Registration No. 333-________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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WAUMANDEE BANCSHARES, LTD.
(Exact name of registrant as specified in its Charter)
WISCONSIN 39-1978285 6711
(State of (I.R.S. Employer I.D. No.) (Primary Standard
Incorporation) Industrial Classifi-
cation Code No.)
P.O. BOX 959
COUNTY ROAD U
WAUMANDEE, WISCONSIN 54622-0959
(608) 626-3131
(Address and telephone number of principal executive offices)
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WARREN E. KORTE JOHN E. KNIGHT
P.O. Box 959 Boardman, Suhr, Curry & Field LLP
County Road U One S. Pinckney Street, 4th Floor
Waumandee, WI 54622-0959 Post Office Box 927
(608) 626-3131 Madison, WI 53701-0927
(Name, address, telephone no.
of agent for service) (Copy of Notices)
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Approximate date of commencement of proposed sale of the securities to the
public: upon consummation of the reorganization.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ___________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
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CALCULATION OF REGISTRATION FEE
Proposed
Title of Proposed maximum
each class of maximum aggregate Amount of
securities to Amount to be offering price offering registration
be registered registered per unit* price* fee
- ------------- ------------ -------------- ---------- ------------
Common Stock, 1,080 $4,435.37 $4,790,200 $1,331.68
No par value
*Based on the book value of the common stock of Waumandee State Bank on December
10, 1999, estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(f)(2).
<PAGE>
WAUMANDEE BANCSHARES, LTD.
Cross Reference Sheet
Form S-4,
Part I
Item Number Location in Prospectus
1 Facing Page of Registration Statement; Outside Front Cover
Page of Prospectus
2 Table of Contents
3 Summary
4 Summary; The Reorganization; Comparison of Bank Stock With
Holding Company Stock
5 Not applicable
6 Waumandee Bancshares, Ltd.; Waumandee State Bank
7 Not applicable
8 The Reorganization
9 Waumandee Bancshares, Ltd.; Waumandee State Bank
10 Not applicable
11 Not applicable
12 Not applicable
13 Not applicable
14 Waumandee Bancshares, Ltd.; Comparison of Bank Stock With
Holding Company Stock
15 Not applicable
16 Not applicable
17 Waumandee State Bank; Comparison of Bank Stock With Holding
Company Stock
18 The Reorganization; Waumandee Bancshares, Ltd.; Waumandee
State Bank; Rights of Dissenting Stockholders of Bank
19 Not applicable
<PAGE>
WAUMANDEE STATE BANK
P.O. Box 959
County Road U
Waumandee, WI 54622-0959
(608) 626-3131
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A special meeting of the shareholders of Waumandee State Bank will be held
on ________________, at Waumandee State Bank, Waumandee, Wisconsin, at ____p.m.,
to:
1. Vote on the following resolution:
RESOLVED, that the formation of a bank holding company for Waumandee
State Bank, pursuant to the terms and conditions of an Agreement and
Plan of Reorganization between Waumandee State Bank and Waumandee
Bancshares, Ltd., and a Merger Agreement between Waumandee State Bank
and New Waumandee State Bank, whereby (i) Waumandee State Bank will
become a wholly-owned subsidiary of Waumandee Bancshares, Ltd., and
(ii) shareholders of Waumandee State Bank will become shareholders of
Waumandee Bancshares, Ltd., is hereby authorized and approved.
2. Transact such other business as may properly come before the meeting
or any adjournments thereof.
The record date for the special meeting is December 31, 1999. Only
stockholders of record at the close of business on that date can vote at the
meeting. In order to form the holding company, a majority of outstanding bank
shares must be voted in favor of the above resolution.
Shareholders and beneficial shareholders may be entitled to assert
dissenters' rights. A copy of the law pertaining to dissenters' rights, sections
221.0706 through 221.0718 of the Wisconsin Statutes, is attached as Exhibit C to
the following prospectus-proxy statement.
The directors of the bank unanimously believe that the proposed holding
company is in the best interests of the bank and its shareholders, and urge
shareholders to vote "for" the above resolution.
By Order of the Board of Directors
______________, ______ ___________________, President
<PAGE>
Prospectus of Waumandee Bancshares, Ltd.
1080 Shares of Common Stock, $100 Par Value
and
Proxy Statement of Waumandee State Bank
Special Meeting of Bank Shareholders to be held____________________
_____ p.m. at the Waumandee State Bank, Waumandee, Wisconsin
To the Shareholders of Waumandee State Bank:
This prospectus relates to the shares of Waumandee Bancshares, Ltd. stock
which will be exchanged, on a one-for-one basis, for your shares of bank stock
as a result of the formation of a bank holding company for the bank.
The holding company will be formed through a reorganization. In the
reorganization, which is described in detail in this prospectus, the bank will
become a wholly owned subsidiary of Waumandee Bancshares, Ltd., and the
shareholders of the bank will become the shareholders of Waumandee Bancshares,
Ltd. The specific components of this reorganization are set forth in the Plan of
Reorganization and Merger Agreement, which are attached to this prospectus-proxy
statement as Exhibit A.
This prospectus-proxy statement is also being furnished to you because the
bank's Board of Directors is soliciting your proxy to be used at the special
meeting of shareholders to be held ________________. At the special meeting, you
will be asked to consider and vote on the proposed holding company formation. A
form of proxy, on blue paper, is enclosed separately. YOUR VOTE IS IMPORTANT,
regardless of how many shares you own. Whether you plant to attend the meeting
or not, please complete, date, sign and return the enclosed proxy form promptly
in the enclosed envelope. If you attend the meeting and prefer to vote in
person, you may do so, even if you turn in your proxy at this time.
The common stock of Waumandee Bancshares, Ltd. is not listed by any
national securities exchange or the Nasdaq Stock Market.
The following are important disclosures. Please read them carefully:
This prospectus-proxy statement is not an offer to sell to or solicitation
of an offer to buy from any person or in any jurisdiction where it is illegal to
make or solicit such an offer. Wherever this offer is required to be made by a
licensed broker or dealer, only a registered, licensed broker-dealer may make
this offer on behalf of the holding company.
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with
information that is different. This prospectus-proxy statement is only accurate
as of the date printed on the bottom of this page. We are required to advise you
if there is any fundamental change affecting the formation of the holding
company.
The shares of holding company stock to be issued in the holding company
formation will not be savings accounts or deposits, and will not be insured by
the Federal Deposit Insurance Corporation or any other government agency.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the securities to be issued in the
holding company formation, passed upon the accuracy of this prospectus-proxy
statement or determined if this prospectus-proxy statement is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus-proxy statement is _______________________.
Paul R. Lorenz, CEO
<PAGE>
TABLE OF CONTENTS
Page
Summary........................................................................i
Introduction...................................................................1
Forward-Looking Statements.....................................................1
The Reorganization.............................................................2
General...............................................................2
Reasons for the Reorganization........................................2
Summary of the Reorganization.........................................4
Special Meeting of Shareholders.......................................5
Operation of the Bank Following the Reorganization....................6
Conditions Required for the Reorganization............................6
Closing Date..........................................................7
Resales of Holding Company Stock......................................7
Tax Considerations....................................................8
Securities Regulation.................................................9
Expenses of Reorganization............................................9
Rights of Dissenting Stockholders of Bank......................................9
Waumandee Bancshares, Ltd.....................................................10
History, Business, and Properties....................................10
Management...........................................................10
Principal Shareholders...............................................11
Description of Holding Company's Common Stock........................11
Executive Compensation...............................................11
Transactions with Related Parties....................................11
Antitakeover and Indemnification Provisions..........................11
Waumandee State Bank..........................................................12
History, Business, and Properties....................................12
Year 2000 Readiness Disclosure.......................................13
Management...........................................................14
Business Background of Directors and Executive Officers..............15
Executive Compensation...............................................16
Director Compensation................................................16
Board Review of Management Compensation..............................16
Principal Shareholders...............................................16
Description of the Stock of the Bank.................................17
Transactions with Related Parties....................................17
Indemnification of Directors and Officers............................17
Shares of the Stock Owned or Controlled by Management................17
Recommendation of the Bank's Board of Directors......................18
Recent Stock Purchase from Significant Shareholder...................18
Financial Statements.................................................18
Comparison of Bank Stock with Holding Company Stock...........................19
Authorized Shares....................................................19
Voting Rights........................................................19
Dividends............................................................19
Market for the Stock.................................................19
Value................................................................23
Other................................................................24
Supervision and Regulation....................................................24
General..............................................................24
Banking Regulation...................................................25
Capital Requirements for Holding Company and Bank....................26
Federal Deposit Insurance Corporation Deposit Insurance Premiums.....27
Loan Limits to Borrowers.............................................27
Available Information.........................................................27
Legal Matters.................................................................27
Exhibit A - Agreement and Plan of Reorganization
Exhibit B - Tax Opinion of Boardman, Suhr, Curry & Field LLP
Exhibit C - Sections 221.0706 through 221.0718 of Wisconsin Statutes
Exhibit D - Articles of Incorporation of Waumandee Bancshares, Ltd.
Exhibit E - Article VI, Section 4
<PAGE>
Summary
-------
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the
formation of the holding company for the bank better, and for a more complete
description of the legal terms of these transactions, you should read this
entire prospectus-proxy statement carefully, including the Exhibits that are
attached at the end.
The Formation of a One-Bank Holding Company for the Bank
- --------------------------------------------------------
The Board of Directors of the bank proposes to form a bank holding company
for the bank. As part of the formation process, the holding company will trade
one share of its common stock for each outstanding share of your bank stock. As
a result,
o the holding company will be owned by you, the former bank shareholders
and
o the bank will become a wholly-owned subsidiary of the holding company.
Other things you should know about the formation of the holding company:
o There will be no change in the compensation or benefits of bank
directors or executive officers.
o The holding company will not have to file reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934.
o The holding company will voluntarily provide its shareholders with the
same types of reports that the bank currently provides to bank
shareholders.
o For more information, see "Available Information." For more
information about the Reorganization, see "The Reorganization -
Summary of The Reorganization" and the Agreement and Plan of
Reorganization attached as Exhibit A.
Reasons for the Reorganization
- ------------------------------
A bank holding company provides many advantages that a bank does not. These
advantages are as follows:
o The holding company can purchase its own stock from shareholders.
Therefore, it can provide a potential market for the stock of the
holding company. State banks are severely restricted in their ability
to purchase their own stock from shareholders. This is the single most
important advantage to a bank holding company.
o The holding company will enable the bank to continue under local
ownership and control.
o The holding company will be able to respond efficiently to changes in
the law governing banks and financial activities.
o Although the Board of Directors has no intention of acquiring other
banks at this time, the holding company will be able to more easily
acquire other banks and operate them as branches of Waumandee State
Bank or as separate banks in areas not now served by Waumandee State
Bank.
o The holding company will be able to meet future bank capital needs by
having the holding company take out loans which are repaid by
nontaxable bank dividends.
i
<PAGE>
o It will allow the holding company and bank to compete more effectively
with other bank holding companies.
See "The Reorganization - Reasons for The Reorganization."
Recommendation of the Bank's Board of Directors
- -----------------------------------------------
The Board believes that the formation of a holding company for the bank is
in the best interests of the bank and its shareholders. The Board unanimously
recommends that you vote your bank shares to approve the holding company.
For more information, see "The Reorganization - Reasons for The
Reorganization" and "Waumandee State Bank - Recommendation of the Bank's Board
of Directors."
Parties
- -------
The Holding Company
o Organized by bank management.
o Wisconsin corporation.
o Intended by bank management to become a one-bank holding company for
the bank.
o Still in the organizational phase, so
o No operating history.
o For more information, see "Waumandee Bancshares, Ltd. - History,
Business, and Properties."
Address:
Waumandee Bancshares, Ltd.
P.O. Box 959
County Road U
Waumandee, WI 54622-0959
(608) 626-3131
The Bank
o Chartered under the laws of Wisconsin.
o Operating as a commercial bank with its main office in Waumandee,
Wisconsin, since 1914.
o Offers comprehensive banking services to the residential, commercial,
industrial and agricultural areas that it serves.
o Services include agricultural, commercial, real estate and personal
loans; checking, savings and time deposits; investments, and
individual retirement accounts.
o For more information, see "Waumandee State Bank - History, Business,
and Properties."
Address:
Waumandee State Bank
P.O. Box 959
County Road U
Waumandee, WI 54622-0959
(608) 626-3131
ii
<PAGE>
Special Meeting of Shareholders
- -------------------------------
The meeting will be held __________________, at ____ p.m. at Waumandee
State Bank, Waumandee, Wisconsin. Only shareholders of record as of the close of
business on _________________, will be entitled to vote at the meeting.
At the meeting, you, the bank shareholders, will consider and vote on the
formation of a bank holding company for the bank pursuant to the Agreement and
Plan of Reorganization that is attached as exhibits to this proxy
statement-prospectus. We can only form a holding company if the holders of a
majority of outstanding bank stock vote in favor of the transaction.
As of the date of this prospectus-proxy statement, directors and executive
officers of the bank own or control, directly or indirectly, approximately 10%
of the outstanding bank stock.
For more information, see "The Reorganization - Special Meeting of
Shareholders."
Effect on Bank Shareholders
- ---------------------------
Assuming a majority of the bank shareholders approve the holding company
formation, the directors of the holding company will chose an appropriate day on
which to "close" the formation of the holding company. For a discussion of how
they choose this "closing date," see "The Reorganization - Closing Date."
On the closing date, the holding company will exchange one share of its
holding company stock for each share of bank stock that you hold immediately
prior to the closing date. As a result of this exchange, you and the other bank
shareholders will become the shareholders of the holding company, and the
holding company will become the sole shareholder of the bank. For more
information, see "The Reorganization."
This exchange will be subject to certain limitations and dissenters' rights
provided by law. For a discussion of dissenters rights, see the following
sections and "Rights of Dissenting Shareholders of Bank".
Dissenters' Rights
- ------------------
Under certain provisions of the Wisconsin Statutes, as a holder of bank
stock, you have the right to:
o dissent from the formation of the holding company and
o obtain payment of the fair value of your shares in cash.
However, you may only exercise these rights if you:
o deliver to the bank before the vote is taken a written notice of your
intent to demand payment for your shares if the proposed formation of
the holding company occurs,
o refrain from voting your shares in favor of the proposed formation of
the holding company,
o demand payment in writing before the date stated in the dissenters'
notice which will be sent to you after the shareholder meeting, if you
dissent,
o surrender your bank stock certificates, and
o take certain other actions.
iii
<PAGE>
For more information, see "Rights of Dissenting Shareholders of Bank" and
Exhibit C.
Federal Income Tax Consequences
- -------------------------------
We have structured the holding company formation to qualify as a tax free
transaction under the federal tax laws. Therefore, you should not recognize any
gain or loss on the exchange of your bank stock for holding company stock.
Exhibit B to this prospectus-proxy statement is an opinion of an attorney that
the formation of the holding company is a tax-free transaction. The opinion of
an attorney is not binding on the Internal Revenue Service. See "The
Reorganization - Tax Considerations."
However, if you exercise your dissenter's rights and receive cash for your
shares of bank stock instead of exchanging the shares for holding company stock,
as discussed above under "Dissenters' Rights", you will be taxed on the cash
that you receive for your shares of bank stock.
Date of the Holding Company Formation
- -------------------------------------
We will form the holding company for the bank as soon as practicable after
we receive all necessary approvals from governmental agencies and authorities,
and after certain other terms and conditions are satisfied. The bank will close
its transfer records twenty (20) days prior to the closing date, which, as we
mentioned above, is an appropriate date that the directors of the holding
company will choose to "close" the holding company formation process. Until the
bank's transfer records are closed, you may sell or otherwise transfer your bank
stock. The holding company formation process will close no later than
____________, unless the parties agree to another date in writing. See "The
Reorganization - Closing Date."
Conditions for the Holding Company Formation
- --------------------------------------------
We cannot form a holding company for the bank unless the Wisconsin
Department of Financial Institutions Division of Banking, the Federal Reserve
Board, the Federal Deposit Insurance Corporation, and a majority of the
outstanding stock of the bank approve the transaction. In addition, other terms
and conditions must also be satisfied. See "The Reorganization - Conditions
Precedent to The Reorganization."
The holding company and the bank may change or waive certain conditions if,
in the opinion of the Boards of Directors of the holding company and the bank,
the action would not significantly diminish the benefits intended for holders of
holding company stock.
Right of First Refusal and Right of Redemption
- ----------------------------------------------
The shares of holding company stock will be subject to limitations on
transfer that currently do not apply to bank stock. These limitations are known
as the "right of first refusal" and the "right of redemption." One of the
purposes of forming a holding company for the bank is to enable the bank to
continue under local control. A right of first refusal and a right of redemption
provide the holding company with mechanisms for assuring local control of the
bank. Here are some important things to know about a right of first refusal:
o Generally, you will need the consent of the holding company to
transfer or sell your shares. If you choose to transfer or sell any of
your shares without the holding company's prior written approval, then
the right of first refusal or the right of redemption applies.
o Transactions between a you and your spouse or children, including
stepchildren, are not subject to these limitations on transfer.
However, after the stock is transferred or sold, it remains subject to
the right of first refusal and the right of redemption.
o If someone offers in writing to buy your holding company stock, a
"right of first refusal" gives the holding company the right to buy
your stock first at the same price and on the same terms as those
offered by the person who wanted to buy your stock.
iv
<PAGE>
o If you desire to transfer shares to a person or entity other than your
spouse or children in a transaction that does not involve a sale of
the shares, the holding company has the right to redeem the shares for
consideration as determined by a formula contained in the holding
company's bylaws.
o The right of first refusal and right of redemption will apply to
holding company stock held by all shareholders.
o In order to amend the right of first refusal and the right of
redemption, at least seventy-five percent of the outstanding shares of
holding company voting stock must be voted in favor of the amendment.
o The holding company's right to purchase your stock first may limit
your ability to sell or transfer your shares to persons or entities
other than the holding company.
o The right of first refusal and right of redemption may reduce the
likelihood of another individual or entity obtaining control of the
holding company through the acquisition of large blocks of holding
company stock.
For more information, see "Waumandee Bancshares, Ltd. - Right of First
Refusal and Indemnification Provisions" and "Comparison of Bank Stock With
Holding Company Stock - Market for the Stock."
--------------------------------------------
v
<PAGE>
------------------------------------------
Proxy Statement
and
Prospectus
------------------------------------------
Introduction
------------
Waumandee Bancshares, Ltd. is a business corporation organized at the
request of the Board of Directors of Waumandee State Bank for the purpose of the
reorganization. See "Waumandee Bancshares, Ltd." The bank is a state-chartered
bank that has been operating as a commercial bank with its main office in
Waumandee, Wisconsin, since 1914. See "Waumandee State Bank."
The reorganization is being conducted for the purpose of forming a holding
company for the bank, according to a plan of reorganization approved by the
Board of Directors of the holding company and by the Board of Directors of the
bank. See "The Reorganization - Summary of The Reorganization." The Board of
Directors of the bank believes that the formation of a bank holding company will
benefit the bank and its shareholders. See "The Reorganization - Reasons for The
Reorganization" and "Waumandee State Bank - Recommendation of the Bank's Board
of Directors."
This prospectus-proxy statement contains information intended to help each
bank shareholder decide whether to vote to approve the formation of a bank
holding company. See, for example, "Comparison of Bank Stock With Holding
Company Stock." The Board of Directors of the holding company urges each bank
shareholder to carefully read the entire prospectus-proxy statement.
Forward-Looking Statements
--------------------------
When used in this prospectus-proxy statement, in the bank's or holding
company's press releases or other public or shareholder communications, and in
oral statements made with the approval of an authorized executive officer, the
words or phrases "are expected to," "estimate," "is anticipated," "project,"
"will continue," "will likely result," or similar expressions are intended to
identify "forward-looking statements." Such statements are subject to certain
risks and uncertainties, including changes in economic conditions in the bank's
market area, changes in policies by regulatory agencies, fluctuation in interest
rates, demand for loans in the bank's market area, and competition, that could
cause actual results to differ materially from what the bank or holding company
have presently anticipated or projected. The bank and holding company wish to
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The bank and holding company
wish to advise readers that factors addressed within the prospectus-proxy
statement could affect the bank's financial performance and could cause the
bank's actual results for future periods to differ materially from any opinions
or statements expressed with respect to future periods in any current
statements.
Where any such forward-looking statement includes a statement of the
assumptions or bases underlying such forward-looking statement, the bank and
holding company caution that, while they believe such assumptions or bases to be
reasonable and make them in good faith, assumed facts or bases almost always
vary from actual results, and the differences between assumed facts or bases and
actual results can be material, depending on the circumstances. Where, in any
forward-looking statement, the bank, the holding company, or their directors or
officers, express an expectation or belief as to the future results, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the statement of
expectation or belief will result, or be achieved or accomplished.
The bank and holding company do not undertake -- and specifically decline
any obligation -- to publicly release the result of any revisions which may be
made to any forward-looking statements to reflect events or circumstances after
the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
1
<PAGE>
The Reorganization
------------------
General
- -------
The reorganization is designed to offer shareholders of Waumandee State
Bank the opportunity to form a bank holding company. Pursuant to the
reorganization, the following steps have already occurred:
1. Waumandee Bancshares, Ltd., a Wisconsin business corporation, has been
incorporated for the purpose of participating in the reorganization
and becoming a bank holding company; and
2. the Board of Directors of the bank and the Board of Directors of the
holding company have adopted and approved an Agreement and Plan of
Reorganization.
The following steps, among others, remain to be completed pursuant to the
reorganization (see "The Reorganization - Conditions Required for The
Reorganization"):
1. the shareholders of the bank must approve the reorganization by the
affirmative vote of a majority of the outstanding bank stock;
2. the Federal Reserve Board must approve the holding company's
application to become a bank holding company under the Bank Holding
Company Act of 1956, as amended;
3. the Wisconsin Department of Financial Institutions Division of Banking
must approve the reorganization; and
4. the Federal Deposit Insurance Corporation must approve the
reorganization.
Reasons for The Reorganization
- ------------------------------
The Board of Directors of the bank recommends the reorganization because it
believes that a bank holding company will provide benefits to the shareholders
and to its community. In addition, the Board believes that the formation of a
holding company will offer opportunities to the bank to compete more effectively
and to expand its services in type, in number, and in geographical scope.
Market for the Stock. Under Wisconsin law, a state-chartered bank is
prohibited from holding or purchasing more than 10% of its own stock, except in
certain limited circumstances. Federal law imposes additional restrictions.
