2009 Iowa Code
Title 12 - Business Entities
Subtitle 2 - Business and Professional Corporations and Companies
CHAPTER 490 - BUSINESS CORPORATIONS
490.1110 - BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS.

        490.1110  BUSINESS COMBINATIONS WITH INTERESTED
      SHAREHOLDERS.
         1.  Notwithstanding any other provision of this chapter, a
      corporation shall not engage in any business combination with an
      interested shareholder for a period of three years following the time
      that the shareholder became an interested shareholder, unless any of
      the following apply:
         a.  Prior to the time the shareholder became an interested
      shareholder, the board of directors of the corporation approved
      either the business combination or the transaction which resulted in
      the shareholder becoming an interested shareholder.
         b.  Upon consummation of the transaction which resulted in the
      shareholder becoming an interested shareholder, the interested
      shareholder owned at least eighty-five percent of the voting stock of
      the corporation outstanding at the time the transaction commenced,
      excluding, for purposes of determining the number of shares
      outstanding, those shares owned by persons who are directors and
      officers, and by employee stock plans in which employee participants
      do not have the right to determine confidentially whether shares held
      subject to the plan will be tendered in a tender or exchange offer.
         c.  At or subsequent to the time the shareholder became an
      interested shareholder, the business combination is approved by the
      board of directors and authorized at an annual or special meeting of
      shareholders by the affirmative vote of at least sixty-six and
      two-thirds percent of the outstanding voting stock which is not owned
      by the interested shareholder.  Such approval shall not be by written
      consent.
         2.  This section does not apply in any of the following
      circumstances:
         a.  The corporation does not have a class of voting stock that
      is listed on a national securities exchange, authorized for quotation
      on the national association of securities dealers automated
      quotations--national market system, or held of record by more than
      two thousand shareholders, unless any of the foregoing results from
      action taken, directly or indirectly, by an interested shareholder or
      from a transaction in which a person becomes an interested
      shareholder.
         b.  The corporation's original articles of incorporation
      contain a provision expressly electing not to be governed by this
      section.
         c.  The corporation, by action of its board of directors,
      adopts an amendment to its bylaws by no later than September 29,
      1997, expressly electing not to be governed by this section, which
      amendment shall not be further amended by the board of directors.
         d.  The corporation, by action of its shareholders, adopts an
      amendment to its articles of incorporation or bylaws expressly
      electing not to be governed by this section, provided that, in
      addition to any other vote required by law, such amendment to the
      articles of incorporation or bylaws must be approved by the
      affirmative vote of a majority of the shares entitled to vote.  An
      amendment adopted pursuant to this paragraph is effective immediately
      in the case of a corporation that has never had a class of voting
      stock that falls within any of the three categories set out in
      paragraph "a" and has not elected by a provision in its original
      articles of incorporation or any amendment to such articles to be
      governed by this section.  In all other cases, an amendment adopted
      pursuant to this paragraph is not effective until twelve months after
      the adoption of the amendment and does not apply to any business
      combination between the corporation and any person who became an
      interested shareholder of the corporation on or prior to such
      adoption.
         An amendment to the bylaws adopted pursuant to this paragraph
      shall not be further amended by the board of directors.
         e.  A shareholder becomes an interested shareholder
      inadvertently and both of the following apply:
         (1)  As soon as practicable the shareholder divests itself of
      ownership of sufficient shares so that the shareholder ceases to be
      an interested shareholder.
         (2)  The shareholder would not, at any time within the three-year
      period immediately prior to a business combination between the
      corporation and such shareholder, have been an interested shareholder
      but for the inadvertent acquisition of ownership.
         f. (1)  The business combination is proposed prior to the
      consummation or abandonment of and subsequent to the earlier of the
      public announcement or the notice required in this paragraph of a
      proposed transaction which satisfies all of the following:
         (a)  Constitutes a transaction described in subparagraph (2).
         (b)  Is with or by a person who either was not an interested
      shareholder during the previous three years or who became an
      interested shareholder with the approval of the corporation's board
      of directors or who became an interested shareholder during the time
      period described in paragraph "g".
         (c)  Is approved or not opposed by a majority of the members of
      the board of directors then in office who were directors prior to any
      person becoming an interested shareholder during the previous three
      years, or who were recommended for election or elected to succeed
      such directors by a majority of such directors.
         (2)  A proposed transaction under subparagraph (1) is limited to
      the following:
         (a)  A merger of the corporation, other than a merger pursuant to
      section 490.1105.
