State Codes and Statutes
Statutes > New-jersey > Title-14a > Section-14a-7 > 14a-7-1514A:7-15. Authority to pay dividends (1) Subject to any restrictions contained in the certificate of incorporation and to the provisions of section 14A:7-14.1, a corporation may, from time to time, by resolution of its board, pay dividends on its shares in cash, in its own shares, in its bonds or in other property, including the shares or bonds of other corporations.
(2) (Deleted by amendment, P.L. 1988, c. 94.)
(3) (Deleted by amendment, P.L. 1988, c. 94.)
(4) (Deleted by amendment, P.L. 1988, c. 94.)
(5) Unless the certificate of incorporation otherwise provides, a dividend may be paid in shares having a preference in the assets of the corporation upon liquidation, whether or not the net assets at the time of the share dividend are less than the aggregate amount of such prior and newly created preferences.
(6) (Deleted by amendment, P.L. 1988, c. 94.)
L.1968, c.350; amended 1988,c.94,s.45.
14A:7-15.1.Share dividends, share divisions and combinations
14A:7-15.1. Share dividends, share divisions and combinations.
(1) A corporation may effect a share dividend or a division or combination of its shares in the manner hereinafter set forth. As used in this section, the terms "division" and "combination" mean dividing or combining shares of any class or series, whether issued or unissued, into a greater or lesser number of shares of the same class or series.
(2) Except as otherwise provided in the certificate of incorporation, a share dividend, a division or combination may be effected by action of the board alone; except that any division which adversely affects the shares of another class shall be made by amendment. The board in effecting a share dividend, combination or division shall have authority to amend the certificate of incorporation to increase or decrease the par value of shares, increase or decrease the number of authorized shares and to make any other change necessary or appropriate to assure that the rights or preferences of the holders of outstanding shares of any class or series will not be adversely affected by such combination or division. Notwithstanding the foregoing sentence, the board shall not have the authority to amend the certificate of incorporation, and shareholder approval for the amendment shall be required in accordance with subsection 14A:9-2(4) and section 14A:9-3, if as a result of the amendment:
(a) The rights or preferences of the holders of outstanding shares of any class or series will be adversely affected; or
(b) The percentage of authorized shares that remains unissued after the share dividend, division or combination will exceed the percentage of authorized shares that was unissued before the share dividend, division or combination.
(3) If a share dividend, division or combination is effected by board action without shareholder approval and includes an amendment of the certificate of incorporation, there shall be executed on behalf of the corporation and filed in the office of the Secretary of State a certificate of amendment setting forth
(a) The name of the corporation;
(b) The date of adoption by the board of the resolution approving the dividend, division or combination;
(c) That the amendment to the certificate of incorporation will not adversely affect the rights or preferences of the holders of outstanding shares of any class or series and will not result in the percentage of authorized shares that remains unissued after the share dividend, division or combination exceeding the percentage of authorized shares that was unissued before the share dividend, division or combination;
(d) The class or series and number of shares thereof subject to the dividend, division or combination and the number of shares to be issued on the dividend or into which they are to be divided or combined;
(e) The amendment of the certificate of incorporation made in connection with the dividend, division or combination; and
(f) If the dividend, division or combination is to become effective at a time subsequent to the time of filing, the date, which may not exceed 90 days from the date of filing, when the same is to become effective.
(4) If a share dividend, division or combination is effected by action of the board and the shareholders, there shall be executed on behalf of the corporation and filed in the office of the Secretary of State a certificate of amendment as provided in subsection 14A:9-4(3), which certificate shall set forth, in addition to all information required by said subsection, the information required by paragraph 14A:7-15.1(3)(d).
(5) Upon a combination becoming effective, the authorized shares of the class or series subject thereto shall be reduced by the same percentage by which the issued shares of such class or series were reduced as a result of the combination unless the certificate of incorporation otherwise provides or the combination was approved by the shareholders in accordance with subsection 14A:9-2(4) and section 14A:9-3.
(6) (Deleted by amendment, P.L.1988, c.94.)
L.1973, c.366, s.38; amended 1988,c.94,s.46; 1995,c.279,s.8.
14A:7-16.Acquisitions of a corporation's own shares
14A:7-16. Acquisitions of a corporation's own shares.
(1) Subject to the provisions of section 14A:7-14.1, a corporation may acquire its own shares.
(2) (Deleted by amendment, P.L.1988, c.94.)
(3) (Deleted by amendment, P.L.1988, c.94.)
(4) (Deleted by amendment, P.L.1988, c.94.)
(5) No acquisition of its own shares shall be made by a corporation
(a) Contrary to any restrictions contained in the certificate of incorporation;
(b) (Deleted by amendment, P.L.1988, c.94.)
(c) Unless after such acquisition there remain outstanding one or more classes or series of shares possessing, among them collectively, voting rights and unlimited residual rights as to dividends and distribution of assets on liquidation; or
(d) In the case of redeemable shares and within the period of their redeemability, at a price greater than the applicable redemption price plus, in the case of shares entitled to cumulative dividends, the dividends which would have accrued to the next dividend date following the date of acquisition.
(6) (Deleted by amendment, P.L.1988, c.94.)
(7) Unless the certificate of incorporation otherwise provides, a corporation may acquire its shares whether or not the net assets remaining after the transaction are less than the aggregate amount of the preferences of outstanding shares in the assets of the corporation upon liquidation.
(8) In connection with an agreement to acquire its shares, a corporation may grant a security interest in the acquired shares to secure an obligation to pay for the acquisition. The shares shall not be deemed to be reacquired by the corporation and cancelled on its books until the obligation of the corporation is fully paid or discharged.
(9) A corporation may acquire or agree to acquire its shares, notwithstanding that the acquisition would constitute a distribution prohibited under section 14A:7-14.1, if all or part of the purchase price is deferred until such time as the payment would not constitute a prohibited distribution.
L.1968, c.350; amended 1988,c.94,s.47; 1995,c.279,s.9.
14A:7-18.Cancellation of reacquired shares14A:7-18. Cancellation of reacquired shares.
(1) When shares of a corporation are reacquired by purchase, by redemption or by their conversion into other shares of the corporation, the reacquisition shall effect their cancellation, unless the board determines that the shares shall be treasury shares or the bylaws so provide. In addition, any shares which were treasury shares on or before December 1, 1988, shall continue to be treasury shares unless cancelled by the board. The board may cancel treasury shares at any time. Upon their cancellation, shares shall be restored to the status of authorized but unissued shares, unless the certificate of incorporation, or the plan of merger or consolidation in the case of shares acquired by the corporation pursuant to Chapter 11 of this act, provides that such shares shall not be reissued, in which case a certificate of amendment to the certificate of incorporation shall be filed, pursuant to a resolution of the board, reducing the authorized number of shares by the number of shares so cancelled.
(2) The certificate of amendment reducing the authorized shares shall be executed on behalf of the corporation and filed in the office of the Secretary of State not later than 30 days after the cancellation of the reacquired shares not to be reissued. The statement shall set forth:
(a) The name of the corporation;
(b) The number of shares cancelled, itemized by classes and series, and the date of adoption of the resolution of the board cancelling such shares;
(c) The aggregate number of authorized shares, itemized by classes and series, after giving effect to such cancellation;
(d)