Therefore, any bank shareholder who desires to sell his or her bank stock must
generally locate a person willing to purchase the stock. In the past, there has
been a limited market for bank stock, making it difficult for a seller to find a
buyer, particularly if the seller owns a large number of shares that would
require a substantial purchase price.
Flexibility. The proposed reorganization will, in the opinion of the Board,
better prepare the bank for responding flexibly and efficiently to future
changes in the laws and regulations governing banks and bank-related activities.
Opportunities may arise for bank holding companies that are not available to
banks. The bank holding company corporate structure may prove valuable in taking
advantage of any new opportunities in banking and bank-related fields that are
made available by deregulation or otherwise.
The holding company will not be prohibited by law from purchasing holding
company stock, unless such a purchase would make the holding company insolvent.
The holding company may therefore become a potential buyer of that stock.
Selling shareholders are required to offer their shares first to the holding
company under its right of first refusal. The holding company will not be
required to purchase stock, however, but may do so in the discretion of its
Board of Directors. In certain circumstances, approval by the Federal Reserve
Board may be required for the purchase of holding company stock. For more
information about the holding company's ability to purchase stock, see
"Comparison of Bank Stock With Holding Company Stock - Market for the Stock."
2
<PAGE>
Expansion. The principal means for a bank to seek continued growth, apart
from utilizing more fully the business potential within its present market area,
is by use of the holding company structure to reach into other geographic
markets. After the reorganization, the holding company will be able to, and may,
subject to approval of regulatory authorities, create new banks or acquire
existing banks anywhere in Wisconsin and neighboring states. The holding company
has no present plans to acquire any such banks.
Diversification as a Bank Holding Company. The proposed bank holding
company offers the ability to diversify the business of the bank by creating or
acquiring corporations engaged in bank-related activities. Diversification into
bank-related activities is governed by the Bank Holding Company Act of 1956, as
amended, and the regulations of the Federal Reserve Board promulgated pursuant
to that Act. The range of activities in which a holding company may engage
through nonbank subsidiaries, subject to approval of the Federal Reserve Board,
includes:
o Loan service companies,
o Mortgage companies,
o Independent trust companies,
o Small loan and factoring companies,
o Equipment leasing companies,
o Credit life and disability insurance companies, and
o Certain insurance, advisory, and brokerage operations.
The holding company may in the future engage directly or through
subsidiaries in one or more of those activities. However, the timing and extent
of those operations by the holding company will depend on many factors,
including competitive and financial conditions existing in the future as well as
the then financial condition of the holding company and the bank.
Diversification as a Financial Holding Company: Under the recent
Gramm-Leach-Bliley Act of 1999, holding companies that qualify may elect to
become "financial holding companies." As a result, such holding companies may
engage in activities, and acquire companies engaged in activities, that are
financial in nature or incidental to such financial activities. Such "financial
holding companies" are also permitted to engage in activities that are
complementary to financial activities if the Federal Reserve Board determines
that the activity does not pose a substantial risk to the safety and soundness
of depository institutions or to the financial system in general. In order to
qualify as a "financial holding company," a holding company's subsidiary banks
must be well managed, well capitalized, and have received at least a
"satisfactory" Community Reinvestment Act ("CRA") rating at the most recent CRA
examination. The list of activities that are considered "financial in nature"
includes:
o Securities underwriting, dealing and market making,
o Insurance underwriting and agency activities,
o Merchant banking, which means that a "financial holding company"
may directly or indirectly acquire or control any kind of
ownership interest in an entity engaged in any kind of trade or
business whatsoever, and
o Insurance company portfolio investments.
The holding company may in the future elect to become a "financial holding
company" and to engage in one or more of the listed activities. However, the
timing and extent of those operations by the holding company will depend on many
3
<PAGE>
factors, including competitive and financial conditions existing in the future
as well as the then financial condition of the holding company and the bank.
Capital Requirements. The proposed reorganization will also provide, in the
opinion of the Board, greater flexibility in meeting the financing needs of the
bank or other banks or corporations acquired by the holding company. Currently,
there is no need for the bank to obtain additional capital. If the need for
additional capital should arise, however, those capital requirements of the bank
could be obtained in the following manner:
1. The holding company would borrow the capital.
2. The holding company would pay the capital to the bank as a capital
contribution or as a purchase of additional bank stock.
3. The loan to the holding company would be paid with dividends received
from the bank, which would not be taxable to the holding company if it
holds at least 80% of the bank stock.
4. The interest expense incurred by the holding company on the loan could
be used to offset bank earnings on a consolidated federal income tax
return.
General. The Board believes that greater overall strength will result to
the bank through the formation of the holding company. The formation of the
holding company is not part of a plan or effort to adversely affect any
shareholder, or to unduly benefit any shareholder, director, or officer. Except
for those shareholders who exercise dissenters' rights, the proportionate
interests of the bank shareholders in the holding company stock will be
identical to their current proportionate interests in the bank stock.
Summary of The Reorganization
- -----------------------------
The holding company intends to acquire all of the outstanding stock of the
bank through a reorganization. To perform the reorganization:
1. The holding company will incorporate a new bank, called New Waumandee
State Bank, as a wholly-owned subsidiary of the holding company;
2. The new bank will not conduct any banking business or any other
business. It will have no employees, no liabilities, no operations,
and except for a nominal capital contribution required by law no
assets. It will be a "shell" corporation, and will be incorporated for
the sole purpose of assisting in the reorganization.
3. The new bank will be merged into the bank.
4. The stock of the bank now held by the shareholders will be converted
into the holding company stock at the rate of one share of the holding
company stock for each one share of bank stock that they currently
own.
As a result of the reorganization, the bank shareholders will become
shareholders of the holding company. In addition, by virtue of the merger of the
new bank into the bank, the bank will become a wholly-owned subsidiary of the
holding company.
Currently, the bank shareholders own all 1,080 shares outstanding of the
bank's stock. After the reorganization, the holding company will own the bank,
and the former bank shareholders will own the holding company.
4
<PAGE>
Current After Reorganization
Shareholders Shareholders
------------------------- --------------------------------
1,080 shares (100%) 1,080 shares (100%) of the issued
of issued and and outstanding shares of holding
outstanding shares company stock
of bank stock
Holding Company
--------------------------------
1,080 shares (100%) of
bank stock
Bank
-------------------------
Bank
--------------------------------
Special Meeting of Shareholders
- -------------------------------
Section 221.0702 of the Wisconsin Statutes requires that at least a
majority of the outstanding stock of a state-chartered bank approve a merger of
that bank. Because the reorganization will be conducted as a merger of the new
bank and the bank, that requirement must be fulfilled.
A vote on the proposed holding company will be taken at the special meeting
of shareholders of the bank, to be held on ________________, at ____ p.m., at
Waumandee State Bank, Waumandee, Wisconsin. The close of business on December
31, 1999, has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting. On that date
there were outstanding and entitled to vote 1,080 shares of bank stock.
Each outstanding share of bank stock entitles the record holder to one vote
on all matters to be acted upon at the meeting. The presence at the meeting in
person or by proxy of the holders of a majority of the issued and outstanding
shares of bank stock entitled to vote will constitute a quorum for the
transaction of business. The affirmative vote of 541 of the issued and
outstanding shares of bank stock is required to approve the holding company. For
purposes of counting votes at this special meeting of shareholders, abstentions,
(that is, proxies on which the box labeled "Abstain" has been checked), are
treated as "no" votes. Also for purposes of counting votes at the special
meeting of shareholders, broker non-votes are treated as abstentions and
therefore as "no" votes. Abstentions are not treated as "no" votes for purposes
of dissenters' rights.
The Board of Directors of the bank unanimously recommends that holders of
bank stock vote "for" the transaction. See "Waumandee State Bank -
Recommendations of the Bank's Board of Directors." As of the date of this
prospectus-proxy statement, the directors and executive officers of the bank
owned or controlled, directly or indirectly, 108 shares, or approximately 10%,
of the bank stock outstanding. See "Waumandee State Bank Management." The
directors and officers of the bank have indicated that they will vote to approve
the transaction, and are soliciting proxies from bank shareholders.
A shareholder may vote his or her shares in person or by proxy. Each
shareholder is encouraged to return the enclosed proxy, on blue paper, even if
he or she intends to attend the meeting. All properly executed proxies not
revoked will be voted at the meeting in accordance with the instructions on the
proxy. Proxies containing no instructions will be voted "FOR" approval of the
holding company. On any other matters properly brought before the meeting and
submitted to a vote, all proxies will be voted in accordance with the judgment
of the persons voting the proxies.
A proxy may be revoked at any time before it is voted, either by written
notice filed with the Cashier of the bank or with the acting secretary of the
meeting or by oral notice given by the shareholder to the presiding officer
during the meeting. The presence of a shareholder who has filed his or her proxy
shall not of itself constitute a revocation. Failure to submit a proxy or to
vote at the meeting has the same effect as a negative vote for purposes of
approving or disapproving the reorganization.
5
<PAGE>
Wisconsin law provides appraisal rights to holders of bank stock who
dissent from the merger, if statutory procedures are followed. See "Rights of
Dissenting Shareholders of Bank."
Operation of the Bank Following the Reorganization
- --------------------------------------------------
The holding company anticipates that, following the reorganization, the
business of the bank will be conducted substantially unchanged from the manner
in which it is now being conducted.
o The bank's name will not be changed.
o The holding company anticipates that the bank will be operated under
the same management, and no changes in personnel are anticipated as a
result of the reorganization.
o After the reorganization, the bank will continue to be subject to
regulation and supervision by regulatory authorities, to the same
extent as currently applicable. See "Supervision and Regulation."
o The bank will continue to prepare an annual report in the same format
as in prior years, and the holding company will send to all of its
shareholders a consolidated annual report, in a similar format as that
used in the bank's report.
o The holding company will convene an annual meeting of its
shareholders, at a similar time and for similar purposes as the bank's
annual meeting.
Conditions Required for the Reorganization
- ------------------------------------------
The Agreement and Plan of Reorganization (Exhibit A) provides that the
consummation of the reorganization is subject to certain conditions that have
not yet been met, including, but not limited to, the following:
1. No investigation, action, suit or proceeding before any court or any
governmental or regulatory authority shall have been commenced or
threatened seeking to restrain, prevent or change the reorganization
or otherwise arising out of or concerning the reorganization;
2. The application by the holding company to be a registered bank holding
company under the Bank Holding Company Act of 1956, as amended, must
have been approved by the Federal Reserve Board;
3. The Wisconsin Department of Financial Institutions Division of Banking
must have granted all required approvals for consummation of the
reorganization;
4. The Federal Deposit Insurance Corporation must have granted all
required approvals for consummation of the reorganization;
5. The reorganization must have been approved by a majority of
shareholders of the outstanding bank stock;
6. The holding company and the bank must have received an opinion from
counsel for the holding company and the bank attached to this
prospectus-proxy statement as Exhibit B to the effect that the
transaction will be a tax-free reorganization for the organizations
and participating bank shareholders;
7. No change shall have occurred or be threatened in the business,
financial condition or operations of the bank that, in the judgment of
the holding company, is materially adverse;
8. No more than ten percent (10%) (108 shares or fewer) of the bank stock
shall be "dissenting shares" pursuant to the exercise of dissenters'
rights; and
6
<PAGE>
9. The reorganization must be completed by ____________, unless extended
by both the bank and the holding company.
These conditions are for the sole benefit of the holding company and the
bank, and may be asserted by them or may be waived or extended by them, in whole
or in part, at any time or from time to time. Any determination by the holding
company and the bank concerning the events described above shall be final and
binding.
It is anticipated that these conditions will be met. Any waiver or
extension of conditions not met will be approved only if, in the opinion of the
Boards of Directors of the holding company and the bank, the action would not
have a material adverse effect on the benefits intended for holders of the
holding company stock under the reorganization. The reorganization may be
terminated and abandoned by the mutual consent of the Board of Directors of the
holding company and the Board of Directors of the bank at any time prior to the
closing date.
Closing Date
- ------------
The closing of the reorganization shall take place on a date, the closing
date, to be selected by the holding company, at the offices of the bank, P.O.
Box 959, County Road U, Waumandee, WI 54622-0959; provided, however, that the
closing date shall be a date no later than thirty (30) days after all conditions
have been met and all approvals, consents and authorizations for the valid and
lawful consummation of the reorganization have been obtained. The bank will
close its transfer records twenty (20) days prior to the closing date for a
period through and including the closing date. Until the bank's transfer records
are closed, bank shareholders may sell or otherwise transfer their bank stock.
On the closing date, all of the bank shareholders' right, title and
interest in and to the shares of the bank stock, without any action on the part
of the shareholders, shall automatically become and be converted into a right
only to receive the holding company stock. Commencing on the closing date, the
holding company shall issue and deliver the holding company stock to the
shareholders as set forth in the Agreement and Plan of Reorganization (Exhibit
A).
The closing date shall be no later than ________________, unless that date
is extended by mutual written agreement of the parties.
Resales of Holding Company Stock
- --------------------------------
The holding company stock issued in the reorganization has been registered
under the Securities Act of 1933, as amended, and may be traded by a shareholder
subject to the holding company's right of first refusal and consent. See
"Comparison of Bank Stock with Holding Company Stock - Market for the Stock."
Under the federal securities laws there are certain restrictions on resales
of holding company stock received in the reorganization by persons who are
deemed to be an "affiliate" of the bank. In general, an affiliate for these
purposes would include directors and executive officers and any person who,
individually or through a group, is deemed to control the bank. Members of a
family may be regarded as members of a group if, by acting in concert, they
would have the power to control the bank. "Control" may be evidenced by
ownership of 10% or more of the voting securities of the bank.
Certificates for shares of holding company stock received by an affiliate
in the reorganization will carry a legend referring to the resale restrictions.
Specifically, that legend will state:
The securities evidenced by this certificate may be offered and
sold only if registered pursuant to the provisions of the
securities act of 1933, as amended, or if an exemption from
registration is available.
The holding company will issue stop-transfer instructions to the holding
company transfer agent with respect to such certificates. Neither the bank nor
the holding company will register the shares of holding company stock for
resale, and any such registration will be at the expense and instance of any
shareholder desiring such registration.
7
<PAGE>
This Prospectus may not be used by an affiliate of the bank or the holding
company for the resale of holding company stock received pursuant to the
reorganization.
Tax Considerations
- ------------------
Corporate Income Tax. After the reorganization, the holding company will
own at least 80% of the outstanding stock of the bank. This will permit the
holding company to file a consolidated federal income tax return with the bank,
with the following results:
1. Any interest expense incurred by the holding company as an expense may
be deducted against the income of the bank.
2. Any dividend paid to the holding company by the bank on the shares of
the bank's capital stock held by the holding company would not be
taxable as income to the holding company.
3. The ability to file a consolidated federal income tax return may
increase the cash flow available to the holding company to meet its
obligations.
The State of Wisconsin does not permit consolidated income tax returns.
The creation of the holding company creates a separate taxpayer under the
Internal Revenue Code. The holding company, through its consolidated tax return
with the bank and any other subsidiaries that may be formed or acquired in the
future, will be required to pay federal and state income taxes on its net
income.
Immediately after the formation of the holding company, the principal
income to the holding company will be dividends from the bank. Those dividends
will not be taxable income to the holding company as long as the holding company
holds at least 80% of the outstanding bank stock. Therefore, until such time as
the holding company generates substantial income from sources other than bank
dividends, it is not anticipated that it will incur any significant tax
liability.
As a separate taxpayer, the holding company may incur a separate tax on any
liquidation of the holding company or on an acquisition of the holding company's
assets by a third party. Therefore, a liquidation of the holding company or a
sale of bank stock by the holding company could generate a double-level tax, a
tax on the holding company and a tax on the holding company shareholders. A
double-level tax can be avoided, however, if the third party acquires the
holding company stock for cash or acquires holding company stock or bank stock
in a tax-free reorganization.
Individual Income Tax. The holding company has been advised by its counsel,
Boardman, Suhr, Curry & Field LLP, Madison, Wisconsin, that as a result of the
transaction contemplated by the reorganization, for federal income tax purposes:
1. No gain or loss will be recognized to the bank shareholders on the
conversion of their shares of bank stock into shares of holding
company's common stock;
2. The income tax basis of the shares of holding company's common stock
in the hands of the bank shareholders will be the same as their basis
in the shares of the bank stock; and
3. The holding period of the shares of holding company's common stock in
the hands of the bank shareholders will include the holding period of
the shares of the bank stock, provided the shares of the bank stock
constituted a capital asset as of the time of the reorganization.
A copy of that opinion is attached to this prospectus as Exhibit B, which
opinion also includes matters pertaining to corporate tax consequences of the
reorganization. Counsel is also of the opinion that the same treatment will
apply for Wisconsin income tax purposes.
8
<PAGE>
No tax rulings from the Internal Revenue Service have been obtained, and
the opinion of counsel will not be binding on the Internal Revenue Service.
Therefore, shareholders may find it advisable to consult their own counsel as to
the specific tax consequences to them under the federal tax laws, as well as any
consequences under applicable state or local tax laws.
Shareholders who exercise dissenters' rights and receive cash for their
bank stock should be aware that the transaction will be a taxable transaction
for federal and state income tax purposes, and those shareholders are urged to
consult their tax advisors to determine the tax consequences to them under the
federal tax laws, as well as any consequence under applicable state or local tax
laws. The opinion of counsel attached as Exhibit B does not pertain to cash
payments received pursuant to the reorganization.
Securities Regulation
- ---------------------
The offer to enter into this reorganization is not being made to nor can it
be accepted from or on behalf of holders of bank stock in any jurisdiction in
which the making of the offer or the acceptance thereof would not be in
compliance with the securities laws of such jurisdiction. The holding company is
not, and will not be, obligated to acquire any shares of bank stock, or issue or
deliver any shares of its common stock, in any jurisdiction in which the
agreement to do so would not be in compliance with the securities laws of such
jurisdiction. However, the holding company, at its discretion, may take such
action as it may deem necessary or desirable to comply with the securities laws
of any such jurisdiction.
This transaction may be registered in certain states, according to the laws
of those states. No securities commissioner, securities department, or similar
office of any state has approved or disapproved the holding company stock to be
issued in the reorganization or has passed upon the accuracy or adequacy of this
Prospectus. Any representation to the contrary may be a criminal offense.
Expenses of Reorganization
- --------------------------
If the reorganization is consummated, the holding company and the bank will
assume and pay their respective costs and expenses, if any, incurred in
connection with the reorganization. If the reorganization is not consummated,
all costs and expenses will be paid by the bank. It is estimated that those
costs and expenses will be approximately $36,000.00.
Rights of Dissenting Stockholders of Bank
-----------------------------------------
Sections 221.0706 through 221.0718 of the Wisconsin Statutes, the full text
of which is attached to this prospectus - proxy statement as Exhibit C, set
forth the procedure to be followed by any shareholder of the bank who wishes to
dissent from the reorganization and obtain the value of his or her shares of
bank stock in cash in lieu of holding company stock pursuant to the
reorganization. Shareholders should refer to Exhibit C because the following
description does not purport to be a complete summary of those sections.
In order to exercise such dissenters' rights, a bank shareholder must:
o deliver to the bank before the vote is taken written notice of the
shareholder's or beneficial shareholder's intent to demand payment for
his or her shares if the proposed reorganization is effectuated, and
refrain from voting his or her shares in favor of the proposed
reorganization, and
o demand payment in writing and certify whether he or she acquired
beneficial ownership of the shares before the date specified in the
dissenters' notice.
The written demand must be received by the date stated in the dissenters'
notice, which may not be fewer than 30 days nor more than 60 days after the date
on which the dissenters' notice is delivered. That demand must be accompanied by
the surrender of the dissenting shareholder's bank stock certificates, and
should be addressed to: Warren E. Korte, President, Waumandee State Bank, P.O.
Box 959, County Road U, Waumandee, Wisconsin 54622-0959.
9
<PAGE>
The law does not provide for a dissent with respect to less than all of the
shares beneficially owned by a shareholder.
As soon as the reorganization takes place or upon receipt of a payment
demand, whichever is later, the bank will pay each shareholder or beneficial
shareholder who has complied with the demand requirements the amount that the
bank estimates to be the fair value of the dissenter's shares, plus accrued
interest. The payment will be accompanied by, among other things, the bank's
latest available financial statements, a statement of the bank's estimate of the
fair value of the shares, and an explanation of how the interest was calculated.
If the dissenter believes that the amount so paid is less than the fair
value of his or her shares or that the interest due is incorrectly calculated,
the dissenter may notify the bank of the dissenter's estimate of the fair value
of his or her shares and the amount of interest due, and demand payment of his
or her estimate, less any payment received. A dissenter waives his or her right
to demand payment unless the dissenter notifies the bank of his or her demand in
writing within 30 days after the bank makes or offers payment for the
dissenter's shares.
If a demand for payment remains unsettled, the bank will bring a special
proceeding within 60 days after receiving the dissenter's payment demand and
petition the court to determine the fair value of the shares and accrued
interest. If the bank does not bring the special proceeding within the 60-day
period, it will pay each dissenter whose demand remains unsettled the amount
demanded. Fees and costs of the court proceeding will be allocated by the court
pursuant to statutory guidelines.
Waumandee Bancshares, Ltd.
--------------------------
History, Business, and Properties
- ---------------------------------
The holding company was incorporated as a Wisconsin business corporation
under the Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin
Statutes in October, 1999, at the direction of the Board of Directors of the
bank. The holding company was formed to acquire the bank stock and to engage in
business as a bank holding company under the Bank Holding Company Act of 1956,
as amended. A true and correct copy of the Articles of Incorporation of the
holding company is attached to this prospectus-proxy statement as Exhibit D. A
complete copy of the holding company's bylaws will be provided to any bank
shareholder upon request.
The holding company is in the organizational and developmental stage, and
has no earnings or history of operation. The holding company has no employees,
no current business, and owns no property, except that the holding company will
own all of the stock of the new bank immediately prior to the reorganization. It
has not issued any stock. It is not a party to any legal proceedings.
The holding company has no present plans to engage in any activities other
than as a holding company for the capital stock of the bank. The holding
company's management, however, believes that the opportunities available to a
bank holding company for diversification of its business and raising of capital
cause the bank holding company to be a more advantageous form of operation than
a bank. The holding company may examine and may pursue opportunities from time
to time that arise for expansion of its operations and activities. See "The
Reorganization Reasons for The Reorganization."
