221.0510 Preemptive rights.

(1) Definition. In this section, “other securities" has the meaning given in s. 221.0509 (1) (a).

(2) When preemptive rights exist. The shareholders or holders of other securities of a bank do not have a preemptive right to acquire the bank's unissued shares or other securities except to the extent provided in the articles of incorporation. If the articles of incorporation state that “the bank elects to have preemptive rights", or words of similar meaning, subs. (3) to (6) govern the preemptive rights, except to the extent that the articles of incorporation expressly provide otherwise.

(3) Conditions for exercise of preemptive rights. Except as provided in sub. (5), the shareholders or holders of other securities of the bank have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the bank's unissued shares or other securities upon the decision of the board of directors to issue the shares or other securities, subject to the following conditions:

(a) Holders of shares or other securities with general voting rights have preemptive rights with respect to shares and other securities of any class with general voting rights.

(b) Holders of shares or other securities without preferential rights to distributions or assets have preemptive rights with respect to shares and other securities of any class without preferential rights to distributions or assets, except that holders of shares or other securities without general voting rights have no preemptive rights with respect to shares or other securities of any class with general voting rights.

(4) Waiver. A shareholder or holder of other securities may waive his or her preemptive right. A written waiver is irrevocable even if it is not supported by consideration.

(5) Exemptions. There is no preemptive right with respect to any of the following:

(a) Shares or other securities issued as compensation to directors, officers or employees of the bank or its affiliates.

(b) Shares or other securities issued to satisfy conversion or option rights created to provide compensation to directors, officers or employees of the bank or its affiliates.

(c) Shares or other securities authorized in articles of incorporation that are issued within 6 months after the effective date of incorporation.

(d) Shares or other securities sold for other than money or an obligation to pay money.

(e) Treasury shares.

(6) Lapse of preemptive rights. If shares or other securities subject to preemptive rights are not acquired by shareholders or holders of other securities, the bank may issue the shares or other securities to any person for one year after being offered to shareholders or holders of other securities, at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the preemptive rights of shareholders or holders of other securities.

History: 1995 a. 336.