Chapter 181

181.0825 181.0825 Committees of the board. If the articles of incorporation or bylaws so provide, the board may adopt a resolution designating one or more committees. Each committee shall consist of 3 or more directors elected by the board of directors. To the extent provided by the resolution or in the articles of incorporation or in the bylaws, the committee may exercise the powers of the board with respect to the management of the affairs of the corporation, when the board is not meeting, except for electing officers or the filling of vacancies on the board or on committees created under this section. The board may elect one or more of its members as alternate members of a committee created under this section, who may take the place of absent members at any meeting of the committee. The designation of a committee and the delegation of authority to it does not relieve the board or any director of any responsibility imposed upon the board or director by law.

181.0825 History History: 1997 a. 79.

181.0831 181.0831 Director conflict of interest.

181.0831(1) (1) When contract or transaction is not void or voidable. No contract or other transaction between a corporation and a director, or any entity in which a director is a director or officer or has a material financial interest, is void or voidable because of the relationship or interest or because the director is present at the meeting of the board or a committee that authorizes, approves or ratifies the contract or transaction or because the director’s vote is counted for that purpose, if any of the following applies:

181.0831(1)(a) (a) The relationship or interest is disclosed or known to the board or committee that authorizes, approves or ratifies the contract or transaction and the contract or transaction was authorized, approved or ratified by a vote or consent sufficient for the purpose without counting the votes or consents of interested directors.

181.0831(1)(b) (b) The fact of such relationship or interest is disclosed or known to the members entitled to vote and they authorize, approve or ratify that contract or transaction by vote or written consent.

181.0831(1)(c) (c) The contract or transaction is fair and reasonable to the corporation.

181.0831(2) (2) Quorum requirements. Common and interested directors may be counted in determining the presence of a quorum at a meeting of the board or a committee that authorizes, approves or ratifies a contract or transaction under sub. (1).

181.0831(3) (3) Additional requirements. The articles of incorporation, the bylaws or a resolution of the board may impose additional requirements on conflict of interest transactions.

181.0831 History History: 1997 a. 79.

181.0832 181.0832 Loans to directors and officers.

181.0832(1) (1) Requirements for loan or guarantee. Except as provided in sub. (3), a corporation may not lend money to or guarantee the obligation of a director or officer of the corporation unless any of the following occurs:

181.0832(1)(a) (a) The particular loan or guarantee is approved by the members.

181.0832(1)(b) (b) The corporation’s board 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.

181.0832(2) (2) Effect of violations. A violation of this section does not affect the borrower’s liability on the loan.

181.0832(3) (3) Limited applicability. This section does not apply to an advance to a director or officer that is permitted by s. 181.0874 or 181.0877 (3) or that is made to defray expenses incurred by the director or officer in the ordinary course of the corporation’s business.

181.0832 History History: 1997 a. 79.

181.0833 181.0833 Liability for unlawful distributions.

181.0833(1) (1) When liable. Except as provided in sub. (3), a director who votes for or assents to a distribution made in violation of subch. XIII 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 subch. XIII or the articles of incorporation, if it is established that the director’s vote or assent constitutes conduct described by s. 181.0855 (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.

181.0833(2) (2) Right to contribution. A director who is liable under sub. (1) for an unlawful distribution is entitled to contribution from all of the following persons:

181.0833(2)(a) (a) Every other director who could be held liable under sub. (1) for the unlawful distribution.

181.0833(2)(b) (b) Each member, for the amount that the member accepted knowing that the distribution was made in violation of subch. XIII or the articles of incorporation.

181.0833(3) (3) When proceeding barred. A proceeding under this section is barred unless it is brought within 2 years after the date on which the distribution was made.

181.0833 History History: 1997 a. 79.

181.0840 181.0840 Officers.

181.0840(1) (1) Principal officers. Unless otherwise provided in the articles of incorporation or bylaws, a corporation shall have a president, a secretary, a treasurer and such other officers as are appointed by the board.

181.0840(2) (2) Assistant officers. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board.

181.0840(3) (3) Multiple offices. The same individual may simultaneously hold more than one office in a corporation.

181.0840 History History: 1997 a. 79.

181.0841 181.0841 Duties and authority of officers and agents. Each officer or agent has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties and authority prescribed in a resolution of the board or by direction of an officer authorized by the board to prescribe the duties and authority of other officers.

181.0841 History History: 1997 a. 79.

181.0843 181.0843 Resignation and removal of officers.

181.0843(1) (1) Resignation. An officer may resign at any time by delivering notice to the corporation that complies with s. 181.0141. 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 board, or the officer authorized by the bylaws or the board to appoint the resigning officer, may fill the pending vacancy before the effective date if the appointment provides that the successor may not take office until the effective date.

181.0843(2) (2) Removal. The board may remove any officer and, unless restricted by the bylaws or by the board, an officer may remove any officer or assistant officer appointed by that officer under s. 181.0840 (2), at any time, with or without cause and notwithstanding the contract rights, if any, of the officer removed.

181.0843 History History: 1997 a. 79.

181.0844 181.0844 Contract rights of officers.

