House Journal: Page 865: Tuesday, March 19, 2002
24 by striking the section and inserting in lieu thereof
25 the following:
26 490.832 DIRECTOR CONFLICT OF INTEREST.
27 1. A conflict of interest transaction is a
28 transaction with the corporation in which a director
29 of the corporation has a direct or indirect interest.
30 A conflict of interest transaction is not voidable by
31 the corporation solely because of the director's
32 interest in the transaction if any one of the
33 following is true:
34 a. The material facts of the transaction and the
35 director's interest were disclosed or known to the
36 board of directors or a committee of the board of
37 directors and the board of directors or committee
38 authorized, approved, or ratified the transaction.
39 b. The material facts of the transaction and the
40 director's interest were disclosed or known to the
41 shareholders entitled to vote and the shareholders
42 authorized, approved, or ratified the transaction.
43 c. The transaction was fair to the corporation.
44 2. For purposes of this section, a director of the
45 corporation has an indirect interest in a transaction
46 if either of the following is true:
47 a. Another entity in which the director has a
48 material financial interest or in which the director
49 is a general partner is a party to the transaction.
50 b. Another entity of which the director is a
Page 2
1 director, officer, or trustee is a party to the
2 transaction and the transaction is or should be
3 considered by the board of directors of the
4 corporation.
5 3. For purposes of subsection 1, paragraph "a", a
6 conflict of interest transaction is authorized,
7 approved, or ratified if it receives the affirmative
8 vote of a majority of the directors on the board of
9 directors or on the committee, who have no direct or
10 indirect interest in the transaction, but a
11 transaction may not be authorized, approved, or
12 ratified under this section by a single director. If
13 a majority of the directors who have no direct or
14 indirect interest in the transaction vote to
15 authorize, approve, or ratify the transaction, a
16 quorum is present for the purpose of taking action
17 under this section. The presence of, or a vote cast
18 by, a director with a direct or indirect interest in
19 the transaction does not affect the validity of any
20 action taken under subsection 1, paragraph "a", if the
21 transaction is otherwise authorized, approved, or
22 ratified as provided in that subsection.
© 2002 Cornell College and
League of Women Voters of Iowa
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