1534

LAWS OF MARYLAND

[Ch. 311

(A)   BOARD RESOLUTION.

BEFORE [[EACH]] THE ISSUANCE OF STOCK OR CONVERTIBLE
SECURITIES, THE BOARD OF DIRECTORS SHALL ADOPT A
RESOLUTION WHICH:

(1)   AUTHORIZES THE ISSUANCE;

(2)    SETS THE MINIMUM PRICE OR VALUE OF
CONSIDERATION FOR THE STOCK OR CONVERTIBLE SECURITIES OR
A FORMULA FOR ITS DETERIORATION; AND

(3)    FAIRLY DESCRIBES ANY CONSIDERATION OTHER
THAN MONEY AND STATES:

(I)   ITS ACTUAL VALUE AS DETERMINED BY THE
BOARD OF DIRECTORS; OR

(II)    THAT THE BOARD OF DIRECTORS HAS
DETERMINED THAT THE ACTUAL VALUE IS OR WILL BE NOT LESS
THAN A CERTAIN SUM.

(B)   EFFECT OF RESOLUTION.

IN THE ABSENCE OF ACTUAL FRAUD IN THE TRANSACTION,
THE VALUE OF CONSIDERATION STATED IN THE CHARTER OR
DETERMINED BY THE BOARD OF DIRECTORS IN ITS RESOLUTION IS
CONCLUSIVE FOR ALL PURPOSES.

(C)   STOCK DIVIDEND.

FOR PURPOSES OF THIS SECTION, THE CONSIDERATION
FOR STOCK ISSUED AS A STOCK DIVIDEND IS THE RESULTING
CAPITALIZATION OF SURPLUS.

(D)      RECLASSIFICATION OF STOCK; CONSOLIDATION;
MERGER.

THIS SECTION DOES NOT APPLY TO THE ISSUANCE OF
STOCK OR CONVERTIBLE SECURITIES AS PART OF:

(1)    A RECLASSIFICATION OF STOCK EFFECTED BY
AMENDMENT OF THE CHARTER; OR

(2)   A CONSOLIDATION OR MERGER.

(E)   WHEN FULL PAID AND NONASSESSABLE.

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