221.0627 Mandatory indemnification.

(1) When successful in defense of a proceeding. A bank 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.

(2) When unsuccessful in defense of a proceeding.

(a) In cases not included under sub. (1), a bank 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, unless liability was incurred because the director or officer breached or failed to perform a duty that he or she owes to the bank and the breach or failure to perform constitutes any of the following:

1. A willful failure to deal fairly with the bank or its shareholders in connection with a matter in which the director or officer has a material conflict of interest.

2. A violation of a criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that his or her conduct was unlawful.

3. A transaction from which the director or officer derived an improper personal profit.

4. Willful misconduct.

(b) Determination of whether indemnification is required under this subsection shall be made under s. 221.0631.

(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.

(3) How indemnification may be sought. A director or officer who seeks indemnification under this section shall make a written request to the bank.

(4) Limits on mandatory indemnification.

(a) Indemnification under this section is not required to the extent limited by the articles of incorporation under s. 221.0628.

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

(c) Indemnification under this section is not required to the extent expressly prohibited by other provisions of this chapter, ch. 220 or applicable federal law or in connection with an administrative proceeding or action instituted under ch. 220 which results in a final order against the officer or director under s. 220.04 (4), (9) or (10).

History: 1995 a. 336.