<section article="gca" article_name="Corporations and Associations" number="2-101" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>Except as otherwise expressly provided by law, a corporation may be formed under this title for any lawful purposes.</text> </level> <level label="b"> <text>If the purpose for which a corporation is organized or its form makes it subject to a special provision of law, the corporation also shall comply with that provision.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-102" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>Except as provided elsewhere in this section, in order to form a corporation, one or more adult individuals acting as incorporators shall:</text> <level label="1"> <text>Sign and acknowledge articles of incorporation; and</text> </level> <level label="2"> <text>File them for record with the Department.</text> </level> </level> <level label="b"> <level label="1"> <text>A proposed corporation becomes a body corporate under the name and subject to the purposes, conditions, and provisions stated in the articles of incorporation, effective as of the later of:</text> <level label="i"> <text>The time the Department accepts the articles for record; or</text> </level> <level label="ii"> <text>The time established under the articles, not later than 30 days after the Department accepts the articles for record.</text> </level> </level> <level label="2"> <text>Except in a proceeding by the State for forfeiture of a corporation’s charter, acceptance of the articles for record by the Department is conclusive evidence of the formation of the corporation.</text> </level> <level label="3"> <level label="i"> <text>The Department may not accept articles of incorporation from a fire or rescue organization to be located in Frederick County for the purpose of providing fire or rescue service in Frederick County unless the articles are accompanied by a written resolution of the governing body of Frederick County indicating approval of the proposed incorporation.</text> </level> <level label="ii"> <text>Incorporated municipalities in Frederick County with primary responsibility for governmental funding for fire service shall within their jurisdiction hold those powers assigned to the governing body of Frederick County in this paragraph.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-103" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <text>Unless otherwise provided by law or its charter, a Maryland corporation has the general powers, whether or not they are set forth in its charter, to:</text> <level label="1"> <text>Have perpetual existence;</text> </level> <level label="2"> <text>Sue, be sued, complain, and defend in all courts;</text> </level> <level label="3"> <text>Have, use, alter, or abandon a corporate seal;</text> </level> <level label="4"> <text>Transact its business, carry on its operations, and exercise the powers granted by this article in any state, territory, district, and possession of the United States and in any foreign country;</text> </level> <level label="5"> <text>Make contracts and guarantees, incur liabilities, and borrow money;</text> </level> <level label="6"> <text>Sell, lease, exchange, transfer, convey, mortgage, pledge, and otherwise dispose of any or all of its assets;</text> </level> <level label="7"> <text>Issue bonds, notes, and other obligations and secure them by mortgage or deed of trust of any or all of its assets;</text> </level> <level label="8"> <text>Acquire by purchase or in any other manner, and take, receive, own, hold, use, employ, improve, and otherwise deal with any interest in real or personal property, wherever located;</text> </level> <level label="9"> <text>Purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, loan, pledge, or otherwise dispose of and otherwise use and deal in and with stock and other interests in and obligations of other Maryland and foreign corporations, associations, partnerships, and individuals;</text> </level> <level label="10"> <text>Subject to the limitations provided in this article, acquire any of its own stock, bonds, notes, and other obligations and securities;</text> </level> <level label="11"> <text>Invest its surplus funds, lend money from time to time in any manner which may be appropriate to enable it to carry on the operations or fulfill the purposes specified in its charter, and take and hold real and personal property as security for the payment of funds so invested or loaned;</text> </level> <level label="12"> <text>Be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other enterprise;</text> </level> <level label="13"> <text>Make gifts or contributions in cash, other property, or stock or other securities of the corporation to or for the use of:</text> <level label="i"> <text>The United States, this State, another state of the United States, a territory, possession, or district of the United States, or any institution, agency, or political subdivision of any of them; and</text> </level> <level label="ii"> <text>Any governmental or other organization, whether inside or outside the United States, for religious, charitable, scientific, civic, public welfare, literary, or educational purposes;</text> </level> </level> <level label="14"> <text>Elect its officers and appoint its agents, define their duties, determine their compensation, and adopt and carry into effect employee and officer benefit plans;</text> </level> <level label="15"> <text>Renounce, in its charter or by resolution of its board of directors, any interest or expectancy of the corporation in, or in being offered an opportunity to participate in, business opportunities or classes or categories of business opportunities that are:</text> <level label="i"> <text>Presented to the corporation; or</text> </level> <level label="ii"> <text>Developed by or presented to one or more of its directors or officers;</text> </level> </level> <level label="16"> <text>Adopt, alter, and repeal bylaws not inconsistent with law or its charter for the regulation and management of its affairs;</text> </level> <level label="17"> <text>Exercise generally the powers set forth in its charter and those granted by law; and</text> </level> <level label="18"> <text>Do every other act not inconsistent with law which is appropriate to promote and attain the purposes set forth in its charter.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-104" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>The articles of incorporation shall include:</text> <level label="1"> <text>The name and address of each incorporator and a statement that each incorporator is:</text> <level label="i"> <text>18 years old or older; and</text> </level> <level label="ii"> <text>Forming a corporation under the general laws of the State of Maryland;</text> </level> </level> <level label="2"> <text>The name of the corporation;</text> </level> <level label="3"> <text>The purposes for which the corporation is formed or a statement that the corporation may engage in any lawful business or other activity;</text> </level> <level label="4"> <text>The address of the principal office of the corporation;</text> </level> <level label="5"> <text>The name and address of the resident agent of the corporation;</text> </level> <level label="6"> <level label="i"> <text>The total number of shares of stock of all classes which the corporation has authority to issue;</text> </level> <level label="ii"> <text>The number of shares of stock of each class;</text> </level> <level label="iii"> <text>The par value of the shares of stock of each class or a statement that the shares are without par value; and</text> </level> <level label="iv"> <text>If there are any shares of stock with par value, the aggregate par value of all the shares of all classes;</text> </level> </level> <level label="7"> <text>If the stock is divided into classes as permitted by § 2-105 of this subtitle, a description of each class including any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption; and</text> </level> <level label="8"> <text>The number of directors and the names of those individuals who will serve as directors until their successors are elected and qualify.</text> </level> </level> <level label="b"> <text>The articles of incorporation may include:</text> <level label="1"> <text>Any provision not inconsistent with law that defines, limits, or regulates the powers of the corporation, its directors and stockholders, any class of its stockholders, or the holders of any bonds, notes, or other securities that it may issue;</text> </level> <level label="2"> <text>Any restriction not inconsistent with law on the transferability of stock of any class;</text> </level> <level label="3"> <text>Any provision authorized by this article to be included in the bylaws;</text> </level> <level label="4"> <text>Any provision that requires for any purpose the concurrence of a greater proportion of the votes of all classes or series or of any class or series of stock than the proportion required by this article for that purpose;</text> </level> <level label="5"> <text>A provision that requires for any purpose a lesser proportion of the votes of all classes or series or of any class or series of stock than the proportion required by this article for that purpose, but this proportion may not be less than a majority of all the votes entitled to be cast on the matter;</text> </level> <level label="6"> <text>A provision that divides its directors into classes or series and specifies the term of office of each class or series;</text> </level> <level label="7"> <text>A provision for minority representation through cumulative voting in the election of directors and the terms on which cumulative voting rights may be exercised;</text> </level> <level label="8"> <text>A provision that varies in accordance with § 2–405.2 of this title the standards for liability of the directors and officers of a corporation for money damages;</text> </level> <level label="9"> <text>A provision that allows the board of directors, in considering a potential acquisition of control of the corporation, to consider the effect of the potential acquisition of control on:</text> <level label="i"> <text>Stockholders, employees, suppliers, customers, and creditors of the corporation; and</text> </level> <level label="ii"> <text>Communities in which offices or other establishments of the corporation are located;</text> </level> </level> <level label="10"> <text>A provision that contains a future effective date for the articles of incorporation that is not later than 30 days after the articles are accepted by the Department for record; and</text> </level> <level label="11"> <text>If adopted after May 31, 1908, a provision stating that:</text> <level label="i"> <text>The existence of the corporation is limited to a specific period; or</text> </level> <level label="ii"> <text>The existence of the corporation shall be limited to a specific period that shall be continued, extended, or terminated on the occurrence of an event, an action, or a determination set forth in the charter.</text> </level> </level> </level> <level label="c"> <text>The inclusion or omission of a provision in the charter that allows the board of directors to consider the effect of a potential acquisition of control on persons specified in subsection (b)(9) of this section does not create an inference concerning factors that may be considered by the board of directors regarding a potential acquisition of control.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-105" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>A corporation may provide by its charter:</text> <level label="1"> <text>For one or more classes or series of stock, the voting rights of each class or series, and any restriction on or denial of these rights;</text> </level> <level label="2"> <text>That the holders of one or more classes or series of stock have exclusive voting rights on a charter amendment that would alter only the contract rights, as expressly set forth in the charter, of the specified class or series of stock;</text> </level> <level label="3"> <text>As to each class or series of stock, either the par value of the shares or that the shares are without par value;</text> </level> <level label="4"> <level label="i"> <text>That the corporation shall set apart dividends for or pay dividends to the holders of a specified class or series of stock before any dividends are set apart for or paid to the holders of another class or series of stock;</text> </level> <level label="ii"> <text>The rate, amount, and time of payment of the dividends; and</text> </level> <level label="iii"> <text>Whether the dividends are cumulative, cumulative to a limited extent, or noncumulative;</text> </level> </level> <level label="5"> <text>That any specified class or series of stock is preferred over another class or series as to its distributive share of the assets on voluntary or involuntary liquidation of the corporation and the amount of the preference;</text> </level> <level label="6"> <text>That any specified class or series of stock may be redeemed at the option of the corporation or of the holders of the stock and the terms and conditions of redemption, including the time and price of redemption;</text> </level> <level label="7"> <text>That any specified class or series of stock is convertible into shares of stock of one or more other classes or series and the terms and conditions of conversion;</text> </level> <level label="8"> <text>That the holders of any specified securities issued or to be issued by the corporation have any voting or other rights which, by law, are or may be conferred on stockholders;</text> </level> <level label="9"> <text>For any other preferences, rights, restrictions, including restrictions on transferability, and qualifications not inconsistent with law;</text> </level> <level label="10"> <text>That the board of directors may classify or reclassify any unissued stock from time to time by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of the stock;</text> </level> <level label="11"> <level label="i"> <text>For any grant to the holders of the stock of the corporation, including a specified class or series of stock, of the preemptive right to subscribe to:</text> <level label="1"> <text>Any or all additional issues of the stock; or</text> </level> <level label="2"> <text>Any securities of the corporation convertible into additional issues of stock; or</text> </level> </level> <level label="ii"> <text>For any definition or limitation of the preemptive rights of stockholders to acquire additional stock or securities in the corporation;</text> </level> </level> <level label="12"> <text>For restrictions on transferability or ownership for any purpose, including restrictions designed to permit a corporation to qualify as:</text> <level label="i"> <text>A real estate investment trust under the Internal Revenue Code or regulations adopted under the Internal Revenue Code; or</text> </level> <level label="ii"> <text>An investment company under the Investment Company Act of 1940 or regulations adopted under the Investment Company Act of 1940; and</text> </level> </level> <level label="13"> <text>That the board of directors, with the approval of a majority of the entire board, and without action by the stockholders, may amend the charter to increase or decrease the aggregate number of shares of stock of the corporation or the number of shares of stock of any class or series that the corporation has authority to issue.</text> </level> </level> <level label="b"> <level label="1"> <text>In this subsection, “facts ascertainable outside the charter” includes:</text> <level label="i"> <text>An action or determination by any person, including the corporation, its board of directors, an officer or agent of the corporation, and any other person affiliated with the corporation;</text> </level> <level label="ii"> <text>The contents of any agreement to which the corporation is a party or any other document; and</text> </level> <level label="iii"> <text>Any other event.</text> </level> </level> <level label="2"> <text>Any of the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of any class or series of stock may be made dependent upon facts ascertainable outside the charter and may vary among holders thereof, provided that the manner in which such facts or variations shall operate upon the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of such class or series of stock is clearly and expressly set forth in the charter.</text> </level> </level> <level label="c"> <text>Notwithstanding subsection (a)(13) of this section, the board of directors of a corporation that is registered or intends to register as an open–end company under the Investment Company Act of 1940, after the registration as an open–end company takes effect, may increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class that the corporation has authority to issue, unless a provision has been included in the charter of the corporation after July 1, 1987, prohibiting an action by the board of directors to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class that the corporation has authority to issue.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-106" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>A corporation shall record its name with the Department as provided in Title 1, Subtitle 5 of this article.</text> </level> <level label="b"> <text>The Department may permit a foreign corporation that has a name prohibited by Title 1, Subtitle 5 of this article to register or qualify to do business in this State, if the foreign corporation agrees:</text> <level label="1"> <text>To transact business in this State only under a disclosed assumed name that meets the requirements of Title 1, Subtitle 5 of this article; and</text> </level> <level label="2"> <text>To use the assumed name in all of its dealings with the Department and the conduct of its affairs in this State.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-108" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>Each Maryland corporation shall have:</text> <level label="1"> <text>A principal office in this State; and</text> </level> <level label="2"> <text>A resident agent.</text> </level> </level> <level label="b"> <level label="1"> <text>A corporation may designate or change its resident agent or principal office by filing for record with the Department a certified copy of a resolution of its board of directors which authorizes the designation or change.</text> </level> <level label="2"> <text>A corporation may change the address of its resident agent by filing for record with the Department a statement of the change signed by its president or one of its vice-presidents.</text> </level> <level label="3"> <text>A designation or change of a corporation’s principal office or its resident agent or his address under this subsection is effective when the Department accepts the resolution or statement for record.</text> </level> </level> <level label="c"> <level label="1"> <text>A resident agent who changes his address in the State may notify the Department of the change by filing for record with the Department a statement of the change signed by him or on his behalf.</text> </level> <level label="2"> <text>The statement shall include:</text> <level label="i"> <text>The names of the corporations for which the change is effective;</text> </level> <level label="ii"> <text>His old and new addresses; and</text> </level> <level label="iii"> <text>The date on which the change is effective.</text> </level> </level> <level label="3"> <text>If the old and new addresses of the resident agent are the same as the old and new addresses of the principal office of the corporation, the statement may include a change of address for the principal office if:</text> <level label="i"> <text>The resident agent notifies the corporation in writing that the statement will be filed; and</text> </level> <level label="ii"> <text>The statement recites that he has done so.</text> </level> </level> <level label="4"> <text>The change of address of the resident agent or principal office is effective when the Department accepts the statement for record.</text> </level> </level> <level label="d"> <level label="1"> <text>A resident agent may resign by filing with the Department a counterpart or photocopy of his signed resignation.</text> </level> <level label="2"> <text>Unless a later time is specified in the resignation, it is effective:</text> <level label="i"> <text>At the time it is filed with the Department, if the corporation has appointed a successor resident agent; or</text> </level> <level label="ii"> <text>Ten days after it is filed with the Department, if the corporation has not appointed a successor resident agent.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-109" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <level label="1"> <text>After the Department accepts the articles of incorporation for record, at the call of a majority of the directors named in the articles, the directors shall hold an organization meeting of the board of directors, to adopt bylaws, elect officers, and transact any other business which may come before the meeting.</text> </level> <level label="2"> <text>The directors who call the meeting shall notify each director in writing of the time and place of the meeting at least three days before it is held.</text> </level> </level> <level label="b"> <text>After the organization meeting of the board of directors, the power to adopt, alter, and repeal the bylaws of the corporation is vested in the stockholders except to the extent that the charter or bylaws vest it in the board of directors.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-110" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>The bylaws may contain any provisions not inconsistent with law or the charter of the corporation for the regulation and management of the affairs of the corporation.</text> </level> <level label="b"> <text>The bylaws may divide the directors of the corporation into classes and specify the term of office of each class.</text> </level> <level label="c"> <level label="1"> <text>In this subsection, “facts ascertainable outside the bylaws” include:</text> <level label="i"> <text>An action or determination by any person, including the corporation, its board of directors, an officer or agent of the corporation, and any other person affiliated with the corporation;</text> </level> <level label="ii"> <text>Any agreement or other document; or</text> </level> <level label="iii"> <text>Any other event.</text> </level> </level> <level label="2"> <text>Any provision of the bylaws permitted under subsection (a) of this section may be made dependent upon facts ascertainable outside the bylaws.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-111" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>Each corporation shall maintain, or cause to be maintained on its behalf, correct and complete:</text> <level label="1"> <text>Books and records of its accounts and transactions; and</text> </level> <level label="2"> <text>Minutes of the proceedings of its stockholders and board of directors and of any executive or other committee when exercising any of the powers of the board of directors.</text> </level> </level> <level label="b"> <level label="1"> <text>The books and records of a corporation may be in written form or in any other form that complies with § 2–114 of this subtitle.</text> </level> <level label="2"> <text>Minutes shall be recorded in written form but may be maintained in the form of a reproduction or in any other form that complies with § 2–114 of this subtitle.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-112" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Closed-end investment company” means a corporation registered as a closed-end investment company under the Investment Company Act of 1940.</text> </level> <level label="3"> <text>“Open-end investment company” means a corporation registered as an open-end investment company under the Investment Company Act of 1940.</text> </level> </level> <level label="b"> <text>Notwithstanding any requirement of § 2-604(b) or § 2-607(a)(1) of this title or § 3-403(b) of this article, the charter of a closed-end investment company or any prospectus filed by the closed-end investment company pursuant to the federal Investment Company Act of 1940 may require the company to submit to its stockholders, at an annual or special meeting of the stockholders, a proposal to amend its charter to convert to an open-end investment company, to dissolve, to require the closed-end investment company to make one or more tender offers for its shares, or to take other action intended to eliminate any trading discount to net asset value of the closed-end investment company’s shares, even if the board of directors fails to recommend the proposal or declare the proposal advisable or recommends that the stockholders reject it.