(D) "Articles" includes original articles of incorporation, | 25 |
certificates of reorganization, amended articles, and amendments | 26 |
to any of these, and, in the case of a corporation created before | 27 |
September 1, 1851, the special charter and any amendments to it | 28 |
made by special act of the general assembly or pursuant to general | 29 |
law. | 30 |
(F) "Shareholder" means a person whose name appears on the | 33 |
books of the corporation as the owner of shares of the | 34 |
corporation. Unless the articles, the regulations adopted by the | 35 |
shareholders, the regulations adopted by the directors pursuant to | 36 |
division (A)(1) of section 1701.10 of the Revised Code, or the | 37 |
contract of subscription otherwise provides, "shareholder" | 38 |
includes a subscriber to shares, whether the subscription is | 39 |
received by the incorporators or pursuant to authorization by the | 40 |
directors, and such shares shall be deemed to be outstanding | 41 |
shares. | 42 |
(K) "Treasury shares" means shares belonging to the | 56 |
corporation and not retired that have been either issued and | 57 |
thereafter acquired by the corporation or paid as a dividend or | 58 |
distribution in shares of the corporation on treasury shares of | 59 |
the same class; such shares shall be deemed to be issued, but they | 60 |
shall not be considered as an asset or a liability of the | 61 |
corporation, or as outstanding for dividend or distribution, | 62 |
quorum, voting, or other purposes, except, when authorized by the | 63 |
directors, for dividends or distributions in authorized but | 64 |
unissued shares of the corporation of the same class. | 65 |
(P) "Parent corporation" or "parent" means a domestic or | 78 |
foreign corporation that owns and holds of record shares of | 79 |
another corporation, domestic or foreign, entitling the holder of | 80 |
the shares at the time to exercise a majority of the voting power | 81 |
in the election of the directors of the other corporation without | 82 |
regard to voting power that may thereafter exist upon a default, | 83 |
failure, or other contingency; "subsidiary corporation" or | 84 |
"subsidiary" means a domestic or foreign corporation of which | 85 |
another corporation, domestic or foreign, is the parent. | 86 |
"Transferee corporation" in a combination means the | 99 |
corporation, domestic or foreign, to which the assets are | 100 |
transferred, and "transferor corporation" in a combination means | 101 |
the corporation, domestic or foreign, transferring such assets and | 102 |
to which, or to the shareholders of which, the voting shares of | 103 |
the domestic or foreign corporation are issued or transferred. | 104 |
(R) "Majority share acquisition" means the acquisition of | 105 |
shares of a corporation, domestic or foreign, entitling the holder | 106 |
of the shares to exercise a majority of the voting power in the | 107 |
election of directors of such corporation without regard to voting | 108 |
power that may thereafter exist upon a default, failure, or other | 109 |
contingency, by either of the following: | 110 |
(S) "Acquiring corporation" in a combination means the | 116 |
domestic corporation whose voting shares are issued or transferred | 117 |
by it or its subsidiary or subsidiaries to the transferor | 118 |
corporation or corporations or the shareholders of the transferor | 119 |
corporation or corporations; and "acquiring corporation" in a | 120 |
majority share acquisition means the domestic corporation whose | 121 |
voting shares are issued or transferred by it or its subsidiary in | 122 |
consideration for shares of a domestic or foreign corporation | 123 |
entitling the holder of the shares to exercise a majority of the | 124 |
voting power in the election of directors of such corporation. | 125 |
(T) When used in connection with a combination or a majority | 126 |
share acquisition, "voting shares" means shares of a corporation, | 127 |
domestic or foreign, entitling the holder of the shares to vote at | 128 |
the time in the election of directors of such corporation without | 129 |
regard to voting power which may thereafter exist upon a default, | 130 |
failure, or other contingency. | 131 |
(U) "An emergency" exists when the governor, or any other | 132 |
person lawfully exercising the power and discharging the duties of | 133 |
the office of governor, proclaims that an attack on the United | 134 |
States or any nuclear, atomic, or other disaster has caused an | 135 |
emergency for corporations, and such an emergency shall continue | 136 |
until terminated by proclamation of the governor or any other | 137 |
person lawfully exercising the powers and discharging the duties | 138 |
of the office of governor. | 139 |
(V) "Constituent corporation" means an existing corporation | 140 |
merging into or into which is being merged one or more other | 141 |
entities in a merger or an existing corporation being consolidated | 142 |
