H.F. 2461 Section 1. Section 490.803, subsections 2 and 3, Code 2018, 1 are amended to read as follows: 2 2. a. The number of directors may be increased or decreased 3 from time to time by amendment to, or in the manner provided 4 in, the articles of incorporation or the bylaws. 5 b. (1) Notwithstanding paragraph “a” , the number of 6 directors of a public corporation subject to section 490.806A, 7 subsection 1 , or section 490.806B, shall be increased or 8 decreased only by the affirmative vote of a majority of its 9 board of directors. 10 (2) This paragraph “b” is repealed on January 1, 2022. 11 3. a. Directors are elected at the first annual 12 shareholders’ meeting and at each annual meeting thereafter 13 unless their terms are staggered under section 490.806 or 14 490.806A . 15 b. (1) Notwithstanding paragraph “a” , for a public 16 corporation subject to section 490.806A, subsection 1, or 17 section 490.806B, a director’s term shall be staggered as 18 provided in section 490.806A, subsection 1, or may be staggered 19 as provided in section 490.806B. 20 (2) This subparagraph is repealed on January 1, 2022. 21 Sec. 2. Section 490.805, subsections 2 and 4, Code 2018, are 22 amended to read as follows: 23 2. a. The terms of all other directors expire at the next 24 annual shareholders’ meeting following their election unless 25 their terms are staggered under section 490.806 or 490.806A . 26 b. (1) Notwithstanding paragraph “a” , for a public 27 corporation subject to section 490.806A, subsection 1, or 28 section 490.806B, the terms of directors shall be staggered as 29 provided in section 490.806A, subsection 1, or may be staggered 30 as provided in section 490.806B. 31 (2) This paragraph “b” is repealed on January 1, 2022. 32 4. a. The term of a director elected to fill a vacancy 33 expires at the next shareholders’ meeting at which directors 34 are elected , except as provided in section 490.806A . 35 -1- LSB 6163HV (3) 87 da/rn 1/ 5

H.F. 2461 b. (1) Notwithstanding paragraph “a” , for a public 1 corporation subject to section 490.806A, subsection 1, or 2 section 490.806B, the term of a director elected to fill a 3 vacancy expires as provided in section 490.806A, subsection 1, 4 or section 490.806B. 5 (2) This paragraph “b” is repealed on January 1, 2022. 6 Sec. 3. Section 490.806, Code 2018, is amended to read as 7 follows: 8 490.806 Staggered terms for directors. 9 1. Except as otherwise provided in section 490.806A , a 10 corporation’s The articles of incorporation may provide for 11 staggering the terms of its directors by dividing the total 12 number of directors into two or three groups, with each group 13 containing one-half or one-third of the total, as near as may 14 be. In that event, the terms of directors in the first group 15 expire at the first annual shareholders’ meeting after their 16 election, the terms of the second group expire at the second 17 annual shareholders’ meeting after their election, and the 18 terms of the third group, if any, expire at the third annual 19 shareholders’ meeting after their election. At each annual 20 shareholders’ meeting held thereafter, directors shall be 21 chosen for a term of two years or three years, as the case may 22 be, to succeed those whose terms expire. 23 2. a. Subsection 1 does not apply to a public corporation 24 that is subject to section 490.806A, subsection 1, but may 25 apply to a public corporation that is subject to section 26 490.806B. 27 b. This subsection is repealed on January 1, 2022. 28 Sec. 4. Section 490.806A, Code 2018, is amended by adding 29 the following new subsection: 30 NEW SUBSECTION . 3. This section is repealed on January 1, 31 2022. 32 Sec. 5. NEW SECTION . 490.806B Public corporations —— 33 nonstaggered terms. 34 1. Notwithstanding section 490.806A, the board of directors 35 -2- LSB 6163HV (3) 87 da/rn 2/ 5

