History: 2005 a. 441
Voting rights of nonmembers.
The articles or bylaws may authorize any nonmember or class of nonmembers to vote at a members' meeting in the same manner as patron members are permitted to vote. The articles or bylaws may prescribe the manner by which persons are authorized to vote under this section.
History: 2005 a. 441
Voting of jointly owned membership interests.
If a membership interest is owned jointly by 2 or more persons, any one of the owners may vote based upon that membership interest, unless the cooperative receives written notice from any of the owners denying the authority of that person to vote based upon that membership interest.
History: 2005 a. 441
Cumulative voting by members.
Except as provided in ss. 193.411 (4m)
, a member with more than one vote that is entitled to vote may allocate the member's votes in any way the member chooses. If such a member votes without designating an allocation, the member is considered to have voted all of the member's votes in that way.
History: 2005 a. 441
Voting by business entities, subsidiaries, legal representatives, and holders of security interests. 193.561(1)(1)
Membership interests held by a business entity.
If a member entitled to vote is a business entity, the chairperson of the board, chief executive officer, or other authorized agent of the member may cast the member's votes.
(2) Membership interest held by subsidiary of cooperative.
Except as provided in the articles or bylaws or sub. (3)
, if a member is a subsidiary of the cooperative, the member may not vote.
(3) Membership interest held in fiduciary capacity by cooperative.
Membership interests held in a fiduciary capacity by the cooperative or a subsidiary of the cooperative are not entitled to vote, except to the extent that the settlor or beneficiary is entitled to vote and either exercises the right to vote or instructs the cooperative or subsidiary on how to vote.
(4) Membership interest controlled by certain representatives.
Except as provided in subs. (3)
, if a person, in the capacity of a personal representative, administrator, executor, guardian, or conservator, or in a similar capacity, controls the membership interest of a member entitled to vote, the person may vote on behalf of the member.
(5) Membership interest controlled by trustee in bankruptcy or receiver.
If a trustee in bankruptcy or a receiver controls the membership interest of a member entitled to vote, the trustee or receiver may vote on behalf of the member if authorized to do so by the court appointing the trustee or receiver.
(7) Holders of security interest.
The granting of a security interest in a membership interest does not entitle the holder of the security interest to vote.
History: 2005 a. 441
Authorization and appointment of proxy. 193.565(1)(a)(a)
A member entitled to vote may do so by proxy appointed under this paragraph. Except as provided in sub. (7)
, a member may grant a proxy to vote by giving the board or an authorized agent of the cooperative an appointment of a proxy, in writing, before the meeting at which the appointment is to be effective. If the appointment of proxy is given in electronic format, the appointment is effective only if an authorized agent of the cooperative determines that the appointment is authorized by the member. The authorized agent shall record the information upon which he or she relied to make the determination. A proxy appointed under this paragraph may vote in the same manner as and to the same extent as the appointing member is otherwise authorized to vote, consistent with subs. (5)
A reproduction of the original written appointment under par. (a)
may be substituted or used in lieu of the original for any purpose for which the original could be used, if the reproduction is a complete, legible, and accurate reproduction of the entire original.
If a membership interest is owned jointly by 2 or more members, any one of the owners may appoint a proxy under par. (a)
, unless the cooperative receives written notice from any of the owners denying the authority of that person to appoint a proxy or appointing a different proxy.
(2) Duration of appointment.
The appointment of a proxy under sub. (1) (a)
is valid for 11 months, unless a longer period is expressly provided in the appointment or unless the appointment is terminated under sub. (3)
An appointment of a proxy under sub. (1) (a)
may be terminated at will by the appointing member or the proxy, unless the appointment is conditioned upon ownership of or subject to terms and conditions of a membership interest. Except as provided in sub. (4)
, an appointment that is coupled with a membership interest as described in this subsection is irrevocable and may not be terminated, unless an agreement between the appointing member and the proxy specifies otherwise. A termination under this subsection is effective upon filing written notice of the termination with an authorized agent of the cooperative or filing a new appointment under sub. (1) (a)
, whichever occurs first.
(4) Revocation by death or incapacity.
The death or incapacity of a member appointing a proxy under sub. (1) (a)
does not revoke the appointment, unless written notice of the death or incapacity is received by an authorized agent of the cooperative before the proxy exercises the authority under the appointment.