with one or more other entities into a new entity in a | 143 |
consolidation, whether any of the entities is domestic or foreign, | 144 |
and "constituent entity" means any entity merging into or into | 145 |
which is being merged one or more other entities in a merger, or | 146 |
an existing entity being consolidated with one or more other | 147 |
entities into a new entity in a consolidation, whether any of the | 148 |
entities is domestic or foreign. | 149 |
(Z)(1) "Control share acquisition" means the acquisition, | 166 |
directly or indirectly, by any person of shares of an issuing | 167 |
public corporation that, when added to all other shares of the | 168 |
issuing public corporation in respect of which the person may | 169 |
exercise or direct the exercise of voting power as provided in | 170 |
this division, would entitle the person, immediately after the | 171 |
acquisition, directly or indirectly, alone or with others, to | 172 |
exercise or direct the exercise of the voting power of the issuing | 173 |
public corporation in the election of directors within any of the | 174 |
following ranges of such voting power: | 175 |
A bank, broker, nominee, trustee, or other person that | 181 |
acquires shares in the ordinary course of business for the benefit | 182 |
of others in good faith and not for the purpose of circumventing | 183 |
section 1701.831 of the Revised Code shall, however, be deemed to | 184 |
have voting power only of shares in respect of which such person | 185 |
would be able, without further instructions from others, to | 186 |
exercise or direct the exercise of votes on a proposed control | 187 |
share acquisition at a meeting of shareholders called under | 188 |
section 1701.831 of the Revised Code. | 189 |
(e) Pursuant to a merger or consolidation adopted, or a | 206 |
combination or majority share acquisition authorized, by vote of | 207 |
the shareholders of the issuing public corporation in compliance | 208 |
with section 1701.78, 1701.781, 1701.79, 1701.791, or 1701.83 of | 209 |
the Revised Code, or pursuant to a merger adopted in compliance | 210 |
with section 1701.802 of the Revised Code; | 211 |
(g) The person's being engaged in business as an underwriter | 219 |
of securities who acquires the shares directly from the issuing | 220 |
public corporation or an affiliate or associate of the issuing | 221 |
public corporation through its participation in good faith in a | 222 |
firm commitment underwriting registered under the "Securities Act | 223 |
of 1933," 15 U.S.C. 77a et seq., and not for the purpose of | 224 |
circumventing section 1701.831 of the Revised Code. | 225 |
The acquisition by any person of shares of an issuing public | 226 |
corporation in a manner described under division (Z)(2) of this | 227 |
section shall be deemed a control share acquisition authorized | 228 |
pursuant to section 1701.831 of the Revised Code within the range | 229 |
of voting power under division (Z)(1)(a), (b), or (c) of this | 230 |
section that such person is entitled to exercise after the | 231 |
acquisition, provided, in the case of an acquisition in a manner | 232 |
described under division (Z)(2)(c) or (d) of this section, the | 233 |
transferor of shares to such person had previously obtained any | 234 |
authorization of shareholders required under section 1701.831 of | 235 |
the Revised Code in connection with the transferor's acquisition | 236 |
of shares of the issuing public corporation. | 237 |
(3) The acquisition of shares of an issuing public | 238 |
corporation in good faith and not for the purpose of circumventing | 239 |
section 1701.831 of the Revised Code from any person whose control | 240 |
share acquisition previously had been authorized by shareholders | 241 |
in compliance with section 1701.831 of the Revised Code, or from | 242 |
any person whose previous acquisition of shares of an issuing | 243 |
public corporation would have constituted a control share | 244 |
acquisition but for division (Z)(2) or (3) of this section, does | 245 |
not constitute a control share acquisition for the purpose of | 246 |
section 1701.831 of the Revised Code unless such acquisition | 247 |
entitles the person making the acquisition, directly or | 248 |
indirectly, alone or with others, to exercise or direct the | 249 |
exercise of voting power of the corporation in the election of | 250 |
directors in excess of the range of voting power authorized | 251 |
pursuant to section 1701.831 of the Revised Code, or deemed to be | 252 |
so authorized under division (Z)(2) of this section. | 253 |
(d) Any person that acquires such shares for valuable | 269 |
consideration during the period beginning with the date of the | 270 |
first public disclosure of a proposal for, or expression of | 271 |
interest in, a control share acquisition of the issuing public | 272 |
corporation; a transaction pursuant to section 1701.76, 1701.78, | 273 |