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-113" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>The charter or bylaws of a corporation with capital stock may not impose liability on a stockholder who is a party to an internal corporate claim for the attorney’s fees or expenses of the corporation or any other party in connection with an internal corporate claim.</text> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the charter or bylaws of a corporation may require, consistent with applicable jurisdictional requirements, that any internal corporate claim be brought only in:</text> <level label="i"> <text>Specified circuit courts of the State or a federal court sitting in the State; or</text> </level> <level label="ii"> <level label="1"> <text>Courts sitting in one or more specified jurisdictions outside the State; and</text> </level> <level label="2"> <text>Specified circuit courts of the State or a federal court sitting in the State.</text> </level> </level> </level> <level label="2"> <level label="i"> <text>This paragraph does not apply to a provision contained in the charter or bylaws of a corporation on October 1, 2017, unless and until the provision is altered or repealed by an amendment to the charter or bylaws of the corporation, as applicable.</text> </level> <level label="ii"> <text>The charter or bylaws of a corporation may not prohibit bringing an internal corporate claim in the courts of this State or a federal court sitting in this State.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-114" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>This section applies to any books or records maintained by or on behalf of a corporation, including:</text> <level label="1"> <text>Bylaws;</text> </level> <level label="2"> <text>Minutes of the proceedings of the stockholders;</text> </level> <level label="3"> <text>Annual statements of affairs;</text> </level> <level label="4"> <text>Stock ledgers;</text> </level> <level label="5"> <text>Records of issuances, transfers, and cancellations of shares of stock; and</text> </level> <level label="6"> <text>Voting trust agreements.</text> </level> </level> <level label="b"> <text>The records of a corporation may be maintained by means of any information storage device, method, or electronic network or database, including a distributed electronic network or database, if:</text> <level label="1"> <text>The records can be converted within a reasonable time into clearly legible written form for visual inspection; and</text> </level> <level label="2"> <text>With respect to records maintained on an electronic ledger or distributed electronic ledger, the records can be used for the purpose of:</text> <level label="i"> <text>Making a proper determination with respect to stockholders under § 2–511(a) of this title; and</text> </level> <level label="ii"> <text>Preparing a list of stockholders in accordance with § 2–513(b)(2) of this title.</text> </level> </level> </level> <level label="c"> <text>A corporation shall convert a record maintained in accordance with subsection (b) of this section into a clearly legible written form on request of any person who is entitled to inspect the record under this title.</text> </level> <level label="d"> <level label="1"> <text>This subsection applies to records of a corporation that are maintained in accordance with subsection (b) of this section.</text> </level> <level label="2"> <text>If a written form accurately portrays a record, a clearly legible written form prepared from or by means of the information storage device, method, or electronic network or database used to maintain the record shall be admissible as evidence and accepted for all other purposes to the same extent that an original written record of the same information would have been.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-115" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>This section applies to the electronic transmission, by means of an electronic network or database, including a distributed electronic network or database, of any communication, consent, or request under this title, including:</text> <level label="1"> <text>A statement of the information, in accordance with § 2–210(c) of this title;</text> </level> <level label="2"> <text>An annual statement of the affairs of a corporation, in accordance with § 2–313(b) of this title;</text> </level> <level label="3"> <text>Corporate documents, in accordance with § 2–512 of this title; and</text> </level> <level label="4"> <text>Any notice to a stockholder.</text> </level> </level> <level label="b"> <text>An electronic transmission described under subsection (a) of this section is not effective until the later of:</text> <level label="1"> <text>The posting of the information to the electronic network or database; or</text> </level> <level label="2"> <text>The giving of a separate notice to the intended recipient of the information that the information has been posted to the electronic network or database.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-116" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>In this section, “emergency” means a situation in which a quorum of the board of directors cannot readily be assembled because of some catastrophic event.</text> </level> <level label="b"> <level label="1"> <text>Unless the charter provides otherwise, the bylaws may contain provisions to be effective only during an emergency.</text> </level> <level label="2"> <text>The emergency provisions may be adopted only in advance of an emergency.</text> </level> <level label="3"> <text>The emergency provisions may make all provisions necessary for managing the corporation during an emergency, including:</text> <level label="i"> <text>Procedures for calling a meeting of the board of directors;</text> </level> <level label="ii"> <text>Quorum requirements for a meeting; and</text> </level> <level label="iii"> <text>Designation of additional or substitute directors.</text> </level> </level> </level> <level label="c"> <text>All provisions of the bylaws not inconsistent with the emergency provisions remain effective during an emergency.</text> </level> <level label="d"> <text>Any corporate act taken in good faith and in accordance with the emergency provisions:</text> <level label="1"> <text>Binds the corporation; and</text> </level> <level label="2"> <text>May not be used to impose liability on a director, an officer, an employee, or an agent of the corporation.</text> </level> </level> <level label="e"> <text>The emergency provisions may state that the standard of conduct required by § 2–405.1 of this title shall apply to the conduct of a director acting pursuant to the emergency provisions.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-117" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>In this section, “emergency” has the meaning stated in § 2–116 of this subtitle.</text> </level> <level label="b"> <text>During an emergency, unless the bylaws contain emergency provisions providing otherwise, notice of a meeting of the board of directors may be given:</text> <level label="1"> <text>Only to those directors whom it is practicable to reach in the circumstances;</text> </level> <level label="2"> <text>In any practicable manner given the circumstances; and</text> </level> <level label="3"> <text>With shorter notice as is reasonable in the circumstances.</text> </level> </level> <level label="c"> <text>Any corporate act taken in good faith under this section during an emergency:</text> <level label="1"> <text>Binds the corporation; and</text> </level> <level label="2"> <text>May not be used to impose liability on a director, an officer, an employee, or an agent of the corporation.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-118" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="1" subtitle_name="Formation and Powers"> <level label="a"> <text>In this section, “emergency” means a situation in which it is impracticable to convene a meeting of stockholders in accordance with the Maryland General Corporation Law or the bylaws or as specified in a notice for the meeting previously given, because of some catastrophic event.</text> </level> <level label="b"> <text>During an emergency, unless the bylaws contain emergency provisions providing otherwise, the board of directors may:</text> <level label="1"> <text>Postpone a meeting of stockholders for which notice has been given; or</text> </level> <level label="2"> <text>Authorize stockholders to participate in a meeting by any means of remote communication authorized by § 2–503(c)(2) of this title.</text> </level> </level> <level label="c"> <text>The corporation shall give notice to stockholders of any action taken under this section, including any new date, time, or place of a meeting:</text> <level label="1"> <text>In any practicable manner given the circumstances; and</text> </level> <level label="2"> <text>With shorter notice as is reasonable in the circumstances.</text> </level> </level> <level label="d"> <text>Any corporate act taken in good faith under this section during an emergency:</text> <level label="1"> <text>Binds the corporation; and</text> </level> <level label="2"> <text>May not be used to impose liability on a director, an officer, an employee, or an agent of the corporation.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-201" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>Subject to the provisions of this subtitle, a corporation from time to time may issue:</text> <level label="1"> <text>Stock of any class authorized by its charter; and</text> </level> <level label="2"> <text>Securities convertible into stock of any class authorized by its charter.</text> </level> </level> <level label="b"> <text>The authorization of stock convertible into other stock or securities convertible into stock constitutes an authorization of the stock into which the stock or securities are convertible, without further specific authorization in the charter.</text> </level> <level label="c"> <level label="1"> <text>The board of directors of a corporation may, in its sole discretion:</text> <level label="i"> <text>Set the terms and conditions of rights, options, or warrants under a stockholder rights plan; and</text> </level> <level label="ii"> <text>Issue rights, options, or warrants under a stockholder rights plan to designated persons or classes of persons.</text> </level> </level> <level label="2"> <text>The rights, options, or warrants under paragraph (1) of this subsection may, in the sole discretion of the board of directors, include any limitation, restriction, or condition that:</text> <level label="i"> <text>Precludes, limits, invalidates, or voids the exercise, transfer, or receipt of the rights, options, or warrants by designated persons or classes of persons in specified circumstances; or</text> </level> <level label="ii"> <text>Limits for a period not to exceed 180 days the power of a future director, as defined in the stockholder rights plan, to vote for the redemption, modification, or termination of the rights, options, or warrants.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-202" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>A subscription for stock of a corporation which is not yet formed is irrevocable for a period of 3 months, unless:</text> <level label="1"> <text>The subscription agreement provides otherwise; or</text> </level> <level label="2"> <text>Every subscriber consents to the revocation of the subscription.</text> </level> </level> <level label="b"> <text>Unless the subscription agreement provides otherwise, a subscription is not void or unenforceable solely because less than all of the authorized stock is subscribed for.</text> </level> <level label="c"> <text>Unless the subscription agreement provides otherwise, a subscription for stock, whether made before or after the corporation is formed, shall be paid in full or in installments at the times set by the board of directors.</text> </level> <level label="d"> <text>Unless the subscription agreement provides otherwise, a subscriber has no voting or other rights with respect to the stock subscribed for until the stock is issued and fully paid.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-203" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>Before the issuance of stock or convertible securities, the board of directors shall adopt a resolution that:</text> <level label="1"> <text>Authorizes the issuance;</text> </level> <level label="2"> <text>Sets the minimum consideration for the stock or convertible securities or a formula for its determination; and</text> </level> <level label="3"> <text>Fairly describes any consideration other than money.</text> </level> </level> <level label="b"> <text>In the absence of actual fraud in the transaction, the minimum consideration stated in the charter or determined by the board of directors in its resolution is conclusive for all purposes.</text> </level> <level label="c"> <text>For purposes of this section, the consideration for stock issued as a stock dividend is the resulting capitalization of surplus.</text> </level> <level label="d"> <text>This section does not apply to the issuance of stock or convertible securities as part of:</text> <level label="1"> <text>A reclassification of stock effected by amendment of the charter; or</text> </level> <level label="2"> <text>A consolidation, merger, share exchange, or conversion, including a consolidation, merger, share exchange, or conversion to which a wholly owned subsidiary of the corporation is a party.</text> </level> </level> <level label="e"> <text>If its issuance is authorized in accordance with this subtitle, stock with par value and securities convertible into stock with par value may be issued as full paid and nonassessable even if the price or value of the consideration received is less than the par value of the stock issued or the stock into which the securities are convertible.</text> </level> <level label="f"> <text>Notwithstanding any other provision of this section or § 2–204 or § 2–206 of this subtitle, a corporation may issue stock or other securities of the corporation pursuant to § 2–103(13) of this title without consideration of any kind.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-204" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>A corporation may not issue stock or convertible securities in violation of a limitation or restriction contained in its charter or bylaws.</text> </level> <level label="b"> <text>If stock of the corporation is outstanding and entitled to be voted at the time the board of directors adopts a resolution authorizing the issuance of additional stock or convertible securities, the corporation may not issue the stock or the convertible securities unless:</text> <level label="1"> <text>The charter permits the board of directors to authorize the issuance;</text> </level> <level label="2"> <text>The charter does not require stockholder approval of the issuance, and the actual value of the consideration to be received by the corporation, as determined by the board of directors or as set forth in the charter, is at least equal to:</text> <level label="i"> <text>The par value of the stock to be issued;</text> </level> <level label="ii"> <text>In the case of stock without par value, the stated capital per share of the shares of the same class then outstanding; or</text> </level> <level label="iii"> <text>In the case of convertible securities, the par value or the stated capital per share, as the case may be, of the stock into which the convertible securities are convertible, if greater than the par value, stated capital per share, or principal amount of the convertible securities; or</text> </level> </level> <level label="3"> <level label="i"> <text>The issuance as authorized by the board of directors was submitted for approval at either an annual or a special meeting of the stockholders;</text> </level> <level label="ii"> <text>Notice stating that a purpose of the meeting will be to act on the proposed issuance was given in the manner required by Subtitle 5 of this title to each stockholder entitled to vote on the matter; and</text> </level> <level label="iii"> <text>The issuance was approved by the stockholders.</text> </level> </level> </level> <level label="c"> <text>Unless the charter or bylaws provide otherwise, approval of the stockholders is not required under this section for the issuance of stock as a stock dividend.</text> </level> <level label="d"> <text>If the issuance of stock convertible into other stock or of securities convertible into stock, or the issuance of warrants or options exercisable for stock or convertible securities, is authorized in the manner required by this subtitle for the issuance of the stock into which the stock or securities are convertible or for which the warrants or options are exercisable, the authorization constitutes an authorization of the issuance of the stock into which the stock or securities are convertible or for which the warrants or options are exercisable, without further specific authorization under this subtitle.</text> </level> <level label="e"> <text>This section does not apply to any issuance described in § 2-203(d) of this subtitle.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-205" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>For a corporation incorporated on or after October 1, 1995, unless the charter expressly grants such rights to the stockholder, a stockholder does not have any preemptive right to subscribe to:</text> <level label="1"> <text>Any additional issue of stock; or</text> </level> <level label="2"> <text>Any security convertible into an additional issue of stock.</text> </level> </level> <level label="b"> <text>For a corporation incorporated before October 1, 1995, a stockholder shall have preemptive rights as and to the extent in existence before October 1, 1995, unless and until expressly changed or terminated by charter amendment.</text> </level> <level label="c"> <level label="1"> <text>A stockholder to whom a preemptive right has been granted may waive the preemptive right.</text> </level> <level label="2"> <text>A written waiver of a preemptive right is irrevocable even though it is not supported by consideration.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-206" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>The consideration for the issuance of stock, convertible securities, warrants, or options may consist in whole or in part of:</text> <level label="1"> <text>Money;</text> </level> <level label="2"> <text>Tangible or intangible property;</text> </level> <level label="3"> <text>Labor or services actually performed for the corporation;</text> </level> <level label="4"> <text>A promissory note or other obligation for future payment in money; or</text> </level> <level label="5"> <text>Contracts for labor or services to be performed.</text> </level> </level> <level label="b"> <text>The corporation may place in escrow shares issued for a contract for future labor or services or a promissory note or other obligation for future payment in money, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the labor or services are performed or the note or other obligation for future payment in money is paid. If the labor or services are not performed or the note or other obligation for future payment in money is not paid, the shares escrowed or restricted and the distributions credited may be canceled in whole or in part.</text> </level> <level label="c"> <text>When the corporation receives the consideration for which stock or convertible securities are to be issued, the stock or convertible securities are fully paid and nonassessable.</text> </level> <level label="d"> <text>Notwithstanding any other provision of the Maryland General Corporation Law, a corporation may issue shares of its stock without consideration for the purpose of qualifying the corporation as a real estate investment trust under the Internal Revenue Code.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-208" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <level label="1"> <text>If, under a power contained in the charter, the board of directors classifies or reclassifies any unissued stock by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption, the board shall file articles supplementary for record with the Department.</text> </level> <level label="2"> <text>The corporation may not issue any of the stock that is classified or reclassified prior to the time the articles supplementary are effective, as provided in this section.</text> </level> </level> <level label="b"> <text>Articles supplementary shall include:</text> <level label="1"> <text>A description of the stock, including the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption, as set or changed by the board of directors; and</text> </level> <level label="2"> <text>A statement that the stock has been classified or reclassified by the board of directors under the authority contained in the charter.</text> </level> </level> <level label="c"> <text>Articles supplementary shall be executed in the manner required by Title 1 of this article.</text> </level> <level label="d"> <text>Articles supplementary are effective as of the later of:</text> <level label="1"> <text>The time the Department accepts the articles for record; or</text> </level> <level label="2"> <text>The time established under the articles, not to exceed 30 days after the articles are accepted for record.</text> </level> </level> <level label="e"> <text>Notwithstanding subsection (a)(2) of this section:</text> <level label="1"> <text>The stock issued by a corporation prior to the time the articles supplementary with respect to the stock are effective shall cease to be voidable as a result of the failure to file the articles supplementary at the time the articles supplementary become effective; and</text> </level> <level label="2"> <text>A right or liability accrued by reason of the issuance of stock by a corporation prior to the time the articles supplementary with respect to the stock are effective shall be extinguished at the time the articles supplementary become effective, except to the extent that the person having the right or liability has acted detrimentally in reliance on the right or liability solely by reason of issuance of the stock.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-208.1" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <level label="1"> <text>If the board of directors of a corporation registered as an open–end company under the Investment Company Act of 1940 increases or decreases the aggregate number of shares of stock or the number of shares of stock of any class that the corporation has authority to issue in accordance with § 2–105(c) of this title, the board shall file articles supplementary for record with the Department.</text> </level> <level label="2"> <text>The corporation may not issue any of the newly authorized stock prior to the time the articles supplementary are effective, as provided in this section.</text> </level> </level> <level label="b"> <text>Articles supplementary shall include:</text> <level label="1"> <text>Both as of immediately before the increase or decrease and as increased or decreased:</text> <level label="i"> <text>The total number of shares of stock of all classes that the corporation has authority to issue;</text> </level> <level label="ii"> <text>The number of shares of stock of each class;</text> </level> <level label="iii"> <text>The par value of the shares of stock of each class or a statement that the shares are without par value; and</text> </level> <level label="iv"> <text>If there are any shares of stock with par value, the aggregate par value of all the shares of all classes;</text> </level> </level> <level label="2"> <text>A statement that the corporation is registered as an open-end company under the Investment Company Act of 1940; and</text> </level> <level label="3"> <text>A statement that the total number of shares of capital stock that the corporation has authority to issue has been increased or decreased by the board of directors in accordance with § 2-105(c) of this title.</text> </level> </level> <level label="c"> <text>Articles supplementary shall be executed in the manner required by Title 1 of this article.