2009 Iowa Code
Title 12 - Business Entities
Subtitle 2 - Business and Professional Corporations and Companies
CHAPTER 490 - BUSINESS CORPORATIONS
490.832 - DIRECTOR CONFLICT OF INTEREST.

        490.832  DIRECTOR CONFLICT OF INTEREST.
         1.  A conflict of interest transaction is a transaction with the
      corporation in which a director of the corporation has a direct or
      indirect interest.  A conflict of interest transaction is not
      voidable by the corporation solely because of the director's interest
      in the transaction if any one of the following is true:
         a.  The material facts of the transaction and the director's
      interest were disclosed or known to the board of directors or a
      committee of the board of directors and the board of directors or
      committee authorized, approved, or ratified the transaction.
         b.  The material facts of the transaction and the director's
      interest were disclosed or known to the shareholders entitled to vote
      and the shareholders authorized, approved, or ratified the
      transaction.
         c.  The transaction was fair to the corporation.
         2.  For purposes of this section, a director of the corporation
      has an indirect interest in a transaction if either of the following
      is true:
         a.  Another entity in which the director has a material
      financial interest or in which the director is a general partner is a
      party to the transaction.
         b.  Another entity of which the director is a director,
      officer, or trustee is a party to the transaction and the transaction
      is or should be considered by the board of directors of the
      corporation.
         3.  For purposes of subsection 1, paragraph "a", a conflict of
      interest transaction is authorized, approved, or ratified if it
      receives the affirmative vote of a majority of the directors on the
      board of directors or on the committee, who have no direct or
      indirect interest in the transaction, but a transaction may not be
      authorized, approved, or ratified under this section by a single
      director.  If a majority of the directors who have no direct or
      indirect interest in the transaction vote to authorize, approve, or
      ratify the transaction, a quorum is present for the purpose of taking
      action under this section.  The presence of, or a vote cast by, a
      director with a direct or indirect interest in the transaction does
      not affect the validity of any action taken under subsection 1,
      paragraph "a", if the transaction is otherwise authorized,
      approved, or ratified as provided in that subsection.
         4.  For purposes of subsection 1, paragraph "b", a conflict of
      interest transaction is authorized, approved, or ratified if it
      receives the vote of a majority of the shares entitled to be counted
      under this subsection.  Shares owned by or voted under the control of
      a director who has a direct or indirect interest in the transaction,
      and shares owned by or voted under the control of an entity described
      in subsection 2, paragraph "a", shall not be counted in a vote of
      shareholders to determine whether to authorize, approve, or ratify a
      conflict of interest transaction under subsection 1, paragraph
      "b".  The vote of those shares, however, is counted in
      determining whether the transaction is approved under other sections
      of this chapter.  A majority of the shares, whether or not present,
      that are entitled to be counted in a vote on the transaction under
      this subsection constitutes a quorum for the purpose of taking action
      under this section.  
         Section History: Recent Form
         89 Acts, ch 288, §91; 90 Acts, ch 1205, §26; 2002 Acts, ch 1154,
      §39, 125
         Referred to in § 490.831, 490.870, 490.1302, 491.16A

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