Ch. 281

LAWS OF MARYLAND

(d)  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 surplus.

(e)  If a corporation acquires by gift, legacy, or purchase
stock which is not full paid, the acquisition may not be made the
basis of a reduction of any liability of the stockholder unless
the assets of the corporation immediately after the reduction,
are not less than the total amount of the corporation's debts
plus its stated capital.

(f)  This section does not prevent a corporation from
issuing or exchanging shares of one class of stock for shares of
another class of stock.]

2-311.

(A)  NO DISTRIBUTION MAY BE MADE IF, AFTER GIVING EFFECT TO
THE DISTRIBUTION:

(1)  THE CORPORATION WOULD NOT BE ABLE TO PAY DEBTS OF
THE CORPORATION AS THE DEBTS BECOME DUE IN THE USUAL COURSE OF
BUSINESS; OR

(2)  THE CORPORATION'S TOTAL ASSETS WOULD BE LESS THAN
THE SUM OF THE CORPORATION'S TOTAL LIABILITIES PLUS, UNLESS THE
CHARTER PERMITS OTHERWISE, THE AMOUNT THAT WOULD BE NEEDED, IF
THE CORPORATION WERE TO BE DISSOLVED AT THE TIME OF THE
DISTRIBUTION, TO SATISFY THE PREFERENTIAL RIGHTS UPON DISSOLUTION
OF STOCKHOLDERS WHOSE PREFERENTIAL RIGHTS ON DISSOLUTION ARE
SUPERIOR TO THOSE RECEIVING THE DISTRIBUTION.

(B)  THE BOARD OF DIRECTORS MAY BASE A DETERMINATION THAT A
DISTRIBUTION IS NOT PROHIBITED UNDER SUBSECTION (A) OF THIS
SECTION EITHER ON:

(1)  FINANCIAL STATEMENTS PREPARED ON THE BASIS OF
ACCOUNTING PRACTICES AND PRINCIPLES THAT ARE REASONABLE IN THE
CIRCUMSTANCES; OR

(2)  A FAIR VALUATION OR OTHER METHOD THAT IS
REASONABLE IN THE CIRCUMSTANCES.

(C)  EXCEPT AS PROVIDED IN SUBSECTION (E) OF THIS SECTION,
THE EFFECT OF A DISTRIBUTION UNDER SUBSECTION (A) OF THIS SECTION
IS MEASURED:

(1) IN THE CASE OF DISTRIBUTION BY PURCHASE,
REDEMPTION, OR OTHER ACQUISITION OF THE CORPORATION'S SHARES, AS
OF THE EARLIER OF:

(I) THE DATE MONEY OR OTHER PROPERTY IS
TRANSFERRED OR DEBT INCURRED BY THE CORPORATION; OR

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