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S. B. No. 110 As IntroducedAs Introduced
124th General Assembly | Regular Session | 2001-2002 |
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SENATOR Johnson
A BILL
| To amend sections 1701.15, 1701.16, 1701.17, 1701.35, | 1 |
|
1701.59, 1701.70, and 1701.75 of the Revised Code | 2 |
|
relative to the authority of a corporation to | 3 |
|
issue option rights or securities having | 4 |
|
conversion or option rights with respect to | 5 |
|
shares, the acts of a director of a corporation | 6 |
|
relating to an acquisition or potential or | 7 |
|
proposed acquisition of control of the | 8 |
|
corporation, and the general duties of a director | 9 |
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1701.15, 1701.16, 1701.17, 1701.35, | 11 |
1701.59, 1701.70, and 1701.75 of the Revised Code be amended to | 12 |
read as follows: | 13 |
Sec. 1701.15. (A) The shareholders of
a corporation do not | 14 |
have a pre-emptive right to acquire the corporation's
unissued | 15 |
shares except to the extent the articles so provide. If the | 16 |
articles provide that the holders of the shares of any class, | 17 |
other than
shares that are limited as to dividend or distribution | 18 |
rate and
liquidation price, have pre-emptive rights, those | 19 |
holders,
upon
the
offering or sale for cash of
shares of the same | 20 |
class, shall have the right, during a reasonable
time and on | 21 |
reasonable terms fixed by the directors, to purchase
the shares in | 22 |
proportion to their respective holdings of
shares
of such class, | 23 |
at a price fixed as provided in this chapter, unless the
shares | 24 |
offered or sold are in any of the following categories: | 25 |
(2) Issued as a share dividend or distribution; | 27 |
(3) Issued or agreed to be issued for considerations other | 28 |
than money; | 29 |
(4) Issued or agreed to be issued upon exercise of
options | 30 |
granted
option rights or conversion rights issued and authorized | 31 |
in accordance with section 1701.16 of the
Revised Code; | 32 |
(5) Issued or agreed to be issued upon conversion of | 33 |
convertible shares authorized in the articles, or upon exercise
of | 34 |
conversion rights conferred and authorized in accordance with | 35 |
section 1701.22 of the Revised Code; | 36 |
(6) Offered to shareholders in satisfaction of their | 37 |
pre-emptive rights and not purchased by
such
those shareholders, | 38 |
and
thereupon issued or agreed to be issued for a consideration | 39 |
not
less than that at which the shares were so offered to
such | 40 |
those shareholders, less reasonable expenses, compensation, or | 41 |
discount
paid or allowed for the sale, underwriting, or purchase | 42 |
of
the
shares, unless by the affirmative vote or written order of | 43 |
the
holders of two-thirds of the shares otherwise entitled to
the | 44 |
pre-emptive rights, the pre-emptive rights are restored as to any | 45 |
of the shares not previously
issued or agreed to be issued; | 46 |
(7) Released from pre-emptive rights by the affirmative
vote | 47 |
or written consent of the holders of two-thirds of the
shares | 48 |
entitled to the pre-emptive rights. Any such vote
or consent | 49 |
shall be entered in the records of the corporation and
shall be | 50 |
binding on all shareholders and their transferees for
the time | 51 |
specified in the vote or consent up to but not
exceeding one year, | 52 |
and shall protect all persons who within
that time acquire the | 53 |
shares or options on or conversion or other
rights with respect to | 54 |
the shares so released; | 55 |
(8) Released from pre-emptive rights by the affirmative
vote | 56 |
or written consent of the holders of a majority of the
shares | 57 |
entitled to the pre-emptive rights, for offering and
sale, or the | 58 |
grant of options
issuance of option rights or securities having | 59 |
conversion or option rights with respect
thereto
to those shares, | 60 |
to any or all
employees of
the corporation or of subsidiary | 61 |
corporations or to
a trustee on
their behalf, under a plan adopted | 62 |
or to be adopted
by the
directors for that purpose. | 63 |
(B) No action shall be brought upon any cause of action | 64 |
arising under division (A) of this section at any time after two | 65 |
years from the day on which a written notice or other | 66 |
communication is given or mailed to each shareholder having the | 67 |
