House File 469 - Enrolled




                              HOUSE FILE       
                              BY  COMMITTEE ON JUDICIARY

                              (SUCCESSOR TO HSB 143)
 \5
                                   A BILL FOR
 \1
                                         House File 469

                             AN ACT
 RELATING TO BUSINESS CORPORATIONS, INCLUDING BY PROVIDING
    FOR THEIR ORGANIZATION AND OPERATION; PROVIDING FOR THE
    RELATIONSHIP BETWEEN SHAREHOLDERS, DIRECTORS, AND OFFICERS;
    AND INCLUDING EFFECTIVE DATE PROVISIONS.

 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
                           DIVISION I
                      PRINCIPAL PROVISIONS
    Section 1.  Section 490.140, subsections 3, 6, 9, and 26,
 Code 2013, are amended to read as follows:
    3.  "Conspicuous" means so written, displayed, or presented
  that a reasonable person against whom the writing is to operate
 should have noticed it. For example, printing text in italics,
  or boldface, or contrasting color, or typing in capitals, or
 underlined, is conspicuous.
    6.  "Deliver" or "delivery" means any method of delivery
 used in conventional commercial practice, including delivery in
 person, by hand, mail, commercial delivery, and, if authorized
 in accordance with section 490.141, by electronic transmission.
    9.  "Electronic transmission" or "electronically transmitted"
 means any form or process of communication not directly
 involving the physical transfer of paper that or another
 tangible medium, which is suitable all of the following:
    a.  Suitable for the retention, retrieval, and reproduction
 of information by the recipient.
    b.  Retrievable in paper form by the recipient through an
 automated process used in conventional commercial practice,
 unless otherwise authorized in accordance with section 490.141,
 subsection 10.
    26.  "Sign" or "signature" means, with present intent to
 authenticate or adopt a document, doing any of the following:
    a.  Executing or adopting a tangible symbol to a document,
 and includes any manual, facsimile, or conformed, or electronic
  signature.
    b.  Attaching to or logically associating with an electronic
 transmission an electronic sound, symbol, or process, and
 includes an electronic signature in an electronic transmission.
    Sec. 2.  Section 490.140, Code 2013, is amended by adding the
 following new subsections:
    NEW SUBSECTION.  7A.  "Document" means any of the following:
    a.  A tangible medium on which information is inscribed, and
 includes any writing or written instrument.
    b.  An electronic record.
    NEW SUBSECTION.  7B.  "Domestic unincorporated entity" means
 an unincorporated entity whose internal affairs are governed by
 the laws of this state.
    NEW SUBSECTION.  8A.  "Electronic" means relating to
 technology having electrical, digital, magnetic, wireless,
 optical, electromagnetic, or similar capabilities.
    NEW SUBSECTION.  8B.  "Electronic record" means information
 that is stored in an electronic or other medium and is
 retrievable in paper form through an automated process used in
 conventional commercial practice, unless otherwise authorized
 in accordance with section 490.141, subsection 10.
    NEW SUBSECTION.  11A.  "Expenses" means reasonable expenses
 of any kind that are incurred in connection with a matter.
    NEW SUBSECTION.  21B.  "Qualified director" means the same
 as defined in section 490.143.
    NEW SUBSECTION.  32.  "Writing" or "written" means any
 information in the form of a document.
    Sec. 3.  Section 490.141, Code 2013, is amended to read as
 follows:
    490.141  Notice or other communication.
    1.  Notice under this chapter must be in writing unless oral
 notice is reasonable under in the circumstances. Notice by
 electronic transmission is written notice.  Unless otherwise
 agreed between the sender and the recipient, words in a notice
 or other communication under this chapter must be in English.
    2.  Notice A notice or other communication may be
 communicated in person; by mail or other given or sent by
 any method of delivery; or by telephone, voice mail, or
 other, except that electronic means transmissions must be in
 accordance with this section. If these forms of personal
 notice methods of delivery are impracticable, a notice or
 other communication may be communicated by a newspaper of
 general circulation in the area where published; or by radio,
 television, or other form of public broadcast communication.
    3.  Written notice by a domestic or foreign corporation to
 its shareholder, if in a comprehensible form, is effective
 according to one of the following:
    a.  Upon deposit in the United States mail, if mailed
 postpaid and correctly addressed to the shareholder's address
 shown in the corporation's current record of shareholders.
    b.  When electronically transmitted to the shareholder in a
 manner authorized by the shareholder.
    4.  Written notice Notice or other communication to a
 domestic or foreign corporation authorized to transact business
 in this state may be addressed delivered to its registered
 agent at its registered office or to the secretary of the
  corporation or its secretary at its principal office shown in
 its most recent biennial report or, in the case of a foreign
 corporation that has not yet delivered a biennial report, in
 its application for a certificate of authority.
    4.  Notice or other communications may be delivered by
 electronic transmission if consented to by the recipient or if
 authorized by subsection 10.
    5.  Any consent under subsection 4 may be revoked by the
 person who consented by written or electronic notice to the
 person to whom the consent was delivered.  Any such consent is
 deemed revoked if all of the following apply:
    a.  The corporation is unable to deliver two consecutive
 electronic transmissions given by the corporation in accordance
 with such consent.
    b.  Such inability becomes known to the secretary or an
 assistant secretary of the corporation or to the transfer
 agent, or other person responsible for the giving of notice
 or other communications; provided, however, the inadvertent
 failure to treat such inability as a revocation shall not
 invalidate any meeting or other action.
    6.  Unless otherwise agreed between the sender and the
 recipient, an electronic transmission is received when all of
 the following apply:
    a.  The electronic transmission enters an information
 processing system that the recipient has designated or uses
 for the purposes of receiving electronic transmissions or
 information of the type sent, and from which the recipient is
 able to retrieve the electronic transmission.
    b.  The electronic transmission is in a form capable of being
 processed by that system.
    7.  Receipt of an electronic acknowledgment from an
 information processing system described in subsection 6,
 paragraph "a", establishes that an electronic transmission was
 received but, by itself, does not establish that the content
 sent corresponds to the content received.
    8.  An electronic transmission is received under this
 section even if no individual is aware of its receipt.
    5.  9.  Except as provided in subsection 3, written notice,
  Notice or other communication if in a comprehensible form or
 manner, is effective at the earliest of any of the following:
    a.  When received.  If in physical form, the earliest of
 when it is actually received or when it is left at any of the
 following:
    (1)  A shareholder's address shown on the corporation's
 record of shareholders maintained by the corporation under
 section 490.1601, subsection 3.
    (2)  A director's residence or usual place of business.
    (3)  The corporation's principal place of business.
    b.  Five days after its deposit in the United States mail,
 if If mailed postpaid by United States mail postage prepaid
  and correctly addressed to a shareholder, upon deposit in the
 United States mail.
    c.  On the date shown on the If mailed by United States
 mail postage prepaid and correctly addressed to a recipient
 other than a shareholder, the earliest of when it is actually
 received or as follows:
    (1)  If sent by registered or certified mail, return receipt
 requested, if sent by registered or certified mail, return
 receipt requested, and the date shown on the return receipt is
  signed by or on behalf of the addressee.
    6.  Oral notice is effective when communicated if
 communicated in a comprehensible manner.
    (2)  Five days after it is deposited in the United States
 mail.
    d.  If an electronic transmission, when it is received as
 provided in subsection 6.
    e.  If oral, when communicated.
    10.  A notice or other communication may be in the form of
 an electronic transmission that cannot be directly reproduced
 in paper form by the recipient through an automated process
 used in conventional commercial practice only if all of the
 following apply:
    a.  The electronic transmission is otherwise retrievable in
 perceivable form.
    b.  The sender and the recipient have consented in writing to
 the use of such form of electronic transmission.
    7.  11.  If this chapter prescribes notice requirements for
 notices or other communications in particular circumstances,
 those requirements govern. If articles of incorporation or
 bylaws prescribe notice requirements for notices or other
 communications, not inconsistent with this section or other
 provisions of this chapter, those requirements govern.  The
 articles of incorporation or bylaws may authorize or require
 delivery of notices of meetings of directors by electronic
 transmission.
    Sec. 4.  NEW SECTION.  490.143  Qualified director.
    1.  For purposes of this chapter, a "qualified director"
 is a director who takes action under any of the following
 provisions, if at the time action is to be taken any of the
 following applies:
    a.  Under section 490.744, the director does not have any of
 the following:
    (1)  A material interest in the outcome of the proceeding.
    (2)  A material relationship with a person who has such an
 interest.
    b.  Under section 490.853 or 490.855, all of the following
 apply:
    (1)  The director is not a party to the proceeding.
    (2)  The director is not a director as to whom a transaction
 is a director's conflicting interest transaction or who sought
 a disclaimer of the corporation's interest in a business
 opportunity under section 490.870, which transaction or
 disclaimer is challenged in the proceeding.
    (3)  The director does not have a material relationship with
 a director described in either subparagraph (1) or (2).
    c.  Under section 490.862, the director is not any of the
 following:
    (1)  A director as to whom the transaction is a director's
 conflicting interest transaction.
    (2)  A director who has a material relationship with another
 director as to whom the transaction is a director's conflicting
 interest transaction.
    d.  Under section 490.870, the director would be a qualified
 director under paragraph "c", if the business opportunity was a
 director's conflicting interest transaction.
    2.  For purposes of this section, all of the following apply:
    a.  "Material interest" means an actual or potential
 benefit or detriment, other than one which would devolve on
 the corporation or the shareholders generally, that would
 reasonably be expected to impair the objectivity of the
 director's judgment when participating in the action to be
 taken.
    b.  "Material relationship" means a familial, financial,
 professional, employment, or other relationship that would
 reasonably be expected to impair the objectivity of the
 director's judgment when participating in the action to be
 taken.
    3.  The presence of one or more of the following
 circumstances shall not automatically prevent a director from
 being a qualified director:
    a.  Nomination or election of the director to the current
 board by any director who is not a qualified director with
 respect to the matter, or by any person that has a material
 relationship with that director, acting alone or participating
 with others.
    b.  Service as a director of another corporation of which a
 director who is not a qualified director with respect to the
 matter, or any individual who has a material relationship with
 that director, is or was also a director.
    c.  With respect to action to be taken under section 490.744,
 status as a named defendant, as a director against whom action
 is demanded, or as a director who approved the conduct being
 challenged.
    Sec. 5.  NEW SECTION.  490.144  Householding.
    1.  A corporation has delivered written notice or any
 other report or statement under this chapter, the articles of
 incorporation, or the bylaws to all shareholders who share a
 common address if all of the following apply:
    a.  The corporation delivers one copy of the notice, report,
 or statement to the common address.
    b.  The corporation addresses the notice, report, or
 statement to those shareholders either as a group or to each
 of those shareholders individually or to the shareholders in a
 form to which each of those shareholders has consented.
    c.  Each of those shareholders consents to delivery of
 a single copy of such notice, report, or statement to the
 shareholders' common address.  Any such consent shall be
 revocable by any of such shareholders who deliver written
 notice of revocation to the corporation.  If such written
 notice of revocation is delivered, the corporation shall begin
 providing individual notices, reports, or other statements
 to the revoking shareholder no later than thirty days after
 delivery of the written notice of revocation.
