181.0724 History
History: 1997 a. 79.
181.0725
181.0725
Cumulative voting for directors. 181.0725(1)
(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.
181.0725(2)
(2) When not authorized. Cumulative voting is not authorized at a particular meeting unless any of the following occurs:
181.0725(2)(a)
(a) The meeting notice or statement accompanying the notice states that cumulative voting will take place.
181.0725(2)(b)
(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.
181.0725(3)
(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.
181.0725(4)
(4) Identical membership and directors. Members may not cumulatively vote if the directors and members are identical.
181.0725 History
History: 1997 a. 79.
181.0726
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.
181.0726 History
History: 1997 a. 79.
181.0727
181.0727
Acceptance of instruments showing member action. 181.0727(1)(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.
181.0727(2)
(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:
181.0727(2)(a)
(a) The member is an entity and the name signed purports to be that of an officer or agent of the entity.
181.0727(2)(b)
(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.
181.0727(2)(c)
(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.
181.0727(3)
(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.
181.0727(4)
(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.
181.0727(5)
(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.
181.0727 History
History: 1997 a. 79.
181.0730(1)(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.
181.0730(2)
(2) Enforceability. A voting agreement created under this section is specifically enforceable.
181.0730 History
History: 1997 a. 79.
181.0735
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.
181.0735 History
History: 1997 a. 79.
181.0740 History
History: 1997 a. 79.
181.0741
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:
181.0741(1)
(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.
181.0741(2)
(2) Representing corporation's interests. The member fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.
181.0741 History
History: 1997 a. 79.
181.0742
181.0742
Derivative proceedings; demand. No member may commence a derivative proceeding until all of the following occur:
181.0742(1)
(1) Written demand. A written demand is made upon the corporation to take suitable action.
181.0742(2)
(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.
181.0742 History
History: 1997 a. 79.
181.0743
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.
181.0743 History
History: 1997 a. 79.
181.0744
181.0744
Derivative proceedings; dismissal. 181.0744(1)(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.
181.0744(2)
(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:
181.0744(2)(a)
(a) A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum.
181.0744(2)(b)
(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.
181.0744(3)
(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:
181.0744(3)(a)
(a) The nomination or election of the director by persons who are defendants in the derivative proceeding or against whom action is demanded.
181.0744(3)(b)
(b) The naming of the director as a defendant in the derivative proceeding or as a person against whom action is demanded.
181.0744(3)(c)
(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.
181.0744(4)
(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:
181.0744(4)(a)
(a) That a majority of the board of directors did not consist of independent directors at the time that the determination was made.
181.0744(5)
(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.
181.0744(6)
(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.
181.0744 History
History: 1997 a. 79.
181.0745
181.0745
Derivative proceedings; discontinuance or settlement. A derivative proceeding may not be discontinued or settled without the court's approval.
181.0745 History
History: 1997 a. 79.
181.0746
181.0746
Derivative proceedings; payment of expenses. 181.0746(1)(1)
Authority of court. On termination of the derivative proceeding, the court may do any of the following:
181.0746(1)(a)
(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.
181.0746(1)(b)
(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.
181.0746(2)
(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.
181.0746 History
History: 1997 a. 79.
181.0747
181.0747
Derivative proceedings; applicability. 181.0747(1)
(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.
181.0747(2)
(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".
181.0747 History
History: 1997 a. 79.
DIRECTORS AND OFFICERS
181.0801
181.0801
Requirement for and duties of board. 181.0801(1)(1)
Board required. A corporation shall have a board.
181.0801(2)
(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.
181.0801(3)(a)(a) The articles of incorporation or bylaws approved by the members, if any, may authorize a person to exercise some or all of the powers which would otherwise be exercised by a board. To the extent so authorized such a person shall have the duties and responsibilities of the board, and the directors shall be relieved to that extent from such duties and responsibilities.
181.0801(3)(b)
(b) A person is not a member of the board solely because of powers delegated to that person under
par. (a).
181.0801 History
History: 1997 a. 79.
181.0802
181.0802
Qualifications of directors. A director shall be an individual. The articles of incorporation or bylaws may prescribe other qualifications for directors. A director need not be a resident of this state or a member of the corporation unless the articles of incorporation or bylaws so prescribe.
181.0802 History
History: 1997 a. 79.
181.0803(1)
(1)
Minimum number. A board shall consist of 3 or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws.
181.0803(2)
(2) Changes in board size. The number of directors may be increased or, subject to
sub. (1), decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or bylaws.
181.0803 History
History: 1997 a. 79.
181.0804
181.0804
Election, designation and appointment of directors. 181.0804(1)(1)
Corporation with members. If the corporation has members, all of the directors except the initial directors shall be elected at the first annual meeting of members, and at each annual meeting thereafter, unless the articles of incorporation or bylaws provide some other time or method of election, or provide that some of the directors are appointed by some other person or are designated.
181.0804(2)
(2) Corporation without members. If the corporation does not have members, all of the directors except the initial directors shall be elected, appointed or designated as provided in the articles of incorporation or bylaws. If no method of designation or appointment is set forth in the articles of incorporation or bylaws, the directors other than the initial directors shall be elected by the board.
181.0804 History
History: 1997 a. 79.
181.0805
181.0805
Terms of directors generally. 181.0805(1)
(1)
In general. The articles of incorporation or bylaws shall specify the term of a director. In the absence of any term specified in the articles of incorporation or bylaws, the term of a director shall be one year. Directors may be elected for successive terms.
181.0805(2)
(2) Effect of changes on incumbent. A decrease in the number of directors or term of office does not shorten an incumbent director's term.
181.0805(3)
(3) Vacancies. Except as provided in the articles of incorporation or bylaws, the term of a director filling a vacancy in the office of a director elected by members expires at the next election of directors by members and the term of a director filling any other vacancy expires at the end of the unexpired term that the director is filling.
