Iowa Legislature: HF2537

Affected Code

Sec. 1 - Strike and Replace 490.101 (2020)
Sec. 2 - Strike and Replace 490.120 (2020)
Sec. 3 - Strike and Replace 490.121 (2020)
Sec. 4 - Strike and Replace 490.122 (2020)
Sec. 5 - Strike and Replace 490.123 (2020)
Sec. 6 - Strike and Replace 490.124 (2020)
Sec. 7 - Strike and Replace 490.125 (2020)
Sec. 8 - Strike and Replace 490.126 (2020)
Sec. 9 - Strike and Replace 490.127 (2020)
Sec. 10 - Strike and Replace 490.128 (2020)
Sec. 11 - Strike and Replace 490.129 (2020)
Sec. 12 - Strike and Replace 490.135 (2020)
Sec. 13 - Strike and Replace 490.140 (2020)
Sec. 14 - Strike and Replace 490.141 (2020)
Sec. 15 - Strike and Replace 490.142 (2020)
Sec. 16 - Strike and Replace 490.143 (2020)
Sec. 17 - Strike and Replace 490.144 (2020)
Sec. 18 - New 490.145 (2020)
Sec. 19 - New 490.146 (2020)
Sec. 20 - New 490.147 (2020)
Sec. 21 - New 490.148 (2020)
Sec. 22 - New 490.149 (2020)
Sec. 23 - New 490.150 (2020)
Sec. 24 - New 490.151 (2020)
Sec. 25 - New 490.152 (2020)
Sec. 26 - Strike and Replace 490.201 (2020)
Sec. 27 - Strike and Replace 490.202 (2020)
Sec. 28 - Strike and Replace 490.203 (2020)
Sec. 29 - Strike and Replace 490.205 (2020)
Sec. 30 - Strike and Replace 490.206 (2020)
Sec. 31 - Strike and Replace 490.207 (2020)
Sec. 32 - New 490.208 (2020)
Sec. 33 - Strike and Replace 490.302 (2020)
Sec. 34 - Strike and Replace 490.303 (2020)
Sec. 35 - Strike and Replace 490.401 (2020)
Sec. 36 - Strike and Replace 490.402 (2020)
Sec. 37 - Strike and Replace 490.403 (2020)
Sec. 38 - Strike and Replace 490.501 (2020)
Sec. 39 - Strike and Replace 490.502 (2020)
Sec. 40 - Strike and Replace 490.503 (2020)
Sec. 41 - Strike and Replace 490.504 (2020)
Sec. 42 - Strike and Replace 490.601 (2020)
Sec. 43 - Strike and Replace 490.602 (2020)
Sec. 44 - Strike and Replace 490.603 (2020)
Sec. 45 - Strike and Replace 490.604 (2020)
Sec. 46 - Strike and Replace 490.620 (2020)
Sec. 47 - Strike and Replace 490.621 (2020)
Sec. 48 - Strike and Replace 490.622 (2020)
Sec. 49 - Strike and Replace 490.623 (2020)
Sec. 50 - Strike and Replace 490.624 (2020)
Sec. 51 - Strike and Replace 490.625 (2020)
Sec. 52 - Strike and Replace 490.626 (2020)
Sec. 53 - Strike and Replace 490.627 (2020)
Sec. 54 - Strike and Replace 490.630 (2020)
Sec. 55 - Strike and Replace 490.640 (2020)
Sec. 56 - Strike and Replace 490.701 (2020)
Sec. 57 - Strike and Replace 490.702 (2020)
Sec. 58 - Strike and Replace 490.703 (2020)
Sec. 59 - Strike and Replace 490.704 (2020)
Sec. 60 - Strike and Replace 490.705 (2020)
Sec. 61 - Strike and Replace 490.706 (2020)
Sec. 62 - Strike and Replace 490.707 (2020)
Sec. 63 - Strike and Replace 490.708 (2020)
Sec. 64 - Strike and Replace 490.709 (2020)
Sec. 65 - Strike and Replace 490.720 (2020)
Sec. 66 - Strike and Replace 490.721 (2020)
Sec. 67 - Strike and Replace 490.722 (2020)
Sec. 68 - Strike and Replace 490.723 (2020)
Sec. 69 - Strike and Replace 490.724 (2020)
Sec. 70 - Strike and Replace 490.725 (2020)
Sec. 71 - Strike and Replace 490.726 (2020)
Sec. 72 - Strike and Replace 490.727 (2020)
Sec. 73 - Strike and Replace 490.728 (2020)
Sec. 74 - Strike and Replace 490.729 (2020)
Sec. 75 - Strike and Replace 490.730 (2020)
Sec. 76 - Strike and Replace 490.731 (2020)
Sec. 77 - Strike and Replace 490.732 (2020)
Sec. 78 - Strike and Replace 490.740 (2020)
Sec. 79 - Strike and Replace 490.743 (2020)
Sec. 80 - Strike and Replace 490.744 (2020)
Sec. 81 - Strike and Replace 490.745 (2020)
Sec. 82 - Strike and Replace 490.746 (2020)
Sec. 83 - Strike and Replace 490.748 (2020)
Sec. 84 - New 490.749 (2020)
Sec. 85 - Strike and Replace 490.801 (2020)
Sec. 86 - Strike and Replace 490.802 (2020)
Sec. 87 - Strike and Replace 490.803 (2020)
Sec. 88 - Strike and Replace 490.804 (2020)
Sec. 89 - Strike and Replace 490.805 (2020)
Sec. 90 - Strike and Replace 490.806 (2020)
Sec. 91 - Strike and Replace 490.807 (2020)
Sec. 92 - Strike and Replace 490.808 (2020)
Sec. 93 - Strike and Replace 490.809 (2020)
Sec. 94 - Strike and Replace 490.810 (2020)
Sec. 95 - Strike and Replace 490.820 (2020)
Sec. 96 - Strike and Replace 490.821 (2020)
Sec. 97 - Strike and Replace 490.822 (2020)
Sec. 98 - Strike and Replace 490.823 (2020)
Sec. 99 - Strike and Replace 490.824 (2020)
Sec. 100 - Strike and Replace 490.825 (2020)
Sec. 101 - Strike and Replace 490.830 (2020)
Sec. 102 - Strike and Replace 490.831 (2020)
Sec. 103 - Strike and Replace 490.833 (2020)
Sec. 104 - Strike and Replace 490.840 (2020)
Sec. 105 - Strike and Replace 490.842 (2020)
Sec. 106 - Strike and Replace 490.843 (2020)
Sec. 107 - Strike and Replace 490.844 (2020)
Sec. 108 - Strike and Replace 490.850 (2020)
Sec. 109 - Strike and Replace 490.851 (2020)
Sec. 110 - Strike and Replace 490.852 (2020)
Sec. 111 - Strike and Replace 490.853 (2020)
Sec. 112 - Strike and Replace 490.854 (2020)
Sec. 113 - Strike and Replace 490.855 (2020)
Sec. 114 - Strike and Replace 490.856 (2020)
Sec. 115 - Strike and Replace 490.857 (2020)
Sec. 116 - Strike and Replace 490.858 (2020)
Sec. 117 - Strike and Replace 490.860 (2020)
Sec. 118 - Strike and Replace 490.861 (2020)
Sec. 119 - Strike and Replace 490.862 (2020)
Sec. 120 - Strike and Replace 490.863 (2020)
Sec. 121 - Strike and Replace 490.870 (2020)
Sec. 122 - Strike and Replace 490.901 (2020)
Sec. 123 - Strike and Replace 490.902 (2020)
Sec. 124 - New 490.903 (2020)
Sec. 125 - New 490.904 (2020)
Sec. 126 - New 490.920 (2020)
Sec. 127 - New 490.921 (2020)
Sec. 128 - New 490.922 (2020)
Sec. 129 - New 490.923 (2020)
Sec. 130 - New 490.924 (2020)
Sec. 131 - New 490.930 (2020)
Sec. 132 - New 490.931 (2020)
Sec. 133 - New 490.932 (2020)
Sec. 134 - New 490.933 (2020)
Sec. 135 - New 490.934 (2020)
Sec. 136 - New 490.935 (2020)
Sec. 137 - Strike and Replace 490.1003 (2020)
Sec. 138 - Strike and Replace 490.1004 (2020)
Sec. 139 - Strike and Replace 490.1006 (2020)
Sec. 140 - Strike and Replace 490.1007 (2020)
Sec. 141 - Strike and Replace 490.1009 (2020)
Sec. 142 - Strike and Replace 490.1020 (2020)
Sec. 143 - Strike and Replace 490.1021 (2020)
Sec. 144 - New 490.1022 (2020)
Sec. 145 - Strike and Replace 490.1101 (2020)
Sec. 146 - Strike and Replace 490.1102 (2020)
Sec. 147 - Strike and Replace 490.1103 (2020)
Sec. 148 - Strike and Replace 490.1104 (2020)
Sec. 149 - Strike and Replace 490.1105 (2020)
Sec. 150 - Strike and Replace 490.1106 (2020)
Sec. 151 - Strike and Replace 490.1107 (2020)
Sec. 152 - Strike and Replace 490.1108 (2020)
Sec. 153 - Strike and Replace 490.1201 (2020)
Sec. 154 - Strike and Replace 490.1202 (2020)
Sec. 155 - Strike and Replace 490.1301 (2020)
Sec. 156 - Strike and Replace 490.1302 (2020)
Sec. 157 - Strike and Replace 490.1303 (2020)
Sec. 158 - Strike and Replace 490.1320 (2020)
Sec. 159 - Strike and Replace 490.1321 (2020)
Sec. 160 - Strike and Replace 490.1322 (2020)
Sec. 161 - Strike and Replace 490.1323 (2020)
Sec. 162 - Strike and Replace 490.1324 (2020)
Sec. 163 - Strike and Replace 490.1325 (2020)
Sec. 164 - Strike and Replace 490.1326 (2020)
Sec. 165 - Strike and Replace 490.1330 (2020)
Sec. 166 - Strike and Replace 490.1331 (2020)
Sec. 167 - Strike and Replace 490.1340 (2020)
Sec. 168 - Strike and Replace 490.1402 (2020)
Sec. 169 - Strike and Replace 490.1403 (2020)
Sec. 170 - Strike and Replace 490.1404 (2020)
Sec. 171 - Strike and Replace 490.1405 (2020)
Sec. 172 - Strike and Replace 490.1406 (2020)
Sec. 173 - Strike and Replace 490.1407 (2020)
Sec. 174 - Strike and Replace 490.1409 (2020)
Sec. 175 - Strike and Replace 490.1420 (2020)
Sec. 176 - Strike and Replace 490.1421 (2020)
Sec. 177 - Strike and Replace 490.1422 (2020)
Sec. 178 - Strike and Replace 490.1423 (2020)
Sec. 179 - Strike and Replace 490.1430 (2020)
Sec. 180 - Strike and Replace 490.1431 (2020)
Sec. 181 - Strike and Replace 490.1432 (2020)
Sec. 182 - Strike and Replace 490.1434 (2020)
Sec. 183 - Strike and Replace 490.1440 (2020)
Sec. 184 - Strike and Replace 490.1501 (2020)
Sec. 185 - Strike and Replace 490.1502 (2020)
Sec. 186 - Strike and Replace 490.1503 (2020)
Sec. 187 - Strike and Replace 490.1504 (2020)
Sec. 188 - Strike and Replace 490.1505 (2020)
Sec. 189 - Strike and Replace 490.1506 (2020)
Sec. 190 - Strike and Replace 490.1507 (2020)
Sec. 191 - Strike and Replace 490.1508 (2020)
Sec. 192 - Strike and Replace 490.1509 (2020)
Sec. 193 - Strike and Replace 490.1510 (2020)
Sec. 194 - New 490.1511 (2020)
Sec. 195 - New 490.1512 (2020)
Sec. 196 - Strike and Replace 490.1601 (2020)
Sec. 197 - Strike and Replace 490.1602 (2020)
Sec. 198 - Strike and Replace 490.1603 (2020)
Sec. 199 - Strike and Replace 490.1604 (2020)
Sec. 200 - Strike and Replace 490.1605 (2020)
Sec. 201 - Strike and Replace 490.1620 (2020)
Sec. 202 - Strike and Replace 490.1622 (2020)
Sec. 203 - Strike and Replace 490.1701 (2020)
Sec. 204 - Strike and Replace 490.1702 (2020)
Sec. 205 - Strike and Replace 490.1703 (2020)
Sec. 206 - New 490.1704 (2020)
Sec. 207 - New 490.1705 (2020)
Sec. 208 - New 490.1706 (2020)
Sec. 209 - New 490.1801 (2020)
Sec. 210 - New 490.1802 (2020)
Sec. 211 - New 490.1803 (2020)
Sec. 212 - New 490.1804 (2020)
Sec. 215 - Session Law 490.130 (2020)
Sec. 215 - Session Law 490.832 (2020)
Sec. 215 - Session Law 490 (2020)
Sec. 215 - Session Law 1622 (2020)
Sec. 215 - Session Law 490.1621 (2020)
Sec. 216 - Repeal 490.624A (2020)
Sec. 216 - Repeal 490.628 (2020)
Sec. 216 - Repeal 490.806A (2020)
Sec. 216 - Repeal 490.806B (2020)
Sec. 216 - Repeal 490.1005A (2020)
Sec. 216 - Repeal 490.1111 (2020)
Sec. 216 - Repeal 490.1112 (2020)
Sec. 216 - Repeal 490.1113 (2020)
Sec. 216 - Repeal 490.1114 (2020)
Sec. 216 - Repeal 490.1520 (2020)
Sec. 216 - Repeal 490.1523 (2020)
Sec. 216 - Repeal 490.1530 (2020)
Sec. 216 - Repeal 490.1531 (2020)
Sec. 216 - Repeal 490.1532 (2020)
Sec. 216 - Repeal 490.1606 (2020)
Sec. 219 - Amend 249A.40 (2020)
Sec. 220 - Amend 455B.397 (2020)
Sec. 221 - Amend 455B.430.5 (2020)
Sec. 222 - Amend 491.16A (2020)
Sec. 223 - Amend 496C.14.5 (2020)
Sec. 224 - Amend 496C.19 (2020)
Sec. 225 - Amend 499.69A.2.b (2020)
Sec. 226 - Amend 499.69A.5 (2020)
Sec. 226 - Amend 499.69A.6 (2020)
Sec. 227 - Amend 508.12.1 (2020)
Sec. 228 - Amend 508B.2.2 (2020)
Sec. 229 - Amend 515.78.1 (2020)
Sec. 230 - Amend 515E.3A.1.a (2020)
Sec. 231 - Amend 515G.3.2 (2020)
Sec. 232 - Amend 556.5.4.b (2020)

House File 2537 - IntroducedA Bill ForAn Act 1providing for business corporations, providing for
2certain fees, and including effective date provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2GENERAL PROVISIONS
3   Section 1.  Section 490.101, Code 2020, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.101  Short title.
   7This chapter shall be known and may be cited as the “Iowa
8Business Corporation Act”.
9   Sec. 2.  Section 490.120, Code 2020, is amended by striking
10the section and inserting in lieu thereof the following:
   11490.120  Requirements for documents — extrinsic facts.
   121.  A document must satisfy the requirements of this
13section, and of any other section that adds to or varies these
14requirements, to be entitled to filing by the secretary of
15state.
   162.  This chapter must require or permit filing the document
17in the office of the secretary of state.
   183.  The document must contain the information required by
19this chapter and may contain other information.
   204.  The document must be typewritten or printed or, if
21electronically transmitted, it must be in a format that can be
22retrieved or reproduced in typewritten or printed form.
   235.  The document must be in the English language. A
24corporate name need not be in English if written in English
25letters or Arabic or Roman numerals, and the certificate of
26existence required of foreign corporations need not be in
27English if accompanied by a reasonably authenticated English
28translation.
   296.  Except as provided in section 490.1622, subsection 3, the
30document must be signed by any of the following:
   31a.  The chairperson of the board of directors of a domestic
32or foreign corporation, its president, or another of its
33officers.
   34b.  If directors have not been selected or the corporation
35has not been formed, by an incorporator.
-1-   1c.  If the corporation is in the hands of a receiver,
2trustee, or other court-appointed fiduciary, by that fiduciary.
   37.  a.  The person executing the document shall sign it
4and state beneath or opposite the person’s signature the
5person’s name and the capacity in which the document is signed.
6The document may but need not contain a corporate seal,
7attestation, acknowledgment, or verification.
   8b.  The secretary of state may accept for filing a document
9containing a copy of a signature, however made.
   108.  If the secretary of state has prescribed a mandatory
11form for the document under section 490.121, subsection 1, the
12document must be in or on the prescribed form.
   139.  The document must be delivered to the office of the
14secretary of state for filing. Delivery may be made by
15electronic transmission if and to the extent permitted by the
16secretary of state. If it is filed in typewritten or printed
17form and not transmitted electronically, the secretary of state
18may require one exact or conformed copy to be delivered with
19the document.
   2010.  When the document is delivered to the office of the
21secretary of state for filing, the correct filing fee, and any
22franchise tax, license fee, or penalty required by this chapter
23or other law to be paid at the time of delivery for filing must
24be paid or provision for payment made in a manner permitted by
25the secretary of state.
   2611.  Whenever a provision of this chapter permits any of the
27terms of a plan or a filed document to be dependent on facts
28objectively ascertainable outside the plan or filed document,
29all of the following provisions apply:
   30a.  The manner in which the facts will operate upon the terms
31of the plan or filed document must be set forth in the plan or
32filed document.
   33b.  The facts may include any of the following:
   34(1)  Any of the following that is available in a nationally
35recognized news or information medium either in print or
-2-1electronically: statistical or market indices, market prices
2of any security or group of securities, interest rates,
3currency exchange rates, or similar economic or financial data.
   4(2)  A determination or action by any person or body,
5including the corporation or any other party to a plan or filed
6document.
   7(3)  The terms of, or actions taken under, an agreement to
8which the corporation is a party, or any other agreement or
9document.
   10c.  As used in this subsection:
   11(1)  “Filed document” means a document filed with the
12secretary of state under any provision of this chapter except
13subchapter XV or section 490.1622.
   14(2)  “Plan” means a plan of domestication, conversion,
15merger, or share exchange.
   16d.  The following provisions of a plan or filed document
17shall not be made dependent on facts outside the plan or filed
18document:
   19(1)  The name and address of any person required in a filed
20document.
   21(2)  The registered office of any entity required in a filed
22document.
   23(3)  The registered agent of any entity required in a filed
24document.
   25(4)  The number of authorized shares and designation of each
26class or series of shares.
   27(5)  The effective date of a filed document.
   28(6)  Any required statement in a filed document of the date
29on which the underlying transaction was approved or the manner
30in which that approval was given.
   31e.  If a provision of a filed document is made dependent on a
32fact ascertainable outside of the filed document, and that fact
33is neither ascertainable by reference to a source described
34in paragraph “b”, subparagraph (1), nor a document that is a
35matter of public record, and the affected shareholders have
-3-1not received notice of the fact from the corporation, then the
2corporation shall file with the secretary of state articles of
3amendment to the filed document setting forth the fact promptly
4after the time when the fact referred to is first ascertainable
5or thereafter changes. Articles of amendment under this
6paragraph “e” are deemed to be authorized by the authorization
7of the original filed document to which they relate and may be
8filed by the corporation without further action by the board of
9directors or the shareholders.
10   Sec. 3.  Section 490.121, Code 2020, is amended by striking
11the section and inserting in lieu thereof the following:
   12490.121  Forms.
   131.  a.  The secretary of state may prescribe and furnish on
14request any of the following forms:
   15(1)  An application for a certificate of existence or
16certificate of registration.
   17(2)  A foreign corporation’s registration statement.
   18(3)  A foreign corporation’s statement of withdrawal.
   19(4)  A foreign corporation’s transfer of registration
20statement.
   21(5)  The biennial report required by section 490.1622.
   22b.  If the secretary of state so requires, use of the forms
23provided in paragraph “a” is mandatory.
   242.  The secretary of state may prescribe and furnish on
25request forms for other documents required or permitted to be
26filed by this chapter but their use is not mandatory.
27   Sec. 4.  Section 490.122, Code 2020, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.122  Filing, service, and copying fees.
   301.  The secretary of state shall collect the following fees
31when the documents described in this subsection are delivered
32to the secretary of state for filing:
33DOCUMENT FEE
34a. Articles of incorporation $ __
35b. Application for use of indistinguishable
-4-1 name $ __
2c. Application for reserved name $ __
3d. Notice of transfer of reserved name $ __
4e. Application for registered name $ __
5f. Application for renewal of registered
6 name $ __
7g. Corporation’s statement of change of
8 registered agent or registered office or both $ __
9h. Agent’s statement of change of registered
10 office for each affected corporation not to exceed
11a total of $ __
12i. Agent’s statement of resignation No fee
13j. Articles of domestication $ __
14k. Articles of conversion $ __
15l. Amendment of articles of
16 incorporation $ __
17m. Restatement of articles of incorporation
18 with amendment of articles $ __
19n. Restatement of articles of incorporation
20 without amendment of articles $ __
21o. Articles of merger or share exchange $ __
22p. Articles of dissolution $ __
23q. Articles of revocation of dissolution $ __
24r. Certificate of administrative
25 dissolution No fee
26s. Application for reinstatement following
27 administrative dissolution $ __
28t. Certificate of reinstatement No fee
29u. Certificate of judicial dissolution No fee
30v. Foreign registration statement $ __
31w. Amendment of foreign registration
32 statement $ __
33x. Statement of withdrawal $ __
34y. Transfer of foreign registration statement $ __
35z. Notice of termination of registration No fee
-5- 1aa. Biennial report $ __
2ab. Articles of correction $ __
3ac. Articles of validation $ __
4ad. Application for certificate of existence or
5 registration $ __
6ae. Any other document required or permitted
7 to be filed by this chapter $ __
   82.  The secretary of state shall collect a fee of $____ each
9time process is served on the secretary of state under this
10chapter. The party to a proceeding causing service of process
11is entitled to recover this fee as costs if such party prevails
12in the proceeding.
   133.  The secretary of state shall collect the following fees
14for copying and certifying the copy of any filed document
15relating to a domestic or foreign corporation:
   16a.  $____ a page for copying.
   17b.  $____ for the certificate.
18   Sec. 5.  Section 490.123, Code 2020, is amended by striking
19the section and inserting in lieu thereof the following:
   20490.123  Effective date of filed document.
   211.  Except to the extent otherwise provided in section
22490.124, subsection 3, and part E, a document accepted for
23filing is effective as follows:
   24a.  On the date and at the time of filing, as provided in
25section 490.125, subsection 2.
   26b.  On the date of filing and at the time specified in the
27document as its effective time, if later than the time under
28paragraph “a”.
   29c.  At a specified delayed effective date and time which
30shall not be more than ninety days after filing.
   31d.  If a delayed effective date is specified, but no time is
32specified, at 12:01 a.m.on the date specified, which shall not
33be more than ninety days after the date of filing.
   342.  If a filed document does not specify the time zone or
35place at which a date or time or both is to be determined, the
-6-1date or time or both at which it becomes effective shall be
2those prevailing at the place of filing in this state.
3   Sec. 6.  Section 490.124, Code 2020, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.124  Correcting filed document.
   61.  A document filed by the secretary of state pursuant to
7this chapter may be corrected if any of the following applies:
   8a.  The document contains an inaccuracy.
   9b.  The document was defectively signed, attested, sealed,
10verified, or acknowledged.
   11c.  The electronic transmission was defective.
   122.  A document is corrected by complying with all of the
13following:
   14a.  By preparing articles of correction that do all of the
15following:
   16(1)  Describe the document, including its filing date, or a
17copy of the document is attached to the articles of correction.
   18(2)  Specify the inaccuracy or defect to be corrected.
   19(3)  Correct the inaccuracy or defect.
   20b.  By delivering the articles of correction to the secretary
21of state for filing.
   223.  Articles of correction are effective on the effective
23date of the document they correct except as to persons relying
24on the uncorrected document and adversely affected by the
25correction. As to those persons, articles of correction are
26effective when filed.
27   Sec. 7.  Section 490.125, Code 2020, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.125  Filing duty of secretary of state.
   301.  If a document delivered to the office of the secretary of
31state for filing satisfies the requirements of section 490.120,
32the secretary of state shall file it.
   332.  The secretary of state files a document by recording
34it as filed on the date and time of receipt. After filing
35a document, except the biennial report required by section
-7-1490.1622, and except as provided in section 490.503, the
2secretary of state shall return to the person who delivered
3the document for filing a copy of the document with an
4acknowledgment of the date and time of filing.
   53.  If the secretary of state refuses to file a document,
6it shall be returned to the person who delivered the document
7for filing within five days after the document was delivered,
8together with a brief, written explanation of the reason for
9the refusal.
   104.  The secretary of state’s duty to file documents under
11this section is ministerial. The secretary of state’s filing
12or refusing to file a document does not create a presumption
13of any of the following:
   14a.  The document does or does not conform to the requirements
15of this chapter.
   16b.  The information contained in the document is correct or
17incorrect.
18   Sec. 8.  Section 490.126, Code 2020, is amended by striking
19the section and inserting in lieu thereof the following:
   20490.126  Appeal from secretary of state’s refusal to file
21document.
   221.  If the secretary of state refuses to file a document
23delivered for filing, the person that delivered the document
24for filing may petition the district court to compel its
25filing. The document and the explanation of the secretary of
26state’s refusal to file must be attached to the petition. The
27court may decide the matter in a summary proceeding.
   282.  The court may order the secretary of state to file the
29document or take other action the court considers appropriate.
   303.  The court’s final decision may be appealed as in other
31civil proceedings.
32   Sec. 9.  Section 490.127, Code 2020, is amended by striking
33the section and inserting in lieu thereof the following:
   34490.127  Evidentiary effect of certified copy of filed
35document.
-8-   1A certificate from the secretary of state delivered with
2a copy of a document filed by the secretary of state is
3conclusive evidence that the original document is on file with
4the secretary of state.
5   Sec. 10.  Section 490.128, Code 2020, is amended by striking
6the section and inserting in lieu thereof the following:
   7490.128  Certificate of existence or registration.
   81.  Any person may apply to the secretary of state to furnish
9a certificate of existence for a domestic corporation or a
10certificate of registration for a foreign corporation.
   112.  A certificate of existence must set forth all of the
12following:
   13a.  The domestic corporation’s corporate name.
   14b.  That the domestic corporation is duly incorporated under
15the law of this state, the date of its incorporation, and the
16period of its duration if less than perpetual.
   17c.  That all fees, taxes, and penalties owed to this state
18have been paid, subject to all of the following:
   19(1)  Payment is reflected in the records of the secretary of
20state.
   21(2)  Nonpayment affects the existence of the domestic
22corporation.
   23d.  That its most recent biennial report required by section
24490.1622 has been filed with the secretary of state.
   25e.  That articles of dissolution have not been filed.
   26f.  That the corporation is not administratively dissolved
27and a proceeding is not pending under section 490.1421.
   28g.  Other facts of record in the office of the secretary of
29state that may be requested by the applicant.
   303.  A certificate of registration must set forth all of the
31following:
   32a.  The foreign corporation’s name used in this state.
   33b.  That the foreign corporation is registered to do business
34in this state.
   35c.  That all fees, taxes, and penalties owed to this state
-9-1have been paid, subject to all of the following:
   2(1)  Payment is reflected in the records of the secretary of
3state.
   4(2)  Nonpayment affects the registration of the foreign
5corporation.
   6d.  That its most recent biennial report required by section
7490.1622 has been filed with the secretary of state.
   8e.  Other facts of record in the office of the secretary of
9state that may be requested by the applicant.
   104.  Subject to any qualification stated in the certificate,
11a certificate of existence or registration issued by the
12secretary of state may be relied upon as conclusive evidence of
13the facts stated in the certificate.
14   Sec. 11.  Section 490.129, Code 2020, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.129  Penalty for signing false document.
   171.  A person commits an offense by signing a document that
18the person knows is false in any material respect with intent
19that the document be delivered to the secretary of state for
20filing.
   212.  An offense under this section is a serious misdemeanor
22punishable by a fine of not to exceed one thousand dollars.
23   Sec. 12.  Section 490.135, Code 2020, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.135  Powers.
   26The secretary of state has the power reasonably necessary to
27perform the duties required of the secretary of state by this
28chapter.
29   Sec. 13.  Section 490.140, Code 2020, is amended by striking
30the section and inserting in lieu thereof the following:
   31490.140  Chapter definitions.
   32As used in this chapter, unless otherwise specified:
   331.  “Articles of incorporation” means the articles of
34incorporation described in section 490.202, all amendments
35to the articles of incorporation, and any other documents
-10-1permitted or required to be delivered for filing by a domestic
2business corporation with the secretary of state under any
3provision of this chapter that modify, amend, supplement,
4restate, or replace the articles of incorporation. After
5an amendment of the articles of incorporation or any other
6document filed under this chapter that restates the articles of
7incorporation in their entirety, the articles of incorporation
8shall not include any prior documents. When used with respect
9to a foreign corporation or a domestic or foreign nonprofit
10corporation, the “articles of incorporation” of such an entity
11means the document of such entity that is equivalent to the
12articles of incorporation of a domestic business corporation.
   132.  “Authorized shares” means the shares of all classes a
14domestic or foreign corporation is authorized to issue.
   153.  “Beneficial shareholder” means a person who owns
16the beneficial interest in shares, which may be a record
17shareholder or a person on whose behalf shares are registered
18in the name of an intermediary or nominee.
   194.  “Conspicuous” means so written, displayed, or presented
20that a reasonable person against whom the writing is to operate
21should have noticed it.
   225.  “Corporation”, “domestic corporation”, “business
23corporation”, or “domestic business corporation” means a
24corporation for profit, which is not a foreign corporation,
25incorporated under this chapter.
   266.  “Deliver” or “delivery” means any method of delivery
27used in conventional commercial practice, including delivery
28by hand, mail, commercial delivery, and, if authorized in
29accordance with section 490.141, by electronic transmission.
   307.  “Distribution” means a direct or indirect transfer of
31cash or other property, except a corporation’s own shares,
32or incurrence of indebtedness by a corporation to or for the
33benefit of its shareholders in respect of any of its shares.
34A distribution may be in the form of a payment of a dividend;
35a purchase, redemption, or other acquisition of shares; a
-11-1distribution of indebtedness; a distribution in liquidation;
2or otherwise.
   38.  “Document” means any of the following:
   4a.  A tangible medium on which information is inscribed, and
5includes handwritten, typed, printed or similar instruments,
6and copies of such instruments.
   7b.  An electronic record.
   89.  “Domestic”, with respect to an entity, means an entity
9governed as to its internal affairs by the law of this state.
   1010.  “Effective date”, when referring to a document accepted
11for filing by the secretary of state, means the time and date
12determined in accordance with section 490.123.
   1311.  “Electronic” means relating to technology having
14electrical, digital, magnetic, wireless, optical,
15electromagnetic, or similar capabilities.
   1612.  “Electronic record” means information that is stored in
17an electronic or other nontangible medium and is retrievable in
18paper form through an automated process used in conventional
19commercial practice, unless otherwise authorized in accordance
20with section 490.141, subsection 10.
   2113.  “Electronic transmission” or “electronically transmitted”
22means any form or process of communication not directly
23involving the physical transfer of paper or another tangible
24medium, which is all of the following:
   25a.  Suitable for the retention, retrieval, and reproduction
26of information by the recipient.
   27b.  Retrievable in paper form by the recipient through an
28automated process used in conventional commercial practice,
29unless otherwise authorized in accordance with section 490.141,
30subsection 10.
   3114.  “Eligible entity” means a domestic or foreign
32unincorporated entity or a domestic or foreign nonprofit
33corporation.
   3415.  “Eligible interests” means interests or memberships.
   3516.  “Employee” includes an officer but not a director.
-12-1A director may accept duties that make the director also an
2employee.
   317.  “Entity” includes a domestic and foreign business
4corporation; domestic and foreign nonprofit corporation;
5estate; trust; domestic and foreign unincorporated entity; and
6a state, the United States, and a foreign government.
   718.  “Expenses” means reasonable expenses of any kind,
8including reasonable fees and expenses of counsel and experts
9employed by the shareholder, that are incurred in connection
10with a matter.
   1119.  “Filing entity” means an unincorporated entity, other
12than a limited liability partnership, that is of a type that
13is created by filing a public organic record or is required to
14file a public organic record that evidences its creation.
   1520.  “Foreign”, with respect to an entity, means an entity
16governed as to its internal affairs by the organic law of a
17jurisdiction other than this state.
   1821.  “Foreign corporation” or “foreign business corporation”
19means a corporation incorporated under a law other than the
20law of this state which would be a business corporation if
21incorporated under the law of this state.
   2222.  “Foreign nonprofit corporation” means a corporation
23incorporated under a law other than the law of this state which
24would be a nonprofit corporation if incorporated under the law
25of this state.
   2623.  “Foreign registration statement” means the foreign
27registration statement described in section 490.1503.
   2824.  “Governmental subdivision” includes an authority, city,
29county, district, and municipality.
   3025.  “Governor” means any person under whose authority the
31powers of an entity are exercised and under whose direction the
32activities and affairs of the entity are managed pursuant to
33the organic law governing the entity and its organic rules.
   3426.  “Includes” and “including” denote a partial definition
35or a nonexclusive list.
-13-   127.  “Individual” means a natural person.
   228.  “Interest” means either or both of the following rights
3under the organic law governing an unincorporated entity:
   4a.  The right to receive distributions from the entity either
5in the ordinary course or upon liquidation.
   6b.  The right to receive notice or vote on issues involving
7its internal affairs, other than as an agent, assignee, proxy,
8or person responsible for managing its business and affairs.
   929.  “Interest holder” means a person who holds of record an
10interest.
   1130.  a.  “Interest holder liability” means any of the
12following:
   13(1)  Personal liability for a debt, obligation, or other
14liability of a domestic or foreign corporation or eligible
15entity that is imposed on a person by any of the following:
   16(a)  Solely by reason of the person’s status as a
17shareholder, member, or interest holder.
   18(b)  By the articles of incorporation of the domestic
19corporation or the organic rules of the eligible entity
20or foreign corporation that make one or more specified
21shareholders, members, or interest holders, or categories of
22shareholders, members, or interest holders, liable in their
23capacity as shareholders, members, or interest holders for all
24or specified liabilities of the corporation or eligible entity.
   25(2)  An obligation of a shareholder, member, or interest
26holder under the articles of incorporation of a domestic
27corporation or the organic rules of an eligible entity or
28foreign corporation to contribute to the entity.
   29b.  For purposes of paragraph “a”, except as otherwise
30provided in the articles of incorporation of a domestic
31corporation or the organic law or organic rules of an eligible
32entity or a foreign corporation, interest holder liability
33arises under paragraph “a”, subparagraph (1), when the
34corporation or eligible entity incurs the liability.
   3531.  “Jurisdiction of formation” means the state or country
-14-1the law of which includes the organic law governing a domestic
2or foreign corporation or eligible entity.
   332.  “Means” denotes an exhaustive definition.
   433.  “Membership” means the rights of a member in a domestic
5or foreign nonprofit corporation.
   634.  “Merger” means a transaction pursuant to section
7490.1102.
   835.  “Nonfiling entity” means an unincorporated entity that
9is of a type that is not created by filing a public organic
10record.
   1136.  “Nonprofit corporation” or “domestic nonprofit
12corporation” means a corporation incorporated under the laws of
13this state and subject to the provisions of chapter 504.
   1437.  “Organic law” means the statute governing the internal
15affairs of a domestic or foreign business or nonprofit
16corporation or unincorporated entity.
   1738.  “Organic rules” means the public organic record and
18private organic rules of a domestic or foreign corporation or
19eligible entity.
   2039.  “Person” means a person as defined in section 4.1.
   2140.  “Principal office” means the office, in or out of
22this state, so designated in the biennial report or foreign
23registration statement where the principal executive offices of
24a domestic or foreign corporation are located.
   2541.  a.  “Private organic rules” means any of the following:
   26(1)  The bylaws of a domestic or foreign business or
27nonprofit corporation.
   28(2)  The rules, regardless of whether in writing, that govern
29the internal affairs of an unincorporated entity, are binding
30on all of its interest holders, and are not part of its public
31organic record, if any.
   32b.  Where private organic rules have been amended or
33restated, the term means the private organic rules as last
34amended or restated.
   3542.  “Proceeding” includes a civil suit and criminal,
-15-1administrative, and investigatory action.
   243.  a.  “Public organic record” means any of the following:
   3(1)  The articles of incorporation of a domestic or foreign
4business or nonprofit corporation.
   5(2)  The document, if any, the filing of which is required
6to create an unincorporated entity, or which creates the
7unincorporated entity and is required to be filed.
   8b.  Where a public organic record has been amended or
9restated, the term means the public organic record as last
10amended or restated.
   1144.  “Record date” means the date fixed for determining
12the identity of the corporation’s shareholders and their
13shareholdings for purposes of this chapter. Unless another
14time is specified when the record date is fixed, the
15determination shall be made as of the close of business at the
16principal office of the corporation on the date so fixed.
   1745.  “Record shareholder” means any of the following:
   18a.  The person in whose name shares are registered in the
19records of the corporation.
   20b.  The person identified as the beneficial owner of shares
21in a beneficial ownership certificate pursuant to section
22490.723 on file with the corporation to the extent of the
23rights granted by such certificate.
   2446.  “Registered foreign corporation” means a foreign
25corporation registered to do business in the state pursuant to
26subchapter XV.
   2747.  “Secretary” means the corporate officer to whom the
28board of directors has delegated responsibility under section
29490.840, subsection 3, to maintain the minutes of the meetings
30of the board of directors and of the shareholders and for
31authenticating records of the corporation.
   3248.  “Share exchange” means a transaction pursuant to section
33490.1103.
   3449.  “Shareholder” means a record shareholder.
   3550.  “Shares” means the units into which the proprietary
-16-1interests in a domestic or foreign corporation are divided.
   251.  “Sign” or “signature” means, with present intent to
3authenticate or adopt a document, doing any of the following:
   4a.  Executing or adopting a tangible symbol to a document,
5including any manual, facsimile, or conformed signature.
   6b.  Attaching to or logically associating with an electronic
7transmission an electronic sound, symbol, or process,
8and including an electronic signature in an electronic
9transmission.
   1052.  “State”, when referring to a part of the United
11States, includes a state and commonwealth, and their agencies
12and governmental subdivisions, and a territory and insular
13possession, and their agencies and governmental subdivisions,
14of the United States.
   1553.  “Subscriber” means a person who subscribes for shares in
16a corporation, whether before or after incorporation.
   1754.  “Type of entity” means a generic form of entity that is
18any of the following:
   19a.  Recognized at common law.
   20b.  Formed under an organic law, regardless of whether
21some entities formed under that law are subject to provisions
22of that law that create different categories of the form of
23entity.
   2455.  a.  “Unincorporated entity” means an organization
25or artificial legal person that either has a separate legal
26existence or has the power to acquire an estate in real
27property in its own name and that is not any of the following:
   28(1)  A domestic or foreign business or nonprofit
29corporation.
   30(2)  A series of a limited liability company or of another
31type of entity.
   32(3)  An estate.
   33(4)  A trust.
   34(5)  A state, the United States, or foreign government.
   35b.  “Unincorporated entity” includes a general partnership,
-17-1limited liability company, limited partnership, business
2trust, joint stock association, and unincorporated nonprofit
3association.
   456.  “United States” includes district, authority, bureau,
5commission, department, and any other agency of the United
6States.
   757.  “Unrestricted voting trust beneficial owner” means, with
8respect to any shareholder rights, a voting trust beneficial
9owner whose entitlement to exercise the shareholder right in
10question is not inconsistent with the voting trust agreement.
   1158.  “Voting group” means all shares of one or more
12classes or series that under the articles of incorporation
13or this chapter are entitled to vote and be counted together
14collectively on a matter at a meeting of shareholders. All
15shares entitled by the articles of incorporation or this
16chapter to vote generally on the matter are for that purpose
17a single voting group.
   1859.  “Voting power” means the current power to vote in the
19election of directors.
   2060.  “Voting trust beneficial owner” means an owner of
21a beneficial interest in shares of the corporation held
22in a voting trust established pursuant to section 490.730,
23subsection 1.
   2461.  “Writing” or “written” means any information in the form
25of a document.
26   Sec. 14.  Section 490.141, Code 2020, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.141  Notices and other communications.
   291.  A notice under this chapter must be in writing unless
30oral notice is reasonable in the circumstances. Unless
31otherwise agreed between the sender and the recipient, words
32in a notice or other communication under this chapter must be
33in English.
   342.  A notice or other communication may be given by any
35method of delivery, except that electronic transmissions must
-18-1be in accordance with this section. If the methods of delivery
2are impracticable, a notice or other communication may be
3given by means of a broad nonexclusionary distribution to the
4public, which may include a newspaper of general circulation
5in the area where published; radio, television, or other
6form of public broadcast communication; or other methods of
7distribution that the corporation has previously identified to
8its shareholders.
   93.  A notice or other communication to a domestic corporation
10or to a foreign corporation registered to do business in this
11state may be delivered to the corporation’s registered agent at
12its registered office or to the secretary at the corporation’s
13principal office shown in its most recent biennial report or,
14in the case of a foreign corporation that has not yet delivered
15a biennial report, in its foreign registration statement.
   164.  A notice or other communication may be delivered by
17electronic transmission if consented to by the recipient or if
18authorized by subsection 10.
   195.  Any consent under subsection 4 may be revoked by the
20person who consented by written or electronic notice to the
21person to whom the consent was delivered. Any such consent is
22deemed revoked if all of the following apply:
   23a.  The corporation is unable to deliver two consecutive
24electronic transmissions given by the corporation in accordance
25with such consent.
   26b.  Such inability becomes known to the secretary or an
27assistant secretary or to the transfer agent, or other person
28responsible for the giving of notice or other communications;
29provided, however, the inadvertent failure to treat such
30inability as a revocation shall not invalidate any meeting or
31other action.
   326.  Unless otherwise agreed between the sender and the
33recipient, an electronic transmission is received when all of
34the following apply:
   35a.  The electronic transmission enters an information
-19-1processing system that the recipient has designated or uses
2for the purposes of receiving electronic transmissions or
3information of the type sent, and from which the recipient is
4able to retrieve the electronic transmission.
   5b.  The electronic transmission is in a form capable of being
6processed by that system.
   77.  Receipt of an electronic acknowledgment from an
8information processing system described in subsection 6,
9paragraph “a”, establishes that an electronic transmission was
10received but, by itself, does not establish that the content
11sent corresponds to the content received.
   128.  An electronic transmission is received under this
13section even if no person is aware of its receipt.
   149.  A notice or other communication, if in a comprehensible
15form or manner, is effective at the earliest of the following:
   16a.  If in a physical form, the earliest of when it is
17actually received, or when it is left at any of the following:
   18(1)  A shareholder’s address shown on the corporation’s
19record of shareholders maintained by the corporation under
20section 490.1601, subsection 4.
   21(2)  A director’s residence or usual place of business.
   22(3)  The corporation’s principal office.
   23b.  If mailed by postage prepaid and correctly addressed to a
24shareholder, upon deposit in the United States mail.
   25c.  If mailed by United States mail postage prepaid and
26correctly addressed to a recipient other than a shareholder,
27the earliest of when it is actually received, or as follows:
   28(1)  If sent by registered or certified mail, return receipt
29requested, the date shown on the return receipt signed by or on
30behalf of the addressee.
   31(2)  Five days after it is deposited in the United States
32mail.
   33d.  If an electronic transmission, when it is received as
34provided in subsection 6.
   35e.  If oral, when communicated.
-20-   110.  A notice or other communication may be in the form of
2an electronic transmission that cannot be directly reproduced
3in paper form by the recipient through an automated process
4used in conventional commercial practice only if all of the
5following apply:
   6a.  The electronic transmission is otherwise retrievable in
7perceivable form.
   8b.  The sender and the recipient have consented in writing to
9the use of such form of electronic transmission.
   1011.  If this chapter prescribes requirements for notices
11or other communications in particular circumstances, those
12requirements govern. If articles of incorporation or bylaws
13prescribe requirements for notices or other communications,
14not inconsistent with this section or other provisions of
15this chapter, those requirements govern. The articles of
16incorporation or bylaws may authorize or require delivery of
17notices of meetings of directors by electronic transmission.
   1812.  In the event that any provisions of this chapter are
19deemed to modify, limit, or supersede the federal Electronic
20Signatures in Global and National Commerce Act, 15 U.S.C.
21§§7001 et seq., the provisions of this chapter shall control
22to the maximum extent permitted by section 102(a)(2) of that
23federal Act.
   2413.  a.  Whenever notice would otherwise be required to be
25given under any provision of this subchapter to a shareholder,
26such notice need not be given if any of the following apply:
   27(1)  Notices to the shareholders of two consecutive annual
28meetings, and all notices of meetings during the period between
29such two consecutive annual meetings, have been sent to such
30shareholder at such shareholder’s address as shown on the
31records of the corporation and have been returned undeliverable
32or could not be delivered.
   33(2)  All, but not less than two, payments of dividends on
34securities during a twelve-month period, or two consecutive
35payments of dividends on securities during a period of more
-21-1than twelve months, have been sent to such shareholder at
2such shareholder’s address as shown on the records of the
3corporation and have been returned undeliverable or could not
4be delivered.
   5b.  If any such shareholder shall deliver to the corporation
6a written notice setting forth such shareholder’s then-current
7address, the requirement that notice be given to such
8shareholder shall be reinstated.
9   Sec. 15.  Section 490.142, Code 2020, is amended by striking
10the section and inserting in lieu thereof the following:
   11490.142  Number of shareholders.
   121.  For purposes of this chapter, any of the following
13identified as a shareholder in a corporation’s current record
14of shareholders constitutes one shareholder:
   15a.  Three or fewer co-owners.
   16b.  A corporation, partnership, trust, estate, or other
17entity.
   18c.  The trustees, guardians, custodians, or other fiduciaries
19of a single trust, estate, or account.
   202.  For purposes of this chapter, shareholdings registered
21in substantially similar names constitute one shareholder if
22it is reasonable to believe that the names represent the same
23person.
24   Sec. 16.  Section 490.143, Code 2020, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.143  Qualified director.
   271.  As used in this chapter, a “qualified director” means a
28director who takes action, if at the time action is to be taken
29any of the following applies:
   30a.  Under section 490.202, subsection 2, paragraph “f”, is
31not a director under any of the following circumstances:
   32(1)  To whom the limitation or elimination of the duty of
33an officer to offer potential business opportunities to the
34corporation would apply.
   35(2)  Has a material relationship with any other person to
-22-1whom the limitation or elimination described in subparagraph
2(1) would apply.
   3b.  Under section 490.744, does not have any of the
4following:
   5(1)  A material interest in the outcome of the proceeding.
   6(2)  A material relationship with a person who has such an
7interest.
   8c.  Under section 490.853 or 490.855, all of the following
9apply:
   10(1)  The director is not a party to the proceeding.
   11(2)  The director is not a director as to whom a transaction
12is a director’s conflicting interest transaction or who sought
13a disclaimer of the corporation’s interest in a business
14opportunity under section 490.870, which transaction or
15disclaimer is challenged in the proceeding.
   16(3)  The director does not have a material relationship with
17a director described in either subparagraph (1) or (2).
   18d.  Under section 490.862, the director is not any of the
19following:
   20(1)  A director as to whom the transaction is a director’s
21conflicting interest transaction.
   22(2)  A director who has a material relationship with another
23director as to whom the transaction is a director’s conflicting
24interest transaction.
   25e.  Under section 490.870, is not a director who does any of
26the following:
   27(1)  Pursues or takes advantage of the business opportunity,
28directly or indirectly through or on behalf of another person.
   29(2)  Has a material relationship with a director or officer
30who pursues or takes advantage of the business opportunity,
31directly, or indirectly through or on behalf of another person.
   322.  As used in this section, all of the following apply:
   33a.  “Material interest” means an actual or potential
34benefit or detriment, other than one which would devolve on
35the corporation or the shareholders generally, that would
-23-1reasonably be expected to impair the objectivity of the
2director’s judgment when participating in the action to be
3taken.
   4b.  “Material relationship” means a familial, financial,
5professional, employment, or other relationship that would
6reasonably be expected to impair the objectivity of the
7director’s judgment when participating in the action to be
8taken.
   93.  The presence of one or more of the following
10circumstances shall not automatically prevent a director from
11being a qualified director:
   12a.  Nomination or election of the director to the current
13board by any director who is not a qualified director with
14respect to the matter, or by any person that has a material
15relationship with that director, acting alone or participating
16with others.
   17b.  Service as a director of another corporation of which a
18director who is not a qualified director with respect to the
19matter, or any individual who has a material relationship with
20that director, is or was also a director.
   21c.  With respect to action to be taken under section 490.744,
22status as a named defendant, as a director against whom action
23is demanded, or as a director who approved the conduct being
24challenged.
25   Sec. 17.  Section 490.144, Code 2020, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.144  Householding.
   281.  A corporation has delivered written notice or any
29other report or statement under this chapter, the articles of
30incorporation, or the bylaws to all shareholders who share a
31common address if all of the following apply:
   32a.  The corporation delivers one copy of the notice, report,
33or statement to the common address.
   34b.  The corporation addresses the notice, report, or
35statement to those shareholders either as a group or to each
-24-1of those shareholders individually or to the shareholders in a
2form to which each of those shareholders has consented.
   3c.  Each of those shareholders consents to delivery of
4a single copy of such notice, report, or statement to the
5shareholders’ common address.
   62.  Any such consent described in subsection 1, paragraph
7“b” or “c”, shall be revocable by any of such shareholders who
8deliver written notice of revocation to the corporation. If
9such written notice of revocation is delivered, the corporation
10shall begin providing individual notices, reports, or other
11statements to the revoking shareholder no later than thirty
12days after delivery of the written notice of revocation.
   133.  Any shareholder who fails to object by written notice
14to the corporation, within sixty days of written notice by
15the corporation of its intention to deliver single copies of
16notices, reports, or statements to shareholders who share a
17common address as permitted by subsection 1, shall be deemed
18to have consented to receiving such single copy at the common
19address; provided that the notice of intention explains that
20consent may be revoked and the method for revoking.
21   Sec. 18.  NEW SECTION.  490.145  Part definitions.
   22As used in this part:
   231.  “Corporate action” means any action taken by or on
24behalf of the corporation, including any action taken by the
25incorporator, the board of directors, a committee of the board
26of directors, an officer or agent of the corporation, or the
27shareholders.
   282.  “Date of the defective corporate action” means the date
29or, if the defective corporate action occurred or may have
30occurred on more than one date, the range of dates, or the
31approximate date or range of dates, if the exact date or range
32of dates is unknown or not readily ascertainable, the defective
33corporate action was purported to have been taken.
   343.  “Defective corporate action” means all of the following:
   35a.  Any corporate action purportedly taken that is, and at
-25-1the time such corporate action was purportedly taken would
2have been, within the power of the corporation, but is void or
3voidable due to a failure of authorization.
   4b.  An overissue.
   54.  “Failure of authorization” means the failure to
6authorize, approve, or otherwise effect a corporate action in
7compliance with the provisions of this chapter, the articles of
8incorporation or bylaws, a corporate resolution, or any plan
9or agreement to which the corporation is a party, if and to the
10extent such failure would render such corporate action void or
11voidable.