    2.  Any shareholder who fails to object by written notice
 to the corporation, within sixty days of written notice by the
 corporation of its intention to send single copies of notices,
 reports, or statements to shareholders who share a common
 address as permitted by subsection 1, shall be deemed to have
 consented to receiving such single copy at the common address.
    Sec. 6.  Section 490.502, subsection 2, Code 2013, is amended
 to read as follows:
    2.  If a registered agent changes the street address of the
  a registered agent's business office changes, the registered
  agent may change the street address of the registered office of
 any corporation for which the person is the registered agent by
 notifying delivering a signed written notice of the change to
  the corporation in writing of the change and signing, either
 manually or in facsimile, and delivering to the secretary of
 state for filing a signed statement that complies with the
 requirements of subsection 1 and recites that the corporation
 has been notified of the change.
    Sec. 7.  Section 490.620, subsection 4, Code 2013, is amended
 to read as follows:
    4.  If a subscriber defaults in payment of money or
 property under a subscription agreement entered into before
 incorporation, the corporation may collect the amount owed
 as any other debt. Alternatively, unless the subscription
 agreement provides otherwise, the corporation may rescind the
 agreement and may sell the shares if the debt remains unpaid
 more than twenty days after the corporation sends a written
 demand for payment to the subscriber.
    Sec. 8.  Section 490.624, Code 2013, is amended by adding the
 following new subsection:
    NEW SUBSECTION.  3.  The board of directors may authorize one
 or more officers to do all of the following:
    a.  Designate the recipients of rights, options, warrants,
 or other equity compensation awards that involve the issuance
 of shares.
    b.  Determine, within an amount and subject to any other
 limitations established by the board and, if applicable, the
 stockholders, the number of such rights, options, warrants,
 or other equity compensation awards and the terms thereof to
 be received by the recipients, provided that an officer shall
 not use such authority to designate the officer or any other
 persons the board of directors may specify as a recipient of
 such rights, options, warrants, or other equity compensation
 awards.
    Sec. 9.  Section 490.701, subsection 1, Code 2013, is amended
 to read as follows:
    1.  A Unless directors are elected by written consent in
 lieu of an annual meeting as permitted by section 490.704, a
  corporation shall hold annually, at a time stated in or fixed
 in accordance with the bylaws, a meeting of shareholders;
 provided, however, that if a corporation's articles of
 incorporation authorize shareholders to cumulate their votes
 when electing directors pursuant to section 490.728, directors
 shall not be elected by less than unanimous consent.
    Sec. 10.  Section 490.703, Code 2013, is amended to read as
 follows:
    490.703  Court=ordered meeting.
    1.  The district court of the county where a corporation's
 principal office, or, if none in this state, its registered
 office, is located may summarily order a meeting to be held
 either: pursuant to any of the following:
    a.  On application of any shareholder of the corporation
 entitled to participate in an annual meeting if an annual
 meeting was not held or action by written consent in lieu
 thereof did not become effective within the earlier of six
 months after the end of the corporation's fiscal year or
 fifteen months after its last annual meeting.
    b.  On application of a shareholder who signed a demand for
 a special meeting valid under section 490.702 if either any of
 the following applies:
    (1)  Notice of the special meeting was not given within
 thirty days after the date the demand was delivered to the
 corporation's secretary.
    (2)  The special meeting was not held in accordance with the
 notice.
    2.  The court may fix the time and place of the meeting,
 ascertain the shares entitled to participate in the meeting,
 specify a record date or dates for ascertaining shareholders
 entitled to notice of and to vote at the meeting, prescribe the
 form and content of the meeting notice, fix the quorum required
 for specific matters to be considered at the meeting or direct
 that the votes represented at the meeting constitute a quorum
 for action on those matters, and enter other orders necessary
 to accomplish the purpose or purposes of the meeting.
    Sec. 11.  Section 490.704, Code 2013, is amended to read as
 follows:
    490.704  Action without meeting.
    1.  Unless otherwise provided in the articles of
 incorporation, any action required or permitted by this chapter
 to be taken at a shareholders' meeting may be taken without
 a meeting or vote, and, except as provided in subsection
 5, without prior notice, if one or more written consents
 describing the action taken are signed by the holders of
 outstanding shares having not less than ninety percent of the
 votes entitled to be cast at a meeting at which all shares
 entitled to vote on the action were present and voted, and are
 delivered to the corporation for inclusion in the minutes or
 filing with the corporate records.
    2.  A written consent shall bear the date of signature of
 each shareholder who signs the consent and no written consent
 is effective to take the corporate action referred to in
 the consent unless, within sixty days of the earliest dated
 consent delivered in the manner required by this section to the
 corporation, written consents signed by a sufficient number
 of holders to take action are delivered to the corporation.
 A written consent may be revoked by a writing to that effect
 received by the corporation prior to the receipt by the
 corporation of unrevoked written consents sufficient in number
 to take corporate action.  Except in the case of a public
 corporation, the articles of incorporation may provide that
 any action required or permitted by this chapter to be taken
 at a shareholders' meeting may be taken without a meeting, and
 without prior notice, if consents in writing setting forth the
 action so taken are signed by the holders of outstanding shares
 having not less than the minimum number of votes that would be
 required to authorize or take the action at a meeting at which
 all shares entitled to vote on the action were present and
 voted.  The written consent shall bear the date of signature
 of the shareholder who signs the consent and be delivered to
 the corporation for inclusion in the minutes or filing with the
 corporate records.
    3.  If not otherwise fixed under section 490.703 or 490.707,
 the record date for determining shareholders entitled to take
 action without a meeting is the date the first shareholder
 signs the consent under subsection 1.  If not otherwise fixed
 under section 490.707 and if prior board action is not required
 respecting the action to be taken without a meeting, the
 record date for determining the shareholders entitled to take
 action without a meeting shall be the first date on which a
 signed written consent is delivered to the corporation.  If
 not otherwise fixed under section 490.707 and if prior board
 action is required respecting the action to be taken without
 a meeting, the record date shall be the close of business on
 the day the resolution of the board taking such prior action
 is adopted.  No written consent shall be effective to take
 the corporate action referred to therein unless, within sixty
 days of the earliest date on which a consent delivered to the
 corporation as required by this section was signed, written
 consents signed by sufficient shareholders to take the action
 have been delivered to the corporation.  A written consent
 may be revoked by a writing to that effect delivered to the
 corporation before unrevoked written consents sufficient in
 number to take the corporate action are delivered to the
 corporation.
    4.  A consent signed under pursuant to the provisions of this
 section has the effect of a meeting vote and may be described
 as such in any document.  Unless the articles of incorporation,
 bylaws, or a resolution of the board of directors provides for
 a reasonable delay to permit tabulation of written consents,
 the action taken by written consent shall be effective when
 written consents signed by sufficient shareholders to take the
 action are delivered to the corporation.
    5.  If this chapter requires that notice of proposed action
 be given to shareholders not entitled to vote and the action
 is to be taken by consent of the voting shareholders, the
 corporation must give all shareholders written notice of the
 proposed action at least ten days before the action is taken.
 The notice must contain or be accompanied by the same material
 that, under this chapter, would have been required to be sent
 to shareholders not entitled to vote in a notice of meeting
 at which the proposed action would have been submitted to the
 shareholders for action.
    6.  Prompt notice of the taking of corporate action without
 a meeting by less than unanimous written consent shall be given
 to those shareholders who have not consented in writing. If
 the taking of that corporate action requires the giving of
 notice under section 490.1320, subsection 2, the notice of
 the action shall set forth the matters described in section
 490.1322.
    5.  a.  If this chapter requires that notice of a proposed
 action be given to nonvoting shareholders and the action is
 to be taken by written consent of the voting shareholders,
 the corporation must give its nonvoting shareholders written
 notice of the action not more than ten days after any of the
 following:
    (1)  Written consents sufficient to take the action have been
 delivered to the corporation.
    (2)  Such later date that tabulation of consents is completed
 pursuant to an authorization under subsection 4.
    b.  The notice must reasonably describe the action taken and
 contain or be accompanied by the same material that, under any
 provision of this chapter, would have been required to be sent
 to nonvoting shareholders in a notice of a meeting at which the
 proposed action would have been submitted to the shareholders
 for action.
    6.  a.  If action is taken by less than unanimous written
 consent of the voting shareholders, the corporation must give
 its nonconsenting voting shareholders written notice of the
 action not more than ten days after any of the following:
    (1)  Written consents sufficient to take the action have been
 delivered to the corporation.
    (2)  Such later date that tabulation of consents is completed
 pursuant to an authorization under subsection 4.
    b.  The notice must reasonably describe the action taken
 and contain or be accompanied by the same material that, under
 any provision of this chapter, would have been required to be
 sent to voting shareholders in a notice of a meeting at which
 the action would have been submitted to the shareholders for
 action.
    7.  The notice requirements in subsections 5 and 6 shall not
 delay the effectiveness of actions taken by written consent,
 and a failure to comply with such notice requirements shall
 not invalidate actions taken by written consent, provided that
 this subsection shall not be deemed to limit judicial power
 to fashion any appropriate remedy in favor of a shareholder
 adversely affected by a failure to give such notice within the
 required time period.
    Sec. 12.  Section 490.705, subsections 1 and 5, Code 2013,
 are amended to read as follows:
    1.  A corporation shall notify shareholders of the date,
 time, and place of each annual and special shareholders'
 meeting no fewer than ten nor more than sixty days before
 the meeting date.  The notice shall include the record date
 for determining the shareholders entitled to vote at the
 meeting, if such date is different than the record date for
 determining shareholders entitled to notice of the meeting.  If
 the board of directors has authorized participation by means
 of remote communication pursuant to section 490.709 for any
 class or series of shareholders, the notice to such class or
 series of shareholders shall describe the means of remote
 communication to be used. Unless this chapter or the articles
 of incorporation require otherwise, the corporation is required
 to give notice only to shareholders entitled to vote at the
 meeting as of the record date for determining the shareholders
 entitled to notice of the meeting.
    5.  Unless the bylaws require otherwise, if an annual or
 special shareholders' meeting is adjourned to a different date,
 time, or place, notice need not be given of the new date,
 time, or place if the new date, time, or place is announced at
 the meeting before adjournment. If a new record date for the
 adjourned meeting is or must be fixed under section 490.707,
 however, notice of the adjourned meeting must be given under
 this section to persons who are shareholders as of the new
 record date entitled to vote at such adjourned meeting as of
 the record date fixed for notice of such adjourned meeting.
    Sec. 13.  Section 490.707, Code 2013, is amended to read as
 follows:
    490.707  Record date.
    1.  The bylaws may fix or provide the manner of fixing
 the record date or dates for one or more voting groups in
 order to determine the shareholders entitled to notice of a
 shareholders' meeting, to demand a special meeting, to vote,
 or to take any other action. If the bylaws do not fix or
 provide for fixing a record date, the board of directors of the
 corporation may fix a future date as the record date.
    2.  A record date fixed under this section shall not be more
 than seventy days before the meeting or action requiring a
 determination of shareholders.
