To amend sections 1701.15, 1701.16, 1701.17, 1701.35, 1701.59, 1701.70, and 1701.75 of the Revised Code relative to the authority of a corporation to issue option rights or securities having conversion or option rights with respect to shares, the acts of a director of a corporation relating to an acquisition or potential or proposed acquisition of control of the corporation, and the general duties of a director of a corporation.

Section 1. That sections 1701.15, 1701.16, 1701.17, 1701.35, 1701.59, 1701.70, and 1701.75 of the Revised Code be amended to read as follows:

Sec. 1701.15.  (A) 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 that are limited as to dividend or distribution rate and liquidation price, 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 the shares in proportion to their respective holdings of shares of such class, at a price fixed as provided in 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 option rights or conversion rights issued 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 those shareholders, and thereupon issued or agreed to be issued for a consideration not less than that at which the shares were so offered to such those shareholders, less reasonable expenses, compensation, or discount paid or allowed for the sale, underwriting, or purchase of the shares, unless by the affirmative vote or written order of the holders of two-thirds of the shares otherwise entitled to the pre-emptive rights, the pre-emptive rights are restored as to any of the shares not 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 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 the vote or consent up to but not exceeding one year, and shall protect all persons who within 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 the pre-emptive rights, for offering and sale, or the grant of options issuance of option rights or securities having conversion or option rights with respect thereto to those shares, 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 the cause of action informing the shareholder of the transaction giving rise to the cause of action, and no action shall in any event be brought upon any cause of action of that nature at any time after four years from the day on which 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 March 17, 2000, shall continue to apply to any corporation incorporated prior to the effective date of this amendment March 17, 2000, 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 March 17, 2000, apply to the corporation or amended articles of incorporation.

Sec. 1701.16.  (A) Unless the articles otherwise provide, a corporation by its directors may grant options to subscribe for or create and issue option rights or securities having conversion or option rights that entitle the holders of the securities to purchase or acquire shares of any authorized class, option rights, securities having conversion or option rights, or obligations, of any class or series, or assets of the corporation, or to purchase or acquire from the corporation shares, option rights, securities having conversion or option rights, or obligations, of any class or series, owned by the corporation and issued by any other person, at the times and on the terms that are set forth in the securities, or in the contracts, warrants, or other instruments that evidence the options, which evidencing those option rights, securities having conversion or option rights, or obligations. Those contracts, warrants, or other instruments may be transferable or nontransferable and may be separable or inseparable from securities, upon the following conditions:

(1) If the shares are subject to preemptive pre-emptive rights and if the options option rights or securities having conversion or option rights are not granted issued to shareholders in satisfaction of their preemptive pre-emptive rights, the granting issuance of the options must option rights or securities having conversion or option rights shall be authorized by the vote or consent of the shareholders or holders of shares of particular classes that then would be required to waive or release such preemptive those pre-emptive rights. The vote or consent shall release the preemptive pre-emptive rights to the shares required to satisfy the options option or conversion rights if and when exercised.

(2) If, at the time of granting issuing the options option rights or securities having conversion or option rights, the corporation does not have authorized and unissued shares sufficient to satisfy the options option or conversion rights if and when exercised, the granting issuance of the options must option rights or securities having conversion or option rights shall be authorized by the vote of the shareholders or holders of shares of particular classes that then would be required to adopt an amendment to the articles for the purpose of increasing the authorized number of such those shares, and the. The shares required to be issued upon the exercise of the options option or conversion rights shall be provided by an amendment concurrently or thereafter adopted by the shareholders or the directors.

(B)(1) The securities, contracts, warrants, or other instruments that evidence the options evidencing any option rights, securities having conversion or option rights, or obligations of a corporation may contain any terms not repugnant to law that are fixed by the board of directors for the protection of the holders of the options option rights, securities having conversion or option rights, or obligations of the corporation, including, but not limited to, the following:

(a) Restrictions upon the authorization or issuance of additional shares, option rights, securities having conversion or option rights, or obligations;

(b) Provisions for the adjustment of the conversion or option rights price;

(c) Provisions concerning rights or adjustments in the event of reorganization, merger, consolidation, or sale of the entire assets of the corporation, exchange of shares, or other fundamental changes;

