House File 651 - Enrolled
PAG LIN
1 1 HOUSE FILE 651
1 2
1 3 AN ACT
1 4 RELATING TO BUSINESS CORPORATIONS, BY PROVIDING FOR INFORMATION
1 5 REQUIRED TO BE FILED WITH THE SECRETARY OF STATE AND
1 6 PROVIDING FOR SHARES AND INSTRUMENTS ASSOCIATED WITH SUCH
1 7 CORPORATIONS.
1 8
1 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 10
1 11 Section 1. Section 490.120, Code 2007, is amended by
1 12 adding the following new subsection:
1 13 NEW SUBSECTION. 12. Whenever a provision of this chapter
1 14 permits any of the terms of a plan or a filed document to be
1 15 dependent on facts objectively ascertainable outside of the
1 16 plan or filed document, all of the following provisions apply:
1 17 a. The manner in which the facts will operate upon the
1 18 terms of the plan or filed document shall be set forth in the
1 19 plan or filed document.
1 20 b. The facts may include, but are not limited to any of
1 21 the following:
1 22 (1) Any of the following that is available in a nationally
1 23 recognized news or information medium either in print or
1 24 electronically: statistical or market indices, market prices
1 25 of any security or group of securities, interest rates,
1 26 currency exchange rates, or similar economic or financial
1 27 data.
1 28 (2) A determination or action by any person or body,
1 29 including the corporation or any other party to a plan or
1 30 filed document.
1 31 (3) The terms of, or actions taken under, an agreement to
1 32 which the corporation is a party, or any other agreement or
1 33 document.
1 34 c. As used in this subsection:
1 35 (1) "Filed document" means a document filed with the
2 1 secretary of state under any provision of this chapter except
2 2 division XV or section 490.1622.
2 3 (2) "Plan" means a plan of merger or share exchange.
2 4 d. The following provisions of a plan or filed document
2 5 may not be made dependent on facts outside the plan or filed
2 6 document:
2 7 (1) The name and address of any person required in a filed
2 8 document.
2 9 (2) The registered office of any entity required in a
2 10 filed document.
2 11 (3) The registered agent of any entity required in a filed
2 12 document.
2 13 (4) The number of authorized shares and designation of
2 14 each class or series of shares.
2 15 (5) The effective date of a filed document.
2 16 (6) Any required statement in a filed document of the date
2 17 on which the underlying transaction was approved or the manner
2 18 in which that approval was given.
2 19 e. If a provision of a filed document is made dependent on
2 20 a fact ascertainable outside of the filed document, and that
2 21 fact is not ascertainable by reference to a source described
2 22 in paragraph "b", subparagraph (1), or a document that is a
2 23 matter of public record, or the affected shareholders have not
2 24 received notice of the fact from the corporation, then the
2 25 corporation shall file with the secretary of state articles of
2 26 amendment setting forth the fact promptly after the time when
2 27 the fact referred to is first ascertainable or thereafter
2 28 changes. Articles of amendment under this paragraph are
2 29 deemed to be authorized by the authorization of the original
2 30 filed document to which they relate and may be filed by the
2 31 corporation without further action by the board of directors
2 32 or the shareholders.
2 33 Sec. 2. Section 490.140, Code 2007, is amended by adding
2 34 the following new subsection:
2 35 NEW SUBSECTION. 11A. The phrase "facts objectively
3 1 ascertainable" outside of a filed document or plan is defined
3 2 in section 490.120, subsection 12.
3 3 Sec. 3. Section 490.202, Code 2007, is amended by adding
3 4 the following new subsection:
3 5 NEW SUBSECTION. 4. Provisions of the articles of
3 6 incorporation may be made dependent upon facts objectively
3 7 ascertainable outside the articles of incorporation in
3 8 accordance with section 490.120.
3 9 Sec. 4. Section 490.601, Code 2007, is amended to read as
3 10 follows:
3 11 490.601 AUTHORIZED SHARES.
3 12 1. The articles of incorporation must prescribe the set
3 13 forth any classes of shares and series of shares within a
3 14 class, and the number of shares of each class and series, that
3 15 the corporation is authorized to issue. If more than one
3 16 class or series of shares is authorized, the articles of
3 17 incorporation must prescribe a distinguishing designation for
3 18 each class, or series and must describe, prior to the issuance
3 19 of shares of a class or series, the terms, including the
3 20 preferences, rights, and limitations, and relative rights of
3 21 that class must be described in the articles of incorporation
3 22 of that class or series. All Except to the extent varied as
3 23 permitted by this section, all shares of a class or series
3 24 must have terms, including preferences, rights, and
3 25 limitations, and relative rights that are identical with those
3 26 of other shares of the same class except to the extent
3 27 otherwise permitted by section 490.602 or series.