cause of
action informing the shareholder of the transaction | 68 |
giving rise to the cause of action, and no action shall
in any | 69 |
event be brought
upon any cause of action of that nature at any | 70 |
time after
four years from
the day on which the cause of action | 71 |
arose, or from the
effective date of this provision, whichever is | 72 |
the later. | 73 |
(C) The provisions of division
(A) of this section as they | 74 |
existed prior to
the effective date of this amendment
March
17, | 75 |
2000, shall
continue to apply to any corporation incorporated | 76 |
prior to
the effective date of this amendment
March
17,
2000, | 77 |
until the shareholders of the
corporation adopt an amendment to | 78 |
its articles expressly
providing that the provisions of division | 79 |
(A) of this section that take effect on
the effective date of this | 80 |
amendment
March
17, 2000,
apply to the corporation or amended | 81 |
articles of incorporation. | 82 |
|
Sec. 1701.16. (A) Unless the articles otherwise provide,
a | 83 |
corporation by its directors may
grant options to subscribe for
or | 84 |
create and issue option rights or securities having conversion or | 85 |
option rights that entitle the holders of the securities to | 86 |
purchase
or acquire shares
of any authorized class, option rights, | 87 |
securities having conversion or option rights, or obligations, of | 88 |
any class or series, or assets of the corporation, or to purchase | 89 |
or acquire from the corporation shares, option rights, securities | 90 |
having conversion or option rights, or obligations, of any class | 91 |
or series, owned by the corporation and issued by any other | 92 |
person, at the times and on
the
terms that are set forth in the | 93 |
securities, or in the
contracts,
warrants, or
other instruments | 94 |
that evidence the options,
which
evidencing those option rights, | 95 |
securities having conversion or option rights, or obligations. | 96 |
Those contracts, warrants, or
other instruments may be | 97 |
transferable or
nontransferable and may be separable or | 98 |
inseparable from
securities, upon the following conditions: | 99 |
(1) If the shares are subject to
preemptive
pre-emptive | 100 |
rights and if
the
options
option rights or securities having | 101 |
conversion or option rights are not
granted
issued to shareholders | 102 |
in satisfaction of
their
preemptive
pre-emptive rights, the | 103 |
granting
issuance of the
options must
option rights or securities | 104 |
having conversion or option rights shall be
authorized by the vote | 105 |
or consent of the shareholders or holders
of shares of particular | 106 |
classes that then would be required to
waive or release
such | 107 |
preemptive
those pre-emptive rights. The vote or consent
shall | 108 |
release the
preemptive
pre-emptive rights to the shares required | 109 |
to
satisfy the
options
option or conversion rights if and when | 110 |
exercised. | 111 |
(2) If, at the time of
granting
issuing the
options
option | 112 |
rights or securities having conversion or option rights, the | 113 |
corporation
does not have authorized and unissued shares | 114 |
sufficient to satisfy
the
options
option or conversion rights if | 115 |
and when exercised, the
granting
issuance of the
options
must | 116 |
option rights or securities having conversion or option rights | 117 |
shall be authorized by the vote of the
shareholders or holders of | 118 |
shares of particular classes that then
would be required to adopt | 119 |
an amendment to the articles for the
purpose of increasing the | 120 |
authorized number of
such
those shares, and
the. The shares | 121 |
required to be
issued upon the exercise of the
options
option or | 122 |
conversion rights shall be provided by an
amendment concurrently | 123 |
or thereafter
adopted by the shareholders
or the directors. | 124 |
(B)(1) The securities, contracts, warrants, or
other | 125 |
instruments
that evidence the options
evidencing any option | 126 |
rights, securities having conversion or option rights, or | 127 |
obligations of a corporation may contain any terms not repugnant | 128 |
to
law
that are fixed by the board of directors for the protection | 129 |
of the holders of the
options
option rights, securities having | 130 |
conversion or option rights, or obligations of the corporation, | 131 |
including,
