180.0723(1)
(1) A corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the corporation as the shareholder. The extent of this recognition may be determined in the procedure.
180.0723(2)
(2) The procedure may set forth all of the following:
180.0723(2)(b)
(b) The rights or privileges that the corporation recognizes in a beneficial owner.
180.0723(2)(c)
(c) The manner in which the nominee selects the procedure.
180.0723(2)(d)
(d) The information that must be provided when the procedure is selected.
180.0723(2)(e)
(e) The period for which selection of the procedure is effective.
180.0723 History
History: 1989 a. 303.
180.0724
180.0724
Acceptance of instruments showing shareholder action. 180.0724(1)(1) If the name signed on a vote, consent, waiver or proxy appointment corresponds to the name of a shareholder, the corporation, if acting in good faith, may accept the vote, consent, waiver or proxy appointment and give it effect as the act of the shareholder.
180.0724(2)
(2) If the name signed on a vote, consent, waiver or proxy appointment does not correspond to the name of its shareholder, the corporation, if acting in good faith, may accept the vote, consent, waiver or proxy appointment and give it effect as the act of the shareholder if any of the following apply:
180.0724(2)(a)
(a) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity.
180.0724(2)(b)
(b) The name signed purports to be that of a personal representative, guardian, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation is presented with respect to the vote, consent, waiver, or proxy appointment.
180.0724(2)(c)
(c) The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation is presented with respect to the vote, consent, waiver or proxy appointment.
180.0724(2)(d)
(d) The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder is presented with respect to the vote, consent, waiver or proxy appointment.
180.0724(2)(e)
(e) Two or more persons are the shareholder as cotenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all co-owners.
180.0724(3)
(3) The corporation may reject a vote, consent, waiver or proxy appointment if the secretary or other officer or agent of the corporation who is 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 shareholder.
180.0724(4)
(4) 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 this section or
s. 180.0722 (2) are not liable in damages to the shareholder for the consequences of the acceptance or rejection.
180.0724(5)
(5) Corporate action based on the acceptance or rejection of a vote, consent, waiver or proxy appointment under this section or
s. 180.0722 (2) is valid unless a court of competent jurisdiction determines otherwise.
180.0724 History
History: 1989 a. 303;
1999 a. 9;
2001 a. 102.
180.0725
180.0725
Quorum and voting requirements for voting groups. 180.0725(1)(1) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation, bylaws adopted under authority granted in the articles of incorporation or this chapter provides otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.
180.0725(2)
(2) Once a share is represented for any purpose at a meeting, other than for the purpose of objecting to holding the meeting or transacting business at the meeting, it is considered present for purposes of determining whether a quorum exists, for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.
180.0725(3)
(3) If a quorum exists, action on a matter, other than the election of directors under
s. 180.0728, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the articles of incorporation, bylaws adopted under authority granted in the articles of incorporation or this chapter requires a greater number of affirmative votes.
180.0725 History
History: 1989 a. 303;
1991 a. 16.
180.0726
180.0726
Action by single and multiple voting groups. 180.0726(1)(1) If the articles of incorporation or this chapter provides for voting by a single voting group on a matter, action on that matter is taken when voted upon by the voting group as provided in
s. 180.0725.
180.0726(2)
(2) If the articles of incorporation or this chapter provides for voting by 2 or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in
s. 180.0725. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.
180.0726(3)
(3) A voting group described in
s. 180.0103 (19) (b) constitutes a single voting group for purposes of voting on the matter on which the shares are entitled to vote.
180.0726 History
History: 1989 a. 303.
180.0727
180.0727
Greater or lower quorum or greater voting requirements. 180.0727(1)(1) The articles of incorporation may provide, or authorize the bylaws under
s. 180.1021 to provide, for a greater or lower quorum requirement or a greater voting requirement for shareholders or voting groups of shareholders than is provided by this chapter.
180.0727(2)
(2) An amendment to the articles of incorporation that adds, changes or deletes a greater or lower quorum requirement or a greater voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect.
180.0727 History
History: 1989 a. 303.
180.0728
180.0728
Voting for directors; cumulative voting. 180.0728(1)(1) Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. In this subsection, "plurality" means that the individuals with the largest number of votes are elected as directors up to the maximum number of directors to be chosen at the election.
180.0728(2)
(2) Shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation provide for cumulative voting. If the articles of incorporation contain a statement indicating that all or a designated voting group of shareholders are entitled to cumulate their votes for directors, the shareholders so designated are entitled to multiply the number of votes that they 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.
180.0728(3)(a)(a) Except as provided in
par. (c), shares entitled under
sub. (2) to vote cumulatively may not be voted cumulatively at a particular meeting unless any of the following notice requirements are satisfied:
180.0728(3)(a)1.
1. The meeting notice or proxy statement accompanying the notice states conspicuously that cumulative voting is authorized.
180.0728(3)(a)2.
2. A shareholder who has the right to cumulate his or her votes gives notice that complies with
s. 180.0141 to the corporation not less than 48 hours before the time set for the meeting of his or her intent to cumulate his or her votes during the meeting.
180.0728(3)(b)
(b) If one shareholder gives notice under
par. (a) 2., all other shareholders in the same voting group participating in the election are entitled to cumulate their votes without giving further notice.
180.0728(3)(c)
(c) If shares of a corporation that is a close corporation under
s. 180.1801 are entitled under
sub. (2) to vote cumulatively, the shares may not be voted cumulatively at a particular meeting unless the notice requirement of
par. (a) 1. or
2. is satisfied or unless shares were voted cumulatively in the last election of directors.