Management
- ----------
The name, age and position of each of the Directors and executive officers
of the holding company are as follows:
Name Age Position
---- --- --------
Warren E. Korte 77 President/Director
C. Michael Chambers 49 Director
Paul R. Lorenz 45 Secretary/Treasurer/Director
Gary Pronschinske 46 Vice President/Director
Gerald Wojchik 56 Director
William Christ 39 Director
10
<PAGE>
A description of the business background of each of the directors and named
executive officers is set forth on pages 14 and 15. Each of the directors and
executive officers named has had the same principal occupation or employment for
the past five years. Each of the directors and executive officers named has
served in the capacity listed above since the incorporation of the holding
company in October, 1999. The term of office for each of the directors is one
year. The term of office for each of the executive officers named above is one
year.
Principal Shareholders
- ----------------------
After the reorganization, the persons beneficially owning 5% or more of
holding company common stock will be the same persons who currently own 5% or
more of the bank stock. See "Waumandee State Bank - Principal Shareholders."
Description of Holding Company's Common Stock
- ---------------------------------------------
The holding company's authorized capital stock consists of 1,200 shares,
all of one class, designated as common stock, none of which shares, as of the
date hereof, is issued or outstanding. The maximum number of shares of the
holding company's common stock which will be issued to the holders of bank
stock, upon the terms and subject to the conditions of the reorganization, is
1,080 shares.
For more information about the holding company's common stock, see
"Comparison of Bank Stock With Holding Company Stock."
Executive Compensation
- ----------------------
Since its incorporation, the holding company has not paid any remuneration
to any of its directors or executive officers. No changes in remuneration to any
of its directors or officers are planned. To date the holding company has not
established standards or other arrangements by which its directors are
compensated for services as directors, including any additional amounts payable
for committee participation or special assignments, and no such arrangements are
currently contemplated. No profit-sharing plan or any other benefit plan exists
or is contemplated for the holding company.
Transactions with Related Parties
- ---------------------------------
The holding company has not engaged in any transactions or entered into any
contracts with any of its directors or executive officers. No such transactions
or contracts are anticipated at this time by the holding company.
Antitakeover and Indemnification Provisions
- -------------------------------------------
Antitakeover Provisions. If a shareholder wishes to transfer any of his or
her stock, the holding company's Articles of Incorporation give the holding
company a right of first refusal and a right of redemption with respect to that
stock. These provisions are explained below. Transactions between a shareholder
and his or her spouse or children, including stepchildren, are not subject to
these limitations on transfer, although the stock so transferred remains subject
to the right of first refusal and the right of redemption.
Right of First Refusal. The holding company has a right of first refusal to
purchase shares of its stock at a price and on the terms and conditions offered
to a shareholder by a prospective purchaser. The right of first refusal may
limit a shareholder's ability to sell shares to purchasers other than the
holding company. In addition, the right of first refusal may reduce the
likelihood of another buyer obtaining control of the holding company through the
acquisition of large blocks of holding company stock. The bank's articles and
bylaws do not contain a comparable provision. See "Comparison of Bank Stock With
Holding Company Stock - Market for the Stock."
Right of Redemption. If a shareholder wishes to transfer shares to a person
or entity other than the shareholder's spouse or children in a transaction that
does not involve a sale of the shares, the holding company has the right to
redeem the shares for consideration as determined by the formula contained in
11
<PAGE>
Article VI, Sec. 4 of the Bylaws of the holding company. This formula currently
is 96% of the book value of the shares. A copy of Article VI, Sec. 4 of the
Bylaws of the holding company, which contains the price formula, is attached to
this prospectus-proxy statement as Exhibit E. The right of redemption may limit
a shareholder's ability to transfer shares to anyone other than the holding
company and the shareholder's spouse or children. In addition, the right of
redemption may reduce the likelihood of another individual or entity obtaining
control of the holding company through the acquisition of large blocks of
holding company stock. The bank's articles and bylaws do not contain a
comparable provision. See "Comparison of Bank Stock With Holding Company Stock -
Market for the Stock."
In addition, the Articles of Incorporation provide that the provisions of
the Articles of Incorporation providing the holding company with a right of
first refusal and a right of redemption may be amended only by the affirmative
vote of not less than 75% of the outstanding shares of voting stock of the
holding company.
Indemnification Provisions. As set forth in Sections 180.0850 through
180.0859 of the Wisconsin Statutes, the bylaws of the holding company require
that the holding company indemnify a director or officer from all reasonable
expenses and liabilities asserted against, incurred by, or imposed on that
person in any proceeding to which he or she is made or threatened to be made a
party by reason of being or having been an officer or director of the holding
company. Indemnification will not be made if the person breached a duty to the
holding company in one of the following ways: (a) a wilful failure to deal
fairly with the holding company in a matter in which the director or officer has
a material conflict of interest; (b) a violation of criminal law, unless the
person had reasonable cause to believe his or her conduct was lawful or had no
reasonable cause to believe his or her conduct was unlawful; (c) a transaction
from which the person derived improper personal profit; or (d) wilful
misconduct. The right to indemnification includes, in some circumstances, the
right to receive reimbursement of costs and expenses in such a proceeding as
they are incurred.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be available to directors, officers, and controlling
persons of the holding company pursuant to the foregoing provisions of its
bylaws, or otherwise, the holding company has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act.
The holding company may purchase insurance against liabilities asserted
against its directors, officers, employees, or agents whether or not it has the
power to indemnify them against such liabilities under the provisions of its
bylaws or pursuant to applicable law. Indemnification insurance for directors,
officers, employees, and agents of the holding company has not been purchased
either by such persons or by the holding company.
Waumandee State Bank
--------------------
History, Business, and Properties
- ---------------------------------
The bank was chartered by the Wisconsin Commissioner of Banking in 1914.
The bank offers comprehensive banking services to the residential, commercial,
industrial, and agricultural areas that it serves. Services include
agricultural, commercial, real estate and personal loans; checking, savings, and
time deposits; and other customer services, such as safe deposit facilities. The
bank also offers alternative investments and individual retirement accounts. The
bank's loan portfolio, as of September 30, 1999 consisted of approximately 10%
consumer loans, 9% commercial loans, 51% agricultural loans, and 30% real estate
loans.
The general banking business in the State of Wisconsin is characterized by
a high degree of competition. The principal methods of competition among
commercial banks are price (including interest rates paid on deposits, interest
rates charged on borrowings, and fees charged) and service (including
convenience and quality of service rendered to customers). In addition to
competition among commercial banks, banks face significant competition from
non-banking financial institutions, including savings and loan associations,
credit unions, small loan companies, and insurance companies.
There is one commercial bank located in Waumandee. The bank's competition
comes from this institution and others located near Waumandee. Insurance
companies, mortgage bankers, and brokerage firms provide additional competition
for certain banking services. The bank also competes for interest-bearing funds
with issuers of commercial paper and other securities, including the United
States Government.
12
<PAGE>
There are no pending or threatened legal proceedings known to the bank
that, in the opinion of the directors and officers of the bank, may be
materially adverse to the bank's financial condition, business, or operations.
There are no material pending or threatened legal proceedings known to the bank
in which any director, executive officer, or affiliate of the bank (or any
associate of any of them) has a material interest that is adverse to the bank.
The bank's office is located at P.O. Box 959, County Road U, Waumandee, WI
54622-0959, in a facility built in 1914 and subsequently expanded and remodeled.
On September 30, 1999 the bank's staff included 3 officers and 3 full-time
employees. There are a total of 81 shareholders of the bank.
Year 2000 Readiness Disclosure
- ------------------------------
A critical issue has emerged for the economy regarding how existing
application software programs and operating systems can accommodate the date
value for the year 2000. Many existing application software products in the
marketplace were designed only to accommodate a two-digit date position which
represents the year. For example, "98" is stored on the system and represents
the year 1998. As a result, the year 1999, represented as "99", could be the
maximum date value these systems will be able to accurately process. The same
issue has emerged for non-information technology systems. These systems
typically include embedded technology such as micro-controllers which must be
either repaired or, if this is not possible, replaced.
Bank management is fully aware of the Year 2000 issue for both information
technology and non-information technology systems and has created a written
readiness plan for the correction of, or contingency plan for, the Year 2000
problem. The Board of Directors oversees the bank's Year 2000 efforts and has
directed the senior management to report to the board at least monthly on the
progress of the Year 2000 company action plan. The company action plan is
divided into five phases as follows:
a. Awareness Phase. The Board of Directors, senior management, officers and
staff of the bank have been made aware of the nature and magnitude of the Year
2000 problem. A Year 2000 committee has been appointed to solve this issue. A
customer awareness program has been instituted with the bank. The bank believes
that the awareness phase is 100 percent complete.
b. Assessment Phase. The Year 2000 committee has inventoried all equipment
within the bank and all items by risk and criticality to the operations of the
bank. Based on this risk assessment, the committee has developed a mission
critical list of items deemed necessary for bank operations. To assess the
possibility that material third parties, such as utilities and outside
suppliers, that supply products and services the bank relies on will not be Year
2000 compliant, the committee has contacted all such outside material third
parties and has received their Year 2000 plans on their products. The bank has
also assessed the risk that the bank's loan customers will not be Year 2000
compliant, which could affect their ability to repay. The bank believes that the
assessment phase is 100 percent complete.
c. Renovation Phase. The bank completed the process of renovating or
replacing internal systems that are deemed non-compliant as well as tracking all
outside software and hardware vendors with their Year 2000 plans to ensure that
all of the bank's mission critical systems were Year 2000. The bank believes
that the renovation phase is 98 percent complete.
d. Validation Phase. The Board of Directors approved a written plan for
testing which requires that all hardware and software testing be substantially
completed by December 31, 1998. The bank believes that the validation phase is
100 percent complete.
e. Implementation Phase. The bank anticipates that all of its mission
critical systems have been Year 2000 compliant since April, 1999. The bank
believes that the implementation phase is 100 percent complete.
13
<PAGE>
Waumandee State Bank Year 2000 budget as follows:
To Date Projected Total
------- --------- -----
Hardware Replacement $4,200.00 -0- $4,200.00
Software Replacement $1,800.00 -0- $1,800.00
Software Upgrade None None None
Education of Problem $3,600.00 $1,600.00 $5,200.00
TOTALS $11,200.00
Note: Hardware costs capitalized over a 5 year period
Software costs capitalized over a 3 year period
Bank management does not believe that these expenditures will have a material
impact on the bank's financial condition.
Bank management believes that the risks posed by the Year 2000 problem are
manageable and correctable. Outside vendors will be able to provide different
software products if the current products the bank is using will not be Year
2000 compliant. However, the bank has a contingency plan in place in the event
its computer systems are unable to adequately address the Year 2000 problem.
The principal area of concern for the bank in its contingency plan is core
data processing. The bank's outside data processor has developed and tested its
systems to ensure Year 2000 compliance. The bank has been monitoring and will
continue to monitor the processor's testing and compliance.
In the event of a failure and in the event the remediation efforts are not
successful, the bank will maintain a manual system. Most of the Bank's employees
have been employed with the bank since the bank had a manual system in place
(around 1981), so most know how to run a manual system. The bank has maintained
its manual equipment over the years in anticipation of the year 2000. Bank
management has had, and will continue to have, employee meetings to educate
employees regarding manual processing.
The bank can run on this system for no more than 30 days. The functionality
of such a system would be minimal at best, but would insure continued operation
of the institution.
Although the bank believes that the foregoing illustrations are its
reasonable worst case scenarios and the contingency plans will satisfy those
Year 2000 problems, there can be no assurance that another worst case scenario
will not materialize or that the contingency plan for such scenario will be
sufficient. Therefore, the bank cannot predict with any certainty the effect of
the Year 2000 problem on the bank's results of operations, liquidity, and
financial condition. In addition, the bank does not know whether there will be
any material lost revenue as a result of the Year 2000 problem, although bank
management does not believe that the financial impact to the bank to ensure Year
2000 compliance will be material to the financial position, results of
operations or cash flow of the bank.
The Federal Deposit Insurance Corporation is reviewing all the bank's Year
2000 efforts and may issue formal supervisory or enforcement actions if the
Federal Deposit Insurance Corporation believes that the bank's efforts to date
have not been satisfactory. The bank has not received any such communication
from the Federal Deposit Insurance Corporation. The bank continues to study the
problem and implement possible solutions.
Management
- ----------
The name, age and position of each of the Directors and executive officers
of the bank are as follows:
14
<PAGE>
Name Age Position
- ---- --- --------
Warren E. Korte 77 President/Director
C. Michael Chambers 49 Director
Paul R. Lorenz 45 CEO/Cashier
Gary Pronschinske 46 Vice President/Director
William M. Christ 40 Director
Gerald Wojchik 56 Director
The term of office for all directors is one year. The directors are elected
at the annual meeting of the shareholders of the bank. All executive officers
are appointed to their respective positions for a one-year period by the Board
of Directors at the annual meeting of the bank.
Business Background of Directors and Executive Officers
- -------------------------------------------------------
Warren E. Korte, President and Director. Mr. Korte, President of the bank,
has resided his whole life in Buffalo County, WI. He began working for the bank
in 1940, and he retired from active employment in the bank in December 1984. He
is an active member of the Board and of the community.
C. Michael Chambers, Director. In 1968, Mr. Chambers graduated from East
Lansing High School. In 1972, he received a Bachelor of the Arts from Marquette
University, and in 1976, he received his Juris Doctor from the Marquette
University Law School. He has worked as an attorney from the time of his
graduation in 1976 until the present. From 1976 to 1983, he worked with the law
firm of Whelan, Morey, Ricci, Chambers & Oesterreicher, and from 1983 until
today, he has worked as a sole practitioner with the C. Michael Chambers Law
Offices. He has been a member of the Wisconsin, American and Tri-County Bar
Associations since 1976, and he was elected President of the Tri-County Bar
Association in 1998. Over the years, he has served on a number of Wisconsin
State Bar Association Committees. He has been a director of the bank since 1997.
Paul R. Lorenz, CEO/Cashier. Mr. Lorenz graduated from Marquette High
School in 1972. In 1976, he graduated from St. Mary's University in Winona,
Minnesota, with Bachelor of the Arts degrees in Business Administration,
Economics, Theology and Philosophy. In 1990, he attended the Graduate School of
Banking at Madison, Wisconsin. From 1979 through 1981, he worked as a loan
officer for Sprague National Bank, Caledonia, Minnesota, and from 1981 to the
present, he has worked for Waumandee State Bank. Active in the community, Mr.
Lorenz is a member of the Farm Bureau of Wisconsin, and he currently serves as
the President of the Buffalo County Conservation Club.
Gary Pronschinske, Vice President/Director. A director of the bank since
1995, Mr. Pronschinske graduated from Arcadia Public High School in 1971. Until
1978, he worked as a milk route and over the road truck driver. In 1978, he
graduated from the Western College of Auctioneer in Billings, Montana. At the
end of 1978, he purchased a 180 acre dairy farm in the township of Belvedere,
which he successfully managed and operated until he sold the dairy cows in 1998.
He is presently raising dairy replacement cattle and crop farming. Since 1986,
he has also worked as a livestock auctioneer and cattle appraiser. He currently
serves as a director of the Arcadia Coop Board and the Buffalo Electric Coop. He
is also a 28 year member of the Knights of Columbus and a 20 year member of the
Buffalo County Farm Bureau.
William M. Christ, Director. Mr. Christ became a director of the bank in
1999. Mr. Christ is the owner of a 60 cow dairy farm, on which he raises
holstein steers. In 1979, he graduated form Western Wisconsin Technical College
with a degree in Farm Business Management. Also in 1979, he began working for
his father on the family farm. In 1992, he purchased the farm from his father.
Active in community affairs, Mr. Christ is currently the President of the
Waumandee Trailblazers, Vice President of the Garden Valley Coop Board, and has
served as Waumandee First Responder for the past fifteen years.
Gerald Wojchik, Director. Mr. Wojchik was born in Arcadia, WI. in 1943. In
1962, he graduated from Cochrane-Fountain City High School, and he served as a
member of the National Guard from 1962 until 1968. In 1964, Mr. Wojchik
purchased a dairy farm in Waumandee township, and he has been a dairy farmer
until present day. He has served on the town board and also as a director of
Garden Valley Coop. In addition, he was a volunteer fireman for 15 years, and
taught hunter safety. He has been a director of the bank since 1993.
15
<PAGE>
Executive Compensation
- ----------------------
The following table outlines the aggregate annual compensation for the
bank's President and CEO for services rendered in their capacity as President
and CEO of the bank for the last three completed fiscal years. No individual had
a total salary and bonus in excess of $100,000 annually during the last three
fiscal years. For purposes of this table, "salary" includes salary only, and the
amounts listed for 1999 are projected totals.
Summary Compensation Table
--------------------------
Name and Principal Position Year Salary ($) Bonus ($)
- --------------------------- ---- ---------- ---------
Paul R. Lorenz, CEO 1999 $67,000 $4,480
Paul R. Lorenz, CEO 1998 $64,000 $4,480
Paul R. Lorenz, CEO 1997 $64,000 $4,000
Paul R. Lorenz, CEO 1996 $60,000 $4,000
Director Compensation
- ---------------------
Directors receive approximately $4,480 annually for their services.
Board Review of Management Compensation
- ---------------------------------------
The entire Board of Directors reviews and determines the compensation for
the officers of the bank.
Principal Shareholders
- ----------------------
The following table sets forth certain information regarding the beneficial
ownership of the bank's common stock as of the date of this prospectus-proxy
statement, by:
o each person who is known to the bank to own beneficially more than
five percent (5%) of the bank's outstanding stock;
o each of the bank's Directors;
o each of the bank's executive officers; and
o all Directors and executive officers of the bank as a group.
"Beneficial Ownership" is defined below. The address of each director and
executive officer is P.O. Box 959, County Road U, Waumandee, Wisconsin
54622-0959.
Number of Shares Percentage of Shares
Name(1) Beneficially Owned Beneficially Owned
- ------- ------------------ ------------------
Warren E. Korte 10 *
C. Michael Chambers 5 *
Paul R. Lorenz 53 4.91%
Gary Pronschinske 15 *
William M. Christ 0 -0-
Gerald Wojchik 25 2.31%
--- -------
Directors and Officers
as a Group 108 10%
*less than 1%
16
<PAGE>
Romelle Berzinski(1) 78 7.22%
Jeanette Senty (2) 63 5.83%
Betty J. Rosenow (3) 103 9.54%
Lloyd Sendelbach (4) 90 8.33%
(1) Ms. Berzinski's address is 1223 Wilson Avenue, Arcadia, Wisconsin 54612.
(2) Ms. Senty's address is 35798 Silver Drive, Independence, Wisconsin 54747.
(3) Ms. Rosenow's address is W760 County Road EE, Cochrane, Wisconsin 54622.
(4) Mr. Sendelbach's address is 520 South Theisen Street, Arcadia, Wisconsin
54612.
"Beneficial ownership" is determined in accordance with Securities and
Exchange Commission Rule 13d-3, which generally provides that an individual is
considered to beneficially own any stock held by his or her spouse, children or
relatives who share the same home as the individual, and stock over which the
individual exercises voting or investment control for example, as trustee of a
trust or as president of a corporation.
Description of the Stock of the Bank
- ------------------------------------
As of the date of this prospectus-proxy statement, the bank is authorized
to issue 1,200 shares of common stock, all of one class, of which 1,080 shares
are issued and outstanding. The bank has approximately 81 shareholders of
record. For further information about the stock, see "Comparison of Bank Stock
With Holding Company Stock."
Transactions with Related Parties
- ---------------------------------
The bank has had in the ordinary course of business, and will continue to
have in the future, banking transactions such as personal and business loans
with its directors, officers, and/or the owners of more than ten percent of the
bank and holding company stock. Such loans are now and will continue to be on
the same terms, including collateral and interest rate, as those prevailing at
the same time for comparable transactions with others of similar credit standing
and do not and will not in the future involve more than normal risks of
collectibility or present other unfavorable features.
At no time during 1996, 1997, 1998 and 1999 did or has the maximum
aggregate direct and indirect extensions of credit to any director, executive
officer or 10% shareholder, and to his or her respective related interest,
exceeded fifteen percent (15%) of the bank's capital. From time to time, the
bank has entered into nonbanking business transactions with entities with which
some of its directors are affiliated. Those transactions have been at arm's
length and have been at competitive prices.
Indemnification of Directors and Officers
- -----------------------------------------
Wisconsin law governing indemnification of the bank's directors, officers,
and employees is substantially similar to the law governing indemnification of
the holding company's directors, officers, and employees. Expenses of an officer
or director in such a proceeding may be advanced based upon her or his agreement
to repay such expenses if it is determined that he or she is not entitled to
indemnification. If the officer or director is successful on the merits his
expenses shall be paid; otherwise indemnification can only be made upon a
showing that he or she met the applicable standard of conduct as determined by a
court, a quorum of disinterested directors, by independent legal counsel, or by
the shareholders. For a brief discussion of that law, see "Waumandee Bancshares,
Ltd. - Right of First Refusal and Indemnification Provisions."
The bank has purchased insurance insuring the bank, its directors and
officers, against liabilities asserted against its directors and officers
subject to certain conditions and limitations.
Shares of the Stock Owned or Controlled by Management
- -----------------------------------------------------
As of the date of this prospectus-proxy statement, the executive officers
and directors of the bank own or control, directly or indirectly, 108 shares, or
approximately 10% of the total bank stock outstanding.
17
<PAGE>
The holding company has no knowledge or information as to the existence of
any contract, arrangement, or understanding among the above-named persons with
respect to the shares of the bank stock. To the knowledge of the holding company
no person above named has any material interest in the transaction proposed by
the reorganization, direct or indirect, other than in their status as
shareholders.
Recommendation of the Bank's Board of Directors
- -----------------------------------------------
The Board of Directors of the bank recommends that all shareholders vote to
approve the reorganization. The decision of the Board of Directors of the bank
to recommend the reorganization to the shareholders is based on their belief
that the bank's affiliation with the holding company is in the best interest of
the bank and its shareholders.
Such belief is based on a number of factors, including recent and
historical transactions in the bank's capital stock, the Board of Directors'
knowledge of the business, operations, properties, assets, earnings and
prospects of the bank, and the advantages provided by a holding company
corporate organizational structure. The advantages provided by the holding
company structure are as follows:
o The holding company can purchase its own stock from shareholders.