   125.  “Overissue” means the purported issuance of any of the
13following:
   14a.  Shares of a class or series in excess of the number of
15shares of a class or series the corporation has the power to
16issue under section 490.601 at the time of such issuance.
   17b.  Shares of any class or series that is not then authorized
18for issuance by the articles of incorporation.
   196.  “Putative shares” means the shares of any class or
20series, including shares issued upon exercise of rights,
21options, warrants or other securities convertible into
22shares of the corporation, or interests with respect to such
23shares, that were created or issued as a result of a defective
24corporate action, and any of the following applies:
   25a.  But for any failure of authorization would constitute
26valid shares.
   27b.  Cannot be determined by the board of directors to be
28valid shares.
   297.  “Valid shares” means the shares of any class or series
30that have been duly authorized and validly issued in accordance
31with this chapter, including as a result of ratification or
32validation under this part.
   338.  a.  “Validation effective time” with respect to any
34defective corporate action ratified under this part means the
35later of the following:
-26-   1(1)  The time at which the ratification of the defective
2corporate action is approved by the shareholders, or if
3approval of shareholders is not required, the time at which
4the notice required by section 490.149 becomes effective in
5accordance with section 490.141.
   6(2)  The time at which any articles of validation filed in
7accordance with section 490.151 become effective.
   8b.  The validation effective time shall not be affected by
9the filing or pendency of a judicial proceeding under section
10490.152 or otherwise, unless otherwise ordered by the court.
11   Sec. 19.  NEW SECTION.  490.146  Defective corporate actions.
   121.  A defective corporate action shall not be void or
13voidable if ratified in accordance with section 490.147 or
14validated in accordance with section 490.152.
   152.  Ratification under section 490.147 or validation under
16section 490.152 shall not be deemed to be the exclusive means
17of ratifying or validating any defective corporate action, and
18the absence or failure of ratification in accordance with this
19part shall not, of itself, affect the validity or effectiveness
20of any corporate action properly ratified under common law or
21otherwise, nor shall it create a presumption that any such
22corporate action is or was a defective corporate action or void
23or voidable.
   243.  In the case of an overissue, putative shares shall be
25valid shares effective as of the date originally issued or
26purportedly issued upon any of the following:
   27a.  The effectiveness under this part and under subchapter X
28of an amendment to the articles of incorporation authorizing,
29designating, or creating such shares.
   30b.  The effectiveness of any other corporate action under
31this part ratifying the authorization, designation, or creation
32of such shares.
33   Sec. 20.  NEW SECTION.  490.147  Ratification of defective
34corporate actions.
   351.  To ratify a defective corporate action under this
-27-1section, other than the ratification of an election of the
2initial board of directors under subsection 2, the board of
3directors shall take action ratifying the action in accordance
4with section 490.148, stating all of the following:
   5a.  The defective corporate action to be ratified and, if the
6defective corporate action involved the issuance of putative
7shares, the number and type of putative shares purportedly
8issued.
   9b.  The date of the defective corporate action.
   10c.  The nature of the failure of authorization with respect
11to the defective corporate action to be ratified.
   12d.  That the board of directors approves the ratification of
13the defective corporate action.
   142.  In the event that a defective corporate action to be
15ratified relates to the election of the initial board of
16directors of the corporation under section 490.205, subsection
171, paragraph “b”, a majority of the persons who, at the time of
18the ratification, are exercising the powers of directors may
19take an action stating all of the following:
   20a.  The name of the person or persons who first took
21action in the name of the corporation as the initial board of
22directors of the corporation.
   23b.  The earlier of the date on which such persons first
24took such action or were purported to have been elected as the
25initial board of directors.
   26c.  That the ratification of the election of such person or
27persons as the initial board of directors is approved.
   283.  If any provision of this chapter, the articles of
29incorporation or bylaws, any corporate resolution, or any
30plan or agreement to which the corporation is a party in
31effect at the time action under subsection 1 is taken requires
32shareholder approval or would have required shareholder
33approval at the date of the occurrence of the defective
34corporate action, the ratification of the defective corporate
35action approved in the action taken by the directors under
-28-1subsection 1 shall be submitted to the shareholders for
2approval in accordance with section 490.148.
   34.  Unless otherwise provided in the action taken by the
4board of directors under subsection 1, after the action by the
5board of directors has been taken and, if required, approved
6by the shareholders, the board of directors may abandon the
7ratification at any time before the validation effective time
8without further action of the shareholders.
9   Sec. 21.  NEW SECTION.  490.148  Action on ratification.
   101.  The quorum and voting requirements applicable to a
11ratifying action by the board of directors under section
12490.147, subsection 1, shall be the quorum and voting
13requirements applicable to the corporate action proposed to be
14ratified at the time such ratifying action is taken.
   152.  If the ratification of the defective corporate action
16requires approval by the shareholders under section 490.147,
17subsection 3, and if the approval is to be given at a meeting,
18the corporation shall notify each holder of valid and putative
19shares, regardless of whether entitled to vote, as of the
20record date for notice of the meeting and as of the date of
21the occurrence of defective corporate action, provided that
22notice shall not be required to be given to holders of valid or
23putative shares whose identities or addresses for notice cannot
24be determined from the records of the corporation. The notice
25must state that the purpose, or one of the purposes, of the
26meeting is to consider ratification of a defective corporate
27action and must be accompanied by all of the following:
   28a.  Either a copy of the action taken by the board of
29directors in accordance with section 490.147, subsection 1,
30or the information required by section 490.147, subsection 1,
31paragraphs “a” through “d”.
   32b.  A statement that any claim that the ratification of
33such defective corporate action and any putative shares issued
34as a result of such defective corporate action should not be
35effective, or should be effective only on certain conditions,
-29-1shall be brought within one hundred twenty days from the
2applicable validation effective time.
   33.  Except as provided in subsection 4, with respect to the
4voting requirements to ratify the election of a director, the
5quorum and voting requirements applicable to the approval by
6the shareholders required by section 490.147, subsection 3,
7shall be the quorum and voting requirements applicable to the
8corporate action proposed to be ratified at the time of such
9shareholder approval.
   104.  The approval by shareholders to ratify the election of a
11director requires that the votes cast within the voting group
12favoring such ratification exceed the votes cast opposing such
13ratification of the election at a meeting at which a quorum is
14present.
   155.  Putative shares on the record date for determining
16the shareholders entitled to vote on any matter submitted to
17shareholders under section 490.147, subsection 3, and without
18giving effect to any ratification of putative shares that
19becomes effective as a result of such vote, shall neither be
20entitled to vote nor counted for quorum purposes in any vote to
21approve the ratification of any defective corporate action.
   226.  If the approval under this section of putative shares
23would result in an overissue, in addition to the approval
24required by section 490.147, approval of an amendment to the
25articles of incorporation under subchapter X to increase
26the number of shares of an authorized class or series or to
27authorize the creation of a class or series of shares so there
28would be no overissue shall also be required.
29   Sec. 22.  NEW SECTION.  490.149  Notice requirements.
   301.  Unless shareholder approval is required under section
31490.147, subsection 3, prompt notice of an action taken under
32section 490.147 shall be given to each holder of valid and
33putative shares, regardless of whether entitled to vote, as of
34all of the following:
   35a.  The date of such action by the board of directors.
-30-   1b.  The date of the defective corporate action ratified,
2provided that notice shall not be required to be given to
3holders of valid and putative shares whose identities or
4addresses for notice cannot be determined from the records of
5the corporation.
   62.  The notice must contain all of the following:
   7a.  Either a copy of the action taken by the board of
8directors in accordance with section 490.147, subsection 1 or
92, or the information required by section 490.147, subsection
101, paragraphs “a” through “d”, or section 490.147, subsection 2,
11paragraphs “a” through “c”, as applicable.
   12b.  A statement that any claim that the ratification of
13the defective corporate action and any putative shares issued
14as a result of such defective corporate action should not be
15effective, or should be effective only on certain conditions,
16shall be brought within one hundred twenty days from the
17applicable validation effective time.
   183.  No notice under this section is required with respect
19to any action required to be submitted to shareholders for
20approval under section 490.147, subsection 3, if notice is
21given in accordance with section 490.148, subsection 2.
   224.  A notice required by this section may be given in any
23manner permitted by section 490.141 and, for any corporation
24subject to the reporting requirements of section 13 or 15(d) of
25the federal Securities Exchange Act of 1934, may be given by
26means of a filing or furnishing of such notice with the United
27States securities and exchange commission.
28   Sec. 23.  NEW SECTION.  490.150  Effect of ratification.
   29From and after the validation effective time, and without
30regard to the one hundred twenty-day period during which
31a claim may be brought under section 490.152, all of the
32following shall apply:
   331.  Each defective corporate action ratified in accordance
34with section 490.147 shall not be void or voidable as a result
35of the failure of authorization identified in the action taken
-31-1under section 490.147, subsection 1 or 2, and shall be deemed
2a valid corporate action effective as of the date of the
3defective corporate action.
   42.  The issuance of each putative share or fraction of a
5putative share purportedly issued pursuant to a defective
6corporate action identified in the action taken under section
7490.147 shall not be void or voidable, and each such putative
8share or fraction of a putative share shall be deemed to be an
9identical share or fraction of a valid share as of the time it
10was purportedly issued.
   113.  Any corporate action taken subsequent to the defective
12corporate action ratified in accordance with this part in
13reliance on such defective corporate action having been
14validly effected and any subsequent defective corporate action
15resulting directly or indirectly from such original defective
16corporate action shall be valid as of the time taken.
17   Sec. 24.  NEW SECTION.  490.151  Filings.
   181.  If the defective corporate action ratified under this
19part would have required under any other section of this
20chapter a filing in accordance with this chapter, then,
21regardless of whether a filing was previously made in respect
22of such defective corporate action and in lieu of a filing
23otherwise required by this chapter, the corporation shall file
24articles of validation in accordance with this section, and
25such articles of validation shall serve to amend or substitute
26for any other filing with respect to such defective corporate
27action required by this chapter.
   282.  The articles of validation must set forth all of the
29following:
   30a.  The defective corporate action that is the subject of the
31articles of validation, including in the case of any defective
32corporate action involving the issuance of putative shares, the
33number and type of putative shares issued and the date or dates
34upon which such putative shares were purported to have been
35issued.
-32-   1b.  The date of the defective corporate action.
   2c.  The nature of the failure of authorization in respect of
3the defective corporate action.
   4d.  A statement that the defective corporate action was
5ratified in accordance with section 490.147, including
6the date on which the board of directors ratified such
7defective corporate action and the date, if any, on which
8the shareholders approved the ratification of such defective
9corporate action.
   10e.  The information required by subsection 3.
   113.  The articles of validation must also contain the
12following information:
   13a.  If a filing was previously made in respect of the
14defective corporate action and no changes to such filing are
15required to give effect to the ratification of such defective
16corporate action in accordance with section 490.147, the
17articles of validation must set forth all of the following:
   18(1)  The name, title, and filing date of the filing
19previously made and any articles of correction to that filing.
   20(2)  A statement that a copy of the filing previously made,
21together with any articles of correction to that filing, is
22attached as an exhibit to the articles of validation.
   23b.  If a filing was previously made in respect of the
24defective corporate action and such filing requires any change
25to give effect to the ratification of such defective corporate
26action in accordance with section 490.147, the articles of
27validation must set forth all of the following:
   28(1)  The name, title, and filing date of the filing
29previously made and any articles of correction to that filing.
   30(2)  A statement that a filing containing all of the
31information required to be included under the applicable
32section or sections of this chapter to give effect to such
33defective corporate action is attached as an exhibit to the
34articles of validation.
   35(3)  The date and time that such filing is deemed to have
-33-1become effective.
   2c.  If a filing was not previously made in respect of the
3defective corporate action and the defective corporate action
4ratified under section 490.147 would have required a filing
5under any other section of this chapter, the articles of
6validation must set forth all of the following:
   7(1)  A statement that a filing containing all of the
8information required to be included under the applicable
9section or sections of this chapter to give effect to such
10defective corporate action is attached as an exhibit to the
11articles of validation.
   12(2)  The date and time that such filing is deemed to have
13become effective.
14   Sec. 25.  NEW SECTION.  490.152  Judicial proceedings
15regarding validity of corporate actions.
   161.  Upon application by the corporation, any successor
17entity to the corporation, a director of the corporation, any
18shareholder, beneficial shareholder, or unrestricted voting
19trust beneficial owner of the corporation, including any
20such shareholder, beneficial shareholder, or unrestricted
21voting trust beneficial owner as of the date of the defective
22corporate action ratified under section 490.147, or any other
23person claiming to be substantially and adversely affected by a
24ratification under section 490.147, the district court of the
25county where a corporation’s principal office or, if none in
26this state, its registered office, is located may do all of the
27following:
   28a.  Determine the validity and effectiveness of any corporate
29action or defective corporate action.
   30b.  Determine the validity and effectiveness of any
31ratification under section 490.147.
   32c.  Determine the validity of any putative shares.
   33d.  Modify or waive any of the procedures specified in
34section 490.147 or 490.148 to ratify a defective corporate
35action.
-34-   12.  In connection with an action under this section, the
2court may make such findings or orders, and take into account
3any factors or considerations, regarding such matters as it
4deems proper under the circumstances.
   53.  Service of process of the application under subsection
61 on the corporation may be made in any manner provided by
7statute of this state or by rule of the applicable court for
8service on the corporation, and no other party need be joined
9in order for the court to adjudicate the matter. In an action
10filed by the corporation, the court may require notice of the
11action to be provided to other persons specified by the court
12and permit such other persons to intervene in the action.
   134.  Notwithstanding any other provision of this section or
14otherwise under applicable law, any action asserting that the
15ratification of any defective corporate action and any putative
16shares issued as a result of such defective corporate action
17should not be effective, or should be effective only on certain
18conditions, shall be brought within one hundred twenty days of
19the validation effective time.
20   Sec. 26.  Section 490.201, Code 2020, is amended by striking
21the section and inserting in lieu thereof the following:
   22490.201  Incorporators.
   23One or more persons may act as the incorporator or
24incorporators of a corporation by delivering articles of
25incorporation to the secretary of state for filing.
26   Sec. 27.  Section 490.202, Code 2020, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.202  Articles of incorporation.
   291.  The articles of incorporation must set forth all of the
30following:
   31a.  A corporate name for the corporation that satisfies the
32requirements of section 490.401.
   33b.  The number of shares the corporation is authorized to
34issue.
   35c.  The street and mailing addresses of the corporation’s
-35-1initial registered office and the name of its initial
2registered agent at that office.
   3d.  The name and address of each incorporator.
   42.  The articles of incorporation may set forth any of the
5following:
   6a.  The names and addresses of the individuals who are to
7serve as the initial directors.
   8b.  Provisions not inconsistent with law regarding any of the
9following:
   10(1)  The purpose or purposes for which the corporation is
11organized.
   12(2)  Managing the business and regulating the affairs of the
13corporation.
   14(3)  Defining, limiting, and regulating the powers of the
15corporation, its board of directors, and shareholders.
   16(4)  A par value for authorized shares or classes of shares.
   17(5)  The imposition of interest holder liability on
18shareholders.
   19c.  Any provision that under this chapter is required or
20permitted to be set forth in the bylaws.
   21d.  A provision eliminating or limiting the liability
22of a director to the corporation or its shareholders for
23money damages for any action taken, or any failure to take
24any action, as a director, except liability for any of the
25following:
   26(1)  The amount of a financial benefit received by a director
27to which the director is not entitled.
   28(2)  An intentional infliction of harm on the corporation or
29the shareholders.
   30(3)  A violation of section 490.833.
   31(4)  An intentional violation of criminal law.
   32e.  A provision permitting or making obligatory
33indemnification of a director for liability, as defined in
34section 490.850, to any person for any action taken, or any
35failure to take any action, as a director, except liability for
-36-1any of the following:
   2(1)  Receipt of a financial benefit to which the director is
3not entitled.
   4(2)  An intentional infliction of harm on the corporation or
5its shareholders.
   6(3)  A violation of section 490.833.
   7(4)  An intentional violation of criminal law.
   8f.  A provision limiting or eliminating any duty of a
9director or any other person to offer the corporation the
10right to have or participate in any, or one or more classes
11or categories of, business opportunities, before the pursuit
12or taking of the opportunity by the director or other person;
13provided that any application of such a provision to an officer
14or a related person of that officer is subject to all of the
15following:
   16(1)  It also requires approval of that application by the
17board of directors, subsequent to the effective date of the
18provision, by action of qualified directors taken in compliance
19with the same procedures as are set forth in section 490.862.
   20(2)  It may be limited by the authorizing action of the
21board.
   223.  The articles of incorporation need not set forth any of
23the corporate powers enumerated in this chapter.
   244.  Provisions of the articles of incorporation may be made
25dependent upon facts objectively ascertainable outside the
26articles of incorporation in accordance with section 490.120,
27subsection 11.
   285.  As used in this section, “related person” has the meaning
29specified in section 490.860.
30   Sec. 28.  Section 490.203, Code 2020, is amended by striking
31the section and inserting in lieu thereof the following:
   32490.203  Incorporation.
   331.  Unless a delayed effective date is specified, the
34corporate existence begins when the articles of incorporation
35are filed.
-37-   12.  The secretary of state’s filing of the articles of
2incorporation is conclusive proof that the incorporators
3satisfied all conditions precedent to incorporation except in a
4proceeding by the state to cancel or revoke the incorporation
5or involuntarily dissolve the corporation.
6   Sec. 29.  Section 490.205, Code 2020, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.205  Organization of corporation.
   91.  After incorporation, the following shall apply:
   10a.  If initial directors are named in the articles
11of incorporation, the initial directors shall hold an
12organizational meeting, at the call of a majority of the
13directors, to complete the organization of the corporation by
14appointing officers, adopting bylaws, and carrying on any other
15business brought before the meeting.
   16b.  If initial directors are not named in the articles of
17incorporation, the incorporator or incorporators shall hold
18an organizational meeting at the call of a majority of the
19incorporators to do any of the following:
   20(1)  Elect initial directors and complete the organization
21of the corporation.
   22(2)  Elect a board of directors who shall complete the
23organization of the corporation.
   242.  Action required or permitted by this chapter to be taken
25by incorporators at an organizational meeting may be taken
26without a meeting if the action taken is evidenced by one or
27more written consents describing the action taken and signed by
28each incorporator.
   293.  An organizational meeting may be held in or out of this
30state.
31   Sec. 30.  Section 490.206, Code 2020, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.206  Bylaws.
   341.  The incorporators or board of directors of a corporation
35shall adopt initial bylaws for the corporation.
-38-   12.  The bylaws of a corporation may contain any provision
2that is not inconsistent with law or the articles of
3incorporation.
   43.  The bylaws may contain any of the following provisions:
   5a.  A requirement that if the corporation solicits proxies
6or consents with respect to an election of directors, the
7corporation include in its proxy statement and any form
8of its proxy or consent, to the extent and subject to such
9procedures or conditions as are provided in the bylaws, one
10or more individuals nominated by a shareholder in addition to
11individuals nominated by the board of directors.
   12b.  A requirement that the corporation reimburse the expenses
13incurred by a shareholder in soliciting proxies or consents in
14connection with an election of directors, to the extent and
15subject to such procedures and conditions as are provided in
16the bylaws, provided that no bylaw so adopted shall apply to
17elections for which any record date precedes its adoption.
   184.  Notwithstanding section 490.1020, subsection 2,
19paragraph “b”, the shareholders in amending, repealing, or
20adopting a bylaw described in subsection 3 shall not limit the
21authority of the board of directors to amend or repeal any
22condition or procedure set forth in or to add any procedure
23or condition to such a bylaw to provide for a reasonable,
24practical, and orderly process.
25   Sec. 31.  Section 490.207, Code 2020, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.207  Emergency bylaws.
   281.  Unless the articles of incorporation provide otherwise,
29the board of directors may adopt bylaws to be effective only in
30an emergency as defined in subsection 4. The emergency bylaws,
31which are subject to amendment or repeal by the shareholders,
32may make all provisions necessary for managing the corporation
33during the emergency, including any of the following:
   34a.  Procedures for calling a meeting of the board of
35directors.
-39-   1b.  Quorum requirements for the meeting.
   2c.  Designation of additional or substitute directors.
   32.  All provisions of the regular bylaws not inconsistent
4with the emergency bylaws remain effective during the
5emergency. The emergency bylaws are not effective after the
6emergency ends.
   73.  Corporate action taken in good faith in accordance with
8the emergency bylaws has all of the following effects:
   9a.  The action binds the corporation.
   10b.  The action shall not be used to impose liability on a
11director, officer, employee, or agent of the corporation.
   124.  An emergency exists for purposes of this section if a
13quorum of the board of directors cannot readily be assembled
14because of some catastrophic event.
15   Sec. 32.  NEW SECTION.  490.208  Forum selection provisions.
   161.  The articles of incorporation or bylaws may require
17that any or all internal corporate claims shall be brought
18exclusively in any specified court or courts of this state
19and, if so specified, in any additional courts in this state
20or in any other jurisdictions with which the corporation has a
21reasonable relationship.
   222.  A provision of the articles of incorporation or bylaws
23adopted under subsection 1 shall not have the effect of
24conferring jurisdiction on any court or over any person or
25claim, and shall not apply if none of the courts specified
26by such provision has the requisite personal and subject
27matter jurisdiction. If the court or courts of this state
28specified in a provision adopted under subsection 1 do not
29have the requisite personal and subject matter jurisdiction
30and another court of this state does have such jurisdiction,
31then the internal corporate claim may be brought in such other
32court of this state, notwithstanding that such other court
33of this state is not specified in such provision, and in any
34other court specified in such provision that has the requisite
35jurisdiction.
-40-   13.  No provision of the articles of incorporation or bylaws
2may prohibit bringing an internal corporate claim in the
3courts of this state or require such claims to be determined
4by arbitration.
   54.  “Internal corporate claim” means, for the purposes of
6this section, any of the following:
   7a.  Any claim that is based upon a violation of a duty
8under the laws of this state by a current or former director,
9officer, or shareholder in such capacity.
   10b.  Any derivative action or proceeding brought on behalf of
11the corporation.
   12c.  Any action asserting a claim arising pursuant to any
13provision of this chapter or the articles of incorporation or
14bylaws.
   15d.  Any action asserting a claim governed by the internal
16affairs doctrine that is not included in paragraphs “a” through
17“c”.
18   Sec. 33.  Section 490.302, Code 2020, is amended by striking
19the section and inserting in lieu thereof the following:
   20490.302  General powers.
   21Unless its articles of incorporation provide otherwise,
22every corporation has perpetual duration and succession in its
23corporate name and has the same powers as an individual to do
24all things necessary or convenient to carry out its business
25and affairs, including the power to do all of the following:
   261.  Sue and be sued, complain, and defend in its corporate
27name.
   282.  Have a corporate seal, which may be altered at will, and
29to use it, or a facsimile of it, by impressing or affixing it or
30in any other manner reproducing it.
   313.  Make and amend bylaws, not inconsistent with its articles
32of incorporation or with the laws of this state, for managing
33the business and regulating the affairs of the corporation.
   344.  Purchase, receive, lease, or otherwise acquire, and own,
35hold, improve, use, and otherwise deal with, real or personal
-41-1property, or any legal or equitable interest in property,
2wherever located.
   35.  Sell, convey, mortgage, pledge, lease, exchange, and
4otherwise dispose of all or any part of its property.
   56.  Purchase, receive, subscribe for, or otherwise acquire,
6own, hold, vote, use, sell, mortgage, lend, pledge, or
7otherwise dispose of, and deal in and with shares or other
8interests in, or obligations of, any other entity.
   97.  Make contracts and guarantees, incur liabilities,
10borrow money, issue its notes, bonds, and other securities
11and obligations, which may be convertible into or include the
12option to purchase other securities of the corporation, and
13secure any of its obligations by mortgage or pledge of any of
14its property, franchises, or income.
   158.  Lend money, invest and reinvest its funds, and receive
16and hold real and personal property as security for repayment.
   179.  Be a promoter, partner, member, associate, or manager of
18any partnership, joint venture, trust, or other entity.
   1910.  Conduct its business, locate offices, and exercise the
20powers granted by this chapter within or without this state.
   2111.  Elect directors and appoint officers, employees, and
22agents of the corporation, define their duties, fix their
23compensation, and lend them money and credit.
   2412.  Pay pensions and establish pension plans, pension
25trusts, profit sharing plans, share bonus plans, share option
26plans, and benefit or incentive plans for any or all of its
27current or former directors, officers, employees, and agents.
   2813.  Make donations for the public welfare or for charitable,
29scientific, or educational purposes.
   3014.  Transact any lawful business that will aid governmental
31policy.
   3215.  Make payments or donations, or do any other act, not
33inconsistent with law, that furthers the business and affairs
34of the corporation.
35   Sec. 34.  Section 490.303, Code 2020, is amended by striking
-42-1the section and inserting in lieu thereof the following:
   2490.303  Emergency powers.
   31.  In anticipation of or during an emergency as defined in
4subsection 4, the board of directors of a corporation may do
5all of the following:
   6a.  Modify lines of succession to accommodate the incapacity
7of any director, officer, employee, or agent.
   8b.  Relocate the principal office, designate alternative
9principal offices or regional offices, or authorize the
10officers to do so.
   112.  During an emergency as defined in subsection 4, unless
12emergency bylaws provide otherwise:
   13a.  Notice of a meeting of the board of directors need be
14given only to those directors whom it is practicable to reach
15and may be given in any practicable manner.
   16b.  One or more officers of the corporation present at a
17meeting of the board of directors may be deemed to be directors
18for the meeting, in order of rank and within the same rank in
19order of seniority, as necessary to achieve a quorum.
   203.  Corporate action taken in good faith during an emergency
21under this section to further the ordinary business affairs of
22the corporation shall both:
   23a.  Bind the corporation.
   24b.  Not be used to impose liability on a corporate director,
25officer, employee, or agent.
   264.  An emergency exists for purposes of this section if a
27quorum of the board of directors cannot readily be assembled
28because of some catastrophic event.
29   Sec. 35.  Section 490.401, Code 2020, is amended by striking
30the section and inserting in lieu thereof the following:
   31490.401  Corporate name.
   321.  A corporate name is subject to all of the following:
   33a.  It must contain the word “corporation”, “incorporated”,
34“company”, or “limited”, or the abbreviation “corp.”, “inc.”,
35“co.”, or “ltd.”, or words or abbreviations of like import in
-43-1another language.
   2b.  It must not contain language stating or implying that
3the corporation is organized for a purpose other than that
4permitted by section 490.301 and its articles of incorporation.
   52.  Except as authorized by subsections 3 and 4, a corporate
6name must be distinguishable upon the records of the secretary
7of state from all of the following:
   8a.  The corporate name of a corporation incorporated in
9this state which is not administratively dissolved, or if such
10corporation has been administratively dissolved, within five
11years after the effective date of dissolution.
   12b.  A corporate name reserved or registered under section
13490.402 or 490.403 or any similar provision of the law of this
14state.
   15c.  The name of a foreign corporation registered to do
16business in this state or an alternate name adopted by a
17foreign corporation registered to do business in this state
18because its corporate name is unavailable.
   19d.  The corporate name of a nonprofit corporation
20incorporated in this state which is not administratively
21dissolved.
   22e.  The name of a foreign nonprofit corporation registered
23to do business in this state or an alternate name adopted by a
24foreign nonprofit corporation registered to conduct activities
25in this state because its real name is unavailable.
   26f.  The name of a domestic filing entity which is not
27administratively dissolved.
   28g.  The name of a foreign unincorporated entity registered
29to do business in this state or an alternate name adopted by
30such an entity registered to conduct activities in this state
31because its real name is unavailable.
   32h.  A name reserved, registered, or protected as follows:
   33(1)  For a limited liability partnership, section 486A.1001
34or 486A.1002.
   35(2)  For a limited partnership, section 488.108, 488.109, or
-44-1488.810.
   2(3)  For a business corporation, this section, or section
3490.402, 490.403, or 490.1422.
   4(4)  For a limited liability company under chapter 489,
5section 489.108, 489.109, or 489.706.
   6(5)  For a nonprofit corporation, section 504.401, 504.402,
7504.403, or 504.1423.
   83.  A corporation may apply to the secretary of state for
9authorization to use a name that is not distinguishable upon
10the secretary of state’s records from one or more of the names
11described in subsection 2. The secretary of state shall
12authorize use of the name applied for if any of the following
13conditions apply:
   14a.  The other corporation or unincorporated entity consents
15to the use in writing and submits an undertaking in form
16satisfactory to the secretary of state to change its name to a
17name that is distinguishable upon the records of the secretary
18of state from the name of the applying corporation.
   19b.  The applicant delivers to the secretary of state a
20certified copy of the final judgment of a court of competent
21jurisdiction establishing the applicant’s right to use the name
22applied for in this state.
   234.  A corporation may use the name, including the fictitious
24name, of another domestic or foreign corporation that is used
25in this state if the other corporation is incorporated or
26authorized to transact business in this state and the proposed
27user corporation submits documentation to the satisfaction
28of the secretary of state establishing any of the following
29conditions:
   30a.  Has merged with the other corporation.
   31b.  Has been formed by reorganization of the other
32corporation.
   33c.  Has acquired all or substantially all of the assets,
34including the corporate name, of the other corporation.
   355.  This chapter does not control the use of fictitious
-45-1names; however, if a corporation or a foreign corporation
2uses a fictitious name in this state, it shall deliver to the
3secretary of state for filing a copy of the resolution of its
4board of directors, certified by its secretary, adopting the
5fictitious name.
6   Sec. 36.  Section 490.402, Code 2020, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.402  Reserved name.
   91.  A person may reserve the exclusive use of a corporate
10name, including a fictitious or alternate name for a foreign
11corporation whose corporate name is not available, by
12delivering an application to the secretary of state for
13filing. The application must set forth the name and address
14of the applicant and the name proposed to be reserved. If the
15secretary of state finds that the corporate name applied for is
16available, the secretary of state shall reserve the name for
17the applicant’s exclusive use for a nonrenewable one hundred
18twenty-day period.
   192.  The owner of a reserved corporate name may transfer the
20reservation to another person by delivering to the secretary of
21state a signed notice of the transfer that states the name and
22address of the transferee.
23   Sec. 37.  Section 490.403, Code 2020, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.403  Registered name.
   261.  A foreign corporation may register its corporate
27name, or its corporate name with the addition of any word
28or abbreviation listed in section 490.401, subsection 1,
29paragraph “a”, if necessary for the corporate name to comply
30with section 490.401, subsection 1, paragraph “a”, if the name
31is distinguishable upon the records of the secretary of state
32from the corporate names that are not available under section
33490.401, subsection 2.
   342.  A foreign corporation registers its corporate name, or
35its corporate name with any addition permitted by subsection
-46-11, by delivering to the secretary of state for filing an
2application that complies with all of the following:
   3a.  Sets forth that name, the state or country and date of
4its incorporation, and a brief description of the nature of the
5business which is to be conducted in this state.
   6b.  Is accompanied by a certificate of existence, or a
7document of similar import, from the state or country of
8incorporation.
   93.  The name is registered for the applicant’s exclusive
10use upon the effective date of the application and for the
11remainder of the calendar year, unless renewed.
   124.  A foreign corporation whose name registration is
13effective may renew it for successive years by delivering
14to the secretary of state for filing a renewal application,
15which complies with the requirements of subsection 2, between
16October 1 and December 31 of the preceding year. The renewal
17application when filed renews the registration for the
18following calendar year.
   195.  a.  A foreign corporation whose name registration is
20effective may thereafter do any of the following:
   21(1)  Register to do business as a foreign corporation under
22the registered name, if it complies with section 490.401,
23subsection 1, paragraph “b”.
   24(2)  Consent in writing to the use of that name by a domestic
25corporation thereafter incorporated under this chapter or by
26another foreign corporation.
   27b.  The registration terminates when the domestic corporation
28is incorporated or the foreign corporation registers to do
29business under that name.
30   Sec. 38.  Section 490.501, Code 2020, is amended by striking
31the section and inserting in lieu thereof the following:
   32490.501  Registered office and agent of domestic and
33registered foreign corporations.
   341.  Each corporation shall continuously maintain in this
35state all of the following:
-47-   1a.  A registered office that may be the same as any of its
2places of business.
   3b.  A registered agent, which may be any of the following:
   4(1)  An individual who resides in this state and whose
5business office is identical with the registered office.
   6(2)  A domestic or foreign corporation or eligible entity
7whose business office is identical with the registered office
8and, in the case of a foreign corporation or foreign eligible
9entity, is registered to do business in this state.
   102.  As used in this subchapter, “corporation” means both a
11domestic corporation and a registered foreign corporation.
12   Sec. 39.  Section 490.502, Code 2020, is amended by striking
13the section and inserting in lieu thereof the following:
   14490.502  Change of registered office or registered agent.
   151.  A corporation may change its registered office or
16registered agent by delivering to the secretary of state
17for filing a statement of change that sets forth all of the
18following:
   19a.  The name of the corporation.
   20b.  The street and mailing addresses of its current
21registered office.
   22c.  If the current registered office is to be changed, the
23street and mailing addresses of the new registered office.
   24d.  The name of its current registered agent.
   25e.  If the current registered agent is to be changed, the
26name of the new registered agent and the new agent’s written
27consent, either on the statement or attached to it, to the
28appointment.
   29f.  That after the change or changes are made, the street and
30mailing addresses of its registered office and of the business
31office of its registered agent will be identical.
   322.  If the street or mailing address of a registered agent’s
33business office changes, the agent shall change the street or
34mailing address of the registered office of any corporation for
35which the agent is the registered agent by delivering a signed
-48-1written notice of the change to the corporation and delivering
2to the secretary of state for filing a signed statement that
3complies with the requirements of subsection 1 and states that
4the corporation has been notified of the change.
   53.  If a registered agent changes the registered agent’s
6business address to another place, the registered agent may
7change the business address and the address of the registered
8agent by filing a statement as required in subsection 2 for
9each corporation, or a single statement for all corporations
10named in the notice, except that it need be signed only by the
11registered agent and need not be responsive to subsection 1,
12paragraph “e”, and must recite that a copy of the statement has
13been mailed to each corporation named in the notice.
   144.  A corporation may also change its registered office or
15registered agent in its biennial report as provided in section
16490.1622.
17   Sec. 40.  Section 490.503, Code 2020, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.503  Resignation of registered agent.
   201.  A registered agent may resign as agent for a corporation
21by delivering to the secretary of state for filing a statement
22of resignation signed by the agent which shall state all of the
23following:
   24a.  The name of the corporation.
   25b.  The name of the agent.
   26c.  The agent resigns from serving as registered agent for
27the corporation.
   28d.  The address of the corporation to which the agent will
29deliver the notice required by subsection 3.
   302.  A statement of resignation takes effect on the earlier
31of the following:
   32a.  12:01 a.m.on the thirty-first day after the day on which
33it is filed by the secretary of state.
   34b.  The designation of a new registered agent for the
35corporation.
-49-   13.  A registered agent promptly shall deliver to the
2corporation notice of the date on which a statement of
3resignation was delivered to the secretary of state for filing.
   44.  When a statement of resignation takes effect, the person
5that resigned ceases to have responsibility under this chapter
6for any matter thereafter tendered to it as agent for the
7corporation. The resignation does not affect any contractual
8rights the corporation has against the agent or that the agent
9has against the corporation.
   105.  A registered agent may resign with respect to a
11corporation regardless of whether the corporation is in good
12standing.
13   Sec. 41.  Section 490.504, Code 2020, is amended by striking
14the section and inserting in lieu thereof the following:
   15490.504  Service on corporation.
   161.  A corporation’s registered agent is the corporation’s
17agent for service of process, notice, or demand required or
18permitted by law to be served on the corporation.
   192.  If a corporation has no registered agent, or the agent
20cannot with reasonable diligence be served, the corporation
21may be served by registered or certified mail, return receipt
22requested, addressed to the secretary at the corporation’s
23principal office. Service is perfected under this subsection
24at the earliest of the following:
   25a.  The date the corporation receives the mail.
   26b.  The date shown on the return receipt, if signed on behalf
27of the corporation.
   28c.  Five days after its deposit in the United States mail,
29as evidenced by the postmark, if mailed postpaid and correctly
30addressed.
   313.  a.  The secretary of state shall be an agent of the
32corporation upon whom process, notice, or demand may be served,
33if any of the following applies:
   34(1)  The process, notice, or demand cannot be served on a
35corporation pursuant to subsection 1 or 2.
-50-   1(2)  The process, notice, or demand is to be served on
2a registered foreign corporation that has withdrawn its
3registration pursuant to section 490.1507 or 490.1509, or the
4registration of which has been terminated pursuant to section
5490.1511.
   6b.  Service of any process, notice, or demand on the
7secretary of state as agent for a corporation may be made by
8delivering to the secretary of state duplicate copies of the
9process, notice, or demand. If process, notice, or demand
10is served on the secretary of state, the secretary of state
11shall forward one of the copies by registered or certified
12mail, return receipt requested, to the corporation at the
13last address shown in the records of the secretary of state.
14Service is effected under this subsection at the earliest of
15the following:
   16(1)  The date the corporation receives the process, notice,
17or demand.
   18(2)  The date shown on the return receipt, if signed on
19behalf of the corporation.
   20(3)  Five days after the process, notice, or demand is
21deposited with the United States mail by the secretary of
22state.
   234.  This section does not prescribe the only means, or
24necessarily the required means, of serving a corporation.
25   Sec. 42.  Section 490.601, Code 2020, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.601  Authorized shares.
   281.  The articles of incorporation must set forth any classes
29of shares and series of shares within a class, and the number
30of shares of each class and series, that the corporation is
31authorized to issue. If more than one class or series of
32shares is authorized, the articles of incorporation must
33prescribe a distinguishing designation for each class or series
34and, before the issuance of shares of a class or series,
35describe the terms, including the preferences, rights, and
-51-1limitations of that class or series. Except to the extent
2varied as permitted by this section, all shares of a class or
3series must have terms, including preferences, rights, and
4limitations that are identical with those of other shares of
5the same class or series.
   62.  The articles of incorporation must authorize all of the
7following:
   8a.  One or more classes or series of shares that together
9have full voting rights.
   10b.  One or more classes or series of shares, which may be
11the same class, classes, or series as those with voting rights,
12that together are entitled to receive the net assets of the
13corporation upon dissolution.
   143.  The articles of incorporation may authorize one or more
15classes or series of shares that have any of the following
16characteristics:
   17a.  Have special, conditional, or limited voting rights, or
18no right to vote, except to the extent otherwise provided by
19this chapter.
   20b.  Are redeemable or convertible as specified in the
21articles of incorporation in any of the following ways:
   22(1)  At the option of the corporation, the shareholder, or
23another person or upon the occurrence of a specified event.
   24(2)  For cash, indebtedness, securities, or other property.
   25(3)  At prices and in amounts specified or determined in
26accordance with a formula.
   27c.  Entitle the holders to distributions calculated in
28any manner, including dividends that may be cumulative,
29noncumulative, or partially cumulative.
   30d.  Have preference over any other class or series of shares
31with respect to distributions, including distributions upon the
32dissolution of the corporation.
   334.  The terms of shares may be made dependent upon facts
34objectively ascertainable outside the articles of incorporation
35in accordance with section 490.120, subsection 11.
-52-   15.  Any of the terms of shares may vary among holders of the
2same class or series so long as such variations are expressly
3set forth in the articles of incorporation.
   46.  The description of the preferences, rights, and
5limitations of classes or series of shares in subsection 3 is
6not exhaustive.
7   Sec. 43.  Section 490.602, Code 2020, is amended by striking
8the section and inserting in lieu thereof the following:
   9490.602  Terms of class or series determined by board of
10directors.
   111.  If the articles of incorporation so provide, the board
12of directors is authorized, without shareholder approval, to
13do any of the following:
   14a.  Classify any unissued shares into one or more classes or
15into one or more series within a class.
   16b.  Reclassify any unissued shares of any class into one
17or more classes or into one or more series within one or more
18classes.
   19c.  Reclassify any unissued shares of any series of any class
20into one or more classes or into one or more series within a
21class.
   222.  If the board of directors acts pursuant to subsection
231, it shall determine the terms, including the preferences,
24rights, and limitations, to the same extent permitted under
25section 490.601, of any of the following:
   26a.  Any class of shares before the issuance of any shares of
27that class.
   28b.  Any series within a class before the issuance of any
29shares of that series.
   303.  Before issuing any shares of a class or series created
31under this section, the corporation shall deliver to the
32secretary of state for filing articles of amendment setting
33forth the terms determined under subsection 1.
34   Sec. 44.  Section 490.603, Code 2020, is amended by striking
35the section and inserting in lieu thereof the following:
-53-   1490.603  Issued and outstanding shares.
   21.  A corporation may issue the number of shares of each
3class or series authorized by the articles of incorporation.
4Shares that are issued are outstanding shares until they are
5reacquired, redeemed, converted, or canceled.
   62.  The reacquisition, redemption, or conversion of
7outstanding shares is subject to the limitations of subsection
83 and to section 490.640.
   93.  At all times that shares of the corporation are
10outstanding, one or more shares that together have full voting
11rights and one or more shares that together are entitled to
12receive the net assets of the corporation upon dissolution must
13be outstanding.
14   Sec. 45.  Section 490.604, Code 2020, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.604  Fractional shares.
   171.  A corporation may issue fractions of a share or in lieu
18of doing so may do any of the following:
   19a.  Pay in cash the value of fractions of a share.
   20b.  Issue scrip in registered or bearer form entitling the
21holder to receive a full share upon surrendering enough scrip
22to equal a full share.
   23c.  Arrange for disposition of fractional shares by the
24holders of such shares.
   252.  Each certificate representing scrip must be
26conspicuously labeled “scrip” and must contain the information
27required by section 490.625, subsection 2.
   283.  The holder of a fractional share is entitled to exercise
29the rights of a shareholder, including the rights to vote,
30to receive dividends, and to receive distributions upon
31dissolution. The holder of scrip is not entitled to any of
32these rights unless the scrip provides for them.
   334.  The board of directors may authorize the issuance of
34scrip subject to any condition, including any of the following:
   35a.  That the scrip will become void if not exchanged for full
-54-1shares before a specified date.
   2b.  That the shares for which the scrip is exchangeable may
3be sold and the proceeds paid to the scripholders.
4   Sec. 46.  Section 490.620, Code 2020, is amended by striking
5the section and inserting in lieu thereof the following:
   6490.620  Subscription for shares before incorporation.
   71.  A subscription for shares entered into before
8incorporation is irrevocable for six months unless the
9subscription agreement provides a longer or shorter period or
10all the subscribers agree to revocation.
   112.  The board of directors may determine the payment terms
12of subscriptions for shares that were entered into before
13incorporation, unless the subscription agreement specifies
14them. A call for payment by the board of directors must be
15uniform so far as practicable as to all shares of the same
16class or series, unless the subscription agreement specifies
17otherwise.
   183.  Shares issued pursuant to subscriptions entered into
19before incorporation are fully paid and nonassessable when
20the corporation receives the consideration specified in the
21subscription agreement.
   224.  If a subscriber defaults in payment of cash or
23property under a subscription agreement entered into before
24incorporation, the corporation may collect the amount owed
25as any other debt. Alternatively, unless the subscription
26agreement provides otherwise, the corporation may rescind the
27agreement and may sell the shares if the debt remains unpaid
28for more than twenty days after the corporation delivers a
29written demand for payment to the subscriber.
   305.  A subscription agreement entered into after
31incorporation is a contract between the subscriber and the
32corporation subject to section 490.621.
33   Sec. 47.  Section 490.621, Code 2020, is amended by striking
34the section and inserting in lieu thereof the following:
   35490.621  Issuance of shares.
-55-   11.  The powers granted in this section to the board of
2directors may be reserved to the shareholders by the articles
3of incorporation.
   42.  The board of directors may authorize shares to be issued
5for consideration consisting of any tangible or intangible
6property or benefit to the corporation, including cash,
7promissory notes, services performed, contracts for services to
8be performed, or other securities of the corporation.
   93.  Before the corporation issues shares, the board of
10directors shall determine that the consideration received or
11to be received for shares to be issued is adequate. That
12determination by the board of directors is conclusive insofar
13as the adequacy of consideration for the issuance of shares
14relates to whether the shares are validly issued, fully paid,
15and nonassessable.
   164.  When the corporation receives the consideration for
17which the board of directors authorized the issuance of shares,
18the shares issued therefor are fully paid and nonassessable.
   195.  The corporation may place in escrow shares issued for
20a contract for future services or benefits or a promissory
21note, or make other arrangements to restrict the transfer of
22the shares, and may credit distributions in respect of the
23shares against their purchase price, until the services are
24performed, the benefits are received, or the note is paid. If
25the services are not performed, the benefits are not received,
26or the note is not paid, the shares escrowed or restricted and
27the distributions credited may be canceled in whole or part.
   286.  a.  An issuance of shares or other securities convertible
29into or rights exercisable for shares in a transaction or
30a series of integrated transactions requires approval of
31the shareholders, at a meeting at which a quorum consisting
32of a majority, or such greater number as the articles of
33incorporation may prescribe, of the votes entitled to be cast
34on the matter exists, if all of the following conditions are
35satisfied:
-56-   1(1)  The shares, other securities, or rights are to be issued
2for consideration other than cash or cash equivalents.
   3(2)  The voting power of shares that are issued and issuable
4as a result of the transaction or series of integrated
5transactions will comprise more than twenty percent of the
6voting power of the shares of the corporation that were
7outstanding immediately before the transaction.
   8b.  For purposes of this subsection, the following shall
9apply:
   10(1)  For purposes of determining the voting power of shares
11issued and issuable as a result of a transaction or series of
12integrated transactions, the voting power of shares or other
13securities convertible into or rights exercisable for shares
14shall be the greater of the following:
   15(a)  The voting power of the shares to be issued.
   16(b)  The voting power of the shares that would be outstanding
17after giving effect to the conversion of convertible shares and
18other securities and the exercise of rights to be issued.
   19(2)  A series of transactions is integrated only if
20consummation of one transaction is made contingent on
21consummation of one or more of the other transactions.
22   Sec. 48.  Section 490.622, Code 2020, is amended by striking
23the section and inserting in lieu thereof the following:
   24490.622  Liability of shareholders.
   251.  A purchaser from a corporation of the corporation’s own
26shares is not liable to the corporation or its creditors with
27respect to the shares except to pay the consideration for which
28the shares were authorized to be issued or specified in the
29subscription agreement.
   302.  A shareholder of a corporation is not personally liable
31for any liabilities of the corporation, including liabilities
32arising from acts of the corporation, subject to the following
33exceptions:
   34a.  To the extent provided in a provision of the articles
35of incorporation permitted by section 490.202, subsection 2,
-57-1paragraph “b”, subparagraph (5).
   2b.  A shareholder may become personally liable by reason of
3the shareholder’s own acts or conduct.
4   Sec. 49.  Section 490.623, Code 2020, is amended by striking
5the section and inserting in lieu thereof the following:
   6490.623  Share dividends.
   71.  Unless the articles of incorporation provide otherwise,
8shares may be issued pro rata and without consideration to the
9corporation’s shareholders or to the shareholders of one or
10more classes or series of shares. An issuance of shares under
11this subsection is a share dividend.
   122.  Shares of one class or series shall not be issued as a
13share dividend in respect of shares of another class or series
14unless one or more of the following conditions are met:
   15a.  The articles of incorporation so authorize.
   16b.  A majority of the votes entitled to be cast by the class
17or series to be issued approve the issue.
   18c.  There are no outstanding shares of the class or series
19to be issued.
   203.  The board of directors may fix the record date for
21determining shareholders entitled to a share dividend, which
22date shall not be retroactive. If the board of directors does
23not fix the record date for determining shareholders entitled
24to a share dividend, the record date is the date the board of
25directors authorizes the share dividend.
26   Sec. 50.  Section 490.624, Code 2020, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.624  Share rights, options, warrants, and awards.
   291.  A corporation may issue rights, options, or warrants for
30the purchase of shares or other securities of the corporation.
31The board of directors shall determine the terms and conditions
32upon which the rights, options, or warrants are issued and the
33terms, including the consideration for which the shares or
34other securities are to be issued. The authorization by the
35board of directors for the corporation to issue such rights,
-58-1options, or warrants constitutes authorization of the issuance
2of the shares or other securities for which the rights,
3options, or warrants are exercisable.
   42.  The terms and conditions of such rights, options, or
5warrants may include restrictions or conditions that do any of
6the following:
   7a.  Preclude or limit the exercise, transfer, or receipt
8of such rights, options, or warrants by any person or
9persons owning or offering to acquire a specified number or
10percentage of the outstanding shares or other securities of the
11corporation or by any transferee or transferees of any such
12person or persons.
   13b.  Invalidate or void such rights, options, or warrants
14held by any such person or persons or any such transferee or
15transferees.
   163.  The board of directors may authorize one or more officers
17to do any of the following:
   18a.  Designate the recipients of rights, options, warrants,
19or other equity compensation awards that involve the issuance
20of shares.
   21b.  Determine, within an amount and subject to any other
22limitations established by the board of directors and, if
23applicable, the shareholders, the number of such rights,
24options, warrants, or other equity compensation awards and
25the terms of such rights, options, warrants, or awards to be
26received by the recipients, provided that an officer shall
27not use such authority to designate the officer or any other
28persons as the board of directors may specify as a recipient of
29such rights, options, warrants, or other equity compensation
30awards.
31   Sec. 51.  Section 490.625, Code 2020, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.625  Form and content of certificates.
   341.  Shares may, but need not, be represented by certificates.
35Unless this chapter or another statute expressly provides
-59-1otherwise, the rights and obligations of shareholders are
2identical regardless of whether their shares are represented by
3certificates.
   42.  At a minimum, each share certificate must state on its
5face all of the following:
   6a.  The name of the corporation and that it is organized
7under the law of this state.
   8b.  The name of the person to whom issued.
   9c.  The number and class of shares and the designation of the
10series, if any, the certificate represents.
   113.  a.  If the corporation is authorized to issue different
12classes of shares or series of shares within a class, the
13front or back of each certificate must summarize all of the
14following:
   15(1)  The preferences, rights, and limitations applicable to
16each class and series.
   17(2)  Any variations in preferences, rights, and limitations
18among the holders of the same class or series.
   19(3)  The authority of the board of directors to determine the
20terms of future classes or series.
   21b.  Alternatively, each certificate may state conspicuously
22on its front or back that the corporation will furnish the
23shareholder this information on request in writing and without
24charge.
   254.  Each share certificate must be signed by two officers
26designated in the bylaws.
   275.  If the person who signed a share certificate no longer
28holds office when the certificate is issued, the certificate
29is nevertheless valid.
30   Sec. 52.  Section 490.626, Code 2020, is amended by striking
31the section and inserting in lieu thereof the following:
   32490.626  Shares without certificates.
   331.  Unless the articles of incorporation or bylaws provide
34otherwise, the board of directors of a corporation may
35authorize the issuance of some or all of the shares of any
-60-1or all of its classes or series without certificates. The
2authorization does not affect shares already represented by
3certificates until they are surrendered to the corporation.
   42.  Within a reasonable time after the issuance or transfer
5of shares without certificates, the corporation shall deliver
6to the shareholder a written statement of the information
7required on certificates by section 490.625, subsections 2 and
83, and, if applicable, section 490.627.
