Ohio § 1701.22

§ 1701.22.

(A) Unless the articles otherwise provide, a corporation by its directors may, subject

to the provisions of this section, confer on the holder of any obligations of the

corporation the right to convert such obligations into shares of any authorized class

or series, on such terms as are set forth in the instrument evidencing such conversion

rights.  Such terms may include any statements not repugnant to law for the protection of

such conversion rights, including, but without limiting the generality of such authority:

 restrictions upon the authorization or issuance of additional shares;  provisions

for the adjustment of the conversion price or ratio;  provisions concerning rights

in the event of reorganization, merger, consolidation, or lease, sale, exchange, transfer,

or other disposition of all, or substantially all, of the assets of the corporation;

 provisions for the reservation of authorized but unissued shares to satisfy such

conversion rights;  and restrictions upon the declaration or payment of dividends

or distributions.  Such terms may also include statements, not inconsistent with the provisions of section 1701.30 of the Revised Code , to provide that upon the exercise of conversion rights the stated capital of the

corporation shall be created or increased in the manner, at the rate, or to the extent

provided therein. (B) If the shares into which such obligations are convertible would be subject to pre-emptive

rights if issued for cash, the conferring of the conversion rights must be authorized

by such vote or consent of the shareholders or holders of shares of particular classes

as would then be required to waive or release such pre-emptive rights;  and such vote

or consent shall release the pre-emptive rights to the shares required to satisfy

such conversion rights if and when exercised. (C) If at the time of conferring such conversion rights the corporation does not have

authorized and unissued shares sufficient to satisfy such rights if and when exercised,

the conferring of such rights must be authorized by such vote of the shareholders

or holders of shares of particular classes as would then be required to adopt an amendment

to the articles for the purpose of increasing the authorized number of such shares,

and the shares required to be issued upon the exercise of such conversion rights shall

be provided by an amendment concurrently or thereafter adopted by the shareholders

or the directors. (D) The corporation shall not issue any obligations which are convertible into shares

having an aggregate par value greater than the principal amount of such obligations,

unless in each case immediately after the issuing of any of the convertible obligations,

the corporation will have a surplus not less in amount than the excess of the aggregate

par value of all the shares into which such convertible obligations may be converted

over the aggregate principal amount of the outstanding convertible obligations;  and

during the entire period that such conversion rights may be exercised, the corporation

shall reserve, from its surplus, solely for transfer to stated capital upon the exercise

of such conversion rights an amount equal at the time to the excess of the aggregate

par value of all the shares into which the then outstanding convertible obligations

may be converted over the aggregate principal amount of such convertible obligations;

 provided that the failure or inability of the corporation to maintain such reserve

shall not affect the conversion rights of any outstanding convertible obligations.