Chapter 181

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.

181.0872(4)(a) (a) Indemnification under this section is not required to the extent limited by the articles of incorporation under s. 181.0875.

181.0872(4)(b) (b) Indemnification under this section is not required if the director or officer has previously received indemnification, reimbursement or allowance of expenses from any person, including the corporation, in connection with the same proceeding.

181.0872 History History: 1997 a. 79.

181.0873 181.0873 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 corporation, the director or officer seeking indemnification under s. 181.0872 (2) shall select one of the following means for determining his or her right to indemnification:

181.0873(1) (1) Board of director 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 a 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.

181.0873(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.

181.0873(3) (3) 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.

181.0873(4) (4) Members. By an affirmative vote of members with voting rights, if any. Membership rights 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.

181.0873(5) (5) Court. By a court under s. 181.0879.

181.0873(6) (6) Other methods. By any other method provided for in any additional right to indemnification permitted under s. 181.0877.

181.0873 History History: 1997 a. 79.

181.0874 181.0874 Allowance of expenses as incurred. Upon written request by a director or officer who is a party to a proceeding, a corporation may pay or reimburse his or her reasonable expenses as incurred if the director or officer provides the corporation with all of the following:

181.0874(1) (1) Written affirmation. 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 corporation.

181.0874(2) (2) Repayment undertaking. A written undertaking, executed personally or on his or her behalf, to repay the allowance and, if required by the corporation, to pay reasonable interest on the allowance to the extent that it is ultimately determined under s. 181.0873 that indemnification under s. 181.0872 (2) is not required and that indemnification is not ordered by a court under s. 181.0879 (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.

181.0874 History History: 1997 a. 79.

181.0875 181.0875 Corporation may limit indemnification.

181.0875(1) (1) Methods of limiting obligation. A corporation’s obligations to indemnify under s. 181.0872 may be limited as follows:

181.0875(1)(a) (a) If the corporation is incorporated on or after June 13, 1987, by the articles of incorporation, including any amendments or restatements of the articles of incorporation.

181.0875(1)(b) (b) If the corporation was incorporated before June 13, 1987, by an amendment to, or restatement of, the articles of incorporation which becomes effective on or after June 13, 1987.

181.0875(2) (2) Applicability. A limitation under sub. (1) applies if the first alleged act of a director or officer for which indemnification is sought occurred while the limitation was in effect.

181.0875 History History: 1997 a. 79.

181.0877 181.0877 Additional rights to indemnification and allowance of expenses.

181.0877(1) (1) Additional rights to indemnification. Except as provided in sub. (2), ss. 181.0872 and 181.0874 do not preclude any additional right to indemnification or allowance of expenses that a director or officer may have under any of the following:

181.0877(1)(a) (a) The articles of incorporation or bylaws.

181.0877(1)(b) (b) A written agreement between the director or officer and the corporation.

181.0877(1)(c) (c) A resolution of the board of directors.

181.0877(1)(d) (d) A resolution, after notice, adopted by a majority vote of members who are entitled to vote.

181.0877(2) (2) When prohibited. Regardless of the existence of an additional right under sub. (1), the corporation 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 corporation that the director or officer did not breach or fail to perform a duty that he or she owes to the corporation which constitutes conduct under s. 181.0872 (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.

181.0877(3) (3) Applicability. Sections 181.0871 to 181.0883 do not affect a corporation’s power to pay or reimburse expenses incurred by a director or officer in any of the following circumstances:

181.0877(3)(a) (a) As a witness in a proceeding to which he or she is not a party.

181.0877(3)(b) (b) As a plaintiff or petitioner in a proceeding because he or she is or was an employee, agent, director or officer of the corporation.

181.0877 History History: 1997 a. 79.

181.0879 181.0879 Court-ordered indemnification.

181.0879(1) (1) Application to court. Except as provided otherwise by written agreement between the director or officer and the corporation, 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. 181.0873 (5) or for review by the court of an adverse determination under s. 181.0873 (1), (2), (3), (4) or (6). After receipt of an application, the court shall give any notice it considers necessary.

