SB494,100,22 19221.0621 Duties of officers. Each officer has the authority and shall perform
20the duties set forth in the bylaws or, to the extent not inconsistent with the bylaws,
21the duties prescribed by the board of directors or by direction of an officer authorized
22by the bylaws or by the board of directors to prescribe the duties of other officers.
SB494,101,4 23221.0622 Resignation and removal of officers. (1) Resignation. An officer
24may resign at any time by delivering to the bank notice that complies with s.
25221.0103. The resignation is effective when the notice is delivered, unless the notice

1specifies a later effective date and the bank accepts the later effective date. If a
2resignation is effective at a later date, the bank's board of directors may fill the
3pending vacancy before the effective date, if the board of directors provides that the
4successor may not take office until the effective date.
SB494,101,9 5(2) Removal. The board of directors may remove an officer and, unless
6restricted by the bylaws or by the board of directors, an officer may remove an officer
7or assistant officer appointed by that officer under s. 221.0620 (2), at any time, with
8or without cause and notwithstanding the contract rights, if any, of the officer
9removed.
SB494,101,11 10221.0623 Contract rights of officers. (1) Effect of appointment. The
11appointment of an officer does not itself create contract rights.
SB494,101,14 12(2) Effect of resignation or removal. Except as provided in s. 221.0622 (2),
13an officer's resignation or removal is subject to any remedies provided by any
14contract between the officer and the bank or otherwise provided by law.
SB494,101,17 15221.0624 Signature of officers. Each document required by this chapter to
16be signed by an officer or officers of the bank shall be signed by the officer or officers
17designated in the bylaws or by the board of directors.
SB494,102,3 18221.0625 Loans to bank officials; penalty. (1) Loans to officers and
19directors.
Except as otherwise provided in this subsection, a bank may not lend to
20any officer or director of the bank an amount that, when aggregated with the amount
21of all other extensions of credit to that person exceeds the higher of $25,000 or 5%
22of the bank's capital, without prior approval of the bank's board of directors. Prior
23approval of the bank's board of directors is also required in all cases when a loan
24aggregated with all other extensions of credit to the officer or director exceeds
25$500,000. A bank's board of directors may give prior approval to a line of credit to

1an officer or director, and prior approval by the bank's board of directors is not
2required for each advance made to the officer or director pursuant to the preapproved
3line of credit.
SB494,102,6 4(2) Penalty. An officer or director of a bank who, in violation of this section,
5directly or indirectly does any of the following may be imprisoned for not more than
610 years:
SB494,102,87 (a) Borrows or otherwise procures for personal use money, funds or property
8of the bank.
SB494,102,109 (b) Procures money, funds or property of the bank through use of personal credit
10or accommodation of another person.
SB494,102,1311 (c) Procures money, funds or property of the bank by acceptance for discount
12at the bank of any note, bond or evidence of debt that he or she knows or has reason
13to know is worth less than the price at which it is accepted as an asset.
SB494,102,15 14221.0626 Definitions applicable to indemnification and insurance
15provisions.
In ss. 221.0626 to 221.0635:
SB494,102,16 16(1) "Director or officer" means any of the following:
SB494,102,1717 (a) An individual who is or was a director or officer of a bank.
SB494,102,2218 (b) An individual who, while a director or officer of a bank, is or was serving at
19the bank's request as a director, officer, partner, trustee, member of any governing
20or decision-making committee, manager, employe or agent of another bank,
21corporation, limited liability company, partnership, joint venture, trust or other
22enterprise.
SB494,103,223 (c) An individual who, while a director or officer of a bank, is or was serving an
24employe benefit plan because his or her duties to the bank also impose duties on, or

1otherwise involve services by, the person to the plan or to participants in or
2beneficiaries of the plan.
SB494,103,43 (d) Unless the context requires otherwise, the estate or personal representative
4of a director or officer of a bank.
SB494,103,6 5(2) "Expenses" include fees, costs, charges, disbursements, attorney fees and
6any other expenses incurred in connection with a proceeding.
SB494,103,9 7(3) "Liability" includes the obligation to pay a judgment, settlement, penalty,
8assessment, forfeiture or fine, including an excise tax assessed with respect to an
9employe benefit plan, and reasonable expenses.
SB494,103,11 10(4) "Party" includes an individual who was or is, or who is threatened to be
11made, a named defendant or respondent in a proceeding.
SB494,103,15 12(5) "Proceeding" means any threatened, pending or completed civil, criminal,
13administrative or investigative action, suit, arbitration or other proceeding, whether
14formal or informal, which involves foreign, federal, state or local law and which is
15brought by or in the right of the bank or by any other person.
SB494,103,20 16221.0627 Mandatory indemnification. (1) When successful in defense
17of a proceeding.
A bank shall indemnify a director or officer, to the extent that he
18or she has been successful on the merits or otherwise in the defense of a proceeding,
19for all reasonable expenses incurred in the proceeding if the director or officer was
20a party because he or she is a director or officer.
SB494,104,2 21(2) When unsuccessful in defense of a proceeding. (a) In cases not included
22under sub. (1), a bank shall indemnify a director or officer against liability incurred
23by the director or officer in a proceeding to which the director or officer was a party
24because he or she is a director or officer, unless liability was incurred because the

