REPRESENTATIVE Manning

To amend sections 1701.70, 1701.71, and 1701.73 of

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the Revised Code to permit the directors of Ohio

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corporations to make specific, limited changes to

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the articles of incorporation and to require a

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corporation to send written notice to its

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shareholders following any amendment of the

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articles of incorporation by the directors.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1701.70, 1701.71, and 1701.73 of the	8
Revised Code be amended to read as follows:	9

Sec. 1701.70.  (A) If initial directors are not named in the	10
articles, before subscriptions to shares have been received and	11
before the incorporators have elected directors, the incorporators	12
may adopt an amendment to the articles by a writing signed by	13
them. If initial directors are named in the articles, or if the	14
incorporators have elected directors and have not received	15
subscriptions, then before subscriptions to shares have been	16
received, the directors may adopt an amendment to the articles.	17

(B) The directors may adopt an amendment to the articles in	18
the following cases:	19

(1) When and to the extent authorized by the articles, the	20
directors may adopt an amendment determining, in whole or in part,	21
the express terms, within the limits set forth in this chapter, of	22
any class of shares before the issuance of any shares of that	23
class, or of one or more series within a class before the issuance	24
of shares of that series.	25

(2) When the corporation has issued shares or obligations	26
convertible into shares of the corporation or has granted options	27
to purchase any shares, and the conversion or option rights are	28
set forth in the articles or have been approved by the same vote	29
of shareholders as, at the time of the approval, would have been	30
required to amend the articles to authorize the shares required	31
for that purpose, and the corporation does not have sufficient	32
authorized but unissued shares to satisfy those conversion or	33
option rights, the directors may adopt an amendment to authorize	34
the shares.	35

(3) Whenever shares of any class have been redeemed, or have	36
been surrendered to or acquired by the corporation upon	37
conversion, exchange, purchase, or otherwise, the directors may	38
adopt an amendment to reduce the authorized number of shares of	39
the class by the number so redeemed, surrendered, or acquired; and	40
when all of the authorized shares of a class have been redeemed or	41
surrendered to or acquired by the corporation, the directors may	42
adopt an amendment to eliminate from the articles all references	43
to the shares of the class and to make other appropriate changes	44
that are required by the elimination.	45

(4) When articles have been amended and any change of issued	46
or unissued shares provided for in the amendment or amended	47
articles has become effective, the directors may adopt an	48
amendment to eliminate from the articles all references to the	49
change of shares and to make any other appropriate changes that	50
are required by the elimination; however, an amendment to articles	51
that is so adopted by the directors shall contain a statement with	52
respect to the authorized number and the par value, if any, of the	53
shares of each class.	54

(5) After a merger or consolidation, in which the surviving	55
or new corporation is a domestic corporation, becomes effective,	56
the directors may adopt an amendment:	57

(a) To eliminate from the articles any statement or	58
provision pertaining exclusively to the merger or consolidation,	59
or that was required to be set forth in the agreement of merger or	60
consolidation and that would not be required in original articles	61
or amendments to articles filed at the time the statement or	62
provision was adopted;	63

(b) To make any other appropriate changes required by that	64
elimination.	65

An amendment to articles adopted by the directors under	66
division (B)(5) of this section need not contain or continue any	67
statement with respect to the amount of stated capital.	68

(6) Unless otherwise provided in the articles, the directors	69
may adopt an amendment changing the name of the corporation.	70

(7) The directors may adopt an amendment changing the place	71
in this state where the principal office of the corporation is to	72
be located.	73

(8) When the directors have declared a dividend or	74
distribution on any class of outstanding shares of the corporation	75
to be paid in shares of the same class, the directors may adopt an	76
amendment to proportionately increase the authorized number of	77
shares of the class, provided that the corporation has only one	78
class of shares outstanding or the dividend or distribution is not	79
substantially prejudicial to the holders of any other class of the	80
corporation's shares, and further provided that such an amendment	81
be adopted concurrently with the amendment described in division	82
(B)(10) of this section when the dividend or distribution is	83
declared on outstanding shares with par value.	84

