2013 Maryland Code
CORPORATIONS AND ASSOCIATIONS
§ 8-501 - Amendment of declaration

§8-501.

(a) Except as provided in § 8-202(c) or § 8-203(a)(8) of this title, a declaration of trust may be amended only as provided in this section.

(b) The board of trustees of a real estate investment trust proposing an amendment to its declaration of trust shall:

(1) Adopt a resolution which sets forth the proposed amendment and declares that it is advisable; and

(2) Direct that the proposed amendment be submitted for consideration by the shareholders.

(c) (1) If the proposed amendment is to be considered at a meeting of the shareholders, notice which states that a purpose of the meeting will be to act upon the proposed amendment shall be given by the real estate investment trust in the manner required by its declaration of trust or bylaws to:

(i) Each shareholder entitled to vote on the proposed amendment; and

(ii) Each shareholder not entitled to vote on the proposed amendment if the contract rights of the shareholder’s shares, as expressly set forth in the declaration of trust, would be altered by the amendment.

(2) The notice shall include a copy of the amendment or a summary of the changes it will affect.

(d) The proposed amendment shall be approved by the shareholders of the real estate investment trust by the affirmative vote or written consent of two thirds of all the votes entitled to be cast on the matter.

(e) (1) A declaration of trust may permit the board of trustees, with the approval of two thirds of its members, and without action by the shareholders, to amend the declaration of trust from time to time to qualify as a real estate investment trust under the Internal Revenue Code or under this title.

(2) Notwithstanding subsections (b) and (d) of this section, unless prohibited in the declaration of trust by reference to this subsection or to the subject matter of this subsection, a majority of the entire board of trustees, without action by the shareholders, may amend the declaration of trust in any respect in which the charter of a corporation may be amended in accordance with § 2-605 of this article.

(f) (1) In this subsection, “reverse share split” means a combination of outstanding shares of beneficial interest of a real estate investment trust into a lesser number of shares of beneficial interest of the same class without any change to the aggregate par value of the outstanding shares.

(2) This subsection applies to a real estate investment trust with a class of equity securities registered under the Securities Exchange Act of 1934.

(3) Unless prohibited in the declaration of trust by reference to this subsection or to the subject matter of this subsection, the board of trustees of a real estate investment trust may amend the declaration of trust, with the approval of a majority of the board of trustees and without shareholder action, to effect a reverse share split that results in a combination of shares of beneficial interest at a ratio of not more than 10 shares into 1 share in any 12-month period.

(4) Within 20 days after the effective date of a reverse share split authorized under this subsection, the real estate investment trust shall give written notice of the reverse share split to each holder of record of the combined shares of beneficial interest as of the effective date.

(g) Articles of amendment shall be executed for the real estate investment trust in the manner required by § 1-301 of this article and filed for record with the Department.

§ 8-501 - 1. Merger

(a) Definitions. --

(1) In this section the following words have the meanings indicated.

(2) "Domestic limited liability company" means a limited liability company formed under the laws of the State.

(3) "Domestic limited partnership" means a partnership formed by 2 or more persons under the laws of the State and having one or more general partners and one or more limited partners.

(4) "Domestic partnership" or "partnership" means a partnership formed under the laws of the State.

(5) "Foreign business trust" means a business trust organized under the laws of the United States, another state of the United States, or a territory, possession, or district of the United States, or under the laws of a foreign country.

(6) "Foreign limited liability company" means a limited liability company formed under the laws of any state other than the State of Maryland or under the laws of a foreign country.

(7) "Foreign limited partnership" means a partnership formed under the laws of any state other than the State of Maryland or under the laws of a foreign country and having as partners one or more general partners and one or more limited partners.

(8) "Foreign partnership" means a partnership formed under the laws of any state, other than this State, or under the laws of a foreign country.

(9) "Maryland real estate investment trust" means a real estate investment trust in compliance with the provisions of this title.

(b) Merger authorized. -- Unless the declaration of trust provides otherwise, a Maryland real estate investment trust may merge into a Maryland or foreign business trust, into a Maryland or foreign corporation having capital stock, into a domestic or foreign partnership, or into a domestic or foreign limited partnership or limited liability company; or one or more such business trusts, such corporations, domestic or foreign partnerships, domestic or foreign limited partnerships, or limited liability companies may merge into it.