</text> </level> <level label="d"> <text>Articles supplementary are effective as of the later of:</text> <level label="1"> <text>The time the Department accepts the articles for record; or</text> </level> <level label="2"> <text>The time established under the articles, not to exceed 30 days after the articles are accepted for record.</text> </level> </level> <level label="e"> <text>Notwithstanding subsection (a)(2) of this section:</text> <level label="1"> <text>The stock issued by a corporation prior to the time the articles supplementary with respect to the stock are effective shall cease to be voidable as a result of the failure to file the articles supplementary at the time the articles supplementary become effective; and</text> </level> <level label="2"> <text>A right or liability accrued by reason of the issuance of stock by a corporation prior to the time the articles supplementary with respect to the stock are effective shall be extinguished at the time the articles supplementary become effective, except to the extent that the person having the right or liability has acted detrimentally in reliance on the right or liability solely by reason of issuance of the stock.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-208.2" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <text>If the charter of a corporation registered as an investment company under the Investment Company Act of 1940 creates one or more classes or series of stock, and if separate and distinct records are maintained for the class or series and the assets associated with the class or series are held and accounted for separately from the other assets of the corporation, or assets associated with any other class or series:</text> <level label="1"> <text>The debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to a particular class or series are enforceable against the assets associated with that class or series only, and not against the assets of the corporation generally or any other class or series of stock; and</text> </level> <level label="2"> <text>The debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to the corporation generally or associated with any other class or series are not enforceable against the assets associated with that class or series.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-209" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>Each corporation shall maintain, or cause to be maintained on its behalf, a stock ledger which contains:</text> <level label="1"> <text>The name and address of each stockholder; and</text> </level> <level label="2"> <text>The number of shares of stock of each class or series that the stockholder holds.</text> </level> </level> <level label="b"> <text>The stock ledger may be in written form or in any other form that complies with § 2–114 of this title.</text> </level> <level label="c"> <text>The original or a duplicate of the stock ledger shall be maintained:</text> <level label="1"> <text>By the corporation at the principal office of the corporation or at any other office or agency specified in the bylaws; or</text> </level> <level label="2"> <text>By or on behalf of the corporation in any form that complies with § 2–114 of this title.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-210" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>Except as provided in subsections (b) and (c) of this section, each stockholder is entitled to stock certificates that represent and certify the shares of stock the stockholder holds in the corporation.</text> </level> <level label="b"> <text>A stock certificate may not be issued until the stock represented by it is fully paid.</text> </level> <level label="c"> <level label="1"> <text>Unless the charter or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates.</text> </level> <level label="2"> <text>The authorization under paragraph (1) of this subsection does not affect shares already represented by certificates until they are surrendered to the corporation.</text> </level> <level label="3"> <text>For shares issued without certificates, on request by a stockholder, the corporation shall send the stockholder, without charge, a statement in writing or by electronic transmission of the information required on certificates by § 2–211 of this subtitle.</text> </level> </level> <level label="d"> <text>A corporation may not issue a stock certificate in bearer form.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-211" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>Each stock certificate shall include on its face:</text> <level label="1"> <text>The name of the corporation that issues it;</text> </level> <level label="2"> <text>The name of the stockholder or other person to whom it is issued; and</text> </level> <level label="3"> <text>The class of stock and number of shares it represents.</text> </level> </level> <level label="b"> <text>If the corporation has authority to issue stock of more than one class, the stock certificate shall contain on its face or back a full statement or summary of:</text> <level label="1"> <text>The designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the stock of each class which the corporation is authorized to issue; and</text> </level> <level label="2"> <text>If the corporation is authorized to issue any preferred or special class in series:</text> <level label="i"> <text>The differences in the relative rights and preferences between the shares of each series to the extent they have been set; and</text> </level> <level label="ii"> <text>The authority of the board of directors to set the relative rights and preferences of subsequent series.</text> </level> </level> </level> <level label="c"> <text>Instead of a full statement or summary of the information required by subsection (b) of this section, the certificate may state that the corporation will furnish a full statement of the required information to any stockholder on request and without charge.</text> </level> <level label="d"> <text>Without affecting § 8-204 of the Commercial Law Article, if the corporation which issues the stock imposes a restriction on its transferability, the stock certificate shall:</text> <level label="1"> <text>Contain a full statement of the restriction; or</text> </level> <level label="2"> <text>State that the corporation will furnish information about the restriction to the stockholder on request and without charge.</text> </level> </level> <level label="e"> <text>Except as otherwise provided by § 8-204 of the Commercial Law Article, the fact that a stock certificate does not contain or refer to a restriction on transferability that is adopted after the date of issuance of the stock certificate does not mean that the restriction is invalid or unenforceable.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-212" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>Each stock certificate shall be signed by the president, a vice president, the chief executive officer, the chief operating officer, the chief financial officer, the chairman of the board, or the vice chairman of the board and countersigned by the secretary, an assistant secretary, the treasurer, an assistant treasurer, or any other officer.</text> </level> <level label="b"> <text>Each certificate which represents any stock, bond, note, guaranty, obligation, or other corporate security:</text> <level label="1"> <text>May be sealed with the actual corporate seal or a facsimile of it or in any other form; and</text> </level> <level label="2"> <text>The signatures may be either manual or facsimile signatures.</text> </level> </level> <level label="c"> <text>A certificate described in this section is valid and may be issued whether or not an officer who signed it is still an officer when it is issued.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-213" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>Unless the bylaws provide otherwise, the board of directors of a corporation may determine the conditions for issuing a new stock certificate in place of one which is alleged to have been lost, stolen, or destroyed.</text> </level> <level label="b"> <text>In its discretion, the board may require the owner of the certificate to give bond, with sufficient surety, to indemnify the corporation against any loss or claim arising as a result of the issuance of a new certificate.</text> </level> <level label="c"> <text>The issuance of a new certificate under this section does not constitute an overissue of the shares it represents.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-214" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>A corporation may, but is not obliged to:</text> <level label="1"> <text>Issue fractional shares of stock;</text> </level> <level label="2"> <text>Eliminate a fractional interest by rounding up to a full share of stock;</text> </level> <level label="3"> <text>Arrange for the disposition of a fractional interest by the person entitled to it;</text> </level> <level label="4"> <text>Pay cash for the fair value of a fractional share of stock determined as of the time when the person entitled to receive it is determined; or</text> </level> <level label="5"> <text>Issue scrip or other evidence of ownership which:</text> <level label="i"> <text>Entitles its holder to exchange scrip or other evidence of ownership aggregating a full share for a certificate which represents the share; and</text> </level> <level label="ii"> <text>Unless otherwise provided, does not entitle its holder to exercise voting rights, receive dividends, or participate in the assets of the corporation in the event of liquidation.</text> </level> </level> </level> <level label="b"> <text>The board of directors may impose any reasonable condition on the issuance of the scrip or other evidence of ownership, including a condition that:</text> <level label="1"> <text>It becomes void if not exchanged for a certificate representing a full share of stock before a specified date;</text> </level> <level label="2"> <text>The corporation may sell the stock for which the scrip or other evidence of ownership is exchangeable and distribute the proceeds to the holders; or</text> </level> <level label="3"> <text>The proceeds of a sale under paragraph (2) of this subsection are forfeited to the corporation if not claimed within a specified period not less than three years from the date the scrip or other evidence of ownership was originally issued.</text> </level> </level> <level label="c"> <text>A corporation may not issue a certificate representing scrip in bearer form.</text> </level> <level label="d"> <text>For scrip issued without a certificate, on request by a scripholder, the corporation shall deliver to the scripholder, without charge, a statement in writing or by electronic transmission of the information required to be on a certificate under § 2–211 of this subtitle.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-215" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>A stockholder or subscriber for stock of a corporation is not obligated to the corporation or its creditors with respect to the stock, except to the extent that:</text> <level label="1"> <text>The subscription price or other agreed consideration for the stock has not been paid; or</text> </level> <level label="2"> <text>Liability is imposed under any other provision of this article.</text> </level> </level> <level label="b"> <text>The following persons are not personally liable to the corporation or its creditors for the unpaid portion of the consideration due for stock:</text> <level label="1"> <text>A transferee or assignee who acquires stock or a subscription for stock in good faith and without knowledge or notice of the nonpayment;</text> </level> <level label="2"> <text>A person who holds the stock as a fiduciary, although the estate in his hands is liable; and</text> </level> <level label="3"> <text>A pledgee or other person who holds stock as security.</text> </level> </level> <level label="c"> <text>The liability imposed by this section may be enforced only by:</text> <level label="1"> <text>The corporation; or</text> </level> <level label="2"> <text>Its receiver or other person winding up its affairs.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-216" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="2" subtitle_name="Issuance of Securities"> <level label="a"> <text>A director or officer of a corporation may not knowingly and willfully:</text> <level label="1"> <text>Authorize or consent to the issuance of unauthorized stock or convertible securities of the corporation;</text> </level> <level label="2"> <text>Authorize or consent to the issuance of stock or convertible securities of the corporation except in conformity with the provisions of law which relate to the issuance; or</text> </level> <level label="3"> <text>Falsely make or consent to the making of any required entry in the books of the corporation with respect to the issuance of stock or convertible securities of the corporation.</text> </level> </level> <level label="b"> <text>In the absence of actual fraud in the transaction, a determination by the board of directors or a statement in the charter as to the actual value of consideration other than money for which stock or convertible securities are to be issued or as to the propriety of accepting that consideration for issuing the stock or convertible securities is conclusive for all purposes.</text> </level> <level label="c"> <text>An officer or director who violates any provision of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $5,000 or imprisonment not exceeding two years or both.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-301" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <level label="1"> <text>In this subtitle, “distribution” means:</text> <level label="i"> <text>A direct or indirect transfer of money or other property of the corporation in respect of any of its shares; or</text> </level> <level label="ii"> <text>An incurrence or forgiveness of indebtedness by a corporation to or for the benefit of the corporation’s stockholders in respect of any of its shares.</text> </level> </level> <level label="2"> <text>“Distribution” does not include a stock dividend or stock split authorized in accordance with § 2-309(c) of this subtitle.</text> </level> </level> <level label="b"> <text>A distribution may be in the form of:</text> <level label="1"> <text>A declaration or payment of a dividend;</text> </level> <level label="2"> <text>A purchase, redemption, whether or not at the option of the corporation or the stockholders, or other acquisition of shares; or</text> </level> <level label="3"> <text>An issuance of evidence of indebtedness.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-302" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>Each corporation shall keep its books in a manner which shows:</text> <level label="1"> <text>The amount and nature of the money or other consideration it receives for the stock which it issues, including:</text> <level label="i"> <text>The number of shares of stock of each class issued for the consideration; and</text> </level> <level label="ii"> <text>The stated capital attributable to the issued shares of stock of each class; and</text> </level> </level> <level label="2"> <text>The amount and nature of the money or other consideration it receives for the convertible securities which it issues.</text> </level> </level> <level label="b"> <text>If stock with par value and stock without par value are issued together for a particular consideration, the amount by which the consideration exceeds the aggregate par value of the stock with par value constitutes the consideration received for the stock without par value.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-303" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <level label="1"> <text>The entire consideration received by a corporation for issuing stock with par value constitutes stated capital to the extent of the aggregate par value of the stock.</text> </level> <level label="2"> <text>Any consideration received in excess of the aggregate par value constitutes capital surplus.</text> </level> </level> <level label="b"> <level label="1"> <text>Except as permitted by paragraph (2) of this subsection, the entire consideration received by a corporation for issuing stock without par value constitutes stated capital.</text> </level> <level label="2"> <text>Before issuing stock without par value, the board of directors may allocate any portion of the consideration to capital surplus. However, if the stock has a preference in the assets of the corporation in the event of involuntary liquidation, the board may allocate to capital surplus only a portion which does not exceed the amount by which the consideration exceeds the aggregate amount of the preference.</text> </level> </level> <level label="c"> <text>Subsections (a)(2) and (b) of this section do not affect a good faith allocation of amounts to retained earnings, earned surplus, or a similar account if:</text> <level label="1"> <text>Stock is issued in a consolidation, merger, or acquisition of all or substantially all of the stock or assets of another corporation; and</text> </level> <level label="2"> <text>Immediately after the transaction, the aggregate retained earnings, earned surplus, or similar account of the corporation which issued the stock does not exceed the aggregate of the corresponding accounts of the corporations parties to the transaction as they existed immediately before the transaction.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-304" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>By resolution of its board of directors, a corporation may apply any part of its capital surplus for:</text> <level label="1"> <text>The reduction or elimination of a corporate deficit arising from a loss, however incurred, or from diminution in the value of its assets, but only after earned surplus is exhausted; or</text> </level> <level label="2"> <text>Any other proper corporate purpose.</text> </level> </level> <level label="b"> <text>An application of capital surplus under subsection (a) of this section shall be disclosed to the stockholders of the corporation in its next annual report.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-305" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <text>The corporation may pay or allow out of the consideration received by it for its stock, the reasonable charges and expenses of its organization or reorganization and the reasonable compensation for the sale or underwriting of its stock, without rendering the stock not full paid and nonassessable and without impairing the stated capital.</text> </section> <section article="gca" article_name="Corporations and Associations" number="2-306" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>Unless the charter provides otherwise, if stated capital is reduced by retiring stock held by the corporation, the board of directors may approve the reduction without stockholder action.</text> </level> <level label="b"> <level label="1"> <text>Except as provided in subsection (a) of this section or in § 2-605 of this title, a reduction of stated capital of a corporation, whether to be effected with or without a charter amendment, shall be approved in the manner provided in this subsection.</text> </level> <level label="2"> <text>The board of directors shall:</text> <level label="i"> <text>Adopt a resolution which declares that the charter amendment, if any, and the proposed reduction is advisable; and</text> </level> <level label="ii"> <text>Direct that the proposed reduction and any charter amendment be submitted for consideration at either an annual or special meeting of the stockholders.</text> </level> </level> <level label="3"> <text>A notice which states that a purpose of the meeting will be to act on the proposed reduction and any charter amendment shall be given in the manner required by Subtitle 5 of this title to each stockholder entitled to vote on the matter.</text> </level> <level label="4"> <text>The proposed reduction and any charter amendment shall be approved by the stockholders of the corporation by the affirmative vote of two thirds of all the votes entitled to be cast on the matter.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-308" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>Subject to the limitations of subsection (b) of this section, any surplus which arises from a reduction of stated capital becomes capital surplus and may be made the basis of:</text> <level label="1"> <text>A distribution or payment to stockholders; and</text> </level> <level label="2"> <text>A reduction of the liability of stockholders whose shares of stock are not fully paid.</text> </level> </level> <level label="b"> <text>Except as provided in § 2–311(a)(2) of this subtitle, the net assets of the corporation which remain after a distribution, payment, or reduction of liability shall be at least equal to the aggregate preferential amount payable in the event of voluntary liquidation to the holders of all stock having rights preferred to the rights of holders who received the distribution, payment, or whose liability was reduced.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-309" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>In this section, “reverse stock split” means a combination of outstanding shares of stock of a corporation into a lesser number of shares of stock of the same class without any change in the aggregate amount of stated capital of the corporation, except for a change resulting from the elimination of fractional shares in accordance with § 2–214 of this title.</text> </level> <level label="b"> <text>If authorized by its board of directors, a corporation may make distributions to its stockholders, subject to any restriction in its charter and the limitations in § 2–311 of this subtitle.</text> </level> <level label="c"> <level label="1"> <text>A division of issued shares into a greater number of shares of the same class without any change in the aggregate amount of stated capital is a stock split, and a division with a change in the aggregate amount of stated capital is a stock dividend within the meaning of this subsection.</text> </level> <level label="2"> <text>If authorized by its board of directors and unless the charter provides otherwise, shares may be issued by a corporation, without consideration to the holders of one or more classes or series of stock, as a stock split or a stock dividend.</text> </level> <level label="3"> <text>If a stock dividend is payable in a corporation’s own stock with par value, the shares shall be issued at par value and, at the time the stock dividend is paid, the corporation shall transfer from surplus to stated capital an amount at least equal to the aggregate par value of the shares to be issued.</text> </level> <level label="4"> <text>If a stock dividend is payable in a corporation’s own stock without par value, the board of directors shall adopt at the time the stock dividend is declared a resolution which sets the aggregate amount to be attributed to stated capital with respect to the shares that constitute the stock dividend and, at the time the stock dividend is paid, the corporation shall transfer at least that amount from surplus to stated capital.</text> </level> </level> <level label="d"> <text>If the board of directors of a corporation has given general authorization for a distribution and provides for or establishes a method or procedure for determining the maximum amount of the distribution, the board may delegate to an officer of the corporation the power, in accordance with the general authorization, to fix the amount and other terms of the distribution.</text> </level> <level label="e"> <level label="1"> <text>This subsection applies to a corporation with a class of equity securities registered under the Securities Exchange Act of 1934.</text> </level> <level label="2"> <text>Unless prohibited by the charter of a corporation by reference to this subsection or the subject matter of this subsection, the board of directors of the corporation may amend the charter, with the approval of a majority of the board of directors and without stockholder action, to effect a reverse stock split that results in a combination of shares of stock at a ratio of not more than 10 shares of stock into one share of stock in any 12–month period.</text> </level> <level label="3"> <text>Within 20 days after the effective date of the reverse stock split, the corporation shall give written notice of the reverse stock split to each holder of record of the combined shares of stock as of the effective date.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-310" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <level label="1"> <text>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.