    3.  A determination of shareholders entitled to notice of
 or to vote at a shareholders' meeting is effective for any
 adjournment of the meeting unless the board of directors fixes
 a new record date or dates, which it must do if the meeting is
 adjourned to a date more than one hundred twenty days after the
 date fixed for the original meeting.
    4.  If a court orders a meeting adjourned to a date more than
 one hundred twenty days after the date fixed for the original
 meeting, it may provide that the original record date continues
 in effect or it may fix a new record date or dates.
    5.  The record date for a shareholders' meeting fixed by
 or in the manner provided in the bylaws or by the board of
 directors shall be the record date for determining shareholders
 entitled both to notice of and to vote at the shareholders'
 meeting unless, in the case of a record date fixed by the
 board of directors and to the extent not prohibited by the
 bylaws, the board, at the time it fixes the record date for
 shareholders entitled to notice of the meeting, fixes a later
 record date on or before the date of the meeting to determine
 the shareholders entitled to vote at the meeting.
    Sec. 14.  NEW SECTION.  490.709  Remote participation in
 annual and special meetings.
    1.  Shareholders of any class or series may participate in
 any meeting of shareholders by means of remote communication to
 the extent the board of directors authorizes such participation
 for such class or series. Participation by means of remote
 communication shall be subject to such guidelines and
 procedures as the board of directors adopts, and shall be in
 conformity with subsection 2.
    2.  Shareholders participating in a shareholders' meeting
 by means of remote communication shall be deemed present and
 may vote at such a meeting if the corporation has implemented
 reasonable measures to do all of the following:
    a.  Verify that each person participating remotely is a
 shareholder.
    b.  Provide such shareholders a reasonable opportunity to
 participate in the meeting and to vote on matters submitted to
 the shareholders, including an opportunity to communicate, and
 to read or hear the proceedings of the meeting, substantially
 concurrently with such proceedings.
    Sec. 15.  Section 490.720, Code 2013, is amended to read as
 follows:
    490.720  Shareholders' list for meeting.
    1.  After fixing a record date for a meeting, a corporation
 shall prepare an alphabetical list of the names of all its
 shareholders who are entitled to notice of a shareholders'
 meeting. The If the board of directors fixes a different
 record date under section 490.707, subsection 5, to determine
 the shareholders entitled to vote at the meeting, a corporation
 also shall prepare an alphabetical list of the names of all
 its shareholders who are entitled to vote at the meeting. A
  list must be arranged by voting group and within each voting
 group by class or series of shares, and show the address of and
 number of shares held by each shareholder.
    2.  The shareholders' list for notice must be available for
 inspection by any shareholder beginning two business days after
 notice of the meeting is given for which the list was prepared
 and continuing through the meeting, at the corporation's
 principal office or at a place identified in the meeting notice
 in the city where the meeting will be held.  A shareholders'
 list for voting must be similarly available for inspection
 promptly after the record date for voting. A shareholder,
 or a shareholder's agent or attorney, is entitled on written
 demand to inspect and, subject to the requirements of section
 490.1602, subsection 3 4, to copy the a list, during regular
 business hours and at the person's expense, during the period
 it is available for inspection.
    3.  The corporation shall make the shareholders' list of
 shareholders entitled to vote available at the meeting, and any
 shareholder, or a shareholder's agent or attorney, is entitled
 to inspect the list at any time during the meeting or any
 adjournment.
    4.  If the corporation refuses to allow a shareholder, or a
 shareholder's agent or attorney, to inspect the a shareholders'
 list before or at the meeting, or copy the a list as permitted
 by subsection 2, the district court of the county where a
 corporation's principal office or, if none in this state,
 its registered office, is located, on application of the
 shareholder, may summarily order the inspection or copying at
 the corporation's expense and may postpone the meeting for
 which the list was prepared until the inspection or copying is
 complete.
    5.  Refusal or failure to prepare or make available the a
  shareholders' list does not affect the validity of action taken
 at the meeting.
    Sec. 16.  Section 490.722, subsection 2, Code 2013, is
 amended by striking the subsection.
    Sec. 17.  Section 490.724, subsection 4, Code 2013, is
 amended to read as follows:
    4.  The corporation and its officer or agent who accepts
 or rejects a vote, consent, waiver, or proxy appointment in
 good faith and in accordance with the standards of this section
 or section 490.722, subsection 2, are not liable in damages
 to the shareholder for the consequences of the acceptance or
 rejection.
    Sec. 18.  Section 490.728, Code 2013, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  4.  Shares otherwise entitled to vote
 cumulatively shall not be voted cumulatively at a particular
 meeting unless any of the following applies:
    a.  The meeting notice or proxy statement accompanying
 the notice states conspicuously that cumulative voting is
 authorized.
    b.  A shareholder who has the right to cumulate the
 shareholder's votes gives notice to the corporation not less
 than forty=eight hours before the time set for the meeting of
 the shareholder's intent to cumulate votes during the meeting,
 and if one shareholder gives this notice all other shareholders
 in the same voting group participating in the election are
 entitled to cumulate their votes without giving further notice.
    Sec. 19.  Section 490.732, subsection 4, Code 2013, is
 amended to read as follows:
    4.  An agreement authorized by this section shall cease
 to be effective when shares of the corporation are listed
 on a national securities exchange or regularly traded in a
 market maintained by one or more members of a national or
 affiliated securities association the corporation becomes a
 public corporation. If the agreement ceases to be effective
 for any reason, the board of directors may, if the agreement
 is contained or referred to in the corporation's articles of
 incorporation or bylaws, adopt an amendment to the articles of
 incorporation or bylaws, without shareholder action, to delete
 the agreement and any references to it.
    Sec. 20.  Section 490.742, subsection 2, Code 2013, is
 amended to read as follows:
    2.  Ninety days have expired from the date delivery of
  the demand was made, unless the shareholder has earlier been
 notified that the demand has been rejected by the corporation
 or unless irreparable injury to the corporation would result by
 waiting for the expiration of the ninety=day period.
    Sec. 21.  Section 490.744, Code 2013, is amended to read as
 follows:
    490.744  Dismissal.
    1.  A derivative proceeding shall be dismissed by the court
 on motion by the corporation if one of the groups specified
 in subsection 2 or 6 5 has determined in good faith after
 conducting a reasonable inquiry upon which its conclusions are
 based that the maintenance of the derivative proceeding is
 not in the best interests of the corporation. A corporation
 moving to dismiss on this basis shall submit in support of the
 motion a short and concise statement of the reasons for its
 determination.
    2.  Unless a panel is appointed pursuant to subsection 6 5,
 the determination in subsection 1 shall be made by one any of
 the following:
    a.  A majority vote of independent qualified directors
 present at a meeting of the board of directors if the
 independent qualified directors constitute a quorum.
    b.  A majority vote of a committee consisting of two or more
 independent qualified directors appointed by majority vote of
 independent qualified directors present at a meeting of the
 board of directors, whether or not such independent qualified
  directors constitute a quorum.
    3.  None of the following shall by itself cause a director to
 be considered not independent for purposes of this section:
    a.  The nomination or election of the director by persons
 who are defendants in the derivative proceeding or against whom
 action is demanded.
    b.  The naming of the director as a defendant in the
 derivative proceeding or as a person against whom action is
 demanded.
    c.  The approval by the director of the act being challenged
 in the derivative proceeding or demand if the act resulted in
 no personal benefit to the director.
    4.3.  a.  If a derivative proceeding is commenced
 after a determination has been made rejecting a demand by a
 shareholder, the complaint shall allege with particularity
 facts establishing one any of the following:
    (1)  That a majority of the board of directors did not
 consist of independent qualified directors at the time the
 determination was made.
    (2)  That the requirements of subsection 1 have not been met.
    b.  All discovery and other proceedings shall be stayed
 during the pendency of any motion to dismiss unless the
 court finds upon the motion of any party that particularized
 discovery is necessary to preserve evidence or prevent undue
 prejudice to that party.
    5.  4.  If a majority of the board of directors does not
 consist consisted of independent qualified directors at the
 time the determination is was made, the corporation plaintiff
  shall have the burden of proving that the requirements of
 subsection 1 have not been met; if not, the corporation shall
 have the burden of proving that the requirements of subsection
 1 have been met. If a majority of the board of directors
 consists of independent directors at the time the determination
 is made, the plaintiff shall have the burden of proving that
 the requirements of subsection 1 have not been met.
    6.  5.  The court may appoint a panel of one or more
 independent persons upon motion by the corporation to make
 a determination whether the maintenance of the derivative
 proceeding is in the best interests of the corporation. In
 such case, the plaintiff shall have the burden of proving that
 the requirements of subsection 1 have not been met.
    Sec. 22.  Section 490.746, Code 2013, is amended to read as
 follows:
    490.746  Payment of expenses.
    On termination of the derivative proceeding, the court may
 do either any of the following:
    1.  Order the corporation to pay the plaintiff's reasonable
  expenses, including attorney fees incurred in the proceeding,
 if it finds that the proceeding has resulted in a substantial
 benefit to the corporation.
    2.  Order the plaintiff to pay any defendant's reasonable
  expenses, including attorney fees incurred in defending the
 proceeding, if it finds that the proceeding was commenced or
 maintained without reasonable cause or for an improper purpose.
    Sec. 23.  NEW SECTION.  490.748  Shareholder action to appoint
 custodian or receiver.
    1.  The district court may appoint one or more persons
 to be custodians, or, if the corporation is insolvent, to
 be receivers, of and for a corporation in a proceeding by a
 shareholder where it is established that any of the following
 applies:
    a.  The directors are deadlocked in the management of
 the corporate affairs, the shareholders are unable to break
 the deadlock, and irreparable injury to the corporation is
 threatened or being suffered.
    b.  The directors or those in control of the corporation are
 acting fraudulently and irreparable injury to the corporation
 is threatened or being suffered.
    2.  a.  The district court may issue injunctions, appoint a
 temporary custodian or temporary receiver with all the powers
 and duties the court directs, take other action to preserve the
 corporate assets wherever located, and carry on the business of
 the corporation until a full hearing is held.
    b.  The district court shall hold a full hearing, after
 notifying all parties to the proceeding and any interested
 persons designated by the court, before appointing a custodian
 or receiver.
    c.  The district court has jurisdiction over the corporation
 and all of its property, wherever located.
    3.  The district court may appoint an individual or domestic
 or foreign corporation, authorized to transact business in this
 state, as a custodian or receiver and may require the custodian
 or receiver to post bond, with or without sureties, in an
 amount the court directs.
    4.  The district court shall describe the powers and duties
 of the custodian or receiver in its appointing order, which may
 be amended from time to time.  Among other powers, all of the
 following apply:
    a.  A custodian may exercise all of the powers of the
 corporation, through or in place of its board of directors, to
 the extent necessary to manage the business and affairs of the
 corporation.
    b.  A receiver may do any of the following:
    (1)  Dispose of all or any part of the assets of the
 corporation wherever located, at a public or private sale, if
 authorized by the district court.
    (2)  Sue and defend in the receiver's own name as receiver in
 all courts of this state.
    5.  The district court during a custodianship may
 redesignate the custodian as a receiver, and during a
 receivership may redesignate the receiver as a custodian, if
 doing so is in the best interests of the corporation.
