S.F. _____ 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 , and 490.806B shall be increased or decreased 8 only by the affirmative vote of a majority of its board of 9 directors. 10 (2) This paragraph “b” is repealed on January 1, 2022. 11 3.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” , a director’s term 16 shall be staggered as provided in section 490.806A or may be 17 staggered as provided in section 490.806B as enacted in this 18 Act. 19 (2) This subparagraph is repealed on January 1, 2022. 20 Sec. 2. Section 490.805, subsections 2 and 4, Code 2018, are 21 amended to read as follows: 22 2. a. The terms of all other directors expire at the next 23 annual shareholders’ meeting following their election unless 24 their terms are staggered under section 490.806 or 490.806A . 25 b. (1) Notwithstanding paragraph “a” , the terms of 26 directors shall be staggered as provided in sections 490.806 27 or may be staggered as provided in section 490.806B as enacted 28 in this Act. 29 (2) This paragraph “b” is repealed on January 1, 2022. 30 4. a. The term of a director elected to fill a vacancy 31 expires at the next shareholders’ meeting at which directors 32 are elected , except as provided in section 490.806A . 33 b. (1) Notwithstanding paragraph “a” , the term of a 34 director elected to fill a vacancy expires as provided in 35 -1- LSB 6163SC (3) 87 da/rn 1/ 5

S.F. _____ section 490.806A and section 490.806B as enacted in this Act. 1 (2) This paragraph “b” is repealed on January 1, 2022. 2 Sec. 3. Section 490.806, Code 2018, is amended to read as 3 follows: 4 490.806 Staggered terms for directors. 5 1. Except as otherwise provided in section 490.806A , a 6 corporation’s The articles of incorporation may provide for 7 staggering the terms of its directors by dividing the total 8 number of directors into two or three groups, with each group 9 containing one-half or one-third of the total, as near as may 10 be. In that event, the terms of directors in the first group 11 expire at the first annual shareholders’ meeting after their 12 election, the terms of the second group expire at the second 13 annual shareholders’ meeting after their election, and the 14 terms of the third group, if any, expire at the third annual 15 shareholders’ meeting after their election. At each annual 16 shareholders’ meeting held thereafter, directors shall be 17 chosen for a term of two years or three years, as the case may 18 be, to succeed those whose terms expire. 19 2. a. Subsection 1 does not apply to a public corporation 20 that is subject to section 490.806A but may apply to a public 21 corporation that is subject to section 490.806B as enacted in 22 this Act. 23 b. This subsection is repealed on January 1, 2022. 24 Sec. 4. Section 490.806A, Code 2018, is amended by adding 25 the following new subsection: 26 NEW SUBSECTION . 3. This section is repealed on January 1, 27 2022. 28 Sec. 5. NEW SECTION . 490.806B Public corporations —— 29 nonstaggered terms. 30 1. Notwithstanding section 490.806A, the board of directors 31 of any public corporation which, as of January 1, 2019, is 32 subject to section 490.806A, subsection 1, shall adopt an 33 amendment to its articles of incorporation that includes all 34 of the following: 35 -2- LSB 6163SC (3) 87 da/rn 2/ 5

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

S.F. _____ incorporation of a public corporation adopted in compliance 1 with sections 490.806A and 490.806B and in effect immediately 2 prior to January 1, 2022, shall remain in effect until amended 3 or repealed as provided in the relevant sections of chapter 490 4 as those sections exist on or after January 1, 2022. 5 Sec. 9. EFFECTIVE DATE. The following takes effect January 6 1, 2019: 7 The section of this Act enacting section 490.806B. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 GENERAL. This bill amends provisions in Code chapter 490 12 (“Iowa Business Corporation Act”), that became effective on 13 March 23, 2011, and created a special requirement governing the 14 terms of office for a public corporation’s board of directors 15 (board) elected by its holders of common shares, unless the 16 board elected to opt out of the requirement by a date certain. 17 See 2011 Iowa Acts, chapter 2, and Code section 490.806A, which 18 in part superseded Code sections 490.805 and 490.806. 19 STAGGERED TERMS FOR DIRECTORS. The 2011 Act required the 20 public corporation to divide its directors into three equal 21 groups (referred to as “classes”). The directors are then 22 required to serve staggered three-year terms as designated by 23 the board with no other corporate action required except that 24 the board was required to amend its articles of incorporation 25 (articles) in order to comply with the special requirement. 26 The bill provides that beginning January 1, 2019, a director 27 that was subject to the special requirement due to the 2011 28 Act and whose three-year term is to expire at the next annual 29 shareholder meeting is to be elected in the same manner as 30 the director of any other corporation. This means that the 31 shareholders of the public corporation will elect all directors 32 whose terms are expiring for one-year terms, unless the 33 corporation has adopted the ordinary staggered term method 34 under Code section 490.806. 35 -4- LSB 6163SC (3) 87 da/rn 4/ 5

S.F. _____ REPEAL. On January 1, 2022, the bill eliminates a majority 1 of the provisions that allowed for the special requirement and 2 effectively restores the provisions in Code chapter 490 as they 3 existed prior to the 2011 Act. The one provision that will 4 survive defines a public corporation. The provision prior to 5 the 2011 Act referenced the national association of securities 6 dealers (NASD) which is no longer in existence. The bill 7 provides that the articles of incorporation survive the repeals 8 of the relevant Code sections. 9 -5- LSB 6163SC (3) 87 da/rn 5/ 5