(d) Provisions for the reservation of authorized but unissued shares or other securities to satisfy the options option or conversion rights;

(e) Restrictions upon the declaration or payment of dividends or distributions or related party transactions;

(f) Conditions on the exercise of the options, including, but not limited to, subject to the limitation specified in division (B)(2) of this section, conditions that preclude the holder or holders of at least or limit any person or persons owning or offering to acquire a specified number or percentage of the outstanding common shares, other shares, option rights, securities having conversion or option rights, or obligations of a the corporation or any transferee or transferees of the person or persons from exercising the options, converting, transferring, or receiving the shares, option rights, securities having conversion or option rights, or obligations of the corporation, including conditions that limit or condition the right of directors who are not disinterested directors, as defined in division (C)(2)(c) of section 1701.59 of the Revised Code, to modify or redeem the shares, option rights, securities having conversion or option rights, or obligations.

(2) The express or implied authority conferred by division (B)(1) of this section or any other section of this chapter for securities, contracts, warrants, or other instruments that evidence options evidencing option rights, securities having conversion or option rights, or obligations of a corporation to contain a condition on the exercise of options that precludes the holder or holders of at least a specified number or percentage of the outstanding common shares of a corporation from exercising options as described in division (B)(1)(f) of this section shall apply only to the following:

(a) A corporation that has issued and outstanding shares listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national or affiliated securities association;

(b) A corporation that has adopted a close corporation agreement pursuant to which options option rights or securities having conversion or option rights are granted issued, if the securities, contracts, warrants, or other instruments that evidence the options evidencing the option rights, securities having conversion or option rights, or obligations of the corporation contain a condition that precludes the holder or holders of at least a specified number or percentage of the outstanding common shares of that corporation from exercising the options as described in division (B)(1)(f) of this section.

(C) As used in this section, "securities" includes obligations and shares of the corporation.

Sec. 1701.17.  A corporation by its directors, upon such any terms as that it may impose, may provide and carry out plans for the offering or sale, or the grant of options issuance of option rights or securities having conversion or option rights, to employees of the corporation or of subsidiary corporations, or to a trustee on their behalf, during the period of their employment or other period, of, or with respect to, any unissued shares, treasury shares, or shares to be purchased, which. Those plans may provide for the payment for such shares at one time or in installments, or for the establishment of special funds in which employees may participate. Shares otherwise subject to pre-emptive rights may be offered or sold under such those plans only when released from pre-emptive rights.

Sec. 1701.35.  (A) A corporation by its directors may purchase shares of any class issued by it, in any of the following instances:

(1) When the articles authorize the redemption of such those shares and do not prohibit such purchase;

(2) To collect or compromise a debt, claim, or controversy in good faith;

(3) From a subscriber whose shares have not been paid for in full, or in settlement or compromise of a subscription;

(4) For offering and sale, or the grant of options issuance of option rights or securities having conversion or option rights with respect thereto to those shares, to any or all of the employees of the corporation or of subsidiary corporations or to a trustee on their behalf, under any plan adopted or to be adopted by the directors for that purpose;

(5) From a person who has purchased such those shares from the corporation under an agreement reserving to the corporation the right to repurchase or obligating it to repurchase;

(6) To avoid the issuance of or to eliminate fractional shares;

(7) When the articles in substance provide that the corporation shall have a right to repurchase if and when any shareholder desires to, or on the happening of any event is required to, sell such those shares;

(8) From a shareholder who by reason of dissent is entitled to be paid the fair cash value of his the shareholder's shares;

(9) When authorized by the shareholders at a meeting called for such purpose, by the affirmative vote of the holders of two-thirds of the shares of each class, regardless of limitations or restrictions in the articles on the voting rights of the shares of any such class, or if the articles so provide or permit, a greater or lesser proportion, but not less than a majority, of the shares of any class;

(10) When authorized by the articles or by such vote or consent of holders of such proportion of shares, though less than a majority, of any one or more classes as is provided in the articles.

(B) A corporation shall not purchase its own shares except as provided in this section, nor shall a corporation purchase or redeem its own shares if immediately thereafter its assets would be less than its liabilities plus its stated capital, if any, or if the corporation is insolvent, or if there is reasonable ground to believe that by such purchase or redemption it would be rendered insolvent.