</text> </level> <level label="2"> <text>Shares acquired under paragraph (1) of this subsection constitute authorized but unissued shares.</text> </level> <level label="3"> <text>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.</text> </level> <level label="4"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, and unless the charter provides otherwise, stock shall cease to be outstanding on the date of redemption or repurchase if a corporation has:</text> <level label="1"> <text>Given a notice of redemption of stock or repurchase of stock pursuant to a right of redemption set forth in the charter or a duly adopted repurchase plan binding on the stockholder; and</text> </level> <level label="2"> <text>Paid or set aside sufficient funds for the benefit of the holder of the stock called for redemption or repurchase.</text> </level> </level> <level label="ii"> <text>This paragraph does not affect the right of a stockholder to receive payment of the redemption or repurchase price.</text> </level> </level> </level> <level label="b"> <text>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:</text> <level label="1"> <text>The name of the corporation;</text> </level> <level label="2"> <text>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;</text> </level> <level label="3"> <text>The number of authorized shares of the corporation remaining after the acquisition of outstanding shares, itemized by class and series; and</text> </level> <level label="4"> <text>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.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-310.1" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>This section applies only to a corporation registered as an open–end company under the Investment Company Act of 1940.</text> </level> <level label="b"> <text>Subject to the provisions of § 2–311 of this subtitle, a corporation may redeem shares of its stock from any stockholder if:</text> <level label="1"> <text>The corporation’s charter expressly provides for the redemption of shares of its stock from any stockholder and the board of directors authorizes the redemption; or</text> </level> <level label="2"> <level label="i"> <text>The corporation’s charter does not expressly prohibit the redemption of shares of its stock;</text> </level> <level label="ii"> <text>The aggregate net asset value of the shares to be redeemed from the stockholder is, as of the date of the redemption, $2,000 or less; and</text> </level> <level label="iii"> <text>Written notice of the redemption to the stockholder of record:</text> <level label="1"> <text>Is mailed first–class to the stockholder’s last known address of record;</text> </level> <level label="2"> <text>States that all of the shares will be redeemed; and</text> </level> <level label="3"> <text>Establishes a date for the redemption which is at least 45 days from the date of the notice.</text> </level> </level> </level> </level> <level label="c"> <text>The price to be paid for shares redeemed under subsection (b)(2) of this section shall be the aggregate net asset value of the shares at the close of business on the date of the redemption.</text> </level> <level label="d"> <text>If certificates representing the shares to be redeemed under subsection (b)(2) of this section have been issued and are not surrendered for cancellation on the date of redemption:</text> <level label="1"> <text>The corporation may withhold payment for the redeemed shares until the certificates are surrendered for cancellation; and</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="e"> <text>If the aggregate net asset value of the shares to be redeemed under subsection (b)(2) of this section should increase to an amount greater than $2,000 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.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-310.2" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>In this section, “investment company” means a corporation registered under the Investment Company Act of 1940.</text> </level> <level label="b"> <text>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.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-311" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <level label="1"> <text>No distribution may be made if, after giving effect to the distribution:</text> </level> <level label="i"> <text>The corporation would not be able to pay indebtedness of the corporation as the indebtedness becomes due in the usual course of business; or</text> </level> <level label="ii"> <text>Except as provided in paragraph (2) of this subsection, the corporation’s total assets would be less than the sum of the corporation’s total liabilities plus, unless the charter permits otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the distribution.</text> </level> <level label="2"> <text>A corporation may make a distribution from:</text> <level label="i"> <text>The net earnings of the corporation for the fiscal year in which the distribution is made;</text> </level> <level label="ii"> <text>The net earnings of the corporation for the preceding fiscal year; or</text> </level> <level label="iii"> <text>The sum of the net earnings of the corporation for the preceding eight fiscal quarters.</text> </level> </level> </level> <level label="b"> <text>The board of directors may base a determination that a distribution is not prohibited under subsection (a) of this section either on:</text> <level label="1"> <text>Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or</text> </level> <level label="2"> <text>A fair valuation or other method that is reasonable in the circumstances.</text> </level> </level> <level label="c"> <text>Except as provided in subsection (e) of this section, the effect of a distribution under subsection (a) of this section is measured:</text> <level label="1"> <text>In the case of distribution by purchase, redemption, or other acquisition of the corporation’s shares, as of the earlier of:</text> <level label="i"> <text>The date money or other property is transferred or the indebtedness is incurred by the corporation; or</text> </level> <level label="ii"> <text>The date the stockholder ceases to be a stockholder with respect to the acquired shares;</text> </level> </level> <level label="2"> <text>In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and</text> </level> <level label="3"> <text>In all other cases, as of:</text> <level label="i"> <text>The date the distribution is authorized if the payment occurs within 120 days after the date of authorization; or</text> </level> <level label="ii"> <text>The date the payment is made if it occurs more than 120 days after the date of authorization.</text> </level> </level> </level> <level label="d"> <text>A corporation’s indebtedness to a stockholder, incurred by reason of a distribution made in accordance with this section, is at parity with the corporation’s indebtedness to the corporation’s general, unsecured creditors, except to the extent subordinated by agreement.</text> </level> <level label="e"> <level label="1"> <text>If terms of the indebtedness provide that payment of principal and interest is to be made only if and to the extent that payment of a distribution to stockholders could then be made under this section, indebtedness of a corporation, including indebtedness issued as a distribution, is not a liability for purposes of determinations made under subsection (a) of this section.</text> </level> <level label="2"> <text>If the indebtedness referred to in paragraph (1) of this subsection is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is actually made.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-312" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>If it is established that the director’s duties were not performed in compliance with § 2-405.1 of this title, a director who votes for or assents to a distribution made in violation of the charter or § 2-311 of this subtitle is personally liable to the corporation for the amount of the distribution that exceeds what could have been made without violating the charter or § 2-311 of this subtitle.</text> </level> <level label="b"> <text>A director held liable under subsection (a) of this section for an unlawful distribution is entitled to contribution:</text> <level label="1"> <text>From every other director who could be held liable under subsection (a) of this section for the unlawful distribution; and</text> </level> <level label="2"> <text>From each stockholder for the amount the stockholder accepted knowing the distribution was made in violation of the charter or § 2-311 of this subtitle.</text> </level> </level> <level label="c"> <level label="1"> <text>A proceeding to enforce the liability of a director under subsection (a) of this section may not begin more than 3 years after the date on which the effect of the distribution was measured under § 2-311(c) or (e) of this subtitle.</text> </level> <level label="2"> <text>A proceeding to enforce contribution under subsection (b) of this section may not begin more than 1 year after the liability of the director claiming contribution has been finally adjudicated under subsection (a) of this section.</text> </level> </level> <level label="d"> <text>The liabilities imposed by this section are in addition to any other liability imposed by law on the directors of a corporation.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-313" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="3" subtitle_name="Capital Accounts, Dividends, and Retirement of Shares"> <level label="a"> <text>The president or, if provided in the bylaws, some other executive officer of each corporation shall prepare, or cause to be prepared, annually a full and correct statement of the affairs of the corporation, to include a balance sheet and a financial statement of operations for the preceding fiscal year.</text> </level> <level label="b"> <text>Except as provided in subsection (c) of this section, the statement of affairs shall be submitted at the annual meeting of stockholders and, within 20 days after the meeting:</text> <level label="1"> <text>Placed on file at the corporation’s principal office or at any other office or agency specified in the bylaws of the corporation, in written form; or</text> </level> <level label="2"> <text>Otherwise maintained by or on behalf of the corporation in any other form that complies with § 2–114 of this title.</text> </level> </level> <level label="c"> <text>If a corporation is not required to hold an annual meeting of stockholders under a charter or bylaw provision adopted in accordance with § 2–501 of this title, within 120 days after the end of the fiscal year, the statement of affairs shall be:</text> <level label="1"> <text>Placed on file at the corporation’s principal office or at any other office or agency specified in the bylaws of the corporation in written form; or</text> </level> <level label="2"> <text>Otherwise maintained by or on behalf of the corporation in any other form that complies with § 2–114 of this title.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-401" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>All business and affairs of a corporation, whether or not in the ordinary course, shall be managed by or under the direction of a board of directors.</text> </level> <level label="b"> <text>All powers of the corporation may be exercised by or under authority of the board of directors except as conferred on or reserved to the stockholders by law or by the charter or bylaws of the corporation.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-402" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>Each corporation shall have at least one director.</text> </level> <level label="b"> <text>Subject to the provisions of subsection (a) of this section and except for a corporation that has elected to be subject to § 3-804(b) of this article, a Maryland corporation shall have the number of directors provided in its charter until changed by the bylaws.</text> </level> <level label="c"> <text>Subject to the provisions of subsection (a) of this section and except for a corporation that has elected to be subject to § 3-804(b) of this article, the bylaws may:</text> <level label="1"> <text>Alter the number of directors set by the charter; and</text> </level> <level label="2"> <text>Authorize a majority of the entire board of directors to alter within specified limits the number of directors set by the charter or the bylaws, but the action may not affect the tenure of office of any director.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-403" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>Each director and each nominee for director of a corporation shall have the qualifications required by the charter or bylaws of the corporation.</text> </level> <level label="b"> <text>Unless required by its charter or bylaws, a director need not be a stockholder in the corporation.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-404" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>Until successors are elected and qualify, the board of directors consists of the individuals named as directors in the charter.</text> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, at each annual meeting of stockholders, the stockholders shall elect directors to hold office until the earlier of:</text> <level label="i"> <text>The next annual meeting of stockholders and until their successors are elected and qualify;</text> </level> <level label="ii"> <text>The time provided in the terms of any class or series of stock pursuant to which such directors are elected; or</text> </level> <level label="iii"> <text>The time a director ceases to have the qualifications that were required by the charter or bylaws of the corporation at the time the director was elected, if the charter or bylaws at the time the director was elected required the director’s term to end on a failure to have those qualifications.</text> </level> </level> <level label="2"> <text>Except for a corporation that has elected to be subject to § 3–803 of this article, if the directors are divided into classes, the term of office may be provided in the bylaws, except that:</text> <level label="i"> <text>The term of office of a director may not be longer than 5 years or, except in the case of an initial or substitute director, shorter than the period between annual meetings; and</text> </level> <level label="ii"> <text>The term of office of at least one class shall expire each year.</text> </level> </level> </level> <level label="c"> <text>Each share of stock may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted.</text> </level> <level label="d"> <text>Unless the charter or bylaws of a corporation provide otherwise, a plurality of all the votes cast at a meeting at which a quorum is present is sufficient to elect a director.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-405" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, in case of failure to elect directors at the designated time, the directors holding over shall continue to serve as directors of the corporation until their successors are elected and qualify.</text> </level> <level label="2"> <text>If the number of directors to be elected at the designated time, together with the number of directors who otherwise would hold over, exceeds the number of directors who were to be elected, then the directors who will hold over and continue to serve as directors of the corporation until their successors are elected and qualify shall be determined:</text> <level label="i"> <text>By a majority vote of the directors elected at the designated time and, if the board is classified, any directors whose terms did not expire at the designated time, whether or not sufficient to constitute a quorum; or</text> </level> <level label="ii"> <text>As otherwise provided in the charter or bylaws of the corporation.</text> </level> </level> </level> <level label="b"> <text>A director not elected annually in accordance with § 2–501(b) of this title shall be deemed to be continuing in office and shall not be deemed to be holding over under subsection (a) of this section until after the time at which an annual meeting is required to be held under § 2–501(b) of this title or the charter or bylaws of the corporation.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-405.1" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>In this section, “act” includes, as the context requires:</text> <level label="1"> <text>An act, an omission, a failure to act, or a determination made not to act; or</text> </level> <level label="2"> <text>To act, omit to act, fail to act, or make a determination not to act.</text> </level> </level> <level label="b"> <text>This section applies to acts of an individual who:</text> <level label="1"> <text>Is or was a director of a corporation; and</text> </level> <level label="2"> <text>Is acting or was acting in the individual’s official capacity as a director of a corporation.</text> </level> </level> <level label="c"> <text>A director of a corporation shall act:</text> <level label="1"> <text>In good faith;</text> </level> <level label="2"> <text>In a manner the director reasonably believes to be in the best interests of the corporation; and</text> </level> <level label="3"> <text>With the care that an ordinarily prudent person in a like position would use under similar circumstances.</text> </level> </level> <level label="d"> <level label="1"> <text>A director is entitled to rely on any information, opinion, report, or statement, including any financial statement or other financial data, prepared or presented by:</text> <level label="i"> <text>An officer or employee of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;</text> </level> <level label="ii"> <text>A lawyer, certified public accountant, or other person, as to a matter which the director reasonably believes to be within the person’s professional or expert competence; or</text> </level> <level label="iii"> <text>A committee of the board on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence.</text> </level> </level> <level label="2"> <text>A director is not acting in good faith if the director has any knowledge concerning the matter in question which would cause the reliance to be unwarranted.</text> </level> </level> <level label="e"> <text>A director who acts in accordance with the standard of conduct provided in this section shall have the immunity from liability described under § 5–417 of the Courts Article.</text> </level> <level label="f"> <text>The standard of conduct provided in this section does not require a director of a corporation to:</text> <level label="1"> <text>Act to accept, recommend, or respond on behalf of the corporation to a proposal by an acquiring person as defined in § 3–801 of this article;</text> </level> <level label="2"> <text>Act to authorize the corporation to redeem any rights under, modify, or render inapplicable, a stockholder rights plan;</text> </level> <level label="3"> <text>Act to elect on behalf of the corporation to be subject to or refrain from electing on behalf of the corporation to be subject to any or all of the provisions of Title 3, Subtitle 8 of this article;</text> </level> <level label="4"> <text>Act to make a determination under the provisions of Title 3, Subtitle 6 or Subtitle 7 of this article; or</text> </level> <level label="5"> <text>Act solely because of:</text> <level label="i"> <text>The effect the act may have on an acquisition or potential acquisition of control of the corporation; or</text> </level> <level label="ii"> <text>The amount or type of consideration that may be offered or paid to stockholders of the corporation in an acquisition or a potential acquisition of control of the corporation.</text> </level> </level> </level> <level label="g"> <text>An act of a director of a corporation is presumed to be in accordance with subsection (c) of this section.</text> </level> <level label="h"> <text>An act of a director of a corporation relating to or affecting an acquisition or a potential acquisition of control of the corporation or any other transaction or potential transaction involving the corporation may not be subject to a higher duty or greater scrutiny than is applied to any other act of a director.</text> </level> <level label="i"> <text>This section:</text> <level label="1"> <text>Is the sole source of duties of a director to the corporation or the stockholders of the corporation, whether or not a decision has been made to enter into an acquisition or a potential acquisition of control of the corporation or enter into any other transaction involving the corporation; and</text> </level> <level label="2"> <text>Applies to any act of a director, including an act as a member of a committee of the board of directors.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-405.2" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <text>The charter of the corporation may include any provision expanding or limiting the liability of its directors and officers to the corporation or its stockholders as described under § 5-418 of the Courts and Judicial Proceedings Article.</text> </section> <section article="gca" article_name="Corporations and Associations" number="2-405.3" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>This section applies to a corporation that is an investment company, as defined by the Investment Company Act of 1940.</text> </level> <level label="b"> <text>A director of a corporation who with respect to the corporation is not an interested person, as defined by the Investment Company Act of 1940, shall be deemed to be independent and disinterested when making any determination or taking any action as a director.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-406" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>The stockholders of a corporation may remove any director, with or without cause, by the affirmative vote of a majority of all the votes entitled to be cast generally for the election of directors, except:</text> <level label="1"> <text>As provided in subsection (b) of this section;</text> </level> <level label="2"> <text>As otherwise provided in the charter of the corporation; or</text> </level> <level label="3"> <text>For a corporation that has elected to be subject to § 3–804(a) of this article.</text> </level> </level> <level label="b"> <text>Unless the charter of the corporation provides otherwise:</text> <level label="1"> <text>If the stockholders of any class or series are entitled separately to elect one or more directors, a director elected by stockholders of that class or series may not be removed without cause except by the affirmative vote of a majority of all the votes of that class or series;</text> </level> <level label="2"> <text>If a corporation has cumulative voting for the election of directors and fewer than all directors are to be removed, a director may not be removed without cause if the votes cast against the director’s removal would be sufficient to elect the director if then cumulatively voted at an election of the entire board of directors, or, if there is more than one class of directors, at an election of the class of directors of which the director is a member; and</text> </level> <level label="3"> <text>If the directors have been divided into classes, a director may not be removed without cause.</text> </level> </level> <level label="c"> <text>A resignation of a director given in writing or by electronic transmission may provide that:</text> <level label="1"> <text>The resignation will be effective at a later time or on the occurrence of an event;</text> </level> <level label="2"> <text>The resignation is irrevocable on the occurrence of the event; and</text> </level> <level label="3"> <text>If the resignation will be effective on the failure of the director to receive a specified vote for reelection, the resignation is irrevocable.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-407" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection and except for a corporation that has elected to become subject to § 3-804(c) of this article, the stockholders may elect a successor to fill a vacancy on the board of directors which results from the removal of a director.</text> </level> <level label="2"> <text>If the stockholders of any class or series are entitled separately to elect one or more directors, the stockholders of that class or series may elect a successor to fill a vacancy on the board of directors which results from the removal of a director elected by that class or series.