§ 490.851 — Permissible indemnification

Iowa § 490.851

• Jurisdiction: Iowa
• Title XII: BUSINESS ENTITIES
• Ch. 490: BUSINESS CORPORATIONS

Text

1. Exceptasotherwiseprovidedinthissection,acorporationmayindemnifyanindividual
who is a party to a proceeding because the individual is a director against liability incurred
in the proceeding if any of the following apply:
a. All of the following apply:
(1) The director’s conduct was in good faith.
(2) The director reasonably believed:
(a) In the case of conduct in an official capacity, that the director’s conduct was in the best
interests of the corporation.
(b) In all other cases, that the director’s conduct was at least not opposed to the best
interests of the corporation.
(3) In the case of any criminal proceeding, the director had no reasonable cause to believe
the director’s conduct was unlawful.
b. The director engaged in conduct for which broader indemnification has been made
permissible or obligatory under a provision of the articles of incorporation, as authorized by
section 490.202, subsection 2, paragraph “e”.
2. A director’s conduct with respect to an employee benefit plan for a purpose the director
reasonably believed to be in the interests of the participants in, and the beneficiaries of, the
plan is conduct that satisfies the requirement of subsection 1, paragraph “a”, subparagraph
(2), subparagraph division (b).
3. The termination of a proceeding by judgment, order, settlement, or conviction, or upon

a plea of nolo contendere or its equivalent, is not, of itself, determinative that the director did
not meet the relevant standard of conduct described in this section.
4. Unless ordered by a court under section 490.854, subsection 1, paragraph “c”, a
corporation shall not indemnify a director in any of the following circumstances:
a. In connection with a proceeding by or in the right of the corporation, except for
expenses incurred in connection with the proceeding if it is determined that the director has
met the relevant standard of conduct under subsection 1.
b. In connection with any proceeding with respect to conduct for which the director was
adjudged liable on the basis of receiving a financial benefit to which the director was not
entitled, regardless of whether it involved action in the director’s official capacity.