but not limited to, the following: | 132 |
(a) Restrictions upon the authorization or issuance of | 133 |
additional shares, option rights, securities having conversion or | 134 |
option rights, or obligations; | 135 |
(b) Provisions for the adjustment of the
conversion or | 136 |
option
rights price; | 137 |
(c) Provisions concerning rights
or adjustments in the event | 138 |
of
reorganization, merger, consolidation,
or sale of the entire | 139 |
assets of the corporation, exchange of shares, or other | 140 |
fundamental changes; | 141 |
(d) Provisions for the reservation of authorized but | 142 |
unissued shares
or other securities to satisfy the
options
option | 143 |
or conversion rights; | 144 |
(e) Restrictions upon the declaration or payment of | 145 |
dividends or distributions
or related party transactions; | 146 |
(f) Conditions
on the exercise of the options, including, | 147 |
but not limited to, subject to the limitation specified in | 148 |
division (B)(2) of this
section, conditions that preclude
the | 149 |
holder or holders of at
least
or limit any person or persons | 150 |
owning or offering to acquire a specified number or percentage of | 151 |
the outstanding common
shares, other shares, option rights, | 152 |
securities having conversion or option rights, or obligations of
a | 153 |
the corporation
or any transferee or transferees of the person or | 154 |
persons from exercising
the options, converting, transferring, or | 155 |
receiving the shares, option rights, securities having conversion | 156 |
or option rights, or obligations of the corporation, including | 157 |
conditions that limit or condition the right of directors who are | 158 |
not disinterested directors, as defined in division (C)(2)(c) of | 159 |
section 1701.59 of the Revised Code, to modify or redeem the | 160 |
shares, option rights, securities having conversion or option | 161 |
rights, or obligations. | 162 |
(2) The express or implied authority conferred by division | 163 |
(B)(1) of this section or any other section of this chapter for | 164 |
securities, contracts, warrants, or
other instruments
that | 165 |
evidence
options
evidencing option rights, securities having | 166 |
conversion or option rights, or obligations of a corporation to | 167 |
contain a condition
on the exercise of options that
precludes the | 168 |
holder or holders of at least a specified number or
percentage of | 169 |
the outstanding common shares of a corporation from
exercising | 170 |
options
as described in division (B)(1)(f) of this section shall | 171 |
apply only to the following: | 172 |
(a) A corporation that has issued and outstanding shares | 173 |
listed on a national securities exchange or regularly quoted in
an | 174 |
over-the-counter market by one or more members of a national
or | 175 |
affiliated securities association; | 176 |
(b) A corporation that has adopted a close corporation | 177 |
agreement pursuant to which
options
option rights or securities | 178 |
having conversion or option rights are
granted
issued, if the | 179 |
securities, contracts, warrants, or
other instruments
that | 180 |
evidence the
options
evidencing the option rights, securities | 181 |
having conversion or option rights, or obligations of the | 182 |
corporation contain a condition
that precludes the holder or | 183 |
holders
of at least a specified number or percentage of the | 184 |
outstanding
common shares of that corporation from exercising the | 185 |
options
as described in division (B)(1)(f) of this section. | 186 |
(C) As used in this section,
"securities" includes | 187 |
obligations and shares of the corporation. | 188 |
Sec. 1701.17. A corporation by its directors, upon
such
any | 189 |
terms
as
that it may
impose, may provide and carry out plans
for | 190 |
the
offering or sale, or the
grant
of options
issuance of
option | 191 |
rights or securities having conversion or option rights, to | 192 |
employees of the
corporation or of subsidiary corporations, or
to | 193 |
a trustee on
their behalf, during the period of their employment | 194 |
or other
period, of, or with respect to, any unissued shares, | 195 |
treasury
shares, or
shares to be purchased, which. Those plans | 196 |
may provide for the
payment for such
shares at one time or in | 197 |
installments, or for the
establishment of special
funds in which | 198 |
employees may participate.
