Ohio § 1704.01

§ 1704.01.

As used in this chapter, unless the context otherwise requires: (A) “Corporation,” “domestic corporation,” “foreign corporation,” “state,” “articles,”

“shareholder,” “person,” “principal office,” “express terms,” “treasury shares,” “parent

corporation,” “parent,” “subsidiary corporation,” “subsidiary,” “combination,” “transferee

corporation,” “majority share acquisition,” “acquiring corporation,” “voting shares”

when used in connection with a combination or majority share acquisition, “constituent

corporation,” “surviving corporation,” “close corporation agreement,” and “issuing

public corporation” have the same meanings as in section 1701.01 of the Revised Code . (B) “ Chapter 1704. transaction ” means any of the following: (1) A merger, consolidation, combination, or majority share acquisition between or involving

an issuing public corporation or any subsidiary of an issuing public corporation and

any of the following: (a) An interested shareholder; (b) A person, partnership, corporation, or other entity, however organized, whether or

not it is an interested shareholder, that is, or after the merger, consolidation,

combination, or majority share acquisition would be, an affiliate or associate of

an interested shareholder. (2)(a) Subject to the exception in division (B)(2)(b) of this section, a purchase, lease,

sale, distribution, dividend, exchange, mortgage, pledge, transfer, or other disposition

of assets, directly or indirectly owned or controlled by the issuing public corporation,

by, to, with, or for the benefit of an interested shareholder or an affiliate or associate

of an interested shareholder in one or more transactions, if, in any of those transactions,

the assets meet any of the following conditions: (i) The assets have an aggregate fair market value equal to at least five per cent of

the aggregate fair market value of all the assets, determined on a consolidated basis,

of the issuing public corporation; (ii) The assets have an aggregate fair market value equal to at least five per cent of

the aggregate fair market value of all the outstanding shares of the issuing public

corporation; (iii) The assets represent at least ten per cent of the earning power or income of the

issuing public corporation, determined on a consolidated after-tax basis and after

excluding any transaction other than in the ordinary course of business. (b) One or more transactions in the ordinary course of business of an issuing public

corporation on terms no more favorable to the interested shareholder than those acceptable

to third parties, as shown by contemporaneous transactions, is not a Chapter 1704.

transaction under division (B)(2)(a) of this section. (3)(a) Subject to the exception in division (B)(3)(b) of this section, a purchase, lease,

sale, exchange, transfer, or other disposition of assets directly or indirectly owned

or controlled by the interested shareholder or an affiliate or associate of the interested

shareholder, by, to, with, or for the benefit of the issuing public corporation in

one or more transactions, if, in any of those transactions, the assets meet any of

the conditions set forth in division (B)(2)(a)(i), (ii), or (iii) of this section. (b) One or more transactions in the ordinary course of business of an issuing public

corporation on terms no more favorable to the interested shareholder than those acceptable

to third parties, as shown by contemporaneous transactions, is not a Chapter 1704.

transaction under division (B)(3)(a) of this section. (4) The issuance or transfer to an interested shareholder or an associate or affiliate

of an interested shareholder of any shares, or of any rights to acquire shares, of

the issuing public corporation or a subsidiary of the issuing public corporation by

the issuing public corporation or a subsidiary of the issuing public corporation,

in one or more transactions, if the shares, or the rights, have an aggregate fair

market value equal to at least five per cent of the aggregate fair market value of

all the outstanding shares of the issuing public corporation and if the shares, or

the rights, are not issued or transferred pursuant to the exercise of warrants, rights,

or options to purchase that have been issued, or pursuant to a dividend paid or a

distribution made, proportionately to all shareholders of the issuing public corporation. (5) The adoption of a plan or proposal for the dissolution, winding up of the affairs,

or liquidation of the issuing public corporation that is proposed by, on behalf of,

or pursuant to a written or unwritten agreement, arrangement, or understanding with

an interested shareholder or an affiliate or associate of an interested shareholder. (6) Any of the following, if the direct or indirect effect is to increase the proportionate

share of the outstanding shares of the issuing public corporation or a subsidiary

of the issuing public corporation beneficially owned by an interested shareholder

or an affiliate or associate of an interested shareholder, unless the increase is

the result of immaterial changes due to fractional share adjustments: (a) A reclassification of securities, including a share split, a share dividend or other

distribution of shares, or a reverse share split; (b) A recapitalization of the issuing public corporation; (c) A merger, consolidation, combination, or majority share acquisition between or involving

the issuing public corporation and a subsidiary of the issuing public corporation; (d) Any other transaction, whether or not with, into, or involving the interested shareholder,

that is proposed by, on behalf of, or pursuant to a written or unwritten agreement,

arrangement, or understanding with the interested shareholder or an affiliate or associate

of the interested shareholder. (7) Receipt by an interested shareholder or an affiliate or associate of an interested

shareholder of the direct or indirect benefit of a loan, advance, pension or any other

employee benefit plan termination, guarantee, pledge, mortgage, security agreement,

financing statement, deed of trust, or other financial assistance, or a tax credit

or other tax advantage, provided by or through the issuing public corporation or any

subsidiary of the issuing public corporation unless the interested shareholder receives

the benefit proportionately as a holder of shares of the issuing public corporation. (C) When used in connection with a Chapter 1704. transaction: (1) “ Affiliate ” means a person that directly, or indirectly through one or more intermediaries,

controls, is controlled by, is under common control with, or acts in concert with,

a specified person. (2) “ Announcement date ” means the date of the first public announcement of a definitive proposal for a Chapter