(9) The directors may adopt an amendment to change each	85
issued and unissued authorized share of an outstanding class into	86
a greater number of shares of that class and to proportionately	87
increase the authorized number of shares of that class, provided	88
that the corporation has only one class of shares outstanding or	89
the change is not substantially prejudicial to the holders of any	90
other class of the corporation's shares, and further provided that	91
such an amendment be adopted concurrently with the amendment	92
described in division (B)(10) of this section when the change is	93
made to outstanding shares with par value.	94

(10) Concurrently with the adoption of an amendment under	95
division (B)(8) or (9) of this section, the directors may adopt an	96
amendment decreasing the par value of issued and unissued shares	97
of a particular class to the extent necessary to prevent an	98
increase in the aggregate par value of the outstanding shares of	99
the class as a result of the dividend or distribution described in	100
division (B)(8) of this section or the change described in	101
division (B)(9) of this section.	102

(C) If a vote on the adoption of an amendment is required by	103
division (B)(4) of section 1701.71 of the Revised Code, any	104
amendment to the articles adopted pursuant to division (B) of this	105
section that creates a class or series of shares the express terms	106
of which provide for the convertibility of the shares into shares	107
of another class shall also require the approval of the holders,	108
voting as a class, of any issued and outstanding shares into which	109
the shares may be converted.	110

(D) Divisions (B)(6) to (10) of this section shall not apply	111
to a corporation with one hundred or fewer shareholders unless the	112
corporation was created on or after the effective date of this	113
amendment, or the articles of the corporation have been amended in	114
compliance with section 1701.71 or 1701.72 of the Revised Code	115
specifically to make those divisions applicable.	116

Sec. 1701.71.  (A)(1) Except as otherwise provided in this	117
division or division (A)(2) of this section, the shareholders, at	118
a meeting held for that purpose, may adopt an amendment, including	119
any amendment that could be adopted by the directors, by the	120
affirmative vote of the holders of shares entitling them to	121
exercise two-thirds of the voting power of the corporation on the	122
proposal or, if the articles provide or permit, by the affirmative	123
vote of a greater or lesser proportion, but not less than a	124
majority, of such voting power, and by the affirmative vote of the	125
holders of shares of any particular class that is required by the	126
articles. If, at the time an amendment to eliminate cumulative	127
voting rights permitted by division (B)(10) of section 1701.69 of	128
the Revised Code is acted upon by the shareholders, a corporation	129
does not have issued and outstanding shares that are listed on a	130
national securities exchange or are regularly quoted in an	131
over-the-counter market by one or more members of a national or	132
affiliated securities association, that amendment shall not be	133
adopted if the votes of a sufficient number of shares are cast	134
against the amendment that, if cumulatively voted at an election	135
of all the directors, or all the directors of a particular class,	136
as the case may be, would at the time the amendment is acted upon	137
by the shareholders be sufficient to elect at least one director.	138

(2) Whenever under division (B) of this section the holders	139
of shares of any particular class are entitled to vote as a class	140
on the adoption of an amendment, the amendment, in order to be	141
adopted, must receive the affirmative vote of the holders of at	142
least two-thirds of the shares of that class or, if the articles	143
provide or permit, a greater or lesser proportion, but not less	144
than a majority, of the shares of that class. If the proposed	145
amendment would authorize any particular corporate action that,	146
under any applicable provision of law or under the existing	147
articles, could be authorized only by or pursuant to a specified	148
vote of shareholders, the amendment, in order to be adopted, must	149
receive the affirmative vote so specified.	150

(B) Regardless of limitations or restrictions in the	151
articles on the voting rights of the shares of any class, the	152
holders of shares of a particular class, and in the cases	153
specified in divisions (B)(6), (7), and (8) of this section the	154
holders of shares of every class, shall be entitled to vote as a	155
class on the adoption of an amendment that does any of the	156
following:	157

(1) Increases or decreases the par value of the issued	158
shares of the particular class, except in the case of an amendment	159
to the articles adopted by the directors pursuant to division	160
(B)(10) of section 1701.70 of the Revised Code;	161

(2) Changes issued shares of the particular class, whether	162
with or without par value, into a lesser number of shares of the	163
same class or into the same or a different number of shares of any	164
other class, with or without par value, previously or then	165
authorized;	166

