221.0625 Cross-reference
Cross Reference: See also ch.
DFI-Bkg 18, Wis. adm. code.
221.0626(1)
(1) "Director or officer" means any of the following:
221.0626(1)(a)
(a) An individual who is or was a director or officer of a bank.
221.0626(1)(b)
(b) An individual who, while a director or officer of a bank, is or was serving at the bank's request as a director, officer, partner, trustee, member of any governing or decision-making committee, manager, employee or agent of another bank, corporation, limited liability company, partnership, joint venture, trust or other enterprise.
221.0626(1)(c)
(c) An individual who, while a director or officer of a bank, is or was serving an employee benefit plan because his or her duties to the bank also impose duties on, or otherwise involve services by, the person to the plan or to participants in or beneficiaries of the plan.
221.0626(1)(d)
(d) Unless the context requires otherwise, the estate or personal representative of a director or officer of a bank.
221.0626(2)
(2) "Expenses" include fees, costs, charges, disbursements, attorney fees and any other expenses incurred in connection with a proceeding.
221.0626(3)
(3) "Liability" includes the obligation to pay a judgment, settlement, forfeiture, or fine, including an excise tax assessed with respect to an employee benefit plan, plus costs, fees, and surcharges imposed under
ch. 814, and reasonable expenses.
221.0626(4)
(4) "Party" includes an individual who was or is, or who is threatened to be made, a named defendant or respondent in a proceeding.
221.0626(5)
(5) "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 bank or by any other person.
221.0626 History
History: 1995 a. 336;
2003 a. 139.
221.0627
221.0627
Mandatory indemnification. 221.0627(1)
(1)
When successful in defense of a proceeding. A bank 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.
221.0627(2)
(2) When unsuccessful in defense of a proceeding. 221.0627(2)(a)(a) In cases not included under
sub. (1), a bank 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, unless liability was incurred because the director or officer breached or failed to perform a duty that he or she owes to the bank and the breach or failure to perform constitutes any of the following:
221.0627(2)(a)1.
1. A willful failure to deal fairly with the bank or its shareholders in connection with a matter in which the director or officer has a material conflict of interest.
221.0627(2)(a)2.
2. A violation of a criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful.
221.0627(2)(a)3.
3. A transaction from which the director or officer derived an improper personal profit.
221.0627(2)(b)
(b) Determination of whether indemnification is required under this subsection shall be made under
s. 221.0631.
221.0627(2)(c)
(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.
221.0627(3)
(3) How indemnification may be sought. A director or officer who seeks indemnification under this section shall make a written request to the bank.
221.0627(4)(a)(a) Indemnification under this section is not required to the extent limited by the articles of incorporation under
s. 221.0628.
221.0627(4)(b)
(b) Indemnification under this section is not required if the director or officer has previously received indemnification or allowance of expenses from any person, including the bank, in connection with the same proceeding.
221.0627(4)(c)
(c) Indemnification under this section is not required to the extent expressly prohibited by other provisions of this chapter,
ch. 220 or applicable federal law or in connection with an administrative proceeding or action instituted under
ch. 220 which results in a final order against the officer or director under
s. 220.04 (4),
(9) or
(10).
221.0627 History
History: 1995 a. 336.
221.0628
221.0628
Bank may limit indemnification. A bank's articles of incorporation may limit its obligation to indemnify under
s. 221.0627. Any provision of the articles of incorporation relating to a banks power or obligation to indemnify that was in existence on July 1, 1996, does not constitute a limitation on the bank's obligation to indemnify under
s. 221.0627. A limitation under this section applies if the first alleged act or omission of a director or officer for which indemnification is sought occurred while the limitation was in effect.
221.0628 History
History: 1995 a. 336.
221.0629
221.0629
Allowance of expenses as incurred. Upon written request by a director or officer who is a party to a proceeding, a bank may pay or reimburse his or her reasonable expenses as incurred if the director or officer provides the bank with all of the following:
221.0629(1)
(1) Affirmation of good faith belief. 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 bank.