(c) Approval generally; exceptions. -- A merger shall be approved in the manner provided by this section, except that:

(1) A foreign business trust, a Maryland business trust, other than a Maryland real estate investment trust, a corporation, a domestic or foreign partnership, or a domestic or foreign limited partnership party to the merger shall have the merger advised, authorized, and approved in the manner and by the vote required by its declaration of trust, governing instrument, charter, or partnership agreement and the laws of the place where it is organized;

(2) (i) A foreign limited liability company party to the merger shall have the merger advised, authorized, and approved in the manner and by the vote required by the laws of the place where it is organized; and

(ii) A domestic limited liability company shall have the merger approved in the manner provided under § 4A-703 of this article;

(3) A merger need be approved by a Maryland real estate investment trust successor only by a majority of its entire board of trustees if the merger does not reclassify or change the terms of any class or series of its shares that are outstanding immediately before the merger becomes effective or otherwise amend its declaration of trust and the number of shares of such class or series outstanding immediately after the effective time of the merger does not increase by more than 20 percent of the number of its shares of the class or series of shares outstanding immediately before the merger becomes effective; and

(4) A merger of a subsidiary with or into its parent need be approved only in the manner provided in § 3-106 of this article, provided the parent owns at least 90 percent of the subsidiary.

(d) Trustees' actions. -- The board of trustees of each Maryland real estate investment trust proposing to merge shall:

(1) Adopt a resolution that declares the proposed transaction is advisable on substantially the terms and conditions set forth or referred to in the resolution; and

(2) Direct that the proposed transaction be submitted for consideration at either an annual or special meeting of shareholders.

(e) Notice to shareholders. -- Notice which states that a purpose of a meeting will be to act upon the proposed merger shall be given by each Maryland real estate investment trust in the manner provided for corporations by Title 2 of this article to:

(1) Each of its shareholders entitled to vote on the proposed transaction; and

(2) Each of its shareholders not entitled to vote on the proposed transaction, except the shareholders of a successor in a merger if the merger does not alter the contract rights of their shares as expressly set forth in the declaration of trust.

(f) Submission of proposed transaction to shareholders. -- An agreement of merger may require that the proposed transaction shall be submitted to the shareholders, even if the board of trustees determines at any time after having declared the advisability of the proposed transaction that the proposed transaction is no longer advisable and either makes no recommendation to the shareholders or recommends that the shareholders reject the proposed transaction.

(g) Shareholders' approval. -- Except as provided in § 8-202(c) of this title, the proposed merger shall be approved by the shareholders of each Maryland real estate investment trust by the affirmative vote of two thirds of all the votes entitled to be cast on the matter.

(h) Articles of merger. -- Articles of merger containing provisions required by § 3-109 of this article and such other provisions as may be permitted by that section shall be:

(1) Executed for each party to the articles in the manner required by Title 1 of this article; and

(2) Filed for the record with the Department.

(i) Abandonment of proposed merger. --

(1) A proposed merger may be abandoned before the effective date of the articles:

(i) If the articles so provide, by majority vote of the entire board of trustees of any one business trust party to the articles or of the entire board of directors of any one corporation party to the articles;

(ii) Unless the articles provide otherwise, by majority vote of the entire board of trustees of each Maryland real estate investment trust party to the articles; or

(iii) By unanimous consent of the members of a limited liability company party to the articles.

(2) If the articles have been filed with the Department, notice of the abandonment shall be given promptly to the Department.

(3) (i) If the proposed merger is abandoned as provided in this subsection, no legal liability arises under the articles.

(ii) An abandonment does not prejudice the rights of any person under any other contract made by a business trust, corporation, or limited liability company party to the proposed articles in connection with the proposed merger.

(j) Objecting shareholders. -- Each shareholder of a Maryland real estate investment trust objecting to a merger of the Maryland real estate investment trust shall have the same rights as an objecting stockholder of a Maryland corporation under Title 3, Subtitle 2 of this article and under the same procedures.

(k) Certificates of merger. --

(1) The Department shall prepare certificates of merger that specify:

(i) The name of each party to the articles;

(ii) The name of the successor and the location of its principal office in this State or, if it has none, its principal place of business; and

(iii) The time the articles are accepted for record by the Department.

(2) In addition to any other provision of law with respect to recording, the Department shall send one certificate each to the clerk of the circuit court for each county where the articles show that a merging business trust, corporation, partnership, limited partnership, or limited liability company other than the successor owns an interest in land.

(3) On receipt of a certificate, a clerk promptly shall record it with the land records.

