SB423: Bill Text

SB423,71,4 181.0707 Record date; determining members entitled to notice and vote. (1) Record date for notice. The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to notice of a members' meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members at the close of business on the business day preceding the day on which notice is given are entitled to notice of the meeting. However, if a meeting is held without notice, the determination of who is entitled to waive notice is made as of the close of business on the business day preceding the day on which the meeting is held.

SB423,71,10 (2) Record date for voting. The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to vote at a members' meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members on the date of the meeting who are otherwise eligible to vote are entitled to vote at the meeting.

SB423,71,18 (3) Record date for exercise of other rights. The bylaws may fix or provide the manner for determining a date as the record date for the purpose of determining the members entitled to exercise any rights in respect of any other lawful action. If the bylaws do not fix or provide for fixing such a record date, the board may fix in advance such a record date. If no such record date is fixed, members at the close of business on the day on which the board adopts the resolution relating thereto, or the 60th day before the date of such other action, whichever is later, are entitled to exercise such rights.

SB423,71,21 (4) Limitations on record dates. Unless the bylaws of a corporation provide otherwise, a record date fixed under this section may not be more than 70 days before the meeting or action requiring a determination of members occurs.

SB423,72,2 (5) Adjourned meetings. A determination of members entitled to notice of or to vote at a membership meeting is effective for any adjournment of the meeting unless the board fixes a new date for determining the right to notice or the right to vote, which it must do if the meeting is adjourned to a date more than 70 days after the record date for determining members entitled to notice of the original meeting.

SB423,72,6 (6) Court-ordered adjournment. If a court orders a meeting adjourned to a date more than 120 days after the date fixed for the original meeting, it may provide that the original record date for notice or voting continues in effect or it may fix a new record date for notice or voting.

SB423,72,10 181.0708 Action by written ballot. (1) When permitted. If permitted by the articles of incorporation or bylaws, any action that may be taken at an annual, regular or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter.

SB423,72,12 (2) Ballot requirements. A written ballot shall set forth each proposed action and provide an opportunity to vote for or against each proposed action.

SB423,72,18 (3) Voting requirements. Approval by written ballot under this section shall be valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.

SB423,72,20 (4) Solicitation requirements. A solicitation for votes by written ballot shall include all of the following:

SB423,72,21 (a) The number of responses needed to meet the quorum requirements.

SB423,72,23 (b) The percentage of approvals necessary to approve each matter other than election of directors.

SB423,72,25 (c) The time by which a ballot must be received by the corporation in order to be counted.

SB423,73,2 (5) Revocation. Except as otherwise provided in the articles of incorporation or bylaws, a written ballot may not be revoked.

SB423,73,10 181.0720 Members' list for meeting. (1) List of members. After fixing a record date for a notice of a meeting, a corporation shall prepare an alphabetical list of the names of all of its members who are entitled to notice of the meeting. The list must show the address and number of votes each member is entitled to vote at the meeting. The corporation shall prepare on a current basis through the time of the membership meeting a list of members, if any, who are entitled to vote at the meeting, but not entitled to notice of the meeting. This list shall be prepared on the same basis as and be part of the list of members.

SB423,73,19 (2) Inspection before meeting. The list of members must be available for inspection by any member for the purpose of communication with other members concerning the meeting, beginning 2 business days after notice is given of the meeting for which the list was prepared and continuing through the meeting, at the corporation's principal office or at a reasonable place identified in the meeting notice in the city where the meeting will be held. A member, a member's agent or a member's attorney is entitled on written demand to inspect and, subject to ss. 181.1602 (3) and 181.1605, to copy the list, at a reasonable time and at the member's expense, during the period it is available for inspection.

SB423,73,22 (3) Inspection at meeting. The corporation shall make the list of members available at the meeting, and any member, a member's agent or a member's attorney is entitled to inspect the list at any time during the meeting or any adjournment.

SB423,74,6 (4) Refusal to allow inspection. If the corporation refuses to allow a member, a member's agent or a member's attorney to inspect the list of members before or at the meeting or to copy the list as permitted under sub. (2), the circuit court for the county where a corporation's principal office, or if none in this state, its registered office, is located, on application of the member, may summarily order the inspection or copying at the corporation's expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete and may order the corporation to pay the member's costs, including reasonable attorney fees, incurred to obtain the order.