221.0629(2)
(2) Undertaking to repay. A written undertaking, executed personally or on his or her behalf, to repay the allowance and, if required by the bank, to pay reasonable interest on the allowance to the extent that it is ultimately determined under
s. 221.0631 that indemnification under
s. 221.0627 (2) is not required and that indemnification is not ordered by a court under
s. 221.0630 (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.
221.0629 History
History: 1995 a. 336.
221.0630
221.0630
Court-ordered indemnification. 221.0630(1)
(1)
Application for indemnification. Except as provided otherwise by written agreement between the director or officer and the bank, a director or officer who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. Application shall be made for an initial determination by the court under
s. 221.0631 (5) or for review by the court of an adverse determination under
s. 221.0631 (1),
(2),
(3),
(4) or
(6). After receipt of an application, the court shall give any notice that it considers necessary.
221.0630(2)
(2) When to be ordered by court. The court shall order indemnification if it determines any of the following:
221.0630(2)(a)
(a) That the director or officer is entitled to indemnification under
s. 221.0627. If the court also determines that the bank unreasonably refused the director's or officer's request for indemnification, the court shall order the bank to pay the director's or officer's reasonable expenses incurred to obtain the court-ordered indemnification.
221.0630(2)(b)
(b) That the director or officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, regardless of whether indemnification is required under
s. 221.0627.
221.0630 History
History: 1995 a. 336.
221.0631
221.0631
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 bank, the director or officer seeking indemnification under
s. 221.0627 (2) shall select one of the following means for determining his or her right to indemnification:
221.0631(1)
(1) Board or committee 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 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.
221.0631(2)
(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.
221.0631(3)
(3) Panel of 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.
221.0631(4)
(4) Shareholder vote. By an affirmative vote of shares as provided in
s. 221.0501. Shares 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.
221.0631(6)
(6) Other methods. By any other method provided for in any additional right to indemnification permitted under
s. 221.0634.
221.0631 History
History: 1995 a. 336.
221.0632
221.0632
Indemnification and allowance of expenses of employees and agents. 221.0632(1)
(1)
Mandatory indemnification. Except as provided in
sub. (3), a bank shall indemnify an employee who is not a director or officer, to the extent that he or she has been successful on the merits or otherwise in defense of a proceeding, for all reasonable expenses incurred in the proceeding if the employee was a party because he or she was an employee of the bank.
221.0632(2)
(2) Permitted indemnification. Except as provided in
sub. (3), in addition to the indemnification required by
sub. (1), a bank may indemnify and allow reasonable expenses of an employee or agent who is not a director or officer to the extent provided by the articles of incorporation or bylaws, by general or specific action of the board of directors or by contract.
221.0632(3)
(3) Prohibited indemnification. A bank may not indemnify or allow reasonable expenses of an employee or agent who is not a director or officer if the indemnification or allowance is expressly prohibited by
s. 221.0803, by other provisions of this chapter or by applicable federal law or in connection with an administrative proceeding or action instituted under
ch. 220 which results in a final order against an officer or director under
s. 220.04 (4),
(9) or
(10).
221.0632 History
History: 1995 a. 336.
221.0633
221.0633
Insurance. Except as expressly prohibited by other provisions of this chapter or applicable federal law or in connection with an administrative proceeding or action instituted under
ch. 220 which results in a final order against an employee, agent, director or officer under
s. 220.04 (4),
(9) or
(10), a bank may purchase and maintain insurance on behalf of the employee, agent, director or officer against liability asserted against or incurred by the individual in his or her capacity as an employee, agent, director or officer or arising from his or her status as an employee, agent, director or officer, regardless of whether the bank is required or authorized to indemnify or allow expenses to the individual against the same liability under
ss. 221.0627,
221.0629,
221.0632 and
221.0634.
221.0633 History
History: 1995 a. 336.
