Chapter 193

COOPERATIVE POWERS

193.301 193.301 Cooperative powers.

193.301(1) (1) Generally. In addition to other powers, a cooperative may perform every act necessary or proper to the conduct of the cooperative’s business or the accomplishment of the purposes of the cooperative. A cooperative has all rights, powers, and privileges granted to entities organized under ch. 185, except those that are inconsistent with an express provision of this chapter.

193.301(2) (2) Dealing in products. A cooperative may buy, sell, or deal in its own products or the products of any other person and may negotiate the sales price of any product the cooperative sells.

193.301(3) (3) Contracts with members. A cooperative may enter into or become a party to a contract for the cooperative or for the cooperative’s individual members or patrons or between the cooperative and its members.

193.301(4) (4) Acts concerning real and personal property.

193.301(4)(a) (a) A cooperative may acquire and hold, lease, mortgage, encumber, sell, exchange and convey real and personal property as the business of the cooperative may require.

193.301(4)(b) (b) A cooperative may act as trustee or in any fiduciary capacity for any purpose not inconsistent with the purposes of the cooperative, subject to any applicable requirements of s. 223.105.

193.301(6) (6) Debt instruments, borrowing, security, and investing. A cooperative may do any of the following:

193.301(6)(a) (a) Issue bonds, debentures, or other evidence of indebtedness.

193.301(6)(b) (b) Borrow money to finance the business of the cooperative.

193.301(6)(c) (c) Secure any of its obligations by mortgage of, creation of a security interest in, or other encumbrance or assignment of all or any of its property, franchises, or income.

193.301(6)(d) (d) Form special purpose business entities to secure assets of the cooperative.

193.301(6)(e) (e) Invest its funds.

193.301(6)(f) (f) Acquire, hold, and dispose of evidences of indebtedness of any business entity.

193.301(7) (7) Advances to patrons. A cooperative may make advances to the cooperative’s members or patrons on products delivered by the members or patrons to the cooperative.

193.301(8) (8) Donations. A cooperative may accept donations of money and donations of real or personal property from its members.

193.301(9) (9) Lending to and borrowing from members. A cooperative may loan money to its members with security that it considers sufficient, whether or not any property taken as security is of the kind dealt in by the cooperative, and may borrow money from its members.

193.301(10) (10) Pensions and benefits.

193.301(10)(a) (a) A cooperative may pay pensions, retirement benefits, and compensation for past services to or for the benefit of the cooperative.

193.301(10)(b) (b) A cooperative may establish and carry out employee benefit plans and provisions for the benefit of any or all of its and its affiliates, officers, managers, directors, governors, employees, and agents. In the case of an affiliate that is a cooperative, a cooperative may establish and carry out provisions for the benefit of the affiliate’s members who provide services to the cooperative, and the families, dependents, and beneficiaries of any of them. A cooperative may indemnify a fiduciary of any employee benefit plan or provisions established under this paragraph and purchase insurance for or on behalf of such a fiduciary.

193.301(11) (11) Insurance. A cooperative may purchase for its benefit life insurance and other insurance with respect to the services of any of its members, managers, directors, employees, and agents, and may purchase insurance on the life of a member for the purpose of facilitating the cooperative’s acquisition of any of the member’s membership interests in the cooperative at the death of the member.

193.301(12) (12) Ownership interests in other entities.

193.301(12)(a) (a) A cooperative may acquire, hold, or dispose of ownership interests in another business entity and, if a cooperative acquires ownership interests under this paragraph, assume all rights, interests, privileges, responsibilities, and obligations arising out of the ownership interests. A cooperative that holds an ownership interest in another business entity may, by direction of the board, elect or appoint an individual to represent the cooperative at a meeting of the business entity. The representative may represent the cooperative at such a meeting and may cast any vote the cooperative is entitled to cast at the meeting.

193.301(12)(b) (b) A cooperative may organize business entities.

193.301(12)(c) (c) A cooperative may acquire ownership interests in or organize an entity to which any of the following apply:

193.301(12)(c)1. 1. The entity is organized as a federation of associations.

193.301(12)(c)2. 2. The entity is organized for the purpose of forming a district, state, or national marketing, sales, or service agency.

193.301(12)(c)3. 3. The entity is organized for the purpose of acquiring marketing facilities at terminal or other markets in this state or other states.

193.301(14) (14) Forfeiture.

