EXHIBIT 3.2
CODE OF REGULATIONS
OF
KARRINGTON HEALTH, INC.
INDEX
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
Section 1.01. Annual Meetings . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Calling of Meetings . . . . . . . . . . . . . . . . . . . 1
Section 1.03. Place of Meetings . . . . . . . . . . . . . . . . . . . . 1
Section 1.04. Notice of Meetings. . . . . . . . . . . . . . . . . . . . 1
Section 1.05. Waiver of Notice. . . . . . . . . . . . . . . . . . . . . 2
Section 1.06. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.07. Votes Required. . . . . . . . . . . . . . . . . . . . . . 2
Section 1.08. Order of Business . . . . . . . . . . . . . . . . . . . . 2
Section 1.09. Shareholders Entitled to Vote . . . . . . . . . . . . . . 3
Section 1.10. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.11. Inspectors of Election. . . . . . . . . . . . . . . . . . 3
ARTICLE TWO
DIRECTORS
Section 2.01. Authority and Qualifications. . . . . . . . . . . . . . . 3
Section 2.02. Number of Directors and Term of Office. . . . . . . . . . 4
Section 2.03. Election. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.04. Nominations . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.05. Removal . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.06. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.07. Meetings. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.08. Notice of Meetings. . . . . . . . . . . . . . . . . . . . 5
Section 2.09. Waiver of Notice. . . . . . . . . . . . . . . . . . . . . 6
Section 2.10. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.11. Executive Committee . . . . . . . . . . . . . . . . . . . 6
Section 2.12. Compensation. . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.13. By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE THREE
OFFICERS
Section 3.01. Officers. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.02. Tenure of Office. . . . . . . . . . . . . . . . . . . . . 7
Section 3.03. Duties of the Chairman of the Board . . . . . . . . . . . 8
Section 3.04. Duties of the President . . . . . . . . . . . . . . . . . 8
Section 3.05. Duties of the Vice Presidents . . . . . . . . . . . . . . 8
Section 3.06. Duties of the Secretary . . . . . . . . . . . . . . . . . 8
Section 3.07. Duties of the Treasurer . . . . . . . . . . . . . . . . . 8
ARTICLE FOUR
SHARES
Section 4.01. Certificates. . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.02. Transfers . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.03. Transfer Agents and Registrars. . . . . . . . . . . . . . 9
Section 4.04. Lost, Wrongfully Taken or Destroyed Certificates. . . . . 9
Section 4.05. Uncertificated Shares . . . . . . . . . . . . . . . . . .10
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
Section 5.01. Mandatory Indemnification . . . . . . . . . . . . . . . .10
Section 5.02. Court-Approved Indemnification. . . . . . . . . . . . . .11
Section 5.03. Indemnification for Expenses. . . . . . . . . . . . . . .11
Section 5.04. Determination Required. . . . . . . . . . . . . . . . . .11
Section 5.05. Advances for Expenses . . . . . . . . . . . . . . . . . .12
Section 5.06. Article FIVE Not Exclusive. . . . . . . . . . . . . . . .13
Section 5.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . .13
Section 5.08. Certain Definitions . . . . . . . . . . . . . . . . . . .13
Section 5.09. Venue . . . . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE SIX
MISCELLANEOUS
Section 6.01. Amendments. . . . . . . . . . . . . . . . . . . . . . . .14
Section 6.02. Action by Shareholders or Directors Without a Meeting . .14
ii
CODE OF REGULATIONS
OF
KARRINGTON HEALTH, INC.
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
SECTION 1.01. ANNUAL MEETINGS. The annual meeting of the
shareholders for the election of directors, for the consideration of reports to
be laid before such meeting and for the transaction of such other business as
may properly come before such meeting, shall be held on the fourth Tuesday in
April in each year or on such other date as may be fixed from time to time by
the directors.
SECTION 1.02. CALLING OF MEETINGS. Meetings of the shareholders may
be called only by the chairman of the board, the president, or, in case of the
president's absence, death, or disability, the vice president authorized to
exercise the authority of the president; the secretary; the directors by action
at a meeting, or a majority of the directors acting without a meeting; or the
holders of at least fifty percent (50%) of all shares outstanding and entitled
to vote thereat.
