Senate File 2378 - Enrolled
SENATE FILE
BY COMMITTEE ON JUDICIARY
(SUCCESSOR TO SSB
3183)
(COMPANION TO lsb
6163hv by committee on
judiciary)
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A BILL FOR
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Senate File 2378
AN ACT
RELATING TO THE BOARDS OF DIRECTORS OF PUBLIC
CORPORATIONS, AND INCLUDING EFFECTIVE DATE PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 490.803, subsections 2 and 3, Code 2018,
are amended to read as follows:
2. a. The number of directors may be increased or decreased
from time to time by amendment to, or in the manner provided
in, the articles of incorporation or the bylaws.
b. (1) Notwithstanding paragraph "a", the number of
directors of a public corporation subject to section 490.806A,
subsection 1, or section 490.806B, shall be increased or
decreased only by the affirmative vote of a majority of its
board of directors.
(2) This paragraph "b" is repealed on January 1, 2022.
3. a. Directors are elected at the first annual
shareholders' meeting and at each annual meeting thereafter
unless their terms are staggered under section 490.806 or
490.806A.
b. (1) Notwithstanding paragraph "a", for a public
corporation subject to section 490.806A, subsection 1, or
section 490.806B, a director's term shall be staggered as
provided in section 490.806A, subsection 1, or may be staggered
as provided in section 490.806B.
(2) This subparagraph is repealed on January 1, 2022.
Sec. 2. Section 490.805, subsections 2 and 4, Code 2018, are
amended to read as follows:
2. a. The terms of all other directors expire at the next
annual shareholders' meeting following their election unless
their terms are staggered under section 490.806 or 490.806A.
b. (1) Notwithstanding paragraph "a", for a public
corporation subject to section 490.806A, subsection 1, or
section 490.806B, the terms of directors shall be staggered as
provided in section 490.806A, subsection 1, or may be staggered
as provided in section 490.806B.
(2) This paragraph "b" is repealed on January 1, 2022.
4. a. The term of a director elected to fill a vacancy
expires at the next shareholders' meeting at which directors
are elected, except as provided in section 490.806A.
b. (1) Notwithstanding paragraph "a", for a public
corporation subject to section 490.806A, subsection 1, or
section 490.806B, the term of a director elected to fill a
vacancy expires as provided in section 490.806A, subsection 1,
or section 490.806B.
(2) This paragraph "b" is repealed on January 1, 2022.
Sec. 3. Section 490.806, Code 2018, is amended to read as
follows:
490.806 Staggered terms for directors.
1. Except as otherwise provided in section 490.806A, a
corporation's The articles of incorporation may provide for
staggering the terms of its directors by dividing the total
number of directors into two or three groups, with each group
containing one=half or one=third of the total, as near as may
be. In that event, the terms of directors in the first group
expire at the first annual shareholders' meeting after their
election, the terms of the second group expire at the second
annual shareholders' meeting after their election, and the
terms of the third group, if any, expire at the third annual
shareholders' meeting after their election. At each annual
shareholders' meeting held thereafter, directors shall be
chosen for a term of two years or three years, as the case may
be, to succeed those whose terms expire.
2. a. Subsection 1 does not apply to a public corporation
that is subject to section 490.806A, subsection 1, but may
apply to a public corporation that is subject to section
490.806B.
b. This subsection is repealed on January 1, 2022.
Sec. 4. Section 490.806A, Code 2018, is amended by adding
the following new subsection:
NEW SUBSECTION. 3. This section is repealed on January 1,
2022.
Sec. 5. NEW SECTION. 490.806B Public corporations ====
nonstaggered terms.
1. Notwithstanding section 490.806A, the board of directors
of any public corporation which, as of January 1, 2019, is
subject to section 490.806A, subsection 1, shall adopt an
amendment to its articles of incorporation that includes all
of the following:
a. The staggered terms of the class I directors, class II
directors, and class III directors elected or appointed prior
to January 1, 2019, shall cease at the expiration of their then
current terms as provided in section 490.806A, subsection 1.
b. The terms of directors elected or appointed on or after
January 1, 2019, shall expire at the next annual shareholders'
meeting following their election or appointment.
c. Any other changes that the directors determine are
necessary to implement the provisions of this subsection.
2. Any amendment to the articles of incorporation as
provided in subsection 1 shall be made without shareholder
approval.
3. Notwithstanding subsection 1, the public corporation's
articles of incorporation may provide for staggering the terms
of its directors as provided in section 490.806.
4. Section 490.803, subsection 2, paragraph "b", and section
490.810, subsection 1A, shall continue to apply to a public
corporation subject to subsection 1 of this section.
5. This section is repealed on January 1, 2022.
Sec. 6. Section 490.810, subsection 1A, Code 2018, is
amended to read as follows:
1A. a. For a public corporation subject to section
490.806A, subsection 1, or section 490.806B, a vacancy on the
board of directors, including but not limited to a vacancy
resulting from an increase in the number of directors, shall
be filled solely by the affirmative vote of a majority of the
remaining directors, even though less than a quorum of the
board.
b. This subsection is repealed on January 1, 2022.
Sec. 7. Section 490.1005A, Code 2018, is amended by adding
the following new subsection:
NEW SUBSECTION. 3. This section is repealed on January 1,
2022.
Sec. 8. CONTINUATION OF THE ARTICLES OF INCORPORATION.
Notwithstanding the repeals of section 490.806A, as amended
by this Act and section 490.806B as enacted by this Act,
any amendment to the articles of incorporation of a public
corporation adopted in compliance with section 490.806A or
section 490.806B as described in this section and in effect
immediately prior to January 1, 2022, shall remain in effect
until amended or repealed as provided in the relevant sections
of chapter 490 as those sections exist on or after January 1,
2022.
Sec. 9. EFFECTIVE DATE. The following takes effect January
1, 2019:
The section of this Act enacting section 490.806B.
JACK WHITVER
LINDA UPMEYER
W. CHARLES SMITH
KIM REYNOLDS
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