House Study Bill 39 - IntroducedA Bill ForAn Act 1providing for corporations, providing for certain fees,
2and including effective date provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2FOR PROFIT CORPORATIONS
3PART A
4GENERAL PROVISIONS
5   Section 1.  Section 490.101, Code 2021, is amended by
6striking the section and inserting in lieu thereof the
7following:
   8490.101  Short title.
   9This chapter shall be known and may be cited as the “Iowa
10Business Corporation Act”
.
11   Sec. 2.  Section 490.120, Code 2021, is amended by striking
12the section and inserting in lieu thereof the following:
   13490.120  Requirements for documents — extrinsic facts.
   141.  A document must satisfy the requirements of this
15section, and of any other section that adds to or varies these
16requirements, to be entitled to filing by the secretary of
17state.
   182.  This chapter must require or permit filing the document
19in the office of the secretary of state.
   203.  The document must contain the information required by
21this chapter and may contain other information.
   224.  The document must be typewritten or printed or, if
23electronically transmitted, it must be in a format that can be
24retrieved or reproduced in typewritten or printed form.
   255.  The document must be in the English language. A
26corporate name need not be in English if written in English
27letters or Arabic or Roman numerals, and the certificate of
28existence required of foreign corporations need not be in
29English if accompanied by a reasonably authenticated English
30translation.
   316.  Except as provided in section 490.1622, subsection 3, the
32document must be signed by any of the following:
   33a.  The chair of the board of directors of a domestic or
34foreign corporation, its president, or another of its officers.
   35b.  If directors have not been selected or the corporation
-1-1has not been formed, by an incorporator.
   2c.  If the corporation is in the hands of a receiver,
3trustee, or other court-appointed fiduciary, by that fiduciary.
   47.  a.  The person executing the document shall sign it
5and state beneath or opposite the person’s signature the
6person’s name and the capacity in which the document is signed.
7The document may but need not contain a corporate seal,
8attestation, acknowledgment, or verification.
   9b.  The secretary of state may accept for filing a document
10containing a copy of a signature, however made.
   118.  If the secretary of state has prescribed a mandatory
12form for the document under section 490.121, subsection 1, the
13document must be in or on the prescribed form.
   149.  The document must be delivered to the office of the
15secretary of state for filing. Delivery may be made by
16electronic transmission if and to the extent permitted by the
17secretary of state. If it is filed in typewritten or printed
18form and not transmitted electronically, the secretary of state
19may require one exact or conformed copy to be delivered with
20the document.
   2110.  When the document is delivered to the office of the
22secretary of state for filing, the correct filing fee, and any
23franchise tax, license fee, or penalty required by this chapter
24or other law to be paid at the time of delivery for filing must
25be paid or provision for payment made in a manner permitted by
26the secretary of state.
   2711.  Whenever a provision of this chapter permits any of the
28terms of a plan or a filed document to be dependent on facts
29objectively ascertainable outside the plan or filed document,
30all of the following provisions apply:
   31a.  The manner in which the facts will operate upon the terms
32of the plan or filed document must be set forth in the plan or
33filed document.
   34b.  The facts may include any of the following:
   35(1)  Any of the following that is available in a nationally
-2-1recognized news or information medium either in print or
2electronically: statistical or market indices, market prices
3of any security or group of securities, interest rates,
4currency exchange rates, or similar economic or financial data.
   5(2)  A determination or action by any person or body,
6including the corporation or any other party to a plan or filed
7document.
   8(3)  The terms of, or actions taken under, an agreement to
9which the corporation is a party, or any other agreement or
10document.
   11c.  As used in this subsection:
   12(1)  “Filed document” means a document filed by the secretary
13of state under any provision of this chapter except subchapter
14XV or section 490.1622.
   15(2)  “Plan” means a plan of domestication, conversion,
16merger, or share exchange.
   17d.  The following provisions of a plan or filed document
18shall not be made dependent on facts outside the plan or filed
19document:
   20(1)  The name and address of any person required in a filed
21document.
   22(2)  The registered office of any entity required in a filed
23document.
   24(3)  The registered agent of any entity required in a filed
25document.
   26(4)  The number of authorized shares and designation of each
27class or series of shares.
   28(5)  The effective date of a filed document.
   29(6)  Any required statement in a filed document of the date
30on which the underlying transaction was approved or the manner
31in which that approval was given.
   32e.  If a provision of a filed document is made dependent on a
33fact ascertainable outside of the filed document, and that fact
34is neither ascertainable by reference to a source described
35in paragraph “b”, subparagraph (1), nor a document that is a
-3-1matter of public record, and the affected shareholders have
2not received notice of the fact from the corporation, then the
3corporation shall file with the secretary of state articles of
4amendment to the filed document setting forth the fact promptly
5after the time when the fact referred to is first ascertainable
6or thereafter changes. Articles of amendment under this
7paragraph “e” are deemed to be authorized by the authorization
8of the original filed document to which they relate and may be
9filed by the corporation without further action by the board of
10directors or the shareholders.
11   Sec. 3.  Section 490.121, Code 2021, is amended by striking
12the section and inserting in lieu thereof the following:
   13490.121  Forms.
   141.  a.  The secretary of state may prescribe and furnish on
15request any of the following forms:
   16(1)  An application for a certificate of existence or
17certificate of registration.
   18(2)  A foreign corporation’s registration statement.
   19(3)  A foreign corporation’s statement of withdrawal.
   20(4)  A foreign corporation’s transfer of registration
21statement.
   22(5)  The biennial report required by section 490.1622.
   23b.  If the secretary of state so requires, use of the forms
24provided in paragraph “a” is mandatory.
   252.  The secretary of state may prescribe and furnish on
26request forms for other documents required or permitted to be
27filed pursuant to this chapter but their use is not mandatory.
28   Sec. 4.  Section 490.122, Code 2021, is amended by striking
29the section and inserting in lieu thereof the following:
   30490.122  Filing, service, and copying fees.
   311.  The secretary of state shall collect the following fees
32when the documents described in this subsection are delivered
33to the secretary of state for filing:
    34DOCUMENT FEE
   35a. Articles of incorporation  $ 50
-4-1b. Application for use of indistinguishable
2 name  $ 10
3c. Application for reserved name  $ 10
4d. Notice of transfer of reserved name  $ 10
5e. Application for registered name  $ 20
6f. Application for renewal of registered
7 name  $ 20
8g. Corporation’s statement of change of
9 registered agent or registered office or both  No fee
  10h. Agent’s statement of change of registered office
11 for each affected corporation not to exceed
12a total of  No fee
13i. Agent’s statement of resignation  No fee
14j. Articles of domestication  $ 50
15k. Articles of conversion  $ 50
16l. Amendment of articles of incorporation  $ 50
17m. Restatement of articles of incorporation
18 with amendment of articles  $ 50
19n. Restatement of articles of incorporation
20 without amendment of articles  $ 50
21o. Articles of merger or share exchange  $ 50
22p. Articles of dissolution  $ 5
23q. Articles of revocation of dissolution  $ 5
24r. Certificate of administrative dissolution  No fee
25s. Application for reinstatement following
26 administrative dissolution  $ 5
27t. Certificate of reinstatement  No fee
28u. Certificate of judicial dissolution  No fee
29v. Foreign registration statement  $ 100
30w. Amendment of foreign registration
31 statement  $ 100
32x. Statement of withdrawal  $ 10
33y. Transfer of foreign registration statement  $ 100
34z. Notice of termination of registration  No fee
35aa. Articles of correction  $ 5
-5-1ab. Articles of validation  $ 5
2ac. Application for certificate of existence or
3registration $ 5
4ad. Biennial report $ 60
5ae. Any other document required or permitted to
6be filed by this chapter  $5
   72.  The secretary of state shall collect a fee of five
8dollars each time process is served on the secretary of state
9under this chapter. The party to a proceeding causing service
10of process is entitled to recover this fee as costs if such
11party prevails in the proceeding.
   123.  The secretary of state shall collect the following fees
13for copying and certifying the copy of any filed document
14relating to a domestic or foreign corporation:
   15a.  One dollar a page for copying.
   16b.  Five dollars for the certificate.
17   Sec. 5.  Section 490.123, Code 2021, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.123  Effective date of filed document.
   201.  Except to the extent otherwise provided in section
21490.124, subsection 3, and part E, a document accepted for
22filing is effective as follows:
   23a.  On the date and at the time of filing, as provided in
24section 490.125, subsection 2.
   25b.  On the date of filing and at the time specified in the
26document as its effective time, if later than the time under
27paragraph “a”.
   28c.  At a specified delayed effective date and time which
29shall not be more than ninety days after filing.
   30d.  If a delayed effective date is specified, but no time is
31specified, at 12:01 a.m.on the date specified, which shall not
32be more than ninety days after the date of filing.
   332.  If a filed document does not specify the time zone or
34place at which a date or time or both is to be determined, the
35date or time or both at which it becomes effective shall be
-6-1those prevailing at the place of filing in this state.
2   Sec. 6.  Section 490.124, Code 2021, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.124  Correcting filed document.
   51.  A document filed by the secretary of state pursuant to
6this chapter may be corrected if any of the following applies:
   7a.  The document contains an inaccuracy.
   8b.  The document was defectively signed, attested, sealed,
9verified, or acknowledged.
   10c.  The electronic transmission was defective.
   112.  A document is corrected by complying with all of the
12following:
   13a.  By preparing articles of correction that do all of the
14following:
   15(1)  Describe the document, including its filing date, or a
16copy of the document is attached to the articles of correction.
   17(2)  Specify the inaccuracy or defect to be corrected.
   18(3)  Correct the inaccuracy or defect.
   19b.  By delivering the articles of correction to the secretary
20of state for filing.
   213.  Articles of correction are effective on the effective
22date of the document they correct except as to persons relying
23on the uncorrected document and adversely affected by the
24correction. As to those persons, articles of correction are
25effective when filed.
26   Sec. 7.  Section 490.125, Code 2021, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.125  Filing duty of secretary of state.
   291.  If a document delivered to the office of the secretary of
30state for filing satisfies the requirements of section 490.120,
31the secretary of state shall file it.
   322.  The secretary of state files a document by recording
33it as filed on the date and time of receipt. After filing
34a document, except the biennial report required by section
35490.1622, and except as provided in section 490.503, the
-7-1secretary of state shall return to the person who delivered
2the document for filing a copy of the document with an
3acknowledgment of the date and time of filing.
   43.  If the secretary of state refuses to file a document,
5it shall be returned to the person who delivered the document
6for filing within five days after the document was delivered,
7together with a brief, written explanation of the reason for
8the refusal.
   94.  The secretary of state’s duty to file documents under
10this section is ministerial. The secretary of state’s filing
11or refusing to file a document does not create a presumption
12of any of the following:
   13a.  The document does or does not conform to the requirements
14of this chapter.
   15b.  The information contained in the document is correct or
16incorrect.
17   Sec. 8.  Section 490.126, Code 2021, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.126  Appeal from secretary of state’s refusal to file
20document.
   211.  If the secretary of state refuses to file a document
22delivered for filing, the person that delivered the document
23for filing may petition the district court of the county where
24the corporation’s principal office or, if none in this state,
25its registered office, is located to compel its filing. The
26document and the explanation of the secretary of state’s
27refusal to file must be attached to the petition. The court
28may decide the matter in a summary proceeding.
   292.  The court may order the secretary of state to file the
30document or take other action the court considers appropriate.
   313.  The court’s final decision may be appealed as in other
32civil proceedings.
33   Sec. 9.  Section 490.127, Code 2021, is amended by striking
34the section and inserting in lieu thereof the following:
   35490.127  Evidentiary effect of certified copy of filed
-8-1document.
   2A certificate from the secretary of state delivered with
3a copy of a document filed by the secretary of state is
4conclusive evidence that the original document is on file with
5the secretary of state.
6   Sec. 10.  Section 490.128, Code 2021, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.128  Certificate of existence or registration.
   91.  Any person may apply to the secretary of state to furnish
10a certificate of existence for a domestic corporation or a
11certificate of registration for a foreign corporation.
   122.  A certificate of existence must set forth all of the
13following:
   14a.  The domestic corporation’s corporate name.
   15b.  That the domestic corporation is duly incorporated under
16the law of this state, the date of its incorporation, and the
17period of its duration if less than perpetual.
   18c.  That all fees, taxes, and penalties owed to this state
19have been paid, subject to all of the following:
   20(1)  Payment is reflected in the records of the secretary of
21state.
   22(2)  Nonpayment affects the existence of the domestic
23corporation.
   24d.  That its most recent biennial report required by section
25490.1622 has been filed by the secretary of state.
   26e.  That articles of dissolution have not been filed.
   27f.  That the corporation is not administratively dissolved
28and a proceeding is not pending under section 490.1421.
   29g.  Other facts of record in the office of the secretary of
30state that may be requested by the applicant.
   313.  A certificate of registration must set forth all of the
32following:
   33a.  The foreign corporation’s name used in this state.
   34b.  That the foreign corporation is registered to do business
35in this state.
-9-
   1c.  That all fees, taxes, and penalties owed to this state
2have been paid, subject to all of the following:
   3(1)  Payment is reflected in the records of the secretary of
4state.
   5(2)  Nonpayment affects the registration of the foreign
6corporation.
   7d.  That its most recent biennial report required by section
8490.1622 has been filed by the secretary of state.
   9e.  Other facts of record in the office of the secretary of
10state that may be requested by the applicant.
   114.  Subject to any qualification stated in the certificate,
12a certificate of existence or registration issued by the
13secretary of state may be relied upon as conclusive evidence of
14the facts stated in the certificate.
15   Sec. 11.  Section 490.129, Code 2021, is amended by striking
16the section and inserting in lieu thereof the following:
   17490.129  Penalty for signing false document.
   181.  A person commits an offense by signing a document that
19the person knows is false in any material respect with intent
20that the document be delivered to the secretary of state for
21filing.
   222.  An offense under this section is a serious misdemeanor
23punishable by a fine of not to exceed one thousand dollars.
24   Sec. 12.  Section 490.135, Code 2021, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.135  Powers.
   27The secretary of state has the power reasonably necessary to
28perform the duties required of the secretary of state by this
29chapter.
30   Sec. 13.  Section 490.140, Code 2021, is amended by striking
31the section and inserting in lieu thereof the following:
   32490.140  Chapter definitions.
   33As used in this chapter, unless otherwise specified:
   341.  “Articles of incorporation” means the articles of
35incorporation described in section 490.202, all amendments
-10-1to the articles of incorporation, and any other documents
2permitted or required to be delivered for filing by a domestic
3business corporation with the secretary of state under any
4provision of this chapter that modify, amend, supplement,
5restate, or replace the articles of incorporation. After
6an amendment of the articles of incorporation or any other
7document filed under this chapter that restates the articles of
8incorporation in their entirety, the articles of incorporation
9shall not include any prior documents. When used with respect
10to a foreign corporation or a domestic or foreign nonprofit
11corporation, the “articles of incorporation” of such an entity
12means the document of such entity that is equivalent to the
13articles of incorporation of a domestic business corporation.
   142.  “Authorized shares” means the shares of all classes a
15domestic or foreign corporation is authorized to issue.
   163.  “Beneficial shareholder” means a person who owns
17the beneficial interest in shares, which may be a record
18shareholder or a person on whose behalf shares are registered
19in the name of an intermediary or nominee.
   204.  “Conspicuous” means so written, displayed, or presented
21that a reasonable person against whom the writing is to operate
22should have noticed it.
   235.  “Cooperative association” means an entity that is
24structured and operated on a cooperative basis pursuant to 26
25U.S.C. §1381(a) and that meets the definitional requirements of
26an association as provided in 12 U.S.C. §1141j(a) or 7 U.S.C.
27§291.
   286.  “Corporation”, “domestic corporation”, “business
29corporation”
, or “domestic business corporation” means a
30corporation for profit, which is not a foreign corporation,
31incorporated under this chapter.
   327.  “Deliver” or “delivery” means any method of delivery
33used in conventional commercial practice, including delivery
34by hand, mail, commercial delivery, and, if authorized in
35accordance with section 490.141, by electronic transmission.
-11-
   18.  “Distribution” means a direct or indirect transfer of
2cash or other property, except a corporation’s own shares,
3or incurrence of indebtedness by a corporation to or for the
4benefit of its shareholders in respect of any of its shares.
5A distribution may be in the form of a payment of a dividend;
6a purchase, redemption, or other acquisition of shares; a
7distribution of indebtedness; a distribution in liquidation;
8or otherwise.
   99.  “Document” means any of the following:
   10a.  A tangible medium on which information is inscribed, and
11includes handwritten, typed, printed or similar instruments,
12and copies of such instruments.
   13b.  An electronic record.
   1410.  “Domestic”, with respect to an entity, means an entity
15governed as to its internal affairs by the law of this state.
   1611.  “Effective date”, when referring to a document accepted
17for filing by the secretary of state, means the time and date
18determined in accordance with section 490.123.
   1912.  “Electronic” means relating to technology having
20electrical, digital, magnetic, wireless, optical,
21electromagnetic, or similar capabilities.
   2213.  “Electronic record” means information that is stored in
23an electronic or other nontangible medium and is retrievable in
24paper form through an automated process used in conventional
25commercial practice, unless otherwise authorized in accordance
26with section 490.141, subsection 10.
   2714.  “Electronic transmission” or “electronically transmitted”
28means any form or process of communication not directly
29involving the physical transfer of paper or another tangible
30medium, which is all of the following:
   31a.  Suitable for the retention, retrieval, and reproduction
32of information by the recipient.
   33b.  Retrievable in paper form by the recipient through an
34automated process used in conventional commercial practice,
35unless otherwise authorized in accordance with section 490.141,
-12-1subsection 10.
   215.  “Eligible entity” means a domestic or foreign
3unincorporated entity or a domestic or foreign nonprofit
4corporation.
   516.  “Eligible interests” means interests or memberships.
   617.  “Employee” includes an officer but not a director.
7A director may accept duties that make the director also an
8employee.
   918.  “Entity” includes a domestic and foreign business
10corporation; domestic and foreign nonprofit corporation;
11estate; trust; domestic and foreign unincorporated entity; and
12a state, the United States, and a foreign government.
   1319.  “Expenses” means reasonable expenses of any kind,
14including reasonable fees and expenses of counsel and experts,
15that are incurred in connection with a matter.
   1620.  “Filing entity” means an unincorporated entity, other
17than a limited liability partnership, that is of a type that
18is created by filing a public organic record or is required to
19file a public organic record that evidences its creation.
   2021.  “Foreign”, with respect to an entity, means an entity
21governed as to its internal affairs by the organic law of a
22jurisdiction other than this state.
   2322.  “Foreign corporation” or “foreign business corporation”
24means a corporation incorporated under a law other than the
25law of this state which would be a business corporation if
26incorporated under the law of this state.
   2723.  “Foreign nonprofit corporation” means a corporation
28incorporated under a law other than the law of this state which
29would be a nonprofit corporation if incorporated under the law
30of this state.
   3124.  “Foreign registration statement” means the foreign
32registration statement described in section 490.1503.
   3325.  “Governmental subdivision” includes an authority, city,
34county, district, and municipality.
   3526.  “Governor” means any person under whose authority the
-13-1powers of an entity are exercised and under whose direction the
2activities and affairs of the entity are managed pursuant to
3the organic law governing the entity and its organic rules.
   427.  “Includes” and “including” denote a partial definition
5or a nonexclusive list.
   628.  “Individual” means a natural person.
   729.  “Interest” means either or both of the following rights
8under the organic law governing an unincorporated entity:
   9a.  The right to receive distributions from the entity either
10in the ordinary course or upon liquidation.
   11b.  The right to receive notice or vote on issues involving
12its internal affairs, other than as an agent, assignee, proxy,
13or person responsible for managing its business and affairs.
   1430.  “Interest holder” means a person who holds of record an
15interest.
   1631.  a.  “Interest holder liability” means any of the
17following:
   18(1)  Personal liability for a debt, obligation, or other
19liability of a domestic or foreign corporation or eligible
20entity that is imposed on a person by any of the following:
   21(a)  Solely by reason of the person’s status as a
22shareholder, member, or interest holder.
   23(b)  By the articles of incorporation of the domestic
24corporation or the organic rules of the eligible entity
25or foreign corporation that make one or more specified
26shareholders, members, or interest holders, or categories of
27shareholders, members, or interest holders, liable in their
28capacity as shareholders, members, or interest holders for all
29or specified liabilities of the corporation or eligible entity.
   30(2)  An obligation of a shareholder, member, or interest
31holder under the articles of incorporation of a domestic
32corporation or the organic rules of an eligible entity or
33foreign corporation to contribute to the entity.
   34b.  For purposes of paragraph “a”, except as otherwise
35provided in the articles of incorporation of a domestic
-14-1corporation or the organic law or organic rules of an eligible
2entity or a foreign corporation, interest holder liability
3arises under paragraph “a”, subparagraph (1), when the
4corporation or eligible entity incurs the liability.
   532.  “Jurisdiction of formation” means the state or country
6the law of which includes the organic law governing a domestic
7or foreign corporation or eligible entity.
   833.  “Means” denotes an exhaustive definition.
   934.  “Membership” means the rights of a member in a domestic
10or foreign nonprofit corporation.
   1135.  “Merger” means a transaction pursuant to section
12490.1102.
   1336.  “Nonfiling entity” means an unincorporated entity that
14is of a type that is not created by filing a public organic
15record.
   1637.  “Nonprofit corporation” or “domestic nonprofit
17corporation”
means a corporation incorporated under the laws of
18this state and subject to the provisions of chapter 504.
   1938.  “Organic law” means the statute governing the internal
20affairs of a domestic or foreign business or nonprofit
21corporation or unincorporated entity.
   2239.  “Organic rules” means the public organic record and
23private organic rules of a domestic or foreign corporation or
24eligible entity.
   2540.  “Person” means a person as defined in section 4.1.
   2641.  “Principal office” means the office, in or out of this
27state, so designated in the biennial report required by section
28490.1622 or foreign registration statement where the principal
29executive offices of a domestic or foreign corporation are
30located.
   3142.  a.  “Private organic rules” means any of the following:
   32(1)  The bylaws of a domestic or foreign business or
33nonprofit corporation.
   34(2)  The rules, regardless of whether in writing, that govern
35the internal affairs of an unincorporated entity, are binding
-15-1on all of its interest holders, and are not part of its public
2organic record, if any.
   3b.  Where private organic rules have been amended or
4restated, the term means the private organic rules as last
5amended or restated.
   643.  “Proceeding” includes a civil suit and criminal,
7administrative, and investigatory action.
   844.  a.  “Public organic record” means any of the following:
   9(1)  The articles of incorporation of a domestic or foreign
10business or nonprofit corporation.
   11(2)  The document, if any, the filing of which is required
12to create an unincorporated entity, or which creates the
13unincorporated entity and is required to be filed.
   14b.  Where a public organic record has been amended or
15restated, the term means the public organic record as last
16amended or restated.
   1745.  “Record date” means the date fixed for determining
18the identity of the corporation’s shareholders and their
19shareholdings for purposes of this chapter. Unless another
20time is specified when the record date is fixed, the
21determination shall be made as of the close of business at the
22principal office of the corporation on the date so fixed.
   2346.  “Record shareholder” means any of the following:
   24a.  The person in whose name shares are registered in the
25records of the corporation.
   26b.  The person identified as the beneficial owner of shares
27in a beneficial ownership certificate pursuant to section
28490.723 on file with the corporation to the extent of the
29rights granted by such certificate.
   3047.  “Registered foreign corporation” means a foreign
31corporation registered to do business in the state pursuant to
32subchapter XV.
   3348.  “Secretary” means the corporate officer to whom the
34board of directors has delegated responsibility under section
35490.840, subsection 3, to maintain the minutes of the meetings
-16-1of the board of directors and of the shareholders and for
2authenticating records of the corporation.
   349.  “Share exchange” means a transaction pursuant to section
4490.1103.
   550.  “Shareholder” means a record shareholder.
   651.  “Shares” means the units into which the proprietary
7interests in a domestic or foreign corporation are divided.
   852.  “Sign” or “signature” means, with present intent to
9authenticate or adopt a document, doing any of the following:
   10a.  Executing or adopting a tangible symbol to a document,
11including any manual, facsimile, or conformed signature.
   12b.  Attaching to or logically associating with an electronic
13transmission an electronic sound, symbol, or process,
14and including an electronic signature in an electronic
15transmission.
   1653.  “State”, when referring to a part of the United
17States, includes a state and commonwealth, and their agencies
18and governmental subdivisions, and a territory and insular
19possession, and their agencies and governmental subdivisions,
20of the United States.
   2154.  “Subscriber” means a person who subscribes for shares in
22a corporation, whether before or after incorporation.
   2355.  “Type of entity” means a generic form of entity that is
24any of the following:
   25a.  Recognized at common law.
   26b.  Formed under an organic law, regardless of whether
27some entities formed under that law are subject to provisions
28of that law that create different categories of the form of
29entity.
   3056.  a.  “Unincorporated entity” means an organization
31or artificial legal person that either has a separate legal
32existence or has the power to acquire an estate in real
33property in its own name and that is not any of the following:
   34(1)  A domestic or foreign business or nonprofit
35corporation.
-17-
   1(2)  A series of a limited liability company or of another
2type of entity.
   3(3)  An estate.
   4(4)  A trust.
   5(5)  A state, the United States, or foreign government.
   6b.  “Unincorporated entity” includes a general partnership,
7limited liability company, limited partnership, business
8trust, joint stock association, and unincorporated nonprofit
9association.
   1057.  “United States” includes district, authority, bureau,
11commission, department, and any other agency of the United
12States.
   1358.  “Unrestricted voting trust beneficial owner” means, with
14respect to any shareholder rights, a voting trust beneficial
15owner whose entitlement to exercise the shareholder right in
16question is not inconsistent with the voting trust agreement.
   1759.  “Voting group” means all shares of one or more
18classes or series that under the articles of incorporation
19or this chapter are entitled to vote and be counted together
20collectively on a matter at a meeting of shareholders. All
21shares entitled by the articles of incorporation or this
22chapter to vote generally on the matter are for that purpose
23a single voting group.
   2460.  “Voting power” means the current power to vote in the
25election of directors.
   2661.  “Voting trust beneficial owner” means an owner of
27a beneficial interest in shares of the corporation held
28in a voting trust established pursuant to section 490.730,
29subsection 1.
   3062.  “Writing” or “written” means any information in the form
31of a document.
32   Sec. 14.  Section 490.141, Code 2021, is amended by striking
33the section and inserting in lieu thereof the following:
   34490.141  Notices and other communications.
   351.  A notice under this chapter must be in writing unless
-18-1oral notice is reasonable in the circumstances. Unless
2otherwise agreed between the sender and the recipient, words
3in a notice or other communication under this chapter must be
4in English.
   52.  A notice or other communication may be given by any
6method of delivery, except that electronic transmissions must
7be in accordance with this section. If the methods of delivery
8are impracticable, a notice or other communication may be
9given by means of a broad nonexclusionary distribution to the
10public, which may include a newspaper of general circulation
11in the area where published; radio, television, or other
12form of public broadcast communication; or other methods of
13distribution that the corporation has previously identified to
14its shareholders.
   153.  A notice or other communication to a domestic corporation
16or to a foreign corporation registered to do business in this
17state may be delivered to the corporation’s registered agent at
18its registered office or to the secretary at the corporation’s
19principal office shown in its most recent biennial report
20required by section 490.1622 or, in the case of a foreign
21corporation that has not yet delivered a biennial report, in
22its foreign registration statement.
   234.  A notice or other communication may be delivered by
24electronic transmission if consented to by the recipient or if
25authorized by subsection 10.
   265.  Any consent under subsection 4 may be revoked by the
27person who consented by written or electronic notice to the
28person to whom the consent was delivered. Any such consent is
29deemed revoked if all of the following apply:
   30a.  The corporation is unable to deliver two consecutive
31electronic transmissions given by the corporation in accordance
32with such consent.
   33b.  Such inability becomes known to the secretary or an
34assistant secretary or to the transfer agent, or other person
35responsible for the giving of notice or other communications;
-19-1provided, however, the inadvertent failure to treat such
2inability as a revocation shall not invalidate any meeting or
3other action.
   46.  Unless otherwise agreed between the sender and the
5recipient, an electronic transmission is received when all of
6the following apply:
   7a.  The electronic transmission enters an information
8processing system that the recipient has designated or uses
9for the purposes of receiving electronic transmissions or
10information of the type sent, and from which the recipient is
11able to retrieve the electronic transmission.
   12b.  The electronic transmission is in a form capable of being
13processed by that system.
   147.  Receipt of an electronic acknowledgment from an
15information processing system described in subsection 6,
16paragraph “a”, establishes that an electronic transmission was
17received but, by itself, does not establish that the content
18sent corresponds to the content received.
   198.  An electronic transmission is received under this
20section even if no person is aware of its receipt.
   219.  A notice or other communication, if in a comprehensible
22form or manner, is effective at the earliest of the following:
   23a.  If in a physical form, the earliest of when it is
24actually received, or when it is left at any of the following:
   25(1)  A shareholder’s address shown on the corporation’s
26record of shareholders maintained by the corporation under
27section 490.1601, subsection 4.
   28(2)  A director’s residence or usual place of business.
   29(3)  The corporation’s principal office.
   30b.  If mailed by postage prepaid and correctly addressed to a
31shareholder, upon deposit in the United States mail.
   32c.  If mailed by United States mail postage prepaid and
33correctly addressed to a recipient other than a shareholder,
34the earliest of when it is actually received, or as follows:
   35(1)  If sent by registered or certified mail, return receipt
-20-1requested, the date shown on the return receipt signed by or on
2behalf of the addressee.
   3(2)  Five days after it is deposited in the United States
4mail.
   5d.  If an electronic transmission, when it is received as
6provided in subsection 6.
   7e.  If oral, when communicated.
   810.  A notice or other communication may be in the form of
9an electronic transmission that cannot be directly reproduced
10in paper form by the recipient through an automated process
11used in conventional commercial practice only if all of the
12following apply:
   13a.  The electronic transmission is otherwise retrievable in
14perceivable form.
   15b.  The sender and the recipient have consented in writing to
16the use of such form of electronic transmission.
   1711.  If this chapter prescribes requirements for notices
18or other communications in particular circumstances, those
19requirements govern. If articles of incorporation or bylaws
20prescribe requirements for notices or other communications,
21not inconsistent with this section or other provisions of
22this chapter, those requirements govern. The articles of
23incorporation or bylaws may authorize or require delivery of
24notices of meetings of directors by electronic transmission.
   2512.  In the event that any provisions of this chapter are
26deemed to modify, limit, or supersede the federal Electronic
27Signatures in Global and National Commerce Act, 15 U.S.C.
28§§7001 et seq., the provisions of this chapter shall control
29to the maximum extent permitted by section 102(a)(2) of that
30federal Act.
   3113.  a.  Whenever notice would otherwise be required to be
32given under any provision of this subchapter to a shareholder,
33such notice need not be given if any of the following apply:
   34(1)  Notices to the shareholders of two consecutive annual
35meetings, and all notices of meetings during the period between
-21-1such two consecutive annual meetings, have been sent to such
2shareholder at such shareholder’s address as shown on the
3records of the corporation and have been returned undeliverable
4or could not be delivered.
   5(2)  All, but not less than two, payments of dividends on
6securities during a twelve-month period, or two consecutive
7payments of dividends on securities during a period of more
8than twelve months, have been sent to such shareholder at
9such shareholder’s address as shown on the records of the
10corporation and have been returned undeliverable or could not
11be delivered.
   12b.  If any such shareholder shall deliver to the corporation
13a written notice setting forth such shareholder’s then-current
14address, the requirement that notice be given to such
15shareholder shall be reinstated.
16   Sec. 15.  Section 490.142, Code 2021, is amended by striking
17the section and inserting in lieu thereof the following:
   18490.142  Number of shareholders.
   191.  For purposes of this chapter, any of the following
20identified as a shareholder in a corporation’s current record
21of shareholders constitutes one shareholder:
   22a.  Three or fewer co-owners.
   23b.  A corporation, partnership, trust, estate, or other
24entity.
   25c.  The trustees, guardians, custodians, or other fiduciaries
26of a single trust, estate, or account.
   272.  For purposes of this chapter, shareholdings registered
28in substantially similar names constitute one shareholder if
29it is reasonable to believe that the names represent the same
30person.
31   Sec. 16.  Section 490.143, Code 2021, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.143  Qualified director.
   341.  As used in this chapter, a “qualified director” means a
35director who takes action, if at the time action is to be taken
-22-1any of the following applies:
   2a.  Under section 490.202, subsection 2, paragraph “f”, is
3not a director under any of the following circumstances:
   4(1)  To whom the limitation or elimination of the duty of
5an officer to offer potential business opportunities to the
6corporation would apply.
   7(2)  Has a material relationship with any other person to
8whom the limitation or elimination described in subparagraph
9(1) would apply.
   10b.  Under section 490.744, does not have any of the
11following:
   12(1)  A material interest in the outcome of the proceeding.
   13(2)  A material relationship with a person who has such an
14interest.
   15c.  Under section 490.853 or 490.855, all of the following
16apply:
   17(1)  The director is not a party to the proceeding.
   18(2)  The director is not a director as to whom a transaction
19is a director’s conflicting interest transaction or who sought
20a disclaimer of the corporation’s interest in a business
21opportunity under section 490.870, which transaction or
22disclaimer is challenged in the proceeding.
   23(3)  The director does not have a material relationship with
24a director described in either subparagraph (1) or (2).
   25d.  Under section 490.862, the director is not any of the
26following:
   27(1)  A director as to whom the transaction is a director’s
28conflicting interest transaction.
   29(2)  A director who has a material relationship with another
30director as to whom the transaction is a director’s conflicting
31interest transaction.
   32e.  Under section 490.870, is not a director who does any of
33the following:
   34(1)  Pursues or takes advantage of the business opportunity,
35directly or indirectly through or on behalf of another person.
-23-
   1(2)  Has a material relationship with a director or officer
2who pursues or takes advantage of the business opportunity,
3directly, or indirectly through or on behalf of another person.
   42.  As used in this section, all of the following apply:
   5a.  “Material interest” means an actual or potential
6benefit or detriment, other than one which would devolve on
7the corporation or the shareholders generally, that would
8reasonably be expected to impair the objectivity of the
9director’s judgment when participating in the action to be
10taken.
   11b.  “Material relationship” means a familial, financial,
12professional, employment, or other relationship that would
13reasonably be expected to impair the objectivity of the
14director’s judgment when participating in the action to be
15taken.
   163.  The presence of one or more of the following
17circumstances shall not automatically prevent a director from
18being a qualified director:
   19a.  Nomination or election of the director to the current
20board by any director who is not a qualified director with
21respect to the matter, or by any person that has a material
22relationship with that director, acting alone or participating
23with others.
   24b.  Service as a director of another corporation of which a
25director who is not a qualified director with respect to the
26matter, or any individual who has a material relationship with
27that director, is or was also a director.
   28c.  With respect to action to be taken under section 490.744,
29status as a named defendant, as a director against whom action
30is demanded, or as a director who approved the conduct being
31challenged.
32   Sec. 17.  Section 490.144, Code 2021, is amended by striking
33the section and inserting in lieu thereof the following:
   34490.144  Householding.
   351.  A corporation has delivered written notice or any
-24-1other report or statement under this chapter, the articles of
2incorporation, or the bylaws to all shareholders who share a
3common address if all of the following apply:
   4a.  The corporation delivers one copy of the notice, report,
5or statement to the common address.
   6b.  The corporation addresses the notice, report, or
7statement to those shareholders either as a group or to each
8of those shareholders individually or to the shareholders in a
9form to which each of those shareholders has consented.
   10c.  Each of those shareholders consents to delivery of
11a single copy of such notice, report, or statement to the
12shareholders’ common address.
   132.  Any such consent described in subsection 1, paragraph
14“b” or “c”, shall be revocable by any of such shareholders who
15deliver written notice of revocation to the corporation. If
16such written notice of revocation is delivered, the corporation
17shall begin providing individual notices, reports, or other
18statements to the revoking shareholder no later than thirty
19days after delivery of the written notice of revocation.
   203.  Any shareholder who fails to object by written notice
21to the corporation, within sixty days of written notice by
22the corporation of its intention to deliver single copies of
23notices, reports, or statements to shareholders who share a
24common address as permitted by subsection 1, shall be deemed
25to have consented to receiving such single copy at the common
26address; provided that the notice of intention explains that
27consent may be revoked and the method for revoking.
28   Sec. 18.  NEW SECTION.  490.145  Part definitions.
   29As used in this part:
   301.  “Corporate action” means any action taken by or on
31behalf of the corporation, including any action taken by the
32incorporator, the board of directors, a committee of the board
33of directors, an officer or agent of the corporation, or the
34shareholders.
   352.  “Date of the defective corporate action” means the date
-25-1or, if the defective corporate action occurred or may have
2occurred on more than one date, the range of dates, or the
3approximate date or range of dates, if the exact date or range
4of dates is unknown or not readily ascertainable, the defective
5corporate action was purported to have been taken.
   63.  “Defective corporate action” means all of the following:
   7a.  Any corporate action purportedly taken that is, and at
8the time such corporate action was purportedly taken would
9have been, within the power of the corporation, but is void or
10voidable due to a failure of authorization.
   11b.  An overissue.
   124.  “Failure of authorization” means the failure to
13authorize, approve, or otherwise effect a corporate action in
14compliance with the provisions of this chapter, the articles of
15incorporation or bylaws, a corporate resolution, or any plan
16or agreement to which the corporation is a party, if and to the
17extent such failure would render such corporate action void or
18voidable.
   195.  “Overissue” means the purported issuance of any of the
20following:
   21a.  Shares of a class or series in excess of the number of
22shares of a class or series the corporation has the power to
23issue under section 490.601 at the time of such issuance.
