Iowa Code 490.143 – Qualified director
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1. As used in this chapter, a “qualified director” means a director who takes action, if at the time action is to be taken any of the following applies:
a. Under section 490.202, subsection 2, paragraph “f”, the director is not a director under any of the following circumstances:
(1) To whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the corporation would apply.
(2) Has a material relationship with any other person to whom the limitation or elimination described in subparagraph (1) would apply.
b. Under section 490.744, the director does not have any of the following:
(1) A material interest in the outcome of the proceeding.
(2) A material relationship with a person who has such an interest.
c. Under section 490.853 or 490.855, all of the following apply:
(1) The director is not a party to the proceeding.
(2) The director is not a director as to whom a transaction is a director’s conflicting interest transaction or who sought a disclaimer of the corporation’s interest in a business opportunity under section 490.870, which transaction or disclaimer is challenged in the proceeding.
(3) The director does not have a material relationship with a director described in either subparagraph (1) or (2).
d. Under section 490.862, the director is not any of the following:
(1) A director as to whom the transaction is a director’s conflicting interest transaction.
(2) A director who has a material relationship with another director as to whom the transaction is a director’s conflicting interest transaction.
e. Under section 490.870, the director is not a director who does any of the following:
(1) Pursues or takes advantage of the business opportunity, directly, or indirectly through or on behalf of another person.
(2) Has a material relationship with a director or officer who pursues or takes advantage of the business opportunity, directly, or indirectly through or on behalf of another person.
Terms Used In Iowa Code 490.143
- 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.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- 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
- Individual: means a natural person. See Iowa Code 490.140
- Interest: means either or both of the following rights under the organic law governing an unincorporated entity:a. See Iowa Code 490.140
- Material relationship: means a familial, financial, professional, employment, or other relationship that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken. See Iowa Code 490.143
- 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
- qualified director: means a director who takes action, if at the time action is to be taken any of the following applies:
a. See Iowa Code 490.1432. As used in this section, all of the following apply:a. “Material interest” means an actual or potential benefit or detriment, other than one which would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken.b. “Material relationship” means a familial, financial, professional, employment, or other relationship that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken.3. The presence of one or more of the following circumstances shall not automatically prevent a director from being a qualified director:a. Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter, or by any person that has a material relationship with that director, acting alone or participating with others.b. Service as a director of another corporation of which a director who is not a qualified director with respect to the matter, or any individual who has a material relationship with that director, is or was also a director.c. With respect to action to be taken under section 490.744, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.