1701.781, 1701.79, 1701.791, 1701.83, or 1701.86 of the Revised | 274 |
Code that involves the issuing public corporation or its assets; | 275 |
or any action that would directly or indirectly result in a change | 276 |
in control of the issuing public corporation or its assets, and | 277 |
ending on the record date established by the directors pursuant to | 278 |
section 1701.45 and division (D) of section 1701.831 of the | 279 |
Revised Code, if either of the following applies: | 280 |
(b) By the shareholders at a meeting held for that purpose, | 322 |
by the affirmative vote of the holders of shares entitling them to | 323 |
exercise a majority of the voting power of the corporation on the | 324 |
proposal, or if the articles or regulations that have been adopted | 325 |
so provide, by the affirmative vote of the holders entitling them | 326 |
to exercise a greater proportion than a majority of the voting | 327 |
power of the corporation on the proposal; | 328 |
(c) Without a meeting, by the written consent of the holders | 329 |
of shares entitling them to exercise two-thirds of the voting | 330 |
power of the corporation on the proposal, or if the articles or | 331 |
regulations that have been adopted so provide or permit, by the | 332 |
written consent of the holders of shares entitling them to | 333 |
exercise a greater or lesser proportion but not less than a | 334 |
majority of the voting power of the corporation on the proposal; | 335 |
(d) If and to the extent that the articles or regulations so | 336 |
provide or permit and unless a provision of the Revised Code | 337 |
reserves such authority to shareholders, by the directors, | 338 |
provided that no provision or permission in the articles or | 339 |
regulations may divest shareholders of the power, or limit the | 340 |
shareholders' power, to adopt, amend, or repeal regulations. | 341 |
(2) Any amendment of regulations and any amended or new | 342 |
regulations adopted by shareholders of an issuing public | 343 |
corporation whose directors are classified pursuant to section | 344 |
1701.57 of the Revised Code that would change or eliminate the | 345 |
classification of directors shall be adopted only by the | 346 |
shareholders at a meeting held for that purpose, by the | 347 |
affirmative vote of holders of shares entitling them to exercise | 348 |
the voting power of the corporation that is required for | 349 |
shareholders at a meeting under division (A)(1)(b) of this | 350 |
section, and also by the affirmative vote of the holders of a | 351 |
majority of disinterested shares voted on the proposal determined | 352 |
as specified in division (C)(9) of section 1704.01 of the Revised | 353 |
Code. | 354 |
(b) The restrictions on the transfer and the right to | 403 |
transfer shares described in division (B)(9)(a)(i) and (ii) of | 404 |
this section may include requirements and procedures for consent | 405 |
to an acquisition of the shares by directors based on a | 406 |
determination by the directors of the best interests of the | 407 |
corporation and its shareholders, consent to an acquisition of the | 408 |
shares by shareholders, and reasonable sanctions for a violation | 409 |
of those requirements, including the right of the corporation to | 410 |
refuse to transfer, to redeem, or to deny voting or other | 411 |
shareholder rights appurtenant to shares acquired in an | 412 |
acquisition of the shares. | 413 |
(C) The shareholders of a corporation may adopt and may | 420 |
authorize the directors to adopt, either before or during an | 421 |
emergency, as that term is defined in division (U) of section | 422 |
1701.01 of the Revised Code, emergency regulations that shall be | 423 |
operative only during an emergency. The emergency regulations may | 424 |
include any provisions that are authorized to be included in | 425 |
regulations by divisions (A) and (B) of this section. In addition, | 426 |
unless expressly prohibited by the articles or the regulations, | 427 |
the emergency regulations may make any provision, notwithstanding | 428 |
any different provisions in this chapter and notwithstanding any | 429 |
different provisions in the articles or the regulations that are | 430 |
not expressly stated to be operative during an emergency, that may | 431 |
be practical or necessary with respect to the following: | 432 |
(D)(1) Unless the corporation complies with division (D)(2) | 449 |
of this section, if the regulations are amended or new regulations | 450 |
are adopted other than by the shareholders at a meeting held for | 451 |
that purpose, the secretary of the corporation shall send a copy | 452 |
of the amendment or the new regulations by mail, overnight | 453 |
delivery service, or any other means of communication authorized | 454 |
by the shareholder to whom a copy of the amendment or new | 455 |
regulations is sent, to each shareholder of record as of the date | 456 |