    6.  The district court from time to time during the
 custodianship or receivership may order compensation paid and
 expense disbursements or reimbursements made to the custodian
 or receiver from the assets of the corporation or proceeds from
 the sale of its assets.
    Sec. 24.  Section 490.801, Code 2013, is amended to read as
 follows:
    490.801  Requirement for and duties functions of board of
 directors.
    1.  Except as provided in section 490.732, each corporation
 must have a board of directors.
    2.  All corporate powers shall be exercised by or under the
 authority of the board of directors of the corporation, and
 the business and affairs of the corporation shall be managed
 by or under the direction, and subject to the oversight, of,
  its board of directors, subject to any limitation set forth in
 the articles of incorporation, or in an agreement authorized
 under section 490.732.
    Sec. 25.  Section 490.807, Code 2013, is amended to read as
 follows:
    490.807  Resignation of directors.
    1.  A director may resign at any time by delivering a
  written notice resignation to the board of directors, or its
 chairperson chair, or to the secretary of the corporation.
    2.  A resignation is effective when the notice resignation
  is delivered unless the notice resignation specifies a
 later effective date or an effective date determined upon
 the happening of an event or events.  A resignation that is
 conditioned upon failing to receive a specified vote for
 election as a director may provide that it is irrevocable.
    Sec. 26.  Section 490.810, subsection 2, Code 2013, is
 amended to read as follows:
    2.  If the vacant office was held by a director elected by
 a voting group of shareholders, only the holders of shares of
 that voting group are entitled to vote to fill the vacancy
 if it is filled by the shareholders, and only the directors
 elected by that voting group are entitled to fill the vacancy
 if it is filled by the directors.
    Sec. 27.  NEW SECTION.  490.826  Submission of matters for
 shareholder vote.
    A corporation may agree to submit a matter to a vote of its
 shareholders even if, after approving the matter, the board of
 directors determines it no longer recommends the matter.
    Sec. 28.  Section 490.830, Code 2013, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  2A.  In discharging board or committee
 duties a director shall disclose, or cause to be disclosed,
 to the other board or committee members information which
 the director knows is not already known by them but is known
 by the director to be material to the discharge of their
 decision=making or oversight functions, except that disclosure
 is not required to the extent that the director reasonably
 believes that doing so would violate a duty imposed under law,
 a legally enforceable obligation of confidentiality, or a
 professional ethics rule.
    Sec. 29.  Section 490.831, subsection 1, paragraph a,
 subparagraph (1), Code 2013, is amended to read as follows:
    (1)  No defense interposed by the director based on any of
 the following precludes liability:
    (a)  A provision in the articles of incorporation authorized
 by section 490.202, subsection 2, paragraph "d", or the.
    (b)  The protection afforded by section 490.832 if
 interposed as a bar to the proceeding by the director, does not
 preclude liability 490.861 for action taken in compliance with
 section 490.862 or 490.863.
    (c)  The protection afforded by section 490.870.
    Sec. 30.  Section 490.831, subsection 3, paragraphs a and b,
 Code 2013, are amended to read as follows:
    a.  In any instance where fairness is at issue, such
 as consideration of the fairness of a transaction to the
 corporation under section 490.832 490.861, subsection 2,
 paragraph "c", alter the burden of proving the fact or lack of
 fairness otherwise applicable.
    b.  Alter the fact or lack of liability of a director
 under another section of this chapter, such as the provisions
 governing the consequences of an unlawful distribution under
 section 490.833 or a transactional interest under section
 490.832 490.861.
    Sec. 31.  Section 490.841, Code 2013, is amended to read as
 follows:
    490.841  Duties Functions of officers.
    Each officer has the authority and shall perform the duties
  functions set forth in the bylaws or, to the extent consistent
 with the bylaws, the duties functions prescribed by the board
 of directors or by direction of an officer authorized by the
 board of directors to prescribe the duties functions of other
 officers.
    Sec. 32.  Section 490.842, subsection 1, unnumbered
 paragraph 1, Code 2013, is amended to read as follows:
    An officer when performing in such capacity shall has the
 duty to act in conformity with all of the following:
    Sec. 33.  Section 490.850, subsection 2, Code 2013, is
 amended to read as follows:
    2.  "Director" or "officer" means an individual who is or
 was a director or officer, respectively, of a corporation or
 who, while a director or officer of the corporation, is or was
 serving at the corporation's request as a director, officer,
 partner, trustee, employee, or agent of another domestic
 or foreign corporation, partnership, joint venture, trust,
 employee benefit plan, or other entity. A director or officer
 is considered to be serving an employee benefit plan at the
 corporation's request if the director's individual's duties to
 the corporation also impose duties on, or otherwise involve
 services by, that director the individual to the plan or to
 participants in or beneficiaries of the plan. "Director" or
 "officer" includes, unless the context requires otherwise, the
 estate or personal representative of a director or officer.
    Sec. 34.  Section 490.850, subsections 3 and 4, Code 2013,
 are amended by striking the subsections.
    Sec. 35.  Section 490.850, subsection 5, Code 2013, is
 amended to read as follows:
    5.  "Liability" means the obligation to pay a judgment,
 settlement, penalty, fine, including an excise tax assessed
 with respect to an employee benefit plan, or reasonable
  expenses incurred with respect to a proceeding.
    Sec. 36.  Section 490.853, Code 2013, is amended to read as
 follows:
    490.853  Advance for expenses.
    1.  A corporation may, before final disposition of
 a proceeding, advance funds to pay for or reimburse the
 reasonable expenses incurred in connection with the proceeding
  by a director an individual who is a party to a the proceeding
 because the person is a director if the person that individual
 is a member of the board of directors if the director delivers
 all of the following to the corporation:
    a.  A signed written affirmation of the director's good
 faith belief that the director has met the relevant standard
 of conduct described in section 490.851 has been met by the
 director or that the proceeding involved conduct for which
 liability has been eliminated under a provision of the articles
 of incorporation as authorized by section 490.202, subsection
 2, paragraph "d".
    b.  The director's A signed written undertaking of the
 director to repay any funds advanced if the director is not
 entitled to mandatory indemnification under section 490.852 and
 it is ultimately determined under section 490.854 or section
  490.855 that the director has not met the relevant standard of
 conduct described in section 490.851.
    2.  The undertaking required by subsection 1, paragraph "b",
 must be an unlimited general obligation of the director but
 need not be secured and may be accepted without reference to
 the financial ability of the director to make repayment.
    3.  Authorizations under this section shall be made
 according to one any of the following:
    a.  By the board of directors as follows:
    (1)  If there are two or more disinterested qualified
  directors, by a majority vote of all the disinterested
  qualified directors, a majority of whom shall for such purpose
 constitute a quorum, or by a majority of the members of a
 committee of two or more disinterested qualified directors
 appointed by such a vote.
    (2)  If there are fewer than two disinterested qualified
  directors, by the vote necessary for action by the board
 in accordance with section 490.824, subsection 3, in which
 authorization directors who do are not qualify as disinterested
  qualified directors may participate.
    b.  By the shareholders, but shares owned by or voted under
 the control of a director who at the time does not qualify as is
 not a disinterested qualified director may shall not be voted
 on the authorization.
    Sec. 37.  Section 490.855, Code 2013, is amended to read as
 follows:
    490.855  Determination and authorization of indemnification.
    1.  A corporation shall not indemnify a director under
 section 490.851 unless authorized for a specific proceeding
 after a determination has been made that indemnification of
 the director is permissible because the director has met the
 relevant standard of conduct set forth in section 490.851.
    2.  The determination shall be made by any of the following:
    a.  If there are two or more disinterested qualified
  directors, by the board of directors by a majority vote of all
 the disinterested qualified directors, a majority of whom shall
 for such purpose constitute a quorum, or by a majority of the
 members of a committee of two or more disinterested qualified
  directors appointed by such a vote.
    b.  By special legal counsel selected in one of the following
 manners:
    (1)  Selected in the manner prescribed in paragraph "a".
    (2)  If there are fewer than two disinterested qualified
  directors, selected by the board of directors, in which
 selection directors who do not qualify as disinterested are not
 qualified directors may participate.
    c.  By the shareholders, but shares owned by or voted under
 the control of a director who at the time does not qualify as a
 disinterested is not a qualified director shall not be voted on
 the determination.
    3.  Authorization of indemnification shall be made in
 the same manner as the determination that indemnification
 is permissible, except that if there are fewer than two
 disinterested qualified directors or if the determination is
 made by special legal counsel, authorization of indemnification
 shall be made by those entitled under subsection 2, paragraph
 "b", to select special legal counsel under subsection 2,
 paragraph "b", subparagraph (2).
    Sec. 38.  Section 490.858, Code 2013, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  1A.  A right of indemnification or to
 advances for expenses created by this division or under
 subsection 1 and in effect at the time of an act or omission
 shall not be eliminated or impaired with respect to such act
 or omission by an amendment of the articles of incorporation
 or bylaws or a resolution of the directors or shareholders,
 adopted after the occurrence of such act or omission, unless,
 in the case of a right created under subsection 1, the
 provision creating such right and in effect at the time of
 such act or omission explicitly authorizes such elimination or
 impairment after such act or omission has occurred.
    Sec. 39.  Section 490.858, subsection 3, Code 2013, is
 amended to read as follows:
    3.  A Subject to subsection 1A, a corporation may, by a
 provision in its articles of incorporation, limit any of the
 rights to indemnification or advance for expenses created by or
 pursuant to this part.
    Sec. 40.  NEW SECTION.  490.860  Part definitions.
    As used in this part, unless the context otherwise requires:
    1.  "Control", including the term "controlled by", means any
 of the following:
    a.  Having the power, directly or indirectly, to elect or
 remove a majority of the members of the board of directors
 or other governing body of an entity, whether through the
 ownership of voting shares or interests, by contract, or
 otherwise.
    b.  Being subject to a majority of the risk of loss from the
 entity's activities or entitled to receive a majority of the
 entity's residual returns.
    2.  "Director's conflicting interest transaction" means
 a transaction effected or proposed to be effected by the
 corporation, or by an entity controlled by the corporation to
 which, or respecting which, any of the following applies:
    a.  To which, at the relevant time, the director is a party.
    b.  Respecting which, at the relevant time, the director
 had knowledge and a material financial interest known to the
 director.
    c.  Respecting which, at the relevant time, the director knew
 that a related person was a party or had a material financial
 interest.
    3.  "Fair to the corporation" means, for purposes of section
 490.861, subsection 2, paragraph "c", that the transaction
 as a whole was beneficial to the corporation, taking into
 appropriate account whether it was all of the following:
    a.  Fair in terms of the director's dealings with the
 corporation.
    b.  Comparable to what might have been obtainable in an arm's
 length transaction, given the consideration paid or received
 by the corporation.
    4.  "Material financial interest" means a financial interest
 in a transaction that would reasonably be expected to impair
 the objectivity of the director's judgment when participating
 in action on the authorization of the transaction.