181.0879(2) (2) Standards used by court. The court shall order indemnification if it determines any of the following:

181.0879(2)(a) (a) That the director or officer is entitled to indemnification under s. 181.0872 (1) or (2). If the court also determines that the corporation unreasonably refused the director’s or officer’s request for indemnification, the court shall order the corporation to pay the director’s or officer’s reasonable expenses incurred to obtain the court-ordered indemnification.

181.0879(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. 181.0872 (2).

181.0879 History History: 1997 a. 79.

181.0881 181.0881 Indemnification and allowance of expenses of employees and agents. A corporation 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.

181.0881 History History: 1997 a. 79.

181.0883 181.0883 Insurance. A corporation may purchase and maintain insurance on behalf of an individual who is an employee, agent, director or officer of the corporation against liability asserted against and 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 corporation is required or authorized to indemnify or allow expenses to the individual against the same liability under ss. 181.0872, 181.0874, 181.0877 and 181.0881.

181.0883 History History: 1997 a. 79.

181.0889 181.0889 Indemnification and insurance against securities law claims.

181.0889(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. 181.0871 to 181.0883.

181.0889(2) (2) Scope of securities regulation. Sections 181.0871 to 181.0883 apply, to the extent applicable to any other proceeding, to any proceeding involving a federal or state statute, rule or regulation regulating the offer, sale or purchase of securities, securities brokers or dealers, or investment companies or investment advisers.

181.0889 History History: 1997 a. 79.

subch. IX of ch. 181 SUBCHAPTER IX

[RESERVED]

subch. X of ch. 181 SUBCHAPTER X

AMENDMENT OF ARTICLES OF
INCORPORATION AND BYLAWS

181.1001 181.1001 Authority to amend articles of incorporation. A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted to be included in the articles of incorporation or to delete a provision that is not required in the articles of incorporation. Whether a provision is required or permitted to be included in the articles of incorporation is determined as of the effective date of the amendment.

181.1001 History History: 1997 a. 79.

181.1002 181.1002 Amendment of articles of incorporation by directors.

181.1002(1) (1) Corporations with voting rights. Unless the articles of incorporation provide otherwise, a corporation’s board may adopt any of the following amendments to the corporation’s articles of incorporation, without the approval of members with voting rights:

181.1002(1)(a) (a) To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law.

181.1002(1)(b) (b) To delete the names and addresses of the initial directors.

181.1002(1)(c) (c) To delete the names and addresses of the incorporators.

181.1002(1)(d) (d) To delete the name and address of a former registered agent or registered office, if a statement of change is on file with the department.

181.1002(1)(e) (e) To change the registered agent or the registered office.

181.1002(1)(f) (f) To change the corporate name by substituting the word “corporation”, “incorporated”, “company” or, “limited”, or the abbreviation “corp.”, “inc.”, “co.”, or “ltd.”, or words or abbreviations of similar meaning in another language, for a similar word or abbreviation in the name, or by adding, deleting or changing a geographical attribution to the name.

181.1002(1)(g) (g) To make any other change expressly permitted by this chapter to be made without member approval.

181.1002(2) (2) Corporations with no voting members. If a corporation has no members with voting rights, its incorporators, until directors have been chosen, and thereafter its board, may adopt amendments to the corporation’s articles of incorporation subject to any approval required under s. 181.1030. The corporation shall provide notice of any meeting at which an amendment is to be voted upon. The notice shall be in accordance with s. 181.0822 (3). The notice must also state that the purpose, or one of the purposes, of the meeting is to consider a proposed amendment to the articles of incorporation and contain or be accompanied by a copy or summary of the amendment or state the general nature of the amendment. The amendment must be approved by a majority of the directors in office at the time that the amendment is adopted.

181.1002 History History: 1997 a. 79.

181.1003 181.1003 Amendment of articles of incorporation by directors and members.

181.1003(1) (1) In general. Unless this chapter, the articles of incorporation or the bylaws require a greater vote or voting by class, an amendment to a corporation’s articles of incorporation to be adopted must be approved by all of the following:

181.1003(1)(b) (b) Except as provided in s. 181.1002 (1), the members by two-thirds of the votes cast or a majority of the voting power, whichever is less.

181.1003(1)(c) (c) A person, in writing, whose approval is required by a provision of the articles of incorporation authorized under s. 181.1030.