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. DFI-SB 22.08(7)(c)2.2. For purposes of this paragraph, if a security is outstanding that is convertible into or carries a right to subscribe for or acquire shares of the class or series to be issued, the holder of the security is considered a holder of the class or series to be issued. DFI-SB 22.08(7)(d)(d) If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date on which the board of directors authorizes the share dividend. DFI-SB 22.08(8)(8) Share rights, options and warrants. Unless the articles of incorporation provide otherwise before the issuance of rights, options or warrants, a savings bank may issue rights, options or warrants for the purchase of shares of the savings bank. The rights, options or warrants may contain provisions that adjust the rights, options or warrants in the event of an acquisition of shares or a reorganization, merger, share exchange, sale of assets or other occurrence. Subject to the articles of incorporation, the board of directors shall determine the terms on which the rights, options or warrants are issued, their form and content, and the consideration for which the shares are to be issued. Notwithstanding any other provision of this section, and unless otherwise provided in the articles of incorporation before issuance of the rights, options or warrants, a savings bank may issue rights, options or warrants that include conditions that prevent the holder of a specified percentage of the outstanding shares of the savings bank, including subsequent transferees of the holder, from exercising those rights, options or warrants. DFI-SB 22.08(9)(a)1.1. The name of the issuer and that the issuer is organized under the laws of this state; DFI-SB 22.08(9)(a)3.3. The number and class of shares and the designation of the series, if any, that the certificate represents. DFI-SB 22.08(9)(b)(b) If the issuing savings bank is authorized to issue different classes of shares or different series within a class, each certificate shall contain: DFI-SB 22.08(9)(b)1.1. A summary of 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; or DFI-SB 22.08(9)(b)2.2. A conspicuous statement that the savings bank will furnish the shareholder the information described in par. (a) on request, in writing and without charge. DFI-SB 22.08(9)(c)(c) Each share certificate shall be signed either manually or in facsimile, by the officer or officers designated in the bylaws or by the board of directors. The validity of a share certificate is not affected if a person who signed the certificate no longer holds office when the certificate is issued. DFI-SB 22.08(10)(a)(a) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a savings bank may authorize the issuance of any shares of any of its classes or series without certificates. The authorization does not affect shares already represented by certificates until the certificates are surrendered to the savings bank. DFI-SB 22.08(10)(b)(b) Within a reasonable time after the issuance or transfer of shares without certificates, the savings bank shall send the shareholder a written statement of the information required on share certificates by sub. (9) (a) and (b) and, if applicable, sub. (11). DFI-SB 22.08(10)(c)(c) Unless the articles of incorporation or bylaws expressly provide otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates. DFI-SB 22.08(11)(a)1.1. “Other securities” include securities that are convertible into or carry a right to subscribe for or acquire shares. DFI-SB 22.08(11)(a)2.2. “Transfer restriction” means a restriction on the transfer or registration of transfer of shares and other securities of a savings bank. DFI-SB 22.08(11)(b)1.1. Except as provided in subd. 2., the articles of incorporation, bylaws, an agreement among shareholders and holders of other securities, or an agreement between shareholders and holders of other securities and the savings bank may impose a transfer restriction on shares and other securities of the savings bank for any reasonable purpose, including: DFI-SB 22.08(11)(b)1.a.a. Maintaining the savings bank’s status when it is dependent on the number or identity of its shareholders. DFI-SB 22.08(11)(b)2.2. A transfer restriction may not affect shares and other securities issued before the restriction is adopted unless the holders of the shares and other securities are parties to the transfer restriction agreement or vote in favor of the transfer restriction. DFI-SB 22.08(11)(c)(c) A transfer restriction is valid and enforceable against the holder or a transferee of the holder if the transfer restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by sub. (10) (b). Unless so noted, a transfer restriction is not enforceable against a person who does not know of the transfer restriction. DFI-SB 22.08(11)(d)(d) The transfer restrictions permitted under this section include transfer restrictions that: DFI-SB 22.08(11)(d)1.1. Obligate the shareholder or holder of other securities first to offer the savings bank or other persons, whether separately, consecutively or simultaneously, an opportunity to acquire the restricted shares or other securities. DFI-SB 22.08(11)(d)2.2. Obligate the savings bank or other persons, whether separately, consecutively or simultaneously, to acquire the restricted shares or other securities. DFI-SB 22.08(11)(d)3.3. Require the savings bank, the holders of any class of its shares or other securities or another person to approve the transfer of the restricted shares or other securities, if the requirement is not manifestly unreasonable. DFI-SB 22.08(11)(d)4.4. Prohibit the transfer of restricted shares or other securities to designated persons or classes of persons, if the prohibition is not manifestly unreasonable. DFI-SB 22.08(12)(12) Expense of issuing shares. A savings bank may pay the expense of selling or underwriting its shares, and of organizing or reorganizing the savings bank from the consideration received for shares.
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