         (b)  A sale, lease, exchange, mortgage, pledge, transfer, or other
      disposition, in one or more transactions and whether as part of a
      dissolution or otherwise, of assets of the corporation or of any
      direct or indirect majority-owned subsidiary of the corporation,
      other than to a direct or indirect wholly owned subsidiary of the
      corporation or to the corporation itself, which has an aggregate
      market value equal to fifty percent or more of either the aggregate
      market value of all of the assets of the corporation determined on a
      consolidated basis, or the aggregate market value of all the
      outstanding stock of the corporation.
         (c)  A proposed tender or exchange offer for fifty percent or more
      of the outstanding voting stock of the corporation.
         (3)  The corporation shall give no less than twenty days' notice
      to all interested shareholders prior to the consummation of any of
      the transactions described in subparagraph (2), subparagraph division
      (a) or (b).
         g.  The business combination is with an interested shareholder
      who becomes an interested shareholder of the corporation at a time
      when the corporation is not subject to this section pursuant to
      paragraph "a", "b", "c", or "d".
         Notwithstanding paragraphs "a" through "d", a corporation
      may elect under its original articles of incorporation or any
      amendment to such articles to be subject to this section.  However,
      such amendment shall not apply to restrict a business combination
      between the corporation and an interested shareholder of the
      corporation if the interested shareholder became such prior to the
      effective date of the amendment.
         3.  As used in this section, unless the context otherwise
      requires:
         a.  "Affiliate" means a person that directly, or indirectly,
      through one or more intermediaries, controls, or is controlled by, or
      is under common control with, another person.
         b.  "Associate", when used to indicate a relationship with a
      person, means any of the following:
         (1)  A corporation, partnership, unincorporated association, or
      other entity of which the person is a director, officer, or partner
      or is, directly or indirectly, the owner of twenty percent or more of
      any class of voting stock.
         (2)  A trust or other estate in which the person has at least a
      twenty percent beneficial interest or as to which such person serves
      as trustee or in a similar fiduciary capacity.
         (3)  A relative or spouse of the person, or any relative of the
      spouse, who has the same residence as the person.
         c.  "Business combination", with respect to a corporation and
      an interested shareholder of such corporation, means any of the
      following:
         (1)  A merger or consolidation of the corporation or any direct or
      indirect majority-owned subsidiary of the corporation with the
      interested shareholder, or with any other corporation, partnership,
      unincorporated association, or other entity if the merger or
      consolidation is caused by the interested shareholder and as a result
      of such merger the surviving entity is not subject to subsection 1.
         (2)  A sales, lease, exchange, mortgage, pledge, transfer, or
      other disposition, in one transaction or a series of transactions,
      except proportionately as a shareholder of such corporation, to or
      with the interested shareholder, whether as part of a dissolution or
      otherwise, of assets of the corporation or of any direct or indirect
      majority-owned subsidiary of the corporation which assets have an
      aggregate market value equal to ten percent or more of either the
      aggregate market value of all the assets of the corporation
      determined on a consolidated basis or the aggregate market value of
      all the outstanding stock of the corporation.
         (3)  A transaction which results in the issuance or transfer by
      the corporation or by any direct or indirect majority-owned
      subsidiary of the corporation of any stock of the corporation or of
      such subsidiary to the interested shareholder, except for the
      following:
         (a)  Pursuant to the exercise, exchange, or conversion of
      securities exercisable for, exchangeable for, or convertible into
      stock of the corporation or such subsidiary which securities were
      outstanding prior to the time that the interested shareholder became
      an interested shareholder.
         (b)  Pursuant to a merger under section 490.1105.
         (c)  Pursuant to a distribution paid or made, or the exercise,
      exchange, or conversion of securities exercisable for, exchangeable
      for, or convertible into stock of such corporation or any such
      subsidiary, which stock is distributed pro rata to all holders of a
      class or series of stock of the corporation subsequent to the time
      the interested shareholder became an interested shareholder.
         (d)  Pursuant to an exchange offer by the corporation to purchase
      stock made on the same terms to all holders of the stock.
         (e)  Any issuance or transfer of stock by the corporation,
      provided, however, that in no case under subparagraph divisions (c)
      and (d) and this subparagraph division shall there be an increase in
      the interested shareholder's proportionate share of the stock of any
      class or series of the corporation or of the voting stock of the
      corporation.
         (4)  A transaction involving the corporation or any direct or
      indirect majority-owned subsidiary of the corporation which has the
      effect, directly or indirectly, of increasing the proportionate share
      of the stock of any class or series, or securities convertible into
      the stock of any class or series, of the corporation or of any such
      subsidiary which is owned by the interested shareholder, except as a
      result of immaterial changes due to fractional share adjustments or
      as a result of any purchase or redemption of any shares of stock not
      caused, directly or indirectly, by the interested shareholder.