9   Sec. 53.  Section 490.627, Code 2020, is amended by striking
10the section and inserting in lieu thereof the following:
   11490.627  Restriction on transfer of shares.
   121.  The articles of incorporation, the bylaws, an agreement
13among shareholders, or an agreement between shareholders
14and the corporation may impose restrictions on the transfer
15or registration of transfer of shares of the corporation.
16A restriction does not affect shares issued before the
17restriction was adopted unless the holders of the shares are
18parties to the restriction agreement or voted in favor of the
19restriction.
   202.  A restriction on the transfer or registration of transfer
21of shares is valid and enforceable against the holder or a
22transferee of the holder if the restriction is authorized
23by this section and its existence is noted conspicuously
24on the front or back of the certificate or is contained
25in the information statement required by section 490.626,
26subsection 2. Unless so noted, or contained, a restriction
27is not enforceable against a person without knowledge of the
28restriction.
   293.  A restriction on the transfer or registration of transfer
30of shares is authorized for any of the following purposes:
   31a.  To maintain the corporation’s status when it is dependent
32on the number or identity of its shareholders.
   33b.  To preserve exemptions under federal or state securities
34law.
   35c.  For any other reasonable purpose.
-61-   14.  A restriction on the transfer or registration of transfer
2of shares may do any of the following:
   3a.  Obligate the shareholder first to offer the corporation
4or other persons, separately, consecutively, or simultaneously,
5an opportunity to acquire the restricted shares.
   6b.  Obligate the corporation or other persons, separately,
7consecutively, or simultaneously, to acquire the restricted
8shares.
   9c.  Require the corporation, the holders of any class or
10series of its shares, or other persons to approve the transfer
11of the restricted shares, if the requirement is not manifestly
12unreasonable.
   13d.  Prohibit the transfer of the restricted shares to
14designated persons or classes of persons, if the prohibition
15is not manifestly unreasonable.
   165.  As used in this section, “shares” includes a security
17convertible into or carrying a right to subscribe for or
18acquire shares.
19   Sec. 54.  Section 490.630, Code 2020, is amended by striking
20the section and inserting in lieu thereof the following:
   21490.630  Shareholders’ preemptive rights.
   221.  The shareholders of a corporation do not have a
23preemptive right to acquire the corporation’s unissued shares
24except to the extent the articles of incorporation so provide.
   252.  A statement included in the articles of incorporation
26that “the corporation elects to have preemptive rights”, or
27words of similar effect, means that the following principles
28apply except to the extent the articles of incorporation
29expressly provide otherwise:
   30a.  The shareholders of the corporation have a preemptive
31right, granted on uniform terms and conditions prescribed
32by the board of directors to provide a fair and reasonable
33opportunity to exercise the right, to acquire proportional
34amounts of the corporation’s unissued shares upon the decision
35of the board of directors to issue them.
-62-   1b.  A preemptive right may be waived by a shareholder. A
2waiver evidenced by a writing is irrevocable even though it is
3not supported by consideration.
   4c.  There is no preemptive right with respect to any of the
5following:
   6(1)  Shares issued as compensation to directors, officers,
7employees, or agents of the corporation, its subsidiaries, or
8its affiliates.
   9(2)  Shares issued to satisfy conversion or option rights
10created to provide compensation to directors, officers,
11employees, or agents of the corporation, its subsidiaries, or
12its affiliates.
   13(3)  Shares authorized in the articles of incorporation
14that are issued within six months from the effective date of
15incorporation.
   16(4)  Shares sold otherwise than for cash.
   17d.  Holders of shares of any class or series without voting
18power but with preferential rights to distributions have no
19preemptive rights with respect to shares of any class or
20series.
   21e.  Holders of shares of any class or series with voting
22power but without preferential rights to distributions have no
23preemptive rights with respect to shares of any class or series
24with preferential rights to distributions unless the shares
25with preferential rights are convertible into or carry a right
26to subscribe for or acquire the shares without preferential
27rights.
   28f.  Shares subject to preemptive rights that are not acquired
29by shareholders may be issued to any person for a period of one
30year after being offered to shareholders at a consideration
31set by the board of directors that is not lower than the
32consideration set for the exercise of preemptive rights. An
33offer at a lower consideration or after the expiration of one
34year is subject to the shareholders’ preemptive rights.
   353.  As used in this section, “shares” includes a security
-63-1convertible into or carrying a right to subscribe for or
2acquire shares.
3   Sec. 55.  Section 490.640, Code 2020, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.640  Distribution to shareholders.
   61.  A board of directors may authorize and the corporation
7may make distributions to its shareholders subject to
8restriction by the articles of incorporation and the limitation
9in subsection 3.
   102.  The board of directors may fix the record date for
11determining shareholders entitled to a distribution, which
12date shall not be retroactive. If the board of directors does
13not fix a record date for determining shareholders entitled
14to a distribution, other than one involving a purchase,
15redemption, or other acquisition of the corporation’s shares,
16the record date is the date the board of directors authorizes
17the distribution.
   183.  A distribution shall not be made if, after giving it
19effect, any of the following would result:
   20a.  The corporation would not be able to pay its debts as
21they become due in the usual course of business.
   22b.  The corporation’s total assets would be less than
23the sum of its total liabilities plus, unless the articles
24of incorporation permit otherwise, the amount that would be
25needed, if the corporation were to be dissolved at the time
26of the distribution, to satisfy the preferential rights upon
27dissolution of shareholders whose preferential rights are
28superior to those receiving the distribution.
   294.  The board of directors may base a determination
30that a distribution is not prohibited under subsection 3
31either on financial statements prepared on the basis of
32accounting practices and principles that are reasonable in the
33circumstances or on a fair valuation or other method that is
34reasonable in the circumstances.
   355.  Except as provided in subsection 7, the effect of a
-64-1distribution under subsection 3 is measured as follows:
   2a.  In the case of distribution by purchase, redemption,
3or other acquisition of the corporation’s shares, as of the
4earlier of the following:
   5(1)  The date cash or other property is transferred or debt
6to a shareholder is incurred by the corporation.
   7(2)  The date the shareholder ceases to be a shareholder with
8respect to the acquired shares.
   9b.  In the case of any other distribution of indebtedness, as
10of the date the indebtedness is distributed.
   11c.  In all other cases, as of the following:
   12(1)  The date the distribution is authorized if the payment
13occurs within one hundred twenty days after the date of
14authorization.
   15(2)  The date the payment is made if it occurs more than one
16hundred twenty days after the date of authorization.
   176.  A corporation’s indebtedness to a shareholder incurred
18by reason of a distribution made in accordance with this
19section is at parity with the corporation’s indebtedness to its
20general, unsecured creditors except to the extent subordinated
21by agreement.
   227.  Indebtedness of a corporation, including indebtedness
23issued as a distribution, is not considered a liability for
24purposes of determinations under subsection 3 if its terms
25provide that payment of principal and interest are made
26only if and to the extent that payment of a distribution to
27shareholders could then be made under this section. If such
28indebtedness is issued as a distribution, each payment of
29principal or interest is treated as a distribution, the effect
30of which is measured on the date the payment is actually made.
   318.  This section shall not apply to distributions in
32liquidation under subchapter XIV.
33   Sec. 56.  Section 490.701, Code 2020, is amended by striking
34the section and inserting in lieu thereof the following:
   35490.701  Annual meeting.
-65-   11.  Unless directors are elected by written consent in
2lieu of an annual meeting as permitted by section 490.704, a
3corporation shall hold a meeting of shareholders annually, at a
4time stated in or fixed in accordance with the bylaws, at which
5directors shall be elected.
   62.  Unless the board of directors determines to hold the
7meeting solely by means of remote communication in accordance
8with section 490.709, subsection 3, annual meetings may be held
9as follows:
   10a.  In or out of this state at the place stated in or fixed
11in accordance with the bylaws.
   12b.  If no place is stated in or fixed in accordance with the
13bylaws, at the corporation’s principal office.
   143.  The failure to hold an annual meeting at the time stated
15in or fixed in accordance with a corporation’s bylaws does not
16affect the validity of any corporate action.
17   Sec. 57.  Section 490.702, Code 2020, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.702  Special meeting.
   201.  Except as provided in subsection 5, a corporation shall
21hold a special meeting of shareholders upon the occurrence of
22any of the following:
   23a.  On call of its board of directors or the person or
24persons authorized to do so by the articles of incorporation
25or bylaws.
   26b.  If the shareholders holding at least ten percent of
27all the votes entitled to be cast on an issue proposed to be
28considered at the proposed special meeting sign, date, and
29deliver to the corporation one or more written demands for the
30meeting describing the purpose or purposes for which it is
31to be held, provided that the articles of incorporation may
32fix a lower percentage or a higher percentage not exceeding
33twenty-five percent of all the votes entitled to be cast on any
34issue proposed to be considered. Unless otherwise provided in
35the articles of incorporation, a written demand for a special
-66-1meeting may be revoked by a writing to that effect received
2by the corporation before the receipt by the corporation of
3demands sufficient in number to require the holding of a
4special meeting.
   52.  If not otherwise fixed under section 490.703 or 490.707,
6the record date for determining shareholders entitled to
7demand a special meeting shall be the first date on which a
8signed shareholder demand is delivered to the corporation. No
9written demand for a special meeting shall be effective unless,
10within sixty days of the earliest date on which such a demand
11delivered to the corporation as required by this section was
12signed, written demands signed by shareholders holding at least
13the percentage of votes specified in or fixed in accordance
14with subsection 1, paragraph “b”, have been delivered to the
15corporation.
   163.  Unless the board of directors determines to hold the
17meeting solely by remote participation in accordance with
18section 490.709, subsection 3, special meetings of shareholders
19may be held as follows:
   20a.  In or out of this state at the place stated in or fixed
21in accordance with the bylaws.
   22b.  If no place is so stated in or fixed in accordance with
23the bylaws, at the corporation’s principal office.
   244.  Only business within the purpose or purposes described in
25the meeting notice required by section 490.705, subsection 3,
26may be conducted at a special meeting of shareholders.
   275.  Notwithstanding subsections 1 through 4, a corporation
28that has a class of equity securities registered pursuant to
29section 12 of the federal Securities Exchange Act of 1934 is
30required to hold a special meeting only upon the occurrence of
31any of the following:
   32a.  On call of its board of directors or the person or
33persons authorized to call a special meeting by the articles of
34incorporation or bylaws.
   35b.  If the holders of at least fifty percent of all the votes
-67-1entitled to be cast on any issue proposed to be considered at
2the proposed special meeting sign, date, and deliver to the
3corporation’s secretary one or more written demands for the
4meeting describing the purpose or purposes for which it is to
5be held.
6   Sec. 58.  Section 490.703, Code 2020, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.703  Court-ordered meeting.
   91.  The district court of the county where a corporation’s
10principal office, or, if none in this state, its registered
11office, is located may summarily order a meeting to be held
12pursuant to any of the following:
   13a.  On application of any shareholder of the corporation if
14an annual meeting was not held or action by written consent in
15lieu of an annual meeting did not become effective within the
16earlier of six months after the end of the corporation’s fiscal
17year or fifteen months after its last annual meeting.
   18b.  On application of one or more shareholders who signed a
19demand for a special meeting valid under section 490.702 if any
20of the following applies:
   21(1)  Notice of the special meeting was not given within
22thirty days after the first day on which the requisite number
23of such demands have been delivered to the corporation.
   24(2)  The special meeting was not held in accordance with the
25notice.
   262.  The court may fix the time and place of the meeting,
27determine the shares entitled to participate in the meeting,
28specify a record date or dates for determining shareholders
29entitled to notice of and to vote at the meeting, prescribe the
30form and content of the meeting notice, fix the quorum required
31for specific matters to be considered at the meeting, or direct
32that the shares represented at the meeting constitute a quorum
33for action on those matters, and enter other orders necessary
34to accomplish the purpose or purposes of the meeting.
   353.  For purposes of subsection 1, paragraph “a”,
-68-1“shareholder” means a record shareholder, a beneficial
2shareholder, and an unrestricted voting trust beneficial owner.
3   Sec. 59.  Section 490.704, Code 2020, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.704  Action without meeting.
   61.  Unless otherwise provided in the articles of
7incorporation, any action required or permitted by this chapter
8to be taken at a shareholders’ meeting may be taken without
9a meeting or vote, and, except as provided in subsection 5,
10without prior notice, if one or more written consents bearing
11the date of signature and describing the action taken are
12signed by the holders of outstanding shares having not less
13than ninety percent of the votes entitled to be cast at a
14meeting at which all shares entitled to vote on the action were
15present and voted, and are delivered to the corporation for
16inclusion in the minutes or filing with the corporate records.
   172.  Except in the case of a corporation that has a class
18of equity securities registered pursuant to section 12 of
19the federal Securities Exchange Act of 1934, the articles of
20incorporation may provide that any action required or permitted
21by this chapter to be taken at a shareholders’ meeting may be
22taken without a meeting, and without prior notice, if consents
23in writing setting forth the action so taken are signed by
24the holders of outstanding shares having not less than the
25minimum number of votes that would be required to authorize
26or take the action at a meeting at which all shares entitled
27to vote on the action were present and voted. However, if a
28corporation’s articles of incorporation authorize shareholders
29to cumulate their votes when electing directors pursuant to
30section 490.728, directors shall not be elected by less than
31unanimous written consent. A written consent must bear the
32date of signature of the shareholder who signs the consent and
33be delivered to the corporation for filing by the corporation
34with the minutes or corporate records.
   353.  If not otherwise fixed under section 490.707 and if prior
-69-1action by the board of directors is not required respecting
2the action to be taken without a meeting, the record date for
3determining the shareholders entitled to take action without
4a meeting shall be the first date on which a signed written
5consent is delivered to the corporation. If not otherwise
6fixed under section 490.707, and if prior action by the board
7of directors is required respecting the action to be taken
8without a meeting, the record date shall be the close of
9business on the day the resolution of the board of directors
10taking such prior action is adopted. No written consent
11shall be effective to take the corporate action referred to
12therein unless, within sixty days of the earliest date on
13which a consent delivered to the corporation as required by
14this section was signed, written consents signed by sufficient
15shareholders to take the action have been delivered to the
16corporation. A written consent may be revoked by a writing
17to that effect delivered to the corporation before unrevoked
18written consents sufficient in number to take the corporate
19action have been delivered to the corporation.
   204.  A consent signed pursuant to the provisions of this
21section has the effect of a vote taken at a meeting and may
22be described as such in any document. Unless the articles
23of incorporation, bylaws, or a resolution of the board of
24directors provides for a reasonable delay to permit tabulation
25of written consents, the action taken by written consent
26shall be effective when written consents signed by sufficient
27shareholders to take the action have been delivered to the
28corporation.
   295.  a.  If this chapter requires that notice of a proposed
30action be given to nonvoting shareholders and the action is
31to be taken by written consent of the voting shareholders,
32the corporation shall give its nonvoting shareholders written
33notice of the action not more than ten days after any of the
34following:
   35(1)  Written consents sufficient to take the action have been
-70-1delivered to the corporation.
   2(2)  Such later date that tabulation of consents is completed
3pursuant to an authorization under subsection 4.
   4b.  The notice must reasonably describe the action taken and
5contain or be accompanied by the same material that, under any
6provision of this chapter, would have been required to be sent
7to nonvoting shareholders in a notice of a meeting at which the
8proposed action would have been submitted to the shareholders
9for action.
   106.  a.  If action is taken by less than unanimous written
11consent of the voting shareholders, the corporation shall give
12its nonconsenting voting shareholders written notice of the
13action not more than ten days after any of the following:
   14(1)  Written consents sufficient to take the action have been
15delivered to the corporation.
   16(2)  Such later date that tabulation of consents is completed
17pursuant to an authorization under subsection 4.
   18b.  The notice must reasonably describe the action taken
19and contain or be accompanied by the same material that, under
20any provision of this chapter, would have been required to be
21sent to voting shareholders in a notice of a meeting at which
22the action would have been submitted to the shareholders for
23action.
   247.  The notice requirements in subsections 5 and 6 shall not
25delay the effectiveness of actions taken by written consent,
26and a failure to comply with such notice requirements shall
27not invalidate actions taken by written consent, provided that
28this subsection shall not be deemed to limit judicial power
29to fashion any appropriate remedy in favor of a shareholder
30adversely affected by a failure to give such notice within the
31required time period.
32   Sec. 60.  Section 490.705, Code 2020, is amended by striking
33the section and inserting in lieu thereof the following:
   34490.705  Notice of meeting.
   351.  A corporation shall notify shareholders of the date,
-71-1time, and place of each annual and special shareholders’
2meeting no fewer than ten nor more than sixty days before
3the meeting date. If the board of directors has authorized
4participation by means of remote communication pursuant to
5section 490.709 for holders of any class or series of shares,
6the notice to the holders of such class or series of shares
7must describe the means of remote communication to be used.
8The notice must include the record date for determining the
9shareholders entitled to vote at the meeting, if such date is
10different from the record date for determining shareholders
11entitled to notice of the meeting. Unless this chapter or the
12articles of incorporation require otherwise, the corporation
13is required to give notice only to shareholders entitled to
14vote at the meeting as of the record date for determining the
15shareholders entitled to notice of the meeting.
   162.  Unless this chapter or the articles of incorporation
17require otherwise, the notice of an annual meeting of
18shareholders need not include a description of the purpose or
19purposes for which the meeting is called.
   203.  Notice of a special meeting of shareholders must include
21a description of the purpose or purposes for which the meeting
22is called.
   234.  If not otherwise fixed under section 490.703 or 490.707,
24the record date for determining shareholders entitled to notice
25of and to vote at an annual or special shareholders’ meeting is
26the day before the first notice is delivered to shareholders.
   275.  Unless the bylaws require otherwise, if an annual or
28special shareholders’ meeting is adjourned to a different
29date, time, or place, if any, notice need not be given of the
30new date, time, or place, if any, if the new date, time, or
31place, if any, is announced at the meeting before adjournment.
32However, if a new record date for the adjourned meeting is or
33must be fixed under section 490.707, notice of the adjourned
34meeting shall be given under this section to shareholders
35entitled to vote at such adjourned meeting as of the record
-72-1date fixed for notice of such adjourned meeting.
2   Sec. 61.  Section 490.706, Code 2020, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.706  Waiver of notice.
   51.  A shareholder may waive any notice required by this
6chapter, or the articles of incorporation or bylaws, before or
7after the date and time stated in the notice. The waiver must
8be in writing, be signed by the shareholder entitled to the
9notice, and be delivered to the corporation for filing by the
10corporation with the minutes or corporate records.
   112.  A shareholder’s attendance at a meeting does all of the
12following:
   13a.  Waives objection to lack of notice or defective notice
14of the meeting, unless the shareholder at the beginning of the
15meeting objects to holding the meeting or transacting business
16at the meeting.
   17b.  Waives objection to consideration of a particular matter
18at the meeting that is not within the purpose or purposes
19described in the meeting notice, unless the shareholder objects
20to considering the matter when it is presented.
21   Sec. 62.  Section 490.707, Code 2020, is amended by striking
22the section and inserting in lieu thereof the following:
   23490.707  Record date for meeting.
   241.  The bylaws may fix or provide the manner of fixing the
25record date or dates for one or more voting groups to determine
26the shareholders entitled to notice of a shareholders’ meeting,
27to demand a special meeting, to vote, or to take any other
28action. If the bylaws do not fix or provide for fixing a record
29date, the board of directors may fix the record date.
   302.  A record date fixed under this section shall not be more
31than seventy days before the meeting or action requiring a
32determination of shareholders and shall not be retroactive.
   333.  A determination of shareholders entitled to notice of
34or to vote at a shareholders’ meeting is effective for any
35adjournment of the meeting unless the board of directors fixes
-73-1a new record date or dates, which it shall do if the meeting is
2adjourned to a date more than one hundred twenty days after the
3date fixed for the original meeting.
   44.  If a court orders a meeting adjourned to a date more than
5one hundred twenty days after the date fixed for the original
6meeting, it may provide that the original record date or dates
7continue in effect or it may fix a new record date or dates.
   85.  The record date or dates for a shareholders’ meeting
9fixed by or in the manner provided in the bylaws or by the
10board of directors shall be the record date for determining
11shareholders entitled both to notice of and to vote at
12the shareholders’ meeting unless, in the case of a record
13date fixed by the board of directors and to the extent not
14prohibited by the bylaws, the board, at the time it fixes the
15record date for shareholders entitled to notice of the meeting,
16fixes a later record date on or before the date of the meeting
17to determine the shareholders entitled to vote at the meeting.
18   Sec. 63.  Section 490.708, Code 2020, is amended by striking
19the section and inserting in lieu thereof the following:
   20490.708  Conduct of meeting.
   211.  At each meeting of shareholders, a chair shall preside.
22The chair shall be appointed as provided in the bylaws or, in
23the absence of such provision, by the board of directors.
   242.  The chair, unless the articles of incorporation or bylaws
25provide otherwise, shall determine the order of business and
26shall have the authority to establish rules for the conduct of
27the meeting.
   283.  Any rules adopted for, and the conduct of, the meeting
29shall be fair to shareholders.
   304.  The chair of the meeting shall announce at the meeting
31when the polls close for each matter voted upon. If no
32announcement is made, the polls shall be deemed to have closed
33upon the final adjournment of the meeting. After the polls
34close, no ballots, proxies, or votes nor any revocations or
35changes to such ballots, proxies, or votes may be accepted.
-74-1   Sec. 64.  Section 490.709, Code 2020, is amended by striking
2the section and inserting in lieu thereof the following:
   3490.709  Remote participation in shareholders’ meetings.
   41.  Shareholders of any class or series of shares may
5participate in any meeting of shareholders by means of remote
6communication to the extent the board of directors authorizes
7such participation for such class or series. Participation as
8a shareholder by means of remote communication shall be subject
9to such guidelines and procedures as the board of directors
10adopts, and shall be in conformity with subsection 2.
   112.  Shareholders participating in a shareholders’ meeting
12by means of remote communication shall be deemed present and
13may vote at such a meeting if the corporation has implemented
14reasonable measures to do all of the following:
   15a.  Verify that each person participating remotely as a
16shareholder is a shareholder.
   17b.  Provide such shareholders a reasonable opportunity to
18participate in the meeting and to vote on matters submitted to
19the shareholders, including an opportunity to communicate, and
20to read or hear the proceedings of the meeting, substantially
21concurrently with such proceedings.
   223.  Unless the bylaws require the meeting of shareholders to
23be held at a place, the board of directors may determine that
24any meeting of shareholders shall not be held at any place and
25shall instead be held solely by means of remote communication,
26but only if the corporation implements the measures specified
27in subsection 2.
28   Sec. 65.  Section 490.720, Code 2020, is amended by striking
29the section and inserting in lieu thereof the following:
   30490.720  Shareholders’ list for meeting.
   311.  After fixing a record date for a meeting, a corporation
32shall prepare an alphabetical list of the names of all its
33shareholders who are entitled to notice of a shareholders’
34meeting. If the board of directors fixes a different record
35date under section 490.707, subsection 5, to determine the
-75-1shareholders entitled to vote at the meeting, a corporation
2also shall prepare an alphabetical list of the names of all
3its shareholders who are entitled to vote at the meeting. A
4list must be arranged by voting group and within each voting
5group by class or series of shares, and show the address of and
6number of shares held by each shareholder. Nothing contained
7in this subsection shall require the corporation to include
8on such list the electronic mail address or other electronic
9contact information of a shareholder.
   102.  a.  The shareholders’ list for notice shall be available
11for inspection by any shareholder, beginning two business
12days after notice of the meeting is given for which the
13list was prepared and continuing through the meeting. The
14shareholders’ list for notice shall be made available at any
15of the following:
   16(1)  The corporation’s principal office or at a place
17identified in the meeting notice in the city where the meeting
18will be held.
   19(2)  A reasonably accessible electronic network, provided
20that the information required to gain access to such list is
21provided with the notice of the meeting. In the event that
22the corporation determines to make the list available on
23an electronic network, the corporation may take reasonable
24steps to ensure that such information is available only to
25shareholders of the corporation.
   26b.  A shareholders’ list for voting shall be similarly
27available for inspection promptly after the record date for
28voting. A shareholder, or the shareholder’s agent or attorney,
29is entitled on written demand to inspect and, subject to the
30requirements of section 490.1602, subsection 3, to copy a list,
31during regular business hours and at the shareholder’s expense,
32during the period it is available for inspection.
   333.  If the meeting is to be held at a place, the corporation
34shall make the list of shareholders entitled to vote available
35at the meeting, and any shareholder, or the shareholder’s
-76-1agent or attorney, is entitled to inspect the list at any time
2during the meeting or any adjournment. If the meeting is to be
3held solely by means of remote communication, then such list
4shall also be open to such inspection during the meeting on a
5reasonably accessible electronic network, and the information
6required to access such list shall be provided with the notice
7of the meeting.
   84.  If the corporation refuses to allow a shareholder, or
9the shareholder’s agent or attorney, to inspect a shareholders’
10list before or at the meeting, or copy a list as permitted
11by subsection 2, the district court of the county where a
12corporation’s principal office or, if none in this state,
13its registered office, is located, on application of the
14shareholder, may summarily order the inspection or copying at
15the corporation’s expense and may postpone the meeting for
16which the list was prepared until the inspection or copying is
17complete.
   185.  Refusal or failure to prepare or make available the
19shareholders’ list does not affect the validity of action taken
20at the meeting.
21   Sec. 66.  Section 490.721, Code 2020, is amended by striking
22the section and inserting in lieu thereof the following:
   23490.721  Voting entitlement of shares.
   241.  Except as provided in subsections 2 and 4 or unless the
25articles of incorporation provide otherwise, each outstanding
26share, regardless of class or series, is entitled to one vote
27on each matter voted on at a shareholders’ meeting. Only
28shares are entitled to vote.
   292.  Shares of a corporation are not entitled to vote if they
30are owned by or otherwise belong to the corporation directly,
31or indirectly through an entity of which a majority of the
32voting power is held directly or indirectly by the corporation
33or which is otherwise controlled by the corporation.
   343.  Shares held by the corporation in a fiduciary capacity
35for the benefit of any person are entitled to vote unless
-77-1they are held for the benefit of, or otherwise belong to, the
2corporation directly, or indirectly through an entity of which
3a majority of the voting power is held directly or indirectly
4by the corporation or which is otherwise controlled by the
5corporation.
   64.  Redeemable shares are not entitled to vote after
7delivery of written notice of redemption is effective and a
8sum sufficient to redeem the shares has been deposited with a
9bank, trust company, or other financial institution under an
10irrevocable obligation to pay the holders the redemption price
11on surrender of the shares.
   125.  As used in this section, “voting power” means the current
13power to vote in the election of directors of a corporation or
14to elect, select, or appoint governors of another entity.
15   Sec. 67.  Section 490.722, Code 2020, is amended by striking
16the section and inserting in lieu thereof the following:
   17490.722  Proxies.
   181.  A shareholder may vote the shareholder’s shares in person
19or by proxy.
   202.  A shareholder, or the shareholder’s agent or
21attorney-in-fact, may appoint a proxy to vote or otherwise
22act for the shareholder by signing an appointment form, or
23by an electronic transmission. An electronic transmission
24must contain or be accompanied by information from which the
25recipient can determine the date of the transmission and that
26the transmission was authorized by the sender or the sender’s
27agent or attorney-in-fact.
   283.  An appointment of a proxy is effective when a signed
29appointment form or an electronic transmission of the
30appointment is received by the inspector of election or
31the officer or agent of the corporation authorized to count
32votes. An appointment is valid for the term provided in the
33appointment form, and, if no term is provided, is valid for
34eleven months unless the appointment is irrevocable under
35subsection 4.
-78-   14.  An appointment of a proxy is revocable unless the
2appointment form or electronic transmission states that it is
3irrevocable and the appointment is coupled with an interest.
4Appointments coupled with an interest include, but are not
5limited to, the appointment of any of the following:
   6a.  A pledgee.
   7b.  A person who purchased or agreed to purchase the shares.
   8c.  A creditor of the corporation who extended the
9corporation credit under terms requiring the appointment.
   10d.  An employee of the corporation whose employment contract
11requires the appointment.
   12e.  A party to a voting agreement created under section
13490.731.
   145.  The death or incapacity of the shareholder appointing
15a proxy does not affect the right of the corporation to
16accept the proxy’s authority unless notice of the death or
17incapacity is received by the secretary or other officer or
18agent authorized to tabulate votes before the proxy exercises
19the proxy’s authority under the appointment.
   206.  An appointment made irrevocable under subsection 4
21is revoked when the interest with which it is coupled is
22extinguished.
   237.  Unless it otherwise provides, an appointment made
24irrevocable under subsection 4 continues in effect after
25a transfer of the shares and a transferee takes subject
26to the appointment, except that a transferee for value of
27shares subject to an irrevocable appointment may revoke the
28appointment if the transferee did not know of its existence
29when acquiring the shares and the existence of the irrevocable
30appointment was not noted conspicuously on the certificate
31representing the shares or on the information statement for
32shares without certificates.
   338.  Subject to section 490.724 and to any express limitation
34on the proxy’s authority stated in the appointment form or
35electronic transmission, a corporation is entitled to accept
-79-1the proxy’s vote or other action as that of the shareholder
2making the appointment.
3   Sec. 68.  Section 490.723, Code 2020, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.723  Shares held by intermediaries and nominees.
   61.  A corporation’s board of directors may establish a
7procedure under which a person on whose behalf shares are
8registered in the name of an intermediary or nominee may elect
9to be treated by the corporation as the record shareholder by
10filing with the corporation a beneficial ownership certificate.
11The terms, conditions, and limitations of this treatment shall
12be specified in the procedure. To the extent such person is
13treated under such procedure as having rights or privileges
14that the record shareholder otherwise would have, the record
15shareholder shall not have those rights or privileges.
   162.  The procedure must specify all of the following:
   17a.  The types of intermediaries or nominees to which it
18applies.
   19b.  The rights or privileges that the corporation recognizes
20in a person with respect to whom a beneficial ownership
21certificate is filed.
   22c.  The manner in which the procedure is selected which must
23include that the beneficial ownership certificate be signed or
24assented to by or on behalf of the record shareholder and the
25person on whose behalf the shares are held.
   26d.  The information that must be provided when the procedure
27is selected.
   28e.  The period for which selection of the procedure is
29effective.
   30f.  Requirements for notice to the corporation with respect
31to the arrangement.
   32g.  The form and contents of the beneficial ownership
33certificate.
   343.  The procedure may specify any other aspects of the rights
35and duties created by the filing of a beneficial ownership
-80-1certificate.
2   Sec. 69.  Section 490.724, Code 2020, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.724  Acceptance of votes and other instruments.
   51.  If the name signed on a vote, ballot, consent, waiver,
6shareholder demand, or proxy appointment corresponds to the
7name of a shareholder, the corporation, if acting in good
8faith, is entitled to accept the vote, ballot, consent, waiver,
9shareholder demand, or proxy appointment and give it effect as
10the act of the shareholder.
   112.  If the name signed on a vote, ballot, consent, waiver,
12shareholder demand, or proxy appointment does not correspond to
13the name of its shareholder, the corporation, if acting in good
14faith, is nevertheless entitled to accept the vote, ballot,
15consent, waiver, shareholder demand, or proxy appointment and
16give it effect as the act of the shareholder if any of the
17following applies:
   18a.  The shareholder is an entity and the name signed purports
19to be that of an officer or agent of the entity.
   20b.  The name signed purports to be that of an administrator,
21executor, guardian, or conservator representing the shareholder
22and, if the corporation requests, evidence of fiduciary status
23acceptable to the corporation has been presented with respect
24to the vote, ballot, consent, waiver, shareholder demand, or
25proxy appointment.
   26c.  The name signed purports to be that of a receiver
27or trustee in bankruptcy of the shareholder and, if the
28corporation requests, evidence of this status acceptable
29to the corporation has been presented with respect to the
30vote, ballot, consent, waiver, shareholder demand, or proxy
31appointment.
   32d.  The name signed purports to be that of a pledgee,
33beneficial owner, or attorney-in-fact of the shareholder
34and, if the corporation requests, evidence acceptable to
35the corporation of the signatory’s authority to sign for
-81-1the shareholder has been presented with respect to the
2vote, ballot, consent, waiver, shareholder demand, or proxy
3appointment.
   4e.  Two or more persons are the shareholder as co-tenants or
5fiduciaries and the name signed purports to be the name of at
6least one of the co-owners and the person signing appears to be
7acting on behalf of all the co-owners.
   83.  The corporation is entitled to reject a vote, ballot,
9consent, waiver, shareholder demand, or proxy appointment if
10the person authorized to accept or reject such instrument,
11acting in good faith, has reasonable basis for doubt about
12the validity of the signature on it or about the signatory’s
13authority to sign for the shareholder.
   144.  Neither the corporation or any person authorized by it,
15nor an inspector of election appointed under section 490.729,
16that accepts or rejects a vote, ballot, consent, waiver,
17shareholder demand, or proxy appointment in good faith and
18in accordance with the standards of this section or section
19490.722, subsection 2, is liable in damages to the shareholder
20for the consequences of the acceptance or rejection.
   215.  Corporate action based on the acceptance or rejection
22of a vote, ballot, consent, waiver, shareholder demand, or
23proxy appointment under this section is valid unless a court of
24competent jurisdiction determines otherwise.
   256.  If an inspector of election has been appointed under
26section 490.729, the inspector of election also has the
27authority to request information and make determinations
28under subsections 1, 2, and 3. Any determination made by the
29inspector of election under those subsections is controlling.
30   Sec. 70.  Section 490.725, Code 2020, is amended by striking
31the section and inserting in lieu thereof the following:
   32490.725  Quorum and voting requirements for voting groups.
   331.  Shares entitled to vote as a separate voting group
34may take action on a matter at a meeting only if a quorum of
35those shares exists with respect to that matter. Unless the
-82-1articles of incorporation or bylaws provide otherwise, shares
2representing a majority of the votes entitled to be cast on
3the matter by the voting group constitutes a quorum of that
4voting group for action on that matter. Whenever this chapter
5requires a particular quorum for a specified action, the
6articles of incorporation shall not provide for a lower quorum.
   72.  Once a share is represented for any purpose at a meeting,
8it is deemed present for quorum purposes for the remainder of
9the meeting and for any adjournment of that meeting unless a
10new record date is or must be fixed for that adjourned meeting.
   113.  If a quorum exists, action on a matter, other than the
12election of directors, by a voting group is approved if the
13votes cast within the voting group favoring the action exceed
14the votes cast opposing the action, unless the articles of
15incorporation require a greater number of affirmative votes.
   164.  An amendment of the articles of incorporation adding,
17changing, or deleting a quorum or voting requirement for a
18voting group greater than specified in subsection 1 or 3 is
19governed by section 490.727.
   205.  The election of directors is governed by section 490.728.
   216.  Whenever a provision of this chapter provides for voting
22of classes or series as separate voting groups, the rules
23provided in section 490.1004, subsection 3, for amendments of
24the articles of incorporation apply to that provision.
25   Sec. 71.  Section 490.726, Code 2020, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.726  Action by single or multiple voting groups.
   281.  If the articles of incorporation or this chapter provide
29for voting by a single voting group on a matter, action on
30that matter is taken when voted upon by that voting group as
31provided in section 490.725.
   322.  If the articles of incorporation or this chapter provide
33for voting by two or more voting groups on a matter, action
34on that matter is taken only when voted upon by each of those
35voting groups counted separately as provided in section
-83-1490.725. Action may be taken by different voting groups on a
2matter at different times.
3   Sec. 72.  Section 490.727, Code 2020, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.727  Modifying quorum or voting requirements.
   6An amendment to the articles of incorporation or bylaws
7that adds, changes, or deletes a quorum or voting requirement
8shall meet the same quorum requirement and be adopted by the
9same vote and voting groups required to take action under the
10quorum and voting requirements then in effect or proposed to be
11adopted, whichever is greater.
12   Sec. 73.  Section 490.728, Code 2020, is amended by striking
13the section and inserting in lieu thereof the following:
   14490.728  Voting for directors — cumulative voting.
   151.  Unless otherwise provided in the articles of
16incorporation, directors are elected by a plurality of the
17votes cast by the shares entitled to vote in the election at a
18meeting at which a quorum is present.
   192.  Shareholders do not have a right to cumulate their votes
20for directors unless the articles of incorporation so provide.
   213.  A statement included in the articles of incorporation
22that “[all] [a designated voting group of] shareholders are
23entitled to cumulate their votes for directors”, or words of
24similar import, means that the shareholders designated are
25entitled to multiply the number of votes they are entitled to
26cast by the number of directors for whom they are entitled to
27vote and cast the product for a single candidate or distribute
28the product among two or more candidates.
   294.  Shares otherwise entitled to vote cumulatively shall not
30be voted cumulatively at a particular meeting unless any of the
31following applies:
   32a.  The meeting notice or proxy statement accompanying
33the notice states conspicuously that cumulative voting is
34authorized.
   35b.  A shareholder who has the right to cumulate the
-84-1shareholder’s votes gives notice to the corporation not less
2than forty-eight hours before the time set for the meeting of
3the shareholder’s intent to cumulate votes during the meeting,
4and if one shareholder gives this notice all other shareholders
5in the same voting group participating in the election are
6entitled to cumulate their votes without giving further notice.
7   Sec. 74.  Section 490.729, Code 2020, is amended by striking
8the section and inserting in lieu thereof the following:
   9490.729  Inspectors of election.
   101.  A corporation that has a class of equity securities
11registered pursuant to section 12 of the federal Securities
12Exchange Act of 1934 shall, and any other corporation
13may, appoint one or more inspectors to act at a meeting of
14shareholders in connection with determining voting results.
15Each inspector shall verify in writing that the inspector
16will faithfully execute the duties of inspector with strict
17impartiality and according to the best of the inspector’s
18ability. An inspector may be an officer or employee of the
19corporation. The inspectors may appoint or retain other
20persons to assist the inspectors in the performance of the
21duties of inspector under subsection 2, and may rely on
22information provided by such persons and other persons,
23including those appointed to tabulate votes, unless the
24inspectors believe reliance is unwarranted.
   252.  The inspectors shall do all of the following:
   26a.  Ascertain the number of shares outstanding and the voting
27power of each.
   28b.  Determine the shares represented at a meeting.
   29c.  Determine the validity of proxy appointments and ballots.
   30d.  Count all votes.
   31e.  Make a written report of the results.
   323.  In performing their duties, the inspectors may examine
33any of the following:
   34a.  The proxy appointment forms and any other information
35provided in accordance with section 490.722, subsection 2.
-85-   1b.  Any envelope or related writing submitted with those
2appointment forms.
   3c.  Any ballots.
   4d.  Any evidence or other information specified in section
5490.724.
   6e.  The relevant books and records of the corporation
7relating to its shareholders and their entitlement to vote,
8including any securities position list provided by a depository
9clearing agency.
   104.  a.  The inspectors also may consider other information
11that they believe is relevant and reliable for the purpose
12of performing any of the duties assigned to them pursuant to
13subsection 2, including for all of the following purposes:
   14(1)  Evaluating inconsistent, incomplete, or erroneous
15information.
   16(2)  Reconciling information submitted on behalf of banks,
17brokers, their nominees, or similar persons that indicates
18more votes being cast than a proxy authorized by the record
19shareholder is entitled to cast.
   20b.  If the inspectors consider other information allowed by
21this subsection, they shall in their report under subsection
222 specify the information considered by them, including the
23purpose or purposes for which the information was considered,
24the person or persons from whom they obtained the information,
25when the information was obtained, the means by which the
26information was obtained, and the basis for the inspectors’
27belief that such information is relevant and reliable.
   285.  Determinations of law by the inspectors of election are
29subject to de novo review by a court in a proceeding under
30section 490.749 or other judicial proceeding.
31   Sec. 75.  Section 490.730, Code 2020, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.730  Voting trusts.
   341.  One or more shareholders may create a voting trust,
35conferring on a trustee the right to vote or otherwise act for
-86-1them, by signing an agreement setting out the provisions of the
2trust, which may include anything consistent with its purpose,
3and transferring their shares to the trustee. When a voting
4trust agreement is signed, the trustee shall prepare a list of
5the names and addresses of all voting trust beneficial owners,
6together with the number and class of shares each transferred
7to the trust, and deliver copies of the list and agreement to
8the corporation at its principal office.
   92.  A voting trust becomes effective on the date the first
10shares subject to the trust are registered in the trustee’s
11name.
   123.  Limits, if any, on the duration of a voting trust shall
13be as set forth in the voting trust. A voting trust that became
14effective between December 31, 1989, and June 30, 2014, both
15dates inclusive, is governed by the provisions of this section
16concerning duration then in effect, unless the voting trust
17is amended to provide otherwise by unanimous agreement of the
18parties to the voting trust.
19   Sec. 76.  Section 490.731, Code 2020, is amended by striking
20the section and inserting in lieu thereof the following:
   21490.731  Voting agreement.
   221.  Two or more shareholders may provide for the manner in
23which they will vote their shares by signing an agreement for
24that purpose. A voting agreement created under this section is
25not subject to the provisions of section 490.730.
   262.  A voting agreement created under this section is
27specifically enforceable.
28   Sec. 77.  Section 490.732, Code 2020, is amended by striking
29the section and inserting in lieu thereof the following:
   30490.732  Shareholder agreement.
   311.  An agreement among the shareholders of a corporation that
32complies with this section is effective among the shareholders
33and the corporation even though it is inconsistent with one or
34more other provisions of this chapter in that it does any of
35the following:
-87-   1a.  Eliminates the board of directors or restricts the
2discretion or powers of the board of directors.
   3b.  Governs the authorization or making of distributions,
4regardless of whether they are in proportion to ownership of
5shares, subject to the limitations in section 490.640.
   6c.  Establishes who shall be directors or officers of the
7corporation, or their terms of office or manner of selection
8or removal.
   9d.  Governs, in general or in regard to specific matters,
10the exercise or division of voting power by or between
11the shareholders and directors or by or among any of them,
12including use of weighted voting rights or director proxies.
   13e.  Establishes the terms and conditions of any agreement for
14the transfer or use of property or the provision of services
15between the corporation and any shareholder, director, officer,
16or employee of the corporation, or among any of them.
   17f.  Transfers to one or more shareholders or other persons
18all or part of the authority to exercise the corporate powers
19or to manage the business and affairs of the corporation,
20including the resolution of any issue about which there exists
21a deadlock among directors or shareholders.
   22g.  Requires dissolution of the corporation at the request
23of one or more of the shareholders or upon the occurrence of a
24specified event or contingency.
   25h.  Otherwise governs the exercise of the corporate powers or
26the management of the business and affairs of the corporation
27or the relationship among the shareholders, the directors, and
28the corporation, or among any of them, and is not contrary to
29public policy.
   302.  An agreement authorized by this section shall satisfy all
31of the following requirements:
   32a.  Be as set forth in any of the following:
   33(1)  The articles of incorporation or bylaws and approved by
34all persons who are shareholders at the time of the agreement.
   35(2)  A written agreement that is signed by all persons who
-88-1are shareholders at the time of the agreement and is made known
2to the corporation.
   3b.  Be subject to amendment only by all persons who are
4shareholders at the time of the amendment, unless the agreement
5provides otherwise.
   63.  The existence of an agreement authorized by this section
7shall be noted conspicuously on the front or back of each
8certificate for outstanding shares or on the information
9statement required by section 490.626, subsection 2. If at the
10time of the agreement the corporation has shares outstanding
11represented by certificates, the corporation shall recall the
12outstanding certificates and issue substitute certificates that
13comply with this subsection. The failure to note the existence
14of the agreement on the certificate or information statement
15shall not affect the validity of the agreement or any action
16taken pursuant to it. Any purchaser of shares who, at the time
17of purchase, did not have knowledge of the existence of the
18agreement shall be entitled to rescission of the purchase. A
19purchaser shall be deemed to have knowledge of the existence
20of the agreement if its existence is noted on the certificate
21or information statement for the shares in compliance with
22this subsection and, if the shares are not represented by a
23certificate, the information statement is delivered to the
24purchaser at or before the time of purchase of the shares. An
25action to enforce the right of rescission authorized by this
26subsection shall be commenced within the earlier of ninety days
27after discovery of the existence of the agreement or two years
28after the time of purchase of the shares.
   294.  If the agreement ceases to be effective for any reason,
30the board of directors may, if the agreement is contained or
31referred to in the corporation’s articles of incorporation or
32bylaws, adopt an amendment to the articles of incorporation or
33bylaws, without shareholder action, to delete the agreement and
34any references to it.
   355.  An agreement authorized by this section that limits the
-89-1discretion or powers of the board of directors shall relieve
2the directors of, and impose upon the person or persons in
3whom such discretion or powers are vested, liability for acts
4or omissions imposed by law on directors to the extent that
5the discretion or powers of the directors are limited by the
6agreement.
   76.  The existence or performance of an agreement authorized
8by this section shall not be a ground for imposing personal
9liability on any shareholder for the acts or debts of the
10corporation even if the agreement or its performance treats the
11corporation as if it were a partnership or results in failure
12to observe the corporate formalities otherwise applicable to
13the matters governed by the agreement.
   147.  Incorporators or subscribers for shares may act as
15shareholders with respect to an agreement authorized by this
16section if no shares have been issued when the agreement is
17made.
   188.  Limits, if any, on the duration of an agreement
19authorized by this section must be set forth in the agreement.
20An agreement that became effective between January 1, 2003,
21and June 30, 2014, both dates inclusive, unless the agreement
22provided otherwise, remains governed by the provisions of this
23section concerning duration then in effect.
24   Sec. 78.  Section 490.740, Code 2020, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.740  Part definitions.
   27As used in this part:
   281.  “Derivative proceeding” means a civil suit in the right
29of a domestic corporation or, to the extent provided in section
30490.747, in the right of a foreign corporation.
   312.  “Shareholder” means a record shareholder, a beneficial
32shareholder, and an unrestricted voting trust beneficial owner.
33   Sec. 79.  Section 490.743, Code 2020, is amended by striking
34the section and inserting in lieu thereof the following:
   35490.743  Stay of proceedings.
-90-   1If the corporation commences an inquiry into the allegations
2made in the demand or complaint, the court may stay any
3derivative proceeding for such period as the court deems
4appropriate.
5   Sec. 80.  Section 490.744, Code 2020, is amended by striking
6the section and inserting in lieu thereof the following:
   7490.744  Dismissal.
   81.  A derivative proceeding shall be dismissed by the court
9on motion by the corporation if one of the groups specified
10in subsection 2 or 5 has determined in good faith, after
11conducting a reasonable inquiry upon which its conclusions are
12based, that the maintenance of the derivative proceeding is
13not in the best interests of the corporation. A corporation
14moving to dismiss on this basis shall submit in support of the
15motion a short and concise statement of the reasons for its
16determination.
   172.  Unless a panel is appointed pursuant to subsection 5,
18the determination in subsection 1 shall be made by any of the
19following:
   20a.  A majority vote of qualified directors present at a
21meeting of the board of directors if the qualified directors
22constitute a quorum.
   23b.  A majority vote of a committee consisting of two or more
24qualified directors appointed by majority vote of qualified
25directors present at a meeting of the board of directors,
26regardless of whether such qualified directors constitute a
27quorum.
   283.  a.  If a derivative proceeding is commenced after
29a determination has been made rejecting a demand by a
30shareholder, the complaint shall allege with particularity
31facts establishing any of the following:
   32(1)  That a majority of the board of directors did not
33consist of qualified directors at the time the determination
34was made.
   35(2)  That the requirements of subsection 1 have not been met.
-91-   1b.  All discovery and other proceedings shall be stayed
2during the pendency of any motion to dismiss unless the
3court finds upon the motion of any party that particularized
4discovery is necessary to preserve evidence or prevent undue
5prejudice to that party.
   64.  If a majority of the board of directors consisted
7of qualified directors at the time the determination was
8made, the plaintiff shall have the burden of proving that
9the requirements of subsection 1 have not been met; if not,
10the corporation shall have the burden of proving that the
11requirements of subsection 1 have been met.
   125.  Upon motion by the corporation, the court may appoint
13a panel of one or more individuals to make a determination
14whether the maintenance of the derivative proceeding is in the
15best interests of the corporation. In such case, the plaintiff
16shall have the burden of proving that the requirements of
17subsection 1 have not been met.
18   Sec. 81.  Section 490.745, Code 2020, is amended by striking
19the section and inserting in lieu thereof the following:
   20490.745  Discontinuance or settlement.
   21A derivative proceeding shall not be discontinued or settled
22without the court’s approval. If the court determines that a
23proposed discontinuance or settlement will substantially affect
24the interests of the corporation’s shareholders or a class or
25series of shareholders, the court shall direct that notice be
26given to the shareholders affected.
27   Sec. 82.  Section 490.746, Code 2020, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.746  Payment of expenses.
   30On termination of the derivative proceeding, the court may
31do any of the following:
   321.  Order the corporation to pay the plaintiff’s expenses
33incurred in the proceeding if it finds that the proceeding has
34resulted in a substantial benefit to the corporation.
   352.  Order the plaintiff to pay any defendant’s expenses
-92-1incurred in defending the proceeding if it finds that the
2proceeding was commenced or maintained without reasonable cause
3or for an improper purpose.
   43.  Order a party to pay an opposing party’s expenses
5incurred because of the filing of a pleading, motion, or other
6paper, if it finds that any of the following apply:
   7a.  The pleading, motion, or other paper was not well
8grounded in fact, after reasonable inquiry, or warranted by
9existing law or a good faith argument for the extension,
10modification, or reversal of existing law.
   11b.  The pleading, motion, or other paper was interposed for
12an improper purpose, such as to harass or cause unnecessary
13delay or needless increase in the cost of litigation.
14   Sec. 83.  Section 490.748, Code 2020, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.748  Shareholder action to appoint custodian or receiver.
   171.  The district court of the county where a corporation’s
18principal office or, if none in this state, its registered
19office, is located may appoint one or more persons to be
20custodians, or, if the corporation is insolvent, to be
21receivers, of and for a corporation in a proceeding by a
22shareholder where it is established that any of the following
23applies:
   24a.  The directors are deadlocked in the management of
25the corporate affairs, the shareholders are unable to break
26the deadlock, and irreparable injury to the corporation is
27threatened or being suffered.
   28b.  The directors or those in control of the corporation are
29acting fraudulently and irreparable injury to the corporation
30is threatened or being suffered.
   312.  a.  The district court may issue injunctions, appoint a
32temporary custodian or temporary receiver with all the powers
33and duties the district court directs, take other action to
34preserve the corporate assets wherever located, and carry on
35the business of the corporation until a full hearing is held.
-93-   1b.  The district court shall hold a full hearing, after
2notifying all parties to the proceeding and any interested
3persons designated by the district court, before appointing a
4custodian or receiver.
   5c.  The district court has jurisdiction over the corporation
6and all of its property, wherever located.
   73.  The district court may appoint an individual or domestic
8or foreign corporation, registered to do business in this
9state, as a custodian or receiver and may require the custodian
10or receiver to post bond, with or without sureties, in an
11amount the district court directs.
   124.  The district court shall describe the powers and duties
13of the custodian or receiver in its appointing order, which may
14be amended from time to time. Among other powers, all of the
15following apply:
   16a.  A custodian may exercise all of the powers of the
17corporation, through or in place of its board of directors, to
18the extent necessary to manage the business and affairs of the
19corporation.
