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As Reported by House Civil and Commercial Law Committee
123rd General Assembly
Regular Session
1999-2000 | Am. H. B. No. 78 |
REPRESENTATIVES WOMER
BENJAMIN-CALLENDER-MOTTLEY-FORD-BUCHY-
WILLAMOWSKI-SALERNO
A BILL
To amend sections 1151.38, 1151.61, 1701.04, 1701.06, 1701.09,
1701.11, 1701.13, 1701.15, 1701.18, 1701.24, 1701.33, 1701.45,
1701.59, 1701.63, 1701.70, 1701.71, and 1701.95,
to enact
new section 1701.10, and to repeal section 1701.10 of the
Revised Code to modify the General Corporation Law, including
modifications to alter the requirements for the
formation of a
corporation, including the contents of the articles of
incorporation, the terms of and subscription for shares, and
the adoption of corporate regulations; to limit the
liability of
directors for improper dividends, distributions, purchases, and
redemptions of shares; to limit the
indemnification of
directors; to specify limits on pre-emptive rights of
shareholders; to specify the rights of fractional shareholders;
to specify the liability of shareholders to the corporation and
its creditors; to specify the determination
of the date for
measuring the effect of a dividend or distribution on a
corporation; to specify a record date for determining the
eligibility of shareholders for a dividend or
distribution; to
permit a reduction in the size of executive and other committees
of directors; to specify the authority of incorporators,
initial directors, and subsequent directors
of a corporation to
amend the articles of incorporation; and to make nonsubstantive technical
modifications to the law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1151.38, 1151.61, 1701.04, 1701.06,
1701.09, 1701.11, 1701.13, 1701.15, 1701.18, 1701.24, 1701.33,
1701.45, 1701.59, 1701.63, 1701.70, 1701.71, and 1701.95 be
amended and new section 1701.10 of the Revised Code be enacted
to read as follows:
Sec. 1151.38. In AS USED IN this section, "federal
association" means
a federal savings and loan association, and "state association"
means a building STATE SAVINGS and loan association.
Any federal association having its home office in this
state may convert or reorganize into a state association under
this section and section 1151.39 of the Revised Code, by
proceeding as follows:
(A) The board of directors of the federal association, at
any regular or special meeting called for that purpose, shall
adopt a plan to convert or reorganize into a state association.
(B) Such THE plan and any amendments or additions
thereto TO THE PLAN
shall be considered, and a vote shall be taken on the question of
its adoption, at an annual meeting of the members of the federal
association, or at any special meeting of the members of the
federal association called to consider such THE action. If the
bylaws of the federal association do not require written notice
of such THE annual or special meeting, written notice of the
time,
place, and purpose of such meeting shall be mailed by the federal
association, postage prepaid, at least ten days prior to the date
on which such meeting convenes, to each member of record of the
federal association, but such THE mailing shall not be a
condition
precedent to, nor shall any defect in such THE mailing affect
the
validity of, any such THE meeting. The adoption of such
THE plan
shall require the vote of fifty-one per cent or more of the votes cast
by the members present in person or by proxy at such meeting.
(C) Two copies of the minutes of such meeting, together
with a statement showing the giving of such THE WRITTEN notice,
and two copies of the minutes of the meeting of the members of the board
of the federal association, all verified by an affidavit of the
secretary or other proper custodian of the records of the federal
association, shall be filed both in the office of the
superintendent of building and loan associations FINANCIAL
INSTITUTIONS and with the
federal home loan bank board. Such verified copies, when filed,
shall be presumptive evidence of the holding and action of such
meeting.
(D) A majority of the members of the board of the federal
association, which majority shall consist of not less than three
directors, a majority of whom are citizens of the United States,
shall subscribe to, acknowledge, and file articles of
incorporation in the office of the secretary of state. Two
copies of the articles shall be filed with the federal home loan
bank board. The articles shall set forth ALL OF THE FOLLOWING:
(1) All statements required by paragraphs DIVISIONS
(A)(1), (2), AND (3), and (4) of division (A) of
section 1701.04 of the Revised Code
and any desired provision authorized by paragraphs (1) DIVISIONS
(B)(3), (2) (4), and (3) of division (B)
(5) of such THAT section;
(2) A statement showing that the state association is
incorporated by conversion or reorganization from the federal
association;
(3) A statement showing the assumption by the state
association of all shares, accounts, and liabilities of the
federal association as of the date on which the conversion or
reorganization is to be completed, and the manner in which each
class of such shares, accounts, and liabilities will be
discharged or adjusted by the state association.
Upon receipt of the articles, the secretary of state shall
forthwith transmit to the superintendent a copy of such THE
articles. If it appears that the state association, if formed, will be
entitled to commence the business for which it is organized, the
superintendent shall so certify to the secretary of state, who
shall thereupon record such THE articles UPON THAT
CERTIFICATE.
(E) On the day and hour of such recording, the federal
association shall be deemed converted or reorganized into the
state association, and thereupon UPON THAT CONVERSION OR
REORGANIZATION, BOTH OF THE FOLLOWING APPLY:
(1) All the federal association's property and assets, and
every right, privilege, and interest then existing, belonging or
pertaining to it or which would inure to it, shall immediately,
without any conveyance or transfer and without any further act, SHALL
be vested in and become the property of the successor state
association, which shall hold and enjoy them in its own right, to
the same extent as they were held and enjoyed by the federal
association. All liens upon the property and assets of such THE
federal association existing at the time of conversion shall be
preserved unimpaired and limited in lien to the property or
assets then affected thereby BY LIENS. This section does not
deprive any
person, firm, or corporation of any substantive right existing at
the time of such conversion against such THE federal
association, nor
of the right to enforce any such right OF THAT NATURE by proceedings
against the
property and assets transferred by operation of this division, in
the event and to the extent that such THE substantive right is
not satisfied or adjusted by the successor state association in
accordance with its articles.
(2) The state association shall commence business and
shall be subject to the laws of this state relating to domestic
building SAVINGS and loan associations.
Any action or proceeding pending by or against such THE federal
association at the time of such THE conversion or reorganization
may
be prosecuted to judgment, with right of appeal, as in other
cases, as if such THE conversion or reorganization had not taken
place, or the successor state association may be substituted for
such THE federal association.
A copy of the articles recorded in the office of the
secretary of state, certified by the secretary of state under the
seal of his THE SECRETARY OF STATE'S office and showing the day
and hour of recording,
shall be recorded in the office of the county recorder of the
county in which the federal association had its principal office
or place of business at the time of its conversion or
reorganization, and in each county in the state in which such
THE federal association owned real estate at the time of its
conversion or reorganization, for which recording the recorder
shall charge the same fees as for the recording of deeds. Two
copies of the articles, as so recorded and certified, and showing
the date and hour of such THE recording, shall be filed with the
federal home loan bank board.
Sec. 1151.61. A building SAVINGS and loan association may be
reorganized, with the written consent of the DEPUTY superintendent of
building SAVINGS and loan associations, in the following manner:
(A) The board of directors may adopt a plan of
reorganization, which may include any change in the articles of
incorporation, including changes of issued or unissued shares,
which could be effected by amendment to the articles, except as
otherwise provided in this section; the increase or reduction of
the authorized capital stock, the stock credits, and the fully
paid and issued capital stock; the determination or
redetermination of the fair value to the association of its
assets, tangible or intangible ASSETS; the allotment of a part
of the
amount so determined or redetermined to stock credits and to
fully paid and issued capital stock, and a part to the reserve
fund; the retention as reserve and undivided profits of any of
the existing reserve and undivided profits; the manner, terms, and
basis of converting or exchanging shares; and such ANY other
details
as THAT the board considers necessary or desirable. The board
shall
not adopt, and the superintendent shall not approve, any plan
which THAT, by amendment to the articles or otherwise, changes
the
purpose of the association from that of a building SAVINGS and
loan
association within the meaning of section 1151.01 of the Revised
Code.
(B) A special meeting of the stockholders shall be called,
of which notice shall be given to each stockholder at his THE
STOCKHOLDER'S last
known post-office address as it appears on the records of the
association, whether or not he THE STOCKHOLDER is entitled to
vote. At such
meeting, the plan of reorganization, including any amendments of
or additions to the plan proposed at such THE meeting, shall be
considered, and a vote shall be taken on the question of its
adoption. The adoption of such THE plan requires the vote, in
person or by proxy, of the holders of fifty-one per cent of the stock.
If the plan so provides, the board may, within forty-five days
after the day on which such THE vote is taken, MAY
rescind the action of
the shareholders if in its judgment the consummation of the plan
will be against the best interests of the association because of
the number of dissenting shareholders or the amount of stock
owned by them.
(C) All shareholders dissenting from such plan are
entitled to relief in the manner and under the conditions
provided in section 1701.85 of the Revised Code, except that when
the plan includes only a reduction in the authorized capital
stock, in the stock credits, and in the fully paid and issued
capital stock, the filing of his THE DISSENTING SHAREHOLDER'S
demand for payment of the fair
cash value of his THE DISSENTING SHAREHOLDER'S stock credits
shall constitute an application
for withdrawal or repurchase, and the fair cash value of his THE
DISSENTING SHAREHOLDER'S
stock credits as finally determined in accordance with such THAT
section shall be payable only at such THE times as
THAT are permitted
under his THE DISSENTING SHAREHOLDER'S right of withdrawal or
repurchase at the time such an
application is filed.
(D) The plan shall become effective when it has been
adopted by the shareholders and approved in writing by the
superintendent, and the president or a vice-president, and the
secretary or an assistant secretary, of the association have
signed and filed in the office of the secretary of state a
certificate of reorganization, with the consent of the
superintendent indorsed thereon ENDORSED ON THE CERTIFICATE,
containing a copy of the plan of
reorganization, and also containing the following items, unless
the item in question is included in such THE plan:
(1) All statements required by paragraphs DIVISIONS
(A)(1), (2), and (4) of division (A) (3) of section
1701.04 of the Revised Code to be
included in the original articles of incorporation, and any
provisions authorized by paragraphs (1) DIVISIONS
(B)(3), (2) (4), and (3) of division
(B) (5) of such THAT section which are to remain in
effect or to be
included as part of the plan;
(2) A statement of the amount of fully paid and issued
capital stock, the amount of stock credits, and the amount of
authorized capital stock, both before and after such THE
reorganization.