Therefore, it can provide a potential market for the stock of the
holding company. State banks are severely restricted in their ability
to purchase their own stock from shareholders. This is the single most
important advantage to a bank holding company.
o The holding company will be able to respond efficiently to changes in
the law governing banks and financial activities.
o The holding company will enable the bank to continue under local
ownership and control.
o Although the Board of Directors has no intention of acquiring other
banks at this time, the holding company will be able to more easily
acquire other banks and operate them as branches of Waumandee State
Bank or as separate banks in areas not now served by Waumandee State
Bank.
o The holding company will be able to meet future bank capital needs by
having the holding company take out loans which are repaid by
nontaxable bank dividends.
o It will allow the holding company and bank to compete more effectively
with other bank holding companies.
The Board of Directors of the bank did not attach a relative weight to the
factors it considered in reaching its decision, but considering all factors made
the determination to recommend the reorganization to the shareholders. See "The
Reorganization - Reasons for The Reorganization" for a thorough discussion of
the factors that the Board relied upon in making its recommendations.
Recent Stock Purchase From Significant Shareholder
- --------------------------------------------------
On December 10, 1999, the bank purchased 120 shares of its outstanding
stock (10%) from one shareholder. In accordance with applicable law, the bank
received prior approval from the Federal Deposit Insurance Corporation to do so.
The purchase price for the shares was $508,800. The purchase price was based on
an outside valuation made specifically for the purpose of purchasing the 120
shares. The outside professional appraiser determined that the fair value of the
120 shares as of June 30, 1999 was approximately 96% of the book value of the
shares, or $4,162 per share. The bank intends to hold the repurchased shares at
the bank as authorized but unissued shares. The shares will not be sold to the
holding company in the reorganization process.
Financial Statements
- --------------------
Financial statements prepared in conformity with generally accepted
accounting principles and dated December 31, 1998 and September 30, 1999,
accompany this prospectus-proxy statement.
18
<PAGE>
Comparison of Bank Stock
With Holding Company Stock
--------------------------
Authorized Shares
- -----------------
The bank is authorized to issue 1,200 shares of capital stock, all of one
class, designated as common stock, of which 1,080 shares are issued and
outstanding. The holding company is authorized to issue 1,200 shares of capital
stock, all of one class, designated as common stock. No holding company stock
has been issued. Either the bank or the holding company could increase the
amount of authorized stock at any time by an amendment to its Articles of
Incorporation approved by its shareholders.
The holding company will issue 1,080 shares in the reorganization.
Voting Rights
- -------------
Each share of bank stock has one vote on all matters presented to the
shareholders of the bank. Each act by the shareholders of the bank requires a
majority vote, except as otherwise provided in the articles of incorporation,
by-laws or by law. The bank by-laws require a two-thirds majority in order to
amend either the articles of incorporation or the by-laws. Similarly, each share
of the holding company stock has one vote on all matters presented to the
shareholders of the holding company. Each act by the shareholders of the holding
company requires a majority vote, except as otherwise provided by the articles
of incorporation or law. The holding company articles require a 75% affirmative
vote in order to amend, alter, or repeal the provisions of the holding company's
articles of incorporation relating to the holding company's right of first
refusal and right of redemption.
There are many similarities in the voting requirements imposed by the
Wisconsin banking laws as compared to the Wisconsin general corporate laws. For
example, under both the Wisconsin Banking Law and the Wisconsin Business
Corporation Law, a vote of the majority of the outstanding stock can amend the
articles of incorporation, except as otherwise provided by the holding company's
or bank's articles of incorporation.
All of the directors of the bank are elected at each respective annual
meeting. Currently, the shareholders of the bank elect the bank's Board of
Directors at the bank's annual meeting of shareholders held the second Thursday
succeeding the first Monday of July. Bank shareholders exercise direct control
over the bank's affairs by election of the bank's directors and by the right to
vote on other bank matters from time to time. Bank directors may be removed by
the affirmative vote of a majority of the outstanding shares entitled to vote
for the election of such director, taken at a special meeting called for that
purpose.
If the proposed reorganization is consummated, the shareholders who receive
holding company stock will elect the holding company Board of Directors. The
Board of Directors of the holding company will initially consist of six members.
The holding company's directors will be elected annually by the shareholders of
the holding company.
The officers of the holding company will be elected annually by the holding
company Board of Directors. The officers of the holding company will vote the
shares of bank stock held by the holding company, and therefore will elect the
bank Board of Directors, acting pursuant to the instructions of the Board of
Directors of the holding company.
There is no requirement that the Boards of the bank and of the holding
company be identical. Shareholders of the holding company will exercise direct
control over the holding company by election of the holding company directors
and by other voting rights, and therefore will exercise indirect control over
the bank. The direct control of the bank stock will be exercised by the holding
company Board of Directors, who are obligated to act in the best interests of
the holding company shareholders.
19
<PAGE>
Dividends
- ---------
The bank has paid cash dividends on its common stock each year since 1984,
and expects to continue to pay dividends in the future. Recent dividends have
been as follows:
Dividend
Year Paid Per Share
--------- ---------
1994 $25.00
1995 $25.00
1996 $25.00
1997 $25.00
1998 $35.00
1999 $35.00
It is the intention of the Board of Directors of the holding company to pay
cash dividends on its common stock at least annually. Substantially all of the
holding company's assets will consist of its investment in the bank, and
immediately after the reorganization the availability of funds for dividends to
be paid by the holding company will depend primarily upon the receipt of
dividends from the bank. Dividends of the holding company will also be dependent
on future earnings, the financial condition of the holding company and its
subsidiaries, and other factors.
Whether the dividends, if any, paid by the holding company in the future
will be equal to, less than, or more than the dividends paid by the bank in the
past cannot be predicted. However, it is unlikely that dividends paid by the
holding company in the initial few years of operation would be significantly
larger than the dividends paid by the bank in prior years. If the holding
company incurs indebtedness, such as a loan to purchase holding company stock,
bank dividends received by the holding company will be applied toward that
indebtedness, at least in part, rather than be paid to holding company
shareholders as dividends from the holding company.
Under the Wisconsin Banking Law, the Board of Directors of a bank may
declare and pay a dividend from its undivided profits in an amount they consider
expedient. The Board of Directors shall provide for the payment of all expenses,
losses, required reserves, taxes, and interest accrued or due from the bank
before the declaration of dividends from undivided profits. If dividends
declared and paid in either of the two immediately preceding years exceeded net
income for either of those two years respectively, the bank may not declare or
pay any dividend in the current year that exceeds year-to-date net income except
with the written consent of the Department of Financial Institutions Division of
Banking.
A bank's dividends may not in any way impair or diminish the capital of the
bank other than by reducing undivided profits. If a dividend is paid that does
not comply with this limitation, every shareholder receiving the dividend is
liable to restore the full amount of the dividend unless the capital is
subsequently made good. If the Board of Directors of a bank pays dividends when
the bank is insolvent or in danger of insolvency, or not having reason to
believe that there were sufficient undivided profits to pay the dividends, the
members of the Board of Directors are jointly and severally liable to the
creditors of the bank at the time of declaring dividends in an amount equal to
twice the amount of the dividends.
Federal regulators have authority to prohibit a bank from engaging in any
action deemed by them to constitute an unsafe or unsound practice, including the
payment of dividends. In addition to the foregoing, Wisconsin business
corporations such as the holding company are prohibited by Wisconsin law from
paying dividends while they are insolvent or if the payment of dividends would
render them unable to pay debts as they come due in the usual course of
business.
Market for the Stock
- --------------------
In General: As of the date of this prospectus-proxy statement, the bank had
81 shareholders of record. No established public trading market exists for the
bank stock. The stock is infrequently traded, and the current market for the
stock is limited. The bank is prohibited by law from holding or purchasing more
than 10% of its own shares except in limited circumstances.
20
<PAGE>
Similarly, there will be no established public trading market for holding
company stock. Unlike the bank, however, the holding company will generally be
able to purchase its own shares. In some circumstances, a bank holding company
may not purchase its own shares without giving prior notice to the Federal
Reserve Board. Specifically, if the holding company desires to purchase as much
as 10% in value of its own stock in any 12-month period, it may be required in
some instances to obtain approval for so doing from the Federal Reserve Board.
Otherwise, the holding company is restricted by sound business judgment, its
prior commitments, and the consolidated financial condition of the holding
company and its subsidiaries. In no event may a Wisconsin corporation purchase
its own shares when the corporation is insolvent or when such a purchase would
make it insolvent.
Although the holding company may generally, in the Board's discretion,
purchase shares of its stock, it is not obligated to do so.
Antitakeover Provisions. If a shareholder wishes to transfer any of his or
her shares of holding company stock, then pursuant to Article 5(b) of its
Articles of Incorporation, the holding company has a right of first refusal and
a right of redemption with respect to those shares. These rights do not apply to
a transfer between a shareholder and:
1. His or her spouse; or
2. Children, including stepchildren.
However, if a shareholder does transfer stock to a spouse or child, the
recipient of the stock will be bound by all of the transfer restrictions
contained in Article 5(b).
Shareholders should refer to Article 5(b) of the Articles of Incorporation,
attached as Exhibit D. The following description does not purport to be a
comprehensive statement of the terms of the holding company's right of first
refusal and right of redemption.
Right of First Refusal. If a shareholder wishes to sell any shares of stock
to a person or entity other than his or her spouse or children, including
stepchildren, without first obtaining the written consent of the holding
company, the holding company will have a right to redeem the shares at the price
and on the terms and conditions offered by the prospective purchaser. The
holding company is not obligated to make any purchases of the holding company
stock, but may do so at the discretion of its Board of Directors.
The right of first refusal operates as follows:
1. The shareholder that wants to sell his or her shares must give the
holding company written notice of his or her intent to do so, stating:
o The identity of the proposed purchaser of the shares,
o The number of shares the shareholder proposes to sell,
o The proposed consideration for the shares, and
o The other terms and conditions of the proposed sale of the
shares.
2. The shareholder must give the holding company a copy of the written
offer.
3. The holding company has a right of first refusal to acquire all, but
not less than all, of the shares to be sold for the consideration and
on the other terms and conditions offered by the proposed purchaser.
These terms and conditions must be contained in the written notice
given to the holding company by the shareholder.
21
<PAGE>
4. The holding company must exercise its right to acquire the shares to
be disposed of by giving written notice to the shareholder within
forty-five (45) days following receipt of the written notice from the
shareholder.
5. If the holding company does not exercise its acquisition rights within
that time period, the shareholder will be free for forty-five (45)
days to sell all of the shares to be disposed of to the purchaser
identified in the written notice to the holding company, at the same
consideration and on the same terms and conditions set forth in the
notice.
The Right of Redemption. If a shareholder wishes to transfer any shares of
stock to a person or entity other than his or her spouse or children, including
stepchildren, in a transaction that does not involve a sale of the shares, the
holding company will have a right to redeem the shares for consideration as
determined by the formula contained in Article VI, Sec. 4 of the Bylaws of the
Corporation. The holding company is not obligated to make any purchases of the
holding company stock, but may do so at the discretion of its Board of
Directors.
The right of redemption operates as follows:
1. The shareholder that wants to dispose of his or her shares must give
the holding company written notice of his or her intent to do so,
stating:
o The identity of the proposed transferee of the shares, and
o The number of shares the shareholder proposes to transfer.
2. The holding company has a right of first refusal to redeem all, but
not less than all, of the shares to be disposed of for consideration
as determined by the formula contained in Article VI, Sec. 4 of the
Bylaws of the holding company.
3. Currently, the formula is as follows:
o The purchase price shall be 96% of the book value of the shares.
o "Book value" is defined as stockholder equity in the bank, plus
any unrealized losses and minus any unrealized gains on
securities held in the available for sale account of the bank.
Book value shall be determined as of the end of the most recent
calendar quarter preceding the notice of redemption from the
Corporation.
o A copy of Article VI, Sec. 4 of the Bylaws of the holding
company, which contains the price formula, is attached to this
prospectus-proxy statement as Exhibit E.
4. The holding company must exercise its right to redeem the shares to be
disposed of by giving written notice to the shareholder within
forty-five (45) days following receipt of the written notice from the
shareholder.
5. If the holding company does not exercise its redemption right within
that time period, the shareholder will be free for forty-five (45)
days to transfer all of the shares to be disposed of to the transferee
identified in the written notice to the holding company.
Provisions Applicable to Both the Right of First Refusal and the Right of
Redemption. The following provisions apply to both the holding company's right
of first refusal and right of redemption:
1. After giving notice of the intended transfer, the shareholder may not
participate as an officer, director or shareholder of the holding
company with respect to the holding company's decision on whether or
not to acquire the shares to be disposed of, unless requested by the
22
<PAGE>
other shareholders holding a majority of the holding company's
outstanding shares of stock, not including the shares held by the
transferring shareholder.
2. As a condition precedent to the effectiveness of any transfer of
holding company shares, the transferee must agree in writing to be
bound by all of the terms and conditions of the holding company's
right of first refusal and right of redemption.
Each certificate representing shares of holding company stock shall bear a
legend in substantially the following form:
"The shares represented by this certificate and any sale,
transfer, or other disposition thereof are restricted under
and subject to the terms and conditions contained in Article
5 of the Corporation's Articles of Incorporation, a copy of
which is on file at the offices of the Corporation."
The provisions of the holding company's Articles of Incorporation relating
to this right of first refusal and right of redemption may not be amended,
altered or repealed except by the affirmative vote of the holders of at least
75% of the shares of holding company stock.
Potential Antitakeover and Other Effects. The holding company's right of
first refusal and right of redemption may reduce the ability of third parties to
obtain control of the holding company. In particular, the holding company's
right to match the price offered by a prospective buyer might make acquisitions
of large blocks of holding company stock by other buyers more difficult. These
rights might also discourage tender offers, proxy contests, or other attempts to
gain control of the holding company through the acquisition of voting stock.
Shareholders who might support the takeover of the holding company in a given
situation could only amend, alter or repeal the right-of-first-refusal provision
by obtaining an affirmative vote of 75% of the issued and outstanding shares.
Because of these effects, these provisions may limit shareholder participation
in transactions such as tender offers.
Whether the right of first refusal and right of redemption serve as an
advantage to management or to shareholders depends on the particular
circumstances. In a hostile tender offer, for example, members of management and
shareholders who support the present ownership may benefit from the provision,
while shareholders that want to participate in the tender offer might be
disadvantaged.
Reasons for the Right of First Refusal and the Right of Redemption. The
Boards of Directors of the holding company and the bank believe that giving the
holding company a right of first refusal and a right of redemption is in the
best interests of the holding company and its shareholders and the bank. One of
the purposes of forming a holding company for the bank is to enable the bank to
continue under local control. The proposed rights effectuate this purpose by
providing a mechanism for assuring local control of the holding company and the
bank.
The proposal is not the result of bank management's knowledge of any
specific effort to obtain control of the bank by means of a merger, tender
offer, solicitation in opposition to management or otherwise. Nevertheless, the
Boards of Directors are concerned that, without these provisions, local control
of the bank may not be achieved over the long term.
Value
- -----
As of June 30, 1999, the per share book value of the bank stock, according
to an outside valuation of the stock, was $4,599.73.
To the best knowledge of the bank, there have been 27 different transfers
of bank stock, involving a total of 194 shares of bank stock, between February,
1995 and the date of this prospectus-proxy statement.
The following is a listing of sales of bank stock known to the bank since
February 1, 1995.
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DATE SHARES PRICE PER SHARE
---- ------ ---------------
09/30/97 40 $1,031.00
09/30/97 40 $1,031.00
12/10/99 120 $4,240.00(1)
(1) The purchase price was based on an outside valuation made specifically for
the purpose of purchasing the 120 shares.
One of the 09/30/97 sales listed above actually involved a sale of stock by
the bank to seven different individuals. The 12/10/99 sale involved purchase of
stock by the bank from one shareholder. All of the sales were conducted between
non-family members. The remaining transfers of bank stock did not involve a sale
of the stock.
At least initially, the value of one share of holding company stock will be
approximately equal to the value of one share of bank stock because each
shareholder will receive one share of holding company stock for each share of
bank stock. There is no assurance, however, that those values will remain
equivalent, particularly if the holding company should acquire another bank or
establish a non-banking subsidiary to conduct a banking-related business. Bank
stock will not reflect the value of any other holding company subsidiaries that
may be established in the future.
Other
- -----
Liquidation Rights. The Shareholders of the bank and the holding company
are entitled to share pro rata in the net assets of the organization, after
payment of all liabilities, if the organization is ever liquidated.
Preemptive Rights. Shareholders of the bank do not have preemptive rights
to acquire additional shares of the organization that may be issued in the
future. Shareholders of the holding company likewise will not have preemptive
rights.
Conversion Rights. Neither the bank stock nor the holding company stock is
convertible into any other security.
Call. Neither the bank stock nor the holding company stock is subject to
any call or redemption rights on the part of the organization.
Assessability. All of the bank and holding company stock issued or to be
issued is or will be fully paid and nonassessable, except as provided by law.
The Wisconsin Business Corporation Law imposes a statutory liability on
shareholders of every corporation up to an amount equal to the par value of
their shares, and to the consideration for which their shares without par value
were issued, for all debts owing to employees of the corporation for services
performed for such corporation, but not exceeding six months' service in any one
case.
Supervision and Regulation
--------------------------
General
- -------
Financial institutions and their holding companies are extensively
regulated under federal and state law. Consequently, the growth and earnings
performance of the holding company and the bank can be affected not only by
management decisions and general economic conditions, but also by the statutes
administered by, and the regulations and policies of, various governmental
regulatory authorities including, but not limited to, the Federal Reserve Board,
the Federal Deposit Insurance Corporation, the Wisconsin Department of Financial
Institutions Division of Banking, federal and state taxing authorities, and the
Securities and Exchange Commission. The effect of such statutes, regulations and
policies can be significant, and cannot be predicted with a high degree of
certainty.
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Federal and state laws and regulations generally applicable to financial
institutions and their holding companies regulate, among other things, the scope
of business, investments, reserves against deposits, capital levels relative to
operations, the nature and amount of collateral for loans, the establishment of
branches, mergers, consolidations and dividends. The system of supervision and
regulation applicable to the holding company and the bank establishes a
comprehensive framework for their respective operations and is intended
primarily for the protection of the Federal Deposit Insurance Corporation's
deposit insurance funds and the depositors, rather than the shareholders, of the
bank.
The following references to material statutes and regulations affecting the
holding company and the bank are brief summaries thereof and do not purport to
be complete, and are qualified in their entirety by reference to such statutes
and regulations. Any change in applicable law or regulations may have a material
effect on the business of the holding company and the bank.
Banking Regulation
- ------------------
The holding company, if the reorganization is successful, will be a bank
holding company subject to the supervision of the Board of Governors of the
Federal Reserve System under the Bank Holding Company Act of 1956, as amended.
In accordance with Federal Reserve Board policy, the holding company will be
expected to act as a source of financial strength to the bank and to commit
resources to support the bank in circumstances where the holding company might
not do so absent such policy. As a bank holding company, the holding company
will be required to file with the Board of Governors annual reports and such
additional information as the Board of Governors may require pursuant to the
Bank Holding Company Act. The Board of Governors may make examinations of the
holding company and its subsidiary. Because the bank will be chartered under
Wisconsin law, the holding company will also be subject to the examination,
supervision, reporting and enforcement requirements of the Wisconsin Department
of Financial Institutions Division of Banking.
The Bank Holding Company Act requires every bank holding company to obtain
the prior approval of the Board of Governors before it may acquire direct or
indirect ownership of more than five percent (5%) of the voting securities or
substantially all of the assets of any bank. The Bank Holding Company Act limits
the activities by bank holding companies to managing, controlling, and servicing
their subsidiary banks and to engaging in certain non-banking activities which
have been determined by the Board of Governors to be closely related to banking.
Similarly, the Bank Holding Company Act, with specified exceptions relating to
permissible non-banking activities, forbids holding companies from acquiring
voting control (generally, 25% or more of the voting power) of any company which
is not a bank. Some of the activities that the Board of Governors has determined
by regulation to be closely related to banking are making or servicing loans,
leasing real and personal property where the lease serves as the functional
equivalent of an extension of credit, making investments in corporations or
projects designed primarily to promote community welfare, acting as an
investment or financial advisor, providing data processing services, and acting
as an insurance agent or broker, as those activities are defined and limited by
the regulation.
Under the recent Gramm-Leach-Bliley Act of 1999, holding companies that
qualify may elect to become "financial holding companies." As a result, such
holding companies may engage in activities, and acquire companies engaged in
activities, that are financial in nature or incidental to such financial
activities. Such "financial holding companies" are also permitted to engage in
activities that are complementary to financial activities if the Federal Reserve
Board determines that the activity does not pose a substantial risk to the
safety and soundness of depository institutions or to the financial system in
general. In order to qualify as a "financial holding company," a holding
company's subsidiary banks must be well managed, well capitalized, and have
received at least a "satisfactory" Community Reinvestment Act ("CRA") rating at
the most recent CRA examination. The list of activities that are considered
"financial in nature" includes:
1. Securities underwriting, dealing and market making.
2. Insurance underwriting and agency activities.
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3. Merchant banking, which means that a "financial holding company" may
directly or indirectly acquire or control any kind of ownership
interest in an entity engaged in any kind of trade or business
whatsoever.
4. Insurance company portfolio investments.
Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on any extensions of credit to
the bank holding company or any of its subsidiaries, on investments in the stock
or other securities thereof, and on the taking of such stock or securities as
collateral for loans to any borrower. Further, under the Bank Holding Company
Act and regulations of the Board of Governors, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit or provision of any property or
services. The Board of Governors possesses cease and desist powers over bank
holding companies and their non-banking subsidiaries if their actions represent
an unsafe or unsound practice or a violation of law.
The bank is a Wisconsin-chartered bank. Its deposit accounts are insured by
the Federal Deposit Insurance Corporation. The bank is subject to the
examination, supervision, reporting and enforcement requirements of the
Wisconsin Department of Financial Institutions Division of Banking, as the
chartering authority for Wisconsin banks, and the Federal Deposit Insurance
Corporation. Areas subject to regulation by the authorities include reserves,
investments, loans, mergers, issuance of securities, payment of dividends,
establishment of branches, and other aspects of banking operations.
The establishment of de novo interstate branches or the acquisition of
individual branches of a bank in another state (rather than the acquisition of
an out-of-state bank in its entirety) is allowed by the Riegle-Neal Act only if
specifically authorized by state law. However, Wisconsin has not made such an
authorization.
Capital Requirements for the Holding Company and the Bank
- ---------------------------------------------------------
The Federal Reserve Board and the Federal Deposit Insurance Corporation use
capital adequacy guidelines in their examination and regulation of bank holding
companies and banks. If capital falls below minimum guideline levels, a bank
holding company may, among other things, be denied approval to acquire or
establish additional banks or non-bank businesses.
