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180.0825(4) (4)Sections 180.0820 to 180.0823 apply to committees of a board of directors and to committee members.
180.0825(5) (5) To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the authority of the board of directors, except that a committee may not do any of the following:
180.0825(5)(am) (am) Approve or recommend to shareholders for approval any action or matter expressly required by this chapter to be submitted to shareholders for approval.
180.0825(5)(bm) (bm) Adopt, amend, or repeal any bylaw of the corporation.
180.0825(6) (6) Unless otherwise provided by the board of directors in creating the committee, a committee may employ counsel, accountants and other consultants to assist it in the exercise of authority.
180.0825(7) (7) The creation of a committee, delegation of authority to a committee or action by a committee does not relieve the board of directors or any of its members of any responsibility imposed upon the board of directors or its members by law.
180.0825 History History: 1989 a. 303; 2005 a. 476.
180.0826 180.0826 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, valuation reports any of which may be written or oral, formal or informal, including financial statements, valuation reports and other financial data, if prepared or presented by any of the following:
180.0826(1) (1) An officer or employee of the corporation whom the director or officer believes in good faith to be reliable and competent in the matters presented.
180.0826(2) (2) Legal counsel, certified public accountants licensed or certified under ch. 442, or other persons as to matters that the director or officer believes in good faith are within the person's professional or expert competence.
180.0826(3) (3) 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.
180.0826 History History: 1989 a. 303; 2001 a. 16.
180.0827 180.0827 Consideration of interests in addition to shareholders' 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 shareholders, consider the following:
180.0827(1) (1) The effects of the action on employees, suppliers and customers of the corporation.
180.0827(2) (2) The effects of the action on communities in which the corporation operates.
180.0827(3) (3) Any other factors that the director or officer considers pertinent.
180.0827 History History: 1989 a. 303.
180.0828 180.0828 Limited liability of directors.
180.0828(1) (1) Except as provided in sub. (2), a director is not liable to the corporation, its shareholders, or any person asserting rights on behalf of the corporation or its shareholders, 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, unless the person asserting liability proves that the breach or failure to perform constitutes any of the following:
180.0828(1)(a) (a) A willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director has a material conflict of interest.
180.0828(1)(b) (b) A violation of criminal law, unless the director 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.
180.0828(1)(c) (c) A transaction from which the director derived an improper personal profit.
180.0828(1)(d) (d) Willful misconduct.
180.0828(2) (2) A corporation may limit the immunity provided under this section by its articles of incorporation. A limitation under this subsection applies if the cause of action against a director accrues while the limitation is in effect.
180.0828 History History: 1989 a. 303.
180.0828 Annotation The circuit court erred in applying the business judgment rule, codified in this section, in deciding whether the plaintiff's complaint stated a claim against the directors for breach of fiduciary duty. The plaintiff did not need to allege willful misconduct or other noncompliance with the rule in order to survive a motion to dismiss for failure to state a claim for breach of that duty. Data Key Partners v. Permira Advisors LLC, 2013 WI App 107, ___ Wis. 2d ___, ___ N.W.2d ___, 12-1967.
180.0831 180.0831 Director conflict of interest.
180.0831(1) (1) In this section, "conflict of interest transaction" means a transaction with the corporation in which a director of the corporation has a direct or indirect interest.
180.0831(2) (2) A conflict of interest transaction is not voidable by the corporation solely because of the director's interest in the transaction if any of the following is true:
180.0831(2)(a) (a) The material facts of the transaction and the director's interest were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved or specifically ratified the transaction under sub. (4).
180.0831(2)(b) (b) The material facts of the transaction and the director's interest were disclosed or known to the shareholders entitled to vote and they authorized, approved or specifically ratified the transaction under sub. (5).
180.0831(2)(c) (c) The transaction was fair to the corporation.
180.0831(3) (3) For purposes of this section, the circumstances in which a director of the corporation has an indirect interest in a transaction include but are not limited to a transaction under any of the following circumstances:
180.0831(3)(a) (a) Another entity in which the director has a material financial interest or in which the director is a general partner is a party to the transaction.
180.0831(3)(b) (b) Another entity of which the director is a director, officer or trustee is a party to the transaction and the transaction is or, because of its significance to the corporation, should be considered by the board of directors of the corporation.
180.0831(4) (4) For purposes of sub. (2) (a), a conflict of interest transaction is authorized, approved or specifically ratified if it receives the affirmative vote of a majority of the directors on the board of directors or on the committee acting on the transaction, who have no direct or indirect interest in the transaction. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under sub. (2) (a) if the transaction is otherwise authorized, approved or ratified as provided in this section.
180.0831(5) (5) For purposes of sub. (2) (b), a conflict of interest transaction is authorized, approved or specifically ratified if it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director who has a direct or indirect interest in the transaction, and shares owned by or voted under the control of an entity described in sub. (3) (a), may not be counted in a vote of shareholders to determine whether to authorize, approve or ratify a conflict of interest transaction under sub. (2) (b). The vote of those shares shall be counted in determining whether the transaction is approved under other sections of this chapter. A majority of the shares, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.
180.0831 History History: 1989 a. 303.
180.0832 180.0832 Loans to directors.