181.0844(1) (1) Effect of appointment. The appointment of an officer does not itself create contract rights.

181.0844(2) (2) Effect of removal or resignation. Except as provided in s. 181.0843 (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.

181.0844 History History: 1997 a. 79.

181.0850 181.0850 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, any of which may be written or oral, formal or informal, including financial statements and other financial data, if prepared or presented by any of the following:

181.0850(1) (1) Officers and employees. 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.

181.0850(2) (2) Professionals and experts. Legal counsel, certified public accountants licensed or certified under ch. 442, or other persons as to matters the director or officer believes in good faith are within the person’s professional or expert competence.

181.0850(3) (3) Committees. 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.

181.0850 History History: 1997 a. 79; 2001 a. 16.

181.0853 181.0853 Consideration of interests in addition to members’ 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 members, consider the following:

181.0853(1) (1) Employees, suppliers and customers. The effects of the action on employees, suppliers and customers of the corporation.

181.0853(2) (2) Communities. The effects of the action on communities in which the corporation operates.

181.0853(3) (3) Other. Any other factors that the director or officer considers pertinent.

181.0853 History History: 1997 a. 79.

181.0855 181.0855 Limited liability of directors and officers.

181.0855(1) (1) In general. Except as provided in subs. (2) and (3), a director or officer is not liable to the corporation, its members or creditors, or any person asserting rights on behalf of the corporation, its members or creditors, or any other person, 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 or officer, unless the person asserting liability proves that the breach or failure to perform constitutes any of the following:

181.0855(1)(a) (a) A willful failure to deal fairly with the corporation or its members in connection with a matter in which the director or officer has a material conflict of interest.

181.0855(1)(b) (b) A violation of 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.

181.0855(1)(c) (c) A transaction from which the director or officer derived an improper personal profit or benefit.

181.0855(1)(d) (d) Willful misconduct.

181.0855(2) (2) Exceptions. Except as provided in sub. (3), this section does not apply to any of the following:

181.0855(2)(a) (a) A civil, criminal, administrative or investigatory proceeding brought by or on behalf of any governmental unit, authority or agency.

181.0855(2)(b) (b) A proceeding brought by any person for a violation of state or federal law where the proceeding is brought pursuant to an express private right of action created by state or federal statute.

181.0855(2)(c) (c) The liability of a director under ss. 181.0832 and 181.0833.

181.0855(3) (3) Governmental entity acting in capacity as private party. Subsection (2) (a) and (b) does not apply to a proceeding brought by a governmental unit, authority or agency in its capacity as a private party or contractor.

181.0855 History History: 1997 a. 79.

181.0860 181.0860 Statements of changes in directors or principal officers.

181.0860(1) (1) Changes in directors or principal officers. Whenever initial directors and principal officers are selected, or changes are made in the directors or principal officers of a corporation, the corporation may file with the department a statement that includes the names and addresses of all of the directors or principal officers, or both if there have been changes in both. The information in the statement shall be current as of the date on which the statement is signed on behalf of the corporation.

181.0860(2) (2) Resignation notices. A director who resigns under s. 181.0807 or a principal officer who resigns under s. 181.0843 (1) may file a copy of the resignation notice with the department.

181.0860 History History: 1997 a. 79.

181.0871 181.0871 Definitions applicable to indemnification and insurance provisions. In ss. 181.0871 to 181.0889:

181.0871(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.

181.0871(2) (2) “Director or officer” means any of the following:

181.0871(2)(a) (a) An individual who is or was a director or officer of a corporation.

181.0871(2)(b) (b) An individual who, while a director or officer of a 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.

181.0871(2)(c) (c) An individual who, while a director or officer of a 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 individual to the plan or to participants in or beneficiaries of the plan.

181.0871(2)(d) (d) Unless the context requires otherwise, the estate or personal representative of a director or officer.

181.0871(3) (3) “Expenses” include fees, costs, charges, disbursements, attorney fees and any other expenses incurred in connection with a proceeding.

181.0871(4) (4) “Liability” includes the obligation to pay a judgment, settlement, forfeiture, or fine, including any excise tax assessed with respect to an employee benefit plan, plus costs, fees, and surcharges imposed under ch. 814, and reasonable expenses.

181.0871(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.

181.0871(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.

181.0871 History History: 1997 a. 79; 2003 a. 139.

181.0872 181.0872 Mandatory indemnification.

181.0872(1) (1) In general. 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.

181.0872(2) (2) Exceptions.

181.0872(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:

181.0872(2)(a)1. 1. A willful failure to deal fairly with the corporation or its members in connection with a matter in which the director or officer has a material conflict of interest.

181.0872(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.

181.0872(2)(a)3. 3. A transaction from which the director or officer derived an improper personal profit or benefit.

181.0872(2)(a)4. 4. Willful misconduct.

181.0872(2)(b) (b) Determination of whether indemnification is required under this subsection shall be made under s. 181.0873.

181.0872(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.

181.0872(3) (3) Written request required. A director or officer who seeks indemnification under this section shall make a written request to the corporation.

181.0872(4) (4) Limitation by articles of incorporation.