(E) Any such AN association whose plan of reorganization is
disapproved by the superintendent may, within thirty days after
such THE disapproval and by leave of court first obtained,
MAY file,
in
the court of common pleas of Franklin county or of the county in
which the association has its principal place of business, an
action against the superintendent, alleging the facts upon which
it relies for a reversal of his THE SUPERINTENDENT'S action and
praying for such a
reversal. The action of the superintendent shall not be reversed
unless the court finds that he THE SUPERINTENDENT exceeded
his THE SUPERINTENDENT'S power or abused his THE
SUPERINTENDENT'S
discretion in disapproving such THE plan.
No order of court shall restrain the superintendent from
making an examination of such THE association and its affairs at
any time under sections 1155.09 and 1155.10 of the Revised Code.
Sec. 1701.04. (A) Any person, singly or jointly with
others, and without regard to residence, domicile, or state of
incorporation, may form a corporation by signing and filing with
the secretary of state articles of incorporation which shall set
forth ALL OF THE FOLLOWING:
(1) The name of the corporation, which shall be in
compliance with the provisions of division (A) of section 1701.05
of the Revised Code;
(2) The place in this state where the principal office of
the corporation is to be located;
(3) The purpose or purposes for which the corporation is
formed, which may consist of a statement that the purpose, either
alone or with other specified purposes, is to engage in any
lawful act or activity for which corporations may be formed under
this chapter. By such statement, all lawful acts and activities
of the corporation conforming to the conditions and limitations,
if any, specified in the articles are within the purposes of the
corporation.
(4) The authorized number and the par value per share of
shares with par value, and the authorized number of shares
without par value, except that the articles of a banking, safe
deposit, trust, or insurance corporation shall not authorize
shares without par value; the express terms, if any, of the
shares; and, if the shares are classified, the designation of
each class, the authorized number and par value per share, if
any, of the shares of each class, and the express terms of the
shares of each class;
(5)(4) If the corporation is to have an initial stated
capital, the amount of that stated capital.
(B) The articles also may set forth ANY OF THE FOLLOWING:
(1) THE NAMES OF THE INDIVIDUALS WHO ARE TO SERVE AS INITIAL
DIRECTORS;
(2) THE PURPOSE OR PURPOSES FOR WHICH THE CORPORATION
IS FORMED, BUT IN THE ABSENCE OF A STATEMENT OF THE PURPOSE OR PURPOSES OR
EXCEPT AS
EXPRESSLY SET FORTH IN SUCH STATEMENT, THE PURPOSE FOR WHICH ANY
CORPORATION IS FORMED IS TO ENGAGE IN ANY LAWFUL ACT OR ACTIVITY
FOR WHICH A CORPORATION MAY BE FORMED UNDER THIS CHAPTER, AND
ALL LAWFUL ACTS AND ACTIVITIES OF THE CORPORATION ARE WITHIN THE
PURPOSES OF THE CORPORATION;
(3) Any lawful provision for the purpose of defining,
limiting, or regulating the exercise of the authority of the
corporation, the incorporators, the directors, the officers, the
shareholders, or the holders of any class of shares;
(2)(4) Any provision that may be set forth in the
regulations;
(3)(5) A provision specifying the period of existence of the
corporation if it is to be otherwise than perpetual;
(4)(6) Subject to division (C) of this section, any
additional provision permitted by this chapter.
(C) Original articles of a corporation may not set forth
any provision that eliminates the rights of shareholders under
this chapter to cumulate the voting power that they possess in
the election of directors.
(D) A written appointment of a statutory agent for the
purposes set forth in section 1701.07 of the Revised Code shall
be filed with the articles, unless the corporation belongs to one
of the classes mentioned in division (O) of that section.
(E) The legal existence of the corporation shall begin
upon the filing of the articles, and, unless the articles
otherwise provide, its period of existence shall be perpetual.
Sec. 1701.06. (A) The express terms of shares may include
statements specifying ANY OF THE FOLLOWING:
(1) Dividend or distribution rights, which may be:
cumulative or noncumulative; at a specified rate, amount, or
proportion; with or without further participation rights; and in
preference to, junior to, or on a parity in whole or in part with
dividend or distribution rights of shares of any other class;
(2) Liquidation rights, preferences, and price;
(3) Redemption rights and price;
(4) Sinking fund retirements REQUIREMENTS, which may require
the
corporation to provide a sinking fund out of earnings or
otherwise for the purchase or redemption of such THE shares or
for
dividends or distributions on them;
(5) Voting rights, which may be full, limited, or denied,
except as otherwise required by law;
(6) Pre-emptive rights, or the denial or limitation of
them;
(7) Conversion rights;
(8) Restrictions on the issuance of shares;
(9) Rights of alteration of express terms;
(10) The division of any class of shares into series;
(11) The designation and authorized number of shares of
each series;
(12) The right of the directors, subject to such ANY
limitations as THAT may be stated, to adopt amendments to the
articles
in respect of any unissued or treasury shares of any class and
thereby to fix or change: the division of such shares into
series and the designation and authorized number of shares of
each series; the dividend or distribution rate; the dates of
payment of dividends or distributions and the dates from which
they are cumulative; liquidation price; redemption rights and
price; sinking fund requirements; conversion rights; and
restrictions on the issuance of shares of any class or series
DETERMINING, IN WHOLE OR IN PART, THE EXPRESS TERMS,
WITHIN THE LIMITS SET FORTH IN THIS CHAPTER, OF ANY CLASS OF
SHARES BEFORE THE ISSUANCE OF ANY SHARES OF THAT CLASS, OR OF
ONE OR MORE SERIES WITHIN A CLASS BEFORE THE ISSUANCE OF ANY
SHARES OF THAT SERIES;
(13) Any other relative, participating, optional, or other
special rights and privileges of, and qualifications or
restrictions on, the rights of holders of shares of any class or
series.
(B) The express terms of shares of different series of any
particular class shall be identical, except that there may be
variations in respect of: the dividend or distribution rate; the
dates of payment of dividends or distributions and the dates from
which they are cumulative; redemption rights and price;
liquidation price; sinking fund requirements; conversion rights;
and restrictions on the issuance of shares of the same series or
of any other class or series EACH SERIES OF A CLASS SHALL BE GIVEN A
DISTINGUISHING
DESIGNATION. ALL SHARES OF A SERIES SHALL HAVE EXPRESS TERMS
IDENTICAL WITH THOSE OF OTHER SHARES OF THE SAME SERIES. ANY OF
THE EXPRESS TERMS OF ANY CLASS OR SERIES OF SHARES MAY BE MADE
DEPENDENT UPON FACTS ASCERTAINABLE OUTSIDE THE ARTICLES OR ANY
AMENDMENT TO THOSE ARTICLES, PROVIDED THAT THE MANNER IN WHICH
THE FACTS OPERATE UPON THE EXPRESS TERMS IS SET FORTH IN THE
ARTICLES OR ANY AMENDMENT TO THOSE ARTICLES.
Sec. 1701.09. (A) After the articles have been filed, the
incorporators or a majority of them shall MAY receive
subscriptions for shares at such time and place as THAT they
may determine.
(B) Unless the articles fix the consideration for which subscriptions are to
be received, ALL OF THE FOLLOWING APPLY:
(1) If subscriptions are to be received for shares without par value, the
incorporators shall fix the consideration for which they will receive
subscriptions for such shares.
(2) If subscriptions are to be received for shares with par value, the
consideration for the shares shall be the par value or such THE
greater
consideration as THAT the incorporators fix.
(3) If any subscriptions are to be payable otherwise than in money, the
incorporators may determine the fair value to the corporation of the
consideration for such THE shares.
(C) No subscriptions for shares shall be received by the incorporators IF
THE ARTICLES NAME THE INITIAL DIRECTORS OR after THE MEETING OF THE
SHAREHOLDERS OR INCORPORATORS AT WHICH the INITIAL election of
directors OCCURS.
(D) The failure of incorporators of a corporation formed or attempted to be
formed under the laws of this state then in effect to file in the office of
the secretary of state a certificate of subscripion SUBSCRIPTION
required by such THOSE laws to
be filed does not make the existence of said THE corporation or
any of its acts subject to question.
Sec. 1701.10. (A) AFTER INCORPORATION, ALL OF THE FOLLOWING
APPLY:
(1) IF THE INITIAL DIRECTORS ARE NAMED IN THE ARTICLES,
THE INITIAL DIRECTORS SHALL HOLD AN ORGANIZATIONAL MEETING, AT
THE CALL OF A MAJORITY OF THE DIRECTORS, TO COMPLETE THE
ORGANIZATION OF THE CORPORATION BY RECEIVING SUBSCRIPTIONS,
APPOINTING OFFICERS, ADOPTING REGULATIONS, AND CARRYING ON ANY
OTHER BUSINESS BROUGHT BEFORE THE MEETING.
(2) IF THE INITIAL DIRECTORS ARE NOT NAMED IN THE ARTICLES,
THE INCORPORATOR OR INCORPORATORS EITHER SHALL RECEIVE
SUBSCRIPTIONS AS PROVIDED IN DIVISION
(A) OF SECTION 1701.09 OF THE REVISED
CODE OR SHALL HOLD AN ORGANIZATIONAL
MEETING AT THE CALL OF A MAJORITY OF THE INCORPORATORS TO ELECT
DIRECTORS WHO SHALL COMPLETE THE ORGANIZATION OF THE CORPORATION
AS PROVIDED IN DIVISION (A)(1)
OF THIS SECTION. IF SUBSCRIPTIONS FOR SHARES ARE RECEIVED BY
THE INCORPORATORS, THE INCORPORATORS, OR A MAJORITY OF THEM,
SHALL GIVE NOT LESS THAN SEVEN DAYS' WRITTEN NOTICE TO THE
SHAREHOLDERS, UNLESS WRITTEN NOTICE IS WAIVED BY THE
SHAREHOLDERS, TO MEET AT A SPECIFIED TIME AND PLACE FOR THE
PURPOSES OF ADOPTING REGULATIONS, ELECTING DIRECTORS, AND
TRANSACTING ANY OTHER BUSINESS. THE SHAREHOLDERS SHALL MEET FOR
THOSE PURPOSES AT THE TIME AND PLACE SPECIFIED.
