PARRIS N. GLENDENING, Governor

Ch. 627

(b)     If stock of the corporation is outstanding and entitled to be voted at the time
the board of directors adopts a resolution authorizing the issuance of additional stock or
convertible securities, the corporation may not issue the stock or the convertible
securities unless:

(1)     The charter permits the board of directors to authorize the issuance;

(2)     The charter does not require stockholder approval of the issuance, and
the actual value of the consideration to be received by the corporation, as determined by
the board of directors or as set forth in the charter, is at least equal to:

(i) The par value of the stock to be issued;

(ii) In the case of stock without par value, the stated capital per share
of the shares of the same class then outstanding; or

(iii) In the case of convertible securities, the par value or the stated
capital per share, as the case may be, of the stock into which the convertible securities are
convertible, if greater than the par value, stated capital per share, or principal amount of
the convertible securities; or

(3)     (i) The issuance as authorized by the board of directors was submitted
for approval at either an annual or a special meeting of the stockholders;

(ii) Notice stating that a purpose of the meeting will be to act on the
proposed issuance was given in the manner required by Subtitle 5 of this title to each
stockholder entitled to vote on the matter; and

(iii) The issuance was approved by the stockholders.

(c)     Unless the charter or bylaws provide otherwise, approval of the stockholders is
not required under this section for the issuance of stock as a stock dividend.

(d)     [ Warrants or options purporting to confer or evidence the right to subscribe
for or otherwise acquire stock or convertible securities may not be issued and are not
valid unless the issuance of the stock or convertible securities subject to the warrants or
options has been authorized as provided in this subtitle.] IF THE ISSUANCE OF STOCK
CONVERTIBLE INTO OTHER STOCK OR OF SECURITIES CONVERTIBLE INTO STOCK,
OR THE ISSUANCE OF WARRANTS OR OPTIONS EXERCISABLE FOR STOCK OR
CONVERTIBLE SECURITIES, IS AUTHORIZED IN THE MANNER REQUIRED BY THIS
SUBTITLE FOR THE ISSUANCE OF THE STOCK INTO WHICH THE STOCK OR
SECURITIES ARE CONVERTIBLE OR FOR WHICH THE WARRANTS OR OPTIONS ARE
EXERCISABLE, THE AUTHORIZATION CONSTITUTES AN AUTHORIZATION OF THE
ISSUANCE OF THE STOCK INTO WHICH THE STOCK OR SECURITIES ARE
CONVERTIBLE OR FOR WHICH THE WARRANTS OR OPTIONS ARE EXERCISABLE,
WITHOUT FURTHER SPECIFIC AUTHORIZATION UNDER THIS SUBTITLE.

(e)     This section does not apply to any issuance described in § 2-203 (d) of this
subtitle.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 1996.

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