   20b.  A receiver may do any of the following:
   21(1)  Dispose of all or any part of the assets of the
22corporation wherever located, at a public or private sale, if
23authorized by the district court.
   24(2)  Sue and defend in the receiver’s own name as receiver in
25all courts of this state.
   265.  The district court during a custodianship may
27redesignate the custodian a receiver, and during a receivership
28may redesignate the receiver a custodian, if doing so is in the
29best interests of the corporation.
   306.  The district court from time to time during the
31custodianship or receivership may order compensation paid and
32expense disbursements or reimbursements made to the custodian
33or receiver from the assets of the corporation or proceeds from
34the sale of its assets.
   357.  As used in this section, “shareholder” means a record
-94-1shareholder, a beneficial shareholder, and an unrestricted
2voting trust beneficial owner.
3   Sec. 84.  NEW SECTION.  490.749  Judicial determination of
4corporate offices and review of elections and shareholder votes.
   51.  Upon application of or in a proceeding commenced by
6a person specified in subsection 2, the district court may
7determine all of the following:
   8a.  The result or validity of the election, appointment,
9removal, or resignation of a director or officer of the
10corporation.
   11b.  The right of an individual to hold the office of director
12or officer of the corporation.
   13c.  The result or validity of any vote by the shareholders
14of the corporation.
   15d.  The right of a director to membership on a committee of
16the board of directors.
   17e.  The right of a person to nominate or an individual to
18be nominated as a candidate for election or appointment as
19a director of the corporation, and any right under a bylaw
20adopted pursuant to section 490.206, subsection 3, or any
21comparable right under any provision of the articles of
22incorporation, contract, or applicable law.
   232.  An application or proceeding pursuant to subsection 1 may
24be filed or commenced by any of the following persons:
   25a.  The corporation.
   26b.  Any record shareholder, beneficial shareholder, or
27unrestricted voting trust beneficial owner of the corporation.
   28c.  A director of the corporation, an individual claiming
29the office of director, or a director whose membership on a
30committee of the board of directors is contested, in each case
31who is seeking a determination of a right to such office or
32membership.
   33d.  An officer of the corporation or an individual claiming
34to be an officer of the corporation, in each case who is
35seeking a determination of a right to such office.
-95-   1e.  A person claiming a right covered by subsection 1,
2paragraph “e”, and who is seeking a determination of such right.
   33.  In connection with any application or proceeding under
4subsection 1, the following shall be named as defendants,
5unless such person made the application or commenced the
6proceeding:
   7a.  The corporation.
   8b.  Any individual whose right to office or membership on a
9committee of the board of directors is contested.
   10c.  Any individual claiming the office or membership at
11issue.
   12d.  Any person claiming a right covered by subsection 1,
13paragraph “e”, that is at issue.
   144.  In connection with any application or proceeding under
15subsection 1, service of process may be made upon each of the
16persons specified in subsection 3, by any of the following:
   17a.  Service of process on the corporation addressed to such
18person in any manner provided by statute of this state or by
19rule of the applicable court for service on the corporation.
   20b.  Service of process on the person in any manner provided
21by statute of this state or by rule of the applicable court.
   225.  When service of process is made upon a person other than
23the corporation by service upon the corporation pursuant to
24subsection 4, paragraph “a”, the plaintiff and the corporation
25or its registered agent shall promptly provide written notice
26of such service, together with copies of all process and the
27application or complaint, to the person at the person’s last
28known residence or business address, or as permitted by statute
29of this state or by rule of the applicable court.
   306.  In connection with any application or proceeding under
31subsection 1, the court shall dispose of the application or
32proceeding on an expedited basis and also may do any of the
33following:
   34a.  Order such additional or further notice as the court
35deems proper under the circumstances.
-96-   1b.  Order that additional persons be joined as parties to
2the proceeding if the court determines that such joinder is
3necessary for a just adjudication of matters before the court.
   4c.  Order an election or meeting be held in accordance with
5the provisions of section 490.703, subsection 2, or otherwise.
   6d.  Appoint a master to conduct an election or meeting.
   7e.  Enter temporary, preliminary, or permanent injunctive
8relief.
   9f.  Resolve solely for the purpose of this proceeding any
10legal or factual issues necessary for the resolution of any of
11the matters specified in subsection 1, including the right and
12power of persons claiming to own shares to vote at any meeting
13of the shareholders.
   14g.  Order such other relief as the court determines is
15equitable, just, and proper.
   167.  It is not necessary to make shareholders a party to
17a proceeding or application pursuant to this section unless
18the shareholder is a required defendant under subsection
193, paragraph “d”, relief is sought against the shareholder
20individually, or the court orders joinder pursuant to
21subsection 6, paragraph “b”.
   228.  Nothing in this section limits, restricts, or abolishes
23the subject matter jurisdiction or powers of the court
24as existed before the enactment of this section, and an
25application or proceeding pursuant to this section is not the
26exclusive remedy or proceeding available with respect to the
27matters specified in subsection 1.
28   Sec. 85.  Section 490.801, Code 2020, is amended by striking
29the section and inserting in lieu thereof the following:
   30490.801  Requirement for and functions of board of directors.
   311.  Except as may be provided in an agreement authorized
32under section 490.732, each corporation shall have a board of
33directors.
   342.  Except as may be provided in an agreement authorized
35under section 490.732, and subject to any limitation in
-97-1the articles of incorporation permitted by section 490.202,
2subsection 2, all corporate powers shall be exercised by or
3under the authority of the board of directors, and the business
4and affairs of the corporation shall be managed by or under
5the direction, and subject to the oversight, of the board of
6directors.
7   Sec. 86.  Section 490.802, Code 2020, is amended by striking
8the section and inserting in lieu thereof the following:
   9490.802  Qualifications of directors.
   101.  The articles of incorporation or bylaws may prescribe
11qualifications for directors or for nominees for directors.
12Qualifications must be reasonable as applied to the corporation
13and be lawful.
   142.  A requirement that is based on a past, prospective,
15or current action, or expression of opinion, by a nominee
16or director that could limit the ability of a nominee or
17director to discharge his or her duties as a director is not a
18permissible qualification under this section. Notwithstanding
19the foregoing, qualifications may include not being or having
20been subject to specified criminal, civil, or regulatory
21sanctions or not having been removed as a director by judicial
22action or for cause.
   233.  A director need not be a resident of this state or a
24shareholder unless the articles of incorporation or bylaws so
25prescribe.
   264.  A qualification for nomination for director prescribed
27before a person’s nomination shall apply to such person at
28the time of nomination. A qualification for nomination for
29director prescribed after a person’s nomination shall not apply
30to such person with respect to such nomination.
   315.  A qualification for director prescribed before a
32director has been elected or appointed may apply only at the
33time an individual becomes a director or may apply during a
34director’s term. A qualification prescribed after a director
35has been elected or appointed shall not apply to that director
-98-1before the end of that director’s term.
2   Sec. 87.  Section 490.803, Code 2020, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.803  Number and election of directors.
   51.  A board of directors shall consist of one or more
6individuals, with the number specified in or fixed in
7accordance with the articles of incorporation or bylaws.
   82.  The number of directors may be increased or decreased
9from time to time by amendment to, or in the manner provided
10in, the articles of incorporation or bylaws.
   113.  Directors are elected at the first annual shareholders’
12meeting and at each annual shareholders’ meeting thereafter
13unless elected by written consent in lieu of an annual meeting
14as permitted by section 490.704 or unless their terms are
15staggered under section 490.806.
16   Sec. 88.  Section 490.804, Code 2020, is amended by striking
17the section and inserting in lieu thereof the following:
   18490.804  Election of directors by certain classes of series
19of shares.
   20If the articles of incorporation or action by the board of
21directors pursuant to section 490.602 authorize dividing the
22shares into classes or series, the articles of incorporation
23may also authorize the election of all or a specified number
24of directors by the holders of one or more authorized classes
25or series of shares. A class or series, or multiple classes
26or series, of shares entitled to elect one or more directors
27is a separate voting group for purposes of the election of
28directors.
29   Sec. 89.  Section 490.805, Code 2020, is amended by striking
30the section and inserting in lieu thereof the following:
   31490.805  Terms of directors generally.
   321.  The terms of the initial directors of a corporation
33expire at the first shareholders’ meeting at which directors
34are elected.
   352.  a.  The terms of all other directors expire at the
-99-1next, or if their terms are staggered in accordance with
2section 490.806, at the applicable second or third, annual
3shareholders’ meeting following their election.
   4b.  Paragraph “a” does not apply in any of the following
5circumstances:
   6(1)  To the extent provided in section 490.1022 if a bylaw
7electing to be governed by that section is in effect.
   8(2)  A shorter term is specified in the articles of
9incorporation in the event of a director nominee failing to
10receive a specified vote for election.
   113.  A decrease in the number of directors does not shorten
12an incumbent director’s term.
   134.  The term of a director elected to fill a vacancy expires
14at the next shareholders’ meeting at which directors are
15elected.
   165.  Except to the extent otherwise provided in the articles
17of incorporation or under section 490.1022, if a bylaw electing
18to be governed by that section is in effect, despite the
19expiration of a director’s term, the director continues to
20serve until the director’s successor is elected and qualifies
21or there is a decrease in the number of directors.
22   Sec. 90.  Section 490.806, Code 2020, is amended by striking
23the section and inserting in lieu thereof the following:
   24490.806  Staggered terms for directors.
   25The articles of incorporation may provide for staggering the
26terms of directors by dividing the total number of directors
27into two or three groups, with each group containing one-half
28or one-third of the total, as near as may be practicable.
29In that event, the terms of directors in the first group
30expire at the first annual shareholders’ meeting after their
31election, the terms of the second group expire at the second
32annual shareholders’ meeting after their election, and the
33terms of the third group, if any, expire at the third annual
34shareholders’ meeting after their election. At each annual
35shareholders’ meeting held thereafter, directors shall be
-100-1elected for a term of two years or three years, as the case may
2be, to succeed those whose terms expire.
3   Sec. 91.  Section 490.807, Code 2020, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.807  Resignation of directors.
   61.  A director may resign at any time by delivering a
7written notice of resignation to the board of directors or its
8chairperson, or to the secretary.
   92.  A resignation is effective as provided in section
10490.141, subsection 9, unless the resignation provides for a
11delayed effectiveness, including effectiveness determined upon
12a future event or events. A resignation that is conditioned
13upon failing to receive a specified vote for election as a
14director may provide that it is irrevocable.
15   Sec. 92.  Section 490.808, Code 2020, is amended by striking
16the section and inserting in lieu thereof the following:
   17490.808  Removal of directors by shareholders.
   181.  The shareholders may remove one or more directors with or
19without cause unless the articles of incorporation provide that
20directors may be removed only for cause.
   212.  If a director is elected by a voting group of
22shareholders, only the shareholders of that voting group may
23participate in the vote to remove that director.
   243.  A director may be removed if the number of votes cast
25to remove exceeds the number of votes cast not to remove the
26director, except to the extent the articles of incorporation
27or bylaws require a greater number. However, if cumulative
28voting is authorized, a director shall not be removed if, in
29the case of a meeting, the number of votes sufficient to elect
30the director under cumulative voting is voted against removal
31and, if action is taken by less than unanimous written consent,
32voting shareholders entitled to the number of votes sufficient
33to elect the director under cumulative voting do not consent
34to the removal.
   354.  A director may be removed by the shareholders only at a
-101-1meeting called for the purpose of removing the director, and
2the meeting notice must state that removal of the director is a
3purpose of the meeting.
4   Sec. 93.  Section 490.809, Code 2020, is amended by striking
5the section and inserting in lieu thereof the following:
   6490.809  Removal of directors by judicial proceeding.
   71.  The district court of the county where a corporation’s
8principal office or, if none in this state, its registered
9office, is located may remove a director from office or
10may order other relief, including barring the director
11from reelection for a period prescribed by the court, in a
12proceeding commenced by or in the right of the corporation if
13the court finds that all of the following apply:
   14a.  The director engaged in fraudulent conduct with respect
15to the corporation or its shareholders, grossly abused the
16position of director, or intentionally inflicted harm on the
17corporation.
   18b.  Considering the director’s course of conduct and the
19inadequacy of other available remedies, removal or such other
20relief would be in the best interest of the corporation.
   212.  A shareholder proceeding on behalf of the corporation
22under subsection 1 shall comply with all of the requirements of
23subchapter VII, part D, except section 490.741, subsection 1.
24   Sec. 94.  Section 490.810, Code 2020, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.810  Vacancy on board of directors.
   271.  Unless the articles of incorporation provide otherwise,
28if a vacancy occurs on a board of directors, including a
29vacancy resulting from an increase in the number of directors,
30the vacancy may be filled in any of the following manners:
   31a.  The shareholders may fill the vacancy.
   32b.  The board of directors may fill the vacancy.
   33c.  If the directors remaining in office are less than a
34quorum, they may fill the vacancy by the affirmative vote of a
35majority of all the directors remaining in office.
-102-   12.  If the vacant office was held by a director elected by
2a voting group of shareholders, only the holders of shares of
3that voting group are entitled to vote to fill the vacancy
4if it is filled by the shareholders, and only the remaining
5directors elected by that voting group, even if less than a
6quorum, are entitled to fill the vacancy if it is filled by the
7directors.
   83.  A vacancy that will occur at a specific later date, by
9reason of a resignation effective at a later date under section
10490.807, subsection 2, or otherwise, may be filled before the
11vacancy occurs but the new director shall not take office until
12the vacancy occurs.
13   Sec. 95.  Section 490.820, Code 2020, is amended by striking
14the section and inserting in lieu thereof the following:
   15490.820  Meetings.
   161.  The board of directors may hold regular or special
17meetings in or out of this state.
   182.  Unless restricted by the articles of incorporation
19or bylaws, any director may participate in any meeting
20of the board of directors through the use of any means of
21communication by which all directors participating may
22simultaneously hear each other during the meeting. A director
23participating in a meeting by this means is deemed to be
24present in person at the meeting.
25   Sec. 96.  Section 490.821, Code 2020, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.821  Action without meeting.
   281.  Except to the extent that the articles of incorporation
29or bylaws require that action by the board of directors be
30taken at a meeting, action required or permitted by this
31chapter to be taken by the board of directors may be taken
32without a meeting if each director signs a consent describing
33the action to be taken and delivers it to the corporation.
   342.  Action taken under this section is the act of the board
35of directors when one or more consents signed by all the
-103-1directors are delivered to the corporation. The consent may
2specify the time at which the action taken is to be effective.
3A director’s consent may be withdrawn by a revocation signed by
4the director and delivered to the corporation before delivery
5to the corporation of unrevoked written consents signed by all
6the directors.
   73.  A consent signed under this section has the effect of
8action taken at a meeting of the board of directors and may be
9described as such in any document.
10   Sec. 97.  Section 490.822, Code 2020, is amended by striking
11the section and inserting in lieu thereof the following:
   12490.822  Notice of meeting.
   131.  Unless the articles of incorporation or bylaws provide
14otherwise, regular meetings of the board of directors may be
15held without notice of the date, time, place, or purpose of the
16meeting.
   172.  Unless the articles of incorporation or bylaws provide
18for a longer or shorter period, special meetings of the board
19of directors shall be preceded by at least two days’ notice of
20the date, time, and place of the meeting. The notice need not
21describe the purpose of the special meeting unless required by
22the articles of incorporation or bylaws.
23   Sec. 98.  Section 490.823, Code 2020, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.823  Waiver of notice.
   261.  A director may waive any notice required by this chapter,
27the articles of incorporation, or the bylaws before or after
28the date and time stated in the notice. Except as provided
29by subsection 2, the waiver must be in writing, signed by
30the director entitled to the notice, and delivered to the
31corporation for filing by the corporation with the minutes or
32corporate records.
   332.  A director’s attendance at or participation in a meeting
34waives any required notice to the director of the meeting
35unless all of the following apply:
-104-   1a.  The director at the beginning of the meeting, or promptly
2upon arrival, objects to holding the meeting or transacting
3business at the meeting.
   4b.  The director does not, after objecting, vote for or
5assent to action taken at the meeting.
6   Sec. 99.  Section 490.824, Code 2020, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.824  Quorum and voting.
   91.  Unless the articles of incorporation or bylaws provide
10for a greater or lesser number, or unless otherwise expressly
11provided in this chapter, a quorum of a board of directors
12consists of a majority of the number of directors specified in
13or fixed in accordance with the articles of incorporation or
14bylaws.
   152.  The quorum of the board of directors specified in
16or fixed in accordance with the articles of incorporation
17or bylaws shall not consist of less than one-third of the
18specified or fixed number of directors.
   193.  If a quorum is present when a vote is taken, the
20affirmative vote of a majority of directors present is the act
21of the board of directors unless the articles of incorporation
22or bylaws require the vote of a greater number of directors or
23unless otherwise expressly provided in this chapter.
   244.  a.  A director who is present at a meeting of the board
25of directors or a committee when corporate action is taken is
26deemed to have assented to the action taken unless one or more
27of the following occurs:
   28(1)  The director objects at the beginning of the meeting, or
29promptly upon arrival, to holding it or transacting business
30at the meeting.
   31(2)  The dissent or abstention from the action taken is
32entered in the minutes of the meeting.
   33(3)  The director delivers written notice of the director’s
34dissent or abstention to the presiding officer of the meeting
35before its adjournment or to the corporation immediately after
-105-1adjournment of the meeting.
   2b.  The right of dissent or abstention is not available to a
3director who votes in favor of the action taken.
4   Sec. 100.  Section 490.825, Code 2020, is amended by striking
5the section and inserting in lieu thereof the following:
   6490.825  Committees of the board.
   71.  Unless this chapter, the articles of incorporation,
8or the bylaws provide otherwise, a board of directors may
9establish one or more board committees composed exclusively
10of one or more directors to perform functions of the board of
11directors.
   122.  a.  The establishment of a board committee and
13appointment of members to it shall be approved by the greater
14of the following:
   15(1)  A majority of all the directors in office when the
16action is taken.
   17(2)  The number of directors required by the articles of
18incorporation or bylaws to take action under section 490.824.
   19b.  Paragraph “a” applies unless, in either case, this
20chapter or the articles of incorporation provide otherwise.
   213.  Sections 490.820 through 490.824 apply to board
22committees and their members.
   234.  A board committee may exercise the powers of the board
24of directors under section 490.801, to the extent specified by
25the board of directors or in the articles of incorporation or
26bylaws, except that a board committee shall not do any of the
27following:
   28a.  Authorize or approve distributions, except according to
29a formula or method, or within limits, prescribed by the board
30of directors.
   31b.  Approve or propose to shareholders action that this
32chapter requires be approved by shareholders.
   33c.  Fill vacancies on the board of directors or, subject to
34subsection 5, on any board committees.
   35d.  Adopt, amend, or repeal bylaws.
-106-   15.  The board of directors may appoint one or more directors
2as alternate members of any board committee to replace any
3absent or disqualified member during the member’s absence
4or disqualification. If the articles of incorporation, the
5bylaws, or the resolution creating the board committee so
6provide, the member or members present at any board committee
7meeting and not disqualified from voting may, by unanimous
8action, appoint another director to act in place of an absent
9or disqualified member during that member’s absence or
10disqualification.
11   Sec. 101.  Section 490.830, Code 2020, is amended by striking
12the section and inserting in lieu thereof the following:
   13490.830  Standards of conduct for directors.
   141.  Each member of the board of directors, when discharging
15the duties of a director, shall act in conformity with all of
16the following:
   17a.  In good faith.
   18b.  In a manner the director reasonably believes to be in the
19best interests of the corporation.
   202.  The members of the board of directors or a board
21committee, when becoming informed in connection with their
22decision-making function or devoting attention to their
23oversight function, shall discharge their duties with the care
24that a person in a like position would reasonably believe
25appropriate under similar circumstances.
   263.  In discharging board or board committee duties, a
27director shall disclose, or cause to be disclosed, to the other
28board or committee members information which the director
29knows is not already known by them but known by the director
30to be material to the discharge of their decision-making or
31oversight functions, except that disclosure is not required to
32the extent that the director reasonably believes that doing so
33would violate a duty imposed under law, a legally enforceable
34obligation of confidentiality, or a professional ethics rule.
   354.  In discharging board or board committee duties, a
-107-1director who does not have knowledge that makes reliance
2unwarranted is entitled to rely on the performance by any of
3the persons specified in subsection 6, paragraph “a” or “c”, to
4whom the board may have delegated, formally or informally by
5course of conduct, the authority or duty to perform one or more
6of the board’s functions that are delegable under applicable
7law.
   85.  In discharging board or board committee duties, a
9director who does not have knowledge that makes reliance
10unwarranted is entitled to rely on information, opinions,
11reports, or statements, including financial statements and
12other financial data, prepared or presented by any of the
13persons specified in subsection 6.
   146.  A director is entitled to rely, in accordance with
15subsection 4 or 5, on any of the following:
   16a.  One or more officers or employees of the corporation whom
17the director reasonably believes to be reliable and competent
18in the functions performed or the information, opinions,
19reports, or statements provided.
   20b.  Legal counsel, public accountants, or other persons
21retained by the corporation as to matters involving skills
22or expertise the director reasonably believes are any of the
23following:
   24(1)  Matters within the particular person’s professional or
25expert competence.
   26(2)  Matters as to which the particular person merits
27confidence.
   28c.  A board committee of which the director is not a member
29if the director reasonably believes the committee merits
30confidence.
31   Sec. 102.  Section 490.831, Code 2020, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.831  Standards of liability for directors.
   341.  A director shall not be liable to the corporation or its
35shareholders for any decision to take or not to take action,
-108-1or any failure to take any action, as a director, unless the
2party asserting liability in a proceeding establishes all of
3the following:
   4a.  No defense interposed by the director based on any of the
5following precludes liability:
   6(1)  A provision in the articles of incorporation authorized
7by section 490.202, subsection 2, paragraph “d” or “f”.
   8(2)  The protection afforded by section 490.861 for action
9taken in compliance with section 490.862 or section 490.863.
   10(3)  The protection afforded by section 490.870.
   11b.  That the challenged conduct consisted or was the result
12of any of the following:
   13(1)  Action not in good faith.
   14(2)  A decision that satisfies any of the following:
   15(a)  That which the director did not reasonably believe to be
16in the best interests of the corporation.
   17(b)  As to which the director was not informed to an
18extent the director reasonably believed appropriate in the
19circumstances.
   20(3)  A lack of objectivity due to the director’s familial,
21financial, or business relationship with, or a lack of
22independence due to the director’s domination or control by,
23another person having a material interest in the challenged
24conduct, which also meets all of the following criteria:
   25(a)  Which relationship or which domination or control could
26reasonably be expected to have affected the director’s judgment
27respecting the challenged conduct in a manner adverse to the
28corporation.
   29(b)  After a reasonable expectation to such effect has been
30established, the director shall not have established that the
31challenged conduct was reasonably believed by the director to
32be in the best interests of the corporation.
   33(4)  A sustained failure of the director to devote attention
34to ongoing oversight of the business and affairs of the
35corporation, or a failure to devote timely attention, by
-109-1making, or causing to be made, appropriate inquiry, when
2particular facts and circumstances of significant concern
3materialize that would alert a reasonably attentive director
4to the need for such inquiry.
   5(5)  Receipt of a financial benefit to which the director was
6not entitled or any other breach of the director’s duties to
7deal fairly with the corporation and its shareholders that is
8actionable under applicable law.
   92.  a.  The party seeking to hold the director liable for
10money damages shall also have the burden of establishing all
11of the following:
   12(1)  That harm to the corporation or its shareholders has
13been suffered.
   14(2)  The harm suffered was proximately caused by the
15director’s challenged conduct.
   16b.  A party seeking to hold the director liable for other
17money payment under a legal remedy, such as compensation for
18the unauthorized use of corporate assets, shall also have
19whatever persuasion burden may be called for to establish that
20the payment sought is appropriate in the circumstances.
   21c.  A party seeking to hold the director liable for other
22money payment under an equitable remedy, such as profit
23recovery by or disgorgement to the corporation, shall also
24have whatever persuasion burden may be called for to establish
25that the equitable remedy sought is appropriate in the
26circumstances.
   273.  This section shall not do any of the following:
   28a.  In any instance where fairness is at issue, such
29as consideration of the fairness of a transaction to the
30corporation under section 490.861, subsection 2, paragraph
31“c”, alter the burden of proving the fact or lack of fairness
32otherwise applicable.
   33b.  Alter the fact or lack of liability of a director
34under another section of this chapter, such as the provisions
35governing the consequences of an unlawful distribution under
-110-1section 490.833 or a transactional interest under section
2490.861.
   3c.  Affect any rights to which the corporation or a
4shareholder may be entitled under another statute of this state
5or the United States.
6   Sec. 103.  Section 490.833, Code 2020, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.833  Directors’ liability for unlawful distributions.
   91.  A director who votes for or assents to a distribution in
10excess of what may be authorized and made pursuant to section
11490.640, subsection 1, or section 490.1409, subsection 1, is
12personally liable to the corporation for the amount of the
13distribution that exceeds what could have been distributed
14without violating section 490.640, subsection 1, or section
15490.1409, subsection 1, if the party asserting liability
16establishes that when taking the action the director did not
17comply with section 490.830.
   182.  A director held liable under subsection 1 for an unlawful
19distribution is entitled to all of the following:
   20a.  Contribution from every other director who could be held
21liable under subsection 1 for the unlawful distribution.
   22b.  Recoupment from each shareholder of the prorata portion
23of the amount of the unlawful distribution the shareholder
24accepted, knowing the distribution was made in violation of
25section 490.640, subsection 1, or section 490.1409, subsection
261.
   273.  a.  A proceeding to enforce the liability of a director
28under subsection 1 is barred unless it is commenced within two
29years after any of the following:
   30(1)  The date on which the effect of the distribution was
31measured under section 490.640, subsection 5 or 8.
   32(2)  The date as of which the violation of section 490.640,
33subsection 1, occurred as the consequence of disregard of a
34restriction in the articles of incorporation.
   35(3)  The date on which the distribution of assets to
-111-1shareholders under section 490.1409, subsection 1, was made.
   2b.  A proceeding to enforce contribution or recoupment
3under subsection 2 is barred unless it is commenced within
4one year after the liability of the claimant has been finally
5adjudicated under subsection 1.
6   Sec. 104.  Section 490.840, Code 2020, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.840  Officers.
   91.  A corporation has the officers described in its bylaws
10or appointed by the board of directors in accordance with the
11bylaws.
   122.  The board of directors may elect individuals to fill one
13or more offices of the corporation. An officer may appoint one
14or more officers if authorized by the bylaws or the board of
15directors.
   163.  The bylaws or the board of directors shall assign to an
17officer responsibility for maintaining and authenticating the
18records of the corporation required to be kept under section
19490.1601, subsection 1.
   204.  The same individual may simultaneously hold more than one
21office in a corporation.
22   Sec. 105.  Section 490.842, Code 2020, is amended by striking
23the section and inserting in lieu thereof the following:
   24490.842  Standards of conduct for officers.
   251.  An officer, when performing in such capacity, has the
26duty to act in conformity with all of the following:
   27a.  In good faith.
   28b.  With the care that a person in a like position would
29reasonably exercise under similar circumstances.
   30c.  In a manner the officer reasonably believes to be in the
31best interests of the corporation.
   322.  The duty of an officer includes the obligation to do all
33of the following:
   34a.  Inform the superior officer to whom, or the board of
35directors or the board committee to which, the officer reports
-112-1of information about the affairs of the corporation known to
2the officer, within the scope of the officer’s functions, and
3known to the officer to be material to such superior officer,
4board, or committee.
   5b.  Inform the officer’s superior officer, or another
6appropriate person within the corporation, or the board of
7directors, or a board committee, of any actual or probable
8material violation of law involving the corporation or material
9breach of duty to the corporation by an officer, employee,
10or agent of the corporation, that the officer believes has
11occurred or is likely to occur.
   123.  In discharging the officer’s duties, an officer who does
13not have knowledge that makes reliance unwarranted is entitled
14to rely on any of the following:
   15a.  The performance of properly delegated responsibilities
16by one or more employees of the corporation whom the officer
17reasonably believes to be reliable and competent in performing
18the responsibilities delegated.
   19b.  Information, opinions, reports, or statements, including
20financial statements and other financial data, prepared or
21presented by one or more employees of the corporation whom the
22officer reasonably believes to be reliable and competent in
23the matters presented or by legal counsel, public accountants,
24or other persons retained by the corporation as to matters
25involving skills or expertise the officer reasonably believes
26are any of the following:
   27(1)  Matters within the particular person’s professional or
28expert competence.
   29(2)  Matters as to which the particular person merits
30confidence.
   314.  An officer shall not be liable to the corporation or its
32shareholders for any decision to take or not to take action,
33or any failure to take any action, as an officer, if the duties
34of the office are performed in compliance with this section.
35Whether an officer who does not comply with this section shall
-113-1have liability will depend in such instance on applicable
2law, including those principles of section 490.831 that have
3relevance.
4   Sec. 106.  Section 490.843, Code 2020, is amended by striking
5the section and inserting in lieu thereof the following:
   6490.843  Resignation and removal of officers.
   71.  An officer may resign at any time by delivering a written
8notice to the board of directors, or its chairperson, or to
9the appointing officer or the secretary. A resignation is
10effective as provided in section 490.141, subsection 9, unless
11the notice provides for a delayed effectiveness, including
12effectiveness determined upon a future event or events. If
13effectiveness of a resignation is stated to be delayed and the
14board of directors or the appointing officer accepts the delay,
15the board of directors or the appointing officer may fill the
16pending vacancy before the delayed effectiveness but the new
17officer shall not take office until the vacancy occurs.
   182.  An officer may be removed at any time with or without
19cause by any of the following:
   20a.  The board of directors.
   21b.  The appointing officer, unless the bylaws or the board
22of directors provide otherwise.
   23c.  Any other officer if authorized by the bylaws or the
24board of directors.
   253.  As used in this section, “appointing officer” means the
26officer, including any successor to that officer, who appointed
27the officer resigning or being removed.
28   Sec. 107.  Section 490.844, Code 2020, is amended by striking
29the section and inserting in lieu thereof the following:
   30490.844  Contract rights of officers.
   311.  The election or appointment of an officer does not itself
32create contract rights.
   332.  An officer’s removal does not affect the officer’s
34contract rights, if any, with the corporation. An officer’s
35resignation does not affect the corporation’s contract rights,
-114-1if any, with the officer.
2   Sec. 108.  Section 490.850, Code 2020, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.850  Part definitions.
   5As used in this part:
   61.  “Corporation” includes any domestic or foreign
7predecessor entity of a corporation in a merger.
   82.  “Director” or “officer” means an individual who is or
9was a director or officer, respectively, of a corporation
10or who, while a director or officer of the corporation, is
11or was serving at the corporation’s request as a director,
12officer, manager, partner, trustee, employee, or agent of
13another entity or employee benefit plan. A director or
14officer is considered to be serving an employee benefit plan
15at the corporation’s request if the individual’s duties to
16the corporation also impose duties on, or otherwise involve
17services by, the individual to the plan or to participants in
18or beneficiaries of the plan. “Director” or “officer” includes,
19unless the context requires otherwise, the estate or personal
20representative of a director or officer.
   213.  “Liability” means the obligation to pay a judgment,
22settlement, penalty, fine, including an excise tax assessed
23with respect to an employee benefit plan, or expenses incurred
24with respect to a proceeding.
   254.  a.  “Official capacity” means the following:
   26(1)  When used with respect to a director, the office of
27director in a corporation.
   28(2)  When used with respect to an officer, as contemplated
29in section 490.856, the office in a corporation held by the
30officer.
   31b.  “Official capacity” does not include service for any
32other domestic or foreign corporation or any joint venture,
33trust, employee benefit plan, or other entity.
   345.  “Party” means an individual who was, is, or is threatened
35to be made a defendant or respondent in a proceeding.
-115-   16.  “Proceeding” means any threatened, pending, or completed
2action, suit, or proceeding, whether civil, criminal,
3administrative, arbitrative, or investigative and whether
4formal or informal.
5   Sec. 109.  Section 490.851, Code 2020, is amended by striking
6the section and inserting in lieu thereof the following:
   7490.851  Permissible indemnification.
   81.  Except as otherwise provided in this section, a
9corporation may indemnify an individual who is a party to
10a proceeding because the individual is a director against
11liability incurred in the proceeding if any of the following
12apply:
   13a.  All of the following apply:
   14(1)  The director’s conduct was in good faith.
   15(2)  The director reasonably believed:
   16(a)  In the case of conduct in an official capacity, that
17the director’s conduct was in the best interests of the
18corporation.
   19(b)  In all other cases, that the director’s conduct was at
20least not opposed to the best interests of the corporation.
   21(3)  In the case of any criminal proceeding, the director
22had no reasonable cause to believe the director’s conduct was
23unlawful.
   24b.  The director engaged in conduct for which broader
25indemnification has been made permissible or obligatory under a
26provision of the articles of incorporation, as authorized by
27section 490.202, subsection 2, paragraph “e”.
   282.  A director’s conduct with respect to an employee benefit
29plan for a purpose the director reasonably believed to be in
30the interests of the participants in, and the beneficiaries
31of, the plan is conduct that satisfies the requirement of
32subsection 1, paragraph “a”, subparagraph (2), subparagraph
33division (b).
   343.  The termination of a proceeding by judgment, order,
35settlement, or conviction, or upon a plea of nolo contendere
-116-1or its equivalent, is not, of itself, determinative that
2the director did not meet the relevant standard of conduct
3described in this section.
   44.  Unless ordered by a court under section 490.854,
5subsection 1, paragraph “c”, a corporation shall not indemnify a
6director in any of the following circumstances:
   7a.  In connection with a proceeding by or in the right of the
8corporation, except for expenses incurred in connection with
9the proceeding if it is determined that the director has met
10the relevant standard of conduct under subsection 1.
   11b.  In connection with any proceeding with respect to conduct
12for which the director was adjudged liable on the basis of
13receiving a financial benefit to which the director was not
14entitled, regardless of whether it involved action in the
15director’s official capacity.
16   Sec. 110.  Section 490.852, Code 2020, is amended by striking
17the section and inserting in lieu thereof the following:
   18490.852  Mandatory indemnification.
   19A corporation shall indemnify a director who was wholly
20successful, on the merits or otherwise, in the defense of
21any proceeding to which the director was a party because the
22director is or was a director of the corporation against
23expenses incurred by the director in connection with the
24proceeding.
25   Sec. 111.  Section 490.853, Code 2020, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.853  Advance for expenses.
   281.  A corporation may, before final disposition of a
29proceeding, advance funds to pay for or reimburse expenses
30incurred in connection with the proceeding by an individual
31who is a party to the proceeding because that individual is a
32director, if the director delivers to the corporation a signed
33written undertaking of the director to repay any funds advanced
34and all of the following apply:
   35a.  The director is not entitled to mandatory indemnification
-117-1under section 490.852.
   2b.  It is ultimately determined under section 490.854 or
3490.855 that the director is not entitled to indemnification.
   42.  The undertaking required by subsection 1 must be an
5unlimited general obligation of the director but need not be
6secured and may be accepted without reference to the financial
7ability of the director to make repayment.
   83.  Authorizations under this section shall be made by any
9of the following:
   10a.  By the board of directors as follows:
   11(1)  If there are two or more qualified directors, by a
12majority vote of all of the qualified directors, a majority
13of whom shall for such purpose constitute a quorum, or by a
14majority of the members of a committee consisting solely of two
15or more qualified directors appointed by such a vote.
   16(2)  If there are fewer than two qualified directors,
17by the vote necessary for action by the board of directors
18in accordance with section 490.824, subsection 3, in which
19authorization directors who are not qualified directors may
20participate.
   21b.  By the shareholders, but shares owned by or voted under
22the control of a director who at the time is not a qualified
23director shall not be voted on the authorization.
24   Sec. 112.  Section 490.854, Code 2020, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.854  Court-ordered indemnification and advance for
27expenses.
   281.  A person who is a party to a proceeding because the
29person is a director may apply for indemnification or an
30advance for expenses to the court conducting the proceeding
31or to another court of competent jurisdiction. After receipt
32of an application and after giving any notice it considers
33necessary, the court shall do any of the following:
   34a.  Order indemnification if the court determines that the
35director is entitled to mandatory indemnification under section
-118-1490.852.
   2b.  Order indemnification or advance for expenses if
3the court determines that the director is entitled to
4indemnification or advance for expenses pursuant to a provision
5authorized by section 490.858, subsection 1.
   6c.  (1)  Order indemnification or advance for expenses if the
7court determines, in view of all the relevant circumstances,
8that it is fair and reasonable to do any of the following:
   9(a)  Indemnify the director.
   10(b)  Advance expenses to the director.
   11(2)  The court shall order indemnification or advance for
12expenses, even if in the case of subparagraph (1), subparagraph
13division (a) or (b), the director has not met the relevant
14standard of conduct set forth in section 490.851, subsection 1,
15failed to comply with section 490.853 or was adjudged liable
16in a proceeding referred to in section 490.851, subsection 4,
17paragraph “a” or “b”. However, if the director was adjudged
18so liable the director’s indemnification shall be limited to
19expenses incurred in connection with the proceeding.
   202.  If the court determines that the director is entitled
21to indemnification under subsection 1, paragraph “a”, or to
22indemnification or advance for expenses under subsection 1,
23paragraph “b”, it shall also order the corporation to pay the
24director’s expenses incurred in connection with obtaining
25court-ordered indemnification or advance for expenses.
26If the court determines that the director is entitled to
27indemnification or advance for expenses under subsection 1,
28paragraph “c”, it may also order the corporation to pay the
29director’s expenses to obtain court-ordered indemnification or
30advance for expenses.
31   Sec. 113.  Section 490.855, Code 2020, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.855  Determination and authorization of indemnification.
   341.  A corporation shall not indemnify a director under
35section 490.851 unless authorized for a specific proceeding
-119-1after a determination has been made that indemnification is
2permissible because the director has met the relevant standard
3of conduct set forth in section 490.851.
   42.  The determination shall be made by any of the following:
   5a.  If there are two or more qualified directors, by the
6board of directors by a majority vote of all the qualified
7directors, a majority of whom shall for such purpose constitute
8a quorum, or by a majority of the members of a committee of two
9or more qualified directors appointed by such a vote.
   10b.  By special legal counsel selected in one of the following
11manners:
   12(1)  In the manner prescribed in paragraph “a”.
   13(2)  If there are fewer than two qualified directors,
14selected by the board of directors, in which selection
15directors who are not qualified directors may participate.
   16c.  By the shareholders, but shares owned by or voted under
17the control of a director who at the time is not a qualified
18director shall not be voted on the determination.
   193.  Authorization of indemnification shall be made in
20the same manner as the determination that indemnification is
21permissible, except that if there are fewer than two qualified
22directors or if the determination is made by special legal
23counsel, authorization of indemnification shall be made by
24those entitled to select special legal counsel under subsection
252, paragraph “b”, subparagraph (2).
26   Sec. 114.  Section 490.856, Code 2020, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.856  Indemnification of officers.
   291.  A corporation may indemnify and advance expenses under
30this part to an officer who is a party to a proceeding because
31the person is an officer, according to all of the following:
   32a.  To the same extent as a director.
   33b.  If the person is an officer but not a director, to
34such further extent as may be provided by the articles of
35incorporation or bylaws, or by a resolution adopted or a
-120-1contract approved by the board of directors or shareholders,
2except for any of the following:
   3(1)  Liability in connection with a proceeding by or in the
4right of the corporation other than for expenses incurred in
5connection with the proceeding.
   6(2)  Liability arising out of conduct that constitutes any
7of the following:
   8(a)  Receipt by the officer of a financial benefit to which
9the officer is not entitled.
   10(b)  An intentional infliction of harm on the corporation or
11the shareholders.
   12(c)  An intentional violation of criminal law.
   132.  The provisions of subsection 1, paragraph “b”, shall
14apply to an officer who is also a director, if the officer is
15made a party to the proceeding based on an act or omission
16solely as an officer.
   173.  An officer who is not a director is entitled to mandatory
18indemnification under section 490.852, and may apply to a court
19under section 490.854 for indemnification or an advance for
20expenses, in each case to the same extent to which a director
21may be entitled to indemnification or advance for expenses
22under those sections.
23   Sec. 115.  Section 490.857, Code 2020, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.857  Insurance.
   26A corporation may purchase and maintain insurance on
27behalf of an individual who is a director or officer of
28the corporation, or who, while a director or officer of the
29corporation, serves at the corporation’s request as a director,
30officer, partner, trustee, employee, or agent of another
31domestic or foreign corporation, or a joint venture, trust,
32employee benefit plan, or other entity, against liability
33asserted against or incurred by the individual in that capacity
34or arising from the individual’s status as a director or
35officer, regardless of whether the corporation would have power
-121-1to indemnify or advance expenses to the individual against the
2same liability under this part.
3   Sec. 116.  Section 490.858, Code 2020, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.858  Variation by corporate action — application of part.
   61.  A corporation may, by a provision in its articles
7of incorporation or bylaws or in a resolution adopted or a
8contract approved by the board of directors or shareholders,
9obligate itself in advance of the act or omission giving rise
10to a proceeding to provide indemnification in accordance
11with section 490.851 or advance funds to pay for or
12reimburse expenses in accordance with section 490.853. Any
13such obligatory provision shall be deemed to satisfy the
14requirements for authorization referred to in section 490.853,
15subsection 3, and in section 490.855, subsection 3. Any
16such provision that obligates the corporation to provide
17indemnification to the fullest extent permitted by law shall be
18deemed to obligate the corporation to advance funds to pay for
19or reimburse expenses in accordance with section 490.853 to the
20fullest extent permitted by law, unless the provision expressly
21provides otherwise.
   222.  A right of indemnification or to advances for expenses
23created by this part or under subsection 1 and in effect at
24the time of an act or omission shall not be eliminated or
25impaired with respect to such act or omission by an amendment
26of the articles of incorporation or bylaws or a resolution
27of the board of directors or shareholders, adopted after the
28occurrence of such act or omission, unless, in the case of
29a right created under subsection 1, the provision creating
30such right and in effect at the time of such act or omission
31explicitly authorizes such elimination or impairment after such
32act or omission has occurred.
   333.  Any provision pursuant to subsection 1 shall not obligate
34the corporation to indemnify or advance expenses to a director
35of a predecessor of the corporation, pertaining to conduct
-122-1with respect to the predecessor, unless otherwise expressly
2provided. Any provision for indemnification or advance for
3expenses in the articles of incorporation, or bylaws, or a
4resolution of the board of directors or shareholders of a
5predecessor of the corporation in a merger or in a contract
6to which the predecessor is a party, existing at the time the
7merger takes effect, shall be governed by section 490.1107,
8subsection 1, paragraph “d”.
   94.  Subject to subsection 2, a corporation may, by a
10provision in its articles of incorporation, limit any of the
11rights to indemnification or advance for expenses created by or
12pursuant to this part.
   135.  This part does not limit a corporation’s power to pay
14or reimburse expenses incurred by a director or an officer in
15connection with appearing as a witness in a proceeding at a
16time when the director or officer is not a party.
   176.  This part does not limit a corporation’s power to
18indemnify, advance expenses to, or provide or maintain
19insurance on behalf of an employee or agent.
20   Sec. 117.  Section 490.860, Code 2020, is amended by striking
21the section and inserting in lieu thereof the following:
   22490.860  Part definitions.
   23As used in this part, unless otherwise specified:
   241.  “Control”, including the term “controlled by”, means any
25of the following:
   26a.  Having the power, directly or indirectly, to elect or
27remove a majority of the members of the board of directors
28or other governing body of an entity, whether through the
29ownership of voting shares or interests, by contract, or
30otherwise.
   31b.  Being subject to a majority of the risk of loss from the
32entity’s activities or entitled to receive a majority of the
33entity’s residual returns.
   342.  “Director’s conflicting interest transaction” means
35a transaction effected or proposed to be effected by the
-123-1corporation, or by an entity controlled by the corporation, to
2which, or respecting which, any of the following applies:
   3a.  To which, at the relevant time, the director is a party.
   4b.  Respecting which, at the relevant time, the director
5had knowledge and a material financial interest known to the
6director.
   7c.  Respecting which, at the relevant time, the director knew
8that a related person was a party or had a material financial
9interest.
   103.  “Fair to the corporation” means, for purposes of section
11490.861, subsection 2, paragraph “c”, that the transaction
12as a whole was beneficial to the corporation, taking into
13appropriate account whether it was all of the following:
   14a.  Fair in terms of the director’s dealings with the
15corporation.
   16b.  Comparable to what might have been obtainable in an arm’s
17length transaction, given the consideration paid or received
18by the corporation.
   194.  “Material financial interest” means a financial interest
20in a transaction that would reasonably be expected to impair
21the objectivity of the director’s judgment when participating
22in action on the authorization of the transaction.
   235.  “Related person” means any of the following:
   24a.  The individual’s spouse.
   25b.  A child, stepchild, grandchild, parent, stepparent,
26grandparent, sibling, stepsibling, half sibling, aunt,
27uncle, niece, or nephew, or spouse of any such person, of the
28individual or of the individual’s spouse.
   29c.  A natural person living in the same home as the
30individual.
   31d.  An entity, other than the corporation or an entity
32controlled by the corporation, controlled by the individual or
33any person specified in this subsection.
   34e.  Any of the following:
   35(1)  A domestic or foreign business or nonprofit
-124-1corporation, other than the corporation or an entity controlled
2by the corporation, of which the individual is a director.
   3(2)  A domestic or foreign unincorporated entity of which the
4individual is a general partner or a member of the governing
5body.
   6(3)  A domestic or foreign individual, trust, or estate
7for whom or of which the individual is a trustee, guardian,
8personal representative, or like fiduciary.
   9f.  A person that is, or an entity that is controlled by, an
10employer of the individual.
   116.  “Relevant time” means the following:
   12a.  The time at which directors’ action respecting the
13transaction is taken in compliance with section 490.862.
   14b.  If the transaction is not brought before the board
15of directors or a board committee for action under section
16490.862, at the time the corporation or an entity controlled
17by the corporation becomes legally obligated to consummate the
18transaction.
   197.  “Required disclosure” means disclosure of all of the
20following:
   21a.  The existence and nature of the director’s conflicting
22interest.
   23b.  All facts known to the director respecting the subject
24matter of the transaction that a director free of such
25conflicting interest would reasonably believe to be material in
26deciding whether to proceed with the transaction.
27   Sec. 118.  Section 490.861, Code 2020, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.861  Judicial action.
   301.  A transaction effected or proposed to be effected by the
31corporation, or by an entity controlled by the corporation,
32shall not be the subject of equitable relief, or give rise to
33an award of damages or other sanctions against a director of
34the corporation, in a proceeding by a shareholder or by or in
35the right of the corporation, on the ground that the director
-125-1has an interest respecting the transaction, if it is not a
2director’s conflicting interest transaction.
   32.  A director’s conflicting interest transaction shall
4not be the subject of equitable relief, or give rise to an
5award of damages or other sanctions against a director of the
6corporation, in a proceeding by a shareholder or by or in the
7right of the corporation, on the ground that the director has
8an interest respecting the transaction, if any of the following
9apply:
   10a.  Directors’ action respecting the transaction was taken in
11compliance with section 490.862 at any time.
   12b.  Shareholders’ action respecting the transaction was taken
13in compliance with section 490.863 at any time.
   14c.  The transaction, judged according to the circumstances
15at the relevant time, is established to have been fair to the
16corporation.
17   Sec. 119.  Section 490.862, Code 2020, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.862  Directors’ action.
   201.  Directors’ action respecting a director’s conflicting
21interest transaction is effective for purposes of section
22490.861, subsection 2, paragraph “a”, if the transaction has
23been authorized by the affirmative vote of a majority, but
24no fewer than two, of the qualified directors who voted on
25the transaction, after required disclosure by the conflicted
26director of information not already known by such qualified
27directors, or after modified disclosure in compliance with
28subsection 2, provided that all of the following apply:
   29a.  The qualified directors have deliberated and voted
30outside the presence of and without the participation by any
31other director.
   32b.  Where the action has been taken by a board committee,
33all members of the committee were qualified directors, and any
34of the following apply:
   35(1)  The committee was composed of all the qualified
-126-1directors on the board of directors.
   2(2)  The members of the committee were appointed by the
3affirmative vote of a majority of the qualified directors on
4the board of directors.
   52.  Notwithstanding subsection 1, when a transaction is
6a director’s conflicting interest transaction only because a
7related person described in section 490.860, subsection 5,
8paragraph “e” or “f”, is a party to or has a material financial
9interest in the transaction, the conflicted director is not
10obligated to make required disclosure to the extent that the
11director reasonably believes that doing so would violate a
12duty imposed under law, a legally enforceable obligation of
13confidentiality, or a professional ethics rule, provided that
14the conflicted director discloses to the qualified directors
15voting on the transaction all of the following:
   16a.  All information required to be disclosed that is not so
17violative.
   18b.  The existence and nature of the director’s conflicting
19interest.
   20c.  The nature of the conflicted director’s duty not to
21disclose the confidential information.
   223.  A majority, but no fewer than two, of all the qualified
23directors on the board of directors, or on the board committee,
24constitutes a quorum for purposes of action that complies with
25this section.
   264.  Where directors’ action under this section does not
27satisfy a quorum or voting requirement applicable to the
28authorization of the transaction by reason of the articles of
29incorporation or bylaws, or a provision of law, independent
30action to satisfy those authorization requirements shall be
31taken by the board of directors or a board committee, in
32which action directors who are not qualified directors may
33participate.
34   Sec. 120.  Section 490.863, Code 2020, is amended by striking
35the section and inserting in lieu thereof the following:
-127-   1490.863  Shareholders’ action.
   21.  a.  Shareholders’ action respecting a director’s
3conflicting interest transaction is effective for purposes of
4section 490.861, subsection 2, paragraph “b”, if a majority of
5the votes cast by the holders of all qualified shares are in
6favor of the transaction after all of the following occur:
   7(1)  Notice to shareholders describing the action to be taken
8respecting the transaction.
   9(2)  Provision to the corporation of the information
10referred to in subsection 2.
   11(3)  Communication to the shareholders entitled to vote
12on the transaction of the information that is the subject of
13required disclosure, to the extent the information is not known
14by them.
   15b.  In the case of shareholders’ action at a meeting, the
16shareholders entitled to vote shall be determined as of the
17record date for notice of the meeting.
   182.  A director who has a conflicting interest respecting
19the transaction shall, before the shareholders’ vote, inform
20the secretary or other officer or agent of the corporation
21authorized to tabulate votes, in writing, of the number of
22shares that the director knows are not qualified shares under
23subsection 3, and the identity of the holders of those shares.
   243.  As used in this section:
   25a.  “Holder” means and “held by” refers to shares held
26by a record shareholder, a beneficial shareholder, or an
27unrestricted voting trust beneficial owner.
   28b.  “Qualified shares” means all shares entitled to be
29voted with respect to the transaction except for shares that
30the secretary or other officer or agent of the corporation
31authorized to tabulate votes either knows, or under subsection
322 is notified, are held by any of the following:
   33(1)  A director who has a conflicting interest respecting the
34transaction.
   35(2)  A related person of the director, excluding a person
-128-1described in section 490.860, subsection 5, paragraph “f”.