   24b.  Shares of any class or series that is not then authorized
25for issuance by the articles of incorporation.
   266.  “Putative shares” means the shares of any class or
27series, including shares issued upon exercise of rights,
28options, warrants or other securities convertible into
29shares of the corporation, or interests with respect to such
30shares, that were created or issued as a result of a defective
31corporate action, and any of the following applies:
   32a.  But for any failure of authorization would constitute
33valid shares.
   34b.  Cannot be determined by the board of directors to be
35valid shares.
-26-
   17.  “Valid shares” means the shares of any class or series
2that have been duly authorized and validly issued in accordance
3with this chapter, including as a result of ratification or
4validation under this part.
   58.  a.  “Validation effective time” with respect to any
6defective corporate action ratified under this part means the
7later of the following:
   8(1)  The time at which the ratification of the defective
9corporate action is approved by the shareholders, or if
10approval of shareholders is not required, the time at which
11the notice required by section 490.149 becomes effective in
12accordance with section 490.141.
   13(2)  The time at which any articles of validation filed in
14accordance with section 490.151 become effective.
   15b.  The validation effective time shall not be affected by
16the filing or pendency of a judicial proceeding under section
17490.152 or otherwise, unless otherwise ordered by the court.
18   Sec. 19.  NEW SECTION.  490.146  Defective corporate actions.
   191.  A defective corporate action shall not be void or
20voidable if ratified in accordance with section 490.147 or
21validated in accordance with section 490.152.
   222.  Ratification under section 490.147 or validation under
23section 490.152 shall not be deemed to be the exclusive means
24of ratifying or validating any defective corporate action, and
25the absence or failure of ratification in accordance with this
26part shall not, of itself, affect the validity or effectiveness
27of any corporate action properly ratified under common law or
28otherwise, nor shall it create a presumption that any such
29corporate action is or was a defective corporate action or void
30or voidable.
   313.  In the case of an overissue, putative shares shall be
32valid shares effective as of the date originally issued or
33purportedly issued upon any of the following:
   34a.  The effectiveness under this part and under subchapter X
35of an amendment to the articles of incorporation authorizing,
-27-1designating, or creating such shares.
   2b.  The effectiveness of any other corporate action under
3this part ratifying the authorization, designation, or creation
4of such shares.
5   Sec. 20.  NEW SECTION.  490.147  Ratification of defective
6corporate actions.
   71.  To ratify a defective corporate action under this
8section, other than the ratification of an election of the
9initial board of directors under subsection 2, the board of
10directors shall take action ratifying the action in accordance
11with section 490.148, stating all of the following:
   12a.  The defective corporate action to be ratified and, if the
13defective corporate action involved the issuance of putative
14shares, the number and type of putative shares purportedly
15issued.
   16b.  The date of the defective corporate action.
   17c.  The nature of the failure of authorization with respect
18to the defective corporate action to be ratified.
   19d.  That the board of directors approves the ratification of
20the defective corporate action.
   212.  In the event that a defective corporate action to be
22ratified relates to the election of the initial board of
23directors of the corporation under section 490.205, subsection
241, paragraph “b”, a majority of the persons who, at the time of
25the ratification, are exercising the powers of directors may
26take an action stating all of the following:
   27a.  The name of the person or persons who first took
28action in the name of the corporation as the initial board of
29directors of the corporation.
   30b.  The earlier of the date on which such persons first
31took such action or were purported to have been elected as the
32initial board of directors.
   33c.  That the ratification of the election of such person or
34persons as the initial board of directors is approved.
   353.  If any provision of this chapter, the articles of
-28-1incorporation or bylaws, any corporate resolution, or any
2plan or agreement to which the corporation is a party in
3effect at the time action under subsection 1 is taken requires
4shareholder approval or would have required shareholder
5approval at the date of the occurrence of the defective
6corporate action, the ratification of the defective corporate
7action approved in the action taken by the directors under
8subsection 1 shall be submitted to the shareholders for
9approval in accordance with section 490.148.
   104.  Unless otherwise provided in the action taken by the
11board of directors under subsection 1, after the action by the
12board of directors has been taken and, if required, approved
13by the shareholders, the board of directors may abandon the
14ratification at any time before the validation effective time
15without further action of the shareholders.
16   Sec. 21.  NEW SECTION.  490.148  Action on ratification.
   171.  The quorum and voting requirements applicable to a
18ratifying action by the board of directors under section
19490.147, subsection 1, shall be the quorum and voting
20requirements applicable to the corporate action proposed to be
21ratified at the time such ratifying action is taken.
   222.  If the ratification of the defective corporate action
23requires approval by the shareholders under section 490.147,
24subsection 3, and if the approval is to be given at a meeting,
25the corporation shall notify each holder of valid and putative
26shares, regardless of whether entitled to vote, as of the
27record date for notice of the meeting and as of the date of
28the occurrence of defective corporate action, provided that
29notice shall not be required to be given to holders of valid or
30putative shares whose identities or addresses for notice cannot
31be determined from the records of the corporation. The notice
32must state that the purpose, or one of the purposes, of the
33meeting is to consider ratification of a defective corporate
34action and must be accompanied by all of the following:
   35a.  Either a copy of the action taken by the board of
-29-1directors in accordance with section 490.147, subsection 1,
2or the information required by section 490.147, subsection 1,
3paragraphs “a” through “d”.
   4b.  A statement that any claim that the ratification of
5such defective corporate action and any putative shares issued
6as a result of such defective corporate action should not be
7effective, or should be effective only on certain conditions,
8shall be brought within one hundred twenty days from the
9applicable validation effective time.
   103.  Except as provided in subsection 4, with respect to the
11voting requirements to ratify the election of a director, the
12quorum and voting requirements applicable to the approval by
13the shareholders required by section 490.147, subsection 3,
14shall be the quorum and voting requirements applicable to the
15corporate action proposed to be ratified at the time of such
16shareholder approval.
   174.  The approval by shareholders to ratify the election of a
18director requires that the votes cast within the voting group
19favoring such ratification exceed the votes cast opposing such
20ratification of the election at a meeting at which a quorum is
21present.
   225.  Putative shares on the record date for determining
23the shareholders entitled to vote on any matter submitted to
24shareholders under section 490.147, subsection 3, and without
25giving effect to any ratification of putative shares that
26becomes effective as a result of such vote, shall neither be
27entitled to vote nor counted for quorum purposes in any vote to
28approve the ratification of any defective corporate action.
   296.  If the approval under this section of putative shares
30would result in an overissue, in addition to the approval
31required by section 490.147, approval of an amendment to the
32articles of incorporation under subchapter X to increase
33the number of shares of an authorized class or series or to
34authorize the creation of a class or series of shares so there
35would be no overissue shall also be required.
-30-
1   Sec. 22.  NEW SECTION.  490.149  Notice requirements.
   21.  Unless shareholder approval is required under section
3490.147, subsection 3, prompt notice of an action taken under
4section 490.147 shall be given to each holder of valid and
5putative shares, regardless of whether entitled to vote, as of
6all of the following:
   7a.  The date of such action by the board of directors.
   8b.  The date of the defective corporate action ratified,
9provided that notice shall not be required to be given to
10holders of valid and putative shares whose identities or
11addresses for notice cannot be determined from the records of
12the corporation.
   132.  The notice must contain all of the following:
   14a.  Either a copy of the action taken by the board of
15directors in accordance with section 490.147, subsection 1 or
162, or the information required by section 490.147, subsection
171, paragraphs “a” through “d”, or section 490.147, subsection 2,
18paragraphs “a” through “c”, as applicable.
   19b.  A statement that any claim that the ratification of
20the defective corporate action and any putative shares issued
21as a result of such defective corporate action should not be
22effective, or should be effective only on certain conditions,
23shall be brought within one hundred twenty days from the
24applicable validation effective time.
   253.  No notice under this section is required with respect
26to any action required to be submitted to shareholders for
27approval under section 490.147, subsection 3, if notice is
28given in accordance with section 490.148, subsection 2.
   294.  A notice required by this section may be given in any
30manner permitted by section 490.141 and, for any corporation
31subject to the reporting requirements of section 13 or 15(d) of
32the federal Securities Exchange Act of 1934, may be given by
33means of a filing or furnishing of such notice with the United
34States securities and exchange commission.
35   Sec. 23.  NEW SECTION.  490.150  Effect of ratification.
-31-
   1From and after the validation effective time, and without
2regard to the one hundred twenty-day period during which
3a claim may be brought under section 490.152, all of the
4following shall apply:
   51.  Each defective corporate action ratified in accordance
6with section 490.147 shall not be void or voidable as a result
7of the failure of authorization identified in the action taken
8under section 490.147, subsection 1 or 2, and shall be deemed
9a valid corporate action effective as of the date of the
10defective corporate action.
   112.  The issuance of each putative share or fraction of a
12putative share purportedly issued pursuant to a defective
13corporate action identified in the action taken under section
14490.147 shall not be void or voidable, and each such putative
15share or fraction of a putative share shall be deemed to be an
16identical share or fraction of a valid share as of the time it
17was purportedly issued.
   183.  Any corporate action taken subsequent to the defective
19corporate action ratified in accordance with this part in
20reliance on such defective corporate action having been
21validly effected and any subsequent defective corporate action
22resulting directly or indirectly from such original defective
23corporate action shall be valid as of the time taken.
24   Sec. 24.  NEW SECTION.  490.151  Filings.
   251.  If the defective corporate action ratified under this
26part would have required under any other section of this
27chapter a filing in accordance with this chapter, then,
28regardless of whether a filing was previously made in respect
29of such defective corporate action and in lieu of a filing
30otherwise required by this chapter, the corporation shall file
31articles of validation in accordance with this section, and
32such articles of validation shall serve to amend or substitute
33for any other filing with respect to such defective corporate
34action required by this chapter.
   352.  The articles of validation must set forth all of the
-32-1following:
   2a.  The defective corporate action that is the subject of the
3articles of validation, including in the case of any defective
4corporate action involving the issuance of putative shares, the
5number and type of putative shares issued and the date or dates
6upon which such putative shares were purported to have been
7issued.
   8b.  The date of the defective corporate action.
   9c.  The nature of the failure of authorization in respect of
10the defective corporate action.
   11d.  A statement that the defective corporate action was
12ratified in accordance with section 490.147, including
13the date on which the board of directors ratified such
14defective corporate action and the date, if any, on which
15the shareholders approved the ratification of such defective
16corporate action.
   17e.  The information required by subsection 3.
   183.  The articles of validation must also contain the
19following information:
   20a.  If a filing was previously made in respect of the
21defective corporate action and no changes to such filing are
22required to give effect to the ratification of such defective
23corporate action in accordance with section 490.147, the
24articles of validation must set forth all of the following:
   25(1)  The name, title, and filing date of the filing
26previously made and any articles of correction to that filing.
   27(2)  A statement that a copy of the filing previously made,
28together with any articles of correction to that filing, is
29attached as an exhibit to the articles of validation.
   30b.  If a filing was previously made in respect of the
31defective corporate action and such filing requires any change
32to give effect to the ratification of such defective corporate
33action in accordance with section 490.147, the articles of
34validation must set forth all of the following:
   35(1)  The name, title, and filing date of the filing
-33-1previously made and any articles of correction to that filing.
   2(2)  A statement that a filing containing all of the
3information required to be included under the applicable
4section or sections of this chapter to give effect to such
5defective corporate action is attached as an exhibit to the
6articles of validation.
   7(3)  The date and time that such filing is deemed to have
8become effective.
   9c.  If a filing was not previously made in respect of the
10defective corporate action and the defective corporate action
11ratified under section 490.147 would have required a filing
12under any other section of this chapter, the articles of
13validation must set forth all of the following:
   14(1)  A statement that a filing containing all of the
15information required to be included under the applicable
16section or sections of this chapter to give effect to such
17defective corporate action is attached as an exhibit to the
18articles of validation.
   19(2)  The date and time that such filing is deemed to have
20become effective.
21   Sec. 25.  NEW SECTION.  490.152  Judicial proceedings
22regarding validity of corporate actions.
   231.  Upon application by the corporation, any successor
24entity to the corporation, a director of the corporation, any
25shareholder, beneficial shareholder, or unrestricted voting
26trust beneficial owner of the corporation, including any
27such shareholder, beneficial shareholder, or unrestricted
28voting trust beneficial owner as of the date of the defective
29corporate action ratified under section 490.147, or any other
30person claiming to be substantially and adversely affected by a
31ratification under section 490.147, the district court of the
32county where a corporation’s principal office or, if none in
33this state, its registered office, is located may do all of the
34following:
   35a.  Determine the validity and effectiveness of any corporate
-34-1action or defective corporate action.
   2b.  Determine the validity and effectiveness of any
3ratification under section 490.147.
   4c.  Determine the validity of any putative shares.
   5d.  Modify or waive any of the procedures specified in
6section 490.147 or 490.148 to ratify a defective corporate
7action.
   82.  In connection with an action under this section, the
9court may make such findings or orders, and take into account
10any factors or considerations, regarding such matters as it
11deems proper under the circumstances.
   123.  Service of process of the application under subsection
131 on the corporation may be made in any manner provided by
14statute of this state or by rule of the applicable court for
15service on the corporation, and no other party need be joined
16in order for the court to adjudicate the matter. In an action
17filed by the corporation, the court may require notice of the
18action to be provided to other persons specified by the court
19and permit such other persons to intervene in the action.
   204.  Notwithstanding any other provision of this section or
21otherwise under applicable law, any action asserting that the
22ratification of any defective corporate action and any putative
23shares issued as a result of such defective corporate action
24should not be effective, or should be effective only on certain
25conditions, shall be brought within one hundred twenty days of
26the validation effective time.
27   Sec. 26.  Section 490.201, Code 2021, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.201  Incorporators.
   30One or more persons may act as the incorporator or
31incorporators of a corporation by delivering articles of
32incorporation to the secretary of state for filing.
33   Sec. 27.  Section 490.202, Code 2021, is amended by striking
34the section and inserting in lieu thereof the following:
   35490.202  Articles of incorporation.
-35-
   11.  The articles of incorporation must set forth all of the
2following:
   3a.  A corporate name for the corporation that satisfies the
4requirements of section 490.401.
   5b.  The number of shares the corporation is authorized to
6issue.
   7c.  The street and mailing addresses of the corporation’s
8initial registered office and the name of its initial
9registered agent at that office.
   10d.  The name and address of each incorporator.
   112.  The articles of incorporation may set forth any of the
12following:
   13a.  The names and addresses of the individuals who are to
14serve as the initial directors.
   15b.  Provisions not inconsistent with law regarding any of the
16following:
   17(1)  The purpose or purposes for which the corporation is
18organized.
   19(2)  Managing the business and regulating the affairs of the
20corporation.
   21(3)  Defining, limiting, and regulating the powers of the
22corporation, its board of directors, and shareholders.
   23(4)  A par value for authorized shares or classes of shares.
   24(5)  The imposition of interest holder liability on
25shareholders.
   26c.  Any provision that under this chapter is required or
27permitted to be set forth in the bylaws.
   28d.  A provision eliminating or limiting the liability
29of a director to the corporation or its shareholders for
30money damages for any action taken, or any failure to take
31any action, as a director, except liability for any of the
32following:
   33(1)  The amount of a financial benefit received by a director
34to which the director is not entitled.
   35(2)  An intentional infliction of harm on the corporation or
-36-1the shareholders.
   2(3)  A violation of section 490.833.
   3(4)  An intentional violation of criminal law.
   4e.  A provision permitting or making obligatory
5indemnification of a director for liability, as defined in
6section 490.850, to any person for any action taken, or any
7failure to take any action, as a director, except liability for
8any of the following:
   9(1)  Receipt of a financial benefit to which the director is
10not entitled.
   11(2)  An intentional infliction of harm on the corporation or
12its shareholders.
   13(3)  A violation of section 490.833.
   14(4)  An intentional violation of criminal law.
   15f.  A provision limiting or eliminating any duty of a
16director or any other person to offer the corporation the
17right to have or participate in any, or one or more classes
18or categories of, business opportunities, before the pursuit
19or taking of the opportunity by the director or other person;
20provided that any application of such a provision to an officer
21or a related person of that officer is subject to all of the
22following:
   23(1)  It also requires approval of that application by the
24board of directors, subsequent to the effective date of the
25provision, by action of qualified directors taken in compliance
26with the same procedures as are set forth in section 490.862.
   27(2)  It may be limited by the authorizing action of the
28board.
   293.  The articles of incorporation need not set forth any of
30the corporate powers enumerated in this chapter.
   314.  Provisions of the articles of incorporation may be made
32dependent upon facts objectively ascertainable outside the
33articles of incorporation in accordance with section 490.120,
34subsection 11.
   355.  As used in this section, “related person” has the meaning
-37-1specified in section 490.860.
2   Sec. 28.  Section 490.203, Code 2021, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.203  Incorporation.
   51.  Unless a delayed effective date is specified, the
6corporate existence begins when the articles of incorporation
7are filed.
   82.  The secretary of state’s filing of the articles of
9incorporation is conclusive proof that the incorporators
10satisfied all conditions precedent to incorporation except in a
11proceeding by the state to cancel or revoke the incorporation
12or involuntarily dissolve the corporation.
13   Sec. 29.  Section 490.205, Code 2021, is amended by striking
14the section and inserting in lieu thereof the following:
   15490.205  Organization of corporation.
   161.  After incorporation, the following shall apply:
   17a.  If initial directors are named in the articles
18of incorporation, the initial directors shall hold an
19organizational meeting, at the call of a majority of the
20directors, to complete the organization of the corporation by
21appointing officers, adopting bylaws, and carrying on any other
22business brought before the meeting.
   23b.  If initial directors are not named in the articles of
24incorporation, the incorporator or incorporators shall hold
25an organizational meeting at the call of a majority of the
26incorporators to do any of the following:
   27(1)  Elect initial directors and complete the organization
28of the corporation.
   29(2)  Elect a board of directors who shall complete the
30organization of the corporation.
   312.  Action required or permitted by this chapter to be taken
32by incorporators at an organizational meeting may be taken
33without a meeting if the action taken is evidenced by one or
34more written consents describing the action taken and signed by
35each incorporator.
-38-
   13.  An organizational meeting may be held in or out of this
2state.
3   Sec. 30.  Section 490.206, Code 2021, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.206  Bylaws.
   61.  The incorporators or board of directors of a corporation
7shall adopt initial bylaws for the corporation.
   82.  The bylaws of a corporation may contain any provision
9that is not inconsistent with law or the articles of
10incorporation.
   113.  The bylaws may contain any of the following provisions:
   12a.  A requirement that if the corporation solicits proxies
13or consents with respect to an election of directors, the
14corporation include in its proxy statement and any form
15of its proxy or consent, to the extent and subject to such
16procedures or conditions as are provided in the bylaws, one
17or more individuals nominated by a shareholder in addition to
18individuals nominated by the board of directors.
   19b.  A requirement that the corporation reimburse the expenses
20incurred by a shareholder in soliciting proxies or consents in
21connection with an election of directors, to the extent and
22subject to such procedures and conditions as are provided in
23the bylaws, provided that no bylaw so adopted shall apply to
24elections for which any record date precedes its adoption.
   254.  Notwithstanding section 490.1020, subsection 2,
26paragraph “b”, the shareholders in amending, repealing, or
27adopting a bylaw described in subsection 3 shall not limit the
28authority of the board of directors to amend or repeal any
29condition or procedure set forth in or to add any procedure
30or condition to such a bylaw to provide for a reasonable,
31practical, and orderly process.
32   Sec. 31.  Section 490.207, Code 2021, is amended by striking
33the section and inserting in lieu thereof the following:
   34490.207  Emergency bylaws.
   351.  Unless the articles of incorporation provide otherwise,
-39-1the board of directors may adopt bylaws to be effective only in
2an emergency as defined in subsection 4. The emergency bylaws,
3which are subject to amendment or repeal by the shareholders,
4may make all provisions necessary for managing the corporation
5during the emergency, including any of the following:
   6a.  Procedures for calling a meeting of the board of
7directors.
   8b.  Quorum requirements for the meeting.
   9c.  Designation of additional or substitute directors.
   102.  All provisions of the regular bylaws not inconsistent
11with the emergency bylaws remain effective during the
12emergency. The emergency bylaws are not effective after the
13emergency ends.
   143.  Corporate action taken in good faith in accordance with
15the emergency bylaws has all of the following effects:
   16a.  The action binds the corporation.
   17b.  The action shall not be used to impose liability on a
18director, officer, employee, or agent of the corporation.
   194.  An emergency exists for purposes of this section if a
20quorum of the board of directors cannot readily be assembled
21because of some catastrophic event.
22   Sec. 32.  NEW SECTION.  490.208  Forum selection provisions.
   231.  The articles of incorporation or bylaws may require
24that any or all internal corporate claims shall be brought
25exclusively in any specified court or courts of this state
26and, if so specified, in any additional courts in this state
27or in any other jurisdictions with which the corporation has a
28reasonable relationship.
   292.  A provision of the articles of incorporation or bylaws
30adopted under subsection 1 shall not have the effect of
31conferring jurisdiction on any court or over any person or
32claim, and shall not apply if none of the courts specified
33by such provision has the requisite personal and subject
34matter jurisdiction. If the court or courts of this state
35specified in a provision adopted under subsection 1 do not
-40-1have the requisite personal and subject matter jurisdiction
2and another court of this state does have such jurisdiction,
3then the internal corporate claim may be brought in such other
4court of this state, notwithstanding that such other court
5of this state is not specified in such provision, and in any
6other court specified in such provision that has the requisite
7jurisdiction.
   83.  No provision of the articles of incorporation or bylaws
9may prohibit bringing an internal corporate claim in the
10courts of this state or require such claims to be determined
11by arbitration.
   124.  “Internal corporate claim” means, for the purposes of
13this section, any of the following:
   14a.  Any claim that is based upon a violation of a duty
15under the laws of this state by a current or former director,
16officer, or shareholder in such capacity.
   17b.  Any derivative action or proceeding brought on behalf of
18the corporation.
   19c.  Any action asserting a claim arising pursuant to any
20provision of this chapter or the articles of incorporation or
21bylaws.
   22d.  Any action asserting a claim governed by the internal
23affairs doctrine that is not included in paragraphs “a” through
24“c”.
25   Sec. 33.  NEW SECTION.  490.209  Foreign-trade zone
26corporation.
   27A corporation may be organized under the laws of this state
28for the purpose of establishing, operating, and maintaining
29a foreign-trade zone as defined in 19 U.S.C.§81(a). A
30corporation organized for the purposes set forth in this
31section has all powers necessary or convenient for applying
32for a grant of authority to establish, operate, and maintain
33a foreign-trade zone under 19 U.S.C.§81(a) et seq., and
34regulations promulgated under that law, and for establishing,
35operating, and maintaining a foreign-trade zone pursuant to
-41-1that grant of authority.
2   Sec. 34.  Section 490.302, Code 2021, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.302  General powers.
   5Unless its articles of incorporation provide otherwise,
6every corporation has perpetual duration and succession in its
7corporate name and has the same powers as an individual to do
8all things necessary or convenient to carry out its business
9and affairs, including the power to do all of the following:
   101.  Sue and be sued, complain, and defend in its corporate
11name.
   122.  Have a corporate seal, which may be altered at will, and
13to use it, or a facsimile of it, by impressing or affixing it or
14in any other manner reproducing it.
   153.  Make and amend bylaws, not inconsistent with its articles
16of incorporation or with the laws of this state, for managing
17the business and regulating the affairs of the corporation.
   184.  Purchase, receive, lease, or otherwise acquire, and own,
19hold, improve, use, and otherwise deal with, real or personal
20property, or any legal or equitable interest in property,
21wherever located.
   225.  Sell, convey, mortgage, pledge, lease, exchange, and
23otherwise dispose of all or any part of its property.
   246.  Purchase, receive, subscribe for, or otherwise acquire,
25own, hold, vote, use, sell, mortgage, lend, pledge, or
26otherwise dispose of, and deal in and with shares or other
27interests in, or obligations of, any other entity.
   287.  Make contracts and guarantees, incur liabilities,
29borrow money, issue its notes, bonds, and other securities
30and obligations, which may be convertible into or include the
31option to purchase other securities of the corporation, and
32secure any of its obligations by mortgage or pledge of any of
33its property, franchises, or income.
   348.  Lend money, invest and reinvest its funds, and receive
35and hold real and personal property as security for repayment.
-42-
   19.  Be a promoter, partner, member, associate, or manager of
2any partnership, joint venture, trust, or other entity.
   310.  Conduct its business, locate offices, and exercise the
4powers granted by this chapter within or without this state.
   511.  Elect directors and appoint officers, employees, and
6agents of the corporation, define their duties, fix their
7compensation, and lend them money and credit.
   812.  Pay pensions and establish pension plans, pension
9trusts, profit sharing plans, share bonus plans, share option
10plans, and benefit or incentive plans for any or all of its
11current or former directors, officers, employees, and agents.
   1213.  Make donations for the public welfare or for charitable,
13scientific, or educational purposes.
   1414.  Transact any lawful business that will aid governmental
15policy.
   1615.  Make payments or donations, or do any other act, not
17inconsistent with law, that furthers the business and affairs
18of the corporation.
19   Sec. 35.  Section 490.303, Code 2021, is amended by striking
20the section and inserting in lieu thereof the following:
   21490.303  Emergency powers.
   221.  In anticipation of or during an emergency as defined in
23subsection 4, the board of directors of a corporation may do
24all of the following:
   25a.  Modify lines of succession to accommodate the incapacity
26of any director, officer, employee, or agent.
   27b.  Relocate the principal office, designate alternative
28principal offices or regional offices, or authorize the
29officers to do so.
   302.  During an emergency as defined in subsection 4, unless
31emergency bylaws provide otherwise:
   32a.  Notice of a meeting of the board of directors need be
33given only to those directors whom it is practicable to reach
34and may be given in any practicable manner.
   35b.  One or more officers of the corporation present at a
-43-1meeting of the board of directors may be deemed to be directors
2for the meeting, in order of rank and within the same rank in
3order of seniority, as necessary to achieve a quorum.
   43.  Corporate action taken in good faith during an emergency
5under this section to further the ordinary business affairs of
6the corporation shall both:
   7a.  Bind the corporation.
   8b.  Not be used to impose liability on a corporate director,
9officer, employee, or agent.
   104.  An emergency exists for purposes of this section if a
11quorum of the board of directors cannot readily be assembled
12because of some catastrophic event.
13   Sec. 36.  Section 490.401, Code 2021, is amended by striking
14the section and inserting in lieu thereof the following:
   15490.401  Corporate name.
   161.  A corporate name is subject to all of the following:
   17a.  It must contain the word “corporation”, “incorporated”,
18“company”, or “limited”, or the abbreviation “corp.”, “inc.”,
19“co.”, or “ltd.”, or words or abbreviations of like import in
20another language.
   21b.  It must not contain language stating or implying that
22the corporation is organized for a purpose other than that
23permitted by section 490.301 and its articles of incorporation.
   242.  Except as authorized by subsections 3 and 4, a corporate
25name must be distinguishable upon the records of the secretary
26of state from all of the following:
   27a.  The corporate name of a corporation incorporated in
28this state which is not administratively dissolved, or if such
29corporation has been administratively dissolved, within five
30years after the effective date of dissolution.
   31b.  A corporate name reserved or registered under section
32490.402 or 490.403 or any similar provision of the law of this
33state.
   34c.  The name of a foreign corporation registered to do
35business in this state or an alternate name adopted by a
-44-1foreign corporation registered to do business in this state
2because its corporate name is unavailable.
   3d.  The corporate name of a nonprofit corporation
4incorporated in this state which is not administratively
5dissolved.
   6e.  The name of a foreign nonprofit corporation registered
7to do business in this state or an alternate name adopted by a
8foreign nonprofit corporation registered to conduct activities
9in this state because its real name is unavailable.
   10f.  The name of a domestic filing entity which is not
11administratively dissolved.
   12g.  The name of a foreign unincorporated entity registered
13to do business in this state or an alternate name adopted by
14such an entity registered to conduct activities in this state
15because its real name is unavailable.
   16h.  A name reserved, registered, or protected as follows:
   17(1)  For a limited liability partnership, section 486A.1001
18or 486A.1002.
   19(2)  For a limited partnership, section 488.108, 488.109, or
20488.810.
   21(3)  For a business corporation, this section, or section
22490.402, 490.403, or 490.1422.
   23(4)  For a limited liability company under chapter 489,
24section 489.108, 489.109, or 489.706.
   25(5)  For a nonprofit corporation, section 504.401, 504.402,
26504.403, or 504.1423.
   273.  A corporation may apply to the secretary of state for
28authorization to use a name that is not distinguishable upon
29the secretary of state’s records from one or more of the names
30described in subsection 2. The secretary of state shall
31authorize use of the name applied for if any of the following
32conditions apply:
   33a.  The other corporation or unincorporated entity consents
34to the use in writing and submits an undertaking in form
35satisfactory to the secretary of state to change its name to a
-45-1name that is distinguishable upon the records of the secretary
2of state from the name of the applying corporation.
   3b.  The applicant delivers to the secretary of state a
4certified copy of the final judgment of a court of competent
5jurisdiction establishing the applicant’s right to use the name
6applied for in this state.
   74.  A corporation may use the name, including the fictitious
8name, of another domestic or foreign corporation that is used
9in this state if the other corporation is incorporated or
10authorized to transact business in this state and the proposed
11user corporation submits documentation to the satisfaction
12of the secretary of state establishing any of the following
13conditions:
   14a.  Has merged with the other corporation.
   15b.  Has been formed by reorganization of the other
16corporation.
   17c.  Has acquired all or substantially all of the assets,
18including the corporate name, of the other corporation.
   195.  This chapter does not control the use of fictitious
20names; however, if a corporation or a foreign corporation
21uses a fictitious name in this state, it shall deliver to the
22secretary of state for filing a copy of the resolution of its
23board of directors, certified by its secretary, adopting the
24fictitious name.
25   Sec. 37.  Section 490.402, Code 2021, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.402  Reserved name.
   281.  A person may reserve the exclusive use of a corporate
29name, including a fictitious or alternate name for a foreign
30corporation whose corporate name is not available, by
31delivering an application to the secretary of state for
32filing. The application must set forth the name and address
33of the applicant and the name proposed to be reserved. If the
34secretary of state finds that the corporate name applied for is
35available, the secretary of state shall reserve the name for
-46-1the applicant’s exclusive use for a nonrenewable one hundred
2twenty-day period.
   32.  The owner of a reserved corporate name may transfer the
4reservation to another person by delivering to the secretary of
5state a signed notice of the transfer that states the name and
6address of the transferee.
7   Sec. 38.  Section 490.403, Code 2021, is amended by striking
8the section and inserting in lieu thereof the following:
   9490.403  Registered name.
   101.  A foreign corporation may register its corporate
11name, or its corporate name with the addition of any word
12or abbreviation listed in section 490.401, subsection 1,
13paragraph “a”, if necessary for the corporate name to comply
14with section 490.401, subsection 1, paragraph “a”, if the name
15is distinguishable upon the records of the secretary of state
16from the corporate names that are not available under section
17490.401, subsection 2.
   182.  A foreign corporation registers its corporate name, or
19its corporate name with any addition permitted by subsection
201, by delivering to the secretary of state for filing an
21application that complies with all of the following:
   22a.  Sets forth that name, the state or country and date of
23its incorporation, and a brief description of the nature of the
24business which is to be conducted in this state.
   25b.  Is accompanied by a certificate of existence, or a
26document of similar import, from the state or country of
27incorporation.
   283.  The name is registered for the applicant’s exclusive
29use upon the effective date of the application and for the
30remainder of the calendar year, unless renewed.
   314.  A foreign corporation whose name registration is
32effective may renew it for successive years by delivering
33to the secretary of state for filing a renewal application,
34which complies with the requirements of subsection 2, between
35October 1 and December 31 of the preceding year. The renewal
-47-1application when filed renews the registration for the
2following calendar year.
   35.  a.  A foreign corporation whose name registration is
4effective may thereafter do any of the following:
   5(1)  Register to do business as a foreign corporation under
6the registered name, if it complies with section 490.401,
7subsection 1, paragraph “b”.
   8(2)  Consent in writing to the use of that name by a domestic
9corporation thereafter incorporated under this chapter or by
10another foreign corporation.
   11b.  The registration terminates when the domestic corporation
12is incorporated or the foreign corporation registers to do
13business under that name.
14   Sec. 39.  Section 490.501, Code 2021, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.501  Registered office and agent of domestic and
17registered foreign corporations.
   181.  Each corporation shall continuously maintain in this
19state all of the following:
   20a.  A registered office that may be the same as any of its
21places of business.
   22b.  A registered agent, which may be any of the following:
   23(1)  An individual who resides in this state and whose
24business office is identical with the registered office.
   25(2)  A domestic or foreign corporation or eligible entity
26whose business office is identical with the registered office
27and, in the case of a foreign corporation or foreign eligible
28entity, is registered to do business in this state.
   292.  As used in this subchapter, “corporation” means both a
30domestic corporation and a registered foreign corporation.
31   Sec. 40.  Section 490.502, Code 2021, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.502  Change of registered office or registered agent.
   341.  A corporation may change its registered office or
35registered agent by delivering to the secretary of state
-48-1for filing a statement of change that sets forth all of the
2following:
   3a.  The name of the corporation.
   4b.  The street and mailing addresses of its current
5registered office.
   6c.  If the current registered office is to be changed, the
7street and mailing addresses of the new registered office.
   8d.  The name of its current registered agent.
   9e.  If the current registered agent is to be changed, the
10name of the new registered agent and the new agent’s written
11consent, either on the statement or attached to it, to the
12appointment.
   13f.  That after the change or changes are made, the street and
14mailing addresses of its registered office and of the business
15office of its registered agent will be identical.
   162.  If the street or mailing address of a registered agent’s
17business office changes, the agent shall change the street or
18mailing address of the registered office of any corporation for
19which the agent is the registered agent by delivering a signed
20written notice of the change to the corporation and delivering
21to the secretary of state for filing a signed statement that
22complies with the requirements of subsection 1 and states that
23the corporation has been notified of the change.
   243.  If a registered agent changes the registered agent’s
25business address to another place, the registered agent may
26change the business address and the address of the registered
27agent by filing a statement as required in subsection 2 for
28each corporation, or a single statement for all corporations
29named in the notice, except that it need be signed only by the
30registered agent and need not be responsive to subsection 1,
31paragraph “e”, and must recite that a copy of the statement has
32been mailed to each corporation named in the notice.
   334.  A corporation may also change its registered office or
34registered agent in its biennial report as provided in section
35490.1622.
-49-
1   Sec. 41.  Section 490.503, Code 2021, is amended by striking
2the section and inserting in lieu thereof the following:
   3490.503  Resignation of registered agent.
   41.  A registered agent may resign as agent for a corporation
5by delivering to the secretary of state for filing a statement
6of resignation signed by the agent which shall state all of the
7following:
   8a.  The name of the corporation.
   9b.  The name of the agent.
   10c.  The agent resigns from serving as registered agent for
11the corporation.
   12d.  The address of the corporation to which the agent will
13deliver the notice required by subsection 3.
   142.  A statement of resignation takes effect on the earlier
15of the following:
   16a.  12:01 a.m.on the thirty-first day after the day on which
17it is filed by the secretary of state.
   18b.  The designation of a new registered agent for the
19corporation.
   203.  A registered agent promptly shall deliver to the
21corporation notice of the date on which a statement of
22resignation was delivered to the secretary of state for filing.
   234.  When a statement of resignation takes effect, the person
24that resigned ceases to have responsibility under this chapter
25for any matter thereafter tendered to it as agent for the
26corporation. The resignation does not affect any contractual
27rights the corporation has against the agent or that the agent
28has against the corporation.
   295.  A registered agent may resign with respect to a
30corporation regardless of whether the corporation is in good
31standing.
32   Sec. 42.  Section 490.504, Code 2021, is amended by striking
33the section and inserting in lieu thereof the following:
   34490.504  Service on corporation.
   351.  A corporation’s registered agent is the corporation’s
-50-1agent for service of process, notice, or demand required or
2permitted by law to be served on the corporation.
   32.  If a corporation has no registered agent, or the agent
4cannot with reasonable diligence be served, the corporation
5may be served by registered or certified mail, return receipt
6requested, addressed to the secretary at the corporation’s
7principal office. Service is perfected under this subsection
8at the earliest of the following:
   9a.  The date the corporation receives the mail.
   10b.  The date shown on the return receipt, if signed on behalf
11of the corporation.
   12c.  Five days after its deposit in the United States mail,
13as evidenced by the postmark, if mailed postpaid and correctly
14addressed.
   153.  a.  The secretary of state shall be an agent of the
16corporation upon whom process, notice, or demand may be served,
17if any of the following applies:
   18(1)  The process, notice, or demand cannot be served on a
19corporation pursuant to subsection 1 or 2.
   20(2)  The process, notice, or demand is to be served on
21a registered foreign corporation that has withdrawn its
22registration pursuant to section 490.1507 or 490.1509, or the
23registration of which has been terminated pursuant to section
24490.1511.
   25b.  Service of any process, notice, or demand on the
26secretary of state as agent for a corporation may be made by
27delivering to the secretary of state duplicate copies of the
28process, notice, or demand. If process, notice, or demand
29is served on the secretary of state, the secretary of state
30shall forward one of the copies by registered or certified
31mail, return receipt requested, to the corporation at the
32last address shown in the records of the secretary of state.
33Service is effected under this subsection at the earliest of
34the following:
   35(1)  The date the corporation receives the process, notice,
-51-1or demand.
   2(2)  The date shown on the return receipt, if signed on
3behalf of the corporation.
   4(3)  Five days after the process, notice, or demand is
5deposited with the United States mail by the secretary of
6state.
