SB423: Bill Text

SB423,91,3 181.0822 Call and notice of meetings. (1) Regular meetings. Unless the articles of incorporation, bylaws or sub. (3) provides otherwise, regular meetings of the board may be held without notice.

SB423,91,6 (2) Special meetings. Unless the articles of incorporation, bylaws or sub. (3) provides otherwise, special meetings of the board must be preceded by at least 2 days' notice to each director of the date, time and place, but not the purpose, of the meeting.

SB423,91,11 (3) Corporations without members. In corporations without members, any board action to remove a director or to approve a matter that would require approval by the members if the corporation had members, shall not be valid unless each director is given at least 7 days' written notice that the matter will be voted upon at a board meeting or unless notice is waived under s. 181.0823.

SB423,91,14 (4) Method of giving notice. Unless the articles of incorporation or bylaws provide otherwise, the presiding officer of the board, the president or 20% of the directors then in office may call and give notice of a meeting of the board.

SB423,91,19 181.0823 Waiver of notice. (1) Written waivers. A director may waive any notice required by this chapter, the articles of incorporation or the bylaws before or after the date and time stated in the notice. Except as provided in sub. (2), the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or the corporate records.

SB423,91,24 (2) Effect of attendance or participation. A director's attendance at or participation in a meeting waives any required notice of the meeting unless the director upon arriving at the meeting or before the vote on a matter not noticed in conformity with this chapter, the articles of incorporation or the bylaws objects to lack of notice and does not thereafter vote for or assent to the objected to action.

SB423,92,3 181.0824 Quorum and voting. (1) Quorum. Except as otherwise provided in this chapter, the articles of incorporation or the bylaws, a quorum of a board consists of a majority of the directors in office immediately before a meeting begins.

SB423,92,7 (2) Voting. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board unless this chapter, the articles of incorporation or the bylaws require the vote of a greater number of directors.

SB423,92,19 181.0825 Committees of the board. If the articles of incorporation or bylaws so provide, the board may adopt a resolution designating one or more committees. Each committee shall consist of 3 or more directors elected by the board of directors. To the extent provided by the resolution or in the articles of incorporation or in the bylaws, the committee may exercise the powers of the board with respect to the management of the affairs of the corporation, when the board is not meeting, except for electing officers or the filling of vacancies on the board or on committees created under this section. The board may elect one or more of its members as alternate members of a committee created under this section, who may take the place of absent members at any meeting of the committee. The designation of a committee and the delegation of authority to it does not relieve the board or any director of any responsibility imposed upon the board or director by law.

SB423,93,2 181.0831 Director conflict of interest. (1) When contract or transaction is not void or voidable. No contract or other transaction between a corporation and a director, or any entity in which a director is a director or officer or has a material financial interest, is void or voidable because of the relationship or interest or because the director is present at the meeting of the board or a committee that authorizes, approves or ratifies the contract or transaction or because the director's vote is counted for that purpose, if any of the following applies:

SB423,93,6 (a) The relationship or interest is disclosed or known to the board or committee that authorizes, approves or ratifies the contract or transaction and the contract or transaction was authorized, approved or ratified by a vote or consent sufficient for the purpose without counting the votes or consents of interested directors.

SB423,93,9 (b) The fact of such relationship or interest is disclosed or known to the members entitled to vote and they authorize, approve or ratify that contract or transaction by vote or written consent.

SB423,93,10 (c) The contract or transaction is fair and reasonable to the corporation.

SB423,93,13 (2) Quorum requirements. Common and interested directors may be counted in determining the presence of a quorum at a meeting of the board or a committee that authorizes, approves or ratifies a contract or transaction under sub. (1).

SB423,93,16 (3) Additional requirements. The articles of incorporation, the bylaws or a resolution of the board may impose additional requirements on conflict of interest transactions.

SB423,93,20 181.0832 Loans to directors and officers. (1) Requirements for loan or guarantee. Except as provided in sub. (3), a corporation may not lend money to or guarantee the obligation of a director or officer of the corporation unless any of the following occurs:

SB423,93,21 (a) The particular loan or guarantee is approved by the members.

SB423,93,24 (b) The corporation's board determines that the loan or guarantee benefits the corporation and either approves the specific loan or guarantee or a general plan authorizing loans and guarantees.