1director or officer breached or failed to perform a duty that he or she owes to the bank
2and the breach or failure to perform constitutes any of the following:
SB494,104,43 1. A wilful failure to deal fairly with the bank or its shareholders in connection
4with a matter in which the director or officer has a material conflict of interest.
SB494,104,75 2. A violation of a criminal law, unless the director or officer had reasonable
6cause to believe that his or her conduct was lawful or had no reasonable cause to
7believe that his or her conduct was unlawful.
SB494,104,98 3. A transaction from which the director or officer derived an improper personal
9profit.
SB494,104,1010 4. Wilful misconduct.
SB494,104,1211 (b) Determination of whether indemnification is required under this
12subsection shall be made under s. 221.0631.
SB494,104,1613 (c) The termination of a proceeding by judgment, order, settlement or
14conviction, or upon a plea of no contest or an equivalent plea, does not, by itself, create
15a presumption that indemnification of the director or officer is not required under
16this subsection.
SB494,104,18 17(3) How indemnification may be sought. A director or officer who seeks
18indemnification under this section shall make a written request to the bank.
SB494,104,21 19(4) Limits on mandatory indemnification. (a) Indemnification under this
20section is not required to the extent limited by the articles of incorporation under s.
21221.0628.
SB494,104,2422 (b) Indemnification under this section is not required if the director or officer
23has previously received indemnification or allowance of expenses from any person,
24including the bank, in connection with the same proceeding.
SB494,105,5
1(c) Indemnification under this section is not required to the extent expressly
2prohibited by other provisions of this chapter, ch. 220 or applicable federal law or in
3connection with an administrative proceeding or action instituted under ch. 220
4which results in a final order against the officer or director under s. 220.04 (4), (9)
5or (10).
SB494,105,13 6221.0628 Bank may limit indemnification. A bank's articles of
7incorporation may limit its obligation to indemnify under s. 221.0627. Any provision
8of the articles of incorporation relating to a banks power or obligation to indemnify
9that was in existence on the effective date of this section .... [revisor inserts date],
10does not constitute a limitation on the bank's obligation to indemnify under s.
11221.0627. A limitation under this section applies if the first alleged act or omission
12of a director or officer for which indemnification is sought occurred while the
13limitation was in effect.
SB494,105,17 14221.0629 Allowance of expenses as incurred. Upon written request by a
15director or officer who is a party to a proceeding, a bank may pay or reimburse his
16or her reasonable expenses as incurred if the director or officer provides the bank
17with all of the following:
SB494,105,20 18(1) Affirmation of good faith belief. A written affirmation of his or her good
19faith belief that he or she has not breached or failed to perform his or her duties to
20the bank.
SB494,106,3 21(2) Undertaking to repay. A written undertaking, executed personally or on
22his or her behalf, to repay the allowance and, if required by the bank, to pay
23reasonable interest on the allowance to the extent that it is ultimately determined
24under s. 221.0631 that indemnification under s. 221.0627 (2) is not required and that
25indemnification is not ordered by a court under s. 221.0630 (2) (b). The undertaking

1under this subsection shall be an unlimited general obligation of the director or
2officer and may be accepted without reference to his or her ability to repay the
3allowance. The undertaking may be secured or unsecured.
SB494,106,11 4221.0630 Court-ordered indemnification. (1) Application for
5indemnification.
Except as provided otherwise by written agreement between the
6director or officer and the bank, a director or officer who is a party to a proceeding
7may apply for indemnification to the court conducting the proceeding or to another
8court of competent jurisdiction. Application shall be made for an initial
9determination by the court under s. 221.0631 (5) or for review by the court of an
10adverse determination under s. 221.0631 (1), (2), (3), (4) or (6). After receipt of an
11application, the court shall give any notice that it considers necessary.
SB494,106,13 12(2) When to be ordered by court. The court shall order indemnification if it
13determines any of the following:
SB494,106,1814 (a) That the director or officer is entitled to indemnification under s. 221.0627.
15If the court also determines that the bank unreasonably refused the director's or
16officer's request for indemnification, the court shall order the bank to pay the
17director's or officer's reasonable expenses incurred to obtain the court-ordered
18indemnification.
SB494,106,2119 (b) That the director or officer is fairly and reasonably entitled to
20indemnification in view of all the relevant circumstances, regardless of whether
21indemnification is required under s. 221.0627.
SB494,107,2 22221.0631 Determination of right to indemnification. Unless otherwise
23provided by the articles of incorporation or bylaws or by written agreement between
24the director or officer and the bank, the director or officer seeking indemnification