Shares otherwise subject to
pre-emptive | 199 |
rights may be offered or
sold under
such
those plans only when | 200 |
released
from pre-emptive rights. | 201 |
Sec. 1701.35. (A) A corporation by its directors may | 202 |
purchase shares of any class issued by it, in any of the
following | 203 |
instances: | 204 |
(1) When the articles authorize the redemption of
such
those | 205 |
shares and do not prohibit such purchase; | 206 |
(2) To collect or compromise a debt, claim, or controversy | 207 |
in good faith; | 208 |
(3) From a subscriber whose shares have not been paid for
in | 209 |
full, or in settlement or compromise of a subscription; | 210 |
(4) For offering and sale, or the
grant of options
issuance | 211 |
of option rights or securities having conversion or option rights | 212 |
with
respect
thereto
to those shares, to any or all of the | 213 |
employees of the
corporation
or of subsidiary corporations or to a | 214 |
trustee on
their behalf,
under any plan adopted or to be adopted | 215 |
by the
directors for that
purpose; | 216 |
(5) From a person who has purchased
such
those shares from | 217 |
the
corporation under an agreement reserving to the corporation | 218 |
the
right to repurchase or obligating it to repurchase; | 219 |
(6) To avoid the issuance of or to eliminate fractional | 220 |
shares; | 221 |
(7) When the articles in substance provide that the | 222 |
corporation shall have a right to repurchase if and when any | 223 |
shareholder desires to, or on the happening of any event is | 224 |
required to, sell
such
those shares; | 225 |
(8) From a shareholder who by reason of dissent is
entitled | 226 |
to be paid the fair cash value of
his
the shareholder's
shares; | 227 |
(9) When authorized by the shareholders at a meeting
called | 228 |
for such purpose, by the affirmative vote of the holders
of | 229 |
two-thirds of the shares of each class, regardless of
limitations | 230 |
or restrictions in the articles on the voting rights
of the shares | 231 |
of any such class, or if the articles so provide or
permit, a | 232 |
greater or lesser proportion, but not less than a
majority, of the | 233 |
shares of any class; | 234 |
(10) When authorized by the articles or by such vote or | 235 |
consent of holders of such proportion of shares, though less than | 236 |
a majority, of any one or more classes as is provided in the | 237 |
articles. | 238 |
(B) A corporation shall not purchase its own shares except | 239 |
as provided in this section, nor shall a corporation purchase or | 240 |
redeem its own shares if immediately thereafter its assets would | 241 |
be less than its liabilities plus its stated capital, if any,
or | 242 |
if the corporation is insolvent, or if there is reasonable ground | 243 |
to believe that by such purchase or redemption it would be | 244 |
rendered insolvent. | 245 |
(C) Shares issued by a corporation
which
that owns or | 246 |
controls
shares entitling it to elect a majority of the directors | 247 |
of
another corporation may be purchased by such last mentioned | 248 |
corporation only when and if
such
those shares could be purchased | 249 |
by
the
issuing corporation pursuant to division (A)(9) or (10) of | 250 |
this
section. | 251 |
Sec. 1701.59. (A) Except where the law, the articles, or | 252 |
the regulations require action to be authorized or taken by | 253 |
shareholders, all of the authority of a corporation shall be | 254 |
exercised by or under the direction of its directors. For their | 255 |
own government, the directors may adopt bylaws that are not | 256 |
inconsistent with the articles or the regulations. The selection | 257 |
of a time frame for the achievement of corporate goals shall be | 258 |
the responsibility of the directors. | 259 |
(B) A director shall perform the director's duties as a | 260 |
director,
including the duties as a member of any committee of the | 261 |
directors upon which the director may serve, in good faith,
in a | 262 |
manner the director
reasonably believes to be in or not opposed to | 263 |
the best interests
of the corporation, and with the care that an | 264 |
ordinarily prudent
person in a like position would use under | 265 |
similar circumstances.
