2013 Maryland Code
CORPORATIONS AND ASSOCIATIONS
§ 2-310 - Acquisition of own stock -- In general
(a) (1) Subject to the provisions of its charter and § 2-311 of this subtitle, if authorized by its board of directors, a corporation may acquire the corporation’s own shares.
(2) Shares acquired under paragraph (1) of this subsection constitute authorized but unissued shares.
(3) Shares of a corporation’s own stock acquired by the corporation between the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders and the time of the meeting may be voted at the meeting by the holder of record as of the record date and shall be counted in determining the total number of outstanding shares entitled to be voted at the meeting.
(b) If the charter prohibits the issuance of acquired shares, the number of authorized shares is reduced by the number of shares acquired, effective upon the filing with the Department of articles supplementary which shall set forth:
(1) The name of the corporation;
(2) The number of outstanding shares of stock of the corporation that have been acquired by the corporation and that by their terms may not be reissued, and the class and series of the shares;
(3) The number of authorized shares of the corporation remaining after the acquisition of outstanding shares, itemized by class and series; and
(4) The fact that no amendment to the charter is effected by the articles supplementary, their sole purpose being to record the reduction of authorized shares resulting from the acquisition of shares that by the terms of the existing charter may not be reissued.
§ 2-310 - 1. Redemption of own stock -- Open-end investment companies
(a) Applicability. -- This section applies only to a corporation registered as an open-end company under the Investment Company Act of 1940.
(b) Where charter provides for redemption. -- Subject to the provisions of § 2-311 of this subtitle, if authorized by its board of directors, a corporation may redeem shares of its stock from any stockholder if the corporation's charter expressly provides for the redemption of shares of its stock from any stockholder.
(c) Where charter does not provide for redemption. --
(1) Subject to the provisions of § 2-311 of this subtitle, unless prohibited by its charter, in the case of a corporation whose charter does not expressly provide for the redemption of shares of its stock, the corporation may redeem shares of its stock from any stockholder if:
(i) The aggregate net asset value of the shares to be redeemed from the stockholder is, as of the date of the redemption, $ 1,000 or less; and
(ii) Written notice of the redemption to the stockholder of record:
1. Is mailed first-class to the stockholder's last known address of record;
2. States that all of the shares will be redeemed; and
3. Establishes a date for the redemption which is at least 45 days from the date of the notice.
(2) The price to be paid for shares redeemed under this subsection shall be the aggregate net asset value of the shares at the close of business on the date of the redemption.
(3) If certificates representing the shares to be redeemed under this subsection have been issued and are not surrendered for cancellation on the date of redemption:
(i) The corporation may withhold payment for the redeemed shares until the certificates are surrendered for cancellation; and
(ii) Except for the right to receive payment of the redemption price, the stockholder shall cease to have any rights as a stockholder of the corporation on the date of redemption.
(4) If the aggregate net asset value of the shares to be redeemed under this subsection should increase to an amount greater than $ 1,000 between the date of the notice of redemption and the date of the redemption, then the notice of redemption shall have no further force or effect.
§ 2-310 - 2. Shares held in fiduciary capacity for benefit of other class of shares
(a) "Investment company" defined. -- In this section, "investment company" means a corporation registered under the Investment Company Act of 1940.
(b) Authorized. -- Unless otherwise provided in the charter of an investment company, if authorized by its board of directors, shares of any class or series of its stock acquired by an investment company using assets allocated to any other class or series of stock of the investment company may be held by the investment company in a fiduciary capacity for the benefit of the holders of shares of the other class or series of stock, and the investment company may exercise voting rights, receive distributions, and be allocated other rights to the extent determined by its board of directors.
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