193.301(14)(a) (a) Notwithstanding ch. 177, a cooperative may effect the forfeiture to the cooperative of unclaimed allocations, distributions, or credits under this chapter or under s. 185.45 (2) (b) and (c), (3) (a) and (b), and (4) (b), unclaimed stock issued by the cooperative, and unclaimed deposits held by the cooperative, if all of the following conditions are met:

193.301(14)(a)1. 1. No earlier than 3 years and no later than 5 years after the allocation, distribution, or credit is first made available to its owner, the board declares that the allocation, distribution, or credit will be forfeited to the cooperative unless claimed by a date determined by the board, which date shall be a business day at least 60 days after the date of mailing under subd. 2.

193.301(14)(a)2. 2. The cooperative mails a written notice of the declaration under subd. 1. to the owner of the allocation, distribution, or credit at the owner’s last-known address, as reflected in the records of the cooperative.

193.301(14)(a)3. 3. The cooperative publishes the notice under subd. 2. as a class 1 notice under ch. 985, on or before the date on which the notice is mailed, in a newspaper published in a municipality having territory within the service area of the cooperative.

193.301(14)(a)4. 4. The allocation, distribution, or credit remains unclaimed after the date determined by the board under subd. 1.

193.301(14)(b) (b) A cooperative that effects a forfeiture under par. (a) shall use any forfeited moneys within one year after the date on which the funds are forfeited for providing scholarships or educational loans to students or for charitable purposes, as determined by the board.

193.301(14)(c) (c) Property forfeited under this subsection is not subject to ch. 177.

193.301 History History: 2005 a. 441.

193.305 193.305 Emergency powers.

193.305(1) (1) In anticipation of or during an emergency, as defined in sub. (4), the board may do any of the following:

193.305(1)(a) (a) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent.

193.305(1)(b) (b) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

193.305(2) (2) All of the following apply during an emergency, as defined in sub. (4), unless emergency bylaws under s. 193.241 (7) provide otherwise:

193.305(2)(a) (a) Notice of a meeting of the board need be given only to those directors whom it is practicable to reach and may be given in any practicable manner.

193.305(2)(b) (b) One or more officers of the cooperative present at a meeting of the board may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.

193.305(3) (3) Action taken in good faith during an emergency under this section to further the ordinary business affairs of the cooperative:

193.305(3)(a) (a) Binds the cooperative.

193.305(3)(b) (b) May not be the basis for the imposition of liability on any director, officer, employee, or agent of the cooperative on the ground that the action was not authorized cooperative action.

193.305(4) (4) An emergency exists for purposes of this section if a quorum of the directors cannot readily be obtained because of a catastrophic event.

193.305 History History: 2005 a. 441.

193.311 193.311 Agricultural product and commodity marketing contracts.

193.311(1) (1) Authority. A cooperative and its patron member or patron may enter into a marketing contract, requiring the patron member or patron to sell a specified portion of the patron member’s or patron’s agricultural product or specified commodity produced from a specified area exclusively to or through the cooperative or a facility established by the cooperative.

193.311(2) (2) Title to products. If an agricultural product or commodity is sold to a cooperative under a contract under sub. (1), the sale transfers title to the product or commodity absolutely, subject to any valid lien or security interest in the product or commodity, to the cooperative on delivery of the product or commodity or at another time specified in the contract. A contract under sub. (1) may allow a cooperative to sell agricultural products or commodities with or without taking title to the products or commodities, and pay the sales price to the applicable patron member or patron, after deducting amounts specified in the contract.

193.311(3) (3) Term of contract. The term of a contract under sub. (1) may not exceed 10 years, except that a contract may be renewed for periods not exceeding 5 years each, subject to the right of either party to immediately terminate the contract by giving written notice of the termination to the other party.

193.311(4) (4) Liquidated damages for breach of contract. A contract under sub. (1) may require the patron member or patron to pay an amount to the cooperative as liquidated damages for the patron member’s or patron’s breach of any provision of the contract regarding the sale, delivery, or withholding of a product or commodity. The amount of liquidated damages shall be specified by including the specified amount in the contract.

193.311(5) (5) Injunction against breach of contract. If a patron member or patron breaches or threatens to breach a contract under sub. (1), the cooperative may commence an action for specific performance and injunctive relief under ch. 813.

193.311(6) (6) Criminal penalty for contract interference and false reports.

193.311(6)(a) (a) No person may knowingly induce or attempt to induce a patron member or patron of a cooperative to breach a contract under sub. (1).

193.311(6)(b) (b) No person may maliciously and knowingly publish false reports about the finances or management of a cooperative.

193.311(6)(c) (c) Any person who violates par. (a) or (b) may be fined not more than $1,000 or imprisoned for not more than 6 months, or both.

