2009 Iowa Code
Title 12 - Business Entities
Subtitle 2 - Business and Professional Corporations and Companies
CHAPTER 490 - BUSINESS CORPORATIONS
490.621 - ISSUANCE OF SHARES.

        490.621  ISSUANCE OF SHARES.
         1.  The powers granted in this section to the board of directors
      may be reserved to the shareholders by the articles of incorporation.

         2.  The board of directors may authorize shares to be issued for
      consideration consisting of any tangible or intangible property or
      benefit to the corporation, including cash, promissory notes,
      services performed, contracts for services to be performed, or other
      securities of the corporation.
         3.  Before the corporation issues shares, the board of directors
      must determine that the consideration received or to be received for
      shares to be issued is adequate.  That determination by the board of
      directors is conclusive insofar as the adequacy of consideration for
      the issuance of shares relates to whether the shares are validly
      issued, fully paid, and nonassessable.
         4.  When the corporation receives the consideration for which the
      board of directors authorized the issuance of shares, the shares
      issued for that consideration are fully paid and nonassessable.
         5.  The corporation may place in escrow shares issued for a
      contract for future services or benefits or a promissory note, or
      make other arrangements to restrict the transfer of the shares, and
      may credit distributions in respect of the shares against their
      purchase price, until the services are performed, the note is paid,
      or the benefits received.  If the services are not performed, the
      note is not paid, or the benefits are not received, the shares
      escrowed or restricted and the distributions credited may be canceled
      in whole or in part.
         6. a.  An issuance of shares or other securities convertible
      into or rights exercisable for shares, in a transaction or a series
      of integrated transactions, requires approval of the shareholders, at
      a meeting at which a quorum exists consisting of at least a majority
      of the votes entitled to be cast on the matter, if both of the
      following conditions are satisfied:
         (1)  The shares, other securities, or rights are issued for
      consideration other than cash or cash equivalents.
         (2)  The voting power of shares that are issued and issuable as a
      result of the transaction or series of integrated transactions will
      comprise more than twenty percent of the voting power of the shares
      of the corporation that were outstanding immediately before the
      transaction.
         b.  For purposes of this subsection, the following shall
      apply:
         (1)  For purposes of determining the voting power of shares issued
      and issuable as a result of a transaction or series of integrated
      transactions, the voting power of shares shall be the greater of the
      following:
         (a)  The voting power of the shares to be issued.
         (b)  The voting power of the shares that would be outstanding
      after giving effect to the conversion of convertible shares and other
      securities and the exercise of rights to be issued.
         (2)  A series of transactions is integrated if consummation of one
      transaction is made contingent on consummation of one or more of the
      other transactions.  

         89 Acts, ch 288, §41; 2002 Acts, ch 1154, §11, 125
         Referred to in § 490.620, 490.622, 490.1104, 534.508