221.0634
221.0634
Additional rights to indemnification and allowance of expenses. 221.0634(1)
(1)
Provision for additional rights. Except as provided in
sub. (2) and except as expressly prohibited by other provisions of this chapter or applicable federal law or in connection with an administrative proceeding or action instituted under
ch. 220 which results in a final order against an officer or director under
s. 220.04 (4),
(9) or
(10),
ss. 221.0627 and
221.0629 do not preclude any additional right to indemnification or allowance of expenses that a director or officer may have under any of the following:
221.0634(1)(b)
(b) A written agreement between the director or officer and the bank.
221.0634(1)(d)
(d) A resolution that is adopted, after notice, by a majority vote of all of the bank's voting shares then issued and outstanding.
221.0634(2)
(2) When additional rights prohibited. Regardless of the existence of an additional right under
sub. (1), the bank may not indemnify a director or officer, or permit a director or officer to retain any allowance of expenses, unless it is determined by or on behalf of the bank that the director or officer did not breach or fail to perform a duty that he or she owes to the bank which constitutes conduct under
s. 221.0627 (2) (a) 1.,
2.,
3. or
4. A director or officer who is a party to the same or related proceeding for which indemnification or an allowance of expenses is sought may not participate in a determination under this subsection.
221.0634(3)
(3) Reimbursement of certain expenses. Sections 221.0626 to
221.0635 do not affect a bank's power to pay or reimburse expenses incurred by a director or officer in any of the following circumstances:
221.0634(3)(a)
(a) As a witness in a proceeding to which he or she is not a party.
221.0634(3)(b)
(b) As a plaintiff or petitioner in a proceeding because he or she is or was an employee, agent, director or officer.
221.0634 History
History: 1995 a. 336.
221.0635
221.0635
Indemnification and insurance against securities law claims. 221.0635(1)(1)
In general. It is the public policy of this state to require or permit indemnification, allowance of expenses and insurance for any liability incurred in connection with a proceeding involving securities regulation described under
sub. (2) to the extent required or permitted under
ss. 221.0626 to
221.0634.
221.0635(2)
(2) Applicability. Sections 221.0626 to
221.0634 apply, to the extent applicable to any other proceeding, to any proceeding involving a federal law or regulation or a state law or rule that regulates the offer, sale or purchase of securities, securities brokers or dealers, or investment companies or investment advisors.
221.0635 History
History: 1995 a. 336.
221.0636(1)(a)(a) An officer, director, employee or agent of a bank may not do any of the following:
221.0636(1)(a)1.
1. Steal, abstract or willfully misapply money, funds, credits, or property of the bank, whether owned by the bank or held in trust.
221.0636(1)(a)2.
2. Without authority of the board of directors, issue or put forth a certificate of deposit, draw an order or bill of exchange or make an acceptance, assign a note, bond, draft, bill of exchange, mortgage, judgment or decree.
221.0636(1)(a)3.
3. Make a false entry in a book, report or statement of the bank with intent to injure or defraud the bank or any person, or to deceive an officer of the bank, an agent appointed to examine the affairs of the bank, or any other person.
221.0636(1)(b)
(b) A person may not intentionally aid or abet a violation of
par. (a).
221.0636(2)
(2) Penalty. Any person who violates
sub. (1) is guilty of a Class H felony.
221.0637
221.0637
Bank officers and employees not to take commissions. 221.0637(1)(1)
Commissions prohibited. An officer, director, agent or employee of a bank may not, directly or indirectly, take, accept or receive, or offer or agree to take, accept or receive, a commission, fee, compensation, or thing of material value, from any person in consideration of the bank of which he or she is an officer, director, agent or employee, doing any of the following:
221.0637(1)(b)
(b) Buying or discounting a note, bond, draft, or bill of exchange from the person.
221.0637(1)(c)
(c) Accepting any draft for, or issuing any letter of credit to, the person.
221.0637(2)
(2) Penalties. Any person who violates
sub. (1) is guilty of a Class I felony.
SUBCHAPTER VII
SHARE EXCHANGE, MERGER AND
CONSOLIDATION