   24.  A majority of the votes entitled to be cast by the
3holders of all qualified shares constitutes a quorum for
4purposes of compliance with this section. Subject to the
5provisions of subsection 5, shareholders’ action that otherwise
6complies with this section is not affected by the presence of
7holders, or by the voting, of shares that are not qualified
8shares.
   95.  If a shareholders’ vote does not comply with subsection
101 solely because of a director’s failure to comply with
11subsection 2, and if the director establishes that the failure
12was not intended to influence and did not in fact determine the
13outcome of the vote, the court may take such action respecting
14the transaction and the director, and may give such effect,
15if any, to the shareholders’ vote, as the court considers
16appropriate in the circumstances.
   176.  Where shareholders’ action under this section does
18not satisfy a quorum or voting requirement applicable to the
19authorization of the transaction by reason of the articles of
20incorporation or bylaws, or a provision of law, independent
21action to satisfy those authorization requirements shall be
22taken by the shareholders, in which action shares that are not
23qualified shares may participate.
24   Sec. 121.  Section 490.870, Code 2020, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.870  Business opportunities.
   271.  If a director or officer pursues or takes advantage of
28a business opportunity directly, or indirectly through or on
29behalf of another person, that action shall not be the subject
30of equitable relief, or give rise to an award of damages or
31other sanctions against the director, officer, or other person,
32in a proceeding by or in the right of the corporation on the
33ground that the opportunity should have first been offered to
34the corporation, if any of the following apply:
   35a.  Before the director, officer, or other person becomes
-129-1legally obligated respecting the opportunity, the director or
2officer brings it to the attention of the corporation and any
3of the following apply:
   4(1)  Action by qualified directors disclaiming the
5corporation’s interest in the opportunity is taken in
6compliance with the same procedures as are set forth in section
7490.862.
   8(2)  Shareholders’ action disclaiming the corporation’s
9interest in the opportunity is taken in compliance with the
10procedures set forth in section 490.863, in either case as if
11the decision being made concerned a director’s conflicting
12interest transaction; except that, rather than making required
13disclosure as defined in section 490.860, the director or
14officer shall have made prior disclosure to those acting on
15behalf of the corporation of all material facts concerning the
16business opportunity known to the director or officer.
   17b.  The duty to offer the corporation the business
18opportunity has been limited or eliminated pursuant to a
19provision of the articles of incorporation adopted, and where
20required, made effective by action of qualified directors, in
21accordance with section 490.202, subsection 2, paragraph “f”.
   222.  In any proceeding seeking equitable relief or other
23remedies based upon an alleged improper pursuit or taking
24advantage of a business opportunity by a director or officer,
25directly, or indirectly through or on behalf of another
26person, the fact that the director or officer did not employ
27the procedure described in subsection 1, paragraph “a”,
28subparagraph (1) or (2), before pursuing or taking advantage
29of the opportunity shall not create an implication that the
30opportunity should have been first presented to the corporation
31or alter the burden of proof otherwise applicable to establish
32that the director or officer breached a duty to the corporation
33in the circumstances.
34   Sec. 122.  Section 490.901, Code 2020, is amended by striking
35the section and inserting in lieu thereof the following:
-130-   1490.901  Subchapter definitions.
   21.  As used in this subchapter:
   3a.  “Conversion” means a transaction pursuant to part C.
   4b.  “Converted entity” means the converting entity as it
5continues in existence after a conversion.
   6c.  “Converting entity” means the domestic corporation or
7eligible entity that approves a plan of conversion pursuant to
8section 490.932 or the foreign eligible entity that approves a
9conversion pursuant to the organic law of the eligible entity.
   10d.  “Domesticated corporation” means the domesticating
11corporation as it continues in existence after a domestication.
   12e.  “Domesticating corporation” means the domestic
13corporation that approves a plan of domestication pursuant
14to section 490.921 or the foreign corporation that approves
15a domestication pursuant to the organic law of the foreign
16corporation.
   17f.  “Domestication” means a transaction pursuant to part B.
   18g.  “Protected agreement” means any of the following:
   19(1)  A document evidencing indebtedness of a domestic
20corporation or eligible entity and any related agreement in
21effect immediately before the enactment date.
   22(2)  An agreement that is binding on a domestic corporation
23or eligible entity immediately before the enactment date.
   24(3)  The articles of incorporation or bylaws of a domestic
25corporation or the organic rules of a domestic eligible entity,
26in each case in effect immediately before the enactment date.
   27(4)  An agreement that is binding on any of the shareholders,
28members, interest holders, directors, or other governors of a
29domestic corporation or eligible entity, in their capacities as
30such, immediately before the enactment date.
   312.  As used in subsection 1 and sections 490.920 and
32490.930, “enactment date” means July 1, 2021, as it relates to
33domestications and July 1, 2008, as it relates to conversions.
34   Sec. 123.  Section 490.902, Code 2020, is amended by striking
35the section and inserting in lieu thereof the following:
-131-   1490.902  Excluded transactions.
   2This subchapter shall not be used to effect a transaction
3that converts a company organized on the mutual principle to
4one organized on the basis of share ownership.
5   Sec. 124.  NEW SECTION.  490.903  Required approvals.
   6If a domestic or foreign corporation or eligible entity
7shall not be a party to a merger without the approval of the
8superintendent of banking, the commissioner of insurance,
9or the Iowa utility board, and the applicable statutes or
10regulations do not specifically deal with transactions under
11this subchapter but do require such approval for mergers,
12a corporation or eligible entity shall not be a party to a
13transaction under this subchapter without the prior approval of
14that agency or official.
15   Sec. 125.  NEW SECTION.  490.904  Relationship of subchapter
16to other laws.
   17A transaction effected under this subchapter shall not
18create or impair a right, duty, or obligation of a person under
19the statutory law of this state other than this subchapter
20relating to a change in control, business combination,
21control-share acquisition, or similar transaction involving
22a domesticating or converting domestic corporation, unless
23the approval of the plan of domestication or conversion is by
24a vote of the shareholders or the board of directors which
25would be sufficient to create or impair the right, duty, or
26obligation directly under that law.
27   Sec. 126.  NEW SECTION.  490.920  Domestication.
   281.  By complying with the provisions of this part applicable
29to foreign corporations, a foreign corporation may become a
30domestic corporation if the domestication is permitted by the
31organic law of the foreign corporation.
   322.  By complying with the provisions of this part, a domestic
33corporation may become a foreign corporation pursuant to a
34plan of domestication if the domestication is permitted by the
35organic law of the foreign corporation.
-132-   13.  The plan of domestication must include all of the
2following:
   3a.  The name of the domesticating corporation.
   4b.  The name and jurisdiction of formation of the
5domesticated corporation.
   6c.  The manner and basis of reclassifying the shares of the
7domesticating corporation into shares or other securities,
8obligations, rights to acquire shares or other securities,
9cash, other property, or any combination of the foregoing.
   10d.  The proposed articles of incorporation and bylaws of the
11domesticated corporation.
   12e.  The other terms and conditions of the domestication.
   134.  In addition to the requirements of subsection 3, a plan
14of domestication may contain any other provision not prohibited
15by law.
   165.  The terms of a plan of domestication may be made
17dependent upon facts objectively ascertainable outside the plan
18in accordance with section 490.120, subsection 11.
   196.  If a protected agreement of a domestic domesticating
20corporation in effect immediately before the domestication
21becomes effective contains a provision applying to a merger
22of the corporation and the agreement does not refer to a
23domestication of the corporation, the provision applies to a
24domestication of the corporation as if the domestication were a
25merger until such time as the provision is first amended after
26the enactment date.
27   Sec. 127.  NEW SECTION.  490.921  Action on a plan of
28domestication.
   29In the case of a domestication of a domestic corporation
30into a foreign jurisdiction, the plan of domestication shall be
31adopted in the following manner:
   321.  The plan of domestication shall first be adopted by the
33board of directors.
   342.  a.  The plan of domestication shall then be approved by
35the shareholders. In submitting the plan of domestication to
-133-1the shareholders for approval, the board of directors shall
2recommend that the shareholders approve the plan, unless any of
3the following applies:
   4(1)  The board of directors makes a determination that
5because of conflicts of interest or other special circumstances
6it should not make such a recommendation.
   7(2)  Section 490.826 applies.
   8b.  If paragraph “a”, subparagraph (1) or (2) applies, the
9board shall inform the shareholders of the basis for its so
10proceeding.
   113.  The board of directors may set conditions for approval
12of the plan of domestication by the shareholders or the
13effectiveness of the plan of domestication.
   144.  If the approval of the shareholders is to be given at
15a meeting, the corporation shall notify each shareholder,
16regardless of whether entitled to vote, of the meeting of
17shareholders at which the plan of domestication is to be
18submitted for approval. The notice must state that the
19purpose, or one of the purposes, of the meeting is to consider
20the plan of domestication and must contain or be accompanied
21by a copy or summary of the plan. The notice must include
22or be accompanied by a copy of the articles of incorporation
23and the bylaws as they will be in effect immediately after the
24domestication.
   255.  Unless the articles of incorporation, bylaws, or the
26board of directors acting pursuant to subsection 3, require
27a greater vote or a greater quorum, approval of the plan of
28domestication requires all of the following:
   29a.  The approval of the shareholders at a meeting at which a
30quorum exists consisting of a majority of the votes entitled
31to be cast on the plan.
   32b.  Except as provided in subsection 6, the approval of
33each class or series of shares voting as a separate voting
34group at a meeting at which a quorum of the voting group exists
35consisting of a majority of the votes entitled to be cast on
-134-1the plan by that voting group.
   26.  The articles of incorporation may expressly limit or
3eliminate the separate voting rights provided in subsection
45, paragraph “b”, as to any class or series of shares, except
5when the articles of incorporation of the foreign corporation
6resulting from the domestication include what would be in
7effect an amendment that would entitle the class or series to
8vote as a separate group under section 490.1004 if it were
9a proposed amendment of the articles of incorporation of the
10domestic domesticating corporation.
   117.  If as a result of a domestication one or more
12shareholders of a domestic domesticating corporation would
13become subject to interest holder liability, approval of the
14plan of domestication shall require the signing in connection
15with the domestication, by each such shareholder, of a separate
16written consent to become subject to such interest holder
17liability, unless in the case of a shareholder that already has
18interest holder liability with respect to the domesticating
19corporation, the terms and conditions of the interest holder
20liability with respect to the domesticated corporation are
21substantially identical to those of the existing interest
22holder liability, other than for changes that eliminate or
23reduce such interest holder liability.
24   Sec. 128.  NEW SECTION.  490.922  Articles of domestication
25— effectiveness.
   261.  After a plan of domestication of a domestic corporation
27has been adopted and approved as required by this chapter, or a
28foreign corporation that is the domesticating corporation has
29approved a domestication as required under its organic law,
30articles of domestication shall be signed by the domesticating
31corporation. The articles must set forth all of the following:
   32a.  The name of the domesticating corporation and its
33jurisdiction of formation.
   34b.  The name and jurisdiction of formation of the
35domesticated corporation.
-135-   1c.  If the domesticating corporation is a domestic
2corporation, a statement that the plan of domestication
3was approved in accordance with this subchapter or, if the
4domesticating corporation is a foreign corporation, a statement
5that the domestication was approved in accordance with its
6organic law.
   72.  If the domesticated corporation is a domestic
8corporation, the articles of domestication must attach
9articles of incorporation of the domesticated corporation that
10satisfy the requirements of section 490.202. Provisions that
11would not be required to be included in restated articles of
12incorporation may be omitted from the articles of incorporation
13attached to the articles of domestication.
   143.  The articles of domestication shall be delivered to the
15secretary of state for filing, and shall take effect at the
16effective date determined in accordance with section 490.123.
   174.  If the domesticated corporation is a domestic
18corporation, the domestication becomes effective when the
19articles of domestication are effective. If the domesticated
20corporation is a foreign corporation, the domestication becomes
21effective on the later of the following:
   22a.  The date and time provided by the organic law of the
23domesticated corporation.
   24b.  When the articles of domestication are effective.
   255.  If the domesticating corporation is a foreign
26corporation that is registered to do business in this state
27under subchapter XV, its registration statement shall
28be canceled automatically when the domestication becomes
29effective.
30   Sec. 129.  NEW SECTION.  490.923  Amendment of plan of
31domestication — abandonment.
   321.  A plan of domestication of a domestic corporation may be
33amended by any of the following manners:
   34a.  In the same manner as the plan was approved, if the plan
35does not provide for the manner in which it may be amended.
-136-   1b.  In the manner provided in the plan, except that a
2shareholder that was entitled to vote on or consent to approval
3of the plan is entitled to vote on or consent to any amendment
4of the plan that will change any of the following:
   5(1)  The amount or kind of shares or other securities,
6obligations, rights to acquire shares or other securities,
7cash, other property, or any combination of the foregoing, to
8be received by any of the shareholders of the domesticating
9corporation under the plan.
   10(2)  The articles of incorporation or bylaws of the
11domesticated corporation that will be in effect immediately
12after the domestication becomes effective, except for changes
13that do not require approval of the shareholders of the
14domesticated corporation under its organic law or its proposed
15articles of incorporation or bylaws as set forth in the plan.
   16(3)  Any of the other terms or conditions of the plan, if the
17change would adversely affect the shareholder in any material
18respect.
   192.  After a plan of domestication has been adopted and
20approved by a domestic corporation as required by this part,
21and before the articles of domestication have become effective,
22the plan may be abandoned by the corporation without action by
23its shareholders in accordance with any procedures set forth in
24the plan or, if no such procedures are set forth in the plan, in
25the manner determined by the board of directors.
   263.  If a domestication is abandoned after the articles of
27domestication have been delivered to the secretary of state for
28filing but before the articles of domestication have become
29effective, articles of abandonment, signed by the domesticating
30corporation, must be delivered to the secretary of state for
31filing before the articles of domestication become effective.
32The articles of abandonment take effect upon filing, and the
33domestication shall be deemed abandoned and shall not become
34effective. The articles of abandonment must contain all of the
35following:
-137-   1a.  The name of the domesticating corporation.
   2b.  The date on which the articles of domestication were
3filed by the secretary of state.
   4c.  A statement that the domestication has been abandoned in
5accordance with this section.
6   Sec. 130.  NEW SECTION.  490.924  Effect of domestication.
   71.  When a domestication becomes effective all of the
8following apply:
   9a.  All property owned by, and every contract right possessed
10by, the domesticating corporation are the property and contract
11rights of the domesticated corporation without transfer,
12reversion, or impairment.
   13b.  All debts, obligations, and other liabilities of the
14domesticating corporation are the debts, obligations, and other
15liabilities of the domesticated corporation.
   16c.  The name of the domesticated corporation may but need not
17be substituted for the name of the domesticating corporation in
18any pending proceeding.
   19d.  The articles of incorporation and bylaws of the
20domesticated corporation become effective.
   21e.  The shares of the domesticating corporation are
22reclassified into shares or other securities, obligations,
23rights to acquire shares or other securities, cash, or other
24property in accordance with the terms of the domestication, and
25the shareholders of the domesticating corporation are entitled
26only to the rights provided to them by those terms and to any
27appraisal rights they may have under the organic law of the
28domesticating corporation.
   29f.  The domesticated corporation is all of the following:
   30(1)  Incorporated under and subject to the organic law of the
31domesticated corporation.
   32(2)  The same corporation without interruption as the
33domesticating corporation.
   34(3)  Deemed to have been incorporated on the date the
35domesticating corporation was originally incorporated.
-138-   12.  When a domestication of a domestic corporation into
2a foreign jurisdiction becomes effective, the domesticated
3corporation is deemed to have done all of the following:
   4a.  Appointed the secretary of state as its agent for
5service of process in a proceeding to enforce the rights of
6shareholders who exercise appraisal rights in connection with
7the domestication.
   8b.  Agreed that it will promptly pay the amount, if any, to
9which such shareholders are entitled under subchapter XIII.
   103.  Except as otherwise provided in the organic law or
11organic rules of a domesticating foreign corporation, the
12interest holder liability of a shareholder in a foreign
13corporation that is domesticated into this state who had
14interest holder liability in respect of such domesticating
15corporation before the domestication becomes effective shall
16be as follows:
   17a.  The domestication does not discharge that prior
18interest holder liability with respect to any interest holder
19liabilities that arose before the domestication becomes
20effective.
   21b.  The provisions of the organic law of the domesticating
22corporation shall continue to apply to the collection or
23discharge of any interest holder liabilities preserved by
24paragraph “a”, as if the domestication had not occurred.
   25c.  The shareholder shall have such rights of contribution
26from other persons as are provided by the organic law of the
27domesticating corporation with respect to any interest holder
28liabilities preserved by paragraph “a”, as if the domestication
29had not occurred.
   30d.  The shareholder shall not, by reason of such prior
31interest holder liability, have interest holder liability with
32respect to any interest holder liabilities that are incurred
33after the domestication becomes effective.
   344.  A shareholder who becomes subject to interest holder
35liability in respect of the domesticated corporation as a
-139-1result of the domestication shall have such interest holder
2liability only in respect of interest holder liabilities that
3arise after the domestication becomes effective.
   45.  A domestication does not constitute or cause the
5dissolution of the domesticating corporation.
   66.  Property held for charitable purposes under the
7laws of this state by a domestic or foreign corporation
8immediately before a domestication shall not, as a result of
9the transaction, be diverted from the objects for which it was
10donated, granted, devised, or otherwise transferred except
11and to the extent permitted by or pursuant to the laws of
12this state addressing cy pres or dealing with nondiversion of
13charitable assets.
   147.  A bequest, devise, gift, grant, or promise contained
15in a will or other instrument of donation, subscription, or
16conveyance which is made to the domesticating corporation and
17which takes effect or remains payable after the domestication
18inures to the domesticated corporation.
   198.  A trust obligation that would govern property if
20transferred to the domesticating corporation applies to
21property that is transferred to the domesticated corporation
22after the domestication takes effect.
23   Sec. 131.  NEW SECTION.  490.930  Conversion.
   241.  By complying with this subchapter, a domestic
25corporation may become any of the following:
   26a.  A domestic eligible entity.
   27b.  A foreign eligible entity if the conversion is permitted
28by the organic law of the foreign entity.
   292.  By complying with this part and applicable provisions
30of its organic law, a domestic eligible entity may become a
31domestic corporation. If procedures for the approval of a
32conversion are not provided by the organic law or organic rules
33of a domestic eligible entity, the conversion shall be adopted
34and approved in the same manner as a merger of that eligible
35entity. If the organic law or organic rules of a domestic
-140-1eligible entity do not provide procedures for the approval
2of either a conversion or a merger, a plan of conversion may
3nonetheless be adopted and approved by the unanimous consent
4of all the interest holders of such eligible entity. In
5either such case, the conversion thereafter may be effected as
6provided in the other provisions of this part; and for purposes
7of applying this subchapter in such a case all of the following
8apply:
   9a.  The eligible entity, its members or interest holders,
10eligible interests and organic rules taken together, shall be
11deemed to be a domestic business corporation, shareholders,
12shares and articles of incorporation, respectively and vice
13versa, as the context may require.
   14b.  If the business and affairs of the eligible entity are
15managed by a person or persons that are not identical to the
16members or interest holders, that person or persons shall be
17deemed to be the board of directors.
   183.  By complying with the provisions of this part applicable
19to foreign entities, a foreign eligible entity may become a
20domestic corporation if the organic law of the foreign eligible
21entity permits it to become a business corporation in another
22jurisdiction.
   234.  If a protected agreement of a domestic converting
24corporation in effect immediately before the conversion becomes
25effective contains a provision applying to a merger of the
26corporation that is a converting entity and the agreement does
27not refer to a conversion of the corporation, the provision
28applies to a conversion of the corporation as if the conversion
29were a merger, until such time as the provision is first
30amended after the enactment date.
31   Sec. 132.  NEW SECTION.  490.931  Plan of conversion.
   321.  A domestic corporation may convert to a domestic or
33foreign eligible entity under this part by approving a plan of
34conversion. The plan of conversion must include all of the
35following:
-141-   1a.  The name of the converting corporation.
   2b.  The name, jurisdiction of formation, and type of entity
3of the converted entity.
   4c.  The manner and basis of converting the shares of
5the domestic corporation into eligible interests or other
6securities, obligations, rights to acquire eligible interests
7or other securities, cash, other property, or any combination
8of the foregoing.
   9d.  The other terms and conditions of the conversion.
   10e.  The full text, as it will be in effect immediately after
11the conversion becomes effective, of the organic rules of the
12converted entity which are to be in writing.
   132.  In addition to the requirements of subsection 1, a plan
14of conversion may contain any other provision not prohibited
15by law.
   163.  The terms of a plan of conversion may be made dependent
17upon facts objectively ascertainable outside the plan in
18accordance with section 490.120, subsection 11.
19   Sec. 133.  NEW SECTION.  490.932  Action on a plan of
20conversion.
   21In the case of a conversion of a domestic corporation to a
22domestic or foreign eligible entity, the plan of conversion
23shall be adopted in the following manner:
   241.  The plan of conversion shall first be adopted by the
25board of directors.
   262.  a.  The plan of conversion shall then be approved by
27the shareholders. In submitting the plan of conversion to the
28shareholders for their approval, the board of directors must
29recommend that the shareholders approve the plan, unless any of
30the following applies:
   31(1)  The board of directors makes a determination that
32because of conflicts of interest or other special circumstances
33it should not make such a recommendation.
   34(2)  Section 490.826 applies.
   35b.  If paragraph “a”, subparagraph (1) or (2) applies, the
-142-1board of directors shall inform the shareholders of the basis
2for its so proceeding.
   33.  The board of directors may set conditions for approval of
4the plan of conversion by the shareholders or the effectiveness
5of the plan of conversion.
   64.  If the approval of the shareholders is to be given at
7a meeting, the corporation shall notify each shareholder,
8regardless of whether entitled to vote, of the meeting of
9shareholders at which the plan of conversion is to be submitted
10for approval. The notice must state that the purpose, or one
11of the purposes, of the meeting is to consider the plan of
12conversion and must contain or be accompanied by a copy or
13summary of the plan. The notice must include or be accompanied
14by a copy of the organic rules of the converted entity which
15are to be in writing as they will be in effect immediately
16after the conversion.
   175.  Unless the articles of incorporation, bylaws, or the
18board of directors acting pursuant to subsection 3, require
19a greater vote or a greater quorum, approval of the plan of
20conversion requires all of the following:
   21a.  The approval of the shareholders at a meeting at which a
22quorum exists consisting of a majority of the votes entitled
23to be cast on the plan.
   24b.  Except as provided in subsection 6, the approval of
25each class or series of shares voting as a separate voting
26group at a meeting at which a quorum of the voting group exists
27consisting of a majority of the votes entitled to be cast on
28the plan by that voting group.
   296.  If as a result of the conversion one or more shareholders
30of the converting domestic corporation would become subject to
31interest holder liability, approval of the plan of conversion
32shall require the signing in connection with the transaction,
33by each such shareholder, of a separate written consent to
34become subject to such interest holder liability.
35   Sec. 134.  NEW SECTION.  490.933  Articles of conversion —
-143-1effectiveness.
   21.  Articles of conversion shall be signed by the converting
3entity after either a plan of conversion of a domestic
4corporation has been adopted and approved as required by this
5chapter or a domestic or foreign eligible entity that is the
6converting entity has approved a conversion as required under
7its organic law. The articles of conversion must do all of the
8following:
   9a.  State the name, jurisdiction of formation, and type of
10entity of the converting entity.
   11b.  State the name, jurisdiction of formation, and type of
12entity of the converted entity.
   13c.  (1)  If the converting entity is a domestic corporation,
14state that the plan of conversion was approved in accordance
15with this part.
   16(2)  If the converting entity is an eligible entity, state
17that the conversion was approved by the eligible entity in
18accordance with its organic law.
   19(3)  If the converting entity is a domestic eligible entity
20the organic law of which does not provide for approval of the
21conversion, state that the conversion was approved by the
22domestic eligible entity in accordance with this part.
   23d.  (1)  If the converted entity is a domestic business
24corporation, or a domestic nonprofit corporation or filing
25entity, have attached the public organic record of the
26converted entity, except that provisions that would not be
27required to be included in a restated public organic record may
28be omitted.
   29(2)  If the converted entity is a domestic limited liability
30partnership, have attached the filing required to become a
31limited liability partnership.
   322.  If the converted entity is a domestic corporation,
33its articles of incorporation must satisfy the requirements
34of section 490.202, except that provisions that would not be
35required to be included in restated articles of incorporation
-144-1may be omitted from the articles of incorporation. If the
2converted entity is a domestic eligible entity, its public
3organic record, if any, must satisfy the requirements of the
4organic law of this state, except that the public organic
5record does not need to be signed.
   63.  The articles of conversion shall be delivered to the
7secretary of state for filing, and shall take effect at the
8effective date determined in accordance with section 490.123.
   94.  If a converted entity is a domestic entity, the
10conversion becomes effective when the articles of conversion
11are effective. With respect to a conversion in which the
12converted entity is a foreign eligible entity, the conversion
13itself shall become effective at the later of the following:
   14a.  The date and time provided by the organic law of that
15eligible entity.
   16b.  When the articles of conversion become effective.
   175.  Articles of conversion under this section may be combined
18with any required conversion filing under the organic law
19of a domestic eligible entity that is the converting entity
20or converted entity if the combined filing satisfies the
21requirements of both this section and the other organic law.
   226.  If the converting entity is a foreign eligible entity
23that is registered to do business in this state under a
24provision of law similar to subchapter XV, its registration
25statement or other type of foreign qualification shall be
26canceled automatically on the effective date of its conversion.
27   Sec. 135.  NEW SECTION.  490.934  Amendment of plan of
28conversion — abandonment.
   291.  A plan of conversion of a converting entity that is a
30domestic corporation may be amended in any of the following
31manners:
   32a.  In the same manner as the plan was approved, if the plan
33does not provide for the manner in which it may be amended.
   34b.  In the manner provided in the plan, except that
35shareholders that were entitled to vote on or consent to
-145-1approval of the plan are entitled to vote on or consent to any
2amendment of the plan that will change any of the following:
   3(1)  The amount or kind of eligible interests or other
4securities, obligations, rights to acquire eligible interests
5or other securities, cash, other property, or any combination
6of the foregoing, to be received by any of the shareholders of
7the converting corporation under the plan.
   8(2)  The organic rules of the converted entity that will be
9in effect immediately after the conversion becomes effective,
10except for changes that do not require approval of the eligible
11interest holders of the converted entity under its organic law
12or organic rules.
   13(3)  Any other terms or conditions of the plan, if the
14change would adversely affect such shareholders in any material
15respect.
   162.  After a plan of conversion has been approved by a
17converting entity that is a domestic corporation in the manner
18required by this part and before the articles of conversion
19become effective, the plan may be abandoned by the corporation
20without action by its shareholders in accordance with any
21procedures set forth in the plan or, if no such procedures are
22set forth in the plan, in the manner determined by the board of
23directors.
   243.  If a conversion is abandoned after the articles of
25conversion have been delivered to the secretary of state for
26filing and before the articles of conversion become effective,
27articles of abandonment, signed by the converting entity,
28must be delivered to the secretary of state for filing before
29the articles of conversion become effective. The articles
30of abandonment take effect on filing, and the conversion is
31abandoned and does not become effective. The articles of
32abandonment must contain all of the following:
   33a.  The name of the converting entity.
   34b.  The date on which the articles of conversion were filed
35by the secretary of state.
-146-   1c.  A statement that the conversion has been abandoned in
2accordance with this section.
3   Sec. 136.  NEW SECTION.  490.935  Effect of conversion.
   41.  When a conversion becomes effective all of the following
5shall apply:
   6a.  All property owned by, and every contract right possessed
7by, the converting entity remain the property and contract
8rights of the converted entity without transfer, reversion, or
9impairment.
   10b.  All debts, obligations, and other liabilities of the
11converting entity remain the debts, obligations, and other
12liabilities of the converted entity.
   13c.  The name of the converted entity may but need not be
14substituted for the name of the converting entity in any
15pending action or proceeding.
   16d.  If the converted entity is a filing entity or a domestic
17business corporation or a domestic or foreign nonprofit
18corporation, its public organic record and its private organic
19rules become effective.
   20e.  If the converted entity is a nonfiling entity, its
21private organic rules become effective.
   22f.  If the converted entity is a limited liability
23partnership, the filing required to become a limited liability
24partnership and its private organic rules become effective.
   25g.  The shares or eligible interests of the converting
26entity are reclassified into shares, eligible interests or
27other securities, obligations, rights to acquire shares,
28eligible interests or other securities, cash, or other property
29in accordance with the terms of the conversion, and the
30shareholders or interest holders of the converting entity are
31entitled only to the rights provided to them by those terms and
32to any appraisal rights they may have under the organic law of
33the converting entity.
   34h.  The converted entity is all of the following:
   35(1)  Incorporated or organized under and subject to the
-147-1organic law of the converted entity.
   2(2)  The same entity without interruption as the converting
3entity.
   4(3)  Deemed to have been incorporated or otherwise
5organized on the date that the converting entity was originally
6incorporated or organized.
   72.  When a conversion of a domestic corporation to a foreign
8eligible entity becomes effective, the converted entity is
9deemed to have done all of the following:
   10a.  Appointed the secretary of state as its agent for
11service of process in a proceeding to enforce the rights of
12shareholders who exercise appraisal rights in connection with
13the conversion.
   14b.  Agreed that it will promptly pay the amount, if any, to
15which such shareholders are entitled under subchapter XIII.
   163.  Except as otherwise provided in the articles of
17incorporation of a domestic corporation or the organic law or
18organic rules of a foreign corporation or a domestic or foreign
19eligible entity, a shareholder or eligible interest holder who
20becomes subject to interest holder liability in respect of a
21domestic corporation or eligible entity as a result of the
22conversion shall have such interest holder liability only in
23respect of interest holder liabilities that arise after the
24conversion becomes effective.
   254.  Except as otherwise provided in the organic law or the
26organic rules of the eligible entity, the interest holder
27liability of an interest holder in a converting eligible entity
28that converts to a domestic corporation who had interest holder
29liability in respect of such converting eligible entity before
30the conversion becomes effective shall be as follows:
   31a.  The conversion does not discharge that prior interest
32holder liability with respect to any interest holder
33liabilities that arose before the conversion became effective.
   34b.  The provisions of the organic law of the eligible entity
35shall continue to apply to the collection or discharge of any
-148-1interest holder liabilities preserved by paragraph “a”, as if
2the conversion had not occurred.
   3c.  The eligible interest holder shall have such rights of
4contribution from other persons as are provided by the organic
5law of the eligible entity with respect to any interest holder
6liabilities preserved by paragraph “a”, as if the conversion had
7not occurred.
   8d.  The eligible interest holder shall not, by reason of such
9prior interest holder liability, have interest holder liability
10with respect to any interest holder liabilities that arise
11after the conversion becomes effective.
   125.  A conversion does not require the converting entity
13to wind up its affairs and does not constitute or cause the
14dissolution or termination of the entity.
   156.  Property held for charitable purposes under the laws of
16this state by a corporation or a domestic or foreign eligible
17entity immediately before a conversion shall not, as a result
18of the transaction, be diverted from the objects for which it
19was donated, granted, devised, or otherwise transferred except
20and to the extent permitted by or pursuant to the laws of
21this state addressing cy pres or dealing with nondiversion of
22charitable assets.
   237.  A bequest, devise, gift, grant, or promise contained
24in a will or other instrument of donation, subscription, or
25conveyance which is made to the converting entity and which
26takes effect or remains payable after the conversion inures to
27the converted entity.
   288.  A trust obligation that would govern property if
29transferred to the converting entity applies to property that
30is transferred to the converted entity after the conversion
31takes effect.
32   Sec. 137.  Section 490.1003, Code 2020, is amended by
33striking the section and inserting in lieu thereof the
34following:
   35490.1003  Amendment by board of directors and shareholders.
-149-   1If a corporation has issued shares, an amendment to the
2articles of incorporation shall be adopted in the following
3manner:
   41.  The proposed amendment shall first be adopted by the
5board of directors.
   62.  a.  Except as provided in sections 490.1005, 490.1007,
7and 490.1008, the amendment shall then be approved by the
8shareholders. In submitting the proposed amendment to the
9shareholders for approval, the board of directors shall
10recommend that the shareholders approve the amendment, unless
11any of the following applies:
   12(1)  The board of directors makes a determination that
13because of conflicts of interest or other special circumstances
14it should not make such a recommendation.
   15(2)  Section 490.826 applies.
   16b.  If paragraph “a”, subparagraph (1) or (2) applies, the
17board must inform the shareholders of the basis for its so
18proceeding.
   193.  The board of directors may set conditions for the
20approval of the amendment by the shareholders or the
21effectiveness of the amendment.
   224.  If the amendment is required to be approved by the
23shareholders, and the approval is to be given at a meeting,
24the corporation shall notify each shareholder, regardless of
25whether entitled to vote, of the meeting of shareholders at
26which the amendment is to be submitted for approval. The
27notice must state that the purpose, or one of the purposes,
28of the meeting is to consider the amendment. The notice must
29contain or be accompanied by a copy of the amendment.
   305.  Unless the articles of incorporation or bylaws, or the
31board of directors acting pursuant to subsection 3, require a
32greater vote or a greater quorum, approval of the amendment
33requires the approval of the shareholders at a meeting at which
34a quorum consisting of a majority of the votes entitled to
35be cast on the amendment exists, and, if any class or series
-150-1of shares is entitled to vote as a separate group on the
2amendment, except as provided in section 490.1004, subsection
33, the approval of each such separate voting group at a meeting
4at which a quorum of the voting group exists consisting of a
5majority of the votes entitled to be cast on the amendment by
6that voting group.
   76.  a.  If as a result of an amendment of the articles
8of incorporation one or more shareholders of a domestic
9corporation would become subject to new interest holder
10liability, approval of the amendment requires the signing in
11connection with the amendment, by each such shareholder, of a
12separate written consent to become subject to such new interest
13holder liability.
   14b.  Paragraph “a” does not apply in the case of a shareholder
15that already has interest holder liability and the terms and
16conditions of the new interest holder liability are any of the
17following:
   18(1)  Substantially identical to those of the existing
19interest holder liability.
   20(2)  Substantially identical to those of the existing
21interest holder liability, other than changes that eliminate or
22reduce such interest holder liability.
   237.  As used in subsection 6 and section 490.1009, “new
24interest holder liability” means interest holder liability
25of a person resulting from an amendment of the articles of
26incorporation if any of the following applies:
   27a.  The person did not have interest holder liability before
28the amendment becomes effective.
   29b.  The person had interest holder liability before the
30amendment becomes effective, the terms and conditions of which
31are changed when the amendment becomes effective.
32   Sec. 138.  Section 490.1004, Code 2020, is amended by
33striking the section and inserting in lieu thereof the
34following:
   35490.1004  Voting on amendments by voting groups.
-151-   11.  The holders of the outstanding shares of a class are
2entitled to vote as a separate voting group, if shareholder
3voting is otherwise required by this chapter, on a proposed
4amendment to the articles of incorporation if the amendment
5would do any of the following:
   6a.  Effect an exchange or reclassification of all or part of
7the shares of the class into shares of another class.
   8b.  Effect an exchange or reclassification, or create the
9right of exchange, of all or part of the shares of another
10class into shares of the class.
   11c.  Change the rights, preferences, or limitations of all or
12part of the shares of the class.
   13d.  Change the shares of all or part of the class into a
14different number of shares of the same class.
   15e.  Create a new class of shares having rights or preferences
16with respect to distributions that are prior or superior to the
17shares of the class.
   18f.  Increase the rights, preferences, or number of authorized
19shares of any class that, after giving effect to the amendment,
20have rights or preferences with respect to distributions that
21are prior or superior to the shares of the class.
   22g.  Limit or deny an existing preemptive right of all or part
23of the shares of the class.
   24h.  Cancel or otherwise affect rights to distributions that
25have accumulated but not yet been authorized on all or part of
26the shares of the class.
   272.  If a proposed amendment would affect a series of a class
28of shares in one or more of the ways described in subsection 1,
29the holders of shares of that series are entitled to vote as a
30separate voting group on the proposed amendment.
   313.  If a proposed amendment that entitles the holders of
32two or more classes or series of shares to vote as separate
33voting groups under this section would affect those two or more
34classes or series in the same or a substantially similar way,
35the holders of shares of all the classes or series so affected
-152-1shall vote together as a single voting group on the proposed
2amendment, unless otherwise provided in the articles of
3incorporation or added as a condition by the board of directors
4pursuant to section 490.1003, subsection 3.
   54.  A class or series of shares is entitled to the voting
6rights granted by this section even if the articles of
7incorporation provide that the shares are nonvoting shares.
8   Sec. 139.  Section 490.1006, Code 2020, is amended by
9striking the section and inserting in lieu thereof the
10following:
   11490.1006  Articles of amendment.
   121.  After an amendment to the articles of incorporation
13has been adopted and approved in the manner required by this
14chapter and by the articles of incorporation, the corporation
15shall deliver to the secretary of state, for filing, articles
16of amendment, which must set forth all of the following:
   17a.  The name of the corporation.
   18b.  The text of each amendment adopted, or the information
19required by section 490.120, subsection 11, paragraph “e”.
   20c.  If an amendment provides for an exchange,
21reclassification, or cancellation of issued shares,
22provisions for implementing the amendment, if not contained in
23the amendment itself, which may be made dependent upon facts
24objectively ascertainable outside the articles of amendment in
25accordance with section 490.120, subsection 11, paragraph “e”.
   26d.  The date of each amendment’s adoption.
   27e.  For an amendment, the following:
   28(1)  If it was adopted by the incorporators or board of
29directors without shareholder approval, a statement that the
30amendment was duly adopted by the incorporators or by the board
31of directors, as the case may be, and that shareholder approval
32was not required.
   33(2)  If it required approval by the shareholders, a statement
34that the amendment was duly approved by the shareholders in
35the manner required by this chapter and by the articles of
-153-1incorporation.
   2(3)  If being filed pursuant to section 490.120, subsection
311, paragraph “e”, a statement to that effect.
   42.  Articles of amendment shall take effect at the effective
5date determined in accordance with section 490.123.
6   Sec. 140.  Section 490.1007, Code 2020, is amended by
7striking the section and inserting in lieu thereof the
8following:
   9490.1007  Restated articles of incorporation.
   101.  A corporation’s board of directors may restate its
11articles of incorporation at any time, without shareholder
12approval, to consolidate all amendments into a single document.
   132.  If the restated articles include one or more new
14amendments that require shareholder approval, the amendments
15shall be adopted and approved as provided in section 490.1003.
   163.  A corporation that restates its articles of
17incorporation shall deliver to the secretary of state for
18filing articles of restatement setting forth all of the
19following:
   20a.  The name of the corporation.
   21b.  The text of the restated articles of incorporation.
   22c.  A statement that the restated articles consolidate all
23amendments into a single document.
   24d.  If a new amendment is included in the restated articles,
25the statements required under section 490.1006 with respect to
26the new amendment.
   274.  Duly adopted restated articles of incorporation
28supersede the original articles of incorporation and all
29amendments to the articles of incorporation.
   305.  The secretary of state may certify restated articles of
31incorporation as the articles of incorporation currently in
32effect, without including the statements required by subsection
333, paragraph “d”.
34   Sec. 141.  Section 490.1009, Code 2020, is amended by
35striking the section and inserting in lieu thereof the
-154-1following:
   2490.1009  Effect of amendment.
   31.  An amendment to the articles of incorporation does not
4affect a cause of action existing against or in favor of the
5corporation, a proceeding to which the corporation is a party,
6or the existing rights of persons other than the shareholders.
7An amendment changing a corporation’s name does not affect a
8proceeding brought by or against the corporation in its former
9name.
   102.  A shareholder who becomes subject to new interest holder
11liability in respect of the corporation as a result of an
12amendment to the articles of incorporation shall have that new
13interest holder liability only in respect of interest holder
14liabilities that arise after the amendment becomes effective.
   153.  Except as otherwise provided in the articles of
16incorporation of the corporation, the interest holder liability
17of a shareholder who had interest holder liability in respect
18of the corporation before the amendment becomes effective and
19has new interest holder liability after the amendment becomes
20effective shall be as follows:
   21a.  The amendment does not discharge that prior interest
22holder liability with respect to any interest holder
23liabilities that arose before the amendment becomes effective.
   24b.  The provisions of the articles of incorporation of
25the corporation relating to interest holder liability as in
26effect immediately prior to the amendment shall continue to
27apply to the collection or discharge of any interest holder
28liabilities preserved by paragraph “a”, as if the amendment had
29not occurred.
   30c.  The shareholder shall have such rights of contribution
31from other persons as are provided by the articles of
32incorporation relating to interest holder liability as in
33effect immediately prior to the amendment with respect to any
34interest holder liabilities preserved by paragraph “a”, as if
35the amendment had not occurred.
-155-   1d.  The shareholder shall not, by reason of such prior
2interest holder liability, have interest holder liability with
3respect to any interest holder liabilities that arise after the
4amendment becomes effective.
5   Sec. 142.  Section 490.1020, Code 2020, is amended by
6striking the section and inserting in lieu thereof the
7following:
   8490.1020  Authority to amend.
   91.  A corporation’s shareholders may amend or repeal the
10corporation’s bylaws.
   112.  A corporation’s board of directors may amend or repeal
12the corporation’s bylaws unless any of the following apply:
   13a.  The articles of incorporation, section 490.1021, or, if
14applicable, section 490.1022, reserve that power exclusively to
15the shareholders in whole or part.
   16b.  Except as provided in section 490.206, subsection 4,
17the shareholders in amending, repealing, or adopting a bylaw
18expressly provide that the board of directors shall not amend,
19repeal, or adopt that bylaw.
   203.  A shareholder of the corporation does not have a vested
21property right resulting from any provision in the bylaws.
22   Sec. 143.  Section 490.1021, Code 2020, is amended by
23striking the section and inserting in lieu thereof the
24following:
   25490.1021  Bylaw increasing quorum or voting requirement for
26directors.
   271.  A bylaw that increases a quorum or voting requirement
28for the board of directors or that requires a meeting of
29shareholders to be held at a place may be amended or repealed
30as follows:
   31a.  If originally adopted by the shareholders, only by the
32shareholders, unless the bylaw otherwise provides.
   33b.  If adopted by the board of directors, either by the
34shareholders or by the board of directors.
   352.  A bylaw adopted or amended by the shareholders that
-156-1increases a quorum or voting requirement for the board of
2directors may provide that it can be amended or repealed only
3by a specified vote of either the shareholders or the board of
4directors.
   53.  Action by the board of directors under subsection 1
6to amend or repeal a bylaw that changes a quorum or voting
7requirement for the board of directors shall meet the same
8quorum requirement and be adopted by the same vote required to
9take action under the quorum and voting requirement then in
10effect or proposed to be adopted, whichever is greater.
11   Sec. 144.  NEW SECTION.  490.1022  Bylaw provisions relating
12to the election of directors.
   131.  Unless the articles of incorporation specifically
14prohibit the adoption of a bylaw pursuant to this section,
15alter the vote specified in section 490.728, subsection 1, or
16provide for cumulative voting, a corporation may elect in its
17bylaws to be governed in the election of directors as follows:
   18a.  Each vote entitled to be cast may be voted for or against
19up to that number of candidates that is equal to the number
20of directors to be elected, or a shareholder may indicate an
21abstention, but without cumulating the votes.
   22b.  To be elected, a nominee shall have received a plurality
23of the votes cast by holders of shares entitled to vote
24in the election at a meeting at which a quorum is present,
25provided that a nominee who is elected but receives more votes
26against than for election shall serve as a director for a term
27that shall terminate on the date that is the earlier of the
28following:
   29(1)  (a)  Ninety days from the date on which the voting
30results are determined pursuant to section 490.729, subsection
312, paragraph “e”.
   32(b)  The date on which an individual is selected by the
33board of directors to fill the office held by such director,
34which selection shall be deemed to constitute the filling of a
35vacancy by the board to which section 490.810 applies.
-157-   1(2)  Subject to subsection 1, paragraph “c”, a nominee who is
2elected but receives more votes against than for election shall
3not serve as a director beyond the ninety-day period provided
4in subparagraph division (a).
   5c.  The board of directors may select any qualified
6individual to fill the office held by a director who received
7more votes against than for election.
   82.  a.  Subsection 1 does not apply to an election of
9directors by a voting group if any of the fo1lowing applies:
   10(1)  At the expiration of the time fixed under a provision
11requiring advance notification of director candidates.
   12(2)  Absent such a provision, at a time fixed by the board of
13directors which is not more than fourteen days before notice
14is given of the meeting at which the election is to occur,
15there are more candidates for election by the voting group than
16the number of directors to be elected, one or more of whom are
17properly proposed by shareholders.
   18b.  An individual shall not be considered a candidate for
19purposes of paragraph “a”, if the board of directors determines
20before the notice of meeting is given that such individual’s
21candidacy does not create a bona fide election contest.
   223.  A bylaw electing to be governed by this section may be
23repealed under any of the following circumstances:
   24a.  If originally adopted by the shareholders, only by the
25shareholders, unless the bylaw otherwise provides.
   26b.  If adopted by the board of directors, by the board of
27directors or the shareholders.
28   Sec. 145.  Section 490.1101, Code 2020, is amended by
29striking the section and inserting in lieu thereof the
30following:
   31490.1101  Subchapter definitions.
   32As used in this subchapter:
   331.  “Acquired entity” means the domestic or foreign
34corporation or eligible entity that will have all of one or
35more classes or series of its shares or eligible interests
-158-1acquired in a share exchange.
   22.  “Acquiring entity” means the domestic or foreign
3corporation or eligible entity that will acquire all of one or
4more classes or series of shares or eligible interests of the
5acquired entity in a share exchange.
   63.  “New interest holder liability” means interest holder
7liability of a person, resulting from a merger or share
8exchange, that is any of the following:
   9a.  In respect of an entity which is different from the
10entity in which the person held shares or eligible interests
11immediately before the merger or share exchange became
12effective.
   13b.  In respect of the same entity as the one in which the
14person held shares or eligible interests immediately before
15the merger or share exchange became effective if any of the
16following apply:
   17(1)  The person did not have interest holder liability
18immediately before the merger or share exchange became
19effective.
   20(2)  The person had interest holder liability immediately
21before the merger or share exchange became effective, the terms
22and conditions of which were changed when the merger or share
23exchange became effective.
   244.  “Party to a merger” means any domestic or foreign
25corporation or eligible entity that will merge under a plan of
26merger but does not include a survivor created by the merger.
   275.  “Survivor” in a merger means the domestic or foreign
28corporation or eligible entity into which one or more other
29corporations or eligible entities are merged.
30   Sec. 146.  Section 490.1102, Code 2020, is amended by
31striking the section and inserting in lieu thereof the
32following:
   33490.1102  Merger.
   341.  By complying with this subchapter, all of the following
35apply:
-159-   1a.  One or more domestic business corporations may merge
2with one or more domestic or foreign business corporations or
3eligible entities pursuant to a plan of merger, resulting in
4a survivor.
   5b.  Two or more foreign business corporations or domestic or
6foreign eligible entities may merge, resulting in a survivor
7that is a domestic business corporation created in the merger.
   82.  By complying with the provisions of this subchapter
9applicable to foreign entities, a foreign business corporation
10or a foreign eligible entity may be a party to a merger with
11a domestic business corporation, or may be created as the
12survivor in a merger in which a domestic business corporation
13is a party, but only if the merger is permitted by the organic
14law of the foreign business corporation or eligible entity.
   153.  If the organic law or organic rules of a domestic
16eligible entity do not provide procedures for the approval
17of a merger, a plan of merger may nonetheless be adopted
18and approved by the unanimous consent of all of the interest
19holders of such eligible entity, and the merger may thereafter
20by effected as provided in the other provisions of this
21subchapter; and for the purposes of applying this subchapter in
22such a case all of the following shall apply:
   23a.  The eligible entity, its members or interest holders,
24eligible interests and articles of incorporation or other
25organic rules taken together shall be deemed to be a domestic
26business corporation, shareholders, shares and articles of
27incorporation, respectively and vice versa as the context may
28require.
   29b.  If the business and affairs of the eligible entity are
30managed by a person or persons that are not identical to the
31members or interest holders, that group shall be deemed to be
32the board of directors.
   334.  The plan of merger must include all of the following:
   34a.  As to each party to the merger, its name, jurisdiction of
35formation, and type of entity.
-160-   1b.  The survivor’s name, jurisdiction of formation, and type
2of entity, and, if the survivor is to be created in the merger,
3a statement to that effect.
   4c.  The terms and conditions of the merger.
   5d.  The manner and basis of converting the shares of
6each merging domestic or foreign business corporation and
7eligible interests of each merging domestic or foreign eligible
8entity into shares or other securities, eligible interests,
9obligations, rights to acquire shares, other securities or
10eligible interests, cash, other property, or any combination
11of the foregoing.
   12e.  The articles of incorporation of any domestic or foreign
13business or nonprofit corporation, or the public organic
14record of any domestic or foreign unincorporated entity, to be
15created by the merger, or if a new domestic or foreign business
16or nonprofit corporation or unincorporated entity is not to
17be created by the merger, any amendments to the survivor’s
18articles of incorporation or other public organic record.
   19f.  Any other provisions required by the laws under which any
20party to the merger is organized or by which it is governed, or
21by the articles of incorporation or organic rules of any such
22party.
   235.  In addition to the requirements of subsection 4, a plan
24of merger may contain any other provision not prohibited by
25law.
   266.  Terms of a plan of merger may be made dependent on facts
27objectively ascertainable outside the plan in accordance with
28section 490.120, subsection 11.
   297.  A plan of merger may be amended only with the consent of
30each party to the merger, except as provided in the plan. A
31domestic party to a merger may approve an amendment to a plan
32in any of the following manners:
   33a.  In the same manner as the plan was approved, if the plan
34does not provide for the manner in which it may be amended.
   35b.  In the manner provided in the plan, except that
-161-1shareholders, members, or interest holders that were entitled
2to vote on or consent to approval of the plan are entitled
3to vote on or consent to any amendment of the plan that will
4change any of the following:
   5(1)  The amount or kind of shares or other securities,
6eligible interests, obligations, rights to acquire shares,
7other securities or eligible interests, cash, or other property
8to be received under the plan by the shareholders, members, or
9interest holders of any party to the merger.
   10(2)  The articles of incorporation of any domestic or foreign
11business or nonprofit corporation, or the organic rules of
12any unincorporated entity, that will be the survivor of the
13merger, except for changes permitted by section 490.1005 or by
14comparable provisions of the organic law of any such foreign
15corporation or domestic or foreign nonprofit corporation or
16unincorporated entity.
   17(3)  Any of the other terms or conditions of the plan if the
18change would adversely affect such shareholders, members, or
19interest holders in any material respect.
20   Sec. 147.  Section 490.1103, Code 2020, is amended by
21striking the section and inserting in lieu thereof the
22following:
   23490.1103  Share exchange.
   241.  By complying with this subchapter all of the following
25apply:
   26a.  A domestic corporation may acquire all of the shares of
27one or more classes or series of shares of another domestic or
28foreign corporation, or all of the eligible interests of one or
29more classes or series of interests of a domestic or foreign
30eligible entity, in exchange for shares or other securities,
31eligible interests, obligations, rights to acquire shares or
32other securities or eligible interests, cash, other property,
33or any combination of the foregoing, pursuant to a plan of
34share exchange.
