000 efforts. -19- PART II Item 1. Legal Proceedings See Note 7 to Condensed Consolidated Financial Statements included in this Form 10-Q for information regarding certain legal proceedings. Item 2. Changes in Securities and Use of Proceeds. A modification has been made to the Rights Agreement, dated as of February 21, 1998, as amended (the "Rights Agreement"), between LaSalle Bank National Association (f/k/a LaSalle National Bank), as Rights agent, relating to the common stock, $.01 par value per share, of the Company (the "Common Stock"), including the associated Common Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement. On June 11, 1999, the Company entered into an amendment to the Rights Agreement to make it inapplicable to (i) the Offer and the Merger and (ii) the Merger Agreement, the Stock Option Agreement, dated as of June 11, 1999, by and among Parent and the Company, and the transactions contemplated thereby. Item 4. Submission of Matters to a Vote of Security Holders The Company's 1999 annual meeting of shareholders was held on Tuesday, May 11, 1999. At the meeting, the shareholders elected each of Joseph P. Tate and Walter G. Winding to the Company's Board of Directors for three-year terms expiring at the Company's 2002 annual meeting of shareholders and until their successors are duly qualified and elected. The terms of all other then serving directors continued after the meeting, including G. William Dietrich, Francis J. Podvin, Warner C. Frazier and Donald Taylor. As of the April 1, 1999 record date for the annual meeting, 32,356,812 shares of Common Stock were outstanding and eligible to vote. Of the 28,375,138 shares of Common Stock voted at the meeting in person or by proxy, the following votes were recorded for each nominee: For Withheld Name Votes Percentage Votes Percentage ---- ----- ---------- ----- ---------- Joseph P. Tate 26,691,241 94.1% 1,683,897 5.9% Walter G. Winding 26,690,229 94.1% 1,684,909 5.9% The tabulation of votes for the election of directors resulted in no broker non-votes or abstentions. Effective as of July 27, 1999, as a result of consummation of the Offer and pursuant to the Merger Agreement, Messrs. Podvin, Frazier, Tate and Taylor resigned from the Company's Board of Directors, the size of the Board was reduced from seven to five members and the Board appointed the Parent's designees, Henri Proglio, Denis Gasquet and Michel Gourvennec, as directors of the Company. -20- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: The Exhibits filed or incorporated by reference herein are as specified in the Exhibit Index. (b) Reports on Form 8-K: (i) On June 11, 1999, the Company filed a Current Report on Form 8-K to reflect (under Item 5 of Form 8-K) the execution of an Agreement and Plan of Merger with Parent providing for Parent's acquisition of all outstanding Shares. (ii) On June 21, 1999, the Company filed an amendment on Form 8-K/A to the Company's Current Report on Form 8-K dated July 16, 1999. The report, as amended, included (under Item 7 of Form 8-K) the Shareholder Tender Agreement, dated as of June 11, 1999, by and among Parent, Purchaser and Joseph P. Tate. (iii) On July 16, 1999, the Company filed a Current Report on Form 8-K to reflect (under Item 1 of Form 8-K) the completion of the Offer to purchase all outstanding Shares at $27.00 per Share by Purchaser. -21- 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. Superior Services, Inc. (Registrant) Date: August 16, 1999 /s/ George K. Farr ---------------- ----------------------------------- George K. Farr Chief Financial Officer -22- SUPERIOR SERVICES, INC. EXHIBIT INDEX Exhibit Number Description - - ------ ----------- (2.1) Agreement and Plan of Merger, dated as of June 11, 1999, by and among Vivendi, Onyx Solid Waste Acquisition Corp. and Superior Services, Inc. [Incorporated by reference to Exhibit 2.1 to Superior Services Inc.'s Current Report on Form 8-K dated June 11, 1999 and filed June 14, 1999, as amended by a Form 8-K/A filed June 21, 1999.] (2.2) Stock Option Agreement, dated as of June 11, 1999, by and between Superior Services, Inc. and Vivendi. [Incorporated by reference to Exhibit 2.2 to Superior Services Inc.'s Current Report on Form 8-K dated June 11, 1999 and filed June 14, 1999, as amended by a Form 8-K/A filed June 21, 1999.] (3.1) Amendments to the Amended and Restated By-laws dated July 27, 1999. (3.2) Amended and Restated By-laws, dated July 27, 1999, as amended. (4) Amendment to Rights Agreement, dated as of June 11, 1999, by and between Superior Services, Inc. and LaSalle Bank National Association (f/k/a LaSalle National Bank). [Incorporated by reference to Exhibit 4 to Superior Services, Inc.'s Current Report on Form 8-K dated June 11, 1999 and filed June 14, 1999, as amended by Form 8-K/A filed June 21, 1999.] (10.1) Employment Agreement dated as of June 11, 1999 by and between Superior Services, Inc. and G. William Dietrich. [Incorporated by reference to Exhibit 99.2 to Superior Services, Inc.'s Current Report on Form 8-K dated June 11, 1999 and filed June 14, 1999, as amended by Form 8-K/A filed June 21, 1999.] (10.2) Employment Agreement dated as of June 11, 1999 by and between Superior Services, Inc. and George K. Farr. [Incorporated by reference to Exhibit 99.3 to Superior Services, Inc.'s Current Report on Form 8-K dated June 11, 1999 and filed June 14, 1999, as amended by Form 8-K/A filed June 21, 1999.] (10.3) Employment Agreement dated as of June 11, 1999 by and between Superior Services, Inc. and Peter J. Ruud. [Incorporated by reference to Exhibit 99.4 to Superior Services, Inc.'s Current Report on Form 8-K dated June 11, 1999 and filed June 14, 1999, as amended by Form 8-K/A filed June 21, 1999.] (27) Financial data Schedule (EDGAR version only) EX-3.1 2 AMENDMENT AMENDED AND RESTATED BY-LAWS Exhibit 3.1 AMENDMENT TO THE AMENDED AND RESTATED BY-LAWS OF SUPERIOR SERVICES, INC. Effective July 27, 1999, the Board of Directors of Superior Services, Inc. has amended its By-laws (the "By-laws") adopted as of November 29, 1995 as follows: 1. Section 3.01 of the By-laws is amended to read in its entirety as follows: ss. 3.01. General Powers; Number, Tenure and Qualifications. All corporate powers shall be exercised by or under the authority of, and the Corporation's business and affairs shall be managed under the direction of, the Board of Directors. The number of directors shall be fixed by a resolution adopted by a majority of the directors then in office, or by amendment of these By-laws, but in no event shall there be less than five (5) directors, and a decrease in the number of directors shall not shorten the term of office of an incumbent director. Each director shall hold office until the next annual meeting of shareholders and until his or her successor shall has been elected and, if necessary, qualified, or until there is a decrease in the number of directors which takes effect after the expiration of his term, or until his or her prior death, resignation or removal. 2. Section 3.12 of the By-laws is amended to read in its entirety as follows: 3.12. Vacancies. Any vacancy occurring on the Board of Directors, including a vacancy created by an increase in the number of directors, shall be filled by the Board of Directors. If the directors remaining in office constitute fewer than a quorum of the Board, then the vacancy shall be filled by the affirmative vote of a majority of all directors remaining in office. Any director elected to fill such vacancy shall serve as a director until the next election of directors, and until his or her successor shall be elected and qualified. -1- EX-3. 