SB423,94,2 (2) Effect of violations. A violation of this section does not affect the borrower's liability on the loan.

SB423,94,6 (3) Limited applicability. This section does not apply to an advance to a director or officer that is permitted by s. 181.0874 or 181.0877 (3) or that is made to defray expenses incurred by the director or officer in the ordinary course of the corporation's business.

SB423,94,14 181.0833 Liability for unlawful distributions. (1) When liable. Except as provided in sub. (3), a director who votes for or assents to a distribution made in violation of subch. XIII or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating subch. XIII or the articles of incorporation, if it is established that the director's vote or assent constitutes conduct described by s. 181.0855 (1) (a), (b), (c) or (d). In any proceeding brought under this section, a director has all of the defenses ordinarily available to a director.

SB423,94,16 (2) Right to contribution. A director who is liable under sub. (1) for an unlawful distribution is entitled to contribution from all of the following persons:

SB423,94,18 (a) Every other director who could be held liable under sub. (1) for the unlawful distribution.

SB423,94,20 (b) Each member, for the amount that the member accepted knowing that the distribution was made in violation of subch. XIII or the articles of incorporation.

SB423,94,22 (3) When proceeding barred. A proceeding under this section is barred unless it is brought within 2 years after the date on which the distribution was made.

SB423,94,25 181.0840 Officers. (1) Principal officers. Unless otherwise provided in the articles of incorporation or bylaws, a corporation shall have a president, a secretary, a treasurer and such other officers as are appointed by the board.

SB423,95,2 (2) Assistant officers. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board.

SB423,95,4 (3) Multiple offices. The same individual may simultaneously hold more than one office in a corporation.

SB423,95,9 181.0841 Duties and authority of officers and agents. Each officer or agent has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties and authority prescribed in a resolution of the board or by direction of an officer authorized by the board to prescribe the duties and authority of other officers.

SB423,95,17 181.0843 Resignation and removal of officers. (1) Resignation. An officer may resign at any time by delivering notice to the corporation that complies with s. 181.0141. The resignation is effective when the notice is delivered, unless the notice specifies a later effective date and the corporation accepts the later effective date. If a resignation is effective at a later date, the board, or the officer authorized by the bylaws or the board to appoint the resigning officer, may fill the pending vacancy before the effective date if the appointment provides that the successor may not take office until the effective date.

SB423,95,21 (2) Removal. The board may remove any officer and, unless restricted by the bylaws or by the board, an officer may remove any officer or assistant officer appointed by that officer under s. 181.0840 (2), at any time, with or without cause and notwithstanding the contract rights, if any, of the officer removed.

SB423,95,23 181.0844 Contract rights of officers. (1) Effect of appointment. The appointment of an officer does not itself create contract rights.

SB423,96,3 (2) Effect of removal or resignation. Except as provided in s. 181.0843 (2), an officer's resignation or removal is subject to any remedies provided by any contract between the officer and the corporation or otherwise provided by law.

SB423,96,9 181.0850 Reliance by directors or officers. Unless the director or officer has knowledge that makes reliance unwarranted, a director or officer, in discharging his or her duties to the corporation, may rely on information, opinions, reports or statements, any of which may be written or oral, formal or informal, including financial statements and other financial data, if prepared or presented by any of the following:

SB423,96,12 (1) Officers and employes. An officer or employe of the corporation whom the director or officer believes in good faith to be reliable and competent in the matters presented.

SB423,96,15 (2) Professionals and experts. Legal counsel, public accountants or other persons as to matters the director or officer believes in good faith are within the person's professional or expert competence.

SB423,96,18 (3) Committees. In the case of reliance by a director, a committee of the board of directors of which the director is not a member if the director believes in good faith that the committee merits confidence.

SB423,96,22 181.0853 Consideration of interests in addition to members' interests. In discharging his or her duties to the corporation and in determining what he or she believes to be in the best interests of the corporation, a director or officer may, in addition to considering the effects of any action on members, consider the following:

SB423,96,24 (1) Employes, suppliers and customers. The effects of the action on employes, suppliers and customers of the corporation.

SB423,97,2 (2) Communities. The effects of the action on communities in which the corporation operates.

SB423,97,3 (3) Other. Any other factors that the director or officer considers pertinent.