1704. transaction. (3) “ Associate ” of a person means any of the following: (a) A corporation, partnership, or other entity, however organized, of which the person

is an officer, director, or partner or is the beneficial owner of shares entitling

that person to exercise at least ten per cent of the voting power in the election

of the directors or other governing body of that corporation, partnership, or other

entity; (b) A trust or other estate, including any employee stock ownership or benefit plan,

however designated, in which the person has a substantial beneficial interest or as

to which the person serves as trustee or in a similar fiduciary capacity; (c) A relative or spouse of the person, or a relative of the spouse of the person, who

has the same principal residence as the person. (4) “ Beneficial owner ” of shares means a person who, with respect to particular shares, meets any of the

following conditions: (a) The person directly or indirectly, alone or with others, including affiliates or

associates of that person, beneficially owns the shares; (b) The person directly or indirectly, alone or with others, including affiliates or

associates of that person, has the right, whether exercisable immediately or only

after the passage of time, conditionally, unconditionally, or otherwise, to acquire

the shares pursuant to a written or unwritten agreement, arrangement, or understanding

or upon the exercise of conversion rights, exchange rights, warrants, calls, options,

or otherwise; (c) The person directly or indirectly, alone or with others, including affiliates or

associates of that person, has the right to vote or direct the voting of the shares

pursuant to a written or unwritten agreement, arrangement, or understanding; (d) The person has a written or unwritten agreement, arrangement, or understanding with

another person who is directly or indirectly a beneficial owner, or whose affiliates

or associates are direct or indirect beneficial owners, of the shares, if the agreement,

arrangement, or understanding is for the purpose of the first person's or the other

person's acquiring, holding, disposing of, voting, or directing the voting of the

shares to or for the benefit of the first person.  A bank, broker, nominee, trustee, or other person who acquires shares for the benefit

of others in the ordinary course of business in good faith and not for the purpose

of circumventing the provisions of this chapter shall, however, be deemed to be the

beneficial owner only of shares in respect of which that person, without further instruction

from others, holds voting power. (5) “ Consummation date ” means the date on which consummation of a Chapter 1704. transaction occurs. (6) “ Control ,” “ controlled by ,” or “ under common control with ” refers to the possession, directly or indirectly, of the power to direct or cause

the direction of the management and policies of a person, whether through the exercise

of or the ability to exercise voting power, by contract, or otherwise, except that

“control” of a corporation is not established for purposes of this division if a person,

in good faith and not for the purpose of circumventing the provisions of this chapter,

holds voting power as an agent, custodian, bank, broker, nominee, or trustee for one

or more beneficial owners who do not individually or as a group have control of the

corporation. (7) “ Exchange Act ” means the “Securities Exchange Act of 1934,” 48 Stat. 881, 15 U.S.C.A. 78a - 78jj , as amended, and any successor or replacement legislation and amendments to the successor

or replacement legislation. (8) “ Interested shareholder ,” with respect to an issuing public corporation, means a person other than the issuing

public corporation, a subsidiary of that issuing public corporation, any employee

stock ownership or benefit plan of the issuing public corporation or a subsidiary

of that issuing public corporation, or any trustee or fiduciary with respect to any

such plan acting in such capacity who meets either of the following criteria: (a) Is the beneficial owner of a sufficient number of shares of the issuing public corporation

that, when added to all other shares of the issuing public corporation in respect

of which that person may exercise or direct the exercise of voting power, would entitle

that person, directly or indirectly, alone or with others, including affiliates and

associates of that person, to exercise or direct the exercise of ten per cent of the

voting power of the issuing public corporation in the election of directors after

taking into account all of that person's beneficially owned shares that are not currently

outstanding; (b) At any time within the three-year period immediately prior to the date on which it

is sought to be determined whether the person is an interested shareholder, was the

beneficial owner of a sufficient number of shares of the issuing public corporation

that, when added to all other shares of the issuing public corporation in respect

of which that person may have exercised or directed the exercise of voting power at

the time it beneficially owned such shares, entitled that person, directly or indirectly,

alone or with others, including affiliates and associates of that person, to exercise

or direct the exercise of ten per cent of the voting power of the issuing public corporation

in election of directors after taking into account all of the person's beneficially

owned shares that were not, at the time it beneficially owned such shares, currently

outstanding. (9) “ Disinterested shares ” means voting shares beneficially owned by any person not an interested shareholder

or an affiliate or associate of an interested shareholder. (10) “ Share acquisition date ,” with respect to any person, means the date on which that person first becomes an

interested shareholder of an issuing public corporation. (11) “ Voting shares ” means shares of a domestic or foreign corporation, entitling the holder of the shares

to vote at the time in the election of directors of the corporation without regard

to the voting power represented by shares that thereafter may exist upon a default,

failure, or other contingency.