Chapter 221

221.0705 221.0705 Definitions. In ss. 221.0705 to 221.0718:

221.0705(1) (1) “Bank” means the issuer bank or, if a corporate action giving rise to dissenters’ rights under s. 221.0706 is a merger or share exchange that has been effectuated, the surviving bank of the merger or the acquiring corporation or bank of the share exchange.

221.0705(2) (2) “Beneficial shareholder” means a person who is a beneficial owner of shares held by a nominee as the shareholder.

221.0705(3) (3) “Dissenter” means a shareholder or beneficial shareholder who is entitled to dissent from corporate action under s. 221.0706 and who exercises that right when and in the manner required by ss. 221.0709 to 221.0716.

221.0705(4) (4) “Fair value”, with respect to a dissenter’s shares, means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless the exclusion would be inequitable.

221.0705(5) (5) “Interest” means interest from the effectuation date of the corporate action until the date of payment, at a rate that is fair and equitable under all of the circumstances.

221.0705(6) (6) “Issuer bank” means a bank that is the issuer of the shares held by a dissenter before the corporate action.

221.0705 History History: 1995 a. 336.

221.0706 221.0706 Right to dissent.

221.0706(1) (1) Mandatory dissenters’ rights. A shareholder or beneficial shareholder may dissent from, and obtain payment of the fair value of his or her shares in the event of, any of the following corporate actions:

221.0706(1)(a) (a) Consummation of a plan of merger to which the issuer bank is a party.

221.0706(1)(b) (b) Consummation of a plan of share exchange if the issuer bank’s shares will be acquired, and the shareholder or the shareholder holding shares on behalf of the beneficial shareholder is entitled to vote on the plan.

221.0706(1)(c) (c) Except as provided in sub. (2), any other corporate action taken pursuant to a shareholder vote to the extent that the articles of incorporation, the bylaws or a resolution of the board of directors provides that the voting or nonvoting shareholder or beneficial shareholder may dissent and obtain payment for his or her shares.

221.0706(2) (2) Permissive dissenters’ rights. The articles of incorporation may allow a shareholder or beneficial shareholder to dissent from an amendment of the articles of incorporation and obtain payment of the fair value of his or her shares if the amendment materially and adversely affects rights in respect of a dissenter’s shares because it does any of the following:

221.0706(2)(a) (a) Alters or abolishes a preferential right of the shares.

221.0706(2)(b) (b) Creates, alters or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase, of the shares.

221.0706(2)(c) (c) Alters or abolishes a preemptive right of the holder of shares to acquire shares or other securities.

221.0706(2)(d) (d) Excludes or limits the right of the shares to vote on any matter or to cumulate votes, other than a limitation by dilution through issuance of shares or other securities with similar voting rights.

221.0706(2)(e) (e) Reduces the number of shares owned by the shareholder or beneficial shareholder to a fraction of a share if the fractional share so created is to be acquired for cash under s. 221.0506.

221.0706(3) (3) Rights of dissenter. A shareholder or beneficial shareholder entitled to dissent and obtain payment for his or her shares under ss. 221.0701 to 221.0718 may not challenge the corporate action creating his or her entitlement unless the action is unlawful or fraudulent with respect to the shareholder, beneficial shareholder or issuer bank.

221.0706 History History: 1995 a. 336.

221.0707 221.0707 Dissent by shareholders and beneficial shareholders.

221.0707(1) (1) Partial exercise of dissenters’ rights. A shareholder may assert dissenters’ rights as to fewer than all of the shares registered in his or her name only if the shareholder dissents with respect to all shares beneficially owned by any one person and notifies the bank in writing of the name and address of each person on whose behalf he or she asserts dissenters’ rights. The rights of a shareholder, who asserts dissenters’ rights under this subsection as to fewer than all of the shares registered in his or her name, are determined as if the shares as to which he or she dissents and his or her other shares were registered in the names of different shareholders.

221.0707(2) (2) Rights of beneficial shareholders. A beneficial shareholder may assert dissenters’ rights as to shares held on his or her behalf only if the beneficial shareholder does all of the following:

221.0707(2)(a) (a) Submits to the bank the shareholder’s written consent to the dissent not later than the time that the beneficial shareholder asserts dissenters’ rights.

221.0707(2)(b) (b) Submits the consent under par. (a) with respect to all shares of which he or she is the beneficial shareholder.

221.0707 History History: 1995 a. 336.

221.0708 221.0708 Notice of dissenters’ rights.

221.0708(1) (1) Action at shareholder meeting. If proposed corporate action creating dissenters’ rights under s. 221.0706 is submitted to a vote at a shareholders’ meeting, the meeting notice shall state that shareholders and beneficial shareholders are or may be entitled to assert dissenters’ rights under ss. 221.0701 to 221.0718 and shall be accompanied by a copy of those sections.

