Iowa Code 490.856 – Indemnification of officers
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1. A corporation may indemnify and advance expenses under this part to an officer who is a party to a proceeding because the person is an officer, according to all of the following:
a. To the same extent as a director.
b. If the person is an officer but not a director, to such further extent as may be provided by the articles of incorporation or bylaws, or by a resolution adopted or a contract approved by the board of directors or shareholders, except for any of the following:
(1) Liability in connection with a proceeding by or in the right of the corporation other than for expenses incurred in connection with the proceeding.
(2) Liability arising out of conduct that constitutes any of the following:
(a) Receipt by the officer of a financial benefit to which the officer is not entitled.
(b) An intentional infliction of harm on the corporation or the shareholders.
(c) An intentional violation of criminal law.
Terms Used In Iowa Code 490.856
- Articles of incorporation: means the articles of incorporation described in section 490. See Iowa Code 490.140
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Expenses: means reasonable expenses of any kind, including reasonable fees and expenses of counsel and experts, that are incurred in connection with a matter. See Iowa Code 490.140
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Person: means a person as defined in section 4. See Iowa Code 490.140
- Proceeding: includes a civil suit and criminal, administrative, and investigatory action. See Iowa Code 490.140
2. The provisions of subsection 1, paragraph “b”, shall apply to an officer who is also a director, if the officer is made a party to the proceeding based on an act or omission solely as an officer.
3. An officer who is not a director is entitled to mandatory indemnification under section 490.852, and may apply to a court under section 490.854 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those sections.