3 AMENDED AND RESTATED BYLAWS Exhibit 3.2 AMENDED AND RESTATED BY-LAWS OF SUPERIOR SERVICES, INC. (Adopted as of November 29, 1995 and amended as effective July 27, 1999) ARTICLE I. OFFICES ss. 1.01. Business Office. The Corporation's principal office shall be within the State of Wisconsin and shall be located in Milwaukee County. The Corporation may have such other offices, either within or without the State of Wisconsin, as the Board of Directors may designate or as the Corporation's business may require from time to time. The Corporation shall maintain at its principal office a copy of certain records, as required by the Wisconsin Business Corporation Law (the "Act"). ss. 1.02. Registered Office. The Corporation's registered office required by the Act to be maintained in the State of Wisconsin shall be the place designated by resolution of the Corporation's Board of Directors and may be, but need not be, identical to the principal office in the State of Wisconsin. The address of the registered office may be changed from time to time. ARTICLE II. SHAREHOLDERS ss. 2.01. Annual Shareholder Meeting. The annual meeting of the shareholders shall be held on the second Tuesday in May in each year at the hour of 10:00 a.m., or at such other time and date as may be fixed by or under the authority of the Board of Directors, as they deem appropriate in the good faith exercise of their business judgment, for the purposes of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Wisconsin, such meeting shall be held at the same time on the next succeeding business day. If the election of directors shall not be held on the day designated herein for the annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be held. ss. 2.02. Special Shareholder Meetings. (a) Generally. Special meetings of the shareholders, for any purpose or purposes, may be called by (1) the Chairperson of the Board, (2) the President, (3) the Board of Directors or such officers as the Board of Directors may authorize from time to time, or (4) the President or Secretary upon the written request of the holders of record of at least one-tenth of all the outstanding shares of the Corporation entitled to vote on any issue at the meeting. The party calling the special meeting shall designate the date and hour of the meeting, which date shall not be more than seventy (70) days after the demand record date, as specified herein. (b) Meetings Called by Shareholders. For purposes of determining the number of shareholders necessary to demand a special meeting of the shareholders, the record date (the "demand record date") shall be the sixtieth (60th) day preceding the date of the special shareholder meeting. The requisite number of shareholders demanding such a meeting (the "demanding shareholders") shall deliver a written request to the President or Secretary, via hand delivery or registered mail, within fifteen (15) days after the demand record date. The costs of any special meeting, including, without limitation, the costs or expenses of preparing and mailing the notice of meeting and any related proxy materials shall be the responsibility of the demanding shareholders. (c) Notice Requirements. Upon delivery to the President or Secretary of a written request by the demanding shareholders, stating the purpose(s) of the requested meeting, dated and signed by the person(s) entitled to request such a meeting, it shall be the duty of the officer to whom the request is delivered to give, within thirty (30) days of such delivery, notice of the meeting to the shareholders. Notice of any special meeting shall be given in the manner provided in ss. 2.04 of these By-laws. Only business within the purpose(s) described in the special meeting notice shall be conducted at a special shareholders meeting. (d) Independent Verification. The Board may utilize independent inspectors to verify that demand has properly been made by the requisite ten percent (10%) of the outstanding shares of the Corporation, and that the procedures required by this Section 2.02 have been followed. ss. 2.03. Place of Shareholder Meeting. The Board of Directors may design any place, either within or without the State of Wisconsin, as the place of meeting for any annual or for any special meeting called by the Board of Directors. A waiver of notice signed by all persons entitled to vote at a meeting also may designate any place, either within or without the State of Wisconsin, as the place for the holding of such meeting. If no designation is made by the Board of Directors, or if a special meeting be otherwise called, the place of the meeting shall be the Corporation's principal business office in the State of Wisconsin, but any meeting may be adjourned to reconvene at any place designated by vote of a majority of the shares represented thereat. 2 ss. 2.04. Notice of Shareholder Meeting. (a) Required Notice. Unless otherwise required by the Act, written notice stating the place, day and hour of any annual or special shareholder meeting shall be delivered not less than ten (10) nor more than sixty (60) days before the meeting date, either personally or by mail, by or at the direction of the President, the Board of Directors, or other persons calling the meeting, to each shareholder of record entitled to vote at such meeting and to any other shareholder entitled by the Act or the Articles of Incorporation to receive notice of the meeting. Notice shall be deemed to be effective at the earlier of: (1) when deposited in the United States mail, addressed to the shareholder at his or her address as it appears on the Corporation's stock transfer books, with postage thereon prepaid; (2) on the date shown on the return receipt if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee; (3) when received; or (4) 5 days after deposit in the United States mail, if mailed postpaid and correctly addressed to an address other than that shown in the Corporation's current record of shareholders. (b) Adjourned Meeting. If any shareholder meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, and place, if the new date, time, and place is announced at the meeting before adjournment. But if a new record date for the adjourned meeting is or must be fixed (see ss. 2.05 of this Article II), then notice must be given pursuant to the requirements of paragraph (a) of this ss. 2.04, to those persons who are shareholders as of the new record date. (c) Waiver of Notice. A shareholder may waive notice of meeting (or any notice required by the Act, Articles of Incorporation, or By-laws), by a writing signed by the shareholder entitled to the notice, which is delivered to the Corporation (either before or after the date and time stated in the notice) for inclusion in the minutes or filing with the corporate records. A shareholder's attendance at a meeting: (i) waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; (ii) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented. (d) Contents of Notice. The notice of each special shareholder meeting shall include a description of the purpose or purposes for which the meeting is called. If a purpose of any shareholder meeting is to consider either: (1) a proposed amendment to the Articles of Incorporation (including any restated articles requiring shareholder approval); (2) a plan of merger or share exchange; (3) the sale, lease, exchange or other disposition of all, or substantially all, of the Corporation's property; (4) the dissolution of the Corporation; or (5) the removal of a director, the notice must so state and be accompanied by, respectively, a copy 3 or summary of the: (1) articles of amendment; (2) plan of merger or share exchange; or (3) transaction for disposition of the Corporation's property. If the proposed corporate action creates dissenters' rights, the notice must state that shareholders are, or may be entitled to assert dissenters' rights, and must be accompanied by a copy of Section 180.1301 of the Act. Except as provided in this ss. 2.04(d), or as provided in the Corporation's Articles of Incorporation, or otherwise in the Act, the notice of an annual shareholder meeting need not include a description of the purpose or purposes for which the meeting is called. ss. 2.05. 