Subject to the provisions of this subtitle, a corporation from time to time may issue: Stock of any class authorized by its charter; and Securities convertible into stock of any class authorized by its charter. 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. The board of directors of a corporation may, in its sole discretion: Set the terms and conditions of rights, options, or warrants under a stockholder rights plan; and Issue rights, options, or warrants under a stockholder rights plan to designated persons or classes of persons. 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: 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 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.

A subscription for stock of a corporation which is not yet formed is irrevocable for a period of 3 months, unless: The subscription agreement provides otherwise; or Every subscriber consents to the revocation of the subscription. 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. 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. 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.

Before the issuance of stock or convertible securities, the board of directors shall adopt a resolution that: Authorizes the issuance; Sets the minimum consideration for the stock or convertible securities or a formula for its determination; and Fairly describes any consideration other than money. 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. For purposes of this section, the consideration for stock issued as a stock dividend is the resulting capitalization of surplus. This section does not apply to the issuance of stock or convertible securities as part of: A reclassification of stock effected by amendment of the charter; or 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. 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. 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.

A corporation may not issue stock or convertible securities in violation of a limitation or restriction contained in its charter or bylaws. 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: The charter permits the board of directors to authorize the issuance; 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: The par value of the stock to be issued; In the case of stock without par value, the stated capital per share of the shares of the same class then outstanding; or 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 The issuance as authorized by the board of directors was submitted for approval at either an annual or a special meeting of the stockholders; 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 The issuance was approved by the stockholders. 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. 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. This section does not apply to any issuance described in § 2-203(d) of this subtitle.

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: Any additional issue of stock; or Any security convertible into an additional issue of stock. 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. A stockholder to whom a preemptive right has been granted may waive the preemptive right. A written waiver of a preemptive right is irrevocable even though it is not supported by consideration.

The consideration for the issuance of stock, convertible securities, warrants, or options may consist in whole or in part of: Money; Tangible or intangible property; Labor or services actually performed for the corporation; A promissory note or other obligation for future payment in money; or Contracts for labor or services to be performed. 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. 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. 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.

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. 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. Articles supplementary shall include: 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 A statement that the stock has been classified or reclassified by the board of directors under the authority contained in the charter. Articles supplementary shall be executed in the manner required by Title 1 of this article. Articles supplementary are effective as of the later of: The time the Department accepts the articles for record; or The time established under the articles, not to exceed 30 days after the articles are accepted for record. Notwithstanding subsection (a)(2) of this section: 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 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.

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. 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. Articles supplementary shall include: Both as of immediately before the increase or decrease and as increased or decreased: The total number of shares of stock of all classes that the corporation has authority to issue; The number of shares of stock of each class; The par value of the shares of stock of each class or a statement that the shares are without par value; and If there are any shares of stock with par value, the aggregate par value of all the shares of all classes; A statement that the corporation is registered as an open-end company under the Investment Company Act of 1940; and 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. Articles supplementary shall be executed in the manner required by Title 1 of this article. Articles supplementary are effective as of the later of: The time the Department accepts the articles for record; or The time established under the articles, not to exceed 30 days after the articles are accepted for record. Notwithstanding subsection (a)(2) of this section: 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 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.

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: 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 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.

Each corporation shall maintain, or cause to be maintained on its behalf, a stock ledger which contains: The name and address of each stockholder; and The number of shares of stock of each class or series that the stockholder holds. The stock ledger may be in written form or in any other form that complies with § 2–114 of this title. The original or a duplicate of the stock ledger shall be maintained: By the corporation at the principal office of the corporation or at any other office or agency specified in the bylaws; or By or on behalf of the corporation in any form that complies with § 2–114 of this title.

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. A stock certificate may not be issued until the stock represented by it is fully paid. 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. The authorization under paragraph (1) of this subsection does not affect shares already represented by certificates until they are surrendered to the corporation. 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. A corporation may not issue a stock certificate in bearer form.

Each stock certificate shall include on its face: The name of the corporation that issues it; The name of the stockholder or other person to whom it is issued; and The class of stock and number of shares it represents. 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: 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 If the corporation is authorized to issue any preferred or special class in series: The differences in the relative rights and preferences between the shares of each series to the extent they have been set; and The authority of the board of directors to set the relative rights and preferences of subsequent series. 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. 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: Contain a full statement of the restriction; or State that the corporation will furnish information about the restriction to the stockholder on request and without charge. 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.

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. Each certificate which represents any stock, bond, note, guaranty, obligation, or other corporate security: May be sealed with the actual corporate seal or a facsimile of it or in any other form; and The signatures may be either manual or facsimile signatures. 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.

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. 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. The issuance of a new certificate under this section does not constitute an overissue of the shares it represents.

A corporation may, but is not obliged to: Issue fractional shares of stock; Eliminate a fractional interest by rounding up to a full share of stock; Arrange for the disposition of a fractional interest by the person entitled to it; 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 Issue scrip or other evidence of ownership which: Entitles its holder to exchange scrip or other evidence of ownership aggregating a full share for a certificate which represents the share; and 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. The board of directors may impose any reasonable condition on the issuance of the scrip or other evidence of ownership, including a condition that: It becomes void if not exchanged for a certificate representing a full share of stock before a specified date; 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 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. A corporation may not issue a certificate representing scrip in bearer form. 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.

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: The subscription price or other agreed consideration for the stock has not been paid; or Liability is imposed under any other provision of this article. The following persons are not personally liable to the corporation or its creditors for the unpaid portion of the consideration due for stock: A transferee or assignee who acquires stock or a subscription for stock in good faith and without knowledge or notice of the nonpayment; A person who holds the stock as a fiduciary, although the estate in his hands is liable; and A pledgee or other person who holds stock as security. The liability imposed by this section may be enforced only by: The corporation; or Its receiver or other person winding up its affairs.

A director or officer of a corporation may not knowingly and willfully: Authorize or consent to the issuance of unauthorized stock or convertible securities of the corporation; 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 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. 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. 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.