180.0832(1)(1) Except as provided in sub. (3), a corporation may not lend money to or guarantee the obligation of a director of the corporation unless any of the following occurs:
180.0832(1)(a) (a) The particular loan or guarantee is approved by a majority of the votes represented by the outstanding voting shares of all classes, voting as a single voting group, except the votes of shares owned by or voted under the control of the benefited director.
180.0832(1)(b) (b) The corporation's board of directors 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.
180.0832(2) (2) The fact that a loan or guarantee is made in violation of this section does not affect the borrower's liability on the loan.
180.0832(3) (3) This section does not apply to an advance to a director that is permitted by s. 180.0853 or 180.0858 or that is made to defray expenses incurred by the director in the ordinary course of the corporation's business.
180.0832 History History: 1989 a. 303.
180.0833 180.0833 Liability for unlawful distributions.
180.0833(1)(1) Except as provided in sub. (3), a director who votes for or assents to a distribution made in violation of s. 180.0640 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 s. 180.0640 or the articles of incorporation, if it is established that the director's vote or assent constitutes conduct described by s. 180.0828 (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.
180.0833(2) (2) A director who is liable under sub. (1) for an unlawful distribution is entitled to contribution from all of the following persons:
180.0833(2)(a) (a) Every other director who could be held liable under sub. (1) for the unlawful distribution.
180.0833(2)(b) (b) Each shareholder for the amount that the shareholder accepted knowing that the distribution was made in violation of s. 180.0640 or the articles of incorporation.
180.0833(3) (3) A proceeding under this section is barred unless it is brought within 2 years after the date on which the effect of the distribution was measured under s. 180.0640 (5).
180.0833 History History: 1989 a. 303.
180.0840 180.0840 Officers.
180.0840(1)(1) A corporation shall have the officers described in its bylaws or appointed by its board of directors by resolution not inconsistent with the bylaws.
180.0840(2) (2) A duly appointed officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board of directors.
180.0840(3) (3) The same natural person may simultaneously hold more than one office in a corporation.
180.0840 History History: 1989 a. 303; 1991 a. 16.
180.0841 180.0841 Duties of officers. Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent not inconsistent with the bylaws, the duties prescribed by the board of directors or by direction of an officer authorized by the bylaws or by the board of directors to prescribe the duties of other officers.
180.0841 History History: 1989 a. 303.
180.0843 180.0843 Resignation and removal of officers.
180.0843(1) (1) An officer may resign at any time by delivering notice to the corporation that complies with s. 180.0141. 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 corporation's board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor may not take office until the effective date.
180.0843(2) (2) The board of directors may remove any officer and, unless restricted by the bylaws or by the board of directors, an officer may remove any officer or assistant officer appointed by that officer under s. 180.0840 (2), at any time, with or without cause and notwithstanding the contract rights, if any, of the officer removed.
180.0843 History History: 1989 a. 303.
180.0844 180.0844 Contract rights of officers.
180.0844(1) (1) The appointment of an officer does not itself create contract rights.
180.0844(2) (2) Except as provided in s. 180.0843 (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.
180.0844 History History: 1989 a. 303.
180.0850 180.0850 Definitions applicable to indemnification and insurance provisions. In ss. 180.0850 to 180.0859:
180.0850(1) (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.
180.0850(2) (2) "Director or officer" of a corporation means any of the following:
180.0850(2)(a) (a) An individual who is or was a director or officer of the corporation.
180.0850(2)(b) (b) An individual who, while a director or officer of the 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, employee or agent of another corporation or foreign corporation, limited liability company, partnership, joint venture, trust or other enterprise.
180.0850(2)(c) (c) An individual who, while a director or officer of the corporation, is or was serving an employee benefit plan because his or her duties to the corporation also impose duties on, or otherwise involve services by, the person to the plan or to participants in or beneficiaries of the plan.
180.0850(2)(d) (d) Unless the context requires otherwise, the estate or personal representative of a director or officer.
180.0850(3) (3) "Expenses" include fees, costs, charges, disbursements, attorney fees and any other expenses incurred in connection with a proceeding.
180.0850(4) (4) "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.
180.0850(5) (5) "Party" includes an individual who was or is, or who is threatened to be made, a named defendant or respondent in a proceeding.
180.0850(6) (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.
180.0850 History History: 1989 a. 303; 1993 a. 112; 2003 a. 139.
180.0851 180.0851 Mandatory indemnification.
180.0851(1) (1) 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.
180.0851(2)(a)(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:
180.0851(2)(a)1. 1. A willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest.
180.0851(2)(a)2. 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.
180.0851(2)(a)3. 3. A transaction from which the director or officer derived an improper personal profit.
180.0851(2)(a)4. 4. Willful misconduct.
180.0851(2)(b) (b) Determination of whether indemnification is required under this subsection shall be made under s. 180.0855.
180.0851(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.
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2011-12 Wisconsin Statutes updated though 2013 Wis. Act 200 and all Supreme Court Orders entered before April 18, 2014. Published and certified under s. 35.18. Changes effective after April 18, 2014 are designated by NOTES. (Published 4-18-14)