1under s. 221.0627 (2) shall select one of the following means for determining his or
2her right to indemnification:
SB494,107,9 3(1) Board or committee vote. By a majority vote of a quorum of the board of
4directors consisting of directors who are not at the time parties to the same or related
5proceedings. If a quorum of disinterested directors cannot be obtained, by majority
6vote of a committee duly appointed by the board of directors and consisting solely of
72 or more directors who are not at the time parties to the same or related proceedings.
8 Directors who are parties to the same or related proceedings may participate in the
9designation of members of the committee.
SB494,107,14 10(2) Independent legal counsel. By independent legal counsel selected by a
11quorum of the board of directors or its committee in the manner prescribed in sub.
12(1) or, if unable to obtain such a quorum or committee, by a majority vote of the full
13board of directors, including directors who are parties to the same or related
14proceedings.
SB494,107,18 15(3) Panel of arbitrators. By a panel of 3 arbitrators consisting of one
16arbitrator selected by those directors entitled under sub. (2) to select independent
17legal counsel, one arbitrator selected by the director or officer seeking
18indemnification and one arbitrator selected by the 2 arbitrators previously selected.
SB494,107,22 19(4) Shareholder vote. By an affirmative vote of shares as provided in s.
20221.0501. Shares owned by, or voted under the control of, persons who are at the time
21parties to the same or related proceedings, whether as plaintiffs or defendants or in
22any other capacity, may not be voted in making the determination.
SB494,107,23 23(5) Court order. By a court under s. 221.0630.
SB494,107,25 24(6) Other methods. By any other method provided for in any additional right
25to indemnification permitted under s. 221.0634.
SB494,108,6
1221.0632 Indemnification and allowance of expenses of employes and
2agents. (1)
Mandatory indemnification. Except as provided in sub. (3), a bank shall
3indemnify an employe who is not a director or officer, to the extent that he or she has
4been successful on the merits or otherwise in defense of a proceeding, for all
5reasonable expenses incurred in the proceeding if the employe was a party because
6he or she was an employe of the bank.
SB494,108,11 7(2) Permitted indemnification. Except as provided in sub. (3), in addition to
8the indemnification required by sub. (1), a bank may indemnify and allow reasonable
9expenses of an employe or agent who is not a director or officer to the extent provided
10by the articles of incorporation or bylaws, by general or specific action of the board
11of directors or by contract.
SB494,108,17 12(3) Prohibited indemnification. A bank may not indemnify or allow reasonable
13expenses of an employe or agent who is not a director or officer if the indemnification
14or allowance is expressly prohibited by s. 221.0803, by other provisions of this
15chapter or by applicable federal law or in connection with an administrative
16proceeding or action instituted under ch. 220 which results in a final order against
17an officer or director under s. 220.04 (4), (9) or (10).
SB494,109,2 18221.0633 Insurance. Except as expressly prohibited by other provisions of
19this chapter or applicable federal law or in connection with an administrative
20proceeding or action instituted under ch. 220 which results in a final order against
21an employe, agent, director or officer under s. 220.04 (4), (9) or (10), a bank may
22purchase and maintain insurance on behalf of the employe, agent, director or officer
23against liability asserted against or incurred by the individual in his or her capacity
24as an employe, agent, director or officer or arising from his or her status as an
25employe, agent, director or officer, regardless of whether the bank is required or