221.0708(2) (2) Action without shareholder vote. If corporate action creating dissenters’ rights under s. 221.0706 is authorized without a vote of shareholders, the bank shall notify, in writing and in accordance with s. 221.0103, all shareholders entitled to assert dissenters’ rights that the action was authorized and send them the dissenters’ notice described in s. 221.0710.

221.0708 History History: 1995 a. 336.

221.0709 221.0709 Notice of intent to demand payment.

221.0709(1) (1) Method of asserting dissenters’ rights. If proposed corporate action creating dissenters’ rights under s. 221.0706 is submitted to a vote at a shareholders’ meeting, a shareholder or beneficial shareholder who wishes to assert dissenters’ rights shall do all of the following:

221.0709(1)(a) (a) Deliver to the issuer bank before the vote is taken written notice that complies with s. 221.0103 of the shareholder’s or beneficial shareholder’s intent to demand payment for his or her shares if the proposed action is effectuated.

221.0709(1)(b) (b) Refrain from voting his or her shares in favor of the proposed action.

221.0709(2) (2) Failure to comply. A shareholder or beneficial shareholder who fails to comply with sub. (1) is not entitled to payment for his or her shares under ss. 221.0701 to 221.0718.

221.0709 History History: 1995 a. 336.

221.0710 221.0710 Dissenters’ notice.

221.0710(1) (1) When required. If a proposed corporate action creating dissenters’ rights under s. 221.0706 is authorized at a shareholders’ meeting, the bank shall deliver a written dissenters’ notice to all shareholders and beneficial shareholders who satisfied s. 221.0709 (1).

221.0710(2) (2) Timing and content of notice. The dissenters’ notice shall be sent no later than 10 days after the corporate action is authorized at a shareholders’ meeting or without a vote of shareholders, whichever is applicable, and all necessary regulatory approvals are obtained. The dissenters’ notice shall comply with s. 221.0103 and shall include or have attached all of the following:

221.0710(2)(a) (a) A statement indicating where the shareholder or beneficial shareholder must send the payment demand and where and when certificates for certificated shares must be deposited.

221.0710(2)(b) (b) For holders of uncertificated shares, an explanation of the extent to which transfer of the shares will be restricted after the payment demand is received.

221.0710(2)(c) (c) A form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action and that requires the shareholder or beneficial shareholder asserting dissenters’ rights to certify whether he or she acquired beneficial ownership of the shares before that date.

221.0710(2)(d) (d) A date by which the bank must receive the payment demand, which may not be fewer than 30 days nor more than 60 days after the date on which the dissenters’ notice is delivered.

221.0710(2)(e) (e) A copy of ss. 221.0701 to 221.0718.

221.0710 History History: 1995 a. 336.

221.0711 221.0711 Duty to demand payment.

221.0711(1) (1) Manner of demanding payment. A shareholder or beneficial shareholder who is sent a dissenters’ notice described in s. 221.0710, or a beneficial shareholder whose shares are held by a nominee who is sent a dissenters’ notice described in s. 221.0710, must demand payment in writing and certify whether he or she acquired beneficial ownership of the shares before the date specified in the dissenters’ notice under s. 221.0710 (2) (c). A shareholder or beneficial shareholder with certificated shares must also deposit his or her certificates in accordance with the terms of the notice.

221.0711(2) (2) Effect of demand on holders of certificated shares. A shareholder or beneficial shareholder with certificated shares who demands payment and deposits his or her share certificates under sub. (1) retains all other rights of a shareholder or beneficial shareholder until these rights are canceled or modified by the effectuation of the corporate action.

221.0711(3) (3) Effect of failure to demand. A shareholder or beneficial shareholder with certificated or uncertificated shares who does not demand payment by the date set in the dissenters’ notice, or a shareholder or beneficial shareholder with certificated shares who does not deposit his or her share certificates where required and by the date set in the dissenters’ notice, is not entitled to payment for his or her shares under ss. 221.0701 to 221.0718.

221.0711 History History: 1995 a. 336.

221.0712 221.0712 Restriction on uncertificated shares.

221.0712(1) (1) When transfer restrictions permitted. The issuer bank may restrict the transfer of uncertificated shares from the date that the demand for payment for those shares is received until the corporate action is effectuated or the restrictions released under s. 221.0714.

221.0712(2) (2) Effect of demand on holders of uncertificated shares. The shareholder or beneficial shareholder who asserts dissenters’ rights as to uncertificated shares retains all of the rights of a shareholder or beneficial shareholder, other than those restricted under sub. (1), until these rights are canceled or modified by the effectuation of the corporate action.

221.0712 History History: 1995 a. 336.

221.0713 221.0713 Payment.

221.0713(1) (1) When payment made. Except as provided in s. 221.0715, as soon as the corporate action is effectuated or upon receipt of a payment demand, whichever is later, the bank shall pay each shareholder or beneficial shareholder who has complied with s. 221.0711 the amount that the bank estimates to be the fair value of his or her shares, plus accrued interest.