(C) Shares issued by a corporation which that owns or controls shares entitling it to elect a majority of the directors of another corporation may be purchased by such last mentioned corporation only when and if such those shares could be purchased by the issuing corporation pursuant to division (A)(9) or (10) of this section.

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 the director's duties as a director, including the duties as a member of any committee of the directors upon which the director may serve, in good faith, in a manner 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 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 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 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 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 or a decision not to redeem any rights under, or to modify or render inapplicable, any shareholder rights plan, including, but not limited to, a plan adopted with the conditions described in division (B)(1)(f) of section 1701.16 of the Revised Code;

(b) A termination or potential termination of the director's service to the corporation as a director;

(c) The director's service in any other position or relationship with the corporation;

(d) A decision not to render inapplicable, or to make determinations under, the provisions of Chapter 1704. or section 1701.831 of the Revised Code or any other provisions in Title XVII of the Revised Code that relate to or affect acquisitions of control or potential or proposed acquisitions of control of the corporation;

(e) A decision not to act as a director solely because of the effect that action may have on an acquisition of control or potential or proposed acquisition of control of the corporation or on the consideration that may be offered or paid to shareholders in that acquisition or potential or proposed acquisition.

(2)(a) In the absence of a breach of fiduciary duty, lack of good faith, or self-dealing, any act of a director is presumed to be in the best interests of the corporation. In assessing whether the standards set forth in division (B) of this section have been satisfied, there shall not be any greater obligation to justify, or higher burden of proof with respect to, any act as a director relating to or affecting an acquisition of control or potential or proposed acquisition of control of the corporation than is applied to any other act as a director.

(b) Notwithstanding division (C)(2)(a) of this section, any act of a director relating to or affecting an acquisition of control or potential or proposed acquisition of control of the corporation to which a majority of the disinterested directors of the corporation have assented is presumed to satisfy the standards set forth in division (B) of this section, unless it is proved by clear and convincing evidence that the disinterested directors did not assent to that act in good faith after reasonable investigation.

(c) As used in division (C)(2) of this section and for no other purpose, subject to division (C)(2)(d) of this section, "disinterested director" means a director of a corporation other than any of the following:

(i) A director who has a direct or indirect financial or other interest in the person acquiring or seeking to acquire control of the corporation or who is an affiliate or associate of, as defined in section 1704.01 of the Revised Code, or was nominated or designated as a director by, a person acquiring or seeking to acquire control of the corporation;

(ii) Depending upon the specific facts surrounding the director and the act under consideration, an officer or employee or a former officer or employee of the corporation.

(d) For purposes of division (C)(2)(c) of this section, a person shall not be considered as other than a disinterested director solely by reason of any or all of the following:

(i) The ownership by the director of shares of the corporation;

(ii) The receipt by the director as a holder of any shares of a class or series of any distribution made to all owners of shares of that class or series;

(iii) The receipt by the director of director's fees or other consideration as a director;

(iv) Any interest that the director may have in retaining the status or position of director;

(v) The former business or employment relationship of the director with the corporation;

(vi) The receipt of, or the right to receive, retirement or deferred compensation from the corporation due to service as director, officer, or employee of the corporation.

(3) A director shall not be considered to be acting in good faith if 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)(4) Nothing contained in this division (C) of this section limits relief available under section 1701.60 of the Revised Code.

(D) A director shall be liable in damages for any action 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 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 the director reasonably believes to be in the best interests of the corporation, shall consider the interests of the corporation's shareholders and, in the director's discretion, may consider any of the following:

(1) The interests of effects of any action upon any or all groups affected by that action, including 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 benefits that may accrue to the corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the corporation;

(5) The past, stated, and potential resources, intent, and conduct of any person seeking to acquire control of the corporation;

(6) All other pertinent factors.

(F) In determining the best interests of a corporation or the effects of any action, a director shall not be required to regard any corporate interest or the interests of any particular group affected by that action as a dominant or controlling interest or factor. The consideration of interests and factors in the manner described in this division and division (E) of this section does not constitute a violation of the duties of a director under division (B) of this section.

(G)(1) The duties of a director under division (B) of this section are solely to the corporation and may be enforced directly by the corporation or may be enforced by a shareholder, as such, by an action in the right of the corporation. Those duties may not be enforced directly by a shareholder or by any other person or group.