180.0728(4)
(4) For purposes of this section, votes against a candidate are not given legal effect and are not counted as votes cast in an election of directors.
180.0728 History
History: 1989 a. 303;
1991 a. 16.
180.0730(1)(1) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust and transferring their shares to the trustee. The voting trust agreement may include any provision consistent with the voting trust's purpose. When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all owners of beneficial interests in the trust, together with the number and class of shares each transferred to the trust, and deliver copies of the list and agreement to the corporation's principal office.
180.0730(2)
(2) A voting trust becomes effective on the date that the first shares subject to the trust are registered in the trustee's name.
180.0730 History
History: 1989 a. 303.
180.0731(1)(1) Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose. A voting agreement created under this section is not subject to
s. 180.0730.
180.0731(2)
(2) A voting agreement created under this section is specifically enforceable.
180.0731 History
History: 1989 a. 303.
180.0740(1)
(1) "Beneficial owner" means a person whose shares are held in a voting trust or held by a nominee on the person's behalf.
180.0740(2)
(2) "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided in
ss. 180.0743 and
180.0745 to
180.0747, in the right of a foreign corporation.
180.0740 History
History: 1989 a. 303;
1991 a. 16.
180.0741
180.0741
Standing. A shareholder or beneficial owner may not commence or maintain a derivative proceeding unless the shareholder or beneficial owner satisfies all of the following:
180.0741(1)
(1) Was a shareholder or beneficial owner of the corporation at the time of the act or omission complained of or became a shareholder or beneficial owner through transfer by operation of law from a person who was a shareholder or beneficial owner at that time.
180.0741(2)
(2) Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.
180.0741 History
History: 1989 a. 303;
1991 a. 16.
180.0741 Annotation
A plaintiff does not fairly and adequately represent the interest of the corporation when a derivative action is used for personal advantage. Whether or not a personal agenda exists is determined by the trial court. Read v. Read,
205 Wis. 2d 558,
561 N.W.2d 768 (Ct. App. 1996),
95-2453.
180.0741 Annotation
To bring an individual claim for breach of fiduciary duty, the complaint must allege facts sufficient, if proved, to show an injury personal to the complainant, rather than primarily to the corporation. The plaintiff must also show that each defendant had a fiduciary duty to the plaintiff in respect to corporate affairs that to each defendant constitutes a breach. Generally a claim of waste of corporate assets must be brought in a derivative action and not as a direct action. Reget v. Paige,
2001 WI App 73,
242 Wis. 2d 278,
626 N.W.2d 302,
99-0838.
180.0741 Annotation
Derivative claims are those a corporation could bring because the corporation's assets are affected. If the injury is one primarily to the corporation, a plaintiff must allege that it was a registered shareholder at the time of the transaction of which it complains. The failure to plead registered shareholder status requires the dismissal of derivative claims. Borne v. Gonstead Advanced Techniques, Inc.
2003 WI App 135,
266 Wis. 2d 253,
667 N.W.2d 709,
01-2624.
180.0742
180.0742
Demand. No shareholder or beneficial owner may commence a derivative proceeding until all of the following occur:
180.0742(1)
(1) A written demand is made upon the corporation to take suitable action.
180.0742(2)
(2) Ninety days expire from the date on which the demand was made, unless the shareholder or beneficial owner is notified before the expiration of 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.
180.0742 History
History: 1989 a. 303;
1991 a. 16.
180.0743
180.0743
Stay of proceedings. If the domestic corporation or foreign corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for the period that the court considers appropriate.
180.0743 History
History: 1989 a. 303;
1991 a. 16.
180.0744(1)(1) 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.
180.0744(2)
(2) Unless a panel is appointed under
sub. (6), the determination in
sub. (1) shall be made by any of the following:
180.0744(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.
180.0744(2)(b)
(b) A majority vote of a committee consisting of 2 or more independent directors appointed by majority vote of independent directors present at a meeting of the board of directors, whether or not the voting, independent directors constitute a quorum.
180.0744(3)
(3) 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:
180.0744(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.
180.0744(3)(b)
(b) The naming of the director as a defendant in the derivative proceeding or as a person against whom action is demanded.
180.0744(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.
180.0744(4)
(4) If a derivative proceeding is commenced after a determination was made rejecting a demand by a shareholder or beneficial owner, the complaint shall allege with particularity facts establishing any of the following:
180.0744(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.
180.0744(5)
(5) 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 shareholder or beneficial owner shall have the burden of proving that the requirements of
sub. (1) have not been met.
180.0744(6)
(6) 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 shareholder or beneficial owner shall have the burden of proving that the requirements of
sub. (1) have not been met.
180.0744 History
History: 1991 a. 16,
173.
180.0744 Annotation
A special litigation committee formed under sub. (2) (b) shall be examined carefully by a circuit court to determine whether its members are independent. The test is whether a committee member has a relationship with a defendant or the corporation that would be reasonably expected to affect the member's judgment with respect to litigation in issue. Einhorn v. Culea,
2000 WI 65,
235 Wis. 2d 646,
612 N.W.2d 78,
97-3592.
180.0745
180.0745
Discontinuance or settlement. A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the beneficial owners, the shareholders or a class of shareholders of the domestic corporation or foreign corporation, the court shall direct that notice be given to the shareholders and beneficial owners affected.
