(805 ILCS 5/Art. 9 heading)

(805 ILCS 5/9.05) (from Ch. 32, par. 9.05) Sec. 9.05. Power of corporation to acquire its own shares. (a) A corporation may acquire its own shares, subject to limitations set forth in Section 9.10 of this Act. (b) If a corporation acquires its own shares after the effective date of this amendatory Act of 1993, the shares constitute treasury shares until cancelled as provided by subsection (d) of this Section. (c) A corporation shall file a report under Section 14.25 of this Act in the case of its acquisition of its own shares that occurs either prior to January 1, 1991 or on or prior to the last day of the third month immediately preceding the corporation's anniversary month in 1991. A corporation shall file a report under Section 14.30 of this Act in the case of its acquisition and cancellation of its own shares that occurs after both December 31, 1990 and the last day of such third month. However, if the articles of incorporation provide that the number of authorized shares is reduced by an acquisition and cancellation of shares, then the corporation shall, within 60 days after the date of acquisition, execute and file in duplicate in accordance with Section 1.10 of this Act, a statement of cancellation which sets forth: (1) The name of the corporation. (2) The aggregate number of shares which the

corporation has authority to issue, itemized by classes and series, if any, within a class before giving effect to the cancellation.

(3) The aggregate number of issued shares, itemized

by classes and series, if any, within a class before giving effect to the cancellation.

(4) The number of shares cancelled, itemized by

classes and series, if any, within a class.

(5) The aggregate number of shares which the

corporation has the authority to issue, itemized by classes and series, if any, within a class after giving effect to the cancellation.

(6) The aggregate number of issued shares, itemized

by classes and series, if any, within a class, after giving effect to the cancellation.

(7) A statement, expressed in dollars, of the amount

of the paid-in capital of the corporation before giving effect to the cancellation.

(8) A statement, expressed in dollars, of the amount

of the paid-in capital of the corporation after giving effect to the cancellation.

Upon the filing of the statement of cancellation by the Secretary of State, the paid-in capital of the corporation shall be deemed to be reduced by that part of the paid-in capital which was, at the time of the cancellation, represented by the shares so cancelled, to the extent of the cost from the paid-in capital of the reacquired and cancelled shares or a lesser amount as may be elected by the corporation, and the statement of cancellation shall operate as an amendment to the articles of incorporation so as to reduce the number of authorized shares by the number of shares so cancelled. (d) A corporation, by resolution of the board of directors, may cancel any of its treasury shares. When cancelled, the shares shall constitute authorized but unissued shares unless the articles of incorporation provide that the shares shall not be reissued, in which case the number of authorized shares shall be reduced by the number of shares cancelled. (e) Until the report required by subsection (c) of this Section, or the report required by Section 14.25 or Section 14.30 of this Act reporting a reduction in paid-in capital, shall have been filed in the office of the Secretary of State, the basis of the annual franchise tax payable by the corporation shall not be reduced, provided, however, in no event shall the annual franchise tax for any taxable year be reduced if such report is not filed prior to the first day of the anniversary month or, in the case of a corporation which has established an extended filing month, the extended filing month of that taxable year and before payment of its annual franchise tax. (Source: P.A. 94-605, eff. 1-1-06.)

(805 ILCS 5/9.10) (from Ch. 32, par. 9.10) Sec. 9.10. Distributions to shareholders. (a) The board of directors of a corporation may authorize, and the corporation may make, distributions to its shareholders, subject to any restriction in the articles of incorporation and subject also to the limitations of subsection (c) of this Section. (b) If not otherwise determined under Section 7.25, the record date for determining shareholders entitled to a distribution is the date of the resolution of the board of directors authorizing the distribution. (c) No distribution may be made if, after giving it effect: (1) the corporation would be insolvent; or (2) the net assets of the corporation would be less than zero or less than the maximum amount payable at the time of distribution to shareholders having preferential rights in liquidation if the corporation were then to be liquidated. (d) The board of directors may base a determination that a distribution may be made under subsection (c) either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances. (e) The effect of a distribution under subsection (c) is measured as of the earlier of: (1) the date of its authorization if payment occurs within 120 days after the date of authorization or the date of payment if payment occurs more than 120 days after the date of authorization; or (2) in the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, the earlier of (i) the date money or other property is transferred or debt incurred by the corporation or (ii) the date shareholders cease to be shareholders. (Source: P.A. 83-1025.)

(805 ILCS 5/9.20) Sec. 9.20. Reduction of paid-in capital. (a) A corporation may reduce its paid-in capital: (1) by resolution of its board of directors by

charging against its paid-in capital (i) the paid-in capital represented by shares acquired and cancelled by the corporation as permitted by law, to the extent of the cost from the paid-in capital of the reacquired and cancelled shares or a lesser amount as may be elected by the corporation, (ii) dividends paid on preferred shares, or (iii) distributions as liquidating dividends; or

(2) pursuant to an approved reorganization in

bankruptcy that specifically directs the reduction to be effected.

(b) Notwithstanding anything to the contrary contained in this Act, at no time shall the paid-in capital be reduced to an amount less than the aggregate par value of all issued shares having a par value. (c) Until the report under Section 14.30 has been filed in the Office of the Secretary of State showing a reduction in paid-in capital, the basis of the annual franchise tax payable by the corporation shall not be reduced; provided, however, that in no event shall the annual franchise tax for any taxable year be reduced if the report is not filed prior to the first day of the anniversary month or, in the case of a corporation that has established an extended filing month, the extended filing month of the corporation of that taxable year and before payment of its annual franchise tax. (d) A corporation that reduced its paid-in capital after December 31, 1986 by one or more of the methods described in subsection (a) may report the reduction pursuant to Section 14.30, subject to the restrictions of subsections (b) and (c) of this Section. (e) Nothing in this Section shall be construed to forbid any reduction in paid-in capital to be effected under Section 9.05 of this Act. (f) In the case of a vertical merger, the paid-in capital of a subsidiary may be eliminated if either (1) it was created, totally funded, and wholly owned by the parent or (2) the amount of the parent's investment in the subsidiary was equal to or exceeded the subsidiary's paid-in capital. (Source: P.A. 94-605, eff. 1-1-06.)