(2) Notwithstanding division (G)(1) of this section, divisions (E) and (F) of this section do not impose upon a director any legal or equitable duties, obligations, or liabilities or create any right or cause of action against, or basis for standing to sue, a director.

(H) 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 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.

(I) Except as otherwise expressly provided in this section, the articles and regulations may not contain any provision that relaxes, restricts, is inconsistent with, or supersedes any provision of this section.

Sec. 1701.70.  (A) If initial directors are not named in the articles, before subscriptions to shares have been received 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 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 has issued shares or obligations convertible into shares of the corporation or has granted options issued option rights or securities having conversion or option rights with respect to the purchase or acquisition of any shares, and 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 the approval, would have been required to amend the articles to authorize the shares required for that purpose, and the corporation does not have sufficient authorized but unissued shares to satisfy those conversion or option rights, the directors may adopt an amendment to authorize 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 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 the class and to make other appropriate changes that are required by the elimination.

(4) When articles have been amended and any change of issued or unissued shares provided for in the amendment or amended articles has become effective, the directors may adopt an amendment to eliminate from the articles all references to the change of shares and to make any other appropriate changes that are required by the elimination; however, an amendment to the 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, 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 any other appropriate changes required by that elimination.

An amendment to the 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. 1701.75.  (A) A corporation, a plan of reorganization of which shall have been confirmed by the decree or order of a court of competent jurisdiction pursuant to the provisions of any applicable statute of the United States relating to reorganization of corporations, may put into effect and carry out the plan and the decrees and orders of the court relative thereto to the plan, and may take any proceeding and do any act provided in the plan or directed by such decrees and orders, without further action by its directors or shareholders. Such That authority may be exercised, and such those proceedings and acts may be taken or done, as directed by such decrees or orders, by the trustee or trustees of such the corporation appointed in the reorganization proceedings (or a majority thereof), or if none shall have been appointed, by designated officers of the corporation, or by a master or other representative appointed by the court, with like effect as if exercised and taken by unanimous action of the directors and shareholders of the corporation.

(B) A corporation, in the manner provided in division (A) of this section, but without limiting the generality thereof, may: amend its articles in any respect; amend or repeal its regulations or adopt new regulations; name, constitute, reconstitute, classify, or reclassify its directors and appoint directors and officers in place of or in addition to some or all of the directors or officers then in office; make any lawful change in its stated capital; make a determination of the fair value to the corporation of its assets; transfer all or a part of its assets; merge; consolidate; remove or appoint a statutory agent; authorize the granting issuance of option rights or securities having conversion or option rights in respect of shares and other securities; authorize the issuing of notes, bonds, and other evidences of indebtedness, whether or not convertible into shares or other securities; lease its property to any corporation; dissolve; or effect any other change authorized by this chapter.

(C) If a plan of reorganization provides for or effects an amendment to the articles or the merger, consolidation, or dissolution of a corporation, or if a plan having such a result is modified in respect of such that amendment, merger, consolidation, or dissolution, a certificate of reorganization or an amended certificate of reorganization, as the case may be, setting forth such portions of the plan of reorganization or modification thereof of the plan as would otherwise be required to be set forth in a certificate of amendment, an agreement of merger or consolidation, or a certificate of dissolution (and, if desired, any other portions thereof) shall be filed in the office of the secretary of state and shall operate to effect such that amendment, merger, consolidation, or dissolution. Such The certificate shall be made, subscribed, and filed as may be directed by such decrees or orders of the court, or, in the absence of such direction, by the president or a vice-president and the secretary or an assistant secretary. The certificate shall contain a statement that the plan of reorganization has been confirmed by the decree or order of the court designated in the certificate or that the plan so confirmed has been modified by order of such court, as the case may be.

(D) If after the filing in the office of the secretary of state of a certificate of reorganization, or an amended certificate, a decree or order of court is entered which that has the effect of vacating said that plan, a certified copy of said the decree or order shall be filed by the corporation in the office of the secretary of state.

(E) Nonassenting or dissenting shareholders shall have only such rights as are provided for in the plan of reorganization.

Section 2. That existing sections 1701.15, 1701.16, 1701.17, 1701.35, 1701.59, 1701.70, and 1701.75 of the Revised Code are hereby repealed.