SECTION 1.03. PLACE OF MEETINGS. All meetings of shareholders shall
be held at the principal office of the corporation, unless otherwise provided by
action of the directors. Meetings of shareholders may be held at any place
within or without the State of Ohio.
SECTION 1.04. NOTICE OF MEETINGS.
(A) Written notice stating the time, place and purposes of a meeting
of the shareholders shall be given either by personal delivery or by mail not
less than seven nor more than ninety days before the date of the meeting, (1) to
each shareholder of record entitled to notice of the meeting, (2) by or at the
direction of the president or the secretary. If mailed, such notice shall be
addressed to the shareholder at his address as it appears on the records of the
corporation. Notice of adjournment of a meeting need not be given if the time
and place to which it is adjourned are fixed and announced at such meeting. In
the event of a transfer of shares after the record date for determining the
shareholders who are entitled to receive notice of a meeting of shareholders, it
shall not be necessary to give notice to the transferee. Nothing herein
contained shall prevent the setting of a record date in the manner provided by
law, the Articles or the Regulations for the determination of shareholders who
are entitled to receive notice of or to vote at any meeting of shareholders or
for any purpose required or permitted by law.
(B) Following receipt by the president or the secretary of a request
in writing, specifying the purpose or purposes for which the persons properly
making such request have called a meeting of the shareholders, delivered either
in person or by registered mail to such officer by any persons entitled to call
a meeting of shareholders, such officer shall cause to be given to the
shareholders entitled thereto notice of a meeting to be held on a date not less
than seven nor more than one hundred twenty days after the receipt of such
request, as such officer may fix. If such notice is not given within ninety
days after the receipt of such request by the president or the secretary, then,
and only then, the persons properly calling the meeting may fix the time of
meeting and give notice thereof in accordance with the provisions of the
Regulations.
(C) A shareholder seeking to bring business before an annual meeting
of the shareholders may do so only in accordance with Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, or any successor rule or
regulation. The chairman of the annual meeting may refuse to acknowledge the
proposal of any person to bring business before the annual meeting not made in
compliance with the foregoing procedure and applicable federal securities laws.
SECTION 1.05. WAIVER OF NOTICE. Notice of the time, place and
purpose or purposes of any meeting of shareholders may be waived in writing,
either before or after the holding of such meeting, by any shareholders, which
writing shall be filed with or entered upon the records of such meeting. The
attendance of any shareholder, in person or by proxy, at any such meeting
without protesting the lack of proper notice, prior to or at the commencement of
the meeting, shall be deemed to be a waiver by such shareholder of notice of
such meeting.
SECTION 1.06. QUORUM. At any meeting of shareholders, the holders of
a majority of the voting shares of the corporation then outstanding and entitled
to vote thereat, present in person or by proxy, shall constitute a quorum for
such meeting. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, or the chairman of the board, the
president, or the officer of the corporation acting as chairman of the meeting,
may adjourn such meeting from time to time, and if a quorum is present at such
adjourned meeting any business may be transacted as if the meeting had been held
as originally called.
SECTION 1.07. VOTES REQUIRED. At all elections of directors the
candidates receiving the greatest number of votes shall be elected. Unless
otherwise required by Ohio law, the Articles or the Regulations, the affirmative
vote of a majority of the shares of the corporation present, in person or by
proxy, at a meeting of shareholders and entitled to vote on the subject matter
shall be the act of the shareholders.
SECTION 1.08. ORDER OF BUSINESS. The order of business at any
meeting of shareholders shall be determined by the officer of the corporation
acting as chairman of such meeting unless otherwise determined by a vote of the
holders of a majority of the voting shares of the corporation then outstanding,
present in person or by proxy, and entitled to vote at such meeting.
SECTION 1.09. SHAREHOLDERS ENTITLED TO VOTE. Each shareholder of
record on the books of the corporation on the record date for determining the
shareholders who are entitled
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to vote at a meeting of shareholders shall be entitled at such meeting to one
vote for each share of the corporation standing in his name on the books of the
corporation on such record date. The directors may fix a record date for the
determination of the shareholders who are entitled to receive notice of and to
vote at a meeting of shareholders, which record date shall not be a date earlier
than the date on which the record date is fixed and which record date may be a
maximum of ninety days preceding the date of the meeting of shareholders.