   35b.  All of the shares of one or more classes or series of
-162-1shares of a domestic corporation may be acquired by another
2domestic or foreign corporation or eligible entity, in
3exchange for shares or other securities, eligible interests,
4obligations, rights to acquire shares or other securities or
5eligible interests, cash, other property, or any combination of
6the foregoing, pursuant to a plan of share exchange.
   72.  A foreign corporation or eligible entity may be the
8acquired entity in a share exchange only if the share exchange
9is permitted by the organic law of that corporation or other
10entity.
   113.  If the organic law or organic rules of a domestic
12eligible entity do not provide procedures for the approval
13of a share exchange, a plan of share exchange may be adopted
14and approved, and the share exchange effected, in accordance
15with the procedures, if any, for a merger. If the organic
16law or organic rules of a domestic eligible entity do not
17provide procedures for the approval of either a share exchange
18or a merger, a plan of share exchange may nonetheless be
19adopted and approved by the unanimous consent of all of the
20interest holders of such eligible entity whose interests will
21be exchanged under the plan of share exchange, and the share
22exchange may thereafter be effected as provided in the other
23provisions of this subchapter; and for purposes of applying
24this subchapter in such a case all of the following apply:
   25a.  The eligible entity, its interest holders, interests,
26and articles of incorporation or other organic rules taken
27together shall be deemed to be a domestic business corporation,
28shareholders, shares and articles of incorporation,
29respectively and vice versa as the context may require.
   30b.  If the business and affairs of the eligible entity are
31managed by a person or persons that are not identical to the
32members or interest holders, that person or those persons shall
33be deemed to be the board of directors.
   344.  The plan of share exchange must include all of the
35following:
-163-   1a.  The name of each domestic or foreign corporation or other
2eligible entity the shares or eligible interests of which will
3be acquired and the name of the domestic or foreign corporation
4or eligible entity that will acquire those shares or eligible
5interests.
   6b.  The terms and conditions of the share exchange.
   7c.  The manner and basis of exchanging shares of a domestic
8or foreign corporation or eligible interests in a domestic or
9foreign eligible entity the shares or eligible interests of
10which will be acquired under the share exchange for shares or
11other securities, eligible interests, obligations, rights to
12acquire shares, other securities, or eligible interests, cash,
13other property, or any combination of the foregoing.
   14d.  Any other provisions required by the organic law
15governing the acquired entity or its articles of incorporation
16or organic rules.
   175.  The terms of a plan of share exchange may be made
18dependent on facts objectively ascertainable outside the plan
19in accordance with section 490.120, subsection 11.
   206.  A plan of share exchange may be amended only with the
21consent of each party to the share exchange, except as provided
22in the plan. A domestic entity may approve an amendment to a
23plan in any of the following manners:
   24a.  In the same manner as the plan was approved, if the plan
25does not provide for the manner in which it may be amended.
   26b.  In the manner provided in the plan, except that
27shareholders, members, or interest holders that were entitled
28to vote on or consent to approval of the plan are entitled
29to vote on or consent to any amendment of the plan that will
30change any of the following:
   31(1)  The amount or kind of shares or other securities,
32eligible interests, obligations, rights to acquire shares,
33other securities or eligible interests, cash, or other property
34to be received under the plan by the shareholders, members, or
35interest holders of the acquired entity.
-164-   1(2)  Any of the other terms or conditions of the plan if the
2change would adversely affect such shareholders, members, or
3interest holders in any material respect.
4   Sec. 148.  Section 490.1104, Code 2020, is amended by
5striking the section and inserting in lieu thereof the
6following:
   7490.1104  Action on a plan of merger or share exchange.
   8In the case of a domestic corporation that is a party to a
9merger or the acquired entity in a share exchange, the plan
10of merger or share exchange shall be adopted in the following
11manner:
   121.  The plan of merger or share exchange shall first be
13adopted by the board of directors.
   142.  a.  Except as provided in subsections 8, 10, and 12, and
15in section 490.1105, the plan of merger or share exchange shall
16then be approved by the shareholders. In submitting the plan
17of merger or share exchange to the shareholders for approval,
18the board of directors shall recommend that the shareholders
19approve the plan, or, in the case of an offer referred to in
20subsection 10, paragraph “b”, that the shareholders tender
21their shares to the offeror in response to the offer, unless
22any of the following apply:
   23(1)  The board of directors makes a determination that
24because of conflicts of interest or other special circumstances
25it should not make such a recommendation.
   26(2)  Section 490.826 applies.
   27b.  If either paragraph “a”, subparagraph (1) or (2),
28applies, the board shall inform the shareholders of the basis
29for its so proceeding.
   303.  The board of directors may set conditions for the
31approval of the plan of merger or share exchange by the
32shareholders or the effectiveness of the plan of merger or
33share exchange.
   344.  If the plan of merger or share exchange is required
35to be approved by the shareholders, and if the approval is
-165-1to be given at a meeting, the corporation shall notify each
2shareholder, regardless of whether entitled to vote, of the
3meeting of shareholders at which the plan is to be submitted
4for approval. The notice must state that the purpose, or one
5of the purposes, of the meeting is to consider the plan and
6must contain or be accompanied by a copy or summary of the
7plan. If the corporation is to be merged into an existing
8foreign or domestic corporation or eligible entity, the notice
9must also include or be accompanied by a copy or summary of the
10articles of incorporation and bylaws or the organic rules of
11that corporation or eligible entity. If the corporation is to
12be merged with a domestic or foreign corporation or eligible
13entity and a new domestic or foreign corporation or eligible
14entity is to be created pursuant to the merger, the notice
15must include or be accompanied by a copy or a summary of the
16articles of incorporation and bylaws or the organic rules of
17the new corporation or eligible entity.
   185.  Unless the articles of incorporation, bylaws, or the
19board of directors acting pursuant to subsection 3, require
20a greater vote or a greater quorum, approval of the plan
21of merger or share exchange requires the approval of the
22shareholders at a meeting at which a quorum exists consisting
23of a majority of the votes entitled to be cast on the plan,
24and, if any class or series of shares is entitled to vote as
25a separate group on the plan of merger or share exchange, the
26approval of each such separate voting group at a meeting at
27which a quorum of the voting group is present consisting of
28a majority of the votes entitled to be cast on the merger or
29share exchange by that voting group.
   306.  Subject to subsection 7, separate voting by voting groups
31is required for each of the following:
   32a.  On a plan of merger, by each class or series of shares
33that are any of the following:
   34(1)  To be converted under the plan of merger into shares,
35other securities, eligible interests, obligations, rights to
-166-1acquire shares, other securities or eligible interests, cash,
2other property, or any combination of the foregoing.
   3(2)  Entitled to vote as a separate group on a provision in
4the plan that constitutes a proposed amendment to the articles
5of incorporation of a surviving corporation that requires
6action by separate voting groups under section 490.1004.
   7b.  On a plan of share exchange, by each class or series
8of shares included in the exchange, with each class or series
9constituting a separate voting group.
   10c.  On a plan of merger or share exchange, if the voting
11group is entitled under the articles of incorporation to
12vote as a voting group to approve a plan of merger or share
13exchange, respectively.
   147.  The articles of incorporation may expressly limit or
15eliminate the separate voting rights provided in subsection 6,
16paragraph “a”, subparagraph (1), and subsection 6, paragraph
17“b”, as to any class or series of shares, except when all of the
18following apply:
   19a.  The plan of merger or share exchange includes what is
20or would be in effect an amendment subject to subsection 6,
21paragraph “a”, subparagraph (2).
   22b.  The plan of merger or share exchange will not effect a
23substantive business combination.
   248.  Unless the articles of incorporation otherwise provide,
25approval by the corporation’s shareholders of a plan of
26merger is not required if all of the following conditions are
27satisfied:
   28a.  The corporation will survive the merger.
   29b.  Except for amendments permitted by section 490.1005, its
30articles of incorporation will not be changed.
   31c.  Each shareholder of the corporation whose shares were
32outstanding immediately before the effective date of the merger
33or share exchange will hold the same number of shares, with
34identical preferences, rights, and limitations, immediately
35after the effective date of the merger.
-167-   1d.  The issuance in the merger of shares or other securities
2convertible into or rights exercisable for shares does not
3require a vote under section 490.621, subsection 6.
   49.  a.  If, as a result of a merger or share exchange, one
5or more shareholders of a domestic corporation would become
6subject to new interest holder liability, approval of the plan
7of merger or share exchange requires the signing in connection
8with the transaction, by each such shareholder, of a separate
9written consent to become subject to such new interest holder
10liability.
   11b.  Paragraph “a” does not apply in the case of a shareholder
12that already has interest holder liability with respect to such
13domestic corporation, if all of the following apply:
   14(1)  The new interest holder liability is with respect to
15a domestic or foreign corporation, which may be a different
16or the same domestic corporation in which the person is a
17shareholder.
   18(2)  The terms and conditions of the new interest holder
19liability are substantially identical to those of the existing
20interest holder liability, other than for changes that
21eliminate or reduce such interest holder liability.
   2210.  Unless the articles of incorporation otherwise provide,
23approval by the shareholders of a plan of merger or share
24exchange is not required if all of the following apply:
   25a.  The plan of merger or share exchange expressly permits or
26requires the merger or share exchange to be effected under this
27subsection and provides that, if the merger or share exchange
28is to be effected under this subsection, the merger or share
29exchange will be effected as soon as practicable following the
30satisfaction of the requirement set forth in paragraph “f”.
   31b.  Another party to the merger, the acquiring entity in
32the share exchange, or a parent of another party to the merger
33or the acquiring entity in the share exchange, makes an offer
34to purchase, on the terms provided in the plan of merger or
35share exchange, any and all of the outstanding shares of the
-168-1corporation that, absent this subsection, would be entitled to
2vote on the plan of merger or share exchange, except that the
3offer may exclude shares of the corporation that are owned at
4the commencement of the offer by the corporation, the offeror,
5or any parent of the offeror, or by any wholly owned subsidiary
6of any of the foregoing.
   7c.  The offer discloses that the plan of merger or share
8exchange provides that the merger or share exchange will be
9effected as soon as practicable following the satisfaction of
10the requirement set forth in paragraph “f” and that the shares
11of the corporation that are not tendered in response to the
12offer will be treated as set forth in paragraph “h”.
   13d.  The offer remains open for at least ten days.
   14e.  The offeror purchases all shares properly tendered in
15response to the offer and not properly withdrawn.
   16f.  The shares listed below are collectively entitled to cast
17at least the minimum number of votes on the merger or share
18exchange that, absent this subsection, would be required by
19this subchapter and by the articles of incorporation for the
20approval of the merger or share exchange by the shareholders
21and by any other voting group entitled to vote on the merger
22or share exchange at a meeting at which all shares entitled to
23vote on the approval were present and voted:
   24(1)  Shares purchased by the offeror in accordance with the
25offer.
   26(2)  Shares otherwise owned by the offeror or by any parent
27of the offeror or any wholly owned subsidiary of any of the
28foregoing.
   29(3)  Shares subject to an agreement that they are to be
30transferred, contributed, or delivered to the offeror, any
31parent of the offeror, or any wholly owned subsidiary of any of
32the foregoing in exchange for shares or eligible interests in
33such offeror, parent, or subsidiary.
   34g.  The offeror or a wholly owned subsidiary of the offeror
35merges with or into, or effects a share exchange in which it
-169-1acquires shares of, the corporation.
   2h.  Each outstanding share of each class or series of shares
3of the corporation that the offeror is offering to purchase
4in accordance with the offer, and that is not purchased in
5accordance with the offer, is to be converted in the merger
6into, or into the right to receive, or is to be exchanged
7in the share exchange for, or for the right to receive,
8the same amount and kind of securities, eligible interests,
9obligations, rights, cash, or other property to be paid or
10exchanged in accordance with the offer for each share of
11that class or series of shares that is tendered in response
12to the offer, except that shares of the corporation that are
13owned by the corporation or that are described in paragraph
14“f”, subparagraph (2) or (3), need not be converted into or
15exchanged for the consideration described in this paragraph
16“h”.
   1711.  As used in subsection 10:
   18a.  “Offer” means the offer referred to in subsection 10,
19paragraph “b”.
   20b.  “Offeror” means the person making the offer.
   21c.  “Parent” of an entity means a person that owns, directly
22or indirectly, through one or more wholly owned subsidiaries,
23all of the outstanding shares of or eligible interests in that
24entity.
   25d.  Shares tendered in response to the offer shall be deemed
26to have been “purchased” in accordance with the offer at the
27earliest time as of which the following applies:
   28(1)  The offeror has irrevocably accepted those shares for
29payment.
   30(2)  Either of the following applies:
   31(a)  In the case of shares represented by certificates, the
32offeror, or the offeror’s designated depository or other agent,
33has physically received the certificates representing those
34shares.
   35(b)  In the case of shares without certificates, those shares
-170-1have been transferred into the account of the offeror or its
2designated depository or other agent, or an agent’s message
3relating to those shares has been received by the offeror or
4its designated depository or other agent.
   5e.  “Wholly owned subsidiary” of a person means an entity of
6or in which that person owns, directly or indirectly, through
7one or more wholly owned subsidiaries, all of the outstanding
8shares or eligible interests.
   912.  Unless the articles of incorporation otherwise provide,
10all of the following applies:
   11a.  Approval of a plan of share exchange by the shareholders
12of a domestic corporation is not required if the corporation is
13the acquiring entity in the share exchange.
   14b.  Shares not to be exchanged under the plan of share
15exchange are not entitled to vote on the plan.
16   Sec. 149.  Section 490.1105, Code 2020, is amended by
17striking the section and inserting in lieu thereof the
18following:
   19490.1105  Merger between parent and subsidiary or between
20subsidiaries.
   211.  A domestic or foreign parent entity that owns shares of
22a domestic corporation which carry at least ninety percent of
23the voting power of each class and series of the outstanding
24shares of the subsidiary that has voting power may do any of
25the following:
   26a.  Merge the subsidiary into itself, if it is a domestic
27or foreign corporation or eligible entity, or into another
28domestic or foreign corporation or eligible entity in which the
29parent entity owns at least ninety percent of the voting power
30of each class and series of the outstanding shares or eligible
31interests which have voting power.
   32b.  Merge itself, if it is a domestic or foreign corporation
33or eligible entity, into such subsidiary, in either case
34without the approval of the board of directors or shareholders
35of the subsidiary, unless the articles of incorporation
-171-1or organic rules of the parent entity or the articles of
2incorporation of the subsidiary corporation otherwise provide.
   3c.  Section 490.1104, subsection 9, applies to a merger under
4this section. The articles of merger relating to a merger
5under this section do not need to be signed by the subsidiary.
   62.  A parent entity shall, within ten days after the
7effective date of a merger approved under subsection 1, notify
8each of the subsidiary’s shareholders that the merger has
9become effective.
   103.  Except as provided in subsections 1 and 2, a merger
11between a parent entity and a domestic subsidiary corporation
12shall be governed by the provisions of this subchapter
13applicable to mergers generally.
14   Sec. 150.  Section 490.1106, Code 2020, is amended by
15striking the section and inserting in lieu thereof the
16following:
   17490.1106  Articles of merger or share exchange.
   181.  After a plan of merger has been adopted and approved as
19required by this chapter, or if the merger is being effected
20under section 490.1102, subsection 1, paragraph “b”, the merger
21has been approved as required by the organic law governing the
22parties to the merger, then articles of merger shall be signed
23by each party to the merger except as provided in section
24490.1105, subsection 1. The articles must set forth all of the
25following:
   26a.  The name, jurisdiction of formation, and type of entity
27of each party to the merger.
   28b.  The name, jurisdiction of formation, and type of entity
29of the survivor.
   30c.  If the survivor of the merger is a domestic corporation
31and its articles of incorporation are amended, or if a new
32domestic corporation is created as a result of the merger, any
33of the following:
   34(1)  The amendments to the survivor’s articles of
35incorporation.
-172-   1(2)  The articles of incorporation of the new corporation.
   2d.  If the survivor of the merger is a domestic eligible
3entity and its public organic record is amended, or if a new
4domestic eligible entity is created as a result of the merger,
5any of the following:
   6(1)  The amendments to the public organic record of the
7survivor.
   8(2)  The public organic record of the new eligible entity.
   9e.  If the plan of merger required approval by the
10shareholders of a domestic corporation that is a party to the
11merger, a statement that the plan was duly approved by the
12shareholders and, if voting by any separate voting group was
13required, by each such separate voting group, in the manner
14required by this chapter and the articles of incorporation.
   15f.  If the plan of merger or share exchange did not require
16approval by the shareholders of a domestic corporation that is
17a party to the merger, a statement to that effect.
   18g.  As to each foreign corporation that is a party to the
19merger, a statement that the participation of the foreign
20corporation was duly authorized as required by its organic law.
   21h.  As to each domestic or foreign eligible entity that is a
22party to the merger, a statement that the merger was approved
23in accordance with its organic law or section 490.1102,
24subsection 3.
   25i.  If the survivor is created by the merger and is a
26domestic limited liability partnership, the filing required to
27become a limited liability partnership, as an attachment.
   282.  After a plan of share exchange in which the acquired
29entity is a domestic corporation or eligible entity has been
30adopted and approved as required by this chapter, articles
31of share exchange shall be signed by the acquired entity and
32the acquiring entity. The articles shall set forth all of the
33following:
   34a.  The name of the acquired entity.
   35b.  The name, jurisdiction of formation, and type of entity
-173-1of the domestic or foreign corporation or eligible entity that
2is the acquiring entity.
   3c.  A statement that the plan of share exchange was duly
4approved by the acquired entity by all of the following:
   5(1)  The required vote or consent of each class or series of
6shares or eligible interests included in the exchange.
   7(2)  The required vote or consent of each other class or
8series of shares or eligible interests entitled to vote on
9approval of the exchange by the articles of incorporation or
10organic rules of the acquired entity or section 490.1103,
11subsection 3.
   123.  In addition to the requirements of subsection 1 or 2,
13articles of merger or share exchange may contain any other
14provision not prohibited by law.
   154.  The articles of merger or share exchange shall be
16delivered to the secretary of state for filing and, subject to
17subsection 5, the merger or share exchange shall take effect
18on the effective date determined in accordance with section
19490.123.
   205.  With respect to a merger in which one or more foreign
21entities is a party or a foreign entity created by the merger
22is the survivor, the merger itself shall become effective at
23the later of the following:
   24a.  When all documents required to be filed in foreign
25jurisdictions to effect the merger have become effective.
   26b.  When the articles of merger take effect.
   276.  Articles of merger filed under this section may be
28combined with any filing required under the organic law
29governing any domestic eligible entity involved in the
30transaction if the combined filing satisfies the requirements
31of both this section and the other organic law.
32   Sec. 151.  Section 490.1107, Code 2020, is amended by
33striking the section and inserting in lieu thereof the
34following:
   35490.1107  Effect of merger or share exchange.
-174-   11.  When a merger becomes effective, all of the following
2apply:
   3a.  The domestic or foreign corporation or eligible entity
4that is designated in the plan of merger as the survivor
5continues or comes into existence, as the case may be.
   6b.  The separate existence of every domestic or foreign
7corporation or eligible entity that is a party to the merger,
8other than the survivor, ceases.
   9c.  All property owned by, and every contract right possessed
10by, each domestic or foreign corporation or eligible entity
11that is a party to the merger, other than the survivor, are the
12property and contract rights of the survivor without transfer,
13reversion, or impairment.
   14d.  All debts, obligations, and other liabilities of each
15domestic or foreign corporation or eligible entity that is
16a party to the merger, other than the survivor, are debts,
17obligations, or liabilities of the survivor.
   18e.  The name of the survivor may, but need not be,
19substituted in any pending proceeding for the name of any party
20to the merger whose separate existence ceased in the merger.
   21f.  If the survivor is a domestic entity, the articles of
22incorporation and bylaws or the organic rules of the survivor
23are amended to the extent provided in the plan of merger.
   24g.  The articles of incorporation and bylaws or the organic
25rules of a survivor that is a domestic entity and is created by
26the merger become effective.
   27h.  The shares of each domestic or foreign corporation
28that is a party to the merger, and the eligible interests in
29an eligible entity that is a party to a merger, that are to
30be converted in accordance with the terms of the merger into
31shares, or other securities, eligible interests, obligations,
32rights to acquire shares, other securities, or eligible
33interests, cash, other property, or any combination of the
34foregoing, are converted, and the former holders of such shares
35or eligible interests are entitled only to the rights provided
-175-1to them by those terms or to any rights they may have under
2subchapter XIII or the organic law governing the eligible
3entity or foreign corporation.
   4i.  Except as provided by law or the terms of the merger,
5all the rights, privileges, franchises, and immunities of each
6entity that is a party to the merger, other than the survivor,
7are the rights, privileges, franchises, and immunities of the
8survivor.
   9j.  If the survivor exists before the merger, all of the
10following apply:
   11(1)  All the property and contract rights of the survivor
12remain its property and contract rights without transfer,
13reversion, or impairment.
   14(2)  The survivor remains subject to all its debts,
15obligations, and other liabilities.
   16(3)  Except as provided by law or the plan of merger, the
17survivor continues to hold all of its rights, privileges,
18franchises, and immunities.
   192.  When a share exchange becomes effective, the shares
20or eligible interests in the acquired entity that are to be
21exchanged for shares or other securities, eligible interests,
22obligations, rights to acquire shares, other securities or
23eligible interests, cash, other property, or any combination of
24the foregoing, are entitled only to the rights provided to them
25in the plan of share exchange or to any rights they may have
26under subchapter XIII or under the organic law governing the
27acquired entity.
   283.  Except as otherwise provided in the articles of
29incorporation of a domestic corporation or the organic law
30governing or organic rules of a foreign corporation or a
31domestic or foreign eligible entity, the effect of a merger or
32share exchange on interest holder liability is as follows:
   33a.  A person who becomes subject to new interest holder
34liability in respect of an entity as a result of a merger or
35share exchange shall have that new interest holder liability
-176-1only in respect of interest holder liabilities that arise after
2the merger or share exchange becomes effective.
   3b.  If a person had interest holder liability with respect to
4a party to the merger or the acquired entity before the merger
5or share exchange becomes effective with respect to shares or
6eligible interests of such party or acquired entity which were
7exchanged in the merger or share exchange, were canceled in
8the merger, or the terms and conditions of which relating to
9interest holder liability were amended pursuant to the merger,
10then all of the following apply:
   11(1)  The merger or share exchange does not discharge that
12prior interest holder liability with respect to any interest
13holder liabilities that arose before the merger or share
14exchange becomes effective.
   15(2)  The provisions of the organic law governing any entity
16for which the person had that prior interest holder liability
17shall continue to apply to the collection or discharge of any
18interest holder liabilities preserved by subparagraph (1), as
19if the merger or share exchange had not occurred.
   20(3)  The person shall have such rights of contribution from
21other persons as are provided by the organic law governing the
22entity for which the person had that prior interest holder
23liability with respect to any interest holder liabilities
24preserved by subparagraph (1), as if the merger or share
25exchange had not occurred.
   26(4)  The person shall not, by reason of such prior interest
27holder liability, have interest holder liability with respect
28to any interest holder liabilities that arise after the merger
29or share exchange becomes effective.
   30c.  If a person has interest holder liability both before
31and after a merger becomes effective with unchanged terms and
32conditions with respect to the entity that is the survivor by
33reason of owning the same shares or eligible interests before
34and after the merger becomes effective, the merger has no
35effect on such interest holder liability.
-177-   1d.  A share exchange has no effect on interest holder
2liability related to shares or eligible interests of the
3acquired entity that were not exchanged in the share exchange.
   44.  Upon a merger becoming effective, a foreign corporation,
5or a foreign eligible entity, that is the survivor of the
6merger is deemed to have done all of the following:
   7a.  Appointed the secretary of state as its agent for
8service of process in a proceeding to enforce the rights of
9shareholders of each domestic corporation that is a party to
10the merger who exercise appraisal rights.
   11b.  Agreed that it will promptly pay the amount, if any, to
12which such shareholders are entitled under subchapter XIII.
   135.  Except as provided in the organic law governing a party
14to a merger or in its articles of incorporation or organic
15rules, the merger does not give rise to any rights that an
16interest holder, governor, or third party would have upon a
17dissolution, liquidation, or winding up of that party. The
18merger does not require a party to the merger to wind up its
19affairs and does not constitute or cause its dissolution or
20termination.
   216.  Property held for a charitable purpose under the law of
22this state by a domestic or foreign corporation or eligible
23entity immediately before a merger becomes effective shall not,
24as a result of the transaction, be diverted from the objects
25for which it was donated, granted, devised, or otherwise
26transferred except and to the extent permitted by or pursuant
27to the laws of this state addressing cy pres or dealing with
28nondiversion of charitable assets.
   297.  A bequest, devise, gift, grant, or promise contained
30in a will or other instrument of donation, subscription, or
31conveyance which is made to an entity that is a party to a
32merger that is not the survivor and which takes effect or
33remains payable after the merger inures to the survivor.
   348.  A trust obligation that would govern property if
35transferred to a nonsurviving entity applies to property
-178-1that is transferred to the survivor after a merger becomes
2effective.
3   Sec. 152.  Section 490.1108, Code 2020, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.1108  Abandonment of a merger or share exchange.
   71.  After a plan of merger or share exchange has been
8adopted and approved as required by this subchapter, and before
9articles of merger or share exchange have become effective, the
10plan may be abandoned by a domestic business corporation that
11is a party to the plan without action by its shareholders in
12accordance with any procedures set forth in the plan of merger
13or share exchange or, if no such procedures are set forth in
14the plan, in the manner determined by the board of directors.
   152.  If a merger or share exchange is abandoned under
16subsection 1 after articles of merger or share exchange have
17been delivered to the secretary of state for filing but before
18the merger or share exchange has become effective, a statement
19of abandonment signed by all the parties that signed the
20articles of merger or share exchange shall be delivered to the
21secretary of state for filing before the articles of merger
22or share exchange become effective. The statement shall take
23effect on filing and the merger or share exchange shall be
24deemed abandoned and shall not become effective. The statement
25of abandonment must contain all of the following:
   26a.  The name of each party to the merger or the names of the
27acquiring and acquired entities in a share exchange.
   28b.  The date on which the articles of merger or share
29exchange were filed by the secretary of state.
   30c.  A statement that the merger or share exchange has been
31abandoned in accordance with this section.
32   Sec. 153.  Section 490.1201, Code 2020, is amended by
33striking the section and inserting in lieu thereof the
34following:
   35490.1201  Disposition of assets not requiring shareholder
-179-1approval.
   2No approval of the shareholders is required to do any of
3the following, unless the articles of incorporation otherwise
4provide:
   51.  Sell, lease, exchange, or otherwise dispose of any of
6the corporation’s assets in the usual and regular course of
7business.
   82.  Mortgage, pledge, dedicate to the repayment of
9indebtedness, whether with or without recourse, or otherwise
10encumber any or all of the corporation’s assets, regardless of
11whether in the usual and regular course of business.
   123.  Transfer any or all of the corporation’s assets to one or
13more domestic or foreign corporations or other entities, all of
14the shares or interests of which are owned by the corporation.
   154.  Distribute assets pro rata to the holders of one or more
16classes or series of the corporation’s shares.
17   Sec. 154.  Section 490.1202, Code 2020, is amended by
18striking the section and inserting in lieu thereof the
19following:
   20490.1202  Shareholder approval of certain dispositions.
   211.  A sale, lease, exchange, or other disposition of assets,
22other than a disposition described in section 490.1201,
23requires approval of the corporation’s shareholders if the
24disposition would leave the corporation without a significant
25continuing business activity. A corporation will conclusively
26be deemed to have retained a significant continuing business
27activity if it retains a business activity that represented,
28for the corporation and its subsidiaries on a consolidated
29basis, at least twenty-five percent of total assets at the
30end of the most recently completed fiscal year, and either
31twenty-five percent of either income from continuing operations
32before taxes or twenty-five percent of revenues from continuing
33operations, in each case for the most recently completed fiscal
34year; but no presumption that the disposition will leave the
35corporation without a significant continuing business activity
-180-1shall arise from the fact that the corporation’s continuing
2business activity does not equal or exceed any of these
3percentages.
   42.  To obtain the approval of the shareholders under
5subsection 1, all of the following shall apply:
   6a.  The board of directors shall first adopt a resolution
7authorizing the disposition. The disposition shall then be
8approved by the shareholders. In submitting the disposition
9to the shareholders for approval, the board of directors shall
10recommend that the shareholders approve the disposition, unless
11any of the following apply:
   12(1)  The board of directors makes a determination that
13because of conflicts of interest or other special circumstances
14it should not make such a recommendation.
   15(2)  Section 490.826 applies.
   16b.  If paragraph “a”, subparagraph (1) or (2), applies, the
17board shall inform the shareholders of the basis for its so
18proceeding.
   193.  The board of directors may set conditions for the
20approval by the shareholders of a disposition or the
21effectiveness of the disposition.
   224.  If a disposition is required to be approved by the
23shareholders under subsection 1, and if the approval is to
24be given at a meeting, the corporation shall notify each
25shareholder, regardless of whether entitled to vote, of
26the meeting of shareholders at which the disposition is
27to be submitted for approval. The notice must state that
28the purpose, or one of the purposes, of the meeting is to
29consider the disposition and must contain a description of
30the disposition, including the terms and conditions of the
31disposition and the consideration to be received by the
32corporation.
   335.  Unless the articles of incorporation, bylaws, or the
34board of directors acting pursuant to subsection 3 require
35a greater vote or a greater quorum, the approval of a
-181-1disposition by the shareholders shall require the approval
2of the shareholders at a meeting at which a quorum exists
3consisting of a majority of the votes entitled to be cast on
4the disposition.
   56.  After a disposition has been approved by the shareholders
6under this subchapter, and at any time before the disposition
7has been consummated, it may be abandoned by the corporation
8without action by the shareholders, subject to any contractual
9rights of other parties to the disposition.
   107.  A disposition of assets in the course of dissolution
11under subchapter XIV is not governed by this section.
   128.  The assets of a direct or indirect consolidated
13subsidiary shall be deemed to be the assets of the parent
14corporation for the purposes of this section.
15   Sec. 155.  Section 490.1301, Code 2020, is amended by
16striking the section and inserting in lieu thereof the
17following:
   18490.1301  Subchapter definitions.
   19As used in this subchapter:
   201.  “Affiliate” means a person that directly or indirectly
21through one or more intermediaries controls, is controlled by,
22or is under common control with another person or is a senior
23executive of such person. For purposes of section 490.1302,
24subsection 2, paragraph “d”, a person is deemed to be an
25affiliate of its senior executives.
   262.  “Corporation” means the domestic corporation that is the
27issuer of the shares held by a shareholder demanding appraisal
28and, for matters covered in sections 490.1322 through 490.1331,
29“corporation” includes the survivor of a merger.
   303.  “Fair value” means the value of the corporation’s shares
31determined according to the following:
   32a.  Immediately before the effectiveness of the corporate
33action to which the shareholder objects.
   34b.  Using customary and current valuation concepts and
35techniques generally employed for similar businesses in the
-182-1context of the transaction requiring appraisal.
   2c.  Without discounting for lack of marketability or minority
3status except, if appropriate, for amendments to the articles
4of incorporation pursuant to section 490.1302, subsection 1,
5paragraph “d”.
   64.  “Interest” means interest from the date the corporate
7action becomes effective until the date of payment, at the rate
8of interest on judgments in this state on the effective date
9of the corporate action.
   105.  “Interested transaction” means a corporate action
11described in section 490.1302, subsection 1, other than a
12merger pursuant to section 490.1105, involving an interested
13person in which any of the shares or assets of the corporation
14are being acquired or converted. As used in this subsection:
   15a.  “Beneficial owner” means any person who, directly
16or indirectly, through any contract, arrangement, or
17understanding, other than a revocable proxy, has or shares the
18power to vote, or to direct the voting of, shares; except that
19a member of a national securities exchange is not deemed to be
20a beneficial owner of securities held directly or indirectly
21by it on behalf of another person if the member is precluded
22by the rules of the exchange from voting without instruction
23on contested matters or matters that may affect substantially
24the rights or privileges of the holders of the securities to
25be voted. When two or more persons agree to act together for
26the purpose of voting their shares of the corporation, each
27member of the group formed thereby is deemed to have acquired
28beneficial ownership, as of the date of the agreement, of all
29shares having voting power of the corporation beneficially
30owned by any member of the group.
   31b.  “Excluded shares” means shares acquired pursuant to an
32offer for all shares having voting power if the offer was made
33within one year before the corporate action for consideration
34of the same kind and of a value equal to or less than that paid
35in connection with the corporate action.
-183-   1c.  “Interested person” means a person, or an affiliate of a
2person, who at any time during the one-year period immediately
3preceding approval by the board of directors of the corporate
4action was or had any of the following:
   5(1)  Was the beneficial owner of twenty percent or more of
6the voting power of the corporation, other than as owner of
7excluded shares.
   8(2)  Had the power, contractually or otherwise, other than as
9owner of excluded shares, to cause the appointment or election
10of twenty-five percent or more of the directors to the board of
11directors of the corporation.
   12(3)  Was a senior executive or director of the corporation
13or a senior executive of any affiliate of the corporation, and
14that senior executive or director will receive, as a result
15of the corporate action, a financial benefit not generally
16available to other shareholders as such, other than any of the
17following:
   18(a)  Employment, consulting, retirement, or similar benefits
19established separately and not as part of or in contemplation
20of the corporate action.
   21(b)  Employment, consulting, retirement, or similar benefits
22established in contemplation of, or as part of, the corporate
23action that are not more favorable than those existing before
24the corporate action or, if more favorable, that have been
25approved on behalf of the corporation in the same manner as is
26provided in section 490.862.
   27(c)  In the case of a director of the corporation who will,
28in the corporate action, become a director or governor of the
29acquiror or any of its affiliates, rights, and benefits as a
30director or governor that are provided on the same basis as
31those afforded by the acquiror generally to other directors or
32governors of such entity or such affiliate.
   336.  “Preferred shares” means a class or series of shares
34whose holders have preference over any other class or series of
35shares with respect to distributions.
-184-   17.  “Senior executive” means the chief executive officer,
2chief operating officer, chief financial officer, and any
3individual in charge of a principal business unit or function.
   48.  “Shareholder” means a record shareholder, a beneficial
5shareholder, and a voting trust beneficial owner.
6   Sec. 156.  Section 490.1302, Code 2020, is amended by
7striking the section and inserting in lieu thereof the
8following:
   9490.1302  Right to appraisal.
   101.  A shareholder is entitled to appraisal rights, and to
11obtain payment of the fair value of that shareholder’s shares,
12in the event of any of the following corporate actions:
   13a.  Consummation of a merger to which the corporation is a
14party if any of the following apply:
   15(1)  Shareholder approval is required for the merger by
16section 490.1104 or would be required but for the provisions of
17section 490.1104, subsection 10, except that appraisal rights
18shall not be available to any shareholder of the corporation
19with respect to shares of any class or series that remain
20outstanding after consummation of the merger.
   21(2)  The corporation is a subsidiary and the merger is
22governed by section 490.1105.
   23b.  Consummation of a share exchange to which the corporation
24is a party the shares of which will be acquired, except that
25appraisal rights shall not be available to any shareholder of
26the corporation with respect to any class or series of shares
27of the corporation that is not acquired in the share exchange.
   28c.  Consummation of a disposition of assets pursuant to
29section 490.1202 if the shareholder is entitled to vote on
30the disposition, except that appraisal rights shall not be
31available to any shareholder of the corporation with respect to
32shares of any class or series if all of the following apply:
   33(1)  Under the terms of the corporate action approved by the
34shareholders there is to be distributed to shareholders in cash
35the corporation’s net assets, in excess of a reasonable amount
-185-1reserved to meet claims of the type described in sections
2490.1406 and 490.1407, if the distribution is made subject to
3all of the following:
   4(a)  Within one year after the shareholders’ approval of the
5action.
   6(b)  In accordance with the shareholders’ respective
7interests determined at the time of distribution.
   8(2)  The disposition of assets is not an interested
9transaction.
   10d.  An amendment of the articles of incorporation with
11respect to a class or series of shares that reduces the number
12of shares of a class or series owned by the shareholder to a
13fraction of a share if the corporation has the obligation or
14right to repurchase the fractional share so created.
   15e.  Any other merger, share exchange, disposition of assets,
16or amendment to the articles of incorporation, in each case to
17the extent provided by the articles of incorporation, bylaws,
18or a resolution of the board of directors.
   19f.  Consummation of a domestication pursuant to section
20490.920 if the shareholder does not receive shares in the
21foreign corporation resulting from the domestication that have
22terms as favorable to the shareholder in all material respects,
23and represent at least the same percentage interest of the
24total voting rights of the outstanding shares of the foreign
25corporation, as the shares held by the shareholder before the
26domestication.
   27g.  Consummation of a conversion of the corporation to a
28nonprofit corporation pursuant to section 490.930.
   29h.  Consummation of a conversion of the corporation to an
30unincorporated entity pursuant to section 490.930.
   312.  Notwithstanding subsection 1, the availability of
32appraisal rights under subsection 1, paragraphs “a”, “b”, “c”,
33“d”, “f”, and “h”, shall be limited in accordance with the
34following provisions:
   35a.  Appraisal rights shall not be available for the holders
-186-1of shares of any class or series of shares which is any of the
2following:
   3(1)  A covered security under section 18(b)(1)(A) or (B) of
4the federal Securities Act of 1933, as amended.
   5(2)  Traded in an organized market and has at least two
6thousand shareholders and a market value of at least twenty
7million dollars, exclusive of the value of such shares held
8by the corporation’s subsidiaries, senior executives and
9directors, and by any beneficial shareholder and any voting
10trust beneficial owner owning more than ten percent of such
11shares.
   12(3)  Issued by an open-end management investment company
13registered with the United States securities and exchange
14commission under the federal Investment Company Act of 1940, 15
15U.S.C. §80a-1 et seq., and which may be redeemed at the option
16of the holder at net asset value.
   17b.  The applicability of paragraph “a” shall be determined
18according to the following:
   19(1)  The record date fixed to determine the shareholders
20entitled to receive notice of the meeting of shareholders to
21act upon the corporate action requiring appraisal rights or
22in the case of an offer made pursuant to section 490.1104,
23subsection 10, the date of such offer.
   24(2)  If there is no meeting of shareholders and no offer made
25pursuant to section 490.1104, subsection 10, the day before the
26consummation of the corporate action or effective date of the
27amendment of the articles of incorporation, as applicable.
   28c.  Paragraph “a” shall not be applicable and appraisal
29rights shall be available pursuant to subsection 1 under the
30following circumstances:
   31(1)  For the holders of any class or series of shares who
32are required by the terms of the corporate action requiring
33appraisal rights to accept for such shares anything other than
34cash or shares of any class or any series of shares of any
35corporation, or any other proprietary interest of any other
-187-1entity, that satisfies the standards set forth in paragraph “a”,
2at the time the corporate action becomes effective.
   3(2)  For the holders of any class or series of shares, in the
4case of the consummation of a disposition of assets pursuant
5to section 490.1202, unless the cash, shares, or proprietary
6interests received in the disposition are, under the terms
7of the corporate action approved by the shareholders, to be
8distributed to the shareholders, as part of a distribution to
9shareholders of the net assets of the corporation in excess of
10a reasonable amount to meet claims of the type described in
11sections 490.1406 and 490.1407, if the distribution is made
12subject to all of the following:
   13(a)  Within one year after the shareholders’ approval of the
14action.
   15(b)  In accordance with the shareholders’ respective
16interests determined at the time of the distribution.
   17d.  Paragraph “a” shall not be applicable and appraisal
18rights shall be available pursuant to subsection 1 for the
19holders of any class or series of shares where the corporate
20action is an interested transaction.
   213.  Notwithstanding any other provision of this section, the
22articles of incorporation as originally filed or any amendment
23to the articles of incorporation may limit or eliminate
24appraisal rights for any class or series of preferred shares,
25except that the following shall apply:
   26a.  Except as provided in paragraph “b”, no such limitation
27or elimination shall be effective if the class or series does
28not have the right to vote separately as a voting group, alone
29or as part of a group, on the action or if the action is a
30conversion under section 490.930, or a merger having a similar
31effect as a conversion in which the converted entity is an
32eligible entity.
   33b.  Any such limitation or elimination contained in an
34amendment to the articles of incorporation that limits or
35eliminates appraisal rights for any of such shares that are
-188-1outstanding immediately before the effective date of such
2amendment or that the corporation is or may be required to
3issue or sell thereafter pursuant to any conversion, exchange,
4or other right existing immediately before the effective date
5of such amendment, shall not apply to any corporate action that
6becomes effective within one year after the effective date of
7such amendment if such action would otherwise afford appraisal
8rights.
9   Sec. 157.  Section 490.1303, Code 2020, is amended by
10striking the section and inserting in lieu thereof the
11following:
   12490.1303  Assertion of rights by nominees and beneficial
13shareholders.
   141.  A record shareholder may assert appraisal rights
15as to fewer than all the shares registered in the record
16shareholder’s name but owned by a beneficial shareholder and a
17voting trust beneficial owner only if the record shareholder
18objects with respect to all shares of a class or series owned
19by the beneficial shareholder and the voting trust beneficial
20owner and notifies the corporation in writing of the name
21and address of each beneficial shareholder and voting trust
22beneficial owner on whose behalf appraisal rights are being
23asserted. The rights of a record shareholder who asserts
24appraisal rights for only part of the shares held of record in
25the record shareholder’s name under this subsection shall be
26determined as if the shares as to which the record shareholder
27objects and the record shareholder’s other shares were
28registered in the names of different record shareholders.
   292.  A beneficial shareholder and a voting trust beneficial
30owner may assert appraisal rights as to shares of any class
31or series held on behalf of the shareholder only if such
32shareholder does all of the following:
   33a.  Submits to the corporation the record shareholder’s
34written consent to the assertion of such rights no later
35than the date referred to in section 490.1322, subsection 2,
-189-1paragraph “b”, subparagraph (2).
   2b.  Does so with respect to all shares of the class or series
3that are beneficially owned by the beneficial shareholder and
4the voting trust beneficial owner.
5   Sec. 158.  Section 490.1320, Code 2020, is amended by
6striking the section and inserting in lieu thereof the
7following:
   8490.1320  Notice of appraisal rights.
   91.  Where any corporate action specified in section
10490.1302, subsection 1, is to be submitted to a vote at a
11shareholders’ meeting, the meeting notice, or where no approval
12of such action is required pursuant to section 490.1104,
13subsection 10, the offer made pursuant to that section, must
14state that the corporation has concluded that appraisal rights
15are, are not, or may be available under this subchapter. If
16the corporation concludes that appraisal rights are or may be
17available, a copy of this subchapter must accompany the meeting
18notice or offer sent to those record shareholders entitled to
19exercise appraisal rights.
   202.  In a merger pursuant to section 490.1105, the parent
21entity shall notify in writing all record shareholders of the
22subsidiary who are entitled to assert appraisal rights that the
23corporate action became effective. Such notice shall be sent
24within ten days after the corporate action became effective and
25include the materials described in section 490.1322.
   263.  Where any corporate action specified in section
27490.1302, subsection 1, is to be approved by written consent
28of the shareholders pursuant to section 490.704, all of the
29following apply:
   30a.  Written notice that appraisal rights are, are not, or may
31be available shall be sent to each record shareholder from whom
32a consent is solicited at the time consent of such shareholder
33is first solicited and, if the corporation has concluded that
34appraisal rights are or may be available, the notice must be
35accompanied by a copy of this subchapter.
-190-   1b.  Written notice that appraisal rights are, are not, or
2may be available must be delivered together with the notice to
3nonconsenting and nonvoting shareholders required by section
4490.704, subsections 5 and 6, may include the materials
5described in section 490.1322, and, if the corporation has
6concluded that appraisal rights are or may be available, must
7be accompanied by a copy of this subchapter.
   84.  Where corporate action described in section 490.1302,
9subsection 1, is proposed, or a merger pursuant to section
10490.1105 is effected, the notice referred to in subsection 1
11or 3, if the corporation concludes that appraisal rights are
12or may be available, and in subsection 2 must be accompanied
13by all of the following:
   14a.  Financial statements of the corporation that issued
15the shares that may be subject to appraisal, consisting of a
16balance sheet as of the end of a fiscal year ending not more
17than sixteen months before the date of the notice, an income
18statement for that year, and a cash flow statement for that
19year; provided that, if such financial statements are not
20reasonably available, the corporation shall provide reasonably
21equivalent financial information.
   22b.  The latest interim financial statements of such
23corporation, if any.
   245.  The right to receive the information described in
25subsection 4 may be waived in writing by a shareholder before
26or after the corporate action.
27   Sec. 159.  Section 490.1321, Code 2020, is amended by
28striking the section and inserting in lieu thereof the
29following:
   30490.1321  Notice of intent to demand payment and consequences
31of voting or consenting.
   321.  If a corporate action specified in section 490.1302,
33subsection 1, is submitted to a vote at a shareholders’
34meeting, a shareholder who wishes to assert appraisal rights
35with respect to any class or series of shares must do all of the
-191-1following:
   2a.  Deliver to the corporation, before the vote is taken,
3written notice of the shareholder’s intent to demand payment if
4the proposed action is effectuated.
   5b.  Not vote, or cause or permit to be voted, any shares of
6such class or series in favor of the proposed action.
   72.  If a corporate action specified in section 490.1302,
8subsection 1, is to be approved by written consent, a
9shareholder who wishes to assert appraisal rights with respect
10to any class or series of shares shall not sign a consent in
11favor of the proposed action with respect to that class or
12series of shares.
   133.  If a corporate action specified in section 490.1302,
14subsection 1, does not require shareholder approval pursuant to
15section 490.1104, subsection 10, a shareholder who wishes to
16assert appraisal rights with respect to any class or series of
17shares must do all of the following:
   18a.  Deliver to the corporation before the shares are
19purchased pursuant to the offer written notice of the
20shareholder’s intent to demand payment if the proposed action
21is effected.
   22b.  Not tender, or cause or permit to be tendered, any shares
23of such class or series in response to such offer.
   244.  A shareholder who fails to satisfy the requirements of
25subsection 1, 2, or 3 is not entitled to payment under this
26subchapter.
27   Sec. 160.  Section 490.1322, Code 2020, is amended by
28striking the section and inserting in lieu thereof the
29following:
   30490.1322  Appraisal notice and form.
   311.  If a corporate action requiring appraisal rights
32under section 490.1302, subsection 1, becomes effective, the
33corporation shall deliver a written appraisal notice and form
34required by subsection 2, to all shareholders who satisfy the
35requirements of section 490.1321, subsection 1, 2, or 3. In
-192-1the case of a merger under section 490.1105, the parent shall
2deliver an appraisal notice and form to all record shareholders
3who may be entitled to assert appraisal rights.
   42.  The appraisal notice shall be delivered no earlier than
5the date the corporate action specified in section 490.1302,
6subsection 1, became effective, and no later than ten days
7after such date, and must do all of the following:
   8a.  Supply a form that does all of the following:
   9(1)  Specifies the first date of any announcement to
10shareholders made before the date the corporate action became
11effective of the principal terms of the proposed corporate
12action.
   13(2)  If such announcement was made, requires the shareholder
14asserting appraisal rights to certify whether beneficial
15ownership of those shares for which appraisal rights are
16asserted was acquired before that date.
   17(3)  Requires the shareholder asserting appraisal rights to
18certify that such shareholder did not vote for or consent to
19the transaction as to the class or series of shares for which
20appraisal is sought.
   21b.  State all of the following:
   22(1)  Where the form shall be sent and where certificates for
23certificated shares shall be deposited and the date by which
24those certificates must be deposited, which date shall not be
25earlier than the date by which the corporation must receive the
26required form under subparagraph (2).
   27(2)  A date by which the corporation shall receive the
28form, which date shall not be fewer than forty nor more than
29sixty days after the date the appraisal notice is sent under
30subsection 1, and state that the shareholder shall have waived
31the right to demand appraisal with respect to the shares unless
32the form is received by the corporation by such specified date.
   33(3)  The corporation’s estimate of the fair value of the
34shares.
   35(4)  That, if requested in writing, the corporation will
-193-1provide, to the shareholder so requesting, within ten days
2after the date specified in subparagraph (2) the number of
3shareholders who return the forms by the specified date and the
4total number of shares owned by them.
   5(5)  The date by which the notice to withdraw under section
6490.1323 shall be received, which date shall be within twenty
7days after the date specified in subparagraph (2).
   8c.  Be accompanied by a copy of this subchapter.
9   Sec. 161.  Section 490.1323, Code 2020, is amended by
10striking the section and inserting in lieu thereof the
11following:
   12490.1323  Perfection of rights — right to withdraw.
   131.  A shareholder who receives notice pursuant to section
14490.1322 and who wishes to exercise appraisal rights shall
15sign and return the form sent by the corporation and, in
16the case of certificated shares, deposit the shareholder’s
17certificates in accordance with the terms of the notice by the
18date referred to in the notice pursuant to section 490.1322,
19subsection 2, paragraph “b”, subparagraph (2). In addition,
20if applicable, the shareholder shall certify on the form
21whether the beneficial owner of such shares acquired beneficial
22ownership of the shares before the date required to be set
23forth in the notice pursuant to section 490.1322, subsection
242, paragraph “a”, subparagraph (1). If a shareholder fails to
25make this certification, the corporation may elect to treat the
26shareholder’s shares as after-acquired shares under section
27490.1325. Once a shareholder deposits that shareholder’s
28certificates or, in the case of uncertificated shares, returns
29the signed forms, that shareholder loses all rights as a
30shareholder, unless the shareholder withdraws pursuant to
31subsection 2.
   322.  A shareholder who has complied with subsection 1 may
33nevertheless decline to exercise appraisal rights and withdraw
34from the appraisal process by so notifying the corporation in
35writing by the date set forth in the appraisal notice pursuant
-194-1to section 490.1322, subsection 2, paragraph “b”, subparagraph
2(5). A shareholder who fails to so withdraw from the appraisal
3process shall not thereafter withdraw without the corporation’s
4written consent.
   53.  A shareholder who does not sign and return the form and,
6in the case of certificated shares, deposit that shareholder’s
7share certificates where required, each by the date set forth
8in the notice described in section 490.1322, subsection 2,
9shall not be entitled to payment under this subchapter.
10   Sec. 162.  Section 490.1324, Code 2020, is amended by
11striking the section and inserting in lieu thereof the
12following:
   13490.1324  Payment.
   141.  Except as provided in section 490.1325, within thirty
15days after the form required by section 490.1322, subsection 2,
16paragraph “b”, subparagraph (2), is due, the corporation shall
17pay in cash to those shareholders who complied with section
18490.1323, subsection 1, the amount the corporation estimates to
19be the fair value of their shares, plus interest.
   202.  The payment to each shareholder pursuant to subsection 1
21must be accompanied by all of the following:
   22a.  (1)  Financial statements of the corporation that issued
23the shares to be appraised, consisting of a balance sheet as
24of the end of a fiscal year ending not more than sixteen months
25before the date of payment, an income statement for that year,
26and a cash flow statement for that year; provided that, if
27such annual financial statements are not reasonably available,
28the corporation shall provide reasonably equivalent financial
29information.
