Section 180.1807. Transfer after corporation's first refusal.

 

(1)   Notice of 3rd-party offer. A person desiring to transfer shares in a transaction without the consent described in s. 180.1805 (intro.) and that is not exempt under s. 180.1805 (2) to (8) shall obtain a written and signed offer from a 3rd party to purchase the shares for cash and shall deliver to the statutory close corporation written notice and a copy of the 3rd-party offer. The notice shall comply with s. 180.0141 and shall state the number and kind of shares, the offering price, the other material terms of the offer and the name and address of the 3rd-party offeror. No transfer may be made to a 3rd party unless all of the following conditions are met:

(a) The 3rd party is eligible to become a qualified shareholder under any federal or state tax statute that the corporation has elected to be subject to and the 3rd party agrees in writing not to take any action to terminate the election without the approval of the remaining shareholders.

(b) The transfer to the 3rd party will not result in the imposition of a personal holding company tax on the corporation under 26 USC 541 or any similar state or federal penalty tax.

(2)   Shareholder approval.

(a) The notice under sub. (1) constitutes an offer to sell the shares to the statutory close corporation and other shareholders on the same terms as the 3rd-party offer. Within 20 days after the corporation receives the notice, the corporation shall give notice of a special meeting of shareholders, which shall be held within 60 days after the corporation received notice of the offer, for the purpose of determining whether to purchase all, but not less than all, of the offered shares. The notice shall comply with s. 180.0141 .

(b) The offer must be approved by the affirmative vote of the holders of a majority of votes entitled to be cast at the meeting, excluding votes in respect of the shares covered by the offer.

(c) With the consent of all of the shareholders entitled to vote for approval of the purchase, the corporation may allocate some or all of the shares to one or more shareholders or to other persons, except as provided in par. (d) .

(d)

1. If all shares are not accepted for purchase by the corporation, the remaining shares shall be offered to shareholders of the class or series being offered for sale in proportion to their ownership of shares of that class or series.

2. If all shares are not accepted for purchase by shareholders under subd. 1. , the remaining shares shall be allocated among shareholders of the class or series being offered for sale who are willing to purchase the shares in proportion to their ownership of shares of that class or series after the acquisitions under subd. 1.

3. If all shares are not accepted for purchase by shareholders under subds. 1. and 2. , the remaining shares shall be offered to all other shareholders in proportion to their ownership of shares of the corporation.

4. If all shares are not accepted for purchase by shareholders under subd. 3. , the remaining shares shall be allocated among shareholders who are willing to purchase the shares in proportion to their ownership of shares of the corporation before the acquisitions under subd. 3.

(3)   Acceptance. If the statutory close corporation accepts the shareholder's offer, it must deliver written notice of acceptance to the offering shareholder within 75 days after receipt of the shareholder's offer. The notice shall comply with s. 180.0141 . If sent by mail, the notice is timely if deposited in the mail before midnight of the 75th day following the day that the offer from the shareholder was received by the corporation.

(4)   Transfer of shares to other than 3rd party. If a contract to sell is created under sub. (3) , the shareholder shall deliver duly endorsed certificates for all of the shares sold, or instruct the corporation in writing to transfer the shares if uncertificated, within 20 days after receipt of the notice of acceptance. Breach of any of the terms of the contract entitles the nonbreaching party to specific performance or any other remedy at law or equity for breach of a contract.

(5)   Transfer of shares to 3rd party. If the offer to sell is not accepted under subs. (2) and (3) , the shareholder may transfer to the 3rd-party offeror all, but not less than all, of the offered shares within 120 days after delivery of the notice under sub. (1) , in accordance with the terms of the offer as described in the notice under sub. (1) .

1989 a. 303 ; 2005 a. 253 .