DFI-SB 22.07(1)(c)5.5. The existence of a trading market in, or methods of later resale or repurchase, of the stock to be issued under the plan. DFI-SB 22.07(1)(c)6.6. Any benefits provided to the savings bank through employee or director incentive aspects of the plan. DFI-SB 22.07(1)(c)7.7. The impact, if any, of the participation or non- participation in the offering by members of the mutual holding company parent of the savings bank or other shareholders. DFI-SB 22.07(2)(2) Pricing of stock. Each application for approval of a proposed stock issuance shall state and explain the proposed sales price or price range if it is not possible to specify the exact price at the time. Those materials shall: DFI-SB 22.07(2)(a)(a) Support the reasonableness of the proposed price or price range and demonstrate to the satisfaction of the division that it was prepared by independent persons who are experienced and expert in corporate valuations. A person does not lack independence merely because he or she will participate in effecting a sale of the stock under the plan or will receive a fee for services rendered in connection with preparation of the pricing materials. DFI-SB 22.07(2)(b)(b) Contain a brief summary of data sufficient to support its conclusions. DFI-SB 22.07(2)(c)(c) If the proposed price or price range is based upon a capitalization of the projected income of the savings bank after the issuance of the stock, indicate the basis for determination of the income to be derived from the proceeds of the stock sale, demonstrate the appropriateness of the earnings multiple used and include all assumptions regarding future earnings growth. If the proposed price or price range is based upon a comparison of the stock of the savings bank with the issued and outstanding stock of other stock savings banks or similar institutions, those institutions shall be reasonably comparable to the savings bank in terms of size, asset composition, market area, competitive conditions, profit history, expected future earnings, and other stated relevant factors. DFI-SB 22.07(2)(d)(d) If the proposed price or price range includes any discount due to the minority status of the stock to be offered, state the amount of the discount and explain how that discount was determined. DFI-SB 22.07(2)(e)(e) Any additional information about the pricing which the division may request. DFI-SB 22.07(3)(a)(a) No representation may be made regarding the offer or sale of any stock issued under this section that the price or price range has been approved or disapproved by the division or that the division has endorsed the accuracy or adequacy of any offering or sales document disseminated. DFI-SB 22.07(3)(b)(b) In connection with the offer, sale or purchase of stock, no person may: DFI-SB 22.07(3)(b)2.2. Make any untrue statement of a material fact or omit to state a material fact necessary to make the statements made not misleading, in light of the circumstances. DFI-SB 22.07(3)(b)3.3. Engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon a purchaser or seller. DFI-SB 22.07(4)(a)(a) Describe all significant terms of the proposed stock issuance and shall attach a copy of each proposed stock certificate form, any proposed stock order form and any agreement or other document defining or limiting the rights of stockholders. DFI-SB 22.07(4)(b)1.1. The aggregate outstanding voting common stock owned or controlled by persons other than the mutual holding company at the close of the issuance shall be less than 50% of the total number of shares of outstanding voting common stock. This provision may be omitted if the issuance will be conducted by a savings bank that was in the stock form when acquired by its mutual holding company parent if the savings bank is not a resulting savings bank or an acquiree savings bank. Any stock which has no present or contingent voting rights may be issued by a savings bank subsidiary of a mutual holding company to persons other than the savings bank’s mutual holding company, consistent with applicable law. DFI-SB 22.07(4)(b)2.2. After the stock issuance, the savings bank shall comply with all applicable federal and state securities registration requirements. DFI-SB 22.07(4)(b)3.3. The savings bank shall not offer or sell any stock to any person, other than a stock benefit plan of the savings bank, the savings bank’s parent or any of its affiliates, whose purchase would be financed by funds loaned to the person by the savings bank or any of its affiliates. DFI-SB 22.07(4)(b)4.4. If necessary, the savings bank’s articles of incorporation shall be amended to authorize the stock issuance. DFI-SB 22.07(4)(b)5.5. The expenses incurred in connection with the issuance shall be reasonable and specified in the plan. DFI-SB 22.07(4)(b)6.6. If proposed as part of a reorganization plan, the plan may be amended or terminated in the same manner as the reorganization plan under s. DFI-SB 22.06. DFI-SB 22.07(4)(b)7.7. The plan will be terminated if not completed within a time specified in the plan unless an extension is requested in writing for good cause shown and approved in writing by the division. DFI-SB 22.07(5)(5) Optional provisions. A