SECTION 1.10. PROXIES. At meetings of the shareholders, any
shareholder of record entitled to vote thereat may be represented and may vote
by a proxy or proxies appointed by an instrument in writing signed by such
shareholder, but such instrument shall be filed with the secretary of the
meeting before the person holding such proxy shall be allowed to vote
thereunder. No proxy shall be valid after the expiration of eleven months after
the date of its execution, unless the shareholder executing it shall have
specified therein the length of time it is to continue in force.
SECTION 1.11. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the directors may appoint inspectors of election to act at such
meeting or any adjournment thereof; if inspectors are not so appointed, the
officer of the corporation acting as chairman of any such meeting may make such
appointment. In case any person appointed as inspector fails to appear or act,
the vacancy may be filled only by appointment made by the directors in advance
of such meeting or, if not so filled, at the meeting by the officer of the
corporation acting as chairman of such meeting. No other person or persons may
appoint or require the appointment of inspectors of election.
ARTICLE TWO
DIRECTORS
SECTION 2.01. AUTHORITY AND QUALIFICATIONS. Except where the law,
the Articles or the Regulations otherwise provide, all authority of the
corporation shall be vested in and exercised by its directors. Directors need
not be shareholders of the corporation.
SECTION 2.02. NUMBER OF DIRECTORS AND TERM OF OFFICE.
(A) Until changed in accordance with the provisions of the
Regulations, the number of directors of the corporation shall be eleven.
Directors shall be divided into three (3) classes each of which shall consist of
such number of directors, not less than three, as may be determined by the
shareholders or directors in the manner described in paragraphs (B) and (C) of
this Section. The number of directors in each class need not be uniform. At
the time these Regulations are adopted, three persons shall be elected to serve
as directors for one year and until their successors are elected, four persons
shall be elected to serve as directors for two years and until their successors
are elected and four persons shall be elected to serve as directors for three
years and until their successors are elected. At each annual meeting of
shareholders beginning
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with the 1997 annual meeting a class of directors shall be elected to serve a
term of three years to succeed the class of directors whose terms shall expire
in that year so that the term of office of only one class of directors shall
expire in each such year; provided, however, that each director elected at any
time shall hold office until his successor is duly elected and qualified or
until his earlier resignation, removal from office, or death.
(B) The number of directors may be fixed or changed at a meeting of
the shareholders called for the purpose of electing directors at which a quorum
is present, only by the affirmative vote of the holders of not less than a
majority of the voting shares which are represented at the meeting, in person or
by proxy, and entitled to vote on such proposal.
(C) The directors may fix or change the number of directors and may
fill any director's office that is created by an increase in the number of
directors.
(D) No reduction in the number of directors shall of itself have the
effect of shortening the term of any incumbent director.
SECTION 2.03. ELECTION. At each annual meeting of the shareholders
for the election of directors, the successors to the directors whose term shall
expire in that year shall be elected, but if the annual meeting is not held or
if one or more of such directors are not elected thereat, they may be elected at
a special meeting called for that purpose. The election of directors shall be
by ballot whenever requested by the presiding officer of the meeting or by the
holders of a majority of the voting shares outstanding, entitled to vote at such
meeting and present in person or by proxy, but unless such request is made, the
election shall be viva voce.
SECTION 2.04. NOMINATIONS. Nominations for the election of directors
may be made by the board of directors of the corporation or a committee by the
board or by any shareholder entitled to vote in the election of directors
generally. Any shareholder entitled to vote in the election of directors
generally may nominate one or more persons for election as directors at a
meeting at which directors are to be elected only if written notice of such
shareholder's intent to make such nomination or nominations has been given to
the Secretary of the corporation. Such notice shall be delivered to the
principal executive offices of the corporation not later than the date on which
a shareholder proposal would be required to be delivered under Section 1.04(C)
hereof. Each such notice shall set forth: (A) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (B) a representation that the shareholder is a holder of record of
shares of the corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (C) a description of all arrangements or understandings between
the shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the shareholder; (D) such other information regarding each nominee
proposed by such shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
board of directors of the corporation; and (E) the consent of each nominee to
serve as a director of the corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
4
SECTION 2.05. REMOVAL. A director or directors may be removed from
office only for cause and only by the vote of the holders of shares entitling
them to exercise not less than a majority of the voting power of the corporation
to elect directors in place of those to be removed. In case of any removal, a
new director may be elected at the same meeting for the unexpired term of each
director removed. Failure to elect a director to fill the unexpired term of any
director removed shall be deemed to create a vacancy in the board.