(5) Multiple proxies.
Except as provided in sub. (7)
, all of the following apply if 2 or more persons are appointed as proxies for a member under sub. (1) (a)
Only one of them may vote on behalf of the member on each item of business in accordance with specific instructions contained in the appointment.
If no specific instructions are contained in the appointment with respect to a particular item of business, the vote of the member shall be cast as a majority of the proxies determine. If the proxies are equally divided in determining how such a vote shall be cast, no vote may be cast.
(6) Liability of proxy.
A proxy appointed under sub. (1) (a)
is liable to the appointing member for damages resulting from the proxy's failure to exercise his or her authority or from the proxy's acting in violation of the authority granted in the appointment.
A patron member may only appoint another patron member as a proxy under sub. (1) (a)
If an appointment of a proxy under sub. (1) (a)
gives the proxy authority to vote on less than all items of business considered at a meeting, the appointing member may vote by proxy only with respect to those items of business for which the proxy has authority to vote.
An appointment of a proxy under sub. (1) (a)
may restrict or limit the authority of the proxy or reserve authority for the appointing member.
History: 2005 a. 441
Member authority concerning certain cooperative property.
Except as provided in s. 193.443
, a cooperative may sell, lease, transfer, or otherwise dispose of all or substantially all of its property and assets, including its good will, not in the usual and regular course of its business, upon those terms and conditions that the board considers expedient, when approved by the affirmative vote of the members owning a majority of the voting power of the interests entitled to vote and by the board. Notwithstanding s. 193.511 (6)
, 193.515 (3)
, and 193.553
, written notice of any members' meeting at which a vote will be taken under this section shall be given to all members. The written notice shall state that a purpose of the meeting is to consider the sale, lease, transfer, or other disposition of all or substantially all of the property and assets of the cooperative.
History: 2005 a. 441
Membership interests. 193.601(1)
Amounts and divisions of membership interests.
To the extent permitted under this chapter, a cooperative may increase, decrease, establish, or alter the authorized amount and divisions of membership interests by amending the articles under s. 193.221
or the bylaws under s. 193.241
(2) Issuance and acquisition of membership interests generally.
A cooperative may issue authorized membership interests on terms and conditions prescribed in the articles or bylaws or, if authorized in the articles or bylaws, on terms and conditions determined by the board. The cooperative shall disclose to any person to whom a membership interest is issued, before issuance, the organizational and capital structure of the cooperative, known business prospects and risks of the cooperative, and the nature of the governance and financial rights of the membership interest being acquired and of other classes of membership and membership interests. The cooperative shall notify all members, before issuance, of any membership interest issued by the cooperative. The cooperative may not issue a membership interest to any person unless the subscription price of the membership interest has been paid for in money or property. If the subscription price is paid for in property, the value of the property to be contributed shall be approved by the board.
(3) Transferring ownership of membership interests.
After issuance by the cooperative, ownership of a membership interest may be transferred only with the approval of the board. The board may adopt resolutions prescribing procedures to approve transfers prospectively.
(4) Patron membership interests.
Except as otherwise provided in this subsection, if nonpatron membership interests are authorized by the patron members, all patron membership interests, collectively, shall have not less than 51 percent of the cooperative's financial rights to profit allocations and distributions. The patron members by majority vote may authorize that the patron membership interests, collectively, may have less than 51 percent, but not less than 30 percent, of the cooperative's financial rights to profit allocations and distributions, and this change must be included in the bylaws. Notwithstanding s. 193.221 (1)
, an amendment of the articles under this subsection may be adopted only if approved by the affirmative vote of the patron members.
(5) First privilege to purchase membership interests.
The articles or bylaws may provide the patron members, individually or collectively, or the cooperative with the first privilege of purchasing the membership interests of any class of membership interests offered for sale. If the articles or bylaws provide patron members with a first privilege to purchase membership interests under this subsection, the articles or bylaws shall include a procedure by which patron members may proceed to acquire the membership interests. If the cooperative acquires a membership interest under this subsection, the cooperative may hold the interest to be reissued or may retire and cancel the interest.
(6) Nonpatron membership interests.