    5.  "Related person" means any of the following:
    a.  The director's spouse.
    b.  A child, stepchild, grandchild, parent, stepparent,
 grandparent, sibling, step sibling, half sibling, aunt, uncle,
 niece, or nephew, or spouse of any thereof, of the director or
 of the director's spouse.
    c.  An individual living in the same home as the director.
    d.  An entity, other than the corporation or an entity
 controlled by the corporation, controlled by the director or
 any person specified in this subsection.
    e.  A domestic or foreign person who is any of the following:
    (1)  A business or nonprofit corporation, other than the
 corporation or an entity controlled by the corporation, of
 which the director is a director.
    (2)  An unincorporated entity of which the director is a
 general partner or a member of the governing body.
    (3)  An individual, trust, or estate for whom or of which the
 director is a trustee, guardian, personal representative, or
 like fiduciary.
    f.  A person that is, or an entity that is controlled by, an
 employer of the director.
    6.  "Relevant time" means any of the following:
    a.  The time at which directors' action respecting the
 transaction is taken in compliance with section 490.862.
    b.  If the transaction is not brought before the board of
 directors of the corporation, or its committee, for action
 under section 490.862, at the time the corporation, or an
 entity controlled by the corporation, becomes legally obligated
 to consummate the transaction.
    7.  "Required disclosure" means disclosure of all of the
 following:
    a.  The existence and nature of the director's conflicting
 interest.
    b.  All facts known to the director respecting the subject
 matter of the transaction that a director free of such
 conflicting interest would reasonably believe to be material in
 deciding whether to proceed with the transaction.
    Sec. 41.  NEW SECTION.  490.861  Judicial action.
    1.  A transaction effected or proposed to be effected by the
 corporation, or by an entity controlled by the corporation,
 shall not be the subject of equitable relief, or give rise to
 an award of damages or other sanctions against a director of
 the corporation, in a proceeding by a shareholder or by or in
 the right of the corporation, on the ground that the director
 has an interest respecting the transaction, if it is not a
 director's conflicting interest transaction.
    2.  A director's conflicting interest transaction may
 not be the subject of equitable relief, or give rise to an
 award of damages or other sanctions against a director of the
 corporation, in a proceeding by a shareholder or by or in the
 right of the corporation, on the ground that the director has
 an interest respecting the transaction, if any of the following
 apply:
    a.  Directors' action respecting the transaction was taken in
 compliance with section 490.862 at any time.
    b.  Shareholders' action respecting the transaction was taken
 in compliance with section 490.863 at any time.
    c.  The transaction, judged according to the circumstances
 at the relevant time, is established to have been fair to the
 corporation.
    Sec. 42.  NEW SECTION.  490.862  Directors' action.
    1.  Directors' action respecting a director's conflicting
 interest transaction is effective for purposes of section
 490.861, subsection 2, paragraph "a", if the transaction has
 been authorized by the affirmative vote of a majority, but
 no fewer than two, of the qualified directors who voted on
 the transaction, after required disclosure by the conflicted
 director of information not already known by such qualified
 directors, or after modified disclosure in compliance with
 subsection 2, provided that all of the following apply:
    a.  The qualified directors have deliberated and voted
 outside the presence of and without the participation by any
 other director.
    b.  Where the action has been taken by a committee, all
 members of the committee were qualified directors, and any of
 the following apply:
    (1)  The committee was composed of all the qualified
 directors on the board of directors.
    (2)  The members of the committee were appointed by the
 affirmative vote of a majority of the qualified directors on
 the board.
    2.  Notwithstanding subsection 1, when a transaction is
 a director's conflicting interest transaction only because a
 related person described in section 490.860, subsection 5,
 paragraph "e" or "f", is a party to or has a material financial
 interest in the transaction, the conflicted director is not
 obligated to make required disclosure to the extent that the
 director reasonably believes that doing so would violate a
 duty imposed under law, a legally enforceable obligation of
 confidentiality, or a professional ethics rule, provided that
 the conflicted director discloses to the qualified directors
 voting on the transaction all of the following:
    a.  All information required to be disclosed that is not so
 violative.
    b.  The existence and nature of the director's conflicting
 interest.
    c.  The nature of the conflicted director's duty not to
 disclose the confidential information.
    3.  A majority, but no fewer than two, of all the qualified
 directors on the board of directors, or on the committee,
 constitutes a quorum for purposes of action that complies with
 this section.
    4.  Where directors' action under this section does not
 satisfy a quorum or voting requirement applicable to the
 authorization of the transaction by reason of the articles of
 incorporation, the bylaws, or a provision of law, independent
 action to satisfy those authorization requirements must be
 taken by the board of directors or a committee, in which action
 directors who are not qualified directors may participate.
    Sec. 43.  NEW SECTION.  490.863  Shareholders' action.
    1.  a.  Shareholders' action respecting a director's
 conflicting interest transaction is effective for purposes of
 section 490.861, subsection 2, paragraph "b", if a majority of
 the votes cast by the holders of all qualified shares are in
 favor of the transaction after all of the following occur:
    (1)  Notice to shareholders describing the action to be taken
 respecting the transaction.
    (2)  Provision to the corporation of the information
 referred to in subsection 2.
    (3)  Communication to the shareholders entitled to vote
 on the transaction of the information that is the subject of
 required disclosure, to the extent the information is not known
 by them.
    b.  In the case of shareholders' action at a meeting, the
 shareholders entitled to vote shall be determined as of the
 record date for notice of the meeting.
    2.  A director who has a conflicting interest respecting
 the transaction shall, before the shareholders' vote, inform
 the secretary or other officer or agent of the corporation
 authorized to tabulate votes, in writing, of the number of
 shares that the director knows are not qualified shares under
 subsection 3, and the identity of the holders of those shares.
    3.  For purposes of this section, all of the following apply:
    a.  "Holder" means and "held by" refers to shares held by
 both a record shareholder, as defined in section 490.1301,
 subsection 7, and a beneficial shareholder, as defined in
 490.1301, subsection 2.
    b.  "Qualified shares" means all shares entitled to be
 voted with respect to the transaction except for shares that
 the secretary or other officer or agent of the corporation
 authorized to tabulate votes either knows, or under subsection
 2 is notified, are held by any of the following:
    (1)  A director who has a conflicting interest respecting the
 transaction.
    (2)  A related person of the director, excluding a person
 described in section 490.860, subsection 5, paragraph "f".
    4.  A majority of the votes entitled to be cast by the
 holders of all qualified shares constitutes a quorum for
 purposes of compliance with this section. Subject to the
 provisions of subsection 5, shareholders' action that otherwise
 complies with this section is not affected by the presence of
 holders, or by the voting, of shares that are not qualified
 shares.
    5.  If a shareholders' vote does not comply with subsection
 1 solely because of a director's failure to comply with
 subsection 2, and if the director establishes that the failure
 was not intended to influence and did not in fact determine the
 outcome of the vote, the court may take such action respecting
 the transaction and the director, and may give such effect,
 if any, to the shareholders' vote, as the court considers
 appropriate in the circumstances.
    6.  Where shareholders' action under this section does
 not satisfy a quorum or voting requirement applicable to the
 authorization of the transaction by reason of the articles of
 incorporation, the bylaws, or a provision of law, independent
 action to satisfy those authorization requirements must be
 taken by the shareholders, in which action shares that are not
 qualified shares may participate.
    Sec. 44.  Section 490.870, subsection 1, paragraphs a and b,
 Code 2013, are amended to read as follows:
    a.  Action by qualified directors disclaiming the
 corporation's interest in the opportunity is taken in
 compliance with the procedures set forth in section 490.832
  490.862, as if the decision being made concerned a director's
 conflicting interest transaction.
    b.  Shareholders' action disclaiming the corporation's
 interest in the opportunity is taken in compliance with the
 procedure set forth in section 490.832 490.863, as if the
 decision being made concerned a director's conflicting interest
 transaction; except that, rather than making the disclosure
  "required disclosure" as required defined in section 490.832
  490.860, in each case the director shall have made prior
 disclosure to those acting on behalf of the corporation of all
 material facts concerning the business opportunity that are
 then known to the director.
    Sec. 45.  Section 490.1003, subsection 2, Code 2013, is
 amended to read as follows:
    2.  a.  Except as provided in sections 490.1005, 490.1007,
 and 490.1008, after adopting the proposed amendment, the board
 of directors must submit the amendment to the shareholders for
 their approval. The board of directors must also transmit to
 the shareholders a recommendation that the shareholders approve
 the amendment, unless any of the following apply:
    (1)  The board of directors makes a determination that
 because of conflicts of interest or other special circumstances
 it should not make such a recommendation, in which case the.
    (2)  Section 490.826 applies.
    b.  If paragraph "a", subparagraph (1) or (2), applies, the
 board of directors must transmit to the shareholders the basis
 for the determination so proceeding.
    Sec. 46.  Section 490.1104, subsection 2, Code 2013, is
 amended to read as follows:
    2.  a.  Except as provided in subsection 7 and in section
 490.1105, after adopting the plan of merger or share exchange
 the board of directors must submit the plan to the shareholders
 for their approval. The board of directors must also transmit
 to the shareholders a recommendation that the shareholders
 approve the plan, unless the any of the following apply:
    (1)  The board of directors makes a determination that
 because of conflicts of interest or other special circumstances
 it should not make such a recommendation, in which case.
    (2)  Section 490.826 applies.
    b.  If paragraph "a", subparagraph (1) or (2), applies, the
 board of directors must transmit to the shareholders the basis
 for that determination so proceeding.
    Sec. 47.  Section 490.1106, subsection 1, unnumbered
 paragraph 1, Code 2013, is amended to read as follows:
    After a plan of merger or share exchange has been adopted
 and approved as required by this chapter, articles of merger
 or share exchange shall be executed signed on behalf of each
 party to the merger or share exchange by any officer or other
 duly authorized representative. The articles shall set forth
 the following:
    Sec. 48.  Section 490.1108, subsection 2, Code 2013, is
 amended to read as follows:
    2.  If a merger or share exchange is abandoned under
 subsection 1 after articles of merger or share exchange have
 been filed with the secretary of state but before the merger
 or share exchange has become effective, a statement that the
 merger or share exchange has been abandoned in accordance with
 this section, executed signed on behalf of a party to the
 merger or share exchange by an officer or other duly authorized
 representative, shall be delivered to the secretary of state
 for filing prior to the effective date of the merger or share
 exchange. Upon filing, the statement shall take effect and the
 merger or share exchange shall be deemed abandoned and shall
 not become effective.
    Sec. 49.  Section 490.1202, subsection 2, Code 2013, is
 amended to read as follows:
    2.  a.  A disposition that requires approval of the
 shareholders under subsection 1 shall be initiated by
 a resolution by the board of directors authorizing the
 disposition. After adoption of such a resolution, the board
 of directors shall submit the proposed disposition to the
 shareholders for their approval. The board of directors shall
 also transmit to the shareholders a recommendation that the
 shareholders approve the proposed disposition, unless the any
 of the following apply:
    (1)  The board of directors makes a determination that
 because of conflicts of interest or other special circumstances
 it should not make such a recommendation, in which case.
    (2)  Section 490.826 applies.
    b.  If paragraph "a", subparagraph (1) or (2), applies, the
 board of directors shall transmit to the shareholders the basis
 for that determination so proceeding.