SB423,97,11 181.0855 Limited liability of directors and officers. (1) In general. Except as provided in subs. (2) and (3), a director or officer is not liable to the corporation, its members or creditors, or any person asserting rights on behalf of the corporation, its members or creditors, or any other person, for damages, settlements, fees, fines, penalties or other monetary liabilities arising from a breach of, or failure to perform, any duty resulting solely from his or her status as a director or officer, unless the person asserting liability proves that the breach or failure to perform constitutes any of the following:

SB423,97,14 (a) A wilful failure to deal fairly with the corporation or its members in connection with a matter in which the director or officer has a material conflict of interest.

SB423,97,17 (b) A violation of criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful.

SB423,97,19 (c) A transaction from which the director or officer derived an improper personal profit or benefit.

SB423,97,20 (d) Wilful misconduct.

SB423,97,22 (2) Exceptions. Except as provided in sub. (3), this section does not apply to any of the following:

SB423,97,24 (a) A civil, criminal, administrative or investigatory proceeding brought by or on behalf of any governmental unit, authority or agency.

SB423,98,3 (b) A proceeding brought by any person for a violation of state or federal law where the proceeding is brought pursuant to an express private right of action created by state or federal statute.

SB423,98,4 (c) The liability of a director under ss. 181.0832 and 181.0833.

SB423,98,7 (3) Governmental entity acting in capacity as private party. Subsection (2) (a) and (b) does not apply to a proceeding brought by a governmental unit, authority or agency in its capacity as a private party or contractor.

SB423,98,14 181.0860 Statements of changes in directors or principal officers. (1) Changes in directors or principal officers. Whenever initial directors and principal officers are selected, or changes are made in the directors or principal officers of a corporation, the corporation may file with the department a statement that includes the names and addresses of all of the directors or principal officers, or both if there have been changes in both. The information in the statement shall be current as of the date on which the statement is signed on behalf of the corporation.

SB423,98,17 (2) Resignation notices. A director who resigns under s. 181.0807 or a principal officer who resigns under s. 181.0843 (1) may file a copy of the resignation notice with the department.

SB423,98,19 181.0871 Definitions applicable to indemnification and insurance provisions. In ss. 181.0871 to 181.0883:

SB423,98,22 (1) "Corporation" means a domestic corporation and any domestic or foreign predecessor of a domestic corporation where the predecessor corporation's existence ceased upon the consummation of a merger or other transaction.

SB423,98,23 (2) "Director or officer" means any of the following:

SB423,98,24 (a) An individual who is or was a director or officer of a corporation.

SB423,99,5 (b) An individual who, while a director or officer of a corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, member of any governing or decision-making committee, manager, employe or agent of another corporation or foreign corporation, limited liability company, partnership, joint venture, trust or other enterprise.

SB423,99,9 (c) An individual who, while a director or officer of a corporation, is or was serving an employe benefit plan because his or her duties to the corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan.

SB423,99,11 (d) Unless the context requires otherwise, the estate or personal representative of a director or officer.

SB423,99,13 (3) "Expenses" include fees, costs, charges, disbursements, attorney fees and any other expenses incurred in connection with a proceeding.

SB423,99,16 (4) "Liability" includes the obligation to pay a judgment, settlement, penalty, assessment, forfeiture or fine, including any excise tax assessed with respect to an employe benefit plan, and reasonable expenses.

SB423,99,18 (5) "Party" includes an individual who was or is, or who is threatened to be made, a named defendant or respondent in a proceeding.

SB423,99,22 (6) "Proceeding" means any threatened, pending or completed civil, criminal, administrative or investigative action, suit, arbitration or other proceeding, whether formal or informal, which involves foreign, federal, state or local law and which is brought by or in the right of the corporation or by any other person.

SB423,99,25 181.0872 Mandatory indemnification. (1) In general. A corporation shall indemnify a director or officer, to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is a director or officer of the corporation.

SB423,100,8 (2) Exceptions. (a) In cases not included under sub. (1), a corporation shall indemnify a director or officer against liability incurred by the director or officer in a proceeding to which the director or officer was a party because he or she is a director or officer of the corporation, unless liability was incurred because the director or officer breached or failed to perform a duty that he or she owes to the corporation and the breach or failure to perform constitutes any of the following:

SB423,100,11 1. A wilful failure to deal fairly with the corporation or its members in connection with a matter in which the director or officer has a material conflict of interest.