   30(2)  The latest interim financial statements of such
31corporation, if any.
   32b.  A statement of the corporation’s estimate of the fair
33value of the shares, which estimate shall equal or exceed the
34corporation’s estimate given pursuant to section 490.1322,
35subsection 2, paragraph “b”, subparagraph (3).
-195-   1c.  A statement that shareholders described in subsection
21 have the right to demand further payment under section
3490.1326 and that if any such shareholder does not do so within
4the time period specified in section 490.1326, subsection 2,
5such shareholder shall be deemed to have accepted the payment
6under subsection 1 in full satisfaction of the corporation’s
7obligations under this subchapter.
8   Sec. 163.  Section 490.1325, Code 2020, is amended by
9striking the section and inserting in lieu thereof the
10following:
   11490.1325  After-acquired shares.
   121.  A corporation may elect to withhold payment required
13by section 490.1324 from any shareholder who was required to,
14but did not certify that beneficial ownership of all of the
15shareholder’s shares for which appraisal rights are asserted
16was acquired before the date set forth in the appraisal notice
17sent pursuant to section 490.1322, subsection 2, paragraph “a”.
   182.  If the corporation elected to withhold payment under
19subsection 1, within thirty days after the form required by
20section 490.1322, subsection 2, paragraph “b”, subparagraph
21(2), is due, the corporation shall notify all shareholders who
22are described in subsection 1 regarding all of the following:
   23a.  Of the information required by section 490.1324,
24subsection 2, paragraph “a”.
   25b.  Of the corporation’s estimate of fair value pursuant to
26section 490.1324, subsection 2, paragraph “b”.
   27c.  That they may accept the corporation’s estimate of fair
28value, plus interest, in full satisfaction of their demands or
29demand appraisal under section 490.1326.
   30d.  That those shareholders who wish to accept such offer
31shall so notify the corporation of their acceptance of the
32corporation’s offer within thirty days after receiving the
33offer.
   34e.  That those shareholders who do not satisfy the
35requirements for demanding appraisal under section 490.1326
-196-1shall be deemed to have accepted the corporation’s offer.
   23.  Within ten days after receiving the shareholder’s
3acceptance pursuant to subsection 2, paragraph “d”, the
4corporation shall pay in cash the amount it offered under
5subsection 2, paragraph “b”, plus interest to each shareholder
6who agreed to accept the corporation’s offer in full
7satisfaction of the shareholder’s demand.
   84.  Within forty days after delivering the notice described
9in subsection 2, the corporation shall pay in cash the amount
10it offered to pay under subsection 2, paragraph “b”, plus
11interest to each shareholder described in subsection 2,
12paragraph “e”.
13   Sec. 164.  Section 490.1326, Code 2020, is amended by
14striking the section and inserting in lieu thereof the
15following:
   16490.1326  Procedure if shareholder dissatisfied with payment
17or offer.
   181.  A shareholder paid pursuant to section 490.1324 who is
19dissatisfied with the amount of the payment shall notify the
20corporation in writing of that shareholder’s estimate of the
21fair value of the shares and demand payment of that estimate,
22less any payment under section 490.1324 plus interest. A
23shareholder offered payment under section 490.1325 who is
24dissatisfied with that offer shall reject the offer and demand
25payment of the shareholder’s stated estimate of the fair value
26of the shares plus interest.
   272.  A shareholder who fails to notify the corporation
28in writing of that shareholder’s demand to be paid the
29shareholder’s stated estimate of the fair value plus interest
30under subsection 1 within thirty days after receiving the
31corporation’s payment or offer of payment under section
32490.1324 or 490.1325, respectively, waives the right to demand
33payment under this section and shall be entitled only to the
34payment made or offered pursuant to those respective sections.
35   Sec. 165.  Section 490.1330, Code 2020, is amended by
-197-1striking the section and inserting in lieu thereof the
2following:
   3490.1330  Court action.
   41.  If a shareholder makes a demand for payment under
5section 490.1326 which remains unsettled, the corporation shall
6commence a proceeding within sixty days after receiving the
7payment demand and petition the court to determine the fair
8value of the shares and accrued interest. If the corporation
9does not commence the proceeding within the sixty-day
10period, it shall pay in cash to each shareholder the amount
11the shareholder demanded pursuant to section 490.1326 plus
12interest.
   132.  The corporation shall commence the proceeding in the
14district court of the county where the corporation’s principal
15office or, if none, its registered office, in this state is
16located. If the corporation is a foreign corporation without
17a registered office in this state, it shall commence the
18proceeding in the county in this state where the principal
19office or registered office of the domestic corporation merged
20with the foreign corporation was located at the time of the
21transaction.
   223.  The corporation shall make all shareholders, regardless
23of whether they are residents of this state, whose demands
24remain unsettled parties to the proceeding as in an action
25against their shares, and all parties shall be served with a
26copy of the petition. Nonresidents may be served by registered
27or certified mail or by publication as provided by law.
   284.  The jurisdiction of the court in which the proceeding
29is commenced under subsection 2 is plenary and exclusive.
30The court may appoint one or more persons as appraisers to
31receive evidence and recommend a decision on the question of
32fair value. The appraisers shall have the powers described
33in the order appointing them, or in any amendment to it. The
34shareholders demanding appraisal rights are entitled to the
35same discovery rights as parties in other civil proceedings.
-198-1There shall be no right to a jury trial.
   25.  Each shareholder made a party to the proceeding is
3entitled to judgment for any of the following:
   4a.  The amount, if any, by which the court finds the fair
5value of the shareholder’s shares exceeds the amount paid
6by the corporation to the shareholder for such shares, plus
7interest.
   8b.  The fair value, plus interest, of the shareholder’s
9shares for which the corporation elected to withhold payment
10under section 490.1325.
11   Sec. 166.  Section 490.1331, Code 2020, is amended by
12striking the section and inserting in lieu thereof the
13following:
   14490.1331  Court costs and expenses.
   151.  The court in an appraisal proceeding commenced under
16section 490.1330 shall determine all court costs of the
17proceeding, including the reasonable compensation and expenses
18of appraisers appointed by the court. The court shall assess
19the court costs against the corporation, except that the court
20may assess court costs against all or some of the shareholders
21demanding appraisal, in amounts which the court finds
22equitable, to the extent the court finds such shareholders
23acted arbitrarily, vexatiously, or not in good faith with
24respect to the rights provided by this subchapter.
   252.  The court in an appraisal proceeding may also assess the
26expenses of the respective parties in amounts the court finds
27equitable, against any of the following:
   28a.  The corporation and in favor of any or all shareholders
29demanding appraisal if the court finds the corporation did
30not substantially comply with the requirements of sections
31490.1320, 490.1322, 490.1324, or 490.1325.
   32b.  Either the corporation or a shareholder demanding
33appraisal, in favor of any other party, if the court finds that
34the party against whom expenses are assessed acted arbitrarily,
35vexatiously, or not in good faith with respect to the rights
-199-1provided by this subchapter.
   23.  If the court in an appraisal proceeding finds that
3the expenses incurred by any shareholder were of substantial
4benefit to other shareholders similarly situated and that such
5expenses should not be assessed against the corporation, the
6court may direct that such expenses be paid out of the amounts
7awarded the shareholders who were benefited.
   84.  To the extent the corporation fails to make a required
9payment pursuant to section 490.1324, 490.1325, or 490.1326,
10the shareholder may sue directly for the amount owed, and to
11the extent successful, shall be entitled to recover from the
12corporation all expenses of the suit.
13   Sec. 167.  Section 490.1340, Code 2020, is amended by
14striking the section and inserting in lieu thereof the
15following:
   16490.1340  Other remedies limited.
   171.  The legality of a proposed or completed corporate
18action described in section 490.1302, subsection 1, shall not
19be contested, nor may the corporate action be enjoined, set
20aside, or rescinded, in a legal or equitable proceeding by a
21shareholder after the shareholders have approved the corporate
22action.
   232.  Subsection 1 does not apply to a corporate action that
24meets any of the following conditions:
   25a.  Was not authorized and approved in accordance with the
26applicable provisions of any of the following:
   27(1)  Subchapter IX, X, XI, or XII.
   28(2)  The articles of incorporation or bylaws.
   29(3)  The resolution of the board of directors authorizing the
30corporate action.
   31b.  Was procured as a result of fraud, a material
32misrepresentation, or an omission of a material fact necessary
33to make statements made, in light of the circumstances in which
34they were made, not misleading.
   35c.  Is an interested transaction, unless it has been
-200-1recommended by the board of directors in the same manner as
2is provided in section 490.862 and has been approved by the
3shareholders in the same manner as is provided in section
4490.863 as if the interested transaction were a director’s
5conflicting interest transaction.
   6d.  Is approved by less than unanimous consent of the
7voting shareholders pursuant to section 490.704 if all of the
8following apply:
   9(1)  The challenge to the corporate action is brought by a
10shareholder who did not consent and as to whom notice of the
11approval of the corporate action was not effective at least ten
12days before the corporate action was effected.
   13(2)  The proceeding challenging the corporate action is
14commenced within ten days after notice of the approval of the
15corporate action is effective as to the shareholder bringing
16the proceeding.
17   Sec. 168.  Section 490.1402, Code 2020, is amended by
18striking the section and inserting in lieu thereof the
19following:
   20490.1402  Dissolution by board of directors and shareholders.
   211.  The board of directors may propose dissolution for
22submission to the shareholders by first adopting a resolution
23authorizing the dissolution.
   242.  a.  For a proposal to dissolve to be adopted, it shall
25then be approved by the shareholders. In submitting the
26proposal to dissolve to the shareholders for approval, the
27board of directors shall recommend that the shareholders
28approve the dissolution, unless any of the following apply:
   29(1)  The board of directors determines that because of
30conflict of interest or other special circumstances it should
31make no recommendation.
   32(2)  Section 490.826 applies.
   33b.  If paragraph “a”, subparagraph (1) or (2), applies, the
34board shall inform the shareholders of the basis for its so
35proceeding.
-201-   13.  The board of directors may set conditions for the
2approval of the proposal for dissolution by shareholders or the
3effectiveness of the dissolution.
   44.  If the approval of the shareholders is to be given at
5a meeting, the corporation shall notify each shareholder,
6regardless of whether entitled to vote, of the meeting of
7shareholders at which the dissolution is to be submitted for
8approval. The notice must state that the purpose, or one of
9the purposes, of the meeting is to consider dissolving the
10corporation.
   115.  Unless the articles of incorporation, bylaws, or the
12board of directors acting pursuant to subsection 3 require a
13greater vote, a greater quorum, or a vote by voting groups,
14adoption of the proposal to dissolve shall require the approval
15of the shareholders at a meeting at which a quorum exists
16consisting of a majority of the votes entitled to be cast on
17the proposal to dissolve.
18   Sec. 169.  Section 490.1403, Code 2020, is amended by
19striking the section and inserting in lieu thereof the
20following:
   21490.1403  Articles of dissolution.
   221.  At any time after dissolution is authorized, the
23corporation may dissolve by delivering to the secretary of
24state for filing articles of dissolution setting forth all of
25the following:
   26a.  The name of the corporation.
   27b.  The date that dissolution was authorized.
   28c.  If dissolution was approved by the shareholders, a
29statement that the proposal to dissolve was duly approved by
30the shareholders in the manner required by this chapter and by
31the articles of incorporation and bylaws.
   322.  The articles of dissolution shall take effect at the
33effective date determined in accordance with section 490.123.
34A corporation is dissolved upon the effective date of its
35articles of dissolution.
-202-   13.  As used in this part, “dissolved corporation” means a
2corporation whose articles of dissolution have become effective
3and includes a successor entity to which the remaining assets
4of the corporation are transferred subject to its liabilities
5for purposes of liquidation.
6   Sec. 170.  Section 490.1404, Code 2020, is amended by
7striking the section and inserting in lieu thereof the
8following:
   9490.1404  Revocation of dissolution.
   101.  A corporation may revoke its dissolution within one
11hundred twenty days after its effective date.
   122.  Revocation of dissolution shall be authorized in the
13same manner as the dissolution was authorized unless that
14authorization permitted revocation by action of the board of
15directors alone, in which event the board of directors may
16revoke the dissolution without shareholder action.
   173.  After the revocation of dissolution is authorized,
18the corporation may revoke the dissolution by delivering to
19the secretary of state for filing articles of revocation
20of dissolution, together with a copy of its articles of
21dissolution, that set forth all of the following:
   22a.  The name of the corporation.
   23b.  The effective date of the dissolution that was revoked.
   24c.  The date that the revocation of dissolution was
25authorized.
   26d.  If the corporation’s board of directors or incorporators
27revoked the dissolution, a statement to that effect.
   28e.  If the corporation’s board of directors revoked a
29dissolution as authorized by the shareholders, a statement that
30revocation was permitted by action by the board of directors
31alone pursuant to that authorization.
   32f.  If shareholder action was required to revoke the
33dissolution, a statement that the revocation was duly approved
34by the shareholders in the manner required by this chapter and
35by the articles of incorporation and bylaws.
-203-   14.  The articles of revocation of dissolution shall take
2effect at the effective date determined in accordance with
3section 490.123. Revocation of dissolution is effective
4upon the effective date of the articles of revocation of
5dissolution.
   65.  When the revocation of dissolution is effective, it
7relates back to and takes effect as of the effective date of
8the dissolution and the corporation resumes carrying on its
9business as if the dissolution had never occurred.
10   Sec. 171.  Section 490.1405, Code 2020, is amended by
11striking the section and inserting in lieu thereof the
12following:
   13490.1405  Effect of dissolution.
   141.  A corporation that has dissolved continues its corporate
15existence but the dissolved corporation shall not carry on any
16business except that appropriate to wind up and liquidate its
17business and affairs, including by doing any of the following:
   18a.  Collecting its assets.
   19b.  Disposing of its properties that will not be distributed
20in kind to its shareholders.
   21c.  Discharging or making provision for discharging its
22liabilities.
   23d.  Making distributions of its remaining assets among its
24shareholders according to their interests.
   25e.  Doing every other act necessary to wind up and liquidate
26its business and affairs.
   272.  Dissolution of a corporation does not do any of the
28following:
   29a.  Transfer title to the corporation’s property.
   30b.  Prevent transfer of its shares or securities.
   31c.  Subject its directors or officers to standards of conduct
32different from those prescribed in subchapter VIII.
   33d.  Change any of the following:
   34(1)  Quorum or voting requirements for its board of directors
35or shareholders.
-204-   1(2)  Provisions for selection, resignation, or removal of
2its directors or officers or both.
   3(3)  Provisions for amending its bylaws.
   4e.  Prevent commencement of a proceeding by or against the
5corporation in its corporate name.
   6f.  Abate or suspend a proceeding pending by or against the
7corporation on the effective date of dissolution.
   8g.  Terminate the authority of the registered agent of the
9corporation.
   103.  A distribution in liquidation under this section may
11only be made by a dissolved corporation. For purposes of
12determining the shareholders entitled to receive a distribution
13in liquidation, the board of directors may fix a record date
14for determining shareholders entitled to a distribution in
15liquidation, which date shall not be retroactive. If the
16board of directors does not fix a record date for determining
17shareholders entitled to a distribution in liquidation, the
18record date is the date the board of directors authorizes the
19distribution in liquidation.
20   Sec. 172.  Section 490.1406, Code 2020, is amended by
21striking the section and inserting in lieu thereof the
22following:
   23490.1406  Known claims against dissolved corporation.
   241.  A dissolved corporation may dispose of the known claims
25against it by notifying its known claimants in writing of the
26dissolution at any time after its effective date.
   272.  The written notice must do all of the following:
   28a.  Describe information that must be included in a claim.
   29b.  Provide a mailing address where a claim may be sent.
   30c.  State the deadline, which must not be fewer than one
31hundred twenty days after the written notice is effective, by
32which the dissolved corporation shall receive the claim.
   33d.  State that the claim will be barred if not received by
34the deadline.
   353.  A claim against the dissolved corporation is barred if
-205-1any of the following occurs:
   2a.  A claimant who was given written notice under subsection
32 does not deliver the claim to the dissolved corporation by
4the deadline.
   5b.  A claimant whose claim was rejected by the dissolved
6corporation does not commence a proceeding to enforce the claim
7within ninety days after the rejection notice is effective.
   84.  As used in this section, “claim” does not include a
9contingent liability or a claim based on an event occurring
10after the effective date of dissolution.
11   Sec. 173.  Section 490.1407, Code 2020, is amended by
12striking the section and inserting in lieu thereof the
13following:
   14490.1407  Other claims against dissolved corporation.
   151.  A dissolved corporation may publish notice of its
16dissolution and request that persons with claims against the
17dissolved corporation present them in accordance with the
18notice.
   192.  The notice must meet all of the following requirements:
   20a.  Be published in compliance with any of the following:
   21(1)  One time in a newspaper of general circulation in the
22county where the dissolved corporation’s principal office, or,
23if none in this state, its registered office, is or was last
24located.
   25(2)  Be posted conspicuously for at least thirty days on the
26dissolved corporation’s internet site.
   27b.  Describe the information that must be included in a claim
28and provide a mailing address where the claim may be sent.
   29c.  State that a claim against the dissolved corporation will
30be barred unless a proceeding to enforce the claim is commenced
31within three years after the publication of the notice.
   323.  If the dissolved corporation publishes a notice in
33accordance with subsection 2, the claim of each of the
34following claimants is barred unless the claimant commences
35a proceeding to enforce the claim against the dissolved
-206-1corporation within three years after the publication date of
2the notice:
   3a.  A claimant who was not given written notice under section
4490.1406.
   5b.  A claimant whose claim was timely sent to the dissolved
6corporation but not acted on by the corporation.
   7c.  A claimant whose claim is contingent or based on an event
8occurring after the effective date of dissolution.
   94.  A claim that is not barred by section 490.1406,
10subsection 2, or subsection 3 of this section, may be enforced
11in any of the following ways:
   12a.  Against the dissolved corporation, to the extent of its
13undistributed assets.
   14b.  Except as provided in section 490.1408, subsection 4,
15if the assets have been distributed in liquidation, against
16a shareholder of the dissolved corporation to the extent of
17the shareholder’s pro rata share of the claim or the corporate
18assets distributed to the shareholder in liquidation, whichever
19is less, but a shareholder’s total liability for all claims
20under this section shall not exceed the total amount of assets
21distributed to the shareholder in liquidation.
22   Sec. 174.  Section 490.1409, Code 2020, is amended by
23striking the section and inserting in lieu thereof the
24following:
   25490.1409  Director duties.
   261.  Directors shall cause the dissolved corporation to
27discharge or make reasonable provision for the payment of
28claims and make distributions in liquidation of assets to
29shareholders after payment or provision for claims.
   302.  Directors of a dissolved corporation which has disposed
31of claims under section 490.1406, 490.1407, or 490.1408 shall
32not be liable for breach of subsection 1 with respect to claims
33against the dissolved corporation that are barred or satisfied
34under section 490.1406, 490.1407, or 490.1408.
35   Sec. 175.  Section 490.1420, Code 2020, is amended by
-207-1striking the section and inserting in lieu thereof the
2following:
   3490.1420  Grounds for administrative dissolution.
   4The secretary of state may commence a proceeding under
5section 490.1421 to dissolve a corporation administratively,
6if any of the following apply:
   71.  The corporation does not pay within sixty days after they
8are due any fees, taxes, interest, or penalties imposed by this
9chapter or other laws of this state.
   102.  The corporation does not deliver its biennial report to
11the secretary of state within sixty days after it is due.
   123.  The corporation is without a registered agent or
13registered office in this state for sixty days or more.
   144.  The secretary of state has not been notified within sixty
15days that the corporation’s registered agent or registered
16office has been changed, that its registered agent has
17resigned, or that its registered office has been discontinued.
   185.  The corporation’s period of duration stated in its
19articles of incorporation expires.
20   Sec. 176.  Section 490.1421, Code 2020, is amended by
21striking the section and inserting in lieu thereof the
22following:
   23490.1421  Procedure for and effect of administrative
24dissolution.
   251.  If the secretary of state determines that one or
26more grounds exist under section 490.1420 for dissolving a
27corporation, the secretary of state shall serve the corporation
28with written notice of such determination under section
29490.504.
   302.  If the corporation does not correct each ground for
31dissolution or demonstrate to the reasonable satisfaction of
32the secretary of state that each ground determined by the
33secretary of state does not exist within sixty days after
34service of the notice under section 490.504, the secretary
35of state shall administratively dissolve the corporation by
-208-1signing a certificate of dissolution that recites the ground or
2grounds for dissolution and its effective date. The secretary
3of state shall file the original of the certificate and serve a
4copy on the corporation under section 490.504.
   53.  A corporation administratively dissolved continues
6its corporate existence but shall not carry on any business
7except that necessary to wind up and liquidate its business
8and affairs under section 490.1405 and notify claimants under
9sections 490.1406 and 490.1407.
   104.  The administrative dissolution of a corporation does not
11terminate the authority of its registered agent.
12   Sec. 177.  Section 490.1422, Code 2020, is amended by
13striking the section and inserting in lieu thereof the
14following:
   15490.1422  Reinstatement following administrative dissolution.
   161.  A corporation administratively dissolved under section
17490.1421 may apply to the secretary of state for reinstatement
18at any time after the effective date of dissolution. The
19application must meet all of the following requirements:
   20a.  State the name of the corporation at its date of
21dissolution and the effective date of its administrative
22dissolution.
   23b.  State that the ground or grounds for dissolution either
24did not exist or have been eliminated.
   25c.  If the application is received more than five years after
26the effective date of dissolution, state a corporate name that
27satisfies the requirements of section 490.401.
   28d.  State the federal tax identification number of the
29corporation.
   302.  a.  The secretary of state shall refer the federal
31tax identification number contained in the application for
32reinstatement to the departments of revenue and workforce
33development. The departments of revenue and workforce
34development shall report to the secretary of state the tax
35status of the corporation. If either department reports to
-209-1the secretary of state that a filing delinquency or liability
2exists against the corporation, the secretary of state shall
3not cancel the certificate of dissolution until the filing
4delinquency or liability is satisfied.
   5b.  (1)  If the secretary of state determines that the
6application contains the information required by subsection
71, and that a delinquency or liability reported pursuant to
8paragraph “a” has been satisfied, and that the information is
9correct, the secretary of state shall cancel the certificate
10of dissolution and prepare a certificate of reinstatement
11that recites the secretary of state’s determination and the
12effective date of reinstatement, file the certificate of
13reinstatement, and deliver a copy to the corporation under
14section 490.504.
   15(2)  If the corporate name in subsection 1, paragraph “c”, is
16different from the corporate name in subsection 1, paragraph
17“a”, the certificate of reinstatement shall constitute an
18amendment to the articles of incorporation insofar as it
19pertains to the corporate name. A corporation shall not
20relinquish the right to retain its corporate name if the
21reinstatement is effective within five years of the effective
22date of the corporation’s dissolution.
   233.  When the reinstatement is effective, it relates back to
24and takes effect as of the effective date of the administrative
25dissolution as if the administrative dissolution had never
26occurred.
27   Sec. 178.  Section 490.1423, Code 2020, is amended by
28striking the section and inserting in lieu thereof the
29following:
   30490.1423  Appeal from denial of reinstatement.
   311.  If the secretary of state denies a corporation’s
32application for reinstatement following administrative
33dissolution, the secretary of state shall serve the corporation
34under section 490.504 with a written notice that explains the
35reason or reasons for denial.
-210-   12.  The corporation may appeal the denial of reinstatement to
2district court within thirty days after service of the notice
3of denial is effected. The corporation appeals by petitioning
4the court to set aside the dissolution and attaching to the
5petition copies of the secretary of state’s certificate of
6dissolution, the corporation’s application for reinstatement,
7and the secretary of state’s notice of denial.
   83.  The court may summarily order the secretary of state to
9reinstate the dissolved corporation or may take other action
10the court considers appropriate.
   114.  The court’s final decision may be appealed as in other
12civil proceedings.
13   Sec. 179.  Section 490.1430, Code 2020, is amended by
14striking the section and inserting in lieu thereof the
15following:
   16490.1430  Grounds for judicial dissolution.
   171.  The district court may dissolve a corporation in any of
18the following ways:
   19a.  A proceeding by the attorney general if it is established
20that any of the following apply:
   21(1)  The corporation obtained its articles of incorporation
22through fraud.
   23(2)  The corporation has continued to exceed or abuse the
24authority conferred upon it by law.
   25b.  A proceeding by a shareholder if it is established that
26any of the following conditions exist:
   27(1)  The directors are deadlocked in the management of
28the corporate affairs, the shareholders are unable to break
29the deadlock, and irreparable injury to the corporation is
30threatened or being suffered, or the business and affairs of
31the corporation can no longer be conducted to the advantage of
32the shareholders generally, because of the deadlock.
   33(2)  The directors or those in control of the corporation
34have acted, are acting, or will act in a manner that is
35illegal, oppressive, or fraudulent.
-211-   1(3)  The shareholders are deadlocked in voting power and have
2failed, for a period that includes at least two consecutive
3annual meeting dates, to elect successors to directors whose
4terms have expired.
   5(4)  The corporate assets are being misapplied or wasted.
   6c.  A proceeding by a creditor if it is established that any
7of the following applies:
   8(1)  The creditor’s claim has been reduced to judgment,
9the execution on the judgment returned unsatisfied, and the
10corporation is insolvent.
   11(2)  The corporation has admitted in writing that the
12creditor’s claim is due and owing and the corporation is
13insolvent.
   14d.  A proceeding by the corporation to have its voluntary
15dissolution continued under court supervision.
   16e.  A proceeding by a shareholder if the corporation has
17abandoned its business and has failed within a reasonable time
18to liquidate and distribute its assets and dissolve.
   192.  Subsection 1, paragraph “b”, shall not apply in the
20case of a corporation that, on the date of the filing of the
21proceeding, has a class or series of shares which is any of the
22following:
   23a.  A covered security under section 18(b)(1)(A) or (B) of
24the federal Securities Act of 1933.
   25b.  Not a covered security, but is held by at least three
26hundred shareholders and the shares outstanding have a market
27value of at least twenty million dollars, exclusive of the
28value of such shares held by the corporation’s subsidiaries,
29senior executives, directors, and if they own more than ten
30percent of such shares, beneficial shareholders, and voting
31trust beneficial owners.
   323.  a.  As used in subsection 1, “shareholder” means a record
33shareholder, a beneficial shareholder, and an unrestricted
34voting trust beneficial owner.
   35b.  As used in subsection 2, “shareholder” means a record
-212-1shareholder, a beneficial shareholder, and a voting trust
2beneficial owner.
3   Sec. 180.  Section 490.1431, Code 2020, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.1431  Procedure for judicial dissolution.
   71.  Venue for a proceeding by the attorney general
8to dissolve a corporation lies in Polk county. Venue
9for a proceeding brought by any other party named in
10section 490.1430, subsection 1, lies in the county where a
11corporation’s principal office or, if none in this state, its
12registered office is or was last located.
   132.  It is not necessary to make shareholders parties to a
14proceeding to dissolve a corporation unless relief is sought
15against them individually.
   163.  A court in a proceeding brought to dissolve a corporation
17may issue injunctions, appoint a receiver or custodian during
18the proceeding with all powers and duties the court directs,
19take other action required to preserve the corporate assets
20wherever located, and carry on the business of the corporation
21until a full hearing can be held.
   224.  Within ten days of the commencement of a proceeding
23to dissolve a corporation under section 490.1430, subsection
241, paragraph “b”, the corporation shall deliver to all
25shareholders, other than the petitioner, a notice stating that
26the shareholders are entitled to avoid the dissolution of the
27corporation by electing to purchase the petitioner’s shares
28under section 490.1434, and accompanied by a copy of section
29490.1434.
30   Sec. 181.  Section 490.1432, Code 2020, is amended by
31striking the section and inserting in lieu thereof the
32following:
   33490.1432  Receivership or custodianship.
   341.  Unless an election to purchase has been filed under
35section 490.1434, a court in a judicial proceeding brought to
-213-1dissolve a corporation may appoint one or more receivers to
2wind up and liquidate, or one or more custodians to manage,
3the business and affairs of the corporation. The court shall
4hold a hearing, after notifying all parties to the proceeding
5and any interested persons designated by the court, before
6appointing a receiver or custodian. The court appointing a
7receiver or custodian has jurisdiction over the corporation and
8all of its property wherever located.
   92.  The court may appoint an individual or a domestic
10or foreign corporation or eligible entity as a receiver or
11custodian, which, if a foreign corporation or foreign eligible
12entity, must be registered to do business in this state. The
13court may require the receiver or custodian to post bond, with
14or without sureties, in an amount the court directs.
   153.  The court shall describe the powers and duties of the
16receiver or custodian in its appointing order, which may be
17amended from time to time. Among other powers all of the
18following apply:
   19a.  The receiver may do any or all of the following:
   20(1)  Dispose of all or any part of the assets of the
21corporation wherever located, at a public or private sale.
   22(2)  Sue and defend in the receiver’s own name as receiver of
23the corporation in all courts of this state.
   24b.  The custodian may exercise all of the powers of the
25corporation, through or in place of its board of directors, to
26the extent necessary to manage the affairs of the corporation
27in the best interests of its shareholders and creditors.
   28c.  The receiver or custodian shall have such other powers
29and duties as the court may provide in the appointing order,
30which may be amended from time to time.
   314.  The court during a receivership may redesignate the
32receiver a custodian and during a custodianship may redesignate
33the custodian a receiver.
   345.  The court from time to time during the receivership or
35custodianship may order compensation paid and expenses paid or
-214-1reimbursed to the receiver or custodian from the assets of the
2corporation or proceeds from the sale of the assets.
3   Sec. 182.  Section 490.1434, Code 2020, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.1434  Election to purchase in lieu of dissolution.
   71.  In a proceeding under section 490.1430, subsection 1,
8paragraph “b”, to dissolve a corporation, the corporation
9may elect or, if it fails to elect, one or more shareholders
10may elect to purchase all shares owned by the petitioning
11shareholder at the fair value of the shares. An election
12pursuant to this section shall be irrevocable unless the court
13determines that it is equitable to set aside or modify the
14election.
   152.  An election to purchase pursuant to this section may
16be filed with the court at any time within ninety days after
17the filing of the petition under section 490.1430, subsection
181, paragraph “b”, or at such later time as the court in its
19discretion may allow. If the election to purchase is filed
20by one or more shareholders, the corporation shall, within
21ten days thereafter, give written notice to all shareholders,
22other than the petitioner. The notice must state the name
23and number of shares owned by the petitioner and the name and
24number of shares owned by each electing shareholder and must
25advise the recipients of their right to join in the election to
26purchase shares in accordance with this section. Shareholders
27who wish to participate shall file notice of their intention
28to join in the purchase no later than thirty days after
29the effectiveness of the notice to them. All shareholders
30who have filed an election or notice of their intention to
31participate in the election to purchase thereby become parties
32to the proceeding and shall participate in the purchase in
33proportion to their ownership of shares as of the date the
34first election was filed, unless they otherwise agree or the
35court otherwise directs. After an election has been filed by
-215-1the corporation or one or more shareholders, the proceeding
2under section 490.1430, subsection 1, paragraph “b”, shall
3not be discontinued or settled, nor shall the petitioning
4shareholder sell or otherwise dispose of the shareholder’s
5shares, unless the court determines that it would be equitable
6to the corporation and the shareholders, other than the
7petitioner, to permit such discontinuance, settlement, sale, or
8other disposition.
   93.  If, within sixty days of the filing of the first
10election, the parties reach agreement as to the fair value
11and terms of purchase of the petitioner’s shares, the court
12shall enter an order directing the purchase of the petitioner’s
13shares upon the terms and conditions agreed to by the parties.
   144.  If the parties are unable to reach an agreement as
15provided for in subsection 3, the court, upon application of
16any party, shall stay the proceedings under section 490.1430,
17subsection 1, paragraph “b”, and determine the fair value of
18the petitioner’s shares as of the day before the date on which
19the petition under section 490.1430, subsection 1, paragraph
20“b”, was filed or as of such other date as the court deems
21appropriate under the circumstances.
   225.  Upon determining the fair value of the shares, the
23court shall enter an order directing the purchase upon such
24terms and conditions as the court deems appropriate, which may
25include payment of the purchase price in installments, where
26necessary in the interests of equity, provision for security
27to assure payment of the purchase price and any additional
28expenses as may have been awarded, and, if the shares are to
29be purchased by shareholders, the allocation of shares among
30them. In allocating the petitioner’s shares among holders of
31different classes or series of shares, the court should attempt
32to preserve the existing distribution of voting rights among
33holders of different classes or series insofar as practicable
34and may direct that holders of a specific class or classes or
35series shall not participate in the purchase. Interest may be
-216-1allowed at the rate and from the date determined by the court
2to be equitable, but if the court finds that the refusal of
3the petitioning shareholder to accept an offer of payment was
4arbitrary or otherwise not in good faith, no interest shall be
5allowed. If the court finds that the petitioning shareholder
6had probable grounds for relief under section 490.1430,
7subsection 1, paragraph “b”, subparagraph (2) or (4), it may
8award expenses to the petitioning shareholder.
   96.  Upon entry of an order under subsection 3 or 5, the
10court shall dismiss the petition to dissolve the corporation
11under section 490.1430, subsection 1, paragraph “b”, and the
12petitioning shareholder shall no longer have any rights or
13status as a shareholder of the corporation, except the right
14to receive the amounts awarded by the order of the court which
15shall be enforceable in the same manner as any other judgment.
   167.  The purchase ordered pursuant to subsection 5 shall be
17made within ten days after the date the order becomes final.
   188.  Any payment by the corporation pursuant to an order under
19subsection 3 or 5, other than an award of expenses pursuant to
20subsection 5, is subject to the provisions of section 490.640.
21   Sec. 183.  Section 490.1440, Code 2020, is amended by
22striking the section and inserting in lieu thereof the
23following:
   24490.1440  Deposit with state treasurer.
   25Assets of a dissolved corporation that should be transferred
26to a creditor, claimant, or shareholder of the corporation who
27cannot be found or who is not competent to receive them shall
28be reduced to cash and deposited with the treasurer of state
29or other appropriate state official for safekeeping. When the
30creditor, claimant, or shareholder furnishes satisfactory proof
31of entitlement to the amount deposited, the treasurer of state
32or other appropriate state official shall pay such person, or
33the representative of such person, that amount.
34   Sec. 184.  Section 490.1501, Code 2020, is amended by
35striking the section and inserting in lieu thereof the
-217-1following:
   2490.1501  Governing law.
   31.  The law of the jurisdiction of formation of a foreign
4corporation governs all of the following:
   5a.  The internal affairs of the foreign corporation.
   6b.  The interest holder liability of its shareholders.
   72.  A foreign corporation is not precluded from registering
8to do business in this state because of any difference between
9the law of the foreign corporation’s jurisdiction of formation
10and the law of this state.
   113.  Registration of a foreign corporation to do business in
12this state does not permit the foreign corporation to engage in
13any business or affairs or exercise any power that a domestic
14corporation cannot lawfully engage in or exercise in this
15state.
16   Sec. 185.  Section 490.1502, Code 2020, is amended by
17striking the section and inserting in lieu thereof the
18following:
   19490.1502  Registration to do business in this state.
   201.  A foreign corporation shall not do business in this
21state until it registers with the secretary of state under this
22chapter.
   232.  A foreign corporation doing business in this state shall
24not maintain a proceeding in any court of this state until it
25is registered to do business in this state.
   263.  The failure of a foreign corporation to register to
27do business in this state does not impair the validity of a
28contract or act of the foreign corporation or preclude it from
29defending a proceeding in this state.
   304.  A limitation on the liability of a shareholder or
31director of a foreign corporation is not waived solely because
32the foreign corporation does business in this state without
33registering.
   345.  Section 490.1501, subsection 1, applies even if a foreign
35corporation fails to register under this chapter.
-218-1   Sec. 186.  Section 490.1503, Code 2020, is amended by
2striking the section and inserting in lieu thereof the
3following:
   4490.1503  Foreign registration statement.
   51.  To register to do business in this state, a foreign
6corporation shall deliver a foreign registration statement to
7the secretary of state for filing. The registration statement
8must be signed by the foreign corporation and state all of the
9following:
   10a.  The corporate name of the foreign corporation and, if the
11name does not comply with section 490.401, an alternate name as
12required by section 490.1506.
   13b.  The foreign corporation’s jurisdiction of formation.
   14c.  The street and mailing addresses of the foreign
15corporation’s principal office and, if the law of the foreign
16corporation’s jurisdiction of formation requires the foreign
17corporation to maintain an office in that jurisdiction, the
18street and mailing addresses of that office.
   19d.  The street and mailing addresses of the foreign
20corporation’s registered office in this state and the name of
21its registered agent at that office.
   22e.  The names and business addresses of its directors and
23principal officers.
   242.  The foreign corporation shall deliver the completed
25foreign registration statement to the secretary of state,
26and also deliver to the secretary of state a certificate of
27existence or a document of similar import duly authenticated
28by the secretary of state or other official having custody of
29corporate records in the state or country under whose law it is
30incorporated which is dated no earlier than ninety days prior
31to the date the application is filed with the secretary of
32state.
33   Sec. 187.  Section 490.1504, Code 2020, is amended by
34striking the section and inserting in lieu thereof the
35following:
-219-   1490.1504  Amendment of foreign registration statement.
   2A registered foreign corporation shall sign and deliver to
3the secretary of state for filing an amendment to its foreign
4registration statement if there is a change in any of the
5following:
   61.  Its name or alternate name.
   72.  Its jurisdiction of formation, unless its registration
8is deemed to have been withdrawn under section 490.1508 or
9transferred under section 490.1510.
   103.  An address required by section 490.1503, subsection 1,
11paragraph “c”.
12   Sec. 188.  Section 490.1505, Code 2020, is amended by
13striking the section and inserting in lieu thereof the
14following:
   15490.1505  Activities not constituting doing business.
   161.  Activities of a foreign corporation that do not
17constitute doing business in this state for purposes of this
18subchapter include all of the following:
   19a.  Maintaining, defending, mediating, arbitrating, or
20settling a proceeding.
   21b.  Carrying on any activity concerning the internal affairs
22of the foreign corporation, including holding meetings of its
23shareholders or board of directors.
   24c.  Maintaining accounts in financial institutions.
   25d.  Maintaining offices or agencies for the transfer,
26exchange, and registration of securities of the foreign
27corporation or maintaining trustees or depositories with
28respect to those securities.
   29e.  Selling through independent contractors.
   30f.  Soliciting or obtaining orders by any means if the
31orders require acceptance outside this state before they become
32contracts.
   33g.  Creating or acquiring indebtedness, mortgages, or
34security interests in property.
   35h.  Securing or collecting debts or enforcing mortgages or
-220-1security interests in property securing the debts, and holding,
2protecting, or maintaining property so acquired.
   3i.  Conducting an isolated transaction that is not in the
4course of similar transactions.
   5j.  Owning, protecting, and maintaining property.
   6k.  Doing business in interstate commerce.
   72.  This section does not apply in determining the contacts
8or activities that may subject a foreign corporation to service
9of process, taxation, or regulation under the laws of this
10state other than this chapter.
11   Sec. 189.  Section 490.1506, Code 2020, is amended by
12striking the section and inserting in lieu thereof the
13following:
   14490.1506  Noncomplying name of foreign corporation.
   151.  A foreign corporation whose name does not comply with
16section 490.401 shall not register to do business in this state
17until it adopts, for the purpose of doing business in this
18state, an alternate name that complies with section 490.401 by
19filing a foreign registration statement under section 490.1503,
20or if applicable, a transfer of registration statement under
21section 490.1510, setting forth that alternate name. After
22registering to do business in this state with an alternate
23name, a foreign corporation shall do business in this state
24under any of the following:
   25a.  The alternate name.
   26b.  The foreign corporation’s name, with the addition of its
27jurisdiction of formation.
   282.  If a registered foreign corporation changes its name
29after registration to a name that does not comply with section
30490.401, it shall not do business in this state until it
31complies with subsection 1 by amending its registration
32statement to adopt an alternate name that complies with section
33490.401.
34   Sec. 190.  Section 490.1507, Code 2020, is amended by
35striking the section and inserting in lieu thereof the
-221-1following:
   2490.1507  Withdrawal of registration of registered foreign
3corporation.
   41.  A registered foreign corporation may withdraw its
5registration by delivering a statement of withdrawal to the
6secretary of state for filing. The statement of withdrawal
7must be signed by the foreign corporation and state all of the
8following:
   9a.  The name of the foreign corporation and its jurisdiction
10of formation.
   11b.  That the foreign corporation is not doing business
12in this state and that it withdraws its registration to do
13business in this state.
   14c.  That the foreign corporation revokes the authority of its
15registered agent in this state.
   16d.  An address to which process on the foreign corporation
17may be sent by the secretary of state under section 490.504,
18subsection 3.
   192.  After the withdrawal of the registration of a foreign
20corporation, service of process in any proceeding based on
21a cause of action arising during the time the entity was
22registered to do business in this state may be made as provided
23in section 490.504.
24   Sec. 191.  Section 490.1508, Code 2020, is amended by
25striking the section and inserting in lieu thereof the
26following:
   27490.1508  Deemed withdrawal upon domestication or conversion
28to certain domestic entities.
   29A registered foreign corporation that domesticates to
30a domestic business corporation or converts to a domestic
31nonprofit corporation or any type of domestic filing entity or
32to a domestic limited liability partnership is deemed to have
33withdrawn its registration on the effectiveness of such event.
34   Sec. 192.  Section 490.1509, Code 2020, is amended by
35striking the section and inserting in lieu thereof the
-222-1following:
   2490.1509  Withdrawal upon dissolution or conversion to certain
3nonfiling entities.
   41.  A registered foreign corporation that has dissolved and
5completed winding up or has converted to a domestic or foreign
6nonfiling entity other than a limited liability partnership
7shall deliver to the secretary of state for filing a statement
8of withdrawal. The statement must be signed by the dissolved
9corporation or the converted domestic or foreign nonfiling
10entity and state:
   11a.  In the case of a foreign corporation that has completed
12winding up all of the following:
   13(1)  Its name and jurisdiction of formation.
   14(2)  That the foreign corporation withdraws its registration
15to do business in this state and revokes the authority of its
16registered agent to accept service on its behalf.
   17(3)  An address to which process on the foreign corporation
18may be sent by the secretary of state under section 490.504,
19subsection 3.
   20b.  In the case of a foreign corporation that has converted
21to a domestic or foreign nonfiling entity other than a limited
22liability partnership all of the following:
   23(1)  The name of the converting foreign corporation and its
24jurisdiction of formation.
   25(2)  The type of the nonfiling entity to which it has
26converted and its name and jurisdiction of formation.
   27(3)  That it withdraws its registration to do business in
28this state and revokes the authority of its registered agent to
29accept service on its behalf.
   30(4)  An address to which process on the foreign corporation
31may be sent by the secretary of state under section 490.504,
32subsection 3.
   332.  After the withdrawal of the registration of a foreign
34corporation, service of process in any proceeding based on
35a cause of action arising during the time the entity was
-223-1registered to do business in this state may be made as provided
2in section 490.504.
3   Sec. 193.  Section 490.1510, Code 2020, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.1510  Transfer of registration.
   71.  If a registered foreign corporation merges into a
8nonregistered foreign corporation or converts to a foreign
9corporation required to register with the secretary of state
10to do business in this state, the foreign corporation shall
11deliver to the secretary of state for filing a transfer
12of registration statement. The transfer of registration
13statement must be signed by the surviving or converted foreign
14corporation and state all of the following:
   15a.  The name of the registered foreign corporation and its
16jurisdiction of formation before the merger or conversion.
   17b.  The name of the surviving or converted foreign
18corporation and its jurisdiction of formation after the
19merger or conversion and, if the name does not comply with
20section 490.401, an alternate name adopted pursuant to section
21490.1506.
   22c.  All of the following information regarding the
23surviving or converted foreign corporation after the merger or
24conversion:
   25(1)  The street and mailing addresses of the principal
26office of the foreign corporation and, if the law of the
27foreign corporation’s jurisdiction of formation requires it to
28maintain an office in that jurisdiction, the street and mailing
29addresses of that office.
   30(2)  The street and mailing addresses of the foreign
31corporation’s registered office in this state and the name of
32its registered agent at that office.
   332.  On the effective date of a transfer of registration
34statement as determined in accordance with section 490.123,
35the registration of the registered foreign corporation to do
-224-1business in this state is transferred without interruption to
2the foreign corporation into which it has merged or to which
3it has been converted.
4   Sec. 194.  NEW SECTION.  490.1511  Administrative termination
5of registration.
   61.  The secretary of state may terminate the registration
7of a registered foreign corporation in the manner provided in
8subsections 2 and 3, if any of the following applies:
   9a.  The foreign corporation does not pay within sixty days
10after they are due any fees, taxes, interest, or penalties
11imposed by this chapter or other laws of this state.
   12b.  The foreign corporation does not deliver its biennial
13report to the secretary of state within sixty days after it is
14due.
   15c.  The foreign corporation is without a registered agent or
16registered office in this state for sixty days or more.
   17d.  The secretary of state has not been notified within
18sixty days that the foreign corporation’s registered agent
19or registered office has been changed, that its registered
20agent has resigned, or that its registered office has been
21discontinued.
   222.  The secretary of state may terminate the registration of
23a registered foreign corporation by doing all of the following:
   24a.  Filing a certificate of termination.
   25b.  Delivering a copy of the certificate of termination to
26the foreign corporation’s registered agent or, if the foreign
27corporation does not have a registered agent, to the foreign
28corporation’s principal office.
   293.  The certificate of termination must state all of the
30following:
   31a.  The effective date of the termination, which must be
32not less than sixty days after the secretary of state delivers
33the copy of the certificate of termination as prescribed in
34subsection 2, paragraph “b”.
   35b.  The grounds for termination under subsection 1.
-225-   14.  The registration of a registered foreign corporation
2to do business in this state ceases on the effective date
3of the termination as set forth in the certificate of
4termination, unless before that date the foreign corporation
5cures each ground for termination stated in the certificate of
6termination. If the foreign corporation cures each ground, the
7secretary of state shall file a statement that the certificate
8of termination is withdrawn.
   95.  After the effective date of the termination as set forth
10in the certificate of termination, service of process in any
11proceeding based on a cause of action arising during the time
12the entity was registered to do business in this state may be
13made as provided in section 490.504.
14   Sec. 195.  NEW SECTION.  490.1512  Action by attorney general.
   15The attorney general may maintain an action to enjoin a
16foreign corporation from doing business in this state in
17violation of this chapter.
18   Sec. 196.  Section 490.1601, Code 2020, is amended by
19striking the section and inserting in lieu thereof the
20following:
   21490.1601  Corporate records.
   221.  A corporation shall maintain all of the following
23records:
   24a.  Its articles of incorporation as currently in effect.
   25b.  Any notices to shareholders referred to in section
26490.120, subsection 11, paragraph “e”, specifying facts
27on which a filed document is dependent if those facts are
28not included in the articles of incorporation or otherwise
29available as specified in section 490.120, subsection 11,
30paragraph “e”.
   31c.  Its bylaws as currently in effect.
   32d.  All written communications within the past three years to
33shareholders generally.
   34e.  Minutes of all meetings of, and records of all actions
35taken without a meeting by, its shareholders, its board of
-226-1directors, and board committees established under section
2490.825.
   3f.  A list of the names and business addresses of its current
4directors and officers.
   5g.  Its most recent biennial report delivered to the
6secretary of state under section 490.1622.
   72.  A corporation shall maintain all annual financial
8statements prepared for the corporation for its last three
9fiscal years, or such shorter period of existence, and
10any audit or other reports with respect to such financial
11statements.
   123.  A corporation shall maintain accounting records in a form
13that permits preparation of its financial statements.
   144.  A corporation shall maintain a record of its current
15shareholders in alphabetical order by class or series of shares
16showing the address of, and the number and class or series of
17shares held by, each shareholder. Nothing contained in this
18subsection shall require the corporation to include in such
19record the electronic mail address or other electronic contact
20information of a shareholder.
   215.  A corporation shall maintain the records specified in
22this section in a manner so that they may be made available for
23inspection within a reasonable time.
24   Sec. 197.  Section 490.1602, Code 2020, is amended by
25striking the section and inserting in lieu thereof the
26following:
   27490.1602  Inspection rights of shareholders.
   281.  A shareholder of a corporation is entitled to inspect
29and copy, during regular business hours at the corporation’s
30principal office, any of the records of the corporation
31described in section 490.1601, subsection 1, excluding minutes
32of meetings of, and records of actions taken without a meeting
33by, the corporation’s board of directors and board committees
34established under section 490.825, if the shareholder gives
35the corporation a signed written notice of the shareholder’s
-227-1demand at least five business days before the date on which the
2shareholder wishes to inspect and copy.
   32.  A shareholder of a corporation is entitled to inspect and
4copy, during regular business hours at a reasonable location
5specified by the corporation, any of the following records of
6the corporation if the shareholder meets the requirements of
7subsection 3 and gives the corporation a signed written notice
8of the shareholder’s demand at least five business days before
9the date on which the shareholder wishes to inspect and copy
10any of the following:
   11a.  The financial statements of the corporation maintained in
12accordance with section 490.1601, subsection 2.
   13b.  Accounting records of the corporation.
   14c.  Excerpts from minutes of any meeting of, or records of
15any actions taken without a meeting by, the corporation’s board
16of directors and board committees maintained in accordance with
17section 490.1601, subsection 1.
   18d.  The record of shareholders maintained in accordance with
19section 490.1601, subsection 4.
   203.  A shareholder may inspect and copy the records described
21in subsection 2 only if all of the following apply:
   22a.  The shareholder’s demand is made in good faith and for
23a proper purpose.
   24b.  The shareholder’s demand describes with reasonable
25particularity the shareholder’s purpose and the records the
26shareholder desires to inspect.
   27c.  The records are directly connected with the shareholder’s
28purpose.
   294.  The corporation may impose reasonable restrictions on
30the confidentiality, use, or distribution of records described
31in subsection 2.
   325.  For any meeting of shareholders for which the record date
33for determining shareholders entitled to vote at the meeting
34is different from the record date for notice of the meeting,
35any person who becomes a shareholder subsequent to the record
-228-1date for notice of the meeting and is entitled to vote at
2the meeting is entitled to obtain from the corporation upon
3request the notice and any other information provided by the
4corporation to shareholders in connection with the meeting,
5unless the corporation has made such information generally
6available to shareholders by posting it on its internet site or
7by other generally recognized means. Failure of a corporation
8to provide such information does not affect the validity of
9action taken at the meeting.
   106.  The right of inspection granted by this section shall
11not be abolished or limited by a corporation’s articles of
12incorporation or bylaws.
   137.  This section does not affect any of the following:
   14a.  The right of a shareholder to inspect records under
15section 490.720 or, if the shareholder is in litigation with
16the corporation, to the same extent as any other litigant.
   17b.  The power of a court, independently of this chapter,
18to compel the production of corporate records for examination
19and to impose reasonable restrictions as provided in section
20490.1604, subsection 3, provided that, in the case of
21production of records described in subsection 2, at the request
22of a shareholder, the shareholder has met the requirements of
23subsection 3.
   248.  As used in this section, “shareholder” means a record
25shareholder, a beneficial shareholder, and an unrestricted
26voting trust beneficial owner.