The Federal Reserve Board and the Federal Deposit Insurance Corporation's
capital guidelines establish the following minimum regulatory capital
requirements for bank holding companies: a risk-based requirement expressed as a
percentage of total risk-weighted assets, and a leverage requirement expressed
as a percentage of total assets. The risk-based requirement consists of a
minimum ratio of total capital to a total risk-weighted assets of 8%, of which
at least one-half must be Tier 1 capital (which consists principally of
shareholders' equity). The leverage requirement consists of a minimum ratio of
Tier 1 capital to total assets of 3% for the most highly rated companies, with
minimum requirements of 4% to 5% for all others.
As of September 30, 1999, on a pro forma basis, the holding company's ratio
of total capital to risk-weighted assets was 100%, its ratio of Tier 1 capital
to risk-weighted assets was 100%, and its ratio of Tier 1 capital to average
assets was 100%. Also as of September 30, 1999, the bank's ratio of total
capital to risk-weighted assets was 41.25%, its ratio of Tier 1 capital to
risk-weighted assets was 40.00%, and its ratio of Tier 1 capital to average
assets was 21.82%.
The risk-based and leverage standards presently used by the Federal Reserve
Board and the Federal Deposit Insurance Corporation are minimum requirements,
and higher capital levels will be required if warranted by the particular
circumstances or risk profiles of individual banking organizations. Further, any
banking organization experiencing or anticipating significant growth would be
expected to maintain capital ratios, including tangible capital positions for
example, Tier 1 capital less all intangible assets, well above the minimum
levels.
26
<PAGE>
The Federal Reserve Board's regulations provide that the foregoing capital
requirements will generally be applied on a bank-only (rather than a
consolidated) basis in the case of a bank holding company with less than $150
million in total consolidated assets.
Federal Deposit Insurance Corporation Deposit Insurance Premiums
- ----------------------------------------------------------------
The bank pays deposit insurance premiums to the Federal Deposit Insurance
Corporation based on a risk- based assessment system established by the Federal
Deposit Insurance Corporation for all institutions insured by the Bank Insurance
Fund of the Federal Deposit Insurance Corporation. The premiums assessable in
1999 for insurance are approximately $2,288.
Loan Limits to Borrowers
- ------------------------
Generally, under the Wisconsin Banking Law, a Wisconsin-chartered bank may
make to any one borrower total loans and extensions of credit not fully secured
by collateral having a market value at least equal to the loan in an amount not
to exceed 20% of the capital of the bank. Bank holding companies are not subject
to specific limitations on loans to one borrower. However, bank holding company
lending activities require the prior approval of the Federal Reserve Board under
Regulation Y.
Available Information
---------------------
The holding company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement (No. 333-_______) on Form S-4 under
the Securities Act of 1933, for the registration of holding company stock to be
issued in the reorganization. This prospectus-proxy statement constitutes the
prospectus that was filed as a part of that registration statement.
The bank currently is not subject to the requirements of the Securities
Exchange Act of 1934 ("Exchange Act"), and files no reports or proxy statements
with the SEC pursuant thereto. Because the holding company's duty to file
reports pursuant to the section 15(d) of the Exchange Act arises solely from a
registration statement:
o filed by an issuer with no significant assets;
o in a reorganization of a non-reporting company into a one subsidiary
holding company; and
o in which equity security holders receive the same proportional
interest in the holding company as they held in the non-reporting
issuer except for changes resulting from the exercise of dissenting
shareholder rights under state law,
Under Reg. ss. 240.12h-3(d), the holding company will not have to file any
periodic disclosure reports with the SEC at any time, even during the fiscal
year in which the registration statement becomes effective. However, the holding
company will voluntarily provide shareholders with reports of the same nature,
and with the same frequency, as are currently provided by the bank to bank
shareholders.
The SEC maintains a Web site, http://www.sec.gov, that contains filings
made electronically with the SEC, including those of the holding company.
Legal Matters
-------------
Certain legal matters in connection with the reorganization will be passed
upon for the holding company and the bank by Boardman, Suhr, Curry & Field LLP,
One South Pinckney Street, 4th Floor, P.O. Box 927, Madison, Wisconsin
53701-0927.
27
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
THIS AGREEMENT and Plan of Reorganization ("Agreement") is made on December
16, 1999, by and between WAUMANDEE STATE BANK, a state banking organization
("Bank"), and WAUMANDEE BANCSHARES, LTD., a Wisconsin corporation
("Corporation").
RECITALS
The parties consider it advantageous to form a one-bank holding company,
which will be the Corporation, to own all of the outstanding stock of the Bank.
To form the holding company, the Corporation will organize a wholly-owned
subsidiary bank, called New Waumandee State Bank, a state banking organization
("New Bank"). New Bank will then merge with and into Bank, leaving Bank as the
survivor, and converting the outstanding stock of Bank into stock of the
Corporation, so that the shareholders of Bank will become the shareholders of
the Corporation.
This reorganization is comprised of the organization of New Bank and the
merger of New Bank into Bank, as the surviving entity (the "merger"). Pursuant
to the terms of this Agreement, and a Merger Agreement between Bank and New Bank
(to be executed after New Bank is formed), as of the Effective Date of the
Merger, each of the then issued and outstanding shares of Bank Common Stock
("Bank Common") will be converted into three shares of the authorized but
previously unissued common stock of the Corporation ("Corporation Common").
NOW, THEREFORE, the parties do adopt this plan of reorganization and agree
as follows:
1. Merger. Subject to compliance with all requirements of law and the terms
and conditions set forth in this Agreement, New Bank will be merged with and
into Bank.
(a) Effective Date; Surviving Bank. The Effective Date of this Merger
(the "Effective Date") shall be the date set forth in the Merger Agreement.
At the Effective Date, New Bank shall be merged with and into Bank, the
separate existence of New Bank shall cease and Bank, as the surviving
corporation (the "Surviving Bank"), shall succeed to and possess all of the
properties, rights, privileges, immunities, and powers, and shall be
subject to all the liabilities, obligations, restrictions, and duties, of
Bank and New Bank.
(b) Charter Number. The charter number of the Bank shall be the
charter number of the Surviving Bank.
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(c) Articles of Incorporation; Name. From and after the Effective Date
and until thereafter amended as provided by law, the Articles of
Incorporation of the Surviving Bank shall be the Articles of Incorporation
of Bank, as amended or restated, and the name of Surviving Bank shall be
that of Bank.
(d) Bylaws. From and after the Effective Date and until thereafter
amended as provided by law, the Bylaws of Bank in effect immediately prior
to the Effective Date shall constitute the Bylaws of Surviving Bank.
(e) Directors and Officers. From and after the Effective Date and
until their respective successors are elected, the members of the Board of
Directors and the officers of Surviving Bank shall consist of those persons
who are serving as directors and officers of Bank immediately prior to the
Effective Date.
(f) Conversion of Stock. As of the Effective Date, by virtue of the
merger and without any action on the part of the shareholders of Bank, all
of the Bank Common outstanding immediately prior to the Effective Date
shall cease to exist and shall be converted into Corporation Common, at the
rate of one (1) share of Corporation Common for each one (1) share of Bank
Common. As of the Effective Date, by virtue of the merger and without any
action on the part of the shareholder of New Bank, all of the New Bank
common stock outstanding immediately prior to the Effective Date shall
cease to exist.
(g) Transmittal Procedure. Bank will close its transfer records on a
date twenty (20) days prior to the Effective Date for a period through and
including the Effective Date. When the Effective Date is established, the
date of closing of transfer records will also be set, and the shareholders
of Bank will be notified of such. Bank will make every reason able effort
to have its shareholders of record tender their certificates for Bank
Common to the Exchange Agent at least three (3) days prior to the Effective
Date. Bank will serve as the Exchange Agent for this transaction. On the
Effective Date, the Corporation shall provide to Bank, and Bank shall mail
or deliver to its shareholders, stock certificates of Corporation Common to
which those shareholders are entitled by reason of the merger; provided,
however, that no Corporation Common certificate shall be mailed or
delivered to a Bank shareholder who is eligible to exercise dissenter's
rights or who has not delivered to Bank all certificates of Bank Common
owned by such shareholder (or if a certificate has been lost, an indemnity
bond or other agreement satisfactory to the Corporation).
Until so delivered to Bank, each outstanding certificate which prior
to the Effective Date represented shares of Bank Common will be deemed for
all purposes to evidence only the right to receive the ownership of the
shares of Corporation Common into which such Bank Common has been
converted; provided, however, that until such Bank Common certificates are
so delivered to Bank, no dividend payable on Corporation Common at any time
after the Effective Date shall be paid to the holder of such undelivered
certificate. Upon the delivery of such certificate after the Effective
2
<PAGE>
Date, the Corporation shall pay, without interest, any unpaid dividends by
reason of the preceding sentence to the record holder thereof, and Bank
shall deliver the stock certificate for Corporation Common.
(h) Dissenting Shares of Bank. If any shares of Bank Common are
dissenting shares, Bank shall proceed according to applicable law to
determine and pay the fair value of those dissenting shares. "Dissenting
shares" shall mean each outstanding share of Bank Common as to which the
holder has strictly complied with the provisions of applicable law in order
effectively to withdraw from Bank and obtain the right to receive the fair
value of his or her shares of Bank Common.
As of the Effective Date or the date that the last action is taken to
exercise dissenter's rights, whichever is later, dissenting shares shall,
by virtue of the merger, cease to represent any ownership interest or
ownership rights to the Bank or the Corporation, and shall be converted
into the right to receive fair value of those shares as provided by law.
(i) Business. From and after the Effective Date, the business of the
Surviving Bank shall be that of a state bank, conducted at the offices of
Bank where located immediately prior to the Effective Date.
(j) Assets and Liabilities. From and after the Effective Date, the
Surviving Bank shall be liable for all liabilities of New Bank and Bank;
and all deposits, debts, liabilities, and contracts of New Bank and Bank,
respectively, matured or unmatured, whether accrued, absolute, contingent
or otherwise, and whether or not reflected or reserved against on balance
sheets, books of account or records of New Bank or Bank, shall be those of
the Surviving Bank and shall not be released or impaired by reason of the
merger; and all rights of creditors and other obligees and all liens on
property of either New Bank or Bank shall be preserved unimpaired. Further,
all rights, franchises and interests of New Bank and Bank, respectively, in
and to every type of property (real, personal and mixed) and choices in
action shall be transferred to and vested in Surviving Bank by virtue of
such merger without any deed or other transfer, and Surviving Bank, without
any order or other action on the part of any court or otherwise, shall hold
and enjoy all rights of property, franchises and interests, including
appointments, designations and nominations, and all other rights and
interests in every fiduciary capacity, in the same manner and to the same
extent as such rights, franchises and interests were held or enjoyed by New
Bank and Bank, respectively, on the Effective Date.
(k) Tax Consequences. The parties intend and desire that the merger
shall be treated for income tax purposes as a reverse triangular merger
under Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Internal Revenue
Code. The parties shall act in all respects consistently with that intent.
(l) Shareholder Approvals. This Agreement and Plan of Reorganization
will be submitted to the respective shareholders of Bank and New Bank for
3
<PAGE>
ratification and confirmation at shareholder meetings to be called and held
in accordance with the applicable provisions of law and the respective
Articles of Incorporation and Bylaws of Bank and New Bank. Each shareholder
meeting shall be called as soon as reasonably possible. Bank and New Bank
will proceed expeditiously and cooperate fully in the procurement of any
other consents and approvals and in the taking of any other action, and the
satisfaction of all other requirements prescribed by law or otherwise,
necessary for consummation of the merger. The Corporation, as sole
shareholder of New Bank, shall vote its stock in New Bank to approve the
merger and the transactions set forth in this Agreement.
(m) Regulatory Approvals. The parties shall prepare and submit for
filing any and all applications, filings, and registrations with, and
notifications to, all federal and state authorities required for the merger
to be consummated as contemplated by this Agreement. Thereafter, the
parties shall pursue all such applications, filings, registrations, and
notifications diligently and in good faith, and shall file such
supplements, amendments, and additional information in connection therewith
as may be reasonably necessary for the merger to be consummated.
(n) Merger Agreement. The Corporation shall form New Bank promptly
following execution of this Agreement and shall cause New Bank to execute
the Merger Agreement attached hereto as Exhibit A. Within three days after
execution by New Bank, Bank shall execute the Merger Agreement.
2. Representations and Warranties by Bank. Bank represents and warrants to
the Corporation that this Agreement has been approved by the Board of Directors
of Bank, and upon approval by the shareholders of Bank will be fully authorized
by all necessary corporation action.
3. Representations and Warranties by the Corporation. The Corporation
represents and warrants to Bank that the shares of the Corporation Common to be
delivered to Bank shareholders pursuant to this Agreement will, upon issuance,
be duly and validly authorized and issued and fully paid and nonassessable
voting shares, except as otherwise required by law, and will constitute all of
the issued and outstanding shares of the Corporation as of the Effective Date.
4. Closing. Subject to the satisfaction of all closing conditions contained
herein or their waiver, the closing shall occur on the Effective Date, which
will be within thirty (30) days after the satisfaction of the last closing
condition. The Closing shall take place at the offices of Bank, or at such other
place as the Corporation and Bank may hereafter agree.
5. Conditions to Obligations of Both Parties. The obligations of each party
to be performed on the Effective Date shall be subject to the following
conditions unless waived in writing by the parties:
4
<PAGE>
(a) Regulatory Approval. On or before the Effective Date, Bank shall
have received the approval from those regulatory agencies whose approval of
the merger is required and any mandatory waiting period(s) associated with
such approval(s) shall have expired.
(b) No Litigation. At the Effective Date, no litigation or
governmental investigation shall have been commenced or, to the best
knowledge of the Corporation or Bank, threatened or proposed, which would
have a material, adverse effect on the value of Bank or an adverse effect
on the ability of any party to close this transaction, or which arises out
of or concerns the transactions contemplated by this Agreement.
(c) Closing Not Later Than . The closing of the transactions
contemplated hereunder shall have occurred on or before ____________,
unless such date is extended by mutual written agreement of the parties.
(d) Shareholder Approval. This Agreement shall have been approved and
adopted by the shareholders of Bank and of New Bank in such manner as
required by law.
(e) Tax Opinion. The parties shall have received a written opinion of
tax counsel that the transactions contemplated by this Agreement and the
Merger Agreement will constitute a tax-free reorganization under the
provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal
Revenue Code with respect to those shareholders of Bank who will receive
Corporation Common in the merger.
(f) Securities Law Compliance. The Corporation Common stock to be
issued in the merger shall have been registered, qualified or exempted
under all applicable federal and state securities laws, and there shall
have been no stop order issued or threatened by the SEC or any state that
suspends the effectiveness of any such registration, qualification, or
exemption.
6. Conditions to Obligations of Corporation and New Bank. The obligations
of the Corporation and New Bank to be performed on the Effective Date shall be
subject to the following conditions unless waived in writing by the Corporation
and New Bank:
(a) Representations and Warranties True; Covenants and Obligations
Performed. All representations and warranties of Bank shall be true and
correct in all material respects on the Effective Date, and Bank shall have
performed all acts required of it under the terms of this Agreement.
(b) Dissenting Shares. There shall be not more than ten percent (10%)
of the total outstanding shares of Bank that as of the Effective Date are
eligible to elect dissenter's rights by reason of having complied with the
procedures required by applicable law.
5
<PAGE>
(c) No Material Adverse Change. The assets, business, operation, and
prospects of Bank shall not have been materially and adversely affected by
a loss or destruction not fully compensated by insurance, by any
governmental proceeding or action, or by any other event or occurrence,
which in the reasonable judgment of the Corporation would defeat or
frustrate the purposes of the reorganization or otherwise make the
reorganization undesirable.
7. Conditions to Obligations of Bank. The obligations of Bank to be
performed on the Effective Date shall be subject to the following conditions
unless waived in writing by Bank: all representations and warranties of the
Corporation shall be true and correct in all material respects on the Effective
Date, and the Corporation and New Bank shall have performed all acts required of
them under the terms of this Agreement.
8. Additional Covenants of the Parties.
(a) Cooperation. The parties will fully cooperate with each other and
their respective counsels and accountants in connection with any steps to
be taken as part of their obligations under this Agreement, including
without limitation, the preparation of financial statements and the
supplying of information in connection with the preparation of regulatory
applications.
(b) Expenses. All costs and expenses and charges incurred by a party
hereto shall be borne by such party, including the fees of their respective
accountants and attorneys; provided, however, that if the merger is not
consummated for any reason, all costs and expenses incurred by the
Corporation and New Bank shall be paid by Bank.
(c) Affiliates. The parties acknowledge that (i) shares of Corporation
Common received in the reorganization by persons who are affiliates of the
parties for purposes of Rule 145, promulgated by the Securities and
Exchange Commission pursuant to the Securities Act of 1933, are subject to
certain restrictions on the public resale of such shares; (ii) certificates
evidencing shares of Corporation Common received by affiliates pursuant to
the reorganization shall carry a legend referring to Rule 145 and the
transfer restrictions imposed thereunder; and (iii) such shares shall be
subject to stop-transfer instructions to the Corporation's transfer agent.
For purposes of Rule 145 an "affiliate" means a person who was, as of the
date of consummation of the reorganization, an executive officer of Bank,
or a director of Bank, or a person deemed to control Bank (including
without limitation a Bank shareholder owning more than 10% of the Bank
stock outstanding). Neither Bank nor the Corporation is obligated to
register shares of Corporation Common for resale, and any such registration
shall be at the expense and instance of any shareholder, including an
affiliate, desiring such registration.
9. Termination. This Agreement and merger may be terminated and abandoned
upon prompt written notice to the other party before the Effective Date,
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<PAGE>
notwithstanding authorization and adoption of this Agreement by the shareholders
of one or both of Bank and New Bank:
(a) By mutual consent of Bank and the Corporation through their Boards
of Directors;
(b) By Bank at any time after ____________ (or such later date as
shall have been agreed to in writing by the parties) if any of the
conditions provided for in Paragraphs 5 or 7 of this Agreement have not
been met and have not been waived in writing by Bank; or
(c) By the Corporation at any time after ____________ (or such later
date as shall have been agreed to in writing by the parties) if any of the
conditions provided for in Paragraphs 5 or 6 of this Agreement have not
been met and have not been waived in writing by the Corporation.
10. Miscellaneous.
(a) Assignment. This Agreement and the rights, interests, and benefits
hereunder shall not be assigned, transferred, or pledged in any way, and
shall not be subject to execution, attachment, or similar process. Any
attempt to assign, transfer, pledge, or make any other disposition of this
Agreement or of the rights, interests, and benefits contrary to the
foregoing provision, or the levy of any attachment or similar process
thereupon, shall be null and void and without effect.
(b) Waiver. No failure or delay of any party in exercising any right
or power given to it under this Agreement shall operate as a waiver
thereof. No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent, or subsequent breach. No
waiver of any breach or modification of this Agreement shall be effective
unless contained in a writing executed by both parties.
(c) Entire Agreement. This Agreement supersedes any other
representations or agreement, whether written or oral, that may have been
made or entered into by the Corporation, Bank, New Bank or by any officer
or officers of such parties relating to the acquisition of Bank, or its
assets or business, by the Corporation. This Agreement constitutes the
entire agreement by the parties, and there are no agreements or commitments
except as set forth herein.
(d) Amendment. This Agreement may be modified or amended only by a
written agreement executed by duly authorized officers of both parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
ATTEST: WAUMANDEE STATE BANK
_______________________ By:________________________________
ATTEST: WAUMANDEE BANCSHARES, LTD.
_______________________ By:________________________________
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EXHIBIT A
MERGER AGREEMENT
MERGER AGREEMENT ("Merger Agreement") made this _____ day of
__________________, ____, by and between WAUMANDEE STATE BANK, a state banking
organization ("Bank"), and NEW WAUMANDEE STATE BANK, a state banking
organization ("New Bank").
WITNESSETH
WHEREAS, Bank and Waumandee Bancshares, Ltd. ("Corporation") have entered
into an Agreement and Plan of Reorganization dated __________________
("Agreement"), pursuant to which Bank has agreed to merge with the Corporation's
wholly-owned subsidiary, New Bank, in a reverse triangular merger; and
WHEREAS, Bank and New Bank wish to agree on the terms of the merger now
that New Bank has been formed;
NOW, THEREFORE, the parties agree as follows:
1. Incorporation of Plan of Reorganization. The terms and conditions of the
Agreement are incorporated herein by reference in their entirety, and made a
part of this Merger Agreement with the same effect as if New Bank had been a
party to the Agreement.
2. Cooperation. New Bank shall cooperate with Bank to achieve a prompt
consummation of the transactions contemplated in the Agreement, and shall
perform all actions necessary or convenient to be performed by it for that
purpose.
3. Articles of Incorporation. Effective as of the time this merger shall
become effective as specified in the Agreement, the articles of incorporation of
that bank resulting from the merger of Bank and New Bank shall read in their
entirety as stated in the attached Articles of Incorporation.
4. Capital Stock. The amount of capital stock of New Bank shall be $5,000,
divided into 5,000 shares of common stock, each of $1.00 par value. At the time
the merger shall become effective (and after the temporary capitalization of the
interim bank has been returned to the Corporation), the resulting bank shall
have $____________ in capital, a surplus of $____________, and undivided profits
of $____________, adjusted, however, for earnings and expenses between
___________, and the Effective Date of the merger.
5. Effective Date. The Effective Date of the Merger shall be
______________.
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IN WITNESS WHEREOF, the parties have executed this Merger Agreement by
their proper corporate officers duly authorized to execute this Agreement, as of
the date first above written.
Attest: WAUMANDEE STATE BANK
_________________________ By_________________________________
Attest: NEW WAUMANDEE STATE BANK
_________________________ By_________________________________
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EXHIBIT B
TAX OPINION OF BOARDMAN, SUHR, CURRY & FIELD
<PAGE>
SPECIMEN
--------
____________________, _____
The Board of Directors
Waumandee Bancshares, Ltd.
P.O. Box 69
1606 Commercial Street
Waumandee, WI 54614-0069
The Board of Directors
Waumandee State Bank
P.O. Box 69
1606 Commercial Street
Waumandee, WI 54614-0069
You have requested that we render an opinion as to the tax consequences to
Waumandee Bancshares, Ltd. ("Holding Company"), Waumandee State Bank ("Bank"),
New Waumandee State Bank ("New Bank"), and the shareholders ("Shareholders") of
the Bank of a corporate reorganization to form a one-bank holding company, as
described in an Agreement and Plan of Reorganization dated _______________,
____, between the Holding Company and the Bank ("Agreement") and in a certain
Prospectus/Proxy Statement dated _____________, ____.