   74.  This section does not prescribe the only means, or
8necessarily the required means, of serving a corporation.
9   Sec. 43.  Section 490.601, Code 2021, is amended by striking
10the section and inserting in lieu thereof the following:
   11490.601  Authorized shares.
   121.  The articles of incorporation must set forth any classes
13of shares and series of shares within a class, and the number
14of shares of each class and series, that the corporation is
15authorized to issue. If more than one class or series of
16shares is authorized, the articles of incorporation must
17prescribe a distinguishing designation for each class or series
18and, before the issuance of shares of a class or series,
19describe the terms, including the preferences, rights, and
20limitations of that class or series. Except to the extent
21varied as permitted by this section, all shares of a class or
22series must have terms, including preferences, rights, and
23limitations that are identical with those of other shares of
24the same class or series.
   252.  The articles of incorporation must authorize all of the
26following:
   27a.  One or more classes or series of shares that together
28have full voting rights.
   29b.  One or more classes or series of shares, which may be
30the same class, classes, or series as those with voting rights,
31that together are entitled to receive the net assets of the
32corporation upon dissolution.
   333.  The articles of incorporation may authorize one or more
34classes or series of shares that have any of the following
35characteristics:
-52-
   1a.  Have special, conditional, or limited voting rights, or
2no right to vote, except to the extent otherwise provided by
3this chapter.
   4b.  Are redeemable or convertible as specified in the
5articles of incorporation in any of the following ways:
   6(1)  At the option of the corporation, the shareholder, or
7another person or upon the occurrence of a specified event.
   8(2)  For cash, indebtedness, securities, or other property.
   9(3)  At prices and in amounts specified or determined in
10accordance with a formula.
   11c.  Entitle the holders to distributions calculated in
12any manner, including dividends that may be cumulative,
13noncumulative, or partially cumulative.
   14d.  Have preference over any other class or series of shares
15with respect to distributions, including distributions upon the
16dissolution of the corporation.
   174.  The terms of shares may be made dependent upon facts
18objectively ascertainable outside the articles of incorporation
19in accordance with section 490.120, subsection 11.
   205.  Any of the terms of shares may vary among holders of the
21same class or series so long as such variations are expressly
22set forth in the articles of incorporation.
   236.  The description of the preferences, rights, and
24limitations of classes or series of shares in subsection 3 is
25not exhaustive.
26   Sec. 44.  Section 490.602, Code 2021, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.602  Terms of class or series determined by board of
29directors.
   301.  If the articles of incorporation so provide, the board
31of directors is authorized, without shareholder approval, to
32do any of the following:
   33a.  Classify any unissued shares into one or more classes or
34into one or more series within a class.
   35b.  Reclassify any unissued shares of any class into one
-53-1or more classes or into one or more series within one or more
2classes.
   3c.  Reclassify any unissued shares of any series of any class
4into one or more classes or into one or more series within a
5class.
   62.  If the board of directors acts pursuant to subsection
71, it shall determine the terms, including the preferences,
8rights, and limitations, to the same extent permitted under
9section 490.601, of any of the following:
   10a.  Any class of shares before the issuance of any shares of
11that class.
   12b.  Any series within a class before the issuance of any
13shares of that series.
   143.  Before issuing any shares of a class or series created
15under this section, the corporation shall deliver to the
16secretary of state for filing articles of amendment setting
17forth the terms determined under subsection 1.
18   Sec. 45.  Section 490.603, Code 2021, is amended by striking
19the section and inserting in lieu thereof the following:
   20490.603  Issued and outstanding shares.
   211.  A corporation may issue the number of shares of each
22class or series authorized by the articles of incorporation.
23Shares that are issued are outstanding shares until they are
24reacquired, redeemed, converted, or canceled.
   252.  The reacquisition, redemption, or conversion of
26outstanding shares is subject to the limitations of subsection
273 and to section 490.640.
   283.  At all times that shares of the corporation are
29outstanding, one or more shares that together have full voting
30rights and one or more shares that together are entitled to
31receive the net assets of the corporation upon dissolution must
32be outstanding.
33   Sec. 46.  Section 490.604, Code 2021, is amended by striking
34the section and inserting in lieu thereof the following:
   35490.604  Fractional shares.
-54-
   11.  A corporation may issue fractions of a share or in lieu
2of doing so may do any of the following:
   3a.  Pay in cash the value of fractions of a share.
   4b.  Issue scrip in registered or bearer form entitling the
5holder to receive a full share upon surrendering enough scrip
6to equal a full share.
   7c.  Arrange for disposition of fractional shares by the
8holders of such shares.
   92.  Each certificate representing scrip must be
10conspicuously labeled “scrip” and must contain the information
11required by section 490.625, subsection 2.
   123.  The holder of a fractional share is entitled to exercise
13the rights of a shareholder, including the rights to vote,
14to receive dividends, and to receive distributions upon
15dissolution. The holder of scrip is not entitled to any of
16these rights unless the scrip provides for them.
   174.  The board of directors may authorize the issuance of
18scrip subject to any condition, including any of the following:
   19a.  That the scrip will become void if not exchanged for full
20shares before a specified date.
   21b.  That the shares for which the scrip is exchangeable may
22be sold and the proceeds paid to the scripholders.
23   Sec. 47.  Section 490.620, Code 2021, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.620  Subscription for shares before incorporation.
   261.  A subscription for shares entered into before
27incorporation is irrevocable for six months unless the
28subscription agreement provides a longer or shorter period or
29all the subscribers agree to revocation.
   302.  The board of directors may determine the payment terms
31of subscriptions for shares that were entered into before
32incorporation, unless the subscription agreement specifies
33them. A call for payment by the board of directors must be
34uniform so far as practicable as to all shares of the same
35class or series, unless the subscription agreement specifies
-55-1otherwise.
   23.  Shares issued pursuant to subscriptions entered into
3before incorporation are fully paid and nonassessable when
4the corporation receives the consideration specified in the
5subscription agreement.
   64.  If a subscriber defaults in payment of cash or
7property under a subscription agreement entered into before
8incorporation, the corporation may collect the amount owed
9as any other debt. Alternatively, unless the subscription
10agreement provides otherwise, the corporation may rescind the
11agreement and may sell the shares if the debt remains unpaid
12for more than twenty days after the corporation delivers a
13written demand for payment to the subscriber.
   145.  A subscription agreement entered into after
15incorporation is a contract between the subscriber and the
16corporation subject to section 490.621.
17   Sec. 48.  Section 490.621, Code 2021, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.621  Issuance of shares.
   201.  The powers granted in this section to the board of
21directors may be reserved to the shareholders by the articles
22of incorporation.
   232.  The board of directors may authorize shares to be issued
24for consideration consisting of any tangible or intangible
25property or benefit to the corporation, including cash,
26promissory notes, services performed, contracts for services to
27be performed, or other securities of the corporation.
   283.  Before the corporation issues shares, the board of
29directors shall determine that the consideration received or
30to be received for shares to be issued is adequate. That
31determination by the board of directors is conclusive insofar
32as the adequacy of consideration for the issuance of shares
33relates to whether the shares are validly issued, fully paid,
34and nonassessable.
   354.  When the corporation receives the consideration for
-56-1which the board of directors authorized the issuance of shares,
2the shares issued therefor are fully paid and nonassessable.
   35.  The corporation may place in escrow shares issued for
4a contract for future services or benefits or a promissory
5note, or make other arrangements to restrict the transfer of
6the shares, and may credit distributions in respect of the
7shares against their purchase price, until the services are
8performed, the benefits are received, or the note is paid. If
9the services are not performed, the benefits are not received,
10or the note is not paid, the shares escrowed or restricted and
11the distributions credited may be canceled in whole or part.
   126.  a.  An issuance of shares or other securities convertible
13into or rights exercisable for shares in a transaction or
14a series of integrated transactions requires approval of
15the shareholders, at a meeting at which a quorum consisting
16of a majority, or such greater number as the articles of
17incorporation may prescribe, of the votes entitled to be cast
18on the matter exists, if all of the following conditions are
19satisfied:
   20(1)  The shares, other securities, or rights are to be issued
21for consideration other than cash or cash equivalents.
   22(2)  The voting power of shares that are issued and issuable
23as a result of the transaction or series of integrated
24transactions will comprise more than twenty percent of the
25voting power of the shares of the corporation that were
26outstanding immediately before the transaction.
   27b.  For purposes of this subsection, the following shall
28apply:
   29(1)  For purposes of determining the voting power of shares
30issued and issuable as a result of a transaction or series of
31integrated transactions, the voting power of shares or other
32securities convertible into or rights exercisable for shares
33shall be the greater of the following:
   34(a)  The voting power of the shares to be issued.
   35(b)  The voting power of the shares that would be outstanding
-57-1after giving effect to the conversion of convertible shares and
2other securities and the exercise of rights to be issued.
   3(2)  A series of transactions is integrated only if
4consummation of one transaction is made contingent on
5consummation of one or more of the other transactions.
6   Sec. 49.  Section 490.622, Code 2021, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.622  Liability of shareholders.
   91.  A purchaser from a corporation of the corporation’s own
10shares is not liable to the corporation or its creditors with
11respect to the shares except to pay the consideration for which
12the shares were authorized to be issued or specified in the
13subscription agreement.
   142.  A shareholder of a corporation is not personally liable
15for any liabilities of the corporation, including liabilities
16arising from acts of the corporation, subject to the following
17exceptions:
   18a.  To the extent provided in a provision of the articles
19of incorporation permitted by section 490.202, subsection 2,
20paragraph “b”, subparagraph (5).
   21b.  A shareholder may become personally liable by reason of
22the shareholder’s own acts or conduct.
23   Sec. 50.  Section 490.623, Code 2021, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.623  Share dividends.
   261.  Unless the articles of incorporation provide otherwise,
27shares may be issued pro rata and without consideration to the
28corporation’s shareholders or to the shareholders of one or
29more classes or series of shares. An issuance of shares under
30this subsection is a share dividend.
   312.  Shares of one class or series shall not be issued as a
32share dividend in respect of shares of another class or series
33unless one or more of the following conditions are met:
   34a.  The articles of incorporation so authorize.
   35b.  A majority of the votes entitled to be cast by the class
-58-1or series to be issued approve the issue.
   2c.  There are no outstanding shares of the class or series
3to be issued.
   43.  The board of directors may fix the record date for
5determining shareholders entitled to a share dividend, which
6date shall not be retroactive. If the board of directors does
7not fix the record date for determining shareholders entitled
8to a share dividend, the record date is the date the board of
9directors authorizes the share dividend.
10   Sec. 51.  Section 490.624, Code 2021, is amended by striking
11the section and inserting in lieu thereof the following:
   12490.624  Share rights, options, warrants, and awards.
   131.  A corporation may issue rights, options, or warrants for
14the purchase of shares or other securities of the corporation.
15The board of directors shall determine the terms and conditions
16upon which the rights, options, or warrants are issued and the
17terms, including the consideration for which the shares or
18other securities are to be issued. The authorization by the
19board of directors for the corporation to issue such rights,
20options, or warrants constitutes authorization of the issuance
21of the shares or other securities for which the rights,
22options, or warrants are exercisable.
   232.  The terms and conditions of such rights, options, or
24warrants may include restrictions or conditions that do any of
25the following:
   26a.  Preclude or limit the exercise, transfer, or receipt
27of such rights, options, or warrants by any person or
28persons owning or offering to acquire a specified number or
29percentage of the outstanding shares or other securities of the
30corporation or by any transferee or transferees of any such
31person or persons.
   32b.  Invalidate or void such rights, options, or warrants
33held by any such person or persons or any such transferee or
34transferees.
   353.  The board of directors may authorize one or more officers
-59-1to do any of the following:
   2a.  Designate the recipients of rights, options, warrants,
3or other equity compensation awards that involve the issuance
4of shares.
   5b.  Determine, within an amount and subject to any other
6limitations established by the board of directors and, if
7applicable, the shareholders, the number of such rights,
8options, warrants, or other equity compensation awards and
9the terms of such rights, options, warrants, or awards to be
10received by the recipients, provided that an officer shall
11not use such authority to designate the officer or any other
12persons as the board of directors may specify as a recipient of
13such rights, options, warrants, or other equity compensation
14awards.
15   Sec. 52.  Section 490.625, Code 2021, is amended by striking
16the section and inserting in lieu thereof the following:
   17490.625  Form and content of certificates.
   181.  Shares may, but need not, be represented by certificates.
19Unless this chapter or another statute expressly provides
20otherwise, the rights and obligations of shareholders are
21identical regardless of whether their shares are represented by
22certificates.
   232.  At a minimum, each share certificate must state on its
24face all of the following:
   25a.  The name of the corporation and that it is organized
26under the law of this state.
   27b.  The name of the person to whom issued.
   28c.  The number and class of shares and the designation of the
29series, if any, the certificate represents.
   303.  a.  If the corporation is authorized to issue different
31classes of shares or series of shares within a class, the
32front or back of each certificate must summarize all of the
33following:
   34(1)  The preferences, rights, and limitations applicable to
35each class and series.
-60-
   1(2)  Any variations in preferences, rights, and limitations
2among the holders of the same class or series.
   3(3)  The authority of the board of directors to determine the
4terms of future classes or series.
   5b.  Alternatively, each certificate may state conspicuously
6on its front or back that the corporation will furnish the
7shareholder this information on request in writing and without
8charge.
   94.  Each share certificate must be signed by two officers
10designated in the bylaws.
   115.  If the person who signed a share certificate no longer
12holds office when the certificate is issued, the certificate
13is nevertheless valid.
14   Sec. 53.  Section 490.626, Code 2021, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.626  Shares without certificates.
   171.  Unless the articles of incorporation or bylaws provide
18otherwise, the board of directors of a corporation may
19authorize the issuance of some or all of the shares of any
20or all of its classes or series without certificates. The
21authorization does not affect shares already represented by
22certificates until they are surrendered to the corporation.
   232.  Within a reasonable time after the issuance or transfer
24of shares without certificates, the corporation shall deliver
25to the shareholder a written statement of the information
26required on certificates by section 490.625, subsections 2 and
273, and, if applicable, section 490.627.
28   Sec. 54.  Section 490.627, Code 2021, is amended by striking
29the section and inserting in lieu thereof the following:
   30490.627  Restriction on transfer of shares.
   311.  The articles of incorporation, the bylaws, an agreement
32among shareholders, or an agreement between shareholders
33and the corporation may impose restrictions on the transfer
34or registration of transfer of shares of the corporation.
35A restriction does not affect shares issued before the
-61-1restriction was adopted unless the holders of the shares are
2parties to the restriction agreement or voted in favor of the
3restriction.
   42.  A restriction on the transfer or registration of transfer
5of shares is valid and enforceable against the holder or a
6transferee of the holder if the restriction is authorized
7by this section and its existence is noted conspicuously
8on the front or back of the certificate or is contained
9in the information statement required by section 490.626,
10subsection 2. Unless so noted, or contained, a restriction
11is not enforceable against a person without knowledge of the
12restriction.
   133.  A restriction on the transfer or registration of transfer
14of shares is authorized for any of the following purposes:
   15a.  To maintain the corporation’s status when it is dependent
16on the number or identity of its shareholders.
   17b.  To preserve exemptions under federal or state securities
18law.
   19c.  For any other reasonable purpose.
   204.  A restriction on the transfer or registration of transfer
21of shares may do any of the following:
   22a.  Obligate the shareholder first to offer the corporation
23or other persons, separately, consecutively, or simultaneously,
24an opportunity to acquire the restricted shares.
   25b.  Obligate the corporation or other persons, separately,
26consecutively, or simultaneously, to acquire the restricted
27shares.
   28c.  Require the corporation, the holders of any class or
29series of its shares, or other persons to approve the transfer
30of the restricted shares, if the requirement is not manifestly
31unreasonable.
   32d.  Prohibit the transfer of the restricted shares to
33designated persons or classes of persons, if the prohibition
34is not manifestly unreasonable.
   355.  As used in this section, “shares” includes a security
-62-1convertible into or carrying a right to subscribe for or
2acquire shares.
3   Sec. 55.  Section 490.630, Code 2021, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.630  Shareholders’ preemptive rights.
   61.  The shareholders of a corporation do not have a
7preemptive right to acquire the corporation’s unissued shares
8except to the extent the articles of incorporation so provide.
   92.  A statement included in the articles of incorporation
10that “the corporation elects to have preemptive rights”, or
11words of similar effect, means that the following principles
12apply except to the extent the articles of incorporation
13expressly provide otherwise:
   14a.  The shareholders of the corporation have a preemptive
15right, granted on uniform terms and conditions prescribed
16by the board of directors to provide a fair and reasonable
17opportunity to exercise the right, to acquire proportional
18amounts of the corporation’s unissued shares upon the decision
19of the board of directors to issue them.
   20b.  A preemptive right may be waived by a shareholder. A
21waiver evidenced by a writing is irrevocable even though it is
22not supported by consideration.
   23c.  There is no preemptive right with respect to any of the
24following:
   25(1)  Shares issued as compensation to directors, officers,
26employees, or agents of the corporation, its subsidiaries, or
27its affiliates.
   28(2)  Shares issued to satisfy conversion or option rights
29created to provide compensation to directors, officers,
30employees, or agents of the corporation, its subsidiaries, or
31its affiliates.
   32(3)  Shares authorized in the articles of incorporation
33that are issued within six months from the effective date of
34incorporation.
   35(4)  Shares sold otherwise than for cash.
-63-
   1d.  Holders of shares of any class or series without voting
2power but with preferential rights to distributions have no
3preemptive rights with respect to shares of any class or
4series.
   5e.  Holders of shares of any class or series with voting
6power but without preferential rights to distributions have no
7preemptive rights with respect to shares of any class or series
8with preferential rights to distributions unless the shares
9with preferential rights are convertible into or carry a right
10to subscribe for or acquire the shares without preferential
11rights.
   12f.  Shares subject to preemptive rights that are not acquired
13by shareholders may be issued to any person for a period of one
14year after being offered to shareholders at a consideration
15set by the board of directors that is not lower than the
16consideration set for the exercise of preemptive rights. An
17offer at a lower consideration or after the expiration of one
18year is subject to the shareholders’ preemptive rights.
   193.  As used in this section, “shares” includes a security
20convertible into or carrying a right to subscribe for or
21acquire shares.
22   Sec. 56.  Section 490.640, Code 2021, is amended by striking
23the section and inserting in lieu thereof the following:
   24490.640  Distribution to shareholders.
   251.  A board of directors may authorize and the corporation
26may make distributions to its shareholders subject to
27restriction by the articles of incorporation and the limitation
28in subsection 3.
   292.  The board of directors may fix the record date for
30determining shareholders entitled to a distribution, which
31date shall not be retroactive. If the board of directors does
32not fix a record date for determining shareholders entitled
33to a distribution, other than one involving a purchase,
34redemption, or other acquisition of the corporation’s shares,
35the record date is the date the board of directors authorizes
-64-1the distribution.
   23.  A distribution shall not be made if, after giving it
3effect, any of the following would result:
   4a.  The corporation would not be able to pay its debts as
5they become due in the usual course of business.
   6b.  The corporation’s total assets would be less than
7the sum of its total liabilities plus, unless the articles
8of incorporation permit otherwise, the amount that would be
9needed, if the corporation were to be dissolved at the time
10of the distribution, to satisfy the preferential rights upon
11dissolution of shareholders whose preferential rights are
12superior to those receiving the distribution.
   134.  The board of directors may base a determination
14that a distribution is not prohibited under subsection 3
15either on financial statements prepared on the basis of
16accounting practices and principles that are reasonable in the
17circumstances or on a fair valuation or other method that is
18reasonable in the circumstances.
   195.  Except as provided in subsection 7, the effect of a
20distribution under subsection 3 is measured as follows:
   21a.  In the case of distribution by purchase, redemption,
22or other acquisition of the corporation’s shares, as of the
23earlier of the following:
   24(1)  The date cash or other property is transferred or debt
25to a shareholder is incurred by the corporation.
   26(2)  The date the shareholder ceases to be a shareholder with
27respect to the acquired shares.
   28b.  In the case of any other distribution of indebtedness, as
29of the date the indebtedness is distributed.
   30c.  In all other cases, as of the following:
   31(1)  The date the distribution is authorized if the payment
32occurs within one hundred twenty days after the date of
33authorization.
   34(2)  The date the payment is made if it occurs more than one
35hundred twenty days after the date of authorization.
-65-
   16.  A corporation’s indebtedness to a shareholder incurred
2by reason of a distribution made in accordance with this
3section is at parity with the corporation’s indebtedness to its
4general, unsecured creditors except to the extent subordinated
5by agreement.
   67.  Indebtedness of a corporation, including indebtedness
7issued as a distribution, is not considered a liability for
8purposes of determinations under subsection 3 if its terms
9provide that payment of principal and interest are made
10only if and to the extent that payment of a distribution to
11shareholders could then be made under this section. If such
12indebtedness is issued as a distribution, each payment of
13principal or interest is treated as a distribution, the effect
14of which is measured on the date the payment is actually made.
   158.  This section shall not apply to distributions in
16liquidation under subchapter XIV.
17   Sec. 57.  Section 490.701, Code 2021, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.701  Annual meeting.
   201.  Unless directors are elected by written consent in
21lieu of an annual meeting as permitted by section 490.704, a
22corporation shall hold a meeting of shareholders annually, at a
23time stated in or fixed in accordance with the bylaws, at which
24directors shall be elected.
   252.  Unless the board of directors determines to hold the
26meeting solely by means of remote communication in accordance
27with section 490.709, subsection 3, annual meetings may be held
28as follows:
   29a.  In or out of this state at the place stated in or fixed
30in accordance with the bylaws.
   31b.  If no place is stated in or fixed in accordance with the
32bylaws, at the corporation’s principal office.
   333.  The failure to hold an annual meeting at the time stated
34in or fixed in accordance with a corporation’s bylaws does not
35affect the validity of any corporate action.
-66-
1   Sec. 58.  Section 490.702, Code 2021, is amended by striking
2the section and inserting in lieu thereof the following:
   3490.702  Special meeting.
   41.  Except as provided in subsection 5, a corporation shall
5hold a special meeting of shareholders upon the occurrence of
6any of the following:
   7a.  On call of its board of directors or the person or
8persons authorized to do so by the articles of incorporation
9or bylaws.
   10b.  If the shareholders holding at least ten percent of
11all the votes entitled to be cast on an issue proposed to be
12considered at the proposed special meeting sign, date, and
13deliver to the corporation one or more written demands for the
14meeting describing the purpose or purposes for which it is
15to be held, provided that the articles of incorporation may
16fix a lower percentage or a higher percentage not exceeding
17twenty-five percent of all the votes entitled to be cast on any
18issue proposed to be considered. Unless otherwise provided in
19the articles of incorporation, a written demand for a special
20meeting may be revoked by a writing to that effect received
21by the corporation before the receipt by the corporation of
22demands sufficient in number to require the holding of a
23special meeting.
   242.  If not otherwise fixed under section 490.703 or 490.707,
25the record date for determining shareholders entitled to
26demand a special meeting shall be the first date on which a
27signed shareholder demand is delivered to the corporation. No
28written demand for a special meeting shall be effective unless,
29within sixty days of the earliest date on which such a demand
30delivered to the corporation as required by this section was
31signed, written demands signed by shareholders holding at least
32the percentage of votes specified in or fixed in accordance
33with subsection 1, paragraph “b”, have been delivered to the
34corporation.
   353.  Unless the board of directors determines to hold the
-67-1meeting solely by remote participation in accordance with
2section 490.709, subsection 3, special meetings of shareholders
3may be held as follows:
   4a.  In or out of this state at the place stated in or fixed
5in accordance with the bylaws.
   6b.  If no place is so stated in or fixed in accordance with
7the bylaws, at the corporation’s principal office.
   84.  Only business within the purpose or purposes described in
9the meeting notice required by section 490.705, subsection 3,
10may be conducted at a special meeting of shareholders.
   115.  Notwithstanding subsections 1 through 4, a corporation
12that has a class of equity securities registered pursuant to
13section 12 of the federal Securities Exchange Act of 1934 is
14required to hold a special meeting only upon the occurrence of
15any of the following:
   16a.  On call of its board of directors or the person or
17persons authorized to call a special meeting by the articles of
18incorporation or bylaws.
   19b.  If the holders of at least fifty percent of all the votes
20entitled to be cast on any issue proposed to be considered at
21the proposed special meeting sign, date, and deliver to the
22corporation’s secretary one or more written demands for the
23meeting describing the purpose or purposes for which it is to
24be held.
25   Sec. 59.  Section 490.703, Code 2021, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.703  Court-ordered meeting.
   281.  The district court of the county where a corporation’s
29principal office, or, if none in this state, its registered
30office, is located may summarily order a meeting to be held
31pursuant to any of the following:
   32a.  On application of any shareholder of the corporation if
33an annual meeting was not held or action by written consent in
34lieu of an annual meeting did not become effective within the
35earlier of six months after the end of the corporation’s fiscal
-68-1year or fifteen months after its last annual meeting.
   2b.  On application of one or more shareholders who signed a
3demand for a special meeting valid under section 490.702 if any
4of the following applies:
   5(1)  Notice of the special meeting was not given within
6thirty days after the first day on which the requisite number
7of such demands have been delivered to the corporation.
   8(2)  The special meeting was not held in accordance with the
9notice.
   102.  The court may fix the time and place of the meeting,
11determine the shares entitled to participate in the meeting,
12specify a record date or dates for determining shareholders
13entitled to notice of and to vote at the meeting, prescribe the
14form and content of the meeting notice, fix the quorum required
15for specific matters to be considered at the meeting, or direct
16that the shares represented at the meeting constitute a quorum
17for action on those matters, and enter other orders necessary
18to accomplish the purpose or purposes of the meeting.
   193.  For purposes of subsection 1, paragraph “a”,
20shareholder” means a record shareholder, a beneficial
21shareholder, and an unrestricted voting trust beneficial owner.
22   Sec. 60.  Section 490.704, Code 2021, is amended by striking
23the section and inserting in lieu thereof the following:
   24490.704  Action without meeting.
   251.  Unless otherwise provided in the articles of
26incorporation, any action required or permitted by this chapter
27to be taken at a shareholders’ meeting may be taken without
28a meeting or vote, and, except as provided in subsection 5,
29without prior notice, if one or more written consents bearing
30the date of signature and describing the action taken are
31signed by the holders of outstanding shares having not less
32than ninety percent of the votes entitled to be cast at a
33meeting at which all shares entitled to vote on the action were
34present and voted, and are delivered to the corporation for
35inclusion in the minutes or filing with the corporate records.
-69-
   12.  Except in the case of a corporation that has a class
2of equity securities registered pursuant to section 12 of
3the federal Securities Exchange Act of 1934, the articles of
4incorporation may provide that any action required or permitted
5by this chapter to be taken at a shareholders’ meeting may be
6taken without a meeting, and without prior notice, if consents
7in writing setting forth the action so taken are signed by
8the holders of outstanding shares having not less than the
9minimum number of votes that would be required to authorize
10or take the action at a meeting at which all shares entitled
11to vote on the action were present and voted. However, if a
12corporation’s articles of incorporation authorize shareholders
13to cumulate their votes when electing directors pursuant to
14section 490.728, directors shall not be elected by less than
15unanimous written consent. A written consent must bear the
16date of signature of the shareholder who signs the consent and
17be delivered to the corporation for filing by the corporation
18with the minutes or corporate records.
   193.  If not otherwise fixed under section 490.707 and if prior
20action by the board of directors is not required respecting
21the action to be taken without a meeting, the record date for
22determining the shareholders entitled to take action without
23a meeting shall be the first date on which a signed written
24consent is delivered to the corporation. If not otherwise
25fixed under section 490.707, and if prior action by the board
26of directors is required respecting the action to be taken
27without a meeting, the record date shall be the close of
28business on the day the resolution of the board of directors
29taking such prior action is adopted. No written consent
30shall be effective to take the corporate action referred to
31therein unless, within sixty days of the earliest date on
32which a consent delivered to the corporation as required by
33this section was signed, written consents signed by sufficient
34shareholders to take the action have been delivered to the
35corporation. A written consent may be revoked by a writing
-70-1to that effect delivered to the corporation before unrevoked
2written consents sufficient in number to take the corporate
3action have been delivered to the corporation.
   44.  A consent signed pursuant to the provisions of this
5section has the effect of a vote taken at a meeting and may
6be described as such in any document. Unless the articles
7of incorporation, bylaws, or a resolution of the board of
8directors provides for a reasonable delay to permit tabulation
9of written consents, the action taken by written consent
10shall be effective when written consents signed by sufficient
11shareholders to take the action have been delivered to the
12corporation.
   135.  a.  If this chapter requires that notice of a proposed
14action be given to nonvoting shareholders and the action is
15to be taken by written consent of the voting shareholders,
16the corporation shall give its nonvoting shareholders written
17notice of the action not more than ten days after any of the
18following:
   19(1)  Written consents sufficient to take the action have been
20delivered to the corporation.
   21(2)  Such later date that tabulation of consents is completed
22pursuant to an authorization under subsection 4.
   23b.  The notice must reasonably describe the action taken and
24contain or be accompanied by the same material that, under any
25provision of this chapter, would have been required to be sent
26to nonvoting shareholders in a notice of a meeting at which the
27proposed action would have been submitted to the shareholders
28for action.
   296.  a.  If action is taken by less than unanimous written
30consent of the voting shareholders, the corporation shall give
31its nonconsenting voting shareholders written notice of the
32action not more than ten days after any of the following:
   33(1)  Written consents sufficient to take the action have been
34delivered to the corporation.
   35(2)  Such later date that tabulation of consents is completed
-71-1pursuant to an authorization under subsection 4.
   2b.  The notice must reasonably describe the action taken
3and contain or be accompanied by the same material that, under
4any provision of this chapter, would have been required to be
5sent to voting shareholders in a notice of a meeting at which
6the action would have been submitted to the shareholders for
7action.
   87.  The notice requirements in subsections 5 and 6 shall not
9delay the effectiveness of actions taken by written consent,
10and a failure to comply with such notice requirements shall
11not invalidate actions taken by written consent, provided that
12this subsection shall not be deemed to limit judicial power
13to fashion any appropriate remedy in favor of a shareholder
14adversely affected by a failure to give such notice within the
15required time period.
16   Sec. 61.  Section 490.705, Code 2021, is amended by striking
17the section and inserting in lieu thereof the following:
   18490.705  Notice of meeting.
   191.  A corporation shall notify shareholders of the date,
20time, and place of each annual and special shareholders’
21meeting no fewer than ten nor more than sixty days before
22the meeting date. If the board of directors has authorized
23participation by means of remote communication pursuant to
24section 490.709 for holders of any class or series of shares,
25the notice to the holders of such class or series of shares
26must describe the means of remote communication to be used.
27The notice must include the record date for determining the
28shareholders entitled to vote at the meeting, if such date is
29different from the record date for determining shareholders
30entitled to notice of the meeting. Unless this chapter or the
31articles of incorporation require otherwise, the corporation
32is required to give notice only to shareholders entitled to
33vote at the meeting as of the record date for determining the
34shareholders entitled to notice of the meeting.
   352.  Unless this chapter or the articles of incorporation
-72-1require otherwise, the notice of an annual meeting of
2shareholders need not include a description of the purpose or
3purposes for which the meeting is called.
   43.  Notice of a special meeting of shareholders must include
5a description of the purpose or purposes for which the meeting
6is called.
   74.  If not otherwise fixed under section 490.703 or 490.707,
8the record date for determining shareholders entitled to notice
9of and to vote at an annual or special shareholders’ meeting is
10the day before the first notice is delivered to shareholders.
   115.  Unless the bylaws require otherwise, if an annual or
12special shareholders’ meeting is adjourned to a different
13date, time, or place, if any, notice need not be given of the
14new date, time, or place, if any, if the new date, time, or
15place, if any, is announced at the meeting before adjournment.
16However, if a new record date for the adjourned meeting is or
17must be fixed under section 490.707, notice of the adjourned
18meeting shall be given under this section to shareholders
19entitled to vote at such adjourned meeting as of the record
20date fixed for notice of such adjourned meeting.
21   Sec. 62.  Section 490.706, Code 2021, is amended by striking
22the section and inserting in lieu thereof the following:
   23490.706  Waiver of notice.
   241.  A shareholder may waive any notice required by this
25chapter, or the articles of incorporation or bylaws, before or
26after the date and time stated in the notice. The waiver must
27be in writing, be signed by the shareholder entitled to the
28notice, and be delivered to the corporation for filing by the
29corporation with the minutes or corporate records.
   302.  A shareholder’s attendance at a meeting does all of the
31following:
   32a.  Waives objection to lack of notice or defective notice
33of the meeting, unless the shareholder at the beginning of the
34meeting objects to holding the meeting or transacting business
35at the meeting.
-73-
   1b.  Waives objection to consideration of a particular matter
2at the meeting that is not within the purpose or purposes
3described in the meeting notice, unless the shareholder objects
4to considering the matter when it is presented.
5   Sec. 63.  Section 490.707, Code 2021, is amended by striking
6the section and inserting in lieu thereof the following:
   7490.707  Record date for meeting.
   81.  The bylaws may fix or provide the manner of fixing the
9record date or dates for one or more voting groups to determine
10the shareholders entitled to notice of a shareholders’ meeting,
11to demand a special meeting, to vote, or to take any other
12action. If the bylaws do not fix or provide for fixing a record
13date, the board of directors may fix the record date.
   142.  A record date fixed under this section shall not be more
15than seventy days before the meeting or action requiring a
16determination of shareholders and shall not be retroactive.
   173.  A determination of shareholders entitled to notice of
18or to vote at a shareholders’ meeting is effective for any
19adjournment of the meeting unless the board of directors fixes
20a new record date or dates, which it shall do if the meeting is
21adjourned to a date more than one hundred twenty days after the
22date fixed for the original meeting.
   234.  If a court orders a meeting adjourned to a date more than
24one hundred twenty days after the date fixed for the original
25meeting, it may provide that the original record date or dates
26continue in effect or it may fix a new record date or dates.
   275.  The record date or dates for a shareholders’ meeting
28fixed by or in the manner provided in the bylaws or by the
29board of directors shall be the record date for determining
30shareholders entitled both to notice of and to vote at
31the shareholders’ meeting unless, in the case of a record
32date fixed by the board of directors and to the extent not
33prohibited by the bylaws, the board, at the time it fixes the
34record date for shareholders entitled to notice of the meeting,
35fixes a later record date on or before the date of the meeting
-74-1to determine the shareholders entitled to vote at the meeting.
2   Sec. 64.  Section 490.708, Code 2021, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.708  Conduct of meeting.
   51.  At each meeting of shareholders, a chair shall preside.
6The chair shall be appointed as provided in the bylaws or, in
7the absence of such provision, by the board of directors.
   82.  The chair, unless the articles of incorporation or bylaws
9provide otherwise, shall determine the order of business and
10shall have the authority to establish rules for the conduct of
11the meeting.
   123.  Any rules adopted for, and the conduct of, the meeting
13shall be fair to shareholders.
   144.  The chair of the meeting shall announce at the meeting
15when the polls close for each matter voted upon. If no
16announcement is made, the polls shall be deemed to have closed
17upon the final adjournment of the meeting. After the polls
18close, no ballots, proxies, or votes nor any revocations or
19changes to such ballots, proxies, or votes may be accepted.
20   Sec. 65.  Section 490.709, Code 2021, is amended by striking
21the section and inserting in lieu thereof the following:
   22490.709  Remote participation in shareholders’ meetings.
   231.  Shareholders of any class or series of shares may
24participate in any meeting of shareholders by means of remote
25communication to the extent the board of directors authorizes
26such participation for such class or series. Participation as
27a shareholder by means of remote communication shall be subject
28to such guidelines and procedures as the board of directors
29adopts, and shall be in conformity with subsection 2.
   302.  Shareholders participating in a shareholders’ meeting
31by means of remote communication shall be deemed present and
32may vote at such a meeting if the corporation has implemented
33reasonable measures to do all of the following:
   34a.  Verify that each person participating remotely as a
35shareholder is a shareholder.
-75-
   1b.  Provide such shareholders a reasonable opportunity to
2participate in the meeting and to vote on matters submitted to
3the shareholders, including an opportunity to communicate, and
4to read or hear the proceedings of the meeting, substantially
5concurrently with such proceedings.
   63.  Unless the bylaws require the meeting of shareholders to
7be held at a place, the board of directors may determine that
8any meeting of shareholders shall not be held at any place and
9shall instead be held solely by means of remote communication,
10but only if the corporation implements the measures specified
11in subsection 2.
12   Sec. 66.  Section 490.720, Code 2021, is amended by striking
13the section and inserting in lieu thereof the following:
   14490.720  Shareholders’ list for meeting.
   151.  After fixing a record date for a meeting, a corporation
16shall prepare an alphabetical list of the names of all its
17shareholders who are entitled to notice of a shareholders’
18meeting. If the board of directors fixes a different record
19date under section 490.707, subsection 5, to determine the
20shareholders entitled to vote at the meeting, a corporation
21also shall prepare an alphabetical list of the names of all
22its shareholders who are entitled to vote at the meeting. A
23list must be arranged by voting group and within each voting
24group by class or series of shares, and show the address of and
25number of shares held by each shareholder. Nothing contained
26in this subsection shall require the corporation to include
27on such list the electronic mail address or other electronic
28contact information of a shareholder.
   292.  a.  The shareholders’ list for notice shall be available
30for inspection by any shareholder, beginning two business
31days after notice of the meeting is given for which the
32list was prepared and continuing through the meeting. The
33shareholders’ list for notice shall be made available at any
34of the following:
   35(1)  The corporation’s principal office or at a place
-76-1identified in the meeting notice in the city where the meeting
2will be held.
