MARVIN MANDEL, Governor                             1479

Approved May 17, 1976.

CHAPTER 567

(Senate Bill 235)

AN ACT concerning

Corporations and Associations

FOR the purpose of permitting a Maryland corporation to
have its shares of stock of one or more classes
acquired through exchange by another corporation on
the vote of its stockholders, without affecting the
corporate existence of either corporation,
establishing the requisites, exceptions, procedures,
and stockholder rights applicable to such an
exchange, defining terms, and making related
changes; modifying the requirements and establishing
standards for permitting certain obligations for
future payments by certain officers, directors, and
employees to constitute payment for stock of a
corporation; modifying and conforming certain
language related to the management and exercise of

the power of various corporations; broadening the

powers of a corporation to make certain gifts or
contributions; modifying the provisions imposing
liability on directors who approve certain dividends
and other distributions of assets or approve certain
purchases or redemptions of a corporation's own
shares, providing for contribution from certain
stockholders who accept or receive these dividends
or other distributions and for contribution from
certain other directors, and modifying the defenses
to this liability; establishing an express standard
of care for directors in the performance of their
duties; clarifying that, under certain
circumstances, a director of a Maryland corporation
may be removed with or without cause by the
affirmative vote of a majority of the stockholders
entitled to vote on the election of directors and
creating limitations on the right to remove a
director without cause if a corporation has
cumulative voting or its stockholders have class
voting rights in the election of directors; revising
the power of the board of directors to delegate
matters to a committee of the board of directors and
clarifying the liability of noncommittee directors
for actions of a committee; revising the power of
the board of directors to amend the charter of a
corporation; modifying the provisions relating to
terms permitted to be used in a corporate name;
permitting a Maryland corporation to make loans to
certain officers and employees if, except in certain