SB423,100,14 2. A violation of the criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful.

SB423,100,16 3. A transaction from which the director or officer derived an improper personal profit or benefit.

SB423,100,17 4. Wilful misconduct.

SB423,100,19 (b) Determination of whether indemnification is required under this subsection shall be made under s. 181.0873.

SB423,100,23 (c) The termination of a proceeding by judgment, order, settlement or conviction, or upon a plea of no contest or an equivalent plea, does not, by itself, create a presumption that indemnification of the director or officer is not required under this subsection.

SB423,100,25 (3) Written request required. A director or officer who seeks indemnification under this section shall make a written request to the corporation.

SB423,101,3 (4) Limitation by articles of incorporation. (a) Indemnification under this section is not required to the extent limited by the articles of incorporation under s. 181.0875.

SB423,101,6 (b) Indemnification under this section is not required if the director or officer has previously received indemnification, reimbursement or allowance of expenses from any person, including the corporation, in connection with the same proceeding.

SB423,101,11 181.0873 Determination of right to indemnification. Unless otherwise provided by the articles of incorporation or bylaws or by written agreement between the director or officer and the corporation, the director or officer seeking indemnification under s. 181.0872 (2) shall select one of the following means for determining his or her right to indemnification:

SB423,101,18 (1) Board of director vote. By a majority vote of a quorum of the board of directors consisting of directors who are not at the time parties to the same or related proceedings. If a quorum of disinterested directors cannot be obtained, by a majority vote of a committee duly appointed by the board of directors and consisting solely of 2 or more directors who are not at the time parties to the same or related proceedings. Directors who are parties to the same or related proceedings may participate in the designation of members of the committee.

SB423,101,23 (2) Independent legal counsel. By independent legal counsel selected by a quorum of the board of directors or its committee in the manner prescribed in sub. (1) or, if unable to obtain such a quorum or committee, by a majority vote of the full board of directors, including directors who are parties to the same or related proceedings.

SB423,102,2 (3) Arbitrators. By a panel of 3 arbitrators consisting of one arbitrator selected by those directors entitled under sub. (2) to select independent legal counsel, one arbitrator selected by the director or officer seeking indemnification and one arbitrator selected by the 2 arbitrators previously selected.

SB423,102,6 (4) Members. By an affirmative vote of members with voting rights, if any. Membership rights owned by, or voted under the control of, persons who are at the time parties to the same or related proceedings, whether as plaintiffs or defendants or in any other capacity, may not be voted in making the determination.

SB423,102,7 (5) Court. By a court under s. 181.0879.

SB423,102,9 (6) Other methods. By any other method provided for in any additional right to indemnification permitted under s. 181.0877.

SB423,102,13 181.0874 Allowance of expenses as incurred. Upon written request by a director or officer who is a party to a proceeding, a corporation may pay or reimburse his or her reasonable expenses as incurred if the director or officer provides the corporation with all of the following:

SB423,102,16 (1) Written affirmation. 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.

SB423,102,24 (2) Repayment undertaking. A written undertaking, executed personally or on his or her behalf, to repay the allowance and, if required by the corporation, to pay reasonable interest on the allowance to the extent that it is ultimately determined under s. 181.0873 that indemnification under s. 181.0872 (2) is not required and that indemnification is not ordered by a court under s. 181.0879 (2) (b). The undertaking under this subsection shall be an unlimited general obligation of the director or officer and may be accepted without reference to his or her ability to repay the allowance. The undertaking may be secured or unsecured.

SB423,103,3 181.0875 Corporation may limit indemnification. (1) Methods of limiting obligation. A corporation's obligations to indemnify under s. 181.0872 may be limited as follows:

SB423,103,6 (a) If the corporation is incorporated on or after June 13, 1987, by the articles of incorporation, including any amendments or restatements of the articles of incorporation.

SB423,103,9 (b) If the corporation was incorporated before June 13, 1987, by an amendment to, or restatement of, the articles of incorporation which becomes effective on or after June 13, 1987.

SB423,103,12 (2) Applicability. A limitation under sub. (1) applies if the first alleged act of a director or officer for which indemnification is sought occurred while the limitation was in effect.