stock issuance plan may provide that: DFI-SB 22.07(5)(a)(a) If the stock issuance is part of a reorganization plan, the offering may be commenced concurrently with or after the mailing of any proxy statements to the members of the reorganizing savings bank and any acquiree savings bank. The offering may be concluded prior to the required membership votes if the offer and sale of the stock is conditioned upon the approval of the reorganization plan and issuance plan by the members of the reorganizing savings bank and any acquiree savings bank. DFI-SB 22.07(5)(b)(b) Any stock not sold in the offering may be sold in any other manner provided in the stock issuance plan that is approved by the division in writing. DFI-SB 22.07(5)(c)(c) In lieu of shares of stock, the savings bank may issue and sell units of securities consisting of stock and long-term warrants or other equity securities, in which event any reference in this section to stock shall apply to units of equity securities unless the context otherwise specifies or requires. DFI-SB 22.07(5)(d)(d) Purchases of stock by persons or entities acting in concert, or by associates, may not exceed a limit established under the terms of the stock issuance plan. DFI-SB 22.07 NoteNote: This section interprets or implements s. 214.095, Stats. DFI-SB 22.07 HistoryHistory: Cr. Register, February, 1994, No. 458, eff. 3-1-94; correction in (4) (b) 6. made under s. 13.93 (2m) (b) 7., Stats., Register January 2006 No. 601. DFI-SB 22.08DFI-SB 22.08 Issuance or sale of stock by savings bank subsidiaries of mutual holding companies. DFI-SB 22.08(1)(1) Authorized shares; mandatory features. The articles of incorporation of a stock savings bank subsidiary of a mutual holding company shall: DFI-SB 22.08(1)(a)(a) Prescribe the classes of shares and the number of shares of each class that the savings bank is authorized to issue. If more than one class of shares is authorized, the articles of incorporation shall prescribe a distinguishing designation for each class. Before the issuance of shares of a class, the savings bank’s articles of incorporation shall describe the preferences, limitations and relative rights of that class. All shares of a class shall have preferences, limitations and relative rights identical with those of other shares of the same class unless the class is divided into series. DFI-SB 22.08(1)(b)2.2. One or more classes of shares, which may be the same class or classes as those with voting rights under subd. 1., that together are entitled to receive the net assets of the savings bank upon dissolution. DFI-SB 22.08(1m)(1m) Authorized sharer; Optional features. The articles of incorporation of a stock savings bank subsidiary of a mutual holding company may: DFI-SB 22.08(1m)(a)(a) Create one or more series within a class of shares. Before the issuance of shares of a series, the savings bank’s articles of incorporation shall describe the number of shares of each series that the savings bank is authorized to issue, a distinguishing designation for each series within a class and the preferences, limitations and relative rights of that series. All shares of a series shall have preferences, limitations and relative rights of that series. All shares of a series shall have preferences, limitations and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, with those of other series of the same class. DFI-SB 22.08(1m)(b)(b) Authorize one or more classes of shares that have designations, preferences, limitations and relative rights that may include: DFI-SB 22.08(1m)(b)1.1. Special, conditional or limited voting rights, or no right to vote, unless prohibited by this chapter. DFI-SB 22.08(1m)(b)2.2. Provisions for the redemption or conversion of the shares under any of the following terms specified by the articles of incorporation: DFI-SB 22.08(1m)(b)2.a.a. At the option of the savings bank, the shareholder or another person, or upon the occurrence of a designated event. DFI-SB 22.08(1m)(b)2.c.c. In a designated amount or in an amount determined under a designated formula or by reference to extrinsic data or events. DFI-SB 22.08(1m)(b)3.3. Provisions entitling the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative or partially cumulative. DFI-SB 22.08(1m)(b)4.4. Preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the savings bank. DFI-SB 22.08(2)(2) Terms of class or series determined by board of directors. DFI-SB 22.08(2)(a)(a) Within the limits of subs. (1) and (1m) and as provided in the articles of incorporation, the board of directors may: DFI-SB 22.08(2)(a)1.1. Determine the preferences, limitations and relative rights, in whole or in part, before the issuance of any shares of that class of shares. DFI-SB 22.08(2)(a)2.2. Create one or more series within a class and, with respect to any series, determine the number of shares of the series, the distinguishing designation and the preferences, limitations and relative rights, in whole or in part, before the issuance of any shares of that series. DFI-SB 22.08(2)(b)(b) Before issuing any shares of a class or series under par. (a), the savings bank shall file with the division an amendment to its articles of