1
Exhibit 99.1
1701. 13 AUTHORITY OF CORPORATION
(A) A corporation may sue and be sued.
(B) A corporation may adopt and alter a corporate seal and use the same or a
facsimile of the corporate seal, but failure to affix the corporate seal shall
not affect the validity of any instrument.
(C) At the request or direction of the United States government or any agency
of the United States government, a corporation may transact any lawful business
in aid of national defense or in the prosecution of any war in which the nation
is engaged.
(D) Unless otherwise provided in the articles, a corporation may take
property of any description, or any interest in property, by gift, devise, or
bequest, and may make donations for the public welfare or for charitable,
scientific, or educational purposes.
(E)(1) A corporation may indemnify or agree to indemnify any person 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, other than an action by or in the right of the
corporation, 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, a
limited liability company, or a partnership, joint venture, trust, or other
enterprise, against expenses, including attorney's fees, 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, if he had
no reasonable cause to believe his conduct was unlawful. 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, create a
presumption that the person did not act 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
reasonable cause to believe that his conduct was unlawful.
46
2
(2) A corporation may indemnify or agree to indemnify any person who was or
is a party, or is threatened to be made a party, to any threatened, pending, or
completed action or suit 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, a limited liability company, or a partnership, joint venture, trust, or
other enterprise, against expenses, including attorney's fees, actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit, 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, except that no
indemnification shall be made in respect of any of the following:
(a) Any claim, issue, or matter as to which such person is adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless, and only to the extent that, the court of common pleas or
the court in which such action or suit was brought determines, upon application,
that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court of common pleas or such other court
shall deem proper;
(b) Any action or suit in which the only liability asserted against a
director is pursuant to section 1701.95 of the Revised Code.
(3) To the extent that a director, trustee, officer, employee, member,
manager, or agent has been successful on the merits or otherwise in defense of
any action, suit, or proceeding referred to in division (E)(1) or (2) of this
section, or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses, including attorney's fees, actually and reasonably
incurred by him in connection with the action, suit, or proceeding.
(4) Any indemnification under division (E)(1) or (2) of this section, unless
ordered by a court, shall be made by the corporation only as authorized in the
specific case, upon a determination that indemnification of the director,
trustee, officer, employee, member, manager, or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
division (E)(1) or (2) of this section. Such determination shall be made as
follows:
(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or threatened with
the action, suit, or proceeding referred to in division (E)(1) or (2) of this
section;
(b) If the quorum described in division (E)(4)(a) of this section is not
obtainable or if a majority vote 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;
(c) By the shareholders;
47
3
(d) By the court of common pleas or the court in which the action, suit, or
proceeding referred to in division (E)(1) or (2) of this section was brought.
Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or brought
the action or suit by or in the right of the corporation under division (E)(2)
of this section, and, within ten days after receipt of such notification, such
person shall have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the reasonableness of such
determination.
(5)(a) Unless at the time of a director's act or omission that is the subject
of an action, suit, or proceeding referred to in division (E)(1) or (2) of this
section, the articles or the regulations of a corporation state, by specific
reference to this division, that the provisions of this division do not apply to
the corporation and unless the only liability asserted against a director in an
action, suit, or proceeding referred to in division (E)(1) or (2) of this
section is pursuant to section 1701.95 of the Revised Code, expenses, including
attorney's fees, incurred by a director in defending the action, suit, or
proceeding shall be paid by the corporation as they are incurred, in advance of
the final disposition of the action, suit, or proceeding, upon receipt of an
undertaking by or on behalf of the director in which he agrees to do both of the
following:
(i) Repay such amount if it is proved by clear and convincing evidence in a
court of competent jurisdiction that his 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;
(ii) Reasonably cooperate with the corporation concerning the action, suit,
or proceeding.
(b) Expenses, including attorney's fees, incurred by a director, trustee,
officer, employee, member, manager, or agent in defending any action, suit, or
proceeding referred to in division (E)(1) or (2) of this section, may be paid by
the corporation as they are incurred, in advance of the final disposition of the
action, suit, or proceeding, as authorized by the directors in the specific
case, upon receipt of an undertaking by or on behalf of the director, trustee,
officer, employee, member, manager, or agent to repay such amount, if it
ultimately is determined that he is not entitled to be indemnified by the
corporation.