    Sec. 50.  Section 490.1301, Code 2013, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  5A.  "Interested transaction" means a
 corporate action described in section 490.1302, subsection 1,
 other than a merger pursuant to section 490.1105, involving an
 interested person in which any of the shares or assets of the
 corporation are being acquired or converted.  As used in this
 definition, all of the following apply:
    a.  "Beneficial owner" means any person who, directly
 or indirectly, through any contract, arrangement, or
 understanding, other than a revocable proxy, has or shares the
 power to vote, or to direct the voting of, shares; except that
 a member of a national securities exchange is not deemed to be
 a beneficial owner of securities held directly or indirectly
 by it on behalf of another person solely because the member is
 the record holder of the securities if the member is precluded
 by the rules of the exchange from voting without instruction
 on contested matters or matters that may affect substantially
 the rights or privileges of the holders of the securities to
 be voted.  When two or more persons agree to act together for
 the purpose of voting their shares of the corporation, each
 member of the group formed thereby is deemed to have acquired
 beneficial ownership, as of the date of the agreement, of all
 voting shares of the corporation beneficially owned by any
 member of the group.
    b.  "Excluded shares" means shares acquired pursuant to an
 offer for all shares having voting power if the offer was made
 within one year prior to the corporate action for consideration
 of the same kind and of a value equal to or less than that paid
 in connection with the corporate action.
    c.  "Interested person" means a person, or an affiliate of a
 person, who at any time during the one=year period immediately
 preceding approval by the board of directors of the corporate
 action was or had any of the following:
    (1)  Was the beneficial owner of twenty percent or more of
 the voting power of the corporation, other than as owner of
 excluded shares.
    (2)  Had the power, contractually or otherwise, other than as
 owner of excluded shares, to cause the appointment or election
 of twenty=five percent or more of the directors to the board of
 directors of the corporation.
    (3)  Was a senior executive or director of the corporation
 or a senior executive of any affiliate thereof, and that
 senior executive or director will receive, as a result of the
 corporate action, a financial benefit not generally available
 to other shareholders as such, other than any of the following:
    (a)  Employment, consulting, retirement, or similar benefits
 established separately and not as part of or in contemplation
 of the corporate action.
    (b)  Employment, consulting, retirement, or similar benefits
 established in contemplation of, or as part of, the corporate
 action that are not more favorable than those existing before
 the corporate action or, if more favorable, that have been
 approved on behalf of the corporation in the same manner as is
 provided in section 490.862.
    (c)  In the case of a director of the corporation who will,
 in the corporate action, become a director of the acquiring
 entity in the corporate action or one of its affiliates, rights
 and benefits as a director that are provided on the same basis
 as those afforded by the acquiring entity generally to other
 directors of such entity or such affiliate.
    Sec. 51.  Section 490.1302, subsection 2, paragraph a, Code
 2013, is amended by striking the paragraph and inserting in
 lieu thereof the following:
    a.  Appraisal rights shall not be available for the holders
 of shares of any class or series of shares which is any of the
 following:
    (1)  A covered security under section 18(b)(1)(A) or (B) of
 the federal Securities Act of 1933, as amended.
    (2)  Traded in an organized market and has at least two
 thousand shareholders and a market value of at least twenty
 million dollars, exclusive of the value of such shares held by
 the corporation's subsidiaries, senior executives, directors,
 and beneficial shareholders owning more than ten percent of
 such shares.
    (3)  Issued by an open=end management investment company
 registered with the United States securities and exchange
 commission under the federal Investment Company Act of 1940 and
 may be redeemed at the option of the holder at net asset value.
    Sec. 52.  Section 490.1302, subsection 2, paragraph b,
 subparagraph (1), Code 2013, is amended to read as follows:
    (1)  The record date fixed to determine the shareholders
 entitled to receive notice of, and to vote at, the meeting
 of shareholders to act upon the corporate action requiring
 appraisal rights.
    Sec. 53.  Section 490.1302, subsection 2, paragraph d, Code
 2013, is amended by striking the paragraph and inserting in
 lieu thereof the following:
    d.  Paragraph "a", shall not be applicable and appraisal
 rights shall be available pursuant to subsection 1 for the
 holders of any class or series of shares where the corporate
 action is an interested transaction.
    Sec. 54.  Section 490.1302, subsection 2, paragraph e, Code
 2013, is amended by striking the paragraph.
    Sec. 55.  Section 490.1302, subsection 4, Code 2013, is
 amended by striking the subsection.
    Sec. 56.  Section 490.1320, Code 2013, is amended to read as
 follows:
    490.1320  Notice of appraisal rights.
    1.  If Where any proposed corporate action described
  specified in section 490.1302, subsection 1, is to be submitted
 to a vote at a shareholders' meeting, the meeting notice must
 state that the corporation has concluded that the shareholders
 are, are not, or may be entitled to assert appraisal rights
 under this part. If the corporation concludes that appraisal
 rights are or may be available, a copy of this part must
 accompany the meeting notice sent to those record shareholders
 entitled to exercise appraisal rights.
    2.  In a merger pursuant to section 490.1105, the parent
 corporation must notify in writing all record shareholders of
 the subsidiary who are entitled to assert appraisal rights
 that the corporate action became effective. Such notice must
 be sent within ten days after the corporate action became
 effective and include the materials described in section
 490.1322.
    3.  Where any corporate action specified in section
 490.1302, subsection 1, is to be approved by written consent
 of the shareholders pursuant to section 490.704, all of the
 following apply:
    a.  Written notice that appraisal rights are, are not, or may
 be available must be sent to each record shareholder from whom
 a consent is solicited at the time consent of such shareholder
 is first solicited and, if the corporation has concluded that
 appraisal rights are or may be available, must be accompanied
 by a copy of this chapter.
    b.  Written notice that appraisal rights are, are not, or
 may be available must be delivered together with the notice to
 nonconsenting and nonvoting shareholders required by section
 490.704, subsections 5 and 6, may include the materials
 described in section 490.1322 and, if the corporation has
 concluded that appraisal rights are or may be available, must
 be accompanied by a copy of this chapter.
    4.  Where corporate action described in section 490.1302,
 subsection 1, is proposed, or a merger pursuant to section
 490.1105 is effected, the notice referred to in subsection 1
 or 3, if the corporation concludes that appraisal rights are
 or may be available, and in subsection 2 shall be accompanied
 by all of the following:
    a.  The annual financial statements specified in section
 490.1620, subsection 1, of the corporation that issued the
 shares that may be subject to appraisal, which shall be as of
 a date ending not more than sixteen months before the date of
 the notice and shall comply with section 490.1620, subsection
 2; provided that, if such annual financial statements are not
 reasonably available, the corporation shall provide reasonably
 equivalent financial information.
    b.  The latest available quarterly financial statements of
 such corporation, if any.
    5.  The right to receive the information described in
 subsection 4 may be  waived in writing by a shareholder before
 or after the corporate action.
    Sec. 57.  Section 490.1321, Code 2013, is amended to read as
 follows:
    490.1321  Notice of intent to demand payment.
    1.  If proposed a corporate action requiring appraisal
 rights under specified in section 490.1302, subsection 1, is
 submitted to a vote at a shareholders' meeting, a shareholder
 who wishes to assert appraisal rights with respect to any class
 or series of shares must do all of the following:
    a.  Deliver to the corporation before the vote is taken
 written notice of the shareholder's intent to demand payment if
 the proposed action is effectuated.
    b.  Not vote, or cause or permit to be voted, any shares of
 such class or series in favor of the proposed action.
    2.  If a corporate action specified in section 490.1302,
 subsection 1, is to be approved by less than unanimous written
 consent, a shareholder who wishes to assert appraisal rights
 with respect to any class or series of shares must not sign a
 consent in favor of the proposed action with respect to that
 class or series of shares.
    3.  A shareholder who does not fails to satisfy the
 requirements of subsection 1 or 2, is not entitled to payment
 under this part.
    Sec. 58.  Section 490.1322, subsection 1, Code 2013, is
 amended to read as follows:
    1.  If proposed corporate action requiring appraisal rights
 under section 490.1302, subsection 1, becomes effective, the
 corporation must deliver send a written appraisal notice
 and the form required by subsection 2, paragraph "a", to
 all shareholders who satisfied the requirements of section
 490.1321, subsection 1, or section 490.1321, subsection 2. In
 the case of a merger under section 490.1105, the parent must
 deliver a written an appraisal notice and form to all record
 shareholders who may be entitled to assert appraisal rights.
    Sec. 59.  Section 490.1322, subsection 2, unnumbered
 paragraph 1, Code 2013, is amended to read as follows:
    The appraisal notice must be sent delivered no earlier than
 the date the corporate action specified in section 490.1302,
 subsection 1, became effective and no later than ten days after
 such date and must do all of the following:
    Sec. 60.  Section 490.1322, subsection 2, paragraph a, Code
 2013, is amended to read as follows:
    a.  Be accompanied by Supply a form that specifies does all
 of the following:
    (1)  Specifies the first date of any announcement to
 shareholders made prior to the date the corporate action became
 effective of the first announcement to shareholders of the
  principal terms of the proposed corporate action and requires,
 if any.
    (2)  If such announcement was made, requires the shareholder
 asserting appraisal rights to certify whether beneficial
 ownership of those shares for which appraisal rights are
 asserted was acquired before that date.
    (3)  Requires the shareholder asserting appraisal rights to
 certify whether or not beneficial ownership of those shares for
 which appraisal rights are asserted was acquired before that
 date, and that the such shareholder did not vote for or consent
 to the transaction.
    Sec. 61.  Section 490.1322, subsection 2, paragraph b,
 subparagraph (2), Code 2013, is amended to read as follows:
    (2)  A date by which the corporation must receive the form,
 which date shall not be fewer than forty nor more than sixty
 days after the date the appraisal notice and form are is sent
 under subsection 1, and state that the shareholder shall have
 waived the right to demand appraisal with respect to the
 shares unless the form is received by the corporation by such
 specified date.
    Sec. 62.  Section 490.1323, subsections 1 and 3, Code 2013,
 are amended to read as follows:
    1.  A shareholder who receives notice pursuant to section
 490.1322 and who wishes to exercise appraisal rights must
 certify on sign and return the form sent by the corporation
 and, in the case of certificated shares, deposit the
 shareholder's certificates in accordance with the terms of
 the notice by the date referred to in the notice pursuant to
 section 490.1322, subsection 2, paragraph "b", subparagraph
 (2).  In addition, if applicable, the shareholder must certify
 on the form whether the beneficial owner of such shares
 acquired beneficial ownership of the shares before the date
 required to be set forth in the notice pursuant to section
 490.1322, subsection 2, paragraph "a". If a shareholder fails
 to make this certification, the corporation may elect to
 treat the shareholder's shares as after=acquired shares under
 section 490.1325. In addition, a shareholder who wishes to
 exercise appraisal rights must execute and return the form and,
 in a case of certificated shares, deposit the shareholder's
 certificates in accordance with the terms of the notice
 by the date referred to in the notice pursuant to section
 490.1322, subsection 2, paragraph "b", subparagraph (2). Once
 a shareholder deposits that shareholder's certificates or, in
 the case of uncertificated shares, returns the executed signed
  forms, that shareholder loses all rights as a shareholder,
 unless the shareholder withdraws pursuant to subsection 2.
