Iowa Code 501.417 – Indemnification of officers
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1. A cooperative may indemnify and advance expenses under this part to an officer of the cooperative who is a party to the proceeding because the person is an officer, according to both of the following:
a. To the same extent as to 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 association, the bylaws, a resolution of the board of directors, or contract, except for either of the following:
(1) Liability in connection with a proceeding by or in the right of the cooperative other than for reasonable 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 cooperative or the interest holders.
(c) An intentional violation of criminal law.
Terms Used In Iowa Code 501.417
- Articles: means the cooperative's articles of association. See Iowa Code 501.101
- Board: means the cooperative's board of directors. See Iowa Code 501.101
- Contract: A legal written agreement that becomes binding when signed.
- Cooperative: means a cooperative association organized under this chapter or converted to this chapter pursuant to section 501. See Iowa Code 501.101
- 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
- Interest: means a voting interest or other interest in a cooperative as described in the cooperative's articles of association. See Iowa Code 501.101
- person: means individual, corporation, limited liability company, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity. See Iowa Code 4.1
2. The provisions of subsection 1, paragraph “b”, shall apply to an officer who is also a director if the basis on which the officer is made a party to a proceeding is an act or omission solely as an officer.
3. An officer of a cooperative who is not a director is entitled to mandatory indemnification under section 501.413, and may apply to a court under section 501.415 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or an advance for expenses under those provisions.