</text> </level> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection or unless the charter or the bylaws of the corporation provide otherwise:</text> <level label="i"> <text>A majority of the remaining directors, whether or not sufficient to constitute a quorum, may fill a vacancy on the board of directors which results from any cause except an increase in the number of directors; and</text> </level> <level label="ii"> <text>A majority of the entire board of directors may fill a vacancy which results from an increase in the number of directors.</text> </level> </level> <level label="2"> <text>If the stockholders of any class or series are entitled separately to elect one or more directors, a majority of the remaining directors elected by that class or series or the sole remaining director elected by that class or series may fill any vacancy among the number of directors elected by that class or series.</text> </level> </level> <level label="c"> <level label="1"> <text>Unless the corporation has elected to be subject to § 3–804(c)(3) of this article, a director elected by the board of directors to fill a vacancy serves until the next annual meeting of stockholders and until his successor is elected and qualifies.</text> </level> <level label="2"> <text>A director elected by the stockholders to fill a vacancy which results from the removal of a director serves for the balance of the term of the removed director.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-408" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>Unless the charter or bylaws of the corporation require a greater proportion or this article requires a different proportion, the action of a majority of the directors present at a meeting at which a quorum is present is the action of the board of directors.</text> </level> <level label="b"> <level label="1"> <text>Unless the bylaws of the corporation provide otherwise, a majority of the entire board of directors constitutes a quorum for the transaction of business.</text> </level> <level label="2"> <text>The bylaws may provide that less than a majority, but not less than one–third of the entire board of directors, may constitute a quorum unless:</text> <level label="i"> <text>There are only two or three directors, in which case not less than two may constitute a quorum; or</text> </level> <level label="ii"> <text>There is only one director, in which case that one will constitute a quorum.</text> </level> </level> </level> <level label="c"> <text>Any action required or permitted to be taken at a meeting of the board of directors or of a committee of the board may be taken without a meeting if a unanimous consent which sets forth the action is:</text> <level label="1"> <text>Given in writing or by electronic transmission by each member of the board or committee entitled to vote on the matter; and</text> </level> <level label="2"> <text>Filed in paper or electronic form with the minutes of proceedings of the board or committee.</text> </level> </level> <level label="d"> <text>Unless the charter requires otherwise, any action required or permitted to be taken at a meeting of the board of directors or of a committee of the board of a corporation that is registered as an open–end investment company under the federal Investment Company Act of 1940 may be taken without a meeting if the consent of a majority of the entire board of directors or a majority of the directors serving on the committee and in the manner and by the vote required under the federal Investment Company Act of 1940 which sets forth the action is:</text> <level label="1"> <text>Given in writing or by electronic transmission by the directors who consent to the action;</text> </level> <level label="2"> <text>Filed in paper or electronic form with the minutes or proceedings of the board or committee; and</text> </level> <level label="3"> <text>Sent within 3 days after the effective date of the action to all directors or to all members of the committee.</text> </level> </level> <level label="e"> <text>A director who did not consent and receives a notice under subsection (d) of this section may file a dissent to the action by sending a notice of dissent to the secretary of the corporation within 10 days of receipt of the notice by:</text> <level label="1"> <text>Certified mail, return receipt requested, bearing a postmark from the United States Postal Service; or</text> </level> <level label="2"> <text>Electronic transmission.</text> </level> </level> <level label="f"> <level label="1"> <text>An individual, whether or not then a director, may assent to an action by a consent that will be effective at a future time that is no later than 60 days after the consent is delivered to the corporation or its agent.</text> </level> <level label="2"> <text>The effective time of a consent under this subsection may include a time determined on the happening of an event that occurs no later than 60 days after the consent is delivered to the corporation or its agent.</text> </level> <level label="3"> <text>A consent under this subsection shall be deemed to have been given at the effective time if the individual:</text> <level label="i"> <text>Is a director at the effective time; and</text> </level> <level label="ii"> <text>Did not revoke the consent before the effective time.</text> </level> </level> <level label="4"> <text>Unless otherwise provided in the consent, a consent under this subsection is revocable before the effective time.</text> </level> </level> <level label="g"> <level label="1"> <text>The charter may provide that one or more directors or a class of directors shall have more or less than one vote per director on any matter.</text> </level> <level label="2"> <text>If the charter provides that one or more directors shall have more or less than one vote per director on any matter, every reference in this article to a majority or other proportion of directors shall refer to a majority or other proportion of votes entitled to be cast by the directors.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-409" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>Unless the bylaws of the corporation provide otherwise, a regular or special meeting of the board of directors may be held at any place in or out of the State or by means of remote communication.</text> </level> <level label="b"> <level label="1"> <text>Notice of each meeting of the board of directors shall be given as provided in the bylaws.</text> </level> <level label="2"> <text>Unless the bylaws provide otherwise, the notice:</text> <level label="i"> <text>Shall be in writing or delivered by electronic transmission; and</text> </level> <level label="ii"> <text>Need not state the business to be transacted at or the purpose of any regular or special meeting of the board of directors.</text> </level> </level> </level> <level label="c"> <text>Whenever this article or the charter or bylaws of a corporation require notice of the time, place, or purpose of a meeting of the board of directors or a committee of the board, a person who is entitled to the notice waives notice if the person:</text> <level label="1"> <text>Before or after the meeting delivers a written waiver or a waiver by electronic transmission which is filed with the records of the meeting; or</text> </level> <level label="2"> <text>Is present at the meeting.</text> </level> </level> <level label="d"> <level label="1"> <text>Unless restricted by the charter or bylaws of the corporation, members of the board of directors or a committee of the board may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time.</text> </level> <level label="2"> <text>Participation in a meeting by these means constitutes presence in person at the meeting.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-410" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>A director of a corporation who is present at a meeting of its board of directors at which action on any corporate matter is taken is presumed to have assented to the action unless:</text> <level label="1"> <text>The director announces the director’s dissent at the meeting; and</text> </level> <level label="2"> <level label="i"> <text>The dissent is entered in the minutes of the meeting;</text> </level> <level label="ii"> <text>The director files the dissent to the action in writing with or by electronic transmission to the secretary of the meeting before the meeting is adjourned; or</text> </level> <level label="iii"> <text>The director forwards the dissent within 24 hours after the meeting is adjourned to the secretary of the meeting or the secretary of the corporation by:</text> <level label="1"> <text>Certified mail, return receipt requested, bearing a postmark from the United States Postal Service; or</text> </level> <level label="2"> <text>Electronic transmission.</text> </level> </level> </level> </level> <level label="b"> <text>The right to dissent does not apply to a director who:</text> <level label="1"> <text>Voted in favor of the action; or</text> </level> <level label="2"> <text>Failed to make the director’s dissent known at the meeting.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-411" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>The board of directors of a corporation may:</text> <level label="1"> <text>Appoint from among its members an executive committee and other committees composed of one or more directors; and</text> </level> <level label="2"> <text>Delegate to these committees any of the powers of the board of directors, except the power to:</text> <level label="i"> <text>Authorize the issuance of stock other than as provided in subsection (b) of this section;</text> </level> <level label="ii"> <text>Recommend to the stockholders any action which requires stockholder approval, other than the election of directors;</text> </level> <level label="iii"> <text>Amend the bylaws; or</text> </level> <level label="iv"> <text>Approve any merger or share exchange which does not require stockholder approval.</text> </level> </level> </level> <level label="b"> <text>If the board of directors has given general authorization for the issuance of stock providing for or establishing a method or procedure for determining the maximum number or the maximum aggregate offering price of shares to be issued, a committee of the board, in accordance with that general authorization or any stock option or other plan or program adopted by the board, may authorize or fix the terms of stock subject to classification or reclassification and the terms on which any stock may be issued, including all terms and conditions required or permitted to be established or authorized by the board of directors under §§ 2–203 and 2–208 of this title.</text> </level> <level label="c"> <text>The bylaws may authorize the members of a committee present at any meeting, whether or not they constitute a quorum, to appoint a director to act in the place of an absent member.</text> </level> <level label="d"> <text>The appointment of any committee, the delegation of authority to it, or action by it under that authority does not constitute, of itself, compliance by any director, not a member of the committee, with the standard provided in § 2-405.1 of this subtitle for the performance of duties of directors.</text> </level> <level label="e"> <text>Notwithstanding subsection (a) of this section or § 2–408(e) of this subtitle, the charter or bylaws of a corporation, or any agreement to which the corporation is a party and which has been approved by the board of directors, may provide for:</text> <level label="1"> <text>The establishment of one or more standing committees or for the creation of one or more committees upon the occurrence of certain events; and</text> </level> <level label="2"> <text>The composition of the membership, and the qualifications and the voting and other rights of members of any such committee, subject to the continued service of members of the committee as directors.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-412" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>Each Maryland corporation shall have the following officers:</text> <level label="1"> <text>A president;</text> </level> <level label="2"> <text>A secretary; and</text> </level> <level label="3"> <text>A treasurer.</text> </level> </level> <level label="b"> <text>In addition to the required officers, a Maryland corporation may have any other officer provided for in the bylaws.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-413" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>Unless the bylaws provide otherwise, the board of directors shall elect the officers.</text> </level> <level label="b"> <text>Unless the bylaws provide otherwise, an officer serves for one year and until his successor is elected and qualifies.</text> </level> <level label="c"> <level label="1"> <text>The board of directors may remove any officer or agent of the corporation.</text> </level> <level label="2"> <text>The removal of an officer or agent does not prejudice any of his contract rights.</text> </level> </level> <level label="d"> <text>Unless the bylaws provide otherwise, the board of directors may fill a vacancy which occurs in any office.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-414" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>As between himself and the corporation, an officer or agent of the corporation has the authority and shall perform the duties in the management of the assets and affairs of the corporation as:</text> <level label="1"> <text>Provided in the bylaws; and</text> </level> <level label="2"> <text>Determined from time to time by resolution of the board of directors not inconsistent with the bylaws.</text> </level> </level> <level label="b"> <text>The rights of any third party are not affected or impaired by any bylaw or resolution referred to in subsection (a) of this section unless the third party has knowledge of the bylaw or resolution.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-415" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>If permitted by the bylaws, a person may hold more than one office in a corporation but may not serve concurrently as both president and vice president of the same corporation.</text> </level> <level label="b"> <text>A person who holds more than one office in a corporation may not act in more than one capacity to execute, acknowledge, or verify an instrument required by law to be executed, acknowledged, or verified by more than one officer.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-416" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>A corporation may lend money to, guarantee an obligation of, or otherwise assist an officer or other employee of the corporation or of its direct or indirect subsidiary, including an officer or employee who is a director of the corporation or the subsidiary, if the loan, guarantee, or assistance:</text> <level label="1"> <text>In the judgment of the directors, reasonably may be expected to benefit the corporation; or</text> </level> <level label="2"> <text>Is an advance made against indemnification in accordance with § 2-418(f) of this subtitle.</text> </level> </level> <level label="b"> <text>The loan, guarantee, or other assistance may be:</text> <level label="1"> <text>With or without interest;</text> </level> <level label="2"> <text>Unsecured; or</text> </level> <level label="3"> <text>Secured in any manner that the board of directors approves, including a pledge of the stock of the corporation.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-418" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Corporation” includes any domestic or foreign predecessor entity of a corporation in a merger, consolidation, or other transaction in which the predecessor’s existence ceased upon consummation of the transaction.</text> </level> <level label="3"> <text>“Director” means any person who is or was a director of a corporation and any person who, while a director of a corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, limited liability company, other enterprise, or employee benefit plan.</text> </level> <level label="4"> <text>“Expenses” include attorney’s fees.</text> </level> <level label="5"> <level label="i"> <text>“Official capacity” means:</text> <level label="1"> <text>When used with respect to a director, the office of director in the corporation; and</text> </level> <level label="2"> <text>When used with respect to a person other than a director as contemplated in subsection (j) of this section, the elective or appointive office in the corporation held by the officer, or the employment or agency relationship undertaken by the employee or agent in behalf of the corporation.</text> </level> </level> <level label="ii"> <text>“Official capacity” does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, other enterprise, or employee benefit plan.</text> </level> </level> <level label="6"> <text>“Party” includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding.</text> </level> <level label="7"> <text>“Proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative.</text> </level> </level> <level label="b"> <level label="1"> <text>A corporation may indemnify any director made a party to any proceeding by reason of service in that capacity unless it is established that:</text> <level label="i"> <text>The act or omission of the director was material to the matter giving rise to the proceeding; and</text> <level label="1"> <text>Was committed in bad faith; or</text> </level> <level label="2"> <text>Was the result of active and deliberate dishonesty; or</text> </level> </level> <level label="ii"> <text>The director actually received an improper personal benefit in money, property, or services; or</text> </level> <level label="iii"> <text>In the case of any criminal proceeding, the director had reasonable cause to believe that the act or omission was unlawful.</text> </level> </level> <level label="2"> <level label="i"> <text>Indemnification may be against judgments, penalties, fines, settlements, and reasonable expenses actually incurred by the director in connection with the proceeding.</text> </level> <level label="ii"> <text>However, if the proceeding was one by or in the right of the corporation, indemnification may not be made in respect of any proceeding in which the director shall have been adjudged to be liable to the corporation.</text> </level> </level> <level label="3"> <level label="i"> <text>The termination of any proceeding by judgment, order, or settlement does not create a presumption that the director did not meet the requisite standard of conduct set forth in this subsection.</text> </level> <level label="ii"> <text>The termination of any proceeding by conviction, or a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the director did not meet that standard of conduct.</text> </level> </level> <level label="4"> <text>A corporation may not indemnify a director or advance expenses under this section for a proceeding brought by that director against the corporation, except:</text> <level label="i"> <text>For a proceeding brought to enforce indemnification under this section; or</text> </level> <level label="ii"> <text>If the charter or bylaws of the corporation, a resolution of the board of directors of the corporation, or an agreement approved by the board of directors of the corporation to which the corporation is a party expressly provide otherwise.</text> </level> </level> </level> <level label="c"> <text>A director may not be indemnified under subsection (b) of this section in respect of any proceeding charging improper personal benefit to the director, whether or not involving action in the director’s official capacity, in which the director was adjudged to be liable on the basis that personal benefit was improperly received.</text> </level> <level label="d"> <text>Unless limited by the charter:</text> <level label="1"> <text>A director who has been successful, on the merits or otherwise, in the defense of any proceeding referred to in subsection (b) of this section, or in the defense of any claim, issue, or matter in the proceeding, shall be indemnified against reasonable expenses incurred by the director in connection with the proceeding, claim, issue, or matter in which the director has been successful.</text> </level> <level label="2"> <text>A court of appropriate jurisdiction, upon application of a director and such notice as the court shall require, may order indemnification in the following circumstances:</text> <level label="i"> <text>If it determines a director is entitled to reimbursement under paragraph (1) of this subsection, the court shall order indemnification, in which case the director shall be entitled to recover the expenses of securing such reimbursement; or</text> </level> <level label="ii"> <text>If it determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director has met the standards of conduct set forth in subsection (b) of this section or has been adjudged liable under the circumstances described in subsection (c) of this section, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any proceeding by or in the right of the corporation or in which liability shall have been adjudged in the circumstances described in subsection (c) of this section shall be limited to expenses.</text> </level> </level> <level label="3"> <text>A court of appropriate jurisdiction may be the same court in which the proceeding involving the director’s liability took place.</text> </level> </level> <level label="e"> <level label="1"> <text>Indemnification under subsection (b) of this section may not be made by the corporation unless authorized for a specific proceeding after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in subsection (b) of this section.</text> </level> <level label="2"> <text>Such determination shall be made:</text> <level label="i"> <text>By the board of directors by a majority vote of a quorum consisting of directors not, at the time, parties to the proceeding, or by a majority vote of a committee of the board consisting solely of one or more directors not, at the time, parties to such proceeding and who were duly designated to act in the matter by a majority vote of the directors who are not parties to the proceeding;</text> </level> <level label="ii"> <text>By special legal counsel selected by the board of directors or a committee of the board by vote as set forth in item (i) of this paragraph, or, if the requisite quorum of the full board cannot be obtained therefor and the committee cannot be established, by a majority vote of the full board in which directors who are parties may participate; or</text> </level> <level label="iii"> <text>By the stockholders.</text> </level> </level> <level label="3"> <text>Authorization of indemnification and determination as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible. However, if the determination that indemnification is permissible is made by special legal counsel, authorization of indemnification and determination as to reasonableness of expenses shall be made in the manner specified in paragraph (2)(ii) of this subsection for selection of such counsel.</text> </level> <level label="4"> <text>Shares held by directors who are parties to the proceeding may not be voted on the subject matter under this subsection.</text> </level> </level> <level label="f"> <level label="1"> <text>Reasonable expenses incurred by a director who is a party to a proceeding may be paid or reimbursed by the corporation in advance of the final disposition of the proceeding upon receipt by the corporation of:</text> <level label="i"> <text>A written affirmation by the director of the director’s good faith belief that the standard of conduct necessary for indemnification by the corporation as authorized in this section has been met; and</text> </level> <level label="ii"> <text>A written undertaking by or on behalf of the director to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.</text> </level> </level> <level label="2"> <text>The undertaking required by paragraph (1)(ii) of this subsection shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make the repayment.</text> </level> <level label="3"> <text>Payments under this subsection shall be made as provided by the charter, bylaws, or contract or as specified in subsection (e)(2) of this section.</text> </level> </level> <level label="g"> <text>The indemnification and advancement of expenses provided or authorized by this section may not be deemed exclusive of any other rights, by indemnification or otherwise, to which a director may be entitled under the charter, the bylaws, a resolution of stockholders or directors, an agreement or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office.