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 in this Section 2.05. (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 2.05, 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 45 days nor more than 75 days in advance of the first annual anniversary (the "Anniversary Date") of the date set forth in the Corporation's proxy statement for the prior year's Annual Meeting as the date on which the Corporation first mailed definitive proxy materials for the prior year's Annual Meeting; provided, however, that in the event that the date of the Annual Meeting is advanced by more than 30 days or delayed by more than 60 days from the second Tuesday in the month of May, notice by the shareholder to be timely must also 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 4 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 Securities and Exchange Act (the "Exchange Act"), including any information that would be required to be included in a proxy statement filed pursuant to Regulation 14A had a 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. (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 2.04(d) 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 2.05. 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 90 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 5 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 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 2.05 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 2.05. 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 2.05 and, if any proposed nomination or business is not in compliance with this Section 2.05 to declare that such defective proposal shall be disregarded. (ii) For purposes of this Section 2.05, "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 2.05, 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 2.05. Nothing in this Section 2.05 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. ss. 2.06. Fixing of Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or shareholders entitled to receive payment of any distribution or dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may fix in advance a date as the record date. Such record date shall be not more than seventy (70) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no such record 6 date is fixed, the record date for determination of such shareholders shall be at the close of business on: (a) With respect to an annual shareholder meeting or any special shareholder meeting called by the Board of Directors or any person specifically authorized by the Board or these By-laws to call a meeting, the day before the first notice is delivered to shareholders; (b) With respect to a special shareholder's meeting demanded by the shareholders, the date the first shareholder signs the demand; (c) With respect to the payment of a share dividend, the date the Board authorizes the share dividend; (d) With respect to actions taken in writing without a meeting (pursuant to Article II, ss. 2.12), the date the first shareholder signs a consent; (e) With respect to a distribution to shareholders, (other than one involving a repurchase or acquisition of shares), the date the Board authorizes the distribution; and (f) With respect to any other matter for which such a determination is required, as provided by law. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof unless the Board of Directors fixes a new record date which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. ss. 2.07. Voting Lists. The officer or agent having charge of the stock transfer books for shares of the Corporation shall make, before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each. The list must be arranged by voting group, if such exists, and within each voting group by class or series of shares. The shareholder list shall be subject to inspection at the Corporation's principal office by any shareholder at any time during usual business hours for any proper purpose, beginning two (2) business days after notice is given of the meeting for which the list was prepared. Such list also shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the meeting for purposes related to the meeting. A shareholder, or his or her agent or attorney, is entitled on written demand to inspect and, subject to the requirements of the Act, to copy the list during regular business hours and at the shareholder's expense, during the period it is available for inspection. The Corporation shall maintain the shareholder list in written form or in another form capable of conversion into written form within a reasonable time. Notwithstanding the foregoing 7 provision to the contrary, the Corporation's failure or refusal to prepare or make available the shareholder list shall not affect the validity of any action taken at such shareholder meeting. ss. 2.08. Shareholder Quorum and Voting Requirements. If the Articles of Incorporation or the Act provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by the voting group. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the Articles of Incorporation or the Act provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter. If the Articles of Incorporation or the Act provides for voting by two (2) or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting. However, a share represented at a meeting solely for the purpose of objecting to the holding of the meeting or to the transaction of business at the meeting shall not be deemed present at the meeting for quorum purposes. If a quorum exists, action on a matter (other than the election of directors) by a voting group is 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 Act require a greater number of affirmative votes. ss. 2.09. Proxies. Except as otherwise provided by the Act, at all meetings of shareholders, a shareholder may vote in person, or vote by proxy which is executed in writing by the shareholder or which is executed by his duly authorized attorney-in-fact. Such proxy shall be filed with the secretary of the Corporation or other person authorized to tabulate votes before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. Unless otherwise provided in the appointment form, a proxy appointment may be revoked at any time before it is voted, either by written notice filed with the Secretary or other officer or agent of the Corporation authorized to tabulate votes, or by oral notice given by the shareholder during the meeting. The presence of a shareholder who has filed his or her proxy appointment shall not of itself constitute a revocation. 8 ss. 2.10. Voting of Shares. Unless otherwise provided in the Articles of Incorporation or the Act, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. Except as provided by specific court order, no shares held by another corporation, if a majority of the shares entitled to vote for the election of directors of such other corporation are held by the Corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time for purposes of any meeting. Provided, however, the preceding sentence shall not limit the Corporation's power to vote any shares, including its own shares, held by it in a fiduciary capacity. Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares. ss. 2.11. Corporation's Acceptance of Votes. (a) 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, is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder. (b) If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, the Corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if: (i) the shareholder is an entity as defined in the Act and the name signed purports to be that of an officer or agent of the entity; (ii) the name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the Corporation requests, evidence of fiduciary status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, or proxy appointment; (iii) 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 has been presented with respect to the vote, consent, waiver, and proxy appointment; (iv) 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 9 shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment; (v) two or more persons are the shareholder as covenants 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 the co-owners. (c) The Corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent 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. (d) The Corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the shareholder for the consequences of the acceptance or rejection. (e) Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise. ss. 2.12. Unanimous Consent Without Meeting. Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if one or more consents in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof and are delivered to the Corporation for inclusion in the minute book. A consent signed under this section has the effect of a meeting vote and may be described as such in any document. ss. 2.13. Dissenters' Rights. Each shareholder shall have the right to dissent from action by the Corporation and obtain payment for his or her shares when so authorized by the Act, the Articles of Incorporation, these By-laws, or by resolution of the Board of Directors. ss. 2.14. Conduct of Meetings. The Chairperson of the Board, if one has been elected, or if none has been elected, the President, or in his or her absence the Vice-President, and in his or her absence, any person chosen by the shareholders present, shall call the meeting of the shareholders to order and shall act as Chairman of the meeting, and the Secretary of the Corporation shall act as Secretary of all meetings of the shareholders, except that the presiding officer may appoint any Assistant Secretary or other person to act as Secretary of the meeting. 10 ARTICLE III. BOARD OF DIRECTORS ss. 3.01. General Powers; Number, Tenure and Qualifications. All corporate powers shall be exercised by or under the authority of, and the Corporation's business and affairs shall be managed under the direction of, the Board of Directors. The number of directors shall be fixed by a resolution adopted by a majority of the directors then in office, or by amendment of these By-laws, but in no event shall there be less than five (5) directors, and a decrease in the number of directors shall not shorten the term of office of an incumbent director. Each director shall hold office until the next annual meeting of shareholders and until his or her successor shall have been elected and, if necessary, qualified, or until there is a decrease in the number of directors which takes effect after the expiration of his term, or until his or her prior death, resignation or removal. ss. 3.02. Election. Unless otherwise provided in the Articles of Incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. ss. 3.03. 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. Any such regular meeting may be held by any means of communication as permitted by ss. 3.08. ss. 3.04. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chairperson of the Board, if one has been elected, the President or any four (4) directors. The person or persons authorized to call special meetings of the Board of Directors may fix any time and any place, either within or without the State of Wisconsin, as the time and place for holding any special meeting of the Board of Directors called by them. If no place is fixed by the person calling the meeting, the place of meeting shall be the Corporation's principal office in the State of Wisconsin. Any such special meeting may be held by any means of communication as permitted by ss. 3.08. 11 ss. 3.05. Notice of Special Meetings; Waiver of Notice. Notice stating the time and place of any special meeting of the Board of Directors shall be given at least twenty-four (24) hours previously thereto by written notice delivered personally or mailed to each director at his or her business address, or such other address as designated in writing to the Secretary, or by telephone or telegram. If mailed, such notice shall be deemed to be effective with the earlier of: (1) when received, or (2) five days after deposit in the United States Mail, addressed to the director's business office, with postage thereon prepaid; or (3) the date shown on the return receipt if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the director. If notice be given by telephone or telegram, such notice shall be deemed to be delivered when the notice is given personally by telephone or when the telegram is delivered to the telegraph company. Whenever any notice is required to be given to any director of the Corporation under the provisions of these By-laws or under the provisions of the Articles of Incorporation or under the provisions of any statute, a waiver thereof in writing, signed at any time, whether before or after the time of the 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 the 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. ss. 3.06. Director Quorum. Except as otherwise specified by law or the Articles of Incorporation or these By-laws, a majority of the number of directors fixed in the manner provided by ss. 3.01 of this Article III shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. A majority of the number of directors appointed to serve on a committee as authorized in ss. 3.15 of these By-laws shall constitute a quorum for the transaction of business at any committee meeting. These provisions shall not, however, apply to the determination of a quorum for actions taken under emergency By-laws or any other provisions of these By-laws that fix different quorum requirements. ss. 3.07. Voting Requirement. The affirmative vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors or a committee of the Board of Directors. This provision shall not, however, apply to any action taken by the Board of Directors pursuant to ss. 3.14 or Article X of these By-laws, or in the event the affirmative vote of a greater number of directors is required by the Act, the Articles of Incorporation, or any other provision of these By-laws. 12 ss. 3.08. Meetings by Telephonic Communication. To the extent provided in these By-laws, the Board of Directors, or any committee of the Board, may, in addition to conducting meetings in which each director participates in person, and notwithstanding any place set forth in the notice of the meeting or these By-laws, conduct any regular or special meeting by the use of any electronic means of communication, such as by conference telephone, provided all participating directors may simultaneously hear each other during the meeting. Before the commencement of any business at a meeting at which any directors do not participate in person, all participating directors shall be informed that a meeting is taking place at which official business may be transacted. ss. 3.09. Director's Assent. A director who is present at a meeting of the Board of Directors or a committee of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless: (1) the director objects at the beginning of the meeting (or promptly upon the director's arrival) to holding it or transacting business at the meeting; or (2) the director dissents or abstains from the action taken and minutes of the meeting are prepared that show the director's dissent or abstention from the action; (3) the director dissents or abstains from an action taken, minutes of the meeting are prepared that fail to show the director's dissent or abstention from the action taken and the director delivers to the Corporation a written notice of that failure that complies with Section 180.0141 of the Act promptly after receiving the minutes; or (4) the director delivers written notice of his or her dissent or abstention to the presiding officer of