Chapter 180

180.1130(6) (6) “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise.

180.1130(7) (7) “Determination date” means the date on which a significant shareholder first becomes a significant shareholder.

180.1130(9) (9) “Market value” means the following:

180.1130(9)(a) (a) In the case of shares:

180.1130(9)(a)1. 1. If the shares are listed on a national securities exchange registered under the securities exchange act of 1934 or are quoted on any national market system, the highest closing sales price per share reported on the exchange or quoted on the system during the valuation period.

180.1130(9)(a)2. 2. If bids for the shares are quoted on the National Association of Securities Dealers automated quotations system, or any successor system operated by the association, the highest closing bid per share quoted on the system during the valuation period.

180.1130(9)(a)3. 3. If the shares are listed on an exchange or are quoted on a system under subd. 1. but no transactions are reported during the valuation period or if the shares are neither listed on an exchange or system under subd. 1. nor quoted on a system under subd. 2., and if at least 3 members of the National Association of Securities Dealers are market makers for the securities, the highest closing bid per share obtained from the association during the valuation period.

180.1130(9)(a)4. 4. If no report or quote is available under subd. 1., 2. or 3., the fair market value as determined in good faith by the board of directors of the resident domestic corporation.

180.1130(9)(b) (b) In the case of property other than cash or shares, the fair market value of the property on the date in question as determined in good faith by the board of directors of the corporation.

180.1130(10) (10) “Organization” means a person other than an individual.

180.1130(10m) (10m) “Resident domestic corporation” means a resident domestic corporation, as defined in s. 180.1140 (9), if that corporation has a class of voting stock that is registered or traded on a national securities exchange or that is registered under section 12 (g) of the Securities Exchange Act.

180.1130(11) (11) “Significant shareholder”, with respect to a resident domestic corporation, means a person that is the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of the outstanding voting shares of the resident domestic corporation; or is an affiliate of the resident domestic corporation and within the 2-year period immediately before the date in question was the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of the then outstanding voting shares of the resident domestic corporation. For the purpose of determining whether a person is a significant shareholder, the number of voting shares considered to be outstanding includes shares considered to be owned by the person as the beneficial owner but does not include any other voting shares which may be issuable under an agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. In this paragraph, “person” includes 2 or more individuals or persons acting as a group for the purpose of acquiring, holding or voting securities of a resident domestic corporation.

180.1130(12) (12) “Subsidiary” means a corporation of which voting shares having a majority of the votes entitled to be cast are owned, directly or indirectly, by one other corporation.

180.1130(13) (13) “Take-over offer” means the offer to acquire or the acquisition of any equity security, as defined in s. 552.01 (2), of a resident domestic corporation, pursuant to a tender offer or request or invitation for tenders, if after the acquisition thereof the offeror, as defined in s. 552.01 (3), would be directly or indirectly a beneficial owner of more than 5 percent of any class of the outstanding equity securities of the issuer. “Take-over offer” does not include an offer or acquisition of any equity security of a resident domestic corporation pursuant to:

180.1130(13)(a) (a) Brokers’ transactions effected by or through a broker-dealer in the ordinary course of its business.

180.1130(13)(b) (b) An exchange offer for securities of another issuer, if the offer is exempted from registration under ch. 551 and does not involve any public offering under the securities act of 1933.

180.1130(13)(c) (c) An offer made to not more than 10 persons in this state during any period of 12 consecutive months.

180.1130(13)(d) (d) An offer made to all the shareholders of the resident domestic corporation, if the number of its shareholders does not exceed 100 at the time of the offer.

180.1130(13)(e) (e) An offer if the acquisition of any equity security pursuant thereto, together with all other acquisitions by the offeror of securities of the same class during the preceding 12 months, would not exceed 2 percent of that class of the outstanding equity securities of the issuer.

180.1130(13)(f) (f) An offer by the resident domestic corporation to acquire its own equity securities.

180.1130(14) (14) “Valuation date” means the time when the closing price of the stock is determined on the day before the first public announcement of the proposed business combination.

180.1130(15) (15) “Valuation period” means the 30-day period preceding the date on which the market value is to be determined.

180.1130(16) (16) “Voting shares” means capital shares of a corporation entitled to vote generally in the election of directors.