         (5)  The receipt by the interested shareholder of the benefit,
      directly or indirectly, except proportionately as a shareholder of
      such corporation, of any loans, advances, guarantees, pledges, or
      other financial benefits, other than those expressly permitted in
      subparagraphs (1) through (4), provided by or through the corporation
      or any direct or indirect majority-owned subsidiary.
         d.  "Control", including the terms "controlling",
      "controlled by", and "under common control with", means the
      ability, directly or indirectly, to direct or cause the direction of
      the management and policies of a person, whether through the
      ownership of voting stock, by contract, or otherwise.  A person who
      is the owner of twenty percent or more of the outstanding voting
      stock of any corporation, partnership, unincorporated association, or
      other entity is presumed to have control of such entity, in the
      absence of proof by a preponderance of the evidence to the contrary.
      Notwithstanding this paragraph, a presumption of control shall not
      apply where a person holds voting stock, in good faith and not for
      the purpose of circumventing this section, as an agent, bank, broker,
      nominee, custodian, or trustee for one or more owners who do not
      individually or as a group have control of such entity.
         e.  "Interested shareholder" means any person, other than the
      corporation and any direct or indirect majority-owned subsidiary of
      the corporation, that is the owner of ten percent or more of the
      outstanding voting stock of the corporation, or is an affiliate or
      associate of the corporation and was the owner of ten percent or more
      of the outstanding voting stock of the corporation at any time within
      the three-year period immediately prior to the date on which it is
      sought to be determined whether such person is an interested
      shareholder, and the affiliates and associates of such person.
      "Interested shareholder" does not include a person whose
      ownership of shares in excess of the ten percent limitation is the
      result of action taken solely by the corporation, provided that such
      person is an interested shareholder if, after such action by the
      corporation, the person acquires additional shares of voting stock of
      the corporation, other than as a result of further corporate action
      not caused, directly or indirectly, by such person.
         For purposes of determining whether a person is an interested
      shareholder, the outstanding voting stock of the corporation does not
      include any other unissued stock of the corporation which may be
      issuable pursuant to any agreement, arrangement, or understanding, or
      upon exercise of conversion rights, warrants, or options, or
      otherwise.
         f.  "Owner", including the terms "own" and "owned"
      when used with respect to any stock, means a person that individually
      or with or through any of such person's affiliates or associates
      satisfies any of the following:
         (1)  Beneficially owns such stock, directly or indirectly.
         (2)  Has the right to do either of the following:
         (a)  Acquire such stock, whether such right is exercisable
      immediately or only after the passage of time, pursuant to any
      agreement, arrangement, or understanding, or upon the exercise of
      conversion rights, exchange rights, warrants, or options, or
      otherwise.  However, a person is not deemed the owner of stock
      tendered pursuant to a tender or exchange offer made by such person
      or any of such person's affiliates or associates until such tendered
      stock is accepted for purchase or exchange.
         (b)  Vote such stock pursuant to any agreement, arrangement, or
      understanding.  However, a person is not deemed the owner of any
      stock because of such person's right to vote such stock if the
      agreement, arrangement, or understanding to vote such stock arises
      solely from the revocable proxy or consent given in response to a
      proxy or consent solicitation made to ten or more persons.
         (3)  Has any agreement, arrangement, or understanding for the
      purpose of acquiring, holding, voting, or disposing of such stock
      with any other person who beneficially owns, or whose affiliates or
      associates beneficially own, directly or indirectly, such stock.
      However, an agreement, arrangement, or understanding for the purpose
      of voting such stock does not include voting pursuant to a revocable
      proxy or consent under subparagraph (2), subparagraph division (b).
         g.  "Person" means any individual, corporation, partnership,
      unincorporated association, or other entity.
         h.  "Stock" means, with respect to any corporation, capital
      stock and, with respect to any other entity, any equity interest.
         i.  "Voting stock" means, with respect to any corporation,
      stock of any class or series entitled to vote generally in the
      election of directors and, with respect to any entity that is not a
      corporation, any equity interest entitled to vote generally in the
      election of the governing body of such entity.
         4.  The articles of incorporation or bylaws shall not require, for
      any vote of shareholders required by this section, a greater vote of
      shareholders than that specified in this section.  

         97 Acts, ch 117, §5; 97 Acts, ch 188, § 52; 98 Acts, ch 1100, §
      66; 2002 Acts, ch 1154, §74, 75, 125; 2009 Acts, ch 41, §263