In performing a director's duties, a | 266 |
director is entitled to
rely on
information, opinions, reports, or | 267 |
statements, including
financial statements and other financial | 268 |
data, that are prepared
or presented by any of the following: | 269 |
(1) One or more directors, officers, or employees of the | 270 |
corporation who the director reasonably believes are reliable and | 271 |
competent in the matters prepared or presented; | 272 |
(2) Counsel, public accountants, or other persons as to | 273 |
matters that the director reasonably believes are within the | 274 |
person's professional or expert competence; | 275 |
(3) A committee of the directors upon which the director | 276 |
does not
serve, duly established in accordance with a provision of | 277 |
the
articles or the regulations, as to matters within its | 278 |
designated
authority, which committee the director reasonably | 279 |
believes to
merit confidence. | 280 |
(C) For purposes of division (B) of this section, the | 281 |
following
apply: | 282 |
(1) A director shall not be found to have violated the | 283 |
director's
duties under division (B) of this section unless it is | 284 |
proved by
clear and convincing evidence that the director has not | 285 |
acted in
good faith, in a manner the director reasonably believes | 286 |
to
be in or not
opposed to the best interests of the corporation, | 287 |
or with the
care that an ordinarily prudent person in a like | 288 |
position would
use under similar circumstances, in any action | 289 |
brought against a
director, including actions involving or | 290 |
affecting any of the
following: | 291 |
(a) A change or potential change in control of the | 292 |
corporation, including a determination to resist a change or | 293 |
potential change in control made pursuant to division (F)(7) of | 294 |
section 1701.13 of the Revised Code
or a decision not to redeem | 295 |
any rights under, or to modify or render inapplicable, any | 296 |
shareholder rights plan, including, but not limited to, a plan | 297 |
adopted with the conditions described in division (B)(1)(f) of | 298 |
section 1701.16 of the Revised Code; | 299 |
(b) A termination or potential termination of the
director's | 300 |
service
to the corporation as a director; | 301 |
(c) The director's service in any other position or | 302 |
relationship with
the corporation; | 303 |
(d) A decision not to render inapplicable, or to make | 304 |
determinations under, the provisions of Chapter 1704. or section | 305 |
1701.831 of the Revised Code or any other provisions in Title XVII | 306 |
of the Revised Code that relate to or affect acquisitions of | 307 |
control or potential or proposed acquisitions of control of the | 308 |
corporation; | 309 |
(e) A decision not to act as a director solely because of | 310 |
the effect that action may have on an acquisition of control or | 311 |
potential or proposed acquisition of control of the corporation or | 312 |
on the consideration that may be offered or paid to shareholders | 313 |
in that acquisition or potential or proposed acquisition. | 314 |
(2)(a) In the absence of a breach of fiduciary duty, lack of | 315 |
good faith, or self-dealing, any act of a director is presumed to | 316 |
be in the best interests of the corporation. In assessing whether | 317 |
the standards set forth in division (B) of this section have been | 318 |
satisfied, there shall not be any greater obligation to justify, | 319 |
or higher burden of proof with respect to, any act as a director | 320 |
relating to or affecting an acquisition of control or potential
or | 321 |
proposed acquisition of control of the corporation than is
applied | 322 |
to any other act as a director. | 323 |
|
(b) Notwithstanding division (C)(2)(a) of this section, any | 324 |
act of a director relating to or affecting an acquisition of | 325 |
control or potential or proposed acquisition of control of the | 326 |
corporation to which a majority of the disinterested directors of | 327 |
the corporation have assented is presumed to satisfy the standards | 328 |
set forth in division (B) of this section, unless it is proved by | 329 |
clear and convincing evidence that the disinterested directors did | 330 |
not assent to that act in good faith after reasonable | 331 |
investigation.
| 332 |
(c) As used in division (C)(2) of this section and for no | 333 |
other purpose, subject to division (C)(2)(d) of this section, | 334 |
"disinterested director" means a director of a corporation other | 335 |
than any of the following: | 336 |
|
(i) A director who has a direct or indirect financial or | 337 |
other interest in the person acquiring or seeking to acquire | 338 |
control of the corporation or who is an affiliate or associate of, | 339 |
as defined in section 1704.01 of the Revised Code, or was | 340 |
nominated or designated as a director by, a person acquiring or | 341 |
seeking to acquire control of the corporation; | 342 |
(ii) Depending upon the specific facts surrounding the | 343 |
director and the act under consideration, an officer or employee | 344 |
or a former officer or employee of the corporation. | 345 |
(d) For purposes of division (C)(2)(c) of this section, a | 346 |
person shall not be considered as other than a disinterested | 347 |
director solely by reason of any or all of the following: | 348 |
(i) The ownership by the director of shares of the | 349 |
corporation; | 350 |