180.1130 History History: 1989 a. 303; 1991 a. 16; 1993 a. 112; 1997 a. 27, 41, 252; 2005 a. 476; 2021 a. 258.

180.1131 180.1131 Shareholder vote. In addition to a vote otherwise required by law or the articles of incorporation of the resident domestic corporation, a business combination must be approved by the affirmative vote of at least all of the following, except as provided in s. 180.1132:

180.1131(1) (1) Eighty percent of the votes entitled to be cast by outstanding voting shares of the corporation, voting together as a single voting group.

180.1131(2) (2) Two-thirds of the votes entitled to be cast by holders of voting shares other than voting shares beneficially owned by a significant shareholder who is a party to the business combination or an affiliate or associate of a significant shareholder who is a party to the business combination, voting together as a single voting group.

180.1131 History History: 1989 a. 303; 1997 a. 27.

180.1132 180.1132 Exceptions.

180.1132(1) (1) Fair price. The vote required by s. 180.1131 does not apply to a business combination if each of the following conditions is met:

180.1132(1)(a) (a) The aggregate amount of the cash and the market value as of the valuation date of consideration other than cash to be received per share by shareholders of the resident domestic corporation in the business combination is at least equal to the highest of the following:

180.1132(1)(a)1. 1. The highest per share price, including brokerage commissions, transfer taxes and soliciting dealers’ fees, received by any person selling common shares of the same class or series, with appropriate adjustments for recapitalizations and for share splits, share dividends and like distributions, from the significant shareholder either in the transaction in which it became a significant shareholder or within the 2 years before the date of the business combination, whichever is higher.

180.1132(1)(a)2. 2. The market value per share of the same class or series on the date of commencement of a tender offer initiated by the significant shareholder, on the determination date or on the date of the first public announcement of the proposed business combination, whichever is highest.

180.1132(1)(a)3. 3. The highest preferential amount per share to which the holder of shares of the class or series of shares is entitled in a voluntary or involuntary liquidation or dissolution of the corporation, with appropriate adjustments for recapitalizations and for share splits, share dividends and like distributions.

180.1132(1)(b) (b) The consideration to be received by holders of a class or series of outstanding shares is to be in cash or in the same form as the significant shareholder has previously paid for shares of the same class or series. If the significant shareholder has paid for shares of a class of shares with varying forms of consideration, the form of consideration for the class of shares shall be either cash or the form used to acquire the largest number of shares of the class or series of shares previously acquired by it.

180.1132(2) (2) Certain corporations excluded. Section 180.1131 does not apply to a business combination of any of the following:

180.1132(2)(a) (a) A corporation if a business combination involving the corporation is governed by s. 186.31, 215.53, 215.73, 221.0702 or 223.21.

180.1132(2)(b) (b) A corporation whose original articles of incorporation have a provision expressly electing not to be governed by ss. 180.1130 to 180.1134.

180.1132(2)(c) (c) A resident domestic corporation whose shareholders adopt an amendment to the articles of incorporation on or after April 24, 1984, by a vote of at least 80 percent of the votes entitled to be cast by outstanding shares of voting shares of the resident domestic corporation, voting together as a single voting group and by two-thirds of the votes entitled to be cast by persons, if any, who are not significant shareholders of the resident domestic corporation, voting together as a single voting group, expressly electing not to be governed by ss. 180.1130 to 180.1134.

180.1132(3) (3) Opt-in for certain corporations. A corporation that is not a resident domestic corporation may elect, by express provision in its articles of incorporation, to be subject to ss. 180.1130 to 180.1134 as if it were a resident domestic corporation unless its articles of incorporation contain a provision stating that the corporation is a close corporation under ss. 180.1801 to 180.1837.

180.1132 History History: 1989 a. 303; 1991 a. 16; 1995 a. 336; 1997 a. 27.

180.1133 180.1133 Other requirements for greater votes. A business combination of a corporation that has a provision of the articles of incorporation permitted by s. 180.0727 is subject to s. 180.1131 unless one of the exemptions of s. 180.1132 has been met.