SECTION 2.06. VACANCIES. The remaining directors, though less than a
majority of the whole authorized number of directors, may, by the vote of a
majority of their number, fill any vacancy in the board for the unexpired term.
A vacancy in the board exists within the meaning of this Section 2.06 in case
the shareholders increase the authorized number of directors but fail at the
meeting at which such increase is authorized, or an adjournment thereof, to
elect the additional directors provided for, or in case the shareholders fail at
any time to elect the whole authorized number of directors.
SECTION 2.07. MEETINGS. A meeting of the directors shall be held
immediately following the adjournment of each annual meeting of shareholders at
which directors are elected, and notice of such meeting need not be given. The
directors shall hold such other meetings as may from time to time be called, and
such other meetings of directors may be called only by the chairman of the
board, the president, or any two directors. All meetings of directors shall be
held at the principal office of the corporation in Columbus, Ohio or at such
other place, within or without the State of Ohio, as the directors may from time
to time determine by a resolution. Meetings of the directors may be held
through any communications equipment if all persons participating can hear each
other and participation in a meeting pursuant to this provision shall constitute
presence at such meeting.
SECTION 2.08. NOTICE OF MEETINGS. Notice of the time and place of
each meeting of directors for which such notice is required by law, the
Articles, the Regulations or the By-Laws shall be given to each of the directors
by at least one of the following methods:
(A) In a writing mailed not less than three days before such meeting
and addressed to the residence or usual place of business of a
director, as such address appears on the records of the
corporation; or
(B) By telegraph, cable, radio, wireless, or a writing sent or
delivered to the residence or usual place of business of a
director as the same appears on the records of the corporation,
not later than the day before the date on which such meeting is
to be held; or
(C) Personally or by telephone not later than the day before the date
on which such meeting is to be held.
Notice given to a director by any one of the methods specified in the
Regulations shall be sufficient, and the method of giving notice to all
directors need not be uniform. Notice of any meeting of directors may be given
only by the chairman of the board, the president or the secretary of the
corporation. Any such notice need not specify the purpose or purposes of the
5
meeting. Notice of adjournment of a meeting of directors need not be given if
the time and place to which it is adjourned are fixed and announced at such
meeting.
SECTION 2.09. WAIVER OF NOTICE. Notice of any meeting of directors
may be waived in writing, either before or after the holding of such meeting, by
any director, which writing shall be filed with or entered upon the records of
the meeting. The attendance of any director at any meeting of directors without
protesting, prior to or at the commencement of the meeting, the lack of proper
notice, shall be deemed to be a waiver by him of notice of such meeting.
SECTION 2.10. QUORUM. A majority of the whole authorized number of
directors shall be necessary to constitute a quorum for a meeting of directors,
except that a majority of the directors in office shall constitute a quorum for
filling a vacancy in the board. The act of a majority of the directors present
at a meeting at which a quorum is present is the act of the board, except as
otherwise provided by law, the Articles or the Regulations.
SECTION 2.11. EXECUTIVE COMMITTEE. The directors may create an
executive committee or any other committee of directors, to consist of not less
than three directors, and may authorize the delegation to such executive
committee or other committees of any of the authority of the directors, however
conferred, other than that of filling vacancies among the directors or in the
executive committee or in any other committee of the directors.
Such executive committee or any other committee of directors shall
serve at the pleasure of the directors, shall act only in the intervals between
meetings of the directors, and shall be subject to the control and direction of
the directors. Such executive committee or other committee of directors may act
by a majority of its members at a meeting or by a writing or writings signed by
all of its members.
