Class Vote by Stockholders
Merger
Reorganizations Approved Judicially
Stockholders' Class Vote
Sale of Assets
Share Exchange
Consolidation
Reclassification of Securities

Statute:  § 551.23(13), Wis. Stats.

Used for:  (a) Transactions incident to a class vote by stockholders on a merger, sale of assets or share exchange; or (b) transactions involving issuance of securities in a judicially approved reorganization.

Filing requirement: Self-Executing; Advertising Filing Requirement. No filing or Consent to Service of Process is necessary in order to claim this exemption. However, if any advertising is "published" or "circulated," as defined in § DFI-Sec 1.02(1)(a) and (b), Wis. Adm. Code, in connection with this transaction or the securities underlying this transaction, it must be filed with the Division and may not be used unless and until the Division has allowed its use. If advertising is filed, a fee of $10 per item, as set forth at § DFI-Sec 7.01(4), Wis. Adm. Code, must accompany the filing.

Administrative Code references: §§ DFI-Sec 2.02(6),  2.02(9)(d), and 7.02, Wis. Adm. Code.

Frequently asked questions:

Q: Is this exemption self-executing?

    A: Yes. No filing or Consent to Service of process is required. However, if any advertising is published or circulated, it must be filed with the Division and may not be used unless and until the Division has allowed its use. If advertising is filed, a fee of $10 per item, as set forth in § DFI-Sec 7.01(4), Wis. Adm. Code, must accompany the filing.

Q: May a non­corporate entity claim this exemption?

    A:  No.  See § DFI-Sec 2.02(9)(d), Wis. Adm. Code, under the discretionary exemption set forth in § 551.23(18), Wis. Stats., for a self-executing exemption for reorganization transactions by non-corporate entities such as business trusts or partnerships.

Important interpretive letters:

10/29/92 letter re:  B­E Holdings, Inc.   Warrants to purchase up to 4.2 million shares of Holdings common stock were issued to former shareholders of Bucyrus-Erie, and were redeemable within 90 days.  These warrants qualified for the exemption set forth in  § 551.23(13), Wis. Stats., because they were distributed incident to the 1988 merger of Holdings and Bucyrus-Erie which was pursuant to approval by vote of Bucyrus-Erie stockholders under the applicable corporation statute for which the "merger" registration exemption in  § 551.23(13), Wis. Stats., was applicable.

1/29/88 letter re:  Summit Energy, Inc.   Because the distribution of common shares of [a wholly owned subsidiary of Summit] to Summit common and preferred security holders through a trust mechanism was pursuant to a reorganization requiring approval by class vote of the Summit common stockholders and preferred stockholders, such distribution to Wisconsin common and preferred security holders of Summit constituted exempt transactions under § 551.23(13), Wis. Stats.

1/9/85 letter re: Synergetics International, Inc. The transactions pursuant to a merger of ZDC into Synergetics (following the required shareholder vote approval), including a conversion of the issued and outstanding shares of ZDC common stock into Synergetics common stock and common stock purchase warrants, constitute exempt transactions under  § 551.23(13), Wis. Stats.

2/18/82 letter re:  Genuine Parts Company.  For a merger between General Automotive Parts Corporation ("General") and Genuine Parts Company ("Genuine"), upon approval by vote of shareholders of a majority of each corporation under its respective corporation statute, issuance of Genuine common stock to General shareholders was exempt from registration under  § 551.23(13), Wis. Stats.

History:  Adopted January 1, 1970. There is no parallel provision in the Uniform Securities Act.  Amended effective 6/21/96 to add "share exchange" to the list of corporate reorganization transactions that qualify for the exemption.