the meeting before its adjournment or to the Corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken. ss. 3.10. Conduct of Meetings. The Chairperson of the Board, if one has been elected, or if none has been elected, the President, and in his absence the Vice-Presidents in the order appointed under ss. 4.11 of Article IV, and in their absence, any director chosen by the directors then present, shall call meetings of the Board of Directors to order and shall act as Chairman of the meeting. The Secretary of the Corporation shall act as secretary of all meetings of the Board of Directors, but in the absence of the secretary, the presiding officer may appoint any Assistant secretary or any director or other person present to act as secretary of the meeting. ss. 3.11. Removal; Resignation. (a) Any director may be removed from office with or without cause, but only by the affirmative vote of shareholders holding at least sixty-six and two-thirds percent (66-2/3%) of the voting power of the then outstanding shares of all classes of capital stock of the Corporation generally possessing voting rights in the election of directors, considered for this purpose as a single class; provided, however, that if the Board of Directors by resolution adopted by the Requisite Vote shall have recommended removal of a director, then the 13 shareholders may remove such director from office with or without cause by a majority of such outstanding shares. (b) A director may resign at any time by filing a written resignation with the Secretary of the Corporation. ss. 3.12. Vacancies. Any vacancy occurring on the Board of Directors, including a vacancy created by an increase in the number of directors, shall be filled by the Board of Directors. If the directors remaining in office constitute fewer than a quorum of the Board, then the vacancy shall be filled by the affirmative vote of a majority of all directors remaining in office. Any director elected to fill such vacancy shall serve as a director until the next election of directors, and until his or her successor shall be elected and qualified. ss. 3.13. Compensation and Expenses. The Board of Directors, irrespective of any personal interest of any of its members, may (1) establish reasonable compensation of all directors for services to the Corporation as directors or may delegate this authority to an appropriate committee, (2) provide for, or delegate authority to an appropriate committee to provide for, reasonable pensions, disability or death benefits, and other benefits or payments to directors and to their estates, families, dependents, or beneficiaries for prior services rendered to the Corporation by the directors, and (3) provide for reimbursement of reasonable expenses incurred in the performance of the directors' duties, including the expense of traveling to and from Board meetings. ss. 3.14. 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, and filed with the Corporation's records. Action taken by consent is effective when the last director signs the consent, unless the consent specifies a different effective date. A signed consent has the effect of a meeting and may be described as such in any document. ss. 3.15. Committees. The Board of Directors by resolution adopted by the affirmative vote of a majority of the number of directors may designate one or more committees, each committee to consist of two (2) or more directors elected by the Board of Directors, which to the extent provided in said resolution, as initially adopted, and as thereafter supplemented or amended by further resolution adopted by a like vote, 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 Corporation's business and affairs, except action in respect to the (1) authorization of distributions, (2) the approval or proposal to shareholders of action for which the Act requires approval by 14 shareholders, (3) filling vacancies on the Board of Directors or its committees, (4) amending the Articles of Incorporation pursuant to Board authority, (5) adopting, amending or repealing By-laws, (6) approving a plan of merger not requiring shareholder approval, (7) the authorization or approval to reorganize shares, except according to a formula or method prescribed by the Board of Directors, (8) the authorization or approval of the issuance or sale or contract for sale of shares, or (9) the determination of the designation and relative rights, preferences and limitations of a class or series of shares. Sections 3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10 and 3.14 of this Article III, which govern meetings, actions without meetings, notice and waiver of notice, quorum and voting requirements of the Board of Directors, apply to committees and their members. ss. 3.16. Independent Director Stock Ownership Requirement Each non-employee director of the Corporation is required to beneficially own (as defined under Rule 13d-3 of the Securities Exchange Act of 1934) such number of shares of the Corporation's common stock having a value at least equal to three times the annual retainer fee paid from time to time by the Corporation to such non-employee director. Each non-employee director shall have five years to comply with this Section 3.16 from the later of (i) the date of such director's first election or appointment to the Board of Directors or (ii) the date of adoption of this Section 3.16 (February 16, 1999). The value of the Corporation's common stock for purposes of this Section 3.16 shall be determined by the Board of Directors in its discretion. ARTICLE IV. OFFICERS ss. 4.01. Number. The Corporation's principal officers shall be a Chairperson, Chief Executive Officer, a Chief Financial Officer, a President, a Vice President, a General Counsel, a Secretary, and a Treasurer, each of whom shall be appointed by the Board of Directors. Additional officers and assistant officers, including any Vice Presidents, may be appointed by the Board of Directors as the Board deems appropriate. If there is more than one Vice President, the Board may establish designations for the Vice Presidencies to identify their functions or their order. There may, in addition, be a chairperson or co-chairperson of the board, whenever the Board shall see fit to cause such office or offices to be filled. Any two or more offices may be held simultaneously by the same person. ss. 4.02. Appointment and Term of Office. The Corporation's officers shall be appointed for a term as determined by the Board of Directors. If no term is specified, they shall hold office until their successor shall have been duly appointed and shall have qualified or until the officer's death, resignation or removal from office in the manner hereinafter provided. 15 The designation of a specified term does not grant to the officer any contract rights, and the Board can remove the officer at any time prior to the termination of such term. ss. 4.03. Removal. Any officer or agent appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the Corporation's best interests will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Appointment of an officer or agent shall not of itself create contract rights. ss. 4.04. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or other reason shall be filled in the manner prescribed for regular appointments to the office. ss. 4.05. Powers, Authority and Duties. The Corporation's officers shall have the powers and authority conferred in the duties prescribed by the Board of Directors or the officer who appointed them in addition to and to the extent not inconsistent with those specified in other sections of this Article IV. ss. 4.06. The Chairperson of the Board. At the Board of Directors' option, it may elect a Chairperson of the Board of Directors, who shall preside at all shareholders' and directors' meetings at which he or she is present. If elected, the Chairperson of the Board shall have and exercise general supervision over the conduct of the Corporation's affairs and over its other officers, subject, however, to the board's control. The Chairperson of the Board of Directors shall from time to time report to the Board all matters within his or her knowledge that the Corporation's interests may require to be brought to the Board's notice. ss. 4.07. Chief Executive Officer. The Chief Executive Officer shall be the senior officer of the Corporation and in the recess of the Board of Directors shall have the general control and management of all the business and affairs of the Corporation. He or she shall also exercise such further powers and perform such other duties as may from time to time be conferred upon or assigned by the By-laws or the Board of Directors. He or she shall make annual reports and submit the same to the Board of directors and also to the shareholders at their annual meeting, showing the condition and the affairs of the Corporation. He or she shall from time to time make such recommendations to the Board of Directors, as he or she thinks proper, and shall bring before the Board of Directors such information as may be required, relating to the business and property of the Corporation. 16 ss. 4.08. Chief Financial Officer. The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall at all reasonable times be open to inspection by any director. The Chief Financial Officer shall deposit all money and other valuables in the name and to the credit of the Corporation with such depositaries as may be designated by the Board of Directors. He or she shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an account of all of his or her transactions as Chief Financial Officer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these By-laws. ss. 4.09. General Counsel. The General Counsel shall advise the Board of Directors and officers on legal matters except those relating to taxes. The General Counsel shall perform such additional duties as may be assigned to him by the Board of Directors, the Chairperson of the Board, or the President. ss. 4.10. The President. The President shall be the Corporation's principal executive officer and, subject to the control of the Board of Directors, shall in general supervise and control all of the Corporation's business and affairs. If a Chairperson of the Board has not been elected, or in the Chairperson's absence, the President shall, when present, preside at all meetings of the shareholders and of the Board of Directors. The President may sign, with the Secretary or any other proper officer of the Corporation authorized by the Board of Directors, certificates for shares of the Corporation and deeds, mortgages, bonds, contracts, or other instruments in the ordinary course of business or that the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by the By-laws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incidental to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. ss. 4.11. The Vice President. In the absence of the Chairperson of the Board and the President, or in the event of the President's death or inability or refusal to act as directed by the Board of Directors, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their appointment, or in the absence of any designation, then in order of their appointment) shall perform the duties of the President, and when so acting shall 17 have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or an Assistant Secretary certificates for shares of the Corporation; and shall perform such other duties as from time to time may be assigned by the President or by the Board of Directors. ss. 4.12. The Secretary. The Secretary shall: (a) keep the minutes of the meetings of the shareholders and of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these By-laws or as required by law; (e) be custodian of the corporate records and see that books, reports, statements, certificates and all other documents and records required by law are properly kept and filed; (d) keep a register of the post office address of each shareholder, which shall be furnished to the Secretary by such shareholder; (e) sign with the President, or a Vice President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the Corporation; and (g) in general perform all duties in the name and to the credit of the Corporation with such depositaries as may be designated by the Board of Directors. He or she shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an account of all of his or her transactions as Chief Financial Officer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed bust companies, or other depositories as shall be selected in accordance with the provisions of Article V of these By-laws, and (c) in general perform all of the duties incidental to the office of Treasurer and such other duties as from time to time may be assigned to him by the President or by the Board of Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. ss. 4.13. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries, when authorized by the Board of Directors, may sign with the President or a Vice President certificates for shares of the Corporation and issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Treasurers if required by the Board of Directors, shall give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors. ss. 4.14. Salaries. Officers' salaries shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the Corporation. 18 ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS ss. 5.01. Contracts. The Board of Directors may authorize any individual officer or agent or number of officers or agents to enter into any contract or to execute and deliver any instrument in the Corporation's name and on its behalf, and such authorization may be general or confined to specific instances. ss. 5.02. Loans. No loans shall be contracted on the Corporation's behalf and no indebtedness shall be incurred in its name unless authorized by or under the authority of a resolution of the Board of Directors. Such authorization may be general or confined to specific instances. ss. 5.03. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the Corporation's name, shall be signed by such officer or officers, agents or agents of the Corporation and in such manner as shall from time to time be determined by or under the authority of a resolution of the Board of Directors. ss. 5.04. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the Corporation's credit in such banks, trust companies or other depositories as may be selected by or under the authority of the Board of Directors. ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER ss. 6.01. Certificates for Shares. (a) Content Certificates representing shares of the Corporation shall at a minimum state on their face the name of the issuing corporation and that it is formed under the laws of Wisconsin; the name of the person to whom issued; and the number and class of shares and the designation of the series, if any, the certificate represents; and be in such form as determined by the Board of Directors. Such certificates shall be signed (either manually or by facsimile) by the President or a Vice President and by the Secretary or an Assistant Secretary. Each certificate for shares shall be consecutively numbered or otherwise identified. (b) Legend as to Class or Series 19 If the Corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series) must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the Corporation will furnish the shareholders this information on request in writing and without charge. (c) Shareholder List 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. (d) Transferred Shares 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 that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnification of the Corporation as the Board of Directors may prescribe. ss. 6.02. Registration of the Transfer of Shares. Registration of the transfer of shares of the Corporation shall be made only on the Corporation's stock transfer books by the holder of record thereof or by his or he legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the Corporation's books shall be deemed by the Corporation to be the owner thereof for all purposes. ss. 6.03. Restrictions on Transfer. The Board of Directors or shareholders may impose restrictions on the transfer of shares. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction. 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. ss. 6.04. Lost, Destroyed or Stolen Certificates. Where the owner claims that his certificate of shares has been lost, destroyed or wrongfully taken, a new certificate shall be issued in place thereof if the owner (a) so requests before the Corporation has notice that such shares have been acquired by a bona fide purchaser, and (b) satisfies such other reasonable requirements as may be prescribed by or 20 under the authority of the Board of Directors, including the furnishing of an indemnity bond if so required. ss. 6.05. Consideration for Shares. The Corporation's shares may be issued for such consideration as shall be fixed from time to time by the Board of Directors. The consideration to be paid for shares may be paid in whole or in part, in money, promissory notes, in other property, tangible or intangible, or in labor or services actually performed or to be 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. If the consideration to be paid for share consists, in whole or part, of a promissory note or a contract for services to be performed for the Corporation, the Board of Directors may, in its discretion, elect to hold those shares in escrow or otherwise restrict their transfer. In the event that shares are so escrowed, and the shareholder defaults under his or her obligations under the promissory note or the contract for services, as applicable, the Corporation may, in addition to any other legal or equitable remedies, cancel all or part of the escrowed shares. ss. 6.06. Acquisition of Shares. The Corporation may acquire its own shares and unless otherwise provided in the Articles of Incorporation, the shares so acquired constitute authorized but unissued shares. ss. 6.07. 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 they may deem expedient concerning the issue, transfer and registration of certificates representing shares of the Corporation. ARTICLE VII. CONFLICTS OF INTEREST POLICY The Corporation and its subsidiaries (collectively referred to herein as the "Corporation") shall not enter into any contract, loan or other transaction in which a director, officer or employee of the Corporation has a direct or indirect personal interest, other than a contract of employment between such person and the Corporation, without such director, officer or employee first fully disclosing to the Audit Committee of the Board of Directors all material terms of such interest therein and allowing the Audit Committee of the Board of Directors to specifically authorize and approve such contract, loan or transaction. Ownership of less than 5% of the capital stock of a corporation whose stock is publicly traded shall not, in and of itself, constitute a direct or indirect interest in such corporation for purposes of this Article VII. This Article VII may only be amended or deleted by a majority vote of directors 21 not otherwise employed by the Corporation and who do not have a direct or indirect personal interest in such amendment or deletion. ARTICLE VIII. FISCAL YEAR The Board of Directors shall by resolution establish the Corporation's fiscal year. ARTICLE IX. DISTRIBUTIONS The Board of Directors may from time to time authorize, and the Corporation may make distributions (including dividends on its outstanding shares) in the manner and upon the terms and conditions provided by law, the Articles of Incorporation and the resolutions of the Board of Directors. ARTICLE X. INDEMNIFICATION ss. 10.01. Mandatory Indemnification. The Corporation shall indemnify a director or officer as follows: (a) To the extent he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding, if the director or officer was a party because he or she is or was at the time of the events upon which the proceeding was based a director or officer of the Corporation. A director or officer shall exercise his or her right to indemnification under this ss. 10.01 of Article X by delivering a written demand for indemnification to the Corporation's Treasurer, or the President if the party seeking indemnification is the Treasurer. (b) In all cases not included in ss. 10.01(a) of this Article X, the Corporation shall indemnify a director or officer against liability incurred by the director or officer in a proceeding to which the director or officer was a party because he or she is or was at the time of the events upon which the proceeding was based a director or officer of the Corporation, unless liability was incurred because the director or officer breached or failed to perform a duty he or she owes to the Corporation and the breach or the failure to perform constitutes: (i) A willful failure to deal fairly with the Corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest; 22 (ii) A violation of the criminal law, unless the director or officer had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; (iii) A transaction from which the director or officer derived an improper personal benefit; or (iv) Willful misconduct. (c) Whether a director or officer of the Corporation shall be entitled to indemnification under ss. 10.01(b) shall be determined in accordance with the procedures established in ss.10.02 of this Article X. (d) Within sixty (60) days of the completion of a successful proceeding under ss. 10.01(a), or within sixty (60) days of the date of determination under ss. 10.01(b) that an officer or director is entitled to indemnification; the full amount for which such officer or director is entitled to indemnification shall be paid to him or her, to the extent not previously paid by the Corporation pursuant to Section 10.03 of these By-laws or otherwise. (e) The termination of a proceeding by judgment, order, settlement or conviction, or upon a plea of no contest or an equivalent plea, does not, by itself, create a presumption that indemnification of the director or officer is not required under this subsection. ss. 10.02. Determination of Right to Indemnification. A director or officer seeking indemnification under ss.10.01(b) of this Article X shall first make a written request to the Corporation's Treasurer, or the Corporation's President, if the person seeking indemnification is the Treasurer, for such indemnification. Determination of whether indemnification is required shall be made by one of the following means: (a) By a majority vote of a quorum of the Board of Directors consisting of directors who are not at the time parties to the same or related proceedings. If such quorum of disinterested directors cannot be obtained, by a majority vote of a committee duly appointed by the Board of Directors and consisting solely of two (2) or more directors who are not at the time parties to the same or related proceedings. Directors who are parties to the same or related proceedings may participate in the designation of members of the committee. (b) By independent legal counsel selected by a majority vote of a quorum of the Board of Directors or its committee consisting of directors who are not at the time parties to the same or related proceedings or, if such a quorum cannot be obtained, by a majority vote of the full Board of Directors, including directors who are parties to the same or related proceedings. (c) By the affirmative majority vote, or unanimous written consent, of the Corporation's shareholders. However, shares owned by or voted