1. The articles may contain a provision eliminating or limiting the personal liability of a director, officer, or interest holder of the cooperative for money damages for any action taken, or any failure to take action as a director, officer, or interest holder, except liability for any of the following:

 a. An intentional infliction of harm on the cooperative or its members.
 b. An intentional violation of criminal law.
 c. The amount of a financial benefit received by the person to which the person is not entitled.
 d. An act or omission occurring prior to the date when the provision in the articles becomes effective.

Terms Used In Iowa Code 501.407

  • Articles: means the cooperative's articles of association. See Iowa Code 501.101
  • Cooperative: means a cooperative association organized under this chapter or converted to this chapter pursuant to section 501. See Iowa Code 501.101
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • 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
  • Interest holder: means a person who owns an interest in a cooperative, whether or not that interest has voting rights. 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 articles may contain a provision permitting or making obligatory indemnification of a director or officer for liability, as defined in section 501.411, to any person for any action taken, or any failure to take any action, as a director or officer, except liability for any of the following:

 a. Receipt of a financial benefit to which the person is not entitled.
 b. An intentional infliction of harm on the cooperative or its members.
 c. An intentional violation of criminal law.
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