SB423,74,8 (5) Effect of noncompliance. Refusal or failure to prepare or make available the list of members does not affect the validity of action taken at the meeting.

SB423,74,11 181.0721 Voting entitlement generally. (1) In general. Unless the articles of incorporation or bylaws provide otherwise, each member is entitled to one vote on each matter voted on by the members.

SB423,74,15 (2) Membership in the name of multiple persons. Unless the articles of incorporation or bylaws provide otherwise, if a membership stands of record in the names of 2 or more persons, their acts with respect to voting shall have the following effect:

SB423,74,16 (a) If only one votes, such act binds all.

SB423,74,17 (b) If more than one votes, the vote shall be divided on a prorated basis.

SB423,74,21 181.0722 Quorum requirements. (1) In general. Unless this chapter, the articles of incorporation, or bylaws provide for a higher or lower quorum, 10% of the votes entitled to be cast on a matter must be represented at a meeting of members to constitute a quorum on that matter.

SB423,74,24 (2) Bylaw amendment to decrease quorum requirements. A bylaw amendment to decrease the quorum for any member action may be approved by the members or, unless prohibited by the bylaws, by the board.

SB423,75,3 (3) Bylaw amendment to increase quorum requirements. A bylaw amendment to increase the quorum required for any member action must be approved by the members.

SB423,75,6 (4) Quorum to take up additional matters. The only matters that may be voted upon at an annual or regular meeting of members are those matters that are described in the meeting notice, unless at least one of the following conditions is met:

SB423,75,8 (a) One-third or more of the voting power of the membership is present in person or by proxy.

SB423,75,10 (b) The meeting notice contains a general statement that matters other than those specifically described in the notice may be considered at the meeting.

SB423,75,15 181.0723 Voting requirements. (1) In general. A majority of the votes entitled to be cast by the members present in person or represented by proxy at a meeting at which a quorum is present shall be necessary for the adoption of any matter voted upon by the members, unless a greater proportion is required by this chapter, the articles of incorporation or the bylaws.

SB423,75,18 (2) Amendment to change voting requirements. A bylaw amendment to increase or decrease the vote required for any member action must be approved by the members.

SB423,75,24 (3) Votes by corporations and limited liability companies. A corporate member's vote may be cast by the president of the member corporation, or by any other officer or proxy appointed by the president of such corporation, in the absence of express notice of the designation of some other person by the board of directors or bylaws of the member corporation. A limited liability company member's vote may be cast by a manager of the member limited liability company.

SB423,76,4 181.0724 Proxies. (1) Right to vote by proxy. Unless the articles of incorporation or bylaws prohibit or limit proxy voting, a member may appoint a proxy to vote or otherwise act for the member by signing an appointment form either personally or by an attorney-in-fact.

SB423,76,8 (2) When effective. An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for 11 months unless a different period is expressly provided in the appointment form.

SB423,76,13 (3) Effect of death or incapacity. The death or incapacity of the member appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.

SB423,76,15 (4) Revocability. An appointment of a proxy is revocable by the member unless the appointment form conspicuously states that it is irrevocable.

SB423,76,17 (5) Methods of revocation. Appointment of a proxy is revoked by the person appointing the proxy in any of the following ways:

SB423,76,18 (a) Attending any meeting and voting in person.

SB423,76,21 (b) Signing and delivering to the secretary or other officer or agent authorized to tabulate proxy votes either a writing stating that the appointment of the proxy is revoked or a subsequent appointment form.

SB423,76,25 (6) Acceptance by corporation. Subject to s. 181.0727 and any express limitation on the proxy's authority appearing on the face of the appointment form, a corporation is entitled to accept the proxy's vote or other action as that of the member making the appointment.

SB423,77,5 181.0725 Cumulative voting for directors. (1) In general. If the articles of incorporation or bylaws provide for cumulative voting by members, members may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and cast the product for a single candidate or distribute the product among 2 or more candidates.

SB423,77,7 (2) When not authorized. Cumulative voting is not authorized at a particular meeting unless any of the following occurs:

SB423,77,9 (a) The meeting notice or statement accompanying the notice states that cumulative voting will take place.