|
(ii) The receipt by the director as a holder of any shares | 351 |
of a class or series of any distribution made to all owners of | 352 |
shares of that class or series; | 353 |
|
(iii) The receipt by the director of director's fees or | 354 |
other consideration as a director; | 355 |
(iv) Any interest that the director may have in retaining | 356 |
the status or position of director; | 357 |
(v) The former business or employment relationship of the | 358 |
director with the corporation; | 359 |
(vi) The receipt of, or the right to receive, retirement or | 360 |
deferred compensation from the corporation due to service as | 361 |
director, officer, or employee of the corporation. | 362 |
(3) A director shall not be considered to be acting in
good | 363 |
faith if the director has knowledge concerning the
matter in | 364 |
question
that would cause reliance on information, opinions, | 365 |
reports, or
statements that are prepared or presented by the | 366 |
persons
described in divisions (B)(1) to (3) of this section to be | 367 |
unwarranted. | 368 |
(3)(4) Nothing contained in
this division
(C) of this | 369 |
section limits relief
available under section 1701.60 of the | 370 |
Revised Code. | 371 |
(D) A director shall be liable in damages for any action | 372 |
that the director takes or fails to take as a director only
if it | 373 |
is proved by
clear and convincing evidence in a court of competent | 374 |
jurisdiction that the director's action or failure to act
involved | 375 |
an act or
omission undertaken with deliberate intent to cause | 376 |
injury to the
corporation or undertaken with reckless disregard | 377 |
for the best
interests of the corporation. Nothing contained in | 378 |
this division
affects the liability of directors under section | 379 |
1701.95 of the
Revised Code or limits relief available under | 380 |
section 1701.60 of
the Revised Code. This division does not apply | 381 |
if, and only to
the extent that, at the time of a director's act | 382 |
or omission that
is the subject of complaint, the articles or the | 383 |
regulations of
the corporation state by specific reference to this | 384 |
division that
the provisions of this division do not apply to the | 385 |
corporation. | 386 |
(E) For purposes of this section, a director, in
determining | 387 |
what the director reasonably believes to be in
the best
interests | 388 |
of the corporation, shall consider the interests of the | 389 |
corporation's shareholders and, in the director's
discretion, may | 390 |
consider
any of the following: | 391 |
(1) The
interests of
effects of any action upon any or all | 392 |
groups affected by that action, including the corporation's | 393 |
employees,
suppliers,
creditors, and customers; | 394 |
(2) The economy of the state and nation; | 395 |
(3) Community and societal considerations; | 396 |
(4) The long-term as well as short-term interests of the | 397 |
corporation and its shareholders, including
the benefits that may | 398 |
accrue to the corporation from its long-term plans and the | 399 |
possibility that
these interests may be best served by the | 400 |
continued independence
of the corporation; | 401 |
(5) The past, stated, and potential resources, intent, and | 402 |
conduct of any person seeking to acquire control of the | 403 |
corporation; | 404 |
(6) All other pertinent factors. | 405 |
(F)
In determining the best interests of a corporation or the | 406 |
effects of any action, a director shall not be required to regard | 407 |
any corporate interest or the interests of any particular group | 408 |
affected by that action as a dominant or controlling interest or | 409 |
factor. The consideration of interests and factors in the manner | 410 |
described in this division and division (E) of this section does | 411 |
not constitute a violation of the duties of a director under | 412 |
division (B) of this section. | 413 |
(G)(1) The duties of a director under division (B) of this | 414 |
section are solely to the corporation and may be enforced directly | 415 |
by the corporation or may be enforced by a shareholder, as such, | 416 |
by an action in the right of the corporation. Those duties may | 417 |
not be enforced directly by a shareholder or by any other person | 418 |
or group. | 419 |
(2) Notwithstanding division (G)(1) of this section, | 420 |
divisions (E) and (F) of this section do not impose upon a | 421 |
director any legal or equitable duties, obligations, or | 422 |
liabilities or create any right or cause of action against, or | 423 |
basis for standing to sue, a director. | 424 |
(H) Nothing contained in division (C) or (D) of this
section | 425 |
affects the duties of either of the following: | 426 |
(1) A director who acts in any capacity other than
the | 427 |
director's
capacity as a director; | 428 |
(2) A director of a corporation that does not have issued | 429 |
and outstanding shares that are listed on a national securities | 430 |
exchange or are regularly quoted in an over-the-counter market by | 431 |
one or more members of a national or affiliated securities | 432 |
association, who votes for or assents to any action taken by the | 433 |
directors of the corporation that, in connection with a change in | 434 |
control of the corporation, directly results in the holder or | 435 |
holders of a majority of the outstanding shares of the
corporation | 436 |
receiving a greater consideration for their shares
