§ 491.101B — Consideration of community interests in consideration of acquisition proposals

Iowa § 491.101B

• Jurisdiction: Iowa
• Title XII: BUSINESS ENTITIES
• Ch. 491: CORPORATIONS FOR PECUNIARY PROFIT

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proposals.
1. A director, in determining what is in the best interest of the corporation when
considering a tender offer or proposal of acquisition, merger, consolidation, or similar
proposal, may consider any or all of the following community interest factors, in addition to
consideration of the effects of any action on shareholders:
a. The effects of the action on the corporation’s employees, suppliers, creditors, and
customers.
b. The effects of the action on the communities in which the corporation operates.
c. The long-term as well as short-term interests of the corporation and its shareholders,
including the possibility that these interests may be best served by the continued
independence of the corporation.
2. If on the basis of the community interest factors described in subsection 1, the board
of directors determines that a proposal or offer to acquire or merge the corporation is not
in the best interests of the corporation, it may reject the proposal or offer. If the board
of directors determines to reject any such proposal or offer, the board of directors has no
obligation to facilitate, to remove any barriers to, or to refrain from impeding, the proposal
or offer. Consideration of any or all of the community interest factors is not a violation of
the business judgment rule or of any duty of the director to the shareholders, or a group of
shareholders, even if the director reasonably determines that a community interest factor or
factors outweigh the financial or other benefits to the corporation or a shareholder or group
of shareholders.