   3(2)  A reasonably accessible electronic network, provided
4that the information required to gain access to such list is
5provided with the notice of the meeting. In the event that
6the corporation determines to make the list available on
7an electronic network, the corporation may take reasonable
8steps to ensure that such information is available only to
9shareholders of the corporation.
   10b.  A shareholders’ list for voting shall be similarly
11available for inspection promptly after the record date for
12voting. A shareholder, or the shareholder’s agent or attorney,
13is entitled on written demand to inspect and, subject to the
14requirements of section 490.1602, subsection 3, to copy a list,
15during regular business hours and at the shareholder’s expense,
16during the period it is available for inspection.
   173.  If the meeting is to be held at a place, the corporation
18shall make the list of shareholders entitled to vote available
19at the meeting, and any shareholder, or the shareholder’s
20agent or attorney, is entitled to inspect the list at any time
21during the meeting or any adjournment. If the meeting is to be
22held solely by means of remote communication, then such list
23shall also be open to such inspection during the meeting on a
24reasonably accessible electronic network, and the information
25required to access such list shall be provided with the notice
26of the meeting.
   274.  If the corporation refuses to allow a shareholder, or
28the shareholder’s agent or attorney, to inspect a shareholders’
29list before or at the meeting, or copy a list as permitted
30by subsection 2, the district court of the county where a
31corporation’s principal office or, if none in this state,
32its registered office, is located, on application of the
33shareholder, may summarily order the inspection or copying at
34the corporation’s expense and may postpone the meeting for
35which the list was prepared until the inspection or copying is
-77-1complete.
   25.  Refusal or failure to prepare or make available the
3shareholders’ list does not affect the validity of action taken
4at the meeting.
5   Sec. 67.  Section 490.721, Code 2021, is amended by striking
6the section and inserting in lieu thereof the following:
   7490.721  Voting entitlement of shares.
   81.  Except as provided in subsections 2 and 4 or unless the
9articles of incorporation provide otherwise, each outstanding
10share, regardless of class or series, is entitled to one vote
11on each matter voted on at a shareholders’ meeting. Only
12shares are entitled to vote.
   132.  Shares of a corporation are not entitled to vote if they
14are owned by or otherwise belong to the corporation directly,
15or indirectly through an entity of which a majority of the
16voting power is held directly or indirectly by the corporation
17or which is otherwise controlled by the corporation.
   183.  Shares held by the corporation in a fiduciary capacity
19for the benefit of any person are entitled to vote unless
20they are held for the benefit of, or otherwise belong to, the
21corporation directly, or indirectly through an entity of which
22a majority of the voting power is held directly or indirectly
23by the corporation or which is otherwise controlled by the
24corporation.
   254.  Redeemable shares are not entitled to vote after
26delivery of written notice of redemption is effective and a
27sum sufficient to redeem the shares has been deposited with a
28bank, trust company, or other financial institution under an
29irrevocable obligation to pay the holders the redemption price
30on surrender of the shares.
   315.  As used in this section, “voting power” means the current
32power to vote in the election of directors of a corporation or
33to elect, select, or appoint governors of another entity.
34   Sec. 68.  Section 490.722, Code 2021, is amended by striking
35the section and inserting in lieu thereof the following:
-78-   1490.722  Proxies.
   21.  A shareholder may vote the shareholder’s shares in person
3or by proxy.
   42.  A shareholder, or the shareholder’s agent or
5attorney-in-fact, may appoint a proxy to vote or otherwise
6act for the shareholder by signing an appointment form, or
7by an electronic transmission. An electronic transmission
8must contain or be accompanied by information from which the
9recipient can determine the date of the transmission and that
10the transmission was authorized by the sender or the sender’s
11agent or attorney-in-fact.
   123.  An appointment of a proxy is effective when a signed
13appointment form or an electronic transmission of the
14appointment is received by the inspector of election or
15the officer or agent of the corporation authorized to count
16votes. An appointment is valid for the term provided in the
17appointment form, and, if no term is provided, is valid for
18eleven months unless the appointment is irrevocable under
19subsection 4.
   204.  An appointment of a proxy is revocable unless the
21appointment form or electronic transmission states that it is
22irrevocable and the appointment is coupled with an interest.
23Appointments coupled with an interest include, but are not
24limited to, the appointment of any of the following:
   25a.  A pledgee.
   26b.  A person who purchased or agreed to purchase the shares.
   27c.  A creditor of the corporation who extended the
28corporation credit under terms requiring the appointment.
   29d.  An employee of the corporation whose employment contract
30requires the appointment.
   31e.  A party to a voting agreement created under section
32490.731.
   335.  The death or incapacity of the shareholder appointing
34a proxy does not affect the right of the corporation to
35accept the proxy’s authority unless notice of the death or
-79-1incapacity is received by the secretary or other officer or
2agent authorized to tabulate votes before the proxy exercises
3the proxy’s authority under the appointment.
   46.  An appointment made irrevocable under subsection 4
5is revoked when the interest with which it is coupled is
6extinguished.
   77.  Unless it otherwise provides, an appointment made
8irrevocable under subsection 4 continues in effect after
9a transfer of the shares and a transferee takes subject
10to the appointment, except that a transferee for value of
11shares subject to an irrevocable appointment may revoke the
12appointment if the transferee did not know of its existence
13when acquiring the shares and the existence of the irrevocable
14appointment was not noted conspicuously on the certificate
15representing the shares or on the information statement for
16shares without certificates.
   178.  Subject to section 490.724 and to any express limitation
18on the proxy’s authority stated in the appointment form or
19electronic transmission, a corporation is entitled to accept
20the proxy’s vote or other action as that of the shareholder
21making the appointment.
22   Sec. 69.  Section 490.723, Code 2021, is amended by striking
23the section and inserting in lieu thereof the following:
   24490.723  Shares held by intermediaries and nominees.
   251.  A corporation’s board of directors may establish a
26procedure under which a person on whose behalf shares are
27registered in the name of an intermediary or nominee may elect
28to be treated by the corporation as the record shareholder by
29filing with the corporation a beneficial ownership certificate.
30The terms, conditions, and limitations of this treatment shall
31be specified in the procedure. To the extent such person is
32treated under such procedure as having rights or privileges
33that the record shareholder otherwise would have, the record
34shareholder shall not have those rights or privileges.
   352.  The procedure must specify all of the following:
-80-
   1a.  The types of intermediaries or nominees to which it
2applies.
   3b.  The rights or privileges that the corporation recognizes
4in a person with respect to whom a beneficial ownership
5certificate is filed.
   6c.  The manner in which the procedure is selected which must
7include that the beneficial ownership certificate be signed or
8assented to by or on behalf of the record shareholder and the
9person on whose behalf the shares are held.
   10d.  The information that must be provided when the procedure
11is selected.
   12e.  The period for which selection of the procedure is
13effective.
   14f.  Requirements for notice to the corporation with respect
15to the arrangement.
   16g.  The form and contents of the beneficial ownership
17certificate.
   183.  The procedure may specify any other aspects of the rights
19and duties created by the filing of a beneficial ownership
20certificate.
21   Sec. 70.  Section 490.724, Code 2021, is amended by striking
22the section and inserting in lieu thereof the following:
   23490.724  Acceptance of votes and other instruments.
   241.  If the name signed on a vote, ballot, consent, waiver,
25shareholder demand, or proxy appointment corresponds to the
26name of a shareholder, the corporation, if acting in good
27faith, is entitled to accept the vote, ballot, consent, waiver,
28shareholder demand, or proxy appointment and give it effect as
29the act of the shareholder.
   302.  If the name signed on a vote, ballot, consent, waiver,
31shareholder demand, or proxy appointment does not correspond to
32the name of its shareholder, the corporation, if acting in good
33faith, is nevertheless entitled to accept the vote, ballot,
34consent, waiver, shareholder demand, or proxy appointment and
35give it effect as the act of the shareholder if any of the
-81-1following applies:
   2a.  The shareholder is an entity and the name signed purports
3to be that of an officer or agent of the entity.
   4b.  The name signed purports to be that of an administrator,
5executor, guardian, or conservator representing the shareholder
6and, if the corporation requests, evidence of fiduciary status
7acceptable to the corporation has been presented with respect
8to the vote, ballot, consent, waiver, shareholder demand, or
9proxy appointment.
   10c.  The name signed purports to be that of a receiver
11or trustee in bankruptcy of the shareholder and, if the
12corporation requests, evidence of this status acceptable
13to the corporation has been presented with respect to the
14vote, ballot, consent, waiver, shareholder demand, or proxy
15appointment.
   16d.  The name signed purports to be that of a pledgee,
17beneficial owner, or attorney-in-fact of the shareholder
18and, if the corporation requests, evidence acceptable to
19the corporation of the signatory’s authority to sign for
20the shareholder has been presented with respect to the
21vote, ballot, consent, waiver, shareholder demand, or proxy
22appointment.
   23e.  Two or more persons are the shareholder as co-tenants or
24fiduciaries and the name signed purports to be the name of at
25least one of the co-owners and the person signing appears to be
26acting on behalf of all the co-owners.
   273.  The corporation is entitled to reject a vote, ballot,
28consent, waiver, shareholder demand, or proxy appointment if
29the person authorized to accept or reject such instrument,
30acting in good faith, has reasonable basis for doubt about
31the validity of the signature on it or about the signatory’s
32authority to sign for the shareholder.
   334.  Neither the corporation or any person authorized by it,
34nor an inspector of election appointed under section 490.729,
35that accepts or rejects a vote, ballot, consent, waiver,
-82-1shareholder demand, or proxy appointment in good faith and
2in accordance with the standards of this section or section
3490.722, subsection 2, is liable in damages to the shareholder
4for the consequences of the acceptance or rejection.
   55.  Corporate action based on the acceptance or rejection
6of a vote, ballot, consent, waiver, shareholder demand, or
7proxy appointment under this section is valid unless a court of
8competent jurisdiction determines otherwise.
   96.  If an inspector of election has been appointed under
10section 490.729, the inspector of election also has the
11authority to request information and make determinations
12under subsections 1, 2, and 3. Any determination made by the
13inspector of election under those subsections is controlling.
14   Sec. 71.  Section 490.725, Code 2021, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.725  Quorum and voting requirements for voting groups.
   171.  Shares entitled to vote as a separate voting group
18may take action on a matter at a meeting only if a quorum of
19those shares exists with respect to that matter. Unless the
20articles of incorporation or bylaws provide otherwise, shares
21representing a majority of the votes entitled to be cast on
22the matter by the voting group constitutes a quorum of that
23voting group for action on that matter. Whenever this chapter
24requires a particular quorum for a specified action, the
25articles of incorporation shall not provide for a lower quorum.
   262.  Once a share is represented for any purpose at a meeting,
27it is deemed present for quorum purposes for the remainder of
28the meeting and for any adjournment of that meeting unless a
29new record date is or must be fixed for that adjourned meeting.
   303.  If a quorum exists, action on a matter, other than the
31election of directors, by a voting group is approved if the
32votes cast within the voting group favoring the action exceed
33the votes cast opposing the action, unless the articles of
34incorporation require a greater number of affirmative votes.
   354.  An amendment of the articles of incorporation adding,
-83-1changing, or deleting a quorum or voting requirement for a
2voting group greater than specified in subsection 1 or 3 is
3governed by section 490.727.
   45.  The election of directors is governed by section 490.728.
   56.  Whenever a provision of this chapter provides for voting
6of classes or series as separate voting groups, the rules
7provided in section 490.1004, subsection 3, for amendments of
8the articles of incorporation apply to that provision.
9   Sec. 72.  Section 490.726, Code 2021, is amended by striking
10the section and inserting in lieu thereof the following:
   11490.726  Action by single or multiple voting groups.
   121.  If the articles of incorporation or this chapter provide
13for voting by a single voting group on a matter, action on
14that matter is taken when voted upon by that voting group as
15provided in section 490.725.
   162.  If the articles of incorporation or this chapter provide
17for voting by two or more voting groups on a matter, action
18on that matter is taken only when voted upon by each of those
19voting groups counted separately as provided in section
20490.725. Action may be taken by different voting groups on a
21matter at different times.
22   Sec. 73.  Section 490.727, Code 2021, is amended by striking
23the section and inserting in lieu thereof the following:
   24490.727  Modifying quorum or voting requirements.
   25An amendment to the articles of incorporation or bylaws
26that adds, changes, or deletes a quorum or voting requirement
27shall meet the same quorum requirement and be adopted by the
28same vote and voting groups required to take action under the
29quorum and voting requirements then in effect or proposed to be
30adopted, whichever is greater.
31   Sec. 74.  Section 490.728, Code 2021, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.728  Voting for directors — cumulative voting.
   341.  Unless otherwise provided in the articles of
35incorporation, directors are elected by a plurality of the
-84-1votes cast by the shares entitled to vote in the election at a
2meeting at which a quorum is present.
   32.  Shareholders do not have a right to cumulate their votes
4for directors unless the articles of incorporation so provide.
   53.  A statement included in the articles of incorporation
6that “[all] [a designated voting group of] shareholders are
7entitled to cumulate their votes for directors”, or words of
8similar import, means that the shareholders designated are
9entitled to multiply the number of votes they are entitled to
10cast by the number of directors for whom they are entitled to
11vote and cast the product for a single candidate or distribute
12the product among two or more candidates.
   134.  Shares otherwise entitled to vote cumulatively shall not
14be voted cumulatively at a particular meeting unless any of the
15following applies:
   16a.  The meeting notice or proxy statement accompanying
17the notice states conspicuously that cumulative voting is
18authorized.
   19b.  A shareholder who has the right to cumulate the
20shareholder’s votes gives notice to the corporation not less
21than forty-eight hours before the time set for the meeting of
22the shareholder’s intent to cumulate votes during the meeting,
23and if one shareholder gives this notice all other shareholders
24in the same voting group participating in the election are
25entitled to cumulate their votes without giving further notice.
26   Sec. 75.  Section 490.729, Code 2021, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.729  Inspectors of election.
   291.  A corporation that has a class of equity securities
30registered pursuant to section 12 of the federal Securities
31Exchange Act of 1934 shall, and any other corporation
32may, appoint one or more inspectors to act at a meeting of
33shareholders in connection with determining voting results.
34Each inspector shall verify in writing that the inspector
35will faithfully execute the duties of inspector with strict
-85-1impartiality and according to the best of the inspector’s
2ability. An inspector may be an officer or employee of the
3corporation. The inspectors may appoint or retain other
4persons to assist the inspectors in the performance of the
5duties of inspector under subsection 2, and may rely on
6information provided by such persons and other persons,
7including those appointed to tabulate votes, unless the
8inspectors believe reliance is unwarranted.
   92.  The inspectors shall do all of the following:
   10a.  Ascertain the number of shares outstanding and the voting
11power of each.
   12b.  Determine the shares represented at a meeting.
   13c.  Determine the validity of proxy appointments and ballots.
   14d.  Count all votes.
   15e.  Make a written report of the results.
   163.  In performing their duties, the inspectors may examine
17any of the following:
   18a.  The proxy appointment forms and any other information
19provided in accordance with section 490.722, subsection 2.
   20b.  Any envelope or related writing submitted with those
21appointment forms.
   22c.  Any ballots.
   23d.  Any evidence or other information specified in section
24490.724.
   25e.  The relevant books and records of the corporation
26relating to its shareholders and their entitlement to vote,
27including any securities position list provided by a depository
28clearing agency.
   294.  a.  The inspectors also may consider other information
30that they believe is relevant and reliable for the purpose
31of performing any of the duties assigned to them pursuant to
32subsection 2, including for all of the following purposes:
   33(1)  Evaluating inconsistent, incomplete, or erroneous
34information.
   35(2)  Reconciling information submitted on behalf of banks,
-86-1brokers, their nominees, or similar persons that indicates
2more votes being cast than a proxy authorized by the record
3shareholder is entitled to cast.
   4b.  If the inspectors consider other information allowed by
5this subsection, they shall in their report under subsection
62 specify the information considered by them, including the
7purpose or purposes for which the information was considered,
8the person or persons from whom they obtained the information,
9when the information was obtained, the means by which the
10information was obtained, and the basis for the inspectors’
11belief that such information is relevant and reliable.
   125.  Determinations of law by the inspectors of election are
13subject to de novo review by a court in a proceeding under
14section 490.749 or other judicial proceeding.
15   Sec. 76.  Section 490.730, Code 2021, is amended by striking
16the section and inserting in lieu thereof the following:
   17490.730  Voting trusts.
   181.  One or more shareholders may create a voting trust,
19conferring on a trustee the right to vote or otherwise act for
20them, by signing an agreement setting out the provisions of the
21trust, which may include anything consistent with its purpose,
22and transferring their shares to the trustee. When a voting
23trust agreement is signed, the trustee shall prepare a list of
24the names and addresses of all voting trust beneficial owners,
25together with the number and class of shares each transferred
26to the trust, and deliver copies of the list and agreement to
27the corporation at its principal office.
   282.  A voting trust becomes effective on the date the first
29shares subject to the trust are registered in the trustee’s
30name.
   313.  Limits, if any, on the duration of a voting trust shall
32be as set forth in the voting trust. A voting trust that became
33effective between December 31, 1989, and June 30, 2014, both
34dates inclusive, is governed by the provisions of this section
35concerning duration then in effect, unless the voting trust
-87-1is amended to provide otherwise by unanimous agreement of the
2parties to the voting trust.
3   Sec. 77.  Section 490.731, Code 2021, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.731  Voting agreement.
   61.  Two or more shareholders may provide for the manner in
7which they will vote their shares by signing an agreement for
8that purpose. A voting agreement created under this section is
9not subject to the provisions of section 490.730.
   102.  A voting agreement created under this section is
11specifically enforceable.
12   Sec. 78.  Section 490.732, Code 2021, is amended by striking
13the section and inserting in lieu thereof the following:
   14490.732  Shareholder agreement.
   151.  An agreement among the shareholders of a corporation that
16complies with this section is effective among the shareholders
17and the corporation even though it is inconsistent with one or
18more other provisions of this chapter in that it does any of
19the following:
   20a.  Eliminates the board of directors or restricts the
21discretion or powers of the board of directors.
   22b.  Governs the authorization or making of distributions,
23regardless of whether they are in proportion to ownership of
24shares, subject to the limitations in section 490.640.
   25c.  Establishes who shall be directors or officers of the
26corporation, or their terms of office or manner of selection
27or removal.
   28d.  Governs, in general or in regard to specific matters,
29the exercise or division of voting power by or between
30the shareholders and directors or by or among any of them,
31including use of weighted voting rights or director proxies.
   32e.  Establishes the terms and conditions of any agreement for
33the transfer or use of property or the provision of services
34between the corporation and any shareholder, director, officer,
35or employee of the corporation, or among any of them.
-88-
   1f.  Transfers to one or more shareholders or other persons
2all or part of the authority to exercise the corporate powers
3or to manage the business and affairs of the corporation,
4including the resolution of any issue about which there exists
5a deadlock among directors or shareholders.
   6g.  Requires dissolution of the corporation at the request
7of one or more of the shareholders or upon the occurrence of a
8specified event or contingency.
   9h.  Otherwise governs the exercise of the corporate powers or
10the management of the business and affairs of the corporation
11or the relationship among the shareholders, the directors, and
12the corporation, or among any of them, and is not contrary to
13public policy.
   142.  An agreement authorized by this section shall satisfy all
15of the following requirements:
   16a.  Be as set forth in any of the following:
   17(1)  The articles of incorporation or bylaws and approved by
18all persons who are shareholders at the time of the agreement.
   19(2)  A written agreement that is signed by all persons who
20are shareholders at the time of the agreement and is made known
21to the corporation.
   22b.  Be subject to amendment only by all persons who are
23shareholders at the time of the amendment, unless the agreement
24provides otherwise.
   253.  The existence of an agreement authorized by this section
26shall be noted conspicuously on the front or back of each
27certificate for outstanding shares or on the information
28statement required by section 490.626, subsection 2. If at the
29time of the agreement the corporation has shares outstanding
30represented by certificates, the corporation shall recall the
31outstanding certificates and issue substitute certificates that
32comply with this subsection. The failure to note the existence
33of the agreement on the certificate or information statement
34shall not affect the validity of the agreement or any action
35taken pursuant to it. Any purchaser of shares who, at the time
-89-1of purchase, did not have knowledge of the existence of the
2agreement shall be entitled to rescission of the purchase. A
3purchaser shall be deemed to have knowledge of the existence
4of the agreement if its existence is noted on the certificate
5or information statement for the shares in compliance with
6this subsection and, if the shares are not represented by a
7certificate, the information statement is delivered to the
8purchaser at or before the time of purchase of the shares. An
9action to enforce the right of rescission authorized by this
10subsection shall be commenced within the earlier of ninety days
11after discovery of the existence of the agreement or two years
12after the time of purchase of the shares.
   134.  If the agreement ceases to be effective for any reason,
14the board of directors may, if the agreement is contained or
15referred to in the corporation’s articles of incorporation or
16bylaws, adopt an amendment to the articles of incorporation or
17bylaws, without shareholder action, to delete the agreement and
18any references to it.
   195.  An agreement authorized by this section that limits the
20discretion or powers of the board of directors shall relieve
21the directors of, and impose upon the person or persons in
22whom such discretion or powers are vested, liability for acts
23or omissions imposed by law on directors to the extent that
24the discretion or powers of the directors are limited by the
25agreement.
   266.  The existence or performance of an agreement authorized
27by this section shall not be a ground for imposing personal
28liability on any shareholder for the acts or debts of the
29corporation even if the agreement or its performance treats the
30corporation as if it were a partnership or results in failure
31to observe the corporate formalities otherwise applicable to
32the matters governed by the agreement.
   337.  Incorporators or subscribers for shares may act as
34shareholders with respect to an agreement authorized by this
35section if no shares have been issued when the agreement is
-90-1made.
   28.  Limits, if any, on the duration of an agreement
3authorized by this section must be set forth in the agreement.
4An agreement that became effective between January 1, 2003,
5and June 30, 2014, both dates inclusive, unless the agreement
6provided otherwise, remains governed by the provisions of this
7section concerning duration then in effect.
8   Sec. 79.  Section 490.740, Code 2021, is amended by striking
9the section and inserting in lieu thereof the following:
   10490.740  Part definitions.
   11As used in this part:
   121.  “Derivative proceeding” means a civil suit in the right
13of a domestic corporation or, to the extent provided in section
14490.747, in the right of a foreign corporation.
   152.  “Shareholder” means a record shareholder, a beneficial
16shareholder, and an unrestricted voting trust beneficial owner.
17   Sec. 80.  Section 490.743, Code 2021, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.743  Stay of proceedings.
   20If the corporation commences an inquiry into the allegations
21made in the demand or complaint, the court may stay any
22derivative proceeding for such period as the court deems
23appropriate.
24   Sec. 81.  Section 490.744, Code 2021, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.744  Dismissal.
   271.  A derivative proceeding shall be dismissed by the court
28on motion by the corporation if one of the groups specified
29in subsection 2 or 5 has determined in good faith, after
30conducting a reasonable inquiry upon which its conclusions are
31based, that the maintenance of the derivative proceeding is
32not in the best interests of the corporation. A corporation
33moving to dismiss on this basis shall submit in support of the
34motion a short and concise statement of the reasons for its
35determination.
-91-
   12.  Unless a panel is appointed pursuant to subsection 5,
2the determination in subsection 1 shall be made by any of the
3following:
   4a.  A majority vote of qualified directors present at a
5meeting of the board of directors if the qualified directors
6constitute a quorum.
   7b.  A majority vote of a committee consisting of two or more
8qualified directors appointed by majority vote of qualified
9directors present at a meeting of the board of directors,
10regardless of whether such qualified directors constitute a
11quorum.
   123.  a.  If a derivative proceeding is commenced after
13a determination has been made rejecting a demand by a
14shareholder, the complaint shall allege with particularity
15facts establishing any of the following:
   16(1)  That a majority of the board of directors did not
17consist of qualified directors at the time the determination
18was made.
   19(2)  That the requirements of subsection 1 have not been met.
   20b.  All discovery and other proceedings shall be stayed
21during the pendency of any motion to dismiss unless the
22court finds upon the motion of any party that particularized
23discovery is necessary to preserve evidence or prevent undue
24prejudice to that party.
   254.  If a majority of the board of directors consisted
26of qualified directors at the time the determination was
27made, the plaintiff shall have the burden of proving that
28the requirements of subsection 1 have not been met; if not,
29the corporation shall have the burden of proving that the
30requirements of subsection 1 have been met.
   315.  Upon motion by the corporation, the court may appoint
32a panel of one or more individuals to make a determination
33whether the maintenance of the derivative proceeding is in the
34best interests of the corporation. In such case, the plaintiff
35shall have the burden of proving that the requirements of
-92-1subsection 1 have not been met.
2   Sec. 82.  Section 490.745, Code 2021, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.745  Discontinuance or settlement.
   5A derivative proceeding shall not be discontinued or settled
6without the court’s approval. If the court determines that a
7proposed discontinuance or settlement will substantially affect
8the interests of the corporation’s shareholders or a class or
9series of shareholders, the court shall direct that notice be
10given to the shareholders affected.
11   Sec. 83.  Section 490.746, Code 2021, is amended by striking
12the section and inserting in lieu thereof the following:
   13490.746  Payment of expenses.
   14On termination of the derivative proceeding, the court may
15do any of the following:
   161.  Order the corporation to pay the plaintiff’s expenses
17incurred in the proceeding if it finds that the proceeding has
18resulted in a substantial benefit to the corporation.
   192.  Order the plaintiff to pay any defendant’s expenses
20incurred in defending the proceeding if it finds that the
21proceeding was commenced or maintained without reasonable cause
22or for an improper purpose.
   233.  Order a party to pay an opposing party’s expenses
24incurred because of the filing of a pleading, motion, or other
25paper, if it finds that any of the following apply:
   26a.  The pleading, motion, or other paper was not well
27grounded in fact, after reasonable inquiry, or warranted by
28existing law or a good faith argument for the extension,
29modification, or reversal of existing law.
   30b.  The pleading, motion, or other paper was interposed for
31an improper purpose, such as to harass or cause unnecessary
32delay or needless increase in the cost of litigation.
33   Sec. 84.  Section 490.748, Code 2021, is amended by striking
34the section and inserting in lieu thereof the following:
   35490.748  Shareholder action to appoint custodian or receiver.
-93-
   11.  The district court of the county where a corporation’s
2principal office or, if none in this state, its registered
3office, is located may appoint one or more persons to be
4custodians, or, if the corporation is insolvent, to be
5receivers, of and for a corporation in a proceeding by a
6shareholder where it is established that any of the following
7applies:
   8a.  The directors are deadlocked in the management of
9the corporate affairs, the shareholders are unable to break
10the deadlock, and irreparable injury to the corporation is
11threatened or being suffered.
   12b.  The directors or those in control of the corporation are
13acting fraudulently and irreparable injury to the corporation
14is threatened or being suffered.
   152.  a.  The district court may issue injunctions, appoint a
16temporary custodian or temporary receiver with all the powers
17and duties the district court directs, take other action to
18preserve the corporate assets wherever located, and carry on
19the business of the corporation until a full hearing is held.
   20b.  The district court shall hold a full hearing, after
21notifying all parties to the proceeding and any interested
22persons designated by the district court, before appointing a
23custodian or receiver.
   24c.  The district court has jurisdiction over the corporation
25and all of its property, wherever located.
   263.  The district court may appoint an individual or domestic
27or foreign corporation, registered to do business in this
28state, as a custodian or receiver and may require the custodian
29or receiver to post bond, with or without sureties, in an
30amount the district court directs.
   314.  The district court shall describe the powers and duties
32of the custodian or receiver in its appointing order, which may
33be amended from time to time. Among other powers, all of the
34following apply:
   35a.  A custodian may exercise all of the powers of the
-94-1corporation, through or in place of its board of directors, to
2the extent necessary to manage the business and affairs of the
3corporation.
   4b.  A receiver may do any of the following:
   5(1)  Dispose of all or any part of the assets of the
6corporation wherever located, at a public or private sale, if
7authorized by the district court.
   8(2)  Sue and defend in the receiver’s own name as receiver in
9all courts of this state.
   105.  The district court during a custodianship may
11redesignate the custodian a receiver, and during a receivership
12may redesignate the receiver a custodian, if doing so is in the
13best interests of the corporation.
   146.  The district court from time to time during the
15custodianship or receivership may order compensation paid and
16expense disbursements or reimbursements made to the custodian
17or receiver from the assets of the corporation or proceeds from
18the sale of its assets.
   197.  As used in this section, “shareholder” means a record
20shareholder, a beneficial shareholder, and an unrestricted
21voting trust beneficial owner.
22   Sec. 85.  NEW SECTION.  490.749  Judicial determination of
23corporate offices and review of elections and shareholder votes.
   241.  Upon application of or in a proceeding commenced by a
25person specified in subsection 2, the district court of the
26county where the corporation’s principal office or, if none in
27this state, its registered office, is located may determine all
28of the following:
   29a.  The result or validity of the election, appointment,
30removal, or resignation of a director or officer of the
31corporation.
   32b.  The right of an individual to hold the office of director
33or officer of the corporation.
   34c.  The result or validity of any vote by the shareholders
35of the corporation.
-95-
   1d.  The right of a director to membership on a committee of
2the board of directors.
   3e.  The right of a person to nominate or an individual to
4be nominated as a candidate for election or appointment as
5a director of the corporation, and any right under a bylaw
6adopted pursuant to section 490.206, subsection 3, or any
7comparable right under any provision of the articles of
8incorporation, contract, or applicable law.
   92.  An application or proceeding pursuant to subsection 1 may
10be filed or commenced by any of the following persons:
   11a.  The corporation.
   12b.  Any record shareholder, beneficial shareholder, or
13unrestricted voting trust beneficial owner of the corporation.
   14c.  A director of the corporation, an individual claiming
15the office of director, or a director whose membership on a
16committee of the board of directors is contested, in each case
17who is seeking a determination of a right to such office or
18membership.
   19d.  An officer of the corporation or an individual claiming
20to be an officer of the corporation, in each case who is
21seeking a determination of a right to such office.
   22e.  A person claiming a right covered by subsection 1,
23paragraph “e”, and who is seeking a determination of such right.
   243.  In connection with any application or proceeding under
25subsection 1, the following shall be named as defendants,
26unless such person made the application or commenced the
27proceeding:
   28a.  The corporation.
   29b.  Any individual whose right to office or membership on a
30committee of the board of directors is contested.
   31c.  Any individual claiming the office or membership at
32issue.
   33d.  Any person claiming a right covered by subsection 1,
34paragraph “e”, that is at issue.
   354.  In connection with any application or proceeding under
-96-1subsection 1, service of process may be made upon each of the
2persons specified in subsection 3, by any of the following:
   3a.  Service of process on the corporation addressed to such
4person in any manner provided by statute of this state or by
5rule of the applicable court for service on the corporation.
   6b.  Service of process on the person in any manner provided
7by statute of this state or by rule of the applicable court.
   85.  When service of process is made upon a person other than
9the corporation by service upon the corporation pursuant to
10subsection 4, paragraph “a”, the plaintiff and the corporation
11or its registered agent shall promptly provide written notice
12of such service, together with copies of all process and the
13application or complaint, to the person at the person’s last
14known residence or business address, or as permitted by statute
15of this state or by rule of the applicable court.
   166.  In connection with any application or proceeding under
17subsection 1, the court shall dispose of the application or
18proceeding on an expedited basis and also may do any of the
19following:
   20a.  Order such additional or further notice as the court
21deems proper under the circumstances.
   22b.  Order that additional persons be joined as parties to
23the proceeding if the court determines that such joinder is
24necessary for a just adjudication of matters before the court.
   25c.  Order an election or meeting be held in accordance with
26the provisions of section 490.703, subsection 2, or otherwise.
   27d.  Appoint a master to conduct an election or meeting.
   28e.  Enter temporary, preliminary, or permanent injunctive
29relief.
   30f.  Resolve solely for the purpose of this proceeding any
31legal or factual issues necessary for the resolution of any of
32the matters specified in subsection 1, including the right and
33power of persons claiming to own shares to vote at any meeting
34of the shareholders.
   35g.  Order such other relief as the court determines is
-97-1equitable, just, and proper.
   27.  It is not necessary to make shareholders a party to
3a proceeding or application pursuant to this section unless
4the shareholder is a required defendant under subsection
53, paragraph “d”, relief is sought against the shareholder
6individually, or the court orders joinder pursuant to
7subsection 6, paragraph “b”.
   88.  Nothing in this section limits, restricts, or abolishes
9the subject matter jurisdiction or powers of the court
10as existed before the enactment of this section, and an
11application or proceeding pursuant to this section is not the
12exclusive remedy or proceeding available with respect to the
13matters specified in subsection 1.
14   Sec. 86.  Section 490.801, Code 2021, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.801  Requirement for and functions of board of directors.
   171.  Except as may be provided in an agreement authorized
18under section 490.732, each corporation shall have a board of
19directors.
   202.  Except as may be provided in an agreement authorized
21under section 490.732, and subject to any limitation in
22the articles of incorporation permitted by section 490.202,
23subsection 2, all corporate powers shall be exercised by or
24under the authority of the board of directors, and the business
25and affairs of the corporation shall be managed by or under
26the direction, and subject to the oversight, of the board of
27directors.
28   Sec. 87.  Section 490.802, Code 2021, is amended by striking
29the section and inserting in lieu thereof the following:
   30490.802  Qualifications of directors.
   311.  The articles of incorporation or bylaws may prescribe
32qualifications for directors or for nominees for directors.
33Qualifications must be reasonable as applied to the corporation
34and be lawful.
   352.  A requirement that is based on a past, prospective,
-98-1or current action, or expression of opinion, by a nominee
2or director that could limit the ability of a nominee or
3director to discharge his or her duties as a director is not a
4permissible qualification under this section. Notwithstanding
5the foregoing, qualifications may include not being or having
6been subject to specified criminal, civil, or regulatory
7sanctions or not having been removed as a director by judicial
8action or for cause.
   93.  A director need not be a resident of this state or a
10shareholder unless the articles of incorporation or bylaws so
11prescribe.
   124.  A qualification for nomination for director prescribed
13before a person’s nomination shall apply to such person at
14the time of nomination. A qualification for nomination for
15director prescribed after a person’s nomination shall not apply
16to such person with respect to such nomination.
   175.  A qualification for director prescribed before a
18director has been elected or appointed may apply only at the
19time an individual becomes a director or may apply during a
20director’s term. A qualification prescribed after a director
21has been elected or appointed shall not apply to that director
22before the end of that director’s term.
23   Sec. 88.  Section 490.803, Code 2021, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.803  Number and election of directors.
   261.  A board of directors shall consist of one or more
27individuals, with the number specified in or fixed in
28accordance with the articles of incorporation or bylaws.
   292.  The number of directors may be increased or decreased
30from time to time by amendment to, or in the manner provided
31in, the articles of incorporation or bylaws.
   323.  Directors are elected at the first annual shareholders’
33meeting and at each annual shareholders’ meeting thereafter
34unless elected by written consent in lieu of an annual meeting
35as permitted by section 490.704 or unless their terms are
-99-1staggered under section 490.806.
2   Sec. 89.  Section 490.804, Code 2021, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.804  Election of directors by certain classes of series
5of shares.
   6If the articles of incorporation or action by the board of
7directors pursuant to section 490.602 authorize dividing the
8shares into classes or series, the articles of incorporation
9may also authorize the election of all or a specified number
10of directors by the holders of one or more authorized classes
11or series of shares. A class or series, or multiple classes
12or series, of shares entitled to elect one or more directors
13is a separate voting group for purposes of the election of
14directors.
15   Sec. 90.  Section 490.805, Code 2021, is amended by striking
16the section and inserting in lieu thereof the following:
   17490.805  Terms of directors generally.
   181.  The terms of the initial directors of a corporation
19expire at the first shareholders’ meeting at which directors
20are elected.
   212.  a.  The terms of all other directors expire at the
22next, or if their terms are staggered in accordance with
23section 490.806, at the applicable second or third, annual
24shareholders’ meeting following their election.
   25b.  Paragraph “a” does not apply in any of the following
26circumstances:
   27(1)  To the extent provided in section 490.1022 if a bylaw
28electing to be governed by that section is in effect.
   29(2)  A shorter term is specified in the articles of
30incorporation in the event of a director nominee failing to
31receive a specified vote for election.
   323.  A decrease in the number of directors does not shorten
33an incumbent director’s term.
   344.  The term of a director elected to fill a vacancy expires
35at the next shareholders’ meeting at which directors are
-100-1elected.
   25.  Except to the extent otherwise provided in the articles
3of incorporation or under section 490.1022, if a bylaw electing
4to be governed by that section is in effect, despite the
5expiration of a director’s term, the director continues to
6serve until the director’s successor is elected and qualifies
7or there is a decrease in the number of directors.
8   Sec. 91.  Section 490.806, Code 2021, is amended by striking
9the section and inserting in lieu thereof the following:
   10490.806  Staggered terms for directors.
   11The articles of incorporation may provide for staggering the
12terms of directors by dividing the total number of directors
13into two or three groups, with each group containing one-half
14or one-third of the total, as near as may be practicable.
15In that event, the terms of directors in the first group
16expire at the first annual shareholders’ meeting after their
17election, the terms of the second group expire at the second
18annual shareholders’ meeting after their election, and the
19terms of the third group, if any, expire at the third annual
20shareholders’ meeting after their election. At each annual
21shareholders’ meeting held thereafter, directors shall be
22elected for a term of two years or three years, as the case may
23be, to succeed those whose terms expire.
24   Sec. 92.  Section 490.807, Code 2021, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.807  Resignation of directors.
   271.  A director may resign at any time by delivering a written
28notice of resignation to the board of directors or its chair,
29or to the secretary.