than other | 437 |
shareholders. | 438 |
(I) Except as otherwise expressly provided in this section, | 439 |
the articles and regulations may not contain any provision that | 440 |
relaxes, restricts, is inconsistent with, or supersedes any | 441 |
provision of this section. | 442 |
Sec. 1701.70. (A) If initial directors are not named in the | 443 |
articles,
before
subscriptions to shares have
been received
and | 444 |
before the incorporators have elected directors, the incorporators | 445 |
may adopt an amendment to the articles by a writing
signed by | 446 |
them. If initial directors are named in the articles, or if the | 447 |
incorporators have elected directors and have not received | 448 |
subscriptions, then
before subscriptions to shares have been | 449 |
received, the directors may adopt an
amendment to the articles. | 450 |
(B) The directors may adopt an amendment to the articles
in | 451 |
the following cases: | 452 |
(1) When and to the extent authorized by the articles, the | 453 |
directors may adopt an amendment determining, in whole or in part, | 454 |
the
express terms, within the limits set forth in this chapter, of | 455 |
any class of
shares before the issuance of any shares of that | 456 |
class, or of one or more
series within a class before the issuance | 457 |
of shares of that series. | 458 |
(2) When the corporation has issued shares or
obligations | 459 |
convertible into shares of the corporation or has
granted
options | 460 |
issued option rights or securities having conversion or option | 461 |
rights with respect to
the purchase
or acquisition of any shares, | 462 |
and
the conversion
or option rights are
set forth in the articles | 463 |
or have been
approved by the same vote
of shareholders as, at the | 464 |
time of
the
approval, would have been
required to amend the | 465 |
articles to
authorize the shares required
for that purpose, and | 466 |
the
corporation does not have sufficient
authorized but unissued | 467 |
shares to satisfy those conversion or
option rights, the
directors | 468 |
may adopt an amendment to authorize
the
shares. | 469 |
(3) Whenever shares of any class have been redeemed, or
have | 470 |
been surrendered to or acquired by the corporation upon | 471 |
conversion, exchange, purchase, or otherwise, the directors may | 472 |
adopt an amendment to reduce the authorized number of shares of | 473 |
the class by the number so redeemed, surrendered, or
acquired;
and | 474 |
when all of the authorized shares of a class have been
redeemed or | 475 |
surrendered to or acquired by the corporation, the
directors may | 476 |
adopt an amendment to eliminate from the articles
all references | 477 |
to the shares of the class and to make
other
appropriate changes | 478 |
that are required by
the elimination. | 479 |
(4) When articles have been amended and any change of
issued | 480 |
or unissued shares provided for in the amendment or
amended | 481 |
articles has become effective, the directors
may
adopt an | 482 |
amendment to eliminate from the articles all references
to the | 483 |
change of shares and to make any other appropriate
changes that | 484 |
are required by the
elimination; however,
an amendment to
the | 485 |
articles
that is so adopted by the
directors shall
contain a | 486 |
statement with
respect to the authorized number and the par
value, | 487 |
if any, of the
shares of each class. | 488 |
(5) After a merger or consolidation, in which the
surviving | 489 |
or new corporation is a domestic corporation, becomes
effective, | 490 |
the directors may adopt an
amendment: | 491 |
(a) To eliminate from the articles any statement or | 492 |
provision pertaining exclusively to the merger or consolidation, | 493 |
or that was required to be set forth in the agreement of
merger
or | 494 |
consolidation and that would not be required in
original articles | 495 |
or amendments to articles filed at the time
the statement or | 496 |
provision was adopted; | 497 |
(b) To make any other appropriate changes required by
that | 498 |
elimination. | 499 |
An amendment to
the articles adopted by the directors under | 500 |
division
(B)(5) of this section need not contain or continue any | 501 |
statement with respect to the amount of stated capital. | 502 |
(C) If a vote on the adoption of an
amendment is required by | 503 |
division (B)(4) of section 1701.71 of
the Revised Code, any | 504 |
amendment to the
articles adopted pursuant to division (B) of this | 505 |
section that
creates a class or series of shares the express terms | 506 |
of which
provide for the convertibility of the shares into shares | 507 |
of
another class shall also require the approval of the holders, | 508 |
voting as a class, of any issued and outstanding shares into which | 509 |
the shares
may be converted. | 510 |
Sec. 1701.75. (A) A corporation, a plan of reorganization | 511 |
of which shall
have been confirmed by the decree or order of a | 512 |
court of competent
jurisdiction pursuant to the provisions of any | 513 |
applicable statute of the
United States relating to reorganization | 514 |
of corporations, may put into effect
and carry out the plan and | 515 |
the decrees and orders of the court relative
thereto
to the plan, | 516 |
and may take
any proceeding and do any act provided in the plan or | 517 |
directed by
such decrees and orders, without further action by its | 518 |
directors
or shareholders.