(3) NOTWITHSTANDING DIVISIONS (A)(1) AND (2) OF THIS SECTION,
IF REGULATIONS HAVE NOT BEEN ADOPTED WITHIN NINETY DAYS AFTER
THE FORMATION OF THE CORPORATION, REGULATIONS MAY BE ADOPTED
ONLY BY THE SHAREHOLDERS IN EITHER OF THE FOLLOWING WAYS:
(a) AT A MEETING OF SHAREHOLDERS
CALLED FOR THAT PURPOSE BY THE DIRECTORS OR, IF NO DIRECTORS
HAVE BEEN NAMED IN THE ARTICLES OR ELECTED, AT A MEETING OF
SHAREHOLDERS CALLED FOR THAT PURPOSE BY AT LEAST A MAJORITY OF
THE INCORPORATORS. THE DIRECTORS OR INCORPORATORS SHALL GIVE
NOT LESS THAN SEVEN DAYS' WRITTEN NOTICE TO THE SHAREHOLDERS,
UNLESS WRITTEN NOTICE IS WAIVED BY THE SHAREHOLDERS, TO MEET AT
A SPECIFIED TIME AND PLACE FOR THE PURPOSES OF ADOPTING
REGULATIONS AND TRANSACTING ANY OTHER BUSINESS;
(b) WITHOUT A MEETING, BY THE
WRITTEN CONSENT OF THE HOLDERS OF SHARES ENTITLING THEM TO
EXERCISE TWO-THIRDS OF THE VOTING POWER ON THE PROPOSAL.
(4) IN NO EVENT MAY THE DIRECTORS TAKE ANY ACTION TO
ADOPT OR AMEND REGULATIONS AFTER THE SHAREHOLDERS HAVE ADOPTED
REGULATIONS.
(B) ACTION REQUIRED OR
PERMITTED BY THIS CHAPTER TO BE TAKEN BY THE INCORPORATORS AT AN
ORGANIZATIONAL MEETING MAY BE TAKEN WITHOUT A MEETING IF THE
ACTION TAKEN IS EVIDENCED BY ONE OR MORE WRITTEN CONSENTS
DESCRIBING THE ACTION TAKEN AND SIGNED BY EACH
INCORPORATOR.
(C) AN ORGANIZATIONAL
MEETING MAY BE HELD IN OR OUT OF THIS STATE.
Sec. 1701.11. (A)(1) Regulations for the government of a
corporation, the conduct of its affairs, and the management of
its property, consistent with law and the articles, may be
adopted by IN ANY OF THE FOLLOWING WAYS:
(a) WITHIN NINETY DAYS AFTER THE CORPORATION IS FORMED, BY THE
DIRECTORS IN ACCORDANCE WITH SECTION 1701.10 of the Revised Code;
(b) BY the shareholders at a meeting held for that purpose,
by the affirmative vote of the holders of shares entitling them
to exercise a majority of the voting power of the corporation on
the proposal, or may be adopted without;
(c) WITHOUT a meeting, by the written
consent of the holders of shares entitling them to exercise two-thirds of the
voting power OF THE CORPORATION on the proposal; and the.
(2) THE regulations may be amended, or new regulations may be
adopted, in like manner and by like vote or consent, or, if
EITHER OF THE FOLLOWING WAYS:
(a) BY THE SHAREHOLDERS AT A
MEETING HELD FOR THAT PURPOSE, BY THE AFFIRMATIVE VOTE OF THE
HOLDERS OF SHARES ENTITLING THEM TO EXERCISE A MAJORITY OF THE
VOTING POWER OF THE CORPORATION ON THE PROPOSAL;
(b) WITHOUT A MEETING, BY THE
WRITTEN CONSENT OF THE HOLDERS OF SHARES ENTITLING THEM TO
EXERCISE TWO-THIRDS OF THE VOTING POWER OF THE CORPORATION ON THE
PROPOSAL.
(3) IF the articles or
the regulations THAT HAVE BEEN ADOPTED so provide or permit,
REGULATIONS MAY BE ADOPTED OR AMENDED OR NEW REGULATIONS MAY BE ADOPTED
by the affirmative vote or written consent of the holders of shares entitling
them to exercise a greater or lesser proportion but not less than a majority
of the voting power OF THE CORPORATION.
(B) Without limiting the generality of the authority
described in division (A) of this section, the regulations may
include provisions with respect to ALL OF THE FOLLOWING:
(1) The time and place for holding, the manner of and
authority for calling, giving notice of, and conducting, and the
requirements of a quorum for, meetings of shareholders;
(2) The taking of a record of shareholders or the
temporary closing of books against transfers of shares;
(3) The number, classification, manner of fixing or
changing the number, qualifications, term of office, and
compensation or manner of fixing compensation, of directors;
(4) The time and place for holding, the manner of and
authority for calling, giving notice of, and conducting, and the
requirements of a quorum for, meetings of the directors;
(5) The appointment of an executive and other committees
of the directors, and their authority;
(6) The titles, qualifications, duties, term of office,
compensation or manner of fixing compensation, and the removal,
of officers;
(7) The terms on which new certificates for shares may be
issued in the place of lost, stolen, or destroyed certificates;
(8) The manner in which and conditions upon which a
certificated security, and the conditions upon which an
uncertificated security, and the shares represented by a
certificated or uncertificated security, may be transferred,
restrictions on the right to transfer the shares, and
reservations of liens on the shares.;
(9)(a) Restrictions on the transfer and the right to
transfer shares of either of the following:
(i) An issuing public corporation to any person in a
control share acquisition;
(ii) A corporation with fifty or more shareholders to any
person in an acquisition that would be a control share
acquisition if the corporation were an issuing public
corporation.
(b) The restrictions on the transfer and the right to
transfer shares described in division (B)(9)(a)(i) and (ii) of
this section may include requirements and procedures for consent
to such an acquisition OF THE SHARES by directors based on a
determination by
the directors of the best interests of the corporation and its
shareholders, consent to such an acquisition OF THE SHARES by
shareholders, and
reasonable sanctions for a violation of such THOSE requirements,
including the right of the corporation to refuse to transfer, to
redeem, or to deny voting or other shareholder rights appurtenant
to shares acquired in such an acquisition OF THE SHARES.
(10) Defining, limiting, or regulating the exercise of the
authority of the corporation, the directors, the officers, or all
the shareholders.
(C) The shareholders of a corporation may adopt and may
authorize the directors to adopt, either before or during an
emergency, as that term is defined in division (U) of section
1701.01 of the Revised Code, emergency regulations which THAT
shall be
operative only during an emergency. The emergency regulations
may include such ANY provisions as THAT are
authorized to be included in
regulations by divisions (A) and (B) of this section. In
addition, unless expressly prohibited by the articles or the
regulations, the emergency regulations may make any provision,
notwithstanding any different provisions in sections 1701.01 to
1701.98 of the Revised Code THIS CHAPTER and notwithstanding any
different
provisions in the articles or the regulations that are not
expressly stated to be operative during an emergency, that may be
practical or necessary with respect to the following:
(1) The time and place for holding, the manner of and
authority for calling, giving notice of, and conducting, and the
requirements of a quorum for, meetings of the directors;
(2) The creation and appointment of an executive and other
committees of the directors and the delegation of authority to
the committees by the board;
(3) The creation, existence, and filling of vacancies,
including temporary vacancies, in the office of director;
(4) The selection, by appointment, election, or otherwise,
of officers and other persons to serve as directors for a meeting
of the board in the absence from the meeting of one or more of
the directors;
(5) The creation, existence, and filling of vacancies,
including temporary vacancies, in any office;
(6) The order of rank and the succession to the duties and
authority of officers.
(D) If the regulations are amended or new regulations are
adopted, without a meeting of the shareholders, the secretary of
the corporation shall mail a copy of the amendment or the new
regulations to each shareholder who would have been entitled to
vote on the adoption of the amendment or the new regulations and
did not participate in the adoption of the amendment or the new
regulations.
(E) No person dealing with the corporation shall be
charged with constructive notice of the regulations.
(F) Unless expressly prohibited by the articles or the
regulations or unless otherwise provided by the emergency
regulations, the following special rules shall be applicable
during an emergency notwithstanding any different provision
elsewhere in sections 1701.01 to 1701.98 of the Revised Code THIS
CHAPTER:
(1) Meetings of the directors may be called by any officer
or director.
(2) Notice of the time and place of each meeting of the
directors shall be given to such of the directors as it may be
feasible to reach at the time and by such THE means of
communication,
written or oral, personal or mass, as may be practicable at the
time.
(3) The director or directors present at any meeting of
the directors that has been duly called and notice of which has
been duly given shall constitute a quorum for the meeting, and,
in the absence of one or more of the directors, the director or
directors present may appoint one or more of the officers of the
corporation directors for the meeting.
(4) If none of the directors attends a meeting of the
directors that has been duly called and notice of which has been
duly given, the officers of the corporation who are present, not
exceeding three, in order of rank, shall be directors for the
meeting, shall constitute a quorum for the meeting, and may
appoint one or more of the other officers of the corporation
directors for the meeting.
(5) If the chief executive officer dies, is missing, or
for any other reason is temporarily or permanently incapable of
discharging the duties of his THE office, the next ranking
officer
who is available shall assume the duties and authority of the
office of the deceased, missing, or incapacitated chief executive
officer until such time as the directors shall otherwise order.
(6) The offices of secretary and treasurer shall be deemed
to be of equal rank, and, within the same office and as between
the offices of secretary and treasurer, rank shall be determined
by priority in time of the first election to the office or, if
two or more persons shall have been first elected to the office
at the same time, by seniority in age.
Sec. 1701.13. (A) A corporation may sue and be sued.
(B) A corporation may adopt and alter a corporate seal and
use the same or a facsimile of the corporate seal, but
failure to affix the corporate seal shall not affect the validity
of any instrument.