of the adoption of the amendment or the new regulations. | 457 |
(2) Any corporation that files periodic reports with the | 458 |
United States securities and exchange commission pursuant to | 459 |
section 13 of the "Securities Exchange Act of 1934," 48 Stat. 881, | 460 |
15 U.S.C. 78m, as amended, or section 15(d) of the "Securities | 461 |
Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78o(d), as amended, | 462 |
may satisfy the notice to shareholders of record requirement of | 463 |
division (D)(1) of this section by including a copy of the | 464 |
amendment or the new regulations in a report filed in accordance | 465 |
with those sections within twenty days after the adoption of the | 466 |
amendment or the new regulations. | 467 |
(4) If none of the directors attends a meeting of the | 488 |
directors that has been duly called and notice of which has been | 489 |
duly given, the officers of the corporation who are present, not | 490 |
exceeding three, in order of rank, shall be directors for the | 491 |
meeting, shall constitute a quorum for the meeting, and may | 492 |
appoint one or more of the other officers of the corporation | 493 |
directors for the meeting. | 494 |
(5) If the chief executive officer dies, is missing, or for | 495 |
any other reason is temporarily or permanently incapable of | 496 |
discharging the duties of the office, the next ranking officer who | 497 |
is available shall assume the duties and authority of the office | 498 |
of the deceased, missing, or incapacitated chief executive officer | 499 |
until such time as the directors otherwise order. | 500 |
(6) The offices of secretary and treasurer shall be deemed to | 501 |
be of equal rank, and, within the same office and as between the | 502 |
offices of secretary and treasurer, rank shall be determined by | 503 |
priority in time of the first election to the office or, if two or | 504 |
more persons have been first elected to the office at the same | 505 |
time, by seniority in age. | 506 |
Sec. 1701.71. (A)(1)(a) Except as otherwise provided in this | 507 |
divisiondivisions (A)(1)(b), (c), and (d) of this section or | 508 |
division (A)(2) of this section, the shareholders, at a meeting | 509 |
held for that purpose, may adopt an amendment, including any | 510 |
amendment that could be adopted by the directors, by the | 511 |
affirmative vote of the holders of shares entitling them to | 512 |
exercise two-thirds of the voting power of the corporation on the | 513 |
proposal or, if the articles provide or permit, by the affirmative | 514 |
vote of a greater or lesser proportion, but not less than a | 515 |
majority, of such voting power, and by the affirmative vote of the | 516 |
holders of shares of any particular class that is required by the | 517 |
articles.
Any | 518 |
(b) Any amendment that would change or eliminate the | 519 |
classification of directors of an issuing public corporation whose | 520 |
directors are classified pursuant to section 1701.57 of the | 521 |
Revised Code shall be adopted by the shareholders only at a | 522 |
meeting expressly held for that purpose, by the affirmative votes | 523 |
required under this division (A)(1)(a) of this section, and also | 524 |
by the affirmative vote of the holders of at least a majority of | 525 |
disinterested shares voted on the proposal determined as specified | 526 |
in division (C)(9) of section 1704.01 of the Revised Code. If | 527 |
(d) If, at the time an amendment to eliminate cumulative | 537 |
voting rights permitted by division (B)(10) of section 1701.69 of | 538 |
the Revised Code is acted upon by the shareholders, a corporation | 539 |
does not have issued and outstanding shares that are listed on a | 540 |
national securities exchange or are regularly quoted in an | 541 |
over-the-counter market by one or more members of a national or | 542 |
affiliated securities association, that amendment shall not be | 543 |
adopted if the votes of a sufficient number of shares are cast | 544 |
against the amendment that, if cumulatively voted at an election | 545 |
of all the directors, or all the directors of a particular class, | 546 |
as the case may be, would at the time the amendment is acted upon | 547 |
by the shareholders be sufficient to elect at least one director. | 548 |
(2) Whenever under division (B) of this section the holders | 549 |
of shares of any particular class are entitled to vote as a class | 550 |
on the adoption of an amendment, the amendment, in order to be | 551 |
adopted, must receive the affirmative vote of the holders of at | 552 |
least two-thirds of the shares of that class or, if the articles | 553 |
provide or permit, a greater or lesser proportion, but not less | 554 |
than a majority, of the shares of that class. If the proposed | 555 |
amendment would authorize any particular corporate action that, | 556 |
under any applicable provision of law or under the existing | 557 |
articles, could be authorized only by or pursuant to a specified | 558 |
vote of shareholders, the amendment, in order to be adopted, must | 559 |
receive the affirmative vote so specified. | 560 |
(B) Regardless of limitations or restrictions in the articles | 561 |
on the voting rights of the shares of any class, the holders of | 562 |
shares of a particular class, and in the cases specified in | 563 |
divisions (B)(6), (7), and (8) of this section the holders of | 564 |
shares of every class, shall be entitled to vote as a class on the | 565 |
adoption of an amendment that does any of the following: | 566 |
(5) Authorizes shares of another class that are convertible | 582 |
into, or authorizes the conversion of shares of another class | 583 |
into, shares of the particular class, or authorizes the directors | 584 |
to fix or alter conversion rights of shares of another class that | 585 |
are convertible into shares of the particular class; provided, | 586 |
however, both of the following apply: | 587 |
(6) Provides, in the case of an amendment described in | 596 |
division (B)(1) or (2) of this section, that the stated capital of | 597 |
the corporation shall be reduced or eliminated as a result of the | 598 |
amendment, or provides, in the case of an amendment described in | 599 |
division (B)(5) of this section, that the stated capital of the | 600 |
corporation shall be reduced or eliminated upon the exercise of | 601 |
such conversion rights, provided that any reduction or elimination | 602 |
is consistent with section 1701.30 of the Revised Code; | 603 |
(C) An amendment that changes a corporation into a nonprofit | 609 |
corporation shall contain a statement of purposes proper in the | 610 |
case of a nonprofit corporation and a statement that, after the | 611 |
effective date of the amendment, the corporation shall be subject | 612 |
to the provisions of the Revised Code relating to nonprofit | 613 |
corporations. In the case of a corporation formed on or after June | 614 |
9, 1927, the amendment also shall provide for the cancellation of | 615 |
all outstanding shares and the terms and considerations, if any, | 616 |
for the cancellation. In the case of a corporation formed prior to | 617 |
June 9, 1927, the amendment may provide for the cancellation of | 618 |
outstanding shares, but if it does not so provide, the amendment | 619 |
shall contain a provision forbidding the payment of dividends or | 620 |
distributions on any shares after the effective date of the | 621 |
amendment. | 622 |
(A) "Corporation," "domestic corporation," "foreign | 625 |
corporation," "state," "articles," "shareholder," "person," | 626 |
"principal office," "express terms," "treasury shares," "parent | 627 |
corporation," "parent," "subsidiary corporation," "subsidiary," | 628 |
"combination," "transferee corporation," "majority share | 629 |
acquisition," "acquiring corporation," "voting shares" when used | 630 |
in connection with a combination or majority share acquisition, | 631 |
"constituent corporation," "surviving corporation," "close | 632 |
corporation agreement," and "issuing public corporation" have the | 633 |
same meanings as in section 1701.01 of the Revised Code. | 634 |
(b) A person, partnership, corporation, or other entity, | 641 |
however organized, whether or not it is an interested shareholder, | 642 |
that is, or after the merger, consolidation, combination, or | 643 |
majority share acquisition would be, an affiliate or associate of | 644 |
an interested shareholder. | 645 |
(2)(a) Subject to the exception in division (B)(2)(b) of this | 646 |
section, a purchase, lease, sale, distribution, dividend, | 647 |
exchange, mortgage, pledge, transfer, or other disposition of | 648 |
assets, directly or indirectly owned or controlled by the issuing | 649 |
public corporation, by, to, with, or for the benefit of an | 650 |
interested shareholder or an affiliate or associate of an | 651 |
interested shareholder in one or more transactions, if, in any of | 652 |
those transactions, the assets meet any of the following | 653 |
conditions: | 654 |
(3)(a) Subject to the exception in division (B)(3)(b) of this | 672 |
section, a purchase, lease, sale, exchange, transfer, or other | 673 |
disposition of assets directly or indirectly owned or controlled | 674 |
by the interested shareholder or an affiliate or associate of the | 675 |
interested shareholder, by, to, with, or for the benefit of the | 676 |
issuing public corporation in one or more transactions, if, in any | 677 |
of those transactions, the assets meet any of the conditions set | 678 |
forth in division (B)(2)(a)(i), (ii), or (iii) of this section. | 679 |
(4) The issuance or transfer to an interested shareholder or | 686 |
an associate or affiliate of an interested shareholder of any | 687 |
shares, or of any rights to acquire shares, of the issuing public | 688 |
corporation or a subsidiary of the issuing public corporation by | 689 |