If nonpatron membership interests are authorized by the patron members, each person to whom a nonpatron membership interest is issued shall sign a member control agreement or a statement agreeing to abide by any applicable conditions imposed under the bylaws. Unless the bylaws contain a sufficient description, the cooperative shall provide to a person to whom a nonpatron membership interest is issued, before issuance, a description of the rights and obligations applicable to holders of that nonpatron membership interest, the transferability of that nonpatron membership interest, and the manner in which profits and losses are divided and allocated among the membership interests and membership classes.
(6m) Allocation of profits, losses, and distributions.
If the articles or bylaws do not otherwise provide for the allocation of the profits and losses between patron membership interests and any authorized nonpatron membership interests, then the allocation of profits and losses among nonpatron membership interests individually and patron membership interests collectively shall be allocated based on the value of contributions to capital made according to the patron membership interests collectively and the nonpatron membership interests individually to the extent the contributions have been accepted by the cooperative. Distributions of cash or other assets of the cooperative shall be allocated among the membership interests as provided in the articles and bylaws, subject to the provisions of this chapter. If not otherwise provided in the articles or bylaws, distributions shall be made on the basis of value of the capital contributions of the patron membership interests collectively and the nonpatron membership interests to the extent the contributions have been accepted by the cooperative.
(7) Reacquisition of nonpatron membership interests after dissent.
Unless the articles or bylaws provide otherwise, a nonpatron member may force the cooperative to acquire the member's nonpatron membership interests as provided under this subsection if the articles or bylaws are amended in a manner that materially and adversely affects the rights and preferences applicable to the nonpatron membership interests of the nonpatron member. If approval of the amendment is not required of the members, the nonpatron member shall file a notice of dissent and intent to demand fair value of the membership interests with the cooperative within 30 days after the date on which notice of the amendment is given to members. If approval of the amendment is required of the members, the nonpatron member shall file a notice of dissent and intent to demand fair value of the membership interests with the cooperative before the vote on the proposed amendment and shall not vote in favor of the proposed amendment. After receipt of a notice under this subsection and, if applicable, after approval of the amendment, the cooperative shall rescind the amendment within 60 days after receipt of the notice or acquire the membership interests by paying the fair value of the membership interests to the dissenting member within 180 days after receipt of the notice. Upon acquiring the membership interests, the cooperative may hold the interests to be reissued or may retire and cancel the interests.
History: 2005 a. 441
Cooperative securities. 193.605(1)
Applicability of ch. 408 to cooperative securities.
To the extent that the provisions of this chapter concerning the authorization, issuance, control, use, and rights of membership interests or concerning the stock of a cooperative are inconsistent with ch. 408
, the provisions of this chapter apply.
(2) Liability of cooperative for wrongful transfers of its securities. 193.605(2)(a)1.
“Proper person" means the registered owner or last prior transferee, whether or not described as fiduciary for another, or his or her authorized agent or legal representative or the successor to his or her interest by operation of law.
“Wrongful transfer" means a transfer which is in excess of the authorization or capacity of the transferor, or which is made in breach of the transferor's fiduciary duty.
A cooperative may not be held liable for acting upon wrongful transfers of its securities which are not “securities" as defined in s. 408.102
, unless it has notice that the certificate was not transferred by a proper person or has notice that the transfer was a wrongful transfer.
When a security issued by a cooperative, which is not a “security" as defined in s. 408.102
, is missing, the cooperative shall issue a duplicate security if the owner so requests and furnishes an indemnity acceptable to the cooperative.
When records showing ownership of securities or apportionment of equity or membership interests are missing and the information therein contained is necessary to a proposed redemption of the interest, the cooperative may give notice and redeem by satisfying all of the following:
The cooperative shall set aside an amount equal to the value of the interests to be redeemed.
The cooperative shall give notice of such redemption to all owners of interests of which the cooperative has knowledge.
If there are interests, the ownership of which is unknown to the cooperative, it shall publish notice of the redemption at least once a month for 4 months in a publication circulated among members of cooperatives in the area, and also publish a class 3 notice, under ch. 985
History: 2005 a. 441
Assignment of financial rights. 193.611(1)
Assignment of financial rights permitted.
Except as provided in sub. (3)
, a member's financial rights in a cooperative are transferable in whole or in part.
(2) Effect of assignment of financial rights.