   302.  A resignation is effective as provided in section
31490.141, subsection 9, unless the resignation provides for a
32delayed effectiveness, including effectiveness determined upon
33a future event or events. A resignation that is conditioned
34upon failing to receive a specified vote for election as a
35director may provide that it is irrevocable.
-101-
1   Sec. 93.  Section 490.808, Code 2021, is amended by striking
2the section and inserting in lieu thereof the following:
   3490.808  Removal of directors by shareholders.
   41.  The shareholders may remove one or more directors with or
5without cause unless the articles of incorporation provide that
6directors may be removed only for cause.
   72.  If a director is elected by a voting group of
8shareholders, only the shareholders of that voting group may
9participate in the vote to remove that director.
   103.  A director may be removed if the number of votes cast
11to remove exceeds the number of votes cast not to remove the
12director, except to the extent the articles of incorporation
13or bylaws require a greater number. However, if cumulative
14voting is authorized, a director shall not be removed if, in
15the case of a meeting, the number of votes sufficient to elect
16the director under cumulative voting is voted against removal
17and, if action is taken by less than unanimous written consent,
18voting shareholders entitled to the number of votes sufficient
19to elect the director under cumulative voting do not consent
20to the removal.
   214.  A director may be removed by the shareholders only at a
22meeting called for the purpose of removing the director, and
23the meeting notice must state that removal of the director is a
24purpose of the meeting.
25   Sec. 94.  Section 490.809, Code 2021, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.809  Removal of directors by judicial proceeding.
   281.  The district court of the county where a corporation’s
29principal office or, if none in this state, its registered
30office, is located may remove a director from office or
31may order other relief, including barring the director
32from reelection for a period prescribed by the court, in a
33proceeding commenced by or in the right of the corporation if
34the court finds that all of the following apply:
   35a.  The director engaged in fraudulent conduct with respect
-102-1to the corporation or its shareholders, grossly abused the
2position of director, or intentionally inflicted harm on the
3corporation.
   4b.  Considering the director’s course of conduct and the
5inadequacy of other available remedies, removal or such other
6relief would be in the best interest of the corporation.
   72.  A shareholder proceeding on behalf of the corporation
8under subsection 1 shall comply with all of the requirements of
9subchapter VII, part D, except section 490.741, subsection 1.
10   Sec. 95.  Section 490.810, Code 2021, is amended by striking
11the section and inserting in lieu thereof the following:
   12490.810  Vacancy on board of directors.
   131.  Unless the articles of incorporation provide otherwise,
14if a vacancy occurs on a board of directors, including a
15vacancy resulting from an increase in the number of directors,
16the vacancy may be filled in any of the following manners:
   17a.  The shareholders may fill the vacancy.
   18b.  The board of directors may fill the vacancy.
   19c.  If the directors remaining in office are less than a
20quorum, they may fill the vacancy by the affirmative vote of a
21majority of all the directors remaining in office.
   222.  If the vacant office was held by a director elected by
23a voting group of shareholders, only the holders of shares of
24that voting group are entitled to vote to fill the vacancy
25if it is filled by the shareholders, and only the remaining
26directors elected by that voting group, even if less than a
27quorum, are entitled to fill the vacancy if it is filled by the
28directors.
   293.  A vacancy that will occur at a specific later date, by
30reason of a resignation effective at a later date under section
31490.807, subsection 2, or otherwise, may be filled before the
32vacancy occurs but the new director shall not take office until
33the vacancy occurs.
34   Sec. 96.  Section 490.820, Code 2021, is amended by striking
35the section and inserting in lieu thereof the following:
-103-   1490.820  Meetings.
   21.  The board of directors may hold regular or special
3meetings in or out of this state.
   42.  Unless restricted by the articles of incorporation
5or bylaws, any director may participate in any meeting
6of the board of directors through the use of any means of
7communication by which all directors participating may
8simultaneously hear each other during the meeting. A director
9participating in a meeting by this means is deemed to be
10present in person at the meeting.
11   Sec. 97.  Section 490.821, Code 2021, is amended by striking
12the section and inserting in lieu thereof the following:
   13490.821  Action without meeting.
   141.  Except to the extent that the articles of incorporation
15or bylaws require that action by the board of directors be
16taken at a meeting, action required or permitted by this
17chapter to be taken by the board of directors may be taken
18without a meeting if each director signs a consent describing
19the action to be taken and delivers it to the corporation.
   202.  Action taken under this section is the act of the board
21of directors when one or more consents signed by all the
22directors are delivered to the corporation. The consent may
23specify the time at which the action taken is to be effective.
24A director’s consent may be withdrawn by a revocation signed by
25the director and delivered to the corporation before delivery
26to the corporation of unrevoked written consents signed by all
27the directors.
   283.  A consent signed under this section has the effect of
29action taken at a meeting of the board of directors and may be
30described as such in any document.
31   Sec. 98.  Section 490.822, Code 2021, is amended by striking
32the section and inserting in lieu thereof the following:
   33490.822  Notice of meeting.
   341.  Unless the articles of incorporation or bylaws provide
35otherwise, regular meetings of the board of directors may be
-104-1held without notice of the date, time, place, or purpose of the
2meeting.
   32.  Unless the articles of incorporation or bylaws provide
4for a longer or shorter period, special meetings of the board
5of directors shall be preceded by at least two days’ notice of
6the date, time, and place of the meeting. The notice need not
7describe the purpose of the special meeting unless required by
8the articles of incorporation or bylaws.
9   Sec. 99.  Section 490.823, Code 2021, is amended by striking
10the section and inserting in lieu thereof the following:
   11490.823  Waiver of notice.
   121.  A director may waive any notice required by this chapter,
13the articles of incorporation, or the bylaws before or after
14the date and time stated in the notice. Except as provided
15by subsection 2, the waiver must be in writing, signed by
16the director entitled to the notice, and delivered to the
17corporation for filing by the corporation with the minutes or
18corporate records.
   192.  A director’s attendance at or participation in a meeting
20waives any required notice to the director of the meeting
21unless all of the following apply:
   22a.  The director at the beginning of the meeting, or promptly
23upon arrival, objects to holding the meeting or transacting
24business at the meeting.
   25b.  The director does not, after objecting, vote for or
26assent to action taken at the meeting.
27   Sec. 100.  Section 490.824, Code 2021, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.824  Quorum and voting.
   301.  Unless the articles of incorporation or bylaws provide
31for a greater or lesser number, or unless otherwise expressly
32provided in this chapter, a quorum of a board of directors
33consists of a majority of the number of directors specified in
34or fixed in accordance with the articles of incorporation or
35bylaws.
-105-
   12.  The quorum of the board of directors specified in
2or fixed in accordance with the articles of incorporation
3or bylaws shall not consist of less than one-third of the
4specified or fixed number of directors.
   53.  If a quorum is present when a vote is taken, the
6affirmative vote of a majority of directors present is the act
7of the board of directors unless the articles of incorporation
8or bylaws require the vote of a greater number of directors or
9unless otherwise expressly provided in this chapter.
   104.  a.  A director who is present at a meeting of the board
11of directors or a committee when corporate action is taken is
12deemed to have assented to the action taken unless one or more
13of the following occurs:
   14(1)  The director objects at the beginning of the meeting, or
15promptly upon arrival, to holding it or transacting business
16at the meeting.
   17(2)  The dissent or abstention from the action taken is
18entered in the minutes of the meeting.
   19(3)  The director delivers written notice of the director’s
20dissent or abstention to the presiding officer of the meeting
21before its adjournment or to the corporation immediately after
22adjournment of the meeting.
   23b.  The right of dissent or abstention is not available to a
24director who votes in favor of the action taken.
25   Sec. 101.  Section 490.825, Code 2021, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.825  Committees of the board.
   281.  Unless this chapter, the articles of incorporation,
29or the bylaws provide otherwise, a board of directors may
30establish one or more board committees composed exclusively
31of one or more directors to perform functions of the board of
32directors.
   332.  a.  The establishment of a board committee and
34appointment of members to it shall be approved by the greater
35of the following:
-106-
   1(1)  A majority of all the directors in office when the
2action is taken.
   3(2)  The number of directors required by the articles of
4incorporation or bylaws to take action under section 490.824.
   5b.  Paragraph “a” applies unless, in either case, this
6chapter or the articles of incorporation provide otherwise.
   73.  Sections 490.820 through 490.824 apply to board
8committees and their members.
   94.  A board committee may exercise the powers of the board
10of directors under section 490.801, to the extent specified by
11the board of directors or in the articles of incorporation or
12bylaws, except that a board committee shall not do any of the
13following:
   14a.  Authorize or approve distributions, except according to
15a formula or method, or within limits, prescribed by the board
16of directors.
   17b.  Approve or propose to shareholders action that this
18chapter requires be approved by shareholders.
   19c.  Fill vacancies on the board of directors or, subject to
20subsection 5, on any board committees.
   21d.  Adopt, amend, or repeal bylaws.
   225.  The board of directors may appoint one or more directors
23as alternate members of any board committee to replace any
24absent or disqualified member during the member’s absence
25or disqualification. If the articles of incorporation, the
26bylaws, or the resolution creating the board committee so
27provide, the member or members present at any board committee
28meeting and not disqualified from voting may, by unanimous
29action, appoint another director to act in place of an absent
30or disqualified member during that member’s absence or
31disqualification.
32   Sec. 102.  Section 490.830, Code 2021, is amended by striking
33the section and inserting in lieu thereof the following:
   34490.830  Standards of conduct for directors.
   351.  Each member of the board of directors, when discharging
-107-1the duties of a director, shall act in conformity with all of
2the following:
   3a.  In good faith.
   4b.  In a manner the director reasonably believes to be in the
5best interests of the corporation.
   62.  The members of the board of directors or a board
7committee, when becoming informed in connection with their
8decision-making function or devoting attention to their
9oversight function, shall discharge their duties with the care
10that a person in a like position would reasonably believe
11appropriate under similar circumstances.
   123.  In discharging board or board committee duties, a
13director shall disclose, or cause to be disclosed, to the other
14board or committee members information which the director
15knows is not already known by them but known by the director
16to be material to the discharge of their decision-making or
17oversight functions, except that disclosure is not required to
18the extent that the director reasonably believes that doing so
19would violate a duty imposed under law, a legally enforceable
20obligation of confidentiality, or a professional ethics rule.
   214.  In discharging board or board committee duties, a
22director who does not have knowledge that makes reliance
23unwarranted is entitled to rely on the performance by any of
24the persons specified in subsection 6, paragraph “a” or “c”, to
25whom the board may have delegated, formally or informally by
26course of conduct, the authority or duty to perform one or more
27of the board’s functions that are delegable under applicable
28law.
   295.  In discharging board or board committee duties, a
30director who does not have knowledge that makes reliance
31unwarranted is entitled to rely on information, opinions,
32reports, or statements, including financial statements and
33other financial data, prepared or presented by any of the
34persons specified in subsection 6.
   356.  A director is entitled to rely, in accordance with
-108-1subsection 4 or 5, on any of the following:
   2a.  One or more officers or employees of the corporation whom
3the director reasonably believes to be reliable and competent
4in the functions performed or the information, opinions,
5reports, or statements provided.
   6b.  Legal counsel, public accountants, or other persons
7retained by the corporation as to matters involving skills
8or expertise the director reasonably believes are any of the
9following:
   10(1)  Matters within the particular person’s professional or
11expert competence.
   12(2)  Matters as to which the particular person merits
13confidence.
   14c.  A board committee of which the director is not a member
15if the director reasonably believes the committee merits
16confidence.
17   Sec. 103.  Section 490.831, Code 2021, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.831  Standards of liability for directors.
   201.  A director shall not be liable to the corporation or its
21shareholders for any decision to take or not to take action,
22or any failure to take any action, as a director, unless the
23party asserting liability in a proceeding establishes all of
24the following:
   25a.  No defense interposed by the director based on any of the
26following precludes liability:
   27(1)  A provision in the articles of incorporation authorized
28by section 490.202, subsection 2, paragraph “d” or “f”.
   29(2)  The protection afforded by section 490.861 for action
30taken in compliance with section 490.862 or section 490.863.
   31(3)  The protection afforded by section 490.870.
   32b.  That the challenged conduct consisted or was the result
33of any of the following:
   34(1)  Action not in good faith.
   35(2)  A decision that satisfies any of the following:
-109-
   1(a)  That which the director did not reasonably believe to be
2in the best interests of the corporation.
   3(b)  As to which the director was not informed to an
4extent the director reasonably believed appropriate in the
5circumstances.
   6(3)  A lack of objectivity due to the director’s familial,
7financial, or business relationship with, or a lack of
8independence due to the director’s domination or control by,
9another person having a material interest in the challenged
10conduct, which also meets all of the following criteria:
   11(a)  Which relationship or which domination or control could
12reasonably be expected to have affected the director’s judgment
13respecting the challenged conduct in a manner adverse to the
14corporation.
   15(b)  After a reasonable expectation to such effect has been
16established, the director shall not have established that the
17challenged conduct was reasonably believed by the director to
18be in the best interests of the corporation.
   19(4)  A sustained failure of the director to devote attention
20to ongoing oversight of the business and affairs of the
21corporation, or a failure to devote timely attention, by
22making, or causing to be made, appropriate inquiry, when
23particular facts and circumstances of significant concern
24materialize that would alert a reasonably attentive director
25to the need for such inquiry.
   26(5)  Receipt of a financial benefit to which the director was
27not entitled or any other breach of the director’s duties to
28deal fairly with the corporation and its shareholders that is
29actionable under applicable law.
   302.  a.  The party seeking to hold the director liable for
31money damages shall also have the burden of establishing all
32of the following:
   33(1)  That harm to the corporation or its shareholders has
34been suffered.
   35(2)  The harm suffered was proximately caused by the
-110-1director’s challenged conduct.
   2b.  A party seeking to hold the director liable for other
3money payment under a legal remedy, such as compensation for
4the unauthorized use of corporate assets, shall also have
5whatever persuasion burden may be called for to establish that
6the payment sought is appropriate in the circumstances.
   7c.  A party seeking to hold the director liable for other
8money payment under an equitable remedy, such as profit
9recovery by or disgorgement to the corporation, shall also
10have whatever persuasion burden may be called for to establish
11that the equitable remedy sought is appropriate in the
12circumstances.
   133.  This section shall not do any of the following:
   14a.  In any instance where fairness is at issue, such
15as consideration of the fairness of a transaction to the
16corporation under section 490.861, subsection 2, paragraph
17“c”, alter the burden of proving the fact or lack of fairness
18otherwise applicable.
   19b.  Alter the fact or lack of liability of a director
20under another section of this chapter, such as the provisions
21governing the consequences of an unlawful distribution under
22section 490.833 or a transactional interest under section
23490.861.
   24c.  Affect any rights to which the corporation or a
25shareholder may be entitled under another statute of this state
26or the United States.
27   Sec. 104.  Section 490.833, Code 2021, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.833  Directors’ liability for unlawful distributions.
   301.  A director who votes for or assents to a distribution in
31excess of what may be authorized and made pursuant to section
32490.640, subsection 1, or section 490.1409, subsection 1, is
33personally liable to the corporation for the amount of the
34distribution that exceeds what could have been distributed
35without violating section 490.640, subsection 1, or section
-111-1490.1409, subsection 1, if the party asserting liability
2establishes that when taking the action the director did not
3comply with section 490.830.
   42.  A director held liable under subsection 1 for an unlawful
5distribution is entitled to all of the following:
   6a.  Contribution from every other director who could be held
7liable under subsection 1 for the unlawful distribution.
   8b.  Recoupment from each shareholder of the prorata portion
9of the amount of the unlawful distribution the shareholder
10accepted, knowing the distribution was made in violation of
11section 490.640, subsection 1, or section 490.1409, subsection
121.
   133.  a.  A proceeding to enforce the liability of a director
14under subsection 1 is barred unless it is commenced within two
15years after any of the following:
   16(1)  The date on which the effect of the distribution was
17measured under section 490.640, subsection 5 or 8.
   18(2)  The date as of which the violation of section 490.640,
19subsection 1, occurred as the consequence of disregard of a
20restriction in the articles of incorporation.
   21(3)  The date on which the distribution of assets to
22shareholders under section 490.1409, subsection 1, was made.
   23b.  A proceeding to enforce contribution or recoupment
24under subsection 2 is barred unless it is commenced within
25one year after the liability of the claimant has been finally
26adjudicated under subsection 1.
27   Sec. 105.  Section 490.840, Code 2021, is amended by striking
28the section and inserting in lieu thereof the following:
   29490.840  Officers.
   301.  A corporation has the officers described in its bylaws
31or appointed by the board of directors in accordance with the
32bylaws.
   332.  The board of directors may elect individuals to fill one
34or more offices of the corporation. An officer may appoint one
35or more officers if authorized by the bylaws or the board of
-112-1directors.
   23.  The bylaws or the board of directors shall assign to an
3officer responsibility for maintaining and authenticating the
4records of the corporation required to be kept under section
5490.1601, subsection 1.
   64.  The same individual may simultaneously hold more than one
7office in a corporation.
8   Sec. 106.  Section 490.842, Code 2021, is amended by striking
9the section and inserting in lieu thereof the following:
   10490.842  Standards of conduct for officers.
   111.  An officer, when performing in such capacity, has the
12duty to act in conformity with all of the following:
   13a.  In good faith.
   14b.  With the care that a person in a like position would
15reasonably exercise under similar circumstances.
   16c.  In a manner the officer reasonably believes to be in the
17best interests of the corporation.
   182.  The duty of an officer includes the obligation to do all
19of the following:
   20a.  Inform the superior officer to whom, or the board of
21directors or the board committee to which, the officer reports
22of information about the affairs of the corporation known to
23the officer, within the scope of the officer’s functions, and
24known to the officer to be material to such superior officer,
25board, or committee.
   26b.  Inform the officer’s superior officer, or another
27appropriate person within the corporation, or the board of
28directors, or a board committee, of any actual or probable
29material violation of law involving the corporation or material
30breach of duty to the corporation by an officer, employee,
31or agent of the corporation, that the officer believes has
32occurred or is likely to occur.
   333.  In discharging the officer’s duties, an officer who does
34not have knowledge that makes reliance unwarranted is entitled
35to rely on any of the following:
-113-
   1a.  The performance of properly delegated responsibilities
2by one or more employees of the corporation whom the officer
3reasonably believes to be reliable and competent in performing
4the responsibilities delegated.
   5b.  Information, opinions, reports, or statements, including
6financial statements and other financial data, prepared or
7presented by one or more employees of the corporation whom the
8officer reasonably believes to be reliable and competent in
9the matters presented or by legal counsel, public accountants,
10or other persons retained by the corporation as to matters
11involving skills or expertise the officer reasonably believes
12are any of the following:
   13(1)  Matters within the particular person’s professional or
14expert competence.
   15(2)  Matters as to which the particular person merits
16confidence.
   174.  An officer shall not be liable to the corporation or its
18shareholders for any decision to take or not to take action,
19or any failure to take any action, as an officer, if the duties
20of the office are performed in compliance with this section.
21Whether an officer who does not comply with this section shall
22have liability will depend in such instance on applicable
23law, including those principles of section 490.831 that have
24relevance.
25   Sec. 107.  Section 490.843, Code 2021, is amended by striking
26the section and inserting in lieu thereof the following:
   27490.843  Resignation and removal of officers.
   281.  An officer may resign at any time by delivering a
29written notice to the board of directors, or its chair, or to
30the appointing officer or the secretary. A resignation is
31effective as provided in section 490.141, subsection 9, unless
32the notice provides for a delayed effectiveness, including
33effectiveness determined upon a future event or events. If
34effectiveness of a resignation is stated to be delayed and the
35board of directors or the appointing officer accepts the delay,
-114-1the board of directors or the appointing officer may fill the
2pending vacancy before the delayed effectiveness but the new
3officer shall not take office until the vacancy occurs.
   42.  An officer may be removed at any time with or without
5cause by any of the following:
   6a.  The board of directors.
   7b.  The appointing officer, unless the bylaws or the board
8of directors provide otherwise.
   9c.  Any other officer if authorized by the bylaws or the
10board of directors.
   113.  As used in this section, “appointing officer” means the
12officer, including any successor to that officer, who appointed
13the officer resigning or being removed.
14   Sec. 108.  Section 490.844, Code 2021, is amended by striking
15the section and inserting in lieu thereof the following:
   16490.844  Contract rights of officers.
   171.  The election or appointment of an officer does not itself
18create contract rights.
   192.  An officer’s removal does not affect the officer’s
20contract rights, if any, with the corporation. An officer’s
21resignation does not affect the corporation’s contract rights,
22if any, with the officer.
23   Sec. 109.  Section 490.850, Code 2021, is amended by striking
24the section and inserting in lieu thereof the following:
   25490.850  Part definitions.
   26As used in this part:
   271.  “Corporation” includes any domestic or foreign
28predecessor entity of a corporation in a merger.
   292.  “Director” or “officer” means an individual who is or
30was a director or officer, respectively, of a corporation
31or who, while a director or officer of the corporation, is
32or was serving at the corporation’s request as a director,
33officer, manager, partner, trustee, employee, or agent of
34another entity or employee benefit plan. A director or
35officer is considered to be serving an employee benefit plan
-115-1at the corporation’s request if the individual’s duties to
2the corporation also impose duties on, or otherwise involve
3services by, the individual to the plan or to participants in
4or beneficiaries of the plan. “Director” or “officer” includes,
5unless the context requires otherwise, the estate or personal
6representative of a director or officer.
   73.  “Liability” means the obligation to pay a judgment,
8settlement, penalty, fine, including an excise tax assessed
9with respect to an employee benefit plan, or expenses incurred
10with respect to a proceeding.
   114.  a.  “Official capacity” means the following:
   12(1)  When used with respect to a director, the office of
13director in a corporation.
   14(2)  When used with respect to an officer, as contemplated
15in section 490.856, the office in a corporation held by the
16officer.
   17b.  “Official capacity” does not include service for any
18other domestic or foreign corporation or any joint venture,
19trust, employee benefit plan, or other entity.
   205.  “Party” means an individual who was, is, or is threatened
21to be made a defendant or respondent in a proceeding.
   226.  “Proceeding” means any threatened, pending, or completed
23action, suit, or proceeding, whether civil, criminal,
24administrative, arbitrative, or investigative and whether
25formal or informal.
26   Sec. 110.  Section 490.851, Code 2021, is amended by striking
27the section and inserting in lieu thereof the following:
   28490.851  Permissible indemnification.
   291.  Except as otherwise provided in this section, a
30corporation may indemnify an individual who is a party to
31a proceeding because the individual is a director against
32liability incurred in the proceeding if any of the following
33apply:
   34a.  All of the following apply:
   35(1)  The director’s conduct was in good faith.
-116-
   1(2)  The director reasonably believed:
   2(a)  In the case of conduct in an official capacity, that
3the director’s conduct was in the best interests of the
4corporation.
   5(b)  In all other cases, that the director’s conduct was at
6least not opposed to the best interests of the corporation.
   7(3)  In the case of any criminal proceeding, the director
8had no reasonable cause to believe the director’s conduct was
9unlawful.
   10b.  The director engaged in conduct for which broader
11indemnification has been made permissible or obligatory under a
12provision of the articles of incorporation, as authorized by
13section 490.202, subsection 2, paragraph “e”.
   142.  A director’s conduct with respect to an employee benefit
15plan for a purpose the director reasonably believed to be in
16the interests of the participants in, and the beneficiaries
17of, the plan is conduct that satisfies the requirement of
18subsection 1, paragraph “a”, subparagraph (2), subparagraph
19division (b).
   203.  The termination of a proceeding by judgment, order,
21settlement, or conviction, or upon a plea of nolo contendere
22or its equivalent, is not, of itself, determinative that
23the director did not meet the relevant standard of conduct
24described in this section.
   254.  Unless ordered by a court under section 490.854,
26subsection 1, paragraph “c”, a corporation shall not indemnify a
27director in any of the following circumstances:
   28a.  In connection with a proceeding by or in the right of the
29corporation, except for expenses incurred in connection with
30the proceeding if it is determined that the director has met
31the relevant standard of conduct under subsection 1.
   32b.  In connection with any proceeding with respect to conduct
33for which the director was adjudged liable on the basis of
34receiving a financial benefit to which the director was not
35entitled, regardless of whether it involved action in the
-117-1director’s official capacity.
2   Sec. 111.  Section 490.852, Code 2021, is amended by striking
3the section and inserting in lieu thereof the following:
   4490.852  Mandatory indemnification.
   5A corporation shall indemnify a director who was wholly
6successful, on the merits or otherwise, in the defense of
7any proceeding to which the director was a party because the
8director is or was a director of the corporation against
9expenses incurred by the director in connection with the
10proceeding.
11   Sec. 112.  Section 490.853, Code 2021, is amended by striking
12the section and inserting in lieu thereof the following:
   13490.853  Advance for expenses.
   141.  A corporation may, before final disposition of a
15proceeding, advance funds to pay for or reimburse expenses
16incurred in connection with the proceeding by an individual
17who is a party to the proceeding because that individual is a
18director, if the director delivers to the corporation a signed
19written undertaking of the director to repay any funds advanced
20and all of the following apply:
   21a.  The director is not entitled to mandatory indemnification
22under section 490.852.
   23b.  It is ultimately determined under section 490.854 or
24490.855 that the director is not entitled to indemnification.
   252.  The undertaking required by subsection 1 must be an
26unlimited general obligation of the director but need not be
27secured and may be accepted without reference to the financial
28ability of the director to make repayment.
   293.  Authorizations under this section shall be made by any
30of the following:
   31a.  By the board of directors as follows:
   32(1)  If there are two or more qualified directors, by a
33majority vote of all of the qualified directors, a majority
34of whom shall for such purpose constitute a quorum, or by a
35majority of the members of a committee consisting solely of two
-118-1or more qualified directors appointed by such a vote.
   2(2)  If there are fewer than two qualified directors,
3by the vote necessary for action by the board of directors
4in accordance with section 490.824, subsection 3, in which
5authorization directors who are not qualified directors may
6participate.
   7b.  By the shareholders, but shares owned by or voted under
8the control of a director who at the time is not a qualified
9director shall not be voted on the authorization.
10   Sec. 113.  Section 490.854, Code 2021, is amended by striking
11the section and inserting in lieu thereof the following:
   12490.854  Court-ordered indemnification and advance for
13expenses.
   141.  A person who is a party to a proceeding because the
15person is a director may apply for indemnification or an
16advance for expenses to the court conducting the proceeding
17or to another court of competent jurisdiction. After receipt
18of an application and after giving any notice it considers
19necessary, the court shall do any of the following:
   20a.  Order indemnification if the court determines that the
21director is entitled to mandatory indemnification under section
22490.852.
   23b.  Order indemnification or advance for expenses if
24the court determines that the director is entitled to
25indemnification or advance for expenses pursuant to a provision
26authorized by section 490.858, subsection 1.
   27c.  (1)  Order indemnification or advance for expenses if the
28court determines, in view of all the relevant circumstances,
29that it is fair and reasonable to do any of the following:
   30(a)  Indemnify the director.
   31(b)  Advance expenses to the director.
   32(2)  The court shall order indemnification or advance for
33expenses, even if in the case of subparagraph (1), subparagraph
34division (a) or (b), the director has not met the relevant
35standard of conduct set forth in section 490.851, subsection 1,
-119-1failed to comply with section 490.853 or was adjudged liable
2in a proceeding referred to in section 490.851, subsection 4,
3paragraph “a” or “b”. However, if the director was adjudged
4so liable the director’s indemnification shall be limited to
5expenses incurred in connection with the proceeding.
   62.  If the court determines that the director is entitled
7to indemnification under subsection 1, paragraph “a”, or to
8indemnification or advance for expenses under subsection 1,
9paragraph “b”, it shall also order the corporation to pay the
10director’s expenses incurred in connection with obtaining
11court-ordered indemnification or advance for expenses.
12If the court determines that the director is entitled to
13indemnification or advance for expenses under subsection 1,
14paragraph “c”, it may also order the corporation to pay the
15director’s expenses to obtain court-ordered indemnification or
16advance for expenses.
17   Sec. 114.  Section 490.855, Code 2021, is amended by striking
18the section and inserting in lieu thereof the following:
   19490.855  Determination and authorization of indemnification.
   201.  A corporation shall not indemnify a director under
21section 490.851 unless authorized for a specific proceeding
22after a determination has been made that indemnification is
23permissible because the director has met the relevant standard
24of conduct set forth in section 490.851.
   252.  The determination shall be made by any of the following:
   26a.  If there are two or more qualified directors, by the
27board of directors by a majority vote of all the qualified
28directors, a majority of whom shall for such purpose constitute
29a quorum, or by a majority of the members of a committee of two
30or more qualified directors appointed by such a vote.
   31b.  By special legal counsel selected in one of the following
32manners:
   33(1)  In the manner prescribed in paragraph “a”.
   34(2)  If there are fewer than two qualified directors,
35selected by the board of directors, in which selection
-120-1directors who are not qualified directors may participate.
   2c.  By the shareholders, but shares owned by or voted under
3the control of a director who at the time is not a qualified
4director shall not be voted on the determination.
   53.  Authorization of indemnification shall be made in
6the same manner as the determination that indemnification is
7permissible, except that if there are fewer than two qualified
8directors or if the determination is made by special legal
9counsel, authorization of indemnification shall be made by
10those entitled to select special legal counsel under subsection
112, paragraph “b”, subparagraph (2).
12   Sec. 115.  Section 490.856, Code 2021, is amended by striking
13the section and inserting in lieu thereof the following:
   14490.856  Indemnification of officers.
   151.  A corporation may indemnify and advance expenses under
16this part to an officer who is a party to a proceeding because
17the person is an officer, according to all of the following:
   18a.  To the same extent as a director.
   19b.  If the person is an officer but not a director, to
20such further extent as may be provided by the articles of
21incorporation or bylaws, or by a resolution adopted or a
22contract approved by the board of directors or shareholders,
23except for any of the following:
   24(1)  Liability in connection with a proceeding by or in the
25right of the corporation other than for expenses incurred in
26connection with the proceeding.
   27(2)  Liability arising out of conduct that constitutes any
28of the following:
   29(a)  Receipt by the officer of a financial benefit to which
30the officer is not entitled.
   31(b)  An intentional infliction of harm on the corporation or
32the shareholders.
   33(c)  An intentional violation of criminal law.
   342.  The provisions of subsection 1, paragraph “b”, shall
35apply to an officer who is also a director, if the officer is
-121-1made a party to the proceeding based on an act or omission
2solely as an officer.
   33.  An officer who is not a director is entitled to mandatory
4indemnification under section 490.852, and may apply to a court
5under section 490.854 for indemnification or an advance for
6expenses, in each case to the same extent to which a director
7may be entitled to indemnification or advance for expenses
8under those sections.
9   Sec. 116.  Section 490.857, Code 2021, is amended by striking
10the section and inserting in lieu thereof the following:
   11490.857  Insurance.
   12A corporation may purchase and maintain insurance on
13behalf of an individual who is a director or officer of
14the corporation, or who, while a director or officer of the
15corporation, serves at the corporation’s request as a director,
16officer, partner, trustee, employee, or agent of another
17domestic or foreign corporation, or a joint venture, trust,
18employee benefit plan, or other entity, against liability
19asserted against or incurred by the individual in that capacity
20or arising from the individual’s status as a director or
21officer, regardless of whether the corporation would have power
22to indemnify or advance expenses to the individual against the
23same liability under this part.
24   Sec. 117.  Section 490.858, Code 2021, is amended by striking
25the section and inserting in lieu thereof the following:
   26490.858  Variation by corporate action — application of part.
   271.  A corporation may, by a provision in its articles
28of incorporation or bylaws or in a resolution adopted or a
29contract approved by the board of directors or shareholders,
30obligate itself in advance of the act or omission giving rise
31to a proceeding to provide indemnification in accordance
32with section 490.851 or advance funds to pay for or
33reimburse expenses in accordance with section 490.853. Any
34such obligatory provision shall be deemed to satisfy the
35requirements for authorization referred to in section 490.853,
-122-1subsection 3, and in section 490.855, subsection 3. Any
2such provision that obligates the corporation to provide
3indemnification to the fullest extent permitted by law shall be
4deemed to obligate the corporation to advance funds to pay for
5or reimburse expenses in accordance with section 490.853 to the
6fullest extent permitted by law, unless the provision expressly
7provides otherwise.
   82.  A right of indemnification or to advances for expenses
9created by this part or under subsection 1 and in effect at
10the time of an act or omission shall not be eliminated or
11impaired with respect to such act or omission by an amendment
12of the articles of incorporation or bylaws or a resolution
13of the board of directors or shareholders, adopted after the
14occurrence of such act or omission, unless, in the case of
15a right created under subsection 1, the provision creating
16such right and in effect at the time of such act or omission
17explicitly authorizes such elimination or impairment after such
18act or omission has occurred.
   193.  Any provision pursuant to subsection 1 shall not obligate
20the corporation to indemnify or advance expenses to a director
21of a predecessor of the corporation, pertaining to conduct
22with respect to the predecessor, unless otherwise expressly
23provided. Any provision for indemnification or advance for
24expenses in the articles of incorporation, or bylaws, or a
25resolution of the board of directors or shareholders of a
26predecessor of the corporation in a merger or in a contract
27to which the predecessor is a party, existing at the time the
28merger takes effect, shall be governed by section 490.1107,
29subsection 1, paragraph “d”.
   304.  Subject to subsection 2, a corporation may, by a
31provision in its articles of incorporation, limit any of the
32rights to indemnification or advance for expenses created by or
33pursuant to this part.
   345.  This part does not limit a corporation’s power to pay
35or reimburse expenses incurred by a director or an officer in
-123-1connection with appearing as a witness in a proceeding at a
2time when the director or officer is not a party.
   36.  This part does not limit a corporation’s power to
4indemnify, advance expenses to, or provide or maintain
5insurance on behalf of an employee or agent.
6   Sec. 118.  Section 490.860, Code 2021, is amended by striking
7the section and inserting in lieu thereof the following:
   8490.860  Part definitions.
   9As used in this part, unless otherwise specified:
   101.  “Control”, including the term “controlled by”, means any
11of the following:
   12a.  Having the power, directly or indirectly, to elect or
13remove a majority of the members of the board of directors
14or other governing body of an entity, whether through the
15ownership of voting shares or interests, by contract, or
16otherwise.
   17b.  Being subject to a majority of the risk of loss from the
18entity’s activities or entitled to receive a majority of the
19entity’s residual returns.
   202.  “Director’s conflicting interest transaction” means
21a transaction effected or proposed to be effected by the
22corporation, or by an entity controlled by the corporation, to
23which, or respecting which, any of the following applies:
   24a.  To which, at the relevant time, the director is a party.
   25b.  Respecting which, at the relevant time, the director
26had knowledge and a material financial interest known to the
27director.
   28c.  Respecting which, at the relevant time, the director knew
29that a related person was a party or had a material financial
30interest.
   313.  “Fair to the corporation” means, for purposes of section
32490.861, subsection 2, paragraph “c”, that the transaction
33as a whole was beneficial to the corporation, taking into
34appropriate account whether it was all of the following:
   35a.  Fair in terms of the director’s dealings with the
-124-1corporation.
   2b.  Comparable to what might have been obtainable in an arm’s
3length transaction, given the consideration paid or received
4by the corporation.
   54.  “Material financial interest” means a financial interest
6in a transaction that would reasonably be expected to impair
7the objectivity of the director’s judgment when participating
8in action on the authorization of the transaction.
   95.  “Related person” means any of the following:
   10a.  The individual’s spouse.
   11b.  A child, stepchild, grandchild, parent, stepparent,
12grandparent, sibling, stepsibling, half sibling, aunt,
13uncle, niece, or nephew, or spouse of any such person, of the
14individual or of the individual’s spouse.
   15c.  A natural person living in the same home as the
16individual.
   17d.  An entity, other than the corporation or an entity
18controlled by the corporation, controlled by the individual or
19any person specified in this subsection.
   20e.  Any of the following:
   21(1)  A domestic or foreign business or nonprofit
22corporation, other than the corporation or an entity controlled
23by the corporation, of which the individual is a director.
   24(2)  A domestic or foreign unincorporated entity of which the
25individual is a general partner or a member of the governing
26body.
   27(3)  A domestic or foreign individual, trust, or estate
28for whom or of which the individual is a trustee, guardian,
29personal representative, or like fiduciary.
   30f.  A person that is, or an entity that is controlled by, an
31employer of the individual.
   326.  “Relevant time” means the following:
   33a.  The time at which directors’ action respecting the
34transaction is taken in compliance with section 490.862.
   35b.  If the transaction is not brought before the board
-125-1of directors or a board committee for action under section
2490.862, at the time the corporation or an entity controlled
3by the corporation becomes legally obligated to consummate the
4transaction.
   57.  “Required disclosure” means disclosure of all of the
6following:
   7a.  The existence and nature of the director’s conflicting
8interest.
   9b.  All facts known to the director respecting the subject
10matter of the transaction that a director free of such
11conflicting interest would reasonably believe to be material in
12deciding whether to proceed with the transaction.
13   Sec. 119.  Section 490.861, Code 2021, is amended by striking
14the section and inserting in lieu thereof the following:
   15490.861  Judicial action.
   161.  A transaction effected or proposed to be effected by the
17corporation, or by an entity controlled by the corporation,
18shall not be the subject of equitable relief, or give rise to
19an award of damages or other sanctions against a director of
20the corporation, in a proceeding by a shareholder or by or in
21the right of the corporation, on the ground that the director
22has an interest respecting the transaction, if it is not a
23director’s conflicting interest transaction.
   242.  A director’s conflicting interest transaction shall
25not be the subject of equitable relief, or give rise to an
26award of damages or other sanctions against a director of the
27corporation, in a proceeding by a shareholder or by or in the
28right of the corporation, on the ground that the director has
29an interest respecting the transaction, if any of the following
30apply:
   31a.  Directors’ action respecting the transaction was taken in
32compliance with section 490.862 at any time.