We acknowledge that this opinion is provided for the benefit and guidance
of the Holding Company and Bank.
In making this opinion, we have relied on the Agreement, the
Prospectus/Proxy Statement, the Merger Agreement (to be executed between the
Bank and the New Bank), and on the truth and completeness of the warranties,
representations, statements and facts contained in those documents. We have also
relied upon the truth and completeness of the following representations of the
Holding Company and the Bank:
1. The fair market value of the Holding Company stock received by each Bank
shareholder will be approximately equal to the fair market value of the Bank
stock surrendered in the exchange.
2. There is no plan or intention by the shareholders of the Bank who own
one percent (1%) or more of the Bank stock, and to the best of the knowledge of
the management of the Bank, there is no plan or intention on the part of the
remaining shareholders to sell, exchange, or otherwise dispose of a number of
shares of Holding Company stock received in the transaction that would reduce
the shareholders' ownership of Holding Company stock to a number of shares
<PAGE>
____________________, ____
Page 2
having a value, as of the date of the transaction, of less than fifty percent
(50%) of the value of all of the formerly outstanding Bank stock as of the same
date. For purposes of this representation, shares of Bank stock exchanged for
cash or other property, surrendered by dissenters or exchanged for cash in lieu
of fractional shares of Holding Company stock will be treated as outstanding
Bank stock on the date of the transaction. Moreover, shares of Holding Company
stock held by Bank shareholders and otherwise sold, redeemed or disposed of
prior or subsequent to the transaction will be considered in making this
representation.
3. Bank shareholders will receive Holding Company stock in exchange for at
least 80% of the Bank stock authorized immediately prior to the transaction.
4. Bank will acquire at least ninety percent (90%) of the fair market value
of the net assets and at least seventy percent (70%) of the fair market value of
the gross assets held by the New Bank immediately prior to the transaction. For
purposes of this representation, amounts paid by the New Bank to dissenters,
amounts paid by the New Bank to shareholders who receive cash or other property,
New Bank assets used to pay its reorganization expenses, and all redemption and
distributions (except for regular, normal dividends) made by the New Bank
immediately preceding the transfer, will be included as assets of the Bank held
immediately prior to the transaction.
5. Prior to the transaction, the Holding Company will be in control of the
New Bank within the meaning of ss. 368(c)(1) of the Internal Revenue Code.
6. Following the transaction, the Bank will not issue additional shares of
its stock that would result in the Holding Company losing control of the Bank
within the meaning of ss. 368(c)(1) of the Internal Revenue Code.
7. The Holding Company has no plan or intention to reacquire any of its
stock issued in the transaction.
8. The Holding Company has no plan or intention to liquidate the Bank; to
merge the Bank with and into another bank or corporation; to sell or otherwise
dispose of the stock of the Bank; or to cause the Bank to sell or to otherwise
dispose of any of the New Bank's assets acquired in the transaction, except for
dispositions made in the ordinary course of business or transfers described in
ss. 368(a)(2)(C) of the Internal Revenue Code.
9. The liabilities of the New Bank assumed by the Bank, and the liabilities
to which the transferred assets of the New Bank are subject, were incurred by
the New Bank in the ordinary course of its business.
<PAGE>
____________________, ____
Page 3
10. Following the transaction, the Bank will continue the historic business
of the New Bank or use a significant portion of the New Bank's business assets
in a business.
11. The Holding Company, the New Bank, the Bank, and the shareholders will
pay their respective expenses, if any, incurred in connection with the
transaction.
12. There is no intercorporate indebtedness existing between the Holding
Company and the Bank or between the New Bank and the Bank that was issued,
acquired or will be settled at a discount.
13. No two parties to the transaction are investment companies as defined
in ss. 368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
14. The New Bank is not under the jurisdiction of a court in a Title 11
(bankruptcy) or similar case within the meaning of ss. 368(a)(3)(A) of the
Internal Revenue Code.
15. The fair market value of the assets of the New Bank transferred to the
Bank will equal or exceed the sum of the liabilities assumed by the Bank, plus
the amount of liabilities, if any, to which the transferred assets are subject.
16. No stock of the New Bank will be issued in the transaction.
We have not undertaken to verify independently any of the factual matters
upon which we rely in providing this opinion. Moreover, we have assumed that no
changes have occurred or will occur with respect to the documents described
above or the representations set forth in paragraphs 1 through 16 above.
Based upon and subject to the foregoing, it is our opinion under current
law that for federal and State of Wisconsin income tax purposes:
(1) The proposed merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) by reason of Section 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended, and Chapter 71 of the
Wisconsin Statutes. The reorganization will not be disqualified by
reason of the fact that Holding Company common stock is used in the
transaction. (Internal Revenue Code Section 368(a)(2)(E).)
(2) No gain or loss will be recognized to the New Bank on the transfer of
substantially all of its assets to the Bank in exchange for Holding
Company common stock and the assumption by the Bank of the liabilities
of the New Bank.
<PAGE>
____________________, ____
Page 4
(3) No gain or loss will be recognized to the Holding Company or the Bank
upon the receipt by the Bank of substantially all of the assets of the
new Bank in exchange for Holding Company common stock and the
assumption by the Bank of the liabilities of the New Bank.
(4) The basis of the New Bank assets in the hands of the Bank will be the
same as the basis of those assets in the hands of the New Bank
immediately prior to the proposed transaction.
(5) The holding period of the assets of the New Bank in the hands of the
Bank will include the period during which such assets were held by the
New Bank.
(6) The basis of the Bank stock in the hands of the Holding Company will
be increased by an amount equal to the basis of the New Bank assets
acquired by the Bank in the transaction, and will be decreased by the
amount of liabilities of the New Bank assumed by the Bank and the
amount of liabilities to which the acquired assets of the New Bank are
subject.
(7) No gain or loss will be recognized by the shareholders on the exchange
of their Bank common stock for Holding Company common stock; provided,
however, that no opinion is expressed with respect to Bank
shareholders who dissent from the transaction and receive cash for
their Bank stock.
(8) The income tax basis of the Holding Company common stock to be
received by the shareholders will be the same as the basis of the Bank
common stock surrendered in exchange.
(9) The holding period of the Holding Company common stock to be received
by the shareholders will include the period during which the Bank
common stock surrendered in exchange was held, provided that the Bank
common stock is held as a capital asset on the date of the exchange.
Our opinion is limited to specific issues addressed. We express no opinion
and make no representation, and no inference is intended or should be drawn from
any statement in this letter, as to any other issues involving the transaction.
We hereby consent to the use of this opinion as Exhibit B of the
Prospectus-Proxy Statement and as Exhibit 8 to the S-4 Registration Statement
filed with the Securities and Exchange Commission in connection with the
reorganization.
BOARDMAN, SUHR, CURRY & FIELD LLP
<PAGE>
EXHIBIT C
SECTIONS 221.0706 THROUGH 221.0718
OF THE WISCONSIN STATUTES
<PAGE>
Wisconsin Acts (Advance)
1995 WISCONSIN ACT 336
October 16, 1996
221.0706 Right to dissent. (1) MANDATORY DISSENTERS' RIGHTS. A shareholder or
beneficial shareholder may dissent from, and obtain payment of the fair value of
his or her shares in the event of, any of the following corporate actions:
(a) Consummation of a plan of merger to which the issuer bank is a party.
(b) Consummation of a plan of share exchange if the issuer bank's shares will be
acquired, and the shareholder or the shareholder holding shares on behalf of the
beneficial shareholder is entitled to vote on the plan.
(c) Except as provided in sub. (2), any other corporate action taken pursuant to
a shareholder vote to the extent that the articles of incorporation, the bylaws
or a resolution of the board of directors provides that the voting or nonvoting
shareholder or beneficial shareholder may dissent and obtain payment for his or
her shares.
(2) PERMISSIVE DISSENTERS' RIGHTS. The articles of incorporation may allow a
shareholder or beneficial shareholder to dissent from an amendment of the
articles of incorporation and obtain payment of the fair value of his or her
shares if the amendment materially and adversely affects rights in respect of a
dissenter's shares because it does any of the following:
(a) Alters or abolishes a preferential right of the shares.
(b) Creates, alters or abolishes a right in respect of redemption, including a
provision respecting a sinking fund for the redemption or repurchase, of the
shares.
(c) Alters or abolishes a preemptive right of the holder of shares to acquire
shares or other securities.
(d) Excludes or limits the right of the shares to vote on any matter or to
cumulate votes, other than a limitation by dilution through issuance of shares
or other securities with similar voting rights.
(e) Reduces the number of shares owned by the shareholder or beneficial
shareholder to a fraction of a share if the fractional share so created is to be
acquired for cash under s. 221.0506.
(3) RIGHTS OF DISSENTER. A shareholder or beneficial shareholder entitled to
dissent and obtain payment for his or her shares under ss. 221.0701 to 221.0718
may not challenge the corporate action creating his or her entitlement unless
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the action is unlawful or fraudulent with respect to the shareholder, beneficial
shareholder or issuer bank.
221.0707 Dissent by shareholders and beneficial shareholders. (1) PARTIAL
EXERCISE OF DISSENTERS' RIGHTS. A shareholder may assert dissenters' rights as
to fewer than all of the shares registered in his or her name only if the
shareholder dissents with respect to all shares beneficially owned by any one
person and notifies the bank in writing of the name and address of each person
on whose behalf he or she asserts dissenters' rights. The rights of a
shareholder, who asserts dissenters' rights under this subsection as to fewer
than all of the shares registered in his or her name, are determined as if the
shares as to which he or she dissents and his or her other shares were
registered in the names of different shareholders.
(2) RIGHTS OF BENEFICIAL SHAREHOLDERS. A beneficial shareholder may assert
dissenters' rights as to shares held on his or her behalf only if the beneficial
shareholder does all of the following:
(a) Submits to the bank the shareholder's written consent to the dissent not
later than the time that the beneficial shareholder asserts dissenters' rights.
(b) Submits the consent under par. (a) with respect to all shares
of which he or she is the beneficial shareholder.
221.0708 Notice of dissenters' rights. (1) ACTION AT SHAREHOLDER MEETING. If
proposed corporate action creating dissenters' rights under s. 221.0706 is
submitted to a vote at a shareholders' meeting, the meeting notice shall state
that shareholders and beneficial shareholders are or may be entitled to assert
dissenters' rights under ss. 221.0701 to 221.0718 and shall be accompanied by a
copy of those sections.
(2) ACTION WITHOUT SHAREHOLDER VOTE. If corporate action creating dissenters'
rights under s. 221.0706 is authorized without a vote of shareholders, the bank
shall notify, in writing and in accordance with s. 221.0103, all shareholders
entitled to assert dissenters' rights that the action was authorized and send
them the dissenters' notice described in s. 221.0710.
221.0709 Notice of intent to demand payment. (1) METHOD OF ASSERTING DISSENTERS'
RIGHTS. If proposed corporate action creating dissenters' rights under s.
221.0706 is submitted to a vote at a shareholders' meeting, a shareholder or
beneficial shareholder who wishes to assert dissenters' rights shall do all of
the following:
(a) Deliver to the issuer bank before the vote is taken written notice that
complies with s. 221.0103 of the shareholder's or beneficial shareholder's
intent to demand payment for his or her shares if the proposed action is
effectuated.
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(b) Refrain from voting his or her shares in favor of the proposed action.
(2) FAILURE TO COMPLY. A shareholder or beneficial shareholder who fails to
comply with sub. (1) is not entitled to payment for his or her shares under ss.
221.0701 to 221.0718.
221.0710 Dissenters' notice. (1) WHEN REQUIRED. If a proposed corporate action
creating dissenters' rights under s. 221.0706 is authorized at a shareholders'
meeting, the bank shall deliver a written dissenters' notice to all shareholders
and beneficial shareholders who satisfied s. 221.0709 (1).
(2) TIMING AND CONTENT OF NOTICE. The dissenters' notice shall be sent no later
than 10 days after the corporate action is authorized at a shareholders' meeting
or without a vote of shareholders, whichever is applicable, and all necessary
regulatory approvals are obtained. The dissenters' notice shall comply with s.
221.0103 and shall include or have attached all of the following:
(a) A statement indicating where the shareholder or beneficial shareholder must
send the payment demand and where and when certificates for certificated shares
must be deposited.
(b) For holders of uncertificated shares, an explanation of the extent to which
transfer of the shares will be restricted after the payment demand is received.
(c) A form for demanding payment that includes the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action and that requires the shareholder or beneficial shareholder
asserting dissenters' rights to certify whether he or she acquired beneficial
ownership of the shares before that date.
(d) A date by which the bank must receive the payment demand, which may not be
fewer than 30 days nor more than 60 days after the date on which the dissenters'
notice is delivered.
(e) A copy of ss. 221.0701 to 221.0718.
221.0711 Duty to demand payment. (1) MANNER OF DEMANDING PAYMENT. A shareholder
or beneficial shareholder who is sent a dissenters' notice described in s.
221.0710, or a beneficial shareholder whose shares are held by a nominee who is
sent a dissenters' notice described in s. 221.0710, must demand payment in
writing and certify whether he or she acquired beneficial ownership of the
shares before the date specified in the dissenters' notice under s. 221.0710 (2)
(c). A shareholder or beneficial shareholder with certificated shares must also
deposit his or her certificates in accordance with the terms of the notice.
(2) EFFECT OF DEMAND ON HOLDERS OF CERTIFICATED SHARES. A shareholder or
beneficial shareholder with certificated shares who demands payment and deposits
3
<PAGE>
his or her share certificates under sub. (1) retains all other rights of a
shareholder or beneficial shareholder until these rights are canceled or
modified by the effectuation of the corporate action.
(3) EFFECT OF FAILURE TO DEMAND. A shareholder or beneficial shareholder with
certificated or uncertificated shares who does not demand payment by the date
set in the dissenters' notice, or a shareholder or beneficial shareholder with
certificated shares who does not deposit his or her share certificates where
required and by the date set in the dissenters' notice, is not entitled to
payment for his or her shares under ss. 221.0701 to 221.0718.
221.0712 Restriction on uncertificated shares. (1) WHEN TRANSFER RESTRICTIONS
PERMITTED. The issuer bank may restrict the transfer of uncertificated shares
from the date that the demand for payment for those shares is received until the
corporate action is effectuated or the restrictions released under s. 221.0714.
(2) EFFECT OF DEMAND ON HOLDERS OF UNCERTIFICATED SHARES. The shareholder or
beneficial shareholder who asserts dissenters' rights as to uncertificated
shares retains all of the rights of a shareholder or beneficial shareholder,
other than those restricted under sub. (1), until these rights are canceled or
modified by the effectuation of the corporate action.
221.0713 Payment. (1) WHEN PAYMENT MADE. Except as provided in s. 221.0715, as
soon as the corporate action is effectuated or upon receipt of a payment demand,
whichever is later, the bank shall pay each shareholder or beneficial
shareholder who has complied with s. 221.0711 the amount that the bank estimates
to be the fair value of his or her shares, plus accrued interest.
(2) MATERIAL TO ACCOMPANY PAYMENT. The payment shall be accompanied by all of
the following:
(a) The bank's latest available financial statements, including a balance sheet
as of the end of a fiscal year ending not more than 16 months before the date of
payment, an income statement for that year, a statement of changes in
shareholders' equity for that year and the latest available interim financial
statements, if any.
(b) A statement of the bank's estimate of the fair value of the shares.
(c) An explanation of how the interest was calculated.
(d) A statement of the dissenter's right to demand payment under s. 221.0716 if
the dissenter is dissatisfied with the payment.
(e) A copy of ss. 221.0701 to 221.0718.
221.0714 Failure to take action. (1) ACTION NOT TAKEN. If an issuer bank does
not effectuate the corporate action within 60 days after the date set under
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s. 221.0710 for demanding payment, the issuer bank shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.
(2) ACTION TAKEN AT A LATER DATE. If, after returning deposited certificates and
releasing transfer restrictions, the issuer bank effectuates the corporate
action, the bank shall deliver a new dissenters' notice under s. 221.0710 and
repeat the payment demand procedure.
221.0715 After-acquired shares. (1) WITHHOLDING FOR AFTER-ACQUIRED SHARES. A
bank may elect to withhold payment required by s. 221.0713 from a dissenter
unless the dissenter was the beneficial owner of the shares before the date
specified in the dissenters' notice under s. 221.0710 (2) (c) as the date of the
first announcement to news media or to shareholders of the terms of the proposed
corporate action.
(2) PAYMENT. To the extent that the bank elects to withhold payment under sub.
(1) after effectuating the corporate action, the bank shall estimate the fair
value of the shares, plus accrued interest, and shall pay this amount to each
dissenter who agrees to accept it in full satisfaction of his or her demand. The
bank shall send with its offer a statement of its estimate of the fair value of
the shares, an explanation of how the interest was calculated, and a statement
of the dissenter's right to demand payment under s. 221.0716 if the dissenter is
dissatisfied with the offer.
221.0716 Procedure if dissenter is dissatisfied with payment or offer. (1)
RIGHTS OF DISSENTER. A dissenter may, in the manner provided in sub. (2), notify
the bank of the dissenter's estimate of the fair value of his or her shares and
the amount of interest due, and demand payment of his or her estimate, less any
payment received under s. 221.0713, or reject the offer under s. 221.0715 and
demand payment of the fair value of his or her shares and interest due, if any
of the following applies:
(a) The dissenter believes that the amount paid under s. 221.0713 or offered
under s. 221.0715 is less than the fair value of his or her shares or that the
interest due is incorrectly calculated.
(b) The bank fails to make payment under s. 221.0715 within 60 days after the
date set under s. 221.0710 for demanding payment.
(c) The issuer bank, having failed to effectuate the corporate action, does not
return the deposited certificates or release the transfer restrictions imposed
on uncertificated shares within 60 days after the date set under s. 221.0710 for
demanding payment.
(2) WAIVER OF RIGHTS. A dissenter waives his or her right to demand payment
under this section unless the dissenter notifies the bank of his or her demand
under sub. (1) in writing within 30 days after the bank makes or offers payment
for his or her shares. The notice shall comply with s. 221.0103.
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221.0717 Court action. (1) WHEN SPECIAL PROCEEDING REQUIRED. If a demand for
payment under s. 221.0716 remains unsettled, the bank shall bring a special
proceeding within 60 days after receiving the payment demand under s. 221.0716
and petition the court to determine the fair value of the shares and accrued
interest. If the bank does not bring the special proceeding within the 60-day
period, it shall pay each dissenter whose demand remains unsettled the amount
demanded.
(2) WHERE PROCEEDING TO BE BROUGHT. The bank shall bring the special proceeding
in the circuit court for the county where its principal office or, if none in
this state, its registered office is located. If the bank is a foreign bank
without a registered office in this state, it shall bring the special proceeding
in the county in this state in which was located the registered office of the
issuer bank that merged with or whose shares were acquired by the foreign bank.
(3) PARTIES TO THE PROCEEDING. The bank shall make all dissenters, whether or
not residents of this state, whose demands remain unsettled parties to the
special proceeding. Each party to the special proceeding shall be served with a
copy of the petition as provided in s. 801.14.
(4) JURISDICTION. The jurisdiction of the court in which the special proceeding
is brought under sub. (2) is plenary and exclusive. The court may appoint one or
more persons as appraisers to receive evidence and recommend a decision on the
question of fair value. An appraiser has the power described in the order
appointing him or her or in any amendment to the order. The dissenters are
entitled to the same discovery rights as parties in other civil proceedings.
(5) JUDGMENTS. Each dissenter made a party to the special proceeding is
entitled to judgment for any of the following:
(a) The amount, if any, by which the court finds the fair value of his or her
shares, plus interest, exceeds the amount paid by the bank.
(b) The fair value, plus accrued interest, of his or her shares acquired on or
after the date specified in the dissenters' notice under s. 221.0710 (2) (c),
for which the bank elected to withhold payment under s. 221.0715.
221.0718 Court costs and counsel fees. (1) ASSESSMENT OF AND LIABILITY FOR
COSTS. (a) Notwithstanding ss. 814.01 to 814.04, the court in a special
proceeding brought under s. 221.0717 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court and shall assess the costs against the bank, except as
provided in par.(b).
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(b) Notwithstanding ss. 814.01 and 814.04, the court may assess costs against
all or some of the dissenters, in amounts that the court finds to be equitable,
to the extent that the court finds the dissenters acted arbitrarily, vexatiously
or not in good faith in demanding payment under s. 221.0716.
(2) WHEN LIABLE FOR FEES AND COSTS. The parties shall bear their own expenses of
the proceeding, except that, notwithstanding ss. 814.01 to 814.04, the court may
also assess the fees and expenses of counsel and experts for the respective
parties, in amounts that the court finds to be equitable, as follows:
(a) Against the bank and in favor of any dissenter if the court finds that the
bank did not substantially comply with ss. 221.0708 to 221.0716.
(b) Against the bank or against a dissenter, in favor of any other party, if the
court finds that the party against whom the fees and expenses are assessed acted
arbitrarily, vexatiously or not in good faith with respect to the rights
provided by this chapter.
(3) PAYMENT OF COUNSEL AND EXPERTS FROM RECOVERY. Notwithstanding ss. 814.01 to
814.04, if the court finds that the services of counsel and experts for any
dissenter were of substantial benefit to other dissenters similarly situated,
the court may award to these counsel and experts reasonable fees to be paid out
of the amounts awarded the dissenters who were benefited.
7
<PAGE>
EXHIBIT D
ARTICLES OF INCORPORATION
OF WAUMANDEE BANCSHARES, LTD.
<PAGE>
ARTICLES OF INCORPORATION
Stock (for profit)
Executed by the undersigned for the purpose of forming a Wisconsin
for-profit corporation under Chapter 180 of the Wisconsin Statutes repealed and
recreated by 1989 Wis. Act 303:
ARTICLE 1. Name of Corporation: Waumandee Bancshares, Ltd.
ARTICLE 2. The Corporation shall be authorized to issue 1,200 shares.
ARTICLE 3. The street address of the initial registered office is: P.O. Box
959, S2021 County Road U, Waumandee, WI 54614-0069.
ARTICLE 4. The name of the initial registered agent at the above registered
office is: Paul R. Lorenz
ARTICLE 5. Other provisions (OPTIONAL): Article 5 continued on attached
pages incorporated by reference.