the issuing public corporation or a subsidiary of the issuing | 690 |
public corporation, in one or more transactions, if the shares, or | 691 |
the rights, have an aggregate fair market value equal to at least | 692 |
five per cent of the aggregate fair market value of all the | 693 |
outstanding shares of the issuing public corporation and if the | 694 |
shares, or the rights, are not issued or transferred pursuant to | 695 |
the exercise of warrants, rights, or options to purchase that have | 696 |
been issued, or pursuant to a dividend paid or a distribution | 697 |
made, proportionately to all shareholders of the issuing public | 698 |
corporation. | 699 |
(d) Any other transaction, whether or not with, into, or | 720 |
involving the interested shareholder, that is proposed by, on | 721 |
behalf of, or pursuant to a written or unwritten agreement, | 722 |
arrangement, or understanding with the interested shareholder or | 723 |
an affiliate or associate of the interested shareholder. | 724 |
(7) Receipt by an interested shareholder or an affiliate or | 725 |
associate of an interested shareholder of the direct or indirect | 726 |
benefit of a loan, advance, pension or any other employee benefit | 727 |
plan termination, guarantee, pledge, mortgage, security agreement, | 728 |
financing statement, deed of trust, or other financial assistance, | 729 |
or a tax credit or other tax advantage, provided by or through the | 730 |
issuing public corporation or any subsidiary of the issuing public | 731 |
corporation unless the interested shareholder receives the benefit | 732 |
proportionately as a holder of shares of the issuing public | 733 |
corporation. | 734 |
(a) A corporation, partnership, or other entity, however | 744 |
organized, of which the person is an officer, director, or partner | 745 |
or is the beneficial owner of shares entitling that person to | 746 |
exercise at least ten per cent of the voting power in the election | 747 |
of the directors or other governing body of that corporation, | 748 |
partnership, or other entity; | 749 |
(b) The person directly or indirectly, alone or with others, | 763 |
including affiliates or associates of that person, has the right, | 764 |
whether exercisable immediately or only after the passage of time, | 765 |
conditionally, unconditionally, or otherwise, to acquire the | 766 |
shares pursuant to a written or unwritten agreement, arrangement, | 767 |
or understanding or upon the exercise of conversion rights, | 768 |
exchange rights, warrants, calls, options, or otherwise; | 769 |
(d) The person has a written or unwritten agreement, | 774 |
arrangement, or understanding with another person who is directly | 775 |
or indirectly a beneficial owner, or whose affiliates or | 776 |
associates are direct or indirect beneficial owners, of the | 777 |
shares, if the agreement, arrangement, or understanding is for the | 778 |
purpose of the first person's or the other person's acquiring, | 779 |
holding, disposing of, voting, or directing the voting of the | 780 |
shares to or for the benefit of the first person. A bank, broker, | 781 |
nominee, trustee, or other person who acquires shares for the | 782 |
benefit of others in the ordinary course of business in good faith | 783 |
and not for the purpose of circumventing the provisions of this | 784 |
chapter shall, however, be deemed to be the beneficial owner only | 785 |
of shares in respect of which that person, without further | 786 |
instruction from others, holds voting power. | 787 |
(6) "Control," "controlled by," or "under common control | 790 |
with" refers to the possession, directly or indirectly, of the | 791 |
power to direct or cause the direction of the management and | 792 |
policies of a person, whether through the exercise of or the | 793 |
ability to exercise voting power, by contract, or otherwise, | 794 |
except that "control" of a corporation is not established for | 795 |
purposes of this division if a person, in good faith and not for | 796 |
the purpose of circumventing the provisions of this chapter, holds | 797 |
voting power as an agent, custodian, bank, broker, nominee, or | 798 |
trustee for one or more beneficial owners who do not individually | 799 |
or as a group have control of the corporation. | 800 |
(8) "Interested shareholder," with respect to an issuing | 805 |
public corporation, means a person other than the issuing public | 806 |
corporation, a subsidiary of that issuing public corporation, any | 807 |
employee stock ownership or benefit plan of the issuing public | 808 |
corporation or a subsidiary of that issuing public corporation, or | 809 |
any trustee or fiduciary with respect to any such plan acting in | 810 |
such capacity who ismeets either of the following criteria: | 811 |
(a) Is the beneficial owner of a sufficient number of shares | 812 |
of the issuing public corporation that, when added to all other | 813 |