   33b.  Shareholders’ action respecting the transaction was taken
34in compliance with section 490.863 at any time.
   35c.  The transaction, judged according to the circumstances
-126-1at the relevant time, is established to have been fair to the
2corporation.
3   Sec. 120.  Section 490.862, Code 2021, is amended by striking
4the section and inserting in lieu thereof the following:
   5490.862  Directors’ action.
   61.  Directors’ action respecting a director’s conflicting
7interest transaction is effective for purposes of section
8490.861, subsection 2, paragraph “a”, if the transaction has
9been authorized by the affirmative vote of a majority, but
10no fewer than two, of the qualified directors who voted on
11the transaction, after required disclosure by the conflicted
12director of information not already known by such qualified
13directors, or after modified disclosure in compliance with
14subsection 2, provided that all of the following apply:
   15a.  The qualified directors have deliberated and voted
16outside the presence of and without the participation by any
17other director.
   18b.  Where the action has been taken by a board committee,
19all members of the committee were qualified directors, and any
20of the following apply:
   21(1)  The committee was composed of all the qualified
22directors on the board of directors.
   23(2)  The members of the committee were appointed by the
24affirmative vote of a majority of the qualified directors on
25the board of directors.
   262.  Notwithstanding subsection 1, when a transaction is
27a director’s conflicting interest transaction only because a
28related person described in section 490.860, subsection 5,
29paragraph “e” or “f”, is a party to or has a material financial
30interest in the transaction, the conflicted director is not
31obligated to make required disclosure to the extent that the
32director reasonably believes that doing so would violate a
33duty imposed under law, a legally enforceable obligation of
34confidentiality, or a professional ethics rule, provided that
35the conflicted director discloses to the qualified directors
-127-1voting on the transaction all of the following:
   2a.  All information required to be disclosed that is not so
3violative.
   4b.  The existence and nature of the director’s conflicting
5interest.
   6c.  The nature of the conflicted director’s duty not to
7disclose the confidential information.
   83.  A majority, but no fewer than two, of all the qualified
9directors on the board of directors, or on the board committee,
10constitutes a quorum for purposes of action that complies with
11this section.
   124.  Where directors’ action under this section does not
13satisfy a quorum or voting requirement applicable to the
14authorization of the transaction by reason of the articles of
15incorporation or bylaws, or a provision of law, independent
16action to satisfy those authorization requirements shall be
17taken by the board of directors or a board committee, in
18which action directors who are not qualified directors may
19participate.
20   Sec. 121.  Section 490.863, Code 2021, is amended by striking
21the section and inserting in lieu thereof the following:
   22490.863  Shareholders’ action.
   231.  a.  Shareholders’ action respecting a director’s
24conflicting interest transaction is effective for purposes of
25section 490.861, subsection 2, paragraph “b”, if a majority of
26the votes cast by the holders of all qualified shares are in
27favor of the transaction after all of the following occur:
   28(1)  Notice to shareholders describing the action to be taken
29respecting the transaction.
   30(2)  Provision to the corporation of the information
31referred to in subsection 2.
   32(3)  Communication to the shareholders entitled to vote
33on the transaction of the information that is the subject of
34required disclosure, to the extent the information is not known
35by them.
-128-
   1b.  In the case of shareholders’ action at a meeting, the
2shareholders entitled to vote shall be determined as of the
3record date for notice of the meeting.
   42.  A director who has a conflicting interest respecting
5the transaction shall, before the shareholders’ vote, inform
6the secretary or other officer or agent of the corporation
7authorized to tabulate votes, in writing, of the number of
8shares that the director knows are not qualified shares under
9subsection 3, and the identity of the holders of those shares.
   103.  As used in this section:
   11a.  “Holder” means and “held by” refers to shares held
12by a record shareholder, a beneficial shareholder, or an
13unrestricted voting trust beneficial owner.
   14b.  “Qualified shares” means all shares entitled to be
15voted with respect to the transaction except for shares that
16the secretary or other officer or agent of the corporation
17authorized to tabulate votes either knows, or under subsection
182 is notified, are held by any of the following:
   19(1)  A director who has a conflicting interest respecting the
20transaction.
   21(2)  A related person of the director, excluding a person
22described in section 490.860, subsection 5, paragraph “f”.
   234.  A majority of the votes entitled to be cast by the
24holders of all qualified shares constitutes a quorum for
25purposes of compliance with this section. Subject to the
26provisions of subsection 5, shareholders’ action that otherwise
27complies with this section is not affected by the presence of
28holders, or by the voting, of shares that are not qualified
29shares.
   305.  If a shareholders’ vote does not comply with subsection
311 solely because of a director’s failure to comply with
32subsection 2, and if the director establishes that the failure
33was not intended to influence and did not in fact determine the
34outcome of the vote, the court may take such action respecting
35the transaction and the director, and may give such effect,
-129-1if any, to the shareholders’ vote, as the court considers
2appropriate in the circumstances.
   36.  Where shareholders’ action under this section does
4not satisfy a quorum or voting requirement applicable to the
5authorization of the transaction by reason of the articles of
6incorporation or bylaws, or a provision of law, independent
7action to satisfy those authorization requirements shall be
8taken by the shareholders, in which action shares that are not
9qualified shares may participate.
10   Sec. 122.  Section 490.870, Code 2021, is amended by striking
11the section and inserting in lieu thereof the following:
   12490.870  Business opportunities.
   131.  If a director or officer pursues or takes advantage of
14a business opportunity directly, or indirectly through or on
15behalf of another person, that action shall not be the subject
16of equitable relief, or give rise to an award of damages or
17other sanctions against the director, officer, or other person,
18in a proceeding by or in the right of the corporation on the
19ground that the opportunity should have first been offered to
20the corporation, if any of the following apply:
   21a.  Before the director, officer, or other person becomes
22legally obligated respecting the opportunity, the director or
23officer brings it to the attention of the corporation and any
24of the following apply:
   25(1)  Action by qualified directors disclaiming the
26corporation’s interest in the opportunity is taken in
27compliance with the same procedures as are set forth in section
28490.862.
   29(2)  Shareholders’ action disclaiming the corporation’s
30interest in the opportunity is taken in compliance with the
31procedures set forth in section 490.863, in either case as if
32the decision being made concerned a director’s conflicting
33interest transaction; except that, rather than making required
34disclosure as defined in section 490.860, the director or
35officer shall have made prior disclosure to those acting on
-130-1behalf of the corporation of all material facts concerning the
2business opportunity known to the director or officer.
   3b.  The duty to offer the corporation the business
4opportunity has been limited or eliminated pursuant to a
5provision of the articles of incorporation adopted, and where
6required, made effective by action of qualified directors, in
7accordance with section 490.202, subsection 2, paragraph “f”.
   82.  In any proceeding seeking equitable relief or other
9remedies based upon an alleged improper pursuit or taking
10advantage of a business opportunity by a director or officer,
11directly, or indirectly through or on behalf of another
12person, the fact that the director or officer did not employ
13the procedure described in subsection 1, paragraph “a”,
14subparagraph (1) or (2), before pursuing or taking advantage
15of the opportunity shall not create an implication that the
16opportunity should have been first presented to the corporation
17or alter the burden of proof otherwise applicable to establish
18that the director or officer breached a duty to the corporation
19in the circumstances.
20   Sec. 123.  Section 490.901, Code 2021, is amended by striking
21the section and inserting in lieu thereof the following:
   22490.901  Subchapter definitions.
   231.  As used in this subchapter:
   24a.  “Conversion” means a transaction pursuant to part C.
   25b.  “Converted entity” means the converting entity as it
26continues in existence after a conversion.
   27c.  “Converting entity” means the domestic corporation that
28approves a plan of conversion pursuant to section 490.932
29or the domestic or foreign eligible entity that approves a
30conversion pursuant to the organic law of the eligible entity.
   31d.  “Domesticated corporation” means the domesticating
32corporation as it continues in existence after a domestication.
   33e.  “Domesticating corporation” means the domestic
34corporation that approves a plan of domestication pursuant
35to section 490.921 or the foreign corporation that approves
-131-1a domestication pursuant to the organic law of the foreign
2corporation.
   3f.  “Domestication” means a transaction pursuant to part B.
   4g.  “Protected agreement” means any of the following:
   5(1)  A document evidencing indebtedness of a domestic
6corporation or eligible entity and any related agreement in
7effect immediately before the enactment date.
   8(2)  An agreement that is binding on a domestic corporation
9or eligible entity immediately before the enactment date.
   10(3)  The articles of incorporation or bylaws of a domestic
11corporation or the organic rules of a domestic eligible entity,
12in each case in effect immediately before the enactment date.
   13(4)  An agreement that is binding on any of the shareholders,
14members, interest holders, directors, or other governors of a
15domestic corporation or eligible entity, in their capacities as
16such, immediately before the enactment date.
   172.  As used in subsection 1 and sections 490.920 and
18490.930, “enactment date” means January 1, 2022, as it relates
19to domestications and January 1, 2009, as it relates to
20conversions.
21   Sec. 124.  Section 490.902, Code 2021, is amended by striking
22the section and inserting in lieu thereof the following:
   23490.902  Excluded transactions.
   24This subchapter shall not be used to effect a transaction
25that converts a company organized on the mutual principle to
26one organized on the basis of share ownership.
27   Sec. 125.  NEW SECTION.  490.903  Required approvals.
   28If a domestic or foreign corporation or eligible entity
29shall not be a party to a merger without the approval of the
30superintendent of banking, the commissioner of insurance,
31or the Iowa utility board, and the applicable statutes or
32regulations do not specifically deal with transactions under
33this subchapter but do require such approval for mergers,
34a corporation or eligible entity shall not be a party to a
35transaction under this subchapter without the prior approval of
-132-1that agency or official.
2   Sec. 126.  NEW SECTION.  490.904  Relationship of subchapter
3to other laws.
   4A transaction effected under this subchapter shall not
5create or impair a right, duty, or obligation of a person under
6the statutory law of this state other than this subchapter
7relating to a change in control, business combination,
8control-share acquisition, or similar transaction involving
9a domesticating or converting domestic corporation, unless
10the approval of the plan of domestication or conversion is by
11a vote of the shareholders or the board of directors which
12would be sufficient to create or impair the right, duty, or
13obligation directly under that law.
14   Sec. 127.  NEW SECTION.  490.905  Foreign insurance companies
15becoming domestic.
   161.  The secretary of state, upon a corporation complying with
17this section and upon the filing of articles of incorporation
18and upon receipt of the fees as provided in this chapter,
19shall issue an acknowledgment of receipt of document as
20of the date of the filing of the articles of incorporation
21with the secretary of state. The acknowledgment of receipt
22of document shall state on its face that it is issued in
23accordance with this section. The secretary of state shall
24then notify the appropriate officer of the state or country of
25the corporation’s last domicile that the corporation is now a
26domestic corporation domiciled in this state. This section
27applies to life insurance companies, and to insurance companies
28doing business under chapter 515.
   292.  A corporation becoming domiciled in this state under
30subsection 1 shall not be required to comply with any other
31requirements under this subchapter.
32   Sec. 128.  NEW SECTION.  490.920  Domestication.
   331.  By complying with the provisions of this part applicable
34to foreign corporations, a foreign corporation may become a
35domestic corporation if the domestication is permitted by the
-133-1organic law of the foreign corporation.
   22.  By complying with the provisions of this part, a domestic
3corporation may become a foreign corporation pursuant to a
4plan of domestication if the domestication is permitted by the
5organic law of the foreign corporation.
   63.  The plan of domestication must include all of the
7following:
   8a.  The name of the domesticating corporation.
   9b.  The name and jurisdiction of formation of the
10domesticated corporation.
   11c.  The manner and basis of reclassifying the shares of the
12domesticating corporation into shares or other securities,
13obligations, rights to acquire shares or other securities,
14cash, other property, or any combination of the foregoing.
   15d.  The proposed articles of incorporation and bylaws of the
16domesticated corporation.
   17e.  The other terms and conditions of the domestication.
   184.  In addition to the requirements of subsection 3, a plan
19of domestication may contain any other provision not prohibited
20by law.
   215.  The terms of a plan of domestication may be made
22dependent upon facts objectively ascertainable outside the plan
23in accordance with section 490.120, subsection 11.
   246.  If a protected agreement of a domestic domesticating
25corporation in effect immediately before the domestication
26becomes effective contains a provision applying to a merger
27of the corporation and the agreement does not refer to a
28domestication of the corporation, the provision applies to a
29domestication of the corporation as if the domestication were a
30merger until such time as the provision is first amended after
31the enactment date.
32   Sec. 129.  NEW SECTION.  490.921  Action on a plan of
33domestication.
   34In the case of a domestication of a domestic corporation
35into a foreign jurisdiction, the plan of domestication shall be
-134-1adopted in the following manner:
   21.  The plan of domestication shall first be adopted by the
3board of directors.
   42.  a.  The plan of domestication shall then be approved by
5the shareholders. In submitting the plan of domestication to
6the shareholders for approval, the board of directors shall
7recommend that the shareholders approve the plan, unless any of
8the following applies:
   9(1)  The board of directors makes a determination that
10because of conflicts of interest or other special circumstances
11it should not make such a recommendation.
   12(2)  Section 490.826 applies.
   13b.  If paragraph “a”, subparagraph (1) or (2) applies, the
14board shall inform the shareholders of the basis for its so
15proceeding.
   163.  The board of directors may set conditions for approval
17of the plan of domestication by the shareholders or the
18effectiveness of the plan of domestication.
   194.  If the approval of the shareholders is to be given at
20a meeting, the corporation shall notify each shareholder,
21regardless of whether entitled to vote, of the meeting of
22shareholders at which the plan of domestication is to be
23submitted for approval. The notice must state that the
24purpose, or one of the purposes, of the meeting is to consider
25the plan of domestication and must contain or be accompanied
26by a copy or summary of the plan. The notice must include
27or be accompanied by a copy of the articles of incorporation
28and the bylaws as they will be in effect immediately after the
29domestication.
   305.  Unless the articles of incorporation, bylaws, or the
31board of directors acting pursuant to subsection 3, require
32a greater vote or a greater quorum, approval of the plan of
33domestication requires all of the following:
   34a.  The approval of the shareholders at a meeting at which a
35quorum exists consisting of a majority of the votes entitled
-135-1to be cast on the plan.
   2b.  Except as provided in subsection 6, the approval of
3each class or series of shares voting as a separate voting
4group at a meeting at which a quorum of the voting group exists
5consisting of a majority of the votes entitled to be cast on
6the plan by that voting group.
   76.  The articles of incorporation may expressly limit or
8eliminate the separate voting rights provided in subsection
95, paragraph “b”, as to any class or series of shares, except
10when the articles of incorporation of the foreign corporation
11resulting from the domestication include what would be in
12effect an amendment that would entitle the class or series to
13vote as a separate group under section 490.1004 if it were
14a proposed amendment of the articles of incorporation of the
15domestic domesticating corporation.
   167.  If as a result of a domestication one or more
17shareholders of a domestic domesticating corporation would
18become subject to interest holder liability, approval of the
19plan of domestication shall require the signing in connection
20with the domestication, by each such shareholder, of a separate
21written consent to become subject to such interest holder
22liability, unless in the case of a shareholder that already has
23interest holder liability with respect to the domesticating
24corporation, the terms and conditions of the interest holder
25liability with respect to the domesticated corporation are
26substantially identical to those of the existing interest
27holder liability, other than for changes that eliminate or
28reduce such interest holder liability.
29   Sec. 130.  NEW SECTION.  490.922  Articles of domestication
30— effectiveness.
   311.  After a plan of domestication of a domestic corporation
32has been adopted and approved as required by this chapter, or a
33foreign corporation that is the domesticating corporation has
34approved a domestication as required under its organic law,
35articles of domestication shall be signed by the domesticating
-136-1corporation. The articles must set forth all of the following:
   2a.  The name of the domesticating corporation and its
3jurisdiction of formation.
   4b.  The name and jurisdiction of formation of the
5domesticated corporation.
   6c.  If the domesticating corporation is a domestic
7corporation, a statement that the plan of domestication
8was approved in accordance with this subchapter or, if the
9domesticating corporation is a foreign corporation, a statement
10that the domestication was approved in accordance with its
11organic law.
   122.  If the domesticated corporation is a domestic
13corporation, the articles of domestication must attach
14articles of incorporation of the domesticated corporation that
15satisfy the requirements of section 490.202. Provisions that
16would not be required to be included in restated articles of
17incorporation may be omitted from the articles of incorporation
18attached to the articles of domestication.
   193.  The articles of domestication shall be delivered to the
20secretary of state for filing, and shall take effect at the
21effective date determined in accordance with section 490.123.
   224.  If the domesticated corporation is a domestic
23corporation, the domestication becomes effective when the
24articles of domestication are effective. If the domesticated
25corporation is a foreign corporation, the domestication becomes
26effective on the later of the following:
   27a.  The date and time provided by the organic law of the
28domesticated corporation.
   29b.  When the articles of domestication are effective.
   305.  If the domesticating corporation is a foreign
31corporation that is registered to do business in this state
32under subchapter XV, its registration statement shall
33be canceled automatically when the domestication becomes
34effective.
35   Sec. 131.  NEW SECTION.  490.923  Amendment of plan of
-137-1domestication — abandonment.
   21.  A plan of domestication of a domestic corporation may be
3amended by any of the following manners:
   4a.  In the same manner as the plan was approved, if the plan
5does not provide for the manner in which it may be amended.
   6b.  In the manner provided in the plan, except that a
7shareholder that was entitled to vote on or consent to approval
8of the plan is entitled to vote on or consent to any amendment
9of the plan that will change any of the following:
   10(1)  The amount or kind of shares or other securities,
11obligations, rights to acquire shares or other securities,
12cash, other property, or any combination of the foregoing, to
13be received by any of the shareholders of the domesticating
14corporation under the plan.
   15(2)  The articles of incorporation or bylaws of the
16domesticated corporation that will be in effect immediately
17after the domestication becomes effective, except for changes
18that do not require approval of the shareholders of the
19domesticated corporation under its organic law or its proposed
20articles of incorporation or bylaws as set forth in the plan.
   21(3)  Any of the other terms or conditions of the plan, if the
22change would adversely affect the shareholder in any material
23respect.
   242.  After a plan of domestication has been adopted and
25approved by a domestic corporation as required by this part,
26and before the articles of domestication have become effective,
27the plan may be abandoned by the corporation without action by
28its shareholders in accordance with any procedures set forth in
29the plan or, if no such procedures are set forth in the plan, in
30the manner determined by the board of directors.
   313.  If a domestication is abandoned after the articles of
32domestication have been delivered to the secretary of state for
33filing but before the articles of domestication have become
34effective, articles of abandonment, signed by the domesticating
35corporation, must be delivered to the secretary of state for
-138-1filing before the articles of domestication become effective.
2The articles of abandonment take effect upon filing, and the
3domestication shall be deemed abandoned and shall not become
4effective. The articles of abandonment must contain all of the
5following:
   6a.  The name of the domesticating corporation.
   7b.  The date on which the articles of domestication were
8filed by the secretary of state.
   9c.  A statement that the domestication has been abandoned in
10accordance with this section.
11   Sec. 132.  NEW SECTION.  490.924  Effect of domestication.
   121.  When a domestication becomes effective all of the
13following apply:
   14a.  All property owned by, and every contract right possessed
15by, the domesticating corporation are the property and contract
16rights of the domesticated corporation without transfer,
17reversion, or impairment.
   18b.  All debts, obligations, and other liabilities of the
19domesticating corporation are the debts, obligations, and other
20liabilities of the domesticated corporation.
   21c.  The name of the domesticated corporation may but need not
22be substituted for the name of the domesticating corporation in
23any pending proceeding.
   24d.  The articles of incorporation and bylaws of the
25domesticated corporation become effective.
   26e.  The shares of the domesticating corporation are
27reclassified into shares or other securities, obligations,
28rights to acquire shares or other securities, cash, or other
29property in accordance with the terms of the domestication, and
30the shareholders of the domesticating corporation are entitled
31only to the rights provided to them by those terms and to any
32appraisal rights they may have under the organic law of the
33domesticating corporation.
   34f.  The domesticated corporation is all of the following:
   35(1)  Incorporated under and subject to the organic law of the
-139-1domesticated corporation.
   2(2)  The same corporation without interruption as the
3domesticating corporation.
   4(3)  Deemed to have been incorporated on the date the
5domesticating corporation was originally incorporated.
   62.  When a domestication of a domestic corporation into
7a foreign jurisdiction becomes effective, the domesticated
8corporation is deemed to have done all of the following:
   9a.  Appointed the secretary of state as its agent for
10service of process in a proceeding to enforce the rights of
11shareholders who exercise appraisal rights in connection with
12the domestication.
   13b.  Agreed that it will promptly pay the amount, if any, to
14which such shareholders are entitled under subchapter XIII.
   153.  Except as otherwise provided in the organic law or
16organic rules of a domesticating foreign corporation, the
17interest holder liability of a shareholder in a foreign
18corporation that is domesticated into this state who had
19interest holder liability in respect of such domesticating
20corporation before the domestication becomes effective shall
21be as follows:
   22a.  The domestication does not discharge that prior
23interest holder liability with respect to any interest holder
24liabilities that arose before the domestication becomes
25effective.
   26b.  The provisions of the organic law of the domesticating
27corporation shall continue to apply to the collection or
28discharge of any interest holder liabilities preserved by
29paragraph “a”, as if the domestication had not occurred.
   30c.  The shareholder shall have such rights of contribution
31from other persons as are provided by the organic law of the
32domesticating corporation with respect to any interest holder
33liabilities preserved by paragraph “a”, as if the domestication
34had not occurred.
   35d.  The shareholder shall not, by reason of such prior
-140-1interest holder liability, have interest holder liability with
2respect to any interest holder liabilities that are incurred
3after the domestication becomes effective.
   44.  A shareholder who becomes subject to interest holder
5liability in respect of the domesticated corporation as a
6result of the domestication shall have such interest holder
7liability only in respect of interest holder liabilities that
8arise after the domestication becomes effective.
   95.  A domestication does not constitute or cause the
10dissolution of the domesticating corporation.
   116.  Property held for charitable purposes under the
12laws of this state by a domestic or foreign corporation
13immediately before a domestication shall not, as a result of
14the transaction, be diverted from the objects for which it was
15donated, granted, devised, or otherwise transferred except
16and to the extent permitted by or pursuant to the laws of
17this state addressing cy pres or dealing with nondiversion of
18charitable assets.
   197.  A bequest, devise, gift, grant, or promise contained
20in a will or other instrument of donation, subscription, or
21conveyance which is made to the domesticating corporation and
22which takes effect or remains payable after the domestication
23inures to the domesticated corporation.
   248.  A trust obligation that would govern property if
25transferred to the domesticating corporation applies to
26property that is transferred to the domesticated corporation
27after the domestication takes effect.
28   Sec. 133.  NEW SECTION.  490.930  Conversion.
   291.  By complying with this subchapter, a domestic
30corporation may become any of the following:
   31a.  A domestic eligible entity.
   32b.  A foreign eligible entity if the conversion is permitted
33by the organic law of the foreign entity.
   342.  By complying with this part and applicable provisions
35of its organic law, a domestic eligible entity may become a
-141-1domestic corporation. If procedures for the approval of a
2conversion are not provided by the organic law or organic rules
3of a domestic eligible entity, the conversion shall be adopted
4and approved in the same manner as a merger of that eligible
5entity. If the organic law or organic rules of a domestic
6eligible entity do not provide procedures for the approval
7of either a conversion or a merger, a plan of conversion may
8nonetheless be adopted and approved by the unanimous consent
9of all the interest holders of such eligible entity. In
10either such case, the conversion thereafter may be effected as
11provided in the other provisions of this part; and for purposes
12of applying this subchapter in such a case all of the following
13apply:
   14a.  The eligible entity, its members or interest holders,
15eligible interests and organic rules taken together, shall be
16deemed to be a domestic business corporation, shareholders,
17shares and articles of incorporation, respectively and vice
18versa, as the context may require.
   19b.  If the business and affairs of the eligible entity are
20managed by a person or persons that are not identical to the
21members or interest holders, that person or persons shall be
22deemed to be the board of directors.
   233.  By complying with the provisions of this part applicable
24to foreign entities, a foreign eligible entity may become a
25domestic corporation if the organic law of the foreign eligible
26entity permits it to become a business corporation in another
27jurisdiction.
   284.  If a protected agreement of a domestic converting
29corporation in effect immediately before the conversion becomes
30effective contains a provision applying to a merger of the
31corporation that is a converting entity and the agreement does
32not refer to a conversion of the corporation, the provision
33applies to a conversion of the corporation as if the conversion
34were a merger, until such time as the provision is first
35amended after the enactment date.
-142-
1   Sec. 134.  NEW SECTION.  490.931  Plan of conversion.
   21.  A domestic corporation may convert to a domestic or
3foreign eligible entity under this part by approving a plan of
4conversion. The plan of conversion must include all of the
5following:
   6a.  The name of the converting corporation.
   7b.  The name, jurisdiction of formation, and type of entity
8of the converted entity.
   9c.  The manner and basis of converting the shares of
10the domestic corporation into eligible interests or other
11securities, obligations, rights to acquire eligible interests
12or other securities, cash, other property, or any combination
13of the foregoing.
   14d.  The other terms and conditions of the conversion.
   15e.  The full text, as it will be in effect immediately after
16the conversion becomes effective, of the organic rules of the
17converted entity which are to be in writing.
   182.  In addition to the requirements of subsection 1, a plan
19of conversion may contain any other provision not prohibited
20by law.
   213.  The terms of a plan of conversion may be made dependent
22upon facts objectively ascertainable outside the plan in
23accordance with section 490.120, subsection 11.
24   Sec. 135.  NEW SECTION.  490.932  Action on a plan of
25conversion.
   26In the case of a conversion of a domestic corporation to a
27domestic or foreign eligible entity, the plan of conversion
28shall be adopted in the following manner:
   291.  The plan of conversion shall first be adopted by the
30board of directors.
   312.  a.  The plan of conversion shall then be approved by
32the shareholders. In submitting the plan of conversion to the
33shareholders for their approval, the board of directors must
34recommend that the shareholders approve the plan, unless any of
35the following applies:
-143-
   1(1)  The board of directors makes a determination that
2because of conflicts of interest or other special circumstances
3it should not make such a recommendation.
   4(2)  Section 490.826 applies.
   5b.  If paragraph “a”, subparagraph (1) or (2) applies, the
6board of directors shall inform the shareholders of the basis
7for its so proceeding.
   83.  The board of directors may set conditions for approval of
9the plan of conversion by the shareholders or the effectiveness
10of the plan of conversion.
   114.  If the approval of the shareholders is to be given at
12a meeting, the corporation shall notify each shareholder,
13regardless of whether entitled to vote, of the meeting of
14shareholders at which the plan of conversion is to be submitted
15for approval. The notice must state that the purpose, or one
16of the purposes, of the meeting is to consider the plan of
17conversion and must contain or be accompanied by a copy or
18summary of the plan. The notice must include or be accompanied
19by a copy of the organic rules of the converted entity which
20are to be in writing as they will be in effect immediately
21after the conversion.
   225.  Unless the articles of incorporation, bylaws, or the
23board of directors acting pursuant to subsection 3, require
24a greater vote or a greater quorum, approval of the plan of
25conversion requires all of the following:
   26a.  The approval of the shareholders at a meeting at which a
27quorum exists consisting of a majority of the votes entitled
28to be cast on the plan.
   29b.  Except as provided in subsection 6, the approval of
30each class or series of shares voting as a separate voting
31group at a meeting at which a quorum of the voting group exists
32consisting of a majority of the votes entitled to be cast on
33the plan by that voting group.
   346.  If as a result of the conversion one or more shareholders
35of the converting domestic corporation would become subject to
-144-1interest holder liability, approval of the plan of conversion
2shall require the signing in connection with the transaction,
3by each such shareholder, of a separate written consent to
4become subject to such interest holder liability.
5   Sec. 136.  NEW SECTION.  490.933  Articles of conversion —
6effectiveness.
   71.  Articles of conversion shall be signed by the converting
8entity after either a plan of conversion of a domestic
9corporation has been adopted and approved as required by this
10chapter or a domestic or foreign eligible entity that is the
11converting entity has approved a conversion as required under
12its organic law. The articles of conversion must do all of the
13following:
   14a.  State the name, jurisdiction of formation, and type of
15entity of the converting entity.
   16b.  State the name, jurisdiction of formation, and type of
17entity of the converted entity.
   18c.  (1)  If the converting entity is a domestic corporation,
19state that the plan of conversion was approved in accordance
20with this part.
   21(2)  If the converting entity is an eligible entity, state
22that the conversion was approved by the eligible entity in
23accordance with its organic law.
   24(3)  If the converting entity is a domestic eligible entity
25the organic law of which does not provide for approval of the
26conversion, state that the conversion was approved by the
27domestic eligible entity in accordance with this part.
   28d.  (1)  If the converted entity is a domestic business
29corporation, or a domestic nonprofit corporation or filing
30entity, have attached the public organic record of the
31converted entity, except that provisions that would not be
32required to be included in a restated public organic record may
33be omitted.
   34(2)  If the converted entity is a domestic limited liability
35partnership, have attached the filing required to become a
-145-1limited liability partnership.
   22.  If the converted entity is a domestic corporation,
3its articles of incorporation must satisfy the requirements
4of section 490.202, except that provisions that would not be
5required to be included in restated articles of incorporation
6may be omitted from the articles of incorporation. If the
7converted entity is a domestic eligible entity, its public
8organic record, if any, must satisfy the requirements of the
9organic law of this state, except that the public organic
10record does not need to be signed.
   113.  The articles of conversion shall be delivered to the
12secretary of state for filing, and shall take effect at the
13effective date determined in accordance with section 490.123.
   144.  If a converted entity is a domestic entity, the
15conversion becomes effective when the articles of conversion
16are effective. With respect to a conversion in which the
17converted entity is a foreign eligible entity, the conversion
18itself shall become effective at the later of the following:
   19a.  The date and time provided by the organic law of that
20eligible entity.
   21b.  When the articles of conversion become effective.
   225.  Articles of conversion under this section may be combined
23with any required conversion filing under the organic law
24of a domestic eligible entity that is the converting entity
25or converted entity if the combined filing satisfies the
26requirements of both this section and the other organic law.
   276.  If the converting entity is a foreign eligible entity
28that is registered to do business in this state under a
29provision of law similar to subchapter XV, its registration
30statement or other type of foreign qualification shall be
31canceled automatically on the effective date of its conversion.
32   Sec. 137.  NEW SECTION.  490.934  Amendment of plan of
33conversion — abandonment.
   341.  A plan of conversion of a converting entity that is a
35domestic corporation may be amended in any of the following
-146-1manners:
   2a.  In the same manner as the plan was approved, if the plan
3does not provide for the manner in which it may be amended.
   4b.  In the manner provided in the plan, except that
5shareholders that were entitled to vote on or consent to
6approval of the plan are entitled to vote on or consent to any
7amendment of the plan that will change any of the following:
   8(1)  The amount or kind of eligible interests or other
9securities, obligations, rights to acquire eligible interests
10or other securities, cash, other property, or any combination
11of the foregoing, to be received by any of the shareholders of
12the converting corporation under the plan.
   13(2)  The organic rules of the converted entity that will be
14in effect immediately after the conversion becomes effective,
15except for changes that do not require approval of the eligible
16interest holders of the converted entity under its organic law
17or organic rules.
   18(3)  Any other terms or conditions of the plan, if the
19change would adversely affect such shareholders in any material
20respect.
   212.  After a plan of conversion has been approved by a
22converting entity that is a domestic corporation in the manner
23required by this part and before the articles of conversion
24become effective, the plan may be abandoned by the corporation
25without action by its shareholders in accordance with any
26procedures set forth in the plan or, if no such procedures are
27set forth in the plan, in the manner determined by the board of
28directors.
   293.  If a conversion is abandoned after the articles of
30conversion have been delivered to the secretary of state for
31filing and before the articles of conversion become effective,
32articles of abandonment, signed by the converting entity,
33must be delivered to the secretary of state for filing before
34the articles of conversion become effective. The articles
35of abandonment take effect on filing, and the conversion is
-147-1abandoned and does not become effective. The articles of
2abandonment must contain all of the following:
   3a.  The name of the converting entity.
   4b.  The date on which the articles of conversion were filed
5by the secretary of state.
   6c.  A statement that the conversion has been abandoned in
7accordance with this section.
8   Sec. 138.  NEW SECTION.  490.935  Effect of conversion.
   91.  When a conversion becomes effective all of the following
10shall apply:
   11a.  All property owned by, and every contract right possessed
12by, the converting entity remain the property and contract
13rights of the converted entity without transfer, reversion, or
14impairment.
   15b.  All debts, obligations, and other liabilities of the
16converting entity remain the debts, obligations, and other
17liabilities of the converted entity.
   18c.  The name of the converted entity may but need not be
19substituted for the name of the converting entity in any
20pending action or proceeding.
   21d.  If the converted entity is a filing entity or a domestic
22business corporation or a domestic or foreign nonprofit
23corporation, its public organic record and its private organic
24rules become effective.
   25e.  If the converted entity is a nonfiling entity, its
26private organic rules become effective.
   27f.  If the converted entity is a limited liability
28partnership, the filing required to become a limited liability
29partnership and its private organic rules become effective.
   30g.  The shares or eligible interests of the converting
31entity are reclassified into shares, eligible interests or
32other securities, obligations, rights to acquire shares,
33eligible interests or other securities, cash, or other property
34in accordance with the terms of the conversion, and the
35shareholders or interest holders of the converting entity are
-148-1entitled only to the rights provided to them by those terms and
2to any appraisal rights they may have under the organic law of
3the converting entity.
   4h.  The converted entity is all of the following:
   5(1)  Incorporated or organized under and subject to the
6organic law of the converted entity.
   7(2)  The same entity without interruption as the converting
8entity.
   9(3)  Deemed to have been incorporated or otherwise
10organized on the date that the converting entity was originally
11incorporated or organized.
   122.  When a conversion of a domestic corporation to a foreign
13eligible entity becomes effective, the converted entity is
14deemed to have done all of the following:
   15a.  Appointed the secretary of state as its agent for
16service of process in a proceeding to enforce the rights of
17shareholders who exercise appraisal rights in connection with
18the conversion.
   19b.  Agreed that it will promptly pay the amount, if any, to
20which such shareholders are entitled under subchapter XIII.
   213.  Except as otherwise provided in the articles of
22incorporation of a domestic corporation or the organic law or
23organic rules of a foreign corporation or a domestic or foreign
24eligible entity, a shareholder or eligible interest holder who
25becomes subject to interest holder liability in respect of a
26domestic corporation or eligible entity as a result of the
27conversion shall have such interest holder liability only in
28respect of interest holder liabilities that arise after the
29conversion becomes effective.
   304.  Except as otherwise provided in the organic law or the
31organic rules of the eligible entity, the interest holder
32liability of an interest holder in a converting eligible entity
33that converts to a domestic corporation who had interest holder
34liability in respect of such converting eligible entity before
35the conversion becomes effective shall be as follows:
-149-
   1a.  The conversion does not discharge that prior interest
2holder liability with respect to any interest holder
3liabilities that arose before the conversion became effective.
   4b.  The provisions of the organic law of the eligible entity
5shall continue to apply to the collection or discharge of any
6interest holder liabilities preserved by paragraph “a”, as if
7the conversion had not occurred.
   8c.  The eligible interest holder shall have such rights of
9contribution from other persons as are provided by the organic
10law of the eligible entity with respect to any interest holder
11liabilities preserved by paragraph “a”, as if the conversion had
12not occurred.
   13d.  The eligible interest holder shall not, by reason of such
14prior interest holder liability, have interest holder liability
15with respect to any interest holder liabilities that arise
16after the conversion becomes effective.
   175.  A conversion does not require the converting entity
18to wind up its affairs and does not constitute or cause the
19dissolution or termination of the entity.
   206.  Property held for charitable purposes under the laws of
21this state by a corporation or a domestic or foreign eligible
22entity immediately before a conversion shall not, as a result
23of the transaction, be diverted from the objects for which it
24was donated, granted, devised, or otherwise transferred except
25and to the extent permitted by or pursuant to the laws of
26this state addressing cy pres or dealing with nondiversion of
27charitable assets.
   287.  A bequest, devise, gift, grant, or promise contained
29in a will or other instrument of donation, subscription, or
30conveyance which is made to the converting entity and which
31takes effect or remains payable after the conversion inures to
32the converted entity.
   338.  A trust obligation that would govern property if
34transferred to the converting entity applies to property that
35is transferred to the converted entity after the conversion
-150-1takes effect.
2   Sec. 139.  Section 490.1003, Code 2021, is amended by
3striking the section and inserting in lieu thereof the
4following:
   5490.1003  Amendment by board of directors and shareholders.
   6If a corporation has issued shares, an amendment to the
7articles of incorporation shall be adopted in the following
8manner:
   91.  The proposed amendment shall first be adopted by the
10board of directors.
   112.  a.  Except as provided in sections 490.1005, 490.1007,
12and 490.1008, the amendment shall then be approved by the
13shareholders. In submitting the proposed amendment to the
14shareholders for approval, the board of directors shall
15recommend that the shareholders approve the amendment, unless
16any of the following applies:
   17(1)  The board of directors makes a determination that
18because of conflicts of interest or other special circumstances
19it should not make such a recommendation.
   20(2)  Section 490.826 applies.
   21b.  If paragraph “a”, subparagraph (1) or (2) applies, the
22board must inform the shareholders of the basis for its so
23proceeding.
   243.  The board of directors may set conditions for the
25approval of the amendment by the shareholders or the
26effectiveness of the amendment.