(6) The indemnification authorized by this section shall not be exclusive of,
and shall be in addition to, any other rights granted to those seeking
indemnification under the articles, the regulations, any agreement, a vote of
shareholders or disinterested directors, or otherwise, both as to action in
their official capacities and as to action in another capacity while holding
their offices or positions, and shall continue as to a person who has ceased to
be a director, trustee, officer, employee, member, manager, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
(7) A 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 or for any person who is or was a director,
officer,
48
4
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, a
limited liability company, or a 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 power to indemnify him against such liability under
this section. Insurance may be purchased from or maintained with a person in
which the corporation has a financial interest.
(8) The authority of a corporation to indemnify persons pursuant to division
(E)(1) or (2) of this section does not limit the payment of expenses as they
are incurred, indemnification, insurance, or other protection that may be
provided pursuant to divisions (E)(5), (6), and (7) of this section. Divisions
(E)(1) and (2) of this section do not create any obligation to repay or return
payments made by the corporation pursuant to division (E)(5), (6), or (7).
(9) As used in division (E) of this section, "corporation" includes all
constituent entities in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer, employee,
trustee, member, manager, or agent of such a constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee, member, manager, or agent of another corporation, domestic or
foreign, non-profit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, shall stand in the same
position under this section with respect to the new or surviving corporation as
he would if he had served the new or surviving corporation in the same capacitv.
(F) In carrying out the purposes stated in its articles and subject to
limitations prescribed by law or in its articles, a corporation may:
(1) Purchase or otherwise acquire, lease as lessee, invest in, hold, use,
lease as lessor, encumber, sell, exchange, transfer, and dispose of property of
any description or any interest in such property;
(2) Make contracts;
(3) Form or acquire the control of other corporations, domestic or foreign,
whether nonprofit or for profit;
(4) Be a partner, member, associate, or participant in other enterprises or
ventures, whether profit or nonprofit;
(5) Conduct its affairs in this state and elsewhere;
(6) Borrow money, and issue, sell, and pledge its notes, bonds, and other
evidences of indebtedness, and secure any of its obligations by mortgage,
pledge, or deed of trust of all or any of its property, and guarantee or secure
obligations of any person;
(7) Resist a change or potential change in control of the corporation if the
directors by a majority vote of a quorum determine that the change or potential
change is opposed to or not in the best interests of the corporation:
(a) Upon consideration of the interests of the corporation's shareholders
and any of the matters set forth in division (E) of section 1701.59 of the
Revised Code; or
49
5
(b) Because the amount or nature of the indebtedness and other obligations to
which the corporation or any successor or the property of either may become
subject in connection with the change or potential change in control provides
reasonable grounds to believe that, within a reasonable period of time, any of
the following would apply:
(i) The assets of the corporation or any successor would be or become less
than its liabilities plus its stated capital, if any;
(ii) The corporation or any successor would be or become insolvent;
(iii) Any voluntary or involuntary proceeding under the federal bankruptcy
laws concerning the corporation or any successor would be commenced by any
person.
(8) Do all things permitted by law and exercise all authority within the
purposes stated in its articles or incidental to its articles.
(G) Irrespective of the purposes stated in its articles, but subject to
limitations stated in its articles, a corporation, in addition to the authority
conferred by division (F) of this section, may invest its funds not currently
needed in its business in any shares or other securities, to such extent that as
a result of the investment the corporation shall not acquire control of another
corporation, business, or undertaking the activities and operations of which are
not incidental to the purposes stated in its articles.
(H) No lack of, or limitation upon, the authority of a corporation shall be
asserted in any action except (1) by the state in an action by it against the
corporation, (2) by or on behalf of the corporation against a director, an
officer, or any shareholder as such, (3) by a shareholder as such or by or on
behalf of the holders of shares of any class against the corporation, a
director, an officer, or any shareholder as such, or (4) in an action involving
an alleged overissue of shares. This division shall apply to any action brought
in this state upon any contract made in this state by a foreign corporation.
(1994 S 74, eff. 7-1-94; 1990 S 321, eff. 4-11-90; 1986 H 902; 1974 S 155;
132 v S 75; 130 v S 121; 126 v 432)