193.471 Indemnification.

829 words·~4 min read·/wi/chapter-193/193-471-3

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)Definitions. In this section:

(a)“Official capacity” means any of the following:

1. A person’s capacity as an officer, employee, or agent of a cooperative or predecessor cooperative.

2. A person’s capacity as a member of a committee of a cooperative under s. 193.445 or 193.451

(1)or of a committee of a predecessor cooperative.

3. With respect to a director, chief executive officer, member, or employee of a cooperative who, at the request of the cooperative, serves as a governor, director, manager, officer, member, partner, trustee, employee, or agent of another organization or employee benefit plan, that person’s capacity as a governor, director, manager, officer, member, partner, trustee, employee, or agent, as applicable, of the other organization or employee benefit plan.

4. With respect to a person who was a director, chief executive officer, member, or employee of a predecessor cooperative and who, at the request of the predecessor cooperative, served as a governor, director, manager, officer, member, partner, trustee, employee, or agent of another organization or employee benefit plan, that person’s capacity as a governor, director, manager, officer, member, partner, trustee, employee, or agent, as applicable, of the other organization or employee benefit plan.

(b)“Potential litigant” means a person made or threatened to be made a party to a proceeding by reason of the person’s former or present official capacity.

(c)“Predecessor cooperative” means a domestic or foreign cooperative that was the predecessor of a cooperative in a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction.

(d)“Proceeding” means a threatened, pending, or completed civil, criminal, administrative, arbitration, or investigative proceeding, including a proceeding by or in the right of the cooperative.

(e)“Special legal counsel” means counsel who has not represented any of the following:

1. The cooperative or an affiliate.

2. The director, manager, member of a committee under s. 193.445 or 193.451

(1), or employee whose indemnification is in issue.

(2)Indemnification.

(a)Subject to sub.

(4), a cooperative shall indemnify a potential litigant against judgments, penalties, and fines applicable to a proceeding, against excise taxes assessed against the person with respect to an employee benefit plan, and against settlements and reasonable expenses, including attorney fees and disbursements, incurred by the potential litigant in connection with the proceeding, if, with respect to the acts or omissions of the potential litigant complained of in the proceeding, all of the following apply:

1. The potential litigant has not been indemnified against the same amounts by another person.

2. The potential litigant acted in good faith.

3. The potential litigant did not receive an improper personal benefit or commit an act for which liability cannot be eliminated or limited under s. 193.465

(2).

4. In the case of a criminal proceeding, the potential litigant had no reasonable cause to believe the acts or omissions were unlawful.

5. In the case of acts or omissions committed in an official capacity, as defined in sub.

(a)1. or 2. , the potential litigant reasonably believed that the acts or omissions were in the best interests of the cooperative or predecessor cooperative, as applicable, and, in the case of acts or omissions committed in an official capacity, as defined in sub.

(a)3. or 4. , the potential litigant reasonably believed that the conduct was not opposed to the best interests of the cooperative or predecessor cooperative, as applicable. If the acts or omissions relate to conduct as a director, officer, trustee, employee, or agent of an employee benefit plan, the conduct is not considered to be opposed to the best interests of the cooperative or predecessor cooperative if the potential litigant reasonably believed that the conduct was in the best interests of the participants or beneficiaries of the employee benefit plan.

(b)The termination of a proceeding by judgment, order, settlement, or conviction or upon a plea of no contest or its equivalent does not, of itself, establish that the potential litigant did not meet the applicable criteria under par.

(a).

(3)Advances. Subject to sub.

(4), a potential litigant is entitled, upon written request to the cooperative, to payment or reimbursement by the cooperative of reasonable expenses, including attorney fees and disbursements, incurred by the potential litigant in advance of the final disposition of the proceeding if the potential litigant delivers to the cooperative a written statement that the potential litigant believes in good faith that the applicable criteria for indemnification under sub.

(a)have been satisfied and a written undertaking by the potential litigant to repay all amounts so paid or reimbursed by the cooperative if a court determines under sub.

(c)that the potential litigant is ineligible for indemnification. The written undertaking is an unlimited general obligation of the potential litigant but need not be secured, and the cooperative shall accept the written undertaking without reference to the potential litigant’s financial ability to make the repayment.