(C) At the request or direction of the United States
government or any agency of the United States government, a
corporation may transact any lawful business in aid of national
defense or in the prosecution of any war in which the nation is
engaged.
(D) Unless otherwise provided in the articles, a
corporation may take property of any description, or any interest
in property, by gift, devise, or bequest, and may make donations
for the public welfare or for charitable, scientific, or
educational purposes.
(E)(1) A corporation may indemnify or agree to indemnify
any person who was or is a party, or is threatened to be made a
party, to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or
investigative, other than an action by or in the right of the
corporation, by reason of the fact that he THE PERSON is or was
a director,
officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee,
officer, employee, member, manager, or agent of another corporation, domestic
or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture,
trust, or other enterprise, against expenses, including
attorney's fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him THE PERSON in connection
with such
action, suit, or proceeding, if he THE PERSON acted in good
faith and in a
manner he THE PERSON reasonably believed to be in or not opposed
to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, if he THE PERSON had no reasonable cause
to believe his THE PERSON'S
conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good
faith and in a manner he THE PERSON reasonably believed to be in
or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, he THE PERSON had
reasonable
cause to believe that his THE PERSON'S conduct was unlawful.
(2) A corporation may indemnify or agree to indemnify any
person who was or is a party, or is threatened to be made a party,
to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor,
by reason of the fact that he THE PERSON is or was a director,
officer,
employee, or agent of the corporation, or is or was serving at
the request of the corporation as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign,
nonprofit or for profit, a limited liability company, or a partnership, joint
venture, trust, or
other enterprise, against expenses, including attorney's fees,
actually and reasonably incurred by him THE PERSON in connection
with the
defense or settlement of such action or suit, if he THE PERSON
acted in good
faith and in a manner he THE PERSON reasonably believed to be in
or not
opposed to the best interests of the corporation. HOWEVER,
except that no indemnification shall be made in respect of any
EITHER of the following
UNLESS, AND ONLY TO THE EXTENT THAT, THE COURT OF COMMON
PLEAS OR THE COURT IN WHICH THE ACTION OR SUIT WAS BROUGHT
DETERMINES, UPON APPLICATION, THAT, DESPITE THE ADJUDICATION OF
LIABILITY, BUT IN VIEW OF ALL THE CIRCUMSTANCES OF THE CASE, THE
PERSON IS FAIRLY AND REASONABLY ENTITLED TO INDEMNITY FOR THE
EXPENSES THAT THE COURT OF COMMON PLEAS OR OTHER COURT
DETERMINES TO BE PROPER:
(a) Any claim, issue, or matter as to which such THE person is
adjudged to be liable IN DAMAGES for negligence or misconduct in the
performance of his THE PERSON'S duty to the corporation
unless, and only to
the extent that, the court of common pleas or the court in which
such action or suit was brought determines, upon application, that,
despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court of common
pleas or such other court shall deem proper;
(b) Any action or suit in which the only liability
asserted against a director is pursuant to ADJUDGED TO BE LIABLE
IN DAMAGES UNDER DIVISION (D) OF section 1701.95
1701.59 of the Revised Code.
(3) To the extent that a director, trustee, officer,
employee, member, manager, or agent has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in
division (E)(1) or (2) of this section, or in defense of any
claim, issue, or matter therein, he THE PERSON shall be
indemnified against
expenses, including attorney's fees, actually and reasonably
incurred by him THE PERSON in connection with the action, suit,
or proceeding.
(4) Any indemnification under division (E)(1) or (2) of
this section, unless ordered by a court, shall be made by the
corporation only as authorized in the specific case, upon a
determination that indemnification of the director, trustee,
officer, employee, member, manager, or agent is proper in the circumstances
because he THE PERSON has met the applicable standard of conduct
set forth
in division (E)(1) or (2) of this section. Such determination
shall be made as follows:
(a) By a majority vote of a quorum consisting of directors
of the indemnifying corporation who were not and are not parties
to or threatened with the action, suit, or proceeding referred to in division
(E)(1) or (2) of this section;
(b) If the quorum described in division (E)(4)(a) of this
section is not obtainable or if a majority vote of a quorum of
disinterested directors so directs, in a written opinion by
independent legal counsel other than an attorney, or a firm
having associated with it an attorney, who has been retained by
or who has performed services for the corporation or any person
to be indemnified within the past five years;
(c) By the shareholders;
(d) By the court of common pleas or the court in which
the action, suit, or proceeding referred to in division (E)(1) or (2) of this
section was brought.
Any determination made by the disinterested directors under
division (E)(4)(a) or by independent legal counsel under division
(E)(4)(b) of this section shall be promptly communicated to the
person who threatened or brought the action or suit by or in the
right of the corporation under division (E)(2) of this section,
and, within ten days after receipt of such notification, such
THE person shall have the right to petition the court of common pleas
or the court in which such THE action or suit was brought to
review the reasonableness of such THE determination.
(5)(a) Unless at the time of a director's act or omission
that is the subject of an action, suit, or proceeding referred to
in division (E)(1) or (2) of this section, the articles or the
regulations of a corporation state, by specific reference to this
division, that the provisions of this division do not apply to the
corporation and unless the only liability asserted against a
director in an action, suit, or proceeding referred to in
division (E)(1) or (2) of this section is pursuant to section
1701.95 of the Revised Code, expenses, including attorney's fees,
incurred by a director in defending the action, suit, or
proceeding shall be paid by the corporation as they are incurred,
in advance of the final disposition of the action, suit, or
proceeding, upon receipt of an undertaking by or on behalf of the
director in which he THE DIRECTOR agrees to do both of the
following:
(i) Repay such THE amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction that his
THE DIRECTOR'S action or failure to act involved an act or omission
undertaken
with deliberate intent to cause injury to the corporation or
undertaken with reckless disregard for the best interests of the
corporation;
(ii) Reasonably cooperate with the corporation concerning
the action, suit, or proceeding.
(b) Expenses, including attorney's fees, incurred by a
director, trustee, officer, employee, member, manager, or agent in defending
any
action, suit, or proceeding referred to in division (E)(1) or
(2) of this section, may be paid by the corporation as they are
incurred, in advance of the final disposition of the action,
suit, or proceeding, as authorized by the directors in the
specific case, upon receipt of an undertaking by or on behalf of
the director, trustee, officer, employee, member, manager, or agent to repay
such
amount, if it ultimately is determined that he THE PERSON is not
entitled to
be indemnified by the corporation.
(6) The indemnification authorized by this section shall
not be exclusive of, and shall be in addition to, any other
rights granted to those seeking indemnification under the
articles, the regulations, any agreement, a vote of
shareholders or disinterested directors, or otherwise, both as to
action in their official capacities and as to action in another
capacity while holding their offices or positions, and shall continue as to a
person who has ceased to be a director, trustee, officer,
employee, member, manager, or agent and shall inure to the benefit of the
heirs,
executors, and administrators of such a person.
(7) A corporation may purchase and maintain insurance or
furnish similar protection, including, but not limited to, trust
funds, letters of credit, or self-insurance, on behalf of or for
any person who is or was a director, officer, employee, or agent
of the corporation, or is or was serving at the request of the
corporation as a director, trustee, officer, employee, member, manager, or
agent
of another corporation, domestic or foreign, nonprofit or for
profit, a limited liability company, or a partnership, joint venture, trust,
or other enterprise,
against any liability asserted against him THE PERSON and
incurred by him THE PERSON in
any such capacity OF THOSE CAPACITIES, or arising out of
his THE PERSON'S status as
such, whether
or not the corporation would have the power to indemnify him THE
PERSON against such liability under this section. Insurance may be
purchased from or maintained with a person in which the
corporation has a financial interest.
(8) The authority of a corporation to indemnify persons
pursuant to division (E)(1) or (2) of this section does not
limit the payment of expenses as they are incurred,
indemnification, insurance, or other protection that may be
provided pursuant to divisions (E)(5), (6), and (7) of this
section. Divisions (E)(1) and (2) of this section do not create
any obligation to repay or return payments made by the
corporation pursuant to division (E)(5), (6), or (7).
(9) As used in division (E) of this section, "corporation"
includes all constituent entities in a consolidation
or merger and the new or surviving corporation, so that any
person who is or was a director, officer, employee, trustee, member, manager,
or agent of
such a constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee,
officer, employee, member, manager, or agent of another corporation, domestic
or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture,
trust, or other enterprise, shall stand in the same position
under this section with respect to the new or surviving
corporation as he THE PERSON would if he THE
PERSON had served the new or surviving
corporation in the same capacity.
(F) In carrying out the purposes stated in its articles
and subject to limitations prescribed by law or in its articles,
a corporation may DO ANY OF THE FOLLOWING:
(1) Purchase or otherwise acquire, lease as lessee, invest
in, hold, use, lease as lessor, encumber, sell, exchange,
transfer, and dispose of property of any description or any
interest in such property OF ANY DESCRIPTION;
(2) Make contracts;
(3) Form or acquire the control of other corporations,
domestic or foreign, whether nonprofit or for profit;
(4) Be a partner, member, associate, or participant in
other enterprises or ventures, whether FOR profit or nonprofit;
(5) Conduct its affairs in this state and elsewhere;
(6) Borrow money, and issue, sell, and pledge its notes,
bonds, and other evidences of indebtedness, and secure any of its
obligations by mortgage, pledge, or deed of trust of all or any
of its property, and guarantee or secure obligations of any
person;
(7) Resist a change or potential change in control of the
corporation if the directors by a majority vote of a quorum
determine that the change or potential change is opposed to or
not in the best interests of the corporation IN EITHER OF THE FOLLOWING
MANNERS:
(a) Upon consideration of the interests of the
corporation's shareholders and any of the matters set forth in
division (E) of section 1701.59 of the Revised Code; or
(b) Because the amount or nature of the indebtedness and
other obligations to which the corporation or any successor or
the property of either may become subject in connection with the
change or potential change in control provides reasonable grounds
to believe that, within a reasonable period of time, any of the
following would apply:
(i) The assets of the corporation or any successor would
be or become less than its liabilities plus its stated capital,
if any;
(ii) The corporation or any successor would be or become
insolvent;
(iii) Any voluntary or involuntary proceeding under the
federal bankruptcy laws concerning the corporation or any
successor would be commenced by any person.