Any act or authorization of any act by the executive committee or any
other committee within the authority delegated to it shall be as effective for
all purposes as the act or authorization of the directors. No notice of a
meeting of the executive committee or of any other committee of directors shall
be required. A meeting of the executive committee or of any other committee of
directors may be called only by the president or by a member of such executive
or other committee of directors. Meetings of the executive committee or of any
other committee of directors may be held through any communications equipment if
all persons participating can hear each other and participation in such a
meeting shall constitute presence thereat.
SECTION 2.12. COMPENSATION. Directors shall be entitled to receive
as compensation for services rendered and expenses incurred as directors, such
amounts as the directors may determine.
SECTION 2.13. BY-LAWS. The directors may adopt, and amend from time
to time, By-Laws for their own government, which By-Laws shall not be
inconsistent with the law, the Articles or the Regulations.
6
ARTICLE THREE
OFFICERS
SECTION 3.01. OFFICERS. The officers of the corporation to be
elected by the directors shall be a president, a secretary, a treasurer, and, if
desired, one or more vice presidents and such other officers and assistant
officers as the directors may from time to time elect. The directors may elect
a chairman of the board, who must be a director. Officers need not be
shareholders of the corporation, and may be paid such compensation as the board
of directors may determine. Any two or more offices may be held by the same
person, but no officer shall execute, acknowledge, or verify any instrument in
more than one capacity if such instrument is required by law, the Articles, the
Regulations or the By-Laws to be executed, acknowledged, or verified by two or
more officers.
SECTION 3.02. TENURE OF OFFICE. The officers of the corporation hold
office at the pleasure of the directors. Any officer of the corporation may be
removed, either with or without cause, at any time, by the affirmative vote of a
majority of all the directors then in office; such removal, however, shall be
without prejudice to the contract rights, if any, of the person so removed.
SECTION 3.03. DUTIES OF THE CHAIRMAN OF THE BOARD. The chairman of
the board, if any, shall preside at all meetings of the directors. He shall
have such other powers and duties as the directors shall from time to time
assign to him.
SECTION 3.04. DUTIES OF THE PRESIDENT. The president shall be the
chief executive officer of the corporation and shall exercise supervision over
the business of the corporation and shall have, among such additional powers and
duties as the directors may from time to time assign to him, the power and
authority to sign all certificates evidencing shares of the corporation and all
deeds, mortgages, bonds, contracts, notes and other instruments requiring the
signature of the president of the corporation. It shall be the duty of the
president to preside at all meetings of shareholders.
SECTION 3.05. DUTIES OF THE VICE PRESIDENTS. In the absence of the
president or in the event of his inability or refusal to act, the vice
president, if any (or in the event there be more than one vice president, the
vice presidents in the order designated, or in the absence of any designation,
then in the order of their election), shall perform the duties of the president,
and when so acting, shall have all the powers of and be subject to all
restrictions upon the president. The vice presidents shall perform such other
duties and have such other powers as the directors may from time to time
prescribe.
SECTION 3.06. DUTIES OF THE SECRETARY. It shall be the duty of the
secretary, or of an assistant secretary, if any, in case of the absence or
inability to act of the secretary, to keep minutes of all the proceedings of the
shareholders and the directors and to make a proper record of the same; to
perform such other duties as may be required by law, the Articles or the
7
Regulations; to perform such other and further duties as may from time to time
be assigned to him by the directors or the president; and to deliver all books,
paper and property of the corporation in his possession to his successor, or to
the president.
SECTION 3.07. DUTIES OF THE TREASURER. The treasurer, or an
assistant treasurer, if any, in case of the absence or inability to act of the
treasurer, shall receive and safely keep in charge all money, bills, notes,
choses in action, securities and similar property belonging to the corporation,
and shall do with or disburse the same as directed by the president or the
directors; shall keep an accurate account of the finances and business of the
corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, stated capital and shares, together with such
other accounts as may be required and hold the same open for inspection and
examination by the directors; shall give bond in such sum with such security as
the directors may require for the faithful performance of his duties; shall,
upon the expiration of his term of office, deliver all money and other property
of the corporation in his possession or custody to his successor or the
president; and shall perform such other duties as from time to time may be
assigned to him by the directors.