180.1133 History History: 1989 a. 303.

180.1134 180.1134 Actions during take-over offer. In addition to a vote otherwise required by law or the articles of incorporation of the resident domestic corporation, approval by vote of holders of a majority of the shares of the resident domestic corporation entitled to vote on the proposal is required at a shareholders’ meeting held in conformance with ss. 180.0705 and 180.0725 before any of the following actions may be taken by the officers or board of directors of the resident domestic corporation, while a take-over offer is being made, or after a take-over offer has been publicly announced and before it is concluded, for the resident domestic corporation’s voting shares:

180.1134(1) (1) Acquiring more than 5 percent of the resident domestic corporation’s voting shares at a price above the market value from any individual who or organization which holds more than 3 percent of the voting shares and has held the shares for less than 2 years, unless the resident domestic corporation makes at least an equal offer to acquire all voting shares and all securities which may be converted into voting shares.

180.1134(2) (2) Selling or optioning assets of the resident domestic corporation which amount to at least 10 percent of the market value of the resident domestic corporation. This subsection does not apply to a resident domestic corporation if all of the following are satisfied:

180.1134(2)(a) (a) The resident domestic corporation has at least 3 directors who are not either officers or employees of the resident domestic corporation.

180.1134(2)(b) (b) A majority of the directors who are not either officers or employees of the resident domestic corporation vote to not be governed by this subsection.

180.1134 History History: 1989 a. 303; 1991 a. 16, 32; 1997 a. 27.

180.1140 180.1140 Definitions applicable to business combination provisions. In ss. 180.1140 to 180.1144:

180.1140(1) (1) “Announcement date” means the date of the first public announcement of the final, definitive proposal for a business combination.

180.1140(2) (2) “Associate” of a person means any of the following:

180.1140(2)(a) (a) A corporation or organization of which the person is an officer, director, manager or partner or is the beneficial owner of at least 10 percent of any class of voting stock.

180.1140(2)(b) (b) A trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity.

180.1140(2)(c) (c) A relative or spouse of the person, or a relative of the spouse, who has the same principal residence as the person.

180.1140(3) (3) 

180.1140(3)(a) (a) “Beneficial owner” of stock means a person, except as provided in par. (b), that meets any of the following conditions:

180.1140(3)(a)1. 1. Individually, or with or through any of the person’s affiliates or associates, beneficially owns the stock, directly or indirectly.

180.1140(3)(a)2. 2. Individually, or with or through any of the person’s affiliates or associates, directly or indirectly has the right, whether exercisable immediately or only after the passage of time, to acquire the stock pursuant to a written or unwritten agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise.

180.1140(3)(a)3. 3. Individually, or with or through any of the person’s affiliates or associates, directly or indirectly has the right to vote the stock pursuant to a written or unwritten agreement, arrangement or understanding, except that a person is not the beneficial owner of stock under this subdivision if the agreement, arrangement or understanding to vote that stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made in accordance with the applicable regulations under the exchange act and is not reportable under the report required under 17 CFR 240.13d-1 (1) (a) or a comparable or successor report.

180.1140(3)(a)4. 4. Has a written or unwritten agreement, arrangement or understanding with another person that is directly or indirectly a beneficial owner, or whose affiliates or associates are direct or indirect beneficial owners, of the stock, if the agreement, arrangement or understanding is for the purpose of acquiring, holding, disposing of or voting the stock, unless the voting is pursuant to a revocable proxy or consent described in subd. 3.

180.1140(3)(b) (b) A person is not the direct or indirect beneficial owner of stock tendered pursuant to a tender or exchange offer which is made by that person or an affiliate or associate of that person until the tendered stock is accepted for purchase or exchange.

180.1140(4) (4) “Business combination” means any of the following:

180.1140(4)(a) (a) A merger, including a merger under s. 180.1104, or interest exchange of the resident domestic corporation or any subsidiary of the resident domestic corporation with any of the following:

180.1140(4)(a)1. 1. An interested stockholder.

180.1140(4)(a)2. 2. A corporation, whether or not it is an interested stockholder, which is, or after a merger or interest exchange would be, an affiliate or associate of an interested stockholder.

180.1140(4)(b) (b) A sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, to or with an interested stockholder or an affiliate or associate of an interested stockholder of assets of the resident domestic corporation or a subsidiary of the resident domestic corporation if those assets meet any of the following conditions:

180.1140(4)(b)1. 1. Have an aggregate market value equal to at least 5 percent of the aggregate market value of all the assets, determined on a consolidated basis, of the resident domestic corporation.