(8) Do all things permitted by law and exercise all
authority within the purposes stated in its articles or
incidental to its articles.
(G) Irrespective of the purposes stated in its articles,
but subject to limitations stated in its articles, a corporation,
in addition to the authority conferred by division (F) of this
section, may invest its funds not currently needed in its
business in any shares or other securities, to such extent that as
a result of the investment the corporation shall not acquire
control of another corporation, business, or undertaking the
activities and operations of which are not incidental to the
purposes stated in its articles.
(H)(1) No lack of, or limitation upon, the authority of a
corporation shall be asserted in any action except (1) by AS
FOLLOWS:
(a) BY the
state in an action by it against the corporation, (2) by;
(b) BY or on
behalf of the corporation against a director, an officer, or any
shareholder as such, (3) by A DIRECTOR, OFFICER, OR SHAREHOLDER;
(c) BY a shareholder as such or by or on
behalf of the holders of shares of any class against the
corporation, OR a director, an officer, or any shareholder as
such, or (4) in A DIRECTOR, OFFICER, OR SHAREHOLDER;
(d) IN an action involving an alleged overissue of shares.
This division
(2) DIVISION (H)(1) OF THIS SECTION shall apply to
any action brought in this state
upon any contract made in this state by a foreign corporation.
Sec. 1701.15. (A) Unless otherwise provided in THE SHAREHOLDERS OF
A CORPORATION DO NOT HAVE A PRE-EMPTIVE RIGHT TO ACQUIRE THE CORPORATION'S
UNISSUED SHARES EXCEPT TO THE EXTENT THE ARTICLES SO PROVIDE. IF the
articles, PROVIDE THAT the holders of the shares of any class,
other than
shares which THAT are limited as to dividend or distribution
rate and
liquidation price, shall HAVE PRE-EMPTIVE RIGHTS, THOSE HOLDERS,
upon
the
offering or sale for cash of
shares of the same class, SHALL have the right, during a reasonable
time and on reasonable terms fixed by the directors, to purchase
such THE shares in proportion to their respective holdings of
shares
of such class, at a price fixed as provided in sections 1701.01
to 1701.98 of the Revised Code THIS CHAPTER, unless the shares
offered or sold are IN ANY OF THE FOLLOWING CATEGORIES:
(1) Treasury shares;
(2) Issued as a share dividend or distribution;
(3) Issued or agreed to be issued for considerations other
than money;
(4) Issued or agreed to be issued upon exercise of options
granted and authorized in accordance with section 1701.16 of the
Revised Code;
(5) Issued or agreed to be issued upon conversion of
convertible shares authorized in the articles, or upon exercise
of conversion rights conferred and authorized in accordance with
section 1701.22 of the Revised Code;
(6) Offered to shareholders in satisfaction of their
pre-emptive rights and not purchased by such shareholders,
and
thereupon issued or agreed to be issued for a consideration not
less than that at which such THE shares were so offered to such
shareholders, less reasonable expenses, compensation, or discount
paid or allowed for the sale, underwriting, or purchase of such
THE
shares, unless by the affirmative vote or written order of the
holders of two-thirds of the shares otherwise entitled to such
THE pre-emptive rights, the pre-emptive rights are restored as to any
of such THE shares not theretofore PREVIOUSLY
issued or agreed to be issued;
(7) Released from pre-emptive rights by the affirmative
vote or written consent of the holders of two-thirds of the
shares entitled to such THE pre-emptive rights. Any such vote
or consent shall be entered in the records of the corporation and
shall be binding on all shareholders and their transferees for
the time specified in such THE vote or consent up to but not
exceeding one year, and shall protect all persons who within such
THAT time acquire the shares or options on or conversion or other
rights with respect to the shares so released;
(8) Released from pre-emptive rights by the affirmative
vote or written consent of the holders of a majority of the
shares entitled to such THE pre-emptive rights, for offering and
sale, or the grant of options with respect thereto, to any or all
employees of the corporation or of subsidiary corporations or to
a trustee on their behalf, under a plan adopted or to be adopted
by the directors for that purpose.
(B) No action shall be brought upon any cause of action
arising under division (A) of this section at any time after two
years from the day on which a written notice or other
communication is given or mailed to each shareholder having such
a THE cause of action informing the shareholder of the transaction
giving rise thereto TO THE CAUSE OF ACTION, and no action shall
in any event be brought
upon any such cause of action OF THAT NATURE at any time after
four years from
the day on which such THE cause of action arose, or from the
effective date of this provision, whichever is the later.
(C) THE PROVISIONS OF DIVISION
(A) OF THIS SECTION AS THEY
EXISTED PRIOR TO THE EFFECTIVE DATE OF THIS AMENDMENT, SHALL
CONTINUE TO APPLY TO ANY CORPORATION INCORPORATED PRIOR TO
THE EFFECTIVE DATE OF THIS AMENDMENT, UNTIL THE SHAREHOLDERS OF THE
CORPORATION ADOPT AN AMENDMENT TO ITS ARTICLES EXPRESSLY
PROVIDING THAT THE PROVISIONS OF DIVISION
(A) OF THIS SECTION THAT TAKE EFFECT ON THE EFFECTIVE DATE OF THIS
AMENDMENT
APPLY TO THE CORPORATION OR AMENDED ARTICLES OF INCORPORATION.
Sec. 1701.18. (A) Except as provided in the case of
change of shares, share dividends or distributions,
reorganization, merger, consolidation, combination, or conversion
of shares or obligations into shares, THE FOLLOWING APPLY:
(1) Payment for shares shall be made with money or other
property of any description, or any interest therein IN
PROPERTY, actually
transferred to the corporation, or labor or services actually
rendered to the corporation.
(2) In the case of shares with par value, other than
treasury shares, said THE consideration shall be not less than
the
par value of the shares, provided that such THE shares may be
sold
and paid for at such a discount from the par value of the shares
as THAT would amount to or not exceed reasonable compensation
for the
sale, underwriting, or purchase of such THE shares, and,
regardless of
such THE discount such, THE shares shall be
deemed to be fully paid.
(3) In the case of treasury shares with par value, the
consideration may be less than the par value of the shares.
(B) Promissory notes, drafts, or other obligations of a
subscriber or purchaser do not constitute payment for shares.
(C) An agreement by a person to perform services as the
consideration for shares does not, of itself, constitute such
THE person a shareholder or AND DOES NOT, OF ITSELF,
CONSTITUTE payment for such shares prior to the
performance of such THE services.
(D) Except in the case of convertible shares or
obligations, shares with par value shall not be issued or
disposed of upon change of shares, share dividends or
distributions, reorganization, merger, consolidation, exchange of
shares for other shares or securities, or otherwise, if as a
result thereof the aggregate liabilities of the corporation
plus
its stated capital would exceed its aggregate assets or any such
existing excess would be increased.
(E) When shares have been issued as provided in sections
1701.01 to 1701.98 of the Revised Code THIS CHAPTER, in the case of
change of
shares, share dividends or distributions, reorganization, merger,
consolidation, or conversion of shares or obligations into
shares, or when shares have been paid for in conformity with this
section, such shares shall be deemed fully paid and
nonassessable.
(F) Every person who subscribes for or purchases shares of
a corporation is liable to the corporation to pay or deliver to
the corporation the consideration agreed upon, and, except as
provided in division (A) of this section, if such THE shares are
with par value, such THE person is obligated to pay to the
corporation
therefor FOR THE SHARES in money or other property or services
the full par
value of the shares. THE PERSON IS NOT LIABLE TO THE CORPORATION OR ITS
CREDITORS IN ANY OTHER AMOUNT.
(G) Every holder, whether the original or a transferee, of
shares not paid for as provided in this section, who has acquired
them with actual knowledge of that fact, is personally liable to
the corporation for the amount unpaid on the shares, and his THE
HOLDER'S
liability shall continue notwithstanding any transfer of such
THE
shares, until such THE shares are paid in full; but no holder
who has
acquired such THE shares without actual knowledge of the fact
that
the shares are not paid for is under any liability in respect of
the shares.
(H) No pledgee or other holder of shares as collateral
security is personally liable as a shareholder.
(I) No person who in fact, whether disclosed on the
records of the corporation or otherwise, holds shares as
executor, administrator, guardian, trustee, trustee of a voting
trust, receiver, or in any other fiduciary capacity is personally
liable as a shareholder, but the estate or property in the hands
of such fiduciary is liable or the real or beneficial owner is
liable under this section as equity may require. This section
does not relieve a fiduciary from liability for a breach of
trust.
(J) EXCEPT AS SET FORTH IN ANY PROVISION IN TITLE
LVII of the Revised Code, NEITHER A SHAREHOLDER OF A CORPORATION NOR A
SUBSCRIBER TO ITS SHARES IS PERSONALLY LIABLE FOR ANY DEBTS,
OBLIGATIONS, OR LIABILITIES OF THE CORPORATION IN THE ABSENCE OF
A WRITTEN, ENFORCEABLE AGREEMENT THAT IS SIGNED BY THE SHAREHOLDER OR
SUBSCRIBER AND THAT SPECIFICALLY UNDERTAKES LIABILITY FOR SUCH DEBTS,
OBLIGATIONS, OR LIABILITIES.
Sec. 1701.24. (A) The shares of a corporation are
personal property.
(B) Each holder of shares is entitled to one or more
certificates, signed by the chairperson of the board or
the president or a vice-president and by the secretary, an assistant
secretary, the treasurer, or an assistant treasurer of the
corporation, which shall certify the number and class of shares
held by the holder in such THE corporation, but no certificate
for shares shall be executed or delivered until such shares are fully paid.
When such a THE certificate is countersigned by an incorporated
transfer agent or registrar, the signature of any of such THOSE
officers of the corporation may be facsimile, engraved, stamped,
or printed. Although any officer of the corporation whose manual
or facsimile signature is affixed to such a THE certificate
ceases to
be such officer before the certificate is delivered, such THE
certificate nevertheless shall be effective in all respects when
delivered.
(C) A corporation is not obligated to but may issue
fractional shares. THE HOLDER OF A FRACTIONAL SHARE IS ENTITLED TO
EXERCISE
THE RIGHTS OF A SHAREHOLDER, INCLUDING THE RIGHT TO VOTE, TO
RECEIVE DIVIDENDS, AND TO PARTICIPATE IN THE ASSETS OF THE
CORPORATION UPON LIQUIDATION. In the case of uncertificated
securities, the
corporation may proceed as provided in divisions (C)(1)
and (2) of this section. In the case of certificated securities,
the corporation may execute and deliver a certificate for or
including a fraction of a share; or, in lieu thereof, may DO ANY OF
THE FOLLOWING:
(1) Pay to the person otherwise entitled to become a
holder of a fraction of a share an amount in cash specified as
the value thereof OF THE FRACTION OF A SHARE in the articles, a
resolution of the directors,
or other agreement or instrument pursuant to which such fraction
of a share OTHERWISE would otherwise be issued, or, if not so
specified,
then the amount determined for such THAT purpose by the
directors of the issuing corporation, or the amount realized upon sale of
such THE
fraction of a share;
(2) Provide reasonable means to afford to such THE person the
opportunity, on specified terms and conditions, to purchase or
sell fractional interests in shares, to the exclusion of all
rights he THE PERSON OTHERWISE might otherwise have;
(3) Execute and deliver registered or bearer scrip over
the manual or facsimile signature of an officer of the
corporation or of its agent for that purpose, exchangeable as
therein provided IN THE SCRIP for full shares, but such scrip
shall not
entitle the holder to any rights as a shareholder except as
therein provided IN THE SCRIP. The scrip may provide that it
shall become
void unless the rights of the holders are exercised within a
specified period and may contain any other provisions that the
corporation deems advisable. Whenever any such scrip ceases to
be exchangeable for full shares, the shares that OTHERWISE would
otherwise
have been issuable as therein provided IN THE SCRIP shall be
deemed to be
treasury shares unless the scrip contains other provision for
their disposition.
(D) A joint estate with the incidents of a joint estate as
at common law, including the right of survivorship, may be
created in shares by registering the same in the case of
uncertificated securities, or by executing and delivering a
certificate therefor in the case of certificated securities to
two or more persons with the words "as joint tenants" or "as
joint tenants with right of survivorship and not as tenants in
common" following their names. Upon receipt by the corporation
of proof satisfactory to it of the death of one or more of such
joint tenants, it may register the transfer to, or execute and
deliver a new certificate to, the survivor or survivors.
(E) Whenever a corporation has determined that any
outstanding certificates for shares should be canceled and
exchanged for other certificates, the corporation may order and
require the holders of the outstanding certificates to surrender
them for such THAT purpose within a reasonable time to be fixed
by the corporation. Such THE order may provide that, until
compliance
therewith WITH THE ORDER, any or all rights as a shareholder of
the holder of
any certificate so required to be surrendered shall be suspended
with respect to the shares represented thereby BY THE
CERTIFICATE. Not less than
ten days before any such THE order is to become effective, the
corporation shall give notice thereof OF THE ORDER by mail to
each shareholder affected thereby BY THE ORDER at his
THE SHAREHOLDER'S
address as it appears on the records
of the corporation.
(F) Unless otherwise provided by the articles or
regulations, the directors may provide by resolution that some or
all of any or all classes and series of shares of a corporation
shall be uncertificated shares, provided that such THE
resolution
shall not apply to shares represented by a certificate until such
THE
certificate is surrendered to the corporation and that
such THE resolution shall not apply to a certificated security
issued
in exchange for an uncertificated security. Within a
reasonable time after the issuance or transfer of uncertificated
shares, the corporation shall send to the registered owner
thereof OF THE SHARES a written notice containing the
information required to be set forth or stated on certificates pursuant to
division (A)
of section 1701.25 of the Revised Code. Except as otherwise expressly
provided by law, the
rights and obligations of the holders of uncertificated shares
and the rights and obligations of the holders of certificates
representing shares of the same class and series shall be
identical.
Sec. 1701.33. The directors may declare dividends and
distributions on outstanding shares of the corporation, subject
to the following provisions:
(A) A dividend or distribution may be paid in cash,
property, or shares of the corporation. The dividend or
distribution shall not exceed the combination of the surplus of
the corporation and the difference between the following:
(1) The reduction in surplus that results from the
immediate recognition of the transition obligation under
statement of financial accounting standards no. 106 (SFAS no.
106), issued by the financial accounting standards board;
(2) The aggregate amount of the transition obligation that
would have been recognized as of the date of the declaration of a
dividend or distribution if the corporation had elected to
amortize its recognition of the transition obligation under
statement of financial accounting standards no. 106.
(B) A dividend or distribution may be paid in treasury
shares or in authorized but unissued shares. If paid in shares
with par value, there shall be transferred from any surplus,
however created, to stated capital, such THE amount, if any,
as THAT is
necessary in order that the stated capital represented by the
outstanding shares with par value, after giving effect to such
THE dividend or distribution, will be equal to the aggregate par
value of such THE shares, or, if the directors so determine, a
greater amount shall be so transferred. If paid in shares
without par value, there shall be transferred from any surplus,
however created, to stated capital, only such THE amount, if
any, as THAT
the directors determine.
(C) No dividend or distribution shall be paid to the
holders of shares of any class in violation of the rights of the
holders of shares of any other class, or when the corporation is
insolvent or there is reasonable ground to believe that by such
payment it would be rendered insolvent;.
(D) No dividend or distribution on shares of any class
shall be paid in shares of another class if any of the authorized
shares of such THE latter class are already outstanding, unless
either the articles so provide or such THE payment is authorized
by
the affirmative vote of the holders of at least two-thirds of the
shares of the class in which payment is to be made;.
(E) If the articles of a corporation engaged in whole or
in part in the exploitation of mines, timber, oil wells, gas
wells, quarries, or other natural resources so provide, the
corporation may compute its surplus for the purpose of paying
dividends and distributions without making any deduction or
allowance for the depletion of such assets incidental to the
exploitation and sale of them;.
(F) When any portion of a dividend or distribution is paid
out of capital surplus, the corporation, at the time of paying
the same DIVIDEND OR DISTRIBUTION, shall notify the shareholders
receiving the same DIVIDEND OR DISTRIBUTION as to the kind of
surplus out of which the dividend OR DISTRIBUTION is paid.
(G) When a dividend or distribution is to be paid in
authorized but unissued shares of the corporation, the directors
may provide that such THE dividend or distribution shall also be
paid
on treasury shares of the same class.
(H) THE EFFECT OF A
DIVIDEND OR DISTRIBUTION IS MEASURED AS OF THE DATE THE DIVIDEND
OR DISTRIBUTION IS AUTHORIZED IF THE PAYMENT OCCURS ONE
HUNDRED TWENTY DAYS OR LESS AFTER THE DATE OF AUTHORIZATION OR AS OF THE
DATE THE PAYMENT IS MADE IF IT OCCURS MORE THAN ONE HUNDRED
TWENTY DAYS AFTER THE DATE OF AUTHORIZATION. IF A CORPORATION
PAYS A DIVIDEND OR DISTRIBUTION BY DELIVERING AN OBLIGATION OR
OTHER EVIDENCE OF INDEBTEDNESS, THE DATE OF THE DELIVERY IS THE
DATE UPON WHICH THE EFFECT OF THE DIVIDEND OR DISTRIBUTION IS
MEASURED.
(I) A CORPORATION'S
INDEBTEDNESS TO A SHAREHOLDER INCURRED BY REASON OF A DIVIDEND
OR DISTRIBUTION MADE IN ACCORDANCE WITH THIS SECTION IS AT
PARITY WITH THE CORPORATION'S INDEBTEDNESS TO ITS GENERAL,
UNSECURED CREDITORS, EXCEPT TO THE EXTENT SUBORDINATED BY
AGREEMENT.
Sec. 1701.45. (A) For any lawful purpose, including, without limitation, the
determination of the shareholders who are entitled to: (1) TO
receive notice of
or to vote at a meeting of shareholders; (2) TO receive payment of any
dividend
or distribution; (3) TO receive or exercise rights of purchase of or
subscription for, or exchange or conversion of, shares or other securities,
subject to contract rights with respect thereto TO THE SHARES OR
SECURITIES; or (4) TO participate in the
execution of written consents, waivers, or releases; the directors may fix a
record date which shall not be a date earlier than the date on which the
record date is fixed and, in the cases provided for in clauses (1), (2) and
(3) above, shall not be more than sixty days, unless the articles or the
regulations specify a shorter or a longer period for such THAT
purpose, preceding
the date of the meeting of the shareholders, or the date fixed for the payment
of any dividend or distribution, or the date fixed for the receipt or the
exercise of rights, as the case may be.
(B) If a meeting of the shareholders is called by persons entitled to call
the same, MEETING or action is taken by shareholders without a
meeting, and if the
directors fail or refuse, within such THE time as
THAT the persons calling such
THE meeting or initiating such other action may request, to fix
a
record date for the
purpose of clause (1) or (4) of division (A) of this section, then the persons
calling such THE meeting or initiating such other action
may fix
a record date for such purpose EITHER OF THOSE PURPOSES, subject
to the limitations
set forth in division (A) of this section.
(C) The record date for the purpose of clause (1) of division (A) of this
section shall continue to be the record date for all adjournments of such
meeting, unless the directors or the persons who shall have fixed the
original
record date shall, subject to the limitations set forth in division (A)
of
this section, fix another RECORD date, and in case a new record date is
so fixed,
notice thereof OF THE RECORD DATE and of the date to which the
meeting shall have HAS been adjourned
shall be given to shareholders of record as of said THAT date in
accordance with the same requirements as those applying to a meeting newly
called.
(D) The directors may close the share transfer books against transfers of
shares during the whole or any part of the period provided for in division (A)
above OF THIS SECTION, including the date of the meeting of the
shareholders and the period
ending with the date, if any, to which THE MEETING IS adjourned.