</text> </level> <level label="h"> <text>This section does not limit the corporation’s power to pay or reimburse expenses incurred by a director in connection with an appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent in the proceeding.</text> </level> <level label="i"> <text>For purposes of this section:</text> <level label="1"> <text>The corporation shall be deemed to have requested a director to serve an employee benefit plan where the performance of the director’s duties to the corporation also imposes duties on, or otherwise involves services by, the director to the plan or participants or beneficiaries of the plan;</text> </level> <level label="2"> <text>Excise taxes assessed on a director with respect to an employee benefit plan pursuant to applicable law shall be deemed fines; and</text> </level> <level label="3"> <text>Action taken or omitted by the director with respect to an employee benefit plan in the performance of the director’s duties for a purpose reasonably believed by the director to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation.</text> </level> </level> <level label="j"> <text>Unless limited by the charter:</text> <level label="1"> <text>An officer of the corporation shall be indemnified as and to the extent provided in subsection (d) of this section for a director and shall be entitled, to the same extent as a director, to seek indemnification pursuant to the provisions of subsection (d) of this section;</text> </level> <level label="2"> <text>A corporation may indemnify and advance expenses to an officer, employee, or agent of the corporation to the same extent that it may indemnify directors under this section; and</text> </level> <level label="3"> <text>A corporation, in addition, may indemnify and advance expenses to an officer, employee, or agent who is not a director to such further extent, consistent with law, as may be provided by its charter, bylaws, general or specific action of its board of directors, or contract.</text> </level> </level> <level label="k"> <level label="1"> <text>A corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, limited liability company, other enterprise, or employee benefit plan against any liability asserted against and incurred by such person in any such capacity or arising out of such person’s position, whether or not the corporation would have the power to indemnify against liability under the provisions of this section.</text> </level> <level label="2"> <text>A corporation may provide similar protection, including a trust fund, letter of credit, or surety bond, not inconsistent with this section.</text> </level> <level label="3"> <text>The insurance or similar protection may be provided by a subsidiary or an affiliate of the corporation.</text> </level> </level> <level label="l"> <text>Any indemnification of, or advance of expenses to, a director in accordance with this section, if arising out of a proceeding by or in the right of the corporation, shall be reported in writing to the stockholders with the notice of the next stockholders’ meeting or prior to the meeting.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-419" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="4" subtitle_name="Directors and Officers"> <level label="a"> <text>If subsection (b) of this section is complied with, a contract or other transaction between a corporation and any of its directors or between a corporation and any other corporation, firm, or other entity in which any of its directors is a director or has a material financial interest is not void or voidable solely because of any one or more of the following:</text> <level label="1"> <text>The common directorship or interest;</text> </level> <level label="2"> <text>The presence of the director at the meeting of the board or a committee of the board which authorizes, approves, or ratifies the contract or transaction; or</text> </level> <level label="3"> <text>The counting of the vote of the director for the authorization, approval, or ratification of the contract or transaction.</text> </level> </level> <level label="b"> <text>Subsection (a) of this section applies if:</text> <level label="1"> <text>The fact of the common directorship or interest is disclosed or known to:</text> <level label="i"> <text>The board of directors or the committee, and the board or committee authorizes, approves, or ratifies the contract or transaction by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum; or</text> </level> <level label="ii"> <text>The stockholders entitled to vote, and the contract or transaction is authorized, approved, or ratified by a majority of the votes cast by the stockholders entitled to vote other than the votes of shares owned of record or beneficially by the interested director or corporation, firm, or other entity; or</text> </level> </level> <level label="2"> <text>The contract or transaction is fair and reasonable to the corporation.</text> </level> </level> <level label="c"> <text>Common or interested directors or the stock owned by them or by an interested corporation, firm, or other entity may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee of the board or at a meeting of the stockholders, as the case may be, at which the contract or transaction is authorized, approved, or ratified.</text> </level> <level label="d"> <level label="1"> <text>If a contract or transaction is not authorized, approved, or ratified in one of the ways provided for in subsection (b)(1) of this section, the person asserting the validity of the contract or transaction bears the burden of proving that the contract or transaction was fair and reasonable to the corporation at the time it was authorized, approved, or ratified.</text> </level> <level label="2"> <text>This subsection does not apply to the fixing by the board of directors of reasonable compensation for a director, whether as a director or in any other capacity.</text> </level> </level> <level label="e"> <text>Any procedures authorized by § 2–418 of this subtitle shall be deemed to satisfy subsection (b)(1) of this section. Any charter, bylaw, contract, or transaction requiring or permitting indemnification, including advances of expenses, in accordance with § 2–418 of this subtitle is fair and reasonable to the corporation.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-501" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Each corporation shall hold an annual meeting of its stockholders to elect directors and transact any other business within its powers.</text> </level> <level label="b"> <level label="1"> <text>If the charter or bylaws of a corporation that is an investment company as defined in the Investment Company Act of 1940 so provides, the corporation is not required to hold an annual meeting in any year in which the election of directors is not required to be acted upon under the Investment Company Act of 1940.</text> </level> <level label="2"> <text>If a corporation is required under paragraph (1) of this subsection to hold a meeting of stockholders to elect directors, the meeting shall be designated as the annual meeting of stockholders for that year.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the meeting shall be held at the time or in the manner provided in the bylaws.</text> </level> <level label="2"> <text>If a corporation is required under subsection (b)(1) of this section to hold a meeting of stockholders to elect directors, the meeting shall be held no later than 120 days after the occurrence of the event requiring the meeting.</text> </level> </level> <level label="d"> <text>Except as this article provides otherwise, any business may be considered at an annual meeting without the purpose of the meeting having been specified in the notice.</text> </level> <level label="e"> <text>The failure to hold an annual meeting does not invalidate the corporation’s existence or affect any otherwise valid corporate act.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-502" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>A special meeting of the stockholders of a corporation may be called by:</text> <level label="1"> <text>The president;</text> </level> <level label="2"> <text>The board of directors; or</text> </level> <level label="3"> <text>Any other person specified in the charter or the bylaws.</text> </level> </level> <level label="b"> <level label="1"> <text>Except as provided in subsections (c) and (d) of this section, and except for a corporation that has elected to be subject to § 3-805 of this article, the secretary of a corporation shall call a special meeting of the stockholders on the written request of stockholders entitled to cast at least 25 percent of all the votes entitled to be cast at the meeting.</text> </level> <level label="2"> <text>A request for a special meeting shall state the purpose of the meeting and the matters proposed to be acted on at the meeting.</text> </level> <level label="3"> <text>The secretary shall:</text> <level label="i"> <text>Inform the stockholders who make the request of the reasonably estimated cost of preparing and mailing a notice of the meeting; and</text> </level> <level label="ii"> <text>On payment of these costs to the corporation, notify each stockholder entitled to notice of the meeting.</text> </level> </level> </level> <level label="c"> <text>Unless requested by stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting, a special meeting need not be called to consider any matter which is substantially the same as a matter voted on at any special meeting of the stockholders held during the preceding 12 months.</text> </level> <level label="d"> <level label="1"> <text>Subject to paragraph (2) of this subsection, a corporation may include in its charter or bylaws a provision that requires the written request of stockholders entitled to cast a greater or lesser percentage of all votes entitled to be cast at the meeting than that required by subsection (b)(1) of this section in order to call a special meeting of the stockholders.</text> </level> <level label="2"> <text>The percentage provided for in the charter or bylaws may not be greater than a majority of all the votes entitled to be cast at the meeting.</text> </level> </level> <level label="e"> <text>Unless the charter or bylaws expressly provide otherwise, the board of directors has the sole power to fix:</text> <level label="1"> <text>The record date for determining stockholders entitled to request a special meeting of the stockholders and the record date for determining stockholders entitled to notice of and to vote at the special meeting; and</text> </level> <level label="2"> <text>The date, time, and place, if any, and the means of remote communication, if any, by which stockholders and proxy holders may be considered present in person and may vote at the special meeting.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-503" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Unless the charter provides otherwise, meetings of stockholders shall be held as is:</text> <level label="1"> <text>Provided in the charter or bylaws; or</text> </level> <level label="2"> <text>Set by the board of directors under the provisions of the charter or bylaws.</text> </level> </level> <level label="b"> <text>If the board of directors is authorized to determine the place of a meeting of the stockholders, the board of directors may determine that the meeting not be held at any place, but instead may be held partially or solely by remote communication, as authorized by subsection (c) of this section.</text> </level> <level label="c"> <text>If authorized by the board of directors and subject to any guidelines and procedures that the board adopts, stockholders and proxy holders not physically present at the meeting of the stockholders may, by remote communication:</text> <level label="1"> <text>Participate in the meeting of the stockholders; and</text> </level> <level label="2"> <text>Be considered present in person and may vote at the meeting of the stockholders, whether the meeting is held at a designated place or partially or solely by remote communication, if:</text> <level label="i"> <text>The corporation implements reasonable measures to verify that each person considered present and authorized to vote at the meeting by remote communication is a stockholder or proxy holder;</text> </level> <level label="ii"> <text>The corporation implements reasonable measures to provide the stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with the proceedings; and</text> </level> <level label="iii"> <text>In the event any stockholder or proxy holder votes or takes other action at the meeting by remote communication, a record of the vote or other action is maintained by the corporation.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-504" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Not less than 10 nor more than 90 days before each stockholders’ meeting, the secretary of the corporation shall give, or cause to be given, notice in writing or by electronic transmission of the meeting to:</text> <level label="1"> <text>Each stockholder entitled to vote at the meeting; and</text> </level> <level label="2"> <text>Each other stockholder entitled to notice of the meeting.</text> </level> </level> <level label="b"> <text>The notice shall state:</text> <level label="1"> <text>The time of the meeting, the place of the meeting, if any, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and may vote at the meeting; and</text> </level> <level label="2"> <text>The purpose of the meeting, if:</text> <level label="i"> <text>The meeting is a special meeting; or</text> </level> <level label="ii"> <text>Notice of the purpose is required by any other provision of this article.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>For purposes of this section, notice is given to a stockholder when it is:</text> <level label="i"> <text>Personally provided to the stockholder;</text> </level> <level label="ii"> <text>Left at the stockholder’s residence or usual place of business;</text> </level> <level label="iii"> <text>Mailed to the stockholder at the stockholder’s address as it appears on the records of the corporation; or</text> </level> <level label="iv"> <text>Transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions.</text> </level> </level> <level label="2"> <text>Unless the charter or bylaws provide otherwise, if a corporation has received a request from a stockholder that notice not be sent by electronic transmission, the corporation may not provide notice to the stockholder by electronic transmission.</text> </level> </level> <level label="d"> <level label="1"> <text>An affidavit of the secretary, an assistant secretary, the transfer agent, or other agent of the corporation that notice has been given by a form of electronic transmission, in the absence of actual fraud, shall be prima facie evidence of the facts stated in the affidavit.</text> </level> <level label="2"> <text>Notice given by electronic transmission shall be considered ineffective if:</text> <level label="i"> <text>The corporation is unable to deliver two consecutive notices; and</text> </level> <level label="ii"> <text>The inability to deliver the notices becomes known to the secretary, an assistant secretary, the transfer agent, or other person responsible for the giving of notice.</text> </level> </level> <level label="3"> <text>The inadvertent failure to deliver notice under paragraph (2) of this subsection does not invalidate any meeting or other action.</text> </level> </level> <level label="e"> <text>Whenever this article or the charter or bylaws of a corporation require notice of a meeting of the stockholders, each person who is entitled to the notice waives notice if the person:</text> <level label="1"> <text>Before or after the meeting delivers a written waiver or a waiver by electronic transmission which is filed with the records of stockholders meetings; or</text> </level> <level label="2"> <text>Is present at the meeting in person or by proxy.</text> </level> </level> <level label="f"> <text>The charter or bylaws may require any stockholder proposing a nominee for election as a director or any other matter for consideration at a meeting of the stockholders to provide advance notice of the nomination or proposal to the corporation before a date or within a period of time specified in the charter or bylaws.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-504.1" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Subject to § 2–504(d) of this subtitle, any notice given by a corporation to a stockholder under this article or the charter or bylaws of the corporation is effective if given by a single notice, in writing or by electronic transmission, to all stockholders who share an address unless the corporation has received a request from a stockholder in writing or by electronic transmission that a single notice not be given.</text> </level> <level label="b"> <text>This section does not limit the manner in which a corporation otherwise may give notice to stockholders.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-505" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Except as provided in subsection (b) of this section, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if a unanimous consent which sets forth the action is:</text> <level label="1"> <text>Provided in writing or by electronic transmission by each stockholder entitled to vote on the matter; and</text> </level> <level label="2"> <text>Filed in paper or electronic form with the records of stockholders meetings.</text> </level> </level> <level label="b"> <level label="1"> <text>Unless the charter requires otherwise, the holders of any class or series of stock, other than shares of common stock entitled to vote generally in the election of directors, may take action or consent to any action by providing a consent in writing or by electronic transmission of the stockholders entitled to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a stockholders meeting at which all stockholders entitled to vote on the action were present and voted if the corporation gives notice of the action to each holder of the class or series of stock not later than 10 days after the effective time of the action.</text> </level> <level label="2"> <text>If authorized by the charter of a corporation, the holders of shares of common stock entitled to vote generally in the election of directors may take action or consent to any action by providing a consent in writing or by electronic transmission of the stockholders entitled to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a stockholders meeting at which all stockholders entitled to vote on the action were present and voted if the corporation gives notice of the action not later than 10 days after the effective date of the action to each holder of shares of the class or series of common stock and to each stockholder who, if the action had been taken at a meeting, would have been entitled to notice of the meeting.</text> </level> </level> <level label="c"> <text>Any consent authorized by this section shall be provided to the corporation by delivery to its principal office in the State, its resident agent, or the officer or agent of the corporation that maintains, or causes to be maintained on behalf of the corporation, the records in which proceedings of minutes of stockholders meetings are recorded.</text> </level> <level label="d"> <text>A stockholder may provide the consent authorized by this section:</text> <level label="1"> <text>By electronic transmission; or</text> </level> <level label="2"> <text>In paper form, by hand, or by certified or registered mail, return receipt requested.</text> </level> </level> <level label="e"> <text>The board of directors may adopt reasonable procedures for providing consents instead of holding a meeting under this section.</text> </level> <level label="f"> <level label="1"> <text>A consent under this section is not effective unless consents authorized by a sufficient number of stockholders to take action are provided to the corporation in writing or by electronic transmission within 60 days after the date of the earliest consent in accordance with procedures adopted under subsection (e) of this section.</text> </level> <level label="2"> <level label="i"> <text>A person, whether or not then a stockholder, may assent to an action by a consent that will be effective at a future time that is no later than 60 days after the consent is provided to the corporation or its agent.</text> </level> <level label="ii"> <text>The effective time of a consent under this paragraph may include a time determined on the happening of an event that occurs no later than 60 days after the consent is provided to the corporation or its agent.</text> </level> <level label="iii"> <text>A consent under this paragraph shall be deemed to have been given at the effective time if the person:</text> <level label="1"> <text>Is a stockholder at the effective time; and</text> </level> <level label="2"> <text>Did not revoke the consent before the effective time.</text> </level> </level> </level> <level label="3"> <text>Unless otherwise provided in the consent, a consent under this subsection is revocable before the effective time.</text> </level> </level> <level label="g"> <text>Any charter documents filed with the Department in accordance with an action taken under this section may provide that the action was approved by the stockholders in the manner provided by this section.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-506" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Unless this article or the charter of a corporation provides otherwise, at a meeting of stockholders:</text> <level label="1"> <text>The presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting constitutes a quorum; and</text> </level> <level label="2"> <text>A majority of all the votes cast at a meeting at which a quorum is present is sufficient to approve any matter which properly comes before the meeting.</text> </level> </level> <level label="b"> <text>Subject to other provisions of this article, unless the charter of a corporation provides otherwise, if two or more classes or series of stock are entitled to vote separately on any matter for which this article requires approval by two–thirds of all the votes entitled to be cast, the matter shall be approved by two–thirds of all the votes of each class or series entitled to vote on the matter.</text> </level> <level label="c"> <level label="1"> <text>This subsection applies to a corporation that:</text> <level label="i"> <text>Has a class of equity securities registered under the Securities Exchange Act of 1934 and at least three directors who are not officers or employees of the corporation; or</text> </level> <level label="ii"> <text>Is registered as an open–end investment company under the Investment Company Act of 1940.</text> </level> </level> <level label="2"> <text>Unless the charter or bylaws of a corporation provide otherwise, at a meeting of stockholders the presence, in person or by proxy, of a majority of all votes entitled to be cast at the meeting constitutes a quorum.</text> </level> <level label="3"> <text>For purposes of this subsection, a quorum provision in the bylaws of a corporation may not be less than one–third of the votes entitled to be cast at the meeting.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-507" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Unless the charter provides for a greater or lesser number of votes per share or limits or denies voting rights, each outstanding share of stock, regardless of class, is entitled to one vote on each matter submitted to a vote at a meeting of stockholders. However, a share is not entitled to be voted if any installment payable on it is overdue and unpaid.</text> </level> <level label="b"> <level label="1"> <text>A stockholder may vote the stock the stockholder owns of record either:</text> <level label="i"> <text>In person; or</text> </level> <level label="ii"> <text>By proxy as provided in subsection (c) of this section.</text> </level> </level> <level label="2"> <text>Unless a proxy provides otherwise, it is not valid more than 11 months after its date.</text> </level> <level label="3"> <text>Unless otherwise agreed in writing, the holder of record of stock which actually belongs to another shall issue a proxy to vote the stock to the actual owner on the owner’s demand.</text> </level> </level> <level label="c"> <level label="1"> <text>A stockholder may authorize another person to act as proxy for the stockholder as provided in this subsection.</text> </level> <level label="2"> <level label="i"> <text>A stockholder may sign a writing authorizing another person to act as proxy.