Unless otherwise provided in the articles or regulations of a corporation and unless the
only liability asserted against a director is for authorizing unlawful loans, dividends, distributions, or purchase of the corporations own shares, directors (but not any other person) are entitled to mandatory advancement of expenses incurred
in defending any action, including derivative actions, brought against the director, provided that the director agrees to cooperate with the corporation concerning the matter and to repay the amount advanced if it is proved by clear and convincing
evidence that his or her act or failure to act was done with deliberate intent to cause injury to the corporation or with reckless disregard to the corporations best interests.
Pursuant to Ohio law, a director is not liable for monetary damages unless it is proved by clear and convincing evidence in a court of
competent jurisdiction that his or her 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. There
is, however, no comparable provision limiting the liability of officers, employees, or agents of a corporation.
The statutory right of
indemnification is not exclusive in Ohio, and a corporation may, among other things, grant rights to indemnification under the corporations articles, code of regulations, or agreements. Ohio corporations are also specifically authorized to
procure insurance against any liability that may be asserted against directors and officers, whether or not the corporation would have the power to indemnify such officials.
Code of Regulations
Article Five of the Regulations contains certain indemnification provisions adopted pursuant to authority contained in section 1701.13(E) of
the Ohio Revised Code.
The Regulations provide for the indemnification of every person who was or is a party or is threatened to be made
a party to, or is or was involved or is threatened to be involved in, any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, arbitrative, administrative, or investigative, by reason of the fact that such person
is or was a director or officer of the Company or is or was serving at the request of the Company as a director, trustee, officer, partner, member, or manager, of another corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan, or other enterprise, against all expenses, judgments, fines, excise taxes assessed with respect to an employee benefit plan, penalties, and amounts paid in settlement actually and reasonably incurred by such person in
connection with any proceeding, if he or she acted in good faith and in a manner in which he or she reasonably believed to be in and not opposed to the best interests of the Company, and, with respect to any criminal proceeding, he or she did not
have reasonable cause to believe that his or her conduct was unlawful.
In addition, the Regulations provide that the registrant will not
provide indemnification for any person (i) in such persons capacity as a director of the registrant in respect of any claim, issue, or matter asserted in a proceeding by or in the right of the Company as to which such person will have
been adjudged liable to the registrant for an act or omission undertaken by such person with deliberate intent to cause injury to the Company or with reckless disregard for the registrants best interests, (ii) in such persons
capacity other than that of a director of the registrant in respect of any claim, issue or matter asserted in a proceeding by or in the right of the registrant as to which the indemnitee will have been adjudged to be liable to the Company for
negligence or misconduct, or (iii) in any proceeding by or in the right of the Company in which the only liability asserted relates to the authorization of unlawful loans, dividends, distributions or repurchase of the registrants own
shares, absent a court order.
Indemnification Agreements
The registrant has entered into indemnification agreements with its directors and executive officers. Pursuant to the indemnification
agreements, the registrant has agreed to indemnify an indemnitee to the greatest extent permitted by Ohio law as set forth above and in its code of regulations. Notwithstanding the foregoing, an indemnitee will not be entitled to indemnification
under the indemnification agreement:
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