221.0713(2) (2) Material to accompany payment. The payment shall be accompanied by all of the following:

221.0713(2)(a) (a) The bank’s latest available financial statements, including a balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, an income statement for that year, a statement of changes in shareholders’ equity for that year and the latest available interim financial statements, if any.

221.0713(2)(b) (b) A statement of the bank’s estimate of the fair value of the shares.

221.0713(2)(c) (c) An explanation of how the interest was calculated.

221.0713(2)(d) (d) A statement of the dissenter’s right to demand payment under s. 221.0716 if the dissenter is dissatisfied with the payment.

221.0713(2)(e) (e) A copy of ss. 221.0701 to 221.0718.

221.0713 History History: 1995 a. 336.

221.0714 221.0714 Failure to take action.

221.0714(1) (1) Action not taken. If an issuer bank does not effectuate the corporate action within 60 days after the date set under s. 221.0710 for demanding payment, the issuer bank shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.

221.0714(2) (2) Action taken at a later date. If, after returning deposited certificates and releasing transfer restrictions, the issuer bank effectuates the corporate action, the bank shall deliver a new dissenters’ notice under s. 221.0710 and repeat the payment demand procedure.

221.0714 History History: 1995 a. 336.

221.0715 221.0715 After-acquired shares.

221.0715(1) (1) Withholding for after-acquired shares. A bank may elect to withhold payment required by s. 221.0713 from a dissenter unless the dissenter was the beneficial owner of the shares before the date specified in the dissenters’ notice under s. 221.0710 (2) (c) as the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action.

221.0715(2) (2) Payment. To the extent that the bank elects to withhold payment under sub. (1) after effectuating the corporate action, the bank shall estimate the fair value of the shares, plus accrued interest, and shall pay this amount to each dissenter who agrees to accept it in full satisfaction of his or her demand. The bank shall send with its offer a statement of its estimate of the fair value of the shares, an explanation of how the interest was calculated, and a statement of the dissenter’s right to demand payment under s. 221.0716 if the dissenter is dissatisfied with the offer.

221.0715 History History: 1995 a. 336.

221.0716 221.0716 Procedure if dissenter is dissatisfied with payment or offer.

221.0716(1) (1) Rights of dissenter. A dissenter may, in the manner provided in sub. (2), notify the bank of the dissenter’s estimate of the fair value of his or her shares and the amount of interest due, and demand payment of his or her estimate, less any payment received under s. 221.0713, or reject the offer under s. 221.0715 and demand payment of the fair value of his or her shares and interest due, if any of the following applies:

221.0716(1)(a) (a) The dissenter believes that the amount paid under s. 221.0713 or offered under s. 221.0715 is less than the fair value of his or her shares or that the interest due is incorrectly calculated.

221.0716(1)(b) (b) The bank fails to make payment under s. 221.0715 within 60 days after the date set under s. 221.0710 for demanding payment.

221.0716(1)(c) (c) The issuer bank, having failed to effectuate the corporate action, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within 60 days after the date set under s. 221.0710 for demanding payment.

221.0716(2) (2) Waiver of rights. A dissenter waives his or her right to demand payment under this section unless the dissenter notifies the bank of his or her demand under sub. (1) in writing within 30 days after the bank makes or offers payment for his or her shares. The notice shall comply with s. 221.0103.

221.0716 History History: 1995 a. 336.

221.0717 221.0717 Court action.

221.0717(1) (1) When special proceeding required. If a demand for payment under s. 221.0716 remains unsettled, the bank shall bring a special proceeding within 60 days after receiving the payment demand under s. 221.0716 and petition the court to determine the fair value of the shares and accrued interest. If the bank does not bring the special proceeding within the 60-day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.

221.0717(2) (2) Where proceeding to be brought. The bank shall bring the special proceeding in the circuit court for the county where its principal office or, if none in this state, its registered office is located. If the bank is a foreign bank without a registered office in this state, it shall bring the special proceeding in the county in this state in which was located the registered office of the issuer bank that merged with or whose shares were acquired by the foreign bank.

221.0717(3) (3) Parties to the proceeding. The bank shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the special proceeding. Each party to the special proceeding shall be served with a copy of the petition as provided in s. 801.14.

221.0717(4) (4) Jurisdiction. The jurisdiction of the court in which the special proceeding is brought under sub. (2) is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. An appraiser has the power described in the order appointing him or her or in any amendment to the order. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.

221.0717(5) (5) Judgments. Each dissenter made a party to the special proceeding is entitled to judgment for any of the following:

221.0717(5)(a) (a) The amount, if any, by which the court finds the fair value of his or her shares, plus interest, exceeds the amount paid by the bank.

221.0717(5)(b) (b) The fair value, plus accrued interest, of his or her shares acquired on or after the date specified in the dissenters’ notice under s. 221.0710 (2) (c), for which the bank elected to withhold payment under s. 221.0715.

221.0717 History History: 1995 a. 336; 1999 a. 83.

221.0718 221.0718 Court costs and counsel fees.