</text> </level> <level label="ii"> <text>Signing may be accomplished by the stockholder or the stockholder’s authorized agent signing the writing or causing the stockholder’s signature to be affixed to the writing by any reasonable means, including facsimile signature.</text> </level> </level> <level label="3"> <level label="i"> <text>Subject to subparagraph (ii) of this paragraph, a stockholder may authorize another person to act as proxy by transmitting, or authorizing the transmission of, an authorization for the person to act as proxy to:</text> <level label="1"> <text>The person authorized to act as proxy; or</text> </level> <level label="2"> <text>Any other person authorized to receive the proxy authorization on behalf of the person authorized to act as the proxy, including a proxy solicitation firm or proxy support service organization.</text> </level> </level> <level label="ii"> <text>The authorization may be transmitted by a telegram, cablegram, datagram, electronic mail, or any other electronic or telephonic means.</text> </level> </level> <level label="4"> <text>A copy, facsimile telecommunication, or other reliable reproduction of the writing or transmission authorized under paragraphs (2) and (3) of this subsection may be substituted for the original writing or transmission for any purpose for which the original writing or transmission could be used.</text> </level> </level> <level label="d"> <level label="1"> <text>A proxy is revocable by a stockholder at any time without condition or qualification unless:</text> <level label="i"> <text>The proxy states that it is irrevocable; and</text> </level> <level label="ii"> <text>The proxy is coupled with an interest.</text> </level> </level> <level label="2"> <text>A proxy may be made irrevocable for as long as it is coupled with an interest.</text> </level> <level label="3"> <text>The interest with which a proxy may be coupled includes an interest in the stock to be voted under the proxy, an interest as a party to a voting agreement created in accordance with § 2–510.1 of this subtitle, or another general interest in the corporation or its assets or liabilities.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-508" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <level label="1"> <text>A fiduciary may vote, either in person or by proxy, stock registered in his name as fiduciary.</text> </level> <level label="2"> <text>A fiduciary may vote, either in person or by proxy, stock registered in the name of another person on proof of the fact that legal title to the stock has devolved on him in a fiduciary capacity and that he is qualified to act in that capacity.</text> </level> </level> <level label="b"> <text>A stockholder of record who pledges his shares may vote them, but, as between the pledgor and pledgee, this subsection does not affect the validity of any agreement between them as to the giving of proxies or the exercise of voting rights.</text> </level> <level label="c"> <level label="1"> <text>If stock is registered in the names of two or more persons, whether as fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two or more persons have the same fiduciary relationship with respect to the same stock, unless the secretary of the corporation is given written notice to the contrary and is furnished with a copy of the instrument or order which so provides, their acts with respect to voting have the effects provided in this subsection.</text> </level> <level label="2"> <text>If only one votes, his vote binds all, and if more than one vote, the vote of the majority binds all.</text> </level> <level label="3"> <text>If more than one vote and the vote is evenly split on any particular matter:</text> <level label="i"> <text>Each faction may vote the stock in question proportionally; or</text> </level> <level label="ii"> <text>Any person voting the stock or any beneficiary may apply to a court of competent jurisdiction to appoint an additional person to act with the persons voting the stock and the stock shall then be voted as determined by a majority of those persons and the person appointed by the court.</text> </level> </level> <level label="4"> <text>If the instrument or order given to the secretary of the corporation shows that the interests are unequal, a majority or even split for the purpose of this subsection is a majority or even split in interest.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-509" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Stock registered in the name of a corporation, if entitled to be voted, may be voted by the president, a vice president, or a proxy appointed by either of them, unless another person appointed to vote the stock under a bylaw or a resolution of the board of directors presents a certified copy of the bylaw or resolution, in which case he may vote the stock.</text> </level> <level label="b"> <level label="1"> <text>Shares of a corporation’s own stock owned directly or indirectly by it may not be voted at any meeting and may not be counted in determining the total number of outstanding shares entitled to be voted at any given time unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.</text> </level> <level label="2"> <text>Shares of its own stock are considered owned indirectly by the corporation if owned by another corporation or entity in which the corporation owns shares or interests entitled to cast a majority of all the votes entitled to be cast by holders of all shares or interests outstanding and entitled to vote.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-510" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <text>One or more stockholders of a corporation may confer the right to vote or otherwise represent their stock to a trustee by:</text> <level label="1"> <text>Entering into a written voting trust agreement which specifies the terms and conditions of the voting trust;</text> </level> <level label="2"> <text>Providing an executed copy of the voting trust agreement to the corporation at its principal office or by electronic transmission; and</text> </level> <level label="3"> <text>Transferring their stock for purposes of the agreement to a trustee.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-510.1" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <text>Two or more stockholders of a corporation may enter into a written agreement that specifies that, in exercising any voting rights, the stock held by the parties to the agreement shall be voted:</text> <level label="1"> <text>As provided in the agreement;</text> </level> <level label="2"> <text>As the parties may agree; or</text> </level> <level label="3"> <text>Based on a procedure set forth in the agreement.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-511" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Unless the bylaws provide otherwise, the board of directors may set a record date or direct that the stock transfer books be closed for a stated period for the purpose of making any proper determination with respect to stockholders, including which stockholders are entitled to:</text> <level label="1"> <text>Notice of a meeting;</text> </level> <level label="2"> <text>Vote at a meeting;</text> </level> <level label="3"> <text>Receive a dividend; or</text> </level> <level label="4"> <text>Be allotted other rights.</text> </level> </level> <level label="b"> <text>As set by the bylaws or the board of directors:</text> <level label="1"> <text>The record date may not be prior to the close of business on the day the record date is fixed. Except as otherwise provided in this section, the record date shall be not more than 90 days before the date on which the action requiring the determination will be taken;</text> </level> <level label="2"> <text>The transfer books may not be closed for a period longer than 20 days; and</text> </level> <level label="3"> <text>In the case of a meeting of stockholders, the record date or the closing of the transfer books shall be at least ten days before the date of the meeting.</text> </level> </level> <level label="c"> <text>If a record date is not set and the stock transfer books are not closed:</text> <level label="1"> <text>The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders is the later of:</text> <level label="i"> <text>The close of business on the day on which notice of the meeting is mailed; or</text> </level> <level label="ii"> <text>The thirtieth day before the meeting; and</text> </level> </level> <level label="2"> <text>The record date for determining stockholders entitled to receive payment of a dividend or an allotment of any rights is the close of business on the day on which the resolution of the board of directors declaring the dividend or allotment of rights is adopted, but the payment or allotment may not be made more than 60 days after the date on which the resolution is adopted.</text> </level> </level> <level label="d"> <level label="1"> <text>A meeting of stockholders convened on the date for which it was called may be adjourned from time to time without further notice to a date not more than 120 days after the original record date.</text> </level> <level label="2"> <text>Prior to being convened, a meeting of stockholders may be postponed from time to time to a date not more than 120 days after the original record date.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-512" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Any stockholder, holder of a voting trust certificate in a corporation, or his agent, on request provided in writing or by electronic transmission, may inspect and copy during usual business hours any of the following corporate documents:</text> <level label="1"> <text>Bylaws;</text> </level> <level label="2"> <text>Minutes of the proceedings of the stockholders;</text> </level> <level label="3"> <text>Annual statements of affairs; and</text> </level> <level label="4"> <text>Voting trust agreements provided to the corporation in accordance with § 2–510(2) of this subtitle.</text> </level> </level> <level label="b"> <text>Within 7 days after a request for documents made under subsection (a) of this section is provided to an officer of a corporation, the resident agent of a corporation, or an agent designated by a corporation to maintain corporate documents on the corporation’s behalf, the corporation shall:</text> <level label="1"> <text>Have the requested documents available on file at its principal office; or</text> </level> <level label="2"> <text>Make the requested documents available by electronic transmission.</text> </level> </level> <level label="c"> <level label="1"> <text>Any stockholder or holder of a voting trust certificate in a corporation other than an open–ended investment company may provide to any officer of the corporation, the resident agent of the corporation, or any agent designated by the corporation to maintain corporate documents on the corporation’s behalf, a request in writing or by electronic transmission for a statement showing all stock and securities issued by the corporation during a specified period of not more than 12 months before the date of the request.</text> </level> <level label="2"> <text>Within 20 days after a request is made under this subsection, the corporation shall prepare and have available on file at its principal office or make available by electronic transmission a sworn statement of its president or treasurer or one of its vice–presidents or assistant treasurers which states:</text> <level label="i"> <text>The number of shares or amounts of each class of stock or other securities issued during the specified period;</text> </level> <level label="ii"> <text>The consideration received per share or unit, which may be aggregated as to all issuances for the same consideration per share or unit; and</text> </level> <level label="iii"> <text>The value of any consideration other than money as set in a resolution of the board of directors.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-513" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>Unless the charter of a corporation provides otherwise by reference to this section or the subject matter of this section, this section does not apply, in whole or in part, to holders of any shares of any class or series of stock, other than common stock, that is classified or reclassified by articles of supplementary, or created by articles of incorporation or an amendment to the charter, accepted for record by the Department on or after October 1, 2020.</text> </level> <level label="b"> <text>One or more persons who together are and for at least 6 months have been stockholders of record or holders of voting trust certificates of at least 5% of the outstanding shares of any class or series of stock of a corporation may:</text> <level label="1"> <text>In person or by agent, on request in writing or by electronic transmission, inspect and copy during usual business hours the corporation’s books of account and its stock ledger;</text> </level> <level label="2"> <text>Provide to any officer of the corporation, the resident agent of the corporation, or any agent designated by the corporation to maintain corporate documents on the corporation’s behalf, a request in writing or by electronic transmission for a statement of its affairs; and</text> </level> <level label="3"> <text>In the case of any corporation which does not maintain the original or a duplicate stock ledger at its principal office, provide to any officer of the corporation, the resident agent of the corporation, or any agent designated by the corporation to maintain corporate documents on the corporation’s behalf, a request in writing or by electronic transmission for a list of its stockholders.</text> </level> </level> <level label="c"> <text>Within 20 days after a request for information is made under subsection (b) of this section, the corporation shall prepare and have available on file at its principal office or make available by electronic transmission:</text> <level label="1"> <text>In the case of a request for a statement of affairs, a statement verified under oath by its president or treasurer or one of its vice–presidents or assistant treasurers which sets forth in reasonable detail the corporation’s assets and liabilities as of a reasonably current date; and</text> </level> <level label="2"> <text>In the case of a request for a list of stockholders, a list verified under oath by one of its officers or its stock transfer agent or registrar which sets forth the name and address of each stockholder and the number of shares of each class or series of stock which the stockholder holds.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-514" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="5" subtitle_name="Stockholders"> <level label="a"> <text>The charter or bylaws of a corporation may provide and, unless the charter or bylaws provide otherwise, the board of directors may adopt by resolution a procedure by which a stockholder of the corporation may certify in writing to the corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder.</text> </level> <level label="b"> <text>The resolution shall set forth:</text> <level label="1"> <text>The class of stockholders who may certify;</text> </level> <level label="2"> <text>The purpose for which the certification may be made;</text> </level> <level label="3"> <text>The form of certification and the information to be contained in it;</text> </level> <level label="4"> <text>If the certification is with respect to a record date or closing of the stock transfer books, the time after the record date or closing of the stock transfer books within which the certification must be received by the corporation; and</text> </level> <level label="5"> <text>Any other provisions with respect to the procedure which the board considers necessary or desirable.</text> </level> </level> <level label="c"> <text>On receipt of a certification which complies with the procedure adopted by the board in accordance with this section, the person specified in the certification is, for the purpose set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-601" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>A corporation having capital stock may amend or restate its charter as provided in this subtitle.</text> </level> <level label="b"> <text>Compliance with the provisions of this subtitle is not required in the case of a charter amendment adopted under articles of merger.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-602" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>A corporation may amend its charter from time to time in any respect, provided that:</text> <level label="1"> <text>The amendment may contain only provisions which lawfully could be contained in articles of incorporation at the time of the amendment;</text> </level> <level label="2"> <text>If the amendment effects a change in stock or in the rights of stockholders or effects an exchange, reclassification, or cancellation of stock, the amendment shall contain the provisions necessary to effect the change, exchange, reclassification, or cancellation; and</text> </level> <level label="3"> <text>If the amendment alters the contract rights, as expressly set forth in the charter, of any outstanding stock, and the charter does not reserve the right to make the amendment, any objecting stockholder whose rights are substantially adversely affected has the right to receive the fair value of his stock as an objecting stockholder under Title 3, Subtitle 2 of this article.</text> </level> </level> <level label="b"> <text>In addition to the general power to amend granted in subsection (a) of this section, a corporation from time to time may amend its charter to:</text> <level label="1"> <text>Change its corporate name;</text> </level> <level label="2"> <text>Change, enlarge, or diminish its purposes or the duration of its existence;</text> </level> <level label="3"> <text>Exchange, classify, reclassify, or cancel any of its issued or unissued stock;</text> </level> <level label="4"> <text>Change the designation of any of its issued or unissued stock;</text> </level> <level label="5"> <text>Increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class which it may issue;</text> </level> <level label="6"> <text>Increase or decrease the par value of issued or unissued authorized stock of any class with par value;</text> </level> <level label="7"> <text>Change issued or unissued shares of stock with par value into the same or a different number of shares without par value and change issued or unissued shares of stock without par value into the same or a different number of shares with par value;</text> </level> <level label="8"> <text>Change issued or unissued shares of stock of any class, whether with or without par value, into a different number of shares of the same class or into the same or a different number of shares of another class, either with or without par value;</text> </level> <level label="9"> <text>Change the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of any of its issued or unissued stock; and</text> </level> <level label="10"> <text>Cancel or otherwise affect the right of the stockholders of any class to receive dividends which have accrued but have not been declared.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-603" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>If there is no stock outstanding or subscribed for entitled to be voted on the charter amendment, it shall be approved as provided in this section.</text> </level> <level label="b"> <level label="1"> <text>If the amendment is made before the organization meeting of the board of directors, every incorporator shall execute and file amended articles of incorporation in the same form required by Subtitle 1 of this title for original articles of incorporation.</text> </level> <level label="2"> <text>When the Department accepts amended articles of incorporation for record, they take the place of the original articles.</text> </level> </level> <level label="c"> <text>If the amendment is made at or after the organization meeting of the board of directors, it shall be approved by a majority of the entire board of directors.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-604" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>This section does not apply to a charter amendment by the board of directors in accordance with § 2–105(a)(13) or § 2–309(e) of this title.</text> </level> <level label="b"> <text>A charter amendment by a Maryland corporation registered as an open–end investment company under the Investment Company Act of 1940 shall be approved by a majority of the entire board of directors and in the manner and by the vote required under the Investment Company Act of 1940.</text> </level> <level label="c"> <text>If there is any stock outstanding or subscribed for and entitled to be voted on the charter amendment, it shall be approved as provided in this section.</text> </level> <level label="d"> <text>Except as provided in § 2–112 of this title and subsection (b) of this section, the board of directors of a corporation proposing a charter amendment shall:</text> <level label="1"> <text>Adopt a resolution which sets forth the proposed amendment and declares that it is advisable; and</text> </level> <level label="2"> <text>Direct that the proposed amendment be submitted for consideration at either an annual or a special meeting of the stockholders.</text> </level> </level> <level label="e"> <level label="1"> <text>Notice which states that a purpose of the meeting will be to act on the proposed amendment shall be given by the corporation in the manner required by Subtitle 5 of this title to:</text> <level label="i"> <text>Each stockholder entitled to vote on the proposed amendment; and</text> </level> <level label="ii"> <text>Each stockholder not entitled to vote on the proposed amendment if the contract rights of his stock, as expressly set forth in the charter, would be altered by the amendment.</text> </level> </level> <level label="2"> <text>The notice shall:</text> <level label="i"> <text>Include a copy of the amendment or a summary of the changes it will effect; or</text> </level> <level label="ii"> <level label="1"> <text>Identify a website at which the amendment or a summary of the changes it will effect may be accessed; and</text> </level> <level label="2"> <text>Include a telephone number or an address where the stockholder may request a paper copy of the amendment or summary without charge.</text> </level> </level> </level> </level> <level label="f"> <text>Except as provided in subsection (b) of this section, the proposed amendment shall be approved by the stockholders of the corporation by the affirmative vote of two–thirds of all the votes entitled to be cast on the matter.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-605" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>Notwithstanding the provisions of § 2–604 of this subtitle, unless prohibited in the charter by reference to this section or the subject matter of this section, a majority of the entire board of directors, without action by the stockholders, may amend the charter of a corporation to:</text> <level label="1"> <text>Change the name of the corporation; or</text> </level> <level label="2"> <text>Change the name or other designation or the par value of any class or series of stock of the corporation and the aggregate par value of the stock of the corporation.</text> </level> </level> <level label="b"> <text>A change in the name or other designation of a class or series of stock under subsection (a)(2) of this section may not change the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of the class or series of stock.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-606" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <text>Any number of amendments may be considered at a single meeting of the stockholders or directors.</text> </section> <section article="gca" article_name="Corporations and Associations" number="2-606.1" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>A corporation may not issue any of the stock that is classified, reclassified, or newly authorized by an amendment before the time the amendment is effective, as provided in § 2–610.1 of this subtitle.</text> </level> <level label="b"> <text>Notwithstanding subsection (a) of this section:</text> <level label="1"> <text>The stock issued by a corporation before the time the amendment with respect to the stock is effective shall cease to be voidable as a result of the failure to file articles of amendment or articles of amendment and restatement at the time the amendment becomes effective; and</text> </level> <level label="2"> <text>A right or liability accrued by reason of the issuance of the stock by a corporation before the time the amendment becomes effective shall be extinguished at the time the amendment becomes effective, except to the extent that the person having the right or liability has acted detrimentally in reliance on the right or liability solely by reason of the issuance of the stock.