SB423,77,13 (b) A member gives notice during the meeting and before the vote is taken of the member's intent to cumulate votes, and if one member gives this notice all other members participating in the election are entitled to cumulate their votes without giving further notice.

SB423,77,20 (3) Removal of directors. A director elected by cumulative voting may be removed by the members without cause if the requirements of s. 181.0808 are met unless the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast, or, if such action is taken by written ballot, all memberships entitled to vote were voted, and the entire number of directors authorized at the time of the director's most recent election were then being elected.

SB423,77,22 (4) Identical membership and directors. Members may not cumulatively vote if the directors and members are identical.

SB423,78,2 181.0726 Other methods of electing directors. A corporation may provide in its articles of incorporation or bylaws for election of directors by members or delegates on the basis of chapter or other organizational unit; by region or other geographic unit; by preferential voting; or by any other reasonable method.

SB423,78,7 181.0727 Acceptance of instruments showing member action. (1) When name corresponds to member. If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a member, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member.

SB423,78,12 (2) When name does not correspond to member. If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the record name of a member, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member if any of the following conditions exists:

SB423,78,14 (a) The member is an entity and the name signed purports to be that of an officer or agent of the entity.

SB423,78,18 (b) The name signed purports to be that of an attorney-in-fact of the member and if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the member has been presented with respect to the vote, consent, waiver, or proxy appointment.

SB423,78,21 (c) Two or more persons hold the membership as cotenants or fiduciaries and the name signed purports to be the name of at least one of the coholders and the person signing appears to be acting on behalf of all of the coholders.

SB423,79,2 (3) When corporation is entitled to reject. The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the member.

SB423,79,6 (4) Liability. The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the member for the consequences of the acceptance or rejection.

SB423,79,9 (5) Validity of action. Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

SB423,79,13 181.0730 Voting agreements. (1) Permissible agreements. Unless prohibited by a corporation's articles of incorporation or bylaws, two or more members may provide for the manner in which they will vote by signing an agreement for that purpose.

SB423,79,15 (2) Enforceability. A voting agreement created under this section is specifically enforceable.

SB423,79,22 181.0735 Voting power. Voting power is determined by taking the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. Where a class is entitled to vote as a class for directors, the determination of voting power of the class shall be based on the percentage of the number of directors the class is entitled to elect out of the total number of authorized directors.

SB423,80,2 181.0740 Derivative proceedings; definition. In ss. 181.0740 to 181.0747, "derivative proceeding" means a civil suit in the right of a corporation or, to the extent provided in ss. 181.0741, 181.0743 and 181.0745 to 181.0747, in the right of a foreign corporation.

SB423,80,7 181.0741 Derivative proceedings; standing. A derivative proceeding may be brought in the right of a corporation or foreign corporation to procure a judgment in its favor by one or more members having 5% or more of the voting power or by 50 members, whichever is less, if each of these members meets all of the following conditions:

SB423,80,10 (1) Membership. The member was a member of the corporation at the time of the act or omission complained of or became a member through transfer by operation of law from a person who was a member at that time.

SB423,80,12 (2) Representing corporation's interests. The member fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

SB423,80,14 181.0742 Derivative proceedings; demand. No member may commence a derivative proceeding until all of the following occur:

SB423,80,16 (1) Written demand. A written demand is made upon the corporation to take suitable action.

SB423,80,21 (2) Expiration of 90-day period. Ninety days expire from the date on which a demand under sub. (1) was made, unless the member is notified before the expiration of the 90 days that the corporation has rejected the demand or unless irreparable injury to the corporation would result by waiting for the expiration of the 90-day period.

SB423,80,25 181.0743 Derivative proceedings; stay of proceedings. If the corporation or foreign corporation commences an inquiry into the allegations made in the demand under s. 181.0742 (1) or in the complaint, the court may stay any derivative proceeding for the period that the court considers appropriate.

SB423,81,7 181.0744 Derivative proceedings; dismissal. (1) When dismissal required. The court shall dismiss a derivative proceeding on motion by the corporation if the court finds, subject to the burden of proof assigned under sub. (5) or (6), that one of the groups specified in sub. (2) or (6) has determined, acting in good faith after conducting a reasonable inquiry upon which its conclusions are based, that maintenance of the derivative proceeding is not in the best interests of the corporation.

