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1. A corporation shall not indemnify a director under section 490.851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in section 490.851.
2. The determination shall be made by any of the following:
a. If there are two or more qualified directors, by the board of directors by a majority vote of all the qualified directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more qualified directors appointed by such a vote.
b. By special legal counsel selected in one of the following manners:
(1) Selected in the manner prescribed in paragraph “a”.
(2) If there are fewer than two qualified directors, selected by the board of directors, in which selection directors who are not qualified directors may participate.
c. By the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director shall not be voted on the determination.
3. Authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two qualified directors or if the determination is made by special legal counsel, authorization of indemnification shall be made by those entitled to select special legal counsel under subsection 2, paragraph “b”, subparagraph (2).
Cite this article: FindLaw.com - Iowa Code Title XII. Business Entities [Chs. 486-504C] § 490.855. Determination and authorization of indemnification - last updated January 01, 2020 | https://codes.findlaw.com/ia/title-xii-business-entities-chs-486-504c/ia-code-sect-490-855/
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