MARVIN MANDEL, Governor

1559

In subsection (b) of this section, "legacy" is
substituted for "bequest"; this conforms with
§1—101 of the Estates and Trusts Article which
defines "legacy" as including any property
passing by will.

2-311. LIMITATIONS ON AQUISITION OF OWN STOCK.

(A)      LIMIT ON CONSIDERATION.

(1) A CORPORATION MAY NOT PURCHASE OR REDEEM
SHARES OF ITS STOCK SUBJECT TO REDEMPTION FOR A
CONSIDERATION GREATER THAN EITHER:

(1)    THE REDEMPTION PRICE AT THE TIME OF THE
ACQUISITION; OR

(II) UNLESS A SINKING FUND OR SIMILAR
PROVISION OF THE CHARTER REQUIRES OTHERWISE, THE NET
ASSET VALUE PER SHARE.

(2)   IN DETERMINING NET ASSET VALUE PER SHARE
UNDER THIS SUBSECTION, ASSETS ARE ATTRIBUTABLE TO THE
CLASSES OF STOCK IN THE ORDER OF THEIR RESPECTIVE
SENIORITY. HOWEVER, IN THE CASE OF REDEEMABLE STOCK THE
AMOUNT MAY NOT EXCEED THE CURRENT REDEMPTION PRICE.

(B)   HOLDING COMPANIES.

IF AUTHORIZED BY ITS CHARTER, A CORPORATION THE
BUSINESS OF WHICH SUBSTANTIALLY CONSISTS OF HOLDING,
INVESTING, OR REINVESTING IN STOCK OR SECURITIES OR A
CORPORATION WHICH IS ORGANIZED FOR THAT PURPOSE MAY
REDEEM OR PURCHASE SHARES OF ITS OWN STOCK FOR
CONSIDERATION NOT EXCEEDING:

(1)   THE PROPORTIONATE INTERESTS OF THE SHARES
OF STOCK IN THE ASSETS OF THE CORPORATION; OR

(2)    THE CASH EQUIVALENT OF THE PROPORTIONATE
INTEREST OF THE SHARES OF STOCK IN THE ASSETS OF THE
CORPORATION.

(C)   INSOLVENCY.

A CORPORATION MAY NOT PURCHASE OR REDEEM ANY OF ITS
STOCK IF THE CORPORATION IS INSOLVENT OR THE TRANSACTION
WOULD CAUSE THE CORPORATION TO BECOME INSOLVENT.

(D)    HOW ACQUISITION CHARGED.

EXCEPT FOR AN ACQUISITION UNDER §2-310 (C) OF THIS
SUBTITLE OR SUBSECTION (A) OR (B) OF THIS SECTION, A
CORPORATION MAY PURCHASE OR REDEEM ITS STOCK ONLY OUT OF