ARTICLE 6. Executed on November 11, 1999.
Name and complete address of each incorporator:
John E. Knight
Boardman, Suhr, Curry & Field LLP
P.O. Box 927
Madison, Wisconsin 53701-0927
/s/ John E. Knight
(Incorporator Signature)
This document was drafted by John E. Knight.
DFI CORP FILE ID NO. B033595
Document stamped Received November 12, 1999, 3:45 p.m. by State of
Wisconsin, Department of Financial Institutions.
Document stamped Filed ________________, by State of Wisconsin,
Department of Financial Institutions.
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WAUMANDEE BANCSHARES, LTD.
ARTICLES OF INCORPORATION
Article 5. (Continued):
A. Board of Directors. The names and addresses of the persons who are to
serve as directors until the first annual meeting of the shareholders or until
their successors are elected and shall qualify are:
C. Michael Chambers Paul R. Lorenz
76 North Belvedere Street 110 Jefferson Street
Buffalo City, WI 54622 Fountain City, WI 54629
William M. Christ Gary U. Pronschinske
W287 Christ Road S2376 Rose Valley Road
Independence, WI 54747 Cochrane, WI 54622
Warren E. Korte Gerald R. Wojchik
218 South Main Street S2015 Wojchik Valley Road
Cochrane, WI 54622 Cochrane, WI 54622
B. Transfer Restrictions.
1. Shareholders of the Corporation's capital stock, herein the "Stock," may
not sell, transfer, assign, encumber, pledge, hypothecate, or in any way dispose
of or alienate any of their shares of the Stock, or any right, title or interest
therein, whether voluntarily or by operation of law, or by gift or otherwise, in
this Part B called a "transfer", without the prior written consent of the
Corporation. Provided, however, that the prior written consent of the
Corporation shall not be required as to any transfer between a shareholder and
his or her spouse or children, including stepchildren, provided that as a
condition precedent to the effectiveness of the transfers described herein, the
transferee in any such transfer shall be bound by all of the terms and
conditions of this Article 5.B.
2. In the event a shareholder desires to sell his or her shares of stock,
or any portion of it, other than in a transaction between a shareholder and his
or her spouse or children described in B.1. above, without first obtaining the
written consent of the Corporation, the shareholder, first, shall give the
Corporation written notice of his or her intent to do so, stating in the notice
the identity of the proposed purchaser of the shares, the number of shares the
shareholder proposes to sell, the proposed consideration for the shares and the
other terms and conditions of the proposed sale of the shares. The shareholder
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shall include with the written notice given to the Corporation under this
paragraph a copy of the written offer to purchase the shares. The Corporation
shall have a right of first refusal to acquire all, but not less than all, of
the shares for the consideration and on the other terms and conditions offered
by the proposed purchaser and as contained in the written notice given to the
Corporation by the shareholder. The Corporation shall exercise its right to
acquire the shares by giving written notice to the shareholder of its intent to
acquire the shares redeemed, within forty-five (45) days following receipt of
the written notice from the shareholder. In the event the Corporation does not
exercise its acquisition rights within the time period as provided herein with
respect to all of the shares, the shareholder shall be free for a period of
forty-five (45) days thereafter to sell all of the shares to the purchaser
identified in the written notice to the Corporation, and at the same
consideration and on the same terms and conditions as set forth in such written
notice.
3. In the event that a shareholder desires to transfer his or her shares of
Stock, or any portion of it, other than in a transaction of the type described
in paragraph B.1. or 2. above, that is, a transfer of shares by the shareholder
to a person or entity other than the shareholder's spouse or children in a
transaction that does not involve a sale of the shares, the shareholder shall
give the Corporation written notice of his or her intent to do so, stating in
the notice the identity of the proposed transferee of the shares and the number
of shares the shareholder proposes to transfer. The Corporation shall have a
right to redeem all, but not less than all, of the shares for consideration as
determined by the formula contained in Article VI, Sec. 4 of the Bylaws of the
Corporation. The Corporation shall exercise its right to redeem the shares by
giving written notice to the shareholder of its intent to acquire the shares
redeemed, within forty-five (45) days following receipt of the written notice
from the shareholder. In the event the Corporation does not exercise its
redemption rights within the time period as provided herein with respect to all
of the shares, the shareholder shall be free for a period of forty-five (45)
days thereafter to transfer all of the shares to the transferee identified in
the written notice to the Corporation.
4. After giving any notice of intended transfer of any shares of the stock
pursuant to this Article 5.B.2. or 3., the shareholder, unless requested by the
other shareholders of the Corporation holding a majority of the Corporation's
outstanding shares of capital stock, not including the shares of the stock held
by the shareholder, shall refrain from participating as an officer, director or
shareholder of the Corporation with respect to the Corporation's decision on
whether or not to acquire the shares and, if so requested to participate, the
shareholder shall cooperate with the other shareholders and the Corporation in
every reasonable way to effectuate the purpose of this Article 5.B. Except as
provided in this Article 5.B, the shareholder shall be bound by the restrictions
and limitations imposed by this Article 5.B after any notice of a desire to
transfer is given and whether or not any such transfer actually occurs. As a
condition precedent to the effectiveness of any transfer of shares to any person
or entity, such transferee shall agree in writing to be bound by all of the
terms and conditions of this Article 5B.
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C. Stock Certificates. Each certificate representing shares of the Stock
shall have endorsed thereon a legend in substantially the following form:
The shares represented by this certificate and any sale,
transfer, or other disposition thereof are restricted under
and subject to the terms and conditions contained in Article 5
of the Corporation's Articles of Incorporation, a copy of
which is on file at the offices of the Corporation.
Any attempted or purported sale, transfer, assignment, encumbrance, pledge,
hypothecation or other disposition or alienation of any of the shares of the
Stock by a shareholder in violation of this Article 5 shall be null, void and
ineffectual, and shall not operate to transfer any right, title or interest
whatsoever in or to such shares of the Stock.
D. Amendment. The provision of this Article 5, may not be amended, altered
or repealed except by the affirmative vote of holders of at least seventy five
percent (75%) of the shares of the capital stock of the Corporation issued and
outstanding and entitled to vote, at any regular or special meeting of the
shareholders if notice of the proposed amendment, alteration or repeal be
contained in the notice of meeting.
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ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Waumandee Bancshares, Ltd.
Text of Amendment
RESOLVED, THAT, the articles of incorporation be amended as follows:
That Article 2 of the Articles of Incorporation be amended to include
the following, to immediately follow the sentence "The corporation shall be
authorized to issue 1,200 shares."
"The par value of each share shall be $100.00."
B. Amendment(s) adopted on____________________
Indicate the method of adoption by checking the appropriate choice
below:
( ) In accordance with sec. 180.1002, Wis. Stats. (By the Board of
Directors)
OR
( ) In accordance with sec. 180.1003, Wis. Stats. (By the board of
Directors and Shareholders)
OR
(X) In accordance with sec. 180.1005, Wis. Stats. (By Incorporators or
Board of Directors, before issuance of shares)
C. Executed on behalf of the corporation on:_____________________
/s/ John E. Knight
John E. Knight
Incorporator
D. This document was drafted by John E. Knight.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 20. Indemnification of Officers and Directors.
Sections 180.0850 through 180.0859 of the Wisconsin Statutes permit and in
some cases require indemnification of directors, officers, employees, and agents
of a Wisconsin corporation. In general, such indemnification is required unless
the person violates a duty of loyalty or a duty of care as specifically set
forth in the statutes. Section 180.0851, Wis. Stats.
Article VII of the registrant's bylaws provide for indemnification of
officers and directors under terms and conditions that follow the statutory
language cited above. A complete copy of the bylaws is included in Exhibit 3
hereto.
Item 21. Exhibits and Financial Statement.
Schedules
(a) Exhibits. The following exhibits are submitted:
Exhibit No. Description
2 Agreement and Plan of Reorganization (set forth as an exhibit to
the Prospectus)
3 Articles of Incorporation (set forth as an exhibit to the
Prospectus) and bylaws of Waumandee Bancshares, Ltd.
4 Specimen stock certificate of Waumandee Bancshares, Ltd.
5 Opinion of Boardman, Suhr, Curry & Field LLP
8 Tax Opinion of Boardman, Suhr, Curry & Field LLP (set forth as an
exhibit to the Prospectus)
23 Consent of Boardman, Suhr, Curry & Field LLP (included in
opinion)
99 Form of Proxy for shareholders of Waumandee State Bank
(b) No financial statement schedules are required to be filed with
regard to Waumandee Bancshares, Ltd. or Waumandee State Bank.
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Item 22. Undertakings.
(1) The registrant will file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended ("Act");
(ii) Reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or together,
represent a fundamental change in the information in the registration
statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Act, the registrant will treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) The registrant will file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
(4) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(5) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(6) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against liability arising under the Act (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
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precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Waumandee, State of
Wisconsin, on the 16th day of December, 1999.
WAUMANDEE BANCSHARES, LTD.
By:
/s/ Paul R. Lorenz
Paul R. Lorenz, Secretary/Treasurer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities
indicated on the 16th day of December, 1999.
Signature Title(s)
- --------- --------
/s/ C. Michael Chambers Director
C. Michael Chambers
/s/ William M. Christ Director
William M. Christ
/s/ Warren E. Korte President, Director
Warren E. Korte
/s/ Paul R. Lorenz Secretary, Treasurer, Director
Paul R. Lorenz
/s/ Gary U. Pronschinske Director
Gary U. Pronschinske
/s/ Gerald R. Wojchik Director
Gerald R. Wojchik
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-4EF
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------
WAUMANDEE BANCSHARES, LTD.
(Exact name of registrant as specified in its charter)
E X H I B I T S
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INDEX TO EXHIBITS
Exhibit No. Description
2 Agreement and Plan of Reorganization (set forth as an exhibit to
the Prospectus)
3 Articles of Incorporation (set forth as an exhibit to the
Prospectus) and bylaws of Waumandee Bancshares, Ltd.
4 Specimen stock certificate of Waumandee Bancshares, Ltd.
5 Opinion of Boardman, Suhr, Curry & Field LLP
8 Tax Opinion of Boardman, Suhr, Curry & Field LLP (set forth as an
exhibit to the Prospectus)
23 Consent of Boardman, Suhr, Curry & Field LLP (included in
opinion)
99 Form of Proxy for shareholders of Waumandee State Bank
EXHIBIT 3(ii)
BYLAWS OF
WAUMANDEE BANCSHARES, LTD.
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BYLAWS OF
WAUMANDEE BANCSHARES, LTD.
ARTICLE I. OFFICES
The principal office of the Corporation shall be located in Waumandee,
Buffalo County, Wisconsin.
ARTICLE II. SHAREHOLDERS
SECTION l. Annual Meeting. The annual meeting of the Shareholders shall be
held at such place, on such date, and at such time as the Board of Directors
shall each year fix for the purposes of electing Directors and for the
transaction of such other business as may come before the meeting. If the
election of Directors is not held on the day designated for any annual meeting
of the Shareholders, or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting of the Shareholders as soon
thereafter as may be convenient.
SECTION 2. Special Meetings. Special meetings of the Shareholders, for any
purpose, unless otherwise prescribed by statute, may be called by the President
or the Board of Directors, and shall be called by the President at the request
of Shareholders owning, in the aggregate, not less than ten percent (10%) of all
the outstanding shares of the Corporation entitled to vote at the meeting,
provided that such Shareholders deliver a signed and dated written demand to the
Corporation, describing the purpose(s) for which the meeting is to be held.
SECTION 3. Place of Meeting. The President may designate any place, either
within or without the State of Wisconsin, as the place of meeting for any annual
meeting or for any special meeting called by the Board of Directors. If no
designation is made, or if a special meeting is otherwise called, the place of
meeting shall be the principal office of the Corporation in the State of
Wisconsin. Any meeting may be adjourned to reconvene at any place designated by
vote of a majority of the shares represented at the meeting.
SECTION 4. Notice of Meeting. Written notice stating the place, day and
hour of the meeting, and, in case of a special meeting, the purpose for which
the meeting is called, shall be delivered not less than ten (10) days (unless a
longer period is required by law) nor more than sixty (60) days before the date
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of the meeting, either personally or by mail, by or at the direction of the
President or the Secretary, to each Shareholder of record entitled to vote at
the meeting. If mailed, the notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the Shareholder at his or her
address as it appears on the stock record books of the Corporation, postage
prepaid.
SECTION 5. Quorum; Manner of Acting. Except as otherwise provided by law,
the Articles of Incorporation or these Bylaws, a majority of the outstanding
shares of the Corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of Shareholders and a majority of votes
cast at any meeting at which a quorum is present shall be decisive of any
motion, except that each Director shall be elected by a plurality of the votes
cast by the shares entitled to vote. Though less than a quorum of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the original
meeting.
SECTION 6. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining Shareholders entitled to notice of or to vote at any
meeting of Shareholders or any adjournment thereof, or Shareholders entitled to
receive payment of any dividend, or in order to make a determination of
Shareholders for any other proper purpose, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, sixty (60) days. If the stock transfer books shall be
closed for the purpose of determining Shareholders entitled to notice of or to
vote at a meeting of Shareholders, such books shall be closed for at least ten
(10) days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the record
date for any such determination of Shareholders, such date in any case to be not
more than sixty (60) days and, in case of a meeting of Shareholders, not less
than ten (10) days prior to the date on which the particular action, requiring
such determination of Shareholders, is to be taken. If the stock transfer books
are not closed and no record date is fixed for the determination of Shareholders
entitled to notice of or to vote at a meeting of Shareholders, or Shareholders
entitled to receive payment of a dividend, the close of business on the date
next preceding the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such determination of
Shareholders. When a determination of Shareholders entitled to vote at any
meeting of Shareholders has been made as provided in this section, such
determination shall be applied to any adjournment thereof except where the
determination has been made through the closing of the stock transfer books and
the stated period of closing has expired.
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SECTION 7. Proxies. At all meetings of Shareholders, a Shareholder entitled
to vote may vote by proxy appointed in writing by the Shareholder or by his or
her duly authorized attorney in fact. Proxies shall be filed with the Secretary
of the Corporation before or at the time of the meeting. No proxy shall be valid
after eleven (11) months from the date of its execution, unless otherwise
provided in the proxy. A proxy may be revoked at any time before it is voted,
either by written notice filed with the Secretary of the Corporation or the
acting secretary of the meeting, or by oral notice given by the Shareholder to
the presiding officer during the meeting. The Board of Directors shall have the
power and authority to make rules establishing presumptions as to the validity
and sufficiency of proxies. Proxies may be subject to the examination by any
Shareholder at the meeting, and all proxies shall be filed and preserved.
SECTION 8. Voting of Shares. Each outstanding share entitled to vote shall
be entitled to one (l) vote upon each matter submitted to a vote at a meeting of
Shareholders, except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Articles of Incorporation.
SECTION 9. Voting of Shares by Certain Shareholders. Shares standing in the
name of another corporation may be voted either in person or by proxy, by the
president of such corporation or any other officer appointed by such president.
A proxy executed by any principal officer of such other corporation or assistant
thereto shall be conclusive evidence of the signer's authority to act, in the
absence of express notice to this Corporation, given in writing to the Secretary
of this Corporation, of the designation of some other person by the board of
directors or the bylaws of such other corporation. A Shareholder whose shares
are pledged shall be entitled to vote such shares until the shares have been
transferred into the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
SECTION 10. Waiver of Notice by Shareholders. Whenever any notice is
required to be given to any Shareholder of the Corporation under the Articles of
Incorporation, these Bylaws or any provision of law, a waiver of such notice, in
writing, signed at any time (whether before or after the time of meeting) by the
Shareholder entitled to such notice, shall be deemed equivalent to the giving of
such notice. A waiver with respect to any matter of which notice is required
under any provision of Chapter 180, Wisconsin Statutes, shall contain the same
information as would have been required to be included in the notice, except the
time and place of meeting.
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ARTICLE III. BOARD OF DIRECTORS
SECTION l. General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors.
SECTION 2. Number of Directors. The number of Directors of the Corporation
shall be not less than five (5) nor more than ten (10), the exact number of
Directors to be determined from time to time by resolution adopted by a majority
of the entire Board of Directors, and such exact number shall be six (6) until
otherwise determined by resolution adopted by a majority of the entire Board of
Directors. As used in this Section, "entire Board of Directors" means the total
number of Directors which the Corporation would have if there were no vacancies.
Whenever the authorized number of Directors is increased between annual meetings
of the Shareholders, a majority of the Directors then in office shall then have
the power to elect such new Directors for the balance of a term and until their
successors are elected and qualified. Any decrease in the authorized number of
Directors shall not become effective until the expiration of the term of the
Directors then in office unless, at the time of such decrease, there shall be
vacancies on the Board which were being eliminated by the decrease.
SECTION 3. Election and Term. The Directors shall be elected by the
Shareholders at the regular annual meeting of Shareholders. Each Director shall
hold office until the annual meeting of Shareholders occurring at the end of the
term to which such Director is elected or appointed in accordance with the
Articles of Incorporation of the Corporation and until his or her successor has
been elected or until his or her death, resignation or removal in the manner
provided in this Article. The persons receiving the greatest number of votes
shall be the persons elected.
SECTION 4. Regular Meetings. The Board of Directors may provide, by
resolution, the time and place, either within or without the State of Wisconsin,
for the holding of regular meetings of the Board of Directors without other
notice than such resolution.
SECTION 5. Special Meetings. Special meetings of the Board of Directors may
be called at any time by or at the request of the President, and shall be called
at the request of three or more directors. The person or persons authorized to
call special meetings of the Board of Directors may fix any place, either within
or without the State of Wisconsin, as the place for holding any special meeting
of the Board of Directors called by them.
SECTION 6. Notice. Notice of any special meeting shall be given at least
forty-eight (48) hours in advance of the meeting by written notice delivered
personally or mailed to each Director at his or her business address, or by
telegram. If mailed, the notice shall be deemed to be delivered when deposited
in the United States mail so addressed with postage prepaid. If notice is given
by telegram, it shall be deemed to be delivered when the telegram is delivered
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to the telegraph company. Whenever any notice is required to be given to any
Director of the Corporation under the Articles of Incorporation, these Bylaws or
any provision of law, a waiver of such notice, in writing, signed at any time
(whether before or after the time of meeting) by the Director entitled to such
notice, shall be deemed equivalent to the giving of such notice. The attendance
of a Director at a meeting shall constitute a waiver of notice of that meeting,
except where a Director attends a meeting and at the meeting objects to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
SECTION 7. Quorum. Except as otherwise provided by law, the Articles of
Incorporation, or these Bylaws, a majority of the number of Directors then in
office shall constitute a quorum for the transaction of business at any meeting
of the Board of Directors, but a majority of the Directors present (though less
than such quorum) may adjourn the meeting from time to time without further
notice.
SECTION 8. Participation in Meetings By Conference Telephone. Members of
the Board of Directors, or of any committee of the Board, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communication equipment by which all persons participating in the meeting can
hear each other and such participation shall constitute presence in person at
such meeting. All participating Directors shall be informed that a meeting is
taking place at which official business may be transacted by conference
telephone or similar communication equipment.
SECTION 9. Manner of Acting. The act of the majority of the Directors then
in office shall be the act of the Board of Directors, unless the act of a
greater number is required by law, the Articles of Incorporation, or these
Bylaws.
SECTION 10. Removal and Resignation. Any Director may be removed, with or
without cause, at any meeting of the Shareholders by the affirmative vote of a
majority of the outstanding shares entitled to vote for the election of such
Director, taken at a special meeting of Shareholders called for that purpose. A
Director may resign at any time by filing his or her written resignation with
the Secretary of Corporation.
SECTION 11. Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of Directors, may be
filled until the next succeeding annual Shareholders' meeting by the affirmative
vote of a majority of the Directors then in office.
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SECTION 12. Compensation. The Board of Directors, irrespective of any
personal interest of any of its members, may establish reasonable compensation
of all Directors for services to the Corporation as Directors, officers or
otherwise, or may delegate such authority to an appropriate committee. The Board
of Directors also shall have authority to provide for, or to delegate authority
to, an appropriate committee to provide for reasonable pensions, disability or
death benefits, and other benefits or payments, to Directors, officers and
employees and to their estates, families, dependents, or beneficiaries on
account of prior services rendered to the Corporation.
SECTION 13. Presumption of Assent. A Director of the Corporation who is
present at a meeting of the Board of Directors or a committee thereof at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless the dissent or abstention of the Director shall be
entered in the minutes of the meeting or unless the Director shall file a
written dissent to such action with the person acting as the Secretary of the
meeting before adjournment or shall forward such dissent by certified mail to
the Secretary of the Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a Director who voted in favor
of such action.
SECTION 14. Committees. The Board of Directors may designate one or more
committees, each committee to consist of three or more Directors elected by the
Board of Directors, which to the extent provided in said resolution shall have
and may exercise, when the Board of Directors is not in session, the powers of
the Board of Directors in the management of the business and affairs of the
Corporation, except action in respect to dividends to Shareholders, election of
the principal officers, action under or pursuant to the Articles of
Incorporation, amendment, alteration or repeal of these Bylaws, or the removal
or filling of vacancies in the Board of Directors or committees created pursuant
to this section. The Board of Directors may elect one or more of its members as
alternate members of any such committee who may take the place of any absent
member or members at any meeting of such committee, upon request by the
President or upon request by the chairman of such meeting. Each such committee
shall fix its own rules governing the conduct of its activities and shall make
such reports to the Board of Directors of its activities as the Board of
Directors may request.
SECTION 15. Informal Action Without Meeting. Any action required or
permitted by the Articles of Incorporation, these Bylaws, or any provision of
law to be taken by the Board of Directors at a meeting or by resolution may be
taken without a meeting if a consent in writing, setting forth the action so
taken, is signed by all of the Directors then in office.
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ARTICLE IV. OFFICERS
SECTION l. Number, Election and Term of Office. The principal Officers of
the Corporation shall be a President, one (1) or more Vice Presidents, a
Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other Officers and Assistant Officers as may be deemed necessary
may be elected or appointed by the Board of Directors. Any two or more offices
may be held by the same person. Each Officer shall hold office until the next
annual meeting of Shareholders and his or her successor shall have been duly
elected or until his or her death or until he or she resigns or is removed in
the manner provided below.
SECTION 2. Removal. Any Officer or agent elected or appointed by the Board
of Directors may be removed by the Board of Directors whenever in its judgment
the best interests of the Corporation will be served thereby. Any such removal
shall be without prejudice to the contract rights, if any, of the person being
removed. Election or appointment shall not of itself create contract rights.