(3) Changes the express terms, or adds express terms, of the	167
shares of the particular class in any manner substantially	168
prejudicial to the holders of the shares;	169

(4) Changes the express terms of issued shares of any class	170
senior to the particular class in any manner substantially	171
prejudicial to the holders of shares of the particular class;	172

(5) Authorizes shares of another class that are convertible	173
into, or authorizes the conversion of shares of another class	174
into, shares of the particular class, or authorizes the directors	175
to fix or alter conversion rights of shares of another class that	176
are convertible into shares of the particular class; provided,	177
however, both of the following apply:	178

(a) The failure to obtain the shareholders' approval only	179
prevents the conversion of the shares until the shareholders'	180
approval is obtained and does not otherwise affect the	181
authorization or any other express terms of the shares;	182

(b) The articles may provide that no vote of the holders of	183
common shares, as a class, is required in connection with the	184
authorization of shares of any class that are convertible into	185
common shares.	186

(6) Provides, in the case of an amendment described in	187
division (B)(1) or (2) of this section, that the stated capital of	188
the corporation shall be reduced or eliminated as a result of the	189
amendment, or provides, in the case of an amendment described in	190
division (B)(5) of this section, that the stated capital of the	191
corporation shall be reduced or eliminated upon the exercise of	192
such conversion rights, provided that any reduction or elimination	193
is consistent with section 1701.30 of the Revised Code;	194

(7) Changes substantially the purposes of the corporation,	195
or provides that a subsequent amendment to the articles may be	196
adopted that changes substantially the purposes of the	197
corporation;	198

(8) Changes a corporation into a nonprofit corporation.

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(C) An amendment that changes a corporation into a nonprofit	200
corporation shall contain a statement of purposes proper in the	201
case of a nonprofit corporation and a statement that, after the	202
effective date of the amendment, the corporation shall be subject	203
to the provisions of the Revised Code relating to nonprofit	204
corporations. In the case of a corporation formed on or after	205
June 9, 1927, the amendment also shall provide for the	206
cancellation of all outstanding shares and the terms and	207
considerations, if any, for the cancellation. In the case of a	208
corporation formed prior to June 9, 1927, the amendment may	209
provide for the cancellation of outstanding shares, but if it does	210
not so provide, the amendment shall contain a provision forbidding	211
the payment of dividends or distributions on any shares after the	212
effective date of the amendment.	213

Sec. 1701.73.  (A) Upon the adoption of any amendment or	214
amended articles, a certificate containing a copy of the	215
resolution adopting the amendment or amended articles, a statement	216
of the manner of its adoption, and, in the case of adoption of the	217
resolution by the incorporators or directors, a statement of the	218
basis for such adoption, shall be filed with the secretary of	219
state, and thereupon the articles shall be amended accordingly,	220
any change of shares provided for in the amendment or amended	221
articles shall become effective, and the amended articles shall	222
supersede the existing articles. When an amendment or amended	223
articles are adopted by the directors pursuant to section 1701.70	224
of the Revised Code, the corporation shall send written notice of	225
the amendment or amended articles, and a copy or summary thereof,	226
to each shareholder of the corporation of record as of the date on	227
which the directors approved the amendment or amended articles.	228
The notice shall be sent to the shareholders within twenty days	229
after the filing of the certificate required by this division.	230

(B) When an amendment or amended articles are adopted by the	231
incorporators, the certificate shall be signed by each of them.	232

(C) When an amendment or amended articles are adopted by the	233
directors or by the shareholders, the certificate shall be signed	234
by any authorized officer.	235

(D) A copy of an amendment or amended articles changing the	236
name of a corporation or its principal office in this state,	237
certified by the secretary of state, may be filed for record in	238
the office of the county recorder of any county in this state, and	239
for such recording the county recorder shall charge and collect	240
the same fee as provided for in division (A) of section 317.32 of	241
the Revised Code. Such copy shall be recorded in the records of	242
deeds.	243

Section 2. That existing sections 1701.70, 1701.71, and	244
1701.73 of the Revised Code are hereby repealed.	245