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-607" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>Articles of amendment shall set forth the amendment and state:</text> <level label="1"> <text>That the amendment was advised by the board of directors and approved by the stockholders; or</text> </level> <level label="2"> <text>That the amendment was approved by a majority of the entire board of directors and that:</text> <level label="i"> <text>No stock entitled to be voted on the matter was outstanding or subscribed for at the time of approval; or</text> </level> <level label="ii"> <text>The amendment is limited to a change expressly authorized by § 2–105(a)(13) of this title or § 2–604(b) or § 2–605 of this subtitle to be made without action by the stockholders.</text> </level> </level> </level> <level label="b"> <text>If the amendment increases the authorized stock of the corporation, the articles of amendment also shall include:</text> <level label="1"> <text>Both as of immediately before the amendment and as amended:</text> <level label="i"> <text>The total number of shares of stock of all classes which the corporation has authority to issue;</text> </level> <level label="ii"> <text>The number of shares of stock of each class;</text> </level> <level label="iii"> <text>The par value of the shares of stock of each class or a statement that the shares are without par value; and</text> </level> <level label="iv"> <text>If there are any shares of stock with par value, the aggregate par value of all the shares of all classes; and</text> </level> </level> <level label="2"> <text>If the shares are divided into classes:</text> <level label="i"> <text>A description, as amended, of each class, including the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption; or</text> </level> <level label="ii"> <text>A statement that the information required by item (i) of this item was not changed by the amendment.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-608" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>If authorized by a majority of the entire board of directors, a corporation may restate its charter as provided in this section.</text> </level> <level label="b"> <text>Articles of restatement shall include every charter provision currently in effect, omitting only provisions which this section specifically permits to be omitted, and shall state:</text> <level label="1"> <text>That the corporation desires to restate its charter as currently in effect;</text> </level> <level label="2"> <text>That the provisions set forth in the articles of restatement are all the provisions of the charter currently in effect;</text> </level> <level label="3"> <text>That the restatement of the charter has been approved by a majority of the entire board of directors;</text> </level> <level label="4"> <text>That the charter is not amended by the articles of restatement;</text> </level> <level label="5"> <text>The current address of the principal office of the corporation;</text> </level> <level label="6"> <text>The name and address of the corporation’s current resident agent; and</text> </level> <level label="7"> <text>The number of directors of the corporation and the names of those currently in office.</text> </level> </level> <level label="c"> <text>Articles of restatement may omit all provisions which relate solely to a class of stock if, at the time:</text> <level label="1"> <text>There are no shares of the class outstanding; and</text> </level> <level label="2"> <text>The corporation has no authority to issue any shares of the class.</text> </level> </level> <level label="d"> <text>Articles of restatement may not contain:</text> <level label="1"> <text>Any provisions of the charter which have been eliminated from it by amendment;</text> </level> <level label="2"> <text>The original charter provisions which contained the information required by subsection (b) (5), (6), and (7) of this section, if they are no longer current; or</text> </level> <level label="3"> <text>Any amendment to the charter of the corporation.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-609" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>A complete restatement of the charter may be submitted for approval in the manner required for a charter amendment to a meeting of the corporation’s stockholders or directors, as the case may be.</text> </level> <level label="b"> <text>If the restatement is submitted for approval in the manner required for a charter amendment, any amendments to the charter approved at the meeting may be included in the restatement.</text> </level> <level label="c"> <text>Articles of amendment and restatement shall include the provisions required to be included in both articles of amendment and articles of restatement.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-610" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <text>Articles of amendment, articles of restatement, and articles of amendment and restatement shall be executed for the corporation in the manner required by Title 1 of this article and shall be filed for record with the Department.</text> </section> <section article="gca" article_name="Corporations and Associations" number="2-610.1" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <text>Articles of amendment and articles of amendment and restatement are effective as of the later of:</text> <level label="1"> <text>The time the Department accepts the articles for record; or</text> </level> <level label="2"> <text>The time established under the articles, not to exceed 30 days after the articles are accepted for record.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-611" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>When articles of amendment become effective, the amendment becomes part of the charter of the corporation.</text> </level> <level label="b"> <text>When the Department accepts articles of restatement for record:</text> <level label="1"> <text>If they were not approved in the manner required for a charter amendment, they become evidence of the charter; and</text> </level> <level label="2"> <text>If the articles were approved in the manner required for a charter amendment, they become the charter of the corporation and supersede all prior charter documents.</text> </level> </level> <level label="c"> <text>When articles of amendment and restatement become effective, they become the charter of the corporation and supersede all prior charter documents.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-612" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="6" subtitle_name="Amendment or Restatement of Charter"> <level label="a"> <text>A proposed amendment to the charter of a corporation may be abandoned before the effective date of the articles by majority vote of the entire board of directors of the corporation.</text> </level> <level label="b"> <text>If the articles have been filed with the Department, notice of abandonment shall be given promptly to the Department.</text> </level> <level label="c"> <text>If the proposed amendment to the charter is abandoned as provided in this section, the articles and the amendment have no effect.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-701" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="7" subtitle_name="Ratification of Defective Corporate Acts"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Date of the defective corporate act” means:</text> <level label="1"> <text>The date and the time a defective corporate act was purportedly taken; or</text> </level> <level label="2"> <text>If the exact time is unknown, the date and approximate time a defective corporate act was purportedly taken.</text> </level> </level> <level label="c"> <text>“Defective corporate act” means:</text> <level label="1"> <text>Any corporate act purportedly taken that, at the date of the defective corporate act, would have been within the power of the corporation but is void or voidable due to a failure of authorization; or</text> </level> <level label="2"> <text>An overissue.</text> </level> </level> <level label="d"> <text>“Failure of authorization” means the failure of a corporation to authorize, approve, or otherwise effect a corporate act in compliance with the Maryland General Corporation Law, its charter or bylaws, any action taken by its board of directors, a committee of its board of directors, or its stockholders, or any plan or agreement to which the corporation is a party, if and to the extent that the failure would render the corporate act void or voidable.</text> </level> <level label="e"> <text>“Overissue” means the purported issuance by a corporation of stock of:</text> <level label="1"> <text>A class or series in excess of the number of shares of the class or series that the corporation has the power to issue under § 2–201(a) of this title or the corporation’s charter at the time of the purported issuance; or</text> </level> <level label="2"> <text>Any class or series that is not authorized for issuance by the corporation’s charter at the time of the purported issuance.</text> </level> </level> <level label="f"> <text>“Putative stock” means:</text> <level label="1"> <text>Stock, including stock purportedly issued upon exercise of rights, options, warrants, or other securities convertible into or exercisable for stock, purportedly created or issued as a result of a defective corporate act, that but for the failure of authorization would constitute valid stock;</text> </level> <level label="2"> <text>Stock purportedly issued in an overissue; and</text> </level> <level label="3"> <text>Stock that cannot be determined by the board of directors to be valid stock.</text> </level> </level> <level label="g"> <text>“Valid stock” means stock that has been duly authorized and validly issued in accordance with the provisions of this title.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-702" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="7" subtitle_name="Ratification of Defective Corporate Acts"> <level label="a"> <text>The board of directors of a corporation may ratify a defective corporate act under this subtitle by adopting a resolution stating:</text> <level label="1"> <level label="i"> <text>The defective corporate act to be ratified; and</text> </level> <level label="ii"> <text>If the defective corporate act involved the issuance of putative stock, the number of shares and the class or series of putative stock;</text> </level> </level> <level label="2"> <text>The date of the defective corporate act;</text> </level> <level label="3"> <text>The nature of the failure of authorization of the defective corporate act; and</text> </level> <level label="4"> <level label="i"> <text>If stockholder action is not required under subsection (b) of this section, that the board of directors ratifies the defective corporate act; or</text> </level> <level label="ii"> <text>If stockholder action is required under subsection (b) of this section, that the board of directors approves the ratification of the defective corporate act and directs that the ratification be submitted for consideration at a meeting of the stockholders.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Ratification of a defective corporate act approved in a resolution adopted under subsection (a) of this section shall be submitted for consideration at a meeting of the stockholders if stockholder approval is required or would have been required on the date of the defective corporate act by any provision of:</text> <level label="i"> <text>The Maryland General Corporation Law;</text> </level> <level label="ii"> <text>The charter or bylaws of the corporation;</text> </level> <level label="iii"> <text>Any action taken by the board of directors, a committee of the board of directors, or the stockholders; or</text> </level> <level label="iv"> <text>Any plan or agreement to which the corporation is a party in effect at the time a resolution was adopted under subsection (a) of this section.</text> </level> </level> <level label="2"> <text>To ratify a defective corporate act under this subsection, the stockholders shall adopt a resolution stating:</text> <level label="i"> <text>The defective corporate act to be ratified;</text> </level> <level label="ii"> <text>If the defective corporate act involved the issuance of putative stock, the number of shares and the class or series of putative stock;</text> </level> <level label="iii"> <text>The date of the defective corporate act; and</text> </level> <level label="iv"> <text>That the stockholders ratify the defective corporate act.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>The quorum and voting requirements applicable to action by the board of directors or the stockholders to ratify a defective corporate act under this section shall be the approval standard requiring the larger number or portion of votes under:</text> <level label="i"> <text>The requirements that would be applicable to the defective corporate act proposed to be ratified at the time of ratification; or</text> </level> <level label="ii"> <text>The requirements that would have been applicable to the defective corporate act on the date of the defective corporate act.</text> </level> </level> <level label="2"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, approval by stockholders of the ratification of the election of a director shall require a majority of the votes cast at a meeting at which a quorum is present.</text> </level> <level label="ii"> <text>If the charter or bylaws of the corporation in effect at the time of the ratification of the defective corporate act or in effect at the time of the defective corporate act requires or required a larger number or portion of votes cast by stockholders, by holders of any class or series of stock, or by any specified stockholders to elect the director, then the affirmative vote of the larger number or portion of votes cast shall be required to ratify election of the director.</text> </level> </level> <level label="3"> <text>The presence or approval of holders of stock of any class or series of which no stock is outstanding at the time of ratification or of any person that is no longer a stockholder may not be required.</text> </level> <level label="4"> <text>Holders of putative stock on the record date for determining which stockholders are entitled to vote on a ratification submitted to stockholders under this section shall not be entitled to vote or be counted for quorum purposes in any vote to consider ratification.</text> </level> </level> <level label="d"> <text>Ratification of a defective corporate act under this section shall make the ratified defective corporate act binding on the corporation in accordance with § 2–703 of this subtitle.</text> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-703" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="7" subtitle_name="Ratification of Defective Corporate Acts"> <level label="a"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, ratification of a defective corporate act becomes effective on the date that the board of directors adopts a resolution under § 2–702(a) of this subtitle or, if required by this subtitle, the date that stockholders adopt a resolution under § 2–702(b) of this subtitle.</text> </level> <level label="2"> <text>If the defective corporate act would have required a filing with the Department, ratification of the defective corporate act becomes effective on the later of:</text> <level label="i"> <text>The time that articles of validation filed in accordance with § 2–705 of this subtitle are accepted for record by the Department; or</text> </level> <level label="ii"> <text>The time established in the articles of validation, not to exceed 30 days after the articles are accepted for record.</text> </level> </level> </level> <level label="b"> <text>Beginning at the time ratification is effective and without regard to the 120–day period during which a claim may be brought under § 2–706(b) of this subtitle:</text> <level label="1"> <text>A defective corporate act ratified in accordance with this subtitle is not void or voidable as a result of the failure of authorization identified in a board action under § 2–702(a) of this subtitle and shall be deemed a valid corporate act effective as of the date of the defective corporate act;</text> </level> <level label="2"> <text>Putative stock purportedly issued pursuant to a defective corporate act identified in a board action under § 2–702(a) of this subtitle is not void or voidable and shall be deemed valid stock as of the time it was purportedly issued; and</text> </level> <level label="3"> <text>Any corporate act taken after a defective corporate act ratified in accordance with this subtitle in reliance on the defective corporate act having been validly effected, and any subsequent defective corporate act resulting from the original defective corporate act, shall be valid as of the time the act was taken.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-704" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="7" subtitle_name="Ratification of Defective Corporate Acts"> <level label="a"> <text>If ratification of a defective corporate act requires approval by stockholders under § 2–702(b) of this subtitle, the secretary of the corporation shall give notice of the proposed ratification to all stockholders entitled to notice of the meeting in accordance with § 2–504 of this title, stockholders as of the date of the defective corporate act, and holders of putative stock.</text> </level> <level label="b"> <level label="1"> <text>If a defective corporate act is ratified by the board of directors in accordance with § 2–702(a) of this subtitle without action by stockholders, and notice is not required under subsection (a) of this section, notice of the ratification may be given to stockholders as of the ratification and as of the date of the defective corporate act and holders of putative stock.</text> </level> <level label="2"> <text>In the case of a corporation with a class of equity securities registered under the Securities Exchange Act of 1934, notice of a ratification that does not require approval of stockholders shall be deemed to be given when the ratification has been publicly disclosed in a document furnished to or filed with the Securities and Exchange Commission.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, notice given to holders of putative stock in accordance with this section shall be given to:</text> <level label="i"> <text>Holders of putative stock as of the date of the defective corporate act;</text> </level> <level label="ii"> <text>Where notice is required under subsection (a) of this section, holders of putative stock as of the record date of the meeting; and</text> </level> <level label="iii"> <text>Where notice is given under subsection (b) of this section, holders of putative stock as of the date on which the board of directors adopted a resolution ratifying the defective corporate act.</text> </level> </level> <level label="2"> <text>Notice is not required to be given to holders of putative stock whose identities or addresses cannot be reasonably determined from the records of the corporation.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-705" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="7" subtitle_name="Ratification of Defective Corporate Acts"> <level label="a"> <level label="1"> <text>If a defective corporate act ratified under this subtitle would have required the filing of a charter document with the Department under any provision of this article, the corporation shall file articles of validation in accordance with this section.</text> </level> <level label="2"> <text>If a charter document that was required to be filed with respect to the defective corporate act was not filed, the articles of validation required by this section shall be filed in lieu of the charter document that was not filed.</text> </level> </level> <level label="b"> <text>Articles of validation required by this section shall include:</text> <level label="1"> <text>The title and date of filing of any charter document previously filed with respect to the defective corporate act and any charter document that amended, supplemented, or corrected that charter document;</text> </level> <level label="2"> <text>A statement describing the defective corporate act;</text> </level> <level label="3"> <text>The date of the defective corporate act;</text> </level> <level label="4"> <text>A statement that the defective corporate act was ratified in accordance with this subtitle and a description of the manner of ratification; and</text> </level> <level label="5"> <level label="i"> <text>If a charter document was previously filed with respect to the defective corporate act and no change to the charter document is required to ratify the defective corporate act under § 2–702 of this subtitle, a statement that no change is made to the charter document;</text> </level> <level label="ii"> <text>If a charter document was previously filed with respect to the defective corporate act and a change to the charter document is required to ratify the defective corporate act under § 2–702 of this subtitle, a statement describing the change and all information required to be included under this title; or</text> </level> <level label="iii"> <text>If a charter document was not previously filed with respect to the defective corporate act and the defective corporate act ratified under § 2–702 of this subtitle would have required a charter document to be filed under this title, a statement of the section of this title under which the charter document was required to be filed and any information required to be included in the charter document under that section.</text> </level> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-706" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="7" subtitle_name="Ratification of Defective Corporate Acts"> <level label="a"> <text>Upon application by the corporation, any successor entity to the corporation, any director of the corporation, any record or beneficial holder of valid stock or putative stock, any record or beneficial holder of putative stock as of the date of the defective corporate act, any holder of a voting trust certificate, any holder of a voting trust certificate as of the date of the defective corporate act, or any other person claiming to be substantially and adversely affected by a ratification under this subtitle, a court of the State or a federal court sitting in the State may:</text> <level label="1"> <text>Determine the validity of any ratification under this subtitle; and</text> </level> <level label="2"> <text>Modify or waive any of the procedures required by this subtitle to ratify a defective corporate act.</text> </level> </level> <level label="b"> <text>An action under this section shall be brought within 120 days after:</text> <level label="1"> <text>If the ratification was approved by stockholders, and the notice required by § 2–704(a) of this subtitle was given prior to the stockholder action, the date on which ratification became effective; or</text> </level> <level label="2"> <text>If notice was given or deemed given within 60 days after the ratification, the date on which notice was given or deemed given to stockholders and any holders of putative stock in accordance with § 2–704(b) of this subtitle.</text> </level> </level> </section> <section article="gca" article_name="Corporations and Associations" number="2-707" title_number="2" title_name="Corporations in General -- Formation, Organization, and Operation" subtitle_number="7" subtitle_name="Ratification of Defective Corporate Acts"> <level label="a"> <text>Nothing in this subtitle may be construed to require that ratification of a defective corporate act under this subtitle be the exclusive means of ratifying or validating a defective corporate act or to limit the right of a corporation to file certificates or charter documents in accordance with any other provision of this article.</text> </level> <level label="b"> <text>The absence or failure of ratification in accordance with this subtitle shall not, of itself, affect the validity or effectiveness of any corporate act otherwise lawfully ratified, nor may it create a presumption that any corporate act is or was a defective corporate act or void or voidable.</text> </level> </section>