3 28 2. The articles of incorporation must authorize both all
3 29 of the following:
3 30 a. One or more classes or series of shares that together
3 31 have unlimited voting rights.
3 32 b. One or more classes or series of shares, which may be
3 33 the same class or classes as those with voting rights, that
3 34 together are entitled to receive the net assets of the
3 35 corporation upon dissolution.
4 1 3. The articles of incorporation may authorize one or more
4 2 classes or series of shares that have any of the following
4 3 qualities:
4 4 a. Have special, conditional, or limited voting rights, or
4 5 no right to vote, except to the extent prohibited otherwise
4 6 provided by this chapter.
4 7 b. Are redeemable or convertible as specified in the
4 8 articles of incorporation in any of the following ways:
4 9 (1) At the option of the corporation, the shareholders
4 10 shareholder, or another person or upon the occurrence of a
4 11 designated specified event.
4 12 (2) For cash, indebtedness, securities, or other property.
4 13 (3) In a designated amount or in an amount At prices and
4 14 in amounts specified, or determined in accordance with a
4 15 designated formula or by reference to extrinsic data or
4 16 events.
4 17 c. Entitle the holders to distributions calculated in any
4 18 manner, including dividends that may be cumulative,
4 19 noncumulative, or partially cumulative.
4 20 d. Have preference over any other class or series of
4 21 shares with respect to distributions, including dividends and
4 22 distributions upon the dissolution of the corporation.
4 23 4. The terms of shares may be made dependent upon facts
4 24 objectively ascertainable outside the articles of
4 25 incorporation in accordance with section 490.120, subsection
4 26 12.
4 27 5. The terms of shares may vary among holders of the same
4 28 class or series so long as such variations are expressly set
4 29 forth in the articles of incorporation.
4 30 6. The description of the designations, preferences,
4 31 rights, and limitations, and relative rights of share classes
4 32 or series of shares in subsection 3 is not exhaustive.
4 33 Sec. 5. Section 490.602, Code 2007, is amended by striking
4 34 the section and inserting in lieu thereof the following:
4 35 490.602 TERMS OF CLASS OR SERIES DETERMINED BY BOARD OF
5 1 DIRECTORS.
5 2 1. If the articles of incorporation so provide, the board
5 3 of directors is authorized, without shareholder approval, to
5 4 do any of the following:
5 5 a. Classify any unissued shares into one or more series
5 6 within a class.
5 7 b. Reclassify any unissued shares of any class into one or
5 8 more classes or into one or more series within one or more
5 9 classes.
5 10 c. Reclassify any unissued shares of any series of any
5 11 class into one or more classes or into one or more series
5 12 within a class.
5 13 2. If the board of directors acts pursuant to subsection
5 14 1, it must determine the terms, including the preferences,
5 15 rights, and limitations, to the same extent permitted under
5 16 section 490.601, of any of the following:
5 17 a. Any class of shares before the issuance of any shares
5 18 of that class.
5 19 b. Any series within a class before the issuance of any
5 20 shares of that series.
5 21 3. Before issuing any shares of a class or series created
5 22 under this section, the corporation must deliver to the
5 23 secretary of state for filing articles of amendment setting
5 24 forth the terms determined under subsection 1.
5 25 Sec. 6. Section 490.624, Code 2007, is amended to read as
5 26 follows:
5 27 490.624 SHARE OPTIONS.
5 28 1. A corporation may issue rights, options, or warrants
5 29 for the purchase of shares or other securities of the
5 30 corporation. The board of directors shall determine (i) the
5 31 terms upon which the rights, options, or warrants are issued,
5 32 their form and content, and the consideration for which the
5 33 shares are to be issued, and (ii) the terms, including the
5 34 consideration for which the shares or other securities are to
5 35 be issued. The authorization by the board of directors for
6 1 the corporation to issue such rights, options, or warrants
6 2 constitutes authorization of the issuance of the shares or
6 3 other securities for which the rights, options, or warrants
6 4 are exercisable.