193.311(7) (7) Civil liability for contract interference and false reports. In addition to the penalty provided in sub. (6) (c), any person who violates sub. (6) (a) or (b) may be liable to the cooperative for damages caused by the violation.

193.311 History History: 2005 a. 441.

193.315 193.315 Indemnification and insurance against securities law claims. Section 185.042 applies to a cooperative to the same extent as if the cooperative was organized under ch. 185.

193.315 History History: 2005 a. 441.

subch. IV of ch. 193 SUBCHAPTER IV

DIRECTORS AND OFFICERS

193.401 193.401 Board governs cooperative. A cooperative shall be governed by its board which shall take all action for and on behalf of the cooperative except those actions reserved or granted to members. No director or group of directors may act for or on behalf of the cooperative unless authorized by the board or this chapter. A director may advocate interests of members or member groups to the board, but the fiduciary duty of each director is to represent the best interests of the cooperative and all members collectively.

193.401 History History: 2005 a. 441.

193.405 193.405 Number of directors. The board shall have at least 5 directors, except that the board of a cooperative with 50 or fewer members may have as few as 3 directors.

193.405 History History: 2005 a. 441.

193.411 193.411 Election of directors.

193.411(1) (1) Initial board. The initial board shall be established as provided under s. 193.205 (2) and, except as provided in s. 193.205 (2), shall serve until directors are elected by members. The initial board shall appoint directors to fill any vacancies on the initial board, until the directors are elected by the members.

193.411(2) (2) Generally.

193.411(2)(a) (a) Directors shall be elected or appointed for the term, at the time, and in the manner provided in this section and the articles and bylaws.

193.411(2)(b) (b) If nonpatron members or nonpatron membership interest are granted voting rights, a majority of the directors shall be members and a majority of the directors shall be elected exclusively by patron members, unless otherwise provided in the articles or bylaws. The patron members may also elect an outside director who is an expert in financial matters but who has no financial interest in the cooperative. Unless the articles or bylaws provide otherwise, the outside director may not vote.

193.411(2)(d) (d) A director holds office for the term for which the director was elected and until a successor is elected and has qualified, unless the director is removed or a vacancy in the office of the director occurs.

193.411(2)(g) (g) Directors may be divided into, designated, and elected by class or other distinction as provided in the articles or bylaws.

193.411(3) (3) Election at regular meeting. Except as provided under sub. (1) or (4) or s. 193.415 (4) or 193.421, all directors shall be elected at the regular members’ meeting.

193.411(4) (4) District or local unit election of directors. For a cooperative with districts or other units, directors may be elected by members on a district or unit basis if the articles or bylaws so provide. Directors elected on a district or unit basis may be nominated or elected at district member meetings if the articles or bylaws so provide. Directors who are nominated at district meetings shall be elected at the regular members’ meeting by vote of the entire membership, unless the articles or bylaws provide that such directors are to be elected at a district member meeting or the regular members’ meeting by vote of the members of the district.

193.411(4m) (4m) Cumulative voting. Unless the articles or bylaws so provide, directors may not be elected through the use of any system of voting that permits a voter to allocate multiple votes among eligible candidates.

193.411(5) (5) Ballots. All of the following apply to voting under this section:

193.411(5)(a) (a) A member may vote only by casting a ballot as provided under s. 193.545 (3).

193.411(5)(b) (b) The ballot shall be in a form prescribed by the board.

193.411(5)(c) (c) To cast a ballot by mail, a member shall mark the ballot for the candidate chosen, seal the ballot in a plain envelope bearing the member’s name and the words “BALLOT ENCLOSED,” or similar words, and enclose that envelope in another envelope addressed to the cooperative. To cast an alternative ballot, a member shall follow the procedure prescribed by the board.

193.411(5)(d) (d) If the ballot of the member is received by the cooperative on or before the date of the election, or as otherwise prescribed for alternative ballots, and if all other applicable requirements are satisfied the cooperative shall accept and count the ballot as the vote of the absent member.

193.411(6) (6) Business entity members may nominate persons for director. Any member that is not an individual may nominate one or more individuals as candidates for election as a director of the cooperative, unless the cooperative’s articles or bylaws provide otherwise.

193.411(9) (9) Compensation. Subject to any limitation in the articles or bylaws, the board may fix the compensation of the directors, except that any outside director elected under sub. (2) (b) may not receive any compensation other than authorized per diem reimbursements.

193.411 History History: 2005 a. 441.

193.415 193.415 Removal of directors. All of the following apply, unless the articles or bylaws provide otherwise: