MARVIN MANDEL, Governor                               1635

giving of notice, see §2—504 of this article.

For provisions governing approval when two or
more classes of stock are entitled to vote
separately, see §2—506 of this article.

3-302. RESTRICTIONS ON LIQUIDATING DISTRIBUTIONS.

A DISTRIBUTION IN PARTIAL LIQUIDATION MAY NOT BE
DECLARED OR MADE IF:

(1)  THE DEBTS OF THE CORPORATION EXCEED ITS ASSETS
TAKEN AT FAIR VALUE, THE CORPORATION IS UNABLE TO MEET
ITS DEBTS AS THEY MATURE IN THE ORDINARY COURSE OF
BUSINESS, OR THE PAYMENT OF THE DISTRIBUTION WOULD CAUSE
EITHER OF THESE RESULTS;

(2)   THE STATED CAPITAL OF THE CORPORATION IS
IMPAIRED OR THE PAYMENT OF THE DISTRIBUTION WOULD IMPAIR
ITS STATED CAPITAL, EXCEPT THAT DISTRIBUTIONS MAY BE
DECLARED AND PAID OUT OF SURPLUS, INCLUDING SURPLUS
ARISING FROM A REDUCTION IN STATED CAPITAL;

(3)   ALL ACCUMULATED DIVIDENDS ON CLASSES OF STOCK
OF THE CORPORATION ENTITLED TO CUMULATIVE PREFERENTIAL
DIVIDENDS HAVE NOT BEEN FULLY PAID OR PROVIDED FOR,
UNLESS THE DISTRIBUTION IS MADE TO THE HOLDERS OF STOCK
HAVING PREFERENTIAL RIGHTS IN THE ORDER AND TO THE EXTENT
OF THEIR RESPECTIVE PRIORITIES; OR

(4)   THE PAYMENT OF THE DISTRIBUTION WOULD REDUCE
THE REMAINING NET ASSETS OF THE CORPORATION BELOW THE
AGGREGATE PREFERENTIAL AMOUNT PAYABLE IN THE EVENT OF
VOLUNTARY LIQUIDATION TO THE HOLDERS OF STOCK HAVING
PREFERENTIAL RIGHTS, UNLESS THE DISTRIBUTION IS MADE TO
THE HOLDERS OF THIS STOCK IN THE ORDER AND TO THE EXTENT
OF THEIR RESPECTIVE PRIORITIES.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 23, §
74(a).

In item (1) of this section, the word
"insolvent" is deleted and the definition of
that term, as presently contained in present §
74(a)(1), is substituted.

Item (3) of this section is admittedly unclear
as to whether "stock having preferential
rights" means any such stock, or only stock
entitled to "cumulative preferential dividends
(which) have not been fully paid or provided
for."