(E) If no record date is fixed therefor, the record date for
determining the
shareholders who are entitled to receive notice of, or who are entitled to
vote at, a meeting of shareholders, shall be the date next preceding
the day
on which notice is given, or the date next preceding the day on which the
meeting is held, as the case may be.
(F) The record date for a change of shares shall be the time when the
certificate of amendment or of amended articles effecting such
THE change is filed
in the office of the secretary of state.
(G) IF THE DIRECTORS DO NOT
FIX A RECORD DATE FOR DETERMINING SHAREHOLDERS ENTITLED TO PAYMENT OF ANY
DIVIDEND OR DISTRIBUTION, THE RECORD DATE IS THE DATE THAT THE
DIRECTORS AUTHORIZE THE DIVIDEND OR DISTRIBUTION.
Sec. 1701.59. (A) Except where the law, the articles, or
the regulations require action to be authorized or taken by
shareholders, all of the authority of a corporation shall be
exercised by or under the direction of its directors. For their
own government, the directors may adopt bylaws that are not
inconsistent with the articles or the regulations. The selection
of a time frame for the achievement of corporate goals shall be
the responsibility of the directors.
(B) A director shall perform his THE DIRECTOR'S duties as a
director,
including his THE duties as a member of any committee of the
directors upon which he THE DIRECTOR may serve, in good faith,
in a manner he THE DIRECTOR
reasonably believes to be in or not opposed to the best interests
of the corporation, and with the care that an ordinarily prudent
person in a like position would use under similar circumstances.
In performing his A DIRECTOR'S duties, a director is entitled to
rely on
information, opinions, reports, or statements, including
financial statements and other financial data, that are prepared
or presented by ANY OF THE FOLLOWING:
(1) One or more directors, officers, or employees of the
corporation who the director reasonably believes are reliable and
competent in the matters prepared or presented;
(2) Counsel, public accountants, or other persons as to
matters that the director reasonably believes are within the
person's professional or expert competence;
(3) A committee of the directors upon which he THE DIRECTOR
does not
serve, duly established in accordance with a provision of the
articles or the regulations, as to matters within its designated
authority, which committee the director reasonably believes to
merit confidence.
(C) For purposes of division (B) of this section, THE FOLLOWING
APPLY:
(1) A director shall not be found to have violated his THE
DIRECTOR'S
duties under division (B) of this section unless it is proved by
clear and convincing evidence that the director has not acted in
good faith, in a manner he THE DIRECTOR reasonably believes to
be in or not
opposed to the best interests of the corporation, or with the
care that an ordinarily prudent person in a like position would
use under similar circumstances, in any action brought against a
director, including actions involving or affecting any of the
following:
(a) A change or potential change in control of the
corporation, including a determination to resist a change or
potential change in control made pursuant to division (F)(7) of
section 1701.13 of the Revised Code;
(b) A termination or potential termination of his THE
DIRECTOR'S service
to the corporation as a director;
(c) His THE DIRECTOR'S service in any other position or
relationship with
the corporation.
(2) A director shall not be considered to be acting in
good faith if he THE DIRECTOR has knowledge concerning the
matter in question
that would cause reliance on information, opinions, reports, or
statements that are prepared or presented by the persons
described in divisions (B)(1) to (3) of this section to be
unwarranted.
(3) Nothing contained in this division limits relief
available under section 1701.60 of the Revised Code.
(D) A director shall be liable in damages for any action
he THAT THE DIRECTOR takes or fails to take as a director only
if it
is proved by
clear and convincing evidence in a court of competent
jurisdiction that his THE DIRECTOR'S action or failure to act
involved an act or
omission undertaken with deliberate intent to cause injury to the
corporation or undertaken with reckless disregard for the best
interests of the corporation. Nothing contained in this division
affects the liability of directors under section 1701.95 of the
Revised Code or limits relief available under section 1701.60 of
the Revised Code. This division does not apply if, and only to
the extent that, at the time of a director's act or omission that
is the subject of complaint, the articles or the regulations of
the corporation state by specific reference to this division that
the provisions of this division do not apply to the corporation.
(E) For purposes of this section, a director, in
determining what he THE DIRECTOR reasonably believes to be in
the best
interests of the corporation, shall consider the interests of the
corporation's shareholders and, in his THE DIRECTOR'S
discretion, may consider
any of the following:
(1) The interests of the corporation's employees,
suppliers, creditors, and customers;
(2) The economy of the state and nation;
(3) Community and societal considerations;
(4) 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.
(F) Nothing contained in division (C) or (D) of this
section affects the duties of either of the following:
(1) A director who acts in any capacity other than his
THE DIRECTOR'S
capacity as a director;
(2) A director of a corporation that does not have issued
and outstanding shares that are listed on a national securities
exchange or are regularly quoted in an over-the-counter market by
one or more members of a national or affiliated securities
association, who votes for or assents to any action taken by the
directors of the corporation that, in connection with a change in
control of the corporation, directly results in the holder or
holders of a majority of the outstanding shares of the
corporation receiving a greater consideration for their shares
than other shareholders.
Sec. 1701.63. (A) The regulations may provide for the
creation by the directors of an executive committee or any other
committee of the directors, to consist of one or
more directors, and may authorize the delegation to any such committee
of any of the authority of the directors, however conferred,
other than the authority of filling vacancies among the directors
or in any committee of the directors.
(B) The directors may appoint one or more directors as
alternate members of any such committee DESCRIBED IN DIVISION
(A) OF THIS SECTION, who may take the place
of any absent member or members at any meeting of the particular
committee.
(C) Each such committee DESCRIBED IN DIVISION (A) OF THIS
SECTION shall serve at the pleasure of the
directors, shall act only in the intervals between meetings of
the directors, and shall be subject to the control and direction
of the directors.
(D) Unless otherwise provided in the regulations or
ordered by the directors, any such committee DESCRIBED IN DIVISION
(A) OF THIS SECTION may act by a
majority of its members at a meeting or by a writing or writings
signed by all of its members.
(E) Unless participation by members of any such committee
DESCRIBED IN DIVISION (A) OF THIS SECTION
at a meeting by means of communications equipment is prohibited
by the articles, the regulations, or an order of the directors,
meetings of the particular committee may be held through any
communications equipment if all persons participating can hear
each other. Participation in a meeting pursuant to this division
constitutes presence at the meeting.
(F) An act or authorization of an act by any such
committee DESCRIBED IN DIVISION (A) OF THIS SECTION within the
authority delegated to it shall be as
effective for all purposes as the act or authorization of the
directors.
Sec. 1701.70. (A) If an initial stated capital is not set
forth DIRECTORS ARE NOT NAMED in the articles, then before
the corporation begins business, or if
an initial stated capital is set forth in the articles, then before
subscriptions to shares have
been received in the amount of that initial stated capital,
AND BEFORE THE INCORPORATORS HAVE ELECTED DIRECTORS the incorporators
may adopt an amendment to the articles by a writing
signed by them. IF INITIAL DIRECTORS ARE NAMED IN THE ARTICLES, OR IF THE
INCORPORATORS HAVE ELECTED DIRECTORS AND HAVE NOT RECEIVED SUBSCRIPTIONS, THEN
BEFORE SUBSCRIPTIONS TO SHARES HAVE BEEN RECEIVED, THE DIRECTORS MAY ADOPT AN
AMENDMENT TO THE ARTICLES.
(B) The directors may adopt an amendment to the articles
in the following cases:
(1) When and to the extent authorized by the articles, the
directors may adopt an amendment in respect of any unissued or
treasury shares of any class; DETERMINING, IN WHOLE OR IN PART, THE
EXPRESS TERMS, WITHIN THE LIMITS SET FORTH IN THIS CHAPTER, OF ANY CLASS OF
SHARES BEFORE THE ISSUANCE OF ANY SHARES OF THAT CLASS, OR OF ONE OR MORE
SERIES WITHIN A CLASS BEFORE THE ISSUANCE OF SHARES OF THAT SERIES.
(2) When the corporation shall have HAS issued shares or
obligations convertible into shares of the corporation, or shall
have HAS granted options to purchase any shares, and such
THE conversion
or option rights are set forth in the articles or have been
approved by the same vote of shareholders as, at the time of such
THE
approval, would have been required to amend the articles to
authorize the shares required for such THAT purpose, and the
corporation does not have sufficient authorized but unissued
shares to satisfy such THOSE conversion or option rights, the
directors
may adopt an amendment to authorize such THE
shares;.
(3) Whenever shares of any class have been redeemed, or
have been surrendered to or acquired by the corporation upon
conversion, exchange, purchase, or otherwise, the directors may
adopt an amendment to reduce the authorized number of shares of
such THE class by the number so redeemed, surrendered, or
acquired;
and when all of the authorized shares of a class have been
redeemed, or surrendered to or acquired by the corporation, the
directors may adopt an amendment to eliminate from the articles
all references to the shares of such THE class and to make
such other
appropriate changes as THAT are required by such
THE elimination;.
(4) When articles have been amended and any change of
issued or unissued shares provided for in the amendment or
amended articles shall have HAS become effective, the directors
may
adopt an amendment to eliminate from the articles all references
to the change of shares and to make such ANY other appropriate
changes as THAT are required by such THE
elimination; however,
such an amendment to articles THAT IS SO adopted by the
directors shall
contain a statement with respect to the authorized number and the par
value, if any, of the shares of each class.
(5) After a merger or consolidation, in which the
surviving or new corporation is a domestic corporation, shall
have become BECOMES effective, the directors may adopt an
amendment:
(a) To eliminate from the articles any statement or
provision pertaining exclusively to the merger or consolidation,
or that was required to be set forth in the agreement of
merger
or consolidation and that would not be required in
original articles or amendments to articles filed at the time
the statement or provision was adopted;
(b) To make such ANY other appropriate changes required by
that elimination.
An amendment to articles adopted by the directors under division
(B)(5) of this section need not contain or continue any
statement with respect to the amount of stated capital.