ARTICLE FOUR
SHARES
SECTION 4.01. CERTIFICATES. Certificates evidencing ownership of
shares of the corporation shall be issued to those entitled to them. Each
certificate evidencing shares of the corporation shall bear a distinguishing
number; the signatures of the chairman of the board, the president, or a vice
president, and of the secretary or an assistant secretary (except that when any
such certificate is countersigned by an incorporated transfer agent or
registrar, such signatures may be facsimile, engraved, stamped or printed); and
such recitals as may be required by law. Certificates evidencing shares of the
corporation shall be of such tenor and design as the directors may from time to
time adopt and may bear such recitals as are permitted by law.
SECTION 4.02. TRANSFERS. Where a certificate evidencing a share or
shares of the corporation is presented to the corporation or its proper agents
with a request to register transfer, the transfer shall be registered as
requested if:
(A) An appropriate person signs on each certificate so presented or
signs on a separate document an assignment or transfer of shares evidenced by
each such certificate, or signs a power to assign or transfer such shares, or
when the signature of an appropriate person is written without more on the back
of each such certificate; and
(B) Reasonable assurance is given that the indorsement of each
appropriate person is genuine and effective; the corporation or its agents may
refuse to register a transfer of shares unless the signature of each appropriate
person is guaranteed by a commercial bank or trust
8
company having an office or a correspondent in the City of New York or by a firm
having membership in the New York Stock Exchange; and
(C) All applicable laws relating to the collection of transfer or
other taxes have been complied with; and
(D) The corporation or its agents are not otherwise required or
permitted to refuse to register such transfer.
SECTION 4.03. TRANSFER AGENTS AND REGISTRARS. The directors may
appoint one or more agents to transfer or to register shares of the corporation,
or both.
SECTION 4.04. LOST, WRONGFULLY TAKEN OR DESTROYED CERTIFICATES.
Except as otherwise provided by law, where the owner of a certificate
evidencing shares of the corporation claims that such certificate has been lost,
destroyed or wrongfully taken, the directors must cause the corporation to issue
a new certificate in place of the original certificate if the owner:
(A) So requests before the corporation has notice that such original
certificate has been acquired by a bona fide purchaser; and
(B) Files with the corporation, unless waived by the directors, an
indemnity bond, with surety or sureties satisfactory to the corporation, in such
sums as the directors may, in their discretion, deem reasonably sufficient as
indemnity against any loss or liability that the corporation may incur by reason
of the issuance of each such new certificate; and
(C) Satisfies any other reasonable requirements which may be imposed
by the directors, in their discretion.
SECTION 4.05. UNCERTIFICATED SHARES. Anything contained in this
Article FOUR to the contrary notwithstanding, the directors may provide by
resolution that some or all of any or all classes and series of shares of the
corporation shall be uncertificated shares, provided that such resolution shall
not apply to (A) shares of the corporation represented by a certificate until
such certificate is surrendered to the corporation in accordance with applicable
provisions of Ohio law or (B) any certificated security of the corporation
issued in exchange for an uncertificated security in accordance with applicable
provisions of Ohio law. The rights and obligations of the holders of
uncertificated shares and the rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical, except as otherwise expressly provided by law.
9
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
SECTION 5.01. MANDATORY INDEMNIFICATION. The corporation shall
indemnify any officer or director of the corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, any action threatened or instituted by or in the
right of the corporation), by reason of the fact that he is or was a director,
officer, manager or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee, member,
manager or agent of another corporation (domestic or foreign, nonprofit or for
profit), limited liability company, partnership, joint venture, trust or other
enterprise, against expenses (including, without limitation, attorneys' fees,
filing fees, court reporters' fees and transcript costs), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful. A person claiming
indemnification under this Section 5.01 shall be presumed, in respect of any act
or omission giving rise to such claim for indemnification, to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal matter, to have
had no reasonable cause to believe his conduct was unlawful, and the termination
of any action, suit or proceeding by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself, rebut
such presumption.