180.1140(4)(b)2. 2. Have an aggregate market value equal to at least 5 percent of the aggregate market value of all the outstanding stock of the resident domestic corporation.

180.1140(4)(b)3. 3. Represent at least 10 percent of the earning power or income, determined on a consolidated basis, of the resident domestic corporation.

180.1140(4)(c) (c) The issuance or transfer by the resident domestic corporation or a subsidiary of the resident domestic corporation, in one transaction or a series of transactions, of any stock of the resident domestic corporation or a subsidiary of the resident domestic corporation if all of the following conditions are satisfied:

180.1140(4)(c)1. 1. The stock has an aggregate market value equal to at least 5 percent of the aggregate market value of all the outstanding stock of the resident domestic corporation.

180.1140(4)(c)2. 2. The stock is issued or transferred to an interested stockholder or an affiliate or associate of an interested stockholder, except for stock of the resident domestic corporation or such subsidiary issued or transferred pursuant to the exercise of warrants, rights or options to purchase such stock offered, or a dividend paid, or distribution made, proportionately to all stockholders of the resident domestic corporation.

180.1140(4)(d) (d) The adoption of a plan or proposal for the liquidation or dissolution of the resident domestic corporation which is proposed by, on behalf of, or pursuant to a written or unwritten agreement, arrangement or understanding with, an interested stockholder or an affiliate or associate of an interested stockholder.

180.1140(4)(e) (e) Any of the following, if the direct or indirect effect is to increase the proportionate share of the outstanding stock of a class or series or securities convertible into voting stock of the resident domestic corporation or a subsidiary of the resident domestic corporation beneficially owned by the interested stockholder or an affiliate or associate of the interested stockholder, unless the increase is the result of immaterial changes due to fractional share adjustments:

180.1140(4)(e)1. 1. A reclassification of securities, including, without limitation, a stock split, stock dividend or other distribution of stock in respect of stock, or reverse stock split.

180.1140(4)(e)2. 2. A recapitalization of the resident domestic corporation.

180.1140(4)(e)3. 3. A merger or interest exchange of the resident domestic corporation with a subsidiary of the resident domestic corporation.

180.1140(4)(e)4. 4. Any other transaction, whether or not with, into or involving the interested stockholder, which is proposed by, on behalf of, or pursuant to a written or unwritten agreement, arrangement or understanding with, the interested stockholder or an affiliate or associate of the interested stockholder.

180.1140(4)(f) (f) Receipt by an interested stockholder or an affiliate or associate of an interested stockholder of the direct or indirect benefit of a loan, advance, guarantee, pledge or other financial assistance or a tax credit or other tax advantage provided by or through the resident domestic corporation or any subsidiary of the resident domestic corporation, unless the interested stockholder receives the benefit proportionately as a holder of stock of the resident domestic corporation.

180.1140(5) (5) “Consummation date” means the date of consummation of a business combination.

180.1140(6) (6) 

180.1140(6)(a) (a) “Control”, “controlled by” or “under common control with” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, except as provided in par. (b), by contract, or otherwise.

180.1140(6)(b) (b) “Control” of a corporation is not established under par. (a) if a person, in good faith and not for the purpose of circumventing ss. 180.1140 to 180.1144, holds voting power as an agent, bank, broker, nominee, custodian or trustee for one or more beneficial owners who do not individually or as a group have control of that corporation.

180.1140(7) (7) “Exchange act” means the securities exchange act of 1934 and amendments thereto.

180.1140(8) (8) 

180.1140(8)(a) (a) “Interested stockholder”, with respect to a resident domestic corporation, means a person other than the resident domestic corporation or a subsidiary of the resident domestic corporation that meets any of the following conditions:

180.1140(8)(a)1. 1. Is the beneficial owner of at least 10 percent of the voting power of the outstanding voting stock of that resident domestic corporation.

180.1140(8)(a)2. 2. Is an affiliate or associate of that resident domestic corporation and at any time within 3 years immediately before the date in question was the beneficial owner of at least 10 percent of the voting power of the then outstanding voting stock of that resident domestic corporation.