SB423,81,9 (2) Independent director determination. Unless a panel is appointed under sub. (6), the determination in sub. (1) shall be made by any of the following:

SB423,81,11 (a) A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum.

SB423,81,15 (b) A majority vote of a committee consisting of 2 or more independent directors appointed by a majority vote of the independent directors present at a meeting of the board of directors, whether or not the voting independent directors constitute a quorum.

SB423,81,18 (3) Who is considered an independent director. Whether a director is independent for purposes of this section may not be determined solely on the basis of any one or more of the following factors:

SB423,81,20 (a) The nomination or election of the director by persons who are defendants in the derivative proceeding or against whom action is demanded.

SB423,81,22 (b) The naming of the director as a defendant in the derivative proceeding or as a person against whom action is demanded.

SB423,81,24 (c) The approval by the director of the act being challenged in the derivative proceeding or demand if the act resulted in no personal benefit to the director.

SB423,82,3 (4) Pleadings when demand rejected. If a derivative proceeding is commenced after a determination was made rejecting a demand by a member, the complaint shall allege with particularity facts establishing any of the following:

SB423,82,5 (a) That a majority of the board of directors did not consist of independent directors at the time that the determination was made.

SB423,82,6 (b) That the requirements of sub. (1) have not been met.

SB423,82,12 (5) Burden of proof. If a majority of the board of directors did not consist of independent directors at the time that the determination rejecting a demand was made, the corporation shall have the burden of proving that the requirements of sub. (1) have been met. If a majority of the board of directors consisted of independent directors at the time that the determination was made, the members shall have the burden of proving that the requirements of sub. (1) have not been met.

SB423,82,17 (6) Court-appointed panel. Upon motion by the corporation, the court may appoint a panel of one or more independent persons to determine whether maintenance of the derivative proceeding is in the best interests of the corporation. If a panel is appointed under this subsection, the members shall have the burden of proving that the requirements of sub. (1) have not been met.

SB423,82,20 181.0745 Derivative proceedings; discontinuance or settlement. A derivative proceeding may not be discontinued or settled without the court's approval.

SB423,82,23 181.0746 Derivative proceedings; payment of expenses. (1) Authority of court. On termination of the derivative proceeding, the court may do any of the following:

SB423,83,4 (a) Notwithstanding s. 814.04 (1), order the domestic corporation or foreign corporation to pay the plaintiff's reasonable expenses, including attorney fees, incurred in the derivative proceeding by the members who commenced or maintained the derivative proceeding if the court finds that the derivative proceeding has resulted in a substantial benefit to the domestic corporation or foreign corporation.

SB423,83,9 (b) Order the members who commenced or maintained the derivative proceeding to pay any defendant's reasonable expenses, including attorney fees, notwithstanding s. 814.04 (1), incurred in defending the derivative proceeding if the court finds that the derivative proceeding was commenced or maintained without reasonable cause or for an improper purpose.

SB423,83,15 (2) Security for expenses. In any action brought in the right of any corporation by fewer than 3% of the members, the defendants shall be entitled, upon application to the court, to require the plaintiffs to give security for the reasonable expenses, including attorney fees. The amount of the security may be increased or decreased by the court having jurisdiction over the action upon a showing that the security has or may become inadequate or excessive.

SB423,83,19 181.0747 Derivative proceedings; applicability. (1) To foreign corporations. In any derivative proceeding in the right of a foreign corporation, the matters covered by ss. 181.0741, 181.0742 and 181.0744 shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation.

SB423,83,23 (2) To corporations without members. Unless the articles of incorporation or bylaws provided otherwise at the time of the act or omission complained of, ss. 181.0741 to 181.0746 apply to corporations without members, except that all references to "member" shall be read as "director".

SB423,83,25 Subchapter VIII Directors and officers

SB423,84,2 181.0801 Requirement for and duties of board. (1) Board required. A corporation shall have a board.

SB423,84,5 (2) Powers of board. Except as provided in this chapter or sub. (3), all corporate powers shall be exercised by or under the authority of, and the affairs of the corporation managed under the direction of, its board.