SECTION 5.02. COURT-APPROVED INDEMNIFICATION. Anything contained in
the Regulations or elsewhere to the contrary notwithstanding:
(A) the corporation shall not indemnify any officer or director of
the corporation who was a party to any completed action or suit instituted by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, member, manager or agent of another
corporation (domestic or foreign, nonprofit or for profit), limited liability
company, partnership, joint venture, trust or other enterprise, in respect of
any claim, issue or matter asserted in such action or suit as to which he shall
have been adjudged to be liable for acting with reckless disregard for the best
interests of the corporation or misconduct (other than negligence) in the
performance of his duty to the corporation unless and only to the extent that
the Court of Common Pleas of Franklin County, Ohio or the court in which such
action or suit was brought shall determine upon application that, despite such
adjudication of liability, and in view of all the circumstances of the case, he
is fairly and reasonably entitled to such indemnity as such Court of Common
Pleas or such other court shall deem proper; and
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(B) the corporation shall promptly make any such unpaid
indemnification as is determined by a court to be proper as contemplated by
this Section 5.02.
SECTION 5.03. INDEMNIFICATION FOR EXPENSES. Anything contained in
the Regulations or elsewhere to the contrary notwithstanding, to the extent that
an officer or director of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
Section 5.01, or in defense of any claim, issue or matter therein, he shall be
promptly indemnified by the corporation against expenses (including, without
limitation, attorneys' fees, filing fees, court reporters' fees and transcript
costs) actually and reasonably incurred by him in connection therewith.
SECTION 5.04. DETERMINATION REQUIRED. Any indemnification required
under Section 5.01 and not precluded under Section 5.02 shall be made by the
corporation only upon a determination that such indemnification of the officer
or director is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 5.01. Such determination may be made
only (A) by a majority vote of a quorum consisting of directors of the
corporation who were not and are not parties to, or threatened with, any such
action, suit or proceeding, or (B) if such a quorum is not obtainable or if a
majority of a quorum of disinterested directors so directs, in a written opinion
by independent legal counsel other than an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed services for
the corporation, or any person to be indemnified, within the past five years, or
(C) by the shareholders, or (D) by the Court of Common Pleas of Franklin County,
Ohio or (if the corporation is a party thereto) the court in which such action,
suit or proceeding was brought, if any; any such determination may be made by a
court under division (D) of this Section 5.04 at any time [including, without
limitation, any time before, during or after the time when any such
determination may be requested of, be under consideration by or have been denied
or disregarded by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by the shareholders under
division (C) of this Section 5.04]; and no failure for any reason to make any
such determination, and no decision for any reason to deny any such
determination, by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by shareholders under
division (C) of this Section 5.04 shall be evidence in rebuttal of the
presumption recited in Section 5.01. Any determination made by the
disinterested directors under division (A) or by independent legal counsel under
division (B) of this Section 5.04 to make indemnification in respect of any
claim, issue or matter asserted in an action or suit threatened or brought by or
in the right of the corporation shall be promptly communicated to the person who
threatened or brought such action or suit, and within ten (10) days after
receipt of such notification such person shall have the right to petition the
Court of Common Pleas of Franklin County, Ohio or the court in which such action
or suit was brought, if any, to review the reasonableness of such determination.
SECTION 5.05. ADVANCES FOR EXPENSES. Expenses (including, without
limitation, attorneys' fees, filing fees, court reporters' fees and transcript
costs) incurred in defending any action, suit or proceeding referred to in
Section 5.01 shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding to or on behalf of the officer or
director promptly as such expenses are incurred by him, but only if such officer
or director shall first agree, in writing, to repay all amounts so paid in
respect of any claim, issue or
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other matter asserted in such action, suit or proceeding in defense of which he
shall not have been successful on the merits or otherwise:
(A) if it shall ultimately be determined as provided in Section 5.04
that he is not entitled to be indemnified by the corporation as provided under
Section 5.01; or
(B) if, in respect of any claim, issue or other matter asserted by or
in the right of the corporation in such action or suit, he shall have been
adjudged to be liable for acting with reckless disregard for the best interests
of the corporation or misconduct (other than negligence) in the performance of
his duty to the corporation, unless and only to the extent that the Court of
Common Pleas of Franklin County, Ohio or the court in which such action or suit
was brought shall determine upon application that, despite such adjudication of
liability, and in view of all the circumstances, he is fairly and reasonably
entitled to all or part of such indemnification.