under the control of 23 persons who at the time of the vote or consent are parties to the same or related proceedings, whether as plaintiffs or defendants or in any other capacity, may not be voted in making the determination. (d) By a panel of three (3) arbitrators consisting of one (1) arbitrator selected by those directors entitled under subsection (b) above to select independent legal counsel, one (1) arbitrator selected by the director or officer seeking indemnification and one (1) arbitrator selected by the other two (2) arbitrators. (e) By a court of competent jurisdiction upon application by the director or officer for an initial determination of entitlement to indemnification or for review by the court of an adverse determination. Indemnification shall be ordered if the court determines that the director or officer is entitled to indemnification under ss. 10.01 of this Article X or that the director or officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances. If the director of officer is successful in obtaining indemnification by order of the court, in addition to indemnification against all other expenses and liability, the director or officer shall be reimbursed for expenses reasonably incurred in pursuing his or her request for indemnification. The director or officer of the Corporation seeking indemnification shall designate in his or her request for indemnification the method of making the indemnification determination. In connection with such determination, the director or officer shall be entitled to a rebuttable presumption that he or she is entitled to indemnification, which presumption may only be overcome by the party challenging such indemnification by clear and convincing evidence. ss. 10.03. Advance of Expenses as Incurred. The Corporation shall, upon written request by the director of officer, pay for or reimburse the reasonable expenses incurred by a director or officer who is a party to a proceeding, as those expenses are incurred, if the director of officer furnishes the Corporation a written affirmation of his or her good faith belief that he or she has not breached his or her duties to the Corporation, and the director or officer furnishes the Corporation with a written undertaking, executed personally or on his or her behalf, to repay the allowance to the extent that it is ultimately determined that the indemnification is not required. The Corporation may accept the undertaking without reference to his or her ability to repay the allowance, and the undertaking may be secured or unsecured. ss. 10.04. Denial of Indemnification. In the event that it is determined pursuant to the procedures of ss. 10.02 that an officer or director is not entitled to indemnification, the officer or director who has been denied indemnification shall have the right to choose the forum, from among the statutorily provided options, in which the resolution of his or her right to indemnification is to be resolved. 24 ss. 10.05. Insurance. The Corporation may purchase and maintain insurance on behalf of its directors and officers, or to reimburse itself, against liability asserted or incurred and expenses incurred by the director or officer or corporation in connection with a proceeding brought against the director or officer in his capacity as a director or officer or arising from his status as a director or officer, regardless of whether the Corporation is required or authorized to indemnify the individual against the same liability pursuant to the provisions hereof. ss. 10.06. Definitions. The following terms used in this Article X shall have the indicated meanings: (a) "Directors" or "officer" means an individual who (i) is or was a director or officer of the Corporation; (ii) an individual who, while a director or officer of the Corporation, is or was serving at the Corporation's request as a director, officer partner, trustee, member of any governing or decision-making committee, employee or agent of another corporation, partnership,k joint venture or other enterprise; or (iii) while a director or officer of the Corporation,m is or was serving an employee benefit plan because his or her duties to the Corporation also impose duties on, or otherwise involve services by, the person to the plan or to the participants in or beneficiaries of the plan. "Director" or "officer" includes the estate or personal representatives of a director or officer. (b) "Expenses" include all fees, costs, charges, attorneys' counsel fees and other expenses and disbursements incurred in connection with a proceeding. (c) "Liability" includes the obligation to pay a judgment, settlement, penalty, fine, assessment or forfeiture, including an excise tax assessed with respect to or on an employee benefit plan, and reasonable expenses. (d) "Party" includes an individual who was or is, or who is threatened to be made, or is at risk of becoming, a named defendant or respondent in a proceeding. (e) "Proceeding" means any threatened, pending or completed action, suit, claim, litigation, appeal, arbitration or other proceeding, whether civil, criminal, administrative or investigative, formal or informal, predicated on foreign, federal, state or local law, brought by or in the right of the Corporation or by any other person or by an governmental or administrative body. ss. 10.07. Savings Clause. To the extent any court of competent jurisdiction shall determine that the indemnification provided under this Article X shall be invalid as applied to a particular claim, issue or matter, the provisions hereof shall be deemed amended to allow and require indemnification to the maximum extent permitted by law. 25 ss. 10.08. Effective Date. This Article X shall be deemed to be a contract between the Corporation and each previous, current or future director or officer. The provisions of this Article X shall apply to all proceedings commenced after the date hereof, whether rising from any action taken or failure to act before or after such adoption. No amendment, modification or repeal of this Article X shall diminish the rights provided hereby or diminish the right to indemnification with respect to any claim, issue or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act prior to such amendment, modification or repeal. ARTICLE XI. CORPORATE SEAL The Corporation shall have no seal. ARTICLE XII. AMENDMENTS ss. 12.01. Board of Directors. Except as otherwise specified herein or in the Corporation's Amended and Restated Articles of Incorporation, the Board of Directors, from time to time, by vote of a majority of the directors then in office, may adopt, amend or repeal any and all of the Corporation's By-laws, unless the Articles of Incorporation or the Act reserve this power exclusively to the shareholders in whole or in part; or the shareholders, in adopting, amending or repealing a particular bylaw provide expressly that the Board of Directors may not amend or repeal that bylaw. ss. 12.02. Shareholders. Except as otherwise specified herein or in the Corporation's Amended and Restated Articles of Incorporation, the shareholders, from time to time, by vote of a majority of the shares entitled to vote, may adopt, amend or repeal any and all of the Corporation's By-laws. ss. 12.03. 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 which is taken or authorized by the unanimous written consent of the shareholders or Board of Directors or by the 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 it is necessary to permit the specific action so taken or authorized. 26 EX-27 4 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF SUPERIOR SERVICES, INC. AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 4,447 0 77,464 (2,391) 2,723 86,775 508,370 (170,049) 619,489 64,487 132,836 0 0 325 334,559 619,489 0 179,003 0 125,899 0 1,040 2,429 29,748 12,230 17,418 0 0 0 17,418 .54 .53
-----END PRIVACY-ENHANCED MESSAGE-----