incorporation that includes all of the following: DFI-SB 22.08(2)(b)2.2. The text of the amendment determining the terms of the class or series of shares. DFI-SB 22.08(2)(b)6.6. A statement that the amendment was adopted by the board of directors and the shareholders of the savings bank. DFI-SB 22.08(2)(c)(c) After the amendment is filed under par. (b) and before the savings bank issues any shares of the class or series that is the subject of the amendment, the board of directors may alter or revoke any preferences, limitations or relative rights described in the amendment by adopting another resolution appropriate for that purpose. The savings bank shall file with the division the revised amendment that complies with par. (b). A preference, limitation or relative right may not be altered or revoked after the issuance of any shares of the class or series that are subject to the preference, limitation or relative right, except by amendment of the articles of incorporation. DFI-SB 22.08(3)(a)(a) A savings bank may issue the number of shares of each class or series authorized by its articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted or canceled. DFI-SB 22.08(3)(b)(b) When shares of the savings bank are outstanding, there must be outstanding one or more shares that together have unlimited voting rights and one or more shares, which may be the same as those with unlimited voting rights, that together are entitled to receive the net assets of the savings bank upon dissolution. DFI-SB 22.08(4)(a)1.1. Issue fractions of a share or pay in money the value of fractions of a share. DFI-SB 22.08(4)(a)3.3. Issue scrip in registered or bearer form entitling the holder to receive a full share on the surrender of enough scrip to equal a full share. DFI-SB 22.08(4)(b)(b) A certificate representing scrip shall be conspicuously labeled “scrip” and shall contain the terms of exchange for a full share and the information required by sub. (9), except that it may state that it is issued to bearer. DFI-SB 22.08(4)(c)(c) The holder of a fractional share may exercise the rights of a shareholder including the right to vote, to receive dividends and to participate in the assets of the savings bank upon liquidation. The holder of scrip is not entitled to the rights described in this subsection unless the scrip provides for them. DFI-SB 22.08(4)(d)(d) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including: DFI-SB 22.08(4)(d)1.1. The scrip will become void unless exchanged for full shares before a specified date. DFI-SB 22.08(4)(d)2.2. The shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders. DFI-SB 22.08(5)(a)(a) The powers granted to the board of directors in pars. (b) to (e) may be reserved to the shareholders by the articles of incorporation. DFI-SB 22.08(5)(b)(b) The board of directors may authorize issuance of shares for consideration consisting of any tangible or intangible property or benefit to the savings bank, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the savings bank. DFI-SB 22.08(5)(c)(c) Before the savings bank issues shares, the board of directors shall determine that the consideration received or to be received for the shares to be issued is adequate. The board of directors’ determination is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid and nonassessable. DFI-SB 22.08(5)(d)(d) When the savings bank receives the consideration for which the board of directors authorized the issuance of shares, the shares issued for that consideration are fully paid and nonassessable. DFI-SB 22.08(5)(e)(e) The savings bank may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the benefits are received or the note is paid. If the services are not performed, the benefits are not received or the note is not paid, the corporation may cancel, in whole or in part, the shares escrowed or restricted and the distributions credited. DFI-SB 22.08(6)(a)(a) A purchaser from a savings bank of the savings bank shares is not liable to the savings bank or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued. DFI-SB 22.08(6)(b)(b) Unless otherwise provided in the articles of incorporation, a shareholder of a savings bank is not personally liable for the acts or debts of the savings bank, except that a shareholder may become personally liable by his or her acts or conduct other than as a shareholder. DFI-SB 22.08(7)(a)(a) In this section, “share dividend” means shares issued proportionally and without consideration to the savings bank’s shareholders or to the shareholders of one or more classes or series. DFI-SB 22.08(7)(b)(b) Except as provided by ch. 214, Stats., in par. (c) or the articles of incorporation a savings bank may issue share dividends. DFI-SB 22.08(7)(c)1.1. A savings bank may not issue shares of one class or series as a share dividend in respect of shares of another class or series unless: the articles of incorporation authorize the issuance; a majority of the votes entitled to be cast by the class or series to be issued approve the issuance; or there are no outstanding shares of the class or series to be issued, as determined under subd. 2.
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