1authorized to indemnify or allow expenses to the individual against the same
2liability under ss. 221.0627, 221.0629, 221.0632 and 221.0634.
SB494,109,10 3221.0634 Additional rights to indemnification and allowance of
4expenses. (1)
Provision for additional rights. Except as provided in sub. (2) and
5except as expressly prohibited by other provisions of this chapter or applicable
6federal law or in connection with an administrative proceeding or action instituted
7under ch. 220 which results in a final order against an officer or director under s.
8220.04 (4), (9) or (10), ss. 221.0627 and 221.0629 do not preclude any additional right
9to indemnification or allowance of expenses that a director or officer may have under
10any of the following:
SB494,109,1111 (a) The articles of incorporation or bylaws.
SB494,109,1212 (b) A written agreement between the director or officer and the bank.
SB494,109,1313 (c) A resolution of the board of directors.
SB494,109,1514 (d) A resolution that is adopted, after notice, by a majority vote of all of the
15bank's voting shares then issued and outstanding.
SB494,109,23 16(2) When additional rights prohibited. Regardless of the existence of an
17additional right under sub. (1), the bank may not indemnify a director or officer, or
18permit a director or officer to retain any allowance of expenses, unless it is
19determined by or on behalf of the bank that the director or officer did not breach or
20fail to perform a duty that he or she owes to the bank which constitutes conduct under
21s. 221.0627 (2) (a) 1., 2., 3. or 4. A director or officer who is a party to the same or
22related proceeding for which indemnification or an allowance of expenses is sought
23may not participate in a determination under this subsection.
SB494,110,3
1(3) Reimbursement of certain expenses. Sections 221.0626 to 221.0635 do not
2affect a bank's power to pay or reimburse expenses incurred by a director or officer
3in any of the following circumstances:
SB494,110,44 (a) As a witness in a proceeding to which he or she is not a party.
SB494,110,65 (b) As a plaintiff or petitioner in a proceeding because he or she is or was an
6employe, agent, director or officer.
SB494,110,11 7221.0635 Indemnification and insurance against securities law claims.
8(1)
In general. It is the public policy of this state to require or permit
9indemnification, allowance of expenses and insurance for any liability incurred in
10connection with a proceeding involving securities regulation described under sub. (2)
11to the extent required or permitted under ss. 221.0626 to 221.0634.
SB494,110,15 12(2) Applicability. Sections 221.0626 to 221.0634 apply, to the extent applicable
13to any other proceeding, to any proceeding involving a federal law or regulation or
14a state law or rule that regulates the offer, sale or purchase of securities, securities
15brokers or dealers, or investment companies or investment advisors.
SB494,110,17 16221.0636 Theft. (1) Theft prohibited. (a) An officer, director, employe or
17agent of a bank may not do any of the following:
SB494,110,1918 1. Steal, abstract or wilfully misapply money, funds, credits, or property of the
19bank, whether owned by the bank or held in trust.
SB494,110,2220 2. Without authority of the board of directors, issue or put forth a certificate of
21deposit, draw an order or bill of exchange or make an acceptance, assign a note, bond,
22draft, bill of exchange, mortgage, judgment or decree.
SB494,110,2523 3. Make a false entry in a book, report or statement of the bank with intent to
24injure or defraud the bank or any person, or to deceive an officer of the bank, an agent
25appointed to examine the affairs of the bank, or any other person.
SB494,111,1
1(b) A person may not intentionally aid or abet a violation of par. (a).
SB494,111,3 2(2) Penalty. Any person who violates sub. (1) may be imprisoned for not more
3than 20 years.
SB494,111,9 4221.0637 Bank officers and employes not to take commissions. (1)
5Commissions prohibited. An officer, director, agent or employe of a bank may not,
6directly or indirectly, take, accept or receive, or offer or agree to take, accept or
7receive, a commission, fee, compensation, or thing of material value, from any person
8in consideration of the bank of which he or she is an officer, director, agent or employe,
9doing any of the following:
SB494,111,1010 (a) Loaning any money to a person.
SB494,111,1211 (b) Buying or discounting a note, bond, draft, or bill of exchange from the
12person.
SB494,111,1313 (c) Accepting any draft for, or issuing any letter of credit to, the person.
SB494,111,15 14(2) Penalties. Any person who violates sub. (1) may be fined not more than
15$10,000 or imprisoned for not more than 2 years or both.
SB494,111,1616 SUBSECTION VII
SB494,111,1817 SHARE EXCHANGE, MERGER AND
18 CONSOLIDATION
SB494,112,3 19221.0701 Share exchange. A bank or other corporation may acquire all of the
20outstanding shares of one or more classes or series of a bank organized under this
21chapter, with the approval of the division, if the board of directors of the bank, by
22resolution adopted by the board, approves a plan of share exchange and its
23shareholders also approve a plan of share exchange pursuant to ss. 180.1102 to
24180.1106. This section does not limit the power of a corporation or bank to acquire
25all or part of the shares of one or more classes or series of a bank through a voluntary