27   Sec. 198.  Section 490.1603, Code 2020, is amended by
28striking the section and inserting in lieu thereof the
29following:
   30490.1603  Scope of inspection right.
   311.  A shareholder may appoint an agent or attorney to
32exercise the shareholder’s inspection and copying rights under
33section 490.1602.
   342.  The corporation may, if reasonable, satisfy the right
35of a shareholder to copy records under section 490.1602 by
-229-1furnishing to the shareholder copies by photocopy or other
2means chosen by the corporation, including furnishing copies
3through an electronic transmission.
   43.  The corporation may comply at its expense with a
5shareholder’s demand to inspect the record of shareholders
6under section 490.1602, subsection 2, paragraph “d”, by
7providing the shareholder with a list of shareholders that was
8compiled no earlier than the date of the shareholder’s demand.
   94.  The corporation may impose a reasonable charge to cover
10the costs of providing copies of documents to the shareholder,
11which may be based on an estimate of such costs.
12   Sec. 199.  Section 490.1604, Code 2020, is amended by
13striking the section and inserting in lieu thereof the
14following:
   15490.1604  Court-ordered inspection.
   161.  If a corporation does not allow a shareholder who
17complies with section 490.1602, subsection 1, to inspect and
18copy any records required by that section to be available
19for inspection, the district court of the county where the
20corporation’s principal office or, if none in this state, its
21registered office, is located, may summarily order inspection
22and copying of the records demanded at the corporation’s
23expense upon application of the shareholder.
   242.  If a corporation does not within a reasonable time allow
25a shareholder who complies with section 490.1602, subsection
262, to inspect and copy the records required by that section,
27the shareholder who complies with section 490.1602, subsection
283, may apply to the district court in the county where the
29corporation’s principal office or, if none in this state, its
30registered office, is located for an order to permit inspection
31and copying of the records demanded. The court shall dispose
32of an application under this subsection on an expedited basis.
   333.  If the court orders inspection and copying of the
34records demanded under section 490.1602, subsection 2, it
35may impose reasonable restrictions on their confidentiality,
-230-1use, or distribution by the demanding shareholder and it
2shall also order the corporation to pay the shareholder’s
3expenses incurred to obtain the order, unless the corporation
4establishes that it refused inspection in good faith because
5of any of the following:
   6a.  The corporation had a reasonable basis for doubt about
7the right of the shareholder to inspect the records demanded.
   8b.  The corporation required reasonable restrictions on the
9confidentiality, use, or distribution of the records demanded
10to which the demanding shareholder had been unwilling to agree.
11   Sec. 200.  Section 490.1605, Code 2020, is amended by
12striking the section and inserting in lieu thereof the
13following:
   14490.1605  Inspection of records by directors.
   151.  A director of a corporation is entitled to inspect and
16copy the books, records, and documents of the corporation at
17any reasonable time to the extent reasonably related to the
18performance of the director’s duties as a director, including
19duties as a member of a board committee, but not for any other
20purpose or in any manner that would violate any duty to the
21corporation.
   222.  The district court of the county where the corporation’s
23principal office, or if none in this state, its registered
24office, is located may order inspection and copying of the
25books, records, and documents at the corporation’s expense,
26upon application of a director who has been refused such
27inspection rights, unless the corporation establishes that the
28director is not entitled to such inspection rights. The court
29shall dispose of an application under this subsection on an
30expedited basis.
   313.  If an order is issued, the court may include provisions
32protecting the corporation from undue burden or expense, and
33prohibiting the director from using information obtained upon
34exercise of the inspection rights in a manner that would
35violate a duty to the corporation, and may also order the
-231-1corporation to reimburse the director for the director’s
2expenses incurred in connection with the application.
3   Sec. 201.  Section 490.1620, Code 2020, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.1620  Financial statements for shareholders.
   71.  Upon the written request of a shareholder, a corporation
8shall deliver or make available to such requesting shareholder
9by posting on its internet site or by other generally
10recognized means annual financial statements for the most
11recent fiscal year of the corporation for which annual
12financial statements have been prepared for the corporation.
13If financial statements have been prepared for the corporation
14on the basis of generally accepted accounting principles
15for such specified period, the corporation shall deliver or
16make available such financial statements to the requesting
17shareholder. If the annual financial statements to be
18delivered or made available to the requesting shareholder are
19audited or otherwise reported upon by a public accountant,
20the report shall also be delivered or made available to the
21requesting shareholder.
   222.  A corporation shall deliver, or make available and
23provide written notice of availability of, the financial
24statements required under subsection 1 to the requesting
25shareholder within five business days of delivery of such
26written request to the corporation.
   273.  A corporation may fulfill its responsibilities under
28this section by delivering the specified financial statements,
29or otherwise making them available, in any manner permitted by
30the applicable rules and regulations of the federal securities
31and exchange commission.
   324.  Notwithstanding the provisions of subsections 1, 2, and
333, all of the following apply:
   34a.  As a condition to delivering or making available
35financial statements to a requesting shareholder, the
-232-1corporation may require the requesting shareholder to agree
2to reasonable restrictions on the confidentiality, use, and
3distribution of such financial statements.
   4b.  The corporation may, if it reasonably determines that the
5shareholder’s request is not made in good faith or for a proper
6purpose, decline to deliver or make available such financial
7statements to that shareholder.
   85.  If a corporation does not respond to a shareholder’s
9request for annual financial statements pursuant to this
10section in accordance with subsection 2 within five business
11days of delivery of such request to the corporation all of the
12following shall apply:
   13a.  The requesting shareholder may apply to the district
14court of the county where the corporation’s principal
15office, or if none in this state, its registered office, is
16located for an order requiring delivery of or access to the
17requested financial statements. The court shall dispose of an
18application under this subsection on an expedited basis.
   19b.  If the court orders delivery or access to the requested
20financial statements, it may impose reasonable restrictions on
21their confidentiality, use, or distribution.
   22c.  In such proceeding, if the corporation has declined to
23deliver or make available such financial statements because
24the shareholder had been unwilling to agree to restrictions
25proposed by the corporation on the confidentiality, use, and
26distribution of such financial statements, the corporation
27shall have the burden of demonstrating that the restrictions
28proposed by the corporation were reasonable.
   29d.  In such proceeding, if the corporation has declined to
30deliver or make available such financial statements pursuant
31to subsection 4, paragraph “b”, the corporation shall have the
32burden of demonstrating that it had reasonably determined that
33the shareholder’s request was not made in good faith or for a
34proper purpose.
   35e.  If the court orders delivery or access to the requested
-233-1financial statements it shall order the corporation to pay the
2shareholder’s expenses incurred to obtain such order unless
3the corporation establishes that it had refused delivery or
4access to the requested financial statements because the
5shareholder had refused to agree to reasonable restrictions
6on the confidentiality, use, or distribution of the financial
7statements or that the corporation had reasonably determined
8that the shareholder’s request was not made in good faith or
9for a proper purpose.
10   Sec. 202.  Section 490.1622, Code 2020, is amended by
11striking the section and inserting in lieu thereof the
12following:
   13490.1622  Biennial report for secretary of state.
   141.  Each domestic corporation shall deliver to the secretary
15of state for filing a biennial report that sets forth all of
16the following:
   17a.  The name of the corporation.
   18b.  The street and mailing addresses of its registered office
19and the name of its registered agent at that office in this
20state.
   21c.  The street and mailing addresses of its principal office.
   22d.  The names and business addresses of the president,
23secretary, treasurer, and one of the board of directors.
   242.  Each foreign corporation registered to do business in
25this state shall deliver to the secretary of state for filing a
26biennial report that sets forth all of the following:
   27a.  The name of the foreign corporation and, if the name does
28not comply with section 490.401, an alternate name as required
29by section 490.1506.
   30b.  The foreign corporation’s jurisdiction of formation.
   31c.  The street and mailing addresses of the foreign
32corporation’s principal office and, if the law of the foreign
33corporation’s jurisdiction of formation requires the foreign
34corporation to maintain an office in that jurisdiction, the
35street and mailing addresses of that office.
-234-   1d.  The street and mailing addresses of the foreign
2corporation’s registered office in this state and the name of
3its registered agent at that office.
   4e.  The names and business addresses of the president,
5secretary, treasurer, and one of the board of directors.
   63.  Information in the biennial report must be current as
7of the date the biennial report is signed on behalf of the
8corporation. The report shall be executed on behalf of the
9corporation and signed as provided in section 490.120 or by
10any other person authorized by the board of directors of the
11corporation.
   124.  The first biennial report shall be delivered to the
13secretary of state between January 1 and April 1 of the
14first even-numbered year following the calendar year in
15which a domestic corporation was incorporated or a foreign
16corporation was authorized to transact business. Subsequent
17biennial reports must be delivered to the secretary of state
18between January 1 and April 1 of the following even-numbered
19calendar years. A filing fee for the biennial report shall be
20determined by the secretary of state. For purposes of this
21section, each biennial report shall contain information related
22to the two-year period immediately preceding the calendar year
23in which the report is filed.
   245.  If a biennial report does not contain the information
25required by this section, the secretary of state shall promptly
26notify the reporting domestic or foreign corporation in writing
27and return the report to it for correction. If the report is
28corrected to contain the information required by this section
29and delivered to the secretary of state within thirty days
30after the notice from the secretary of state becomes effective
31as determined in accordance with section 490.141, it is deemed
32to be timely filed.
   336.  The secretary of state may provide for the change of
34registered office or registered agent on the form prescribed by
35the secretary of state for the biennial report, provided that
-235-1the form contains the information required in section 490.502.
2If the secretary of state determines that a biennial report
3does not contain the information required by this section but
4otherwise meets the requirements of section 490.502 for the
5purpose of changing the registered office or registered agent,
6the secretary of state shall file the statement of change of
7registered office or registered agent, effective as provided in
8section 490.123, before returning the biennial report to the
9corporation as provided in this section. A statement of change
10of registered office or agent pursuant to this subsection shall
11be executed by a person authorized to execute the biennial
12report.
13   Sec. 203.  Section 490.1701, Code 2020, is amended by
14striking the section and inserting in lieu thereof the
15following:
   16490.1701  Application of subchapter — definitions.
   171.  If a corporation elects to become a benefit corporation
18under this subchapter in the manner prescribed in this
19subchapter, it is subject in all respects to the provisions
20of this subchapter, except to the extent this subchapter
21imposes additional or different requirements, in which case
22such requirements apply. The inclusion of a provision in this
23subchapter does not imply that a contrary or different rule of
24law applies to a corporation that is not a benefit corporation.
25This subchapter does not affect a statute or rule of law that
26applies to a corporation that is not a benefit corporation.
   272.  As used in this subchapter:
   28a.  “Benefit corporation” means a corporation that includes
29in its articles of incorporation a statement that the
30corporation is subject to this subchapter.
   31b.  “Public benefit” means a positive effect, or reduction of
32negative effects, on one or more communities or categories of
33persons or entities, other than shareholders solely in their
34capacity as shareholders, or on the environment, including
35effects of an artistic, charitable, economic, educational,
-236-1cultural, literary, medical, religious, social, ecological, or
2scientific nature.
   3c.  “Public benefit provision” means a provision in the
4articles of incorporation which states that the corporation
5shall pursue one or more identified public benefits.
   6d.  “Responsible and sustainable manner” means a manner that
7does all of the following:
   8(1)  Pursues through the business of the corporation the
9creation of a positive effect on society and the environment,
10taken as a whole, that is material taking into consideration
11the corporation’s size and the nature of its business.
   12(2)  Considers, in addition to the interests of
13shareholders, the interests of stakeholders known to be
14affected by the conduct of the business of the corporation.
15   Sec. 204.  Section 490.1702, Code 2020, is amended by
16striking the section and inserting in lieu thereof the
17following:
   18490.1702  Name — share certificates.
   191.  The name of a benefit corporation may contain the
20words “benefit corporation”, the abbreviation “B.C.”, or the
21designation “BC”, any of which shall be deemed to satisfy the
22requirements of section 490.401, subsection 1, paragraph “a”.
   232.  Any share certificate issued by a benefit corporation,
24and any information statement delivered by a benefit
25corporation pursuant to section 490.626, subsection 2,
26must note conspicuously that the corporation is a benefit
27corporation subject to this subchapter.
28   Sec. 205.  Section 490.1703, Code 2020, is amended by
29striking the section and inserting in lieu thereof the
30following:
   31490.1703  Certain amendments and transactions — votes
32required.
   331.  Unless the articles of incorporation or bylaws require
34a greater vote, the approval of at least two-thirds of the
35voting power of the outstanding shares of the corporation
-237-1entitled to vote thereon, and, if any class or series of shares
2is entitled to vote as a separate group on any such amendment
3or transaction, the approval of at least two-thirds of the
4outstanding shares of each such separate voting group entitled
5to vote thereon, shall be required for a corporation that is
6not a benefit corporation to do any of the following:
   7a.  Amend its articles of incorporation to include a
8statement that it is subject to this subchapter.
   9b.  Merge with or into, or enter into a share exchange with,
10another entity, or effect a domestication or conversion, if,
11as a result of the merger, share exchange, domestication, or
12conversion, the shares of any voting group would become, or be
13converted into or exchanged for the right to receive, shares
14of a benefit corporation or shares or interests in an entity
15subject to provisions of organic law analogous to those in
16this subchapter; provided, however, that in the case of this
17paragraph “b”, if the shares of one or more, but not all,
18voting groups are so affected, then only the shares in the
19voting groups so affected shall be entitled to vote under this
20subsection.
   212.  Unless the articles of incorporation or bylaws require a
22greater vote, the approval of at least two-thirds of the voting
23power of the outstanding shares of the corporation entitled
24to vote thereon and, if any class or series of shares is
25entitled to vote as a separate group on any such amendment or
26transaction, the approval of at least two-thirds of the voting
27power of the outstanding shares of each such separate voting
28group, shall be required for a benefit corporation to do any
29of the following:
   30a.  Amend its articles of incorporation to eliminate a
31statement that the corporation is subject to this subchapter.
   32b.  Merge with or into, or enter into a share exchange with,
33another entity, or effect a domestication or conversion if,
34as a result of the merger, share exchange, domestication, or
35conversion, the shares of any voting group would become, or be
-238-1converted into or exchanged for the right to receive, shares or
2interests in an entity that is neither a benefit corporation
3nor an entity subject to provisions of organic law analogous to
4those in this subchapter; provided, however, that in the case
5of this paragraph “b”, if the shares of one or more, but not
6all, voting groups are so affected, then only the shares in the
7voting groups so affected shall be entitled to vote under this
8subsection.
   93.  The vote required under subsections 1 and 2 is in
10addition to any vote otherwise required under this chapter.
11   Sec. 206.  NEW SECTION.  490.1704  Duties of directors.
   121.  Each member of the board of directors of a benefit
13corporation, when discharging the duties of a director, shall
14act according to all of the following:
   15a.  In a responsible and sustainable manner.
   16b.  In a manner that pursues the public benefit or benefits
17identified in any public benefit provision.
   182.  In fulfilling the duties under subsection 1, a director
19shall consider, to the extent affected, in addition to the
20interests of shareholders generally, the separate interests
21of stakeholders known to be affected by the business of the
22corporation including all of the following:
   23a.  The employees and workforces of the corporation, its
24subsidiaries, and its suppliers.
   25b.  Customers.
   26c.  Communities or society, including those of each community
27in which offices or facilities of the corporation, its
28subsidiaries, or its suppliers are located.
   29d.  The local and global environment.
   303.  A director of a benefit corporation shall not, by virtue
31of the duties imposed by subsections 1 and 2, owe any duty to a
32person other than the benefit corporation due to any interest
33of the person in the status of the corporation as a benefit
34corporation or in any public benefit provision.
   354.  Unless otherwise provided in the articles of
-239-1incorporation, the violation by a director of the duties
2imposed by subsections 1 and 2 shall not constitute an
3intentional infliction of harm on the corporation or the
4shareholders for the purposes of sections 490.202, subsection
52, paragraphs “d” and “e”.
6   Sec. 207.  NEW SECTION.  490.1705  Annual benefit report.
   71.  No less than annually, a benefit corporation shall
8prepare a benefit report addressing the efforts of the
9corporation during the preceding year to operate in a
10responsible and sustainable manner, to pursue any public
11benefit or benefits identified in any public benefit provision,
12and to consider the interests described in section 490.1704,
13subsection 2. The annual benefit report must include all of
14the following:
   15a.  The objectives that the board of directors has
16established for the corporation to operate in a responsible and
17sustainable manner, to pursue any public benefit or benefits
18identified in any public benefit provision, and to consider the
19interests described in section 490.1704, subsection 2.
   20b.  The standards the board of directors has adopted
21to measure the corporation’s progress in operating in a
22responsible and sustainable manner, in pursuing the public
23benefit or benefits identified in any public benefit provision,
24and in considering the interests described in section 490.1704,
25subsection 2.
   26c.  If the articles of incorporation or bylaws require
27that the corporation use an independent third-party standard
28in reporting on the corporation’s progress in operating in a
29responsible and sustainable manner, in pursuing any public
30benefit or benefits identified in any public benefit provision,
31or in considering the interests described in section 490.1704,
32subsection 2, or if the board of directors has chosen to use
33such a standard, the applicable standard so required or chosen.
   34d.  An assessment of the corporation’s success in meeting
35the objectives and standards identified in paragraphs “a” and
-240-1“b”, and, if applicable, paragraph “c”, and the basis for that
2assessment.
   32.  The benefit corporation shall deliver to each
4shareholder, or make available and provide written notice to
5each shareholder of the availability of, the annual benefit
6report required by subsection 1 on or before the earlier of the
7following:
   8a.  One hundred twenty days following the end of the fiscal
9year of the benefit corporation.
   10b.  The time that the benefit corporation delivers any
11other annual reports or annual financial statements to its
12shareholders.
   133.  Any shareholder that has not received or been given
14access to an annual benefit report within the time required by
15subsection 2 may make a written request that the corporation
16deliver or make available the annual benefit report to the
17shareholder. If a benefit corporation does not deliver or make
18available an annual benefit report to the shareholder within
19five business days of receiving such request, the requesting
20shareholder may apply to the district court for an order
21requiring delivery of or access to the annual benefit report.
22The court shall dispose of an action under this subsection 3
23on an expedited basis.
   244.  A benefit corporation shall post all of its annual
25benefit reports on the public portion of its internet site,
26if any. If a benefit corporation does not have an internet
27site, the benefit corporation shall provide a copy of its most
28recent annual benefit report, without charge, to any person
29that requests a copy in writing.
30   Sec. 208.  NEW SECTION.  490.1706  Rights of action.
   311.  Except in a proceeding authorized under section
32490.1705, subsection 3, or this section, no person other
33than the corporation, or a shareholder in the right of the
34corporation pursuant to subsection 2, may bring an action
35or assert a claim with respect to the violation of any duty
-241-1applicable to a benefit corporation or any of its directors
2under this subchapter.
   32.  Except for a proceeding brought under section 490.1705,
4subsection 3, a proceeding by a shareholder of a benefit
5corporation claiming violation of any duty applicable to
6a benefit corporation or any of its directors under this
7subchapter is subject to all of the following:
   8a.  The proceeding must be brought in a derivative proceeding
9pursuant to subchapter VII, part 4.
   10b.  The proceeding may be brought only by a shareholder
11of the benefit corporation that at the time of the act or
12omission complained of either individually, or together with
13other shareholders bringing such action collectively, owned
14directly or indirectly at least five percent of a class of
15the corporation’s outstanding shares or, in the case of a
16corporation with shares traded on an organized market as
17described in section 490.1302, subsection 2, paragraph “a”,
18subparagraph (2), either that percentage of shares or shares
19with a market value of at least five million dollars at the
20time the proceeding is commenced.
   213.  A suit under subsection 2 shall not be maintained if,
22during the pendency of the suit, the shareholder individually
23fails, or the shareholders collectively fail, to continue to
24own directly or indirectly the lesser of the number of shares
25owned at the time the proceeding is commenced or five percent
26of a class of the corporation’s shares.
27   Sec. 209.  NEW SECTION.  490.1801  Application to existing
28domestic corporations.
   291.  This chapter applies to all domestic corporations in
30existence on July 1, 2021, that were incorporated under any
31general statute of this state providing for incorporation of
32corporations for profit if power to amend or repeal the statute
33under which the corporation was incorporated was reserved.
   342.  a.  Unless otherwise provided, this chapter does not
35apply to an entity subject to chapter 174, 497, 498, 499, 499A,
-242-1501, 501A, 524, or 533, or a corporation organized on the
2mutual plan under chapter 491, or a telephone company organized
3as a corporation under chapter 491 qualifying pursuant to
4an internal revenue service letter ruling under Internal
5Revenue Code §501(c)(12) as a nonprofit corporation entitled
6to distribute profits in a manner similar to a chapter 499
7corporation, unless such entity voluntarily elects to adopt
8the provisions of this chapter and complies with the procedure
9prescribed by subsection 3.
   10b.  A corporation organized under chapter 496C may
11voluntarily elect to adopt the provisions of this chapter by
12complying with the provisions prescribed by subsection 3.
   133.  The procedure for the voluntary election referred to in
14subsection 2 is as follows:
   15a.  The corporation shall amend or restate its articles of
16incorporation to indicate that the corporation adopts this
17chapter and to designate the address of its initial registered
18office and the name of its registered agent at that office
19and, if the name of the corporation is not in compliance with
20the requirements of this chapter, to change the name of the
21corporation to one complying with the requirements of this
22chapter.
   23b.  (1)  The instrument shall be delivered to the secretary
24of state for filing and recording in the secretary of state’s
25office. If the corporation was organized under chapter 524
26or 533, the instrument shall also be filed and recorded in
27the office of the county recorder. The corporation shall at
28the time it files the instrument with the secretary of state
29deliver also to the secretary of state for filing in the
30secretary of state’s office any biennial report which is then
31due.
   32(2)  If the county of the initial registered office as stated
33in the instrument for a corporation organized under chapter
34524 or 533 is one which is other than the county where the
35principal place of business of the corporation, as designated
-243-1in its articles of incorporation, was located, the corporation
2shall forward to the county recorder of the county in which the
3principal place of business of the corporation was located a
4copy of the instrument and the corporation shall forward to the
5recorder of the county in which the initial registered office
6of the corporation is located, in addition to a copy of the
7original instrument, a copy of the articles of incorporation of
8the corporation together with all amendments to them as then
9on file in the secretary of state’s office. The corporation
10shall, through an officer or director, certify to the secretary
11of state that a copy has been sent to each applicable county
12recorder, including the date each copy was sent.
   13c.  Upon the filing of the instrument by a corporation all
14of the following apply:
   15(1)  All of the provisions of this chapter apply to the
16corporation.
   17(2)  The secretary of state shall issue a certificate as to
18the filing of the instrument and deliver the certificate to the
19corporation or its representative.
   20(3)  The secretary of state shall not file the instrument
21with respect to a corporation unless at the time of filing
22the corporation is validly existing and in good standing in
23that office under the chapter under which it is incorporated.
24The corporation shall be considered validly existing and in
25good standing for the purpose of this chapter for a period of
26three months following the expiration date of the corporation,
27provided all biennial reports due have been filed and all fees
28due in connection with the biennial reports have been paid.
   29d.  The provisions of this chapter becoming applicable to
30a corporation voluntarily electing to be governed by this
31chapter do not affect any right accrued or established, or any
32liability or penalty incurred, under the chapter under which
33it is incorporated prior to the filing by the secretary of
34state in the secretary of state’s office of the instrument
35manifesting the election by the corporation to adopt the
-244-1provisions of this chapter as provided in this subsection.
   24.  A corporation subject to this chapter is not subject to
3chapter 491, 492, 493, or 495.
4   Sec. 210.  NEW SECTION.  490.1802  Application to existing
5foreign corporation.
   6A foreign corporation registered or authorized to do
7business in this state on the effective date of this Act is
8subject to this chapter, is deemed to be registered to do
9business in this state, and is not required to file a foreign
10registration statement under this chapter.
11   Sec. 211.  NEW SECTION.  490.1803  Savings provisions.
   121.  Except as to procedural provisions, this Act does not
13affect any of the following:
   14a.  A pending action or proceeding or a right accrued before
15the effective date of this Act, and a pending civil action
16or proceeding may be completed, and a right accrued may be
17enforced, as if this Act had not become effective.
   18b.  The requirements set forth in 2018 Iowa Acts, chapter
191015.
   202.  If a penalty or punishment for violation of a statute
21or rule is reduced by this Act, the penalty, if not already
22imposed, shall be imposed in accordance with this Act.
   233.  In the event that any provision of this chapter is
24deemed to modify, limit, or supersede the federal Electronic
25Signatures in Global and National Commerce Act, 15 U.S.C. §7001
26et seq., the provisions of this chapter shall control to the
27maximum extent permitted by section 102(a)(2) of that federal
28Act.
29   Sec. 212.  NEW SECTION.  490.1804  Severability.
   30If any provision of this chapter or its application to any
31person or circumstance is held invalid by a court of competent
32jurisdiction, the invalidity does not affect other provisions
33or applications of this chapter that can be given effect
34without the invalid provision or application.
35   Sec. 213.  REPEAL.  2018 Iowa Acts, chapter 1015, section 8,
-245-1is repealed.
2   Sec. 214.  CONTINUATION OF THE ARTICLES OF
3INCORPORATION.  Notwithstanding the amendments to sections
4490.803, 490.805, 490.806, and 490.810, and the repeal of
5490.806A, 490.806B, and 490.1005A, as provided in this division
6of this Act, any amendment to the articles of incorporation
7of a public corporation adopted in compliance with section
8490.806A or 490.806B as those sections existed immediately
9prior to the effective date of this division of this Act shall
10remain in effect until amended or repealed as provided in the
11relevant sections of chapter 490 as those sections exist on or
12after the effective date of this division of this Act.
13   Sec. 215.  CODE EDITOR DIRECTIVE.
   141.  The Code editor is directed to make the following
15transfers:
   16a.  Section 490.135, as amended by this division of this Act,
17to section 490.130.
   18b.  Section 490.833, as amended by this division of this Act,
19to section 490.832.
   20c.  Section 490.629 to section 490.628.
   21d.  Section 490.1622, as amended by this division of this
22Act, to section 490.1621.
   232.  The Code editor shall correct internal references in the
24Code and in any enacted legislation as necessary due to the
25enactment of this section.
26   Sec. 216.  REPEAL.  Sections 490.624A, 490.628, 490.806A,
27490.806B, 490.1005A, 490.1111, 490.1112, 490.1113, 490.1114,
28490.1520, 490.1523, 490.1530, 490.1531, 490.1532, and 490.1606,
29Code 2020, are repealed.
30   Sec. 217.  DIRECTIONS TO THE CODE EDITOR.  The Code editor
31is directed to divide Code chapter 490 into subchapters and
32subdivide certain subchapters into parts, including sections in
33that chapter not amended in this Act, and sections amended or
34enacted in this Act, as follows:
   351.  Subchapter I, subdivided into part A, including sections
-246-1490.101 and 490.102; part B, including sections 490.120 through
2490.129; part C, including section 490.130; part D, including
3sections 490.140 through 490.144; and part E, including
4sections 490.145 through 490.152.
   52.  Subchapter II, including sections 490.201 through
6490.208.
   73.  Subchapter III, including sections 490.301 through
8490.304.
   94.  Subchapter IV, including sections 490.401 through
10490.403.
   115.  Subchapter V, including sections 490.501 through
12490.504.
   136.  Subchapter VI, subdivided into part A, including
14sections 490.601 through 490.604; part B, including sections
15490.620 through 490.627; part C, including sections 490.630 and
16490.631; and part D, including section 490.640.
   177.  Subchapter VII, subdivided into part A, including
18sections 490.701 through 490.709; part B, including sections
19490.720 through 490.729; part C, including sections 490.730
20through 490.732; part D, including sections 490.740 through
21490.747; and part E, including sections 490.748 and 490.749.
   228.  Subchapter VIII, subdivided into part A, including
23sections 490.801 through 490.811; part B, including sections
24490.820 through 490.826; part C, including sections 490.830
25through 490.832; part D, including sections 490.840 through
26490.844; part E, including sections 490.850 through 490.859;
27part F, including sections 490.860 through 490.863; and part
28G, including section 490.870.
   299.  Subchapter IX, subdivided into part A, including
30sections 490.901 through 490.904; part B, including sections
31490.920 through 490.924; and part C, including sections 490.930
32through 490.935.
   3310.  Subchapter X, subdivided into part A, including
34sections 490.1001 through 490.1009; and part B, including
35sections 490.1020 through 490.1022.
-247-   111.  Subchapter XI, including sections 490.1101 through
2490.1110.
   312.  Subchapter XII, including sections 490.1201 and
4490.1202.
   513.  Subchapter XIII, subdivided into part A, including
6sections 490.1301 through 490.1303; part B, including sections
7490.1320 through 490.1326; subchapter C, including sections
8490.1330 and 490.1331; and part D, including section 490.1340.
   914.  Subchapter XIV, subdivided into part A, including
10sections 490.1401 through 490.1409; part B, including sections
11490.1420 through 490.1423; part C, including sections 490.1430
12through 490.1434; and part D, including section 490.1440.
   1315.  Subchapter XV, including sections 490.1501 through
14490.1512.
   1516.  Subchapter XVI, subdivided into part A, including
16sections 490.1601 through 490.1605; and part B, including
17sections 490.1620 and 490.1621.
   1817.  Subchapter XVII, including sections 490.1701 through
19490.1706.
   2018.  Subchapter XVIII, including sections 490.1801 through
21490.1804.
22   Sec. 218.  EFFECTIVE DATE.  This division of this Act takes
23effect July 1, 2021.
24DIVISION II
25CORRESPONDING AMENDMENTS
26   Sec. 219.  Section 249A.40, Code 2020, is amended to read as
27follows:
   28249A.40  Involuntarily dissolved providers — overpayments or
29incorrect payments.
   30Medical assistance paid to a provider following involuntary
31 administrative dissolution of the provider pursuant to chapter
32490, subchapter XIV, part B, shall be considered incorrectly
33paid for the purposes of section 249A.53 and the provider
34shall be considered to have received an overpayment for the
35purposes of this subchapter. For the purposes of this section,
-248-1the overpayment shall not accrue until after a grace period
2of ninety days following receipt of notice by the provider
3of the dissolution from the department. Notwithstanding
4section 490.1422, or any other similar retroactive provision
5for reinstatement, the director shall recoup any medical
6assistance paid to a provider while the provider was dissolved
7if the provider is not retroactively reinstated within the
8ninety-day grace period. The principals of the provider shall
9be personally liable for the incorrect payment or overpayment.
10   Sec. 220.  Section 455B.397, Code 2020, is amended to read
11as follows:
   12455B.397  Financial disclosure.
   13Immediately upon the incurrence of any liability to
14the state under this part, the debtor shall submit to the
15director a report consisting of documentation of the debtor’s
16liabilities and assets, including if filed, a copy of the
17annual biennial report submitted to the secretary of state
18pursuant to chapter 490 section 490.1622. A subsequent report
19pursuant to this section shall be submitted annually on April
2015 for the life of the debt. These reports shall be kept
21confidential and shall not be available to the public.
22   Sec. 221.  Section 455B.430, subsection 5, Code 2020, is
23amended to read as follows:
   245.  Immediately upon the listing of real property in the
25registry of hazardous waste or hazardous substance disposal
26sites, a person liable for cleanup costs shall submit to
27the director a report consisting of documentation of the
28responsible person’s liabilities and assets, including if
29filed, a copy of the annual biennial report submitted to the
30secretary of state pursuant to chapter 490 section 490.1622. A
31subsequent report pursuant to this section shall be submitted
32annually on April 15 for the period the site remains on the
33registry.
34   Sec. 222.  Section 491.16A, Code 2020, is amended to read as
35follows:
-249-   1491.16A  Directors and officers — duties and liabilities.
   2Sections 490.830, 490.831, and 490.833 through 490.832,
3sections 490.840 through 490.842, sections 490.860 through
4490.863, and section 490.870 apply to corporations organized
5under or subject to this chapter.
6   Sec. 223.  Section 496C.14, subsection 5, Code 2020, is
7amended to read as follows:
   85.  Notwithstanding subsections 1 through 4, purchase by
9the corporation is not required upon the occurrence of any
10event other than death of a shareholder if the corporation
11is dissolved or voluntarily elects to adopt the provisions
12of the Iowa business corporation Act, as provided in section
13490.1701 490.1801, subsection 2, within sixty days after the
14occurrence of the event. The articles of incorporation or
15bylaws may provide that purchase is not required upon the death
16of a shareholder if the corporation is dissolved within sixty
17days after the death. Notwithstanding subsections 1 through 4,
18purchase by the corporation is not required upon the death of a
19shareholder if the corporation voluntarily elects to adopt the
20provisions of the Iowa business corporation Act, as provided
21in section 490.1701 490.1801, subsection 2, within sixty days
22after death.
23   Sec. 224.  Section 496C.19, Code 2020, is amended to read as
24follows:
   25496C.19  Dissolution or liquidation.
   26Violation of any provision of this chapter by a professional
27corporation or any of its shareholders, directors, or officers
28shall be cause for its involuntary dissolution, or liquidation
29of its assets and business by the district court, as provided
30in the Iowa business corporation Act, chapter 490. Upon the
31death of the last remaining shareholder of a professional
32corporation, or whenever the last remaining shareholder is not
33licensed or ceases to be licensed to practice in this state a
34profession which the corporation is authorized to practice,
35or whenever any person other than the shareholder of record
-250-1becomes entitled to have all shares of the last remaining
2shareholder of the corporation transferred into that person’s
3name or to exercise voting rights, except as a proxy, with
4respect to such shares, the corporation shall not practice
5any profession and it shall either be promptly dissolved or
6shall promptly elect to adopt the provisions of the Iowa
7business corporation Act, as provided in section 490.1701
8 490.1801, subsection 2. However, if prior to such dissolution
9all outstanding shares of the corporation are acquired by
10one or more persons licensed to practice in this state a
11profession which the corporation is authorized to practice,
12the corporation need not be dissolved and may practice the
13profession as provided in this chapter.
14   Sec. 225.  Section 499.69A, subsection 2, paragraph b,
15subparagraph (2), Code 2020, is amended to read as follows:
   16(2)  For a qualified corporation which is a party to the
17proposed qualified merger, the qualified corporation shall
18approve the plan as provided in chapter 490, subchapter XI.
19   Sec. 226.  Section 499.69A, subsections 5 and 6, Code 2020,
20are amended to read as follows:
   215.  The effect of a qualified merger for a qualified survivor
22which is a cooperative association shall be as provided for in
23this chapter. The effect of a qualified merger for a qualified
24survivor which is a qualified corporation shall be as provided
25for corporations under chapter 490, subchapter XI.
   266.  The provisions governing the right of a shareholder or
27member of a cooperative association to object to a merger or
28the right of a member to dissent and obtain payment of the
29fair value of an interest in the cooperative association in
30the case of a merger as provided in this chapter shall apply
31to a qualified merger. The provisions governing the right
32of a shareholder of a corporation to dissent from exercise
33appraisal rights and obtain payment of the fair value of the
34shareholder’s shares in the case of a merger as provided in
35subchapter XIII of chapter 490, subchapter XIII, shall apply
-251-1to a qualified merger.
2   Sec. 227.  Section 508.12, subsection 1, Code 2020, is
3amended to read as follows:
   41.  An insurer which is organized under the laws of any
5state and has created or will create jobs in this state or
6which is an affiliate or subsidiary of a domestic insurer,
7and is admitted to do business in this state for the purpose
8of writing insurance authorized by this chapter may become a
9domestic insurer by complying with section 490.902 chapter
10490, subchapter IX or section 491.33 and with all of the
11requirements of law relative to the organization and licensing
12of a domestic insurer of the same type and by designating
13its principal place of business in this state may become a
14domestic corporation and be entitled to like certificates of
15its corporate existence and license to transact business in
16this state, and be subject in all respects to the authority and
17jurisdiction thereof.
18   Sec. 228.  Section 508B.2, subsection 2, Code 2020, is
19amended to read as follows:
   202.  A plan of conversion may provide that a mutual company
21may convert into a domestic stock company, convert and merge,
22or convert and consolidate with a domestic stock company,
23as provided in chapter 490 or 491, whichever is applicable.
24However, the mutual company is not required to comply with
25sections 491.102 through 491.105 or sections 490.1102 and
26490.1104 relating to approval of a merger or consolidation
27plans plan, or sections 490.1102 and 490.1104 providing for
28a plan of merger or share exchange, by boards of directors
29and shareholders, if at the time of approval of the plan of
30conversion the board of directors approves the merger or
31consolidation and if at the time of approval of the plan by
32policyholders as provided in section 508B.6, the policyholders
33approve the merger or consolidation. This chapter supersedes
34any conflicting provisions of chapters 521 and 521A. A mutual
35company may convert, merge, or consolidate as part of a plan of
-252-1conversion in which a majority or all of the common shares of
2the stock company are acquired by another corporation, which
3may be a corporation organized for that purpose, or in which
4the new stock company consolidates with a stock company to form
5another stock company.
6   Sec. 229.  Section 515.78, subsection 1, Code 2020, is
7amended to read as follows:
   81.  An insurer which is organized under the laws of any
9state and has created or will create jobs in this state or
10which is an affiliate or subsidiary of a domestic insurer,
11and is admitted to do business in this state for the purpose
12of writing insurance authorized by this chapter may become a
13domestic insurer by complying with section 490.902 chapter
14490, subchapter IX or section 491.33 and with all of the
15requirements of law relative to the organization and licensing
16of a domestic insurer of the same type and by designating
17its principal place of business in this state may become a
18domestic corporation and be entitled to like certificates of
19its corporate existence and license to transact business in
20this state, and be subject in all respects to the authority and
21jurisdiction thereof.
22   Sec. 230.  Section 515E.3A, subsection 1, paragraph a, Code
232020, is amended to read as follows:
   24a.  Complying with section 490.902 chapter 490, subchapter
25IX.
26   Sec. 231.  Section 515G.3, subsection 2, Code 2020, is
27amended to read as follows:
   282.  A plan of conversion for an insurer organized on
29the mutual plan under chapter 491, shall also provide for
30conversion to a stock company as follows: the insurer
31organized on the mutual plan under chapter 491 shall amend
32its articles pursuant to chapter 491 as necessary to become
33a stock company, and shall immediately convert to a chapter
34490 corporation as provided in section 490.1701 490.1801 upon
35becoming a stock company.
-253-1   Sec. 232.  Section 556.5, subsection 4, paragraph b, Code
22020, is amended to read as follows:
   3b.  A disbursement held by a cooperative association shall
4not be deemed abandoned under this chapter if the disbursement
5is retained by a cooperative association organized under
6chapter 490 as provided in section 490.629, by a cooperative
7association organized under chapter 499 as provided in section
8499.30A, or by a cooperative as provided in section 501A.1008.
9   Sec. 233.  EFFECTIVE DATE.  This division of this Act takes
10effect July 1, 2021.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
   14BACKGROUND. Code chapter 490, the “Iowa Business
15Corporation Act” (IBCA) was enacted in 1989 (1989 Iowa Acts,
16chapter 288), and it is the primary Code chapter governing the
17requirements for the creation, organization, and operation of
18for-profit corporations, including the relationship between
19shareholders, directors, and officers of the corporation.
20Generally, and with notable exceptions, the IBCA establishes
21default requirements and procedures which may be modified by a
22corporation’s articles of incorporation or bylaws. The IBCA is
23administered by the secretary of state.
   24BASIS FOR THE IBCA. The IBCA was based on legislation
25proposed by the American bar association (ABA) referred to
26as the model business corporation Act (MBCA) and has been
27subsequently amended. The most substantial amendments to
28the IBCA, based on ABA-recommended legislation, were enacted
29in 2013 (2013 Iowa Acts, chapter 31). This bill includes
30amendments adopted in 2016 by the ABA corporate laws committee
31and published as the fourth edition of the MBCA (new MBCA).
32 The new MBCA is divided into various chapters which are
33referred to as subchapters in Code chapter 490. The new MBCA
34makes a number of changes to most of its sections, in many
35instances to enhance readability or internal consistency.
-254-   1FORMS AND FILING FEES. The bill revises the types of
2documents that the secretary of state may prescribe without
3requiring that the form of such documents are mandatory
4(amended Code section 490.121). It eliminates specific
5filing fees currently set forth by statute which presumably
6would leave the amount of such fees to the discretion of
7the secretary of state (amended Code section 490.122). It
8revises requirements to determine when a document filed with
9the secretary of state becomes effective (amended Code section
10490.123).
   11DEFINITIONS. The bill rewrites a number of definitions
12applicable throughout the IBCA, including by eliminating the
13definition of a “public corporation” (a corporation having a
14class of voting stock that is listed on a national securities
15exchange or held of record by more than 2,000 shareholders)
16which currently distinguishes such entities from closely held
17corporations (amended Code section 490.140). Therefore, a
18shareholder agreement would survive an entity’s move from
19a closed corporation to a public corporation (amended Code
20section 490.732). The bill defines “eligible entities”,
21which include noncorporate entities authorized to engage
22in transactions with a corporation, including by merger or
23share exchange (amended Code sections 490.140, 490.1102, and
24490.1103).
   25FORUM. The bill provides that the article of incorporation
26or bylaws may specify the forum for litigation involving
27internal corporate claims (new Code section 490.208).
   28RATIFICATION AS A METHOD TO CURE A DEFECT IN A CORPORATE
29ACTION. The bill provides a process to remedy a defect
30in the manner in which a corporate action was authorized
31(“ratification”), including an action relating to the issuance
32of shares, thereby creating a “safe harbor” procedure for a
33corporation to avoid a legal challenge. The remedial action
34may be taken by the board of directors and if required by
35the shareholders. It also provides for a judicial remedy.
-255-1Finally, the bill provides for the retroactive validity of the
2remedial action (new Code sections 490.145 through 490.152).
   3REGISTERED OFFICES AND REGISTERED AGENTS. The bill provides
4that the resignation of a registered agent of a foreign
5corporation takes effect either at 12:01 a.m.on the 31st day
6after the day on which the registration statement is filed with
7the secretary of state or the designation of a new registered
8agent by the corporation, whichever is earlier (amended Code
9section 490.503).
   10DIRECTORS. The bill provides for the qualifications of
11directors or nominees for directors, including as may be
12prescribed by the articles of incorporation or bylaws (e.g.,
13not being subject to criminal, civil, or administrative
14sanctions). It requires that the qualifications must be both
15reasonable and lawful (amended Code section 490.802). It
16provides for the judicial removal of a director by a court and
17for a court order barring the director from seeking reelection
18(amended Code section 490.809). It also provides quorum
19requirements for a meeting of the board as specified by the
20articles of incorporation or bylaws so long as it consists
21of at least one-third of the total number of directors as
22currently required (amended Code section 490.824). It also
23provides that in a noncompetitive election, a director who
24failed to receive a majority vote may fill the office for 90
25days (new Code section 490.1022).
   26DIRECTORS AND OFFICERS — BUSINESS OPPORTUNITIES AND
27EXPENSES. A director or officer may be presented with
28a business opportunity that affects the interest of the
29corporation, and may create a duty to present the business
30opportunity to the corporation to be approved by qualified
31(i.e., disinterested) board members. The bill provides that
32the articles of incorporation may limit or eliminate this duty
33(amended Code sections 490.202 and 490.870). It also provides
34for advancing expenses to directors and officers (e.g., in
35cases involving litigation). The bill eliminates a requirement
-256-1that the director or officer must provide a written affirmation
2that the director or officer has satisfied the required
3standard of conduct, but does not amend another requirement
4that requires repayment if the person is not required to be
5indemnified (amended Code sections 490.851 and 490.853).
   6OFFICERS — STANDARD OF CONDUCT. The bill provides methods
7for an officer to report a violation of law or other breach of a
8fiduciary obligation (amended Code section 490.842).
   9SHAREHOLDERS. The bill provides for procedures for
10notifying shareholders (amended Code section 490.141). It
11amends provisions allowing for remote participation by
12shareholders, by providing for such access during annual
13and special meetings, including remote-only access without
14a designated location (amended Code section 490.709). It
15prohibits a corporation from voting shares of an entity
16which is owned or controlled by the corporation, regardless
17of the circumstances (amended Code section 490.721). It
18provides that the articles of incorporation or bylaws cannot
19establish a quorum that is less than that required by the
20Code chapter (amended Code section 490.725). It requires
21that before a shareholder (interest holder) becomes liable
22for a new obligation due to the amendment to the articles of
23incorporation (new interest holder liability), the shareholder
24must provide written consent (amended Code section 490.1003).
   25SHARES AND DISTRIBUTIONS. The bill provides that a
26shareholder may become personally liable for the debts of
27the corporation if such liability is due to a shareholder’s
28conduct. It eliminates a provision, not part of the MBCA,
29referred to as the “poison pill” that allows a board of
30directors to prevent a hostile takeover (repealed Code
31section 490.624A). It provides that a board of directors may
32fix the record date for determining when shareholders are
33entitled to receive a dividend or distribution (amended Code
34sections 490.623 and 490.640). The record date is the date
35for determining the identity of the corporation’s shareholders
-257-1(amended Code section 490.705).
   2DOMESTICATION AND CONVERSION. The bill provides a procedure
3referred to as domestication which allows an entity organized
4under Iowa law to change its state of incorporation (to become
5foreign) to another state or to allow an entity incorporated
6in another state to be incorporated in Iowa (new Code sections
7490.920 through 490.924). It also rewrites provisions for
8the process of conversion in which a domestic corporation may
9become another type of entity or a foreign entity which is not
10a corporation may become a domestic corporation (Iowa Code
11sections 490.1111 through 490.1114 repealed and replaced by new
12Code sections 490.930 through 490.935).
   13FOREIGN CORPORATIONS. The bill eliminates the term
14“certificate of authorization” issued to a foreign corporation,
15replaces that term with “certificate of registration”, and
16includes specific requirements for that document (Code section
17490.128). It repeals a number of provisions relating to the
18issuance or revocation of such authorization, including the
19withdrawal of a foreign corporation’s authorization (Code
20section 490.1520), the transfer of a foreign corporation’s
21authorization to transact business in this state (Code section
22490.1523), the grounds or the revocation of a certificate of
23authority (Code section 490.1530), the procedure for such
24revocation (Code section 490.1531), and a process to repeal
25that revocation (Code section 490.1532).
   26MERGERS AND SHARE EXCHANGES WITHOUT SHAREHOLDER APPROVAL.
27 The bill amends provisions allowing for both mergers (the
28combination or consolidation of two or more entities into a
29new entity) and a share exchange (a transaction in which two
30corporations exchange shares or securities which results in one
31corporation controlling the acquired corporation while each
32corporation remains in existence). The bill allows a merger or
33share exchange without a shareholder vote in addition to the
34current short form exception that allows such a transaction
35only if the acquiring corporation would own 90 percent of the
-258-1shares in the other corporation after the transaction. Under
2the bill, the transaction is allowed, so long as a number
3of conditions are satisfied (amended Code sections 490.1101
4through 490.1108 and unamended sections 490.1108A through
5490.1110). The merger or share exchange must follow the tender
6offer and be made on the terms provided in the plan of merger
7or share exchange, and the offeror must acquire enough shares
8to permit it to approve the merger or share exchange as if the
9matter were submitted to a vote at a meeting of shareholders.
10It would also allow for a subsidiary corporation to merge with
11an unincorporated parent entity without the approval of the
12subsidiary corporation’s board of directors or shareholders
13(amended Code section 490.1105).
   14APPRAISAL RIGHTS. The bill amends provisions that allow
15a minority (dissenting) shareholder to assert appraisal
16rights which triggers a payout for the fair value for the
17shareholder’s shares under limited circumstances where a
18material change in the relationship between the corporation
19and the shareholder is proposed (e.g., in the case of a merger
20or share exchange). The bill provides that a domestication
21or conversion to an unincorporated entity also triggers that
22right (Code section 490.1302). It also limits the right to an
23appraisal if the corporate action involves the distribution of
24the corporation’s net assets to the shareholders.
   25DISSOLUTION. The bill allows the board of directors to fix
26a record date to determine shareholder distribution so long as
27it is not made retroactive (amended Code section 490.1405). It
28also requires the board to make reasonable payment of claims
29and distributions in liquidations of assets to shareholders
30after satisfying claims (amended Code section 490.1409).
31The bill largely retains the current provision allowing for
32reinstatement following administrative dissolution (amended
33Code section 490.1422).
   34RECORDS AND REPORTS. The bill amends provisions which allow
35for the inspection of corporate records by shareholders (e.g.,
-259-1articles of incorporation, bylaws, notices to shareholders,
2contact information for directors and officers, biennial
3reports, minutes of meetings, records of action taken without
4a board or committee meeting, and financial statements). The
5bill provides that the corporation may impose reasonable
6restrictions upon a shareholder’s request, including
7confidentiality and the use distribution of such records
8(amended Code sections 490.1601 and 490.1602). It eliminates
9a requirement that a corporation deliver or make available
10to shareholders the corporation’s annual financial statement
11(amended Code section 490.1620). It does not adopt the new
12MBCA’s provisions relating to annual reports but retains and
13revises the provision requiring corporations to prepare and
14deliver biennial reports to the secretary of state (amended
15Code section 490.1622).
   16BENEFIT CORPORATIONS. The bill authorizes benefit
17corporations. A benefit corporation allows an entity to be
18formed as a corporation but requires directors to consider, in
19addition to shareholder interests, the social, environmental,
20and other effects of corporate activity, and allows business
21decisions to be based on such effects, even where those
22decisions may be contrary to the financial interests of
23shareholders (new Code sections 490.1701 through 490.1706).
24In order to become or stop from being a benefit corporation,
25the articles of incorporation must be amended by a two-thirds
26vote of all outstanding shares of the corporation entitled to
27vote on the question (new Code section 490.1703). A benefit
28corporation is required to prepare an annual benefit report
29that addresses the efforts of the corporation during the
30preceding year, which may be based on a third-party standard
31(new Code section 490.1705).
   32TRANSITIONAL PROVISIONS. The bill includes a number of
33transitional provisions. This includes exceptions from its
34provisions, including county and district fairs (Code chapter
35174), entities organized on a cooperative basis (Code chapters
-260-1497, 498, 499, 499A, 501, and 501A), financial institutions
2(Code chapters 524 and 533), corporations organized on a mutual
3plan (Code chapter 491), and professional corporations (Code
4chapter 496C). The Code section does not prohibit an entity
5from electing to adopt the provisions of Code chapter 490 (Code
6section 490.1701).
   7SPECIAL STAGGERED TERMS FOR DIRECTORS. The bill amends a
8provision that allowed a special staggered term requirement for
9directors of a public corporation (2011 Iowa Acts, chapter 2).
10On January 1, 2022, the provisions that allowed for the special
11requirement are repealed, effectively restoring the provisions
12in Code chapter 490 as they existed prior to the 2011 Act.
13Under the bill, those Code sections will be replaced by the
14bill’s provisions on July 1, 2021. The bill provides that the
15repeals do not affect the articles of incorporation that a
16public corporation adopted prior to the bill’s effective date.
   17COORDINATING AMENDMENTS. The bill includes a number of
18coordinating amendments in various Code chapters.
   19EFFECTIVE DATE. The bill takes effect on July 1, 2021.
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