    3.  A shareholder who does not execute sign and return the
 form and, in the case of certificated shares, deposit the
 shareholder's share certificates where required, each by the
 date set forth in the notice described in section 490.1322,
 subsection 2, shall not be entitled to payment under this
 division.
    Sec. 63.  Section 490.1324, subsection 2, paragraph a, Code
 2013, is amended to read as follows:
    a.  (1)  Financial The annual financial statements specified
 in section 490.1620, subsection 1, of the corporation that
 issued the shares to be appraised, consisting of a balance
 sheet as of the end of a fiscal year which shall be of a date
  ending not more than sixteen months before the date of payment,
 an income statement for that year, a statement of changes
 in shareholders' equity for that year, and the shall comply
 with section 490.1620, subsection 2; provided that, if such
 annual financial statements are not reasonably available, the
 corporation shall provide reasonably equivalent financial
 information.
    (2)  The latest available interim quarterly financial
 statements of such corporation, if any.
    Sec. 64.  Section 490.1325, subsection 1, Code 2013, is
 amended to read as follows:
    1.  A corporation may elect to withhold payment required
 by section 490.1324 from any shareholder who was required to,
 but did not certify that beneficial ownership of all of the
 shareholder's shares for which appraisal rights are asserted
 was acquired before the date set forth in the appraisal notice
 sent pursuant to section 490.1322, subsection 2, paragraph "a".
    Sec. 65.  Section 490.1331, Code 2013, is amended to read as
 follows:
    490.1331  Court costs and counsel fees expenses.
    1.  The court in an appraisal proceeding commenced under
 section 490.1330 shall determine all court costs of the
 proceeding, including the reasonable compensation and expenses
 of appraisers appointed by the court. The court shall assess
 the court costs against the corporation, except that the court
 may assess court costs against all or some of the shareholders
 demanding appraisal, in amounts the court finds equitable, to
 the extent the court finds such shareholders acted arbitrarily,
 vexatiously, or not in good faith with respect to the rights
 provided by this division.
    2.  The court in an appraisal proceeding may also assess the
 fees and expenses of counsel and experts for the respective
 parties, in amounts the court finds equitable, for either any
  of the following:
    a.  Against the corporation and in favor of any or all
 shareholders demanding appraisal if the court finds the
 corporation did not substantially comply with the requirements
 of section 490.1320, 490.1322, 490.1324, or 490.1325.
    b.  Against either the corporation or a shareholder demanding
 appraisal, in favor of any other party, if the court finds that
 the party against whom the fees and expenses are assessed acted
 arbitrarily, vexatiously, or not in good faith with respect to
 the rights provided by this chapter.
    3.  If the court in an appraisal proceeding finds that the
 services of counsel for expenses incurred by any shareholder
 were of substantial benefit to other shareholders similarly
 situated, and that the fees for those services such expenses
  should not be assessed against the corporation, the court may
 award to such counsel reasonable fees to direct that such
 expenses be paid out of the amounts awarded the shareholders
 who were benefited.
    4.  To the extent the corporation fails to make a required
 payment pursuant to section 490.1324, 490.1325, or 490.1326,
 the shareholder may sue directly for the amount owed and, to
 the extent successful, shall be entitled to recover from the
 corporation all costs and expenses of the suit, including
 counsel fees.
    Sec. 66.  NEW SECTION.  490.1340  Other remedies limited.
    1.  The legality of a proposed or completed corporate
 action described in section 490.1302, subsection 1, shall not
 be contested, nor may the corporate action be enjoined, set
 aside, or rescinded, in a legal or equitable proceeding by a
 shareholder after the shareholders have approved the corporate
 action.
    2.  Subsection 1 does not apply to a corporate action that
 meets any of the following conditions:
    a.  Was not authorized and approved in accordance with the
 applicable provisions of any of the following:
    (1)  Division X, XI, or XII of this chapter.
    (2)  The articles of incorporation or bylaws.
    (3)  The resolution of the board of directors authorizing the
 corporate action.
    b.  Was procured as a result of fraud, a material
 misrepresentation, or an omission of a material fact necessary
 to make statements made, in light of the circumstances in which
 they were made, not misleading.
    c.  Is an interested transaction, unless it has been
 recommended by the board of directors in the same manner as
 is provided in section 490.862 and has been approved by the
 shareholders in the same manner as is provided in section
 490.863 as if the interested transaction were a director's
 conflicting interest transaction.
    d.  Is approved by less than unanimous consent of the
 voting shareholders pursuant to section 490.704, if all of the
 following apply:
    (1)  The challenge to the corporate action is brought by a
 shareholder who did not consent and as to whom notice of the
 approval of the corporate action was not effective at least ten
 days before the corporate action was effected.
    (2)  The proceeding challenging the corporate action is
 commenced within ten days after notice of the approval of the
 corporate action is effective as to the shareholder bringing
 the proceeding.
    Sec. 67.  Section 490.1402, subsection 2, paragraph a, Code
 2013, is amended to read as follows:
    a.  (1)  The board of directors must recommend dissolution to
 the shareholders unless the any of the following apply:
    (a)  The board of directors determines that because of
 conflict of interest or other special circumstances it should
 make no recommendation and communicates.
    (b)  Section 490.826 applies.
    (2)  If paragraph "a", subparagraph (1) or (2), applies,
 it must communicate the basis for its determination to the
 shareholders so proceeding.
    Sec. 68.  Section 490.1430, Code 2013, is amended to read as
 follows:
    490.1430  Grounds for judicial dissolution.
    1.  The district court may dissolve a corporation in any of
 the following ways:
    1.  a.  A proceeding by the attorney general, if it is
 established that either any of the following apply:
    a.  (1)  The corporation obtained its articles of
 incorporation through fraud.
    b.  (2)  The corporation has continued to exceed or abuse the
 authority conferred upon it by law.
    2.  b.  A proceeding by a shareholder if it is established
 that any of the following conditions exist:
    a.  (1)  The directors are deadlocked in the management of
 the corporate affairs, the shareholders are unable to break the
 deadlock, and either irreparable injury to the corporation is
 threatened or being suffered, or the business and affairs of
 the corporation can no longer be conducted to the advantage of
 the shareholders generally, because of the deadlock.
    b.  (2)  The directors or those in control of the corporation
 have acted, are acting, or will act in a manner that is
 illegal, oppressive, or fraudulent.
    c.  (3)  The shareholders are deadlocked in voting power
 and have failed, for a period that includes at least two
 consecutive annual meeting dates, to elect successors to
 directors whose terms have expired.
    d.  (4)  The corporate assets are being misapplied or wasted.
    3.  c.  A proceeding by a creditor if it is established that
 either any of the following apply:
    a.  (1)  The creditor's claim has been reduced to judgment,
 the execution on the judgment returned unsatisfied, and the
 corporation is insolvent.
    b.  (2)  The corporation has admitted in writing that the
 creditor's claim is due and owing and the corporation is
 insolvent.
    4.  d.  A proceeding by the corporation to have its voluntary
 dissolution continued under court supervision.
    e.  A proceeding by a shareholder if the corporation has
 abandoned its business and has failed within a reasonable time
 to liquidate and distribute its assets and dissolve.
    2.  Subsection 1, paragraph "b", shall not apply in the
 case of a corporation that, on the date of the filing of the
 proceeding, has shares which are any of the following:
    a.  Listed on the New York stock exchange, the American stock
 exchange, or on any exchange owned or operated by the NASDAQ
 stock market, l.l.c., or listed or quoted on a system owned or
 operated by the national association of securities dealers,
 inc.
    b.  Not so listed or quoted, but are held by at least three
 hundred shareholders and the shares outstanding have a market
 value of at least twenty million dollars, exclusive of the
 value of such shares held by the corporation's subsidiaries,
 senior executives, directors, and beneficial shareholders
 owning more than ten percent of such shares.
    3.  As used in this section, "beneficial shareholder" has the
 meaning specified in section 490.1301, subsection 2.
    Sec. 69.  Section 490.1431, subsection 4, Code 2013, is
 amended to read as follows:
    4.  Within ten days of the commencement of a proceeding
 under section 490.1430, subsection 2, to dissolve a corporation
 that has no shares listed on a national securities exchange or
 regularly traded in a market maintained by one or more members
 of a national securities exchange under section 490.1430,
 subsection 1, paragraph "b", the corporation must send to all
 shareholders, other than the petitioner, a notice stating that
 the shareholders are entitled to avoid the dissolution of the
 corporation by electing to purchase the petitioner's shares
 under section 490.1434, and a copy of section 490.1434.
    Sec. 70.  Section 490.1432, subsections 1 and 5, Code 2013,
 are amended to read as follows:
    1.  A Unless an election to purchase has been filed under
 section 490.1434, a court in a judicial proceeding brought to
 dissolve a corporation may appoint one or more receivers to
 wind up and liquidate, or one or more custodians to manage,
 the business and affairs of the corporation. The court shall
 hold a hearing, after notifying all parties to the proceeding
 and any interested persons designated by the court, before
 appointing a receiver or custodian. The court appointing a
 receiver or custodian has exclusive jurisdiction over the
 corporation and all its property wherever located.
    5.  The court from time to time during the receivership
 or custodianship may order compensation paid and expense
 disbursements or reimbursements made expenses paid or
 reimbursed to the receiver or custodian and the receiver's
 or custodian's counsel from the assets of the corporation or
 proceeds from the sale of the assets.
    Sec. 71.  Section 490.1434, subsections 1, 2, 4, and 5, Code
 2013, are amended to read as follows:
    1.  In a proceeding under section 490.1430, subsection 2 1,
 paragraph "b", to dissolve a corporation that has no shares
 listed on a national securities exchange or regularly traded
 in a market maintained by one or more members of a national or
 affiliated securities association, the corporation may elect
 or, if it fails to elect, one or more shareholders may elect to
 purchase all shares owned by the petitioning shareholder at the
 fair value of the shares. An election pursuant to this section
 shall be irrevocable unless the court determines that it is
 equitable to set aside or modify the election.
    2.  An election to purchase pursuant to this section may
 be filed with the court at any time within ninety days after
 the filing of the petition under section 490.1430, subsection
 2 1, paragraph "b", or at such later time as the court in its
 discretion may allow. If the election to purchase is filed
 by one or more shareholders, the corporation shall, within
 ten days thereafter, give written notice to all shareholders,
 other than the petitioner. The notice must state the name
 and number of shares owned by the petitioner and the name and
 number of shares owned by each electing shareholder and must
 advise the recipients of their right to join the election to
 purchase shares in accordance with this section. Shareholders
 who wish to participate must file notice of their intention
 to join in the purchase no later than thirty days after
 the effective date of the notice to them. All shareholders
 who have filed an election or notice of their intention to
 participate in the election to purchase thereby become parties
 to the proceeding and shall participate in the purchase in
 proportion to their ownership of shares as of the date the
 first election was filed, unless they otherwise agree or the
 court otherwise directs. After an election has been filed by
 the corporation or one or more shareholders, the proceeding
 under section 490.1430, subsection 2 1, paragraph "b", shall
 not be discontinued or settled, nor shall the petitioning
 shareholder sell or otherwise dispose of the shareholder's
 shares, unless the court determines that it would be equitable
 to the corporation and the shareholders, other than the
 petitioner, to permit such discontinuance, settlement, sale, or
 other disposition.