   274.  If the amendment is required to be approved by the
28shareholders, and the approval is to be given at a meeting,
29the corporation shall notify each shareholder, regardless of
30whether entitled to vote, of the meeting of shareholders at
31which the amendment is to be submitted for approval. The
32notice must state that the purpose, or one of the purposes,
33of the meeting is to consider the amendment. The notice must
34contain or be accompanied by a copy of the amendment.
   355.  Unless the articles of incorporation or bylaws, or the
-151-1board of directors acting pursuant to subsection 3, require a
2greater vote or a greater quorum, approval of the amendment
3requires the approval of the shareholders at a meeting at which
4a quorum consisting of a majority of the votes entitled to
5be cast on the amendment exists, and, if any class or series
6of shares is entitled to vote as a separate group on the
7amendment, except as provided in section 490.1004, subsection
83, the approval of each such separate voting group at a meeting
9at which a quorum of the voting group exists consisting of a
10majority of the votes entitled to be cast on the amendment by
11that voting group.
   126.  a.  If as a result of an amendment of the articles
13of incorporation one or more shareholders of a domestic
14corporation would become subject to new interest holder
15liability, approval of the amendment requires the signing in
16connection with the amendment, by each such shareholder, of a
17separate written consent to become subject to such new interest
18holder liability.
   19b.  Paragraph “a” does not apply in the case of a shareholder
20that already has interest holder liability and the terms and
21conditions of the new interest holder liability are any of the
22following:
   23(1)  Substantially identical to those of the existing
24interest holder liability.
   25(2)  Substantially identical to those of the existing
26interest holder liability, other than changes that eliminate or
27reduce such interest holder liability.
   287.  As used in subsection 6 and section 490.1009, “new
29interest holder liability”
means interest holder liability
30of a person resulting from an amendment of the articles of
31incorporation if any of the following applies:
   32a.  The person did not have interest holder liability before
33the amendment becomes effective.
   34b.  The person had interest holder liability before the
35amendment becomes effective, the terms and conditions of which
-152-1are changed when the amendment becomes effective.
2   Sec. 140.  Section 490.1004, Code 2021, is amended by
3striking the section and inserting in lieu thereof the
4following:
   5490.1004  Voting on amendments by voting groups.
   61.  The holders of the outstanding shares of a class are
7entitled to vote as a separate voting group, if shareholder
8voting is otherwise required by this chapter, on a proposed
9amendment to the articles of incorporation if the amendment
10would do any of the following:
   11a.  Effect an exchange or reclassification of all or part of
12the shares of the class into shares of another class.
   13b.  Effect an exchange or reclassification, or create the
14right of exchange, of all or part of the shares of another
15class into shares of the class.
   16c.  Change the rights, preferences, or limitations of all or
17part of the shares of the class.
   18d.  Change the shares of all or part of the class into a
19different number of shares of the same class.
   20e.  Create a new class of shares having rights or preferences
21with respect to distributions that are prior or superior to the
22shares of the class.
   23f.  Increase the rights, preferences, or number of authorized
24shares of any class that, after giving effect to the amendment,
25have rights or preferences with respect to distributions that
26are prior or superior to the shares of the class.
   27g.  Limit or deny an existing preemptive right of all or part
28of the shares of the class.
   29h.  Cancel or otherwise affect rights to distributions that
30have accumulated but not yet been authorized on all or part of
31the shares of the class.
   322.  If a proposed amendment would affect a series of a class
33of shares in one or more of the ways described in subsection 1,
34the holders of shares of that series are entitled to vote as a
35separate voting group on the proposed amendment.
-153-
   13.  If a proposed amendment that entitles the holders of
2two or more classes or series of shares to vote as separate
3voting groups under this section would affect those two or more
4classes or series in the same or a substantially similar way,
5the holders of shares of all the classes or series so affected
6shall vote together as a single voting group on the proposed
7amendment, unless otherwise provided in the articles of
8incorporation or added as a condition by the board of directors
9pursuant to section 490.1003, subsection 3.
   104.  A class or series of shares is entitled to the voting
11rights granted by this section even if the articles of
12incorporation provide that the shares are nonvoting shares.
13   Sec. 141.  Section 490.1006, Code 2021, is amended by
14striking the section and inserting in lieu thereof the
15following:
   16490.1006  Articles of amendment.
   171.  After an amendment to the articles of incorporation
18has been adopted and approved in the manner required by this
19chapter and by the articles of incorporation, the corporation
20shall deliver to the secretary of state, for filing, articles
21of amendment, which must set forth all of the following:
   22a.  The name of the corporation.
   23b.  The text of each amendment adopted, or the information
24required by section 490.120, subsection 11, paragraph “e”.
   25c.  If an amendment provides for an exchange,
26reclassification, or cancellation of issued shares,
27provisions for implementing the amendment, if not contained in
28the amendment itself, which may be made dependent upon facts
29objectively ascertainable outside the articles of amendment in
30accordance with section 490.120, subsection 11, paragraph “e”.
   31d.  The date of each amendment’s adoption.
   32e.  For an amendment, the following:
   33(1)  If it was adopted by the incorporators or board of
34directors without shareholder approval, a statement that the
35amendment was duly adopted by the incorporators or by the board
-154-1of directors, as the case may be, and that shareholder approval
2was not required.
   3(2)  If it required approval by the shareholders, a statement
4that the amendment was duly approved by the shareholders in
5the manner required by this chapter and by the articles of
6incorporation.
   7(3)  If being filed pursuant to section 490.120, subsection
811, paragraph “e”, a statement to that effect.
   92.  Articles of amendment shall take effect at the effective
10date determined in accordance with section 490.123.
11   Sec. 142.  Section 490.1007, Code 2021, is amended by
12striking the section and inserting in lieu thereof the
13following:
   14490.1007  Restated articles of incorporation.
   151.  A corporation’s board of directors may restate its
16articles of incorporation at any time, without shareholder
17approval, to consolidate all amendments into a single document.
   182.  If the restated articles include one or more new
19amendments that require shareholder approval, the amendments
20shall be adopted and approved as provided in section 490.1003.
   213.  A corporation that restates its articles of
22incorporation shall deliver to the secretary of state for
23filing articles of restatement setting forth all of the
24following:
   25a.  The name of the corporation.
   26b.  The text of the restated articles of incorporation.
   27c.  A statement that the restated articles consolidate all
28amendments into a single document.
   29d.  If a new amendment is included in the restated articles,
30the statements required under section 490.1006 with respect to
31the new amendment.
   324.  Duly adopted restated articles of incorporation
33supersede the original articles of incorporation and all
34amendments to the articles of incorporation.
   355.  The secretary of state may certify restated articles of
-155-1incorporation as the articles of incorporation currently in
2effect, without including the statements required by subsection
33, paragraph “d”.
4   Sec. 143.  Section 490.1009, Code 2021, is amended by
5striking the section and inserting in lieu thereof the
6following:
   7490.1009  Effect of amendment.
   81.  An amendment to the articles of incorporation does not
9affect a cause of action existing against or in favor of the
10corporation, a proceeding to which the corporation is a party,
11or the existing rights of persons other than the shareholders.
12An amendment changing a corporation’s name does not affect a
13proceeding brought by or against the corporation in its former
14name.
   152.  A shareholder who becomes subject to new interest holder
16liability in respect of the corporation as a result of an
17amendment to the articles of incorporation shall have that new
18interest holder liability only in respect of interest holder
19liabilities that arise after the amendment becomes effective.
   203.  Except as otherwise provided in the articles of
21incorporation of the corporation, the interest holder liability
22of a shareholder who had interest holder liability in respect
23of the corporation before the amendment becomes effective and
24has new interest holder liability after the amendment becomes
25effective shall be as follows:
   26a.  The amendment does not discharge that prior interest
27holder liability with respect to any interest holder
28liabilities that arose before the amendment becomes effective.
   29b.  The provisions of the articles of incorporation of
30the corporation relating to interest holder liability as in
31effect immediately prior to the amendment shall continue to
32apply to the collection or discharge of any interest holder
33liabilities preserved by paragraph “a”, as if the amendment had
34not occurred.
   35c.  The shareholder shall have such rights of contribution
-156-1from other persons as are provided by the articles of
2incorporation relating to interest holder liability as in
3effect immediately prior to the amendment with respect to any
4interest holder liabilities preserved by paragraph “a”, as if
5the amendment had not occurred.
   6d.  The shareholder shall not, by reason of such prior
7interest holder liability, have interest holder liability with
8respect to any interest holder liabilities that arise after the
9amendment becomes effective.
10   Sec. 144.  Section 490.1020, Code 2021, is amended by
11striking the section and inserting in lieu thereof the
12following:
   13490.1020  Authority to amend.
   141.  A corporation’s shareholders may amend or repeal the
15corporation’s bylaws.
   162.  A corporation’s board of directors may amend or repeal
17the corporation’s bylaws unless any of the following apply:
   18a.  The articles of incorporation, section 490.1021, or, if
19applicable, section 490.1022, reserve that power exclusively to
20the shareholders in whole or part.
   21b.  Except as provided in section 490.206, subsection 4,
22the shareholders in amending, repealing, or adopting a bylaw
23expressly provide that the board of directors shall not amend,
24repeal, or adopt that bylaw.
   253.  A shareholder of the corporation does not have a vested
26property right resulting from any provision in the bylaws.
27   Sec. 145.  Section 490.1021, Code 2021, is amended by
28striking the section and inserting in lieu thereof the
29following:
   30490.1021  Bylaw increasing quorum or voting requirement for
31directors.
   321.  A bylaw that increases a quorum or voting requirement
33for the board of directors or that requires a meeting of
34shareholders to be held at a place may be amended or repealed
35as follows:
-157-
   1a.  If originally adopted by the shareholders, only by the
2shareholders, unless the bylaw otherwise provides.
   3b.  If adopted by the board of directors, either by the
4shareholders or by the board of directors.
   52.  A bylaw adopted or amended by the shareholders that
6increases a quorum or voting requirement for the board of
7directors may provide that it can be amended or repealed only
8by a specified vote of either the shareholders or the board of
9directors.
   103.  Action by the board of directors under subsection 1
11to amend or repeal a bylaw that changes a quorum or voting
12requirement for the board of directors shall meet the same
13quorum requirement and be adopted by the same vote required to
14take action under the quorum and voting requirement then in
15effect or proposed to be adopted, whichever is greater.
16   Sec. 146.  NEW SECTION.  490.1022  Bylaw provisions relating
17to the election of directors.
   181.  Unless the articles of incorporation specifically
19prohibit the adoption of a bylaw pursuant to this section,
20alter the vote specified in section 490.728, subsection 1, or
21provide for cumulative voting, a corporation may elect in its
22bylaws to be governed in the election of directors as follows:
   23a.  Each vote entitled to be cast may be voted for or against
24up to that number of candidates that is equal to the number
25of directors to be elected, or a shareholder may indicate an
26abstention, but without cumulating the votes.
   27b.  To be elected, a nominee shall have received a plurality
28of the votes cast by holders of shares entitled to vote
29in the election at a meeting at which a quorum is present,
30provided that a nominee who is elected but receives more votes
31against than for election shall serve as a director for a term
32that shall terminate on the date that is the earlier of the
33following:
   34(1)  (a)  Ninety days from the date on which the voting
35results are determined pursuant to section 490.729, subsection
-158-12, paragraph “e”.
   2(b)  The date on which an individual is selected by the
3board of directors to fill the office held by such director,
4which selection shall be deemed to constitute the filling of a
5vacancy by the board to which section 490.810 applies.
   6(2)  Subject to subsection 1, paragraph “c”, a nominee who is
7elected but receives more votes against than for election shall
8not serve as a director beyond the ninety-day period provided
9in subparagraph division (a).
   10c.  The board of directors may select any qualified
11individual to fill the office held by a director who received
12more votes against than for election.
   132.  a.  Subsection 1 does not apply to an election of
14directors by a voting group if any of the fo1lowing applies:
   15(1)  At the expiration of the time fixed under a provision
16requiring advance notification of director candidates.
   17(2)  Absent such a provision, at a time fixed by the board of
18directors which is not more than fourteen days before notice
19is given of the meeting at which the election is to occur,
20there are more candidates for election by the voting group than
21the number of directors to be elected, one or more of whom are
22properly proposed by shareholders.
   23b.  An individual shall not be considered a candidate for
24purposes of paragraph “a”, if the board of directors determines
25before the notice of meeting is given that such individual’s
26candidacy does not create a bona fide election contest.
   273.  A bylaw electing to be governed by this section may be
28repealed under any of the following circumstances:
   29a.  If originally adopted by the shareholders, only by the
30shareholders, unless the bylaw otherwise provides.
   31b.  If adopted by the board of directors, by the board of
32directors or the shareholders.
33   Sec. 147.  Section 490.1101, Code 2021, is amended by
34striking the section and inserting in lieu thereof the
35following:
-159-   1490.1101  Subchapter definitions.
   2As used in this subchapter:
   31.  “Acquired entity” means the domestic or foreign
4corporation or eligible entity that will have all of one or
5more classes or series of its shares or eligible interests
6acquired in a share exchange.
   72.  “Acquiring entity” means the domestic or foreign
8corporation or eligible entity that will acquire all of one or
9more classes or series of shares or eligible interests of the
10acquired entity in a share exchange.
   113.  “New interest holder liability” means interest holder
12liability of a person, resulting from a merger or share
13exchange, that is any of the following:
   14a.  In respect of an entity which is different from the
15entity in which the person held shares or eligible interests
16immediately before the merger or share exchange became
17effective.
   18b.  In respect of the same entity as the one in which the
19person held shares or eligible interests immediately before
20the merger or share exchange became effective if any of the
21following apply:
   22(1)  The person did not have interest holder liability
23immediately before the merger or share exchange became
24effective.
   25(2)  The person had interest holder liability immediately
26before the merger or share exchange became effective, the terms
27and conditions of which were changed when the merger or share
28exchange became effective.
   294.  “Party to a merger” means any domestic or foreign
30corporation or eligible entity that will merge under a plan of
31merger but does not include a survivor created by the merger.
   325.  “Survivor” in a merger means the domestic or foreign
33corporation or eligible entity into which one or more other
34corporations or eligible entities are merged.
35   Sec. 148.  Section 490.1102, Code 2021, is amended by
-160-1striking the section and inserting in lieu thereof the
2following:
   3490.1102  Merger.
   41.  By complying with this subchapter, all of the following
5apply:
   6a.  One or more domestic business corporations may merge
7with one or more domestic or foreign business corporations or
8eligible entities pursuant to a plan of merger, resulting in
9a survivor.
   10b.  Two or more foreign business corporations or domestic or
11foreign eligible entities may merge, resulting in a survivor
12that is a domestic business corporation created in the merger.
   132.  By complying with the provisions of this subchapter
14applicable to foreign entities, a foreign business corporation
15or a foreign eligible entity may be a party to a merger with
16a domestic business corporation, or may be created as the
17survivor in a merger in which a domestic business corporation
18is a party, but only if the merger is permitted by the organic
19law of the foreign business corporation or eligible entity.
   203.  If the organic law or organic rules of a domestic
21eligible entity do not provide procedures for the approval
22of a merger, a plan of merger may nonetheless be adopted
23and approved by the unanimous consent of all of the interest
24holders of such eligible entity, and the merger may thereafter
25by effected as provided in the other provisions of this
26subchapter; and for the purposes of applying this subchapter in
27such a case all of the following shall apply:
   28a.  The eligible entity, its members or interest holders,
29eligible interests and articles of incorporation or other
30organic rules taken together shall be deemed to be a domestic
31business corporation, shareholders, shares and articles of
32incorporation, respectively and vice versa as the context may
33require.
   34b.  If the business and affairs of the eligible entity are
35managed by a person or persons that are not identical to the
-161-1members or interest holders, that group shall be deemed to be
2the board of directors.
   34.  The plan of merger must include all of the following:
   4a.  As to each party to the merger, its name, jurisdiction of
5formation, and type of entity.
   6b.  The survivor’s name, jurisdiction of formation, and type
7of entity, and, if the survivor is to be created in the merger,
8a statement to that effect.
   9c.  The terms and conditions of the merger.
   10d.  The manner and basis of converting the shares of
11each merging domestic or foreign business corporation and
12eligible interests of each merging domestic or foreign eligible
13entity into shares or other securities, eligible interests,
14obligations, rights to acquire shares, other securities or
15eligible interests, cash, other property, or any combination
16of the foregoing.
   17e.  The articles of incorporation of any domestic or foreign
18business or nonprofit corporation, or the public organic
19record of any domestic or foreign unincorporated entity, to be
20created by the merger, or if a new domestic or foreign business
21or nonprofit corporation or unincorporated entity is not to
22be created by the merger, any amendments to the survivor’s
23articles of incorporation or other public organic record.
   24f.  Any other provisions required by the laws under which any
25party to the merger is organized or by which it is governed, or
26by the articles of incorporation or organic rules of any such
27party.
   285.  In addition to the requirements of subsection 4, a plan
29of merger may contain any other provision not prohibited by
30law.
   316.  Terms of a plan of merger may be made dependent on facts
32objectively ascertainable outside the plan in accordance with
33section 490.120, subsection 11.
   347.  A plan of merger may be amended only with the consent of
35each party to the merger, except as provided in the plan. A
-162-1domestic party to a merger may approve an amendment to a plan
2in any of the following manners:
   3a.  In the same manner as the plan was approved, if the plan
4does not provide for the manner in which it may be amended.
   5b.  In the manner provided in the plan, except that
6shareholders, members, or interest holders that were entitled
7to vote on or consent to approval of the plan are entitled
8to vote on or consent to any amendment of the plan that will
9change any of the following:
   10(1)  The amount or kind of shares or other securities,
11eligible interests, obligations, rights to acquire shares,
12other securities or eligible interests, cash, or other property
13to be received under the plan by the shareholders, members, or
14interest holders of any party to the merger.
   15(2)  The articles of incorporation of any domestic or foreign
16business or nonprofit corporation, or the organic rules of
17any unincorporated entity, that will be the survivor of the
18merger, except for changes permitted by section 490.1005 or by
19comparable provisions of the organic law of any such foreign
20corporation or domestic or foreign nonprofit corporation or
21unincorporated entity.
   22(3)  Any of the other terms or conditions of the plan if the
23change would adversely affect such shareholders, members, or
24interest holders in any material respect.
25   Sec. 149.  Section 490.1103, Code 2021, is amended by
26striking the section and inserting in lieu thereof the
27following:
   28490.1103  Share exchange.
   291.  By complying with this subchapter all of the following
30apply:
   31a.  A domestic corporation may acquire all of the shares of
32one or more classes or series of shares of another domestic or
33foreign corporation, or all of the eligible interests of one or
34more classes or series of interests of a domestic or foreign
35eligible entity, in exchange for shares or other securities,
-163-1eligible interests, obligations, rights to acquire shares or
2other securities or eligible interests, cash, other property,
3or any combination of the foregoing, pursuant to a plan of
4share exchange.
   5b.  All of the shares of one or more classes or series of
6shares of a domestic corporation may be acquired by another
7domestic or foreign corporation or eligible entity, in
8exchange for shares or other securities, eligible interests,
9obligations, rights to acquire shares or other securities or
10eligible interests, cash, other property, or any combination of
11the foregoing, pursuant to a plan of share exchange.
   122.  A foreign corporation or eligible entity may be the
13acquired entity in a share exchange only if the share exchange
14is permitted by the organic law of that corporation or other
15entity.
   163.  If the organic law or organic rules of a domestic
17eligible entity do not provide procedures for the approval
18of a share exchange, a plan of share exchange may be adopted
19and approved, and the share exchange effected, in accordance
20with the procedures, if any, for a merger. If the organic
21law or organic rules of a domestic eligible entity do not
22provide procedures for the approval of either a share exchange
23or a merger, a plan of share exchange may nonetheless be
24adopted and approved by the unanimous consent of all of the
25interest holders of such eligible entity whose interests will
26be exchanged under the plan of share exchange, and the share
27exchange may thereafter be effected as provided in the other
28provisions of this subchapter; and for purposes of applying
29this subchapter in such a case all of the following apply:
   30a.  The eligible entity, its interest holders, interests,
31and articles of incorporation or other organic rules taken
32together shall be deemed to be a domestic business corporation,
33shareholders, shares and articles of incorporation,
34respectively and vice versa as the context may require.
   35b.  If the business and affairs of the eligible entity are
-164-1managed by a person or persons that are not identical to the
2members or interest holders, that person or those persons shall
3be deemed to be the board of directors.
   44.  The plan of share exchange must include all of the
5following:
   6a.  The name of each domestic or foreign corporation or other
7eligible entity the shares or eligible interests of which will
8be acquired and the name of the domestic or foreign corporation
9or eligible entity that will acquire those shares or eligible
10interests.
   11b.  The terms and conditions of the share exchange.
   12c.  The manner and basis of exchanging shares of a domestic
13or foreign corporation or eligible interests in a domestic or
14foreign eligible entity the shares or eligible interests of
15which will be acquired under the share exchange for shares or
16other securities, eligible interests, obligations, rights to
17acquire shares, other securities, or eligible interests, cash,
18other property, or any combination of the foregoing.
   19d.  Any other provisions required by the organic law
20governing the acquired entity or its articles of incorporation
21or organic rules.
   225.  The terms of a plan of share exchange may be made
23dependent on facts objectively ascertainable outside the plan
24in accordance with section 490.120, subsection 11.
   256.  A plan of share exchange may be amended only with the
26consent of each party to the share exchange, except as provided
27in the plan. A domestic entity may approve an amendment to a
28plan in any of the following manners:
   29a.  In the same manner as the plan was approved, if the plan
30does not provide for the manner in which it may be amended.
   31b.  In the manner provided in the plan, except that
32shareholders, members, or interest holders that were entitled
33to vote on or consent to approval of the plan are entitled
34to vote on or consent to any amendment of the plan that will
35change any of the following:
-165-
   1(1)  The amount or kind of shares or other securities,
2eligible interests, obligations, rights to acquire shares,
3other securities or eligible interests, cash, or other property
4to be received under the plan by the shareholders, members, or
5interest holders of the acquired entity.
   6(2)  Any of the other terms or conditions of the plan if the
7change would adversely affect such shareholders, members, or
8interest holders in any material respect.
9   Sec. 150.  Section 490.1104, Code 2021, is amended by
10striking the section and inserting in lieu thereof the
11following:
   12490.1104  Action on a plan of merger or share exchange.
   13In the case of a domestic corporation that is a party to a
14merger or the acquired entity in a share exchange, the plan
15of merger or share exchange shall be adopted in the following
16manner:
   171.  The plan of merger or share exchange shall first be
18adopted by the board of directors.
   192.  a.  Except as provided in subsections 8, 10, and 12, and
20in section 490.1105, the plan of merger or share exchange shall
21then be approved by the shareholders. In submitting the plan
22of merger or share exchange to the shareholders for approval,
23the board of directors shall recommend that the shareholders
24approve the plan, or, in the case of an offer referred to in
25subsection 10, paragraph “b”, that the shareholders tender
26their shares to the offeror in response to the offer, unless
27any of the following apply:
   28(1)  The board of directors makes a determination that
29because of conflicts of interest or other special circumstances
30it should not make such a recommendation.
   31(2)  Section 490.826 applies.
   32b.  If either paragraph “a”, subparagraph (1) or (2),
33applies, the board shall inform the shareholders of the basis
34for its so proceeding.
   353.  The board of directors may set conditions for the
-166-1approval of the plan of merger or share exchange by the
2shareholders or the effectiveness of the plan of merger or
3share exchange.
   44.  If the plan of merger or share exchange is required
5to be approved by the shareholders, and if the approval is
6to be given at a meeting, the corporation shall notify each
7shareholder, regardless of whether entitled to vote, of the
8meeting of shareholders at which the plan is to be submitted
9for approval. The notice must state that the purpose, or one
10of the purposes, of the meeting is to consider the plan and
11must contain or be accompanied by a copy or summary of the
12plan. If the corporation is to be merged into an existing
13foreign or domestic corporation or eligible entity, the notice
14must also include or be accompanied by a copy or summary of the
15articles of incorporation and bylaws or the organic rules of
16that corporation or eligible entity. If the corporation is to
17be merged with a domestic or foreign corporation or eligible
18entity and a new domestic or foreign corporation or eligible
19entity is to be created pursuant to the merger, the notice
20must include or be accompanied by a copy or a summary of the
21articles of incorporation and bylaws or the organic rules of
22the new corporation or eligible entity.
   235.  Unless the articles of incorporation, bylaws, or the
24board of directors acting pursuant to subsection 3, require
25a greater vote or a greater quorum, approval of the plan
26of merger or share exchange requires the approval of the
27shareholders at a meeting at which a quorum exists consisting
28of a majority of the votes entitled to be cast on the plan,
29and, if any class or series of shares is entitled to vote as
30a separate group on the plan of merger or share exchange, the
31approval of each such separate voting group at a meeting at
32which a quorum of the voting group is present consisting of
33a majority of the votes entitled to be cast on the merger or
34share exchange by that voting group.
   356.  Subject to subsection 7, separate voting by voting groups
-167-1is required for each of the following:
   2a.  On a plan of merger, by each class or series of shares
3that are any of the following:
   4(1)  To be converted under the plan of merger into shares,
5other securities, eligible interests, obligations, rights to
6acquire shares, other securities or eligible interests, cash,
7other property, or any combination of the foregoing.
   8(2)  Entitled to vote as a separate group on a provision in
9the plan that constitutes a proposed amendment to the articles
10of incorporation of a surviving corporation that requires
11action by separate voting groups under section 490.1004.
   12b.  On a plan of share exchange, by each class or series
13of shares included in the exchange, with each class or series
14constituting a separate voting group.
   15c.  On a plan of merger or share exchange, if the voting
16group is entitled under the articles of incorporation to
17vote as a voting group to approve a plan of merger or share
18exchange, respectively.
   197.  The articles of incorporation may expressly limit or
20eliminate the separate voting rights provided in subsection 6,
21paragraph “a”, subparagraph (1), and subsection 6, paragraph
22“b”, as to any class or series of shares, except when all of the
23following apply:
   24a.  The plan of merger or share exchange includes what is
25or would be in effect an amendment subject to subsection 6,
26paragraph “a”, subparagraph (2).
   27b.  The plan of merger or share exchange will not effect a
28substantive business combination.
   298.  Unless the articles of incorporation otherwise provide,
30approval by the corporation’s shareholders of a plan of
31merger is not required if all of the following conditions are
32satisfied:
   33a.  The corporation will survive the merger.
   34b.  Except for amendments permitted by section 490.1005, its
35articles of incorporation will not be changed.
-168-
   1c.  Each shareholder of the corporation whose shares were
2outstanding immediately before the effective date of the merger
3or share exchange will hold the same number of shares, with
4identical preferences, rights, and limitations, immediately
5after the effective date of the merger.
   6d.  The issuance in the merger of shares or other securities
7convertible into or rights exercisable for shares does not
8require a vote under section 490.621, subsection 6.
   99.  a.  If, as a result of a merger or share exchange, one
10or more shareholders of a domestic corporation would become
11subject to new interest holder liability, approval of the plan
12of merger or share exchange requires the signing in connection
13with the transaction, by each such shareholder, of a separate
14written consent to become subject to such new interest holder
15liability.
   16b.  Paragraph “a” does not apply in the case of a shareholder
17that already has interest holder liability with respect to such
18domestic corporation, if all of the following apply:
   19(1)  The new interest holder liability is with respect to
20a domestic or foreign corporation, which may be a different
21or the same domestic corporation in which the person is a
22shareholder.
   23(2)  The terms and conditions of the new interest holder
24liability are substantially identical to those of the existing
25interest holder liability, other than for changes that
26eliminate or reduce such interest holder liability.
   2710.  Unless the articles of incorporation otherwise provide,
28approval by the shareholders of a plan of merger or share
29exchange is not required if all of the following apply:
   30a.  The plan of merger or share exchange expressly permits or
31requires the merger or share exchange to be effected under this
32subsection and provides that, if the merger or share exchange
33is to be effected under this subsection, the merger or share
34exchange will be effected as soon as practicable following the
35satisfaction of the requirement set forth in paragraph “f”.
-169-
   1b.  Another party to the merger, the acquiring entity in
2the share exchange, or a parent of another party to the merger
3or the acquiring entity in the share exchange, makes an offer
4to purchase, on the terms provided in the plan of merger or
5share exchange, any and all of the outstanding shares of the
6corporation that, absent this subsection, would be entitled to
7vote on the plan of merger or share exchange, except that the
8offer may exclude shares of the corporation that are owned at
9the commencement of the offer by the corporation, the offeror,
10or any parent of the offeror, or by any wholly owned subsidiary
11of any of the foregoing.
   12c.  The offer discloses that the plan of merger or share
13exchange provides that the merger or share exchange will be
14effected as soon as practicable following the satisfaction of
15the requirement set forth in paragraph “f” and that the shares
16of the corporation that are not tendered in response to the
17offer will be treated as set forth in paragraph “h”.
   18d.  The offer remains open for at least ten days.
   19e.  The offeror purchases all shares properly tendered in
20response to the offer and not properly withdrawn.
   21f.  The shares listed below are collectively entitled to cast
22at least the minimum number of votes on the merger or share
23exchange that, absent this subsection, would be required by
24this subchapter and by the articles of incorporation for the
25approval of the merger or share exchange by the shareholders
26and by any other voting group entitled to vote on the merger
27or share exchange at a meeting at which all shares entitled to
28vote on the approval were present and voted:
   29(1)  Shares purchased by the offeror in accordance with the
30offer.
   31(2)  Shares otherwise owned by the offeror or by any parent
32of the offeror or any wholly owned subsidiary of any of the
33foregoing.
   34(3)  Shares subject to an agreement that they are to be
35transferred, contributed, or delivered to the offeror, any
-170-1parent of the offeror, or any wholly owned subsidiary of any of
2the foregoing in exchange for shares or eligible interests in
3such offeror, parent, or subsidiary.
   4g.  The offeror or a wholly owned subsidiary of the offeror
5merges with or into, or effects a share exchange in which it
6acquires shares of, the corporation.
   7h.  Each outstanding share of each class or series of shares
8of the corporation that the offeror is offering to purchase
9in accordance with the offer, and that is not purchased in
10accordance with the offer, is to be converted in the merger
11into, or into the right to receive, or is to be exchanged
12in the share exchange for, or for the right to receive,
13the same amount and kind of securities, eligible interests,
14obligations, rights, cash, or other property to be paid or
15exchanged in accordance with the offer for each share of
16that class or series of shares that is tendered in response
17to the offer, except that shares of the corporation that are
18owned by the corporation or that are described in paragraph
19“f”, subparagraph (2) or (3), need not be converted into or
20exchanged for the consideration described in this paragraph
21“h”.
   2211.  As used in subsection 10:
   23a.  “Offer” means the offer referred to in subsection 10,
24paragraph “b”.
   25b.  “Offeror” means the person making the offer.
   26c.  “Parent” of an entity means a person that owns, directly
27or indirectly, through one or more wholly owned subsidiaries,
28all of the outstanding shares of or eligible interests in that
29entity.
   30d.  Shares tendered in response to the offer shall be deemed
31to have been “purchased” in accordance with the offer at the
32earliest time as of which the following applies:
   33(1)  The offeror has irrevocably accepted those shares for
34payment.
   35(2)  Either of the following applies:
-171-
   1(a)  In the case of shares represented by certificates, the
2offeror, or the offeror’s designated depository or other agent,
3has physically received the certificates representing those
4shares.
   5(b)  In the case of shares without certificates, those shares
6have been transferred into the account of the offeror or its
7designated depository or other agent, or an agent’s message
8relating to those shares has been received by the offeror or
9its designated depository or other agent.
   10e.  “Wholly owned subsidiary” of a person means an entity of
11or in which that person owns, directly or indirectly, through
12one or more wholly owned subsidiaries, all of the outstanding
13shares or eligible interests.
   1412.  Unless the articles of incorporation otherwise provide,
15all of the following applies:
   16a.  Approval of a plan of share exchange by the shareholders
17of a domestic corporation is not required if the corporation is
18the acquiring entity in the share exchange.
   19b.  Shares not to be exchanged under the plan of share
20exchange are not entitled to vote on the plan.
21   Sec. 151.  Section 490.1105, Code 2021, is amended by
22striking the section and inserting in lieu thereof the
23following:
   24490.1105  Merger between parent and subsidiary or between
25subsidiaries.
   261.  A domestic or foreign parent entity that owns shares of
27a domestic corporation which carry at least ninety percent of
28the voting power of each class and series of the outstanding
29shares of the subsidiary that has voting power may do any of
30the following:
   31a.  Merge the subsidiary into itself, if it is a domestic
32or foreign corporation or eligible entity, or into another
33domestic or foreign corporation or eligible entity in which the
34parent entity owns at least ninety percent of the voting power
35of each class and series of the outstanding shares or eligible
-172-1interests which have voting power.
   2b.  Merge itself, if it is a domestic or foreign corporation
3or eligible entity, into such subsidiary, in either case
4without the approval of the board of directors or shareholders
5of the subsidiary, unless the articles of incorporation
6or organic rules of the parent entity or the articles of
7incorporation of the subsidiary corporation otherwise provide.
   8c.  Section 490.1104, subsection 9, applies to a merger under
9this section. The articles of merger relating to a merger
10under this section do not need to be signed by the subsidiary.
   112.  A parent entity shall, within ten days after the
12effective date of a merger approved under subsection 1, notify
13each of the subsidiary’s shareholders that the merger has
14become effective.
   153.  Except as provided in subsections 1 and 2, a merger
16between a parent entity and a domestic subsidiary corporation
17shall be governed by the provisions of this subchapter
18applicable to mergers generally.
19   Sec. 152.  Section 490.1106, Code 2021, is amended by
20striking the section and inserting in lieu thereof the
21following:
   22490.1106  Articles of merger or share exchange.
   231.  After a plan of merger has been adopted and approved as
24required by this chapter, or if the merger is being effected
25under section 490.1102, subsection 1, paragraph “b”, the merger
26has been approved as required by the organic law governing the
27parties to the merger, then articles of merger shall be signed
28by each party to the merger except as provided in section
29490.1105, subsection 1. The articles must set forth all of the
30following:
   31a.  The name, jurisdiction of formation, and type of entity
32of each party to the merger.
   33b.  The name, jurisdiction of formation, and type of entity
34of the survivor.
   35c.  If the survivor of the merger is a domestic corporation
-173-1and its articles of incorporation are amended, or if a new
2domestic corporation is created as a result of the merger, any
3of the following:
   4(1)  The amendments to the survivor’s articles of
5incorporation.
   6(2)  The articles of incorporation of the new corporation.
   7d.  If the survivor of the merger is a domestic eligible
8entity and its public organic record is amended, or if a new
9domestic eligible entity is created as a result of the merger,
10any of the following:
   11(1)  The amendments to the public organic record of the
12survivor.
   13(2)  The public organic record, if any, of the new eligible
14entity.
   15e.  If the plan of merger required approval by the
16shareholders of a domestic corporation that is a party to the
17merger, a statement that the plan was duly approved by the
18shareholders and, if voting by any separate voting group was
19required, by each such separate voting group, in the manner
20required by this chapter and the articles of incorporation.
   21f.  If the plan of merger or share exchange did not require
22approval by the shareholders of a domestic corporation that is
23a party to the merger, a statement to that effect.
   24g.  As to each foreign corporation that is a party to the
25merger, a statement that the participation of the foreign
26corporation was duly authorized as required by its organic law.
   27h.  As to each domestic or foreign eligible entity that is a
28party to the merger, a statement that the merger was approved
29in accordance with its organic law or section 490.1102,
30subsection 3.
   31i.  If the survivor is created by the merger and is a
32domestic limited liability partnership, the filing required to
33become a limited liability partnership, as an attachment.
   342.  After a plan of share exchange in which the acquired
35entity is a domestic corporation or eligible entity has been
-174-1adopted and approved as required by this chapter, articles
2of share exchange shall be signed by the acquired entity and
3the acquiring entity. The articles shall set forth all of the
4following:
   5a.  The name of the acquired entity.
   6b.  The name, jurisdiction of formation, and type of entity
7of the domestic or foreign corporation or eligible entity that
8is the acquiring entity.
   9c.  A statement that the plan of share exchange was duly
10approved by the acquired entity by all of the following:
   11(1)  The required vote or consent of each class or series of
12shares or eligible interests included in the exchange.
   13(2)  The required vote or consent of each other class or
14series of shares or eligible interests entitled to vote on
15approval of the exchange by the articles of incorporation or
16organic rules of the acquired entity or section 490.1103,
17subsection 3.
   183.  In addition to the requirements of subsection 1 or 2,
19articles of merger or share exchange may contain any other
20provision not prohibited by law.
   214.  The articles of merger or share exchange shall be
22delivered to the secretary of state for filing and, subject to
23subsection 5, the merger or share exchange shall take effect
24on the effective date determined in accordance with section
25490.123.
   265.  With respect to a merger in which one or more foreign
27entities is a party or a foreign entity created by the merger
28is the survivor, the merger itself shall become effective at
29the later of the following:
   30a.  When all documents required to be filed in foreign
31jurisdictions to effect the merger have become effective.
   32b.  When the articles of merger take effect.
   336.  Articles of merger filed under this section may be
34combined with any filing required under the organic law
35governing any domestic eligible entity involved in the
-175-1transaction if the combined filing satisfies the requirements
2of both this section and the other organic law.
3   Sec. 153.  Section 490.1107, Code 2021, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.1107  Effect of merger or share exchange.
   71.  When a merger becomes effective, all of the following
8apply:
   9a.  The domestic or foreign corporation or eligible entity
10that is designated in the plan of merger as the survivor
11continues or comes into existence, as the case may be.
   12b.  The separate existence of every domestic or foreign
13corporation or eligible entity that is a party to the merger,
14other than the survivor, ceases.