SECTION 3. Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification, or otherwise, shall be filled by the
Board of Directors.
SECTION 4. President. The President shall be the principal executive
officer of the Corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the Corporation. The President shall, when present, preside at all
meetings of the Shareholders and of the Board of Directors. The President shall
have authority, subject to such rules as may be prescribed by the Board of
Directors, to appoint such agents and employees of the Corporation as he shall
deem necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold office at the
discretion of the President. The President shall have authority to sign,
execute, and acknowledge, on behalf of the Corporation, all deeds, mortgages,
bonds, stock certificates, contracts, leases, reports, and all other documents
or instruments necessary or proper to be executed in the course of the
Corporation's regular business, or which shall be authorized by resolution of
the Board of Directors. Except as otherwise provided by law or the Board of
Directors, the President may authorize any Vice President or other Officer or
agent of the Corporation to sign, execute, and acknowledge such documents or
instruments in his place and stead. In general, the President shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 5. The Vice President. In the case of the removal of the President
from office, or death or resignation, the powers and duties of the office shall
devolve upon the Vice President, who shall perform all duties of the office
until a meeting of the directors is held and a President is elected. The Board
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of Directors shall empower a Vice President to discharge the duties of the
President in the event of absence or disability of the President. In general,
the Vice President shall perform all duties incident to the office of Vice
President and such other duties as may be prescribed by the Board of Directors
and the President from time to time.
SECTION 6. The Secretary. The Secretary shall: (a) keep the minutes of the
Shareholders' and of the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these Bylaws or as required by law; (c) be custodian of
the corporate records; (d) keep a register of the post office address of each
Shareholder which shall be furnished to the Secretary by such Shareholder; (e)
sign with the President, or Vice President, certificates for shares of the
Corporation, the issuance of which shall have been authorized by resolution of
the Board of Directors; (f) have general charge of the stock transfer books of
the Corporation; and (g) in general, perform all duties incident to the office
of Secretary and have such other duties and exercise such authority as from time
to time may be designated or assigned to the Secretary by the President or by
the Board of Directors.
SECTION 7. The Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his or her duties in
such sum and with such surety or sureties as the Board of Directors shall
determine. The Treasurer shall: (a) have charge and custody of and be
responsible for all funds and securities of the Corporation; receive and give
receipts for monies due and payable to the Corporation from any source
whatsoever; and deposit all such monies in the name of the Corporation, in such
banks or other depositories as shall be selected in accordance with the
provisions of ARTICLE V of these Bylaws; and (b) in general, perform all of the
duties incident to the office of Treasurer and have such other duties and
exercise such other authority as from time to time may be delegated or assigned
to the Treasurer by the President or by the Board of Directors.
SECTION 8. Compensation. The compensation of the Officers shall be fixed
from time to time by the Board of Directors and no Officer shall be prevented
from receiving such compensation by reason of the fact that he or she is also a
Director of the Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION l. Contracts. The Board of Directors may authorize any Officer or
Officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such
authorization may be general or confined to specific instances.
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SECTION 2. Loans. No loans may be contracted on behalf of the Corporation
and no evidences of indebtedness may be issued in its name unless authorized by
or under the authority of a resolution of the Board of Directors. Such
authorization may be general or confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts, or other orders for the
payment of money, notes, or other evidences of indebtedness issued in the name
of the Corporation shall be signed by such Officer or Officers, agent or agents
of the Corporation and in such manner as shall from time to time be determined
by or under the authority of a resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies, or other depositories as may be selected by or under the
authority of the Board of Directors.
SECTION 5. Voting of Securities Owned by this Corporation. Subject always
to the specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
Corporation may be voted at any meeting of security holders of such other
corporation by the President of this Corporation if he be present, or, in his
absence, by the Vice President of this Corporation, and (b) whenever, in the
judgment of the President, or in his absence, the Vice President, it is
desirable for this Corporation to execute a proxy or written consent in respect
to any shares or other securities issued by any other corporation and owned by
this Corporation, such proxy or consent shall be executed in the name of this
Corporation by the President or Vice President of this Corporation, without
necessity of any authorization by the Board of Directors, affixation of
corporate seal or countersignature or attestation by another officer. Any person
or persons designated in the manner above stated as the proxy or proxies of this
Corporation shall have full right, power, and authority to vote the shares or
other securities issued by such other corporation and owned by this Corporation
the same as such shares or other securities might be voted by this Corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION l. Certificates for Shares. Certificates representing shares of the
Corporation shall be in such form as shall be determined by the Board of
Directors. Each certificate shall be signed by the President and by the
Secretary. All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom the shares
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represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be canceled and
no new certificates shall be issued until the former certificates for a like
number of shares shall have been surrendered and canceled, except that in case
of a lost, destroyed, or mutilated certificate a new one may be issued therefor
upon such terms and indemnity to the Corporation as the Board of Directors may
prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the Corporation shall
be made only on the stock transfer books of the Corporation by the holder of
record or by his or her legal representative, who shall furnish proper evidence
of authority to transfer, or by the holder's attorney authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes.
SECTION 3. Restriction Upon Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the Corporation upon the transfer of such shares.
SECTION 4. Price of Shares Redeemed by Corporation Pursuant to Right of
Redemption of Shares to be Transferred. If the Corporation elects to redeem
shares pursuant to the Corporation's right of redemption under Article 5,
Section B. 3. of the Corporation's Articles of Incorporation, the price at which
such option may be exercised is equal to 96% of the "Book Value" of such shares.
"Book Value" is defined as stockholder equity in the Waumandee State Bank plus
any unrealized losses and minus any unrealized gains on securities held in the
available for sale account of the Bank. Book Value shall be determined as of the
end of the most recent calendar quarter ended prior to receipt of written notice
of redemption from the Corporation.
SECTION 5. Lost, Destroyed or Stolen Certificates. Where the owner claims
that his or her certificate for shares has been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner (a) so
requests before the Corporation has notice that such shares have been acquired
by a bona fide purchaser, (b) files with the Corporation a sufficient indemnity
bond, and (c) satisfies such other reasonable requirements as the Board of
Directors may prescribe.
SECTION 6. Consideration for Shares. The shares of the Corporation may be
issued for such consideration as shall be fixed from time to time by the Board
of Directors. The consideration to be paid for shares may be paid in whole or in
part in money, in other property, tangible or intangible, or in labor or
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services actually performed for the corporation. When payment of the
consideration for which shares are to be issued shall have been received by the
Corporation, such shares shall be deemed to be fully paid and nonassessable by
the Corporation, except as required by law. No certificate shall be issued for
any share until such share is fully paid.
SECTION 7. Stock Regulations. The Board of Directors shall have the power
and authority to make all such further rules and regulations not inconsistent
with the statutes of the State of Wisconsin as it may deem expedient concerning
the issue, transfer and registration of certificates representing shares of the
Corporation.
ARTICLE VII. LIABILITY AND INDEMNIFICATION OF
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS; INSURANCE
SECTION 1. Liability of Directors. No Director shall be liable to the
Corporation, its Shareholders, or any person asserting rights on behalf of the
Corporation or its Shareholders, for damages, settlements, fees, fines,
penalties, or other monetary liabilities arising from a breach of, or a failure
to perform, any duty resulting solely from his or her status as a Director of
the Corporation (or from his or her status as a director, officer, partner,
trustee, member of any governing or decision-making committee, employee or agent
of another corporation or foreign corporation, partnership, joint venture, trust
or other enterprise, including service to an employee benefit plan, which
capacity the Director is or was serving in at the Corporation's request while a
Director of the Corporation) to the fullest extent not prohibited by law, as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent such amendment permits the Corporation to further limit or
eliminate the liability of a Director than the law permitted the Corporation to
provide prior to such amendment); provided, however, that this limitation on
liability shall not apply where the breach or failure to perform constitutes (a)
a willful failure to deal fairly with the Corporation or its Shareholders in
connection with a matter in which the Director has a material conflict of
interest; (b) a violation of criminal law, unless the Director had reasonable
cause to believe his or her conduct was lawful or no reasonable cause to believe
his or her conduct was unlawful; (c) a transaction from which the Director
derived an improper personal benefit; or (d) willful misconduct.
SECTION 2. Liability of Officers. No Officer shall be liable to the
Corporation for any loss or damage suffered by it on account of any action taken
or omitted to be taken by him or her as an officer of the Corporation (or as an
officer, director, partner, trustee, member of any governing or decision-making
committee, employee or agent of another corporation or foreign corporation,
partnership, joint venture, trust or other enterprise, including service to an
employee benefit plan, which capacity the Officer is or was serving in at the
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Corporation's request while being an Officer of the Corporation) in good faith,
if such person (a) exercised and used the same degree of care and skill as a
prudent person would have exercised or used under the circumstances in the
conduct of his or her own affairs, or (b) took or omitted to take such action in
reliance upon information, opinions, reports or statements prepared or presented
by: (1) an officer or employee of the Corporation whom the officer believed in
good faith to be reliable and competent in the matters presented, or (2) legal
counsel, public accountants and other persons as to matters the officer believed
in good faith were within the person's professional or expert competence.
SECTION 3. Indemnification of Directors, Officers, Employees and Agents.
(a) Right of Directors and Officers to Indemnification. Any person shall be
indemnified and held harmless to the fullest extent permitted by law, as the
same may exist or may hereafter be amended (but, in the case of any such
amendment, only to the extent such amendment permits the Corporation to provide
broader indemnification rights than the law permitted the Corporation to provide
prior to such amendment), from and against all reasonable expenses (including
fees, costs, charges, disbursements, attorney fees and any other expenses) and
liability (including the obligation to pay a judgment, settlement, penalty,
assessment, forfeiture or fine, including an excise tax assessed with respect to
an employee benefit plan) asserted against, incurred by or imposed on him or her
in connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative ("proceeding") to which he or she is made or
threatened to be made a party by reason of his or her being or having been a
Director or Officer of the Corporation (or by reason of, while serving as a
Director or Officer of the Corporation, having served at the Corporation's
request as a director, officer, partner, trustee, member of any governing or
decision-making committee, employee or agent of another corporation or foreign
corporation, partnership, joint venture, trust or other enterprise, including
service to an employee benefit plan); provided, however, in situations other
than a successful defense of a proceeding, the Director or Officer shall not be
indemnified where he or she breached or failed to perform a duty to the
Corporation and the breach or failure to perform constitutes (a) a willful
failure to deal fairly with the Corporation or its Shareholders in connection
with the matter in which the Director or Officer has a material conflict of
interest; (b) a violation of criminal law, unless the Director or Officer had
reasonable cause to believe his or her conduct was lawful or no reasonable cause
to believe his or her conduct was unlawful; (c) a transaction from which the
Director or Officer derived an improper personal benefit; or (d) willful
misconduct. Such rights to indemnification shall include the right to be paid by
the Corporation reasonable expenses as incurred in defending such proceeding;
provided, however, that payment of such expenses as incurred shall be made only
upon such person delivering to the Corporation (a) a written affirmation of his
or her good faith belief that he or she has not breached or failed to perform
his or her duties to the Corporation, and (b) a written undertaking, executed
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personally or on his or her behalf, to repay the allowance to the extent it is
ultimately determined that such person is not entitled to indemnification under
this provision. The Corporation may require that the undertaking be secured and
may require payment of reasonable interest on the allowance to the extent that
it is ultimately determined that such person is not entitled to indemnification.
(b) Right of Director or Officer to Bring Suit. If a claim under subsection
(a) is not paid in full by the Corporation within 30 days after a written claim
has been received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be entitled to be
paid also the reasonable expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking has been tendered to the Corporation)
that the claimant has not met the standards of conduct under this Section which
make it permissible for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
(c) Indemnification For Intervention, Etc. The Corporation shall not,
however, indemnify a Director or Officer under this Section for any liability
incurred in a proceeding otherwise initiated (which shall not be deemed to
include counterclaims or affirmative defenses) or participated in as an
intervenor by the person seeking indemnification unless such initiation of or
participation in the proceeding is authorized, either before or after its
commencement, by the affirmative vote of the majority of the Directors in
Office.
(d) Right of Employees and Agents to Indemnification. The Corporation by
its Board of Directors may on such terms as the Board deems advisable indemnify
and allow reasonable expenses of any employee or agent of the Corporation with
respect to any action taken or failed to be taken in his or her capacity as such
employee or agent.
SECTION 4. Contract Rights; Amendment or Repeal. All rights under this
Article shall be deemed a contract between the Corporation and the Director or
Officer pursuant to which the Corporation and the Director or Officer intend to
be legally bound. Any repeal, amendment or modification of this Article shall be
prospective only as to conduct of a Director or Officer occurring thereafter,
and shall not affect any rights or obligations then existing.
SECTION 5. Scope of Article. The rights granted by this Article shall not
be deemed exclusive of any other rights to which a Director, Officer, employee
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or agent may be entitled under any statute, agreement, vote of Shareholders or
disinterested Directors or otherwise. The indemnification and advancement of
expenses provided by or granted pursuant to this Article shall continue as to a
person who has ceased to be a Director or Officer in respect to matters arising
prior to such time, and shall inure to the benefit of the heirs, executors,
administrators and personal representatives of such a person.
SECTION 6. Insurance. The Corporation may purchase and maintain insurance,
at its expense, to protect itself and any person who is a Director, Officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, partner, trustee, member of any governing or
decision-making committee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service to an
employee benefit plan, against any liability asserted against that person or
incurred by that person in any such capacity, or arising out of that person's
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under this Article.
SECTION 7. Prohibited Indemnification and Insurance. Notwithstanding any
other Section in this Article, the Corporation shall not be required to
indemnify and may not purchase and maintain insurance if such indemnification or
insurance is prohibited under applicable federal law or regulation, but shall
indemnify and may purchase and maintain insurance in accordance with this
Article to the extent such indemnification and insurance is not prohibited under
applicable federal law or regulation.
ARTICLE VIII. TRANSACTIONS WITH
CORPORATION; DISALLOWED EXPENSE
SECTION 1. Transactions with the Corporation. Any contract or other
transaction between the Corporation and one or more of its Directors, or between
the Corporation and any firm of which one or more of its Directors are members
or employees, or in which they are interested, or between the Corporation and
any corporation or association of which one or more of its Directors are
Shareholders, members, directors, officers, or employees, or in which they are
interested, shall be valid for all purposes, notwithstanding the presence of
such Director or Directors at the meeting of the Board of Directors of the
Corporation, which acts upon, or in reference to, such contract or transaction,
and notwithstanding his or their participation in such action, if the fact of
such interest shall be disclosed or known to the Board of Directors and the
Board of Directors shall, nevertheless, authorize, approve and ratify such
contract or transaction by a vote of a majority of the Directors present, such
interested Director or Directors to be counted in determining whether a quorum
is present, but not counted in calculating the majority of such quorum necessary
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to carry such vote. This Section shall not be construed to invalidate any
contract or other transaction which would otherwise be valid under the common
and statutory law applicable thereto.
SECTION 2. Reimbursement of Disallowed Expenses. In the event any payment
(either as compensation, interest, rent, expense reimbursement or otherwise) to
any Officer, Director or Shareholder which is claimed as a deduction by this
Corporation for federal income tax purposes shall subsequently be determined not
to be deductible in whole or in part by this Corporation, the recipient shall
reimburse the Corporation for the amount of the disallowed payment, provided
that this provision shall not apply to any expense where the Board, in its sole
discretion, determines such disallowance (including any concession of such issue
by the Corporation in connection with the settlement of other issues in a
disputed case) is manifestly unfair and contrary to the facts. For purposes of
this provision, any such payment shall be determined not to be deductible when
and only when either (a) the same may have been determined by a court of
competent jurisdiction and either the Corporation shall not have appealed from
such determination or the time for perfecting an appeal shall have expired or
(b) such disallowed deduction shall constitute or be contained in a settlement
with the Internal Revenue Service which settlement may have been authorized by
the Board of Directors.
ARTICLE IX. FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st day of January
and end on the 31st day of December in each year.
ARTICLE X. DIVIDENDS
The Board of Directors may from time to time declare, and the Corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Articles of Incorporation.
ARTICLE XI. SEAL
The Corporation shall not have a corporate seal, and all formal corporate
documents shall carry the designation "No Seal" along with the signature of the
Officers.
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ARTICLE XII. AMENDMENT
SECTION 1. By Shareholders. These Bylaws may be altered, amended or
repealed and new Bylaws may be adopted by the Shareholders by affirmative vote
of not less than a majority of the outstanding shares of the Corporation
entitled to vote.
SECTION 2. By Directors. These Bylaws may also be altered, amended or
repealed and new Bylaws may be adopted by the Board of Directors by affirmative
vote of not less than a majority of the directors then in office; but no Bylaw
adopted by the Shareholders shall be amended or repealed by the Board of
Directors if the Bylaw so adopted so provides.
SECTION 3. Implied Amendments. Any action taken or authorized by the
Shareholders which would be inconsistent with the Bylaws then in effect but is
taken or authorized by affirmative vote of not less than the number of shares
required to amend the Bylaws so that the Bylaws would be consistent with such
action shall be given the same effect as though the Bylaws had been temporarily
amended or suspended so far, but only so far, as is necessary to permit the
specific action so taken or authorized.
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EXHIBIT 4
STOCK CERTIFICATE
<PAGE>
SPECIMEN
STOCK CERTIFICATE
NUMBER: SHARES:
RESTRICTED STOCK
Incorporated under the laws of the State of Wisconsin.
WAUMANDEE BANCSHARES, LTD.
Authorized Common _____ Shares $100 Par Value
This certifies that ______________________ is the owner of
______________________ (common shares--_________ value) full paid and
non-assessable transferable on the books of the Corporation in person or by duly
authorized Attorney upon surrender of this Certificate properly endorsed.
IN WITNESS WHEREOF the said Corporation has caused this Certificate to be
signed by its duly authorized officers and sealed with the Seal of the
Corporation this _____ day of ___________ A.D., _____.
________________________________ ________________________________
Secretary President
ON REVERSE:
FOR VALUE RECEIVED, _____ hereby sell, assign and transfer unto
______________________________________________ __________ Shares represented by
the within Certificate, and do hereby irrevocably constitute and appoint
_____________________________ Attorney to transfer the said Shares on the books
of the within named Corporation with full power of substitution in the premises.
Dated ______________________, _____.
In presence of:
_______________________________
_______________________________
THE SHARES REPRESENTED BY THIS CERTIFICATE AND ANY SALE,
TRANSFER, OR OTHER DISPOSITION THEREOF ARE RESTRICTED UNDER
AND SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN ARTICLE
5(C) OF THE CORPORATION'S ARTICLES OF INCORPORATION, A COPY OF
WHICH IS ON FILE AT THE OFFICES OF THE CORPORATION.
EXHIBIT 5
OPINION OF BOARDMAN, SUHR, CURRY & FIELD LLP
<PAGE>
SPECIMEN
_______________, ____
Waumandee Bancshares, Ltd.
P.O. Box 69
1606 Commercial Street
Waumandee, WI 54614-0069
Reference is made to the Registration Statement on Form S-4 (the
"Registration Statement") to be filed by Waumandee Bancshares, Ltd. (the
"Corporation") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), with
respect to shares of Common Stock of the Corporation, $100 par value, issuable
by the Corporation in connection with a reorganization ("Common Stock"), as
described in the Prospectus included in the Registration Statement.
As counsel to the Corporation for purposes of the reorganization, we are
familiar with the Articles of Incorporation and the Bylaws of the Corporation.
We also have examined, or caused to be examined, such other documents and
instruments and have made, or caused to be made, such further investigation as
we have deemed necessary or appropriate to render this opinion.
Based upon the foregoing, it is our opinion that:
(1) The Corporation is duly incorporated and validly existing as a
corporation under the laws of the State of Wisconsin.
(2) The shares of Common Stock of the Corporation when issued upon
consummation of the reorganization and delivered to the shareholders
of Waumandee State Bank in accordance with the provisions of the
Agreement and Plan of Reorganization dated_______________, ____, will
be validly issued, fully paid and non-assessable under applicable
Wisconsin law, except for statutory liability under Section
180.0622(2)(b) of the Wisconsin Business Corporation Law.
We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement, and we further consent to the use of our name in the
Registration Statement under the captions "Legal Matters" and "Tax
Considerations." In giving this consent, we do not admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the Rules and Regulations of the Commission issued thereunder.
BOARDMAN, SUHR, CURRY & FIELD LLP
EXHIBIT 99
PROXY
<PAGE>
PROXY
SPECIAL MEETING OF SHAREHOLDERS
Know all men by these presents that I, the undersigned shareholder in
Waumandee State Bank, do hereby appoint Warren E. Korte, C. Michael Chambers,
Paul R. Lorenz, Gary Pronschinske, William M. Christ, Gerald Wojchik, and each
of them individually, my true and lawful attorney, substitute, and proxy, with
power of substitution, for me and in my name to vote at the Special Meeting of
Shareholders of Waumandee State Bank, to be held on ________________ at ____
p.m., local time, or at any adjournment of that meeting, with all powers I
should have if personally present, hereby revoking all proxies heretofore given.
I acknowledge that I have received a Notice of Special Meeting of Shareholders
and a Proxy Statement relating to the meeting. I hereby direct that the
person(s) designated above vote as follows:
(1) FOR [ ] AGAINST [ ] ABSTAIN [ ]
the following resolution:
RESOLVED, that the formation of a bank holding company for Waumandee
State Bank, pursuant to the terms and conditions of an Agreement and Plan
of Reorganization between Waumandee State Bank and Waumandee Bancshares,
Ltd. and a Merger Agreement between Waumandee State Bank and New Waumandee
Bank, whereby (i) Waumandee State Bank will become a wholly-owned
subsidiary of Waumandee Bancshares, Ltd., and (ii) shareholders of
Waumandee State Bank will become shareholders of Waumandee Bancshares,
Ltd., is hereby authorized and approved.
(2) In his/her discretion as to any other matters that may properly come before
the meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE REORGANIZATION.
This proxy, when properly signed, will be voted in the manner directed by
the undersigned shareholder. If the manner in which to vote is not supplied, the
undersigned shareholder will be deemed to have designated a vote "FOR" the
formation of the bank holding company.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN THIS PROXY, USING THE ENCLOSED ENVELOPE.
Please sign exactly as your name appears on your stock certificates. When shares
are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Dated: ______________________
_______________________________________
Signature