An assignment of a member's financial rights under sub. (1)
entitles the assignee to receive, to the extent assigned, only the share of profits and losses and the distributions to which the assignor would otherwise be entitled. An assignment of a member's financial rights under sub. (1)
does not dissolve the cooperative and does not entitle or empower the assignee to become a member, to exercise any governance rights, to receive any notices from the cooperative, or to cause dissolution. The assignment may not allow the assignee to control the member's exercise of governance or voting rights.
(3) Restrictions on assignment of financial rights. 193.611(3)(a)(a)
A restriction on the assignment of financial rights in a cooperative may be imposed in the articles, in the bylaws, in a member control agreement, by a resolution adopted by the members at a members' meeting, or by an agreement among members and the cooperative. A restriction is not binding with respect to financial rights reflected in the required records of the cooperative before the adoption of the restriction, unless the owners of those financial rights are parties to the agreement or voted in favor of the restriction.
Subject to par. (c)
, a restriction under par. (a)
is enforceable only if the restriction is not manifestly unreasonable under the circumstances and is noted conspicuously in the required records of the cooperative. Such a restriction may be enforced against the owner of the restricted financial rights or a successor or transferee of the owner, including a pledgee or a legal representative.
A restriction on an assignment of financial rights under par. (a)
which is otherwise valid and in effect at the time of the issuance of a statement of membership interest issued by the cooperative under s. 193.615
but which is not reflected in that statement is ineffective against an assignee who takes an assignment in reliance on the statement.
A security interest in a member's financial rights may be foreclosed and otherwise enforced, and a secured party may assign a member's financial rights in accordance with ch. 408
, without the consent or approval of the member whose financial rights are subject to the security interest.
History: 2005 a. 441
Nature and terms of a membership interest and statement of interest owned. 193.615(1)
A membership interest is personal property. A membership interest does not give the owner of the interest any interest in specific cooperative property. All property of the cooperative is property of the cooperative itself.
(2) Statement of membership interest.
At the request of any member, the cooperative shall state in writing the particular membership interest owned by that member as of the date the cooperative makes the statement. The statement shall describe the member's rights to vote, if any, and to share in profits, losses, and distributions, restrictions on assignments of the member's financial rights under s. 193.611 (3)
or voting rights under s. 193.555
, and any assignment of the member's rights then in effect other than a security interest.
(3) Terms of membership interests generally. 193.615(3)(a)(a)
All the membership interests of a cooperative shall satisfy all of the following:
Unless the articles or bylaws provide otherwise, the membership interests shall be of one class, without series.
The membership interests shall be patron membership interests and, if authorized, nonpatron membership interests subject to this chapter entitled to vote as provided in s. 193.555
, and have equal rights and preferences in all matters not otherwise provided for by the board unless and to the extent that the articles or bylaws have fixed the relative rights and preferences of different classes and series.
All of the following apply to the rights and preferences of a class or series of membership interests:
The rights and preferences may be made dependent upon facts ascertainable outside the articles or bylaws, or outside the resolution or resolutions under sub. (5)
establishing the class or series, if the manner in which the facts operate upon the rights and preferences is clearly and expressly set forth in the articles or bylaws or in the resolution or resolutions establishing the class or series.
The rights and preferences may include by reference some or all of the terms of any agreements, contracts, or other arrangements entered into by the cooperative in connection with the establishment of the class or series if the cooperative retains at its principal office a copy of the agreements, contracts, or other arrangements or the portions thereof included by reference.
If specified in the articles or bylaws, or the resolution under sub. (5)
establishing the class or series, all of the following apply to membership interests of a class or series:
The membership interests are subject to the right of the cooperative to redeem any of those membership interests at a price fixed in the articles or bylaws or by the board.
Owners of the membership interests may receive cumulative, partially cumulative, or noncumulative distributions.
The membership interests may have preference over any other class or series of membership interests for the payment of distributions.
The membership interests may be convertible into membership interests of any other class or series.
The membership interests may have full, partial, or no voting rights, except as provided in s. 193.555
(4) Rights of judgment creditor.
On application to the circuit court by any judgment creditor of a member, the court may order the payment of the unsatisfied amount of the judgment from a member's or an assignee's financial rights. Such a judgment creditor has only the rights of an assignee of a member's financial rights under s. 193.611
. This subsection is the sole and exclusive remedy of a judgment creditor with respect to the judgment debtor's membership interest. This subsection does not deprive any member or assignee of financial rights of the benefit of any exemption under s. 815.18
applicable to the membership interest.