Such
That authority may be exercised, | 519 |
and
such
those proceedings and
acts may be taken or done, as | 520 |
directed by such
decrees or orders, by the
trustee or trustees of | 521 |
such
the corporation
appointed in the reorganization
proceedings | 522 |
(or a majority
thereof), or if none shall have been appointed, by | 523 |
designated
officers of the corporation, or by a master or other | 524 |
representative
appointed by the court, with like effect as if | 525 |
exercised and taken by
unanimous action of the directors and | 526 |
shareholders of the corporation. | 527 |
(B) A corporation, in the manner provided in division (A) of | 528 |
this section,
but without limiting the generality thereof, may: | 529 |
amend its articles in any
respect; amend or repeal its regulations | 530 |
or adopt new regulations; name,
constitute, reconstitute, | 531 |
classify, or reclassify its directors and appoint
directors and | 532 |
officers in place of or in addition to some or all of the | 533 |
directors or officers then in office; make any lawful change in | 534 |
its stated
capital; make a determination of the fair value to the | 535 |
corporation of its
assets; transfer all or a part of its assets; | 536 |
merge; consolidate; remove or
appoint a statutory agent; authorize | 537 |
the
granting
issuance of option rights
or securities having | 538 |
conversion or option rights in respect
of shares and other | 539 |
securities; authorize the issuing of notes, bonds, and
other | 540 |
evidences of indebtedness, whether or not convertible into shares | 541 |
or
other securities; lease its property to any corporation; | 542 |
dissolve; or effect
any other change authorized by this chapter. | 543 |
(C) If a plan of reorganization provides for or effects an | 544 |
amendment to the
articles or the merger, consolidation, or | 545 |
dissolution of a corporation, or if
a plan having such a result is | 546 |
modified in respect of
such
that amendment, merger,
consolidation, | 547 |
or
dissolution, a certificate of reorganization or an amended | 548 |
certificate of
reorganization, as the case may be, setting forth | 549 |
such portions of the plan
of reorganization or modification | 550 |
thereof
of the plan as would otherwise be required to be
set forth | 551 |
in a
certificate of amendment, an agreement of merger or | 552 |
consolidation,
or a certificate of dissolution (and, if desired, | 553 |
any other
portions thereof) shall be filed in the office of the | 554 |
secretary of
state and
shall operate to effect
such
that | 555 |
amendment, merger,
consolidation, or dissolution.
Such
The | 556 |
certificate shall be made,
subscribed, and filed as may be | 557 |
directed by
such decrees or
orders
of the court, or, in the | 558 |
absence of such direction, by the
president or
a vice-president | 559 |
and the secretary or an assistant secretary.
The
certificate | 560 |
shall contain a statement that the plan of
reorganization has
been | 561 |
confirmed by the decree or order of the
court designated in the | 562 |
certificate or that the plan so confirmed
has been modified by | 563 |
order of such
court, as the case may be. | 564 |
(D) If after the filing in the office of the secretary of | 565 |
state of a
certificate of reorganization, or an amended | 566 |
certificate, a decree or order of
court is entered
which
that has | 567 |
the
effect of vacating
said
that plan, a certified copy
of
said | 568 |
the decree or
order shall be filed by the corporation in the | 569 |
office of the
secretary of state. | 570 |
(E) Nonassenting or dissenting shareholders shall have only | 571 |
such rights as are
provided for in the plan of reorganization. | 572 |
Section 2. That existing sections 1701.15, 1701.16, 1701.17, | 573 |
1701.35, 1701.59, 1701.70, and 1701.75 of the Revised Code are | 574 |
hereby repealed. | 575 |
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