Ohio § 1704.05

§ 1704.05.

This chapter does not apply to any of the following: (A) A Chapter 1704. transaction if on the interested shareholder's share acquisition

date, the issuing public corporation, other than a bank as defined in section 1101.01 of the Revised Code , did not have a class of voting shares registered or traded on a national securities

exchange or registered under section 12(g) of the Exchange Act or was not required

to file periodic reports and information pursuant to section 15(d) of the Exchange

Act. (B)(1) A Chapter 1704. transaction if the interested shareholder was an interested shareholder

on the date immediately preceding the effective date of this section;  except that

this chapter shall apply, and the share acquisition date shall be the date, when the

interested shareholder increases its beneficial ownership of voting power of the issuing

public corporation to a proportion in excess of the proportion of voting power that

the interested shareholder beneficially owned on the date immediately preceding the

effective date of this section unless the interested shareholder's subsequent increase

in beneficial ownership results from or is the consequence of any of the following

circumstances: (a) The increase is by bequest or inheritance, by operation of law upon the death of

any individual, or by any other transfer without valuable consideration, including

a gift, that is made in good faith and not for the purpose of circumventing the provisions

of this chapter; (b) The increase is pursuant to the satisfaction of a pledge or other security interest

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

chapter; (c) The increase is the result solely of the purchase by the issuing public corporation

of shares issued by it; (d) The increase is in accordance with approval by the directors of the issuing public

corporation before the increase occurred. (2) If this chapter would have applied to the increase of beneficial ownership described

in division (B)(1) of this section but for the application of an exception described

in division (B)(1)(a), (b), (c), or (d) of this section, this chapter shall apply

if the interested shareholder's subsequent increase in its proportion of beneficial

ownership is not the result or a consequence of any of the circumstances described

in division (B)(1)(a), (b), (c), or (d) of this section. (C) A Chapter 1704. transaction if the interested shareholder was an interested shareholder

on the date immediately preceding the effective date of this section and inadvertently

increases its beneficial ownership of voting power of the issuing public corporation

to a proportion in excess of the proportion of voting power that the interested shareholder

beneficially owned on the date immediately preceding the effective date of this section,

provided that, as soon as practicable, the interested shareholder divests itself of

beneficial ownership of a sufficient number of voting shares of the issuing public

corporation that the interested shareholder is no longer the beneficial owner of a

proportion of voting power in excess of the proportion of voting power that the interested

shareholder beneficially owned on the date immediately preceding the effective date

of this section. (D)(1) A Chapter 1704. transaction if a person becomes an interested shareholder through

an acquisition of voting shares that resulted from or was the consequence of any of

the circumstances described in division (B)(1)(a), (b), (c), or (d) of this section,

except that this chapter shall apply, and the share acquisition date shall be the

date, when the interested shareholder increases its beneficial ownership of voting

power of the issuing public corporation to a proportion in excess of the proportion

of voting power that the interested shareholder beneficially owned on the date on

which it became an interested shareholder unless the interested shareholder's subsequent

increase in beneficial ownership results from or is a consequence of any of the circumstances

described in division (B)(1)(a), (b), (c), or (d) of this section. (2) If this chapter would have applied to the acquisition of voting shares described

in division (D)(1) of this section but for the application of an exception described

in division (B)(1)(a), (b), (c), or (d) of this section, this chapter shall apply

if the interested shareholder's subsequent increase in its proportion of beneficial

ownership is not the result or a consequence of any of the circumstances described

in division (B)(1)(a), (b), (c), or (d) of this section. (E) A Chapter 1704. transaction if a person became an interested shareholder inadvertently,

provided that, as soon as practicable, the person divests itself of beneficial ownership

of a sufficient number of voting shares of the issuing public corporation that the

person no longer is an interested shareholder. (F)(1) Subject to division (F)(2) of this section, a Chapter 1704. transaction if the original

articles of the issuing public corporation state, or if the articles of the issuing

public corporation have been amended in compliance with the provisions of section 1701.70 , 1701.71 , or 1701.72 of the Revised Code to state, by specific reference to this chapter, that this chapter does not apply

to the corporation and if any of the following applies: (a) The corporation had fewer than fifty shareholders or was not an issuing public corporation

when the statement initially was set forth in the articles. (b) No shareholder of the corporation qualified as an interested shareholder when the

statement was initially set forth in the articles. (c) The statement was contained in an amendment to the articles and the amendment was

approved, upon the recommendation by the affirmative vote of a majority of the authorized

number of directors of the corporation in favor of such amendment, by the holders

of two-thirds of all outstanding shares of the corporation entitled to vote in the

election of directors and by the holders of two-thirds of all outstanding disinterested

shares of the acquiring public corporation entitled to vote in the election of directors. (2) If, however, a Chapter 1704. transaction would have been prohibited but for the adoption

of an amendment to the articles in compliance with division (F)(1)(b) or (c) of this

section, the issuing public corporation shall not engage in a Chapter 1704. transaction

for twelve months following the adoption of the amendment;  in addition, if this chapter

would have applied to a person who became an interested shareholder prior to the adoption

of such an amendment, this chapter shall continue to apply to a Chapter 1704. transaction

between the issuing public corporation and the interested shareholder as if the amendment

had not been adopted. (G) A Chapter 1704. transaction between an acquiring public corporation and any employee

benefit plan, or any trust under any employee benefit plan, established by the issuing

public corporation, and any distribution or payment made by the employee benefit plan

or trust to any beneficiary. (H) A Chapter 1704. transaction that involves any acquisition of securities of an issuing

public corporation pursuant to an employee stock option plan, an employee stock purchase

plan, an employee stock bonus plan, an employee stock ownership plan, or any similar

plan designed to benefit one or more employees established by the issuing public corporation,

provided the acquisition of the securities and the establishment of, any amendment

to, and the administration of the plan are in good faith and not for the purpose of

circumventing the provisions of this chapter. (I) A Chapter 1704. transaction that involves compensation directly or indirectly received

by a director, officer, employee, agent, or independent contractor of an issuing public

corporation in return for services rendered or to be rendered to the issuing public

corporation, provided the payment of the compensation and the services rendered, or

to be rendered, are in good faith and not for the purpose of circumventing the provisions

of this chapter. (J) A Chapter 1704. transaction that involves any loan of money or property of an issuing

public corporation to a director, officer, employee, agent, or independent contractor

of the issuing public corporation, provided the loan is designed to encourage the

rendering of needed, valuable, and efficient services to the issuing public corporation

and provided the loan is made and the services are rendered, or are to be rendered,

in good faith and not for the purpose of circumventing the provisions of this chapter. (K) A Chapter 1704. transaction in which an issuing public corporation makes a loan of

money or other property to, guarantees any loan of money or other property to, or

guarantees any obligation of, an employee stock ownership plan, as defined in Section

4975(e)(7) of the “Internal Revenue Code of 1986,” 68A Stat. 3, 26 U.S.C.A. 1 , as amended, of the issuing public corporation.