   15c.  All property owned by, and every contract right possessed
16by, each domestic or foreign corporation or eligible entity
17that is a party to the merger, other than the survivor, are the
18property and contract rights of the survivor without transfer,
19reversion, or impairment.
   20d.  All debts, obligations, and other liabilities of each
21domestic or foreign corporation or eligible entity that is
22a party to the merger, other than the survivor, are debts,
23obligations, or liabilities of the survivor.
   24e.  The name of the survivor may, but need not be,
25substituted in any pending proceeding for the name of any party
26to the merger whose separate existence ceased in the merger.
   27f.  If the survivor is a domestic entity, the articles of
28incorporation and bylaws or the organic rules of the survivor
29are amended to the extent provided in the plan of merger.
   30g.  The articles of incorporation and bylaws or the organic
31rules of a survivor that is a domestic entity and is created by
32the merger become effective.
   33h.  The shares of each domestic or foreign corporation
34that is a party to the merger, and the eligible interests in
35an eligible entity that is a party to a merger, that are to
-176-1be converted in accordance with the terms of the merger into
2shares, or other securities, eligible interests, obligations,
3rights to acquire shares, other securities, or eligible
4interests, cash, other property, or any combination of the
5foregoing, are converted, and the former holders of such shares
6or eligible interests are entitled only to the rights provided
7to them by those terms or to any rights they may have under
8subchapter XIII or the organic law governing the eligible
9entity or foreign corporation.
   10i.  Except as provided by law or the terms of the merger,
11all the rights, privileges, franchises, and immunities of each
12entity that is a party to the merger, other than the survivor,
13are the rights, privileges, franchises, and immunities of the
14survivor.
   15j.  If the survivor exists before the merger, all of the
16following apply:
   17(1)  All the property and contract rights of the survivor
18remain its property and contract rights without transfer,
19reversion, or impairment.
   20(2)  The survivor remains subject to all its debts,
21obligations, and other liabilities.
   22(3)  Except as provided by law or the plan of merger, the
23survivor continues to hold all of its rights, privileges,
24franchises, and immunities.
   252.  When a share exchange becomes effective, the shares
26or eligible interests in the acquired entity that are to be
27exchanged for shares or other securities, eligible interests,
28obligations, rights to acquire shares, other securities or
29eligible interests, cash, other property, or any combination of
30the foregoing, are entitled only to the rights provided to them
31in the plan of share exchange or to any rights they may have
32under subchapter XIII or under the organic law governing the
33acquired entity.
   343.  Except as otherwise provided in the articles of
35incorporation of a domestic corporation or the organic law
-177-1governing or organic rules of a foreign corporation or a
2domestic or foreign eligible entity, the effect of a merger or
3share exchange on interest holder liability is as follows:
   4a.  A person who becomes subject to new interest holder
5liability in respect of an entity as a result of a merger or
6share exchange shall have that new interest holder liability
7only in respect of interest holder liabilities that arise after
8the merger or share exchange becomes effective.
   9b.  If a person had interest holder liability with respect to
10a party to the merger or the acquired entity before the merger
11or share exchange becomes effective with respect to shares or
12eligible interests of such party or acquired entity which were
13exchanged in the merger or share exchange, were canceled in
14the merger, or the terms and conditions of which relating to
15interest holder liability were amended pursuant to the merger,
16then all of the following apply:
   17(1)  The merger or share exchange does not discharge that
18prior interest holder liability with respect to any interest
19holder liabilities that arose before the merger or share
20exchange becomes effective.
   21(2)  The provisions of the organic law governing any entity
22for which the person had that prior interest holder liability
23shall continue to apply to the collection or discharge of any
24interest holder liabilities preserved by subparagraph (1), as
25if the merger or share exchange had not occurred.
   26(3)  The person shall have such rights of contribution from
27other persons as are provided by the organic law governing the
28entity for which the person had that prior interest holder
29liability with respect to any interest holder liabilities
30preserved by subparagraph (1), as if the merger or share
31exchange had not occurred.
   32(4)  The person shall not, by reason of such prior interest
33holder liability, have interest holder liability with respect
34to any interest holder liabilities that arise after the merger
35or share exchange becomes effective.
-178-
   1c.  If a person has interest holder liability both before
2and after a merger becomes effective with unchanged terms and
3conditions with respect to the entity that is the survivor by
4reason of owning the same shares or eligible interests before
5and after the merger becomes effective, the merger has no
6effect on such interest holder liability.
   7d.  A share exchange has no effect on interest holder
8liability related to shares or eligible interests of the
9acquired entity that were not exchanged in the share exchange.
   104.  Upon a merger becoming effective, a foreign corporation,
11or a foreign eligible entity, that is the survivor of the
12merger is deemed to have done all of the following:
   13a.  Appointed the secretary of state as its agent for
14service of process in a proceeding to enforce the rights of
15shareholders of each domestic corporation that is a party to
16the merger who exercise appraisal rights.
   17b.  Agreed that it will promptly pay the amount, if any, to
18which such shareholders are entitled under subchapter XIII.
   195.  Except as provided in the organic law governing a party
20to a merger or in its articles of incorporation or organic
21rules, the merger does not give rise to any rights that an
22interest holder, governor, or third party would have upon a
23dissolution, liquidation, or winding up of that party. The
24merger does not require a party to the merger to wind up its
25affairs and does not constitute or cause its dissolution or
26termination.
   276.  Property held for a charitable purpose under the law of
28this state by a domestic or foreign corporation or eligible
29entity immediately before a merger becomes effective shall not,
30as a result of the transaction, be diverted from the objects
31for which it was donated, granted, devised, or otherwise
32transferred except and to the extent permitted by or pursuant
33to the laws of this state addressing cy pres or dealing with
34nondiversion of charitable assets.
   357.  A bequest, devise, gift, grant, or promise contained
-179-1in a will or other instrument of donation, subscription, or
2conveyance which is made to an entity that is a party to a
3merger that is not the survivor and which takes effect or
4remains payable after the merger inures to the survivor.
   58.  A trust obligation that would govern property if
6transferred to a nonsurviving entity applies to property
7that is transferred to the survivor after a merger becomes
8effective.
9   Sec. 154.  Section 490.1108, Code 2021, is amended by
10striking the section and inserting in lieu thereof the
11following:
   12490.1108  Abandonment of a merger or share exchange.
   131.  After a plan of merger or share exchange has been
14adopted and approved as required by this subchapter, and before
15articles of merger or share exchange have become effective, the
16plan may be abandoned by a domestic business corporation that
17is a party to the plan without action by its shareholders in
18accordance with any procedures set forth in the plan of merger
19or share exchange or, if no such procedures are set forth in
20the plan, in the manner determined by the board of directors.
   212.  If a merger or share exchange is abandoned under
22subsection 1 after articles of merger or share exchange have
23been delivered to the secretary of state for filing but before
24the merger or share exchange has become effective, a statement
25of abandonment signed by all the parties that signed the
26articles of merger or share exchange shall be delivered to the
27secretary of state for filing before the articles of merger
28or share exchange become effective. The statement shall take
29effect on filing and the merger or share exchange shall be
30deemed abandoned and shall not become effective. The statement
31of abandonment must contain all of the following:
   32a.  The name of each party to the merger or the names of the
33acquiring and acquired entities in a share exchange.
   34b.  The date on which the articles of merger or share
35exchange were filed by the secretary of state.
-180-
   1c.  A statement that the merger or share exchange has been
2abandoned in accordance with this section.
3   Sec. 155.  Section 490.1201, Code 2021, is amended by
4striking the section and inserting in lieu thereof the
5following:
   6490.1201  Disposition of assets not requiring shareholder
7approval.
   8No approval of the shareholders is required to do any of
9the following, unless the articles of incorporation otherwise
10provide:
   111.  Sell, lease, exchange, or otherwise dispose of any of
12the corporation’s assets in the usual and regular course of
13business.
   142.  Mortgage, pledge, dedicate to the repayment of
15indebtedness, whether with or without recourse, or otherwise
16encumber any or all of the corporation’s assets, regardless of
17whether in the usual and regular course of business.
   183.  Transfer any or all of the corporation’s assets to one or
19more domestic or foreign corporations or other entities, all of
20the shares or interests of which are owned by the corporation.
   214.  Distribute assets pro rata to the holders of one or more
22classes or series of the corporation’s shares.
23   Sec. 156.  Section 490.1202, Code 2021, is amended by
24striking the section and inserting in lieu thereof the
25following:
   26490.1202  Shareholder approval of certain dispositions.
   271.  A sale, lease, exchange, or other disposition of assets,
28other than a disposition described in section 490.1201,
29requires approval of the corporation’s shareholders if the
30disposition would leave the corporation without a significant
31continuing business activity. A corporation will conclusively
32be deemed to have retained a significant continuing business
33activity if it retains a business activity that represented,
34for the corporation and its subsidiaries on a consolidated
35basis, at least twenty-five percent of total assets at the
-181-1end of the most recently completed fiscal year, and either
2twenty-five percent of either income from continuing operations
3before taxes or twenty-five percent of revenues from continuing
4operations, in each case for the most recently completed fiscal
5year; but no presumption that the disposition will leave the
6corporation without a significant continuing business activity
7shall arise from the fact that the corporation’s continuing
8business activity does not equal or exceed any of these
9percentages.
   102.  To obtain the approval of the shareholders under
11subsection 1, all of the following shall apply:
   12a.  The board of directors shall first adopt a resolution
13authorizing the disposition. The disposition shall then be
14approved by the shareholders. In submitting the disposition
15to the shareholders for approval, the board of directors shall
16recommend that the shareholders approve the disposition, unless
17any of the following apply:
   18(1)  The board of directors makes a determination that
19because of conflicts of interest or other special circumstances
20it should not make such a recommendation.
   21(2)  Section 490.826 applies.
   22b.  If paragraph “a”, subparagraph (1) or (2), applies, the
23board shall inform the shareholders of the basis for its so
24proceeding.
   253.  The board of directors may set conditions for the
26approval by the shareholders of a disposition or the
27effectiveness of the disposition.
   284.  If a disposition is required to be approved by the
29shareholders under subsection 1, and if the approval is to
30be given at a meeting, the corporation shall notify each
31shareholder, regardless of whether entitled to vote, of
32the meeting of shareholders at which the disposition is
33to be submitted for approval. The notice must state that
34the purpose, or one of the purposes, of the meeting is to
35consider the disposition and must contain a description of
-182-1the disposition, including the terms and conditions of the
2disposition and the consideration to be received by the
3corporation.
   45.  Unless the articles of incorporation, bylaws, or the
5board of directors acting pursuant to subsection 3 require
6a greater vote or a greater quorum, the approval of a
7disposition by the shareholders shall require the approval
8of the shareholders at a meeting at which a quorum exists
9consisting of a majority of the votes entitled to be cast on
10the disposition.
   116.  After a disposition has been approved by the shareholders
12under this subchapter, and at any time before the disposition
13has been consummated, it may be abandoned by the corporation
14without action by the shareholders, subject to any contractual
15rights of other parties to the disposition.
   167.  A disposition of assets in the course of dissolution
17under subchapter XIV is not governed by this section.
   188.  The assets of a direct or indirect consolidated
19subsidiary shall be deemed to be the assets of the parent
20corporation for the purposes of this section.
21   Sec. 157.  Section 490.1301, Code 2021, is amended by
22striking the section and inserting in lieu thereof the
23following:
   24490.1301  Subchapter definitions.
   25As used in this subchapter:
   261.  “Affiliate” means a person that directly or indirectly
27through one or more intermediaries controls, is controlled by,
28or is under common control with another person or is a senior
29executive of such person. For purposes of section 490.1302,
30subsection 2, paragraph “d”, a person is deemed to be an
31affiliate of its senior executives.
   322.  “Corporation” means the domestic corporation that is the
33issuer of the shares held by a shareholder demanding appraisal
34and, for matters covered in sections 490.1322 through 490.1331,
35“corporation” includes the survivor of a merger.
-183-
   13.  “Fair value” means the value of the corporation’s shares
2determined according to the following:
   3a.  Immediately before the effectiveness of the corporate
4action to which the shareholder objects.
   5b.  Using customary and current valuation concepts and
6techniques generally employed for similar businesses in the
7context of the transaction requiring appraisal.
   8c.  Without discounting for lack of marketability or minority
9status except, if appropriate, for amendments to the articles
10of incorporation pursuant to section 490.1302, subsection 1,
11paragraph “d”.
   124.  “Interest” means interest from the date the corporate
13action becomes effective until the date of payment, at the rate
14of interest on judgments in this state on the effective date
15of the corporate action.
   165.  “Interested transaction” means a corporate action
17described in section 490.1302, subsection 1, other than a
18merger pursuant to section 490.1105, involving an interested
19person in which any of the shares or assets of the corporation
20are being acquired or converted. As used in this subsection:
   21a.  “Beneficial owner” means any person who, directly
22or indirectly, through any contract, arrangement, or
23understanding, other than a revocable proxy, has or shares the
24power to vote, or to direct the voting of, shares; except that
25a member of a national securities exchange is not deemed to be
26a beneficial owner of securities held directly or indirectly
27by it on behalf of another person if the member is precluded
28by the rules of the exchange from voting without instruction
29on contested matters or matters that may affect substantially
30the rights or privileges of the holders of the securities to
31be voted. When two or more persons agree to act together for
32the purpose of voting their shares of the corporation, each
33member of the group formed thereby is deemed to have acquired
34beneficial ownership, as of the date of the agreement, of all
35shares having voting power of the corporation beneficially
-184-1owned by any member of the group.
   2b.  “Excluded shares” means shares acquired pursuant to an
3offer for all shares having voting power if the offer was made
4within one year before the corporate action for consideration
5of the same kind and of a value equal to or less than that paid
6in connection with the corporate action.
   7c.  “Interested person” means a person, or an affiliate of a
8person, who at any time during the one-year period immediately
9preceding approval by the board of directors of the corporate
10action was or had any of the following:
   11(1)  Was the beneficial owner of twenty percent or more of
12the voting power of the corporation, other than as owner of
13excluded shares.
   14(2)  Had the power, contractually or otherwise, other than as
15owner of excluded shares, to cause the appointment or election
16of twenty-five percent or more of the directors to the board of
17directors of the corporation.
   18(3)  Was a senior executive or director of the corporation
19or a senior executive of any affiliate of the corporation, and
20that senior executive or director will receive, as a result
21of the corporate action, a financial benefit not generally
22available to other shareholders as such, other than any of the
23following:
   24(a)  Employment, consulting, retirement, or similar benefits
25established separately and not as part of or in contemplation
26of the corporate action.
   27(b)  Employment, consulting, retirement, or similar benefits
28established in contemplation of, or as part of, the corporate
29action that are not more favorable than those existing before
30the corporate action or, if more favorable, that have been
31approved on behalf of the corporation in the same manner as is
32provided in section 490.862.
   33(c)  In the case of a director of the corporation who will,
34in the corporate action, become a director or governor of the
35acquiror or any of its affiliates, rights, and benefits as a
-185-1director or governor that are provided on the same basis as
2those afforded by the acquiror generally to other directors or
3governors of such entity or such affiliate.
   46.  “Preferred shares” means a class or series of shares
5whose holders have preference over any other class or series of
6shares with respect to distributions.
   77.  “Senior executive” means the chief executive officer,
8chief operating officer, chief financial officer, and any
9individual in charge of a principal business unit or function.
   108.  “Shareholder” means a record shareholder, a beneficial
11shareholder, and a voting trust beneficial owner.
12   Sec. 158.  Section 490.1302, Code 2021, is amended by
13striking the section and inserting in lieu thereof the
14following:
   15490.1302  Right to appraisal.
   161.  A shareholder is entitled to appraisal rights, and to
17obtain payment of the fair value of that shareholder’s shares,
18in the event of any of the following corporate actions:
   19a.  Consummation of a merger to which the corporation is a
20party if any of the following apply:
   21(1)  Shareholder approval is required for the merger by
22section 490.1104 or would be required but for the provisions of
23section 490.1104, subsection 10, except that appraisal rights
24shall not be available to any shareholder of the corporation
25with respect to shares of any class or series that remain
26outstanding after consummation of the merger.
   27(2)  The corporation is a subsidiary and the merger is
28governed by section 490.1105.
   29b.  Consummation of a share exchange to which the corporation
30is a party the shares of which will be acquired, except that
31appraisal rights shall not be available to any shareholder of
32the corporation with respect to any class or series of shares
33of the corporation that is not acquired in the share exchange.
   34c.  Consummation of a disposition of assets pursuant to
35section 490.1202 if the shareholder is entitled to vote on
-186-1the disposition, except that appraisal rights shall not be
2available to any shareholder of the corporation with respect to
3shares of any class or series if all of the following apply:
   4(1)  Under the terms of the corporate action approved by the
5shareholders there is to be distributed to shareholders in cash
6the corporation’s net assets, in excess of a reasonable amount
7reserved to meet claims of the type described in sections
8490.1406 and 490.1407, if the distribution is made subject to
9all of the following:
   10(a)  Within one year after the shareholders’ approval of the
11action.
   12(b)  In accordance with the shareholders’ respective
13interests determined at the time of distribution.
   14(2)  The disposition of assets is not an interested
15transaction.
   16d.  An amendment of the articles of incorporation with
17respect to a class or series of shares that reduces the number
18of shares of a class or series owned by the shareholder to a
19fraction of a share if the corporation has the obligation or
20right to repurchase the fractional share so created.
   21e.  Any other merger, share exchange, disposition of assets,
22or amendment to the articles of incorporation, in each case to
23the extent provided by the articles of incorporation, bylaws,
24or a resolution of the board of directors.
   25f.  Consummation of a domestication pursuant to section
26490.920 if the shareholder does not receive shares in the
27foreign corporation resulting from the domestication that have
28terms as favorable to the shareholder in all material respects,
29and represent at least the same percentage interest of the
30total voting rights of the outstanding shares of the foreign
31corporation, as the shares held by the shareholder before the
32domestication.
   33g.  Consummation of a conversion of the corporation to a
34nonprofit corporation pursuant to section 490.930.
   35h.  Consummation of a conversion of the corporation to an
-187-1unincorporated entity pursuant to section 490.930.
   22.  Notwithstanding subsection 1, the availability of
3appraisal rights under subsection 1, paragraphs “a”, “b”, “c”,
4“d”, “f”, and “h”, shall be limited in accordance with the
5following provisions:
   6a.  Appraisal rights shall not be available for the holders
7of shares of any class or series of shares which is any of the
8following:
   9(1)  A covered security under section 18(b)(1)(A) or (B) of
10the federal Securities Act of 1933, as amended.
   11(2)  Traded in an organized market and has at least two
12thousand shareholders and a market value of at least twenty
13million dollars, exclusive of the value of such shares held
14by the corporation’s subsidiaries, senior executives and
15directors, and by any beneficial shareholder and any voting
16trust beneficial owner owning more than ten percent of such
17shares.
   18(3)  Issued by an open-end management investment company
19registered with the United States securities and exchange
20commission under the federal Investment Company Act of 1940, 15
21U.S.C. §80a-1 et seq., and which may be redeemed at the option
22of the holder at net asset value.
   23b.  The applicability of paragraph “a” shall be determined
24according to the following:
   25(1)  The record date fixed to determine the shareholders
26entitled to receive notice of the meeting of shareholders to
27act upon the corporate action requiring appraisal rights or
28in the case of an offer made pursuant to section 490.1104,
29subsection 10, the date of such offer.
   30(2)  If there is no meeting of shareholders and no offer made
31pursuant to section 490.1104, subsection 10, the day before the
32consummation of the corporate action or effective date of the
33amendment of the articles of incorporation, as applicable.
   34c.  Paragraph “a” shall not be applicable and appraisal
35rights shall be available pursuant to subsection 1 under the
-188-1following circumstances:
   2(1)  For the holders of any class or series of shares who
3are required by the terms of the corporate action requiring
4appraisal rights to accept for such shares anything other than
5cash or shares of any class or any series of shares of any
6corporation, or any other proprietary interest of any other
7entity, that satisfies the standards set forth in paragraph “a”,
8at the time the corporate action becomes effective.
   9(2)  For the holders of any class or series of shares, in the
10case of the consummation of a disposition of assets pursuant
11to section 490.1202, unless the cash, shares, or proprietary
12interests received in the disposition are, under the terms
13of the corporate action approved by the shareholders, to be
14distributed to the shareholders, as part of a distribution to
15shareholders of the net assets of the corporation in excess of
16a reasonable amount to meet claims of the type described in
17sections 490.1406 and 490.1407, if the distribution is made
18subject to all of the following:
   19(a)  Within one year after the shareholders’ approval of the
20action.
   21(b)  In accordance with the shareholders’ respective
22interests determined at the time of the distribution.
   23d.  Paragraph “a” shall not be applicable and appraisal
24rights shall be available pursuant to subsection 1 for the
25holders of any class or series of shares where the corporate
26action is an interested transaction.
   273.  Notwithstanding any other provision of this section, the
28articles of incorporation as originally filed or any amendment
29to the articles of incorporation may limit or eliminate
30appraisal rights for any class or series of preferred shares,
31except that the following shall apply:
   32a.  Except as provided in paragraph “b”, no such limitation
33or elimination shall be effective if the class or series does
34not have the right to vote separately as a voting group, alone
35or as part of a group, on the action or if the action is a
-189-1conversion under section 490.930, or a merger having a similar
2effect as a conversion in which the converted entity is an
3eligible entity.
   4b.  Any such limitation or elimination contained in an
5amendment to the articles of incorporation that limits or
6eliminates appraisal rights for any of such shares that are
7outstanding immediately before the effective date of such
8amendment or that the corporation is or may be required to
9issue or sell thereafter pursuant to any conversion, exchange,
10or other right existing immediately before the effective date
11of such amendment, shall not apply to any corporate action that
12becomes effective within one year after the effective date of
13such amendment if such action would otherwise afford appraisal
14rights.
15   Sec. 159.  Section 490.1303, Code 2021, is amended by
16striking the section and inserting in lieu thereof the
17following:
   18490.1303  Assertion of rights by nominees and beneficial
19shareholders.
   201.  A record shareholder may assert appraisal rights
21as to fewer than all the shares registered in the record
22shareholder’s name but owned by a beneficial shareholder or a
23voting trust beneficial owner only if the record shareholder
24objects with respect to all shares of a class or series owned
25by the beneficial shareholder or the voting trust beneficial
26owner and notifies the corporation in writing of the name
27and address of each beneficial shareholder or voting trust
28beneficial owner on whose behalf appraisal rights are being
29asserted. The rights of a record shareholder who asserts
30appraisal rights for only part of the shares held of record in
31the record shareholder’s name under this subsection shall be
32determined as if the shares as to which the record shareholder
33objects and the record shareholder’s other shares were
34registered in the names of different record shareholders.
   352.  A beneficial shareholder and a voting trust beneficial
-190-1owner may assert appraisal rights as to shares of any class
2or series held on behalf of the shareholder only if such
3shareholder does all of the following:
   4a.  Submits to the corporation the record shareholder’s
5written consent to the assertion of such rights no later
6than the date referred to in section 490.1322, subsection 2,
7paragraph “b”, subparagraph (2).
   8b.  Does so with respect to all shares of the class or series
9that are beneficially owned by the beneficial shareholder or
10the voting trust beneficial owner.
11   Sec. 160.  Section 490.1320, Code 2021, is amended by
12striking the section and inserting in lieu thereof the
13following:
   14490.1320  Notice of appraisal rights.
   151.  Where any corporate action specified in section
16490.1302, subsection 1, is to be submitted to a vote at a
17shareholders’ meeting, the meeting notice, or where no approval
18of such action is required pursuant to section 490.1104,
19subsection 10, the offer made pursuant to that section, must
20state that the corporation has concluded that appraisal rights
21are, are not, or may be available under this subchapter. If
22the corporation concludes that appraisal rights are or may be
23available, a copy of this subchapter must accompany the meeting
24notice or offer sent to those record shareholders entitled to
25exercise appraisal rights.
   262.  In a merger pursuant to section 490.1105, the parent
27entity shall notify in writing all record shareholders of the
28subsidiary who are entitled to assert appraisal rights that the
29corporate action became effective. Such notice shall be sent
30within ten days after the corporate action became effective and
31include the materials described in section 490.1322.
   323.  Where any corporate action specified in section
33490.1302, subsection 1, is to be approved by written consent
34of the shareholders pursuant to section 490.704, all of the
35following apply:
-191-
   1a.  Written notice that appraisal rights are, are not, or may
2be available shall be sent to each record shareholder from whom
3a consent is solicited at the time consent of such shareholder
4is first solicited and, if the corporation has concluded that
5appraisal rights are or may be available, the notice must be
6accompanied by a copy of this subchapter.
   7b.  Written notice that appraisal rights are, are not, or
8may be available must be delivered together with the notice to
9nonconsenting and nonvoting shareholders required by section
10490.704, subsections 5 and 6, may include the materials
11described in section 490.1322, and, if the corporation has
12concluded that appraisal rights are or may be available, must
13be accompanied by a copy of this subchapter.
   144.  Where corporate action described in section 490.1302,
15subsection 1, is proposed, or a merger pursuant to section
16490.1105 is effected, the notice referred to in subsection 1
17or 3, if the corporation concludes that appraisal rights are
18or may be available, and in subsection 2 must be accompanied
19by all of the following:
   20a.  Financial statements of the corporation that issued
21the shares that may be subject to appraisal, consisting of a
22balance sheet as of the end of a fiscal year ending not more
23than sixteen months before the date of the notice, an income
24statement for that year, and a cash flow statement for that
25year; provided that, if such financial statements are not
26reasonably available, the corporation shall provide reasonably
27equivalent financial information.
   28b.  The latest interim financial statements of such
29corporation, if any.
   305.  The right to receive the information described in
31subsection 4 may be waived in writing by a shareholder before
32or after the corporate action.
33   Sec. 161.  Section 490.1321, Code 2021, is amended by
34striking the section and inserting in lieu thereof the
35following:
-192-   1490.1321  Notice of intent to demand payment and consequences
2of voting or consenting.
   31.  If a corporate action specified in section 490.1302,
4subsection 1, is submitted to a vote at a shareholders’
5meeting, a shareholder who wishes to assert appraisal rights
6with respect to any class or series of shares must do all of the
7following:
   8a.  Deliver to the corporation, before the vote is taken,
9written notice of the shareholder’s intent to demand payment if
10the proposed action is effectuated.
   11b.  Not vote, or cause or permit to be voted, any shares of
12such class or series in favor of the proposed action.
   132.  If a corporate action specified in section 490.1302,
14subsection 1, is to be approved by written consent, a
15shareholder who wishes to assert appraisal rights with respect
16to any class or series of shares shall not sign a consent in
17favor of the proposed action with respect to that class or
18series of shares.
   193.  If a corporate action specified in section 490.1302,
20subsection 1, does not require shareholder approval pursuant to
21section 490.1104, subsection 10, a shareholder who wishes to
22assert appraisal rights with respect to any class or series of
23shares must do all of the following:
   24a.  Deliver to the corporation before the shares are
25purchased pursuant to the offer written notice of the
26shareholder’s intent to demand payment if the proposed action
27is effected.
   28b.  Not tender, or cause or permit to be tendered, any shares
29of such class or series in response to such offer.
   304.  A shareholder who fails to satisfy the requirements of
31subsection 1, 2, or 3 is not entitled to payment under this
32subchapter.
33   Sec. 162.  Section 490.1322, Code 2021, is amended by
34striking the section and inserting in lieu thereof the
35following:
-193-   1490.1322  Appraisal notice and form.
   21.  If a corporate action requiring appraisal rights
3under section 490.1302, subsection 1, becomes effective, the
4corporation shall deliver a written appraisal notice and form
5required by subsection 2, to all shareholders who satisfy the
6requirements of section 490.1321, subsection 1, 2, or 3. In
7the case of a merger under section 490.1105, the parent shall
8deliver an appraisal notice and form to all record shareholders
9who may be entitled to assert appraisal rights.
   102.  The appraisal notice shall be delivered no earlier than
11the date the corporate action specified in section 490.1302,
12subsection 1, became effective, and no later than ten days
13after such date, and must do all of the following:
   14a.  Supply a form that does all of the following:
   15(1)  Specifies the first date of any announcement to
16shareholders made before the date the corporate action became
17effective of the principal terms of the proposed corporate
18action.
   19(2)  If such announcement was made, requires the shareholder
20asserting appraisal rights to certify whether beneficial
21ownership of those shares for which appraisal rights are
22asserted was acquired before that date.
   23(3)  Requires the shareholder asserting appraisal rights to
24certify that such shareholder did not vote for or consent to
25the transaction as to the class or series of shares for which
26appraisal is sought.
   27b.  State all of the following:
   28(1)  Where the form shall be sent and where certificates for
29certificated shares shall be deposited and the date by which
30those certificates must be deposited, which date shall not be
31earlier than the date by which the corporation must receive the
32required form under subparagraph (2).
   33(2)  A date by which the corporation shall receive the
34form, which date shall not be fewer than forty nor more than
35sixty days after the date the appraisal notice is sent under
-194-1subsection 1, and state that the shareholder shall have waived
2the right to demand appraisal with respect to the shares unless
3the form is received by the corporation by such specified date.
   4(3)  The corporation’s estimate of the fair value of the
5shares.
   6(4)  That, if requested in writing, the corporation will
7provide, to the shareholder so requesting, within ten days
8after the date specified in subparagraph (2) the number of
9shareholders who return the forms by the specified date and the
10total number of shares owned by them.
   11(5)  The date by which the notice to withdraw under section
12490.1323 shall be received, which date shall be within twenty
13days after the date specified in subparagraph (2).
   14c.  Be accompanied by a copy of this subchapter.
15   Sec. 163.  Section 490.1323, Code 2021, is amended by
16striking the section and inserting in lieu thereof the
17following:
   18490.1323  Perfection of rights — right to withdraw.
   191.  A shareholder who receives notice pursuant to section
20490.1322 and who wishes to exercise appraisal rights shall
21sign and return the form sent by the corporation and, in
22the case of certificated shares, deposit the shareholder’s
23certificates in accordance with the terms of the notice by the
24date referred to in the notice pursuant to section 490.1322,
25subsection 2, paragraph “b”, subparagraph (2). In addition,
26if applicable, the shareholder shall certify on the form
27whether the beneficial owner of such shares acquired beneficial
28ownership of the shares before the date required to be set
29forth in the notice pursuant to section 490.1322, subsection
302, paragraph “a”, subparagraph (1). If a shareholder fails to
31make this certification, the corporation may elect to treat the
32shareholder’s shares as after-acquired shares under section
33490.1325. Once a shareholder deposits that shareholder’s
34certificates or, in the case of uncertificated shares, returns
35the signed forms, that shareholder loses all rights as a
-195-1shareholder, unless the shareholder withdraws pursuant to
2subsection 2.
   32.  A shareholder who has complied with subsection 1 may
4nevertheless decline to exercise appraisal rights and withdraw
5from the appraisal process by so notifying the corporation in
6writing by the date set forth in the appraisal notice pursuant
7to section 490.1322, subsection 2, paragraph “b”, subparagraph
8(5). A shareholder who fails to so withdraw from the appraisal
9process shall not thereafter withdraw without the corporation’s
10written consent.
   113.  A shareholder who does not sign and return the form and,
12in the case of certificated shares, deposit that shareholder’s
13share certificates where required, each by the date set forth
14in the notice described in section 490.1322, subsection 2,
15shall not be entitled to payment under this subchapter.
16   Sec. 164.  Section 490.1324, Code 2021, is amended by
17striking the section and inserting in lieu thereof the
18following:
   19490.1324  Payment.
   201.  Except as provided in section 490.1325, within thirty
21days after the form required by section 490.1322, subsection 2,
22paragraph “b”, subparagraph (2), is due, the corporation shall
23pay in cash to those shareholders who complied with section
24490.1323, subsection 1, the amount the corporation estimates to
25be the fair value of their shares, plus interest.
   262.  The payment to each shareholder pursuant to subsection 1
27must be accompanied by all of the following:
   28a.  (1)  Financial statements of the corporation that issued
29the shares to be appraised, consisting of a balance sheet as
30of the end of a fiscal year ending not more than sixteen months
31before the date of payment, an income statement for that year,
32and a cash flow statement for that year; provided that, if
33such annual financial statements are not reasonably available,
34the corporation shall provide reasonably equivalent financial
35information.
-196-
   1(2)  The latest interim financial statements of such
2corporation, if any.
   3b.  A statement of the corporation’s estimate of the fair
4value of the shares, which estimate shall equal or exceed the
5corporation’s estimate given pursuant to section 490.1322,
6subsection 2, paragraph “b”, subparagraph (3).
   7c.  A statement that shareholders described in subsection
81 have the right to demand further payment under section
9490.1326 and that if any such shareholder does not do so within
10the time period specified in section 490.1326, subsection 2,
11such shareholder shall be deemed to have accepted the payment
12under subsection 1 in full satisfaction of the corporation’s
13obligations under this subchapter.
14   Sec. 165.  Section 490.1325, Code 2021, is amended by
15striking the section and inserting in lieu thereof the
16following:
   17490.1325  After-acquired shares.
   181.  A corporation may elect to withhold payment required
19by section 490.1324 from any shareholder who was required to,
20but did not certify that beneficial ownership of all of the
21shareholder’s shares for which appraisal rights are asserted
22was acquired before the date set forth in the appraisal notice
23sent pursuant to section 490.1322, subsection 2, paragraph “a”.
   242.  If the corporation elected to withhold payment under
25subsection 1, within thirty days after the form required by
26section 490.1322, subsection 2, paragraph “b”, subparagraph
27(2), is due, the corporation shall notify all shareholders who
28are described in subsection 1 regarding all of the following:
   29a.  Of the information required by section 490.1324,
30subsection 2, paragraph “a”.
   31b.  Of the corporation’s estimate of fair value pursuant to
32section 490.1324, subsection 2, paragraph “b”.
   33c.  That they may accept the corporation’s estimate of fair
34value, plus interest, in full satisfaction of their demands or
35demand appraisal under section 490.1326.
-197-
   1d.  That those shareholders who wish to accept such offer
2shall so notify the corporation of their acceptance of the
3corporation’s offer within thirty days after receiving the
4offer.
   5e.  That those shareholders who do not satisfy the
6requirements for demanding appraisal under section 490.1326
7shall be deemed to have accepted the corporation’s offer.
   83.  Within ten days after receiving the shareholder’s
9acceptance pursuant to subsection 2, paragraph “d”, the
10corporation shall pay in cash the amount it offered under
11subsection 2, paragraph “b”, plus interest to each shareholder
12who agreed to accept the corporation’s offer in full
13satisfaction of the shareholder’s demand.
   144.  Within forty days after delivering the notice described
15in subsection 2, the corporation shall pay in cash the amount
16it offered to pay under subsection 2, paragraph “b”, plus
17interest to each shareholder described in subsection 2,
18paragraph “e”.
19   Sec. 166.  Section 490.1326, Code 2021, is amended by
20striking the section and inserting in lieu thereof the
21following:
   22490.1326  Procedure if shareholder dissatisfied with payment
23or offer.
   241.  A shareholder paid pursuant to section 490.1324 who is
25dissatisfied with the amount of the payment shall notify the
26corporation in writing of that shareholder’s estimate of the
27fair value of the shares and demand payment of that estimate,
28less any payment under section 490.1324 plus interest. A
29shareholder offered payment under section 490.1325 who is
30dissatisfied with that offer shall reject the offer and demand
31payment of the shareholder’s stated estimate of the fair value
32of the shares plus interest.
   332.  A shareholder who fails to notify the corporation
34in writing of that shareholder’s demand to be paid the
35shareholder’s stated estimate of the fair value plus interest
-198-1under subsection 1 within thirty days after receiving the
2corporation’s payment or offer of payment under section
3490.1324 or 490.1325, respectively, waives the right to demand
4payment under this section and shall be entitled only to the
5payment made or offered pursuant to those respective sections.
6   Sec. 167.  Section 490.1330, Code 2021, is amended by
7striking the section and inserting in lieu thereof the
8following:
   9490.1330  Court action.
   101.  If a shareholder makes a demand for payment under
11section 490.1326 which remains unsettled, the corporation shall
12commence a proceeding within sixty days after receiving the
13payment demand and petition the court to determine the fair
14value of the shares and accrued interest. If the corporation
15does not commence the proceeding within the sixty-day
16period, it shall pay in cash to each shareholder the amount
17the shareholder demanded pursuant to section 490.1326 plus
18interest.
   192.  The corporation shall commence the proceeding in the
20district court of the county where the corporation’s principal
21office or, if none, its registered office, in this state is
22located. If the corporation is a foreign corporation without
23a registered office in this state, it shall commence the
24proceeding in the county in this state where the principal
25office or registered office of the domestic corporation merged
26with the foreign corporation was located at the time of the
27transaction.
   283.  The corporation shall make all shareholders, regardless
29of whether they are residents of this state, whose demands
30remain unsettled parties to the proceeding as in an action
31against their shares, and all parties shall be served with a
32copy of the petition. Nonresidents may be served by registered
33or certified mail or by publication as provided by law.
   344.  The jurisdiction of the court in which the proceeding
35is commenced under subsection 2 is plenary and exclusive.
-199-1The court may appoint one or more persons as appraisers to
2receive evidence and recommend a decision on the question of
3fair value. The appraisers shall have the powers described
4in the order appointing them, or in any amendment to it. The
5shareholders demanding appraisal rights are entitled to the
6same discovery rights as parties in other civil proceedings.
7There shall be no right to a jury trial.
   85.  Each shareholder made a party to the proceeding is
9entitled to judgment for any of the following:
   10a.  The amount, if any, by which the court finds the fair
11value of the shareholder’s shares exceeds the amount paid
12by the corporation to the shareholder for such