(C) IF A VOTE ON THE ADOPTION OF AN
AMENDMENT IS REQUIRED BY DIVISION (B)(4) OF SECTION 1701.71 OF
THE REVISED CODE, ANY AMENDMENT TO THE
ARTICLES ADOPTED PURSUANT TO DIVISION (B) OF THIS SECTION THAT
CREATES A CLASS OR SERIES OF SHARES THE EXPRESS TERMS OF WHICH
PROVIDE FOR THE CONVERTIBILITY OF THE SHARES INTO SHARES OF
ANOTHER CLASS SHALL ALSO REQUIRE THE APPROVAL OF THE HOLDERS,
VOTING AS A CLASS, OF ANY ISSUED AND OUTSTANDING SHARES INTO WHICH THE SHARES
MAY BE CONVERTED.
Sec. 1701.71. (A)(1) Except as otherwise provided in this
division or division (A)(2) of this section, the shareholders, at
a meeting held for such THAT purpose, may adopt an amendment,
including any AMENDMENT that could be adopted by the directors, by the
affirmative vote of the holders of shares entitling them to
exercise two-thirds of the voting power of the corporation on the
proposal or, if the articles provide or permit, by the
affirmative vote of a greater or lesser proportion, but not less
than a majority, of such voting power, and by such THE
affirmative
vote of the holders of shares of any particular class as THAT is
required by the articles. If, at the time an amendment to
eliminate cumulative voting rights permitted by division (B)(10)
of section 1701.69 of the Revised Code is acted upon by the
shareholders, a corporation does not have issued and outstanding
shares that are listed on a national securities exchange or are
regularly quoted in an over-the-counter market by one or more
members of a national or affiliated securities association, that
amendment shall not be adopted if the votes of a sufficient
number of shares are cast against the amendment that, if
cumulatively voted at an election of all the directors, or all
the directors of a particular class, as the case may be, would at
the time the amendment is acted upon by the shareholders be
sufficient to elect at least one director.
(2) Whenever under division (B) of this section the
holders of shares of any particular class are entitled to vote as
a class on the adoption of an amendment, such THE amendment, in
order to be adopted, must receive the affirmative vote of the holders
of at least two-thirds OF THE SHARES OF THAT CLASS or, if the articles
provide or permit, a
greater or lesser proportion, but not less than a majority, of
the shares of such THAT class. If the proposed amendment would
authorize any particular corporate action that, under any
applicable provision of law or under the existing articles, could
be authorized only by or pursuant to a specified vote of
shareholders, such THE amendment, in order to be adopted, must
receive the affirmative vote so specified.
(B) Regardless of limitations or restrictions in the
articles on the voting rights of the shares of any class, the
holders of shares of a particular class, and in the cases
specified in divisions (B)(6), (7), and (8) of this section the
holders of shares of every class, shall be entitled to vote as a
class on the adoption of an amendment that does any of the
following:
(1) Increases or decreases the par value of the issued
shares of the particular class;
(2) Changes issued shares of the particular class, whether
with or without par value, into a lesser number of shares of the
same class or into the same or a different number of shares of
any other class, with or without par value, theretofore
PREVIOUSLY or then
authorized;
(3) Changes the express terms, or adds express terms, of
the shares of the particular class in any manner substantially
prejudicial to the holders of the shares;
(4) Changes the express terms of issued shares of any
class senior to the particular class in any manner substantially
prejudicial to the holders of shares of the particular class;
(5) Authorizes shares of another class that are
convertible into, or authorizes the conversion of shares of
another class into, shares of the particular class, or authorizes
the directors to fix or alter conversion rights of shares of
another class that are convertible into shares of the particular
class; PROVIDED, HOWEVER, BOTH OF THE FOLLOWING APPLY:
(a) THE FAILURE TO OBTAIN THE SHAREHOLDERS'
APPROVAL ONLY PREVENTS THE CONVERSION OF THE SHARES UNTIL THE SHAREHOLDERS'
APPROVAL IS OBTAINED AND DOES NOT OTHERWISE AFFECT THE
AUTHORIZATION OR ANY OTHER EXPRESS TERMS OF THE SHARES;
(b) THE ARTICLES MAY PROVIDE THAT
NO VOTE OF THE HOLDERS OF COMMON SHARES, AS A CLASS, IS REQUIRED
IN CONNECTION WITH THE AUTHORIZATION OF SHARES OF ANY CLASS THAT
ARE CONVERTIBLE INTO COMMON SHARES.
(6) Provides, in the case of an amendment described in
division (B)(1) or (2) of this section, that the stated capital
of the corporation shall be reduced or eliminated as a result of
the amendment, or provides, in the case of an amendment described
in division (B)(5) of this section, that the stated capital of
the corporation shall be reduced or eliminated upon the exercise
of such conversion rights, provided that any such reduction or
elimination is consistent with section 1701.30 of the Revised
Code;
(7) Changes substantially the purposes of the corporation,
or provides that thereafter an A SUBSEQUENT amendment to the
articles may be
adopted that changes substantially the purposes of the
corporation;
(8) Changes a corporation into a nonprofit corporation.
(C) An amendment that changes a corporation into a
nonprofit corporation shall contain a statement of purposes
proper in the case of a nonprofit corporation, and a statement
that, after the effective date of the amendment, the corporation
shall be subject to the provisions of the Revised Code relating
to nonprofit corporations. In the case of a corporation formed
on or after June 9, 1927, the amendment also shall provide for
the cancellation of all outstanding shares and the terms and
considerations, if any, for such THE cancellation. In the case
of a corporation formed prior to June 9, 1927, the amendment may
provide for such THE cancellation of outstanding shares, but if
it does not so provide, the amendment shall contain a provision
forbidding the payment of dividends or distributions on any
shares after the effective date of the amendment.
Sec. 1701.95. (A)(1) In addition to any other liabilities
imposed by law upon directors of a corporation and except as
provided in division (B) of this section, directors shall be
jointly and severally liable to the corporation as provided in
division (A)(2) of this section if they vote for or assent to any
of the following:
(a) The payment of a dividend or distribution, the making
of a distribution of assets to shareholders, or the purchase or
redemption of the corporation's own shares, contrary to law or the articles;
(b) A distribution of assets to shareholders during the
winding up of the affairs of the corporation, on dissolution or
otherwise, without the payment of all known obligations of the
corporation or without making adequate provision for their
payment;
(c) The making of a loan, other than in the usual course
of business, to an officer, director, or shareholder of the
corporation, other than in either of the following cases:
(i) In the case of a savings and loan association or of a
corporation engaged in banking or in the making of loans
generally;
(ii) At the time of the making of the loan, a majority of
the disinterested directors of the corporation voted for the loan
and, taking into account the terms and provisions of the loan and
other relevant factors, determined that the making of the loan
could reasonably be expected to benefit the corporation.
(2)(a) In cases under division (A)(1)(a) of this section,
directors shall be jointly and severally liable up to the amount
of the dividend, distribution, or other payment, in excess of the
amount that could have been paid or distributed without violation
of law or the articles but not in excess of the amount that would
inure to the benefit of the creditors of the corporation if it
was insolvent at the time of the payment or distribution or there
was reasonable ground to believe that by that action it would be
rendered insolvent, plus the amount that was paid or distributed
to holders of shares of any class in violation of the rights of
holders of shares of any other class.
(b) In cases under division (A)(1)(b) of this section,
directors shall be jointly and severally liable to the extent
that the obligations of the corporation that are not otherwise
barred by statute are not paid or for the payment of which
adequate provision has not been made.
(c) In cases under division (A)(1)(c) of this section,
directors shall be jointly and severally liable for the amount of
the loan with interest on it at the rate specified in
division (A) of section
1343.03 of the Revised Code until the amount has been paid.
(B)(1) A director is not liable under division (A)(1)(a)
or (b) of this section if THE DIRECTOR WOULD NOT BE LIABLE UNDER DIVISION
(D) OF SECTION 1701.59 of the Revised Code OR IF, in determining the amount
available
for any dividend, purchase, redemption, or distribution to
shareholders, the director in good faith relied on a financial
statement of
the corporation prepared by an officer or employee of the
corporation in charge of its accounts or certified by a public
accountant or firm of public accountants, the director in good faith
considered the assets to be of their book value, or the director
followed what the director believed to be sound accounting and business
practice.
(2) A director is not liable under division (A)(1)(c) of
this section for making any loan to, or guaranteeing any loan to
or other obligation of, an employee stock ownership plan, as
defined in section 4975(e)(7) of the Internal Revenue Code.
(C) A director who is present at a meeting of the
directors or a committee of the directors at which action on any
matter is authorized or taken and who has not voted for or
against the action shall be presumed to have voted for the action
unless that director's written dissent from the action is filed,
either during the meeting or within a reasonable time after the
adjournment of the meeting, with the person acting as secretary
of the meeting or with the secretary of the corporation.
(D) A shareholder who knowingly receives any dividend,
distribution, or payment made contrary to law or the articles
shall be liable to the corporation for the amount received by that shareholder
that is in excess of the amount that could have been paid or
distributed without violation of law or the articles.
(E) A director against whom a claim is asserted under or
pursuant to this section and who is held liable on the claim
shall be entitled to contribution, on equitable principles, from
other directors who also are liable. In addition, any director
against whom a claim is asserted under or pursuant to this
section or who is held liable shall have a right of contribution
from the shareholders who knowingly received any dividend,
distribution, or payment made contrary to law or the articles,
and those shareholders as among themselves
also shall be entitled
to contribution in proportion to the amounts received by them
respectively.
(F) No action shall be brought by or on behalf of a
corporation upon a cause of action arising under division
(A)(1)(a) or (2)(b) of this section after two
years from
the day on which the violation occurs.
(G) Nothing contained in this section shall preclude a
creditor whose claim is unpaid from exercising the rights
that that creditor otherwise would have by law to enforce that creditor's
claim against assets of the corporation paid or distributed to shareholders.
(H) The failure of a corporation to observe corporate
formalities relating to meetings of directors or shareholders in
connection with the management of the corporation's affairs shall
not be considered a factor tending to establish that the
shareholders have personal liability for corporate obligations.
Section 2. That existing sections 1151.38, 1151.61, 1701.04,
1701.06, 1701.09, 1701.11, 1701.13, 1701.15, 1701.18, 1701.24,
1701.33, 1701.45, 1701.59, 1701.63, 1701.70, 1701.71, and
1701.95 and section 1701.10 of the Revised Code are hereby
repealed.
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