    4.  If the parties are unable to reach an agreement as
 provided for in subsection 3, the court, upon application of
 any party, shall stay the section 490.1430, subsection 2 1,
 paragraph "b", proceedings and determine the fair value of the
 petitioner's shares as of the day before the date on which the
 petition under section 490.1430, subsection 2 1, paragraph
 "b", was filed or as of such other date as the court deems
 appropriate under the circumstances.
    5.  Upon determining the fair value of the shares, the
 court shall enter an order directing the purchase upon such
 terms and conditions as the court deems appropriate, which may
 include payment of the purchase price in installments, where
 necessary in the interests of equity, provision for security
 to assure payment of the purchase price and any additional
 costs, fees, and expenses as may have been awarded, and, if
 the shares are to be purchased by shareholders, the allocation
 of shares among them. In allocating petitioner's shares among
 holders of different classes of shares, the court shall attempt
 to preserve the existing distribution of voting rights among
 holders of different classes insofar as practicable and may
 direct that holders of a specific class or classes shall not
 participate in the purchase. Interest may be allowed at the
 rate and from the date determined by the court to be equitable,
 but if the court finds that the refusal of the petitioning
 shareholder to accept an offer of payment was arbitrary or
 otherwise not in good faith, no interest shall be allowed. If
 the court finds that the petitioning shareholder has probable
 grounds for relief under section 490.1430, subsection 2 1,
 paragraph "b" or "d", subparagraph (2) or (4), it may award to
 the petitioning shareholder reasonable fees and expenses of
 counsel and of any experts employed by the shareholder.
    Sec. 72.  Section 490.1508, subsection 2, Code 2013, is
 amended to read as follows:
    2.  If a registered agent changes the street address of the
  a registered agent's business office changes, the registered
  agent may change the street address of the registered office
 of any foreign corporation for which the agent person is the
 registered agent by notifying the corporation in writing of
 the change, and signing, either manually or in facsimile, and
 delivering to the secretary of state for filing a statement of
 change that complies with the requirements of subsection 1 and
 recites that the corporation has been notified of the change.
    Sec. 73.  NEW SECTION.  490.1523  Transfer of authority.
    1.  A foreign business corporation authorized to transact
 business in this state that converts to a foreign nonprofit
 corporation or to any form of foreign unincorporated entity
 that is required to obtain a certificate of authority or make
 a similar type of filing with the secretary of state if it
 transacts business in this state shall file with the secretary
 of state an application for transfer of authority signed by
 any officer or other duly authorized representative.  The
 application shall set forth all of the following:
    a.  The name of the corporation.
    b.  The type of unincorporated entity to which it has been
 converted and the jurisdiction whose laws govern its internal
 affairs.
    c.  Any other information that would be required in a filing
 under the laws of this state by an unincorporated entity of the
 type the corporation has become seeking authority to transact
 business in this state.
    2.  The application for transfer of authority shall be
 delivered to the secretary of state for filing and shall take
 effect at the effective time provided in section 490.123.
    3.  Upon the effectiveness of the application for transfer of
 authority, the authority of the corporation under this chapter
 to transact business in this state shall be transferred without
 interruption to the converted entity which shall thereafter
 hold such authority subject to the provisions of the laws of
 this state applicable to that type of unincorporated entity.
    Sec. 74.  Section 490.1601, subsection 4, Code 2013, is
 amended to read as follows:
    4.  A corporation shall maintain its records in written
  the form of a document, including an electronic record, or in
 another form capable of conversion into written paper form
 within a reasonable time.
    Sec. 75.  Section 490.1602, Code 2013, is amended to read as
 follows:
    490.1602  Inspection of records by shareholders.
    1.  A shareholder of a corporation is entitled to
 inspect and copy, during regular business hours at the
 corporation's principal office, any of the records of the
 corporation described in section 490.1601, subsection 5, if the
 shareholder gives the corporation signed written notice of the
 shareholder's demand at least five business days before the
 date on which the shareholder wishes to inspect and copy.
    2.  For any meeting of shareholders for which the record date
 for determining shareholders entitled to vote at the meeting
 is different than the record date for notice of the meeting,
 any person who becomes a shareholder subsequent to the record
 date for notice of the meeting and is entitled to vote at
 the meeting is entitled to obtain from the corporation upon
 request the notice and any other information provided by the
 corporation to shareholders in connection with the meeting,
 unless the corporation has made such information generally
 available to shareholders by posting it on its internet site or
 by other generally recognized means.  Failure of a corporation
 to provide such information does not affect the validity of
 action taken at the meeting.
    3.  A shareholder of a corporation is entitled to inspect and
 copy, during regular business hours at a reasonable location
 specified by the corporation, any of the following records
 of the corporation if the shareholder meets the requirements
 of subsection 3 4 and gives the corporation a signed written
 notice of the shareholder's demand at least five business days
 before the date on which the shareholder wishes to inspect and
 copy any of the following:
    a.  Excerpts from minutes of any meeting of the board of
 directors, records of any action of or a committee of the board
 of directors while acting in place of the board of directors
 on behalf of the corporation, minutes of any meeting of the
 shareholders, and records of action taken by the shareholders,
  or board of directors, or a committee of the board without
 a meeting, to the extent not subject to inspection under
 subsection 1 of this section.
    b.  Accounting records of the corporation.
    c.  The record of shareholders.
    3.  4.  A shareholder may inspect and copy the records
 described in subsection 2 3 only if all of the following apply:
    a.  The shareholder's demand is made in good faith and for
 a proper purpose.
    b.  The shareholder describes with reasonable particularity
 the shareholder's purpose and the records the shareholder
 desires to inspect.
    c.  The records are directly connected with the shareholder's
 purpose.
    4.  5.  The right of inspection granted by this section shall
 not be abolished or limited by a corporation's articles of
 incorporation or bylaws.
    5.  6.  This section does not affect either any of the
 following:
    a.  The right of a shareholder to inspect records under
 section 490.720 or, if the shareholder is in litigation with
 the corporation, to the same extent as any other litigant.
    b.  The power of a court, independently of this chapter, to
 compel the production of corporate records for examination.
    7.  For purposes of this section, "shareholder" includes a
 beneficial owner whose shares are held in a voting trust or by
 a nominee on the shareholder's behalf.
    Sec. 76.  Section 490.1603, subsection 3, Code 2013, is
 amended to read as follows:
    3.  The corporation may comply at its expense with a
 shareholder's demand to inspect the record of shareholders
 under section 490.1602, subsection 2, paragraph "c", by
 providing the shareholder with a list of shareholders that was
 compiled no earlier than the date of the shareholder's demand.
    Sec. 77.  Section 490.1604, subsection 2, Code 2013, is
 amended to read as follows:
    2.  If a corporation does not within a reasonable time
 allow a shareholder to inspect and copy any other records, the
 shareholder who complies with section 490.1602, subsections 2
 and 3 may apply to the district court in the county where the
 corporation's principal office or, if none in this state, its
 registered office is located for an order to permit inspection
 and copying of the records demanded. The court shall dispose
 of an application under this subsection on an expedited basis.
    Sec. 78.  Section 490.1606, subsection 1, Code 2013, is
 amended to read as follows:
    1.  Whenever notice is would otherwise be required to be
 given under any provision of this chapter to any a shareholder,
 such notice shall need not be required to be given if either
  any of the following applies apply:
    a.  Notice Notices to the shareholders of two consecutive
 annual meetings, and all notices of meetings during the period
 between such two consecutive annual meetings, have been sent to
 such shareholder at such shareholder's address as shown on the
 records of the corporation and have been returned undeliverable
 or could not be delivered.
    b.  All, but not less than two, payments of dividends on
 securities during a twelve=month period, or two consecutive
 payments of dividends on securities during a period of more
 than twelve months, have been sent to such shareholder at
 such shareholder's address as shown on the records of the
 corporation and have been returned undeliverable or could not
 be delivered.
    Sec. 79.  Section 490.1620, Code 2013, is amended by striking
 the section and inserting in lieu thereof the following:
    490.1620  Financial statements for shareholders.
    1.  A corporation shall deliver to its shareholders
 annual financial statements, which may be consolidated or
 combined statements of the corporation and one or more of its
 subsidiaries, as appropriate, that include a balance sheet as
 of the end of the fiscal year, an income statement for that
 year, and a statement of changes in shareholders' equity for
 the year unless that information appears elsewhere in the
 financial statements.  If financial statements are prepared for
 the corporation on the basis of generally accepted accounting
 principles, the annual financial statements must also be
 prepared on that basis.
    2.  If the annual financial statements are reported upon by a
 public accountant, the report must accompany them.  If not, the
 statements must be accompanied by a statement of the president
 or the person responsible for the corporation's accounting
 records which does all of the following:
    a.  States such person's reasonable belief whether the
 statements were prepared on the basis of generally accepted
 accounting principles and, if not, describing the basis of
 preparation.
    b.  Describes any respects in which the statements were
 not prepared on a basis of accounting consistent with the
 statements prepared for the preceding year.
    3.  Within one hundred twenty days after the close of each
 fiscal year, the corporation shall send the annual financial
 statements to each shareholder.  Thereafter, on written
 request from a shareholder to whom the statements were not
 sent, the corporation shall send the shareholder the latest
 financial statements. A public corporation may fulfill its
 responsibilities under this section by delivering the specified
 financial statements, or otherwise making them available, in
 any manner permitted by the applicable rules and regulations of
 the United States securities and exchange commission.
    Sec. 80.  Section 490.1703, Code 2013, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  3.  In the event that any provision of this
 chapter is deemed to modify, limit, or supersede the federal
 Electronic Signatures in Global and National Commerce Act, 15
 U.S.C. { 7001 et seq., the provisions of this chapter shall
 control to the maximum extent permitted by section 102(a)(2) of
 that federal Act.
    Sec. 81.  REPEAL.  Section 490.832, Code 2013, is repealed.
    Sec. 82.  EFFECTIVE DATE.  This division of this Act takes
 effect January 1, 2014.
                           DIVISION II
                        FUTURE PROVISIONS
    Sec. 83.  Section 490.140, subsection 21A, Code 2013, is
 amended by striking the subsection and inserting in lieu
 thereof the following:
    21A.  "Public corporation" means a corporation that
 has a class of voting stock that is listed on a national
 securities exchange or held of record by more than two thousand
 shareholders.
    Sec. 84.  EFFECTIVE DATE.  This division of this Act takes
 effect upon the repeal of 2011 Iowa Acts, chapter 2, as
 provided in section 9, subsection 1, of that Act.


                                                             
                               KRAIG PAULSEN
                               Speaker of the House


                                                             
                               PAM JOCHUM
                               President of the Senate
    I hereby certify that this bill originated in the House and
 is known as House File 469, Eighty=fifth General Assembly.


                                                             
                               CARMINE BOAL
                               Chief Clerk of the House
 Approved                , 2013


                                                             
                               TERRY E. BRANSTAD
                               Governor

                             -1-