(l) Property certificates. --

(1) In order to keep the land assessment records current in each county, the Department shall require a business trust, corporation, partnership, limited partnership, or limited liability company to submit with the articles a property certificate for each county where a merging business trust, corporation, partnership, limited partnership, or limited liability company other than the successor owns an interest in land.

(2) A property certificate is not required with respect to any property in which the only interest owned by the merging business trust, corporation, partnership, limited partnership, or limited liability company is a security interest.

(3) The property certificate shall be in the form and number of copies which the Department requires and may include the certificate of the Department required by subsection (k) of this section.

(4) (i) The property certificate shall provide a deed reference or other description sufficient to identify the property.

(ii) The Department shall indicate on the certificate the time the articles are accepted for record and send a copy of it to the chief assessor of the county where the property is located.

(5) A transfer, vesting, or devolution of title to the property is not invalidated or otherwise affected by any error or defect in the property certificate, failure to file it, or failure by the Department to act on it.

(m) Time merger effective -- Maryland real estate investment trust successor. -- If the successor in a merger is a Maryland real estate investment trust, a merger is effective as of the later of:

(1) The time the Department accepts the articles of merger for record; or

(2) The time established under the articles, not to exceed 30 days after the articles are accepted for record.

(n) Time merger effective -- Successor other than Maryland real estate investment trust. --

(1) If the successor in a merger is a foreign corporation, foreign partnership, foreign limited partnership, a foreign limited liability company, or a Maryland or foreign business trust, other than a Maryland real estate investment trust, the merger is effective as of the later of:

(i) The time specified by the law of the place where the successor is organized; or

(ii) The time the Department accepts the articles of merger for record.

(2) A foreign successor in a merger shall file for record with the Department a certificate from the place where it is organized which certifies the date the articles of merger were filed. However, the failure to file this certificate does not invalidate the merger.

(o) Effect of merger. --

(1) Consummation of a merger has the effects provided in this subsection.

(2) The separate existence of each business trust, corporation, partnership, limited partnership, or limited liability company party to the articles, except the successor, ceases.

(3) The shares of each business trust party to the articles which are to be converted or exchanged under the terms of the articles cease to exist, subject to the rights of an objecting shareholder under subsection (j) of this section.

(4) In addition to any other purposes and powers set forth in the articles, if the articles provide, the successor has the purposes and powers of each party to the articles.

(5) (i) The assets of each party to the articles, including any legacies which it would have been capable of taking, transfer to, vest in, and devolve on the successor without further act or deed.

(ii) Confirmatory deeds, assignments, or similar instruments to evidence the transfer may be executed and delivered at any time in the name of the transferring party to the articles by its last acting officers or trustees or by the appropriate officers or trustees of the successor.

(6) (i) The successor is liable for all the debts and obligations of each nonsurviving party to the articles. An existing claim, action, or proceeding pending by or against any nonsurviving party to the articles may be prosecuted to judgment as if the merger had not taken place, or, on motion of the successor or any party, the successor may be substituted as a party and the judgment against the nonsurviving party to the articles constitutes a lien on the property of the successor.

(ii) A merger does not impair the rights of creditors or any liens on the property of any business trust, corporation, partnership, limited partnership, or limited liability company party to the articles.

§ 8-501 - 2. Restatement of declaration of trust

(a) General rule. -- If authorized by a majority of the entire board of trustees, a real estate investment trust may restate its declaration of trust as provided in this section.

(b) Articles of restatement. -- Articles of restatement containing provisions required by § 2-608 of this article and such other provisions as may be permitted by that section shall be:

(1) Executed for each party to the articles in the manner required by Title 1 of this article; and

(2) Filed for record with the Department.

§ 8-501 - 3. Articles of amendment and restatement

(a) Approval. -- A complete restatement of the declaration of trust may be submitted for approval in the manner required for an amendment of the declaration of trust to a meeting of the real estate investment trust's shareholders or trustees.

(b) Amendments. -- If the restatement is submitted for approval in the manner required for an amendment to the declaration of trust, any amendments to the declaration of trust approved at the meeting may be included in the restatement.

(c) Contents. -- Articles of amendment and restatement shall include the provisions required to be included in both articles of amendment and articles of restatement.

(d) Execution and filing. -- Articles of amendment and restatement containing provisions required by § 2-609 of this article and such other provisions as may be permitted by that section shall be:

(1) Executed for each party to the articles in the manner required by Title 1 of this article; and

(2) Filed for record with the Department.