1676

LAWS OF MARYLAND

[Ch. 311

(A)   DEFINITION.

(1) IN THIS SECTION, "TRANSFER" MEANS THE
TRANSFER OF ANY INTEREST IN THE STOCK OF A CLOSE
CORPORATION, EXCEPT:

(1)       A TRANSFER BY OPERATION OF LAW TO A
PERSONAL REPRESENTATIVE, TRUSTEE IN BANKRUPTCY, RECEIVER,
GUARDIAN, OR SIMILAR LEGAL REPRESENTATIVE;

(II)         THE ACQUISITION OF A LIEN OR POWER OF
SALE BY AN ATTACHMENT, LEVY, OR SIMILAR PROCEDURE; OR

(III)    THE CREATION OR ASSIGNMENT OF A SECURITY
INTEREST.

(2)       A FORECLOSURE SALE OR OTHER TRANSFER BY A
PERSON WHO ACQUIRED HIS INTEREST OR POWER IN A
TRANSACTION DESCRIBED IN PARAGRAPH (1) OF THIS SUBSECTION
IS A TRANSFER SUBJECT TO ALL THE PROVISIONS OF THIS
SECTION. FOR PURPOSES OF THE TRANSFER, THE PERSON
EFFECTING THE FORECLOSURE SALE OR OTHER TRANSFER SHALL
BE TREATED AS AND HAVE THE RIGHTS OF A HOLDER OF THE
STOCK UNDER THIS SECTION AND §4-602(B) OF THIS TITLE.

(B)   ENUMERATION OF RESTRICTIONS.

A TRANSFER OF THE STOCK OF A CLOSE CORPORATION IS
INVALID UNLESS:

(1)    EVERY STOCKHOLDER OF THE CORPORATION
CONSENTS TO THE TRANSFER IN WRITING WITHIN THE 90 DAYS
BEFORE THE DATE OF THE TRANSFER; OR

(2)   THE TRANSFER IS MADE UNDER A PROVISION
OF A UNANIMOUS STOCKHOLDERS' AGREEMENT PERMITTING THE
TRANSFER TO THE CORPORATION OR TO OR IN TRUST FOR THE
PRINCIPAL BENEFIT OF:

(I)    ORE OR MORE OF THE STOCKHOLDERS OR
SECURITY HOLDERS OF THE CORPORATION OR THEIR WIVES,
CHILDREN, OR GRANDCHILDREN; OR

(II)    ONE OR MORE PERSONS NAMED IN THE
AGREEMENT.

REVISOR'S NOTE: This section presently appears as
Art. 23, §101(a) and (c).

In subsection (a) (1) of this section, the term
"personal representative" is substituted for
"executor" and "administrator"; and the tern
"conservator" is deleted as archaic and
unnecessary.