shares of the issuing public corporation in respect of which that | 814 |
person may exercise or direct the exercise of voting power, would | 815 |
entitle that person, directly or indirectly, alone or with others, | 816 |
including affiliates and associates of that person, to exercise or | 817 |
direct the exercise of ten per cent of the voting power of the | 818 |
issuing public corporation in the election of directors after | 819 |
taking into account all of that person's beneficially owned shares | 820 |
that are not currently outstanding; | 821 |
(b) At any time within the three-year period immediately | 822 |
prior to the date on which it is sought to be determined whether | 823 |
the person is an interested shareholder, was the beneficial owner | 824 |
of a sufficient number of shares of the issuing public corporation | 825 |
that, when added to all other shares of the issuing public | 826 |
corporation in respect of which that person may have exercised or | 827 |
directed the exercise of voting power at the time it beneficially | 828 |
owned such shares, entitled that person, directly or indirectly, | 829 |
alone or with others, including affiliates and associates of that | 830 |
person, to exercise or direct the exercise of ten per cent of the | 831 |
voting power of the issuing public corporation in election of | 832 |
directors after taking into account all of the person's | 833 |
beneficially owned shares that were not, at the time it | 834 |
beneficially owned such shares, currently outstanding. | 835 |
(A) A Chapter 1704. transaction if on the interested | 849 |
shareholder's share acquisition date, the issuing public | 850 |
corporation, other than a bank as defined in section 1101.01 of | 851 |
the Revised Code, did not have a class of voting shares registered | 852 |
or traded on a national securities exchange or registered under | 853 |
section 12(g) of the Exchange Act or was not required to file | 854 |
periodic reports and information pursuant to section 15(d) of the | 855 |
Exchange Act. | 856 |
(B)(1) A Chapter 1704. transaction if the interested | 857 |
shareholder was an interested shareholder on the date immediately | 858 |
preceding the effective date of this section; except that this | 859 |
chapter shall apply, and the share acquisition date shall be the | 860 |
date, when the interested shareholder increases its beneficial | 861 |
ownership of voting power of the issuing public corporation to a | 862 |
proportion in excess of the proportion of voting power that the | 863 |
interested shareholder beneficially owned on the date immediately | 864 |
preceding the effective date of this section unless the interested | 865 |
shareholder's subsequent increase in beneficial ownership results | 866 |
from or is the consequence of any of the following circumstances: | 867 |
(2) If this chapter would have applied to the increase of | 881 |
beneficial ownership described in division (B)(1) of this section | 882 |
but for the application of an exception described in division | 883 |
(B)(1)(a), (b), (c), or (d) of this section, this chapter shall | 884 |
apply if the interested shareholder's subsequent increase in its | 885 |
proportion of beneficial ownership is not the result or a | 886 |
consequence of any of the circumstances described in division | 887 |
(B)(1)(a), (b), (c), or (d) of this section. | 888 |
(C) A Chapter 1704. transaction if the interested shareholder | 889 |
was an interested shareholder on the date immediately preceding | 890 |
the effective date of this section and inadvertently increases its | 891 |
beneficial ownership of voting power of the issuing public | 892 |
corporation to a proportion in excess of the proportion of voting | 893 |
power that the interested shareholder beneficially owned on the | 894 |
date immediately preceding the effective date of this section, | 895 |
provided that, as soon as practicable, the interested shareholder | 896 |
divests itself of beneficial ownership of a sufficient number of | 897 |
voting shares of the issuing public corporation that the | 898 |
interested shareholder is no longer the beneficial owner of a | 899 |
proportion of voting power in excess of the proportion of voting | 900 |
power that the interested shareholder beneficially owned on the | 901 |
date immediately preceding the effective date of this section. | 902 |
(D)(1) A Chapter 1704. transaction if a person becomes an | 903 |
interested shareholder through an acquisition of voting shares | 904 |
that resulted from or was the consequence of any of the | 905 |
circumstances described in division (B)(1)(a), (b), (c), or (d) of | 906 |
this section, except that this chapter shall apply, and the share | 907 |
acquisition date shall be the date, when the interested | 908 |
shareholder increases its beneficial ownership of voting power of | 909 |
the issuing public corporation to a proportion in excess of the | 910 |