H.F. 2461 of any public corporation which, as of January 1, 2019, is 1 subject to section 490.806A, subsection 1, shall adopt an 2 amendment to its articles of incorporation that includes all 3 of the following: 4 a. The staggered terms of the class I directors, class II 5 directors, and class III directors elected or appointed prior 6 to January 1, 2019, shall cease at the expiration of their then 7 current terms as provided in section 490.806A, subsection 1. 8 b. The terms of directors elected or appointed on or after 9 January 1, 2019, shall expire at the next annual shareholders’ 10 meeting following their election or appointment. 11 c. Any other changes that the directors determine are 12 necessary to implement the provisions of this subsection. 13 2. Any amendment to the articles of incorporation as 14 provided in subsection 1 shall be made without shareholder 15 approval. 16 3. Notwithstanding subsection 1, the public corporation’s 17 articles of incorporation may provide for staggering the terms 18 of its directors as provided in section 490.806. 19 4. Section 490.803, subsection 2, paragraph “b” , and section 20 490.810, subsection 1A, shall continue to apply to a public 21 corporation subject to subsection 1 of this section. 22 5. This section is repealed on January 1, 2022. 23 Sec. 6. Section 490.810, subsection 1A, Code 2018, is 24 amended to read as follows: 25 1A. a. For a public corporation subject to section 26 490.806A, subsection 1 , or section 490.806B, a vacancy on the 27 board of directors, including but not limited to a vacancy 28 resulting from an increase in the number of directors, shall 29 be filled solely by the affirmative vote of a majority of the 30 remaining directors, even though less than a quorum of the 31 board. 32 b. This subsection is repealed on January 1, 2022. 33 Sec. 7. Section 490.1005A, Code 2018, is amended by adding 34 the following new subsection: 35 -3- LSB 6163HV (3) 87 da/rn 3/ 5

H.F. 2461 NEW SUBSECTION . 3. This section is repealed on January 1, 1 2022. 2 Sec. 8. CONTINUATION OF THE ARTICLES OF INCORPORATION. 3 Notwithstanding the repeals of section 490.806A, as amended 4 by this Act and section 490.806B as enacted by this Act, 5 any amendment to the articles of incorporation of a public 6 corporation adopted in compliance with section 490.806A or 7 section 490.806B as described in this section and in effect 8 immediately prior to January 1, 2022, shall remain in effect 9 until amended or repealed as provided in the relevant sections 10 of chapter 490 as those sections exist on or after January 1, 11 2022. 12 Sec. 9. EFFECTIVE DATE. The following takes effect January 13 1, 2019: 14 The section of this Act enacting section 490.806B. 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanation’s substance by the members of the general assembly. 18 GENERAL. This bill amends provisions in Code chapter 490 19 (“Iowa Business Corporation Act”), that became effective on 20 March 23, 2011, and created a special requirement governing the 21 terms of office for a public corporation’s board of directors 22 (board), unless the board elected to opt out of the requirement 23 by a date certain. See 2011 Iowa Acts, chapter 2, and Code 24 section 490.806A, which in part superseded Code sections 25 490.805 and 490.806. 26 STAGGERED TERMS FOR DIRECTORS. The 2011 Act required the 27 public corporation to divide its directors into three equal 28 groups (referred to as “classes”). The directors are then 29 required to serve staggered three-year terms. The board was 30 required to amend its articles of incorporation (articles) 31 in order to comply with the special requirement. The bill 32 provides that beginning January 1, 2019, the shareholders 33 of the public corporation will elect all directors whose 34 three-year terms are expiring for one-year terms, unless the 35 -4- LSB 6163HV (3) 87 da/rn 4/ 5

H.F. 2461 corporation has adopted the ordinary staggered term method 1 under Code section 490.806. 2 REPEAL. On January 1, 2022, the bill eliminates a majority 3 of the provisions that allowed for the special requirement and 4 effectively restores the provisions in Code chapter 490 as 5 they existed prior to the 2011 Act. The one provision that 6 will survive defines a public corporation. The provision 7 prior to the 2011 Act referenced the national association of 8 securities dealers (NASD) which is no longer in existence. The 9 bill provides that the articles of incorporation survives the 10 repeals of the relevant Code sections. 11 EFFECTIVE DATE. The provisions of the bill take effect July 12 1, 2018, except for the provision allowing directors to serve 13 one-year terms, which takes effect January 1, 2019. 14 -5- LSB 6163HV (3) 87 da/rn 5/ 5