SECTION 5.06. ARTICLE FIVE NOT EXCLUSIVE. The indemnification
provided by this Article FIVE shall not be exclusive of, and shall be in
addition to, any other rights to which any person seeking indemnification may be
entitled under the Articles, the Regulations, any agreement, a vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be an officer or
director of the corporation and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
SECTION 5.07. INSURANCE. The corporation may purchase and maintain
insurance or furnish similar protection, including but not limited to trust
funds, letters of credit, or self-insurance, on behalf of any person who is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee, or agent of another corporation (domestic or foreign, nonprofit or for
profit), partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
obligation or the power to indemnify him against such liability under the
provisions of this Article FIVE. Insurance may be purchased from or maintained
with a person in which the corporation has a financial interest.
SECTION 5.08. CERTAIN DEFINITIONS. For purposes of this Article
FIVE, and as examples and not by way of limitation:
(A) A person claiming indemnification under this Article FIVE shall
be deemed to have been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 5.01, or in defense of any
claim, issue or other matter therein, if such action, suit or proceeding shall
be terminated as to such person, with or without prejudice, without the entry of
a judgment or order against him, without a conviction of him, without the
imposition of a fine upon him and without his payment or agreement to pay any
amount in settlement thereof (whether or not any such termination is based upon
a judicial or other determination of the lack of merit of the claims made
against him or otherwise results in a vindication of him); and
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(B) References to an "other enterprise" shall include employee
benefit plans; references to a "fine" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" within the meaning of that term as used in this Article FIVE.
SECTION 5.09. VENUE. Any action, suit or proceeding to determine a
claim for indemnification under this Article FIVE may be maintained by the
person claiming such indemnification, or by the corporation, in the Court of
Common Pleas of Franklin County, Ohio. The corporation and (by claiming such
indemnification) each such person consent to the exercise of jurisdiction over
its or his person by the Court of Common Pleas of Franklin County, Ohio in any
such action, suit or proceeding.
ARTICLE SIX
MISCELLANEOUS
SECTION 6.01. AMENDMENTS.
(A) The Regulations may be amended, or new regulations may be
adopted, at a meeting of the shareholders held for such purpose, only by the
affirmative vote of the holders of shares entitling them to exercise not less
than a majority of the voting power of the corporation on such proposal.
(B) Division (A) of this Section 6.01 notwithstanding, the
shareholders shall have no right to (1) amend or repeal, in any respect,
Sections 1.02, 2.02, 2.03 or 2.05, Article FIVE, this Division (B) of Section
6.01 or Division (B) of Section 6.02 of these Regulations; or (2) adopt, amend
or repeal any other provision which would modify or circumvent Sections 1.02,
2.02, 2.03 or 2.05, Article FIVE, this Division (B) of Section 6.01 or Division
(B) of Section 6.02 of these Regulations, unless, in each case, the holders of
not less than sixty-six and two-thirds percent (66 2/3 %) of the total voting
power of the corporation shall have voted in favor of such action.
SECTION 6.02. ACTION BY SHAREHOLDERS OR DIRECTORS WITHOUT A MEETING.
(A) Anything contained in the Regulations to the contrary
notwithstanding, except as provided in Division (B) of this Section 6.02, any
action which may be authorized or taken at a meeting of the shareholders or of
the directors or of a committee of the directors, as the case may be, may be
authorized or taken without a meeting with the affirmative vote or approval
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of, and in a writing or writings signed by, all the shareholders who would be
entitled to notice of a meeting of the shareholders held for such purpose, or
all the directors, or all the members of such committee of the directors,
respectively, which writings shall be filed with or entered upon the records of
the corporation.
(B) Notwithstanding the provisions of Division (A) of this Section
6.02, from and after the date of the closing of the initial public offering of
the common shares of the corporation registered pursuant to the Securities Act
of 1933, as amended, the Regulations may be amended, or new regulations adopted,
by the shareholders only at a meeting of the shareholders held for such purpose.
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