1exchange or otherwise. Application for approval of a share exchange shall be made
2to the division on a form prescribed by the division. The application shall be
3accompanied by a fee established by the division.
SB494,112,22 4221.0702 Consolidation or merger of banks. (1) In general. Any 2 or more
5banks may, with the approval of the division, consolidate or merge into one bank
6under the charter of either existing bank. The consolidation or merger shall be done
7on such terms and conditions as may be lawfully agreed upon by a majority of the
8board of directors of each bank proposing to consolidate or merge and as may be
9ratified and confirmed by the affirmative vote of the shareholders of each of the
10banks. The affirmative vote of the shareholders must be by shareholders owning a
11majority of the outstanding capital stock entitled to vote of each bank, or any greater
12percentage specified in the articles of incorporation or the bylaws, and by at least a
13majority of any outstanding preferred stock entitled to vote of each bank, or any
14greater percentage specified in the articles of incorporation or the bylaws. The vote
15must be at a meeting called by the directors, after sending notice of the time, place
16and object of the meeting to each shareholder of record in accordance with s.
17221.0103. The capital stock of the consolidated or merged bank may not be less than
18that required under existing law for the organization of a state bank in the place in
19which it is located. If the consolidation or merger is approved by the division, a
20shareholder of either of the banks who did not vote for the consolidation or merger
21shall be given notice of the approval by the bank in which the shareholder holds an
22interest.
SB494,113,7 23(2) Assets and liabilities of the consolidating or merging bank. The bank
24or banks consolidating or merging with another bank under sub. (1) may not be
25required to go into liquidation but their assets and liabilities shall be reported by the

1bank with which they have consolidated or merged. The rights, franchises and
2interests of the banks so consolidated or merged in and the property, personal and
3mixed, and choses in action belonging to the banks, are transferred to and vested in
4the consolidated or merged bank without any deed or other transfer. The
5consolidated or merged bank holds all rights of property, franchises and interests in
6the same manner and to the same extent as was held by the bank or banks so
7consolidated or merged.
SB494,113,19 8(3) Role of division. After consultation with the banking review board, the
9division may make recommendations to any bank within this state as to the
10advisability of consolidation or merger with other banks and may make
11recommendations as to terms for consolidation or merger of banks in order to avoid
12a condition of oversupply of banks in any community or area of the state. The division
13may also, if requested so to do, act as mediator or arbitrator to fix any of the terms
14of any such consolidation or merger. The board of directors of any bank organized
15under the laws of this state may use a reasonable amount of the assets of the bank
16toward assisting in bringing about a consolidation or merger of banks or to aid in
17reorganization or in avoiding the closing of a bank, if the board considers it to be in
18the interests of safe banking and the maintenance of credit and banking facilities in
19the county in which the bank is located.
SB494,113,25 20(4) Transfer of resources and liabilities. A bank, which is in good faith
21winding up its business, for the purpose of consolidating or merging with another
22bank, may transfer its resources and liabilities to the bank with which it is in process
23of consolidation or merger. A consolidation or merger may not be made without the
24consent of the division, and may not defeat or defraud any of the creditors in the
25collection of their debts against the banks.
SB494,114,3
1(5) Application for consolidation or merger. The banks shall apply for
2approval of a consolidation or merger under sub. (1) on a form prescribed by the
3division. The application shall be accompanied by a fee determined by the division.
SB494,114,6 4221.0703 Cancellation of charter of merged bank. If a bank has merged
5or consolidated with or been absorbed by another bank, the division shall cancel the
6charter of the bank.
SB494,114,13 7221.0704 Interim banks. Subject to the approval of the division, one or more
8banks may consolidate or merge into or with an interim bank organized under this
9chapter under the charter of either the existing bank or banks or the interim bank
10in accordance with the provisions of this chapter for consolidation or merger of a
11bank. The division shall promulgate rules providing for a simple process for the
12organization of interim banks under this chapter. The rules shall permit the
13organization of an interim bank with a minimum of one director.
SB494,114,14 14221.0705 Definitions. In ss. 221.0705 to 221.0718:
SB494,114,18 15(1) "Bank" means the issuer bank or, if a corporate action giving rise to
16dissenters' rights under s. 221.0706 is a merger or share exchange that has been
17effectuated, the surviving bank of the merger or the acquiring corporation or bank
18of the share exchange.
SB494,114,20 19(2) "Beneficial shareholder" means a person who is a beneficial owner of shares
20held by a nominee as the shareholder.
SB494,114,23 21(3) "Dissenter" means a shareholder or beneficial shareholder who is entitled
22to dissent from corporate action under s. 221.0706 and who exercises that right when
23and in the manner required by ss. 221.0709 to 221.0716.
SB494,115,2 24(4) "Fair value", with respect to a dissenter's shares, means the value of the
25shares immediately before the effectuation of the corporate action to which the

1dissenter objects, excluding any appreciation or depreciation in anticipation of the
2corporate action unless the exclusion would be inequitable.
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