proportion of voting power that the interested shareholder | 911 |
beneficially owned on the date on which it became an interested | 912 |
shareholder unless the interested shareholder's subsequent | 913 |
increase in beneficial ownership results from or is a consequence | 914 |
of any of the circumstances described in division (B)(1)(a), (b), | 915 |
(c), or (d) of this section. | 916 |
(2) If this chapter would have applied to the acquisition of | 917 |
voting shares described in division (D)(1) of this section but for | 918 |
the application of an exception described in division (B)(1)(a), | 919 |
(b), (c), or (d) of this section, this chapter shall apply if the | 920 |
interested shareholder's subsequent increase in its proportion of | 921 |
beneficial ownership is not the result or a consequence of any of | 922 |
the circumstances described in division (B)(1)(a), (b), (c), or | 923 |
(d) of this section. | 924 |
(F)(1) Subject to division (F)(2) of this section, a Chapter | 931 |
1704. transaction if the original articles of the issuing public | 932 |
corporation state, or if the articles of the issuing public | 933 |
corporation have been amended in compliance with the provisions of | 934 |
section 1701.70, 1701.71, or 1701.72 of the Revised Code to state, | 935 |
by specific reference to this chapter, that this chapter does not | 936 |
apply to the corporation and if any of the following applies: | 937 |
(c) The statement was contained in an amendment to the | 944 |
articles and the amendment was approved, upon the recommendation | 945 |
by the affirmative vote of a majority of the authorized number of | 946 |
directors of the corporation in favor of such amendment, by the | 947 |
holders of two-thirds of all outstanding shares of the corporation | 948 |
entitled to vote in the election of directors and by the holders | 949 |
of two-thirds of all outstanding disinterested shares of the | 950 |
acquiring public corporation entitled to vote in the election of | 951 |
directors. | 952 |
(2) If, however, a Chapter 1704. transaction would have been | 953 |
prohibited but for the adoption of an amendment to the articles in | 954 |
compliance with division (F)(1)(b) or (c) of this section, the | 955 |
issuing public corporation shall not engage in a Chapter 1704. | 956 |
transaction for twelve months following the adoption of the | 957 |
amendment; in addition, if this chapter would have applied to a | 958 |
person who became an interested shareholder prior to the adoption | 959 |
of such an amendment, this chapter shall continue to apply to a | 960 |
Chapter 1704. transaction between the issuing public corporation | 961 |
and the interested shareholder as if the amendment had not been | 962 |
adopted. | 963 |
(H) A Chapter 1704. transaction that involves any acquisition | 969 |
of securities of an issuing public corporation pursuant to an | 970 |
employee stock option plan, an employee stock purchase plan, an | 971 |
employee stock bonus plan, an employee stock ownership plan, or | 972 |
any similar plan designed to benefit one or more employees | 973 |
established by the issuing public corporation, provided the | 974 |
acquisition of the securities and the establishment of, any | 975 |
amendment to, and the administration of the plan are in good faith | 976 |
and not for the purpose of circumventing the provisions of this | 977 |
chapter. | 978 |
(I) A Chapter 1704. transaction that involves compensation | 979 |
directly or indirectly received by a director, officer, employee, | 980 |
agent, or independent contractor of an issuing public corporation | 981 |
in return for services rendered or to be rendered to the issuing | 982 |
public corporation, provided the payment of the compensation and | 983 |
the services rendered, or to be rendered, are in good faith and | 984 |
not for the purpose of circumventing the provisions of this | 985 |
chapter. | 986 |
(J) A Chapter 1704. transaction that involves any loan of | 987 |
money or property of an issuing public corporation to a director, | 988 |
officer, employee, agent, or independent contractor of the issuing | 989 |
public corporation, provided the loan is designed to encourage the | 990 |
rendering of needed, valuable, and efficient services to the | 991 |
issuing public corporation and provided the loan is made and the | 992 |
services are rendered, or are to be rendered, in good faith and | 993 |
not for the purpose of circumventing the provisions of this | 994 |
chapter. | 995 |
(K) A Chapter 1704. transaction in which an issuing public | 996 |
corporation makes a loan of money or other property to, guarantees | 997 |
any loan of money or other property to, or guarantees any | 998 |
obligation of, an employee stock ownership plan, as defined in | 999 |
Section 4975(e)(7) of the "Internal Revenue Code of 1986," 68A | 1000 |
Stat. 3, 26 U.S.C.A. 1, as amended, of the issuing public | 1001 |
corporation. | 1002 |