6 5 2. The terms and conditions of such rights, options, or
6 6 warrants, including those outstanding on the effective date of
6 7 this section, may include, without limitation, restrictions,
6 8 or conditions that do any of the following:
6 9 a. Preclude or limit the exercise, transfer, or receipt of
6 10 such rights, options, or warrants by any person or persons
6 11 owning or offering to acquire a specified number or percentage
6 12 of the outstanding shares or other securities of the
6 13 corporation or by any transferee or transferees of any such
6 14 person or persons.
6 15 b. Invalidate or void such rights, options, or warrants
6 16 held by any such person or persons or any such transferee or
6 17 transferees.
6 18 Sec. 7. Section 490.1005, subsection 8, Code 2007, is
6 19 amended to read as follows:
6 20 8. To make any change expressly permitted by section
6 21 490.602, subsection 4 1 or 2, to be made without shareholder
6 22 approval.
6 23 Sec. 8. Section 490.1006, Code 2007, is amended to read as
6 24 follows:
6 25 490.1006 ARTICLES OF AMENDMENT.
6 26 After an amendment to the articles of incorporation has
6 27 been adopted and approved in the manner required by this
6 28 chapter and by the articles of incorporation, the corporation
6 29 shall deliver to the secretary of state, for filing, articles
6 30 of amendment, which shall set forth all of the following:
6 31 1. The name of the corporation.
6 32 2. The text of each amendment adopted, or the information
6 33 required by section 490.120, subsection 12, paragraph "e".
6 34 3. If an amendment provides for an exchange,
6 35 reclassification, or cancellation of issued shares, provisions
7 1 for implementing the amendment, if not contained in the
7 2 amendment itself, which may be made dependent upon facts
7 3 objectively ascertainable outside the articles of amendment in
7 4 accordance with section 490.120, subsection 12.
7 5 4. The date of each amendment's adoption.
7 6 5. If an amendment was adopted by the incorporators or
7 7 board of directors without shareholder approval, a statement
7 8 that the amendment was duly approved by the incorporators or
7 9 by the board of directors, as the case may be, and that
7 10 shareholder approval was not required.:
7 11 6. a. If an amendment required Required approval by the
7 12 shareholders, a statement that the amendment was duly approved
7 13 by the shareholders in the manner required by this chapter and
7 14 by the articles of incorporation.
7 15 b. Is being filed pursuant to section 490.120, subsection
7 16 12, a statement to that effect.
7 17 Sec. 9. Section 490.1102, subsection 4, Code 2007, is
7 18 amended to read as follows:
7 19 4. The terms described in subsection 3, paragraphs "b" and
7 20 "c", of a plan of merger may be made dependent on facts
7 21 objectively ascertainable outside the plan of merger, provided
7 22 that those facts are objectively ascertainable in accordance
7 23 with section 490.120, subsection 12. The term "facts"
7 24 includes, but is not limited to, the occurrence of any event,
7 25 including a determination or action by any person or body,
7 26 including the corporation.
7 27 Sec. 10. Section 490.1103, subsection 4, Code 2007, is
7 28 amended to read as follows:
7 29 4. The terms described in subsection 3, paragraphs "b" and
7 30 "c", of a share exchange may be made dependent on facts
7 31 objectively ascertainable outside the plan of share exchange,
7 32 provided that those facts are objectively ascertainable in
7 33 accordance with section 490.120, subsection 12. The term
7 34 "facts" includes, but is not limited to, the occurrence of any
7 35 event, including a determination or action by any person or
8 1 body, including the corporation.
8 2 Sec. 11. Section 490.1601, subsection 5, unnumbered
8 3 paragraph 1, Code 2007, is amended to read as follows:
8 4 A corporation shall keep a copy of the following records at
8 5 its principal office:
8 6 Sec. 12. Section 490.1601, subsection 5, paragraph a, Code
8 7 2007, is amended to read as follows:
8 8 a. Its articles or restated articles of incorporation, and
8 9 all amendments to them currently in effect, and any notices to
8 10 shareholders referred to in section 490.120, subsection 12,
8 11 paragraph "e", regarding facts on which a filed document is
8 12 dependent.
8 13
8 14
8 15
8 16 PATRICK J. MURPHY
8 17 Speaker of the House
8 18
8 19
8 20
8 21 JOHN P. KIBBIE
8 22 President of the Senate
8 23
8 24 I hereby certify that this bill originated in the House and
8 25 is known as House File 651, Eighty=second General Assembly.
8 26
8 27
8 28
8 29 MARK BRANDSGARD
8 30 Chief Clerk of the House
8 31 Approved , 2007
8 32
8 33
8 34
8 35 CHESTER J. CULVER
9 1 Governor